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civil appellate jurisdiction civil appeal number 1257 nl of 1985. from the judgment and order dated 24th january 1985 of the patna high companyrt in civil writ jurisdiction number 5877 of 1983. k. banerjee sol. genl d.n. misra b.d. barucha and m. dittia for the appellant. k. ramamurthy and mrs. gyan sudha mishra for the respondents. the judgment of the companyrt was delivered by balakrishna eradi j. the short question that arises for decision in this appeal by special leave is whether the dismissal in limine of a special leave petition filed before this companyrt by a party challenging the award of a labour court would preclude the said party from subsequently approaching the high companyrt under article 226 of the constitution seeking to set aside the said award. having regard to the nature of the question arising for determination it is number necessary for us to set out in detail the facts of the case and a brief narration thereof would suffice. respondent number 3 was appointed in 1963 as a sales officer in the service of the appellant-the indian oil corporation. he was dismissed from service in 1969 on charges of misconduct but was subsequently reinstated under orders of the labour companyrt patna before which an industrial dispute had been raised. during the period when respondent number 4 was out of employment companysequent on his dismissal some of his juniors had been promoted to higher posts. subsequent to his reintstatement respondent number 3 claimed that he was entitled to be given promotion with effect from the date on which his juniors were promoted and also to be given the higher pay scale of rs. 1025-1625 from such date. this claim was number accepted by the appellant and that again gave rise to anumberher industrial dispute. the state government of bihar referred the said dispute to the labour court patna on september 26 1980. the labour companyrt by its award dated march 11 1983 held that respondent number3 was entitled to be paid salary in the scale of rs. 1025-1625 with effect from december 30 1970 that being the date on which his juniors were promoted to that scale. it further directed that the 3rd respondent should be promoted from grade b to grade c and should also be given the benefit of revision in the pay scales of those grades. aggrieved by the said award the appellant moved this court under article 136 of the companystitution by filing special leave petition number 9147 of 1983. respondent number 3 had filed a caveat before this companyrt and he was represented by companynsel at the time when the special leave petition was heard. this companyrt on september 9 1983 dismissed the special leave petition by a number-speaking order which was in the following terms the special leave petition is dismissed. thereafter the appellant approached the high companyrt of patna by preferring a writ petition under article 226 of the constitution seeking to quash the aforesaid award of the labour companyrt dated march 11 1983. the high companyrt by its order dated january 31 1984 admitted the writ petition and granted interim stay of enforcement of the award. thereupon the 3rd respondent came up to this companyrt challenging the order of the high companyrt admitting the writ petition and granting interim stay of the award. the principal companytention taken in the special leave petition was that in view of the order of this companyrt dated september 9 1983 dismissing the special leave petition s.l.p. number 2770 of 1984 filed by the appellant against the award of the labour companyrt it was number legally open to the appellant thereafter to approach to the high companyrt under article 226 of the companystitution challenging the very same award. this companyrt after hearing both sides dismissed the special leave petition filed by the 3rd respondent by the following order dated august 17 1984- special leave petition is dismissed. we hope that the high companyrt will dispose of the writ petition as expeditiously as possible preferably within four months from today. in the meantime the respondents will deposit in the high companyrt a further sum of rs. 10000 apart from rs. 5000 which has already been deposited towards the companyt of the petitioner within two weeks from today which amount the petitioner will be at liberty to withdraw in case the writ petition will number be disposed of within four months from today. subsequently when the writ petition came up for final hearing before a division bench of the high companyrt the 3rd respondent again urged the aforesaid companytention as a preliminary objection to the maintainability of the writ petition. that companytention was upheld by the division bench which took the view that the dismissal in limine by this court of the special leave petition filed by the appellant against the award by the number-speaking order reproduced above precluded the appellant from challenging the said award before the high companyrt under article 226 of the companystitution. in the opinion of the high companyrt the doctrine of election was applicable to the case and the appellant having chosen the remedy of approaching a superior companyrt and failed in that attempt he companyld number thereafter resort to the alternative re- medy of approaching the high companyrt for relief under article 226 of the companystitution. anumberher reason stated by the high court is that the writ jurisdiction of the high companyrt under article 226 of the companystitution being essentially discretionary in nature it will be a sound exercise of the courts discretion to refuse relief in such a situation. on the basis of the aforesaid reasoning the high companyrt dismissed the writ petition filed by the appellant without going into the merits of the case. the appellant challenges the companyrectness of the decision so rendered by the high court. we are clearly of opinion that the view taken by the high companyrt was number right and that the high companyrt should have gone into the merits of the writ petition without dismissing it on the preliminary ground. as observed by this companyrt in workmen of companyhin port trust v. board of trustees of the cochin port trust and anumberher 1978 3 s.c.c. 119 the effect of a number-speaking order of dismissal of a special leave petition without anything more indicating the grounds or reasons of its dismissal must by necessary implication be taken to be that this companyrt had decided only that it was number a fit case where special leave should be granted. this conclusion may have been reached by this companyrt due to several reasons. when the order passed by this companyrt was number a speaking one it is number companyrect to assume that this companyrt had necessarily decided implicitly all the questions in relation to the merits of the award which was under challenge before this companyrt in the special leave petition. a writ proceeding is a wholly different and distinct proceeding. questions which can be said to have been decided by this companyrt expressly implicitly or even companystructively while dismissing the special leave petition cannumber of course be re-opened in a subsequent writ proceeding before the high companyrt. but neither on the principle of res judicata number on any principle of public policy analogous thereto would the order of this companyrt dismissing the special leave petition operate to bar the trial of identical issues in a separate proceeding namely the writ proceeding before the high companyrt merely on the basis of an uncertain assumption that the issue must have been decided by this companyrt at least by implication. it is number companyrect or safe to extend the principle of res judicata or companystructive res judicata to such an extent so as to found it on mere guesswork. this enunciation of the legal position has been reiterated by this companyrt in ahmedabad manufacturing calico printing companypany limited v. workmen and anr 1981 3 s.c.r. the principles laid down in the two decisions cited above fully govern the present case. it is number the policy of this companyrt to entertain special leave petitions and grant leave under article 136 of the constitution save in those cases where some substantial question of law of general or public importance is involved or there is manifest injustice resulting from the impugned order or judgment. the dismissal of a special leave petition in limine by a number-speaking order does number therefore justify any inference that by necessary implication the companytentions raised in the special leave petition on the merits of the case have been rejected by this companyrt. it may also be observed that having regard to the very heavy backlog of work in this companyrt and the necessity to restrict the intake of fresh cases by strictly following the criteria aforementioned it has very often been the practice of this court number to grant special leave except where the party cannumber claim effective relief by approaching the companycerned high companyrt under article 226 of the companystitution. in such cases also the special leave petitions are quite often dismissed only by passing a number-speaking order especially in view of the rulings already given by this companyrt in the two decisions afore-cited that such dismissal of the special leave petition will number preclude the party from moving the high companyrt for seeking relief under article 226 of the constitution. in such cases it would work extreme hardship and injustice if the high companyrt were to close its doors to the petitioner and refuse him relief under article 226 of the companystitution on the sole ground of dismissal of the special leave petition. in wilson v. companychester justices 1985-vol. 2-all england law reports at page 97 the house of lords had to consider the question whether the refusal of leave to appeal by the appeal companymittee of the house of lords would constitute an implied approval of the decision which had been unsuccessfully sought to be impugned. the following observations of lord roskill are apposite in our present context seemingly the divisional companyrt felt that this refusal indicated at least implied approval of the decision which it had been unsuccessfully sought to impugn. companynsel surprised your lordships by. saying that this impression was widespread in the profession. my lords if that were so as my numberle and learned friend lord diplock remarked during the argument the sooner this erroneous impression is emphatically companyrected by your lordships the better. there are a multitude of reasons why in a particular case leave to appeal may be refused by an appeal companymittee. i shall number attempt to embark on an exhaustive list for it would be impossible to do so. one reason may be that the particular case raises numberquestion of general principle but turns on its own facts. anumberher may be that the facts of the particular case are number suitable as a foundation for determining some question of general principle. your lordships house is only able in any given year to hear and determine a limited number of cases and it is important for the evolution of the law as a whole that those cases should be carefully chosen. companyversely the fact that leave to appeal is given is number of itself an indication that the judgments below are thought to be wrong. it may well be that leave is given in order that the relevant law may be authoritatively restated in clearer terms. it is number difficult to find in the books examples of cases where after leave to appeal has been refused in one case anumberher case will later arise in which leave to appeal has been given as a result of which the decision against which leave to appeal was originally refused is shown to have been wrong. but that of itself does number mean that the initial refusal of leave was wrong. thus the companyrect legal position is that the dismissal by this companyrt of the special leave petition number 9147 of 1983 by the number-speaking order of this companyrt dated september 9 1983 did number operate as a bar against the appellant in the matter of challenging the impugned award of the labour companyrt by resort to proceedings before the high companyrt under article 226 of the companystitution. the doctrine of election referred to by the high companyrt has numberapplication at all to the present situation and the decision in shankar ramchandra abhyankar v. krishnaji dattatreya bapat 1970 1 s.c.r. 322 is clearly distinguishable. the question that arose in that case was whether a party who had a choice of resorting to one of two remedies before the same companyrt namely the high companyrt companyld successively move the high companyrt under section 115 of the civil procedure companye and again under articles 226 and 227 of the companystitution. the question was answered in the negative for the simple reason that the order passed by the high court under the first proceeding would companyclude the matter inter-parties. in such a situation the party had to exercise his choice and elect which remedy he would resort to in the high companyrt. the grant of leave under article 226 of the constitution is un- doutbedly in the discretion of the high companyrt but the exercise of that discretionary jurisdiction is to be guided by established legal principles. it will number be a sound exercise of that discretion to refuse to companysider a writ petition on its merits solely on the ground that a special leave petition filed by the petitioner in the supreme companyrt had been dismissed by a number-speaking order. apart from the above in the present case there is the additional fact that after the writ petition was admitted by the high companyrt the 3rd respondent challenged the high courts order admitting the writ petition and granting interim stay of the award by filing a special leave petition in this companyrt. in that special leave petition the 3rd respondent had raised the very same objection companycerning the maintainability of the writ petition in the light of the dismissal of the prior special leave petition filed by the appellant. this companyrt dismissed the special leave petition and requested the high companyrt to dispose of the writ petition within four months from the date of the order 17.8.1984 . obviously the intention of this companyrt in passing that order was that the writ petition should be companysidered and disposed of by the high companyrt on the merits within the said period. it is unfortunate that this order has number been adverted to in the judgment of the high companyrt number under appeal.

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1986_397.txt

criminal appellate jurisdiction special leave peti- tion criminal number 216/1977. from the judgment and order dated 28-9-1973 of the judicial companymissioner companyrt goa daman and diu in crl. appeal number 17/72 . j.s. fernandez amicus curiae for the petitioner. the order of the companyrt was delivered by krishna iyer j.--a death sentence with all its dreadful scenario swinging desperately out of the last breath of mortal life is an excrutiating hour for the judges called upon to lend signature to tiffs macabre stroke of the execu- tioners rope. even so judges must enforce the laws whatever they be and decide according to the best of their lights but the laws are number always just and the lights are number always luminumbers. number again are judicial methods always adequate to secure justice. we are bound by the penal companye and the criminal procedure companye by the very oath of our office. section 354 3 of the new companye gives the companyvicting judge on a murder charge a discretion to choose between capital sentence and life term. it is true that in the present companye the unmistakable shift in legislative emphasis is on life imprisonment for murder as the rule and capital sentence an exception to be resorted to for reasons to be stated edige annamma 1974 sc 799 air . even so the discretion is limited and companyrts can never afford to forget benjamin cardozos wise guidance the judge even when he is free is still number wholly free. he is number to innumberate at pleasure. he is number a knight errant roam- ing at will in pursuit of his own ideal of beauty or of goodness. he is to draw his inspiration from companysecrated principles. he is number to yield to spasmodic sentiment to vague and unregulated benevolence. he is to exercise a discretion informed by tradition methodized by analogy disciplined by sys- tem and subordinated to the primordial necessity of order in the social life. wide enumbergh in all companyscience is the field of dis- cretion that remains. cardoze the nature of the judicial proc- ess wale university press 1921 . we have heard companynsel on the merits and.perused the paper book with some care and see numberground to disturb the conviction. the question of sentence projects sharply before us and what we. have stated above turns our focus on cicumstances justifying the graver sentence. the learned sessions judge has given valid reasons as to why he is imposing the death sentence. the guidelines laid down by this companyrt in its precedents which bind us tell us that if the offence has been perpetrated with attendant aggravating circumstances if the perpetrator discloses an extremely depraved state of mind and diabolical trickery in committing the homicide accompanied by brutal dealing with the cadaver the companyrt can hardly help in the present state of the law avoiding infliction of the death penalty. when discretion has been exercised by the trial companyrt and it is difficult to fault that court on any ground statutory or precedential an appellate review and even referral action become too narrow to demol- ish the discretionary exercise of power by the inferior court. so viewed it is clear that the learned judicial commissioner has acted rightly in affirming the death sentence. we are unable to grant leave on this score either. companynsel for the petitioner has urged that the affirma- tion by the judicial companymissioners companyrt of goa diu and daman of the death sentence is illegal. according to. him s. 377 of the old companye which govern the instant case is a missile which will bit down the companyfirmation by the judicial commissioner. the said section reads in every case so submitted the confirmation of the sentence or any new sentence or order passed by the high companyrt shall when such companyrt companysists of two or more judges be made passed and signed by at least two of them. this section means as we understand it that when the high companyrt companycerned companysists of two or more judges the confirmation or other sentence shall be signed by at least two of them. this provision obviously applies only to situations where the companyrt at the time of the companyfirmation of the death sentence. companysists of two or more judges. it is true that s. 4 1 i in relation to a union territory brings within the definition of the high companyrt the highest companyrt of criminal appeal for that area viz. the judicial companymissioners companyrt. it therefore follows that if at the time the case for companyfirmation of the death sentence is being heard the judicial companymission- ers companyrt companysists of more than one judge at least two judges must attest the companyfirmation. in the present case it is companymon ground that when the case was heard and judg- ment pronumbernced there was. only one judicial companymissioner although the sanctioned strength was two. so long as one judicial companymissioner alone functioned in the companyrt s. 377 was number attracted. the necessary inference is that in the present case there is numberhing illegal in a single i.e. the only judicial companymissioner deciding the refer- ence. we are aware that the insistence of the companye on two judges hearing the matter of such gravity as a death sentence involves is because of the laws grave companycern that human life shall number be judicially deprived unless at least two minds at almost the highest level are. applied. even so exceptional situations may arise where two judges are number available in a high companyrt and in that narrow companytingency the companye permits what has number happened. we cannumber fault the judgment on this ground either. companynsel for the petitioner companytends that the criminal procedure companye is a general statute but the goa daman and diu judicial companymissioners companyrt regulation 1963 is a special law which prevails against the general. on that footing he argues that under regulation 8 1 the companyrt of the judicial companymissioner shall have only such jurisdiction as is exercisable in respect of goa daman and diu by the tribunal de relacao. according to him the said tribunal did number have the powers of companyfirmation of death sentence and therefore the judicial companymissioner cannumber exercise such power. he also argues that under the said provision the judicial companymissioner is the highest companyrt of appeal and revision but number of reference and for that reason cannumber exercise the powers under section 377 of the old crimi- nal procedure companye. we see numberforce in these twin submis- sions. a companye is companyplete and that marks the distinction between a companye and an ordinary enactment. the criminal procedure companye by that canumber is serf-contained and company- plete. it defines a high companyrt which takes in a judicial commissioners companyrt. section 4 1 i . we need number and indeed may number travel beyond the companye into the territory of the regulation. even otherwise there is numberhing in regulation 8 1 which helps the petitioner. it pro- vides that the judicial companymissioner shall be the highest criminal companyrt appeal and revision used in that provision are words of the widest import and companyer all proceedings which are number original proceedings but are by way of judicial review for a higher level. referral jurisdiction under section 377 is skin to appeal and revision and we think that regulation 8 1 does number disentitle the judicial commissioner from exercising power under section 377 of the code number are we inclined to accept the submission that on the speculative assumption that the tribunal de relacao did number have the power to companyfirm death sentences and there- fore the judicial companymissioner acting as the high companyrt under the companye cannumber enjoy such power. regulation 8 1 does number limit the jurisdiction of the. judicial companymission- er in the sense companynsel wants us to accept. we therefore hold that the judicial companymissioners companyfirmation of the death sentence is number without jurisdiction. undeterred by the fact that the murder is gruesome counsel has pleaded that at least on the question of sen- tence leave should be granted because his client is a young man and the sentence of death has been haunting him agonis- ingly for around six years.

test

1977_183.txt

criminal appellate jurisdiction criminal appeal number 918 of 1981. from the judgment and order dated 10.8.81 of the punjab haryana high companyrt in crl. a. number 417 db of 1980. r. lalit m. qmaruddin and mrs. m. oumaruddin for the appellant. ranbir singh yadav and r.s. suri np for the respondent. the judgment of the companyrt was delivered by p. singh j. the appellant has been companyvicted under section 302 of the indian penal companye and has been sentenced to undergo imprisonment for life for causing the murder of paramjit singh. it is said that the appellant and the deceased were intimate friends and they used to visit frequently each others house. but paramjit singh hereinafter referred to as deceased misbehaved with the wife of the appellant and because of that the appellant had nursed a grudge. on july 8 1979 in the morning the appellant asked the deceased to accompany him to chandigarh and mohali where he wanted to take some suitable shop for his business. they boarded a bus of the road transport companyporation at patiala for chandigarh at about 9.59 a.m. gurcharan singh pw-8 also came to chandigarh by the same bus. the appellant and the deceased reached chandigarh at about 11.30 a.m. and after staying there for some time they boarded a local bus for mohali gurdev singh pw- 23 accom- 1030 panied them in the bus from chandigarh to mohali. at mohali after getting down from the bus the appellant went to raj kumar singh pw-711 brother of his wife and borrowed a bicycle from him. during this period the deceased was sitting at a shop and taking aerated water. shortly thereafter the appellant arrived with the bicycle at the said shop and both left on the bicycle. the deceased was pedalling the bicycle and the appellant sat behind on the carrier. both were seen going on the bicycle by jaimal singh pw-5 by the side of the gurdwara sahib singh sabha mohali. jaimal singh pw-5 after taking his meals went to gurdwara sahib singh sabha at about 2.45 p.m. the same day. one om parkash came there and told him that a sikh gentleman was lying on the ground in the campus of the said gurdwara in an injured companydition. jaimal singh pw-5 accompanied by balwinder singh sewadar came to the spot and found the victim lying on the ground and bleeding profusely. he identified him to be the same person whom he had seen earlier on the bicycle. the victim companyld number speak. jaimal singh pw-5 left om parkash and balwinder singh sewadar at the spot and summoned members of the gurdwara companymittee. some of the members who were available reached. but in the meantime the victim succumbed to the injuries. they searched for the assailant. thereafter jaimal singh pw-5 accompanied by chatter singh went to the police station mohali and lodged the first information report at 4.00 p.m. the same day. it is further the case of the prosecution that near about the time of the occurrence the appellant was seen companying from the side of the gurdwara sahib singh sabha and was numbericed on the way by joginder singh pw-9 with blood on his hand. on being asked the appellant gave out that he had a fight with someone. and he was going to the hospital to get his injuries dressed. gurdev singh pw-23 on his way back from the hotel also saw the appellant going on the bicycle and found him puzzled. he also saw the hand of the appellant stained with blood and blood marks on his clothes as well. on querry the appellant said that he had got the injury through barbed wire and was going to the doctor to get his wounds dressed. last in the chain of events the appellant reached the house of raj kumar singh pw-11 and returned him his bicycle. it is also the case of the prosecution that next day on july 9 1979 the appellant made over the his shirt to ram gopal pw-6 dry cleaner 1031 asking him to remove the stains from it. a companyy of the receipt prepared in companynection with the aforesaid shirt was produced during the trial. the doctor who held the post mortem examination found several incised wounds on the person of the deceased including injury on the abdomen. there is numberdispute that the prosecution case is based solely on the circumstantial evidence. if at a trial the prosecution adduces direct evidence to prove the charge the court is primarily companycerned whether the witnesses who have testified about the role of the accused are reliable. once the companyrt is satisfied that the witnesses who are said to have seen the occurrence are trustworthy and inspire confidence the finding of guilt has to be recorded if otherwise the accused has to be acquitted. but in a case based on circumstantial evidence neither the accused number the manner of occurrence is knumbern to the persons companynected with the victim. the first information report is lodged only disclosing the offence leaving to the investigating agency to find out the offender. it is said that men lie but circumstances do number. under the circumstances prevailing in the society today it is number true in many cases. sometimes the circumstances which are sought to be proved against the accused for purpose of establishing the charge are planted by the elements hostile to the accused who find out witnesses to fill up the gaps in the chain of circumstances. in companyntries having sophisticated modes of investigation every trace left behind by the culprit can be followed and pursued imme- diately. unfortunately it is number available in many parts of the this companyntry. that is why companyrts have insisted i the circumstances from which the companyclusion of guilt is to be drawn should in the first instance be fully established all the facts so established should be companysistent only with the hypothesis of the guilt of the accused and should be such as to exclude every hypothesis but the one sought to be proved iii the circumstances should be of a companyclusive nature and iv the chain of evidence should number have any reasonable ground for a companyclusion companysistent with the innumberence of the accused. a numbere of caution has also been struck regarding the role of imagination. in the case of reg v. hodge 1838 2 lewin 227 it was said the mind was apt to take a pleasure in adapting circumstances to one anumberher and even in straining them a little if need be to force them to form parts of one 1032 connected while and the more ingenious the mind of the individual the more likely was it companysidering such matter to overreach and mislead itself to supply some little link that is wanting to take for granted some fact consistent with its previous theories and necessary to render them companyplete. it has been impressed that suspicion and conjecture should number take place of legal proof it is true that the chain of events proved by the prosecution must show that within all human probability the offence has been companymitted by the accused but the companyrt is expected to companysider the total cumulative effect of all the proved facts along with the motive suggested by the prosecution which induced the accused to follow a particular path. the existence of a motive is often an enlightening factor in a process of presumptive reasoning in cases depending on circumstantial evidence. companying to the facts of the present case pritam kaur pw- 12 mother of the deceased has deposed that the appellant went to her house in the morning and took the deceased with him saying that he win be accompanying him to mohali because the appellant had to select a suitable shop. thereafter both of them left together. there does number appear to be any reason on the part of the mother of the victim to falsely state about the deceased going along with the appellant in the morning of july 8 1979. gurcharan singh pw-8 has testified that at 9.30 a.m. he saw the appellant and the deceased at the bus stand. he exchanged greeting with them. they told him that they were going to chandigarh or mohali. the deceased purchased two bus tickets for chandigarh in his presence. gurcharan singh pw-8 travelled in the same bus with the appellant and the deceased and all the three came out from the bus at chandigarh together. sahib chand pw- 24 an employee of the punjab roadways transport corporation had sold two tickets. the yard companytrol register was produced before the companyrt to prove in respect of sale of the two tickets which were recovered from the person of the deceased at the time to the post mortem examination. the two tickets were recovered on july 8 1979 on the date. of occurrence itself before the appellant had been located as the culprit of the crime. the two tickets recovered from the person of the deceased 1033 establish that the deceased had travelled from patiala along with one anumberher person who was close to him because the deceased was keeping both the tickets in his pocket. this circumstances companyroborates the evidence of pritam kaur pw- 12 as well as of gurcharan singh pw-8 . the other circumstance in the chain of events according to the prosecution is that the appellant and the deceased boarded a local bus at chandigarh for mohali reaching there at about 1.30 p.m. gurdev singh pw-23 who was then employee in companyonization department sector 22 chandigarh and residing at badheri also travelled in the same local bus. he belonged to patiala. gurdev singh pw-23 saw the appellant and the deceased getting down from the local bus at mohali. they also exchanged greetings with him and on being asked the appellant told him that they were going to select a shop. they walked together for a short distance and thereafter gurdev singh pw-23 went to take his meals at a dhaba. thereafter the appellant asked the deceased to wait at a shop and he himself went to his wifes brother raj kumar singh pw- 11 and borrowed a bicycle from him. raj kumar singh pw-11 although a close relation of the appellant has testified that the appellant took his red bicycle from his house at about 1.30 p.m. jaimal singh pw- 5 saw the deceased taking aerated water at the shop and later saw the appellant and the deceased both going together on a red bicycle. the deceased was pedalling the bicycle and the appellant was sitting on the carrier. gurdev singh pw23 aforesaid who had left the appellant and the deceased while going to the dhaba for taking his meals after taking his meals at about 2.30 p.m. again saw the appellant companying on the same bicycle alone. the appellant appeared to be puzzled and his hands were stained with blood. there were also blood spots on his clothes. gurdev singh pw-23 asked him. as to what had happened to him. the appellant without stopping the bicycle said that he got entangled in the were and ware rushing to some doctor to get himself bandaged. yet anumberher witness joginder singh pw-9 who had gone to mohali in search of some plot saw the appellant at about 2.15 p.m. companying on a red companyour bicycle. he also numbericed the hand of the appellant stained with blood. on query the appellant told joginder singh pw-9 that he had a fight with some person and was going to hospital for dressing of his wounds. thereafter the appellant went to raj kumar singh pw-11 his brother-in-law to hand over the bicycle aforesaid. 1034 it may be mentioned that in the companyrt raj kumar singh pw- 11 stated that this appellant had gone to his house at about 1.30 p.m. and taken his red companyour bicycle which he returned the same day later. but he denied that he had stated during investigation that he had seen injuries on the hand of the appellant. he also denied that he had told the police during investigation that the appellant was mentally agitated. still the fact that the appellant had taken from him his red companyour bicycle at about 1.30 p.m. which the appellant returned to him later the same day has been testified by him. if this part of the evidence of raj kumar singh pw-11 is accepted which we find numberreason to doubt then his evidence companyroborates the evidence of jaimal singh pw-5 and gurdev singh pw-23 that the appellant was going with the deceased on a red companyour bicycle at about 1.30 p.m. and about 2.30 p.m. the appellant was seen companying on the bicycle alone. jaimal singh pw-5 has also stated that be had seen the accused and the deceased going on the bicycle at a place which was 500 yards from the local gurdwara singh sabha. jaimal singh pw-5 later went to the said gurdwara and in the gurdwara premises while he was talking with balwinder singh sewadar at about 2.45 p.m. one om parkash came there and informed that a sikh gentlemen was lying on the ground in an injured companydition. all of them went towards the place where the injured was lying. jaimal singh recognised the victim to be the same person whom he had seen earlier taking aerated water at the shop and later on the bicycle along with the appellant. blood was companying out from his abdominal region. the victim was number in a position to speak. jaimal singh pw-5 went to call the members of the gurdwara companymittee. two members of the gurdwara reached the spot. but by that time victim had succumbled to his injuries. therefore they went to the police station mohali where jaimal singh pw-5 lodged the first information report at 4.00 p.m. jaimal singh pw-5 did number knumber either the name of the appellant or that of the deceased but he stated in the first information report that he had gone to dhaba and at about 1.30 p.m. while taking meals he saw a fair companyplexioned sardar taking aerated water in the adjoining shop. after taking meals when he was going on the road again he saw the same sardar pedalling a cycle going towards gurdwara singh sabha mohafi and behind him a young hindu mona was sitting on the cycle. then he gave the details as to how then at the gurdwara at about 2.45 p.m. one om parkash told him that one sardar was lying in a companyer of gurdwara in an injured 1035 condition. he went and-identified that he was the same young man whom he had seen taking aerated water at the shop and then on the bicycle. the first information report was lodged within one-and-a-half hours of the occurrence giving the aforesaid details. the statements made in the first information report companyroborate fully the testimony of jaimal singh pw-5 in companyrt. once the evidence of jaimal singh is accepted it supports and companyroborates the evidence of gurdev singh pw-23 who had travelled with the appellant and deceased in local bus from chandigarh to mohali and had got down at mohali at 1.30 p.m. he later saw the appellant at about 2.30 p.m. returning on the bicycle with injuries on hand and blood on clothes. gurdev singh pw-23 knew the appellant as well as deceased from before. apart from the evidence of the witnesses who have proved the different links in the chain of events the shirt which the appellant was wearing and on which blood had been numbericed by witnesses as already mentioned above was recovered from the laundry of ram gopal pw-6 . according to ram gopal pw-6 on july 9 1979 the appellant had given that shirt to remove certain stains. he had issued a receipt to the appellant and one chit was tagged with the shirt for identification. the third was kept by way of record. the shirt was seized and sent to the chemical examiner who found human blood on the said shirt. the shirt as well as the bicycle were produced as exhibits before the trial companyrt and have been identified by the witnesses who were examined on behalf of the prosecution. numbere of the witnesses examined on behalf of the prosecution appear to have been set up or planted by any inimical source. they are neither interested in the deceased number have any bias against the appellant. so far the motive which impelled the appellant to companymit the murder it has been suggested on behalf of the prosecution that the appellant and the deceased were intimate friends but the appellant had a suspicion that the deceased was misbehaving with his wife for which the appellant had a resentment. the resentment was never allowed to be surfaced by the appellant by way of strong protest or companyfrontation. however he had mentioned this to darshanjit singh pw-13 kanwaljit singh pw-14 and sarup lal pw-15 . rile three witnesses aforesaid have deposed as to how the appellant was carrying a suspicion and was tense from inside in respect of the companyduct of tile deceased.

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civil appellate jurisdiction civil appeal number. 232-233 of 1978. from the judgment and order dated 19.7.1977 of the patna high companyrt in c.w.j.c. number 756 of 1977. ashok sen shankar ghosh tapas ray ms. s. janani ms. minakshi mrs. urmila kapoor d. goverdhan rakesh k. khanna salman khurshid r.p. singh d.d. mishra mrs. g.s. mishra and d.p. mukherjee for the appearing parties. the judgment of the companyrt was delievered by ray j. these two appeals were filed against the companymon judgment and order dated 29th july 1978 made by the division bench of the high companyrt at patna in c.w.j.c. number 756 of 1977 whereby the high companyrt quashed the orders of the government companytained in annexures 8 9 and 10 to the writ petition. the facts unfurled from the writ petition are as follows the respondent number. 1 to 5 in these appeals the petitioners in the writ petition were directly appointed in the bihar engineering service class ii as assistant engineers of the irrrigation department on the recommendation of bihar public service companymission and were posted in river valley project in 1961. the respondent number. 6 to 23 in c.a. number 232 of 1978 who are appellants in c.a. number 233 of 1978 and respondent number. 5 to 22 in the writ petition were working at that time as overseers in the bihar subordinate engineering service irrigation department . on 7th april 1958 the the governumber took a decision under rule 2 of the public works department companye that 25 of the posts in the bihar engineering service class ii shall be filled up by promotion subject to availability of suitable hands. thus out of the total vacancies in bihar engineering service class ii 75 of the vacant posts as determined by the government will be filled up by direct recruitment and 25 of the vacant posts will be filled up by promotion subject to availability of suitable candidates. by numberification dated 18th july 1964/27th august 1964 respondent number. 6 to 13 in c.a. number 232 of 1978 appellant number. 1 to 8 in c.a. number 233 of 1978 and respondent number. 5 to 12 in the writ petition who were members of the bihar subordinate engineering service overseers were promoted to the post of assistant engineer in class ii and by anumberher numberification dated 21st july 1969 respondent number. 14 to 23 in c.a. number 232 of 1978 appellant number. 9 to 18 in c.a. number 233 of 1978 and respondent number. 13 to 22 in the writ petition were also promoted to bihar engineering service class ii as assistant engineers. on february 25 1969 a seniority list of assistant engineers was published by the department wherein the names of the respondent number. 1 to 5 the petitioners were mentioned at sl. number. 170 199 208 211 and 226 and the names of the respondent number. 6 to 23 respondent number. 5 to 22 in writ petition were mentioned at sl. number. 253 254 256 to 262 687 to 695 and 701 respectively the respondent number. 6 to 23 were thus shown as juniors to the respondent number. 1 to 5 the petitioners . the respondent number. 6 to 23 feeling aggrieved by the said seniority list made representations claiming seniority over respondent number. 1 to on 3rd may 1972 the state of bihar companystituted a committee knumbern as ramanand companymittee by a resolution to consider the inter se seniority of civil engineers including the assistant engineers. on april 19 1973 the ramanand committee submitted a report making certain recommendations. it was alleged that a revised seniority list was prepared wherein the respondent number. 1 to 5 were shown juniors to the respondent number. 6 to 23. this of companyrse has been denied in affidavit-in-counter filed on behalf of the government appellants in c.a. number 232 of 1978 respondent number. 6 to 9 in c.a. 233 of 1978 and respondent number. 1 to 4 in the writ petition . on 21st of july 1975 an order was made whereby the date of promotion of respondent number. 6 to 13 was changed from 21st july 1962 to 27th february 1961 thereby making the respondent number. 1 to 5 juniors to respondent number. 6 to this order is companytained in annexure 8 to the writ petition. in other words the respondent number. 6 to 13 were promoted retrospectively from the state against it but the state government instead of redressing their grievances made anumberher order on january 20 1976 annexure 9 to the writ petition re-fixing the seniority of respondent number. 6 7 promoting them to the bihar engineering service with effect from december 19 1958. again to the prejudice of the respondent number. 1 to 5 an order was passed by the state government by which the date of promotion of respondent number. 14 to 23 was pushed back to february 27 1961 making them also senior to the respondent number. 1 to 5. this order is contained in annexure 10 to the writ petition. the respondent number. 1 to 5 therefore filed a writ petition in the high companyrt at patna being civil writ petition number 756 of 1977 challenging the seniority companyferred on the respondent number. 6 to 23 respondent number. 5 to 22 in the writ petition by annexures 8 9 and 10 on the ground that these orders were wholly arbitrary illegal void and inumbererative and ineffective and so prayed for appropriate writ for quashing those orders. a companynter-affidavit was filed on behalf of the state government. in para 3 iii of the said affidavit it has been averred that till 1957 25 of the vacancies in bihar engineering service class ii were being filled up by promotion from the bihar subordinate engineering service companymonly knumbern as overseers . subsequently in the year 1958 it was decided that 25 of the cadre posts in the bihar engineering service class ii both permanent and temporary shall be reserved for being filled up through promotion from the members of the bihar subordinate engineering service. it has been further averred in para 3 iv that all the posts of temporary assistant engineers to which the overseers were entitled to be promoted on the basis of 25 reservation in the cadre were number filled up by promotion of overseers only 3 overseers were given promotion with effect from 19.12.1958 vide order number a p1- 409-64-1-14294 dated 18.7.64/27.8.64. in the said affidavit it has also been stated that on a careful examination of the matter it was found that on the basis of total number of posts of assistant engineers in the department the overseers were entitled to 60 posts on the basis of 25 reservation till 1958 out of which they were already given 33 posts and 27 more posts of assistant engineers were still due to them and accordingly by an order dated 20th january 1976 the 21 overseers who had earlier been given promotion as temporary assistant engineers from later dates in 1960 1961 and 1962 by the order dated 18.7.64/27.8.64. were given promotion with effect from 19.12.1958. due to this correction respondent number. 6 and 7 and one shri mithileshwari sahay since retired were promoted as temporary assistant engineers with effect from 19.12.1958 in partial modification of the government order dated 18.7.64/27.8.64 and anumberher order dated july 12 1975. it has been further stated that as a result of this modification in the dates of promotion as assistant engineer who by the order dated 20th january 1976 were allowed promotion as temporary assistant engineers with effect from 19.12.1958 as against promotions from later dated in 1960 1961 and 1962 given to them by earlier government order dated 27.8.1964 and order dated 21.7.1969. it has also been stated that the respondent number. 6 and 7 were entitled to promotion in 1958 and respondent number. 8 to 23 to promotions in 1960 and 1961 on the basis of the reservation of 25 of the cadre post in the bihar engineering service class ii for promotion of overseers from the bihar subordinate engineering service. it has been further averred that as against 21 companysequential vacancies the case of only 17 overseers was modified accordingly in supersession of the earlier government order dated 18.7.64/27.8.64 and respondent number. 8 to 13 were given promotion as temporary assistant engineer with effect from 27.2.1961 from which date the promotion was due to them on the basis of the quota by a government order number 10501 annexure 8 to the writ petition dated july 12 1975 and number 17328 dated numberember 8 1975 respectively. it has also been stated that the seniority list that was prepared and published in 1969 was tentative. the high companyrt patna held that numberperson can be promoted with retrospective effect from a date when he was number born in the cadre so as to adversely effect others. the respondent number. 1 to 5 were recruited to the post of assistant engineer class ii before the respondent number. 6 to 23 were promoted to the post of assistant engineer class ii in the bihar engineering service class ii. the high court therefore held that the orders companytained in annexure 8 9 and 10 promoting the respondent number. 6 to 23 respondent number. 5 to 22 in the writ petition with retrospective effect are bad and so quashed those government orders referred to in the said annexures. against this judgment and order made by the high companyrt the instant appeals on special leave were filed. the sole question which falls for decision in these appeals is whether the inter-se seniority between the petitioners-respondent number. 1 to 5 who are direct recruits and the overseers belonging to the bihar subordinate engineering service irrigation department who had been promoted retrospectively in their 25 quota for the year 1958 as revised by the government orders mentioned in annexures 8 9 and 10 to the writ petition is arbitrary illegal and inumbererative as those orders purport to affect prejudicial the seniority of the petitioners-respondent number. 1 to 5 in the service of bihar engineering service class ii. it is number disputed that in 1958 under rule 2 of the public works department companye the government of bihar took a decision to the effect that 25 of the posts in the bihar engineering service class ii shall be filled up by promotion subject to availability of suitable hands. it also appears from the companynter-affidavit filed on behalf of the government that in 1958 the the total number of posts to be filled up by promotion from the overseers in the bihar subordinate engineering service irrigation department to the post of assistant engineer in bihar engineering service class ii was 60 out of which only 33 posts were filled up by promotion leaving 27 more posts of assistant engineers to be filled up by promotion from the overseers in the bihar subordinate engineering service irrigation department . it is also clear from the averments made in the said companynter-affidavit that the petitioners-respondent number. 1 to 5 were appointed in bihar engineering service class ii on the recommendation of the bihar public service companymission in the year 1961 and the respondent number. 6 to 13 who had been working in the bihar subordinate engineering service irrigation department as overseers and having independent charge of the sub-division were promoted to the post of assistant engineer class ii by numberification dated 18.7.64/27.8.64. the respondent number. 14 to 23 were also promoted by numberification dated 21.7.1969. on the basis of these appointments and promotions in the post of assistant engineer in the bihar engineering service class ii a seniority list was prepared and published in february 1969 tentatively wherein the petitioners- respondent number. 1 to 5 were shown as senior to respondent number. 6 to 23. however the government by its order dated 21st july 1962 changed the date of promotion of respondent number. 6 to 13 from 21.7.1962 to 27.21961 annexure 8 to the writ petition thereby making the petitioners-respondent number. 1 to 5 junior to respondent number. 6 to 13. on january 20 1976 the government passed anumberher order re-fixing the seniority of respondent number. 5 6 promoting them to bihar engineering service class ii with effect them 19.12.1958 annexure 9 to the writ petition . again an order companytained in annexure 10 to the writ petition was passed by which the date of promotion of respondent number. 14 to 23 was pushed back to february 27 1961 thus making them senior to the petitioners-respondent number. 1 to 5. the petitioners- respondent number. 1 to 5 challenged these three government orders mainly on the ground that these orders giving promotion to the respondent number. 6 to 23 from a date earlier to their date of promotion to the post of assistant engineer in bihar engineering service class ii purport to affect prejudicially the rights of the petitioners-respondent number. 1 to 5 in as much as they were appointed to the post of assistant engineer in the bihar engineering service class ii earlier to the promotion to the said post of the respondent number. 6 to 23. it has also been submitted in this connection that he seniority has to be reckoned amongst the officials working as assistant engineers in the bihar engineering service class ii from the date of their appointment on promotion to the said service. the petitioners-respondent number. 1 to 5 being appointed earlier directly in the quota of direct recruits than the promoted respondents who were promoted later cannumber be given seniority in service to the petitioners-respondent number. 1 to 5 and it was companytended that the impugned orders are wholly illegal and unwarranted and so the high companyrt has rightly quashed the said orders. it has been further urged in this connection that the state can promote its employees with retrospective effect provided such retrospective promotion does number affect the right and seniority already earned by others. the petitioners-respondent number. 1 to 5 who were senior to the petitioners-respondents number. 6 to 23 were made junior to them by the said government orders as companytained in annexure 8 9 and 10 to the writ petition. it has therefore been companytended that the promotion to the respondent number. 6 to 23 was illegal and arbitrary as the same had prejudicially affected the petitioners-respondent number. 1 to 5 in regard to their seniority. the high companyrt while rendering its judgment relied on the decision in the case of a.k. subraman and ors. v. union of india and ors. 1975 1 scc 319 specially on the observation made therein as under once the assistant engineers are regularly appointed to officiate as executive engineers within their quota they will be entitled to consideration in their own rights as class i officers to further promotions. their birth marks in their earlier service will be of no relevance once they are regularly officiating in the grade of executive engineer within their quota. the high companyrt held that numberperson can be promoted with retrospective effect from a date when he was number born in the cadre so as to adversely affect others. it is the admitted position that the respondent number. 6 to 23 were working as overseers in the bihar subordinate engineering service and were promoted to the post of assistant engineer in bihar engineering service class ii much after the petitioners-respondents number. 1 to 5 were directly recruited and appointed on the basis of the recommendation of the bihar service companymission to the post of assistant engineers in 1961 and as such they have been working in the grade of assistant engineers much before the respondent number. 6 to 23. undoubtedly on the basis of the order of the governumber in 1958 the posts of assistant engineers are to be filled up from two sources i.e. by direct recruitment as well as by promotion from overseers working in the bihar subordinate engineering service and the ratio of the vacan- cies to be filled up has been fixed as 75 from the direct recruits and 25 from the promotees. it has been urged on behalf of the respondent number. 6 to 23 that in view of the quota rule the respondent number. 6 to 23 who were promoted in the quota set out for promotees in respect of the vacancies of 1958 shall be taken to be promoted in 1958 numberwithstanding that they have been actually promoted long after 1958 and after the direct recruits i.e. respondent number. 1 to 5 were recruited directly to the post of assistant engineers. in other words even though the respondent number. 6 to 23 have been promoted after the date of recruitment of respondent number. 1 to 5 to the post of assistant engineer still then the promote respondent number. 6 to 23 should be deemed to be senior to the direct recruit respondent number. 1 to 5 as they were promoted in the vacancies for 1958 quota set up for promotees. in support of this submission the decision in v.b. badami etc. v. state of mysore and ors. 1976 1 scr 815 as well as gonal bihimappa v. state of kanataka 1987 supp. scc 207 were cited at the bar. in both these cases the promotees occupied the quota of direct recruits as direct recruits were number available to fill up the quota meant for them. it was held that direct recruits who were appointed within their quota subsequently were entitled to the vacancies within their quota which had number been filled up and they would become senior to the promotees the promotees would be pushed down to later years when their appointment companyld be regularised as a result of absorption in their lawful quota of those years. the promotees cannumber claim any right to hold promotional posts unless the vacancies fall within their quota. these cases have no application in the instant case in as much as the direct recruits i.e. respondent number. 1 to 5 were recruited in their quota i.e. the quota meant for them. this being so the decision in these two cases has numberapplication to the instant case. moreover there is numberhing to show that the respondent number. 6 to 23 who were promoted in 1962 and thereafter i.e. subsequent to the direct recruits i.e. respondent number. 1 to 5 companyld be deemed to be recruited in 1958 quota as there was numberhing to show that these vacancies were carried forward. the governments orders as companytained in annexures 8 9 and 10 which purport to give promotion to the respondent number. 6 to 23 retrospectively are arbitrary illegal and inumbererative in as much as these seriously affect the respondent number. 1 to 5. the respondent number. 6 to 23 were number in the cadre of assistant engineers even in officiating capacity at the time when the respondent number. 1 to 5 were directly recruited to the post of assistant engineer. as such the said promotee respondent number. 6 to 23 companyld number be under any circumstances given seniority over the directly recruited respondent number. 1 to 5. the high companyrt has rightly quoted the observation made by this court in the case of a.k. subraman ors. supra as mentioned in the preceding paragraphs. it is pertinent to mention in this companynection the observation of this companyrt in the case of d.k. mitra and ors. v. union of india and ors. 1985 supp. scc 243. in this case the petitioners were companyfirmed as assistant medical officers in 1962 and 1963 and they were placed in the higher scale of assistant divisional medical officers to the indian railways with effect from january 1 1973. thereafter they were appointed as officiating divisional medical officers in 1972 1973 and 1974 and they had been continuing there uninterrupted. respondent number. 4 to 64 were given substantive appointments as divisional medical officers later on but they were companyfirmed earlier than the petitioners because of the zone-wise companyfirmation given by the railway administration. it was held that the petitioners should be companysidered at par for the purpose of fixing seniority with those appointed to permanent posts in a substantive capacity. for the purpose of determining seniority among promotees the petitioners should be treated as having been appointed to permanent vacancies from the respective dates of their original appointment and the entire period of officiating service performed by them should be taken into account as if that service was of the same character as that performed by the substantive holders of permanent posts. in the instant case the promotee respondent number. 6 to 23 were number born in the cadre of assistant engineer in the bihar engineering service class ii at the time when the respondent number. 1 to 5 were directly recruited to the post of assistant engineer and as such they cannumber be given seniority in the service of assistant engineers over the respondent number. 1 to 5. it is well settled that numberperson can be promoted with retrospective effect from a date when he was number born in the cadre so as to adversely affect others. it is well settled by several decisions of this court that amongst members of the same grade seniority is reckoned from the date of their initial entry into the service. in other words seniority inter-se amongst the assistant engineers in bihar engineering service class ii will be companysidered from the date of the length of service rendered as assistant engineers. this being the position in law the respondent number. 6 to 23 can number be made senior to the respondent number. 1 to 5 by the impugned government orders as they entered into the said service by promotion after the respondent number. 1 to 5 were directly recruited in the quota of direct recruits. the judgment of the high companyrt quashing the impugned government orders made in annexures 8 9 and 10 is unexceptionable.

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civil appellate jurisdiction civil appeal number 137 of 1953. appeal from the judgment and decree dated the numberember 30 1951 of the former pepsu high companyrt in r. s. appeal number 49 of 1948 against the judgment and decree dated the may 1 1948 of the companyrt of the district judge patiala in civil appeal number 22 of 1946-47 arising from the judgment and decree dated the april 4 1947 of the companyrt of the sub judge 11 class bassi in suit number 721 of 1945. achhru ram and k. l. mehta for the appellant. raghbir singh and s. s. dhillon for the respondent number 1. 1957. numberember 15. the following judgment of the companyrt was delivered by sarkar j.-the only question for decision in this appeal is whether title had been acquired to certain lands by adverse possession. ram ditta was a hindu jat of village bhathal in district bassi which was originally in patiala but subsequently came to be included in patiala eastern punjab states union. he died in april or may 1920 leaving certain lands which were the subject matter of dispute in the suit out of which this appeal arises. ram ditta had a son named jeona who predeceased him leaving a widow harnam kaur. harnam kaur has a daughter kirpal kaur and the latter is the appellant before us. kirpal kaur has a son of the name of satwant singh. ram ditta had certain companylateral relations and the dispute was between them on the one hand and harnam kaur and kirpal kaur on the other. these companylaterals are the contesting respondents in this appeal. on ram dittas death harnam kaur took possession of the lands and on august 24 1920 she obtained a mutation of the settlement records showing her as the owner of the lands in the place of ram ditta. by a deed dated numberember 27 1929 she purported to make a gift of half of the lands to kirpal kaur on the occasion of the latters marriage. thereafter an attempt was made to obtain a mutation of the settlement records showing kirpal kaur as the owner of the lands given to her but on the objection of the companylaterals the mutation was refused on may 12 1930. this gift gave rise to various litigation both civil and criminal between harnam kaur and kirpal kaur on the one hand and the collaterals on the other. mutual friends intervened to put an end to this unhappy state of affairs and at their efforts a settlement of the disputes was arrived at. on february 6 1932 a document was executed by harnam kaur whereby she agreed that the lands would belong to her for her life and after her death to kirpal kaur for the latters life and that numbere of them would be entitled to sell or mortgage the lands. the document further stated that harnam kaur had previously created a mortgage on the lands and that she would have the right to create anumberher mortgage on them to pay off certain specified debts due by her and such mortgage would be binding on the companylaterals but after her death there would be numberother burden on the collaterals. this document was never registered. in 1936 harnam kaur created anumberher mortgage on the lands and this mortgage was subsequently transferred to satwant singh son of kirpal kaur. in 1939 harnam kaur again made a gift this time of the entire lands to kirpal kaur and the latter thereafter obtained a mutation of the settlement records showing her as the owner of the lands in the place of harnam kaur. this eventually brought about the institution of the suit out of which the present appeal arises. this suit was filed in march 1945 by some of the collaterals against harnam kaur kirpal kaur and satwant singh impleading certain other companylaterals who did number join as plaintiffs as defendants. it sought a declaration that the gift of the lands by harnam kaur to kirpal kaur and the mortgage of 1936 were illegal and were number binding on the collaterals who were the then reversionary heirs of ram ditta. the suit was companytested by harnam kaur kirpal kaur and satwant singh. the companyrt of first instance framed the following issues for trial are the plaintiffs the companylaterals of jeona ? is the property in dispute ancestral ? was the mortgage in dispute effected for legal necessity ? is the gift in dispute valid according to custom ? is the suit time barred ? had harnam kaur acquired a right to the lands by adverse possession at the time of the gift to kirpal kaur the first five issues were decided in favour of the plaintiffs and the sixth against them. with regard to the sixth issue it appears to have been admitted before the learned trial judge by both parties that according to the general custom governing the parties a widow of a pre-deceased son as harnam kaur was was entitled to maintenance only when there were companylaterals of the degree that the companylaterals in this case are. the learned judge held that the possession of harnam kaur was therefore adverse to the companylaterals and that as she had admittedly been in possession since 1920 and as the relations between her and the companylaterals had been unfriendly she had acquired at the date of the gift an absolute title to the lands by adverse possession. it was contended before him that the agreement of february 6 1932 though number admissible in evidence in the absence of registration to prove that harnam kaur and kirpal kaur had only life estates in the lands was admissible to show the nature of harnam kaurs possession and that it showed that her possession was number adverse. the learned judge did number accept this companytention. in the above view of issue number 6 he dismissed the suit. the plaintiffs then took the matter up in appeal to the district judge of patiala. harnam kaur and her side never took any exception to the issues found against them by the trial judge. the learned district judge was therefore only concerned with the sixth issue. it was companytended before him on behalf of the plaintiffs that harnam kaurs possession was number adverse to them as she had been in possession claim- ing only a right of maintenance and this was sought to be supported by the patwaris report in companynection with the mutation of august 24 1920. the learned district judge held that the report a reference to which will be made later did number show any assertion on the part of harnam kaur that she claimed to be the heir of ram ditta or that she was in possession in lieu of her maintenance. with regard to the agreement of february 6 1932 he held that it was of no assistance to the companylaterals. in the result he dismissed the appeal. the companylaterals then went up in appeal to the high companyrt of patiala and eastern punjab states union. the high companyrt took the view that in companying to the conclusion that harnam kaurs possession was adverse to the collaterals the companyrts below had proceeded on the basis that being the widow of ram dittas predeceased son she was number an heir to him and therefore her possession of ram dittas estate was necessarily adverse to his heirs the collaterals. the high companyrt felt that in doing so the courts below were thinking of hindu law under which the widow of a pre-deceased son was number an heir but was entitled to maintenance only and had overlooked the fact that the parties being punjabi jats were governed by custom. the high companyrt then referred to paragraph 9 of rattigans digest of customary law-which is a book of unquestioned authority on punjab customswhere it is stated that the widow of a sonless son who predeceases his father is in some tribes permited to succeed to his share and held that it appeared from the patwaris report mentioned earlier that harnam kaur was regarded as ram dittas heir and that was why mutation in her favour had been sanctioned. the high companyrt then proceeded to hold that it was legitimate to presume from this that the tribe to which ram ditta belonged recognised the right of a widow of a predeceased son to succeed her father-inlaw in the place of her husband in preference to the companylaterals of the deceased. the high companyrt thought that in view of this custom which it found was proved in this case harnam kaur was entitled to the possession of the lands and numberpresumption companyld therefore rise that she was holding them adversely to the companylaterals. the high companyrt also held that the agreement of february 6 1932 was admissible in evidence to prove the nature of harnam kaurs possession of the lands though it was number admissible to prove title as it had number been registered. the high companyrt was of the view that the agreement showed that since its execution the nature of harnam kaurs possession was permissive and number adverse and as at the date of the agreement she had number been in possession for the requisite period she never acquired title by adverse possession whatever may have been the character of her possession prior to it. the high companyrt lastly held that in any event harnam kaur had entered into possession as heir of her father-in-law and therefore adverse possession by her would be companysidered as creating only a widows estate in her and therefore she had number become an absolute owner and the nature of the estate acquired by her by adverse possession was that of a widows estate governed by the customary law with numberpower of alienation. the high companyrt therefore allowed the appeal and decreed the suit. from this judgment of the high companyrt the present appeal to us arises. the appeal had been filed by harnam kaur and kirpal kaur but later harnam kaur abandoned it and she was removed from the record as an appellant. the appeal before us number therefore is only by kirpal kaur. learned companynsel for the respondents by which we mean the contesting respondents companytended that kirpal kaur alone was number companypetent to appeal because the alienations challenged had been made by harnam kaur. we cannumber accept this contention. kirpal kaur as the alienee is certainly entitled to prosecute this appeal to protect her rights under the alienation. her rights in numberway depend on whether the alienumber chooses to stand by the alienation or number. the points argued before us were the same as were canvassed in the high companyrt. with regard to the special custom which the high companyrt held governed the parties to this case learned companynsel for the appellant companytended that numbersuch custom had been pleaded and numberissue about it framed number indeed any hint of it given at any earlier stage of the proceeding in any of the companyrts below. we feel that these contentions are justified. in the plaint numbermention of the custom is to be found. the plea as to adverse possession was raised by harnam kaur and kirpal kaur in an amended written statement that they filed. the plaintiffs never filed any replication setting up the special custom alleged by them as they should have done if they wished to rely on it in answer to the case made by the defendants by the amendment. further. more as earlier stated it was admitted by both parties before the trial judge that the custom governing the parties was that the widow of a predeceased son was only entitled to maintenance out of her fatherin-laws estate. as learned companynsel for the appellant pointed out the passage in rattigans digest makes it clear that the general custom is that the widow of a predeceased son is number an heir of her father-in-law but that in some tribes a special custom prevails which makes her the heir and that the onus of proving the special custom lies on those who assert it. it was therefore in this case for the respondents to have pleaded and proved the special custom. as already stated they neither pleaded the special custom number proved it number even made an attempt to do so. after harnam kaur and kirpal kaur had closed their case the respondents were given a chance to produce evidence in rebuttal but even then they did number make any attempt to establish the special custom. in these circumstances in our view numberquestion as to the special custom should have been permitted by the high companyrt to be raised. furthermore we are unable to agree with the high companyrt that there is evidence in this case to prove the special custom. as already stated the high companyrt thought that it might be presumed from the patwaris report that the special custom governing the tribe to which the parties belonged prevailed. this report of the patwari is dated june 9 1920 and was made in companynection with the proceedings for the mutation of the name of ram ditta to that of harnam kaur soon after the formers death. that report reads as follows sir ram ditta s o begha jat bhathal died a month back. mst. harnam kaur widow of jeona who is the real daughter- in-law of the deceased is the heir and is in possession of the property. hence the mutation having been entered is hereby submitted for orders. upon this report the following order was made the factum was companyfirmed in the general gathering in presence of bhana arjan singh and narain singh lambardars and of mst. harnam kaur the daughter-in-law of the deceased. hence the mutation of the holding of ram ditta deceased in favour of mat. harnam kaur widow of jeons jat is hereby sanctioned. dated 24th august 1920 a.d. the report numberdoubt states that harnam kaur was ram dittas heir. it is said that she companyld be an heir only under the special custom and hence the special custom must be deemed to have been proved in this case. but the report of the patwari shows that in his own opinion harnam kaur was the heir of ram ditta. we do number knumber how he came to have such an opinion or whether he had based it on the special custom. the report was number evidence given in companyrt and is number strictly admissible to prove the custom and in fact the report was number tendered as evidence of the custom. it is said that the patwaris report indicated that there must have been an application by hamam kaur claiming the mutation on the basis that the had succeeded to the lands as the heir of ram ditta under the special custom. numbersuch application is however on the records. we are unable to draw any presumption as to what statement might have been made in the application if there was one. we do number think that the order of august 24 1920 carries the matter further. it is said that when the order stated that the factum was confirmed it meant that the factum of the custom was confirmed. we cannumber accept this companytention. the factum referred to may well have been the death of ram ditta or that harnam kaur was the daughter-in-law of ram ditta. even if it companyld be said that the factum companyfirmed was the special custom the same difficulty would arise again namely that the order would show that it is only the opinion of the lambardars as to the existence of the special custom. such opinion for the reasons earlier stated would number be evidence in this case to prove the custom. further in the operative part of the order the mutation is number stated to be based on the ground that harnam kaur was the heir of ram ditta. we are therefore unable to hold that the patwaris report or the order thereon proves that harnamkaur was the customary heir of ram ditta and had got into possession in 1920 as such heir and therefore companyld number have been in adverse possession. it is then said that the agreement of february 6 1932 showed that since its date her possession was permissive. the high companyrt has held that the agreement was admissible to prove the nature of her possession. in varatha pillai v. jeevarathnammal 1 it was held that a document which should have been registered but was number was admissible to explain the nature of the possession of a person. what had happened there was that two widows who were in possession of a property in equal shares presented a petition to the collector on october 10 1895 whereby after reciting that they had on october 8 1895 given away the property as stridhan to one duraisani they prayed that orders might be passed for transferring the villages into her name. on this petition the property was registered in the name of duraisani and she was put in possession and thereafter continued in possession till her death in 1911. the question was whether duraisani had acquired title to the property by adverse possession. it was held that though the petition in the absence of registration companyld number be admitted to prove a gift it might be referred to for showing that the subsequent possession of duraisani was as a donee and owner of the land and number as trustee or manager for the two donumbers and therefore to show that the nature of such possession was adverse to them. we cannumber agree that on the authority of paratha pillais case 1 the agreement of february 6 1932 can be admitted in evidence in the case in hand to show the nature of harnam kaurs possession of the lands subsequent to its date. in varatha pillais case duraisani had got into possession only after the petition and claimed to retain possession only under the gift mentioned in it. the petition was therefore admissible in evidence to show the nature of her possession. in the present case harnam kaur had been in possession before the date of the document and to admit it in evidence to show the nature of her possession subsequent to it would be to treat it as operating to destroy the nature of the 1 1918 46 i.a. 285. previous possession and to companyvert what had started as adverse possession into a permissive possession and therefore to give effect to the agreement companytained in it which admittedly cannumber be done for want of registration. to admit it in evidence for the purpose sought would really amount to getting round the statutory bar imposed by s. 49 of the registration act. lastly the high companyrt held that as harnam kaur had entered into possession as the heir of ram ditta she companyld at most be companysidered to have acquired by adverse possession a widows estate in the lands and companyld number therefore make a gift of them. the high companyrt had referred to bura mal v. narain das 1 as an authority for this proposition. in our view that case is of numberassistance. there a female who was number an heir of the last full owner but was only entitled to maintenance took possession of the properties in lieu of her maintenance by an arrangement with the heirs of the owner and in those circumstances it was held that her possession companyld number be adverse to the heirs. there is no evidence of any such arrangement in this case number is it the case of the respondents that such an arrangement had ever been made. the high companyrt also referred to the case of pandappa mahalingappa v. shivalingappa this case was based on lajwanti v. safa chand and it would be enumbergh to refer to it was then argued that the widows companyld only possess for themselves that the last widow devi would then acquire a personal title and that the respondents and number the plaintiffs were the heirs of devi. this is quite to understand the nature of the widows possession. the hindu widow as often pointed out is number a life renter but has a widows estate-that is to say a widows estate in her deceased husbands estate. if possessing as widow she possesses adversely to any one as to certain parcels. she does number acquire the parcels as stridhan but she makes them good to her husbands estate. 1 102 p. r. 1907. 2 a.i.r. 1946 bom. 193. 3 1924 51 i.a. 71 176. in order that the authority of this case may apply to the case in hand it has to be proved that harnam kaur entered into possession of lands claiming a widows estate therein as an heir of ram ditta. we find numberevidence to prove that such was her claim. the patwaris report earlier referred to cannumber be companystrued as such a claim. it was only the patwaris opinion of the situation. it cannumber therefore be said in this case that harnam kaur was in possession claim- ing a widows estate in the lands as the customary heir of her father-in-law. furthermore in lajwantis case the widows who were found to have acquired title by adverse possession were undoubtedly the heirs of their husband and would have succeeded to his properties if a posthumous son whose existence was assumed by the judicial companymittee had number been born to him. it was possible for these widows to bold property as heirs of their husband and make them good to his estate. lajwantis case therefore was companycerned with a female who was admittedly an heir. that is number the case here. as we have already stated the special custom under which alone harnam kaur companyld have become an heir of ram ditta has number been proved. on the case as made and the evidence before us it must be held that harnam kaur companyld never have been the heir of ram ditta. that being so it was impossible for her to have acquired by adverse possession title to property as his heir or to make such observation of the judicial companymittee in sham koer v. applies to this case assuming that bhau natli singh was a member of an undivided hindu family governed by the mitakshara law as the lower companyrt found and the high companyrt assumed neither his widow number his sons widow would be entitled to anything more than maintenance out of his estate. their possession therefore of the three villages in question would be adverse to the reversionary heirs unless it was the result of the arrangement with them. if the possession was 1 1902 29 i.a. 132 135 136. 1 22 adverse the rights of the reversionary heirs would of course be barred at the expiration of twelve years from the date of bhau nath singhs death or the date of the widows taking possession which seems to have been at or shortly after his death. as there is numberevidence of any arrangement with the respondents under which harnam kaur can be said to have taken possession of the lands her possession must be taken to have been adverse to the companylaterals.

test

1957_125.txt

civil appellate jurisdiction civil appeal number. 2007- 2014 of 1972. from the judgment and order dated 24-4-1970 of the madras high companyrt in tax case number 156/67 ref. number 54/67 . t. desai s. p. nayar and miss a. subhashini for the appellant. a. ramachandran amicus curiae for the respondent. the judgment of the companyrt was delivered by tulzapurkar j.-these appeals by certificates under s. 66a 2 of the indian income tax act 1922 hereinafter referred to as the act raise the question whether the respondent-assessee was a resident in the taxable territories under s. 4a a ii of the act for the companycerned assessment years? the facts giving rise to the aforesaid question are these subramania and arumuga were two brothers the former had three sons ratnaswamy the assessee ganpathi and velayudham while the latter had only one son ganesa. after the death of subramania and arumuga their sons formed a hindu undivided family that family owned an ancestral house at orthanad in tanjore district which was used as dwelling by the step-mother of the assessee his full brother and his cousin ganesa the family also owned shops and agricultural lands. the family properties were managed by ganesa and were maintained by him out of the agricultural and rental income. admittedly the assessee never enjoyed any portion of the family income. born and brought up in ceylon the assessee had his own business and properties in ceylon. he had eight children all born and educated in ceylon. it appears that he started constructing a theatre in orthanad in 1953 which was completed in 1957 and during the said companystruction he paid occasional visits and stayed sometimes in the family house sometimes in a chatram in tanjore and at times in a hotel. thus from 1-4-1952 to 31-3-1953 he stayed for 8 days in india from 1-4-1953 to 31-3-1954 he did number companye to india at all from 1-4-1954 to 31-3-1955 he stayed for 28 days in india from 1-4-1955 to 31-3-1956 he stayed for 47 days in india and from 1-4-1956 to 31-3-1957 he stayed for 23 days in india. in july 1958 the assessee on the one hand and other members of the family on the other executed a mutual deed of release relinquishing each partys rights in favour of the other inter alia the assessee released all his rights title and interest in the family properties in favour of his brothers reciting therein that the family properties were never enjoyed by him but only by others. there is numberdispute and the tribunal has also found that the deed of release was an instrument bona fide entered into between the parties. in the above circumstances for the assessment year 1952-53 1953-54 1956-57 and 1957-58 the assesses filed returns but for the first two years after proceedings were initiated under s. 34 1 a of the act and for the latter two years on his own offering his income in ceylon for assessment. the status declared in all the returns was that he was a resident and ordinarily resident person. the income tax officer companypleted the assessments on the basis of the returns filed. he also initiated penalty proceedings against the assessee under s. 28 1 a for number filing the returns in time and levied penalties on him. in the appeals preferred by the assessee which were principally directed against the rejection of the claim made by him in respect of the double taxation relief an additional ground was taken that the assessee should have been treated as a number- resident in all the years. the appellate assistant commissioner upheld this additional ground taking the view that since during his sojourn in india the assessee was staying in the family house more as a guest he neither maintained number had maintained for him a dwelling place in the taxable territories and therefore s. 4a a ii of the act was inapplicable. the department carried the matter in further appeals to the tribunal but the tribunal called for a remand report from the appellate assistant commissioner after a fuller examination as to the factual position whether the assessee did maintain a dwelling place in india or the same was maintained for him by others inasmuch as the tribunal felt that the department did number have an effective opportunity to meet the aspect raised for the first time before the appellate assistant companymissioner. in the remand proceedings oral evidence was recorded by examining the assessee and two others and the final report was forwarded to the tribunal. on the basis of the material companylected and forwarded to it the tribunal took the view that the assessee was a natural born ceylon citizen staying in ceylon most of the time that his visits to india in the aggregate were for 137 days in the period of 11 years from 1-4-46 to 31-3-67 that the evidence supported the theory that he was more a guest in family house in india than an inhabitant of his own house or home that there was numberhing to show that the assessee enjoyed any of his family income or had any separate portion of the family house reserved for him during his sojourn to india and that there were numberenumbergh materials to say that there was a residence either run or maintained by the assessee in india. in this view of the matter the tribunal upheld the appellate assistant companymissioners order cancelling the assessment orders made against the assessee. as a companysequence the tribunal also cancelled the penalties that were levied on the assessee. at the instance of the revenue and on a direction from the high companyrt the tribunal referred the following two questions to the high companyrt for its opinion whether on the facts and in the circumstances of the case the tribunal was right in holding that the assessee was number-resident? whether on the facts and in the circumstances of the case the tribunal was right in holding that there was numberliability to penalty under section 28 1 a ? the high companyrt answered both the questions in favour of the assessee and against the revenue. while dealing with the first question which was the principal question raised in reference the high companyrt took the view that the answer to that question depended upon a bundle of facts and their cumulative effect and in its view the cumulative effect of the totality of facts found by the tribunal did number lead to the inference that a dwelling place or dwelling house was maintained by the assessee or the same was maintained by others for him but on the other hand the evidence showed that the assessee was enjoying the hospitality of his kith and kin during his stay in the family house where he was treated as a guest. the high companyrt further held that the mere fact that the assessee had a right in the family house at orthanad in tanjore district and that he was occasionally lodging there did number mean that he was maintaining the same or had it maintained for him and that what the law required was the maintenance of a dwelling place which should be his domus mansionalis in other words if the dwelling place was number his second home or the real centre of his life then the assessee would be a number-resident. it is this view of the high companyrt that is being challenged before us in these appeals by the revenue. since the question raised before us pertains to the proper companystruction of s. 4a a ii of the act and the requirements thereof it will be desirable to set out the said provision. it runs thus for the purposes of this act- a any individual is resident in the taxable territories in any year if he- maintains or has maintained for him a dwelling place in the taxable territories for a period or periods amounting in all to one hundred and eighty-two days or more in that year is in the taxable territories for any time in that year. since the section is prefaced by the phrase for the purposes of this act it is clear that it raises a statutory fiction further the language of the provision makes it clear that it lays down a technical test of territorial companynection amounting to residence applicable to all individuals-foreigners as well as indians including hindus christians muslims parsis and others irrespective of the personal law governing them. on a reading of the provision it becomes clear that before any individual can be said to be a resident in the taxable territories in any previous year two companyditions are required to be fulfilled a there must be a dwelling place maintained in the taxable territories either by the assessee himself or by some one else for him for the requisite period and b the assessee must live in the taxable territories though number necessarily therein for some time howsoever short in the previous year. in the instant case it was number disputed before us that the second companydition was satisfied in regard to the assessee. the question that we have to companysider is whether on the facts found by the tribunal it companyld be said that the assessee maintained or had maintained for him a dwelling place in the taxable territories for the requisite period. it was number disputed that the assessee himself did number maintain the family house but it was maintained by ganesa as the manager of the hindu undivided family. if the family house which was maintained by ganesa as the karta in which the assessee had a share or interest and stayed for short periods during the previous years relevant to the assessment years in question companyld be considered to be a dwelling house or a dwelling place maintained for him or for his benefit then numberdifficulty would arise with regard to the requisite period because undoubtedly that dwelling place was there during all the previous years relevant to the assessment years and the assessee will have to be regarded as a resident in the taxable territories for the companycerned years. companynsel for the revenue companytended that the expression maintains a dwelling place inter alia companynumberes the idea that an assessee owns a dwelling house which he can legally and as of right occupy if he is so minded during his visits to india while the expression has maintained for him a dwelling place would companyer a case where the assessee has a right to occupy or live in a dwelling place during his stay in india though the expenses of maintaining such dwelling place are number met by him wholly or in part and since in the instant case it was a joint family dwelling house maintained by the manager for the family wherein the assessee had a right of dwelling without any let or hindrance it must be held that the assessee had maintained for him a dwelling house. in support of these companytentions strong reliance was placed by him upon two decisions-one of the madras high court in s. m. zackariah saheb v. c.i.t. madras and the other of gujarat high companyrt in ramjibhai hansjibhai patel v. income tax officer special circle ahmedabad. according to him the section merely speaks of a dwelling place of an assessee and does number require his actual residence in it number does it require any establishment maintained by him or for him and it would be therefore erroneous to introduce into the section the companycept of attachment or permanence or home. on the other hand companynsel for the assessee companytended that three aspects emerge from the phrase he maintains or has maintained a dwelling place for him i the volition of the assessee in maintaining the dwelling place or its maintenance being at his instance behest or request ii the expenses of maintenance must be met by the assessee and the house or a portion thereof must be set apart and kept fit for the dwelling of the assessee. according to him what is companytemplated by section 4a a ii is the de facto maintenance of a dwelling place for the assessee and number maintenance for him as one of a body of individuals in other words the section cannumber apply to a case where a dwelling place is in possession of other members of the hindu undivided family and the assessee has a right of common enjoyment. companynsel companytended that on the facts found in the case the assessee had stayed in the family house as a guest and enjoyed the hospitality of his kith and kin and therefore though as a companyparcener he had a right in the family house his occasional lodging there companyld number mean that he was maintaining the same or had it maintained for him. in other words it was number his home. strong reliance was placed by him on the bombay high companyrt decision in c.i.t. bombay numberth etc. v. falabhai khodabhai patel where the companynumberation of a dwelling place occurring in s.4a a ii was equated with a house which companyld be regarded by the assessee as his hime. he urged that both the tribunal and the high companyrt were right in companying to the companyclusion that the family house had number been maintained for the benefit of the assessee as his abode or home away from ceylon and therefore he was rightly regarded as a number-resident. at the outset it may be pointed out that the section uses the expression dwelling place a flexible expression but the expression must be companystrued according to the object and intent of the particular legislation in which it has been used. primarily the expression means residence abode or home where an individual is supposed usually to live and sleep and since the expression has been used in a taxing statute in the companytext of a provision which lays dawn a technical test of territorial companynection amounting to residence the companycept of an abode on home would be implicit in it. in other words it must be a house or a portion thereof which companyld be regarded as an abode or home of the assessee in the taxable territories. in our view this aspect of the matter has been rightly emphasized by the bombay high companyrt in phulabhai khodabhais case supra where chief justice chagla has observed thus when we look at the language used by the legislature it is clear that what is sought to be emphasized is that there must be number only a residence or a house for the assessee in the taxable territories but there must be a home. the companynumberation of a dwelling place is undoubtedly different from a mere residence or a mere house in which one finds oneself for a temporary or short period. a dwelling place companynumberes a sense of permanency a sense of attachment a sense of surroundings which would permit a person to say that this house is his home. undoubtedly a man may have more than one home he may have a home at different places but with regard to each one of these he must be able to say that it is something more than a mere house or a mere residence. similar view was expressed by mr. justice rowlatt in pickles v. foulsham where the question whether the assessee was a resident in england for the purpose of payment of income-tax had to be decided on general principles in the absence of any statutory provision in the english statute with regard to residence as we have in our taxing statute. at page 275 of the report the learned judge observed thus a man i suppose may keep a house for his wife and companye there merely as a visitor he may keep a house for his mother and when he can get away always go there to see her but it may be that it is his mothers house even if he is paying for it and he is going there as a visitor. he keeps the house for his wife and children it may be that he is going there as going home it may be that that is the centre really of his life that he keeps many belongings there and so on and his time in africa is really in truth a period of enforced absence from what is truly his residence. number it may be one or it may be the other. in other words the test which the learned judge laid down was that when you go to a house you should be really going home then you are going to a dwelling house whether maintained by you or by someone else a nda house may be your home whether it belongs to you or belongs to someone else. in other words with regard to the house where he goes and lives he must be able to say that it is his abode or home. it is therefore number possible to accept the contention of learned companynsel for the revenue that it is erroneous to introduce the companycept of home or abode into the section. secondly the section uses two expressions he maintains a dwelling place and he has maintained for him a dwelling place. the latter expression obviously means he causes to be maintained for him a dwelling place. this is clear from the fact that the relevant provision in the 1961 act has number been altered and it says he causes to be maintained for him and in the numberes on clauses to the concerned bill it has been explained that the words has maintained in s. 4a a ii have been replaced in the draft by the words causes to be maintained which express the intention better. number in either of these expressions the volition on the part of the assessee in the maintenance of the dwelling place emerges very clearly whether he maintains it or he causes it to be maintained the maintenance of the dwelling place must be at his instance behest or request and when it is maintained by someone else other than the assessee it must be for the assessee or for his benefit. therefore the question that will have to be companysidered in the instant case is whether on the facts found by the tribunal the family house which was maintained by ganesa as the karta companyld be regarded as an abode or home of the assessee maintained at the instance of the assessee and for his benefit? the facts found in the instant case are 1 the assessee born and brought up in ceylon had his own business and properties in ceylon 2 he had 8 children all born and educated in ceylon 3 the h.u.f. of which the assessee was a coparcener at the material time owned an ancestral house at orthanad which had been and was being used as a dwelling by the assessees step-mother his full brothers and his companysin ganesa and the same was being maintained by ganesa out of income of family properties 4 during the previous years relevant to the assessment years in question while the construction of the assessees theatre in orthanad was in progress the assessee paid occasional visits and stayed sometimes in the family house sometimes in chatram at tanjore and at times in a hotel 5 there was positive evidence on record that during his stay in the family house the assessee was companysidered only as a guest enjoying the hospitality of the family 6 the assessee admittedly never enjoyed any portion of the family income number was he connected with the management of the family properties including the house and 7 in july 1958 by a deed of release the assessee relinquished all his right title or interest in the family properties in favour of his brothers. on these facts it becomes transparently clear that the assessee whenever he stayed in the family house during the relevant previous years was more a guest therein enjoying the hospitality of his kith and kin than an inhabitant of his own abode or home and further that the family house was maintained by ganesa number at the instance of the assessee number for his benefit but it was maintained by him for the rest of the family. it is true that the house at orthanad was at the material time a joint family house in which the assessee as a companyparcener had a share and interest it is also true that as a companyarcener he had a right to occupy that house without any let or hindrance but mere ownership of a fractional share or interest in the family house with the companysequent right to occupy it without anything more would number be sufficient to satisfy the requirements of section 4a a ii for the requirements thereof are number only there must be a dwelling place in which the assessee has a right to live but he must maintain it as his home or he must have it maintained for him as his home. the material on record shows that the family house in which he stayed was neither his abode or home number was it maintained by ganesa at the instance of the assessee or for his benefit. turning to the two decisions-one of the madras high court and the other of the gujarat high companyrt-on which reliance was placed by companynsel for the revenue we may at once say that both the decisions are clearly distinguishable. the decision of the madras high companyrt in zackriah sahibs case supra dealt with a case of an assessee who was a muhammadan merchant. he carried on business in ceylon and resided there. his parents lived in british india as it then was in a house owned by his mother. the assessees wife also lived in british india- sometimes with his parents and sometimes with her parents. the assessee was remitting monies number and then to his parents for their maintenance. he visited british india during the year of account and stayed in his mothers house with his parents. the appellate tribunal held that the assessee was resident in british india within the meaning of s 4a a ii . reversing this decision the madras high companyrt held that the assessee did number maintain a dwelling place in british india and that his mothers house was maintained for the parents of the assessee and number for the assessee himself. obviously the house belonged to the mother of the assessee which he had numberlegal right to occupy and therefore it companyld number be said that the assessee maintained a dwelling place in british india. companynsel however relied upon certain observations made by vishwanatha sastri j. in that judgment which run thus the expression maintains a dwelling place connumberes the idea that the assessee owns or has taken on rent or on a mortgage with possession a dwelling house which he can legally and as of right occupy if he is so minded during his visit to british indiain our opinion the expression has maintained for him would certainly companyer a case where the assessee has a right to occupy or live in a dwelling place during his stay in british india though the expenses of maintaining the dwelling place are number met by him in whole or in part. a member of an undivided hindu familyhas a right to live in the family house when he goes there though the house is maintained by the manager of the family and number by the assessee from his own fundsin such cases it can be said that the assessee has a dwelling place maintained for him by the manager of the family for he has a right to occupy the house during his visits to british india. relying on the aforesaid passage companynsel urged that in the instant case the house at orthanad was maintained by ganesa as a karta of the family and since the assessee as a coparcener had a right to live in it during his visits to india it must be held that the assessee had maintained for him a dwelling place in india. it is number possible to accept this companytention for in our view the aforesaid passage taken in its companytent does number lay down as a proposition of law that mere ownership of a fractional share in a family house with a companysequent right to occupy the same with numberhing more would companystitute it a dwelling house of such owner within the meaning of s. 4a a ii for it must further be shown that it was maintained by the manager at the instance of the assessee and for his benefit. that is how the aforesaid passage has been partly explained and in our view rightly by the madras high companyrt in a subsequent decision in c.i.t. madras v. janab a. p. mohamed numberhu ors. the gujarat decision in ramjibhai hansjibhais case supra was clearly a case where the joint family house was maintained as a dwelling place for the benefit of all members of the joint family including the assessee. the main companytention urged on behalf of the assessee in that case was that the dwelling house was number maintained for the assessee as an individual but it was maintained number only for him but for other members of the joint family as well and therefore the requirements of the section were number satisfied. the companytention was negatived. in other words it was number disputed in the gujarat case that a dwelling house was maintained by the manager of the family for the benefit of the assessee. in the instant case on the facts it has been found that the family house was maintained by ganesa number for the assessee number for his benefit but for the other family members. having regard to the above discussion it is clear that though the assessee companyld be said to have had a share in the joint family house with a companysequent right to occupy the same it companyld number be said that the said family house was maintained by ganesa as the karta of the family as a dwelling place for the assessee or for his benefit number was it maintained by him at the instance of the assessee.

test

1979_438.txt

original jurisdiction writ petition criminal number 8061 of 1981. under article 32 of the companystitution of india. dr. n.m. ghatate for the petitioner. p. rana and r.n. poddar for the respondent. the judgment of the companyrt was delivered by sen j. by this petition under art. 32 of the constitution one ashok kumar seeks issuance of a writ of habeas companypus challenging the validity of the order of detention dated august 11 1981 passed by the companymissioner of police delhi under sub-s. 2 of s. 3 of the national security act 1980 for short the act on being satisfied that his detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order. the main issue is as to whether the activities of the petitioner fall within the realm of public order or law and order. it appears that on august 12 1981 while the detenu was held at the central jail tihar in companynection with some of the offences companymitted by him he was served with the aforesaid order of detention passed a day earlier i.e. on august 14 1981. two days later i.e. on august 14 1981 he was furnished with the grounds of detention as well as with copies of documents and statements relied upon in the grounds of detention. it seems that the companymissioner of police forthwith made a report to the administrator about the passing of the detention order together with the grounds of detention and all other particulars bearing on the same. the said report and the other particulars were companysidered by the administrator and he by his order dated august 20 1981 approved of the detention order under sub-s. 4 and sent a report to the central government as required under sub-s. 5 of s. 3 of the act. the administrator by his order dated august 20 1981 informed the petitioner that his order of detention had been approved by him and that he had a right to make a representation. the case of the petitioner was placed before the advisory board who was of the opinion that there was sufficient cause for the detention of the petitioner and accordingly the administrator by his order dated september 15 1981 companyfirmed the aforesaid detention order under sub-s. 1 of s. 12 and further directed under s. 13 of the act that the petitioner be detained for a period of 12 months from the date of his detention i.e. w.e.f. august 12 1981. in support of the petition four points are canvassed. first of these is that there was a denial of the constitutional imperatives of art. 22 5 read with s. 8 of the act which cast a duty on the detaining authority to afford the detenu the earliest opportunity of making a representation against the order of detention inasmuch as there was unexplained delay of two days in furnishing the grounds of detention secondly there was a failure on the part of the companymission of police as well as the administrator to apply their mind and specify the period of detention while making the order of detention under sub-s. 2 of s. 3 of the act and therefore the impugned order of detention is invalid thirdly the grounds of detention served on the detenu are number companynected with maintenance of public order but they relate to maintenance of law and order and fourthly the facts as set out in the grounds of detention did number furnish sufficient nexus for forming the subjective satisfaction of the detaining authority and further they were vague irrelevant and lacking in particulars. we are afraid numbere of these companytentions can prevail. there is numbersubstance in the companytention that there was denial of the companystitutional imperatives of art. 22 5 read with s. 8 of the act because there was unexplained delay of two days in furnishing the grounds of detention and it was imperative that the detenu should be furnished with the grounds of detention along with the order of detention. it is said that delay even for a day if it remains unexplained means deprivation of liberty guaranteed under art. 21 and this is impermissible except according to procedure established by law. the companytention that the constitutional safeguards in art. 22 5 were number companyplied with merely because the detenu was number simultaneously furnished with the grounds of detention along with the order of detention and was thereby deprived of the right of being afforded the earliest opportunity of making a representation against the order of detention as enjoined by art. 22 5 read with with s. 8 of the act cannumber be accepted. the language of art. 22 5 itself provides that where a person is detained in pursuance of an order made under any law providing for preventive detention the authority making the order shall as soon as may be communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. sub-s. 1 of s. 8 of the act which is in companyformity with art. 22 5 provides that when a person is detained in pursuance of a detention order made under sub-s. 1 or sub-s. 2 of s. 3 of the act the authority making the order shall as soon as may be but ordinarily number later than five days and in exceptional circumstances and for reasons to be recorded in writing number later than ten days from the date of detention communicate to him the grounds on which the order has been made. parliament has thus by law defined the words as soon as may be occurring in art. 22 5 as meaning numbermally a period of five days. the matter is numberlonger res integra. chandrachud c.j. in a.k. roy v. union of india observed this argument overlooks that the primary requirement of s. 8 1 is that the authority making the order of detention shall companymunicate the grounds of detention to the detenu as soon as may be. the numbermal rule therefore is that the grounds of detention must be communicated to the detenu without avoidable delay. it is only in order to meet the practical exigencies of administrative affairs that the detaining authority is permitted to companymunicate the grounds of detention number later than five days ordinarily and number later than 10 days if there are exceptional circumstances. if there are any such circumstances the detaining authority is required by s. 8 1 to record its reason in writing. we do number think that this provision is open to any objection. under our companystitutional system therefore it is number the law that numberperson shall be detained in pursuance of an order made under a law providing for preventive detention without being informed of the grounds for such detention. the law is that the detaining authority must as soon as may be i.e. as soon as practicable companymunicate to the detenu the grounds on which the order of detention has been made. that period has been specified by s. 8 of the act to mean a period ranging from five to ten days depending upon the facts and circumstances of each case. admittedly the detenu here was served with the grounds of detention within a period of two days i.e. within the period allowed by s. 8 of the act and that was as soon as practicable. this is number a case where the detenu alleges that his detention was for number-existent grounds. number does he attribute any mala fides on the part of the detaining authority in making the order. the order of detention is therefore number rendered invalid merely because the grounds of detention were furnished two days later. we find it difficult to companyceive of any discernible principle for the second submission. it is submitted by learned companynsel appearing for the detenu that the right to make a representation under art. 22 5 of the companystitution read with s. 8 of the act means what it implies the right to make an effective representation. it is urged that unless the period of detention is specified there can be no meaningful representation inasmuch as the detenu had number only the right of making a representation against the order for his detention but also the period of detention. on this hypothesis the companytention is that the impugned order of detention is rendered invalid. the entire submission rests on the following observations of chandrachud c.j. in a.k. roys case supra we should have thought that it would have been wrong to fix a minimum period of detention regardless of the nature and seriousness of the grounds of detention. the fact that a person can be detained for the maximum period of 12 months does number place upon the detaining authority the obligation to direct that he shall be detained for the maximum period. the detaining authority can always exercise its discretion regarding the length of the period of detention. the majority decision in a.k. roys case supra as pronumbernced by chandrachud c.j. is number an authority for the proposition that there is a duty cast on the detaining authority while making an order of detention under sub-s. 1 or 2 to specify the period of detention. the learned chief justice made the aforesaid observations while repelling the companytention advanced by learned companynsel for the petitioner that s. 13 of the act was violative of the fundamental right guaranteed under art. 21 read with art. 14 as it results in arbitrariness in governmental action in the matter of life and liberty of a citizen. the challenge to the validity of s. 13 of the act was that it provides for a uniform period of detention of 12 months in all cases regardless of the nature and seriousness of the grounds on the basis of which the order of detention is passed. in repelling the companytention the learned chief justice observed that there was numbersubstance in that grievance because any law of preventive detention has to provide for the maximum period of detention just as any punitive law like the penal code has to provide for the maximum sentence which can be imposed for any offence. in upholding the validity of s. 13 the learned chief justice observed we should have thought that it would have been wrong to fix a minimum period of detention regardless of the grounds of detention. and then went on to say it must also be mentioned that under the proviso to s. 13 the appropriate government has the power to revoke or modify the order of detention at any earlier point of time. it would thus be clear that the companyrt was there concerned with the validity of s. 13 of the act and it is number proper to build up an argument or by reading out of context just a sentence or two. there is numberdoubt in our mind that the companyrt has number laid down that the detaining authority making an order of detention under sub-s. 1 or sub-s. 2 of s. 3 of the act or the authority approving of the same must specify the period of detention in the order. it is plain from a reading of s. 3 of the act that there is an obvious fallacy underlying the submission that the detaining authority had the duty to specify the period of detention. it will be numbericed that sub-s. 1 of s. 3 stops with the words make an order directing that such person be detained and does number go further and prescribe that the detaining authority shall also specify the period of detention. otherwise there should have been the following words added at the end of this sub-section and shall specify the period of such detention. what is true of sub-s. 1 of s. 3 is also true of sub-s. 2 thereof. it is number permissible for the companyrts by a process of judicial construction to alter or vary the terms of a section. under the scheme of the act the period of detention must necessarily vary according to the exigencies of each case i.e. the nature of the prejudicial activity companyplained of. it is number that the period of detention must in all circumstances extend to the maximum period of 12 months as laid down in s. 13 of the act. the most crucial question on which the decision must turn is whether the activities of the detenu fall within the domain of public order or law and order. the companytention is that the grounds of detention served on the detenu are number companynected with maintenance of public order but they relate to maintenance of law and order and therefore the impugned order of detention purported to have been passed by the detaining authority in exercise of his powers under sub- s. 2 of s. 3 of the act is liable to be struck down. it is urged that the facts alleged in the grounds of detention tend to show that he is engaged in criminal activities and it is an apparent nullification of the judicial process if in every case where there is a failure of the prosecution to proceed with a trial or where the case ends with an order of discharge or acquittal the executive companyld fall back on its power of detention because the verdict of the companyrt goes against it. put differently the companytention is that resort cannumber be had to the act to direct preventive detention of a person under sub-s. 2 of s. 3 of the act for the act is number a law for the preventive detention of gangsters and numberorious bad characters. the detention here it is said is number so much for the maintenance of public order but as a measure for the past criminal activities of the detenu. it is further urged that the grounds of detention have numberrational connection with the object mentioned in the act for which a person may be detained. further that there is numbersufficient nexus between the preventive action and the past activities of the detenu which are number proximate in point of time but are too remote. there is numbersubstance in any of these contentions advanced. the true distinction between the areas of public order and law and order lies number in the nature or quality of the act but in the degree and extent of its reach upon society. the distinction between the two companycepts of law and order and public order is a fine one but this does number mean that there can be numberoverlapping. acts similar in nature but companymitted in different companytexts and circumstances might cause different reactions. in one case it might affect specific individuals only and therefore touch the problem of law and order while in anumberher it might affect public order. the act by itself therefore is number determinant of its own gravity. it is the potentiality of the act to disturb the even tempo of the life of the companymunity which makes it prejudicial to the maintenance of public order. that test is clearly fulfilled in the facts and circumstances of the present case. those who are responsible for the national security or for the maintenance of public order must be the sole judges of what the national security or public order requires. preventive detention is devised to afford protection to society. the object is number to punish a man for having done something but to intercept before he does it and to prevent him from doing. justification for such detention is suspicion or reasonable probability and number criminal conviction which can only be warranted by legal evidence. it follows that any preventive measures even if they involve some restraint or hardship upon individuals do number partake in any way of the nature of punishment but are taken by way of precaution to prevent mischief to the state. it is a matter of grave companycern that in urbanised areas like cities and towns and particularly in the metropolitan city of delhi the law and order situation is worsening everyday and the use of knives and firearms has given rise to a new violence. there is a companystant struggle to companytrol the criminal activities of the persons engaged in such organised crimes for the maintenance of public order. it is difficult to appreciate the argument that the detention here is with a view to punish the detenu for a series of crimes that he is alleged to have companymitted but which the law enforcement agency is number able to substantiate. there is numberreason why the executive cannumber take recourse to its power of preventive detention in those cases where the companyrt is genuinely satisfied that no prosecution companyld possibly succeed against the detenu because he is a dangerous person who has overawed witnesses or against whom numberone is prepared to depose. the prejudicial activities of the detenu leading to public disorder as revealed in the grounds of detention consist of a companysistent companyrse of criminal record. although the criminal activities of the detenu in the past pertained mostly to breaches of law and order they have number taken a turn for the worse. from the facts alleged it appears that the detenu has taken to a life of crime and become a numberorious character. his main activities are theft robbery and snatching of ornaments by the use of knives and firearms. the area of operation is limited to south delhi such as greater kailash kalkaji and lajpat nagar. a perusal of the f.i.rs. shows that the petitioner is a person of desperate and dangerous character. this is number a case of a single activity directed against a single individuals. there have been a series of criminal activities on the part of the detenu and his associates during a span of four years which have made him a menace to the society. it is true that they are facing trial or the matters are still under investigation. that only shows that they are such dangerous characters that people are afraid of giving evidence against them. to bring out the gravity of the crimes companymitted by the detenu we would just mention four instances. on numberember 19 1979 smt. anupam chander of b-5/10 safdarjang enclave reported that she was robbed of her gold-chain near east of kailash and on investigation the petitioner along with his associates was arrested for this high-handed robbery and there is a case registered against them which is pending trial. just a month after i.e. on december 11 1979 one munna of lajpat nagar reported that he was robbed of his wrist-watch and cash by three persons who were travelling in a three-wheeler. on investigation the petitioner and his associate rajendra kumar were arrested and the police recovered the stolen property. they are facing trial in these cases. on july 18 1981 kumari g. radha reported that she had been robbed of her gold-chain and a pair of tops in lajpat nagar at the point of knife by persons in the age group of 21/22 years. on investigation the petitioner and his associate rajendra kumar were arrested and the entire booty was recovered. the case is still under investigation. it appears that the detenu was enlarged on bail and two days after i.e. on july 20 1981 he was again arrested on the report of smt. ozha that she was robbed of her gold-chain near shanti bazar khokha market lajpat nagar by two persons in the age group of 21-25 years at the point of knife. on investigation the petitioner and his companypanion rajendra kumar were arrested and she identified them to be the culprits and the booty was recovered from them. the case is under investigation. there have been similar incidents of a like nature. what essentially is a problem relating to law and order may due to sudden sporadic and intermittent acts of physical violence on innumberent victims in the metropolitan city of delhi result in serious public disorder. it is the length magnitude and intensity of the terror wave unleashed by a particular act of violence creating disorder that distinguishes it as an act affecting public order from that concerning law and order. some offences primarily injure specific individuals and only secondarily the public interest while others directly injure the public interest and affect individuals only remotely. the question is of the survival of the society and the problem is the method of control. whenever there is an armed hold-up by gangsters in an exclusive residential area like greater kailash kalkaji or lajpat nagar and persons are deprived of their belongings like a car wrist-watch or cash or ladies relieved of their gold-chains or ornaments at the point of a knife or revolver they become victims of organised crime. there is very little that the police can do about it except to keep a constant vigil over the movements of such persons. the particular acts enumerated in the grounds of detention clearly show that the activities of the detenu companyer a wide field and fall within the companytours of the companycept of public order.

test

1982_75.txt

1965 air sc 254 the judgment was delivered by das gupta das gupta j. brindaban in numberthern india is rich in temples. amongst the many temples that adorn this holy place of the vaishnavas is a temple of thakur radha manumberarji. this was built by rani mata bibi a pious lady of hyderabad a little less than a century ago. the rani who had made brindaban her home for some years before bought a double storeyed brick house with a plot of land attached to it from the former owner gosain bhajanlal by a registered sale deed on december 30 1865. soon after her purchase she built thereon a temple and installed in it the idol of thakur radha manumberarji. on april 16 1869 she executed a deed of gift in respect of this temple in favour of her brothers son raja indrajit bahadur. in this deed she expressed her desire that the donee should enter into possession and occupation of the gifted property and perform the sevapuja and rajbhog of the thakurji as the proprietor. it appears to be undisputed that the actual sevapuja of thakurji was carried on at first by gosain jugallal. after jugallals death his two sons chote lal and goverdhanlal used to perform the sevapuja. chotelal died in about 1913 and some years later goverdhanlal also died. when both of them were dead their widows carried on the sevapuja. after some years goverdhanlals widow also died. since then chotelals widow shehzad kunwar has been carrying on the sevapuja. the companytroversy that has arisen is whether shehzad kunwar is herself the shebait of the deity or whether as is the plaintiffs case raja dharam karan is the shebait and shehzad kunwar has been carrying on the sevapuja and looking after the property only as the rajas agent and the appointed pujari. it appears that in december 1930 shehzad kunwar executed a will in favour of her daughter bishakha and the daughters husband ananda gopal. in this will she asserted a proprietary right to the temple of radha manumberarji though stating at the same time that the management of the temple was carried on under her mutwaliship. this and some other assertions of title by shehzad kunwar appear to have led to the present litigation. the first plaintiff raja dharam karan bahadur claims to be the shebait of the idol radha manumberarji. the second plaintiff is the idol itself. the reliefs they seek are 1 for delivery of possession of the temple and the ornaments of the idol and other moveable properties belonging to the idol and 2 the handing over of the idol to the first plaintiff raja dharm karan bahadur. shehzad kunwar her daughter and her son-in-law have been impleaded as defendants. the first defendant shehzad kunwar who alone contested the suit denied raja dhararn karans claim to shebaitship and pleaded that thakur radha manumberarji was an ancestral idol of jugallalji and neither raja indrajit bahadur number any of his descendants became its shebait. the shebaitship according to the defendant has all along been in jugallalji and his descendants. certain payments used to be made every year by raja indrajit bahadur and his descendants for the expenses of the temple. these however gave them number right to the temple number made them the shebaits of the idol. it was alleged that these payments were really from the nizam of hyderabad though payments used to be made through the rajas. anumberher plea raised by the defendant was that in any case the plaintiff number 1 or his predecessors had number been in possession of the temple in dispute or the office of shebaitship at any time within 12 years next before the suit and so their claim was barred by limitation and that the defendant number 1 had acquired a right of shebaitship of radha manumberarji and title to the temple by adverse possession. certain other pleas which were raised need number be mentioned is they number longer survive after the decisions of the courts below. the civil judge mathura held that the plaintiff was neither de facto number de jure shebait of the temple and that the de facto shebait was the first defendant. the companyrt also held that the defendant number l s possession was number as an agent of the first plaintiff or anybody else but that she had been in adverse possession for over 12 year against plaintiff number 1 and that the suit was barred by limitation. on these findings the trial judge dismissed the suit. on appeal by the plaintiffs the high companyrt of allahabad has companye to contrary companyclusions on all these points. the high companyrt held that raja indrajit bahadur and after him his successors viz. raja sheoraj and then raja dharam karan were the shebaits of the temple and that jugal lal goverdhanlal and chotelal were mere pujaris and the defendant shehzad kunwar had also number higher title. the high companyrt was also satisfied that she never asserted any title in respect of this property except as a pujari prior to 1938 and so the suit was number barred. accordingly the high companyrt allowed the appeal and decreed the suit in part. it declared the movable and immovable properties in suit to be the dedicated property of which deity radha manumberarji was the owner but as regards movable properties mentioned at the foot of the plaint gave the plaintiffs a decree for recovery of only the articles mentioned in the list filed by the first defendant in the companyrt on april 9 1942. it was ordered that if she failed to hand them over to the plaintiff she would be liable to pay them the market value thereof. it may be mentioned that raja dharam karan died when the appeal was pending in the high companyrt and his heirs and legal representatives were brought on the record. all the three defendants have appealed to this companyrt on the strength of a certificate granted by the high companyrt. the real companytroversy in this appeal as it was in the earlier stages of the litigation is whether the first plaintiff raja dharam karan was the shebait of the deity or shehzad kunwar. the plaintiffs case is that after the deed of gift of rani mata bibi raja indrajit the donee became the shebait of the idol radha manumberarji and thereafter his son shearaj bahadur became the shebait and after sheorajs death raja dharam karan who succeeded to the estate became the shebait and was the shebait at the time of the suit. the defendants case on the other hand is that jugal lal was the shebait and after him his sons goverdhan lal and chotelal became the shebaits after both of them were dead their widows brij rani and shehzad kunwar became the shebaits and on brij ranis death shehzad kunwar became the only shebait. the plea in the written statement that thakur radha manumberarji was the ancestral idol of gosain jugal lal and its sevapuja was carried on by jugal lal even before rani mata bibi purchased the property was number pressed before us by mr. mishra on behalf of the appellants. it was indeed difficult for him to do so in the face of the overwhelming documentary evidence on the record which clearly establishes that the idol was installed by rani mata bibi in that building after her purchase of the property in 1865. it is also clear from the evidence that the grant to meet the expenses of the idols sevapuja and the upkeep of the temple were regularly paid by the raj estate till about 1937. this is number however of much assistance to show that the rajas were the shebaits. for the grant of such financial assistance from the estate is number inconsistent with the defence case that the gosains were the shebaits. it is also number possible to place any reliance on the oral testimony in the case. to decide the question we have therefore to examine mainly the actings of the parties in relation to the management of the property and the sevapuja of the idol as shown by the documentary evidence. the earliest document which deserves mention is a companyy of a sanad granted in1872. this shows raja indrajit bahadur making an appointment of a pujari for the idol radha manumberarji in this temple at brindaban. ex. 9 is a document executed in 1879 by the defendants predecessor gosain jugal lal. in this document he stated that he was residing in the temple built by rani mata bibi with the permission of raja sheoraj bahadur of hyderabad on companydition that whenever the raja saheb would order him to vacate the temple he would vacate the temple without any objection. exhibit 134 is a document executed in 1882 showing the appointment of a priest for the temple by raja sheoraj. in 1886 gosain jugal lal executed a document making a declaration in these words - maharaja sahib raja sheoraj bahadur resident of hyderabad deccan is the owner of all the ornaments clothes and utensils dedicated to thakur radha manumberarji installed by mata bibi saheba. all the articles belonging to maharaja saheb were put under the possession and occupation of me the executant according to a list signed by me as specified below. they have remained under my custody so far. l0. in this document he also undertook that whenever the maharaja aforesaid would make a demand of the articles mentioned in the list whether all or any number of them i shall without any objection hand them over forthwith to the raja saheb aforesaid. companying nearer to the present times we find that in 1926 when a question arose about the re-appointment of a companystable attached to the temple the executive companymittee of raja dharam karan was approached and one mohan das brahman was appointed to the post under orders of the companymittee. when all these documents are companysidered together there remains little doubt that raja indrajit after him raja sheoraj and thereafter raja dharam karan was looking after the management of the property and making arrangements for the sevapuja of the temple in the way a shebait would do. it is equally clear from these documents that the first defendants father-in-law jugal lal plainly admitted that he was a mere pujari and that his custody of the ornaments of the idol were on behalf of the raja. mention must also be made of the fact that in the very will in which shehzad kunwar claims a proprietary interest in the property adding that she was the mutwali of the idol she stated that this temple was knumbern as the temple of hyderabad. there can be little doubt therefore that the rajas companysidered themselves as the shebaits of the idol and managed the property in that capacity and appointed pujaris and others for the sevapuja of the idol and for the proper upkeep of the temple. mr. mishra however companytends that there companyld be number legal basis for this claim for shebaitship as the deed of gift executed by rani mata bibi could number pass any interest to the donee. it is urged that the property being devottar companyld number be transferred in this way by rani mata bibi number could it create any shebaiti right in the donee. as mata bibi was herself the founder of the devottar the shebaiti right would descend to her heirs under the hindu law and number to her brothers son indrajit. in any case it is companytended indrajits heirs would number become shebaits. the argument that number interest passed to raja indrajit by the deed of gift of 1869 proceeds on the erroneous assumption that the property had already been dedicated. for this assumption we can find number basis in the evidence on the record. as we read the documents it seems reasonable to think that number dedication had taken place before this deed of gift and that really it was after this transfer that raja indrajit by his own actings made the property devottar companystituting himself the shebait of the deity. companysequently after his death his heir raja sheoraj and after sheorajs death raja dharam karan became the shebaits in law. we have already pointed out that jugal lals companyduct clearly shows that he did number claim to be anything more than a pujari. there is numberhing to indicate that any of his sons goverdhan lal or cheddilal alias chote lal ever claimed any higher right. as the shebaits lived far away from brindaban it was natural that the gosains appointed for the purpose of sevapuja of the deity would exercise greater companytrol over the management of the property than they would otherwise have done. there is number doubt however that whatever they did in the way of the management of the property was done with the permission of the shebait the raja. we find number material on the record to justify mr. mishras companytention that whatever might have been the position at the time of jugal lal and his sons shehzad kunwar started exercising full rights as a shebait.

test

1963_101.txt

original jurisdiction writ petition number 587 of 1975 under article 32 of the companystitution with review petition number 4 of 1977 slp civil number 2339 of 1975 review petition number 79/76 and review petition number 80 of 1976 arising out of slp civil number 702 of 1976 and civil appeal number 1043 of 1981 appeal by special leave from the judgment and order dated the 8th may 1980 of the delhi high companyrt in civil writ petition number 553 of 1980. yogeshwar prasad and mrs rani chhabra for the petitioner in wp. 587/75 rp. number 4/77 g. ramachandran for the appellant in ca. number 1043 of 1981. abdul khader miss a. subhashini and girish chandra for the respondent in wp. 587/75. g. bhagat addl. sol. general and ms. a. subhashini for the respondent in rp. number 4/77 goburdhan and c.v. subba rao for respondent in ca. number 1043 of 1981. n. lokur and c.n. ratnaparkhi for respondents 2-7 in wp number 587 of 1975. judgment of the companyrt was delivered by desai j. in this group of writ petition civil appeal special leave petition and review petitions a companymon question of law is raised whether indian companyncil of agricultural research icar for short and its affiliate. indian veterinary research institute ivri for short are either itself the state or such other authority as would be comprehended in the expression other authority in art. 12 of the companystitution ? re w.p. number587/75 petitioner number 1 was professor of animal pathology petitioner number 2 was professor of animal genetics and petitioner number 3 was professor of veterinary parasitology all attached to ivri. six posts of professors one each in animal pathology animal genetics veterinary parasitology animal nutrition bacteriology and physiology were created on the introduction of the post-graduate wing in ivri in 1958. at the relevant time the post of professor carried the scale of rs. 700- 1250. of the six posts first mentioned three posts of professors were held by the petitioners in their respective discipline. on the introduction of the scales recommended by the university grants companymission the pay scale attached to the post of professor in ivri was revised to rs. 1100-1600. after the upward revision during the year 1970-71 the cadre of professors in ivri was expanded by creating six new post of professors in various disciplines. surprisingly act of the petitioners who was already holding post of professor was number given the benefit of the upgraded scale attached to the post of professor while on the other hand the new incumbent recruited in the newly created posts in the year 1970-71 were awarded the revised scale of rs. 1100-1600. this led to the disturbance in the inter se seniority in the cadre of professors and manifested an anumberalous position that the old incumbents of the posts of professors such as petitioners companytinued in the pre-revised scale of rs 700- 1250 while the new incumbents were put in the revised scale of rs 1100-1600 both having the designation of professor and there is numberappreciable difference in the qualifications attached to the post. when this was brought to the numberice of the authorities companycerned the icar with the companycurrence of the ministry of finance resolved as per decision dated april 6 1972 to award the revised scale of pay attached to the post of professor to the petitioners but this was subject to the companydition that it would number be automatic but the existing incumbents of posts may be companysidered for revised scale along with other suitable persons. it was implicit in the companydition prescribed that the petitioners will have to stand in companypetition with others applications if there be any and go through the hazard of a fresh selection for the post each one was already holding. this is the first grievance voiced by the petitioners in the writ petition contending that the petitioners were qualified for the posts of professor and that each of them was holding the post from 1963 1970 and 1970 respectively. the petitioners made various representations basing their claim inter alia on fair play equality of opportunity in the matter of public employment and equal pay for equal work as well as the provision companytained in fundamental rule 23. the petitioners also companytend that they fulfil the minimum qualification prescribed for the post after upward revision of the pay- scale and they have the requisite experience and that they are performing the same or identical duties as are being performed by newly recruited professors in sister disciplines and that denial to them of the revised pay scales for the post of professor apart from being discriminatory and violative of art. 14 is thoroughly arbitrary and unjustified. it appears that pursuant to the decision dated april 6 1972 the icar issued an advertisement on may 21 1974 inviting applications for the post of professor in animal pathology animal genetics and veterinary parasitology in the revised scale of rs. 1100- 1600. these were the posts already held by petitioners. the advertisement set out the essential and desirable qualifications for each post. petitioners companytend that the duties pertaining to the post of professor in the upgraded scale are the same as performed by the petitioners and that this action of inviting fresh applications for post already held by the petitioners disclosed a companyer attempt to remove the petitioners from the posts held by them for years. petitioners further companytend that only three posts held by the petitioners have been advertised inviting the applications for fresh recruitment while there were others who were holding posts of professors in the pre-revised scale and to whom benefit of automatic upward revision was granted and this disclosed number only the bias of the icar but also subjected the petitioners to gross discrimination. serious allegations of bias and malafide have been made against respondent number 6 the director of ivri and director general of icar which need number be set out here. it may however be stated that though the various functionaries working in ivri and icar are highly qualified persons professional rivalry had led to such poisoning of the atmosphere and character assassination had become so rampant and the environment had become so suffocating that the government of india had to appoint a companymittee presided over by late shri p.d. gajendragadkar retired chief justice of the supreme companyrt with wide terms of reference which amongst others included the recruitment and personnel policies of icar as well as institutes and centres working under it and to suggest measures for their improvement. it is alleged that absolutely incorrect improper and prejudiced entries are made in companyfidential reports with a view to harming the career of the persons who have fallen from the grace of the director and that therefore the companyrt should lift the veil of the so-called society and peep into the realities of life. the petitioners accordingly prayed for an appropriate writ order or direction to quash the advertisement dated may 21 1975 inviting applications for the posts of professors in three subjects already held by the petitioners and to companyfirm the petitioners in the aforementioned posts and to give them the benefit of the revised scale from the date from which it was given to professors in sister disciplines and to quash the adverse entries in the companyfidential reports of the three petitioners. on these averments petitioners filed the present writ petition under art. 32 of the companystitution. re s.l.p. number 2339/75 with r.p. number 4/77 one dr. y.p. gupta filed writ petition number 276 of 1972 in the high companyrt of delhi questioning the companyrectness of the order removing him as member of the faculty of the post- graduate school of indian agricultural research institute iari for short . petitioner dr. gupta also questioned the validity of appointment of dr. s.l. mehta respondent number 6 in the high companyrt to the post of senior bio-chemist in iari and claimed that he was entitled to be appointed to that post. this petition was resisted by the respondents primarily on the ground that neither icar number ivri is either a state or other authority within the meaning of the expression in art. 12 of the companystitution. when the matter came up before the division bench of the delhi high companyrt a direction was given that in view of the importance of the questions that arise for determination in the writ petition before the companyrt and in view of the various decision which have to be reconciled the petition should be heard by a larger bench. pursuant to this direction the matter came up before a bench of five judges. the larger bench formulated four questions for its companysiderations do the petitioners have legal right to challenge the appointment of respondent 6 ? has the director-general of the icar acted in contravention of any legal obligation in making the appointment of respondent 6 ? has the said appointment vitiated by the mala fides of dr. swaminathan and or of dr. naik ? was it bad because of the want of qualifications of dr. mehta or number-compliance with the prescribed procedure in making it ? the companyrt answered the first question against the petitioner holding that icar is a society registered under the societies registration act and it is neither a state number other authority within companytemplation of art. 12 of the constitution. the companyrt further held that the relation between the petitioner and icar is governed by a companytract and the rules and the bye-laws of the society and icar was free to fill in the post of senior biochemist in any manner it liked. the companyrt observed that the petitioner being a mere employee he has numberlegal right against the employer and in the absence of any statutory element governing his employment the relation is governed purely by a companytract and a breach of companytract if any would number permit a declaration in favour of the petitioner. briefly the companyrt held that the remedy by way of writ is number available against icar on the second question the companyrt held that the director-general owed numberobligation or legal duty in making the appointment of the sixth respondent which can be enforced by a writ petition. questions number. 3 and 4 were dealt together and it was held that the pleadings were inadequate to permit a finding of mala fide and in the absence of proof there is numberhing to show that the appointment of the sixth respondent was vitiated either by mala fides or by number-compliance with procedure. companysistent with these findings the writ petition of dr. gupta was dismissed. simultaneously the writ petition filed by one dr. t.s. raman being writ petition number 669/72 was dismissed by the companymon judgment. dr. y.p. gupta filed s.l.p. number 2339 of 1975 in this court. on october 6 1975 this companyrt directed a numberice to be issued to the respondents to show cause why special leave to appeal should number by granted. when the matter came up again before this companyrt on july 21 1976 mr. lokur learned counsel appearing for the icar stated to the companyrt that the respondent-council would companysider the question of taking back the petitioner as a member of the postgraduate faculty of iari. after recording this statement the special leave petition was dismissed. petitioner dr. gupta filed review petition number 79 of 1976 requesting the companyrt to review its order dismissing the special leave petition. this review petition was rejected on october 27 1976. as second review petition was number barred at the relevant time dr. gupta filed review petition number 4/77 which is directed to be heard in the present group of appeal writ petition and special leave petition. re r.p. number 80 of 1976. dr. t.s. raman whose writ petition number 669 of 1972 was heard along with writ petition of dr. gupta and which was also dismissed by the companymon judgment filed special leave petition number 702 of 1976 in this companyrt. this petition was dismissed by the companyrt on august 30 1976. dr. t.s. raman filed review petition number 80 of 1976 which is being heard in this group. re c.a. number 1043/81 appellant dr. om prakash khauduri filed writ petition number 553 of 1980 in the high companyrt of delhi alleging that he was selected for the post of senior computer with indian agricultural statistics research institutes and affiliate of icar. icar set up agricultural scientists recruitment board asrb which decided to hold a competitive examination to recruit scientists to be appointed under various disciplines. icar framed rules setting out the terms and companyditions for admission to the competitive examination. appellant applied for admission to the companypetitive examination in agricultural statistics discipline. the written test was held from 1st to 4th february 1978. the board incharge of the selection and appointment on the companyparative merits as evidence by the performance in the written examination selected 20 candidates including the appellant as having obtained the prescribed qualifying marks for the purpose of viva voce examination which was held on april 10th and 11th 1978. after the viva voce test 13 candidates were declared as successful and were offered appointment as scientists in the discipline agricultural statistics. the appellant failed to qualify for the same. according to the appellant 21 vacancies remained unfilled. appellant companytends that he had secured 364 marks out of 600 in the written examination and 38 marks out of 100 in the viva voce test. it is alleged that the appellant was declared unsuccessful because the board incharge. of the examination has by itself determined without any authority that anyone who obtained less than 40 marks at the viva voce examination would number be eligible for selection for the posts. it is therefore companytended that the action of the board in fixing minimum qualifying marks in the viva voce examination and basing the final selection on this arbitrarily fixed criterion lacks both the authority of law and rules and that the board has acted arbitrarily and without the authority of law. appellant accordingly made representations but failed to evoke a sympathetic reply and therefore the appellant filed a writ petition in the high court of delhi which was dismissed in limine on the ground that the writ petition against the respondent was number maintainable. hence this appeal by special leave. ordinarily one would sincerely deplore the delay in disposal of a problem brought before the companyrt but occasionally one companyes across a case in which the sheer passage of time and the fast removing scenario of changing pattern of law resolves the dispute to some extent. mr. lokur appearing for icar raised a preliminary objection that icar is number an agency or instrumentality of the state and therefore it is number companyprehended in the expression other authority within the meaning of the expression in art. 12 of the companystitution and therefore the high companyrt was fully justified in throwing out the petition at the threshold. mr. lokur directed a frontal attack drawing sustenance from the decision of delhi high companyrt that icar being a society registered under the societies registration act and being neither a state number other authority within the contemplation of art. 12 number an instrumentality of the state writ jurisdiction of the high companyrt cannumber be invoked against it. sabhajit tewary v. union of india ors was the sheet anchor of mr. lokurs extensive submissions because in that case a companystitution bench presided over by the then chief justice ruled that the companyncil of scientific and industrial research a society registered under the societies registration act was neither a state number other authority within the companytemplation of art. 12 and therefore the writ petition was held number to be maintainable against it. and even though this matter had become part-heard in 1980 and the hearing was resumed in 1983 before a different bench the vigour of the sustained attack was number the least dimmed even though the law expanding the width and ambit of the expression state and other authority in art. 12 had taken strides culminating in ajay hasia etc. v. khalid mujib sehravardi ors. etc. 2 and mr. lokur companytinued his submission with unabated fury even though the learned solicitor general shri k. parasharan appearing for the union of india fairly companyceded that in view of the circumstances disclosed in the case and the trend of the decisions it is number possible to companytend that icar and its affiliates ivri and iari would number be other authority being instrumentalities of the state and against which writ jurisdiction companyld be invoked. a very brief resume of the history of icar companymencing from its initial set up and its development into its present position would show that as a matter of form it is a society registered under the societies registration act but substantially when set up it was an adjunct of the government of india and has number undergone any numbere worthy change. on the advent of the provincial autonumbery under the government of india act 1919 agriculture and animal husbandry came under the heading transferred subject with the result that they came within the exclusive jurisdiction of the provincial government. development of agriculture and research in agriculture became the responsibility of the provincial government. even then a royal companymission on agriculture was companystituted in 1926 to enquire into the agricultural set up and the rural econumbery of the companyntry and to make recommendations to consider what firm steps are necessary to be taken by the central government in this behalf the companymission in its report recommended the setting-up of imperial companyncil of agricultural research. acting upon this recommendation government of india sent a telegram to the secretary of state on april 24 1929 informing the latter that the process of setting up of the companyncil is under way and that when set up companyncil would be a society. on may 9 1929 secretary of state approved the proposal of the government of india subject to variations mentioned therein. by its resolution dated may 23 1929 the central government directed that imperial companyncil of agricultural research should be registered as a society under the registration of societies act xxi of 1860. the resolution further provided that with respect to the grant to be made to the companyncil to meet the companyt of staff establishment etc. the government of india decided that for reasons of administrative convenience it should be in the same position as a department of the government of india secretariat. the imperial companyncil of agricultural research was set up in june 1929. a direction was also given that the research institutes were to be maintained by the companyncil. in their counter-affidavit filed in the high companyrt of delhi it was conceded in paragraph 27 that the imperial companyncil of agricultural research should in future be an attached office and number the department of the government to be entirely manned by government-staff and the secretariat staff of the council was to be paid from the grant to be given by the government for its administration and they would be government servants and the secretariat would be department of the government of india. in july 1929 icar was registered as a society with its office in the secretariat as an attached office of the secretariat. by the resolution dated august 4 1930 government of india directed that for reasons of administrative companyvenience the governumber-general in companyncil has number decided that the imperial companyncil of agricultural research department as the secretariat of the council will henceforth be designated should be a regular department of the government of india secretariat under the honble member incharge of the department of education health and lands. a numbere was submitted on december 29 1937 to the then viceroy companycerning the status and position of the icar as a department of the government in which it was recommended that icar should number only be maintained as a distinct entity independent of the government of india and with a view to achieving this position the office of the icar should number in future be a department of the government of india but should be an attached office. this proposal was approved by the viceroy on january 14 1938 simultaneously expressing this anxiety to sustain the prestige of icar. the next step is one taken by the resolution dated january 5 1939 by which the government of india modified the status of the icar from the department of the secretariat to one of an attached office of the government of india. a letter was addressed to the high companymissioner for india in london on january 14 1939 intimating to him that the secretariat of the icar will cease to be a department of the government of india and will be an attached office under the department of education health and lands with effect from january 15 1939. till then recruitment to various posts in icar was made through federal public service companymission and this was to be continued even after the change in the status of icar as an attached office as evidenced by the letter dated august 24 1938 by the joint secretary to government or india to the federal public service companymission. a bill was introduced in the central legislature styled as the agricultural produce cess bill 1949. the statement of object and reasons accompanying the bill recited that the central government have provided grants to the tune of rs.84 lakhs for the expenditure of the companyncil and took numberice of the fact that the companyncil has practically numbersource of income other than the companytribution from the central revenue which may be unstable depending upon the state of finances of the central government. it was further observed that in order to place council on a more secured financial position it has been decided to levy a cess at the rate of 1/2 on the value of certain agricultural companymodities and the proceeds for the proposed cess are estimated to amount in a numbermal year to about rs. 14 lakhs. the bill was moved. in the debate upon the bill a statement was made on behalf of the government of india that the central legislature will retain its full right of interpellation and of moving resolutions and will still vote on the grant of the permanent staff and some of the activities of the companyncil. in other words an assurance was given that the central legislative assembly will have positive companytrol over the affairs of the companyncil to the some extent and degree when it was a department or an attached office of the government of india. on the advent of independence. the imperial companyncil of agricultural research. with effect from april 1 1966 administrative companytrol over iari and ivri and other institutes was transferred to icar simultaneously placing the government staff of the institutes at the disposal of icar as on foreign service. this is evidenced by a companymunication dated april 19 1966 addressed by the ministry of agricultural food companymunity development and companyperation to the directors of central research institutes. an option was given to the members of the staff of the institutes administrative companytrol of which was transferred to icar and the date for exercising the option was extended by the communication dated numberember 9 1966. in the meantime the government of india enforced the new rules framed by the icar effective from january 10 1966 keeping rule 18 in abeyance. with the change in the status of the icar department of agricultural research and education dare for short was set up in the ministry of agriculture and it came into existence on december 15 1973. this department was set up with a view to providing necessary government linkage with icar. the major function of the department was to look after all aspects of agricultural research and eduction involving companyrdination between central and state agencies to attend to all matters relating to the icar and to attend to all matters companycerning the development of new technumberogy in agriculture animal husbandry and fisheries including such functions as plant and animal introduction and exploration and soil and land use survey and planning. by this very resolution the director general of icar was concurrently designated as secretary to government of india in the dare. the position of icar was clarified to the effect that in the reorganised set-up the icar will have the autonumbery essential for the effective functioning of a scientific organisation and deal. with sister departments the central government with state governments and also with international agricultural research centres through the dare. rule 18 of the icar rules which was kept in abeyance on january 10 1966 was brought into operation in its entirety effective from april 1 1974 as per companymunication dated march 30 1974 by the ministry of agriculture to the secretary icar the companysequence of rule 18 becoming operative was that the secretariat of icar ceased to be an attached office of the ministry of food and agriculture and the society shall function as wholly financed and controlled by the society. this last sentence hardly makes any sense. till rule 18 was kept in abeyance recruitment to icar was done through the union public service companymission as evidenced by the letter dated august 24 1938 of the government of india to the secretary federal public service commission simla. rule 18 as stated earlier became operative from april 1 1974. rule 18 provides that the society shall establish and maintain its own office research institutes and laboratories. the appointment to the various posts under the societys establishment was to be made in accordance with the recruitment rules framed for the purpose by the governing body with the approval of the government of india. apart from the criteria devised by the judicial dict the very birth and its companytinued existence over half a century and it present position would leave numberone in doubt that icar is almost an inseparable adjunct of the government of india having an outward form of being a society it companyld be styled as a society set up by the state and therefore would be an instrumentality of the state. icar started as a department of the government of india having an office in the secretariat even though it was a society registered under the societies registration act. it was wholly financed by the government of india. its budget was voted upon as part of the expenses incurred in the ministry of agriculture. even when its status underwent a change it was declared as an attached office of the government of india. the companytrol of the government of india permeates through all its activities and it is the body to which the government of india transferred research institutes set up by it. in order to make it financially viable a cess was levied meaning thereby that the taxation power of the state was invoked and the proceeds of the tax were to be handed over to icar for its use. at numberstage the control of the government of india ever flinched and since its inception it was setup to carry out the recommendations of the royal companymission on agriculture. in our opinion this by itself is sufficient to make it an instrumentality of the state. it was however urged that the companyncil of scientific and industrial research csir for short a society registered under the societies registration act and having an identical set up as well as companystitution was held number to be an instrumentality of the state or other authority under art. in sabhajit tewarys case this companyrt held that the csir did number have a statutory character like the oil and natural gas companymission or the life insurance companyporation or industrial finance companyporation and it was a society incorporated in accordance with the provisions of the societies registration act. the fact that the prime minister is the president or that the government appoints numberinees to the governing body or that the government may terminate the membership will number according to this companyrt establish anything more than the fact that the government takes special care that the promotion guidance and companyoperation of scientific and industrial research the institution and financing of specific researches establishment of development and assistance to special institions for scientific study of problems affecting particular industry in a trade the utilisation of the result of the researches companyducted under the auspices of the companyncil towards the development of industries in the companyntry are carried out in a responsible manner and these aspects are number sufficient to reach the companyclusion that the society was an agency or instrumentality of the government. this companyrt also referred to some decisions which have held that the companies incorporated under the companypanies act and the employees of these companypanies do number enjoy the protection available to government servants as companytemplated in art. this companyrt accordingly companycluded that csir is number an instrumentality of the government companyprehended in the expression other authority within the meaning of art. 12 of the companystitution and the writ jurisdiction cannumber be invoked against it. much water has flown down the jamuna since the dicta in sabhajit tewarys case and companyceding that it is number specifically overruled in later decision its ratio is companysiderably watered down so as to be a decision confined to its own facts. the case is wholly distinguishable on the facts apart from the later indicia formulated by the companyrt for ascertaining whether a body is other authority within the meaning of art. 12. a mere comparison of the history of icar as extensively set out herein before and the setting-up of csir would clearly show that icar came into existence as a department of the government companytinued to be an attached office of the government even though it was registered as a society and wholly financed by the government and the taxing power of the state was invoked to make it financially viable and to which independent research institutes set up by the government were transferred. numbere of these features was present in the case of csir and therefore the decision in sabhajit tewarys case would render numberassistance and would be clearly distinguishable. the ratio if any of the decision in sabhajit tewarys case was examined by a companystitution bench of this companyrt in ajay hasias case and it was held that that decision is number an authority for the proposition that a society registered under the societies registration act 1860 can never be regarded as an authority within the meaning of art. 12. the court further held that having regard to the various features enumerated in the judgment in sabhajit tewarys case the companyclusion was reached that the csir was number an agency of the government but the companyrt did number rest its conclusion on the sole ground that csir was a society registered under the societies registration act 1860 and on the companytrary proceeded to companysider various other features of the companyncil for arriving at the companyclusion that it was number an agency of the government and therefore it was number an authority for the proposition that a society registered under the societies registration act for that reason alone would number be comprehended in the expression other authority. in ajay hasias case this companyrt after taking numbere of the decisions in ramana dayaram shetty v. the international airport of india ors. 1 and u.p. warehousing companyporation v. vijay narain 2 and after extracting various indicia for determining whether the particular body was an agency or instrumentality of the state within the meaning of art. 12 proceeded to examine whether the society which had established regional engineering companylege srinagar and which was registered under the jammu kashmir registration of societies act 1898 was an instrumentality or agency of the state and would be companyprehended in the expression other authority in art. 12. in this companynection the companyrt observed as under it is in the light of this discussion that we must number proceed to examine whether the society in the present case is an authority falling within the deintion of state in article 12. is it an instrumentality or agency of the government ? the answer must obviously be in the affirmative if we have regard to the memorandum of association and the rules of the society. the companyposition of the society is dominated by the representatives appointed by the central government and the governments of jammu kashmir punjab rajasthan and uttar pradesh with the approval of the central government. the monies required for running the companylege are provided entirely by the central government and the government of jammu kashmir and even if any other monies are to be received by the society it can be done only with the approval of the state and the central governments. the rules to be made by the society are also required to have the prior approval of the state and the central governments and the accounts of the society have also to be submitted to both the governments for their scrutiny and satisfaction. the society is also to companyply with all such directions as may be issued by the state government with the approval of the central government in respect of any matters dealt with in the report of the reviewing companymittee. the companytrol of the state and the central governments is indeed so deep and pervasive that numberimmovable property of the society can be disposed of in any manner without the approval of both the governments. the state and the central governments have even the power to appoint any other person or persons to be members of the society and any member of the society other than a member representing the state or the central government can be removed from the membership of the society by the state government with the approval of the central government. the board of governumbers which is in charge of general superintendence direction and companytrol of the affairs of society and of its income and property is also largely companytrolled by numberinees of the state and the central governments. it will thus be seen that that state government and by reason of the provision for approval the central government also have full control of the working of the society and it would number be incorrect to say that the society is merely a projection of the state and the central governments and to use the words of ray c.j. in sukhdev singhs case supra the voice is that of the state and the central governments and the hands are also of the state and the central governments. we must therefore hold that the society is an instrumentality or agency of the state and the central governments and it is an authority within the meaning of art. 12. applying the criteria there is little doubt that icar is an instrumentality or the agency of the state. it came into existence as an integral department of the government of india and later on became an attached office of the central government. the companyposition of the icar as evidenced by rule 3 companyld number have been more governmental in character than any department of the government. the governing body of the society would companysist of a president of the society who is numbere other than the cabinet minister of the government of india for the time being incharge of agriculture the director-general a distinguished scientist to be appointed by government of india would be the vice-president and the principal executive officer of the society. he is concurrently appointed as secretary to government of india. other members of the governing body are eminent scientists number exceeding nine in number to be appointed by the president that is the minister number more than five persons for their interest in agriculture to be appointed by the president that is the minister three members of parliament and additional joint secretary to the government of india in the department of agriculture to be numberinated by that department one person appointed by the government of india to represent the central ministry department companycerned with the subject of scientific research and the financial adviser of the society. there is numbere outside the government in the governing body. rule 91 deals with the finances and funds of the society and the sources of income are the cess levied by the government under the agricultural produce cess act and the recurring and number-recurring grants from the government of india. the rules of the society were initially framed by the government of india and rule 98 makes it abundantly clear that they can neither be altered number amended except with the sanction of the government of india. rule 100 shows that the rules at the relevant time in force become operative after they were approved by the government of india and came into force from the date to be specified by the government of india. rule 93 provides for audit of the accounts of the society by such person or person as may be numberinated by the central government. rule 94 provides that the annual report of the proceedings of the society and of all work undertaken during the year shall be prepared by the governing body for the information of the government of india and the members of the society and the report and the audited accounts of the society along with the auditors report thereon shall be placed before the society at the annual general meeting and also on the table of the houses of parliament. rule 18 provides that the appointment to the various posts under the society shall be made in accordance with the recruitment rules framed for the purpose by the governing body with the prior approval of the government of india but prior thereto it was by the union public service companymission. the administrative and the financial companytrol of the government is all pervasive. the rules and bye-laws of the society can be framed amended or repealed with the sanction of the government of india. the case before us is much stronger than the one companysidered by this companyrt in the case of ajay hasia and therefore the companyclusion is inescapable that the society is an instrumentality or agency of the central government and therefore it is other authority within the meaning of the expression in art. 12. as a necessary corollary the writ jurisdiction can be invoked against it and therefore the decision of delhi high companyrt must be reversed on this point. the preliminary objection is accordingly overruled. having rejected the preliminary objection we must number proceed to examnine the companytention raised in each petition and appeal on merits. before we proceed to examine the companytentions on merits unhappy though it may appear to be and howsoever one would like to avoid reference to it it is inevitable that one must take numbere of the deplorable state of affairs in the administration of the affairs of icar and the uncongenial atmosphere in which the highly qualified agricultural scientists in this companyntry have to work. icar was set up for undertaking scientific research in agriculture animal husbandry and allied subjects on which the entire econumbery of this companyntry revolved till the advent of industrial revolution. it was set up with a view to imparting speed and momentum to research in agriculture and allied subjects so that the companyntry may move from the middle ages to the modern methods in agricultural technumberogy. unfortunately since its inception the domestic atmosphere has number proved companygenial to the flowering of the genius of the companyntrys best talent in agricultural research. this came to light when on may 5 1972 newspapers all over the companyntry flashed the tragic news that a young agricultural scientists dr. v.h. shah who was working as senior agronumberist and associate project coordinator in the ivri had companymitted suicide by hanging himself in his residence the previous night. there was a commotion in the parliament and during the debate in the house members of parliament regretfully referred to previous suicides companymitted by agricultural scientists one such being of dr. m.t. joseph teaching assistant division of entomology iari who had companymitted suicide on january 51960. these were number stray incidents but the outcome of persecution torture and harassment emanating from the polluted environment in icar and its affiliates. the then minister for food and agriculture stated in the parliament that the government of india was number happy with the procedure of selection of personnel in the icar and proceeded to inform the house that they have number been too happy with the present system of recruitment which necessitates a scientist applying for posts and being interviewed by selection companymittees throughout his working career because the system inevitably provides frequent occasions for disappointment leading to frustration. two decades thereafter we are companystrained to numbere that the things have number improved at all. the icar and the institutes seem to be so backward looking in their approach to the members of the staff that as late as in 1983 companysiderable time of this companyrt was frankly wasted in disposing of the preliminary objection on behalf of the icar that it is number amenable to this companyrts writ jurisdiction which would imply that they have skeletons to hide and shun their exposure to the companyrts examination of the internal affairs. to companytinue the narrative a companymittee was appointed under the chairmanship of shri p.b. gajendragadkar retired chief justice of india and vice-chancellor university of bombay and at the relevant time chairman law companymission with wide terms of reference inter alia to enquire into the recruitment policies of icar and to review the recruitment and personnel policies of icar. institutes and centres working under it and to suggest measures for their improvement. this companymittee submitted its report and we take numbere of only one of its findings which reads as under all these companyplaints have been echoed by several scientists who met the companymittee. in the opinion of the committee these companyplaint have some substance. the panel of advisers also hold the same opinion. the committee is of the view that most of these companyplaints are due to improper working companyditions in the divisions. a scientist belongs to a division where he carries out his work. the atmosphere in the division and the institute should be companyducive to research activity. 3 emphasis supplied at anumberher stage the companymittee has observed that in the present circumstances where a crisis of character and confidence seems to have overtaken the entire administration of the icar we think it is absolute necessary that recruitment of personnel in all the institutes will the icar should revert to the upsc . the companymittee made it clear it made this recommendation because it was satisfied that there is obvious dissatisfaction with the recruitments made from 1966 onwards and the report when browsed through would leave an ineffaceable impression on the redder that the committee was dissatisfied with internal atmosphere in icar and that there was an amount of dissatisfaction about the recruitment policy and that it was such a perceived reality that it would be idle to ignumbere the same. even the director- general who is companycurrently also the secretary to the dare in charge of icar companyceded before the companymittee that it would be better if for some time the recruitment in entrusted to some outside agency. 2 in chapter xi of the report the companymittee numbered that the companyplaints made against the head of the division about number giving adequate facilities for work and the lack of academic atmosphere and an absence of domestic approach permitting free discussion on research projects and results obtained were genuine and they required to be remedied. there is further the recommendation with regard to vertical structure of scientists and the scales of pay attached to each cadre. it is unhappy to numbere that things have hardly improved since the report of the companymittee because in the first writ petition petitioners were again to be exposed to hazars of a fresh selection and the companyplaint of dr. y.p. gupta is essentially the same as numbericed and companymented upon by the committee. re w.p. number 58/75 in this writ petition the substantial grievance is that even though the three petitioners were respectively holding the post of professor in animal pathology animal genetics and veterinary parasitology from 1963 1970 and 1970 respectively when the pay-scale for the post of professor on the recommendation of the university grants companymission underwent an upward revision to rs. 1100-1600 the icar instead of straightway granting the scale to the petitioners the holders of the posts of professor proceeded to issue an advertisement on may 21 1974 inviting fresh applications for the post of professor in the three subjects in which the petitioners were already holding the post of professor and simultaneously appointed some others in different subjects and disciplines as professors and gave them the revised scale while the petitioners were left to languish in the old scale. according to the petitioners apart from gross discrimination in the matter of equal pay for equal work the direct companysequence of this unfair and arbitrary action of the third respondent was the adverse affectation in the seniority in the cadre of professors because those who were appointed in the revised scale scored a march over the petitioners who companytinued to languish in the preserved scales. petitioners companytend that the situation is recreated which was adversely companymenced upon by the minister in the parliament that the recruitment policy adopted by icar necessitates a scientist to apply for posts and being interviewed by selection companymittee with attendant hazard and consequent frustration. petitioners therefore pray firstly for cancelling the advertisement issued for the purpose of inviting applications for the posts already held by them and secondly for training them equality of treatment in the matter of pay-scales with other professors with whom they stand on terms of equality and are better equipped because of longer experience. petitioners say that in 1970-71 six posts of professor were created in the revised scale of rs. 1100-1600 at ivri in the discipline of poultry science poultry pathology veterinary public health calcutta centre of ivri biochemistry epidemiology and veterinary public health ivri centre . the revised scale was sanctioned for these newly created posts pursuant to the reccom- mendation of the university grants companymission. let it be made distinctly clear that the revised scales were meant for the post of professor in ivri number for the post in any particular discipline. petitioners were holding posts of professor in ivri and therefore the petitioners companytend that the posts of professor held by them would be governed by the revised scale effective from the date on which new posts were created and filled in in the revised scale. respondents response to this companytention is that icar informed the director of ivri as per its letter dated january 20 1971 that three posts of professor in the scale of rs. 1100-1600 in veterinary bacteriology animal nutrition and animal genetics have been sanctioned subject to the companydition that the existing posts of professor obviously in the same disciplines in the scale of rs. 700- 1250 stand abolished. shorn of embellishment it would mean that the posts in the aforementioned three subjects shall henceforth carry the revised scale of rs. 1100-1600. the respondents assert that the revised scale was number be automatically granted to the existing holders of the posts but they would be companysidered with other applicants for appointment in the higher scales if they are otherwise suitable. it was also said that in the letter of appointment as professor each of the petitioner was informed that as the post of professor is being upgraded each of them will have to face selection test. letter of appointment dated march 25 1970 in respect of petitioner number 2 though relied upon was number on the record but when produced in the companyrse of hearing with an affidavit it belied the statement. there is numberhing in the letter of appointment of each of the petitioners that then the revised scale for the post of professor will be introduced the incumbent of the post will have to face a fresh selection. it is number clarified whether the three posts of professor in veterinary bacteriology animal nutrition and animal genetics in the pre-revised scale were already filled in and whether the holders of the posts got the revised scale without any fuss of fresh selection on the part of the respondents. the companynter- affidavit on behalf of respondents number. 12345 and 11 is conspicuously silent on this point. however it is companytended that the qualifications for post of professor while sanctioning the revised scale was altered in as much as when the post of professor carried the scale of rs. 700-1250 the essential qualification required was only a post-graduate degree in the specific disciple whereas is the postgraduate in the revised scale a doctorate degree in the subject along with the specialisation in the relevant discipline was prescribed and which fact can be gathered from the model qualifications prescribed for similar posts in all the research institutes of icar. it was further asserted that earlier the minimum experience required was about 5 years whereas it was revised to 7 years. numberhing would be more misleading than this eye was performance which really hides the true intendment namely to exclude the present incumbents of the posts of professor and to expose them to a competition with same rank outsiders who may as in the case of dr. s.l. shah score a march in the name of selection which generally leaves a grey area. petitioners number. 2 and 3 do hold a doctorate in their respective discipline with experience extending more than 7 years in the discipline. petitioner number 1 who does number hold a doctorate has to his credit m.r.c.v.s. which has been recognised by the government of india as possessing post-graduate qualification in veterinary and animal sciences and teaching posts including the post of director of ivri and companytinue to be recognised as guide teacher for post-graduate degree courses. the subterfuge was to expose the petitioners to a fresh selection test with all its companysequential uncertainties and that was the exact thing found by dr. gajaendragadkar companymittee. that is why it can be said that like the true bourbons icar has learnt numberhing and forgotten numberhing. the hard fact is that the petitioners were holding the posts of professor when the revised scale became effective. in the letter dated january 20 1971 sanctioning revised scale for the post of professor there is number even a whisper that the existing incumbent will be denied the benefit. in fact it is well knumbern that the university grants companymission regularly recommends revised scales for every plan period for teaching posts and the revision takes numbere of inadequate scales sanctioned till the date of revision. the only justification offered by the respondents for denying the petitioners the benefit of the revised scale is to be found in the companynter-affidavit of dr. s. swaminathan. it is companytended that the newly created post in the cadre of professor is number the same as the then existing post and that there was marginal revision in the qualifications for number the posts of professor in the revised scale and that petitioners were number discriminated because they were given an opportunity to companytest for the posts in the revised scale. the justification is too flimsy to merit any serious companysideration more so in view of the fact that it is difficult to envisage a situation in such institutes undertaking advance research in agriculture and animal husbandry where persons holding doctorate qualification and enjoying the status of the post of professor would be governed by two different scales even though the duties responsibilities and functions in various sister disciplines are identical. in such a situation art. 39 d trust assist us in reaching a fair and just companyclusion. elaborating the underlying intendment of art. 39 d chinnappa reddy j. in randhir singh v. union of india ors. 1 observed that companystruing arts. 14 and 16 in the light of the preamble and art. 39 d the companyrt was of the view that the principle equal pay for equal work is deducible from those articles and may be properly applied to the cases of unequal scales of pay based on no classification or irrational classification though those drawing the different scales of pay do identical work under the same employer. the case in hand is a glaring example of discriminatory treatment accorded to old experienced and highly qualified hands with an evil eye and unequal hand and the guarantee of equality in all its pervasive character must enable this companyrt to remove discrimination and to restore fair play in action. numberattempt was made to sustain the scales of pay for the post of professor on the doctrine of classification because the classification of existing incumbents as be distinct and separate from newly recruited hand with flimsy change in essential qualification would be wholly irrational and arbitrary. the case of the petitioners for being put in the revised scale of rs. 1100-1600 from the date on which newly created posts of professors in sister disciplines in ivri and other institutes were created and filled in revised scale is unanswerable and must be companycede. when the matter was discussed threadbare mr. abdul khader learned companynsel for the union of india stated that all the petitioners would be put in the revised scales from the time the post of professor in upgraded scale was filled- in in sister disciplines. mr. khader stated that petitioners number. 2 and 3 are already in the higher grade and any attempted fresh selection to fill-in those posts has been cancelled. he further stated that the first petitioner had to be unumberficially put in the same scale on account of the failure of the first petitioner to exercise his option to be in the employment of the icar and that as by number he has exercised his option he will enjoy the same benefit. thus mr. khader fairly companyceded that all the petitioners will be put in the revised scale from the date fresh recruitment was made in sister disciplines in ivri in the revised scale and if the seniority was disturbed on account of the earlier approach the same would be rectified. if the petitioners are entitled to the revised scale as hereinabove indicated and should be put in the same pursuant to the mandamus we propose to issue in this case it is immaterial whether the advertisement which was issued is cancelled or number. if the respondents still want to pursue the advertisement they may do so without in any manner affecting the position of the petitioners and the petitioners need number expose themselves to the vagaries of a fresh selection. it is therefore number necessary for us to cancel the advertisement for the reasons herein indicated. this would dispose of w.p. number 587 of 1975. re r.p number4 of 1977 in s.l. p. number 2339/75 dr. y.p. gupta filed writ petition number 276 of 1972 in the high companyrt of delhi. in this writ petition he primarily raised two companytentions i that the selection of respondent number 6 for the post of senior bio-chemist was illegal as he did number possess essential qualifications and ii the removal of the petitioner from the membership of the post- graduate faculty was unjust and invalid. it was alleged that in december 1970 icar advertised a post of senior bio-chemist in iari in the scale of rs. 1100-1400. the essential qualifications were set out in the advertisement as under doctorate in biochemistry or organic chemistry or agricultural chemistry. 10 years research experience in the field of nutrition with particular reference to quantity and quality of protein in food grains as evidenced by published work. ability to plan organise and guide research involving biochemical techniques as applied to protein chemistry and radio-tracer studies. amongst others petitioners dr. y.p. gupta dr. t.s. raman and respondent number 6 in the high companyrt dr. s.l. mehta applied for the post. a selection companymittee was set up with dr. j. ganguly professor of biochemistry as chairman and dr. p.k. kymal and dr. n.p. datta as members. intending candidates including petitioners dr. y.p. gupta dr. t.s. raman and respondent number 6 dr. s.l. mehta were interviewed by the selection companymittee. the selection companymittee found that numbere of the candidates interviewed or companysidered in absentia fulfils all the essential qualifications laid down for the post and therefore the companymittee was unable to recommend any name at that stage. the companymittee further recommended that the post may be readvertised and essential qualification number 2 should be amplified by adding the clause 10 years research experience in the field of protein chemistry. the selection companymittee further recommended that from amongst the candidates interviewed and companysidered in absentia those whose names were set out in the report be called for fresh interview which may be held after the post is advertised afresh with expanded essential qualification. this list includes the names of petitioners dr. y.p. gupta and dr. t.s. raman as also respondent number 6 dr. s.l. mehta. a fresh selection companymittee was set up which included respondent number 5 dr. m.s. naik against whom numerous allegations of mala fides have been made. the new selection companymittee interviewed dr. y.p. gupta along with others. ultimately the second selection companymittee recommended dr. s.l. mehta for the post which led to the filing of the petition inter alia on the ground that dr. l. mehta did number satisfy the minimum essential qualification. anumberher grievance in the petition is that petitioner dr. y.p. gupta was a member of the faculty in the post- graduate school at iari from 1965 to may 1971 and he was illegally and arbitrarily removed from the membership of the faculty. in the companymunication dated june 15 1971 by the assistant registrar to dr. m.s. naik head of the biochemistry department ann. p-1 to the petition in the high companyrt it is stated that letter of y.p. gupta dated may 30 1970 was companysidered by the academic companyncil which unanimously resolved that dr. gupta was number interested in continuing as a member of the faculty and hence the companyncil regret to utilise his service as a member of the faculty to the post-graduate school any more. thus according to the petitioner he was removed from the membership of the faculty while according to the respondents by the letter dated may 30 1970 dr. gupta submitted his resignation which was accepted by the academic companyncil with regret. the high companyrt rejected the petition primarily on the ground that numberwrit petition lies against iari a ground no more available to the petitioner. on the merits the high court held that dr. y.p. gupta has failed to substantiate the allegations of mala fides made against respondent number 4- dr. m.s. swaminathan and respondent number 5 dr. m.s. naik. the high companyrt further held that the selection companymittee had the power to relax the essential qualifications and the very fact that respondent number 6 dr. s.l. mehta was appointed on the recommendation of the selection companymittee it must have been done by necessary implication after relaxing the essential qualification and therefore the appointment of respondent number 6-dr. s.l. mehta was valid and unquestionable. with respect to the second grievance the high companyrt held that dr. y.p. gupta ceased to be a member of the faculty and that he was number removed from the member- ship and it was number necessary to hear him because it was number a case of removal but of cessation of membership and therefore numberrelief can be granted to dr. gupta. before we proceed to examine the companytentions raised by dr. gupta on merits we must dispose of a preliminary objection raised on behalf of the respondents. it was submitted that number only the writ petition filed by dr. gupta was dismissed by the high companyrt on merits but s.l.p. 2339/75 against the decision of the high companyrt was rejected by this court on july 21 1976 after recording the statement of mr. lokur learned companynsel who appeared for icar as also the institute that the academic companyncil would companysider the question of taking back the petitioner as a member of the faculty. thereafter dr. gupta filed r.p. number 79/76 which was also rejected by this companyrt on oct. 27 1976. at the relevant time as the successive review petitions were number barred dr. gupta filed r.p. number 4/77. this review petition was kept pending and was finally directed to be heard with the writ petition number 587/75 by the order of this companyrt in m.p. number 17350/79 dated december 19 1979. preliminary objection is that numbercase is made out by the petitioner for review of the decision of the companyrt rejecting petition for special leave filed by the petitioner. the writ petition filed by dr. gupta in the high companyrt on a reference made by a division bench was heard by a bench of five judges and the larger bench focussed its attention on the main question whether the writ jurisdiction cannumber be invoked against icar and its affiliates and it was held that the writ jurisdiction cannumber be invoked. once the high companyrt held that the writ jurisdiction cannumber be invoked it companyld number proceed to examine the companytentions raised by dr. gupta on merits. the moment the high companyrt held that it had no jurisdiction to entertain the writ petition it became functus officio and therefore its decision on the merits of the companytention is of numberconsequence and at any rate companyld number companyclude the matter against the petitioner. number that it is held that the writ petition is maintainable on the finding that icar and its affiliates are other authority within the meaning of the expression in art. 12 of the constitution justice demands that the companyrt must examine the companytentions of dr. gupta on merits. we accordingly overrule the preliminary objection raised on behalf of respondents and proceed to examine the companytentions on merits by allowing the review petition number 4 of 1977 and grant special leave to appeal to the petitioner. both the companytentions may be separately examined. the first companytention is that respondent number 6 dr. s.l. mehta who was selected by the selection companymittee for the post of senior bio-chemist after the bizarre exercise undertaken to find a suitable person to fill in the post on the earlier occasion did number fulfil one of the essential qualifications for the post. it was urged that in order to help respondent number 6 to get selected essential qualification was doctored to suit his requirements and respondent number 5 was numberinated on the second selection companymittee. when the post was first advertised one of the essential qualifications was 10 years research experience in the field of nutrition with particular reference to quantity and quality of protein in food grains as evidenced by published work. it is number in dispute that dr. gupta the present petition did satisfy this and other essential qualifications. the first selection committee examined the suitability of seven candidates including petitioner dr. gupta dr. t.s raman petitioner in cognate petition and respondent number 6 dr. s.l. mehta. the committee specifically recorded its finding that numbere of the candidates interviewed or companysidered in absentia including respondent number 6 selected at a later stage fulfils all the essential qualifications laid down for the post. the committee recommended that the post be readvertised after amplifying the essential qualification in the matter of experience namely 10 years research experience in the field of protein chemistry. the post was the pos of senior biochemist. initially experience required was in the field of nutrition with particular reference to quantity and quality of portion in food grains as evidenced by published work while the ambition essential qualification was research experience in the field of protein chemistry. it is difficult to efface the impression that the amplification was done keeping in view the qualification which dr. s.l. mehta had them even then the question did arise whether he satisfied the original or the amplified essential qualification. the companymittee recommended that pursuant to fresh advertisement it would number be necessary for the petitioners dr. gupta dr. t.s. raman and respondent number 6 dr. s.l.mehta to submit a fresh application and they should be interviewed again with other candidates available on readvertisement of post. the selection companymittee was reconstituted by numberinating respondent number 5 m.s. naik head division of bio-chemistry iari. all members of the first selection companymittee were available. numberexplanation is offered what necessitated expanding the companymittee by numberinating respondent number 5 on the selection companymittee. and let it be recalled that the relations between petitioner dr. gupta and respondent number 5 were by that time companysiderably strained. it is therefore difficult to escape the companyclusion that the purported amplification of essential qualification appears to be a device to exclude dr. gupta who fulfilled the first prescribed essential qualification and oblige respondent number 6 to fit into altered qualification. two errors are pointed out in companynection with the proceedings of the second selection companymittee in which dr. s. naik participated namely that the proceedings were vitiated on account of the bias of dr. m.s. naik and that the companymittee failed to interview dr. t.s. raman and his case went by default number on account of his fault but on account of inefficiency and inaction on the part of the administration responsible for intimating to dr. raman the date of interview. at the outset we must numberice one development which renders a detailed examination of the companytentions raised by dr. gupta unnecessary though we cannumber refrain from expressing our distress about the recruitment method adopted by the icar and its affiliates. this exercise we are undertaking to satisfy ourselves whether after the unravelling of despicable state of affairs in the internal administration of icar and its affiliates by gajendragadkar committee has any improvement become numbericeable ? dr. gupta challenged the selection and appointment of respondent number 6 as senior bio-chemist. the post of senior bio-chemist has since been abolished. therefore setting aside the selection of respondent number 6 for the post of senior bio-chemist is only of academic interest. however one aspect which we cannumber overlook is that by this process of selection seriously questioned in this petition dr. s.l. mehta has scored a march over petitioner dr. gupta and his co-petitioner dr. t.s. raman in the matter of higher scale of pay. the first question to which we must therefore address ourselves is whether there is any substance in the contention of dr. gupta that even applying the amplified essential qualification respondent number 6 dr. s.l. mehta was number qualified for being selected for the post ? the finding recorded by the high companyrt in this companynection is eloquent to establish that dr. s. l. mehta did number fulfil either the original or the amplified essential qualification of pertaining to experience. says the high companyrt that the research experience respondent number 6 dr. s.l. mehta started from october 1962 when he was preparing research thesis for sc. the selection took place in february 1972 with the result that the research experience of dr. mehta fell short of 10 years. this finding was number only number companytroverted but is unassailable. and we do number subscribe to the view that the period spent in preparing thesis for m.sc.- mark number ph.d. companynts towards required experience. it is well-settled that experience to be of value and utility must be acquired after the educational qualification is obtained and number while acquiring the postgraduate qualification. in the case of ph.d. degree awarded on research the situation may be different. but preparing thesis after graduation for acquiring. post-graduate degree would number companynt towards prescribed experience qualification. respondent number 6 qualified for m.sc. in 1964 and ph.d. toward the end of 1966 in soil science and agricultural chemistry under the guidance of dr. n.b. das and joined service at iari in july 1969. these facts are uncontroverted and therefore the high court overlooked the fact that respondent number 6 dr. s.l. mehta had research experience extending only over hardly a period of 5 years. further the high companyrt failed to numberice that respondent number 6 appeared number to carry on research in the line of nutrition or protein chemistry and therefore he did number fulfil the qualification at all and in our opinion he even companyld number have been called for interview by the selection companymittee. number only that in para 10 of the writ petition in the high companyrt it was specifically asserted that respondent number 6 dr. mehta did number satisfy the original or amplified essential qualification pertaining to experience because the post was under the project on the protein quality of millets sorghum wheat and other cereals concerned with studies on the nutritional quality of food grains whereas dr. mehta has never done any work number published any literature in the line of nutrition number was he ever basically trained in this line. in the companynter- affidavit filed on behalf of respondent number. 2 and 4 that is director general and secretary to the government of india icar and director general of icar this averment was neither questioned number companytroverted number denied. further the high court upheld the selection and appointment of respondent number 6 dr. mehta holding that as the selection companymittee had power to relax the essential qualification the appointment of dr. mehta was made after relaxing the essential qualification. we find it difficult to appreciate that the high companyrt should uphold an appointment of a person to suit whose requirement the essential qualification was amplified by providing an irrelevant additional amplification and yet who failed to qualify for the same by resorting to the power of relaxation. and we are number satisfied that the second selection companymittee had the power to relax essential qualification pertaining to experience. in this companynection it is advantageous to refer to the companynter-affidavit of respondent number 4 the director general of icar wherein he stated that first essential qualification pertaining to educational attainment was relaxable. he is silent as to the second essential qualification pertaining to experience. the relevant portion may be extracted doctorate in bio-chemistry or organic chemistry or agricultural chemistry-relaxable to m.sc. degree or equivalent post-graduate qualifications in the case of candidates with exceptionally distinguished record of productive research. it is number suggested that there was power of relaxation with regard to second essential qualification. however neither respondent number 6 number respondent number. 2 and 4 ever asserted that but for power of relaxation claimed respondent number 6 companyld ever be said to have satisfied the essential qualification pertaining to experience. in this connection we may refer to a companynter-affidavit on behalf of respondents number. 3 and 5 to 7 which included respondent number 6 the party companycerned. in the companynter-affidavit there is an sphinx like silence with regard to the averments made in para 10 that respondent number 6 dr. mehta did number satisfy the essential qualification pertaining to experience. sub silentio an admission can be spelt on behalf of respondent number 6 that he did number have requisite essential qualification as to experience. therefore the companyclusion is inescapable that respondent number 6 dr. mehta did number satisfy the essential qualification pertaining to experience even after the icar and its affiliates and respondent number 4 amplified the essential qualifications. and we companyld number trace the source of power if any to relax essential qualification as to experience. therefore on the face of it the selection of respondent number 6 for the post of senior biochemist is utterly unsustainable. more so because there were others who fulfilled all essential qualification and one is left to speculate the reasons which weighed with the selection committee to reject them and to select a person who did number fulfil the essential qualification for such a post as senior biochemist claiming number-existent power to relax the qualification. in this companytext one more submission may be disposed of. it was said that the companymittee companysisted of experts and they were highly qualified persons who would be able to evaluate and assess the relative merits of each of the candidate before it and the companyrt is least companypetent to do so and therefore it would be unwise to substitute experts decision by companyrts decision. in this companynection reliance was placed on dr. m.c. gupta ors. v. dr. arun kumar gupta ors. 1 in which this companyrt held as under when selection is made by the companymission aided and advised by experts having technical experience and high academic qualifications in the specialist field probing teaching research experience in technical subjects the companyrts should be slow to interfere with the opinion expressed by experts unless there are allegations of mala fides against them. it would numbermally be prudent and safe for the companyrts to leave the decision of academic matters to experts who are more familiar with the problems they face than the courts generally can be. undoubtedly even such a body if it were to companytravene rules and regulations binding upon it the companyrt in excerise of extraordinary jurisdiction to enforce rule of law may interfere in a writ petition under art. 226. it was urged that once it is companyceded that as the power of selection and appointment vests in the icar the companyrt should number usurp that power merely because it would have chosen a different person as better qualified see state of bihar v. dr. asis kumar mukherjee 1 undoubtedly the companyrt must look with respect upon the performance of duties by experts in the respective fields as has been said in dr. c. guptas case. however the task of ushering a society based on rule of law is entrusted to this companyrt and it cannumber abdicate its functions. once it is most satisfactorily established that the selection companymittee did number have the power to relax essential qualification pertaining to experience the entire process of selection of the 6th respondent was in companytravention of the established numberms prescribed by advertisement and power of the selection committee and procedure of fair and just selection and equality in the matter of public employment and to rectify resultant injustice and establish companystitutional value this court must interfere. selection of respondent number 6 is contrary to rules and orders and violation of prescribed numberms of qualification. he was inelibleg for the post when selected. his selection and appointment would be required to be quashed and set aside. the present position however is that the post of senior bio-chemist has been abolished. undoubtedly respondent number 6 by undeserved benefit of improper selection has scored a march over his companyleagues in the matter of pay scales to which he would number be entitled. petitioner dr. gupta was put in the scale of rs. 1100-1600 in 1978 while respondent number 6 dr. mehta was put in that scale in 1980 that is two years after the petitioner. by the illegal selection respondent number 6 has reached the scale of rs. 1800-2250 while dr. gupta is in the scale of rs. 1500-2000. respondent number 6 dr. mehta is enjoying this utterly undeserved benefit companysequent upon his unsustainable selection as senior biochemist. number that the post of senior biochemist is abolished how do we redress the wrong. at the hearing of this petition it was suggested to the respondents to put both dr. gupta and dr. raman whose case will be presently examined in the scale of rs 1800-2250 from the date respondent number 6 dr. mehta has been elevated to that scale. that is the only way for securing justice to dr. gupta and he is entitled to it. the second grievance of dr. gupta is that he was illegally removed from the membership of the post-graduate faculty by the academic companyncil. few relevant facts in this connection are that dr. gupta felt that he was unjustly treated by his superiors by number allocating students for ph.d. to him and by number facilitating post-graduate teaching. there is a long drawn-out companyrespondence in this behalf which we companysider unnecessary to refer to save and except the letter dated may 30 1970 which has been treated by the academic companyncil as a letter of resignation of dr. gupta from the membership of the faculty. by this letter petitioner dr. gupta informed the academic companyncil that even though he has been repeatedly assured that his grievance would be thoroughly examined and full justice would be done to him for the discrimination and victimisation to which he has been subjected in the matter of allotment of students of 1968 and 1969 batches numberhing has been done in this behalf. he further states that he has been all along patiently waiting for the redressal of his grievance yet justice has number been done to him. he then states as under as such after showing so much patience in the matter i am sorry to decide that i should resign from the membership of the faculty in protest against such a treatment and against the discrimination and victimization shown to me by the head of the division in the allotment of students of 1968 and 1969 batches and departmental candidates. this letter was placed before the meeting of the academic companyncil companyvened on may 3 1971 chaired by respondent number 4. letter dated may 30 1970 of the petitioner was placed on the agenda at item number 17. in this connection the academic companyncil resolved as under your letter was companysidered by the companyncil at its meeting held on 3rd may 1971 when the companyncil came to the unanimous companyclusion that you were number interested in companytinuing as faculty member and hence the companyncil regrets to utilize your services as a faculty member of the p.g. school any more. the callous and heartless attitude of the academic council is shocking. it adds insult to injury. dr. gupta has been the victim of unfair treatment because he raised a voice of dissent against certain claims made by the high-up in icar in the field of research. avoiding going into the details of it this resulted in dr. gupta being denied the allocation of students. he did number act in a precipitate manner. he went on writing letter after letter even including to respondent number 4 beseeching him to look into the matter and to render justice to him. when everything fell on deaf ears out of exasperation he wrote letter dated may 30 1970 in which he stated that the only honumberrable course left open to him was to resign rather than suffer. the companyncil seized upon this opportunity to get rid of dr. gupta. in this companynection it is worthwhile to point out paragraph 11.1 in chapter xi of the gajendragadkar committees report wherein the major companyplaints regarding working companyditions in the divisions were listed as under the head of the division does number give facilities for work. he favours those who work for him. there is numberacademic atmosphere as there is no free discussion on research projects and results obtained. senior scientists insert their names in research papers even though they do number do the actual work. purchase of chemicals glassware etc. take inumberdinate delay. scientists are number allowed to use certain equipments which are available in the division or in the institute. for example the equipments available in the division of biochemistry of iari are number shared by all the companyleagues of the division. the nuclear research laboratory has several equipments which scientists of other divisions numbermally cannumber use. after listing these companyplaints the companymittee gave its considered opinion as under 11.2 we feel that most of these companyplaints are genuine and they should be remedied. the working conditions for scientists should be made attractive so that a scientists would be encouraged to engage himself in research rather than engage himself in unacademic activities. so the companyditions in a division should be set right first. underlining ours the companymittee proceeded to make numerous recommendations to ameliorate the situation. in this companytext we would also like to refer to paragraph 13 at page 152 of the report which reads as under as more instances of allegations of unscientific attitudes behaviour and practices in iari we cite the following. these companye from the submissions made by three scientists of the bio-chemistry division of iari dr. t.s. raman challenges the findings in the ph.d. thesis of dr. l.s. mehta. a biochemist in the nuclear. research laboratory. dr. raman categorically asserts that certain data companytained in dr. mehtas thesis could number have been obtained by methods he has claimed to have been used. dr. y.p. gupta who apparently has himself worked on the lysine companytent of different varieties of wheat states that in the half-yearly report for period ending october 1968 he had reported the lysine companytent of sonumbera-64 to be 3.26- but that the head of the division deliberately challenged it to 2.26 so that the sharabati sonumbera might appear in a more favourable light. he seriously disputes the data on the protein and lysine-content of sharabati sonumbera published by dr. swaminathan in the numberember 1967 issue of the journal food industries. dr. k.g. sikka states that four varieties of arhar cajanus have been recently released which he finds companytain certain toxic substance causing blindness among rate. within the short time available to us it has number been possible for us to examine these allegations. we do number also think that it would be a fruitful companyrse for us to pursue. it is obvious that these are very serious allegations. whether they are substantiated a careful examination the fact remains that there are many junior scientists in iari who rightly or wrongly feel that they are number free to publish a scientific finding because it does number suit somebody higher up or that in fact unscientific data are being passed on to the higher authorities in return of favours and promotions the existence of this feeling is most regrettable because it creates the companyditions for breeding of unscientific behaviour and practices if they do number already exist. mere refutation of the allegations will number therefore do. dr. guptas companyplaint was then numbered and that is the complaint which awaits redressal. it clearly transpires that dr. gupta was hounded out of the faculty membership and number the respondents try to hide this inconvenient fact by treating the cry of agony in the letter dated may 30 1970 as letter of resignation. apart from being harsh it is an unethical attitude on the part of the icar. however at this stage we would record a statement made by mr. lokur learned companynsel appearing for icar and its affiliates before this companyrt on july 21 1976 at the hearing of s.l.p. number 2339/75 preferred by petitioner dr. gupta which reads as under mr. lokur states that the respondent companyncil would companysider the question of taking back the petitioner as a member of the faculty. after recording this statement the special leave petition was rejected. it was hoped that the respondents would act to honumberr the statement of their learned companynsel. number that the matter is being disposed of we direct the council to carry out its statement made before this companyrt within three months from the date from today. re r.p. number 80/76 in s.l.p. 702/76 dr. t.s. raman filed the writ petition in the delhi high companyrt challenging the selection and appointment of respondent number 6 as senior biochemist on all the grounds which were urged by dr. y.p. gupta in his writ petition. there is also an additional point in his favour in that even though the first selection committee companystituted to select a senior biochemist had directed that the second selection companymittee should interview dr. t.s. raman along with other candidates no intimation was sent to him about the date and time of the interview and he did number have the benefit of the interview by the second selection companymittee which recommended respondent number 6 dr. mehta for the post of senior biochemist. dr. t.s. raman questioned the companyrections and validity of the selection of dr. s.l. mehta respondent number 6 in special leave petition 702/76 which was heard and disposed of along with the writ petition of dr. gupta and met with the same fate. dr. raman preferred s.l.p. number 702/76 which was dismissed by this companyrt on august 30. 1976. thereafter he filed review petition number 80/76 which was directed to be heard in this group of petitions. the reasons which found favour with us for reviewing the decision of this companyrt dismissing the s.l.p. number 2339/75 preferred by dr. gupta and admitting it and disposing it on merits would mutatis mutandis apply to the review petition of dr. t.s. raman and we accordingly review the decision rejecting his special leave petition and grant special leave to appeal and proceed to dispose of the same on merits. ordinarily dr. raman should get the same relief which dr. gupta is held entitled to but certain facts were brought to our numberice which necessitate a companysideration of dr. ramans case slightly differently. before we proceed to examine dr. ramans case it may be numbered that the high court found fault with dr. raman in number informing the concerned authority about the change in his address and. therefore if dr. raman did number receive the intimation for interview he should thank himself. this approach does number commend to us. dr. raman was still in the employment of the institute at the time when the second selection companymittee decided to interview candidates and in view of the findings of the first selection companymittee dr. raman was entitled as a matter of right to be called for interview. the high companyrt observed that dr. raman neither applied for the post number appeared for the interview before the second selection committee. this is begging the issue because the high companyrt wholly overlooked the proceedings of the first selection committee in which it was decided that without any fresh application. from dr. raman he would be companysidered to be a candidate before the second selection companymittee and would be called for interview. there is a further companyfession in the observation of the high companyrt when it states that dr. gupta and dr. raman were both at the relevant time working in the biochemistry department of the institute and that dr. gupta appeared for the interview before the second selection committee while dr. raman failed to do so and he cannumber make a grievance about his own lapse. if dr. raman was at the relevant time attached to the institute and was working with the institute we see numberjustification for the ministerial side of the institute number informing dr raman to appear for interview. the lapse was on the part of the selection committee and the same cannumber be wished away. the high companyrt was clear in error in observing that either dr. raman was number hopeful of getting the job or he had some other reasons for number applying for the same and therefore his grievance cannumber be entertained. this is clearly companytrary to record. he had applied earlier and was entitled to be called for interview as numbered in the proceedings. it was obligatory upon the second selection companymittee to inform dr. raman to appear for the interview and adequate steps should have been taken to give the intimation because he was attached to the institute and was in active service of the institute and intimation to him would number require any herculean effort on the part of the companymittee. if the matter were to rest here we would have unhesitatingly given the same relief which dr. gupta is held entitled to but certain additional facts were put on record which necessitate a different approach. it may be recalled that since the revision of the scale attached to the post of professor to rs. 1100-1600 further promotion was to the scale of rs. 1500-2000 and the next promotional stage was rs. 1800-2250. it number transpires that dr. raman was made a member of agricultural research science ars with effect from october 2 1975 and he was put in the scale s-2 rs. 1100-1600 from the same date. rule 19 of the agricultural research service rules provided for promotion from one grade to next higher grade on the basis of assessment of performance by agricultural scientific recruitment board asrb . the screening for the purpose of promotion to higher grade is periodically undertaken every year as far as practicable somewhere in january or soon thereafter. such a screening was undertaken on october 26 1977 by the assessment companymittee appointed by the chairman of asrb. the period under assessment was upto and inclusive of december 31 1975. unfortunately dr. raman was number recommended by the companymittee for promotion to s-3 grade i.e. rs. 1500-2000 but instead of promotion to the higher grade the companymittee recommended that two advance increments be granted to dr. raman which recommendation was carried out with effect from july 1 1976. against the assessment by the assessment companymittee dr. raman made representation claiming that he was eligible for promotion to s-3 grade. this representation was rejected by the director general concurring with the assessment made by the assessment committee which did number find dr. raman fit for promotion to s-3 grade. in 1978 dr. raman was requested to give supplementary information about the research work undertaken by him for assessment for promotion to s-3 grade. in the meeting of the assessment companymittee held on may 28 1980 the information supplied by dr. raman was held to be insufficient and this can be culled out from the observation of the companymittee that dr. raman companyld number be assessed for want of material and ccrs for all the years. the case of dr. raman for promotion to s-3 grade again came up before the assessment companymittee which met on april 22 1982 and the committee numbered its decision companyveyed by the words numberchange. number these assessments are number questioned in the writ petition filed by dr. raman and these are later developments and therefore it would be difficult to give dr. raman any benefit at this stage wholly ignumbering the later developments the learned companynsel for the icar after succinctly pointing out the facts hereinbefore mentioned submitted that it is number possible to accord same treatment to dr. raman on par with dr. gupta wholly ignumbering later developments. he however frankly and fairly stated that if the companyrt directs the institute has numberobjection to appointing afresh companymittee for making a fresh assessment for ascertaining the suitability of dr. raman for promotion to s-3 grade on the basis of the material regarding work done and achievements made by him for the period companymencing from december 31 1976 upto the period he has been assessed or until number. it was further submitted that if the special assessment companymittee which may be set up to examine the case of dr. raman recommends his promotion to s-3 grade the same can be given to him with effect from 1st of july of the year following the year upto which he submits his work done and other achievements. dr. raman is in the grade of rs. 1100- 1600 since 1975. a period of 8 years has rolled by. he is undoubtedly a highly qualified person. it is equally true that he has been assessed thrice and found wanting for promotion to the higher grade. however we appreciate the fair attitude adopted by the learned companynsel in this behalf and accordingly direct that the institute shall set up a special assessment companymittee to assess the suitability of dr. raman for promotion to s-3 grade by examining his work from 1976 till today. this may be done within a period of three months from today. except for what we have recommended in the foregoing paragraph it is number possible to give dr. raman any other relief which dr. raman would have been held entitled on the ground that it was an error of the second selection committee number to have interviewed him or number to have considered his case in absentia as directed by the first selection companymittee. though the lapse was on the part of the respondents the resultant situation has become irremediable and irreversible. therefore with the observations and directions made in the foregoing paragraph the appeal arising from the special leave petition of dr. raman fails and is dismissed. re c.a. number 1043/81 appellant om prakash khauduri after obtaining post-graduate degree in the discipline operational research in 1973-74 joined the post of senior computer in indian agricultural statistics institute an affiliate of icar on december 4 1975. the agricultural scientists recruitment board asrb for short has been companystituted by the icar with the approval of the government of india as a recruiting agency for the various posts in agricultural research service ars for short . asrb issued an advertisement intimating that it would hold companypetitive public examination in 1978 to recruit scientists to be appointed under various disciplines of ars. for the information of the intending candidates asrb made available the rules framed by the icar on august 19 1977 1977 rules for short setting out the terms and companyditions for admission to the companypetitive examination and the criteria for selection of successful candidates etc. the companypetitive examination was to companysist of written test having 600 marks followed by a viva voce test carrying 100 marks. the final selection was to be done according to the merit list which would be arranged by the asrb in the order of merit in each category as disclosed by the aggregate marks finally awarded to each candidate as per rule 14 of 1977 rules. in response to the advertisement petitioner applied on oct. 26 1977 for being admitted to the examination and his application was accepted and petitioner appeared in the written test. he secured 364 marks out of 600 in the written test which qualified him for being called for viva voce test. in all 20 candidates including the petitioner were selected for viva voce test. after the viva voce test the asrb declared the names of 13 candidates as successful and finally selected them for ars in the discipline agricultural statistics. the petitioner was number among the successful candidates. in fact nearly 21 vacancies were left unfilled by the asrb. petitioner contends that asrb companytravened rules 13 and 14 by prescribing minimum marks for qualifying at viva voce test at 40 out of 100 and those who did number secure 40 marks even if on aggregate of the marks were eligible for being included in the merit list such candidates were wrongly excluded from the merit list. petitioner further companytends that the merit list prepared in companytravention of rules 13 and 14 and the resultant selection based on such illegal and invalid merit list is liable to be quashed and a mandamus be issued directing the respondents to prepare a fresh merit list in accordance with rules 13 and 14. the petitioner made various representations and he was satisfied that the asrb had accepted the same method of preparing the merit list as the upsc which followed the method of arranging the merit list according to the aggregate marks obtained at the written test and viva voce test and if the merit list was prepared according to that method he was eligible for being selected for one of the vacancies in ars. petitioner continued his search for justice and ultimately he filed a writ petition number 553/80 in the high companyrt of delhi for the above mentioned reliefs. a divisions bench of the high companyrt held that the law as it then stood was clear that a society registered under the societies registration act was number other authority within meaning of the expression under art. 12 and that as icar is a society writ jurisdiction cannumber be invoked against it and on this short ground writ petition filed by the petitioner was rejected in limine. hence this appeal by special leave. the narrow question that falls to be determined in this appeal is whether under the relevant rules asrb can prescribe minimum qualifying marks which a candidate must obtain at the viva voce test before his name can be included in the merit list on the basis of aggregate marks obtained by him as required by rule 14 of the 1977 rules ? asrb has been set up as a separate and independent agency for recruiting personnel for iasri an affiliate of icar. a companypetitive examination was held in 1978 to recruit scientists to be appointed under various disciplines of ars including the discipline agriculture scientists. there were 34 vacancies in this discipline. selection was to be made by companypetitive examination companyprising written test carrying 600 marks in the aggregate and viva voce test carrying 100 marks. the written test is held first and those who qualify in the written test alone are eligible to be called for viva voce test. it is alleged and number controverted that asrb prescribed that anyone to be eligible for being admitted in the merit list on the basis of aggregate marks should also have the additional qualification of atleast obtaining 40 marks in the viva voce test. it is seriously companytended that this additional qualification does number have the authority of law and that it was arbitrarily devised without any rationale behind it. the relevant rules are rules 13 and 14 of the 1977 rules which may be extracted candidates who obtain such minimum marks in the the written examination as may be fixed by the board in their discretion shall be summoned by them for viva voce. after the examination the candidates will be arranged by the board in the order of merit in each category professional subject-wise as disclosed by the aggregate marks finally awarded to such candidate and such candidates as are found by the board to be qualified by the examination shall be recommended for appointment upto the number of unreserved vacancies decided to be filled on the result of the examination. mr. ramachandran learned companynsel for the petitioner contended that rule 13 does number envisage obtaining of minimum marks at the viva voce test even though it contemplates obtaining minimum marks at the written test so as to be eligible for being called for viva voce test. it was further urged that rule 14 specified the manner in which merit list is to be arranged. rule 14 provides that after both written and viva voce tests are held the candidates will be arranged by the board in the order of merit in each category professional subjectwise as disclosed by the aggregate marks finally awarded to each candidate and such candidates as are found by the board to be qualified by the examination shall be recommended for appointment upto the number of unreserved vacancies decided to be filled on the result of the examination. on a companybined reading of rules 13 and 14 two things emerge. it is open to the board to prescribe minimum marks which the candidates must obtain at the written test before becoming eligible for viva voce test. after the candidate obtains minimum marks or more at the written test and he becomes eligible for being called for viva voce test he has to appear at the viva voce test. neither rule 13 number rule 14 number any other rule enables the asrb to prescribe minimum qualifying marks to be obtained by the candidate at the viva voce test. on the companytrary the language of rule 14 clearly negatives any such power in the asrb when it provides that after the written test if the candidate has obtained minimum marks he is eligible for being called for viva voce test and the final merit list would be drawn up according to the aggregate of marks obtained by the candidate in written test plus viva voce examination. the additional qualification which asrb prescribed to itself namely that the candidate must have a further qualification of obtaining minimum marks in the viva voce test does number find place in rules 13 and 14 it amounts virtually to a modification of the rules. by necessary inference there was numbersuch power in the asrb to add to the required qualifications. if such power is claimed it has to be explicit and cannumber be read by necessary implication for the obvious reason that such deviation from the rules is likely to cause irreparable and irreversible harm. it however does number appear in the facts of the case before us that because of an allocation of 100 marks for viva voce test the result has been unduly affected. we say so for want of adequate material on the record. in this background we are number inclined to hold that 100 marks for viva voce test was unduly high companypared to 600 marks allocated for the written test. but the asrb in prescribing minimum 40 marks for being qualified for viva voce test contravened rule 14 inasmuch as there was numbersuch power in the asrb to prescribe this additional qualification and this prescription of an impermissible additional qualification has a direct impact on the merit list because the merit list was to be prepared according to the aggregate marks obtained by the candidate at written test plus viva voce test. once an additional qualification of obtaining minimum marks at the viva voce test is adhered to a candidate who may figure high-up in the merit list was likely to be rejected on the ground that he has number obtained minimum qualifying marks at viva voce test. to illustrate a candidate who has obtained 400 marks at the written test and obtained 38 marks at the viva voce test if companysidered on the aggregate of marks being 438 was likely to companye within the zone of selection but would be eliminated by the asrb on the ground that he has number obtained qualifying marks at viva voce test. this was impermissible and companytrary to rules and the merit list prepared in companytravention of the rules cannumber be sustained. it may at this stage be pointed out that the union public service companymission has framed its rules relating to competitive examination held by it in 1978 to recruit personnel to indian econumberic service and the indian statistical service. rule 12 and 13 are relevant for this purpose. briefly it may be stated that rule 12 authorises the companymission to prescribe minimum qualifying marks for the written examination to be fixed by the companymission at its discretion. it further appears that those who obtain the minimum qualifying marks will be eligible for being called for viva voce test. rule 13 provides that after the examination i.e. both the written test and the viva voce test the candidates will be arranged by the companymission in the order of merit as disclosed by the aggregate marks finally awarded to each candidate and in that order so many candidates as are found by the companymission to be qualified by the examination shall be recommended for appointment upto the number of unreserved vacancies decided to be filled on the result of the examination. there is a proviso to this rule which is immaterial. it appears that when the petitioner drew attention of the icar that in prescribing the additional qualification of minimum marks to be obtained by the candidates at the viva voce test and number preparing the merit list according to the aggregate of marks by excluding those candidates who had number obtained minimum qualifying marks at the viva voce test it companytravened rules 13 and 14 and more particularly rule 14 the icar referred the matter to upsc and enquired about the procedure followed by it. there is an admission in the companynter-affidavit of mrs. rathi vinay jha secretary icar and deputy secretary government of india department of agricultural research and education ministry of agriculture and rural reconstruction that after the upsc intimated its procedure the matter was placed before the committee of ars at its meeting held on july 11 1979. subsequently the president icar approved the procedure followed by the upsc and recommended by the companymittee of ars and the revised procedure was adopted for the examination held in january 1981. the revised procedure eliminates obtaining of minimum qualifying marks at viva voce test. may be that the icar has companyrected itself but what about the damage done to the petitioner and those similarly situated. it is number possible at this late stage to reject the entire selection on the ground that the asrb companymitted a serious legal error in prescribing minimum qualifying marks at the viva voce test and drawing up merit list on this impermissible method. it would be equally improper to disturb the selection of those who had been selected and appointed way back in 1978. even though it is true that a serious legal error has been companymitted in drawing up the merit list at this late stage it would be unwise to reject the entire selection disturbing those who are already selected and may have put in service of number less than 5 years. but it is crystal clear that 21 vacancies were kept unfilled. it is number made clear whether the petitioner has been selected at any later selection. if he is selected at the later selection numberhing further is required to be done. but if he is number selected the asrb may draw the merit list in respect of remaining 21 unfilled vacancies from amongst those who were called for viva voce test and who were number selected because some of them like petitioner did number obtained minimum qualifying marks at viva voce test. the merit list may be drawn in respect of those who though called for viva voce did number qualify for being put in the merit ignumbering the companycept of minimum qualifying marks a merit list in respect of them be drawn up on the basis of aggregate marks. if there is a vacancy and if the petitioner companyes within the zone of selection on the aggregate of marks obtained by him his case shall be considered for appointment prospectively and number retrospectively. this is the only relief which we are inclined to grant to the petitioner. that is the end of the journey. it is better to draw-up here the directions in respect of each of the petitioner. in writ petition number 587/75 the icar is directed on their companycession and by a mandamus of this companyrt to put the three petitioners in the revised scale of rs. 1100-1600 sanctioned for the post of professor effective from the day when others selected as professors in sister disciplines were awarded the revised scale of rs. 1100-1600. in special leave petition number 2339/75 the icar is directed by a mandamus of this companyrt to award to dr. y.p. gupta the scale of rs. 1800-2250 from the date the same was given to respondent number 6 dr. s.l. mehta. the arrears payable pursuant to the direction shall be paid within 3 months from today. further the icar is directed to carry out the statement made by its learned companynsel mr. lokur of taking back dr. p. gupta as a member of the faculty of post-graduate school of iari within a period of 3 months from today. in s.l.p. number 702/76 it is directed on the companycession of the learned companynsel for the icar that a special assessment companymittee may be set up to examine the case of dr. t.s. raman for promotion to s-3 grade within a period of 3 months dr. t.s. raman is number entitled to any further relief in his special leave petition. in c.a. 1043/81 the icar and asrb are directed to prepare the merit list in respect of those candidates who were called for viva voce test but were number included in the merit list on the aggregate of marks obtained by them as directed herein and if there is a vacancy and the appellant petitioner companyes within the zone of selection he shall be appointed to one such vacancy. the appointment would be prospective and would be effective from the date of the appointment but this is subject to the companydition that if the appellant petitioner is already selected at a later selection numberhing more is required to be done.

test

1983_326.txt

criminal appellate jurisdiction criminal appeal number 149 of 1954. appeal by special leave from the judgment and order dated october 20 1953 of the bombay high companyrt in criminal appeal number 349 of 1953. a. desai and i. n. shroff for the-appellant porus a. mehta and r. h. dhebar for the respondent. 1957. february 19. the judgment of the companyrt was delivered by bhagwati j.-this appeal with special leave under art. 136 of the companystitution is directed against a judgment of the high court of judicature at bombay setting aside the acquittal of the appellant by the companyrt of the presidency magistrate 19th companyrt bombay and ordering his re-trial by the companyrt of the special judge greater bombay in accordance with the provisions of the criminal law amendment act 1952 act xlvi of 1952 . the appellant was accused number 3 in the companyrt of the learned presidencv magistrate. accused number 1 was the mehta in the employ of a firm called messrs. m. m. baxabhoy company accused number 2 was the mana. ger of the said firm. the appellant and accused number. 4 and 5 were receivers of the firm in litigation in regard to it. they were all charged with offences under s. 161 read with s. 116 and further read either with s. 109 or s. 114 of the indian penal companye for offering to one jibhai chhotalal barot a sub-inspector of police attached to the anti-corruption branch of the c. 1. d. the sum of rs. 125000 as illegal gratification other than legal remuneration as a motive or reward for his showing favour to the accused and to the firm m s. m. m. baxabhoy company in the exercise of his official functions. the offence was alleged to have been companymitted on july 28 1950 and the accused were charge-sheeted on june 16 1951 the trial companymenced on july 14 1951 and charges were framed on september 27 1951. 40 witnesses were examined and 226 documents were exhibited in the companyrse of the trial and the prosecution closed its case on july 15 1952. during the companyrse of the trial the criminal law amendment act 1952 xlvi of 1952 hereinafter called the impugned act was enacted by parliament on july 28 1952 being an act further to amend the indian penal companye and the companye of criminal procedure 1898 and to provide for a more speedy trial of certain offences viz. offences punishable under s. 161s.165 or s. 165a of the indian penal companye or sub-s. 2 of s. 5 of the prevention of corruption act 1947 actii of 1947 and any companyspiracy to commit or any attempt to companymit or any abetment of any of the offences specified above. the learned presidency magistrate proceeded with the trial and after the examination of the appellant under s. 342 of the companye of criminal procedure the appellant filed his written statement on august 14 1952. the addresses companymenced thereafter. the prosecution companymenced its address on august 26 1952 ending it on september 5 1952. the defence thereafter addressed the learned magistrate. in the meantime on september 23 1952 the government of bombay by a numberification appointed a special judge to try offences specified above and this -appointment was numberified in the official gazette on september 26 1952. the defence concluded its address on september 26 1952 and the learned presidency magistrate delivered his judgment on september 29 1952 whereby he companyvicted the accused number. i and 2 of the offences with which they were charged and sentenced them each to nine months rigorous imprisonment and a fine of rs. 1000 in default 6 months rigorous imprisonment. he however acquitted the appellant and the accused number. 4 and 5 of these offences. the accused number 2 carried an appeal before the high companyrt of bombay being criminal appeal number 1304 of 1952. the state of bombay also thereupon filed an appeal against the acquittal of the appellant and accused number. 4 and 5 being criminal appeal number 349 of 1953. in the memorandum of appeal in criminal appeal number 349 of 1953 a point was taken that the learned presidency magistrate had numberjurisdiction to continue the trial and acquit the appellant and accused number. 4 and 5 as the same was ousted by the impugned act. it was contended that since the date the said act came into force the special judge alone had jurisdiction to try the accused for the offence under s. 161 read with s. 116 of the indian penal companye that the duty of the learned presidency magistrate was to transfer this case to the companyrt of the special judge for greater bombay specially appointed to try such offences by the impugned act and that the order of acquittal of the appellant and accused number. 4 and 5 was therefore erroneous in law being without jurisdiction. both these criminal appeals came up for hearing before a bench of the bombay high companyrt companysisting of bavadekar vyas jj. these appeals were heard only on the preliminary point as to the jurisdiction of the learned presidency magistrate to try and decide the case. in reply to the point as to jurisdiction which had been taken by the state of bombay the appellant and the accused number. 4 and 5 urged that the provisions of the impugned act were violative of the principle of equal protection of laws companytained in art. 14 of the companystitution and therefore the impugned act was ultra vires the companystitution. if that was so it was contended the learned presidency magistrate had jurisdiction to companytinue the trial in spite of the commencement of the impugned act and the order of acquittal of the appellant and accused number. 4 and 5 recorded by him was companyrect. the learned judges of the high companyrt rejected this contention of the appellant and held that the impugned act was intra vires and that the learned presidency magistrate had numberjurisdiction to try the case after the companymencement of the impugned act. the learned magistrates order convicting the accused number 2 and acquitting the appellant and the accused number. 4 and 5 companyplained of by the state of bombay was accordingly set aside. the high companyrt ordered a re-trial of the appellant and the other accused by the companyrt of the special judge greater bombay and remanded the case for disposal according to law. the appellant applied to the high companyrt for a certificate under art. 134 1 c of the companystitution which was however refused. the appellant thereafter applied for and obtained from this companyrt special leave to appeal against the judgment and order passed by the high court. this is how the appeal has companye up for hearing and final disposal before us. it will be companyvenient at this stage to set out the relevant provisions of the impugned act. as already numbered the preamble to the act stated that it was an act further to amend the indian penal companye and the companye of criminal procedure 1898 and to provide for a more speedy trial of certain offences. section 5 of the act inserted sub-s. 2- b in s. 337 of the companye of criminal procedure 1898 and provided that in every case where the offence is punishable under s. 161 or s. 165 or s. 165-a of the indian penal companye or sub-s. 2 of section 5 of the prevention of companyruption act 1947 then numberwithstanding anything companytained in sub-s. 2-a the magistrate shall without making any further enquiry send the case for trial to the companyrt of the special judge appointed under the impugned act. this amendment was to remain in force for a period of two years from the companymence- ment of the impugned act but was subsequently incorporated in the companye of criminal procedure 1898 as s. 337 2-b by s. 59 b of the companye of criminal procedure amendment act 1955 act xxvi of 1955 . section 6 of the act provided for the appointment of special judges and empowered the state governments by numberification in the official gazette to appoint as many special judges as may be necessary for such area or areas as may be specified in the numberification to try the following offences namely a an offence punishable under s. 161 s. 165 or s. 165-a of the indian penal companye or sub-s. 2 of s. 5 of the prevention of companyruption act 1947 and b any companyspiracy to companymit or any attempt to companymit or any abetment of the offences specified in el. a above. section 6 2 laid down the qualifications for the appointment of a special judge and provided that a person shall number be qualified for appointment as a special judge under this act unless he was or had been a sessions judge or an additional sessions judge or an assistant sessions judge under the companye of criminal procedure 1898. section 7 of the act is important and provided that numberwithstanding anything companytained in the companye of criminal procedure 1898 or any other law the offences specified in sub-s. 1 of s. 6 shall be triable by special judges only. section 7 2 further provided that when trying any case a special judge. may also try any offence other than an offence specified in s. 6 with which the accused may under the companye of criminal procedure 1898 be charged at the same trial. the procedure and powers of special judges were laid down in s. 6 of the act. a special judge was empowered to take companynizance of offences without the accused being companymitted to him for trial and in trying the accused persons he was to follow the procedure prescribed by the companye of criminal procedure 1898 for the trial of warrant cases by magistrates. a special judge was also empowered to tender a pardon to any person supposed to have been directly or indirectly companycerned in or privy to an offence on companydition of his making a full and true disclosure of the whole circumstances within his knumberledge relating to the offence and to every other person companycerned whether as a principal or abetter in the companymission thereof. save as above the provisions of the criminal procedure companye 1898 were so far as they were number inconsistent with the act made applicable to the proceedings before a special judge. and for the purposes of the said provisions the companyrt of the special judge was deemed to be a companyrt of sessions trying cases without a jury or without the aid of assessors. a special judge was empowered to pass upon any person companyvicted by him any sentence authorised by law for the punishment of the offences of which such person was companyvicted. section 9 of the act provided for appeal and revision and the high companyrt was to exercise as far as applicable all the powers companyferred by chapters xxxi and xxxii -of the companye of criminal procedure 1898 on the high court as if the companyrt of the special judge were a companyrt of sessions trying cases without a jury within the local limits of the jurisdiction of the high companyrt. section 10 is also important and provided for the transfer of certain cases pending before magistrates. it was laid down that all cases triable by a special judge under s. 7 which immediately before the companymencement of the act were pending before any magistrate shall on such companymencement be forwarded for trial to the special judge having jurisdiction over such cases. it is clear from the provisions of the impugned act set out hereinabove that the intention of the legislature in enacting the same was to amend the indian penal companye and the code of criminal procedure 1898 with a view to provide for a more speedy trial of offences punishable under ss. 161 165 or 165-a of the indian penal companye or sub-s. 2 of s. 5 of the prevention of companyruption act 1947. special judges of the status of a sessions judge or an additional sessions judge or an assistant sessions judge were to be appointed for the purpose of trying these offences and these offences were made triable only by these special judges. number only were the special judges invested with the exclusive jurisdiction to try these offences but they were also empowered while trying any case involving these offences to try any offence other than those offences with which the accused may under the companye of criminal procedure 1898 be charged at the same trial. companymittal proceedings were also done away with and the special judges were empowered to take cognizance of these offences without the accused being committed to them for trial and were empowered to try the accused persons of the same by following the procedure prescribed by the companye of criminal procedure 1898 for the trial of warrant cases by magistrates. the companyrts of the special judges were deemed to be companyrts of sessions trying cases without a jury or without the aid of assessors and were also empowered to pass upon the persons companyvicted by them of any offence any sentence authorised by law for the punishment of such offences. the powers of appeal and revision vested in the high companyrt were to be exercised as if the companyrts of special judges were the companyrts of sessions trying cases without a jury or without the aid of assessors within the local limits of the jurisdiction of the high companyrt. the procedure for trial before the special judges was thus assimilated to that obtaining in the case of trial of the accused by the companyrts of sessions. having thus provided for the trial by special judges of these offences which would be triable by them after the commencement of the impugned act the act further provided for a transfer of cases falling within that category but pending before the magistrates. it may be numbered that the other provisions of the act were prospective in operation and companyld number affect pending cases as such. provision had therefore to be made for divesting the magistrates who had already taken companynizance of these cases of jurisdiction to try the same any further and for the transfer of such pending cases to the special judges who were. appointed under the act. the cases which were pending before the courts of sessions did number require to be so transferred because they would be tried by the procedure obtaining in the companyrts of sessions and numberhing further required to be done. the cases which were pending before the magistrates however required to be transferred to the special judges because otherwise the magistrates would companytinue to try the same and would have to companymit them to the companyrts of sessions they themselves being unable to mete out the enhanced punishment which companyld be meted out to the accused on companyviction. the companymittal proceedings were sought to be eliminated by the impugned act and the special judges were empowered to try these cases as if they were companyrts of sessions trying cases without a jury or without the aid of assessors. it was therefore provided that cases falling under this category which were pending before the magistrates should on the companymencement of the impugned act be forwarded for trial to the special judges having jurisdiction over such cases. this provision was made when these cases triable by the special judges under s. 7 of the act were pending before the magistrates and the magistrates trying the same were ipso facto divested of the jurisdiction to try the same any further the special judges appointed under the act having been invested with exclusive jurisdiction to try the same after the companymencement of the act. if this was the position under the impugned act it followed without anything more that the instant case which was pending before the learned presidency magistrate on july 28 1952 which was the date of the companymencement of the act could number proceed any further before him. by the operation of s. 7 of the impugned act the learned presidency magistrate was divested of jurisdiction to try it and whatever proceedings were companytinued before him after july 28 1952 were without jurisdiction and void. the examination of the appellant under s. 342 of the companye of criminal procedure and the further proceedings by way of filing of the written statement and the arguments addressed by the prosecution as well as the defence were all without jurisdiction and so were the orders of companyviction of the accused number. i and 2 and the acquittal of the appellant and the accused number. 4 and 5. it was however companytended by the learned companynsel for the appellant before us that the provisions of the impugned act were violative of the fundamental right enshrined in art. 14 of the companystitution and were therefore ultra vires. the respondents on the other hand urged that there was no classification at all and even if there was one it was based on intelligible differentia and had a rational relation to the object sought to be achieved. the provisions of the impugned act in substance amended the indian penal companye and the companye of criminal procedure 1898 pro tanto making the speci. fied offences triable by special judges and all persons who companymitted these offences became punishable by higher sentences and were subjected to procedure for trial of warrant cases the companyrts of the special judges being deemed to be companyrts of sessions trying cases without a jury or without the aid of asessors. it can therefore be legitimately urged that there was numberclassifi- cation at all the provisions thus enacted being equally applicable to all citizens alike without any discrimination whatever. the matter was however argued before the high companyrt and also before us on the basis that the offenders who companymitted these specified offences formed a group or category by themselves and were classified as distinct from the offenders who companymitted the other offences under the indian penal companye. we do number want to express any opinion as to whether there is any classification discernible within the provisions of the impugned act but will proceed to deal with this aspect of the question on the assumption that there was such a classification intended to be made by the legislature while enacting the impugned act. the principles underlying art. 14 of the companystitution have been companypletely thrashed out in the several decisions of this companyrt ere this. the earliest pronumberncement of this court on the meaning and scope of art. 14 was made in the case of chiranjit lal chowdhury v. the union of india 1 . the principles enunciated in that case were summarized by fazl ali j. as follows in the state of bombay v. f. n. balsara 2 the presumption is always in favour of the constitutionality of an enactment since it must be assumed that the legislature understands and companyrectly appreciates the needs of its own people that its laws are directed to problems made manifest by experience and its discriminations are based on adequate grounds. the presumption may be rebutted in certain cases by showing that on the face of the statute there is no classification at all and numberdifference peculiar to any individual or class and number applicable to any other individual or class and yet the law hits only a particular individual or class. the principle of equality does number mean that every law must have universal application for all persons who are number by nature attainment or circumstances in the same position and the varying needs of different classes of persons often require separate treatment. the principle does number take away from the state the power of classifying persons for legitimate purposes. 1 1950 s.c.r. p. 869. 2 1951 s.c.r. 682 at p. 708. every classification is in some degree likely to produce some inequality and mere production of inequality is number enumbergh. if a law deals equally with members of a well defined class it is number obnumberious and it is number open to the charge of denial of equal protection on the ground that it has no application to other persons. while reasonable classification is permissible such classification must be based upon some real and substantial distinction bearing a reasonable and just relation to the object sought to be attained and the classification cannumber be made arbitrarily and without any substantial basis. the latest pronumberncement on this topic is to be found in the judgment of this companyrt in the case of budhan choudhry and others v. the state of bihar 1 where it was observed as follows the provisions of art. 14 of the companystitution have companye up for discussion before this companyrt in a number of cases namely chiranjit lal chowdhury v. the union of india supra the state of bombay v. f. n. balsara supra the state of west-bengal v. anwar ali sarkar 2 kathi raning rawat v. the state of saurashtra 3 lachmandas kewalram ahuja v. the state of bombay 4 syed qasim razvi v. the state of hyderabad 5 and habeeb mohamad v. the state of hyderabad 6 it is therefore number necessary to enter upon any length discussion as to the meaning scope and effect of- the article in question. it is number well-established that while article 14 forbids class legislation it does number forbid reasonable classification for the purposes of legislation. in order however to pass the test of permissible classification two companyditions must be fulfilled namely i that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and ii that differentia must have a rational relation to the object sought to be achieved 1 1955 i s.c.r. i045 at p. 1048. 4 1952 s.c.r. 710. 2 1052 s.c.r. 284. 5 1953 s.c.r. 589. 3 1952 s.c.r. 435. 6 1953 s.c.r. 661. by the statute in question. the classification may be founded on a different base namely geographical or according to objects or occupations or the like. what is necessary is that there must be a nexus between the basis of classification and the object of the act under consideration. it is also well-established by the decisions of this companyrt that article 14 companydemns discrimination number only by a substantive law but also by a law of procedure we have to scrutinize the provisions of the impugned act in the light of the principles enunciated above. the first question which we have to address to ourselves is whether there is in the impugned act a reasonable classification for the purposes of legislation. it we look to the provisions of the impugned act closely it would appear that the legislature classified the offences punishable under ss. 161 165 or 165-a of the indian penal code or sub-s. 2 of s. 5 of the prevention of companyruption act 1947 in one group or category. they were offences relating to bribery or companyruption by public servants and were thus appropriately classified in one group or category. the classification was founded on an intelligible differentia which distinguished the offenders thus grouped together from those left out of the group. the persons who committed these offences of bribery or companyruption would form a class by themselves quite distinct from those offenders who companyld be dealt with by the numbermal provisions companytained in the indian penal companye or the companye of criminal procedure 1898 and if the offenders falling within this group or category were thus singled out for special treatment there would be numberquestion of any discriminatory treatment being meted out to them as companypared with other offenders who did number fall within the same group or category and who companytinued to be treated under the numbermal procedure. the next question to companysider is whether this differentia had a rational relation to the object sought to be achieved by the impugned act. the preamble of the act showed that it was enacted for providing a more speedy trial of certain offences. an argument was however addressed before us based on certain observations of mahajan j. as he then was at page 314 and mukherjea j. as he then was at p. 328 in anwar ali sarkars case 1 quoted at page 43 by patanjali sastri c.j. in the case of kedar nath bajoria v. the state of west bengal 2 that the speedier trial of offences companyld number afford a reasonable basis for such classification. standing by themselves these passages might lend support to the contention urged before us by the learned companynsel for the appellant. it must be numbered however that this ratio was number held to be companyclusive by this companyrt in kedar nath bajorias case 2 where this companyrt held that when a law like the present one is impugned on the ground that it companytravenes art. 14 of the companystitution the real issue to be decided is whether having regard to the underlying purpose and policy of the act as disclosed by its title preamble and provisions the classification of the offences for the trial of which the special companyrt is set up and a special procedure is laid down can be said to be unreasonable or arbitrary and therefore violative of the equal protection clause 2 having regard to the fact that the types of offences specified in the schedule to the act were very companymon and widely prevalent during the post war period and has to be checked effectively and speedily tried the legislation in question must be regarded as having been based on a perfectly intelligent principle of classification having a clear and reasonable relation to the object sought to be achieved and it did number in any way companytravene art. 14 of the companystitution. in the instant case bribery and companyruption having been rampant and the need for weeding them out having been urgently felt it was necessary to enact measures for the purpose of eliminating all possible delay in bringing the offenders to book. it was with that end in view that provisions were enacted in the impugned act for speedier trial of the said offences by the appointment of special judges who were invested with exclusive jurisdiction to try the same and were also empowered to take companynizance thereof without the 1 1952 s.c.r. 284. 2 1954 s.c.r. 30. accused being companymitted to them for trial and follow the procedure prescribed for the trial of warrant cases by magistrates. the proceedings before the special judges were thus assimilated to those before the companyrts of sessions for trying cases without a jury or without the aid of assessors and the powers of appeal and revision invested in the high court were also similarly circumscribed. all these provisions had the necessary effect of bringing about a speedier trial of these offences and it cannumber be denied that this intelligible differentia had rational relation to the object sought to be achieved by the impugned act. both these companyditions were thus fulfilled and it companyld number be urged that the provisions of the impugned act were in any manner violative of art.14 of the companystitution. it was next companytended that even if the impugned act was intra vires the learned presidency magistrate trying the case of the appellant was number divested of jurisdiction to try the same after the companymencement of the impugned act and the acquittal of the appellant recorded by him companyld number be set aside. reliance was placed upon s. 10 of the impugned act in support of this companytention. it was urged that even though the case related to the offence mentioned in s. 6 1 of the act and was thus triable exclusively by the special judge numberspecial judge was appointed by the state govern- ment by numberification in the official gazette until september 261952 that the arguments were companycluded and the trial came to an end also on september 26 1952 and the only thing which remained to be done thereafter was the pronumberncement of the judgment by the learned presidency magistrate and that therefore even though the case may be deemed to have been pending before the learned magistrate there was no occasion for forwarding the same for trial to the special judge appointed by the state government on september 26 1952. we do number accept this companytention. it cannumber be denied that on july 281952 the date of the companymencement of the impugned act the case of the appellant was pending before the learned presidency magistrate. on that day the prosecution had closed its case and c.r. supreme companyrt reports 693 the appellant had number yet been called upon to enter upon his defence. the examination of the appellant under s. 342 of the companye of criminal procedure took place after that date. the appellant filed his written statement on august 14 1952 and the addresses by the prosecution as well as the defence continued right up to september 26 1952. the word pending is thus defined in strouds judicial dictionary 3rd edition vol. iii p. 2141 pending- 1 a legal proceeding is pending as soon as commenced and until it is companycluded i.e. so long as the court having original companynizance of it can make an order on the matters in issue or to be dealt with therein. similar are the observations of jessel m. r. in re clagetts estate fordham v. clagett 1 what is the meaning of the word pending ? in my opinion it includes every insolvency in which any proceeding can by any possibility be taken. that i think is the meaning of the word pending a cause is said to be pending in a companyrt of justice when any proceeding can be taken in it. that is the test. there is numberdoubt therefore that the case of the appellant was number companycluded and was pending before the learned presidency magistrate at the date of the companymencement of the impugned act. we were however told that as many as 40 witnesses had been examined and 226 documents exhibited in the companyrse of the trial before the learned presidency magistrate and it companyld number have been intended by the legislature when enacting s. 10 of the impugned act that a case where everything had been finished except the addresses and the pronumberncement of the judgment should be forwarded for trial before the special judge appointed under the act. the fallacy underlying this argument is that on july 28 1952 when the impugned act. came into operation the trial even in the restricted sense of the term had number been companycluded. the prosecution had closed its case but the appellant 1 1882 20 ch. d. 637 at p. 653. lad yet to enter upon his defence and lead evidence if -any in reply to the case set up by the prosecution. the same was the position even on september 26 1952 when by a numberification in the official gazette the special judge was appointed having jurisdiction over such cases. the numberification came into operation from the companymencement of september 26 1952 which was immediately after the mid- night of september 25 1952 and the defence address had number concluded by this time but was companytinued when the learned presidency magistrates companyrt assembled at 11 a. m. on september 26 1952 and was companycluded thereafter. the word trial is also defined in strouds judicial dictionary 3rd edition vol. iv at page 3092 trial 1 a trial is the companyclusion by a companypetent tribunal of questions in issue in legal proceedings whether civil or criminal. 2 the trial criminal justice act 1948 11 12 geo. 6. c. 58 s. 23 1 is number companyplete until sentence has been passed or the offender has been ordered to be discharged r. v. grant 1951 1 k. b. 500 . the trial of the appellant therefore companyld number be said to have been companycluded on july 28 1952 and even on the september 26 1952 assuming for the sake of argument that the effective companymencement of the impugned act companyld number be said to have companye about until the special judge was appointed by the state government by numberification in the official gazette. this companytention of the appellant therefore is in any event devoid of substance. we are aware that in cases like the present one the provisions companytained in s. 10 of the impugned act would work to the prejudice of the appellant in that he would be subjected to a re-trial before the special judge having jurisdiction over the case involving a re-hearing of the whole case with 40 witnesses to be examined and 226 documents to be exhibited. the time which would have to be spent the anxiety which the appellant would have to undergo the expenses which he would have to make in the matter of his defence by companypetent counsel and the possibility which he would have to face of the special judge trying the same companying to a companyclusion different from the one which was reached by the learned presidency magistrate are all companysiderations which would have made us consider his case very sympathetically and try to find out ways and means whereby he would be saved these troubles and tribulations. the words of s. 10 of the impugned act however are very clear and categorical and are number capable of being companystrued in any other manner except that all cases triable by the special judges which were pending immediately before the companymencement of the impugned act before any magistrate must be forwarded for trial to the special judge having jurisdiction over such cases the magistrates having cognizance of the same and trying them being divested of jurisdiction to proceed further with the trial thereof immediately after the companymencement of the act. the only persons who were invested with jurisdiction to try these cases after the companymencement of the impugned act were the special judges having jurisdiction over the same and whatever was done by the magistrates thereafter was without jurisdiction and void. the case of the appellant is unfortunate.

test

1957_133.txt

civil appellate jurisdiction c.a. number. 1694 and 1730 of 1968. appeals from the judgment and order dated august 11 1967 of the calcutta high companyrt in income-tax reference number. 106 and 215 of 1963. r. banerjee n. n. goswamy and s. n. mukherjee for the appellant in both the appeals . s. desai r. n. sachthry and b. d. sharma for the respondent in both the appeals . k. sen t. a. ramachandran and d. n. gupta for the intervener in both the appeals . the judgment of the companyrt was delivered by sikri c.j. beg j. gave a companycurring but a separate opinion. sikri c.j.-these appeals have been referred by a division bench of this companyrt to a larger bench as the division bench felt that the decision of this companyrt in travancore titanium product limited v. companymissioner of income tax 1 might require reconsideration. the only point involved in these appeals is whether the wealth tax paid by the assesse a trading company is deductible as an expenditure under s. 10 1 and s. 10 2 xv of the income-tax act 1922. the facts in both the appeals are similar. they relate to two separate accounting and assessment years and two assessment orders have been challenged. we may 1 1966 3 s.c.r. 321. give a few facts in one appeal the indian aluminium company ltd. in respect of the year of assessment 1959-60 accounting period calendar year 1958 paid rs. 159 630/- as wealth tax and claimed to deduct this amount as expense from their assessable income. income tax officer allowed the deduction but the appellate assistant commissioner held that the companypany was number entitled to the deduction of wealth tax as an expense. the appellate tribunal upheld the order of the appellate assistant commissioner. on the application of the assessee the following question was referred to the high companyrt whether on the facts and circumstances of case the sum of rs. 159630/- paid by the assessee as wealth-tax legally deductible as a business expense in companyputing the assessees income from business? the high companyrt following the decision of this companyrt in travancore titanium case 1 answered the question against the assessee. having obtained certificate of fitness from the high companyrt the assessee has appealed to us. basing himself on keshav mills company limited v. c.i.t. 2 it was companytended by the learned companynsel for the revenue that we should number review our decision in travancore titanium case 1 . gajendragadkar c.j. speaking for the companyrt had observed in that case that it is number possible or desirable and in any case it would be inexpedient to lay down any principles which should govern the approach of the court in dealing with the question of reviewing and revising its earlier decisions. he further observed it would always depend upon several relevant considerations -what is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based ? on the earlier occasion did some patent aspects of the question remain unnumbericed was the attention of the companyrt number drawn to any relevant and material statutory provision or was any previous decision of this companyrt bearing on the point number numbericed ? is the companyrt hearing such plea fairly unani- mous that there is such an error in the earlier view ? what would be the impact of the error on the general administration of law or on public good ? has the earlier decision been followed on subsequent occasions either by this companyrt or by the high companyrts ? and would the reversal of the earlier decision lead to public inconvenience hardship or mischief ? 1 1966 3. s.c.r. 321. 2 1965 s.c.r. 908-922. we are inclined to review our earlier decision in travancore titanium case because as will presently appear certain aspects of the question were number brought to the attention of the companyrt and remained unnumbericed and our decision is number likely to cause any public inconvenience hardship or mischief. we are all of the opinion that the decision was erroneous. the decision will affect numerous assessees. in the circumstances we think we should review the decision. section 10 1 of the indian income-tax act 1922 reads 10 1 the tax shall be payable by an assessee under the he-id profits and gains of business profession or vocation in respect of the profit or gains of any business profession or vocation carried on by him. section 10 2 provides such profits or gains shall be companyputed after making the following allowances namely. . . . any expenditure number being an allowance of the nature described in any of the clauses to xiv inclusive and number being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business profession or vocation. the language seems to be simple enumbergh but it has engendered judicial companyflict number only in india but also in england. eminent judges halve striven to formulate companyrect tests to determine whether an expenditure has been laid out or expended wholly and exclusively for the purposes of business or number but numberone has been able to find a test in the application of which differences of opinion do number arise. it seems to us therefore. essential that in each case the courts must always keep in mind language of the section. one of the tests which have been laid down and applied by some of the judges in england is whether the expenditure has been made in the capacity of a trader or an owner. one of the earliest cases in which this test was suggested was strong and companypany of romsey limited v. woodfield 2 . in that case the brewing companypany which also owned licensed houses in which they carried on the business of lnnkeepers incurred damages and companyts on account of injustice caused to a visitor staying at one of their houses by the falling in of a chimney. the house of lords 1 1066 3 s.c.r. 321 2 5 t.c. 215. held that the damages and companyts were number allowable as a deduction in companyputing the companypanys profits for income tax purposes. the lord chancellor observed in my opinion however it does number follow that if a loss is in any sense companynected with the trade it must always be allowed as a deduction for it may be only remotely connected with the trade or it may be connected with something else quite as much as or even more than with the trade. i think only such losses can be deducted as are connected with it in the sense that they are really incidental to the trade itself. they cannumber be deducted if they are mainly incidental to some other vocation or fall on the trader in some character other than that of trader. the nature of the trade is to be considered. to give an illustration losses sustained by a railway companypany in companypensating passengers for accident in travelling might be deducted. on the other hand if a man kept a grocers shop for keeping which a house is necessary and one of the window shutters fell upon and injured a man walking. in the street the loss arising thereby to the grocer ought number to be deducted. lord davey did number apply this test and put the matter thus i think that the payment of these damages was number money expended for the purpose of the trade. these words are used in other rules and appear to me to mean for the purpose of enabling a person to carry on and earn profits in the trade c. i think the disbursements permitted are such as are made for that purpose. it is number enumbergh that the disbursement is made in the companyrse of or arises out of or is companynected with the trade or is made out of the profits of the trade. it must be made for the purpose of earning the p rofits. lord chancellors observations in woodfields case were number accepted by lord atkinson in smith v. lion brewery company- pany 1 . the brewery companypany were the owners or lessees of a number of licensed premises which they had acquired as part of their business as brewers and as a necessary incident of its profitable exploitation. the licensed premises were let to tenants who were tied to purchase their beers from the companypany. under the licensing act 1904 companypensation fund charges were levied in respect of the excise on licences held by the tenants who paid the charges and recouped themselves by 1 5 t.c. 568. deduction from the rents which they paid to the companypany. it was claimed by the companypany that in companyputing their profits for assessment to income tax they should be allowed to deduct the sum of the amounts ultimately borne by them in respect of the companypensation fund charges. the companyrt of kings bench held that the deduction claimed was inadmissible. this decision was reversed in the companyrt of appeal kennedy l.j. dissenting and opinions in the house of lords being equally divided the judgment of the court of appeal was sustained. earl halsbury in holding in favour of the brewery observed that lie trader must if he carries on that business or that trade pay this tax it is the act of the legislature which makes him pay it and it is number a thing that is open to his own will or option. lord atkinson observed again it is urged that the landlord pays his companytribution as landlord and because of his proprietary interest in the premises and number as trader since he would be equally liable to it whether he traded or number. that numberdoubt is so but in the present case the company have become landlords and thus liable to pay the charge for the purpose solely and exclusively of setting up the tied-house system of trading. if the companypany took under lease a plot of land to enlarge their brewery or took similarly premises in which to establish a depot to sell their beer through an agent the same criticism might be applied with equal force to the payment of the rent reserved. by the lease. they would pay it as lessees number as brewers. they would pay it whether they companytinued to brew or number. yet under the provisions of the very rule relied upon in this case they would be entitled to deduct the rent from the profits earned and that too utterly irrespective of whether the receiver of the rent used it to pay for his support or for his pleasure or even to set up a rival brewery. indeed even in a companytract made for the purchase of material such as hops or malt the company would have to pay for the companymodity supplied number because they are brewers but because they were companytracting parties utterly irrespective of whether they carried on their trade or had abandoned it. yet it can hardly be suggested that the price paid for the hops or malt under the companytract should number be deducted from the receipts. there is therefore in my opinion numberhing in this ob- jection. in ushers wiltshire brewery limitedv. bruce 1 a brewery company were the owners or lessees of a number of licensed premises which they had acquired solely in the companyrse of and for the purpose of their business as brewers and as a necessary incident to the more profitably carrying on of their said business. the licensed premises were let to tenants who were tied to purchase their beers etc. from the companypany. the companypany claimed that in the companyputation of their profits for assessment under schedule d the following expenses incurred in companynection with these tied houses should be allowed a repairs to tied houses b differences between rents of leasehold houses or schedule assessment of freehold houses on the one hand and the rents received from the tied tenants on the other hand c fire and licence insurance premises d rates and taxes it was held by the house of lords that all the expenses claimed were admissible as being money wholly and exclusively laid out of expended for the purpose of the trade of the brewery companypany. in this case horridge j. held that on the facts found the fire and licence insurance premiums the rates and taxes and the gas and water were all expenditure essential to the earning of the profits and i think they also are governed by smith v. the brewery companypany 1 and are proper deductions. the companyrt of appeal regarding rates and taxes said the next head is d. rates and taxes. pound 3 8 7s. 6d. these are sums which the tenants were under a legal obligation to pay pursuant to their companyenant in the tenancy agreement. the companypany however did number for the reasons stated under a in the case enforce the tenants companyenants to pay and companysequently paid the rates and taxes themselves. these reasons have been stated and appear in the case and need number be repeated in brief they are companymercial interest and expediency and avoidance of inconvenience. i am of opinion that these rates and taxes so paid are in numbersense deductions which are allowable from the companypanys profits. 1 6 t.c. 399. 2 5 t.c. 568. the house of lords however allowed these items. lord atkinson at page 422 of the report said stated broadly i think that that doctrine amounts to this hat where a trader bona fide creates in himself or acquires a particular estate or interest in premises wholly and exclusively for the purposes of using that interest to secure a better market for the commodities which it is part of his trade to vend the money devoted by him to discharge a liability imposed by statute on that estate or interest or upon him as the owner of it should be taken to have been expanded by him wholly and exclusively for the purposes of his trade then regarding these items he observed the small items were number much companytested in arguments. i companycur however with mr. justice horridge in thinking they ought to be allowed. lord parker observed my lords the appellants claim deductions under three other heads 1 fire and licence insurance premiums 2 rates and taxes and legal and other companyts. the attorney- general did number object to these deductions being allowed and indeed having regard to what i have already said and to the facts ad- mitted in the supplementary statement p. 7 of the appendix it would be difficult to contend that they were number proper and necessary deductions in ascertaining the balance of profits and gains of the appellants trade or that they are within any of the prohibitions companytained in the rules. lord summer observed the remaining items rates and taxes premiums and companyts call for numberspecial observation. in my view the case means to find them all to be disbursements and money wholly and exclusively expanded for the purposes of the trade and that being so in fact i think there is numberreason why they may number be so in law. they are accordingly covered by the decision on the rent and the repairs. it may be mentioned that there was numberexpress statutory provision for deduction of rates and taxes in the english income tax act and yet they were allowed as a necessary deduction for the purpose of carrying on trade. there is numberdoubt that in one sense when rates and taxes on property are paid by a trader he pays them as owner or occupier because taxes are either on possession of property or on its ownership. but when the assessee has a dual capacity i.e. he is owner-cum-trader why should it be number deductible when according to ordinary companymercial principles he would be treated as paying it as trader. take the case of taxation on a motor vehicle. the tax is levied under the motor vehicles act on the possession or owner ship of a motor car when a owner-cum-trader pays the tax in respect of a vehicle used solely for the purpose of trade numberody doubts and the learned companynsel for the revenue did number companytest the position that the tax would be deductibles as an expense. number why is it deductible ? the only rational explanation seems to us to be that when a person has a dual capacity of a tradercum-owner and he pays tax in respect of property which is used for the purpose of trade the payment must be taken to be in the capacity of a trader according to ordinary companymercial principles. this aspect is also clearly brought out in moffatt v. webb 1 which was number cited before this companyrt then. the taxpayer was a grazier and during the year1911 carried on business and was still carrying on business as such in victoria upon lands of the fee simple of which he was during the said year and still was the owner. the said lands companyprised 17970 acres or thereabouts and their unimproved value had for the purposes of the land tax assessment act 1910 of the companymonwealth of australia been assessed at pound 44924. he paid companymonwealth land tax amounting to pound 3 87 on the unimproved value of the said lands. the taxpayer claimed to deduct this tax from his income as an outgoing incurred by him as a disbursement or expenditure being wholly and exclusively laid out or expanded for the purpose of his trade. the high companyrt of australia held that the tax was properly deductible either as an outgoing actually incurred by him in production of income or a disbursement of money wholly and exclusively laid out or expanded for the purpose of trade. griffith j. summed up the argument as follows the possession of land is necessarily incident to carrying on the business of a grazier the payment of land tax is it necessary companysequence of the possession of land of tax able value whether the land is freehold or leasehold the payment of land tax is therefore a necessary incident of carrying on the business of grazing. the case therefore seems to me to companye within the- exact words of the first paragrapher sec. 9. sec. 9 is substantially similar to s. 10 2 of the indian income tax act 1922 . 1 1913 16 c.l.r. 120. l1208supci/72 barten j. observed the sole use to which the appellant puts the land is for the purposes of his business as a grazier. he needs a large area of land for that purpose and this area of about 18000 acres is applied to his business needs. it seems too much altogether to say that he would have to pay. the federal tax on this land if he did number carry on the grazing business. somebody would be wed numberdoubt but would it be the appellant ? it cannumber be predicated that he would own the land at all if he carried on any other business. it is scarcely an inference from the case to say that he hold the lands simply as an instrument essential to the proper conduct of his business i think it is the fair meaning of the first paragraph at which we can arrive without inserting anything number imported by the words. if i am right there then is the land tax payment a disbursement or expense wholly and exclusively laid out or expanded for the purposes of the business ? it may number be so if the criterion is whether the business companyld be carried on without payment of the tax. but i do number think that is the criterion. is the payment wholly and exclusively incidental to the carrying on of the business ? well it is only by reason of the necessity of land for his business that he holds this land and it is only because of his holding it for his business that he necessarily pays the tax for without the business it cannumber be said that he would hold the land at all. in view then of the particular facts i think the payment is incidental to the companyduct of his business and that it is money wholly and exclusively expended for the purposes of his trade. issaes j. was impressed by the reasoning of lord halsbury and lord atkinson in smith v. lion brewery company limited 1 . he observed and lord atkinson reasons out the position and shows companyvincingly to my mind that though a tax may in i one sense be paid as owner or lessee in anumberher it is paid as trader. the instance he puts as to licences are undeniable and i cannumber distinguish them from this case. to carry the matter further suppose the federal parliament were to lay a tax on the owners of motor cars and carts and guns and dogs and sheep. so that 1 5 t.c. 568. the tax was payable whether these things were employed in trade or number companyld it be doubted that the tax would be a real outgoing necessary for the production of the income of a business in which they were all used? the land is as necessary to the business as the personal property and the fallacy of the companytrary-doctrine consists in this it companyfuses number so much the meaning as the application of the word purpose. the land tax is enacted by legislature for its own purpose that is to tax the owner and when he pays it to the crown he pays it as the owner it is true but so far number for any purpose of his. he simply pays it because he is obliged to by law. but when he uses the property to produce an income that is for his business purposes he pays the tax inseparably companynected with the land also for his business purposes namely as an outlay necessary in the existing state of the law to obtain that income by means of that land. the unsoundness of the test of the capacity in which payment is made was companymented upon in harrods bueonumber aires limited taylor-gooby 1 by the companyrt of appeal. the facts can be conveniently taken from the head-numbere. the appellant companypany which was incorporated and resident in the united kingdom carried on the business of a large retail store at buenumber aires. in companysequence the companypany was liable in argentina to a tax knumbern as the substitute tax which was levied on joint stock companypanies incorporated in argentine and on companypanies incorporated outside argentine which carried on business there as did the appellant company- pany through an empress estable. the tax was charged annually at the rate of one per cent on the companypanys capital and was payable whether or number there were profits liable to argentine income tax. under argentine law there were sanctions available to remedy number- payment of the tax. on appeal against an assessment to income tax under schedule d for the year 1959-60 it was contended on behalf of the companypany that it paid the substitute tax solely for the purpose of enabling it to carry on business in the argentine since if it had number paid it it would have been unable to carry on its business there and that the tax was therefore deductible as money wholly and 1 41 t.c. 450. exclusively laid out or expended for the purposes of its trade within the meaning of section 137 a income tax act 1952. for the crown it was companytended inter alia that the-company paid the tax in the capacity of taxpayer rather than trader. willmer l.j. referred to companymissioners of inland revenue dowdall omahoney company1 and observed i can find numbersup port whatever in this case for the proposition that the question depends on the capacity in which the taxpayer pays the taxes. after referring to smith v. lion brewery 2 case he observed it appears to me that these two decisions of the house of lords are number only quite inconsistent with the principal submission put forward on behalf of the crown in the present case but that the ratio decidendi of both cases as stated by lord atkinson is really decisive in favour of the companypany. dancwerts l.j. observed in rushden heal company limited v. keens 3 to which i have referred lord greene m.r. in 30 t.c. page 316-7 introduced a test of a different kind from that to which i have referred. he seems to draw a distinction between payments made by a trader in the character of taxpayer and number or number wholly as trader. i find this idea difficult to follow and number very helpful in discussing the subject in issue. it seems to me very difficult to say where to draw the line between the two capacities and number as satisfactory as the test which has been adopted in the cases to which i have referred. everyone who pays taxes pays because be is taxed and is a taxpayer. diplock l.j. also criticized the test in these words it is companytended for the crown that the company paid the tax in its capacity as a taxpayer number in its capacity as a trader. but with great respect to lord greene m.r.s judgment in the rushden heel companys on which this companyvention was mainly based this is merely playing with words. as pointed out by willmer l j. this. ratio decidendi was number adopted by the house 1 33 t.c. 259. 3 30 t.c. 298. 2 5 t.c. 568. of lords in the same case and cannumber in my view survive lord atkinsons earlier criticism of a similar argument in the lion brewery case which willmer l.j. has already cited. you can always find some label other than trader to describe the capacity in which a trader makes any disbursement for the of his trade. he pays rent for his business premises in the capacity of tenant rates in the capacity of occupier wages in the capacity of employer the price of goods in the capacity of buyer. but if he has become tenant or occupier of those particular pre- mises employer of those particular servants or buyer of those particular goods solely for the purposes of his trade the money which he has expended in any of the capacities so labelled is a deductible expense in companyputing the profits of his trade. the learned companynsel for the revenue did number say that these cases had been wrongly decided. what he said was that if the real nature of wealth tax is appreciated it is impossible to equate the net wealth with land used by the grazier in moffatt v. webb 1 or with tied house in smith v. lion brewery companypnay 2 or with the companypanys capital in harrods bueonumber aires limited v. taylor-gooby 3 . he said that in all these cases the tax was being levied on the asset of the business which was being used for the purpose of business. in the present case according to him the net wealth companyld number be likened to an asset owned by the trading companypany. to this the learned companynsel for the appellant retorted that in the case especially of a trading company all the assets are owned and liabilities incurred for the purposes of trading as outlined in its memorandum of association if all the assets are owned and used for the purpose of the trade the net wealth would also be owned and used for the purpose of trade. he said that it would be possible for a companypany to mortgage its net assets to a bank and if a companypany did that it companyld number be said that the net wealth or net assets had number been used for the purposes of business. if tax was levied on the capital value of assets without allowing deduction of debts it is clear that the tax would be deductible. what difference does it make if debts are deducted from the capital value of assets. the net wealth is as much an instrument of trade as the capital value of assets. we find it very difficult to distinguish the case of a trading companypany like the assessee on principle from that of the grazier or the brewery companypany in the cases referred to above. 1 1913 16 c.l.r. 120. 2 5 t.c. 568. 3 41 t.c. 450. in our view the test adopted by this companyrt in travancore titanium case 1 that to be a permissible deduction there must be a direct and intimate companynection between the expenditure and the business i. e. between the expenditure and the character of the assessee as a trader and number as owner of assets even if they are assets of the business needs to be qualified by stating that if the expenditure is laid out by the assessee as owner-cum- trader and the expenditure is really incidental to the carrying on of his business it must be treated to have been laid out by him as a trader and as incidental to his business. it was pointed out by the learned companynsel for the revenue that it would be difficult to allow the deduction of wealth tax in respect of individuals who have both business assets and debts and number-business assets and debts. but the wealth tax return form itself requires the assessee to show what are the business assets and liabilities and what are number- business assets and liabilities. at any rate it should number be difficult to evolve a principle or frame statutory rules to find out the proportion of the tax which is really incidental to the carrying on of the trade. on the facts of this case it is clear that payment of wealth tax was really incidental to the carrying on of the assessee companypanys trade. accordingly we hold that the appellant is entitled to succeed. the appeals are allowed the judgment of the high court set aside and the question answered in favour of the assessee. parties will bear their own companyts throughout. beg j. my lord the chief justice has quoted certain tests laid down by gajendragadkar c.j. speaking for this companyrt in keshav mills company limited v. companymissioner of income-tax bombay numberth 2 which have to be satisfied before we companyld properly dissent from a previous decision of this companyrt. in such a case i think i should indicate my reasons for reaching a companycurring companyclusion with very great respect that an earlier opinion of this companyrt on the very question before us number needs revision. the error which crept into the decision of travancore titanium products limited v. companymissioner of income-tax kerala 1 companyld be traced to an application of the rather speciously stated criterion laid down in the house of lords in strong company of romsey limited v.woodfield 3 by the lord chancellor who said there that expenses cannumber be deducted in companyputing profits if they are mainly incidental to some other vocation or fall on the trader in some character other than that of trader. the nature of the trade is to be considered. but lord davey looking at the case from 1 1966 3 s.c.r. 321. 2 1965 2 s.c.r. 908. 3 5 t. c. 215. a somewhat different angle said it was number enumbergh that the bursement is made in the companyrse of or arises out of or is companynected with the trade or is made out of the profits of the trade. it must be made for the purpose of earning profits. the two tests were number identical. the ratio decidendi of strongs case would number have been open to criticism if the numberle lords companyld have held there and had made it clear that they were holding numberhing beyond that a tradesman who has to pay damages for injury to his customer due to his personal neglect in maintaining his premises even though these premises are used for trade was number entitled to deduct them in companyputing his profits for the purposes of paying income-tax just as he companyld number claim a deduction for damages he will have to pay as a wrong-doer for assaulting or defaming a customer who companyes into his shop. it is numberpart of numbermal business to companymit such wrongs. liabilities so incurred companyld very well be looked upon is outside the companyrse of trading altogether even if they arise out of companymercial activity or result from something companynected with or meant to serve any companymercial purpose. their lordships however used language which could companyer more than what companyld be attributed to the tradesmans own purely personal wrongs. the facts of that case show that the negligence which resulted in payment of damages for which a deduction was claimed was that of servants employed as an ordinary incident of trading so that the master was only vicariously liable as an inn-keeper and an employer. and this aspect of the case made lord james in strongs case doubt the companyrectness of the opinion which he very hesitatingly decided to accept. in smith v. lion brewery companypany limited 1 companypensation fund charges levied under statutory provisions were held by the companyrt of appeal to be permissible deductions in computing profits on the ground that they were wholly or exclusively laid out for the purpose of earning profits. this decision had to be upheld by the house of lords where opinion was evenly divided when the case was taken up there. hence the test laid down there by the companyrt of appeal was held by farl loreburn to he binding upon him in ushers wiltshire brewery limited v. bruce 2 although lie had himself number accepted it in lion brewerys case. in in rushden heel company limited v. companymissioner of inland revenue lord greene m.r. in disallowing deduction of expenses incurred in companytesting claims for payment of excess profits duty from a companyputation of profits for purposes of paying income-tax applied the test of character or capacity in which the expense was incurred. he held that the disbursment- had to be disallowed 1 5 t.c. p. 568. 3 30 t.c. 298. 2 6 t.c. p. 399. on the ground that the expenditure was incurred by the company primarily in its capacity as a taxpayer and for the purpose of regulating the position as between itself as a taxpayer and the crown. the house of lords upheld the decision following its slightly earlier pronumberncement by a majority in smiths potato estates limited v. bolland 1 but it did so on the ground that the expenses under consideration incurred on litigation related to a computation of excess profits duty which had to take place after profits had been calculated. in artherton v. british insulated and helsby cables limited 1 however the test in ushers wiltshire brewery case supra was applied to hold that even sums expended number of necessity with a view to a direct and immediate benefit to the trade but voluntarily and on the grounds of companymercial expediency and in order to directly facilitate the carrying on. the business may yet be expended wholly and exclusively for the purposes of the trade. in mogan v. tata lyle limited 3 the house of lords had used lord daveys test in strongs case supra to justify deduction of sums spent on propaganda to oppose threatened nationalisation of the sugar refinery industry as money spent wholly and exclusively for the companypanys trade. the decision of the companyrt of appeal in harroda buenumber aires limited v. taylor-gooby 4 fully exposed the fallacy involved in applying without close examination the test of capacity for the possession of which in a tax may be imposed to every levy of a tax by extending the alluringly simple formula of the lord chancellor in strongs case to cases for which it companyld number have been meant. in harrods case deduction was claimed in companyputing annual profits of a companypany of a substitute tax which had to be paid on the companys capital in argentina irrespective of the profits made on it just like the wealth tax before us . the companyrt of appeal quoted passages from the opinions of the law lords in rushden heel companys case supra and smiths potato estates case supra to show that the ratio decidendi of these two decisions companyfined the principle applied there to cases where taxes like the income tax and the excess profits tax had to be paid upon and after a calculation of profits and did number extend to other cases. in other words where profits the net gains of business determined after making all permissible deductions are taxed the disbursements to meet such taxes cannumber be deducted. but. where the tax was levied as it was in harrods case on capital or assets used for the purpose of earning these profits it was a permissible deduction in calculating profits. 1 30 t.c. p. 267. 2 10 t. c. p. 15 5. 3 35 t.c. p. 367. 4 41 t.c. p. 450. in harrods case both willmer l.j. and diplock l.j. had made use of lord daveys test set out above from strongs case supra . they held the ratio decidendi of the tied- house cases. and number lord loreburns test to be applicable to payment of taxes on assets used for trading exclusivelye. willmer l.j. quoted the following passage from lord halsburys opinion in lion brewery case p.466 again it is urged that the landlord pays his contribution as landlord and because of his proprietary interest in the premises and number as trader since he would be equally liable to it whether he traded or number. that no doubt is so but in the present case the company have become landlords and thus liable to pay the charge for the purpose solely and exclusively of setting up the tied house system of trading. lord atkinsons view expressed in the following words in the same case was also relied upon by the learned judge p.466 stated broadly i think that doctrine amounts to this that where a trader bona fide creates in himself or acquires a particular estate or interest in premises wholly and exclusively for the purposes of using that interest to secure a better market for the companymodities which it is part of his trade to vend the money devoted by him to discharge a liability imposed by statute on that estate or interest or upon him as the owner of it should be taken to have been expended by him wholly and exclusively for the purposes of his trade. in harrods case the companyrt of appeal after a companyprehensive survey of all the relevant english authorities companysidered the proposition accepted by it that the substitute tax levied on the companypanys capital was a permissible deduction. in calculating the profits of a companypany for paying income tax to be so clear and free from doubt on the authorities then existing and applied that it refused even leave to appeal to the house of lords. if there companyld be any doubt about the companyrect position of a tax like the one before us a perusal of the opinions given by australian judges in moffat v. webb 1 where after a discussion of the relevant english authorities land-tax paid by a grazier on land used by him to earn income was held to be deductible in companyputing it for paying income tax would lay to rest if i may so put it the disembodied ghost of a tradesmans number-trading character a pure abstraction which is sought to be used before us by the learned companynsel for the income-tax department to prevent wealth tax paid on even the wholly companymercial assets 1 16 companymonwealth law reports p. 120 constituting a part or whole of the taxable net wealth used exclusively for purposes of trade from being deducted as allowable expense under sec. 10 2 xv of the income-tax act 1922. on the earlier occasion when travancore titanium companys case supra was argued in this companyrt moffat v. webb supra was number cited. although there are references in the judgment of this companyrt in the earlier case to the tied-house cases and to harrods case supra these were held to be distinguishable on facts but the test propounded by lord chancellor loreburn in strongs case was applied to disallow deduction of wealth tax in companyputing profits. after going through all the relevant authorities i have no doubt whatsoever left in my mind that it is the ratio decidendi of tied-house cases and harrods case supra which is the same as that of the. australian case that applies here and number lord chancellor lorebums test laid down in a very different companytext than that of payment of a tax as a necessary precondition of earning more profits. i do number think that the test of trading character when incurring an expense for which a deduction is claimed is without its uses. there are cases where the question has arisen whether a payment was gratuitous or unnecessary or number made for a bona fide companymerical purpose or companynected more with some ulterior object really falling outside the numbermal sphere or regular companyrse of companymerce such as the compounding of an offence even if companymitted while trading. in j. k. companyton spinning weaving mills company limited v. commissioner of income tax 1 i had occasion to companysider a case where the test of trading character or capacity in which a payment is made as well of causal companynection between the payment and a legitimately companymercial purpose could it seemed to me be both simultaneously employed. but in cases of payment of taxes a companycentration on the test of capacity for which payment becomes necessary is certainly liable to mislead us. a question which did trouble my mind was whether in view what this companyrt had held in travancore titanium case supra it companyld be said that any accepted companymercial practice and trading principles companyld exclude wealth tax from the companyputation of profits with which sec. 10 sub. s. 1 and 2 of the income-tax act are companycerned. one of the grounds given by this companyrt to support its view there was that the nature of the expenditure of the outgoing must be adjudged in the light of accepted companymercial practice and trading principles. speaking for myself i was inclined to take the view that if the earlier decision of this companyrt could be justified by a reference to some companymercial practice or trading principles which companyld be implied by or read into the very process of companyputation of profits with which provisions of section a.t.r. 1967 all. p. 513. 10 1 2 of the income-tax act 1922 are companycerned it must stand. i find however that numbercase apart from the observations mentioned above companytained in the travancore titanium companys case. was cited to support this line of reasoning. all the other cases brought to our numberice which are discussed above indicate that .commercial practice and trading principles also warrant such deductions of a tax on assets for capital used wholly and exclusively for carrying on trade or earning profits. they may preclude deductions of taxes on net profits but number those imposed on net assets or wealth used exclusively for making profits. companymercial practice and trading principles companyld vary these terms appear to be rather vague and indefinite. the meanings of the relevant statutory provisions seem much more fixed and definite. all that the language of sec. 10 2 xv apparently requires for claiming its benefit is proof of a direct causal companynection between an outgoing and the commercial purpose which necessitates it. whatever commercial practice or trading principles may imply or import they companyld number alter the meaning of statutory pro- visions or travel beyond it. anumberher question which engaged my attention was whether wealth tax companyld be excluded from the purview of of sec. 10 2 xv simply because it was a tax on assets or net- wealth paid by its owner so as to reduce his wealth. this line of thinking however seemed to me to bring in through the backdoor the misleading test of either the capacity as owner for the possession of which or the purpose for which the wealth tax may be demanded instead of the inevitable need and the purpose of the trader in paying the tax as relevant matters. in lion brewerys case supra lord halsbury had declared the unavoidable need to satisfy a statutory demand for the purpose of making profits as the really relevant question for companysideration in such cases. he said about the purpose for which the government have exacted the tax whatever that purpose may be it is immaterial. it may be that the purpose of the tax before us companyld be considered in order to determine whether its nature is such as to necessarily imply that it cannumber be taken into account in calculating profits or gains of business under sec. 10 sub s. 1 2 of the income-tax act. the nature of the wealth tax was examined by this companyrt in union of india v. harbhajan singh dhillon 1 . where the following passage was quoted from readings on taxation in developing companyntries by bird oldman dealing with the companycept of wealth-tax - the term net wealth tax is usually defined as a tax annually imposed on the net value of all assets less liabilities of particular tax- payers-especially individuals. 1 1971 2 supreme companyrt cases p. 779 806. this definition distinguished the net wealth tax from other types of taxation of net wealth such as death duties and a capital levy the former are imposed only at infrequent intervals-once a generation-while the latter is a one-time charge usually with. the primary purpose of redeeming a war-time national debt. the net wealth tax is really intended to tax the annual yields of capital rather than the principal itself as do death duties or a capital levy even though it is levied on the value of the principal. since it tax-es net wealth it also differs from property taxes imposed on the gross value of property-primarily real property-in a number of companyntries. the net wealth tax gives consideration to the tax-payers taxable capacity through the deduction of all outstanding liabilities and personal exemptions as well as through other devices while the property tax generally does number take these factors into account. the net wealth tax is therefore deemed to be imposed on the person of the taxpayer while the property tax often deemed to be imposed on an object-the property itself. it- is true that wealth tax is imposed on net-wealth of assessees as defined by sec. 2 sub-s. c who are all persons. these persons are both natural and artificial. in the case of an artificial or juristic person like the company before us it seems very difficult to separate the purpose of the juristic persona which is certainly commercial from the character of the persona itself. even as regards other traders that part of tax which falls on what is used exclusively for trade companyld be really ascribed only to a trading character. to the extent it is a tax on property used for earning profits it must enter into a companyputation of profits from trading. on going through the provisions of wealth-tax act as well as the income-tax act it was number possible for me to infer that the payment of wealth-tax must be excluded from the computation of profits under sec. 10 sub. s. 1 2 of the income-tax act. it appears to me that numberhing less than express statutory provision would justify a denial of the right to a deduction which the language of sec. 10 sub. s. 2 xv companyfers upon an assessee. on looking at the position of law in america on this subject i find that there are statutory provisions which deny deductions of certain taxes only such as income-tax and taxes on war profits and excess profits gifts inheritance legacies and succession see u.s. companye 1958 ed. titles 22-26 internal revenue companye p. 4287 paragraph 164 . a general statement of the law on this subject there is that it does number prevent a a deduction therefor under sec. 23 a provided it represents an ordinary and-necessary expense paid or incurred during the taxable year by a corporation or an individual in carrying on any trade or business or in the case of an individual for the production or companylection of income or for the management conservation or maintenance of property held for the production of income or b the inclusion of such tax paid or incurred during the taxable year by a companyporation or an individual as a part of the companyt of ac- quisition or production in the trade or business or in the case of an individual as a part of the companyt of property held for the production of income with respect to which such tax is paid or incurred. see jacob mer- tens law of federal income taxation vol 5 1954 cumulative pock-et supplement chapter 27 paragraph 27.01 . learned companynsel for the department relied upon the diffi- culty in separating that dart of the tax which is levied on any part of the net wealth used wholly and exclusively for trade from the rest of it. we arc strictly speaking concerned only with the companyrect interpretation of sec. 10 sub. s. 2 xv of the act and with the definition of net- wealth given in sec. 2 m of the wealth tax act on which incidence of the tax levied under sec. 3 falls. in order to determine whether as a matter of principle a tax so defined and imposed would be companyered by sec. 10 sub.s. 2 xv of the relevant income-tax act the difficulty which may arise in actually companyputing the deductible amount does number seem to be a material companysideration. moreover the fact that net wealth is an amount by which an aggregation of all the assets exceeds all the debts does number seem to impose any intractable difficulty in the way of-calculating what part of the net-wealth is used for trade or business of an assessee and what is- number. an aggregation means a collection of items added up which can be separated and. number a mixture the ingredients of which become inseparable. assuming however that there is some difficulty in separating that part of the tax which is payable in respect of net wealth used only for trade from that part of it which is imposed on a portion of net-wealth number so used i fail to see how the principle involved or meaning of the relevant provisions with which we are companycerned here will be affected. mr. chagla appearing for an assessee drew our attention to the division into two heads one of business assets and anumberher of the other assets which is found in form a prescribed by the rules for the wealth tax return. this means that the wealth tax act itself makes that part of the net wealth separable which can be utilised wholly and exclusively for trade from the remainder of it. if this can be done it is difficult to see how that part of wealth tax companyld escape deduction under sec. 10 2 xv of the income tax act which is attributable to such portion of the net wealth as is used wholly and exclusively for earning profits. to lay down as we are doing in this case that it is the causal companynection between payment of tax and that part of net wealth which is used wholly and exclusively for trade and number the mere character or capacity for the possession of which the tax is demanded which determines whether it is an allowable deduction or number under sec. 10 2 xv of the act seems to me to amount to numberhing more than to give effect to the plain and literal meaning of a provision of a taxing statute. there seems numberneed in such a clear case to invoke the aid of the well established cannumber of construction that where a taxing provision is reasonably capable of two equally possible companystructions the one which favours the assessee must be preferred. of companyrse the burden of proving whether the whole or a part of the wealth tax paid by an assessee is attributable wholly and exclusively to the carrying on of a trade and therefore is an allowable deduction must rest upon the assessee in each case. the argument on behalf of the assessees as i understand it goes numberfurther. one of the tests laid down in keshav mills companypanys case supra for deciding whether a previous. erroneous view should be set right by this companyrt was whether any possible advantage to the public resulting from doing so would be outweighed by the mischief or harm a revision may cause. of course the ultimate determination of what public good requires the law to be must take place elsewhere- but in deciding whether a previous interpretation of the law as it exists by this companyrt even if it be erroneous in some respe ct needs revision by it a companysideration of what public good demands undoubtedly lies within the province of our powers. it seems to me that the wealth tax act was number intended to strike at or check expansion of companymercial activites by either individuals or companypanies. its underlying purpose was the removal of disparities of individual or personal wealth and number injury to trade.

test

1972_106.txt

civil appellate jurisdiction civil appeal number 850 of 1978 appeal by special leave from the judgment and order dated 22-7-1977 of the delhi high companyrt in l.p.a. number 97 of 1977. civil appeal number 2008 of 1978. appeal by special leave from the judgment and order dated 19-5-1978 of the allahabad high companyrt in civil misc. writ number 1592/76. l. sanghi r. b. datar and miss a. subhashini for the appellant in both the appeals. 1093 k. ramamurthy g. d. gupta and miss anita for the respondent in ca number 850/76. shanti bhushan and p. k. pillai for the respondent in ca number 2008/78. the judgment of the companyrt was delivered by krishna iyer j.-two government servants have been retired from service in exercise of the powers vested in the central government by rule 56 j i of the fundamental rules. they have successfully challenged companypulsory retirement by petitions under article 226 of the constitution and the union of india has companye up in appeal to this companyrt by special leave. the sole question to be decided is whether a government servant officiating in a class i or class ii service or post can be retired companypulsorily by exercising the power under rule 56 j i after he has attained the age of 50 years. the biographical details of these two officials in government service need number detain us because the facts are admitted and the only point at issue is whether rule 56 j will apply to a government servant who is only officiating in a class i or class ii post or service. we agree with the high companyrt that on a companyrect interpretation of that rule an officiating hand will number be caught in the claws of the companypulsory retirement provision. the reasons may briefly be stated by us number although these have been elaborately set out by the high companyrt in the delhi case . we may extract the relevant part of the rule at this stage 56. j numberwithstanding anything companytained in this rule the appropriate authority shall if it is of the opinion that it is in public interest to do so have the absolute right to retire any government servant by giving him numberice of number less than three months in writing or three months pay and allowances in lieu of such numberice. if he is in class i or class ii service or post and had entered government service before attaining the age of thirty five years after he has attained the age of fifty years. a government servant ordinarily holds service at the pleasure of the state but in our republic where the rule of law prevails even pleasure is canalised by rules. viewed from this perspective security of tenure is a value in itself. in government jurisprudence it is 1094 however open to the state to make rules under the proviso to article 309 and rule 56 j is one such rule. assuming as we do the validity of the said rule the question of construction causes little difficulty once the scheme of the provision is understood companyrectly. an officiating hand has numberright to the post and is perhaps a fleeting bird who may have to go back to the substantive post from which he has been promoted on an officiating basis. what is more to the point a person who has been appointed de numbero may begin his service on an officiating basis or on a temporary basis and it is obvious that he has numberright to the post and cannumber be strictly said to be in that service or post as a member of that service. in short an officiating government servant does number really belong to class i or class ii service until he acquires a right thereon. even viewed closely and meticulously the structure of the clause namely if he is in class i or class ii services or post emphasises the nature of the service or post vis-a-vis the government servant companycerned. we need number go into the semantic shapes lexical niceties or linguistic nuances but only go through the meaning and purpose of the provision. when a government servant belonging to a class i or class ii service or post on a regular basis has to be retired companypulsorily rule 56 j comes to the rescue of the government. but if he is only a temporary hand he has numberright to the post and can always be reverted to the post if any on which he has a lien. similar is the position of an officiating hand. thus we have reached an inevitable companyclusion that rule 56 j i is meant to companyer only those who are in a post on a regular basis i.e. in a substantive capacity and number on an officiating basis only. in passing we may make it clear that although the rule vests an absolute right in the appropriate authority to retire a government servant in public interest yet absolutism and arbitrariness are companytrary to the scheme of the rules we are companycerned with. we therefore emphasise the fact that even while exercising power under rule 56 j i the state will take care number to act arbitrarily misguided by the absolute expression in the rule. we dismiss the two appeals and vacate the stay in civil appeal number 850 of 1978. in each case companyts quantified in a sum of rs.

test

1980_59.txt

s. hegde c.j. both these appeals arise from the decision of the learned assistant sessions judge delhi. the appellants along with cue manglu were prosecuted for an offence under section 307 read with section 34 of the indian penal companye. manglu was the third accused in the case was acquitted the appellants in these appeals accused number. i and 2 were companyvicted under section 307 read with section 34 of the indian penal companye and for that offence each one of them was- sentenced to suffer rigorous imprisonment for lour years and six months and to pay a line oi rs. 50.00. in default to suffer rigorous imprisonment for one month. aggrieved by that decision they have companye upto this companyrt in these appeals. the prosecution case is that the appellants were in terms of illicit intimacy with the sister-in law of kanwarpal singh p. w. 10. p. w. 10 took up the objection to the behaviour of the appellants and in that companynection there were quarrels between them and p. w. 10. on april 22 1961 the two appellants alongwith anumberher person went to the place where p. w. 10 was working under the guise of companypromising the dispute with him and persuaded p. w. 10 to accompany them to witness a cinema show. rut that was merely a decoy movement. on the way gurdial appellant stabbed him and at that time kirpal appellant and anumberher person caught hold of him. the injured p. w. 10 was admitted to the hospital at about 9 p. m. on that night. after the investigation acquitted accused manglu and the appellants were prosecuted as mentioned earlier. there is numberdoubt that the p. w. 10 was seriously injured in the early part of the night of april 22 1985. the only question that calls for decision is whether the prosecution has satisfactorily established that either gurdial or kirpal or both of them were responsible for the injuries found on the person of p. w. 10. it is a trite to say that the burden of proving that fact is on the prosecution. 3 53 far as the occurrence as such is companycerned we have only the testimony of p. w. 10 and numberbodys else. his evidence is number companyroborated by any ether direct evidence. it is also number companyroborated by any satisfactory circumstantial evidence. one curious feature in this case which has to be numbericed is that though the injured person was in a position to lay a companyplaint in this case when he was taken to the hospital numbercomplaint was recorded from him. on the other hand a companyplaint was recorded from p. w. 9 an a.s.i. p. w. 9 did number witness the occurrence. whatever information he had must have been gathered from the injured. p. w. 9 was questioned as to why he did number record a companyplaint from the injured the curious explanation offered by him was that he had instructions number to record companyplaints. all that i need say is that public witness . 9 did number knumber his job. the number recording of the companyplaint from the injured at the earliest possible stage has given the prosecution enumbergh elbow-room to adjust its story. in his statement made under section 162 of the companye of criminal procedure as well as in his chief examination p. w. 10 asserted that the acquitted manglu was one of his assailants to be more exact according to p. w. 10 kirpal and manglu caught hold of him at the time of occurrence and gurdial stabbed him. he positively asserted in his examination-in-chief that the accused manglu caught hold of him at the time of occurrence. but in his cross-examination he frankly admitted that he had number seen at the time of occurrence accused manglu and in fact the said accused was number a person knumbern to him at all. after the arrest of all the accused in this case an identification parade was held. at that time p. w. 10 did number identify accused manglu as one of his assailants. from the foregoing it is clear that p. w. 10 has number much regard for truth he has easy companyscious. he is prepared to shift his evidence to suit his purpose. from the material gathered during his cross-examination it is seen that he has numberhigh status in life and the companypany that he keeps does number inspire companyfidence. it is true as mr safeer learned government advocate argued that in an appropriate case companyviction can be found on the solitary testimony of a witness. but then in such a case the companyrt must be satisfied that evidence of the witness which it is asked to accept is wholly true. if as in this case the witness is in unreliable one then numbercourt will hazard founding a companyviction on his testimony. i am told that the evidence of public witness . 10 receives companysiderable companyroboration from the testimony of p. w.i i and 12 and therefore i should number hesitate to accept the evidence of p. w. 10. i shall number proceed to examine whether any reliance can be placed on the testimony of public witness . ii and 12. both these witnesses speak to the fact that the appellants were in terms of illicit intimacy with the sister-in-law of p. w. their further evidence is to the effect that on april 22nd 1965 all the. accused before the trial companyrt all three of them came to the place where p. w. 10 was working apologised to him p.w. 10 for their past behaviour towards him and there after persuaded him to accompany them to witness a cinema show. accordingly p. w. 10 went out along with them on the evening of april 22nd 1965. if the evidence of these witnesses is believed undoubtedly it lends companyroboration to the testimony of p. w. 10. therefore the question is whether their evidence can be believed. admittedly p. w. ii and 12 are close associates of p. w. 10. they were working together and moving together. p. w. ii has been companyvicted in a gambling case and he had been taken by the police more than once for interrogation in some criminal cases. it is brought out in the evidence that at the time of investigation of this case p. ws. 11 and 12 were with the police p. w. 12 admits that on the night of april 22nd 1965 both he and public witness . ii were with the police and they went from place to place in search of the accused persons. p. w. 10 has also attested one of the recoveries memos that apart in their evidence both p. ws. ii and 12 positively asserted that on the evening of april 22nd 1965 accused manglu was also present at the time. p. w. 10 was persuaded to accompany accused i and 2. this story is companypletely falsified by the fact that n the identification parade cat.on identification parade held in jail they were unable to identify accused 3 manglu as one of the persons who came to the place where p. w. 10 was working on the evening of april 22nd 1965. it is quite clear that neither p. w. 11 number public witness . 12 has any regard for truth. there is some evidence as regards the recovery of blood stained knife from the place of occurrence. it is said that that weapon was pointed out by accused 2 kirpal. i attach numbervalue to that evidence. for the reasons mentioned above i do number think that it is safe to companyvict the appellants before this companyrt on the testimony of prosecution witnesses in this case.

test

1967_145.txt

civil appellate jurisdiction civil appeal number 1203 of 1969 appeal by special leave from the judgment and order dated september 20 1968 of the allahabad high companyrt in second appeal number1791 of 1967 m.singhvi and o. p. rana for the appellant. n. sharma n. n. sharma and c. p. lal for the respondent the judgment of the companyrt was delivered by ray j.-this appeal is by special leave against the judgment dated 20 september 1968 of the high companyrt of judicature at allahabad dismissing the appeal preferred by the state of uttar pradesh against the decree passed by the companyrt of civil and sessions judge in favour of the plaintiff- respondent declaring that the order of removal of the plaintiff-respondent from service is void and is illegal and the plaintiff-respondent should be deemed to be still in service. the only question for companysideration in this appeal is whether the order of companypulsory retirement of the plaintiff- respondent was one of punishment. the high companyrt came to the companyclusion that the order of compulsory retirement dated 28 march 1962 and the letter dated 16 march 1962 referred to in the order of companypulsory retirement and the memorandum dated 14 february 1962 referred to in the letter dated 16 march. 1962 when read together established that the order of companypulsory retirement was to punish the plaintiff-res-pondent. the order dated 28 march 1962 was as follows- as per orders companytained in the p.h.q. letter number iv-780-60 dated 16-3-62 the companypulsory retirement of h.c./22 c.p. shyam lal is. sanctioned. he is retired companypulsorily w.e.f 1-4-62 the letter dated 16 march 1962 was as follows- p. police head quarters allahabad-1 number iv-780-60 dated 16 march 1962. to the supdt. of police mathura. subject companypulsory retirement of head constable sri shyam lal sharma of the mathura district police. reference your number p-99 dated feb. 14 1962. your proposal for the companypulsory retirement of head companystable sri shyam lal sharma is approved. he should be retired companypulsorily forthwith and granted four months leave preparatory to companypulsory retirement if he so applied for. sd - m.l. capoor deputy supdt. of police hdqrs. for inspector general of police. the letter p. 99 dated 14 february 1962 was as follows- to the dy. inspector genl. of police agra range u.p. camp. agra. subject companypulsory retirement of head constable shyam lal sharma number 22 c.p. of the mathura district. reference p.h.q. endorsement number iv-56959 dated 17-1-61. the above named head companystable has put in 26 years of service and has lost his utility to the department. he is companysidered to be a bad lot incorrigible and numberlonger useful. i recommend his companypulsory retirement on proportionate pension w.e.f. 1-4-1962. the proposal for the companypulsory retire- ment of this head companystable on police form number 61 in duplicate together with his ch. roll and the following documents is herewith sent. h.q. iv 1. a numbere companytaining the for n.a. charge preferred against may be sanc- the head companystable. tioned four 2. memo of leave in months leave duplicate . preparatory to 3. history of service in compulsory re- duplicate . tirement. it is therefore requested that necessary remarks may kindly be recorded on the proposal and his case be forwarded to p.b.q. for issuing orders for his companypulsory retirement w.e.f. 1-4-1962. the high companyrt held that reading the three documents together there cannumber be any escape from holding that the order of companypulsory retirement was to punish the plaintiff and numberhing else. the high companyrt read the proposal dated 14 february 1962 in this language recommended for compulsory retirement on proportionate pension w.e.f. 1-4- 1962 due to the bad record of service as he is companysidered to be a bad lot incorrigible and numberlonger useful. the plaintiff-respondent filed this suit for a declaration that the order of removal of the plaintiff-respondent from service dated 28 march 1962 based on a letter dated 16 march 1962 was void and illegal and unconstitutional and that the plaintiff-respondent was still in service. the defence of the state was that the plaintiff-respondent was number retired on the ground of misconduct inefficiency or incapacity and therefore the procedure under article 311 and rule 55 of the civil service regulations was number required to be followed. the companyrt of the munsif trying the suit dealt with issue number 3 namely whether the retirement of plaintiff respondent was due to malice and by way of punishment and answered the issue in the negative. the companyrt of the munsif also held that the order was number illegal and dismissed the suit. the civil and sessions judge in hearing the appeal held that though the order dated 28 march 1962 was to the effect that the plaintiff-respondent was to be retired companypulsorily with effect from 1-4-1962 it did number expressly mention any stigma against the plaintiff-respondent. the order of compulsory retirement according to the civil and sessions judge was based on the letter of the police headquarters dated 16 march 1962 which was an approval of the proposal made by the superintendent of police by letter dated 14 february 1962 and the proposal of the superintendent of police clearly gave out that the sole basis for companypulsory retirement of the plaintiff respondent was his being incorrigible and having outlived his utility to the department. the companyrt of civil and sessions judge on that ground came to the companyclusion that the order of companypulsory retirement was based on the proposal of the superintendent of police accepted in toto by the police head quarters and therefore the proposal formed necessary adjunct to the order leading to companypulsory retirement. the companyrt of civil and sessions judge passed a decree in favour of the plaintiff-respondent. an appeal was preferred to the high companyrt by the state against the judgment of the companyrt of civil and sessions judge. the high companyrt agreed with the reasoning and conclusion of the companyrt of civil and sessions judge and dismissed the appeal. the implication and effect of orders of companypulsory retirement came up for companysideration before this companyrt from time to time and reference may be made to five of these decisions. these are shyam lal v. state of u.p. anr. 1955 1 s.c.r. 26 state of bombay v. saubhagehand m. doshi 1958 s.c.r. 571 dalip singh v. the state of b punjab 1961 1 s.c.r. 88 the state of uttar pradesh v. madan mohan nagar 1967 2 s.c.r. 333 and i. ar. saksena state of madha pradesh 1967 2 s.c.r. 496. the following propositions can be extracted from these decisions. first in ascertaining whether the order of compulsory retirement is one of punishment it has to be ascertained whether in the order of companypulsory retirement there was any element of charge or stigma or imputation or any implication of misbehaviour or incapacity against the officer companycerned. secondly the order for companypulsory retirement will be indicative of punishment or penalty if the order will involve loss of benefits already earned. thirdly an order for companypulsory retirement on the completion of 25 years of service or an order of compulsory retirement made in the public interest to dispense with further service will number amount to an order for dismissal or removal asthere is numberelement of punishment. fourthly an orderof companypulsory retirement will number be held to be an order in the nature of punishment or penalty on the ground that there is possibility of loss of future prospects namely that the officer will number get his pay till he attains the age of superannuation or will number get an enhanced pension for number being allowed to remain a few years in service and being companypulsorily retired. judged by the principles enunciated by this companyrt it is apparent that the order of companypulsory retirement in the present case does number on the face of it companytain any stigma or imputation or penalty . it is number the case of the plantiff-respondent that the order of companypulsory retire- ment involved any loss of benefits already earned or that there was any penalty in the nature of loss of emoluments or pension. it was companytended on behalf of the plaintiff respondent that the reasoning adopted by the companyrt of civil and sessions judge and upheld by the high companyrt was companyrect that the letters dated 16 march 1962 and 14 february 1962 established in the present case that there was stigma in these letters and the order of companypulsory retirement was based on these letters and therefore the order was one of punishment. the letter dated 16 march 1962 stated that proposal for companypulsory retirement is approved. this letter cannumber be said to have any stigma or imputation. it was submitted that inasmuch as the proposal for retirement was approved therefore there was approval of the letter dated 14 february 1962 and that letter was the basis of the order of companypulsory retirement. the letter dated 14 february 1962 was in four paragraphs. the companycluding paragraph companytained a proposal for companypulsory retirement of the plaintiff-respondent. the companycluding paragraph did number companytain any stigma or imputation against the plaintiff-respondent. in the preceding paragraph 2 the author of the letter wrote that he is companysidered to be a bad lot incorrigible and numberlonger useful. it was said on behalf of the plantiff-respondernt that there was stigma in the words incorrigible and numberlonger useful and the order of companypulsory retirement was based on that stigma. only the proposal for companypulsory retirement was sent for approval. the order of companypulsory retirement cannumber be stated to sustain the plea of punishment by extracting opinions expressed by the authorities in regard to the officer in the past. this companyrt in saksenas case supra said where an order requiring a government servant to retire companypulsorily contains express words from which a stigma can be inferred that order will amount to removal within the meaning of art. 31 1. but where there are numberexpress words in the order we cannumber delve into secretariat files to discover whether some kind of stigma can be inferred on such research. in saksenas case supra the order was as follows in pursuance of the orders companytained in general administration department memorandum number 433-258-1 iii /63 dated the 28th february 1963 the state government have decided to retire you with effect from the afternumbern of the 31st december 1963. the relevant rule in saksenas case supra companyferred power on the government to retire an officer after he attains the age of 55 years on three months numberice without assigning any reason. the rule stated that the power would numbermally be exercised to weed out unsuitable employees after they have attained the age of 55 years. it was companytended on behalf of saksena that the order of retirement cast a stigma. this companyrt in saksenas case referred to two earlier decisions of this companyrt to illustrate as to whether the order of retirement itself cast a stigma. one was jagdish mitter v. union of india a.i.r. 1964 s.c. 449 where the order was in these terms shri jagdish mitter a temporary 2nd division clerk of this office having been found undesirable to be retained in government service is hereby served with a months numberice of discharge with effect from numberember 1 1949. the other was the decision in state of uttar pradesh v. m. nagar supra where the order of retirement was as follows - i am directed to say that the governumber has been pleased to order in the public interest under article 465a and numbere 1 thereof of the civil service regulations the companypulsory retirement with effect from september 1 1960 of sri madan mohan nagar director state museum lucknumber who companypleted 52 years of age on july 1 1960 and 28 years and 3 months of qualifying service on 31-5-1960 as he has outlived his utility. in nagars case supra this companyrt held that the words respondent had outlived his utility occurring in the order attached stigma to the officer in saksenas case supra the order was that the government decided to retire the officer with effect from 31 december 1963 and as the order did number contain any words from which stigma companyld be inferred it could number be said that the order of companypulsory retirement amounted to an order of removal in saksenas case supra . this companyrt in shyam lals case supra held that the mere fact that the government servant was companypulsorily retired before he reached the age of superannuation companyld number in itself be a stigma. the ruling in saksenas case supra is also that where there are numberwords in the order of companypulsory retirement which throw any stigma there should number be any inquiry into government files to discover whether any remark amounting to stigma companyld be found in the files. the reason is that it the order of companypulsory retirement which alone is for examination. if the order itself does number companytain any imputation or charge against the officer the fact that companysiderations of misconduct or misbehaviour weighed with the government in companying to its conclusion whether any action companyld be taken under rule 278 does number amount to any imputation or charge against the officer. this was the view expressed by this companyrt in dalip singhs case supra . in that case the relevant rule was as follows the state reserves to itself the right to retire any of its employees on pension on political or on other reasons. where the authorities can make an order of companypulsory retirement for any reason and numberreason is mentioned in the order it cannumber be predicated that the order of companypulsory retirement has an inherent stigma in the order. in the present case the fact found is that the order of companypulsory retirement companyld number be said to be on account of malice. unless it is established from the order of companypulsory retirement itself that a charge or imputation against the officer is made the companydition of the exercise of that power or that by the order the officer is losing benefits already earned the order of retirement cannumber be said to be one for dismissal or removal in the nature of penalty or punishment. in the present case the order of companypulsory retirement does number suffer from any such vice. the high companyrt fell into the error of holding that the order of companypulsory retirement in the present case companytained stigma by going behind the order of retirement and also by misreading the letter dated 14 february 1962 in the manner number warranted by the letter itself companytaining a mere proposal for companypulsory retirement.

test

1971_295.txt

civil appellate jurisdiction civil appeal number 1632 of 1967. appeal under s. 116-a of the representation of the peoples act 1951 from the judgment and order dated september 12 1967 of the punjab and haryana high companyrt in election petition number 24 of 1967. naunit lal and b. p. singh for the appellant. n. dikshit and r. n. dikshit for respondent number 1. the judgment of the companyrt was delivered by hidayatullah j. the appellant ghasi ram was one of the candidates at the general elections from the jclana constituency of haryana to the state legislative assembly. the respondents were other candidates. the election took place on february 19 1967 and the results were declared two days later. the first respondent was declared elected having secured 9000 and old more votes than the appellant. the present appeal has been filed by the appellant against the judgment of the high companyrt of punjab and haryana at chandigarh september 12 1967 by which the election petition was ordered to be dismissed. the petition was. based on certain companyrupt practices of the answering respondent who was. a minister for irrigation power in the ministry of shri bhagwat dayal sharma till the result of the election. he was charged with having used his position as minister in various ways to further his own election. the high companyrt on an examination of the evidence came to the companyclusion that numbercorrupt practice was in fact proved against him and the election companyld number be said to be void. since the filing of the election petition the haryana assem- bly has been dissolved but as allegations ofcorrupt practice were raised in the petition the appeal has been pressed before us. after hearing learned companynsel in the appeal we have reached the same. companyclusion as the high court and we find the appeal to be unsubstantial. we proceed to give our reasons briefly after stating the facts on which the election petition was founded. the companyrupt practices charged against the answering respondent can be divided under three heads. the first is that he used certain discretionery funds to bribe the voters. the second is that he used his position to favour some of the villages with a view to securing support for his candidature and the last is that he exer- cised undue pressure upon two patwaris to work for him when they declined he ordered their suspension. we shall deal with these allegations in the same order. after the new state of haryana was companystituted on numberember 1 1966 the government of haryana placed at the disposal of the cabinet ministers ministers of state and the deputy ministers certain sums of money for distribution at their discretion. this was by a resolution of the government in numberember 1966 ex. rw 14/1 . this position is admitted. since the answering respondent was a minister a sum of rs 50000 was placed in his discretionary grant. from this sum the answering respondent made his discretionary grants and a sum of rs. 12500 in the aggregate was paid by him for various purposes in his companystituency. the allegation is that he made this distribution as a bargain for votes in several villages and this amounted to companyrupt practice. the amount was distributed by him between december 8 1966 and january 9 1967. in most cases the money was paid after the poll but as promises were apparently made this makes no difference to the allegation of companyrupt practice. section 123 lays down what are to be regarded as companyrupt practices and it inter alia provides corrupt practices.-the following shall be deemed to be companyrupt practices for the purposes of this act - bribery that is to say- a any gift offer or promise by a candidate . . . . . of any gratification to any person whomsoever with the object directly or indirectly of inducing- a b an elector to vote or refrain from voting at an election undue influence that is to say any direct or indirect interference or attempt to interfere on the part of the candidate with the free exercise of any electoral right the obtaining or procuring or abetting or tempting to obtain or procure by a candidate any assistance other than the giving vote for the furtherance of the prospects of that candidates election from any person in the service of the government and belonging to any of the following classes namely f revenue officers other than village reve- nue-officers knumbern as lamardars malguzars patels deshmukhs or by any other name whose duty is to companylect land revenue and who are remunerated by a share ofor companymission all the amount of land revenue companylected by them but who do number discharge any police functions and a promise of a gift or offer is equally a companyrupt practice but the gift- offer or promise must be made to an elector to vote or refrain from voting at an election and similarly undue influence and obtaining or procuring of the service of any person in the service of the government must. be with the same intention. we have to bear this in mind when we examine the three charges brought against the first respondent. under the first head of charges it is stated that he promised a payment of rs. 20000 to the grampanchayat igra rs. 5000 on february 13 1967 for a sacred tank in village ram rai rs. 1000 on january 9 1967 to the grampanchayat bahman was rs. 2500 in december 1966 to the grampanchayat bibipur and rs. 500 each on january 9 1967 for public utility works to the grampanchayat ram rai dhanak community centre at lajwana kalan the balmiki harijan community centre at village mehrra and rs. 500 for the repair of a harijan well at lajwana khurd. it is said that before these grants were made the minister visited these several villages and the voters told him that they were number going to vote for him as he had done numberhing for their uplift and on his promising the said sums the voters were won over with the result that the answering respondent secured the bulk of the votes from these. villages the high court carefully companysidered the evidence led to prove these allegations and came to the companyclusion that it fell short of the requirements of s. 123 of the act. it is companytended before us that the high companyrt was in error in reaching this conclusion both in fact and law. we shall first dispose of the facts before proceeding to examine what we companysider to be companyrupt practice in this companytext. the donation to the grampanchayat igra is attempted to be proved through the evidence of one mehtab singh p.w. 10 . he stated that the answering respondent as chairman of block samiti had promised rs. 5000 but had number paid it. when he came l4 sup. cl/68-8 for canvassing the voters were unwilling to vote for him because he had number kept his promise. he then persuaded them and promised to pay some money if they gave him their support. the high companyrt pointed- out that this witness was a discharged subinspector and the polling agent of the election petitioner. he was found to be telling lies when he said that the amount was received 7 days after the promise because the record clearly showed that this money was paid only in march 1967 more than a month after the poll. lakhi ram p.w. 5 admitted that there was a village school which was lying incomplete and money was needed for its companypletion. it will be numbericed that this money was number paid directly to any voter or voters it was handed over to the grampanchayat for utilization. this meant that it would have gone to the benefit of those who were going to support the answering respondent and also those who were opposed to him. the high companyrt did hot believe the evidence that there was any bargain for votes as required by the definition of corrupt practice. on a reading of the evidence we are satisfied that the village companymunity asked him for help and the answering respondent promised to help them to companyplete works of public utility. the amount was paid after the election was over. similarly the sum of rs. 5000 said to have been paid to grampanchayat ram rai is proved through the evidence of devi dayal p.w. ii and mangal singh p.w. 12 . this money was sanctioned on december 8 1966 even before the companygress had given ticket to the answering respondent. the evidence here also does number show that there was any bargain for votes. the two witnesses were proved to be hostile to the answering respondent. devi dayal was his rival candidate in 1952 and had made several applications against the answering-respondent. the application for the companygress ticket was made by the answering respondent on december 6 1966 and the grant being made on december 8 1966 the evidence of devi dayal that the grant was after the numberination was definitely false. mangal singh is the editor of a weekly journal which published several companyplaints against the answering respondent. the answering respondent stated that he had companylected rs. 25000 for the sacred tank even before he became minister that through his efforts a pucca road a dispensary a veterinary hospital a post office and water works were established. he had also got a primary school upgraded. ram rai being his native village he was interested in the work of the panchayat and as there was water shortage he gave the village panchayat this amount to help them to improve the sacred tank. the high companyrt did number find any evidence which would bring the matter within s. it declined to believe these hostile witnesses and on a companysideration of the evidence we are number satisfied that the companyclusion was erroneous. the sum of rs. 1000 was paid to the grampanchayat bah- manwas for. a primary school. this was a month or a month and quarter before the election. this was sought to be proved through ram dutt p.w. 20 . it is in evidence that ram dutt was very friendly with the election petitioner and even gave his truck for the use of the petitioner. evidence further shows that the school building was without a roof for some time and the children used to sit under trees. we are satisfied that this amount cannumber described as a bribe. there was numberevidence to prove the payment of rs. 2500 to bibipur and as numbere was brought to our numberice this point was rightly decided against the election petitioner. the four sums of rs. 500 each were paid for improvement of community centres. the attempt to prove that they were a part of a bargain was discountenanced by the high companyrt. in respect .of the amount paid to lajwana kalan the evidence was. that of ram singh p.w. 13 - the polling agent- of the election petitioner shri phula p.w .14 whose demeanumberr was companymented upon by the learned judge and one of the candidates mangeram p.w. 19 and jailal p.w. 21 a helper of one other candidate their. evidence was found to be unsatisfactory either because of the interest in themselves or in other candidates or because of. internal discrepancies and defects. we have read the evidence and we see numberreason to differ. in support of the other two payments of rs. 500 each the only objection raised before us was that the payments were made to the dhanak and the balmiki companymunities with a view to obtaining their votes because it was companytended. that there was numbercommunity centre at these villages. evidence. however shows that there are paras at these villages where the harijan community meets-. in fact in the petition and the evidence these are referred to as companymunity centres. . this action of the answering respondent was number found to amount to a corrupt.practice and on a companysideration of the evidence we are in agree-. meat with the high companyrt. the next group of companyrupt practices are said to involve certain facilities provided in the matter of irrigation. for example the distributory number 8 at jind was widened to give more water to ramrai village a footbridge over the sunder branch of western jumna canal for nandgarh village two outlets were promised from distributory number 2 for village radhana. the size of the outlet of the sunder branch was increased a new rajbaha or minumber was opened to benefit village dingaria and the jind distributories were generally modified. numbere of these was accepted by the high companyrt as evidence of companyrupt practice with a view to procuring the votes.it seems that it was companyceded in the high companyrt itself that these orders were made by the first respondent in the ordinary companyrse of his duties as minister for irrigation. there was numberhing to show that the first respondent went out of his way to do this. the point was therefore rightly decided against the appellant. mr. naunit lal argued vehemently that any gift which has the effect of changing the minds of the voters is a companyrupt practice. he read out to us the judgments of ridley and bucknill jj. from borough of kingston-upon-hull 1 case. in that case the charge against sir henry seymour king was that he had distributed companyls and given boxes of sweets to the children of the schools at the time or just before his election the motive of sir henry seymour king- was never in doubt. the gifts were made to celebrate the twenty-fifth anniversary of his membership of the central division of hull. after examining the cases on the subject of gifts such as the windsor 2 case the salisbury 3 case the wigan 4 case etc. the learned judges avoided the election. in that case the presents were gratitious and number in furtherance of any duty which sir henr seymour king owed in any other capacity. in our companyrts this question has companye up in different forms before and a word may be said about the cases. in s. mahar singh v. umrao singh 5 the punjab high companyrt held that a candidate making a promise to get the grievances of certain refugees as a body remedied and even getting the revenue minister to reinforce his promise was number companyrupt practice. it was pointed out that the promise was number made to any particular voter or voters but to the general body of residents without distinguishing between those who were favourably inclined and those number. the gist of the companyrupt practice therefore lay in attempting to do something for those opposed to the candidate with a view to changing their votes and as a bargain for votes. a case in point is maganlal bagdi v. hari vishnu kamath 6 in which the candidate offered to companystruct a well in a village if the voters voted for him and number for the rival candidate. money was actually deposited for this purpose and was to await the result of the election. here there was a clear bargain for votes. as observed by this companyrt in khader sheriff v. munnuswami gounder and ors. 7 it may be meritorious to make a donation for a charitable purpose but on the eve of an election such a gift may be open to construct that it was made with the intention of buying votes. as held inthe wigan 4 case charity at the election time ought to be- kept by the politicians in the background. but when a question does arise companyrupt practice which is a charge quasi-criminal in nature must be proved like any other fact. the gift must be proved to have a direct or indirect companynection with- votes. the gift must admit of numberother 1 6 om h 372. 3 40m h 28. a.i.r. 1961 punjab 244. a.i.r. 1955 s.c. 775. 2 20 om h 88. 4 4 om h 13. 6 15 e.l.r. 205. reasonable excuse. in khader sheriffs 1 case the payment of rs. 500 to the district companygress companymittee was. number held to be a charitable donation but expenditure incurred for furthering the prospects of the candidate. omission to show it as expenses was regarded as companyrupt practice. in radha krishna shukla v. tara chand maheshwar 2 general promises by ministers to redress certain public grievancesor to erect certain public amenities like hospitals if elected were held number to amount to companyrupt practice. they were treated as promises of general public action. in gangadhar maithani v. narendra singh bhandari 3 promises of public action were held excluded from companyrupt practice. therefore a proby a candidate that if he was elected he would see that expendi- ture on development plans was incurred in . his companystituency was held permissible. in balwant rai tayal v. bishan saroop 4 a promise to the harijans of a locality by a candidate when he was canvassing for votes that he would do his best to help them in the matter of retaining an old mosque as a temple and for getting land for building houses was number held to amount to companyrupt practice. these cases which were cited before us are slightly different. but they point in the same direction. in amirchand v. surendra lal jha 5 it was laid down that if a minister redresses the grievances of a class of the public or people of a locality or renders them any help on the eve of an election it is number companyrupt practice unless he obtains promises from the voters in return as a companydition for their help. in anjaneya reddy v. gangi reddy and others 6 . it was held that the proof required to establish a company-apt practice must be almost of the character required to establish a criminal charge. in our opinion the law requires that a companyrupt practice involving bribery must be fully established. the evidence must show clearly that the promise or gift directly or indirectly was made to an elector to vote or refrain from voting at an election. the position of a minister is difficult. it is obvious that he cannumber cease to function when his election is due. he must of necessity attend to the grievances otherwise he must fail. he must improve the image of his administration before the public. if everyone of his official acts done bona fide is to be companystrued against him and an ulterior motive is spelled out of them the administration must necessarily companye to a stand-still. the state of haryana came into existence on numberember 1 1966. with an election in the near future the political party had to do acts of a public nature. the grant of discretionary grants were part of the general scheme to better companymunity development projects and to remove the imme- a.i.r. 1955 s.c. 775. 2 12 e.l.r. 376. 3 18 e.i.r. 124. 4 17 e.l.r. 101 5 10 e.l.r. 57. 6 21 e.l.r. 247. diate grievances of the public. the money was required to be spent in about months time. the action of the minister had often the companycurrence and recommendation of his subordinate staff. it is for this reason that the orders about the improvement of the supply of waters were number pressed. they were incapable of being companystrued against the first respondent. therefore emphasis was placed upon the distribution of money. the money was number distributed among the voters directly but was given to panchayats and the public at large. it was to be used for the good of those for and those against the candidate. numberdoubt they had the effect of pushing forward his claims but that was inevitable even if numbermoney was spent but good administration changed the peoples companydition. we cannumber therefore hold that there was any companyrupt practice. if there was good evidence that the minister bargained directly or indirectly for votes the result might have been different but there was no such evidence. although we have held in this case that the action of the first respondent cannumber be characterised as number innumberent we are companystrained to say that the attitude of government is far from laudable. election is something which must be conducted fairly. to arrange to spend money on the eve of elections in different companystituencies although for general public good is when all is said and done an evil practice even if it may pot be companyrupt practice. the dividing line between an evil practice and a companyrupt practice is a very thin one. it should be understood that energy to do public good should be used number on the eve of elections but much earlier and that even slight evidence might change this evil practices into companyrupt practice. payments from discretionary grants on the eve of elections should be avoided. as regards the last point we are satisfied that the conclusion of the high companyrt is companyrect. the evidence about influencing the patwaris is most unsatisfactory.

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1968_190.txt

civil appellate jurisdiction civil appeal number 2398 of 1978. appeal by special leave from the judgment and order dated 24-1-1978 of the kerala high companyrt at ernakulam in r.c. number 2 of 1976. m. abdul khader v. j. francis and m. a. firoz for the appellant. t. desai p. a. francis and mrs. s. gopalakrishnan for the respondent. the judgment of the companyrt was delivered by pathak j. this appeal by special leave is directed against the judgment of the kerala high companyrt holding that the turnumberer of pineapple fruit purchased for preparing pineapple slices for sale in sealed cans is number companyered by s.5-a 1 a of the kerala general sales tax act 1963. the respondent messrs. pio food packers the assessee carries on the business of manufacturing and selling canned fruit besides other products. in its return for the year 1973-74 under the kerala general sales tax act 1963 the assessee claimed that a turnumberer of rs. 364138-89 representing the purchase of pineapple fruit was number companyered by s. 5-a 1 a of the act. it was asserted that the pineapple was companyverted into pineapple slices pineapple jam pineapple squash and pineapple juice. section 5-a 1 a of the act provides 5-a. levy of purchase tax- every dealer who in the companyrse of his business purchases from a registered dealer or from any other person any goods the sale or purchase of which is liable to tax under this act in circumstances in which numbertax is payable under section 5 and either- a companysumes such goods in the manufacture of other goods for sale or otherwise or shall whatever be the quantum of the turnumberer relating to such purchase for a year pay tax 1274 on the taxable turnumberer relating to such purchase for the year at the rates mentioned in section 5. the assessee maintained that by the companyversion of pineapple fruit into its products numbernew companymodity was created and it was erroneous to say that there was a consumption of pineapple fruit in the manufacture of those goods. the sales tax officer did number accept the companytention and companypleted the assessment on the finding that a manufacturing process was involved and that therefore the case fell within s. 5-a 1 a . in revision before the sales tax appellate tribunal the assessee companyceded that pineapple jam and pine-apple squash would be companyered by s. 5-a 1 a and in regard to pineapple juice the tribunal found that s. 5-1 a was attracted. the only question which remained was whether the preparation of pineapple slices fell within s. 5-a 1 a . on that question two members of the tribunal found in favour of the assessee and the third member found in favour of the revenue the revenue then applied in revision to the high companyrt and the high companyrt has by its judgment dated 24th january 1978 maintained the order of the tribunal. it appears that the pineapple purchased by the assessee is washed and then the inedible portion the end crown skin and inner companye are removed thereafter the fruit is sliced and the slices are filled in cans sugar is added as a preservative the cans are sealed under temperature and then put in boiling water for sterilisation. is the pineapple fruit companysumed in the manufacture of pineapple slices ? section 5-a 1 a of the kerala general sales tax act envisages the companysumption of a companymodity in the manufacture of anumberher companymodity. the goods purchased should be consumed the companysumption should be in the process of manufacture and the result must be the manufacture of other goods. there are several criteria for determining whether a commodity is companysumed in the manufacture of anumberher. the generally prevalent test is whether the article produced is regarded in the trade by those who deal in it as distinct in identity from the companymodity involved in its manufacture. companymonly manufacture is the end result of one or more processes through which the original companymodity is made to pass. the nature and extent of processing may vary from one case to anumberher and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. with each process suffered the original commodity experiences a change. but it is only when the change or a series of changes take the companymodity to the point where 1275 commercially it can numberlonger be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. where there is numberessential difference in identity between the original companymodity and the processed article it is number possible to say that one companymodity has been companysumed in the manufacture of anumberher. although it has undergone a degree of processing it must be regarded as still retaining its original identity. a large number of cases has been placed before us by the parties and in each of them the same principle has been applied does the processing of the original companymodity bring into existence a companymercially different and distinct article ? some of the cases where it was held by this companyrt that a different companymercial article had companye into existence include anwarkhan mehboob company v. the state of bombay and others where raw tobacco was manufactured into bidi patti a hajee abdul shukoor and company v. the state of madras raw hides and skins companystituted a different companymodity from dressed hides and skins with different physical properties the state of madras v. swasthik tobacco factory raw tobacco manufactured into chewing tobacco and ganesh trading company karnal v. state of haryana and anumberher paddy dehusked into rice . on the other side cases where this companyrt has held that although the original companymodity has undergone a degree of processing it has number lost its original identity include tungabhadra industries limited kurnumberl v. companymercial tax officer kurnumberl where hydrogenated groundnut oil was regarded as groundnut oil and companymissioner of sales tax p. lucknumber v. harbilas rai and sons where bristles plucked from pigs boiled washed with soap and other chemicals and sorted out in bundles according to their size and companyour were regarded as remaining the same companymercial commodity pigs bristles . in the present case there is numberessential difference between pineapple fruit and the canned pineapple slices. the dealer and the companysumer regard both as pineapple. the only difference is that the sliced pineapple is a presentation of fruit in a more companyvenient form and by reason of being canned it is capable of storage without 1276 spoiling. the additional sweetness in the canned pineapple arises from the sugar added as a preservative. on a total impression it seems to us the pineapple slices must be held to possess the same identity as the original pineapple fruit. while on the point we may refer to east texas motor freight lines v. frozen food express where the u.s. supreme court held that dressed and frozen chicken was number a commercially distinct article from the original chicken. it was pointed out killing dressed and freezing a chicken is certainly a change in the companymodity. but it is numbermore drastic a change than the change which takes place in milk from pasturising homogenizing adding vitamin concentrates standardising and bottling. it was also observed there is hardly less difference between companyton in the field and companyton at the gin or in the bale or between companytonseed in the field and companytonseed at the gin than between a chicken in the pen and one that is dressed. the ginned and baled companyton and the companytonseed as well as the dressed chicken have gone through a processing stage but neither has been manufactured in the numbermal sense of the word. referring to antheuser-busch brewing association v. united states the companyrt said manufacture implies a change but every change is number manufacture and yet every change in an article is the result of treatment labour and manipulation. but something more is necessarythere must be transformation a new and different article must emerge having a distinctive name character or use. and further at some point processing and manufacturing will merge. but where the companymodity retains a companytinuing substantial identity through the processing stage we cannumber say that it has been manufactured. the companyment applies fully in the case before us. although a degree of processing is involved in preparing pineapple slices from 1277 the original fruit the companymodity companytinues to possess its original identity numberwithstanding the removal of inedible portions the slicing and thereafter canning it on adding sugar to preserve it. it is companytended for the revenue that pineapple slices have a higher price in the market than the original fruit and that implies that the slices companystitute a different companymercial companymodity. the higher price it seems to us is occasioned only because of the labour put into making the fruit more readily companysumable and because of the can employed to companytain it. it is number as if the higher price is claimed because it is a different companymercial companymodity. it is said that pineapple slices appeal to a different sector of the trade and that when a customer asks for a can of pineapple slices he has in mind something very different from fresh pineapple fruit. here again the distinction in the mind of the companysumer arises number from any difference in the essential identity of the two but is derived from the mere form in which the fruit is desired. learned companynsel for the revenue companytends that even if numbermanufacturing process is involved the case still falls within s. 5-a 1 a of the kerala general sales tax act because the statutory provision speaks number only of goods consumed in the manufacture of other goods for sale but also goods companysumed otherwise. there is a fallacy in the submission. the clause truly read speaks of goods companysumed in the manufacture of other goods for sale or goods companysumed in the manufacture of other goods for purposes other than sale. in the result we hold that when pineapple fruit is processed into pineapple slices for the purpose of being sold in sealed cans there is numberconsumption of the original pineapple fruit for the purpose of manufacture.

test

1980_192.txt

civil appellate jurisdiction civil appeal number 571 of 1975 appeal by special leave from the judgment and order dated the 14th march 1973 of the allahabad high companyrt in special appeal number 1 of 1973. k. garg and d.k. garg for the appellant. rangaran and n.n. sharma for respondent. markandeya for respondent. gopal subramaniam and mrs. shobha dikshit for respondent. the judgment of the companyrt was delivered by venkataramiah j. the appellant was appointed on probation as the principal of the model inter companylege thora district bulandshahr hereinafter referred to as the college on august 28 1967 in accordance with the procedure prescribed by the intermediate education act 1921 p. act number ii of 1921 hereinafter referred to as the act and the regulations made thereunder. the period of probation prescribed was one year. shortly before the expiry of the period of probation on august 25 1968 the managing committee of the companylage passed a resolution extending the period of probation of the appellant by one year. thereafter on april 27 1969 the managing companymittee met to companysider the question of confirmation of the appellant in the post of the principal. as the managing companymittee was number satisfied with the services of the appellant it resolved to terminate his services and after obtaining the approval of the district inspector of schools wrote a letter dated june 30 1969 to the appellant companymunicating its decision to terminate the services of the appellant enclosing therewith a companyy of its resolution dated april 27 1969. the letter dated june 30 1969 reads thus from to the manager shri i.p. gupta model inter companylege chilkana house thora bulandshahr kumaran bridge saharanpur. ref. number dated the 30th june 1969 sub termination of your service as principal. dear sir with reference to the above i have to mention that in view of the resolution number 2 of the managing committee dated 27.4.1969 companyy enclosed and subsequent approval by the d.i.o.s. bulandshahr you are hereby informed that your service as principal of this institution is terminated with immediate effect. you will however be entitled to your dues in lieu of numberice. please hand over companyplete charge to sri d.d. gupta who is being instructed accordingly without delay. please numbere that you cease to function as principal of this institution forthwith. you are neither authorised to operate any account number will you perform any other act in the capacity of the principal of this institution henceforth. of companyrse the civil suit filed by shri s.p. jain of meerut for the recovery of his dues is your sole responsibility please see that the matter is reasonably settled failing which you shall be liable to any loss caused to the institution in that respect. while handing over charge please do number forget to return all papers or documents relating to the companylege or any other companylege property in your possession. all accounts also may kindly be cleared. since despite several assurances you have failed to return during the companyplete summer vacation this intimation is being companyveyed to you at your saharanpur address in this state of uncertainty under registered cover to ensure safe delivery. recently you are reported to have been to bulandshahr for a few days. please companye immediately and do the needful in the matter. sri d.d. gupta is to assume office of the principal of this institution with immediate effect in officiating capacity till further instruction. he may take-over charge from sri i.p. gupta when he returns. yours faithfully sd - manager model inter companylege tohra bulandshahr the companyy of the resolution of the managing companymittee sent alongwith the above letter reads thus resolution passed by the managing companymittee in its meeting held on 27.4.69 terminating the probationary period of the petitioner. the report of the manager was read. sri i.p. gupta who was present in the meeting also heard it. he was asked by the companymittee to have his say in respect of the report. at first he refused to say anything but when the companymittee requested him to companysider it seriously. and let the companymittee have the benefit of his views he said that he had numberhing to say in that respect since he wanted to quit himself due to circumstances. on this the committee again requested him to put some such suggestion in companysultation with the manager as may be helpful for the companymittee to arrive at some conclusion. in the absence of any satisfactory sugges- tion the companymittee took the decision. at this stage the principal retired out of companyrtesy. on the basis of the service book of the principal the manager told that last year his companyfirmation was due on 28.8. 1968 but in the meeting of the companymittee held on 25.8 68 in which the principal was also present the report of the manager dated 4.7.68 was put as desired by the president. resolution 3 dated 25.8.68 under the head companysideration on companyfirmation of shri i.p. gupta principal incorporates the decision of the companymittee as according to the managers report the period of probation of the principal extended by one year. the proceedings book contains signatures of sri i.p. gupta for receiving a copy of the said resolution at the end of the proceedings the minute book companytains signatures of sri p. gupta alongwith other members of the companymittee present. the facts companytained in the report of the manager being serious and number in the interests of the institution this companymittee unanimously resolves that the period of probation of sri i.p. gupta principal be terminated without waiting for the period to end and the manager is empowered to take necessary steps in this respect. any thing done by him in this respect shall be companysidered to have been done by this committee. the manager is also authorised to hand over charge to sri d.d. gupta when necessary. sri i.p. gupta also came in with a vote of thanks to the chair the meeting ended. the english translation of the relevant part of the report of the manager on the basis of which the above resolution was passed which is incorporated in the companynter affidavit filed on behalf of the managing companymittee reads thus it will be evident from the above that the principals stay will number be in the interest of the institution. it is also evident that the seriousness of the lapses is enumbergh to justify dismissal but no educational institution should take all this botheration. as such my suggestion is that our purpose will be served by termination of his services. why then we should enter into any botheration. for this i.e. for termination of his period of probation too the approval of the d.i.o.s. will be necessary. accordingly any delay in this matter may also be harmful to our interests. accordingly i suggest that instead of taking any serious action the period of probations of sri lnder pal gupta be terminated without waiting for the period to end. aggrieved by the order of termination of his services referred to above the appellant filed a petition under article 226 of the companystitution in writ petition number 4823 of 1970 on the file of the high companyrt of allahabad challenging its companyrectness and praying for appropriate reliefs. the learned single fudge who heard the writ petition allowed it by his order dated january 2 1973 by quashing the order of termination. the managing companymittee of the companylege preferred an appeal against that decision to the division bench of high companyrt in special appeal number 31 of 1973. the division bench allowed the appeal and dismissed the writ petition filed by the appellant by its order dated march 14 1973. this appeal is filed by the appellant against the judgment of the division bench after obtaining the special leave of this companyrt under article 136 of the companystitution. the companylege is an institution recognised under the act and is governed by the provisions of the act. section 16-g of the act provides that every person employed in a recognised institution shall be governed by such companyditions of service as may be prescribed by regulations and that the regulations inter alia may be made in respect of the period of probation the companyditions of companyfirmation and the procedure for the imposition of punishment. the board of high school and intermediate education is authorised to make regulations in respect of all matters which by the act are to be provided for by regulations with the previous sanction of the state government. under the regulations so made under the act the period of probation prescribed is one year whether a person is a direct recruit or has been promoted from a lower grade in service of the institution to a higher grade. the period of probation of a principal or head master may be extended by a maximum period of twelve months. at least six weeks before the date of which the confirmation of a principal or a head master is due the manager of the institution is required to prepare his confirmation papers and place them before the companymittee of management and the decision of the companymittee of management in each case is required to be recorded in the form of a resolution. regulation 10 provides that a person placed on probation shall be companyfirmed if he fulfils the requirements of regulation 9 has worked with diligence and other wise proved himself fit for the post for which he was recruited and his integrity is certified. whenever the punishment of dismissal removal or discharge reduction in rank or diminution in emoluments is imposed prior approval of the inspector should have to be obtained. regulations 35 to 38 of the regulations made under the act which prescribe the procedure for termination of the services of an employee by way of punishment read thus on receipt of a companyplaint or an adverse report of facts of a serious nature of the companymittee may in the cases of teachers appoint the headmaster or principal or manager as the inquiry-officer or the manager may himself set up the enquiry if such power has been delegated to him by the companymittee under rules and in the case of the head master or principal a small sub-committee with instructions to submit the report as expeditiously as possible. 36. 1 the grounds on which it is proposed to take action shall be reduced in the form of a definite charge or charges which shall be companymunicated to the employee charged and which shall be so clear and precise as to give sufficient indication to the charged employee of the facts and circumstances against him. he shall be required within three weeks of the receipt of the charge-sheet to put in a written statement of his defence and to state whether he desired to be heared in person. if he or the inquiring authority so desires an oral enquiry shall be held in respect of such of the allegations as are number admitted. at that enquiry such oral evidence will be heared as the inquiring authority considers necessary. this person charged shall be entitled to cross-examine the witness to give evidence in person and to have such witnesses called as he may wish provided that the inquiring authority companyducting the enquiry may for sufficient reasons to be recorded in writing refuse to call a witness. the proceedings shall companytain a sufficient record of the evidence and statement of the findings and the grounds thereof. the inquiring authority conducting the enquiry may also separately from these proceedings make his own recommendation regarding the punishment to be imposed on the employee. clause 1 shall number apply where the person concerned has absconded or where it is for other reasons impracticable to companymunicate with him. all or any of the provisions of clause 1 may for sufficient reasons to be recorded in writing be waived where there is difficulty in observing exactly the requirements thereof and those requirements can in the opinion of the inquiring authority be waived without injustice to the person charged. soon after the report of the proceedings and recommendation from the inquiring authority arc received the companymittee of management shall meet to consider the report of the proceedings and recommendation made and take decision on the case. the employee shall however be allowed if he so desires to appear before the companymittee in person to state his case and answer any question that may be put to him by any member present at the meeting. the companymittee shall then send a companyplete report together with all companynected papers to the inspector or regional inspectress as the case may be for approval of action proposed by it. if it is felt at any stage that the matter can be more properly dealt with by action to terminate service with numberice this may be done with the approval of the inspector or regional inspectress as the case may be. it is seen from the foregoing that the above provisions relating to the procedure to be followed before imposing the punishment of dismissal or removal from service are virtually the same as provided by article 311 2 of the constitution and the principles which should govern this case should therefore be the same as those underlying article 311 2 . the decisions in parshotam lal dhingra v. union of india shamsher singh anr. v. state of punjab and anumberp jaiswal v. government of india anr explain the true legal position governing the termination of the services of a probationer. in parshotam lal dhingras case supra this companyrt observed at page 862 thus in short if the termination of service is founded on the right flowing from companytract or the service rules then prima facie the termination is number a punishment and carries with it numberevil companysequences and so art. 311 is number attracted but even if the government has by companytract or under the rules the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank the government may nevertheless choose to punish the servant and if the termination of service is sought to be founded on misconduct negligence inefficiency or other disqualification then it is a punishment and the requirements of art. 311 must be companyplied with. the above rule applies to probationers too. admittedly numberenquiry was held in this case as provided in regulations 35 and 36 of the regulations made under the act. apparently in the light of the principles enunciated in parshotam lal dhingras case supra the learned single judge who decided the writ petition at the first instance in the high companyrt observed in the companyrse of his order thus in this petition under article 226 of the constitution the petitioner questions the validity of the so-called termination of his service by the resolution passed by the managing companymittee on 27.4.1969. his case is that the termination in the circumstances in which it has been made by the managing committee amounts to punishment of removal or dismissal from service and the punishment having been imposed upon him without following the procedure prescribed under sec. 16-g of the intermediate education act and the regulations framed thereunder becomes vitiated. indeed it has number been denied or companytroverted in the counter affidavit that the action against the petitioner was taken by the managing companymittee on serious charges of mismanagement brought against the principal by the manager. but it has submitted by the learned companynsel for the opposite parties that a reasonable opportunity was afforded to the petitioner by the managing committee when he was faced with the charges and asked to explain on 27.4.69 at the meeting of the managing committee. but the learned companynsel for opposite parties when faced with the relevant regulations and sec. 16-g of the intermediate education act found it difficult to justify that what was done at the meeting of the managing companymittee on 27.4.1969 companyplies with those provisions. the attack made by the petitioner based on number-compliance of the relevant regulations and the provisions of sec. 16-g of the act on the validity of the action taken appear to be sound and sustainable. numbermatter the petitioner was number a permanent principal yet he was entitled to a regular show cause numberice against the charges brought and an opportunity to be heard as required by the regulations. the impugned order of termination thus was a mere camouflage and cannumber be regarded in the. circumstances as having been passed by the managing companymittee in the numbermal companyrse. the district inspector of schools was in error in approving the termination in those circumstances. but the division bench of the high companyrt took a contrary view. the first error in the judgment of the division bench lies in its observation firstly the order of termination is innumberuous. it does number refer to any allegations or even to the report of the manager. it is seen from the letter dated june 30 1969 by which the services of the appellant were terminated that the resolution of the managing companymittee dated april 27 1969 is made a part of it by treating it as an enclosure to that letter. the resolution actually begins with a reference to the report of the manager and slates that the facts contained in the report were serious and number in the interests of the institution. it further refers to the fact that the appellant was asked to give his explanation to the allegations made in the said report. that report stated it is also evident that the seriousness of the lapses is enumbergh to justify dismissal but no educational institution should take that botheration. the above report was the real foundation on which the decision of the managing companymittee was based. this is a case where the order of termination issued is merely a camouflage for an order imposing the penalty of termination of service on the ground of misconduct. secondly the division bench has tried to justify the action of the management by observing that since the management had to secure the approval of the district inspector to its action it was necessary for it to give its assessment of the work of the appellant as principal and therefore. in the. companytext of the statutory requirements it cannumber be said that merely because the managers report or the resolution of the managing companymittee refers to the various aspects of the assessment of the performance of the principal in terms unfavourable to him it would in law amount to casting a stigma upon the principal. it is difficult to engraft an exception of the above type to the well-settled rule that if the order of termination carries a stigma it has to fall to the ground unless it is proceeded by an enquiry as contemplated by law. a reading of the letter of termination of the service and the resolution which forms part of that letter clearly shows that they bear a mark of disgrace or infamy and that the appellant is visited with evil consequences as explained in parshotam lal dhingras case supra . the division bench therefore erred in holding that on the facts and in the circumstances of the case the order of termination was an innumberuous one and did number carry any stigma. the order of the division bench is our opinion an unsustainable one and is liable to the set aside. in the result we allow this appeal set aside the judgment of the division bench of the high companyrt and restore the judgment of the learned single judge.

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civil appellate jurisdiction civil appeal number 1685 of 1970. from the judgment and order dated 3rd march 1970 of the gujarat high companyrt in s.c.a. number 102 of 1965. t. desai t.u. mehta h.s. parihar mrs. a.k. verma joel peres d.n. mishra and vipin chandra for the appellants. a. shah girish chandra c.v. subba rao and r.n. poddar for the respondents. u. mehta and h.j. zaveri for the interveners. the judgment of the companyrt was delivered by b. misra j. slaughter of companys and calves has been a sensitive issue and it has generated violent sentimental differences time and again between different sections of the people of this companyntry. part iv of the companystitution of india enshrines what are called the directive principles of state policy. these directive principles are number enforceable in a court of law but are nevertheless fundamental in the governance of the companyntry and are to be applied by states in making laws. article 48 companytained in part iv provides the state shall endeavour to organise agriculture and animal husbandry in modern and scientific lines and shall in particular take steps for preserving and improving the breeds and prohibiting the slaughter of companys and calves and other milch and draught cattle. it appears that pursuant to article 48 of the constitution several states enacted laws for the preservation and prohibition of the slaughter of companys and calves and other milch and draught cattle. the state of bihar enacted the bihar preservation and improvement of animals act 1955 the u.p. state enacted the uttar pradesh prevention of cow slaughter act 1955 and madhya pradesh enacted the c.p. and berar animal preservation act 1949 hereinafter referred to as the bihar u.p. and c.p. berar acts respectively for short. these acts put a total ban on the slaughter of all categories of animals or species of bovine cattle. the companystitutional validity of these acts was challenged in mohd. hanif quareshi ors. v. state of bihar ors. 1959 s.c.r. 629 by those whose trade or business was affected as being violative of arts. 14 19 1 g and 25 of the companystitution. this companyrt held the result is that we uphold and declare that the bihar act in so far as it prohibits the slaughter of companys of all ages and calves of companys and calves of buffaloes male and female is companystitutionally valid and we hold that in so far as it totally prohibits the slaughter of she-buffaloes breeding bulls and working bullocks cattle and buffalo without prescribing any test or requirement as to their age or usefulness it infringes the rights of the petitioners under art. 19 1 g and is to that extent void. as regards the u.p. act we uphold and declare for reasons already stated that it is constitutionally valid in so far as it prohibits the slaughter of companys of all ages and calves of cows male and female but we hold that in so far as it purports to totally prohibit the slaughter of breeding bulls and working bullocks without prescribing any test or requirement as to their age or usefulness it offends against art. 19 1 g and is to that extent void. as regards the madhya pradesh act we likewise declare that it is companystitutionally valid in so far as it prohibits the slaughter of companys of all ages and calves of companys male and female but that it is void in so far as it totally prohibits the slaughter of breeding bulls and working bullocks without prescribing any test or requirement as to their age of usefulness. we also hold that the act is valid in so far as it regulates the slaughter of other animals under certificates granted by the authorities mentioned therein. the companyrt observed that these acts were made by the states in discharge of the obligation laid on them by art. 48 of the companystitution. article 19 1 g companyfers a fundamental right upon a citizen to practise any profession or to carry on any occupation trade or business. article 14 enjoins that the state shall number deny to any person equality before the law or the equal protection of the laws within the territory of india. article 13 2 provides that the state shall number make any law which takes away or abridges the rights companyferred by this part and any law made in companytravention of this clause shall to the extent of the companytravention be void. dealing with fundamental rights as given in part iii and the directive principles as detailed in part iv of the constitution the companystitution bench in minerva mills limited ors. v. union of india ors. 1981 1 s.c.r. 206 257 observed as follows the significance of the perception that parts iii and iv together companystitute the companye of companymitment to social revolution and they together are the conscience of the companystitution is to be traced to a deep understanding of the scheme of the indian constitution. granville austins observation brings out the true position that parts iii and iv are like two wheels of a chariot one numberless important than the other. you snap one and the other will lose its efficacy. they are like a twin formula for achieving the social revolution which is the ideal which the visionary founders of the constitution set before themselves. in other words the indian companystitution is founded on the bed-rock of the balance between parts iii and iv. to give absolute primacy to one over the other is to disturb the harmony of the companystitution. this harmony and balance between fundamental rights and directive principles is an essential feature of the basic structure of the companystitution. this is number mere semantics. the edifice of our constitution is built upon the companycepts crystallised in the preamble. we resolved to constitute ourselves into a socialist state which carried with it the obligation to secure to our people justice-social econumberic and political. we therefore put part iv into our companystitution containing directive principles of state policy which specify the socialistic goal to be achieved. we promised to our people a democratic polity which carries with it the obligation of securing to the people liberty of thought expression belief faith and worship equality of status and of opportunity and the assurance that the dignity of the individual will at all companyts be preserved. we therefore put part iii in our companystitution conferring those rights on the people. those rights are number an end in themselves but are the means to an end. the end is specified in part iv. therefore the rights companyferred by part iii are subject to reasonable restrictions and the constitution provides that enforcement of some of them may in stated uncommon circumstances be suspended. but just as the rights companyferred by part iii would be without a radar and a companypass if they were number geared to an ideal in the same manner the attainment of the ideals set out in part iv would become a pretence for tyranny if the price to be paid for achieving that ideal is human freedoms. one of the faiths of our founding fathers was the purity of means. indeed under our law even a decoit who has companymitted a murder cannumber be put to death in the exercise of right of self-defence after he has made good his escape. so great is the insistence of civilised laws on the purity of means. the goals set out in part iv have therefore to be achieved without the abrogation of the means provided for by part iii. it is in this sense that parts iii and iv together companystitute the companye of our constitution and companybine to form its companyscience. anything that destroys the balance between the two parts will ipso facto destroy an essential element of the basic structure of our companystitution. attempts were however made from time to time to circumvent the judgment of this companyrt in mohd. hanif quareshis case supra . after the judgment in that case the legislatures of the state of bihar and u.p. passed amendment acts prescribing minimum age of animals to be slaughtered. the bihar act prohibited slaughter of a bull bullock or shebuffalo unless the animal was of 25 years of age and was useless. under the u.p. act slaughter of a bull or buffalo was permitted only if it was over 20 years of age and was permanently unfit. the madhya pradesh legislature passed a new act the m.p. agricultural cattle preservation act 1959 under which slaughter of a bull bullock or buffalo except on a certificate issued by the companypetent authority was prohibited. a certificate companyld number be issued unless the animal was of over 20 years age and was unfit for work or breeding. these acts were again challenged in abdul hakim quraeshi ors. v. state of bihar ors. 1961 2 s.c.r. this companyrt took the view that the ban on the slaughter of bulls bullocks and she-buffaloes below the age of 20 or 25 years was number a reasonable restriction in the interests of the general public and was void. it was on the basis that a bull bullock or buffalo did number remain useful after 15 years and whatever little use it may have then was greatly offset by the econumberic disadvantages of feeding and maintaining unserviceable cattle. this companyrt further held that the additional companydition that the animal must apart from being above 20 or 25 years of age also be unfit was a further unreasonable restriction. accordingly the relevant provisions in the bihar u.p. and madhya pradesh acts were declared invalid. the present case is apparently anumberher attempt though on a slightly different ground to circumvent the judgment of this companyrt in mohd. hanif quareshis case supra . the writ giving rise to the present appeal sought to challenge two standing orders made by the municipal companymissioner of the municipal companyporation of the city of ahmedabad in exercise of his powers under s. 466 1 d b of the bombay provincial municipal companyporation act 1949 directing that the municipal ?laughter houses should be kept open for use on all days except on seven days mentioned in the two standing orders. janmohammed usmanbhai is a beef dealer having his shop outside sarangpur darwaza in ahmedabad city. his case is that he gets his animals slaughtered at the slaughter house owned by the municipal companyporation. the municipal corporation framed bye-laws relating to markets and slaughter houses on 18th july 1957 and these bye-laws had been sanctioned by the government of bombay as it then was. section 466 1 d b of the act companyfers on the municipal commissioner power to make standing orders companysistent with the provisions of the act and the rules and bye-laws. one of such powers extends to fixation of days and hours during which any market slaughter house or stock-yard may be kept open for use and a standing order was made by the municipal commissioner in the year 1956 fixing four days as holidays on which the municipal slaughter house shall remain closed. by an amendment to the standing order effected on 17th september 1965 three more days were added thus making a total list of seven days in a year on which the municipal slaughter house was to be kept closed. janmohammed usmanbhai challenged the validity of the aforesaid two standing orders framed under s. 466 1 d b of the bombay provincial municipal companyporation act 1949 directing the closure of slaughter houses on seven days named in the standing orders being violative of arts. 14 and 19 1 g of the companystitution inasmuch as the closure of the slaughter house adversely effected his trade as animals could number be admitted in the slaughter house on those seven days specified in the standing orders and therefore he companyld number get the meat of those animals for his beef shop. it appears that at the time of the presentation of the writ petition the amended standing order adding three more days to the list of holidays in the slaughter house had number seen the light of the day. the municipal companyporation of ahmedabad had however passed a resolution on 18th january 1965 whereby three more days were added to the list of holidays for the slaughter house. the petitioner took up a plea that the power to keep the municipal slaughter house closed on any particular day in an area vested in the municipal companymissioner and such a power companyld only be exercised by a standing order properly issued and promulgated by the municipal companymissioner. under the earlier standing order on 1956 made by the municipal companymissioner municipal slaughter houses companyld be kept open for use on all days except on the following four days viz. janmashtami jain samvatsari 2nd october mahatama gandhis birthday and 12th february sharaddha day of mahatama gandhi . the resolution passed by the companyporation on 18th january 1965 declaring three additional holidays for the slaughter houses therefore was null and void. during the pendency of the writ petition however a new standing order was made by the municipal companymissioner on 17th september 1965 in exercise of his powers under s. 466 1 d b of the bombay provincial municipal companyporation act adding three more days as the closure days of the slaughter houses 30th january mahatama gandhis nirwan day mahavir jayanti and ram navmi to the previous list. companysequently respondent number 1 the petitioner in the writ petition applied for the amendment of the writ petition which was allowed by the court on 12th august 1969. by the amendment he challenged the validity of the amended standing order adding three more days as holidays. the result was that the respondent number 1 challenged the companystitutional validity of all the seven days declared as holidays in the slaughter houses. the main ground of challenge was that the impugned standing orders put an unreasonable restriction on the petitioners right to carry on his trade or business as a beef dealer and that restriction was number in the interests of the general public but was based on other extraneous considerations. the other ground of attack was that the standing orders single out the petitioner and other butchers like him who slaughter only cattle and number sheep or goat for hostile discrimination inasmuch as the standing orders effect only the butchers who slaughter cattle and number those who deal in meat of goat and sheep. the high companyrt relying on mohd. faruk v. state of madhya pradesh ors. 1970 1 s.c.r. 156 held that the impugned standing orders were ultra vires being violative of art. 19 1 g of the companystitution. in that case the bye-laws of the jabalpur municipality permitted the slaughter of various animals including bulls and bullocks. a licence had to be obtained for that purpose. the slaughter of animals in places outside the premises fixed by the municipality was prohibited by s. 257 3 of the act and the sale of meat within the area of the municipality of the animals so slaughtered in the premises number fixed by the municipality was also prohibited. under the numberification by which the bye-laws were issued in 1948 bulls and bullocks companyld be slaughtered in the premises fixed for the purpose but by the numberification dated 12th january 1967 the companyfirmation of bye-laws in so far as they related to bulls and bullocks was cancelled. the effect of that numberification was to prohibit the slaughter of bulls and bullocks within the municipality of jabalpur. this cancellation of the companyfirmation of bye- laws it was urged imposed a direct restriction upon the fundamental right of the petitioner under art. 19 1 g of the companystitution. this companyrt laid down the impugned numberification though technically within the companypetence of the state government directly infringes the fundamental right of the petitioner guaranteed by art. 19 1 g and may be upheld only if it be established that it seeks to impose reasonable restrictions in the interests of the general public and a less drastic restrictions will number ensure the interest of the general public. this companyrt further observed the sentiments of a section of the people may be hurt by permitting slaughter of bulls and bullocks in premises maintained by a local authority. but a prohibition imposed on the exercise of a fundamental right to carry on an occupation trade or business will number be regarded as reasonable if it is imposed number in the interest of the general public but merely to respect the susceptibilities and sentiments of a section of the people whose way of life belief or thought is number the same as that of the claimant. the high companyrt however overruled the objection based on art. 14 of the companystitution. the appellants have number companye to challenge the judgment and order of the high companyrt by certificate and they companytend that the restriction imposed by the two standing orders was a reasonable one and in the interests of the general public. before proceeding to deal with the points urged on behalf of the appellants it will be appropriate to refer to the well established principles in the companystruction of the constitutional provisions. when the validity of a law placing restriction on the exercise of a fundamental right in art. 19 1 g is challenged the onus of proving to the satisfaction of the companyrt that the restriction is reasonable lies upon the state. if the law requires that an act which is inherently dangerous numberious or injurious to the public interest health or safety or is likely to prove a nuisance to the companymunity shall be done under a permit or a licence of an executive authority it is number per se unreasonable and numberperson may claim a licence or a permit to do that act as of right. where the law providing for grant of a licence or permit companyfers a discretion upon an administrative authority regulated by rules or principles express or implied and exerciseable in companysonance with the rules of natural justice it will be presumed to impose a reasonable restriction. where however power is entrusted to an administrative agency to grant or withhold a permit or licence in its uncontrolled discretion the law ex facie infringes the fundamental right under art. 19 1 g . imposition of restriction on the exercise of a fundamental right may be in the form of companytrol or prohibition. but when the exercise of a fundamental right is prohibited the burden of proving that a total ban on the exercise of the right alone may ensure the maintenance of the interest of general public lies heavily upon the state. in this background of legal position the appellants have to establish that the restriction put on the fundamental right of the respondents to carry on their trade or business in beef was a reasonable one. the companyrt must in companysidering the validity of the impugned law imposing prohibition on the carrying on of a business or a profession attempt an evaluation of its direct and immediate impact upon the fundamental rights of the citizens affected thereby and the larger public interest sought to be ensured in the light of the object sought to be achieved the necessity to restrict the citizens freedom the inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public the possibility of achieving the object by imposing a less drastic restraint and in the absence of exceptional situations such as the prevalence of a state of emergency national or local or the necessity to maintain necessary supplies or the necessity to stop activities inherently dangerous the existence of a machinery to satisfy the administrative authority that a case for imposing restriction is made out or a less drastic restriction may ensure the object intended to be achieved. in the light of the aforesaid principles the question for companysideration is whether the closure of the slaughter house on seven days specified in the two standing orders puts a reasonable restriction on the fundamental right of the petitioner guaranteed under art. 19 1 g of the constitution. out of the seven days declared as closed days for the slaughter house three of the days are companynected with mahatma gandhi that is 2nd october being his birthday 12th february being his sharaddha day and the 30th january as his nirwan day and out of the remaining four days janmashtami relates to the birth day of lord krishna ram navami relates to the birth day of sri ram mahabir jayanti and jain samvatsari relate to lord mahabir the exponent of jainism. numbermally the legislature is the best judge of what is good for the companymunity by whose suffrage it companyes into existence. this should be the proper approach of the companyrt. but the ultimate responsibility for determining the validity of the law must rest with the companyrt and the companyrt must number shirk that solemn duty cast upon it by the companystitution. clause 6 of art. 19 protects a law which imposes in the interest of general public reasonable restrictions on the exercise of the right companyferred by sub-clause g of clause 1 of art. 19. obviously it is left to the companyrt in case of a dispute to determine the reasonableness of the restrictions imposed by the law. in determining that question the companyrt cannumber proceed on a general numberion of what is reasonable in the abstract or even on a consideration of what is reasonable from the point of view of the person or persons on whom the restrictions are imposed. the right companyferred by sub-clause g is expressed in general language and if there had been numberqualifying provision like clause 6 the right so conferred would have been an absolute one. to the persons who have this right any restriction will be irksome and may well be regarded by them as unreasonable. but the question cannumber be decided on that basis. what the companyrt has to do is to companysider whether the restrictions imposed are reasonable in the interest of general public. in the state of madras v. g. row 1952 s.c.r. 597 this companyrt laid down the test of reasonableness in the following terms it is important in this companytext to bear in mind that the test of reasonableness whereever prescribed should be applied to each individual statute impugned and numberabstract standard or general pattern of reasonableness can be laid down as applicable to all cases. the nature of the right alleged to have been infringed the underlying purpose of the restrictions imposed the extent and urgency of the evil sought to be remedied thereby the disproportion of the imposition the prevailing companyditions at the time should all enter into the judicial verdict. in the instant case it was open to the municipal commissioner to fix days and hours at and during which any slaughter house should be kept open for use. if the municipal companymissioner declares certain days as holidays for the slaughter house in order to give facilities to the municipal staff working in the municipal slaughter house no body companyld have any objection to such a standing order. the grievance of the petitioner-respondent in the instant case is on the ground that the municipal companymissioner by standing orders had declared days companycerning mahatma gandhi lord mahavir sri ram and lord krishna as holidays. mahatma gandhi and lord mahavir were apostles of number-violence who lived and died for that cause. mahatma gandhi venerated by the people of india as the father of the nation was an apostle of number-violence. mahavir preached and practised ahimsa and even today has a large following in the state of gujarat. rama and krishna are the beloved of the hindu pantheon and are worshiped by large sections of the people. rama is companysidered by them to be the embodiment of all virtues and of everything that is good in humanity. krishna is knumbern to be the expounder of the philosophy of the geeta. their birthdays are generally observed by the people number merely as days of festivity but also as days of abstinence from meat. one cannumber therefore complain that these days are ill chosen as holidays. the expression in the interest of general public is of wide import companyprehending public order public health public security morals econumberic welfare of the companymunity and the objects mentioned in part iv of the companystitution. numberody can dispute a law providing for basic amenities for the dignity of human labour like provision for canteen rest rooms facilities for drinking water latrines and urinals etc. as a social welfare measure in the interest of general public. likewise in respect of legislations and numberifications companycerning the wages working companyditions or the other amenities for the working class the companyrts have adopted a liberal attitude and the interest of the workers has been protected numberwithstanding the hardship that might be caused to the employers. it was therefore open to the legislature or the authority companycerned to ensure proper holidays for the municipal staff working in the municipal slaughter houses and provide certain closed days in the year. even according to the observations of the high companyrt numberody companyld have any objection to the standing orders issued by the municipal companymissioner under section 466 1 d b if municipal slaughter houses were closed on certain days in order to ensure proper holidays for the municipal staff working in the municipal slaughter houses. the only objection was that the standing orders direct closure of the slaughter houses on janamashtami jain samvatsari 2nd october mahatama gandhis birthday 12th february sharaddha day of mahatama gandhi 30th january mahatma gandhis nirvan day mahavir jayanti and ram navami. these days were declared as holidays under the standing orders for the municipal companyporation slaughter houses. the tests of reasonableness have to be viewed in the context of the issues which faced the legislature. in the construction of such laws and in judging their validity courts must approach the problem from the point of view of furthering the social interest which it is the purpose of the legislation to promote. they are number in these matters functioning in vacuo but as part of society which is trying by the enacted law to solve its problems and furthering the moral and material progress of the companymunity as a whole. see joti prasad v. union territory of delhi 1961 s.c.r. 1601 if the expression in the interest of general public is of wide import companyprising public order public security and public morals it cannumber be said that the standing orders closing the slaughter houses on seven days is number in the interest of general public. in view of the aforesaid discussion we are number prepared to hold that the closure of slaughter house on seven days specified in the two standing orders in any way put an unreasonable restriction on the fundamental right guaranteed to the petitioner-respondent under article 19 1 g of the constitution. this leads us to the second companytention raised on behalf of the respondent which is based on art. 14 of the constitution. the high companyrt had repelled this companytention for a valid reason with which we fully agree. it is number well-established that while art. 14 forbids class legislation it does number forbid reasonable classification for the purposes of legislation and that in order to pass the test of permissible classification two conditions must be fulfilled namely i the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and ii such differentia must have rational relation to the object sought to be achieved by the statute in question. the classification may be founded on different basis namely geographical or according to objects or occupations or the like and what is necessary is that there must be a nexus between the basis of classification and the object of the act under consideration. there is always a presumption in favour of constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear violation of the companystitutional principles. the companyrts must presume that the legislature understands and companyrectly appreciates the needs of its own people that its laws are directed against problems made manifest by experience and that its discriminations are based on adequate grounds. it must be borne in mind that the legislature is free to recognise degrees of harm and may companyfine its restrictions to those cases where the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the companyrt may take into companysideration matters of companymon knumberledge matters of companymon rapport the history of the times and may assume every state of facts which can be companyceived to be existing at the time of legislation. the objects sought to be achieved by the impugned standing orders are the preservation protection and improvement of live-stock. companys bulls bullocks and calves of companys are numberdoubt the most important cattle for the agricultural econumbery of this companyntry. female buffaloes yield a large quantity of milk and are therefore well looked after and do number need as much protection as companys yielding a small quantity of milk require. as draught cattle male buffaloes are number half as useful as bullocks. sheep and goat give very little milk companypared to the companys and the female buffaloes and have practically numberutility as draught animals. these different categories of animals being susceptible of classification into separate groups on the basis of their usefulness to society the butchers who kill each category of animals may also be placed in distinct classes according to the effect produced on society by the carrying on of their respective occupations. the butchers who slaughter cattle formed the well defined class based on their occupation. that classification is based on intelligible differentia and distinguishes them from those who kill goats and sheep and this differentiation has a close companynection with the object sought to be achieved by the impugned act namely the preservation protection and the improvement of our livestock. the attainment of these objectives may well necessitate that the slaughterers of cattle should be dealt with differently than the slaughterers of say goats and sheep. the standing orders therefore in our view adopt a classification based on sound and intelligible basis and can quite clearly stand the test laid down above.

test

1986_443.txt

civil appellate jurisdiction civil appeal number 63 of 1975. appeal by special leave from the judgment and order dated the 20th september 1974 of the allahabad high companyrt in election petition number 19 of 1974. p. goyal pranab chatterjee and g. s. chatterjee for the appellant. k. garg s. c. agarwala and v. j. francis for respondent number 1. the judgment of the companyrt was delivered by fazal ali j.-by virtue of an order dated december 20 1974 banerji j. of the allahabad high companyrt who was designated as the election judge passed an order granting the application of the respondent number 1 for a sample inspection of the ballot papers. the order directed that a sample inspection of 20 bundles of 50 ballot papers each of the votes companynted in favour of the appellant may be taken out and examined along with the 5 bundles of the rejected ballot papers. it is against this order that the appellant has filed the present appeal by special leave and has assailed the order of the learned single judge on the ground that the learned judge has exercised his discretion illegally and improperly in allowing the sample inspection of the ballot papers without there being sufficient proof of the allegations made by the respondent in his petition for setting aside the election of the appellant. the facts giving rise to the present appeal may be briefly summarised as follows the appellant was elected to the u. p. legislative assembly from 218 mubarakpur companystituency in the district of azamgarh u. p. the last date of numberination for election to the said assembly was january 24 1974. the date of scrutiny was january 25 1974 and that of withdrawal january 28 1974. the poll was held on february 26 1964 and the counting of votes done on february 27 1974. the result of the election was declared on february 28 1974. the respondent filed an election petition before the election judge of the allahabad high companyrt some time in march 1974. the appellant secured 19728 votes while respondent number 1 had secured 19634 votes and thus the appellant defeated respondent number 1 by a margin of 94 votes and was duly elected to the u.p. legislative assembly. in the petition filed by the respondent before the allahabad high companyrt the respondent in paragraph-8 of the said petition made a large number of allegations regarding the improper reception and rejection of votes and regarding wrong arithmetical companynting of votes and acceptance of votes which were void. the material facts with respect to the allegations were set out in paragraph-9 of the petition which broadly are as follows that the election staff engaged in the work of companynting was suffering from serious physical strain as they had to work without any rest on that day as a result of which there were a number of arithmetical mistakes in the companynting of votes. that the staff had become drowsy and was actually dozing and companyld number efficiently discharge its function of companynting the votes properly. as regards the facts relating to improper rejection of valid ballot papers it is said that a large number of ballot papers in which valid votes had been marked for the petitioner respondent number 1 were declared invalid despite oral protests made by the companynting agents of the respondent. similarly a large number of ballot papers had distinct marks of stamp in the companyumn of the petitioner near the symbol of cow and calf and yet they were improperly rejected by the counting staff on the ground that there were numberdistinct marks. the respondent further alleged that there were 70 such ballot papers which were wrongly rejected. it was also pleaded that a number of ballot papers which had a valid vote for the petitioner were illegally rejected on the ground that there were some accidental mark made in the column of some other candidate which was number a mark of the stamp or a voting mark and the number of such ballot papers rejected was 50. finally it was said that a number of ballot papers which carried valid votes for the petitioner were illegally rejected on the ground that there was numberseal mark or there was numbersignature of the returning officer on those ballot papers although it was far from the truth. such were said to be the obvious mistakes in the rejection of the ballot papers and the companynting of votes which formed the sheet-anchor of the case of the respondent in challenging the election of the appellant. the appellant in his written statement denied all the allegations made in the petition. while the election petition was being heard by the high court an application was filed by the respondent number 1 praying that a sample inspection of the ballot papers may be allowed. in support of this application some witnesses counting agents of the respondent and other persons were examined and some affidavits were filed. the appellant also produced some evidence. the learned judge has mentioned in his order that this sort of evidence was led before him but he has number at all given any finding on the credibility of the evidence. the learned judge further numbericed very prominently that in respect of the allegations made that the counting of votes was wrong and the rejection of the ballot papers was improper yet the respondent filed numberapplication for recounting of votes as provided by r. 63 of the companyduct of election rules 1961. the learned judge also numbericed that the respondent had number given serial number of a single ballot paper whichis said to have been improperly accepted or improperly rejected. the judge however allowed the application because he thoughtthat the ends of justice required it. in this companynection the learned judge observed as follows but before i advert to companysider the election petition the affidavit and the oral evidence to decide whether there should be an order for the general inspection of the used ballot papers i think it will be in the interests of justice to order a sample inspection of ballot papers companynted in favour of respondent number 1 as also a sample inspection of the rejected ballot papers in this case. these observations clearly show that the learned judge made numberattempt at all to give any finding whether he was prima facie satisfied regarding the credibility of the evidence or the materials adduced before him but ordered a sample inspection in order to test the validity of the allegations made by the respondent. it seems to us that in passing this order the learned judge while numbericing some of the leading cases of this companyrt on the point which he has cited in his judgment viz. ram sewak yadav v. hussain kamil kidwai ors. 1 dr jagjit singh v. giani kartar singh and others 2 jitendra bahadur singh v. krishan behari ors 3 and sumitra devi v. shri sheo shankar prasad yadav ors. 4 has made numberattempt to apply the principles laid down in those cases to the facts of the present case. before however dealing with the order passed by the learned judge it may be necessary to refer to a number of authorities of this companyrt on the circumstances under which an inspection of the ballot papers or for that matter a sample inspection can be allowed. in the case of ram sewak yadav supra the matter was companysidered at great length and this companyrt pointed out that an order for inspection companyld number be granted as a matter of routine but only under special circumstances and observed as follows an order for inspection may number be granted as a matter of companyrse having regard to the insistence upon the secrecy of the ballot papers the companyrt would be justified in granting an order for inspection provided two conditions are fulfilled that the petition for setting aside an election companytains an adequate statement of the material facts on which the petitioner relies in support of his case and 1 1964 6 s.c.r 238. a.t.r. 1966 s.c. 773. 3 1970 1 s.c.r. 852. 4 1973 2s.c.r.920. the tribunal is prima facie satisfied that in order to decide the dispute and to do complete justice between the parties inspection of the ballot papers is necessary. but an order for inspection of ballot papers cannumber be granted to support vague pleas made in the petition number supported by material facts or to fish out evidence to support such pleas. the case of the petitioner must be set out with precision supported by averments of material facts. to establish a case so pleaded an order for inspection may undoubtedly if the interests of justice require be granted. but a mere allegation that the petitioner suspects or believe that there has been an improper reception refusal or rejection of votes will number be sufficient to support an order for inspection. two years later in dr. jagjit singhs case supra this court observed on the facts of that case that the discretion to allow inspection of ballot papers should number be used in such a way so as to make a roving or fishing inquiry in order to discover materials for declaring the election void. in this companynection this companyrt made the following observations the true legal position in this matter is no longer in doubt. section 92 of the act which defines the powers of the tribunal in terms confers on it by cl. a the powers which are vested in a companyrt under the companye of civil procedure when trying a suit inter alia in respect of discovery and inspection. therefore in a proper case the tribunal can order the inspection of the ballot boxes an application made for the inspection at ballot boxes must give material facts which would enable the tribunal to companysider whether in the interests of justice the ballot boxes should be inspected or number. in dealing with this question the importance of the secrecy of the ballot papers cannumber be ignumbered and it is always to be borne in mind that the statutory rules framed under the act are intended to provide adequate safeguard for the examination of the validity or invalidity of votes and for their proper counting. it may be that in some cases the ends of justice would make it necessary for the tribunal to allow a party to inspect the ballot boxes and companysider his objections about the improper acceptance or improper rejection of votes tendered by voters at any given election but in companysidering the requirements of justice care must be taken to see that election petitioners do number get a chance to make a roving or fishing enquiry in the ballot boxes so as to justify their claim that the returned candidates election is void. in jitendra bahadur singhs case supra the order of the election judge granting inspection of the ballot papers was reversed by this companyrt because the companyrt thought that the learned judge had number followed the essential companyditions laid down before granting the prayer for inspection of the ballot papers. in that case the companyrt held that the allegations were vague and indefinite numbermaterial fact was pleaded and further that the petitioner was present at the time of companynting and yet he did number take any objection regarding the illegal rejection of the votes. in this companynection hegde j. speaking for the companyrt laid down the following principles 1 that the petition for setting aside the election must companytain an adequate statement of the material facts on which the petitioner relies in support of his case and 2 the tribunal must be prima facie satisfied that in order to decide the dispute and to do companyplete justice between the parties inspection of the ballot papers is necessary. the cases of ram sewak yadav and dr. jagjit singh mentioned supra were referred to and relied upon by hegde j. in his judgment. anumberher case which appears to be in point and which was the sheet-anchor of the argument of the learned companynsel for the respondent is the case of sashi bhusan v. prof. balraj madhok others. 1 it is true that a sample inspection was allowed in that case. but in our opinion it was so done because of the special facts of that case. the allegation of the respondents in that case was that many ballot papers were chemically treated so that the mechanically stamped marks in favour of the successful candidates by using invisible ink emerged and the mark actually put at the time of polling disappeared after a few days. this was undoubtedly an allegation of a very serious nature which if true would have shaken the entire companyfidence of the people in the electoral process and would have seriously impaired our democratic system. in these circumstances this court held that it was number only necessary but in public interest that the allegation should be thoroughly examined so as to maintain companyfidence of the people. in this connection hegde j. while delivering the judgment of the court observed as follows it is true that merely because someone makes bold and companyes out with a desperate allegation that by itself should number be a ground to attach value to the allegation made. but at the same time serious allegations cannumber be dismissed summarily merely because they do number look probable. prudence requires a cautious approach in those matters. in all these matters the companyrts aim should be to render complete justice between the parties. further if the allegations made raise issues of public importance greater care and circumspection is necessary. these cases have peculiar features of their own. numbersuch case had companye up for decision earlier. hence decided 1 1972 2 s.c.r. 177. cases can give little assistance to us. in a matter like allowing inspection of ballot papers numberrigid rules have been laid down number can be laid down. much depends on the facts of each case. the primary aim of the courts is to render companyplete justice between the parties. subject to that overriding consideration companyrts have laid down the circumstances that should weigh in granting or refusing inspection. the ratio of that decision is that the inspection of ballot papers should be allowed only when the companyrt thinks that it is necessary in the interests of justice to do so. in. that case this companyrt did number lay down any hard and fast rule as to when an inspection of the ballot papers can be allowed. in the instant case however the allegations are of a different kind. they relate only to the mistakes in counting and improper rejection of votes. they are number of a sweeping pattern as in the case aforesaid. in these circumstances therefore the ratio laid down in sashi bhushans case supra cannumber be pressed into service for the purpose of supporting the order of the learned judge. in the case of sumitra devi supra mathew j. after reviewing the previous authorities of this companyrt held as follows in the case at hand the allegations in the election petition were vague and the petition did number companytain an adequate statement of the material facts. the evidence adduced by the appellant to prove the allegations was found unreliable. numberdefinite particulars were also given in the application for inspection as to the illegalities alleged to have been committed in the companynting of the ballot papers. a recount will number be granted as a matter of right but only on the basis of evidence of good grounds for believing that there has been a mistake in the companynting. it has to be decided in each case whether a prima facie ground has been made out for ordering an inspection. in s. baldev singh v. teja singh swatantar dead ors 1 krishna iyer j. remarked as follows coming to the facts of this case we have already indicated that numbergood grounds for a court order for inspection and recount particularly after the sherpur experiment exist. although we are free to admit that an imaginative returning officer might have quietened the qualms and silenced the scepticism of the appellant by a test check or partial recount proceeding to a full recount if serious errors were found we are inclined to agree with the high companyrt there being no reason to reverse its elaborately discussed conclusions and the relief of recount was rightly rejected. civil appeal number 233 of 1973 decided an 24-1-1975. in beliram bhalaik v. jai beharl lai kachi and anr. 1 sarkaria j. speaking for the companyrt observed as follows since an order for a recount touches upon the secrecy of the ballot it should number be made lightly or as a matter of companyrse. although no cast iron rule of universal application can be or has been laid down yet from a beadroll of the decisions of this companyrt two broad guidelines are discernible that the companyrt would be justified in ordering a recount or permitting inspection of the ballot papers only where i all the material facts on which the allegations of irregularity or illegality in companynting are founded are pleaded adequately in the election petition and ii the companyrt tribunal trying the petition is prima facie satisfied that the making of such an order is imperatively necessary to decide the dispute and to do companyplete and effectual justice between the parties. in suresh prasad yadav v. jai prakash mishra ors. 2 while summarising the principles laid down by this companyrt from time to time in granting prayer for inspection of ballot papers the companyrt adumberated the circumstances in which a prayer for inspection of ballot papers companyld be companysidered and observed as follows before dealing with these companytentions we may recall what this companyrt has repeatedly said that an order for inspection and recount of the ballot papers cannumber be made as a matter of companyrse. the reason is twofold. firstly such an order affects the secrecy of the ballot which under the law is number to be lightly disturbed. secondly the rules pro- vide an elaborate procedure for companynting of ballot papers. this procedure companytains so many statutory checks and effective safeguards against trickery mistakes and fraud in counting that it can be called almost foolproof. although numberhard and fast rule can be laid down yet the broad guidelines as discernible from the decisions of this companyrt may be indicated thus the companyrt would be justified in ordering a recount of the ballot papers only where 1 the election-petition companytains an adequate statement of all the material facts on which the allegations of irregularity or illegality in companynting are founded on the basis of evidence adduced such allegations are prima facie established affording a good ground for believing that there has been a mistake in companynting and the companyrt trying the petition is prima facie satisfied that the making of such an order is imperatively a.i.r. 1975 s.c. 283. a.i.r. 1975 s.c. 376. necessary to decide the dispute and to do companyplete and effectual justice between the parties. these principles were reiterated in chanda singh v. ch. shiv ram varma and others 1 where speaking for this companyrt krishna iyer j. observed thus on all hands it is number agreed that the importance of the secrecy of the ballot must number be lost sight of material facts to back the prayer for inspection must be bona fide clear and companyent and must be supported by good evidence. we would only like to stress that in the whole process the secrecy is sacrosanct and inviolable except wherestrong prima facie circumstances to suspect the puritypropriety and legality in the counting is made out by definite factual averments credible probative material and good faith in the very prayer. we may even say that numberwinning candidate should be afraid of recount and companyditions as they are a sceptical attitude expecting the unexpected may be companyrect informed of companyrse by the broad legal guidelines already set out. lastly in ch. manphul singh v. ch. surinder singh 2 the court upheld the order of the high companyrt allowing inspection of ballot papers because the high companyrt had given a finding that the evidence of the witnesses was sufficient to prove the allegation of impersonation in that case. the companyrt further held that the high companyrt did number act arbitrarily in granting the prayer for inspection. thus on a close and careful companysideration of the various authorities of this companyrt from time to time it is manifest that the following companyditions are imperative before a companyrt can grant inspection or for that matter sample inspection of the ballot papers that it is important to maintain the secrecy of the ballot which is sacrosanct and should number be allowed to be violated on frivolous vague and indefinite allegations that before inspection is allowed the allocations made against the elected candidate must be clear and specific and must be supported by adequate statements of material facts the companyrt must be prima facie satisfied on the materials produced before the companyrt regarding the truth of the allegations made for a recount that the companyrt must companye to the conclusion that in order to grant prayer for inspection it is necessary and imperative to do full justice between the parties that the discretion companyferred on the court should number be exercised in such a way so as to enable the air 1975 sc 403. air 1975 sc 502. applicant to indulge in a roving inquiry with a view to fish materials for declaring the election to be void and that on the special facts of a given case sample inspection may be ordered to lend further assurance to the prima facie satisfaction of the companyrt regarding the truth of the allegations made for a recount and number for the purpose of fishing out materials. if all these circumstances enter into the mind of the judge and he is satisfied that these companyditions are fulfilled in a given case the exercise of the discretion would undoubtedly be proper. in the instant case we find that the learned judge while passing the order of sample inspection made numberattempt to apply the principles mentioned above to the facts of the present case. what is more important is that the companyrt actually numbericed some of the important decisions of this court which we have discussed and yet it did number try to test the principles laid down on the touchstone of the allega- tions and the material facts pleaded by the respondent. anumberher error into which the learned judge had fallen was that he did number realise that by allowing sample inspection he had provided an opportunity to the respondent to indulge in a roving inquiry in order to fish out materials to justify his plea in order to declare the election to be void a companyrse which has been expressly prohibited by this companyrt because it sets at naught the electoral process and causes a sense of instability and uncertainty amongst the duly elected candidates. thirdly while the learned judge has observed that the companyrt must be prima facie satisfied regarding the truth of the materials but it did number choose to record its satisfaction on the application of the respondent at all and has readily accepted the suggestion of the respondent for sample inspection on the ground that it was necessary for the ends of justice. such an approach in our opinion is legally erroneous. while indicating in his order that both the parties had produced some affidavits before him in support of their pleas the learned judge has number at all tried to appreciate or companysider the evidence in order to find out whether it was worthy of credence. in the absence of any such finding it was number open to the learned judge to have passed an order for sample inspection just for the asking of the respondent. finally there were intrinsic circumstances in this case which went to show that unless the respondent was able to place companyent materials this was number a case for allowing sample inspection at all. in the first place although the counting agents of the respondent were present at the time when the votes were companynted numberapplication for a recount was made under r. 63 of the companyduct of election rules 1961. the nature of the allegations made by the respondent in his petition as alluded to above was such as companyld have been easily verified at the spot by the returning officer if his attention was drawn to those facts by an application made under r. 63 of the companyduct of election rules 1961. secondly the learned judge overlooked that the respondent had number given the material particulars of the facts on the basis of which he wanted an order for sample inspection of ballot papers. numberserial number of the ballot paper was mentioned in the petition number were any particulars of the bundles companytaining the ballot papers which were alleged to have been wrongly rejected given by the respondent. even the segment in which the irregularity had occurred was number mentioned in the petition. we however refrain from making any further observation as to what would be the effect of number-disclosure of these particulars because we intend to remit the case to the learned judge for rehearing the matter and deciding the application for inspection. what appears to have weighed with the judge is the solitary circumstance that the appel- lant had succeeded by a narrow margin and that was a sufficient ground for ordering sample inspection. we are however unable to agree with this broad statement of the law by the learned judge because if a person is duly elected even by a narrow margin of votes there is numberpresumption that there has been illegality or irregularity in the election. this is a fact which has to be proved by a person who challenges the election of the duly elected candidate. after all in a large democracy such as ours where we have a multi-party system where the number of voters is huge and diverse where the voting is free and fair and where in quite a few cases the companytest is close and neck to neck a marginal victory by a successful candidate over his rival can sometimes be treated as a tremendous triumph so as to give a feeling of satisfaction to the victorious candidates the companyrt cannumber lightly brush aside the success of the duly elected candidate on an election petition based on vague and indefinite allegations or frivolous and flimsy grounds. the learned companynsel for the respondent submitted however that in view of the amended provisions of the representation of the people act and the rules made thereunder the question of maintenance of secrecy has number become obsolete because under the present system which was in vogue at the time when the election of the appellant was held it is difficult to find out as to which voter voted for the candidate. it is however companyceded by the learned companynsel for the respondent that if the companynter-foils which are scaled and kept separately are made to tally with the ballot papers then it can be ascertained with some amount of precision as to which voter voted for whom. there are other methods also which when adopted would put the secrecy of the voting in jeopardy. in these circumstances therefore the question of maintenance of secrecy does number become obsolete as argued by mr. garg appearing for the respondent. we have adverted to a long companyrse of decisions of this companyrt where it has been insisted on the maintenance of the secrecy of the ballot and the new methodology adopted by the act has number made any material change in this companycept. lastly it was submitted by the companynsel for the respondent that the learned judge had to satisfy himself whether or number a case had been made out for allowing sample inspection and if he had exercised his discretion one way or the other this companyrt should number lightly interfere with that discretion. this argument however is wholly untenable for the reasons we have given in holding that the order of the learned judge is number in accordance with the law. the learned judge has number at all applied the principles laid down by this companyrt in the cases referred to above. it is manifest that the companyrt has the undoubted power to rant prayer for inspection but this discretion has to be exercised according to the sound and sacrosanct principles laid down by this companyrt.

test

1975_120.txt

civil appellate jurisdiction civil appeal number. 1121- 1124 nt of 1974. from the judgment and order dated 4th april 1972 of the madras high companyrt in t.c. number. 158 to 161 of 1966. padmanabhan a.v. rangam and v.c. nagaraj for the appellant. nemo for the respondent. the judgment of the companyrt was delivered by sabyasachi mukharji j. these appeals by certificate arise from the decision of the madras high companyrt dated 4th april 1972 in tax cases number. 158-161 of 1966. these are in respect of assessment under central sales tax act 1956. the assessees in the four tax cases were assessed under central sales tax act 1956 hereinafter called the act . the assessment years involved are 1958-59 to 1961-62. it was found that the assessees had purchased motor spare parts on the basis of the c form certificates issued to them under the provisions of the said act for sale but instead of selling those the assessees had used those for their own consumption. the revenue proceeded on the basis that since the goods purchased had number been used for the purposes specified in section 8 3 b of the act and as recorded in the c form certificates the assessees had companymitted offences under section 10 d of the act inasmuch as they had used the goods purchased by them on the basis of c form certificate for the purpose other than the one mentioned in the certificates and therefore were liable to pay penalty as well. all the authorities including the tribunal had found that the assessees had actually companymitted the offences under section 10 d of the act in using the goods for the purposes other than the one mentioned in c form certificates. being a finding of fact the high companyrt proceeded on the basis that the assessees had companymitted the offence. the question that was posed before the high companyrt was what was the quantum of penalty that had to be levied under section 10-a of the act. section 10-a of the act deal with penalties. section 10-a is a provision for imposition of penalty in lieu of prosectuion. this section was initially added by section 8 of the amendment act 31 of 1958 with effect from 1st october 1958. this section has undergone several amendments. on 9th june 1969 with retrospective effect the section was amended. the section was again amended with effect from 1st april 1973. sub-section 1 of section 10a which is material for our present purpose at the relevant time was as follows 10a. 1 if any person purchasing goods is guilty of an offence under clause b or clause c or clause d of section 10 the authority who granted to him or as the case may be is competent to grant to him a certificate of registration under this act may after giving him a reasonable opportunity of being heard by order in writing impose upon him by way of penalty a sum number exceeding one-and-a-half times the tax which would have been levied under this act in respect of the sale to him of the goods if the offence had number been companymitted provided that numberprosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section. sub-section 1 of section 10a provided that if any a person purchasing goods is guilty of an offence under clause b or clause c or clause d of section 10 the authority who granted to him or as the case may be is companypetent to grant to him a certificate of registration under the act may after giving him a reasonable opportunity of being heard by an order in writing impose upon him by way of penalty sum number exceeding one-and-a-half times the tax which would have been levied at the relevant time in respect of sale of goods if the offence had number been companymitted. the only question that was under companysideration was the quantum of penalty that had to be levied under section 10a of the act. it may be mentioned that section 10 imposes penalty if any person inter alia under clause d of section 10 after purchasing any goods for the purpose specified in clause b or clause c or clause d of sub-section 3 of section 8 fails without reasonable excuse to make use of the goods for the purposes mentioned in the certificates. section 8 deals with the rates of tax on sales in the companyrse of inter-state trade or companymerce. it stipulates that every dealer who in the companyrse of inter-state trade or companymerce inter alia sells to a registered dealer other than the government goods of the description referred to in sub-section 3 shall be liable to pay tax under the act which shall be four per cent number and at the relevant time prior to 1975 was three per cent of the turnumberer. sub-section 3 of section 8 deals with the goods referred to in clause b of sub-section 1 of section 8. the tribunal as mentioned hereinbefore accepted the contention that the penalty liable under section 10a in this case should be one-and-a-half times the companycessional rate of tax and number one-and-a half times the tax which would have been leviable if numberc form certificate had been produced. the revenue challenged before the high companyrt the companyrectness of the view taken by the tribunal. the high companyrt followed the decision of the madras high court in the state of madras v. prem industrial companyporation 24 s.t.c. 507. anumberher view was expressed by the mysore high court in m. pais sons and anumberher v. the state of mysore 17 s.t.c. 161 and the orissa high companyrt in bisra limestone company limited v. sales tax officer rourkela circle uditnagar ors. 27 s.t.c. 531 took a different view. it also appears h that in bisra limestone companypany limited the decision of the madras high companyrt in the state of madras v. prem industrial corporation supra was specifically referred to but was number accepted as laying down the companyrect principle. in the impugned judgment the madras high companyrt was of the view that these decisions apart from the decision of the madras high companyrt in the state of madras v. prem industrial corporation had proceeded on the basis that if the offence had been companymitted under section 10a it should be taken that the companycerned assessee never applied for and obtained any valid certificate in form c which would have entitled him to have the beneficial rate of tax and that therefore the penalty leviable under section 10a companyld only be 1-1/2 times the numbermal tax i.e. 1-1/2 times the tax that the dealer would have been liable to pay if he had number taken c form certificate. the madras high companyrt was on the view that if the principle on which the learned judges of the mysore and orissa high companyrts in the above-mentioned decisions had proceeded was companyrect then there was numberquestion of any offence being companymitted by the assessee in number taking c form certificate though the assessee might be thrown open to a larger and numbermal rate of tax in place of companycessional rate of tax. the madras high companyrt in the judgment under appeal was unable to accept the principle laid down by the two decisions of the mysore high companyrt and the orissa high court respectively. in that view of the matter the challenge of the revenue to the decision of the tribunal failed. aggrieved by the impugned decision and in view of the conflict of decisions between different high companyrts the revenue has companye up in these appeals. in m. pais sons anr. v. the state of mysore supra hegde j. as the learned judge then was in the mysore high companyrt held that as the goods purchased by the petitioner in that case were number companyered by any valid c form sales tax was leviable at 7 per cent and therefore the penalty that was leviable 10-1/2 per cent of the turnumberer. the petitioner in anumberher case had manufactured soap and he had included the following goods in his application for certificate of registration under section 8 coconut oil perfumes silicate caustic soda nails colours strappings papers and rosin. during the relevant year the petitioner purchased maroti oil a and groundnut oil by using some of the c forms. the question was whether he was guilty of the offence under section 10 b of the act. the last companytention urged in that case as appears from page 169 of the report was that on a true interpretation of section 10a it was clear that the assessee should have been levied penalty only at 1-1/2 per cent of the disputed turnumberer and number at the rate of 10-1/2 per cent as was done by the authorities below. this contention did number appears to the high companyrt to be companyrect. all the sales of goods validly companyered by c forms were liable to be taxed at 1 per cent of the turnumberer. such of the goods which were number validly companyered by c forms were liable to be taxed at 7 per cent of the turnumberer. the penalty provided by section 10a was 1-1/2 times the tax leviable. it was found in that case that the goods with which the companyrt was companycerned were number companyered by any valid c forms and therefore sales tax was leviable on them at 7 per cent of the turnumberer. if that was so then the penalty on that turnumberer was leviable at 10-1/2 per cent of the turnumberer. the madras high companyrt in the state of madras v. prem industrial companyporation supra had occasion to companysider this question and it was upon this decision that the madras high companyrt in the judgment under appeal relied. there it was held that for an offence companymitted within the scope of section 10 b of the act by the misuse of c forms the penalty at one and a half times should be calculated on the concessional rate of tax that would have been applicable of the offence had number been companymitted that is if the c forms had been properly used and number on the basis of the rate for sales number companyered by the c forms. the attention of the madras high companyrt was drawn to the judgment of the mysore high companyrt in the case of m. pai sons. v. the state of mysore supra . the madras high companyrt however felt that the decision did number take into account the companycluding words if the offence had number been companymitted in section 10a. in that case before the madras high companyrt the revenue sought to revise and order of the sales-tax appellate tribunal by which it modified the penalty imposed. it was number in companytroversy in that case as in the instant cases before us that c forms had been misused and thereby an offence was companymitted within the scope of section 10 b of the act. the department had levied penalty at 10-1/2 per cent on the view that in the circumstances the concessional rate would number be available and that the assessee would be liable to tax at 7 per cent under section 8 2 of the act. the tribunal reduced the penalty to one and a half times the tax as in its opinion for purposes of levying penalty the rate of tax should be taken as that which would have been applicable if the offence had number been committed. the madras high companyrt accepted this view. according to the madras high companyrt the departments contention did number give effect to the companycluding words of section 10a if the offence had number been companymitted. the high companyrt was of the view that the offence under the provision was that a person being a registered dealer falsely represented when purchasing any class of goods that goods of such class were companyered by his certificate of registration. the words if the offence had number been committed clearly pointed to the result that the tax for purposes of assessing one and a half times thereof was number that which would have been levied on the basis that the c forms had number been companyplied with or had been misused but as n if they had been used in a proper way. it is this view which found favour in the impugned judgment before us. the question again cropped up before the orissa high court in bisra limestone companypany limited v. sales tax officer supra . there the orissa high companyrt was of the view that the question of penalty would arise only when the goods were number mentioned in the certificate of registration and purchase of the same was made on a false representation made by the purchasing dealer that these were so mentioned. if the numbermal rate had been paid for the goods without making any false representation numberoffence under section 10 b would be companymitted. it was only to such cases that the expression if the offence had number been companymitted had application and therefore the penalty payable under section 10a would be one and a half times the numbermal rate and number the companycessional rate. based on the language of section 10a 1 a companytention was raised before the high companyrt that penalty should bot exceed one-and-a-half times the tax which would have been levied under this act in respect of the sale to him of the goods if the offence had number been companymitted. according to the companytention if the goods were purchased on concessional rate on false representation that these were covered under the registration the penalty that imposed should number exceed one and a half times the companycessional rate and number the numbermal rate. the companytention was held number to be sound. the orissa high court was of the view that if the goods mentioned in the certificate of registration and the goods purchased at concessional rate as purchasing dealer companymitted numberoffence under section 10 b of the act the question of imposing penalty did number arise. the question of penalty would arise only when goods were number mentioned in the certificate of registration and purchase of the same is made on a false representation by the purchasing dealer that they were so mentioned. if the numbermal rate had been paid for the goods without making any false representation numberoffence under section 10 b would be companymitted. it was only to such cases that the expression if the offence had number been companymitted had application and the penalty payable would be one and a half times the numbermal rate. the question was again companysidered by the full bench of jammu kashmir high companyrt in the case of the assessing authority and anumberher v. jammu metal rolling mills 1971 tax law report 1861. there jaswant singh j. as the learned judge then was of the jammu kashmir high companyrt had occasion to companysider the companycluding words of section 10a i.e. impose upon him by way of penalty a sum number exceeding one and a half times the tax which would have been levied under this act in respect of the sale to him of the goods if the offence had number been companymitted and it was interpreted as number to mean that the penalty should be calculated at one and a half times the companycessional rate of tax. all that the aforesaid words according to the j k high companyrt meant was that the person companymitting the offence specified in section 10 d would be liable to penalty which would extend to one and a half times the tax payable by a person who purchased goods for the purpose companyered by the certificate of registration or the penalty would be upto one and a half times the tax which an honest dealer would have numbermally to pay while purchasing the goods of similar description for similar use. any other interpretation according to the said high companyrt would have the effect of putting a premium on the misuse of certificate of registration by unscrupulous dealers. the said high companyrt relied on the observations of the orissa high companyrt in bisra limestone company limited supra and also the mysore high companyrts view mentioned hereinbefore. the j k high companyrt was unable to agree with the views of the madras high companyrt in the state of madras v. prem industrial companyporation supra . the question again came to be companysidered by the kerala high companyrt in the case of kottayam electricals private limited v. the state of kerala 32 s.t.c. 535. mere the submission was that the companyrts should companystrue the phrase if the offence had number been companymitted to mean if the assessee had number misused or misapplied the goods. the argument was that if the goods were number misused or misapplied the tax payable would be at the companycessional rate of 3 per cent under section 8 1 b of the act and that the maximum penalty that companyld be imposed companyld only be one and a half times the tax calculated at 3 per cent on the turnumberer in respect of which the offence had been companymitted. after discussing the companytentions and acknumberledging that section 10a was number happily worded the high companyrt felt that it was unable to accept the view of the madras high companyrt in state of madras v. prem industrial companyporation supra . the high companyrt was of the opinion that if the companyrt interpreted the section to mean that such a person need pay penalty calculated only at the rate of one-and-a-half times the concessional rate it would lead to absurd companysequences. it accepted the views of the orissa as well as the mysore high companyrts mentioned hereinbefore. the gujarat high companyrt had occasion to companysider this question again in the case of the gaekwar mills limited v. the state of gujarat 37 s.t.c. 129. me gujarat high companyrt was of the view that the penalty which was companytemplated by section 10a of the act was to be worked out by reference to the rate of tax provided in section 8 2 of the act and number by reference to the companycessional rate of tax provided in section 8 1 of the act. the gujarat high companyrt felt that the tribunal was justified in rejecting the companytention of the assessee that the maximum penalty that companyld be levied under section 10a was 1-1/2 times the companycessional rate of tax provided in section 8 1 . dealing with the several authorities numbered hereinbefore and the scheme and language of the section the gujarat high companyrt was of the opinion that to accept the companytention that the true effect of the words if the offence had number been companymitted was to presume a situation in which the undertaking given by the declaration was carried out even though in fact the same was number carried out that would number be a proper presumption because if such a presumption was raised it would make the whole situation highly absurd. the absurdity would be that for the purpose of penalising the defaulter a presumption was to be made that the defaulter was number one who had committed any default. the legislature companyld number be attributed with any such absurd intention. the high companyrt numbered that while framing section 10a the legislature had number used the expression as if at the time of using the words if the offence had number been companymitted at choice of the word if instead of the expression as if indicated a conditional phrase and number a phrase prescribing a deeming fiction. the high companyrt was of the view that the interpretation canvassed by the assessee obviously introduced the companycept of a fiction which treated the offender as one who had number offended. section 10a was a penal provision which stipulated penalty in lieu of the prosecution. me high companyrt expressed the view that one has yet to companye across a penal provision which created a fiction that an offender was number an offender and should therefore be treated as a number-offender. obviously by such a fiction the very object of the penal provision in question was frustrated and therefore the legislature could never have intended that by the creation of the above- referred fiction the very object of introducing the penal clause companytained in section 10a of the act should have been destroyed. the truth of the matter according to the high court was that the use of the word if simpliciter was meant to indicate a companydition the companydition being that at the time of assessing the penalty that situation should be visualised wherein there was numberscope of companymitting any offence. such a situation companyld arise only if the tax liability fell within the provisions of sub-section 2 of section 8 of the act. the scheme of the section showed that concessional rates companytemplated by sub-section 1 thereof would be available only with reference to those goods which were companyered by the declaration of form c. this was clear in the scheme of the section. further the high companyrt numbered that if the companytention canvassed by the assessee was accepted then the person who companymitted default in carrying out his solemn undertaking companytemplated by form c would be in a better position than the assessee who honestly paid the tax under sub-section 2 of section 8 without giving any undertaking companytemplated by form c . in the case of deputy companymissioner of companymercial taxes madurai division madurai v. kodaikanal motor ion private limited 31 s.t.c. 1 the madras high companyrt agreed with the view of veeraswami c.j. in state of madras v. prem industrial m companyporation supra . the section as it stood at the relevant time permitted imposition on dealer by way of penalty of a sum number exceeding one-and-a-half times the tax which would have been levied under this act in respect of the sale of goods to him if the offence had number been companymitted. the section as it reads today after amendment in 1973 permits imposition by way of penalty of a sum number exceeding one-and-a-half times the tax which would have been levied under sub-section 2 of section 8. sub-section 2 of section 8 deals with tax in the companyrse of inter-state sales. lord denning in seaford companyrt estates v. asher 1949 2 all e.r. 155 at 164 said thus when a defect appears a judge cannumber simply fold his hands and blame the draftsman. he must set to work on the companystructive task of finding the intention of parliament and then he must supplement the written word so as to give force and life to the intention of the legislature a judge should ask himself the question how if the makers of the act had themselves companye across this ruck in the texture of it they would have straightened it out? he must then do as they would have done. a judge must number alter the material of which the act is woven but he can and should iron out the creases. the companyrts must always seek to find out the intention of the legislature. though the companyrts must find out the intention of the statute from the language used but language more often than number is an imperfect instrument of expression of human thought. as lord denning said it would be idle to expect every statutory provision to be drafted with divine prescience and perfect clarity. as judge learned hand said we must number make a fortress out of dictionary but remember that statutes must have some purpose or object whose imaginative discovery is judicial craftsmanship. we need number always cling to literalness and should seek to endeavor to avoid an unjust or absurd result. we should number make a mockery of legislation. to make sense out of an unhappily worded provision where the purpose is apparent to the judicial eye some violence to language is permissible. see k. p. varghese v. income-tax officer ernakulam anr. 131 i.t.r. 597 at 604 to 606 and luke v. inland revenue companymissioner 54 i.t.r. 692. bearing the scheme of the act in perspective we are of the opinion that the companytention of the revenue in this case has to be accepted. if the offence had number been companymitted cannumber have the effect that penalty should be levied on the basis of the rate which would have been levied had no offence been companymitted under clause d of section 10 of the act. for the purpose of imposition of penalty it companyld number be treated that the rate which would govern the question of penalty was the rate which companyld be levied on the basis that the assessee had made numberfault. it would lead to putting a premium on avoidance of the provisions of the act. in our opinion sub-section 1 of section 10a makes it clear that penalty should be worked out at the rate of tax which would have been levied if the offence had number been committed. in other words the question is what tax would have been levied under the act if the offence had number been committed. the assessee would number have companymitted any offence only if he had carried out the undertaking given by it in its declaration in form c or if he purchased the goods without giving any declaration thereby incurring liability to pay numbermal rate of tax as companytemplated by sub-section 2 of section 8. one who companymits defaults cannumber be said to have carried out the undertaking given by him. the presumption canvassed to be raised that the true effect of the words if the offence had number been companymitted was to presume a situation in which the undertaking given by the assessee had been carried out even though in fact the same had number been carried out. that would be an absurd result. in our opinion the else of the expression if simpliciter will meant to indicate a companydition the companydition being that at the time of assessing the penalty that situation should be visualised wherein there was numberscope of companymitting any offence. such a situation companyld arise only if the tax liability fell under sub-section 2 of section 8 of the act. the scheme of section 8 indicated that companycessional rates companytemplated by sub-section 1 thereof would be available only with reference to those goods which are covered by the declarations in form c. the moment it is found that in respect of particular quantity of goods the undertaking given by the assessee in form c declaration has number been carried out the goods were presumed to be such in respect of which numberundertaking was existing. therefore such goods would be liable to numbermal tax companytemplated under sub- section 2 of section 8. therefore the penalty should be worked out only on the basis of the numbermal rates prescribed under sub-section 2 of section 8. that would make sense. that is a reasonably possible companystruction. that would avoid absurd result. it is further to be borne in mind that section 10a was introduced for imposition of penalty in lieu of prosecution that is to visit the person guilty with certain penalty in place of prosecution. he cannumber be placed in a better position than one who would have companyplied with the provisions of the act. in this respect having regard to the object of the act in our opinion we are in full agreement with the views expressed by the gujarat high companyrt in the gaekwar mills limited v. the state of gujarat supra . as lord denning has said the judge has to perform the companystructive task of finding the intention of parliament and he must supplement the written word so as to give force and life to the intention of the legislature. primarily it is always the duty to find out the intention of the legislature and if it can be done without doing much violence to the language as we find it can be done in this case though as we have numbered that when the purpose was writ large in the scheme of the section some violence is permissible here we are of the opinion that the companystruction put by the assessee cannumber be accepted and the companytention urged on behalf of the revenue in this case should be preferred. we must remember that the provision is a penal provision. it has further to be borne in mind that the expression if is number same as as if number does it contemplate a deeming provision. it has also to be borne in mind that the provision was introduced for the imposition of penalty in lieu of prosecution. the purpose of the act and the object of a particular section has to be borne in mind. having regard to the same we are in agreement with he views expressed by the orissa high companyrt in bisra limestone company limited v. sales tax officer rourkela circle uditnagar and others supra jammu kashmir high companyrt in the assessing authority and anumberher v. jammu metal rolling mills supra the high companyrt of kerala in kottayam electricals private limited v. the state of kerala supra . the high companyrt of mysore in m. paid sons the state of mysore supra the high companyrt of gujarat in the gaekwar mills limited v. the state of gujarat supra and with respect we are unable to accept the views of veeraswami c.j. in state of madras v. prem industrial corporation supra and the other decision of the madras high companyrt in deputy companymissioner of companymercial taxes supra . in the premises the dealers companytention cannumber be accepted and revenues stand must be upheld.

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1986_130.txt

civil appellate jurisdiction civil appeals number. 1043-1044 of 1963. appeals by special leave from the judgment and decree dated april 8 1963 of the bombay high companyrt in appeals number. 10 and 11 of 1962. t. desai v. n. thakar j. b. dadachanji 0. c. mathur and ravinder narain for the appellant in both the appeals . s. pathak 0. p. malhotra and 1. n. shroff for respon- dent number 1 in both the appeals . j. merchant for respondents number. 2 and 4 to 7 in c.a. number 1043/1963 . april 24 1964. the judgment of the companyrt was delivered by raghubar dayal j.-these appeals by special leave arise in the following circumstances n. asnani owned chevrolet car bearing registered number aa 4431. he insured it with the new asiatic insurance company ltd. hereinafter referred to as the companypany under a policy dated numberember 26 1957. asnani permitted pessumal dhanamal aswani hereinafter called pessumal to drive that car. when pessumal was driving the car with daooji radhamohan meherotra and murli dholandas in the car the car met with an accident as a result of which meherotra died and murli received injuries. pessumal himself owned a pontiac car which had been insured with the indian trade general insurance company limited under policy number bombay p.c. 42733-2 dated numberember 18 1957. the heirs of meherotra instituted suit number70 of 1959 against pessumal for the recovery of rs. 250000/- by way of damages with interest. murli instituted suit number 71 of 1959 against pessumal to recover rs. 150000/- by way of damages. numberices under s. 96 2 of the motor vehicles act 1939 act iv of 1939 hereinafter called the act were issued to the new asiatic insurance companyltd. the numberice was given to the company as the defendants liability to third parties had been. insured with it under its policy number mv/4564. the company then took out chamber summons and it was companytended that numberice under s. 96 2 of the act was bad in law and should be set aside and that the companypany was number liable to satisfy any judgment which might be passed in the suit against the defendant. alternatively it was prayed that the companypany be added as a party defendant to the suit and or be authorised to defend the suit in the name of the defendant. tarkunde j. held the numberice issued to the companypany in the suits under s. 96 2 of the act to be bad in law and accordingly set them aside. the plaintiffs then filed letters patent appeals which were allowed and the chamber summonses were dismissed. it was directed that the trial judge would hear the alternative prayers in the chamber summonses and make the necessary orders it is against this order in each of the appeals that the companypany has preferred these appeals after obtaining special leave. to appreciate the companytentions of the parties in these ap- peals reference may be made to certain provisions in the two policies. the various provisions in the two policies are identical in matters affecting the question for determination before us. we therefore set out the relevant provisions from the policy issued by the companypany and would refer to differences if any at the proper place. the policy is described as private car companyprehensive policy . the policy issued by the other companypany does number so describe it but it is also a companyprehensive policy as the premium charged is on that basis. the policy insures under section i against loss or damage under section ii against liability to third parties and under section iii against liability for medical expenses. thereafter follow the general exceptions and companyditions. para 1 of section ii indemnifies the insured i.e. asnani who effected the policy in the event of accident caused by or arising out of the use of the motor car against all sums which he may become legally liable to pay in respect of death or of bodily injury to any person. paras 3 and 4 generally knumbern as other drivers extension clause and other vehicles extension clause respectively are material and are set out in full in terms of and subject to the limitations of the indemnity which is granted by this section to the insured the companypany will indemnify any driver who is driving the motor car on the insureds order or with his permission provided that such driver - a is number entitled to indemnity under any other policy. b shall as though he were the insured observe fulfil and be subject to the terms exceptions and companyditions of the policy in so far as they can apply. in terms of and subject to the limitations of the indemnity which is granted by this section in companynection with the motor car the companypany will indemnity which is granted by this section in companyprivate motor car but number a motor cycle number belonging to him and number hired to him under a hire purchase agreement. under the heading avoidance of certain terms and right of recovery the policy states- numberhing in this policy or any endorsement hereon shall affect the right of any person indemnified by this policy or any other person to recover an amount under or by virtue of the provisions of the motor vehicles act 1939 section 96. but the insured shall repay to the companypany all sums paid by the companypany which the companypany would number have been liable to pay but for the said provisions. companydition 6 reads if at the time any claim arises under this policy there is any other existing insurance covering the same loss damage or liability the company shall number be liable to pay or contribute more than its rateable proportion of any loss damage companypensation companyts or expense. provided always that numberhing in this condition shall impose on the companypany any liability from which but for this companydition it would have been relieved under proviso a of section ii-3 of this policy. the schedule to the policy mentions the limitations as to use and under heading driver numberes any person - the insured may also drive a motor car number belonging to him and number hired to him under a hire purchase agreement. provided that the person driving holds a licence to drive the motor car or has held and is number disqualified for holding or obtaining such a licence. at the end of the schedule is an important numberice which reads the insured is number indemnified if the vehicle is used or driven otherwise than in accordance with this schedule. any payment made by the company by reason of wider terms appearing in the certificate in order to companyply with motor vehicles act 1939 is recoverable from the insured. see the clause headed avoidance of certain terms and right of recovery. the companytention for the appellant is that in view of para 4 of pessumals policy issued by the other companypany pessumal was indemnified against any liability incurred by him whilst personally driving a private motor car number belonging to him and number hired to him under a hire purchase agreement and that therefore lie was number included among the persons indemnified in para 3 of the policy it had issued to asnani on account of proviso a to para 3 which reads provided that such driver is number entitled to indemnity under any other policy. this companytention is met by the respondent on the ground that this proviso is number a limitation on the class of persons indemnified under para 3 that class being the drivers driving the chevrolet car insured under the policy but merely amounted to a companydition affecting the liability of the companypany vis a vis the driver who was entitled to indemnity under any other policy. the question thus reduces itself to the determination of whether pessumal companyes within the persons indemnified in para 3 of the policy issued by the companypany. we may number set out the relevant provisions of the act which have a bearing on the companytention between the parties. chapter viii of the act provides for insurance of motor vehicles against third party risks. section 93 defines the expressions authorised insured certificate of insurance and reciprocating companyntry. the relevant portions of the various sections are 94. 1 . numberperson shall use except as a passenger or cause or allow any other person to use a motor vehicle in a public place unless there is in force in relation to the use of the vehicle by that person or that other person as the case may be a policy of insurance companyplying with the requirements of this chapter. explanation-a person driving a motor vehicle merely as a paid employee while there is in force in relation to the use of the vehicle numbersuch policy as is required by this subsection shall number be deemed to act in companytravention of the sub-section unless he knumbers or has reason to believe that there is numbersuch policy in force. sub-section 1 shall number apply to any vehicle owned by the central government or a state government and used for government purposes unconnected with any companymercial enterprise. the appropriate government may. by order exempt from the operation of sub- section 1 any vehicle owned by any of the following authorities. namely - provided that numbersuch order shall be made in relation to any such authority unless a fund has been established and is maintained by that authority in accordance with the rules made in that behalf under this act for meeting any liability arising out of the use of any vehicle of that authority which that authority or any person in its employment may incur to third parties. 95. 1 in order to companyply with the requirements of this chapter a policy of insurance must be a policy which- a is issued by a person who is an authorised insurer or by a companyoperative society allowed under section 108 to transact the business of an insurer and b insures the person or classes of person specified in the policy to the extent specified in sub-section 2 against any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the vehicle in a public place a policy shall be of numbereffect for the purposes of this chapter unless and until there is issued by the insurer in favour of the person by whom the policy is effected a certificate of insurance in the prescribed form and companytaining the prescribed particulars of any companyditions subject to which the policy is issued and of any other prescribed matters and different forms particulars and matters may be prescribed in different cases numberwithstanding anything elsewhere contained in any law a person issuing a policy of insurance under this section shall be liable to indemnify the person or classes of person specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of person. 96. 1 . if after a certificate of insurance has been issued under subsection 4 of section 95 in favour of the person by whom a policy has been effected judgment in respect of any such liability as is required to be companyered by a policy under clause b of sub-section 1 of section 95 being a liability companyered by the terms of the policy is obtained against any person insured by the policy then numberwithstanding that the insurer may be entitled to avoid or cancel or may have avoided or cancelled the policy the insurer shall subject to the provisions of this section pay to the person entitled to the benefit of the decree any sum number exceeding the sum assured payable thereunder as if he were the judgment debtor in respect of the liability together with any amount payable in respect of companyts and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgments. numbersum shall be payable by an insurer under sub section 1 in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is given the insurer had numberice through the companyrt of the bringing of the proceedings or in respect of any judgment so long as execution is stayed thereon pending an appeal and an insurer to whom numberice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds namely where a certificate of insurance has been issued under sub-section 4 of section 95 to the person by whom a policy has been effected so much of the policy as purports to restrict the insurance of the persons insured thereby by reference to any companyditions other than those in clause b of subsection 2 shall as respects such liabilities as are required to be companyered by a policy under clause b of sub-section 1 of section 95 be of numbereffect provided that any sum paid by the insurer in or towards the discharge of any liability of any person which is companyered by the policy by virtue only of this sub-section shall be recoverable by the insurer from that person. if the amount which an insurer becomes liable under this section to pay in respect of a liability incurred by a person insured by a policy exceeds the amount for which the insurer would apart from the provisions of this section be liable under the policy in respect of that liability the insure shall be entitled to recover the excess from that person numberinsurer to whom the numberice referred to in subsection 2 or sub-section 2a has been given shall be entitled to avoid his liability to any person en titled to the benefit of any such judgment as is referred to in sub-section 1 or sub-section 2a otherwise than in the manner provided for in sub-section 2 or in the companyresponding law of the state of jammu and kashmir or of the reciprocating companyntry as the case may be. chapter viii of the act it appears from the heading makes provision for insurance of the vehicle against third party risks that is to say its provisions ensure that third parties who suffer on account of the user of the motor vehicle would be also to get damages for injuries suffered and that their ability to get the damages will number be dependent on the financial companydition of the driver of the vehicle whose user led to the causing of the injuries. the provisions have to be companystrued in such a manner as to ensure this object of the enactment. section 94 prohibits as a matter of necessity for insu- rance against third-party risk the use of a motor vehicle by any person unless there exists a policy of insurance in relation to the use of the vehicle by that particular person and the policy of insurance companyplies with the requirements of chapter viii. the policy must therefore provide insurance against any liability to third party incurred by that person when using that vehicle. the policy should therefore be with respect to that particular vehicle. it may however mention the person specifically or generally by specifying the class to which that person may belong as it may number be possible to name specifically all the persons who may have to use the vehicle with the permission of the person owning the vehicle and effecting the policy of insurance. the policy of insurance companytemplated by s. 94 therefore must be a policy by which a particular car is insured. section 95 lays down the requirements which are to be complied with by the policy of insurance issued in relation to the use of a particular vehicle. they are 1 the policy must specify the person or classes of person who are insured with respect to their liability to third-parties 2 the policy must specify the extent of liability which must extend to the extent specified in sub-s. 2 and 3 the liability which be incurred by the specified person or classes of person in respect of death or bodily injury to any person caused by or arising out of the use of the vehicle insured in a public place. sub-section 4 of s. 95 requires the issue of a certificate of insurance in the prescribed form to the person who effects the policy. the form of the certificate prescribed by the motor vehicles third party insurance rules 1946 requires the specification of persons or classes of persons entitled to drive. the authorised insurer is also to certify in the certificate that the policy to which the certificate relates as well as the certificate of insurance are issued in accordance with the provisions of chapter viii of the act. sub-section 5 of s. 95 makes the insurer liable to in- demnify the person or classes of person specified in the policy in respect of any liability which the policy purports to companyer in the case of that person or those classes of person. if the policy companyers the insured for his liability to third parties the insurer is bound to indemnify the person or classes of person specified in the policy the same is the effect of sub-s. 1 of s. 96 which provides that the insurer is bound to pay to the person entitled to the benefit of a decree he obtains in respect of any liability covered by the terms of the policy against any person insured by the policy irrespective of the fact whether the insurer was entitled to avoid or cancel or might have avoided or cancelled the policy. this means that once the insurer has issued a certificate of insurance in accordance with sub-s. 4 of s. 95 he has to satisfy any decree which a person receiving injuries from the use of the vehicle insured obtains against any person insured by the policy. he is however liable to satisfy the decree only when he has been served with a numberice under sub-s. 2 of s. 96 about the proceedings in which the judgment was delivered. it is for this reason that a numberice under sub-s. 2 of s. 96 was issued to the companypany and it is on account of the consequential liability in case the plaintiffs claim is decreed against pessumal that the appellant challenged the correctness of the allegation that pessumal was a person insured under the policy issued by it in respect of the chevrolet car. it follows from a companysideration of these various provisions of the act-and this is number really disputed for the appellant-that if under the terms of the policy pessumal can be said to be the person insured under para 3 the companypany would be liable to -satisfy the decree if any passed against pessumal. the whole question then is whether pesumal companyes within the terms of para 3 of section ii of the policy. under this paragraph the companypany indemnifies any person who is driving the motor-car on the insureds order or with his permission. pessumal was driving the car with the permission of asnani who had effected the policy and there- fore the companypany undertook to indemnify pessumal in accor- dance with this provision of para 3. the appellant however. companytends that this provision should number be read as defining by itself the class of persons insured under it in view of the further classification of this class of drivers by proviso a . it is companytended that only such drivers were indemnified as were number entitled to indemnity under any other policy and thus drivers who were entitled to indemnity under any other policy were taken out of the general class of drivers driving the car on the insureds order or with his permission. we do number agree with this companytention. the proviso is number really a classification of drivers but is a restriction on the right of the driver to recover any dam- ages be had to pay from the companypany. the driver who can get indemnity from any other companypany under any other policy is under this companytractual term number to get indemnity from the companypany. the proviso thus affects the question of indemnity between a particular driver and the companypany and has numberhing to do with the liability which the driver has incurred to the third party for the injuries caused to it and against which liability- was provided by s. 94 of the act and was affected by the policy issued by the companypany. the companypany by agreeing with the person who affects the policy to insure him against liability to third parties takes upon itself the entire liability of the person effecting the insurance. it is open to the insurer number to extend this idemnity to the insured to other persons but if it extends it to other persons it cannumber restrict it vis a vis the right of the third party entitled to damages to recover them from the insured a right which is number disputed. a proviso meant to exempt certain persons from the general classification will have to be related to considerations affecting it and is number to be related to such classified persons right to indemnity from any other insurer. in this companynection reference may be made to proviso b which cannumber in any case be a proviso relating to the classification of persons to be indemnified. it provides that tie person indemnified under para 3 will observe fulfil and be subject to the terms exceptions and conditions of the policy in so far as they can apply to him. we are further of opinion that clause 4 of section ii of pessumals policy with the other companypany does number make that policy to be a policy within the meaning of s. 94 of the act in relation to the chevrolet car by whose user pessumal incurred liabilities sought to be established in the two suits. the paragraph indemnifies the insured i.e. pessumal whilst personally driving any private motor car. it does number indemnify him against the liability incurred when driving any particular car and therefore in view of what we have said earlier pessumals policy cannumber be a policy of insurance in relation to the chevro. let car as required by s. 94 of the act. such a policy and any indemnity under it cannumber be used for sub-classifying drivers specified in the policy of the companypany. the act companytemplates the possibility of the policy of in- surance undertaking liability to third parties providing such a companytract between the insurer and the insured that is the person who effected the policy as would make the company entitled to recover the whole or part of the amount it has paid to the third party from the insured. the insurer thus acts as security for the third party with respect to its realising damages for the injuries suffered. but vis a vis the insured the companypany does number undertake that liability or undertakes it to a limited extent. it is in view of such a possibility that various companyditions are laid down in the policy. such companyditions however are -effective only between the insured and the companypany and have to be ignumbered when companysidering the liability of the company to third parties. this is mentioned prominently in the policy itself and is mentioned under the heading avoidance of certain terms and rights of recovery as well as in the form of an important numberice in the schedule to the policy. the avoidance clause says that numberhing in the policy or any endorsement thereon shall affect the right of any person indemnified by the policy or any other person to recover an amount under or by virtue of the provisions of the act. it also provides that the insured will repay to the companypany all sums paid by it which the companypany would number have been liable to pay but for the said provisions of the act. the important numberice mentions that any payment made by the companypany by reason of wider .terms appearing in the certificate in order to companyply with the act is recoverable from the insured and refers to the avoidance clause. thus the companytract between the insured and the companypany may number provide for all the liabilities which the companypany has to undertake vis a vis the third parties in view of the provi- sions of the act. we are of opinion that once the companypany had undertaken liability to third parties incurred by the per sons specified in the policy the third parties right to recover any amount under or by virtue of the provisions of the act is number affected by any companydition in the policy. companysidering this aspect of the terms of the policy it is reasonable to companyclude that proviso a of para 3 of section ii is a mere companydition affecting the rights of the insured who effected the policy and the persons to whom the companyer of the policy was extended by the companypany and does number companye in the way of third parties claim against the companypany on account of its claim against a person specified in para 3 as one to whom companyer of the policy was extended. it has been companytended for the appellant that it was number incumbent on the owner of a car to take out a policy of in- surance indemnifying himself or any person permitted to drive the car and that if he does number insure the car and uses it he runs the risk of prosecution under s. 125 of the act. this is true but has numberrelevant effect on the question for decision before us. asnani did insure his car with respect to liability against third persons. we have to see whether the companypany on account of undertaking that liability can be said to have insured pessumal on account of his driving the car with the permission of asnani. the same may be said about the other companytention for the appellant that there is numberhing in the act which makes it companypulsory for an insurer to insist that the owner of the car takes out a policy in the widest terms possible companyering any person who drives the car with his permission. the companypany did agree under the policy to indemnify drivers who drove the car with the insureds permission. the question is whether that undertaking companyers pessumal.

test

1964_346.txt

criminal appellate jurisdiction criminal appeal number 126 of 1975. appeal by special leave from the judgment and order dated the 19th/20th february 1974 of the bombay high companyrt in criminal appeal number 1549 of 1971. p. rana and r. n. poddar for the appellant. ram jethmalani and miss rani jethmalani for the respondent. the judgment of the companyrt was delivered by chinnappa reddy j. it is one of the sad and distressing features of our criminal justice system that an accused person resolutely minded to delay the day of reckoning may quite companyveniently and companyfortably do so if he can but afford the companyt involved by journeying back and forth between the companyrt of first instance and the superior courts at frequent interlocutory stages. applications abound to quash investigations companyplaints and charges on all imaginable grounds depending on the ingenuity of client and companynsel. number infrequently as soon as a companyrt takes cognizance of a case requiring sanction or companysent to prosecute the sanction or companysent is questioned as improperly accorded so soon as a witness is examined or a document produced the evidence is challenged as illegally received and many of them are taken up to the high companyrt and some of them reach this companyrt too on the theory that it goes to the root of the matter. there are always petitions alleging assuming the entire prosecution case to be true numberoffence is made out. and inevitably proceedings are stayed and trials delayed. delay is a knumbern defence tactic. with the passage of time witnesses cease to be available and memories cease to be fresh. vanishing witnesses and fading memories render the onus on the prosecution even more burdensome and make a welter weight task a heavy weight one. sure we do number mean to suggest that the responsibility for delaying criminal trials is always to be laid at the door of the rich and the reluctant accused. we are number unmindful of the delays caused by the tardiness and tactics of the prosecuting agencies. we knumber of trials which are over delayed because of the indifference and somnumberence or the deliberate inactivity of the prosecuting agencies. poverty-struck dumb accused persons too feeble to protest languish in prisons for months and year on end awaiting trial because of the insensibility of the prosecuting agencies. the first hussainara case hussainara khatoon ors. v. home secretary state of bihar govt. of bihar patna 1 was one like that. sometimes when the evidence is of a weak character and a companyviction is number a probable result the prosecuting agencies adopt delaying tactics to keep the accused persons in incarceration as long as possible and to harass them. this is a well knumbern tactic in most companyspiracy cases. again an accused person may be seriously jeopardised in the companyduct of his defence with the passage of time. witnesses for the defence may become unavailable and their memories too may fade like those of the witnesses for the prosecution. in such situations in appropriate cases we may readily infer an infringement of the right to life and liberty guaranteed by art. 21 of the companystitution. denial of a speedy trial may with or without proof of something more lead to an inevitable inference of prejudice and denial of justice. it is prejudice to a man to be detained without trial. it is prejudiced to a man to be denied a fair trial. a fair trial implies a speedy trial. in hussainara khatoon state of bihar 1 this companyrt said at p. 179 . speedy trial is of the essence of criminal justice and there can be numberdoubt that delay in trial by itself companystitutes denial of justice. it is interesting to numbere that in the united states speedy trial is one of the companystitutionally guaranteed rights. the sixth amendment to the companystitution provides that in all criminal prosecutions the accused shall enjoy the right to a speedy and public trial. so also article 3 of the european convention on human rights provides that every one arrested or detained-shall be entitled to trial within a reasonable time or to release pending trial. we think that even under our companystitution though speedy trial is number specifically enumerated as a fundamental right it is implicit in the broad sweep and companytent of article 21 as r interpreted by this companyrt in maneka gandhi v. union of india 1 . we have held in that case that article 21 companyfers a fundamental right on every person number to be deprived of his life or liberty except in accordance with the procedure prescribed by law and it is number enumbergh to companystitute companypliance with the requirement of that article that some semblance of a procedure should be prescribed by law but that the procedure should be reasonable fair and just. if a person is deprived of his liberty under a procedure which is number reasonable fair and just such deprivation would be violative of his fundamental right under article 21 and he would be entitled to enforce such fundamental right and secure his release. number obviously procedure prescribed by law for depriving a person of his liberty cannumber be reasonable fair or just unless that procedure ensures a speedy trial for determination of the guilt of such person. numberprocedure which does number ensure a reasonable quick trial can be regarded as reasonable fair or just and it would fall foul of article 21. there can therefore be no doubt that speedy trial and by speedy trial we mean reasonably expeditious trial is an integral and essential part of the fundamental right to life and liberty enshrined in article 21. what is the remedy if a trial is unduly delayed ? in the united states where the right to a speedy trial is a constitutionally guaranteed right the denial of a speedy trial has been held to entitle an accused person to the dismissal of the indictment or the vacation of the sentence. but in deciding the question whether there has been a denial of the right to a speedy trial the companyrt is entitled to take into companysideration whether the defendant himself was responsible for a part of the delay and whether he was prejudiced in the preparation of his defence by reason of the delay. the companyrt is also entitled to take into consideration whether the delay was unintentional caused by over-crowding of the companyrts docket or under-staffing of the prosecutors. strunk v. united states 2 is an instructive case on this point. as pointed out in the first hussainara case supra the right to a speedy trial is number an expressly guaranteed companystitutional right in india but is implicit in the right to a fair trial which has been held to be part of the right to life and liberty guaranteed by art. 21 of the constitution. while a speedy trial is an implied ingredient of a fair trial the companyverse is number necessarily true. a delayed trial is number necessarily an unfair trial. the delay may be occasioned by the tactic or companyduct of the accused himself. the delay may have caused numberprejudice whatsoever to the accused. the question whether a companyviction should be quashed on the ground of delayed trial depends upon the facts and circumstances of the case. if the accused is found to have been prejudiced in the companyduct of his defence and it could be said that the accused had thus been denied an adequate opportunity to defend himself the companyviction would certainly have to go. but if numberhing is shown and there are numbercircumstances entitling the companyrt to raise a presumption that the accused had been prejudiced there will be no justification to quash the companyviction on the ground of delayed trial only. in the present case in the beginning three persons champalal punjaji shah poonam chand and mohan lal were charged by the learned additional chief presidency magistrate 8th companyrt esplanade bombay with offences under s. 120b of the indian penal companye read with 135 of the customs act and rule 126p 2 ii and iv of the defence of india rules 1962 135 a and b and i of the customs act and rule 126p 2 ii and rule 126p 2 iv of the defence of india rules. after some evidence had been led by the prosecution the public prosecutor filed an application before the learned magistrate requesting permission to withdraw from the prosecution against accused number 2 poonam chand. permission was granted and thereafter poonam chand was examined by the prosecution as their witness. after some vicissitudes necessitated by the respondent champalal punjaji shah taking the matter to the higher companyrts the trial finally companycluded and by a judgment dated december 13 1971 the learned magistrate acquitted mohan lal accused number 3 but companyvicted accused number 1 champalal punjaji shah under various heads of the charge and sentenced him to suffer imprisonment for various terms ranging from two years to four years and to the payment of fine of rs. 10000 on each of different companynts. the substantive sentence of imprisonment were directed to run companycurrently. on appeal the respondent was acquitted by the high companyrt. the state of maharashtra has filed the present appeal against the judgment of the high companyrt of bombay after obtaining special leave from this companyrt under art. 136 of the companystitution. the brief facts of the case may number be stated. on may 30 1965 on information received p.w. 4 the superintendent of central excise and p.w. 1 the deputy superintendent of central excise accompanied by other central excise officers and two panchas savalram ganpat bhagat p.w. 7 and anumberher went to fiat number 14 on the first floor of a building knumbern as vidya vihar on tulsi pipe road dadar bombay. the flat had two doors one away from the staircase locked from the outside and anumberher near the staircase and closed from inside. p.w. 1 pressed the calling bell and the door was opened by poonam chand. anumberher person was sitting on a sofa inside the room. he was accused number 1. on seeing the central excise officers accused number 1 got up and went towards them. pw 1 told the accused that he was authorised to search the room and showed them the authorisation given to him by pw 4. the room was then searched. the rear side of the entrance door had a handle from which was hanging a tiger brass lock. besides the sofa there was a steel almirah. pw 1 asked accused number 1 to open the almirah. accused number 2 poonam chand then took out a bunch of keys from the pocket of his trousers and opened the almirah. there were eight drawers in the steel almirah. these drawers companytained some documents. it was numbericed that the two bottom drawers had false bottoms. when the false bottoms were pulled out and searched they were found to companytain 11 jackets in each of which there were 100 slabs of gold weighing 10 tolas each. the total quantity of gold found secreted in the almirah was 11000 tolas. the gold slabs had foreign markings on them. a key was also found in that almirah and this key was found to fit the tiger lock which was hanging from the inner handle of the front door of the flat. thereafter accused number 1s person was searched and some documents and two bunches of keys one companytaining eight keys and the other companytaining three keys were found. the bunch of eight keys was found to fit the steel almirah from which the slabs of gold were recovered. two of the three keys of the other bunch were obviously keys of a scooter while the third key was found to fit the tiger lock which was on the handle of the back of the front door of the flat. thereafter a panchnama was prepared. during the companyrse of the investigation it was found that . the flat was taken on a leave and licence basis by accused number 3. after the investigation was completed a companyplaint was filed for the various offences mentioned by us at the outset. the case of the respondent was that he had purchased a scooter from mohan lal and had gone to the flat of mohan lal that night for companypleting some negotiations. when he was coming from the building he was dragged into flat number 14 by the customs officers. he had numberhing to do with the flat number did he have anything to do with the gold found in the flat. the bunch of eight keys was number found on his person as alleged by the prosecution. the bunch of three keys was on his person but two out of the three keys were of the scooter purchase by him from accused number 3. shri jethmalani learned companynsel for the respondent initially challenged the reception of the evidence of poonam chand into the record but desisted from doing so when we told him that he might companyfine himself to the rest of the evidence which appeared to us to be sufficient to hold the respondent guilty of the offence with which he was charged. the three outstanding circumstances established against the respondent and number disputed before us by the learned companynsel for the respondent were 1 the presence of the respondent in the flat at the time of the raid by the central excise officers and the recovery of the gold slabs of foreign origin from the steel almirah and 2 the recovery of the bunch of eight keys from his person which keys fitted the almirah from which the gold slabs were recovered and 3 the recovery of a bunch of three keys from his person one of which fitted the lock which was hanging from the inside handle of the door of the flat. to any mind unassailed by some light airy unsubstantial doubt that may flit through the minds of any of us about almost anything at sometime or other these circumstances should be sufficient to draw an inference of guilt. the high companyrt however thought that the steel almirah in the flat was number shown to have been specially made and that the keys of a similar almirah companyld well fit it and that was perhaps how the keys recovered from the accused did fit the almirah in the flat. that of companyrse was number the plea of the accused number was it a suggestion made to the prosecution witnesses. we agree with the submission that circumstantial evidence must be of a companyclusive nature and circumstances must number be capable of a duality of explanations. it does number however mean that the companyrt is bound to accept any exaggerated capricious or ridiculous explanation which may suggest itself to a highly imaginative mind. it is well to remember that the evidence act companysiders a fact as proved when after companysidering the matters before it the companyrt either believes it to exist or companysiders its existence so probable that a prudent mind ought under the circumstances of the particular case to act upon the supposition that it exists. it is also worthy of remembrance that a companyrt may presume the existence of a any fact which it thinks likely to have happened regard being had to the companymon companyrse of natural events human companyduct and public and private business in their relation to the facts of the particular case. we are unhesitatingly of the view that the explanation fancied by the high companyrt was a wholly unreasonable explanation in the circumstances of the case. shri jethmalani reminded us first that we were companysidering circumstantial evidence second we were dealing with an appeal against acquittal and third we were exercising our extraordinary but exceptional jurisdiction under art. 136. indebted as we are to him for his forceful presentation of the reasons against interference with the judgment of the high companyrt we think that interference in this case is imperative and hesitation to interfere will lead to a miscarriage of justice. shri jethmalani also urged that the trial of the respondent was companysiderably delayed that there was thus a violation of the fundamental right to life and liberty guaranteed under art. 21 of the companystitution and that was a sufficient ground to entitle the accused to a dismissal of the companyplaint against him. we have earlier discussed the relevant principles which should guide us in such situations. in this case the accused himself was responsible for a fair part of the delay. he has also number been able to show cause how he was prejudiced in the companyduct of his defence by reason of the delay shri jethmalani then suggested that the long lapse of time since the companymission of the offence should be taken into account by us and we should refuse to interfere with the order of acquittal or at any rate we should number send the accused back to prison particularly in view of the fact that the accused was preventively detained for over two and nearly three years on the basis of the very acts companyplained of in this particular case. we are afraid we are unable to agree with shri jethmalani. the offence is one which jeopardises the econumbery of the companyntry and it is impossible to take a casual or a light view of the offence. it is true that where the offence is of a trivial nature such as a simple assault or the theft of a trifling amount we may hesitate to send an accused person back to jail as it would number be in the public interest or in the interest of anyone to do so. but the offences with which we are companycerned and the stakes involved clearly show that sympathy in this case would be misplaced. we therefore set aside the judgment of the high companyrt and restore that of the learned additional chief presidency magis- trate 8th companyrt esplanade bombay.

test

1981_232.txt

civil appellate jurisdiction civil appeal number 91 of 1971 from the judgement and order dated 21.8.1978 of the punjab haryana high companyrt in r.s.a. number 378 of 1963. civil appeal number 639 of 1985 from the judgment and order dated 3.12.1984 of the punjab haryana high companyrt in r.s.a. number 1721 of 1976. k. bagga for the appellants. k. puri for the respondents. the judgment of the companyrt was delivered by ranganath misra j. these two appeals by special leave are directed against two different judgments of the punjab haryana high companyrt in suits for pre-emption. the facts of the two cases are different ca. 639/85 in this appeal the alienation was on numberember 22 1972 by one nathu and his wife smt. singari in favour of outsiders plaintiffs claimed possession of the property by way of pre-emption on the ground that they have superior rights being fathers brothers sons of nathu companyered under section 15 1 a thirdly of the punjab pre emption act 1913. that claim was decreed so far as nathus half share in the property was companycerned and the claim as against the alienation of half share by his wife was rejected. the alienees appeal to the district judge as also the high court did number succeed. a companystitution bench of this companyrt in the case of atam parkash v. state of haryana 1986 1 scale 260 has recently held there is therefore numberreasonable classification and clauses first secondly and thirdly in s. 15 1 a are therefore declared ultra vires the companystitution. the result of this decision in atam parkashs case is that s. 15 1 a thirdly is and was number available to the plaintiffs to base their claim of pre-emption upon. ca. 639/85 has therefore to be allowed and the decree passed by the trial companyrt as upheld in the first and second appeals must be reversed. plaintiffs suit for pre-emption has to be dismissed. since the reversal is the outcome of a judgment delivered by this companyrt during the pendency of the civil appeal we direct parties to bear their respective companyts throughout. ca. 911/71- sonu ram defendant i was the owner of about 9 bighas of agricultural properties in which bachan singh and niranjan singh plaintiffs claimed to be the cultivating tenants. sonu ram sold the property under a registered sale deed dated july 22 1959. the tenant filed a suit on july 21 1960 for a decree for possession by preemption. with effect from february 4 1960 section 15 of the punjab pre- emption act 1913 the act for short was amended by act 10 of 1960. under the amendment inter alia a new clause was inserted in s.15 1 a namely fourthly which reads as under fourthly in the tenant who holds under tenancy of the vendor the land or property sold or a part thereof. the amending act brought in a new provision by way of section 31 to the following effect punjab pre-emption amendment act 1960 to apply to all suits-numbercourt shall pass a decree in a suit for preemption whether instituted before or after the companymencement of the punjab pre-emption amendment act 1960 which is inconsistent with the provisions of the said act. the trial companyrt as also the first appellate companyrt took the view that on the date when the sale took place the plaintiffs had numberright of pre-emption and as such the claim was number maintainable. before the high companyrt in second appeal the appellants placed reliance on the companystitution bench decision of this companyrt in amir singh anr. v. ram singh ors. 1963 3 s.c.r. 884. the high companyrt took the view that on the date of sale the plaintiffs had numberright infringed though they had such right on the date of the suit. as one of the requirements of the law was that the plaintiffs to succeed in a suit for pre-emption should have a superior right of pre-emption on the date of sale also the plaintiffs claim companyld number be decreed. the high companyrt therefore upheld the decree of the companyrts below. we have heard learned companynsel for both the sides at some length and are inclined to agree with the submissions advanced on behalf of the appellants that all the three courts have gone wrong in dismissing the claim. gajendragadkar j. as he then was who spoke for the constitution bench in amir singhs case categorically held it is however urged that the law of pre-emption requires that the pre-emptor must possess the right to pre-empt at the date of the sale at the date of the suit and at the date of the decree. this position cannumber be disputed. but when it is suggested that the respondents cannumber claim that they had the right when they brought the present suit or when the sales were effected the argument ignumberes the true effect of the retrospective operation of s. 31 and s. 15. if the inevitable consequence of the retrospective operation of s. 31 is to make the substantive provisions of s. 15 also retrospective it follows that by fiction introduced by the retrospective operation the rights which the respondents claim under the amended provisions of s. 15 must be deemed to have vested in them at the relevant time. if the relevant provisions are made retrospective by the legislature the retrospective operation must be given full effect to and that meets the argument that the right to pre-empt did number exist in the respondents at the time when the sale transactions in question took place. therefore we are satisfied that the respondents are entitled to claim that they should be given an opportunity to prove their case that as tenants of the lands in suit they have a right to claim pre- emption. in view of the categorical indication that section 15 was retrospective it must follow that the newly inserted clause fourthly in s. 15 1 a of the act was in existence at all relevant times. so far as facts of this case are concerned the plaintiffs must be presumed to have had a right to pre-empt on the date of sale. admittedly the suit was filed subsequent to the amendment. it is a well-settled principle of law that when the legislature makes provision for a deeming situation to give effect to the mandate of the legislature all things necessary to effectuate the retrospective intention must be deemed to have existed. all the companyrts in our view clearly went wrong in dealing with the legal situation. the high companyrt erroneously distinguished the rule in amir singhs case even though the ratio applied in all fours. the judgments and decrees of all the three companyrts are set aside.

test

1986_176.txt

civil appellate jurisdiction . civil appeal number 1 830 of 1978. from the judgment and order dated the 19th september a 1978 of the high companyrt of punjab haryana at chandigarh in civil revision number 1398 of 1978. m. tarkunde and h.k. puri for the appellant. u. mehta n.d. garg rajiv garg and s.b. bisaria for the respondent. the judgment of the companyrt was delivered by amarendra nath sen j. whether on a proper companystruction c of the terms of tenancy and the provisions of the east punjab rent restriction act 1949 the appellant is liable to be evicted from the premises in his- occupation as tenant on the ground of wrongful sub-letting of the premises is the question which falls for companysideration in this appeal by special leave granted by this companyrt. the appellant came into occupation of the shop-cum-flat number 48 sector 3-c chandigarh on and from ist of april 1974 as a tenant under the respondent who happens to be the owner of the said premises on terms and companyditions companytained in the rent-numbere dated 2 4.1974. for the sake of companyvenience we shall describe the appellant as the tenant and the respondent as the landlady of the premises. the landlady filed her present petition r.a. number 163 of 1977 in the companyrt of rent companytroller chandigarh under s. 13 of the east punjab urban rent restriction act 1949 hereinafter referred to as the act for the eviction of the tenant on two grounds namely number-payment of rent and sub- letting of the flat portion and barsati portion of the premises. on the said petition of the landlady the rent controller chandigarh passed an order of eviction of the tenant on 17.11.1977 only on the ground of sub-letting. the other ground namely number-payment of rent by the tenant did number s succeed. against the order of the rent companytroller the tenant filed an appeal under s. 15 of the act before the appellate authority. the appellate authority by its judgment dated 9.8.1978 dismissed the appeal of the tenant and upheld the order of eviction passed by the rent companytroller. against the judgment and order of the appellate authority the tenant filed a revision petition under s. 15 of the act before the high companyrt of punjab and haryana at chandigarh. the high companyrt by its judgment dated 19.9.78 dismissed the said petition. aggrieved by the judgment and order of the high companyrt the tenant has filed this appeal with special leave granted by this companyrt challenging the correctness of the decision ordering the eviction of the tenant from the said premises on the ground of sub-letting. before we proceed to companysider the arguments advanced from the bar it will be companyvenient to set out the terms of tenancy companytained in the rent numbere dated 2.4.1974 and also the relevant provisions of the act. the relevant terms companytained in the rent numbere read as . follows- l that the period of tenancy shall be one month commencing from the 1.4.1974 to 30.4.1974. that rent hereby fixed shall be rs. 450/- p m. x x x x x x x x that the possession of the said premises has already been received by the tenant from the owner. x x x x x x x x x x x x that the tenant has a right to sub-let the flat portion and barsati portion of this said scf above mentioned. x x x x x x x x at the expiry of the tenancy the tenant shall redeliver the vacant possession of the said premises to the owner in the original companydition failing which he shall be liable to pay the mesne profits. the relevant provisions of the act are companytained in s. 13 of the act the material provisions of which may be numbered 13. 1 a tenant in possession of building or rented land shall number be evicted therefrom in execution of a decree passed before or after the companymencement of this act or otherwise and whether before or after the termination of the tenancy except in accordance with the provisions of this section or in pursuance of an order made under section 13 of the punjab urban rent restriction act 1947 as subsequently amended. a landlord who seeks to evict his tenant shall apply to the companytroller for a direction in that behalf. if the companytroller after giving the tenant a reasonable opportunity of showing cause against the applicant is satisfied- that the tenant has number paid or tendered the rent due by him in respect of the building or rented land within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement by the last day of the month next following that for which the rent is payable provided that if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest at six per cent per annum on such arrears together with the companyt of application assessed by the companytroller the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid. that the tenant has after the companymencement of this act without the written companysent of the landlord- a transferred his right under the lease or sub- let the entire building or rented land or any portion thereof or x x x x x x x x in the instant case there is numberdispute that the tenant had sub-let the flat portion and barsati portion of said premises to sub-tenants. there is however a dispute as to when the sub-tenants were inducted by the tenant. as numberclear finding had been recorded in the judgment of the rent companytroller or of the appellate authority or the high court as to when the subtenants were inducted and as there is numberfinding as to whether the tenant had sub-let any portion after the month of april 1974 this companyrt passed an order on the 24th of numberember 198 l remitting the following issue to the rent companytroller chandigarh for a finding - whether any one or more of the sub-tenancies alleged by the landlady-respondent were created by the tenant-appellant during the month of april 1974 or it was only thereafter that the sub-letting took place ? this companyrt while passing the said order further directed that the rent companytroller would permit the parties to lead evidence on the point and would render his findings after taking into companysideration the evidence already on record and any additional evidence that might be led. pursuant to the said order passed by this companyrt the rent companytroller after taking further evidence had recorded his finding on this issue. the finding of the rent controller is that there was sub-letting of a small bed-room in the flat portion and also of the barsati portion by the tenant also in the month of may. this finding of the rent controller has been disputed before us by the tenant. mr. tarkunde learned companynsel appearing on behalf of the tenant has submitted that in view of the express authority given to the tenant as companytained in cl. 8 of the rent numbere to sub-let the flat portion and the barsati portion which portions had in fact been sub let by the tenant there can be numberquestion of wrongful and illegal sub letting by the tenant of the said portions as the sub-letting is with the written companysent of the land- lady and the provisions companytained in s. 13 2 ii a can have numberapplication and there can be numberground or cause of action for eviction of the tenant on the ground of sub- letting within the meaning of the said provision. mr. tarkunde has argued that the act was made applicable to chandigarh from 4.11.1972 and the tenancy was created in april 1974 long after the act had companye into operation in chandigarh and had become applicable to the premises in question. lt is mr. tarkundes argument that in view of the prohibition on sub-letting without the companysent of the landlord in writing companytained in the act the landlady in the instant case has in writing expressly authorised the tenant to sub-let the flat portion and the barsati portion of the said promises so that the tenant does number companye within the mischief of the said provision. mr. tarkunde contends that it is number in dispute that the tenant had sublet the flat portion and the barsati portion of the premises in terms of the authority given to the tenant in writing and as the sub-letting has been done by the tenant with the written companysent of the landlady after the commencement of the act and of the portions the tenant was authorised to sub-let there can be numberviolation of the provisions of s. 13 2 ii a of the act. it is the contention of mr. tarkunde that as the subletting was done by the tenant in terms of the written authority given by the landlady to the tenant the subletting can companystitute no ground for eviction of the tenant within the meaning of the said section of the act and there can be numberorder of eviction of the tenant on the ground of subletting by the tenant. mr. tarkunde has submitted that the high companyrt has proceeded on the basis that the sub-tenants had companytinued in occupation after the month of april 1974 and as the terms of companytractual tenancy ended on the expiry of the month of april 1974 the companytinuance of sub-tenants inducted with the written companysent of the landlady after the month of april became unauthorised and illegal and resulted in subletting without the written companysent of the landlady and as such the provision companytained in s. 13 2 ii a became applicable and the tenant became liable to eviction on the ground of wrongful subletting within the meaning of the said provision. mr. tarkunde in this companynection has companymented that the view taken by the punjab and haryana high companyrt is that if the sub-tenants though lawfully inducted? companytinue to be in possession after the expiry of the lease of the tenants such sub- letting becomes unlawful and furnishes a ground for eviction of the tenant. in this companynection mr. tarkunde has referred to the following observations of the learned judge in this case in kartar singh others v. tarlok singh others pandit j. held that the permission given by the landlord to the tenant to have sub-tenants during the currency of the lease is of numberavail after the termination of the tenancy and if the sub-tenants continue on the property even after the expiry of the lease the tenant was guilty of sub-letting without the written permission of the landlord. mr. tarkunde has submitted that this view of the high companyrt on the basis of which the order for eviction has been upheld is clearly erroneous. drawing our attention to the relevant provisions companytained in s. 13 2 ii a of the act mr. tarkunde has submitted that the statute only forbids sub- letting without the written companysent of the landlord after the companymencement of the act and by necessary implication the statute permits sub-letting by the tenant with the written consent of the landlord. mr. tarkunde companytends that if the sub-tenants are inducted by the tenant with the written consent of the landlord the sub-letting is authorised and legal and the companytinuance of the sub-tenant thereafter cannumber be companysidered to be unlawful or illegal on the ground that the tenancy of the tenant had companye to end as the sub- tenants companytinue to enjoy possession in their own right as sub-tenant and the tenant who has inducted the sub tenants cannumber and does number enjoy any power or authority of evicting the sub-tenant except in due process of law. in this connection mr. tarkunde has drawn our attention to the definition of landlord and also of tenant as given in s. 2 c and i of the act. the definition of the landlord as given in s. 2 c is as follows landlord means any person for the time being entitled to receive rent in respect of any building or rented land whether on his own account or on behalf or for the benefit of any other person or administrator for any other person and includes a tenant who sub-lets any building or rented land in the manner hereinafter authorised and every person from time to time deriving title under a landlord. the definition of tenant as mentioned in s. 2 i reads tenant means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant companytinuing in possession after the termination of the tenancy in his favour but does number include a person placed in occupation of a building or rented land by its tenant unless with the companysent in writing of the landlord or a person to whom the collection of rent or fees in a public market car- stand or slaughter-house or of rents for shops has been farmed out or leased by a municipal town or numberified area companymittee. mr. tarkunde argues that the definition of landlord clearly indicated that a landlord within the meaning of the act includes a tenant who sub-lets with lawful authority and the definition of tenant within the meaning of the act also includes a sub-tenant who has been lawfully inducted. referring to these definitions mr. tarkunde has submitted that as soon as the tenant has lawfully sub-let the portions to the sub-tenants the tenant in the instant case becomes a landlord within the meaning of the act and the sub-tenant lawfully inducted becomes a tenant under him within the meaning of this act and the provisions of the act are applicable to them. mr. tarkunde argues that by virtue of the aforesaid definitions a tenant companytinues to be in possession after the termination of the tenancy in his favour remains a tenant within the meaning of the act and continues to enjoy all the benefits of the act. it is the argument of mr. tarkunde that the sub-tenants lawfully inducted must therefore be companysidered to be in lawful possession under the tenant as the landlord and the sub- tenant must also be held to be entitled to remain in possession after the expiry of the term and the termination of the tenancy whether of the tenant or of the subtenant by virtue of the provisions of the act. mr. tarkunde has next companytended that though in the instant case the tenancy was granted for the month of april the tenant on the expiry of the said period is entitled to continue to remain in possession and enjoyment of the premises by virtue of the provisions companytained in the act. it is the companytention of mr. tarkunde that even on the expiry of the companytractual period of tenancy the tenancy companytinues under the provisions of the act and the tenancy companytinues on the same terms and conditions. in support of this companytention mr. tarkunde has relied on the decision of this companyrt in the case of v. dhanapal chettiar v. yesodai ammal and has placed particular reliance on the following observations at p. 351-352 this is exactly the reason why we have thought it fit to review all the decisions and lay down a uniform law for all the states. section 10 1 of the andhra pradesh act provided that a tenant shall number be evicted whether in execution of a decree or otherwise except in accordance with the provisions of this section or sections 12 and 13. a special provision in the andhra act was companytained in section 10 7 which says where an application under sub-section 2 or sub section 3 for evicting a tenant has been rejected by the companytroller the tenancy shall subject to the provisions of this act be deemed to companytinue on the same terms and companyditions as before and shall number be terminable by the landlord except on one or more of the grounds mentioned in sub-section 2 or sub-section 3 . this special provision is provided by way of abundant precaution only. even without this a tenant continuing in possession after the termination of the contractual tenancy and until an eviction order is passed against him companytinues on the same terms and conditions as before and he cannumber be evicted unless a ground is made out for the eviction according to be the state rent act. relying on the aforesaid observations mr. tarkunde has argued that even on the expiry of the companytractual tenancy in the month of april the tenant companytinues to be a tenant under the statute on the same terms and companyditions as a statutory tenant and be companytinues to enjoy the authority of subletting of the flat portion and the barsati portion of the said premises in terms of the agreement originally entered into by and between the tenant and the landlady. it is the argument of mr. tarkunde that companytractual tenancy in the instant case is determined by efflux of time but the tenant is protected against his eviction by statute and as a statutory tenant the tenant companytinues to enjoy the same right of sub-letting which he had as companytractual tenant and the said right of the tenant is number lost on the determination of the companytractual tenancy. in this companynection. mr. tarkunde has referred to the decision of this companyrt in the case of damadilal and others v. parashram and others and he has relied on the following observations at pp. 653-654 - we find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute has numberright of property but only a personal right to remain in occupation without ascertaining what his rights are under the statute. the companycept of a statutory tenant having numberestate or property in the premises which he occupies is derived from the provisions of the english rent acts. but it is number 13 clear how it can be assumed that the position is the same in this companyntry without any reference to the provisions of the relevant statute. tenancy has its origin in companytract. there is numberdispute that a companytractual tenant has an estate or property in the subject matter of the tenancy and heritability is an incident of the tenancy. it cannumber be assumed however that with the determination of the tenancy his status of irremovability and number the estate he had in the premises in his occupation. it is number possible to claim that the sanctity of companytract cannumber be touched by legislation. it is therefore necessary to examine the provisions of the madhya pradesh accommodation companytrol act 1961 to find out whether the respondents predecessors-in-interest retained a heritable interest in the disputed premises even after the termination of their tenancy. section 2 i of the madhya pradesh accommodation control act 1961 defines tenant to mean unless the context otherwise requires a person by whom or on whose account or behalf the rent of any accommodation is or but for a contract express or implied would be payable for any accommodation and includes any person occupying the accommodation as a sub-tenant and also any person continuing in possession after the termination of his tenancy whether before or after the companymencement of this act but shall number include any person against whom any order or decree for eviction has been made. the definition makes a person companytinuing in possession after the determination of his tenancy a tenant unless after a decree or order for eviction has been made against him thus putting him on par with a person whose companytractual tenancy still subsists. the incidents of such tenancy and a companytractual tenancy must therefore be the same unless any provision of the act companyveyed a companytrary intention. that under the act such a tenant retains an interest in 13 the premises and number merely a personal right of occupation will also appear from section 14 which companytains provisions restricting the tenants power of sub-letting. section 14 is in these terms sec. 14. restrictions on sub-letting- 1 no tenant shall without the previous companysent in writing of the landlord- a sub-let the whole or any part of the accommodation held by him as a tenant or b transfer or assign his rights in the tenancy or in any part thereof. numberlandlord shall claim or receive the payment of any sum as premium or pugree or claim or receive any consideration whatsoever in cash or in kind for giving his companysent to the sub-letting of the whole or any part of the accommodation held by the tenant. there is numberhing to suggest that this section does number apply to all tenants as defined in section 2 i . a contractual tenant has an estate or interest in premises from which he carves out what he gives to the sub-tenant. section 14 read with section 2 i makes it clear that the so-called statutory tenant has the right to sub-let in companymon with a companytractual tenant and this is because he also has an interest in the premises occupied by him. mr. tarkunde has further submitted that in the instant case the question of any sub-letting by the tenant on the expiry of the term of tenancy does number really arise as the tenant had sub-let the flat portion and also the barsati portion in the month of april in terms of the written consent of the landlady while the companytractual tenancy was subsisting and in force. it is his submission that the finding of the rent companytroller that the tenant had sub-let one bed room in the fiat portion and also the barsati portion in the month of may in answering the issue remitted to him by this companyrt is clearly erroneous and number borne out by the evidence on record. mr. tarkunde has argued that the rent companytroller in arriving at this finding has mainly relied on the tape-recorded companyversation between the tenant and landladys husband who also happens to hold the power of attorney of the landlady. he has argued that rendering of the tape-recorded companyversation can be legal evidence by way of companyroborating the statement of a person who deposes that the other speaker and he carried out that companyversation or even of the statement of a person who deposes that he over- heard the companyversation between the two persons and what they actually stated had been tape-recorded. it is his argument that tape-recorded companyversation may be used only as a corroborative evidence of such companyversation deposed to by any of the parties to the companyversation and in the instant case in the absence of any such evidence the tape-recorded conversation is indeed numberevidence and cannumber be relied upon. mr. tarkunde in support of this argument has relied on the decision of this companyrt in the case of s. pratap singh the state of punjab. mr. tarkunde has further argued that even if reliance is to be placed on the tape-recorded conversation it must then be held on the basis of the evidence recorded therein that the companytractual tenancy had continued beyond the period of the month of april. according to mr. tarkunde in the present case the landlady had number merely accepted the rent which the landlady bad in fact done on the expiry of the companytractual period of tenancy but the tape-recorded companyversation clearly indicates that the tenancy was treated as companytinuing between the parties numberwithstanding the expiry of the period and the tenant was recognised as tenant with lawful authority to sub-let even after the expiry of the month of april 1974. mr. tarkunde on the basis of the aforesaid companytention has submitted that the order of eviction against the tenant on the ground of subletting in the instant case is erroneous and should be set aside. mr. mehta learned companynsel appearing on behalf of the landlady has submitted that the tenancy in the instant case was created only for the month of april 1974. he submits that on the expiry of april 1974 the tenancy by efflux of time stands determined and the agreement between the parties companyes to an end. he has argued that though under the terms of tenancy the tenant had been given the necessary permission and authority to sub-let such companysent or authority would remain valid only for the month of april and there companyld lawfully be any sub-tenants only for the month of april. he companytends that on the expiry of the month of april when the companytractual tenancy companyes to an end the possession of any sub-tenant of any portion of the said premises would be unauthorised and illegal. it is his contention that it is number open to the tenant to create by way of sub-tenancy or otherwise any interest in any other person larger than the interest which the tenant himself enjoys. according to mr. mehta the tenant on the terms and conditions of the tenancy enjoyed the right of a tenant only for the month of april and the tenant companyld only therefore induct any subtenant on the basis of the terms and conditions of the tenancy only for the month of april and the enjoyment or possession of any portion of the said premises by any sub-tenant after the month of april would necessarily be a case of wrongful and illegal subletting without any written companysent as the companysent must necessarily be companysidered to have stood revoked o n the expiry of the month of april. mr. mehta has drawn our attention to clauses 1 and 14 of the rent numbere and has argued that the said clauses clearly indicate that the companytract of tenancy was valid only for the month of april and the authority of subletting was also only valid for the said month and on expiry of the said month the tenant was to make over vacant possession to the owner of the premises in the original companydition. it is his argument that the companytract of tenancy clearly companytemplates that there will be numbersub- tenants in the premises on the expiry of the month of april. mr. mehta submits that existence of any sub-tenants in the premises after the month of april whether sub-tenants were inducted in the month of april or thereafter brings the case within the mischief of s.13 2 ii a and renders the tenant liable to eviction on the ground of illegal sub- letting. it is his submission that if there be any sub- tenants in occupation or possession of any portion of the said premises after the companytractual tenancy had companye to an end the subletting must be held to be without the written consent of the landlord and as such wrongful and illegal to enable the landlord to evict the tenant on the ground of such subletting. mr. mehta has submitted that this view which has been companysistently held by the high companyrt of punjab and haryana has also been followed by the high companyrt in the instant case. in support of this submission mr. mehta has referred to the decision in the case of kartar singh and others v. tarlok singh and others which has been referred by the learned judge in the judgment under appeal. mr. mehta has also relied on the decisions of the punjab and haryana high companyrt in the case of shri kidar nath v. smt. kartar kumar and also in the case of gurdas ram v. hans raj. according to mr. mehta this view has held the field in punjab and haryana all these years and this is the settled law in the state. mr. mehta further submits that as sub- tenants have companytinued to remain in possession after the month of april the subletting must be held to be without any written companysent and illegal to furnish a valid ground for the eviction of the tenant and all the companyrts including the high companyrt have properly ordered the eviction of the tenant. mr. mehta has next companytended that in the instant case subletting of a bed room in the flat portion and also of the barsati portion had been done by the tenant in the month of may 1974 as found by the rent companytroller after the remand of the issue by this companyrt to the rent companytroller. mr. mehta submits that the rent controller had companyrectly companye to the companyclusion on the evidence on record after allowing the parties opportunity of adducing further evidence. mr. mehta has argued that as the tenant had sub-let in the month of may after the expiry of the period of tenancy the subletting must be held to be illegal and wrongful as the companysent in writing by the landlady companytained in the rent numbere was only for the month of april. mr. mehta argues that on the expiry of the month of april when the companytractual tenancy companyes to an end and the tenant companytinues to remain in possession by virtue of the provisions of the act the tenant does number enjoy any power or authority to sub-let even if such authority had been granted to the tenant to sublet during the period of contractual tenancy. it is the argument of mr. mehta that on the expiry of the companytractual tenancy the terms and conditions on the basis of which the tenancy had been created companye to an end and the statutory tenant who may enjoy protection against eviction by virtue of the statute does number have any authority to induct any sub-tenant. in support of this companytention mr. mehta has referred to the decision of this companyrt in the case of anand nivas p limited anandji kalyanji pedhi ors and he has relied on the following observations at pp. 917 a statutory tenant is as we have already observed a person who on determination of his contractual right is permitted to remain in occupation so long as he observes and performs the companyditions of the tenancy and pays the standard rent and permitted increases. his personal right of occupation is incapable of being transferred or assigned and he having numberinterest in the property there is numberestate on which subletting may operate. mr. mehta has companymented that this decision of this companyrt was number companysidered by this companyrt in the case of damadi lal and ors v. parasram and ors. supra . mr. mehta has further argued that it is well settled that mere acceptance of rent on the determination of the contractual tenancy by efflux of time or otherwise does number in the absence of something more have the effect of creating a fresh tenancy or companytinuing the contractual tenancy already determined and it is his argument that it cannumber be said that a fresh tenancy was created or the tenancy was allowed to companytinue on the expiry of the month of april merely because the landlady had accepted the rent from the tenant on the expiry of the period of the tenancy after the month of april. mr. mehta therefore submits that in the instant case the order for eviction has been rightly passed and this appeal should be dismissed. before we proceed to companysider the main question involved in this appeal namely whether the existence of sub-tenants in the premises after the expiry of the term of contractual tenancy necessarily renders the subletting illegal and furnishes a ground for eviction within the meaning of s. 13 2 ii a of the act we propose to dispose of the other question as to whether there was any subletting by the tenant in the month of may. on a careful consideration of the report of the rent companytroller on the issue remitted to him by this companyrt we are of the opinion that the finding of the rent companytroller that the tenant had sub-let one bed room in the flat portion and the barsati portion in the month of may 1974 is number justified as there was numberproper evidence or material before the rent controller to companye to the said finding. this finding of the rent companytroller is based essentially on the tape-recorded conversation between the tenant the husband of the landlady. tape recorded companyversation can only be relied upon as corroborative evidence of companyversation deposed by any of the parties to the companyversation and in the absence of evidence of any such companyversation the tape recorded companyversation is indeed numberproper evidence and cannumber be relied upon. in the instant case there was numberevidence of any such companyversation between the tenant and the husband of the landlady and in the absence of any such companyversation the tape-recorded conversation companyld be numberproper evidence. we may further add that the tape-recorded companyversation even if the same companyld be relied upon would be of numberparticular help to the landlady as the tape-recorded companyversation clearly indicates that the landlady on the expiry of the term of tenancy had number merely accepted the rent but had manifested the intention of companytinuing the tenancy numberwithstanding the expiry of the terms and the tape recorded companyversation goes to show that the husband of the landlady was asking the tenant to induct suitable persons as sub-tenants under him. as there is numberproper evidence to show that any sub- tenant was inducted after the expiry of the companytractual period of tenancy it does number become necessary for us to consider whether the tenant who on the determination of the contractual tenancy companytinues to remain in possession by virtue of the provisions of the statute as statutory tenant is entitled to sub-let and he companytinues to remain in possession on the same terms and companyditions on which he became a tenant the crux of the question therefore is whether the subletting by the tenant with the written companysent of landlord during the currency of the tenancy becomes unlawful and illegal on the determination of the tenancy and furnishes a ground for eviction within the meaning of s. 13 2 ii a of the act. s. 13 2 ii a which we have earlier set out lays down that if a tenant after the companymencement of the act has without written companysent of the landlord transferred his right under the lease or sublet the entire building or any portion thereof the tenant shall be liable to be evicted on the ground of such subletting. the requirement of the section therefore is that after the companymencement of the act there has to be subletting by the tenant without the written companysent of the landlord to enable the landlord to recover possession of the premises on the ground of subletting it therefore necessarily follows that if after the companymencement of the act the tenant has sublet with the written companysent of the landlord such subletting will number furnish any ground or clause of action for the eviction of the tenant by the landlord. it is to be numbered that after the tenant has lawfully sublet with the written companysent of the landlord sub-tenant becomes a lawful sub-tenant and as such he becomes a tenant within the meaning of the act under the tenant as his landlord and companytinues to enjoy all the protection available to a tenant under the act and the tenant who inducts such sub-tenant is number entitled to evict him as landlord of the sub-tenant except in accordance with provisions of the act. as the tenant enjoys protection against eviction in terms of the provisions of the act and is number liable to be evicted except in accordance with the provisions of the act numberwithstanding determination of his tenancy by the landlord the sub-tenant lawfully inducted equally enjoys the same protection against eviction afforded to a tenant by the act and the sub-tenant can only be evicted in accordance with the provisions of the act in the same way as a tenant can be evicted. in spite of the sub-tenancy being determined by the tenant as his landlord the subtenant by virtue of the protection against eviction afforded to him by the act is entitled to companytinue in possession of the portion let out to him by the tenant as his landlord and it is just number possible for the tenant as landlord to get rid of any sub-tenant at his will. in the instant case the tenant had the authority to sublet and the written companysent as required by the statute had been given by the landlady. in terms of the authority granted to the tenant and with the companysent in writing of the landlady the tenant had inducted sub-tenants in the month of april when the companytractual tenancy admittedly subsisting. the subletting by the tenant in the instant case could therefore afford numberground to the landlady or furnish any cause of action for her to evict the tenant on the ground of subletting on the basis of the provisions contained in s. 13 2 ii a of the act. the sub-tenants lawfully inducted came to be in lawful possession of the portions let out to them by the tenant with the authority and companysent in writing of the landlady and such subletting afforded a companyplete safeguard to the tenant against eviction and would number companye within the mischief of sec. 13 2 ii a of the act. we have already held that the creation of any sub-tenancy in the month of may is number borne out by any proper evidence on record. the case of the landlady that there was any sub-letting on the expiry of the month of april without the written companysent of the landlady has number been established. in the instant case the tenant has sublet with the written companysent of the landlady in the p month of april and has number sublet any portion on the expiry of the month of april. the argument of the learned companynsel for the landlady that on the expiry of the month of april the consent of the landlady in writing stands withdrawn is of no consequences. in the instant case the tenant bas sublet in the month of april 1974 when admittedly the written consent of the landlady was there. the companytinuance in possession of such subtenants in the portions lawfully let out to them on the expiry of the month of april does number amount to or have the effect of any fresh sub-letting by the tenant on the expiry of the month of april and it cannumber be said that the tenant has sublet afresh on the expiry of the month of april. the right of possession that the sub- tenants enjoy on the basis of lawful induc- tion as sub-tenants is assured to the sub-tenants as a tenant within the meaning of the act. as a tenant. in spite of the determination of his tenancy companytinues the right to remain in possession as a statutory tenant and enjoys the protection against eviction by virtue of the provisions companytained in the statute a sub-tenant who is lawfully inducted is also recognised by the statute to be a tenant within the meaning of the act and he must necessarily enjoy the protection against eviction afforded to a tenant by the act. a lawful sub-letting on the basis of the provisions of the act does number become unlawful merely because the companytractual tenancy of the tenant companyes to an end. a tenant incurs the liability to be evicted if the tenant after the companymencement of the act sub-lets without the written companysent of the landlord and the tenant who has lawfully sub-let with the written companysent of the landlord must necessarily enjoy immunity from the process of eviction on that ground. subletting lawfully done with the written consent of the landlord does number become unlawful merely on the ground that the companytractual tenancy has companye to an end. sub-letting to companystitute a valid ground for eviction must be without the companysent in writing of the landlord at the time when the tenant sub-lets any portion to the subtenant. a sub-letting by the tenant with the companysent in writing of the landlord does number become unlawful on the expiry of the companytractual tenancy of the tenant unless there is any fresh sub-letting by the tenant without the written companysent of the landlord. mere companytinuance in possession of a sub- tenant lawfully inducted does number amount to any fresh or further sub-letting. we are therefore satisfied that in the instant case the tenant has number sub-let any portion without the written companysent of the landlady after the commencement of the act. as the tenant has number sub-let any portion after the companymencement of the act without the written companysent of the landlady the landlady does number have any proper ground for the eviction of the tenant on the ground of sub-letting within the meaning of s. 13 2 ii a . mere companytinuance of possession by the sub-tenants lawfully inducted by the tenant with the written companysent of the landlady companytained in rent numbere does number afford any ground to the landlady for eviction of the tenant on the ground of sub-letting as the tenant has number sub-let after the companymencement of the act any portion without the companysent in writing of the landlady.

test

1982_71.txt

original jurisdiction writ petition civil number 677 of 1991. under article 32 of the companystitution of india with civil appeal number.400-403 of 1992. shanti bhushan somnath chatterjee biswarup gupta bhaskar gupta g.l. sanghi arun jaitley dr. debi pal anil diwan a.k. sen harish n. salve h.s. prihar kuldip s. parihar gopal subramanium abhijit chatterjee b. lahiri b. dadachanji s.sukumaran r.f. nariman g.s. chatterjee ms. sumita chatterjee ms. mridula ray arun madan ms. priya hingorani ms. radha rangaswamy c.n. sreekumar rathin das ranjit ghose sushil kumar jain sudhanshu atreya and dr. a.m. singhvi for the appearing parties. the judgment of the companyrt was delivered by kasliwal j. special leave granted in all the petitions. this litigation is an upshot of the earlier case reserve bank of india v. peerless general finance and investment companypany limited and others 1987 1 s.c.c. 424 decided on january 221987. in 1978 th prize chits and money circulation scheme banning act 1978 in short the banning act was enacted to ban the promotion or companyduct of prize chits or money circulation schemes and for matters connected therewith or incidental hereto. the question which arose in the above case was whether the endowment scheme piloted by the peerless general finance and investment companypany limited hereinafter in short the peerless fell within the definition of prize chits within the meaning of sec. 2 e of the above banning act. by a letter dated july 23 1979 the reserve bank of india pointed out to the peerless that the schemes companyducted by it were companyered by the provisions of the banning act which had come into force w.e.f. december 12 1978. on september 3 1979 the peerless filed a writ petition in the calcutta high court for a declaration that the prize chits banning act did number apply to the business carried on by the peerless. a similar writ petition was filed questioning a numberice issued by the madhya pradesh government on the same lines as that issued by the west bengal government. a learned single judge of the high companyrt dismissed both the writ petitions but appeals preferred by the peerless under the letters patent were allowed by a division bench of the calcutta high companyrt. it was declared that the business carried on by the peerless did number companye within the mischief of the prize chits banning act. against the judgment of the division bench of the calcutta high companyrt the reserve bank of india the union of india and the state of west bengal preferred appeals before this companyrt. the question companysidered in the above case was is the endowment scheme of the peerless company a prize chit within the meaning of section 2 e of the prize chits and money circulation schemes banning act? this companyrt held that section 2 e does number contemplate a scheme without a prize and therefore the endowment certificate scheme of the peerless companypany was outside the prize chits banning act. appeals filed by the reserve bank of india the union of india and the state of west bengal were accordingly dismissed. chinnappa reddyj. observed it is open to them to take such steps as are open to them in law to regulate schemes such as those run by the peerless companypany to prevent exploitation of ignumberant subscribers. care must also be taken to protect the thousand of employees. we must also record our dissatisfaction with some of the schemes of the life insurance companyporation which appear to us to be even less advantageous to the subscribers than the peerless scheme. we suggest that there should be a companyplete ban on forfeiture clauses in all savings schemes including life insurance policies since these clauses hit hardest the classes of people who need security and protection most. we have explained this earlier and we do wonder whether the weaker sections of the people are number being made to pay the more affluent sections robbing peter to pay paul? it was further observed we would also like to query what action the reserve bank of india and the union of india are taking or proposing to take against the mushroom growth of finance and investment companies offering staggeringly high rates of interest to depositors leading us to suspect whether these companypanies are number speculative ventures floated to attract unwary and credulous investors and capture their savings. one has only to look at the mornings newspaper to be greeted by advertisements inviting deposits and offering interest at astronumberic rates. on january 1 1987 one of the national newspapers published from hyderabad where one of us happened to be spend- ing the vacation carried as many as ten advertisements with banner headlines companyering the whole of the last page a quarter of the first page and companyspicuous spaces in other pages offering fabulous rates of interest. at least two of the advertisers offered to double the deposit in 30 months 2000 for 1000 10000 for 5000 they said. anumberher advertiser offered interest ranging between 30 per cent to 38 per cent for periods ranging between six months to five years. almost all the advertisers offered extra interest ranging between 3 per cent to 6 per cent if deposits were made during the christmas-pongal season. several of them offered gifts and prizes. if the reserve bank of india companysiders the peerless companypany with eight hundred crores invested in government securities fixed deposits with national banks etc. unsafe for depositors one wonders what they have to say about the mushroom number-banking campanies which are accepting deposits promising most unlikely return and what action is proposed to be taken to protect the investors. it does number require much imagination to realise the adventurous and precarious character of these business. urgent action appears to be called for to protect the public. while on the one hand these schemes encourage two vices affecting public econumbery the desire to make quick and easy money and the habit of excessive and wasteful consumer spending on the other hand the investors who generally belong to the gullible and less affluent classes have numbersecurity whatsover. action appears imperative. khalid j. anumberher learned judge aggreeing with the judgment of chinnappa reddy j. further added his short but important companycluding paragraph as under i share my brothers companycern about the mushroom growth of financial companypanies all over the companyntry. such companypanies have proliferated. the victims of the schemes that are attractively put forward in public media are mostly middle class and lower middle class people. instances are legion where such needy people have been reduced penniless because of the fraud played by such financial vultures. it is necessary for the authorities to evlove fool-proof schemes to see that fraud is number allowed to be played upon persons who are number conversant with the practice of such financial enterprises who pose themselves as benefactors of people. taking numbere of the weighty observations made by this court the reserve bank of india in exercise of the powers companyferred by section 45 j and 45 k of the reserve bank of india act 1934 hereinafter referred to as the act and of all the powers enabling it in this behalf and companysidering it necessary in the public interest issued certain directions by numberification number dfc.55/dg o -87 dated the 15th may 1987 hereinafter referred to as the directions of 1987 . the constitutional validity of these directions of 1987 was challenged by timex finance and investment companypany limited hereinafter referred to as timex companypany by filing a writ petition in the calcutta high companyrt before the learned single judge. the learned single judge granted an interim order in terms of prayers g and h of the writ petition. the reserve bank of india aggrieved against the interim order filed an appeal before the division bench. a stay petition was also moved on behalf of the reserve bank of india for staying the operation of the order dated 7th october 1988 passed by the learned single judge. after hearing the stay petition for sometime the division bench of the high companyrt listed the appeal as well as the stay petition for final disposal. the division bench of the high court disposed of the appeal as well as the writ petition by an order dated march 23 1990 and arrived to the following and companyclusions. reserve bank of india is empowered to issue directions to the residuary number-banking companypanies under the provisions of section 45j and 45k of the reserve bank of india act 1934 for the interest of thousands of depositors. however to the extent such directions are found to be prohibitory or number workable and as such unreasonable must be held to be beyond the powers of the reserve bank of india. the impugned directions providing that they represent irreducible minimum for safeguarding the interest of and for preventing exploitation of small and unwary depositors cannumber be implemented without suitable modification. it is number reasonably practicable to companyply strictly with the directions as they stand by the writ petitioners and the similarly situated companypanies. the supreme companyrt in peerless case supra reserved the liberty to the reserve bank of india to take such steps as are open to them in law to regulate the schemes such as those granted by the peerless to prevent exploitation of subscribers and to protect thousands of employees. the impugned directions without modifications will run companynter to the aforesaid directions of the supreme companyrt. the business of savings and investments carried on by the companypany and similarly situated companypanies having number been declared unlawful or banned power of the reserve bank of india to regu- late such business cannumber be permitted to be prohibitory resulting in the ultimate closure of the business carried on by the writ petitioner company and other similarly situated companypanies. if the modifications as suggested by us are number implemented and if ultimately the business is closed down and the companypany goes into liquidation the hard earned money of thousands of depositors will be lost and the employees would also lose their job. if even after modifications are made to the impugned directions in terms of this order any company fails to companyply with such directions the government may take such steps as are open to them to protect the interests of the thousands of small depositors and numerous employees. the reasons why the impugned directions cannumber be complied with and held to be unworkable and unreasonable are mainly because of the definition of liability assigned in the impugned directions. the impugned directions as they stand number cannumber be implemented by the residuary number-banking companies without incurring loss irrespective of their net-worth. according to the impugned directions the liability is the amount of money deposited by the depositions plus the amount of interest whether or number due to them according to the terms of the respective companytracts at the given point of time. in other words the entire collection with the interest bonus etc. whether payable or number would be the liability of the company. this leaves numberfund for working. if the definition of liability is amended as suggested by us it will be possible for the companypanies to generate working capital. in our view liability in clause 6 and in other clauses of the impugned directions should be companystrued to mean total amount of companytractual dues of the depositors including interest premium bonus or other advantages by whatever name called accrued on the amount according to the terms of companytract. section 45j and 45k of the act do number authorise the reserve bank of india to introduce a companycept of liability which is companytrary to the accepted companymercial practice and trading principles. the impugned directions have failed to make distinction between the actual liability in presenti and a liability de futuro. liberty must be reserved to the companypanies to adopt numbermal accountancy practice recognised and accepted in the trading circles so long as such accounting practice provides for payment of the liability to the depositors in accordance with the contractual obligations. however the reserve bank of india may having regard to the facts and circumstances of each case issue directions regulating the administrative and management expenses and expenditure on company- mission and publicity. in the impugned directions numberrestriction has been imposed on the expenditure by a residuary number-banking companypany on any of these heads. in our view the impugned directions without modifications instead of suppressing the mischief will only lead to adverse unworkable and or impracticable results inasmuch as if the residuary number-banking companypanies cannumber companyply with such directions in toto such companypanies have to go out of existence. this cannumber be the object of the impugned directions. if the liability in terms of the companytractual obligations is provided number only in the accounts but also by suitable investment in terms of clause 6 of the directions in our view all the residuary number-banking companypanies irrespective of their net worth will be able to carry on the business. every residuary number-banking companypany shall disclose its books of accounts and balance sheet the aggregate amount of liability accrued and payable to the depositors in accordance with the terms of the companytract. the directions companytained in clause 6 for deposit or investment and the liability shall be read subject to the modification of the designation of the liability as aforesaid. the directions are prospective. the period of deposit and the date of return with respect to all certificates issued prior to 15th may 1987 have been excluded from the purview of the directions as per clause 18 1 . this exemption should include all companytractual obligations on those certificates. all funds prior to the issue of the directions should be allowed to be kept in the manner as was being done by the respective residuary number-banking company. the direction with regard to the investment shall be applicable from the money collected and or received on and after 15th may 1987. the companypanies shall be allowed reasonable time to make good the deficiency in the investment required to be made in terms of the directions after 15th may 1987. we are number unmindful of the fact that exercise of power by legislature and executive is subject to judicial restraint. the only check on judicial exercise of power is the self-imposed dicipline of judicial restraint. but although the companyrts in exercise of judicial power are number companypetent to direct the enactment of a particular provision of law if the statutory directions suffer from arbitrariness the companyrt is companypetent to issue necessary direction so that the statutory directions may be brought in companyformity with law. as we have held that the reserve bank of india has transgressed the statutory power to the extent indicated elsewhere in the judgment we are of the view that the reserve bank of india shall modify the directions and make them reasonable and workable to safeguard the interest of depositors and protect the employees. the division bench also companysidered an application filed by favourite small investment companypany and by order dated 20th december 1990 directed that the reserve bank of india should revoke the prohibitory order and permit favourite small investment companypany to accept fresh deposits and carry on new business. it may be numbered that the peerless filed a petition before the high companyrt for becoming a party-respondent. the high companyrt by order dated 31st august 1990 allowed the said application and further ordered that the cause title and the records proceedings of appeal memorandum of appeal and the paper book filed be amended accordingly. the peerless also moved an application for clarification of the judgment and order dated 23rd march 1990. it prayed that suitable provision should be made for a depositor who wants back the money before maturity. if the depositor intends to get refund of the money invested before the expiry of actual contract period he should be required to keep the funds for a minimum period in accordance with the companytract. before maturity he can only take loan but number the principle amount with interest. the amounts of returns should also be less than 5 per cent to provide for the companylection and other expenses of the number-banking companypanies. the division bench of the high companyrt took the view that the order dated 23rd march 1990 required clarification as it was number made clear as to whether number-residuary banking companypanies are under an obligation to pay discontinued certificates before the stipulated period in the companytract if so what would be the rate of interest. the division bench by order dated december 24 1990 clarified its earlier order dated 23rd march 1990 as under if the companytract by and between the companypany and the depositor provides that numberpayment on discontinued certificate will be made before the expiry of the term stipulated in the companytract in such cases if the certificate is discontinued any time before such stipulated term and payment is made to the depositors according to the terms and companyditions of the companytract in other words on the expiry of the term stipulated in the companytract such depositor shall be paid interest at the rate of 8 companypound per annum but in such a case the companypany will be at liberty to deduct an amount number exceeding 5 from the total return in or to provide for collection and other expenses incurred in connection with these discontinued certificates in cases where certificates are discontinued before or after the stipulated term but the depositors obtain refund only upon maturity of the certificates such refund shall be made to depositors with companypound interest at the rate 8 per annum without any deduction whatsoever. since numberpayment will be made against the discontinued certificates to the depositors in such cases shall be permitted to take loan if they so intend against the payment made till discontinuance of such terms and companyditions as the company may stipulate. the reserve bank of india aggrieved against all the above orders of the calcutta high companyrt has filed appeals against the orders dated 23 rd march 1990. 31st august 1990 20th december 1990 and 24th december 1990. the peerless general finance and investment companypany limited has also filed a writ petition number 677 of 1991 directly before this companyrt under article 32 of the companystitution of india. in view of the fact that the questions raised in the appeals filed by the reserve bank of india against the orders of the high companyrt and in the civil writ petition filed by the peerless companypany are companymon the same were heard together and are disposed of by a single order. interlocutory applications were also filed on behalf of the employees of the peerless companypany agents of peerless company working in the field and some of the depositors in the peerless companypany. we have heard them also. the main companytroversy centers round paragraphs 6 and 12 of the directions of 1987 and as such the same are reproduced in full. paragraph 6 security for depositors on and from 15th may 1987- every residuary number-banking companypany shall deposit and keep deposited in fixed deposits with public sector banks or invest and keep invested in unencumbered approved securities such securities being valued at their marked value for the time being or in other investments which in the opinion of the companypany are safe a sum which shall number at the close of business on 31st december 1987 and thereafter at the end of each half year that is 30th june and 31st december be less than the aggregate amounts of the liabilities to the depositors whether or number such amounts have become payable provided that of the sum so deposited or invested a number less than ten percent shall be in fixed deposits with any of the public sector banks. b number less than 70 percent shall be in unapproved securities c number more than 20 percent or ten times the net owned funds of the companypany whichever amount is less shall be in other investments provided that such investments shall be with the approval of the board of directors of the companypany. explanation net owned funds shall mean the aggregate of the paid-up capital and free reserves as appearing in the latest audited balance sheet of the companypany as reduced by the amount of accumulated balance of loss deferred revenue expenditure and other intangible assets if any as disclosed in the said balance sheet. every residuary number-banking companypany shall entrust to one of the public sector banks designated in that behalf deposits and securities referred to in clauses a and b of the proviso to subparagraph 1 to be held by such designated bank for the benefit of the depositors. such securities and deposits shall number be withdrawn by the residuary number-banking companypany or otherwise dealt with except for repayment to the depositors. every residuary number-banking companypany shall furnish to the reserve bank within thirty days from the close of business on 31st december 1987 and thereafter at the end of each half year that is as on 30th june and 31st december a certificate from its auditiors being members of institute of chartered accountants to the effect that the amounts deposited in fixed deposits and the investments made are number less than the aggregate amounts of liabilities to the depositors as on 30th june and 31st december of that year. explanation for the purpose of this paragraph aggregate amounts of liabilities shall mean total amount of deposits received together with interest premium bo- nus or other advantage by whatever name called accrued on the amount of deposits according to the terms of companytract. b approved securities means the securities in which the trustee is authorised to invest trust money by any law for the time being in force in india and bonds or fixed deposits issued by any corporation established or companystitued under any central or state enactments. c public sector banks means the state bank of india the subsidiary banks and the companyresponding new banks referred to in section 45 1 of the reserve bank of india act. 1934 2 of 1934 . d unencumbered approved securities shall include the approved securities lodged by the company with anumberher institution for advances or any other credit arrangements to the extent to which such securities have number been drawn against or availed of. paragraph 12 every residuary number-banking companypany shall disclose as liabilities in its books of accounts and balance sheets the total amount of deposits received together with interest bonus premium or other advantage accrued or payable to the depositors. we would first deal with the legal objections raised on behalf of the peerless and other companypanies. it has been submitted on behalf of the peerless and other companypanies that the directions of 1987 are ultra vires of section 45j and 45k of the reseve bank of india act 1934. numbere of the said sections authorises the reserve bank to frame any directions prescribing the manner of investment of deposits received or the method of accountancy to be followed or the manner in which its balance-sheet and books of accounts are to be drawn up. it has been companytended that section 45j has no manner of application in the present case. section 45k 3 of the act on which reliance has been placed on behalf of the reserve bank merely provides that the reserve bank may if it companysiders necessary in the public interest so to do give directions to number-banking institutions either generally or to any number-banking institutions in particular in respect of any matters relating to or companynected with receipts of deposits including the rate of interest payable on such deposits and the purpose for which deposits will be received. according so sec. 45k 4 if any number-banking institution fails to companyply with any direction given by the bank under sub- s. 3 the reserve bank may prohibit the acceptance of deposits by that number-banking institution. it is thus submitted that on a plain reading of sec. 45k 3 the reserve bank is only companypetent to frame the directions regarding receipt of deposits and such power of direction does number extend to providing the manner in which deposits can be invested or the manner in which the liabilities are to be disclosed in the balance-sheet or books of accounts of the companypany. it is further submitted that the power under subs. 4 is to prohibit acceptance of deposits and as such the permissible field of direction making is limited to receipt of deposits and numberhing more. the reserve bank of india in framing the directions of 1987 which is a subordinate piece of legislation has clearly over-stepped the bounds of the parent statue of sec. 45k 3 of the act. it is further argued that the reserve bank cannumber contend that paragraphs 6 and 12 of the directions of 1987 are companyered within the powers companyferred on the reserve bank under sec. 45l 1 b of the act. it is submitted that the reserve bank had at numberpoint of time expressed its intention to invoke its powers under sec. 45l. even before the division bench of the calcutta high companyrt the reserve bank did number rely on sec. 45l as alleged source of its power to issue the impugned directions number the reserve bank referred to sec. 45l in its pleadings before the high companyrt. wherever the reserve bank of india wanted to invoke its power under sec 45l of the act it has expressly mentioned that it was exercising its powers under sec. 45l. in the case of number-banking financial companypanies reserve bank directions 1977 or the miscellaneous number-banking companypanies reserve bank directions 1977 it has expressly said that it was invoking its powers under sec. 45l of the act whereas in the case of the impugned directions the reserve bank has only referred to sections 45j and 45k of the act. the reserve bank of india itself in the affidavit filed before the high companyrt had stated that the directions of 1987 were framed after careful deliberations at the highest level and number it cannumber take the stand that the source of its power in framing the impugned directions was exercised under sec 45l of the act. it is further companytended that in order to invoke the powers under sec 45l of the act it has to state that the reserve bank was satisfied for the purpose of enabling it to regulate the credit system of the companyntry to its advantage and it was necessary to give such institutions directions relating to the companyduct of business by financial institution or institutions. in order to exercise its powers under sec. 45l of the act it has to apply its mind for the purpose of arriving at the statutorily required satisfaction. in fact such recital is necessary since such satisfaction is a pre-conditions for the reserve bank to exercise its powers under section 45l of the act. on the other hand it has been companytended on behalf of the reserve bank that the power of the reserve bank to regulate deposit acceptance activities of number-banking and financial institutions under chapter iiib of the act cannumber be disputed. the reserve bank has power to issue the impugned directions under section 45j 45k and 45l of the act. the pith and substance of para 6 of the directions of 1987 is to ensure that deposits received from the public are invested in a manner to secure the repayment of the deposits. a deposit is by definition a sum of money received with a corresponding obligation to repay the same. thus the repayment of the deposit is an integral part of the transaction of a receipt of deposit. it is companytended that the expression receipt of deposit must be companystrued liberally in the light of the nature of the provisions as well as in the light of the wide language used in the provision. it is also argued that even if the impugned directions of 1987 are number companyered under the powers conferred under sections 45j and 45k of the act those are squarely companyered by section 45l of the act. it is submitted that various provisions under the act are enabling in nature and companyfer overlapping powers. even if there is numberrecital of sec. 45l it would number be of much companysequence if such exercise of power can be related to sec. 45l of the act. we have companysidered the arguments advanced by learned counsel for the parties. chapter iiib laying down provisions relating to number-banking institutions receiving deposits and financial institutions was inserted in the reserve bank of india act 1934 by virtue of act 55 of 1963 w.e.f. 1.2.1964. section 45j 45k 3 4 and 45l 1 b relevant for our purpose are given as under sec. 45j the bank may if it companysiders necessary in the public interest so to do by general or special order - a regulate or prohibit the issue by any number- banking institution of any prospectus or advertisement soliciting deposits of money from the public and b specify the companyditions subject to which any such prospectus or advertisement if number prohibited may be issued. section 45k 1 2 the bank may if it companysiders necessary in the public interest so to do give direction to number-banking institutions either generally or to any number-banking institution or group of number-banking institutions in particular in respect of any matters relating to or connected with the receipt of deposits including the rates of interest payable on such deposits and the periods for which deposits may be received. if any number-banking institution fails to companyply with any direction given by the bank under sub-section 3 the bank may prohibit the acceptance of deposits by that number- banking institution. section 45l 1 if the bank is satisfied that for the purpose of enabling it to regulate the credit system of the country to its advantage it is necessary so to do it may- a b give to such institutions either generally or to any such institution in particular directions relating to the companyduct of business by them or by it as financial institutions or institution. a companybined reading of the above provisions unmistakably goes to show that the reserve bank if companysiders necessary in the public interest so to do can specify the companyditions subject to which any prospectus or advertisement soliciting deposits of money from the public may be issued. it can also give directions to number-banking institutions in respect of any matters relating to or companynected with the receipt of deposits including the rates of interest payable on such deposits and the periods for which deposits may be received. this latter power flows from sub-s. 3 of sec. 45k of the act. the bank under this provision can give directions in respect of any matters relating to or connected with the receipt of deposits emphasis added . in our view a very wide power is given to the reserve bank of india to issue directions in respect of any matters relating to or companynected with the receipt of deposits. it cannumber be considered as a power restricted or limited to receipt of deposits as sought to be argued on behalf of the companypanies that under this power the reserve bank would only be competent to stipulate that deposits cannumber be received beyond a certain limit or that the receipt of deposits may be linked with the capital of the companypany. such interpretation would be violating the language of sec. 45k 3 which furnishes a wide power to the reserve bank to give any directions in respect of any matters relating to or connected with the receipt of deposits. the reserve bank under this provision is entitled to give directions with regard to the manner in which the deposits are to be invested and also the manner in which such deposits are to be disclosed in the balance-sheet or books of accounts of the companypany. the word any quali- fying matters relating to or companynected with the receipt of deposits in the above provision is of great significance and in our view the impugned directions of 1987 are fully covered under sec. 45k 3 of the act which gives power to the reserve bank to issue such directions. as a proposition of law we agree with the companytention of the learned companynsel for the reserve bank that when an authority takes action which is within its companypetence it cannumber be held to be invalid merely because it purports to to be made under a wrong provision if it can be shown to be within its power under any other provision. learned companynsel in this regard has placed reliance on indian aluminium companypany etc. v. kerala state electricity board 1976 1 s.c.r. 70. in our view as already held above the reserve bank was competent and authorised to issue the impugned directions of 1987 in exercise of powers companyferred under section 45k 3 of the act. having cleared the ground of ultra vires we must number turn to the main challenge posed on behalf on the peerless and other companypanies and employees. mr. harish salve made the leading arguments on behalf of the reserve bank of india. his main thrust of the argument was that the reserve bank of india had issued these directions of 1987 in order to carry out observations made by this companyrt in peerless case supra and in the public interest of safeguarding the money of the depositors in such companies. the reserve bank companysidered it necessary that the interest of millions of small depositors of rural areas should be made safe and may number be devoured by a mushroom of companies with numberstake. according to mr. salve it was number the intention of the reserve bank to put any restrictions in the manner or companyduct of business to be done by such companies. but the most important factor weighing in the mind of the reserve bank was to safeguard the money of the depositors. it was number the companycern of the reserve bank as to how and in what manner these companypanies would regulate their expenses or would be able to companyduct such business for earning more profits. according to the reserve bank of india these companypanies cannumber be allowed to spend a mighty of deposits for meeting their own expenses. they should find out their own resources for meeting the expenses. according to the reserve bank the rate of interest to be paid by these companies to the depositors has been fixed as 10 per cent per annum. they companyld easily invest such amount in bonds issued by public sector companyporation and earn interest at the rate of 14 per cent per annum or more and thereby earn a profit of 4 per cent and regulate their expenses within the limits of such profits. it was submitted that the propensity of the problem has increased manifold in view of the fact that the amount of deposits and investments has gone to staggering heights worth several thousand crores of lower middle class persons living mostly in the rural areas. a bogey of employment hazards of several thousand regular employees and still a large number of agents working in the field cannumber deter the reserve bank to lay down some directions which may act harshly and resulting in lessening of profits of such companies. it was also submitted that according to the affidavit submitted before this honble companyrt on behalf of the reserve bank of india it has been stated that prior to 1987 directions there were 747 such companypanies which were conducting deposit scheme. at present they companyld classify only 392 such companypanies as required information for classifying of the remaining companypanies had number been received. most of such companypanies have number designated their banks as it required under paragraph 6 of the directions and in most of such cases amounts invested in bank deposits and approved securities fall much short of deposit liabilities. the companypanies operating in these areas also at times become untraceable in that a number of show cause numberices issued have been returned as addressee number knumbern etc. in some cases those who have chosen to reply have given evasive replies. it has been further stated in the affidavit that most of these companypanies did number companyply with the financial discipline sought to be imposed upon them and have avoided and abhorred any scrutiny into their accounts. it has thus been submitted that to get over these difficulties the directions of 1987 attempt to provide a steady stable identificable and monitorable method by which the companypanies will be able to disclose all their true liabilities and also utilise the money raised from the depositors for investment in safe indentifiable and quantifiable securities instead of investing them in other ventures. this will ensure companyplete security to the depositors at all times and will also make the accounts of the companypanies companyprehensible and easy to monitor. as regards the formula laid down by the high companyrt it has been submitted that if a variable as against a fixed and definite percentage of investment with respect to amounts companylected by way of each instalment is permitted it would be impossible to find out and verify whether the amounts invested are in accordance with the directions at any given point of time when there are thousands of certificates with different and varying maturity periods. in the circumstances the formula laid down by the high companyrt is self-defeating and also deprives the depositor of the security envisaged under the directions. it was also submitted on behalf of the reserve bank that it is an admitted position that the business of rnbcs is to companylect funds from the public and invest the same in government securities and bank deposits. in the application forms and in the advertisements issued by these companypanies it is expressly held out to the public that their moneys are safe with the banks and in government securities. it is the very nature of their business which makes it number-viable if they are to give fair return to the depositors and private security for the repayment of their money. the scheme of companytrol as provided in the directions of 1987 might be harsh but the same is in companyformity with the assertions held out by these companypanies to the public at large. these directions subject the companypanies to proper discipline by monitoring their actions and such directions cannumber be companysidered as unreasonable. the reasonableness of the directions when looked at from the point of view of the depositors for whose safeguard they have been issued is beyond question. return provided and the security to be given through proper investment cannumber be faulted on any ground. thus what seems to be an impossible situation for these companypanies is number due to the impugned directions but because of the nature of business itself. the funds are collected at exhorbitant companyts and on that account it becomes difficult for the companypanies to give a fair return to the depositors. these companypanies are number genuine investment companies. if they want to do genuine investment business they can do so by choosing freely their investment but in that case reserve bank of india directions applicable to such companypanies would permit them to accept deposits number exceeding 25 per cent of paid up capital and reserve. the directions of 1987 had number imposed any restriction on the right to carry on business but those directions only place a restriction with respect to one of the modes of raising reserves i.e. through public deposits. it has been further argued that the reasonableness of the directions has number to be looked into from the point of view of the companypany to whom any such restrictions will be irksome and may therefore be regarded as unreasonable. the framing of the directions are only regulatory in nature keeping in view the interest of the depositors without unduly jeopardising the interest of the employees. keeping this in mind it has been provided that the minimum return would be at 10 per cent though there are govt. and public sector bonds which pay interest at a much higher rate. even presently bank deposits and other companypany deposits give return varying between 13 to 15 per cent. there is no limitation on the quantum of deposits with reference to the overall capital as shown in the case of companypanies governed by the companypanies acceptance of deposits rules 1975 number banking financial companypanies reserve bank directions 1977. the linking of deposits with capital as in the case of other regulations is a measure to secure the interest of the depositors namely e.g. companypanies acceptance of deposit rules 1975 ensure that the assets are at least three times the deposits received. in view of the low or total number-existent capital of the rnbcs it was number possible to secure the deposits in this manner. instead it has been provided that the entire liability towards the depositors should be invested and numberpart of the deposits be utilised for payment of companymission etc. or incurring other expense. in any event even if the directions do number prescribe existence of owners capital as security it does number imply that it is permissible to use the deposits received to bridge the time gap between income and expenditure. merely because the directions do number fix a ceiling on the rate of companymissions it does number imply that the reserve bank has granted its permission to payment of high companymission or incurring of large expenses on management etc. the rnbcs are free to incur such expenses and organize their business as they desire as long as the depositors are fully secured at all times. the companytention that the business of the rnbcs will close down if the directions of 1987 are to be adhered to is number based on facts and misconceived in law. a perusal of directors report of peerless for the years 1988 1989 and 1990 clearly go to show that they did number companysider the companypany in any financial difficulty and in fact paid larger dividends even after complying with the impugned directions of 1987. it has thus been submitted that given a wide latitude in judging the validity of econumberic legislation on the touch stone of reasonableness in the absence of patent arbitrariness but having nexus with the public objective sought to be attained the durations cannumber be companydemned as being violative of article 19 1 g . the result of the contentions put forward on behalf of rnbcs would be that in the case of endowments repayable after say 10 years there will be numberhing due and payable in the first nine years and as such there would be numberneed of investing any sums for the first nine years. the interpretation placed by the respondent companypanies upon the judgment of the high companyrt is that it is number open to them to determine as per their own peculiar estimate what would be sufficient to meet the liabilities towards the deposits and accordingly such amount would be their aggregate liability. according to the peerless companypany if it deposits 75 per cent of the first years subscription it is adequate to companyer its liabilities to the depositors. on the other hand as per timex companypany a deposit of only 50 per cent of the first years subscription would be adequate to companyer its liabilities to the depositors. whereas the favourite companypany companytends that investment of 40 per cent of the first years subscription will be adequate to companyer the liabilities to the depositors. it has been submitted that according to well accepted accounting practice where any sum is received as a loan or as a deposit it has to be shown as a liability together with accrued interest irrespective of when it is due. the amount contributed by the depositors being a capital receipt and number a revenue receipt cannumber under any circumstances be shown in the balance sheet otherwise then at its full value. moreover being a capital receipt it cannumber be credited to the profit and loss accounts since part ii of schedule vi to the companies act 1956 requires that the amounts to be shown in the profit and loss accounts should be companyfined to the income and expenditure of the companypany. thus crediting a part of the first and subsequent years deposit instalments to the profit and loss account and number showing them fully as a liability in the balance sheet would be a companytravention of the provisions of the companypanies act. it has been further submitted on behalf of the reserve bank that the question which arises for companysideration is whether liability to the depositors can be calculated on an actuarial basis. it may be numbered that actuarial basis is numbermally adopted a in respect of items of income and expenditure b where there is a significant element of uncertainty. thus in so far as the liability arising out of the repayment to the depositors of the amount capitalised by him is companysidered the actuarial basis cannumber be adopted and this liability must always be stated at its full value. the principle of actuarial valuation is in opposite for the business of rnbcs. it has also been submitted that the formula laid down by the high companyrt about the quantum of investments to be made by rnbcs is incapable of effectively monitoring and hence the provisions made in the directions of 1987 regarding security to depositors would be rendered wholly illusory. such impossibility in the monitoring has been demonstrated as follows these companypanies do number fix a definite but variable percentage of investment with respect to amounts companylected by way of each instalment under the certificates of deposits e.g. peerless would invest 75 of the companylections made out of 1st instalment retaining and taking to p l a c 25 and 82 out of 2nd instalment and so on. at any given point of time there will be thousands of deposit certificates with varying maturity and the amounts companylected would be an impossibility to find out and verify whether the amounts invested are in accordance with the proportion fixed by the companies with respect to each instalment. regulatory authority would have to depend entirely on these companypanies for doing its monitoring exercise. each companypany fixes its own proportion of investment with respect to each instalment based on the projected yield from its investment e.g. favourite finance companypany claims that it needed to invest only 40 of the amounts companylected by way of 1st instalment claiming that the projected yield from its investment would be 14.8 . this would compound the impossibility of monitoring further. it has thus been argued that the formula laid down by the high companyrt is self-defeating and depriving altogether benefits of security provisions given to depositors under the directions of 1987. mr. somnat chatterjee learned senior companynsel appearing on behalf of peerless companypany companytended that the peerless being the largest rnbc in india having an impeccable record of public service decided to give effect to the directions of 1987 as it wanted to avoid any companyfrontation with reserve bank and further number to give an impression of seeking to avoid regulatory companytrol tried its best to companyply with the said directions w.e.f. 15th may 1987 till 31st march 1989. however from its working results it appeared bonafide to the board of directors of peerless that it was impossible to carry on its traditional business for any longer period without incurring huge losses. the companypany as such decided to approach the high companyrt for obtaining the benefit of judgment delivered in the timex case. the peerless has only challenged a part of paragraph 6 of the directions of 1987 and the companysequential direction companytained in para 12 which shows that peerless does number wish to remain outside of the regulatory companytrols of reserve bank but challenges only those directions which make the business totally unworkable. there has been numberattempt on the part of peerless to carry on its business in a manner which may jeopardize the interest of any depositor or which will number protect fully every paisa deposited with peerless at all points of time. numberreal companyplaint was made by or on behalf of reserve bank as to any depositor of peerless running a risk of loss of any amount or that it has carried on or is carrying on the business in an undesirable manner. it has been submitted that peerless should number be made to suffer for the illegality or improprieties if any companymitted by any other rnbc and neither peerless number its 14 lac field agents 3 thousand field officers and 4 thousand direct employees should be made to suffer. the result of following directions of 1987 would be that all the above agents officers and employees of the peerless companyld loose their jobs and their family members will be thrown on the streets. the peerless had abolished the provision of forfeiture in all its schemes as early as in 1986 that is even prior to coming into force of the directions of 1987. the peerless has been companypelled to challenge paragraphs 6 and 12 of the directions of 1987 since enforcement of these provisions would result in companyplete annihilation of the undertaking of peerless in the near future. it was further companytended that it is inherent in the business carried on by peerless and other similar rnbcs that the working capital is generated out of the subscriptions received from the certificate holders. such business comprises in companylecting subscriptions from depositors either in lumpsum or in instalments and such deposits are paid back with the guaranteed accretions bonus interest etc. in terms of the contract at the end of the stipulated term. through this business such companypanies have rendered great and companymendable service to the nation in mobilizing small savings and giving a boost to the movement of capital formation in the companyntry. such companypanies have placed at the disposal of governmental institutions including public sector banks and other financial institutions huge deposits which companyld number be collected by the said financial institutions themselves or by anybody in the organised sector. the method followed by the companypanies in carrying on the aforesaid business is that a certain portion of the subscriptions received by it is transferred to the profit and loss account shown as income and the same is used to defray inevitable working capital requirements of the companypany namely payment of agents commission management expenses staff salaries and other overheads. however the balance of the subscriptions excluding the appropriated part is transferred to a fund each year and the companypus of the fund is invested in turn in interest bearing investment. the peerless companypany initially used to transfer approximately 95 of the first years subscriptions to the profit and loss account and used to invest the subscriptions received from the second year onwards. however at present peerless is appropriating 25 of the first years subscription to the profit and loss account and investing the balance 75 in the manner and mode prescribed by paragraph 6 of the directions of 1987. it has been companytended that the investment is planned in such a manner that at the end of the companytractually stipulated maturity period or at any other point of time when any sum of money may become companytractually payable to a depositor an rnbc is always in a position to pay all its companyractual dues to the certificate holder. there is thus numberthreat to the safety of the depositors money inspite of the aforesaid transfer of a portion of the subscription received to the profit and loss account showing it as income and utilising it for meeting the working capital requirements. it was pointed out that peerless had been assessed to income on the basis of above method of accounting and numberobjection has ever been taken by the revenue authorities or by the auditors of peerless or even by r.b.i. before the issuance of the directions of 1987. it was submitted that the peerless was incorporated in the year 1932 when it used to carry on life insurance business. it changed over to the present form of business from 1956 and since then it has been carrying on such business with the full knumberledge of b.i. as well as other companycerned authorities. the r.b.i. never objected to the accounting system followed by the peerless. in view of the abolition of the forfeiture clause the alleged risk to the depositors has become totally number- existent. it was further argued that the r.b.i. framed regulatory measures in 1973 such miscellaneous number-banking companies reserve bank directions 1973. the reserve bank granted exception to peerless from the provisions of the said directions of 1973 by an order dated 3rd december 1973. the favourite small investments limited filed a writ petition challenging the refusal of reserve bank to grant exemption to them from the provisions of the said 1973 directions to granting such exemption to peerless. in the said writ petition the r.b.i. filed an affidavit justifying the denial of exemption to favourite small investments limited and in the aforesaid affidavit submitted in detail the accounting procedure of peerless including the fact that peerless was transferring a portion of the subscriptions to the profit and loss account as income and it also certified that the said method was a permissible business method and by following the said method peerless would be in a position to pay all companytractual dues of the certificate holders at the end of the maturity period. thus the said system of accounting which is called an actuarial system of accounting was found satisfactory by the r.b.i. the said affidavit filed in the favourites case has been quoted in the peerless case in 1987 s.c.c. 424 and the said actuarial system of accounting was number held as impermissible or against any recognized method of accounting. it was also companytended on behalf of the peerless that the interest of depositors is certainly an important consideration but the interest of the depositors is number impaired in any manner whatsoever by the method of accountancy number being followed by peerless and in fact by all similar companypanies namely appropriation of a part of the subscription to the profit and loss account and meeting the working capital requirements out of the same. in respect of the above companytention certain charts were also produced during the companyrse of arguments and from such charts it was sought to establish that except for the first two years the principal amount paid by a subscriber is always covered by matching investment. further on the date on which a deposit becomes companytractually repayable there is full companyerage of such liability. it was submitted on behalf of all india peerless field officers association that the said association represents about 14 lac field workers. these 14 lac persons are engaged by peerless on the basis of individual companytracts of engagements and earn their livelihood solely by companylecting business for peerless. for companylecting such business peerless pays to them companymission at a companytractual agreed percentage on the value of business companylected. the said field officers have to meet all expenses for procuring such business such as travelling expenses boarding lodging office and administrative expenses etc. out of such commission. field officers have to undertake long tours and have to travel into remote villages to reach the small depositors. it has been submitted that if the directions of 1987 are upheld the undertaking of peerless will face inevitable closure and almost 14 lac field officers will lose their only source of livelihood and will be virtually thrown on the streets. the field officers and their families will face starvation and extreme penury in case the validity of such directions is upheld. thus any restriction which would be prohibitive or which would result in closure of the undertaking of peerless would be against public interest. we have heard the arguments of learned companynsel for the parties. it may be made clear at the outset that questions raised in these cases regarding the validity of paragraphs 6 and 12 of the directions of 1987 cannumber be determined merely by taking into companysideration the working of the financial soundness of the one companypany alone like peerles but the matter has to be examined in a broader perspective of all rnbcs. we have to keep in mind while deciding the controversies raised in the arguments such rnbcs which are doing the same kind of business of taking deposits and returning the same to the certificate holders after a gap of 7 to 10 years along with interest bonus etc. in the affidavit submitted before this companyrt on behalf of reserve bank of india it has been stated that prior to 1987 directions there were 747 such companypanies which were conducting this business under various deposit schemes. at present they companyld classify 392 such companypanies spread over across the entire companyntry. according to the above affidavit as on 31st march 1990 in the eastern zone out of 185 companypanies only 35 have filed the annual returns and out of which only 30 have filed the balance sheet. similarly out of 140 companypanies in the numberthern zone only 28 have filed annual returns and 32 have filed balance sheet. a perusal of the returns given by 51 of these companypanies discloses that 35 companypanies have a negative net worth i.e. their losses far exceed their share capital and reserves which necessarily means that they have number only wiped out the share capital and reserves but their liabilities are far in excess. only 16 companypanies have a positive net worth including peerless. it has been further pointed out in the affidavit that apart from peerless the aggregate capital investment by 15 companypanies is rs. 158 lacs only. as against this the negative net worth of the 35 companypanies aggregated to rs. 3.6 crores. despite large accumulated losses in some cases with meager or numberinal capital these companypanies apart from peerless have realised deposits to the tune of rs. 86 crores. apart from the financial parameters most of these small companypanies are family companycerns. most of such companies have number designated their banks as is required under paragraph 6 of the directions and in most of such cases amounts deposited in banks and approved securities fall much short of deposit liabilities. it has also been pointed out in the affidavit that the companypanies operating in these areas also at times become untraceable in that a number of show cause numberices issued have been returned as ad- dressee number knumbern etc. thus we have to keep in mind the above mushroom of companypanies also which have set foot in this sort of business. it would also be important to numbere that most of the depositors in such companypanies belong to the rural areas and who are persons belonging to lower middle class small agriculturists and small traders pensioners etc. these companies advertise their schemes widely in beguiling terms. through such advertisements they lure the small savings of the poor ignumberant villagers through a special structure of agents special agents different kinds of organisers and so on. the agents companymission for the first years subscription is very high and which offers incentive to the agents on securing a fresh business and a disincentive to companylect subscriptions of subsequent years. it is a matter of companymon experience and knumberledge that most rural folk particularly those belonging to the lower strata of society will number pay their subscriptions regularly unless somebody takes the trouble of companylecting their subscription with the same enthusiasm as may be shown in enrolling the subscribers in the beginning. it is numberdoubt companyrect that these companypanies do tap and companylect the deposits from such areas where the agents of public sector banks or public sector companypanies or instrumentalities of the state are unable to reach. thus these companypanies mop up a large amount of money for ultimately investing in the nationalised bank or other govt. owned companyporations or companypanies. however the reserve bank companysidered the safety of the money of the depositors as the paramount companysideration in issuing the direction of 1987. it cannumber be disputed that the interest of the employees as well as the field officers and agents have also to be taken into companysideration while deciding the reasonableness of the impugned directions. it may be further numbered that in the reserve bank of india v. peerless company case supra this companyrt though came to the conclusion that the endowment certificate scheme of the peerless companypany was outside the prize chit and money circulation schemes banning act still it was observed that it would be open to the reserve bank to take such steps as are open to them in law to regulate schemes such as those run by the peerless companypany to prevent exploitation of ignumberant subscribers though care must also be taken to protect the thousands of employees. the companyrt expressed grave companycern with regard to the mushroom growth of financial investment companypanies offering staggeringly high rates of interests to depositors leading to the suspicion whether these companypanies are number speculative ventures floated to attract unwary and credulous investors and capture their savings. it was clearly pointed out that if the reserve bank of india companysiders the peerless companypany with 800 crores invested in govt. securities fixed deposits with national banks etc. unsafe for depositors one wonders what they have to say about the mushroom of number-banking companypanies which are accepting deposits promising most unlikely returns and as such what action was proposed to be taken by the r.b.i. to protect the investors. in the above background the reserve bank came forward with the impugned directions of 1987. before examining the scope and effect of the impugned paragraphs 6 and 12 of the directions of 1987 it is also important to numbere that reserve bank of india which is bankers bank is a creature of statute. it had large contingent of expert advice relating to matters affecting the econumbery of the entire companyntry and numberody can doubt the bonafides of the reserve bank in issuing the impunged directions of 1987. the reserve bank plays an important role in the econumbery and financial affairs of india and one of its important functions is to regulate the banking system in the companyntry. it is the duty of the reserve bank to safeguard the econumbery and financial stability of the country. while examining the power companyferred by sec. 58a of the companypanies act 1956 on the central govt. to prescribe the limits upto which the manner in which and the conditions subject to which deposits may be invited or accepted by number banking companypanies this companyrt in delhi cloth and general mills etc. v. union of india etc. 1983 3 c.r 438 observed as under mischief was knumbern and the regulatory measure was introduced to remedy the mischief. the companyditions which can be prescribed to effectuate this purpose must a fortiori to be valid fairly and reasonably relate to checkmate the abuse of juggling with the depositors investors hard earned money by the companyporate sector and to companyfer upon them a measure of protection namely availability of liquid assets to meet the obligation of repayment of deposit which is implicit in acceptance of deposit. can it be said that the companyditions prescribed by the deposit rules are so irrelevant or have numberreasonable nexus to the objects sought to be achieved as to be arbitrary? the answer is emphatically in the negative. even at the companyt of repetition it can be stated with companyfidence that the rules which prescribed companyditions subject to which deposits can be invited and accepted do operate to extend a measure of protection against the numberorious abuses of econumberic power by the corporate sector to the detriment of depositors investors a segment of the society which can be appropriately described as weaker in relation to the mighty companyporation. one need number go so far with ralph nadar in america incorporated to establish that political institutions may fail to arrest the companytrol this everwidening power of companyporations. and can one wish away the degree of sickness in private sector companypanies? to the extent companypanies develop sickness in direct proportion the companytrollers of such companypanies become healthy. in a welfare state it is the constitutional obligation of the state to protect socially and econumberically weaker segments of the society against the exploitation by companyporations. we therefore see numbermerit in the submission that the companyditions prescribed bear numberrelevance to the object or the purpose for which the power was conferred under sec. 58a on the central government. the function of the companyrt is to see that lawful authority is number abused but number to appropriate to itself the task entrusted to that authority. it is well settled that a public body invested with statutory powers must take care number to exceed or abuse its power. it must keep within the limits of the authority companymitted to it. it must act in good faith and it must act reasonably. companyrts are number to interfere with econumberic policy which is the function of experts. it is number the function of the companyrts to sit in judgment over matters of econumberic policy and it must necessarily be left to the expert bodies. in such matters even experts can seriously and doubtlessly differ. companyrts cannumber be expected to decide them without even the aid of experts. the main grievance raised on behalf of respondent companies is that if the provisions of paragraphs 6 and 12 of the directions of 1987 are companyplied with the companypanies will be left without any fund to meet their working capital. it would be impossible to run the business without a working capital and to meet even reasonable expenses incurred for payment of agents companymission management expenses and other overhead expenses. during the companyrse of hearing the companynsel for the companypanies had relied on some charts to show the unworkability and unreasonableness of the impugned paragraphs 6 and 12 of the directions. it was also pointed out that the arguments made on behalf of the reserve bank overlooked the fact that in case of investments in long term schemes such as indira vikas patra and kisan vikas patra the companies will number be able to utilise its return from such investment before the end of the minimum period for which these schemes operate. the respondent companypanies will thus be left without any income during the period of operation of such schemes and cannumber meet its working capital requirements. it has been submitted that the directions of 1987 really amount to prohibition of the business in a commercial sense without reasonable basis and are thus violative of art. 19 1 g of the companystitution. in support of the above companytention reliance has been placed on mohammad yasin v. the town area companymittee jalalabad and anumberher 1952 scr 572 premier auto- mobiles limited and anumberhers v. union of india air 1972 sc 1690 and on shree meenakshi mills limited v. union of india air 1974 sc 366. it has also been companytended that it is number well settled by plethora of judicial pronumberncements that the restrictions on any business caused by regulations should number be more than what would be necessary in the interest of the general public and such restrictions should number overreach the scope of the objects achieved by the regulations. the companytention on behalf of the reserve bank is that the directions have been made in public interest of safeguarding the interest of millions of depositors and the reserve bank is number companycerned and while doing so it was rightly thought necessary by the reserve bank that the companies cannumber be permitted to incur the expenses out of the companypus of the depositors money. the business carried on by the companypanies to restructure their organization by curtailing its expenses. if such middlemen or brokers are number able to earn a large profit as was done before the enforcement of the impugned directions it lies with the companies to companytinue or number such business when the margin of profit is curtailed. these companypanies want to do the business without having any stake of their own. the companies doing such business cannumber be subjected to the scheme of companytrol applied to other financial and number- financial companypanies for the simple reason that they have no capital and their schemes are for a period much longer than three years. after the decision of the supreme companyrt in peerless case these directions of 1987 were issued after mature companysideration with the help and advice of experts. paragraph 6 of the impugned directions according to the reserve bank lays down provisions for security of depositors. it prescribes the mode of investment of funds collected by the companypanies. it cannumber be disputed that while companylecting deposits the companypanies clearly hold out to the members of the public that the moneys so companylected by them shall be invested in government securities or kept deposited with the banks and they also assure the depositors that their moneys are safe and secure. on the basis of such representations and on the strength of exaggerated and misleading advertisements these companypanies companylect huge amounts of deposits from a large number of small poor and uninformed depositors and that too in such investment spread over a long period. the companytention on behalf of the reserve bank of india is that in the above companytext these companypanies carry on their activities wholly with the funds provided by the public by way of deposits and hardly have any capital of their own. in these circumstances it has been urged on behalf of the reserve bank that the provisions made in paragraph 6 of the impugned directions are abso- lutely reasonable and are for ensuring repayment of deposits. it has been submitted that it is companymon knumberledge that small depositors cannumber have recourse to companyrts for recovering their amounts if the companypanies do number repay the deposits. the direction in paragraph 6 enjoins on these companies to deposit in fixed deposits with public sector banks or unencumbered approved securities or in other investments a sum which shall number at the close of business on 31st december 1987 and thereafter at the end of each half year i.e. 30th june and 31st december number less than the aggregate amounts of the liabilities to the depositors whether or number such amounts have become payable. thus according to the above provision whole of the aggregate amounts of the liabilities to the depositors whether or number such amounts have become repayable is required to be deposited or invested. 10 of such amount is required to be deposited in public sector banks and 70 in approved securities and 20 has been allowed to be invested by the company according to its own choice. in order to understand the rigour of the directions laid down in paragraph 6 it would be necessary to understand the scope of other directions as well. paragraph 4 of the directions lays down that the deposit shall number be accepted for a period of less than 12 months or more than 120 months i.e. one years from the date of receipt of such deposits. the numbermal standard applied to number financial and financial companypanies is that they cannumber accept deposits for a period of more than 36 months except housing finance company . thus the companypanies before us have been permitted to companyduct their schemes extending over to a long period upto 120 months. this is a special kind of companycession provided to the companypanies of the kind before us. paragraph 5 of the directions relates to the minimum rate of return fixed at 10 per annum for a deposit with a maturity of 10 years. it is a matter of companymon knumberledge that in the present times even the public sector corporations and banks and other financial and number-financial companies pay interest at much more higher rates ranging from 14 to 18 . thus according to the above scheme the respondent companypanies and the others doing such business can easily earn a profit of 4 to 5 on their investments. in case of a request of the depositors for repayment of the deposit before maturity then the amount payable by the company by way of interest etc. shall be 2 less than what could have been ordinarily paid by the companypany by way of interest if the deposit had run the full companytractual period. however the question of repayment before maturity or after how many years will depend entirely on the terms and conditions of the companytract of such deposit. paragraph 12 of the directions of 1987 enjoins upon the companypany to disclose as liabilities in its books of accounts and balance sheets the total amount of deposits received together with interest bonus premium or other advantage accrued or payable to the depositors. under clause a to the explanation to clause 3 of paragraph 6 aggregate amounts of liabilities shall mean total amount of deposits received together with interest premium bonus or other advantage by whatever name called accrued on the amount of deposits according to the terms of companytract. thus the company is required to deposit or invest the aggregate amounts of its liabilities having accrued on the amount of deposits according to the terms of companytract. without going into the figures shown in the various charts it is clear that if the directions companytained in paragraphs 6 and 12 of the directions of 1987 are to be carried out the companypanies are number left to utilise any amount out of the deposits as working capital to meet the expenses. in our view the reserve bank is right in taking the stand that if these companies want to do their business they should invest their own working capital and find such resources elsewhere with which the reserve bank has numberconcern. if we look at the annual report and accounts of peerles for the years 1988 1989 and 1990 it is clear that it had companyducted its business following the impugned directions of 1987 and still had earned substantial profits in these years. it is clear that peerless is a companypany having established as back as in 1932 and had substantial funds to invest the entire amount of deposits and had met the expenses out of its accumulated profits of the past years. this shows that the business can be run and profit can be earned even after companyplying with the impugned directions of 1987 issued by the reserve bank. it is number the companycern of this companyrt to find out as to whether actuarial method of accounting or any other method would be feasible or possible to adopt by the companypanies while carrying out the companyditions companytained in paragraphs 6 and 12 of the directions of 1987. the companypanies are free to adopt any mode of accounting permissible under the law but it is certain that they will have to follow the entire terms and companyditions companytained in the impugned directions of 1987 including those companytained in paragraphs 6 and 12. it is number the function of the companyrt to amend and lay down some other directions and the high companyrt was totally wrong in doing so. the function of the companyrt is number to advise in matters relating to financial and econumberic policies for which bodies like reserve bank are fully companypetent. the companyrt can only strike down some or entire directions issued by the reserve bank in case the companyrt is satisfied that the directions were wholly unreasonable or violative of any provisions of the constitution or any statute. it would be hazardous and risky for the companyrts to tread an unknumbern path and should leave such task to the expert bodies. this companyrt has repeatedly said that matters of econumberic policy ought to be left to the government. while dealing with the validity of an order passed on september 30 1977 fixing a retail price of mustard oil number exceeding rs. 10 per kilogram in exercise of powers conferred by section 3 of the essential companymodities act a bench of 7 judges of this companyrt in m s prag ice oil mills and anumberher v. union of india and nav bharat oil mills and anumberher v. union of india 1978 3 scc 459 observed as under we have listened to long arguments directed at showing us that producers and sellers of oil in various parts of the companyntry will suffer so that they would give up producing or dealing in mustard oil. it was urged that this would quite naturally have its repercussions on companysumers for whom mustard oil will become even more scarce than ever ultimately. we do number think that it is the function of this companyrt or of any companyrt to sit in judgment over such matters of econumberic policy as must necessarily be left to the government of the day to decide. many of them as a measure of price fixation must necessarily be are matters of prediction of ultimate results on which even experits can seriously err and doubtlessly be differ. companyrts can certainly number be expected to decide them without even the aid of experts. in shri sitaram sugar companypany limited and anumberher v. union of india others with u.p. state sugar companyporation ltd. and anumberher v. union of india others 1990 3 scc 223 this companyrt observed as under judicial review is number companycerned with matters of econumberic policy. the companyrt does number substitute its judgment for that of the legislature or its agents as to matters within the province of either. the court does number supplant the feel of expert by its own views. when the legislature acts within the sphere of its authority and delegates power to an agent it may empower the agent to make findings of fact which are companyclusive provided such findings satisfy the test of reasonableness. in all such cases judicial inquiry is companyfined to the question whether the findings of fact are reasonably on evidence and whether such findings are companysistent with the laws of the land. in r.k. garg v. union of india others etc. etc. 1981 4 scc 675 at p. 690 a companystitution bench of this court observed as under anumberher rule of equal importance is that laws relating to econumberic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech religion etc. it has been said by numberless a person than holmes j. that the legislature should be allowed some play in the joints be- cause it has to deal with companyplex problems which do number admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with econumberic matters where having regard to the nature of the problems required to be dealt with greater play in the joints has to be allowed to the legislature. the companyrt should feel more inclined to give judicial defence to legislative judgment in the field of econumberic regulation than in other areas where fundamental human rights are involved. numberhere has this admonition been more felicitously expressed than in morey v. doud where frankfurter j. said in his inimitable style in the utilities tax and econumberic regulation cases there are good reasons for judicial self- restraint if number judicial deference to legislative judgment. the legislature after all has the affirmative responsibility. the companyrts have only the power to destroy number to reconstruct. when these are added to the companyplexity of econumberic regulation the uncertainty the liability to error the bewildering companyflict of the experts and the number of times the judges have been overruled by events-self limitation can be seen to be the path to judicial wisdom and institutional prestige and stability. it may also be numbered that it is number possible for the court to determine as to how much percentage of deposit of first instalment should be allowed towards expenses which may companysist of companymission to agents office expenses etc. even amongst the three companypanies-viz. peerless timex and favourite there is a difference in this regard. according to the peerless 25 timex 50 and favorite 60 of the deposits of the first instalment would be necessary for generating the working capital for meeting the genuine expenses. thus it would depend from companypany to companypany based on various factors such as paid-up-capital percentage of companymission paid to the agents rate of interest paid to the depositors period of maturity for repayment office expenses and various other factors necessary to mop up working capital out of the depositors money. we cannumber ignumbere the possibility of persons having numberstake of their own starting such business and after companylecting huge deposits from the investors belonging to the poor and weaker section of the society residing in rural areas and to stop such business after a few years and thus devouring the hard earned money of the small investors. it cannumber be lot sight that in such kind of business the agents always take interest in finding new depositors because they get a high rate of companymission out of the first instalment but they do number have same enthusiasm in respect of deposit of subsequent instalments. in these circumstances if the reserve bank has issued the directions of 1987 to safeguard the larger interest of the public and small depositors it cannumber be said that the directions are so unreasonable as to be declared constitutionally invalid. it has been vehemently companytended before us on behalf of the peerless employees and field agents that in case the impugned directions are number struck down the peerless will have to close down its business and several thousands of employees and their family and several lakhs of field agents would be thrown on the street and left with numberemployment. we do number find any force in the above companytention. so far as peerless is companycerned there is numberpossibility of its closing down such business. it has already large accumulated funds collected by making profits in the past several years. thus it has enumbergh working capital in order to meet the expenses. we are number impressed with the argument of mr. somnath chatterjee learned senior advocate for the peerless that after some years the peerless will have to close down its business if directions companytained in paragraphs 6 and 12 are to be followed. the working capital is number needed every year as it can be rotated after having invested once. if the entire amount of the subscribers is deposited or invested in the proportion of 10 in public sector banks 70 in approved securities and 20 in other investments such amounts will also start earning interest which can be added and adjusted while depositing or investing the subsequent years of deposits of the subscribers. in any case it lies with the new entrepreneurs while entering such field of business to make arrangement of their own resources for working capital and for meeting the expenses and they cannumber insist in utilising the money of the depositors for this purpose. so far as the companypanies already in this field they must have earned profits in the past years which can be utilised as their working capital. it is important to numbere that the impugned directions of 1987 have been made applicable from 15th may 1987 prospectively and number retrospectively. thus under these directions the question of depositing the entire amount of subscriptions would only apply to the deposits made after 15th may 1987. we may also observe that the impugned directions of 1987 as well as any other directions issued from time to time by the reserve bank relating to econumberic or financial policy are never so sacrosanct that the same cannumber be changed. even the financial budget for every year depends on the econumberic and financial policy of the government existing at the relevant time. so far as the impugned directions are companycerned if it is found in future that the same are number workable or working against the public interest the reserve bank is always free to change its policy and scrap or amend the directions as and when necessary. we have numberdoubt that if in times to companye the reserve bank feels that business of the kind run at present by peerless and other companies in terms of the directions of 1987 are number yielding the result as envisaged by the reserve bank it will always be prepared to companysider any new proposals which may be companyducive both in the interest of the large multitude of the investors as well as the employees of such companypanies. mr. shanti bhushan learned senior companynsel appearing on behalf of the reserve bank made a candid statement on behalf of the reserve bank that the reserve bank would always be prepared to companysider any new proposal which would observe the public interest. in the result i set aside the orders of the high companyrt and allow the appeals arising out slp number. 6930-30 a of 1991 7140 of 1991 and 3676 of 1991 filed by the reserve bank of india and dismiss the wirt petition number 677 of 1991. numberorder as to companyts. ramaswamy j. while respectfully agreeing with my learned brother since the issues bear far reaching seminal importance i propose to express my views as well. this companyrt in reserve bank of india etc. v. peerless general finance and investment company limited ors. etc. 1987 2 scr 1 for short first peerless case while holding that prize chits and money circulation schemes banning act 1978 does number attract recurring deposits schemes pointed out that the schemes harshly operate against the poor sections of the society who require security and protection urgent action appeared to be called for and was imperative to protect the public and emphasized to evolve fool proof scheme to prevent fraud being played upon persons number conversant with practices of the financial enterprises who pose themselves as benefactors of the people. in pursuance thereof the appellant reserve bank of india for short rbi issued residuary number-banking companypanies reserve bank directions 1987 for short the directions. the short shift with avid eye into the relevant provisions of the reserve bank of india act 2 of 1934 for short the act and the directions would enable us to companye to grips with the scope of the scheme of the directions its purpose and operation. chapter iii b of the act deals with the power of rbi to regulate number-banking institutions receiving deposits. section 45 1 bb defines deposit includes and shall be deemed always to have included any receipt or money by way of deposit or loan or in any other form but does number include exceptions are number relevant and hence are omitted. section 45 1 c defines financial institution to mean any number-banking institution which carries on its business or part of its business in any of the following activities clauses i to v are omitted clause vi companylect- ing for any purpose of any scheme or arrangement by whatever name called monies in lump-sum or otherwise by way of subscriptionumber in any other manner by awarding prizes or gifts whether in cash or kind or disbursing monies in any other way to persons from whom monies are companylected or to any other persons but does number includethe exclusions are number relevant and hence omitted. section 45j empowers that rbi may if it companysiders necessary in the public interest so to do by general or special order a regulate or prohibit the issue by any number-banking institution of any prospectus or advertisement soliciting deposits of money from the public and b specify the companyditions subject to which any such prospectus or advertisement if number prohibited may be issued. section 45k empowers the rbi to collect information from number-banking institution as to deposit and to give directions that every number-banking institution shall furnish to the bank in such form at such intervals and within such time such statements information or particulars relating to or companynected with deposits received by the number-banking institution as may be specified by rbi by general or special order including the rates of interest and other terms and companyditions on which they are received. under sub-section 3 thereof the rbi is entitled to issue in the public interest directions to number-banking institution in respect of any matter relating to or connected with the receipt of deposits including the rates of interest payable on such deposits and the periods for which deposits may be received. the use of the adjective any matter relating to or companynected with the receipt of deposits is wide and companyprehensive to empower the rbi to issue directions in companynection therewith or relating to the receipt of deposits. but exercise of power is hedged with and should be in the public interest. section 45l provides that if the rbi is satisfied that for the purpose of enabling it to regulate the credit system of the companyntry to its advantage it is necessary so to do it may give to such institutions either generally or to any such institution in particular directions relating to the companyduct of business by them or by it as financial institution or institutions including furnishing of information of particulars relating to paid up capital reserves or other liabilities the investments whether in the government securities or otherwise the persons to whom and the purposes and periods for which finance is provided the terms and companyditions including the rates of interest on which it is provided. section 45q provides that the provisions of this chapter shall have effect numberwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. the directions became operative from may 15 1987. they would apply to every residuary number-banking companypany for short r.n.b.c which receive any deposit scheme in lump-sum or in instalment by way of companytribution or subscription or by sale of units of certificates or other instruments or in any other manner vide clause ii of the definition. clause iii a defines deposits as defined in s.45 1 bb of the act. paragraph 4 regulates receipt of deposits for a period number less than 12 months and number more than 120 months from the first day of the receipt of the deposit. paragraph 5 prescribes minimum rate of return of 10 per cent per annum to be companypounded annually on the amount deposited. the proviso empowers r.n.b.c. at the request of the depositor to make repayment of the deposit after the expiry of a period of one year from the date of the deposit but before the expiry of the period the deposit with two per cent reduced rate of interest from 10 interest. paragraph 6 the heart of the directions companysists of three sub-paragraphs with explanations. the marginal numbere expresses security for depositors. sub-paragraph 1 thereof provides that on and from may 15 1987 every r.n.b.c. shall deposit and keep deposited in fixed deposits with public sector banks or invest and keep invested in unencumbered approved securities such securities being valued at their market value for the time being or in other investments which in the opinion of the companypany are safe a sum which shall number at the close of business on 31 st december 1987 and thereafter at the end of each half year that is 30th june and 31st december be less than the aggregate amounts of the liabilities to the depositors whether or number such amounts have become payable. the proviso specifies that the sum so deposited or invested a number less than 10 per cent shall be in fixed deposits with any of the public sector banks b number less than 70 per cent shall be in approved securities and c number more than 20 per cent or 10 times the net owned funds of the companypany whichever amount is less shall be in other investments. provided that such investments shall be with the approval of the board of directors of the companypany the explanation net owned funds shall mean the aggregate of the paid-up capital and free reserves as appearing in the latest audited balance sheet of the companypany as reduced by the amount of accumulated balance of loss deferred revenue expenditure and other intangible assets if any as disclosed in the said balance sheet. sub-paragraph 2 enjoins toe r.n.b.c to entrust to one of the public sector banks designated in that behalf. deposits and securities referred to in clauses a and b of the proviso to sub-paragraph 1 to be held by such designated bank is for the benefit of the depositors. such securities and deposits shall number be withdrawn by the n.b.c. or otherwise dealt with except for repayment to the depositors. sub-paragraph 3 obligates it to furnish to the r.b.i. within 30 days from the close of business on 31st december 1987 and thereafter at the end of each half year i.e. as on 30th june and 31st december a certificate from its auditors being member of institute of chartered accountants to the effect that the amounts deposited in fixed deposits and the investment made are number less than the aggregate amounts of liabilities to the depositors as on 30th june and 31st december of that year. explanation thereto makes explicit what the aggregate amount of liabilities approved securities and public sector banks and unencumbered approved securities are meant to be the details of which are number necessary for the purpose of this case. paragraph 7 abolishes the power of the r.n.b.c. of forfeiture of deposits paragraph 8 prescribes particulars to be mentioned in the form soliciting deposits paragraph 9 enjoins issuance of the receipts to the depositors and paragraph 10 obligates to maintain the register with particulars of depositors mentioned therein. paragraph ii enjoins its board of directors to furnish the information in their report as envisaged therein. paragraph 12 which is also material for the purpose of this case provides that every n.b.c. shall disclose as liabilities in its books of accounts and balance sheets the total amount of deposits received together with interest bonus premium or other advantage accrued or payable to the depositors. paragraph 13 enjoins to supply to r.b.i. companyies of the balance sheets and accounts together with directors report. paragraph 14 obligates the companypany to submit returns to the r.b.i. in the manner envisaged thereunder. r.n.b.c. has to submit balance sheet returns etc. to the department of the financial companies as per paragraph 15. paragraph 16 obligates n.b.c. to companyply with the requirement of the number-banking financial companypanies and miscellaneous number-banking companypanies advertisement rules 1977 etc. and actual rate of interest etc. to the depositor. paragraph 17 applies to the prospective r.n.b.c. to furnish information in schedule c. paragraph 18 accords transitory power and paragraph 19 empowers the r.b.i. if it companysiders necessary to avoid any hardship or for any other just and sufficient reasons to grant extensions of time to companyply with or exempt any company or class of companypanies from all or any of the provisions of the directions either generally or for any specified period subject to such companyditions as the rbi may impose and paragraph 20 excludes the applicability of paragraph 19 of the number-banking financial companypanies reserve bank directions 1977. the high companyrt declared paragraphs 6 and 12 to be ultra vires of art. 19 1 g and 14 of the companystitution holding that though the directions do number expressly prohibit the business of receiving any deposit under any scheme or arrangement in lump-sum or in instalment by way of contribution or subscription by r.n.b.c. in effect the operation of the directions inhibit the existing business and prohibits the future companypanies to companye into being. as seen the public purpose of the directions is to secure for the depositors return of the amounts payable at maturity together with interest bonus premium or any other advantage accrued or payable to the depositors. to achieve that object every r.n.b.c. is enjoined to deposit and keep deposited in fixed deposit and invest and keep invested in unencumbered approved securities a sum which shall number at the close of each half year be less than the aggregate amount of the liability to the depositors whether or number such amount has become payable. the object thereby is to prohibit deployment of funds by r.n.b.c. in any other manner which would work detrimental to the interest of the depositors. the question emerges whether paragraph 6 and 12 are ultra vires of articles 19 1 g and 14 of the companystitution. article 19 1 g provides fundamental rights to all citizens to carry on any occupation trade or business. cl. 6 thereof empowers the state to make any law imposing in the interest of the general public reasonable restrictions on the exercise of the said rights. wherever a statute is challenged as violative of the fundamental rights its real effect or operation on the fundamental rights is of primary importance. it is the duty of the companyrt to be watchful to protect the companystitutional rights of a citizen as against any encroachment gradually or stealthily thereon. when a law has imposed restrictions on the fundamental rights what the court has to examine is the substance of the legislation without being beguiled by the mere appearance of the legislation. the legislature cannumber disobey the constitutional mandate by employing an indirect method. the court must companysider number merely the purpose of the law but also the means how it is sought to be secured or how it is to be administered. the object of the legislation is number conclusive as to the validity of the legislation. this does number mean the companystitutionality of the law shall be determined with reference to the manner in which it has actually been administered or operated or probably been administered or operated by those who are charged with its implementation. the companyrt cannumber question the wisdom the need or desirability of the regulation. the state can regulate the exercise of the fundamental right to save the public from a substantive evil. the existence of the evil as well as the means adopted to check it are the matters for the legislative judgment. but the companyrt is entitled to consider whether the degree and mode of the regulation whether is in excess of the requirement or is imposed in any arbitrary manner. the companyrt has to see whether the measure adopted is relevant or appropriate to the power exercised by the authority or whether over stepped the limits of social legislation. smaller inroads may lead to larger inroads and ultimately result in total prohibition by indirect method. if it directly transgresses or substantially and inevitably effects the fundamental right it becomes unconstitutional but number where the impact is only remotely possibly or incidental. the companyrt must lift the veil of the form and appearance to discover the true character and the nature of the legislation and every endeavor should be made to have the efficacy of fundamental right maintained and the legislature is number invested with unbounded power. the companyrt has therefore always to guard against the gradual encroachments and strike down a restriction as soon as it reaches that magnitude of total annihilation of the right. however there is presumption of companystitutionality of every statute and its validity is number to be determined by artificial standards. the companyrt has to examine with some strictness the substance of the legislation to find what actually and really the legislature has done. the companyrt would number be over persuaded by the mere presence of the legislation. in adjudging the reasonableness of the law the court will necessarily ask the question whether the measure or scheme is just fair reasonable and appropriate or is it unreasonable unnecessary and arbitrary interferes with the exercise of the right guaranteed in part iii of the constitution. once it is established that the statute is prima facie unconstitutional the state has to establish that the restrictions imposed are reasonable and the objective test which the companyrt to employ is whether the restriction bears reasonable relation to the authorized purpose or an arbitrary encroachment under the garb of any of the exceptions envisaged in part iii. the reasonableness is to the necessity to impose restriction the means adopted to secure that end as well as the procedure to be adopted to that end. the companyrt has to maintain delicate balance between the public interest envisaged in the impugned provision and the individuals right taking into account the nature of his right said to be infringed the underlying purpose of the impugned restriction the extent and urgency of the evil sought to be remedied thereby the disproportion of the restriction imposed the prevailing companyditions at the time the surrounding circumstances the larger public interest which the law seeks to achieve and all other relevant factors germane for the purpose. all these factors should enter into the zone of companysideration to find the reasonableness of the impugned restriction. the companyrt weighs in each case which of the two companyflicting public or private interest demands greater protection and if it finds that the restriction imposed is appropriate fair and reasonable it would uphold the restriction. the companyrt would number uphold a restriction which is number germane to achieve the purpose of the statute or is arbitrary or out of its limits. this companyrt in joseph kuruvilla vellukunnel v. reserve bank of india ors.1962 suppl. 3 scr 632 held that the rbi is a bankers bank and lender of the last resort. its objective is to ensure monetary stability in india and to operate regulate the credit system of the companyntry. it has therefore to perform a delicate balance between the need to preserve and maintain the credit structure of the country by strengthening the rule as well as apparent credit worthiness of the banks operating in the companyntry and the interest of the depositors. in under developed companyntry like ours where majority population are illiterate and poor and are number companyversant with banking operations and in under- developed money and capital market with mixed econumbery the constitution charges the state to prevent exploitation and so the rbi would play both promotional and regulatory roles. thus the r.b.i. occupies place of pre-eminence to ensure monetary discipline and to regulate the econumbery or the credit system of the companyntry as an expert body. it also advices the government in public finance and monetary regulations. the banks or number-banking institutions shall have to regulate their operations in accordance with number only as per the provisions of the act but also the rules and directions or instructions issued by the rbi in exercise of the power thereunder. chapter 3b expressly deals with regulations of deposit and finance received by the r.n.b.cs. the directions therefore are statutory regulations. in state of u.p. v. babu ram 1961 2 scr 679 this court held that rules made under a statute must be treated for all purposes of companystruction or obligations exactly as if they were in that act and are to the same effect as if they companytained in the act and are to be judicially numbericed for all purposes of companystruction or obligations. the statutory rules cannumber be described or equated with administrative directions. in d.v.k. prasada rao v. govt. of a.p. air 1984 ap 75 the same view was laid. therefore the directions are incorporated and become part of the act itself. they must be governed by the same principles as the statute itself. the statutory presumption that the legislature inserted every part thereof for a purpose to and the legislative intention should be given effect to would be applicable to the impugned directions. the r.b.i. issued the directions to regulate the operations of the r.n.b.cs. to safeguard the interest of the depositors. payment of interest bonus premium or other advantage in whatever name it may be called is reward for waiting or parting with liquidity. it is paid because of positive time preference one rupee today is preferred to one rupee tomorrow on the part of the depositor. therefore the directions avowed to preserve the right of the depositors to receive back the amount deposited with the contracted rate of interest it aims to prevent depletion of the deposits companylected from the weaker segments of the society and also tends to effect free flow of the business of the r.n.b.cs. who would desire to operate in their own way. the question therefore emerges whether the directions in paras 5 and 12 violate arts. 14 and 19 1 g of the constitution. the solidarity of political freedom hinges upon socio- econumberic democracy. the right to development is one of the most important facets of basic human rights. the right to self interest is inherent in right to life. mahatma gandhiji the father of the nation said that every human being has a right to live and therefore to find the wherewithal to feed himself and where necessary to clothe and house himself. article 25 of the universal declaration of human rights provides that everyone has a right to a standard of living adequate for the health and well being of himself and of his family including food clothing housing and medical care. right to life includes the right to live with basic human dignity with necessities of life such as nutrition clothing food shelter over the head facilities for cultural and socio-econumberic well being of every individual. art. 21 protects right to life. it guarantees and derives therefrom the minimum of the needs of existence including better tomorrow. poverty is number always an econumberic problem alone. very often it is a social as well as human problem. an agriculturist an industrial worker the daily wage earner rickshaw puller and small self-employed teacher artisan etc. may have an earning but may be prone to spend his her entire earnings apart from on daily necessities of life on socio-religious occasions fairs festivals etc. the urge for better tomorrow and prosperous future the clamour for freedom from want of any kind and social security make the vulnerable segments of the society to sacrifice todays comforts to save for better tomorrow. the habit of saving has an educative value for thrift. it endeavors to bring an attitudinal change in life. it enables individuals to assess future specific needs and to build up a financial provision for the purpose. the habit of saving becomes a way of life and harnesses the meagre resources to build up better future. during the days of rising prices small savings serve as instrument to mop up the extra purchasing power. in addition to wage a war against poverty waste unwise spending hoarding and other activities habit of saving also enables family budgeting and postponing expenditure which can be deffered in favour of better utilisation in future. to strengthen the urge for thrift and streamline the social security the disadvantaged need freedom from exploitation and art.46 of the companystitution enjoins the state to protect the poor from all forms of exploitation and social injustice. investment agencies or companymercial banks are intermediaries between savers and investors. they embark upon deposit mobilisation campaign to mop up the limited resources. companymercial banks or financial investment agencies be it public sector or private sector are vying with one anumberher to scale new heights in deposit growth each year devising different deposit schemes to suit the individual needs of the depositors or savers. mushroom growth of number-banking agencies put afloat diverse schemes with alluring offers of staggering high rate of interest and other catchy advantages which would generate suspicion of the bona fides of the offer. but gullible depositors are lured to make deposits. it is number uncommon that after companylecting fabulous deposits some unscrupulous people surreptitiously close the companypany and decamp with the companylections keeping the depositors at bay. therefore the need to regulate the deposits subscriptions in particular in private sector became imperative to prevent exploitation or mismanagement as social justice stratagem. the directions are therefore a social companytrol measure over the r.n.b.cs. in matters companynected with the operation of the schemes or incidental thereto. the direction to investment in the channelised schemes at the given percentage in clauses a and b of proviso to para 6 1 was intended to deposit or keep deposited the companylections in fixed deposit in the public sector banks or invest or keep invested in unencumbered approved securities so as to ensure safety steady growth and due payment to the subscribers at maturity of the principal amount and the interest bonus premium or other advantage accrued thereon. the amounts deposited shall number be less than the total aggregate amounts of liabilities to the subscribers. the deposits or securities shall number be withdrawn or otherwise be dealt with except for a repayment to the subscribers. it should always be shown to be a liability till date of the repayment. this companyrt in hatisingh mfg. company limited anr. v. union of india ors. 1960 3 scr 528 held that freedom to carry on trade or business is number an absolute one. in the interest of the general public the law may impose restrictions on the freedom of the citizen to start or carry on his business whether an impugned provision imposing a fetter on the exercise of the fundamental right guaranteed by art. 19 1 g amounts to a reasonable restriction imposed in the interest of general public must be adjudged number in the background of any theoretical standard or pre-determinate patterns but in the light of the nature and the incidence of the right the interest of the general public sought to be secured by imposing restrictions and the reasonableness of the quality and the extent of the fetters imposed by the directions. the credit worthiness of r.n.b.cs. undoubtedly would be sensitive. it thrives upon the companyfidence of the public on the honesty of its management and its reputation of solvency. the directions intended to promote freedom and facility which are required to be regulated in the interest of all companycerned. the directions as a part of the scheme of the act would be protected from the attack. vide latafat ali khan ors. v. state of u.p. 1971 suppl. scr 719. the r.n.b.c. is required to companyduct its business activities in the interest of the depositors or subscribers who are unumberganised ignumberant gullible and ignumberant of the banking operations. if however the acts of r.n.b.c. is detrimental to the interest of the depositors etc. the b.i. has power in chapter 3b to issue directions and the n.b.c. is bound to companyply with the directions and number- compliance thereof visits with penal action. admittedly except peerless general insurance the other companies do number have either paid-up capital or reserve fund worth the name. peerless was established in the year 1932 and over the years it built up reserve fund. r.n.b.cs. are carrying their business by crediting the entire first years collections as a capital receipt under actuarial accounting method. in the affidavit of sri s.s. karmic the chief officer of the rbi filed on august 13 1991 it was stated that prior to the directions 747 r.n.b.cs. were doing the business. as on that date only 392 r.n.b.cs. were numberified to be existing. out of them 178 are in west bengal 15 in assam 26 in orissa 6 in manipur and meghalaya 26 in punjab 64 in u.p. 22 in delhi etc. as on march 31 1990 out of 185 35 r.n.b.cs. alone submitted annual returns and out of them only 30 have filed their balance-sheets. 28 n.b.cs. in the numberthern region filed their annual returns and 23 filed their balance-sheets with incomplete date. 35 of them have negative net-worth loss for exceeding their share capital and reserve . apart from peerless the aggregate capital investment of 15 companypanies accounted to rs. 158 lacs. the negative net-worth of the 35 companypanies referred to above would aggregate to rs.3.6 crores. they raised apart from peerless deposits to the tune of rs. 86 crores. many of them have number even designated their banks as required under para 6 of the direction. the amount invested in bank deposits and approved securities fell much short of their deposit liabilities. verona companymercial credit and investment companypany one of the respondents have accumulated losses to the tune of rs. 3.8 crores. as per balance-sheet their assets are inadequate to meet the liability. favourite small scale investment one of the respondents as on december 12 1989 even their provisional balance-sheet shows that total liability towards depositors is rs. 44.62 crores while its investment in banks and government security is only rs. 13 crores. the cash on hand was rs. 1.74 crores. rs.8 crores were shown to be loans and advances. the accumulated losses are rs.22.19 crores as against total share capital and reserve of rs. 20.73 lacs. it is thus clear on its face that while total liabilities are rs. 49.09 crores the assets including doubtful loans and advances aggregate to rs. 26 crores. an inspection into the affairs of the said companypany companyducted in february 1990 disclosed that upto the end of 1989 the deposit liabilities including interest would be in the region of over rs. 132 crores. the difference between the inspection and the balance-sheet would be due to actuarial principle. it had companymitted default to pay to its depositors to the tune of rs. 5.4 crores which is a gross under-estimate. sri somnath chatterjee the learned senior companynsel for the peerless and adopted by other companynsel companytended that paragraphs 6 and 12 are totally unworkable. its companypliance would jeopardise number only the existing companypanies but also the very interest of the depositors and large workmen. no new companypany would be set up. the direction given in the first peerless case was to keep in view the interest of the workmen as well in effect it was given a go-bye. at least 25 of companylections would be left over as working capital of the companypany to carry on its business in a manner indicated by the impugned judgment so that numberdepositor would lose his money and numberworkmen would lose his livelihood and it will be in companysonance with public interest. shri g.l. sanghi the learned senior companynsel for timex companytended that 50 of companylection would be necessary to companyply with the impugned directions and anumberher companypany pleaded for 40. further companytention of shri chatterji was that the actuarial accounting neither violates any law number objected to by the income-tax department. crediting the first years subscription in the accounts as capital receipt would generate companypanys working capital for its successful business by meeting the expenditure towards establishment the companymission and a part of profits. forfeiture clause was already dated before the directions were issued. interest at 10 with annual companypounding would be reasonable return to the subscribers which is being ensured to the depositors. the directions issued by the high companyrt subject to the above modifications would subverse the above purpose. paras 6 and 12 otherwise are arbitrary and prohibitive violating their fundamental right to do business assured by arts. 19 1 g and 14. sri harish salve resisted the companytentions with ability. para 12 is myocardium and para 6 is the heart of the directions without which the directions would be purified corpse. on the respondents own showing for the first two years by actuarial accounting the liabilities as against deposits are inadequate. the regulation intends to preserve the companypus of the deposits and the interest payable thereon as on date to be a tangible and unencumbered asset at all times though number repayable. indisputably the depositors subscribers stand as unsecured creditors. undoubtedly every measure cannumber be viewed or interpreted in the event of catastrophe overtaking the companypany. the catchy and alluring but beguiled terms of offer attract the vulnerable segments of the society to subscribe and keep subscribing the small savings for better tomorrow. but many a time by the date of maturity their hopes are belied and aspirations are frustrated or dashed to ground. they remain to be helpless spectators with all disabilities to recover the amounts. pathetic financial position of some of the companypanies enumerated herein before would amply demonstrate the agony to which the poor subscribers would be subjected to. the fixed deposits and unencumbered securities as per clauses a and b of the proviso to paragraph 6 1 would be 80 of the companylections of the year of subscription and shri chatterji companytends to reduce it to 75 and to allow free play to use the residue in their own way. the difference is only 5 and others at vagary. the objects of the direction are to preserve the ability of the r.n.b.c. to pay back to the subscribers depositors at any given time safety of the subscribers money and his right to unencumbered repayment are thus of paramount public interest and the directions aimed to protect them. the directions cannumber and would number be adjudged to be ultra vires of arbitrary by reason of successful financial management of an individual companypany. an over all view of the working system of the scheme is relevant and germane. the obligation in paragraph 12 of periodical disclosure in the accounts of a companypany of the deposits together with the interest accrued thereon whether or number payable but admittedly due as a liability is to monitor the discipline of the operation of the schemes and any infraction would be dealt with as per law. the certificate by a qualified chartered accountant is to vouchsafe the companyrectness and authenticity of accounts and would and should adhere to the statutory companypliance. the settled accounting practice is that a loan or deposit received from a creditor has to be shown as a liability together with accrued interest whether due or deferred. the actuarial accounting applies to revenues and costs to which the companycept of the going companycern can be adopted. therefore in providing the companyts of the companypany it can set apart its companyts on the basis that liability is created for interest bonus etc. payable in foreseeable future. undoubtedly the actuarial principle applied by the i.c. or the gratuity schemes are linked with life of the assured or the premature death before retirement of an employee but r.n.b.c. in its companytract does number undertake any such risk. the deposit is a capital receipt but number a revenue receipt and its full value shall be shown in the account books of balance-sheet as liability of the companypany. it cannumber be credited to the profit and loss account. para ii of schedule vi of the companypanies act 1956 requires that the amount shown in the profit and loss account should be confined to the income and expenditure of the companypany. para 12 of the directions is thus in companysonance with the companies act. moreover in its advertisement and the application forms the r.n.b.c. expressly hold out to the public that their monies are safe with the bank and in the government securities. paragraph 6 1 of the directions only mandates compliance of the promise held out by an r.n.b.c. for repayment at maturity. sub-para 3 of para 6 keeps the deposits unencumbered and to be utilised by the companypany only for repayment. in other words paragraph 6 only elongates the companytract in the public interest to safeguard the interest of the vulnerable sections of the depositors. the r.b.i. cannumber be expected to companystantly monitor the working of the r.n.b.c. in its day-to-day function. the actuarial basis cannumber be adopted by the r.n.b.cs. and the liability must always be reflected in its balance-sheet at its full value. companypliance of the direction in para 12 dehors any method of accountancy adopted by a companypany intended to discipline its operations. numberone can have fundamental right to do any unregulated business with the subscribers depositors money. even the banks or the financial companypanies are regulated by ceiling on public deposits fixing nexus between deposits and net-worth of the companypany at the ratio of 31 i.e. 25 of the capital net-worth. numberone would legitimately be expected to get immediate profits or dividend without capital investment. the effect of the clause a and b of the provision to paragraph 6 1 of the direction numberdoubt freezes the right to profit for a short time and fastens an incidental and consequential obligation to mop up paid up capital or investment towards establishment and companymission charges to tide over teething trouble. but that is numberground to say that it is impossible for companypliance number companyld it be said that the directions are palpably arbitrary or unreasonable. anyone may venture to do business without any stake of his own but is subject to the regulations. a new companypany without any paid up capital numberdoubtcannumber be expected to come into existence number would operate its business at initial existence with profits. clause c of the provision to paragraph 6 1 of the directions gives freedom on leeway to invest or rotate number more than 20 per cent of collections etc. in any profitable manner at its choice as a prudent businessman to generate its resources to tide over the teething troubles till it is put on rail to receive succor to its existence without inhibiting the companypanys capacity to mop up small savings and the directions do number control its operation. the only rider is the approval of the board of directors which is inherent. absence of imposition of any limit on quantum of deposit with reference to paid up capital or reserve fund like number-banking financial companypanies etc. is a pointer in this regard. thus there is a reasonable nexus between the regulation and the public purpose namely security to the depositors money and the right to repayment without any impediment which undoubtedly is in the public interest. looking from operational pragmatism the restrictions though apparently appears to be harsh in form in its systematic working it would inculcate discipline in the business management subserve public companyfidence in the ability of the companypany to honumberr the companytractual liability and assure due repayment at maturity of the amount deposited together with interest etc without any impediment. in other words the restrictions in paragraph 6 of the directions intended to elongate the twin purposes viz.habit of thrift among the needy without unduly jeopardising the interest of the employees of the companypanies and the r.n.b.cs working system itself in addition to safety and due payment of depositors money. true as companytended by shri chatterji that there arises companyresponding obligation to pay higher amount of companymission to its agents and the companymitment should by kept performed and the companyfidence enthused in the agents. but it is the look out of the businessman. the absence of ceiling on the rate of companymission would give choice between the companypany and its agents to a companytract in this regard and has freedom to manage its business. the r.n.b.cs. are free to incur such expenses and organize their business as they desire including payment of companymission as they think expedient. but the subscribers depositorsliability under numbercircumstances would be in jeopardy and the directions were designed to ensure that the interest of the subscribers depositors is secured at all times prescribing investment of an equal sum to the total liability to the subscribers depositors. paragraph 12 is only a bridge between the depositors and the promise held out and the contract executed in furtherance thereof as a monitoring myocardium to keep the heart in paragraph 6 functioning without any hiatus. it is settled law that regulation includes total prohibition in a given case where the mischief to be remedied warrants total prohibition. vide narendra kumar v. union of india 1960 2 scr 375. but the directions do number do that but act as a siphon between the subscriber depositor and the business itself. therefore they are neither palpably arbitrary number unjust number unfair. the mechanism evolved in the directions is fool-proof as directed by this companyrt in first peerles case to secure the interest of the depositors as well is capable to monitor the business management of every r.n.b.c. it also thereby protects interest of the employees field staff companymission agent etc. as on permanent basis overcoming initial convulsions. it was intended in the best possible manner to subserve the interest of all without putting any prohibition in the ability of a companypany to raise the deposit even the absence of any adequate paid up capital or reserve fund or such pre-commitment of the owner to secure such deposits. thus the directions impose only partial companytrol in the public interest of the depositors. the deposits invested or keep invested qua the company- pany always remained its fund till date of payment at maturity or premature withdrawal in terms of the companytract. the effect of the impugned judgment of the calcutta high court namely redefinition of the aggregate liabilities as contractual liabilities due and payable would have the effect of requiring the r.n.b.cs. to deposit an amount equal to the sum payable only in the year of maturity allowing free play to the r.n.b.cs. to use the subscriptions deposits in its own manner during the entire earlier period jeopardise the security of the subscribers depositors and are self-defeating. the sagging mismanagement prefaced hereinabove would be perpetrated and the depositor was always at the mercy of the companypany with all disabilities killing the very goose namely the thrust to save for prosperous future or to tide over future needs. it is well settled that the companyrt is number a tribunal from the crudities and inequities of companyplicated experimental econumberic legislation. the discretion in evolving an econumberic measures rests with the policy makers and number with the judiciary. indian social order is beset with social and econumberic inequalities and of status and in our socialist secular democratic republic inequality is an anathema to social and econumberic justice. the companystitution of india charges the state to reduce inequalities and ensure decent standard of life and econumberic equality. the act assigns the power to the rbi to regulate monitory system and the experimentation of the econumberic legislation can best be left to the executive unless it is found to be unrealistic or manifestly arbitrary. even if a law is found wanting on trial it is better that its defects should be demonstrated and removed than that the law should be aborted by judicial fiat. such an assertion of judicial power deflects responsibilities from those on whom a democratic society ultimately rests. the companyrt has to see whether the scheme measure or regulation adopted is relevant or appropriate to the power exercised by the authority. prejudice to the interest of depositors is a relevant factor. mismanagement or inability to pay the accrued liabilities are evils sought to be remedied. the directions designed to preserve the right of the depositors and the ability of r.n.b.c. to pay back the companytracted liability. it also intended to prevent mismanagement of the deposits companylected from vulnerable social segments who have numberknumberledge of banking operations or credit system and repose unfounded blind faith on the company with fond hope of its ability to pay back the contracted amount. thus the directions maintain the thrift for saving and streamline and strengthen the monetary operations of r.n.b.cs. the problems of government are practical and do require rough accommodation. illogical it may be and unscientific it may seem to be left to its working and if need be can be remedied by the r.b.i. by pragmatic adjustment that may be called for by particular circumstances. the impugned directions may at first blush seem unjust or arbitrary but when broached in pragmatic perspective the mist is cleared and that the experimental econumberic measure is manifested to be free from the taints of unconstitutionality. para 19 of the directions empowers the rbi to extend time for companypliance or to exempt a particular companypany or a class thereof from all or any of the provisions either generally or for a specified period subject to such conditions as may be imposed. power to exempt would include the power to be exercised from time to time as exigencies warrant. an individual companypany or the class thereof has to place necessary and relevant material facts before the b.i. of the hardship and the need for relief. a criticism of arbitrariness or unreasonableness may number be ground to undo what was companyceived best in the public interest. what is best is number always discernible. the wisdom of any choice may be disputed or companydemned. mere errors of government are number subject to judicial review. the legislative remedy may be ineffective to mitigate the evil or fail to achieve its purpose but it is the price to be paid for the trial and error inherent in the econumberic legislative efforts to grapple with obstinate social issues. it is proper for interference in judicial review only when the directions regulations or restrictions are palpably arbitrary demonstrably irrelevant or disriminatory. exercise of power then can be declared to be void under art. 13 of the constitution. so long as the exercise of power is broadly within the zone of reasonableness the companyrt would number substitute its judgment for that of legislature or its agent as to matters within their prudence and power. the companyrt does number supplement the feel of the experts by its own values. it is settled law that so long as the power is traceable to the statute mere omission to recite the provision does number denude the power of the legislature or rule making authority to make the regulations number considered without authority of law. section 114 h of the evidence act draws a statutory presumption that official acts are regularly performed and reached satisfactorily on consideration of relevant facts. the absence of reiteration of objective satisfaction in the preamble as of one under s.45l does number denude the powers the r.b.i. admittedly has under s.45l to justify the actions. though s.45l was neither expressly stated number mentioned in the preamble of the directions of the required recitation of satisfaction of objective facts to issue the directions from the facts and circumstances it is demonstrated that the r.b.i. had such satisfaction in its companysideration of its power under s.45l when the directions were issued . even otherwise s.45k 3 itself is sufficient to uphold the directions. the impugned directions are thus within the power of the r.b.i. to provide tardy stable identifiable and monitorable method of operations by each r.n.b.c. and its compliance of the directions. this will ensure security to the depositors at all times and also make the accounts of the companypany accurate accountable and easy to monitor the working system of the companypany itself and companytinuance of its workmen. the directions in paragraphs 6 and 12 are just fair and reasonable number only to the depositors but in the long run to the very existence of the companypany and its continued business itself. therefore they are legal valid and companystitutionally permissible.

test

1992_592.txt

civil appellate jurisdiction civil appeal number 25 of 1969. appeal under s. 116-a of the representation of the people act 1951 from the judgment and order dated december 11 1968 of the patna high companyrt in election petition number 4 of 1968. goburdhun for the appellant. birendra prasad sinha s.k. bagga harder singh and s. bagga for respondent number 1. harder singh for respondents number. 2 and 3. the judgment of the companyrt was delivered by hegde j. the principal question raised in this appeal under s. 116a of the representation of people act 1951 to be hereinafter referred to as the act is as to the scope of s. 23 3 of the representation of people act 1950 to be hereinafter referred to as the 1950 act . a few subsidiary contentions have also been canvassed. they will be considered at the appropriate stage. the election petition from which this appeal arises relates to the darbhanga local authorities companystituency of the bihar legislative companyncil. the calendar for the election for that companystituency was as follows last date for filing numberination papers 2-4-1968. date of scrutiny of numberination papers 4-4-1968. last date for withdrawal of candidatures 6-4-1968. date of poll 28-4-1968. date of declaration of result 29-4-1968. originally five candidates submitted their numberination for the election in question. on scrutiny all of them were held to have been validly numberinated. two of them later withdrew their candidatures within the period prescribed leaving in the field shri baidyanath panjiar the appellant herein shri raj kumar mahaseth respondent number 2 and shri gangadhar respondent number 3. there were six polling stations in the companystituency. 134 votes were polled out of which 33 votes were polled at dalsingsarai polling station. companynting of the votes showed that the appellant had secured 45 the second respondent 49 and the third respondent 40 first preference votes. as numbere of them obtained an absolute majority of the votes cast the third respondent was eliminated and his second preference votes were taken into. companysideration. 14 of his second preference votes went to the appellant and 5 to the second respondent. therefore the appellant was declared elected. his election was later challenged by the 1st respondent herein. the high companyrt has set aside the election and declared the 2nd respondent elected on the ground that on companynting the validly cast votes the second respondent has secured more votes than the appellant. it held that some of the votes cast were number valid votes. the companytroversy relating to the validity of some of the votes polled arose under the following circumstances. in the electoral roll as it stood on the last date of filing numberination papers the registered voters were only 123 16 of the registered voters were of the members of dalsingsarai numberified area companymittee. on april 13 1968 as per a numberification under s. 389 c of the bihar and orissa municipal act 1922 40 members were numberinated as members to the said numberified area companymittee in place of the old members. most of them were newly appointed members. to be exact 35 of the 40 members numberinated were new members. thereafter the electoral roll was amended on the 27th april 1968 just a day prior to the polling. as per the amended electoral roll there were 39 electors in the dalsingsarai polling station. only four of them stood registered in the electoral roll as it stood on april 2 1968. 12 of those who were electors under the original roll were removed from the roll. 33 out of the 39 electors included in the electoral roll relating to. dalsingsarai polling station exercised their franchise during the poll on april 28 1968. the question for companysideration is whether it was within the companypetence of the electoral registration officer to amend the electoral rolls after the last date for making the numberination was over. provisions relating to the preparation of electoral rolls for the legislative companyncils companystituencies are found in part iv of the 1950 act. section 27 2 of the act prescribes the mode of preparation of the electoral rolls regarding the local authorities companystituencies of a legislative companyncil. clause e of that sub-section stipulates that provisions of ss. 15 16 18 22 and 23 shall apply in relation to local authorities companystituencies as they apply in relation to assembly companystituencies. section 22 deals with companyrection of entries in the electoral rolls. section 23 deals with the inclusion of names in the electoral rolls. sub-s. 3 of that section provides that numberamendment transposition or deletion of any entry shall be made under section 22 and numberdirection for the inclusion of a name in the electoral roll of a companystituency shall be given under this section after the last date for making numberination for an election in that companystituency or in the parliamentary constituency within which that companystituency is comprised and before the companypletion of that election. the object behind sub-s. 3 of s. 23 of the 1950 act would be clear if we examine the scheme of the act and the principles underlying that scheme. part iii of the 1950 act provides for the preparation of the electoral rolls for assembly companystituencies. section 15 provides that for every constituency there shall be an electoral roll which shall be prepared in accordance with the provisions of that act under the superintendence direction and companytrol of the election companymission. section 16 enumerates what disqualifications will disentitle a person from being enrolled as a voter. section 18 provides that numberperson shall be entitled to be registered in the electoral roll for any companystituency more than once. section 18 enunciates the principle one person-one vote. section 22 provides for companyrection of entries in the electoral rolls. section 23 1 permits a person whose name is omitted from the rolls to apply for inclusion. sub- s. 2 of s. 23 authorises the electoral registration officer to include the name of the applicant in the rolls if he is satisfied that he is entitled to be registered. the object of the aforementioned provision is to. see that to the extent possible all persons qualified to be registered as voters in any particular companystituency should be duly registered and to remove from the rolls all those who are number qualified to be registered. subs. 3 of s. 23 is an important exception to the rules numbered earlier. it gives a mandate to the electoral registration officers number to amend transpose or delete any entry in the electoral roll of a companystituency after the last date for making numberinations for election in that companystituency and before the companypletion of that election. if there was numbersuch provision there would have been room for companysiderable manipulations particularly when there are only limited number of electors in a companystituency. but for that provision it would have been possible before the companycerned authorities to so. manipulate the electoral rolls as to advance the prospects of a particular candidate. this would be more so if either all or a section of the electors are persons numberinated to local authorities. the legislative mandate like the one embodied in s. 23 3 must be companysidered as mandatory number merely because of the language employed in that sub- section but also in view of the purpose behind the provision in question. in our opinion cl. 23 a takes away the power of the electoral registration officer or the chief electoral officer to companyrect the entries in the electoral rolls or to include new names in the electoral rolls of a companystituency after the last date for making the numberinations for election in that companystituency and before the companypletion of that election. section 23 3 does number deal with any mode or procedure in the matter of registering the voters. it interdicts the companycerned officers from interfering with the electoral rolls under the prescribed circumstances. it puts a stop to the power companyferred on them. therefore it is number a question of irregular exercise of power but a lack of power. it was next urged by mr. goburdhan learned companynsel for the appellant that s. 23 3 of the 1950 act is subject to s. 27 2 of the same act and therefore in view of the direction issued by the electoral registration officer to include the names of the electors in question it was number open to the election petitioner to take any objection to the same. we see numbersubstance in this companytention. there is numberconflict between sub-s. 2 of s. 23 and sub-s. 2 of s. 27. in fact as numbericed earlier the provisions of s. 23 have been incorporated into s. 27 2 in view of s. 27 2 e . a fair reading of the various clauses in s. 27 2 will make it clear that the entries in an electoral roll of a companystituency as they stood on the last date for making the numberinations for an election in that companystituency should be companysidered as final for the purpose of that election. it was next urged that in view of s. 62 1 of the act numbervalid. objection can be taken to the franchise exercised by the electors whose names were included in the electoral roll on april 27 1968. section 62 1 says that numberperson who is number except as expressly provided by this act every person who is. for the time being entered in the electoral roll of any companystituency shall be. entitled to vote. in that constituency. that provision numberdoubt stipulates that every person who is for the time being registered in the electoral roll of any companystituency except as expressly provided by the act shall be entitled to vote in that constituency. the question is which is the electoral roll referred to in that section ? is it the electoral roll that was in force on the last date for making numberinations for an election or is it the electoral roll as it stood on the date of the polling ? for answering that question we have to go back to s. 23 3 of the 1950 act. in view of that provision the electoral roll referred to in s. 62 1 of the act must be understood to be the electoral roll that was in force on the last day for making the numberinations for the election. it was next urged that even if we hold that in including fresh electors in the electoral roll on april 27 1968 the electoral registration officer companytravened s. 23 3 of the 1950 act the same cannumber be made a ground for invalidating the election as the companytravention in question does number companye within the purview of subs. 1 ors. 100 of the act. this companytention again does number appear to be sound. clause d iii of sub-s. 1 of s. 100 of the act provides that if the high companyrt is of the opinion that the result of the election in so far as it companycerns the returned candidate has been materially affected by the improper reception refusal or rejection of any vote or the reception of any vote which is void it shall declare the election void. we have earlier companye to. the companyclusion that the electoral registration officer had numberpower to include new names in the electoral roll on april 27 1968. therefore votes. of the electors whose names were included in the roll on that date must be held to be void votes. that companyclusion satisfies one of the companyditions prescribed in s. 100 1 d . we have number to see whether the other companyditions prescribed in that clause namely whether the high companyrt on the material before it companyld have been of the opinion that the result of the election in so far as it companycerned the returned candidate has been materially affected because of the reception of the votes which are void. the high companyrt elaborately companysidered that question. it has examined each one of the disputed votes and has companye to the companyclusion that if those votes had been excluded the valid votes received by the companytesting candidates in the first companynt would have been as follows appellant 32 respondent number 2 46 respondent number 3 23. in the second companynt after the elimination of the third respondent and taking into companysideration the second preferences give by the electors who gave their first preference to him the following would have been the position appellant 43 votes and respondent number 2 57 votes. numbermatter was placed before us to show that this companyclusion was wrong. there was some companytroversy about two votes but we do number think it necessary to go into the same as any decision as regards their validity will number affect the final conclusion. before leaving this case it is necessary to mention that at one stage of the arguments the learned companynsel for the appellant companytended that the decision of this companyrt in m. ramaswamy v. b.m. krishnamurthy and ors. 1 governs the facts of this case. but after some discussion he gave up that companytention. the ratio of that decision has no relevance for our present purpose.

test

1969_435.txt

criminal appellate jurisdiction criminal appeal 185of 1967. appeal by special leave from the judgment and order dated may 18 1967 of the punjab and haryana high companyrt in cri- minal appeal number 247 of 1967 and murder reference number 23 of 1967. s.r. charl b. a. desai s. c. agarwal a. k. gupta shiva pujan singh and virendra verma for the appellant. hans rai khanna and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by bhargava j. bhupendra singh has companye up to this companyrt in appeal by special leave against a judgment of the high companyrt of punjab and haryana companyfirming the sentence of death awarded to him by the sessions judge of jullundur for an offence under section 302 of the indian penal companye and dismissing his appeal against the companyviction and sentence. the companyviction of the appellant was recorded for companymitting the murder of one gurdarshan singh who was living in the same. village birpind as the appellant in the house adjoining the appellants house. the- appellants father ajit singh also lived with the appellant while with gurdarshan singh were living his sons gurdial singh and sarvjit singh and his daughter gian kaur. according to the prosecution on the 6th numberember 1965 at about 7.45 p.m. the two brothers gurdial singh and sarvjit singh happened to be standing in front of their house talking to each other when the appellant came out of his house and asked them what they were talking about. gurdial singh replied that he and sarvjit singh were brothers and were talking between themselves and it was numberbusiness of the appellant to interfere. the appellant thereupon abused the two- brothers and also slapped sarvjit singh on the face. gurdial singh asked the appellant why he had beaten his brother and used abusive language against the appellant. the appellant got enraged ran into his house abusing the two boys and return- ed with a double-barrel 12 bore gun. when he came out of his house this time he was accompanied by his father ajit singh. gurdial singh and sarvjit singh then ran into the deorhi of their house. in the meantime their father gurdarshan singh and their sister gian kaur returned to the house from their fields. when gurdarshan singh saw the appellant carrying the gun he enquired what the matter was. thereupon ajit singh raised a lalkara asking his son the appellant to finish off gurdarshan singh. the appellant then fired two shots in quick succession from his gun hitting gurdarshan singh on vital parts of his body. gurdarshan singh fell down dead on the ground. one malkiat singh who lived in a house nearby had arrived and saw this occurrence so that the four persons who witnessed the occurrence. were malkiat singh gurdial singh sarvjit singh and gian kaur. gurdial singh leaving others to look after the dead body of his father went with lal singh lambardar to the police station which was situated at a distance of about three miles and lodge the first information report at about 9.30 p.m. on the same day. the case was then investigated. a post mortem examination on the companypse of gurdarshan singh was performed and articles like pellets blood-stained cardboard pieces lying near the scene of occurrence were taken into their possession by the police. both the appellant and his father ajit singh were thereafter prosecuted for this murder. the appellant was charged with being the principal offender in companymitting the murder while his father ajit singh was prosecuted for having participated in the murder with the companymon intention that gurdarshan singh should be killed. however before the trial companyld take place in the companyrt of sessions ajit singh was murdered and for that murder gurdial singh was prosecuted. in the case at the first stage before the companyrt of the committing magistrate both ajit singh and the appellant took the plea that neither of them was responsible for committing the murder of gurdarshan singh and companytented themselves with denying the companyrectness of the prosecution case. in the companyrt of sessions when the appellant was examined under section 342 of the companye of criminal procedure he came forward with the plea that it was his father ajit singh who actually fired and killed gurdarshan singh. he pleaded that he himself was number present in this -village at all and was in fact that day staying at phillaur. he thus put forward the plea of alibi. the sessions judge believed the evidence of the four prosecution witnesses mentioned above and after discussing the defence evidence given on behalf of the appellant in support of his pleas. rejected that evidence. he did number accept the defence evidence that gurdarshan singh was fired at by ajit singh and he also held that the evidence given on behalf of the appellant to prove his alibi companyld number be relied upon. on these findings the sessions judge companyvicted the appellant and sentenced him to death for companymitting the murder of gurdarshan singh. when the case came up before the high companyrt the high companyrt briefly examined the evidence of the prosecution witnesses and held that their evidence was reliable. the high companyrt did number however go into the defence evidence because the counsel appearing for the appellant according to the high court frankly admitted that there was numbersubstance in it. on this view the high companyrt dismissed the appeal of the appellant and companyfirmed his sentence of death. in this appeal the principal question that was canvassed before us on behalf of the appellant was that the high court in number examining the defence evidence for itself on the simple ground that companynsel for the appellant admitted that there was numbersubstance in it companymitted an error and did number properly discharge its duty. it appears that there is substance in the submission made on behalf of the appellant. ordinarily in a criminal appeal against conviction the appellate companyrt under s. 423 of the companye of criminal procedure can dismiss the appeal if the companyrt is of the opinion that there is numbersufficient ground for interference after examining all the grounds urged before it for challenging the companyrectness of the decision given by the trial companyrt. it is number necessary for the appellate -court to examine the entire record for the purpose of arriving at an independent decision of its own whether the conviction of the appellant is fully justified. the position is however different where the appeal is by an accused who is sentenced to death so that the high companyrt dealing with the appeal has before it simultaneously with the appeal a reference for companyfirmation of the capital sentence under s. 374 of the companye of criminal procedure. on a reference for companyfirmation of sentence of death the high court is required to proceed in accordance with sections 375 and 376 of the companye of criminal procedure and the provisions of these sections make it clear that the duty of the high court in dealing with the reference is number only to see whether the order passed by the sessions judge is companyrect but to examine the case for itself and even direct a further enquiry or the taking of additional evidence if the companyrt considers it desirable in order to ascertain the guilt or the innumberence of the companyvicted person it is true that under the proviso to s. 376 numberorder of companyfirmation is to be made until the period allowed for preferring the appeal has expired or if an appeal is presented within such period until such appeal is disposed of so that if an appeal is filed by a companydemned prisoner that appeal has to be disposed of - before any order is made in the reference companyfirming the sentence of death. in disposing of such an appeal however it is necessary that the high companyrt should keep in view its duty under s. 375 of the companye of criminal procedure and companysequently the companyrt must examine the appeal record for itself. arrive at a view whether a further enquiry or taking of additional evidence is desirable or number and then companye to its own companyclusion on the entire material on record whether conviction of the companydemned prisoner is justified and the sentence of death should be companyfirmed. in jumman and others the state of punjab this companyrt explained this position in the following words- but there is a difference when a reference is made under s 374 criminal procedure companye and when disposing of an appeal under s. 423 criminal procedure companye and that is that the high companyrt has to satisfy itself as to whether a case beyond reasonable doubt has been made out against the accused persons for the infliction of the penalty of death. in fact the proceedings before the high companyrt are a reappraisal and the reassessment of the entire facts and law in order that the high companyrt should be satisfied on the materials about the guilt or innumberence of the accused persons. such being the case it is the duty of the high companyrt to companysider the proceedings in all their aspects and companye to an independent companyclusion on the materials apart from the view expressed by the sessions -judge. in so doing the high companyrt will be assisted by the opinion expressed by the sessions judge but under the provisions of the law above-mentioned it is for the high court to companye to an independent companyclusion of its own. the same principle was recognised in ram shankar singh others v.state of west bengal 2 the high companyrt had also to companysider what order should be passed on the reference under s. 374 and to decide on an appraisal of the evidence whether the order of companyviction for the offences for which the accused were convicted was justified and whether having regard to the circumstances the sentence of death was the appropriate sentence. in masalti v. state of u.p. 3 this companyrt was dealing with an appeal under article 136 of the companystitution and in that appeal on behalf of the persons who were under sentence of death a point was sought to be urged which was taken before the trial companyrt and was rejected by it but wits number repeated before the -high companyrt. this companyrt held- it may in a proper case be permissible to the appellants to ask this court to companysider a.i.r. 1957 s.c. 469. 2 1962 supp. i s.c.r. 49 at p. 59. 3 1964 8 s.c.r. 133 at p. 144. that point in an appeal under article 136 of the companystitution after aft in criminal proceedings of this character where sentences of death are imposed on the appellants it may number be appropriate to refuse to companysider relevant and material pleas of fact and law only on the ground that they were number urged before the high companyrt. if it is shown that the pleas were actually urged before the high court and had number been companysidered by it then of companyrse the party is entitled as a matter of right to obtain a decision on those pleas from this companyrt. but even otherwise numberhard and fast rule can be laid down prohibiting such pleas being raised in appeals under art. 136. in view of these principles indicated by us above and in view of the fact that in this case the high companyrt did number properly examine the defence evidence on the ground that the counsel for the appellant in that companyrt admitted that there was numbersubstance in it we permitted learned companynsel for the appellant in this appeal to take us through the entire evidence on the record given by the prosecution and the defence so as to enable us to form our own judgment about the companyrectness of the companyviction and sentence of the appellant. we however find that after examining the entire evidence we are unable to hold that any grounds are made out for interference with the companyviction. the prosecution case as already mentioned by us above is supported by the evidence of four eye-witnesses gurdial singh sarvjit singh gian kaur and malkiat singh. three of these witnesses gurdial singh sarvjit singh and gian kaur are the sons and daughter of the deceased gurdarshan singh but this circumstance in our opinion does number detract from the value to be attached to their evidence because naturally enumbergh they are interested in seeing that the real murderer of their father is companyvicted of the offence and they cannumber be expected to adopt a companyrse by which some innumberent person would be substituted for the person really guilty of the murder. numbere of these witnesses had any such enmity with the appellant as companyld induce him to give false evidence and to substitute him as the murderer in place of the person really guilty. in fact their feelings. would be strongest against the real culprit and companysequently their evidence cannumber be discarded on the mere ground of their close interest in the deceased. malkiat singh has been held both by the sessions judge and the high companyrt to be an independent witness and we find numberreason to differ from the view taken by the two companyrts. on behalf of the appellant it- was sought to be. urged that malkiat singh bore a grudge against ajit singh because ajit singh had been instrumental in the adoption of a son by malkiat singhs real uncle veer singh with the result that malkiat singh was deprived of the succession to the property of his uncle. malkiat singh denied that he had any grievance against ajit singh on such a ground. in support of the plea put forward on behalf of the appellant one defence witness niranjan singh was examined who claimed to be the son of anumberher real uncle of malkiat singh. niranjan singh came to depose that his son sadhu singh had been adopted by veer singh and this adoption took place because ajit singh had asked veer singh to take sadhu singh in adoption. niranjan singh had however to admit that in the deed of adoption the person adopted is described as mukhtiar singh and number sadhu singh. to explain this discrepancy niranjan singh came forward with the assertion that his son sadhu singh bore an alias mukhtiar singh. if sadhu singh was the real and principal name of the boy adopted by veer singh there is numberreason why that name was number mentioned in the deed of adoption and why the person adopted was described only as mukhtiar singh. there is further the circumstance that even according to niranjan singh malkiat singh witness did number try to challenge the adoption even though the adoption had taken place in april 1965 seven months before this incident. malkiat singh had stated that he had numbergrievance against ajit singh and was in fact number interested in challenging the adoption. in these circumstances we do number think that malkiat singh can be said to be an interested witness and must hold that his evidence has been rightly relied upon. the time of the murder was number only proved by the evidence of these four witnesses but is also borne out by the circumstance that the first information report was lodged at the police station three miles away at about 9.30 p.m. without any undue delay. on behalf of the appellant it was urged that the first lnformation report was in fact recorded much later and number at 9.30 p.m. the same day on the basis that the companyy of that report sent to the ilaqa magistrate was received by him at 10.30 a.m. on 8th numberember 1965. the argument was that if the report had been lodged at 9.30 p.m. on 6th numberember 1965 the companyy should have reached the magistrate the same night or early on the 7th numberember and number as late as 8th numberember. we are unable to accept this submission. the evidence of gurdial singh was perfectly clear that he reached the police station and lodged the report that very night at 9.30 p.m. and there is numberreason to disbelieve him. it appears that in this case the investigating officer sub-inspector ram saran dass was to some extent negligent. in the report lodged by gurdial singh the facts given clearly made out an offence of murder and yet the sub-inspector chose to register the case wrongly as for an offence under section 304 read with section 34 of the indian penal companye. it may be that having wrongly put down the offence as under 304 i.p.c.instead of section 102 the sub-inspector did number companysider it necessary to send the report to the ilaqa magistrate the same night and delayed sending it so that it was received at 10-30 a.m. on 8th numberember 1965 by the magistrate. it is also number clear from the evidence whether apart from the companyy of the first information report sent to the ilaqa magistrate any special report was also sent to the magistrate by the sub-inspector. in any case we do number think that this late receipt of the copy of the first information report by the magistrate can lead to the inference that gurdial singh is number right in saying that he had the report recorded the same night at 9.30 p.m. the evidence of the doctor who performed the post mortem examination and of the ballistic expert clearly establish that gurdarshan singh had died as a result of gun shot injury received by him from a gun. the gun which the appellant possessed under a licence issued to him was examined by the ballistic expert and his evidence proved that the shots which killed the deceased were fired from that very gun. in these circumstances the sessions judge and the high companyrt were right in recording the companyviction of the appellant for the murder of gurdarshan singh on the basis of this prosecution evidence. so far as the defence put forward on behalf of the appellant is companycerned the first point to be numbericed is that the plea that the shots which killed gurdarshan singh were fired by ajit singh was number taken by the appellant until his father ajit singh had already died. it seems to be clear that this plea which was put forward for the first time in the court of sessions was an afterthought which companyld be taken safely by the appellant after ajit singh had died and he could number be companyvicted for the murder. when the appellant was examined in the companyrt of the companymitting magistrate while ajit singh was alive he did number make any such statement. this is an important circumstance that militates against the plea put forward in defence. the appellant relied upon the evidence of two witnesses in support of the plea that the shots which killed gurdarshan singh were fired by ajit singh and number by the appellant. the first of these witnesses is uggar singh who stated that he was in his house situated opposite to the house of the appellant and when he came out on hearing the numberse he saw ajit singh quarelling with gurdarshan singh deceased and exchanging abuses. thereafter ajit singh fired the gun shots towards gurdarshan singh killing him instantaneously. according to him neither malkiat singh number the sons of gurdarshan singh were present at that time. even shrimati gianumberaccording to him was number there. the evidence of this witness cannumber be relied upon for several reasons. according to this witness his statement was recorded by the police at about 10 a.m. the next day i.e. the 7th numberember 1965 but l7sup.c.l.68--2 the investigating officers statement is clear that no person residing in the neighbourhood had been examined by him or had companye forward to give any statement to him. uggar singh thus made a wrong statement that he was examined by the police the next day. it also appears that he was prosecuted in a murder case in which he was acquitted and ajit singh had assisted him in that trial. the answers given by him in the cross-examination also show that in fact his house is number in front of the house of the appellant but is situated in the same line as the house of the appellant and the deceased and at some distance. he tried to get over this difficulty by stating that he has anumberher house which is opposite to the house of the appellant but it appears that that house belongs to his cousin ujagar singh and that is how the house is described in the site plan also. in all these circumstances the evidence of uggar singh cannumber be accepted. the second witness is niranjan singh whose evidence we have numbericed above and he also partially supported this part of the defence case by saying that he came rushing to the spot after the incident and found gurdarshan singh lying dead while ajit singh was standing outside his house with something which appeared to be a gun. it is clear that this is art anumberher attempt by niranian singh to help the appellant and on this point also reliance cannumber be-placed on his evidence. there remains to be companysidered the evidence given on behalf of the appellant to establish his plea of alibi. one defence witness kirpal singh was examined to prove that the accused was on deputation in the seed companyporation at phillaur and was attached to-the tehsildar phillaur and that he was number suspended until 11th numberember 1965. his evidence is of numberhelp because it is obvious that the appellant companyld be suspended only after he surrendered in connection with this charge which happened on 11th numberember 1965. the fact that he was in service on 6th numberember 1965 does number necessarily prove that he companyld number have been present at the place of occurrence. the witness on whose evidence reliance is primarily placed is bunta ram patwari. bunta ram stated that on 6th numberem- ber 1965 he had companye to the office of the companyporation at phillaur in order to companylect his pay and he also brought some files from nakodar in order to companysign those files. in that companynection. he remained in the office of the corporation throughout the day. he saw the appellant also working in the said office throughout the day. according to him at about 6.30 p.m. he and the appellant went to the house of inderjit singh patwari and spent the night at his house. it however i appears that this witness is a direct subordinate of the appellant and that is the reason why he has companye forward to support the appellants case. in this companynec- tion jagdish rai batta tehsildar in the seed companyporation was examined as a companyrt witness by the sessions judge and his evidence shows that bunta ram was one of the patwaris working as a subordinate of the appellant who was a kanumberngo in the companyporation. bunta ram had stated that on that day he had himself appeared before the tehsildar in companynection with the companysignment of the tiles and the tehsildar had given him some directions in that behalf. jagdish rai batta stated that on that day bunta ram patwari did number appear before him number did he produce any files. he went further and stated that he did number point out any defects to bunta ram patwari either orally or in writing. thus bunta ram- is proved to be an untruthful witness by the evidence of jagdish rai batta tehsildar. bunta ram in his cross- examination purported to state that the appellant was living in a part of the house of inderjit singh at phillaur. on the face of it it cannumber be companyrect because the appellant did number belong to phillaur and was number even posted there in companynection with his employment. his headquarters according to jagdish rai batta was nakodar and number phillaur. the evidence of jagdish rai batta only shows that he saw the appellant working in his office at phillaur on that day until about 5 p.m. phillaur is companynected with nako- dar by a metalled road along with which there is a bus service and village birpindwhere the murder took place is only three miles from nakodar. it is quite clear that the appellant companyld easily reach birpind well before 7.45 p.m. even if he worked at phillaur till 5 p.m. on that day.- it is also significant that the murder was companymitted with the gun belonging to the appellant. if the appellant himself had number been at birpind and had been at phillaur or nakodar the gun should have been with him. at one of these places and number at birpind. the gun companyld number therefore have been available for use by ajit singh his father in his absence. companysidering all these circumstances and the nature of the evidence we are unable to accept that there is any force in the defence plea of alibi put forward by the appellant so that the companyviction based on the prosecution evidence must be upheld. a plea was put in for reduction of sentence. ordinarily this -court in exercise of its powers under art. 1 36 of the companystitution does number interfere with a sentence awarded by a sessions judge and upheld by the high companyrt but in this case there are some special features which we cannumber ignumbere. even according to the prosecution the murder of gurdarshan singh by the appellant was number pre-meditated. the act of firing at him appears to be that of a hot-headed person who was incited to do so by his father.

test

1968_246.txt

collieries limited ors. 1985 1 s.c.c. 305 relied on. 2.1 from the official record it is clear i that there was in reality numbersuch separate business as real estate business carried on by the companypany. the companypany was borrowing money all the time and the proceeds of the sale of surplus lands and industrial galas were utilised to improve the liquidity to pay off the creditors ii all the assets including the surplus lands appurtenant to the mill were assets of the companypany held for the benefit of the textile undertaking iii at numberpoint of time was there a segregation of the assets of the companypany for form the real estate division number were there any bifurcation of the surplus lands and transfer of title to the lands iv the so called real estate division had numbercapital assets of its own v the companypany was indebted to the tune of 6.80 crores and the liabilities were being met by the sale and development of lands companystruction of industrial galas and the diversion of plot number5 from the industrial zone to the residential zone. the proceeds were all ploughed back into the textile business to pay off the debts and vi there was numberseparate account of the real estate division and the respondents have number laid any real foundations on pleadings that the real estate business was separate and distinct from the textile business. it was in reality a scheme for conversion of capital. the activity of selling the surplus lands or the industrial galas companystructed thereon had a direct nexus with or clearly related to the carrying on of the textile business. 214 a-d 218 b-c 2.2 the balance-sheets and the profit and loss accounts instead of substantiating the respondents claim that the business in real estate was separate and distinct from the textile business are rather destructive of it. 222 a-b civil appellate jurisdiction civil appeal number. 3067 3017 and 3568 of 1984. from the judgment and order dated 13th june 1984 of the bombay high companyrt in writ petition number 2714 of 1983. parasaran attorney general m.k. banerjee additional solicitor general f.s. nariman t.v.s.n. chari r. desai s. menumber naunit lal kailash vasdev mrs. vinumber arya ms. indira jaisingh ms. kamini jaiswal p.h. parekh jitendra sharma ms. mihir desai and kirti singh for the appearing parties. the judgment of the companyrt was delivered by sen j. these appeals on certificate directed against the judgment and order of the bombay high companyrt dated june 13 1983 raise a question of far-reaching public importance. by the judgment under appeal a division bench of the high court on a petition under art. 226 of the companystitution filed by messrs shree sitaram mills limited bombay for short the petitioners while upholding the companystitutional validity of the textile undertakings taking over of management act 1983 insofar as it provides by s. 3 1 of the act for the taking over by the central government of the management in the public interest of messrs shree sitaram mills a textile undertaking owned by it and specified in the first schedule to the act held that the surplus land appurtenant to the mill was number an asset in relation to the textile undertaking within the meaning of sub-s. 2 of s.3 of the act on the ground that the business of real estate carried on by the companypany was separate and distinct from the textile business and accordingly directed the central government to restore possession of the said land to the company. the issue involved must necessarily turn on the meaning of the words assets in relation to the textile undertaking appearing in sub-s. 2 of s.3 of the act. in order to appreciate the nature of the companytroversy it is necessary to state a few facts. the mill number knumbern as shree sitaram mills was established in 1875 under the management of messrs shapurji broacha mills limited on a very large tract of land located in the heart of the metropolitan city of greater bombay. the only real estate that it acquired in the late 19th century companyprised of 105008 square yards which undoubtedly was an asset of the textile undertaking although the actual mill precincts were spread over 50749 square yards. early in the 20th century it changed hands a few times and ultimately it was taken over by tantias of calcutta in 1955 as a grey unit. the companys share capital companyprised of equity shares of the value of rs. 45 lakhs and cumulative redeemable preference shares worth rs. 15 lakhs and these shares were closely held among the members of the tantia family. after the take over in 1955 the tantias apparently had undertaken a scheme of modernisation resulting in the development of the mill into a highly export-oriented unit including the addition of an updated process house involving a total outlay of rs.2 crores which was financed through loans taken from the national industrial development companyporation. during the 60s the companypanys performance had only been average incurring losses for five years and making profits for the remaining five years with the result that in the overall balance the company managed to survive without substantially adding to its reserves. during the next period between 1971 to 1980 the investment on plant and machinery was minimal at about rs. 42 lakhs and the only major scheme of modernisation that the companypany planned was under the soft loan scheme when in 1977 it made an application to the industrial development bank of india idbi since a substantial portion of its machinery was number in a state of good repairs. the companypany had number declared any dividend on its shares for several years. in the early 70s i.e. during the years 1971-72 1972- 73 and 1973-74 which were profitable years for the textile industry as a whole the companypany made profits which were attributable to its textile undertaking. due to unprecedented floods in 1974 and various other factors the financial companydition of the companypany became precarious. as is reflected from its balance-sheets the company had been making companytinuous losses at an increasing rate from the year 1974-75 onwards. even though the years 1978-79 and 1979-80 were companyparatively good for the textile industry the companypany companytinued making losses largely due to shortage of working capital and strained liquidity position. it had leased out its process house to messrs bhartiya electric steel companypany limited a sister companycern of the tantias from 1977 to provide financial support to the mill but it was number fruitful. the strained liquidity position had a vicious effect affecting the quality of raw material and stores purchases resulting in distress sales mainly because the companypany was number able to attract companypetent talent for managing its affairs. as a cumulative effect of all these factors the companypany companytinued to slide down steeply and the capacity utilisation became the first victim leading to a fall in the volume of production. as mentioned in the idbi report even if large funds were pumped at a companycessional rate the companypany would take 20 years to wipe out its liabilities. as is revealed from companypanys balance-sheets since last more than seven years before the taking over the net- worth of the companypany had been in the negative. in the year 1978-79 the networth was minus rs. 2.80 crores in 1979-80 minus rs. 3.54 crores in 1980-81 minus rs. 3.91 crores in 1981-82 minus rs.6.56 crores and in 1982-83 minus rs. 8.67 crores. it would therefore appear that the networth had number only been negative but the negative factor had been increasing at a rapid rate over the years. there was also loss in the profit loss account. the mill number only had the deficit in the past for so many years in the negative but the losses had been increasing at an alarming rate. even during 1978-79 when there was a textile boom in the companyntry the companypanys losses were to the tune of rs. 2.80 crores. the balance in the profit loss account is reflected as follows balance in the profit loss account year ended 30th of june in rs. 1975 1572746 1976 3572256 1977 17771023 1978 27268303 1979 34359540 1980 41824930 1981 45500000 1000 71000000 as a result of this the companypany resorted to borrowings far in excess of its limits the amount drawn on june 30 1983 being rs. 4.75 crores as against the drawing power of rs. 1.97 crores. the petitioners also purported to enter into transactions of the pledged goods which were already hypothecated to the companypanys bankers without disclosing the fact either to the bankers or the purported pledgees. the mill stood in need of increasing financial assistance from commercial banks and governmental and public financial institutions on companycessional rates for its resuscitation. there were accumulated losses of the order of over rs. 1.10 crores in the year ended march 31 1980 and accumulated losses to the tune of rs. 91 lakhs as on march 31 1981. the secured loans outstanding to the companypanys bankers as on march 31 1980 were of the order of rs. 2.80 crores which increased to rs. 3.64 crores by march 31 1981. the current liabilities which stood at rs. 3.08 crores by the end of march 31 1980 rose to rs. 4.70 crores at the end of march 31 1981. all this clearly shows that the financial companydition of the companypany even before this general strike was grave. the fact that the companypanys affairs were being mismanaged was evidenced by the mounting arrears of workers dues to the staggering figure of rs.77 lakhs as on october 18 1983 when the ordinance was promulgated in spite of the financial assistance by the banks and other financial institutions and debentures in an increasing manner. during the year 1981 the companypany received fresh financial assistance from idbi maharashtra state financial companyporation and other financial institutions aggregating to over rs. 47 lakhs. as already stated the annual statements of accounts for the year ended march 31 1980 and march 31 1981 were wholly unsatisfactory on account of mismanagement of its affairs with huge outstandings due to the workers and the reserves of the company had been wiped out by the accumulated losses. the mill companyld number be revamped into production and rehabilitation to subserve the interest of the general public to achieve national growth and particularly to prevent unemployment of thousands of workers without investment of large sums of money by public financial institutions for such reorganisation and rehabilitation. it is needless to stress that the textile industry in india has played an important role in the growth of national econumbery and at one time the indian textiles were in great demand in the world market. it occupies an important position in the industrial field in india both because it produces an essential companymodity the production of which makes the companyntry self-sufficient and also the export of which helps in building up its foreign exchange reserves. it is also of importance because it gives employment to a large number of persons. the textile mills in greater bombay have always occupied an important position in the textile industry in india as the textile mills represent in terms of both capacity and production the largest single concentration in the field of textile industry. in these circumstances such textile mills located in greater bombay have always been of special importance in the econumbery and the government of india has always been companyscious of necessity of preserving such mills and of assisting them by granting wherever necessary assistance to the industry including loans through public financial institutions on concessional terms to prevent their having to close down. the special position occupied by the textile mills in greater bombay became further accentuated by reason of the general strike called on january 18 1982. as a result of the said prolonged textile strike which affected all the textile mills in bombay all the mills suffered financially. even prior to the companymencement of the said textile strike the financial position of the various textile mills in bombay was number uniformly good. whereas there were several mills which were in sound or excellent financial companydition there were other textile mills whose financial companydition even prior to the strike was number satisfactory. the main reason why certain mills were number in a satisfactory financial companydition was lack of proper management. there had been in the case of several mills a consistent record of profits building up and augmentation of reserves but in the case of several mills including inter alia shree sitaram mills the financial position was markedly difficult. these mills were number in a sound financial companydition as the others. as the overall econumberic factors applicable to all textile mills in greater bombay were broadly and generally companyparable the weaker position of the mills in question was attributable to mismanagement. after the textile stirke had been called off it became imperative to companysider the overall econumberic situation of all the textile mills in greater bombay and also to companysider as to what was the future outlook of such mills particularly of those which were number in a position to recommence work due to financial companystraints. faced with the problem of rendering financial assistance and rehabilitation to the textile industry the reserve bank of india carried out a survey of the sick textile mills which had a disasterous effect on the financial viability which companyld only be attributed to mismanagement and a situation further worsened by the general strike. the question before the government of india was to evolve a scheme to put the textile industry on its feet. on december 3 1981 the central government appointed an investigation companymittee under s.15 a i of the industries development regulation act 1951 to find out the causes for the fall in the volume of production of the companypanys textile undertaking. the investigation companymittee submitted its report dated february 11 1983 a companyy of which was also forwarded to the respondents. it recommended that the idbi and the nationalized banks should finance and put through expeditiously the rehabilitation programme proposed by the company by keeping full companytrol over the management. in the meantime the state government of maharashtra by its order dated may 25 1982 declared the companypanys textile undertaking to be a relief undertaking entitled to protection under the bombay relief undertakings act 1958. at a meeting called by the reserve bank on october 29 1982 at which were present the deputy governumber reserve bank of india joint secretary ministry of finance banking chief secretary government of maharashtra industries secretary government of maharashtra executive director and senior representatives of idbi and senior representatives of concerned banks textile mills affected by the strike were classified into three categories on a general companysensus category i units which were viable before the strike and companytinued to be as such. category ii units which were viable before the strike but whose viability might have been marginally affected by it. category iii units which were bad sick and whose position had further deteriorated because of the strike. however subsequently in numberember 1982 the respondent textile undertaking was placed in category iii viz. units which were bad sick and whose position had further deteriorated. the government of india accepted this categorisation. it was realized that numbere of the 13 mills falling under category iii companyld be expected to survive on a sound basis without financial assistance from the government government controlled institutions and nationalised banks. numbere of the said mills were in a position to restore their financial condition on a companymercial basis without such special assistance. the amount required for rehabilitation of the aforesaid mills was estimated to aggregate to rs. 194.48 crores to be companytributed by public financial institutions such as the idbi the nationalized banks and 10 promoters share etc. it was also expected that the disposal of surplus lands appurtenant to some of these mills such as the respondents textile undertaking shree sitaram mills would largely help in raising the necessary working capital. as decided at the aforesaid meeting called by the reserve bank the idbi was to take a detailed viability report in respect of mills falling under category iii which it did and submitted its report sometime in march 1983 in respect of each mill in that category. so far as the respondents were companycerned as regards its management the idbi adversely companymented on the management of the mill by the tantias as a result of which the bankers of the companypany had lost companyfidence in them and indicated that numberloans could be advanced unless tantias were agreeable to dissociating themselves from the mismanagement. it also referred to the inquiry companymittee appointed by the government of india to look into the affairs of the companypany which had attributed the companytinuous losses incurred by the company to gross mismanagement. after setting out a long term scheme of financing of the textile mill by public financial institutions the report observed even assuming that the companypany will be able to utilize 75 of its cash accruals to liquidate its term liabilities it will take over 20 years for it to repay its term companymitments including the funded loan aggregating to rs. 7.59 lakhs. it accordingly observed that the mill companyld number be considered viable but added however the companypany has surplus lands admeasuring 6625 square metres within the factory area which is proposed to be disposed off and for which it had already obtained the approval of government of maharashtra under urban land ceiling act. the companypany expects to realize about rs. 2.05 crores from the sale of the land. the companypany also has plans to companystruct residential buildings thereon for sale to financial institutions banks etc. in which case it expects net realization from such sales at rs. 3.05 crores towards the end of 1984-85. with this realisable asset the idbi expected that it would be possible to make the respondents textile undertaking viable over a period of seven years. it was therefore clearly understood that the respondents textile undertaking could be made viable only on the sale of surplus lands. on september 20 1983 the government of india ministry of companymerce department of textiles companystituted a task force to look into the affairs of the category iii strike affected mills. the task force under the terms of reference had to collect the necessary data and place its report before the econumberic affairs companymittee of the union cabinet to enable the government to take a decision as to which of the mills falling under category iii should be nationalised. the task force submitted its report on october 13 1983 i.e. a few days prior to the promulgation of the ordinance by which it classified the mills falling in category iii into four groups. the respondents textile undertaking was placed in group ii viz. mills which were likely to be made viable with the sale of surplus lands with a rider added that a change in the management should also be brought about. it estimated that the total liabilities of the mills falling in category iii were of the order of rs. 194.48 crores. it became therefore necessary to companysider whether such mills should be rehabilitated by injecting public funds on number-commercial and companycessional terms. the government of india was of the opinion that the management of such mills had been defective as had there been numbermismanagement the mills would number have found themselves in the companydition in which they were even before the general strike. in the circumstances the government of india had to companysider whether it would be in the public interest that such public finances should be made available to such mills particularly when there were serious allegations of mismangement frittering away of assets of the textile undertakings diversion of funds etc. it had also to companysider whether in the public interest it was desirable to give financial assistance on companycessional terms to provide undertakings the self-sufficiency rather than to take over such undertakings and manage them itself as a step towards nationalisation. the government of india decided as a matter of policy that it was desirable to achieve the process of nationalisation in two stages - by first taking over the management of the textile undertakings and thereafter enact suitable legislation to nationalize the same. as the taking over of the management was with a view to implement the decision to nationalize the said textile mills there was numberquestion of holding an inquiry either under the industries development and regulation act 1951 or under the sick textile undertakings taking over of management act 1972. prior to numberember 1982 there were several viability surveys made by different authorities namely 1 ahmedabad textile industries research association 2 textile commissioners office 3 s.r. batlibhoy companypany and an independent survey by the idbi itself. in 1976-77 at the instance of the idbi the ahmedabad textile industries research association carried on a technumberconumberic viability survey and made its report in 1978 which at the request of the united companymercial bank was again updated in march 1979. in its reports the said research association stated that considering all financial aspects and the favourable enviornment of the companypanys textile undertaking it was a technumbereconumberically viable unit and that finance should be provided by way of working capital to the tune of rs. 2.40 crores forthwith by the bank. in or about 1979 the textile commissioners office ministry of finance government of india also carried out a full scale survey of the textile undertaking. its report dated september 25 1979 recommended the banks to review the situation favourably and that an additional working capital estimated at around rs. 50 lakhs should be provided. after the aforesaid survey report of the research association and the textile companymissioners office the idbi asked the companypany to obtain a further technumbereconumberic viability survey from the reputed chartered accountants messrs s.r. batlibhoy company. the firm of chartered accountants accordingly undertook a survey and while indicating that the management should be strenghthened in certain areas recommended that necessary finance should be provided to the companypany as its textile undertaking was a technumbereconumberically viable unit. in 1981 the idbi made an independent assessment and found that the petitioners textile undertaking was a viable unit. it was a predominantly export-oriented unit and the modernisation scheme put foward by the companypany companyld ensure gainful employment to 3000 workers. at that point of time the companypany had outstanding export orders to the tune of rs. 4.5 crores but was number able to execute the same as per schedule on account of lack of working capital. it found that the companypanys export performance was to the extent of 75 of its total sales and there was possibility of stepping up exports after companypletion of the scheme of modernisation. all these surveys were directed in ascertaining whether the companypanys textile undertaking was a technumbereconumberically viable unit or number and whether it was desirable to provide the companypany with working capital. on october 18 1983 the president of india promulgated the textile undertakings taking over of management ordinance 1983 whereby the management of 13 textile undertakings specified in the first schedule to the ordinance vested in the central government. the textile undertakings of the respondents being one of the aforesaid 13 undertaking also vests in the central government. the ordinance was replaced by an act of parliament being textile undertakings taking over of management act 1983 which by sub-s. 2 of s.1 was brought into force with retrospective effect from october 18 1983 the date of promulgation of the ordinance. the purpose and object of the act as reflected in the long title was to provide for the taking over in the public interest of the management of the textile undertakings of the companypanies specified in the first schedule pending nationalisation of such undertakings and for matters companynected therewith or incidental thereto. the preamble to the act brings out the necessity for such legislation whereas by reason of mismanagement of the affairs of the textile undertakings specified in the first schedule their financial companydition became wholly unsatisfactory even before the companymencement in january 1982 of the textile strike in bombay and their financial companydition has thereafter further deteriorated and whereas certain public financial institutions have advanced large sums of money to the companypanies owning the said undertakings with a view to making the said undertakings viable and whereas acquisition by the central government of the said undertakings is necessary to enable it to invest such large sums of money and whereas pending the acquisition of the said undertakings it is expedient in the public interest to take over the management of the said undertakings be it enacted by parliament in the thirtyfourth year of the republic of india. the legislation was clearly in furtherance of the directive principles of state policy under art.39 b and c . as the preamble reads the financial companydition of the textile undertakings specified in the first schedule had become wholly unsatisfactory even before the companymencement of the textile strike in january 1982 in bombay by reason of mismanagement of the affairs of such undertakings and their financial companydition thereafter further deteriorated. many public financial institutions had advanced large sums of money to the textile companypanies owning the said undertakings with a view to making the said undertakings viable. further investment of very large sums of money was necessary for reorganising and rehabilitating the said undertakings and thereby to protect the interests of the workmen employed therein and to augment the production and distribution at fair prices of different varieties of cloth and yarn so as to subserve the interests of the general public. parliament was satisfied that acquisition by the central government of the said undertakings was therefore necessary to enable it to invest large sums of money and that pending acquisition of the said undertakings it was expedient in the public interest to take over the said management of the undertakings. the statement of objects and reasons accompanying the bill reads as follows the textile undertakings taking over of management ordinance 1983 was promulgated by the president on 18th october 1983 to vest in the central government the management of thirteen textile undertakings pending their nationalisation. by reason of mismanagement of the affairs of these undertakings their financial condition which became wholly unsatisfactory even before the companymencement in january 1982 of the textile strike in bombay further deteriorated thereafter. certain public financial institutions had with a view to making the said undertakings viable advanced large sums of money to the companies owning these undertakings. further investment of very large sums of money found to be necessary for reorganising and rehabilitating the said undertakings and thereby to protect the interests of the workmen employed therein and to augment the production and distribution at fair prices of different varieties of cloth and yarn so as to subserve the interests of the general public. government companysidered the nationalisation of the said undertakings to be necessary to enable it to invest such large sums of money and safeguard other interests. once the basic decision of nationalisation was taken a genuine apprehension arose in the governments mind that unless the management of the companycerned undertakings was taken over on immediate basis there might be large scale frittering away of assets which would be detrimental to the public interest. it thus became urgently necessary for government to take over management of the undertakings in the public interest. as parliament was number in session at that time and every days delay companyld have had serious repercussions the aforementioned ordinance was promulgated. on numberember 11 1983 the respondents filed a petition under art. 226 of the companystitution challenging the constitutional validity of sub-s. 1 of s.3 of the act as violative of arts. 14 19 1 g and 300a. the respondents contended that apart from the companypanys textile undertaking and the business of manufacture of yarn and textiles the company as from 1970 also carried on the business of real estate. they alleged that this was permissible according to the memorandum and articles of association. it is averred that there are several relevant facts which companyclusively show that the real estate division was a separate and independent business being carried on by the companypany. facts alleged to show that the activity of real estate was wholly unconnected with the textile undertaking were these. since the companypanys textile undertaking was established way back in 1875 it was number scientifically established on the basis of principles of good and econumberic management. various departments of the companypanys textile undertaking such as spinning weaving and storage godowns were companystructed and laid out at great distances from each other. this resulted in requiring a vast area of land and putting up the various departments at different points. this had its great disadvantages since the transportation companyt increased there was lot of wastage and handling supervision and companytrol of manufacturing activities became inconvenient time-consuming and cumbersome. the original establishment was brought about in the late 18th and early 19th century when wages were low and the textile industry was number modernized. there was total lack of scientific or proper planning. after the present management had taken over in 1955 the tantias implemented a modernization scheme by bringing the departments together which promoted companyvenience in handling and reducing transportation companyts wastage and pilferage. as a result of these measures a large area of land and built up space became available to the companypany for the purpose of utilizing the same in its real estate business. companysequently in the year 1970 the companypany applied to the bombay municipal corporation for sub-division of its lands in order to enable it to utilize the same for the purpose of its real estate business. by its letter dated april 16 1971 the municipal corporation sanctioned sub-division on certain terms and conditions principal amongst them being 1 the companypany should hand over plot number 1 admeasuring about 5000 square yards to the bombay municipal companyporation for companystruction of school and playground against numberinal advance the balance value to be fixed by the special land acquisition officer. 2 plots number. 2 and 6 admeasuring about 4000 square yards were to be reserved for recreational amenities and open space free of companyt. 3 plot number 3 a triangular plot at the top admeasuring 103 square yards was to be set apart by the companypany for companystruction of b.e.s.t. sub- station. 4 the companypany had to companystruct and hand over an approach road 1500 to 1600 feet long and 45 feet wide admeasuring about 7600 square yards free of companyt as per the requirement of the development plan finalized by the bombay municipal companyporation. in companysideration of the aforesaid the bombay municipal companyporation agreed to grant floor space index i.e. floor area ratio otherwise knumbern as far and building rights on the appurtenant plots. as a result of the aforesaid sub-division the following plots became available to the companypany for development plot number 5 admeasuring 8740 square yards. plot number 7 admeasuring 7122 square yards. being industrial estate already companystructed and sold plot number 8 admeasuring 3000 square yards. plot number 12 admeasuring 3443 square yards being industrial estate companystructed and sold in the year 1980-81 apart from the said plots being available for development the companypany had in its possession various old buildings and godowns which were already companystructed but which were number useful in the textile industry on account of the fact that it had modernised its textile undertaking. all these buildings were tenanted and the rent recovered from the same was duly credited to the companypanys balance-sheet. these also became available to the companypany for disposal. all these plots were shown demarcated in the plan exh.k and annexed to the writ petition as order of the municipal companymissioner granting permission for sub-division along with a plan delineating the different plots. in 1981 plot number 6 admeasuring 2761 square yards which was kept reserved as recreation ground was released by the minicipal companyporation in exchange for plot number 8 admeasuring 2960 square yards. the respondents further aver that they applied to the industries companymissioner for numberobjection certificate for constructing industrial estates on plots number. 7 and 12. the industries companymissioner by letter dated january 20 1972 issued the requisite n.o.c. for companystruction of industrial estates or galas as industrial units for small scale industries on plot number 7 admeasuring 7122 square yards subject to municipal sanction on companydition that 25 space should be reserved for small scale industrial units which were to be transferred from number-conforming zones on the terms fixed by the municipal companymissioner for greater bombay. the respondents also by their letter dated july 19 1973 applied to the state government for permission to construct such galas on plots number. 5 and 8. on the same day the directorate of industries granted the n.o.c. permitting the respondents to companystruct an industrial estate on plot number 12 admeasuring 3443 square yards companyprising of 110 sheds on similar companydition. the municipal companyporation sanctioned the building plans on march 16 1973 and the industries commissioner by his letter dated july 19 1973 granted a o.c. for companystruction of industrial estate on plot number 12. on even date the respondents architects also made an application to the director of industries for grant of o.c. for the proposed industrial estate on plot number 5. on january 19 1974 a special resolution was passed at an extraordinary general meeting of the companypany in terms of s. 149 2a of the companypanies act 1956 to the effect resolved that pursuant to s. 149 2a of the companies act companysent be and is hereby accorded to and authority companyferred upon the board of directors of the companypany to carry out the provisions of cl.12 of the memorandum of association. the resolution then reproduced sub-cl. 12 of cl.3 of the memorandum of association. to resume the narrative the companystruction of an industrial estate on plot number 7 admeasuring 7122 square yards companysisting of 166 galas was companymenced by the respondents sometime in the year 1974 and the same was completed in later years. incidentally they companystructed 90 galas in building a and 12 galas in building b and secured the help of the developers for the rest. all the galas were sold by the respondents on ownership basis to various small scale industries. similarly the respondents companymenced construction of an industrial estate on plot number 12 admeasuring 3443 square yards in the year 1973 but due to the imposing of certain restrictions placed by the state government on companystruction of industrial estates in greater bombay the activity of companystruction of industrial estates on the said plot came to a standstill pending relaxation for restarting of such companystruction. in 1979-80 the government allowed such companystruction. thereafter the respondents restarted companystruction of the industrial estate on plot number 12 admeasuring 3443 square yards during the year 1980 and the industrial units built thereon were all companypleted and sold by 1981. the respondents alleged that the funds required for the above activities were self-generated by the real estate division from advance sale of industrial units. they further alleged that a road admeasuring about 1500/1600 feet long and 45 feet wide had been companystructed in 1981 by the real estate division as per the term imposed. the respondents also alleged that through companytinuous and persistent efforts the real estate division companyld obtain permission from the state government for companyversion of plot number5 from industrial to residential use by modifying the g ward development plan i.e. from general industrial zone to residential zone on september 19 1981. later exemption under the urban land ceiling act 1976 was obtained from the competent authority on october 15 1982 and formal permission was granted under s.22 of the act for development of plot number 5 for residential purposes. in october 1982 the respondents architects submitted building plans to the municipal companyporation for companystruction of residential buildings and thereafter they started negotiations for sale of residential buildings to various banks and public sector undertakings in anticipation of the sanction. upon these facts the respondents filed a petition under art. 226 of the companystitution in the high companyrt challenging the companystitutional validity of sub-s. 1 of s.3 of the textile undertakings taking over of management act 1983 as violative of arts. 14 19 1 g and 300a of the constitution. they also companytended in the alternative that the real estate division cannumber be said to be forming part of the textile undertaking and therefore the taking over of the real estate division was illegal null and void. by the judgment under appeal the high companyrt upheld the constitutional validity of the act insofar as the taking over of the management of the respondents textile undertaking by the central government under sub-s. 1 of s.3 of the act was companycerned but held that the real estate division was number an asset in relation to the textile undertaking within the meaning of sub-s. 2 of s.3 of the act. the crucial question that falls for determination is whether the surplus land appurtenant to the mill was number an asset in relation to the textile undertaking within the meaning of sub-s. 2 of s.3 of the textile undertakings taking over of management act 1983. that depends on whether the so-called business of real estate carried on by the companypany was separate and distinct from the textile business. the high companyrt has held that along with the vesting of the management of the mill in the central government under sub-s. 1 of s.3 of the act all the assets and properties etc. of the companypany only relating to the mill vested in them and that the companypany having by a resolution passed at the extraordinary general meeting of shareholders on january 19 1974 authorized the directors to carry on business of developing companypanys surplus lands and the companys balancesheets from 1974 onwards having shown the said industrial estate as current assets of the companypany and from february 1976 as stock-in-trade of the companypany the said lands were being treated as distincts assets of the company. it observed that the existence of the companypanys real estate division was also recognised by the letters of the investigation companymittee appointed by the central government under s.15 a i of the industries development and regulation act 1951 informing the petitioners companypany of the appointment of such a committee by asking the companypany to furnish particulars as regards the real estate division. further the report of the said investigation companymittee made in february 1982 also dealt with the said real estate division separately. it has referred to the fact that in 1981 the central excise authorities had approved for licensing the demarcation of the mills area being plot number 9 part as shown in the plan annexure k and that the numberification dated september 19 1981 by the government of maharashtra authorized the change of user of plot number5 from industrial zone to residential zone. the high companyrt further observed that it was number disputed that the petitioners companypany under its memorandum of association was entitled to carry on amongst others the business of land development builders dealings in real estate etc. from the above facts stated the high companyrt has come to the companyclusion that the respondents companypany in its own right since 1973-74 had established a real estate division for doing business in companystruction and sale of buildings on its land other than the land occupied by the mill which was distinctly demarcated. therefore the business carried on by the respondents companypany under the real estate division was distinct from and unrelated to the companypanys business of running the textile mill. it repelled the companytention of the central government that merely because the respondents companypany as a companydition of getting loans from financial institutions to rehabilitate the mill and by making of viable financially it would number make the said real estate division an asset of the companypany so as to vest the same in the central government under sub- s. 2 of s.3 of the act along with the vesting in them of the mills management under sub-s. 1 thereof. the issue involved must necessarily trun on the meaning of the words assets in relation to the textile undertaking appearing in sub-s. 2 of s.3 of the act. sub-ss. 1 and 2 of s.3 of the act which have a material bearing on these appeals provide as follows on and from the appointed day the management of all the textile undertakings shall vest in the central government. the textile undertaking shall be deemed to include all assets rights leaseholds powers authorities and privileges of the textile companypany in relation to the said textile undertaking and all property movable and immovable including lands buildings workshops projects stores spares instruments machinery equipment automobiles and other vehicles and goods under production or in transit cash balances reserve fund investments and booklets and all other rights and interests in or arising out of such property as were immediately before the appointed day in the ownership possession power of control of the textile companypany whether within or outside india and all books of account registers and all other documents of what ever nature relating thereof. in the act textile undertaking as defined in s.2 d reads 2 d textile undertaking or the textile undertaking means an undertaking specified in the second companyumn of the first schedule. the term textile companypany is also defined in s.2 e as 2 e textile companypany means a companypany being a company as defined in the companypanies act 1956 specified in the third companyumn of the first schedule as owning the undertaking specified in the companyresponding entry in the second companyumn of that schedule. various companytentions have been raised in these appeals but on the view that we take it is number necessary for us to deal with them all. we were also referred to a large number of decisions on the companytentions so advanced. but we do number think that they are of any real assistance since these appeals must turn on the companystruction of the words assets in relation to the textile undertaking appearing in sub-s. 2 of s.3 of the act which must take their companyour from the context in which they are used. in support of these appeals shri milon banerjee learned additional solicitor-general appearing on behalf of the union of india and the national textile companyporation was followed by ms. indira jaising learned companynsel appearing on behalf of the maharashtra girni kamgar union representing the workers of the textile mill. the principal companytention advanced by the learned companynsel was that the words assets in relation to the textile undertaking used in sub-s. 2 of s.3 of the act have a wide legal companynumberation and they must be companystrued to mean forming part of and number as belonging to the textile under taking. in essence the companytention is that the surplus lands were integrally companynected with the textile business which companyld number be carried on and made viable except by the sale of the surplus lands. the submission is that the high companyrt was in error in holding that the companypany was engaged in the business of property development. the argument is that the activity of development and disposal of surplus lands or of companystruction and sale of industrial galas was for purposes of raising finance for the textile business and therefore was ancillary or incidental to the main object with which the companypany was formed namely of carrying on textile business. reliance was placed on the application of the main objects rule of construction namely that where a memorandum of association expresses the objects of the companypany in a series of paragraphs and one paragraph or the first two or three paragraphs embody the main object of the companypany all other paragraphs are treated as merely ancillary to the main object and as limited or companytrolled thereby. we were referred to the various survey reports of the idbi ahmedabad textile industries research association investigation companymittee textile companymissioners office and task force with a view to impress upon us that the viability of the companypany depended largely on the proper utilization of the surplus lands. it was companytended that the legislature in enacting the law clearly had the intention of taking over the surplus lands of the companypany and the high companyrt should have interpreted sub-s. 2 of s. 3 of the act in companysonance with the legislative intent. the companytention to the companytrary put forth by shri nariman appearing for the respondents companypany is that the words assets in relation to the textile undertaking in sub-s. 2 of s.3 of the act must be read in companyjuction with sub-s. 1 thereof and the other provisions of the act and therefore must be interpreted to mean forming part of i.e. as belonging to the textile undertaking. it is submitted that what vests in the central government under sub-s. 1 of s. 3 of the act is the management of the textile undertaking. function of sub-s. 2 thereof is only clarificatory. the learned counsel referred to different provisions of the act to stress that the act makes a clear distinction between the textile undertaking as defined in s. 2 d and the textile company as defined in s. 2 e . according to him a mere perusal of the schedule read with the definition clause clearly shows that what has been taken over under sub-s. 1 of s. 3 of the act is only the management of the textile undertaking and everything relating thereto and numberhing else. the learned companynsel laid particular stress on the special resolution passed at the extraordinary general meeting of the shareholders on january 19 1974 whereby the company accorded its approval and companyferred authority upon the board of directors of the companypany to carry out the provisions of sub-cl. 12 of cl. 3 of the memorandum of association. where was the necessity he asks of the special resolution as companytemplated by s. 149 2a of the companies act unless the shareholders intended and gave consent to the starting of a new business by the companypany in real estate ? therefore he companytends that the passing of a special resolution and filing of the same with the registrar were necessary companycomitants inasmuch as the business in real estate which the companypany intended to carry on was a new business and it was number germane i.e. was unrelated to the existing business. he then companytends that sub-cl. 12 of cl. 3 read with sub-cl. 37 on its true companystruction excluded the main objects rule of companystruction so that each of the objects in the clause was to be read in isolation and number as ancillary or limited or companytrolled by first few paragraphs and that on that companystruction sub-cl. 12 was wide enumbergh to include the real estate division i.e. the project the company had undertaken from 1974 onwards of development and sale of surplus lands by companystruction of industrial galas. he tried to draw sustenance from the idbis study of viability report of the task force and that of the investigation companymittee and companytends that each of them was constituted by a body of experts charged with the duty of making an investigation into the affairs of the companypany. he submits that all these high-powered bodies accepted the existence of a separate real estate division of the companypany. in substance the submission is that the business of development of property and the sale of plots with industrial galas was an adventure in the nature of trade which was wholly independent of the textile business and merely because the companypany was raising finance by selling industrial galas companystructed on the lands did number necessarily imply that the lands formed part of the textile undertaking. we find it difficult to sustain the judgment of the high companyrt that the so-called real estate division of the company was a separate or distinct business or that the surplus lands did number form part of the assets in relation to the textile undertaking within the meaning of sub-s. 2 of s. 3 of the act. there was in reality numbersuch business much less any real estate business. the respondents companypany was borrowing money all the time and the proceeds of the sale of surplus lands and industrial galas were utilised to improve the liquidity to pay off the creditors. when the mill was established way back in 1875 it was located over an area of about 21 acres admeasuring 105008 square yards most of which was free-hold and of this the manufacturing and storage areas pertaining to textile activities occupied 50749 square yards i.e. nearly half of the total area. as a result of a revised lay-out of the production and storage facilities the respondents rendered some of the buildings and plots surplus and the textile mill was located on 40456 square yards. the fundamental question is whether the land is an asset in relation to the textile undertaking which must necessarily turn on the interpretation of sub-s. 2 of s. 3 of the act. the test is whether it was held for the benefit of and utilised for the textile mill. it is quite clear that there was as such numbersuch separate business carried on by the companypany in real estate. all the assets including the surplus lands appurtenant to the mill were assets of the company held for the benefit of the textile undertaking. at numberpoint of time was there a segregation of the assets of the companypany to form the real estate division. the surplus land which was an asset belonging to the companypanys textile mill was never bifurcated to form a real estate division. there was numbertransfer of title to the lands and the so- called real estate division had numbercapital assets of its own. the companypany was indebted to the tune of rs. 6.80 crores and the liabilities were being met by sale and development of lands companystruction of industrial galas and the diversion of plot number5 from the industrial zone to the residential zone. the proceeds were all ploughed back into the textile business to pay off the debts. there was numberseparate account of the real estate division and there is really numberhing on record to show that any separate business in real estate was ever started. the respondents have laid numberreal foundation on the pleadings to sustain the finding reached by the high companyrt that the business of real estate was separate and distinct from the textile business. there is numberclarity in the pleadings as to the precise point of time when such a business was ever started. the question is when did the real estate division come into existence ? the petitioners aver in para 2 that w.e.f. the year 1973-74 the companypany also established what is described as a real estate division. it is averred in the said division the 1st petitioner carried on and carries on the business of developing various plots putting up buildings thereon and selling the same or portions thereof. the said activity is totally segregated from the textile undertaking and is a separate and independent business of petitioner numberl and it has numberhing to do with the textile undertaking. while in paragraph 27 it is averred apart from the 1st petitioners textile undertaking and the business of manufacturing yarn and textile the 1st petitioner from 1970 also carried on the business of real estate. the balance-sheets of the companypany throughout furnish data for the textile undertaking as a whole and the fact shows that the so called real estate business was number separate from the textile undertaking. even the schedule of fixed assets does number indicate that the alleged real estate division companyprising of the surplus lands apart from 40456 square yards which number form part of the mill precincts had been separated. there is numberhing to show that the said lands were number appurtenant to the textile undertaking or their integrality was broken. me balance-sheets do number disclose that the companypany had shown real estate division or the industrial galas separately in the schedule of fixed assets. this falsifies the respondents plea that the real estate business was separate and distinct from the textile undertaking. it is quite clear that the business of the companypany under the real estate division was a business belonging or related to the textile undertaking. this is borne out by the fact that before the taking over of the management by the central government under sub-s. 1 of s. 3 of the act the respondents companypany as a companydition of getting loans from financial institutions to rehabilitate the textile mill mortgaged the lands and also for making it financially viable brought in additional funds by sale of the excess lands. sales of the surplus lands or of industrial galas companystructed thereon did number companystitute an adventure in the nature of trade but were in substance and essence utilisation of the capital assets of the companypany for the purpose of running the textile undertaking. ms. indira jaising appearing for the maharashtra girni kamgar union has filed before us a detailed and tabular chart which is rather instructive which clearly demonstrates that the real estate division was part and parcel of the textile undertaking. it gives particulars showing utilisation of the lands belonging to the companypany for purposes of running the textile business demarcating the plots as shown in the plan annexure k to the writ petition. prior to the year 1971 there was numbersub-division of the lands and as such all the assets of the companypany were held in relation to the textile business. user of the plots as per sub-division permitted by the bombay municipal corporation was from 1971 onwards. there were four reserved plots namely plot numberl admeasuring 4764 square yards reserved by the bombay municipal companyporation for construction of a school. plot number2 admeasuring 1870 square yards reserved by the companyporation as a recreation ground i.e. to be kept green. plot number 3 a small triangular plot admeasuring 105 square yards reserved by the companyporation for the b.e.s.t. sub-station and plot number6 admeasuring 2761 square yards reserved by the companyporation to be kept open for recreation till 1981. in 1981 it was released in exchange for plot number8 admeasuring 2960 square yards. of the remaining plots on plot number4 admeasuring 9765 square yards there were certain old godowns of the textile mill and they were sold by the respondents to a charitable trust of the tantias in 1974-75 for setting off loans taken from the trust for the textile business. plot number 5 admeasuring 8740 square yards lying vacant there was numberdevelopment of this plot. the respondents-company created an equitable mortgage in favour of the united companymercial bank to raise finance for the textile business. plot number 6 admeasuring 2761 square yards was released by the companyporation and transferred from the industrial zone to the residential zone with permission to companystruct multi-storeyed buildings companytaining residential flats. plot number 7 admeasuring 7122 square yards in 1974 the companypany built some industrial galas on a portion and sold them on ownership basis. in 1980 building rights were sold to builders as the companypany did number have finances to build on its own. sale proceeds thereof were used for improving financial liquidity of the companypany and to reduce the liabilities relating to the textile business. we have already referred to plot number 8 which was lying vacant till 1981 when the municipal companyporation reserved it in exchange for plot number6. equitable companyporation was also created by the company in favour of the united companymercial bank with respect to this plot. then companyes plot number9 admeasuring 50749 square yards. the textile mill and its buildings are number located over a portion thereof admeasuring 40456 square yards. on the remaining part old buildings existed which were sold in 1974-75 to a sister companycern of the tantias. sale proceeds were used for setting off loans taken from the tantias trust and other financial institutions for running the textile business. of the remaining plots two of them namely plot number 10 admeasuring 1745 square yards and plot number 11 admeasuring 1590 square yards were sold by the companypany without raising any companystruction to a tantia companycern. proceeds of these sales were utilized for improving the financial liquidity of the companypany and to reduce the liabilities relating to the textile business. plot number 12 admeasuring 3443 square yards in 1980 a basement was built for industrial galas. thereafter the companypany due to paucity of funds sold building rights to a builder. sale proceeds were used for 1 paying outstanding bonus to the workmen of the textile undertaking and 2 repayment of bank loans buying of companyton under the directions of the banks. lastly plot number 13 admeasuring 1873 square yards in 1968-69 this plot had already been sold by the companypany without any construction. sale proceeds were used for improving the financial liquidity of the companypany and reducing the liabilities in relation to the textile undertaking. the tabular chart gives a graphic picture of the transactions effected by the companypany in respect of the surplus lands by building industrial galas thereon or otherwise. they bring out the existence of inter-connection inter-lacing inter- dependence and unity between the transactions of the respondents companypany relating to the surplus lands and the structures built thereon as well as the textile business carried on by it. sales of surplus lands in such circumstances we are inclined to think are numbermore than a realisation of capital or companyversion of one form of it into anumberher. it was in reality a scheme for companyversion of capital. the activity of selling the surplus lands or the industrial galas companystructed thereon had a direct nexus with or clearly related to the carrying on of the textile business. falsity of the respondents claim that the business of the real estate division was separate and distinct from the textile business and therefore the surplus lands which constituted the real estate division were number an asset in relation to the textile undertaking within the meaning of sub-s. 2 of s.3 of the act is clearly borne out from the balance-sheets of the companypany. before dealing with the balance sheets we think it proper to set out the relevant portion of the numbere on real estate division submitted by the petitioners which reads the textile unit was one of the businesses of petitioner number1 real estate being anumberher business. in order to strangthen the business of textile unit it was necessary to obtain loans from financial institutions and banks. the petitioner number1 created security on plot number. 5 8 and 12 assets of the companypany number related to the working of the textile unit in favour of the companys bankers. merely because the petitioner number 1 created or agreed to create security on some of its assets number pertaining to textile undertaking for strengthening the textile undertaking it does number follow that these assets are the assets of the companypany in relation to the textile undertaking of which charge can be taken by the central government or the custodian. shri l. tantia and his family members had pledged their shares to the extent of 13000 shares in favour of the companypanys bankers as a companylateral security. it very often happens that the companypany carries on several businesses and the same are knumbern as separate divisions like rayon division paper division cement division land development division etc. merely because the petitioner number 1 utilised or offers to utilise the assets of anumberher division as security for loans etc. for strengthening the textile unit the identity of the real estate division or its separate assets is number destroyed. factual material in respet of the equitable mortgage created in this companytext is set out in paragraph 17 b of the affidavit in rejoinder page 299-300 . all the plots pertaining to the real estate division were never mortgaged. even plot number 12 which was mortgaged along with plot number. 5 and 8 in 1978 for obtaining a temporary loan of rs. 12 lakhs for payment of bonus was released by the banks in favour of petitioner number 1 for development and companystruction and sale of industrial estate duly companystructed. when the companystructon of industrial estate on plot number 12 was companypleted a sum of rs. 87 lakhs pertaining thereto was deposited by petitioner number 1 in a special account with the united companymercial bank and utilised for various purposes. sale of plots or of galas used to be with the sanction of the banks and the sale proceeds from the sale of galas etc. were deposited with the banks and fairly dealt with. it is respectfully submitted that the supplementary survey report annexure ii b as well as paragraph 5 of the investigation companymittee report supports the case of the petitioner number 1 to the effect that real estate division has functioned for more than a decade. merely because funds generated from the sale of galas were utilised for strengthening the textile unit which also belong to the same companypany it cannumber be inferred that the real estate division did number function as a separate unit after segregation of different plots and particularly the mill itself factory area . emphasis supplied in this numbere the assertion that the textile unit was one of the businesses of the companypany a business in real estate being anumberher proceeds on the hypothesis that a company may carry on several businesses. upon this basis the respondents seek to assert that merely because the respondents companypany secured loans by way of equitable mortgage in respect of some of the plots for financing the textile business it does number follow that the surplus lands were the assets of the companypany in relation to the textile undertaking. we have already dealt with different transactions entered into by the companypany with respect to the surplus lands in the preceding paragraph and it is clear enumbergh they are number separable from but were integrally connected with the running of the textile undertaking. it is undisputed that the predominant object with which the company was formed was to carry on business in textiles alone and the surplus lands were undoubtedly an asset of the company held in relation to the textile business. furthermor e the respondents case that the textile business of real estate division was separate and distinct from the textile business stands belied by the balance-sheets of the companypany. the respondents case is that the real estate division was started during the year 1973-74 when monies were received from various buyers of industrial galas against advance sales of such galas built on plot number7. in the relevant accounting year the companypany made profits of rs. 39.25 lakhs which were solely attributable to the textile undertaking. the prior mortgage in favour of the national industrial development companyporation was redeemed and the outstanding balance of rs. 2375 lakhs paid off during the year. in the directors report in that year it is stated that a sum of rs. 353423 had been received from the various buyers against the sale of the multi-storeyed galas in the industrial estate that the companypany was bringing up and that this would improve the companypanys financial liquidity and also help to reduce its liabilities. in the schedule of fixed assets attached to and forming part of the balance-sheet for the year under the heading current sets the following entry appears current assets i ii iii industrial galas under companystruction at companyt rs. 869776. in the numberes of account a sum of rs. 862675 is shown as a receipt towards advance sale of galas under construction in the industrial estate being companystructed by the companypany within the mill precincts. similar are entries in the balance-sheets for the relevant years being the financial years 1974-75 to 1979-80. in the balance-sheets for all these years the companypany appears to have opened a separate account under the heading industrial galas under construction account and shown them under the heading current assets. in the numberes of account it is stated that the profit on the sale of galas would be accounted for after completion of the industrial estate and handing over all the galas to the proposed society. numberuseful purpose would be served in referring to the entries appearing in the several years in question except to touch upon one or two entries. in the directors report for the year ended march 31 1975 there is a receipt shown of rs. 49 lakhs on capital account towards sale of surplus lands together with the structures built thereon i.e. sale of the tenanted buildings in excess of the requirement of the textile undertaking. in the balance-sheet for the year 1975-76 the amount of rs. 3076849 spent on companystruction of the industrial galas had been debited to industrial galas under companystruction account and shown as stock-in-trade of the companypany. in the accounting year the companypany created an equitable mortgage in favour of the united companymercial bank of plot number 9 admeasuring 40456 square yards on which the textile mill is situate by deposit of title-deeds by way of companylateral security and this fact was intimated to the registrar of companies along with a plan demarcating the boundaries of the textile undertaking. similar entries appear in the subsequent years. it goes on like this from year to year. numberhing really turns on the aforesaid entries in the balance-sheets. such entries in the books of account of a business companycern following the mercantile system are usually made for accounting purposes. the balance-sheets and the profit and loss accounts instead of substantiating the respondents claim that the business in real estate was separate and distinct from the textile business are rather destructive of it. the opening of a separate account under the heading industrial galas under companystruction account is of little significance. numbere of the balance-sheets of the company number the profit and loss accounts make any mention of the so-called real estate division. even the schedules relating to the fixed assets in the balance-sheets of the company make numberdistinction between land belonging to the textile undertaking and land belonging to the real estate division. they clearly demonstrate that the companypany had at numbertime purchased any land for dealing in real estate. it was merely disposing of its surplus lands belonging to the textile undertaking with the avowed object of ploughing back money into the textile undertaking. the balance-sheets for the years 1973-74 onwards do number show that at any point of time there was any segregation or bifurcation of the assets of the companypany or of the textile undertaking with a view to form the real estate division number was there any transference of title to the lands. the so-called real estate division had numbercapital assets of its own at all. the company in its balance-sheets and profit and loss accounts gave data for the textile undertaking as a whole and as already stated even the schedule of fixed assets does number indicate the alleged real estate division. the proceeds of sale of surplus lands or industrial galas companystructed thereon or of loans incurred by mortgaging the plots were utilized for improving the financial liquidity of the company and reducing the liabilities relating to the textile business. from the balance-sheets and profit and loss accounts the companyclusion is irresistible that the surplus lands belonging to the companypany were held in relation to the textile undertaking within the meaning of sub-s. 2 of s.3 of the act. we find it difficult to sustain the companyclusion or reasoning of the high companyrt. the high companyrt failed to appreciate that it was dealing with an act of parliament providing for taking over in public interest of management of the textile mills specified in the second companyumn of the first schedule pending nationalisation of such textile undertakings and for matters companynected therewith and incidental thereto. the legislation was clearly in furtherance of the directive principles of state policy in art. 39 b and c of the companystitution. in interpreting such a piece of legislation the companyrts cannumber adopt a doctrinaire or pedantic approach. it is a well-knumbern rule of construction that in dealing with such a beneficent piece of legislation the companyrts ought to adopt a companystruction which would subserve and carry out the purpose and object of the act rather than defeat it. the high companyrt companypletely ignumbered the fact that all the assets of the companypany were held in relation to the textile business. the companypany acquired all its real estate in the 19th century when it was formed for carrying on textile business and admittedly numbernew assets had been acquired by it thereafter. this is borne out by the fact that the disposal of surplus lands was with the sole and avowed intention of ploughing back the money to improve the financial liquidity of the companypany and to reduce the liabilities relating to the textile business. in the absence of the surplus lands numberloans companyld have been raised for the purpose of running the textile undertaking and as such they were and are an integral part of the textile undertaking. we regret to find that the high companyrt in companying to the conclusion that it did has also overlooked the reports of the several high-powered companymittees companystituted by the central government from time to time which stressed that the potential viability of the textile undertaking depended to a large extent on the proper utilization of the lands belonging to the textile undertaking and also the fact that the companypany had in the past been misutilising its real estate. in particular the investigation companymittees report highlighted that the disposal of the surplus lands had been misused by the companypany and that it was to the detriment of the companypanys textile undertaking implying thereby that the proper utilisation of the assets would make the textile undertaking viable. the viability study of the idbi clearly brings out that the textile undertaking companyld only be made viable by the disposal of the surplus lands. further the report of the task force submitted to the econumberic affairs committee of the union cabinet classified the companypanys textile undertaking under group ii i.e. mills which will be viable with the sale of sruplus lands. the legislature in enacting the law for the taking over of the management of the textile undertakings therefore clearly had the intention of taking over the surplus lands of the companypany. in our opinion the high companyrt ought to have interpreted sub-s. 2 of s.3 of the act in the companytext of sub-s. 1 thereof and the other provisions of the act in consonance with the intention of the legislature. it was the intention of the legislature to take over all the assets belonging to the companypany held in relation to the textile undertaking. me numbere attached to the report of the task force includes the total lands belonging to the respondents company for the purpose of determining the value of the assets of the companypany and does number exclude the real estate division. even for determining the total companypensation to be paid on nationalisation the task force takes into account the total surplus lands of the companypany and does number exclude any land belonging to the so-called real estate division. the viability study of the idbi also heavily relied on the surplus lands held by the respondents companypany. in the premises the high companyrt has manifestly erred in holding that the said real estate division was separate and distinct from the textile undertaking. surplus lands of the textile mills taken over under sub-s. l of s.3 of the act are but a vital physical resource capable of generating and sustaining econumberic growth of the textile mills. there can be numberdoubt that the legislative intent and object of the impugned act was to secure the socialisation of such surplus lands with a view to sustain the sick textile undertakings so that they companyld be properly utilised by the government for social good i.e. in resuscitating the dying textile under takings. hence a paradoxical situation should have been avoided by adding a narrow and pedantic companystruction of a provision like sub-s. 2 of s.3 of the act which provides for the companysequences that ensue upon the taking over in public interest of the management of a textile undertaking under sub-s. l thereof as a step towards nationalisation of such undertakings which was clearly against the national interest. in dealing with similar legislation this companyrt has always adopted a broad and liberal approach. in new satgram engineering works anr. v. union of india ors. 1981 1 s.c.r. 406 in repelling the companytention that the engineering unit together with the shethia bhawan and all its assets built on a plot adjacent to the new satgram companyl mines in 1964 the technical directors bungalow built on a plot outside the a mining area somewhere in 1957-58 and anumberher building on the same plot of land namely the guest house used for the residence of the officers and staff of the mines were number assets falling within the definition of mine defined in s.2 h vi vii and xi of the companyl mines nationalisation act 1973 the companyrt had occasion to observe it will be seen that there is a difference in the language used in s.2 h vii and xi . sub-clause uses the words in or adjacent to a mine and used substantially for the purposes of the mine or a number of mines under the same management in relation to workshops. the use of the word and makes both the companyditions conjunctive. sub-clause xi uses the words if solely used for the location of the management sale or liaison offices or for the residence officers and staff of the mine in relation to lands and buildings. the differences in language between the two expressions used substantially and solely used is obvious. it is therefore possible to companytend that lands and buildings appurtenant to a companyl mine if number exclusively used for purposes of the companyliery business would number companye within the definition of mine in s.2 h i.e. it would depend upon the nature of user and that the crucial date is the date of vesting. we are inclined to think that the distinction though apparent may number be real in the facts and circumstances of a particular case. a workshop or a building companystructed initially for the purpose of a companyl mine cannumber by its being diverted to other purposes cease to belong to the mine. what is of the essence is whether the workshop or the building originally formed a part and parcel of the companyl mine. the subsequent user may number in our opinion be very material. to illustrate a workshop which has companye into existence for and because of the mine but which also companyes to be used for purposes other than of the mine does number on that account alone cease to be a workshop used substantially for the purposes of the mine. again a building which is used to accommodate some other companycern because of the availability of space does number on that account alone cease to be solely used for locating the management offices of the mine. emphasis supplied it was then observed by reason of sub-s. 1 of s.3 of the act the right title and interest of the owners in relation to the companyl mines specified in the schedule stand transferred to and vest absolutely in the central government free from all encumbrances. parliament instead of providing that the word mine shall have the meaning assigned to it in the mines act 1952 has given an enlarged definition of mine in s.2 h so that number merely the companyliery but everything companynected with the mining industry should vest in the central government i.e. number only that part of the industry which companysisted of raising winning and getting companyl but also that part of it which consisted in the sale of companyl and its supply to customers both of which are a part of an integrated activity. mis is manifested by sub- clauses i to xii of clause h of s.2 i.e. all the assets belonging to a mine vest in the central government. emphasis supplied again in union of india v. united companyliories limited ors. 1985 1 s.c.c. 305 a similar question arose. me question was whether or number a staff car belonging to the united colliery limited the owners in relation to a mine and being the staff car of the technical advisor of the numberth chirimiri companylieries was an asset belonging to the mine within the meaning of s.2 h xii of the nationalisation act. me high companyrt held that the question as to whether the staff car should be treated as belonging to the owners of a mine as part of the mine itself raised disputed questions of fact relating to its user which would have to be determined on the basis of evidence purporting to rely upon the aforesaid decision of this companyrt in new satgram engineering works case and therefore relegated the parties to have the matter settled by a a civil suit. allowing the appeal this companyrt held that the decision in new satgram engineering works case was clearly distinguishable. it then went on to say that parliament by an enlarged definition of mine in s.2 h of the act had indicated the nature of the properties that vest and the question whether a particular asset is taken within the sweep of s.2 h depends on whether it answers the description given therein and added the staff car in question was undoubtedly a fixed asset of the numberth chirimiri companylieries and it belonged to respondent 1 the united companylieries ltd. the owners in relation to the said mine. being the staff car of the technical advisor it was a fixed asset belonging to the mine. it is rightly number suggested that the staff car was number a fixed asset. fixed assets in general companyprise those assets which are held for the purpose of conducting a business in companytradistinction to those assets which the proprietor holds for the purpose of companyverting into cash and they include real estate building machinery etc. words and phrases permanent edition vol. 17 p. 161 blacks law dictionary 5th edition p. 573 strouds judicial dictionary 4th edn. vol.l p.20l. the staff car therefore fell within the definition of mine as companytained in section 2 h xii and vested in the central government under sub-section 1 of section 3 of the companyl mines nationalisation act 1973. merely because the technical advisor was putting the staff car to his personal use or for multifarious activities of the thaper group of industries would number alter the true legal position since the subsequent user for a different purpose was number really germane. that precisely is the question here. we have numberdoubt in our mind that the words assets in relation to the textile undertaking used in sub-s. 2 of s.3 of the act have a very wide companynumberation. function of sub-s. 2 of s.3 of the act is to amplify and define as to what is taken within the sweep of the term textile undertaking as defined in s.2 d which says that the expression textile undertaking shall be deemed to include all assets rights leaseholds powers authorities and privileges of the textile companypany in relation to the said textile undertaking. it does number stop at that but goes on to say that this would also include lands buildings workshops projects stores spares instruments machinery equipment automobiles and other vehicles goods under production and in transit cash balances reserve funds investments and booklets and all other rights and interests in and arising out of such property as were before the appointed day in the ownership possession power or companytrol of the textile companypany whether within or outside india. it further includes all books of accounts registers and all other documents of whatever nature relating thereto. the companyclusion is therefore inescapable that all the assets of the companypany held in relation to the textile undertaking including the surplus lands appurtenant thereto vest in the central government by reason of sub-s. 2 of s.3 of the act. upon that view it is number necessary for us to deal with the other companytentions namely the applicability of the main objects rule of companystruction or as to the purport and effect of the special resolution passed by the companypany as contemplated by s. 149 2a of the companypanies act 1956 or the tests laid down under the income tax acts of 1922 and 1961 for determining whether a certain receipt realized by an assessee was merely a realization or change of capital assets or was profit realized from an adventure in the nature of trade and was therefore business as defined in s.2 4 of the income tax act 1922 and s.2 13 of the income tax act 1961 or whether two lines of business companystitute the same business under s.24 2 of the income tax act 1922 or were separate business. we do number think that any useful purpose would be served in referring to the large number of decisions turning upon these questions number to decisions arising under the industrial disputes act 1947 on whether the several under takings carried on by the same company are separate or number which necessarily turns on the question whether they are distinct or inter-dependent. here we are companycerned with the meaning of the words assets in relation to the textile under taking appearing in sub-s. 2 of s.3 of the act which must be companystrued in a generic sense looking to the companytext in which they are used. the companyrt has to interpret these words keeping in view that they occur in a legislation which provides for a the taking over of management of a textile undertaking under sub-s. l thereof pending nationalisation of such textile undertaking and matters incidental or companynected therewith.

test

1986_378.txt

civil appellate jurisdiction civil appeal number 537 of 1960. appeal from the judgment and order dated december 23 1959 of the mysore high companyrt in writ petition number 229 of 1955. s. shukla and e. udayarathnam for the appellant. n. sanyal additional solicitor-general of india r. gopalakrishnan and p. d. menumber for the respondents number. 1 and 2. gopalakrishnan for respondent number 3 1962. april 18. the judgment of the companyrt was delivered by gajendragadkar j.-this appeal arises from a writ petition filed by the appellant raghutilaka tirtha sripadangalavaru swamiji in the mysore high companyrt challenging the validity of s. 6 2 of the mysore tenancy act 1952 xiii of 1952 hereafter called the act and the numberification issued under the said section on march 31 1952. the appellants case as set out in his writ petition before the high companyrt was that the impugned section as well as the numberification issued under it infringed his fundamental rights guaranteed under arts. 14 19 1 f 26 31 and 31a of the companystitution. this companytention has been rejected by the high companyrt and it has been hold that the section and the numberification under challenge are valid and companystitutional. the appellant then applied for a certificate from the high court both under art. 132 and art. 133 of the companystitution. the high companyrt granted him a certificate under art. 133 but refused to certify the case under art. 132. there after the appellant applied to this companyrt for liberty to raise a question about the interpretation of the constitution and permission has been accorded to the appellant accordingly. that is how the present appeal has come to this companyrt. the appellant owns 6 acres and 30 ghuntas of garden land in village mulbagilu in taluka thirthahalli in the district of shimoga. respondent number 3 ramappa gowda is his tenant in respect of this land. a registered lease deed was executed in favour of respondent number 3 by the appellant on march 11 1943 under this document respondent number 3 undertook to pay 82-1/2 maunds of areca in addition to rs. 17/12-in cash as rent per year. in 1955 respondent number 3 filed an application before respondent number 2 the tehsildar of thirthahalli under section 12 of the act and claimed that the standard rent payable by him to the appellant should be fixed tenancy case 85 of 1955-56 . meanwhile respondent number 1 the government of mysore had in exercise of the powers companyferred on it by s. 6 of the act issued a numberification number r9. 10720/- l. s. 73-54.2 on march 28/29 1955. this numberification purported to fix the standard rent for lands of the category to which the appellants land belongs at one third of the produce. feeling aggrieved by this numberification the appellant filed the present writ petition in the high companyrt on december 16 1955 his case was that s. 6 2 as well as the numberification issued under it were ultra vires invalid and inumbererative. before dealing with the companytentions raised before us by mr. shukla on behalf of the appellant it would be necessary to consider very briefly the scheme of the act. the act has been passed by the mysore legislature because it was thought necessary to regulate the law which governs the relations of landlords and tenants of agricultural lands and to regulate and impose restrictions on the transfer of agricultural lands dwelling houses sites and lands appurtenant thereto belonging to or occupied by agriculturists in the state of mysore except bellary district and to make provisions for certain other purposes appearing in the act. that is the recital companytained in the preamble to the act. it would thus be seen that the primary object of the act is to afford much needed relief to the agricultural tenants by regulating their relations with their landlords and in that respect the act bears a very close resemblance to the provisions of the bombay tenancy and agricultural lands act lxvii of 1948. indeed the material provisions of the act with which we are companycerned are substantially similar. chapter i of the act deals with the preliminary topic of defining the relevant terms used in the act. chapter ii contains general provisions regarding tenancies. section 4 defines persons who are deemed to be tenants. section 5 provides that numbertenancy would be for less than five years. section 6 deals with the maximum rent payable by the tenants. section 8 provides for the calculation of rent payable in kind in the manner indicated by cls. i and ii and prohibits the landlord from recovering or receiving rent calculated in any other manner. under a. 9 receipt of rent in terms of service or labour is prohibited. section 11 abolishes all cases and s. 10 enables the tenants to claim a refund of rent which has been recovered in companytravention of the provisions of the act. section 12 then deals with enquiries with regard to reasonable rent. sub-section 3 of s. 12 lays down five factors which have to be borne in mind by the authority dealing with an application for the fixation of reasonable rent. section 13 is a companyollary of s. 12 and authorises the reduction of rent after reasonable rent has been determined under s. 12. section 14 deals with suspensions or remission of rent. section 15 provides for termination of tenancy. under s. 18 a statutory bar is created against the eviction of a tenant from a dwelling house and under s. 19 the tenant has the first option of purchasing the site on which he has built a dwelling house. similarly under s. 22 the tenant is given an option of purchasing the land leased out to him. section 24 deals with some cases where relief can be granted against termination of tenancy and s. 25 with relief against termination of tenancy for number-payment of rent. section 30 provides for the procedure to recover rent and s. 31 protects the tenants rights under any other law. chapter iii deals with the procedure and jurisdiction of amildar and provides for appeals against the decisions of the amildar. chapter iv deals with offences and prescribes penalties for them and chapter v companytains miscelaneous provisions. that in its broad outlines is the nature of the provisions made by the act in order to give relief to the agricultural tenants. section 6 with which we are directly companycerned in the present appeal reads thus- 6. 1 numberwithstanding any agreement usage decree or order of a companyrt or any law the maximum rent payable in respect of any period after the date of companying into force of this act by a tenant for the lease of any land shall number exceed one-half of the crop or crops raised on such land or its value as determined in the prescribed manner provided that where the tenant does number cultivate the land the rent payable shall be the reasonable rent to be fixed by the amildar. the government may by numberification in the mysore gazette fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as they think fit. as we have already indicated the provisions of the two sub- clauses of a. 6 are substantially similar to the provisions of s. 6 1 and 2 of the companyresponding bombay act. indeed it would be companyrect to say that act with which we are companycerned has been modelled on the pattern of the bombay act and has adopted most of its important provisions. the validity of s. 6 of the bombay act was challenged before this companyrt in vasantalmaganbhai sanjanwala v. the state of bombay 1 and it has been held that the said section is valid. the reasons given by this companyrt in upholding the validity of is. 6 of the bombay act apply with equal force in support of the validity of s. 6 of the mysore act and so the point raised by the appellant in challenging the validity of the impugned section is really companyered by the earlier decision of this companyrt. mr. shukla however companytends that the preamble to the act differs from the preamble of the bombay act inasmuch as the latter preamble refers to the fact that that act was passed inter alia for the purpose of improving the econumberic and social companyditions of peasants and ensuring the full and efficient use of land for agriculture and so companysiderations of social justice on which the validity of the companyresponding provision of the bombay act was sought to be sustained cannumber be invoked in dealing with the present appeal. we are number impressed by this argument. it is true that the preamble to the act merely says that the act was passed because it was though necessary to regulate the law which governs the relations of landlords and tenants of agricultural lands and it does number refer to the requirement of social justice or does number specifically mention the object of ensuring the full and efficient 1 1961 1 s.c.r. 341. use of land for agriculture. but in dealing with a law which has been passed for the purpose of effecting an agrarian reform it would be pedantic to ignumbere the essential basis of its material provisions merely on the ground that the companycept of social justice on which the said provisions are based has number been expressly stated to be one of the objects of the act in the preamble. we have already examined briefly the broad scheme of the act and it is obvious that the important provisions of the act are intended to improve the econumberic and social companyditions of the agricultural tenants and so the policy of social justice can be safely said to be writ large on the face of the act. therefore we do number think that the argument based upon the fact that the preamble does number refer to social justice distinguishes s. 6 of the act from the companyresponding section of the bombay act. then it is urged that unlike the mysore act the bombay act has distinguished between irrigated land and number-irrigated land and has provided by s. 6 1 that the maximum rent payable in the case of irrigated land shall number exceed one- forth and in the case of other lands shall number exceed one- third of the crop of such land or its value as determined in the prescribed manner. it is true that s. 6 1 of the act makes numbersuch distinction between irrigated and number- irrigated lands. but that in our opinion is number a matter of essential importance. like s. 6 1 of the bombay act s. 6 1 of the act also intends to provide for a maximum ceiling beyond which agricultural rent will number be allowed to soar and so far as the fixation of a maximum ceiling of rent is companycerned it is number essential that a distinction must necessarily be made between. irrigated lands and number- irrigated lands. it must be borne in mind that what the section does is to prescribe the maximum and number to provide for a minimum in prescribing a maximum it may be open to the legislature to provide for a maximum which would be common to all lands whether irrigated or number that is why we are number inclined to attach any importance to the point that in the absence of classification of land while prescribing a maximum s. 6 1 suffers from any infirmity. then it is argued that the bombay act while prescribing a maximum has taken the precaution of also prescribing a minimum and the absence of the latter provision makes a material difference. this argument is clearly misconceived. it is true that s. 8 of the bombay act which had been inserted by the bombay legislature in 1956 did provide for the maximum and the minimum rent but as the decision of this companyrt in the case of sanjanwala 1 shows in upholding the validity of the impugned provision of the bombay act no reliance was placed upon the fixation of the minimum rent. indeed the minimum rent was fixed subsequent to the decision of the high companyrt which was under appeal before this companyrt in that case and the fact that a minimum had been prescribed subsequently has been only incidentally mentioned in the judgment. therefore the absence of a provision fixing the minimum rent does number introduce any infirmity in the impugned provision. we are therefore satisfied that the case of the impugned section is substantially similar to the case of s. 6 of the bombay act with which this companyrt was concerned in the case of sanjanwala 1 and the challenge to the validity of section in the present appeal must therefore be held to be companyered by the said decision. that takes us to the question as to whether the impugned numberification is invalid. this numberification has been issued in exercise of the powers companyferred on the state government by s. 6 2 and it provides that the rate of maximum rent payable by the tenants of lands situated in the areas specified in schedule i and schedule if to the numberification shall be one-third and one-fourth respectively of the crop or crops raised on such lands with effect from the year commencing on april 1 1955. schedule i deals with maidan areas in which the maximum rent or rents shall be one-third of the crop or crops and schedule if deals with malanad areas in which the maximum rate of rent shall be one-fourth of the crop or crops raised. it appears that the classification of lands between maidan an malanad lands is well knumbern in mysore. maidan lands are lands on the plains whereas malanad are lands on hilly tracts. the distinction between the two categories of lands takes into account the different companyditions of rain fall the different nature of the cultivation the difference in the living companyditions and the availability of labour and the difference in the quantity and the quality of the produce. it is true that the numberification does number prescribe the lower rate of the maximum rent area by area in the sense of district by district but it purports to prescribe the said maximum by classifying the land in the whole of the state in the two well-knumbern categories of maidan and malanad lands. it is urged by mr. shukla that the impugned numberification is invalid because it is inconsistent with the provisions of s. 6 1 . the argument is that s. 6 1 lays down a general rule and s. 6 2 provides for an exception to the said general rule. on that assumption it is companytended that an exception cannumber be allowed to swallow up the general rule and that is precisely what the numberification purports to do. this argument is based on the decision of the house of lords in macbeth v. ashley it would be numbericed that this argument raises the question about the companystruction of the two sub- clauses of s.6. before addressing ourselves to that question 1 1874 l.r. 2 sc. app. 352. however we may refer to the decision of the house of lords on which the argument is based. it appears that ii oclock at night was the hour appointed for closing public-houres in scotland although in special cases and for well companysidered reasons a deviation was allowed with reference to any particular locality really requiring it. the magistrates of rothesay had ordered for closing at 10 instead of 11 and the effect of the order was that it embraced every public-house in the burgh. the house of lords held that the magistrates order .was ultra vires. the statutory provision with which the house of lords was concerned was companytained in the act of parliament 25 and 26 vict. c. 35. as a result of these provisions 11 oclock at night was appointed to be the hour for closing public houses. there was however a proviso which said inter alia that in any particular locality requiring other hours for opening and closing inns hotels and public houses it shall be lawful for such justices and magistrates respectively to insert in the schedule such other hours number being earlier than six or later than eight oclock in the morning for opening or earlier than nine oclock or later than eleven oclock in the evening for closing the same as they shall think fit. it is in pursuance of the authority companyferred on them by the said proviso that the magistrates of rothesay passed an order embracing every public-house in the burge by which a deviation from the statutorily fixed hour was effected. in dealing with the validity of the order issued by the magistrates lord chancellor lord cairns expressed his opinion that if the exception is to swallow up the rule it ceases of companyrse to be an exception at all and that which might fairly have been an exercise of discretion becomes no exercise of the kind of discretion mentioned in the act of parliament. it was for this reason that the order issued by the magistrates was declared to be ultra vires. it was companyceded that the magistrates had a discretion but the lord chancellor observed that the words companyferring discretion expressly bear with reference to a particular locality and number with the whole burgh. what should be true about the whole burgh had been treated as a matter reserved for and determined by the companysideration of the imperial parliament. the lord chancellor did number express any opinion on the-question as to whether the discretion vested in the magistrates can be exercised by them more than once but without deciding that point he held that the order of the magistrates really amounted to evading an act of parliament. in substance the magistrates had once for all attempted with regard to all the public-houses in their district to change the rule laid down by the act of parliament. lord chelmsford who companycurred with the opinion expressed by the lord chancellor rested his companyclusion on the ground that it was impossible to say that the limits which the magistrates had defined companyld be called a particular locality within burgh and so it appeared that what the magistrates had done was something very like an attempt to evade the act of parliament. according to lord selborne the participle requiring is companynected with the substantive locality and therefore it must be a requirement arising out of the particular circumstances of the place. that is why lord selborne thought that the magistrates must in exercise of an honest and bona fide judgment be of opinion that the particular locality which they ex opt from the ordinary rule is one which from its own special circumstances requires that difference to be made. it would thus be seen that though the general basis of the decision as it has been expressed by lord cairne appears to be that the exception cannumber swallow up the rule one of the reasons which ultimately influenced the decision was that the discretion had to be exercised bona fide and after due deliberation in respect of a particular locality and that the manner in which the order was issued indicated that the requirements of the particular localities had number been duly examined by the magistrates. it is significant that though lord cairns posed the question as to whether the discretion in question can be exercised more than once he did number choose to answer it but the trend of the opinions expressed by the law lords during the companyrse of their speeches may seem to suggest that the discretion cannumber be exercised more than once and in any case it must be exercised by special reference to the particular locality as indicated by the proviso. if an order is made in respect of the whole of the burgh it cannumber be said that it has been passed after exercising due discretion in respect of the requirements of each particular locality. with respect if the discretion is given to the magistrates to provide for a departure from the rule prescribed by the general provision by reference to particular localities it is number easy to see why the said discretion cannumber be exercised more than once. indeed situations may arise when the magistrates may have to consider the matter from time to time in respect of different localities and if it appears to the magistrates considering the cases of different localities that in regard to each one of them a departure from the general rule should be made it is number easy to follow why the proviso does number justify different orders being passed by the magistrates in respect of different but particular localities. on the other hand if the main provision is companystrued to mean that the time prescribed by it was to apply generally only with certain exceptions companytemplated by the proviso that would be a different matter. however it is number necessary for us to pursue this point further and to express a definite opinion on the general proposition that an exception cannumber swallow the general rule because as we will presently show this rule cannumber be applied to the provisions of s. 6 at all. in this companynection we may however point out that both in max- a well and in craies the decision in macbeths case 1 appears to have been treated as an authority for the proposition that an order like the one passed by the magistrates in that case amounted to an evasion of the parliamentary statute because it was number in honest and bona fide exercise of the discretion vested in them. maxwell on interpretation of statutes 11th edn. p. 121 and craies on statute law 5th edn. p. 75. but assuming that the proposition for which mr. shukla contends on the authority of the decision in macbeths case 1 is sound does it apply to s. 6 at all and the answer to this question will depend upon the companystruction of the provisions companytained in the two sub-clauses of s. 6. it would be numbericed that s. 6 1 declares a maximum beyond which numberlandlord can recover rent from his tenant. in other words as soon as the act came into force a ceiling was fixed beyond which the landlord cannumber recover rent from his tenant even though it may be justified by agreement usage decree or order of a companyrt or any other law the provisions of this sub-section apply individually and severally to all agricultural leases and govern the relations of individual landlords and tenants in respect of payment of rent by the latter to the former. the fixation of the maximum by sub-s. 1 is really number intended to lay down a general rule as to what a landlord should recover from his tenant and it is in that sense alone that its relation to the provisions of sub-s. 2 must be judged. in that companynection we may point out that there is one proviso to 1 1874 l. r. 2 s.c app 352. cultivate the land and it lays down that in their case the rent shall be reasonable rent to be fixed by the amildar. sub-section 2 is so worded that in terms it cannumber be said to be a proviso to sub-s. 1 add in substance it is number such a proviso number is it an exception to sub-s. 1 . having prescribed the maximum beyond which agricultural rent cannumber go under a. 6 1 the legislature has premitted the government to fix a lower rate of the maximum rent in respect of lands situated in particular areas. the government has also been authorised to fix the payment of rent on any other suitable basis as it thinks fit. in other words the authority companyferred on the government is either to fix a lower rate or to fix any other basis on which the rent companyld be fixed. the provision is an independent provision and so the two sub-sections must be read as different independent though companyrdinate provisions of the statute. it would we think be erroneous to treat sub-s. 2 as a proviso or exception to sub-s. 1 . whereas sub.a. 1 deals with and applies to all leases individually and prescribes a ceiling in that behalf sub-s. 2 is intend to prescribe a maximum by reference to different areas in the state. the object of both the provisions is numberdoubt simi- lar but it is number the same and the relation between them cannumber legitimately be treated as the relation between the general rule and the proviso or exception to it. the argument that by issuing the numberification the government has purported to amend a. 6 1 is in our opinion number well- founded. as we have already seen a. 6 1 is intended to apply to all the agricultural leases until a numberification is issued under a. 6 2 in respect of the areas where the leased lands may be situated. it is number suggested that under s. 6 2 it is necessary that the government must fix the lower rates by reference to individual lands and so there can be numberdoubt that even on the appellants argument it would be companypetent to the government to fix lower rents say districtwise. if instead of prescribing the lower rates districtwise after classifying the lands into two categories which are well recognised the government prescribed the rates by reference to the said categories of lands throughout the state we do number see how the said numberification can be said to be inconsistent with s. 6 2 or with s. 6 1 either. the scheme of s. 6 does number seem to postulate that after the numberifications are issued under s. 6 2 some area must inevitably be left to be companyered by s. 6 1 . such an assumption would be inconsistent with the object underlying the said provision itself. what s. 6 1 has done is to fix a general ceiling apart from the areas and without companysidering the special factors appertaining to them. having thus fixed a general ceiling the legislature realised that the ceiling may have to be changed from area to area and so power was companyferred on the government to fix the ceiling at a lower rate the government having examined the matter came to the companyclusion that the more equitable and reasonable companyrse to adopt would be to divide the agricultural lands into two well-knumbern categories and fix the ceiling by reference to them. number in the very nature of things the legislature must have anticipated that the exercise of the power under a. 6 2 might companyer all the areas in the state and that may mean that the general ceiling prescribed by s. 6 1 may number apply to any land which is companyered by the numberification.

test

1962_295.txt

civil appellate jurisdiction civil appeal number 491 of 1993. from the judgment and order dated 5.10.90 of the madras high court in o.s.a number 271 of 1989. k. venugopal and p.p. tripathi for the appellant. muralidhar and kailash vasudev for the respondents. the judgment of the companyrt was delivered by sawant j. special leave granted. by a decree in c.s. number 363 of 1912 schemes for administration of two trust estates were sanctioned. one trust estate companyprised premises number 246 r.k. mutt road mylapore madras belonging to one poonambalam pillai and the other trust estate companyprised the adjoining premises number 247 belonging to his wife nagai visalakshi ammal. we are concerned in this appeal with the premises bearing number 246 belonging to the trust estate of poonambalam pillai. these premises were being used as a marriage hall kalyanamandapam. it appears that in both the said trusts hereditary trustees were appointed. it is number clear from the judgments of the companyrts below as to when the official trustee in place of or in addition to the hereditary trustees came on the scene. however that is number relevant for the decision of the issue involved in the present appeal. the predecessor of the present appellant official trustee had made an application to the high companyrt being application number 2043 of 1988 for permission to incur an expenditure of rs. 6 lakhs for converting the existing tiled-roof of the marriage hall into rcc-roof and for providing other facilities therein. in the application the permission to incur other items of expenditure in the sums of rs. 4750 rs. 9620 and rs. 3161.70 for providing kadappa slab flooring in the kitchen erecting a bore-well and for the purchase of vessels respectively was also sought. the report which was filed along with the application stated that the marriage hall would fetch a higher income if it was modernised by converting the existing tiled-roof into rcc-roof and was provided with the other facilities. the report further gave an estimate of rs. 6 lakhs prepared by the assistant engineer attached to the office of the official trustee in respect of the said modernisation plan. along with the report the estimate and the plan of companystruction were also filed. from the report it was seen that out of the total plinth area of 3822 s.f. only 2145 s.f. were sought to be covered with rcc-roof the companyrt by its order dated 3.5.1988 granted the application and accorded permission to incur all the expenditure mentioned therein. it appears that after the said sanction was given one kanakraj filed an application in the high companyrt for a direction to the official trustee to give a lease of the marriage hall to him on certain terms. that application was dismissed by the companyrt. while dismissing the application the companyrt directed the official trustee to get the blue print and the approval of the companycerned authorities and to commence the work of modernisation without any delay as ordered earlier on 3.5.1988. pursuant to the direction the then official trustee sent a companymunication dated 1.12.1988 to six architects requesting them to give their quotations for preparing the plan estimate and design for companyversion of the tiled-roof into rcc-roof and for providing the other provisions as sanctioned by the companyrt. of the six architects only three responded. m s c.r. narayana rao architects and engineers by their letter of 9.12.1988 merely quoted the fees for their professional services without inspecting the premises. m s madan associates by their letter of 30.12.1988 after stating that they had inspected the site gave particulars of the services to be rendered as well as of their fees for the same. the third architect mr. c.h. gopinatha rao by his companymunication on 7.12.1988 stated that he had inspected the property on 6.12.1988 and that it was worth demolishing the structure and companystructing a new building as per the development control rules of the madras metropolitan authority. the present appellant took charge of the trust estate as the official trustee on 5.1.89 and on 12.1.1989 wrote a letter to one mohammed ibrahim sait architect informing him that it was proposed to companyvert the existing tiled-roof of the marriage hall into rcc-roof and requested him to inspect the premises and submit his report as to whether the existing building companyld withstand such conversion or whether it had to be demolished and reconstructed. the letter also stated that in the event of the need for demolition and reconstruction he should quote his fees for the plan estimate and design for the construction of the new building after inspection and within rs. 6 lakhs. the architect shri sait by his letter of 2.2.1989 replied which reply was received on 3.2.19891 that he had inspected the premises and that numbermatter however much improvement was carried out in the existing building the net result would be neither appreciable number would it yield maximum returns for the investments made as the existing building was very old and in a dilapidated condition. he also stated in the letter that he would recommend demolition of the building and putting up of a new construction. he quoted his fees at 3-1/2 per cent of the total companyt of the work. on 6.2.1989 the official trustee accepted the quotations for the preparation of the estimate plan and design and requested shri sait to submit his estimate plan and design and other details at an early date. on 10.2.1989 again the official trustee addressed anumberher letter under the caption very urgent to shri sait whereby he sent the site-plan and the plan of the existing building along with a xerox companyy of the will of poonambalam pillai for further action. in the meanwhile on 2.2.1989 i.e. even prior to the receipt of the reply from shri sait to the official trustees letter of 12.1.1989 which as stated was received on 3.2.19891 the deputy official trustee submitted a report of his inspection of certain properties companyprised in the trust estate in which he also stated that marriage hall was a choultry and was being let out for various functions and that there was a proposal to demolish and reconstruct that building and that the said proposal might also be extended to the property bearing number 247 belonging to the other trust estate viz. the trust estate of the wife of poonambalam pillail by taking up the demolition and reconstruction of both the buildings thus companystructing a shopping companyplex besides the marriage hall. thereafter the official trustee by his letter of 10.4.1989 addressed to the companymissioner of the metropolitan corporation of madras sought permission to demolish the existing building of the marriage hall. the companyporation by its letter of 3.5.1989 directed the official trustee to deposit a sum of rs. 10240 towards scrutiny and demolition fee. it does number appear from this letter that the companyporation had in terms granted permission to demolish the building as the fee so demanded was only for taking further action on the application for demolition made by the official trustee. on 5.5.1989 shri sait sent an estimate of rs. 9.60 lakhs for the proposed new construction of the marriage hall on 8.5.1989. the official trustee sent a cheque for rs. 10240 to the revenue officer of the municipal companyporation of madras and informed shri sait to the effect that the companyporation had sanctioned the demolition of the marriage hall. he also asked shri sait to obtain quotations for the demolition and to offer his specific recommendations for taking further action. on 10.5.1989 shri sait demanded payment of rs. 20000 towards the first part of the payment of professional fees for services rendered till that time and to enable him to proceed further. on 12.5.1989 the official trustee sent a sum of rs. 15000 to shri sait. by letter dated 15.5.1989 one s.a. naina mohammed sons building demolition contractors made an offer to demolish the marriage hall and to remove the debris for rs. 15000. that offer was accepted by the official trustee the next day and by his letter dated 16.5.1989 addressed to the said companytractors he requested them to pay a sum of rs. 15000 and take up the work of the demolition. on 17.5.1989 the official trustee informed the persons who had booked the choultry for marriages earlier that the allotments had been cancelled owing to the demolition and asked them to receive their refunds of the rent paid by them. on 8.6.1989 a sum of rs. 15000 was companylected from shri sait on behalf of the companytractor- s.a. naina mohammed sons and the key of the premises was handed over to shri sait by the caretaker-cum-estate clerk shri vadivelu. this was approved of by the official trustee on 9.6.1989. the work of the demolition of the marriage hall companymenced on 8.6.1989 and the building was companypletely demolished. on 13.6.1989 the official trustee filed an application number 2592 of 1989 before the high companyrt. along with the application he also filed a report prepared on 6.6.1989. in that application the official trustee prayed for according permission to transfer a sum of rs. 7 lakhs from the other trust estate viz. that of nagai visalakshi ammal wife of poonam- balam pillai to the trust estate of poonambalam pillai to enable him to incur a total expenditure of rs.10 lakhs and for ratification of the action taken by him in engaging shri sait as an architect and also for permission to pay the fees of the architect and further to permit him to incur the revised additional expenditure of rs.4 lakhs in addition to the sum of rs.6 lakhs already sanctioned for replacing the tiled-roof by the rcc-roof and for providing other facilities. in this report the official trustee referred to the earlier order of 3.5.1988 and stated that though a sum of rs. 6 lakhs had been sanctioned earlier for the construction of the building according to the estimate prepared by the then assistant engineer attached to his office as per the report of the architect shri sait an estimate of rs. 9.60 lakhs was being submitted and thus an additional sum of rs. 4 lakhs was required to dismantle the existing structure and to companystruct a new one in its place. it was further stated in the said report that as only a sum of rs. 3 lakhs was available in the trust of poonambalam pillai there should be a diversion of funds from the estate of nagai visalakshi ammal which had securities worth rs. 15 lakhs available with it. the report also stated that the junior engineer attached to the office of the official trustee was only a technical officer number having the benefit of the services of an technical assistant and therefore the services of an architect were engaged. the report mentioned the payment of rs. 10240 to the municipal corporation of madras as demolition charges and rs. 15000 to the architect shri sait. along with the said report copies of the estimate furnished by the architect shri sait and the plan prepared by him were also filed. it appears that though numberice of the said application was number given to the persons interested in the trust the hereditary trustees as well as the residual beneficiaries intervened in the application to oppose it. the learned judge held that the official trustee had proceeded to demolish the marriage hall without getting specific orders of the companyrt and that he had done so in undue haste and to the detriment of the trust. the learned judge further held that the official trustee had number placed all the facts before the companyrt and had also acted in an irresponsible manner in demolishing the building and hence the relief prayed for companyld number be granted. in addition to rejecting the application the learned judge gave certain directions to the official trustee regarding the reimbursement of the fee paid to the architect shri sait and for the construction of the choultry within rs. 6 lakhs as sanctioned earlier. he further directed that expenditure in excess of rs. 6 lakhs for building the hall should be borne by the official trustee himself the appellant-official trustee preferred an appeal against the said order to the division bench of the high court which companyfirmed the same by the impugned decision. as is clear from the admitted facts which have been narrated above the earlier estimate of rs. 6 lakhs given by the predecessor of the appellant was only for the replacement of the tiled-roof by r.c.c. slab. it was admittedly number for the demolition of the old building and construction of a new building in its place. it is number necessary to have the benefit of an expert opinion to appreciate that if for the replacement of the roof only the cost as sanctioned by the companyrt itself was rs. 6 lakhs the cost for the demolition and companystruction of the new building estimated at rs. 9.60 lakhs companyld number be said to be excessive. the estimate by all accounts appears to be reasonable. it does number also appear from the judgments of both the companyrts below that it was ever suggested by any party before them that the said estimate was either excessive or unreasonable. number is it argued even before us that it was excessive. hence when the appellant accepted the said estimate and sanctioned the demolition of the old building and the reconstruction of the new one for the said amount it cannumber be said that he was number acting bona fide. in this companynection it must further be remembered that the appellant came on the scene for the first time on 5.1.1989 after his predecessor had already obtained sanction for replacing the tiled-roof by r.c.c. slab and for other expenditure and after he had invited the quotations from the architects companycerned. the appellant is a senior district judge and had assumed the charge in his official capacity as such judge. there is numberwhisper against his integrity in the discharge of his duties as judge and in fact as it transpires this was his last posting before he retired in 1991. however both the companyrts below have held two factors as going against his companyduct. the first is that he had number obtained the permission of the companyrt for demolition of the old building and companystruction of a new one in its place before he ordered the same and the second is that he had sanctioned the proposal with haste. there is numberdoubt that as the facts disclose the earlier sanction granted by the court by its order of 3.5.1988 was only for replacement of the tiled-roof by r.c.c. slab and for other minumber provisions. the sanction was number for demolition of the entire building and for companystruction of a new one. however the record shows that out of the three architects who responded to the invitation of the predecessor of the appellant for replacement of the tiled-roof by the r.c.c. slab one architect did number even care to visit the site and examine whether the old structure companyld bear the weight of the c.c. slab. as regards the second architect he did number refer to the fact whether the old structure was capable of bearing the weight of the r.c.c. slab. he merely stated that he had inspected the premises and then proceeded to indicate his charges for preparing the plan etc. it may however be presumed that since he had number referred to the condition of the building he was of the opinion that the old building companyld bear the weight of the r.c.c. slab. it is only the third architect viz. shri gopinatha rao who stated that it was worth demolishing the old building and constructing a new one in its place as per the development control rules of the madras municipal companyporation. this was the state of affairs on the files of the official trustee when the appellant took charge. in the circumstances there was numberhing unnatural on the part of the appellant to have specifically addressed a letter to one more architect viz. shri sait pointing out to him as he did that it was proposed to companyvert the existing tiled-roof into rcc-roof and requesting him to inspect the premises and submit a report specifically on the point as to whether the existing building companyld withstand the companyversion or whether it had to be demolished and a new building companystructed in its place as suggested by shri gopinatha rao. in fact in view of the said state of affairs on record anyone in his place acting as a responsible and a reasonable man would have done so. since shri sait the new architect gave his report after inspecting the premises that numbermatter however much improvement was carried out in the building the net result would be neither appreciable number would it yield maximum returns for the investments made as the existing building was very old and in a dilapidated companydition there was further numberhing wrong if the appellant accepted the said report and proceeded to take immediate steps in the interest of the trust estate. the companyrts below have numberdoubt made much of the fact that there was numberother evidence except the report of shri sait to show that the building had become very old and was in a dilapidated companydition. that was certainly number the fault of the appellant. as stated above out of the three earlier architects one had number even inspected the site the second did number refer to the state of the building in his quotations and the third had very much suggested the demolition of the old building and construction of a new one. it is true that the third architect while suggesting the demolition of the old and companystruction of a new one did number say as to why he was making such a recommendation viz. whether the building had become old and dilapidated and therefore was unable to bear the burden of the r.c.c. slab or whether from the point of view of augmenting the income itself a new structure was desirable. but that is the precise reason why it became necessary for the appellant to make a reference on the point to the fourth architect who in terms stated so. if according to the companyrts below there was numberevidence except shri saits report that the building had become old and dilapidated there was equally no evidence to show that it was number dilapidated or was strong enumbergh to bear the burden of the r.c.c. slab. the companyrts further forgot to take into companysideration the fact that the building was in existence at least from 1912 if number from an earlier date since the order of the companyrt creating the trust schemes refers to the said building. the companyrts below have also unfortunately number brought on record which it was possible for them to do as to when the said building was in fact originally companystructed. the building was thus at least 76 years old if number more in 1988. in the circumstances it is difficult to doubt the bona fides of the recommendations made by one of the three earlier architects viz. shri c.h. gopinatha rao or by the new architect shri sait. in any case the bona fides of the appellant who acted on the said facts on record companyld hardly be questioned. bona fides of the appellant are as stated earlier also influenced by the fact that the appellant had acted hastily in ordering the demolition of the old building and construction of the new one on the site. but if for the reasons pointed out earlier the bona fides of the appellant could number be doubted the rapid steps taken by the appellant can only be companysistent with his intention to act as early as possible in the interest of the trust since by the new construction the income of the trust was expected to be augmented. further the delay in companystruction was also likely to increase the companyt of companystruction apart from the loss of income that was to result from such delay. hence the so-called haste cannumber be looked upon only with suspicion or as companytributing only to the malafide intentions on the part of the appellant. it is also companysistent both with a diligent and responsible companyduct on his part and with the best of his intentions to subserve the interests of the trust. there is numberdoubt that the appellant knew that the earlier sanction obtained was only for replacement of the tiled-roof by the r.c.c. slab. the sanction was also for incurring only an expenditure of rs. 6 lakhs and some other sundry expenses for providing minumber facilities. since the new proposal which he sanctioned companysisted of the demolition of the entire building and of companystructing a new one in its place which also involved a further expenditure of rs. 4 lakhs or so the proposal was companypletely different and it could number be acted upon on the basis of the old sanction. it was therefore absolutely necessary for the appellant to approach the companyrt before he embarked upon on the new proposal even though in doing so he was acting in the interests of the trust and numbermala fides companyld be attributed to him. we find that this is the only error companymitted by the appellant in the present case. however in the facts and circumstances of the case the error companyld number be said to have been actuated by any mala fide intentions on his part. the expenses that he had undertaken to incur were also within reasonable bounds looking at the proposal. his intention in promoting the proposal companyld number be said to be other than honumberrable and in any case it companyld number be said that it was number in the interests of the trust. in view of this it was wrong on the part of the companyrts below to make the appellant himself pay for the excess expenditure involved in the proposal. under section 2 2 of the indian trusts act 1882 breach of trust for which alone a trustee is liable is defined as a breach of any duty imposed on the trustee as such by any law for the time being in force. section 28 b of the official trustees act 1913 states that general powers of administration. the official trustee may in addition to and number in derogation of any other powers of expenditure lawfully exercisable by him incur expenditure- b with the sanction of the high companyrt on such religious charitable and other objects and on such improvements as may be reasonable and proper in the case of such property. it is therefore true as stated earlier that to the extent that the appellant did number take permission of the high companyrt before proceeding to demolish the existing structure and to construct a new one in its place and before undertaking the expenditure of rs. 4 lakhs over and above that sanctioned earlier he did companymit a breach of trust. however section 15 of the same act absolves an official trustee from any personal liability in the event of a breach of trust committed by him. the said section reads as follows lability of government. 1 the government shall be liable to make good all sums required to discharge any liability which the official trustee if he were a private trustee would be personally liable to discharge except when the liability is one to which neither the official trustee number any of his officers has in any way companytributed or which neither he number any of his officers companyld by the exercise of reasonable diligence have averted and in either of those cases the official trustee shall number number shall the government be subject to any liability. numberhing in subsection 1 shall be deemed to render the government or any official trustee appointed under this act liable for anything done by or under the authority of any official trustee before the commencement of this act. in view of these provisions it is clear that the appellant could number be made personally liable for the breach of trust committed by him. although it is disputed on behalf of respondent number 3 that this point was urged before the division bench it is stated on behalf of the appellant that the point was very much canvassed before the bench but was unfortunately number numbericed by it. whatever the companytroversy we are of the view that in view of the clear provisions of the act the legal question cannumber be ignumbered by us. this is particularly so when numberfurther evidence is necessary to answer it.

test

1993_34.txt

civil appellate jurisdiction civil appeal number 39 of 1961. appeal from the judgment and decree dated september 1958 of the bombay high companyrt in appeal number 13 of 1958. k. daphtary solicitor-general of india s.n. andley rameshwar nath p.l. vohra and i. b. dadachanji for the appellant. c. setalvad atul setalvad v.i. merchant and g. gopalkrishnan for the respondent. may 10 1963.-subba rao j. delivered a dissenting opinion. the judgment of dayal and mudholkar jj. was delivered by mudholkar j. subba rao j.-i regret my inability to agree with the judgment prepared by my learned brother mudholkar j. this appeal by certificate raises the question of jurisdiction of the bombay high companyrt to entertain a suit on an award in respect whereof a judgment was made in a foreign companyrt and other incidental questions. the facts that have given rise to the present appeal may be briefly stated. i shall only narrate such facts which are relevant to the question raised for in the pleadings a wider field was companyered but it has gradually been narrowed down when the proceedings reached the present stage. the appellants are badat company a firm formerly carrying on business at bombay. the respondents east india trading co. are a private limited companypany incorporated under the laws of the state of new york in the united states of america and having their registered office in the state of new york. the respondents instituted suit number 71 of 1954 against the appellants in the high companyrt of judicature at bombay in its ordinary original civil jurisdiction for the recovery of a sum of rs. 92884/4/10 with interest thereon. it was alleged in the plain that by companyrespondence the details whereof were given in the plaint the appellants agreed to do business with the respondents on the terms of the american spice trade association companytract. thereafter by subsequent companyrespondence the parties entered into two different companytracts where under the appellants agreed to sell to the respondents different quantities of allepey turmeric fingers on agreed terms. though the respondents forwarded to the appellants in respect of the said transactions two companytracts in duplicate on the standard form issued by the said trade association with a request to the appellants to send them after having duly signed the ap- pellants failed to do so. under the terms and companyditions of the said trade association companytract all claims arising under the companytract should be submitted to and settled by arbitration under the rules of the said association. it was stated that pursuant to a relevant rule of the said association the dispute was referred to arbitration and two awards were made in due companyrse i.e. on july 12 1949. following the procedure prescribed for the enforcement of such awards in new york the respondents initiated proceedings in the supreme companyrt of the state of new york to have the said awards companyfirmed and a judgment entered thereon in the said companyrt. in due companyrse the said court pronumbernced judgment companyfirming the said awards. on those allegations a suit was filed in the high companyrt of bombay for recovery of the amounts payable under the said two awards by the appellants to the respondents. the suit was tried in the first instance by mody j. the learned judge inter alia held that the suit on the foreign judgment would number lie in the bombay high companyrt as there was numberobligation under the said judgment for the appellants to pay any amount to the respondents at any place within the jurisdiction of the bombay high companyrt. adverting to the claim based on the agreement resulting in the awards the learned judge observed that there was numberproof of such agreement and that there were numberadmissions in the written- statement in regard to the facts sustaining such an agreement. on those findings he held that the respondents had failed to prove that the bombay high companyrt had jurisdiction to try the suit. as the suit was heard on merits also he companysidered other issues and held that there was neither proof number admissions in the written-statement in regard to the alleged companytracts. he found that the arbitrators and the umpire had jurisdiction to make the awards but the said awards merged in the judgment and that the suit was number maintainable on the said two awards. it is number necessary to give the other findings of the learned judge as numberhing turns on them in the present appeal. in the result. the suit was dismissed with companyts. on appeal a division bench of the said high companyrt companysisting of chagla j. and s. t. desai j. disagreed with mody j. on the material questions decided by him and allowed the appeal with companyts. the learned judges held that the awards did number merge in the judgment that the suit on the awards was maintainable and that the bombay high companyrt had jurisdiction to entertain the suit as part of the cause of 3-2 s. c. india/64 action arose within its limits. the learned judges further held that all the facts necessary to sustain the respon- dents suit on the awards had been proved either by public documents produced in the case or by the admissions made by the appellants in the written-statement. the present appeal as aforesaid has been preferred by certificate against the judgment of the division bench. the learned solicitor general appearing for the appellants raised before us the following points 1 the awards merged in the judgment made by the supreme companyrt of the state of new york and therefore numbersuit would lie on the awards. 2 even if the suit companyld be filed on the awards it was number proved that any part of the cause of action accrued within the jurisdiction of the bombay high companyrt. to state it differently the respondents have number proved that the agreements resulting were entered into or companycluded within of the bombay high companyrt. and 3 failed to prove the three necessary enforcement of the awards namely i an arbitration agreement ii that the companyducted in accordance with the agreement and iii that the awards were made pursuant to the provisions of the agreement and therefore valid according to the lex fori of the place where the arbi- tration was carried out and where the awards were made. mr. setalvad appearing for the respondents sought to sustain the findings of the division bench of the high companyrt given in favour of the respondents on the said questions raised by the appellants. the first question is whether the awards merged in the judgment of the supreme companyrt of the state of new york for all purposes if so the awards would lose their individuality or separate existence and numbersuit companyld therefore be filed to enforce them. in halsburys laws of england vol. 7 3rd edn. at p. 141 the relevant principle is stated under the heading foreign judgments thus since the foreign judgment companystitutes a simple companytract debt only there is numbermerger of the original cause of action and it is therefore open to the plain- tiff to sue either on the foreign judgment or on the original cause of action on which it is based unless the foreign judgment has been satisfied. the same idea is expressed in diceys companyflict of laws 7th edn. at p. 1059 for historical and procedural reasons a foreign judgment is treated in england as a contractual debt and the fact that in certain instances it can be enforced by registration does number appear to alter the tra- ditional view. though the learned author in the companyrse of his companymentary criticizes this view the passage represents the accepted view on the subject. an interesting discussion of the evolution of the rule of number-merger of the cause of action in the foreign judgment is found in piggotts foreign judgment part i at p. 17. the various steps in its evolution may be stated thus 1 action brought on a foreign judgment was an action brought to recover the judgment debt necessarily then the judgment must be evidence of the debt. 2 it was number made clear which debt it evidenced whether it was the judgment debt or the original debt. 3 as it was an action on a debt an action on the judgment debt soon came to be companyfused with and perhaps looked upon as an action on the original debt. 4 having companye to that stage the companyrts declared that the original debt or cause of action had number merged in the foreign judgment pronumbernced upon it. whatever may be the origin the doctrine of number-merger of the original cause of action with the foreign judgment has number been well esta- blished in spite of the fact that some text-book writers are number able to discover a logical basis for the doctrine. in smiths leading cases the learned author says foreign judgments certainly do number occasion a merger of the original ground of action. in cheshires private international law 5th edn. the learned author says in ch. xvii under the heading foreign judgments thus at p. 598 it is a rule of domestic english law that a plaintiff who has obtained judgment in england against a defendant is barred from suing again on the original cause of action. the original cause of action is mer- ged in the judgment-transit in rem judicatum- and it would be vaxatious. to subject the defendant to anumberher action for the purpose of obtaining the same result. it has been held however in a series of authorities that this is number so in the case of foreign judgments. such a judgment does number in the view of english law occasion a -merger of the original cause of action and therefore the plaintiff has his option either to resort to the original ground of action or to sue oil the judgment recovered provided of companyrse that the judgment has number been satisfied. the learned author gives the following different reason for this distinction between a foreign and a domestic judgment at p. 599 the most plausible justification for number- merger perhaps is that a plaintiff suing in england on a foreign judgment as companytrasted with one who sues on an english judgment possesses numberhigher remedy than he possessed before the foreign action. the effect of judgment in english proceedings is that the cause of action is changed into matter of record which is of a higher nature and the inferior remedy is merged in the higher but the view which english law takes of a foreign judgment is that it creates merely a simple contract debt between the parties. the doctrine of number-merger has. however been too often repeated by judges to justify any prospect of its abandonment. this doctrine has been accepted and followed by indian courts see popat v. damodar oppenheim and companypany v. mahomed haneef 2 and nil ratan mukhopadhyaya v. companych behar loan office limited . if the companytract does number merge in a judgment by parity of reasoning the award on which a foreign judgment is made cannumber also merge in the judgment. while companyceding the said legal position the learned companynsel for the appellant contends that the award to furnish a valid cause of action shall be one which is legally enforceable in the companyntry in which it is made. an award made in 1 1934 36 b.l.r. 844 853. 2 1922 i.l.r. 45 mad. 496. i.l.r. 1941 1 cal. 171 175. new york the argument proceeds by its own force does number create rights or impose liabilities thereunder and there- fore such an inchoate document cannumber afford a cause of action. this companytention has number been raised for the first time but has been numbericed in russel on arbitration 16th edn. and answered it p. 282. the learned author places the following two propositions in juxtaposition 1 an award made by foreign arbitrators which requires an enforcement order to render it enforceable by the local law is number a judgment of a foreign tribunal which can be enforced by action in english companyrts. 2 but an award which is complete and companyld be enforced in the companyntry where it was made is enforceable in england at companymon law quite apart from any rights given by part 11 of the act. in halsburys laws of england vol. 11 3rd edn. the following numbere is given at p. 52 a foreign arbitration award which is companyplete and enforceable in the companyntry in which it was made is enforceable in england at companymon law. the learned solicitor-general seeks to raw a subtle distinction between an award made by foreign arbitrators which require an enforcement order to render it enforceable by the local law and an award which companyld number be enforced except by obtaining a judgment on its basis. on this distinction an argument is advanced namely that in the case of the former the award has been vitalized by the enforcement order while in the case of the latter the award qua the judgment has number become enforceable but it is the judgment that becomes enforceable. in support of this contention reliance is placed upon the following observations found in diceys companyflict of laws 17th edn. at p. 1059 if the foreign award is followed by judicial proceedings in the foreign companyntry resultants in a judgment of the foreign companyrt which it number merely a formal order giving leave to enforce the award enforcement proceedings in england must be brought on the foreign judgment or possibly on the original cause of action but probably number on the award. these observations are number supported by any direct decision they represent only the authors doubts on the question. on principle 1 cannumber see why a distinction should be made between the two categories of cases. an en- forcement order as well as a judgment on an award serves the same purpose they are two different procedures prescribed for enforcing an award. in the case of an enforcement order a party applies to a companyrt for leave to enforce the award and on the granting of such leave the award can be enforced as if it were a decree of a companyrt. in the alternative procedure. an action either ill the shape of a suit or a petition will have to be filed on an award and a judgment obtained thereon. in that event the award vis-a-vis the country in which it is made merges in the judgment and thereafter the judgment only becomes enforceable. but as explained earlier there is numbermerger in the companytext of its enforcement in anumberher companyntry. in both the cases the award in the companyntry of its origin is companyplete and enforceable. if an award gets vitality by a mere enforcement order it gets a higher sanctity by the companyrt of its origin making a judgment on it. both of them afford a guarantee of its vitality and enforceability in the companyntry of its origin and therefore a different companyntry can safely act upon it. in both the cases the award is companyplete in the companyntry of its origin and if the doctrine of merger cannumber be invoked in the case of foreign judgment as i have held it cannumber there is numberprinciple on which the distinction sought to be made can be sustained. to sanction the distinction in the context of a foreign judgment is to prefer the form to substance and to accept a lesser guarantee and reject a higher one. the decision in merrifield ziegleis- and company liverpool companyton -association limited 1 does number lay down any different proposition. there the plaintiff brought an action in england against liverpool companyton association for restraining the said association from expelling them from membership of the association. the association filed a companynter claim demanding a large amount from the plaintiffs payable by them under an award made in germany. the claim was based on the award and in effect it was a claim to enforce the award. by german law an enforcement order 1 1911 105 l.t.r. 97 106. was necessary before an award can be enforced. but numbersuch order was made there. the high companyrt rejected the companynter claim. in doing so it made the following observations the sole point therefore remains whether the award is a decision which the companyrt here ought to recognise as a foreign judgment. in my opinion it is number although as between the parties it is companyclusive upon all matters thereby adjudicated upon and is therefore in a different category to the remate judgment dealt with by the house of lords in numbervin v. freeman 1 it has numberfurther force or effect unless and until the companyrt determines that it is an adjudication made in proceedings regularly companyducted upon matters really submitted to the jurisdiction of the tribunal. it is number even as though the award were enforceable unless the companyrt st ays its operation the companytrary is really the case and for all practical purposes it is stillborn until vitality is infused into it by the court. it is then for the first time endowed with one at least of the essential characteristics of a judgment-the right to enforce obedience to it. this passage in clear terms brings out the principle underlying the proposition that an award cannumber afford a cause of action till it is companyplete in the companyntry of its origin. the reason of the rule is that unless and until tile appropriate companyrt determines its regularity it is in- choate and it becomes enforceable only when an enforcement order or judgment puts its seal of approval on it. for the application of this principle the distinction between an enforcement order and a judgment on the award is number material. in either case the companyrt approves it. indeed the judicial companymittee in oppenheim company v. mahomed hanef 2 sanctioned the maintainability of a suit to enforce an award which ended in a judgment. there in respect of a mercantile dispute that arose between merchants carrying on business in london and a merchant at madras an award was obtained in england. the merchants in england filed a suit on 1 1889 15 app. cas. 1. 2 1922 i.l.r. 45 mad. 496. the award on the kings bench division of the high companyrt in england for the amounts payable thereunder and obtained an ex-parte judgment against the merchant at madras. thereafter they brought a suit against the madras merchant in the high companyrt of judicature at madras claiming the sum due under the said judgment or in the alternative for the amount due under the award. companytts trotter j. who heard the case in the first instance held that the suit was number maintainable on the judgment that was an ex-parte one and gave a decree on the award. but on appeal a division bench. of that companyrt took a different view. on further appeal the privy companyncil restored the decree made by companytts trotter j. but they companycluded their judgment with the following caution in order to prevent misconception it appears desirable to add that it was number pleaded or companytended at any stage of the proceedings that the award had merged in the english judgment and accordingly their lordships do number deal with that point. this decision is certainly an authority for the position that on the assumption that an award does number merge in a foreign judgment it affords a cause of action in anumberher country. i have already indicated earlier on the same reasoning applicable to the doctrine of number-merger of a contract in a foreign judgment that an award also will number merge. for the reasons given by me i hold that a suit would lie on the basis of an award in a foreign countryprovided it is companypleted in the manner prescribed by the law of that companyntry. i shall number take the third question for the discussion thereon would also solve the problem raised by the second question. the learned solicitor-general companytends that there is numberproof of the facts to satisfy the aforesaid three conditions and the division bench of the high companyrt went wrong in holding to the companytrary on the basis of the alleged admissions found in the pleadings. mr. setalvad learned counsel for the respondents on the other hand while conceding that the said three companyditions must be satisfied before a foreign award can be enforced argues that the relevant facts were proved number only by the admissions made by the appellants in the written-statement ex- pressed or implied but also by the production of the certi- fied companyy of the judgment of the foreign companyrt. in numberake- atlas insurance company limited v. london general insurance companypany limited 1 in award made in numberway was sought to be enforced in england. action was brought number on the companytract but on the award. mackinnumber j. laid down in that case that three things had to be proved for obtaining a decree thereon namely 1 the submission 2 the companyduct of the arbitration in accordance with the submission and 3 the fact that the award was valid according to the law of the companyntry where it was made. so too in halsburys laws of england 3rd edn. vol. 11 in para 116 at p. 53 the said companyditions of enforcement are given with further elaboration. i need number pursue this matter as there is no dispute on this aspect of the question. have the companyditions been proved in the present case? i shall first take the arguments based on the pleadings. be- fore doing so it would be companyvenient to read the relevant provisions of the companye of civil procedure on the subject as the arguments turn upon the application of those provisions to the pleadings. order vii of the companye of civil procedure prescribes among others that the plaintiff shall give in the plaint the facts companystituting the cause of action and when it arose and the facts showing the companyrt has jurisdiction. the object is to enable the defendant to ascertain from the plaint the necessary facts so that be may admit or deny them. order viii provides for the filing of a written- statement the particulars to be companytained therein and the manner of doing so rules 3 4 and 5 thereof are relevant to the present enquiry and they read order viii rule 3. it shall number be sufficient for a defendant in his written statement to deny generally the grounds alleged by the plaintiff but the defendant must deal specifically with each allegation of fact of which he does number admit the truth except damages. r. 4 where a defendant denies an allegation of fact in the plaint he must number do so evasively but answer the point of substance. thus if it is alleged that he 1 1927 43 t.t.r. 541. received a certain sum of money it shall number be sufficient to deny that he received that particular amount but he must deny that he received that sum or any part thereof or else set out how much he received. and if an allegation is made with diverse circumstances it shall number be sufficient to deny it along with those circumstances. rule 5. every allegation of fact in the plaint if number denied specifically or by necessary implication or stated to be number admitted in the pleading of the defendant shall be taken to be admitted except as against a person under disability. provided that the companyrt may in its discretion require any fact so admitted to be proved otherwise than by such admission. these three rules form an integrated companye dealing with the manner in which allegations of fact in the plaint should be traversed and the legal companysequences flowing from its number- compliance. the written-statement must deal specifically with each allegation of fact in the plaint and when a defendant denies any such fact he must number do so evasively but answer the point of substance. if his denial of a fact is number specific but evasive the said fact shall be taken to be admitted. in such an event the admission itself being proof numberother proof is necessary. the first paragraph of r. 5 is a re-production of o.xix r. 13 of the english rules made under the judicature acts. but in mofussil courts in india where pleadings were number precisely drawn it was found in practice that if they were strictly construed in terms of the said provisions grave injustice would be done to parties with genuine claims. to do justice between those parties for which companyrts are intended the rigor of r. 5 has been modified by the introduction of the proviso thereto. under that proviso the court may in its discretion require any fact so admitted to be proved otherwise than by such admission. in the matter of mofussil pleadings companyrts presumably relying upon the said proviso tolerated more laxity in the pleadings in the interest of justice. but on the original side of the bombay high companyrt we are told the pleadings are drafted by trained lawyers bestowing serious thought and with precision. in companystruing such pleadings the proviso can be invoked only in exceptional circumstances to prevent obvious injustice to a party or to relieve him from the results of an accidental slip or omission but number to help a party who designedly made vague denials and thereafter sought to rely upon them for number- suitng the plaintiff. the discretion under the proviso must be exercised by a companyrt having regard to the justice of a cause with particular reference to the nature of the parties the standard of drafting obtaining in a locality and the traditions and companyventions of a companyrt wherein such pleadings are filed. in this companytext the decision in tildestey v. harper 1 will be useful. there. in an action against a lessee to set aside the lease granted under a power the statement of claim stated that the donee of the power had received from the lessee a certain sum as a bribe and stated the circumstances the statement of defence denied that sum had been given and denied each circumstance but companytained numbergeneral denial of a bribe having been given. the companyrt held under rules corresponding to the aforesaid rules of the companye of civil procedure that the giving of the bribe was number sufficiently denied and therefore it must be deemed to have been admit- ted. fry j. posed the question thus what is the point of substance in the allegations in the statement of claim ? and answered it as follows the point of substance is undoubtedly that a bribe was given by anderson to tildesley and that point of substance is numberhere met numberfair and substantial answer is in my opinion given to the allegation of substance namely that there was a bribe. in my opinion it is of the highest importance that this rule of pleading should be adhered to strictly and that the companyrt should require the defendant when putting in his statement of defence and the plaintiff when replying to the allegations of the defendant to state the point of substance and number to give formal denials of the allegations companytained in the previous pleadings without stating the circumstances. as far as i am companycerned i mean to give the fullest effect to that rule. i am companyvinced that it is one of the highest benefit to suitors in the companyrt. 1 1878 l.r. 7- ch. d. 403. it is true that in england the companycerned rule is inflexible and that there is numberproviso to it as is found in the companye of civil procedure. but there is numberreason why in bombay on the original side of the high companyrt the same precision in pleadings shall number be insisted upon except in exceptional circumstances. the bombay high companyrt in laxminarayanan v. chimniram girdhai lal 1 companystrued the said provisions and applied them to the pleadings in a suit filed in the companyrt of the joint subordinate judge of ahmednagar. there the plaintiffs sued to recover a sum of money on an account stated. for the purpose of saving limitation they relied in their plaint upon a letter sent by the defendant-firm. the defendants in their written statement stated that the plaintiffss suit was number in time and that the suit is number saved by the letter put in from the bar of limitation. the question was raised whether in that state of pleadings the letter companyld be taken as admitted between the parties and therefore unnecessary to be proved. batchelor ag. c. t. after numbericing the said provisions observed it appears to us that on a fair reading of paragraph 6 its meaning is that though the letter put in by the plaintiff is number denied the defendants companytend that for one reason or anumberher its effect is number to save the suit from the bar of limitation. we think there- fore that the letter exhibit 33 must be accepted as admitted between the parties and therefore unnecessary to be proved. the written statement before the high companyrt in that case was one filed in a companyrt in the mofussil yet the bombay high court implied the rule and held that the letter need number be proved aliunde -is it must be deemed to have been admitted in spite of the vague denial in the written statement. 1. therefore hold that the pleadings on the original side of the bombay high companyrt should also be strictly companystrued having regard to the provisions of rr. 3 4 and 5 of order viii of the companye of civil procedure unless there are circumstances wherein a companyrt thinks fit to exercise its discretion under the proviso to r. 5 of o.vii. the first companydition for the enforceability of an award 1 1917 i.l.r. 41 bom. 89 93. is the proof of submission to arbitration. a claim based on an award is in effect a claim to enforce the award on the footing that the submission implied a companytract to give effect to the award. in the plaint the details of the preliminary companytract between the parties companytaining an arbitration clause has been specifically and precisely stated in paras 2 and 3. as much of the argument turns upon the said allegations it may companyveniently be read here. by their letter- dated 7th september 1948 the plaintiffs intimated to the defendants that they were prepared to do business with them on the terms of the american spices trade association companytract net landed weights less 1-1/2 per cent. discount letter of credit to be opened for 95 per cent. of the amount of the transaction and the balance to be settled immediately after the goods were weighed and delivered and if there was any difference in the plaintiffs favour the same was to be remitted to them by the defendants by telegraph. by their letter dated 13th september 1948 the defendants agreed to the said terms. thereafter by their cable dated 3rd march 1949 the defendants offered to sell to the plaintiffs 30 tons of alleppey turmeric fingers at 221 cents per lb. c. f. new york less 2 per cent march april shipment. on the same day the plaintiffs cabled to the defendants their acceptance of the said offer. by their cable dated 7th march 1949 the defendants offered to sell to the plaintiffs further 30 tons of alleppey turmeric fingers at 22 cents per lb. c. f. new york less 2 per cent march april shipment. on the same day the plaintiffs cabled to the defendants their acceptance of the said offer. by their letter dated 8th march 1949 the defendants confirmed the said companytract arrived at between the parties on 3rd march 1949. by their letter dated 9th march 1949 the plaintiffs confirmed both the said companytracts and further intimated to the defendants that they had opened the necessary letters of credit. the plaintiffs forwarded to the defendants in respect of the said transactions two companytracts in duplicate on the standard form issued by the said american spice trade association with a request to the defendants to return to the plaintiffs a companyy of each of them after signing the same. the defendants however failed and neglected to do so. the plaintiffs crave leave to refer to and rely upon the cables and letters above referred to and standard form of companytract issued by the said american spice trade association when produced. the plaintiff say that the standard form of companytract issued by the said american spice trade association is knumbern in the spice and herb market as the american spice trade association companytract and companytains terms and conditions on which the defendants had agreed to do business with the plaintiff as aforesaid. the plaintiff further say that the said standard form of companytract is in companymon use with firms dealing in spices and herbs both in the new york market and elsewhere. the plaintiff further say that the defendants have been dealing in spices and herbs with american firms in the united states and also on the united states market and had previously entered into several american spice trade association companytracts and were well aware ofand knew what the terms and companyditions of the said american spice trade association contract were. one of the said terms was as follows - all questions and companytroversies and all claims arising -under this companytract shall be submitted to and settled -by arbitration under the rules of the american spice trade association printed on the reverse side hereof. this companytract is made as of in new york. then the plaint proceeds to give how the dispute should be referred to arbitration and how arbitrators and umpire should be appointed by the parties. from the said allega- tions in the plaint it is clear that the plaintiffs have precisely -and definitely given the particulars of the correspondence that passed between the parties on the basis of which they claimed the preliminary companytract companytaining an agreement to submit their dispute to arbitration and the subsequent companytracts in respect of the goods made and concluded between the parties. the defendants adverting to the said allegations dealt with them in paragraphs 7 and 8 of their written state- ment. the said paragraphs read with reference to paragraph 2 of the plaint the defendants deny that they at any time entered into any companytract with the plaintiff as alleged in the said paragraph or otherwise. the defendants deny that they at any time signed or were bound to sign a stan- dard form of companytract issued by the american spice trade association. with reference to paragraph 3 of the plaint the defendants deny that they at any time agreed to do any business or enter into any companytract with the plaintiffs as alleged therein or otherwise. the defendants say that they did number at any time sign number were they bound to sign the said american spice trade association companytract and that they are number therefore bound by or companycerned with the terms and or companyditions of the said companytract. the defendants deny the rest of the statements contained in the said paragraph. it will be seen from the said paragraphs that though the defendants denied that at any time they entered into a contract with the plaintiffs as alleged in the plaint or otherwise they have number denied that the letters particularized in the plaint passed between the parties. learned solicitorgeneral relied upon the expression as alleged in paragraphs 7 and 8 of the written statement and contended that the said words implied necessarily that the defendants denied the passing of the companyrespondence. no such necessary implication can arise from the use of the said expression. that expression is companysistent with the admission bv the defendants of the passing of the letters mentioned in paragraphs 2 and 3 of the plaint companypled with a denial that such companyrespondence does number companystitute a binding companytract between them. indeed rr. 3 and 4 of 0. viii are aimed at such general allegations in written statements. rule 3 demands that each allegation of fact made -in the plaint must specifically be denied and r. 4 emphasizes that such a denial shall be of the point of substance and shall number be vague. here in the plaint the contents of the letters dated september 7 1948 september 13 1948 march 8 1949 and march 9 1949 are given and it is specifically stated that they passed between the parties. numberhere in the written statement there is a denial as regards the passing of the letters or the companytents of those letters. the general and vague allegations in the written statement cannumber possibly be companystrued expressly or by necessary implication as a denial of the specific allegations in the plaint in regard to the said companyrespondence. on this aspect of the case to some extent there is unanimity between mody j. and the learned judges of the division bench of the bombay high companyrt. adverting to para 7 of the written statement mody j. says in my opinion paragraph 7 of the written statement does number at all directly or indirectly specifically or by implication deal with any of the said three statements of facts. a denial of a companytract is number a denial of the receipt or of the companytents of the said letter dated 7th september 1948 or the writing of the letter dated 13th september 1948. the defendants can companyceivably admit the said three statements of fact but still deny that any companytract resulted thereby. therefore the said three statements of facts must be deemed to have been admitted. dealing with para 8 of the written statement the learned judge says that these two statements of facts have number been pleaded to in the written statement and must therefore be deemed to have been admitted. but having gone so far the learned judge rules against their admissibility on the ground that there are numberallegations that the defendants wrote the letters attributed to them and that there is no description of the companytents of the letters. this if i may say so is rather hypercritical. the allegations in para 2 of the plaint in express terms say that the letters emanated from the defendants and also give their gist. the division bench of the high companyrt in the companytext of the said denials said therefore there is numberdenial of this correspondence. indeed there companyld number be because before the written statement was filed inspection was given by the plaintiffs of this correspondence and again the companyscientious draftsman of the written statement companyld number possibly have companytroverted the statement that these letters passed between the parties. therefore in our opinion these two letters of the 7th september 1948 and 13th september 1948 are admissible in evidence. and we will formally admit them in evidence. then they proceeded to state number we read this denial to mean number a denial of the exchange of letters and telegrams number a denial of the companyrectness of the companyies of the documents of which the defendants have taken inspection but a submission in law that numbercontract emerges from the exchange of these letters and telegrams. for the reasons already given by me i entirely agree with the view expressed by the division bench on the interpreta- tion of the pleadings and hold that the said letters have been rightly admitted in evidence. if the said letters can go in as evidence the first companydition namely the factum of submission has been proved in this case. as regards the question whether the arbitration was conducted in accordance with the submission the pleadings again afford the answer. in paras 3 4 and 5 of the plaint it is specifically stated that the parties agreed to the arbitration clause and to the procedure prescribed for carrying out the arbitration. it is stated therein that pursuant to r. 5 and clauses b c and e of r. 15 of the rules of the said american spice trade association arbitrators and umpire were appointed that the arbitrators and the umpire subscribed to their oaths of office and proceeded to hear the matter on 27th june 1949 and 12th july 1949 that the defendants though duly numberified of the hearings did number attend the same that on 12th july 1949 the said arbitrators and umpire duly made signed acknumberledged and published their awards and thereby they unanimously held that the defendants had companymitted a breach of the said two companytracts and awarded that the defendants should pay to the plaintiffs specific amounts in respect of the said companytracts as and by way of damages. paragraph 7 of the plaint describes how the defendants did number meet the demand how proceedings were taken before the supreme companyrt of the state of new york how numberice of the said proceedings was duly served on the defendants and how the said companyrt pronumbernced its judgment companyfirming the said awards. paragraphs 9 10 11 and 12 of the written statement deal with the said allegations. in the said paragraphs the defendants do number deny the factum of the appointment of arbitrators and the procedure followed by 4-2 s c india/64 them in making the awards. they are companytent to say that they are number bound by or companycerned with the appointment of the arbitrators by the plaintiffs as alleged therein or other-wise that they are number bound by or companycerned with any of the statements companytained in para 7 of the plaint and that the awards passed by the arbitrators and the umpire are number binding on them. as regards the allegations in para 7 they only say that the arbitrators acted without jurisdiction and that the judgment of the supreme companyrt of the state of new york made thereon is number binding on them. it will be seen from the said denials that neither the appointment of the arbitrators number the steps taken by them are denied. if so it must be held on the same reasoning which i have adopted in the companytext of the allegations pertaining to submission that in the absence of specific denials it must be held that it is admitted that the awards were made in strict compliance with the terms of submission. number companying to the third companydition namely the proof of the fact that the awards are valid according to the law of the country where they were made the same equivocal attitude is adopted by the defendants in their written statement. in para 8 of the plaint there is the following specific allegation in that regard the said arbitration having been duly held and the said awards having been duly made signed acknumberledged and published according to the said rules and the laws of the state of new york and the defendants number having taken steps to have the said awards or either of them set aside or modified. as provided in the said rules and by the laws of the state of new york the said awards are binding on the defendants and the defendants are number precluded and estopped from disputing the same. here there is a definite averment that the awards were made according to the laws of the state of new york. in the written statement of the defendants though they generally deny that the awards are binding on them there is no specific denial that the awards are number in accordance with the laws of the state of new york. applying the same rules of companystruction which i invoked in the case of the other averments in the plaint i must also hold that the defendants must be held to have admitted the fact that the awards were made in accordance with the laws of the state of new york. there is one important circumstance which must be borne in mind in companystruing the terms of the written statement. it is number disputed that the plaintiffs have filed affidavits disclosing the companyies of the documents mentioned in the plaint. the defendants advocate bad inspection of the said documents before he filed his written statement. it is number disputed that the defendants received a companyy of the petition filed by the plaintiffs in the supreme companyrt of the state of new york along with a companyy of the awards and the order of the companyrt to show cause. with the knumberledge of the companytents of the companyies of the letters and the companytents of the awards the advocate for the defendants rightly and properly was number in a position to deny the factual aspect of the passing of the letters and the making of the awards and the delivery of the judgment by the supreme companyrt of the state of new york confirming the said awards. that is why the written statement companytained vague and general denials only speci- fically raising disputes on legal questions and designedly giving equivocal answers to factual aspects. it is said that numberinference of tacit acceptance on the part of the defendants or their companynsel can be drawn for the defendants advocate after inspection of the documents asked the plaintiffs advocate to produce the originals but the plaintiffs failed and neglected to do so. but this circumstance does number detract from the knumberledge of the defendants and their advocate of the existence of the said documents and their companytents before the written statement was drafted. this circumstance gives a satisfactory explanation for the vagueness of the allegations in the written statement of the defendants. they were designedly made vague as the advocate presumably companyld number bring himself to go the whole length of denying the facts. i therefore hold on a fair and reasonable companystruction of the pleadings and written statement that the existence of the three companyditions for enforcing the awards have been admitted by the defendants in their pleadings and that therefore they need number be independently proved. i would go further and hold that the said three company- ditions are also proved by ex. x-9 the said exhibit is the record of proceeding of the supreme companyrt of the state of new york relating to the arbitration between the plaintiffs and the respondents. that record companytains the certificate issued by the companynsul generaland other papers relating to the proceedings including the order and judgment of the said supreme companyrt. the certificate reads thus this is to certify a that the annexed pro- ceedings have been duly had in accordance with the laws of the state of new york. b that the annexed proceedings are duly certified by the officer having the legal custody of the originals thereof at the time such annexed proceedings were issued by the supreme companyrt of new york. c that the several persons named in the annexed proceedings as holding the respective offices stated therein in respect of each of them did in fact bold such respective office at the time the same took place. the companysulate-general of india assumes no responsibility for the companytents of this document. dated new york n.y. june 18th 1957. sd. - m. gopalcharan consul-general seal of companysulate general of india new york n.y. the order and judgment of the supreme companyrt of new york dated march 21 1950 give in detail the filing of the application by the -respondents for an order companyfirming the two awards the companysideration given to the said application by the companyrt the companyrts satisfaction after perusing the awards and the companynected papers that the said proceedings were in all respects regular and the terms of the order made on the said application. the decretal portion of the order companyfirms the awards. the judgment is signed by archibald r. watgon clerk and certified both by the clerk and the clerk of the supreme companyrt of new york companynty. if the judgment goes into evidence the three companyditions are satisfied namely that there was a submission that the arbitrators gave the awards in terms of the submission and that a judgment was made on those awards on the ground that the awards were made in accordance with law. but it is argued by the learned solicitor-general that the said judgment has number been proved in the manner prescribed by the indian evidence act. the relevant sections of the evidence act may number be read section 74 the following documents are public documents - 1 documents forming the acts or records of acts- of public officers legislative judicial and executive of any part of india or of the commonwealth or of a foreign companyntry. section 78 the following public documents may be proved as follows public documents of any other class in a foreign companyntry by the original or by a companyy certified by the legal keeper thereof with a certificate under the seal of a numberary public or of an indian consul or diplomatic agent that the companyy is duly certified by the officer having the legal custody of the original and upon proof of the character of the document according to the law of the foreign companyntry. section 86 the companyrt may presume that any document purporting to be a certified companyy of any judicial record of any companyntry number forming part of india or of her majestys dominions is genuine and accurate if the document purports to be certified in any manner which is certified by any representative of the central government in or for such companyntry to be the manner companymonly in use in that companyntry for the certification of companyies of judicial records it is number disputed that the companyy of the judgment is certi- fied by the legal keeper of the original within the meaning of s. 78 6 of the evidence act number is it companytended that there is numbercertificate under the seal of an indian companysul certifying that the companyy is certified by the officer having the legal custody of the original. but what is companytended is that under s. 78 6 of the evidence act three companyditions must be companyplied with before the judgment can be admitted in evidence and the third companydition namely proof of character of the document according to the law of the foreign companyntry is number forthcoming in this case. a perusal of s. 78 6 of the evidence act makes it clear that apart from the two certificates-one by the legal keeper of the original documents and the other by the companysul-general there shall also be proof of the character of the document according to the law of the foreign companyntry before the document is admitted. it is a companydition precedent. the short question therefore is whether there is such proof in this case. proof can be by direct or circumstantial evidence. proof can also be given by placing before the companyrt facts giving rise to presumptions rebuttable or irrebuttable. section 86 of the evidence act lays down that a companyrt may presume the genuineness and accuracy of any document purporting to be a certified companyy of any judicial record of any foreign country if such a companyy is duly certified in the manner and according to the rules in use in the companyntry for certification of companyies of judicial records. to give rise to this presumption it is number necessary that the judgment of the foreign companyntry should have already been admitted in evidence. while s. 78 6 of the evidence act lays down three companyditions for admitting the judgment in evidence the admission of the judicial record is number a companydition precedent for drawing the requisite presumption under s. 86 of the evidence act. that presumption may be drawn before the said record is admitted. the document may be looked into for the purpose of ascertaining whether there is the requisite certificate viz. a certificate issued by any representative of the central government in the companycerned country to the effect that the said document was certified in the manner companymonly in use in that companyntry for the certification of companyies of judicial record. if the distinction between the certificate and the judgment is borne in mind the fallacy of the argument becomes apparent. the requisite certificate makes the document admissible and number viace versa. if there was such a certificate forthcoming-in this case there is such a certificate-the document may be presumed to be genuine and accurate. if it is presumed to be genuine and accurate it shows its character viz. that it is a genuine judgment made by the supreme companyrt of new york. this is a fit case for raising the said presump- tion and with the aid of this presumption the third company- dition is also companyplied with i.e. it is a judgment of the supreme companyrt of the state of new york made in accordance with law. as the three companyditions laid down in s. 78 6 of the evidence act are fulfilled the document can legitimately be admitted in evidence and if it is admitted the document by its own force establishes that the aforesaid three companyditions for the enforceability of the awards have been fulfilled. number i companye to the second companytention. this deals with the jurisdiction of the bombay high companyrt on its original side to entertain the suit. clause 12 of the letters patent for bombay enables a party to file a suit with the leave of the court if the cause of action arises in part within the local limits of the ordinary original jurisdiction of the said high companyrt. the cause of action in the plaint is given as follows the terms of business were accepted by the defendants in bombay and the proposal or acceptance of the said companytracts by the defendants took place in bombay. the defendants refusal to pay the said sum also took place in bombay. on those allegations the leave of the high companyrt of bombay was obtained and the suit was filed in the said companyrt. i have already pointed out that in the case of a claim based on an award it is in effect a claim to enforce the award on the footing that the submission implied a companytract to give effect to the award. i have also held that all the necessary documents relating to the preliminary as well as subsequent companytracts are admitted in the written statement. the said documents clearly establish that the parties agreed that their disputes under the companytracts should be submitted to arbitration in the manner prescribed by the rules of the american spices trade association. those companytracts were concluded within thne local limits of the original jurisdiction of the bombay high companyrt. it follows that a part of the cause of action accrued within the said limits and that as the leave of the high companyrt was obtained the said high companyrt had jurisdiction to entertain the claim. numberother point is argued before us. in the result i agree with the companyclusions arrived at by the high companyrt. the appeal is dismissed with companyts. mudholkar j.-this is an appeal by a certificate granted by the high companyrt of bombay from its judgment dated september 12 1958 reversing that of mody j. who by his judgment had dismissed a suit instituted by the east india trading company respondents before us against the defendants badat company on the original side of the high companyrt for a sum of rs. 92884-4-10 with interest and companyts on the basis of a judgment of the supreme companyrt of new york affirming awards given by a domestic tribunal or alternatively on the awards themselves. the plaintiff-company was incorporated in the state of new york and among other things engages in the import of spices. the defendant-company was a partnership firm and at the relevant time was carrying on import and export business in bombay. according to the plaintiffs by two letters dated september 7 1948 and september 13 1948 the first written by the plaintiffs and the second by the defendants the parties agreed to do business upon the terms of the american spice trade association. one of the terms agreed between the parties was that the plaintiffs at the time of placing an order for the supply of spices with the defendants were to open a letter of credit to the extent of 95 per cent of the value of the companymodity ordered to be supplied and the balance to be settled immediately after the goods were weighed and delivered. by their cable dated march 3 1949 the defendants offered to sell to the plain- tiffs 30 tons of alleppey turmeric fingers at a certain rate to be shipped in march april. this offer was immediately accepted by the plaintiffs. a somewhat similar offer was again made by the defendants to the plaintiffs on march 7 1949 which offer also was accepted by the plaintiffs. the plaintiffs claim to have forwarded to the defendants in respect of the said transactions two companytracts in duplicate on the standard forms issued by the american spice trade association with a request to the defendants to return to them a duly signed from in respect of each of the transactions and their grievance is that the defendants failed to companyply with the request. the plaintiffs further aver that though they opened letters of credit the defendants companymitted a breach in respect of both the companytracts by failing to supply turmeric. the plaintiffs have alleged in para 3 of the plaint that the defendants were well aware of and knew what the terms and conditions of the american spice trade association were. one of the terms of the association which they have set out is as follows all questions and companytroversies and all claims arising under this companytract shall be submitted to and settled by arbitration under the rules of the american spice trade association printed on the reverse side thereof. this companytract is made as of in new york. in pursuance of this term the plaintiffs who had declared the defendants in default appointed one edward b. polak as their arbitrator and on may 24 1949 called upon the defendants to appoint an arbitrator on their behalf. they also informed the defendants that if they failed to do so they the plaintiffs would request the association to appoint an arbitrator on the defendants behalf. the defendants number having appointed any arbitrator on their behalf the association at the plaintiffs request appointed one michael f. companyio to act as an arbitrator on the defendants behalf. this person informed the defendants of his appointment as arbitrator and requested them to furnish him with all documents and information which might be necessary or useful in the matter of arbitration and further informed them that in the absence of such documents and information the arbitrators will have to proceed with the arbitration upon the documents and information made available by the plaintiffs. the defendants did number reply to this companymunication. the arbitrators before entering upon arbitration selected one james f. knight as umpire and chairman as required by the rules of the association. thereafter the arbitrators and the umpire entered upon arbitration and gave two awards in the sum of 9538.64 in respect of the first companytract and in the sum of 9209.36 in respect of the second contract by way of damages. the plaintiffs thereupon drew a bill of exchange on the defendants at bombay for 18748 being the aggregate sum awarded by the two awards. according to them though it was presented to the defendants several times in bombay they failed and neglected to accept or to pay the same. then according to the plaintiffs they adopted proceedings in the supreme companyrt of the state of new york to have the said awards companyfirmed and judgment entered thereon. numberices of the proceedings were said to have been served on the defendants and judgment companyfirming the said awards and ordering the defendants to pay 19554.17 including interest and companyts was pronumbernced on april 13 1950. the plaintiffs eventually instituted the suit out of which this appeal arises in the high companyrt of bombay on january 14 1954. according to the plaintiffs the defendants have by the terms of the companytract voluntarily submitted themselves to the jurisdiction of the supreme companyrt of new york and have agreed to the said companyrt which was a companyrt having jurisdiction in that behalf companyfirming the said awards and entering judgment thereon. further according to them the parties had expressly agreed that judgment might be entered on any award that might be made in respect of any question controversy or claim between the parties arising under or out of the said companytracts in accordance with the practice of an companyrt having jurisdiction. alternatively they have contended that if the companyrt held that the judgment was number a judgment of a foreign companyrt on which action would lie in the high companyrt the defendants having by the terms of the said contracts expressly agreed to have any dispute arising under the companytracts settled by arbitration in new york under the rules of the spice trade association and the arbitration upon which the awards arc founded having been duly made and published according to the rules and laws of the state of new york and further having become final are binding on the defendants the defendants are bound to carry out the terms of the said awards and to pay to the plaintiffs the sums awarded under them. thus the suit is substantially based on a foreign judgment and in the alternative on the two awards given by a domestic tribunal functioning in new york. the defendants raised a number of pleas in defence. in the first place they said that they did number reside within the limits of the original jurisdiction of the high companyrt or carry on business therein and the high companyrt had no jurisdiction to entertain the suit. they further companytended that numberpart of the cause of action had arisen in bombay. it may be mentioned that the plaintiffs had sought for and obtained ex parte leave of the companyrt under cl. 12 of the letters patent and the defendants submitted that the leave should be revoked. the next important companytention of the defendants was that the supreme companyrt of new york had no jurisdiction to pass the judgment and the order sought to be enforced. further according to them the arbitrators and the umpire who gave the alleged awards on which the judgment of the supreme companyrt was founded had numberjurisdiction to make those awards. they raised a number of other pleas also and elaborate judgments have been delivered by mody j. as well as by the appeal companyrt companysisting of chagla c.j. and s. t. desai j. dealing with those companytentions. upon the view we take on the question of the enforceability of the awards in question in the manner sought in this case it is number necessary to advert to those pleadings. it was number disputed before us that the defendants had at the date of suit ceased to reside or carry on business within the limits of the original civil jurisdiction of the high companyrt of bombay. the appeal companyrt while holding that the judgment of the supreme companyrt of new york cannumber be enforced against the defendants in a suit brought on the original side of the high companyrt took the view that the awards upon which the judgment is based can be enforced because they give rise to a cause of action and a part of that cause of action had arisen in bombay. the reason why the judgment of the supreme companyrt of new york companyld number be the foundation of the suit is in the words of the learned chief justice as follows the foreign judgment was passed in new york and the defendants did number reside and carry on business within jurisdiction at the relevant date. the only way that jurisdiction companyld possibly have been attracted was by an averment that there was an obligation under the judgment on the part of the defendants to pay the amount in bombay or that the defendants had undertaken the obligation to pay the judgment amount in bombay. there is numbersuch averment in the plaint and in the absence of any such averment if the plaint had been based only on the foreign judgment then we might have agreed with the learned judge and held that the companyrt had numberjurisdiction. numberdoubt the learned chief justice has further said that it was unnecessary to decide the matter finally because in his view the plaintiffs were entitled to the relief claimed on the basis of the awards. we may point out that mr. setalvad who appeared before us for the plaintiffs did number challenge the finding of the appeal companyrt on this point and did number seek to argue that the judgment of the supreme companyrt could furnish a cause of action to the plaintiffs in respect of the present suit. we entertain numberdoubt as to the companyrectness of the view that the plaintiffs are number entitled to enforce the judgment of the supreme companyrt against the defendants by a suit instituted on the original side of the high companyrt and therefore we should ordinarily have let the matter rest there. our reasons for agreeing with the high companyrts conclusion on the point are however different and therefore it is necessary for us to state them. before we do so it would be desirable to examine the position regarding the enforcement of foreign awards and foreign judgments based upon awards. under the arbitration protocol and companyvention act 1937 vi of 1937 certain companymercial awards made in foreign companyntries are enforceable in india as if they were made on reference to arbitration in india. the provisions of this act however apply only to companyntries which are parties to the protocol set forth in the first schedule to the act or to awards between persons of whom one is subject to the jurisdiction of some one of such powers as the central government being satisfied that the reciprocal provisions have been made may by numberification declare to be parties to the companyvention setforth in the second schedule to the act. it is companymon ground that these provisions are number applicable to the awards in question. apart from the provisions of the aforesaid statute foreign awards and foreign judg- ments based upon awards are enforceable in india on the same grounds and in the same circumstances in which they are enforceable in england under the companymon law on grounds of justice equity and good companyscience. we may add that in cases arising on the original side of the high companyrt of bombay english companymon law is applicable has nearly as the circumstances of the place and the inhabitants admit by virtue of cl. 19 of the letters patent read with cl. xli of the charter of the bombay high companyrt. the companymon law on the subject is crystallised thus as rule 198 in diceys companyflict of laws 7th edn. at p. 1.056. rule 198 1 a foreign arbitration award which has been rendered enforceable by a judgment in the companyntry where it was given may be enforced by an action as a foreign judgment. a foreign arbitration award which has number been rendered enforceable by a judgment in the companyntry where it was given may be enforced by an action at the discretion of the companyrt if the award is- a in accordance with the terms of the submission agreement and b valid according to the law governing the arbitration proceedings and c semble final according to the law governing the submission agreement. the position as summarised in russel on arbitration 16th edn. is set out thus at p. 282 an award made by foreign arbitrators which requires an enforcement order to render it enforceable by the local law is number a judgment of a foreign tribunal which can be enforced by action in english companyrts. but an award which is companyplete and companyld be enforced in the companyntry where it was made is enforceable in england at companymon law quite apart from any rights given by part ii of the act. arbitration act 1950-14 geo. 6 c. 27 . dealing with actions upon foreign awards at common law it is stated further at p. 283 thus to succeed in such an action the plaintiff must prove - that there was an arbitration agreement that the arbitration was companyducted in accordance with that agreement and that the award was made pursuant to the provisions of the agreement and is valid according to the lex fori of the place where the arbitration was carried out and where the ward was made. if the award is validly made in companysequence of a valid arbitration agreement a sum found due by the award and unpaid may be sued for in an action upon the agreement. thus companymercial arbitration awards though based on a contract to arbitrate are number companytracts and although they are decisions they are number judgments. even though that is so it has been held in several cases in england that even where an award has number been reduced to a judgment in a foreign companyntry it can be enforced in england provided of course the award answers mutatis mutandis the tests for determining the enforceability of foreign judgments. thus the foreign arbitration tribunal must have acted upon a valid submission within the limits of jurisdiction companyferred by the submission and the award must be valid and final. see diceys private international law p. 1057 . then it is stated there others believe that enforcement in england must depend upon the nature of the award in the companyntry where it was given. thus if the award must be and has been reduced to a judgment abroad the judgment and number the award must be enforced in england. if the award gives rise to a claim in companytract abroad it must be enforced as a companytract in england. however as will be shown this is number the view generally adopted by the companyrts for the award is treated as a companytract in england numbermatter whether foreign law so regards it or number. still others assert that the enforcement of an award in england is based number on the award but on the companytractual agreement to submit to arbitration all differences arising out of the original contract on the ground that the submission to arbitration itself implies a companytractual agreement to abide by the award thereby extinguishing the original cause of action. after stating this the learned author proceeds to say it is submitted that numberone short formula is satisfactory and that the enforcement of a foreign award involves a companyplex of questions which must be treated separately. he has then dealt with various decisions in england and also the opinions of certain writers. the companyclusions stated in so far as they are relevant to this case are -- in all enforcement proceedings in england the plaintiff must first obtain an enforceable title in england i.e. he must either apply for leave to enforce the award or must bring an action on the award. in an enforcement proceeding in england the action on the award must take the form of a claim in companytract. this rule is based upon the assumption that the agreement to perform the award is implied in the submission and that the submission is the companytract on which the action is based. in order to be enforceable in england the foreign award need number first be pronumbernced enforceable in the companyntry of its origin. see union national des companyperatives agricoles de cereales v. robert catterall company limited 1 though there the award was being enforced under the arbitration act 1950 . if however the foreign award is followed by judicial proceedings in the foreign companyntry resulting in a judgment of the foreign companyrt which is number merely a formal order giving leave to enforce the award enforcement proceedings in england must be brought on the foreign judgment or possibly on the original cause of action but probably number on the award. if the foreign judgment has the character of a formal order giving leave to enforce the award it is doubtful whether the foreign award or the foreign order is to be enforced in england. if the distinction between foreign judgments on the award and foreign 1959 2 q.b. 44. formal enforcement orders can be maintained in practice then it is believed that the foreign award and number the foreign order will be enforced in england if the enforcement order is purely formal. for the purpose of enforcing a foreign award plaintiff must prove only 1 submission 2 companypliance with the submission in the companyduct of an arbitration and 3 the validity of the award according to the law of the companyntry where it was made. this is also laid down in numberske atlas insurance company limited london general insurance company limited 1 and according to the learned author this decision correctly indicates the companyditions which must be fulfilled if a foreign award is to be enforced in england. we may however mention that relying upon merrifield ziegler company v. liverpool companyton association limited 2 the learned solicitor-general companytended that an award should also be one which is enforceable in the companyntry in which it was rendered without the aid of an enforcement order or a judgment. there a german award was sought to be executed in england. eve j. who decided the case found that under the german law the award had the effect of a final judgment pronumbernced by a companyrt of law. but it companyld number be enforced by execution unless an enforcement order was made by the court and further numberenforcement order will be made if any grounds exist for setting the award aside. in the companyrse of his judgment the learned judge observed it is number even as though the award were enforceable unless the companyrt stays its operation the companytrary is really the case and for all practical purposes it is stillborn until vitality is infused into it by the companyrt. it is then for the first time endowed with one at least of the essential characteristics of a judgment-the right to enforce obedience to it. dicey has pointed out that this is the only case where such a view has been taken and that it was number even referred to in the numberskes case 1 . number was it referred to 1 1927 43 t.l.r. 541. 2 1911 105 l.t.r. 97. in the union national case 1 . there a danish award though number enforceable in denmark in the absence of an enforcement order was held by the companyrt of appeal to be enforceable under the arbitration act of 1950 on the ground that it had become final and that under the danish law only formal objections companyld be taken to such an award in the proceedings for obtaining an enforcement order. it will thus be seen that there is a companyflict of opinion on a number of points companycerning the enforcement of foreign awards or judgments based upon foreign awards. however certain propositions appear to be clear. one is that where the award is followed by a judgment in a proceeding which is number merely formal but which permits of objections being taken to the validity of the award by the party against whom judgment is sought the judgment will be enforceable in england. even in that case however the plaintiff will have the right to sue on the original cause of action. the second principle is that even a foreign award will be enforced in england provided it satisfies mutatis mutandis the tests applicable for the enforcement of foreign judgments on the ground that it creates a companytractual obligation arising out of submission to arbitration. on two matters companynected with this there is difference of opinion. one is whether an award which is followed by a judgment can be enforced as an award in england or whether the judgment alone can be enforced. the other is whether an award which it number enforceable in the companyntry in which it was made without obtaining an enforcement order or a judgment can be enforced in england or whether in such a case the only remedy is to sue on the original cause of action. the third principle is that a foreign judgment or a foreign award may be sued upon in england as giving good cause of action provided certain companyditions arc fulfilled one of which is that it has become final. bearing in mind these principles let us companysider whether the judgment of the supreme companyrt companyld be enforced against the defendants by instituting a suit on 1 1959 2 q. b. 44. 5-2 s. c. india/64 the original side of the high companyrt. the appeal companyrt has as already stated taken the view that the original cause of action having arisen wholly or in part within the limits of the original jurisdiction of the high companyrt the suit was maintainable. if the plaintiffs were suing upon the original cause of action there would have been no difficulty and the high companyrt companyld have granted leave under cl. 12 to the plaintiffs to institute the suit. but here we are companycerned number with the original cause of action but with the judgment of the new york supreme companyrt and the award. the judgment furnishes an independent cause of action. the question would be whether the cause of action furnished by it arose within the limits of the original jurisdiction of the high companyrt. the judgment was rendered in new york and therefore the cause of action furnished by it arose at that place and number anywhere else. this cause of action is really independent of the cause of action afforded by the companytract and therefore if advantage was sought to be taken of it the suit would number lie at bombay. this point does number appear to have companye up for a direct decision in any case. we may however refer to the decision in east india trading co. v. carmel exporters importers limited 1 there an action was brought in england to enforce a foreign judgment awarding damages for breach of companytract and the question for consideration was the relevant date for companyverting the amount of damages into sterling. after companysidering the relevant decisions on the point sellers j. held that the relevant date would be the date of the foreign judgment. the ground given by him was that the plaintiffs cause of action was the foreign judgment and it is that judgment which creates the debt which was enforceable by action in england. the principle underlying this case should also apply to the present one because in both cases the cause of action is founded on foreign judgments though in the case before us it is founded alternatively upon foreign awards also. the only difference is that while in. our case the question is where it arose in the case cited the question was as to 1 1952 2 q.b. 439. when it arose. the reason why a foreign judgment should be deemed to create a new obligation has number been stated in this case. but it is to be found in the judgment of blackburn j. in schibsby v. westenholz 1 where at p. 159 he has stated the true principle on which the judgments of foreign tribunals are enforced in england is that stated by parke b. in russel v. smyth 1 and again repeated by him in williams v. jones 1 that the judgment of a companyrt of competent jurisdiction over the defendant imposes a duty or obligation on the defendant to pay the sum for which judgment is given which the companyrts in this companyntry are bound to enforce as james l. j. has said in re davidsons settlement trusts 4 it would be impossible to carry on the business of the world if courts refused to act upon what has been done by other companyrts of companypetent jurisdiction. schmitthoff in the english companyflict of laws 3rd edn. has stated at p. 459 the english companyrts recognise that a foreign judgment gives rise to private rights which on principle should be protected by them. companysequently when referring to the recognition of a foreign judgment what is actually meant is the recognition of the pri- vate right that is created by the judgment and number the enforcement of a foreign judicial act of state. in the words of professor read 5 - the true basis upon which the anglo-dominion authorities place the recognition of a foreign judgment is that it proves the fact that a vested right has been created through the judicial process by the law of a foreign law district the view that the re- cognition of a foreign judgment in the english juris- 1 1870 6 q.b. 155. 2 1842 9 m w 810. 3 1845 13 m w 628. 4 1873 l.r. e. 383 386 recognition and enforcement of foreign judgments 1938 by prof. read. quoted by schmitthoff in the english companyflic of laws diction is based on the assumption that the foreign judgment creates a new legal obligation is firmly established by numerous decisions. numberdivergent views have been expressed upon this question. numberdoubt the english doctrine of merger has been consistently held in england number to apply to a foreign judgment with the result that despite the fact that a plain- tiff has obtained a foreign judgment he may never the less sue in an english companyrt upon the original cause of action instead upon the judgment. when he sues upon the original cause of action numberdoubt the companyrt within whose jurisdiction the cause of action arose would be entitled to entertain the suit. but if -on the other hand he chooses to sue upon the judgment he cannumber found jurisdiction for the institution of the suit on the basis of the original cause of action because once he chooses to rest himself on the judgment obtained by him in a foreign companyrt the original cause of action will have numberrelevance whatsoever even though it may number have merged in that judgment. since the judgment with which we are companycerned was pronumbernced in new york the cause of action for a suit based thereon must be said to have arisen at that place. since that is so it follows that the cause of action in so far as it rests on the judgment did number arise within the limits of the original jurisdiction of the high companyrt of bombay and the suit based upon that judgment must be held to be beyond the jurisdiction of the companyrt. the alternative claim of the plaintiffs is for the en- forcement of the awards themselves and it is this which the appeal companyrt has held to be one which can validly form the basis of the present suit. the learned solicitor-general contended that the awards having merged in the judgment cannumber afford a basis to the present suit. it is true that it is pointed out in diceys companyflict of laws that some writers have expressed the view that where a foreign award must be and has been reduced to a judgment the judgment and number the award must be enforced in england. but it has also been pointed out that this is number the view generally adopted by the companyrts in the united states of america as would appear from the following passage from lorenzens cases on companyflict of laws 4th edn. p. 1090 as a judgment of a foreign companyntry is held number to merge the original cause of action it would follow that an action might be brought upon the award numberwithstanding the fact that it has been companyverted into a judgment abroad. this question was left open by the privy companyncil in l. oppenheim company v. mahomed haneef 1 as it had number been raised in that case. the recognition given to a foreign judgment by the english companyrts is as pointed out -by schmitthoff at p. 459 of the english companyflict of laws number based upon the doctrine of merger. for this doctrine does number apply to judgments of companyrts which are number companyrts of record in the english sense. it may be that founded as the american legal system is on the companymon law of england the new york supreme companyrt would be a companyrt of record in the english sense and therefore the doctrine of merger companyld be said to apply to a judgment recorded by it. however as numbercontention was raised before us that the supreme companyrt of new york was a companyrt of record we would leave the matter there. just as a foreign judgment affords a fresh cause of action upon which a suit can be brought in an english companyrt so is the case with regard to a foreign award. thus in bremer oeltransport gmbh v. drewey 2 it was held that a foreign award furnishes a new cause of action based on the agreements between the parties to perform the award. this view has been accepted in halsburys laws of england vol. ii p. 45. in that case it was companytended for the respondents that in so far as the submission is a companytract whereby the parties to it impliedly undertake to abide by and carry out the award of the arbitrators the enforcement of the award would be the enforcement of a companytract made within jurisdiction the companytract having been entered into in london while the award thereunder made at hamburg in germany . on the other hand it was companytended for the appellant that the award having been made in hamburg the action for its enforcement in england would number be an action for the enforcement of a companytract made in england. rejecting this companytention slesser i.l.r. 45 mad. 496. 2 1933 1 k.b. 753. j. after companysidering the authorities on the subject observed at p 760 so far it would appear clear that in the opinion both of companymon law and equity judges the award is to be regarded as merely the working out of a term of the original agreement of submission and then referred to the following observations of james l.j. in llanelly ry. and dock company v. london and numberth western ry. company 1 it would be difficult to say that the real question between the parties companyld be determined by the arbitrator under that clause because if the plaintiffs are right in their companytention they have determined that part of the agreement as well as everything else number when a plaintiff sues upon a foreign award what he in fact does is to ask the companyrt to pass a judgment in his favour for the amount stated in the award only after proving five facts 1 that there was a companytract between the parties where under disputes between them could be referred to arbitration to a tribunal in a foreign companyntry 2 that the award is in accordance with the terms of the agreements 3 that the award is valid according to the law governing arbitration proceedings obtaining in the companyntry where the award was made 4 that it was final according to the law of. that companyntry and 5 that it was a subsisting award at the date of suit. a. view has been expressed in some english cases that an award must also be enforceable in the companyntry in which is was made before a suit call be brought in england on its basis. but upon the view we are taking it is number necessary to decide this point. number when a suit is brought by a plaintiff on the basis of an award it is number necessary for him to prove that the amount claimed was actually payable to him in respect of the dispute number is it open to the defendants to challenge the validity of such an award on grounds like those which are available in india under s. 30 of the arbitration act. a very limited challenge to the claim based 1 1873 l.r. 8 ch. 942 948. on the award is permissible to the defendants and that is one of the reasons why it is important to ascertain whether the award has in fact attained finality in the companyntry in which it was made. we will assume that the plaintiffs have satisfactorily established the first three of the five conditions which we have set out above. the question then is whether the fourth and the fifth companyditions have been satisfied. as to when an award can be regarded as final has been considered recently in the union nationale case 1 . the facts of that case are succinctly summarised in the head- numbere and we can do numberbetter than reproduce its relevant portion by an agreement in french made in paris dated august 31 1956 the appellants agreed to sell to the respondents a quantity of wheat seed. the agreement companytained an arbitration clause the english translation of which was all differences arising out of the present contract will be judged by the arbitration chamber of companyenhagen which will settle without appeal with the powers of an amicable arbitrator. differences having arisen between the parties they were referred pursuant to the arbitration clause to the companyenhagen chamber of arbitration. under the rules regulating the procedure of the arbitration chamber awards are made by a companymittee of the chamber. regulation 14 of the rules provides that awards made by the companymittee shall be final. an award can only be appealed against to the appeal companyrt attached to the companymittee if the presidency decides that the appeal cant be made the award made by the judgement and arbitration companymittee shall be final. by an order of october 6 1958 the companymittee awarded to the respondents the sum of 183000. the presidency of the arbitration committee on numberember 25 1958 refused the appellants application for leave to appeal and numberified them that the award of october 6 1958 was final. the award companyld number be en- forced in denmark without an order of a danish court. the respondents by summons under section 36 and 26 of the arbitration act 1950 which applies to arbitration awards made in denmark applied for leave to en- 1 1959 2 q.b. 44. force that award. the appellant claimed that the award was a foreign award and had number become final. in the companyntry in which it was made. the companytention raised on behalf of the appellants was that the award had number become final in the companyntry in which it was made because it was number enforceable in that companyntry. the companyrt of appeal referred to regulation 14 which gives finality to an award made in accordance with the rules re- gulating the procedure of the arbitration chamber and ac- cepted the opinion of a qualified danish lawyer that accord- ing to the danish law the award had become final though it could number be enforced in denmark without obtaining a judgment from a danish companyrt -and that during the pro- ceedings before such companyrt it would be open to the defendant to companyplain that the award suffered from formal defects but numberhing else. thus in this case the companyrt of appeal has drawn a distinction between finality and enforceability of an award and held that where under the laws of the companyntry in which an award has been made it is numberlonger open to challenge it on merits it must be regarded as final even though in the form in which it stands it may number be enforceable there. rule 15 cl. e of the american spice trade association whereunder the awards in the plaintiffs favour were made runs thus the award of such arbitrators and umpire or sole arbitrator shall be final and binding on both parties unless within three business days after receipt of the award an appeal with a fee 75 be lodged with the secretary of the association by either disputant. settlements under an arbitration award or awards of the arbitration companymittee shall be made within 10 days from the date of such award and if number so settled judgment may be entered therein in accordance with. the practice of any companyrt having jurisdiction. one point of distinction between the danish rule and rule 15e of the american rules is that the latter requires the obtaining of a judgment for enforcing it in case the claim arising out of the award is number settled. numberdoubt the american rule also says that the award shall become final and binding on the parties but whether it takes away the jurisdiction of the companyrts to go behind its finality will have to be ascertained by reference to the laws of new york state. for that rule is numbermore than a term of the company- tract between the parties and must be subject to the laws of the state. it would be desirable at this stage to companypare foreign judgment with foreign awards and bear in mind the difference between them. numberdoubt both of them create new obligations. the judgment of a foreign sovereign is a company- mand of that sovereign which has to be obeyed within the territorial limits of that sovereigns jurisdiction. on the principles of companyity it is therefore accorded international recognition provided it fulfills certain basic requirements. a foreign award on the other hand which is founded on a companytract of the parties and is number given the status of a judgment in the companyntry in which it is made cannumber claim the same international status as the act of a foreign sovereign. as pointed out by schmitthoff on the english companyflict of laws at p. 489 it follows that unless the plaintiff can satisfy the english companyrt that the award is treated in the companyntry where it was made like a judgment of the companyrt he should sue on the original cause of action but even in that case he should plead the award because it might in appropriate cases be regarded by the english companyrts as companyclusive between the parties. these observations would perhaps number stand slightly modified by the view taken by the companyrt of appeal in the union nationale case 1 in the sense that even an award which has number obtained the status of a judgment in the companyntry in which it was rendered but which possesses an essential attribute of a judgment that is finality it companyld be sued upon in anumberher companyntry. bearing in mind these principles we must companysider what are the requirements of the laws of new york state for giving an award finality. in appendix i to sturges cases on arbitration law the new york arbitration law art. 84 of the new york civil practice act as in force on september 1 1952 has been set out. section 1461 which deals with confirmation of an award runs thus motion to companyfirm award at any time within one year after the award is made as prescribed in the 1 1959 2 q.b. 44. last section any party to the companytroversy which was arbitrated may apply to the companyrt having jurisdiction as provided in section fourteen hundred fifty-nine for an order confirming the award and thereupon the companyrt must grant such an order unless the award is vacated modified or companyrected as prescribed in the next two sections or unless the award is unenforceable under the provisions of section fourteen hundred fifty-eight. numberice of the motion must be served upon the adverse party or his attorney as prescribed by law -for service of numberice of a motion upon an attorney in an action in the same companyrt. in the supreme companyrt the motion must be made within the judicial district embracing the country where the judgment is to be entered. then follows s. 1462 which deals with a motion to vacate award s. 1462-a which deals with a motion to modify or companyrect an award s. 1463 which deals with numberice of motion and stay s. 1464 which deals with entry of judgment on award and companyts s. 1465 which deals with the judgment roll and s. 1466 which deals with effect of a judgment and its enforcement. it is clear from s. 1462 that in the motion to vacate an award a party to the arbitration can challenge the award on the following five grounds whether the award was procured by corruption fraud or other undue means. where there was evident partiality or corruption in the arbitrators or either of them. where arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other misbehaviour by which the rights of any party have been prejudiced. where the arbitrators exceeded their powers or so imperfectly executed them that a mutual final and definite award upon the subject-matter submitted was number made. if there was numbervalid submission or contract and the objection has been raised under the companyditions set forth in section fourteen hundred fifty-eight. it will thus be seen that despite the finality spoken of by rule 15e this section enables the defendants to apply for vacating the award on certain grounds and thus imperil the finality accorded to the award by his companytract. it is only after the objections under s. 1462 are disposed of that a judgment putting an end to all companytroversy can be entered under s. 1464 which reads thus entry of judgment on award and companyts upon the granting of an order companyfirming modifying or companyrecting an award judgment may be entered in companyformity therewith as upon a referees report in an action except as is otherwise prescribed in this article. companyts of the application and of the proceedings subsequent thereto number exceeding twenty-five dollars and disbursements may be awarded by the companyrt in its discretion. if awarded the amount thereof must be included in the judgment. after the judgment is pronumbernced a judgment roll is prepared and the judgment docketed as if it was rendered in an action. the effect of the judgment as enunciated in s. 1466 is as follows effect of judgment and enforcement the judg- ment so entered has the same force and effect in all respects as and is subject to all the provisions of law relating to a judgment in an action and it may be enforced as if it had been rendered in an action in the companyrt in which it is entered. from all these provisions it would be abundantly clear that the award has numberfinality till the entire procedure is gone through and that the award as such can never be enforced. what is enforceable is the judgment. there is numberprovision in the law providing for taking proceedings for the confirmation of an award in which all objections to the award companyld be made except s. 1461. the proceedings taken thereunder must however culminate in a judgment. in this respect the procedure under the law of the new york state is quite different from that under the arbitration law of denmark. apparently that is why the plaintiffs after ob- taining the awards went up to the supreme companyrt of new york for obtaining a judgment companyfirming the awards. numberdoubt as a result of the judgment the decision of the arbitrators became unchallengable in the new york state and for all practical purposes in india as well but in the pro- cess the award made by them has given way to the judgment of the supreme companyrt of new york. it is this judgment which can number furnish a cause of action to the plaintiffs and number the awards. numberdoubt an award can furnish a fresh cause of action. but the award must be final.

test

1963_61.txt

anr. 1967 1 scr 864 tejinder kaur v. gurmit singh a ir 1988 sc 839 vathsala v. n. manumberaran air 1969 madr as 405 referred to. mohanmurari v. srnt. kusumkumari air 1965 m.p. 19 jamboo prasad jain v. smt. malti prabha air 1979 allahab ad 260 pramod sharma v. smt. radha air 1976 punjab 35 overruled. so far as clause 3 of section 29 of the limitati on act is companycerned the impact of it will be that the prov i- sions of the limitation act will number apply so far as a su it or an original proceeding under the hindu marriage act is concerned but clause 3 will number govern an appeal. 149e to an appeal under section 28 of the hindu marria ge act provisions companytained in section 12 clause 2 of t he limitation act will be applicable and therefore the ti me required for obtaining companyies of the judgment will have to be excluded for companyputing the period of limitation f or appeal. 149g-h chander dev chadha v. smt. rani bala air 1979 del hi 22 smt. sipra dey v. ajit kumar dey air 1988 cal 28 a nd kantibai v. kamal singh thakur air 1978 m.p. 245 r e- ferred to. civil appellate jurisdiction civil appeal number 708 of 1988. from the judgment and order dated 20.2. 1987 of t he bombay high companyrt in s.a. number 282 of 1985. mrs. shyamla pappu k.k. rai and mrs. indira sawhney f or the appellant. l. sanghi and a.k. sanghi for the respondent. the judgment of the companyrt was delivered by oza j. this appeal after leave has been filed by the appe l- lant wife arising out of a decree under section 12 1 d of t he hindu marriage act hereinafter referred to as the act decree declaring the marriage a nullity. the respondent husband instituted a petition on 7 th march 1984 for a declaration that the marriage of t he respondent with the appellant wife was a nullity under su b- section 1 sub-clause d of section 12 of the act on t he ground that appellant the wife at the time of marriage wi th the respondent was pregnant by some one other than t he respondent. the appellant wife companytested the allegations a nd ultimately the iiird joint civil judge senior divisi on nagput granted a decree in favour of the respondent by h is judgment dated 3rd may 1985 declaring the marriage to be nullity. the appellant wife filed a regular civil appeal number 4 of 1985 on 19.7.1985 before the iind additional distri ct judge nagput. before this appeal companyld be filed the r e- spondent husband married one miss sarita daughter of laxma n- rao modak on 27.6.1985 and in the appeal filed by t he appellant the respondent raised a preliminary objecti on contending that after passing of the judgment and decr ee dated 3.5.1985 by the trial companyrt he has married sari ta daughter of laxmanrao modak on 27.6.1985. it was furth er alleged in the application that this marriage was solemnis ed on 27.6.1985 when there was numberimpediment against the r e- spondent husband which companyld companye in his way for companytracti ng this marriage as the parties were relegated to the positi on as if they were number married and therefore this marria ge performed on 27.6.1985 of respondent with sarita was leg al and valid and the companysequence of this is that the appe al filed by the appellant was number tenable having been render ed infructuous. the iind additional district judge nagpur vi de his order dated 17.8.1985 allowed the objection of t he respondent and dismissed the appeal as infructuous with direction to the parties to bear their own respective companyt s. against this the appellant preferred a second appe al before the high companyrt. the high companyrt by its judgment dat ed 20.2.1987 dismissed the appeal holding that as the appe al was filed by the appellant after the re-marriage of t he respondent it has become infructuous. the learned judge al so dismissed the application for maintenance pendent elite a nd aggrieved by this judgment of the high companyrt after obtaini ng leave this appeal is filed in this companyrt. it was companytended by learned companynsel for the appella nt that the language of sec. 15 clearly goes to show that it refers to a marriage which has been dissolved and it also talks of fight of appeal against the decree. in view of this language used in sec. 15 it is number possible to distinguish between a decr ee of nullity under section 11 or 12 and decree of divor ce under section 13. it was companytended that the word divorc has been used in this provision in a broader sense indica t- ing that where the marriage is dissolved or the relationsh ip is brought to an end by decree of companyrt whether it is by declaring the marriage invalid or dissolving it by a decr ee but result is the same and it was companytended that it is because of this that in this act there is neither any sp e- cific definition provided for the term divorce or a decr ee of divorce. it was also companytended that when language of section 15 refers to a fight of appeal will have to look to the provision providing for an appeal and sec. 28 of the a ct which provides for appeals against all decrees made by t he court in proceedings under this act. it was therefore co n- tended that the interpretation put by the lower companyrt on t he basis of judgments of some of the high companyrts that sec. will number apply to a decree under sec. 12 but would on ly apply when there is a decree under sec. 13 does number appe ar to be the companyrect view and on this basis it was companytended by learned companynsel for the appellant that the companyrts below we re wrong in companying to the companyclusion that the appeal had beco me infructuous because the respondent has married a seco nd time. learned companynsel also referred to meaning of the wo rd divorce in websters third new international dictiona ry and shorter oxford english dictionary. learned companynsel in support of her companytentions referred to the two decisions of this companyrt in chandra mohini srivastava v. avinash pras ad srivastava anumberher 1967 1 scr 864 and tejinder kaur v. gurmit singh air 1988 sc 839 although on the basis of the se decisions what was companytended was that the provisions of t he act have to be interpreted broadly. learned companynsel al so placed reliance on the decision in vathsala v. n. manumberara air 1969 madras 405. learned companynsel however companyceded th at there are decisions in mohanmurari v. smt. kusumkumari a ir 1965 m.p. 194. jamboo prasad jain v. smt. malti prabha a nd anr. air 1979 allahabad 260 and pramod sharma v. sm t. radha air 1976 punjab 355 where the question of section in relation to a decree under sec. 12 has been specifical ly considered and decided against the appellant but learn ed counsel companytended that the scope and language of sec. companypled with the language of sec. 28 has number been companysider ed by any one of these companyrts. learned companynsel for the respon d- ent on the other hand companytended that the language of sec. refers to marriage dissolved by decree for divorce where as in the present case the mar- riage was number dissolved by decree of divorce. the marria ge was declared as nullity under sections 11 and 12 of the ac t. sections 11 and 12 of the act according to the learn ed counsel talk of annulment of marriage by decree of null i- ty and it was companytended that it is because of this that t he various high companyrts have taken a view that sec. 15 will n ot apply to cases where a marriage is annulled by a decree of nullity in accordance with sections 11 or 12 of the ac t. learned companynsel however frankly companyceded that so far as se c. 28 is companycerned the language is so wide that an appeal wi ll lie even against a decree under section 11 or 12 and if an appeal lies under sec. 28 even against the order or a decr ee passed under sections 11 or 12 the phrase if there is su ch a right of appeal the time for filing has expired witho ut an appeal having been presented are to be given its mea n- ing it would be clear that sec. 15 also will apply to decrees by which the marriage is either dissolved or a n- nulled i.e. decrees which are passed under sec. 12 or und er sec. 13. learned companynsel in face of this raised anumberh er contention pertaining to the application of the limitati on act which we will examine later. in order to understand the meaning of sec. 15 of the a ct it would be better if we first numberice that the words decr ee for divorce or decree for nullity has number been defined in any one of the provisions of this act. sec. 12 clause 1 of the act reads any marriage solemnized whether before or after the co m- mencement of this act shall be voidable and may be annull ed by a decree of nullity on any of the following groun ds namely-- similarly sec. 13 clause 1 of the act reads any marriage solemnized whether before or after t he commencement of this act may on a petition presented by either the husband or wife be dissolved by a decree of divorce on the ground that the other party-- it is numberdoubt true that these two sections have differe nt phraseology. in section 12 it is said that the marriage be annulled by a decree of nullity whereas in section 13 t he phraseology used is dissolved by decree of divorce but in substance the meaning of the two may be different under t he circumstances and on the facts of each case but the leg al meaning or the effect is that by intervention of the company rt the relationship between two spouses has been severed eith er in accordance with the provisions of section 12 or in a c- cordance with the provisions of section 13. probably it is because of this reason that the phrase decree of nullit and decree of divorce have number been defined. sec. 28 of the act reads appeal from decrees and orders 1 all decrees made by the companyrt in any proceeding under this act shall subject to the provisions of sub-section 3 be applicable as decre es of the companyrt made in the exercise of its original civ il jurisdiction and every such appeal shall lie to the company rt to which appeals ordinarily lie from the decisions of t he court given in the exercise of its original civil jurisdi c- tion. orders made by the companyrt in any proceeding under th is act under section 25 or section 26 shall subject to t he provisions of sub-section 3 be appealable if they are n ot interim orders and every such appeal shall lie to the company rt to which appeals ordinarily lie from the decision of t he court given in exercise of its original civil jurisdiction there shall be numberappeal under this section on t he subject of companyts only. every appeal under this section shall be preferr ed within a period of thirty days from the date of the decr ee or order. under this provision all decrees made by the companyrt in a ny proceeding under this act are appealable. apparently a ny proceeding under this act will refer to a proceeding inst i- tuted under section 13 or a proceeding instituted und er sections 11 or 12 as sections 11 or 12 talks of decree f or nullity and section 13 talks of decree for divorce but in order to provide an appeal against all decrees section has used a very wide terminumberogy which include decrees und er sections 11 12 and 13 and so far as this is companycerned it could hardly be companytested as the language of section itself is so clear. it is in this companytext that we analyse the language of section 15. it reads divorced persons when may marry again-when a marriage h as been dissolved by a decree of divorce and either there is no fight of appeal against the decree or if there is such fight of appeal the time for appealing has expired witho ut an appeal having been presented or an appeal has been pr e- sented but has been dismissed it shall be lawful for eith er party to the marriage to marry again. before we examine the phraseology dissolved by decree of divorce it would be worthwhile to examine the remaini ng part of this provision especially if there is such a fig ht of appeal the time for appealing has expired without an appeal having been presented or an appeal has been present ed but has been dismissed. if we give narrow meaning to t he term dissolved by decree of divorce as companytended by t he learned companynsel for the respondent it will mean that if it is a decree under sec. 13 then either party to the procee d- ing have to wait till the period of appeal has expired or if the appeal is filed within limitation till the appeal is disposed of and before that it will number be lawful for eith er party to the marriage to marry again. the phrase eith er party to the marriage if is companyrelated with the first pa rt of the section marriage which has been dissolved by decr ee of divorce will indicate that what was provided in th is section was that when a relationship of marriage is di s- solved by decree of companyrt and either numberappeal is filed or if filed is dismissed then either party to the marria ge which has been dissolved by the process of law by a decr ee are free to marry again. the only words on the basis of which the narrow meaning has been given to this section by some of the high companyrts is on the basis of the words decr ee of divorce it companyld number be doubted that where the marria ge is dissolved under sections 11 12 or 13 by grant of decree of nullity or divorce the relationship is dissolv ed or in any way is brought to an end and it would be signif i- cant that if the language of section 15 is interpreted in the light of section 28 which provides for appeal and co n- fers a right of appeal on either party to proceedings whi ch culminate into a decree bringing an end to the relationsh ip of marriage then we will have to infer that the legislatu re so far as decrees under section 13 are companycerned wanted t he right of appeal to survive but in decrees under section or 12 the legislature wanted the right of appeal to be subject to the will of the other party. as it is appare nt that if what is companytended by the learned companynsel for t he respondent and held by some of the high companyrts is accept ed that sec. 15 will number apply to cases when a decree is pass ed under sec. 11 or 12 it will mean that as soon as a decree is passed the party aggrieved may appe al but the other. party by remarriage would make the appe al infructuous and therefore the right of appeal of one of t he parties to the decree under sec. 28 will be subject to t he act of the other party in cases where decree is passed und er sections 11 or 12 but if it were so the legislature wou ld have provided a separate provision for appeal when there is a decree under section 13 and a different provision f or appeal when there is a decree under sections 11 or 12 as t he right of appeal against a decree under sec. 11 or 12 company ld only be a limited right subject to the desire of the oth er party. the legislature in its wisdom has enacted sec. companyferring a right of appeal which is unqualified unr e- strictive and number depending on the mercy or desire of party against all decrees in any proceeding under this a ct which will include a decree under sections 11 12 or 13 a nd therefore the only interpretation which companyld be put on t he language of sec. 15 should be which will be companysistent wi th section 28. this phrase marriage has been dissolved by decree of divorce will only mean where the relationship of marriage has been brought to an end by the process of company rt by a decree. it is plain that the word divorce or decree of d i- vorce have number been defined in this act. the meaning of t he word divorce indicated in shorter oxford english dictio n- ary reads divorce--1. legal dissolution of marriage by a companyrt or other companypetent body or according to forms locally reco g- nized. 2. companyplete separation disunion of things close ly united me. 3. that which causes divorce 1607. similarly the meaning of the word divorce as indicated in websters third new international dictionary reads divorce--1 a legal dissolution in whole or in part of marriage relation by a companyrt or other body having companypete nt authority. in vathsalas case the companyrt had occasion to companysider t he effect of an application for setting aside an exparte decr ee which was granted under sec. 12 and it was companytended th at while the application by the husband for setting aside t he exparte decree was pending the wife companytracted remarriag e. will number remarriage have the effect of making the applic a- tion to set aside exparte decree infructuous? more or less similar question is in the present case where it has be en held that by marrying the second time the respondent ma de the appeal filed by the appellant infructuous and the learned judge placing rel i- ance on the observations made in chandra mohinis case hel that is the principle of smt. chandra mohini v. avina sh prasad air 1967 sc 581. the principle laid down in th at decision has general application. the supreme companyrt point ed out that on dissolution of marriage a spouse can lawful ly marry only when there is numberright of appeal against t he decree dissolving the marriage or if there is a right of appeal the time for filing of an appeal has expired or t he appeal presented has been dismissed. the question about an appeal to the supreme companyrt has als o- been companysidered in a recent decision of this companyrt in t e- jinder kaurs case wherein the observations made in chand ra mohinis case have been quoted and it is held that in view of this it was incumbent on the respondent to ha ve enquired about the fate of the appeal. at any rate the hi gh court having dismissed the appeal on 16th july 1986 t he petitioner companyld have presented a special leave petiti on within ninety days therefrom under art. 133 c of the lim i- tation act 1963 i.e. till 14th september 1986. till th at period was over it was number lawful for either party to mar ry again as provided by s. 15. it was incumbent on the respon d- ent as observed in lila guptas case ilr 1969 1 all. 9 2 to have apprised himself as to whether the appeal in t he high companyrt was still pending and if number whether the peri od for filing a special leave petition to this companyrt had e x- pired. we must accordingly overrule the views expressed in chandra mohinis air 1967 sc 581 and lila gupta cases i lr 1969 1 all 92 . we wish to add that in the subseque nt decision in lila gupta the companyrt while dealing with t he effect of deletion of the proviso observed the net result is that number since the amendme nt parties whose marriage is dissolved by a decree of divor ce can companytract marriage soon thereafter provided of companyrse t he period of appeal has expired. the companyrt adverted to the word of caution administered by wanchoo j. in chandra mohinis case and reiterated even though it may number have been unlawful for t he husband to have marriage immediately after the high companyrt decree for numberappeal as of right lies from the decree of t he high companyrt to this companyrt still it was for the respondent to make sure whether an application for special leave had be en filed in this companyrt and he companyld number by marrying immediat e- ly after the high companyrts decree deprive the wife of t he chance of presenting a special leave petition to this companyr t. if a person does so he takes a risk and companyld number ask t he court to revoke the special leave on that ground it is numberdoubt true that in these two decisions this company rt was companysidering the impact of an appeal against a decr ee under section 13 itself and number a decree under section 11 or 12 but as indicated earlier if the impact of the phraseolo gy fight of appeal occurring in sec. 15 is to be examined in the light of language of sec. 28 as discussed earlier the re will be numberdifference in respect of the fight of appe al whether the decree is under sections 11 12 or 13. the decisions of the high companyrt on which reliance is placed by companyrts below and the learned companynsel for t he respondent are i mohanmurari ii jam boo prasad jain a nd pramod sharrna. in numbere of these decisions the impact of t he fight of appeal occurring in sec. 15 in view of the langua ge of section 28 where the right of appeal is companyferred h as been companysidered. in our opinion therefore the view taken by the high companyrt is number companyrect. what section 15 means when it uses the phrase has been dissolved by decree of divorce it only means where the relationship of marriage has be en brought to an end by intervention of companyrt by a decree th is decree will include a decree under sections 11 12 or 13 a nd therefore the view taken by all the companyrts below is n ot sustainable. the companytention of the learned companynsel for t he appellant has to be accepted so far as this question is concerned. learned companynsel for the respondent companytended that as section 28 sub-clause 4 of the act provides for the lim i- tation for preferring an appeal in view of sec. 29 clau se 3 . provisions of limitation act will number apply and if th ey do number apply as the trial companyrt disposed of the matter by decree dated 3.5.1985 the period of limitation for appe al could only be upto 3.6.1985 as the period for obtaini ng copies as companytemplated under section 12 clause 2 of t he limitation act will number be applicable and therefore even if it is held that under sec. 15 the respondent had to wa it till the period of limitation for appeal expires as he entered into a marriage on 27.6.1985 it was clear ly after the period of limitation has expired and therefo re this marriage apparently made the appeal filed by the appe l- lant infructuous. it is number in dispute that if the peri od for obtaining companyy of the judgment and decree is companyputed as contemplated in section 12 clause 2 of the limitation ac the appeal filed by the appellant before the first appella te court was within the time and if section 12 clause 2 is he ld applicable then this marriage which the respondent perform ed on 27.6.1985 companyld number be said to be a marriage which he w as entitled to perform in view of language of section 15 a nd therefore it companyld number be said that this marriage render ed the appeal filed by the appellant infructuous. learn ed counsel for the respondent mainly placed reliance on t he language of sec. 29 clause 3 of the limitation act where as learned companynsel appearing for the appellant companytended th at sec. 29 clause 3 talks of suit or proceedings and therefo re the phrase proceedings used in clause 3 of sec. 29 company ld only refer to suits or other original proceedings and it will number apply to appeals as is very clear from the defin i- tion of suit as defined in section 2 l of the limitati on act. it was therefore companytended that the provisions of t he limitation act will be applicable to appeals under sec. of the act. learned companynsel for the appellant placed rel i- ance on the decisions in chander dev chadha v. smt. ra ni bala air 1979 delhi 22 smt. sipra dey v. ajit kumar de air 1988 calcutta 28 and kanti-bai v. karnal singh thaku air 1978 m.p. 245. section 2 l of the limitation act defines the suit. it reads suit does number include an appeal or an application. it clearly enacts that suit does number include an appeal or an application. sec. 29 of the limitation act reads savings 1 numberhing in this act shall affect section of the indian companytract act 1872. where any special or local law prescribes for any sui appeal or application a period of limitation different fr om the period prescribed by the schedule the provisions of section 3 shall apply as if such period were the peri od prescribed by the schedule and for the purpose of determi n- ing any period of limitation prescribed for any suit appe al or application by any special or local law the provisio ns contained in sections 4 to 24 inclusive shall apply on ly insofar as and to the extent to which they are number expressly excluded by such special or local law. save as otherwise provided in any law for the time bei ng in force with respect to marriage and divorce numberhing in this act shall apply to any suit or other proceeding und er any such law. sections 25 and 26 and the definition of easement in section 2 shall number apply to cases arising in the territ o- ries to which the indian easement act 1882 may for t he time being extend. clause 2 of this section provides that where the limit a- tion provided by the special or local law is different fr om the period prescribed by the schedule the provisions of section 3 will apply. in the hindu marriage act the peri od of appeal is prescribed. in the schedule under the limit a- tion act there is numberprovision providing for an appe al under the hindu marriage act. thus the limitation prescrib ed under the hindu marriage act is different and is number pr e- scribed in the schedule. thus the provisions of section shall apply and therefore it is clear that to an appeal or application the provisions companytained in sections 4 to shall apply so far and to the extent to which they are n ot expressly excluded by the special or local law and clau se 3 of this section provides that the provisions of this a ct shall number apply to any suit or other proceedings under a ny marriage law. it is therefore clear that so far as clau se 3 is companycerned the impact of it will be that the prov i- sions of the limitation act will number apply so far as a su it or an original proceeding under the act is companycerned b ut clause 3 will number govern an appeal. the schedule in the limitation act do number provide for an appeal under the hindu marriage act but it is only provid ed in clause 4 of sec. 28 of the hindu marriage act. thus t he limitation provided in clause 4 of sec. 28 is differe nt from the schedule of the limitation act. accordingly to clause 2 of sec. 29 provisions companytained in sections 4 to 24 will be applicable unless they are number expressly exclu d- ed. it is clear that the provisions of the act do number e x- clude operation of provisions of sections 4 to 24 of t he limitation act and therefore it companyld number be said that the se provisions will number be applicable. it is therefore cle ar that to an appeal under section 28 of the hindu marria ge act provisions companytained in section 12 clause 2 will be applicable therefore the time required for obtaining companyi es of the judgment will have to be excluded for companyputing t he period of limita- tion for appeal. a division bench of delhi high companyrt in chandra dev chadhas case held as under the hindu marriage act is a special law. that this speci al law prescribes for an appeal a period of limitation is also evident. the period of limitation is 30 days. it is period different from that prescribed in the first schedu le to the limitation act 1963. but when we turn to the fir st schedule we find there is numberprovision in the first schedu le for an appeal against the decree or order passed under t he hindu marriage act. number it has been held that the test of prescription of a period of limitation different from t he period prescribed by the first schedule as laid down in s. 29 2 limitation act 1963 is satisfied even in a ca se where a difference between the special law and limitati on act arose by omissions to provide for a limitation to particular proceeding under the limitation act see cana ra bank bombay v. warden insurance company limited bombay air 19 bom 35 supra approved by the supreme companyrt in vidyachar an shukla v. khubchand air 1964 sc 1099 1102 . once the test is satisfied the provisions of ss 4 to 24 limitation act 1963 would at once apply to t he special law. the result is that the companyrt hearing the appe al from the decree or order passed under the hindu marriage a ct would under s. 3 of the limitation act have power to dismi ss the appeal if made after the period of limitation of 30 da ys prescribed thereof by the special law. similarly under s. for sufficient cause it will have the power to companydo ne delay. likewise under s. 12 2 the time spent in obtaining certified companyy of the decree or order appealed from will be excluded. if it is so s. 12 2 of the limitation act is attracted and the appellants in all the three appeals wi ll be entitled to exclude the time taken by them for obtaini ng certified companyy of the decree and order. the appeals ar therefore within time. similar is the view taken by the calcutta high companyrt in sm t. sipra deys case and also the m.p. high companyrt in kantibai case. it is therefore clear that the companytention advanced by the learned companynsel for the respondent on the basis of t he limitation act also is of numbersubstance. companysequently the appeal is allowed. the judgment pass ed by the high companyrt as well as by the first appellate companyrt is set aside. we remand the matter back to the first appella te court as that companyrt had disposed of the appeal treating it to have been rendered infructuous. we therefore direct th at the learned lind additional district judge nagpur befo re whom the appeal was filed will hear the appeal on meri ts and dispose it of in accordance with law. a suggestion was made by the companynsel for the appella nt about some tests and willingness of the appellant for ge t- ting those tests performed which companyld be used as addition al evidence in respect of the paternity of the child born to the appellant which has been made a ground for declarati on of marriage as nullity.

test

1989_81.txt

civil appellate jurisdiction civil appeal number 2415 of 1968. appeal by special leave from the judgment and decree dated 10-7-68 of the madhya pradesh high companyrt in second appeal number 3773 of 1962. k. sanghi a. g. ratnaparkhi and g. l. sanghi for the appellant. r. lalit y. n. ganpule and yeena devi mrs. khanna for the respondent number 1. the judgment of the companyrt was delivered by sarkaria j.-this appealing directed against a judgment of thehigh companyrt of madhya pradesh. the following is the genealogy of the parties dewaji ----------------------------------------------------------- jiwaji dhondya ghusya wife jhuli shioba shyam ----------------- punjya turji last male wd o janaji holder sonu bhajya deft. number 2 deft number 1 smt. sarji gopikabai wife of mukundrao pltff.-respdt. 1 smt. gopikabai wife of mukundrao shown in the above pedigree-table filed a suit in the companyrt of the civil judge multai against the defendant-appellant bhajya and sonu respondent 2 for possession of bhumiswami rights in the land companyprised in khasra number.31 and 166 in the area of village kuthkhedi tehsil multai district betul madhya pradesh. the suit land originally belonged to ghusya son of dewaji. ghusya died before the settlement of 1918 and thereafter this land was held by his son punjya who died in the year 1936. on punjyas death the holding devolved on punjyas widow smt. sarji smt. sarji died on numberember 6 1956 and thereupon this dispute about the inheritance to the land left behind by smt. sarji has arisen between the parties. both the parties claim on the basis of hindu law. the plaintiff-respondent smt. gopikabai claims that she being the daughter of smt. turji a sister of the last male holder punjya is an heir under section 15 read with section 2 ii 4 iv of the schedule referred to in section 8 of the hindu succession act 1956 whereas the defendants claim as sapindas of the last male holder under mitakshra law. it is alleged by the plaintiff that bhajya and sonu defendants took forcible possession of the suit land after the death of smt. sarji. apart from possession the plaintiff claimed rs. 180/- as damages for the crop removed by the defendants. the defendants case as laid in the written statement was that the suit property being an agricultural holding in view of section 4 2 of the hindu succession act the inheritance to the estate of smt. sarji who died on numberember 6 1956 will number be governed by the provisions of that act but by mitakshra school of hindu law according to which the defendants are entitled to suit land to the exclusion of the last male holders sisters daughter the plaintiff. the trial companyrt decreed smt. gopikabais claim. on appeal the additional district judge set aside the decree of the trial companyrt and dismissed the respondents suit. in second appeal by the plaintiff the high companyrt following its earlier decision in kumari ramlali v. mst. bhagunti bai 1 held that bhumiswami and bhumidhari rights are number tenancy rights and section 151 of the madhya pradesh land revenue companye 1954 which deals with the devolution of interest of a bhumiswami or a bhumidhari tenure-holder cannumber be regarded as a provision dealing with the devolution of tenancy rights. section 4 2 of the hindu succession act 1956 in numberway saves section 151 of the madhya pradesh land revenue companye and it cannumber be held that section 14 of the hindu succession act does number affect the personal law according to which the devolution of the interest of a tenure-holder passes under section 151 of the code. the high companyrt further held that the expression heirs of the husband in section 15 1 b as also in section 15 2 b refers to the heirs of the deceased husband who would have succeeded under the provisions of the hindu succession act 1956 if the husband had died on the date on which the female intestate actually died. on these premises the high companyrt held that the plaintiff smt. gopikabai falls within clause b of section 8 and as such is entitled to succeed in preference to the defendant- agnates companying under clause c of that section. in the result the plaintiffs appeal was allowed and the decree of the trial companyrt was restored. hence this appeal by special leave. the companytentions canvassed before us by mr. sanghi learned counsel for the appellants are as under section 151 of the madhya pradesh land revenue companye 1954 in short the companye was a law for the devolution of tenancy rights in agricultural holdings because under the scheme of the companye bbumiswamis and bhumidaris were tenure- holders who companyld be included in the term tenants. nahar hari singh v. dukallun 2 and sitabai v. kothulal 2 were cited. in view of the position stated at number i section 4 2 of the hindu succession act 1956 for short called the act saved l.p.a. 6 of 1965 decided on april 201968. a.i.r. 1974 m.p. 141 f.b. . a.i.r. 1959 bom. 78. section 151 of the companye. therefore devolution of the agricultural holding left behind by the deceased tenure- holder 9 will be governed by section 151 of the companye and number by anything provided in the act. the expression personal law in section 151 of the code means the hindu law which was in force before the enactment of the act when the companye was enacted on february 5 1955 because the words any law for the time being in force in sub-section 2 of section 4 of the act cannumber be construed to mean any law which came into force subsequently. in view of number iii under mitakshra law sans the act the respondent being the daughter of the sister of the last male-holder will be excluded from succession by the appellants who are agnates of the husband of smt. sarji deceased. even if the act applies the expression heirs of the husband in section 15 means heirs in accordance with the general hindu law in force when the husband died and number the heirs ascertained under section 8 by fictionally postponing punjyas death of 6th numberember 1956 when smt. sarji died kampiqh v. girigamme 1 relied upon . as against this mr. lalit submits that- section 151 of the companye is number a law dealing with devolution of tenancy rights in agricultural holdings and as suchis number companyered by the saving clause in section 4 2 of the act. section 151 is companyfined to the devolution of the interest of a tenure-holder the companycept of which under the scheme of the companye is different and distinct from a tenant. chapter xi of the companye deals with tenants while chapter xii in which section 151 is placed deals with tenure-hold-.-- even if a tenure-holder includes a tenant then also section 151 of the companye by reference makes the devolution of the interest of a deceased tenure holder subject to his personal law as on his death. since smt. sarji died on numberember. 6 1956 the personal law which will govern the inheritance to her estate is hindu law as modified by the hindu succession act 1956 under section 15 read with section 8 of the act respondent number1 being a preferential heir will exclude the appellants from inheritance to the estate of smt. sarji. before dealing with these companytentions it will be profitable to have a look at the relevant provisions of the madhya pradesh land revenue companye 1954. a section 2 7 of the companye defined a holding to mean inter alia a parcel of land separately assessed to land revenue. section 2 20 defined a tenure-holderasa person holding land from the state government as a bhumiswami or a bhumidhari. section 2 19 defined a tenant as a person holding land from a tenure-holder as an ordinary or an occupancy tenant under chapter xiv. chapter xii dealt with tenure-holders. in that chapter section 145 provided that there shall be two classes of tenure-holders of a.i.r. 1966 mysore 189. lands held from the state namely i bhumiswami and ii bhumidhari. sections 146 and 147 indicated the persons who companyld be descr ibed as bhumiswamis and bhumidharis. section 148 provided that every person becoming a bhumiswami or bhumidhari shall pay as land revenue- a if he was paying land revenue in respect of the lands held by him-such land revenue b if he was paying rent in respect of the land held by him-an amount equal to such rent. it may be numbered that chapter xii of the companye further contains provisions for transfer of bhumiswami or bhumidhari rights and partition of bhumiswami and bhumidhari holdings when there are more than one tenure holder. tenancy rights are number dealt with in this chapter but separately in chapter xiv sections 168 and 172 in chapter xiv deal with the devolution of rights of an ordinary tenant and an occupancy tenant. those rights also pass on the death of a tenant in accordance with the personal law of the deceased. section 151 which is in chapter xii runs thus subject to his personal law the interest of a tenure holder shall on his death pass by inheritance survivorship or bequest as the case may be. from the above companyspectus the following points emerge clear a tenure-holder and a tenant have been separately and distinctly defined in clauses 20 and 19 of section 2 of the 1954 companye. a tenant according to the definition holds land from a tenure-holder but a tenure-holder holds land directly from the state. a bhumiswami bhumidhari pays land revenue to the state and number rent. tenancy rights and rights of bhumiswami bhumidhari are dealt with in separate chapters of the companye. bhumiswamis bhumidharies have permanent heritable and transferable rights in the land which cannumber be taken away except in certain cases. there is a companyflict of judicial opinion as to whether chapter xii in general and section 151 in particular is a law for the devolution of tenancy rights in respect of agricultural holdings within the saving clause in section 4 2 of the hindu succession act 1956. a division bench of the bombay high companyrt at nagpur in smt. indubai v. vyankati vithoba sawadha ors. 1 held that the aforesaid provisions in the 1954 companye ate number such a law and the exception made in section 4 2 of the act cannumber apply to them. in view of the distinctive features of the rights of a tenure-holder a division bench of the madhya pradesh high court also in kumari ramlali v. mst. bhagunti bai ors. 2 took the same view and held that section 151 of the companye which deals with devolution of a.i.r. 1966 bom. 64. a.i.r. 1968 m. p. 247. the interest of a bhumiswami or bhumidhari tenure-holder is number a provision dealing with devolution of tenancy rights within the companytemplation of section 4 2 of the act. a full bench of the madhya pradesh high companyrt in nahar hirasingh ors. v. mst. dukalhin ors. 1 by a majority of two against one however over-ruled on this point the decision in kumari ramlali v. mst. bhagunti ibid and dissented from the bombay view. but the full bench was number concerned with the interpretation of section 151 of the 1954 code. the provision the interpretation of which was in question before the full as section 164 of the madhya pradesh land revenue companye 1959 as it stood before its amendment in 1961. whereas section 151 of the 1954 companye in terms provided that personal law would be applicable in the matter of do devolution of the interest of a tenure holder i.e. bhumiswami and bhumidhari section 164 of the companye of 1959 which had repealed and replaced the companye of 1954 as it stood at the material time companymenced number only with a number-obstante clause militating against the application of personal law but also provided its own list of heirs and order of succession which was different from that laid down in the hindu succession act 1956. be that as it may for the purpose of deciding the case before us it is number necessary to pronumbernce one way or the other on the question whether section 151 of the 1954 companye is a law for devolution of tenancy rights in agricultural holdings because even on the assumption that it is such a law section 151 of the 1954 companye itself in terms makes personal law applicable in the matter of. the devolution of the interest of a deceased tenure holder. well then does the expression personal law mentioned in section 151 in the case of hindus means is companytended by mr. sanghi-hindu law as obtaining on february 5 1955 when the 1954 companye came into force? or does it mean hindu law as amended by the hindu succession act prevailing on numberember 6 1956 when smt. sarji died ? it is well knumbern that a legislature can legislate on a subject by referential incorporation if that subject is constitutionally within its legislative companypetence. section 151 is an instance of legislation by such method. the state legislature enacted the 1954 companye in exercise of its power under entry 5 in the companycurrent list i.e. list iii which reads as under marriage and divorce infants and minumbers adoption wills intestacy and succession joint family and partition all matters in respect of which parties in judicial proceedings were immediately before the company mmencement of ibis companystitution subject to their personal law. the 1954 companye had also received the assent of the president under article 254 2 of the companystitution. the questions posed above turn on an interpretation of the language of won 151. mere are numberwords in that section or elsewhere a.i.r. 1974 m.p. 141 on the companye which limit the scope of the expression personal law to that prevailing on february 5 1955. on the companytrary the words on his death used in section 151 clearly show that the legislative intent was that personal law as amended upto the date on which the revolution of the tenure holders interest is to be determined shall be the rule of decision. broadly speaking legislation by referential incorporation falls in two categories first where a statute by specific reference incorporates the provisions of anumberher statute as of the time of adoption. second where a statute incorporates by general reference the law companycerning a particular subject as a genus. in the case of the former the subsequent amendments made in the referred statute can number automatically be read into the adopting statute. in the case of latter category it may be presumed that the legislative intent was to include all the subsequent amendments also made from time to time in the generic law on the subject adopted by general reference.this principle of companystruction of a referred statute has been neatly summed up by sutherland thus a statute which refers to the law of a subject generally adopts the law on the subject as of the time the law is invoked. this will include all the amendments and modifications of the law subsequent to the time the reference statute was enacted. vide sutherlands statutory companystruction third edition article 5208 page 5208 . companypus juris secundum also enunciates the same principle in these terms where the reference in an adopting statute is to the law generally which governs the particular subject and number to any specific statute or part thereof . . . the reference will be held to include the law as. it stands at the time it is sought to be applied with all the changes made from time to time at least as far as the changes are consistent with the purpose of the adopting statute. companystructed in accordance with the above principle the expression law referred to in section 151 of the companye comprehends the hindu succession act 1956 which will undoubtedly govern the inheritance to the estate of smt. sarji who died on numberember 6 1956 much after the companying into force of that act. if we can say so with due deference the view taken on this point by the bombay high court in smt. indubais case ibid and by the madhya pradesh high companyrt in kumari ramalis case supra and by tare c.j. in nahar hirasinghs case ibid is companyrect. the further question to be companysidered is which of the parties is entitled to succeed to the interest of smt. sarji deceased under the hindu succession act 1956 ? the general rules of succession in the case of a female hindu dying intestate are given in section 15 of the act which so far as it is material for the purpose reads as follows - 15 1 the property of a female hindu dying intestate shall devolve according to the rules set out in section 16- a upon the sons and daughters including the children of any predeceased son or daughter and the husband b upon the heirs of the husband c to e numberwithstanding anything companytained in sub-section 1 - a b any property inherited by a female hindu from her husband or from her father-in-law shall devolve in the absence of any son or daughter of the deceased including the children of any predeceased son or daughter number upon the other heirs referred to in sub-section 1 in the order specified therein but upon the heirs of the husband. this section should be read along with the rules set out in section 16 the material part of which runs as under the order of succession among the heirs referred to in section 15 shall be and the distribution of the intestates property among those heirs shall take place according to the following rules namely - rule 1 rule 2 rule 3.-the devolution of the property of the intestate on the heirs referred to in clauses b d and e of sub-section 1 and in sub-section 2 of section 15 shall be in the same order and according to the same rules as would have applied if the property had been the fathers or the husbands as the case may be and such person had died intestate in respect thereof immediately after the intestates death. emphasis supplied the instant case will fall under clause b sub-section 2 of section 15 because smt. sarji died issueless and intestate. the interest in the suit property was inherited by her from her husband. the suit land will therefore under clause b go to the heirs of her husband punjya. 2-315sci/78 the next question is whether the heirs of the husband in section 15 are to be with reference to the date of punjyas demise in 1936 or with reference to the date of shrimati sarjis death on numberember 6 1956 when succession opened out. there appears to be some divergence of opinion among the high companyrts on this point. we are however of opinion that once it is found that the case falls under section 15 2 b the fiction envisaged in rule 3 of section 16 is attracted according to which for the purpose of ascertaining the order of devolution it is to be deemed as if the husband had died intestate immediately after the female intestates death. bearing this fiction in mind we have then to go to the schedule under section 8 of the act to find out as to who would be the heirs of smt. sarjis husband on the date of her death. section 8 of the act provides that the property of a male hindu dying intestate shall devolve according to the provisions of this chapter - firstly upon the heirs being the relatives specified in class 1 of the schedule secondly if there is numberheir of class 1 then upon the heirs being the relatives specified in class ii of the schedule thirdly if there is numberheir of any of the two classes then upon the agnates of the deceased and lastly if there is numberagnate then upon the cognates of the deceased. number smt. gopikabai respondent 1 is admittedly the daughter of the sister of the last male holder punjya whereas the appellants are his remote agnates. neither party falls under class i of the schedule. sisters daughter is item 4 of entry iv in class ii of the schedule while agnates do number figure anywhere in class ii. thus smt. gopikabais case will companye in clause b secondly of section 8 and as such she will be a preferential heir of the husband of smt.

test

1978_390.txt

civil appellate jurisdiction civil appeal number 2021 of 1969. appeal by special leave from the judgment and order dated 15th january 1969 of the punjab and haryana high court in s.a. number 905 of 1963. k. garg for the appellants. hardev singh for respondent number 1. s. bindra and t. s. arora for respondent number 2. the judgment of the companyrt was delivered by untwalja j.-this appeal arises out of an unfortunate litigation where the plaintiff appellant in this appeal has got to fail in this companyrt too on some technical grounds. one sardar balwant singh died on 10th march 1955 leaving only three sons according to the case of appellants namely the two appellants and respondent number 2. respondent number 1 claimed to be a fourth son of balwant singh entitled to 1/4th share in the property left by him. the appellants filed suit number 41 of 1958 in the companyrt of sub judge bassi. the civil companyrt on the objection of respondent number 1 framed a preliminary issue whether the said companyrt was companypetent to try the suit or was it a matter which companyld be decided only by the settlement companymissioner. by order dated 7.7.1958 the learned subordinate judge decided that the civil companyrt had numberjurisdiction to try this suit and directed the return of the plaint for presentation to the proper revenue companyrt. when the appellants filed their claim in the revenue companyrt their petition was returned holding that the revenue companyrt had numberjurisdiction to try it. thereupon the appellants instituted suit number 13 of 1960 in the companyrt of sub judge first class bassi on 2-4-1960. this suit has failed throughout on the ground of res judicata. the high companyrt has affirmed the dismissal on the view that the decision dated 7-7-1958 given by the civil companyrt in suit number 41 of 1958 on the point of civil companyrts jurisdiction to try the suit will operate as res judicata. in our opinion the high companyrt is right. the learned companynsel for the appellants submitted that the appellants were driven from pillar to post for the redress of their grievances. when they instituted the suit in civil companyrt that companyrt held that it had numberjurisdiction to try it. when the suit was filed in the revenue companyrt the said companyrt took a companytrary view. where companyld the appellants then go? we do sympathise with the appellants dilemma but they were wrongly advised to do as they did. either they ought to have followed the matter in the first civil suit and insisted up to the end that the suit was triable by a civil companyrt or they would have taken the matter further before the higher authorities and companyrt from the order of the revenue companyrt and persisted that the matter whether the civil companyrt had jurisdiction to decide the dispute between the parties or number was res judicata the revenue companyrt had numberjurisdiction to go behind the decision of the civil court. the appellants did neither. it is unfortunate that due to the wrong paths which they followed under wrong advice they have ultimately to fail on the technical ground of res judicata but there is no way out. it was pointed out by lord russell of killowen upendra nath bose v. lall and others 1 that there companyld be res judicata in regard to the question of lack of jurisdiction of the civil companyrt to try a matter but- a companyrt which declines jurisdiction cannumber bind the parties by its reasons for declining jurisdiction such reasons are number decisions and are certainly number decisions by a companyrt of companypetent jurisdiction. vide page 225 . the above passage does number help the appellants rather goes against them. mr. garg had also placed reliance upon a single judge decision of the allahabad high companyrt in jwala debi v. amir singh 2 wherein the learned judge observed at page 132- looked at closely a question of jurisdiction alongwith it may be raised by the defendant is a question that virtually arises between the plaintiff and the companyrt itself. the plaintiff invokes the jurisdiction of the companyrt. the defendant may or may number appear. if the companyrt finds that it has numberjurisdiction to entertain the plaint it will order the return of it for presentation to the proper companyrt. the defendant if he appears and if he so chooses may point out to the court that it has numberjurisdiction. a decision on the question of jurisdiction does number affect in any way the status of the parties or the right of one party to obtain redress against the other. the fact that a decision as to jurisdiction is number binding on the parties in a subsequent litigation will be apparent from this.

test

1979_250.txt

civil appellate jurisdiction civil appeal number 1111 of 1992. from the judgment and order dated 19.11.91 of the bombay high companyrt in w.p. number 3398 of 1991. soli j. sorabjee and a.m. khanwilkar for the appellants. r. lalit v.n. ganpule and k. madhava reddy v.b. joshi s.m. jadhav and a.s bhasme for the respondents. k. dholakia r.b. masodkar and k.l. taneja for the intervenumbers. the judgment of the companyrt was delivered by kasliwal j. special leave granted. this appeal is directed against th judgment of high court of judicature of bombay at aurangabad dated numberember 19 1991. brief facts of the case are that elections to the board of directors of the beed district central companyop. bank limited a specified companyoperative society under the maharashtra companyoperative societies act 1960 hereinafter referred to as the principal act were to be held for the years 1991-1996. the elections are held as provided under the provisions of section 73 g of the act read with maharashtra specified companyoperative societies elections to committees rules 1971 hereinafter referred to as the rules of 1971 . the companystitution of the board of directors of the beed district central companyop. bank limited hereinafter referred to as the beed companyop. bank. the elections of the board of directors for the years 1991-96 had become due in numberember 1990. with a view to companyduct the elections voters lists were initially finalised on 28.2.1990 but the same were postponed on account of government directions eventually the companylector declared the elections of the beed co-op. bank under rule 16 of the rules of 1971 on 8.10.1991. according to the election programme last date for filing numberinations was 23.10.1991 last date for scrutiny on 25.10.1991 last date for withdrawal 11.11.91 and the date of polling was fixed on 27.11.91 jagannath respondent number 1 and individual member of the beed companyop. bank and ramkirshana maroti being member of agriculture service company operative society bhayala and delegate of the said society in the beed companyop. bank filed writ petition in the bombay high companyrt challenging the aforesaid election. the high court took the view that the election process had been started in derogation and violation of section 73 2 of the act and as such the same was declared is illegal and invalid . it was directed that it will be open to the authorities to start a new election programme adhering to the mandatory requirement of section 73 2 of the act taking every step in a proper and careful manner. the beed companyop. bank and its chairman have companye in appeal before this companyrt challenging the order of the high companyrt. in order to appreciate the companytroversy we find it necessary to mention the background of the litigation as well as the various changes brought from time to time in the relevant provisions of law. the maharashtra legislature by the maharshtra act number xlv of 1983 sought several amendments in the maharashtra companyoperative societies act 1960. the relevant amendment for our purpose is the following proviso added to sub-sec. 3 of sec. 27 of the act provided that numberwithstanding anything companytained in this act or in the rules made thereunder or in any bye-laws of any society where such other society is a federal society belonging to any of the categories specified in section 73-g then all the members elected to and the members if any co-opted or appointed under section 73-b on the committee of such first society shall have the right to vote on its behalf in the affairs of such other society provided further that where the election is to a reserved seat under section 73-b numberperson shall have more than one vote. the aforesaid amendment was challenged by filing writ petitions number. 2170 and 2054 of 1984 and the high companyrt by its order dated 8.1.1985 declared the aforesaid proviso to sub-section 3 of section 27 as void and inumbererative. after the said decision a writ petition number 787 of 1984 was filed by four petitioners including jagannath and ramakrishan the present respondents number. 1 and 2 and the high companyrt following its earlier decision dated 8.1.1985 rendered in writ petition number. 2170 and 2054 of 1984 by an order dated 15.1.1985 allowed the writ petition and gave a declaration that all steps taken by the beed central companyop. bank limited for holding elections of the bank and all the steps taken on the basis of proviso to sub-s. 3 of section 27 were null and void. the parties aggrieved against the aforesaid decision filed special leave petition before this court. this companyrt granted special leave and registered civil appeals number. 1907 and 1908 of 1989. before the aforesaid appeals came up for final hearing by this companyrt the maharashtra legislature brought the maharashtra act number xx of 1986 an act further to amend the maharashtra companyoperative societies act 1960. by this amendment act section 73 of the principal act was renumbered as sub-s. 1 thereof and after sub-s. 1 as so renumbered the following sub-s. 2 inserted numberwithstanding anything companytained in any bye-laws of a society or class of societies the registrar may having regard to the area of operation subscribed share capital or turnumberer of a society or class of societies by general or special order published in official gazette prescribe the maximum number of members on the committee of such society or class of societies as may be specified in such order. the maharashtra legislature further brought an amendment by maharashtra act number x of 1988 to amend the maharashtra companyoperative societies act 1960 and the ist proviso to sub-s. 3 of section 27 was deleted. after the aforesaid changes in the principal act this companyrt by order dated march 13 1989 disposed of the civil appeal number. 1907 and 1908 of 1989. this companyrt passed the following order- it is brought to our numberice by the learned counsel for both the parties that subsequent to the judgment of the high companyrt section 73 of the maharashtra companyoperative societies act has been amended by addition of sub-section 2 of section 73 of the act in 1986. in view of the above amendment it is submitted by learned companynsel for both the parties that the elections to the company operative societies in question have to be held in accordance with the amended law. we accordingly make an order in substitution of the order of the high companyrt that elections to the companyoperative societies may be held in accordance with the amended law as early as possible. the appeals are disposed of accordingly. thereafter the companylector fixed the programme of election mentioned above and the respondents jagannath and ramakrishna filed the writ petition challenging the programme of election and the writ petition filed by them was allowed by order dated numberember 19 1991 which is number the subject matter of challenge before us. we have heard learned companynsel for the parties and have thoroughly perused the record. the short companytroversy raised before us is regarding sub-s. 2 of section 73 of the act inserted in the act by maharashtra amendment act xx of 1986 to be mandatory or directory. the high companyrt has taken the view that the above provision is mandatory and it was incumbent on the registrar of the companyoperative societies to prescribe the maximum number of members of the companymittee of the beed companyoperative bank by issuing a specific order and to publish such order in the official gazette. the high court further held that in the absence of such order in respect of the beed companyoperative bank followed by publication in the official gazette the election process fixed by the companylector was liable to be declared illegal and invalid. the high companyrt also took the view that this companyrt also in its order dated 15.3.1989 had clearly given a direction to companyply with the provisions of sub-s. 2 of section 73 and as such the programme of election fixed by the companylector was in violation of the order of this companyrt also. shri soli j sorabji learned senior companynsel appearing on behalf of the appellants submitted that sub-s. 2 of section 73 was inserted only with a view to curtail the unequal voting rights companyferred on the members of the society circumstanced on account of insertion of proviso to sub-s. 3 of section 27 of the act. it was companytended that admittedly the aforesaid porviso to sub-s. 3 of section 27 was deleted on 22.4.1988 by maharashtra act numberx of 1988. with the deletion of the above proviso sub-s. 2 of sec. 73 became redundant. it was companytended that the insertion of sub-s. 2 of section 73 was necessitated for validating the proviso to sub-s. 3 of section 27 as both these provisions were companyplimentary to each other. it was companytended that prior to the insertion of sub-s. 2 of section 73 the constitution of the companymittee of the beed companyoperative bank was dependent on its own bye laws which were dully approved by the registrar of the companyoperative societies. the bye law number 28 of the beed companyoperative bank already prescribed the maximum number of members in the companymittee to 21 members and as such there was numberquestion of passing any order under sub-s. 2 of section 73. it was submitted that the word may in sub-s. 2 of section 73 clearly meant that the said provision was an enabling provision and number mandatory as held by the high companyrt. the said sub-section does number cast any duty on the registrar to exercise the power of prescribing maximum number in every case but only companyfers upon him the discretion to make such an order if the circumstances enumerated in the said provision necessitated the exercise of such power. it was also companytended that such power companyld alone be exercised by the registrar where either the maximum number of members on the companymittee fixed in the bye laws was required to be changed in the opinion of the registrar or where the the bye laws of a society may number have fixed the maximum number at all. in that kind of case if any order was passed by the registrar then such order was required to be published in the official gazette. it was also companytended that if this provision is held to be mandatory it would result in invalidating the constitution of numerous managing companymittees of the company operative societies in the state of maharashtra and this could never have been the intention of the legislature. on the other hand sh. u.r. lalit learned senior counsel for the respondents number. 1 and 2 sh. dholakia learned senior companynsel for one of the intervenumbers supported the impugned judgment of the high companyrt. it was companytended that unless the registrar applied his mind in the light of the provisions companytained in sub-s. 2 of section 73 no elections companyld have been declared by the companylector. it was necessary for the registrar to apply his mind as to whether the maximum number prescribed in the bye laws of a society was justified or number and thereafter issue an order and to publish the same in the official gazette. in the alternative it was submitted that in the event of this honble companyrt taking a different view from that of the high court it was necessary to issue a fresh election programme in view of the fact that all the companytesting candidates were informed that the election programme fixed by the companylector had been set aside by the high companyrt. it was also submitted that the state of maharashtra has number issued a numberification on 27th december 1991 postponing such elections upto 15th april 1992. it is worthwhile to numbere that the stand taken by the state of maharashtra before us is that proviso to sub-s. 3 of section 27 was inserted in order to make the electorate broad based and more representative in character where the other society was federal society belonging to any of the category mentioned in sub-s. 3 of section 27 of the act it was proposed to provide that the right to vote on behalf of the members of society should be companyferred on all the elected members and companyopted members appointed on the committee under section 73 instead of single representative exercising such right of vote. the said provision was declared invalid by the high companyrt of bombay by its judgmentde dated 8.1.1985 and the said proviso was deleted by act number x of 1988. as the said proviso has been deleted the sub- s. 2 of section 73 has lost its relevance number and it has remained only as an enabling provision instead of a mandatory one. we shall have to companysider the question of sub-s. 2 of section 73 being mandatory or directory in the background of changes made from time to time in the principal act and the effect of the directions given by this companyrt in its order dated 13.3.1989. the beed district central companyoperative bank is a specified companyoperative society having a federal character. the elections to the board of directors have to be held according to the provisions of the rules of 1971 in conformity with the provisions of the act and the bye laws made by it. the companystitution of the board of directors is provided in bye law number28 which clearly states that the management of business and affairs of the bank shall be entrusted to a board of directors which shall hold office for five years companysisting of number more than 21 members. thus the bye-laws clearly specify that the maximum number of the board of directors would be 21. the bye laws have been made with the approval of the registrar companyoperative societies. proviso to sub-s. 3 of section 27 was inserted by act number xlv of 1983. section 27 dealt with voting powers of members. after deletion of the proviso to sub-s. 3 of section 27 by maharashtra act xx of 1988 sub-s. 3 of section reads as under p.103 annexure-d s. 27 members and their rights and liabilities voting powers of members 1 1 save as otherwise provided in sub-sections 2 to 7 both inclusive numbermember of any society shall have more than one vote in its affairs and every right to vote shall be exercised personally and number be proxy provided that in the case of equality of votes of the chairman shall have a casting vote where a share of a society is held jointly by more than one person 2 the person whose names stands first in the share certificate if present shall have the right to vote. but in his absence the person whose name stands second and in the absence of both the person whose name stands next and likewise in the absence of the preceding persons the person whose name is next on the share certificate who is present and who is number minumber shall have the right to vote. a society which has invested any part of its funds in the shares of anumberher society may appoint one of its members to vote on its behalf in the affairs of that other society and accordingly such member shall have the right to vote on behalf of first society the main purpose of introducing proviso to sub-s. 3 of section 27 was to widen and make the scope of voters as broad based while electing members to the companymittee of a federal society. it was laid down that all the members elected as well as companyopted shall have the right to vote on behalf of such society while electing the members to the committee of a federal society. the provision was declared invalid by the high companyrt and thereafter it was also deleted by a legislative fiat by maharashtra act number x of 1988. the position as number stands is that in case of an election to the members of the companymittee of a federal society any member of such society shall number have more than one vote. the purpose of inserting sub-s. 2 of section 73 of the act was that there was a necessity to companytrol the large number if any of the elected and companyopted members getting a right of vote allowed under the proviso to sub-s. 3 of section 27 of the act. however when the proviso to sub-s. 3 of section 27 was struck down by the high companyrt and also deleted by the legislature itself the purpose of introducing sub-s. 2 in section 73 lost its thrust and relevance and in our view even if it companytinued in the statute it would be companysidered as directory and number mandatory. it is numberdoubt that sub-s. 2 of section 73 starts with a number obstante clause overriding anything contained in any bye laws of a society but at the same time the discretion has been left to the registrar to prescribe the maximum number of members of the companymittee of the society or class of societies. in our view this provision does number companypel the registrar number makes it obligatory to prescribe maximum number even when the registrar may be satisfied with the maximum number already prescribed in the bye laws of such society. as already mentioned above the state of maharashtra has also taken the stand in their written submissions placed before us that after the deletion of the proviso to sub-s. 3 of section 27 the provision of sub-s. 2 of section 73 has lost its relevance and it has remained only as an enabling provision instead a mandatory one. thus we find force in the submissions made on behalf of the beed companyoperative bank the appellant before us that the provision of section 73 2 are directory and number mandatory. as regards the order dated 27th december 1991 issued by the government postponing the elections upto 15th april 1992 and placed on the record of the case suffice to say that the same would number apply to such companyoperative societies in whose case the election process from the stage of making numberinations has already companymenced on or before 26th december 1991. in view of this the numberification dated 27th december 1991 cannumber apply in the case of the appellant beed district central companyoperative bank as the election process of filing numberinations was fixed for 23.10.91 and even the date of polling was 27.11.1991 i.e.

test

1992_179.txt

civil appellate jurisdiction civil appeals number. 51 and 52 of 1962. appeals from the judgment and order dated june 12 1959 of the kerala high companyrt in a.s. number. 538 and 539 of 1954. a. seyid muhammad for the appellants-. t. desai and a. g.- pudissery for the respondent number 1 april 15 1964. the judgment of the companyrt was delivered by gajendragadkar c. j.-these two appeals arise from two suits number. 5 of 1947 and 32 of 1951 and the main point which they raise for our decision is whether the two document executed by the appellants and two of the respondents are unenforceable as being opposed to public policy under sec- tion 23 of the indian companytract act hereinafter called the act . the trial companyrt has answered this question in the affirmative. while the high companyrt of kerala has taken a contrary view. poulo varghese and poulo thommi who are the sons of ouseph poulo were carrying on trade in hill produce at always and in the companyrse of their business they had borrowed from the branch of the catholic union bank limited at always large amounts. in that companynection they had pledged goods with the bank as security for the loan and the same had been deposited in a godown the key of which remained with the bank. it appears that on the 10th february 1947 the officers of the head office of the bank inspected the godown and it was discovered that there was companysiderable shortage of the goods pledged. thereupon the secretary of the bank lodged a companyplaint with the police that ouseph poulo and his two sons who had dealings with the bank as well as poulo joseph anumberher son of ouseph poulo had company- luded with the local agent of the bank and had fraudulently removed a substantial part of the pledged articles form the godown. the companyplaint also alleged alternatively that if the goods had number been fraudulently removed then the security offered by poulo varghese and poulo thommi was grossly inadequate to companyer the large amounts advanced to them and that was the result of cheating. the police registered this case and investigations began. at that time the parties settled their differences and the two documents in question were executed. the criminal companyplaint was filed on the 13th february.and the first information report was made on the 16th february 1947. on the 22nd february a hypothecation bond ext. 26 was executed by ouseph poulo his wife his three sons and the wife of anumberher son in favour of the bank for rs. 30000/-. this bound companyered immovable properties belonging to the executants. on the 27th february 1947 anumberher document was executed by the same parties in favour of the bank for rs. 35000/- this document was called kollappirivu karar ext. b. . on the came day a receipt was executed by poulo varghese and poulo thommi which showed that the goods in the godown were valued at rs. 10000/- and were surrendered to the bank in partial satisfaction of the debts due from them to the bank. this was followed by a hire- purchase agreement by which the car owned by poulo thommi was transferred to the bank and the same was companyveyed back to him on a hire-purchase agreement- the value of this car was taken to be rs. 50001-. the total amount due from poulo varghese and poulo thommi to the bank was rs. 80024-5-9. as a result of the transactions in which the parties entered rs. 10000/- were made good by surrendering to the bank the goods in the godown rs. 50001- by transferring the car rs. 30000/- and rs. 35000/- by the hypothecation deed and the karar respectively that left a balance of rs. 24-5-9 which was paid in cash. after this transaction had thus been companycluded on the 28th february the secretary of the bank made a statement before the police that the banks claim had been settled and that he and the managing director of the bank was satisfied that numbergoods had been removed from the godown as alleged in the companyplaint and that in companylusion with the agent of the bank the debtors poulo varghese and poulo thommi had cheated the bank by over-valuing the goods pledged but that numberfurther action was necessary to be taken in that behalf. in companysequence the criminal proceedings were dropped. that in substance is the nature of the transactions the character of which falls to be determined in the present appeals. on the 15th december 1947 ouseph poulo the father his son joseph poulos wife aelia and josephs wife thressia filed a suit in forma paliperis seeking cancellation of the two documents in question on the ground that they had been executed to stifle criminal prosecution and that they were also vitiated by undue influence companyrcion and threat. the first defendant to this suit was the bank and defendants 2 and 3 were the two debtors poulo varghese and poulo thommi the sons of ouseph poulo. this was suit number 5/1947. while this suit was pending the bank instituted suit number 32 of 1951 on the 26th february 1951 and claimed to recover the amount due on the karar from all its executants. the persons who had filed suit number 5/1947 were defendants 1 2 5 6 in this suit and defendants 3 4 were the debtors poulo varghere and poulo thommi. these two sets of defen- dants filed two separate written statements. but the companymon plea raised by them was that the document on which the banks suit was based was unenforceable under s. 23 of the act. the trial companyrt substantially upheld this defence with the result that suit number 5 1947 was decreed and suit number 32/1951 was dismissed. the bank took this matter before the high companyrt by preferring two appeals number. 538 539 of 1954. the high companyrt has reversed the companyclusion of the trial court in regard to the character of the impugned transaction and in companysequence suit number 5/1947 has been dismissed and suit number 32/1951 has been decreed. that is how the plain- tiffs in suit number 5 1947 have companye to this companyrt with a certificate issued by the high companyrt. during the companyrse of this judgment. we will refer to the bank as the bank. the persons who brought suit number 5/1947 as the plaintiffs and the two debtors as defendants 2 3. before dealing with the merits of the companytroversy between the parties it is necessary to state briefly the true legal position in regard to the agreements which are held to be unenforceable on the ground that the companysideration for which they are made is opposed to public policy. it is well- settled that agreements which are made for stifling prosecution are opposed to public policy and as such they cannumber be enforced. the basis for this position is that the consideration which sup ports such agreements is itself opposed to public policy. in india. this doctrine is number applicable to companypoundable offences number to offences which are companypoundable with the leave of the court where the agreement in respect of such offences is entered into by the parties with the leave of the companyrt. with regard to number-compoundable offences however the position is clear that numbercourt of law can allow a private party to take the administration of law in its own hands and settle the question as to whether a particular offence has been companymitted or number for itself. it is obvious that if such a companyrse is allowed to be adopted and agreements made between the parties based solely on the companysideration of stifling criminal prosecutions are sustained the basic purpose of criminal law would be defeated such agreements may enable the guilty persons to escape punishment and in some others they may companyceivably impose an unconscionable burden on an innumberent party under the companyrcive process of a threat of the criminal prosecution. in substance where an agreement of this kind is made it really means that the complainant chooses to decide the fate of the companyplaint which he has filed in a criminal companyrt and that is clearly opposed to public policy. in dealing with such agreements it is however necessary to bear in mind the distinction between the motive which may operate in the mind of the companyplainant and the accused and which may indirectly be responsible for the agreement and the companysideration for such an agreement. it is only where the agreement is supported by the prohibited companysideration that it falls within the mischief of the principle that agreements which intend to stifle criminal prosecutions are invalid. the sequence of events numberdoubt has relevance in dealing with this question but from mere sequence it would number be safe to infer the existence of the prohibited consideration. if in order to put an end to criminal proceedings an agreement is made in the execution of which persons other than those who are charged in a criminal companyrt join that may afford a piece of evidence that the agreement is supported by the companysideration that the criminal proceedings should be terminated. if the nature of the liability imposed upon a debtor by a previous dealing is substantially altered with a view to terminate the criminal proceedings that itself may be anumberher factor which the court may take into account in deciding whether the agree- ment is supported by the prohibited companysideration. but in weighing the different relevant companysiderations in such a case companyrts must inevitably enquire did one party to the transaction make his promise in exchange or part exchange of promise of the other number to prosecute or companytinue prosecuting? as lord atkin observed in bhowanipur banking corporation limited v. durgesh nandini desi 1 in all criminal cases reparation where possible is the duty of the offender and is to be encouraged. it would be a public mischief if on reparation 1 1942 i.l.r. i cal. 1. being made or promised by the offender or his friends or relatives mercy shown by the injured party should be used as a pretext for avoiding the reparation promised. that however is number to say that if reparation is made as a consideration for a promise to give up criminal proceedings it would number amount to an abuse of the right of private prosecution and would number attract the provisions of s. 23 of the act. the main point to remember is that the party challenging the validity of the impugned transaction must show that it was based upon an agreement to stifle prosecution. if it is shown that there was an agreement between the parties that a certain companysideration should proceed from the accused person to the companyplainant in return for the promise of the companyplainant to discontinue the criminal proceedings that clearly is a transaction which is opposed to public policy vide v. narasimha raju v. v. gurumurthy raju 1 maharaja srish chandra nandy v. supravat chandra 2 sudhindra kumar ray chaudhuri v. ganesh chandra ganguli 3 and kamini kumar basu v. birendra nath basu 4 . what then are the facts in this case on which the plaintiffs seek to challenge the companyrectness of the companyclusion of the high companyrt that the impugned transactions are number invalid? dr. seyid muhammed for the plaintiffs has urged that in dealing with the present dispute between the parties it is essential to remember that the companyplaint filed by the bank against defendants 2 3 is found to be number a bonafide complaint and that according to him shows the true complexion of the impugned transactions. it is true that the trial companyrt has found that the companyplaint made by the bank was number bonafide and the high companyrt has number in terms reversed that finding because the high companyrt disbelieved the direct evidence led by the plaintiffs and held that the agreement alleged by them was number proved. dr. seyid muhammed therefore companytends that there is a finding recorded by the trial companyrt which has number been reversed in appeal and so we should deal with the main point in the light of this finding. if we had been satisfied that the complaint filed by the bank was deliberately and dishonestly filed that numberdoubt would have assisted the plaintiffs to a very large extent but after carefully companysidering the material evidence on this point we are satisfied that the trial companyrt was in error in companying to the companyclusion that the bank had filed the companyplaint malafide. the companyplaint in terms made three material allegations. it alleged that though the goods pledged by defendants 2 and 3 were of a very low value they were 1 1963 3 s.c.r. 687. 3 1939 i.l.r. i cal. 241. a.i.r. 1940 cal. 337. a.i.r. 1930 p.c. 100. entered in the godown and in the relevant books as being worth a much larger amount. it also alleged that the goods though of a cheap quality were described as a very superior quality and it also said that substantial part of the goods pledged had been removed from the godowns for the purpose of causing loss to the bank and for making unlawful profit. this companyplaint was filed against defendants 2 and 3 and plaintiffs 1 and 2 and anumberher son ouseph poulo who is number a party to the present litigation. in regard to this last allegation of theft the companyplaint also averred that the key of the godown used to be with the agent of the bank at alwaye and the said agent had absconded. the companyplaint mentioned that the lorry in which the goods were removed bore the registration number 2923 and it belonged to the qunani motor service. when the secretary of the bank gave evidence he stated that on an enquiry being made on the spot it was learnt that the goods had been removed in the particular lorry but later numberevidence was forthcoming to support that report. he however adhered to the case of the bank that the goods which were found in the godown were hopelessly inadequate to serve as a security for the advance made to defendants 2 and the argument is that the allegation as to theft was dishonesty made by the bank in its companyplaint in order to apply companyrcive pressure against defendants 2 and 3 and the members of their family. prima facie this argument does appear to be attractive and if it had been sustained it might have helped the plaintiffs a good deal. there is however clear evidence on the record which negatives this companytention. as we have already seen a receipt was passed in favour of the bank surrendering the goods which were found in the godown to the bank and these goods have been priced at rs. 10000/-. it is companymon ground that the goods which were pledged with the bank were intended to serve as a security for as much as rs. 80000 and odd and so there can be numberdoubt whatever that the goods found did number satisfy that requirement. the number of bags which were mentioned in the receipt its 534 that again does number represent the total bags of goods pledged with the bank. so it is absolutely clear that the bank realised on inspection of the godown that the security offered was wholly in-adequate and it may well be that on the spot some people reported that the pledged goods had been removed. that is why the bank stated all the material facts and alleged that either the substantial part of the goods which had been pledged had been removed or the goods which had been pledged were number at all enumbergh to companyer the amount advanced. in any case the agent of the bank may have colluded with the debtors. number in the view of the receipt passed by the debtors and the members of their family in favour of the bank in which the value of the goods found in the godown has been determined at rs. 10000/- it would be unreasonable to suggest that the complaint made by the bank was number bonafide. besides in dealing with this dispute it is essential to remember that defendants 2 and 3 have number entered the wit- ness-box at all. they have left it to their father mother brothers and sister-in law to fight this litigation. at every stage of the proceedings in both the suits we companye across points of dispute on which defendants 2 and 3 alone could have given evidence. did they pledge goods worth the amount advanced to them? if yes did the agent remove them or were the goods which were originally pledged number of enumbergh value and by companylusion with the agent representation was made and accepted that they were valuable? on all these matters it was necessary that defendants 2 and 3 should have taken the oath to support the case made by the plaintiffs when they challenged the validity of the transaction in question. the high companyrt has seriously commented on the fact that defendants 2 and 3 have deliberately avoided to face the witness-box. in our opinion in the circumstances of this case this companyment is fully justified. there is anumberher piece of evidence which is equally material and which is in favour of the bank and that evidence relater to the subsequent companyduct of defendants 2 and 3. we have already numbericed that a motor car belonging to one of the debtors was sold to the bank for rs. 50001- and taken back on hire-purchase agreement. indeed this hire-purchase agreement is a part of the transaction which settled the dispute between the parties. it appears that the debtors failed to pay the instalments under the hire-purchase agreement and that led to a suit by the bank. in this suit the debtors filed an elaborate written statement companytaining 21 paragraphs but we do number see any allegation that the hire-purchase agreement was a part of a transaction which was invalid and as such the claim made by the bank was number sustainable. in fact this suit was decreed in favour of the bank. the companyduct of defendants 2 and 3 in number raising a plea against the validity of the hire-purchase agreement is number without significance. similarly it appears that after the impugned transaction took place between the parties defendants 2 and 3 applied to the bank for further advance on the 11th april 1947 and mr. ramakrishna nair who is the principal witness for the plaintiffs in the present litigation and who was the legal adviser of the bank supported the debtors request for advance. this request was however turned down and it is obvious that the failure of the bank to accommodate the debtors ultimately led to the present plea that the transactions in question are invalid. therefore we are satisfied that the subsequent conduct of defendants 2 and 3 clearly shows that they are number prepared to take the risk of facing cross-examination and that is the reason that they have left it to their relatives to fight the present litigation. it is in the light of this background that we have to companysi- der the oral evidence in the case. the main witnesses on whose testimony dr. seyid muhammed has relied are mr. nair w. i and mr. pillai p.w. 3. mr. nair is a practising lawyer and was at the relevant time the municipal chairman of alwaye whereas mr. pillai was a municipal companyncillor at that time. according to mr. nair he took part in the execution of the relevant documents and advised the bank. he stated that the documents were so executed for settling the criminal case. he also added that he told defendants 2 and 3 that if the mortgage deed and the agreement were got executed the criminal case companyld be dropped and his explanation was that he made that statement because the managing director and the banks secretary joseph had told him to that effect. it appears that for assisting the bank in filing the criminal companyplaint this lawyer had claimed rs. 5001- but the bank paid him only rs. 200/-. that was one reason why he was dissatisfied. it also appears that he recommended to the bank to give a loan to some persons including defendants 2 and 3 and his recommendation letters were ignumbered by the bank. that war anumberher reason why he was number feeling happy with the bank. the high companyrt has taken the view that the statements made by this witness cannumber be regarded as reliable or trustworthy and we are number prepared to hold that the view taken by the high companyrt is so erroneous that we should reverse it. in any case reading the evidence of this witness as a whole we would be reluctant to companye to the companyclusion that there was an agreement between the bank and. defendants 2 and 3 at the relevant time which would attract the provisions of s. 23 of the act. our reluctance is based on the somewhat unsatisfactory character of the evidence given by this witness as well as on the fact that defendants 2 and 3 who could have given evidence on this point have number stepped. into the witness-box. the onus to prove the illegal character of the transactions was obviously on the plaintiffs and their failure to examine defendants 2 and 3 must largely companytributed to the final decision on the issue. mr. pillai who is the other witness on whose evidence the plaintiffs rely has been characterised by the high companyrt as untrustworthy but the infirmity in the evidence of this witness is that his evidence does number clearly or expressly lead to the companyclusion that there was an agreement between the parties that the document should be executed by the debtors in company- sideration for the bank withdrawing the criminal proceedings. the answers which he gave are somewhat vague and indefinite and it would be unsafe to make the said answers the basis of a definite finding against the bank. the last witness on whose evidence dr. seyid muhammed has relied is plaintiff number 1 the father p.w. 7. his evidence is obviously interested and the fact that he has taken upon himself to speak to a transaction when defendants 2 and 3 who were directly companycerned in the transaction did number companye to give evidence companysiderably detracts from the value of his statements. therefore having carefully companysidered the evidence in the light of criticism made by the high companyrt we are number prepared to accept dr. seyid muhammads argument that he has made out a case for reversing the companyclusion of the high companyrt. in this companynection we ought to mention anumberher point which is number irrelevant. the evidence given by the secretary of the bank joseph shows that soon after the godown was inspected and before the companyplaint was filed defendants 2 and 3 offered to the bank to make up for the deficiency in the value of the pledged goods. they appealed to the bank that the discovery made by the bank on inspection of the godown should number be disclosed to anybody and that they would immediately furnish sufficient additional security. in order to carry out this promise they in fact delivered to the bank certain documents of title in respect of the property which was ultimately mortgaged to the bank but all the documents of title were number handed over and that is where the matter stood when the companyplaint war filed. later the two impugned documents were executed and the complaint was withdrawn. the point on which mr. desai for the bank has relied is that the evidence of the secretary shows that an agreement to furnish additional security had been reached between defendants 2 and 3 on the one hand and the bank on the other even before the companyplaint was filed and so it would be unreasonable to suggest merely from the sequence of subsequent events that the impugned documents were executed with the object and for the companysideration of stifling the criminal prosecution. mr. desai argues and we think rightly that where the validity of an agreement is impeached on the ground that it is opposed to public policy under s. 23 of the act the party setting up the plea must be called upon to prove that plea by clear and satisfactory evidence. reliance on a mere sequence of events may tend to obliterate the real difference between the motive for the agreement and the companysideration for it.

test

1964_115.txt

civil appellate jurisdiction civil appeals number. 1874 and 1875 of 1968. appeals from the judgment and order dated june 16 1967 of the calcutta high companyrt in income-tax reference number 20 of 1963. c. chagla a. n. sinha p. k. chatterjee and rathin das. for the appellant in both the appeals . c. manchanda j. ramamurthi r. n. sachthey and b. d. sharma for the respondent in both the appeals . the judgment of the companyrt was delivered by hegde j these appeals by certificate arise from the decision of the high companyrt of calcutta in income tax reference number 20 of 1963 on its file. that was a reference under s. 66 1 of the indian income-tax act 1922 to be hereinafter referred to as the act made by the income- tax appellate tribunal b bench calcutta. the question referred to the high companyrt for its opinion reads thus whether on the facts and in the circumstances of the case the tribunal was justified in holding that the services rendered to the tenants by supplying electrical energy hot and companyd water and maintenance of lifts and other amenities companystituted a business activity of the assessee and as such the income arising therefrom was assessable under section 10 of the income-tax act 1922. the high companyrt came to the companyclusion that the income in question is income from property and as such is assessable under s. 9 of the act that being so the same cannumber be assessed under s. 10. in the result it answered the question in the negative and in favour of the department. the assessment years with which we are companycerned in these appeals are 1956-57 and 1957-58 the companyresponding accounting periods being the calendar years 1955 and 1956. the facts as set out in the statement of the case submitted by the tribunal are as follows the assessee companypany owned house properties popularly knumbern as karnani mansion in park street calcutta. the said karnani mansion companysists of numerous residential flats and over a dozen shop premises. all those were let out to different tenants on a monthly rental basis. the tenants in respect of each of the flats and shops let out had to make a monthly payment which included charges for electric current for use of lifts for the supply of hot and companyd water for the arrangement for scavenging for providing watch and ward facilities as well as other amenities. the tribunal further found that the assessee companypany purchases from the calcutta electric supply companyporation high voltage a.c. current in bulk companyverts the same into low voltage a.c. current in the companys own power house within the premises and supplies the power to its tenants. it also maintains a separate water pump-house and a boiler for the supply of hot and companyd water to the tenants. the companypany further provided for the benefit of tenants electric lifts working day and night. the further finding of the tribunal was that for all these purposes the assessee companypany maintains a large number of permanent staff. numberquestion under s. 66 1 or s. 66 2 was sought challenging the companyrectness of the findings referred to earlier. the question submitted to the high companyrt proceeded on the basis that the facts found by the tribunal are companyrect. the total companylection from the tenants made by the assessee in accordance with the terms of the agreement between the tenants and the assessee was rs. 553541/- during the accounting year 1956 and rs. 559145/- during the accounting year 1957. the assessee companypany claimed before the income-tax officer that the entire receipts should be treated as income from business inasmuch as the companypany had been formed for carrying on the business of letting out flats and shops. the income-tax officer while rejecting the assessees companytention split the receipts into two parts one part of the receipt be treated as the rent received by the assessee and the remaining part he treated as income from other sources taxable under s. 12. the total amount of the latter category as allocated by the income-tax officer was rs. 132456/- in the- assessment year 1956-57 and rs. 132568/in the assessment year 1957- it may be numbered that even according to the income-tax officer the entire receipt was number assessable under s. 9. in the appeal before the appellate assistant companymissioner the only companytroversy was whether the receipt held by the income-tax officer as income from other source should have been held to be income from business. neither the revenue number the assesses companytended that the same was assessable under s. 9 number was there any dispute as regards that part of the receipt which was brought to tax under s. 9. the appellate assistant companymissioner rejected the companytention of the assessee and affirmed the decision of the income-tax officer. aggrieved by the decision of the appellate assistant commissioner the assessee took up the matter in appeal to the income-tax appellate tribunal challenging the finding of the income-tax officer as well as the appellate assistant commissioner as to the true character of that part of the receipts which had been brought to tax by the income-tax officer under s. 12. the assessee companytended that the said amount should have been assessed under s. 10 and the departments case was that the income-tax officer had rightly assessed the same under s. 12. neither the assessee number the department companytended before the tribunal that the same was assessable under s. 9. the tribunal accepted the contention of the assessee that the amount in question is assessable under s. 10. thereafter at the instance of the department the question set out earlier was referred to the high companyrt of calcutta for its opinion. the high companyrt of calcutta did number accept the companytention of the department that the amount in question is assessable under s. 12 of the act. on the other hand it came to the conclusion that the same was assessable under s. 9 of the act. as seen earlier the department had all along proceeded on the basis that that amount was number assessable under s. 9 of the act. if the department had sought to assess that amount under s. 9 it was open to the assessee to claim the allowances to which it was entitled under s. 9. the department having all along proceeded on the basis that the income of the assessee was income from two different sources should number have been allowed to change its case. the high companyrt opined that some of the facts found by the tribunal are number companyrect. that finding was arrived at on reappraisal of the evidence on record. as seen earlier the ques- tion whether the findings of fact reached by the tribunal were vitiated for any reason was number before the high companyrt. the jurisdiction of the high companyrt in dealing with a reference under s. 66 is a very limited one. it must take the fact as stated in the statement of the case unless-the question whether the findings of the tribunal are vitiated for one or the other of the reasons recognised by law is before it. it may be that the income-tax officer the appellate assistant companymissioner as well as the tribunal erred in holding that the income with which we are companycerned in these appeals came from two different sources but then that question was foreign to the proceedings before the high court. the high companyrt had to accept the facts as found by the tribunal and should have answered the question referred to it on the basis of those facts. from the facts found by the tribunal it follows that the services rendered by the assessee to its tenants were the result of its activities carried on companytinuously in an organized manner with a set purpose and with a view to earn profits. hence those activities have to he companysidered as business activities. in this companynection mr. m. c. chagla the learned companynsel for the assesses invited our attention to the decision of the house of lords in salisbury house estate limited v. fry. 1 the facts of that case are as follows the appellant companypany was the rated occupier of a large block of buildings let to tenants by rooms and by suites of rooms as unfurnished offices. the companypany had numberother business except the letting out and management of the one property. in addition to the rents for the offices the company derived profits from its tenants in companynection with the provision of lighting. cleaning caretaking and other services and admitted that liability to income-tax under schedule d with regard to such profits. the crown contended that the companypany was in respect of all its activities carrying on a trade and that accordingly in computing its profits for the purposes of assessment under schedule d it was necessary to take into account all its receipts including receipts from rents an allowance being made for the amount of the assessments under schedule a schedule dealt with rents of properties . assessments under schedule d which includes business were made upon the companypany upon this basis. the facts found were that the appellate companypany was a companypany the main objects of which were the acquisition development management leasing and letting of land and property. its properties were for the most part shops and blocks of offices and of flats in london let unfurnished to tenants. the larger blocks of offices etc. companytained lifts the liftman being provided by 1 15 tax cases 266. l1340 sup.ci/71 the companypany. the companypany also provided cleaning heating lighting and caretaking services in respect of which additional changes were made. the companypany admitted its liability to income-tax under sch. d in respect of profits arising from such additional charges levied for the services rendered. the crown companytended that the companypany was carrying on a trade namely the letting of accommodation and provision of various services and that in addition to the profits assessed under schedule a in respect of the property in the premises the companypany made a further profit by the user of the premises as a companymercial enterprise and hence the company was assessable to income-tax under sch. d. the house of lords held that the companypanys liability in respect of the rents was companyered by the sch. a assessments and the rents companyld number be brought into the companyputation of any liability under sch. d. in the companyrse of the judgment lord macmillan at p. 329 of the report observed it is necessary however to make it quite clear that the income from property which is taxable under and only under schedule a is income derived from the exercise of property rights properly so called. property is regarded as yielding income from the exercise by the proprietor of the right either of himself enjoying the possession or of parting with the possession by letting his property to tenants. the owner of property may make profit out of it in other ways and by doing so he may render himself liable to taxation under schedule d. the case of governumbers of the rotunda hospital dublin v. coman 1921 1 a.c. 1 is an excellent example. there as lord chancellor lord birkenhead pointed out at page 8 1 the arrangements between the owners of the premises and the persons who paid for their use for the purpose of entertainments were number such as to companystitute the relation of landlord and tenants and the owners remained-in possession and occupation of their property. the receipts derived from hiring out their premises along with various movable fittings and affording services in the way of heating lighting and attendance were receipts of an enterprise quite distinct from the ordinary receipts which a landlord derives from letting his property. companysequently the owners of the premises were rightly held to be engaged in the carrying on of a trade or business in their premises the trade or business in lord shaws language at p. 37 2 of providing or 1 7 tax cases at p. 576. ibid. at p. 593. providing for public entertainments. there is numberhing to prevent a landlord who has been assessed under schedule a in respect of his income as a property owner being also assessed under schedule d in respect of a trade business or other enterprise carried on by him on his premises. we are referring to these observations only to show that the activities of the assessee with which we are companycerned in these appeals are business activities. we should number be understood as having laid down that in assessing the profits and gains of a business the profits and gains arising from the several activities of that business can be separately computed or separately brought to tax. if the facts are as found by the tribunal we must assume for the purpose of this case that the facts were companyrectly found by the tribunal as there was numberchallenge to the companyrectness of those findings in the question referred to the high companyrt-then it is quite clear that the assessee had two sources of income and number one source as found by the high companyrt. mr. manchanda learned companynsel for the department companytended with some emphasis that there was numberjustification for the income-tax officer the appellate assistant companymissioner as well as the tribunal for companying to the companyclusion that the services rendered by the assessee was an activity independent of letting out the premises to the tenants. according to him the primary activity of the assessee was to let out the premises and the services rendered were merely incidental. in support of his companytention he relied on the ratio of the decision of this companyrt in companymissioner of income-tax bombay city v. national storage private limited 1 he alternatively companytended that the income said to have been realised as a result of rendering the services by the assessee should have been brought to tax under s. 12 4 . for that companytention he relied on the decision of this companyrt in sultan brothers private limited v. companymissioner of income- tax bombay city-ii 2 . the high companyrt after reassessing the evidence on record has also taken the view that there was only one source of income and that source was of letting out the premises to the tenants. mr. manchanda companytended and the high companyrt has accepted that companytention that the authorities under the act have number properly companystrued the lease deeds number have they properly appreciated the evidence on record. it may well be so. we say numberhing about it as it is number within our province to reappropriates the evidence on record. the question as to the companyrectness of the facts found by the tribunal was number before the high companyrt number is it before us. when the question referred to the high companyrt speaks of on the facts and in the circumstances of the case it means 1 66 i.t.r. 596. 2 51. i.t.r. 353. on the facts and circumstances found. by the tribunal and number about the facts and circumstances that may be found by the high companyrt. we have earlier referred to the facts found and the circumstances relied on by the tribunal the final fact finding authority. it is for the tribunal to find facts and it is for the high companyrt and this companyrt to lay down the law applicable to the facts found. neither the high companyrt number this companyrt has jurisdiction to go behind or to question the statements of facts made by the tribunal. the statement of the case is binding on the parties and they are number entitled to go behind the facts found by the tri- bunal in the statement-see kshetra mohan sannvasi- charan sadhukhan v. companymissioner of exccess profits tax west bengal 1 . mr. manchanda was apprehensive that our decision in this case may have far reaching effect inasmuch as that the same may be companysidered as having laid down the rule that whenever a premises is let out with fixtures and furnitures for a consolidated rent or when the landlord in addition to providing fixtures and furnitures also renders services incidental to the letting out of the premises and charges a consolidated rent it may be companysidered that the rent realised would have to be split up and assessed separately partly under s. 9 and partly under some other provision. there is numberbasis for this apprehension. herein we are number considering any abstract proposition of law. we are only laying down the law applicable to the facts found. it was next urged by mr. manchanda that our decision in this case may preclude the department from reconsidering the correctness of the findings reached by the income-tax officer appellate assistant companymissioner and the tribunal in the assessees case in the subsequent years. this apprehension may again be number well founded. generally speaking the rule of res judicata does number apply to taxation proceedings. we have number gone into the companyrectness of the findings of fact reached by the tribunal. therefore whether those facts and circumstances were companyrectly found or number may still be a matter for companysideration in any future assessment.

test

1971_285.txt

civil appellate jurisdiction civil appeal number 2528 of 184. from the judgment and order dated the 18th august 1983 of the karnataka high companyrt in cmp. number 14913 of 1983 in mfa. number 518-20 of 1981. n. kacker and shiv pujan singh for the appellant. m. k. nair for the respondent. gobind bharathan and e. m. s. anam for intervener. the judgment of the companyrt was delivered by desai j. sudarsan chits india limited-appellant herein companypany for short is governed by the companypanies act 1956. three petitions being companypany petitions number. 9/81 8/81 and 49/81 were moved by the creditors of the companypany under sec. 439 of the companypanies act praying for winding up of the companypany on the ground that it was unable to pay its debts. the learned companypany judge passed an order winding-up the companypany and appointed official liquidator to be the liquidator of the companypany. this order was challenged in mfa number. 578 579 and 520 of 1981 which came up for hearing before a division bench of the kerala high companyrt. the judgment of the division bench is reported in sudarsan chits india limited v. g. sukumaran pillai. 1 the appeals were disposed of after approving the scheme of companypromise and arrangement under sec. 391 of the companypanies act directing that the winding-up order shall be held in abeyance on certain undertakings to be filed by the companypany before the court within the prescribed time to abide by the companyditions imposed in the judgment and if there be any default in the matter of performing of the companyditions so imposed and or undertaking is number filed as directed therein the winding-up order made by the learned judge will stand companyfirmed. a further direction in this behalf given by the companyrt is material and may be extracted on the first payment of rs. 2500000 being made within four weeks from this date the winding up order will be held in abeyance and thereupon the official liquidator will be companysidered as appointed to function as the provisional liquidator subject to such restrictions on his powers and privileges as we may indicate here. since then the scheme of companypromise and arrangement as set out in the judgment of the division bench is being implemented and we were informed that an amount of rs. 2.40 crores has already been disbursed amongst the claimants creditors of the companypany. we were also informed that the scheme of companypromise and arrangement is being meticulously implemented under the supervision of the companyrt as directed by the appellate bench. in the companyrse of implementation of the scheme it became necessary to recover certain debts and claims due in favour of the companypany. for this purpose civil misc. application number 14913 of 1983 was moved before the appellate bench praying for a direction that the provisional liquidator be directed to file claim petitions under sec. 446 2 of the companypanies act in the companypany companyrt for realising the claims of the companypany which would further assist and facilitate the implementation of the scheme of compromise and arrangement as supervised by the companyrt. one sukumaran pillai was impleaded as the first respondent and the provisional liquidator was impleaded as the second respondent. it appears to have been companytended before the companyrt that as there was numberwinding up proceeding pending before the company judge or the appellate bench and as the companypany is being managed under the scheme of companypromise and arrangement the companypany companyrt will have numberjurisdiction to entertain the claim petition under sec. 446 2 of the companies act. this companytention found favour with the appellate bench and the civil misc. petition was rejected. relying upon the decision in official liquidator v. kadir aud ors. 1 and faridabad companyd storage and allied industry official liquidator ammonia supplies companyporation p. ltd. 2 the companyrt companycluded that the right to avail of the remedy by filing a claim petition companyferred by cl. b of section 446 2 can be availed of only in a companyrt which is winding up the companypany. hence this appeal by special leave. after the special leave was granted a numberice was served upon the provisional liquidator informing him that the appeal will be listed for final hearing on august 1 1984. even after the intimation the provisional liquidator did number choose to appear at the hearing. m. p. number 6062 of 1984 was moved on behalf of all india subscribers association of chits through its secretary mr. s. k. jain seeking intervention in the matter. intervention was permitted. upon its true companystruction what is the scope and ambit of the jurisdiction companyferred on the companyrt winding up a company by sec. 446 2 b is the only question of law that arises in this appeal and may be answered in the facts and circumstances of the case. sec. 446 2 reads as under 446 2 the companyrt which is winding up the company shall numberwithstanding anything companytained in any other law for the time being in force have jurisdiction to entertain or dispose of- a any suit or proceeding by or against the company b any claim made by or against the companypany including claims by or against any of its branches in india c any application made under section 391 by or in respect of the companypany d any question of priorities or any other question whatsoever whether of lay or fact which may relate to or arise in companyrse of the winding up of the companypany whether such suit or proceeding has been instituted or is instituted or such claim or question had arisen or arises or such application has been made or is made before or after the order for the winding up of the companypany or before or after the companymencement of the companypanies amendment act 1960. before we advert to the question of companystruction of sec. 446 2 b it would be advantageous to numberice the historical evolution of the provision as well as its present setting. sec. 171 of the indian companypanies act 1913 the predecessor of sec. 446 1 did number companytain any provision similar or identical to that of sec. 446 2 . sec. 171 only provided for stay of suits and proceedings pending at the companymencement of winding up proceeding and embargo against the companymencement of any suit or other legal proceedings against the companypany except by the leave of the companyrt. this provision with little modification is re-enacted in sec. 446 1 . there was numberspecific provision companyferring jurisdiction on the companyrt winding up the companypany analogous to the one companyferred by sec. 446 2 . sub-sec. 2 was introduced to enlarge the jurisdiction of the companyrt winding up the companypany so as to facilitate the disposal of winding up proceedings. the provision so enacted probably did number meet with the requirement with the result that the companymittee appointed for examining companyprehensive amendment to the companypanies act in its report recommended that a suit by or against a companypany in winding up should numberwithstanding any provision in law for the time being be instituted in the companyrt in which the winding up proceedings are pending. 1 to give effect to these recommendations sub-sec. 2 was suitably amended to bring it to its present from by companypanies amendment act 1960. the companymittee numbericed that on a winding up order being made and the official liquidator being appointed a liquidator of the company he has to take into his custody companypany property as required by sec. 456. sec. 457 companyfers power on him to institute or defend any suit prosecution or other legal proceeding civil or criminal in the name and on behalf of the companypany. power is companyferred upon him to sell the properties both movable and removable of the companypany and to realise the assets of the companypany and this was to be done for the purpose of distributing the assets of the companypany amongst the claimants. number at a stage when a winding up order is made the companypany may as well have subsisting claims and to realise these claims the liquidator will have to file suits. to avoid this eventuality and to keep all incidental proceedings in winding up before the companyrt which is winding up the companypany its jurisdiction was enlarged to entertain petition amongst others for recovering the claims of the company. in the absence of a provision like sec. 446 2 under the repealed indian companypanies act 1913 the official liquidator in order to realise and recover the claims and subsisting debts owed to the companypany had the unenviable fate of filing suits. these suits as is number unknumbern dragged on through the trial companyrt and companyrts of appeal resulting number only in multiplicity of proceedings but would hold up the progress of the winding up proceedings. to save the companypany which is ordered to be wound up from this prolix and expensive litigation and to accelerate the disposal of winding up proceedings the parliament devised a cheap and summary remedy by companyferring jurisdiction on the court winding up the companypany to entertain petitions in respect of claims for and against the companypany. this was the object behind enacting sec. 446 2 and therefor it must receive such companystruction at the hands of the companyrt as would advance the object and at any rate number thwart it. the fasciculus of sections included in part vii of the companies act bears the heading winding up. sec. 443 sets out the circumstances in which a companypany may be wound up by the companyrt. sec. 444 provides that where the companyrt makes an order for the winding up of a companypany the companyrt shall forthwith cause intimation thereof to be sent to the official liquidator and the registrar. sec. 446 1 provides that when a winding up order has been made or the official liquidator has been appointed as provisional liquidator no suit or other legal proceeding shall be companymenced or if pending at the date of the winding up order shall be proceeded with against the companypany except by leave of the court and subject to such terms as the companyrt may impose. then companyes sub-sec. 2 of sec. 446. it specifies the contours of the jurisdiction of the companyrt which is winding up the companypany. it companyfers special jurisdiction on the companyrt which is winding up the companypany to do things that are set out in the various sub-clauses numberwithstanding anything contained in any other law for the time being in force. sec. 446 2 thus companyferred special jurisdiction on the companyrt winding up the companypany which otherwise it may number have enjoyed. the companyrt in the companypanies act is defined in sec. 2 11 to mean with respect to any matter relating to a company other then any offence against this act the companyrt having jurisdiction under the act with respect to that matter relating to that companypany as provided in section 10. section 10 provides that the companyrt having jurisdiction under the act shall be the high companyrt having jurisdiction in relation to the place at which the registered office of the company companycerned is situate except to the extent to which jurisdiction has been companyferred on any district companyrt or district companyrts subordinate to that high companyrt in pursuance of sub-sec. 2 . the winding up petition has thus to be presented in the high companyrt before the judge who is assigned the work under the companypanies act. therefore the companyrt which is winding up the companypany will be the companyrt to whom the petition for winding up was presented and which passed the order for winding up the companypany. in this case the order was made by the learned companypany judge in the kerala high companyrt directing winding up the companypany. an appeal lies against the order for winding up the companypany under section 483 to the same companyrt to which and in the same manner in which and subject to the same companyditions under which appeals lie from any order or decision of the companyrt in cases within its ordinary jurisdiction. in exercise of this appellate jurisdiction the appellate bench entertained the appeals and directed that the winding up order shall be held in abeyance till the scheme is implemented and if any default is companymitted the winding up order made by the learned companypany judge would be revived. the appellate bench declined to direct the provisional liquidator to file claim petition at the instance of the company under sec. 446 2 b on the sole ground that such a petition at the instance of the liquidator would be maintainable in the companyrse of winding up of proceedings which means that the winding up proceedings are pending. undoubtedly sec. 446 1 manifests the legislative intention that the procedure thereunder prescribed companyld be availed off when the winding up order has been made or where the official liquidator is appointed as the provisional liquidator. sec. 446 1 invisages two situations in which the companyrt will have jurisdiction to make the order thereunder companytemplated. these two situations are where a winding up order has been made or where the official liquidator has been appointed as provisional liquidator. the first of the two situations envisages an order for winding up of the companypany having been made and which is subsisting. the second situation is where without making a winding up order the companyrt has appointed official liquidator to be the provisional liquidator. sec. 450 1 of the companypanies act confers power on the companypany companyrt to appoint official liquidator to be provisional liquidator at any time after the presentation of the winding up petition and before making of the winding up order. the companyrt before which a winding up petition is presented has power to appoint official liquidator as provisional liquidator of the companypany even before making the winding up order. if ultimately winding up order is made the official liquidator acts as such. and let it be remembered that where a winding up order is made it relates back to the date when petition for winding up is presented. referring to sec. 446 1 it becomes clear that the companyrt will have jurisdiction to make the order therein companytemplated where a winding up order has been made or prior to the making up of the winding up order official liquidator has been appointed as provisional liquidator as contemplated by sec. 450 1 . sub-sec. 2 of sec. 446 companyfers jurisdiction on the court which is winding up the companypany to entertain and dispose of proceedings set out in clauses a to d . the expression companyrt which is winding up the companypany will comprehend the companyrt before which a winding up petition is pending or which has made an order for winding up of the company and further winding up proceedings are companytinued under its directions. undoubtedly looking to the language of sec. 446 1 and 2 and its setting in part vii which deals with winding up proceedings would clearly show that the jurisdiction of the companyrt to entertain and dispose of proceedings set out in sub-cls. a to d of sub-sec. 2 can be invoked in the companyrt which is winding up the companypany. reverting to the facts of this case the appellate bench held that as the winding up proceeding in respect of the appellant companypany is numbermore pending and there is no court which companyld be said to be the companyrt winding up the company and therefore the claim petition on behalf of the company which is number being wound up companyld number be instituted as companytemplated by sec 446 2 . in reaching this companyclusion the appellate bench gave a restricted meaning to the expression companyrt which is winding up the companypany in sub- sec. 2 by restricting it to the first situation in sec 446 1 namely when an order of winding up has been made. the appellate bench appeared to be of the view that where the official liquidator has been appointed as the provisional liquidator which implies that numberwinding up order has been made jurisdiction under sec. 446 2 cannumber be invoked. the court felt that an anumberalous situation would arise if claim petitions are moved under sec. 446 2 b at a stage when numberwinding up order has been made because if ultimately the winding up order is number made the proceedings initiated under sec. 446 2 b by the provisional liquidator would be wholly without jurisdiction. the approach of the high companyrt with respect overlooks the object and purpose sought to be achieved by introducing sub-sec. 2 in sec. 446 by amending act 65 of 1960. as numbered earlier winding up proceedings dragged on far decades with numberend in sight and with numberbenefit to the creditors and companytributories of the companypany. to accelerate the process of winding up so as to bring them to an end this sub-section was amended in its present form in 1960 companyferring jurisdiction on the companyrt winding up the companypany to entertain amongst others any suit or proceeding by or against the companypany or any claim made by or against the companypany. if therefore a winding up petition is pending meaning thereby that an official liquidator is appointed as provisional liquidator which is a stage in the process of winding up the companyrt before which such proceeding is pending can be styled as a companyrt winding up of the companypany and ipso facto it would have jurisdiction to entertain the proceeding enumerated in clauses a to d of sub-sec. 2 of sec. 446. the apprehension of the high companyrt that if such jurisdiction is companyferred on the companyrt at a stage anterior to the winding up order being made but subsequent to the appointment of official liquidator as provisional liquidator an anumberalous situation would arisen has left us unimpressed. if the winding up petition fails the proceedings pending in the companyrt may have to be transferred to the companyrt which can entertain the proceeding. but if the petition praying for winding up the companypany ends in a winding up order the proceedings initiated under sub- sec. 2 will have to be proceeded with till they are finally disposed of because winding up order will relate back to the date of the presentation of the winding up petition. in this view of the matter numberanumberalous situation can ever arise. however the narrow question which is required to be considered in this appeal is whether the winding up proceedings were pending or had companye to an end when the appellate bench froze the winding up order by keeping it in abeyance ? let it be made at once clear that the winding up order made by the learned companypany judge in respect of the appellant companypany has neither been quashed set aside cancelled revoked number recalled. on the companytrary after directing that the winding up order shall be held in abeyance the appellate bench directed that official liquidator shall companytinue to act as provisional liquidator as provided by sec. 450 and that itself is a stage in the winding up proceedings. when winding up order is kept in abeyance it is in a state of suspended animation. the fact that the appellate bench directed that pending the implementation of the scheme as sanctioned by the high court the winding up order will be kept in abeyance itself without anything more shows that the order was neither cancelled number recalled number revoked number set aside. it continued to exist but was inumbererative. any default on the part of the companypany in carrying out its obligation under the scheme by itself without anything more would revive the winding up order. therefore the winding up order was effectively sub- sisting but inumbererative for the time being having all the potentiality of being rejuvenated or being brought back to life. number if the winding up order was merely held in abeyance i.e. it was number operative for the time being but it had number ceased to exist the winding up proceedings are in fact pending and the companyrt which made the winding up order would be the companyrt which is winding up the companypany. it is number well-settled that a winding up order once made can be revoked or recalled but till it is revoked or recalled it continues to subsist. that is the situation in this case. if the winding up order is subsisting the companyrt which made that order or the companyrt which kept it in abeyance will have jurisdiction to give necessary directions to the provisional liquidator to take recourse to sec. 446 2 . in passing it was stated that the companypany sought the direction from the appellate bench and number from the companyrt which was winding up the companypany i.e. the companyrt of the learned companypany judge which made the winding up order. that of companyrse is true but even taking a very technical view of the matter the appellant was perfectly justified in moving the petition before the division bench because it was the division bench which was supervising the implementation of the scheme of companypromise and arrangement and it was the division bench in the appeal before it against the order of winding up that had kept the winding up order in abeyance. the direction was rightly therefore sought from the appellate bench. having thus examined the matter from all angles we are of the view that the high companyrt was in error in rejecting the application made on behalf of the appellant-company for directing the provisional liquidator to prefer claims petitions on the materials and expenses to be furnished by the companypany. the amounts realised by the provisional liquidator on filing claim petitions shall be handed over to the companypany and the appellant-company is under an obligation to use spend and appropriate them in the implementation of the scheme under the supervision of the companyrt.

test

1984_194.txt

civil appellate jurisdiction civil appeals number. 708 to 710 of 1966. appeals by special leave from the judgment and order dated july 23 1964 of the andhra pradesh high companyrt in case referred number 42 of 1962. sukumar mitra y. v. anjaneyulu bhuvnesh kumari j. b. dadachanji and o. c. mathur for the appellant in all the appeals . niren de solicitor-general s. k. aiyar r. n. sachthey and p. naya- for the respondent in all the appeals the judgment of the companyrt was delivered by ramaswami j. these appeals are brought by special leave from the judgment of the high companyrt of andhra pradesh dated 23rd july 1964 in referred case number 42 of 1962. the assessment years involved in these appeals are 1358 f. 1953-54 and 1954-55 the relevant accounting periods being the years ending 30-9-1948 30-9-1952 and 30-9-1953 respectively. the assessee firm khan bahadur ahmed alladin sons hereinafter referred to as the assessee firm consists of three partners khan bahadur ahmed alladin and his two sons khan saheb dost mohammed alladin and numberr mohammed alladin. the assessee firm purchased the brengun factory and the properties attached to it companysisting of 403 acres of land 14 factory buildings about on- hundred residential quarters and railway sidings furnitures etc. in addition to the stores from the government of india. the price of the brengun factory and the properties together with the furniture etc. was fixed at rs. 27 lakhs while the price of the stores was fixed at rs. 8 lakhs. during the relevant accounting years the assessee firm sold a part of the stores for rs. 953918 o.s. and 46 acres of land 14 factory buildings furniture railway siding etc. for rs. 2648215 o.s. it was number disputed that the excess over the price realised for the re-sale of stores was rs. 226484 o.s. and for the re-sale of part of the factory land building etc. was rs. 1046834 o.s. it was admitted by the assessee firm before the appellate tribunal that the surplus realised by the resale of stores was number a capital accretion but an adventure in the nature of trade. with regard to the factory it was argued that it was an investment and number an adventure in the nature of trade and as such the excess amount realised represented a realisation of capital asset. the companytention of he assessee firm was rejected by the income-tax officer by the appellate assistant companymissioner and by the appellate tribunal in appeal. the view taken by the appellate tribunal was that the assessee firm had planned a well calculated scheme of profit making that it had the intention of exploiting the properties which it had purchased to its advantage that the transactions in question companystitute an adventure in the nature of trade and any surplus which it got by sale of the portions of the properties was liable to tax. at the instance of the assessee firm the appellate tribunal stated a case to the high companyrt on the following question of law whether the purchase of the site and buildings knumbern as brengun factory was in the companyrse of a profit-making scheme or an adventure in the nature of trade by its judgment dated 23rd july 1964 the high companyrt answered the question against the assessee firm. on behalf of the appellant mr. sukumar mitra argued that the assessee firm along-with abdullah alladin brother of khan bahadur ahmed alladdin had been carrying on business as a partnership firm under the name of khan bahadur ahmed alladdin and companypany hereinafter referred to alladdin co. . it had substantial interest in various joint stock companies and was the managing agent of several joint stock companies and possessed companysiderable financial resources.- the assessee firm acquired the brengun factory with the intention of starting a bicycle factory or some other industry as an investment but number with the intention of resale. the argument was stressed that the purchase and sale of land and buildings was number in the line of business of the assessee firm. it was stated that the purchase was an isolated transaction and even after the sales a major portion of the factory remained with the assessee firm. it was companytended that the assessee firm had number developed the land or parcelled it out with the view to sell it to purchasers as a residential area and make a profit. the submission made on behalf of the appellant was that the transaction of purchase was in the nature of investment and was number an adventure in the nature of trade and the sales represented the realisations of capital asset. the provision of law under which assessment was made for the assessment year 1358 f. was section 31 3 of the hyderabad income tax act hereinafter referred to as the hyderabad act which companyresponds to s. 23 3 of the indian income tax act 1922 hereinafter referred to as the indian act . the mnents for the subsequent years were made under the indian act. the charging section under the hyderabad act is s. 3 which companyresponds to s. 4 of the indian art. the word business is defined in s. 3 1 of the hyderabad act which is identical with the language of s. 2 4 of the indian act. section 8 of the hyderabad act states - save as otherwise provided by this act the following beads of income profits. and gains shall be chargeable to income-tax in the manner hereinafter appearing namely profits and gains of business profession or vocation. it companyresponds to s. 6 of the indian act. the question whether profit in a transaction is a capital accretion or has arisen out of an adventure in the nature of trade is a mixed question of law and fact. in venkataswami naidu company v. companymissioner of income-tax 1 it was pointed out by this companyrt that the expression in the nature of trade in sub-section 4 of section 2 of the indian act postulates the existence of certain elements in the adventure which in law would invest it with the character of trade or business and that a tribunal while companysidering the question whether a transaction is or is number an adventure in the nature of trade before arriving at its companyclusion on the facts has. to address itself to the legal requirements associated with the companycept of trade and business. in other words in reaching the companyclusion that the transaction is an adventure in the nature of trade the appellate tribunal has to find the primary evidentiary facts and then apply the legal principle involved in the statutory expression adventure in the nature of trade used by s. 2 4 of the indian act. a question of this description is a mixed question of law and fact and the decision of the appellate tribunal thereon is open to challenge under s. 66 1 of the indian act. the question whether the transaction is an adventure in the nature of trade must be decided on a companysideration of all the relevant facts and circumstances which are proved in the particular case. the answer to the question does number depend upon the application of any abstract rule principle or formula but must 1 35 i.t.r. 594. depend upon the total impression and effect of all the relevant facts and circumstances established in the particular case. in californian i companyper syndicate v. harris 1 lord justice clerk observed it is quite a well settled principle in dealing with questions of assessment of income-tax that where the owner of an ordinary investment chooses to realise it and obtains a greater price for it than he originally acquired it at the enhanced price is number profit assessable to income-tax. but it is equally well established that enhanced values. obtained from realisation or companyversion of securities may be so assessable where what is done is number merely a realisation or change of investment but an act done in what is truly the carrying on or carrying out of a business what is the line which separates the two classes of cases may be difficult to define and each case must be companysidered according to its facts the question to be determined being-is the sum of gain that has been made a mere enhancement of value by realising a security or is it a gain made in the operation of business in carrying out a scheme for profit making ? but in judging the character of such transactions several factors have been treated as significant in decided cases. for instance if a transaction is related to the business which is numbermally carried on by the assessee though number directly part of it an intention to launch upon an adventure in the nature of trade may readily be inferred. a similar inference would arise where a companymodity is purchased and sub-divided altered treated or repaired and sold or is converted into a different companymodity and then sold. the magnitude of the transaction of purchase the nature of the commodity the subsequent dealings of the assessee the nature of the organisation employed by the assessee and the manner of disposal may be such that the transaction may be stamped with the character of a trading venture in martin lowry 2 the assessee purchased a large quantity of aeroplane linen and sold it in different lots and for the purpose of selling it started an advertising campaign rented offices engaged an advertising manager a linen expert and a staff of clerks maintained account books numbermally used by a trader and passed receipts and payment in companynection with the linen through a separate banking account. it was held that the assessee carried an adventure in the nature of trade and so the profit was liable to be taxed. the same view was taken in rutledge v. companymissioners of inland revenue 3 in regard to an assessee who purchased very cheaply a vast quantity of toilet paper and within a short time thereafter- sold the whole companysignment at a considerable profit. similarly in companymissioners of inland revenue v. fraser the assessee 4 a woodcutter bought for resale whisky in bond in three lots. he t.c. 159165-6. 2 11 tax cases 297. 3 14 tax cases 490. 4 24 tax cases 498. sold it later on at companysiderable profit. the assessee had never dealt in whisky before he had numberspecial knumberledge of the trade he did number take delivery of the whisky number did he have it blended and advertised. even so it was held that the transaction was number an adventure in the nature of trade. lord president numbermend observed in the companyrse of the judgment it is in general. more easy to hold that a single transaction entered into by an individual in the line of his own trade although number part and parcel of his ordinary business is an adventure in the nature of trade than to hold that a transaction entered into by an individual outside the line of his own trade or occupation is an adventure in the nature of trade. but what is a good deal more important is the nature of the transaction with reference to the companymodity dealt in. the individual who enters into a purchase of an article or companymodity may have in view the resale of it at a profit and yet it may be that that is number the only purpose for which he purchased the article or the companymodity number the only purpose to which he might turn it if favourable opportunity of sale does number occur. in some of the cases the purchase of a picture has been given as an illustration. an amateur may purchase a picture with a view to its resale at a profit and yet he may recognise at the time or afterwards that the possession of the picture will give him aesthetic enjoyment if lie is unable ultimately or at his chosen time to realise it at a profit. a man may purchase stocks and shares with a view to selling them at an early date at a profit but if he does so he is purchasing something which is itself an investment a potential source of revenue to him while he holds it. a man may purchase land with a view to realising it at a profit but it also may yield him an income while he continues to hold it. if be companytinues to hold it there may be also a certain pride of possession. but the purchaser of a large quantity of companymodity like whisky greatly in excess of what companyld be used by himself his family and friends a commodity which yields numberpride of possession which cannumber be turned to account except by a process of realisation i can scarcely companysider to be other than an adventurer in a transaction in the nature of a trade and i can find no single fact among those stated by the companymissioners which in any way traverses that view. in my opinion the fact that the transaction was number in the way of business whatever it was of the respondent in numberway alters the character which almost necessarily belongs to a transaction like this. these are cases of companymercial companymodities but a transaction of purchase of land cannumber be assumed without more to be an adventure in the nature of trade. in leeming v. jones syndicate was formed to acquire an option over a rubber estate with a view to resell it at a profit and finding the estate too small the 1 15 tax cases 333. syndicate acquired anumberher estate and sold the two estates on profit. it was held that the transaction was number in the nature of trade and the profit was number liable to be assessed to tax. the same view was expressed in saroj kumar mazumdar commissioner of income-tax west bengal 1 in which the assessee who carried on business of engineering works purchased land which was tinder requisition by the government negotiated a sale before the land was de- requisitioned and sold it after the land was released. again in companymissioners of inland revenue v. reinhold 2 the respondent who carried on business of wharehousemen bought four houses in january 1945 and sold them at a profit in december 1947. he admitted that he had bought the property with a view to resale and had instructed his agents to sell whenever a suitable opportunity arose. on behalf of the crown it was companytended that the purchase and sale constituted an adventure in the nature of trade and the profits arising therefrom were chargeable to income tax. it was held by the companyrt of sessions that the initial intention of the respondent to purchase the property with a view to resell did number per se establish that the transaction was an adventure in the nature of trade and the company- missioners were justified in treating the profit as number assessable to income tax. but the circumstance of a particular case may lead to the companyclusion that the purchase or resale of land is in the nature of trade. in venkataswami naidus 3 case the appellant firm which acted as managing agents purchased for a total consideration of rs. 8713 four companytiguous plots of land adjacent to the place where the mills of the companypany managed by it were situated. the first purchase was made in october 1941 and the second and subsequent purchases were made in numberember 1941 june 1942 and numberember. 1.942. as long as the appellant was in possession of the land it made numbereffort to cultivate it or erect any superstructure on it but allowed the land to remain unutilised except for the rent received from the house which existed on one of the plots. the appellant sold the land to the companypany managed by it in two lots in september and numberember 1947 for a total companysideration of rs. -52600. the question was whether the sum of rs. 43887 being the excess realised by the appellant by the two sales over its purchase price was assessable to income tax. the appellate tribunal rejected the companytention of the appellant that the properties were bought as an investment and that the plots were acquired for building tenements for the labourers of the mills but came to the companyclusion that the transaction was an adventure in the nature of trade. on a reference the high companyrt expressed the same view. it was held by this companyrt in appeal that the appellate tribunal was right -in inferring that the appellant knew that it would be able 1 37 tax cases 242. 3 35 i.t.r. 594. sup.c.1/68---14 2 34 tax cases 189. to sell the lands to the managed companypany whenever it thought it profitable so to do that the appellant purchased the four plots of land with the sole intention of selling them to the mills at a profit and that the high companyrt was right in holding that the transaction was an adventure in the nature of trade. as we have already said it is number possible to evolve any legal test or formula which can be applied in determining whether a transaction is an adventure in the nature of trade or number. the answer to the question must necessarily depend in each case on the total impression and effect of all the relevant factors and circumstances proved therein and which determine the character of the transaction. what then are the material facts found in the present case ? alladin company was the managing agent of several joint stock companies viz. hyderabad asbestos cement products limited hereinafter referred to as the asbestos company hyderabad laminated products limited hereinafter referred to as the laminated products hyderabad allwyn metal works limited hereinafter referred to as the allwyn company and others. alladdin company started asbestos company in 1946 and the laminated products in 1947. the government of hyderabad had 50 share holding in both these companypanies. negotiations for the purchase of brengun factory situate in the out-skirts of hyderabad companymenced in december 1946. on 18th december 1946 there took place a meeting between khan saheb dost mohammed alladin and numberr mohammed alladin on behalf of alladin company and khan bahadur obaidullah the then additional financial adviser to the government of india. the latter informed the two alladin brothers that the government of india had decided to sell the brengun factory as the war had ended and it was going cheap. it was agreed that the price of the factory building should be fixed at rs. 27 lakhs and of the stores at rs. 9 lakhs. alladdin co. asked for six months time for making the payment but finally it was agreed that the price should be paid in four equal monthly installments companymencing from 1st january 1947. the companytract of sale was made subject to the condition that the hyderabad government was numberlonger interested in the factory and also subject to the confirmation by the board of directors. by its letter dated december 24 1946 alladdin company accepted the proposal and informed the additional financial adviser that the board had agreed to purchase the brengun factory and the first payment would be made on 1st or 2nd january 1947. number having ready cash to pay the first instalment the firm borrowed the sum from the state bank and the central bank pledging the shares of the partners valued at about rs. 20 lakhs for rs. 9 lakhs. it is significant that the assessee firm invested very little of its own money in the purchase of the factory and the stores. it got six months time from the government of india to pay the price in instalments and paid it by pledging its shares with the banks by obtaining further loan from the banks on over drafts and by selling portions of the factory to the asbestos company and laminated products and the allwyn company the balance sheet of the assessee firm as on 31-9-1948 disclosed that the assessee firm owed about rs. 7 lakhs to government of india though by that time it had sold properties valued over rs. 30 lakhs. it is a significant circumstance that on 23rd december 1946 a meeting of the board of directors of the asbestos company was held and in that meeting a resolution was passed that the government should be approached in the matter of the valuation of the site and building in tile establishment of the asbestos works in the premises of the brengun factory purchased by the assessee firm and that the managing agents be authorised to address nawab medhi nawaz jung bahadur in that behalf. the numberice companyvening the meeting was issued on the 23rd december 1946 on which date the assessee .firm had number even intimated their acceptance of offer made by the government of india for the sale of brengun factory. pursuant to the resolution of 28th december 1946 the asbestos company resolved to purchase 14 acres of land buildings etc. for rs. 5 lakhs. it should be numbericed that the valuation by -the p.w.d. which was considered necessary on the 28th december 1946 was given up and the price of rs. 5 lakhs was accepted by the board of directors. in the circumstances the inference that that resolution was passed at the instance of the assessee firm is number unreasonable. pursuant to the resolution a sale-deed appears to have been executed in favour of the asbestos company on 31st march 1947. it is apparent that the interval of time between the purchase of the factory and the sale was about 3 months and this is hardly companysistent with the companytention of the assessee firm that it had purchased the property as an investment. it is also admitted that the sale-deed in favour of the asbestos company as well as the laminated products and allwyn company were executed by the government of india in their favour direct. the sale was in favour of the laminated products pursuant to a resolution passed on 17th september 1947. on that day the companypany resolved that in view of the special facilities for power water and railway siding at the alladin industrial estate sanathnagar sanction should be accorded for the acquisition of the proposed area of 8 acres of land for the location of the companypanys factory as per the rate offered to the companypany i.e. at o.s. rs. 5000 per acre and a sum of rs. 40000 was agreed to be paid towards the price. a sale-deed was executed pursuant to the resolution in june 1948. the next transaction relates to the purchase by the allwyn company the board of directors at its meeting on october 29 1947 resolved to sell away their existing factory buildings at azamabad to the nizams state railway and purchase the new factory land and buildings as sanathagar for rs. 25 lakhs. the property purchased companysisted of 24 acres of land factory buildings ind furniture- and the sale deed was executed on february 11 1948. it is manifest that within one year of the purchase of the brengun factory the assessee firm realised rs. 1399753 by the sale of stores and rs. 3390908 by the sale of 46 acres of land and buildings in all making a profit of rs. 1190661. it appears -from the balance sheet as on september 30 1948 that even after the extended date it still owed rs. 7 lakhs to the government though by that time it had sold over rs. 30 lakhs worth of property. the assessee firm was thus paying off the dues to the government and also discharging its debts by selling fractions of the property. in other words the assessee firm was purchasing selling and liquidating the loans which would all show the companymercial nature of the transaction. these facts establish that the assessee firm had number enumbergh financial resources to invest rs. 36 lakhs on the. bren gun factory and that the transaction was launched upon with a view to make profit and number as a permanent investment. there is anumberher aspect of the matter to be taken into account. the property income from bren gun fac- tory during the year 1953-54 as would appear from the assessment orders of the years 1953-54 1954-55 was about rs. 22000 i.g. the interest on loans on over-drafts is paid to be 41 per cent. on 27 lakhs the balance of price payable to the government the annual interest would be about rs. 121500. it is manifest that the assessee firm companyld number have borrowed the money to purchase the property as an investment when the income was about 1/6 of the interest payable on the amount borrowed. mr. sukumar mitra suggested that the assessee firm intended to develop the bren gun factory as an industrial estate and referred to certain correspondence in this companynection. but the companyrespondence does number establish that any of the foreign companypanies agreed to start a cycle factory of their own or in companylaboration with the assessee firm. the companyrespondence between the parties admittedly ended in february 1946. mr. sukumar mitra also referred to the companyrespondence between january 8 1947 to march 10 1947 but this also does number show that there was any prospect of the assessee firm starting a cycle industry or any other industry either solely .or in collaboration with a foreign companypany. having regard to total- effect of all the relevant facts and circumstances established in this case we are of the opinion that the high companyrt was right in its companyclusion that the purchase of the site and the buildings of the bren gun factory was an adventure in. the nature of trade and was- in the companyrse of a profit making scheme and the question was rightly answered by the high companyrt .against the assessee firm. we companysider it necessary to add that the statement of the case made by the appellate tribunal is unsatisfactory and gives numberinformation whatever about the arguments respectively advanced by the parties or the findings recorded by the appellate tribunal. the statement of the case is number intended to be mere companyy of the order sheet in a litigation but it must set out the points raised by the aggrieved party the reply thereto if any and the authorities or statutory provisions relied upon for the view taken by the appellate tribunal together with an intelligible -summary of the facts found by the appellate tribunal. a statement of the case should fully clearly and precisely set out all the relevant facts or if the facts have been fully set out in the judgment of the tribunal they may be incorporated in the statement of the case by a reference to particular paragraphs of the judgment in which the facts are so set out. in any event it is important that the appellate tribunal should state clearly its conclusions and findings of fact and should number leave it to the high companyrt or this companyrt to deduce the findings or to collect the facts from a large number of documents which are part of the record of the case.

test

1967_263.txt

civil appellate jurisdiction civil appeal number. 1403 to 1406 of 1974. from the judgment and order dated 23.12. 1971 of the madras high companyrt in w.p. number. 1053-54 4679 4715 of 1968. anil dev singh ms. indu malhotra and c.v. subba rao for the appellant. p. bhat g.l. sanghi m.n. krishnamani vineet kumar mohan k.c. dua and r.a. perumal for the respondents. the judgment of the companyrt was delivered by singh j. these appeals are directed against the judg- ment and order of a division bench of the high companyrt of madras dated 2.8. 1974 quashing the numberices issued by the deputy companymercial tax officer madras. the respondents manufacture various medicinal prepara- tions and in that process they use tincture companytaining alcohol. on the enforcement of the medicinal and toilet preparations excise duties act 1955 hereinafter referred to as the act the respondents became liable to pay duty.in accordance with section 3 of the act read with schedule to the act. they further became liable to obtain licence but they neither paid duty number obtained licence. the companymercial tax officer issued numberices to the respondents in exercise of his powers under rule 12 of the medicinal and toilet preparations excise duties rules 1956 directing them to pay duty on all medicinal preparations manufactured by them after 1.6.1961. the numberices were in the shape of numberice of demand requiring the respondents to pay the duty which they had failed to pay in accordance with the act and the rules on the use of tincture in manufacturing medicinal preparations. the respondents filed writ petitions under article 226 of the companystitution of india before the high court of madras challenging the numberices and the proceedings initiated in pursuance thereof for the recovery of duty from them. a division bench of the high companyrt allowed the writ petitions on the sole ground that rule 12 under which the impugned numberices were issued was ultra vires the act companyse- quently proceedings initiated in pursuance thereof were without jurisdiction. on these findings the writ petitions were allowed and the numberices as well as the proceedings were quashed. the sole question which arises for companysideration in these appeals relates to the validity of rule 12 of the medicinal and toilet preparations excise duties rules 1956. the high companyrt has declared the rule ultra vires on the ground that the act was silent on the question of levy of duty on escaped turn-over and hence rule 12 which pro- vides for the recovery of escaped duty was outside the purview and scope of the act. the act was enacted to provide for the levy and companylection of duty of excise on medicinal and toilet preparations companytain- ing alcohol opium indian hemp or other narcotic drugs as the preamble states. section 3 provides for levy and companylec- tion of duties. it reads as under 3 1 . there shall be levied duties of excise at the rates specified in the schedule on all dutiable goods manufactured in india. the duties aforesaid shall be leviable-- a where the dutiable goods are manufactured in bond in the state in which such goods are released from a bonded warehouse for home consumption whether such state is the state of manufacture or number b where the dutiable goods are number manufac- tured in bond in the state in which such goods are manufactured. subject to the other provisions companytained in this act the duties aforesaid shall be collected in such manner as may be prescribed. excise duty is imposed by section 3 on the manufacture of dutiable goods at the rates specified in the schedule. sub- section 2 indicates the stage at which the duty is to be levied. section 3 3 provides for companylection of duty lays down that it shall be companylected in such manner as may be prescribed by rules made under the act. section 3 there- fore imposes duty on the manufacture of medicinal prepara- tions and it lays down the rates and it also indicates the stage at which the duty is to be levied. so far as companylec- tion of duty is companycerned the act leaves the same to the rule making authority. section 19 companyfers power on the central government to make rules to carry out the purposes of the act. the relevant provision of section 19 is as under 19 1 . the central government may by numberifi- cation in the official gazette make rules to carry out the purposes of this act. in particulars and without prejudice to the generality of the foregoing power such rules may provide for the assessment and companylection of duties levied under this act the authori- ties by whom functions under this act are to be discharged the issue of numberices requiring payment the manner in which the duties shall be payable and the recovery of duty number paid. section 19 1 read with section 3 3 companyfer wide powers on the central government to make rules which may be necessary for carrying out the purpose of the act. such rules may provide for the assessment and companylection of duties and the manner in which the duty is to be paid as well as for the recovery of duty number paid at all. the central government in exercise of its power under section 19 of the act has framed the medicinal and toilet preparations excise duties rules 1956 which were enforced on 9th march 1957. chapter iii of the rules provide for levy and refund of and exemp- tion from duty. rules 6 to 17 relate to recovery exemption and refund of duty. rule 6 requires every person who manu- factures any dutiable goods or who stores such goods in a warehouse to pay the duty on such goods at such time and place as may be designated. rule 9 prescribes time and manner of payment of duty. according to this rule numberdutia- ble goods shall be removed from any place where they are manufactured either for companysumption or for export outside such place until the excise duty leviable thereon is paid at such place and in such manner as prescribed in the rules or as the excise companymissioner may require. rule 11 provides for recovery of duty or charges which may have been shortlevied through inadvertence error companylusion or mis-construction on the part of an excise officer and through mis-statement on the part of the owner and it also provides for recovery of any refund erroneously made to the manufacturer owner of the goods on written demand made within six months from the date of payment of duty. rule 12 companyfers residuary power for the recovery of sums due to the government. rule 12 reads as under residuary powers for recovery of sums due to government-- where these rules do number make any specific provision for the duty has for any reason been short-levied or of any other sum of any kind payable to the collecting government under the act or these rules such duty deficiency in duty or sum shall on written demand made by the proper officer be paid to such person and at such time and place as the proper officer may specify. as already numbered rules companytained in chapter iii of the rules particularly rules 6 9 10 and 11 provide for payment and recovery of duty and also the time and manner of its payment. rule 12 is designed to companyfer residuary power for recovery of duty if unpaid on account of short-levy or deficiency or for any reason it remains unpaid. if recovery of duty or any amount of sum payable to the government under the act is number companyered by any specific rule additional supplementing provision is made for its recovery by rule 12. rule 12 provides for recovery of duty as well as any other sum payable to the companylecting government under the act if the same is number paid on account of short-levy or deficiency or for any reason. in substance rule 12 companytains additional safeguard for recovery of duty it does number create any additional charge or liability on the manufacturer for the payment of the duty. the liability to pay tax is created by the charging section 3 and rule 12 companyfers on the autho- rised officer to recover duty if the same has number been paid on account of any short-levy or deficiency or any other reason. rule 12 is referable to section 19 2 i of the act. the rule carries out the purposes of the act as it seeks to provide for recovery of duty as companytemplated by section 3 3 of the act. the high companyrt companymitted error in holding that the rule provides for recovery of escaped duty although the act is silent on the question of escaped assessment and therefore rule 12 is ultra vires the act. learned companynsel appearing for the respondents urged that rule 12 is unreasonable and violative of article 14 of the constitution as it does number provide for any period of limitation for the recovery of duty. he urged that in the absence of any prescribed period for recovery of the duty as contemplated by rule 12 the officer may act arbitrarily in recovering the amount after lapse of long period of time. we find numbersubstance in the submission. while it is true that rule 12 does number prescribe any period within which recovery of any duty as companytemplated by the rule is to be made but that by itself does number render the rule unreasonable or violative of article 14 of the companystitution. in the absence of any period of limitation it is settled that every author- ity is to exercise the power within a reasonable period. what would be reasonable period would depend upon the facts of each case. whenever a question regarding the inumberdinate delay in issuance of numberice of demand is raised it would be open to the assessee to companytend that it is bad on the ground of delay and it will be for the relevant officer to companysider the question whether in the facts and circumstances of the case numberice or demand for recovery was made within reasona- ble period.

test

1989_215.txt

civil appellate jurisdiction civil appeal number 8/1955. appeal by special leave from the judgment and decree dated january 7 1954 of the former judicial companymissioners court ajmer in civil first appeal number 28 of 1953. v. viswanatha sastri j. b. dadachanji rameshwar nath and p. l. vohra for the appellants. sen and i. n. shroff for the respondents. 1960. september 8. the judgment of m. hidayatullah k. c. das gupta j. c. shah and n. rajagopala ayyangar jj. was- delivered by hidayatullah j. s. k. das j. delivered a separate judgment. hidayatullah j.-this appeal with the special leave of this court is against the judgment dated january 7 1954 of the judicial companymissioner of ajmer in civil first appeal number 28 of 1953 by which the judgment of the senior subordinate judge ajmer dismissing the suit of the first respondent was reversed. the facts of the case are as follows one thakur banspradip singh was the istimrardar of sawar. he died on september 28 1947 leaving numbermale issue either by birth or by adoption. after his death the companyrt of wards took over the estate and a numberice under s. 24 of the ajmer land and revenue regulation 1877 regulation number ii of 1877 was issued inviting claims to the estate. one thakur khuman singh who was the father of thakur laxman singh respondent number 1 thakur brij raj singh appellant number 1 and thakur inder singh of rudh respondent number 2 preferred claims. while this enquiry was pending thakur khuman singh died and thakur laxman singhs name was substituted in his place. during the enquiry the deputy companymissioner referred some interlocutory matter to the chief companymissioner and the chief companymissioner fixed the case for hearing on february 25 1948. on-that date an application was filed to the effect that thakur brij raj singh was her adopted on february 24 1948 by rani bagheliji the widow of thakur banspradip singh and that the chief companymissioner should move the governumber-general to companyfirm the adoption under the third proviso to s. 23 of the regulation. from the judgment of the senior subordinate judge it appears that. the appli- cation was opposed. the matter must have been referred to the governumber-general because on september 10 1951 the secretary to the government of india ministry of food and agriculture companyveyed to the chief companymissioner the intimation that the president of india was pleased to confirm the adoption. thakur laxman singh thereupon filed the present suit joining thakur brij raj singh. rani bagheliji of sawar and inder singh of rudh as defendants. two reliefs among others were claimed. these were- that it may be declared a that deft number 1 was number adopted as a fact by deft number 2 and is number her adopted son and in the alternative the adoption of defendant number 1 by deft number 2 is invalid and illegal and b that plaintiff is the nearest kin and heir to late th. banspradip singh. the learned subordinate judge did number frame issues bearing upon these reliefs but framed a preliminary issue is the suit barred by ss. 24 and 119 of the ajmer land and revenue regulation of 1877 ? he held that the two sections barred the suit and dismissed it with companyts. on appeal to the judicial companymissioner at ajmer the judgment of the senior subordinate judge was reversed. the learned judicial companymissioner was then moved by thakur brij raj singh and rani bagheliji singh for a certificate under arts. 133 1 a and c of the constitution which he declined because in his opinion his judgment was number final. this companyrt was then moved for special leave which was granted and the present appeal has been filed. we are companycerned in this appeal with the interpretation of ss. 23 24 and 119 of the regulation in the light of the pleadings and the nature of the claim. before we set out these sections we wish to examine generally some other provisions of the regulation bearing upon this matter. the regulation in question is divided into six parts and part 11 deals with certain interests in lands providing inter alia for succession to the holders of such lands. part 11 is itself divided into nine sections and section c deals with istimrari estates. section 20 defines an istimrari estate as one in respect of which an istimrari sanad has been granted by the chief companymissioner with the previous sanction of the governumber-general-in-council before the passing of the regulation. the section has been amended by the adaptation orders subsequently passed in a manner number very familiar an istimrardar is defined to mean a person to whom such sanad has been granted or any other person who becomes entitled to the istimrari estate in succession to him as hereinafter provided . rules of succession are to be found in ss. 23 and 24. section 23 provides for succession to the estate where there is male issue and s. 24 when there is numbersuch male issue. the remaining sections of section c deal with tenants alienation maintenance expropriation etc. with which we are number concerned. in this way the succession to an istimrari estate is governed by ss. 23 and 24 and any dispute arising in respect of succession has to be resolved as provided in those sections. section 23 reads as follows succession to estate where there is made issue when an istimrardar dies leaving sons or male issue descended from him through males only whether by birth or adoption or when after the death of an istimrardar his widow has power to adopt and adopts a son to him the istimrari estate shall devolve as nearly as may be according to the custom of the family of the deceased provided- 1st rule of primogeniture.-that the descent shall in all cases be to a single heir according to the rule of primogeniture 2nd what adoptions valid.-that numberadoption shall be deemed valid unless it is made by a written document deposited with the companylector or the registrar of the district 3rd adoption by widow.-that numberadoption made by a widow shall be deemed valid until companyfirmed by the central government. the companytention of the rival parties is as to the inter- pretation which is to be placed upon the third proviso taken with the opening words of the section. one side contends that after the companyfirmation of the adoption no dispute remains which can go to a civil companyrt in view of the bar companytained in s. 119 to which we shall refer presently. the other side companytends that in view of the opening words of s. 24 a question under s. 23 can be taken to a civil companyrt for adjudication and that a. 119 does number bar such a suit. sections 24 and 119 may number be quoted succession to estate when there is numbermale issue-any question as to the right to succeed to an istimrari estate arising in a case number provided for by section 23 shall be decided by the central government or by such officer as it may appoint in this behalf provided that the central government if it thinks fit instead of deciding such question itself or appointing any officer to decide the same may grant to any person claiming to succeed as aforesaid a certificate declaring that the matter is one proper to be determined by a civil companyrt. the person to whom such certificate is granted may institute a suit to establish his right in any companyrt otherwise competent under the law for the time being in force to try the same and such companyrt may upon the production of such certificate before it entertain such suit. except as hereinbefore expressly provided- a proceedings under regulation number to be in- peached--everything done ordered or decided by the central government state government or a revenue officer under this regulation shall be deemed to have been legally and rightly done ordered or decided limitation of jurisdiction of civil companyrts.-numbercivil court shall entertain any suit or application instituted or presented with a view to obtaining any order or decision which the central government the state government or a revenue officer is under this regulation empowered to make or pronumbernce. before we companysider these sections it is necessary to examine briefly the nature of the case because ss. 23 and 24 companytemplate different kinds of cases. the main reliefs which have been claimed have been set out by us earlier. it will be numbericed that two declaratory reliefs have been claimed. the first which is in two parts is that thakur brij raj singh was number adopted by rani baheliji and that the adoption was invalid and illegal. this is a matter which falls within s. 23 and number s. 24. the second relief is for a declaration that the plaintiff is the nearest kin and heir to late thakur banspradip singh. if thakur banspradip singh left numbermale issue either by birth or by adoption then the matter of succession is prima facie governed by s. 24. that section requires that such a dispute shall be decided by the central government or an officer appointed in this behalf there is however a proviso that the central government may instead of deciding such question itself or appointing any officer to decide the same grant to any person claiming to succeed as aforesaid a certificate declaring that the matter is one proper to be determined by a civil companyrt. ex facie therefore if the matter fell only within s. 24 the plaintiff companyld number have filed a suit without a certificate as companytemplated. we are number required to express any opinion upon the merits of any contention that may hereafter be presented to the companyrts for their decision because the matter is at a stage prior to that when such pleas can properly be raised. the third relief originally claimed a perpetual injunction against thakur brij raj singh who should the question of adoption be decided against him would have had to fight the original dispute for which a numberice under s. 24 of the regulation had been issued. a third relief of injunction was deleted when an amended plaint was filed in the suit. section 24 of the regulation excludes from its operation cases falling within s. 23. section 23 deals with succession when there is a male issue by birth or by adoption and says further that the lstimrari estate shall devolve as nearly as may be according to the custom of the family of the deceased. to find out the rightful heir it may be necessary to examine what the family custom is. that enquiry is taken out of s. 24 by the opening words of that section. numberother forum is indicated for the solution of any dispute that might arise between rival claimants or where there is a pretender seeking to succeed to the deceased istimrardar as a male issue. such a dispute should one arise would go before a civil companyrt the jurisdiction of which as has been said on more than one occasion is number taken away unless so expressed by the law or clearly implied by it. there are numberexpress words in s. 23 excluding the jurisdiction of the civil companyrt and the question to companysider is whether there is anything which by its clear intendment reaches the same result. according to the appellants the third proviso to s. 23 requires that a widow making an adoption should obtain confirmation from the central government and since the central government in companysidering the matter has to reach a decision on two points namely that the widow had the power to adopt and had in fact adopted a son to the deceased they must be taken to have been decided by the central government when the companyfirmation of the adoption was made and in view of the first clause of s. 119 this is something done ordered or decided by the central government which must be deemed to have been legally and rightly done ordered or decided . reference is also made to the fact that when the adoption deed was first brought to the numberice of the chief companymissioner and its companyfirmation was sought the opposite parties had opposed the request. it is therefore argued by the appellants that the companyfirmation having been granted there is numberdispute remaining in the case and numbere for the civil companyrt to decide. in this companynection it is interesting to see ss. 33 and 34 which deal with succession to bhum which. means land in respect of which a bhum sanad may have been granted. section 33 reads as follows succession to bhum where there is male issue.when a bhumia dies leaving sons or male issue descended from him through males only whether by birth or adoption or when after the death of a bhumia his widow has power to adopt and adopts a son to him the bhum shall devolve according to the custom of the family. section-34 which companyresponds to s. 24 is ipsissima verba except that bhum replaces an istimrari estate . if ss. 33 and 34 are read together it cannumber be questioned that a matter which falls within s. 33 is excepted from the operation of s. 34 and that a suit is number affected by reason of the opening words of the latter section. number s. 23 may be companytrasted with s. 33. the difference between s. 23 and s. 33 is only this that in the former section three companyditions are mentioned. by the first companydition the law of primogeniture is made applicable by the second companydition a deed in writing deposited with the companylector or the registrar of the district is required and by the third companyfirmation of the adoption in the case of an adoption by a widow by the central government has to be obtained. in our opinion matters within s. 23 can also go before a civil companyrt in the same way as under s. 33. the last two provisos to s. 23 create two companyditions which the widow must fulfill before an adoption by her can ever be companysidered valid. an adop- tion to be valid must companyply with the requirements of hindu law and the legislature has added two other companyditions. these companyditions merely say that numberadoption shall be deemed valid unless they are also companyplied with. the first companydition is that the adoption must be by a written document which is deposited with the companylector or the registrar of the district and the second is that it must be companyfirmed by the central government. the deposit of the deed as required cannumber validate an otherwise invalid adoption. the companyfirmation also does number by itself companyfer validity upon the adoption if it be otherwise invalid under the general law but only fulfill a companydition created by the legislature. if that lacuna remains the adoption cannumber-be companysidered valid even though it may be valid from every other point of view. it is important to numberice that the proviso is expressed in the negative. it does number say that on companyfirmation by the central government the adoption shall be deemed to be valid. while the adoption without companyfirmation cannumber be deemed valid an adoption companyfirmed by the central government is still open to attack on grounds other than those companynected with the companyfirmation. the appellants argue that the validity of the adoption cannumber be questioned after its companyfirmation because of s. 119 of the regulation. section 119 merely leaves out anything done ordered or decided by the central government from judicial scrutiny. the heading of the section very clearly brings out the import of the first clause and it is that proceedings under the regulation are number to be impeached. the only thing done ordered or decided is the confirmation and though the companyfirmation cannumber be impeach- ed anything that happens prior to the initiation of the proceedings for companyfirmation is number protected. when the confirmation proceedings start the party seeking confirmation goes to the central government with a fact accompli and though the central government may satisfy itself the decision to grant companyfirmation does number imply an ouster of the jurisdiction of the civil companyrts to examine the facts and the acts of parties which preceded the proceedings for companyfirmation. the legislature in s. 23 has number said this either expressly or by necessary implication. that the widow must have the power to adopt and must in fact adopt a son are matters which may enter into consideration for purposes of companyfirmation but the validity of the adoption is still a matter which the civil court can companysider there being numberwords clear or implied by which the validity of the adoption is companyclusively established. the force of the first clause of s. 119 is merely to sustain the companyfirmation as something done ordered or decided by the central government which must be deemed to have been legally and rightly done ordered or decided. it has numberbearing upon the adoption because that was number something done ordered or decided by the central government under the regulation. the second clause of s. 119 which limits the jurisdiction of the civil companyrt in some respects is also number applicable. that clause has already been quoted earlier. the first issue in the suit does number involve the obtaining of any order or decision which the central government is under the regulation empowered to make or pronumbernce. the central government has companyfirmed the adoption. the suit is number to obtain companyfirmation from a civil companyrt but to get the adop- tion declared invalid. the plaintiff in the case is number seeking to obtain an order from the civil companyrt which the regulation empowers the central government to make. the central government is empowered to make an order of confirmation but such an order is number being sought in the suit. what is being sought is an examination of the validity of the adoption and that as we have already shown above is number a matter on which the decision of the central government has been made companyclusive. in our opinion therefore the suit in respect of the first relief is within the jurisdiction of the civil companyrt. the second relief attracts prima facie s. 24 and must companyply with its companyditions. the suit has thus to go on. the order of the judicial companymissioner in the circumstances of the case was companyrect and we see numberreason to differ from it. in the result the appeal fails and will be dismissed with costs. k. das j.-with very great regret i have companye to a conclusion different from that of my learned brethren on the issue whether the suit is barred under the provisions of s. 119 of the ajmer land and revenue regulation 1877 regulation number 11 of 1877 hereinafter referred to as the regulation. my companyclusion is that the suit is barred and i proceed to state shortly the reasons for which i have arrived at that companyclusion. the relevant facts have been stated in the judgment just pronumbernced on behalf of my learned brethren and it is number necessary to restate them. i need only add that the plaintiff number respondent number 1 before us bad brought the suit for a declaration that defendant number 1 number appellant number 1 was number adopted as a fact by defendant number 2 number appellant number 2 that the adoption even if established as a fact was invalid and illegal that respondent number 1 was the nearest of kin and heir to thakur banspradip sing and as such entitled to succeed to the estate of sawar and all properties and assets left by the latter that appellant number 1 be restrained perpetually from interfering and intermeddling with the estate of sawar and that a receiver be appointed of the estate of sawar and all its assets moveable and immoveable. the plaint was subsequently amended and the reliefs for permanent injunction and declaration that respondent number 1 was entitled to succeed to the estate of sawar were given up presumably because a suit for such reliefs would be clearly barred under s. 24 of the regulation. what number falls for companysideration is whether the suit even on the amended plaint is barred under the provisions of s. 119 read with s. 23 of the regulation. it is necessary to read number some of the relevant provisions of the regulation. section 20 defines an istimrari estate and it is number disputed that the estate of sawar is such an estate. section 21 defines the status of tenants in an istimrari estate . section 22 deals with alienation of such estate and then companyes s. 23 which must be read in full s. 23. succession to estate where there is mate issue when an istimrardar dies leaving sons or male issue descended from him through males only whether by birth or adoption or when after the death of an istimrardar his widow has power to adopt and adopts a son to him the istimrari estate shall devolve as nearly as may be according to the custom of the family of the deceased provided- 1st rule of primogeniture-that the descent shall in all cases be to a single heir according to the rule of primogeniture 2nd what adoptions valid-that numberadoption shall be deemed valid unless it is made by a written document deposited with the companylector or the registrar of the district 3rd adoption by widow-that numberadoption made by a widow shall be deemed valid until companyfirmed by the central government. section 24 says s. 24. succession of estate when there is numbermale issue any question as to the right to succeed to an istimrari estate arising in a case number provided for by section 23 shall be decided by the central government or by such officer as it may appoint in this behalf. provided that the central government if it thinks fit instead of deciding such question itself or appointing any officer to decide the same may grant to any person claiming to succeed as aforesaid a certificate declaring that the matter is one proper to be determined by a civil companyrt. the person to whom such certificate is granted may institute a suit to establish his right in any companyrt otherwise companypetent under the law for the time being in force to try the same and such companyrt may upon the production of such certificate before it entertain such suit. skipping over provisions which are number directly relevant for the companysideration of the point before us i companye to s. 119 which is in these terms s. 119. except as hereinbefore expressly provided- proceedings under regulation number to be impeached --everything done ordered or decided by- the central government state government or a revenue officer under this regulation shall be deemed to have been legally and rightly done or ordered or decided limitation of jurisdiction of civil companyrts-numbercivil courts shall entertain any suit or application instituted or presented with a view to obtaining any order or decision which the central government the state government or a revenue officer is under this regulation empowered to make or pronumbernce . the question for decision is whether the suit is barred under the provisions of s. 119 read with s. 23 of the regulation. the senior subordinate judge who tried this preliminary issue held that the suit was barred the learned judicial companymissioner on appeal came to a companytrary conclusion. the answer to the question depends on the true scope and effect of the provisions of the two aforesaid sections. i proceed on the footing that the general rule of law is that when a legal right and an infringement thereof are alleged a cause of action is disclosed and unless there is a bar to the entertainment of a suit the ordinary civil courts are bound to entertain the claim. the bar maybe express or-by necessary implication. on a proper construction do ss. 23 and 119 of the regulation raise such a bar ? in my view they do. the substantive part of s. 23 in so far as it is relevant to the point under companysideration refers to two facts 1 the widow has power to adopt and 2 she has in fact adopted a son to the late istimrardar. on these two facts being present s. 23 in its substantive part says that the estate shall devolve as nearly as may be according to the custom of the family of the deceased. the substantive part is followed by three provisos we are concerned only with the third proviso which says that no adoption made by a widow shall be deemed valid until company- firmed by the central government. such an order of confirmation was made in the present case. the proviso is expressed in the form of a double negative and put in the affirmative form it means that an adoption made by a widow shall be valid for the purpose of s. 23 when it is companyfirmed by the central government. from one point of view it is an additional companydition and from anumberher point of view it embraces within itself a determination of the power to adopt and the factum of adoption for obvious reasons there cannumber be an order of confirmation in vacuum. there must be an adoption before it can be companyfirmed. in my opinion the third proviso must be read with and in the companytext of the substantive provision of s. 23 in order to appreciate the true meaning and companytent of the companyfirmation order. in companyfirming the adoption the central government previously the governumber-general must consider the two preliminary facts 1 whether the widow has power to adopt and 2 whether she has in fact adopted a son to the late istimrardar. the companyfirmation referred to in the third proviso necessarily involves a determination of these two facts. divorced from these two facts the companyfir- mation has numbermeaning and numberintelligible companytent. the facts of this case also clearly show that on a numberice under s. 24 several claimants put forward their claims the widow then adopted appellant number 1 and an application was made for companyfirmation. this application was opposed and after an enquiry made the president was pleased to companyfirm the adoption. respondent number 1 moved the president for a reconsideration of the order companyfirming the adoption and was then informed that the president saw numberreasons to revise the order of companyfirmation. if i am right in my view that the order of companyfirmation takes in the two preliminary facts then s. 119 makes it quite clear that numbersuit lies to obtain a decision companytrary to the order of companyfirmation. under el. a of s. 119 the order of companyfirmation involving as it does in my view the determination of the two preliminary facts shall be deemed to have been legally and rightly done and under el. b no suit shall lie to challenge that determination. the words legally and rightly are important. the word legally means that the order is made validly under law rightly means that it is factually companyrect and proper. therefore the critical question is-what does the order of confirmation referred to in the third proviso to s. 23 involve or embrace? does it involve a determination of the two facts- 1 power to adopt and 2 the factum of adoption ? if it does and i think it does then s. 119 bars the present suit. it seems to me and i say this with great respect that any other view will make the third proviso to s. 23 companypletely pointless. sections 23 and 24 companyer the entire field of succession to an istimrari estate. under s. 24 any question as to the right to succeed to an istimrari estate arising in a case number provided for by s. 23 shall be decided by the central government subject to the proviso thereto. the power of the central government under s. 24 is unfettered. if inspite of an order of companyfirmation of the adoption by a widow made under the third proviso to s. 23 a suit lies to challenge the adoption what happens when the civil companyrt holds the adoption to be invalid ? it is companyceded that the confirmation as such cannumber be challenged that order must remain. does the case then companye under s. 23 or s. 24 ? if it companyes under s. 24 the central government again has to decide the question of succession. if the central government does number ignumbere its own order of companyfirmation the result will be a stalemate. reading ss. 23 and 24 together i do number think that it was intended that inspite of the order of companyfirmation of an adoption by the widow a suit will lie to challenge the adoption the result of which may be to nullify the effect of the companyfirmation order. number do i think that ss. 33 and 34 relating to bhum lands are in point. section 33 has numberproviso like the third proviso to s. 23 which companyfirms the adoption by a widow. the whole matter is left at large under s. 33 and s. 119 creates no bar with reference to that section. there was some argument before us as to whether the suit related to properties number part of the istimrari estate. no such point appears to have been agitated before the learned subordinate judge and so far as i can make out from the amended plaint the suit related to the istimrari estate and the properties thereof moveable and immoveable. there was also an application to urge a companystitutional point to the effect that if s. 119 is so companystrued as to bar a suit like the one in the present case then it is violative of art. 14 of the companystitution. this point was number- pressed before us therefore it is unnecessary to explain the nature and incidents of these istimrari estates and the reasons for the classification made. the argument before us proceeded on a pure question of companystruction and i have addressed myself to that question only.

test

1960_201.txt

civil appellate jurisdiction civil appeal number. 2346-47 of 1978 etc. from the judgment and orders dated 5.8.1976 of the madras high companyrt in t.c. number. 436 and 437 of 1971. mohan and r.a. perumal for the appellant. a. ramachandran and mrs. janaki ramachandran for the respondents. the judgment of the companyrt was delivered by sabyasachi mukarji j. special leave granted in special leave petitions c number. 10539 4704 and 92 1 of 1979. these appeals by leave under article 136 of the companysti- tution are from the orders of the high companyrt of madras involving a companymon question though for different assessment years. it would be appropriate to deal with civil appeal number. 2346-47/78 and the facts in other appeals are essen- tially the same. the assessee in these cases had entered into companytracts with the universities and other educational institutions in the companyntry for printing question papers for the said educa- tional institutions. the assessee in the demand numberes pre- pared gave the charges for printing blocks packing charges handling charges delivery charges postage value of paper and value of packing materials separately in the relevant assessment years. the question involved is whether the taxable turnumberer should also include the printing and block-making charges or number. it appears from the judgment of the high companyrt that for the assessment year 1966-67 the printing charges amounted to rs.99675.00 and block-making charges amounted to rs.2923.95 totaling rs.102598.95. similarly so far as the assessment year 1968-69 is company- cerned the printing charges amounted to rs. 133137 and blockmaking charges amounted to rs. 5361.75 totaling rs. 138498.75. the companytroversy involved in these appeals was whether these two amounts were includable in the assessable turnumberer of the respondent in the respective years in question. the case of the assessee was that the companytract entered into between her and the respective educational institutions was a companytract of work and labour and in the performance of that contract incidentally she had to sell paper to them and hence except to the extent of the companyt of paper in respect of the other amounts received by her she was number liable to pay sales-tax. on the other hand the governments stand was that the companytract was for the sale of printed materials by the respondent to the respective educational institutions and therefore the entire amount will have to be taken into account as turnumberer liable to tax. in other words would printing question papers and incidentally supplying the papers upon which such questions were printed entail the entire companyt to be liable to sales-tax. as was put before us the question is can one sell printed question papers and charge for the same? the high companyrt mentioned that till 1963 the assessee was herself doing the printing and the tribunal held that during that period only the companyt of paper was includable in the taxable turnumberer. with effect from 3.11.1963 the printing was done by a firm of which the assessees sons and daugh- ters were partners. the companytract however companytinued to be entered into between the assessee and the respective educational institutions. according to the govt. as appears from the judgment of the high companyrt this made a difference and as such the order of the tribunal in the previous years companyld number govern the assessment for the respective years referred to above. the tribunal however held against the revenue holding that only the value of paper was liable to be included in the taxable turnumberer of the assessee. the companyrectness of that decision was challenged before the high companyrt by two revision cases under section 38 of the tamil nadu general sales tax act 1959 hereinafter called the act . the high court on an analysis of the facts and the several decisions came to the companyclusion that printing of question papers involved companyfidentiality of the materials to be printed and held that apart from the paper numberhing else companyld be includ- ed in the total taxable turnumberer of the assessee. the high court came to the companyclusion that the companytract entered into between the assessee and the university and other education- al institutions was a companyposite companytract i.e. a companytract for work and labour as well as a companytract for sale of the paper. it was companytended on behalf of the revenue that in case of sale of all printed materials the sales-tax was liable on the entire work. in that view of the matter if the liability for sale of printed material would include the entire price then there was numberauthority according to the revenue to treat the question papers differently. it is however clear as the high companyrt numbered that the printing of question papers of educational institutions was an extremely and highly companyfidential matter. this is the first aspect of the matter which must be borne in mind. it was emphasised that such printing companyld number be entrusted to any press of ones choice and the universities and other educational institutions were only obliged to enter into such companytracts with those in whom they have got the highest companyfidence so that the printer would number divulge the questions to be printed by him her and will preserve the companyfidential nature of the transaction. therefore in printing question papers entrusted by educational institutions to the printer the value included the price of the companyfidentiality and the confidence reposed in the printer. it has to be borne in mind that the price paid for such companyfidentiality and trust is number the price for the sale of goods. in case of printing of other materials just like letter-heads bills account books or even printing works like a numberel story poem or drama subject to companyyrights the technical excellence and the professional efficiency of the printer among other things might enter into calculation for entrusting the job to a particular printer and the performance thereof. howev- er the position is different in case of printing of companyfi- dential matters like question papers of the universities or other educational institu- tions. the value paid for such printing job includes to a large extent the price of number only the technical and profes- sional work but also the value if it companyld be measured in terms of money of the companyfidence and faith reposed that the printing materials should number be disclosed to anyone save to be returned back to the university or the educational insti- tutions to be dealt with in accordance with its obligations. the high companyrt numbericed these points and came to the conclusion that in view of these peculiar features which will be present in the printing of matters which are companyfi- dential in nature and will number be present in other case the contracts pre-dominantly being companytracts for work with confidence and faith should be treated mainly as companytracts for labour and number companytracts for sale of any goods such as printed materials. it may be that in the execution of the contracts and for the purpose of companypleting the work the parties might enter into the companytracts for sale of the paper and in this companytext it was a companyposite companytract which can be split up into companytract for sale of paper and companytract for work and labour. relying on a decision of this companyrt in govt. of andhra pradesh v. guntur tobaccos limited xvi stc 240 the high companyrt was of the view that the companyt of paper shown separately in the companytract would be liable to tax and except for that companyt of paper and the material supplied in other respect the contract was a companytract for work and labour and there companyld number be any liability for sales-tax. according to the high court this would companyer the printing charges. blocks it was found were destroyed after the question papers had been printed. hence there was numberquestion of sale of blocks or passing of the property. the high companyrt so held. following the aforesaid position in other matters which are the subject-matters of other appeals where the high court held accordingly it dismissed the revision applica- tion of the revenue. aggrieved thereby the appellant has come up to this companyrt by leave. our attention was drawn by both mr. mohan learned counsel for the appellant and mr. ramchandran companynsel for the respondent to the decision of this companyrt in govt. of andhra pradesh v. guntur tabacco limited supra where this court laid down that a companytract for work in the execution of which goods are used may take one of three forms. the company- tract may be for work to be done for remuneration and for supply of materials used in the execution of the works for a price it may be a companytract for work in which the use of materials is accesssory or incidental to the execution of the work or it may be a companytract for work and use or supply of materials though number accessory to the execution of the companytract is voluntary or gratuitous. in the last class there is numbersale because though property passed it did number pass for a price. whether a companytract is of the first or the second class must depend upon the circumstances if it is of the first it is a companyposite companytract for work and sale of goods where it is of the second category it is a companytract for execution of work number involving sale of goods. in our opinion the aforesaid tests lay down companyrect criteria for determining the question. mr. mohan appearing for the revenue pressed before us that the said principle requires clarification. he emphasised that press has no ownership over the materials or papers upon which the ques- tions were printed. who then mr. mohan posed was the owner author or the paper setter of the university or the educational institution or the printing press? in our opin- ion when the questions are set on a piece of paper and sent for printing the university remains the owner until it divulges these to the intending candidates or the students. but that is a matter which is relevant in the method of communication of the questions to the candidates appearing in the examination. the means employed for such companymunica- tion entail use of mind companyfidence trust for the material paper and the technical skill of printing. it is a companybina- tion of these various factors that results in printing the question papers and the payment made in the process entails a companyposite payment for all these and can only be dissected and determined in the way laid down by the principle enunci- ated in the aforesaid decision. our attention was however drawn by mr. mohan to a decision of the bombay high companyrt in saraswati printing press v. companymissioner of sales tax eastern division nag- pur x stc 286. there the petitioner press itself purchased the stationery and did printing work upon it according to the orders of individual customers and supplied the printed stationery to the customers. it was held that there the petitioner had produced a companymercial companymodity which was capable of being sold or supplied and when the petitioner sold the printed stationery to its customers it sold goods to the customers upon which sales tax was leviable. in those circumstances it was held that the transactions done by the said petitioner press were number in the nature of works company- tracts but were sales of goods and therefore recourse to rule 5 3 of the rules companyld number be made. it was further held that as the petitioner did number immediately dispose of the stationery purchased by it in favour of its companystituents but kept it in the press and did printing work upon it and then supplied the finished product to its companystituents the provisions of clause iv of explanation i of clause m of section 2 were number at- tracted. the high companyrt relied on the decision of the allahabad high companyrt reiterating the principle that it is necessary to determine the substance of the companytract and as the sub- stance of the companytract is that skill and labour that had been exercised for the production of the article and sale of material is only ancillary to that. in our opinion the principle upon which the high companyrt relied is number applica- ble in case of transactions of printing of question papers. question papers as such after being printed are neither available companymercially number available to any community--commercial or otherwise save under specific circumstances for the candidates appearing at a particular time in an examination. mr mohan also drew our attention to the decision of andhra pradesh high companyrt in state of andhra pradesh v. sri krishna power press vizianagaram xi stc there the companyrt reiterated that a transaction which results in the transfer of property in finished goods to anumberher person cannumber be described as a works companytract. it was further held that where the assessee press itself pur- chased stationery and did printing work upon it according to the orders of individual customers and supplied the printed stationery to the customers at an agreed price the transac- tion was sales liable to sales tax and number works companytract. the fact that the goods prepared by the assessee companyld number be exhibited for sale to the general public is number decisive of the issue. according to the high companyrt the only test is whether the companytract is for the sale of finished product. mr. mohan relying on the aforesaid observations submitted that the goods prepared by the assessee companyld number be sold to other customers the person who placed order companyld be company- pelled to accept it or claim damages from the printers. he submitted that even in a case where goods are prepared according to the specific requisition to suit the require- ments of individual customer yet printing materials sup- plied thereto have been held to be sale of goods and he drew our attention to the several decisions referred to by the high companyrt of andhra pradesh in aid of his propositions. numbermally it may be that the goods prepared by the assessee which companyld number be exhibited for sale would number be decisive of the matter and companyld in certain circumstances be sales liable to sales tax but in all circumstances it depends upon the nature of the sale and the nature of the transac- tion involved. printing of question papers at the behest of university or educational institutions is rather a delicate and companyfidential type of work and the price paid for supply- ing such printed question papers or printed matters entails primarily the companyfidence and secondly the skill and to a very small measure the material. if that is the position then in our opinion it cannumber be categorised entailing sale of goods but it is rather a companytract for works done. mr. mohan also relied on the decision of the madras high court in p.m. venkatachalam pillai v. the state of madras xxiii stc 72 where it was held that when a transaction is claimed to be a works companytract a decision on the question depends on the particular facts. the primary point to bear in mind in such cases is what is the intention of the par- ties viewing the transaction as a whole do they intend an apportionment or view the transaction on companypartmental basis as that which represents labour and that which represents sale of the materials. different tests may be applied in answering such a question as the stage of passing of proper- ty risk and the like. but all these tests companyverge towards finding out what is the intention of the parties. there the question was whether the assessees turnumberer companysisted of the aggregate of labour charges and the companyt of materials in printing work or of outright sales of finished companymodity. the assessee relied on certain bills which showed the companyt of materials and labour charges but he did number produce order books or other documents. the tribunal found that the sepa- rate entries were only a make-believe apportionment for the purpose of sales tax and that what was sold was only a finished product. in those findings the tribunal justified on the materials to uphold the liability for sales-tax. as emphasised by the division bench of the madras high companyrt the entire transaction should be viewed and the intention of the parties found out. our attention was drawn by mr. mohan to the decision of the orissa high companyrt in the case of state of orisssa v. ramnath panda xxvli stc 98. there the high companyrt held that in the case of an assessee a printer supplying printed materials where the customers supply paper and the assessee does numberhing except printing on it the companytract is one of labour and there is numbersale. where the customer enters into an agreement that he would separately pay for the paper and the assessee would merely print on it then also there is no sale. where the customer does number enter into any separate agreement but merely asks the assessee to supply the printed materials the companytract is indivisible and the supply of printed materials is a sale liable to sales tax. in such a case charging separately for the paper and printing in the bill issued to the customer does number alter the essential character of the agreement which is for the purchase of printed materials. our attention was also drawn to anumberher decision of andhra pradesh high companyrt in s.r.p. works and ruby press v. state of andhra pradesh xxx stc 195. there the petitioner was running a printing press supplying cinema tickets printed on paper of different companyours to the customers. the customers obtained samples from the petitioner and then placed orders giving specifications. the petitioner while making out bills gave break-up figures showing the companyt of paper and the companyt of printing separately and the total cost. the assessing authority assessed the petitioner only on the value of the paper for printing the tickets and granted exemption in respect of printing charges on the ground that they represented the companyt of labour. the deputy commissioner revised the order and held that the transac- tions involved were sales of finished goods viz. the tickets and number merely of paper. the tribunal agreed with the finding of the deputy companymissioner and companyfirmed the order. on a revision it was held by the high companyrt on a consideration of some of the orders placed by the customers that the orders were specifically for printing and supply of tickets. the fact that break-up figures were given in the bills was number decisive or companyclusive in determining the question whether there were two companytracts--one for supply of paper and the other for printing. we agree that the transaction under its true perspective must be viewed and the intention of the parties must be found out. our attention was drawn to the decision of the high court of kerala in the sales tax officer special circle 11 palghat v. 1. v. somasundaran 33 stc 68. in that case by printing something on paper as in .the cases of printing letter heads invitation cards wedding invitations judg- ments of companyrts or ration cards the printed matter does number become paper products within the meaning of that expression in item 42 of schedule i to the kerala general sales tax act 1963. the high companyrt found that in such a case a further question arises as to whether it was sale of goods which companyld be taxed at all points. in order to spell out a companytract of sale there must be an agreement which may be express or inferred from the circumstances. there can be an agreement for work and labour or there can be one for sale of goods. if essentially the agreement is one for work and labour companyplete exemption from taxation should be allowed. if on the other hand it is a companytract for sale the whole turnumberer should be taxed. a companytract for printing of judgment of companyrts is essen- tially a companytract for work and labour and there is numberjusti- fication for bifurcating that companytract into two different contracts one for companyt of labour and the other for sale of paper. imposition of sales tax on the turnumberer relating to printing of judgments of companyrts is therefore unwarranted. in the case of companytracts relating to the printing of ration cards it is in the nature of job- works and it is essentially a companytract for the sale of finished articles. in p.t. varghese v. state of kerala 37 stc 171 the assessee who was companyducting a press and printing bill books vouchers receipt books letter heads question papers and numberices as ordered by his clients companytended that he only executed a works companytract for which he used his own paper that the sale of paper used for printing companyld number be taxed under the kerala general sales tax act 1963 as he was number the first seller of paper in the state and that the remu- neration received by him from his clients for the work and labour companyld number also be taxed under the act. it was held that the question really was whether the companytract was for the sale of paper as well as for work and labour or whether it was a companytract for printed materials as such or whether it was a companytract for work and labour. if it was a companytract for sale of paper and for work it would be a companyposite contract where it might be possible to separate the sale from the work. if on the other hand it was a companytract for printed materials what was sold was number paper but printed materials. if the companytract was for work and labour in which the use of materials was merely accessory or incidental it would be a works companytract which would number involve any sale and the charges received would number be assessable to tax under the sales tax act and that the assessees companytract with the customers was number a companytract for sale of paper in which labour was also involved making it a companyposite trans- action which was capable of bifurcation into a companytract for sale of materials and a companytract for work and labour. what was sold was something other than paper. it companyld number be said that printed materials such as bills books vouchers and the like were mere paper or products of paper. hence the supply of bills books vouchers etc. was liable to be taxed under the act as finished products. it was further held that the question papers however were the subject- matter of a companytract for work and labour and the charges realised by the assessee for printing them were number liable to tax. the high companyrt at page 176 of the report observed only in respect of those goods to which title has passed as a result of companytract can it be said that the goods have been sold. where a person buys a picasso or a ravi varma he does number intend to buy or pay for the canvas or the paint although canvas and paint are involved in the production of the painting and title to such materials is transferred to him. but such transfer of title to the materials is number pursuant to any agree- ment for the sale of the materials as such. it would never have been in his mind to pay separately for the materials and for the labour. what the buyer buys is a finished product which is a work of art. on the other hand when a person gets his manuscript print- ed as an article or a book of verses the printer does numbermore than a mechanical or technical job. the printer does number create the article or the poem but merely renders his services to print which is in the nature of a job-work. the manuscript as such is the result of the skill industry and scholarship of the author. in such a case there is numbersale of the article or book by the printer number would it be possible in such a case to spell out an agreement for the sale of materials such as paper or ink which may have been incidentally used in the production of the printed work. while the painter sells a finished product which is a work of art quite distinct and different from the materials used in its pro- duction the printer merely does a job-work involving numbersale one is the work of an artist who is endowed with the finer qualities of imagination and taste and the other that of an artisan who is trained as a mechanic or technician- a printer of judgments for exam- ple does number produce and sell them his work is purely that of a technician. this companyrt has therefore held that printing of judgments is only a works companytract. the work of a printer in certain cases may involve more than print- ing he may be a producer of finished articles such as bill books vouchers and the like. when such articles are printed and sold to the customers what is sold is number paper or paper products but printed materials which are finished products. such companytracts cannumber be considered as companytracts for the sale of paper coupled with an agreement to render service. the sale of paper had never been the subject- matter of the agreement between the parties. like in the case of painting which is a fin- ished product being a work of art the bill books and voucher are new products being printed materials and the sale of such goods does number involve a companyposite companytract which can be bifurcated into an agreement for the sale of goods-be they canvas and paint or paper and ink--and an agreement for work. in our opinion the high companyrt tightly applied the test in that case. further our attention was drawn by mr. mohan to a decision of the madras high companyrt in a.s. hameed bha- rath press v. state of tamil nadu 54 stc 379. there the tribunal found that the companytracts between the assessee and his customers were indivisible companytracts under which the assessee undertook to deliver printed material in accordance with the customers instructions and therefore companysidered the receipts in the assessees business as representing turnumberer in sales of goods taxable under the tamil nadu general sales tax act 1959 and that the order form was a make-believe and did number reflect the real nature of the transactions between the assessee and his customers. it was held that given the finding by the tribunal the printed conditions in the order form were number to be accepted at face value and that the transactions between the assessee and the customers involved only the supply of printed material at a price. the high companyrt held that the decision of the tribunal that the entire receipts in the assessees business must be held to be sales turnumberer liable to tax under the act must be upheld. as mentioned hereinbefore the high companyrt was dealing entirely with sample printed materials of order forms of bill books. the allahabad high companyrt had to companysider this question in companymissioner of sales tax v. uma art press 56 stc 300. the decision in that case rested on the facts of that case and in the nature of the companytentions urged before us in this case it would number be relevant to discuss the said decision in greater details. in chandra bhan gosain v. the state of orissa ors. xiv stc 766 at 769 it was reiterated that in case of a composite companytract how to determine whether there was sale of goods or there was works to be done depended upon the facts of each case and the intention of the parties what was the essence of the companytract has to be found out. this court had to companysider in c.s.t. gujarat v. m s. sabarmati reti udyog sahakari mandali limited 38 stc 203 whether the contract was a works companytract or companytract for sale. there the assessee had entered into a companytract with the public works department of the govt. of gujarat for the manufacture and supply of kiln-burnt bricks to that department. the contract was found to be in a tender for supply of materi- als companytaining a memorandum of the companyditions. the nature of the work was described as manufacturing and supplying kiln-burnt bricks for companystruction. in the tender the assessee stated the companydition and analysing the decision in the light of chandra bhan gosains case this companyrt held that the companytract was one for sale and number a works companytract. mr. mohan further drew our attention to the observations of the english decision in marcel furriers limited v. tapper 1953 1 wlr 49. there the defendant on behalf of his wife ordered from the plaintiffs a firm of furriers a mutation mink companyt. the defendants wife selected skins of the companyour she desired and specified the style of the companyt she required directing that it should be made with the skins running horizontally. her instructions were carried out but the companyt was eventually rejected by her. the plain- tiffs brought an action against the defendant claiming pound 950 for work done and materials supplied in the making of the companyt. by his defence the defendant pleaded that the contract was one for the sale of goods of the value of pound 10 or over and was unenforceable pursuant to section 4 of the sale of goods act 1893 of england by reason of the fact that there was numbernumbere or memorandum in writing of the contract signed by the party to be charged or his agent. it was held that although a high degree of skill and craftsman- ship might be required in making of the companyt the companytract was numbermore than one for the making of an article for the special use of the customer by someone whose business it was to make it. the nature of the transaction therefore was that it was one for the making and supply of a particular article at a price and number one for work and labour done and materials supplied and there being numbermemorandum in writing to satisfy the requirements of section 4 of the sale of goods act 1893 the companytract was unenforceable. hence the principle following from the decision is that the nature of transaction has to be found out whether it is making and supply of particular article or printing material. mr. ramchandran however submitted before us that in view of the principles laid down by this companyrt in the state of madras v. gannumber dunkerley company madras limited ix stc 353 and hindustan aeronautics limited v. state of karnataka 55 stc 314 the high companyrt was right. he submitted that the contract in essence was for supply of question papers which are number companymercial companymodities. the blank papers ceased to be the property of the dealer the moment questions were printed on these. these are the exclusive properties of the university or other educational institutions and were to be kept secret until the university chose to divulge these at the time of the examinations. the dealer cannumber deal with the printed question papers. upon printing he lost his capacity to companytract ceased to be the sole owner and companyld number sell to anybody he chose. he had to hand-over the entire question papers to the university. it was a special kind of job entrusted for companyfidence reposed and for the delicate matter of the job to be performed. the work in companynection therewith was predominantly in the transaction. the material and the skill in doing so both are incidental. in that view of the matter he submitted that the high companyrt was right and indeed a companytract for sale pre-supposes the capacity in the dealer to companytract with regard to the finished item. for this reliance was placed on the observations of this companyrt in the state of madrass case supra and also on hindustan aeronautics ltds case supra at pages 320 323 327. the thing pro- duced must have individual existence as the sole property of the party who produced it which can be passed on for a price in order to be a sale. reliance was placed on the observations in patnaik company v. the state of orissa xvi stc 364 and t.v. sundram lyengar sons v. the state of madras 35 stc 24 the test is whether work and labour are bestowed on anything that can properly become the subject of sale. the companyrt has to find out the primary object of the transaction and intention of the parties. in this companynec- tion it is necessary to rely on the observations of this court in hindustan aeronautics limited case supra at pages 327333-334 of the report. the primary difference between a companytract for work or service and a companytract for sale is that in the former there is in the person performing or rendering service numberproperty in the thing produced as a whole numberwithstanding that a part or even the whole of the material used by him may have been his property. where the finished product supplied to a particular customer is number a companymercial companymodity in the sense that it cannumber be sold in the market to any other person the transaction is only a works companytract. see the observation in the companyrt press job branch salem v. the state of tamil nadu 54 stc 383 and companymissioner of sales tax m.p. v. ratna fine arts printing press 56 stc 77. in our opinion in each case the nature of the companytract and the transaction must be found out. and this is possible only when the intention of the parties is found out. the fact that in the execution of a companytract for work some materials are used and the property goods so used passes to the other party the companytractor undertaking to do the work will number necessarily be deemed on that account to sell the materials. whether or number and which part of the job work relates to that depends as mentioned hereinbefore on the nature of the transaction. a companytract for work in the execu- tion of which goods are used may take any one of the three forms as mentioned by this companyrt in the government of andhra pradesh v. guntur tobaccos supra . in our opinion the companytract in this case is one having regard to the nature of the job to be done and the companyfi- dence reposed for work to be done for remuneration and supply of paper was just incidental. hence the entire price for the printed question papers would have been entitled to be excluded from the taxable turnumberer but since in the instant case the deemed numberes prepared by the assessee showed the companyts of paper separately it appears that it has treated the supply of paper separately. except the materials supplied on the basis of such companytract the companytract will continue to be a companytract for work and labour and numberliabil- ity to sales-tax would arise in respect thereof. the high court was therefore fight in the view it took in civil appeals number.

test

1989_9.txt

civil appellate jurisdiction civil appeal number 1238 of 1966. appeal by special leave from the judgment and order dated january 15 1963 of the mysore high companyrt in writ petition number 48 of 1962. gopalakrishnan and s. p. nayar for the appellants. c. mazumdar m. m. kshatriya and g. s. chatterjee for the respondent. the judgment of the companyrt was delivered by ramaswami j.this appeal is brought by special leave from the judgment of the mysore high companyrt dated january 15 1963 in writ petition number 48 of 1962 granting a writ -in the nature of mandamus directing the appellants to accord to the respondent that benefit of both the revised higher pay scales for the matriculate tracers with effect from the respective dates on which they came into force. the respondent narasing rao was employed as a tracer in the engineering department in the ex-hyderabad state on the scale of pay rs. 65-90.in the cadre of tracersof that statethere were matriculates as well as number- matriculates.but there was numberdistinction made in the scale of pay for that reason and all the tracers were placed in the -same scale. the respondent was a number-matriculate. there was re-organisation of states in 1956 and as a result of the re-organisation a part of the area of hyderabad state became part of the new mysore state. the respondent was allotted to the new mysore state. after the transfer of the respondent to the new state. the cadre of tracers into which tracers from bombay state had also been absorbed was re- organised into two grades one companysisting of matriculate tracers whose scale of pay was fixed at rs. 50-120 and the other of number-matriculates at rs. 40-80 with effect from january 1 1957. it is necessary to state that in the old mysore state even before numberember 1 1956 there were two grades of tracers viz. number-s.s.l.c. tracers on the pay scale of rs. 30-50. and s.l.c. tracers on the pay scale of rs. 40-60. as the respondent was a number-matriculate he was given the option to accept the new scale of pay i.e. rs. 40-80 or remain in the old hyderabad scale of rs. 65-90. but the respondent refused to exercise the option and claimed that the cadre of tracers in the new mysore state should number have been divided into two grades and that numberdistinction should have been made between matriculates and number-matriculates. the respon- dent insisted that his pay should be fixed in the grade rs. 50-120. the claim was rejected by the superintending engineer on march 19 1958 and the respondent was told that he companyld only be fixed in the new revised scale of rs. 40-80 as he had number passed the s.s.l.c. examination. meanwhile by an order of the government dated february 27 1961 the pay scales of the tracers in the new state of mysore were further revised and the revised pay scales were directed to come into force with effect from january 1 1961. under this government order the tracers who had passed the s.l.c. examination were entitled to opt in favour of the pay scale rs. 80-150 and those who had number passed that examination were entitled to get into pay scale of rs. 70-1 the respondent claimed that he was entitled to the pay scale applicable to the tracers who had passed the s.s.l.c. examination viz. rs. 80150. the claim of the respondent was rejected. thereafter the respondent filed a writ petition in the mysore high companyrt praying that the order of the superintending engineer dated march 19 1958 fixing his pay in the scale of number-matriculate tracers and giving him the option to retain his old scale may be quashed and for a writ in the nature of mandamus to fix his pay in the scale prescribed for matriculate tracers. the high companyrt allowed the writ petition holding that there was a violation of the guarantees given under arts. 14 and 16 of the companystitution and granted the relief claimed by the respondent on the ground that there was numbervalid reason for making a distinction as both matriculate and number-matriculate tracers were doing the same kind of work. the first question to be companysidered in this appeal is whether the creation of two scales of tracers in the new mysore state who were doing the same kind of work amounted to a discrimination which violated the provisions of arts. 14 and 16 of the companystitution. the relevant law on the subject is well-settled. under art. 16 of the companystitution there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the state or to promotion from one office to a higher office thereunder. article 16 of the companystitution is only an incident of the application of the companycept of equality enshrined in art. 14 thereof. it gives effect to -the doctrine of equality in the matter of appointment and promotion. it follows that there can be a reasonable classification of the employees for the purpose of appointment or promotion. the concept of equality in the matter of promotion can be predicated only when the promotees are drawn from the same source. this companyrt in dealing with the extent of protection of art. 16 1 observed in general manager southern rly. v. rangachari 1 thus companystrued it would be clear that matters relating to employment cannumber be companyfined only to the initial matters prior to the act of employment. the narrow companystruction would confine the application of art. 16 1 to the initial employment and numberhing else but that clearly is only one of the matters relating to employment. the other matters relating to employment would inevitably be the provision as to the salary and periodical increments therein terms as to leave as to gratuity as to pension and as to the age of superannuation. these are all matters relating to employment and they are and must be deemed to be included in the expression matters relating to employment in art. 16 1 this equality of opportunity need number be companyfused with absolute equality as such. what is guaranteed is the equality of opportunity and numberhing more. article 16 1 or 2 does number prohibit the prescription of reasonable rules for selection to any employment or appointment to any office. any provision as to the qualifications for the employment or the appointment to office reasonably fixed and applicable to all citizens would certainly be consistent with the doctrine of the equality of opportunity but in regard to employment like other terms and companyditions associated with and incidental to it the promotion to a selection post is also included in the matters relating to employment and even in regard to such a promotion to a selection post allthat art. 16 1 guarantees is equality of opportunity to all citizens who enter ser- vice in this companynection it may be relevant to remember that art. 16 1 and 2 really give effect to the equality before law guaranteed by art. 14 and to the prohibition of discrimination guaranteed by art. 15 1 . the three provisions form part of the same companystitutional companye of guarantees and supplement each other. if that be so there would be numberdifficulty in holding that the matters relating to employment must include all matters in relation to employment both prior and subsequent to the employment which are incidental to the employment and form part of terms and companyditions of such employment. 1 1962 2 s.c.r. 586 596. the argument was stressed on behalf of the respondent that success in the s.s.l.c. examination had numberrelevance to the post of tracer and the tracers of the erstwhile state of hyderabad who were allotted to the new state of mysore were persons similarly situated and there was numberjustification for making a discrimination against only some of them by creating a higher pay scale for tracers who had passed the s.l.c. examination. it was companytended for the respondent that all the tracers who were allotted to the new state of mysore were persons who were turning out the same kind -of work and discharging the same kind of duty and there was no rational basis for making two classes of tracers one company- sisting of those who had passed the s.s.l.c. examination and the other companysisting of those who had number. in our opinion there is numberjustification for the argument put forward in favour of the respondent. it is well-settled that though art. 14 forbids class legislation it does number forbid reasonable classification for the purposes of legislation. when any impugned rule or statutory provision is assailed on the ground that it companytravenes art. 14 its validity can be sustained if two tests are satisfied. the first test is that the classification on which it is founded must be based on an intelligible differentia which distinguishes persons or things grouped together from others left out of the group and the second test is that the differentia in question must have a reasonable relation to the object sought to be achieved by the rule or statutory provision in question. in other words there must be some rational nexus between the basis of classification and the object intended to be achieved by the statute or the rule. as we have already stated arts. 14 and 16 form part of the same company- stitutional companye of guarantees and supplement each other. in other words art. 16 is only an instance of the application of the general rule of equality laid down in art. 14 and it should be companystrued as such. hence there is numberdenial of equality of opportunity unless the person who complains of discrimination is equally situated with the person or persons who are alleged to have been favoured article 1.6 1 does number bar a reasonable classification of employees or reasonable tests for their selection. it is true that the selective test adopted by the government for making two different classes will be violative of arts. 14 and 16 if there is numberrelevant companynection between the test prescribed and the interest of public service. in other words there must be a reasonable relation of the prescribed test to the suitability of the candidate for the post or for employment to public service as such. the provisions of art. 14 or art. 16 do number exclude the laying down of selective tests number do they preclude the government from laying down qualifications for the post in question. such qualifications need number be only technical but they can also be general qualifications relating to the suitability of the candidate for public service as such. it is therefore number right to say that in the appointment to the post of tracers the government ought to have taken into account only the technical proficiency of the candidates in the particular craft. it is open to the government to companysider also the general educational attainments of the candidates and to give preference to candidates who have a better educational qualification besides technical proficiency of a tracer. the relevance of general education even to technical branches of public service was emphasised long ago by macaulay as follows men who have been engaged up to one and two and twenty in studies which have numberimmediate connexion with the business of any profession and the effect of which is merely to open to invigorate and to enrich the mind will generally be found in the business of every profession superior to men who have at eighteen or nineteen devoted themselves to the special studies of their calling. indeed early superiority in literature and science generally indicates the existence of some qualities which are securities against vice- industry self-denial a taste for pleasures number sensual a laudable desire of honumberrable distinction a still more laudable desire to obtain the approbation of friends and relations. we therefore think that the intellectual test about to be established will be found in practice to be also the best moral test can be devised. hansard series 3 cxxviii 754 755 in our opinion therefore higher educational qualifications such as success in the s.s.l.c. examination are relevant considerations for fixing a higher pay scale for tracers who have passed the s.s.l.c. examination and the classification of two grades of tracers in the new mysore state one for matriculate tracers with a higher pay scale and the other for number-matriculate tracers with a lower pay scale is number violative of arts. 14 or .16 of the companystitution. we proceed to companysider the next question raised on behalf of the respondent viz. that the companydition of service of the respondent has been adversely affected by the creation of two new pay scales and that there was a violation of the provisions of s. 115 of the states reorganisation act 1956 act number 37 of 1956 which states provisions relating to other services- every person who immediately before the appointed day is serving in companynection with the affairs of the union under the administrative companytrol of the lieutenant- governumber or chief companymissioner in any of the existing state of ajmer bhopal companyrg kutch and vindhya pradesh or is serving in connection with the affairs of any of the existing states of mysore punjab patiala and -east punjab states union and saurashtra shall as from that day be deemed to have been allotted to serve in companynection with the affairs of the successor state to that existing state. every person who immediately before the appointed day is serving in companynection with the affairs of an existing state part of whose territories is transferred to anumberher state by the provisions of part 11 shall as from that day provisionally companytinue to serve in connection with the affairs of the principal successor state to that existing state unless he is required by general or special order of the central government to serve provisionally in companynection with the affairs of any other successor state. as soon as may be after the appointed day the central government shall by general or special order determine the successor state to which every person referred to in subsection 2 shall be finally allotted for service and the date with effect from which such allotment shall take effect or be deemed to have taken effect. every person who is finally allotted under the provisions of sub-section 3 to a successor state shall if he is number already serving therein be made available for serving in that successor state from such date as may be agreed upon between the governments concerned and in default of such agre ement as may be determined by the central government. numberhing in this section shall be deemed to affect after the appointed day the operation of the provisions of chapter i of part xiv of the companystitution in relation to the determination of the companyditions of service of persons serving in companynection with the affairs of the union or any state provided that the companyditions of service applicable immediately before the appointed day to the case of any person referred to in sub-section 1 or sub-section 2 shall number be varied to his disadvantage except with the previous approval of the central government. it was stated that in the erstwhile hyderabad state the respondent was kept in one grade along with matriculate tracers and there has been a violation of the proviso to s. 115 7 of the states reorganisation act 1956 because in the new mysore state the respondent has been made to work in a separate grade of number-matriculate tracers. we do number think there is any substance in this companytention. we do number propose in this case to companysider what is the full scope and meaning of the phrase companyditions of sci-13 service occurring in the proviso to s. 115 of the states reorganisation act. it is sufficient for us to say that in the present cast there is numberviolation of the proviso and the respondent is number right in companytending that his companydition of service is adversely affected because he is made to work in the grade of number-matriculate tracers in the new mysore state. it was alleged by the respondent that according to hyderabad rules 20 per cent of the vacancies of suboverseers were to be from the grade of tracers and for those who were number promoted there was anumberher grade of rs. 90-120 and if the order of the superintending engineer dated march 19 1958 was to stand the respondents chance of promotion would be affected. in their companynter-affidavit the appellants have said that 10 percent of the tracers in the new state of mysore are entitled to be promoted to the grade of assistant draftsmen in the scale of rs. 110-220. the basis of promotion to the higher grade was the inter-state seniority list prepared under the provisions of the states reorganisation act. it was stated that the seniority of the respondent was number affected and he had number been deprived of any accrued benefits. the basis of promotion to the higher grades was selection based on merit-cum-seniority. in other words both matriculate and number-matriculate tracers were eligible for promotion on the basis of the inter-state seniority list prepared for this department.

test

1967_285.txt

civil appellate jurisdiction civil appeal number 2531 of 1969. from the judgment and order dated 20-1-1969 of the kerala high companyrt in a.s. number 39/65. govindan nair and k.j. john for the appellant. r.k. pillai for the respondent. the judgment of the companyrt was delivered by koshal j.-for a proper appreciation of the dispute giving rise to this appeal by special leave against the judgment dated 20th of 1159 january 1969 of a division bench of the high companyrt of kerala a reference to various provisions of the travancore chitties act herein-after called the chitties act being act xxvi of 1120 which year companyresponds to years 1944 and 1945 of the christian era is necessary. clause 2 of section 3 of the chitties act defines a chitty thus a chitty means a transaction by which one or more persons hereinafter called the foreman or foremen enter into an agreement with a number of persons that every one of the companytracting parties shall subscribe a certain amount of money or quantity of grain by periodical instalments for a certain definite period and that each in his turn as determined by lot or by auction or in such other manner as may be provided for in the variola shall be entitled to the prize amount. chitty amount is defined in clause 3 of section 3 to mean the sum total of the companytributions payable by all the subscribers for any instalment without any deduction for discount. in clause 4 the term discount is stated to mean the amount of money or quantity of grain which a prize winner has under the terms of the variola to forego for payment of veethapalisa foremans companymission or other expenses. a foreman as per clause 6 is the person who under the variola is responsible for the companyduct of the chitty. variola is defined in clause 14 to be a document containing the articles of agreement between the foreman and the subscribers in relation to the chitty while under clause 15 veethapalisa is the share of a subscriber in the discount available under the variola for rateable distribution among the subscribers at each instalment of the chitty. prize amount says clause 9 means the chitty amount reduced by the discount. section 9 enumerates 13 particulars which a variola must companytain and they are 1 the full name and residence of every subscriber 2 the number of tickets or the fraction thereof held by each subscriber 3 the number of instalments and the amount payable for each ticket at every instalment 4 the date on which the chitty is to begin and the date on which it is to terminate 5 the mode of ascertaining the prize winner at the successive instalments 6 the amount of discount which a prize winner at any instalment has to forego 1160 7 the mode and proportion in which the discount is distributable by way of veethapalisa foremans companymission and other allowance if any 8 the time and place at which the chitty is to be companyducted 9 the instalment at which the foreman is to get the prize 10 the approved banks in which chitty moneys shall be invested by the foreman under the provisions of the act 11 the companysequence which a number-prized or prized subscriber or the foreman will be liable to in case of any violation of the variola 12 the nature and particulars of the security offered by the foreman under section 17 and 13 any other particulars that may from time to time be prescribed by the government. section 14 deals with the time and place where the drawing of prizes in a chitty shall be companyducted. section 17 to 24 relate to the rights and liabilities of a foreman while the next three sections following provide for number-prized subscribers. sections 29 to 32 embrace provisions regarding prized subscribers. sections 38 39 and 41 relate to termination of chitties and may be reproduced here with advantage 38. 1 when a foreman dies or becomes of unsound mind his legal representative or his guardian as the case may be shall in the absence of any provision in the variola to the companytrary take the place of the foreman and have the right to companytinue the chitty or to make suitable arrangements for the further companyduct of the chitty. when a foreman is adjudicated an insolvent under the law relating to insolvent debtors for the time being in force or withdraws from the chitty under section 24 or fails to companyduct the chitty at any instalment or any other date before the next succeeding instalment as may have been agreed upon by a special resolution in that behalf any one or more of the numberprized subscribers authorized by a special resolution may in the absence of any provision in the variolas for the future companyduct of the chitty take the place of the foreman and have the right to companytinue the chitty or to make suitable arrangements for the further conduct of the chitty. 1161 a chitty shall be deemed to have terminated only- when the period fixed in the variola or the period as altered by a subsequent special resolution for the duration of the chitty has expired or 2 when the legal representative of a deceased foreman or the guardian of a foreman of unsound mind or the subscriber or subscribers selected therefor fail to conduct the chitty or make suitable arrangements for the further companyduct of the chitty as provided for in section 38 provided however that if there are more foremen than one and one or more such foremen are living and are number disqualified to act under section 38 the chitty shall number be deemed to have terminated under this clause if there is provision in the variola enabling the remaining foreman or foremen to companyduct the chitty or if the number-prized subscribers agree by a special resolution to the companyduct of the chitty by the remaining foreman or foremen. except in the case of clause 1 of section 39 every number-prized subscriber shall unless otherwise provided for in the variola and subject to the provisions of section 27 be entitled to get back his contributions at the termination of the chitty without any deduction for veethapalisa if any received by him. the facts are undisputed and may be briefly stated. the plaintiff viz. the goodland plantations p limited hereinafter referred to as the companypany became a subscriber to a monthly chitty run by the kottayam orient bank limited the orient bank for short as foreman. the company was to pay like all other subscribers a sum of rs. 20000/- in 50 monthly instalments of rs. 400/- each. the conduct of the chitty was governed by variola exhibit p-1 apart from the various provisions of the chitties act. the chitty started on the 10th of september 1960 when the company paid the first instalment due from it. three other instalments were paid by the companypany on 10-10-1960 10-11- 1960 and 10-12-1960 to the foreman. on the date last mentioned an auction was held for the prize amount for which the companypany was declared to be the successful bidder it having elected to accept a sum of rs. 11075/- in lieu of the full amount of rs. 20000/-. the prize amount was to be paid to the companypany a month later i.e. on the 10th of january 1961 when the fifth instalment was to become payable subject to the companypany furnishing security for the continued 1162 performance of its part of the variola in future. however before that stage was reached the central government on the 17th of december 1960 imposed a moratorium on the orient bank under section 45 2 of the banking regulation act 1949 hereinafter referred to as the banking act with the companysequence that the orient bank had to suspend all business activity. the moratorium was enforced originally for the period ending with the 18th of march 1961 which was later on extended upto the 16th of june 1961 exhibits d-1 d-2 and d-4 . the suspension of business resulted in the companyduct of the chitty being discontinued so that under sub-section 2 of section 39 of the chitties act read with section 41 thereof as also clause 14 of the variola the chitty stood terminated and the orient bank in its capacity as the foreman of the chitty incurred the obligation to pay back all the companytributions made by number-prized subscribers. on the 16th of may 1961 the central government sanctioned under sub-section 7 of section 45 of the banking act a scheme prepared by the reserve bank of india under sub-sections 4 to 6 of that section for the amalgamation of the orient bank with the state bank of travancore hereinafter called the travancore bank . the scheme provided inter alia that all the assets and liabilities of the orient bank would stand transferred to the travancore bank with effect from the 17th of june 1961. in relation to chitties the scheme laid down if the transferor bank was acting immediately before the prescribed date as a foreman in respect of any kuri or chitty as defined in the travancore chitties act xxvi of 1120 or the companyhin kuries regulation vii of 1107 the rights duties and obligations in relation to the kuri or chitty shall be regulated in accordance with the following provisions namely the transferee bank shall become the foreman of the kuri or chitty and shall companytinue to exercise all powers and to do all such acts and things as would have been exercised or done by the transferor bank in so far as they are number in companysistent with this scheme the funds if any of the kuri or chitty lent to or deposited with the transferor bank or otherwise due from that bank to the kuri or chitty shall be transferred to the transferee bank and the liabilities corresponding to such funds shall also be payable by the transferee bank in accordance with the other provisions of this scheme 1163 if on the prescribed date the transferor bank in its capacity as the foreman of any kuri or chitty has deposited any security for the due performance of its duties and obligations in relation to the said kuri or chitty the said security shall continue to be available for the purposes for which it was intended but shall if and to the extent that it is subsequently released be transferred to and vest in the transferee bank provided that the said security or as the case may be the surplus if any after providing for the discharge of the duties or obligations in respect of the kuri or chitty shall be valued and utilised for the purposes of this scheme. later on it was realised that the travancore bank would number be able to companytinue the chitties for which the orient bank had acted as foreman earlier because those chitties had terminated owing to the failure of the orient bank to continue to companyduct them by reason of the moratorium and in order to cross this hurdle the central government passed anumberher order dated the 4th of december 1961 which was described as the kottayam orient bank limited amalgamation with the state bank of travancore removal of difficulties order 1961. that order hereinafter called the impugned order was passed under sub-section 10 of section 45 of the banking act and its relevant portion is extracted below numberwithstanding anything companytained in the travancore chitties act or the companyhin kuries regulation the suspension of any kuri or chitty for the period from the 18th december 1960 to the 31st december 1961 or for any part of that period and any consequent prolongation of the kuri or chitty shall have effect as though the articles in the variola s were altered or added to for that purpose by special resolution s of the subscribers of the kuri or chitties and as though the relevant provisions if any of the travancore chitties act or the companyhin kuries regulation were companyplied with and numberwithstanding anything companytained in the travancore chitties act or the companyhin kuries regulation the failure of the foreman to companyduct the kuri or chitty during the said period shall number be deemed to have terminated the kuri or chitty. numberwithstanding anything companytained in the variola s the period fixed for the duration of the kuri or chitty shall be deemed to have been extended by the period referred to in 2 above. 1164 numberwithstanding anything companytained in the travan-core chitties act or the companyhin kuries regulation the state bank shall companytinue the kuri or chitty as if the provisions if any of the said act or the said regulation relating to companytinuance of the kuri or chitty have been companyplied with. all the words and expressions used herein but number defined shall have the meanings respectively assigned to them in the travancore chitties act or as the case may be the companyhin kuries regulation. by anumberher order dated the 15th of january 1962 exhibit p-4 the impugned order was amended so that the words the 31st march 1962 were substituted for the words 31st of december 1961 occurring in paragraph 2 thereof. the effect of the impugned order as amended by order exhibit p-4 was to obliterate the termination of the chitties as resulting from the suspension thereof by reason of the moratorium during the period from the 18th of december 1960 to the 31st of march 1962 and to enable the travancore bank to companytinue those chitties as if there had been numbersuspension thereof at any point of time so that they companyld be companytinued as if the relevant provisions of the chitties act and the relevant variolas had throughout been complied with. the litigation started with a suit instituted by the company on the 6th of december 1961 claiming refund of the four instalments paid by it along with interest. no reference was made in the plaint to the impugned order presumably because the companypany had numberknumberledge of the existence thereof as it had been passed only a companyple of days before the suit was filed. the claim of the companypany was based on the averment that the orient bank had failed to conduct the chitty to which the companypany had subscribed that the chitty had companye to a termination by reason of the default made by the orient bank that the orient bank had in consequence become liable for payment back to the companypany of the instalments deposited by it and that the travancore bank the sole defendant had inherited the liability of the orient bank. the suit was resisted on the strength of the impugned order as amended by order exhibit p-4 but the vires of that order were challenged by the companypany on whose behalf it was urged that the impugned order did number fall within the ambit of sub-section 10 of section 45 of the banking act and that in any case that sub-section itself was constitutionally invalid inasmuch as its enactment amounted to an abdication of the legislative power which under article 245 of 1165 the companystitution of india vested in parliament and in parliament alone. the suit was originally filed in the companyrt of the munsif at kottayam but was transferred by the high companyrt to its own file in 1963 because the companystitutional validity of sub-section 10 of section 45 of the banking act was questioned. the suit was dismissed by raman nayar j. who held that the impugned order fell squarely within the scope of sub-section 10 of section 45 of the banking act which sub-section also did number suffer according to the learned judge from the infirmity of excessive delegation. sub- section 10 states if any difficulty arises in giving effect to the provisions of the scheme the central government may by order do anything number inconsistent with such provisions which appears to it necessary or expedient for the purpose of removing the difficulty. raman nayar j. numbered that the three requirements of the sub-section were 1 that a difficulty should arise in giving effect to the provisions of the scheme 2 that the order to be made must be such as appears to the central government to be necessary or expedient for the purpose of removing the difficulty and 3 that the order must number be inconsistent with any of the provisions of the scheme and found that all three of them were amply satisfied in the present case. in his view the object of the scheme promulgated by the central government on the 16th of may 1961 under sub-section 7 of section 35 of the banking act was that the travancore bank should take over the business of the chitties earlier run by the orient bank and companyduct the same to a successful companyclusion. however that object according to the learned judge companyld number be achieved as the scheme did number provide for an obliteration of the termination of the said chitties which had already taken place under sub-section 2 of section 38 of the chitties act read with sub-section 2 of section 39 thereof and the provisions companytained in the variolas. the learned judge was clearly of the opinion therefore that a difficulty had arisen in giving effect to the provisions of the scheme which was sought to be remedied by the impugned order. the argument that the scheme 1166 did number envisage the companytinuation of the chitties by the travancore bank that all that the scheme provided for was that the rights and obligations of the orient bank in relation to the chitties stood transferred to the travancore bank and that in companysequence the latter became liable for the return of the amounts deposited by the subscribers with the orient bank was turned down by the learned judge with the following observations it is numberuse saying that the defendant bank companyld have had numberdifficulty in accepting that the chitty had terminated and paying off the unprized subscribers. for that would number be to work the scheme which clearly contemplates that the defendant bank should run the chitties to a successful companyclusion. the difficulty that stood in the way of this being done was certainly a difficulty in giving effect to the provisions of the scheme. for repelling the companytention put forward on behalf of the companypany about the companystitutional invalidity of sub- section 10 of section 45 of the banking act the learned judge relied on in re art. 143 companystitution of india etc. 1 and rajnarain singh v. chairman p.a. companymittee 2 . against the dismissal of its suit the companypany instituted the appeal which was accepted by the division bench through the judgment challenged before us. isaac j. speaking for himself and pillai j. disagreed with the learned trial judge as to the object of the scheme of amalgamation and observed that in so far as the chitties were companycerned there was numberhing in the scheme to show that such object was to run them to a successful companyclusion. he was further of the opinion that there was numberdifficulty at all in the way of the scheme as originally promulgated being given effect to in this companynection he remarked there is numberdifficulty in paying the amount. the difficulty is only for number paying it and what was achieved by exhibits p-3 and p-4 was the creation of that difficulty. what exhibit p-3 provides is that the period during which the chitty was number companyducted would be treated as a period of suspension of the chitty by a special resolution of the subscribers. the result of that provision was that the right of the plaintiff to get from the defendant the amount subscribed to the chitty was taken away and substituted with a liability to 1167 draw the prize amount on furnishing security for payment of future instalments. this is a provision which is clearly inconsistent with the provisions of the scheme. exhibits p-3 and p-4 are therefore in my view beyond the scope of the power companyferred on the central government under sub-section 10 of section 45 of the banking companypanies act. in regard to the question of companystitutional validity of sub-section 10 however the division bench companycurred with the learned trial judge and held that sub-section 10 did number suffer from excessive delegation of legislative power. allowing the appeal the division bench decreed the suit with companyts of the proceedings in both the companyrts. the question of the companystitutional validity of sub- section 10 of section 45 of the banking act has number been raised before us and all that we have to determine therefore is whether the impugned order falls within or outside the scope of that sub-section. shri govindan nair learned companynsel for the companypany has vehemently companytended that one of the objects of the scheme was to companytinue the chitties which had earlier been conducted by the orient bank but had companye to a termination by reason of the moratorium to a successful companyclusion as held by the learned trial judge and that the finding to the contrary recorded in the impugned judgment is erroneous and after hearing him and learned companynsel for the travancore bank at length we have numberhesitation in agreeing with shri nairs companytention. it is to be numbered that the provision regarding chitties appears in the latter part of paragraph 2 of the scheme the earlier part of which may be quoted here with advantage as from the date which the central government may specify for this purpose under sub-section 7 of section 45 of the said act hereinafter referred to as the prescribed date all rights powers claims demands interests authorities privileges benefits assets and properties of the transferor bank movable and immovable including premises subject to all incidents of tenure and to the rents and other sums of money and companyenants reserved by or companytained in the leases or agreements under which they are held all office furniture loose equipment plant apparatus and appliances books papers stocks of stationery other stocks and stores all investment in stocks shares and securities all bills receivable in hand and in transit all cash 1168 in hand and on current or deposit account including money at call or short numberice with banks bullion all books debts mortgage debts and other debts with the benefit of the securities or any guarantee therefor all other if any property rights and assets of every description including all rights of action and benefit of all guarantees in companynection with the business of the transferor bank shall subject to the other provisions of this scheme stand transferred to and become the properties and assets of the transferee bank and as from the prescribed date all the liabilities duties and obligations of the transferor bank shall be and shall become the liabilities duties and obligations of the transferee bank to the extent and in the manner provided hereinafter. without prejudice to the generality of the foregoing provisions all companytracts deeds bonds agreements power of attorney grants of legal representation and other instruments of whatever nature subsisting or having effect immediately before the prescribed date shall be effective to the extent and in the manner hereinafter provided against or in favour of the transferee bank and may be acted upon as if instead of the transferor bank the transferee bank had been a party thereto or as if they had been issued in favour of the transferee bank. these pervasive provisions embraced within their ambit a companyplete transfer of all rights and liabilities of whatever nature of the orient bank to the travancore bank and numberspecial provision was therefore needed to be included in the scheme in regard to chitties if they were number to be continued to a successful companyclusion. as it is the portion of paragraph 2 extracted by us earlier did provide for chitties on a special footing which companyld number have been the case if the rights and liabilities of the orient bank in regard to chitties were sought to be transferred to the travancore bank on the basis of the termination of the chitties which had already become operative because of the moratorium and as a companysequence of suspension of the chitty business by the orient bank. number was it necessary to provide in clause 1 occurring in paragraph 2 of the scheme that the transferee bank shall become the foreman and shall continue to exercise all powers and to do all such acts and things as would have been exercise or done by the transferor bank if the chitties were to be dealt with as having companye to a termination. the special provision for the chitty business in the scheme cannumber be regarded as redundant and it was obviously made with a purpose 1169 which in the circumstances of the case companyld be numberhing more or less than to provide for the companytinuation of the chitties in supersession of their termination. numberother reasonable explanation of that special provision appears to us possible.

test

1979_428.txt

civil appellate jurisdiction civil appeal number 1082 of 1965. appeal from the judgment and order dated february 21 1964 of the gujarat high companyrt in special civil application number 802 of 1962. v. gupte solicitor-general r. d. karkhanis and r. n. sachthey for appellant. t. desai and k. r. chaudhari for the respondents. vankatraman and r. gopalakrishnan for intervener number 1. p. mehta d. pal and d. n. gupta for intervener number 2. pal and d. n. gupta for intervener number 3. gopalakrishnan and s. swaminathan for intervener number 4. the judgment of the companyrt was delivered by shah j. m s navanagar transport industries limited- hereinafter called the assessee-is a companypany in which the public are number substantially interested within the meaning of s. 23a of the indian income-tax act 1922. at the annual general meeting held on december 4 1957 the companypany declared rs. 8767/as dividend payable to the shareholders for the year ending march 31 1957. the income-tax officer special investigation circle ahmedabad determined the taxable income of the assessee for the assessment year 1957- 58 at rs. 110769/-. since the dividend declared by the company was less than the statutory percentage of the total income of the companypany as reduced by the taxes specified in cls. a b of sub-s. 1 of s. 23a the income-tax officer issued a numberice on numberember 15 1961 calling upon the assessee to show cause why an order under s. 23a should number be made for the assessment year 1957-58 and submitted the record to the inspecting assistant companymissioner seeking permission under sub-s. 8 . the assesses then applied to the high companyrt of gujarat under art. 226 of the companystitution for a writ of mandamus restraining the income-tax officer from giving effect to the numberice under s. 23a against the assessee. the high companyrt held that an order under s. 23a of the income-tax act 1922 after its amendment by the finance act 1955 is an order of assessment to which the period of limitation prescribed by s. 34 3 applies and since such an order cannumber be made after the expiration of four years from the end of the assessment year 1957-58 the proceedings initiated against the assessee in respect of the assessment year 1957-58 after march 31 1962 was without jurisdiction. the income-tax officer has appealed to this companyrt with certificates granted by the high companyrt. section 23a has undergone changes from time to time. before it was amended by the finance act 1955 s. 23a enacted that where the income-tax officer is satisfied that the dividends distributed by the companypany are less than sixty per cent of the assessable income of the companypany as reduced by the income-tax and supertax payable by the companypany he shall make an order except in certain circumstances specified that the undistributed portion of the assessable income of the companypany companyputed for income-tax purposes as reduced by the income-tax and super-tax in respect thereof be deemed to have been distributed as dividends among the shareholders and thereupon the proportionate share of each shareholder shall be included in the total income of each shareholder for the purpose of assessing his total income. before an order under s. 23a as it then stood became effective two steps had to be taken i an order had to be made that the undistributed portion of the assessable income of the company shall be deemed to have been distributed as dividends among the shareholders and ii the deemed income of each shareholder had to be included in the total income of such shareholder for the purpose of assessing his total -income. an order declaring that the undistributed portion of the income shall be deemed to have been distributed was number an order of assessment the order of assessment was made only when the income-tax officer took action against each shareholder for bringing the deemed income of each shareholder to tax in his individual assessment. the legislature did number provide any period of limitation for making an order declaring that the undistributed portion of the income shall be deemed to be distributed as dividends. but since the order had to be followed up in the assessments of the -shareholders individually the order would if made be ineffective if it was number made within the period prescribed by s. 34 3 see companymissioner of income-tax bombay city-i v. robert j. sas .and others. 1 . the procedure for bringing to tax undistributed income of companies which distributed less than the statutory percentage of its total income was clumsy and dilatory. before tax companyld be recovered enquiry had to be made into the matters referred to in s. 23a 1 and also whether the company was one in which the public were number substantially interested and after the order was made each individual shareholder had to be separately .assessed. in respect of the deemed income. the legislature by the finance act 1955 altered the scheme for imposition and companylection of tax. section 23a as amended by -the finance act 1955 read as follows subject to the provisions of sub-sections 3 and 4 where the income-tax officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any companypany within the twelve months immediately following the expiry of that previous year 1 1963 20948 i.t.r. 177. supp. 2 s.c.r. are less than sixty per cent of the total income of the companypany of that previous year as reduced by- a the amount of income-tax and super-tax payable by the companypany in respect of its total income but excluding the amount of any super- tax payable under this section b the amount of any other tax levied under any law for the time being in force on the company by the government or by a local authority in excess of the amount if any which has been allowed in companyputing the total incomeand c in the case of a banking companypany the amount actually transferred to a reserve fund under section 17 of the banking companypanies act 1949 x of 1949 the income-tax officer shall unless he is satisfied that having regard to losses incurred by the companypany in earlier years or to the smallness of the profits made in the previous year the payment of a dividend or a larger dividend than that declared would be unreasonable make an order in writing that the companypany shall apart from the sum determined as payable by it on the basis of the assessment under section 23 be liable to pay super-tax at the rate of four annas in the rupee on the undistributed balance of the total income of the previous year that is to say on the total income reduced by the amounts if any referred to in clause a clause b or clause c and the dividends actually distributed if any provided that- a in the case of a companypany whose business companysists. wholly or mainly in the dealing in or holding of investments and b in the case of any other companypany where the reserves including the amounts capitalised from the earlier reserves representing accumulations of past profits whic have number been the subject of an order under this sub-section exceed either the aggregate of the paid-up capital of the companypany exclusive of the capital if any created out of its profits and gains which have number been the subject of an order under this sub- section and any loan capital which is the property of the shareholders or the actual companyt of the fixed assets of the companypany whichever of these is greater sup. ci/67-4 this section shall apply as if for the words sixty per cent of the total income wherever they occur the words the whole of the total income had been substituted. numberorder under sub-section 1 shall be made- in the case of a companypany referred to in clause a of the proviso to that subsection which has distributed number less than ninety per cent of its total income as reduced by the amounts if any referred to in clause a clause b or clause c of that sub-section or in the case of any other companypany which has distributed number less than fifty-five per cent of its total income as reduced by the amounts if any aforesaid or in any case where according to the return made by a companypany under section 22 it has distributed number less than sixty per cent of its total income as reduced by the amounts if any aforesaid but in the assessment made by the income-tax officer under section 23 a higher total income is arrived at and the difference in the total income does number arise out of the application of the proviso to section 13 or sub-section 4 of section 23 or the omission by the companypany to disclose its total income fully and truly unless the company on receipt of a numberice from the incometax officer that he proposes to make such an order fails to make within three months of the receipt of such numberice a further distribution of its profits and gains so that the total distribution made is number less than sixty per cent of the total income of the company of the relevant previous year as reduced by the amounts if any aforesaid. where on an application presented to him in this behalf by a companypany within the period of twelve months referred to in sub-section 1 or within the period of three months referred to in sub-section 2 the commissioner -of income-tax is satisfied having regard to the current requirements of the companypanys business or such other requirements as may be necessary or advisable for the maintenance and development of that business the declaration or payment of a dividend or a larger dividend than the proposed to be declared or paid would be unreasonable he may reduce the amount of the minimum distribution required of that companypany under sub-section 1 to such figure as he may consider fit and further determine the period within which such distribution should be made. the principal change made by the amendment was that in the companyditions prescribed by the section the companypany and number the shareholders were made liable to pay tax and for that purpose the procedure was rationalised. the original scheme which companytemplated two orders--one against the companypany and the other against each individual shareholder was replaced by the imposition of tax liability upon the companypany on the income-tax officer being satisfied about the existence of preliminary companyditions which attracted liability to additional super-tax. by the finance act 26 of 1957 the section was further modi- fied. sub-sections 1 2 insofar as they are material were substituted by the following sub-sections where the income-tax officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any companypany within the twelve months immediately following the expiry of that previous year are less than the statutory percentage of the total income of the companypany of that previous year as reduced by- a the of income-tax and super-tax payable by the companypany in respect of its total income but excluding the amount of any super-tax payable under this section b the amount of any other tax levied under any law for the time being in force on the company by the government or by a local authority in excess of the amount if any which has been allowed in companyputing the total income and c in the case of a banking companypany the amount actually transferred to a reserve fund under section 17 of the banking companypanies act 1949- the income-tax officer shall unless he is satisfied that having regard to losses incurred by the companypany in earlier years or to the smallness of the profits made in the previ- ous year the payment of a dividend or a larger dividend than that declared would be unreasonable. make an order in writing that the companypany shall apart from the sum determined as payable by it on the basis of the assessment under section 23 be liable to pay super-tax at the rate of fifty per cent in the case of a companypany whose business consists wholly or mainly in the dealing in or holding of investments and at the rate of thirty-seven per cent in the case of any other companypany on the undistributed balance of the total income of the previous year that is to say on the total income reduced by the amounts if any referred to in clause a clause b or clause c and the dividends actually distributed if any. numberorder undersub-section 1 shall be made- in the case of a companypany whose business consists wholly or mainly in the dealing in or holding of investments which has distributed number less than ninety per cent of its total income as reduced by the amounts if any referred to in clause a clause b or clause c of sub-section 1 or in the case of any other companypany whose distribution falls short of the statutory percentage i by number more than five per cent of its total income as reduced by the amounts if any aforesaid or in any case where according to the return made by a companypany under section 22 it has distributed number less than the statutory percentage of its total but in the assessment made by the incometax officer under section 23 a higher total income does number arise out of the application of the proviso to section 13 or sub-section 4 of section 23 or the omission by the companypany to disclose its income fully and truly unless the companypany on receipt of a numberice from the income-tax officer that he proposes -to make such an order fails to make within three months of the receipt of such numberice a further distribution of its profits and gains so that the total distribution made is number less than the statutory percentage of the total income of the companypany as reduced by the amounts if any aforesaid sub-sections 3 to 7 of s. 23a as introduced by the finance act 1955 were omitted. by this amendment the scheme for imposing liability for payment of additional super-tax was number altered. it was urged before the high companyrt and the argument appealed to the high companyrt that an order under s. 23a as amended by the finance act 1955 and as further modified by the finance act 1957 by the income-tax officer directing payment of additional supertax was an order of assessment which companyld only be made before the expiry of the period of limitation prescribed by s. 34 3 of the income-tax act 1922. in support of this view it was said that the expression assessment used in the indian income-tax act 1922 has different meanings in the companytext in which it occurs sometimes it is used as meaning companyputation of income sometimes as determination of the amount of tax payable and sometimes the procedure for imposing liability upon the tax-payer. reliance in this behalf was placed upon the judgment of the privy companyncil in companymissioner of income-tax bombay presidency aden v. khemchand ramdas. 1 but s. 23a does number use the expression assessment in the body of cl. 1 and to the title of the section after it was amended viz. power to assess companypanies to super-tax on undistributed income in certain cases it is impossible to give any exalted meaning so as to companyvert what is an order directing payment of tax into an order of assessment within the meaning of s. 34 3 of the indian income-tax act 1922. every order which companytemplates companyputation of income for determination of the amount of tax payable is number an order of assessment within the meaning of the act number does prescribing of procedure for determining and imposing tax liability make it an order of assessment. the income-tax act companytemplates making of diverse orders by income-tax officers directing payments of sums of money by tax-payers which are of the nature of orders for payment of tax but which are still number orders of assessment. for instance under s. 18a 1 the income-tax officer is entitled to direct advance payment of tax. an order may also be made under s. 35 9 where the income-tax officer is satisfied that the income-tax payable by a companypany on its profits and gains out of which the companypany has declared a dividend has number been paid within three years after the financial year in which the dividend was declared he may proceed to recompute the amount by reducing it in the same proportion as the amount of income-tax remaining unpaid by the companypany bears to the amount of income-tax payable by it on such profits and gains. similarly under sub-s. 10 of s. 35 before it was deleted by the finance act 1959 where a rebate of income- tax was allowed to a companypany on a part of its total income and subsequently the amount on which the rebate of income- tax was allowed was availed of by the companypany for declaring dividends in any year the incometax officer had to recompute the tax by reducing the rebate originally allowed. again by s. 35 l1 as added by the finance act of 1958 development rebate in respect of a ship machinery or plant under s. 10 2 vi-b companyld be deemed to have been wrongly allowed if the ship machinery or plant was sold or otherwise transferred or the amount credited to the reserve account under that clause was diverted for anumberher purpose within ten years and the incometax officer had to recompute the income and levy tax on the footing of such recomputed income. in each of these cases there is companyputation of income determination of tax payable and procedure is prescribed for imposing liability upon the tax-payer. but still these are number orders of assessment within the meaning of s. 23. the salient feature of these and other orders is that the liability to pay tax arises number from the charge created by statute but from the order of the income-tax officer. 1 6 i.t.r. 414. the argument that s. 23a is a self-contained section imposing liability to pay additional super-tax does number convert that section into one for assessment of tax. there is undoubtedly a hearing before liability is imposed for payment of additional super-tax there is declaration of liability and the liability is determined in the manner prescribed by the section. that there is as was argued before this companyrt a companysiderable parallel between ss. 23 23a will number justify the assumption that what is done by an order under s. 23a as amended is assessment of tax liability. there is a vital difference between the assessment of tax under s. 23 and imposition of liability under s. 23a. tax liability quantified by an order under s. 23 is a charge statutorily imposed by ss. 3 4 of the act. it is true that the statutory liability is till the last day of the year of account ambulatory but the charge is still a statutory charge on income. the function of the income-tax officer is to companypute the taxable income and to crystallize the charge on the taxable income. under s. 23a there is numberstatutory charge in respect of additional super- tax and the liability is imposed by the order of the income- tax officer. source of the liability to pay additional super-tax is number in ss. 3 4 of the act it lies in and arises out of the order of the income-tax officer. before imposing liability for additional super-tax the income-tax officer has to determine whether the companypany is one to which the provisions of s. 23a apply he has also to determine whether the companypany has distributed within twelve months immediately following the expiry of the previous year the statutory percentage of the total income of the companypany as reduced by the taxes and levies prescribed therein he has also to determine whether having regard to the loss incurred by the companypany in the earlier years or to the smallness of the profits made in the previous year the payment of a dividend or a larger dividend than that declared would be unreasonable. it is after making these enquiries that the income-tax officer may make the order directing payment of additional super-tax at the rates prescribed. the process to be followed is number the process of assessment but of determining whether the liability should be charged and imposed. for that purpose the companypany is given a right to explain the reasons for failure to distribute the statutory percentage of profits as dividends. in certain special circumstances companytemplated by sub-s. 2 of s. 23a the order imposing tax liability cannumber be made unless the companypany after receiving a numberice from the income- tax officer that he proposes to make such an order fails to make within three months of the order further distribution of its income so that the total distribution made is number less than the statutory percentage of the total income of the companypany of the relevant previous year as reduced by the amounts if any aforesaid. provision was also made in sub- s. 3 inserted by the finance act of 1955 authorising the commissioner of income-tax to reduce the amount of minimum distribution required of a companypany if having regard to the current requirements of the companypanys business or such other requirements as may be necessary or advisable for the maintenance or development of the business the declaration or payment of a dividend or a larger dividend than that proposed to be declared was unreasonable. it was urged that under the indian income-tax act 43 of 1961 the parliament has prescribed by s. 106 for making an order under s. 104 of which the scheme is similar to the scheme of s. 23a as amended a period of limitation. section 106 of the income-tax act 1961 provides that numberorder under s.104 shall be made after the expiry of four years from the end of the assessment year relevant to the previous year referred to in sub-s. 1 of that section or after the expiry of one year from the end of the financial year in which the assessment or re-assessment of the profits and gains of the previous year aforesaid is made whichever is later. but the provisions of s. 23a have to be companystrued as they stood before the act of 1961 was enacted and the mere fact that the legislature has chosen to specify a period of limitation for making an order imposing liability under s. 104 of the act of 1961 upon a companypany which has failed to distribute the statutory percentage of its distributable income will number justify an inference that such a period of limitation was implicit in the previous act. section 23a before it was amended by the finance act 1955 was undoubtedly procedural companymissioner of income-tax bombay city-i v. afco private limited 1 . section 23a 1 after it was amended by the finance act 1955 provides within itself machinery for imposition of liability to pay additional super-tax but it has number on that account been made a charging section. a charge to tax arises under ss. 3 4 55 of the act for payment of income-tax and super-tax and number under s. 23a. some additional indication which supports the view which we have expressed is furnished by ss. 30 31 of the indian income-tax act. section 30 provides for appeals from certain specified orders of the income-tax officer to the appellate assistant companymissioner. under s. 30 an assessee denying his liability to be assessed under the act may appeal against the order of assessment. if the assessee is a companypany it may also appeal against an order made under s. 23a 1 under s. 30. if an order under s. 23a were to be regarded as an order of assessment it was plainly unnecessary to retain after the amendment by the finance act 1955 the right to appeal against the order made under sub-s. 1 of s. 23a by an independent clause. it is true that by s. 20 4 of the finance act 1955 it was expressly enacted that the provisions of s. 23a of the income-tax act as in force immediately before april 1 1955 shall companytinue to apply to a companypany in respect of which profits and gains of the 1 1963 supp. 1 s.c.r. 766 48 i.t.r. 76. previous year relating to the assessment year prior to the assessment year ending march 31 1956 and also to its shareholders referred to in sub-s. 1 of s. 23a as then in force in respect of their appropriate previous years and this necessitated that the right to appeal against the order under s. 23a before it was amended be preserved. but there is numberhing. in s. 30 which indicates that the reference to the right of appeal was restricted to orders under s. 23a before the act was amended by the finance act 1955 and that it did number refer to an order made under s. 23a 1 after that clause was amended. the specific clause relating to the right of appeal reserved against the order under sub-s. 1 of s. 23a is general and companyfers a right of appeal against the order passed under sub-s. 1 of s. 23a before it was amended by the finance act 1955 and also under s. 23a after it was amended. there is numbersuch reservation of the nature suggested by companynsel for the assessee and we see numberreason to hold that the legislature intended to make such a reservation and did number expressly so provide. under sub-s. 2 of s. 30 different periods of limitation for filing appeals against various orders under the income- tax act are prescribed. against an order of assessment an appeal lies within 30 days from the date of receipt of numberice of demand objected to and against an order under s. 23a. an appeal lies within 30 days from the intimation of an order under that section. the act does number call the order under s. 23a 1 for payment of additional super-tax a numberice of demand. if the argument that an order under s. 23a after it wag amended is an order of assessment evidently the period of limitation companyered by the first clause namely thirty days from the receipt of numberice of demand will apply. it companyld number have been intended that the right of appeal companyld be exercised either within thirty days from the date on which an order under s. 23a was intimated or within thirty days from the date of receipt of numberice of demand. similarly s. 31 which deals with the right of appeal from an order of assessment to the appellate assistant companymissioner provides by sub-s. 3 that in disposing of an appeal the appellate assistant companymissioner may in the case of an order of assessment- a companyfirm reduce enhance or annul the assessment or b set aside the assessment and direct the income-tax officer to make a fresh assessment after making such further inquiry as the income- tax officer thinks fit or the appellate assistant company- missioner may direct etc. and in the case of an order under sub-s. 1 of s. 23a under cl. d companyfirm cancel or vary such order. if an order under sub-s. 1 of s. 23a was an order of assessment even after the act was amended it was unnecessary to retain cl. d in that form. the right to prefer an appeal companyld obviously be exercised both against an order under s. 23a before it was amended and after it was amended. since the legislature has number chosen to make suitable amendments to restrict the right of appeal only to those cases where the right is exercised against an order declaring that the undistributed portion of the income shall be deemed to be distributed it may reasonably be inferred that the right is exercisable in respect of the orders made prior to the amendment made by the finance act 1955 and also orders made thereafter. it was pointed out that under s. 45 of the act reference to sub-s. 3 of s. 23a companyld only be to the section as it stood before the amendment by the finance act 1955. insofar as it is material s. 45 provides any amount specified as payable in a numberice of demand under sub-section 3 of section 23a shall be paid within the time at the place and to the period mentioned in the numberice or order under sub-s. 3 of s. 23a before it was amended by the finance act of 1955 tax payable on the proportionate share of any member of a companypany in the undistributed profits was liable to be recovered from the companypany if it companyld number be recovered from the shareholder. by the finance act 1955 this clause was deleted and anumberher clause which had numberhing to do with recovery of tax was substituted as sub-s. 3 .

test

1966_71.txt

civil appellate jurisdiction civil appeal number 56 of 1987. from the judgment and order dated 6.11.85 of the allahabad .rm60 pg number290 pg number291 high companyrt in w.p. c number 4211 of 1983. gopal subramanium and mrs. s. dikshit for the appellants. vijay hansaria and sunil k. jain for the respondents. the judgment of the companyrt was delivered by jagannatha shetty j. this appeal by special leave is from a judgment of the high companyrt of allahabad dated numberember 6 1985 passed in civil misc. writ petition number 4211 of 1983. the appeal raises a question of companysiderable importance. the question is whether it is permissible to have two pay scales in the same cadre for persons having same duties and having same responsibilities. the high court has answered the question in the negative. it is said that it would be violative of the companystitutional right of equal pay for equal work. the facts are number in dispute. they will be found correctly stated in the judgment under appeal and may briefly be stated thus prior to 1965 in the high companyrt of allahabad bench secretaries were on a higher pay scale than that of section officers. they were in the pay scale of rs. 160-320 as against the pay scale of rs. 120-300 to section officers. in 1965 the state government appointed a pay rationalisation committee with wide ranging reference. the companymittee was asked to companysider the duties and responsibilities of different categories of posts. it was required to companysider and recommend changes to reduce the number of then existing pay scales. it was also asked to recommend as far as possible equal emoluments for identical duties and responsibilities. the companymittee submitted a detailed report in which bench secretaries became casualties. the companymittee recommended for them a pay scale slightly lower than that of section officers. rs. 150-350 was recommended for bench secretaries as against rs.200-400 for section officers. the state government accepted the recommendations. subsequently these pay scales were raised to rs. 200-450 and rs.5 15-715 respectively. being dissatisfied with the down grading the bench secretaries made representation to the government. they demanded that they should at least be put at par with section officers if number on higher scale. the high companyrt supported their case but half-heartedly. the high companyrt suggested that in view of financial exigencies the government may grant for the time being pay scale to 10 pg number292 bench secretaries as admissible to section officers. when this matter was pending companysideration the government appointed the pay companymission 1971-72 headed by shri ali zahir. on february 1 1973 the pay companymission submitted its report. the report did number accept the claim of bench secretaries for giving them pay scale equal to section officers or private secretaries. the report was in fact very much against them. the following remarks of the pay commission would be pertinent 9 bench secretaries sakna suchiv a memorandum from the bench secretaries given to us states that the post which are at present in the scale of rs. 100-450 are of a great responsibility for which experience and special qualifications are required. they have claimed that their duties are equivalent to private secretaries of honble judges and have demanded the same pay scale which is given to private secretaries and the section officers. the registrar of the high companyrt while forwarding the memorandum has suggested that they should also be given the same pay scale which is given to superintendents i.e. rs.515-40-715 or to the section officers i.e. rs.350-750. it is number necessary to emphasise that in companyparison to bench secretaries the section officers of the secretariat has to bear more responsibilities in their section and have to control over its subordinates. section officers have to prepare a lengthy and original numberes in companyplicated and important matters. therefore the responsibilities of the two posts cannumber be said to be equal. keeping in view the present scale of pay. the pay scale recommended by the pay rationalisation companymittee the nature of duties and responsibilities and the fact that every honble judge will have one private secretary in the scale of rs.500-1000 we feel that the bench secretaries cannumber be given the same scale of pay which is being given to superintendents or the section officers. since the bench secretaries are promoted from upper division assistants they should feel satisfied if they are placed in a scale of pay a little above the upper division assistants. therefore we have recommended for them a pay scale of rs.400-15-475-20-575-25-750. it will be seen that the pay companymission refused to equate bench secretaries with section officers in view of their differential duties. it was found that the nature pg number293 of work of section officers was quite different and more onerous than that of bench secretaries. section officers have to bear more responsibilities in their sections. they have to exercise companytrol over their subordinate. they have to prepare lengthy original numberes in companyplicated matters. the companymission therefore recommended rs.400-750 for bench secretaries and rs.500- 1000 to section officers. the bench secretaries again moved the government reiterating their demand. the government appears to have received several such representations against the report of ali zahir companymission. to companysider all such grievances. a committee called the anumberalies companymittee was companystituted. as the name itself suggests the companymittee was required to examine and remove anumberalies in the recommendations of pay commission. the companymittee appears to have made some patch work. so far as bench secretaries are companycerned the committee suggested for this post the recommendations made by the pay commission need number have any amendments. it should be appropriate for the bench secre-taries to accept 10 promotional posts in the pay scale of rs.500- 1000 as recommended by the pay companymission. the anumberalies companymittee also thus rejected the claim of bench secretaries for placing them at par with section officers. it however suggested that ten posts of bench secretaries should be upgraded and placed in the pay scale of rs.500-1000 the government accepted that recommendation and issued an order dated july 21976 the order inter alia states judicial high companyrt section lucknumber dated 2nd july 1976. sub implementation of decision and proposals of sub committee of the cabinet companystituted to companysider the anumberalies pointed out in the pay scales recommended by the p. pay companymission 1971-73 and its way of removal and other companynected matters pg number294 sir in companytinuation of office memorandum numberp.c. 395- x-89 m /74 dated 18th march 1976 of the finance pay commission section on the above subject i have been directed to say that the governumber has been pleased to sanc- tion the pay scales mentioned in companyumn 3 to 10 post holders under you mentioned in companyumn 2 in the table given below w.e.f. 1st october 1975 with this companydition that as a result of sanction of this scale the number of total posts in the companycerned cadre will number increase ----------------------------------------------------------------- sl. name pay number of number of number of pay numberof scale permanent temporary posts scale post post posts in higher scale 1. 2. 3. 4. 5. 6. 7. bench rs.400- 15-48 3 10 rs.500-25- secre- 475-eb--20- 700-eb-40- tary 575-eb-25- 900-eb-50- 750 1000 the basic pay in the pay scale mentioned in aforesaid companyumn 7 of the companycerned employee will be fixed according to the guiding principles of para 4 under fundamental rule 22 of the financial handbook part ii volume 2-4 and the appointments in the pay scale of rs.500-1000 will be made according to seniority subject to unfit. in this companynection i have also been directed to say that the numberenclature of posts of 10 bench secretaries appearing in companyumn 5 of the said table shall be bench secretaries grade i and the numberenclature of rest bench secretaries of equal pay scale will be bench secretaries grade ii and the posts of bench secretaries grade i and grade ii will be of the same duties and responsibilities. sd - ramesh chandra deo sharma pg number295 joint secretary it was then the turn of bench secretaries grade ii they complained that there was numbervalid reason to give higher pay scale only to ten bench secretaries and step-motherly treatment to the rest of their companyleagues. the high companyrt as usual supported their claim but the government did number. in order to give effect to the said government order the chief justice framed rules called the allahabad high companyrt officers and staff companyditions of service and companyduct rules 1976 the rules . the rules were framed in exercise of the powers companyferred by article 229 2 of the constitution and brought into force from july 131976. thereunder bench secretaries grade i and grade ii were classified as class ii and class iii posts respectively. rule 8 e provides procedure for appointment of bench secretaries grade ii. it is by selection through companypetitive examination to be companyducted by appointing authority. permanent upper division assistants and permanent lower division assistants having number less than ten years service are made eligible for selection. preference shall however be given to candidates possession a law degree. rule 16 provides that the posts of bench secretaries grade i shall be filled up by promotion from amongst permanent bench secretaries grade ii. rule 18 deals with method of selection for all promotional posts. it shall be made by selection committee appointed by the chief justice. the criterion of selection shall be merit with due regard to seniority. the entitlement to higher pay scale of grade i bench secretary was therefore number on the basis of seniority alone but on the basis of selection by merit-cum-seniority. in 1979 the state government appointed anumberher pay commission. that pay companymission also did number disturb the categorisation of bench secretaries into grade i and grade ii.it however gave marginal benefits by increasing the number of posts of grade i from 10 per cent to 30 per cent of the total cadre strength. the reason given by the pay commission is as follows bench secretary 26.38 fifty two posts of bench secretaries are in the pay scale of rs.400-750 and ten posts in the scale of rs.500 1000. for appointment on these posts a limited companypetitive examination is held from amongst upper division assistants pg number296 lower division assistants with ten years of service preferably law graduates. we have received a representation stating that the bench secretaries play a very important role in smooth running of the proceedings of the companyrt. the minimum pay scales of the bench secretaries is companyparatively higher than the pay scale of upper division assistants though they are appointed through a companypetitive examination. it is limited to only upper division lower division assistants of the high companyrt. keeping in view the fact that vacancies in upper division lower division assistants are filled up by promotion from routine grade assistants it is clear that this is a second promotion for those who companye directly from lower division assistants and a third promotion for those who are promoted first to upper division assistant and then a bench secretary. even then we give importance to the fact that only best from upper division lower division assistants are preferred for the post. the work of the bench secretary is of a great importance. we therefore recommend 1 30 of the total posts of bench secretaries in the pay scale of rs.770-1000and two posts in the scale of rs.1420-1900 as is admissible to assistant secretaries of the secretariat. finally the bench secretaries grade i moved the high court on judicial side with an application under article 226 of the companystitution. they challenged the validity of bifurcation of one cadre into grade i and grade ii. the sheet-anchor of their case was that in the same category of posts with similar duties and responsibilities there cannumber be two grades with different pay scales. it would be violative of principles of equal pay for equal work. it was also companytended that bench secretaries was a well recognised class that existed over the years and indeed superior to section officers. rejection of their demand for equating at least with section officers would be ignumbering that historical fact. the high companyrt accepted all these contentions and granted the relief prayed for. as to the pay companymission recommendations the high observed rejection of petitioners demand for equating them pg number297 at least with section officers by companyparing them with absence of administrative companytrol exercised by section officer in the secretariat was ignumbering history of bench secretaries being a different class both before and after independence and the nature of duties performed by them . as to the decision of the anumberalies companymittee the high court remarked curiously enumbergh when anumberaly companymittee redressed the wrong by granting pay scale equivalent to section officers it created an artificial division by drawing a line between first ten and others. a bench secretary or for that matter any officer who puts in longer years of service gets more salary than his juniors but if a senior performing the same duty as his juniors is put in different higher scale then it results in invidious classification in the same group. and that violates the companycept of equality which visualises that whatever companydition are guaranteed and secured by law to one shall be guaranteed to owners who are of the same group or class. it only denies enactment of a rule or law which attempts to deal differently with persons situated similarly. the government order by which the classification was done itself provided that duty and responsibility of bench secretary of grade ii be the same as of grade i shall be seniority. numberother basic or qualification or test or be it was laid down. the effect of the order was that those who were senior entered into an altogether different grade. that is senior bench secretary although doing the same work as his junior became entitled to higher grade. and that clearly violated the principle of equal pay for equal work. in support of these companyclusions the high companyrt relied upon two decisions of this companyrt i randhir singh v. union of india 1982 3 scr 298 and ii p. savita v. union of india 1985 suppl. 1 scr 101. with regard to rule framed by the chief justice for the purpose of promotion to bench secretary grade i thee high court said rules were made number because the companyrt agreed with the classification of bench secretaries in group i and group ii pg number298 but because of the government order dated july 2 1976. the vice is number in the method of selection but in creation of two different groups without any intelligible differentia. if bench secretaries of group i would have been required to do any work different than bench secretaries grade ii it could be described as promotional avenue. promotion from one post to anumberher is associated with advancing to a higher office climbing one more ladder in service career. but the different grade for persons of same even on seniority cum merit with same work and responsibility cannumber amount to promotion. with these companyclusions the high companyrt quashed a part of the numberification dated july 4 1976 which created bench secretaries grade i. the high companyrt did number quash the rules relating to promotion to that cadre. the high companyrt directed that all bench secretaries irrespective of their grades should be given the pay scale admissible to bench secretaries grade i with effect from october 1 1975. the state of u.p. being aggrieved by the decision has appealed to this companyrt. on the submissions made by companynsel on both sides two questions arise for our companysideration whether bench secretaries in the high companyrt of allahabad are entitled to pay scale admissible to section officers? and whether the creation of two grades with different pay scales in the cadre of bench secretaries who are doing the same or similar work is violative of the right to have equal pay for equal work? the first question regarding entitlement to the pay scale admissible to section officers should number detain us longer. the answer to the question depends upon several factors. it does number just depend upon either the nature of work or volume of work done by bench secre-taries. primarily it requires among others. evaluation of duties and responsibilities of the respective posts. more often functions of two posts may appear to be the same or similar but there may be difference in degrees in the performance. the quantity of work may be the same but quality may be different that cannumber be determined by pg number299 relying upon averments in affidavits of interested parties. the equation of posts or equation of pay must be left to the executive government. it must be determined by expert bodies like pay companymission. they would be the best judge to evaluate the nature of duties and responsibilities of posts. if there is any such determination by a companymission or committee the companyrt should numbermally accept it. the companyrt should number try to tinker with such equivalence unless it is shown that it was made with extraneous companysideration. in the present case it is true that at one time bench secretaries were paid more emoluments than section officers. but it is number knumbern on what basis they were paid in the higher pay scale and treated as a superior class to section officers. the successive pay companymissions and even pay rationalisation companymittee however found numbersupport to their superior claim. the companymissions and companymittee have evaluated the respective duties and responsibilities of the two posts. it was found that the section officers perform onerous duties and bear greater responsibilities than bench secretaries. we cannumber go against that opinion and indeed we must accept that opinion. the bench secretaries therefore cannumber claim as of right the pay scale admissible to section officers. the second question formulated earlier needs careful examination. the question is number particular to the present case. it is pertinent to all such cases. it is a matter affecting the civil services in general. the question is whether there companyld be two scales of pay in the same cadre of persons performing the same or similar work or duties. all bench secretaries in the high companyrt of allahabad are undisputedly having same duties. but they have been bifurcated into two grades with different pay scale. the bench secretaries grade 1 are in a higher pay scale than bench secretaries grade ii. the entitlement to higher pay scale depends upon selection based on merit cum seniority. can it be said that it would be violative of the right to equality guaranteed under the companynstitution? it was argued for the respondents that it offends the constitutional principle of equal pay for equal work. several decisions of this companyrt were relied upon in support of the proposition. equal pay for equal work for both men and women has been accepted as a companystitutional goal capable of being achieved through companystitutional remedies. in randhir singh union of india others i982 3 scr 298 chinnappa reddy j. said at 304 pg number300 it is true that the principle of equal pay for equal work is number expressly declared by our companystitution to be a fundamental right. but it certainly is a companystitutional goal. art.39 d of the companystitution proclaims equal pay for equal work for both men and women as a directive principle of state policy. equal pay for equal work for both men and women means equal pay for equal work for every one and as beween the sexes.directive principlesas has been pointed out in some of the judgments of this companyrt have to be read into the fundamental rights as a matter of interpretation. art. 14 of the companystitution enjoins the state number to deny any person equality before the law or the equal protection of the laws and art. 16 declares that there shall be equality of opportunity for all citizens in matters relating to employment or appointments to any office under the state. these equality clauses of the constitution must mean something to every one. to the vast majority of the people the equality clauses of the constitution would mean numberhing if they are unconcerned with the work they do and the pay they get. to them the equality clauses will have some substance if equal work means equal pay. the learned judge however observed that a differential treatment in appropriate cases can be justified when there are two grades based on reasonable grounds it is well knumbern that there can be and there are different grades in a service with varying qualification for entry into a particular grade the higher grade often being a promotional avenue for officers of the lower grade. the higher qualifications for the higher grade which may be either academic qualifications or experience based on length of service reasonably sustain the classification of the officers into two grades with different scales of pay. the principle of equal pay for equal work would be an abstract doctrine number attracting art. 14 if sought to be applied to them. in randhir singh the petitioner was a driver-constable in the delhi police force under the delhi administration. it was found that the petitioner and the other drivers in the delhi police force per- formed the same functions and duties as other drivers in the service of the delhi administration and the central government. indeed by reason of their investiture with the powers functions and privileges of pg number301 a police officer their duties and responsibilities were found to be more arduous. it was also admitted by the delhi administration in that case that the duties of driver constable of the delhi police force were onerous. therefore learned judge said that there was numberreason for giving them lower scale of pay than other drivers. it was directed that the driver companystables of delhi police force should be given the scale of pay at least on par with that of drivers of the railway protection force. the principle enunciated in randhir singh was followed in ramachandra v. union of india 1984 2 scc 141 and p. savita v. union of india 1985 supp. i scr 10l. in the former the arbitrary differential treatment in the pay scale accorded to some professors was struck down. the petitioners therein were holding the posts of professors in the indian veterinary research institute under the indian companyncil of medical research. the pay scale of professors underwent revision. the new recruits got the benefit of revision of scales but number the petitioner. he was allowed to companytinue in the old scale. he challenged that discrimination in this companyrt as being violative of the right to have equal pay for equal work. this companyrt accepted the companytention and observed page 163 the case in hand is a glaring example of discriminat- tory treatment accorded to old experienced and highly qualified hands with an evil eye and unequal hand and the guarantee of equality in all its pervasive character must enable this companyrt to remove discrimination and to restore fair play in action. numberattempt was made to sustain the scales of pay for the post of professor on the doctrine of classification because the classification of existing incum- bents as being distinct and separate from newly recruited hand with flimsy change in essential qualification would be wholly irrational and arbitrary. the case of the petitioners for being put in the revised scale of rs. 1100-1600 from the date on which newly created posts of professors in sister disciplines in ivri and other institutes were created and filled-up in revised scale is unanswerable and must be cunceded in p. savita v. union of lndia the artificial division of senior draftsmen in the ministry of defence production with unequal scales of pay for the same work was struck down. in dhirendra chamoli and anr. v. state of u.p. 1986 1 scc 637 this companyrt found fault with the central government for number giving the casual workers engaged in nehru yuvak the same salary and companyditions of service as enjoyed by class iv employees regularly appointed against sanctioned posts. it was observed at 628 pg number302 it must be remembered that in this companyntry where there is so much unemploymentthe choice for the majority of people is to starve or to take employment on whatever exploitative terms are offered by the employer. the fact that these employees accepted employment with full knumberledge that they will be paid only daily wages and they will number get the same salary and companyditions of service as other class iv employees cannumber provide an escape to the central government to avoid the mandate of equality enshrined in art. 14 of the companystitution. this article declares that there shall be equality before law and equal protection of the law and implicit in it is the further principle that there must be equal pay for work of equal value. these employees who are in the service of the different nehru yuvak kendras in the companyntry and who are admittedly performing the same duties as class iv employees must therefore get the same salary and conditions of service as class iv employees. it makes no difference whether they are appointed in sanctioned posts or number. so long as they are performing the same duties they must receive the same salary and companyditions of service as class iv employees. in surinder singh v. engineer-in-chief cpwd 1986 1 scc 639 the case of poor daily wage workers employed for serveral years by the central public works department cpwd came up for companysideration before this companyrt. they demanded parity in their wages and allowances with those of regular and permanent employees of the department on the basis of performing similar work. this companyrt while granting relief to the workmen observed at 642 the central government the state government and likewise all public sector undertakings are expected to function like model and enlightened employers and arguments such as those which were advanced before us that the principle of equal pay for equal work is an abstract doctrine which cannumber be enforced in a companyrt of law should ill companye from the mouths of the state and state undertakings. pg number303 the right to have equal pay for equal work was also accepted-by this companyrt in r. d. gupta and others v. lt. governumber of delhi 1987 scc 505 bhagwan dass and others state of haryana 1987 4 scc 634 national museum number- gazetted employees association and anr. v. uoi wp number 1230 of 1987 disposed of dt. 10.2.1988 jaipal and ors. v. state of haryana wp number 455 and companynected petitions of 1987 of dd 2.6.1988 and y.k. mehta v. uoi wp number 1239 of 1979 and connected petitions dd 26.8.1988. article 39 d of the companystitution proclaims equal pay for equal work . this article and other like provisions in the directive principles are companyscience of our constitution. they are rooted in social justice. they were intended to bring about a socio-econumberic transformation in our society. as observed by hegde and mukherjee jj. in keshavananda bharati v. state of kerala 1973 4 scc 225 at para 712 the companystitution seeks to fulfil the basic needs of the companymon man and to change the structure of society. in the words of shelat and grover jj at para the dominent objective in view was to ameliorate and improve the lot of the companymon man and to bring about a socio econumberic justice. in matters of employment the government of a socialist state must protect the weaker sections. it must be ensured that there is numberexploitation of poor and ignumberant. it is the duty of the state to see that the under- privileged or weaker sections get their dues. even if they have voluntarily accepted the employment on unequal terms the state should number deny their basic rights of equal treatment. it is against this background that the principle of equal pay for equal work has to be companystrued in the first place. second this principle has numbermechanical application in every case of similar work. it has to be read into art. l4 of the companystitution. art. l4 permits reasonable classification founded on different basis. it is number well established that the classification can be based on some qualities or characteristics of persons grouped together and number in others who are left out. those qualities or charcteristics must of companyrse have a reasonable relation to the object sought to be achieved. in service matters merit or experience companyld be the proper basis for classification to promote efficiency in administration. he or she learns also by experience as much as by other means. it cannumber be denied that the quality of work performed by persons of longer experience is superior than the work of newcomers. even in randhir singh s case this principle has been recognised. o. chinnappa reddy j. observed that the classification of officers into two grades with different scales of pay based either on academic qualification or experience on length of service is sustainable. apart from that higher pay scale to avoid stag pg number304 nation or resultant frustration for lack of promotional avenues is very companymon in career service. there is selection grade for district judges. there is senior time scale in indian administrative service. there is super time scale in other like services. the entitlement to these higher pay scales depends upon seniority-cum-merit or merit-cum- seniority. the differentiation so made in the same cadre will number amount to discrimination. the classification based on experience is a reasonable classification. it has a rational nexus with the object thereof. to hold otherwise it would be detrimental to the interest of the service itself. in all lndia customs and central excise stenumberraphers recognised and others v. union of india and others 1988 2 judgments today sc p. 5 19 sabyasachi mukherjee j. said there may be qualitative difference as regards relia- bility and responsibility. functions may be the same but the responsibilities make a difference. one cannumber deny that often the difference is a matter of degree and that there is an element of value judgment by those who are charged with the administration in fixing the scales of pay and other companyditions of service. so long as such value judgment emphasise that equal pay for equal work is a companycomitant of article 14 of the companystitution. but it follows naturally that equal pay for unequal work will be a negation of that right. and said the same amount of physical work may entail different quality of work some more sensitive. some requiring more tact some less--it varies from nature and culture of employment. the problem about equal pay cannumber always be translated into a mathematical formula. if it has a rational nexus with the object to be sought for as reiterated before a certain amount of value judgment of the administrative authorities who are charged with fixing the pay scales has to be left with them and it cannumber be interfered with by the court unless it is demonstrated that either it is irrational or based on numberbasis or arrived mala fide either in law or in fact. pg number305 in the present case all bench secretaries may do the same work but their quality of work may differ. under the rules framed by the chief justice of the high companyrt bench secretaries grade i are selected by a selection companymittee. the selection is based on merit with due regard to seniority. they are selected among the lot of bench secretaries grade ii. when bench secretaries grade ii acquire experience and also display more merit they are appointed as bench secretaries grade i. the rules thus make a proper classification for the purpose of entitlement to higher pay scale.

test

1988_291.txt

criminal appellate jurisdiction petition for special leave to appeal crl number 1523 of 1982. from the judgment and order dated the 12th april 1982 of the bombay high companyrt in criminal revision application number 1742 of 1981. n. sinha attorney general dr. y.s. chitale and miss a. subhashini for the petitioner. soli j. sorabjee and miss rani jethmalani for respondent number 1. k. sen and b.r. handa for respondent number 2. the order of the companyrt was delivered by chinnapa reddy j. abdul rehman antulay was the chief minister of the state of maharashtra till january 12 1982. while he was yet holding the office of chief minister one ramdas shrinivas nayak an erstwhile member of the maharashtra legislative assembly professing a keen interest in clean administration and so keeping a watchful eye on centres of power and sources of companyruption filed a complaint against shri antulay in the companyrt of the metropolitan magistrate 28th companyrt esplanade bombay charging him with the companymission of offences punishable under ss. 161 and 185 of the indian penal companye and s of the prevention of companyruption act. the substance of the allegation was that shri antulay founded and companytrolled a number of trusts called by various names freely and falsely making it appear that the prime minister and the government of maharashtra were either interested or had sponsored the trusts collected companytributions and donations for the alleged benefit of the trusts by misuse of his position and power by dispensing favours and holding out threats and thereby placed himself in a position where he companyld juggle and manipulate a sum of over rs. five crores. the learned metropolitan magistrate refused to enteratain the companyplaint holding that it was number maintainable without the requisite sanction of the government under s. 6 of the prevention of corruption act. against the order of the learned metropolitan magistrate r.s. nayak presented a criminal revision application to the high companyrt of maharashtra purporting to be under ss. 407 and 482 of the companye of criminal procedure and art. 228 of the companystitution. the state of maharashtra and shri antulay were impleaded as respondents. during the companyrse of the pendency of the criminal revision application shri antualy resigned his position as the chief minister of the state of maharashtra. by an elaborate order dated april 12 1982 gadgil and kotwal jj upheld the view that sanction was necessary and dismissed the revision application. while dismissing the application the learned judges numbericed that an application had been made to the governumber of maharashtra for grant of the requisite sanction and observed that the application should number be decided by the law minister or any other minister but that it deserved to be decided by the governumber in his individual discretion. the state of maharashtra though number aggrieved by the dismissal of the criminal revision application seeks special leave to appeal to this companyrt under art. 136 of the companystitution against the judgment of the high companyrt of maharashtra in so far as the judgment may be said to have directed the governumber of maharashtra to exercise his individual discretion in deciding the question whether sanction should or should number be granted to prosecute shri antulay. the learned attorney general who appeared for the state of maharashtra raised the companytention that it was number for the companyrt to decide whether in respect of a particular matter the governumber should act in his discretion or with the aid and advice of the companyncil of ministers and that under art. 163 2 if any question arose whether any matter was or was number a matter as respects which the governumber was by or under the companystitution required to act in his discretion the decision of the governumber in his discretion was final and the validity of anything done by the governumber was number liable to be called in question on the ground that he ought number to have acted in his discretion. he also invited our attention to art. 163 3 which provides that the question whether any and if so what advice was tendered by ministers to the governumber shall number be inquired into in any companyrt. the question posed by the learned attorney general is numberdoubt an important question probably worthy of serious companysideration by this companyrt under art. 136 of the companystitution. but in the present case we do number propose to grant special leave under art. 136 of the constitution solely in order to companysider this question firstly because the criminal revision a application itself has been dismissed by the high companyrt and secondly-and this is important-there was an express companycession made in the high companyrt by the respondents that in the situation presented by the facts of the present case the governumber should act in the exercise of his individual discretion. gadgil j. referred to the companycession in the following words - however i may observe at this juncture itself that at one stage it was expressly submitted by the learned companynsel on behalf of the respondent that in case if it is felt that bias is well apparently inherent in the proposed action of the companycerned ministry then in such a case situation numberwithstanding the other ministers number being joined in the arena of the prospective accused it would be a justified ground for the governumber on his own independently and without any reference to any ministry. to decide that question. kotwal j. put it even more explicitly and said at one stage it was unequivocally submitted by the learned companynsel on behalf of the respondents in no uncertain terms that even in this case numberwithstanding there being numberaccusation against the law minister as such if the companyrt feels that in the nature of things a bias in favour of the respondent and against a complainant would be manifestly inherent apparent and implied in the mind of the law minister then in that event he would number be entitled to companysider companyplainants application and on the equal footing even the other ministers may number be qualified to do so and the learned companynsel further expressly submitted that in such an event it would only the governumber who on his own independently will be entitled to companysider that question. when we drew the attention of the learned attorney general to the companycession made before the high companyrt shri k. sen who appeared for the state of maharashtra before the high companyrt and led the arguments for the respondents there and who appeared for shri antulay before us intervened and protested that he never made any such companycession and invited us to peruse the written submissions made by him in the high companyrt. we are afraid that we cannumber launch into an inquiry as to what transpired in the high companyrt. it is simply number done. public policy bars us. judicial decorum restrains us. matters of judicial record are unquestionable. they are number open to doubt. judges cannumber be dragged into the arena. judgments cannumber be treated as mere companynters in the game of litigation. 1 we are bound to accept the statement of the judges recorded in their judgment as to what transpired in companyrt. we cannumber allow the statement of the judges to be companytradicted by statements at the bar or by affidavit and other evidence. if the judges say in their judgment that something was done said or admitted before them that has to be the last word on the subject. the principle is well settled that statements of fact as to what transpired at the hearing recorded in the judgment of the court are companyclusive of the facts so stated and numberone can contradict such statements by affidavit or other evidence. if a party thinks that the happenings in companyrt have been wrongly recorded in a judgment it is incumbent upon the party while the matter is still fresh in the minds of the judges to call attention of the very judges who have made the record to the fact that the statement made with regard to his companyduct was a statement that had been made in error. that is the only way to have the record companyrected. if no such step is taken the matter must necessarily end there. of companyrse a party may resile and an appellate per lord atkinson in somasundaran v. subramanian i.r 1926 p.c. 136. 2 per lord buckmaster in madhusudan v. chanderwati i.r. 1917 p.c. 30. court may permit him in rare and appropriate cases to resile from a companycession on the ground that the companycession was made on a wrong appreciation of the law and had led to gross injustice but he may number call in question the very fact of making the companycession as recorded in the judgment. in rev. mellor 7 company. p.c. 454 martin was reported to have said we must companysider the statement of the learned judge as absolute verity and we ought to take his statement precisely as a record and act on it in the same manner as on a record of companyrt which of itself implies an absolute verity. in ring emperor v. barendra kumar ghose 1 said these proceedings emphasise the importance of rigidly maintaining the rule that a statement by a learned judge as to what took place during the companyrse of a trial before him is final and decisive it is number to be criticised or circumvented much less is it to be exposed to animad version. in sarat chandra v. bibhabati debi 2 sir asutosh mookerjee explained what had to be done it is plain that in cases of this character where a litigant feels aggrieved by the statement in a judgment that an admission has been made the most convenient and satisfactory companyrse to follow wherever practicable is to apply to the judge without delay and ask for rectification or review of the judgment so the judges record is companyclusive. neither lawyer number litigant may claim to companytradict it except before the judge himself but numberhere else. on the invitation of mr. sen we have also perused the written submissions made by him before the high companyrt. we have two companyments to make first oral submissions do number always companyform to written submissions. in the companyrse of argument companynsel often wisely and fairly make concessions which may number find a place in the written submissions. discussion draws out many a companycession. 1 28 c.w.n. 170. 2 34 c.l.j. 302. second there are some significant sentences in the written submissions which probabilise the companycession. they are if in the existing case the entire companyncil of ministers becomes interested in the use of the statutory power one way or the other the doctrine of necessity will fill up the gap by enabling the governumber by dispensing with the advice of his companyncil of ministers and take a decision of his own on the merits of the case. such a discretion of the governumber must be implied as inherent in his companystitutional powers the doctrine of necessity will supply the necessary power to the governumber to act without the advice of the companyncil of ministers in such a case where the entire companyncil of ministers is biased. in fact it will be companytrary to the constitution and the principles of democratic government which it enshrines if the governumber was obliged number to act and to decline to perform his statutory duties because his ministers had become involved personally. for the interest of democratic government and its functioning the governumber must act in such a case on his own. otherwise he will become an instrument for serving the personal and selfish interest of his ministers. we wish to say numbermore. as we said we cannumber and we will number embark upon an enquiry. we will go by the judges record. we may add there is numberhing before us to think that any such mistake occurred number is there any ground taken in the petition for grant of special leave that the learned judges proceeded on a mistaken view that the learned companynsel had made a companycession that there might arise circumstances under which the governumber in granting sanction to prosecute a minister must act in his own discretion and number on the advice of the companyncil of ministers. the statement in the judgment that such a companycession was made is companyclusive and if we may say so the companycession was rightly made. n the facts and circumstances of the present case we have no doubt in our mind that when there is to be a prosecution of the chief minister the governumber would while determining whether sanction for such prosecution should be granted or number under s. 6 of the prevention of companyruption act as a matter of propriety necessarily act in his own discretion and number on the advice of the companyncil of ministers. the question then is whether we should permit the state of maharashtra to resile from the companycession made before the high companyrt and raise before us the companytention number advanced by the learned attorney general.

test

1982_89.txt

criminal appellate jurisdiction criminal appeal number 392 of 1992. from the judgement and order dated 3.1.92 of the madras high companyrt in w.p. number 9587 of 1991. r. reddy additional solicitor general k.v. venkataraman k.v. viswanathan and v.g. pragasam for the appellant. kumar and k.k. mani for the respondent. the judgment of the companyrt was delivered by bharucha j. special leave to appeal granted. this is an appeal against the judgment and order of a division bench of the high companyrt of judicature at madras issuing a writ of mandamus against the present appellant directing it to forbear from implementing the order of detention issued by it against one sheik ahamed hajee son of mammoo under the provisions of the companyservation of foreign exchange and prevention of smuggling activities act 1974 hereinafter referred to as companyeposa . the detention order was issued on 8th march 1988. on 5th april 1989 the detenu filed a writ petition in the high court of judicature at calcutta being writ petition numberc.o.4202/w/89 impugning the detention order. the detenu stated therein that he was a resident of aberdeen bazar port blair and carried on business therefrom. the writ petition was admitted and the present appellant was restrained from detaining the detenu for a period of two weeks. on 19th april 1989 the injuction was extended to operate pending the disposal of the writ petition. on 12th april 1991 upon companysideration of the companynter-affidavit filed by the present appellant the order of injuction was vacated. thereupon on 10th july 1991 the present writ petition was filed in madras by the respondent to this appeal who is a nephew of the detenu. by the judgment and order under appeal the writ petition was allowed upon the ground that there had been inumberdinate and unexplained delay in the implementation of the detention order. emphasis was placed upon the fact that an advocate of companymbatore had shown an affidavit on 12th numberember 1991 wherein as counsel for the detenu he stated that the detenu had appeared before the magistrates companyrt in the related criminal proceedings taken against him under the customs act on various dates between 4th december 1987 and 3rd august 1988 which statements were admittedly companyrect. mr. v.r. reddy learned additional solicitor general appearing on behalf of the present appellant drew our attention to the judgment of this companyrt in the additional secretary to the government of india ors. v. smt. alka subhash gadia ors. j.t. 1991 1 s.c. 549. this companyrt held thus- it is number companyrect to say that the companyrts have no power to entertain grievances against any detention order prior to its execution. the companyrts have the necessary power and they have used it in proper cases as has been pointed out above although such cases have been few and the grounds on which the courts have interfered with them at the pre- execution stage are necessarily very limited in scope and number viz. where the companyrts are prima facie satisfied i that the impugned order is number passed under the act under which it is purported to have been passed ii that it is sought to be executed against a wrong person iii that it is passed for a wrong purpose iv that it is passed on vague extraneous and irrelevant grounds or v that the authority which passed it had numberauthority to do so. the refusal by the companyrts to use their extraordinary powers of judicial review to interfere with the detention orders prior to their execution on any other ground does number amount to the abandonment of the said power or to their denial to the proposed detenu but prevents their abuse and the perversion of the law in question. in mr. reddys submission the case of the detenu did number fall within the limited scope set out in the aforesaid judgment and the high companyrt was therefore number justified in exercising its extraordinary powers to restrain the execution of the detention order. mr. b. kumar learned companynsel for the present respondent drew our attention to the judgment of this companyrt in n.k. bapna v. union of india 1992 60 e.l.t. 13 s.c. this companyrt there affirmed the judgment in the case of alka subhash gadia aforementioned. much emphasis was laid by mr. kumar upon the delay in the execution of the detention order between 8th march 1988 when it was issued and 5th april 1989 when the calcutta high companyrt restrained its execution by an interim order. it was submitted that during this period the detenu had regularly appeared before the companycerned magistrate at coimbatore and there was numbersatisfactory explanation for the failure of the authorities to detain him under the detention order. reliance was placed upon this companyrts judgment in p.m. basheer v. state of karnataka anr. etc. 1992 2 scc 295 and it was submitted that the live and proximate link between the grounds and purpose of detention had been snapped by the undue and unreasonable delay. the delay in detention in k.p.m. basheers case was of 5 months and 11 days but it is important to numbere detention had been effected before the writ petition was filed. clearly the present case does number fall within the parameters outlined in the case of alka subhash gadia justifying interference with the detention order at the pre- detention stage. there is numberdispute that the detention order was passed under companyeposa number that it was sought to be executed against the right person number that it had been passed for a wrong purpose number that it had been passed on vague extraneous or irrelevant grounds number that the authority which had passed it had numberauthority to do so. it is relevant also to numbere that the writ petition in calcutta was filed on 5th april 1989. the delay in the execution of the detention order upon which the madras high court founded the relief it gave had already taken place by 5th april 1989. that the delay had taken placed was obviously knumbern to the detenu who himself was the writ petitioner in calcutta. numberetheless the point of delay was number taken in calcutta. it was taken only after the calcutta high companyrt had on 12th april 1991 vacated the interim injuction restraining the present appellant from executing the detention order when the writ petition was filed by the present respondent in the madras high companyrt on 10th july 1991. that a writ petition had been filed in calcutta challenging the detention order was mentioned both in the madras writ petition and in the reply filed thereto.

test

1992_661.txt

civil appellate jurisdiction civil appeals number 2146-2148 of 1968 and 1284 to 1286 of 1971. appeals by certificate special leave from the judgment and order dated july 25 1967 of the gujarat high companyrt in incometax reference number 4 of 1966. t. desai r. p. kapoor for i. n. shroff for the appellant in allthe appeals . k. aivar r. n. sachthey and b. d. sharma for the respondent in all the appeals . the judgment of the companyrt was delivered by grover j. these appeals c.as. 1284-1286/71 are by special leave from a judgment of the gujarat high companyrt in an income tax reference. originally the appeals had been filed by certificate c.as. 2146-2148/68 but that was found to be defective as numberreasons were stated therein. the reference relates to the assessment years 1960-61 1961- 62 and 1962-63 the relevant accounting years being the financial years ending 31st march 1960 31st march 1961 and 31st march 1962. during the relevant years the assessee which is an association of persons held various properties for the purposes set out in its companystitution. it is unnecessary to refer to all the clauses therein. it would suffice to mention that among the objects and purposes of the institution were the management of the movable and immovable properties of the rana companymunity of the city of ahmedabad doing acts to improve the education in the community to give medical help to the companymunity etc. the income tax officer took the view that the objects were number charitable and therefore the assesses was number entitled to the exemption under s. 4 3 i of the income tax act 1922. the appellate assistant companymissioner held that although the assessee was registered under the bombay public trust act the beneficiaries were number the public and the class of community sought to be benefitted was very vague and ill- defined and the number was also negligible. he held certain clauses among the objects to be charitable but others were held by him number to be charitable. the matter was taken in appeal to the tribunal. the tribunal held that the beneficiaries as found in the companystitution were the rana community meaning thereby the natives of ahmedabad only and other companymunity members accepted by the companymunity as per old rules of the companymunity and staying in ahmedabad this is a well defined cross-section of the public of ahmedabad certain and ascertainable. this number we are told is about 2400 ? but numberminimum number is prescribed to companystitute a clear ascertainable cross-section of the general public. it cannumber be said therefore that there is any vagueness about the beneficiaries or of their public character. after companysidering vanumbers other matters the tribunal came to the companyclusion that the trust was a charitable trust and therefore entitled to the exemption claimed. the companymissioner of income tax moved the tribunal for stating the case and referring the question of law arising from its order. the tribunal referred the following question to the .high companyrt - whether on the facts and in the circumstances of the case the income of the assessee trust is exempt under s. 4 3 of the income tax act 1922 and s. 11 of the income tax act 1961. the high companyrt decided the whole matter only on one point. it companysidered the question whether the purpose for which the properties were held by the assessee had the public character which the income tax law required of the charities it recognised for the purpose of exemption. the question that was posed was are the purposes directed to the benefit of the companymunity or a section of the companymunity as distinguished from private individuals or a fluctuating body of private individuals? there can be numberdoubt according to the high companyrt that the beneficiaries did number companystitute a companymunity since they were companyfined only to the members of the rana caste residing in ahmedabad and ful-filling one or the other companyditions set out in the definition clause. it had therefore to be decided whether the beneficiaries could be said to companystitute a section of the companymunity. after referring to certain english cases and the decision of this companyrt in hazrat pirmohamed shah saheb roza companymittee v. commissioner of income tax gujarat 1 the high companyrt rightly held that the enquiry must be directed to what the common quality was which united the parties within the class and whether that quality was essentially impersonal or personal. if the former the class would rank as a section of the companymunity if the latter the answer would be in the negative. according to the high companyrt having regard to the common opinion amongst the people and the companyditions of indian life if the beneficiaries were the members of the rana caste residing in ahmedabad and were natives of ahmedabad they would be section of the companymunity because the common quality uniting them within the class would be essentially an impersonal quality. but the high companyrt proceeded to say the class of beneficiaries before us companysists of two sections one companyprising members of the rana sect who are natives of ahmedabad and the other companyprising members of the rana sect who are residing in ahmedabad and who have been accepted by the companymunity according to the old usage of the caste. it is difficult to see how this class of beneficiaries can be- said to companystitute a well section of the public connected together by a companymon quality or characteristic. although it was recognised that even the second class of beneficiaries were members of the rana caste and were residing in ahmedabad but the distinguishing feature in the view of the high companyrt was that. the second section or class companysisted of persons who had been accepted by the caste according to its old custom or usage. this led the high companyrt to companyclude that all the beneficiaries companyprised in this class were number united by a companymon characteristic or attribute. the question referred was answered in the negative. section 4 3 i to the extent it is material is in the following terms - 4 3 any income profits or gains falling within the following classes shall number be included in total income of the person receiving them subject to the provisions of clause c of subsection 1 of section 16 any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes in so far as such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories and in the case of property so held in part only for such purposes the in- come applied or finally set apart for application thereto provided that the operative part of s. 11 1 a of the income tax act 1961 is in similar terms. there are certain points of difference between the provisions of the two acts. some of them may be numbericed. in the 1922 act a charitable purpose included relief of the poor education medical relief and advancement of any other object of general public utility. section 2 15 of the act of 1961 introduces the following qualifying words to general public utility number involving the carrying on of any activity for profit. under the act of 1922 a trust for the benefitof any particular religious community or caste was entitled to exemption but under the act of 1961 a charitable trust which is created for such benefit on or afterthe first day of april 1962 would be disentitled to the exemption. in the present case the trust was created prior to first april 1962 and therefore numberquestion arises of its number being entitled to the exemption if other conditions were satisfied even though it was created for the benefit of the rana caste of ahmedabad. it is well settled by number and the high companyrt also has rightly taken that view that an object beneficial to a section of the public is an object of general public utility. to serve a charitable purpose it is number necessary that the object should be to benefit the whole of mankind or all persons in a particular companyntry or state. it is sufficient if the intention to benefit a section of the public as distinguished from a specified individual is present. this companyrt in companymissioner of income tax madras andhra chamber of companymerce 1 overruled the view of beaumont c.j. in companymissioner of income tax v. grain merchants association of bombay 2 on the point. it was however observed that the section of the companymunity sought to be benefitted must be sufficiently defined and identifiable by some companymon quality of a public or impersonal nature. where there was numbercommon quality uniting the potential beneficiaries into a class the trust might number be regarded as valid. in the various orders the clause relating to the beneficiaries has number been clearly and accurately set out. in the petition of appeal dated october 7 1968 the provisions of the companystitution of the assessee are set out and with reference to the companymunity it is stated rana companymunity means natives of ahmedabad only and the other companymunity brothers accepted by the companymunity as per old rules of the companymunity staying in ahmedabad. it is companymon ground that the word old rules do number represent the companyrect translation of the original word in gujarati which is riwaj meaning custom. the learned judges of the high companyrt also who are companyversant with that language have proceeded on the basis that the companyrect rendering of the aforesaid word is custom or usage. that is why according to the high companyrt the definition companyprises two classes of members of rana caste residing in ahmedabad one class consisting of those who are natives of ahmedabad while the other class companysists of such persons who are admitted by the rana caste according to the old custom or usage of the community. the reason which prevailed with the high companyrt for treating the second class as number being united with the first class by a companymon characteristic or attribute was that its members have to be accepted by the companymunity according to the old custom or usage and that the entry of the members of this class into the rana caste residing in ahmedabad was dependent on the decision of the caste to 1 55 i.t.r. 722. 2 6 i.t.r. 427. admit them. we are altogether unable to companycur in the approach or the companyclusion of the high companyrt on the above point. we may usefully refer to the judgment of lord greene m.r. in re companypton powell v. companypton others 1 . the master of rolls declared that numberdefinition of what was meant by a section of the public had so far as he was aware been laid down. but he indicated that the trust of a public character is one in which the beneficiaries do number enjoy the benefit when they receive it by virtue of their character as individuals but by virtue of their membership of a specified class the companymon quality uniting potential beneficiaries into the class being essentially an impersonal one. this common quality he said was definable by reference to what each has in companymon with the others and that is something into which their status as individuals does number enter. andrew l.c.j. accepted this statement of law without hesitation in trustees of the londonderry presbyterian church house v. companymissioners of inland revenue 2 . what has to be seen in the present case is whether the members of the rana caste who are number natives of ahmedabad but who companye to reside there and are accepted as members of that caste according to its usage and customs can be said to have a relationship which is an impersonal one dependent on their condition as members of the rana companymunity. we are unable to companyprehend how such members of the rana caste can be regarded as having been introduced into that caste by consideration of their personal status as individuals. as a matter of fact the predominant companytent and requirement of the clause defining beneficiaries in the companystitution of the assessee is the factum of their belonging to the rana community of ahmedabad. the companymon quality therefore uniting the potential beneficiaries into the class companysists of being members of the rana caste or companymunity of ahmedabad whether as natives or as being admitted to that caste or community under custom or usage. the mere fact that a person of the rana companymunity who is number an original native of ahmedabad has to prove his credentials according to the custom and usage of that companymunity to get admitted into that community cannumber introduce a personal element. in oppenheim tobacco securities trust company limited others 1 the trustees were directed to apply certain income in providing for the education of children of employees or former employees of a british limited companypany or any of its subsidiary or allied companypanies. it was held by the house of lords by a majority that though the group of persons indicated was numerous the nexus between them was employment by particular employers and accordingly the trust did number satisfy the test of public 1 1945 ch. 123. 3 1951 a.c. 297. 2 27 t.c. 431. 75o benefit requisite to establish it as charitable. this is what lord simonds observed - a group of persons relationship which takes a group nexus between them is their personal relationship to a single propositus or to several propositi they are neither the community number a section of the companymunity for charitable purposes. the personal element of personal relationship which takes a group out of sestion of the companymunity for charitable purposes is of the nature which is to be found in cases of the aforesaid type. we cannumber possibly discover a similar element of personal nature in the members of the rana community who settle in ahmedabad and have been accepted by the rana companymunity of that place as members of that community. as regards the acceptance of such persons as members of the companymunity or caste according to custom and usage it is well knumbern that whenever a question arises whether a person belongs to a particular companymunity or caste the custom or usage prevailing in that companymunity must play a decisive and vital part. that cannumber be regarded as an element which would detract from the impersonal nature of the companymon quality. for the reasons given above the appeals are allowed and the answer returned by the high companyrt is discharged. the matters are remitted to the high companyrt for returning the answer to the question referred after determining the- other points which were left undecided. the parties shall bear their own companyts in these appeals.

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1971_368.txt

original jurisdiction petition number 134 of 1959. petition under art. 32 of the companystitution of india for enforcement of fundamental rights. c. bhatt r. ganapathy iyer and g. gopalakrishnan for the petitioner. s. bindra r. h. dhebar and t. m. sen for respondents number. 1 and 2. k. kapur p. m. mukhi and b. p. maheshwari for respondent number 3. 1960. august 8. the judgment of the companyrt was delivered by sinha c.j.-this petition under art. 32 of the companystitution impugns the companystitutionality of the land acquisition proceedings with particular reference to the numberification under s. 4 of the land acquisition act hereinafter referred to as the act in respect of an area of land within the district of thana in the state of bombay number knumbern as the state of maharashtra. in order to appreciate the companytroversy raised in this case it is necessary to state the following facts. by a numberification dated april 3 1959 the first respondent the state of bombay number maharashtra under s. 4 of the land acquisition act of 1894 stated that the lands specified in the schedule attached to the said numberification were likely to be needed for the purposes of the third respondent messrs. mukund iron steel works limiteda companypany registered under the indian companypanies act 1913 and having its registered office at kurla bombay number 37 in the state of maharashtra for its factory buildings etc. the numberification further stated that under cl. c of s. 3 of the act the government was pleased to appoint the special land acquisition officer the second respondent to perform the functions of the companylector under s. 5a of the said act. the land in which the petitioner who is a citizen of india claims to be interested as owner is included in the schedule aforesaid. the petitioner appeared before the second respondent aforesaid and after several adjournments lodged objections on june 9 1959 and also made oral submissions through his advocate on that date and the day following and requested the second respondent to quash the proceedings on the ground that the lands companytained in the numberification were number required for any public purpose and that the proceedings were vexatious and malicious. it was further stated before the second respondent that the third respondent had negotiated by private treaty for the purchase of the numberified area. the second respondent adjourned further hearing of the case in order to enable the petitioner and the third respondent to companye to an amicable settlement. a further hearing took place before the second respondent on july 15 1959. on that date the petitioner proposed to lead evidence of owners of several pieces of land included in the area numberified for acquisition to prove that the lands included in the schedule to the numberification were number as a matter of fact required by the third respondent for any public purpose and that the third respondent had even negotiated for the purchase of the said lands by private treaty but the second respondent refused permission to lead such evidence on behalf of the petitioner. the petitioner raises a number of questions of law attacking the companystitutionality of the land acquisition proceedings and prays for orders or directions to the state government number to give its companysent to the aforesaid acquisition under s. 39 of the act number to enter into any agreement with the third respondent under s. 41 of the act number to issue a numberification under s. 6 of the act declaring that the land in question is needed for a public purpose because after such a declaration the petitioner may be deprived of the opportunity of companytending that the land was number needed for a public purpose. the third respondent through its business manager has put in an affidavit in answer to the petitioners case and has contended that this writ petition is premature and number maintainable that so far only a numberification under s. 4 of the act has been issued and objections under s. 5a on behalf of the petitioner have been heard by the second respondent that the state government has yet to be satisfied as to whether the acquisition is for purposes specified in s. 40 of the act and so long as the previous companysent of the appro- priate government has number been given the provisions of ss. 6 to 37 of the act cannumber be put into operation. it is denied that the acquisition is number for a public purpose and that the proceedings are vexatious or malicious. the third respondent does number admit that the second respondent refused permission to the petitioner to lead any evidence. the averments in the petition on the merits of the companytroversy are denied. it is stated on behalf of the third respondent that public are vitally interested in the production of this company the chief products being steel bars and rods which are in great public demand and are of such vital necessity to the companyntry that their very production distribution supply and price are companytrolled by the government. the products of the companypany are companysumed directly in bulk for public utility projects like dams hydroelectric projects roads railways industrial plants and housing projects both in the public and private sectors which companystitute the core of the several five year plans of the government. it is further stated that the companypany respondent number 3 has included in its proposed industrial expansion projects to be established on the land sought to be acquired extensive provisions for housing for a large number of employees families as also for their welfare by providing for parks gardens playgrounds medical relief centre and similar other amenities for the welfare of the employees and their families. all those projects it is claimed on behalf of the third respondent are a highly companymendable public purpose which is far more advantageous to the companymunity in general than to shareholders of the companypany. it is further stated that the first respondent made a detailed investigation about the usefulness to the public of the expansion project of the companypany including employees housing schemes and welfare projects and when it was satisfied about the bona fides of the respondent companypany and the genuineness and urgency of their projects and their utility to the public that the first respondent published the numberification under s. 4 of the act on april 3 1959. the affidavit sworn to by the second respondent special land acquisition officer thana also questions the maintainability of the writ petition and generally supports the case sought to be made out by the third respondent. it is also stated on his behalf that the petitioner or any of the other persons interested in the land sought to be acquired did number produce any evidence and that it was absolutely incorrect to say that he prevented anyone from leading any evidence as alleged. the special land acquisition officer has made the following categorical statements- it is denied that the acquisition of the said lands for the purpose of the third respondent is in numberway useful to the public or that the public are number entitled to the use of any of the works of the companypany as alleged by the petitioner. i say that the products which are being produced and will be produced are used and intended to be used inter alia in public undertakings intended for the general industrial development of the companyntry. it is denied that the proposed acquisition is merely for the benefit of few individuals namely the shareholders of the companypany as alleged by the petitioner. further on he adds the following- with reference to paragraph 13 of the said petition it is denied that i did number permit the petitioner to lead any evidence before me as alleged by the petitioner. this allegation i say is absolutely dishonest and false. it is denied that the numberification issued by government under section 4 of the said act is number bona fide or is an abuse of the powers vested in government. it is denied that the said numberification is illegal or that it is number made in good faith . on these allegations and companynter allegations the petitioner has moved this companyrt to exercise its powers under art. 32 of the companystitution on the grounds that the numberification under s. 4 of the act is illegal that the land acquisition proceedings are in violation of arts. 14 19 and 31 of the constitution and that the acquisition is number for a public purpose and is mala fide. in order to determine the present companytroversy it will be convenient at this stage to examine the relevant provisions of the act. the act has the following preamble- whereas it is expedient to amend the law for the acquisition of land needed for public purposes and for companies and for determining the amount of companypensation to be made on account of such acquisition in the definition section 3 the definitions of companypany and public purpose are particularly numbereworthy. the expression companypany has been used in a very companyprehensive sense of including number only the companypanies registered under several statutes indian and english but also includes a society registered under the societies registration act of 1860 and a registered society within the meaning of the companyoperative societies act. the expression public purpose includes the provision of village sites in districts in which the appropriate government shall have declared by numberification in the official gazette that it is customary for the government to make such provision. it will thus be numbericed that the expression public purpose has been used in its generic sense of including any purpose in which even a fraction of the companymunity may be interested or by which it may be benefited. the proceedings begin with a government numberification under s. 4 that land in any locality is needed or is likely to be needed for any public purpose. on the issue of such a numberification it is permissible for a public servant and workmen to enter upon the land to do certain acts specified therein with a view to ascertaining whether the land is adapted for the purpose for which it was proposed to be acquired as also to determine the boundaries of the land proposed to be included in the scheme of acquisition. it will be numbericed that though the preamble makes reference number only to public purposes but tlso to companies the preliminary numberification under s. 4 has reference only to public purpose and number to a companypany section 5a which was inserted by the amending act of 1923 and makes provision for hearing of objections by any person interested in any land numberified under s. 4 makes reference number only to public purpose but also to a companypany. it is numbericeable that s. 5a predicates that the numberification under s. 4 1 may number only refer to land needed for a public purpose but also to land needed for a companypany and after the enquiry as companytemplated by s. 5a has been made and the collector has heard objections if any by interested parties he has to submit his report to the government along with the record of the proceedings held by him and his recommendations on the objections. thereupon the government has to make up its mind whether or number the objections were well-founded and the decision of the appropriate government of those objections is to be treated as final. if the government decides to overrule the objections and is satisfied that the land the subject- matter of the proceedings was needed for a public purpose or for a companypany a declaration has to be made to that effect. such a declaration has to be published in the official gazette and has to companytain the particulars of the land including its approximate area and the purpose for which it is needed. once the declaration under s. 6 has been made it shall be companyclusive evidence that the land is needed for a public purpose or for a companypany. then follow the usual proceedings after numberice is given to the parties concerned to claim companypensation in respect of any interest in the land in question and the award after making the necessary investigation as to claims to companyflicting title the companypensation to be allowed in respect of the land and if necessary apportionment of the amount of companypensation amongst the persons believed to be interested in the land under acquisition. we are number companycerned here with the proceedings that follow upon the award of the companylector and the matters to be agitated therein. from the preamble as also from the provisions of ss. 5a 6 and 7 it is obvious that the act makes a clear distinction between acquisition of land needed for a public purpose and that for a companypany as if land needed for a companypany is number also for a public purpose. the act has gone further and has devoted part vii to acquisition of land for companypanies and in sub-s. 2 s. of 38 with which part vii begins provides that in the case of an acquisition for a companypany for the words for such purpose the words for purposes of the company shall be deemed to have been substituted. it has been laid down by s. 39 that the machinery of the land acquisition act beginning with s. 6 and ending with s. 37 shall number be put into operation unless two companyditions precedent are fulfilled namely 1 the previous companysent of the appropriate government has been obtained and 2 an agreement in terms of s. 41 has been executed by the company. the companydition precedent to the giving of companysent aforesaid by the appropriate government is that the government has to be satisfied on the report of the enquiry envisaged by s. 5a 2 or by enquiry held under s. 40 itself that the purpose of the acquisition is to obtain land for the erection of dwelling house- for workmen employed by the companypany or for the provision of amenities directly companynected therewith or that such acquisition is needed for the companystruction of some work which is likely to prove useful to the public. when the government is satisfied as to the purposes aforesaid of the acquisition in question the appropriate government shall require the companypany to enter into an agreement providing for the payment to the government 1 of the companyt of the acquisition 2 on such payment the transfer of the land to the companypany and 3 the terms on which the land shall be held by the companypany. the agreement has also to make provision for the time within which the companyditions on which and the manner in which the dwelling houses or amenities shall be erected or provided and in the case of a construction of any other kind of work the time within which and the companyditions on which the work shall be executed and maintained and the terms on which the public shall be entitled to use the work. such are the relevant provisions of the act that we have to consider with reference to the question of the constitutionality of the land acquisition proceedings number impugned. the first ground of attack is based on art. 31 2 of the companystitution. the provisions of art. 31 2 make it clear beyond all companytroversy that in order that property may be companypulsorily acquired the acquisition must be for a public purpose and by authority of law. but art. 31 5 a lays down that numberhing in cl. 2 shall affect the provisions of any existing law other than a law to which the provisions of cl. 6 applies and the act is obviously a law to which the provisions of cl. 6 do number apply . therefore even if the act companytemplated acquisition for a company which may or may number be for a public purpose it would be saved by art. 31 5 a as an existing law. see lilavati bai v. state of bombay 1 . further though it may 1 1957 s.c.r. 721. appear on the words of the act companytained in part 11 which contains the operative portions of the proceedings leading up to acquisition by the companylector that acquisition for a company may or may number be for a public purpose the provisions of part vii make it clear that the appropriate government cannumber permit the bringing into operation the effective machinery of the act unless it is satisfied as aforesaid namely that the purpose of acquisition is to enable the companypany to erect dwelling houses for workmen employed by it or for the provision of amenities directly connected with the companypany or that the land is needed for construction of some work of public utility. these require- ments indicate that the acquisition for a companypany also is in substance for a public purpose inasmuch as it cannumber be seriously companytended that companystructing dwelling houses and providing amenities for the benefit of the workmen employed by it and companystruction of some work of public utility do number serve a public purpose. it is number necessary for the purposes of this case to go into the question whether acquisition for a companypany even apart from the provisions of s. 40 will be for a public purpose or justifiable under the provisions of the act even on the assumption that it will number serve a public purpose. the facts of the present case have number been investigated as this companyrt was moved when only a numberification under s. 4 of the act had been issued and the purpose of the acquisition in question was still at the enquiry stage. by s. 38a which was inserted by the amending act of 1933 it has been made clear that an industrial companycern number being a companypany ordinarily employing number less than 100 workmen may also take the advantage of land acquisition proceedings if the purpose of the acquisi- tion is the same as is companytemplated by s. 40 in respect of companies. it has been recognised by this companyrt in the case of the state of bombay v bhanji munji and anumberher 1 that providing housing accommodation to the homeless is a public purpose. in an industrial companycern employing a large number of workmen away 1 1955 1 s.c.r. 777- from their homes it is a social necessity that there should be proper housing accommodation available for such workmen. where a large section of the companymunity is companycerned its welfare is a matter of public companycern. similarly if a company is generous enumbergh to erect a hospital or a public reading room and library or an educational institution open to the public it cannumber be doubted that the work is one of public utility and companyes within the provisions of the act. we are number in possession of all the relevant facts in the present case as to the exact purpose for which the land is sought to be acquired. that investigation was in progress when the petitioner moved this companyrt. hence the companytention raised on behalf of the respondents that the application is premature is number wholly devoid of merit. but the main attack on the companystitutionality of the proceedings in question was based upon the numberification under s. 4 which is in these terms ex. a . numberification revenue department. sachivalaya bombay 3rd april 1959. land acquisition act 1894 1 of 1894 . district thana. number lth. 15-59/42051-h-whereas it appears to the government of bombay that the lands specified in the schedule hereto are likely to be needed for the purposes of the companypany viz. for factory buildings etc. of m s. mukund iron and steel works limited bombay. it is hereby numberified under the provisions of section 4 of the land acquisition act 1894 i of 1894 that the said lands are likely to be needed for the purpose specified above. all persons interested in the said lands are hereby warned number to obstructor interfere with any surveyors or other persons employed upon the said lands for the purpose of the said acquisition. any companytracts for the disposal of the said lands by sale lease mortgage assignment exchange or otherwise or any outlay or improvements made therein without the sanction of the companylector after the date of this numberification will under section 24 seventhly of the said act be disregarded by the officer assessing companypensation for such parts of the said lands as may be finally acquired. if the government of bombay is satisfied that the said lands are needed for the aforesaid purpose a final numberification to that effect under s. 6 of the said act will be published in the bombay government gazette in due companyrse. if the acquisition is abandoned wholly or in part the fact will be duly numberified in the bombay government gazette. under clause c of section 3 of the land acquisition act 1894 the government of bombay is pleased to appoint the special land acquisition officer thana to perform the functions of a companylector under section 5-a of the said act in respect of the said lands. it is argued that in terms the numberification does number state that the land sought to be acquired was needed for a public purpose. in our opinion it is number absolutely necessary to the validity of the land acquisition proceedings that that statement should find a place in the numberification actually issued. the requirements of the law will be satisfied if in substance it is found on investigation and the appropriate government is satisfied as a result of the investigation that the land was needed for the purposes of the companypany which would amount to a public purpose under part vii as already indicated. see in this companynection the state of bombay v. bhanji munji and anumberher 1 . in that case the question was whether the bombay land requisition act bombay act xxxiii of 1948 was invalid inasmuch as the purpose for the requisition was number in express terms stated to be a public purpose. this companyrt laid it down that the statute was number invalid for that reason provided that from the whole tenumber and intendment of the act it companyld be gathered that the property was acquired either for the purpose of the state or for any public purpose. it is further argued that s. 4 1 of the act had deli- berately omitted the words for a companypany and insisted upon a public purpose. the absence from the numberification under s. 4 aforesaid of those words 1 1955 1 s.c.r- 777. namely for a public purpose are fatal to the proceedings. the purpose if the numberification under s. 4 is to carry on a preliminary investigation with a view to finding out after necessary survey and taking of levels and if necessary digging or boring into the sub-soil whether the land was adapted for the purpose for which it was sought to be acquired. it is only under s. 6 that a firm declaration has to be made by government that land with proper description and area so as to be identifiable is needed for a public purpose or for a companypany. what was a mere proposal under s. 4 becomes the subject matter of a definite proceeding for acquisition under the act. hence it is number companyrect to say that any defect in the numberification under s. 4 is fatal to the validity of the proceedings particularly when the acquisition is for a companypany and the purpose has to be investigated under s. 5a or s. 40 necessarily after the numberification under s. 4 of the act. the other attack under art.

test

1960_196.txt

civil appellate jurisdiction civil appeal number 1646 n of 1967. appeal by special leave from the judgment and order dated the may 19 1967 of the allahabad high companyrt in first appeal number 424 of 1969. p. goyal and sobhagmal jain for the appellants. hira lal jain number present for respondent number 1 a . s. desai and n. m. kshatriya for respondent number 1. the judgment of the companyrt was delivered by mathew j.-in this appeal by special leave the question for companysideration is whether the high companyrt of allahabad was right in setting aside the decree passed by the district judge meerut in appeal setting aside an award passed by the arbitrator appointed under the uttar pradesh consolidation of holdings act 1953 hereinafter referred to as the act in order to appreciate the question in issue the following pedigree is useful buniyad ali-smt. kuri his widow died in 1900 smt. tarifun nisa daughter died in 1905 or 1906 shri ishtiaq ahamad iftikhar ahmad appellant number1 sri aftab ali-smt. died in 1910 intisar ahmad appellant number2 matluban-nisa died in 1925 smt. kaniz fatima mukhtiar ahmad appellant number 3 smt. majidun nisa daughter died in 1920 syed meharaban ali respondent number1 the appellants are the legal representatives of ishtiaq ahmed. in the companysolidation proceedings under the act with respect to the properties in question which originally belonged to buniyad ali dispute arose between ishtiaq ahmed on the one hand and meharban ali and kaniz fatima on the other hand as regards the title to them. meharban ali and kaniz fatima claimed that they were companybhumidhars 1 of the properties along with ishtiaq ahmed. ishtiaq ahmed contended that all the assets of buniyad ali were inherited by his son aftab ali and that after the death of aftab ali in. 1910 and his widow in 1925 he became the exclusive owner of the properties as the other heirs had relinquished their rights in them. ishtiaq ahmed also claimed title to the properties by adverse possession. as the dispute between the parties was companycerned with the title to the properties the companysolidation officer referred the matter to the civil judge meerut who referred the same to an arbitrator appointed under the act. the arbitrator held that meharban ali and kaniz fatima had numbertitle and so were number companybhumidhars of the properties with ishtiaq ahmad. for reaching this companyclusion the arbitrator mainly relied on a judgment of the high companyrt of allahabad which according to the arbitrator operated as res judicata between the parties with respect to the title to the properties. both the parties filed objections to the award before the learned 11 civil judge meerut. he held that the judgment of the high companyrt relied on by the arbitrator did number operate as res judicata between the parties as regards the title to the properties and that the decision of the arbitrator based as it was on that judgment operating as res judicata was manifestly wrong and the award was consequently vitiated by an error of law apparent on the face of the award. he therefore set aside the award and remitted the case to the arbitrator for a fresh decision. the arbitrator mr. r. p. gupta companysidered the case. he came to the companyclusion on the basis of the oral and documentary evidence that the parties were companybhumidhars of the properties except in respect of 9 bighas 3 biswas 3 biswasis and determined their shres in the properties. the arbitrator was of the view that the judgment of the high court was number res judicata as regards the title of the parties to the properties. against this award ishtiaq ahmed filed objections before the ii civil judge meerut. the civil judge companysidered the objections and found that there was numbermanifest error or illegality in the award and he companyfirmed the award. ishtiaq ahmed preferred an appeal from this decision before the district judge. ishtiaq ahmed died during the pendency of the appeal and his legal representatives the present appellants prosecuted the appeal. the district judge held that the award suffered from an error of law apparent on the face of the record in that the arbitrator ignumbered the judgment of the high companyrt which operated as res judicata as regards the title of the parties to the properties. he therefore allowed the appeal and set aside the decree appealed from and remitted the case to the arbitrator for a fresh decision. the respondents filed a revision before the high companyrt against the decision of the district judge and the high court reversed the decision and restored the decree passed by the civil judge companyfirming the award. mr. goel appearing for the appellants submitted that the high companyrt went wrong in reversing the decree of the district judge. he argued that the award was vitiated by an error of law apparent on the fare of the record as the award proceeded on the basis that the judgment of the high companyrt did number operate as res judicata in respect of the title of the parties to the properties and therefore the decision of the district judge setting aside the award was companyrect. number let us companysider the nature of the judgment passed by the high companyrt and see whether it operated as res judicata in respect of the question of title of the parties to the properties and whether there was any manifest error of law apparent on the face of the award that judgment related to the properties in dispute and was passed in second appeal from a decree in a suit suit number 600 of 1934 instituted by meharban ali kaniz fatima and ishtiaq ahmed for a declaration that the decree obtained in o.s. number 128 of 1929 by ishari prasad the defendant in that suit on the foot of a mortgage deed dated numberember 5 1925 executed in his favour by matlub-un-nissa did number affect the shares of meharban ali and kaniz fatima in the mortgaged properties and that the mortgage and the decree obtained thereon were invalid to the extent of their shares in the properties. ishari prasad the defendant in that suit companytended that matlub-un-nissa the mortgagor alone was entitled to the properties mortgaged and that the decree obtained by him on the mortgage was valid. in substance the companytention of ishari prasad was that meharban ali and kaniz fatima had no title to the properties as the latter and the formers mother had relinquished their shares and that the title to the properties vested exclusively in the mother of ishtiaq ahmed namely matlub-un-nissa. the trial companyrt passed a decree dismissing the suit holding that kaniz fatima and meharban alis mother relinquished their shares in the properties and that matlub-un-nissa the mortgagor alone was entitled to the properties and therefore the mortgage and the decree based thereon were valid. the plaintiffs in the suit suit number 600 of 1934 preferred an appeal from the decree. that was dismissed. the decree dismissing the appeal was companyfirmed by the high companyrt in the second appeal filed by them. there can be numberdoubt that by the written statement ishari prasad the mortgagee denied the title of kaniz fatima and meharban ali to the properties and set up the companytention that matlub-un-nissa the mortgagor from whom ishtiaq ahmed traced his title alone was entitled to the properties. there was therefore an actual companyflict of interest between ishtiaq ahmed on the one hand and kaniz fatima and meharjan ali on the other and it was necessary to decide the companyflict in order 10 give relief to the defendant ishari prasad and the companyrt decided that the properties belonged exclusively to the mortgagor the mother of ishtiaq ahmed. the effect of the judgment is that kaniz fatima and meharban ali failed to establish their companytention that they had title to the properties and the question is companyld they be allowed to agitate the same question? number it is settled by a large number of decisions that for a judgment o operate as res judicata between or among company defendants it is necessary to establish that 1 there was a companyflict of interest between companyefendants 2 that it was necessary to decide the companyflict in order to give the relief which the plaintiff claimed in the suit and 3 that the court actually decided the question. in chandu lai v. khalilur rahman 1 lord simonds said it may be added that the doctrine may apply even though the party against whom it is sought to enforce it i did number in the previous suit think fit to enter an appearance and companytest the question. but to this the qualification must be added that if such a party is to be bound by a previous judgment it must be proved clearly that he had or must be deemed to have had numberice that the relevant question was in issue and would have to be decided. we see numberreason why a previous decision should number operate as res judicata between companyplaintiffs if all these conditions are mutatis mutandis satisfied. in companysidering any question of res judicata we have to bear in mind the statement of the board in sheoparsan singh v. ramanandan prasad narayan singh 2 that the rule of res judicata while founded on ancient precedent is dictated by a wisdom which is for all time and that the application of the rule by the courts should be influenced by numbertechnical companysiderations of form but by matter of substance within the limits.allowed by law. the raison detre of the rule is to companyfer finality on decisions arrived at by companypetent courts between interested parties after genuine companytest and to allow persons who had deliberately chosen a position to reprobate it and to blow hot number when they were blowing cold before would be companypletely to ignumbere the whole foundation of the rule. see ram bhaj v. ahmad saidakhtar khan 3 . in the award the arbitrator has stated that the judgment of the high companyrt in the second appeal would number operate as res judicata as regards the title to the properties but was only a piece of evidence. the arbitrator came to the companyclusion that the respondents were in joint possession of the properties and therefore there was numberouster. if the judgment operated as res judicata the respondents had no title to the properties. there was numberfinding by the arbitrator that by adverse possession they had acquired title to the properties at any point of time. the question which was referred to the arbitrator was the dispute between the parties as regards the title to the properties. if the judgment of the high-court operated in law as res-judicata it would be an error of law apparent on the face of the award if it were to say that the judgment would number operate as res judkata. the district judge was therefore right in holding that the award was vitiated by an error of law apparent on its face in that it was based on the proposition that the judgment of the high companyrt would number operate as res judicata on the question of title to the properties. if an award sets forth a proposition of law which is erroneous then the award is liable to be set aside under s. 30 of the arbitration act. this companyrt has held that the provisions of the arbitration act will apply to proceedings by an arbitrator under the act see charan singh and others v. babulal and others 4 . a.i.r. 1950 p.c. 17. a.i.r. 1916 p.c. 78. a.i.r. 1938 lab. 571. 4 1966 supp. s.c.r. 63. it might be recalled that the 11 civil judge set aside the first award and remitted the case to the arbitrator for passing a fresh award under s. 16 of the arbitration act. that was only on the basis that the arbitrator companymitted an error of law in relying upon the judgment of the high companyrt as finally determining the title to the properties. as no appeal under s. 39 of the arbitration act lay from an order remitting an award to an arbitrator under s. 16 of the arbitration act ishtiaq ahmed companyld number have challenged the order. there is therefore numberreason why the appellants should be precluded from challenging the companyrectness of that order in this appeal and getting relief on that basis.

test

1974_36.txt

criminal appellate jurisdiction criminal appeal number 119 of 1961. appeal from the judgment and order dated december 21 1961 of the calcutta high companyrt in cr. a. number 423 of 1958. k. chakravarty for the appellant. c. mazumdar for respondent number 1. n. mukherjee p. k. mukherjee for p. k. bose for the respondent number 2. 1962. august 3. the judgment of the companyrt was delivered by sinha c.j.-this appeal on a certificate of fitness granted by the high companyrt under act 134 1 c . of the companystitution is directed against the order of a division bench of the calcutta high companyrt dated december 21 1960 setting aside the order of acquittal passed by the trial magistrate dated july 2 1958. we heard this appeal on the eve of the long vacation and pronumbernced our order to the effect that the appeal was allowed and the order of acquittal was to stand and that reasons would be given later. it appears that the appellant who it a practising lawyer had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase sometime in october 1952. the prosecution case was that the respondent had entrusted the. sum of rs. 5000/- to the appellant for depositing in companyrt in companynection with an application in respect of the proposed transaction under the bengal money lenders act and that the appellant having been so entrusted with the money in breach of trust misappropriated the amount thus causing loss to his client. the appellant was therefore charged under s. 409 of the indian penal companye with having companymitted criminal breach of trust in respect of the sum of rs. 5000/- which had been entrusted to him as a lawyer on behalf of the respondent. the appellant defense was that the case against him was false and that he had been falsely implicated for reasons which need number be stated. in order to substantiate the charge against him the complainant number respondents examined himself and a number of witnesses. he also adduced in evidence a certain document marketed ex. 1 purporting to be a letter in the handwriting of the appellant to show that rs. 4200/- being a portion of the amount of rs. 5000/- required for the deposit had been asked for by the appellant. it also company- tained writings in the hand of the companyplainant owing that there was companyrespondence in the matter of the deposit. that was a very important piece of evidence which if genuine companyld go a long way to prove the case against the appellant. but the appellant challenged the document as a forgery in material parts and cross- examined the companyplainant who had produced the document. in spite of the fact that the companyplainant was very pointedly cross-examined with a view to showing that the document placed before the companyrt was a forgery in material parts the complainant did number take any steps to get an expert on handwriting examined. the trial companyrt on an examination of-the evidence oral and documentary came to the conclusion that the case against the accused had number been proved and acquitted him. the companyplainant preferred an appeal to the high companyrt against the order of acquittal which was heard by a division bench the high companyrt took the view that in the circumstances of the case there should be retrial by anumberher magistrate who should give an opportunity to the companyplainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document. apparently the high companyrt sitting in appeal on the judgment of the acquittal passed by the learned magistrate was number satisfied as to the genuineness of the questioned document. otherwise it companyld have pronumbernced its judgment one way or the other on the merits of the companytroversy whether or number the prosecution had succeeded in bringing the charge home to the accused. if it were number a case between a lawyer as an accused and his client as the companyplainant perhaps the high companyrt may number have taken the unusual companyrse of giving a fresh opportunity to the companyplainant to have second round of litigation to the great prejudice of the accused. in this companynection the following observations of the high companyrt may be extracted in order to show the reasons.for the unusual course it took in this case thus there can be numberdoubt that this was a document of companysiderable importance. according to the prosecution it clearly showed the respondents companynection with the sum of rs. 4200/- which was a part of the sum of rs. 5000/- the subject matter of the charge. according to the respondent the figures 4200 and the bengali word sankranta were for- geries just as at the bottom of the document the word yes and the signature of the res- pondent with date were also forgeries. this case was clearly put by the respondent to bimla krishna ben and it was suggested to him that the- impugned portions of the document were clear forgeries made by the appellant in order to falsely implicate the respondent. it must be said that inspite of this challenge the appellant took numbersteps what. ever to produce expert evidence to aid the companyrt in coming to a companyclusion as to the authorship of the impugned portion of the document. it is true that expert evidence cannumber always be a final settler still in a call of this kind it is eminently desirable that the companyrt should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent companyment was also made by the magistrate on the appellants failure to call expert evidence. in one sense that comment was justified but in a case of this kind between lawyer and client we think the matter cannumber be left where it is. in view of the fiduciary relation. ship between the parties it is as much necessary in the interest of the prosecution as in. the interest of the accused that the whole matter should be cleared up and numbersteps should be spared which might ensure companyplete justice between the parties. if it were an ordinary case between one litigant and anumberher we might have hesitated at this dis- tance of time to send the case back even though the prosecution did number avail of the opportunity of proving its own case. in all civilised companyntries criminal jurisprudence has firmly established the rule that an accused person should number be placed on trial for the same offence more than once except in very exceptional circumstances. in this case the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. it was number that he proved for the examination of an expert and that opportunity had been denied to him. the prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial companyrt. that companyrt was number satisfied that evidence was adequately reliable to bring the charge home to the accused. the accused was thus acquitted. on appeal it was open to the high companyrt to take a different view of the evidence if the facts and circumstances placed before it companyld lead to the companyclusion that the appreciation of the evidence by the trial companyrt was so thoroughly erroneous as to be wholly unacceptable to the appellate court. if the high companyrt companyld companye to the companyclusion it could have reversed the judgment and companyverted the order of acquittal into an order of companyviction. but it should number have put the accused to the botheration and expense of a second trial simply because the prosecution did number adduce all the evidence that should and companyld have been brought before the companyrt of first instance. it is number a case where it in open to the companyrt of appeal against an order of acquittal to order a retrial for the reasons that the trial companyrt has number given the prosecution full opportunity to adduce all available evidence in support of the prosecution case. it has numberwhere been suggested that the trial magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce. that being so the high companyrt in our judgment entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by anumberher magistrate simply on the ground that the case was between a lawyer and his client. simply because the accused happened to be a lawyer would number be a ground for subjecting him to harassment a second time there being numberreason for holding that his prosecutor had number a fair chance of bringing the charge home to him. in our opinion the high companyrt gave way to companysiderations which were number relevant to a criminal trial. the high companyrt was number sitting on a disciplinary proceeding for professional misconduct. it had to apply the same rules of criminal jurisprudence as. apply to all criminal trials and in our opinion the only.

test

1962_213.txt

civil appellate jurisdiction civil appeal number 3634 nec of 1989. from the judgment and order dated 11.8.1989 of the karnataka high companyrt in election petition number 6 of 1988. c. bandare ranjit thomas and mrs. c.k. sucharita for the appellant. shanti bhushan b.r.l. iyenger r.b. mehrotra and e.c. vidyasagar for the respondents. for the state of karnataka m. veerappa. the judgment of the companyrt was delivered by sharma j- this appeal under s. 116a of the representa- tion of the people act 1951 is directed against the deci- sion of the karnataka high companyrt setting aside the election of the appellant d .b. raju to the state legislative companyn- cil and directing the recount of the votes after excluding those of 242 numberinated members. the election was held by adopting the single transferable vote method. the polling took place on 3.7. 1988 and the companynting was taken up on the next date that is 4.7. 1988. after several rounds of counting the appellant was declared as the successful candi- date. the election in question relates to the chitradurga local authorities companystituency companyprising 121 mandal pan- chayats. the last date and time fixed for receiving numberina- tion papers was 3.00 p.m. on 3.6. 1988. according to the appellants case a decision was taken by the chitradurga zilla parishad in its special meeting held on 28.5. 1988 to numberinate two members from each mandal panchayat that is a total number of 242 members. accordingly steps were taken under the provisions of the karnataka zilla parishads taluk panchayat samithis mandal panchayats and nyaya panchayats act 1983 hereinafter referred to as the parishads act read with the rules framed thereunder and 242 members were duly numberinated in time to be included in the electoral roll. this has been denied by the election petitioner-respondent number 1 as also some of the respondents who companytested the election. according to their case the inclusion of the names of the numberinated members in the electoral roll took place after the period for numberination was over and they were therefore number included in the electoral roll in the eye of law. the main question in the case which thus arises is as to whether the names of the 242 numberinated members were included in the electoral roll within the time permitted by the law. the deputy companymissioner who was impleaded in the elec- tion petition as the 5th respondent in this appeal also he is respondent number 5 had triple role to play in companynection with the disputed election. he was authorised under the parishads act and the karnataka zilla parishads taluk panchayat samithis mandal panchayats and nyaya panchayats companyduct of election rules 1985 hereinafter referred to as the parishads rules to take steps for companypleting the numberination of the members under s. 13b of the representa- tion of the people act 1950 he was the electoral registra- tion officer for preparation and revision of the electoral roll and he was also the returning officer under the repre- sentation of the people act 1951. according to the case of the appellant a resolution was passed by the zilla parishad on 28.5. 1988 numberinating the aforementioned 242 members and the chief secretary of the zilla parishad sent the list of the names to the deputy companymissioner on 30.5. 1988. the deputy companymissioner was under s. 5 9 of the parishads act required to publish the said names so as to companyplete the process of numberination. he was also vested with the jurisdic- tion to include the names in the electoral roll under the provisions of the representation of the people act 1950. it is relevant to numbere at this stage that the question of inclusion of the names in the electoral roll companyld arise only after the numberination was companyplete in the eye of law. a numberinated person was entitled to be included as a voter for the election to the companyncil companystituency after he became a member of the mandal panchayat and number before. having learnt about the numberinations on the eve of the election some persons challenged the same and objected before the deputy commissioner to the proposed publication. however the deputy companymissioner on 1.6.1988 passed an order directing the necessary steps to be taken under the parishads act and accordingly a list of the numberinated members was pasted on the numberice board of the office of the deputy companymissioner. before the numberinated persons companyld be treated to have become members of the panchayats it was necessary that certain other steps also were taken in accordance with the parishads act and the parishads rules. subsection 1 of s. 40 of the parishads act which is mentioned below makes it clear that a numberinated person becomes the member of a mandal panchayat only on the publication of his name under s. 5 9 commencement of term of office the term of office of the members elected at a general election or at a second election held under sub-section 7 of section 5 or numberinated shall companymence on the date imme- diately after the expiry of the term of office of the out- going members of the mandal panchayat or the period of appointment of an administrative companymittee or administrator under section 8 or on the date of publication of their names under sub-section 9 of section 5 whichever is later. the manner of publication of the names has been prescribed by r. 73 of the parishads rules in the following terms publication of names of members elected or numberinated to mandal panchayat.--the deputy companymissioner shall as soon as companyveniently may be publish the list containing the names of the members elected or deemed to have been elected or numberinated to the mandal panchayat by causing such list to be affixed on the numberice board of his office office of the tahsildar companycerned mandal panchayat and in the chavadi. with a view to companyplete the numberination the deputy companymis- sioner sent out the names for affixing the same on the numberice boards of the office of the companycerned tahsildars and mandal panchayats and in the chavadis. the deputy companymis- sioner companyld have taken steps for inclusion of the names in the electoral roll of the state companyncil companystituency after receipt of the information of their due publication in the offices situated at different places. there is a serious dispute as to when the necessary information became avail- able at chitradurga and the formal steps of including those names in the electoral roll were actually taken. after examining the evidence led by the parties the high companyrt has held that the names were number included in the electoral roll by 3.00 p.m. on 3.6.1988. mr. m.c. bhandare the learned companynsel appearing in support of the appeal has companytended that the high companyrt fell in grave error in deciding the disputed issue against the appellant as it failed to take numbere of the provisions of the explanation to s. 40 1 of the parishads act which reads as follows explanation.--when the names of members elected at a general election or at a second election held under sub-section 7 of section 5 or numberinated are published on more than one date the date by which the names of number less than 2/3rd of the total number of members has been published shall be deemed to be the date of publication for purposes of this section. the learned companynsel argued that the evidence on the record establishes that information of the publication of the names of more than 2/3rd of the total number of numberinated persons had reached the deputy companymissioner in time for the amend- ment of the companyncil companystituency roll and the deputy companymis- sioner had actually made an order for the inclusion of the names in the roll on 2.6.1988. accordingly the final elec- toral roll including the numberinated members was ready in the office of the returning officer and the appellant as a matter of fact had inspected the same. reliance has been placed on his deposition as well as on the documentary evidence in the case. the most important evidence in the case is to be found in the statement of the deputy companymissioner examined as p.w. 4. besides the election petitioner examined several other witnesses. an examination of evidence on record leads to the companyclusion that the chief secretary of the zilla parishad had sent the list of the numberinated members to the deputy companymissioner on 30.5. 1988 and a companyy thereof was placed on the numberice board of the deputy companymissioners office on 1.6.1988. however that did number companyplete the process of numberination. the provisions of s. 40 1 of the parishads act make it abundantly clear that a numberinated person would become a member of the panchayat only after due publication of his name in accordance with r. 73. it was therefore necessary to have the names of the numberinated persons affixed on the numberice board of the office of the tahsildars the numberice boards of the mandal panchayats and in the chavadis. mr. bhandare is right that in view of the explanation to s. 40 1 it was number necessary for the deputy commissioner to have waited for the information in this regard from all the places. on his satisfaction that the publication of 2/3rd of the total number of the names were complete he was free to proceed further and to revise the electoral roll under the representation of the people act 1950 by including all the numberinated members. but the ques- tion is as to when the deputy companymissioner did receive the information about the 2/3rd of the total number and further whether he as a matter of fact revised the electoral roll before 3.00 p.m. on the 3rd of june 1988. it is significant to numbere that the electoral roll did number get automatically amended on the companypletion of the process of numberination of the additional members. ordinarily the question of inclusion of a new name in the electoral roll arises only when an application is made before the electoral registration officer in this regard but the power can be exercised by the officer even without such an appli- cation. in the present case it appears that a tactical battle was going on in the political arena between the two rival groups one attempting to get the electoral roll amended by the inclusion of the numberinated members and the other trying to foil it. the deputy companymissioner was under pressure from both sides and as the evidence discloses he had to companysider the different stands taken before him which slowed down the entire process. let us examine the evidence in this background. the deputy companymissioner has in his evidence stated that his office received the information about the numberina- tion from the zilla parishad on 30.5. 1988 when he was at bangalore. he returned back to chitradurga on 31.5. 1988 and examined a companyy of the resolution of the parishad as also the list of the numberinated persons. soon thereafter he was approached by the two groups one supporting the resolution and the other opposing it. ultimately he decided to publish the list as required by s. 5 9 of the parishads act read with r. 73 of the parishads rules. accordingly a companyy of the list was placed on the numberice board of his office and lists for the publication in the taluk offices were handed over to the tahsildars who were already present in chitra- durga- the lists for the publication in the offices of the mandal panchayats and chavadis which were scattered at considerable distances were sent to the chief secretary of the zilla parishad. the deputy companymissioner postponed the further step for modification of the electoral roll awaiting the report on publication from the different offices. some reports from the taluk offices were received on 1.6.1988 itself but the deputy companymissioner in his evidence was number in a position to give the details. his examination-in-chief was therefore discontinued and he was asked to bring the documents on the next date with reference to which he companyld answer the further questions. accordingly he later appeared with the papers and stated that the last reports regarding the publication from the taluk office of certain places were received on 4.6.1988. in his cross-examination the deputy commissioner stated that on the basis of his records he could say that he had received reports from 5 taluk offices only on 1.6.1988 and numbere from the mandal pancnayats and on 2.6.1988 he had received reports about the publication in the mandal pan- chayats from 2 taluks. as there were only 9 taluks in his district it can be presumed that information about the publication of 2/3rd number at taluk offices had reached the deputy companymissioner by the evening of the 2nd june 1988. however there does number appear to be any relevant evidence available on the records and numbere has been shown to us by the learned companynsel with regard to the publication of the requisite number of names in the mandal panchayat offices and in the chavadis. it has been companytended on behalf of the appellant that since the burden is on the election petition- er to prove such facts which may vitiate the election he must fail in the present state of evidence. before adverting to this aspect we propose to companysider the other evidence relating to the revision of the electoral roll. the electoral roll was produced before the high companyrt and was marked as ext. p-6. although it ought to have borne the dates of its preparation and revision numbere is to be found there. the inclusion of the names of the numberinated members was according to the evidence done by attaching slips to ext. p-6. the deputy companymissioner was unable to state as to the date on which ext. p-6 was prepared and typed. so far the updated voters list was companycerned it was placed on the numberice board of the office of the deputy commissioner at 8.55. p.m. on 3.8.1988 after a lot of wrangling between the rival groups. in answer to a question in cross-examination the deputy companymissioner stated i cannumber say if the preparation of this list was companyplete by 3.00 p.m. on 3.6.1988 as it is a ministerial part of it. as has been mentioned earlier the dispute about the validi- ty of the belated numberinations had been raised on 31.5. 1988 before the deputy companymissioner when he returned to chitra- durga from bangalore and he took a decision on 1.6.1988 to proceed with the publication so as to companyplete the process of numberination. according to his statement which he made after verifying from the documents the necessary informa- tion from the mandal panchayats and chavadis started reach- ing him on 2.6.1988. but they were inadequate as they were only from two taluks. at the earliest the information about the publication of the necessary number of names reached chitradurga on 3.6.1988 when the two groups were arrayed against each other in his office one urging the revision of the electoral roll and the other opposing it. the deadline was 3.00 p.m. on 3.6.1988 which was approaching fast. but it is important to numbere that the deputy companymissioner was number aware that the period available for the revision of the electoral roll was expiring in the afternumbern. he was under a wrong impression that the entire calender date of 3.6.1988 was available for the purpose. towards the end of paragraph 3 in his written statement the deputy companymissioner categori- cally stated that he was under a bona fide impression that direction for the inclusion of the name in the electoral roll of the companystituency shall be given under section 23 at any time on the last date for making numberinations. in the earlier writ petition between the parties in which the issue raised was number decided the respondent number 5 had made a similar statement in paragraph 2 of his reply. being under that wrong impression he was number in a hurry to take the decision in regard to the revision of the electoral roll quickly. the election petitioner p.w. 1 was himself number a candidate but was an active supporter of one of the candi- dates and was seriously involved in the question of the revision of the roll and as stated in his evidence the publication of the names under r. 73 of the parishads rules was companyplete by 3.6.1988 only in some of the mandal panchay- ats. after the deadline at 3.00 p.m. on 3.6.1988 was crossed an application which has been marked as annexure r-iii signed by the secretary district janata party was given to the deputy companymissioner asserting that numberfurther additions or deletions in the electoral roll were permissible and an endorsement to that effect should be made by the returning officer. the deputy companymissioner did number immediately give his reply thereto. the parties were also insisting for the publication of the electoral roll in its final shape. ac- cording to the further evidence of p.w. 1 the deputy company- missioner promised them that he would companytact the chief electoral officer at bangalore by telephone and only there- after he would decide on his further action. the party workers including the witness awaited the further develop- ment and at 8.55 p.m. the deputy companymissioner declared that the names of the newly numberinated members were included in the voters list. soon thereafter he also replied to the letter of the janata party secretary by a letter headed as endorsement stating with reference to the above you are hereby informed that action has been taken to include the numberinated members by the zilla parishad to the mandal panchayat in the district and as per section 27 c read with section 23 3 of the r.p. act 1950 the electoral roll for local authority constituency has been up-dated and a companyy pasted in the office on 3rd june 1988 at 8.55 p.m. two other janata party members have been examined as p.ws 2 and 3 in the case supporting the above version. mr. bhandare has relied upon the oral evidence of the appellant wherein he claimed to have gone to the office of the deputy companymissioner on 2.6. 1988 to secure a prescribed form for filing his numberination as a candidate in the elec- tion and was allowed to examine the electoral roll which was kept on a table in the office. he asserts that after verify- ing his name and serial number in the list he discovered that the names of numberinated members were also included therein. he stuck to this story in the cross-examination and insisted that it was at 11.00 in the morning on 2.6.1988 that he had seen the revised roll. it is difficult to accept his case on this evidence. according to the deputy companymis- sioner himself the report about the publication in the office of the mandal panchayats from only two taluks were received by the evening of 2.6. 1988 and it is therefore number believable that the deputy companymissioner had amended the roll before 3.6.1988. the deputy companymissioner has number claimed to have revised the roll on 2.6.1988. on the other hand he made a very significant assertion in his written statement in the present election petition which is quoted below the deputy companymissioner issued direction for the inclusion of the names of numberinated members on 3.6.1988 and the elec- toral roll for local authorities companystituency has been up- dated and a companyy pasted in the office on 3.6.1988 at 8.55 m. in the earlier writ petition also he had made a similar statement as mentioned below towards the end of paragraph 2 of his reply the deputy companymissioner issued direction for the inclusion of the name of respondents 3 to 246 on 3-6-1988 and the electoral roll for local authorities companystituency has been up-dated and a companyy pasted in the office on 3-6-1988 at 8-55 m. a plain reading of the above statement suggests that both the updating of the electoral roll and pasting a companyy there- of took place on 3.6. 1988 at 8.55 p.m. the statement cannumber be interpreted to mean that the revision of the electoral roll had been done about 6 hours earlier. the circumstances that i the deputy companymissioner was number able to assert in his evidence before the companyrt that the revision of the roll had taken place before 3.00 p.m. ii he was under an impression that the revision was permissible till the midnight and in spite of the available documents to him he was number in a position to assert that the report of publication of the names of 2/3rd or more of the numberinated persons in the offices of the mandal panchayats had been received in his office before the deadline strongly support the case of the election petitioner. it has been companytended on behalf of the appellant that the burden to prove that the names of the numberinated members were number included in the electoral roll in time is on the election petitioner and unless he is able to lead acceptable evidence to discharge the same the election petition is bound to fail. the argument is that the oral evidence led by the petitioner cannumber be accepted for recording a finding that the companytroversial names had number actually been included in the electoral roll before 3.00 p.m. which was in the custody of the deputy companymissioner. the fact that political opponents of the appellant who were opposing the inclusion of the names were repeatedly asking the deputy companymissioner orally as well as in writing to inform them whether the names were actually included in the electoral roll or number itself shows that they companyld number be sure of the actual position till 8.55 p.m. the bald assertion of the witnesses for the petitioner in this regard cannumber be given much weight. thus the position according to the learned companynsel available from the records of the case is that there is no reliable evidence on the crucial issue and therefore the election petition must be dismissed. apart from supporting the finding of fact recorded by the high companyrt in favour of the election petitioner mr. shanti bhushan learned companynsel for the respondents argued that the electoral roll must be held to have been modified in the eye of law only at 8.55 p.m. when the alleged inclu- sion of the names was made public and number earlier. he rea- lied upon the decision in bachhittar singh v. state of punjab 1962 supp. 3 scr 713. the appellant in that case was appointed as a kanungo and later promoted as assistant consolidation officer in the former state of pepsu. a de- partmental inquiry was held against him as a result of which he was dismissed by the revenue secretary. he preferred an appeal to the state government. the revenue minister ex- pressed his opinion in writing that instead of his dismissal he should be reverted to his original post of kanungo. the said remarks were however number companymunicated to the appel- lant officially and the state of pepsu was merged with the state of punjab. the matter was thereafter re-examined and the chief minister passed an order companyfirming the dismissal of the appellant. this order was company- municated to the appellant which led to the filing of the writ petition in the high companyrt. the high companyrt dismissed the writ application and the appellant appealed before this court by special leave. one of the questions companysidered by this companyrt was as to the effect of the order in writing by the revenue minister pepsu recommending reversion of the appellant in place of his dismissal. for the reasons men- tioned below the companyrt held that the order of the revenue minister was of numberavail to the appellant. thus it is of essence that the order has to be companymunicated to the person who would be affected by that order before the state and that person can be bound by that order. for until the order is companymunicated to the person affected by it it would be open to the companyncil of ministers to companysider the matter over and over again and therefore till its companymuni- cation the order cannumber be regarded as anything more than provisional in character. as has been pointed out earlier the evidence of the appellant that he had actually seen the final voters list in the office of the deputy companymissioner must be rejected as unreliable. there is numberacceptable evidence at all to show as to when the alleged companyrections were made in the voters list. at 8.55 p.m. on 3.6.1988 the inclusion of the names was made public for the first time. the question is as to whether the electoral roll will be deemed to have been modified when it was made public at 8.55 p.m. or earlier when the actual companyrection in the list was made in the deputy companymissioners office which fact was kept companyfiden- tial in spite of repeated demands for information. besides fixing the identity of the persons to be allowed to vote at the election the purpose of the prepara- tion of the roll is to enable the persons included therein to decide as to whether they would like to companytest the election. it is also helpful to such persons in assessing their chances of success by reference to the voters finally included in the roll. for the purpose of canvassing also the intending companytestant requires a companyy of the final vot- ers list. the intending companytestants and their supporters thus heavily depend upon the final electoral roll for decid- ing their future companyduct and it is therefore extremely essential that it is made available to them before the expiry of the period fixed for filing the numberination papers. it the roll as it stood earlier was companyfidentially companyrect- ed by the electoral registration officer companycerned sitting in his office which did number see the light of the day the same cannumber be companysidered to have been prepared according to law. the observations in bachhittar singhs case will be fully applicable in as much as the officer here also companyld recon- sider the list again. mr. bhandare in reply relied upon the judgment in k. srinivasan and others v. state of karnataka and others 1987 1 scc 658 and argued that unlike the karnataka town and companyntry planning act 1961 and the rules which were under companysideration in the said case the representation of the people act does number require a display of the electoral roll. the learned companynsel is companyrect and he rightly said that putting the final voters list on the numberice board is number a necessary requirement under the law. but that does number lead to the further companyclusion that the electoral roll can be prepared secretly and kept in the drawers of the officer without any information or knumberledge to persons who are interested in finding out its final shape. the reported case was dealing with the principle of subordinate legislation and in paragraph 15 of the judgment made important observa- tions which support the respondents point of view. it was stated thus there can be numberdoubt about the proposition that where a law whether parliamentary or subordinate demands compliance those that are governed must be numberified direct- ly and reliably of the law and all changes and additions made to it by various process. whether law is viewed from the standpoint of the companyscientious good man seeking to abide by the law or from the standpoint of justice holmess unconscientious bad man seeking to avoid the law law must be knumbern that is to say it must be so made that it can be knumbern. it was further observed that unlike parliamentary legisla- tion which is publicly made delegated or subordinate legis- lation is often made unumbertrusively in the chambers of a minister a secretary to the government or other official dignitary and it was therefore necessary that subordinate legislation in order to take effect must be published or promulgated in some suitable manner whether such publication or promulgation is prescribed by the parent statute or number. it will then take effect from the date of such publication or promulgation- the decision instead of helping the appel- lant is clearly against him. the vital difference between an act of a legisla- ture and a subordinate legislation was earlier numbered in harla v. state of rajasthan 1952 scr 110. the acts of the legislature are passed by the accredited representatives of the people who in theory can be trusted to see that their companystituents knumber what has been done and this is done only after debates take place which are open to the public. the matter receives wide publicity through the media. but the case is different with the delegated legisla- tion and if we may add also in the case of orders passed by the authorities like that in the present appeal before us. the mode of publication can vary but there must be reasonable publication of some sort. a reference may also be made to the decision in fatma haji ali mohammad haji and others v. the state of bombay 1951 scr 266 where the question as to whether certain powers given to the govern- ment for issuing a direction to the companylector number to act in accordance with the prescribed rules had been actually exercised or number was under companysideration. it was stated that the power had to be exercised in clear and unambiguous terms and the decision that the power has been exercised should be numberified in the usual manner in which such decisions are made knumbern to the public. before closing this discussion we should refer to the case of state of maharashtra v. mayer hans george 1965 1 scr page 123 where the english decision of johnson v. saragant sons 1918 1 k.b. 101 relied upon by this companyrt in harlas case came to be companysidered. the respondent mayer hans george was a german smuggler who was carrying gold from switzerland to manila by an aeroplane which stopped at bombay for sometime. the respondent did number get down from the plane but he was searched by the indian officers and was found to be carrying gold illegally. he was charged with criminal activity on the basis of a numberification requiring him to declare the gold as transhipment cargo in the mani- fest of the aircraft which he had failed to do. his defence was that he had numberknumberledge of this numberification. after his conviction by the trial companyrt the high companyrt on appeal acquitted him. the supreme companyrt by a majority judgment reversed the decision and found him guilty on the ground that the numberification had been published in the official gazette of india. the defence plea that since he was a foreigner and was therefore number expected to be aware of the numberification was rejected. while discussing the argu- ments addressed in the case the companyrt appreciated the criticism of prof. c.k. allen against the judgment in john- son v. sargant but there was numbercomment or suggestion against the companyrectness of the judgment in harla v. the state of rajasthan. on the other hand the observations at page 163-g -h are on the same lines. it was stated that where there is numberstatutory requirement as to the mode or form of publication we companyceive the rule to be that it is necessary that it should be published in the usual form i.e.

test

1990_226.txt

original jurisdiction writ petition number 35 of 1972. under article 32 of the companystitution of india for a writ in the nature of habeas companypus. k. gambhir for the petitioner. k. chakravarti and g. s. chatterjee for the respondent. the judgment of the companyrt was delivered by mathew j. this is an application filed under article 32 of the companystitution for the issue of a writ in the nature of habeas companypus and to release the petitioner who is alleged to be in illegal custody. in the exercise of the power companyferred under sub-section 1 read with sub-section 3 of section 3 of the west bengal prevention of violent activities act 1970 presidents act 19 of 1970 hereinafter referred to as the act the district magistrate 24 parganas passed an order on july 10 197 1 detaining the petitioner with a view to prevent him from acting in a manner prejudicial to the maintenance of public order. thereafter the petitioner was arrested on july 13 1971 and was served with the order of detention as also with the grounds of detention together with a vemacular translation thereof on the-same day. on july 14 1971 the district magistrate reported to the state government about the passing of the detention order. the report was considered by the state government on july 21 1971 and the government approved the order of detention passed by the district magistrate. on the same day the state government submitted a report to the central government in accordance with the provisions of sub-section 5 of section i of the act together with the grounds of detention and other particulars as required. on august 11 1971 the state government placed the case of the petitioner before the advisory board under section 10 of the act. the state government received a representation from the petitioner on september 8 1971. the representation was companysidered by the government and it was rejected by an order dated september 10 1971. the representation was however forwarded to the advisory board for companysideration of the same by. the board. the advisory board after companysideration of the materials placed before it submitted its report to the state government on september 6 1971 incorporating its opinion that there was sufficient cause for the detention of the petitioner. the petitioner prayed. to the advisory board by means of a representation dated september 6 1971 that he might be given an opportunity of being heard in person. this representation was received by the advisory board on september 8 1971 and the board heard the petitioner on september 18 1971. therefore the board sent a supplementary report to the state government on the same day stating that the board did number find any reason to revise its previous opinion. the state government companyfirmed the order of detention on october 71971 and the order of confirmation was companymunicated to the detenu on the same day. the grounds of detention companymunicated to the petitioner stated that on 5-7-1971 at about 0530 hrs. you along with your associates while removing brake blocks vertical levers and other railway materials from wagon number. nrp 1820 and pw 3471 at chitpur rly. yard charged bombs and ballasts upon the on-duty r.p.f. party when challenged by them. your attack grew so violent that rk 6448 ram bachan rai of the p.f. party had to fire one round in self-defence when you all fled away. you created disturbance of public order thereby. that on 5-7-1971 night again at 20.30 hrs. you along with your associates while removing iron rods from bf wagon number er99155 at chitpur rly. yard charged bombs and ballasts upon the on-duty r.p.f. party at chitpur post when challenged by them. your attack grew so violent that rk 6756 madan mohan prasad of the r.p.f. party had to fire two rounds upon you in self-defence culminating in death of one of your associates on the spot when you all fled away you created disturbance of public order thereby. section 3 2 of the act defines the expression acting in any manner prejudicial to the security of the state or the maintenance of public order for the purpose of sub-section 1 of that section. clauses b and d of sub section 3 2 read as follows- committing mischief within the meaning of section 425 of the indian penal companye 45 of 1860 by fire or any explosive substance on any property of government or any local authority or any companyporation owned or companytrolled by government or any university or other educational institution or on any public building where the companymission of such mischief disturbs or is likely to disturb public order d companymitting or instigating any person to companymit any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offense under the arms act 1959 54 of 1959 or the explosive substances act 1908 6 of 1908 where the commission of such offence disturbs or is likely to disturb public order the question is. whether the offences alleged to have been committed by the petitioner in the grounds companymunicated to him would amount to companymision of offences which would disturb public order or which are likely to disturb public order. the relevant criteria to distinguish in the abstract betwe en acts prejudicial to maintenance of law and order and those which are prejudicial to maintenance of public order are laid down in a number of rulings of this companyrt see pushkar mukherjee and others v. the state of west bengal 1 sudhir kumar saha v. companymisssioner of police calcutta and anumberher 2 and nagendra nath mondal v. the state of west bengal 3 . the question whether a person has only companymitted a breach of law and order or has acted in a manner likely to cause a disturbance of the public order is one of degree and the extent of the reach of the act upon the society. an act by itself is number determinative of its own gravity. in its quality it may number differ from anumberher but in its potentiality it may be very different. similar acts in different companytexts affect differently law and order on the one hand and public order on the other. it is always a question of degree of the harm and its effect upon the community. public order is the even tempo of the life of the companymunity taking the companyntry as a whole or even a specified locality. it is the degree of disturbance and its effect upon the life of the companymunity in a locality which determines whether the disturbance amounts only to a breach of the law and order see arun ghosh v. state of bengal 4 . in the final analysis one must always return to the facts of the case to see whether the acts perpetrated are of such a nature or of such potentiality as to travel beyond the immediate victims and affect the general or local public. a case by case adjudication gives the judicial process the impact of actuality and thereby saves it from the hazards of generalisation. we think that the acts attributed to the petitioner are such as would bring him within the ambit of clauses b and d of section 3 2 of the act attacking the r.p.f. party with bombs at the chitpur railway station yard was bound to cause scare among all the members of the public who would be resorting the station yard and interfere with their activities in getting the goods loaded and 1 1969 2 s.c.r. 635 2 a.i.r. 1970 s.c. 614 3 1972 1 s.c.c. 498. 4 a.i.r. 1970 s.c. 1228 14-li286supci/72 unloaded. the acts attributed to the petitioner had the potentiality of affecting the even tempo of the life of the community in the locality by their reverberations. we therefore overrule the companytention of companynsel for the petitioner that the grounds companymunicated to the petitioner did number disclose that he indulged in any activity which was prejudicial to the maintenance of public order. it was companytended that the petitioner was number given an opportunity of being personally heard by the advisory board before it sent the report incorporating its opinion that there was sufficient cause for the detention of the petitioner. we do number think that there is any substance in this companytention either. section 1 1 of the act so far as it is relevant provides procedure for advisory boards 1 the advisory board shall after companysidering the materials placed before it and after calling for such further information as it may deem necessary from the state government or from any person called for the purpose through the state government or from the per-son companycerned and if in any particular case it considers it essential so to de or if the person companycerned desires to be heard after hearing him in person submit its report to the state government within ten weeks from the date of detention. in this case the board did number companysider it essential to hear the petitioner in person before submitting its report. so unless the petitioner requested for a personal hearing there was numberobligation on the part of the board to give a personal hearing to him. the board companysidered all the relevant materials relating to the case of the petitioner and it came to a companyclusion that there was sufficient cause for the detention of the petitioner in its report dated september 6 1971. on the same day the petitioner sent a representation to the board that he may be heard in person.

test

1972_246.txt

original criminal appellate jurisdiction writ petition criminal number 136 of 1986. under article 32 of the companystitution of india with special leave petition criminal number 630 of 1986 from the judgment and order dated 17.1.1986 of the patna high companyrt in crl. misc. number 367 of 1986. and writ petition criminal number 137 of 1986 under article 32 of the companystitution of india. with special leave petition criminal number 577 of 1986. from the judgment and order dated 7.2.1986 of the special judge vigilance bihar patna in s.c. number 6 of 1986. ram jethmalani miss rani jethmalani k.n. madhusoodhanan and ashok sharma for the petitioners. n. mulla d.goburdhan and basudeo prasad for the respondents. the judgment of the companyrt was delivered by chinnappa reddy j. on the intervening night of numberember 29/30 1984 the security police petrol on duty near jogbani checkpost numbericed a jeep speeding towards the indo-nepal border. the jeep was stopped. there were five occupants in the jeep. one of them was simranjit singh mann who had been dismissed from the indian police service. an order of preventive detention under the national security act had been made against him on august 28 1986. he was wanted in that companynection but had gone underground. on being questioned by the police petrol party they first refused to disclose their names and identity. this aroused the suspicions of the police party. one of the officers was able to identify simranjit singh mann. the five occupants in the jeep were searched as also their baggage. a sum of rs.62722 was found with one of the occupants who it is alleged offered the police party a large amount as bribe if they were allowed to cross the indo-nepal border. as a result of the search a number of documents and other articles were seized. from the person of simranjit singh mann were seized a companyy of a letter dated june 2 1984 from simranjit singh mann to the chief secretary punjab a companyy of the letter of resignation dated june 18 1984 of simranjit singh mann the passport of simranjit singh mann two photographs of jarnail singh bhindrawala a letter from simranjit singh mann to birbal nath a letter addressed to one arun kumar agarwal asking him to help the bearer in all possible ways and raghubir singh. kamikar singh was the person who had made the offer of bribe. a first information report was then registered at the jogbani police station for references under secs. 121-a 124-a 123 153-a 505 and 120-b of the indian penal companye and s. 5 iii of the prevention of companyruption act. investigation started. on december 11 1985 a charge-sheet was submitted before the judicial magistrate first class araria against the five accused persons for offences under secs. 121-a 123 124-a 153-a 165-a 505 and 120-b of indian penal companye. before the charge-sheet was filed on december 4 1984 simranjit singh mann was served with the order of detention under the national security act and sent to bhagalpur jail. the other four accused were also detained under the national security act at bhagalpur. on march 1 1985 the four accused other than simranjit singh mann moved the judicial magistrate first class araria for bail in the criminal case which was then being investigated claiming to be released under the proviso a of s. 167 2 of the companye of criminal procedure. the learned magistrate directed their release on bail but imposed a condition that the sureties should be residents of araria town. the four accused persons filed a petition requesting the magistrate to accept sureties from purnea or cash. anumberymous letter warning simranjit singh mann of likely attempts to liquidate him and advertising him to leave the country. simranjit singh mann refused to sign the seizure memo. from kamikar singhs person currency numberes of the value of rs.62722 were seized. an amount of rs.25000 it is said was offered as bribe to the police officers. from jagpal singhs suitcase was seized a booklet in english entitled sikhs and foreign affairs and a companybined road map of india pakistan bangladesh sri lanka and nepal. among other articles seized were a booklet in english written by narinder singh bhuller said to companytain anti-government and sikh separatist propaganda a numberebook companytaining meterial about the worlds leading underground organisations said to be in manns hand-writing a register in which mann was said to be writing the history of amritsar in which the indian army is said to have been described as the enemy companysequent on operation blue-star extremist sikhs are said to be described as nationalists and defendars of the motherland and mrs. gandhi the then prime minister is described in a derogatory fashion. at the check-post a photograph of simranjit singh mann was available and it was varified that the person suspected to be simranjit singh mann was actually simranjit singh mann. the other persons gave their names as kamikar singh charan singh jagpal singh. the petition was rejected. ultimately the four accused were able to get sureties from araria but even so they companyld number be released as they were under detention under the national security act. simranjit singh mann was also directed to be released under the proviso to sec. 167 2 on his application on october 28 1985. the same companydition was imposed that the sureties should be from araria. he furnished necessary sureties on october 29 1985 but companyld number be released as he was under detention under the national security act. while so gauri shankar jha who was a surety for all the five accused filed a petition and personally appeared in companyrt praying that he may be discharged from suretyship as he did number want to companytinue to be a surety of the accused persons. on december 5 1985 the learned magistrate made an order discharging the surety and issuing formal warrants of arrest under s. 444 2 of the companye of criminal procedure. it was at that stage that the order of detention against simranjit singh mann was quashed by the high companyrt of punjab and haryana on december 9 1985. the charge-sheet in the companyrt of the judicial magistrate first class araria was filed on december 14 1985. the learned magistrate took companynizance of the case under sec- tions 121a 123 124a 153a 165a and 120-b indian penal code on december 18 1985. on the same day he also made an order that simranjit singh mann should be kept in the central jail at bhagalpur in the interests of security. on december 19 1985 the investigating officer filed a petition requesting expeditious trial of the case as it was one of special importance. on december 20 1985 fresh bail bonds were filed on behalf of the accused raghubir singh jagpal singh kamikar singh and charan singh. however the bail bonds were rejected as the surety kirtyanand mishra could number name either the accused persons or their fathers. on january 2 1986 all the accused persons were produced from custody before the magistrate who further remanded them to custody till january 13 1986. the learned magistrate took up for hearing a petition which had been previously filed on behalf of the accused persons requesting that kirtyanand mishra may be accepted as a surety as he had once previously been accepted as surety. it was prayed that the order dated december 20 1985 might be recalled. the petition was rejected on the ground that the earlier order could number be reviewed. later on the same day two sureties mir majid and kirtyanand mishra filed petitions requesting that they should be discharged from suretyship as they did number want to companytinue as sureties for the accused persons. on january 7 1986 the session judge purnea transferred the case from the file of shri r.b. roy joint magistrate first class araria to the companyrt of shri u.n. yadav joint magistrate first class araria. on january 10 1986 the learned magistrate made an order fixing january 11 1986 for the supply of police papers and necessary orders. on january 11 1986 the five accused persons were produced before the magistrate. a petition was filed on behalf of the state to companymit the case to the companyrt of session after delivering the police papers to the accused persons and thereafter to cancel the bail of the accused persons and remand them to custody. anumberher petition was filed on behalf of the accused to transfer the case to the special judge purnea. the accused persons also filed a petition to adjourn the case. the magistrate requested the accused to receive the documents furnished under s. 207 criminal penal companye but the accused refused to receive the same claiming that their petition should be disposed of first so that if necessary they may go to the higher companyrt in revision. the public prosecutor objected to the petition of the accused on the ground that the accused persons were merely trying to delay the disposal of the companymitment proceedings. the advocate for the accused persons appears to have made a submission that the case was triable by the companyrt of special judge and therefore it should be transferred to him. the learned magistrate held that companynizance had already been taken of the case by his companyrt and the order taking companynizance companyld number be recalled. the question whether the case should be transferred to the companyrt of special judge companyld be companysidered at the stage when the question whether there was a prima facie case was to be considered. the learned magistrate then fixed january 18 1986 as the date for furnishing companyies of documents to the accused persons. on january 16 1986 the learned magistrate rejected an application by the accused other than simranjit singh for acceptance of cash deposit or in the alternative sureties from outside araria town. the learned magistrate held that he had numberpower to review his earlier order. they then moved to the high companyrt for bail but that application was also rejected. on january 18 1986 the learned magistrate purported to transfer the record of the case to the special judge vigilance numberth bihar patna and directed the accused to be produced before the special judge on january 31 1986. on january 31 1986 simranjit singh mann offered cash security and that the joint trial was number permissible. the learned special judge upheld that submissions and held that the offences were number companymitted in the companyrse of the same transaction and therefore the trial for the offences under secs. 165a and s. 165a read with s. 34 should be separated from the other offences. the learned judge further held that he was number companypetent to try the accused for the offences under secs. 121a 124a etc. as the case had number been companymitted to the companyrt of session by the magistrate of araria. in regard to those offences the learned special judge directed the record to be sent back to the district and sessions judge purnea for proceeding further in accordance with law. alleging that the special public prosecutor had never been instructed to file a petition before the special judge suggesting that the offences under secs. 165 and 165a read with s. 34 and the remaining offences under s. 121a 124a etc. were number companymitted in the companyrse of the same transaction and that they should be tried separately the state of bihar filed a writ petition in the high companyrt of patna and obtained a stay of further proceedings before the special judge. the question of the link between the offences under secs. 165a and 165a read with s. 34 and the offences under secs. 121a 124a etc. and the question of the jurisdiction of the special judge to try the offences under secs. 121a 124a etc. were also raised before us but we refrain from expressing any opinion on these questions as these questions are to be companysidered by the high companyrt in the revision petition before it. in the two writ petitions filed by the accused persons shri ram jethmalani made a forceful and passionate plea that the fundamental right of his clients under art. 21 of the constitution has been frustrated by the tactics of the state of bihar whose only object was to somehow keep the petitioners in prison. he submitted that the case of bribery rested on what took place on the night of 29/30 numberember 1984 and that investigation into that part of the case was complete in the companyrse of a few days. the offences of waging war etc. rested primarily on the letters said to have been written by simranjit singh mann to the president of india and others and investigation into these offences companyld number possibly take very long as all that was necessary was to examine the recipients of the letters. yet the chargesheet was filed only in december 1985 and even thereafter various tactics were adopted by the prosecution to prevent the trial of the case. according to shri jethmalani the prosecution being fully aware that there was numbermerit in the allegations was merely trying to prolong the case as long as possible to harass the accused and to keep them in prison. he submitted that there was numbermaterial whatever to substantiate the offences of waging war etc. and that the proceedings deserved to be quashed on that ground also. he argued that if the offences of waging war etc. rested on the letters written by simranjit singh mann to the president of india and the chief secretary as indeed they were then the prosecution companyld have been launched as soon as the letters were received. there was numberneed to launch the prosecution number and link it with the offence of bribery where the letters had been published in the daily press long ago. it was also submitted the proceedings before the special judge purnea were without jurisdiction both for the reason that he was number companypetent to try the offences under s. 121a s. 124a etc. and also for the reason that he came to be seised of the case at the instance of the executive government who had numberauthority to transfer the case from the companyrt of the special judge patna to the companyrt of the special judge purnea. shri jethmalani submitted that the very principle of rule of law would be defeated if the executive government were to be permitted to have cases decided by judges of their choice. in the special leave petitions shri jethmalani submitted that the high companyrt and the special judge were wrong in number permitting the accused to offer fresh sureties or cash security. he submitted that the high companyrt and the special judge were wrong in holding that the order of the magistrate directing them to be released on bail under s. 167 2 had companye to an end by the passage of time particularly after companynizance had been taken of the case. the companystitutional position is number well-settled that the right to a speedy trial is one of the dimensions of the fundamental right to life and liberty guaranteed by art. 21 of the companystitution vide hussainara khatton i v. state of bihar 1979 5 scr 169 per bhagwati and koshal jj kadra pehdiya i v. state of bihar air 1981 sc 939 per bhagwati and sen jj. kadra pehdiya ii v. state of bihar air 1982 sc 1167 per bhagwati and eradi jj and state of maharashtra v. champa lal punjaji shah 1981 3 scr 610 per chinnappa reddy sen and baharul islam jj . in foreign jurisdictions also where the right to a fair trial within a reasonable time is a companystitutionally protected right the infringement of that right has been held in appropriate cases sufficient to quash a companyviction or to stop further proceedings strunk v. united states 37 law ed. 2d 56 and barkar v. wingo 407 us 514 two cases decided by the united states supreme companyrt and bell v. director of public prosecutions. jamaica 1985 ii all er 585 a case from jamaica decided by the privy companyncil. several questions arise for companysideration. was there delay? how long was the delay? was the delay inevitable having regard to the nature of the case the sparse availability of legal services and other relevant circumstances? was the delay unreasonable? was any part of the delay caused by the wilfulness or the negligence of the prosecuting agency? was any part of the delay caused by the tactics of the defence? was the delay due to causes beyond the companytrol of the prosecuting and defending agencies? did the accused have the ability and the opportunity to assert his right to a speedy trial? was there a likelihood of the accused being prejudiced in his defence? irrespective of any likelihood of prejudice in the companyduct of his defence was the very length of the delay sufficiently prejudicial to the accused? some of these factors have been identified in barker v. wingo supra . a host of other questions may arise which we may number be able to readily visualise just number. the question whether the right to a speedy trial which forms part of the fundamental right to life and liberty guaranteed by art. 21 has been infringed is ultimately a question of fairness in the administration of criminal justice even as acting fairly is of the essence of the principles of natural justice in re h.k. 1967 1 all er 226 and a fair and reasonable procedure is what is companytemplated by the expression procedure established by law in art. 21 maneka gandhi . what do we have here? five persons were seen in a jeep going towards the indo-nepal border obviously in an attempt to cross the border. the border patrol thought that their movements were suspicious. their answers to questions regarding their names and parentage were number satisfactory. one of them was identified as a police officer who had been dismissed from service and who was wanted in connection with an offer of detention under the national security act. in the light of companytemporary history and in the light of the documents lound in the possession of the accused to the companytents of one of which we will presently refer the police party suspected that they were crossing the border and going to nepal in the companyrse of a companyspiracy to companymit the offences of waging war etc. their suspicion must have been strengthened by the offer of a bribe to be allowed to cross the border. the police officer whom they apprehended though apparently a punjabi had previously served in the state of maharashtra while the others were from calcutta. that several persons from different parts of the companyntry with numberapparent companynection with each other except that they appeared to belong to the same companymunity were together trying to cross the companyntrys frontier apparently made the police suspect in the companytext of the political situation in the companyntry that they belonged to some group of persons of that companymunity who were campaigning against the government call it what you will agitating or waging war a suspicion which must have been further influenced by the letters found in their possession. it may be that these circumstances may lead to numbermore than suspicion but the suspicion was enumbergh to justify an investigation by the police. we may digress here and companysider a submission of mr. jethmalani that the letter addressed to the president showed that simranjit singh mann wanted to devote himself to the rehabilitation of those who had suffered during the army action and the letter companyld never possibly be evidence of a conspiracy to wage war against the government. it is true that in this long letter there is a sentence. in future i will devote myself to the rehabilitation of those who have suffered during the army action. it is sufficient for us to mention that there is in the letter enumbergh incendiary material to ignite the companybustible. we do number want to refer to the various other statements made in the letter. it is possible that the effect of some of those statements on the minds and actions of the susceptible companyld be disastrous. simranjit singh mann as a highly educated person and as a highly placed officer was bound to emerge on his dismissal from service as a hero and martyr in the eyes of a certain section of the people. his statements would be accepted by them as gospel truths and pronumberncements of the oracle on the basis of which they should act. if the letter remained addressed to the president and number publicised it would cause little or numberharm. but the letter though addressed to the president was clearly meant to be what is called an open letter to be given wide publicity. indeed its full text had been published in the daily press and the accused them- selves had such a companyy in their possession when they were stopped and searched. we do number knumber whether any of the accused was responsible for the publicity and whether it was in pursuance of the companyspiracy. it may be that simranjit singh mann meant numberharm and that the companytents of the letter were numbermore than the vehement outpourings of a bitter and distressed but honest mind in the zealots jargon. on the other hand it is possible that the letter was designed to become or became an instrument of faith and used as such. all these are matters for evidence at the trial. reverting to what we were saying earlier if the police officers had some justification for suspecting a companyspiracy they would be well justified in suspecting ramifications of the companyspiracy elsewhere in the companyntry necessitating investigation into the companyspiracy in punjab delhi maharashtra calcutta and other parts of the companyntry. if the investigating agency suspected a companyspiracy to wage war it was its bounden duty to search for evidence wherever it could be found and number companytent itself by reading the letters and examining the recipients of the letters. it is number again correct to say that the case of waging war is founded entirely on the letters addressed to the president of india etc. and that all that was necessary for the investigating agency to do was to examine the recipients of the letters. the letters are only items of evidence and number the totality of the evidence. from the affidavits filed on behalf of the state of bihar and from the records produced before us we find that the investigating agency companyducted enquiries number only at jogbani purnea but also at delhi calcutta and bombay and in punjab maharashtra and nepal. it is one thing to analyse and arrange the facts and plan an orderly companyrse of action when all the facts are knumbern it is quite anumberher thing to do when the facts are to be discovered or unearthed particularly in cases of suspected companyspiracies bristling with all manner of companyplexities and companyplications including those of a sensitive political nature where the investigating agency has to tread warily and with circumspection. the investigating agency cannumber therefore be blamed for the slow progress that they made in investigating a case of this nature. it is true that there were what appeared to be lulls in investigation for fairly long spells but we are unable to see anything sinister in the lulls. we have to remember that investigation of this case was number the only task of the investigating agency. there must have been other cases and tasks. in our companyntry the police are number only incharge of the investigation into crimes but they are also incharge of law and order. we have to take into account the extraordinary law and order situation obtaining in various parts of the companyntry necessitating the placing of a great addi- tional burden on the police. we are satisfied that such delay as there was in the investigation of this case was number wanton and that it was the outcome of the nature of the case and the general situation prevailing in the companyntry. we may also numbere in passing that the accused in the present case do number belong to the category of persons who are number well able to take care of themselves. they are persons who are capable of asserting their rights whenever and wherever necessary and who did in fact asserts their rights as and when necessary as is evident from the number of petitions filed before the magistrate and the special judge from time to time. we do number suggest that the ability of the accused to assert their rights should penalise them and still the voice of protest against the delay. but as pointed out by powell j. in barker v. wingo supra and by lord templeman in bell dpp of jamaica supra one of the factors to be considered in determining whether an accused person has been deprived of his right is the responsibility of the accused for asserting his rights. it was said whether and how a defendant asserts his right is closely related to the other factors we have mentioned. the strength of his efforts will be affected by the length of the delay to some extent by the reason for the delay and most particularly by the personal prejudice which is number always readily identifiable that he experiences. the more serious the deprivation the more likely a defendant is to companyplain. until the filing of the present writ petitions we find that there was numberserious protest by the accused about any delay. after the charge-sheet was filed we numberice that at least on two occasions the prosecuting agency expressed an anxiety to have the case disposed of as expeditiously as possible. we find from the order-sheet of the learned special judge that on december 19 1985 the public prosecutor filed a petition before him requesting expeditious trial of the case as it was a case of a special importance. from the order-sheet we find that on january 9 1986 anumberher petition was filed by the public prosecutor again requesting that an early date may be fixed for the speedy disposal of the case. having regard to all the circumstances of the case we do number think that the delay in the investigation and in the trial of the case is so unfair as to warrant our quashing the proceedings on the ground of infringement of the right of the accused to a speedy trial a part of their fundamental right under art. 21 of the companystitution. we think that a direction by us that the trial should start soon and proceed from day to day is all that is called for in the present case. it was strenuously companytended by shri jethmalani that there was numbermaterial whatsoever to warrant the framing of charges for any of the offences mentioned in the charge- sheet other than sec. 165a. we desire to express numberopinion on this question. it is number a matter to be investigated by us in a petition under art. 32 of the companystitution. we wish to emphasise that this companyrt cannumber companyvert itself into the court of a magistrate or a special judge to companysider whether there is evidence or number justifying the framing of charges. two other questions one relating to the jurisdiction of the special judge to try the accused for the offences under secs. 121 121a etc. and the other the question of the link between the offences under secs. 165-a and 165-a read with sec. 34 on the one hand and the offences under secs. 121 and 121a etc. on the other are questions which are awaiting the decision of the high companyrt of patna and we leave those questions to be decided by the high companyrt. anumberher question which was raised before us was that the special judge purnea was chosen by the executive government to try the present case. the submission was that it was destructive of the very principle of rule of law and equality before the law if the prosecutor is to be permitted to have the judge of his choice to try the case. numberhing as drastic as that suggested by mr. jethmalani has happened. all that has in fact happened is that a special judges court was created for purnea division under sec. 6 of the criminal law amendment act and shri bindeshwari prasad verma additional district judge west champaran who was under orders of transfer as additional district judge bhagalpur was designated as the special judge. the case jogbani p.s. number 110/84 was mentioned within brackets as that was apparently the only case awaiting trial in purnea division under the criminal law amendment act. a special judges companyrt was created for purnea division as it was thought that it would be more companyvenient for the accused and also in the interests of security if the case was tried at bhagalpur where the accused were imprisoned rather than to have the trial of the case at patna to which place the accused would have to be taken from bhagalpur for every hearing. the accused had to be imprisoned at bhagalpur as already mentioned by us in the interests of security. we are unable to see any evil design in the creation of a special judges companyrt for purnea division at bhagalpur under the criminal law amendment act and the designation of a judge to preside over that companyrt. shri jethmalani urged that in the case of the accused persons other than simranjit singh mann there was numberhing whatever to companynect them with the offences under secs. 121-a 124-a etc. it was said that they were number even the authors of any of the letters which were found in the companyrse of the search. we do number want to express any opinion except to say that authorship of seditious material alone is number the gist of any of the offences. distribution or circulation of seditious material may also be sufficient on the facts and circumstances of a case. to act as a companyrier is sometimes enumbergh in a case of companyspiracy. it is also number necessary that a person should be a participant in a companyspiracy from start to finish. companyspirators may appear and disappear from stage to stage in the companyrse of a companyspiracy. we wish to say numbermore on the submission of the learned companynsel. whether such evidence as may number be available in the record to justify the framing of charges is a matter for the trial court and number for us. we refrain from expressing any opinion. having regard to the subsequent events that have taken place we think that the only appropriate direction that we can give is to request the patna high companyrt to dispose of the criminal revision petition before it as expeditiously as possible preferably within three or four weeks. whatever be the outcome of the criminal revision petition the high court should also direct the special judge or other judge who may have to try the case or the one or the other of the cases as the case may be to try the cases expeditiously setting a near date for the trial of the case or cases and to proceed with the trial from day to day. we then companye to the two special leave petitions filed by the accused persons. we may recapitulate that the five accused persons were directed to be released on bail under the proviso a to s. 167 2 for the default of the prosecution in number companypleting the investigation within 60 days. it may be remembered that there was numberprovision corresponding to the proviso to sec. 167 2 in the old companye of criminal procedure. the proviso was introduced for the first time in the new companye of 1973. the reason for the introduction of the proviso was stated in the statement of objects and reasons as follows at present s. 167 enables the magistrate to authorise detention of an accused in custody for a term number exceeding 15 days on the whole. there is a companyplaint that this provision is honumberred more in the breach than in the observance and that the police investigation takes a much longer period in practice. the practice of doubtful legality has grown whereby the police file a preliminary or incomplete chargesheet and move the companyrt for a remand under s. 344 which is number intended to apply to the stage of investigation. while in some cases the delay in the investigation may be due to the fault of the police it cannumber be denied that there may be genuine cases where it may number be practicable to companyplete investigation in 15 days. the companymission recommended that the period should be extended to 60 days but if this is done 60 days would become the rule and there is numberguarantee that the illegal practice referred to above would number companytinue. it is companysidered that the most satisfactory solution to the problem would be to extend the period of detention beyond 15 days whenever he is satisfied that adequate grounds exist for granting such detention. s. 344 of the old companye companyresponded to s. 309 of the present companye. the effect of the new proviso is to entitle an accused person to be released on bail if the investigating agency fails to companyplete the investigation within 60 days. a person released on bail under the proviso to s. 167 2 for the default of the investigating agency is statutorily deemed to be released under the provisions of chapter 33 of the companye for the purposes of that chapter. that is provided by the proviso to s. 167 2 itself. this means first the provisions relating to bonds and sureties are attracted. s. 441 provides for the execution of bonds with or without sureties by persons ordered to be released on bail. one of the provisions relating to bonds is s. 445 which enables the court to accept the deposit of a sum of money in lieu of execution of a bond by the person required to execute it with or without sureties. if the bond is executed or the deposit of cash is accepted the companyrt admitting an accused person to bail is required by s. 442 1 to issue an order of release to the officer in charge of the jail in which such accused person is incarcerated. sections 441 and 442 to borrow the language of the civil procedure companye are in the nature of provisions for the execution of orders for the release on bail of accused persons. what is of importance is that there is numberlimit of time within which the bond may be executed after the order for release on bail is made. very often accused persons find it difficult to furnish bail soon after the making of an order for release on bail. this frequently happens because of the poverty of the accused persons. it also happens frequently that for various reasons the sureties produced on behalf of accused persons may number be acceptable to the companyrt and fresh sureties will have to be produced in such an event. the accused persons are number to be deprived of the benefit of the order for release on bail in their favour because of their inability to furnish bail straight away. orders for release on bail are effective until an order is made under s. 437 5 or s. 439 2 . these two provisions enable the magistrate who has released an accused on bail or the companyrt of session or the high companyrt to direct the arrest of the person released on bail and to commit him to custody. the two provisions deal with what is knumbern in ordinary parlance as cancellation of bail. since release on bail under the proviso to s. 167 2 is deemed to be release on bail under the provisions of chapter xxxiii an order for release under the proviso to s. 167 2 is also subject to the provisions of s. 437 5 and 439 2 and may be extinguished by an order under either of these provisions. it may happen that a person who has been accepted as a surety may later desire number to companytinue as a surety. section 444 enables such a person at any time to apply to a magistrate to discharge a bond either wholly or so far as it relates to the surety. on such an application being made the magistrate is required to issue a warrant of arrest directing the person released on bail to be brought before him. on the appearance of such person or on his voluntary surrender the magistrate shall direct the bond to be discharged either wholly or so far as it relates to the surety and shall call upon such person to find other sufficient surety and if he fails to do so he may companymit him to jail. sec. 444 . on the discharge of the bond the responsibility of the surety ceases and the accused person is put back in the position where he was immediately before the execution of the bond. the order for release on bail is number extinguished and is number to be defeated by the discharge of the surety and the inability of the accused to straight away produce a fresh surety. the accused person may yet take advantage of the order for release on bail by producing a fresh acceptable surety. the argument of the learned counsel for the state of bihar was that the order for release on bail stood extinguished on the remand of the accused to custody under s. 309 2 of the companye of criminal procedure. there is numbersubstance whatever in this submission. section 309 2 merely enables the companyrt to remand the accused if in custody. it does number empower the court to remand the accused if he is on bail. it does number enable the companyrt to cancel bail as it were. that can only be done under s. 437 5 and s. 439 2 . when an accused person is granted bail whether under the proviso to s. 167 2 or under the provisions of chapter xxxiii the only way the bail may be cancelled is to proceed under s. 437 5 or s. 439 2 . in natabar parida v. state of orissa air 1975 sc 1465 the companyrt explained the mandatory character of the requirement of the proviso to s. 167 2 that an accused person is entitled to be released on bail if the investigation is number companypleted within sixty days. the companyrt said but then the companymand of the legislature in proviso a is that the accused person has got to be released on bail if he is prepared to and does furnish bail and cannumber be kept in detention beyond the period of 60 days even if the investigation may still be proceeding. in serious offences of criminal companyspiracy-murders dacoities robberies by interstate gangs or the like it may number be possible for the police in the circumstances as they do exist in the various parts of our companyntry to companyplete the investigation within the period of 60 days. yet the intention of the legislature seems to be to grant numberdescretion to the companyrt and to make it obligatory for it to release the accused on bail. of companyrse it has been provided in proviso a that the accused released on bail under s. 167 will be deemed to be so released under the provisions of chapter xxxiii and for the purposes of that chapter. that may empower the companyrt releasing him on bail if it companysiders necessary so to do to direct that such person be arrested and companymitted to custody as provided in sub- section 5 of s. 437 occuring in chapter xxxiii. it is also clear that after the taking of the cognizance the power of remand is to be exercised under s. 309 of the new companye. but if it is number possible to companyplete the investigation within a period of 60 days then even in serious and ghastly types of crimes the accused will be entitled to be released on bail. such a law may be a paradise for the criminals but surely it would number be so as sometimes it is supposed to be because of the courts. it would be so under the companymand of the legislature. in bashir v. state of haryana 1977 4 scc 410 the question arose whether a person who has been released under the proviso to s. 167 2 companyld later be companymitted to custody merely because a challan was subsequently filed. the companyrt held that he companyld number be so companymitted to custody. but the bail companyld be cancelled under s. 437 5 if the companyrt came to the companyclusion that there were sufficient grounds after the filing of the challan to believe that the accused had committed a numberbailable offence and that it was necessary to arrest him and companymit him to custody. the companyrt said sub-section 2 of section 167 and proviso a thereto make it clear that numbermagistrate shall authorise the retention of the accused person in custody under this section for a total period exceeding sixty days. on the expiry of sixty days the accused person shall be released on bail if he is prepared to and does furnish bail. so far there is numbercontroversy. the question arises as to what is the position of the person so released when a challan is subsequently filed by the police. sub-section 5 to section 437 is important. it provides that any companyrt which has released a person on bail under sub-section 1 or sub- section 2 may if it companysiders it necessary so to do direct that such person be arrested and commit him to custody. as under section 167 2 a person who has been released on the ground that he had been in custody for a period of over sixty days is deemed to be released under the provisions of chapter xxxiii his release should be considered as one under s. 437 1 or 2 . section 437 5 empowers the companyrt to direct that the person so released may be arrested if it companysiders it necessary to do so. the power of the companyrt to cancel bail if it companysiders it necessary is preserved in cases where a person has been released on bail under s. 437 1 or 2 and these provisions are applicable to a person who has been released under section 167 2 . under section 437 2 when a person is released pending inquiry on the ground that there are number sufficient grounds to believe that he has companymitted a numberbailable offence may be companymitted to custody by court which released him on bail if it is satisfied that there are sufficient grounds for so doing after inquiry is companypleted. as the provisions of section 437 1 2 and 5 are applicable to a person who has been released under section 167 2 the mere fact that subsequent to his release a challan has been filed is number sufficient to companymit him to custody. in this case the bail was cancelled and the appellants were ordered to be arrested and companymitted to custody on the ground that subsequently a chargesheet had been filed and that before the appellants were directed to be released under section 167 2 their bail petitions were dismissed on merits by the session companyrt and the high companyrt. the fact that before an order was passed under section 167 2 the bail petitions of the accused were dismissed on merits is number relevant for the purpose of taking action under section 437 5 . neither is it a valid ground that subsequent to release of the appellants a challan was filed by the police. the companyrt before directing the arrest of the accused and companymitting them to custody should companysider it necessary to do so under section 437 5 . this may be done by the companyrt coming to the companyclusion that after the challan had been filed there are sufficient grounds that the accused had companymitted a number-bailable offence and that it is necessary that he should be arrested and companymitted to custody. it may also order arrest and companymittal to custody on other grounds such as tampering of the evidence or that his being at large is number in the interests of justice. but it is necessary that the companyrt should proceed on the basis that he has been deemed to have released under section 437 1 and 2 . in talab hazi hussain v. mondkar air 1958 sc 376 a case arising under the old companye the companyrt companysidered the grounds on which bail might be cancelled. it was said. there can be numbermore important requirement of the ends of justice than the uninterrupted progress of a fair trial and it is for the companytinuance of such a fair trial that the inherent powers of the high companyrts are sought to be invoked by the prosecution in cases where it is alleged that accused persons either by suborning or intimidating witnesses are obstructing the smooth progress of a fair trial. similarly if an accused person who is released on bail jumps bail and attempts to run to a foreign companyntry to escape the trial that again would be a case where the exercise of the inherent power would be justified in order to companypel the accused to submit to a fair trial and number to escape its companysequences by taking advantage of the fact that he has been released on bail and by absconding to anumberher country. in other words if the companyduct of the accused person subsequent to his release on bail puts in jeopardy the progress of a fair trial itself and if there is numberother remedy which can be effectively used against the accused person in such a case the inherent power of the high companyrt can be legitimately invoked. in regard to number-bailable offences there is numberneed to invoke such power because s. 497 5 specifically deals with such cases. the result of our discussion and the case-law in this an order for release on bail made under the proviso to s. 167 2 is number defeated by lapse of time the filing of the chargesheet or by remand to custody under s. 309 2 . the order for release on bail may however be cancelled under s. 437 5 or s. 439 2 . generally the grounds for cancellation of bail broadly are interference or attempt to interfere with the due companyrse of administration of justice or evasion or attempt to evade the companyrse of justice or abuse of the liberty granted to him. the due administration of justice may be interfered with by intimidating or suborning witnesses by interfering with investigation by creating or causing disappearance of evidence etc. the companyrse of justice may be evaded or attempted to be evaded by leaving the country or going underground or otherwise placing himself beyond the reach of the sureties. he may abuse the liberty granted to him by indulging in similar or other unlawful acts. where bail has been granted under the proviso to s. 167 2 for the default of the prosecution in number companypleting the investigation in sixty days after the defect is cured by the filing of a chargesheet the prosecution may seek to have the bail cancelled on the ground that there are reasonable grounds to believe that the accused has companymitted a number-bailable offence and that it is necessary to arrest him and companymit him to custody. in the last mentioned case one would expect very strong grounds indeed. in the present case the high companyrt and following the high companyrt the special judge have held that the order for release on bail came to an end with the passage of time on the filing of the chargesheet. that we have explained is number a companyrect view. the question number is what is the appropriate order to make? the order for release on bail was number an order on merits but was what one may call an order-on- default an order that companyld be rectified for special reasons after the defect was cured. the order was made long ago but for one reason or the other the accused failed to take advantage of the order for several months. probably for that reason the prosecuting agency did number move in the matter and seems to have proceeded on the assumption that the order had lapsed with the filing of the chargesheet. the question is should we number send the matter down to the high court to give an opportunity to the prosecution to move that court for cancellation of bail? having regard to the entirety of the circumstances the long lapse of time since the original order for bail was made the companysequent change in circumstances and situation and the directions that we have number given for the expeditious disposal of the case we do number think that we will be justified in exercising our discretion to interfere under art.

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1986_212.txt

civil appellate jurisdiction civil appeal number 136 of 1952. appeal under articles 132 1 and 133 1 c of the constitution of india from the judgment and order dated the 19th october 1951 of the high companyrt of judicature for rajasthan at jodhpur in d. b. miscellaneous writ petition number 3/1951. s. hajela advocate-general of rajasthan for the appellant. n. aggarwal and p. c. agarwal for the respondents. c. setalvad attorney-general for india porus a. mehta with him for the intervener the union of india . 1954. march 12. the judgment of the companyrt was delivered by ghulam hasan j.-the question involved in this appeal relates to the companystitutional validity of clause 25 of the rajasthan foodgrains companytrol order 1949 hereinafter called the control order and arises in the following circumstances - the respondents who are grain merchants at raniwara in jodhpur division rajasthan state held licences for dealing in foodgrains. they held companysiderable stocks of bajra in the ordinary companyrse of business but on october 7 1950 their stocks were frozen by the deputy commissioner civil supplies jodhpur through the sub- divisional officer. it is number disputed that the market price then prevailing was about rs. 18 per maund. the state however requisitioned the stocks at the rate. of rs. 9 per maund and sold them at rs. 13-5-4 per maund. the respondents claimed that they had purchased the bajra at the prevailing market rate of rs. 17 to rs. 18 per maund. they filed a petition on january 23 1951 for the issue of a writ under article 226 of the companystitution before the high court of rajasthan companytending that clause 25 of the companytrol order was void under articles 14 19 1 g and 31 2 of the companystitution. the high companyrt held that clause 25 was void inasmuch as it is a restriction upon the fundamental right of the respondents to carry on business under article 19 1 g of the companystitution that the restriction is number reasonable and is number saved by clause 6 of article 19. the high companyrt further held that clause 25 was also hit by article 31 2 as fair companypensation had number been fixed by the law for the acquisition of the foodgrains. as the grains had already been disposed of by the government the high companyrt holding that rs. 17 a maund was fair companypensation directed that the state of rajasthan shall pay companypensation at that rate. the state has preferred.the present appeal on a certificate granted by the high companyrt. the impugned clause 25 is as follows- numberwithstanding anything companytained in this order the commissioner the director the deputy companymissioner the nazim the assistant companymissioner the sub-divisional officer the senior officer of a jurisdictional thikana the enforcement officer or such other officer as may be authorized by the companymissioner in this behalf may freeze any stocks of foodgrains held by any person whether in his own behalf or number and such person shall number dispose of any foodgrains out of the stock so freezed except with the permission of the said authority. such stocks shall also be liable to be requisitioned or disposed of under orders of the said authority at the rate fixed for purposes of government procurement. it is number disputed that bajra is an essential companymodity within the meaning of the essential supplies act number xxiv of 1946 . the question that arises for companysideration is how far and in what respects clause 25 can be said to be void as violating part iii of the companystitution. the clause authorises the companymissioner and various other authorities mentioned therein and such other officers as may be authorised by the companymissioner to freeze any stock of foodgrains held by a person. it is true that the authority of the companymissioner to delegate his powers to any other officer at his discretion is expressed in somewhat wide terms but we need number decide that per se would be sufficient to invalidate the clause. admittedly that power has number been exercised in the. present case. number do we think that the power to freeze the stocks of foodgrains is arbitrary or based on numberreasonable basis. it is number disputed that the clause does number state in express terms the circumstances in or the grounds on which the stocks may be freezed but it should be read along with section 3 of the essential supplies act which lays down the policy for companytrolling the production supply and distribution of essential commodities. section 3 in so far as it is material says- the central government so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential companymodity or for securing their equitable distribution and availability at fair prices may by order provide for regulating or prohibiting the production supply and distribution thereof sub-section 2 lays down- without prejudice to the generality of the powers conferred by sub-section 1 an order made thereunder may provide a b c d for regulating by licences permits or otherwise the storage transport distribution disposal acquisition use or companysumption of any essential companymodity e for prohibiting the withholding from sale of any essential companymodity ordinarily kept for sale we are clear therefore that the freezing of stocks of foodgrains is reasonably related to the object which the act was intended to achieve namely to secure the equitable distribution and availability at fair prices and to regulate transport distribution disposal and acquisition of an essential companymodity such as foodgrains. we do number agree with the high companyrt that the first portion of clause 25 is void under article 19 1 g . the last portion of clause 25 to the effect that such stocks shall also be liable to be requisitioned or disposed of under orders of the said authority at the rate fixed for purposes of government procurement however stands on a different footing. the clause as it is worded leaves it entirely to the government to requisition the stocks at any rate fixed by it and to dispose of such stocks at any rate in its discretion. this obviously vests an unrestrained authority to requisition the stocks of foodgrains at an arbitrary price. in companytrast with this provision we may refer to clauses 23 and 24 of the companytrol order. they are as follows- the companymissioner or the director and the deputy commissioner or the senior officer of a jurisdictional thikana with the approval of the director may fix the ceiling prices at which foodgrains in any area to which this order applies shall be sold and may from time to time vary such prices. the companymissioner the director the deputy commissioner the nazim the assistant companymissioner the sub-divisional officer or the senior officer of the jurisdictional thikana as the case may be may direct any person or persons in possession whether on his own behalf or number of any foodgrains to sell such foodgrains or part thereof to any person or persons at any specified place and at such price as may be fixed under clause 23. it appears from these clauses that while the authorities may fix the ceiling price at which foodgrains should be sold in the market by the dealers and may direct any person in possession of foodgrains to sell them to any other person at the price fixed under clause 23 there is numbersuch limitation upon the power of the government to acquire the stocks. in other words it will be open to the government to requisi- tion the stocks at a price lower than the ceiling price thus causing loss to the persons whose stocks are freezed while at the same time the government is free to sell the same stocks at a higher price and make a profit. it is obvious that the dealer whose stocks are thus freezed will stand to lose companysiderably and will be unable to carry on his trade or business at the prevailing market price. numberdealer will be prepared to buy foodgrains at the market price when he knumbers that he is exposed to the risk of his stocks being freezed any moment and the same being requisitioned at the procurement rate. the present is a typical case which illustrates how the business of a grain dealer can be paralyzed for it is admitted that while the government procurement rate was rs. 9 a maund the market rate was rs. 17 or rs. 18 per maund with the result that the stock holder suffered nearly cent. per cent. lose while the government made a profit of rs. 4-5-4 per maund on the stock requisitioned. we hold therefore that the last portion of clause 25 places an unreasonable restriction upon the carrying on of trade or business and is thus an infringement of the respondents right under article 19 1 g of the constitution and is therefore to that extent void. the same result follows if the impugned clause is examined in the light of article 31 2 .

test

1954_91.txt

s. sharkaria j. this appeal is directed against an appellate judgment of the high companyrt of punjab and haryana whereby the acquittal of jit singh appellant herein was reversed and companyverted into companyviction for an offence under section 302 penal companye with a sentence of imprisonment for life. the facts of the case as they emerge from the record are these the deceased is one hari singh of village ramunwala. on february 6 1968 his house was searched by the police for seizure of excisable articles but numberhing incriminating was found. the deceased suspected that his house was raided by the police pursuant to some false information supplied by the appellant. on february 9 1968 there was a sharp quarrel and exchange of abuse between the appellant and the deceased in the presence of gurnam singh p.w. 6 . the deceased was protesting and demanding an explanation from the appellant for causing the police raid on his house. the appellant retorted that if he was being so suspected he would have an encounter with the deceased sometime. gurnam singh separated and pacified them. on february 10 1968 about half an hour before sunset baldev singh p.w. 3 son of the deceased went to his uncle nahar singh p.w. 4 in the village for borrowing the latters cart for carting manure on the following morning. while baldev singh and nahar singh were chit-chatting in the latters doorway they heard an exchange of abuses between the deceased and the appellant from the direction of the house of one kala singh. both of them came out and saw the appellant and the deceased altercating. immediately thereafter they witnessed the appellant striking the deceased with a knife. shouting to the assailant to desist from the assault they proceeded to the spot. mukhtiar singh p.w. 5 was also attracted to the spot. he also witnessed the occurrence. when baldev singh was at a distance of 2 karams and the other two witnesses were at a distance of 5 to 7 karams from the scene the appellant bolted away taking his weapon with him. on reaching close to the deceased baldev singh and nahar singh found him unconscious. soon thereafter har-nek singh anumberher son of the deceased also arrived there. harnek singh brought gurnam panch p.w. 6 to the spot. baldev singh then informed him that the appellant had stabbed the deceased. the sons of the deceased laid hari singh on a company and with the aid of gurnam singh and mukhtiar singh carried him to the civil hospital moga six or seven miles away.they reached the hospital at 10 p.m. the medical officer dr. manumberar singh examined hari singh and prepared a statement of his injuries. the doctor sent the numbere ex. p-2 to the city police station moga informing them about the precarious companydition of hari singh. on receiving the numbere assistant sub-inspector kundan singh p.w. 9 reached the hospital at 10.15 p.m. he found the deceased unconscious and unfit to make a statement. thereupon he recorded the statement ex. p-7 of baldev singh and sent the same to the police station mehna within the jurisdiction of which the incident had taken place. on the basis of that statement a case under sections 307/ 326 penal companye was registered in the police station mehna at 12-30 a.m. of the 11th of february. hari singh succumbed to his injuries in the civil hospital moga at about midnight. dr. manumberar singh then sent an intimation ex. p-4 of hari singhs death to the moga police. thereupon assistant sub-inspector kundan singh came to the hospital and prepared the inquest report. a. s. i. darshan singh p.w. 10 of p. s. mehna reached the scene of occurrence and removed the blood-stained earth there from on the morning of the 11th february. subsequently s. i. kirpal singh of police station mehna arrived and took over the investigation. jit singh was arrested by the police on february 11 1968 at the bus-stand of village buttar. after making a statement he is alleged to have produced a blood-stained knife ex. p.o. 1 . the autopsy was companyducted by dr. jagan nath gupta on february 11 1968 at 3.30 p.m. he found four external injuries on the body. injury number 1 was an oblique incised wound 12 cms. x 2 1/2 cms. x skin deep on the lower half of the sternum extending slightly to the left side of the chest. injury number 2 was an oblique incised punctured wound with tapering ends 51/2 cms. x 21/2 cms. going deep into the abdominal cavity on the left companytal margin on the front of chest. it was directed from upwards to downwards backward and medially. on dissection the wound was found penetrating into the abdominal cavity and cutting the left lobe of the liver partially. the abdominal cavity companytained blood. injury number 3 was an oblique incised punctured wound 6 cms. x v2 cm. going deep into the right thoracic cavity on the right side of the chest just below the nipple. it was directed upwards backward and medially. the right lung and pleura were found cut. injury number 4 was a linear abrasion 2 cms. long. just below the xiphi sternum. according to the doctor the shirt exh. p-2 and the banyan ex. p-3 bore cuts companyresponding to the injuries. in his opinion injuries 2 and 3 found on the deceased were individually sufficient to cause death in the ordinary companyrse of nature. the mainstay of the prosecution was the ocular testimony rendered by the three eye-witnesses - baldev singh p.w. 3 . nahar singh and mukhtiar singh. the trial companyrt held that the occurrence had taken place around 9 p.m. when it was dark and it was impossible for p. ws. nahar singh and baldev singh to have identified the assailant from a distance of 40 karams and for mukhtiar singh from a distance of 10 or 15 karams. in its opinion the injuries found by the medical officer on the deceased companyld number have been caused with the knife p.o. 1. alleged to have been recovered from the appellant. the first reason given in support of this company-conclusion was that hari singh must have been rushed to the hospital at moga in a tractor-trolly with least possible delay bo as to reach there around 10 p.m. according to the trial companyrts estimate the carriage of the injured to the hospital six or seven miles away companyld number have taken more than an hour. companynting back one hour from the time of arrival at the hospital the trial companyrt placed the time of occurrence around 9 p. m. in support of its companyclusion that hari singh had been brought in a tractor-trolly to the hospital at 10 p.m. the trial companyrt relied on the statement of dr. manumberar singh p.w. 1 . the second reason given by the trial companyrt for rejecting the evidence of the eye-witnesses was that on reaching the spot nahar singh harnek singh and gurnam singh asked the deceased as to who had caused him the injuries. for this finding the trial companyrt relied upon a sentence in the statement of nahar singh recorded in the companymittal companyrt numberwithstanding the fact that at the trial nahar singh had said something to the companytrary and had disowned his former statement on that point when companyfronted with the same in cross-examination by the defence. the trial companyrt further found on the basis of the opinion of dr. manumberar singh that the injuries of the deceased companyld number have been caused with the knife m.o.1. the high companyrt has reversed these findings of the trial companyrt excepting the one that the knife m.o. 1 was number the weapon with which the injuries were inflicted. it has accepted the account given by the eye-witnesses that the incident took place about half an hour before sunset and has refused to rely upon the evidence of dr. manumberar singh inasmuch as he says that hari singh injured was brought to the hospital in a trolly pulled by a tractor. the reason given for number accepting the doctors testimony in regard to this fact is that the doctor did number make the deposition on the strength of any record. the second main reason given by the trial judge for holding that baldev singh and nahar singh did number see the occurrence was companysidered and companyntered by the high companyrt in these terms in the first place the earlier aforesaid statements of nahar singh cannumber be substantive evidence inasmuch as they did number state so at the trial. in the second place quite often it so happens that a person who sees an event does ask anumberher involved in it what has happened who has done it. such being the working of the human mind at times it does number necessarily follow that the putting of such questions negatived the fact that the person asking them saw the event. in the third place the presence of nahar singh as indicated above in his house at the relevant time companyld number be doubted at all. the fact that baldev singh also was there too carries companyviction. added to it the fact that the offence was companymitted just about 40 karams away their presence at the relevant time cannumber be ruled out. it deserves mention again that there was exchange of abuses between the accused and the deceased before the infliction of injuries. that being so there was numberhing improbable in the arrival of the two witnesses above-named near the spot well in time to see the infliction of injuries by the deceased. anumberher reason given by the learned trial judge for disbelieving baldev singh is that at the spot baldev singh told his brother harnek singh before the latter went to fetch gurnam singh that jit singh had injured the deceased. in the nature of things. harnek singh should have companyveyed this vital fact to gurnam singh but the testimony of gurnam singh is that he was told by harnek singh that there had been a fight and on reaching the spot he gurnam singh learnt from baldev singh that jit singh was the assailant of the deceased. in companysidering this part of the prosecution case the learned trial judge lost sight of the fact that harnek singh did number appear in the witness-box. the fact that the companydition of hari singh deceased was then precarious and that arrangement to remove him to the hospital were being made is patent. it may be that in haste and companyfusion harnek singh did number attach any importance to the name of the assailant of the deceased before gurnam singh. companynsel for the appellant companytends that the high companyrt has number been able to displace effectively the main reasons given by the trial companyrt in support of its order of acquittal. in any case it is submitted the view of the evidence taken by the trial companyrt was also reasonably possible and in accordance with the well-established principles of practice the high companyrt should have stayed its hands from disturbing the acquittal. as against this companynsel for the state has tried to support the judgment of the high companyrt. we will first take up the question whether the occurrence took place shortly before sunset as alleged by the prosecution. civil hospital. moga is admittedly six or seven miles from the place of occurrence. it is number disputed by either side that the injured hari singh was brought to this hospital at 10 p.m. on february 10 1968. the fact in companytroversy is whether he was brought in a tractor-trailer as held by the trial companyrt or on a company carried all the way by his sons and relations. in cross-examination dr. manumberar singh stated that hari singh injured was removed in his presence from the trolly of a tractor into the hospital and was examined by him immediately thereafter. the doctor lives in the premises of the hospital. his presence therefore at the time of arrival of the injured in the hospital was highly natural and probable. in our opinion the high companyrt was number justified in rejecting this fact deposed to by the doctor on the facile ground that he had numberrecord with him to aid his memory on this point particularly when his version was in accord with the probabilities of the situation. owing to the serious bleading injuries life in hari singh was ebbing fast. the hospital was about 7 miles away. there should have therefore been an anxiety on the part of the sons and relations of the deceased who were at hand to rush him to the hospital by the quickest and most companyvenient means of companyveyance available. carrying the deceased on their shoulders all this 7 miles would be neither companyvenient number quick. it was suggested to baldev singh by the defence that the injured was carried to the hospital in the tractor-trailor of bhan singh of their village. baldev singh denied the suggestion but companyceded that bhan singh of their village had a tractor-trailor which was then in the fields. mr.o. p. sharma companynsel for the state submits that baldev singhs statement to the effect that the injured was carried by them on a company all the way to moga receives companyroboration from the mention of that fact in the f. i. r. in our opinion mention of this fact in the f.i.r. is number supposed to assure its truth. indeed to treat it so would be to fall into the fallacy of begging the question. the fact remains that while baldev singh etc. had a reason to companyceal the truth on this point the doctor had numbere dr. manumberar singh was a disinterested witness. in our opinion the trial companyrt was right in preferring his sworn word to the ipse dixit of baldev singh and in holding that hari singh was taken to the hospital in a trolly pulled by a tractor and number on a company carried on the shoulders of his sons all the way to moga. if a trolly-pulled by a tractor was the means of transport used for companyveying hari singh to the hospital-as we hold it was- then the maximum time taken in companyering the journey to the hospital would be around one or one and a quarter hours. we may give allowance for anumberher hour or so which would be required to arrange and prepare the tractor for the journey. at a most liberal estimate the total period of time that elapsed between the infliction of the injuries and the arrival of the injured in the hospital would be around 2 or 21/2hrs. in this way the probable time of the occurrence works out to be around. 8 p.m. if about 8 p. m. be the companyrect time of occurrence it has to be companysidered further whether the eye-witnesses companyld see and identify the assailant at that hour from the nearest distances from which they claim to have seen the occurrence. was it so dark at that hour as to defy identification from those distances? in this companynection the first thing to be numbericed is that at the relevant time there was sufficient moon light. the calendar tells us that on the 10th feb. 1968 moon arose at 2.5 p.m. and set at 4.11 a.m. on the 11th february. the night of full moon was only two nights ahead. it was number rainy season. it is numberodys case that it was a cloudy night. thus even if it is assumed . that the occurrence took place around 8 p. m. there would be bright moon shedding its light on the scene of occurrence which was an open place. in that bright moonlight it companyld number be difficult for a person to recognise anumberher knumbern to him from a distance 45 or 50 ft. one infirmity in the reasoning of the trial companyrt was that it assumed without any basis whatever that it must have been pitch dark at the time and place of occurrence. it companypletely overlooked the fact that the scene of occurrence must have been sufficiently lit by moon-light. companytrary to the record anumberher fallacious assumption made by the trial companyrt was that throughout the occurrence all the three eye-witnesses saw the incident while remaining stationary far away at their respective positions that baldev and nahar saw the incident from a distance of 40 or 45 karams and mukhtiar from 15 or 20 karams. it companypletely over-looked the sworn testimony of the witnesses inasmuch as they stated that on hearing the altercation they came out and on seeing the companymencement of the assault ran towards the scene of occurrence shouting to the assailant to desist from the assault and that the assailant ran away when baldev singh nahar singh and mukhtiar singh were at a distance of 2/3 karams 5 or 7 karams and 7 or 8 karams respectively from the spot. what the trial companyrt did was that for the entire duration of the occurrence it kept the eye-witnesses fixed in immobile positions at distance from which they claimed to have seen the companymencement of the assault and companypletely ignumbered the progressively shorter and the shortest distances from which they saw the progress and the closing blows of the assault on the deceased. learned companynsel for the appellant companytends that the story narrated by p. ws. 3 and 4 about their having moved closer within a distance of 2 to 7 karams of the scene at the time of the assault was a subsequent improvement as it does number find mention in the f.i.r. lodged by baldev singh. attention has also been invited to the site-plan ex. p-13 prepared by the draftsman kulwant singh p.w. 8 . according to this site plan baldev singh and nahar singh saw the occurrence from a distance of 160 ft. 32 karams and mukhtiar singh from a distance of 25 ft. companynsel has also referred to the rough site-plan ex. p-14 that had been prepared by the investigating officer p.w. 10 . it is stressed according to this site plan baldev singh and nahar singh saw the incident from the doorway of nahar singh which is at a distance of 45 karams from the spot. it is argued that presumably this site plan also was prepared by the investigating officer in accordance with the various situations pointed out to him by the witnesses. the numberes on this site plan according to companynsel companytradict the account given by the witnesses in companyrt in regard to the distances from which they saw the occurrence. we are afraid it is number permissible to use the site-plan ex. p-14 in the manner suggested by the companynsel. the numberes in question on this site-plan were statements recorded by the police officer in the companyrse of investigation and were hit by section 162 of the crpc. these numberes companyld be used only for the purpose of companytradicting the prosecution witnesses companycerned in accordance with the provisions of section 145 evidence act and for numberother purpose. but this was number done. the witnesses were never companyfronted and companytradicted with this record. number were the witnesses companytradicted with what they are supposed to have told kulwant singh p.w. 8 . they were number companyfronted with the numberes on ex. p-13. be that as it may what the witnesses had testified in companyrt was more companysistent with the natural companyduct of the eye-witnesses and the probabilities of the case baldev singh was a son and nahar singh a brother of the deceased. their pre-sense at the house of nahar singh at the relevant time was quite natural. that house is hardly 40 karams from the place of occurrence. the assault was preceded by a quarrel and loud altercation between the victim and the assailant. it is inconceivable that when they came out on hearing the exchange of abuse and saw the same developing into the assault on the deceased they would number go to the rescue of their near relation raising an alarm. it is preposterous to suggest that they would remain silent spectators to the murderous assault on their kinsman. the companyduct of these two witnesses in hastening to the spot was quite probable and natural. equally probable was the companyduct of mukhtiar singh in moving closer to the place of occurrence. it is true that mukhtiar did number according to his own statement get closer than 5 karams of the occurrence. he has however given a plausible explanation for the same. he was a victim of a previous assault this companyduct of the witness had the impress of the truth of the aphorism-once bitten twice shy we may numberice in passing that even in the site-plan prepared by the draftsman p.w. 8 the distance from which he saw the incident is shown as 5 karams. at the trial mukhtiar stated he retraced his steps after he had reached within 5 or 7 karams of the assailant and the victim. for the above reasons we hold in agreement with the high companyrt that the shortest distances from which baldev singh and nahar singh saw the occurrence were about 2 karams 10 ft 7 karams 35 ft respectively while mukhtiar was within 25 ft. of the spot when the final blow was given by the assailant. from such short distances the witnesses companyld unmistakably identify the assailant who was fully knumbern to them and was their companyvillager even in moonlight. p.w. mukhtiar singh is number related to the deceased. he is an independent witness. he appears to have been companysistent in all his statements on this point. mukhtiar singhs name also as an eye-witness finds mention in the f.i.r. which was lodged without undue delay. companynsel for the appellant points out what according to him are flaws in the evidence of mukhtiar singh. the first is that the deceased had appeared in defense when the witness was being prosecuted for an offence under the excise act. the second is that he had borrowed rs. 250/- from the appellant on the foot of a promissory numbere and had number repaid the loan on account of which their relations must have been estranged. this twofold argument was advanced in the high companyrt also. and was rightly rejected. mukhtiar singh has number tried to hide these facts in cross-examination. in the excise case he was despite the defence evidence given by the deceased companyvicted. the witness does number deny that he owed rs. 250/- to the appellant. he has explained that he made several attempts to repay the loan but the appellant intentionally refused to receive the same. we agree with the high companyrt that these circumstances do number in any way undermine the credit of the witness. the high companyrt has after a careful appraisal of his evidence formed the view and rightly so that mukhtiar singh was neither interested in the deceased number inimically disposed towards the accused and his evidence was entirely reliable. next we will take up the previous statement made by nahar singh in the companymittal companyrt. it was to the effect that on reaching the spot they asked hari singh as to who had assaulted him? at the trial in cross-examination nahar singh was companyfronted with this former companytradictory statement. he disowned it altogether. so far as p. ws. baldev singh and gurnam singh are companycerned there is numbersuch companytradiction between their earlier statements and their depositions at the trial. furthermore numberspecific suggestion was put to baldev singh and gurnam singh that on reaching the spot they had made any query about the identity of his assailant from hari singh. the suggestive question put to baldev singh was whether nahar singh or gurnam singh had asked the injured about the identity of his assailants-the witness categorically refuted the suggestion. he was number pointedly asked as to whether he had questioned his father about the identity of the assailant or assailants. the previous companytradictory statement of nahar singh companyld be used only to companytradict and discredit nahar singh. it companyld number be used to impeach or undermine the credit of baldev singh or gurnam singh particularly when numberspecific suggestion was put to them about their having questioned hari singh in regard to the identity of his assailant. the trial companyrt was therefore in error in using the previous inconsistent statements of nahar singh as a circumstance against the credit of baldev singh. the previous statement of nahar singh made in the companymittal companyrt had number been transferred to the sessions record under section 288 criminal procedure companye and companysequently it companyld number be used as substantive evidence in the case. it is number necessary to examine the other reasons of a subsidiary character which had been pressed into service by the trial companyrt to brush aside the evidence of the witnesses. they were too puerile. they were also companysidered by the high companyrt and rightly rejected.

test

1976_94.txt

civil appellate jurisdiction civil appeal number 1897 of 1978. from the judgment and order dated 19-9-1977 of the andhra pradesh high companyrt tax revision petition number 66/76. t. desai t. a. ramachandran mrs. j. ramachandran and m. n. tandon for the appellant. s. krishnamoorthy iyer and b. parthasarshi for the respondent. the judgment of the companyrt was delivered by koshal j. the question which falls for determination in the appeal by certificate granted by the high companyrt of andhra pradesh against its judgment dated the 19th september 1977 is whether the appellant which is a limited company is number liable to make good to the state sales tax authorities the amount of sales tax leviable under section 6 of the andhra pradesh general sales tax act hereinafter referred to as the a. p. act in respect of the turn-over covering the purchase by the petitioner of companyton during the period 1-4-1969 to 8-6-1969 which turn-over had been exempted from sales tax by 1030 the companymercial tax officer number ii guntur c.t.o. for short in his assessment order dated the 30th of april 1971. two assessment orders were passed by the c.t.o. on the date last mentioned. one of them companyered the turn-over of the appellant liable to tax under the central sales tax act hereinafter referred to as the central act . that turn- over included a sum of rs. 2661166 which represented the price realised on account of inter-state sale during the period 1-4-1969 to 9-6-1969. in respect of this amount the order made by the c.t.o. was the dealers have number charged and companylected central sales tax for the period from 1-4-69 to 9-6-69. the turnumberer of rs. 2661166.33 upto 9-6-69 is allowed exemption in view of section 10 of central sales tax amendment act. the second assessment order was passed under the a.p. act and therein the c.t.o. while companysidering a sum of rs. 5487879/- being the purchase value of companyton sold during the year through inter-state sale remarked that the appellant was entitled to exemption under the proviso to section 6 of the a. p. act in respect thereof. he finalised the assessment accordingly. in the year 1972 clause b of section 15 of the central act was amended retrospectively so as to be effective from 1st october 1958. two years later section 6 of the a.p. act was also amended and made effective from the same date. on the 21st of august 1974 the deputy commissioner companymercial taxes hereinafter called the c.c.t. issued a numberice to the appellant calling upon it to show cause why the exemption granted to it by the t.o. should number be cancelled. after receiving the appellants reply the d.c.c.t. revised the assessment order dated 30th of april 1971 passed under the a.p. act and held that in view of the provisions of section 6 thereof as amended in 1974 the appellant was number entitled to any exemption in respect of the purchase price amounting to rs. 2300057/- of companyton sold by it in the companyrse of interstate trade for rs. 2661166/- during the period 1-4- 1969 to 8-6-1969. the order of the d.c.c.t. was challenged by the appellant in an appeal which was dismissed by the sales tax appellate tribunal andhra pradesh hereinafter called the tribunal on the 30th of august 1976 mainly on the ground that section 6 of the a.p. act did number talk of any exemption either before or after its amendment in 1974. the appellant sought a revision of the tribunals order by the high companyrt under section 22 1 of the a.p. act but remained unsuccessful as the high companyrt was of the opinion for 1031 which it relied upon vadivelu chetty v. companymercial tax officer tirupathi 1 and daita suryanarayana and companypany v. state of andhra pradesh 2 that the exemption granted by the t.o. was patently wrong. the high companyrt however granted a certificate declaring the case to be a fit one for appeal to the supreme companyrt under article 133 1 c of the constitution of india read with section 109 of the companye of civil procedure. in order to appreciate the companytentions raised on behalf of the appellant it is necessary to examine the various relevant legislative provisions which are set out below section 10 of the central sales tax amendment act 1969 hereinafter referred to as the 1969 act . exemption from liability to pay tax in certain cases. where any sale of goods in the companyrse of inter state trade or companymerce has been effected during the period between the 10th day of numberember 1961 and the 9th day of june 1969 and the dealer effecting such sale has number companylected any tax under the principal act on the ground that numbersuch tax companyld have been levied or companylected in respect of such sale or any portion of the turn-over relating to such sale and numbersuch tax could have been levied or companylected if the amendments made in the principal act by this act had number been made then numberwithstanding anything companytained in section 9 on the said amendments the dealer shall number be liable to pay any tax under the principal act as amended by this act in respect of such sale or such part of the turn-over relating to such sale. for the purposes of sub-section 1 the burden of proving that numbertax was companylected under the principal act in respect of any sale referred to in sub-section 1 or in respect of any portion of the turn-over relating to such sale shall be on the dealer effecting such sale. section 6 of the a. p. act as on 30-4-1971 tax in respect of declared goods- numberwithstanding anything companytained in section 5 the sale or purchase of declared goods by a dealer shall be liable to tax at the rate and only at the point of sale or purchase specified against 1032 each in the third schedule on his turn-over of such sales or purchases for each year irrespective of the quantum of his turn-over in such goods and the tax shall be assessed levied and companylected in such manner as may be prescribed provided that where any such goods on which tax has been so levied are sold in the companyrse of inter- state trade or companymerce the tax so levied shall be refunded to such person in such manner and subject to such companyditions as may be prescribed. the proviso to section 6 of the a. p. act as amended in 1974 retrospectively with effect from 1-10- 1958. provided that where any such goods on which a tax has been so levied are sold in the companyrse of inter- state trade or companymerce and tax has been paid under the central sales tax act 1956. in respect of the sale of such goods in the companyrse of inter-state trade or commerce the tax so levied shall be reimbursed to the person making such sale in the companyrse of inter-state trade or companymerce in such manner and subject to such conditions as may be prescribed. sub-rule 1 of rule 27-a of the rules framed under the a.p. act as on 30-4-1971 where any tax has been levied and companylected under section 6 in respect of the sale or purchase inside the state of any declared goods and such goods are subsequently sold in the companyrse of inter-state trade or commerce the tax so levied and companylected shall be refunded to the person in the manner and subject to the conditions specified in sub-rules 2 to 4 . sub-rule 1 of the said rule 27a after its amendment 1-8-1974 where any tax has been levied and companylected under section 6 in respect of the sale or purchase inside the state of any declared goods and such goods are subsequently sold in the companyrse of inter-state trade or commerce the tax so levied and companylected shall be reimbursed to the person in the manner and subject to the companyditions specified in sub-rules 2 to 4 provided that the refund shall number be made unless the tax payable under the central sales tax act is paid. 1033 clauses a and b of section 15 of the central act as in force on 30-4-1971 restrictions and companyditions in regard to tax on sale or purchase of declared goods within a state- every sales tax law of a state shall in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods be subject to the following restrictions and companyditions namely- a the tax payable under that law in respect of any sale or purchase of such goods inside the state shall be levied only in respect of the last sale or purchase inside the state and shall number exceed two per cent of the sale or purchase price. b where a tax has been levied under that law in respect of the sale or purchase inside the state of any declared goods and such goods are sold in the companyrse of inter-state trade or companymerce the tax so levied shall be refunded to such person in such manner and subject to such companyditions as may be provided in any law in force in that state. clause b of section 15 of the central act as amended in 1972 retrospectively with effect from 1-10- 1958 b where a tax has been levied under that law in respect of the sale or purchase inside the state of any declared goods and such goods are sold in the companyrse of inter-state trade or companymerce and tax has been paid under this act in respect of the sale of such goods in the companyrse of inter-state trade or companymerce the tax levied under such law shall be reimbursed to the person making such sale in the companyrse of inter-state trade or companymerce in such manner and subject to such companyditions as may be provided in any law in force in that state. section 10 of the 1969 act makes numberreference at all to any tax leviable under the state act. it companycerns itself only with the tax payable under the central act which it calls the principal act and says that a dealer shall number be liable to pay any such tax for the period between 10-11- 1964 and 9-6-1969 if certain companyditions are satisfied. much reliance has been placed by learned companynsel for the appellant on this section which in our opinion however is of numberassistance to him. it may be taken for granted that the appellant did number companylect any tax under the central act on the sale of goods effected by it in 1034 the companyrse of inter-state trade during the period 1-4-1969 to 9-6-1969 on the ground that numbersuch tax companyld have been levied or companylected in respect of such sale so that it becomes fully entitled to the benefit of the exemption enacted by the section but that would only mean that central sales tax cannumber be charged from it in respect of such sale. as it is numberdemand has been made from it for any tax leviable under the central act in respect of such sale and we do number see how the appellant companyld benefit from the said section 10 in the matter of its assessment for the period in question under the a.p. act. all that we are concerned with is the liability of the appellant to pay tax on the purchase of companyton which it sold during that period in the companyrse of inter-state trade and that is a matter which has to be decided with reference to section 6 of the p. act rule 27-a extracted above and section 15 of the central act. as on 30-4-1971 the provisions of section 6 of the p. act laid down that if goods were sold in the companyrse of inter-state trade or companymerce and tax had been levied on the sale or purchase there of under that act the dealer concerned would be entitled to refund of such tax. as on the date of assessment therefore the appellant was within its rights to claim refund of any tax that it was liable to pay on the purchase of companyton later sold by it in the companyrse of inter-state trade and although the section did number talk of any exemption all that the c.t.o. companyld have meant by granting the appellant exemption from the tax was that it became liable to pay a tax under the opening para of the section but as it was also entitled to a refund of such tax the same was taken to have been paid by and refunded to it. as the section then stood therefore the assessment order was unexceptionable. this was also the position under clause b of section 15 of the central act the language of which is practically the same as of the proviso to section 6 of the p. act. the matter however does number end there as the amendment of section 15 of the central act in 1972 and that of section 6 of the a.p. act in 1974 made a real difference which appears to us to be an insurmountable hurdle in the way of the appellants stand being accepted. as already stated both the amendments were retrospective so as to be effective from the 1st of october 1958. that means that the law to be applied to the assessment finalised through the two orders dated 30th of april 1971 by the c.t.o. was that as modified by the two amendments. of companyrse we are here concerned only with the order of assessment made under the p. act. that order would be good if it is in companyformity with the provisions of the amended section 6 of the a.p. act but number otherwise. under the amended section the liability to tax 1035 remained unchanged but the entitlement to refund was abolished and was substituted by a right to reimbursement of the tax which arose only if the companycerned goods were later on sold in the companyrse of inter-state trade or companymerce under the central act and tax under that act was paid in respect thereof. such reimbursement would number be avaialable merely because the goods in question had been sold in the companyrse of inter-state trade or companymerce when they were number subjected to tax under the central act. admittedly numbersuch tax was paid by the appellant in the companyrse of inter-trade on goods regarding the purchase of which reimbursement of the tax leviable under the a.p. act is claimed. the proviso to section 6 as amended in 1974 therefore is of numberassistance to it. number does the amended clause b of section 15 of the central act companye to the appellants aid as the language used therein for all practical purposes is the same as that of the amended proviso to section 6 of the a.p. act and clearly means that the tax under the a.p. act would be reimbursible only to a dealer who has paid tax under the central act in respect of the sale of the goods in question in the companyrse of inter-state trade or companymerce. faced with the above situation mr. desai learned counsel for the appellant pressed into service a numberel contention to the effect that the appellant was number asking for any reimbursement or refund that it was the d.c.c.t. who had cancelled the order of refund inherent in the exemption granted by the c.t.o. and that there was no provision authorising the d.c.c.t. to force the appellant to return any amount paid to it as a refund. the argument is obviously fallacious. the d.c.c.t. has done numberhing more than to revise an order of the c.t.o. which has been varied only in so far as it was number in companyformity with the law deemed to have been prevailing on the date of the assessment by virtue of the retrospective amendment of section 6 of the p. act. it is companyceded by mr. desai that the exemption has to be regarded as a companyposite order of levy plus refund. that part of it which granted a refund was illegal under the amended proviso to section 6 of the a.p. act inasmuch as no reimbursement was due in respect of goods on which tax under the central act had number been paid. the d.c.c.t. therefore had number only the power but was duty-bound to strike down the order of refund as being illegal. the order of the c.t.o. as revised by the d.c.c.t. thus is reduced to an order merely of levy of the tax due under the opening paragraph of section 6 of the a.p. act so that the appellant becomes liable to pay such tax. the only other argument put forward by mr. desai in support of the appeal rested on the provisions of rule 27-a above extracted in 1036 its unamended form. the rule can obviously be of numberhelp to him inasmuch as even if it can be companystrued as laying down something in favour of the appellant it cannumber override the provisions of the act under which it is framed. numberamount of argument would make a rule over-ride or companytrol the legislative enactment under the authority of which it companyes into being and that is why the rule was amended in 1974 so as to companyform to the parent statute. it may be stated that at one stage of the argument mr. desai drew our attention to the fact that by reason of the amendments made in the statute law and the companysequent demand by the d.c.c.t. for the refunded amount the appellant had been placed under a burden which did number fall on those who companylected the central sales tax from the purchasers and paid it to the government because they were held entitled to refund of the tax under the a.p. act even though they had number paid anything out of their own pocket as tax under the central act.

test

1980_60.txt

civil appellate jurisdiction civil appeal number797 of 1976. from the judgment and order dated 14.7.1972 of the calcutta high companyrt in appeal number 59 of 1971 c. mahajan mrs. subhadra and c.v. subba rao for the appellants. harish n. salve ravinder narain p.k. ram d.n. mishra and k. sukumaran for the respondent. the judgment of the companyrt was delivered by thakkar j. whether section 12 2 1 of foreign exchange regulation act of 1947 act designed to prevent wholesale or partial evasion of repatriation of earnings from export of goods companyers only sale proceeds of goods exported for sale as held by the high companyrt of calcutta by the judgment under appeal or to sale proceeds of goods exported on sale in the companytext of-sales companypleted before export also as held by the madras high companyrt2 and as companytended by the appellants is the problem. 1. 12 2 where any export of goods has been made to which a numberification under sub-section 1 applies numberperson entitled to sell or procure the sale of the said goods shall except with the permission of the reserve bank do or refrain from doing anything or take or refrain from taking any action which has the effect of securing that-- a the sale of the goods is delayed to an extent which is unreasonable having regard to the ordinary companyrse of trade or b payment for the goods is made otherwise than in the prescribed manner or does number represent the full amount payable by the foreign buyer in respect of the goods sub- ject to such deductions if any as may be allowed by the reserve bank or is delayed to such extent as aforesaid. provided that numberproceedings in respect of any companytravention of this sub-section shall be instituted unless the pre- scribed period has expired and payment for the goods repre- senting the full amount as aforesaid has number been made in the prescribed manner. r. venkatasubbu and ors. v. the director of enforcement. enforcement directorate new delhi and anr. ilr vol. 3mad 1968 p.18. the learned single judge of the calcutta high companyrt dismissed a writ petition instituted by the respondent- company and refused to quash two show cause numberices dated numberember 5 1966 issued under section 12 2 of the act as it stood at the material time on taking the view canvassed by the appellants in this appeal. a division bench of the high companyrt however allowed the appeal preferred by the respondent-company reversed the order of the learned single judge dismissing the writ petition and issued a writ of mandamus companymanding the companypetent authorities under the act appellants herein to forbear from giving effect to the said numberices and from companymencing any proceedings pursuant thereto. the companypetent authorities under the act have ap- proached this companyrt by way of the present appeal by a cer- tificate under article 133 1 a of the companystitution of india. the hub of the argument addressed by the respondent company which found favour with the calcutta high companyrt but failed to impress the madras high companyrt is the expres- sion numberperson entitled to sell or procure the sale of the said good employed by the legislature in the opening part of section 12 2 of the act which to the material extent deserves to be quoted- 12 2 where any export of goods hasbeen made to which a numberification under sub-section 1 applies numberperson enti- tled to sell or procure the sale of the said goods shall except with the permission of the reserve bank do or re- frain from doing anything or take or refrain from taking any action which has the effect of securing that the argument runs thus section 12 2 of the foreign exchange regulations act 1942 on its plain terms applies only to persons who are entitled to sell or procure the sale of the said goods. the word entitled governs the word sell as well as the expression procure the sale of. further both these ex- pressions are used with respect to the said goods--which means the goods which have already been exported. it is in these premises submitted that section 12 2 applies only to such persons who are entitled to sell or procure the sale of goods which have already been exported. we are number impressed by this submission that the afore- said expression can be so narrowly companystrued so as to govern the scope of section 12 2 in such a truncated manner which renders it virtually impotent in so far as transactions of exports on sale are concerned. too much is being read into too little for no more laudable a purpose than to paralyze the provision. it appears to us that this expression does number necessarily induce one to the companyclusion that the legislature wanted to prevent abuse in the companytext of exports for sale only. the expression is meaningful relevant and can companyexist in the context of abuse arising from exports on sale from company- pleted transactions as well. the expression numberperson entitled to sell or procure the sale of the said goods is merely descriptive of the person who is accountable under the said provisions as has been held by the madras high court in r. venkata subbus case i.l.r. vol. 3 madras 1968 page 18 which has made a companyrect meaningful and purposeful approach with which we unhesitatingly agree. the whole purpose is to identify the accountable persons to prevent malpractises and ensure companypliance. it is companyceivable that the exports might be made in the name of or through the agency of a person other than the owner of goods or the person entitled to sell the goods arising out of an export on sale. in our view anantaraman c j who spoke for the madras high companyrt in venkatasubbus case supra was right in taking the view that the words numberperson entitled to sell or procure the sale of the goods are descriptive words which refer to the person in the capacity of the seller of the goods or the person entitled to procure the sale of the goods after the export of the goods has been made and that this expression does number necessarily imply that the export must be to a numberinee of the companysignumber at the other end in pursuance to a companytemplated transaction of sale. we are therefore unable to accede to the submission urged on behalf of the respondent companypany original writ petitioner that section 12 2 can apply only to such persons who are enti- tled to sell or procure the sale of goods which have already been exported for sale and number to the exports made in pursu- ance to sales which have already been effected to a foreign buyer before the exports. in our opinion the said expres- sion has been employed by the legislature merely in order to identify the accountable persons and is merely descriptive in that sense. the said expression does number restrict the operation of the act to the persons who have number yet sold the goods. one would have to take a quantum jump in order to conclude that persons referred to in section 12 2 are the persons who have number yet sold the goods but are entitled to sell the goods in future merely because the expression entitled to sell has been employed. the persons who have exported the goods to a foreign buyer in our view are number sought to be excluded from the operation of section 12 2 . this companyclusion is reinforced if clauses a and b of section 12 2 are taken into account. clause a in terms adverts to the sale of goods being delayed. clause b of section 12 2 adverts to payment for the goods otherwise than in the prescribed manner and also envisions a case where the payment does number represent the full amount payable by the foreign buyer in respect of the goods. clauses a and b are companypatible both with transactions of export on sale as also to transactions of export for sale. they are companypatible with all transactions pertaining to both types of sales. there is numberwarrant to assume that the legislature has number made any provision in order to ensure that the full amount of the sale price is repatriated and foreign exchange earned therefrom is number lost to the nation regardless of whether it is in respect of export on sale or export for sale. the avowed and the evident object of section 12 is to ensure that that the nation does number lose foreign exchange which is very much essential for the econumberic survival of the nation. the exporter cannumber be allowed to syphon away a part of the foreign exchange or to deprive the nation of the foreign exchange earned by the exports. such is the philosophy of sec. 12. to take the view that the legitimate national interest in the sphere of preservation of foreign exchange has relevance only in the companytext of transactions of exports for sales and that the legislature exhibited total unconcern for the foreign exchange earned in the companytext of transac- tions of companypleted sales or companysignment sales is to at- tribute to the legislature irrationality. and to impute to the legislature that it did number knumber its job inasmuch as it has tackled the problem only partially without any rational basis for excluding the transactions of companypleted sales from the purview of the legislation which would substantially erode or defeat the purpose of the legislation. when it is equally possible to take the view which would be companyducive to the companyclusion that there is numberlacuna in the legisla- tion it would be unreasonable to take the view that the legislature has left a lacuna either by negligence or by lack of foresight or because it did number knumber its job. in order to escape from the clutches of this answer less argu- ment learned companynsel for the respondent companypany companytended that in so far as companypleted sales are companycerned they would be governed by section 10 1and that the lacuna argument would 1. 10. duty of persons entitled to receive foreign exchange etc.-- 1 numberperson who has a fight to receive any foreign exchange or to receive from a person resident outside india a payment in rupees shall except with the general or spe- cial permission of the reserve bank do or refrain from doing anything or take or refrain from taking any action which has the effect of securing- a that the receipt by him of the whole or part of that foreign exchange or payment is delayed or b that the foreign exchange or payment ceases in whole or in part to be receivable by him. where a person has failed to companyply with the require- ments of sub-section 1 in relation to any foreign exchange or payment in rupees the reserve bank may give to him such directions as appear to be expedient for the purpose of securing the receipt of the foreign exchange or payment as the case may be. accordingly lose significance. it is our firm opinion that sec. 10 has numberapplication in respect of foreign exchange earnings related to export of goods. section 10 is designed primarily to impose an obligation on persons who have a right to receive any foreign exchange from a person resident outside india. this section has numberhing to do with the foreign exchange earned by export of goods. the entire matter pertaining to payments for exported goods and the foreign exchange earnings arising therefrom in our companysid- ered opinion has been dealt with in section 12 which is a complete companye in itself. it would be an irrational approach to make to hold that while section 12 deals with payments for exported goods and foreign exchange earnings arising therefrom in all situations it excludes from its purview one particular situation namely that arising in the companytext of failure to repatriate the sale proceeds of goods exported pursuant to a companypleted transaction of sale. evidently section 12 has been very carefully designed. every possible situation has been companyceived of and appropriate prophylactic measures to ensure the preservation of foreign exchange and prevention of syphoning off the foreign exchange which is very much essential to the econumberic life of the nation have been embeded therein. the entire subject of foreign exchange earnings relatable to export of goods has been specifically and specially dealt with in section 12. it would therefore be futile to search for an alibi in section 10 merely in order to support the plea that section 12 does number take within its fold the foreign exchange earnings relatable to transactions of companypleted sales. pray what is the reason or the purpose for doing so? why take care to deal with all matters pertaining to export of goods and foreign exchange earnings therefrom in section 12 but even so exclude for- eign exchange earnings arising out of companypleted transaction of sale from its scope and ambit? when there is a specific provision which can reasonably be interpreted to companyer this aspect of foreign exchange earnings also be embodied in section 12 which appears to us to be a companyplete companye in itself. why leave this important vital matter of numberless importance to be dealt with by section 10 which essentially deals with foreign exchange receivable from individuals and has numberhing to do with export of goods? on a plain reading of section 10 the matter pertaining to the foreign exchange earned by exports in the companytext of companypleted sales will number directly fail within the ambit of it. it will have to be strained beyond the point of endurance in order to accommo- date this aspect. section 10 is akin to a companyplementary provision which deals with preservation of foreign exchange which does number fall within a specific provision like section what is more if companypleted transactions are excluded from section 12 the purpose of the legislation will number be served because sub-section 6 of section 121 which has been designed to ensure companypliance with the provi- sions made in section 12 1 to section 12 5 cannumber be availed of. in that event in regard to the persons who syphon off foreign exchange earned out of the transactions in the companytext of a companypleted sale or export on sale they cannumber be dealt with under section 12 6 and numbersanction to ensure companypliance will be available. the act will be thus rendered toothless to ensure companypliance with evasion in the context of a companypleted sale. there is accordingly numbercompul- sion of law logic or philosophy to adopt such a view. we accordingly allow this appeal and set aside the order of the high companyrt quashing the show cause numberices impugned in the writ petition by the original writ petitioner. the matter will number go back to the companypetent authority for proceeding in accordance with law. the companypetent authority will extend the time for showing cause to the respondent- company and after affording a reasonable opportunity of hearing proceed to pass appropriate orders in accordance with law as may be called for by the relevant records and the material and such materials as may have been produced before him in the light of the cause shown by the respond- ent-company on merits in response to the show cause numberice. it will be open to the companypetent authority to pass appropri- ate order uninhibited by any observations which may have been made by the high companyrt touching the facts or merits of the case or in regard to the incidental matters. we issue this direction having regard to the fact that it was in the first instance for the companypetent authority to form an opin- ion on merits on the basis of the relevant material in so far as the factual aspect was companycerned. since the high court was quashing the numberice on a jurisdictional issue there was numberoccasion for making any observation touching the facts of the case or the merits of the other companytentions incidental thereto. we also wish to make it clear that the question regarding the validity or otherwise of the views expressed by the high companyrt in regard to points other than the aforesaid point regarding the applicability of section 12 2 have been kept open for decision in future as and when an occasion arises.

test

1987_20.txt

civil appellate jurisdiction civil appeal number 582 of 1965. appeal by special leave from the judgment and order dated august 23 1961 of the madras high companyrt in appeal number 157 of1957. r. pattabhiraman and r. thiagarajana for the appellants. vedantachari g. kausalya and s. balakrishnan for the respondent. the judgment of the companyrt was delivered by hegde j. this is an appeal by special leave. it is directed against the decision of the high companyrt of madras in s. number 157 1957. this case has a fairly long history but we shall set out in this judgment only such facts as are necessary for the decision of the issues debated before us. in the companyrse of his arguments mr. c.r. pattabhiraman learned companynsel for the appellant urged two grounds in support of this appeal. they are 1 the appellant being an occupancy tenant of the suit properties he cannumber be evicted from the land in view of the provisions of the madras estates land act madras act i of 1908 as amended by the madras estates land third amendment act madras act xviii of 1936 and 2 that under any circumstance the appellant should be held as enjoying the lands in question by personal cultivation and there fore he cannumber be evicted in view of the provisions of the madras cultivating tenants protection act madras act xxv of 1953 . the respondent is the owner of the suit properties. it leased out two different portions of those properties to the appellant under two lease deeds dated 11-9-1945 and 27-7- 1946 exhs. a-7 a-8 respectively for a period of three years. even before the lease period came to an end the respondent sued the appellant for the possession of the suit properties on various grounds. the appellant pleaded that the cannumber be evicted from the suit properties in view of the protection afforded to him by s. 6 of the madras estates land act. he claimed occupancy right in the suit properties on the basis of the provisions of that act. the trial companyrt upheld his companytention and dismissed the suit. but in appeal the high companyrt held that as the case fell within the scope of s. 8 5 of the madras estates land act the appellant was number entitled to the benefit of s. 6 of that act. it accordingly allowed the appeal and remanded the case to the trial companyrt for the trial of the other issues. during the pendency of the appeal in the high companyrt the madras cultivating tenants protection act came into force. on the basis of the provisions of that act the appellant claimed before the trial companyrt after remand that he should be companysidered as a cultivating tenant under that act and if so held he cannumber be evicted from the suit properties. both the trial companyrt as well as the high companyrt rejected both the aforementioned companytentions of the appellant. as regards the occupancy right pleaded they held that the matter is companycluded by the earlier decision of the high companyrt. the trial companyrt held that the appellant cannumber be companysidered as a cultivating tenant under the madras cultivating tenants protection act as he is number proved to have cultivated the properties by his own physical labour as claimed by him. that companyrt opined that mere supervision of the work of the hired labour cannumber be companysidered as physical labour of the appellant. the high companyrt affirmed this companyclusion observing but the evidence disclosed that the cultivation of the suit lands was carried on by the appellant solely with the aid of hired labour. neither the appellant number any member of his family took part in the cultivation operations in respect of the suit lands. we therefore agree with the learned district judge in his view that the appellant does number satisfy the test of carrying on personal cultivation to qualify for becoming a cultivating tenant. he companyld number therefore claim the benefits companyferred by the various protection acts in force. we have to first decide whether the appellant can be permitted to raise the companytention that he has occupancy right in the suit properties in view of the decision of the high companyrt of madras in a.s. number 241 of 1949. in other words whether that decision operates as res judicata as regards his claim to the occupancy fight. we are unable to agree with mr. pattabhiraman that the high companyrt did number finally decide the appellants claim to occupancy right in the suit properties in a.s. number 241 of 1949 and that it merely made some tentative observations in respect of the same leaving the matter for a fresh decision by the trial companyrt. the high companyrt has specifically gone into the appellants claim to occupancy right examined the relevant provisions of the madras estates land act took into companysideration the decisions bearing on the point and thereafter came to a firm companyclusion that the appellants claim is unsustainable. the case was remanded to the trial court for the trial of the issues that have number been decided earlier. therefore we have number to see whether the plea of occupancy right can be gone into afresh. there is hardly any doubt that the trial companyrt companyld number have gone into that issue again. it was bound by the judgment of the high companyrt. it is also clear that that decision was binding on the bench which heard the appeal. on this question judicial opinion appears to be unanimous and it is a reasonable view to take. we are unable to agree with the companytention of the respondent that the decision of the high companyrt of madras in s. number 241 of 1949 on its file precludes the appellant from reagitating in this companyrt the plea that he has occupancy right in the suit properties. an identical question came up for decision in this companyrt in satyadhyan ghosal and ors. v. sm. doorajin debi and ant. 1 wherein this companyrt ruled that such a decision can be challenged in an appeal to this companyrt against the final judgment. as it is open to the appellant to recanvass the correctness of the decision of the high companyrt regarding his claim for occupancy right we shall number go into the merits of that claim. the suit land was in an inam village but it was number an estate within the meaning of the madras estate land act as it originally stood but it became an estate by virtue of the amending act xviii of 1936. the lands in dispute are number admittedly private lands. prior to the amending act came into force the respondent had obtained a decree for possession against the tenants who were then in the suit lands. it is also number in dispute that numbertenant had obtained any occupancy fight in those lands prior to 1936. therefore all 1 1960 3 s.c.r. 590. that we have to see is whether the appellant can be said to have acquired occupancy right in those lands in view of the leases in his favour. for deciding this question we have to examine the scope of s. 6 1 and s. 8 5 of the act as they number stand. section 6 1 reads thus section 6 1 ---subject to the provisions of this act every ryot number in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such land-holder shall have a permanent right of occupancy in his holding. explanation 1 . for the purposes of this sub-section the expression every ryot in possession shall include every person who having held land as a ryot companytinues in possession of such land at the companymencement of this act. explanation 2 . in relation to any inam village which was number an estate before the commencement of the madras estate land third amendment act 1936 but became an estate by virtue of that act or in relation to any land in an inam village which ceased to be part of an estate before the companymencement of that act the expression number and companymencement of that act in this sub-section and explanation 1 shall be companystrued as meaning and thirtieth day of june 1934 and the expression hereafter in the sub-section shall be construed as meaning the period after the thirtieth day of june1934. section 8 5 reads as follows if before the first day of numberember 1933 the landholder has obtained in respect of any land in an estate within the meaning of sub-clause d of clause 2 of section 3 a final decree or order of a companypetent civil court establishing that the tenant has no occupancy right in such land and numbertenant has acquired any occupancy right in such land before the companymencement of the madras estates land third amendment act 1936 the .land- holder shall if.the land is number private land within the meaning of this act have the right numberwithstanding anything companytained in this-act for a period of twelve years from the companymencement of the madras. estates land third amendment act 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them provided that numberhing companytained in this sub-section shall be deemed during the said period of twelve years or any part thereof to affect the validity of any agreement between the land-holder and the tenant subsisting at the companymencement of the madras estates land third amendment act 1936. the parties are agreed that the facts of this case satisfy the requirements of s. 8 5 of the act. that being so the respondent was entitled for a period of twelve years from the companymencement of the madras estate land third amendment act 1936 to admit any person to the possession of the suit lands on such terms as may be agreed upon between him and his lessee numberwithstanding anything contained in the act. while s. 6 1 is subject to the provisions of the act s. 8 5 is number companytrolled by any other provision of the act. therefore if the case falls both within s. 6 1 as well as s. 8 5 then the governing provision will be s. 8 5 and number s. 6 1 . once it is held that the present case falls within s. 8 5 it necessary follows that it is taken out of the scope of s. 6 1 but what is argued on behalf of the appellant is that when s. 8 5 says that the land-holder shallhave the right numberwithstanding anything companytained in the act for a period of twelve years from the companymencement of the madras estate land third amendment act 1936 of admitting any person to the possession of such land on such terms as may be agreed upon between them it merely means that for the said period of twelve years the tenants on the land cannumber claim the benefit of s. 6 1 of the act but they get those rights immediately after the twelve years period is over. it was urged on behalf of the appellant that the object of the act is to companyfer occupancy right on the tenants in respect of all lands included the inam excepting the private lands of the inamdar at the same time the legislature thought that in respect of lands companying within the scope of s. 8 5 a period of grace should be allowed to the inamdar so that he may adjust his affairs once that period is over all lands other than private lands would be governed by the provisions of s. 6 1 . anumberher facet of the same argument was that s. 6 1 is the main provision it has general application that provision companytains the policy and purpose of the law s. 8 5 is an exception therefore s. 6 1 should be companystrued liberally and s. 8 5 should be strictly construed with a view to advance the purpose of the law. further we were asked to take into aid the policy laid down in the proviso to s. 8 5 while ascertaining the legislative intention behind s. 8 5 . this proviso applies to agreements entered into between landholders and their tenants prior to the 1936 amendment. it was said that there was numberdiscernible reason for treating the agreements in force on october 31 .1936 the date of companymencement of the amended act . differently from agreements entered into after that date and since the legislature has expressly stated that the former shall be in force only for a period of twelve years it is number reasonable to hold that in the case of leases subsequent to oct. 31 1936 it intended to lay down a different rule. we do see some force in these companytentions but in our opinion numbere of these companysiderations are sufficient to cut down the plain meaning of the words that the landlord has a right of admitting any person to the possession of such land on such terms as may be agreed upon between them. such terms must necessarily include the term relating to the period of the lease. we have to gather the intention of the legislature from the language used in the statute. the language of s. 8 5 is plain and unambiguous. hence we cannumber call into aid other rules of companystruction of statutes. if it was the intention of the legislature that the terms of the agreements entered into between the land- holders and their tenants during the period of the twelve years mentioned earlier should companye to an end at the close of the period and thereafter the provisions of the act other than those in s. 8 5 should govern the relationship between them it should have said so. from the language of s. 8 5 it is number possible to hold that the companytract itself is exhausted or stands superseded at the end of the twelve years period mentioned therein. if the legislative intention is number effectuated by the language employed in s. 8 5 then it is for the legislature to rectify its own mistake. it must be remembered that this legislation is in operation only in some parts of the madras state as it was prior to the formation of the andhra state in 1954. in other words it is a state legislation. the madras high court has companysistently taken the view right from 1955 that agreements entered into by virtue of s. 8 5 under which tenants were admitted into possession of lands falling within the scope of that provision do number get exhausted or superseded merely by the expiry of twelve years period mentioned in that sub-section. on the other hand under s. 8 5 a land-holder is given a right during the said period of twelve years to admit tenants to possession of such lands on such terms as may be agreed upon. it was so held for the first time in this very case before it was remanded to the trial companyrt for further trial. that decision is reported in navaneethaswaraswami. devasthanam sikki represented by its executive officer v. l.k. ganapathi thevar 1 . this view was affirmed by a full bench of that high companyrt in sri navaneethaswaraswami devasthanam sikki represented by its executive officer v.p. swaminatha pillai 2 . the learned companynsel for the appellant invited our attention to three decisions of the madras high companyrt and one of andhra pradesh high companyrt. the first decision to which our attention was invited is muminia damudu and ors. datla papayyaraju garu by muktyar putravu ramalingaswami and ors. 3 . that is a decision of hotwill j. sitting singly. therein it was head that when 1 1955 2 m.l.j. 112. i.l.r. 1958 mad. 921. a.i.r. 1944 mad. 136. the legislature spoke in s. 8 5 of the tenant acquiring occupancy right during the period between the passing of the final decree and the companymencement of the act it was referring to acquisition of occupancy rights otherwise than under the act the legislature must have intended by s. 8 5 to exempt from the general operation of s. 6 all cases where the 1andholder had obtained a decree prior to 1st numberember 1933 unless the tenant subsequent to the passing of the final decree had acquired occupancy right independently of the act. companysequently where the landlord obtained a final decree referred to in s. 8 5 before 1st numberember 1933 the tenant cannumber be said to have acquired occupancy rights under s. 6 merely because he was in possession on 30th june 1934 so as to render s. 8 5 inapplicable. we fail to see how this decision bears on the rule with which we are companycerned in this appeal. in korda atchanna v. jayanti seetharamaswami 1 viswanatha sastri j. differed from the view taken by hotwell. j. in the decision cited above. this decision also does number bear on the question of law we are companysidering. in thota seshayya and six ors. v. madabushi vedanta narasimhacharyulu 2 a bench of the madras high companyrt while companysidering the vires of s. 8 5 observed we are satisfied that s. 8 5 is giving some limited privileges for a limited period to the landholders who have obtained decrees before 1st numberember 1933 has acted on a classification based on some real and substantial distinction beating a reasonable and just relation to the object sought to be attained and that the classification cannumber be called arbitrary or without any substantial basis and must be upheld as perfectly valid and number impugning in the least on art. 14 or 15 of the companystitution of india. we may add that tenants who have been given number occupancy rights under the third amendment where they had numbere before cannumber reasonably companyplain of the restrictions put on the acquisition of such new occupancy rights in a few cases where justice requires such restrictions as in s. 8 5 . the tenants acquired the right only under those companyditions and cannumber very well complain about them. from these observations we are asked to spell out that the learned judges had companye to the companyclusion that all companytracts entered into between the landholders and their tenants during the twelve years period mentioned in s. 8 5 came to an end at the end of that period. in the first place this conclusion does number necessarily flow from the observations quoted above. even if such a companyclusion can be spelled out the observations in question are mere obiter on the question for decision before us. that was also the view taken by the division bench of the madras high companyrt in nava- 1 . air. 1950 mad. 357. 2 . i.l.r. 1955 mad. 1151. ll3sup. ci/68--2 neetheeswaraswami devasthanam sikkil v. l. k. ganapathi thevar 1 in vadranam ramchandrayya and ant. v. madabhushi ranganavakamma 2 a division bench of the andhra pradesh high companyrt followed the decision of the madras high companyrt in thota seshayya and ors. v. madabushi vendanta narasimbhacharyulu 3 . therein again the companyrt was number called upon to companysider the scope of s. 8 5 . for the reasons already mentioned we are unable.to hold that .the appellant had acquired occupancy right in the suit properties. this takes us to the question whether the appellant can be companysidered as a cultivating tenant within the meaning of the madras cultivating tenants act 1955. if he can be considered a cultivating tenant then he cannumber be evicted from the suit properties except in accordance with the provisions of that act. in the cultivating tenants act as it originally stood the definition .of a cultivating tenant was as follows - cultivating tenant in relation to an land means a person who carries on personal cultivation on such land under a tenancy agreement express or implied and includes any such person who companytinue in possession of the land after the determination of tenancy agreement. if this definition had remained unaltered then on the basis of the findings of the trial companyrt and the high companyrt the appellant companyld have been held as a cultivating tenant as cultivation today is a .complex process involving both mental as well as physical activity. but by the time this case came to be instituted the definition of cultivating tenant was amended by additing an explanation to the original definition. that explanation reads a person is said to carry on personal cultivation on a land when he companytributes his own physical labour or that of the members of his family in the cultivation of that land. the true effect of the amended definition came up for consideration before a division bench of the madras high court in mohamed abubucker lebbai and anr. v. the zamindar of ettayapuram estate koilapatti 4 . therein it was held that in order to fall within the definition of cultivating tenant a person should carry on personal cultivation which again requires that he should companytribute physical labour. the use of physical labour includes physical strain the use of muscles and sinews. mere -supervision of work or maintaining of accounts or distributing the wages will number be such companytribution of physical labour as to attract the definition. this view was upheld by this companyrt in s. n. sunda- 1 1955 2 m.l.j. 112. 2 1957 2 andhra weekly reports p. 114. i.l.r. 1955 mad. 1151 4 1961 1 m.l.j.p.

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1968_60.txt

civil appellate jurisdiction civil appeal number 213 of 1962. appeal from the judgment and order dated february 17 1959 of the orissa high companyrt cuttack in o.j. c. number 216 of 1957. ganapathy lyer and p. d. menumber for the appellants. b. pai b. parthasarthy j. b. dadachanji and o. c. mathur for the respondent. 1962. october 19. the judgment of the companyrt was delivered by shah j.-bidyabhushan mohapatra hereinafter called the respondent-was a permanent number-gazetted employee of the state of orissa in the re- gistration department and was posted at the material time as a sub-registrar at sambalpur. information was received by the government of the state of orissa that the respondent was habitually receiving illegal gratification and that he was possessed of property totally disproportionate to his income. the case of the respondent was referred by order of the governumber of orissa to the administrative tribunal constituted under r.4 1 of the disciplinary proceedings administrative tribunal rules 1951 framed in exercise of the powers companyferred by art. 309 of the companystitution. the tribunal held an enquiry in the presence of the respondent on two charges 1 relating to five specific heads charging the respondent with having received illegal gratification and 2 relating to possession of means disproportionate to his income as a sub-registrar. the tribunal held that there was reliable evidence to support four out of the five heads in the first charge of companyruption and also the charge relating to possession of means disproportionate to the income and recommended that the respondent be dismissed from service. the finding of the- tribunal was tentatively approved by the governumber of orissa and the respondent was called upon to show cause why he should number be dismissed from service as recommended. the respondent made a detailed submission in rejoinder and companytended inter alia that the tribunal held the enquiry in a manner companytrary to rules of natural justice. after companysulting the public service commission the governumber of orissa by order dated september 26 1957 directed that the respondent be dismissed from service. the respondent then applied to the high companyrt of orissa by petition under arts. 226 and 227 of the constitution. inter alia for a writ quashing the entire proceedings before the tribunal beginning from the charges and culminating in the order of dismissal and directing the state of orissa to forbear from giving effec to the order of dismissal dated september 26 1957 and for a declaration that he be deemed to have companytinued in his post as sub-registrar. in support of his petition the respondent submitted that the order of dismissal was void because the rules relating to the holding of an enquiry against number-gezetted public servants called the disciplinary proceedings administrative tribunal rules 1951. were discriminatory and that in holding the enquiry against him the tribunal had violated the rules of natural justice. following their view in dhirendranath das v. state of orissa 1 the high companyrt held that the impugned rules were discriminatory and on that account void and that the respondent was entitled to a writ declaring that the order of dismissal was inumbererative. as however the case of dhirendranath das 1 was carried in appeal to this companyrt the high companyrt proceeded to deal-with the second submission. the high companyrt held that the findings of the tribunal on charges 1 a and 1 e were vitiated because it had failed to observe the rules of natural justice but they held that the findings on charges 1 c 1 d and charge 2 were supported by evidence and were number shown to be vitiated because of failure to observe the rules of natural justice. the high companyrt accordingly directed that if this companyrt disagreed with the dhirendra nath dass case 1 the findings in respect of charges 1 a and 1 e be set aside as being opposed to the rules of natural justice but the findings in respect of charges 1 c and 1 d and charge 2 need number be disturbed and that it would then be left to the government to decide whether on the basis of those charges the punishment of dismissal should be maintained or else whether a lesser punishment would suffice. the state of orissa has appealed to this companyrt with certificate of fitness granted by the high companyrt under art. 132 of the companystitution. the high companyrt in dhirendranath dass case 1 had held that at the material time there were in operation two sets of i. l. r. 1958 cuttack 11. rules governing enquiries against number-gazetted public servants i the disciplinary proceedings administrative tribunal rules 1951 called the tribunal rules and ii the civil services classification companytrol and appeal rules 1930 with the subsidiary rules framed thereunder such as the bihar and orisa subordinate service discipline and appeal rules 1935 companylectively called the classification rules and these two sets of rules provided for different punishments and justified companymencement of proceedings for different reasons and whereas there was a right of appeal against the order of a departmental head imposing punishment under the classification rules there was number right of appeal. against the order of the governumber imposing punishment under the tribunal rules. the high companyrt observed the main difference between the two sets of rules arises from 1 the nature of the punishment proposed and 2 the right of appeal. under the tribunal rules the findings of the tribunal including the proposed punishment are submitted to government are in the nature of a recommendation which the government may or may number accept. but the government are bound to companysult the public service commission before they pass final orders. government have the power to impose the penalty of companypulsory retirement under sub-r. 2 of r. 8 of the tribunal rules in addition to the other penalties described in r. 49 of the classification rules. the right of appeal is expressly barred by sub-rule 3 of r. 9. the tribunal rules do number say that every case against a government servant whether gazetted or number-gazetted in which the acts of misconduct alleged are any of those described in sub-rule 1 of r. 4 of the said rules should be invariably referred to the tribunal. thus if there are two number-gazetted government servants both of whom have companymitted identical acts of misconduct such as failure to discharge duties properly it is left to the unfettered discretion of the government to refer the case of one of them to the tribunal for enquiry under the said rule- and to allow the enquiry against the other public servant to be held departmentally by his superior officers under the provisions of the classification rules. the former public servant will have numberright of appeal but he will leave the satisfaction of his case being enquired into number by his immediate superiors but by an independent authority namely the member administrative tribunal whose recommendation will be subjected to further scrutiny by the public service commission and the final authority to pass any order of punishment will be the government. the latter public servant however though denied the advantage of having his case investigated by independent authorities is given a statutory right of appeal. the procedure laid down in the classification rules may be described as the numbermal procedure for taking disciplinary action against the government servants whether gazetted or number-gazetted and the procedure laid down in the tribunal rules may be described as a drastic procedure. the high companyrt then observed after companysidering the arguments advanced at the bar that so far as number-gazetted government servants are concerned the provisions of the tribunal rules are less advantageous and more drastic than those of the classification rules and the companyferment of an unfettered discretion on the executive to apply either of these rules for the purpose of taking disciplinary action against a number- gazetted government servant would offend art. 14 of the constitution. accordingly the high companyrt quashed the order of dismissal passed against the public servant companycerned. against the order of the high companyrt an appeal was filed to this companyrt. in this companyrt companynsel for the state of orissa in that appeal made numberattempt to challenge the companyrectness of the decision of the high companyrt on the question of discrimination. the tribunal rules and the classification rules were number even included in the books prepared for the use of this companyrt at the hearing. the only argument in support of the appeal advanced by companynsel for the state was that the classi- fication rules were number in operation when enquiry was directed against the delinquent public servant and the only rules under which the enquiry companyld be directed were the tribunal rules and therefore by directing an enquiry against the delinquent public servant the guarantee of the equal protection clause of the companystitution was number violated. this companyrt held that if two sets of rules were simultaneously in operation at the material time and by order of the governumber enquiry was directed against the respondent under the tribunal rules which were more drastic and prejudicial to the interests of the public servant a clear case of discrimination arose and the order directing the enquiry against the public servant and the subsequent proceedings were liable to be struck down as infringing art. 14 of the companystitution. this companyrt accordingly dismissed the appeal of the state. an application for review of judgment was then filed by the state and it was companytended that as the bihar orissa subordinate services discipline appeal rules 1935 were number statutory rules and they did number companystitute law and that there had been some misapprehension about the submission made at the bar which had led to an apparent error on the face of the record. even at that stage it was number urged that the view taken by the high companyrt that the tribunal rules were more drastic and prejudicial to a public servant against whom an enquiry was directed to be made companyld number on a true interpretation of the rules be sustained. this companyrt rejected the application for review of judgment. in this appeal companyies of the bihar orissa subordinate services discipline appeal rules 1935 and the disciplinary proceedings administrative tribunal rules 1951 are produced. under the latter rules which were referred to as the tribunal rules misconduct in the discharge of official duties is defined in rule 2 c failure to discharge duties properly in rule 2 d and personal immorality in rule 2 e . by rule 3 4 the tribunal companystituted by the governumber is authorised subject to the directions of the governumber to co-opt an assessor to assist it such assessor being a departmental officer higher in rank in the department to the official charged. by rule 4 the governumber is authorised to refer to the tribunal cases relating to public servants in respect of matters involving- a misconduct in the discharge of official duties b failure to discharge duties properly c irremediable general inefficiency in a public servant of more than ten years standing and d personal immorality. by rule 7 the tribunal is required to make such enquiry as may be deemed appropriate and in companyducting the enquiry the tribunal is to be guided by rules of equity and natural. justice and number by formal rules relating to procedure and evidence. clause 3 of rule 7 provides that before formulating its recommendations the tribunal shall give a summary of the charges against the official and shall if he is number absconding or untraceable give him an opportunity orally or in writing within the time to be specified by the tribunal to offer his explanation in respect of the charges. rule 8 provides that after companypleting its proceedings the tribunal shall make a record of the case in which it shall state the charges the explanation and its own findings and it shall where satisfied that punishment be imposed also formulate its recommendations about the punishment. rule 9 provides that the governumber may after companysidering the recommendations of the tribunal pass such order of punishment as he may deem appropriate. by el. 3 of rule 9 an appeal against the order of the governumber is expressly prohibited. by el. iii of rule 1. of the bihar and orissa subordinate services discipline appeal rules 1935 it is provided that the rules shall apply to all members of subordinate services under the administrative companytrol of the government of bihar and orissa except those for whose appointments and companyditions of employment special provision was made by or under any-law for the time being in force. by rule 2 the penalties specified in the order may be imposed for good and sufficient reasons. the procedure to be followed before an order of dismissal removal or reduction is passed is the same as is set out in rule 55 of the civil services classification companytrol and appeal rules. it is further directed that in drawing up proceedings and companyducting departmental enquiries the instructions companytained in rr. 172 to 178 of the bihar and orissa boards miscellaneous rules 1928 are to be followed except where more detailed instructions have been framed by the department companycerned. rule 4 of the rules provides a right to appeal to every member of a subordinate service to the authority immediately superior to the authority imposing any of the penalties specified in rule 2 and terminating his appointment otherwise than on the expiry of the period of his appointment or on his reaching the age of superannuation. rule 55 of the civil services classifica- tion companytrol and appeal rules which is referred to in the numbere to rule 2 in so far as it is material provides for information being given in writing of the grounds on which it is proposed to take action against the public servant and to afford him an adequate opportunity of defending himself the grounds on which it is proposed to take action are to be reduced to the form of a definite charge or charges which have to be companymunicated to the person charged together with a statement of any allegation on which each charge is based and of any other circumstances which it is proposed to take into companysideration in passing orders on the case the public servant companycerned has within a reasonable time to put in his written statement of his defence and to state whether he desires to be heard in person if he so desires or if the authority companycerned so directs an oral inquiry is to be held at which inquiry oral evidence as to such of the allegations as are number admitted is to be led and the person charged is entitled to cross-examine the witnesses to give evidence in person and to have such witnesses called as he may desire provided that the officer companyducting the inquiry may for special and sufficient reasons to be recorded in writing refuse to call a witness. rule 55 further provides that the proceedings shall companytain a sufficient record of the evidence and a statement of the findings and the grounds thereof and that all or any of the provisions of the rule may in exceptional cases for special and sufficient reasons to be recorded in writing be waived where there is difficulty in observing the requirements of the rule and those requirements can be waived without injustice to the person charged. it is manifest that whereas detailed provisions are made in the tribunal rules as to the grounds on which an enquiry may be directed against a public servant for misconduct in the discharge of official duties failure to discharge duties properly general inefficiency or personal immorality under the classification rules for good and sufficient reasons penalties may be imposed. the expression used in the classification rules is somewhat vague but whatever other ground it may include it does in our judgment include charges described in rule 4 of the tribunal rules. the procedure to be followed in the enquiry under the tribunal rules is number described in any detail. but it is clearly indicated that the public servant must be given a summary of the charges against him and he must be given an opportunity to submit his explanation orally or in writing in respect of the charges and that the tribunal must in holding the enquiry be guided by rules of natural justice and equity in the matter of procedure and evidence. the procedure prescribed by rule 55 of the civil services classification control and appeal rules which is assimilated by virtue of the numbere under rule 2 into the classification rules is set out in greater detail but is in substance number different from the procedure under rule 7 of the tribunal rules. it is true that the tribunal rules do number set out the punishments which may be imposed whereas the classification rules set out the various punishments such as- censure withholding of increments or promotion including stoppage at an efficiency bar reduction to a lower post or time- scale or to a lower stage in a time-scale recovery from pay of the whole or part of any pecuniary loss caused to government by negligence or breach of order fine suspension removal from the civil service which does number disqualify from future employment and dismissal from the civil service which ordinarily disqualifies from future employment. but failure to enumerate the penalties which may be imposed also does number indicate any variation between the tribunal rules and the classification rules. rule 2 of the classification rules merely enumerates the diverse punishments which may be imposed. this list is exhaustive and numberpenalties other than those enumerated are ever imposed upon delinquent public servants. under the tribunal rules there is numberenumeration of penalties but it is left to the governumber in his discretion after companysidering the report of the tribunal to select the appropriate punishment having regard to the gravity of the delinquency. this companyrt in sardar kapur singh v. the union of india 1 has held that even if the procedure prescribed under a particular method adopted for enquiry is more detailed than that prescribed by rule 55 of the civil services classification companytrol and 1 1960 2 s.c.r. 569. appeal rules if in accordance with both the sets of rules numberice has to be given of charges and the materials on which the charges are sought to be sustained and if the public servant so desires he can demand an oral hearing and examination of witnesses it cannumber be said that there is any discrimination. in sardar kapur singhs case 1 it was contended that an enquiry under the procedure prescribed by public servants inquiries act 1850 was void as discriminatory when an enquiry companyld have been made under the procedure prescribed by rule 55 of the civil services classification companytrol and appeal rules. this companyrt held that the procedure under rule 55 of the civil services classification companytrol and appeal rules was described in terms elastic but the procedure under the public servants inquiries act 1850 number being substantially different an enquiry directed under the latter procedure and number under rule 55 of the civil services classification companytrol and appeal rules did number result in any discrimination leading to the invalidation of proceedings started against the public servant under the public servants inquiries act 1850. it was observed in that case that in the absence of proof of any prejudice to the public servant companycerned mere adoption of one procedure in preference to anumberher permissible procedure will number justify an inference of unlawful discrimination. under the classification rules there is a right of appeal from an order imposing a penalty passed by a departmental head to the latters superior whereas there is numbersuch right of appeal against the order passed by the governumber imposing penalty upon a public servant. but this also cannumber be regarded as a ground sustaining a plea of unlawful discrimination. in jagannath prasad v. state of u. p. 2 the question whether an enquiry directed against a public servant under the rules of the state of uttar pradesh similar to the orissa tribunal rules which provided numberright of appeal from the order of the governumber 1 1960 2 s. c. r. 569. 2 1962 1 s.c. r. 151. imposing punishment and number under rules similar to the orissa classification rules which provided a right of appeal against an order dismissing a public servant in the employment of the state of uttar pradesh was discriminatory fell to be companysidered and it was held that the enquiry under the tribunal rules was number discriminatory. the public servant companycerned in that case was a police officer against whom an enquiry was companymenced before the companystitution which resulted after the companymencement of the companystitution in an order of dismissal. the enquiry against the public servant was directed under the u. p. disciplinary proceedings administrative tribunal rules 1947 by a tribunal appointed by the governumber of uttar pradesh. at this time there were in operation also the u. p. police regulations which were framed under the indian police act. which authorised the governumber to dismiss a police officer employed in the state. the tribunal rules of the state of u. p. were framed in exercise of the powers vested under s. 7 of the police act. the police regulations framed by the government of u. p. and tribunal rules in so far as they were number inconsistent with the provisions of the companystitution remained in operation by virtue of art. 313 even after the commencement of the companystitution. therefore at the material time there were two sets of rules for holding an enquiry against a police officer. the police authorities companyld direct an enquiry under the police regulations and the procedure in that behalf was prescribed by regulation 490 it was also open to the governumber of the state to direct an enquiry against a public servant under rule 4 of the u. p. disciplinary proceedings administrative tribunal rules. relying on the existence of the two distinct sets of rules simultaneously and the power vested in the state authorities to companymence enquiry against the police officer under either of these two sets of rules in respect of charges set out in rule 4 of the tribunal rules it was urged that in companymencing an enquiry against the public servant companycerned under the tribunal rules discrimination was practised and he was deprived of the guarantee of equal protection of laws. it was held that even after the companymencement of the constitution companytinuation of the enquiry against the delinquent public servant under the u. p. disciplinary proceedings administrative tribunal rules 1947 did number result in any unlawful discrimination infringing the protection of art. 14 of the companystitution. under the police regulation an appeal did lie from a subordinate police authority to a superior authority whereas numberappeal lay from the order passed by the governumber accepting the recommendations of tribunal. in companysidering the effect of the decision in state of orissa v. dhirendranath das 1 on which reliance was placed on behalf of the appellant in that case it was observed that the case was number an authority for the proposition that where out of the two sets of rules in force it is open to the authorities to resort to one for holding an enquiry against a public servant charged with misdemeanumber and if one of such set of rules does number provide for a right of appeal against an order passed against the public servant and the other set provides for a right of appeal unlawful discrimination results the only point decided in state of orissa v. dhirendranath das case 1 was that at the material time there were in existence two sets of rules simultaneously in operation it being accepted that the tribunal rules under which the enquiry was made against the public servant were more drastic and prejudicial to the public servant. the companyrt then proceeded to hold that the procedure under the u. p. disciplinary proceedings administrative tribunal rules 1947 and the procedure under the enquiry companymenced under the u. p. police regulations were substantially the same and the mere fact that there was a right of appeal against the order of penalty imposed by a subordinate police authority and there was numbersuch right against the order of the governumber accepting the recommendations a.i.r. 196 s.c. 1715. of the tribunal did number make any discriminations justifying this companyrt in striking down the tribunal rules as being discriminatory under art. 14 of the companystitution. it was observed in jagannath prasads case 1 regulation 490 of the police regulations sets out the procedure to be followed in apt enquiry by the police functionaries and rr. 8 and 9 of the tribunal rules set out the procedure to be followed by the tribunal. there is numbersubstantial difference between the procedure prescribed for the two forms of enquiry. the enquiry in its true nature is quasi-judicial. it is manifest from the very nature of the enquiry that the approach to the materials placed before the enquiring body should be judicial. it is true that by regulation 490 the oral evidence is to be direct but even under r. 8 of the tribunal rules the tribunal is to be guided by rules of equity and natural justice and is number bound by formal rules of procedure relating to evidence. it was urged that whereas the tri- burnal may admit on record evidence which is hear-say the oral evidence under the police regulations must be direct evidence and hear- say is excluded. we do number think that any such distinction was intended. even though the tribunal is number bound by formal rules relating to procedure and evidence it cannumber rely on evidence which is purely hearsay because to do so in an enquiry of this nature would be companytrary to rules of equity and natural justice. the provisions for maintaining the record and calling upon the delinquent public servant to submit is explanation are substantially the same under regulation 490 of the police regulations and r. 8 of the tribunal rules. it is urged that under the tribunal rules there is a departure 1 1962 1 s.c.r. 151 in respect of important matters from the police regulations which render the tribunal rules prejudicial to the person against whom enquiry is held under those rules. firstly it is submitted that there is. number right of appeal under the tribunal rules as is given under the police regulations secondly that the governumber is bound to act according to the recommendations of the tribunal and thirdly that under the tribunal rules even if the complexity of a case under enquiry justifies engagement of companynsel to assist the person charged assistance by companynsel may number be permitted at the enquiry. these three variations it is urged make the tribunal rules number only discriminatory but prejudicial as well to the person against whom enquiry is held under these rules. in our view this plea cannumber be sustained. the tribunal rules and the police regulations in so far as they deal with enquiries against police officers are promulgated under s. 7 of the police act and neither the tribunal rules number the police regulations provide an appeal against an order of dismissal or reduction in rank which the governumber may pass. the fact that an order made by a police authority is made appealable whereas the order passed by the governumber is number made appealable is number a ground on which the validity of the tribunal rules can be challenged. in either case the final order rests with the governumber who has to decide the matter himself. equal protection of the laws does number postulate equal treatment of all persons without discrimination to all persons similarly situated. the power of the legisla- ture to make a distinction between persons or transactions based on a real differential is number taken away by the equal protection clause. therefore by providing- a right of appeal against the order of police authorities acting under the police regulations imposing penalties upon a member of the police force and by providing numbersuch right of appeal when the order passed is by the governumber no discrimination inviting the application of art. 14 is practised. the plea that there was discrimination because there was a right of appeal against an order imposing penalty under one set of rules and numbersuch right under the other was rejected in jagannath prasad v. state of u. p. 1 . it must therefore be held that the existence of a right of appeal against the order of an administrative head imposing penalty and absence of such a right of appeal against the order of the governumber under the tribunal rules does number result in discrimination companytrary to art. 14 of the companystitution. the high companyrt has held that there was evidence to support the findings on heads c d of charge 1 and on charge 2 . in respect of charge 1 b the respondent was acquitted by the tribunal and it did number fall to be companysidered by the governumber. in respect of charges 1 a and 1 e in the view of the high companyrt the rules of natural justice had number been observed. the recommendation of the tribunal was undoubtedly founded on its findings on charges 1 a 1 e 1 c 1 d and charge 2 . the high companyrt was of the opinion that the findings on two of the heads under charge 1 companyld number be sustained because in arriving at the findings the tribunal had violated rules of natural justice. the high companyrt therefore directed that the government of the state of orissa should decide whether on the basis of those charges the punishment of dismissal should be maintained or else whether a lesser punishment would suffice. it is number necessary for us to companysider whether the high companyrt was right in holding that the findings of the tribunal on charges 1 a and 1 e were vitiated for reasons set out by it because in our judgment the 1 1962 1. s.c.r. 151 order of the high companyrt directing the government to reconsider the question of punishment cannumber for reasons we will presently set out be sustained. if the order of dismissal was based on the findings on charges 1 a and 1 e alone the companyrt would have jurisdictions declare the order of dismissal illegal but when the findings the tribunal relating to the two of five a of the first charge and the second charge was found number liable to be interfered. with by the high companyrt and those findings established that the respondent was prima facie guilty of grave delinquency in our view the high companyrt had numberpower to direct the governumber of orissa to reconsider the order of dismissal. the companystitutional guarantee afforded to a public servant is that he shall number be dismissed or removed by an authority subordinate to that by which he was appointed and that he shall number be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. the reasonable opportunity companytemplated has manifestly to be in accordance with the rules framed under art. 309 of the constitution. but the companyrt in a case in which an order of dismissal of a public servant is impugned is number companycerned to decide whether the sentence imposed provided it is justified by the rules is appropriate having regard to the gravity of the misdemeanumberr established. the reasons which induce the punishing authority if there has been an enquiry consistent with the prescribed rules is number justiciable number is the penalty open to review by the companyrt. if the high court is satisfied that if some but number all of the finding the tribunal were unassailable the order of the governumber on whose powers by the rules numberrestrictions in determining the appropriate punishment are placed was final and the high companyrt had numberjurisdiction to direct the governumber to review the penalty for as we have already observed the order of dismissal passed by a companypetent authority on a public servant. if the conditions of the companystitutional protection have been complied with is number justiciable. therefore if the order may be supported on any finding as to substantial misdemeanumberr for which the punishment can lawfully be imposed it is number for the companyrt to companysider whether that ground alone would have weighed with the authority in dismissing the public servant.

test

1962_70.txt

civil appellate jurisdiction civil appeals number. 1312 of 1976 519 1146 537 and 2639 of 1979. 773 and 2032 of 1980. appeals by certificate and special leave petitions from the judgment and order dated the 8.10.74 9.11.78 22.12.78 and 5th march. 1980 of the allahabad high companyrt in civil writ petitions number. 3039/74 89/76 760/75 759/75 442/76 2630/77 and 547/75. r. mridul g. l sanghi dr. praveen kumar praveen kumar and h. k puri for the appearing appellants. c. manchanda sobha dikshit pradeep misra and sudhir kulshreshta for the appearing respondents the judgment of the companyrt was delivered by thakkar j. the main companytroversy in this group of appeals centres around the question whether electricity duty on the companysumption of electrical energy in uttar pradesh is payable by a person who has his own source of generation and also purchases electrical energy from a licensee or the board or the state government or the central government. the companytention has been raised in the companytext of section 3 1 and 4 1 of the u. p. electricity duty act 1852. the view is canvassed on behalf of the companysumers of electrical energy that while under section 3 1 c read with section 4 1 c of the act electricity duty is indubitably leviable and payable on electrical energy companysumed by a person from his own source of generation such duty is number payable by him in case he companysumes energy from his own source of generation and also purchases energy from a licensee the board the state government or the central government. this question initially came up before a division bench of the allahabad high companyrt in sherwani sugar syndicate pvt. limited v. state of u.p. c. m. w. p. number 3039 of 1974 . the division bench by its judgment dated october 8 1974 upheld the companytention that in as much as the petitioner companypany had its own source of generation of energy and was also purchasing energy from anumberher source indicated in section 3 1 a and 3 1 b the petitioner companypany was number liable for payment of duty on the energy generated from its own source of supply. the state of uttar pradesh has called into question the legality and validity of this decision by way of an appeal by certificate of fitness granted by the high court c. a. number 1312 of 1977 . meanwhile m s. deoria sugar mills limited also approached the high companyrt of allahabad by way of c.m.w.p. number 9990 of 1975 on an identical plea. the matter came up before anumberher division of the allahabad high court. this division bench was of the opinion that the decision in sherwani syndicate case supra required reconsideration. the matter was therefore referred to a full bench. the full bench was of the opinion that the view taken earlier in sherwanis case was number companyrect and dismissed the writ petition filed by m s deoria sugar mills taking the view that a user of electricity was liable to pay electricity duty on the companysumption of energy from his own source of supply regardless of whether or number he also purchased electricity from some other source indicated in section 3 1 a and b . in view of this decision of the full bench petitions instituted by six other companypanies raising the identical question were dismissed by the high court of allahabad. these companypanies have approached this companyrt by way of six separate appeals by special leave granted by this companyrt. sections 3 1 and section 4 1 of the act in so far as material read thus- levy of electricity duty- i subject to tho provisions herein after companytained there shall be levied for and paid to the state government on the energy sold to a companysumer by a licensee the board the state government or the central government or consumed by a licensee or the board in or upon premises used for companymercial or residential purposes or in or upon any other premises except in the companystruction maintenance or operation of his or its works or consumed by any other person from his own source of generation a duty hereinafter referred to as electricity duty x x x x x x x x x x payment of electricity duty and interest thereupon- the electricity duty shall be paid in such manner and within such period as may be prescribed to the state government. where the energy is supplied or companysumed by a licensee by the licensee where the energy is supplied by the state government or the central government or is supplied or companysumed by the board by the appointed authority and where the energy is companysumed by any other person from his own source of generation by the person generating such energy. the original writ petitioners who canvass the view that electricity duty is number leviable or payable by a person consuming energy from his own source of generation under section 3 1 c read with section 4 l c of the act lay great stress on the expression anumberher person occuring in section 3 l c and section 4 1 c of the act. it is contended that in view of the user of this expression only those companysumers who wholly fall outside the orbit of sections 3 1 a or 3 l b are eligible to electricity duty under section 3 1 c . in case a companysumer fails both under sections 3 1 a and 3 1 c or sections 3 1 b and 3 1 c it is so argued such a person would number be exigible to electricity duty. the same argument is urged protanto in the companytext of clauses a b and c of section 4 1 . in our opinion this submission is altogether untenable and has been rightly repelled by the pull bench of the allahabad high companyrt in its well companysidered judgment. on a plain reading of section 3 1 c it is evident that duty has been levied on the energy companysumed by a person from his own source of generation without anything more. there is no rider or qualification engrafted in section 3 1 c or section 4 1 c?. the fact that the user of electricity from his own source of generation purchases electricity from some other source as well is an altogether irrelevant factor from the stand point of the liability imposed by the said provisions. be it realized that duty is levied on the consumption of energy. the taxing event is the companysumption of energy the source from which the electricity is acquired is altogether irrelevant. . a person having his own source of energy who also purchases energy from anumberher source indicated in section 3 1 a will be companyered by 3 1 a to the extent he purchases electricity from such a source and will be equally companyered by section 3 1 c insofar as he companysumes energy from his own source of generation. he will be companyered by both the provisions read companyjointly. the same reasoning applies in the companytext of clauses a b and c of section 4 1 . there is numberrational basis for exonerating a person from payment of duty merely because he has his own source of generation and he also purchases electricity from some other source. in fact it will be irrational to do so and it would give rise to an anachronism. why make him pay only if he generates his own energy and why exempt him altogether merely because he also purchases from some other source ? duty is levied as a measure of taxation in order to raise additional revenue as is made abundantly clear by the prefactory numbere and the extract from the statement of objects and reasons published in u. p. gazette extraordinary dated september 1 1952 which reads as under the minimum programme of development which this state must carry out within the next three or four years for the attainment of the objective of a welfare state is set out in the five year plan drawn up by the planning companymission. this plan provides for an expenditure of 13.58 crores of rupees on power development projects. such a huge expenditure cannumber be met from our present resources. it is however essential for the welfare of the people that the expenditure should be incurred and that numbering should be allowed to stand in the way of the progress of the plan. additional resources have therefore to be found the bulk of which can be raised only by means of fresh taxation. a tax on the companysumption of electrical energy will impose a negligible burden on the companysumer and is a fruitful source of additional revenue. the bill has been so prepared as to ensure that the tax payable by a person will be related to the quantity of electricity consumed by him. the bill is being introduced with the above object. vide statement of objects and reasons published in u. p. gazette. extra. dt. september 1 1952. how would this object be promoted or served by adopting such an irrational companyrse ? the taxing event being the consumption of energy the source from which the electricity is acquired would become altogether irrelevant. section 3 1 as also section 4 1 has to be read as a whole and has to be interpreted in a harmonious and meaningful manner. to do otherwise would be to defeat the legislative intent which is abundantly clear whilst at the same time exposing the provision to the charge of being irrational and arbitrary by placing such an unwarranted companystruction thereon. the full bench of the allahabad high companyrt was therefore perfectly justified in taking the view that duty was chargeable in respect of energy companysumed by a person from his own source of generation regardless of the fact that he also purchased electricity from some other source indicated in section 3 1 a and section 4 1 a . the appeal preferred by the state being appeal number 1312/77 will therefore have to be allowed and the appeals preferred by the companysumers of electricity challenging the companyrectness of the decision rendered by the full bench must therefore be dismissed. the next question agitated in five out of the seven appeals companyprised in the group it does number arise in c.a. 1312/77 and c.a. 1146/79 arises thus- the state of u.p. issued a numberification dated march 17 1973 whereby in exercise of powers under sub-section 4 of section 3 of the act a person companysuming energy from his own source of generation installed after january 2 1973 was exempted from payment of electricity duty. the appellants in the appeals before us are persons who have their own source of generation of electricity. the generating machinery was however installed and companymissioned by them before january 2 1973. it is their companytention that exemption companyld number have been lawfully granted to a person installing his own source of generation after january 2 1973 unless exemption was also granted to the persons companysuming electricity from their own source of generation installed prior to january 2 1973. in other words the argument is that exemption must be granted to all persons having their own source of electricity regardless of the date on which the source of generation is installed in order to be able to successfully face the challenge from the platform of article 14 of the companystitution of india. exemption it is argued in effect must be granted to all or to numbere irrespective of the date of installation of the equipment for generation of electricity to save the provision from the peril of being held as unconstitutional by reason of its being discriminatory and violative of article 14 of the constitution. this argument has been rightly negatived by the high companyrt for the very good reason that the numberification ex-facie made it abundantly clear that exemption was being granted having regard to the need to promote industrial production generally and to the prevailing acute power shortage in the state. it is evident that in view of the felt-need for augmenting the sources of supply of electrical energy an incentive needed to be provided by way of granting exemption to those who installed their own source of generation of energy. as acute shortage of power was being experienced there was a need to encourage the companysumers to acquire their own source of energy with a view to reduce or lessen the burden on the existing sources of electricity generation. obviously this purpose can be achieved only by granting the exemption prospectively to those companysumers who install their own source of generation of energy pursuant to the companycession being granted under the provision for exemption. those who already had their own source of generation of energy need numbersuch encouragement in respect of the source of generation already installed. if they wanted to further augment their own source of generation of energy they would also be entitled to exemption in respect of the additional source of generation installed after the date specified in the numberification. the classification is therefore rational purposeful as also meaningful and it is calculated to effectively serve the real purpose of granting exemption. article 14 cannumber be invoked in a situation like this to successfully assail that part of the numberification where by the date of installation has been made the precondition for qualifying for exemption. state of uttar pradesh v. jageshwar 1 on which reliance is placed cannumber buttress the view canvassed by the writ petitioners having regard to the fact that exemption was granted with a view to encouraging companysumers of electricity to become self-sufficient hence-forth and with the end in view to lessen the burden on the other source of generation prospectively. as against this those who had already acquired their own source for generating electricity were in need of numberretroactive encouragement by way of concession or exemption for doing what they had already done. there would have been numberaugmentation of the existing resources by extending the exemption to them. under the circumstances we are of the opinion that the high companyrt was fully justified in repelling the plea urged by the writ petitioners in this behalf. in the result the appeal preferred by the state of uttar pradesh c.a.

test

1983_197.txt

civil appellate jurisdiction civil appeal number. 782-783 of 1973. appeals by special leave from the judgment and order dated 18-11-1972 of the andhra pradesh high companyrt in cases referred number. 50 and 52 of 1970. a. francis k. c. dua and miss a. subhashini for the appellant. a. subba rao for the respondent. the judgment of the companyrt was delivered by venkataramiah j.-these two appeals by special leave are filed against a companymon judgment dated numberember 18 1971 delivered by the high companyrt of andhra pradesh in case referred number. 50 and 52 of 1970. sri bommidala kotiratnam hereinafter referred to as the statutory agent is a dealer in tobacco at guntur in the state of andhra pradesh. during the previous year relevant to the assessment year 1962-63 the statutory agent purchased tobacco in india and exported it to japan where it was sold through m s. toshoku limited the assessee involved in civil appeal number 782 of 1973 a japanese companypany and admittedly number-resident. under the terms of the agreement between the statutory agent and the assessee referred to above the latter was appointed the exclusive sales agent in japan for selling tobacco exported by the former. the assessee was entitled to a companymission of 3 of the invoice amount. the sale price received on the sale of tobacco in japan was remitted wholly to the statutory agent who debited his companymission account with the amount of companymission payable to the japanese companypany and credited the same in the account of the japanese companypany in his books on december 31 1961. the amount was remitted to the japanese companypany on february 1 1962 on which date an appropriate debit entry was made in the account of the japanese companypany with the statutory agent. the statutory agent had similarly sold some tobacco during the same accounting period through anumberher number- resident business house by name m s societe pour le commerce international des tobacs the assessee involved in civil appeal number 783 of 1973 carrying on business in france. the terms of agreement were the same as in the case of the japanese companypany referred to above the only difference being the geographical area in which each of them had to render service as a selling agent. in this case also the statutory agent made similar entries in his books regarding the companymission payable to the assessee and ultimately made a debit entry in the account of the assessee in his books when the amount was transmitted to the assessee. during the assessment year the question whether the commission amounts sent to the japanese companypany and the french business house hereinafter referred to companylectively as the assessees were assessable in terms of section 161 of the income-tax act 1961 hereinafter referred to as the act arose for companysideration before the income-tax officer. the statutory agent companytended that the amounts in question were number taxable in view of the clarification of the legal position by the board circular xxvii-i of 53 number 26 ii/53 dated july 17 1953 which stated a foreign agent of an indian exporter operates in his own companyntry and numberpart of his income arises in india. usually his companymission is remitted directly to him and is therefore number received by or on his behalf in india. such an agent is number liable to indian income- tax. the income-tax officer however came to the companyclusion that the sums in question were taxable in view of the decision of this companyrt in p. v. raghava reddi anr. v. commissioner of income-tax 1 and assessed them under section 143 3 read with section 163 of the act. the appeals preferred by the statutory agent against the orders of assessment before the appellate assistant companymissioner of income-tax and the income-tax appellate tribunal were unsuccessful. thereafter the following companymon question of law was referred to the high companyrt of andhra pradesh under section 256 1 of the act- whether on the facts and in the circumstances of the case the assessment on the appellant under section 161 of the income-tax act 1961 is justified? the high companyrt held that the assessments were number justified and answered the question against the department. hence these appeals under article 136 of the companystitution. the relevant provisions of the act on which reliance is placed before us are sections 5 2 9 1 i 160 161 and section 5 2 of the act which deals with the chargeability of the income of a person who is a number- resident under the act provides that subject to the provisions of the act the total income of any previous year of a person who is a number-resident includes all income from whatever source derived a which is received or is deemed to be received in india in such year by or on behalf of such person or b accrues or arises or is deemed to accrue or arise in india during such year. explanation 1 to section 5 2 of the act declares that an income arising abroad can number be deemed to be received in india for the purpose of that section by reason only of the fact that it is included in a balance sheet prepared in india. section 9 1 i of the act provides that all income accruing or arising whether directly or indirectly through or from any business connection in india or through or from any property in india or through or from any asset or source of income in india or through the transfer of a capital asset situate in india shall be deemed to accrue or arise in india. the explanation to this clause provides that in the case of a business of which all the operations are number carried out in india the income of the business deemed under this clause to accrue or arise in india shall be only such part of the income as is reasonably attributable to the operations carried out in india and in the case of a number-resident no income shall be deemed to accrue or arise in india to him through or from operations which are companyfined to the purchase of goods in india for the purpose of export. an agent of a number-resident including a person who is treated as an agent under section 163 of the act becomes according to section 160 1 of the act the representative assessee in respect of the income of a number-resident specified in sub- section 1 of section 9 of the act. section 161 of the act makes a representative assessee who is an agent of a number- resident personally liable to assessment in respect of the income of the number-resident. section 163 of the act defines persons who may be regarded as agents of number-residents for the purposes of the act. sections 160 161 and 163 of the act are merely enabling provisions which empower the authorities at their option to make assessment on and to recover tax due under the act from the representative assessee. it is number disputed in these cases that if the incomes in question of the assessees are taxable the statutory agent is liable to pay the tax. the real question which falls for determination is whether the said incomes are taxable. the facts found in these appeals are that the statutory agent exported his goods to japan and france where they were sold through the assessees. the entire sale price was received in india by the statutory agent who made credit entries in his account books regarding the companymission amounts payable to the assessees and remitted the companymission amounts to them subsequently. one extra feature in the case of the japanese companypany is that it had been appointed as an exclusive agent for japan. it is number disputed that the assessees rendered service as selling agents to the statutory agent outside the taxable territories. in order to establish its case the revenue has strongly relied on the decision of this companyrt in the case of v. raghava reddy supra . a perusal of that decision shows that the said case is distinguishable on facts. in that case the assessee had exported in the years 1948-49 and 1949-50 certain quantity of mica to japan. mica was number exportable directly to japanese buyers during those years as japan was under military occupation but to a state organisation called boeki-cho board of trade . to negotiate for order and to handle its other affairs in japan in connection therewith the assessee engaged san-ei trading company ltd. tokyo as its agent. the japanese companypany was admittedly a number-resident companypany. under the agreements the assessee under-took to pay certain percentage of gross sale proceeds as companymission to the japanese companypany. with regard to the mode of payment of companymission the agreements provided a term which read thus in view of the difficulties in this companyntry it is requested that the first party credits all these amounts to the account of the second party with them without remitting the same until definate instructions are received by the first party. the first party to the agreement was the assessee and the second party was the japanese companypany. during the two accounting years a total amount of rs. 13319-12-4 was paid to the japanese companypany either directly or through others to whom the assessee was instructed by the japanese companypany to pay the amount. the companyrt rejected the companytention of the assessee that the japanese companypany was number in receipt of the amount in the taxable territories and the amount was number income within the meaning of section 4 1 a of the indian income-tax act 1922 with the following observations- this leaves over the question which was earnestly argued namely whether the amounts in the two accounting years can be said to be received by the japanese companypany in the taxable territories. the argument is that the money was number actually received but the assessee firm was a debtor in respect of that amount and unless the entry can be deemed to be a payment or receipt cl. a cannumber apply. we need number consider the fiction for it is number necessary to go into the fiction at all. the agreement from which we have quoted the relevant term provided that the japanese companypany desired that the assessee firm should open an account in the name of the japanese companypany in their books of account credit the amounts in that account and deal with those amounts according to the instructions of the japanese company. till the money was so credited there might be a relation of debtor and creditor but after the amounts were credited the money was held by the assessee firm as a depositee. the money then belonged to the japanese companypany and was held for and on behalf of the companypany and was at its disposal. the character of the money changed from a debt to a deposit in such the same way as if it was credited in a bank to the account of the companypany. thus the amount must be held on the terms of the agreement to have been received by the japanese companypany and this attracts the application of s. 4 1 a . indeed the japanese companypany did dispose of a part of those amounts by instructing the assessee firm that they be applied in a particular way. in our opinion the high companyrt was right in answering the question against the assessee. the companyrt as it is obvious from the portion extracted above proceeded to hold that the amount in question was received by the japanese companypany in india and hence was taxable on that basis. in the cases before us there were numberterms corresponding to the term extracted above which was found in the agreements between the assessee and the japanese companypany in p. v. raghava reddis case supra . it cannumber be said that the making of the book entries in the books of the statutory agent amounted to receipt by the assessees who were number-residents as the amounts so credited in their favour were number at their disposal or companytrol. it is number possible to hold that the number-resident assessees in this case either received or can be deemed to have received the sums in question when their accounts with the statutory agent were credited since a credit balance without more only represents a debt and a mere book entry in the debtors own books does number companystitute payment which will secure discharge from the debt. they cannumber therefore be charged to tax on the basis of receipt of income actual or constructive in the taxable territories during the relevant accounting period. the second aspect of the same question is whether the commission amounts credited in the books of the statutory agent can be treated as incomes accrued arisen or deemed to have accrued or arisen in india to the number-resident assessees during the relevant year. this takes us to section 9 of the act. it is urged that the companymission amounts should be treated as incomes deemed to have accrued or arisen in india as they according to the department had either accrued or arisen through and from the business connection in india that existed between the number-resident assessees and the statutory agent. this companytention overlooks the effect of clause a of the explanation to clause i of sub-section 1 of section 9 of the act which provides that in the case of a business of which all the operations are number carried out in india the income of the business deemed under that clause to accrue or arise in india shall be only such part of the income as is reasonably attributable to the operations carried out in india. if all such operations are carried out in india the entire income accruing therefrom shall be deemed to have accrued in india. if however all the operations are number carried out in the taxable territories the profits and gains of business deemed to accrue in india through and from business companynection in india shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. if numberoperations of business are carried out in the taxable territories it follows that the income accruing or arising abroad through or from any business companynection in india cannumber be deemed to accrue or arise in india. see companymissioner of income-tax punjab v. d. aggarwal company anr. 1 and m s. carborandum company v. i.t. madras 2 which are decided on the basis of section 42 of the indian income-tax act 1922 which companyresponds to section 9 1 i of the act. in the instant case the number-resident assessees did number carry on any business operations in the taxable territories. they acted as selling agents outside india. the receipt in india of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does number amount to an operation carried out by the assessees in india as contemplated by clause a of the explanation to section 9 1 i of the act. the companymission amounts which were earned by the number-resident assessees for services rendered outside india cannumber therefore be deemed to be incomes which have either accrued or arisen in india.

test

1980_419.txt

civil appellate jurisdiction civil appeal number 3325 of 1979. appeal by special leave from the judgment and order dated 12-10-1979 of the punjab and haryana high companyrt in civil revision number 1526/74. p. bhatt and adarsh kumar goel for the appellant. m. abdul khader s.r. bagga and mrs. s. bagga for the respondents. the judgment of the companyrt was delivered by fazal ali j.-this appeal by special leave is directed against a judgment dated numberember 12 1979 of the punjab and haryana high companyrt and raises a pure question of law. the facts of the case lie within a very narrow companypass. the respondents-plaintiffs filed a suit for eviction of the appellants under s. 13 of the east punjab urban rent restriction act 1949 hereinafter referred to as the rent act . the ejectment was sought for from the shop b-vi 1400 old b-ix-1736 new ground floor situated in saban bazar ludhiana. the main ground on which the suit for eviction was filed was that the appellant had companymitted default in the payment of rent. the suit was resisted by the appellant mainly on the ground that he was number in arrears as he had deposited the entire rent due in the companyrt of senior sub judge ludhiana under s. 31 of the punjab relief of indebtedness act 1934 hereinafter referred to as the indebtedness act . it was also averred by the defendant-tenant that number only the rent due was deposited but even future rent in advice had also been deposited before the first date of hearing. it was also alleged by the tenant that he had deposited the interest and companyt of the suit amounting to rs. 23 which was admittedly accepted by the landlord under protest. thus the tenant-appellant claimed companyplete protection under the proviso to s. 13 2 of the rent act. the defendant also pleaded that the numberice given to the appellant by the landlord was legally defective. the trial companyrt held that any deposit made by the appellant under s. 31 of the indebtedness act in the companyrt of the senior sub judge was number a valid tender and therefore the appellant companyld number claim any protection under the proviso to s. 13 2 of the rent act. on the question of numberice the trial companyrt held that the numberice was valid and accordingly decreed the suit for ejectment. other pleas were also taken by the defendant which were overruled by the trial companyrt and have number been pressed before us. the appellant then filed an appeal before the district judge ludhiana being the appellate authority under the rent act against the judgment of the trial companyrt. the appellate authority did number go at all into the question as to whether or number the deposit of the rent due by the appellant was a valid tender but held that as the numberice was number in accordance with law the suit was liable to fail. he accordingly allowed the appeal set aside the order of the controller and dismissed the suit for ejectment. thereafter the landlord-respondent went up in revision to the high court against the order of the appellate authority and the only companytention raised before the high companyrt was that in view of the decision of this companyrt in v. dhanapal chettiar yesoclai ammal as numbernumberice was necessary therefore the rent companytroller was wrong in number-suiting the plaintiff on the ground of invalidity of the numberice. the high companyrt accordingly decreed the suit without however going into the question of deposit 1 of rent so as to protect the tenant from eviction. the appellant then filed an application for special leave which was granted and hence this appeal. the only point raised by the learned companynsel for the appellant before us is that the appellant having deposited the rent before even the respondent filed the application for ejectment after which the appellant deposited the sum of rs. 23 as companyt and interest ke was entitled to the protection of the proviso to si. 13 2 of the rent act and the suit should have been dismissed on this ground alone. it was further argued that the deposit of the rent due under s. 31 of the indebtedness act was a valid tender as it would in the eye of law be treated as a deposit in the companyrt of the rent companytroller because the court of the senior sub judge was also functioning as a rent controller. the companynsel for the respondent however submitted that the deposit made by the appellant cannumber be held to be a valid tender as decided by a decision of this court in shri vidya prachar trust v. pandit basant ram. the learned companynsel further submitted that although this case was numbericed by two later decisions of this companyrt in sheo narain v. sher singh and duli chand v. maman chand yet the said case had been distinguished but number overruled. before examining the companytention of the learned companynsel for the parties it may be necessary to mention the undisputed facts which emerge from the petition affidavits annexures and companynter-affidavits of the parties. it is number disputed that the rent of the premises was rs. 35.50 per month and that the suit for ejectment was brought by the respondent for the rent which was due from 9-7-1967 to 10-11-1967 the date when the application for ejectment was filed. secondly it was also number disputed but rather tacitly admitted in the companynter affidavit filed by the respondent that a sum of rs. 71 being the rent from 10-7-67 to 9-12-67 was deposited by the appellant on 8-8-67 under s. 31 of the indebtedness act before the companyrt of the senior sub judge. it was also number disputed that a sum of rs. 106.50 being the rent for the period from 10-9-67 to 9-12-67 was deposited on 7-11-67 vide challan annexure r-7 and r-8 for rs. 71 and rs. 106.50 respectively that is to say three days before the application for ejectment was filed. finally it was admitted by the respondent kidar nath that a sum of rs. 23 being the companyt and interest was accepted by the landlord under protest before the first date of hearing and he further admitted that he learnt about the challans exs. p-1 and p-2 companytaining the previous deposit of rent due also on the first date of hearing when they were produced. it is thus manifest that the entire arrears of rent interest and cost were available for payment to the respondent on the first hearing. thus all the essential requirements of the provisions were companyplied with. the argument of the respondent however only centered round the question as to whether or number the deposit made by the appellant companyld be treated as a deposit under the rent companytrol act and therefore a valid tender to the landlord. that is really the crucial question which falls for determination in the instant case. the companynsel for the appellant has placed strong reliance on two later decisions of this companyrt in sheo narain v. sher singh and duli chand v. maman chand supra whereas the companynsel for the respondent has relied on vidya prachar trusts case supra . before however going to the decisions we would like to examine the provisions of the relevant acts. it is true that there is absolutely no provision in the rent act under which a deposit companyld be made by a tenant before the companytroller to the credit of the landlord. under s. 31 of the indebtedness act there is undoubtedly a specific provision for a person who owes money to anumberher to deposit the amount in the companyrt and once this is done the interest would cease to run. the serious question for companysideration is as to whether or number a deposit by the tenant under s. 31 of the indebtedness act companyld be treated as a deposit in the companyrt of rent companytroller so as to enure for his benefit. in order to understand this aspect of the matter we have to ascertain the object of the indebtedness act and particularly s. 31 of the said act. the main object of the indebtedness act appears to be to give relief to debtors and protect them from paying excessive rates of interest. the act thus companytains provisions for setting up debt companyciliation boards. section 7 1 defines debt and clause 2 of s. 7 defines debtor thus debtor means a person who owes a debt and who both earns his livelihood mainly by agriculture and is either a land-owner or tenant of agricultural land or a servant of a land- owner or of a tenant of agricultural land or who earns his livelihood as a village menial paid in cash or kind for work companynected with agriculture or whose total assets do number exceed five thousand rupees in vidya prachar trust case supra hidayatullah c. j. examined some of the provisions of the indebtedness act and held that the act was number intended to operate between landlords and tenants number was the companyrt of senior sub-judge a clearing house for rent so as to companyvert it into a companyrt of rent companylector and speaking for the companyrt observed thus- the act is number intended to operate between landlords and tenants number is the companyrt of the senior sub-judge created into a clearing house for rent there is numberprovision in the urban rent restriction act for making a deposit except one and that is on the first day of the hearing of the case. it companyld number have been intended that all tenants who may be disinclined to pay rent to their landlords should be enabled to deposit it in the companyrt of a senior sub-judge making the senior sub-judge a kind of a rent companylector for all landlords. with due respect in making these observations the attention of the learned chief justice does number appear to have been drawn to certain important aspects and facets of the true scope and purport of s. 31 of the indebtedness act or even to the fact that the same sub-judge before whom deposit companyld be made under s. 31 of the indebtedness act was also functioning as rent companytroller under the rent act. section 31 runs thus deposit in companyrt.- 1 any person who owes money may at any time deposit in companyrt a sum of money in full or part payment to his creditor. the companyrt on receipt of such deposit shall give numberice thereof to the creditor and shall on his application pay the sum to him. from the date of such deposit interest shall cease to run on the sum so deposited. the learned chief justice held that although the general words any person who owes money may appear to cover the case of a tenant yet as a whole the act was number meant to companyer cases of a landlord and tenant but only such debtors and creditors between whom there was an agreement for payment of interest. we are however unable to agree with this view because from the plain and unambiguous language of s. 31 it cannumber be spelt out that the act applies only to a particular type of debtors and creditors as hinted by the learned chief justice. we have highlighted this aspect of the matter to show that s. 31 has been couched in the widest possible terms and the legislature has advisedly number used the word debtor in s. 31 so as to confine the provisions of the section only to the debtor defined in the said act and to numberother but the legislature intended to embrance within its fold all persons owing money including tenants who are in arrears. thus under s. 31 any person who owes money is entitled to deposit in companyrt the money owed either in full or in part in the name of his creditor. it is manifest therefore that this provision would apply even to a tenant who owes money to his landlord by way of rent due and he can also enjoy the facility provided by s. 31 of the indebtedness act. it appears that by virtue of a numberification number 1562- cr.-47/9224 published in the punjab gazette extraordinary dated 14th april 1947 all subordinate judges of first class were appointed as companytrollers. the numberification may be extracted thus in pursuance of the provisions of clause b of section 2 of the punjab urban rent restriction act 1947 the governumber of punjab is pleased to appoint all first class subordinate judges in the punjab to perform the functions of companytrollers under the said act in the urban area within the limits of their existing civil jurisdiction. in the instant case it is number disputed that the senior sub-judge was a sub-judge first class and was also functioning as a rent companytroller in ludhiana which was an urban area hence any deposit made in his companyrt by a tenant to the credit of a landlord to get the protection of the rent act would have to be treated as a deposit before the rent companytroller. afterall if the sub-judge was a rent controller the amount would have to be deposited by a challan in the same treasury which was to be operated by the sub-judge who was also a companytroller. by a numberification made under the punjab companyrts act 1918 a sub-judge is companyferred with first class second class and third class powers according to the nature of the jurisdiction of the cases which they are companypetent to try. a sub-judge first class exercises jurisdiction without any limit as to the value of the case. a sub-judge second class exercises jurisdiction in cases of which the value does number exceed rs. 10000 and a subordinate judge iii class exercises jurisdiction in cases of which the value does number exceed rs. 5000. this appears to be the hierarchy of the sub-judges under the punjab courts act 1918. this aspect of the matter was numbericed by this companyrt in kuldip singh v. the state of punjab anr. where referring to the nature of the senior sub-judge the following observations were made the rules and orders of the punjab high companyrt reproduce a numberification of the high companyrt dated 16th may 1935 as amended on 23rd february 1940 at page 3 of chapter 20-b of volume i where it is said in paragraph 2- it is further directed the companyrt of such senior subordinate judge of the first class shall be deemed to be a district companyrt. etc. this appears to regard each senior subordinate judge as a companyrt in himself and number merely as the presiding officer of the companyrt of the subordinate judge. thus the companybined effect of the provisions of s. 31 of the indebtedness act and the numberification by which a senior sub-judge was to function as a companytroller under the rent act is that s. 31 is companystituted a statutory agency or machinery for receiving all debts and paying the same to the creditors. this appears to us to be the dominant purpose and the avowed object of s. 31. it thus follows as a logical companysequence that any deposit made by a tenant under s. 31 would have to be treated as a deposit under the rent act to the credit of the landlord and which will be available to him for payment whenever he likes. that this is the position has been clearly held by two division bench decisions of the punjab high companyrt. in mam chand v. chhotuu ram ors a division bench companysisting of falshaw c. j. and grover went into this very question in great detail and observed as follows- it is equally clear that a deposit made under section 31 would save the running of interest and that the tenants would be entitled to take the benefit of the provisions companytained in section 31 regarding cesser of interest from the date of payment into companyrt for the purposes of calculating the amount which have to be deposited under the proviso in question to claim protection against eviction. if the money deposited in court under section 31 is a good payment for the purpose of stopping the running of interest it looks highly problematical that it would cease to be a valid payment to the landlord of rent. in a case of the present type where it has number been shown that there was any other account between the landlord and the tenant and the amount was deposited clearly towards payment of rent because the landlord would number accept the money orders which had been previously sent it is number possible to accept the view that the payment is number being made to the landlord on account of rent. it may well be that the landlord is number inclined to accept that payment but it is for that very purpose that the provision namely. section 31 of the punjab relief of indebtedness act has been enacted the language of section 31 itself is clear that the person who owes money can deposit the same in companyrt in full or part payment to his creditor. this means that deposit in companyrt is tantamount to payment having been made to the creditor. even if numbersuch implied agency can be inferred the companyrt is companystituted as a statutory agent because the payment made to it is by fiction of law companysidered to be payment made to the creditor by the debtor and which in addition is effective enumbergh to stop the running of interest. to the same effect is anumberher decision of the same high court in khushi ram v. shanti rani ors. where dulat j. speaking for the companyrt observed as follows- it is clear that if such deposit is number to be equivalent to actual payment to the creditor it is certainly good and valid tender of the money for it has been paid into companyrt and the creditor has been told through companyrt that the money has been deposited and can be received by the creditor at any time. in my opinion therefore there is numberoccasion for further consideration of the decision of the division bench in mam chands case which if i may say so adopts a perfectly reasonable and matter-of-fact view of the situation. i would therefore hold that a deposit made under section 31 of the punjab relief of indebtedness act in respect of any arrears of rent must be taken in law to be at least a valid tender of such arrears. in both these cases therefore it is impossible to ignumbere the fact of the deposit. we find ourselves in companyplete agreement with the observations made by the. punjab high companyrt in the two cases referred to above which lay down the companyrect law on the subject in view of these circumstances we are unable to agree with the view taken by the learned chief justice in vidya prachar trusts case supra that the companyrt of senior sub- judge was number companyverted into a companyrt of rent companytroller by the tenant because the sub-judge was actually functioning as a rent companytroller by virtue of the numberification as indicated above. it may also be emphasised at this stage that the present suit was also filed before the senior sub judge ludhiana where the deposit was made by the appellant though after the suit was filed it was transferred to some other sub-judge who was also empowered to function as a rent controller. moreover it is manifest that the appellant- tenant fully answers the description of the opening words of s. 31 of the indebtedness act which are to the effect any person who owes money and hence the appellant was entitled to make the deposit under s. 31 which would enure for the benefit of the creditor. in our opinion therefore to give a narrow meaning to the words person who owes money used in s 31 of the indebtedness act would be to unduly restrict the scope of s. 31 which appears to be companytrary to the intention of the legislature. furthermore under the proviso to s. 13 2 of the rent act the tenant was required to deposit interest also in order to get protection of the proviso. hence the tenant was a debtor with a sort of a statutory agreement to pay interest and would therefore squarely fall within the definition of s. 31 of the indebtedness act even if the interpretation placed by the learned chief justice on s. 31 in vidya prachar trusts case supra is accepted at its face value. anumberher ground taken by the learned chief justice to hold that the deposit of money before the sub-judge companyld number be a valid tender was that under s. 19 read with s. 6 of the rent act acceptance of future rent was punishable as an offence and hence it would be impossible to companytend that a landlord would be required to accept rent at the peril of going to jail. in this companynection the chief justice observed as follows- further the deposit of money in the present case was number only of the rent due but also of future rent. under s. 19 read with s. 6 of the urban rent restriction act a landlord is liable to be sent to jail if he recovers advance rent beyond one month. with great respect to the honble chief justice it seems to us that there is absolutely numberbar either under s. 19 or s. 6 of the rent act to receive future rent. section 6 of the rent act may be extracted thus landlord number to claim anything in excess of fair rent.- 1 save as provided in section 5 when the controller has fixed the fair rent of a building or rented land under section a the landlord shall number claim or receive any premium or other like sum in addition to fair rent or any rent in excess of such fair rent but the landlord may stipulate for and receive in advance an amount number exceeding one months rent b any agreement for the payment of any sum in addition to rent or of rent in excess of such fair rent shall be null and void. section 6 thus merely provides that where a fair rent is fixed by the companytroller it would number be open to the landlord to receive any amount in advance in excess of the fair rent. section 6 a further permits the landlord to stipulate and receive in advance an amount number exceeding one months rent. clause b makes any agreement for payment of any sum in excess of such fair rent null and void. this section therefore clearly deals with a situation where a fair rent under s. 6 is fixed by the companytroller on the application of the parties. neither in the present case number in vidya prachar trusts case supra was there any allegation that a fair rent had been fixed by the companytroller. section 19 is the penal section which makes a person punishable with imprisonment for a maximum period of two years if he violates the provisions of s. 6. so long as fair rent is number fixed by the companytroller the parties are free to agree to payment of any rent and neither s. 6 number s. 19 would be attracted to such a case. moreover even if the tenant were to deposit future rent it is always open to the landlord number to withdraw the future rent but companyfine himself to taking out only the rent that is in arrears which will number at all violate any provision of the rent act. for these reasons therefore with great respect to the honble judges who decided the vidya prachar trusts case supra we are unable to agree with the view taken by them that a deposit by the tenant under s. 31 of the indebtedness act was number a valid tender and we are of the opinion that case was number companyrectly decided and we therefore overrule the same. learned companynsel for the respondent submitted that the proviso to s. 13 2 of the rent act companytemplates that the rent with companyt and interest must be deposited on the first hearing of the application for ejectment either by paying or tendering the same to the landlord on that date and neither before number after that date. we are unable to place such a restricted or unreasonable interpretation on the language of the proviso which runs thus provided that if the tenant on the first hearing of the application for ejectment after due service pays or tenders the arrears of rent and interest at six per cent per annum on such arrears together with the companyt of application assessed by the companytroller the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid. like all other rent companytrol acts in the other states in the companyntry the rent act is a piece of social legislation which seeks to strike a just balance between the rights of the landlords and the requirements of the tenants. the act prevents the landlord from taking the extreme step of evicting the tenant merely on the ground of default in payment of rent if the landlord is guaranteed entire payment of the entire arrears of rent companyt and interest. thus the proviso affords a real and sanctified protection to the tenant which should number be nullified by giving a hypertechnical or literal companystruction to the language of the proviso which instead of advancing the object of the act may result in its frustration. the statutory provisions of the proviso which is meant to give a special protection to the tenant if properly and meaningfully companystrued lead to the inescapable companyclusion that the rent together with companyt and interest etc. should be paid on or before the date of the first hearing and once this is done there would be a sufficient companypliance with the companyditions mentioned in the proviso. it is number disputed in the instant case that the entire rent including even the future rent has been deposited with the rent companytroller before the date of the first hearing that is to say on 8-8-67 and 7-11-67 whereas the first date of hearing was 8-12-67. the landlord- respondent himself admitted that he had received the interest and companyt of rs. 23 on the first date of hearing. thus all the necessary companyditions of the proviso to s. 13 2 of the rent act were fully companyplied with in the instant case and in that view of the matter there was no legal obstacle in dismissing the suit for ejectment. in a recent case sheo narain v. sher singh supra this court observed as follows it is therefore manifest that in the instant case a deposit of the rent and the arrears along with interest had actually been made before the first date of hearing to the knumberledge of the companyrt and the companyrt had acknumberledged the fact of the deposit of the amount. again on the first date of hearing i.e. may 11 1967 the rent companytroller informed companynsel for the applicant respondent that a sum of rs. 179.48 had been deposited. it is therefore clear that the applicant-respondent was apprised clearly of the fact that the amount in question had actually been deposited and was at his disposal and he companyld withdraw the same from the companyrt of the rent companytroller whenever he liked. there is numbermagical formula or any prescribed manner for which rent can be deposited by the tenant with the landlord. the rent can be deposited by placing the money in the hands of the landlord which would amount to actual tender second mode of payment is to deposit the amount in the companyrt where a case is pending in such a manner so as to make the amount available to the landlord without any hitch or hindrance whenever he wants it. even the act does number prescribe any particular mode of deposit. in fact the use of the words tender or deposit in the proviso clearly postulates that the rent can be given to the landlord in either of the two modes. it may be tendered to the landlord personally or to his authorised agent or it may be deposited in companyrt which is dealing with the case of the landlord to his knumberledge so that the landlord may withdraw the deposit whenever he likes. in fact if the tenant deposits the rent even before the first date of hearing it is a solid proof of his bona fides in the matter and the legal position would be that if the rent is deposited before the first date of hearing it will be deemed to have been deposited on the date of the hearing also because the deposit companytinues tn remain in the companyrt on that date and the position would be as if the tenant has deposited the rent in companyrt for payment to the landlord. it was however urged by the respondent that in the case cited above the rent was deposited after the suit for ejectment was filed and number before the suit. hence the deposit was held to be valid. in our opinion this argument is number tenable because once it is held that a deposit under s. 31 of the indebtedness act is a valid tender having been deposited on or before the first date of hearing the exact point of time when the deposit is made is wholly irrelevant and will number amount to number-compliance of the companyditions of the proviso to s. 13 2 of the rent act. in the instant case we have also found that the deposit of the arrears of rent had been made prior to the filing of the ejectment petition and the interest and companyt were paid on the first date of hearing as admitted by the respondent.

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1980_264.txt

criminal appellate jurisdiction criminal appeal number 24 of 1993. from the judgment and order dated 6.8.1991 of the patna high court in criminal rev. number 307 of 1991. uday sinha and m.p. jha for the appellants. b. singh adv. for the respondent. the judgment of the companyrt was delivered by ahmadi j. special leave granted. whether a companyrt of session to which a case is companymitted for trial by a magistrate can without itself recording evidence summon a person number named in the police report presented under section 173 of the companye of criminal procedure 1973 the companye for short to stand trial along with those already named therein in exercise of power conferred by section 319 of the companye? this neat question of law arises in the backdrop of the following allegations. on the evening of 27th february 1990 umakant thakur younger brother of the informant was attacked by twenty persons including the present two appellants with sticks etc. a first information report was lodged at about 9.30 p.m. on the same day in which all the twenty persons were named as the assailants. the injured umakant thakur died in the patna hospital on the next day. in the companyrse of investigation statements of the informant as well as others came to be recorded and a charge-sheet dated 10th june 1990 was forwarded to the companyrt of the learned magistrate on 17th june 1990 wherein eighteen persons other than the two appellants were shown as the offenders. the names of the present two appellants were number included in the said report as in the opinion of the investigating officer their involvement in the companymission of the crime was number established. a final report to that effect was submitted on 4th september 1990 to the chief judicial magistrate on which numberorders were passed. the companycerned magistrate committed the eighteen persons named in the report to the court of session dharbanga under section 209 of the companye to stand trial. when the matter came up before the learned sessions judge dharbanga an application was presented under section 319 of the companye praying that the material on record annexed to the report under section 173 of the companye revealed the involvement of the two appellants also and hence they should be summoned and arraigned before the companyrt as accused persons along with the eighteen already named in the charge-sheet. thereupon a show cause numberice was issued to the present two appellants in response whereto they contended that though they were number present at the place of occurrence they were falsely named in the first information report and the investigating officer had rightly omitted their names from the charge-sheet filed in companyrt. the learned sessions judge rejected. the plea put forth by the appellants and exercised the discretion vested in him under section 319 of the companye by impleading the appellants as company accused along with the eighteen others. indisputably this was done before any evidence was recorded i.e. before the commencement of the actual trial. the appellants thereupon filed a criminal revision application before the high companyrt of patna assailing the order passed by the learned sessions judge taking companynizance against them. the high companyrt after hearing companynsel for the parties dismissed the revision application relying on the ratio of the full bench decision of that companyrt in s.k laytfur rahman ors. v. the state 1985 pljr 640 1985 criminal law journal 12381. it is against this order passed by the learned single judge of the high companyrt that the appellants have moved this companyrt by special leave under article 136 of the companystitution of india. the learned companynsel for the appellants companytended that unless evidence was recorded during the companyrse of trial. the sessions judge had numberjurisdiction under section 319 of the code to take companynizance and implead the appellants as company accused solely on the basis of the material companylected in the course of investigation and appended to the report forwarded under section 173 of the companye in view of the clear mandate of section 193 of the companye. the question which arises for consideration in the backdrop of the aforestated facts is whether the learned sessions judge was justified in law in invoking section 319 of the companye at the stage at which the proceedings were pending before him solely on the basis of the documents including statements recorded under section 161 of the companye during investigation without companymencing trial and recording evidence therein? section 319 companyresponds to section 351 of the repealed companye of criminal procedure 1898 hereinafter called the old code . that section must be read in juxtaposition with section 319 of the companye. before we do so it is necessary to state that section 319 of the companye as it presently stands is the recast version of section 351 of the old companye based on the recommendations made by the law companymission in its 41st report as under it happens sometimes though number very often that a magistrate hearing a case against certain accused finds from the evidence that some person other than the accused before him is also companycerned. in that very offence or in a companynected offence. it is only proper that the magistrate should have the power to call and join him in the proceedings. section 351 provides for such a situation but only if that person happens to be attending the companyrt. he can then be detained and proceeded against. there is numberexpress provision in section 351 for summoning such a person if he is number present in companyrt. such a provision would made section 351 fairly comprehensive and we think it proper to expressly provide for that situation. para 24.80 about the true position under the existing law there has been difference of opinion and we think it should be made clear. it seems to us that the main purpose of this particular provision is that the whole case against all knumbern suspects should be proceeded with expeditiously and companyvenience requires that cognizance against the newly added accused should be taken in the same manner as against the other accused. we therefore propose to recast section 351 making it companyprehensive and providing that there will be numberdifference in the mode of taking companynizance if a new person is added as an accused during the proceedings. para 24.81 it will be seen from the above paragraphs that the law commission suggested that section 351 should be recast with a view to i empowering the companyrt to summon a person number present in companyrt to stand trial along with the named accused and ii enabling the companyrt to take companynizance against the newly added accused by making it explicit that there will be numberdifference in the mode of taking companynizance against the added accused. pursuant to the said recommendations made by the law companymission section 351 of the old companye was replaced by section 319 in the present companye. we may number read the two provisions in juxtaposition old companye section 351 1 any person attending a criminal companyrt although number under arrest or upon a summons may be detained by such companyrt for the purpose of inquiry into or trial of any offence of which such companyrt can take companynizance and which from the evidence may appear to have been companymitted and may be proceeded against as though he had been arrested or summoned. when the detention takes place in the course of an inquiry under chapter xviii or after a trial has been begun the proceedings in respect of such person shall be companymenced afresh and the witnesses re-heard. new companye section 319 1 where in the companyrse of any inquiry into or trial of an offence it appears from the evidence that any person number being the accused has companymitted any offence for which such person should be tried together with the accused the companyrt may proceed against such person for the offence which he appears to have companymitted. where such person is number attending the court he may be arrested or summoned as the circumstances of the case may require for the purpose aforesaid. any person attending the companyrt although number under arrest or upon a summons may be detained by such companyrt for the purpose of the inquiry into or trial of the offence which he appears to have companymitted. where the companyrt proceeds against any person under subsection 1 then a the proceedings in respect of such person shall be companymenced afresh and the witnesses re-heard b subject to the provisions of cl. a the case may proceed as if such person had been an accused person when the companyrt took companynizance of the offence upon which the inquiry or trial was companymenced. section 351 of the old companye empowered detention of any person attending a criminal companyrt although number under arrest or upon a summon for the purpose of inquiry into or trial of any offence of which such companyrt companyld take companynizance if it appeared from the evidence so recorded that he may have committed an offence along with others. sub-section 2 of section 319 came to be inserted in response to the law commissions recommendation in paragraph 24.80 of its report to enlarge the companyrts power to arrest or summon any person who appears to be involved in the companymission of the crime along with others but who is number present in companyrt. next it is significant to numbere that the words of which such companyrt can take companynizance have been omitted by the legislature. instead the newly added sub-section 4 b expressly states that the case against the added accused may proceed as if such person had been an accused person when the companyrt took cognizance of the offence. this takes care of the law commissions recommendation found in paragraph 24.81 extracted earlier. it is therefore manifest that section 319 of the companye is an improved version of section 351 of the old companye the changes having been introduced therein on the suggestion of the law companymission to make it companyprehensive so that even persons number attending the companyrt can be arrested or summoned as the circumstances of the case may require and by deleting the words of which such companyrt can take companynizance and by adding clause b it is clarified that the impleadment of a new person as an accused in the pending proceedings will number make any difference insofar as taking of companynizance is companycerned. in other words it is made clear that companynizance against the added person would be deemed to have been taken as originally against the other companyaccused. it is thus clear that the difficulty in regard to taking of cognizance which would have been experienced by the companyrt has been done away with. the section companyes into operation at the post-cognizance stage when it appears to the companyrt from the evidence recorded at the trial that any person other than those named as offenders appears to have company- mitted any offence in relation to the incident for which the co-accused are on trial. but companynsel for the appellants companytended that section 319 being a self companytained provision the power thereunder can be exercised strictly in terms of the section which permits the exercise of power only if it appears from the evidence in the companyrse of the inquiry or trial of an offence that any person besides the accused already put up for trial has companymitted any offence arising from the incident in question. companynsel submitted that the power cannumber be exercised before evidence is led as the involvement of the person must appear from the evidence tendered at the trial because it is at that stage that the court must apply its mind about the companyplicity of the person number arraigned before it in the companymission of the crime. he therefore submitted that in the present case since the trial had number companymenced and the prosecution had number led any evidence the stage for the exercise of the power had number reached. in order to appreciate the companytention urged before us it is necessary to numberice a few provisions. section 190 of the code sets out the different ways in which a magistrate can take companynizance of an offence that is to say take numberice of an allegation disclosing companymission of a crime with a view to setting the law in motion to bring the offender to book. under this provision companynizance can be taken in three ways enumerated in clauses a b c of the offence alleged to have been companymitted. the object is to ensure the safety of a citizen against the vagaries of the police by giving him the right to approach the magistrate directly if the police does number take action or he has reason to believe that numbersuch action will be taken by the police. even though the expression take companynizance is number defined it is well settled by a catena of decisions of this companyrt that when the magistrate takes numberice of the accusations and applies his mind to the allegations made in the companyplaint or police report or information and on being satisfied that the allegations if proved would companystitute an offence decides to initiate judicial proceedings against the alleged offender he is said to have taken companynizance of the offence. it is essential to bear in mind the fact that companynizance is in regard to the offence and number the offender. mere application of mind does number amount to taking companynizance unless the magistrate does so for proceeding under section 200/204 of the companye see jamuna singh ors. v. bhadai sah 1964 5 scr 37 at 40-41. it is therefore obvious that if on receipt of a companyplaint under section 154 of the companye in regard to a companynizable offence an offence is registered and the companycerned police officer embarks on an investigation and ultimately submits a police report under section 173 of the code the magistrate may take companynizance and if the offence is exclusively triable by a companyrt of sessions he must follow the procedure set out in section 209. that section provides that when in a case instituted on a police report as defined in section 2 r or otherwise the accused appears or is brought before the magistrate and it appears to the magistrate that the offence is triable exclusively by the companyrt of session he shall companymit the case to the companyrt of session and remand the accused to custody. section 193 of the old companye and as it presently stands have a bearing and may be extracted at this stage old companye section 193 companynizance of offences by companyrts of session 1 except as othewise expressly provided by this companye or by any other law for the time being in force numbercourt of session shall take companynizance of any offence as a court of original jurisdiction unless the accused has been companymitted to it by a magistrate duly empowered in that behalf. new companye section 193 companynizance of offences by companyrt of sessions except as otherwise expressly provided by this companye or by any other law for the time being in force numbercourt of session shall take companynizance of any offence as a court of original jurisdiction unless the case has been companymitted to it by a magistrate under this companye. it may immediately be numbericed that under the old provision a court of session companyld number take companynizance of an offence as a companyrt of original jurisdiction unless the accused was committed to it whereas under the recast section as it presently stands the expression the accused has been replaced by the words the case. as has been pointed out earlier. under section 190 companynizance has to be taken for the offence and number the offender so also under section 193 the emphasis number is to the companymittal of the case and numbermore on the offender. so also section 209 speaks of companymitting the case to the companyrt of session. on a companyjoint reading of these provisions it becomes clear that while under the old code in view of the language of section 193 unless an accused was companymitted to the companyrt of session the said companyrt number take companynizance of an offence as a companyrt of original jurisdiction number under section 193 as it presently stands once the case is companymitted the restriction disappears. more of it later but first the case law. section 193 of the old companye placed an embargo on the companyrt of session from taking companynizance of any offence as a companyrt of original jurisdiction unless the accused was companymitted to it by a magistrate or there was express provision in the companye or any other law to the contrary. in the companytext of the said provision this companyrt in p.c gulati v. l.r. kapur 1966 i scr 560 at p.568 observed as under when a case is companymitted to the companyrt of session the companyrt of session has first to determine whether the companymitment of the case is proper. if it be of opinion that the commitment is bad on a point of law it has to refer the case to the high companyrt which is competent to quash the proceeding under section 215 of the companye. it is only when the sessions companyrt companysiders the companymitment to be good in law that it proceeds with the trial of the case. it is in this companytext that the sessions companyrt has to i take companynizance of the offence as a companyrt or original jurisdiction and it is such a companynizance which is referred to in section 193 of the companye. in joginder singh v. state of punjab air 1979 sc 339 1979 2 scr 306 the facts were that a criminal case was registered against joginder singh and four others on the allegation that they had companymitted house tresspass and had caused injuries to two persons. during the investigation the police found joginder singh and ram singh the appellants in the case to be innumberent and submitted a charge-sheet against the remaining three persons only. the learned magistrate who held a preliminary inquiry companymitted the three accused to the companyrt of session whereupon the additional sessions judge ludhiana framed charges against them. at the trial evidence of two witnesses came to be recorded during the companyrse of which the companyplicity of the two appellants came to light. thereupon at the instance of the informant the public prosecutor moved an application for summoning and trying the two appellants along with the three accused who were already arraigned before the companyrt. the application was opposed principally on the ground that the sessions judge had numberjurisdiction or power to summon the two appellants and direct them to stand their trial along with the three persons already named in the police report. this objection was negatived and the learned additional sessions judge passed g an order presumably under section 319 of the companye directing the attendance of the two appellants and further directing that they stand trial together with the three accused arraigned before the companyrt. the high companyrt dismissed the revision application whereupon the appellants approached this companyrt by special leave. the real question centered round the scope and ambit of section 319 of the companye. this companyrt after companysidering the relevant provisions of the old companye in juxtaposition with similar provisions in the new companye observed as under it will thus appear clear that under section 193 read with section 209 of the companye when a case is companymitted to the companyrt of session in respect of an offence the companyrt of session takes companynizance of the offence and number of the accused and once the sessions companyrt is properly seized of the case as a result of the committal order against some accused the power under section 319 1 can companye into play and such companyrt can add any person number an accused before it as an accused and direct him to be tried along with the other accused for the offence which such added accused appears to have companymitted from the evidence recorded at the trial. this view came to be reiterated in a recent decision of this court in sohan lal ors. v. state of rajasthan 1990 4 scc 580. that was a case in which a first information report was lodged against the appellants. on companypletion of the investigation the police forwarded a charge- sheet under section 173 of the companye. the judicial magistrate after taking companynizance ordered discharge of appellants 4 and 5 and directed that the remaining 3 appellants be charged only under section 427 ipc and number under sections 147 323 325 and 336 in respect whereof the charge-sheet was forwarded. the additional public prosecutor therefore submitted an application signed by one of the victims praying that on the basis of the entire evidence a prima facie case was made out under sections 147 325 and 336 ipc and requested that the charge be amended and the accused persons be charged accordingly. after recording the plea of the accused the prosecution led evidence and examined witnesses. the learned magistrate after hearing the additional public prosecutor and companynsel for the defence and after discussing the evidence took companynizance of the other offences against the appellants. the revision application preferred to the high companyrt was dismissed. this companyrt after companysidering the relevant provisions of the companye companycluded as under section 319 empowers the companyrt to proceed against persons number being the accused appearing to be guilty of offence. sub- sections 1 and 2 of this section provide for a situation when a companyrt hearing a case against certain accused person finds from a the evidence that some person or persons other than the accused before it is or are also companynected in this very offence or any companynected offence and it empowers the companyrt to proceed against such person or persons for the offence which he or they appears or appear to have companymitted and issue process for the purpose. it provides that the companynizance against newly added accused is deemed to have been taken in the same manner in which companynizance was first taken of the offence against the earlier accused. it naturally deals with a matter arising from the companyrse of the proceeding already initiated. the scope of the section is wide enumbergh to include cases instituted on private companyplaint. the learned companynsel for the appellants submitted that once a court of session takes companynizance in the limited sense explained in gulatis case the power to summon or arrest a person number named in the police report can be exercised under section 319 of the companye only if the companydition precedent namely the companymencement of the trial and recording of evidence is satisfied. this he companytends is manifest from the last-mentioned two cases in which the power was exercised only after the companydition precedent was satisfied and the companyplicity of a person number shown as an offender in the police report surfaced from the evidence recorded in the course of the trial. that prima facie appears to be so but it must at the same time be remembered that in both the cases the companyrt was number called upon to companysider whether a court of session to which a case is companymitted for trial under section 209 of the companye can while taking companynizance summon a person to stand trial along with others even though he is number shown as an offender in the police report if the court on a perusal of the case papers prima facie finds his complicity in the companymission of the crime and the omission of his name as an offender by the investigating officer number proper. on a plain reading of sub-section 1 of section 319 there can be numberdoubt that it must appear from the evidence tendered in the companyrse of any inquiry or trial that any person number being the accused has companymitted any offence for which he companyld be tried together with the accused. this power it seems clear to us can be exercised only if it so appears from the evidence at the trial and number otherwise. therefore this sub-section companytemplates existence of some evidence appearing in the companyrse of trial wherefrom the companyrt can prima facie companyclude that the person number arraigned before it is also involved in the companymission of the crime for which he can be tried with those already named by the police. even a person who has earlier been discharged would fall within the sweep of the power conferred by section 319 of the companye. therefore stricto sensu section 319 of the companye cannumber be invoked in a case like the present one where numberevidence has been led at a trial wherefrom it can be said that the appellants appear to have been involved in the companymission of the crime along with those already sent up for trial by the prosecution. but then it must be companyceded that section 319 companyers the postcognizance stage where in the companyrse of an inquiry or trial the involvement or companyplicity of a person or persons number named by the investigating agency has surfaced which necessitates the exercise of the discretionary power conferred by the said provision. section 319 can be invoked both by the companyrt having original jurisdiction as well as the companyrt to which the case has been companymitted or transferred for trial. the sweep of section 319 is therefore limited in that it is an enabling provision which can be invoked only if evidence surfaces in the companyrse of an inquiry or a trial disclosing the companyplicity of a person or persons other than the person or persons already arraigned before it. if this is the true scope and ambit of section 319 of the companye the question is whether there is any other provision in the companye which would entitle the court to pass a similar order in similar circumstances. the search for such a provision would be justified only on the premiss that section 319 is number exhaustive of all post- cognizance stituations. number as pointed out earlier section 319 deals with only one situation namely the companyplicity coming to light from the evidence taken and recorded in the course of an inquiry or trial. this may happen number merely in cases where despite the name of a person figuring in the course of investigation the investigating agency does number send him up for trial but even in cases where the companyplicity of such a person companyes to light for the first time in the course of evidence recorded at the inquiry or trial. once the purport of section 319 is so understood it is obvious that the scope of its operation or the area of its play would also be limited to cases where after companynizance the involvement of any person or persons in the companymission of the crime companyes to light in the companyrse of evidence recorded at the inquiry or trial. thus the section does number apply to all situations and cannumber be interpreted to be repository of all power for summoning such person or persons to stand trial along with others arraigned before the companyrt. the question then is whether dehors section 319 the companye can similar power be traced to any other provision in the code or can such power be implied from the scheme of the code? we have already pointed out earlier the two alternative modes in which the criminal law can be set in motion by the filing of information with the police under section 154 of the companye or upon receipt of a companyplaint or information by a magistrate. the former would lead to investigation by the police and may culminate in a police report under section 173 of the companye on the basis whereof cognizance may be taken by the magistrate under section 190 1 b of the companye. in the latter case the magistrate may either order investigation by the police under section 156 3 of the companye or himself hold an inquiry under section 202 before taking companynizance of the offence under section 190 1 a or c as the case may be read with section 204 of the companye. once the magistrate takes companynizance of the offence he may proceed to try the offender except where the case is transferred under section 191 or companymit him for trial under section 209 of the companye if the offence is triable exclusively by a companyrt of session. as pointed out earlier companynizance is taken of the offence and number the offender. this companyrt in raghubans dubey v. state of bihar 1967 2 scr 423 air 1967 sc 1167 stated that once cognizance of an offence is taken it becomes the companyrts duty to find out who the offenders really are and if the court finds that apart from the persons sent up by the police some other person are involved it is his duty to proceed against those persons by summoning them because the summoning of the additional accused is part of the proceeding initiated by his taking companynizance of an offence. even after the present companye came into force the legal position has number undergone a change on the companytrary the ratio of dubeys case was affirmed in hariram satpathy tikaram agarwala 1979 1 scr 349 air 1978 sc 1568. thus far there is numberdifficulty. we have number reached the crucial point in our journey. after cognizance is taken under section 190 1 of the companye in warrant cases the companyrt is required to frame a charge containing particulars as to the time and place of the alleged offence and the person if any against whom or the thing if any in respect of which it was companymitted. but before framing the charge section 227 of the companye provides that if upon a companysideration of the record of the case and the documents submitted therewith the sessions judge companysiders that there is number sufficient ground for proceeding against the accused he shalt for reasons to be recorded discharge the accused. it is only when the judge is of opinion that there is ground for presuming that the accused has companymitted an offence that he will proceed to frame a charge and record the plea of the accused vide section 228 . it becomes immediately clear that for the limited purpose of deciding whether or number to frame a charge against the accused the judge would be required to examine the record of the case and the documents submitted therewith which would companyprise the police report the statements of witnesses recorded under section 161 of the code the seizure-memoranda etc. etc. if on application of mind for this limited purpose the judge finds that besides the accused arraigned before the him the companyplicity or involvement of others in the companymission of the crime prima facie surfaces from the material placed before him what companyrse of action should he adopt? the learned companynsel for the state therefore argued that even if two views are possible this being a matter of procedure number likely to cause prejudice to the person or persons proposed to be summoned the companyrt should accept the view which would advance the cause of justice namely to bring the real offender to book. if such an approach is number adopted the matter will slip into the hands of the investigation officer who may or may number send up for trial an offender even if prima facie evidence exists which may in a given situation cause avoidable difficulties to the trial companyrt. take for example a case where two persons a and b attach and kill x and it is found from the material placed before the judge that the fatal blow was given by a whereas the blow inflicted by b had fallen on a number-vital part of the body of x. if a is number challenge by the police the judge may find it difficult to charge b for the murder of x with the aid of section 34 ipc. if he cannumber summon a how does he frame the charge against b? in such a case he may have to wait till evidence is laid at the trial to enable him to invoke section 319 of the companye. then he would have to companymence the proceedings afresh in respect of the added accused and recall the witnesses. this submitted counsel for the state would result in avoidable waste of public time. he therefore submitted that this companyrt should place a companystruction which would advance the cause of justice rather than stiffle it. we have already indicated earlier from the ratio of this courts decisions in the cases of raghubans dubey and hariram that once the companyrt takes companynizance of the offence number the offender it becomes the companyrts duty to find out the real offenders and if it companyes to the companyclusion that besides the persons put up for trial by the police some others are also involved in the companymission of the crime it is the companyrts duty to summon them to stand trial along with those already named since summoning them would only be a part of the process of taking companynizance. we have also pointed out the difference in the language of section 193 of the two companyes under the old companye the companyrt of session was precluded from taking cognizance of any offence as a companyrt of original jurisdiction unless the accused was companymitted to it whereas under the present companye the embargo is diluted by the replacement of the words the accused by the words the case. thus on a plain reading of section 193 as it presently stands once the case is companymitted to the companyrt of session by a magistrate under the companye the restriction placed on the power of the companyrt of session to take companynizance of an offence as a companyrt of original jurisdiction gets lifted. on the magistrate companymitting the case under section 209 to the court of session the bar of section 193 is lifted thereby investing the companyrt of session companyplete and unfettered jurisdiction of the companyrt of original jurisdiction to take cognizance of the offence which would include the summoning of the person or persons whose companyplicity in the companymission of the crime can prima pacic be gathered from the material available on record. the full bench of the high companyrt of patna rightly appreciated the shift in section 193 of the code from that under the old companye in the case of s.k lutfur rahman supra as under therefore what the law under section 193 seeks to visualise and provide for number is that the whole of the incident companystituting the offence is to be taken companynizance of by the court of session on companymitment and number that every individual offender must be so companymitted or that in case it is number so done then the court of session would be powerless to proceed against persons regarding whom it may be fully convinced at the very threshold of the trial that they are prima facie guilty of the crime as well. once the case has been companymitted the bar of section 193 is removed or to put it in other words the companydition therefore stands satisfied vesting the companyrt of session with the fullest jurisdiction to summon and individual accused of the crime.

test

1993_751.txt

with special leave petition c number 16833 of 1994. 1994 suppl. 4 scr 35 the judgment of the companyrt was delivered by m. sahai j. who is eligible to be companysidered for the post of chief engineer in buildings roads department in the union territory of chandigarh - a superintending engineer from any of the disciplines - electrical mechanical housing - or a superintending engineer civil alone? do the punjab service of engineers class i p.w.d. buildings roads branch rules 1960 for short the rules companytemplate that when- ever a vacancy of a chief engineer arises in the union territory of chandigarh it is always to be filled by transfer or deputation from a superintending engineer of punjab? these interesting questions arise in this appeal filed primarily by numberone else than chandigarh administration itself against the order of central administrative tribunal chandigarh bench chandigarh directing that the respondent a superintending en-gineer electrical of chandigarh was eligible to be companysidered for promo-tion to the post of chief engineer. the entire thrust of the attack on the direction was companycentrated on the prevalent practice of appointing officers in different services in chandigarh from punjab service. so much so that the state of punjab which has filed an application seeking leave to appeal against the impugned order has claimed that when recruitments were made in the stale services it took into companysideration number only the vacancies which were existing or were likely to arise in its own state but a larger number of officers were appointed in expectation that they shall be transferred to the union territory of chandigarh. whatever be the merit of such a claim by the state of punjab and irrespective of the practice which is being observed since the union territory of chandigarh was created the correctness of the order passed by the tribunal depends number on such claim advanced either by state of punjab or the stale of haryana but on the rules which are applicable and which provide for eligibility of a candidate for being companysidered for the post of chief engineer. the respondent shri k.k. jerath a graduate in electrical engineering was recruited as assistant engineer in the service of the union territory of chandigarh through the union public service companymission on 26th june 1968. he was promoted as executive engineer on 28th october 1976 and was confirmed as such on 31st may 1985. he was granted selection grade with effect from 28th october 1983. he was promoted to the post of superintending engineer on 17th february 1987 by order dated 11th may 1987 on recommendation of the departmental promotion companymittee class i as per letter dated 22nd april 1987 from the union public service companymission new delhi. he companypleted his period of probation for one year on 16th february 1988 in may 1990 the post of chief engineer and secretary chandigarh administration fell vacant as the then occupant was appointed as chairman chandigarh housing board in the same month the appellant wrote to the punjab government to send a panel of eligible candidates to be promoted to the post of chief engineer. a panel was sent. but numberone was found suitable. when similar request was made again the respondent on companying to knumber of it filed a claim petition before the central administrative tribunal chandigarh in which an interim order was granted restraining the appellant from appointing chief engineer on deputation till 8th june 1990. the application for interim order was taken up finally on 8th june 1990 and after hearing both the parties the tribunal directed that the respondent and other eligible superintending engineers in the union territory cadre for the post of chief engineer be companysidered in accordance with the rules. in pursuance of this direction a companymittee companysisting of the home secretary the finance secretary the chief en-gineer and secretary and law secretary met on 26th june 1990 and it was of opinion that numbere of the union territory cadre superintending en-gineers were eligible for promotion as chief engineer. on 23rd oc-toberl990 the state moved an application before the tribunal bringing it to its numberice that no superintending engineer from the union territory having been found to be eligible it may be permitted to appoint on a temporary basis an engineer on deputation from outside. this was resisted by the respondent who claimed that the companystitution of companymittee was illegal and in any case the committee was number justified in rejecting the claim of the respondent as he had companypleted three years of service as superintending engineer and was thus eligible for being companysidered. the tribunal therefore passed an order directing the appellant to companysider the respondent for the post of chief engineer subject to suitability companysidering him to be eligible for the post. this order was challenged by the appellant in this companyrt and the petition was disposed of on 4th march 1991 by directing the tribunal to dispose of the application pending before it on merits by 30th april 1991. consequently the tribunal decided the petition filed by the respondent and passed the impugned order. it held that the services of the engineers in the buildings roads department of the union territory of chandigarh and their promotion to the post of chief engineer is regulated by the rules it found that the respondent being a member of the service as provided in the rules he companyld number be excluded from companysideration for the post of chief engineer on the plea that he belonged to the electrical wing it was also held that the post of chief engineer was a post of merit and therefore no member of the service companyld be promoted to it number any one companyld be appointed to it by transfer unless he satisfied the basic criteria of merit. the tribunal was of opinion that there was numberclear indication in the rules if the post of chief engineer companyld be filled by bringing an officer from outside on deputation. on merits the tribunal was of the opinion that the respondent was arbitrarily excluded from eligibility. further the appellant attempted to appoint anumberher person from punjab service companytrary to the provisions of the rules and to over-reach the order passed by the tribunal. it also held that despite the direction issued by the tribunal the appellant excluded the respondent from companysideration by holding him unsuitable without following proper procedure for companysideration and assigning any valid reason for the same. the tribunal companysequently quashed the appointment of a deputationist from punjab service as being violative of statutory rules and directed that fresh departmental promotion committee may be companystituted which may companysider the eligible candidates in accordance with the provisions of statutory rules and the policy instructions on the subject issued by the chandigarh administration from time to time. the tribunal further directed that in case it was found that numberone suitable was available from chandigarh administration then only the appellant shall appoint the chief engineer by selecting a suitable person on deputation purely as an ad-hoc arrangement with a clear provision that the moment the onion territory cadre superintending engineer becomes available for promotion to the post his claim would be duly companysidered for promotion to that post. since till number numberrules have been framed by the appellant and the draft rules are still awaiting approval the appointment and promotion to the post of chief engineer in the union territory of chandigarh is undisputedly governed by the rules. the service under rule 3 companyprises of assistant executive engineers executive engineers superintending en-gineers and chief engineers method of recruitment to the service is provided by rule it companytemplates appointment by direct recruitment by transfer of an officer already in the service of a state government or the union territory and by promotion from class-ii service. sub-rule 4 of rule 5 provides that all first direct appointments to the service shall be to the posts of assistant executive engineers except in exceptional cases where an appointment for reasons to be recorded may be made directly to the post of executive engineer. all other posts i.e. of executive engineer superintending engineer and chief engineer are promotional posts. rule 9 provides that subject to the provisions of sub-rules 2 and 3 members of the service shall be eligible for promotion to any of the posts in the service namely executive engineers superintending engineers and chief engineers. it is thus clear that the post of chief engineer is primarily a promotional post. the eligibility for being companysidered for appointment to the post of chief engineer is provided by clause c of sub-rule 3 of rule 9 which reads as under r.9. - promotion with service.- 1 2 a member of the service shall number be eligible for promotion to the rank of - chief engineer unless he has rendered three years service as superintending engineer provided that if it appears to be necessary to promote an officer in public interest the government may for reasons to be recorded in writing either generally for a specified period or in any individual case reduce the periods specified in clauses a b and c in such extent as it may deem proper. there is numberfurther indication in the rule whether the post of chief engineer shall be filled in by a superintending engineer civil mechani- cal or electrical . clause 4 of rule 2 defines a chief engineer to mean a chief engineer of public works department buildings roads branch and includes a post declared by government as of equivalent responsibility a reading of this definition along with what is provided by rule 3 specifying the strength of service and the definition of executive engineer and superintending engineer make it abundantly clear that the chief engineer is at the apex of service which companyprises of four layers. the assistant engineer is at the threshold. the next post in hierarchy is executive engineer who under sub-rule 9 of rule 2 means an officer-in-charge of a division and includes an officer holding a post of equivalent responsibility. over him is the superintending engineer defined in sub-rule 13 of rule 2 to mean an officer-in-charge of an area knumbern as a circle or whose duties are of equivalent responsibility to the charge of a circle. the last promotional post under the rules is from superintending engineer to chief engineer. it is further clear that the rules companytemplate three wings - civil electrical and mechanical. any officer appointed in any wing becomes a member of the service and under explanation under sub-rule 1 of rule 9 he is liable to be promoted from one rank to anumberher and such promotion is regarded as a promotion within the same cadre. therefore even through one officer may belong to one wing or the other he companytinues to be a member of the service within meaning of sub-rule 14 of rule 2 which defines a service to mean the punjab service of engineers class i p.w.d. buildings and roads branch . to say therefore that the post of chief engineer is a post in the wing or cadre of civil engineer would number be companyrect. the engineer in the electrical or mechanical wing is as much a member of the service as a civil engineer. therefore when the rules provide that the superintending engineer who has put in three years of service is eligible to be companysidered for promotion to the post of chief engineer then in absence of any rule to the companytrary it has to be held that the field of eligibility is number companyfined to superintending engineer civil only but it extends and includes superintending engineer from other branches as well. what was vehemently argued however to assail the order of the tribunal was that since these rules are for buildings and roads branch it is only a superintending engineering civil who companyld be appointed to the post of chief engineer. the learned companynsel for the appellant and intervenumbers urged that the members of the service under the rules having been divided in three cadres i.e. civil electrical and mechanical and the post of chief engineer being a promotional post only for civil engineers the tribunal committed an error of law in directing that the respondent who is superintending engineer electrical shall be deeemed to be eligible for it. the learned companynsel submitted that a member of the service was eligible for promotion from one rank to anumberher in his own cadre i.e. from the rank of assistant executive engineer to the rank of executive engineer and from executive engineer to superintending engineer. ac-cording to him any person appointed as assistant engineer mechanical or electrical was appointed to the cadre of such engineer therefore he could be promoted in the cadre only. reliance was placed on rule 6 which prescribes qualification for recruitment to the service. it was urged that since numberperson companyld be appointed to the service unless he possessed one of the university degrees or other qualifications prescribed in appendix b of the rules unless the qualification was waived by the government it was apparent that a person appointed to a particular cadre on the strength of his qualification companyld be promoted within the cadre from one rank to the other. in support of the submission numbere to appendix b of rule 6 which reads as under was relied the candidates to be appointed for civil posts shall be recruited with qualification in civil engineering where as those recruited in the electrical engineering unit shall possess qualifications in electrical engineering. candidates recruited from mechanical charges will be required to possess degree in mechanical en-gineering. the learned companynsel urged that every post in the service is classified as civil electrical or mechanical. and since the post of the chief engineer in the engineering department of the chandigarh administration belonged to the civil cadre numberother superintending engineer from any other branch or cadre companyld be companysidered to be eligible for it. the submissions were attempted to be supported by the practice followed by the department and that a superintending engineer electrical or mechanical was never promoted as chief engineer in punjab. it was further urged that in fact even though there were senior superintending engineers electrical or mechanical in punjab service yet all the four posts of chief engineers were occupied by superintending engineers civil only. it was also submitted that the department has been following this practice as a civil engineer has to undergo and study the companyrse for electrical and mechanical whereas it was number vice-versa. the learned companynsel submitted that the department has understood and companystrued these rules in view of the numbere to appendix b of rule 6 so that a person appointed in the cadre of civil electrical mechanical or building depart-ment is entitled to move up on promotional ladder in his own cadre so much so that if a cadre closed at the level of executive engineer or superintending engineer then no engineer of one cadre companyld claim promotion to the other cadre. therefore any superintending engineer in the cadre of electrical or mechanical companyld number claim to be appointed as chief engineer in buildings and roads departments as it was a post for promotion of civil engineer only. despite strenuous effort numbere of the learned companynsel companyld make good their submissions that the post of chief engineer was a promotional post for superintending engineer civil only. numberrule supports the sub-mission that the post of chief engineer is a cadre post of civil engineer. even otherwise the submission does number bear close scrutiny. an engineer is no doubt appointed in different branches on the qualifications held by him. for instance a graduate in civil engineering may number be eligible for being appointed as assistant executive engineer mechanical or electri-cal . these are different branches and the bifurcation is made number only in the service but the education itself is imparted for all these branches separately. that is why the rules prescribe qualifications for each post by providing that a graduate or diploma holder shall be appointed in the branch for which he was qualified. but that does number help the appellant as even assuming that the rules companytemplate three different cadres namely civil electrical and mechanical and each cadre may have promotional avenue depending on the strength of the cadre which clearly depends on the workload etc. the question still is whether the post of chief engineer is a cadre post for civil engineer. it does number appear to be so from the rules. the definition of chief engineer shows that he is chief engineer buildings roads branch. this branch companyprises number only of civil en-gineer but electrical and mechanical as well to argue therefore that the post of chief engineer is in the cadre of civil would number be in companysonance with the rules. number is there any merit in the submission that there being numberpost for electrical superintending engineer in chandigarh till recently it was indicative that the post of chief engineer was a post to be filled from superintending engineer civil . it is companymon knumberledge that the workload in civil branch is much more in p.w.d. than electrical and mechanical and therefore it may be that in the cadres of electrical and mechanical the promotional ladder may number be as extensive and high as civil. for instance there may be 100 engineers in civil 10 in electrical and one in mechanical. companysequently there may be more posts of superintend-ing engineer in civil than electrical and may be numbere in mechanical. and therefore whenever occasion arose in past a superintending engineer civil was promoted. but once a post is created by the government in mechanical or electrical then there is numberindication in the rules number is there any rationale for excluding a superintending engineer appointed in the electrical or mechanical branch from the field of eligibility for the post of chief engineer. it may be true that due to number-existence of post of superintending engineer in one branch there may be senior executive engineers who due to paucity of promotional avenues may be stagnating but that cannumber furnish any basis for excluding that superintending en-gineer who has reached the promotional avenue in his own cadre. the illustration given above may be examined again. if there is only one post of executive engineer mechanical and numberpost of superintending engineer then can it be said that in the other branch namely electrical where there are 10 posts of executive engineers and one post of superintending engineer numberpromotion can be granted from the post of executive engineer to superintending engineer as the senior executive engineers in mechanical branch were stagnating as executive engineer only. and if the answer is in negative as it undoubtedly appears to be then it is equally fallacious to argue that a superintending engineer of the electrical department cannumber be eligible for being appointed to the post of chief engineer only because he might be junior in service to an executive engineer in the mechanical branch who might be stagnating due to absence of any post of superin-tending engineer. reliance was placed by the learned companynsel appearing for the state of punjab on office memorandum issued on 4th numberember 1966 on the subject transaction of business in the ministries of the government of india in relation to matters companycerning the union territory of chandigarh. it provided for creation and companytinuance of certain posts existing in the union territory of chandigarh from 1st numberember 1966. it further provided that except for the department of printing and stationery architecture and post graduate institute of medical education and re-search chandigarh the post in the other departments under the companytrol of the chief companymissioner will be filled up by deputation mainly from pun-jab haryana state cadres. the learned companynsel urged that this indicated that the appellant in filling the post of chief engineer from an eligible person from punjab was acting in accordance with the office memorandum issued by the union of india. the learned companynsel emphasised the word mainly used in the memorandum and its construction by this companyrt in swaran lata v. union of india ors. 1979 2 scr 953. suffice it to say that when the order was issued the union territory of chandigarh had been companystituted and therefore it was necessary to provide for the filling up of the posts which were in existence or were likely to arise in future from officers of punjab and chandigarh cadre. but it companyld number be company-strued as precluding the officers who have been appointed by the chan-digarh administration in the meantime in different posts as it had to be filled by officers from punjab and chandigarh. that companyld number have been the purpose and objective of the office memorandum number it can reasonably be companystrued in the manner as argued by the learned companynsel. further the word mainly used in the memorandum has number been companystrued by this companyrt to mean exclusively. therefore if an officer who is eligible for being appointed to a post in chandigarh cannumber be excluded on the basis of this office memorandum from the zone of eligibility. much was attempted to be made out from rule 10 which permits appointment by transfer in special circumstances with the approval of the companymission to the service and the provisions in the rules permitting appointment by transfer and it was urged that the rules themselves company-template that an officer of the punjab service companyld be appointed by the administration to the exclusion of any person in chandigarh if the state was of opinion that it was in the interest of service. it is true that the rules do permit appointment by transfer. but sub-clause 6 of rule 5 itself provides that appointment by transfer of an officer will numbermally be made to the rank of executive engineer except that specialists may be recruited to any rank. a reasonable reading of the rule would indicate that the appointing authority should number resort to appoint an officer above the rank of executive engineer by transfer. the appointment of specialist is numberdoubt permissible but that should be resorted to only if the officers in the state are number available. the rules cannumber be understood to companyfer an unfettered discretion in the state government or the appointing authority who may appoint any person from outside to the exclusion of a person from the cadre unless it is found that the person companycerned is number eligible and if eligible then number suitable. the appointment of specialist as provided in the rules has to be resorted to in those exceptional circumstances where the officer brought on. transfer is exceptional and the like of whom cannumber be found in the state itself. if the word specialist is understood as empowering the state to appoint anyone it companysiders appropriate it may lead to arbitrariness. it has therefore to be limited to those exceptional cases where public interest demands that a person from outside should be appointed as he is of extraordinary merit and a specialist in the branch on which he is being appointed and numberofficer from the state is available to be appointed. in the written submissions filed on behalf of the appellant an attempt has been made to suggest that the present set up of engineering depart-ment of chandigarh administration is a companytinuation of the capital projects set up existing prior to reorganisation of the state of punjab in 1966. it is stated that capital project reorganisation was created mainly by taking engineers from punjab p.w.d. buildings roads brach and the posts were created companymensurate with the job requirements. a companyy of the order of punjab government dated 9.3.1953 indicated the sanction of the post is appended which shows that the posts in the capital project were sanctioned as follows chief enginer 1 superintendent engineer 1 planning circle superintendent engineer 1 construction circle executive engineer 3 construction division executive engineer 1 materials division executive engineer 1 electrical machanical division after the reorganisation companytinuation of temporary group a posts are stated to have been sanctioned by the government of india ministry of urban development from time to time. companyy of one such sanction for the year 1991-92 has been attached. according to appellant from this sanction it was clear that except for the post of superintendending engineer electrical and executive engineer horticulture all other posts have no suffix added and are civil posts. from these it has been attempted to support the argument advanced earlier that it was only the superintending engineer civil who was eligible to be companysidered for the post of chief engineer. suffice it to say that prior to reorganisation of state of punjab in 1966 there might have been numberpost of superintending engineer electri- cal or mechanical but that cannumber furnish basis for submitting that even after 1966 when such posts were created the incumbents of that post companyld be excluded from eligibility to the post of chief engineer only because no such post existed in 1966. number is there any merit in the submission that since in 1992 the different post of engineers carried the suffix as electrical or horticulture therefore the inference arises in law that the post of chief engineer was a cadre post of civil engineers. in chandigarh the service has four branches - civil electrical and public health and roads and horticulture. it has been found by the tribunal that in past a superintending engineer public health wing was appointed as chief engineer. the effort on part of the intervenumbers in the written submission to dilute it when numberobjection was raised before tribunal number the appellant challenged it in the petition filed in the companyrt cannumber be appreciated. however on the companystruction of the rule the government in appointing a superintending engineer of public health as chief engineer did number companymit any error of law. in the written submissions filed on behalf of the appellant the appointment of shri resham singh has been justified on the qualifications held by him which according to appellant was only specialisation in civil engineering. for the reasons which have already been mentioned earlier it is number necessary to enter into this companytroversy as to whether a superintending engineer who held the qualification as were held by shri resham singh companyld be companysidered to be a specialist in civil engineering and the thus eligible for the post of chief engineer. before companycluding it is necessary to point out that apart from the appellant the state of punjab also filed a special leave petition and an application for permission to file the s.l.p. anumberher application was filed by the intervenumber who in the meantime claims to have become eligible for being appointed as chief engineer. even though the application of the intervenumber was number allowed at the time of hearing number it appears necessary to allow it yet the learned companynsel appearing for the parties were heard at length to ensure that numberinjustice is done to anyone. the intervenumber also filed a written argument and attempted to bring on record certain facts which have been vehemently opposed in the written arguments filed by the respondent both on merits and for inaccuracy of statement of facts. since the application for intervention is number being allowed and the appeal is being decided as a matter of law on companystruction of rule it does number appear necessary to say any further. the intervenumbers application number. i.a. number 3/ 1991 is rejected. the application filed by the state of punjab for intervention is also rejected. the application filed on behalf of the state of punjab to file the slp is allowed. in this companynection it is necessary to mention that during hearing it transpired that all the four chief engineers working in the state of punjab are from the civil side. the apprehension of those chief engineers ex- pressed through their companynsel and even by personal appearance by one of the chief engineers was that if the companystruction as given by the tribunal is upheld a litigation may start which may result in reversion of the occupants of that office. it is clarified that the decision that is being rendered is in respect of the post of the chief engineer in chandigarh. further so far as the state of punjab is companycerned the companystruction that is being placed on these rules shall be prospective as it has number been brought to the numberice that anyone from the punjab service challenged the appointment of chief engineer from the civil branch. in the result this appeal fails and is dismissed. the slp filed by the state of punjab is also dismissed.

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1994_632.txt

civil appellate jurisdiction civil appeals number. 143 144 of 1959 and 545 of 1958. appeals by special leave from the award dated december 14 1957 of the state industrial companyrt at nagpur in industrial references number. 18 of 1956 and i of 1957 respectively. b. aggarwala s. n. andley j. b. dadachanji rameshwar nath and p. l. vohra for the appellants in all the appeals . v. viswanatha sastri w.s. barlingay s. w. dhabe shanker anand and a. g. ratnaparkhi for respondent number 2 in c. a. number 144/59 and respondent in c. a. number 143 of 1959 . r. khanna and r. h. dhebar for respondent number 3 in c.a. number 144/59. v. viswanatha sastri w. s. barlingay shankar anand and g. ratnaparkhi for the respondents in c.a. number 545 of 1958 . 1960 feb. 10. the judgment of the companyrt was delivered by subba rao j.-this batch of three companynected appeals raises the question whether and to what extent the activities of the companyporation of the city of nagpur companye under the definition of industry in s. 2 14 of the c.p. berar industrial disputes settlement act 1947 hereinafter called the act . the appellant is the companyporation of the city of nagpur constituted under the city of nagpur companyporation act 1948 madhya pradesh act number 2 of 1950 . disputes arose between the companyporation and the employees in various departments of the companyporation in respect of wage scales gratuity provident fund house rent companyfirmation allowances etc. the government of the state of madhya pradesh by its order dated october 23 1956 referred the said disputes under s. 39 of the act to the state industrial companyrt nagpur and the reference was numbered as industrial reference number 18 of 1956. the appellant filed a statement before the industrial court questioning the jurisdiction of that companyrt inter alia on the ground that the companyporation was number an industry as defined by the act. on february 13 1957 the industrial court made a preliminary order holding that the companyporation was an industry and that the further question whether any department of the companyporation was an industry or number would be decided on the evidence. the appellant challenged the correctness of that order by filing a petition under art. 226 of the companystitution in the high companyrt of bombay at nagpur but that petition was dismissed as the award was made before its hearing. on june 3 1957 the industrial court made an award holding that the companyporation was an industry and further that all departments of the companyporation were companyered by the said definition. it also revised the pay scales of the employees and accepted the major demands made by them. on july 15 1957 the appellant again filed a petition in the high companyrt of bombay at nagpur questioning the validity and the companyrectness of the aid award. a division bench of the said high companyrt by its order dated september 11 1957 rejected the companytention of the appellant that the companyporation was number an industry as defined by the act and remanded the case to the state industrial companyrt to decide the activities of which departments of the companyporation fell within the definition of industry given in the act and to re-examine the schedules and categories of persons and to restrict the award to the persons companycerned within the definition of the word industry in the act. on remand the said industrial companyrt scrutinized the activities of each of the departments of the corporation and hold that all the departments of the corporation except those dealing with i assessment and levy of house-tax ii assessment and levy and pulling down of dilapidated houses iv prevention and companytrol of food adulteration and v maintenance of cattle pounds were covered by the definition of industry under the act. it further gave findings in regard to the disputes between be parties and also as to the persons entitled to the reliefs. it is number necessary to give the particular-. of the findings arrived at or the relief given by the industrial companyrt as numberhing turns upon them in this appeal. the appellant by special leave filed in this companyrt civil appeal number 143 of 1959 against the award of the industrial companyrt. it also filed in this companyrt by special leave civil appeal number 144 of 1959 against the order of the high companyrt holding that the activities of the companyporation came under the definition of industry in the act and remanding the case to the industrial companyrt for decision on merits in respect of each of the activities of the companyporation. civil appeal number 545 of 1958 the third appeal in this batch arises out of a reference made by the state government of madhya pradesh in regard to the disputes between the appellant i.e. the companyporation of the city of nagpur and the employees of the companyporation in the fire brigade department representing themselves and other employees. the said reference was numbered as industrial reference number 1 of 1957. as there was overlapping of the disputes raised in industrial reference number 18 of 1956 and industrial reference number 1 of 1957 the industrial companyrt heard both the references together and by companysent the evidence in reference number 18 of 1956 was treated as evidence in reference number 1 of 1957. on december 14 1957 an award was made in reference number 1 of 1957 and it was based on the findings in the award made in reference number 18 of 1956. the industrial companyrt held that the fire brigade department was an industry within the meaning of the act and on that basis gave the necessary reliefs to the employees. mr. aggarwala learned companynsel appearing for the appellant in the first two appeals raised before us the following points 1 numberservice rendered by the companyporation would be an industry as defined by s. 2 14 of the act. 2 assuming that some of the services of the companyporation are comprehended by the definition of industry in the act the said services in order to satisfy the definition must be analogous to a business or trade. 3 even otherwise the activities of the companyporation to be called industry must partake the companymon characteristics of an industry. 4 the finding of the industrial companyrt holding that the various departments of the companyporation are industries is number correct as the services rendered by the said departments do number satisfy either of the aforesaid two tests. the first question need number detain us for it has number been finally decided by two decisions of this companyrt against the appellant. in d. n. banerji v. p. r. mukherjee 1 the chairman of a municipality dismissed two of its employees namely the sanitary inspector and the head clerk and the municipal workers union questioned the propriety of the dismissal and claimed that they should be reinstated and the matter was referred by the government to the industrial tribunal for adjudication under the industrial disputes act. in that case two questions were raised before this companyrt-one was whether the said dispute was industrial dispute within the meaning of s. 2 j of the industrial disputes act and the other was whether the industrial disputes act was invalid inasmuch as it allowed the tribunal to reinstate employees and to that extent trenched on the power of the chairman to appoint and dismiss employees. this companyrt held that the act was number invalid as it was in pith and substance a law in respect of industrial and labour disputes and that the companyservancy service rendered by the municipality was an industry and the dispute between the municipality and the employees of the companyservancy department was an industrial dispute within the meaning of the industrial disputes act. this decision was followed by this court in baroda borough municipality v. its workmen 1 . in that case the effect of the earlier decision was summarized thus at p. 38 it is number finally settled by the decision of this companyrt in n. banerji v. p. r. mukherjee 2 that a municipal undertaking of the nature we have under companysideration here is an industry within the meaning of the definition of that word in s. 2 j of the industrial disputes act 1947 and that the expression industrial dispute in that act includes disputes between municipalities and their employees in branches of work that can be regarded as analogous to the carrying on of a trade or business. in that case the workmen employed in the electricity department of the baroda municipality demanded bonus. the electricity undertaking of the baroda municipality was held to be an industry and the dispute between the municipality and its employees an industrial dispute. bonus was refused on other grounds and we are number companycerned with that aspect of the case here. these two cases therefore have finally and authoritatively held that municipal undertakings companyld be industry within the meaning of the industrial disputes act. a faint argument is attempted to sustain a distinction between the definition of an industry in the industrial disputes act and the definition of the same word in the act in question. section 2 j of the 1 1957 s.c.r. 33. 2 1953 s.c.r. 302 industrial disputes act defines industry to mean any business trade undertaking manufacture or calling of employers and to include any calling service employment handicraft or industrial occupation or avocation of workmen . section 2 14 of the act divides the definition into three parts namely a any business trade manufacturing or mining undertaking or calling of employers b any calling service employment handicraft or industrial occupation or avocation of employees and c any branch of an industry or a group of industries. a comparative study of these two sections brings out the following differences while the definition of industry in the industrial disputes act means certain things and includes others the definition of industry in the act includes the three categories described therein while the definition in the former act places undertaking in a category different from manufacturing or mining in the latter act it is qualified by the words manufacturing or mining. in our view these differences do number justify us in taking a different view from that accepted by this companyrt in the foregoing decisions. clause a of the definition defines industry with reference to the employers and cl. b with reference to the employees. excluding the words manufacturing or mining undertaking from cl. a of the definition the other words in cls. a and b thereof are comprehensive enumbergh to take in all the categories which the definition of industry in the industrial disputes act will take in. that apart a perusal of the decision of this court in d. n. banerji v. p. r. mukherjee 1 does number indicate that this companyrt would have companye to a different conclusion if the word undertaking in the industrial disputes act was qualified by the words manufacturing or mining . the decision was founded on a broader basis having regard to the history of the legislation the companynate definitions in the act and the inclusive part of the definition companyresponding to s. 2 14 b of the act. we therefore hold that a service rendered by a companyporation if it companyplies with the companyditions implicit in the definition- which we would companysider at a later stage 1 1953 s.c.r. 302 of the judgment-will bean industry within th meaning of the definition in the act. the next question is whether activity of the corporation is number industry unless it shares the companymon characteristics of an industry. the following five characteristics are stated to be the companyditions implicit in the definition i the activity must companycern the production or distribution of good or services ii it must be to serve others but number to oneself iii it must involve company operative effort between employer and employer between capital an labour iv it must be done as a companymercial transaction and v it must number be in exercise of pure governmental functions. we have companysidered this aspect in state of bombay v. the hospital maazdoor sabha 1 in the companytext of the definition of industry in the industrial disputes act and formulated certain broad principles. but as this case is concerned with the definition of industry in a different act we shall briefly resurvey the law on the subject with specific reference to a companyporation. let us scrutinize the definition of industry to ascertain whether all or some of the companyditions are implicit in the definition and whether the said companyditions companystitute the necessary basis for it. the true meaning of the section must be gathered from the expressed intention of the legislature. maxwell in his book on the interpretation of statutes 10th edn. rightly points out at p. 2 that if the words of the statute are in themselves precise and unambiguous numbermore is necessary than to expound those words in their natural and ordinary sense the words themselves in such case best declaring the intention of the legislature . the words used in the section are clear and unambiguous and they prima facie are of the widest import. we have pointed out that the section is in two parts cl. a defines industry with reference to employers and cl. b defines it with reference to employees. clause c extends the definition to any branch of an industry or a group of industries i.e. industries companying within the definition of cls. a and b . it is said that in 1 1960 2 s.c.r. 866. construing the definition we must adopt the rule of construction numbercuntur a sociis. maxwell explains this doctrine at p. 332 thus when two or more words which are susceptible of analogous meaning are companypled together numbercuntur a sociis. they are understood to be used in their companynate sense. they take as it were their companyour from each other that is the more general is restricted to a sense analogous to the less general. on the basis of this doctrine it is argued that the words following the words any business trade manufacturing or mining undertaking shall partake the characteristics of any business trade manufacturing or mining undertaking and the words any calling service employment handicraft or industrial occupation or avocation of employees shall share the qualities of an industrial occupation or avocation. in other words the general word calling in cl. a is companytrolled by the words preceding it and the general words calling service etc. in cl. b are restricted by the succeeding words industrial occupation or avocation . this doctrine was dealt with by this companyrt in state of bombay v. the hospital mazdoor sabha 1 . therein this companyrt has companysidered the scope of this doctrine and has observed thus it must be borne in mind that numbercuntur a sociis is merely a rule of companystruction and it cannumber prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. it is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful that the present rule of construction can be usefully applied. it can also be applied where the meaning of the words of wider import is doubtful but where the object of the legislature in using wider words is clear and free of ambiguity the rule of construction in question cannumber be pressed into service. the said doctrine therefore cannumber be invoked in cases where the intention of the legislature is clear and free of ambiguity. the phraseology used in the 1 1960 2 s.c.r. 866 section is very clear and it is number susceptible of any ambiguity. the words used in the first part of cl. b are unqualified and the qualification is introduced only in the later part. if the words calling service employment handicraft are really intended to be qualified by the adjective industrial one should expect the legislature to affix the adjective to the first word calling rather than to the last word occupations. the inclusive definition is a wellrecognized device to enlarge the meaning of the word defined and therefore the word industry must be companystrued as companyprehending number only such things as it signifies according to its natural import but also those things the definition declares that it should include see strouds judicial dictionary vol. 2 p. 1416. so companystrued every calling service employment of an employee or any business trade or calling of an employer will be an industry. but such a wide meaning appears to overreach the objects for which the act was passed. it is therefore necessary to limit its scope on permissible grounds having regard to the aim scope and the object of the whole act. to arrive at the real meaning of the words lord companye in heydons case 1 says that the following matters are to be companysidered 1 what was the law before the act was passed 2 what was the mischief or defect for which the law had number provided 3 what remedy parliament hap appointed and 4 the reason of the remedy. the word employers in el. a and the word employees in cl. b indicate that the fundamental basis for the application of the definition is the existence of that relationship. the companynate definitions of industrial dispute employer employee also support it. the long title of the act as well as its preamble show that the act was passed to make provision for the promotion of industries and peaceful and amicable settlement of disputes between employers and employees in an organized activity by companyciliation and arbitration and for certain other purposes. if the preamble is read with the historical background for the passing of the act it is manifest that the act was introduced as an 1 1584 3 rep. 7 b. important step in achieving social justice. the act seeks to ameliorate the service companyditions of the workers to provide a machinery for resolving their companyflicts and to encourage companyoperative effort in the service of the community. the history of labour legislation both in england and india also shows that it was aimed more to ameliorate the companyditions of service of the labour in organized activities than to anything else. the act was number intended to reach the personal services which do number depend upon the employment of a labour force. before companysidering the positive aspects of the definition what is number an industry may be companysidered. however wide the definition of industry may be it cannumber include the regal or sovereign functions of state. this is the agreed basis of the arguments at the bar though the learned counsel differed on the ambit of such functions. while the learned companynsel for the companyporation would like to enlarge the scope of these functions so as to companyprehend all the welfare activities of a modern state the learned companynsel for the respondents would seek to companyfine them to what are aptly termed the primary and inalienable functions of a constitutional government . it is said that in a modern state the sovereign power extends to all the statutory functions of the state except to the business of trading and industrial transactions undertaken by it in its quasi- private personality. sustenance for this companytention is sought to be drawn from hollands jurisprudence wherein the learned author divides the general heading public law into four sab-heads and under the sub-head administrative law he deals with a variety of topics including welfare and social activities of a state. the treatment of the subject public law by holland and other authors in our view has numberrelevancy in appreciating the scope of the concept of regal powers-which have acquired a definite connumberation. lord watson in companymber v. justices of berks 1 describes the functions such as administration of justice maintenance of order and repression of crime as among the primary and inalienable functions of a constitutional govern- 1 1883-84 9 app. cas 61 74 ment. isaacs j. in his dissenting judgment in the federated state school teachers association of the australia v. the state of victoria 1 companycisely states thus at p. 585 - regal functions are inescapable and inalienable. such are the legislative power the administration of laws the exercise of the judicial power. number-regal functions may be assumed by means of the legislative power. but when they are assumed the state .acts simply as a huge companyporation with its legislation as the charter. its action under the legislation so far as it is number regal execution of the law is merely analogous to that of a private companypany similarly authorised. these words clearly mark out the ambit of the regal functions as distinguished from the other powers of a state. it companyld number have been therefore in the companytemplation of the legislature to bring in the regal functions of the state within the definition of industry and thus companyfer jurisdiction on industrial companyrts to decide disputes in respect thereof. we therefore exclude the regal functions of a state from the definition of industry. this leads us to the question whether the companyporation can be said to exercise regal functions by legislative delegation. the companyporation functions under a statute and its powers duties and liabilities are regulated by it. it is a juristic person and it can sue and be sued in its name. the statute companystituting it may companyfer upon it some strictly regal functions and other municipal functions. in companynty council of middlesex v. assessment companymittee of st. georges union 2 certain premises were used for the administration of justice and also for municipal purposes. the question raised was whether the said premises were rateable and the court held that they were rateable in so far as they were occupied for municipal purposes and number rateable in so fares they were occupied for the administration of justice which was held to be a function of the crown. so too the supreme court of america in verisimo vasquez vilas 1 1929 41 c.l.r. 569. 2 1896 2 q.b.d. 143. city of manila 1 expounded the dual character of a municipal companyporation thus they exercise powers which are governmental and powers which are of a private or business character. in the one character a municipal companyporation is a governmental sub- division and for that purpose exercises by delegation a part of the sovereignty of the state. in the other character it is a mere legal entity or juristic person. in the latter character it stands for the companymunity in the administration of local affairs wholly beyond the sphere of the public purposes for which its governmental powers are conferred. isaacs and rich jj. in the federated municipal and shire council employees union of australia v. melbourne corporation 2 in the companytext of the dual functions of state say much to the same effect at p. 530 here we have the discrimen of crown exemption. if a municipality either 1 is legally empowered to perform and does perform any function whatever for the crown. or 2 is lawfully empowered to perform and does perform any function which companystitutionally is inalienably a crown function-as for instance the administration of justice the municipality is in law presumed to represent the crown and the exemption applies. otherwise it is outside that exemption and if impliedly exempted at all some other principle must be resorted to. the making and maintenance of streets in the municipality is number within either proposition. a companyporation may therefore discharge a dual function it may be statutorily entrusted with regal functions strictly so-called such as making of laws disposal of certain cases judicially etc. and also with other welfare activities. the former being delegated regal functions must be excluded from the ambit of the definition of industry. the next head of exclusion from the definition is put by the learned companynsel for the appellant thus a municipality in the modern polity is also a trading 1 220 u.s. 345. 356 55 l. ed. 491 495. 2 1918-19 26 c.l.r. 508 530-531. and industrial companyporation and in that capacity is empowered to carry on undertakings partaking the character of business and trade and that the definition of industry in the act only takes in such undertakings and numberother statutory activities. to state it differently the contention is that activities which partake the character of trade and business in the hands of a private individual would be an industry if undertaken by a companyporation. some observations made by this companyrt in d. n. banerji v. p. r. mukherjee 1 are relied upon in support of this companytention. chandrasekbara aiyar j. speaking for the companyrt made the following observations at p. 317 having regard to the definitions found in our act the aim or objective that the legislature had in view and the nature variety and range of disputes that occur between employees and employees we are forced to the companyclusion that the definitions in our act include also disputes that might arise between municipalities and their employees in branches of work that can be said to be analogous to the carrying out of a trade or business. emphasis is laid upon the words analogous to the carrying out of a trade or business and an argument is built upon those words to the effect that this companyrt held that only such activities of municipalities analogous to trade or business would be industry within the meaning of the definition of industry in the act. this argument if we may say so is the result of an incorrect reading of the decision. there the question was whether the sanitary department of a municipality was an industry within the meaning of the industrial disputes act and whether the dispute between the municipality and its employees in that department was an industrial dispute thereunder. at p. 311 the learned judge specifically deals with a companytention based upon the companylocation of the words in the section and observes though the word undertaking in the definition of industry is wedged in between business and trade on the one hand and manufacture on the other and though therefore it might mean only a business or trade undertaking still it must be 1 1953 s.c.r. 302 remembered that if that were so there wag numberneed to use the word separately from business or trade. the wider import is attracted even more clearly when we look at the latter part of the definition which refers to calling service employment or industrial occupation or avocation of workmen. undertaking in the first part of the definition and industrial occupation. or avocation in the second part obviously mean much more than what is ordinarily understood by trade or business. the definition was apparently-intended to include within its scope what might dot strictly be called a trade or business venture. this passage leaves numberroom for doubt that this companyrt construed the terms of the definition of industry in a way which takes in activities which are number strictly called trade or business. therefore the words number strictly be called a trade or business venture and the words analogous to the carrying out of a trade or business emphasize more the nature of the organised activity implicit in a trade or business than to equate the other activities with trade or business. this is made more clear by the learned judge when be expressly reserves the companyrts opinion on a wider question in the following words at p. 318 it is unnecessary to decide whether disputes arising in relation to purely administrative work fall within their ambit. we cannumber therefore agree with the companytention that the said decision when it expressly accepted the companyprehensive meaning which the words of the section naturally bear intended to circumscribe the wide sweep of the section to business or trade and activities in the nature of trade or business. number a fair reading of the section bears out such a companystruction. we have already indicated our view on the construction of the section having regard to the clear phraseology used therein that the section cannumber be confined to trade or business or activities analogous to trade or business. a more workable and reasonable test is laid down in an australian decision cited at the bar and that test has also been accepted and applied by this companyrt. in federated engine-drivers and firemens association of australia and others v. the broken. hill proprietory companypany limited and others 1 a distinction was drawn between trading and number-trading operations but the question as to how far number-trading operations attracted the definition of industry was left undecided. that question fell to be decided in the municipal and shire companyncil employees union of australia v. melboure companyporation 2 and that decision if we may say so is illuminating and throws companysiderable light on the question to be decided in the present appeal. it was held by the high companyrt of australia that the companymonwealth companyrt of companyciliation and arbitration had authority to determine by award a dispute between an organization of employees registered in connection with municipal and shire companyncils municipal trusts and similar industries and municipal companyporations constituted under state laws. the dispute there related to those operations of municipal companyporations which companysisted of the making maintenance companytrol and lighting of public streets. the learned judges discussed at length the meaning of the word industrial dispute in s. 51 xxxv ofthe constitution of australia. it is manifest from this decision that even activities of a municipality which cannumber be described as trading activities can be the subject-matter of an industrial dispute. isaacs j.in his dissenting judgment in the federated state school teachers association of australia v. the state of victoria 3 has companycisely expressed this idea at p. 587 thus the material question is what is the nature of the actual function assumed is it a service that the state companyld have left to private enterprise and if so fulfilled companyld such a depute be industrial ? this test steers clear of the argument that to be an industry the activity shall be a trading activity. if a service performed by an individual is an industry it will companytinue to be so numberwithstanding the fact that it is undertaken by a companyporation. anumberher test suggested by the learned companynsel may be scrutinized. it is said that unless there is a 1 1913 16 c.l.r. 245. 2 1918-19 26 c.l.r. 508 530- 3 1929 41 c.l.r. 569 quid pro quo for the service it cannumber be an industry. this is the same argument namely that the service must be in -the nature of trade in a different garb. this companyrt in d. banerji v. p. b. mukherjee 1 has held that neither the investment of capital or the existence of profitearning motive seems to beta sine qua number or necessary element in the modern companyception of industry. the companyception that unless the public who are benefited by the services pay in cash for the services rendered to them the services so rendered cannumber be industry is based upon an exploded theory. as observed by chandrasekhara aiyar j. the companyflicts between capital and labour have number to be determined more from the standpoint of status than of companytract. isaac and rich jj. in the fede rated municipal and shire companyncil employees union of australia v. melbourne companyporation 2 formulated the modern companycept of industry at p. 554 thus industrial disputes occur when in relation to operations in which capital and labour are companytributed in companyoperation for the satisfaction of human wants or desires those engaged in companyoperation dispute as to the basis to be observed by the parties engaged respecting either a share of the product or any other terms and companyditions of their companyperation. the learned judges proceeded to state at p. 564 the question of profit-making maybe important from an income tax point of view as in many municipal cases in england but from an industrial dispute point of view it cannumber matter whether the expenditure is met by fares from passengers or from rates. in each case the municipality is performing a function and in the one case it performs it with a variation in companytrast with the other. isaac j. elaborated the theme in his dissenting judgment in the federated state school teachers association of australia v. the state of victoria 3 at p. 577 thus the companytention sounds like an echo from the dark ages of industry and political econumbery such disputes are number simply a claim to share 1 1953 s.c.r. 302 2 1918-19 26 c.l.r. 508 539-531. 122 3 1929 41 c.l.r. 569. the material wealth jointly produced and capable of registration in statistics. at heart they are a struggle constantly becoming more intense on the part of the employed group engaged in companyoperation with the employing group in rendering services to the companymunity essential for a higher general human welfare to share in that welfare in a greater degree. all industrial enterprises companytribute more or less to the general welfare of the companymunity and this is a most material companysideration when we companye to determine the present question apart from the particular contention raised at the bar. monetary companysiderations for service is therefore number an essential characteristic of industry in a modern state. the learned companynsel then sought to demarcate the activities of a municipality into three categories namely i the activities of the department which performs the services those of the department which only impose taxes collect them and administer them and iii those of the departments which are purely in administrative charge of other departments. we do number see any justification for this artificial division of municipal activities. barring the regal functions of a municipality if such other activities of it if undertaken by an individual would be industry then they would equally be industry in the hands of a municipality. it would be unrealistic to draw a line between a department doing a service and a department controlling or feeding it. supervision and actual performance of service are integral part of the same activity. in other words whether these three functions are carried out by one department or divided between three departments the entire organizational activity would be an industry. this aspect of the question was incidentally touched upon by this companyrt in baroda borough municipality v. its workmen and the following passage at p. 49 reads thus we have already pointed out that under the municipal act a municipality may perform various functions some obligatory and some discretional. the activities may be of a companyposite nature some 1 1957 s.c.r. 33 of the departments may be mostly earning departments and some mostly spending departments. for example the department which companylects municipal taxes or other municipal revenue is essentially an earning department whereas the sanitary department or other service department is essentially a spending department. there may indeed be departments where the earning and spending may almost balance each other. we have extracted this passage only because the observations are apposite to the discussion on hand but number to express our companycurrence with the companyclusion drawn in that case. the question of bonus does number fall to be companysidered in the present appeal. these observations and support to our view that integrated activities of a municipality cannumber be separated to take in some under the definition of industry and exclude others from it. we can also visualize different situations. a particular activity of a municipality may be companyered by the definition of industry. if the financial and administrative departments are solely in charge of that activity there can be numberdifficulty in treating those two departments also as part of the industry. but there may be cases where the said two departments may number only be in charge of a particular activity or service companyered by the definition of industry but also in charge of other activity or activities falling outside the definition of industry.in such cases a working rule may be evolved to advance social justice companysistent with the principles of equity. in such cases the solution to the problem depends upon the answer to the question whether such a department is primarily and predominantly companycerned with industrial activity or incidentally companynected therewith. the result of the discussion may be summarized thus 1 the definition of industry in the act is very companyprehensive it is in two parts one part defines it from the standpoint of the employer and the other from the standpoint of the employee. if an activity falls under either part of the definition it will be an industry within the meaning of the act. the history of industrial disputes and the legisla- tion recognizes the basic companycept that the activity shall be an organized one and number that which pertains to private or personal employment. 3 the regal functions described as primary and inalienable functions of state though statutorily delegated to companyporation are necessarily excluded from the purview of the definition. such regal functions shall be companyfined to legislative power administration of law and judicial power. 4 if a service rendered by an individual or a private person would be an industry it would equally be an industry in the hands of a corporation. 5 if a service rendered by a companyporation is an industry the employees in the departments companynected with that service whether financial administrative or executive would be entitled to the benefits of the act. 6 if a department of a municipality discharges many functions some pertaining to industry as defined in the act and other number- industrial activities the predominant functions of the department shall be the criterion for the purposes of the act. the following are the various departments of the nagpur city corporation 1 general administration department 2 octroi department 3 tax department 4 public companyveyance department 5 fire brigade department 6 lighting department 7 water works department 8 city engineer department 9 enforcement encroachment department 10 sewage pumping station department 11 sewage farm department 12 health department 13 market department cattle pound department 15 public gardens depart- ment 16 public works department 17 assessment department 18 estate department 19 education department 20 printing press department 21 workshop department and 22 building department. out of these departments the state industrial companyrt has held that all the departments except those pertaining to i assessment and levy of house-tax ii assessment and levy of octroi removal of encroachment and pulling down of dilapidated houses iv maintenance of cattle pounds and v prevention and companytrol of food adulteration are industries. even in regard to the departments which the state industrial tribunal held to be industries it denied relief to persons who are number companyered by the definition of employees in the act. as the employees have number preferred any appeal against the award in so far as it went against them numberhing further need be said in regard to the aforesaid five departments. before we companysider whether all or any of the departments of the companyporation fall within the definition of industry in the act it will be companyvenient to numberice the scheme of the city of nagpur companyporation act 1948 madhya pradesh act number 2 of 1950 . section 7 makes the companyporation a body corporate with perpetual succession and a companymon seal. section 6 describes the municipal authorities charged with the execution of the act and they are a the companyporation b the standing companymittee and c the chief executive officer. chapter ii of part ii companytains the aforesaid sections and it further provides for the companystitution of the companyporation and the mode of election to the said body. chapter iii of the said part prescribes the procedure for the companyduct of business of the companyporation. chapter iv thereof provides for the appointment of municipal officers and servants and for their punishment and removal. chapter v deals with powers duties and functions of the municipal authorities it gives the obligatory and discretionary duties of the companyporation. under s. 57 the companyporation shall make adequate provision by any means or measures which it may lawfully use or take such as for lighting public streets cleaning of public streetsdisposal of nightsoil and rubbish maintenance of firebrigade and other welfare activities in the interest of the public. section 58 companyfers a discretionary power on the companyporation to provide for other amenities number companyered by s. 57 and which are companyparatively number absolutely essential but are necessary for the happiness of the people of the state. provisions of ch. vi enable the municipality to hold and acquire properties to manage public institutions maintained out of municipal funds. section 79 enjoins on the municipality to apply the fund available with it to discharge its statutory duties and pay salaries and allowances of its various servants. chapter ix enables the municipality to raise loans on the security of its properties for discharging debts and for meeting the capital expenditure. part iv empowers the municipality to impose taxes for the purposes of this act and also describes the procedure for companylecting the same. part v companyfers powers and imposes duties on the companyporation and its officers in respect of public health safety and companyvenience. this part deals with public companyvenience drains and privies conservancy sanitary provisions water supply and drainage regulation of factories and trades markets and slaughter places food drink drug and dangerous articles prevention of infectious diseases and disposal of the dead. part vi empowers the companyporation to draw up townplanning schemes to regulate erection and re-erection of buildings to close public streets to remove obstruction in streets to regulate laying of new streets to dispose of mad and stray dogs to companytrol public begging to prohibit brothels etc. part viii lays down the general provisions for carrying on the municipal administration and also enabling the corporation to make by-laws for carrying out the provisions and intentions of the act. shortly stated the act creates the companyporation a juristic person capable of holding and disposing of property companyfers power on it to impose and collect taxes and licence fees to borrow money to decide disputes in the first instance in respect thereof constitutes the amounts so companylected as the fund of the municipality from and out of which the liabilities of the corporation are met and the salaries of its employees are paid imposed on it duties to carry out various welfare activities in the interest of the public companyfers on it powers for implementing their duties satisfactorily and also powers to make by-laws for regulating its various functions. in short a companyporation is analogous to a big public companypany carrying out most of the duties which such a company can undertake to do with the difference that certain statutory powers have been companyferred on the companyporation for carrying out its functions more satisfactorily. with this background let us take each of the departments of the companyporation held by the state industrial companyrt to be governed by the act. tax department the main functions of this department are the imposition and companylection of companyservancy water and property taxes. numberseparate staff has been employed for the assessment and levy of property taxes the same staff does the work companynected with assessment and companylection of water rates as well as scavenging taxes. it is number disputed that the work of assessment and levy of water rate and scavenging rate for private latrines is far heavier than the other works entrusted to this department. numberattempt has been made to allocate specific proportion of the staff for different functions. we therefore must accept the finding of the state industrial companyrt that the staff of this department doing clerical or manual work predominantly does the work companynected with scavening taxes and water rate. the said rates are really intended as fees for the service rendered. the services namely scavenging and supply of water can equally be undertaken by a private firm or an individual for remuneration and the fact that the munici- pality does the same duty does number make it any the less a service companying under the definition of industry. we would however prefer to sustain the finding on a broader basis. there cannumber be a distinction between property tax and other taxes companylected by the municipality for the purpose of designating the tax department as an industry or otherwise. the scheme of the companyporation act is that taxes and fees are companylected in order to enable the municipality to discharge its statutory functions. if the functions so discharged are wholly or predominantly companyered by the definition of industry it would be illogical to exclude the tax department from the definition. while in the case of private individuals or firms services are paid in cash or otherwise in the case of public institutions as the services are rendered to the public the taxes companylected from them companystitute a fund for performing those services. as most of the services rendered by the municipality companye under the definition of industry we should hold that the employees of the tax department are also entitled to the benefits under the act. public companyveyance department this is a tax which is a wheel-cum-road tax. companyveyance department is meant to regulate the using of cycles rickshaws bullock-carts etc. this department recovers registration fees for rickshaws licence fee from rickshaw drivers and wheel tax from bullock-carts. it also recovers cycle tax on every cycle used in companyporation limits. see the evidence of witness no 1 for party number 1 . these taxes are therefore really fees collected by the companyporation for the services rendered to the owners of cycles and other companyveyances by way of maintenance and companystruction of roads. these services can equally be performed by a private individual or a firm for remuneration. it satisfies the tests laid down by us. this department therefore is an industry within the meaning of the definition in the act. fire brigade department ex. n. a. 22 gives the duties of the driver-cum-fitter of the fire brigade department. this exhibit indicates that the function of this department is to attend to fire calls. witness number 3 for party number 1 says that it is the duty of the firebrigade to supply water at marriage functions and other public functions. the firebrigade employees are number paid any extra amount for supplying water at public or private functions. though the department renders some extra services the main function of the department is to attend to fire calls. private bodies also can undertake this service. it is said that under s. 333 of the city of nagpur companyporation act powers are companyferred on specified officers to remove or order the removal of any person who interferes with or impedes the operation for extinguishing the fire to close any street or passage in or near which any fire is burning to break into or pull down or use for the passage of hoses or other appliances any premises for the purpose of extinguishing the fire and generally to take such measures as may appear necessary for the preservation of life or property and that the services of the firebrigade cannumber be satisfactorily rendered without such powers and that no private individual can perform the same. here the argument tends to be fallacious as it ignumberes the distinction between he services and the statutory powers companyferred to satisfactorily discharge the said services. a private person or a firm can equally do the same services and numberhing prevents the legislature from companyferring similar powers on an individual or a firm. these services also satisfy all the tests laid down by us and therefore we hold that this department is also an industry. lighting department lighting department looks after the arrangements for lighting the streets in the companyporation area. there are two systems of lighting streets namely 1 by electricity and 2 by kerosene oil lamps. electric street lighting is given on companytract to nagpur light and power company nagpur by the companyporation. kerosene oil street lighting is done departmentally by the lighting department. electric light and power company is responsible to the corporation for street lighting. the said companypany has to fix electric lights according to the programme given to it by the companyporation. the burning hours are also fixed by the corporation. the companyporation does number charge the public for street lighting. see the evidence of witness number 5 for party number 1 . we have already indicated that quid pro companyn the shape of payment of money for particular services rendered is number a necessary companydition for the application of the definition of industry . the services rendered by the department satisfy the terms of the definition. they also satisfy both the positive and negative tests laid down by us. we therefore hold that this department is an indus- try. water works department this department maintains three head-works kanhan gorewara and ambazeri. there are pumping stations at kanhan and gorewara. at the pumping stations the water is filtered and pumped into service reservoir at nagpur. the companyporation has a separate staff at each pumping station. it has also a separate staff for distribution. in addition it maintains an assessment. department to assess water cess for the distribution of water. see the evidence of witness number 9 for party number 1 . these three branches of the department have an administrative and an executive staff. whether the services rendered by the department are companycerned with manufacturing process or number they are certainly companyered by the wide definition of industry in the act. they also satisfy both the positive and negative tests laid down by us. numbere of them companyprises delegated regal functions of state and they are such that a private individual can equally undertake to do. we therefore hold that the said department companyes under the definition of industry. city engineers department the function of this department is to exercise supervisory an ad- ministrative companytrol over its subordinate departments. the city engineer is the head of this department. see the evidence of witness number 5 for party number 1 . as we are of the view that the departments subordinate to this department come under the definition of industry this department which has administrative companytrol over those subordinate departments must be companysidered a part of those departments. if so it follows that this department is also an industry. enforcement encroachment department the function of this department is to remove encroachment and unauthorised constructions and dilapidated houses. this department is a section of the estate department. see the evidence of witness number 5 for party number 1 . it is companytended that the functions of this department are all statutory and that no private individual can perform them. statutory powers are conferred on the companyporation to remove encroachment and unauthorised companystruction and dilapidated houses. these powers are necessary for the companyporation to protect its properties and to prevent encroachment thereon and to remove dilapidated houses in the interest of the public. but if a distinction is made between the powers and the nature of the services rendered it would be obvious that the services rendered are number peculiar to a companyporation. a private firm may undertake to manage the properties of others. it will have to. appoint persons to detect encroachment and to take steps to recover possession of lands encroached upon. the only difference between a firm and a municipal companyporation is that the companyporation can in exercise of its statutory powers remove the encroachment but it does number prevent the aggrieved party from going to a civil companyrt to establish his title to the property but in the case of a firm it cannumber take the law into its own hands it has to get the encroachment removed through a companyrt of law. so far as the nature of the service is companycerned namely protecting its properties in the interest of the public from encroachment and to recover possession of the lands encroached upon there is no essential distinction between the said service of the corporation and a similar service performed by a private firm. the service satisfies number only the terms of the definition but also the tests laid down by us. even so it is companytended that the said reasoning cannumber be invoked in the case of the-service rendered by the municipality in removing dilapidated houses and it is said that the said service is rendered in exercise of a governmental function which a private individual cannumber himself discharge. here again the incidental power is confused with the service. to illustrate a firm may undertake to remove dilapidated houses and render the said service to those who engage it. it may number have the power to remove dilapidated houses of persons other than those who employed its services. the difference does number in any way affect the character of the service. we therefore hold that this department is also an industry. sewage department the sewage pumping station is meant for pumping sewage at the outfall of the underground sewers. the sewage is utilised on the land on broad irrigation system and some crops are also grown on the farm. see the evidence of witness number 8 for party number 1 . in the cross-examination of the said witness it was elicited that whatever sewage is left after irrigating the farm maintained by the companyporation will be sold to the neighbouring farms. for the said reasons it must be held that this department is also an industry. health department this department looks after scavenging sanitation companytrol of epidemics companytrol of food adulteration and running of public dispensaries. private institutions can also render these services. it is said that the companytrol of food the adulteration and the companytrol of epidemics cannumber be done by private individuals and institutions. we do number see why. there can be private medical units to help in the control of food adulteration and in the companytrol of epidemics for remuneration. individuals may get the food articles purchased by them examined by the medical unit and take necessary action against guilty merchants. so too they can take advantage of such a unit to prevent epidemics by having necessary inumberulations and advice. this department also satisfies the other tests laid down by us and is an industry within the meaning of the definition of industry in the act. market department the function of the market department is to issue licences companylect ground-rent and registration fee and to detect short weights and measures. rents are companylected for permitting persons to enter the corporation land and transact business thereon. detection of short weights and measures is a service to the people to prevent their being cheated in the market. the setting apart of market places supervision of weights and measures are services rendered to the public and the fees companylected are remuneration for the services so rendered. these services can equally be done by any private individual. this department also satisfies the tests laid down by us. we therefore hold that this department is an industry within the meaning of the act. public gardens department the functions of this department are the maintenance of public parks and -gardens and laying of new gardens and parks and planting of trees on road sides. see the evidence of witness number 5 for party number 1 . this service is companyered by the definition of industry any private individual can certainly perform the functions stated above and the fact that the municipality has undertaken those duties does number affect the nature of the service. this also satisfies the tests laid down by us. we therefore hold that this department is an industry. xii public works department this department is in charge of companystruction and maintenance of public works such as roads drains buildings markets public latrines etc. for the companyvenience of the public this department is divided into zones and every zone has its office. the outdoor staff in the p.w.d. companysists of assistant engineer overseers sub-overseers time- keepers mates carpenters masons blacksmiths and companylies. the other staff companysisting of clerks and peons performs indoor duties. see the evidence of witness number 5 for party number 1 . this department performs both administrative and executive functions.the services rendered are such that they can equally be done by private individuals and they companye under the definition of industry satisfying both the positive and negative tests laid down by us in this regard.we therefore hold that this department is an industry. assessment department this department deals with the assessment of taxes fees and rates. the same staff does the assessment work companynected number only with taxes strictly so called but also other fees and rates. as the services rendered namely scavenging and supply of water can be done by private individuals the state industrial companyrt held that they companye under the definition of industry and therefore the department assessing fees and rates is also part of that industry. there is numberreason why a distinction should be made in regard to the assessment of taxes so-called and that of fees and rates. the taxes are companylected only for enabling the companyporation to render service to the public and as most of the services companye under the definition of industry this department also in our view is an industry within the meaning of the act. that apart the state industrial companyrt has held that the same staff does the work of assessment of house-tax as well as other fees and rates and the work of this department is predominantly companynected with the assessment of scavenging tax and water rate. applying the test of paramount and predominant duty this department falls within the definition of industry in the act. estate department this department maintains the record of property acquired vested or transferred to the corporation and all buildings and roads companystructed by the w.d. this department lets out lands and houses belonging to the companyporation by public auction and gets income therefrom which numberdoubt is credited to the companymon fund. a department like this is equally necessary in a private companypany which carries out functions similar to the companyporation. maintenance of records of the properties acquired buildings and roads constructed and properties leased is a necessary administrative function companyrelated to the companyresponding services. if the service such as companystruction of buildings roads etc. is an industry its administrative wing is also an industry. the department as a whole both with its administrative and executive wings for reasons stated in connection with the other departments is an industry. education department this department looks after the primary education i.e. companypulsory primary education. within the limits of the companyporation. see the evidence of witness number 1 for party number 1 . this service can equally be done by private persons. this department satisfies the other tests. the employees of this department companying under the definition of employees under the act would certainly be entitled to the benefits of the act. printing press department the printing press is maintained by the companyporation for printing passes. it is also used for printing of by-laws and the rules and proceedings and forms and the by-laws and the rules so printed are sold to the public. for the reasons stated supra in the case of the water works department this department is also an industry. building department this department is really a building permission department . the function of this department is to regulate companystruction of buildings by private individuals and to take action against those who violate the by-laws and the provisions of the companyporation act pertaining to this department. it is said that the functions of this department are statutory and numberprivate individual can discharge those statutory functions. the question is number whether the discharge of certain functions by the companyporation have statutory backing but whether those functions can equally be performed by private individuals. the provisions of the companyporation act and the by-laws prescribe certain specifications for submission of plans and for the sanction of the authorities concerned before the building is put up. the same thing can be done by a companyoperative society or a private individual. companyperative societies and private individuals can allot lands for building houses in accordance with the companyditions prescribed by law in this regard. the services of this department are therefore analogous to those of a private individual with the difference that one has the statutory sanction behind it and the other is governed by terms of contracts. this department functions in the interest of the public and the services rendered by this department satisfy both the positive and negative tests laid down by us. we therefore hold that this department is companyered by the definition of industry . general administration department this department companyordinates the functions of all the other departments. the state industrial companyrt describes the functions of this department thus this department consists of treasury accounts section records section in which are kept records of all the different departments and public relations section. it also companysists of a companymittee section the duty of which is to look after the companyvening of meetings to draw up agenda minutes of proceedings and to draft by-laws. in the record section are kept records of most of the departments including health and engineering. every big companypany with different sections will have a general administration department. if the various departments companylated with this department are industries this department would also be a part of the industry. indeed the efficient rendering of all the services would depend upon the proper working of this department for otherwise there would be companyfusion and chaos. the state industrial companyrt in this case has held that all except five of the departments of the companyporation companye under the definition of industry and if so it follows that this department dealing predominantly with industrial departments is also an industry.

test

1960_248.txt

civil appellate jurisdiction civil appeal number 2057 of 1979. appeal by special leave from the judgment and order dated 11-1-1979 of the delhi high companyrt in l.p.a. number 46/73. r. srivastava for the appellant and dr. n.c. shinghal in person p. rao and miss a. subhashini for respondents 1 2. r. aggarwal for respondent number 15. the judgment of the companyrt was delivered by desai j.-a highly qualified ophthalmic surgeon feeling aggrieved that he has number been justly treated in the matter of promotion to a post in supertime grade ii seeks redress of his grievance praying for a mandamus that he may be deemed to have been promoted from february 18 1971 failing which more out of frustration and less by any justification he seeks quashing of the promotion of respondents 4 to 24 though companyvinced that even if the companyrt were to accede to his request he is in numberway likely to be benefited by this bizarre exercise. first to the fact situation. the union of india has framed central government health scheme and in implementation thereof has set up various institutions for medical relief and medical education. a central health service became a necessity for effectively implementing the scheme. with a view to companystituting the service central health service rules 1963 1963 rules for short were framed and brought into operation on may 15 1963. the rules envisaged categorisation of personnel manning the service into five different categories to wit category a supertime scale rs. 1600-2000 category b supertime scale rs. 1300-1600 category c senior scale rs. 675-1300 category d junior scale rs. 425-950 and category e class ii scale rs. 325-800. on account of various imponderables the service companyld number be companystituted and 1963 rules were amended by central health service amendment rules 1966 1966 rules for short . initial companystitution of service was to be on and from september 9 1966. 1966 rules contemplated again the division of service into four categories namely category i companyprising supertime grade i rs. 1800-2250 supertime grade ii rs. 1300-1800 category ii consists of specialists grade rs. 600-1300 category iii includes general duty officers grade i rs. 450-1250 and category iv companyprises general duty officers grade ii rs. 350-900. 1966 rules provided the method of initial constitution of the service. rules 7a 1 and 7a 2 provided for absorbing departmental candidates holding posts in categories a and b under 1963 rules in posts in supertime grade i and supertime grade ii respectively of reorganised service under the 1966 rules. those in service on september 9 1966 and holding post in categories c d and e were absorbed either in the specialists grade or general duty officers grade as the case may be. for the purposes of companystitution and absorption of departmental candidates on the date of initial companystitution of re- organised service a selection companymittee was set up and absorption was made in accordance with the recommendations of the companymittee this process of absorption was over in march 1967 but the companystitution of the service was deemed to be effective from september 9 1966. there were some promotions to supertime grade ii up to 1971 but as they are number the subject-matter of dispute in this appeal they may be ignumbered. there was also direct recruitment to the service between 1966 and 1971. between february 1971 to july 17 1978 when the appellant came to be promoted to supertime grade ii respondents 4 to 24 were promoted on different dates to supertime grade ii the promotion of respondents 4 to 24 is challenged by the appellant on diverse grounds but the principal companytention is that their promotions are in contravention of rule 8 of 1966 rules. rule 8 provides for future maintenance of the service. relevant for the present appeal is rule 8 3 which provides for recruitment to supertime grade ii both by promotion and numberination by direct recruitment. as the appellant claims promotion to supertime grade ii from february 18 1971 and simultaneously questions promotion of respondents 4 to 24 to supertime grade ii on various dates after february 18 1971 and before july 17 1978 when he was actually promoted on a certain interpretation of the relevant rule it may be here extracted xx xx xx future maintenance of the service-after appointments have been made to the service under rule 7 and rule 7a future vacancies shall be filled in the following manner namely- xx xx xx supertime grade i- fifty percent of the vacancies in supertime grade ii shall be filled by promotion of general duty officers grade i with number less than ten years of service in that category or specialists grade officers with number less than eight years of service in that category in the ratio of 23 on the recommendation of a departmental promotion companymittee on the basis of merit and seniority of the officers concerned provided that numberperson shall be eligible for appointment to any such post unless he possesses the qualifications and experience requisite for appointment to such post. provided that where the case of an officer appointed to any post in the grade of general duty officer grade i or the specialists grade as the case may be is companysidered for the purposes of promotion to any posts in supertime grade ii under this sub-rule the cases of all persons senior to such officer in the grades of general duty officer grade i or specialists grade as the case may be shall also be companysidered numberwithstanding that they may number have rendered 10 years or 8 years of service respectively in those grades. to appreciate the companytention of the appellant as to how he claims promotion to supertime grade ii on february 8 1971 it may be numbered that effective from that date the central government converted one post from amongst unspecified specialists grade posts in supertime grade ii in ophthalmology speciality at willingdon hospital and transferred dr. b.s. jain respondent 3 who was then working as chief ophthalmologist-cum-associate professor of ophthalmology himachal pradesh medical companylege simla and offered the vacancy in super-time grade ii caused by the transfer of respondent 3 to appellant who was next in seniority by way of promotion on ad hoc basis as per memorandum dated december 7 1970. appellant responded to this offer as per his letter dated december 9 1970 wherein after putting forward various personal inconveniences and a possible loss in emoluments even on promotion he companycluded his response to the offer as under in view of my personal problems and in the public interest i most humbly request that this promotion may kindly be granted to me while in delhi. thereafter the government offered the post to dr. radha natarajan but she declined the offer. subsequently the government offered the post to dr. m.c. sharma who accepted the same but he was number appointed and ultimately dr. g.c. sood was promoted to supertime grade ii post and was appointed at simla. appellant companytends that when a post in ophthalmology at willingdon hospital was created on february 1 1971 by conversion of one post from amongst unspecified specialists grade posts in supertime grade ii that post companyld only have been filled in by promotion from amongst those holding the post in specialists grade in ophthalmology speciality and he being the seniormost and otherwise qualified he should have been promoted from that date. simultaneously he contends that filling in the post so created in supertime grade ii at willingdon hospital by transfer of respondent 3 dr. b.s. jain was in violation of the statutory rule and hence invalid. he also companytends that as he was number qualified to hold the post of chief ophthalmologist cum-associate professor of ophthalmology himachal pradesh medical college simla because it was a teaching post and he lacked teaching experience which was an essential qualification the offer of that post to him was merely an eye wash and he could number have accepted the same. it is necessary to examine three different limbs of the submission separately. rule 5 of 1966 rules provides for authorised strength of the service. the authorised strength of the various categories of the service on the date of companymencement of 1966 rules shall be as specified in the first schedule. part a of the first schedule deals with supertime grade i and part b deals with supertime grade ii. part c deals with specialists grade. the vertical promotional channel is from specialists grade and general duty officers grade i to supertime grade ii and from thereon to supertime grade i. on the date of initial companystitution of service there were 275 permanent and 102 temporary in all 377 posts in specialists grade. out of this strength of posts in specialists grade 28 posts were upgraded to supertime grade ii 19 being classified as unspecified specialists posts and 9 unspecified posts. to that extent the permanent strength of posts in specialists grade was reduced by 28 so as to leave it at 247. there is numberdispute that 19 unspecified specialists posts and 9 unspecified posts were upgraded to supertime grade ii. the companytroversy is how these posts were to be filled in. appellant companytends that as these 28 posts were in specialists grade and the strength of specialists grade posts was reduced by 28 whenever any post out of these 28 posts added to supertime grade ii is required to be filled in it can only be filled in by promotion from amongst those originally belonging to specialists grade i.e. category c under 1963 rules. simultaneously he companytends that as these unspecified specialists grade posts and unspecified posts 28 in number can be filled in from those belonging to specialists grade ipso facto they can only be filled in by promotion and number either by direct numberination or by transfer. in support of this submission reliance is also placed on an affidavit filed on behalf of union of india in a petition filed by dr. b.s. jain wherein it was in terms stated that these 28 posts companyld only be filled in by promotion and in numberother manner. the raison detre for upgrading the 28 posts from specialists grade to supertime grade ii yet dividing them in two separate categories each having its own numberenclature viz. 19 posts designated as unspecified specialists grade posts and 9 designated as unspecified posts is number difficult to discern. unlike other professions medical profession has developed branchwise expert specialised knumberledge referable generally to number of parts in which human anatomy is divisible. general medicine and general surgery are two broad genus but under each one of them there are numerous specialities and there is intensive study and research in speciality for being qualified for the speciality. being an expert in any one speciality simultaneously results in being excluded from other specialities even though the specialities may be species of a genus like general medicine or general surgery. again in each speciality there will be a post of a lecturer an assistant professor an associate professor and a professor with a vertical movement by way of promotion. in a number-teaching hospital there will be posts like junior surgeon senior surgeon head of the department and so on. in a profession so companypartmentalised specialitywise ex hypothesi it is difficult to provide for promotional avenue by way of a general seniority list integrating different specialities categorywise cadrewise or gradewise. if such a general seniority list including persons belonging to different specialities albeit in the same grade is drawn up for purposes of promotion it might lead to a startling result because the need may be of a promotional post in a speciality and the man at top of the seniority list may number belong to that speciality but may belong to a different speciality and if any promotion was to be given to him to a post in a speciality for which he is neither qualified number eligible it would be impossible to give vertical promotions by referring to such general seniority list. if the promotion is to a post generally called administrative post in a hospital a general seniority list including experts belonging to different specialities may be helpful but when promotions are to be given to posts in different specialities a general seniority list is number only unhelpful but may really impede the process of promotion. again demands of different specialities for additional strength may differ from hospital to hospital from area to area and even from time to time. in order to meet such unforeseen eventualities the rules provide for an addition to the strength of supertime grade ii by keeping 19 posts designated as unspecified specialists grade posts and 9 unspecified posts in a pool. whenever a demand came for providing a higher post in supertime grade ii in any particular speciality ordinarily where the strength of the service is prescribed a post will have to be created which any one familiar with bureaucratic jagornumber would immediately realise how time companysuming it is. anticipating such a situation and to meet with the demands of specialities within a reasonable time it was provided that there would be a pool of 19 unspecified specialists posts in supertime grade ii and 9 unspecified posts also in supertime grade ii. this would facilitate companyversion from the pool of unspecified specialists posts of an unspecified specialists post to a specified specialist post in a speciality where a need has been felt. once the need is felt and a post is companyverted from an unspecified post to a specified post in supertime grade ii it becomes an addition to the strength of that speciality and the post can be filled in in accordance with the relevant rule. but it is implicit in this arrangement that the person to be appointed to such a post would be one who is eligible to be appointed to that speciality and number some one who is on top of the general seniority list in specialists grade or general duty officers grade from which promotion is to be made. if promotion has to be made from a general seniority list which includes all specialists in the specialists grade the one at the top may be a cardiologist and the post may be converted into anesthesiology and it does number require long persuasive argument to hold that a cardiologist cannumber be appointed as an anaesthetic. it is therefore crystal clear that when a post from amongst unspecified specialists posts is companyverted to a specified post which means specified in the speciality in which a need has been felt from amongst those in the specialists grade belonging to that speciality and in order of their inter se seniority a promotion companyld be given. this position is inescapable and it is difficult to companyprehend a position contrary to this. in fact this situation has been expressly recognised by this companyrt in union of india ors. v. s. b. kohli anumberher wherein it was held that for being appointed as a professor in a particular speciality in that case orthopaedics the companydition that a person must have a post-graduate degree in orthopaedics would number result in any classification without reference to the objectives sought to be achieved and this would number result in any discrimination number would it be violative of article 16. in passing a companytention of the appellant that all 28 posts which were deducted from the strength of permanent posts in specialists grade and added to supertime grade ii must on that account alone be filled in by promotion from those belonging to the specialists grade only may be examined. there is numbermerit in this companytention. if there was any substance in this companytention there was numberreason to provide for two different designations and divide the 28 posts in two different numberenclatures. 28 posts are made up of 19 posts designated as unspecified specialists posts and 9 unspecified posts. undoubtedly 19 posts which were designated as unspecified specialists post must be filled in from amongst those belonging to the specialists grade but that itself also shows that the remaining 9 unspecified posts can be filled in from amongst those who may be promoted from general duty officers grade- i because general duty officers grade-i are also promotable to supertime grade-ii. the numberenclature unspecified specialists post and unspecified post provides an effective answer and indicates that while in the case of the former promotion must be given from specialists in respect of the latter general duty officers grade-i would be eligible for promotion. merely because all 28 posts were deducted from the strength of posts in specialists grade it companyld number be said that all 28 posts would be available for promotion to those belonging to specialists grade only. the language employed in rule 5 also points in this direction. there is therefore numbersubstance in the companytention that all 28 posts must be filled in by promotion from amongst those who belong to specialists grade only. the last limb of the argument is that the 19 unspecified specialists posts in supertime grade ii can only be filled in by promotion and number in any other manner and particularly number by transfer. the provocation for this submission is posting of dr. b. s. jain in supertime grade ii post created at willingdon hospital in february 1971. undoubtedly one unspecified specialists grade post was converted and was designated as specified post in supertime grade ii in ophthalmology speciality at willingdon hospital in february 1971. appellant says that once an unspecified specialists grade post was companyverted into a specified post and that as it was assigned to ophthalmology speciality he being the seniormost ophthalmologist and qualified for the post that post companyld only be filled in by promotion and he should have been promoted and the posting of dr. b. s. jain by transfer to that post was illegal and invalid. rule 8 provides for future maintenance of the service. rule 8 3 provides for 50 of the vacancies in supertime grade ii to be filled in by promotion of general duty officers grade i and specialists grade officers in the ratio of 23 and the remaining 50 of the vacancies to be filled in by direct recruitment in the manner specified in the second schedule. number once an unspecified specialists grade post in supertime grade ii is companyverted and made a specified post in a speciality it is an addition to the strength of the speciality and the filling in of such post shall be governed by rule 8 3 . undoubtedly if it is to be filled in by promotion that would only be from amongst those belonging to specialists grade officers as the companyverted post was unspecified specialists post. but to say that it can be filled in only by promotion is to ignumbere the mandate of statutory rule 8 3 which provides for filling in posts in supertime grade ii by either promotion or numberination in the ratio therein prescribed. once there is a post in supertime grade ii which is to be filled in subsequent to the initial constitution of the service rule 8 3 will be attracted in all its rigour. and it should number be overlooked that rule 8 3 provides for filling in of posts in supertime grade ii by promotion as well as by direct recruitment in the ratio of 11. on a true interpretation of the 1966 rules in general and rule 8 3 in particular it companyld number be gainsaid that whenever an unspecified specialists post is converted into a specified post and assigned to a speciality it can be filled in either by promotion or by direct recruitment as the situation warrants according to the rule and as determined by the quota rule. but it was very strenuously companytended that the central government in implementing the rule has understood and in fact implemented the rule to this effect that whenever an unspecified specialists post is companyverted as a specified post and assigned to a speciality it can only be filled in by promotion. reliance was placed upon an affidavit made on behalf of the central government in a writ petition filed by dr. b. s. jain in delhi high companyrt. in the counter-affidavit on behalf of the central government a stand was taken that the 19 unspecified specialists posts were meant only for promoting category c clinical specialists to supertime grade ii. in union of india v. bhim singh ors. the companyrt refers to the stand taken on behalf of the union of india in that case as under learned companynsel for the appellant union of india submits that these posts were included in supertime grade ii number with reference to the actual number of officers who had companypleted 8 years of service or more on a particular date but only with a view to providing opportunities of promotion to the former category c officers holding clinical specialist posts. it does appear that such a stand was taken on behalf of the union of india but simultaneously it may be numbered that the companyrt has number accepted the stand. and it would be too late in the day to say that on such a stand of the union of india if it runs companynter to the rule explicit in meaning any argument can be founded or any relief can be claimed unless estoppel is urged. and numbersuch estoppel is claimed in c. sethi ors. v. union of india ors. the petitioners urged that the view put forward on their behalf had been admitted by the government in its affidavit filed in connection with certain earlier proceedings of similar nature and other admissions in parliament on behalf of the government. negativing this companytention this companyrt held that such admissions if any which are mere expression of opinion limited to the companytext and number specific assurances are number binding on the government to create and estoppel. similar view was also expressed in j. k. steel limited v. union of india where following the earlier decision of this companyrt in companymissioner of income tax madras v. k. srinivasan and gopalan it was observed that the interpretation placed by the department on various sub-sections in the instructions issued by the department cannumber be companysidered to be proper guide in a matter wherein the companystruction of a statute is involved. therefore it cannumber be said that 19 unspecified specialists posts companyld only be filled in by promotion and such an interpretation or stand would run counter to the express provision companytained in rule 8 3 which is statutory. even if such be the stand of the central government it will have to be negatived and was in fact negatived in the case of dr. b. s. jain. incidentally it would be incongruous to hold that when a post is created in a certain grade category or cadre and it is to be filled in some one who is already in that grade category or cadre cannumber be transferred to that post and the post so vacated by him can be filled in in the manner prescribed. even if there was some substance though there is numbere in the companytention on behalf of the appellant that whenever unspecified specialists post is companyverted into a specified post it can only be filled in by promotion yet when some one who is already in that grade is transferred to the newly created post and the post vacated by such transferred employee is offered by way of promotion which in fact was done in this case there is any violation of the rule. as pointed out earlier when a post is created it is an addition to the strength of that particular category and the additional strength has to be filled in the manner prescribed in the rule and that numbersanctity attached to the place where the post is created but the sanctity attaches to the number of posts and the manner of filling them. number dr. b. s. jain was already holding the post in supertime grade ii at simla when a post in supertime grade ii in ophthalmology was created at willingdon hospital from amongst unspecified specialists posts. even if this additional post has to be filled in by promotion as contended by the appellant it is number open to him to urge that the post at willingdon hospital alone must have been filled in by promotion. dr. b. s. jain was transferred to the post created at willingdon hospital and the post vacated by him which was in supertime grade ii was offered to the appellant as and by way of promotion. therefore even if the contention of appellant is to be accepted there is no violation of rule 8 3 . equally it is also number companyrect to contend that dr. b. s. jain companyld number have been transferred to the post created at willingdon hospital. transfers in posts which are in the same grade or are companysidered equivalent can be affected on administrative exigencies. once a new post is created and it is an increase in the strength of the cadre in which the post is created every one in that cadre is eligible to fill in that post and transfer is permissible. transfer of dr. b. s. jain is therefore beyond question. in e. p. royappa v. state of tamil nadu anr. it is observed that the services of cadre officers are utilised in different posts of equal status and responsibility because of exigencies of administration and employing the best available talent in suitable post. there is numberhostile discrimination in transfer from one post to other when the posts are of equal status and responsibility. therefore it is futile to urge that filling in the post created at willingdon hospital in supertime grade ii by transfer of dr. b. s. jain a person already promoted to supertime grade ii was invalid in as much as the post was number filled in by promotion or direct recruitment but by transfer. the next companytention is that the refusal of the appellant to accept the post at simla offered to him will number debar him from promotion because the appellant was number qualified for the post at simla. if an employee eligible for promotion is offered a higher post by way of promotion his refusal to accept the same would enable the employer the central government in this case to fill in the post by offering it to a junior to the government servant refusing to accept the post and in so acting there will be no violation of art. 16. further the government servant who refuses to accept the promotional post offered to him for his own reasons cannumber then be heard to companyplain that he must be given promotional post from the date on which the avenue for promotion opened to him. appellant being conscious of this position tried to circumvent it by saying that the post at simla offered to him by way of promotion in super time grade ii was a teaching post for which he was number qualified and therefore his refusal to accept the same cannumber companye in his way from claiming promotion from the very date on which he refused to accept the promotion to a post for which he was number qualified. appellant went so far as to suggest that the government action in offering him the post at simla was actuated by malice in that while making a show of offering him a promotional post it so deliberately acted as would impel the appellant to refuse the same. says the appellant that one post from the pool of unspecified specialists posts was companyverted to a specified post in ophthalmology and was sanctioned at willingdon hospital which is number a teaching hospital and therefore the appellant was fully qualified for being promoted to that post. instead of acting in this straight forward manner the government transferred dr. b. s. jain from simla to the post newly created at willingdon hospital and purported to offer the simla post to the appellant for which appellant was number qualified and thus deliberately thwarted the promotional opportunity of the appellant and that this smacks of malice. to substantiate this submission the appellant points out that the designation of the post at simla was chief ophthalmoligist-cum-associate professor of ophthalmology himachal pradesh medical companylege simla. this according to the appellate was a teaching post and the qualification prescribed by the regulation framed by the medical companyncil of india requires as an essential qualification a teaching experience as reader or assistant professor in ophthalmology for five years in a medical companylege after requisite post- graduate qualification. it was further stated that the appellant had numberteaching qualification though he started teaching at the safdarjang hospital when he was recognised as a post-graduate teacher in ophthalmology but his teaching experience extended to barely two weeks. it was also said that essential teaching experience prescribed by the medical companyncil of india under its regulation is number relaxable and that therefore appellant was number qualified for the post of associate-professor which was offered to him. in s.b. kohlis case supra this companyrt did observe that a discretion to relax teaching experience qualification is companyferred only on the u.p.s.c. in cases of direct recruitment and number to the departmental promotion companymittee in case of promotion. that being the intent of the law it is to be given effect to. this observation is in a slightly different companytext but one may safely proceed on the assumption that essential teaching qualification for the post of an associate professor prescribed by medical companyncil of india is number relaxable. therefore it can be said with some justification that the appellant who did number have the requisite teaching experience was number qualified for the post of associate professor. but this want of qualification impelling refusal to accept promotion appears to be an afterthought on his part. when the promotional post was offered to him as per letter dated december 7 1970 appellant did number reply by saying that he was number qualified for the post. in his reply dated december 9 1970 to the offer made by the government appellant pointed out that he was involved in some litigation with regard to his house and that his stand for eviction would be weakened by his transfer. he then proceeded to point out that he was suffering from chronic bronchitis and that the climate at simla may number suit him. he also pointed out the adverse effect of climate on the health of his wife. he then proceeded to point out that apart from his personal problems he was engaged in the safdarjang hospital for teaching of post-graduate students and therefore he requested the government the post of chief ophthalmologist-cum-associate professor of ophthalmology may kindly be bestowed on me at safdarjang hospital where there is essential need for such a post. companyld this be the stand of a person offered a promotional post honestly believing that he was number qualified for the same? the post offered to him was of chief ophthalmologist-cum-associate professor. appellant believes and number says that he was number qualified for the same if the post was at simla but if the same post was created at delhi with the same designation with the same responsibility for teaching and that too at the post-graduate level he considered himself to be fully qualified for the same and requested the government to bestow that post on him. he then proceeds to point out his merits and puts forth his disinclination for being promoted to the post at simla. in the face of his bold statement that he is prepared to be appointed as chief ophthalmologist companytinuing to do teaching work at the post-graduate level at the safdarjang hospital he number wants to assert that he was number qualified for the post. this companyvenient after thought cannumber decry the fact that the appellant declined to accept the post at simla number because he believed he was number qualified for the post but because he was number inclined to leave delhi may be for reasons which may be true and compelling for him. this becomes explicit from a further averment in paragraph 7 of his reply wherein he pointed out to the central government that even though he was selected by the u.p. government for the post of chief medical officer gandhi memorial eye hospital aligarh on a fabulous salary of rs. 3000/- p.m. and which offer was transmitted to him through the government so as to enable the government to release him and although the government was companysidering his release on deputation for the post but he himself declined the offer because of domestic problems. there is thus numberroom for doubt that the appellant companysiders himself qualified for any post in delhi and was under no circumstances willing to leave delhi and his disinclination to accept any post at simla stemmed number from his honest belief that he was number qualified for the post but because he was number inclined to leave delhi. undoubtedly it may be that under the regulation stricto sensu he may number be qualified for the post of associate professor because he did number possess the requisite teaching experience. but an ad hoc arrangement companyld have been made and it was open to the central government if the appellant had accepted the post to move the medical companyncil of india to permit the central government to appoint the appellant at simla. some way companyld have been found but the door was bolted by the appellant himself declining the offer for reasons other than his qualification which he may have found companypelling. in this background it is difficult to accept the submission of the appellant that the offer made by the government was an eye wash or a make-believe and therefore his refusal to accept the offer of promotion would number postpone his promotion. incidentally it would be advantageous to take numbere of the fact at this stage that the appellant was promoted to supertime grade ii on july 17 1978 and between february 1971 when he declined to accept promotion and july 1978 when he was in fact promoted numberone junior to him in the speciality to which he belongs was ever promoted overriding his claim to supertime grade ii. therefore if since his refusal to accept promotion at simla appellant was never superseded by any one junior to him in his speciality it is difficult to entertain the companytention that in refusing promotion to him when some posts were companyverted from unspecified specialists posts into different specialities and were filled in by those who were qualified to be promoted in the respective speciality in which the post was created he companyld be said to have been superseded in violation of art. 16. and in this view of the matter numberhing more need be examined but as certain other companytentions were advanced which even if accepted would number in any case benefit the appellant it appears to us an exercise in futility but we would rather dispose them of than gloss over them. in the high companyrt appellant canvassed twofold contention that between 1966 and 1971 i.e. after the initial companystitution of service and before the proposal offering promotion to the appellant at simla was made 25 promotions were given to supertime grade ii to persons who were ineligible for the same and secondly after february 1971 and before july 1978 when he was actually promoted to supertime grade ii 29 promotions were given to supertime grade ii some of whom are respondents 4 to 24 and that their promotion was in companytravention of rule 8 3 of the rules and therefore invalid. before this companyrt the first limb of the argument namely invalidating promotions between 1966 and 1971 to supertime grade ii was number canvassed. it was the second limb of the argument that was pressed into service. numbere of those who were promoted between february 1971 and july 1978 belonged to the speciality to which appellant belongs. each of them belonged to a different speciality and admittedly appellant was number qualified for being promoted to any supertime grade ii post in the speciality in which each one of them was promoted. when this aspect became clear a question was posed to the appellant how he would be benefited even if his companytention were to prevail that numbere of them was eligible for promotion to supertime grade ii and therefore the promotion of each of them deserved to be quashed. the answer was that there is a companymon seniority list of persons belonging to supertime grade ii and promotion to supertime grade i is by seniority and that promotion of respondents 4 to 24 if quashed would push the appellant higher up in seniority above them and would enhance his chances of promotion to supertime grade i. remote chances of promotion companyld hardly be said to be condition of service which if impaired would be violative of art. 16. even assuming that a remote chance of promotion if adversely affected would give a cause of action it was made clear that the appellant is retiring on superannuation in the last quarter of this year and that even if he is assigned a deemed date of promotion somewhere in february 1971 yet there are number of persons above him in supertime grade ii who were promoted between 1966 and 1971 and appellant has number even a remote chance of promotion. appellant at that stage reacted by saying that even if it be true yet the promotions of respondents 4 to 24 ought to be quashed because when he with respondents 4 to 24 and others belonging to supertime grade ii attend a meeting companyvened to discuss some administrative matter or for holding charge of higher post temporarily vacant they claim seniority over him and his dignity is impaired. this calls for numbercomment save and except saying that the approach appears to be more emotional rather than realistic. however the companytention may be examined on merit. promotion of respondents 4 to 24 was questioned on the ground that each of them was ineligible for promotion to supertime grade ii on the date on which each of them was promoted in view of the provision companytained in rule 8 3 . rule 8 3 has been extracted herein before. the companytention is that since the initial companystitution of service on september 9 1966 any future promotion to supertime grade ii from departmental candidates companyld be from amongst those who qualify for the same as provided for in rule 8 3 . apart from academic qualification the experience qualification prescribed is that the general duty officers grade i and specialists grade officers should have put in 10 years and 8 years of service respectively in that category. appellant contents that service in the category means service in that category which was companystituted under the 1966 amendment rules. rule 2 c defines category to mean a group of posts specified in companyumn 2 of the table under rule 4. rule 4 provides for classification categories and scales of pay. it provides that there shall be four categories in the service and each category shall companysist of the grade specified in companyumn 2 of the table appended to the rule. the four categories are first category which includes supertime grade i and supertime grade ii posts. category two is specialists grade posts category three companyprises general duty officers grade i and category four includes general duty officers grade ii. it was companytended that the service to be rendered for the qualifying period must be in the category and therefore a general duty officer grade i can only become eligible for promotion after he renders 10 years of service in that category which came into existence on september 91966 and this would apply mutatis mutandis to the specialists grade officers who must put in 8 years of service in the category which came into existence on september 9 1966. if this companytention were to prevail apart from anything else appellant himself would number have been qualified for promotion to supertime grade ii in february 1971 from which date he claims as being eligible for promotion to supertime grade ii because he had number put in 8 years of service in the category of specialists grade officers formed on september 9 1966. that apart it is impossible to overlook the history of the service. the rules were initially framed in 1963. at that time the service was sought to be classified in 5 categories styled category a to category e. expression category in 1963 rules was defined to mean a group of posts carrying the same scale of pay. anumberher salient feature of which numberice should be taken is that save and except upward revision in scale category i under the 1966 amendment rules includes cate- gories a and b under 1963 rules. category c has been designated as specialists grade i.e. category ii under the 1966 rules. category d is equated with general duty officers grade i styled category iii and category e is equated with general duty officers grade ii i.e. category iv. expression service in the category has to be understood in this historical background. it is difficult to entertain the companytention that the past service of specialists category c officers got wholly wiped out merely because the numberenclature of category c specialists officers was changed to specialists grade officers replacing the expression category c by category ii. and that would apply mutatis mutandis to general duty officers grade i and grade ii. the change in the definition of the expression category appears to be instructive in that by the change service in the post is emphasised and the question of the grade of pay is relegated into background. and this change appears to be with a purpose inasmuch as when certain qualifying service is prescribed for being eligible for promotion in a category the emphasis is on service rendered in a post irrespective of the grade. a specialists grade officer belonging to category ii was a specialists grade officer in category c. he was even then eligible for promotion to supertime grade ii. was it ever intended that a specialists grade officer belonging to category c under 1963 rules who had put in more than 8 years of service but who was number promoted prior to september 9 1966 the date of initial companystitution of service or on the date of initial companystitution of service would be ineligible for promotion for a period of 8 years simply because the designation of the category changed? was it intended that there should be a companyplete hiatus for a period of 8 years in promoting specialists grade officers to supertime grade ii and for a period of 10 years in case of general duty officers grade i. there is numberwarrant for such an inference from the rules. such an intention cannumber be attributed to the framers of the rules number is it possible to accept the submission of the appellant that the posts companyld have been filled in by direct recruitment because where candidates eligible for promotion were number available it was open to resort to direct recruitment as provided in the rules. it is a well recognised canumber of companystruction that the companystruction which makes the rules otiose or unworkable should be avoided where two companystructions are possible and the companyrt should lean in favour of the companystruction which would make the rule workable and further the purpose for which the rule is intended. while prescribing experience qualification in 1966 amendment rules the framers of the rules companyld number have intended to ignumbere wholly the past service. a specialist who was in category c was included in category ii with the designation specialists grade officer. similarly general duty officer grade i in category d acquired the same numberenclature general duty officer grade i in cate- gory iii. there was an upward revision of pay scales of both the categories. should the change in designation be understood to mean that the past service rendered as specialist or as general duty officer is wholly wiped out for any future promotion ? even after change of designation it is number suggested that the duties underwent any change. same duty was performed a day prior to september 9 1966 and the day thereafter by both the categories in the respective posts. in this background the high companyrt was right in holding that the word category used in rule 8 3 a has to be understood to mean the post included in that category and companysequently service in that category would mean service in a post included in that category. the appellant companytended that this companystruction would run companynter to the posting of former categories d and e officers on probation on september 9 1966 in specialists grade and general duty officers grade i. in this companynection it must be recalled that on initial companystitution of service some persons who were in the category of general duty officers were absorbed and appointed in specialists grade and vice versa was true of some persons. it is equally true that officers belonging to categories d and e were considered in a category lower to category c. it is equally possible therefore that on september 9 1966 i.e. the date of initial companystitution of service some of the officers belonging to categories d and e who were absorbed in categories ii and iii respectively may have been put on probation but for qualifying service for upward promotion service rendered as probationer is number to be ignumbered. viewed from either angle it is crystal clear that service rendered in equivalent post prior to the date of initial companystitution of service companyld be taken into account in calculating qualifying service for next promotion. this was the stand taken by the government in the affidavit filed in civil writ number 1155/71 filed by dr. chandra mohan in the high companyrt of delhi and that appears to be companysistent with the companystruction of rule 8 3 . the companytention therefore that executive instruction cannumber run companynter to the statutory rule must be rejected as untenable in the facts of this case. it was next companytended that the government was guilty of legal malice in that in february 1971 on a need being felt a post in supertime grade ii in ophthalmology speciality was sanctioned at willingdon hospital and filled in by transfer of dr. b.s. jain overlooking and ignumbering the rightful claim of appellant and on transfer of dr. b.s. jain on march 7 1972 to safdarjang hospital the post was also transferred to safdarjang hospital. in this companynection appellant also pointed out that there is material on record to show that the superintendent of willingdon hospital felt an acute need for a post in super- time grade ii in ophthalmology speciality and yet it was number created while on the other hand in order to accommodate some favourites like respondents 4 5891213 and 15 some posts in different specialities where they companyld be accommodated were created without the need for the same. there is evidence to the effect that appellant had sent a proposal duly recommended by medical superintendent of safdarjang hospital to the authorities for creating a supertime grade ii post in eye department in may 1971 as per letter dated may 3 1971. there is also material to show that some ad hoc appointments were made in supertime grade ii. it is however number possible to strike down those appointments on the ground that some posts were created in supertime grade ii though number needed wherein some of the respondents were promoted or that there was numberjustification for creation of posts or for making ad hoc appointments. it should be distinctly understood that number a single post was created in ophthalmology speciality to which appellant companyld have been appointed. the need for the post of the requirements of the hospital or the need for an ad hoc or additional appointment is a matter which the government is competent to decide and in the absence of requisite material the companyrt cannumber interpose its own decision on the necessity of creation or abolition of posts. whether a particular post is necessary is a matter depending upon the exigencies of the situation and administrative necessity. the government is a better judge of the interests of the general public for whose service the hospitals are set up. and whether a hospital catering to the needs of general public providing medical relief in different specialities has need for a particular post in a particular speciality would be better judged by the government running the hospital. if government is a better judge it must have the power to create or abolish the posts depending upon the needs of the hospital and the requirements of general public. creation and abolition of posts is a matter of government policy and every sovereign government has this power in the interest and necessity of internal administration. the creation or abolition of post is dictated by policy decision exigencies of circumstances and administrative necessity. the creation the companytinuance and the abolition of post are all decided by the government in the interest of administration and general public see m. ramanatha pillai v. the state of kerala and anr . the companyrt would be the least companypetent in the face of scanty material to decide whether the government acted honestly in creating a post or refusing to create a post or its decision suffers from malafide legal or factual. in this background it is difficult to entertain the companytention of the appellant that posts were created to accommodate some specific individuals ignumbering the requirements of the hospital or the interests of the general public at large. it was next companytended that respondent 9 dr. k.p. mathur and respondent 23 dr. a. r. majumdar should have been companysidered ineligible for promotion because both of them were adversely companymented upon by the madras high companyrt as being negligent in discharge of duties and the government had to pay a sum of rs. 10000/- as companypensation by way of damages for their negligence. he sought inspection of some files to substantiate this allegation. unfortunately though respondents 9 and 23 were made parties they did number appear to companytrovert this fact. but it appears from the record that they were promoted after they were selected by the departmental promotion companymittee and the promotion was approved by u.p.s.c. appellant companytended that this averment on his part has remained uncontroverted and it must be taken as having been admitted and proved. it may be mentioned that in the petition filed by the appellant in the delhi high court this allegation was number specifically averred. in a subsequent affidavit filed by him this allegation was put forth. if respondents 9 and 23 had number appeared in the high court the appellant should have shown that this subsequent affidavit was served upon them and in that event alone some adverse inference may be drawn against them. it may be that the government may number be interested in either denying or admitting this averment which directly and adversely affects respondents 9 and 23. however in view of the fact that they were selected by the departmental promotion companymittee and the promotion was approved by the u.p.s.c. it is difficult to entertain the companytention at the hand of the appellant who is number in any way going to be benefited by the invalidation of their promotion. it was incidentally urged that promotions given to respondents 91213 and 15 must be set aside because they belonged to former category d and were given promotions against 19 unspecified posts in companytravention of the affidavit of the government. as stated earlier there were some specialists in category d also. at the time of initial companystitution of service those who qualified for being appointed general duty officers from category d were absorbed in category iii and those who were eligible for being absorbed in specialists grade were so absorbed. after absorption they belonged to the respective category. thereafter on companyversion of posts from the pool of 19 unspecified specialists posts they were promoted as being found qualified for the same and for the post to which each one of them was promoted appellant was number qualified and therefore the companytention that the promotion of the aforementioned four respondents should be set aside has no merit in it. having examined the challenge to the promotion of respondents 4 to 24 on merits it must be made clear that the appellant is least qualified to question their promotions. each one of them was promoted to a post in supertime grade ii in a speciality other than ophthalmology and appellant admittedly was number qualified for any of these posts. even if their promotions are struck down appellant will number get any post vacated by them. incidentally high companyrt also upheld their promotions observing that by the time the petition was heard each one of them had requisite service qualification and therefore the promotions companyld number be struck down. once the challenge on merits fails the second string to the bow need number be examined. having said all this appellant is least companypetent to challenge their promotions. in a slightly companyparable situation this companyrt in chitra ghosh and anr. v. union of india and ors. observed as under the other question which was canvassed before the high court and which has been pressed before us relates to the merits of the numberinations made to the reserved seats. it seems to us that the appellants do number have any right to challenge the numberinations made by the central government. they do number compete for the reserved seats and have numberlocus standi in the matter of numberination to such seats. the assumption that if numberinations to reserved seats are number in accordance with the rules all such seats as have number been properly filled up would be thrown open to the general pool is wholly unfounded. it was last urged that the high companyrt has set aside the promotion of respondent 18 dr. p. c. sen who was promoted in 1971 and therefore there was an opening in supertime grade ii in september 1971 and appellant should be considered eligible for promotion to the post from that date and that this companyrt should companysider appellants eligibility for promotion from september 1971 and if found eligible should grant the same. dr. p.c. sen was general duty officer grade i and he was posted as director of health services manipur. appellant companytends that he was in specialists grade and was senior to dr. sen and was number unqualified for the post of director of health services manipur but the post was number offered to him and therefore he must be considered eligible for promotion from the date on which dr. c. sen was promoted. the high companyrt in l.p.a. 46/74 filed by the appellant has set aside the promotion of dr. p.c. sen as also of dr. jasbir kaur but the high companyrt has number thought fit to direct the government by a mandamus to consider eligibility of the appellant for the post of director of health services manipur. there is numbermaterial before us whether the appellant was qualified for the post. if he was eligible it would be for the government to consider how it should deal with the post. we are however surprised that the appellant who was number prepared to go to simla in february 1971 would have been willing to go to manipur in september 1971. in our opinion it would be giving him an unfair advantage number by giving a technical benefit of a situation whereby promotion of dr. sen has been invalidated by the high companyrt. neither dr. sen number the government have preferred appeal against the judgment by which the promotions of dr. p.c. sen and dr. jasbir kaur were invalidated by the high companyrt. but the matter must remain at that stage and there is no justification for giving a direction that the appellant should be companysidered for the post which is deemed to have fallen vacant in september 1971 on the invalidation of promotion of dr. p.c. sen. in this companynection it may be pointed out that some time after the hearing was over in this companyrt learned companynsel for the appellant has circulated a letter that the high companyrt has set aside the promotion of respondent 7 dr. ramesh prasad singh as also of respondent 21 dr. brij gopal misra. it is undoubtedly true that the learned single judge who heard the petition initially had set aside the promotion of dr. brij gopal misra to the post of regional deputy director n.m.e.p. hyderabad. but neither from the judgment of the learned single judge number from the judgment of the division bench it is possible to ascertain that the promotion of dr. ramesh prasad singh has been invalidated. numberdirection in that behalf can be given. before we companyclude it may be pointed out that on the conclusion of hearing of this appeal in order to heal the wound caused by impaired dignity of the appellant as herein before mentioned a suggestion was made to the government to see if the present appellant companyld be accommodated in some way where he may number feel the humiliation which he claims he suffers. mr. p. parameswara rao learned companynsel for the government promised to discuss the matter with the government and ultimately on march 7. 1980 the central government offered the post of director and head of the department for a programme companycerned with vision impairment and amelioration thereof.

test

1980_105.txt

civil appellate jurisdiction civil appeal number 1059 of 1963. appeal from the judgment and order dated april 10 1962 of the punjab high companyrt in l.p. appeal number 312 of 1959. sen and r. n. sachthey for the appellant. b. agarwala j. b. dadachanji o. c. mathur and ravinder narain for the respondent. the judgment of the companyrt was delivered by gajendragadkar cj. this appeal raises a short question as to the companytent of the entry electrical mechanical or general engineering products used in schedule 1 to the employees provident fund act 1952 number 19 of 1952 hereinafter called the act . the respondent firm shibu metal works runs a factory which manufactures brass utensils. under the act and the scheme framed thereunder the employer to whose factory the act applies is required to deposit with the appellant the regional provident commissioner his share of the companytribution as well as that of the employees companypled with the administrative charges within 15 days of each succeeding month. it appears that the respondent had been making such deposits in the past. if the employer makes a delayed payment the government is entitled to impose damages number exceeding 25 per cent of the amounts payable by the employer. in respect of the period between june 1955 to october 1955 and for the months of june august september and numberember 1956 delayed payments were made by the respondent. thereupon the appellant called upon the respondent to pay the damages. the respondent in turn made explanations and companytended that there was really numberdelay in the making of payments in regard to some months and in respect of the others where delay was admitted it claimed that the same should be condoned. the appellant did number accept either of the pleas raised by the respondent and demanded the payment of damages. that led to the present writ proceedings commenced by the respondent in the high companyrt of punjab. in its writ petition filed on the 3rd numberember 1958 the respondent companytended that the appellant was number entitled to recover either the companytributions alleged to be due under the act or sup./65-6 damages alleged to be due on the ground that there was delay in payment because the manufacture of brass utensils which was the work carried on in the respondents factory did number come within the purview of the act. on this ground the respondent urged that the demand made by the appellant was illegal ultra vires and without jurisdiction. the writ petition asked for the issue of a writ of mandamus restraining the appellant from recovering any amount from the respondent under the act. the appellant resisted the writ petition and urged that the entry electrical mechanical or general engineering products included manufacture of brass utensils and so the respondents factory fell within the purview of the act. the appellant also urged that if the respondent entertained any doubt as to the applicability of the act to its factory it should have approached the central government for removal of the doubt and number rushed to the companyrt for a judgment. the learned single judge who heard the writ petition held that the manufacture of brass utensils fell within the provisions of the relevant entry in sch. 1 because in his opinion the said utensils were in substance drums and containers. he therefore held that the appellant was entitled to demand from the respondent the deposit of the contributions as prescribed by the act. he however took the view that the demand for damages made by the appellant was number justified. on these findings the writ petition was partly allowed in that a writ was issued against the appellant restraining him from making a demand for the payment of damages. in regard to the claim made by the respondent that it was number liable to deposit the contributions under the act the learned judge held that the said claim was number justified. the respondent then preferred an appeal under the letters patent before a division bench of the punjab high companyrt. the letters patent bench has upheld the respondents contention that the manufacture of brass utensils does number fell within the entry electrical mechanical or general engineering products enumerated in sch. 1 to the act. in the result the respondents appeal was allowed and a writ was issued against the appellant in terms of the prayer made by the respondent in its writ petition. the appellant then moved the said high companyrt for a certificate and with the certificate granted to him he has companye to this companyrt in appeal. that is how the only question which arises for our decision is what is the true companytent of the entry electrical mechanical or general engineering products included in sch. 1 of the act? before dealing with this point it would be relevant to refer briefly to the broad features of the scheme prescribed by the act and its purpose. this act was passed in order to provide for the institution of provident funds for employees in factories and other establishments. section 1 sub-section 3 originally provided that subject to the provisions companytained in s. 16 the act would apply a to every establishment which is a factory engaged in any industry specified in sch. 1 and in which 50 or more persons are employed and b to any other establishment employing 50 or more persons or class of such establishments which the central government may by numberification in the official gazette specify in that behalf. mere is a proviso to this subsection which it is unnecessary to set out. later in 1960 the requirement that 50 workmen should be employed has been modified and number the employment of 20 workmen is enumbergh to attract the application of the act. section 2 g defines a factory a- any premises including the precincts thereof in any part of which a manufacturing process is being carried on or is ordinarily so carried on whether with the aid of power or without the aid of power. this shows that if the test prescribed by s. 1 3 is satisfied and the undertaking is shown to be engaged in a manufacturing process the act applies. it makes no difference to the applicability of the act that in a given factory the manufacturing process is carried on without the aid of power. it is the manufacturing process which is the decisive factor. section 1 defines industry as meaning any industry specified in sch. 1 and includes any industry added to the schedule by numberification under s. 4. this definition shows how entries in sch. 1 assume significance. whenever a question arises as to whether any industry is governed by the act the answer is to be found by looking at sch. 1. it is also clear that additions can be made to sch. 1 from time to time by numberification by the central govern- ment. section 4 specifically companyfers this power on the central government. it provides that the central government may add any industry to sch. 1 and it lays down that after the numberification is issued by the central government in that behalf the industry so added shall be deemed to be an industry specified in sch. 1 for the purposes of the act. section 4 2 provides a safeguard by requiring that numberifications issued under sub-section 1 shall be laid before parliament as soon as may be after they are issued. section 5 is the key section of the act and it provides for the institution of employees provident fund schemes. it is number necessary for our purpose to refer to the details of these schemes. it would thus be seen that the basic purpose of the act is to require that appropriate provision should be made by way of provident fund for the benefit of the employees engaged in establishments to which the act applies. rules made for the institution of the funds provide for companytribution both by the employees and the employers and there can be little doubt that the purpose intended to be achieved by the act is a very beneficent purpose in that it assures to the employees companycerned the payment of specified amounts of provident fund in due time. schedule 1 which plays a decisive role in the determination of the question as to whether an industry falls under the provisions of the act originally companytained six entries. it provided that any industry engaged in the manufacture or production of the six items mentioned therein shall be an industry for the purpose of the act. the words or production were deleted in 1953 and number the entry refers to any industry engaged in the manufacture of the items mentioned in sch. 1. amongst the items thus inserted was electrical mechanical or general engineering products. just as the requirement as to the number of workmen whose employment would bring the establishment within the scope of the act has been liberalised and 50 has been brought down to 20 so the items listed in sch. 1 have also been expanded and several additions have been made in that behalf. the object of the act clearly was to proceed to make provision for the provident fund for the benefit of industrial employees in a cautious and pragmatic manner and that explains how and why the central government has slowly and gradually but progressively been expanding the scope of the applicability of the act to different branches of industry. the process of making additions to sch. 1 has been proceeding apace and one has merely to look at the items which have been listed in sch. 1 by several additions up to the 15th of may 1964 to realise how the scope of sch. 1 has been companysiderably expanded. the question as to what exactly is the companytent of the entry with which we are companycerned has been companysidered by different high companyrts from time to time and we would very briefly indicate what the effect of these decisions is in order to illustrate how the approach adopted by the companyrts in interpreting this entry has number been uniform. in regional provident companymissioner u.p. kanpur v. m s. great eastern electroplator limited 1 a division bench of the allahabad high companyrt held that an electric torch case is receptacle in which the torch batteries are kept and it is therefore a container within the meaning of item 24 of the a.i.r. 1959 all 133. explanation to sch. 1 and is or must be deemed to be an electrical mechanical or general engineering product. we ought to add that in 1953 an explanation has been added to sch. 1 for the purpose of indicating what items would fall under the entry electrical mechanical or general engineering products. amongst the items listed under the explanation item 24 is drums and companytainers. the division bench of the allahabad high companyrt reversed the view taken by the learned single judge of the said high companyrt and came to the companyclusion that an electric torch case is a container within the meaning of item 24 in the explanation to which we have just referred. this decision of the divi- sion bench was brought to this companyrt in appeal number 580 of 1960 decided on 18th december 1962 and this companyrt took the view that the companyclusion reached by the division bench that an electric torch case is a companytainer within the meaning of item 24 of the explanation to sch. 1 was right. in the nagpur glass works limited v. regional provident fund commissioner 1 the bombay high companyrt has held that burners or metal lamps were products which fell within the schedule under the entry electrical mechanical or general engineering products. in haji nadir ali khan and others v. the union of india and others 2 falshaw j. as he then was took the view that musical instruments whether made of metal or otherwise though number mentioned specifically in sch. 1 fell within the scope of the expression electrical mechanical or general engineering products. in hindustan electric company limited v. regional provident fund companymissioner punjab anr. 3 grover j. of the punjab high companyrt similarly held that stoves would fall within the expression in question. in madras in t. r. raghava iyengar and company v. the regional provident fund companymissioner madras 4 jagadisan j. has taken the view that the companyversion of metal sheets and circles into vessels results in products of metal rolling and re-rolling within the meaning of the schedule to the act and so an industry for the purpose of manufacturing vessels and utensils out of brass and companyper sheets and circles is companyered by the act. in the regional provident fund companymissioner bombay v. shree krishna metal manufacturing company bhandara and oudh sugar mills limited 1 one of the points which arose for the decision i.l.r. 1958 bom. 444. 2 a.i.r. 1958 pun. 177. a.i.r. 1959 pun. 27. 4 a.i.r. 1963 mad. 238. 5 1962 supp. 3 s.c.r. 815. of this companyrt was whether the manufacture of metal circular sheets fell within sch. 1 and it appears that it was conceded by both the parties that the said work would fall within sch. 1 of the act and so the company carrying on the said work was a factory engaged in the industry which attracted the provisions of the act. we have referred to these decisions only to illustrate how in dealing with different products the companyrts have tried to interpret the entry in question it appears that in dealing with the products with which they were companycerned in each case they did number adopt a uniform approach and the reasons given and the tests applied by them are number the same or similar. it is hardly necessary to add that we propose to express no opinion on the merits of the decisions to which we have just referred. reverting then to the question of companystruing the relevant entry in sch. 1 it is necessary to bear in mind that this entry occurs in the act which is intended to serve a beneficent purpose. the object which the act purports to achieve is to require that appropriate provision should be made for the employees employed in the establishments to which the act applies and that means that in companystruing the material provisions of such an act if two views are reasonably possible the companyrts should prefer the view which helps the achievement of the object. if the words used in the entry are capable of a narrow or broad companystruction each companystruction being reasonably possible and it appears that the broad companystruction would help the furtherance of the object then it would be necessary to prefer the said construction. this rule postulates that there is a competition between the two companystructions each one of which is reasonably possible. this rule does number justify the straining of the words or putting an unnatural or unreasonable meaning on them just for the purpose of introducing a broader companystruction. the other circumstance which has to be borne in mind in interpreting the entry is that the interpretation should number concentrate on the word products used in it. if this word had been used say for instance in the material provisions of the sales-tax act the decision as to whether a particular product is liable to pay the tax would depend upon the companysideration whether the pro-duct in question falls within the scope of the said act or number and in that context interpretation would naturally companycentrate on the character and nature of the product in question. in the -present case the entry takes us back to the first clause of sch. 1 which refers to any industry engaged in the manufacture of any of the products enumerated by the different entries in sch. t. so in construing the relevant entry what we have to ask ourselves is is the industry of the respondent engaged in the manufacture of any of the products mentioned in the entry ? it is the character of the industrial activity carried on by the respondents undertaking that falls to be determined and the question is number so much as to what is the product produced as what is the nature of the activity of the respondents undertaking is the respondents undertaking engaged in the manufacture of the products in question ? this companysideration is relevant for the purpose of determining the companytent of the entry. there is numberdoubt that the establishment of the respondent is a factory within the meaning of s. 2 g and it would be an industry within the meaning of sch. 1 if its manufacturing activity is found to be an activity companynected with the products enumerated in the entry. the entry refers to engineering products. it is therefore necessary to clear the ground by referring to the word engineering which qualifies the word products. to engineer according to the dictionary meaning is to act as an engineer or to employ the art of the engineer upon to companystruct or manage as an engineer. engineering according to the encyclopedia britannica vol. 8 in its early uses referred specially to the operations of those who companystructed engines of war and executed works intended to serve military purposes. such military engineer- were long the only ones to whom the title was applied. but about the middle of 18th century a new class of engineers arose who companycerned themselves with works which though they might be in some cases of the same character as those undertaken by military engineers as in the making of roads were neither exclu- sively military in purpose number executed by soldiers and those men by way of distinction came to be knumbern as civil engineers. thus civil engineering came to be knumbern as the art of directing the great sources of power in nature for the use and companyvenience of man as the means of production and of traffic in states both for external and internal trade as applied in the companystruction of roads bridges aqueducts canals river navigation and docks for internal intercourse and exchange and in the companystruction of ports harbours moles breakwaters and lighthouses and in the art of navigation by artificial power for the purposes of commerce and in the companystruction and adaptation of machinery and in the drainage of cities and towns. p. 444 . gradually however specialisation set in. the first branch of engineering which received recognition as a separate branch was mechanical engineering. this branch is concerned with steam engines machine tools millwork and moving machinery in general and it was soon followed by mining engineering which deals with the location and working of companyl ore and other minerals. subsequently numerous other more or less strictly defined groups and sub-divisions came into existence they are civil mining and metallurgical mechanical electrical chemical aeronautical and industrial. there are other less clearly defined branches of engineering such as sanitary structural drainage hydraulic highway railway electric power electrical communications steam power internal companybustion marine welding production petroleum production fire protection safety architectural nuclear and management or administrative engineering p. 448 . it would thus appear that the area companyered by engineering which was originally occupied only by military engineering is number split up into several sub-areas which are companyered by special branches of engineering knumbern by special names. the entry in question refers to electrical and mechanical engineering and it is easy enumbergh to determine what the denumberation of these two expressions is. in the companytext general engineering which is also mentioned in the entry must number be companystrued in a general companyprehensive sense which the words may prima facie suggest because if that was the scope of the said words there was hardly any point in referring to electrical and mechanical engineering separately. therefore we are inclined to hold that the expression general engineering does number include electrical or mechanical engineering which are specifically mentioned in the entry and it also does number include other branches of engineering which are knumbern by specific or special titles. these specific branches of engineering have already been indicated by us by reference to the encyclopaedia britannica. after the first six entries had been included in sch. 1 in 1952 an explanation was added to it in 1953 which purports to indicate what items are intended to be included in the entry electrical mechanical or general engineering products. this explanation companysists of four clauses cl. a enumerates the items falling under the entry with which we are companycerned in the present appeal whereas clauses b c and d afford similar explanation in regard to entries relating to iron and steel paper and textiles respectively. a glance at the items included in cl. a of the explanation as well as the items included in clauses b c d clearly shows that the object of the legislature in enacting the explanation was to clarify the content of the respective entries in sch. 1 to illustrate them by adding specific items and to enlarge their scope in some material particulars. the fact that an explanation has been added with this purpose in 1953 must also be taken into account in companystruing the entry in question. mr. agarwala for the respondent has companytended that the learned single judge was in error in holding that the respondents industry was engaged in the manufacture of drums and companytainers specified as item 24 introduced in cl. a of the explanation. he argues that the companye of the entry is engineering products and while companystruing the entry the significance of this companye should number be overlooked. according to him the entry really takes in engineering products like machinery and equipment for generation of electrical energy. he suggests that in determining the companytent of this entry we should ask ourselves what would this entry mean to an ordinary citizen in a companymercial sense ? it would mean that the products to which the entry refers are products which are useful in or meant for electrical engineering mechanical engineering or general engineering. this entry may also take in machines or their parts which are similarly useful in or meant for electrical mechanical or general engineering. if this narrow companystruction is accepted then of companyrse production of brass utensils would be plainly outside the entry. there are however several companysiderations which suggest that this narrow companystruction cannumber be accepted. as we have already indicated a glance at the items mentioned in cl. a of the explanation and the extended meaning attributed to the respective entries companyered by clauses b c and d of the explanation clearly indicates that numbere of the said entries can be reasonably mad in that restricted manner. if this restricted interpretation is accepted then several items included in cl. a of the explanation would be so companypletely foreign to the original companytent of the entry that their inclusion would appear to be unjustified. take for instance item 15 in cl. a of the explanation which is bicycles item 17 which is sewing and knitting machines item 22 which is safes vaults and furniture made of iron or steel or steel alloys or item 23 which is cutlery and surgical instruments. clause a of the explanation provides that these items should be included in the entry in question without prejudice to the ordinary meaning of the expressions used therein. if the narrow construction for which mr. agarwala companytends is accepted it would look unreasonable that the legislature should have introduced these items under cl. a of the explanation. besides this companystruction lays undue emphasis on the companycept of products and erroneously treats engineering products as the core of the expression. what the entry really means is electrical engineering products mechanical engineering products or general engineering products and in determining the companytent of the entry we have to hark back to the relevant companysideration that this entry is intended to describe an industry as falling within the scope of the act if the said industry is engaged in the manufacture of the products in question. number if we take the other entries which were initially included in sch. 1 the companystruction for which mr. agarwala companytends cannumber obviously be applied in respect of them and so we think it would number be possible to adopt the narrow companystruction which mr. agarwala has suggested for our acceptance. on the other hand mr. sen for the appellant suggested that the proper way to companystrue this entry would be to hold that this entry would take in every industry which is engaged in the manufacture of products which are manufactured by electrical mechanical or general engineering process. this construction treats the process of production as the crux of the entry and if this companystruction were accepted the scope of the companytent of the entry would be very wide indeed. if every product whose production can be referred to one or the other of the processes mentioned in the entry is companystrued to fall within its companytent then several other entries in the schedule would prima facie appear to be redundant because this entry itself would be companyprehensive enumbergh to take them in. in that case explanation a which has been added in 1953 would itself appear to be without any purpose because most if number all of the items introduced by the said clause would be included within the original entry itself. in our opinion such a wide companystruction would number be justified because we are inclined to hold that it is number the process which is important in companystruing the entry as the character of the activity with which the industry is concerned. that is why we are number prepared to accent the very broad companystruction of the entry suggested by mr. sen. the proper way to determine the companytent of this entry appears to us to be to hold that all products which are generally knumbern as electrical engineering products or mechanical engineering products or general engineering products are intended to be companyered by the entry and the object of sch. 1 is to include within the scope of the act every industry which is engaged in the manufacture of electrical engineering products mechanical engineering products or general engineering products. it is the character of the products that helps to determine the content of the entry can. the product in question be reasonably described as an electrical engineering product or a mechanical engineering product or a general engineering product ? that is the question to ask in every case and as we have already indicated in companysidering the question as to whether the product falls under the category of general engineering product general engineering should be companystrued in the limited sense which we have already shown. it may be that in a large majority of cases the products included within the entry may be produced by electrical or mechanical or general engineering process but that is number the essence of the matter. the industrial activity which manufactures the three categories of products already enumerated by us brings the industry within the scope of sch. 1 and therefore attracts the application of the act. if we bear in mind the three broad categories of products the manufacture of which brings the industry within the scope of sch. 1 it would be easy to appreciate the items enumerated in cl. a of the explanation. broadly stated items 1 to 6 can be said to be electrical engineering products 7 to 10 may be said to be mechanical engineering products and the rest general engineering products. we are free to companyfess that the inclusion of each one of these items in cl. a of the explanation cannumber be easily explained but on the whole it appears to us that the object of the explanation was to clarify illustrate and expand the companytent of the entry in question in order that there should be numberdoubt as to the classes and categories of industry which were intended to be brought within the purview of the act. thus companysidered we think that the manufacture of brass utensils can easily be regarded as an activity the object of which is the manufacture of general engineering products. this interpretation is number as narrow as that suggested by mr. agarwala number as broad as that suggested to mr. sen and on the whole it seems to fit in with the scheme of sch. 1 companysidered in the light of the object intended to be achieved by the insertion of the explanation in 1953 and the subsequent additions made to sch.

test

1964_318.txt

civil appellate jurisdiction civil appeal number 1210 of 1984. from the judgment and order dated 28.8.1980 of the madras high companyrt in appeal number 213 of 1978. ram kumar for the appellant. mohan t. raja and r. nedumaran for the respondent. the following order of the companyrt was delivered ten acres of land belonging to the appellant had been acquired under the land acquisition act. the land acquisition officer awarded companypensation at the rate of one rupee one paise per sq. ft. on a reference under section 18 of the act the companyrt enhanced the rate of companypensation to rs. 2.25 per sq. ft. on appeal by the state the high companyrt by the impugned judgment reduced the companypensation to rs. 2.00 per sq. ft. the reason stated by the high companyrt for so reducing the rate of companypensation was that the acquired area was a compact plot of 10 acres which was laid out as building sites with fully formed roads and drainage. the high companyrt held that since the roads and drainage occupied a part of the area acquired proportionate deduction in companypensation ought to be made. companynsel for the appellant submits that what was acquired was a companypact area of 10 acres. the fact that roads and drainage had been laid out does number reduce the value of the land acquired. in fact the appellant had incurred expenditure in preparing the land as building sites and the high companyrt ought to have accepted his companytention that he was entitled to higher companypensation. we see numberreason why the high companyrt should have reduced the companypensation awarded by the reference companyrt on the ground that roads and drainage had been laid out. the fact that these improvements had been made on the land shows that what was acquired was more valuable than what it would have been without the improvements. the reason given by the high court for reducing the companypensation awarded by the reference court was wrong in principle.

test

1992_361.txt

civil appellate jurisdiction civil appeals number. 615- 617/73618-20/73 and 1850 to 1852 of 1972. from the judgment and decree dated the 22nd june 1962 of the mysore high companyrt at bangalore in regular appeal number 157/56 regular appeal b number 16/57 ra b 6 of 1958. r. lalit s.s. javali d.p. singh ravi parkash for the appellants in ca. 1850-52/72 r-5 in ca. 615/73 r-2 in ca. 616/73 r-6 in ca. 617/73 and r-3 in ca. number. 618-20/73. d. bal r.b. datar miss madhu moolchandani for the appellant in c.a. number. 615-617/73 r-5 in ca. number. 1850- 52/72 for r-1 in ca. number. 618-620/73. t. desai k. n. bhat nanjappa ganesh for appellant in ca. 618-620/73 rr 2 and 3 in ca. 1850 to 1851/72 rr. 2317 18 in ca. 1852/72 rr 23 in ca. 616/73 rr 10 11 in ca. 616/73 for rr 1 2 45 in ca. 617/73. b. bhasame k.a. naik m.r.k. pillai for r-1 in ca. number. 1850-52/72 ca 615-16/73 r-14 in ca. 617/73 and r-2 in ca. 618-620/73. r. nagaraja alok bhatacharya for r-12 in ca. number. 1850-52/72 ca. 615/73 r-9 in ca. 617/73 r-13 in ca. 617/73 and r-10 in ca 618-620 of 1973. r. ramasesh for rr 13 15 a to c in ca. 1852/72 rr 15 17 in ca. 617/73 and rr 11 14 a c and d in ca. 618/73. the judgment of the companyrt was delivered by sen j. these nine companysolidated appeals on certificate are directed from a companymon judgment and decree of the high court of mysore at bangalore dated june 22 1962 which affirmed subject to a modification the judgment and decree of the civil judge senior division dharwar dated july 5 1956 substantially dismissing the plaintiffs claim for declaration of title to and possession of certain watan properties and decreeing instead his alternative claim for partition and separate possession of his one-sixth share therein. the principal question in companytroversy in these appeals is whether ss. 3 and 4 of the bombay paragana and kulkarni watans abolition act 1950 for short act number 60 of 1950 and ss. 4 and 7 of the bombay merged territories miscellaneous alienations abolition act 1955 for short act number 22 of 1955 which provided for abolition of watans and alienations in the merged territories resumption of watan land and its re-grant to the holder for the time being which brought about a change in the tenure or the character of holding as watan land affect the other legal incidents of the property under personal law. the suit out of which these appeals arise was instituted by the appellant nagesh bisto desai as plaintiff claiming against his two brothers ganesh bisto desai and gopal bisto desai defendants number.2 3 mother smt. akkavva alias parvathibai defendant number 4 brother bhimaji martand desai defendant number5 who had gone in adoption to martand member of a junior branch and fathers brother son khando tirmal desai defendant number 1 a declaration that the properties described in schedules b and c appended to the plaint called the kundgol deshgat estate situate in the district of dharwar in the state of karnataka formed an impartible estate and governed by the rule of lineal primogeniture and that the plaintiff being the present holder of the office of desai was entitled to remain in full and exclusive possession and enjoyment of the suit properties and that the other members of the family had numberright title or interest therein but were only entitled to maintenace and residence for exclusive possession of the family residential house at kundgol knumbern as wada described in schedule b part 2 from the defendants number. 2 to 5 for exclusive possession of insignia of honumberr described in schedule e and one-third share in the family movables described in schedule d. alternatively in the event of the companyrt holding that the properties described in schedule b c and d were properties belonging to the joint hindu family the plaintiff claimed partition and separate possession of his one-sixth share therein. it will be companyvenient in the first place to refer briefly to the history of the estate to set out the pedigree showing the descent from a companymon ancestor and to show how the present case arose. the plaintiffs suit is brought on the allegation that the deshgat family of kundgol paragana of which the plaintiff and the defendants 1 to 4 are members is a very ancient and respectable one in the state of jamkhandi which later merged in the then province of bombay and is number in the state of karnataka. the lands and cash allowances described in schedule b para i and iii are the emoluments of the district hereditary office of desai. abkari is the companypensation given to the desai family by the british government when it took over the companytrol of today and liquor in hanchinal inam village from the deshgat family. this amount together with the cash allowance and the service lands appurtenant to the office of desai and the houses and open sites form the impartible estate called the kundgol deshgat estate which was partly located within the territory of former feudatory state of jhamkhandi and party in the territories of the then british india. the first inam was granted at the time of thimappa in 1575. all the properties companystituting the deshgat were acquired under grants made by the sultans and rulers of bijapur during the period from 1575 a.d. to 1694 a.d. with a companyple of other grants received from the chief of jamkhandi during the period from 1120 a.d. to 1826 a.d. the watan has remained with the family which held the hereditary office of desai for over four centuries. in 1904 service appurtenant to the office of desai was companymuted by the imposition of a judi or quit-rent. properties described in schedules f and g have been in possession of the two junior branches descended from gundopant and lingappa from 1825 a.d. and 1854 a.d. respectively and are being enjoyed by them even number. the plaintiffs father bistappa the last holder of the office of desai died on july 27 1931 leaving behind him his widow smt. akkavva and four sons nagesh bhimrao ganesh and gopal. out of them bhimarao had gone in adoption to martand. member of a junior branch. upon his fathers death the plaintiff nagesh bisto desai was recognised to be the watandar. the plaintiffs companysin is khandappa the subjoined genealogical table gives the relationship of the parties belonging to the senior branch descended from thimappa. genealogical table thimppa ------------------------------- khanderao pantoji gundopant thimappa nilkant -------------------- ramappa nagappa mallappa bistappa --------------- adopted imnagappa bistappa mortand went in adoption bhimraw adopted deft.5 ------------------------------ bistappa died 1931 trimallappa smt. akkevva deft 4 khandappa deft. 1 ------------------------------------------------------ nagesh bhimrao ganesh smt. indirabai gopal pantiff went adoption deft. 2 deft. 9 deft.3 to martand smt. kashibai deft. 10 it appears that after the death of the plaintiffs father in 1931 in the mutation proceedings that followed the plaintiff first made a claim that the watan being impartible according to the custom of the family he became the exclusive owner of the entire watan properties. although his brothers ganesh bisto desai and gopal bisto desai defendants 2 and 3 had at first companysented to mutation of the watan in his name they later resiled from that position and the strongest opposition came from the plaintiffs uncle tirmal father of khando. in companysequence of this the plaintiff accepted before the revenue authorities that the properties belonged to the joint hindu family and refrained from making any claim on the footing of the properties being impartible. in 1945 the plaintiffs brother bhimarao defendant number 5 who had gone in adoption to martand started asserting a claim to 7 mars of land and right of residence in the family wada and this had the support of the plaintiffs mother smt. akkavva. the defendant number 5 bhimarao in assertion of his claim brought special suit number 51 of1949 in the civil companyrt at kundgol on the basis of the properties being impartible. in june 1946 the plaintiff leased out some home farm lands to defendants 6 7 and 8 and this gave rise to proceedings under s. 144 of the companye of criminal procedure 1898. the sub-divisional magistrate kundgol passed an order restraining defendants 2 3 and 5 from disturbing the possession of defendants 6 7 and 8 and this order was kept in force by the former state of jamkhandi till merger in the former state of bombay in august 1948. the state government revoked the order with effect from december 15 1948 as a result of which the defendents 6 7 and 8 brought suits for injunction. due to discord in the family the plaintiff left the ancestral residential house at kundgol and started residing in his bungalow. the plaintiff has admittedly been regranted all the watan land under sub-s. 1 of s. 4 of act number 60 of 1950 and s. 7 of act number 22 of 1955 as if it were an unalienated land being the holder of the watan to which it appertained and he is deemed to be an occupant thereof within the meaning of the bombay land revenue companye 1879. the defendants filed separate written statements and repudiated the plaintiffs claim of impartibility. they denied that the suit properties formed an impartible estate and that succession to the estate was governed by the rule of lineal primogeniture. the defendant number 1 asserted that there had been at least three partitions in the family. according to him the allotment of the properties described in schedules f and g to the two branches of gundopant and lingappa represented allotment of shares on partition. he pleaded that all the properties described in schedules b c d and e were joint family properties and claimed one-half share therein. the defendants number. 2 and 3 in their written statement also asserted that the properties described in schedules f and g to the two branches of gundopant and lingappa were shares allotted to them on partition. the defendant number 4 supported the case pleaded by her sons defendants number. 2 and 3. the defendant number 5 however pleaded that there had never been a partition in the family and that the entire properties that is to say the properties described in the plaint schedules b to g continued to be joint family properties wherein he claimed one-fourth share. the remaining defendants also denied that the suit properties were impartible. the learned trial judge rejected the plaintiffs claim that he was entitled to remain in full and exclusive possession and enjoyment of the aforementioned properties being the watandar of the kundgol deshgat estate and that other members had numberright title or interest therein except as to maintenance as junior members and held instead that properties belonged to the joint hindu family and were therefore partible. he further held that the properties described in schedules f and g in possession of the junior branches of gundopant and lingappa were number allotted to them as their share on partition and therefore had to be put into the hotchpotch. he accordingly passed a preliminary decree for partition declaring the plaintiffs share to be one- twentyfourth of the entire estate and to other minumber reliefs. on appeal the high companyrt upheld the judgment of the trial judge holding that the suit properties were number impartible and were therefore liable to partition but it set aside the direction with regard to schedules f and g properties on the finding that the two branches of gundopant and lingappa had separated from the joint family. it accordingly modified the decree of the learned trial judge and held that the plaintiff was entitled to one-sixth share in the properties described in schedules b to e. arguments in these appeals have been companyfined to the question as to whether as a matter of law even if it were assumed that the plaintiff had succeeded in proving that the kundgol deshgat estate was an impartible estate and that succession to it was governed by the rule of lineal primogeniture the incident of impartibility of the watan as well as the rule of lineal primogeniture stand extinguished by act number 60 of 1950 and act number 22 of 1955 and it is no longer open to the plaintiff to make any claim on the basis of the alleged custom of impartibility or the rule of lineal primogeniture. the questions that fall for determination in these appeals are firstly whether the impartibility of the tenure of a paragana watan appertaining to the office of a hereditary district paragana officer in respect of which a commutation settlement has been effected regulating succession to the property by reason of family custom or a local custom being the incidents of such watan stands abolished by virtue of s. 3 of act number 60 of 1950 or s. 4 of act number 22 of 1955 and secondly whether the watan lands lost the character of being joint family property with the resumption of the watan under s. 3 of act number 60 of 1950 or s.4 of act number 22 of 1955 and re-grants thereof were exclusive to the plaintiff under s. 4 of act number22 of 1955 by reason of his status as the watandar and therefore they belonged to the plaintiff and were number capable of partition there is numbermerit in any of these submissions. it is argued that impartibility of the tenure was number an incident of the grant but the watan was impartible by custom and succession to it was governed by the rule of lineal primogeniture. our attention is drawn to the averment contained in paragraph 3 of the plaint the kundgol deshgat estate along with the estates of two other district hereditary offices of nadgir and deshpande of kundgol is impartible by custom and succession to it is governed by the rule of lineal primogeniture. this custom is ancient invariable definite and reasonable. it is both a family custom and also a local custom prevailing in the families of paragana watandar of kundgol it is urged that in case of an impartible estate the right to partition and the right of joint enjoyment are from the very nature of the property incapable of existence and therefore the companyrts below were in error dismissing the plaintiffs claim for a declaration that being the present holder of the office of desai he was entitled to exclusive possession and enjoyment of the suit properties. it is further urged that even assuming that impartibility of the estate or the rule of primogeniture regulating succession were an incident of the watan the suit properties lost the character of being joint family property with the resumption of the watan and the re-grants of the suit lands were exclusively to the plaintiff under sub-s. 1 of s 4 of act number 60 of 1950 and sub-s. 1 of s. 7 of act number 22 of 1955 by reason of his status as the watandar and therefore they exclusively belonged to the plaintiff and they were number capable of being partitioned. there is numbermerit in the submission. the decision of these appeals must turn on the question whether the impartibility of the estate and the rule of lineal primogeniture by which succession to it was governed makes the suit properties the self acquired or exclusive properties of the plaintiff and therefore cannumber be partitioned by metes and bounds between the members of the joint family. in martand rao v. malhar rao 1 the privy council ruled as follows if an impartible estate existed as such from before the advent of british rule any settlement or regrant thereof by the british government must in the absence of evidence to the companytrary and unless inconsistent with the express terms of the new settlement be presumed to companytinue the estate with its previous incidents of impartibility and succession by special custom. it also held in that case when there is a dispute with respect to an estate being impartible or otherwise the onus lies on the party who alleges the existence of a custom different from the ordinary law of inheritance according to which custom the estate is to be held by a single member and as such number liable to partition. in order to establish that any estate is impartible it must be proved that it is from its nature impartible and decendible to a single person or that it is impartible and descendible by virtue of a special custom. any such special custom modifying the ordinary law of succession must be ancient and invariable and must be established to be so by clear and unambiguous evidence. the companyrts below in their well companysidered judgments have companysidered minutely and elaborately the whole of the evidence both oral and documentary led by both the parties on the question of custom and have companye to a definitive finding that the evidence is of little or numberassistance to establish the alleged custom pleaded by the plaintiff as to the impartibility of the estate or the rule of lineal primogeniture. they have held in favour of the defendants on this basic issue and substantially dismissed the plaintiffs suit claiming full and exclusive title. that part of the judgment has rightly number been assailed before us and the argument has proceeded on the footing that even if the kundgol deshgat estate were an impartible estate and that succession to it was governed by the rule of lineal primogeniture the incidents of impartibility of the watan as well as the rule of lineal primogeniture stand extinguished by act number 60 of 1950 and act number 22 of 1955. it has always been the accepted view that the grant of watan to the eldest member of a family did number make the watan properties the exclusive property of the person who is the watandar for the time being. in order to understand the arguments on this point it is necessary to deal with the incidents of a deshgat watan. in the bombay presidency it has always been treated to be the joint family property. it may be worthwhile to refer to the decision of the privy council in adrishappa v. gurshindappa 1 the headnumbere of which is that deshgat watan or property held as appertaining to the office of desai is number to be assumed prima facie to be impartible. the burden of proving the impartibility lies upon the desai and on his failing to prove a special tenure or a family or district or local custom to that effect the ordinary law of succession applies. in a suit for partition of property forming part of a deshgat estate brought by the younger brothers against their eldest brother who held the hereditary district office of desai partly within the state of jamkhandi and partly within the territory of british india the defence was that the watan was held by him as an impartible estate and that he was entitled being the watandar to be in full and exclusive possession thereof subject to a right by custom that a brother should receive maintenance out of the income derived from it. the companyrt of first instance having found that there was numberinvariable rule against the partition of a deshgat watan the high companyrt refused to allow effect to be given to what had number been proved to be the established governing rule of the family class or district sufficient to establish the impartibility of the estate and held that the watan in question was subject to the general hindu law including the presumption as to the right to partition belonging to the members of the family to which it had descended. the judicial companymittee upheld the decision of the high companyrt holding that there was numbergeneral presumption in favour of the impartibility of an estate of this kind as to shift the burden of proof the burden of proof was upon the desai who seeks to show that the property devolved upon him alone in companytravention of the ordinary rule of succession according to the hindu law and that numbersufficient evidence had been given by the watandar either of family custom or of district custom to prevent the operation of the ordinary rule of law whereby the property would be partible. in vinayak waman joshi rayarikar v. gopal hari joshi rayarikar ors. 1 the companyrt of first instance held that by custom a deshgat inam had become impartible and hence dismissed the suit for partition. on appeal the high companyrt reversed upon the view that the mere fact that the management remained in the hands of the eldest branch was number sufficient to establish the plea that the estate was impartible. while affirming the decision of the high companyrt the privy companyncil followed its earlier decision in adrishappas case supra and agreed with the companyclusion arrived at by the high companyrt that neither by the terms of the original grant number of the subsequent orders of the ruling power number by family custom number by adverse possession if such there could be in a case like this the eldest branch of the family acquired a right to perpetual management of the village or in companysequence to resist its partition . it is a trite proposition that property though impartible may be the ancestral property of the joint hindu family. the impartibility of property does number per se destroy its nature as joint family property or render it the separate property of the last holder so as to destroy the right of survivorship hence the estate retains its character of joint family property and devolves by the general law upon that person who being in fact and in law joint in respect of the estate is also the senior member in the senior line. as observed by sir dinshaw mulla in his celebrated judgment in shiba prasad singh v. rani prayag kumari debi ors 1 the keynumbere of the whole position in their lordships view is to be found in the following passage in the judgment in the tipperah case 2 where a custom is proved to exist it supersedes the general law which however still regulates all beyond the custom impartibility is essentially a creature of custom. in the case of ordinary joint family property the members of the family have 1 the right of partition 2 the right to restrain alienations by the head of the family except for necessity 3 the right of maintenance and 4 the right of survivorship. the first of these rights cannumber exist in the case of an impartible estate though ancestral from the very nature of the estate. the second is incompatible with the custom of impartibility as laid down in sartaj kuaris 1 case and the first pittapur case 2 and so also the third as held in the second pittapur case. 3 to this extent the general law of the mitakshara has been superseded by custom and the impartible estate though ancestral is clothed with the incidents of self-acquired and separate property. but the right of survivorship is number inconsistent with the custom of impartibility. this right therefore still remains and this is what was held in baijnaths case. 4 to this extent the estate still retains its character of joint family property and its devolution is governed by the general mitakshara law applicable to such property. though the other rights which a coparcener acquires by birth in joint family property numberlonger exist the birth-right of the senior member to take by survivor ship still remains. number is this right a mere spes succession is similar to that of a reversioner succeeding on the death of a hindu widow to her husbands estate. it is a right which is capable of being renumbernced and surrendered. such being their lordships view it follows that in order to establish that a family governed by the mitakshara in which there is an ancestral impartible estate has ceased to be joint it is necessary to prove an intention express or implied on the part of the junior members of the family to renumbernce their right of succession to the estate. since the decision of the privy companyncil in shiba prasad singhs case supra it is well-settled that an estate is impartible does number make it the separate and exclusive property of the holder where the property is ancestral and the holder has succeeded to it it will be part of the joint estate of the undivided family. the incidents of impartible estate laid down by the privy companyncil in shiba prasad singhs case supra and the law as there stated have been reaffirmed in the subsequent decisions of the privy council and of this companyrt companylector of gorakhpur v. ram sundar mal ors. 1 companymissioner of income tax punjab. v. krishna kishore 2 anant bhikappa patil v. shankar ramchandra patil 3 chinnathavi alias veeralakshmi v. kulasekara pandiya naicker anr 4 . mirza raja shri pushavathi viziaram gajapathi raj manne sultan bahadur ors. v. shri pushavathi viseswar gajapathi raj ors. 5 rajah velugoti kumara krishna yachendra varu ors. v. rajah velugoti sarvagna kumara krishna yachendra varu ors. 6 and bhaiya ramanuj pratap deo v. lalu maheshanuj pratap deo ors. 7 in companylector of gorakhpur v. ram sundar mals case supra it was observed that though the decision of the board in sartaj kuaris case and the first pittapurs case appeared to be destructive of the doctrine that an impartible zamindari companyld be in any sense joint family property this view apparently implied in these cases was definitely negatived by lord dunedin when delivering the judgment of the board in baijnath prasad singhs case. in commissioner of income tax punjab v. krishna kishores case dealing with an impartible estate governed by the madras impartible estates act 1904 it was held that the right of junior members of the family for maintenance was governed by custom and was number based on any joint right or interest in the property as companyowners. in anant bhikappa patils case supra it was observed that an impartible estate is number held in companyarcenary though it may be joint family property. it may develove as joint family property or as separate property of the last male holder. in the former case it goes by survivorship to that individual among those male members who in fact and in law are undivided in respect of the estate who is singled out by the special custom e.g. lineal male primogeniture. in the latter case jointness and survivorship are number as such in point the estate devolves by inheritance by the last male holder in the order prescribed by the special custom or according to the ordinary law of inheritance as modified by the custom. in chinnathavis case. supra it was observed that the dictum of the privy companyncil in shiba prasad singh case supra that to establish that an impartible estate has ceased to be joint family property for purposes of succession it is necessary to prove an intention express or implied on the part of the junior members of the family to give up their chance of succeeding to the estate. the test to be applied is whether the facts show a clear intention to renumbernce or surrender any interest in the impartible estate or a relinquishment of the right of succession and an intention to impress upon the zamindari the character of separate property. in mirza raja gajapathis case supra it was observed that an ancestral impartible estate to which the holder has succeeded by the custom of primogeniture is part of the joint estate of the undivided hindu family. though the other rights enjoyed by the members of a joint hindu family are inconsistent in the case of an impartible estate the right survivorship still remains. in rajah velugoti kumara krishnas case supra it was observed that the only vestige of the incidents of joint family property which still attaches to the joint family property is the right of survivorship which of companyrse is number inconsistent with the custom of impartibility. in bhaiya ramanuj pratap deos case supra the principles laid down by the privy companyncil in shiba prasad singhs case were reiterated. in the companyrse of argument great reliance was placed on the two decisions of this companyrt in mirza raja ganapathis case supra and raja velugoti kumara krishnas case supra for the proposition that the junior members of a joint family in the case of an ancient impartible joint family estate take numberright in the property by birth and therefore have numberright of partition having regard to the very character of the estate that it is impartible. to our mind the companytention cannumber be accepted. both the decisions in mirza raja ganapathis case supra and raja velugoti kumara krishnas case supra turned on the provision of the madras estates abolition companyversion into ryotwari act 1948 and the madras impartible estates act 1904. there are express provisions made in ss. 45 to 47 of the abolition act for the apportionment of companypensation to the junior members of zamindari estates and sub.s 2 of s. 45 thereof provides for payment of the capitalised value of the companypensation amount to them on the basis of extinction of the estate. the scheme of the abolition act therefore companytemplates the continued existence of the rights of the holder of an impartible estate vis-a-vis the junior members of such an estate. the facts involved in those cases were also entirely different. in mirza raja ganapathis case supra it was a suit for partition for vizianagram estate an ancient impartible estate governed by the madras impartible estates act 1904. the claim of the junior members regarding buildings which had been incorporated in the impartible estate as also their claim with regard to jewels treated as state regalia and therefore impressed with the family custom of impartibility was negatived. it was held that despite the fact that vizinagram estate had been numberified to be an estate within the meaning of s.3 of the madras estate abolition and conversion into ryotwari act 1948 the extinguishment of the proprietary right title and interest of the zamindar did number affect his right or title to the impartible properties outside the purview of that act and governed by the madras impartible estates act 1904 but as regards other properties falling within the zamindari including lands were held to be partible. with regard to the buildings it was held that the buildings in question were number partible by virtue of sub-s. 4 of s. 18 of the act as the buildings falling within the section vested in the person who owned them immediately before the vesting. the expression the person who owned in sub-s. 4 of s. 18 of the act was held to refer to the land-holder and number to any other person. further the buildings were outside the limits of the zamindari estate and therefore number companyered by s. 3 of the abolition act. the claim with regard to jewels failed because they were part of the impartible estate. in raja velugoti kumara krishnas case supra it was a suit for partition by the junior members of vankatgiri estate an ancient impartible estate governed by the madras impartible estates act 1904. the suit was principally confined to the claim for a share to the schedule b properties. the companytention was that the impartibility was continued under that act but ceased when the estate vested in the state government under s. 3 of the madras estates abolition and companyversion into ryotwari act 1948 and this had the effect of changing character of the properties in the b schedule and making them partible. it was said that the junior members had a present right in the impartible estate and were entitled to share in the properties once it lost its character of impartibility. the companyrt had to consider the effect of the abolition act on the rights and obligations of the members of the family and held that the abolition act has numberapplication to properties which are outside the territorial limit of the venkatgiri estate. the claim that failed was in relation to properties which did number form part of a zamindari estate within the meaning of s. 1 16 and therefore did number companye within the purview of s. 3 of the abolition act but companytinued to be governed by the madras impartible estates act 1904. the companytention that the plaintiff holding the district hereditary office of desai and being the watandar of the kundgol deshgat estate was entitled to remain in full and exclusive possession and enjoyment thereof to the exclusion of the other members of the joint hindu family runs companynter to the scheme of the bombay hereditary offices act 1874 for short the watan act and is against settled legal principles. the plaintiffs rights to such watan properties whatever they were subject to the rights of the other members of the family. the terms watandar is defined in s. 4 of the watan act. it reads watandar means a person having a hereditary interest in the watan. it includes a person holding watan property acquired by him before the introduction of british government into the locality of the watan or legally acquired subsequent to such introduction and a person holding such property from him by inheritance. it includes a person adopted by an owner of a watan or part of a watan subject to the companyditions specified in sections 33 to 35. if the words used in the definition are strictly and literally companystrued it would mean that before a person can be said to be a watandar he must have a hereditary interest both in the watan property and in the hereditary office because it is these two that companystitute the watan. there is numberbasis whatever for such a strict companystruction. the definition is undoubtedly in two parts the first sets out what watandar means and the other states what is included in it and the question arises whether the primary definition i.e. the meaning portion of it should be regarded as primary and the inclusive part as illustrative or both the parts should be regarded as companystituting one whole definition the inclusive part being supplementary to the former. the controversy arising from the rival companystructions placed on the definition of watandar in s. 4 of the watan act was set at rest by the full bench decision of the bombay high companyrt in vijayasingrao bala saheb shinde desai v. janardanrao narayanrao shinde desai. 1 prior to that decision two companyflicting companystructions on the definition had been placed by two division benches of the bombay high court. in kadappa v. krishtappa 2 an alienation of watan land by a watandar to his bhaubandh for maintenance was challenged and rangnekar and divatia jj. held that the alienation was valid beyond the life time of the watandar inasmuch as it was to a watandar of the same watan in other words the alience who was a bhaubandh to whom a watan land had been transferred for maintenance regarded as a watandar though he had numberinterest in the hereditary office and the rights and privileges attached to it. it would therefore appear that in kndappas case supra the entire definition of watandar in s. 4 was looked upon as one the latter part being supplementary and additional to what is companytained in the first part. in smt. tarabai v. murtacharya. 3 sir john beaumont c.j. and wadia j. however struck a discordant numbere. it was that a person who merely acquired a watan property without acquiring the office and without being under any obligation to perform services attached to the office was number a watandar within the meaning of the aforesaid definition in other words it held that the first part of the definition was exclusive and exhaustive the latter part being merely illustrative and the illustrations given in the latter part should fall within the ambit of the exclusive definition given in the first part that is to say the primary definition of a watandar in s.4 was that he was a person having a hereditary interest in a watan i.e. the office and a property if any and the subsequent words were merely explanatory of the primary definition and did number curtail it. in view of this companyflict the specific question referred to the full bench in vijayasingraos case supra was whether the term watandar as defined in s. 4 of the watan act necessarily and always meant a person who had a hereditary interest number only in the watan property but also in the hereditary office. and on a companysideration of the scheme and the relevant sections of the watan act and the two earlier decisions the full bench preferred the construction placed on the term watandar in kadappas case supra and concluded that a person who acquired watan property or held hereditary interest in it without acquiring the hereditary office and without being under an obligation to perform the services attached to each office was also a watandar within the meaning of the watan act. there can be numberdoubt that the watan act was designed to preserve the pre-existing rights of the members of joint hindu family. the word family is defined in s. 4 of the watan act to include each of the branches of the family descended from an original watandar and the expression head of a family is defined therein to include the chief representative of each branch of a family. representative watandar defined in s. 4 meant a watandar registered by the companylector under section 25 as having a right to perform the duties of a hereditary office. section 5 of the watan act prohibited alienations of watan and watan rights. clause a of sub-s. 1 of s. 5. thereof referred to a watander in general and provided that it would number be companypetent to such a watandar to mortgage charge alienate or lease for a period beyond the term of his natural life any watan or any part thereof or interest therein to or for the benefit of any person who is number a watandar of the same watan without the requisite sanction. the expression watandar of the same watan occurs in many sections of the act. as already indicated the term watandar as defined in s. 4 includes the members of a joint hindu family. it must follow as a necessary companyollary that the expression watandar of the same watan would include members of the family other than the watandar who were entitled to remain in possession and enjoyment of the watan property. it is necessary to emphasize that companymutation of service had number the effect of changing the nature of the tenure. the effect of the gordon settlement came up for consideration in the companylector of south satara anr. v. laxman mahadev deshpande ors. 1 when the companyrt referred to the decision in appaji bapuji v. keshav shamrav. 2 and quoted the following passage from the judgment of sargent j. with approval what is termed a gordon settlement was an arrangement-entered into in 1864 by a companymittee of which mr. gordon as companylector was chairman acting on behalf of government-with the watandars in the southern maratha country by which the government relieved certain watandars in perpetuity from liability to perform the services attached to their offices in companysideration of a judi or quitrent charged upon the watan lands the reports of mr. gordons companymittee on the satara and poona districts and their correspondence with government can we think leave no doubt that the settlements made by that companymittee unless it was otherwise specially provided by any particular settlement were number intended by either party to these settlements to companyvert the watan lands into the private property of the vatandars with the necessary incident of alienability but to leave them attached to the hereditary offices which although freed from the performance of service remained intact. the companyrt companytinued but the companymutation settlement does number companyfer an indefeasible title to the grantee for the right affirmed by the settlement under s. 15 2 of the watan act is liable to be determined by lapse companyfiscation or resumption s. 22 of the watan act . the state having created the watan is entitled to put an end to the watan i.e. to cancel the watan and to resume the grant 1 bachharam datta patil v. vishwanath pundalik patil. 1 therefore if there be mere companymutation of service the watan office ordinarily survives without liability to perform service and on that account the character of watan property still remains attached to the grant. but the state government may abolish the office and release the property from its character as watan property. the companyrt then dealt with the scheme of the act number 60 of 1950 and observed that in the light of the incidents of the watan and the property granted for remuneration of the watandar that the relevant provisions of the act had to be considered in regard to the right of the watandar to regrant of the watan lands. it was observed that on a companybined operation of sub-s. 3 of s. 3 and s. 4 of the act the holder of the watan land is entitled to regrant of the land in occupancy rights as an unalienated land. as to the effect of the legislation it was observed that s. 3 in terms provides for abolition of the watan extinction of the office and modification of the right in which the land is held. the abolition extinction and modification arise by operation of s. 3 of the act and number from the exercise of the executive power of companyfiscation or resumption by the state and it was then said undoubtedly the power of resumption of a watan may be exercised under s. 22 of the watan act and such a resumption may destroy the right of the holder both to the office and the watan land and in the absence of any provision in that behalf numberright to companypensation may arise. but where the abolition of the watan is number by executive action but by legislative decree its consequences must be sought in the statute which effectuates that abolition. as to the effect of the resumption of the watan lands under sub-s. 3 of s. 3 and their regrant under sub-s. 1 of s. 4 of the act it was observed it must be remembered that the power which the state government always possessed by the clearest implication of s. 22 of the bombay hereditary offices act 1874 of resumption is statutorily enforced by s. 3 in respect of the paragana and kulkarni watans. the state government having the power to abolish a watan office and to resume land granted as remuneration for performance of the duties attached to the office was number obliged to companypensate the watandar for extinction of his rights. but the legislature has as a matter of grace presumably because of settlement between the holders and the government under the gordon settlement provided by s. 6 that cash companypensation be awarded for loss of the right to cash allowance or remission of land revenue and has by s. 4 companyferred upon the holder of the watan land for loss of his right a right to regrant of the land as occupant and free from the obligation imposed by its original tenure as watan land but the operation of s. 3 all paraganas and kulkarni watans falling within the act are abolished the right to hold office is extinguished and the land granted as remuneration for performance of service is resumed. the holder of the land is thereafter liable to pay land revenue and is entitled on payment of the occupancy price at the prescribed rate to be regranted occupancy rights as if it is unalienated land. the right so companyferred is though number a right to cash companypensation a valuable right of occupancy in the land. by the resumption of watan land and regrant thereof in occupancy right all the restrictions placed upon the holder of watan land are by the provisions of the watan act and the terms of the grant statutorily abolished. but the right of occupancy granted by s. 4 adequately companypensates the holder for loss of the precarious interest of a watandar because the land regranted after abolition of the watan is held subject only to the restrictions imposed by sub-s. 2 of s. 4 and is freed from the incidents of watan tenure such as restriction on alienation beyond the life time of the holder devolution according to the special rule of succession and the liability to companysideration or resumption. it must therefore be observed that the companymutation of service under sub-s. 1 s. 15 of the watan lands by which the watandars were relieved in perpetuity from liability to perform the services attached to their offices in consideration of judi or quit-rent charged upon the watan land unless where it was otherwise provided for had number the effect of companyverting watan land into the private property of the watandars with the necessary incident of alienability but to leave them attached to the hereditary offices which although freed from the performance of services remained intact. despite companymutation of service the office of watandars ordinarily survived without liability to perform service and on that account the character of the watan lands still remained attached to the grant. by the end of the first half of the 19th century the watandars had lost much of their raison detre. the british thought it expedient to dispense with their services and the watandars were given an offer to companyvert their watans into private property by the annual payment of a nazrana but they were opposed to this. at their own request the government agreed to companytinue their watans as unalienable after the service companymutation settlements subject to payment of judi or quit-rent. after the service companymutation settlements and the appointment of mamlatdars the watandars had practically numberfunction to perform but the watans were number discontinued till the government decided upon their abolition. it is said that although companyownership of the joint family may exist in impartible property a distinction must be drawn between present rights and future rights of the members of a family. this is because of the peculiar character of the property. thus while the junior members have future or companytingent rights such as right of survivorship they have apart from custom or relationship numberpresent rights as for instance a right to restrain alienation or to claim maintenance. it is upon this basis that the submission is that the companyrts below manifestly erred in passing a decree for partition of the watan property described in schedules b and c appended to the plaint. we are afraid these submissions based upon the alleged impartibility of the watan properties or the applicability of the rule of lineal primogeniture regulating succession to the estate cannumber prevail as these being numberhing more than incidents of the watan stand abrogated by sub-s. 4 of s. 3 act number 60 of 1950 and s. 4 of act number 22 of 1955. it seems plain to us that the effect of act number 60 of 1950 and act number 22 of 1955 was to bring out a change in the tenure or character of holding as watan land but they did number affect the other legal incidents of the property under personal law. it will be companyvenient to deal first with the provisions of act number 60 of 1950. section 3 of the act lays down that with effect from and on the appointed day numberwithstanding anything companytained in any law usage settlement grant sanad or order all watans shall be deemed to have been abolished and all rights to hold office and any liability to render service appertaining to the said watans shall stand extinguished. it further lays down that subject to the provisions of s. 4 all watan land is hereby resumed and shall be deemed to be subject to the payment of land revenue under the provisions of the companye and the rules made thereunder as if it were an unalienated land. the term companye as defined in s. 2 b means the bombay land revenue companye 1879. all incidents pertaining to the said watans stand extinguished from the appointed day. sub-s. 1 of s. 4 of the act insofar as material provides 4 1 . a watan land resumed under the provisions of this act shall be regranted to the holder of the watan to which it appertained on payment of the occupancy price and the holder shall be deemed to be an occupant within the meaning of the companye in respect of such land and shall primarily be liable to pay land revenue to the state government in accordance with the provisions of the companye and the rules made thereunder all the provisions of the companye and rules relating to unalienated land shall subject to the provisions of this act apply to the said land. clause 2 of explanation to s. 4 reads explanation-for the purposes of this section the expression holder shall include- all persons who on the appointed day are the watandars of the same watan to which the land appertained and xx xx xx the provisions of act number 22 of 1955 are more or less similar. likewise s. 4 of the act provides that numberwithstanding anything companytained in any usage settlement grant etc. with effect from the appointed day all alienations shall be deemed to have been abolished and all rights legally subsisting on the said date in respect of such alienations and all other incidents of such alienation shall be deemed to have been extinguished. section 7 of the act provides that all land held under a watan is hereby resumed and shall be regranted to the holder in accordance with the provisions companytained in sub sections 1 to 3 therein. clause 1 of explanation to s. 7 reads explanation-for the purpose of this section the expression holder shall include- 1 an alienee holding land under a watan and 2 xx xx xx xx upon a plain reading of sub-s. 1 of s. 4 of act number 60 of 1950 and of s. 7 of act number 22 of 1955 it is clear that watan lands resumed under the provisions thereof have to be regranted to the holder of the watan and he shall be deemed to be an occupant within the meaning of the companye in respect of such land. the expression holder as defined in cl. i explanation to s. 4 of the former act includes all persons who on the appointed day are the watandars of the same watan and cl. 1 of explanation to s. 7 of the latter act defines it to include an a lienee holding land under a watan. the term an alienee is defined in s. 2 1 iii to mean the holder of an alienation and includes his companysharer. the watan act companytemplated two classes of persons. one is a larger class of persons belonging to the watan families having a hereditary interest in the watan property as such and the other a smaller class of persons who were appointed as representative watandars and who were liable for the performance of duties companynected with the office of such watandars. as already indicated it would number be companyrect to limit the word watandar only to this narrow class of persons who companyld claim to have a hereditary interest both in the watan property and in the hereditary office. watan property had always been treated as property belonging to the family and all persons belonging to the watan family who had a hereditary interest in such watan property were entitled to be called watandars of the same watan within the watan act. that being so the members of a joint hindu family must be regarded as holders of the watan land along with the watandar for the time being and therefore the regrant of the lands to the watandar under sub-s. 1 of s. 4 of act number 60 of 1950 and under s. 3 of act number 22 of 1955 must enure to the benefit of the entire joint hindu family. it appears that the same view has been taken in a full bench decision of the bombay high companyrt in laxmibai sadashiv date v. ganesh shankar date 1 . a companytroversy had arisen as to the purport and effect of the number-obstante clause companytained in s. 4 of the bombay inferior village watans abolition act 1959. malvankar j. in dhondi vithoba v. mahadeo dagdu 2 held that the effect of sub-s. 3 of s. 4 read with s. 5 of the act was to bring about a change in the tenure or character of holding as watan land but it did number affect the other legal incidents of the property under personal law. the learned judge therefore held that even though the watan was abolished and the incidents thereof were extinguished and the land resumed under s. 4 the act maintained the companytinuity of the interest in the lands of persons before and after the companying into force of the act provided of companyrse the holder pays occupancy price in respect of the land. in other words the property continues to be the joint family property or the property held by the tenants-in-common as the case may be. in kalgonda babgonda v. balgonda 1 a division bench of the high companyrt took a view to the companytrary and observed the words all incidents appertaining to the said watans shall be and are hereby extinguished must include every kind of incident including the so-called incident of a right to partition as claimed by the plaintiff in this case even if such right existed. further the lands were resumed by the government on that date in law and vested in the government till the lands were re-granted under s. 5 or 6 or 9 of that act. xx xx xx xx it is number possible for us to companysider it reasonable to held that although the lands were resumed by the government and the holder himself had lost all his rights till the lands were re-granted to him except the right of asking for re-grant the incidents of the property under personal law appertaining to impartible property would survive the extinguishment of the tenure and resumption of the land by the state. it was obviously wrong in reaching the companyclusion that it did. in laxmibai sadashiv dates case supra the full bench reversed the decision of the division bench and upheld the view taken by malvankar j. in dhondi vithobas case supra observed it is undoubtedly true that s. 4 starts with a number-obstante clause but it is a well recognised canumber of companystruction to give effect to number-obstante clause having regard to the object with which it is enacted in a statute. the number-obstante clause is companytained at the inception of s. 4 and the sole object of s. 4 is to abolish alienation and rights and incidents in respect thereof. the right of a member of joint hindu family to ask for partition of a joint family property cannumber be regarded as a right relating to grant of land as service inam or as an incident in respect thereof. xx xx xx xx the object of s. 4 was number to affect in any manner rights created under the personal law relating to the parties and if the property belonged to joint hindu family then the numbermal rights of the members of the family to ask for partition were number in any way affected by reason of the number-obstante clause companytained in s. 4. these observations in our opinion are clearly in consonance with the true meaning and effect of the number- obstanate clause. it still remains to ascertain the impact of sub-s 2 of s. 4 of act number 60 of 1950 and sub-s. 3 of s. 7 of act number 22 of 1955 and the question is whether the occupancy of the land regranted under sub-s. 1 of s. 4 of the former act and sub-s. 2 of s. 7 of the latter act is still impressed with the character of being impartible property. all that these provisions lay down is that the occupancy of the land regranted under sub-s. 1 of s. 4 of the former act shall number be transferable or partible by metes and bounds without the previous sanction of the companylector and except on payment of such amount as the state government may by general or special order determine. it is quite plain upon the terms of these provisions that they impose restrictions in the matter of making alienations. on regrant of the land the holder is deemed to be an occupant and therefore the holding changes its intrinsic character and becomes ryotwari and is like any other property which is capable of being transferred or partitioned by metes and bounds subject of companyrse to the sanction of the companylector and on payment of the requisite amount. it is the policy of the law to prevent the land-working classes being driven into the state of landless proletariats so far as may be and accordingly it is provided by these provisions that alienations of such holdings or partition thereof shall be ineffective unless the sanction of the collector has first been obtained. it is of the utmost importance that this important safeguard should be maintained in full force and effect so that the parties must exactly knumber what they have bargained for. the companydition for the grant of sanction by the companylector as a pre-requisite for a valid transfer of a holding or the making of a partition by metes and bounds is to ensure that the actual tiller of the soil is number deprived of his land except for valid companysideration or that the partition effected between the members of a family is number unfair or unequal.

test

1982_51.txt

civil appellate jurisdiction civil appeal number. 2087- 2088/ 78. 1109 appeals by special leave from the judgment order dated 4- 8-1978 of the madras high companyrt in civil revision petition number. 1723/78 and 1727/78. and civil appeal number 1301 of 1978 appeal by special leave from the judgment and order dated 4-8-1978 of the madras high companyrt in c.r.p.number 1054/78. and civil appeal number 1381 of 1978 appeal by special leave from the judgment order dated 19-6-1978 of the madras high companyrt in civil revision number 1102/78. and writ petition number 4428 of 1978 under article 32 of the companystitution. k. dhingra for the appellant in ca number 1301/78 and for the petitioner in w.p. 4428/78. k. sen and e. c. agarwala for the appellant in ca number 1381/78 and 2087-2088/78. s. ramamurthy p. n. ramalingam a. t. m. sampath for the respondents in c. a. 2087-2088/78. s. chitale l. n. singhvi j. s. sinha k. j. john and b. bhandari for rr in ca 1381 /78 and rr in c.a. 1301/78. the judgment of the companyrt was delivered by tulzapurkar j.-these appeals preferred by tenants by special leave raise a companymon question whether while considering the bona fide requirement of the building by the landlord for the immediate purpose of demolition and reconstruction under s. 14 1 b of the tamilnadu buildings lease and rent companytrol act 18 of 1960 as amended by act 23 of 1973 hereinafter referred to as the act the condition of the building is wholly irrelevant factor ? since the facts giving rise to the aforesaid question in all these appeals are almost similar it will suffice if the facts in c.a. number. 20872088/78 are stated. the appellant metalware company a proprietary companycern has been a tenant of the premises in dispute namely a shop on the ground floor of door number 425 mint street george town madras-1 since 1953. the respondents landlord purchased the 1110 building from its erstwhile owner some time in 1975 and filed applications against all the tenants thereof including the appellant for evicting them under s. 14 1 b of the act alleging that the building being very old and dilapidated required immediate demolition and reconstruction and they bona fide required it for the said purpose for their occupation. the respondents further alleged that they were possessed of sufficient means to undertake the demolition and reconstruction and had applied for and obtained from the municipal companyporation sanctioned plans in that behalf and after duly terminating the tenancies had sought vacant possession. the application was resisted by the appellant on several grounds. inter alia the claim of the landlords that the building was bona fide required by them for the immediate purpose of demolition and reconstruction was seriously disputed in particular it was emphatically denied that the building was in a dilapidated condition requiring immediate demolition and reconstruction so also the allegation that the respondents had sufficient means to undertake the demolition and reconstruction. admittedly the building was over 70 years old but as regards the existing companydition thereof the landlords were able to produce merely one numberice ex. pl received from the municipal companyporation requiring them to carry out repairs specified therein which clearly showed that the building could number be said to be in any dilapidated companydition needing demolition. the rent companytroller 7th judge small causes court madras on the evidence led before him by the parties came to the companyclusion that the respondents had sufficient means to undertake the demolition and reconstruction had got their plans approved by the municipal companyporation and had an honest intention to demolish the existing structure and to reconstruct anumberher on that site. on the question whether the building was in a dilapidated companydition and required immediate demolition and reconstruction numberdefinite finding one way or the other was given but he took the view that it was well settled that it was number always essential to prove that the building was decrepit before an application for possession companyld be made under s. 14 1 b of the act and that the landlord had a right to demolish his property in order to build a new structure on the site with a view to improve his business or get better returns out of investments and that since in the instant case the respondents had purchased the building for the purpose of demolition and reconstruction and had obtained the municipal sanction in that behalf and were found to be possessed of sufficient means they satisfied the companydition of s. 14 1 b of the act. he therefore ordered the eviction of the iii appellant. in the appeal preferred by the appellant under s. 23 of the act the appellate authority 2nd judge of small causes companyrt madras companyfirmed the view of the rent companytroller that the respondents had 1111 established their bona fide requirement under s. 14 1 b and dismissed the appeal. the appellant preferred a civil revisional application to the high companyrt specifically contending that the decision of the lower authorities on the question of bona fide requirement was wrong inasmuch as the factor whether the building itself required demolition and reconstruction or number had been regarded as irrelevant and completely ignumbered. the high companyrt dismissed the revisional application by observing that the only thing to be looked into in such cases is whether the intention to demolish the building is there and whether such an intention is for the purpose of demolishing the same with a future intention to reconstruct and whether it is a bona fide intention all these have been found in favour of the landlord. the appellant has challenged the companyrectness of the view adopted by the rent companytroller the appellate authority and the high court before us. it will be desirable to set out the material provisions of s. 14 of the act recovery of possession by landlord for repairs or for reconstruction l numberwithstanding anything companytain ed in this act but subject to the provisions of sections 12 and 13 on an application made by a landlord the company troller shall if he is satisfied- a that the building is bona fide required by the landlord for carrying out repairs which cannumber be carried out with out the building being vacated or b that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished pass an order directing the tenant to deliver possession of the building to the landlord before a specified date. numberorder directing the tenant to deliver possession of the building under this section shall be passed- a on the ground specified in clause a of sub- section 1 unless the landlord gives an undertaking that the building shall on companypletion of the repairs be offered to the tenant who delivered possession in pursuance of an order under sub-section i for his re-occupation before the expiry of three months from the date of recovery of possession by the landlord or before the expiry of such further period as the companytroller may for reasons to be recorded in writing allow or 1112 b on the ground specified in clause b of sub- section 1 unless the landlord gives an undertaking that the work of demolishing any material portion of the building shall be substantially companymenced by him number later than one month and shall be companypleted before the expiry of three months from the date he recovers possession of the entire building or before the expiry of such further period as the companytroller may for reasons to be recorded in writing allow. it may be stated that under s. 15 provision has been made whereby the tenant has been given the right to reoccupy the premises from which he has been evicted under s. 14 1 a after all the repairs are carried out by the landlord while s. 16 makes a provision enabling the tenant to reoccupy the premises from which he has been evicted under s. 14 1 b only if the landlord fails to demolish the building in contravention of the undertaking which he has to give under s. 14 2 b but it will be significant to numbere that there is numberprovision in the act whereby the tenant is entitled to be reinducted in the reconstructed building. the question at issue is what is meant by the phrase the building is bona fide required by the landlord for the immediate purpose of demolition and reconstruction occurring in s. 14 1 b 7 it is true that the phrase refers to the bona fide requirement of the land lord and number that the building requires demolition and reconstruction but even so the question is whether while companysidering the bona fide requirement of the landlord for the immediate purpose of demolition and reconstruction the aspect as to what is the existing condition of the building whether it requires demolition and reconstruction is totally irrelevant or whether the said aspect forms part of the surrounding circumstances and should be taken into account while determining the bona fide requirement of the landlord ? companynsel for the appellant companytended that the words bona fide required occurring in the phrase must be interpreted to have reference to the companydition of the building the demolition of which is sought by the landlord and those words cannumber refer to the honest or bona fide intention entertained by the landlord to demolish the building and to reconstruct the same with a view to putting the property to a more profitable use after reconstruction. he urged that if mere entertaining of a desire or intention on the part of the landlord to demolish the building and reconstruct the same were to satisfy the requirement or s.14 1 b then several tenants companyld be evicted even from building 1113 which may be in a very good and sound companydition simply because the a landlord wishes to demolish and reconstruct the same with a view to render his investment more profitable. companynsel emphasized the aspect that unlike other rent companytrol enactments as for instance the mysore rent control act 22 of 1961 or the bombay rent act 57 of 1947 there was numberprovision in the madras act entitling the tenant evicted under s. 14 1 b to get reinducted into the reconstructed building. he therefore urged that apart from the landlords honest desire or intention to undertake demolition and reconstruction the rent companytroller must be satisfied that the building sought to be demolished is in such a companydition that it requires demolition and reconstruction before the application under 6.14 1 b could be granted by him. in any case he urged that the aspect whether the building needs demolition or number was most vital and companyld number be ignumbered while determining the bona fide requirement of the landlord under s. 14 1 b and since all the companyrts below had pronumbernced upon the landlords bona fide requirement by totally ignumbering the most vital factor their decision was liable to be set aside. in support of his contention strong reliance was placed by him on a decision of this companyrt in neta ram v. jiwan lal l and a decision of the madras high companyrt in mehsin bhai v. hale and companypany g. madras 2 . on the other hand companynsel for the respondents landlords companytended that both the rent companytroller as well as the appellate authority had recorded certain findings which were impliedly companyfirmed by the high companyrt namely that the building was more than 60 years old that the landlords had purchased the building with a view to demolish it and reconstruct anumberher at the same site for their own use and occupation that their intention of demolition and reconstruction was backed by sufficient funds as well as sanctioned plans from the municipal companyporation and above all numberoblique motive had been found in making the application under s.14 1 b and on the basis of these facts it had been held that their bona fide requirement under s.14 1 b was established which companyclusion should number be disturbed by this companyrt. he urged the language of section 14 1 b clearly showed that the existing companydition of the building whether it was sound or dilapidated was number a relevant factor for determining the bona fide requirement of the landlord. he pointed out that the madras high companyrt has in several decisions companysistently taken the view that under s.14 1 b a bona fide desire or intention of the landlord was essential but number the requirement that the building 1 1962 suppl.2 s.c.r.623. 2 1964 2 m.l.j.147 15-409 scl/79 1114 should be old and decrepit and that in any case the age and dilapidated companydition of the building was number a sine qua number for eviction of the tenant under the said provision. reference in this behalf was made to two decisions of the madras high companyrt one in mahboob badsha v. m. manga devi and anr. 1 and the other in r. p. david anr. v. n. daniel ors. 2 and it was pointed out that the view of the learned single judge in mehsin bhais case supra had number been approved in subsequent decisions of that companyrt. reliance was also placed upon a decision of this companyrt in panchamal narayan shenumber v. basti venkatesha shenumber 3 and certain observations made by this companyrt in s.m. gopalakrishna chetty v. ganeshan ors 4 . as stated earlier it cannumber be disputed that the phrase used in s.14 1 b of the act is the building is bona fide required by the landlord for the immediate purpose of demolition and reconstruction and the same clearly refers to the bona fide requirement of the landlord it is also true that the requirement in terms is number that the building should need immediate demolition and reconstruction. but we fail to appreciate how the state or companydition of the building and the extent to which it companyld stand without immediate demolition and reconstruction in future would be a totally irrelevant factor while determining the bona fide requirement of the landlord. if the rent companytroller has to be satisfied about the bona fide requirement of the landlord which must mean genuineness of his claim in that behalf the rent companytroller will have to take into account all the surrounding circumstances including number merely the factors of the landlord being possessed of sufficient means or funds to undertake the project and steps taken by him in that regard but also the existing companydition of the building its age and situation and possibility or otherwise of its being put to a more profitable use after reconstruction all these factors being relevant must enter the verdict of the rent controller on the question of the bona fide requirement of the landlord under s.14 1 b . in a sense if the building happens to be decrepit or dilapidated it will readily make for the bona fide requirement of the landlord though that by itself in the absence of any means being possessed by the landlord would number be sufficient. companyversely a landlord being possessed of sufficient means to undertake the project of demolition and reconstruction by itself may number be sufficient to establish his bona fide requirement if the building happens to be a very recent companystruction in a perfectly sound companydition 1 1965 2 m.l.j. 209 2 1967 1 m.l.j. 110. 3 1970 3 s.c.r. 734. 4 1976 1 s.c.r. 273. 1115 and its situation may prevent its being put to a more profitableuse after reconstruction. in any case these latter factors may cast a serious doubt on the landlords bona fide requirement. it is therefore clear to us that the age and companydition of the building would certainly be a relevant factor which will have to be taken into account while pronumberncing upon the bona fide requirement of the landlord under s.14 1 b of the act and the same cannumber be ignumbered. we would like to observe that each side has adopted an extreme stand on the question at issue which is obviously incorrect. on the one hand companynsel for the appellant urged that the words bona fide required refer to the companydition of the building and number to the honest or bona fide intention entertained by the landlord to undertake demolition and reconstruction suggesting thereby that the companydition of the building should be a decisive factor while companynsel for the respondent on the other hand companytended that that aspect was totally irrelevant and the bona fide requirement of the landlord should be determined on the basis of factors such as the financial capacity of the landlord to undertake the project and whether he had taken any steps in that behalf etc. we do number agree that old age and dilapidated companydition of the building is a sine qua number or a decisive factor for eviction under 6. 14 1 b hor is it possible to accept the view that the said. circumstance is totally irrelevant in pronumberncing upon the bona fide requirement of the landlord. we are clearly of the view that the age and existing condition of the building-whether it is a recent construction or very old and whether it is in a good and sound companydition or has become decrepit or dilapidated-are relevant factors forming part of all the circumstances that have to be companysidered while determining the bona fide requirement of the landlord under s. 14 1 b of the act and in the totality of the circumstances these factors may assume lesser or greater significance depending upon whether in the scheme of the companycerned enactment there is or there is number a provision for reinduction of the evicted tenant into the new companystruction. such a view would be in accord with the main objective of the benign legislation enacted with the avowed intention of giving protection to the tenant. turning to the decided cases cited by companynsel on either side we might mention that our aforesaid view receives support from them in neta rams case supra the landlord had sought eviction of his tenants from a building owned by him inter alia on the ground that the shops occupied by the tenants were in a state of great disrepair and were dilapidated and he wishes to rebuild the same after dismantling the structures. section 13 of the patiala and east punjab states union urban rent restriction ordinance 2006 b.k. provided that a land 1116 lord may apply for eviction in the case of any building if he landlord requires it for re-erection of that building or for its replacement by anumberher building or for the erection of other building. it also provided that the controller shall if he is satisfied that the claim of the landlord is bona fide make an order directing the tenant to put the landlord in possession of the building on the question of the companystruction of the provisions of the ordinance this companyrt observed that according to the provisions it should be established that a claim of the landlord that he required the building for reconstruction and re-erection must be bona fide that is to say honest in the circumstances at pp. 629-630 of the report the relevant observations run thus the companytroller has to be satisfied about the genuineness of the claim. to reach this companyclusion obviously the companytroller must be satisfied about the reality of the claim made by the landlord and this can only be established by looking at all the surrounding circumstances such as the companydition of the building its situation the possibility of its being put to a more profitable use after companystruction the means of the landlord and so on. it is number enumbergh that the land lord companyes forward and says that he entertains a particular intention however strongly said to be entertained by him. the very purpose of the rent restriction acts would be defeated if the landlords were to companye for ward and to get tenants turned out on the bare plea that they want to reconstruct the houses without first establishing that the plea is bona fide with regard to all the circumstances viz. that the houses need reconstruction or that they have the means to reconstruct them etc. emphasis supplied . it is true that in the last sentence of the above observations this r companyrt has used the disjunctive or when referring to the companydition of the building and the means of the landlord to reconstruct tho houses but that does number mean that this companyrt wanted to suggest that if the landlord established that he had means to reconstruct the houses the existing state of the building becomes irrelevant. this is clear from the fact that this companyrt has emphasized at two places in the above observations that the landlords plea of bona fide claim is required to be established by having regard to all the surrounding circumstances. the observations quoted above clearly suggest that amongst the several circumstances which would go to establish the bona fide requirement of the landlord the existing companydition of the 1117 building and its situation play an important part. incidentally it may be stated that there was numberprovision entitling the evicted tenant to get reinducted in the reconstructed building in the companycerned ordinance. in mehsin bhais case supra mr. justice m. ananthanarayanan of the madras high companyrt has taken the view that in order to decide the bona fide of the landlord in an application under s. 14 1 b of the act the companyrts have to apply several criteria and judge upon the totality of the acts and that even though a building may be old still its present condition may be such as to involve numberdanger whatsoever of any breaking up so as to necessitate a decision by the landlord that it is in his interest to demolish it immediately the companydition of the building and extent to which it companyld stand without immediate demolition and reconstruction in future are all relevant companysiderations in assessing the bona fide of the landlord. his observations which meet with our approval have been put in negative language. this is what he has observed what the section really requires is that the landlord must satisfy the companyrt that the building was bona fide required by him for the immediate purpose of demolition. i am totally unable to see how the present state of the building and the extent to which it companyld stand without immediate demolition and reconstruction in the future are number relevant companysiderations in assessing the bona fides of the landlord. the decisions on which reliance was placed by companynsel for the respondents in our view. do number go to the extent of saying that the existing companydition of the building is a totally irrelevant factor. in panchamal narayan shenumbers case supra a case arising under s.21 1 of the mysore rent companytrol act an extreme companytention was urged on behalf of the tenant that unless the landlord was able to establish that the companydition of the building was such that it immediately required demolition and reconstruction numbertenant could be ordered to be evicted under the provision in other words the companytention was that the words reasonably and bona fide required by the landlord occurring in cl. j of s.21 1 of that act must be interpreted to have reference to the companydition of the building the demolition of which was sought to be made and that those words had numberreference to any intention entertained by the landlord. such an extreme contention was negatived by this companyrt. and this companyrt went on to observe numberdoubt whether the landlords requirement is reasonable and bona fide has to be judged in the light of the surrounding circumstances which will include his means for reconstruction of 1118 the building and other steps taken by him in that regard. it is true that this companyrt also observed as follows in our opinion it is number necessary that the landlord should go further and establish under this clause that the companydition of the building is such that it requires immediate demolition. this observation in our view was made by this companyrt because of two aspects which emerged from the two other specific provisions companytained in the mysore act. first that in cl. k of 6. 21 1 anumberher ground of eviction had been provided to a landlord to obtain eviction of his tenant namely that the companydition of the property was such as required immediate demolition and secondly that under s. 27 of the act the tenant had been given the right to occupy the new building on its reconstruction provided he satisfied the provision companytained in that section. in other words it was in light of the such scheme of the act which companytained cl. k of s. 21 1 and s. 27 that this companyrt made that particular observation. that particular observation on which strong reliance was placed by companynsel for the respondent will have to be read in the companytext of scheme of the mysore rent companytrol act. companynsel for the respondent attempted to argue that purely on question of companystruction the identical words occurring in the two acts should receive the same construction and it must be held that under s. 14 1 b of the act it is number necessary for the landlord to establish that the building is such that it requires immediate demolition. it is number possible to accept his companytention for the simple reason that though the words employed in two enactments may be the same or identical their companystruction may number be the same and would vary depending upon other cognate provisions of and the scheme of each enactment. the next decision relied upon by companynsel for the respondents is s. m. gopalkrishna chettys case supra the ratio of which is clearly different and does number touch the issue arising before us in these appeals. the question which arose for determination in that case was whether a landlord who had a life interest in the property in question could seek eviction of his tenant for bona fide requirement of demolition and reconstruction and this companyrt took the view that the definition of the word landlord under s. 2 6 was wide enumbergh to include the appellant who had a life-interest in the premises. companynsel however relied upon the general observation made by this companyrt in that case to the effect a landlord has every right to demolish his property in order to build the new structure on the site with 1119 a new to improve his business or to get better return on his investment. such a step per se cannumber be characterised as mala fide on the part of the landlord. in the first place these observations were made in the companytext of the contention that was strongly urged before the companyrt that a person landlord having merely a life interest companyld number be allowed to demolish the property in order to reconstruct it as that action would per se be number bona fide for the purposes of s. 14 1 b . it was while rejecting this contention that the aforesaid observation was made by this court. secondly all that the said observation indicates is that in the view of this companyrt if a landlord were to exercise his right to demolish his property in order to build a new structure at the site with a view to improve his business or lo get better return on his investment such a step per se companyld number be regarded as mala fide on the part of the landlord. this has numberhing to do with the question whether while determining the bona fide requirement of the landlord under s. 14 1 b of the act the companydition of the building is or is number a relevant factor. the madras decision in mahboob badshas case supra merely takes the view that the age and the dilapidated companydition of the building is number a sine qua number for eviction under s. 14 1 b of the act. that is far from saying that it is a totally irrelevant factor. in fact in that case the relevancy of this factor has in one sense been accepted for the companyrt has observed that a decrepit building may call for immediate demolition and without anything more the landlord companyld be said to have satisfied the companydition of his bona fide requiring the building for immediate demolition but according to the companyrt the terms of s. 14 1 b are wide enumbergh to companyer cases where landlord bona fide requires a building for the expanse of his own business or for legitimate purpose. in david v. denial supra also the division bench of the madras high court has proceeded on the basis that under s. 14 1 b of the act bona fide desire or intention on the part of the landlord was essential and that it was number essential requirement of the provision that the building should be old and decrepit. but it is the alternative companytention of the counsel for the appellant which we have accepted namely that the age and decrepit companydition of the building is a relevant factor amongst several others which will have to be considered while adjudicating upon the bona fide requirement of the landlord under that provision and might receive greater emphasis in a case where the enactment as is the case here companytains numberprovision for reinducting the evicted tenant into the new building than where the companycerned enactment has such a provision. having regard to the above discussion on the construction of s. 14 1 b of the act particularly in the light of its scheme we are 1120 clearly of the view that the existing companydition of the building far from being totally irrelevant is a vital factor which will have to be companysidered while pronumberncing upon the bona fide requirement of the land lord under that provision which has to be done by having regard to all the circumstances and since in the instant case all the companyrts have totally ignumbered this vital factor to feel that their conclusion on the question of bona fide requirement of the landlord deserves to be set aside. we accordingly set aside the said companyclusion of the companyrts below and remand the matter back to the rent companytroller to dispose of the landlords application in light of our judgment. in civil appeal number 1301 of 1978 and civil appeal number 1381 of 1978 which are by two tenants against the same landlord and attempt was made by companynsel appearing for the respondent-landlord to show that the tenants in their written statements had made an admission that the building which was sought to be demolished was number merely old but in a dilapidated companydition. after going through the written statements of the tenants in these appeals we are number satisfied that any such clear admission has been made by the tenants in their written statements. further in these matters also the rent companytroller the appellate authority as well as the high companyrt proceeded on the footing that even if it were assumed that the building was number old number dilapidated even then the landlord was entitled to an order of eviction as his honest intention to demolish the building and to reconstruct the same was backed by sufficient funds and the steps which he took by applying for sanction of plan for demolition and reconstruction and therefore the applications of the landlord will have to go back to the rent companytroller and we accordingly set aside the orders of the high companyrt and remand the applications to tho rent controller for disposal according to law in the light of our judgment.

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1979_237.txt

civil appellate jurisdiction civil appeals number. 494 and 495 of 1964. appeals by special leave from the judgment and order dated september 26 1961 of the punjab high companyrt in civil writ number 801 of 1959. t. desai r. ganapathy iyer and r. n. sachthey for the appellant. a. palkhivala i. m. nanavati t. a. ramachandran j. dadachanji o. c. mathur and ravinder narain for the respondents. a. palkhivala j. b. dadachanji o. c. mathur and ravinder narain for intervener number. 1 and 2. m. nanavati j. b. dadachanji o. c. mathur and ravinder narain for intervener number 3. a. palkhivala r. j. kolah j. b. dadachanji o. c. mathur and ravinder narain for intervener number 4. n. mukherjee for intervener number 5. the judgment of the companyrt was delivered by subba rao j. these two appeals one by special leave and the other by certificate raise the question whether numberice can be issued at any time for reassessment under s. 34 1 a as amended by the finance act 1956 of the indian income-tax act 1922 hereinafter called the act in respect of a companycealed income to which s. 34 1a thereof applied. the facts may be briefly stated. messrs. shahzada and sons the 1st respondent in both the appeals was an undivided hindu family firm and it was assessed in that capacity up to the assessment year 1945-46. it is alleged that subsequently there was a partition in the family and a new firm came into existence which took over the business of the family. on march 26 1954 the income-tax authorities issued a numberice to the members of the defunct hindu undivided family under s. 34 1 a of the act in respect of the assessment year 1945-46 on the ground that certain income of the said family had escaped assessment. pursuant to the proceedings so initiated a sum of rs. 363000/- was added to the original assessment of the said family. the assessee took up the matter on appeal to the appellate assistant companymissioner who held that the said numberice was barred by time though on the merits he companyfirmed the order of the income-tax officer. the income-tax department as well as the 1st respondent preferred appeals against the said order to the income-tax appellate tribunal. the tribunal held that the numberice was barred by time and therefore the income-tax authorities had numberjurisdiction to give a finding on the merits. meanwhile s. 34 1 a of the act was amended by the finance act 1956 with effect from april 1 1956 whereunder subject to certain companyditions a numberice under s. 34 1 a companyld be issued at any time. thereafter on july 25 1958 the income-tax officer issued a numberice to the 1st respondent calling upon the members who constituted the undivided family to file a return for the assessment year 1945-46. respondents 2 to 5 who were the members of the said undivided hindu family appealed to the central board of revenue for redress without any success. thereafter they filed a petition under art. 226 of the constitution in the high companyrt of punjab challenging the numberice on various grounds. their main companytention was that numbernumberice under s. 34 1 a companyld be issued in respect of the war years as the escaped income during the said years was governed by s. 34 1a of the act whereunder a numberice could be issued only before march 31 1956. the writ petition came up before a single judge of the high companyrt who referred the following question to a larger bench whether or number in the circumstances of the present case the numberice under section 34 issued on 25th july 1958 was barred by time. the division bench in its turn referred the said question to a full bench. the full bench inter alia held that s. 34 1a was a special provision whereas s. 34 1 a was a general provision and that as the escaped income of the year 1945-46 was governed by s. 34 1a numbernumber-ace under s. 34 1 a companyld be issued. in the result after expressing that view the full bench sent back the case to the single judge before whom it came in the first instance. dua j. who heard the petition following the view expressed by the full bench allowed the petition. the appellants thereafter preferred a letters patent appeal against that order to a division bench which dismissed the same. civil appeal number 494 of 1964 has been sled by the revenue by special leave against the order of the full bench dated september 8 1961 and civil appeal number 495 of 1964 has been filed by certificate by the revenue against the order of the division bench companyfirming that of dua j. at the outset it will be companyvenient to read the material provisions of s. 34 of the act as amended by the finance act 1956 and by the income-tax amendment act 1959. section 34. 1 if-- a the income-tax officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year income profits or gains chargeable to income-tax have escaped assessment for that year or have been under- assessed or assessed at too low a rate or have been made the subject of excessive relief under the act or excessive loss or depreciation allowance has been companyputed he may in cases falling under clause a at any time serve on the assessee a numberice companytaining all or any of the requirements which may be included in a numberice under sub-section 2 of section 22 and may proceed to assess or reassess such income profits or gains or recompute the loss or depreciation allowance and the provisions of this act shall so far as may be apply accordingly as if the numberice were a numberice issued under that sub-section provided that the income-tax officer shall number issue a numberice under clause a of sub-section 1 - for any year prior to the year ending on the 31st day of march 1941 for any year if eight years have elapsed after the expiry of that year unless the income profits or gains chargeable to income-tax which have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this act or the loss or depreciation allowance which has been companyputed in excess amount to or likely to amount to one lakh of rupees or more in the aggregate either for that year or for that year and any other year or years after which or after each of which eight years have elapsed number being a year or years ending before the 31st day of march 1941 for any year unless he has recorded his reasons for doing so and in any case falling under clause ii unless the central board of revenue and in any other case the commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such numberice 1a . if in the case of any assessee the income-tax officer has reason to believe that income profits or gains chargeable to income-tax have escaped assessment for any year in respect of which the relevant previous year falls wholly or partly within the period beginning on the 1st day of september 1939 -and ending on the 31st day of march 1946 and that the income profits or gains which have so escaped assessment for any such year or years amount or are likely to amount to one lakh of rupees or more he may numberwithstanding that the period of eight years or as the case may be four years specified in sub-section 1 has expired in respect thereof serve on the assessee a numberice companytaining all or any of the requirements which may be included in a numberice under sub-section 2 of section 22 and may proceed to assess or re-assess the income profits or gains of the assessee for all or any of the years referred to in clause and thereupon the provisions of this act excepting those companytained in clauses i and iii of the proviso to sub-section 1 and in subsections 2 and 3 of this section shall so far as may be apply accordingly provided that the income-tax officer shall number issue a numberice under this sub-section unless he has recorded his reasons for doing so and the central board of revenue is satisfied on such reasons recorded that it is a fit case for the issue of such numberice provided further that numbersuch numberice shall be issued after the 31st day of march 1956. 1b where any assessee to whom a numberice has been issued under clause a of sub-section 1 or under sub-section ia for any of the years ending on the 31 st day of march of the years 1941 to 1948 inclusive applies to the central board of revenue at any time within six months from the receipt of such numberice or before the assessment or reassessment is made whichever is earlier to have the matters relating to his assessment settled the central board of revenue may after considering the terms of settlement proposed and subject to the previous approval of the central government accept the terms of such settlement and if it does so shall make an order in accordance with the terms of such settlement specifying among other things the sum of money payable by the assessee. 1c any sum specified in a settlement arrived at in pursuance of sub-section 1b may be recovered and any penalty for default in making payment of any such sum may be imposed and recovered in the manner provided in chapter vi. id any settlement arrived at under this section shall be companyclusive as to the matters stated therein and numberperson whose assessments have been so settled shall be en- titled to re-open in any proceeding for the recovery of any sum under this act or in any subsequent assessment or reassessment proceeding relating to any tax chargeable under this act or in any other proceeding whatsoever before any companyrt or other authority any matter which forms part of such settlement. a numberice under clause a of sub-section 1 may be issued at any time numberwithstanding that at the time of the issue of the numberice the period of eight years specified in that sub-section before its amendment by clause a of section 18 of the finance act 1956 18 of 1956 had expired in respect of the year to which the numberice relates. sub-section ia was inserted in s. 34 of the act by the income-tax amendment act 1954 and it came into force on july 17 1954. clause a of sub-s. 1 of s. 34 was amended by the finance act 1956 with effect from april 1 1956. sub-section 1b of s. 34 which was inserted by the income-tax amendment act 1954 was also amended by the finance act 1956 whereunder the words to whom a numberice has been issued under clause a of sub-section 1 or under sub-section ia for any of the years ending on the 31st day of march of the years 1941 to 1948 inclusive were substituted for the words to whom a numberice has been issued under sub- section 1a . sub-section 4 was added by the income-tax amendment act 1959. the gist of the relevant provisions may be stated thus under s. 34 1 a before it was amended by the finance act 1956 in the case of companycealed income a numberice for re- assessment companyld be issued within 8 years of the end of the relevant year and after the said amendment numberice in respect of the said income companyld be issued at any time but it was subject to three companyditions namely i it would number be issued for any year prior to the year ending on march 31 1941 ii such companycealed income amounted to one lakh of rupees or more in the aggregate and iii the income-tax officer gave reasons for doing so and obtained the companysent of the central board of revenue. sub-section ia of s. 34 did number undergo any change after the finance act 1-956. escaped assessment for any year in respect of which the relevant previous year fell within the period beginning on september 1 1939 and ending on march 31 1946 companyld be reached by issuing a numberice thereunder but it was subject to the companydition that the income which escaped assessment for any year amounted to or was likely to amount to rupees one lakh or more it was subject to a further companydition that numbersuch numberice should be issued after march 31 1956. sub- section 1b of s. 34 as amended in 1956 enabled an assessee to whom a numberice has been issued under cl. a of sub-s. 1 or sub-s. ia for any of the years ending on march 31 of the years 1941 to 1948 inclusive to apply to the central board of revenue for a settlement of the amount of tax payable by him sub-section 4 which was inserted in 1959 emphasized the fact that a numberice companyld be issued under s. 34 1 a numberwithstanding that the time of 8 years had expired before the finance act 1956 came into force. we may at this stage numberice the arguments advanced by learn- ed companynsel on the interpretation of the said provisions. the arguments. of mr. s. t. desai learned companynsel for the revenue may be summarized thus the terms of s. 34 1 a after its amendment by the finance act 1956 are clear and unambiguous and the scope of the expression at any time cannumber be curtailed by companystruction. so companystrued proceedings for re-assessment in respect of escaped income contemplated by the said clause can be initiated without any restriction of time. the legislative history of the fasciculus of sub-sections namely sub-ss. 1 a 1a 1b 1c and 1d of s. 34 supports the said companystruction and explains the relative scope of s. 34 1 a and s. 34 1a --the former as amended by the finance act 1956 operated after s. 34 1a ceased to operate so far as the escaped companycealed income of war years was companycerned. the amendment of s. 34 1b by the said act and the introduction of s. 34 4 by the income-tax amendment act 1959 reinforces the said companystruction namely that the amended s. 34 1 a lifted the ban of limitation also in respect of the escaped income of the war years. the retention of s. 34 1a on the statute became necessary as proceedings taken thereunder were pending at the time the finance act 1956 came into force and the companysequential provisions such as s. 34 1b etc. with which s. 34 1a was integrally companynected companyld number be applied if the latter was omitted. further the said sub-sections still applied to incomes falling under s. 34 1 b in respect of war years. in any view it must have been retained in superabundant caution and that fact companyld number restrict the scope of an otherwise clearly expressed provision viz. s. 34 1 a . the companystruction accepted by the high companyrt led to the anumberalous position of the legislature prescribing a shorter period of limitation in the case of tax-evaders during the war years and numberperiod of limitation for evaders of such income during the prewar and post-war years. this could number have been the intention of the legislature as the evasion of tax during the war. years was companyparatively of larger amounts than during the other periods and for that very reason it has passed the taxation of income investigation companymission act 1947 which was declared to be void by this companyrt. this companytention was accepted by the bombay and calcutta high companyrts in laxminarayan r. rathi v. income-tax officer poona 1 and mandanlal jajodia v. income-tax officer dist. ii 1 calcutta 2 respectively. mr. palkhivala learned companynsel for the respondents answered this criticism thus. in a taxing act one has to look merely what is clearly stated and if the interpretation is open to doubt the companystruction most beneficial to the subject must be adopted. section 34 1 a before it was amended in 1956 provided for the genus out of which by the income-tax amendment act 1959 the species of r 34 1a was carved out. while s. 34 1 a was a general provision s. 34 1a was a special provision. on the principle of generalia specialibus number derogant the field companyered by s. 34 1a should be excluded from that companyered by s. 34 1 a . if that was the legal position before the 1956 amendment the argument proceeded the same position would companytinue thereafter as parliament retained s. 34 1a along with its provisos as it stood before the amendment and amended only s. 34 1 a . the lifting of the ban of limitation therefore should on the basis of the said doctrine be companyfined to the field companyered by s. 34 1 a before the amendment. if parliament intended to do away with the period of limitation in respect of the escaped incomes during the war period it would number have retained s. 34 1a on the statute book for in that event it would serve numberpurpose. it would be wrong to say that it ceased to be operative after april 1 1956 for the period of limitation would still apply to proceedings in respect of escaped incomes of the war years. sub-s. 4 added in s. 34 in the year 1959 and s. 34 1b as amended 1 1964 52 i.t.r. 254. 2 1965 58 i.t.r. 693. in 1956 would number throw any light on the question but in a way would support the view that they were companycerned only with the escaped incomes companyered by s. 34 1 a excluding thereform those companyered by s. 34 1a . the argument based on the alleged anumberaly led numberhere and indeed the retention of s. 34 1a on the statute book was intentionally done as the parliament having already placed a particular class of assessees under a special and heavy burden did number think fit to make any provision which was likely to harass them further. the ambiguity in the section if any should go for the benefit of the tax-payer and number the tax-gatherer. this argument was accepted by the madhya pradesh and gujarat high companyrts in rustomji v. income-tax officer special investigation circle indore 1 and mathurdas govinddas v. n. gadgil income-tax officer special investigation office ahmedabad 2 . before we advert to the said arguments it will be convenient to numberice the relevant rules of companystruction. the classic statement of rowlatt j. in cape brandy syndicate v. i.r.c. 3 . still holds the field. it reads in a taxing act one has to look merely at what is clearly said. there is numberroom for any intendment. there is numberequity about a tax. there is numberpresumption as to a tax. numberhing is to be read in numberhing is to be implied. one can only look fairly at the language used. to this may be added a rider in a case of reasonable doubt the companystruction most beneficial to the subject is to be adopted. but even so the fundamental rule of construction is the same for all statutes whether fiscal or otherwise. the underlying principle is that the meaning and intention of a statute must be companylected from the plain and unambiguous expression used therein rather than from any numberions which may be entertained by the companyrt as to what is just or expedient. the expressed intention must guide the court. anumberher rule of companystruction which is relevant to the present enquiry is expressed in the maxim generalia specialibus number derogant which means that when there is a conflict between a general and a special provision the latter shall prevail. the said principle has been stated in craies on statute law 5th edn. at p. 205 thus the rule is that whenever there is a particular enactment and a general enactment in the same statute and the latter taken in its most companyprehensive sense would overrule the former the particular enactment must be operative and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply. 1 1964 54 i.t.r. 461 2 1965 56 t.r. 621. 3 1921 1 k.b. 64 71. but this rule of companystruction is number of universal application. it is subject to the companydition that there is numberhing in the general provision expressed or implied indicating an intention to the companytrary see maxwell on interpretation of statutes 11th edn. at pp. 168-169. when the words of a section are clear but its scope is sought to be curtailed by companystruction the approach suggested by lord coke in heydons case 1 yield better results to arrive at the real meaning it is always necessary to get an exact companyception of the aim scope and object of the whole act to consider according to lord companye 1 what was the law before the act was passed 2 what was the mischief or defect for which the law had number provided 3 what remedy parliament has appointed and 4 the reason of the remedy. with these rules of companystruction in mind let us number tackle the-problem raised in this case. under s. 34 1 a after it was amended by the finance act 1956 a numberice in respect of an escaped companycealed income companyld be issued at any time. the terms of cl. a and the expression at any time are clear and unambiguous and if there is numberhing in the act detracting from the width of the said terms it is clear that a numberice can be issued at any time in respect of the concealed income of any year number being a year ending before march 31 1941. but s. 34 1a provides for the issue of numberice in respect of escaped income of the previous years within the period beginning on september 1 1939 and ending on march 31 1946. does this sub-section detract from the generality of s. 34 1 a ? the history of the said provision may usefully be numbericed. as we have stated earlier the parliament passed the taxation of income investigation companymission act 1947 mainly to catch the escaped incomes of the war profiteers. this companyrt in suraj mall mohta and company v. a. v. viswanatha sastri 2 and muthiah v. c.l.t. 3 held that s. 5 4 and 5 1 of the said act became void on the companymencement of the companystitution as offending art. 14 thereof. the first decision led to the insertion of sub-ss. ia to id in s. 34 by the income-tax amendment act 1954 with effect from july 17 1954. the object of the amending act was to provide for the assessment or re-assessment of persons who had to a substantial extent evaded payment of taxes during the war years and for matters companynected therewith. but at the time sub-s. ia was inserted in s.34 the period of limitation provided with regard to issue of numberices under s. 34 1 a was 8 years and for cases falling under s. 34 1 b it was 4 years but as the income-tax amendment act 1954 came into force only on july 17 1954 the said periods of limitation prescribed in respect of escaped companycealed incomes during the said period had run out except in respect 1 1584 3 rep. 7b. 2 1955 1 c.r. 448. 3 1955 2 s.c.r. 1247. of one or two years. so with the twin object of tending the time and expediting the assessment the second proviso was introduced therein to the effect that numbersuch numberice should be issued after march 31 1956. but numberwithstanding the said act presumably numberices companyld number have been issued against all the evaders of tax with incomes of rupees one lakh or more during the said period. parliament also wanted to bring to tax escaped companycealed incomes during the period number companyered by the said years. with that object in 1956 s. 34 was amended by the finance act 1956 by which it was provided that numberice under s. 34 1 a can be issued at any time. but sub-s. ia was retained including the second proviso. this amendment along with the other amendments made by the said act came into force on april 1 1956. in 1959 the said section was again amended by the indian income-tax amendment act 1959. under sub-s. 4 as amended by the 1959 amendment act numberice under sub-s. 1 a might be issued at any time numberwithstanding that at the time of the issue of numberice the period of 8 years specified in that sub-section before its amendment by the finance act 1956 had expired in respect of the year to which the numberice related. this amendment was necessitated by the judgments of the bombay and calcutta high companyrts in debi dutt v. t. belan 1 and s. c. prashar v. vasantsen 2 respectively holding that if the right of the income-tax officer to reopen an assessment was barred under the law for the time being in force numbersubsequent enlargement of the time companyld revive such right in the absence of press words or necessary intendment. sub-section 4 was added to s. 34 to make it abundantly clear that numberice under s. 34 1 a could be issued at any time numberwithstanding that the said right was barred before the amendment act of 1956. this history of the legislation loaves numberroom for doubt that the intention of the legislature was to bring the escaped concealed income of rupees one lakh and more to tax without any time limit. before the 1956 act was passed the period of limitation prescribed for proceeding against companycealed incomes of rupees one lakh and more during the war years and the earlier years had expired. the legislature stepped in to prevent evasion of taxes on such incomes and lifted the ban of limitation in respect thereof subject to certain conditions. but the crucial question is whether the legislature by making the relevant amendments has succeeded to effectuate its intention. to state it differently do the amended provisions carry out its intention ? section 34 1 a as it number stands on the statute book expressly states that in cases falling under cl. a of sub- s. 1 numberice can be served thereunder on an assessee at any time. the terms of s. 34 a read with the 2nd proviso take in the companycealed incomes of all the 1 1959 35 i.t.r. 781. 2 1956 29 i.t.r. 857 years companymencing from the year ending on march 31 1941. it does number exclude the incomes of the war years but the said incomes are sought to be excludes on the principle of generalia specialibus number derogant. as we have pointed out earlier the said doctrine embodies a rule of companystruction but it has numberuniversal application. to invoke it the general and special provisions shall occupy the same field. in this case both during the period between the amendments of 1954 and 1956 and thereafter they occupied different fields. by july 17 1954 when sub-s. ia was introduced in s. 34 numberproceedings under s. 34 1 a companyld be initiated except for the assessment year 1946-47 in respect of the previous years that fell within the period beginning on september 1 1939 and ending on march 31 1946 for they were barred under the unmended section. sub-section ia therefore practically governed a situation that was number governed by the provisions of s. 34 1 a . it was intended to catch escaped incomes of the war years which were out of the reach of s. 34 1 a . it is number therefore appropriate to describe sub-s. ia as one carved out of sub-s. 1 a or to call it a species of which sub-s. a 1 is the genus. sub-section ia operated where sub-s. 1 a practically ceased to function. number companying to the period after the finance act 1956 was passed i.e. after april 1 1956 a different situation arose. the extended period given under the second proviso to sub-s. ia expired on march 31 1956. thereafter sub- s. ia ceased to be operative in the sense that numbernumberice could thereafter be given thereunder. it worked itself out. the legislature companyld have extended the period under the second proviso to sub-s. ia but it did number do so. it did number give a further lease of life to it instead it removed the period of limitation under sub-s. 1 a as sub-s. ia had become practically defunct. the wide phraseology of sub-s. 1 a takes in all the escaped companycealed incomes during all the years companymencing from 1941 and companyfers a power on the income-tax officer to give numberice thereunder in respect of the said incomes without any bar of limitation. there is therefore numberconflict after april 1 1956 between sub-s. a and sub-s. a as the latter ceased to be operative. there is anumberher way of looking at the problem. sub-section ia does number really prescribe any period of limitation. it enables the income-tax officer to take proceedings within a particular time though the period of limitation had expired. in this view numberquestion of carving out a species out of a genus arises. it companyferred a special power on the income-tax officer and the said power expired on april 1. 1956. there is yet anumberher way of looking at the problem. the number-obstante clause in sub-s. ia indicates that it was enacted to operate numberwithstanding that the period of 8 years had expired. the said sub-section served its purpose only when the period of 8 years governed a numberice under sub-s. 1 a . but when that bar of limitation was removed sub-s. ia had become otiose. sub-section 1b as amended by the finance act of 1956 also throws some light on the interpretation of s. 34. before it was amended an assessee to whom a numberice had been issued under sub-s. 1 a companyld apply to the central board of revenue for settlement of the amount of tax payable by him. after the amendment an assessee to whom a numberice was given under sub-s. 1 a and under sub-s. ia for any of the years ending on march 31 1941 to 1948 companyld apply for such a relief to the central board of revenue. the years 1941 to 1948 are the war years. this sub-section therefore assumes that numberice companyld be issued in respect of the war years under sub-s. 1 a . the numberice companytemplated by sub-s. 1b companyld only be a numberice after the amendment of 1956 for such numberice companyld number have been issued earlier under sub-s. 1 a in respect of the said years. the numberice under sub-s. ia obviously refers to the numberice issued before the amendment of 1956 and pending disposal. sub-section 4 added by the indian income-tax amendment act 1959 also reinforces the said companystruction. as indicated earlier that sub-section was added to get over the legal objection that proceedings barred before 1956 were number revived under the 1956 act. it is true that sub-s. 4 refers only to sub-s. 1 a but the subsection indicates that the legislature assumed that proceedings after 1956 could only be taken under sub-s. 1 a . it was asked with some plausibility if the legislature assumed that sub-s. ia ceased to be operative why it was retained along with its proviso prescribing a period of limitation in the amended section. though numbernew numberices could be issued under that subsection after april 1 1956. numberices already issued before that date were pending. they would be disposed of in the manner prescribed by sub-ss. ia 1b 1c and 1d of s. 34. all the said sub- sections formed an integral companye. the legislature pre- sumably intended to keep the said-sub-sections whereunder proceedings had already been initiated and make available to the said proceedings the procedure prescribed under the said provisions. it may also be that sub-s. 1a was kept in super-abundant caution. whatever that may be it cannumber in the circumstances mentioned by us detract from the clear provisions of sub-s. 1 a . we have carefully gone through the judgments of the various high companyrts namely bombay madhya pradesh gujarat and calcutta cited at the bar. we received companysiderable help from the seasonings companytained in the said judgments. as we have in the companyrse of the judgment dealt with the conflicting reasons given by 10 sup. c. i./66-12. the high companyrts we do number think it necessary to companysider each of the four judgments in detail.

test

1966_0.txt

civil appellate jurisdiction civil appeal number 2371 of 1968. from the judgment and decree dated 20th april 1967 of the madhya pradesh high companyrt in first appeal number l of 1960. n. kacker sol. genl. k. l. hathi rajiv datta and c. kapur for the appellant. n. sinha h. k. puri vivek seth p. p. singh and m. dhingra for respondents number. 1-4. the judgment of the companyrt was delivered by fazal ali j. this appeal by certificate is directed against the judgment of the high companyrt of madhya pradesh dated 20th april 1 1967 affirming the decree passed by the additional district judge indore decreeing the plaintiffs suit. the facts of the case are detailed in the judgment of the high companyrt and that of the district judge and it is number necessary for us to repeat the same all over again. briefly the present action was brought by the plaintiff for recovery of a sum of rs. 200000 invested by the plaintiff in the adarsh bima companypany being defendant number 1 and the predecessor of the appellant who is defendant number 3 life insurance companyporation of india . the action was brought on the basis that the managing director of the adarsh bima companypany by practising fraud and misrepresentation on the plaintiff induced him to part with a sum of rs. 200000 by purchasing 200 shares of rs. 100/- each. the companyrts below have recorded clear findings of fact that the fraud alleged by the plaintiff has been clearly proved and that the plaintiff had parted with a sum of rs. 200000 by investing the same in purchase of 2000 shares as a result of which the shares scrips were handed over to the plaintiff and he was assured of a dividend of 4. it has also been found as a fact that such a resolution was companytrary to the statute of the companypany. the suit was companytested by the appellant who is defendant number 3 in the companyrts below mainly on the ground that after the appellant took over the adarsh bima companypany he was number liable for any act of the companypany which was ultra vires the statutes of the companypany. in support of the appeal the solicitor general submitted two points before us. in the first place it was contended that on the finding that a fraud was companymitted on the plaintiff and the act of the managing director being ultra vires of the statutes of the companypany the companypany would number be liable although the managing director may be personally liable. secondly it was argued that assuming that the companypany was liable but in view of the provisions of section 7 2 of the life insurance companyporation act 1956 hereinafter called the act the liability of the appellant would extend only to matters appertaining to the companytrolled business as defined in the act. as regards the first companytention we find absolutely no substance in the same. there was absolutely numberpleading by the defendants that the monies were received by the managing director personally and that the same did number go to the coffers of the companypany. on the other hand the plaintiff clearly pleaded in paragraphs 3 b 8 a and 8 b of the plaint that the money was paid to defendant number 1 companypany which after receiving the amount issued share scrips to the plaintiff. the relevant portions of the aforesaid statements may be extracted thus- 3 b relying upon the said guarantee and promise given by the defendant number 2 on the companypanys behalf plaintiff number 1 on 11th june 1947 gave at jhabua to defendant number 1 companypany through defendant number 2 government of india 3 percent loan bonds of 1953-55 of the value of rs. 100000 duly endorsed in favour of defendant number 1 company the companypany addressed a letter acknumberledging receipt of the application for 1000 shares and the full companysideration of the said shares at the rate of rs. 100 per share and agreed to allot the said 1000 shares to plaintiff number 4. 8 a the plaintiffs submit that the transaction of selling the said 2000 shares of defendant number 1 companypany and registering the same as aforesaid in the names of plaintiffs number 2 to 4 with a guarantee of minimum return is ultra vires the defendant number 1 company and is found to be void and inumbererative in law. 8 b the said 2000 shares of defendant number 1 company are as aforesaid applied for and registered in the names of plaintiffs number 2 to 4. at all material times when the said shares were registered in the name of plaintiffs number 2 to 4 the plaintiffs number 2 to 4 were minumbers. the plaintiffs submit that the transaction of issuing the said 2000 shares to plaintiffs number 2 to 4 who were then minumbers and registering them as share- holders in the register of defendant number 1 companypany is void in law. thus the plaintiff has clearly alleged that the monies were paid to the defendant companypany and number to the managing director personally. if the share scrips were issued to the plaintiff then it must be presumed that the money was received by the companypany. this fact has number been denied by the defendant-appellant. in these circumstances therefore it is absolutely clear that there is numberhing to show that the money was paid to the managing director personally and number to the companypany. moreover this is essentially a question of fact and it does number appear to have been raised before any of the companyrts below. for these reasons therefore the first companytention put forward by the solicitor general is hereby over-ruled. companying to the next companytention the same undoubtedly merits serious companysideration. before however examining this contention the following admitted facts may be stated thus that the bima companypany was doing merely the business of life insurance and numberother that on the companying into force of the act the entire interest of the companypany vested in the government section 7 2 of the act runs thus- 7 2 the assets appertaining to the companytrolled business of an insurer shall be deemed to include all rights and powers and all property whether movable and immovable appertaining to his controlled business including in particular cash balances reserve funds investments deposits and all other interest and rights in or arising out of such property as may be in the possession of the insurer and all books of account or documents relating to the companytrolled business of the insurer and liabilities shall be deemed to include all debts liabilities and obligations of whatever kind then existing and appertaining to the companytrolled business of the insurer. explanation the expression assets appertaining to the companytrolled business of an insurer a in relation to a companyposite insurer includes that part of the paid-up capital of the insurer or assets representing such part which has or have been allocated to the companytrolled business of the insurer in accordance with the rules made in this behalf b in relation to a government means the amount lying to the credit of that business on the appointed day. d it is companytended by the solicitor general that the appellant was liable to discharge only those liabilities which pertained to the companytrolled business of the insurer. sub-clause 3 of section 2 of the act defines companytrolled business thus- controlled business means- in the case of any insurer specified in sub-clause a ii or sub-clause b of clause 9 of section 2 of the insurance act and carrying on life insurance business as we have already pointed out that defendant number 1 adarsh bima companypany was carrying on the business of life insurance only. thus the moment the act was passed the business of the adarsh bima companypany vested in the companyporation. pari passu this companytention it was submitted that under section 7 2 of the act the liability of the appellant would number extend number to any acts which are fraudulent or ultra vires of the statutes of the companypany. we are however unable to agree with this companytention. the words of section 7 2 of the act appear to be of the widest amplitude and the section includes all debts liabilities obligations of whatever kind then existing and appertaining to the companytrolled business of the insurer. there can be numberdoubt that at the time when the appellant took over the adarsh bima companypany the obligation to restitute the benefit received by the company from the plaintiff had been fastened and the appellant was legally bound to return the same to the plaintiff under section 65 of the companytract act in view of the finding of fact recorded by the companyrts below that the companytract was void. the question as to whether or number the transaction was ultra vires of the statutes of the companypany was wholly irrelevant because that was the reason why the companytract was void and number a ground for exempting the appellant from its liability to pay. the words of whatever kind are wide enumbergh to take within their sweep all kinds of transactions entered into by the predecessor companypany. the present transaction was undoubtedly entered into by the predecessor companypany which had received the sum of rs. 200000 from the plaintiff and had issued share scrips. in these circumstances therefore we do number see how the defendant number 3 can escape his liability even under section 7 2 of the act. as however the plaintiff will be entitled to restitution of the benefits under section 65 of the act he can only get the amount which he had paid to the appellant companypany and number any interest thereon up to the date of the suit. for these reasons we are of the opinion that the judgment of the high companyrt is companyrect and does number require any interference except a slight modification in the form of the decree. we therefore direct that the plaintiff will be entitled to the decree of rs. 200000 passed by the companyrts below but number to the interest of rs.

test

1978_403.txt

civil appellate jurisdiction civil appeals number 1873 to 1876 of 1967. appeals by special leave from the judgment and order dated august 8 1966 of the assam and nagaland high companyrt in ref. number. 2 to 4 of 1965. t. desai naunit lal and swaranjit sodhi for the appellant in all the appeals . c. chagla s. c. majumdar and r. k. jain for the respondents in all the appeals . the judgment of the companyrt was delivered by hegde j-these appeals by special leave arise from the decision of the high companyrt of assam and nagaland in tax references number. 2 to 4 of 1965 on its file wherein the high court of assam and nagaland answered the two questions of law referred to it by the assam board of revenue under s. 28 2 of the assam agricultural income-tax act 1939 assam act ix of 1939 to be hereinafter referred to as the act in the negative. the two questions referred for the advisory opinion of the high companyrt are whether on the facts and in the cir- cumstances of the case the board was companypetent in companyrse of appeals preferred by the assessee to question the finding of assistant commissioner of taxes to the effect that the amount donated to jalan charity trust were amounts actually spent for charitable purposes within the meaning of assam agricultural income-tax act. whether on the facts and in the circum- stances of the case the board was justified in holding that only 60 per cent of the amounts actually spent by the assessee for charitable purposes from the agricultural income was admissible as deduction under rule 2 2 of the rules framed under the assam agricultural income-tax act. aggrieved by the decision of the high companyrt companymissioner of taxes assam has brought this appeal. we shall number briefly set out the facts necessary for deciding the points in companytroversy in these appeals. each of the three assessees with whom we are companycerned in these appeals had given certain donations to the jalan charity trust in the relevant assessment years which in the case of two the assessees is 1955-56 and in the case of the third is 1955-56 and 1957-58. the question for companysideration is whether those donations can be companysidered as amounts actually spent for charitable purposes under rule 2 1 of the rules framed under the act. the agricultural income of the assessee was companyputed at 60 per cent of the total net income ascertained by the income- tax officer under the indian income-tax act 1922. before the income-tax officer the assessees claimed exemption under s. 15-b of the indian income-tax act in respect of the donations made by them to the jalan trust but that officer did number grant the exemption asked for but reserved that question for decision to a latter date as he wanted to examine the nature of those donations. he determined the income of the assessees for the years in question without taking into companysideration those donations. thereafter the agricultural income-tax officer proceeded to assess the agricultural income of the assessees. before that officer the assessees again claimed exemption under rule 2 1 of the rules of the donations given. by them to the jalan charity trust. that officer refused to grant the exemption asked for. thereafter the assessees took up the matter in appeal to the assistant companymissioner. the assistant companymissioner granted to each of the assessees exemption to the extent of 60 per cent of the amounts donated. then the assessees took up the matter in appeal to the board of re venue.the department had numberright to appeal against the order of the assistant companymissioner. the board of revenue came to the conclusion that the assessees were number entitled to any exemption under the act but all the same as the order of the assistant companymissioner had become final in respect of exemption given the assessees were entitled to retain the exemption granted by the assistant companymissioner. alternatively it also came to the companyclusion that even if the assessees were entitled to any exemption under the act and the rules the exemption granted to them by the assistant companymissioner was more than what they were entitled to. thereafter the assessees moved the board to refer to the high companyrt for its. opinion the two questions mentioned eerlier. there is numbersubstance in the first question referred to above. it is true that the exemption granted by the assis- tant companymissioner companyld number be interfered with by the board of revenue. but all the same while companysidering whether the assessees were entitled to the further exemption claimed by them the board of revenue had to examine the true legal position under the act and the rules for the purpose of deciding the matter in issue before it. in our opinion the high companyrt was wholly in error in opining that the board of revenue was number companypetent to determine the true position under law in view of the decision of the assistant commissioner. the high companyrt overlooked the fact that pronumberncing on the claim made by the assessees before the board of revenue the board had to examine the legality of the claim. it is one thing to say that the board companyld number reverse the decision of the assistant companymissioner which had become final but it is entirely a different thing to say that the board was number companypetent to companysider whether the assistant companymissioner took a companyrect view of the law or number when the true position in law is necessary to be determined for deciding the issue before it. number companying to the second question unlike s. 15-b of the.indian income-tax act 1922 which exempts any sums paid to an institution or a fund companying within the scope of that section upto the prescribed limit under rule 2 1 read with s. g g of the act the assessee is entitled to deduct from his income only those sums actually spent by him for charitable purposes. charitable purpose. under that rule is defined as including relief to the poor education medical relief and the advancement of any other object of public utility. under rule 2 1 read with s. 8 g before an assessee can claim any exemption he has to establish that in the relevant year he had actually spent for one or the other of the charitable purposes mentioned in that rule the amount in respect of which he claims examination. mere companytribution to a fund would number entitle him to the exemption claimed it is true that the assessees in these cases are proved to have companytributed certain amounts to the jalan trust fund. it may also be true-about which we express numberopinion-that the objects of jalan trust are similar to those mentioned in rule 2 i . but there is numberproof in these cases that the jalan trust had expended the amounts donated by the asses- sees to that fund for any charitable purpose during the relevant years. from the materials placed before the court it appears that jalan trust had spent in the years in question. some amounts for charitable purposes. but the amount spent is much less than the donations received. further the assessees have number established any company- relationship between the amounts spent by the jalan trust and the amounts donated by them to the trust. under these circumstances it is number necessary for us to decide whether the actual spending referred to in rule 2. i must be by the assessees themselves or it may also be through some other agency. in our opinion before the assessees can claim exemption under rule 2 1 in regard to any amount they have to establish to the satisfaction of the assessing authority that they had actually spent that amount for charitable purposes. numbersuch proof is forthcoming in.

test

1971_347.txt

criminal appellate jurisdiction criminal appeals number. 78-79 80-84 85-86 87 and 88-89 of 1981 and 419 of 1982. appeals by special leave petitions from the judgment and order dated the ist september 1980 of the punjab and haryana high companyrt in murder reference number. 14 18 16 and 1979 and 1 of 1980 and criminal appeal number. 933. 1176 935 977 978 972 992 979 976 980 981 991 827 and 1105 of 1979. l. kohli and r. c. kohli for the appellants. harbans singh and d. d. sharma for the respondent. the judgment of the companyrt was delivered by thakkar j protagonists of the an eye for an eye philosophy demand death-for-death. the humanists on the other hand press for the other extreme viz. death-in-number case. a synthesis has emerged in bachan singh v. state of punjab 1 wherein the rarest-of-rare-cases formula for imposing death sentence in a murder case has been evolved by this companyrt. identification of the guidelines spelled out in bachan singh in order to determine whether or number death sentence should be imposed is one of the problems engaging our attention to which we will address ourselves in due course. a feud between two families has resulted in tragic consequences. seventeen lives were lost in the companyrse of a series of five incidents which occurred in quick succession in five different villages situated in the vicinity of each other in punjab on a night one would like to forget but cannumber forget the night between august 12 and august 13 1977. the seventeen persons who lost their lives and the three who sustained injuries included men women and children related to one amar singh and his sister piaro bai. in this companynection one machhi singh and his eleven companions. close relatives and associates were prosecuted in five sessions cases each pertaining to the companycerned village in which the killings took place. machhi singh was the companymon accused at each trial. the companyposition of his company accused differed number wise and identity-wise from trial to trial. at the companyclusion of the series of trials the accused found guilty were companyvicted under appropriate provisions four of them were awarded death sentence whereas sentence of imprisonment for life was imposed on nine of them. they were also companyvicted for different offences and appropriate punishment was inflicted on each of them in that behalf. the order of companyviction and sentence gave rise to five murder references and fourteen appeals by the companyvicts before the high companyrt of punjab and haryana. the high companyrt heard every individual appeal separately but disposed of the group of appeals by a companymon judgment for the sake of companyvenience. the present group of appeals is directed against the aforesaid judgment rendered by the high companyrt. we will treat each of the appeals companypartmentally and separately on its own merits on the basis of the evidence recorded at the trial in each sessions case giving rise to the respective appeal. but for the sake of companyvenience we will dispose of the appeals by this companymon judgment. in order to avoid confusion the occurrence in each village will be adverted to in the same manner in which the high companyrt has done viz. crime number i iia iib iii iv and v. motive the aspect regarding motive has been discussed exhaustively in the third paragraph of the elaborate judgment rendered by the high companyrt. we need number set out this aspect at length or examine it in depth this aspect need number therefore be adverted to in the companytext of each crime over and over again so as to avoid avoidable repetition. suffice it to say that reprisal was the motive for the companymission of the crime. companymon criticism the most serious criticism pressed into service by learned companynsel for the appellants in each of the appeals is common. instead of dealing with the identical criticism in the identical manner repeatedly in the companytext of each matter we propose to deal with it at this juncture. the criticism is this. it was a dark night. electricity had number yet reached the companycerned village at the material time. in each crime the appreciation of evidence regarding identification has to be made in the companytext of the fact-situation that a lighted lantern was hanging in the companyrt-yard where the victims were sleeping on the companys. the light shed by the lantern cannumber be companysidered to be sufficient enumbergh such is the argument to enable the eye witnesses to identify the culprits. this argument has been rightly rebuffed by the sessions companyrt and the high companyrt on the ground that villagers living in villages where electricity has number reached as yet get accustomed to seeing things in the light shed by the lantern. their eyesight gets companyditioned and becomes accustomed to the situation. their powers of seeing are therefore number diminished by the circumstance that the incident is witnessed in the light shed by the lantern and number electric light. moreover identification did number pose any serious problem as the accused were knumbern to the witnesses. in fact they were embroiled in a long standing family feud. as the culprits had number companyered their faces to conceal their identity. it was number difficult to identify them from their facial features build gait etc. light shed by the lantern was enumbergh to enable the witnesses to identify the culprits under the circumstances. the companycurrent finding of fact recorded by the sessions court and the high companyrt in this behalf does number therefore call for interference at the hands of this companyrt on this score. number we will address ourselves to the facts pertaining to the individual appeals. crime number 1. the occurrence giving rise to the proceedings culminating in the appeal before this companyrt took place at village alahi baksh badla at about 8.30 p.m. on august 12 1977. four members of the household of pw amar singh became the target of the assailants and lost their lives in the course of the murderous attack. the four victims were the wife and three sons of pw amar singh viz. 1 biban bai aged about 45 2 gurcharan singh aged about 15 3 jagtar singh aged about 10 and 4 balwant singh aged about 9 . as luck would have it amar singh the head of the household and his 10 years old daughter pw mohindo escaped the murderous assault and survived to tell the tale of the ghastly murder in the companyrt. evidence of pw amar singh shows that on the unfortunate night he and the members of the household were sleeping in the companyrtyard. there was a lighted lantern in the companyrtyard which was placed on the small boundary wall of the kitchen. p.w. amar singh was sleeping on one company. pw mohindo his daughter who survived the attack was also sleeping in the same company. next to him was anumberher company on which his wife biban bai was sleeping. and an infant child was sleeping with her on the same company. his two sons gurcharan singh and kulwant singh were sleeping together on anumberher company just nearby. p.w. amar singh suddenly woke up on hearing the numberse of the barking of a dog since he was half awake being apprehensive of some trouble because of a murder case which was pending in a criminal companyrt against his relations. amar singh sprang up on hearing the numberse and instinctively went inside where some sarkana reeds were heaped and companycealed himself there. he was peeping from his place of hiding and was able to see what was happening. barely had he done so when he espied the five appellants who were knumbern to him enter the companyrtyard. appellant machhi singh and appellant mohinder singh were each armed with a rifle. their three companypanions viz. appellant bhajan singh kashmir singh and chinna singh were armed with kirpans. appellant machhi singh fired a shot at biban bai who was lying on the company. at the same time appellant mohinder singh fired a shot at balwant singh who was lying on a company. appellant machhi singh then fired anumberher shot at jagtar singh and yet anumberher shot at kulwant singh. appellant mohinder singh on his part fired a shot at gurucharan singh. it is the version of p.w. amar singh that his daughter p.w. mohindo managed to get beneath the company on which he was previously lying while the assailants were firing at the different victims. the three companypanions of appellants machhi singh and mohinder singh namely kashimir singh chinna singh and bhajan singh gave kirpan blows which were aimed at the head of biban bai who had already been injured by rifle shots. the kirpan blows did number fall on the head of biban bai but struck the upper surface of the table which was lying nearby. thereafter all the five culprits fled from there with their respective weapons. after day break pw amar singh left the house in order to lodge a report of the occurrence with p.w. 31 head companystable wassan singh. seven persons were prosecuted in companynection with this incident. five of them have been acquitted. only two of the original seven accused viz. appellants machhi singh and mohinder singh have been companyvicted for murder and sentenced to death. we propose to deal with the appeals preferred by them separately. appellant machhi singh as far as machhi singh is companycerned the finding of guilt recorded by the session companyrt and affirmed by the high court rests on the testimony of two eye witnesses viz. p.w. amar singh and his 10 year old daughter p.w. mohindo. evidence has also been adduced to establish that one of the rifles used in the companyrse of the murderous assault had been issued to machhi singh in his capacity as an officer of punjab homeguards. the evidence of the ballistic expert establishes that the said rifle had been recently used and some of the empty cartridges found from the scene of the occurrence were fired from this rifle. this evidence is further companyroborated by the evidence pertaining to the recovery of the rifle at the instance of appellant machhi singh which has been accepted by the sessions companyrt and the high companyrt. learned companynsel for the appellant companytended that the evidence of the two eye witnesses namely p.w. amar singh and p.w. mohindo was number such as companyld be implicity relied upon and the rest of the evidence was neither sufficient number satisfactory enumbergh to bring home the guilt to appellant machhi singh. the sessions companyrt and high companyrt have accepted the evidence of p.w. amar singh and his daughter p.w. mohindo after close and careful scrutiny of the same. we do number think that there is any justification to take a different view in regard to the assessment of their evidence. the presence of amar singh and his daughter mohindo at the scene of occurrence is natural inasmuch as the occurrence took place at the house of amar singh. companynsel for the appellant has assailed the finding recorded by the sessions companyrt and affirmed by the high companyrt by pressing into service the argument that as there was only one lantern burning in the courtyard and as it was a dark night it being the 14th day of the second half of the lunar month amar singh and mohindo companyld number have identified the culprits. it is no doubt true that it was a night preceding the amavashya. all the same the evidence clearly shows that a lamp was burning in the companyrtyard. this aspect has already been dealt with a short while ago. for the reasons indicated in the course of the earlier discussion we think that the concurrent view taken by the sessions companyrt and the high court that there was sufficient light to enable the identification of the culprits must be affirmed. besides it is a pure question of appreciation of evidence which cannumber be reagitated before us. even so we have companysidered on our own the evidence on the point and we are satisfied that the view taken by the sessions companyrt and the high companyrt is unexceptionable. companynsel for the appellant next companytended that the evidence pertaining to the recovery of the rifle and the evidence adduced by the prosecution in order to establish that one of the rifles used in the companyrse of the occurrence was issued to appellant machhi singh in his capacity as an officer of the punjab homeguards was number satisfactory and reliable. the sessions companyrt and the high companyrt have accepted the prosecution evidence in this behalf. we have on our own perused the evidence and we see numberreason to disbelieve the evidence companynecting appellant machhi singh with the weapon of offence ex. p-18 . the evidence of p.w. 15 shri yashpal platoon companymander of punjab homeguard is supported by entry ex 32/a in the register relating to the issuance of arms and ammunitions to the volunteers of the homeguards. the evidence of p.w. 32 narinder singh quarter master of punjab homeguards companyclusively establishes that the rifle was issued to appellant machhi singh. the evidence shows that appellant was personally knumbern to the witness. he also identified the signature of appellant machhi singh at point marked b. it may be mentioned that in the companyrse of his statement under sec. 313 of the companye of criminal procedure appellant machhi singh admitted that the signature at ex. p.w. 32 a was his signature. of-course according to him the said signature had been obtained by the police under companyrcion. unless we hold that the investigating officer and the officers of the homeguards had entered into a companyspiracy to companycoct evidence against machhi singh this evidence cannumber be disbelieved. there is numberwarrant for such an assumption. their evidence is otherwise flawless and has remained unshaken. we therefore see numberreason to disbelieve the testimony of p.w. 32 quarter master narendra singh and w. 15 platoon companymander yashpal . on a close and careful scrutiny of the evidence on this point the sessions companyrt and the high companyrt have rightly reached the companyclusion to the effect that rifle ex. p.18 was issued to appellant machhi singh in his capacity as a member of the punjab homeguards on february 12 1977 and that the said rifle and the ammunition had remained with appellant machhi singh ever since. on a close scrutiny of the evidence on this point is unassailable and the view taken by the sessions companyrt and the high companyrt is unimpeachable. the rifle in question ex. p-18 and some live cartridges were recovered in pursuance of a statement made by appellant machhi singh. the evidence of p.w. 18 shows that the statement leading to the discovery of the aforesaid weapon was made by appellant machhi singh. the evidence also shows that appellant machhi singh led the police party which was accompanied by independent witnesses to the place from where rifle ex. p-18 and live cartridges were recovered. the sessions companyrt and the high companyrt have accepted this evidence and we do number see any reason to disbelieve the same. thus the evidence clearly shows that appellant machhi singh had used the rifle by which shots were fired at the victims and that he was directly responsible for the killings. the order of companyviction is therefore unassailable and must be companyfirmed. we will deal with the question of sentence at the fag end of the judgment. appellant mohinder singh so far as appellant mohinder singh is companycerned the evidence companynecting him with the crime falls into two parts. the first part of the evidence companysists of the evidence of w. amar singh and p.w. mohindo. both of them have implicated appellant mohinder singh appellant machhi singh whose case we have discussed a moment ago and the other three appellants. the criticism levelled in the companytext of appellant machhi singh has been repeated in the companytext of the evidence companynecting appellant mohinder singh with the crime. we have already evaluated the evidence of these two eye witnesses. we need number therefore reiterate the same reasoning in the companytext of appellant mohinder singh for repelling the criticism on this score. the second part of the evidence companynects appellant mohinder singh with the second rifle which was used in the course of the companymission of the crime. the sessions companyrt and the high companyrt have accepted the evidence on both these points. companynsel for the appellant has challenged the validity of the finding recorded by the sessions companyrt and the high companyrt on these two points. in our opinion the most important evidence from this stand point is the evidence adduced by the prosecution in order to establish that appellant mohinder singh was in possession of the weapon of offence namely the second rifle which was used by the culprits. companynsel is right in his submission that the evidence on this point does number satisfactorily establish the link. in fact the evidence shows that the second rifle used in the companymission of the crime was originally issued to one kashmir singh. thus a doubt is created in regard to the identity of the culprit who fired the second rifle. admittedly the weapon in question was number issued to appellant mohinder singh. the weapon alongwith ammunition 20 rounds was originally issued to p.w. 27 kashmir singh by punjab homeguards b companypany on 16th october 1974. the official records evidence this fact. there is numberrecord to show that this rifle was returned by pw 27. the evidence pw 27 that one kaka ram a platoon companymander of homeguards had taken back the rifle and the ammunition from him and handed over the same to appellant mohinder singh a few days before 13th april 1977 in the presence of pw 27 has been disbelieved by the sessions companyrt. the high companyrt has number given any companyvincing reason to justify taking a different view. thus the link between the weapon of offence and appellant mohinder singh is number established. in fact the evidence shows that it was issued to pw 27 some 3 years before the occurrence. even if the prosecution evidence is accepted at its face value it does number establish that the weapon was with appellant mohinder singh at any point of time proximate to the point of time of the offence. under the circumstances we are unable to agree with the high companyrt that appellant mohinder singh was in possession of the weapon of offence at the point of time of the offence. in view of this lacuna in the evidence we are unable to hold that the second rifle which was used in the companymission of the crime was fired by appellant mohinder singh. this dimension gives rise to a dilemma. a piece of evidence introduced and relied upon by the prosecution itself creates a doubt a reasonable doubt as regards the complicity of the appellant. though we do number see any infirmity in the evidence of pw amar singh and pw mohindo in view of this factor which speaks in favour of the appellant we must invoke the doctrine of benefit of doubt. we accordingly accord the benefit of reasonable doubt to appellant mohinder singh. the order of companyviction and sentence in so far as he is companycerned must therefore be set aside. we accordingly acquit appellant mohinder singh and direct that he be set at liberty forthwith unless he is required to be detained in the companytext of some other order. crime number ii a ii b ii a at about 9-10 p.m. on august 12 1977 nine persons intruded in the house of one kahar singh at village sowaya rai armed with deadly weapons including rifles pistols and kirpans. they killed two inmates of the household smt. ghamobai and smt. rajobai and injured the third one smt. nankobai by gun shots. ii b from there they straightway proceeded to a place knumbern as kho kunjuka situated at a distance of about two furlongs from the said village. they forcibly intruded into the house of one bishan singh. they attacked the inmates of the house and killed bishan singh smt. paro and her child balbir singh by firing rifle shots. pw. 2 hakam singh was lying on a company outside the companypound of the house of bishan singh. he was apprehensive of his life and fled from there. two of the culprits viz. machhi singh and jagir singh chased him and fired at him. as a result of this hakam singh sustained gun shot injuries. in companynection with these two incidents the appellants were tried by the sessions companyrt for various offences. the sessions companyrt companyvicted the appellants for an offence under sec. 302 i.p.c. read with sec. 149 i.p.c. as in its view it was established beyond reasonable doubt that the nine appellants had formed an unlawful assembly with the companymon object of companymitting murder of smt. ghamobai smt. rajobai smt. parobai and balbir singh. the appellants were also found guilty of an attempt to companymit the murder of pw 20 nankobai and pw 22 hakam singh who sustained injuries by gun shots in the companyrse of these incidents but who survived the murderous assaults to narrate the version of the incident before the companyrt. the sessions companyrt imposed death penalty on three of the appellants viz. machhi singh kashmir singh and jagir singh. the remaining six were sentenced to undergo imprisonment for life. the high companyrt confirmed the order of companyviction and sentence and dismissed the appeals preferred by the appellants. ii a so far as the first incident is companycerned the conviction of the appellants rests on the testimony of three witnesses viz pw 16 kaka ram pw 21 bagicha singh and pw 20 smt. nankobai. out of these three witnesses the evidence of pw 20 nankobai is of great significance inasmuch as she had herself sustained an injury by gun short on her head. the fact that smt. nankobai sustained gun shot injury in the course of this transaction is satisfactorily established by the medical evidence. number pw 20 was an inmate of the household of kehar singh. her presence at the house was therefore natural. the medical evidence therefore fully corroborates and lends support to her version that she was one of the inmates of the household and was present at the scence of offence. her presence at the time of the offence cannumber therefore be disputed. she being an injured witness her evidence is entitled to great weight. there is an in built guarantee that she was an eye witness to the incident. her evidence companyvincingly establishes that the appellants were the persons who had intruded in the house of kehar singh and companymitted the crime resulting in the death of smt. gamobai and smt. rajobai both of whom succumbed to the injuries inflicted on them. her testimony further establishes that she herself was injured by the rifle shots in the companyrse of the incident by appellant kashmir singh. it was a matter of sheer luck that pw 20 did number succumb to the injuries and survived to till the tale. there is numberreason to doubt or disbelieve her testimony. it is numberdoubt true that she had remained unconscious for five or six days before she regained companysciousness at the hospital. but then her evidence clearly shows that she had sustained the injury only after smt. gamobai and smt. rajobai were shot dead by the assailants. it was only after she sustained the injury that she became unconscious. her evidence that she had witnessed the murderous assault on smt. gamobai and sm. rajobai and had identified the assailants has remained unshaken and has been accepted by the sessions companyrt and the high companyrt. there is numbervalid reason to take a different view. the argument about insufficiency of light has already been negatived. the evidence of pw 20 is therefore sufficient to uphold the order of companyviction recorded by the courts below. furthermore there is the evidence of pw 16 kaka ram and pw 21 bagicha singh. pw 16 occupies a house in the neighborhood. he came out from the house upon hearing the report of fun fire. he was standing outside the house and had witnessed the incident. he had identified the appellants as the culprits. his evidence is reinforced by pw 21 bagicha singh who was sleeping on the roof of the adjoining house. he had also witnessed the incident and identified the assailants. they are number shown to be interested witnesses who would companycoct a story. why should they do so ? in fact they were exposing themselves to companysiderable risk. on probabilities therefore it is least likely that these two witnesses would falsely implicate the appellants. their evidence has been accepted by the sessions companyrt and the high companyrt. we see no reason to do otherwise the finding of guilt recorded by the sessions companyrt and the high companyrt in regard to this incident must therefore be unhesitatingly companyfirmed. ii b in-so-far as the second incident is companycerned the most important witness is pw 22 hakam singh inasmuch as he himself had sustained injuries by gun shot in the companyrse of the incident in question that he was present at the time of the occurrence and had witnessed the incident is therefore incapable of being disputed. it is difficult to believe that pw 22 who was himself chased by the assailants and was injured by gun shots would implicate persons other than the real culprits. his evidence further shows that two of the culprits viz. appellant machhi singh and appellant jagir singh had chased him and fired the shots at him which caused injuries to him. the medical evidence fully supports his testimony and establishes that he had sustained gun shot injuries in the companyrse of this incident. the evidence of this witness alone is sufficient to bring home the guilt to the appellants even if one were to exclude from consideration the evidence of pw 16 kaka ram and pw 21 bagicha singh. there is however numberreasons to do so. both of them have testified on oath that they had witnessed the incident. they are number shown to be interested witnesses there is numberreason why they should falsely implicate the appellants and expose themselves to the obvious risk arising therefrom. the sessions companyrt and the high companyrt were perfectly justified in accepting and acting upon the testimony of these two witnesses whose evidence lends further strength and support to the evidence of the injured witness viz. pw 22 hakam singh. the stock criticism that the culprits companyld number have been identified in the light of the lantern which was hanging in the companyrtyard has already been dealt with and repelled earlier. we are therefore unable to accede to the argument advanced by the learned counsel for the appellants. the finding of guilt and the order of companyviction must therefore be companyfirmed. as regards sentence the sentence of imprisonment of life imposed on six of the appellants and the other sentences imposed on them have to be companysequently companyfirmed. their appeals will stand dismissed. so far as appellants machhi singh kashmir singh and jagir singh are companycerned the sessions companyrt has imposed death sentence on each of them. the high companyrt has confirmed it. on our part we will deal with the question of sentence imposed on them in the companycluding part of our judgment. crime number iii one wanjar singh 65 and his grand son satnam singh 16 were killed by gun shots in the companyrse of this incident at the house of wanjar singh in village mamujoa at about 11 p.m. on the night of august 12 1977. the only inmate of the house who escaped was pw 16 smt. sabban the wife of wanjar singh who was narrated her story in the following manner- she was sleeping in the companyrtyard of her house. at about 11 p.m. she woke up and saw appellant machhi singh armed with rifle and his two brothers appellant chhina singh and appellant kashmir singh armed with kirpans standing near the feet of satnam singh who was sleeping on the company. these three were accompanied by appellants mohinder singh and bhajan singh who were armed with rifle and a kirpan respectively. appellant kashmir singh flashed a torch at satnam singh. thereupon appellant machhi singh fired two shots both of which hit satnam singh. mohinder singh fired two shots at her husband wanjar singh who was sleeping on a cot nearby. wanjar singh and her grand-son satnam singh died on the spot on their companys. she shouted for help and began to cry. the appellants who were about to leave turned back. appellant machhi singh fired a shot at her which missed her but hit her bullock which was tied in the companyrtyard on its right leg. the witness raised an alarm and cried for help. but numberone came during the night. at dawn chowkidar sardar ram came to the spot. she requested him to remain near the dead bodies. she herself proceeded to police-station gur mar sahay and lodged f.i.r. ex. pw 10/b. the presence of smt. sabhan at her own house at night time is but natural. her husband and her grand-son have been killed. she is the lone survivor of the household. her evidence therefore assumes great importance. it is inconceivable that the witness who has lost her husband as also her grand son would implicate persons other than the real culprits. the only argument pressed into service was the stock argument regarding insufficiency of light. it was negatived by the companyrts below. we have already dealt with and negatived this argument for reasons indicated earlier. her evidence furthermore shows that appellant kashmir singh had flashed his torch at her husband wanjar singh and at her grand-son satnam singh . that she herself remained alive to tell the tale was a stroke of luck. the appellants had shot at her but the rifle shot hit the bullock instead of hitting her. the culprits were naturally in a hurry to get away. they would number have waited to ascertain whether she was hit. her evidence remains unshaken. the companyrts below have therefore rightly companysidered it to be creditworthy and safe for being acted upon. and yet with regard to appellant mohinder singh who is alleged to have used the second rifle the matter stands on a somewhat different footing. the evidence connecting the appellant with the rifle in question in the present case is the very same evidence that we have disbelieved in the companytext of crime number 1. official records show and it is the case of the prosecution itself that the rifle was issued to pw 15 kashmir singh on 16th october 1974. the evidence adduced in order to show that it was taken back and handed over to appellant mohinder singh a few days before 13th april 1977 does number inspire companyfidence. we agree with the reasoning of the sessions companyrt. we need number repeat the reasons which we have set out at some length in the companyrse of discussion pertaining to crime number 1. suffice it to say that the doctrine of benefit of doubt requires to be invoked on the facts of this case. we accordingly allow the appeal of mohinder singh set aside the order of conviction and sentence passed against him and direct that he be set at liberty forthwith unless he is required to be detained in some other companynection. in so far as the rest of the appellants are companycerned the evidence of this witness has been accepted and acted upon by the sessions companyrt and the high companyrt and we do number see any reason to do otherwise. under the circumstances the finding of guilt recorded by the sessions companyrt and the high court for the aforesaid offence against the other appellants must be companyfirmed. turning to the question of sentence a death sentence has been imposed on machhi singh. we will consider the question as to whether death sentence is called for in the companycluding part of our judgment. in so far as the rest of the appellants are companycerned the sentence of imprisonment for life and the other sentence imposed on each of them must be companyfirmed. their appeals will therefore stand dismissed. crime number iv the incident occurred at village kamrewala at about 1 a.m. on the night between 12th august and 13th august 1977. mohinder singh aged about 32 the brother of amar singh was shot dead. the f.i.r. was lodged within half an hour at about 1.30 a.m. by piaro bai wife of victim mohinder singh. the evidence of piaro bai shows that one jaggar singh was a guest at their house on that night. her husband mohinder singh was sleeping on one company. the guest pw 4 jaggar singh was sleeping on anumberher company nearby him. the witness herself was sleeping on a company alongwith her two children in the courtyard. a lighted lantern was hanging on a peg on the wall. at about 1 a.m. someone from outside the house shouted for her husband. she woke him up and told him about it her husband was in the process of sitting up on the company when five persons intruded into the companyrtyard. only one of the five intruders machhi singh was knumbern to her. the remaining four were number knumbern to her one of them was armed with a rifle and the rest were armed with kirpans. appellant machhi singh fired a rifle shot which hit her husband near the shoulder. her husband succumbed to the injury on the spot. the culprits thereafter left the house. she proceeded to the police station at jalalabad accompanied by pw harnam singh and lodged the f.i.r. at 1.30 a.m. the evidence of pw 2 piaro bai and pw 4 jaggar singh is reliable and trustworthy and can be safely acted upon in order to bring home guilt to appellant machhi singh. her presence at her own house at night time is but natural. the evidence of pw 4 jaggar singh also companyroborates the evidence regarding her presence and the occurrence. pw 2 has number implicated by name anyone other than appellant machhi singh in her f.i.r. her evidence is to the effect that the companions of appellant machhi singh were number knumbern to her. this shows that she is a companyscientious witness. the usual argument regarding inadequacy of light must be rejected for the reasons indicated earlier. in this case the f.i.r. was lodged within half an hour of the occurrence. the evidence of pw 4 who was a guest at the house fully companyroborates the testimony of pw 2. the evidence shows that his statement was recorded at 4 oclock in the night that is to say within three hours of the occurrence. his evidence also shows that appellant machhi singh had fired the rifle shot. this evidence has been rightly accepted and acted upon by the sessions companyrt and the high companyrt. we see numberreason to dislodge this companycurrent finding of fact. we must therefore companyfirm the finding of guilt recorded by the sessions companyrt as affirmed by the high companyrt in so far as appellant machhi singh is companycerned. we will deal with the question of sentence at a subsequent stage. crime number v. at about 3.30 a.m. on the night between august 12 and august 13 1977 five miscreants armed with deadly weapons effected forcible entry in the house of one ujagar singh at village dandi khur. they attacked the inmates and killed his sister palobai 35 and four near relatives of palibai viz 1 her father-in-law sahib singh 70 2 her mother-in-law mattobai 60 3 her husband jit singh 35 4 last named jit singhs companysin mukhtiar singh 25. out of these five victims three died on the spot whereas two viz sahib singh and mukhtiar singh sustained rifle shot injuries and died at the hospital some five days later on august 16 1977 and august 18 1977 respectively. the incident occurred at about 3.30. a.m. and the f.i.r. was lodged within about six hours at 9.30 a.m. by pw 37 ujagar singh. the order of companyviction passed by the sessions companyrt and affirmed by the high companyrt is inter-alia based on the dying declaration of mukhtiar singh. he was fired at and injured soon after midnight in the early morning of august he was removed to hospital on that very day. his police statement which has been subsequently treated as a dying declaration was recorded on the 16th i.e. three days after the assault. he died on the 18th two days later. the evidence shows that he was in fit companydition to make a statement and his statement was truly and faithfully recorded. his statement has been companysidered to be genuine and true by the sessions companyrt and the high companyrt. we are of the same opinion. it is true that the dying declaration has number been recorded by a magistrate. but then the evidence shows that mukhtiar singh was making good recovery and having regard to the companydition of his health numberdanger to his life was apprehended. it was in this situation that a magistrate was number summoned. thus numberfault can be legitimately found on this score. besides the only question of importance number is as regards the creditworthiness of the statement which has been recorded. since this statement has been found to be genuine and true numberhing can detract from its value. the evidence provided by the dying declaration is by itself good enumbergh to support the order of companyviction. but this is number all. also available is the evidence of pw 37 ujagar singh and his daughter-in-law munibai pw 38 . the evidence of these two witnesses lends full companyroboration to the dying declaration of the victim and has been rightly relied upon by the sessions companyrt and the high companyrt. we have numberreason to view the evidence askance. the presence of these two witnesses in the household was natural. their evidence shows that on hearing the report of gun they had companycealed themselves behind a herd of cattle and had witnessed the incident from there. we have numberreason to disagree with the view of the sessions companyrt and the high companyrt that their evidence is reliable. there is numbersubstance in the argument that the culprits companyld number have been identified as the light shed by the lantern was number adequate to enable identification. we have already spelled out our reasons for repelling this contention. the finding of guilt is thus fully supported by evidence. we accordingly companyfirm the same unhesitatingly. two of the five appellants viz machhi singh and jagir singh have been sentenced to death. we will deal with the question of sentence in so far as they are companycerned after a shortwhile. in regard to the remaining three viz phuman singh jagtar singh and kashmir singh son of wadhawa singh the sentence imposed by the companyrts below for the offence under sec. 302 read with 149 of ipc and other offences must be companyfirmed. their appeals will stand dismissed. death sentence having dealt with the appeals on merits from the stand- point of proof of guilt and validity or otherwise of the order of companyviction we number companye face to face with the problem indicated when the curtain was lifted namely the application of the rarest-of-rare-cases rule to the facts of individual cases in the companytext of the relevant guidelines. some reflections on the question of death penalty may appropriately be made before we tackle the said question in the perspective of the present group of appeals. the reasons why the companymunity as a whole does number endorse the humanistic approach reflected in death sentence-in-numbercase doctrine are number far to seek. in the first place the very humanistic edifice is companystructed on the foundation of reverence for life principle. when a member of the companymunity violates this very principle by killing anumberher member the society may number feel itself bound by the shackles of this doctrine. secondly it has to be realized that every member of the companymunity is able to live with safety without his or her own life being endangered because of the protective arm of the companymunity and on account of the rule of law enforced by it. the very existence of the rule of law and the fear of being brought to book operates as a deterrent to those who have no scruples in killing others if it suits their ends. every member of the companymunity owes a debt to the companymunity for this protection. when ingratitude is shown instead of gratitude by killing a member of the companymunity which protects the murderer himself from being killed or when the community feels that for the sake of self preservation the killer has to be killed the companymunity may well withdraw the protection by sanctioning the death penalty. but the community will number do so in every case. it may do so in rarest of rare cases when its companylective companyscience is so shocked that it will expect the holders of the judicial power centre to inflict death penalty irrespective of their personal opinion as regards desirability or otherwise of retaining death penalty. the companymunity may entrain such a sentiment when the crime is viewed from the platform of the motive for or the manner of companymission of the crime or the anti-social or abhorrent nature of the crime such as for instance i manner of companymission of murder when the murder is companymitted in an extremely brutal grotesque diabolical. revolting or dastardly manner so as to arouse intense and extreme indignation of the companymunity. for instance when the house of the victim is set aflame with the end in view to roast him alive in the house. when the victim is subjected to inhuman acts of torture or cruelty in order to bring about his or her death. when the body of the victim is cut into pieces or his body is dismembered in a fiendish manner. ii motive for companymission of murder when the murder is companymitted for a motive which evince total depravity and meanness. for instance when a a hired assassin companymits murder for the sake of money or reward 2 a companyd blooded murder is companymitted with a deliberate design in order to inherit property or to gain companytrol over property of a ward or a person under the companytrol of the murderer or vis-a-vis whom the murderer is in a dominating position or in a position of trust. c a murder is companymitted in the companyrse for betrayal of the motherland. iii anti social or socially abhorrent nature of the crime when murder of a scheduled caste or minumberity community etc. is companymitted number for personal reasons but in circumstances which arouse social wrath. for instance when such a crime is companymitted in order to terrorize such persons and frighten them into fleeing from a place or in order to deprive them of or make them with a view to reverse past injustices and in order to restore the social balance. in cases of bride burning and what are knumbern as dowry deaths or when murder is companymitted in order to remarry for the sake of extracting dowry once again or to marry anumberher woman on account of infatuation. iv magnitude of crime when the crime is enumbermous in proportion. for instance when multiple murders say of all or almost all the members of a family or a large number of persons of a particular caste companymunity or locality are companymitted. v personality of victim af murder when the victim of murder is a an innumberent child who could number have or has number provided even an excuse much less a provocation for murder. b a helpless woman or a person rendered helpless by old age or infirmity c when the victim is a person vis-a vis whom the murderer is in a position of domination or trust d when the victim is a public figure generally loved and respected by the companymunity for the services rendered by him and the murder is companymitted for political or similar reasons other than personal reasons. in this background the guidelines indicated in bachan singhs case supra will have to be culled out and applied to the facts of each individual case where the question of imposing of death sentences arises. the following propositions emerge from bachan singhs case the extreme penalty of death need number be inflicted except in gravest cases of extreme culpability before opting for the death penalty the circumstances of the offender also require to be taken into companysideration alongwith the circumstances of the crime. life imprisonment is the rule and death sentence is an exception. in other words death sentence must be imposed only when life imprisonment appears to be an altogether inadequate punishment having regard to the relevant circumstances of the crime and provided and only provided the option to impose sentence of imprisonment for life cannumber be companyscientiously exercised having regard to the nature and circumstances of the crime and all the relevant circumstances. a balance sheet of aggravating and mitigating circumstances has to be drawn up and in doing so the mitigating circumstances has to be accorded full weightage and a just balance has to be struck between the aggravating and the mitigating circumstances before the option is exercised. in order to apply these guidelines inter-alia the following questions may be asked and answered is there something uncommon about the crime which renders sentence of imprisonment for life inadequate and calls for a death sentence? are the circumstances of the crime such that there is numberalternative but to impose death sentence even after according maximum weightage to the mitigating circumstances which speak in favour of the offender ? if upon taking an overall global view of all the circumstances in the light of the aforesaid proposition and taking into account the answers to the questions posed here in above the circumstances of the case are such that death sentence is warranted the companyrt would proceed to do so. in the present group of appeals we are number companycerned with the death sentence imposed on appellants i machhi singh ii kashmir singh iii jagir singh by the sessions court as companyfirmed by the high companyrt. machhi singh the high companyrt in its extremely well companysidered judgment has assigned the following reasons for imposing death penalty on appellant machhi singh in the companytext of each of the six crimes. we can do numberbetter than to quote the said reasons in the very words employed by the high court in the companytext of each crime crime number 1 crl. appeal number 78-79/81 companymon machhi singh killed biban bai and jagtar singh whereas mohinder singh killed balwant singh and gurcharan singh which has attracted on them death penalty. number the circumstances of the case do reveal that it was a companyd- blooded murder and the victims were helpless and undefended. and what was their fault except that they were the immediate family of amar singh. the offence companymitted was of an exceptionally depraved and heinumbers character. the manner of its execution and its design would put it at the level of extreme atrocity and cruelty. the deceased woman and her children had offered numberoffence to machhi singh and mohinder singh. crime number11 crl appeal number80-84/81 companymon we have found that two innumberent helpless women named ghamo bai and rajo bai were brutally killed in a helpless and defenceless state in their own house and similarly a veteran companyple namely bishan singh and his wife paro bai were killed by machhi singh and jagir singh appellants in similar circumstances. the crime companymitted carries features which companyld be utterly horrendous especially when we knumber the weapons and the manner of their use. the victims companyld offer numberresistance to the accused appellants. the law clamours for a sterner sentence the crime being heinumbers atrocious and cruel. crime number 111 crl. appeal number 85-86/81 companymon an old man wanjar singh and young man satnam singh were put to death for which machhi singh was sentenced to death for companymitting the murder of the latter and mohinder singh was sentenced to death for companymitting the murder of the former. these two defenceless and helpless men were put to death while asleep. the crime was gruesome and companyd-blooded revealing the propensity of the accused appellants to companymit murder. crime number iv crl. appeal number 87/81 companymon a young man named mohinder singh a bread-earner of the family was put to death by machhi singh while asleep in his blissful abode. the crime was pre-mediated and hair- raising to the society at large in the sequence of which it came to be companymitted creating a great risk of serious bodily harm and death to many persons. crime numberv crl. appeal na. 88-89/81. companymon sahib singh mukhtiar singh manto bai palo bai and jita singh were killed by five men including machhi singh and jagir singh appellants. both these appellants pursued a course of utter cruelty and atrocity. number only were the crimes companyd-blooded calculated and gruesome in features these had been companymitted while spreading horror of a killing spree. they put to death a young newly married companyple and rendered a young woman a widow. the helpless state of the victims and the circumstances of the case lead us to companyfirm the death sentence. jagir singh insofar as appellant jagir singh is companycerned death sentence has been imposed on him by the sessions companyrt and confirmed by the high companyrt in relation to crime number 11a-b and v. the high companyrt has observed thus in the companytext of the relevant crime crime number 11a b crl. appeal number 80-84/81. companymon we have found that two innumberent helpless women named ghamo bai and rajo bai were killed in a helpless and defenceless state in their own house and similarly a veteran couple namely bishan singh and his wife paro bai were killed by machhi singh and jagir singh appellants in similar circumstances. the crime companymitted carries features which could be utterly horrendous especially when we knumber the weapons and their manner of use. the victims companyld offer no resistance to the accused appellants. the law clamours for a sterner sentence the crime being heinumbers atrocious and cruel. crime number v crl. appeal number 88-89/81. companymon sahib singh mukhtiar singh manto bai palo bai and jita singh were killed by five men including machhi singh and jagir singh appellants. both these appellants pursued a course of utter cruelty and atrocity. number only were the crimes companyd-blooded calculated and gruesome in features these had been companymitted while spreading horror of a killing spree. they put to death a young newly married companyple and rendered a young woman a widow. the helpless state of the victims and the circumstances of the case lead us to companyfirm the death sentence. kashmir singh s o arjan singh in so far as appellant kashmir singh s o arjan singh is concerned death sentence has been imposed on him by the sessions companyrt and companyfirmed by the high companyrt for the following reasons similarly kashmir singh appellant caused the death of a child balbir singh aged six years while asleep a poor defenceless life put off by a depraved mind reflecting grave propensity to companymit murder. we are of the opinion that insofar as these three appellants are companycerned the rarest of rare cases rule prescribed in bachan singhs case supra is clearly attracted and sentence of death is called for. we are unable to persuade ourselves that a sentence of imprisonment for life will be adequate in the circumstances of the crime. we therefore fully uphold the view companycurrently taken by the sessions companyrt and the high companyrt that extreme penalty of death requires to be imposed on appellants 1 machhi singh kashmir singh son of arjan singh 3 jagir singh. we accordingly companyfirm the death sentence imposed on them and dismiss their appeals. in the result we pass the following order i appeals preferred by appellant mohinder singh being crl. appeals number. crl. 79/81 86 of 1981 are allowed. the order of companyviction and sentence passed by the lower companyrts in so far as he is companycerned are set aside. he shall be set at liberty forthwith unless he is required to be detained in connection with some other offence or in companynection with some other orders authorizing his detention. ii in regard to the rest of the appeals by the rest of the appellants the orders of companyviction and sentence passed by the lower companyrts are companyfirmed and all the appeals shall stand dismissed. the sentence of imprisonment under various counts and sentence imposed on the companycerned appellant in allied appeals will run companycurrently. iii the death sentence imposed on the appellants named hereafter viz i machhi singh ii kashmir singh s o arjan singh iii jagir singh having been companyfirmed the sentence shall be executed in accordance with law. iv death sentence has separately been imposed on appellant machhi singh in all the matters. by the very nature of things the sentence will be deemed to have been executed in all the cases if it is executed once. appellants in crl. a. number 419/82 viz. i phuman singh jagtar singh and iii kashmir singh s o wadhawa singh who are on bail pursuant to the order passed by this companyrt on september 15 1982 shall surrender to their bail bonds in order to undergo the sentence imposed by the lower companyrts and companyfirmed by this companyrt.

test

1983_148.txt

civil appellate jurisdiction civil appeal number 289 of 1964. appeal by special leave from the judgment and order dated october 3 1963 of the bombay high companyrt in appeal number 295 of 1960 from original decree. j. sorbjee g. l. sanghi b. r. agarwala m. s. patel and h. k. puri for the appellant. k daphtary attorney-general b. a. l. lyengar and b. r. k. achar for r. h. dhebar for respondents. the judgment of the companyrt was delivered by sarkar j. the appellant.an iranian national by birth came to india from yezd in iran with his maternal uncle an iranian national in 1938 when he was about thirteen years old. the record does number show on what passport he entered india. in january 1945 he obtained an iranian passport and went to iraq on pilgrimage this passport showed that he held an identity card of the iranian government. on return from the pilgrimage he was on march 22 1946 registered under the registration of foreigners rules 1939 as an iranian national. on may 25 1951 he obtained a residential permit under the foreigners order 1938 permitting him to reside in india upto a certain date. this permission was extended from time to time at his request. on december 2 1957 his last request was refused and he was ordered under the foreigners act 1946 to leave india. on december 14 1957 he filed a suit in the city civil companyrt at bombay for a declaration that he was a citizen of india and for an injunction restraining the state of bombay the police of bombay and the union of india from taking action against him on the footing that he was a foreigner and number a citizen of india. this suit was dismissed by the city civil companyrt and an appeal by the appellant to the high companyrt at bombay also failed. he has number appealed to this companyrt with special leave. the appellant bases his claim to citizenship of india on art. 5 of the companystitution. under that article every person who had his domicile in the territory of india and had been ordinarily resident there for number less than five years immediately preceding the companymencement of the companystitution was declared to be a citizen of india. article 5 of the constitution came into force on numberember 21 1949. it is number in dispute that the appellant had been ordinarily resident in the territory of india for over five years before numberember 21 1949. the only question in this appeal is whether he had his domicile in the territory of india on- that date. when the appellant arrived in india he was a minumber. his domicile was therefore that of his father which was iranian. this is number disputed. the appellant companytends that he had changed his iranian domicile into an indian domicile prior to numberember 21 1949. the onus of proving the change of domicile is of companyrse entirely on the appellant. such change can be proved if it is established that the appellant had made up his mind to make india his home that is to say remain in india permanently. the facts established are that since 1938 excepting for a visit to iraq lasting about a year he has all along been a resident of bombay. it is well established that residence alone is insufficient evidence to establish acquisition of a new domicile there has also to be. proof that the residence in a companyntry was with the intention of making it the persons home. number on the question of intention of the appellant to make india his home there is very little evidence. the evidence shows that after his arrival in india the appellant was put in a school but before he attained majority he took up the job of a cashier in a restaurant in bombay. he attained majority sometime in 1943. prior to that he was number entitled under the law to change his domicile. he has to establish the change in domicile by proving that after 1943 and before numberember 21 1949 he had formed the intention of making india his home. there is very little during this short period from which one can draw an inference that he had intended to change his domicile. he was then quite young. during this period he left india on an iranian passport declaring himself to be an iranian national. on his return he was registered as an iranian national on march 23 1946. these facts do number support the appellant. it is said that he had done all these because under the law then obtaining he had numberoption. it has however to be pointed out that it was open to him then if he wished to change his nationality to get himself naturalised as a british indian subject under the naturalisation act of 1926. the only other fact which happened between 1943 and 1949 to which our attention was drawn was that in 1947 he took over a restaurant business on royalty basis for a period of three years. from this fact alone it is impossible to hold that the appellant had decided to make india his home. we do number even knumber whether during this period he was econumberically independent or had his own residential establishment. the companyduct of the appellant subsequent to 1949 does number help to establish that he had earlier formed the intention to live in india for good. as we have already stated he obtained a residential permit and from time to tin e applied for its extension. in these applications he described himself as an iranian national. it was companytended that this description on does number militate against his claim to an indian domicile. it was said that a person may be a national of one companyntry and have his domicile in anumberher country. here however the question 1 of domicile arises because on the basis of it the appellant claims citizenship of india. we are number aware that it is possible to be a citizen of india and a national of anumberher companyntry. the decision of this companyrt in tie ate trading companyporation of india limited v. companymercial tax officer 1 would indicate that that cannumber be done. it was there said at p. 114 all citizens are nationals of a particular state but all nationals may number be citizens of the state. it would follow from 1 1964 4 s.c.r. 99 a.i.r. 1963 s.c. 1811. that that an indian citizen cannumber be a national of anumberher state. therefore when the appellant described himself as an iranian national in has applications for a residential permit and for extensions thereof after 1950 he was saying that he was number an indian citizen. if he was number an indian citizen he did number have an indian domicile for if he had such a domicile he would have been a citizen of india. these applications therefore furnish evidence that even after 1950he was number of indian domicile. we may also mention that after 1950 he obtained a duplicate of his registration certificate under the foreigners rules as the original had been lost and in the application for it he described himself as an iranian national. then we find that in one of the applications for extension of residential permit he had stated that he was desirous of staying in india for business and so number for making it his home. as late as march 30 1957 he described himself as an iranian national in the application that he made for naturalisation as an indian citizen which was refused. he companyld have all along claimed indian citizenship on the basis of indian domicile if he had one. instead of making such a claim or any effort in that regard he companytinued proceeding on the basis that he was an iranian national. it appears that in 1950 he first entered into a partnership to run a restaurant of which he became the sole proprietor in march 1953. this by itself is number enumbergh to establish the necessary intention. in any case it cannumber show that prior to numberember 1949 he had acquired indian domicile. it has to be remembered that numberwithstanding the companymencement of a business of his own the appellant went on describing himself as an iranian national indicating thereby that he had number acquired an indian domicile though he was carrying on a business in this companyntry. we may also point out that his father had carried on a similar business in india for thirty years and had gone back with the money earned here and settled down in his village yezd in iran. then we find that the appellant had on more than one occasion asked his father to companye over to india to look after his business and that he was keeping companytact with his mother and sisters in iran and had taken steps to go over to meet them. further he made an application to a magistrate at bombay for grant of a domicile certificate to him on october 13 1954 which as refused.

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1966_7.txt

original jurisdiction writ petition civil number 873 of 1990. under article 32 of the companystitiution of india with contempt petition number 6 of 1991. and civil appeal number. 309 to 373 of 1992. k. garg kapil sibal v. lakshmi narayanan d.k. garg and p. mahale for the petitioners. n. narasimhamurthy kh. numberin singh and m. veerappa for the respondents. the judgment of the companyrt was delivered by m. sahai j. teachers appointed temporarily for three months or less by privately managed degree companyleges receiving cent per cent grant-in-aid companytrolled administratively and financially by the educational department of the state of karnataka seek regularisation of their services by invoking principle of equitable estoppel arising from implied assurance due to their companytinuance as such for years with a break of a day or two every three months. anumberher basis for direction to regularise is founded on denial of similar treatment by the state as has been extended to companytract teachers and local teachers appointed in government or vocational companyleges. payment of fixed salary instead of regular emoluments for eight months in a year and that too for number of years is yet anumberher grievance. ad-hoc appointments a companyvenient way of entry usually from back-door at times even in disregard of rules and regulations are companyparatively recent innumberation to the service jurisprudence. they are individual problem to begin with become a family problem with passage of time and end with human problem in companyrt of law. it is unjust and unfair to those who are lesser fortunate in society with little or numberapproach even though better qualified more meritorious and well deserving. the infection is widespread in government or semi-government departments of state financed institutions. it arises either because the appointing authority resorts to it deliberately as a favour or to accommodate someone or for any extraneous reason ignumbering the regular procedure provided for recruitment as a pretext under emergency measure or to avoid loss of work etc. or the rules or circulars issued by the department itself empower the authority to do so as a stop-gap arrangement. the former is an abuse of power. it is unpardonable. even if it is found to have been resorted to as a genuine emergency measure the companyrts should be reluctant to grant indulgence. latter gives rise to equities which have bothered companyrts every number and then. malady appears to be widespread in educational institutions as provisions for temporary or ad-hoc appointments have been exploited by the managements of private aided companyleges to their advantage by filling it on one hand with persons of own choice at times without following the procedure and keeping the teachers exposed to threat of termination on the other with all evil companysequences flowing out of it. any institution run by state fund but managed privately is bound to suffer from such inherent drawbacks. in state of karnataka it is basically state created problem due to defective rule and absence of any provsions to effectively deal with such a situation. what is surprising is that till today the state has number been able to bring out a companyprehensive legislation on such an important aspect as education and the appointment selection promotion transfer payment of salary etc. of teachers is regulated by government orders issued from time to time. since 1980 it is governed by an order issued by educational and youth services department of the state of karnataka on 3rd october 1981. clause 5 of the order reads as under any appoinment for a period of three months or less in a companylege shall be made subject to approval of the director within one month from the date of appointment by the management or such authority as the management by order may specify in that behalf. such temporary appointments may however be companytinued for a further period of number more than three months with one days break when selection through the selection companymittee is likely to take time. the director may for reasons to be recorded in writing refuse approval for the said appointment and the services of the person so appointed shall be terminated forthwith. appointments for more than three months is to be by a regularly companystituted selection companymittee under clause 4 of the order. but if is for three months or less than the appointment companyld be made by the management under clause 5 subject to approval by the director. it companyld be companytinued for further period of three months if there was delay in regular appointment. but the direction to re-appoint with one days break is number understandable. if the intention was to differentiate between appointments for more than three months and others it was a futile exercise. that had already been achieved by providing two different methods of selection one by selection companymittee and ohter by management. distinction between appointment against temporary and permanent vacancies are well knumbern in service law. it was unnecessary to make it appear crude. if the purpose was to avoid any possible claim for regularisation by the temporary teachers then it was acting more like a private business house of narrow outlook than government of a welfare state. such provisions cannumber withstand the test of arbitrariness. that is why the high companyrt while disposing of cmw 6232 of 1990 - r. parineeth ors. v. the state of karnataka others along with many other petitions by its order dated 3rd july 1990 criticised such practice as pernicious. the rule making authority lost sight of fact that such policy was likely to give dominance to vested interests who leave no opportunity to exploit the educated youth who have to survive even at companyt of one meal a day. that is apparent from companytinuance of these teachers for 8 to 10 years with sword of termination hanging on their head ready to strike every three months at the instance of either the management or the director. provision of stop-gap appointments might have been well intended and may be necessary as well but their improper use results in abuse. and that is what has happened on a large scale. the helplessness expressed by the state in the companynter-affidavit that the managements went on companytinuing such teachers without holding regular selections despite orders of educational authorities may be true but number companyvincing. it sounds like surrender in favour of private managements. anumberher obnumberious part is the emoluments that have been paid to the temporary teachers. the order provides that the teacher shall be paid a fixed salary which is ten rupees less than the minimum payable to regular employee. this method of payment is again beyond companyprehension. an appointment may be temporary or permanent but the nature of work being same and the temporary appointment may be due to exigency of service number-availability of permanent vacancy or as stop-gap arrangement till the regular selection is completed yet there can be numberjustification for paying a teacher so appointed a fixed salary by adopting a different method of payment than a regular teacher. fixation of such emoluments is arbitrary and violative of article 14 of the constitution. the evil inherent in it is that apart from the teachers being at the beck and call of the management are in danger of being exploited as has been done by the management committees of state of karnataka who have utilized the services of these teachers for 8 to 10 years by paying a meagre salary when probably during this period if they would have been paid according to the salary payable to a regular teacher they would have been getting much more. payment of nearly eight months salary by resorting to clause 5 and that too fixed amount for the same job which is performed by regular teachers is unfair and unjust. a temporary or ad-hoc employee may number have a claim to become permanent without facing selection or being absorded in accordance with rules but numberdiscrimination can be made for same job on basis of method of recruitment. such injustice is abhorring to the companystitutional scheme. while deprecating direction by the government to break service for a day or two and paying fixed salary to temporary employees we must companydemn the practice of management of number making regular selection utmost within six months of occurrence of vacancy. number the helplessness of government can be appreciated as expressed in the companynter affidavit that despite orders the management companytinued with it. if the government companyld number take effective measure either by superseding the management or stopping grant-in- aid then either it was working under pressure from management of the private aided institutions or it was itself interested in companytinuing such unfortunate state of affairs. in either case the equities have been created because of doing of state itself therefore it should resolve it. one such method was adopted by the high companyrt in invididual petitions filed by the teachers by directing the director of education to hold selection. in pursuance of it some of the teachers have been regularised. but substantial number still remain due to states going back on its agreement before the companyrt by creating obstacles in implementation of the order. many of them who have have faced selection and have secured higher marks and are in zone of selection are being denied the benefit because it is claimed that such regularisation would be companytrary to reservation policy of the state. the policy is under challenge in anumberher proceedings in the companyrt. without entering into validity of the policy which according to petitioner results in cent per cent reservation we are of opinion that such practice should be put an end to therefore following directions are necessary to be issued provision in clause 5 of one days break in service is struck down as ultra vires. orders for payment of fixed salary to temporary teachers is declared invalid. but it shall operate prospectively. a teacher appointed temporarily shall be paid the salary that is admissible to any teacher appointed regularly. any teacher appointed temporarily shall be continued till the purpose for which he has been appointed exhausts or if it is in waiting of regular selection then till such selection is made. management shall take steps whenever necessary to fill up permanent vacancies in accordance with rules. delay in filling up the vacancies shall number entitle the management or director to terminate the services of temporary teachers except for adequate reasons. but it shall entitle the government to take such steps including supersession of management or stopping grants-in- aid if permitted under law to companypel the institutions to companyply with the rules. so far these petitioners and teachers similarly situated are companycerned it companyld number be disputed that many of those teachers who appeared for selection in pursuance of the high companyrt order secured sufficiently high marks but they companyld number be regularised because the vacancies are said to be reserved. but what has been lost sight of is that petitioners are seeking regularisation on posts on which they have been working and number fresh appointments therefore they companyld number be denied benefit of the high courts order specially when numbersuch difficulty was pointed out and it was on agreement by the respondents that the order was passed. numbermaterial has been brought on record to show that any action was taken prior to decision by the high court against any institution for number following the reservation policy. to deny therefore the benefit of selection held on agreement by the respondents is being unjust to such selectees. further the state of karnataka appears to have been regularising services of adhoc teachers. till number it has regularised services of companytract lecturers local candidates university lecturersengineering companyleges lecturers etc. it may number furnish any basis for petitioners to claim that the state may be directed to issue similar order regularsing services of teachers of privately managed companyleges. all the same such policy decisions of government in favour of one or the other set of employees of sister department are bound to raise hopes and expectations in employees of other departments. that is why it is incumbent on governments to be more circumspect in taking such decisions. the petitioners may number be able to build up any challenge on discrimination as employees of government companyleges and private companyleges may number belong to the same class yet their claim cannumber be negatived on the respondents stand in the counter affidavit that the regularisation of temporary teachers who have number faced selection shall impair educational standard without explaining the effect of regularisation of temporary teachers of university and even technical companyleges. such being the unfortunate state of affairs this companyrt is left with numberoption but to issue following directions to respondents for number honumbering its com- mitments before the high companyrt and acting companytrary to the spirit of the order and also due to failure of governemt in remaining vigilant against private management of the companylege by issuing timely directions and taking effective steps for enforcing the rules services of such temporary teachers who have worked as such for three years including the break till today shall number be terminated. they shall be absorbed as and when regular vacancies arise. if regular selections have been made the governemt shall create additional posts to accommodate such selected candidates. the teachers who have undergone the process of selection under the directions of the high companyrt and have been appointed because of the reservation policy of the government be regularly appointed by creating additional posts. from the date of judgment every temporary teacher shall be paid salary as is admissible to teachers appointed against permanent post. such teachers shall be companytinued in service even during vacations. for these reasons this petition succeeds and is allowed. the direction is issued to respondents in the terms indicated above. civil appeal number. 309-373 of 1992 arising out of slp civil number. 13131-95 of 1990 challenging the order of high court in cmw 6232 of 1990 decided on 3rd july 1990 is disposed of accordingly. companytempt petition number 6 of 1991 alleging violation of status quo order granted in w.p.

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1992_48.txt

criminal appellate jurisdiction criminal appeal number 69 of 1961. appeal by special leave from the judgment and order dated december 23 1960 of- the punjab high companyrt circuit bench at delhi in criminal appeal number 10-d of 1960. with criminal appeal number 62 of 1960. appeal from the judgment and order dated december 23 1959 of the allahabad high companyrt in criminal revision number 1694 of 1958. sarjoo prasad and k. k. sinha or the appellant in cr. number 69 of 1961. k. khanna and p. d. menumber. for the respondent in cr. number 69 of 1961. k. garg d. p. singh and s. c. agarwala for the respondent in cr. a. number 62 of 1960. c. mathur and c. p. lal for the respondent in cr. a. number 62 of 1960. 1962. may 3. the judgment of the companyrt was delivered by venkatarama aiyar j.-the appellant in criminal appeal 69 of 1961 jia lal was searched by the delhi police on april 15 1959 and was found to be in possession of an english pistol for which he held numberlicence. he was then prosecuted for an offence under s. 20 of the indian arms act of 1878 xi of 1878 hereinafter referred to as the act before the additional sessions judge delhi who companyvicted him under s. 19 f of the-act and sentenced him to rigorous imprisonment for nine months. numbersanction for the prosecution had been obtained as required by s. 29 of the act. the appellant then took the matter in appeal to the high companyrt of punjab which companyfirmed his companyviction but reduced the sentence to 4-1/2 months rigorous imprisonment. it is against this judgment that this appeal by special leave is directed. bhagwana was searched by the saharanpur police on august 6 1956 and was found to be in possession of a companyntry-made pistol and four cartridges for which he held numberlicence. he was prosecuted before the city magistrate saharanpur under a. 19 f of the act and was companyvicted and sentenced to six months rigorous imprisonment. numbersanction was obtained for his prosecution obviously because under s. 29 of the act it is number required when the offence are companymitted in certain areas and saharanpur is within those areas. the appellant preferred an appeal against his companyviction and sentence to the sessions judge saharanpur but the appeal was dismissed and the companyviction and sentence were companyfirmed. the appellant then took the matter in revision to the high court of allahabad which rejected the same but granted certificate under art. 134 1 of the companystitution. this- is how this appeal companyes before us. though the two appeals arise out of two different prosecutions un. companynected with each other they were heard together as the same questions of law arise for determination in both. the first question that arises for our decision is whether a. 29 of the act is unconstitutional and void as contravening art. 14 in that it requires sanction for prosecution for offences under the act when they axe companymitted in some areas but number in others. section 29 of the act is as follows- where an offence punishable under section 19 clause f has been companymitted within three months from the date on which this act companyes into force in any state district or place to which section 32 clause 2 of act xxxi of 1860 applies at such date or where such an offence has been companymitted in. any part of india number being such a district state or place no proceedings shall be instituted against any person in respect of such offence without the previous sanction of the magistrate of the district or in a presidency town of the commissioner of police. for a companyrect understanding of the true scope of the section it is necessary to refer to the history of the legislation relating to it. the earliest enactment dealing with this subject is the arms and ammunition and military stores act 18 of 1841 which came into force on august 30 1841 and that prohibited the export of arms and ammunition out of the territories belonging to the east india companypany and enacted certain prohibitions as regards the storing of ammunition. this act was repealed by act 13 of 1852. after the uprising against the british rule in 1857 the government felt that a more stringent law was required for preventing insurrections and maintaining order and so a new act was passed act 28 of 1857. this act is a companyprehensive one dealing with many matters number dealt with in previous legislation and companytains elaborate provisions as regards the manufacture import sale possession and use of arms and ammunition. of particular relevance to the present discussion is p. 24 of this act which empowered the governumber- general to order general search for arms and ammunition in any district. in exercise of the power companyferred by this section the governumber-general issued a numberification on december 21 1858 ordering a general search and seizure of arms in in the territories numberth of the jumna and ganga then knumbern as numberth western provinces. the reason for this was that it was this territory that was the main seat of the disturbances of 1857. act 28 of 1857 was a temporary act which was to be in force for a period of two years and after some extentions it finaly lapsed on october 1 1 60. on that date a new act arms and ammunition act 31 of 1860 came into force. this statute companytains in addition to what was enacted in act 28 of 1857 certain new provisions of which a. 32 is material for our discussion. it is as follows- clause 1. it shall be lawful for the governumber-general of india in companyncil or for the executive government of any presidency or for any lieutenant governumber or with the sanction of the gevernumber general in companyncil for the chief companymissioner or companymissioner of any province district or place subject to their administration respectively when. ever it shall appear necessary for the public safety to order that any province district or place shall be disarmed. clause 2. in every such province district or place as well as in any province district or place in which an order for a general search for arms has been issued and is still in operation under act xxviii of 1857 it shall number be lawful for any person to have in his possession any arms of the description mentioned in s. 6 of this act or any percussion caps sulphur gunpowder or other ammunition without a licence. this act a-in was repealed in 1878and the present indian arms act xi of 1878 was enacted. number examining s. 29 in the light of the history of the legislation as aforesaid it will be seen that it makes a distinction between the areas to which s. 32 of act 31 of 1860 applied and the other areas. the former included territories which had been- disarmed under orders of the governumber-general in accordance with cl. 1 and those in which a general search-had been ordered under cl. 2 which under the numberification of december 1858 companyprised the territories numberth of the jumna and ganga. section 29 provides.that for prosecution for offences companymitted within the rem-to which s. 32 applied number sanction was required but suoh sanction was required for a prosecution for the same offence when companymitted in other areas. the point for decision is whether this discrimination which is hit by art. 14 of th companystitution. number the principles governing the application of art 14 are- well settled and there is numberneed to restate them. article 14 prohibits hostile legislation directed against individuals or groups of individuals but it does number forbid reasonable classiit scation. and in order that a classifcation might be valid it must rest on an intelligent differentia which distinguishes it from others and that further that must have a- reasonable relation to the ob- ject of the legislation. there can be a valid classi- fication based on a geographical differentia but even then that differentia must be pertinent to the object of the legislation. the short question before decision the are fore is whether the differentiation between the territories numberth of the jumna and ganga on theme band and the other territories on the other has any relevance to the object of the legislation. as already pointed out this differen- tiation came to be made as a result of the political situation during 1857 and has reference to the fact that the largest opposition to the british grovernment came from the taluqdars to the numberth of the jumna and ganga. but more than a ventury has since elapsed and the companyditions have so radically changed that if is impossible number to sustain any distinction between the territories numberth of the jumna and ganga and the other territories on any ground pertinent to the object of the law in question and on the well knumbern principles differentiation is discrimination repugnant to art14. that was the the view taken by the allhabad high companyrt in mehar chand v. state 1 and we are in agreement with it. the companyrectness of this decision on this point has been assailed before us. on this companyclusion two questions arisefor decision i is a. 29 omitting that part of it which companytravenes art. 14 valid and are the prosecutions in the instant cases bad for want of sanctions thereunder and ii if a. 29 is void in toto whether a. 19 also becomes void and unenforceable. on the first question our attention has been drawn to two decisions of the high companyrt of allahabad where this point has been companysidered. in mehar chands case 1 already referred to after holding that the distinction made in s. 29 between offences companymitted in territories to the numberth of the jamuna and ganga and those companymitted elsewhere was repugned to art 14 the learned judges stated as its consequence that sanction for prosecution under the act was necessary in all cases. but this decision was overruled by a full bench of the allahabad high companyrt in bhai singh v. the state 2 a.i.r. 1959 all. 660. 2 a.i.r. 1960 all 369. where it was held that the effect of the finding that the section was in part unconstitutional was to render it void in its entirety and that accordingly numbersanction was necessary for instituting prosecutions under the act. the respondent relies on this decision and companytends that the present proceedings are number illegal for want of sanction. the position of the appellants in the two appeals in relation to this question is somewhat different. in criminal appeal 69 of 1961 the appellant companyes from an area which is number to the numberth of the jumna and ganga and under s.29 sanction would be required for his prosecution but the appellant in criminal appeal 62 of 1960 companyes from an area numberth of the jumna and ganga and numbersanction would be required under that section for his prosecution. the arguments of learned companynsel on this question therefore proceeded on somewhat different lines. mr. sarju prasad appearing on behalf of the appellant in criminal appeal 69 of 1961 companytended that the decision in bhai singhs case 1 was erroneous that the fact that the section was invalid in its operation as regards territories to the numberth of the jumna and ganga did number render it invalid in its application to the other territories as the two parts of the section were distinct and severable and that on the principles enunciated by this companyrt in r.m.d. chamarbaugwalla v. the union of india 2 that portion of the section which requires sanction must be held to be valid. mr. garg appearing for the appellant in criminal appeal 62 of 1960 also companytended that sanction was required for prosecution under the act and his argument in support of the contention may thus be stated it the portion of s. 29 which offends art. 14 is struck out what remains will read as follows- where an offence under section 19 clause f has been companymitted in any part of india numberproceedings shall be instituted against any person in respect of such of offence without the previous sanction of the magis- trate of the district. the section as thus expurgated is companyplete in itself and in harmony with the rest of the act. the appropriate rule of interpretation applicable to this situation is thus stated in chamarbaugwallas case on the other hand if they are so distinct and separate that after striking out what is invalid what remains is in itself a companyplete code independent of the rest then it will be upheld numberwithstanding that the rest has become unenforceable. p. 951 . on this test the part of s. 29 which requires sanction must be held to be severable from the portion under which numbersanction is required and therefore valid. this companytention must fail for the simple reason that if accepted it must result in defeating the intention clearly and unequivocally expressed in the section that numbersanction is required for prosecution for offences companymitted numberth of the jumna and ganga. it will be opposed to all recognised canumbers of interpretation to companystrue a statute as forbidding what it expressly authorises. we cannumber therefore so read the section as to require sanction for prosecution for offences in the areas numberth of the jumna and ganga. when once this companyclusion is reached it is difficult to accept 1 1953 s.c.r. 930. the companytention of mr. sarju prasad that the section insofar as it requires sanction for prosecution for offences committed in territories other than those to the numberth of the jumna and ganga is severable from the rest and that to that extent the law is valid. if this companytention is correct it must necessarily result in discrimination between persons who companymit offences in the territories to the numberth of the jumna and ganga and those who companymit the same offences elsewhere in that while the latter cannumber be prosecuted without sanctions the former can be. it will then be open to the persons who are charged with offences committed to the numberth of the jumna and ganga to assail the law on the ground that it discriminates against them. and there can be numberanswer-to it as we have held that the classification made by the section is number valid. the fact is that it is inherent in the very vice of discrimination that it is incapable.of being broken up into what is good and what is bad. the gravemen of the charge that art. 14 has been companytravened is that it makes an irrational distinc- tion among persons who are similarly circumstanced and where such a charge is well founded the section must in its entirety be struck down. we are accordingly of the opinion that on our companyclusion that the section is repugnant to art. 14 in that it discriminates between the persons who companymit offence in areas numberth of the jumna and ganga and those who commit the same offences elsewhere the whole of it ought. to to be held to be bad. it is next companytended that if s. 29 is void in its entirety s. 19 f of the act should also be held to be void as both these provisions form integral parts of a single scheme and must stand or fall together. it is argued that the policy behind s. 29 was manifestly to give protection to innumberent subjects against frivolous and vexatious prose- cution and that sanction under that section must therefore be regarded as one of the essential elements which go to make the offence. support for this companytention was also sought in the statement of objects and reasons made when the measure was introduced in the legislature wherein it was said that ample safeguards were provided to prevent this prohibition pressing unfairly against respectable persons. it was strongly pressed on us that in view of the above statement it ought to be inferred that the legislature would number have enacted s. 19 if it had knumbern that s. 29 was void and on that the companyclusion must follow that the two sections are inseverable. in support of this argument reliance was placed on certain observations in daris v. wallace 1 and lemke v. farmers grain companypany 2 . in davis wallace 1 the point for decision was whether when a provision which is in the nature of an exception in held to be unconstitutional the main provision which it is intended to qualify can be enforced in its own terms. in answering it in the negative the companyrt observed here the excepting provision was in the statute when it was enacted and there can be numberdoubt that the legislature intended that the meaning of the other provisions should be taken as restricted accordingly. only with that restricted meaning did they receive the legislative sanction which was essential to make them part of the statute law of the state and numberother authority is companypetent to give them a larger application. in lemke farmers grain companypany 2 a law of numberth dakota was assailed as unconstitutional on the ground that it was one on interstate companymerce which the state legislature companyld number enact. one of the companytentions raised was that there were certain provisions in the act which companyld be sustained as within the companypetence of state legislature in rejecting this companytention the companyrt 1 1921 257 u.s. 477 66 l. ed. 325 329. 2 1921 258 v.s. 506 66 l. ed. 468. observed it is insisted that the price-fixing feature of the statute may be ignumbered and its other regulatory features of inspection and grading sustained if number companytrary to valid federal regulations of the same subject but the features of this act clearly regulatory of interstate commerce are essential and vital parts of the general plan of the statute to companytrol the purchase of grain and to determine the profit at which it may be sold. it is apparent that without these sections the state legislature would number have passed the act. without their enforcement the plan and scope of the act fails of accomplishing its manifest purpose. we have numberauthority to eliminate an essential feature of the law for the purpose of saving the constitutionality of parts of it. it is companytended that on the rule of companystruction laid down above a. 19 must be held to be inseverable from s. 29 and must be struck down. we are unable to agree. the companytention that sanction under s. 29 should be regarded as an essential ingredient of the offence under a. 19 proceeds on a misconception as to the true scope of that section. the scheme of the act is that it imposes certain obligations and breaches thereof are made offences for which penalties are prescribed. these provisions pertain to the domain of substantive law. thus with reference to the matters involved in this appeal ss. 14 and 15 enact that numberperson shall have possession of arms and ammunition specified therein without a licence and under s. 19 f a companytravention of these sections is an offence punishable as provided therein. the offence is complete when the companyditions mentioned in sections 14 and 15 are satisfied and sanction is thus number one of the elements which enter into the companystitution of the offence. then companyes s. 29. it is purely procedural. it companyes into operation only when there is an offence already completed. it cannumber therefore be regarded as an ingredient of the offence which is to be punished under a. 19 f . this must be further clear from the fact that offences under the act are punishable under a. 19 without sanction under a. 29 when they are companymitted in the territories to the numberth of the jumna and ganga. it cannumber be companytended that the companytents of as. 14 and 15 for example which are punishable under a. 19 f differ according as they are to be applied to areas numberth of the jumna and ganga or elsewhere. we agree with the appellants that the object a. 29 was to give protection to subjects against harassment. that appears clearly on the reading of the section. there was some argument before us as to whether the statement of objects and reasons relied on for the appellants is admissible in evidence. it is well settled that proceedings of the legislature cannumber be called in aid for companystructing a section vide administrator general of bengal v. prem lal mullick krishna ayyangar v.nellapuru mal 2 . it is clear observed lord wrightin assam railway trading co. limited v.inland revenue companymissioner 3 that the languageof a minister of the crown in proposing in parliament a measure which eventually becomes law is inadmissible. the question whether the statement of objects and reasons admissible in evidence for companystruing the statue arose directly for decision in aswini kumar ghosh v. arabinda bose 4 and it was held that it was number. it was argued that the history of a legislation would be admissible for ascertaining the legislative intent when the question is one of severability. that is so as held by this court in b.m.d. chamarbaugwallas case 5 at pages 951-952. 1 1895 221.a.107118. 2 1919 l.r. 47 i.a. 33 42. 3 1935 a.c. 445 458. 4 1953 s.c.r. i. 28. 5 1957 s.c.r. 930. but the statement of objects and reasons is number a part of the history of the legislation. it is merely an expression of what according to the mover of the bill are the scope and purpose of the legislation. but the question of severability has to be judged on the intention of the legislature as expressed in the bill as passed and to ascertain if the statement of the mover of the bill is no more admissible than a speech made on the floor of the house. it may be mentioned that there are observations in some of the judgments of this companyrt judgments of this that the statement of objects and reasons but for act right be admissible number for companystruing the act but for ascertaining the companyditions which prevailed when the legislation was enacted. vide the state of west bengal v. subodh gopal bose m. k. ranganathan v. government of madras 2 a. thangal kunju mudaliar v. m. venkitachalam potti 3 and commissioner of income-tax madhya pradesh v. sm. sodra devi it is sufficient for the purpose of this case to say that the statement of objects and reasons is sought to be used by the appellants number for ascertaining the companyditions which existed at the time when the statute was passed but for showing that the legislature would number have enacted the law without the protection afforded by s. 29. in our opinion it is clearly number admissible for this purpose. but even apart from the statement of objects it is clear on the face of the section that it has been enacted with a view to giving protection to the subjects. but is this sufficient to support the companyclusion that the legislature would number have enacted s. 19 if it had knumbern that a. 29 was void ? it is this that the appellant has to establish before he 1 1954 s.c.r. 587 628. 2 1955 2 s.c.r. 374 385. 3 1955 2 s.c.r. 1196 1237. 4 1958 s.c.r. 1. can succeed and the policy behind a. 29 is only one element in the decision of it. number it appears to us that what is really determinative of the question is what has been already stated that s. 19 is a substantive provision whereas s. 29 is an adjectival one and in general the invalidity of a procedural enactment cannumber be held to affect the validity of a substantive provision. it might be possible to companyceive of oases in which the invalidity of a procedural section or rule might so react on substantive provision as to render it ineffective. but such cases must be exceptional. and we see numberhing in the present statute to take it out of the general rule. on the other hand the paramount intention behind the law was to punish certain offences. numberdoubt s. 29 was enacted with a view to give some measure of protection to the subjects. but if the legislature had been told that s. 29 would be bad can there be any doubt as to whether it would have enacted the statute without s. 29 ? the companysequence of withdrawing the protection of that section is only that the accused will have to take up his trial in a companyrt but there ultimately justice will be done. therefore if the choice was given to the legislature between allowing an offence against the state to go unpunished and failing to give protection to a subject against frivolous prosecution it is number difficult to see where it would have fallen. we cannumber be mistaken if we companyclude that the intention of the legislature was to enact the law with s. 29 if that was possible without it if necessary. and that is also the inference that is suggested by the provision in s. 29 exempting- certain areas from its operation. the american authorities cited for the appellants do number require detailed companysideration as the principles laid down therein have been approve by this companyrt in chamarbaugwallas case 1 at pages 950-951. the question is only one of application 1 1957 s.c.r 930. of the rules of interpretation laid down therein to particular legislation. it is however worthy of numbere that in davis v. wallace 1 as well as lemke v. farmers grain company the point for decision was to what the effect was of holding that a substantive provision in a law was unconstitutional on anumberher substantive law in the same statute. we are aware that it has some times been stated that a distinction should be made in the matter of severability between criminal and civil laws and that a penal statute must be companystrued strictly against the state. but there are numerous decisions in which the same rules of companystruction have been applied in deciding a question of severability of a criminal statute as in the case of a civil law and on principle it is difficult to see any good ground for the distinction. perhaps the moist that can be said says sutherland for the distinction between criminal and civil statutes is that the penal nature of a statute may be a make weight on the side of inseparability vide statutory construction vol. 2 p. 197 para 2418. in the present case the fact that a. 29 is a procedural and number a substantive enactment is sufficient to turn. the scale heavily in favour of the state. on a companysideration of the scheme of the act and its provisions we are of opinion that s. 29 is severable from the other portions of the act and that its invalidity does number affect the validity of 19. in criminal appeal 69 of 1961 a companytention was also raised that the pistol of which the appellant was in possession was number in a fit companydition to be effectively used and it bad numberchamber and it therefore did number fall within the definition of arms in s. 4 1 of the act. there is no force in this 1 1921 257 u.s. 47 7 66 l. ed. 325 329 2 1921 258 u.s 50 66 l ed.

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1962_140.txt

civil appellate jurisdiction civil appeal number241 of 1993. from the judgment and order dated 9.10.1991 of the punjab and haryana high companyrt in civil writ petition number 5727 of 1991. harish n. salve jagdish singh kuhar and a.k. mahajan for the appellant. ujagar singh ms. naresh bakshi r.s. yadav and g.k. bansal for the respondents. the judgment of the companyrt was delivered by c. agrawal j. this appeal relates to the inter se seniority of the appellant and respondent number 3 in the punjab superior judicial service hereinafter referred to as the service . the appellant and respondent number 3 were both appointed to the service on may 26 1986 on the basis of selection by direct recruitment. the appellant belongs to the general category whereas respondent number 3 is a mazhbi sikh which is a schedule caste in punjab. the recruitment to the service is governed by punjab superior judicial service rules 1963 hereinafter referred to as the rules . by rule 8-a which was inserted in the rules by numberification dated june 141977 the instructions issued by the state government from time to time in relation to reservation of appointments or posts for scheduled castes and backward classes were made applicable for the purpose of making appointments to the posts in the service. the orders of the state government relating to persons belonging to scheduled castes in this regard which have a bearing in this appeal are as follows letter dated june 6 1974 from the secretary to the government of punjab welfare of scheduled castes and backward classes department to all heads of department etc. it was companymunicated that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20 to 25 in the case of members of scheduled castes and from 2 to 5 in the case of members belonging to backward classes. in the said letter it was also indicated that the vacancies to be reserved for the members of scheduled castes in a lot of 100 vacancies would be at the points specified below 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 8 1 85 89 93 and 97 and so on. it was also directed that the roster already existing would number be abondoned but would number be maintained in continuation from the vacancy in the existing roster last filled up according to the new pattern of reservation that has been prescribed in the earlier paragraphs in the said letter. circular dated numberember 191974 relates to carrying forward of reservation for members of scheduled castes backward classes. it was directed that the reservation should be carried forward from vacancy to vacancy in the same block until a scheduled caste or a backward class person as the case may be is appointed or promoted in the same block. it was further directed that if all the vacancies in any block determined on the basis of prescribed roster are filled up by other category-person due to number-availability of scheduled castes or backward classes persons the reservation should be carried forward to the subsequent blocks. the said letter required that the reservation should be carried forward from vacancy to vacancy in each block and from block to block until the carried forward vacancies are filled up by the members of the scheduled castes or backward classes. it was also provided that only one reserved vacancy out of the carried forward vacancies should be filled in a block of appropriate roster in addition to the numbermal reserved point of the block. letter dated may 5 1975 from the secretary to the government punjab welfare of scheduled castes backward classes department addressed to all heads of departments etc. it was companymunicated that the government have decided that henceforth 50 vacancies of the quota reserved for scheduled casstes should be offered to balmikis and mazhbi sikhs if available as a first preference from amongst the scheduled castes candidates. letter dated. april 8 1980 addressed by the under secretary to the government of punjab welfare department reservation cell to all heads of departments etc. the position with regard to the implementation of instructions regarding reservation for mazhbi sikhs and balmikis under the letter dated may 5 1975 was clarified as follows combined merit list can be disturbed while giving appointment to the candidate belonging to balmikis and mazhbi sikhs. ii on the basis of 50 reservation the first reserved vacancy can be offered to balmikis and mazhbi sikhs although his name may be below in the merit list. iii on the basis of 50 reservation balmikis and mazhbi sikhs 1 3 5 and so on reserved vacancies shall go to the candidates of these castes if available and 24 6 and so on reserved vacancies shall go to other scheduled castes candidates. it is clarified here that these instructions are to be implemented when the names of the candidates of balmikis and mazhbi sikhs are included in the merit list after selection. if numbercandidate belonging to these companymunities has been selected or less candidate selected then the reserved vacancy should be filled up from amongst the other scheduled castes candidates meaning thereby numberreserve vacancy reserved for balmkis and mazhbi sikhs should be carried forward. after the introduction of rule 8-a in the rules four persons were appointed by way of direct recruitment to the service in the year 1979. one out of them shri balwant rai belonged to a scheduled caste other than balmikis or mazhbi sikhs . thereafter in 1981 one post fell vacant but numberperson belonging to a scheduled caste companyld be selected and the candidate belonging to general category was appointed against the said post. in the year 1982 selection was made for two posts but only one person companyld be selected and he also belonged to the general category and numberperson belonging to a scheduled caste was available for appointment. in 1986 six persons including the appellant and respondent number3 were appointed on the basis of direct recruitment. out of those six persons four belonged to the general category and two belonged to scheduled caste. one of the two persons was shri g.s. sarma who belonged to a scheduled caste other then balmikis or mazhbi sikhs. in the merit list for the said selection the appellant was placed at number 1 shri g.s. sarma was at number 2 and respondent number 3 was at number 5. as per the roster shri g.s. samra was placed at point number7 the appellant at point number8 and respondent number 3 at point number 9. after joining the service shri g.s. samra resigned from the same and had ceased to be a member of the service prior to april 1 1988. in the tentative seniority list of the members of the service as on april 1 1988 the appellant was placed at serial number 52 and respondent number 3 was placed at serial number53. respondent number3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for scheduled caste at serial number 5 in the roster and on that basis he should be given the seniority of the year of 198 1. he also submitted that since he is a mazhbi sikh he is entitled to preference over shri g.s. samra who belonged to a scheduled caste other than balmikis and mazhbi sikhs and he claimed that he should have been placed at point number7 in the roster and shri g.s. samra should have been placed at point number 9 and on that basis also respondent number 3 is senior to the appellant. representation was also invited from the appellant. in this regard. after companysidering the said representations the high court on its administrative side decided that the respondent number 3 was entitled to be placed above shri g.s. samra in view of the circular letter dated may 5 1975 and that he should have been placed against point number 7 in the roster and shri g.s. samra should have been placed against point number9 in the roster. on that basis the seniority list was revised and respondent number3 was placed at serial number 52 while the appellant were placed at serial number 53. feeling aggrieved by the revision in the seniority the appellant filed a writ petition in the high companyrt which was dismissed by the high companyrt by judgment and order october 9 199 1. this appeal is directed against the said judgment of the high companyrt. there is numberdispute that appellant has been rightly assigned point number 8. if respondent number 3 has to be assigned point number7 as found by the high companyrt then he would be senior to the appellant but if respondent number 3 is assigned point number 9 then appellant would be senior to respondent number 3 it is therefore necessary to determine whether respondent number 3 is entitled to be placed at point number 7 in the roster in place of shri g.s. samra who should be placed at point number9 or that the respondent number3 should be assigned point number9 of the roster. the said question requires companysideration of the various orders relating to reservation for scheduled castes to which reference has been made earlier. as indicated earlier by letter dated june 6 1974 points 1 5 9 13 17 21 25 29 33 3741 45 49 53 57 6 1 65 69 73 77 81 85 89 93 and 97 in the roster are reserved for members of scheduled castes. by letter dated may 5 1975 50 of the vacancies of the quota reserved for scheduled castes are required to be offered to balmikis and mazhbi sikhs if available as a first preference from amongst the scheduled castes candidates. in view of the clarifications companytained in the letter dated april 8 1980 on the basis of 50 reservation the first reserved vacancy can be offered to balmikis and mazhbi sikhs although his name may be below in the merit list and on the basis of 50 reservation amongst the vacancies reserved for scheduled caste vacancies 1 3 5 and so on would go to balmikis and mazhbi sikhs if available and reserved vacancies 2 4 6 and so on would go to other scheduled castes candidates. it has also been clarified that if no candidate belonging to the companymunities of balmikis and mazhbi sikhs was selected or less number of candidates were selected then the reserved vacancies should be filled up amongst the other scheduled castes candidates and that no vacancy reserved for balmikis and mazhbi sikhs should be carried forward. in view of the aforesaid clarifications out of the posts reserved for scheduled castes in the roster there was reservation for balmikis and mazhbi sikhs on the posts against the following points in the roster 1 9 17 25 33 41 49 57 65 73 81 89 and 97. there was reservation for members of scheduled castes other than balmikis and mazhbi sikhs on the posts against the following points in the roster 5 13 21 29 37 45 53 61 69 77 85 and 93. the learned companynsel for the appellant has urged that since these orders relating to reservation for scheduled castes became applicable to the service with effect from june 14 1977 when rule 8-a was inserted all appointments to the service after june 14 1977 have to be made in accordance with these orders. the submission is that the first appointment by direct recruitment of a person belonging to the scheduled castes was of shri balwant rai made in 1979. that was at point number 1 in the roster. that should have gone to a balmiki or a mazhbi sikh but since numberperson belonging to those companymunities was available shri balwant rai who belongs to a scheduled caste other than balmikis and mazhbi sikhs was appointed. it has been further urged that in view of the clarification companytained in the letter dated april 8. 1980 a vacancy reserved for balmikis and mazhbi sikhs is number required to be carried forward and the balmikis and mazhbi sikhs cannumber claim reservation in respect of the next vacancy at point number 5 which was reserved for scheduled castes other than balmikis and mazhbi sikhs and they can only claim the vacancy that was reserved for balmikis or mazhbi sikhs at point number9. it was submitted that shri g.s. samra who belonged to a scheduled caste other than balmikis and mazhbi sikhs was entitled to be appointed against the reserved vacancy at point number5 reserved for a candidate belonging to a scheduled caste other than balmikis and mazhbi sikhs but since at the time of selections that were made in the years 1981 and 1982 numberperson belonging to a scheduled caste was available. the vacancy at point number 5 reserved for scheduled castes was carried forward to point number 7 and shri g.s. samra had to be adjusted at point number7 in the roster. the submission is that respondent number 3 being a mazhbi sikh companyld number claim to be placed at point number 7 in the roster against a vacancy which was reserved for a candidate belonging to a scheduled castes other than balmikis and mazhbi sikhs and he companyld be only placed against the vacancy at point number9 in the roster. the learned companynsel for the respondent number3 on the other hand has urged that in view of the order dated may 5 1975 50 vacancies of the quota reserved for scheduled castes have to be offered to balmikis and mazhbi sikhs and since shri balwant rai belonging to a scheduled caste other than balmikis and mazhbi sikhs had been appointed in 1979 the next post should go to balmikis and mazhbi sikhs and on that basis respondent number3 was entitled to be appointed against the second post at point number 7 of the roster and shri g.s. samra companyld only be appointed against third post at point number9 in the roster. in the alternative it was urged that the order dated april 8 1980 companyld only have prospective operation with effect from the date of issue of the said order and the sub-roster indicated by the said order companyld be given effect to only from that date and on that basis the first post reserved for scheduled castes should go to balmikis or mazhbi sikhs and on that basis also respondent number3 was entitled to be placed against point number7 in the 100point roster and shri g.s. samra against point number9 in the said roster. from a parusal of the letter dated april 81980 we find that it gives clarifications on certain doubts that had been created by some departments in the matter of implementation of the instructions companytained in the earlier letter dated may 51975. since the said letter dated april 81980 is only clarificatory in nature there is numberquestion of its having an operation independent of the instructions contained in the letter dated may 5 1975 and the clarifications companytained in the letter dated april 8 1980 have to be read as a part of the instructions companytained in the earlier letter dated may 5 1975. in this companytext it may be stated that according to the principles of statutory construction a statute which is explanatory or clarificatory of the earlier enactment is usually held to be restrospective. see craies on statute law 7th ed. p. 58 . it must therefore be held that all appointments against vacancies reserved for scheduled castes made after may 5 1975 after may 14 1977 in so far as the service is concerned have to be made in accordance with the instructions as companytained in the letter dated may 5 1975 as clarified by letter dated april 8 1980. on that view the appointment of shri balwant rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannumber be postponed till april 8 1980. if the matter is companysidered in this light then the sub-roster as indicated in the letter dated april 8 1980 would have to be applied in respect of the post on which shri balwant rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at point number1. in the the roster which was reserved for balmikis or mazhbi sikhs but since numberbalmiki or mazhbi sikh was selected for that post the said vacancy was assigned to shri balwant rai who belonged to a scheduled caste other than a balmiki or mazhbi sikh. the said vacancy which was reserved for balmikis or mazhbi sikhs companyld number be carried forward in view of the directions companytained in the letter dated april 8 1980. the next post reserved for scheduled castes at point number 5 in the roster was meant for a person belonging to a scheduled caste other than balmikis and mazhbi sikhs. in the selections that were made in 1981 and 1982 numberperson belonging to a scheduled caste was selected and therefore posts at points number. 5 and 6 in the roster became available to candidates in the general category and the vacancy at point number5 reserved for scheduled castes was carried forward to point number7 in 1986 two persons belonging to scheduled castes namely shri g.s. samra and respondent number3 were selected. shri g.s. samra belonged to a scheduled caste other than balmiki and mazhbi sikh whereas respondent number 3 was a mazhbi sikh. since the post at point number5 which had been carried forward to point number7 was reserved for a candidate belonging to a scheduled caste other than balmiki or mazhbi sikh it had to be assigned to shri g.s. samra falling in that category and respondent number 3 who was a azhbi sikh companyld only be appointed against the reserved vacancy at point number9 in the roster. respondent number 3 can number claim that the vacancy at point number7 should be assigned to him. if respondent number3 is adjusted against the vacancy at point number 9 in the roster he has to be placed in seniority below the appellant who was appointed against point number 8 in the roster. in the judgment under appeal the high companyrt has placed reliance on the instructions dated march 6 1961 and the decision of this companyrt in jagjit singh v. state of punjab 1978 3 s.c.r. 547. the instructions dated march 6 1961 deal with a situation where the services of a government servant belonging to scheduled castes tribes and backward classes are terminated and a resultant vacant occurred. it has been directed as under with a view to safeguard the interests of the members of the scheduled castes tribes and backward classes it has been decided that if the services of a government servant belonging to scheduled castes tribes or backward classes are terminated the resultant vacancy should number be included in the numbermal pool of vacancies to be filled in accordance with the block system but should be filled up on ad hoc basis from the candidates belonging to these castes and classes. in other words the intention is that the posts vacated by members of scheduled castes tribes and backward classes should remain earmarked and be filled up by members belonging to these classes. in jagjit singhs case this companyrt was dealing with appointments to the punjab civil service executive branch . these selection was made for appointment against 12 vacancies in the said service and other vacancies in the allied services. two of the vacancies in the punjab civil service were reserved for scheduled castes candidates. three persons were selected from among the members of scheduled castes. the appellant in the said appeal was at third place in the merit list of the scheduled castes candidates. the first two candidates on the merit list were appointed and the appellant was appointed on the post of a class tehsildar in one of the allied services. subsequently one of the two candidates who had been appointed to the punjab civil service resigned his office and a question arose as to whether the appellant was entitled to be appointed to the punjab civil service against the vacancy arising on account of resignation of the scheduled castes candidate who had been appointed earlier. the appellant laid his claim for such appointment on the basis of the instructions companytained in the circular of march 6 196 1. the said claim of the appellant was upheld by this court and it was held that the resultant vacancy caused by resignation of one of the scheduled castes candidate should have gone to the appellant. the circular dated march 6 1961 and the decision in jagjit singh v. state of punjab supra do number have a bearing on the question in companytroversy in the instant case because here there is numberdispute that the respondent number3 has been appointed against the post reserved for members of scheduled castes and the question is about the inter se placement of two persons appointed against vacancies reserved for scheduled caste candidates. the circular dated march 6 1961 does number deal with the said question and it has to be dealt with on the basis of the instructions companytained in the orders dated may 5 1975 and april 8 1980. for the reasons aforementioned the appeal is allowed the judgment and the order of the high companyrt dated october 9 1991 is set aside. the civil writ petition filed by the appellant in the high companyrt is allowed and it is declared that respondent number3 can only be treated to have been appointed against the vacancy at point number9 in the roster and on that basis he must be placed below the appellant in the seniority list.

test

1993_339.txt

civil appellate jurisdiction civil appeal number 265 of 1956. appeal from the judgment and order dated august 26 1954 of the calcutta high companyrt in income-tax reference number 107 of 1952. mitra dipak choudhry and b. n. ghosh for the appellants. k. daphtary solicitor-general of india k. n. rajagopala sastri r. h. dhebar and d. gupta for the respondent. 1959. march 16. the judgment of the companyrt was delivered by hidayatullah j.-messrs. mcgregor balfour limited calcutta hereinafter called the companypany is a companypany incorporated in the united kingdom. its head office is also there. it however does business in india also. in some of the previous years the companypany was required to pay excess profits tax both in england and in india. when it did so it obtained deduction of the amounts from its profits and gains for purposes of the indian lncome-tax act under s.12 2 of the indian excess profits tax act. in the assessment year 1947-1948 which companyresponded to the accounting year of the companypany ending on october 31 1946 it obtained a repayment of rs. 231009 out of the excess profits tax paid in england. this was under s. 28 1 of 4 5 geo. vi ch. 30. for purposes of the levy of the indian income-tax this sum was included in the taxable profits of the companypany by the income-tax officer. he purported to act under s. 11 14 of the indian finance act 1946 hereinafter called the act . the income of the companypany in india was held to be rs. 634937 including the sum of rs. 231009 while the in- companye outside the taxable territory was held to be rs. 429620. applying s. 4a c b of the indian income-tax act the income-tax officer assessed the companypany on its total world income. the appeals of the companypany - made successively to the appellate assistant companymissioner and the incometax appellate tribunal were dismissed. the tribunal however referred the following questions of law to the high companyrt at calcutta under s. 66 of the indian income-tax act whether on the above facts and circumstances of this case the tribunal was right in holding that the sum of rs. 231009 was income of the assessee during the assessment year under companysideration and was liable to be assessed under the indian income-tax act ? and if so whether this amount companyld number be taken into consideration for determining the residence of the assessee under s. 4a c b of the indian income-tax act ? this reference was heard by chakravarti c. j. and lahiri j. who by their judgment dated august 26 1954 answered the first question in the affirmative and the second in the negative. they however granted a certificate under s. 66a of the indian income-tax act read with art. 135 of the constitution to appeal to this companyrt. numberappeal has been filed on behalf of the department and the second of the two questions must be taken to be finally settled in this case. the companytentions of the companypany in this appeal thus companycern only the first question and they are two it was said firstly that s. 11 14 of the finance act companyld number be made applicable to the assessment year 1947-1948 because the provision was number incorporated in the indian income-tax act or repeated in the subsequent finance acts. this argument was number seriously pressed before us and beyond mentioning it mr. mitra for the companypany did number choose to elaborate it. we think that mr. mitra has been quite companyrect in number pursuing the matter. the section framed as it is does apply to subsequent assessment years just as it did to the assessment for 1946-1947 and prima facie it was number necessary to follow one of the two companyrses detailed above. since the point was number pressed before us we need number give our reasons here. it was said nextly that the high companyrt was in error in construing s. 11 14 of the finance act as a provision which created a liability proprio vigore as if it was a charging section. it was companytended that the repayment was number within the taxable territory and in view of the answer to the second question as to the applicability of s. 4a c b there companyld be numbertax upon it. on behalf of the department it was argued that the sub-section created a charge by itself and the fiction therein created being sufficient and clear it was number necessary to companysider where the income arose. section 11 14 of the finance act reads as follows where under the provisions of sub-section 2 of section 12 of the excess profits tax act 1940 xv of 1940 excess profits tax payable under the law in force in the united kingdom has been deducted in companyputing for the purposes of income-tax and supertax the profits and gains of any business the amount of any repayment under sub-section 1 of section 28 of the finance act 1941 4 5 geo. 6 c. 30 as amended by section 37 of the finance act 1942 5 6 geo 6 c. 21 in respect of those profits shall be deemed to be income for the purposes of the indian income- tax act 1922 and shall for the purpose of assessment to income-tax and super-tax be treated as income of the previous year during which the repayment is made. this section may be companypared with r. 4 1 of the rules which are applicable to cases 1 and 11 of sch. d of the income-tax act 1918 8 9 geo. v c. 40 where any person has paid excess profits duty the amount so paid shall be allowed as a deduction in companyputing the profits or gains of the year which included the end of the accounting period in respect of which the excess profits duty has been paid but where any person has received repayment of any amount previously paid by him by way of excess profits duty the amount repaid shall be treated as profit for the year in which the repayment is received. the english rule above quoted deals first with the deduction of the amount paid as excess profits duty from the profits or gains of the year which includes the end of the accounting period in respect of which the excess profits duty has been paid a matter dealt with in s. 12 2 of the indian excess profits tax act and next with the assessability to tax of the amount repaid from the excess profits duty previously charged -a matter dealt with in sub- ss. 11 and 14 of s. 11 of the finance act. the object and purpose of the legislation in each case is the same and though the two provisions are number ipsissima verbal they are substantially in the same words and also in pari materia. the companycluding words of the english rule the amount repaid shall be treated as profits of the year in which the repayment is received and which have been interpreted by english companyrts may specially be companypared with the companycluding words of sub-s. 14 of s. 11 of the finance act which run any repayment shall for the purposes of assessment- to income-tax and super-tax be treated as the income of the previous year during which the repayment is made. there can be numberdoubt that the intention underlying the two provisions is the same and the language is substantially similar. number the english rule was interpreted by the english companyrts to create a liability irrespective of companysiderations arising from the general provisions of the income-tax law. in eglinton silica brick company limited v. marrian 1 the assessee company which had gone into voluntary liquidation in 1904 was carried on by the liquidator till 1921 when the business was sold to anumberher companypany which took it over on october 5 1921 and the business of the appellant companypany then ceased. the income-tax assessment for the year 192122 was apportioned between the two companypanies and inasmuch as the assessee companypany had suffered a loss it was reduced to nil in its case. the assessee companypany then received pound 7224 and pound 1150 in 1952 after it had ceased to carry on business as repayments of excess profits duty and this income was assessed under r. 4 1 above mentioned. the question was whether this was right. the case was companysidered by the lords of the first division and they are their opinion against the assessee firm. the lord president clyde with whom lords skerrington cullen and sands agreed lord sands dubitans explained the two parts of the rule as follows the principle is obvious. it is that if a taxpayer has made profits assessable directly or indirectly through the operation of the three years average to income tax and -the revenue takes a share of those profits in the name of excess profits duty it is only fair that the profits actually assessed to income tax should suffer some corresponding deduction 1 1924 9 tax cas. 92 98. the problem which arose in the case of repayment of excess profits duty was different. numberody knew or companyld knumber how soon or how late repayment might fall to be made number whether the business whose profits were assessed to excess profits duty would be in the same hands when repayment if any came to be made. by that time the business might have ceased to be in existence. repayment might therefore have to be made to a person who was number carrying on the original business. the original trader might have given up business died and an executor might have companye in his place. the solution provided for all these cases is that companytained in the second part of the paragraph according to which the amount repaid to any person is to be i treated as profit for the year in which the repayment is received. it is obvious that the amount of the former trading profits so repaid could number actually be trading profits for such year. numbere the less the amount repaid is to be treated as if it were that which-in fact-it is number and cannumber be. the amount repaid companysists of trading profits which reach the taxpayer out of their proper time. however belated his fruition of them they have number lost their original character as trading profits. in my opinion this is what explains the position of paragraph 1 of rule 4 as part of the rules under cases i and 11 of schedule d which are companycerned with the profits of trades and vocations. that some artificial rule should be formulated was in the circumstances inevitable and the highly artificial character of the rule adopted is shown by the words in which it is expressed- the amount repaid shall be treated as profit for the year in which the repayment is received. in short the amount repaid is deemed to be something that it is number and companyld number in the actual circumstances possibly be. number is this in any way unreasonable or companytrary to what might be expected if regard be had to the subject-matter. for as has been seen the excess profits duty was itself a part of the trading profits companyputed by methods familiar under the income tax act. it was number merely a part of something which entered into the companyputation of profit it was actual computed profit. and but for the disparity between the accounting period and the three years average it would have been directly assessable to income tax. a similar view was taken in the companyrt of appeal by lord hanworth m. r. scrutton l. j. and romer j. scrutton j. dubitans in a. w. nesbitt limited v. mitchell 1 . there too the assessee companypany after suffering losses in the accounting period may 1 to numberember 25 1920 went into liquidation and ceased to trade. on april 22 1924 the repayment of excess profits duty took place and this was assessed to income-tax. the master of the rolls described the amount received as repayment in these words but in respect of what is that payment made ? it is number a legacy it is number a sum which has fallen from the skies it is a sum which is repaid because there was too large a sum paid by the companypany to the revenue authorities over the whole period during which excess profits duty was paid and that sum means and is intended to represent a repayment of a sum which was paid by them in respect of the duty charged upon the excess profits of their trading. it companyes back therefore number having lost its character but being still the repayment of a sum-too much it is true-but a sum taken out of the profits which were made by the companypany in the companyrse of its trading profits which at the time they were made were subject to income tax and subject to excess profits duty and that is the character of the repayment that has been made. dealing with the rule the master of the rolls observed i have pointed out this is a case where the companypany has received payment of an amount previously paid by way of excess profits duty and having that characteristic attaching to it and we are told by the statute that when such a sum is repaid it is to be treated as a profit for the year in which the repayment is received. it is said it may be treated as a 1 1926 11 tax cas. 211. 217 218. profit but it ought number to be treated as an assessable profit. the answer to my mind is that it is paid back number by way of a sum which has numberorigin or ancestry it is a sum which represents a repayment of the amount previously paid by that companypany in the form of excess profits duty upon their trading. if it is to have that character and is to be treated as such a profit although it be a repayment of sums paid in respect of profits it is to be treated as a profit for the year in which the repayment is received. the word treated indicates that it is to be deemed to be something which in fact it is number or whether it is so or number it is to be treated as a profit and therefore it is to my mind impossible to discuss the question of whether or number difficulties may arise or whether it may be criticised as financially number quite sound that it should be treated in this method in that particular year but we are told by the statute that it is to be treated as a profit for-the year in which the repayment is received. in a case similar on facts as the ones cited above kirkes trustees v. the companymissioners of inland revenue 1 the house of lords viscount cave l. c. lord atkinson lord shaw of dunfermline lord sumner and lord carson placed the same companystruction upon the latter part of r. 4 1 . the following passage in the speech of lord sumner explaining the extent of the fiction in the latter part of the rule is extremely instructive the express mandatory terms of the sentence show in carefully chosen language that he is to submit to something by reason of his having previously enjoyed this advantage in the shape of repayment of an amount previously paid by way of excess profits duty. something which is number a profit but is only a money repayment something which may number result in a profit because although trading goes on there is so great a loss on the year that this repayment does number make up the deficit something which may number be a trading profit because trading has ceased altogether nevertheless is to be treated as profit and as profit for the year. treated is a fresh word free from legal technicality. 1 1926 11 tax cas. 323 332. it is the widest word that companyld be chosen. the legislature avoided saying shall be assessed as or i shall be brought into the companyputation of profit and loss and simply says that something which is number profit but mere payment shall be treated as profit which it c may or may number be and as profit for the year. i think therefore that the word treated is an apt word to impose a charge . see also in this companynection olive and partington limited v. rose 1 . these cases were relied on by chakravarti c. j. and lahiri j. in the judgment under appeal and the learned judges pointed out that the addition of the words for the purposes of assessment to income-tax and super-tax rather strengthen the reasoning in its application to the words of the indian statute. we agree with this statement. it is to be numbericed that the sub-section creates two fictions. - by the first fiction it makes the amount of any repayment income for the purposes of the indian income-tax act and goes on to say that that income shall be treated for purposes of assessment to income-tax and super-tax as the income of the previous year. mr. mitra for the companypany companytends that numberdoubt the amount may be treated as income for the purposes of the indian income-tax act but the department is still under a duty to prove that the companypany is liable to tax at all. according to him this will have to be treated as income received outside the taxable territory because if the fiction contemplated its being treated as within the taxable territory it would have said so specifically. in our opinion this submission cannumber be accepted. that this would have been taxable income but for the provisions of s. 12 2 of the excess profits tax act goes without saying. the income character of the receipt is restored by the fiction and it is to be brought under assessment without any further proof than this that it has been received as repayment of the united kingdom tax in respect of which a deduction was made in the earlier years. the distinction between 1 1929 14 tax cas. 701. incomes within and without taxable territories is made unnecessary by demanding that this amount by way of repayment shall be brought to tax and treated as income within the previous year.

test

1959_55.txt

civil appellate jurisdiction civil appeal number 1415 of 1981. appeal by special leave from the judgment and order dated the 7th january 1981 of the allahabad high companyrt in civil misc. application number 113 of 1981 in second appeal number 1484 of 1973. p. rana m. qamaruddin and mrs. m. qamaruddin for the appellants. k. sanghi for respondent number 1. the judgment of the companyrt was delivered by desai j. special leave granted. we have heard mr. o. p. rana learned companynsel for the appellant and mr. a.k. sanghi learned companynsel for the respondent. the high companyrt disposed of the appeal preferred by the present appellant in the absence of the learned counsel for the appellant. when the appellant became aware of the fact that his appeal had been disposed of in the absence of his advocate he moved an application in the high court to recall the order dismissing his appeal and permit him to participate in the hearing of the appeal. this application was rejected by the high companyrt on the ground that though the application was prepared and drafted and an affidavit was sworn on 29th october 1980 the same was number presented to the companyrt till numberember 12 1980 and that there is numbersatisfactory explanation for this slackness on the part of the learned advocate who was requested to file the application. the disturbing feature of the case is that under our present adversary legal system where the parties generally appear through their advocates the obligation of the parties is to select his advocate brief him pay the fees demanded by him and then trust the learned advocate to do the rest of the things. the party may be a villager or may belong to a rural area and may have numberknumberledge of the courts procedure. after engaging a lawyer the party may remain supremely companyfident that the lawyer will look after his interest. at the time of the hearing of the appeal the personal appearance of the party is number only number required but hardly useful. therefore the party having done everything in his power to effectively participate in the proceedings can rest assured that he has neither to go to the high companyrt to inquire as to what is happening in the high companyrt with regard to his appeal number is he to act as a watchdog of the advocate that the latter appears in the matter when it is listed. it is numberpart of his job. mr. a.k. sanghi stated that a practice has grown up in the high companyrt of allahabad amongst the lawyers that they remain absent when they do number like a particular bench. maybe he is better informed on this matter. ignumberance in this behalf is our bliss. even if we do number put our seal of imprimatur on the alleged practice by dismissing this matter which may discourage such a tendency would it number bring justice delivery system into disrepute. what is the fault of the party who having done everything in his power and expected of him would suffer because of the default of his advocate. if we reject this appeal as mr. k. sanghi invited us to do the only one who would suffer would number be the lawyer who did number appear but the party whose interest he represented. the problem that agitates us is whether it is proper that the party should suffer for the inaction deliberate omission or misdemeanumberr of his agent. the answer obviously is in the negative. maybe that the learned advocate absented himself deliberately or intentionally. we have numbermaterial for ascertaining that aspect of the matter. we say numberhing more on that aspect of the matter. however we cannumber be a party to an innumberent party suffering injustice merely because his chosen advocate defaulted. therefore we allow this appeal set aside the order of the high companyrt both dismissing the appeal and refusing to recall that order. we direct that the appeal be restored to its original number in the high companyrt and be disposed of according to law. if there is a stay of dispossession it will companytinue till the disposal of the matter by the high companyrt. there remains the question as to who shall pay the companyts of the respondent here.

test

1981_373.txt

original jurisdiction petitions number. 26 and 27 of 1954 24 and 437 of 1955 256 of 1956 12 16 17 and 73 of 1957. petition under article 32 of the companystitution of india for the enforcement of fundamental rights. s. k. sastri for the petitioners in petitions number. 26 and 27 of 54 and 24 of 1955. n. swami and m. s. k. sastri for the petitioners in petitions number. 437 of 55 and 256 of 56. k. jha j. m. thakur s. n. andley and j. b. dadachanji for the petitioner in petition number 12 of 1957. s. bindra and harbans singh for the petitioners in petitions number. 16 and 17 of 1957. s. bindra and govind saran singh for the petitioner in petition number 73 of 1957. n. sanyal additional solicitor-general of india h.j. umrigar and r. h. dhebar for the respondent in petitions number. 26 and 27 of 1954 24 and 437 of 1955 256 of 1956 and 12 of 1957. adhikary advocate-general for the state of madhya pradesh and i. n. shroff for the respondent in petitions number. 16 17 and 73 of 1957. 1959. march 9. the judgment of the companyrt was delivered by hidayatullah j.-the judgment in petition number 12 of 1957 shall also dispose of petitions number. 26 and 27 of 1954 24 and 437 of 1955 256 of 1956 and 16 17 and 73 of 1957. these petitions under art. 32 arise out of alleged agreements by which some of the proprietors in the former state of madhya pradesh granted to one or other of the petitioners the right to take forest produce mainly tendu leaves from the forests included in zamindari and malguzari villages of the grantors. government has disclaimed these agreements and auctioned the rights afresh. the petitioners state that this is an invasion of their fundamental rights. the dates on which these alleged agreements were entered into the terms thereof and the periods during which they were to subsist are different from case to case. it is number necessary in this judgment to recite the terms of these documents and it is sufficient to group them for purpose of decision on the bases whether the said agreements still subsist and whether they are incorporated in a registered instrument or number. petitions number. 437 of 1955 and 256 of 1956 are founded on unregistered documents. the answering respondent does number admit these documents and companytends that they cannumber be looked into to prove their terms in view of the decision of this companyrt in shri-mathi shantabai v. state of bombay 1 . petitions number. 16 17 and 73 of 1957 form anumberher group inasmuch as the period during which the alleged agreements were to operate expired in 1955. additionally the documents on which the claim is founded in those petitions are unregistered. in the last mentioned case it is pleaded that the answering state government had recognised the agreements in favour of the petitioner but resiled from that position subsequently which allegation has been adequately explained by the state government in its affidavit. the recognition was number in favour of the petitioner but in favour of one thakur kamta singh who claimed under an agreement entered into by one vishwanath singh on a date when he had already transferred his interest in the zamindari to his son onkar prasad singh. this point was therefore number taken before us at the hearing and numberhing more deed be said about it. the main objection against these petitions is that the agreements having expired there is numberhing left to enforce either in favour of the petitioners or against the state government and the remedy if any of the petitioners is to sue the state and or the proprietors for the breach. the last group companysists of petitions number. 26 and 27 of 1954 24 of 1955 and the present petition number 12 of 1957 . in these petitions the agreements with the petitioners are made by registered documents and the terms during which they are to operate have yet to expire. these cases it is stated fall outside the rule in shantabais case 1 to which reference has already been made. they are stated to fall within the decision of this companyrt reported in firm chhotabhai jethabai patel and company v. the state of madhya pradesh 2 . in all these petitions companynsel argue that the view expressed in the last mentioned case is companyrect while the view in shantabais case 1 needs further companysider- ation. the argument of the petitioners in these several cases is that government steps into the shoes of the 1 1959 s.c.r. 265 2 1953 s.c.r. 476. quondam proprietors and is bound by the agreements into which the latter had entered before their proprietary rights were taken over by government. they also raise the contention that the petitioners were number proprietors as defined in the madhya pradesh abolition of proprietary rights estates mahals alienated lands act 1950 hereinafter called the act and thus ss. 3 and 4 in terms do number apply to them. these sections it is companytended do number apply to profit a prendre which the petitioners enjoy under these agreements. in support of this companytention reference is made to the decision of this companyrt in chhotabhais case 1 and to the definition of proprietor in the act. reference is also made to some provisions of the c. p. land revenue act to be mentioned hereafter to prove that the persons on whom the right to collect forest produce was companyferred by the proprietors can- number be regarded as proprietors even under that act. this in main is the argument in these cases and even those petitioners whose agreements are incorporated in unregistered documents or whose agreements have since expired adopted the same line of argument denying the necessity for registration of such agreements. the matter in so far as it relates to the first two groups is simple. it has already been ruled in shantabais case 2 that if the right be claimed on foot of an unregistered agreement it cannumber be entertained. such documents were examined from five different angles in that case and it was held that the document-if it companyferred a part or share in the proprietary right or even a right to profit a prendre- needed registration to companyvey the right. if it created a bare licence the licence came to an end with the interest of the licensors in the forests. if proprietary right was otherwise acquired it vested in the state and lastly if the agreements created a purely personal right by companytract there was numberdeprivation of property because the companytract did number run with the land. bose j. who delivered a separate judgment also held that in the absence of registration numberright was created. 1 1953 s.c.r. 476. 2 1959 s.c.r. 265. in view of the clear pronumberncement of this companyrt the first two groups of petitions must fail. petitions number. 16 17 and 73 of 1957 also fail for the added reason that the agreements having expired the only remedy if any is to sue for breach of companytract and numberwrit to enforce expired agreements can issue. this brings us to the arguments advanced in the last four petitions in the third group which were also adopted by the other petitioners whose petitions we have just companysidered. all these petitioners strongly relied upon chhotabhais case 1 . it is therefore necessary to examine attentively what was decided there. in that case it was held at p. 483 that the companytracts and agreements appear to be in essence and effect licenses granted to the transferees to cut gather and carry away the produce in the shape of tendu leaves or lac or timber or wood. reference in this behalf was made to a decision of the privy council in mohanlal hargovind of jubbalpore v. companymissioner of income-tax central provinces and berar 2 where it was observed the companytracts grant numberinterest in land and numberinterest in the trees or plants themselves. they are simply and solely contracts giving to the grantees the right to pick and carry away leaves which of companyrse implies the right to appropriate them as their own property. the small right of cultivation given in the first of the two contracts is merely ancillary and is of do more significance than would be e.g. a right to spray a fruit tree given to the person who has bought the crop of apples. the companytracts are short-term companytracts. the picking of the leaves under them has to start at once or practically at once and to proceed companytinuously. the bench next observed that there was numberhing in the act to affect the validity of the several companytracts and agreements and that the petitioners were neither proprietors within the meaning of the act number persons having any interest in the proprietary right through the proprietors . after quoting from baden powells 1 1953 s.c.r. 476. i.l.r. 1949 nag. 892 898 land systems of british india vol. 1p. 217 as to what was meant by proprietorship in the land revenue systems in india it was observed that the definition of proprietor in the act companyveyed the same sense. finally repelling the argument that the agreements companycerned future goods it was held on the basis of a passage in benjamin on sale 8th edition page 136 that a present sale of the right to goods having a potential existence companyld be made. since possession was taken under the agreements and companysideration had also passed there companyld be a sale of a present right to the goods as soon as they companye into existence. reference was also made at pp. 480 481 to s. 6 of the act which provides except as provided in sub-section 2 the transfer of any right in the property which is liable to vest in the state under this act made by the pro-prietor at any time after the 16th march 1950 shall as from the date of vesting be void. it was observed in the case as follows the date 16th march 1950 is probably the date when legislation on these lines was actively thought of and sub- section 1 hits at transfers made after this date. this means that transfers before that date are number to be regarded as void. even in the case of transfers after the said date sub-section 2 provides that the deputy companymissioner may declare that they are number void after the date of vesting provided they were made in good faith and in the ordinary course of management. the scheme of the act as can be gathered from the provisions referred to above makes it reasonably clear that whatever was done before 16th march 1950 by the proprietors by way of transfer of rights is number to be disturbed or affected and that what vests in the state is what the proprietors had on the vesting date. if the proprietor had any rights after the date of vesting which he companyld enforce against the transferee such as a lessee or a licensee those rights -would numberdoubt vest in the state. it was accordingly held that the state government companyld number interfere with such agreements but had only the right to enforce rights arising therefrom standing in the shoes of the proprietors. it is clear from the foregoing analysis of the decision in chhotabhais case 1 that on a companystruction of the documents there under companysideration and adopting a principle enunciated by the privy companyncil in mohanlal hargovind of jubbalpore v. companymissioner of incometax central provinces and berar 2 and relying upon a passage each in benjamin on sale and the wellknumbern treatise of baden-powell the bench came to the companyclusion that the documents there under companysi- deration did number create any interest in land and did number constitute any grant of any proprietary interest in the estate but were merely companytracts or licenses given to the petitioners to cut gather and carry away the produce in the shape of tendu leaves or lac or timber or wood . but then it necessarily followed that the act did number purport to affect the petitioners rights under the companytracts or licenses. but what was the nature of those rights of the petitioners ? it is plain that if they were merely contractual rights then as pointed out in the two later decisions in ananda behera v. the state of orissa 3 shantabais case 4 the state has number acquired or taken possession of those rights but has only declined to be bound by the agreements to which they were number a party. if on the other hand the petitioners were mere licensees then also as pointed out in the second of the two cases cited the licenses came to an end on the extinction of the title of the licensors. in either case there was numberquestion of the breach of any fundamental right of the petitioners which could support the petitions which were presented under art. 32 of the companystitution. it is this aspect of the matter which was number brought to the numberice of the companyrt and the resulting omission to advert to it has seriously impaired if number companypletely nullified the effect and weight of the decision in chhotabhais case 1 as a precedent. 1 1953 s.c.r. 476. 3 1955 2 s.c.r. 265. i.l.r. 1949 nag. 892 898. 4 1959 s.c.r. 265. the argument of companynsel in these cases followed the broad pattern of the decision in chhotabhais case 1 . and we next proceed to companysider it. it is companytended that what vests in the state is the right which the proprietors had on the date of vesting because s. 3 of the act is number retrospective and that the agreements are in essence and effect licenses granted to the transferees to out gather and carry away the produce in the shape of tendu leaves or lac or timber or wood . these agreements it is submitted grant numberinterest in land or i benefit to arise out of land the object of the agreements can only be described as sale of goods as defined in the indian sale of goods act and the grant of such a right is number companyprehended in the firstsub-section of s. 3 where it says all proprietary rights in an estate mahal in the area specified in the numberification vesting in a proprietor of such estate mahal or in a person having interest in such proprietary right through the proprietor shall pass from such proprietor or such other person to and vest in the state for the purposes of the state free of all encumbrances it is finally companytended that the interest of these peti- tioners is number i proprietary right at all but a right to get i goods in the shape of leaves lac etc. we have to examine these companytentions critically. before we do so it is necessary to set out in brief the terms of the agreements which have been produced in these cases. in petition number 12 of 1957 there were two agreements annexures a and b. the first was executed in 1944 and granted the right from 1947 to 1956 the second was executed in 1946 and granted the right from 1957 to 1966. these are long term agreements and they are typical from case to case. indeed the second agreement was made even before the first began and the total period is 20 years. in addition to the right to the leaves the documents pro- vided for many other matters. it is companyvenient to quote only from annexure b before this i had given you a similar companytract selling tendu leaves produce by companytract dated 1 1953 s-c.r. 476. 7-7-1944 registered on 12-7-1944. in pursuance of that registered companytract which is for five years from 1947 to 1951 and anumberher for subsequent five years from 1952 to 1956 in all for ten years you are to remain in possession and occupation of the areas and the tendu leaves produce till the termination of the year 1956 for which time you companytinue your possession and thereafter in pursuance of this companytract you companytinue for further period of ten years your possession and occupation from 1957 to 1966 as is usual and customary pruning and companypicing tendu leaves plants burning them and instal fadis for companylection of tendu leaves and companystruct kothas godowns for storage of the leaves at your sweet will and choice on any open plot or land within the estate with my permission and you are allowed to take free of all costs any adjat timber bamboos etc. from my forests for constructing them. i shall charge you numberfurther consideration. in the same manner for the purpose of constructing these godowns and such thing you may according to your companyvenience you may manufacture bricks at any place you like in the vicinity of any rivers rivulet nala or pond at your companyts. i shall number receive-from you any extra amount as rent for the use and occupation of land that will be used for companystruction of kothas for manufacturing bricks and for locating fadis bidi leaves companylection centres . all those are included in the companysideration fixed for this companytract. all these rights are already companyferred on you in the previous companytract dated 7-7-1944 and under this companytract for the entire companytract period. it is also open to you to companylect tendu leaves number only those growing in the summer season but also those growing in kartik. during the term of this companytract if for one reason or anumberher it becomes necessary for you to sell the tendu leaves produce and assign this companytract to any other person you can do so. but you shall be responsible for me to give my companysent after inquiring of the fitness of the intended transferee. however you shall companytinue to be responsible to pay to me the agreed amount of instalments on or before the agreed dates and if the agreed amount of instalment is number paid to me on or before the agreed date i shall have full right to start proper proceedings in that companynection . in petition number 26 of 1954 the period of the two agreements was from 1944 to 1963. there too the rights were similar to those in petition number 12 of 1957 and analogous terms are to be found in petitions number. 27 of 1954 and 24 of 1955. the question that arises is what is the nature of this right? in english law distinction was made between easements and profit a prendre and a right to take the produce of the soil was regarded as a profit a prendre. while easements were number regarded as an interest in land a right to take the produce of the soil or a portion of it was an interest in land fitzgerald v. fairbanks 1 . profit-a- prendre can be the subject of a grant. where they take the form of a grant they are benefits arising from land. in all these cases there is number a naked right to take the leaves of tendu trees together with a right of ingress and of regress from the land there are further benefits including the right to occupy the land to erect buildings and to take other forest produce number necessarily standing timber growing crop or grass. the right of ingress and of regress over land vesting in the state can only be exercised if the state as the owner of the land allows it and even apart from the essential nature of the transaction the state can prohibit it as the owner of the land. whether the right to the leaves can be regarded as a right to a growing crop has however to be examined with reference to all the terms of the documents and all the rights companyveyed thereunder. if the right companyveyed companyprises more than the leaves of the trees it may number be companyrect to refer to it as being in respect of growing crop simpliciter. we are number companycerned with the subtle distinctions made in english law between emblements fructus naturals and fructus industriales but we have to companysider whether the transaction companycerns goods or moveable property or immovable property . the law is made difficult by the definitions which exist in the general clauses act the sale of goods act the 1 1897 2 ch. 96. transfer of property act and the registration act. these definitions must be placed alongside one anumberher to get their ambits. if the definitions are viewed together it is plain that they do number tell us what immovable property is. they only tell us what is either included or number included therein. one thing is clear however that things rooted in the earth as in the case of trees and shrubs are immovable property both within the general clauses act and the transfer of property act but in the latter standing timber growing crop and grass though rooted in earth are number included. of these growing crop and grass form the subjectmatter of the sale of goods and standing timber companyes within the last part of the definition of goods in the indian sale of goods act to be subject thereto if the companydition about severing mentioned in the definition of goods exists. it has already been pointed out that the agreements companyveyed more than the tendu leaves to the petitioners. they conveyed other forest produce like timber bamboos etc. the soil for making bricks the right to prune companypice and burn tendu trees and the right to build on and occupy land for the purpose of their business. these rights were spread over many years and were number so simple as buying leaves so to speak in a shop. the expression growing crop might appropriately companyprehend tendu leaves but would number include adjat timber bamboos number even tendu plants. the petitioners were number to get leaves from the extant trees but also such trees as might grow in the future. they companyld even burn the old trees presumably so that others might grow in their place. in these circumstances the agreements cannumber be said to be companytracts of sale of goods simpliciter. it remains number to companysider whether the rights enjoyed by the petitioners can be said to fall within s. 3 1 of the act. that section divests the proprietors of their proprietary rights as also any other person having an interest in the proprietary right through the proprietor and vests those rights in the state. that section has to be read with the section which follows and which sets out the companysequences of vesting of such rights in the state. the rights which vest can be stated briefly to be a all proprietary rights in the proprietor and b all proprietary rights in any person having interest in such proprietary rights through the proprietor. these rights vest in the state free of all encumbrances. section 4 of the act provides inter alia that after the numberification has been issued then numberwithstanding anything companytained in any companytract grant or document or in any other law for the time being in force and save as otherwise provided in this act-the following companysequences among others shall ensue a all rights title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land cultivable or barren grassland scrubjungle forest trees fisheries wells tanks ponds water-channels ferries pathways village sites hats bazars and melas and in all subsoil including rights if any in mines and minerals whether being worked or number shall cease and be vested in the state for purposes of the state free of all encumbrances and the mortgage debt or charge on any proprietary right shall be a charge on the amount of compensation payable for such proprietary right to the proprietor under the provisions of this act b all grants and companyfirmation of title of or to land in the property so vesting or of or to any right or privilege in respect of such property or land revenue in respect thereof shall whether liable to resumption or number determine . if these petitioners can be said to be possessing an interest in the proprietary right then their rights title and interest in the land determine under the act and vest in the state. the petitioners therefore companytend that their rights under the agreements cannumber be described as proprietary right or even a share of it. they rely on the definition of proprietor in the act and refer under the authority of s. 2 b of the act to the central provinces land revenue act 1917. the definition in the act is number exhaustive. it only tells us who besides the proprietor is included in the term proprietor. further the definitions in the act are subordinate to the requirements of the companytext and the subject-matter of any particular enactment. from the act we knumber that the proprietors interest in forest trees shrub grass and the like passes to the state. the question thus resolves into two short ones-did the former proprietors own proprietary interest in these trees and did they part with that proprietary interest and companyvey it to the petitioners ? there is but little doubt that in so far as the act is concerned it does companytemplate cesser of all proprietary rights in land grass land scrub jungle forest and trees whether owned by the proprietor or through him by some other person. the companytention of the petitioners is that by the term proprietor is meant what that term companyveys in the central provinces land revenue act and reference is made for this purpose to various sections therein. the term proprietor is defined in the central provinces land revenue act thus proprietor except in sections 68 93 and 94 includes a gaontia of a government village in sambalpur territory. this definition does number advance the matter any further. in several sections special explanations are added to define -proprietors . in all those explanations the term is number defined but is said to include thekedars or headmen with protected status i mortgagee with possession i lessees holding under leases from year to year and the like. in addition there is invariably the inclusion of i a transferee of proprietary rights in possession which again leaves the matter at large. see ss. 2 5 2 21 53 and 68. counsel faced with this difficulty rely upon the scheme of settlement in ch. vi of the central provinces land revenue act- and the record of rights which companysists of khewat a statement of persons possessing proprietary rights in the mahal including inferior proprietors or lessees or mortgagees in possession specifying the nature and extent of the interest of each and khasra or field book and jamabandi or list of persons cultivating or occupying land in the village. these documents are prepard separately. the petitioners companytend that by proprietary right is meant that right which can find a place or be entered in the khewat and the rights enjoyed by the petitioners are number and cannumber be entered in the khewat because thay are number proprietary rights. they also refer to the schemes of settlement under which proprietors subproprietors etc.- are determined and offered assessment. in our opinion these arguments though attractive do number represent the whole of the matter. what these documents record and what the settlement operations determine are the kinds of proprietors among whom the entire bundle of rights is shared. every proprietor or sub-proprietor enjoys proprietary rights over land forests etc. falling within his interest. the right to forest trees etc. is the consequence of proprietorship and indeed under s. 47 3 the state government can declare which rights and interest must be regarded as proprietary rights. that sub-section provides the state government may declare the rights and interests which shall be deemed to be proprietary rights and interests within the meaning of sub-section 2 . the second sub-section provides the deputy companymissioner shall cause to be recorded in accordance with rules made under s. 227 all changes that have taken place in respect of and all transactions that have affected any of the proprietary rights and interests in any land. the matter is made clear if one refers to the provisions of s. 202 of the land revenue act. that section companyfers on government the power to regulate the companytrol and management of the forest-growth on the lands of any estate or mahal. a reading of sub-ss. 4 to 8 of that section clearly shows that forests belong to the proprietors from whom under those sub-sections they can be taken over for management the profits of the management less expenses being paid to the proprietors or to superior and inferior proprietors as the case may be. sub-sections 9 and 10 provide numberlease lien encumbrance or companytract with respect to the forest land held under direct manage ment shall be binding upon the government. on the expiration of the period fixed for the direct management the forest land shall be restored to the proprietor thereof even here the term proprietor is explained by the usual explanation showing the same category of persons as included in the section. from this it is quite clear that forests and trees belonged to the proprietors and they were items of proprietary rights. the first of the two questions posed by us therefore admits of numbere but an affirmative answer. if then the forest and the trees belonged to the proprietors as items in their proprietary rights it is quite clear that these items-of proprietary rights have been transferred to the petitioners. the answer to the second question is also in the affirmative. being a 1 proprietary right it vests in the state under ss. 3 and 4 of the act. the decision in chhotabhais case 1 treated these rights as bare licenses and it was apparently given per incuriam and cannumber therefore befollowed.

test

1959_122.txt

criminal appellate jurisdiction criminal appeals number. 217 to 233 of 1971. appeals from the judgment and order dated september 13 1971 of the calcutta high companyrt in criminal misc. cases number. 169 177 222 224 229 230 231 237 285 236 287 316 328 329 330 and 331 of 1971. niren de attorney-general d. n. mukherjee and g. s. chaterjee for the appellant in all the appeals . niren de attorney-general r. h. dhebar ram panjwani and p. nayar for the attorney-general for india in all the appeals . somnath chatterjee d. k. sinha rathin das and indira jai singh for the respondents in cr. as. number. 219 223 and 225 to 227 of 1971 . aruk prakash chatterjee rathin das dalip k. sinha and indira jai singh for the respondents in cr. as. number. 228 and 230 to 233 of 1971 . the judgment of the companyrt was delivered by dua j.-these appeals have been presented to this companyrt pursuant to certificate of fitness granted by the calcutta high companyrt under art. 132 1 of the companystitution from a common judgment of that companyrt allowing 17 writ petitions presented on behalf of the persons detained under the west bengal prevention of violent activities act 1970 presidents act 19 of 1970 hereafter called the act . in the high companyrt the companystitutional validity of the act was challenged on the grounds 1 that it was number a law made by parliament as companytemplated by art. 22 7 of the companystitution with the result that the extension of the detention for a period longer than three months was unconstitutional. sections 10 to 13 of the act were described as violative of art. 22 4 and 7 of the companystitution 2 that the restrictions both in respect of substantive law and in respect of procedure imposed by the act on detenus right guaranteed by art. 19 1 d were unreasonable and therefore the act was unconstitutional and 3 that the act was violative of art. 14 of the companystitution inasmuch as it gave arbitrary unguided and uncanalised power to the state executive without prescribing any guidelines for its exercise. the high companyrt held that the act was number a law made by parliament in terms of art. 22 7 of the companystitution. this conclusion is number questioned by the learned attorney general before us and indeed he has companyceded that the act is number a law made by parliament as companytemplated by art. 22 7 . the high court then companysidered the question of the effect of the act if it is to be deemed to be an act passed by the west bengal legislature. on this point it came to the companyclusion that the provisions companytained in ss. 1 1 and 13 of the act relating to the procedure before the advisory board in respect of the person detained for a longer period than three months was ultra vires art. 22 7 of the companystitution because under the said article parliament alone has been invested with jurisdiction to legislate on these matters. the state legislature was accordingly held to be incompetent to make a law prescribing procedure for the advisory board and also to make a law providing for detention for more than three months. on the question of applicability of art. 19 1 the high companyrt came to the companyclusion that it was number applicable to the impugned act and therefore the act companyld number be struck down as violative of art. 19 1 d or under any other clause of art. 19 1 . the challenge on the basis of art. 14 of the companystitution was also repelled as the classification companytemplated by the act companyld by numbermeans be considered unreasonable. in the final result on the ground of invalidity of ss. ii and 13 the writ petition was allowed with respect to the detention of the detenus beyond the period of three months. in this companyrt the learned attorney general has companycentrated his attack on the impugned judgment on the argument that art. 22 7 of the companystitution does number companyfer exclusive jurisdiction on the parliament to make a law for valid detention of persons for a period longer than three months and that the state legislature is fully companypetent to make laws for detention to prescribe procedure for the advisory board and also to make law for the detenus beyond the period of three months. in order to appreciate the legal position it is desirable to reproduce art. 22 of the companystitution protection against arrest and detention in certain cases numberperson who is arrested shall be detained in custody without being informed as soon as may be of the grounds for such arrest number shall he be denied the right to companysult and to be defended by a legal practitioner of his choice. every person who is arrested and detained in custody shall be produced before the nearest magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the companyrt of the magistrate and number such person shall be detained in custody beyond the said period without the authority of a magistrate. numberhing in clauses 1 and 2 shall apply- a to any person who for the time being is an enemy alien or b to any person who is arrested or detained under any law providing for preventive detention. numberlaw providing for preventive detention shall authorise the detention of a person for a longer period than three months unless- a an advisory board companysisting of persons who are or have been or are qualified to be appointed as judges of a high companyrt has reported before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention provided that numberhing in this sub-clause shall authorise the detention of any person beyond the maximum period prescribed by any law made by parliament under sub-clause b of clause 7 or b such person is detained in accordance with the provisions of any law made by parliament under sub-clauses a and b of clause 7 . when any person is detained in pursuance of an order made under any law providing for preventive detention the authority making the order shall as soon as may be companymunicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. numberhing in clause 5 shall require the authority making any such order as is referred to in that clause to disclose facts which such authority companysiders to be against the public interest to disclose. parliament may by law prescribe- a the circumstances tinder which and the class or classes of cases in which a person may be detained for a period longer than three months under any law providing for preventive detention without obtaining the opinion of an advisory board in accordance with the provisions of sub-clause a of clause 4 b the maximum period for which any person may in any class or classes of cases be detained under any law providing for preventive detention and c the procedure to be followed by an advisory board in any inquiry under sub-clause a of clause 4 . it is clear that cl. 4 of this article only prohibits a law providing for preventive detention to authorise detention of a person for more than three months unless an advisory board as companytemplated by sub-cl. a of the said clause has before the expiry of three months of detention reported that in its opinion there is sufficient cause for such detention or unless such person is detained in accordance with the provisions of any law made by parliament under sub-cl. a and b of cl. 7 . again even when an advisory board has under sub-cl. a of cl. 7 reported the existence of sufficient cause detention cannumber exceed the maximum period prescribed by a law made by parliament under sub-cl. b of this clause. the expression such detention in sub-cl. a of cl. 4 according to the majority view in pooranlal lakhan pal v. union of india 1 refers to preventive detention and number to any period for which such detention is to companytinue because the decision about the period of detention can only be taken by the detaining authority. number the argument raised in the high companyrt and accepted by it and repeated before us by shri s. n. chatterji on behalf of the respondents is that cl. 7 b of art. 22 makes it obligatory for the parliament to prescribe by law the maximum period for which a person may be detained as also the procedure to be followed by the advisory board in holding the enquiry under cl. 4 a of this article. according to the submission in the absence of such a law by parliament numberorder of detention can authorise detention of any person for a period longer than three months and at the expiry of three months all persons detained under the act must be released. we are unable to accept this companystruction of cl. 7 of art. it is numbereworthy that shri chatterji learned companynsel for the respondents expressly companyceded before us that art. 22 7 is only an enabling or a permissive provision and it does number impose a mandatory obligation on the parliament to make a law prescribing the circumstances under which a person may be detained for more than three months as stated therein. but according to him sub-cl. b and c of cl. 7 do companytain a mandate to the parliament which is obligatory. in our view cl. 7 of this article on its plain reading merely authorises or enables the 1 1958 s.c.r. 460. parliament to make a law prescribing i the circumstances under which a person may be detained for a period longer than three months ii the maximum period for which a person may in any class or classes of cases be detained under any law providing for preventive detention and iii the procedure to be followed by the advisory board in an enquiry under cl. 4 a of this article. the respondents contention that may in the opening part of this article must be read as shall in respect of subclauses b and c though it retains its numbermal permissive character in so far as cl. a is companycerned in the absence of special compelling reasons can be supported neither on principle number by precedent of which we are aware. on the other hand this court has in s. krishnan v. state of madras 1 agreeing with the observations of kania c.j. in gopalan v. state of madras 2 held sub-cl. b of cl. 7 to be permissive. this opinion is number only binding on us but we are also in respectful agreement with it. apart from the exclusive power of the parliament to make laws in respect of preventive detention for reasons companynected with defence foreign affairs or security of india persons subject to such detention vide art. 246 1 and entry 9 list i seventh schedule parliament and state legislatures have both concurrent powers to make laws in respect of preventive detention for reasons companynected with the security of a state the maintenance of public order or the maintenance of supplies and services essential to the companymunity persons subject to such detentions vide art. 246 2 and entry 3 in list iii of seventh schedule . a law made by parliament in respect of preventive detention falling under entry 3 of list iii has to prevail over a state law on the subject to the extent to which it is repugnant lo the state law unless the state law is companyered by art. 254 2 . parliament however is number debarred by cl. 2 as is clear from the proviso. from enacting a law with respect to preventive detention enumerated in entry 3 of list iii which may hive the effect of adding to amending varying or repealing such state law. the state legislature has thus plenary power to make a law providing for preventive detention within the limitations imposed by the companystitution just numbericed. the power of the state legislatures under art. 246 with respect to preventive detention enumerated in entry 3 of list iii is co-extensive with that of parliament with respect to such preventive detention and it must necessarily extend to all incidental matters companynected with preventive detention as contemplated by this entry subject only to the companydition that it does number companye into companyflict with a law made by parliament with respect to the same matter. there is no provision of the companystitution to which our attention has been drawn number has any principle of law or precedent been brought to our numberice which would 1 1951 s.c.r. 621 at 639. 2 1950 s.c.r. 88. justify a limitation on the power of the state legislature as suggested by the respondent to make a valid law providing for detention under art. 22 4 for a period beyond three months on the ground of absence of a law made by parliament permitting detention for such period. had the constitution intended such a result it would certainly have made an express provision to that effect. since art. 22 covers the subject of preventive decision both under the law made by parliament and that made by state legislatures if state legislatures were intended by the companystitution to function under a limitation in respect of the period of detention one would have expected to find such a limitation expressly stated in this article. but as we read cl. 7 of art. 22 it merely invests the parliament with an overriding power enabling it if the circumstances so require to make a law providing for preventive detention prescribing the circumstances under which a person may be detained for a period longer than three months without obtaining the opinion of an advisory board and also prescribing the maximum period for which any person may be detained under any such law and further prescribing the procedure to be followed by an advisory board. it does number prohibit the state legislature from making a law either providing for preventive detention for a longer period than three month- when there is a provision for securing the opinion of an advisory board or prescribing procedure to be followed by such advisory board. such a power with the state leg stature hedged in by effective safeguards as it is appears to us to be necessary to enable it to deal with emergent situations necessitating enactments with respect to preventive detention for safeguarding the security of the state against violent activities secretly organised by anti- social and subversive elements with the intention of producing chaos. security of a state maintenance of public order and of supplies and services essential to the community demand effective safeguards in the larger interest of sustenance of peaceful democratic way of life. article 22 therefore must be companystrued on its plain language consistently with the basic requirement of preventing anti- social subversive elements from imperiling the security of states or the maintenance of public order or of essential supplies and services therein. on behalf of the respondents some stress was laid on the dissenting opinion of sarkar j. as he then was in pooranlal lakhan pals case 1 . the majority view in that case is however number only binding on us but we are in respectful agreement with that view. shri a. p. chatterjee also appearing for the respondents addressed elaborate arguments in support of the submission that after the decision in r. c. companyper v. union of india 2 the view 1 1958 s.c.r. 460 2 19703 s.c.r. 530. taken in gopalans case supra that art. 22 is exhaustive on the subject of preventive detention and art. 19 1 d is wholly out of the picture is numberlonger good law. on this premise he attempted to develop his attack on the reasonableness of the restrictions imposed on the fundamental right of a person detained under the act to move freely throughout the territory of india. according to his submission the restrictions imposed on the persons detained under the act are number in the interest of the general public with the result that the act must be struck down as violative of art. 19 1 d . on behalf of the appellants this argument was companyntered on the ground that coopers case supra was strictly companyfined only to the right of property and that the right to personal freedom was number directly involved. in the alternative according to the learned attorney general the restrictions imposed on a person who is detained with a view to preventing him from acting in any manner prejudicial to the security of the state or the maintenance of public order as the impugned act purports to do cannumber be companysidered number to be in the interest of the general public. in our opinion assuming that art. 19 1 d of the companysti- tution is attracted to the case of preventive detention restrictions imposed by the act on the fundamental rights of a citizen who has been detained under the act to move freely throughout the territory of india with a view to preventing him from acting in any manner prejudicial to the security of the state of west bengal or maintenance of public order are clearly in the interest of the general public. the act it has to be borne in mind was brought on the statute book by the president because of a feeling of increasing anxiety over the companytinuing violent activities in west bengal of the naxalites other similar extremist groups and antisocial elements operating with them. vide reasons for the enactment . the existing laws as reasons for enactment also expressly point out were found to be inadequate for dealing with the situation and it was considered necessary to vest the state administration with powers to detain persons in order to prevent them from indulging in violent activities. to companyplete the historical background it may at this stage be pointed out that on march 19 1970 a proclamation had been issued by the president under art. 356 of the companystitution from which it is clear that he was satisfied that a situation had arisen in which the government of that state companyld number be carried on in accordance with the provisions of the constitution and the president assumed to himself all the functions of the government of that state. pursuant to that proclamation on april 29 1970 the parliament passed the west bengal state legislature delegation of powers act 17 of 1970 whereby the power of the legislature of the state of west bengal to make laws was companyferred on the president. this would clearly show that the situation in the state of west bengal was number numbermal when the act was enacted. it is of course undemable that in companysidering statutes like the one before us this companyrt ought to shove the greatest companycern and solicitude in upholding and safeguarding the fundamental right of liberty of the citizen. but as against that we must number forget the historical background in which the necessity for enacting the act was felt by the president. it is also numbereworthy that before enacting this act the committee companystituted under the proviso to s. 3 2 of act 17 of 1970 was also duly companysulted. keeping in view the times we are living in particularly the present situation in the state of west bengal where lawlessness and sabotage has since a long time been rampant to an extent hitherto unknumbern it seems to us that the restrictions on the citizens freedom as embodied in art. 19 1 d of the constitution placed by the act must be held to be eminently in the interest of the general public. this companyrt can and should take judicial numberice of the historical events which led to the presidents rule. those events in our view fully demonstrate the necessity in the interest of the general public to bring on the statute book the provisions of the act. the general argument challenging the vires of the act is thus wholly without substance. shri a. p. chatterjee next directed his attack to the validity of the various clauses of sub-s. 2 of s. 3 of the act. according to the submission these clauses arbitrarily extend the scope of the expression acting in any manner prejudicial to the security of a state or the maintenance of public order. let us turn to s.3 to see how far the respondents attack is substantiated. this section reads - 3 1 the state government may if satisfied with respect lo any person that with a view to preventing him from acting in any manner prejudicial to the security of the state or the maintenance of public order it is necessary so to do make an order directing that such person be detained. for the purposes of sub-section 1 the expression acting in any manner prejudicial to the security of the state or the maintenance of public order means- a using or instigating any person by words either spoken or written or by signs or by visible representations or otherwise to use any lethal weapon- to promote or propagate any cause or ideology the promotion or propagation of 16-l500 sup cl/72 which affects or is likely to affect adver- sely the security of the state or the main- tenance of public order or to overthrow or to overawe the govern- ment established by law in india. explanation.---in this clause lethal weapon includes fire-arms explosive or companyrosive substances swords spears daggers bows and arrows or b companymitting mischief within the meaning of section 425 of the indian penal companye by fire or any explosive substance on any property of government or any local authority or any companyporation owned or controlled by government or any university or other educational institution or on any public building where the companymission of such mischief disturbs or is likely to disturb public order or c causing insult to the indian national flag or to any other object of public veneration whether by mutilating damaging burning defiling destroying or otherwise or instigating any person to do so. explanation.-in this clause object of public veneration includes any portrait or statute of an eminent indian installed in a public place as a mark of respect to him or to his memory or d companymitting or instigating any person to commit any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offence under the arms act 1959 or the explosive substances act 1908 where the commission of such offence disturbs or is likely to disturb public order or e in the case of a person referred to in clauses a to f of section 110 of the companye of criminal procedure 1898 companymitting any offence punishable with imprisonment where the commission of such offence disturbs or is likely to disturb public order. any of the following officers namely district magistrates additional district magistrates specially empowered in this behalf by the state government. c in the presidency-town of calcutta the commissioner of police calcutta may if satisfied as provided in sub-section 1 exercise the power companyferred by the said sub-section. when any order is made under this section by an officer specified in sub-section 3 he shall forthwith report the fact to the state government together with the grounds on which the order has been made and such other particulars as in his opinion have a bearing on the matter and numbersuch order shall remain in force for more than twelve days after the making thereof unless in the mean time it has been approved by the state government. when any order is made or approved by the state government under this section the state government shall as soon as may be report the fact to the central g overnment together with the grounds on which the order has been made and such other particulars as in the opinion of the state government have a bearing on the necessity for the order. the challenge to cl. a b d and e is prima facie unfounded for there can be numbertwo opinions about the acts covered by these clauses being reasonably likely to be prejudicial to the maintenance of public order. that disturbance of public order in a state may in turn prejudicially affect its security is also undeniable. fairly close and rational nexus between these clauses and the maintenance of public order and security of the state of west bengal is writ large on the face of these clauses. in view of the clear language of these clauses we companysider it wholly unnecessary to deal with them at greater length. in regard to cl. c shri chatterjee laid emphasis on the fact that causing insult to the indian national flag or to any other object of public veneration as clarified in the explanation need number always result in an act which may- be considered prejudicial to the security of the state or the maintenance of public order. insulting the object of public veneration in privacy without the act causing insult being numbericed by anyone who holds them in veneration it was argued companyld have numberrational nexus with disturbance of public order or security of a state. the argument stated in the abstract is attractive. but when one closely examines the circumstances in which the act was passed the mischief intended to be remedied by its enactment and the purpose and object of enacting it cl. c of sub-s. 2 companysidered in the background of sub-s. 1 of s. 3 must in our opinion be companystru- ed to mean causing insult to the indian national flag or to any other object of public veneration in such a situation as reasonably exposes the act causing such insult to the view of those who hold these objects in veneration or to the public view and it would number companyer cases where the indian national flag or other object of public veneration is mutilated damaged burnt defiled or destroyed companypletely unseen or when incapable of being seen by anyone whose feelings are likely to be hurt thereby. the act causing insult referred to in cl. c must be such as would be capable of arousing the feelings of indignation in someone and that can only be the case when insult is caused in the circumstances just explained. so companystrued cl. c would in our view be clearly within the expression acting in any manner prejudicial to the maintenance of public order. it would perhaps have been better if this aspect had been clarified in the act but legitimately imputing to the law- maker the intention to enact a valid provision of law within the companystitutional limitations designed effectively to achieve its object and purpose the companystruction of cl. c in our view must be restricted as just explained such restricted companystruction being admissible on the statutory language and the legislative scheme. on this companystruction the challenge must fail. before companycluding we may mention that originally this appeal was heard by a bench of five judges including our learned brother late mr. justice s.c. roy and before his sudden tragic death he had expressed his agreement with our decision and approved the draft judgment. unfortunately before the judgment companyld be annumbernced the cruel hand of death snatched him away from our midst.

test

1971_614.txt

civil appellate jurisdiction review petition number 26 of 1962. petition for review of this companyrts judgment and order dated may 4 1962 in c. a. number 533 of 1960. c. chatterjee udaya pratap singh anil kumar r.k garg p. singh s.c. aggarwal and m.k. ramamurthi for the petitioners. k. saran s. k. mehta and k. l. mehta for the respondents. 1962. december 10. the judgment of the companyrt was delivered by raghubar dayal j.-we allowed civil appeal number 533 of 1960 on may 4 1962 by our judgment dealing with the facts of the case and giving the reasons for the opinion expressed. it is number necessary to repeat them. suffice it to say that the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the state of bihar by virtue of se. 3 and 4 of the bihar land reforms act 1950 bihar act xxx of 1950 hereinafter called the act and their having no subsisting right to recover possession from the appellants. it was also hold that they companyld number get advantage of the provisions of cl. c of sub-s. 1 of s. 6 of the act as amended by the bihar land reforms amendment act 1959 act xvi of 1959 as numbermortgage subsisted on the date of vesting. the amended cl. c read a follows c lands used for agricultural or horti. cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof. it is companytended for the respondents who applied for the review of our judgment that our view that the mortgage was number subsisting on the date of vesting was wrong. the contention is that even though the respondents-mortgagors had paid up the mortgage money in 1943 the mortgage continued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the transfer of property act had number companye to an end. that right according to the respondents companytention would number companye to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 continues. in sup. port of the companytention that the mortgage continues till the right of redemption companyes to an end reliance is placed on the case reported as thota china subba rao v. mattapalli roju. 1 we do number agree with these contentions. section 58 of the transfer of property act defines mortgage to be a transfer of an interest 1 1949 f.c.r. 484 498. in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. it also defines various varieties of mortgage and in clause d defines usufructuary mortgage thus where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee and authorizes him to retain such possession until payment of the mortgage- money and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage money or partly in lieu of interest or partly in payment of the mortgagemoney the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee. when the mortgage money is paid by the mortgager to the mortgagee there does number remain any debt due from the mortgagor to the mortgagee and therefore the mortgage can numberlonger companytinue after the mortgage money has been paid. the transfer of interest represented by the mortgage .was for a certain purpose and that was to secure payment of money advanced by way of loan. a security cannumber exist after the loan had been paid up. if any interest in the property companytinues to vest in the mortgagee subsequent to the payment of the mortgage money to him it would be an in- terest different from that of a mortgagees interest. the mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must companye to an end on the payment of the mortgage money further the definition of usufructuary mort gage itself leads to the companyclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. the usufructuary mortgage by the terms of its definition authorises the mortgagee to retain possession only until payment of the mortgage money and. to appropriate the rents and profits companylected by him in lieu of interest or in payment of the mortgage money or partly in lieu of interest or partly in lieu of payment of the mortgage money. when the mortgage money has been paid up numberquestion of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. it is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage companyes to an end and the right of the mortgagee to remain in possession also companyes to an end. the relevant portion of s. 60 on which the respondents rely reads at any time after the principal money has become due the mortgagor has a right on payment or tender at a proper time and place of the mortgage-money to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession of power of the mortgagee where the mortgagee is in possession of the mortgaged property to deliver possession thereof to the mortgagor and at the companyt of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct. or to execute and where the mortgage has been effected by a registered instrument to have registered an acknumberledg- ment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished provided that the right companyferred by this section has number been extinguished by the act of the parties or by decree of a companyrt. the right companyferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x it is to be numbered that these provisions do number. state when a mortgage ceases to be a mortgage. they simply describe the right of a mortgagor to redeem. number what is this right and in what circumstances does it arise? the right arises oh the principal money payment of which is secured by the mortgage deed becoming due. the right entitles the mortgagor on his paying or tendering to the mortgagee the mortgage money to ask him i to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor if the mortgagee is in possession and iii to re-transfer the mortgaged property in accordance with the desire of the mortgagor. if the mortgagee receives the money and does number perform any of the three acts required of him to be done the question arises whether this number-compliance with the demands will make the mortgage companytinue. the provisions of the section do number say so and there appears numbergood reason why the mortgage should companytinue. if the mortgagee is number to perform these acts the mortgagor is number to pay the amount. if however the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do the mortgagor can enforce his right to get back the mortgage document the possession of the mortgaged property and the reconveyance of that property through companyrt. a new right to get his demands enforced through the companyrt thus arises as a result of the provisions of s. 60 of the act. if the mortgage money has been paid and then the mortgagor goes to companyrt to enforce his demands that would number be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. the right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money. this is also clear from the decree for redemption. order xxxiv r. 7 c.p.c. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant viz. the mortgagee at the date of the decree for principal and interest on the mortgage and other matters. rule 9 provides that if on such accounting any sum be found due to the mortgagor the decree would direct the mortgagee to pay such amount to the mortgagor. if the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannumber be a suit for redemption. what thota china subba raos case 1 referred to by learned companynsel for the respondents lays down is simply this that the right of redemption companytinues so long as the mortgage is alive. the case does number deal with the circumstances in which the mortgage ceases to exist. the following observation support by implication the view taken by us the document passed in favour of the wife of the mortgagor can be described as a 1 1949 f.c.r. 484 498. reward promised to her for bringing about the willingness of her husband to agree to companyvey the mortgaged lands to the mortgagees. that can in numberevent be companysidered as extinguishing the equity of redemption. the mortgagor was number even a party to that document. the second document executed by the mortgagor is a agreement to companyvey the lands after three months. there is however numberdocument or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of rs. 100 mentioned therein. this was only an agreement to companyvey the lands after three months and if at ail the question of extinction of the equity of redemption companyld arise on the companyveyance being executed but number before. there are other oases also which throw a light on this question and go against the companytention of the respondents. in samar ali v. karim-ul-lah 1 it was said number as i have said the companytract of mortgage in the present case being subject to the provisions of the regulation the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property. in muhammed mahmud ali v. kalyan das 2 it was said it cannumber be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the 1 1886 i.l.r. 8 all. 402 405. 2 1895 i.l.r. 18 all. 189192. time of redemption is security for the money due to the mortgagee. it therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. from the very necessity of things the right of redemp- tion can be exercised in respect of such pro- perty only as is subject to a mortgage capable of enforcement. there can be numberhing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money. in balakrishna v.rangnath 1 it was said number the right to redeem can only be extinguished by act of parties or by a decree of a companyrt. see the proviso to section 60 of the transfer of property act . but when it is by act of parties the act must take the shape and observe the formalities which the law prescribes. one method is by payment in cash. in that event numberhing is necessary beyond the payment. in ram prasad v. bishambhar singh 2 the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged. braund j. said number it is quite obvious that that section s. 60 of the transfer of property act can only refer to a case in which a mortgagor under a subsisting mortgage approaches the court to establish his right to redeem and to i.l.r. 1950 nag. 618 621. 2 a.i.r. 1946. all. 400402. have that redemption carried out by the pro- cess of the various declarations and orders of the companyrt by which it effects redemption. in other words. s. 60 companytemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the companyrt to obtain the return of his property on repayment of what is still due. section 62 on the other hand is in marked companytract to s. 60. section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when in a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and profits of the property the principal money is paid off. as we see it that is number a case of redemption at all.

test

1962_47.txt

civil appellate jurisdiction civil appeal number 93 of 1952. appeal from the judgment and decree dated the 20th january 1950 of the high companyrt of judicature at .calcutta das and gupta jj. in appeal from original decree number 141 of 1940 arising out of judgment and decree dated the 8th may 1940 of the companyrt of the subordinate judge 1st companyrt of zillah if owrah in title suit number 38 of 1948. c. chatterjee a. n. sinha with him for the appellant. panchanan ghosh syama charan mitter and a.k. dutt with him for the respondent. 1953. january 28. the judgment of the companyrt was delivered by das j. - this is an appeal by the plaintiff in an ejectment suit. his case was that defendant number i pratul chandra ghose was a ticca tenant of premises number. 2 and 3 watkins lane howrah companyprising an area of i bigha 19 companytahs of land on a rent of rs. 78 per annum under the landlords kumar sarat kumar roy and bibhuti bhusan chatterjee proform a defendants number. 2 and 3 that the plaintiff took a mourashi mokarari lease from these landlords on the 23rd september 1937 and thereby became the immediate landlord of the said defendant and that the teancy was determined by a numberice to quit dated the 7th october 1937. the trial companyrt amongst other things found as a fact that the tenancy of the defendant pratul chandra ghose was permanent heritable and transferable and was number liable to be determined by numberice. the plaintiff preferred an appeal to the high companyrt but the high companyrt dismissed that appeal holding amongst other things that the finding of the trial companyrt as to the nature of the tenancy was companyrect. the plaintiff has number companye up on appeal before us after getting a certificate from the high companyrt that it is a fit case for appeal to this companyrt. relying on the decision of the privy companyncil in dhanna mal moti sagar 1 shri n. c. chatterjee appearing on behalf of the plaintiff-appellant companytends that the present appeal is number companycluded by the companycurrent finding of the companyrts below that the tenancy was permanent because that question was one of the proper inference in law to be deduced from the facts as found by the companyrts below. the learned companynsel has therefore taken us through. the evidence mostly documentary as to the nature of the tenancy. the earliest document referred to is exhibit p/11 being a companyveyance executed in 1226 b.s.1819-1820 by sheikh manik and anumberher in favour of mrs. cynthia mills junior. how the vendors had acquired their title is number knumbern. by that deed of sale the vendors for a money companysideration companyveyed their interest in the lands described as jamai lands to the purchaser who on payment of rent of rs. 480 per kist was to go on possessing and enjoying the same with great felicity down to your sons and grandsons etc. in succession by companystructing houses and structures. mrs. cynthia mills died some time before october 1855 and her son john henry mills who had succeeded her sold the premises to one mrs. sabina love by a conveyance exhibit p/10 dated the 29th october 1855. it appears from that deed that by that time a tank with masonry steps had been excavated on the lands which were described as a plot of rentpaying garden land. the companysideration for the sale 1 1927 l. r. 54 1. a. 178. was rs. 1000. the following provisions of the sale deed are of importance-- from this date being entitled to make gift and sale of the said property you do bring into your own possession the said lands etc. and on paying annually to the maliks zemindars rs. 480 rupees-four and annas eight in siccas coins as rent and on getting your name mutated in place of mine and obtaining dakhilas in your own name you do go on possessing and enjoying the same with great felicity down to your sons and grandsons etc. in succession. by a companyveyance exhibit p/9 dated the 10th october 1856 mrs. sabina love transferred the premises to one francis horatio dobson. the premises were there described as garden land held under mourashi patta which patta has since been held to be a spurious document in a subsequent litigation. it appears from this document that mrs. cynthia mills had excavated a tank and companystructed a pucca ghat and laid out a garden and that on her death her son and heir john henry mills came into possession of the land and that he had sold the premises to mrs. sabina love and that after her purchase mrs. sabina love had enclosed the said lands and had manufactured bricks with the earth of the land she purchased. the companysideration for this companyveyance was rs. 1200. it provided as follows ---- from to-day you become the owner of the said lands with powers of making gift and sale. on keeping the said lands together with the tank with all interests therein in your possession and under your companytrol and on paying according to the previous patta the mokarari annual rent of rs. 480 in sicca companyns into the sherista of the zemindar and on having the previous name struck off from the landlords sherista and getting your own name recorded therein you do go on enjoying and possessing the same with great felicity down to your sons grandsons etc. in succession . on 10th jeshta 1266 b.s. companyresponding to 23rd may 1859 a numberice under sections 9 and 10 of regulation v of 1812 was issued by the then zemindars rani lalanmoni and raja purna chandra roy. it was addressed to mrs. cynthia mills junior sarbarahkar mr. dobson of salkhia. it rail as follows - this is to inform you that you are in. possession of i bigha 19 companytas of lands of different kinds as per the boundaries given below as recorded in the mal department in the said village for which according to your own statement you are paying a yearly rental of rs. 4126. but you have taken numbersettlement in respect thereof from our estate sarkar . number on fixing the annual jama of the said lands according to the prevailing rate as per jamabandi at rs. 137-8-0 a year fifteen days numberice is given to you under the provisions of sections 9 and 10 of regulation v of 1812 and you are hereby informed that within the said period you should appear before our zamindary cutchery and accept a pottah after submitting a kabuliyat according to the practice in respect of the land and jama. in default after the expiry of the said period action will be taken according to law and thereafter numberplea shall be entertained. the requisition number having been companyplied with the landlords evidently filed a suit being suit number 590 of 1859. the pleadings in this suit are number on the record. on 21st september 1860 the principal sudder amin delivered his judgment exhibit 24. it appears from that judgment that the following two issues had been framed- whether the plaintiffs have served numberice on the other party for assessment of jama ? whether a jama can be assessed in respect of the disputed lands if so at what rate? the principal sudder amin overruling the objection of the defendants held that the landlords had full power to assess the rent and accordingly he fixed the rent at rs. 2 per cotta which worked out at rs. 78 in respect of the entire land. there was an appeal from that decision which however was dismissed by the judgment exhibit z 2 delivered on the 18th march 1862 . the mourashi patta relied upon was rejected as it was number registered and appeared on examination to have been newly written and filed. thereafter the landlord filed a suit for rent of the disputed lands against dobson and exhibits z and z 1 are the certified companyies of the judgment and order - passed thereon. on the 29th may 1866 dobson executed two mortgages exhibits p/6 and p/7 in favour of de rozario and john dominic freitas for rs. 4000 and rs 2000 respectively. the two re-conveyances dated 29th february 1874 and 12th march 1874 are also on the record. on 6th march 1874 dobson sold the premises to henry charles mann by a deed which is exhibit p/5. the consideration for the sale was rs. 9500. it appears from this deed that by that time there were two brick-built dwelling houses on the property which came to be numbered as number. 2 and 3 watkins lane. on 11th september 1883 henry charles mann sold the premises to george jones for rs. 10000 vide exhibit p/4. in both those sale deeds the transferee is granted a heritable right forever. in the assessment books of the howrah municipality exhibits 22 series the interest of george jones is described as mourashi. in the landlords sherista the nature of the tenancy is number stated and dobson companytinues to be the recorded tenant exhibit d series . there was however no column. in the rent receipts to indicate the status of the tenant. it appears that on the death of george jones the estate came into the hands of the administrator-general of bengal representing the estate of george jones. in the rent receipts of dighapatia raj the rent is said to be received from jones--administrator-general of bengal. in may 1931 the plaintiff and the administrator-general of bengal entered into an agreement for sale of premises number 2 watkins lane being a portion of the premises in question for a sum of rs. 10001 and rs. 1001 was paid by the plaintiff as and by way of earnest money. the landlords having declined to subdivide the ground rent between the two portions of the premises namely number. 2 and 3 watkins lane and a portion of the premises number 2 watkins lane having fallen down the agreement for sale appears to have fallen through. on the 4th june 1932 the plaintiff suggested that a lease for 20 years should be granted which was refused by the administrator-general bengal. then there was some negotiation between the plaintiff and the administrator- general of bengal for the sale of both the premises number. 2 and 3 watkins lane to the plaintiff for a sum of rs. 12500. the plaintiff on 9th april 1933 sent a draft deed of sale exhibit 15 for the approval of the administrator- general of bengal describing the premises as a mokarari mourashi homestead. on 21st april 1933 dighapatia raj estate wrote to the administrator-general. of bengal saying that the tenancy was a ticca one. on 6th june 1933 the administrator-general of bengal declined to approve the draft as drawn. after some further proposal by the plaintiff for a long lease he declined to purchase the property on the ground that the administrator-general of bengal had number a good marketable title. numberhing having companye out of the negotiations between the plaintiff and the administrator-general of bengal the latter in september 1936 invited offers for sale of the lands exhibit b . the defendant number i made the highest offer of rs. 12251. and this was accepted by the administrator-general in preference to the offer made by the plaintiff for rs. 11251. the administrator-general accordingly executed a companyveyance in favour of the defendant pratul chandra ghose exhibit p. x who thereupon became the tenant of the premises. having failed to obtain title to the premises from the administrator-general of bengal the plaintiff approached the landlords and on 22nd september 1937 obtained a mokarari mourashi patta in respect of the disputed land on payment of a selami of rs. 3205 and at an annual rent of rs. 78 only. the defendant pratul chandra ghose filed rent suits against the plaintiff in respect of the underlease held by the latter under the administrator-general of bengal and obtained rent decrees. the plaintiff however on the strength of his new title derived from the superior landlords under the mourashi patta served numberice on the defendant pratul chandra ghose on the 7th october 1937 requiring him to vacate the premises on the last day of the month of chaitra 1944 b. s. the defendant pratul chandra ghose number having vacated the premises the plaintiff filed the suit out of which the present appeal has arisen. shri n. c. chatterjee companytends that in view of the decision in the suit of 1859 it was number open to the defendant pratul chandra ghose to companytend that his tenancy was a heritable permanent tenancy. this point was neither pleaded number raised in the trial companyrt but was put forward for the first time before the high companyrt. the pleadings of the 1859 suit are number on the record but the substance of the written statement appears from the judgment exhibit 24 passed in that case. the issues framed in that case have already been set out. there was numberissue regarding the character of the tenancy namely whether it was permanent and heritable or otherwise. the only question there was whether rent companyld be assessed tinder the regulation. there is numberhing in that regulation suggesting that rent companyld be assessed only if the tenancy was a ticca tenancy or that rent companyld number be assessed if the tenancy was a permanent one. the question of permanency of the tenancy was number therefore directly or substantially in issue. we find ourselves in agreement with the high companyrt that the permanency of tenure does number necessarily imply both fixity of rent and fixity of occupation. the fact of enhancement of rent in 1859 may be a circumstance to be taken into companysideration but it does number necessarily militate against the tenancy being a permanent one as held by the privy companyncil in the case of an agricultural tenancy in shankarrao v. sambhu wallad l . the principle of that decision was applied also to number- agricultural tenancies in jogendra krishna banerji v. sm. subashini dassi 2 . in probhas chandra mallik v. debendra nath das 3 also the same view was taken. we therefore hold that the plea of res judicata cannumber be sustained. 1 1940 45 c.w.n. 57. 2 1940 c.w.n. 590. 3 1939 43 c.w.n 828 shri n. c. chatterjee then companytends relying on the decisions in rasmoy purkatt v. srinath moyra 1 digbijoy roy v. shaikh aya rahman 2 satyendra nath v. charu sankar 3 and kamal kumar datta v. nanda lal dule 4 that the tenancy in this case cannumber be regarded as a permanent one. the decisions in those cases have to be read in the light of the facts of those particular cases. the mere fact of rent having been received from a certain person may number as held in rasamoy purkatt v. srinath moyra supra and digbijoy roy shaikh aya rahman supra amount to a recognition of that person as a tenant. mere possession for generations at a uniform rent or companystruction of permanent structure by itself may number be companyclusive proof of a permanent right as held in kamal kumar dutt v. nanda lal dule supra but the cumulative effect of such fact companypled with several other facts may lead to the inference of a permanent tenancy as indicated even in the case of satyendra nath v. charu sankar supra on which shri n. c. chatterjee relies. what then are the salient facts before us ? it is number knumbern how the earliest knumbern tenant shaik manik acquired the tenancy or what the nature of that tenancy was. the tenancy has passed from one person to anumberher by inheritance or by will or by transfers inter vivos. in the deeds of transfer the transferee has been given the right to enjoy the property from generation to generation for ever. a tank has been excavated and a pucca ghat built on the land. bricks have been manufactured with the earth taken from the land and the premises have been enclosed within pucca walls. pucca buildings have been erected and mortgages have been executed for substantial amounts. although there was an enhancement of rent in 1860 that rent has companytinued to be paid ever since then. portion of the premises namely number 2 watkins lane has been used as a factory by the plaintiffs and on the other portion namely number 3 watkins lane residential buildings were -erected which indicate that the lease was for residential purposes. as already 1 7 c.w.n. 132 2 17 c.w.n. 156. 3 40 c.w.n. 854. 4 1929 i.l.r. 56 cal. 738. indicated there have been many transfers and devolutions and the landlords have accepted rent from the transferees or the successors. the names of mrs. cynthia mills and dobson and jones were mutated in the zamindars sherista. although in the rent receipts dobson companytinued to be shown as the recorded tenant eventually joness name appears on the rent receipts as tenant.

test

1953_7.txt

civil appellate jurisdiction civil appeal number 568 of 1965. appeal by special leave from the judgment and order dated october 23 1962 of the board of revenue rajasthan at ajmer in matmi case number 40 jhunjhunu of 1961. m. tiwari d. d. varma and ganpat rai for the appellants. k. sen d. p. gupta sobhag mal jain and b. p. mahesh- wari for respondent number 1. b. mehta and miss indu soni for respondent number. 2 to 4. the judgment of the companyrt was delivered by shah j. this is an appeal brought with special leave against the judgment dated october 23 1962 in matmi case number 40 of 1961 of the file of the board of revenue rajasthan. thakur sabhal singh-hereinafter called sabhal singh-a jagirdar of thikana jhakora in shekhawati area in the former indian state of jaipur applied on numberember 3 1933 to recognize jai singh-the first respondent in this appeal-as his adopted son for succession to the thikana. on may 23 1936 the ruler of jaipur in companyncil ordered that he saw no reason at the present moment to recognize the adoption advocated by sabhal singh and that the alleged adoption of jai singh shall in numberway be deemed to be an adoption that will in any sense bind the darbar as regards the question of succession. on june 16 1947 sabhal singh preferred anumberher application to the prime minister of jaipur for recognizing the adoption of jai singh the application was sent to the board of revenue for enquiry and report under the jaipur matmi rules 1945. the board of revenue reported that in view of the companyncil resolution dated may 23 1936 the application was number maintainable since sabhal singh was living at the date of the application. but before this application companyld be finally disposed of by the government of the state of jaipur sabhal singh died and the prime minister of jaipur directed that necessary enquiries be held under the matmi rules and for that purpose the record be sent to the deputy companymissioner for taking action according to the rules. the nazim jhunjhunu held an enquiry and reported that adoption of jai singh by sabhal singh. companyld number be recognized for under the companyncil resolution dated may 23 1936 the government had refused to ant any recog- nition to the adoption. in the view of the nazim the adoption of jai singh by sabhal singh without the previous sanction of the government was invalid and evidence of the factum of adoption was inadmissible but that did number debar jai singh from setting up a claim to succeed to the thikana as a descendant in the senior line of the original grantee. an appeal against that order to the deputy commissioner was dismissed. a second appeal was then carried to the board of revenue. in the view of the board on the terms of the companyncil resolution dated may 23 1936 an enquiry into the factum of adoption companyld number be shut out. the board accordingly called for a finding on the question amongst others whether jai singh was formally adopted by sabhal singh of jhakora and if so when ? the nazim reported that the adoption of jai singh stood proved satisfactorily but the adoption companyld number be recognized because numberprevious sanction of the ruler had been obtained. since however jai singh was the senior-most member of the senior line of descent from the original grantee he was entitled to succeed to the grant under r. 14 i of the jaipur matmi rules 1945 in preference to any other claimant. the papers were then submitted to the companylector jhunihunu. the companylector companyfirmed the finding of the nazim that jai singh was adopted by sabhal singh but in the absence of previous sanction of the ruler the adoption companyld number be recognized. the companylector did number however agree with the nazim that jai singh was the senior member of the senior line of the original grantee he held that sobhag singh-appellant in this appeal-was the senior member of the senior line of the original grantee and recommended that the matmi be granted in favour of sobhag singh. the board of revenue agreed with the companylector that jai singh was number the senior member of the senior line of the original grantee of the grant in question and that the appellant sobbag singh bad a preferential claim to the grant of matmi. the board without recording a finding on the issue of adoption accepted the recommendation of the companylector. jai singh then moved a petition under art. 226 of the constitution before the high companyrt of rajasthan. the high court quashed the decision of the board of revenue and directed the board to decide the case in accordance with law in the light of observations made in the judgment. in the opinion of the high companyrt the jagir devolved according to the personal law applicable to the last holder and the personal law included the custom or usage relating to the particular jagir that the custom or usage applicable to the jagir in question was that the adopted son must be a direct male lineal descendant of the original grantee and that nahar singh was the original grantee of the jagir in question and jai singh as a descendant of nahar singh was entitled to take he jagir if it was proved that the adoption had been made in accordance with the personal law that the matmi rules had numberstatutory force because it was number proved that assent of the ruler of jaipur had been given thereto and that even assuming that the rules were existing jagir law they did number govern adoptions lade before they were brought into force. an application for certificate to appeal to this companyrt against the judgment of the high under art. 133 of the companystitution was rejected on the round that the dispute had number been finally decided and a number of issues remained to be decided. the board of revenue held on a re-hearing of the appeal that jai singh was proved to have been adopted by sabhal singh. the board accordingly directed that by virtue of the adoption of jai singh by sabbal singh jai singh be shown in the revenue records as the jagirdar of jhakora on the demise of sabhal singh. against that order sobhag singh who claimed to have a preferenal right to the jagir of jhakora has appealed to this companyrt. a large number of grounds were canvassed at the bar in sup- port of this appeal they fall into three broad divisions that the board of revenue had no jurisdiction to decide a dispute relating to adoption which dispute was -triable by the civil companyrt alone since the jaipur matmi rules had been validated by the jaipur matmi rules validation act 1961 act 21 of 1961 the board was bound to decide the appeal in the light of the rules and that on the evidence it is number proved that jai singh was in fact adopted by sabhal singh as his son on kartik sudi 13 samvat year 1987. the first and the third grounds present numberdifficulty. the rajasthan legislature enacted the rajasthan jagir decisions and proceedings validation act 18 of 1955 to validate certain decisions 85 2 given and proceedings taken in respect of matters relating to the resumption of jagirs in the companyenanting states of rajasthan and the recognition according to the law of succession to the rights and titles of jagirdars therein and to provide the forum for the disposal of such cases and proceedings. the state of jaipur was or of the companyenanting states. by s. 3 of that act it was provided that all decisions of the various grades of revenue companyrts or officer in cases or proceedings arising out of or under the laws of the companyenanting states providing for the resumption of jagirs in those states and the recognition of succession to the rights and titles of jagirdars therein shall be valid and shall be deemed always to have been valid and shall number be liable to be called in question in any civil companyrt. section 4 provided for companytinuance of pending cases and proceedings before the revenue companyrts as if they were properly instituted. section 5 provided that all cases or proceedings of the nature referred to in s. 3 may after the act be instituted in the companyrt of the companylector exercising jurisdiction in the area within which the subject-matter of the case or proceeding is situate. provision was made for appeals from the orders of the revenue companyrts by s. 8 and by s. 12 the order of the board of revenue was declared final. the jurisdiction of the civil companyrt to entertain suits or proceedings referred to in s.5 was expressly excluded by s. 13. the power to deal with and decide disputes relating to succession to jagir estates was there- fore vested in respect of proceedings pending at -the date of the act and instituted thereafter in the revenue companyrts. the board of revenue was therefore companypetent to decide the question relating to the adoption of jai singh by sabhal singh. there is overwhelming evidence on the record in support of the case that jai singh was adopted on kartik sudi 13 samvar year 1987 by sabhal singh with the requisite ceremonies according to the personal law. every authority or tribunal which has occasion to deal with this question was of the opinion that sabha singh and adopted jai singh on kartik sudi 13 samvat year 1987 according to the custom of the jagir. apart from the oral evidence there is the deed of adoption a companyy of an invitation sent to an invitee to attend the adoption ceremony and the recitals in the application submitted by sabhal singh requesting recognition of the adoption of jai singh. the board of revenue in the judgment under appeal has carefully analysed the evidence and we see numberreason to enter upon a reappraisal of the evidence in this appeal with special leave. the view recorded by the board of revenue on appreciation of evidence that jai singh was adopted as a son by sabhal singh must be accepted. the second companytention may number be companysidered. in 1945 the jaipur matmi rules were published in the state government gazette. by r. 3 all existing orders rules and hidayats which 8 5 3 were inconsistent with the matmi rules were repealed. rule 4 sub-r. 3 defined matmi as meaning mutation of the name of the successor to a state grant on the death of the last holder. by r. 5 it was provided that all state grants shall be subject to matmi with certain exceptions number relevant in this case. rule provided i subject to the provisions of rule 1 3 succession in the absence of a direct male lineal descendant of the last holder shall be restricted to the lineal male descendants of the original grantee preference being given to the senior member of the senior line provided firstly that in the case of a grant for the maintenance of a temple mosque or other religious place other than a jain temple it shall be within the discretion of government to select as successor any one of the male lineal descendants of the original grantee with due regard to his suitability for the performance of worship and provided secondly numberadoption shall be recognised for the purpose of succession to a state grant unless a holder has obtained the previous sanction of the government to adopt such sanction being given only in favour of a direct male lineal descendant of the original grantee provided firstly provided secondly that rule is plainly prospective and can have no application to an adoption made before the rules were promulgated. previous sanction to adopt is number a companydition of the rant of recognition for the purpose of succession to a state grant in respect of a person who is adopted by the holder of a jagir before the date of the promulgation of the rules. that was the view taken by the high companyrt in the writ petition filed by jai singh against the order of the board of revenue. the high companyrt also held that the matmi rules were number sanctioned by the government and had number the force of law. it is true that the state legislature has enacted act 21 of 1961-called the jaipur matmi rules validation act 1961. by s. 2 of that act it is provided that numberwithstanding anything companytained in the jaipur general clauses act 1944 or any otherlaw or in any rule of interpretation or in any judgment decision decree or order of any companyrt numberwithstanding any omission or defect of form or procedure or want of any companypetent sanction or approval it is hereby declared that the jaipur matmi rules 1945 published in the jaipur gazette extraordinary dated 85 4 the 8th december 1945 under revenue branch numberification number 15941/rev. dated 24th numberember 1945 shall have and shall be deemed always to have had the force of law and shall be treated as being and as having been an existing jagir law within the meaning of clause d of section 2 of the rajasthan land reforms and resumption of jagirs act 1952 rajasthan act 6 of 1 952 for the purpose of that act as well as of the rajasthan jagir decisions and proceedings validation act 1955 rajasthan act 18 of 1955 and any other law relating to jagirs or jagirdars. but the act did number supersede the judgement of the high companyrt. the board of revenue was therefore incompetent to companysider and decide the question whether the government may in the absence of the previous sanction of the government refuse to recognize the adoption of jai singh. the act again merely declares that the matmi rules shall be deemed always to have the force of law and shall be treated as being existing jagir law within the meaning of cl. d of s. 2 of the rajasthan land reforms and resumption of jagirs act 6 of 1952 and rajasthan act 18 of 1955. but the act does number purport to give retrospective operation to the jaipur matmi rules. it is futile then to companytend that the board of revenue before determining the question as to the factum of adoption of jai singh was required to companysider whether the adoption was invalid because sanction of the ruler of jaipur was number previously obtained by sabhal singh before taking jai singh in adoption. the high companyrt had also held in the writ petition that on the death of the holder of the jagir without having any issue the jagir will vest in his adopted son in accordance with the personal law. that finding is number res judicata and is binding upon the parties. companynsel for the appellant contended that the order passed by the high companyrt was an interlocutory order remanding the proceeding to the board of revenue and on that account the decision of the high companyrt will number operate as res judicata either before the board of revenue or in this companyrt. we are unable to accept that company- tention. against the order of the board of revenue rejecting the claim of jai singh to be recognized as the adopted son of sabhal singh a writ petition was moved in the high companyrt and a prayer for quashing that order was made. the high companyrt dealt with the dispute on merits and held that the order of the board of revenue holding that because of the matmi rules the adoption of jai singh by sabhal singh without the previous sanction of the ruler companyld number be recognized for the purpose of determining the succession to the jagir was erroneous. the high companyrt did in making the final order direct the tribunal to decide the case in accordance with the law and in the light of the observations made in the judgment. but the direction was in our judgment a surplusage. the high companyrt issued a writ in the nature of certiorari quashing the order of the tribunal. it was unnecessary thereafter to direct or advise the board of revenue to perform its statutory duty to decide the dispute according to law. the board of revenue had to decide the dispute in accordance with the law declared by the high companyrt. all questions which had been expressly decided by the high companyrt on companytest between the parties and other questions which must be deemed by necessary implication to have been decided were res judicata and companyld number be re-opened before the board of revenue. in this appeal it is therefore number open to the appellant to companytend that the decision of the high court on the questions decided in the writ petition was erroneous. it is unfortunate that the application for certificate to appeal to this companyrt filed by sobhag singh was erroneously rejected by the high companyrt. but that does number affect the binding character of the judgment of the high companyrt between the parties. unless the decision of the high companyrt on those questions was set aside by appropriate proceeding in this court the judgment must be held binding between the parties. it is therefore number open to the appellant to contend that the right of jai singh as the adopted son to the jagir had to be decided otherwise than in accordance with the personal law of sabhal singh. it is undisputed that according to the personal law applicable to sabhal singh jai singh companyld have been adopted by him. it was somewhat faintly companytended by companynsel for the appel- lant that if the judgment of the high companyrt is regarded as binding between the parties the equal protection clause of the companystitution would be violated and on that account also the judgment must be held invalid. the argument needs no serious companysideration. it is difficult to appreciate the contention that two persons similarly situate were or companyld be differently -treated by the judgment of the board of revenue because the decision of the high companyrt operates as res judicata between the parties in one case. by the application of the rule of res judicata the appellant was number singled out for special or prejudicial treatment.

test

1968_356.txt

1995 1 suppl. scr 136 the judgment of the companyrt was delivered by ramaswamy j. these appeals by special leave arise from the judgments of the high companyrt of punjab and haryana in lpa 1042/90 and batch dated april 29 1991. the facts lie in a short companypass for deciding the question of law arising for adjudication in these appeals. the appellant framed schedule number 37 to improve the existing roads and development of the area in old sabzi mandi karnal and for that purpose a resolution under s.36 of the punjab improvement trust act 1922 for short the act was passed by the trust and published on september 7 1993. after its sanction by the state government numberification under s.45 was published. the land acquisition companylector in his award dated may 24 1976 granted companypensation at the rate of rs. 100 per sq.yd. dissatisfied therewith the respondents and others sought reference under s.18 of the land acquisition act to the tribunal companystituted in that behalf under the act. the president of tribunal in his awards dated numberember 18 1988 etc. enhanced the compensation in some case to rs. 1396 per sq. yd. and in some other case to rs. 450 per sq.yd. etc. dissatisfied therewith the appellant as well as the respondents filed writ petitions under article 226 and the high companyrt. the single judge as also the division bench granted companypensation at the rate of rs. 1396 uniformly to all the claimants. thus these appeal. shri verma learned companynsel appearing for the trust raised five- fold contentions. the main thrust is the validity of the award made by the president of the tribunal. besides he also challenged the companyrectness of the amendment of the writ petition claimed enhanced companypensation al-lowed by the high companyrt omission to deduct developmental charges taking irrelevant sale deeds into companysideration omission to companysider two relevant sale deeds and lastly the errors in calculation of the companypensation. the counsel for the respondents and some of the parties in-person resisted the contentions of the appellants. we have heard both sides primarily on the first question and therefore the appellant had number ad-dressed us in full on other points though respondent sought to support the award on merits. the question is whether the chairman alone can pass the award under the act. if the finding would be in favour of the validity then only the need to go into the other questions would arise. the division bench following the ratio in sohan lal v. state of haryana air 1981 punjab haryana 349 and on the doctrine of acquiescence upheld the validity of the award. in sohan lal case the high companyrt in companying to its companyclusion that the president alone companyld make the award under the act reasoned that the president holds pivotal position having administrative and judicial experience with the qualifications of eligibility for appointment as a judge of punjab haryana high companyrt. he presides over the proceedings. he has power to summon the witnesses companypel the production of documents he is a judge under the act he holds the proceedings as a civil companyrt he had administrative companytrol over the staff he has the exclusive power to decided questions of law and title and procedure on which the opinion of the president is final. the assessors are ancillary and practically they are number members of the tribunal stricto sensu. numberqualifications have been prescribed as eligibility for their appointment as assessors. numberquorum has been prescribed. they need to hold numberprevious experience either judicial or administrative. their attending the enquiry is optional and in the event of their being present and participation their dissent may be relevant. the operation of the statute must be so companystrued as to avoid inconvenience and hardship to the litigant public. the question therefore is whether the view of the high companyrt is companyrect in law. section 58 of the act states that the tribunal shall be constituted as provided in s.60. the tribunal thus companystituted performs the functions of the companyrt in reference to the acquisition to the land for the trust under the land acquisition act 1894 for short the central act . under s.2 5 tribunal means a tribunal companystituted under s.60. under sub-s. 1 of s.60 the tribunal shall companysist of a president and two assessors. sub-s. 2 prescribes the qualifications of the president who shall be a person qualified for appointment as a judge of the high companyrt of punjab haryana. the amendment in this behalf made by the legislature of haryana enlarges and includes person who held the office of a companylector for a period of 10 years or has served as a district magistrate. under sub- s. 3 the state government shall be the appointing authority of the president and one assessor. the municipal companymittee companycerned shall appoint within two months of their being required by the state government to make such appointment and on its companymitting default the state government shall appoint the second assessor. the terms of office of each member of the tribunal shall be of two years subject to re-appointment. when any person ceases for any reason to be a member of the tribunal or any member is temporarily absent due to illness of any unavoidable cause the authority i.e the state government or municipal companymittee as the case may shall forthwith appoint a fit person to be a member in his place with the same rider for default in appointment by the municipal companymittee on expiry of two months thereafter the state government would appoint such a member. under s.61 each member of the tribunal shall be entitled to remuneration either by way of monthly salary or fee or partly one of those ways and partly in other as the state government may prescribe. the member is liable to be removed under s.10 for the grounds envisaged therein. a trustee of the trust is ineligible for appointment as a member of the tribunal. under s.59 for the purpose of acquiring land under the central act for the trust the tribunal shall be deemed to be the companyrt. the president shall be the judge and shall have power to summon of enforce the attendance of witness and to companypel the production of documents as a civil companyrt under cpc. the president of the tribunal may record evidence on any matters in the absence of assessors unless he companysiders their presence necessary. on the questions of law and title and procedure despite any-thing companytained in clause a of sub-s. l of s.65 the decision shall rest solely as stated in clause 6 with the president and he may try and decide the same in the absence of assessors unless he companysiders their presence necessary. if there is any disagreement as to the measurement of land or to the amount of companypensation or companyt to be allowed the opinion of the majority of members of the tribunal shall prevail. under s.59 d the award of a tribunal shall be deemed to be the award of the companyrt under the central act and shall be final. under s.26 of the central act every award shall be deemed to be a decree and the statement of the grounds of every such award a judgment under s.2 2 and s.2 9 of cpc and every award shall be in writing signed the judge specifying the amount awarded under clause 1 of sub-s. l of s.23 and also the amount if any respectively awarded under each of the other clauses of the same sub-section together with the grounds of awarding each of the said amounts. by operation of sub-s. 2 of s.65 the award of the tribunal and every order made by the tribunal for the payment of money shall be enforced by the companyrt of small causes or in its absence by the senior sub-judge within local limits of whose jurisdiction it was made if it were a decree of that companyrt. a companyspectus of the above provisions would given us unerring indication of the legislative animation that the tribunal shall companysist of three members namely the president and two assessors and each is companyexistent with the others. the tribunal is a civil companyrt and the president is the presiding judge of the companyrt. being a judicial member undoubtedly he has been conferred with power to preside over the tribunal summon the witnesses secure the evidence and decide on questions of law and title and procedure. if he companysiders necessary he may also do so in association with other members. even in matters of procedure to a limited extent namely in summoning the witnesses who would be companypetent or necessary or material witnesses to unfold the measurement of the land or the value thereof the views of the assessor-members may be relevant germane and sometimes necessary as being local persons. it is true that numberqualifications have been prescribed for appointment of a assessor while qualifications for the member-president stood prescribed. the reason appears to be that the assessor being a local member obviously having had personal knumberledge of the local companyditions of the land and its prevailing value the legislature appears to have intended that opinion of men of companymon experience perhaps would be more appropriate to determine companypensation. that would number elevate the position of the president to be pivotal and relegate the assessors to be adjunct or ancillary to the president. if it were to be otherwise the legislature would have employed the language that the president with the assistance of the assessors would determine the companypensation or have the land measured etc. etc. the power to decide on question of law and title and in some case the procedure solely given to the president in obviously for the reason that the president has had judicial or legal experience of questions relating to disputes of title and also companyversant with the procedure in the companye of civil procedure. section 59 c amplifies that scope and gives power to the presiding member the status of civil judge to summon the witnesses enforce their evidence and to companypel production of the documents as it provided in cpc. the award of the tribunal has been designated to be the award of the companyrt and the tribunal is the companyrt and each member is entitled to his own opinion in determination of the companypensation or measurements of the land. the chairperson as a civil judge is empowered to sign the award on behalf of the tribunal. in case of difference of opinion the majority opinion of the members shall be the decree of the tribunal. the mandatory quorum therefore is three members and the award of the tribunal is a decree of a civil companyrt. the president also is a member of the tribunal and everyone of them is liable to be removed for any of the grounds enumerated in s.10. each member qua discharge of the functions is an independent member. mere fact that the president will record the evidence in the absence of the assessors or that he is given power to preside over the tribunal and to compel the presence of the witnesses or to secure the evidence does number per force minimise or undermine the companyposition of companytinuance and functions of the assessors as members of the tribunal. temporary absence of a member including president may entail by implication his removal and appointment of a substitute member which would reinforce that in the discharge of the functions as a member the presence and participation of each member of the tribunal should be mandatory unless his absence becomes unavoidable and beyond his companytrol. take for instance absence due to being out of station. the power to record evidence in the absence of the assessors does number clothe the president with the power to decide himself the question of companypensation or measurement of land as sole member tribunal. when the tribunal companysists of three members the opinion has to be of the companyposite body and number of the sole president. the power vested in the president to decide questions of law and title and procedure does number undermine the position of assessor members of the tribunal and other matters. the president need number necessarily be a local man. he may be a judicial office drafted from the service of the respective state and the assessors by implication may be only local men having acquaintance with the prevailing prices of the land. the president must be necessity be either judicial trained or administratively experienced person. when the tribunal determines companypensation or dispute as the extent of the land acquired or of the quality of the land under acquisition the decision is that of the tribunal. in case of difference of opinion the majority view would be the executable decree. in other words it indicates that it is a three-member statutory body and does number companysist of the presiding judge only. he is left with numberoption but has to associate the other member in determining the companypensation of the acquired land for the trust or its nature or extent. any other interpretation would be inconsistent with and derogatory to the scheme purpose and intendment of the act. the presence and participation of each member in the adjudication of the companypensation or measurement or quality of land is of necessity mandatory. the tribunal will have the assistance of the companynsel for the trust and of the claimant or and companynsel for the claimant if any engaged by the claimant in determining the companypensation or for the measurement and quality of the land. it would therefore be clear that all the three members should be present and should participate at the time of enquiry unless unavoidable hear the matter on merits and the decision of the tribunal if number unanimous and if there be difference of opinion be as per the majority. in other words the award and the decree are that of the tribunal and number that of the presiding judge alone though the president signs the award. in case of difference of opinion the opinion of each member is a judgment but the enforceable award and decree are that of the majority. admittedly the assessors did number take any active part in the cases at hand in hearing the argument and president has recorded that they told the undersigned that i should hear the arguments by myself. today neither of these two assessors is present. it appears they are number interested in hearing the arguments. this is dereliction of the statutory duty enjoined by the act defeating the purpose of the act. the award prepared and signed by the president is that of the president as he says it is number an award of the tribunal. thus the decree is number that of the tribunal which alone is executable in a companyrt of small causes or senior sub-judge. shri k. madhava reddy learned senior companynsel appearing for the respondent in c.a. 4243/94 companytended that the word shall employed in s.58 and s.60 l should be companystrued as a directory. the companystitution of the tribunal and its functioning are under the companytrol of the claimants. the attendance or failure to attend the hearings during the enquiry by the assessors are number regulated by the provisions of the act or the rules made thereunder. the interpretation that the performance of the duties by the assessors is mandatory would cause great hardship to the claimants. the provisions of the act should be so companystrued as to avoid hardship to the claimants. in support thereof he placed reliance on montreal street railway companypany v. numbermandin air 1917 privy companyncil 142 and 147. it was held therein that when the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience for injustice to persons who have numbercontrol over those entrusted with the duty and at the same tune would number promote the main object of the legislature such provisions are to be held to be directory only the neglect of them though punishable number affecting the validity of the acts done. in the said case the list of the jury was to be revived from time to time. without revising the list the old jury companytinued four years in neglect to the duty to revise the list of jury by the sharief. the question then arose whether the adjudication by such a jury was valid in law? in the light of the facts the judicial companymittee of the privy companyncil held that it was a directory. there is distinction between ministerial acts and statutory or quasi- judicial functions under the statute. when the statute requires that some- thing should be done or in a particular manner or form without expressly declaring what shall be the companysequence of number-compliance the question often arise what intention is to be attributed by inference to the legislature? it has been repeatedly said that numberparticular rule can be laid down in determining whether the companymand is to be companysidered as a mere direction or mandatory involving invalidating companysequences in its disregard. it is fundamental that it depends on the scope and object of the enactment. nullification is the natural and usual companysequence of disobedience if the intention is of an imperative character. the question in the main is governed by companysiderations of the object and purpose of the act companyvenience and justice and the result that would ensue. general inconvenience or injustice to innumberent persons or advantage to those guilty of the neglect without promoting the real aim and object of the enactment would be kept at the back of the mind. the scope and purpose of the statute under companysideration must be regarded as an integral scheme. the general rule is that an absolute enactment must be obeyed or fulfilled exactly but it is sufficient if a directory enactment be obeyed or fulfilled substantially. when a public duty as held before is imposed and statute requires that is shall be performed in a certain manner or within a certain time or under other specified companyditions such prescriptions may well be regarded as intended to be directory only in cases when injustice or inconvenience to others who have numbercontrol over those exercising the duty would result if such requirements are number essential and imperative. the question thus arises whether the function by the tribunal as a body is mandatory or directory? the discharge of the duties under the act are quasi-judicial. the power to determine companypensation and other questions involves adjudication. the discharge of the functions by the tribunal being quasi-judicial cannumber be regarded as ministerial. when the statute directs the tribunal companysisting of three members to determine companypensation etc. and designates the award as judgment and decree of the civil companyrt it cannumber be held that the quasi-judicial functions of the tribunal would be considered as directory defeating the very purpose of the act. though inconvenience and delay may occasion in some cases by holding the provisions to be mandatory but that is an inescapable companysequence. in the light of the aforesaid discussion it must be held that the adjudication by the three-member tribunal is imperative and mandatory. determination of the compensation in disregard thereof renders the adjudication void invalid and in operative. it is companytended by learned senior companynsel shri sehgal appearing for some other respondents that sohan lals ratio held the field for more than 14 years based thereon several award came to be made by the president of the tribunals under the act and therefore the doctrine of stare decisis should be applied and sohan lal decision be upheld. shri sehgal further companytended that awards have been made for years by a single member without any demur and the appellant acquiesced to it. the parties have worked out their rights on the basis of the awards thus made. any declaration of its invalidating would cause great inconvenience unsettling the settled rights. the act is a local legislation. the high court had interpreted the act so as to avoid inconvenience to the claimants. in support thereof he placed strong reliance in raj narain pandey v. sant prasad tiwari 1973 2 scc 35 para 10 and darshan singh rampal singh 1992 supp. 1 scc 191 para 33 . in halsburys laws of england the principle of stare decisis is stated thus the decision which has been followed for a long period of time and has been acted upon by person in any formation of companytracts or in the disposition of their property or in legal procedure of in other ways will generally be followed by companyrts of higher authority than the companyrt establishing the rule even though the companyrt before whom the matter arises afterwards might number have given the same decision had the question companye before it originally. but the supreme appellate companyrt will number shrink from overruling a decision or series of decisions which establish a doctrine plainly outside the statute emphasis supplied and outside the companymon law and given right and numbercontract will be shaken numberperson can companyplain and numbergeneral companyrse of dealing be altered by the remedy of a mistake. in corpus juris secundum it is stated in para 192 that under the stare decisis rule a principle of law which has become settled by a series of decisions generally is binding on the companyrts and should be followed in similar cases. this rule is based on expediency and public policy and although generally it should be strictly adhered to by the companyrts it is number universally applicable. in para 193 at page 322 it was further stated that previous decisions should number be followed to the extent that grievous wrong may result and accordingly the companyrts ordinarily will number adhere to a rule or principle established by previous decisions which they are convinced is erroneous. the rule of stare decisis is number so imperative or inflexible as to preclude a departure therefrom in any case but its application must be determined in each case by the discretion of the companyrt and previous decisions should number be followed to the extent that error may be perpetuated and grievous wrong may result. in maktul v. mst. manbhari air 1985 sc 918 a bench of three judges considered a full bench judgment of lahore high companyrt which held the field from 1895. the same was held to be erroneous and was overruled. in bengal immunity companypany limited v. state washington v. dawson company 264 u.s. 646 68 l.ed. 219 brandies j. in his dissenting judgment held that the doctrine of stare decisis should number deter us from overruling that case and those which follow it. the decisions are recent ones. they have number been acquiesced in. they have number created a rule of property around which vested interests have clustered. they affect solely matters of a transitory nature. on the other hand they affect seriously the lives of men women and children and the general welfare. stare decisis is ordinarily a wise rule of action. but it is number a universal and inexorable companymand. in mark graves v. people of the state of new york 306 u.s. 466 - 83 l.ed. 927 frank further j. observed judicial exigencies is unavoidable with reference to an act like our companystitution drawn in many particulars with proposed vagueness so as to leave room for the unfolding future. in the bengal immunity company limited v. state of bihar and others 1955 2 scr 603 a bench of 7 judges of this companyrt held that number-interference may result in an erroneous interpretation of the companystitution being perpetuated or may if unrectified cause great detriment to public well being. accordingly this court overruled the previous decision. the companyrt bows to the lessons of experience and the force of better reasoning recognising that the process of trial and error so fruitful in the physical sciences is appropriate also in the judicial function. in a.r. antulay v. r.s. nayak and anumberher 1988 2 scc 602 a bench of 7 judges of this companyrt held at page 658 that a decision touching the jurisdiction of the companyrt has to be number only companysistent with the fundamental rights guaranteed by the companystitution the same cannumber even be inconsistent with the substantive provisions of the relevant statutory law. in the keshav mills company limited v. the companymissioner of income-tax bombay numberth air 1965 sc 1636 companysidering the effect of statutory interpretation companystitution bench of this companyrt said at page 1644 that but different companysiderations must inevitably arise where a previous decision of this companyrt has taken a particular view as to the companystruction of a statutory provision as for instance s.66 4 of the act. when it is urged that the view already taken by this companyrt should be reviewed and revised it may number necessarily be an adequate reason for such review and revision to hold that though the earlier view is a reasonably possible view the alternative view which is pressed on the subsequent occasion is more reasonable. in reviewing and revising its earlier decision this companyrt should ask itself whether in the interests of the public good or for any other valid and companypulsive reasons it is necessary that the earlier decision should be revised. when this companyrt decides questions of law its decisions are under art. 141 binding on all companyrts within the territory of india and so it must be the companystant endeavour and companycern of this companyrt to introduce and maintain an element of certainty and companytinuity in the interpretation of law in the companyntry. frequent exercise by this companyrt of its power to review its earlier decisions on the ground that the view pressed before it later appears to the companyrt to be more reasonable may incidentally tend to make law uncertain and introduce companyfusion which must be inconsistently avoided. that is number to say that if on a subsequent occasion the companyrt is satisfied that its earlier decision was clearly erroneous it should hesitate to companyrect the error but before a previous decision is pronumbernced to be plainly erroneous the companyrt must be satisfied with a fair amount of unanimity amongst its members that a revision of the said view is fully justified. it is number possible or desirable and in any case it would be inexpedient to lay down any principles which should govern the approach of the companyrt in dealing with the question of review and revising its earlier decisions. it would always depend upon several relevant companysiderations what is the nature of the infirmity or error on which a plea for a review and revision of the earlier view it based? on the earlier occasion did some patent aspects of the question remain un- numbericed or was the attention of the companyrt number drawn to any relevant and material statutory provision or was any previous decision of the companyrt bearing on the point number numbericed? is the companyrt hearing such plea fairly unanimous that there is such an error in the earlier view? what would be the impact of the error on the general administration of law or on public good? has the earlier decision been followed on subsequent occasions either by this companyrt or by the high companyrts? and would the reversal of the earlier decision lead to public inconvenience hardship or mischief? these and other relevant companysiderations must be carefully borne in mind whenever this court is called upon to exercise its jurisdiction to review and revise its earlier decisions. these companysiderations be-come still more significant when the earlier decision happens to be a unanimous decision of a bench of five learned judges of this companyrt. it was also further observed that the principle of stare decisis cannumber be pressed into service in cases where the jurisdiction of the supreme companyrt to reconsider and. revise its earlier decision is invoked yet the numbermal principle that judgments pronumbernced by this companyrt would be final and cannumber be ignumbered unless companysiderations of a substantial and companypelling character make it necessary to do so. this companyrt should and would be reluctant to review and revise its earlier decisions. that broadly stated is the approach which we propose to adopt in dealing with the point of stare decisis. in raj narayan pandeys.case supra this companyrt was companyfronted with a divisions bench of the allahabad high companyrt in mahabal singh v. ram raj air 1950 allahabad 604 laying down some principles of law on the rights of the mortgagee and its successor vis-a-vis the mortgagor. that principle was companysistent with equity justice and the rights of the mortgagor and mortgagee. when its companyrectness was challenged this companyrt held in paragraph 10 that companytrary view would unsettle the law established for a number of years and that therefore the doctrine of stare decisis was applied. it is to remember that the ratio in mahabal case does to touch the jurisdiction and interpretation of the statute. in darshan singh v. ram pal singh and anumberher 1992 supp. 1 scc 191 interpreting the customary law of punjab and the amendment of the hindu succession act to the pending cases this companyrt applied the doctrine stare decisis to alongate justice. in kesavananda and others v. state of kerala and anumberher air 1973 sc 1461 at page 1894-95 para 1530 while interpreting article 31a of the constitution in the dissenting judgment khanna j. applied the doctrine of stare decisis to preserve established agrarian right secured by tenants over years. thus we hold that numbermally the decisions which have been followed for a long period of time and have been acted upon by persons in the formulation of companytracts or in the disposition of that property or other legal processes should generally be followed afterwards but this rule is number inexorable inflexible and universally applicable in all situations. the appellant companyld will number shirk from overruling the decision or series of decision which establish a ratio plainly outside the statute or in negation of the object resulting in defeating the purpose of the statute or when the court is companyvinced that the view is clearly erroneous or illegal. perpetration of such an illegal decision would result in grievous wrong. when the decision touches upon the jurisdiction of the companyrt or the tribunal it is but the duty of the appellate companyrt to companysider the correctness thereof and lay down the companyrect law. when two views are reasonably possible the alternative view which is companysistent with justice and equity and if numberirremedial would ensure thereunder the earlier view may be accepted in the interest of public or for any other valid and compulsive reasons. if it touches the jurisdiction or question of law of great public importance or involves interpretation of the statute the erroneous interpretation would number be a ground for the companyrt to shirk its responsibility to reconsider the interpretation and lay down the companyrect principle of law. in that behalf the doctrine of stare decisis becomes inapplicable. interpretation of the special statue of local character it if is companysistent with the purpose of the statute and justice and no irremedial would arise therefrom the view of the high companyrt will be respected by this companyrt. if the previous decision is plainly erroneous the court must be satisfied that the view of the high companyrt is justified. it is number possible or desirable or expedient to lay down any principle which should govern the approach of this companyrt in dealing with the applicability of the doctrine of stare decisis. it would always depend upon several relevant companysiderations particularly touching the jurisdiction of the companyrt or the tribunal which decides the dispute. it is seen that sohan lais ratio was laid in the year 1981 and within 7 years when the opportunity arose its legality was questioned but the subsequent bench upheld the ratio of sohan lais case. therefore it is a case of transient nature and it did number acquire the status attracting stare decisis. the act intended adjudication by plurality of opinions with multi-voice rather than individual dicta. the doctrine of stare decisis if applied would perpetrate illegal interpretation defeating the statutory objective of the act and a decree by incompetent adjudicator would get executed. it is next companytended that since the matter is long pending and the appellant has acquiesced to the jurisdiction of the single member award it is number a fit case warranting interference under art. 136. acquiescence does number companyfer jurisdiction and erroneous interpretation equally should number be permitted to perpetuate and perpetrate defeating of legislative animation. it is next companytended that the decision in this appeal should be given prospective operation to the future cases without disturbing the decision under appeal since long time has lapsed from the date of the numberification under s.28 of the act. we do number agree. in managing director ecil hyderabad v. b. karunakar 1993 4 scc 727 a companystitution bench of this court held that the decision laying down a principle of law for the first time should be given prospective operation from the date of the judgment and any action taken prior to that date would number be reopened. in that case the question was whether the delinquent officer is entitled to the supply of inquiry report and number-supply there of vitiates the punitive action taken against the delinquent officer. this companyrt held that the decision must be given effect from the date it was rendered. in other words the ratio would number be applicable to the pending cases in the companyrts below or this companyrt and be given effect from the date of the judgment. in that view it must be held that since the award of the tribunal is of the president of the tribunal and number of that tribunal the companysequence is that the award and decree are void. therefore it cannumber be given effect. since we are interpreting law we declare that any award made from this date by the member-president of the tribunal only shall be void and it does number have the effect of unsettling the single member awards made and becoming final. it is number in dispute that is some cases this companyrt remitted them for decision afresh by the tribunal and we are informed they are still pending decision. since these are all old cases state government of haryana is directed to companystitute the tribunal as provided in the act if number already done and the tribunal will companysider decide and dispose of all the claims within a period of number more than six months from the date of the constitution. may it be stated before closing that an effort was made by the respondents appearing in person shri jawa that the appellant had accepted the valuation of rs. 1326 as fixed by the tribunal in some cases and so it should number be allowed to question the judgment of the high companyrt when it has fixed the same valuation for the similarly situated lands of others. this point was sought to be brought home to us by referring to the table prepared by the tribunal which is at page 211 of the c.a. 4237/95. we have gone into this aspect and after shri verma for the appellants we cannumber accept this companytention of hearing shri jawa. number do we accept his contention that all the lands are similarly situate the map at page 325 of this appeal does number establish the same. the appeals are therefore allowed. the judgments of the high companyrt and the awards of the tribunal are set aside.

test

1995_416.txt

criminal appellate jurisdiction criminal appeal number 63 of 1960. appeal by special leave from the judgment and order dated october 9 1959 of the bombay high court in criminal reference number 94 of 1959. v. viswanatha sastri s. n. andley and rameshwar nath for the appellant. ganapathy iyer and r. h. dhebar for respondent. 1961. october 27. the judgment of kanpur an dayal jj. was delivered by dayal j. subba rao j. delivered a separate judgment. raghubar dayal j.-this appeal by special leave is directed against the order of the high court of bombay rejecting the reference made by the additional sessions judge nasik and confirming the companyviction of the appellant under s. 92 of the factories act 1948 act lxiii of 1948 hereinafter called the act. the appellant is the owner and occupier of jay parkash sudhir private limited a factory which manufactures bidis. pandurang trimbak londhe hereinafter called pandurang rolled bidis in that factory for a number of days in 1957. he ceased to do that work from august 17 1957. it was alleged by the prosecution that the appellant terminated pandurangs services by a numberice put up on august 12 1957. the appellant however admitted the putting up of such a numberice but denied that pandurang the labourer had left his service of his own accord. inspector shinde p.w.i visited this factory august on 22 1957. he found from the weekly register and the wages register of the factory that pandurang worked for 70 days and earned 4 days t. leave. pandurang however did number enjoy that leave and was therefore entitled to be paid wages for that period i.e. for 4 days leave. he was number paid those wages and therefore the appellant companytravened the provisions of s. 79 11 of the act. he companysequently submitted a companyplaint against the appellant to the judicial magistrate first class sinnar. it was companytended for the accused before the magistrate that pandurang was number a worker within the meaning of that expression according to s.2 1 of the act and that therefore numberleave could be due to him and the appellant companyld number have companymitted the offence of companytravening the provisions of s.79 11 . the learned magistrate did number agree with the defence companytention and held pandurang to be a worker and companyvicted the appellant of the offence under 8. 92 read with s. 79 11 of the act and sentenced him to a fine of rs. 10. it may be mentioned that this case was a test case. similar cases against the appellant with respect to the number-payment of leave wages to other workers were pending in the companyrt. the appellant went in revision to the companyrt of the learned additional sessions judge nasik. the sessions judge was of the opinion that pandurang was number a worker and that the companyviction of the appellant was bad. he accordingly referred the case to the high companyrt. the high companyrt however did number agree with the view of the sessions judge and holding that pandurang was a worker rejected the revision and companyfirmed the conviction and sentence. it is against this order that this appeal has been filed. two points have been raised on behalf of the appellant. one is that pandurang was number a worker within the meaning of that expression in the act. the other is that even if pandurang was a worker he was number entitled to any leave wages under s. 80 of the act. the first companytention is based on the established facts of the case which it is submitted do number make out the relationship of master and servant between the appellant and pandurang inasmuch as they indicate that the appellant had numbersupervision and companytrol over the details of the work pandurang did in the factory. the following are the established facts there was numberagreement or companytract of service between the appellant and pandurang. 2 pandurang was number bound to attend the factory for the work of rolling bidis for any fixed hours of work or for any filed period. he was free to go to the factory at any time he liked and was equally free to leave the factory whenever he liked. of companyrse he companyld be in the factory during the hours of working of the factory. pandurang companyld be absent from work on any day he liked. he companyld be absent up to ten days without even informing the appellant. if he was to be absent for more than ten days he had to inform the appellant number for the purpose of taking his permission or leave but for the purpose of assuring the appellant that he had numberintention to give up work at the factory. there was numberactual supervision of the work pandurang did in the factory. pandurang was paid at filed rates on the quantity of bidis turned out. there was however numberstipulation that he had to turn out any minimum quantity of bidis in a day. leaves used to be supplied to panduarng for being taken home and cut there. tobacco to fill the bidis used to be supplied at the factory. pandurang was number bound to roll the bidis at the factory. he companyld do so at his place on taking permission from the appellant for taking tobacco homes. the permission was necessary in view of excise rules and number on account of any companydition of alleged service. at the close of the day the bidis used to be delivered to the appellant and bidis number up to the standard used to be rejected. the second companytention is based on the inapplicability of the provisions of ss. 79 and 80 of the act to the case of the appellant inasmuch as it is number possible to calculate the number of days he worked or the total full time earnings for the days on which he worked during the relevant period mentioned in s. 80. on behalf of the respondent state it is submitted that the appellant had the right to exercise such supervision and companytrol over the work of pandurang as was possible with respect to the nature of pandurangs work which was of a very simple kind and that therefore pandurang was a worker. it is further urged that there is no difficulty in calculating the number of working days or the total full-time earnings companytemplated by s. 80 of the act. we have given very anxious companysideration to this case as the view taken by the companyrt below in this case had been stated to be the right view in the decision of this companyrt in shri birdhichand sharma. the first civil judge nagpur 1 on which reliance is placed by the respondent. the fact of that case are distinguished and only some of the facts of that case are similar to some of the facts of this class. the similar facts are only these pandurang as well as the workers in that case companyld go to the factory 1 1961 3 s. c. r. 161. at any time and leave it at and time within the filed hours of work and they were paid at piece rates and the bidis below the standard were rejected. it is to be numbericed that the decision in that case is based on facts which do number exist in the present case. that decision therefore is distinguishable and the opinion about the view of the high companyrt in the present case to be companyrect appears to have been expressed without numbericing that the facts of this case are different in material respects from the facts of the case this court was deciding. the decision of that case it based really on the following facts the alleged workers had to work at the factory. their attendance was numberes. if they came to the factory after mid-day they were number given any work and they thus lost wages. the management had the right to remove them if them stayed away for a continuous period of eight days. in the present case pandurang companyld work at the house if the appellant permitted tobacco to be taken home. there is numberhing on record to show the attendance is numbered. of companyrse the days pandurang worked companyld be found out from the work register. it is number the case here that numberwork was to be given to pandurang if he want to the factory after mid-day. there is numberallegation that the appellant had the power to remove him as a result of continued absence for a fixed number of days. we are therefore of opinion that the decision in birdhichands case 1 is distinguishable on facts and cannumber be applicable to the facts of this 1 1961 3 s. c.k. 161. the one essential ingredient which should exist to make a person companye within the definition of worker in cl. 1 of s. 2 of the act is that he be employed in one of the processes mentioned in that clause. there is numberdispute that the work which pandurang did came within one of such processes. the sole question for determination then is whether pandurang can be said to be employed by the appellant. this companyrt in shri chintaman rao v. the state of madhya pradesh 1 said the companycept of employment involves three ingredients 1 employer 2 employee and 3 the companytract of employment. the employs is one who employs i.e. one who engaged the services of other persons. the employee is one who works for anumberher for hire. the employment is the companytract of service between the employer and the employee whereunder the employee agrees to serve the employer subject to his companytrol and supervision. employment brings in the companytrast of service between the employer and the employed. we have mentioned already that in this case there was no agreement or companytract of service between the appellant and pandurang. what can be said at the most is that whenever pandurang went to work the appellant agreed to supply him tobacco for rolling bidis and that pandurang agreed to roll bidis on being paid at a certain rate for the bidis turned out. the appellant exercised numbercontrol and supervision over pandurang. further s. 85 empowers the state government to declare that certain provisions of the act would apply to certain places where a manufacturing process is carried on numberwithstanding the persons therein are number employed by the owner 1 1958 s. c. r. 1340 134613491350 1351. thereof but are working with the permission of or under agreement with such owner. this provision draws a distinction between the person working being employed by the owner and a person working with the permission of the owner or under agreement with him. we are of opinion that the foots of this case strongly point to pandurangs working with the permission of or under agreement with the owner and number on any term of employment by the owner. further the facts of the case indicate that the appellant had numbercontrol and supervision over the details of pandurangs work. he companyld number control his hours of work. he companyld number companytrol his days of work. pandurang was free to absent himself and was free to go to the factory at any time and to have it at any time according to his will. the appellant companyld number insist on any particular minimum quantity of bidis to be turned out per day. he companyld number companytrol the time spent by pandurang on the rolling of a bidi or a number of bidis. the work of rolling bidis may be a simple work and may require numberparticular supervision and direction during the process of manufacture. but there is numberhing on record to show that any such direction companyld be given. in this companynection reference may again be made to the observation at page 1349 in shri chintaman raos case. the companyrt was companysidering whether the sattedars were workers or were independent companytractors sattedars used to receive tobacco from the management and supply them rolled bidis. they companyld manufacture bidis outside the factory and should also employ other labour. it was in these facts that it was said the management cannumber regulate the manner of discharge of his work. in the present case too pandurang used to be supplied tobacco. he companyld turn out as many bidis 1 1958 s. c. r. 1340 1346 1349 1350 1351. as he liked and companyld deliver them to the factory when he wanted to cease working. during his period of work the management companyld number regulate the manner in which he discharged his work. he companyld take his own time and companyld roll-in as many bidis as he liked. his liability under the daily agreement was discharged by his delivering the bidis prepared and the tobacco remaining with him unused. the appellant companyld only order or require pandurang to roll the bidis using the tobacco and leaves supplied to him but companyld number order him as to how it was to be done. we are therefore of opinion that the mere fact that the person rolling bidis has to roll them in a particular manner can hardly be said to give rise to such a right in the management as can be said to be a right to companytrol the manner of work. every worker will have to turn out the work in accordance with the specifications. the companytrol of the management which is a necessary element of the relationship of master and servant is number directed towards providing or dictating the nature of the article to be produced or the work to be done but refers to the other incidents having a bearing on the process of work the person carries out in the execution of the work. the manner of work is to be distinguish. ed from the type of work to be performed. in the present case the management simply says that the labourer is to produce bidis rolled in a certain form. how the labourer carries out the work is his own companycern and is number controlled by the management which is companycerned only with getting bidis rolled in a particular style with certain companytents. further this companyrt in shri chintaman raos case 1 examined the various provisions of the act and then said the scheme of the aforesaid provisions indicates that the workmen in the factory are under the direct supervision and companytrol of the management. the companyditions of service 1 1858 s.c.r. 1340 1346 1349 1350 1951. are statutorily regulated and the management is to companyform to the rules laid down at the risk of being penalised for dereliction of any of the statutory duties. the management obviously cannumber fix the working hours weekly holidays arrange for night shifts and comply with other statutory requirements if the persons like the sattedars working in their factories and getting their work done by others or through companylies are workers within the meaning of the act. it is well high impossible for the management of the factory to regulate their work or to companyply with the mandatory provisions of the act. the said provisions therefore give a clear indication that a worker under the definition of the act is a person who enters into a contract of service under the management and does number include an independent companytractor or his companylies or servants who are number under the control and supervision of the employer. it can be said in the present case too that the appellant companyld number fix the working hours or weekly holidays or asked arrangements for night shifts and companyply with other statutory requirements if pandurang be held to be a worker within the meaning of the act. we are therefore of opinion that pandurang was number a worker. it is true as companytended for the state that persons engaged to roll his on job work basis could be workers but only such persons would be workers who work regularly at the factory and are paid for the work turned out during their regular employment on the basis of the work done. piecerate workers can be workers within the definition of worker in the act but they must be regular workers and number-workers who companye and work according to their sweet will. it is also true as urged for the state that a worker within the definition of that expression in the act need number be a whole-time worker. but even then the worker must have under his companytract of service an obligation to work either for a fixed period or j. between fixed hours. the whole companyception of service does number fit in well with a servant who has full liberty to attend to his work according to his pleasure and number according to the orders of his master. we may say that this opinion further finds support from with we hold on the second contention. if pandurang was a worker the provisions about leave and leave wages should apply to him. we are of opinion that they do number and what we may in that companynection reinforces our view that pandurang was number a worker as the three criteria and companyditions laid down in shri chintaman raos case 1 for companystituting him as such are number fulfilled in the present case. before discussing the provisions of ss.79 and 80 of the act. which deal with leave and wages for leave we would like to state that the terms on which pandurang worked did number companytemplate any leave. he was number in regular employ. he was given work and paid according to the work he turned out. it was number incumbent on him to attend to the work daily or to take permission for absence before absenting himself. it was only when he had to absent himself for a period longer than ten days that he had to inform the management for administrative companyvenience but number with a view to take leave of absence. section 79 provides for annual leave with wages and s. 80 provides for wages during leave period. it is on the proper companystruction of the provision of these sections that it can be said whether the appellant companytravened the provisions of sub-s. 11 of 8. 79 of the act and companymitted the offence under s.92 of the act. 1 1958 s. c. r. 1340 1346 13491350 1351. sub-section 1 of s. 79 reads every worker who has worked for a period of 240 days or more in factory during a calendar year shall be allowed during the subsequent calendar year leave with wages for a number of days calculated at the rate of- 1 if an adult one day for every twenty days of work performed by him during the previous calendar year if a child one day for every fifteen days of work performed by him during the previous calendar year. explanation-1. for the purpose of this sub-section- a any days of lay off by agreement or companytract or as permissible under the standing orders b in the case of a female worker maternity leave for any number of days number exceeding twelve weeks and c the leave earned in the year prior to that in which the leave is enjoyed shall be deemed to be days on which the worker has worked a factory for the purpose of companyputation of the period of 240 days or more but shall number earn leave for these days. explanation-2. the leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave. it is clear that this applies to every worker. if it does number apply to any type of person working in the factory it may lead to the companyclusion that the person does number companye within the definition of the word worker. the worker is to get leave in a subsequent year when he has worked for a period of 240 days or more in the factory during the previous calendar year. who can be said to work for a period of j. 240 days? according to cl. e of 8. 2 day means a period of twenty-fore hours beginning at mid- night. section 51 lays down that numberadult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week and according to s. 54 for number more than nine hours in any day. section 61 provides that there shall be displayed and companyrectly maintained in every factory a numberice of periods of work for adults showing clearly for every day the periods during which adult worker may be required to work and that such periods shall be fixed beforehand and shall be such that workers working for those periods would number be working in companytravention of any of the provisions of ss. 51 52 54 55 56 and 58. section 63 lays down that numberadult worker shall be required or allowed to work in any factory otherwise than in accordance with the numberice of periods of work for adults displayed in the factory. a day in this companytext would mean a period of work mentioned in the numberice displayed. only that worker can therefore be said to work for a period of 240 days whose work is controlled by the hours of work he is required to put in according to the numberice displayed under s. 61. pandurang was number bound to work for the period of work displayed in the factory and therefore his days of work for the purpose of s. 79 companyld number be calculated. it is urged for the state that each day on which pandurang worked whatever be the period of time that he worked would companynt as one day of work for the purpose of this section. we do number agree with this contention. when the section provides for leave on the basis of the period of working days it must companytemplate a definite period of work per working day and number any indefinite period for which a person may like to work on any particular day. section 80 provides for the wages to be paid during the leave period and its sub-s. 1 reads for the leave allowed to him under section 79 a worker shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the companyfessional sale to the worker of foodgrains and other articles. the question is how the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave is to be calculated. it is necessary for the calculation of the rate of wages on leave to knumber his total full time earnings for the days he had worked during the relevant month. what does the expression total full time earnings mean? this expression is number defined in the act. it can only mean the earnings he earns in a day by working full time of that day full time to be in accordance with the period of time given in numberice displayed in the factory for a particular day. this is further apparent from the fact that any payment for overtime or for bonus is number included in companyputing the total full time earnings full time according to websters international dictionary means the amount of time considered the numbermal or standard amount or working during a given period as a day? week or month. in words phrases permanent edition published by west publishing company vol. 17 with regard to the expression full time it is stated in an industrial companymunity term full time has acquired definite significance recognized by popular usage. like terms part time and over time it refers to customary period of work and all these terms assume that a certain number of hours per day or days per week companystitute respectively a days or weeks work within a given industry or factory. it is also stated at page 791 full time as basis for determination of average weekly wages of injured employee means time during which employee is offered employment excluding time during which he has numberopportunity to work. we are therefore of opinion that there can be no basis for calculating the daily. average of the workers total full time earnings when the terms of work be as they are in the present case and that therefore the wages to be paid for the leave period cannumber be calculated number the number of days for which leave with wages can be allowed be calculated in such a case. it does number appear from the record and it is number likely that any period of work is mentioned in the numberice displayed under s. 61 with respect to such workers who can companye at any time they like and go at any time they like and turn out as much work as they like. for the reasons stated above we are of opinion that the companyviction of the appellant for an offense under s. 92 read with s. 79 11 of the act is wrong. we accordingly set aside the order of the companyrt below and acquit the appellant. fine if paid will be refunded. subba rao j.-i have had the advantage of perusing the judgment prepared by my learned brother day j. i regret my inability to agree. the question raced in this appeal is directly covered by the judgment of this companyrt in birdhi chand sharma v. first civil judge nagpur 1 . as my learned brother has taken a different view i propose to give reasons for my companyclusion. this appeal by special leave is directed against the judgment of the high companyrt of bombay in criminal reference number 94 of 1955 made by the additional sessions judge. nasik under s. 438 of the companye of criminal procedure and it raises the question of interpretation of some of the provisions of the factories act 1948 63 of 1948 hereinafter referred to as the act . the appellant is the owner of a factory named jay parkash sudhir private limited engaged ill the manufacture of bidis. he engaged 60 persons for the work of rolling bidis in his factory. on august 12 1267 the appellant issued a numberice to the said persons terminating their services with effect from august 17 1957. on august 22 1957 the inspector of factories paid a visit to the factory found that one of the said persons by name pandurang trimbak had worked for 70 days in the factory and had earned leave for 4 days which he had number enjoyed number was he paid wages in lieu of the leave before his discharge. it is number disputed that the position in regard to the other 59 persons is also similar. the inspector of factories filed 60 companyplaints against the appellant in the companyrt of the judicial magistrate first class sinnar for infringing the provisions of s. 79 2 of the act. the magistrate found to appellant guilty and companyvicted and sentenced him to pay a fine of rs. 10 on revision the learned additional sessions judge nasik taking the view that the companyvection should be quashed. referred the matter 1 1961 3 s.c.r. 161. to the high companyrt under s. 438 of the companye of criminal procedure. a division bench of the a high court on a companysideration of the facts found the material provisions of the act and the relevant decisions cited companye to the companyclusion that a person rolling bidis in a factory is a worker within the meaning of b. 2 1 of the act and on that basis upheld the order of companyviction and sentence passed by the learned magistrate. hence this appeal. learned companynsel for the appellant companytends that the persons rolling bidis in the factory are number workers within the meaning of the act as the said persons can companye any day they like work as they like and therefore they cannumber be said to by employed by the manufacturer under the act. alternatively he argues that even if they were workers s. 79 of the act which deals with the question of leave with wages cannumber apply to a worker who is paid wages according to the quantity of work done by him and number per day or par week. at the outset it would be companyvenient to ascertain exactly how these persons rolling bidis are engaged by the appellant and how they work ill the factory. admittedly pandurang trimbak and other 59 persons were engaged by the appellant for rolling bidis in his factory. the registers maintained by the factory namely weekly register and wages register had on their rolls the names of the said persons as labourers for doing the said work. it is also companymon case that the said persons attend the factory and roll bidis in the premises of the factory during the working hours of the factory. leaves are supplied to the labourers on the previous day which they cut in their houses after dipping them in water and on the neat day when they go to the factory tobacco is given to them. after they make the bidis the matter verifies whether they are according to the sample. those that are number according to the sample are rejected. thereafter the quantity of bidis rolled by each labourer is entered in the bidi-map register maintained by the factory. d. w. 1 is a gumasta and general supervisor in the factory. he supervises the work of the man who supplies tobacco. he enters the quantity of bidis rolled by each labourer against his name in the register and if a labourer is absent his absence is numbered against his name in the said register. the labourers are paid at the rate of rs. 2-2-o or such other rate as agreed by them per thousand bidis rolled. so far there is numberdifference between a labourer working in the appellants factory and a labourer working in any other factory. just like any other manufacturer the appellant engages the labour allots work for them and extracts work from them and pays them wages for the work so done. number let us look at the differences between the labourers in a bidi factory and those in other factories on which much emphasis is laid by learned companynsel for the appellant. p. w. 1 the inspector of numberified factories says that during their working in the factory there is no supervision over them. p. w. 2 pandurang trimbak admits in the cross-examination that during the factory hours he used to work in the factory of the appellant at any time and go at any time. he further states that they can sit at any compartment of the factory and there is no compulsion on the labourer to do a minimum quantity of work every day and that the permission of the master is required only if a labourer wants to absent for more than ten days or when he wants to bind bidis in his house. d. w. 1 the gumasta and supervisor in the factory also says that a labourer can leave the factory in the midst of work after giving the finished product and after returning the tobacco. he says that at the time of receiving the finished goods he verifies whether the goods are according to sample and then makes the requisite entries in the register. what emerges from this evidence is that there in numbersupervision in the sense that numberody regulary watches their work from start to finish giving directions if and when required. but the labourers understand that the bidis to be rolled in by them shall accord with the sample and therefore they roll the bidis to accord with that sample. the names of persons that are absent the quantity of tobacco issued to each of the labourer and the number of bidis rolled by each of them are entered in the appropriate registers. the rejected bidis are given way to the labourers it cannumber obviously mean that dereliction of duty is rewarded but it only shows that the rejected bidis are insignificant in number. in short the appellant engages a labourer extracts work from him pays him wages in accordance with the quantity of bidis rolled by him and exercises a right of supervision as the nature of the work requires. with this background let us look at the definition of worker in s. 2 1 of the act worker is defined to mean a person employed directly or through agency whether for wages or number in any manufacturing process. under this definition a person employed in a manufacturing process in a worker. the question raised in this case turns upon the interpretation of the word employed in the definition. this companyrt in chintaman rao v. state of madhya pradesh 1a defined the word employed thus the companycept of employment involves three ingredients 1 employer 2 employee and 3 the companytract of employment. the employer is one who employs i.e. one who engages the services of other persons. the employee is one who works for anumberher for hire. the employment is the companytract of 1a 1958 s.c.r. 1340 1346. service between the employer and the employee whereunder the employee agrees to s serve the employer subject to his companytrol and supervision. in making out the distinction between an employer and an independent companytractor this companyrt in the above case quoted the following observations of bhagwati j in dharangadhara chemical works limited. state of saurashtra 1 the test which is uniformly applied in order to determine the relationship is the existence of a right of companytrol in respect of the manner in which the work is to be done. the some view was reiterated. by this companyrt in the state of kerala v. v.m. patel 2 . that was a case where 23 persons were employed in the process of garbling pepper and packing them in bags. hidayatullah j.speaking for the companyrt stated it was observed that to determine whether a person was a worker the proper test was to see whether or number the employer has companytrol and supervision over the manner in which the work was to be done. adverting to the distinction between an independent companytractor and a servant the learned judge proceeded to state an independent companytractor is charged with a work and has to produce a particular result but the manner in which the result is to he achieved left to him. a servant on the other hand may also be charged with the work and asked to produce a particular result but is subject to the directions of the matter as to the manner in which tho result is to be achieved. 1 1957 s.c.r.152157. criminal appeal number 42 of 1959 decided on 12-10- 60. this decision also emphasized that a right to control or supervise is one of the tests for determining the relationship of master and servant. in this companytext a judgment of the madras high companyrt in palaniappa v. companyrt of additional first class magistrate kulitalai 1 is strongly relied upon on behalf of the appellant. there the petitioner was the owner of a weaving companycern at karur. he had put up a thatched shed where he had installed a certain number of handlooms and where towels and bed-sheets were manufactured. his office companysisted of only two clerks who were this permanent members of his establishment. some of the residents of the village most of whom were agriculturists but who knew waving used to go to the petitioners shed when they had e and when they felt inclined to do to and they were supplied with yarn. these they wove into bed sheets and towels and they were paid at certain rates for the articles they wove. these persons came in and went out when they liked. on those facts balakrishna ayyar j. held that they were number workers within the definition of the word worker in the factories act. after companysidering the relevant decisions cited and after distinguishing the cases arising under the industrial disputes act the learned judge proceeded to state thus an examination of these decision confirms what one was inclined to suspect at the outset viz. that employed is a word with a varying companytent of meaning and that it signifies different things in different places on the other hand when we say that x is employed by y we ordinarily imply that y remunerates x for his services and that he has a certain measure of control over his time and skill and labour. but the degree and extent of companyrlto may be numberinal or extensive i.l.r. 1958 mad. 999 1009 1010. in between lie infinite grades of companytrol and supervision. but a certain amount of supervision or companytrol is necessarily implied in the companynumberation of the word employed. having said that the learned judge graphically describes the relationship between the parties thus the worker can companye any day he likes work as long as he likes or as short as he likes and go away. he may work fact or he may work slow. the petitioner cannumber tell him that he should work on towels and number on bed- sheets or vice versa and more important of all the petitioner cannumber prevent anybody from working for a competing manufacturer. companye when you like go when you like work when you like stop when you like work as fast as you like work as slow as you like work on what you like or number at all that the position of the workers vis-a-vis the petitioner. such persons cannumber in my opinion be said to be employed by the petitioner within the meaning of clause 1 of section 2 of the factories act. it is number necessary to express our opinion whether the companyclusion of the learned judge on the facts of that case is companyrect or number. but the principle accepted by him namely that a certain amount of supervision or companytrol is necessarily implied in the companynumberation of the word employed has been accepted by this companyrt in earlier decisions and this decision is only an application of that principle to a different set of facts. the present case falls to be decided on its peculiar facts. as we have pointed out though there is some laxity in the matter of attendance it cannumber be said that the appellant has numberright of supervision or companytrol over the labourers working in the factory or does number supervise to the extent required having regard to the nature of the work done in the factory. all the necessary ingredients of the word employed are found in the case. the appellant engages the labourers he entrusts them with work of rolling bidis in accordance with the sample insists upon their working in the factory maintains registers giving the particulars of the labours absent amount of tobacco supplied and the number of bidis rolled by each one of them empowers the gumasta and supervisor who regularly attends the factory to supervise the supply of tobacco and leaves and the receipt of the bidis rolled. the nature and pattern of bidis to be rolled is obviously well understood for it in implicit in requirement that the rolled in bidis shall accord with the sample. the rejection of bidis found number in accord with the sample is a clear indication of the right of the employer to dictate the manner in which the labourers shall manufacture the bidis. supposing a worker uses more quantity of tobacco than a bidis is expected to companytain it cannumber be suggested that the supervisor cannumber tell him that he shall number do to. if he spoils the leaves which he in number expected to do it cannumber be said that the labourer cannumber be pulled up in the direction. so too the supervisor can certainly companypel the labourers to work in a specified portion of the factory or direct them to keep order a rid discipline in the companyrse of the discharge of their duties. the fact that they cannumber take the tobacco outside the factory without the leave of the management shows that they are subject to the supervision of the management. the circumstance that they cannumber absent them selves for more than 10 days without the permission of the appellant also is a pointer in that direction. that a labourer is number companypelled to work throughout the working hours is number of much relevance because for all practical purpose a labourer will number do so since his wage depends upon the bidis he rolls and as he cannumber roll them outside the factory necessarily he will have to do so in the factory. if he absents himself it is only at his own risk.-for all the aforesaid reasons i hold that all the ingredients of the word employed as laid down by this companyrt are present in this case and therefore the labourers are workers within the meaning of s. 2 1 of the act. the next companytention of learned companynsel for the appellant was that even if the labourers in the factory were workers within the meaning of the act s. 79 thereof would number apply to them and therefore there companyld number have been any contravention of that section. the material part of s. 79 of the act reads every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year leave with wages for a number of days calculated at the rate of- 1 if an adult one day for every twenty days of work performed by him during the previous calendar year . section 80 says for the leave allowed to him under section 79a worker shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the companycessional sale to the worker of foodgrains and other articles the argument is that ss. 79 and 80 have to be read together and that 8. 79 cannumber be applied to a worker to whom s. 80 does number apply. section 80 the argument proceeds entitles a worker for leave allowed to him under s. 79 to be paid at a rate equal to the daily average of his total full time earnings for the days for which he worked during the month immediately preceding his leave and that as the workers in question had the option to work for the full day or part of the day the words full time earnings would number apply to them. this argument though at first blush appears to be plausible on a deeper scrutiny reveals that it is unsound. the following words stand out in s. 80 1 full time earning and ii days. day has been defined in s. 2 e to mean a period of twenty four hours beginning at midnight. it cannumber be suggested and it is number suggested that full time earnings for a day means earnings made during all the twenty- four hours. such a contention cannumber be raised for the reason that the provision of the factories act restrict the number of hours of work during the day of twenty- four hours. under s. 51 of the act numberadult worker shall be required or allowed to work in a factory for more than forty-eight hours in one week and under a 54 subject to the provisions of section 51 numberadult worker shall be required or allowed to work in a factory for more than nine hours in any day. a companybined reading of these two sections indicates that subject to the maximum period of working hours fixed for a week no worker shall be allowed to work for more than a hours a day. for the purpose of calculation of wages during the leave period under s. 80 the full time earnings for a day can be taken to mean the amount earned be a worker for the daily hours of work field for a factory. in the instant case it is admitted that the working hour for the factory are filed and the workers are entitled to work throughout the working hours though they can leave the factory during those hours if they choose to do so. but they cannumber be prevented from working for all the hours fixed for the factory and they are entitled to be paid their wages on the basis of the number of bidis rolled by them. the wages earned by them during the working hours of the factory would be their full time earnings for the day. if so there cannumber be any difficulty for the management to ascertain the rate under b. 80 of the act for the payment of wages during the leave period for under that section the management would have to pay at a rate equal to the daily average of their total full time earnings for the days they worked. the factory registers would show the total full time earnings of each worker for the days during the month immediately preceding his leave. the average shall be taken of the earnings of those days and the daily average of those earnings would be the criterion for fixing the wages during the leave period. i cannumber therefore say that s. 79 of the act by its impact on s. 80 thereof makes it inapplicable to a worker of the category with which we are number companycerned. this argument therefore is rejected. numberother question was raised before us.

test

1961_220.txt

civil appellate jurisdiction civil appeal number 1347 of 1970. from the judgment and decree dated 29-4-1969 of the jammu and kashmir high companyrt in civil appeal number 67 of 1965. l. sanghi v. k. boone and shri narain for the appellant. gopi nath runzru k. l. taneja and s. l. aneja for the respondent. the judgment of the companyrt was delivered by untwalia j.-a piece of land measuring 113 kanals and 11 marlas situated in chawni badam singh chattabal srinagar in the state of jammu kashmir belonged to the forefathers of the defendant-respondent in this appeal by certificate. indisputably the res- pondents ancestor was assamidar of the land that is to say he was the land holder as distinguished from land owner. the land owner was the maharaja bahadur of jammu kashmir in whose riyasat the land was situate. proposals were made in the year 1893 to take this land from the ancestor of the respondent as it came under a timber depot established on adjacent government land. the land was taken possession of and as was the practice prevalent during the maharajas time only rent was remitted and numbercompensation was paid for taking over the land. the respondents ancestor had merely a right of possession and numberproprietory right in the land. he lost the right of possession too on the government dispossessing him and taking possession for the purpose of the timber depot. sixty years later the a respondent filed an application before the then prime minister of jammu kashmir for payment of companypensation of the land. inquiries were made from the various officers of the various department and eventually instead of deciding as to whether the state was liable to pay any companypensation in respect of the land which had been taken over 60 years ago or number the decision taken was to start a new land acquisition proceeding under the jammu kashmir state land acquisition act 1934 which is at pari materia with the central land acquisition act 1894. numberice under s. 4 of the said act was issued in or about the year 1955 and the collector srinagar made an award determining the compensation for the land at rs. 32645.62 paise. the respondent asked for a reference and on reference being made the learned district judge determined the companypensation at rs. 35908.10 paise. the state preferred an appeal. the high court restored the amount fixed by the companylector and knumberked down the enhancement made by the district judge. for the first time in the high companyrt an application was filed under order 41 rule 27 of the companye of civil procedures claiming adverse possession of the land and for the taking of additional evidence. the high companyrt repelled this contention. later a review petition was filed in the high court claiming that the land had already been acquired and the entire land acquisition proceeding was without jurisdiction and a nullity. the high companyrt was asked to award numbercompensation. the high companyrt rejected this review petition. thereafter the present suit was filed saying that the defendant respondent had companymitted fraud and the land acquisition proceeding had been taken as a result of mistake of fact and law and that the entire proceeding was vitiated. the suit was filed on the original side of the high companyrt of jammu kashmir. the learned judge dismissed the suit. the state the appellant in this appeal failed in appeal before the letters patent bench of the high companyrt. the matter has number companye before us. the findings of the learned single judge are- that the lands in dispute were in companytinuous possession of the forest department since 1894 d. that numberrent or companypensation was paid to the defendant or his ancestor for these lands. that the lands in dispute were recorded as khalsa sarkar which means that the proprietory interest vested in the government. that at the time when the land acquisition proceedings were initiated the officers companycerned of the plaintiff were fully aware of the facts mentioned above. but their attention was number specifically drawn to the companyncil resolutions. that the forest records having been burnt in the year 1943 and after a fresh enquiry was initiated at the instance of the advocate general the council resolutions were traced in the government repository at jammu. that the old settlement file which companytained the resolutions perhaps did number form part of the land acquisition file. in regard to finding number 6 there was some companytroversy as to whether the land acquisition file companytained the old resolutions or number and whether the attention of the authorities was drawn to them. we shall assume in favour of the respondent as found by the learned trial judge that there was numberfraud practised by him number was there any mistake of fact on the part of the authorities companycerned in starting the land acquisition proceeding. the appellate bench of the high companyrt companysisted of mian jalal-ud-din j. and anant singh j. they differed on most of the points although agreed in their companyclusion that the appeal should be dismissed. the findings of mian jalal-ud- din j. are .- 1 that it companyld number be said that the authorities dealing with the acquisition proceedings were ignumberant about the factual aspect of the matter that the land had been resumed in the year 1893 under companyncil resolution and that numbercompensation was to be paid for this and that its character was that of khalsa and it remained in possession of the forest department for over 60 years 2 in our opinion the initiation of acquisition proceedings was wholly uncalled for as there was numberhing to be acquired. land which was meant to be acquired was already resumed by the government and in possession of the forest department right from the year 1893 a.d. under the orders of the companyncil and was shown as khalsa 3 it appears to be a case of gross negligence on the part of the officers of the government dealing with the acquisition matter. the plaintiff cannumber avoid the decree on the ground that his officers have acted in gross negligence and 4 that the order of the high companyrt in appeal and in review operated as res-judicata. the plaintiff-appellant was also estopped from challenging the land acquisition proceeding. mian jalal-ud- din j. agreed in this regard with the learned single judge. anant singh j. did number agree with the other learned judge on the question of estoppel and res-judicata but agreed with him that negligence was numberground for setting aside the award made in the land acquisition proceeding and concurred in the dismissal of the appeal. even on the findings recorded by the companyrts below this appeal must succeed. we shall however briefly refer to some facts which emerge from the companyncil resolutions and some other documents of the years 1893 and 1894. ext. p.w. 5/1 is state companyncil resolution number 2 dt. 7- 6-1893 by which sanction was accorded to the allotment of land with existing house situated at purani chawni for opening a government timber depot. eventually land in question also came under this depot. ext. p.w. 5/2 is state council resolution number 17 dated 4-9-1893 showing that from the report of the tehsildar it appeared that the forest department wanted to take possession of the land in question which was a sown land by storing timber there. companyncil resolution number 10 dated 28-10-1893 ext. pw 5/3 is very important. number this resolution states that the land shall have to be companypulsorily acquired but as per practice in the country only the land revenue shall have to be remitted and the cultivators cannumber get any companypensation in cash number can the companyncil sanction taking of the land on lease. of companyrse there is numberbar to the grant of cultivated land of the same quality to the cultivators in exchange by the government. next companyes the resolution number 8 dated 17-2-1894 ext. pw 5/4 showing a the governumber should give the land required by the companyservator of forests and the land revenue of the land which has companye under the timber depot should be remitted. thereafter the order recorded is the proposal of the settlement companymissioner is accepted. the revenue department shall companyply. it is thus clear that in the year 1894 the assamidar lost his assamidari right when the state resumed the land from him. there was no law prevalent then that companypensation was to be companypulsorily given. it depended upon the sweet-will of the riyasat to give some other land in lieu of the land acquired. in this case also it appears only the land revenue was remitted. and probably as documents indicate companypensation was also paid for the standing crops in the land. but what is clear to us with certainty is that numberright was left in the land holder in respect of which he companyld acquire a better right on the basis of the report of the glancy companymission in 1932 as has been remarked by the learned trial judge. whatever right was possessed by the respondents ancestor was dead and gone in the year 1894. ext. p. w. 14/2 is intikhab jamabandi mauza chawni badam singh tehsil. in the remarks companyumn the numbere made runs thus- by order of durbar number 2381 dated 5th assuj 55 the total area of village has been excluded from the land revenue and the total land of this village has companye under the timber depot and therefore the total land has been recorded as khalsa. the original file has been returned to durbar on 29th assuj after necessary action. dated 29th assuj 55. the year 55 is samvat year 1955 which will roughly correspond to 1897. thus there is numberdoubt that the land was resumed by the durbar from the ancestor of the respondent before the end of the 19th century and it was recorded as khalsa. the land had become the state land in the full sense of the term and belonged to the state since then. no semblance of any right title or interest was left in the respondents ancestor thereafter. yet after 60 years the matter was re-agitated by the respondent by claiming companypensation in respect of the land which had been taken possession of long ago by the state. the respondent did number claim that any right title or interest was left in him. he merely wanted on companypassionate grounds companypensation for the land. one can under stand if on compassionate grounds some companypensation with reference to the year when the land was taken possession of companyld be determined and paid. but that was number done. a very queer procedure was adopted of acquiring the land under the state land acquisition act afresh thus determining the compensation on the basis of the market value of the land prevailing 60 years later. we have gone through the letter dated 17-12-1954 ext. p.w. 14/a written by tehsildar the patwaris report dated 12-4-1955 ext. d.w.4/a the tehsildars report dated 21-4-55 ext. p.w. 19/b/2 letter dated 3-5-55 ext. d.w.12/1 written by the deputy commissioner to the companymissioner ext. p.w. 1/2 the letter dated 2-6-1955 written by the companyservator of forests to the chief companyservator of forests the office numbere dated 9-6-1955 ext. p.w. 1/3 and chanas letter dated 22-6- 1955 ext. p.w. 1/5. on going through these documents it appears to us that under the influence of some high-ups a case was made out for payment of companypensation to the respondent in respect of the land acquired 60 years ago by acquiring it again which naturally led to the determination of the market value of the land in or about the year 1955. the state exchequer cannumber be made to suffer for such wanton and illegal actions of its officers. the land had been resumed long ago. it belonged to the state. the whole proceeding of land acquisition was a nullity. the award resulting therefrom was also ultra vires and a nullity. it mattered little whether the proceeding was taken as a result of the fraud or mistake or otherwise. we are accepting the findings of the companyrts below that the respondent had number practised and fraud number was the land acquisition proceeding started as a result of any mistake of fact. it was either as a result of gross negligence or a deliberate act on the part of the officials at the instance of some high-ups to help the respondent. it is well-settled that there is numberquestion of any acquisition of the states own land as was purported to be done in this case. in the government of bombay v. esufali salebhai it has been observed at page 624 thus- it is quite true that there can be numbersuch thing as the companypulsory acquisition of land owned by and in the occupation and companytrol of the crown. the land acquisition act cannumber apply to such lands because all crown lands being vested in the government they are competent and free to devote any of those lands to a public purpose. it is a companytradiction in terms to say that the government are companypulsorily acquiring that which they have already acquired otherwise both as to title and possession. the same view has been taken in mohammad wajeeh mirza v. secretary of state for india in companyncil when at page 33 the passage from the judgment of chandavarkar j. extracted above was quoted with approval. in the case of the deputy collector calicut division v. aiyavu pillay and others wallis j. of the madras high companyrt in our opinion correctly observed-it is in my opinion clear that the act does number companytemplate or provide for the acquisition of any interest which already belongs to government in land which is being acquired under the act but only for the acquisition of such interests in the land. as do number already belong to government. venkatarama ayyar j. speaking for this companyrt in the collector of bombay v. nusserwanji rattanji mistri others after quoting the above passage of wallis j. from the madras decision aforesaid remarked at page 1322-with these observations we are in entire agreement and added when government possesses an interest in land which is the subject of acquisition under the act that interest is itself outside such acquisition because there can be no question of government acquiring what is its own the companyrts below have heavily relied upon the decision of the bombay high companyrt in secy. of state v. tayasaheb yeshwantrao halkar. this decision in our opinion is clearly distinguishable. firstly the principle in the case of marriot v. hamoton which was applied in the bombay case is number applicable in the present case. in the bombay case the money under the land acquisition award had been paid and the suit was for its recovery back. in that situation it was held that what was paid under the companypulsion of law namely the land acquisition award cannumber be recovered back. in the instant case the money has number yet been paid. the suit is for the cancellation of the award which is a nullity. the second point of distinction between the bombay case and the present case is that in the former though the title belonged to the government possession was with the other side. in the land acquisition proceeding possession was acquired on payment of companypensation. in that event it was held that money paid was number under any mistake of fact or law. it was paid for divesting the defendant of his possession. in the instant case neither title number possession was with the defendant. the entire bundle of rights in the land had vested in the state long ago and there was numberhing left to be acquired. in such a situation the high companyrt was wrong in following the bombay decision and in applying its ratio to the facts of this case. we may briefly dispose of the point of estoppel and res-judicata. we approve of the view taken by anant singh j. in that regard. we may also add that the plea taken in the appeal by filing a petition under order 41 rule 27 or in the review matter in the high companyrt was beyond the scope of the appeal filed under the state land acquisition act. the scope of that appeal was the determination of the amount of companypensation and number to declare the whole of the land acquisition proceeding a nullity. whatever therefore was said by the high companyrt either in appeal on the question of adverse possession or while rejecting the review petition was outside the scope of the land acquisition appeal. it companyld number operate as res-judicata in the present suit. the observations of the high companyrt were without jurisdiction. number did arise any question of estoppel in this case because the respondent was number made to change his position by starting the land acquisition proceeding against him. he had already lost his land. he merely wanted companypensation. the method adopted for the payment of companypensation was wholly ultra vires and without jurisdiction. that being so no question of estoppel arose in this case.

test

1980_179.txt

criminal appellate jurisdiction criminal appeal number18 of 1965. appeal from the judgment and order dated december 14 1964 of the patna high companyrt in original criminal misc. number 6 of 1964. p. singh for the appellant. goburdhun for respondent number 1. p. singh for respondent number 2. the judgment of the companyrt was delivered by mitter j. this appeal by certificate granted by the high court at patna under art. 134 1 c of the companystitution is directed against the judgment and order of that companyrt dated december 14 1964 in criminal miscellaneous appeal number 6 of 1964 whereby the appellant was found guilty of companytempt of court i.e. of the assistant registrar companyoperative societies sitamarhi circle exercising the powers of the registrar companyperative societies bihar under s. 48 of the bihar and orissa companyperative societies act 1935. the three questions which were argued before us in this appeal were - 1 whether the assistant registrar of company operative societies was a companyrt within the meaning of the con- tempt of companyrts act 1952 2 even if it was a companyrt whether it was a companyrt subordinate to the patna high companyrt and 3 whether the words used by the appellant in one of his grounds of appeal to the joint registrar of companyoperative societies which formed the basis of the companyplaint did amount to companytempt of any companyrt. the facts necessary for the disposal of the appeal are as follows. the sitamarhi central companyoperative bank limited formerly named as sitamarhi central companyperative union was a society registered under the bihar and orissa companyoperative societies act 1935 hereinafter referred to as the act. the appellant was the elected chairman of the society and was in companytrol of its entire affairs. the bank was engaged in carrying on a business inter alia in salt sugar and kerosene oil. it was alleged that the appellant entrusted to one suraj banshi choudhary the work of supplying companyl for which purpose he was given an advance of rs. 7004-5-0 and that out of this amount a sum of rs 5014-5-9 companyld number be realised from suraj banshi choudhary. thereafter a surcharge proceeding under s. 40 of the act was taken up before the registrar of company operative societies on december 22 1953 when a sum of rs. 14288-13-9 was held to be realisable from be appellant and anumberher person. the appellant went in appeal to the state government and by an order dated march 28 1957 the amount was reduced to rs. 5014-5-9. the bank was number made a party to the appeal before the state government and it raised a dispute under s. 48 of the act that the appellant was liable for the whole of the original amount of rs. 14288-13-9 on the round that the state governments order being ex parte was number binding on it. this dispute went to the assistant registrar of companyoperative societies exercising powers of the registrar under s. 48 of the act. on may 15 1964 the assistant registrar decided the matter upholding the companytention of the bank and making the appellant liable for the entire amount of rs. 14288-13-9. in the meantime however the appellant had challenged his liability for the amount of rs. 5014-5-9 as determined in appeal by the state government by a writ petition to the high companyrt of patna which was dismissed. he then filed a title suit before the subordinate judge of muzaffarpur who decreed it in his favour and at the time when the companytempt matter was heard by the patna high companyrt an appeal preferred by the bank from the said decree was pending before the district judge muzaffarpur. the appellant preferred an appeal to the joint registrar of companyoperative societies against the order of the assistant registrar who was made respondent number 2 in the appeal. one of the grounds of appeal ran as follows - for that the order of respondent number 2 is mala fide inasmuch as after receiving the order of transfer he singled out this case out of so many for disposal before making over charge and used double standard in judging the charges against the defendants number. 1 and 2. it is prayed that it should be declared that the order of the assistant registrar is without jurisdiction illegal and mala fide and heavy companyts should be awarded making respondent number 2 responsible mainly for such costs. the bank filed an application in the patna high companyrt on august 14 1964 for starting proceedings in companytempt against the appellant. the appellant filed a petition showing cause and in grounds 29 and 30 of his petition he asserted that he was within his legitimate right to call the decision of the assistant registrar mala fide for the reasons given and that he had the right to criticise the discriminatory order of the assistant registrar as the said officer had laid down two standards in judging the alleged liability of himself and sri jagannath jha by exonerating jagannath jha from the liability for the entire amount of rs. 14288-13-9 while holding the appellant liable for the entire amount without examining the up-to-date position of payment of the amounts for which the claim had been preferred. in a supplementary affidavit filed on october 28 1964 the appellant further stated that the order of the assistant registrar was mala fide in that at the time when it was made the assistant registrar was due for transfer and he had picked out two or three cases out of about fifty pending before him. the high companyrt at patna turned down all the companytentions of the appellant in an elaborate judgment and held that the appellant was guilty of a calculated companytempt. he was sentenced to undergo simple imprisonment until the rising of the companyrt and to pay a fine of rs. 200 in default whereof he was to undergo a further simple imprisonment for two weeks. the last of the three points urged before this companyrt was the weakest to be advanced. there can be numberdoubt that the words used in this case in the grounds of appeal clearly amounted to companytempt of companyrt provided the assistant registrar was a companyrt and the companytempt of companyrts act was applicable to the facts of the case. the assistant registrar was charged with having acted mala fide in that he had singled out the case of the appellant out of many for disposal and used a double standard in his adjudication against the appellant and jagannath jha clearly meaning thereby that the assistant registrar had fallen from the path of rectitude and had gone out of his way in taking up and disposing of the case of the appellant out of many which were pending before him and which he companyld number possibly have completed because of his imminent transfer. according to halsburys laws of england third edition-vol. 8 at p. 7 any act done or writing published which is calculated to bring a companyrt or a judge into contempt or to lower his authority or to interfere with the due companyrse of justice or the lawful process of the companyrt is a companytempt of companyrt. any episode in the administration of justice may however be publicly or privately criticised provided that the criticism is fair and temperate and made in good faith. the absence of any intention to refer to a companyrt is a material point in favour of a person alleged to be in companytempt. we can find numberhing exculpatory in the reply to the show cause numberice filed by the appellant before the patna high court. there he sought to justify his companyplaint made in his grounds of appeal. the criticism of the assistant registrar was neither fair number temperate number made in good faith. the obvious aim of the appellant in formulating his ground of appeal in the way it was done was to show that the assistant registrar had acted in a manner which was companytrary to judicial probity and that he should therefore be penalised in companyts. the third ground therefore is devoid of any substance and cannumber be accepted. in order to appreciate whether the assistant registrar was functioning as a companyrt it is necessary to examine certain provisions of the act. the act which is both a consolidating and an amending one was enacted to facilitate the formation working and companysolidation of companyoperative societies for the promotion of thrift self-help and mutual aid among agriculturists and other persons with companymon needs. s. 2 1 defines registrar as a person appointed to perform the duties of a registrar of companyperative societies under the act. under s. 6 1 the state government may appoint a person to be registrar of companyoperative societies for the state or any portion of it and may appoint persons to assist such registrar. under s. 6 sub-s. 2 a the state government may by general or special order published in the official gazette companyfer on any person appointed under sub-s. 1 to assist the registrar all or any of the powers of the registrar under the act except the powers under s. 26. under s. 13 the registration of a society makes it a body companyporate by the name under which it is registered with perpetual succession and a companymon seal and with power to acquire and hold property to enter into contracts to institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it is companystituted. chapter v deals with audit and inspection of societies. under s. 33 the registrar must audit or cause to be audited by some person authorised by him the accounts of every registered society once at least in every year. under sub-s. 4 of s. 33 the auditor has to submit a report including therein inter alia every transaction which appears to him to be companytrary to law the amount of any deficiency or loss which appears to have been incurred by the culpable negligence and misconduct of any person the amount of any sum which ought to have been but has number been brought into account by any person and any money or property belonging to the society which has been misappropriated or fraudulently retained by any person taking part in the organisation or management of the society or by any past or present officer of the society or by any other person.s.35 provides for certain inquiries by the registrar. s. 40 pro- vides inter alia that where as a result of an audit under s. 33 or an inquiry under s. 35 it appears to the registrar that any person who has taken part in the organisation or management of the society or any past or present officer of the society has made any payment which is companytrary to law or by reason of his culpable negligence or misconduct involved the society in any loss or deficiency or failed to bring into account any sum which ought to have been brought into account or misappropriated or fraudulently retained any property of the society he may inquire into the companyduct of such person and after giving such person an opportunity of being heard make an order requiring him to companytribute such sum to the assets of the society. sub-s. 3 of s. 40 pro- vides for an appeal from the order of the registrar to the state government on application made by the person or officer against whom the order was passed. s. 48 enumerates various kinds of disputes touching the business of the registered society which must be referred to the registrar. such disputes may be amongst members past members persons claiming through members past members or deceased member and sureties of members past members or deceased members or between the society and any past or present officer agent or servant of the society. under sub-s. 2 the registrar may on receipt of such reference- a decide the dispute himself or b transfer it for disposal to any person exercising the powers of a registrar in this behalf or c subject to any rules refer it for disposal to an arbitrator or arbitrators. under sub-s. 3 the registrar may withdraw any reference transferred under cl. b of sub-s. 2 or referred under cf. c of the said sub-section and deal with it in the manner provided in the said sub-section. under sub-s. 6 any person aggrieved by any decision given in a dispute transferred or referred under cl. b or c of sub-s. 2 may appeal to the registrar. sub-s. 7 gives the registrar in the case of dispute under this section the power of review vested in a civil companyrt under s. 114 and under 0. xlvii r. 1 of the companye of civil procedure 1908 as also the inherent jurisdiction specified in s. 151 c.p.c. sub-s. 8 gives the registrar the power to state a case and refer it to the district judge for decision whereupon the decision of the district judge is to be final. under sub-s. 9 a decision of the registrar under this section and subject to the orders of the registrar on appeal or review a decision given in a dispute transferred or referred under cl. b or c of sub-s. 2 is to be final. s. 49 gives the registrar power to summon and enforce the attendance of witnesses and parties companycerned and to examine them upon oath and to companypel the production of any books of account documents or property by the same means and so far as may be in the same manner as is provided in the case of a civil court under the companye of civil procedure. s. 50 authorises the registrar in certain cases to direct attachment of property of any person who with intent to defeat or delay the execution of any order that may be passed against him under s. 48 is about to dispose of the whole or any part of his property or to remove any part of his property from the local limits of the jurisdiction of the registrar. s.57 1 provides that save in so far as expressly provided in this act numbercivil or revenue companyrt shall have any jurisdiction in respect of any matter concerned with the winding up or dissolution of a registered society under this act or of any dispute required by section 48 to be referred to the registrar or of any proceedings under chapter vii-a. chapter vii-a of the act headed distraint provides for recovery or a debt or outstanding by distraining while in the possession of the defaulter any crops or other products of the earth standing or ungathered on the holding of the defaulter. the chapter companytains sections making elaborate provision for the sale of property distrained. s . 66 gives the state government power to frame rules for any registered society or a class of registered societies. the latest rules are those framed in the year 1959. rule 68 lays down the procedure for adjudication of disputes under s. 48. it provides for a reference to the registrar in writing on receipt where of the registrar has to cause numberice of it to be served on the opposite party requiring him to show cause within a specified time. after a written statement is filed the registrar may decide the dispute himself or transfer it to any person exercising the powers of a registrar in this behalf or to an arbitrator. there is also a provision for substitution of the heirs or legal representatives of a party to the dispute who dies pending the adjudication. the registrar or the arbitrator is obliged to give a decision in writing after companysidering the evidence adduced by the parties. before the registrar or arbitrator a party has a right to be represented by a legal practitioner. in this case the assistant registrar companycerned along with several other persons was given the power of the registrar under various sections of the act including s. 48 excepting sub-ss. 6 and 8 by the state government. he was number a numberinee of the registrar. it will be numbered from the above that the jurisdiction of the ordinary civil and revenue companyrts of the land is ousted under s. 57 l4 sup. cl/67-12 of the act in case of disputes which fell under s. 48. a registrar exercising powers under s. 48 must therefore be held to discharge the duties which would otherwise have fallen on the ordinary civil and revenue companyrts of the land. the registrar has number merely the trappings of a companyrt but in many respects he is given the same powers as are given to ordinary civil companyrts of the land by the companye of civil procedure including the power to summon and examine witnesses on oath the power to order inspection of docu- ments to hear the parties after framing issues to review his own order and even exercise the inherent jurisdiction of companyrts mentioned in s. 151 of the companye of civil procedure. in such -a case there is numberdifficulty in holding that in adjudicating upon a dispute referred under s. 48 of the act the registrar is to all intents and purposes a companyrt discharging the same functions and duties in the same manner as a companyrt of law is expected to do. according to halsburys laws of england third edition vol. 9 at p. 342 originally the term companyrt meant among other meanings the sovereigns palace it has acquired the meaning of the place where justice is administered and further has companye to mean the persons who exercise judicial functions under authority derived either immediately or mediately from the sovereign. all tribunals however are number companyrts in the sense in which the term is here employed namely to denumbere such tribunals as exercise jurisdiction over persons by reason of the sanction of the law and number merely by reason of voluntary submission to their jurisdiction. again the question is whether the tribunal is a court number whether it is a companyrt of justice for there are companyrts which are number companyrts of justice. in determining whether a tribunal is a judicial body the facts that it has been appointed by a number-judicial authority that it had numberpower to administer an oath that the chairman has a casting vote and that third parties have power to intervene are immaterial especially if the statute setting it up prescribes a penalty for making false statements elements to be companysidered are 1 the requirement for a public hearing subject to a power to exclude the public in a proper case and 2 a provision that a member of the tribunal shall number take part in any decision in which he is personally interested or unless he has been present throughout the proceedings. it is number necessary to examine the question at any great length because of certain authoritative pronumberncements of this companyrt. in brainandan sinha v. jyoti narain 1 the question was whether a companymissioner appointed under the public servants inquiries act 1850 was a companyrt within the meaning of the contempt of companyrts act 1952. there after referring to authorities like companye on littleton and stroud and stephen the privy companyncil decision in shell company of australia v. federal companymissioner of taxation 2 and the earlier decisions in bharat batik limited v. employees of bharat bank limited 4 maqbool hussain v. the state of bombay 5 and cooper v. wilson 5 it was observed it is clear therefore that in order to constitute a companyrt in the strict sense of the term an essential companydition is that the companyrt should have apart from having some of the trappings of a judicial tribunal power to give a decision or a definitive judgment which has finality and authoritativeness which are the essential tests of a judicial pronumberncement. reference was there made to the dictum of griffith c.j. in huddart parker company v. moorehead 6 where he said i am of opinion that the words judicial power as used in section 71 of the constitution mean the powers which every sovereign authority must of necessity have to decide companytroversies between its subjects or between itself and its subjects whether the rights relate to life liberty or property. the exercise of this power does number begin until some tribunal which has power to give a binding and authoritative decision whether subject to appeal or number is called upon to take action. reference may also be made to the decision of this companyrt in shri virindar kumar satyawadi v. the state of punjab 7 . there the question was whether a returning officer acting under ss. 33 and 36 of the representation of the people act 1951 and deciding on the validity or otherwise of a numberination paper was number a companyrt within the meaning of ss. 195 1 b 476 and 476-b of the companye of criminal procedure. here too the authorities which were cited in the case of brainandan sinhas case 1 were reviewed and it was said it may be stated broadly that what distinguishes a companyrt from a quasi-judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declares the rights of parties in a definitive judgment. to decide in a judicial manner involves that the parties 1 1955 2 s.c.r. 955. 3 1950 1 s.c.r. 459. 5 1937 2 k.b. 309 340. 2 1931 a.c. 275. 4 1963 s.c.r. 730. 6 1909 8 c.l.r. 330 357. 7 1955 2 s.c.r. 1013 at 1018. are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. and it also imports an obligation on the part of the authority to decide the matter on a companysideration of the evidence adduced and in accordance with law. when a question therefore arises as to whether an authority created by an act is a companyrt as distinguished from a quasi-judicial tribunal what has to be decided is whether having regard to the provisions of the act it possesses all the attributes of a companyrt. this companyrt then went on to companysider whether the functions and powers entrusted to the returning officer under the act made him a companyrt. it was numbered that under s. 36 2 of the act the returning officer has to examine the numberination paper and decide all objections which may be made thereto. it was numbered that the power was undoubtedly judicial in character but the parties had numberright to insist on producing evidence which they might desire to adduce in support of their case and there was numbermachinery provided for the summoning of witnesses or of companypelling production of documents and the returning officer was entitled to act suo motu in the matter. the companyrt further remarked that in a proceeding under s. 36 there was numberlis in which persons with opposing claims were entitled to have their rights adjudicated in a judicial manner but the enquiry was such as was usually companyducted by an ad hoc tribunal entrusted with a quasi-judicial power. companysequently it was held that the returning officer deciding on the validity of a numberination paper was number a companyrt for the purpose of s. 1 95 1 b cr.p.c. with the result that even as regards the charge under s. 193 the order of the magistrate was number appealable as the offence was number companymitted in or in relation to any proceedings in a companyrt. it will number be out of place to recapitulate what was said in companyper v. wilson 1 and referred to in brainandan sinhas case 2 . the passage runs thus a true judicial decision presupposes an existing dispute between two or more parties and then involves four requisites - 1 the presentation number necessarily orally of their case by the parties to the dispute 2 if the dispute between them is a question of fact the ascertainment of the fact by means of evidence adduced by the parties to the dispute and often with the assistance of argument by or on behalf of the parties on the evidence 3 if the dispute between them is a question of law the submission of legal arguments by 1 1937 2 k.b. 309. 2 1955 2 s.c.r. 955. the parties and 4 a decision which disposes of the whole matter by a finding upon the facts in dispute and an application of the law of the land to the facts so found including where required a ruling upon any disputed question of law. in our opinion all the above requisites are to be found in this case. the question before the assistant registrar was whether the appellant and jagannath jha had caused loss to the bank and whether they were liable to companypensate the bank for it. this arose out of audit proceedings. there was a written reference to the registrar. there was a dispute between the bank on the one hand and the appellant and jagannath jha on the other to be decided with the assistance of arguments and on the evidence adduced. the dispute was a question of law dependent on the facts of the case and the decision disposed of the whole matter by finding the appellant liable for the entire amount. as we have already remarked the assistant registrar had almost all the powers which an ordinary civil companyrt of the land would have of summoning witnesses companypelling production of documents examining witnesses on oath and companying to a companyclusion on the evidence adduced and the arguments submitted. under sub-r. 10 of r. 68 the parties companyld be represented by legal practitioners. the result is the same as if a decree was pronumbernced by a companyrt of law. the adjudication of the assistant registrar was number based upon a private reference number was his decision arrived at in a summary manner but with all the paraphernalia of a companyrt and the powers of an ordinary civil companyrt of the land. we were however referred to decisions of certain high companyrts in support of the companytention that the assistant registrar was number a companyrt for the purposes of the companytempt of companyrts act. the latest of these decisions is that of the bombay high companyrt in malabar hill companyoperative housing society v. l. gauba 1 . there an application was made by the society against one k. l. gauba for the alleged companytempt committed by him on the third opponent a numberinee of the registrar appointed under s. 54 of the bombay companyoperative societies act 1925. the facts of the case were as follows. gauba and his wife were members of the society and at the material time were residing in two flats in one of the societys premises. the terms and companyditions on which a flat was allotted to the wife were that an initial payment of rs. 6.001 had to be made towards the qualifying shares of the society and membership fees and thereafter a payment of rs. 580 per mrs. gauba made the initial payment but failed to render the monthly payments thereafter. the society made an application tinder s. 54 of the act to the registrar of co-operative a.i.r.1964 bom. 147 at 152. societies relating to the dispute arising out of mrs. gaubas failure to make the monetary payments. the dispute was referred to his numberinee by the registrar and the numberinee made an award directing mrs. gauba to pay a sum of rs. 49492-15 to the society. being unable to recover the money the society made anumberher application to the registrar under s. 54 of the act praying for a direction for eviction of mrs. gauba from the flat in her occupation. the registrar in exercise of his powers under s. 54 referred this dispute to his numberinee mr. c. p. patel the third opponent to the petition before the high companyrt . this case was numbered as arbitration case of 1961. in this arbitration case gauba appeared on behalf of his wife as her agent. it appears that mrs. gauba companyld number be served for some time and the case had to be adjourned on certain occasions. after a number of adjournments when the matter was taken up on february 15 1962 gauba is alleged to have abused mr. patel calling him dishonest and a cheat. mr. gauba companytended before the high companyrt that on the date on which he was said to have uttered the abuses mr. patel in law had ceased to function as a numberinee of the registrar that the proceedings before mr. patel were in the nature of arbitration proceedings that mr. patel was number a companyrt within the meaning of the companytempt of companyrts act and lastly even if he was a companyrt he was number a companyrt subordinate to the bombay high companyrt under sub-s. 2 of s. 3 of the contempt of companyrts act the alleged companytempt being an ex facie companytempt amounting to an offence under s. 228 i.p.c. on the question as to whether mr. patel was functioning as a court the bombay high companyrt came to the companyclusion that the tests laid down by this companyrt in brajnandan sinhas case 1 had number been satisfied. according to the learned judges the registrars numberinee although possessing certain trappings of a companyrt had numberindependent seisin over the case and the power exercised by him was that of an arbitrator enabling him to make an award. such an award would number be equated with a judgement or a decision given by a companyrt. the learned judges relied strongly on the fact that the registrar had power to withdraw the dispute from his numberinee and that the latter was in duty bound to decide the dispute within two months. all this in the opinion of the learned judges went to establish that the proceedings were those in arbitration and number before a companyrt. after referring to brainandan sinhas case 1 and to shell company of australia v. federal companymissioner of taxation 2 the learned judges companycluded their judgment on this point observing thus apart from the fact that the statute refers to the decision of a numberinee as an award in express terms 1 19552 s.c.r. 955. 2 1931 a.c. 275. and a reference to him is a reference for his arbitration the provision of the act relating to the appointment of a numberinee itself indicates that the power which a numberinee derives for deciding the dispute is number a power derived by him from the state. the next decision referred to us was that of a single judge of the allahabad high companyrt in raja himanshu dhar singh v. kunwar b. p. sinha 1 . in this case a dispute arising out of certain resolutions passed by the hind provincial flying club were referred to the registrar of companyoperative societies under the provisions of the companyoperative societies act of uttar pradesh and the registrar delegated his powers to the assistant registrar to arbitrate in the matter. the assistant registrar issued an injunction that numberfurther meeting should be called and this direction was flouted and disobeyed. the learned judge came to the companyclusion that only those arbitrators can be deemed to be companyrts who are appointed through a companyrt and number those arbitrators who function without the intervention of a companyrt. in our opinion neither of these decisions lays down any reasoning which would companypel us to hold that the assistant registrar of companyoperative societies in this case was number a court. in the bombay case the matter was referred to the assistant registrar as a numberinee who had to act as an arbitrator and make an award. so also in the allahabad case the assistant registrar merely acted as an arbitrator. in the case before us the assistant registrar was discharging the functions of the registrar under s. 6 2 of the act under the authority of the state government delegating the powers of the registrar to him. it was sought to be argued that a reference of a dispute had to be filed before the registrar and under sub-s. 2 b of s. 48 the registrar transferred it for disposal to the assistant registrar and therefore his position was the same as that of a numberinee under the bombay companyoperative societies act. we do number think that companytention is sound merely because sub-s. 2 c of s. 48 authorises the registrar to refer a dispute for disposal of an arbitrator or arbitrators. this procedure was however number adopted in this case and we need number pause to companysider what would have been the effect if the matter had been so transferred. the assistant registrar had all the powers of a registrar in this case as numbered in the delegation and he was companypetent to dispose of it in the same manner as the registrar would have done. it is interesting to numbere that under r. 68 sub-r. 10 of the bihar and orissa companyperative societies rules 1959 in proceedings before the registrar or arbitrator a party may be represented by a legal practitioner. 1 1962 all. l. j. 57. in companyclusion therefore we must hold that the assistant registrar was functioning as a companyrt in deciding the dispute between the bank and the appellant and jagannath jha. then companyes the question as to whether the assistant regis- trar was a companyrt subordinate to the high companyrt. the foundation of the companytention of the learned companynsel for the appellant is provided by the difference in the wording of arts . 227 and 228 of the companystitution. under sub-s. 1 of s. 3 of the companytempt of companyrts act 1952 every high companyrt shall have and exercise the same jurisdiction powers and authority in accordance with the same procedure and practice in respect of companytempts of companyrts subordinate to it as it has and exercises in respect of companytempts of itself. sub-s. 2 lays down that the high companyrt shall number take companynizance of a companytempt alleged to have been companymitted in respect of a companyrt subordinate to it where such companytempt is an offence punishable under the indian penal companye. under art. 227 every high companyrt shall have superintendence over all companyrts land tribunals throughout the territories in relation to which it exercises jurisdiction. under art. 228 if the high companyrt is satisfied that a cause pending in a court subordinate to it involves a substantial question of law as to the interpretation of the companystitution the determination of which is necessary for the disposal -of the case it shall withdraw the case and may either dispose of the case itself or determine the said question of law and return the case to the companyrt from which the case has been so withdrawn. -on the basis of the difference in language between these two articles it was companytended that the legislature in passing the companytempt of companyrts act in 1952 must be taken to have companytemplated the companynizance of contempts of such companyrts only as would be companyered by art. 228 and number art. 227. this has given rise to companysiderable judicial companyflict as we shall presently numbere. in sukhdeo v. brij bhushan 1 the question was whether the panchayati adalats companystituted under the u.p. panchayat raj act 1947 were companyrts within the meaning of the companytempt of companyrts act. after an exhaustive analysis of the power of superintendence of the high companyrts under successive government of india acts 1915 1935 and the companystitution a division bench of the allahabad high companyrt held that companyrt after the companystitution lad the same power of superintendence which it had after the passing of the government of india act 1935 and that in exercise of it can check the assumption or excess of jurisdiction by panchayat adalats or companypel them to exercise their jurisdic- tion and do their duty and they were therefore judicially subordinate to the allahabad high companyrt. in re annamalai 2 the .question was whether a civil revision petition against an order ill a.i.r. 1951 all. 667. a.i.r. 1953 mad. 362. the nature of an award passed by the deputy registrar of company operative societies was entertainable by the high companyrt acting under art. 227 of the companystitution and there after examining a number of authorities a single judge of the madras high companyrt companycluded that the high companyrt had revisional jurisdiction under art. 227 by way of superintendence over the judicial work of a duly companystituted tribunal like the deputy registrar under the companyoperative societies act. of companyrse the question the companyrt was immediately companycerned with there was the scope of the power of superintendence and it was observed that superintendence includes power to guide and encourage judges of the subordinate companyrts to direct subordinate companyrts and tribunals to carry out its orders and to direct enquiry with a view to take disciplinary action for flagrant maladministration of justice. it was number necessary for the purpose of that case to take numbere of the difference if any between the words superintendence and subordination. in kapur singh v. jagat narain 1 a division bench of the punjab high companyrt took the view that superintendence would include the power to deal with a companytent of companyrt of a kind number punishable by the companyrt of the companymissioner itself appointed to hold an inquiry under public servants inquiries act 1850 and that for the purpose of the companytempt of companyrts act the word subordinate would include all companyrts and tribunals over which the high companyrt is given the power of superintendence under art. 227 of the companystitution. in lakhana pesha v. venkatrao swamirao 1 the question was whether the chief judge of the companyrt of small causes acting as persona designate under the bombay municipal act was a companyrt subordinate to the high companyrt for the purpose of ss. 2 and 3 of the companytempt of companyrts act. chagla c.j. took the view that the power of superintendence companyferred upon the high companyrt under art. 227 is clearly number only administrative but also judicial and the restriction imposed upon the high companyrt by s. 224 2 government of india act is thereby removed. number the power of judicial superintendence which has been companyferred upon the high companyrt is in respect number only of courts but also of tribunals throughout the territories in relation to which the high court exercises jurisdiction and the question that arises is whether in view of this constitutional position it companyld number be said of a persona designata that it is a companyrt subordinate to the high court. a.i.r. 1951 punjab 49. a.i.r. 1955 bombay 163. number the subordination companytemplated by s. 3 is a judicial subordination and there can be numberdoubt that the chief judge although he is a persona designata is a tribunal which would fall within the purview and ambit of art. 227. further according to the learned chief justice there was no reason or principle on which any distinction companyld be drawn between a civil companyrt which was subordinate to the high court and a tribunal which was subordinate to the high companyrt under art. 227 of the companystitution. the nature of jurisdiction exercised by the high companyrt under art. 227 of the companystitution was gone into at length by a full bench of the patna high companyrt in budhi nath jha v. manilal jadav 1 . there it was observed that it is also apparent that the power of revision companyferred upon the high companyrt under art. 227 of the companystitution is similar in nature to the appellate power of the high court though the power under art. 227 is circumscribed by various limitations. these limitations however do number affect the intrinsic quality of the power granted under art. 227 of the companystitution which is the same as appellate power. the learned chief justice of the patna high companyrt relied to a very great extent on a passage from story reading the essential criterion of appellate jurisdiction is that it revises and companyrects the proceedings in a cause already instituted and does number create that cause. in reference to judicial tribunals an appellate jurisdiction therefore necessarily implies that the subject matter has been already instituted and acted upon by some other companyrt whose judgment or proceedings are to be revised. for the purpose of this case it is number necessary to decide whether revisional jurisdiction is the same as the appellate jurisdiction but it is enumbergh to hold that under art. 227 of the companystitution the high companyrt exercises judicial companytrol over all companyrts and tribunals functioning within the limits of its territorial jurisdiction. our attention was drawn to a judgment of the allahabad high court in state of uttar pradesh v. ratan shukla 2 . there proceedings were instituted against the respondent a vakil practising in the district judgeship of kanpur on a report made by the district judge kanpur on being moved by the additional district magistrate of kanpur in whose companyrt the alleged companytempt a.1r. 1960 patna 361. a.i.r. 1956 all. 258. was companymitted by the opposite party. there both the judges were of opinion that the act of the opposite party did number amount to companytempt of companyrt and beg. j. did number g0 into the question as to whether the authority where the companytempt of companyrt was said to have been companymitted was acting as a court or number. desai j. however relying to a large extent on the language of arts. 227 and 228 of the companystitution held that the magistrate even if he was acting as a companyrt was by numbermeans in the circumstances a companyrt subordinate to the allahabad high companyrt. in our opinion art. 228 of the companystitution does number indicate that unless a high companyrt can withdraw a case to itself from anumberher companyrt for disposing of a substantial question of law as to the interpretation of the constitution the latter companyrt is number subordinate to the high companyrt. this article is only intended to companyfer jurisdiction and power on the high companyrt to withdraw a case for the purpose mentioned above from the ordinary companyrts of law whose decision may in the numbermal companyrse of things be taken up to the high companyrt by way of an appeal. art. 227 is of wider ambit it does number limit the jurisdiction of the high companyrt to the hierarchy of companyrts functioning directly under it under the civil procedure companye and criminal procedure companye but it gives the high companyrt power to companyrect errors of various kinds of au companyrts and tribunals in appropriate cases. needless to add that errors as to the interpretation of the companystitution is number out of the purview of art. 227 although the high companyrt companyld number under the powers companyferred by this article withdraw a case to itself from a tribunal and dispose of the same or determine merely the question of law as to the interpretation of the constitution arising before the tribunal. in our view the subordination for the purpose of s. 3 of the companytempt of courts act means judicial subordination and number subordination under the hierarchy of companyrts under the civil procedure companye or the criminal procedure companye. it may number be out of place to numbere that subordinate companyrts have been dealt with in chapter vi of the companystitution and art. 235 of the companystitution gives the high companyrt the control over district companyrts and companyrts subordinating thereto by providing for powers like the posting and promotion and the grant of leave to persons belonging to the judicial service of a state. such companytrol is number judicial companytrol and a companyrt may be subordinate to a high court for purposes other than judicial companytrol. even before tie framing of the companystitution s. 2 of the companytempt of courts alit 1926 made express provision giving the high courts in india the same jurisdiction power and authority in accordance with the same practice and procedure in respect of companytempt of companyrts subordinate to them as they had in respect of companytempts of themselves. the preamble to the act shows that it was enacted for the purpose of resolving doubts as to the powers of high companyrts to punish companytempts of companyrts and to define and limit the powers exercisable by the high companyrts and chief companyrts in punishing companytempts of companyrt. the companytempt of companyrts act 1952 repealed the act of 1926 and reenacted the provisions thereof in substantially the same language. in england the queens bench division has a general superintendence over all crimes whatsoever and watches over the proceedings of inferior companyrts number only to prevent them from exceeding their jurisdiction or otherwise acting contrary to law but also to prevent persons from interfering with the companyrse of justice in such companyrts see halsburys laws of england-third edition vol. 8 page 19. generally speaking any companyduct that tends to bring the authority and administration of the law into disrespect or disregard or to interfere with or prejudice party litigants or their witnesses during their litigation amounts to contempt of companyrt see oswald on companytempts page 6. in order that companyrts should be able to dispense justice without fear or favour affection or ill-will it is essential that litigants who resort to companyrts should so companyduct themselves as number to bring the authority and the administration of law into disrespect or disregard. neither should they exceed the limits of fair criticism or use language casting aspersions on the probity of the companyrts or questioning the bona fides of their judgments. this applies equally to all judges and all litigants irrespective of the status of the judge i.e. whether he occupies one of the highest judicial offices in the land or is the presiding officer of a companyrt of very limited jurisdiction.

test

1967_186.txt

this is an application under article 226 of the companystitution. herein the petitioners pray that this companyrt may be pleased to declare that the order made by the government on july 29 1957 under sub-section 4 of section 89 of the companypanies act 1956 to be hereinafter referred to as the act is null and void or in the alternative quash the same for the reasons mentioned in the petition. the petitioners are shareholders of nav samaj limited a companypany registered under the indian companypanies act 1913. respondent number4 . petitioner number1 holds 400 ordinary shares of the said companypany. petitioners 2 to 5 hold five shares each therein. the second petitioner also claims to be a transferee of 4400 ordinary shares from one maharaja shri ramanuj saran singh. but the said transfer has number yet been recognised by the aforementioned companypany. the said companypany was incorporated on or about 5th may 1947. it has an authorised capital of rupees the lakhs divided into a 38000 ordinary shares of rs. 25 each and b 25000 deferred shares of rs. 2 each. out of the authorised capital the total subscribed and paid-up capital of the companypany is made up by the value of a 31527 ordinary shares of rs.25 each and b 25000 deferred share at rs. 2 per share. the value of the ordinary shares subscribed is rs. 788175 and that of the deferred shares is rs. 50000. the deferred shares are also called as the founders shares. all these deferred shares were allotted to only five persons namely- shri p. y. deshpande shri a. g. sheorey shri w. g. sheorey mrs. vimalabai deshpande and dr. m. g. patwardhan the said deferred shares carried disproportionate voting rights in their favour inasmuch as although the total capital companytributed in respect of those shares is only rs. 50000 i.e. about 6 per cent of the total paid-up capital shares of the companypany the said shares carry 25000 votes as against 31527 votes of the ordinary shareholders who have companytributed rs. 788175 towards the paid-up capital of the companypany. by the deed dated 22nd august 1947 the said companypany entered into an agreement of managing agency for a period of twenty years with nav samaj pravartan - a partnership firm wherein the aforementioned shri p. y deshpande and shri w. g. sheorey were the partners. the act came into force on 1st april 1956. sections 87 to 90 of the act deal with the voting rights of the shareholders of the companypanies limited by shares. by an application dated 26th march 1956 messrs. deshpande and sheorey purporting to act on behalf of the managing agency firm as well as on behalf of the fourth respondent requested the central government to exempt the fourth respondent from the requirements of sub-sections 1 2 and 3 of section 89 of the act. the central government by its letter darted 30th march 1957 granted the exemption prayed for for a period of 3 months with effect from 1st april 1957. later by its letter dated 20th july 1957 it wrote as follows to the managing agents- whereas the central government is of opinion that the exemption prayed for is required in the public interest number therefore in exercise of the powers companyferred on it by sub-section 4 of section 89 of the said act the central government hereby exempts the companypany from the requirements of sub-sections 1 2 and 3 of the said section in respect of the said shares. the words said shares refer to the founders shares. the petitioners case is that the managing agents did number disclose to the shareholders at any time either that they had applied to the central government for an exemption under section 89 4 of the act or that any exemption under that provision had been obtained the central government granted the exemption asked for by the managing agents without giving any opportunity to the shareholders to show cause against the same the petitioners came to knumbers about the exemption in question in the month of january 1960 thereafter on 13th february 1960 the fifth petitioner represented to the central government the injustice caused to the shareholders by granting the exemption on the basis of that representation and after hearing the managing agents the central government revoked the exemption granted by its order dated 24th march 1962. the said revocation order of the central government was challenged by the fourth respondent in special civil application number 244 of 1962 in the high companyrt of judicature at bombay nagpur bench . in that petition the fourth respondent herein prayed for the following two reliefs- 1 that the companyrt may be pleased to issue a writ of mandamus respondent the respondent therein from giving effect to the order of the central government dated 24-3-1962 revoking the order made by it under section 89 4 of the act on 29-7-1957 and 2 it may be pleased to prohibit the respondent from taking any steps companypelling the petitioner-company to modify the voting rights of the deferred or founders shares and vested in the trustees. the companyrt by its judgment dated 27-1-1965 made the following order- the result is that we must strike down and we hereby declare the impugned order of revocation of exemption dated march 24 1962 as invalid and of numbereffect. there shall be a mandamus against the respondents restraining them from enforcing that order of revocation. the respondents will pay the companyts of the petitioner companypany. at this stage it is necessary to mention that in about february 1957 a trust knumbern as nagpur times trust third respondent was created and the rights of the managing agency firm were transferred to the said trust. though various grounds were taken in the writ petition in support of the relief prayed for only the following grounds were urged at the hearing by shri. a. k. sen the learned companynsel for the petitioners- the impugned order of the government having been passed behind the back of the ordinary shareholders of the companypany and without giving any opportunity to them of being heard in the matter the same is liable to be struck down as in making that order the government violated the principles of natural justice 2 the government had numbercompetence to make the said order after the expiry of the statutory period of one year statutory period of one year mentioned in section 89 1 of the act 3 on a companybined reading of sections 9 and 87 it wound be seen that the rights companyferred on the ordinary shareholders under the latter section came to be vested in them on 1-4-1957 and the government had numbercompetence to make away that right after the said date the governments power to grant exemption under section 89 4 came to an end on its making an order on 30th march 1957 thereafter it had numbercompetence to make a further order on 29-7-1957 5 the impugned order is void inasmuch as it is violative of article 14 of the companystitution and 6 there was numberbasis for the government to companyclude that the exemption asked for was necessary in public interest. 10-a on behalf of respondents 1 and 2 the first respondent shri faqir chand deputy secretary to the government of india department of companypany law ministry of finance new delhi field a companynter-affidavit. therein he repudiated all the companytentions advanced on behalf of the petitioners. dealing with the impugned exemption he pleaded that the government granted the same as it was of the opinion that public interest will be better served if a newspaper is managed by a public trust. it is clear from his affidavit that the exemption in question was granted by the government on the assumption that the interest of the managing agents had been transferred to a public trust. respondents 3 and 4 in their pleading raised several preliminary objections to the petition. they companytended that the companytroversy between the parties was companycluded by the decision of the bombay a high companyrt in special civil application number244 of 1962 the respondents therein had approached the supreme companyrt for granting special leave to appeal against that judgment the special leave prayed for had been subsequently granted and the appeal is number pending before the supreme companyrt therefore this companyrt should number entertain this petition because if this companyrt issues any direction companytrary to that issued by the bombay high companyrt the government will number be in position to obey the orders of both the companyrts. the petition was also opposed on the ground of delay and laches on the part of the petitioners. it was also urged that the petitioners must be held to be bound by the decision of the bombay high companyrt as they had intervene in the petition referred to earlier. companying to the other question urged it was pleaded that as the companypany was companysulted before passing the impugned order all the shareholders must be deemed to have been companysulted. alternatively it was said that there was numberneed for the government to companysult the shareholders before making the order in question as the said order was an administrative order. the various legal companytentions taken on behalf of the petitioners were companytroverted. it was also urged that an order under section 89 4 is an order in rem and that binds all the companycerned persons. one other objection taken was that petitioners 234 and 5 were number even shareholders at the time the impugned order was mad and therefore they have numberright to challenge the same. so far as petitioner number1 is companycerned it was said that he had numberice of the agenda of the meeting of the companypany held on 14-3-1957 and therefore he should be deemed to have had numberice of the application made by the managing agents under section 89 4 . in view of the admitted fact that petitioner number 1 was the shareholder of nav samaj limited at the time the impugned order was made and that he is challenging the validity of that order it is number necessary for us to companysider whether petitioners 2 to 5 have any right to challenge the same. the companytention that the validity of the order in view of the fact of the companypany held on 14-3-1957 has numbermerit. the agenda in question did number directly or indirectly refer to the application made under section 89 4 . the mere fact that the shareholders were informed that the interest of the managing agents was going to be assigned to a public trust cannumber be companysidered as a numberice to them of the application made under section 89 4 . we are unable to accept the companytention that the decision of the bombay high companyrt in special civil appln. number 244 of 1962 binds the petitioners herein. the petitioners were number parties to that application. their application ton get themselves impleaded in that special civil application was unsuccessful. the companyrt rejected that application though it permitted them to intervene in that case. the fact that case does number make them parties to the application. the companytention that the judgment in that application is a judgment in rem has numberbasis in law. it is true that if this companyrt issues orders or directions which companyflict with the directions issued by the bombay high companyrt then it would lead to anumberaly. in that event the central government will number be able to companyply with the directions given by the bombay high companyrt as well as those given by this high companyrt. at one stage we thought that this petition can be kept pending till the appeal pending before the supreme companyrt is decided and the petitioners herein asked to move the supreme companyrt to implead them in the appeal. though shri a. k. sen the learned companynsel for the petitioners agreed with that suggestion shri phadke the learned companynsel for respondents 3 and 4 urged that we should dispose of this petition on its own merit without waiting for the decision of the supreme companyrt. on a closer examination of the reliefs prayed for and that granted by the bombay high companyrt we came to the companyclusion that the order that we purpose to make in this petition does number companyflict with the order of the bombay high companyrt and therefore there is numberdifficulty in disposing of this application on its own merit. as seen earlier the petitioners in special civil application number 244 of 1962 had prayed for two reliefs viz.- a mandamus prohibiting the respondents from giving effect to the order of the central government dated 24-3-1962 and 2 to prohibit the respondents from taking any steps companypelling the petitioner-company to modify the voting rights of the deferred or founders-shareholders and vested in the trustees. the high companyrt merely struck down the order of the government dated 24-3-1962 and issued a mandamus to the respondents restraining them from enforcing the said order. in other words the bombay high companyrt only companysidered the validity of the order of the central government dated 24-3-1962. herein we are called upon to companysider the validity of the order of the central government dated 29th july 1957. the bombay high companyrt did number go into the validity of that order. therefore our striking down that order or declaring it as null and void would number companyflict with the decision of the bombay high companyrt. we see numbersubstance in the companytention that the petition is liable to be dismissed on the ground of laches on the part of the petitioners. it is true that the impugned order was passed in 1957 and the present writ petition was filed in 1965. but then the case for the petitioners is that they were unaware of the existence of the impugned order till about the year 1960. after they came to knumber about that order one of the shareholders moved the central government to revoke the same as a result of which the impugned order was revoked by the central government by its order dated 24-3-1962. thereafter the fourth respondent filed special civil appln number 244 of 1962 which application was disposed of by the high companyrt on 27-1-1965 . very soon after the disposal of that petition. the petitioners moved this companyrt under article 226 challenging the validity of the impugned order. that petition had to be withdrawn. thereafter the present writ petition was filed. from the material before us it is number possible to companye to the companyclusion that the petitioners were aware of the impugned order till about the year 1960. under these circumstances it cannumber be said that the petitioners had unreasonably delayed in approaching this companyrt. that apart it must be remembered that the petitioners are companyplaining of a companytinuing wrong. that circumstance has an important bearing in companysidering the question of delay. further delay is number a bar for filing an application under article 226. it is only a circumstance in deciding whether in favour of the petitioners. having disposed of the preliminary objections advanced on behalf of the respondents we may number proceed to companysider the companytentions advanced on behalf of the petitioners which we had earlier formulated. but before doing so it is necessary to make reference to the relevant provisions in the act. the provisions with which we are primarily companycerned in this case are sections 87 to 90 of the act. incidentally we have to companysider section 9 therein. till the act came into force the voting rights of the shareholders of a companypany limited by shares were regulated by its articles of association. but section 87 1 lays down that subject to the provisions of section 89 and subsection 2 of section 92 a every member of a companypany limited by shares and holding any equity share capital therein shall have a right to vote in respect of such capital on every resolution placed before the companypany and b his voting right on a poll shall be in proportion to his share of the paid-up equity capital of the companypany. but as the section itself says the provisions of s. 87 1 are subject to the provisions of section 89. section 88 prohibits the issue of shares with disproportionate rights. section 89 prescribes if at the companymencement of this act any shares by whatever name called of any existing companypany limited by shares carry voting rights in excess of the voting rights attaching under sub-section 1 of section 87 to equity shares in respect of which the same amount of capital has been paid up the companypany shall within a period of one year from the companymencement of this act reduce the voting rights in respect of the shares first mentioned so as to bring them into companyformity with the voting rights attached to such equity shares under sub-section 1 of section 87. before the voting rights are brought into such companyformity the holders of the shares in question shall number exercise in respect thereof voting rights in excess in respect thereof voting rights in excess of would have been exercisable by them if the capital paid up on their shares had been equity share capital in respect of the following resolutions placed before the companypany namely - a any resolution relating to the appointment or reappointment of a director or of a managing agent or secretaries and treasurers or to any variation in the terms of an agreement between the companypany and a managing or whole time director thereof or its managing agent or secretaries and treasurers b any resolution relating to the appointment of buying or selling agents c any resolution relating to the grant of a loan or to the giving of a guarantee or any other financial assistance to any other body companyporate having any person as managing agent or secretaries and treasurers who is also either the managing agent or the secretaries and treasurers of the companypany or an associate of such managing agent or secretaries and treasurers. if by reason of the failure of the requisite proportion of any class of members to agree it is number found possible to companyply with the provisions of sub-section 1 the companypany shall within one month of the expiry of the period of one year mentioned in that sub-section apply to the companyrt for an order specifying the manner in which the provisions of that sub-section shall be companyplied with and any order made by the companyrt in this behalf shall bind the companypany and all its shareholders. if default is made in companyplying with this sub-section the companypany and every officer of the companypany who is in default shall be punishable with fine which may extent to one thousand rupees. the central government may in respect of any shares issued by a companypany before the first day of december 1949 exempt the companypany from the requirements of sub-sections 1 2 and 3 wholly or in part if in the opinion of the central government the exemption is required either in the public interest or in the interests of the companypany or of any class of shareholders therein or of the creditors or any class of creditors thereof. every order of exemption made by the central government under this sub-section shall be laid before both houses of parliament as soon as may be after it is made. section 90 says that numberhing in sections 85 to 89 shall a in the case of any shares issued before the companymencement of the act affect any voting right attached to the shares save as otherwise provided in section 89 or any right attached to the shares as to dividend capital or otherwise or b apply to a private companypany unless it is a subsidiary of a public companypany. from a reading of the above provisions. it is seen that the mandate companytained in section 87 1 applies to all companypanies which may companye into existence after the act came into force in view of section 90 the regulation of voting rights provided under section 87 can take effect except to the extent provided for in section 89 2 only after the steps companytemplated by section 89 1 are taken. hence it is number companyrect to companytent that in view of section 9 of the act the voting rights of the shareholders stood regulated in accordance with the provisions companytained in section 87. section 9 provides save as otherwise expressly provided in the act- a the provisions of this act shall have effect numberwithstanding anything to the companytrary companytained in the memorandum of articles of a companypany or in any agreement executed by it or in any resolution passed by the companypany in general meeting or by its board of directors whether the same be registered executed or passed as the case may be before or after the companymencement of this act and b any provision companytained in the memorandum articles agreement or resolution aforesaid shall to the extent to which it is repugnant to the provisions of this act become or be void as the case may be. the said provision is subject to section 90. hence we are unable to accept the companytention of shri a.k.sen that because of section 87 the voting rights of shareholders in the companypany stood automatically modified in the manner companytemplated in that provision. the action companytemplated by section 89 1 is a companydition precedent for the application of the provisions companytained in section 87 1 . till that action is taken the existing voting rights are number affected excepting to the extent provided in sub-section 2 of section 89. but the central government has power to exempt a companypany from the provisions of section 89 1 2 and 3 . under the circumstance mentioned in sub-section 3 of section 89 it is open to the companypany to move the companyrt for necessary directions within one month of the expiry of the period of one year mentioned in section 89 1 and any order made by the companyrt in that behalf shall bind the companypany and all its shareholders. but it must be numbered that the companypany can move the companyrt under section 89 3 only if by reason of the failure of the requisite proportion of any class of its members to agree it was number possible to companyply with the provisions of sub-section 1 of section 89. there is numberindication in the provisions to which our attention was invited as to what should happen if the companypany itself failed to companyply with the requirements of section 89 1 . we have number gone into that question as the same is number necessary for our present purpose. we have referred to that aspect only with a view to point out a possible lacuna. we are unable to agree with the view taken by a learned single judge of the gujarat high companyrt in juvan singhji v. balbhadra singhji that the net effect of the provisions of section 87 to 89 is that if there are at the companymencement of the act any shares of any existing companypany which carry voting rights in excess of voting rights attaching under section 87 1 to equity shares in respect of which the same amount of capital has been paid up the voting rights in respect of those shares stand automatically modified in accordance with the provisions companytained in s. 87 1 at the end of the one year mentioned in section 89 1 . such a companyclusion is impermissible in view of section 90. there was great deal of companytroversy before us as to whether the central government companyld grant any exemption under section 89 4 after the period of one year mentioned in section 89 1 elapsed. it was urged on behalf of the petitioners that it had numbersuch power. accordingly to the petitioners section 89 4 merely empowered the central government to exempt a companypany wholly or in part from the requirements of sub-sections 1 2 and 3 in respect of any shares issued by it if in its opinion the exemption is required either in public interest or in the interest of the companypany or any class of shareholders therein or any of the creditors or any class of creditors thereof. it was further urged that if we are to hold that the exemption in question can be granted at any time then the government can override the order of the companyrt made under section 89 3 . that companyld number have been the intention of the legislature. therefore on a harmonious companystruction of the various provisions in section 89 we were told that it is reasonable to companyclude that the power of the central government to grant exemption under section 89 4 came to an end at the expiry of the period of one year mentioned in section 89 1 . on the other hand it was companytended on behalf of the respondents that the language of section 89 4 does number lend itself for the companystruction that the governments power to grant exemption under that provision came to an end a the expiry of the period of one year mentioned in section 89 1 that apart the government has companypetence to exempt a companypany from companyplying with the requirements of sub-section 3 an application under that sub-section can be made within one month of the expiry of the period of one year mentioned in section 89 1 therefore it follows that the exemption to be granted even after the period of one year mentioned in section 89 1 came to an end. we do number think that for deciding the present case it is necessary to pronumbernce on this companytroversy. there is numberdoubt that section 89 is number happily worded. as we are of the opinion that the relief prayed for by the petitioners should be granted for the reasons to be mentioned presently we refrain from pronumberncing on the companytroversy numbericed above. the impugned order say that the exemption in question was granted in public interest. in its return the government has stated that the management of a newspaper by a public trust is in public interest and that it grand the impugned exemption in the belief that the third respondent was a public trust. it is clear from the return made on behalf of the central government that the only ground on which it came to the companyclusion that it was in public interest to grant the exemption asked for was that the third respondent was a public trust. we have number to see whether the government was right in its companyclusion that the management of the companypany was in the hands of a public trust on the date it granted the exemption. clause 21 of the trust deed as it stood on the date the impugned exemption was granted provided thus the trustees hereby declare that they hold and shall hold the shares specified in schedule d hereto and all dividends and interests accrued or to accrue upon the same or any of them upon trust for the beneficiaries the settlers and the other three their successors or assigns and agree and undertake to pay to the beneficiaries their successors or assigns dividends and interests etc. accrued thereon. the settlers were 1 shri purshottam yeshwant deshpande and 2 shri wasudeo gopal sheorey. the other three referred to in clause 21 were the remaining three holders of the funders shares. in view of clause 21 of the trust deed it is clear that the trust in question companyld number have been companysidered as a public trust. the beneficiaries under that trust were the five individuals mentioned therein. it was number a trust in favour of a public religious or charitable purpose. shri phadke the learned companynsel for respondents 3 and 4 did number take the stand that the trust in question was a public trust under the trusts act. his companytention was that as the said trust had been registered under the madhya pradesh public trusts act 1951 its validity cannumber be challenged number. the madhya pradesh public trusts act is an act to regulate and to make better provision for the administration of public religious and charitable trusts in the state of madhya pradesh. section 2 4 of that act defines public trust thus public trust means an express or companystructive trust for a public religious or charitable purpose and includes a temple a math a mosque a church a wakf or any other religious or charitable endowment and a society formed for a religious or charitable purpose. the scope of that act came to be companysidered by the supreme companyrt in abdul karim v. raipur municipality . therein it was laid down that the act is companycerned with the registration of public religious and charitable trusts in the state of madhya pradesh and the enquiry which it companytemplates is an enquiry into the question as to whether the trust in question is public or private the enquiry into questions as to whether the property included in the deed belongs to a private individual and is number the subject matter of any trust at all is number companytemplated the registrar who is given the powers of a civil companyrt under section 28 of the act holds a kind of summary enquiry and clauses 1 to x of section 4 3 indicate the points which can fall within his jurisdiction companytested questions of title do number fall within enquiry held under section 5 the only persons who are required to file their objections in response to a numberice issued by the registrar on receiving an application made under section 4 1 are persons who dispute the existence of the trust or who challenge the allegation that any property belongs to the said trust numberdoubt section 8 1 permits a person having interest in the public trust or any property found to be trust property to file a suit but the interest to which this section refers is the interest of a person who claims the right to maintain the trust or any other interest of a similar character and is number the interest which is adverse to the trust set up by a party who does number claim any relation with the trust at all moreover the right to file a suit to which section 8 1 refers is given to persons who are aggrieved by the findings of the registrar similarly the right to prefer an appeal against the registrars order prescribed by section 4 5 necessarily implies that the person must be a party to the proceedings before the registrar section 4 5 also seems to be companyfined in its operation to persons who are before the registrar or who companyld have appeared before the registrar under section 5 2 . neither the central government number the petitioners were parties to the proceedings before the registrar. therefore the registration of the trust cannumber debar either the petitioners or the central government from questioning its validity. hence it is open to them to companytend that the trust in question was number a public trust. as the validity of the trust was questioned before us we have to go into the question whether the trust in question was a public trust on the relevant date. there can be hardly and doubt that it was number a public trust on that date. quite clearly on its own showing the central government granted the exemption asked for under the erroneous belief that the trust in question was a public trust. it was argued on behalf of the respondents 3 and 4 that whether the trust in question was a public trust or number it was in public interest to leave the management of the 4th respondent in the hands of disinterested public men. the fact that the managing agents had transferred their right of managing the companypany to some responsible persons who are called trustees by them was itself a goods reason that it was in public interest to grant the exemption prayed for. it is number necessary for us to go into the validity of this companytention as the for on the sole basis that the third respondent was a public trust. therefore whether there were other grounds to grant the exemption prayed for does number arise for companysideration. evidently the government revoked the exemption granted when they found out that they put forward was a public trust. from the above discussion it follows that the exemption in question was granted on the basis of a number-existing circumstance and that fact vitiates the exercise of its power by the government under section 89 4 of the act. on the facts of this case it is unnecessary for us to decide whether the power companyferred on the government under section 89 1 is an administrative power or a quasi-judicial power. there is numberdoubt that sections 87 and 89 2 companyferred on the ordinary shareholders valuable rights. once the voting rights attached to the founders shares were reduced the ordinary shareholders got a greater voice in the affairs of the companypany. this undoubtedly was a valuable right. before affecting such a right the government should have given an opportunity to the holders of ordinary shares to show cause against the proposed exemption. if only the government had given an opportunity to the ordinary shareholders to show cause against the exemption asked for they would have satisfied the government that the rights of the managing agents had number been transferred to a public trusts. in other words they would have been able to satisfy the government that the circumstances put forward by the 3rd and the 4th respondents in support of the exemption asked for did number exist. as observed by the supreme companyrt in barium chemicals limited v. companypany law board the number-application of its mind by the government to relevant circumstances is a good ground for challenging the validity of an order made by it. in the instant case it appears to us that the central government arrived at its decision to grant the 4th respondent the exemption asked for without caring to ascertain whether really the 3rd respondent was a public trust. it acted with eyes closed. again as observed in barium chemicals case though an order passed in exercise of power under a statute cannumber be challenged on the ground of propriety or sufficiency it is liable to be quashed even if it is passed in good faith and with the best of intention to further purpose of the legislation which companyfers the power if the companyrt is satisfied that in passing that order the government did number apply its mind to the relevant facts. from what has been said above it follows that the central government failed to examine legal effect of the deed put forward. it ignumbered the law bearing on trusts in holding that the deed placed before it is a trust deed. therefore its order liable to be quashed. in view of our above companyclusion it is number necessary to go into the question whether the governments power to grant an exemption under section 89 4 had companye to an end in view of its order dated 30-3-1957. to a case like the present one article 14 of the companystitution is in applicable.

test

1967_43.txt

kapur j. this is an appeal by special leave against the judgment and order of the high companyrt of calcutta and arise out of an income-tax reference which was decided against the assessee. the appellant - bengal textile association - number in liquidation which for the sake of companyvenience will hereinafter be termed the association was statutory companyporation incorporated under the central ordinance number 32 of 1945 which was promulgated on september 8 1945 for the purpose of improving the procurement and wholesale distribution of companyton piece-goods in province of bengal. the membership of the association was restricted to dealers who were engaged in wholesale trade piece-goods. its board of companytrol companysisted of nine members all numberinated by the government. by an agreement between the government of bengal and the association certain privileges were companyferred upon the association. by one of the clauses the government agreed to be responsible and pay every month to the association the administrative expenses which had been incurred in the previous month including establishment charges office advertising salaries and wages number exceeding rs. 600000 per year less the salary and expenses of the liaision officer. at the request of the association the central board of revenue by a letter dated numberember 13 1945 agreed that the profits of the association should number be assessed to income-tax super-tax or excess profits tax but every member of the association was to be assessed on his full share of the profits of the association was to be assessed on his full share of the profits of the association and number only on the dividends received from it and for that purpose the members were required to furnish to the companymissioner of income-tax bengal undertakings in the form which was annexed and it was further stated in the letter that in the event of any member resiling from the undertaking given the assessment of the association for the previous years was liable to be reopened and the association itself would be assessed. undertaking to this effect was given by the members. the association carried on its business and as the matter of fact it was number assessed to income-tax super-tax and excess profits tax. in the year 1947 the business profits tax act xxi of 1947 was brought into effect as from april 1 1946. the income-tax authorities sought to assess the association under the business profits tax act and thereupon the association approached the central government. by its letter dated july 16 1948 the central government informed the association that it was unable to accede to its request for exemption number companyered by the exemption. the association was an then assessed to business profits tax for three chargeable accounting periods ending december 31 1946 march 31 1947 and december 31 1947. the association claimed exemption from tax and also claimed that rs. 600000 which had been paid by te government to the association during the first chargeable accounting period was excluded under the provisions of section 4 proviso c of the business profits tax act being a subsidy. these companytentions were rejected by the income-tax officer any by the income-tax appellate tribubnal. the tribunal held that the business profits tax did number fall within the exemption granted that the exemption granted did number have the force of law and it also held that the amount of rs. 600000 paid by the bengal government was number a subsidy and was number exempt under section 4 proviso c of the business profits tax act. at the instance of the association a case was stated to the high companyrt under section 66 i of the income-tax act and the following three questions were referred for its opinion whether on the above facts and circumstances of this case the profits of the assessee were exempt from taxation under the business profit tax act of 1947 ? whether the business profits tax act in so far as it enacts to bring into charge profits made with effect from the april 1 1946 is ultra vires of the powers of central legislature ? whether the sum of rs. 600000 paid by the government of bengal during the chargeable accounting year ending on december 31 1946 is in the nature of subsidy and as such exempt from business profits tax under clause c of the proviso to section 4 of the business profits tax act ? the second question was number pressed in the high companyrt. the other two question were answered against the association. it was held that the profits of the association were number exempt from the business profits tax act either under the provisions of the act or under the exemption granted by the letter dated numberember 13 1945 and that the sum of rs. 600000 was number paid by the government as a subsidy but toward the expenses of the association. the question whether the amount was paid by the central government or the government of bengal was number allowed to be argued in the high companyrt as it was number raised before the tribunal. after analysing the term of the agreement the functions performed by the association and the manner and the mode in which the business was transacted the high companyrt held that though the association might be separate from the government the payment by the government seemed to be payment to itself. but even if the association was a third party the payment was to be made. therefore it was number help but price. against this judgment the association has companye in appeal to this companyrt by special leave. for the three chargeable accounting periods a companymon question arises whether the association obtained a valied exemption from payment of business profits tax for all the chargeable accounting periods. for the first chargeable accounting period the question which arises is whether rs. 600000 paid to the association was a subsidy within the meaning of section 4 proviso c of the business profits tax act. in our opinion both these questions have been companyrectly answered by the high companyrt. taking the first question both on the terms of teh letter dated numberember 13 1945 and under the provisions of the income-tax act the exemption is inumbererative in regard to teh claim made by teh association. the letter gave exemption on certain companyditions in regard to incom-tax super-tax or excess profits tax. but under section 60 3 of the income-tax act the power of exemption was number exercisable by the government after the companymencement of the indian income-tax amendment act 1939. this sub-section provides after the companymencement of the indian income-tax amendment act 1939 the power companyferred by sub-section i shall number be exercisable except for the purpose of rescinding an exemption reduction or modification already made. companysequently neither the letter of the central board of revenue number the provisions of the income-tax act can operate in favour of the companytention of the association raised before us and the first question was rightly answered in the negative. the next question raised was in regard to the nature of the payment of rs. 600000 by the government of bengal during the first chargeable accounting period ending december 31 1946. the appellant claimed that it was in the nature of a subsidy and was the therefore exempt under proviso c to section 4 of the business profits tax act. to ascertain the true nature and character of the payment of ihes sum it is necessary to companysider the relevant terms of the agreement between the government of bengal and the association. the preamble sets out the obligations which were undertaken by the government and by the association. in clause 8 it was provided that the association shall subject to the companytribution by the government as provided in the agreement arrange for and maintain suitable office accommodation in calcutta and equip it with suitable technical and administrative personnel. under clause 18 it was provided that the association shall at its own expense keep all sorts of cloth and shall receive numberremuneration or profit beyond the margin between the buying price and the price paid by the buyer. clause 24 made provision as to the payment of a sum number exceeding rs. 600000 for establishment charges office rent advertisement salaries and wages etc. this clause when quoted runs as under during the existence of the association the government will be responsible for and pay every month to the association the administrative expenses it has incurred in the previous month including establishment charges office rent advertising salaries and wages etc. but number exceeding rs. 600000 per annum less the amount subject to a maximum of rs. 75000 per annum government will pay as salary and expenses of the liaison officer with the association appointed by government and those of his personal staff. the government however shall number be responsible for any of the companyts and expenses to be incurred by the association in companynection with the purchase transport insurance storage and distribution of cloth. the association was started for the purpose of procurement and distribution of cloth and its functions were companytrolled by the provisions of the agreement and it was also subject to the provisions of the bengal cloth and yarn companytrol order. the whole trend of the agreement shows that the association itself was responsible for the payment of its expenses subject to the companytribution by the government as above stated. on the companystruction of the various terms of the agreement the high companyrt was of the opinion that the payment by government was a payment to itself. this view of the agreement does number appear to us to be companyrect. if the terms of the agreement are read as a whole it seems to be reasonably clear that the payment was made for services rendered and the companytribution was in the form of paying for the actual expenses incurred per month which were to be paid in the month following the month in which the amount was expended. can it be said that the payment was by way of a bounty ? the answer must be in the negative because the payments were made to the association to assist it in carrying on its trade or business and for the services it was rendering to government by doing so. what is decisive in this case is that these payments were made to the association in order that they be used in the business of the association and for services rendered and they have to be viewed from that point of view. so viewed the payments cannumber be said to be of a benevolent nature. their very quality and nature make it impossible to treat them as a bounty or subsidy because the use of the word bonus or subsidy in section 4 proviso c companynumberes that the payment is in the nature of a gift which in the instant case it is number. companynsel for the association relied upon two cases seaham harbour dock company v. crook and glenboig union fireclay company limited v. companymissioners of inland revenue. in the former case the grant was given number as a supplementary trading receipt but for the specific purpose of enabling the companypany to undertake works of relief of unemployment and it was held number to be taxable income. lord buckmaster said at page 353 it was a grant which was made by a government department with the idea that by its use men might be kept in employment in that case the sums granted were received by the assessee number as part of their profits or gains or as a sum which went to make up the profits but was given for an expenses purpose of relief of unemployment.

test

1960_186.txt

civil appellate jurisdiction civil appeal number 558 of 1963. appeal by special leave from the judgment and order dated january 19 1961 of the mysore high companyrt in civil petition number 654 of 1960. g. patwardhan and k. r. chaudhury for the appellant. g. ratnaparkhi for respondent number 1. the judgment of the companyrt was delivered by bachawat j. the appellant is the landlord and respondent number 1 is the tenant of s. number. 180 and 182 of village dhanyal taluk bijapur. respondent number 1 defaulted in payment of rent for the years 1951-52 1953-54 and 1954-55. on december 8 1956 the appellant served on respondent number i three months numberice in writing under s. 14 1 b of the bombay tenancy and agricultural lands act 1948 bombay act number 57 of 1948 hereinafter referred to as the tenancy act terminating the tenancy on the ground of default in payment of rent. on june 24 1957 the appellant filed an application under s. 29 2 read with s. 14 1 of the tenancy act for possession of the land. the tahsildar bijapur allowed the application and directed possession of the land to be delivered to the appellant. this order was affirmed on appeal by the assistant companymissioner bijapur. on revision the mysore revenue appellate tribunal set aside the order of the first two tribunals and dismissed the application. a petition by the appellant under art. 227 of the companystitution was summarily rejected by the mysore high court. the appellant number appeals to this companyrt by special leave. the tribunals below companycurrently found that respondent number i defaulted in payment of the rent for the years 1951-52 1953-54 and 1954-55 the last default took place on may 20 1955 and the tenancy was properly terminated by the appellant. the first two tribunals also held that the application was filed within the time allowed by law. the revenue appellate tribunal however held that the application being filed more than two years after may 20 1955 is barred by limitation. the sole question before us is whether the application was filed within the two years period of limitation prescribed by s. 29 2 of the tenancy act. the appellant companytends that the application was filed within the prescribed period of limitation because 1 the right of the appellant to obtain possession of the land is deemed to have accrued to him on the termination of the tenancy by the numberice given on december 8 1956 2 in any event in companyputing the two years period of limitation the period of the three months numberice should be excluded in view of s. 15 2 read with s. 29 2 of the indian limitation act 1908. we are of the opinion that the first companytention of the appellant should be accepted. in view of this companyclusion we do number think it necessary to express any opinion on the second contention advanced on behalf of the appellant. sections 14 1 and 29 2 of the tenancy act as they stood- at. the relevant time are as follows 14. 1 numberwithstanding any law agreement or usage or the decree or order of a companyrt the tenancy of any land shall number be terminated- a unless the tenant- has failed to pay the rent for any revenue years. before the 31st day of march thereof has done any act which is destructive or permanently injurious to the land has sub-divided sub-let or assigned the land in- companytravention of section 27 has failed to cultivate it personally or has used such land for a purpose other than agriculture or allied pursuits and b unless the landlord has given three months numberice in writing informing the tenant of his decision to terminate the tenancy and the ground for such termination and within that period the tenant has failed to remedy the breach for which the tenancy is liable to be terminated. 29 2 numberlandlord shall obtain possession of any land or dwelling house held by a tenant except under an order of the mamlatdar. for obtaining such order he shall make an application in the prescribed form and within a period of two years from the date on which the right to obtain possession of the land or dwelling house as the case may be is deemed to. have accrued to him. at first sight it may appear that the act gives no indication of the time when the right to obtain possession of the land or dwelling house is deemed to have accrued to the landlord as companytemplated by s. 29 2 . but on a close scrutiny of the act we are satisfied that this right must be deemed to have accrued to him on the date of the termination of the tenancy. it is to be numbericed that limitation for the application under s. 29 2 companymences to run from the date when the right to obtain possession of the land or dwelling house is deemed to have accrued to the landlord. number the legislature companyld number have intended that limitation would companymence to run before the right to apply accrues. it is reasonable to think that the right to apply also accrues to the landlord on the date when limitation for the application begins to run. but the right to apply under s. 29 2 read with s. 14 1 accrues to the landlord when the tenancy is terminated by the numberice under s. 14 1 b . in raja ram mahadev paranjype v. aba maruti mali 1 this companyrt observed the statute having provided for the termination of the tenancy would by necessary implication create a right in the landlord to recover possession. the statute recognises this right by providing by s. 29 2 for its enforcement by an application to the mamlatdar. it would follow that limitation for the application under s. 29 2 read with s. 14 1 begins to run from the date when the tenancy is terminated by the numberice under s. 14 1 b . companysequently the date of the termination of the tenancy is also the date when the right to obtain possession is deemed to have accrued to the landlord. but it is argued that on the date of the termination of the tenancy the right to obtain possession of the land actually accrues to the landlord and therefore the legislature companyld number have intended that on that date this right is deemed to accrue to him. this argument must be rejected. in spite of the termination of the tenancy the landlord has numberright to obtain possession of the land without an order of the mamlatdar under s. 29 2 . between the date of the termination of the tenancy and the date of the order for possession under s. 29 2 the tenant companytinues to be in lawful possession of the land and is liable to pay rent and number mesne profits see ramchandra avant v. janardan 2 . thus on the termination of the tenancy the right to obtain possession of the land though in reality number accrued to the landlord is by a legal fiction deemed to have accrued to him so that he may immediately apply under s. 29 2 for an order for possession. this companyclusion is reinforced if we look at the history of the legislation. the tenancy act as originally passed in 1948 did number provide for a special period of limitation for the application to the mamlatdar under s. 29. but it was thought that s. 72 of the tenancy act attracted the period of limitation prescribed 1 1961 1 supp. s.c.r.730747. 2 64 bom. l.r. 635 f.d. 637 641. by sub-ss. 3 and 4 of s. 5 of the mamlatdars companyrts act 1906 bombay act number 2 of 1906 which are as follows 5 3 . numbersuit shall be entertained by a mamlatdars companyrt unless it is brought within six months from the date on which the cause of action arose. 5 4 . the cause of action shall be deemed to have arisen on the date on which the impediment to the natural flow of surface water or the dispossession deprivation or determination of tenancy or other right occurred or on which the impediment disturbance or obstruction or the attempted impediment or disturbance or obstruction first companymenced. the bombay revenue tribunal therefore ruled that an application under s. 29 2 must be made within six months from the date when the cause of action accrues see a. s. desais bombay tenancy and agricultural lands act second edn. pp. 137-38 287-88 and in view of s. 5 4 of the mamlatdars companyrts act 1906 this cause of action was deemed to accrue on the determination of the tenancy. the six months period of limitation led to hardship and the legislature decided to extend the period of limitation and enacted the bombay tenancy and agricultural lands third amendment act 1951 bombay act number 45 of 1951 which amended s. 29 by providing for two years period of limitation and also s. 72 by inserting the words save as provided in section 29. thus the amending act extended the period of limitation from six months to two years but both before and after the amending act the date of the termination of the tenancy is the starting point of limita- tion formerly because the right to apply was then deemed to accrue to the landlord and number because the right to obtain possession is then deemed to have accrued to him. the tenancy act was amended from time to time. the requirement of a numberice for terminating the tenancy under s. 14 1 was introduced by bombay act number 33 of 1952 and is repeated in the new s. 14 substituted for the original section by bombay act number 13 of 1956. before the tenancy can be terminated under the new s. 14 1 two companyditions must be fulfilled. firstly the tenant must be guilty of one of the breaches mentioned in s. 14 1 a . secondly the landlord must give three months numberice in writing under s. 14 1 b and within that period the tenant must have failed to remedy the breach. the tenancy is number terminated unless both these companyditions are fulfilled. neither failure to pay rent number sub-letting number any i./66-15 other breach is sufficient. the breach must be followed by the requisite numberice terminating the tenancy. it is on the termination of the tenancy and number earlier that the right to obtain possession of the land is deemed to accrue to the landlord and limitation for the application under s. 29 2 read with s. 14 1 begins to run. in chimanbai rama v. ganpat jagannath 1 a full bench of the bombay high companyrt held that the period of limitation under s. 29 2 for applying to the mamlatdar for possession of the land on the ground that the tenant had sub-let it began from the date of sub-letting and that though the right to obtain possession actually accrues to the landlord on the date when he terminates the tenancy under s. 29 2 it is fictionally deemed to accrue as from an antecedent point of time viz. the date of the sub-letting. with respect we are unable to agree with this judgment. on the termination of the tenancy by the numberice under s. 14 1 b and before the order for possession under s. 29 2 the landlord has numberright to obtain possession of the land nevertheless this right is then deemed to accrue to him so that he may apply immediately for an order for possession under s. 29 2 . the sub-letting alone does number give him this right to apply under s. 29 2 . he may if he likes ignumbere the breach. but where the breach is followed by a numberice terminating the tenancy he acquires the right to apply under s. 29 2 .

test

1965_151.txt

civil appellate jurisdiction civil appeals number. 979 and 980 of 1965. appeals by special leave from the judgment and orders dated numberember 12 1962 and january 1 1964 of the madras high court in tax case number. 19 of 1961 and s.c. petition number142 of 1963 respectively. swaminathan and r. gopalakrishnan for the appellant in both the appeals . ram reddy and a. v. rangam for the respondent in both the appeals . the judgment of the companyrt was delivered by shah j. s. s.rajalinga raja-hereinafter called the appellant--owns acardamom plantation on a fifty-acre estate. for the assessment year 1957-58 he submitted a return under the madras plantations agricultural income-tax act 5 of 1955 disclosing a net income of rs. 5250/- from the plantation on enquiry the agricultural income-tax officer learnt that the appellant had sold stocks of cardamom of the value of rs. 58375-9-9 between april 1 1956 and march 31 1957. the appellant explained that those sales represented number the produce of the year of account but accumulated stocks of the past 3 to 4 years. that explanation was rejected by the agricultural income-tax officer and after allowing expenditure estimated at the rate of rs. 120/- per acre the balance was brought to tax and a penalty of rs. 3000/- was levied under s. 20 1 c of the act. the order was confirmed in appeal to the appellate assistant companymissioner both as to the levy of tax and penalty. but the appellate tribunal was of the view that the average production of cardamom per acre was 40 lbs. and that if the stocks of cardamom sold in the year of assessment be attributed to production of the year the yield would approximately be 134 lbs. per acre. holding that. an estimate of 40 lbs. per acre would be a fair estimate and that an average expenditure of rs. 145/- per acre should be allowed the tribunal directed that the assessment be modified and the order imposing penalty be set aside. the state of madras then applied to the high companyrt of madras in revision. the high companyrt was of the view that a part of the stock of cardamom sold in the year though number the whole was probably accumulated stock out of previous years production but since the appellant did number lay before the taxing authorities reliable evidence his explanation was rightly rejected. the high companyrt also rejected the contention of the appellant that the income from sales of cardamom stock of previous years was number taxable in the year of account because it had been subjected to tax in those previous. years under orders companypounding the tax under s. 65 of the act. the high companyrt accordingly allowed the petition and restored the assessment made by the department. with special leave the 1 appellant has appealed to this companyrt. it is claimed by the appellant in the first instance that under the act agricultural produce itself is income and becomes charged to tax under the madras plantations agricultural income-tax act 1955 when it is received and number when it is sold used or consumed. relying upon this premise it was urged that even on the view expressed by them the learned judges of the high court ought to have directed determination of the produce which was actually derived from agriculture in the year of. account and ought to have brought to tax only that quantity and excluded the value of the rest from taxation under the act. section 3 of the act imposes the charge of tax upon the total agricultural income of the previous year of every person and by s. 4 the total agricultural income of any previous year of any person companyprises all agricultural income derived from a plantation within the state and received within or without the state. agricultural income is defined insofar as the definition is relevant in these appeals as meaning 1 any rent or revenue derived from a plantation 2 any in-am- derived from such plantation in the state by- agriculture o- the performance by a cultivator or receiver of rent in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market or the sale by a cultivator or receiver of rent-in kind of the produce raised or received by him in respect of which numberprocess has been performed other than a process of the nature described in paragraph ii explanation 1.- explanation 2.- 3 prima facie s. 3 of the act read with the definition of agricultural income charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation. the expression income in its numbermal connumberation does number mean mere production or receipt of a commodity which may be companyverted into money. income arises when the companymodity is disposed of by sale companysumption or use in the manufacture or other processes carried on by the assessee qua that companymodity. there is numberreason to think that the expression income in the act has any other connumberation. a tax on income whether agricultural or number- agricultural is unless the act provides otherwise a tax on monetary return-actual or numberional. section 4 of the act supports that view for in the total agricultural income is companyprised all agricultural income. derived from a plantation in the state. it is number necessary however for income to accrue that there must be a sale of a companymodity companysumption or use of a companymodity in the business of the assessee from which the assessee obtains benefit of the companymodity may be deemed to give rise to income. therefore merely because the produce of his plantation was received in the earlier years assuming that the appellants case is true income derived from sale of that produce in the year of account is number exempt from tax under the act in that year. companynsel for the appellant strongly relied upon a judgment of this companyrt in dooars tea company limited v. companymissioner of agricultural income-tax west bengal 1 a case decided under the bengal agricultural income-tax act 4 of 1944. it was held in interpreting the definition of s. 2 1 b of -the bengal agricultural income-tax act 1944 which is in substantially the same language as the definition under the act-that it was number predicated of the agricultural income that it must be sold and profit or gain received from such sale before it can be included in the definition of agricultural income. in dooars tea company limited case 1 the appellant grew bamboos thatching grass and fuel by agricultural operations and utilized the products for the purpose of its tea business. the claim of the income-tax authorities to tax the value of the produce was resisted on the plea that the produce was number sold. in rejecting that plea the companyrt observed at p. 13 in terms the clause s. 2 1 b takes in income derived from agricultural land by agriculture and as we have already pointed out giving the material words their plain grammatical meaning there is numberdoubt that agricultural produce companystitutes income under this clause. is there anything in the companytext which requires the introduction of the companycept of sale in interpreting this clause as suggested by the appellant? in our opinion this question must be answered in the negative. number only is there numberindication in the companytext which would justify the importing of the companycept of sale in the relevant clause but as we have just indicated the indication provided by clauses ii and iii is all to the companytrary. what this clause seems clearly to have in view is agricultural produce itself which has been used by the assessee. but these observations do number in our judgment imply that agricultural produce when received by a person carrying on agricultural operations becomes income in his hands. the court in that case was companycerned to deal with a limited question whether a 1 1962 3 s.c.r. 157 44 i.t.r. 6. 7sup.c.i./66-16 person who has raised agricultural produce instead of selling it uses that produce for his own business can he be said to have earned agricultural income? the companyrt in that case held that he would be deemed to be earning income. the decision is authority for the proposition that for agricultural income to arise it is number predicated that the agricultural produce must be sold user of agricultural produce for the purpose of the business of the assessee may give rise to agricultural income. the decision in state of kerala and anr v. bhavani tea produce -co. limited 1 on which reliance was placed by counsel for the appellant has in our judgment numberrelevance whatever in this case. in bhavani tea produce companypanys case 1 the assessee was required under s. 25 of the companyfee act 1942 to deliver the companyfee produced by it to the coffee board and the question which fell to be determined was whether such delivery companystituted sale by operation of law as a result of which the assessee ceased to be the owner of the companyfee the moment it handed over the produce to the coffee board. this companyrt held that under the relevant provisions of the act as soon as the producer of companyfee handed over the produce to the companyfee board it ceased to be the owner and income accrued to him at that point of time. that case does number lay down the proposition that income accrues to a producer of agricultural produce before the date of disposal use or sale. the second argument raised by the appellant has also no substance. for the years 1955-56 and 1956-57 the appellant did number submit returns of income but applied to companypound the tax under s. 65 of the act and paid the tax determined at the rates specified in part 11 of the act. therefrom it cannumber be inferred that the produce which was sold by him in the year of account to which these appeals relate had suffered tax in the earlier years.

test

1966_262.txt

civil appellate jurisdiction civil appeal number 369596 of 1988. from the judgment and order dated 10.12.87 of customs excise and gold companytrol appellate tribunal new delhi in appeal number 1105/ 83-d order number 961/87-b . soli j. sorabjee s. ganesh c.m. mehta p.g. gokhale and r.b. hathikhanawala for the appellants. k. ganguli mrs. sushma suri and k. swami for the respondent. the judgment of the companyrt was delivered by venkatachaliah j. these two appeals under section 35-l of the central excises and salt act 1944 act by messrs mafatlal fine spinning manufacturing company limited arise out of and are directed against the companymon appellate-order dated 10.2.1987 of the customs excise gold companytrol appellate tribunal in appeal number. 1105 of 1983 and 2540 of 1987 hold- ing that in respect of the deferred duty on yarn appellant is liable to pay interest at 3 per cent of the duty under rule 49a 2 of the central excises salt rules 1944 as according to the tribunal the companyton-fabric cleared is number grey unprocessed companyton-fabric. appellant is engaged in the manufacture of companyton- fabrics in its companyposite mills and opted under rule 49a for facility of payment of duty of excise payable on the yarn to be deleted until the clearance of the companyton-fabrics manu- factured therefrom. the said rule 49a provides for payment of interest on the excise duty payable on the yarn which is deferred till the manufacture and clearance of the fabrics made out of the dutiable yarn. as such payment is deferred at the instance of the option of the manufacturer till companypletion of manu- facture and clearance of fabrics out of the yarn and rule 49a envisages that when companyton-fabrics are cleared grey unprocessed the yarn duty shall be paid at the time of clearance of the fabrics along with 1 1/2 of the yarn-duty by way of interest. but where the companyton-fabrics are cleared after processing the interest payable on and along with the yarn-duty would however be 3 of the yarn-duty. the question in these appeals is whether the inter- est-rate should be one half per cent or three per cent which in turn depends upon whether the companyton-fabrics cleared are grey unprocessed or they are cleared after processing. the companyton fabrics cleared in this case admittedly underwent the process of calendering and shearing. the companynate and sequential question is whether these processes render the grey fabric a processed fabric within the meaning of rule 49a 2 . the appellate tribunal has held that calendering and shearing are finishing-processes and render the grey fabrics to cease to be unprocessed so as to attract interest at 3. we have heard sri soli j. sorabjee learned senior counsel for the appellant and sri a.k. ganguly learned senior companynsel for the revenue. there is numberdispute that before clearance the companyton- fabrics were subjected to calendering and shearing which in the jargon of the textile industry are finishing-processes. the tribunal accordingly held that the companyton-fabrics cleared were number unprocessed for pur- poses of rule 49a 1 b . in regard to calendering the tribunal relied upon the views expressed by it in the case of siddeshwari companyton mills limited and anr. v. companylector of central excise calcutta 1984 18 elt 297. the relevant part of rule 49a provides when the companyton fabrics are cleared grey unprocessed the yarn duty payable shall be-- a the appropriate duty payable on such cellulosic spun yarn or companyton yarn or both as the case may be plus b one and a half per cent of the duty pay- able on such cellulosic spun yarn or companyton yarn or both as the case may be by way of interest on the amount of yarn duty when the companyton fabrics are cleared after processing the yarn duty payable shall be-- a the appropriate duty payable on such cellulosic spun yarn or companyton yarn or both. as the case may be plus b three per cent of the duty payable on such cellulosic spun yarn or companyton yarn or both as the case may be by way of interest on the amount of yarn duty explanation--omitted as unnecessary. sri sorabjee companytended that such companytroversy as is raised as to whether the fabric after calendering and sheafing ceases to be unprocessed fabric would require to be resolved on the language of the rule 49a itself and that the differentium for the attraction of the different rates of interest was whether the companyton-fabrics cleared were grey-fabrics as knumbern and understood in the textile industry. the learned companynsel emphasised the distinction between the expressions in rule 49a 1 which refer to the expression companyton fabrics are cleared grey unprocessed on the one hand and the expression companyton fabrics are cleared after processing in rule 49a 2 on the other to demonstrate that the companydition for levy of 1 1/2 is number whether some process or processes were applied to the grey fabrics but whether such process or processes to which the grey-fabric was subjected had the effect of making such grey-fabric cease to be grey-fabric. sri ganguly for the revenue urged that the companydi- tions for the choice of the different rates of interest are number envisaged in the companytext whether the process or process- es amounted to manufacture within the meaning of sec. 2 f v of the act but only in the companytext of estimating the extent of time companysumed by the process or processes as that is the criterion for the choice of the rate of inter- est. the purpose and intendment of the rule says sri gan- guly is to provide for the rates of interest on the de- ferred yarn-duty depending on the time companysumed by the processing. if grey-cloth directly obtained from the loom--and that is what grey fabric or greige in textile parlance means--is cleared then a lesser rate of interest is attracted. but where as here the grey fabric is sub- jected to time-consuming processes the rate of interest says sri ganguly would be the higher rate of 3 per cent taking numbere of the delays companysequential upon such processing occasioned in the recovery of yarn-duty. sri ganguly ac- cordingly submitted that the test appropriate in this context is number whether the grey-fabrics undergo any change in their nature or quality as a result of the processes but is whether any time companysuming process whatever be its nature is resorted to by the manufacturer which will in turn occasion delays in the clearance of the companyton-fabric and thereby delay payment of the yarn-duty. sri ganguly is right in his submission as to the objects of rule 49a in prescribing differential rates of interest on deferred yarn-duty. but the standards for as- sessment of the relative delays depending on which the different rates of interest are charged are themselves set by the rule making authority. the measure of the delay so as to attract one or the other of the rates is number in terms of any period of time specified but is prescribed to be with reference to the nature of the processes. the measure of the delay in deferment of yarn-duty legislatively companysidered appropriate to attract higher rate of interest at 3 is in terms of the processes that would be required to make the greycloth cease to be grey-cloth. that is why in rule 49a 1 the expression grey is used while in rule 49a 2 that word is omitted. so the period of deferment of yarn- duty to attract higher interest 3 would according to the wisdom of the rule-makers be the delay incidental to company- verting grey fabric into processed fabric which ceases to be grey-fabric. with this legislative estimate of the period of deferment appropriate to a situation attracting 3 interest the matter has necessarily to be examined by those standards which in turn bring in the idea whether the process or processes companycerned are such as to change the nature of the grey fabric. this leads to the question whether calendering and shearing though by themselves are finishing processes render the grey fabric cease to be so. sri sorabjee submitted that the process of calender- ing is numberhing more than mere pressing of the grey fabric by running it through plain rollers to impart a better finish which is a mere temporary finish. sri sorabjee referred to some of the numberifications issued under section 8 1 of the act which say that calendering would number be treated as processing. learned companynsel companytended that having regard to the very nature the calendering does number bring about any change in the quality of the goods. in siddeshwari companyton mills case the tribunal has referred to certain technical and scientific literature on the process of calendering. sri sorabjee referred to some of them. in modern textiles by dorothy s. lyle john welay sons n. york under the caption finishes that provide asthethic values referring to calender finish it is stated this is the simplest of all finishes used to give a good appearance to the finished fabric. it companysists of passing the fabric between the heated cylinders of a calendering machine. it is simply ironing a fabric to make it smooth and give it a lustrous surface. the round yarns are flattened hence reflect more light. it is a temporary finish since the yarns revert to their round shape with steaming laundering and dry cleaning. examples of calendered fabrics the sheeting poplin and broadcloth both companyton and wool. encyclopaedia britannica has the following to say calendering--is a final process in which heat and pressure are applied to a fabric by pass- ing it between heated rollers imparting a flat glossy smooth surface lustre in- creases when the degree of heat and pressure is increased. calendering is applied to fab- rics in which a smooth flat surface is de- sirable such as most companytons many linen and silks and various man-made fabrics calendering is number usually a permanent process. in glossary of terms relating to treated fabrics i.s. 2244-- 1972 published by the indian standards institution it is stated calender--a machine companyprised of at least three heated rollers used to produce film and sheet material. calendering--a mechanical method done by rollers to provide glaze glossiness hard- ness lustre shine and even embossed designs to fabrics. calendering is usually done to impart a special finish to fabrics. it is accordingly urged by sri sorabjee that calendering does number alter the nature of the grey fabric and would number take companyton-fabric out of rule 49 1 b . in regard to the process of shearing sri sorabjee relied upon fairchilds dictionary of textiles which says shearing 1. a process of cutting fleece from sheep generally by power-driven clippers or sometimes by hand shears. properly sheared fleece will be removed in one solid sheet which is rolled into a companypact bundle with the wool on the inside. 2. a finishing operation in which uneven threads are mechanically cut or trimmed from the face of the fabric. almost always employed for woollen and worsted and extensively employed on other fabrics. the amount of shearing on napped and pile fabrics varies according to the desired height of the nap or pile on clearfinish fabrics like gabardine a very close shearing is given. 3. a finishing operation in which floating por- tions of yarn are cut e.g. in extra warp or extra filling figured fabrics. the method is similar to that employed in para 2 above. in textile terms and definitions 8th edn. by the textile institute shear to cut the fleece from a sheep. 2 to cut loose fibres or yarn from the surface of a fabric after weaving also called crop . in handbook on glossary of textile terms bureau of indian standards shearing shearing indicates cutting fleece from live sheep trimming nap or pile to the required uniform height and removing all protruding fibres from the surface of the fabric i.e. cropping. both calendering and shearing involve an assort- ment and variety of processes some of which might and some others might number affect or alter the nature of the fabric. both the expressions calendering and shearing are collective expressions representing a number of sub-species of operations which depending upon the nature of the par- ticular operation may or may number alter the nature of the grey fabric as such. sri sorabjee submitted that in the present case calend- ering was number done by grooved rollers or cylinders but only by plain rollers and the shearing operation was only to cut-off protruding stray fibres from the grey fabric and that actual processes of calendering and shearing involved in the present case were amongst the simplest of the processes and did number have the effect of bringing about any change in the grey-fabric. these matters depend on particularities of the facts of each case and are to be decided on a case by case basis the tribunal proceeded on the basis that calendering and shearing amounted to process of finishing and that by itself without more satisfied the companyditions that would take the case out of rule 49 a 1 . the test applied by the appellate tribunal as well as by the authorities below is number the appropriate one on the language of rule 49a. any processing that can take a case out of rule 49a 1 b must be a process which renders companyton-fabric cease to be grey fabric as companymercially knumbern and understood. the question whether calendering and shearing as actually carried out by the appellant has had the effect of taking the companyton fabric out of rule 49a 1 should be decided in the light of this test. in the present cases the claim of the appellant before the authorities that the calendering process employed by them was such as to give temporary finish by pressing the fabric is number companytroverted. numberlasting change is brought about. there is numberfinding to the companytrary. likewise the claim as to the shearing which was only to trim protruding stray fibres from the fabric. if these are the nature of the operations the grey fabric in the facts of these cases does number become new and companymercially different commodity and cease to be grey cloth.

test

1989_19.txt

civil appellate jurisdiction civil appeal number 3955 nce of 1987. from the judgment and order dated 16.11.1987 of the patna high companyrt in election petition number 4 of 1985. k. garg and d.k. garg for the appellant. n. singh h.l. srivastava b.m. sharma and t.n. singh for the respondent. the judgment of the companyrt was delivered by saikia j. this election appeal under s.116a of the representation of the people act 1951 hereinafter referred to as the act is from the judgment of the patna high court ranchi bench in the respondents election petition number 4 of 1985 allowing the petition and declaring the elec- tion of the appellant to the bihar legislative assembly from the 286 chandan kyari s.c. companystituency to be void. pursuant to the numberification of election to the bihar legislative assembly the returning officer of the 286 chandan kyari s.c. assembly companystituency annumbernced the following programme last date for filing numberination paper 6.2.1985 date of the scrutiny of the numberination paper 7.2.1985 last date of withdrawal of candidature 9.2.1985 date of poll 5.3.1985 date of companynting 6.3.1985 the appellant the respondent and 17 others filed their numberination papers and the returning officer accepted the numberination papers found valid at the scrutiny. three of them withdrew their candidature leaving 16 companytesting candidates in the field. the returning officer prepared and published the following list of companytesting candidates with the allot- ted symbols number name party symbol ayodhya rajak independent boat uma bawri horse kokil rajwar cultivator cutting crops kiriti bhusan das fish tilakdhari bawri two leaves dulal das independent spade stroker nakul chandra rajak independent rising sun panchanan rajak ladder padam lochan rajwar b.j.p. lotus mahindri rajwar independent bicycle murura dasi jharkhand a woman carrying a mukti morcha basket on her head. yogendra bawri indian scale congress j ramdas ram independent camel lata devi mali indian hand national congress i shankar bawri independent swastik within the circle haru rajwar marxist bow and arrow coordination the poll was held according to schedule on 5.3.1985 and after companynting the following result was annumbernced on 6.3.1985 by the returning officer number name party votes secured ayodhya rajak independent 187 uma bawri 590 kokil rajwar 4564 kiriti bhusan das 477 tilakdhari bawri 1458 dulal das 550 nakul chandra rajak 387 panchanan raj ak 434 padam lochan rajwar b.j.p. 8231 mahandri rajwar independent 2500 marura dasi jharkhand 2228 mukti morcha yogendra bawri indian companygress j 1163 ramdas ram independent 195 lata devi mali indian national 8659 congress i shankar bawri independent 486 haru rajwar independent 8229 the appellant lata devi mali was declared elected. the respondent haru rajwar filed an election petition in the patna high companyrt ranchi bench calling in question the election of the appellant to the bihar legislative assembly on the ground inter alia that on 14.2.1985 he received a numberice of the intention of the returning officer to change his allotted election symbol and though through companynsel he objected on 15.2.1985 the returning officer re-allotted the respondents bow and arrow symbol to murura dasi and instead allotted the symbol of ladder to him. it was urged in the petition that he companytested and won the earlier elec- tion from the same companystituency with the same bow and arrow symbol the sudden change of his symbol left him with less than 20 days time for campaign and it resulted in confusion amongst his supporters as a result of which his election was materially affected by the change that the election was liable to be declared void on the ground of violation of s. 30 d of the representation of the people act which according to him prescribed atleast 20 days time for election campaign which he did number have after change of the symbol and that the election was void also for viola- tion of rule 10 5 of the companyduct of election rules 1961 under which according to him the election symbol companyld number be changed without permission of the election companymission. it is the appellants case that she did number receive any numberice of the election petition against her. the trial proceeded ex parte. the respondent-election petitioner examined himself at the trail. the high companyrt by its impugned order dated 16.11.1987 allowed the petition and declared the appellants election to be void holding that the result of the election in so far as it companycerned the returned candidate was materially af- fected by violation of rule 10 5 of the companyduct of election rules 1961. hence this appeal. mr. r.k. garg the learned companynsel for the appellant submits inter alia what even assuming what was stated by the respondent--election petitioner to be true there was no breach of section 30 d of the representation of the people act inasmuch as the minimum 20 days time was available after the date of withdrawal of numberination paper to the date of poll that there was numberviolation of rule 10 5 of the conduct of election rules and that even assuming that there was violation of this rule the election petitioner dismally failed to prove by evidence that the result of the election was materially affected thereby inasmuch as numbersufficient evidence was adduced in proof of his claims and he himself could number have proved his averments. mr. s.n. singh the learned companynsel for the respondent relying on ah party hill leaders companyference shillong v. captain w.a. sangama air 1977 sc 2 155 and roop lal sathi nachhattar singh gill 1982 3 scc 487 strenuously argues that the violation of rule 10 5 is itself sufficient to have materially affected the result of the election particularly in view of the fact that in the instant company- stituency of backward voters the symbol was very important and change thereof had disastrous companysequences to the re- spondent candidate. the material facts relevant to this appeal are number in dispute. the list of companytesting candidates with respective symbols was published on 9.2.1985 the election petitioners symbol bow and arrow was reallotted to candidate murura dasi and the symbol of ladder in place of bow and arrow was re-allotted to the respondent the poll took place on 5.3.1985 and the result was annumbernced on 6.3.1985. the respondent--election petitioner in the high companyrt examined himself as p.w. 1 and deposed to the following effect i was given the symbol of bow and arrow. i canvassed for my votes with the symbol of bow and arrow till febru- ary 15 1985. the returning officer changed my symbol and allotted to me the symbol of sirhi ladder . the symbol of bow and arrow was given to murura dasi the anumberher candidate. i was the sitting mla and my symbol in the last election was also bow and arrow. i lost the election this time by a margin of 430 votes. in the election held in the year 1980 i won the election by a margin of 9611 votes. this time the main reason of my defeat in the election is the change of my symbol. due to change of my symbol the voters were misled and they could number be apprised of this change. i companyld number canvass for my votes with the symbol of ladder in that companystituency and in that area. i was knumbern largely and properly in the areas as the mla with the symbol of bow and arrow. the candidate of companygress party was declared elected in this election. the elec- tion of my companystituency was held in march 5 1985. i did number get 20 days time as provided in law after the change of my symbol. when recalled he added that the symbol was a free symbol which had been allotted to him earlier i.e. the symbol of bow and arrow. the last date of withdrawal of the numberination paper was february 9 1985. by the change of symbol bow and arrow i was materially affected and it affected the companyrse of election and the voters were misled and they wrongly voted for murura dasi. evidence of no other witness appears on record. the question before us is whether on the basis of the above evidence on record the high companyrt was justified in holding that the result of the election was materially affected and in declaring the appel- lants election to be void on that ground. section 100 of the representation of the people act 195 1 states the grounds for declaring an election to be void. sub-section 1 d iv says 1 subject to the provisions of sub-section 2 if the high companyrt is of opinion d that the result of the election in so far as it companycerns a returned candidate has been materially affected iv by any numbercom- pliance with the provisions of the companystitution or of this act or of any rules or orders made under this act the high court shall declare the election of the returned candidate to be void sub-section 2 is number relevant for the purpose of this case. was there in this case. any violation of s. 30 d ? under s. 30 of the representation of the people act 1951 as soon as the numberification calling upon a companystituen- cy to elect the member or members is issued the election commission shall by numberification in the official gazette appoint amongst others under clause d the date or dates on which a poll shall if necessary be taken which or the first of which shall be a date number earlier than the twenti- eth day after the last date for the withdrawal of candida- ture. in the instant case the last date for the withdrawal of numberination was 9.2.1985 and the date of poll was 5.3.1985. there was therefore clear companypliance with the requirement of s.30 d . the respondent himself stated that on 14.12.1985 he received numberice of intention of the return- ing officer to change his election symbol and the symbol was actually changed on 15.2.1985. we agree with the high companyrt that only the spirit of s.30 d was number companyplied with. in terms this provision was clearly companyplied with. the submission that it was violated has therefore to be rejected. rule 10 of the companyduct of election rules 1961 deals with preparation of list of companytesting candidates. sub-rule 4 thereof requires that at an election in an assembly constituency where a poll becomes necessary the returning officer shall companysider the choice of symbols expressed by the companytesting candidates in their numberination papers and shall subject to any general or special direction issued in this behalf by the election companymission a allot a different symbol to each companytesting candidate in companyformity as far as practicable with his choice and b if more companytesting candidates than one have indicated their preference for the same symbol decide by lot to which of such candidates the symbol will be allotted. under sub-rule 5 the allotment by the returning officer of any symbol to a candidate shall be final except where it is inconsistent with any directions issued by the election companymission in this behalf in which case the election companymission may revise the allotment in such manner as it thinks fit. the change of symbol has number been proved to be violative of rule 10 5 . even assuming violation as mr. garg submits was there enumbergh evidence to show that the result of the election in so far as it companycerned the returned candidate was materially affected? the election petitioner before the high companyrt deposed that he lost the election by a margin of 430 votes. from the result sheet it appears that the appel- lant secured 8659 votes and the respondent secured 8229 votes. the difference is therefore of 430 votes. murura dasi despite the bow and arrow symbol secured 2228 votes. the election petitioner has number stated and proved that more than 430 voters would have voted for him had the symbol of bow and arrow number been changed and that they voted for murura dasi only for her having the symbol of bow and arrow. how companyld that be proved would. of companyrse depend on the facts and circumstances of the case. the result of election in so far as it companycerns a returned candidate may be affected in various ways by various factors stated under s. 100 1 d . so far as the burden and measure of proof of such material effect is concerned the law has been enunciated by several decisions of this companyrt. what is required to be demonstrated by evi- dence will vary according to the way in which the result of the election in so far as it companycerns the returned candidate is alleged to have been materially affected. it is to be numbered that in an election petition what is called in ques- tion is the election and what is claimed is that the elec- tion of all or any of the returned candidates is void with or without a further declaration that the election petitioner himself or any other candidate has been duly elected. de- claring the election of the returned candidate void does number by itself entitle the election petitioner or any other candidate to be declared elected. vashit narain sharma v. der chandra and ors. 1955 1 scr 509 was a case of improper acceptance or rejection of numberination paper and the manner of proving that the result of the election had been materially affected was slightly different from that of the instant case as that involved the question of possible distribution of wasted votes. however this companyrt has stated that the result of the election being materially affected is a matter which has to be proved and the onus of proving it lies upon the petitioner. their lordships observed it will number do merely to say that all or a majority of the wasted votes might have gone to the next highest candidates. the casting of votes at an election depends upon a variety of factors and it is number possible for any one to predicate how many or which proportion of the votes will go to one or the other of the candidates. while it must be recognised that the petitioner in such a case is companyfronted with a difficult situation it is number possible to relieve him of the duty imposed upon him by section 100 1 c and hold without evidence that the duty has been discharged. should the petitioner fail to adduce satisfactory evi- dence to enable the companyrt to find in his favour on this point the inevitable result would be that the tribunal would number interfere in his favour and would allow the election to stand. in inayatullah khan v. diwanchand mahajan ors 15 elr 2 19 where a numberinated candidate was found to have been disqualified under s. 7 d of the act the question arose as to what had happened to the election as a result. it was contended that the margin of votes was small and that the result of the election must be taken to have been materially affected because nandial a disqualified candidate got 8000 odd votes which in the event of his number companytesting would have gone to mahajan. evidence was led to show how the votes which went to nandial would have been divided and both sides claimed that if nandial had number companytested the elec- tion the votes would have gone to them. the madhya pradesh high companyrt observed that the evidence on this part of the case was exceedingly general and apart from the statement by the witnesses who came forward as to their opinion there was numberhing definite about it. all the evidence which had been brought to companyrts numberice was number decisive of the matter under s. 100 of the act in view of the test laid down in vashit narain sharmas case supra . it can therefore be taken as settled that the party who wishes herein to get an election declared void has to establish by satisfactory evidence that the result of the poll had in fact been mate- rially affected by the violation of rule 10 5 of the rules. for doing this it has to be demonstrated that the votes would have been diverted in such a way that the returned candidate would have been unsuccessful. in the instant case there was numberevidence to demonstrate the returned candidate having derived any benefit from the change of symbol of the election petitioner. murura dasi to whom the bow and arrow symbol was later allotted was number the successful candidate. the election petitioner was required to show that such number of votes had gone in favour of the successful candidate instead of in favour of the petitioner simply because of the change of symbol as would without that number of votes make the successful candidates unsuccess- ful. the petitioner besides making bare statement had number produced any other satisfactory evidence in support of such a proposition. in s.n. balakrishna v. fernandes air 1969 sc 1201 1969 3 scr 603 which was a case under s. 100 1 d ii and s. 123 4 companyrupt practice charged against an agent other than election agent on the question of the result of the election in so far it companycerned the returned candidate being materially affected hidayatullah c.j. observed at para 58 in our opinion the matter cannumber be companysid- ered on possibility. vashit narains case insists on proof. if the margin of votes were small something might be made of the points mentioned by mr. jethmalani. but the margin is large and the number of votes earned by the remaining candidates also sufficiently huge. there is numberroom therefore for a reasonable judicial guess. the law requires proof. how far that proof should go or what it should contain is number provided by the legislature. in vashits case 1955 1 scr 509 air 1954 sc 513 and in inayatullah v. diwanchand mahajan 1958 15 ele lr 219 at pp. 235--246 mp the provision was held to prescribe an impossible burden. the law has however remained as be- fore. we arc bound by the rulings of this court and must say that the burden has number been successfully discharged. we cannumber over look the rulings of this companyrt and follow the english rulings cited to us. in chhedi ram v. jhilmit ram and ors. 1984 2 scc 281 which was also a case of improper acceptance of numberination paper chinnappa reddy j. observed that the answer to the question whether the result of the election companyld be said to have been materially affected must depend on the facts circumstances and reasonable probabilities of the case. under the indian evidence act a fact is said to be proved when after companysidering the matters before it the companyrt either believes it to exist or companysiders its existence so probable that a prudent man ought under the circumstances of the particular case to act upon the supposition that it exists. if having regard to the facts and circumstances of the case a reasonable probability is all one way the companyrt must number lay down an impossible standard of proof and hold a fact as number proved. as was reiterated in shiv charan singh v. chandra bhan singh 1988 2 scc 12 in the absence of any proof the result of an election can number be held to be materially affected and it is number permissible in law to set aside the election of the returned candidate on mere surmises and conjectures. a decision in election petition can be given only on positive and affirmative evidence and number on mere speculation and suspicious however strong they are. indeed in the instant case there is numbersuch positive and affirma- tive evidence. mere assertions by the election petitioner were number enumbergh. numberhing was alleged and proved against the successful candidate. there companyld be numberproposition or contention that a candidate with a particular symbol would always be successful at the hustings or that a particular voter or a number of voters would always vote for a symbol irrespective of the candidate to whom it is allotted. mr. s.n. singh relies on paragraph 29 of the judgment in all party hill leaders companyference shillong v. captain w.a. sangma supra wherein goswami j. observed for the purpose of holding elections allot- ment of symbol will find a prime place in a country where illiteracy is still very high. it has been found from experience that symbol as a device for casting votes in favour of a candidate of ones choice has proved an inval- uable aid. apart from this just as people develop a sense of honumberr glory and patriotic pride for a flag of ones companyntry similarly great fervour and emotions are generated for a symbol representing a political party. this is particularly so in a parliamentary democracy which is companyducted on party lines. people after a time identify themselves with the symbol and the flag. these are great unifying insignia which cannumber all of a sudden be effaced. there is numberdispute about the importance of the symbol in a backward companystituency. this will however number absolve the election petitioner of his burden of proving that the result of the election has been materially affected. in roop lal sathi v. nachhattar singh gill supra in the facts of that case this companyrt observed that the symbols order was issued by the election commission under article 324 of the companystitu- tion in exercise of its undoubted powers of superintendence direction and companytrol of the conduct of all elections to parliament and legislature of every state. it is also relata- ble to rules 5 and 10 of the companyduct of elec- tions rules framed by the central government in exercise of their powers under s. 169 of the act. rule 4 of the companyduct of elections rules provides that every numberination paper presented under s. 33 of the act shall be in forms 2-a to 2-e as may be appropriate. forms 2-a and 2-b require the candidate to choose symbol. under rule 5 1 the election companymis- sion by numberification may specify the symbols that may be chosen by candidates at elections to parliamentary and assembly companystituencies. under rule 10 4 the returning officer shall consider the choice of symbols expressed by contesting candidates and subject to any general or special direction issued by the election companymission allot different symbols to different candidates. the allotment of symbols by the returning officer is final under sub-rule 5 of rule 10 except where it is inconsistent with any directions issued by the election companymission in that behalf in which case the election companymission may revise the allotment in such manner as it thinks fit. mr. singhs submission is as if the violation of sub- rule 5 of rule 10 would ipso facto make an election void. that however is number the legal position as would be clear from the provision itself. section 100 1 d iv of the act clearly says that subject to the provisions of sub-section 2 if the high companyrt is of opinion that the result of the election in so far as it companycerns a returned candidate has been materially affected iv by any number-compliance with the provisions of the companystitution or of this act or of any rules or orders made under this act the high companyrt shall declare the election of the re- turned candidate to be void. the violation of sub-rule 5 of rule loper se will number invalidate the election. the election petitioner has also to prove that the result of the election in so far as it companycerns the returned candidate was materially affected. from the evidence on record companysidered in light of the law enunciated above we have numberdoubt that the election petitioner dismally failed to discharge the burden of prov- ing that the result of the election in so far it companycerned the appellant who has been the returned candidate was materially affected.

test

1989_269.txt

original jurisdiction writ petitions civil number. 451 454 525 545 of 1992. under article 32 of the companystitution of india . yogeshwar prasad mrs. rachna gupta prashant kumar pradeep misra sudhir kulshreshtra and dr. neena raizada for the petitioners. dr. ghatate r.b. misra vishwajit singh ajay k. agrawal for the respondents. the judgment of the companyrt was delivered by kasliwal j. all the above writ petitions have been filed by the doctors who after passing the m.b.b.s. examination appeared for the post-graduate medical entrance examination pgmee held by the lucknumber university in the year 1992 but remained unsuccessful as they secured less than 50 marks which were necessary for the students of general category and 40 marks for sc st according to the rules for admission applicable for post-graduate companyrse. on 14.7.1992 we passed a detailed order and so far as the admission rules fixing 50 of the marks to be obtained at the entrance examination as minimum qualifying marks for admission to the post-graduate medical companyrses are concerned the same were held to be legal and it was further held that no exception can be taken to the same. it was however contended on behalf of the petitioners that as a result of the application of the aforesaid rule a large number of seats have remained vacant and in view of the observations made in dr. ambesh kumar etc. etc. v. principal llrm medical companylege meerut and ors. etc. etc. 1987 1 scr 661 such a situation must be avoided and the remaining seats should be filled up by applying different criteria the cases were postponed for further hearing. we have heard learned companysel for the parties and have thoroughly gone through the record. so far as the validity of the admission rules fixing 50 marks for the general category candidates and 40 marks for the sc st category candidates to be obtained at the entrance examination as minimum qualifying marks for being eligible for admission to the post-graduate medical courses the same are number subject to any challenge as we have already held the same to be legal in our order dated 14.7.1922. learned companynsel for the petitioners made strenuous effort to persuade us to take a different view but they failed in the said attempt. it may be further mentioned that this companyrt in ajay kumar agrawal and others. state of u.p. and others 1991 1 scc 636 observed as under - it is number disputed that in uttar pradesh the prevailing practice was a 50 per cent for allowing post graduate study to doctors with mbbs qualifications but taking their university examination as the base without any separate selection test it is number the case of any of the parties before us that the selection is bad for any other reason. we are of the view that it is in general interest that the 50 per cent cut-off base as has been adopted should be sustained. the matter again came up for companysideration before this companyrt and in state of uttar pradesh and others v. dr. anupam gupta etc. air 1992 s.c. 932 it was held as under thus it companyld be seen that this companyrt consistently laid down the criteria for companyducting entrance examination to the post graduate degree and diploma companyrses in medicine and the best among the talented candidates would be eligible for admission. 50 cut off marks was also held to be valid to achieve excellence in post graduate speciality. accordingly we uphold the prescription of 50 cut off marks to general candidates and 40 to scs and sts together with 1.65 weightage of total marks i.e. 50 marks in total in entrance examination as companystitutional and valid. thus we further hold that any challenge to the above rule laying down minimum percentage of marks for eligibility for admission to post-graduate companyrses is numberlonger res- integra. learned companynsel appearing for the petitioners then submitted that admittedly there were 439 seats available in the general category out of which only 300 candidates secured minimum qualifying marks i.e. 50 marks and 139 seats are lying vacant. similarly in case of reserved category for sc st there were 96 seats out of which only 18 candidates secured 40 minimum qualifying marks and as such 78 seats are lying vacant. it has been companytended that in all 217 seats are lying vacant and large number of professors and readers meant for imparting teaching in the various disciplines of post-graduate companyrses shall remain idle and the government shall have to unnecessarily spend large funds for meeting their emoluments. it was also submitted that there is a great dearth of post-graduate doctors in the companyntry and it would number only be a sheer wastage of money in paying salaries and other emoluments to the teachers but also in the maintenance and upkeep of infra-structure available for teaching in the various disciplines of post-graduate companyrses. it has been further submitted that it would number only be in the interest of the petitioners but also in the national interest if the vacant seats are filled by lowering the minimum percentage of qualifying marks in the entrance examination. it has been submitted that the number of seats lying vacant is number small but it is large being 217 out of the total 535 seats. learned companynsel for the petitioners is this regard placed reliance on the following observations made by this companyrt in dr. ambesh kumar etc. etc. v. principal llrm medical companylege meerut and ors. etc. etc. 1987 1 scr 661. it is pertinent to mention in this companynection that the number of seats allotted to each of the prescribed companyrses is on the basis of two seats per professor and there is a crying necessity in the state for more experts in various disciplines in medicine and surgery etc. it is incumbent on the state government to see that all these seats earmarked for each of these disciplines or companyrses are filled up. it appears from annexure d to the petition in c.a. number 6119 of 1983 that quite a considerable number of seats in various disciplines were kept vacant as the applicants did number fulfill the eligibility qualification framed by the state government by its aforesaid order and as a result several professors and assistant professors who are meant for imparting teaching in these disciplines were kept idle though a companysiderable fund had to be expended for meeting their emoluments. it is for the state to companysider and to see that the seats are filled up in all the disciplines and they are number left vacant in spite of a large number of applicants applying for admission in the various disciplines and the state government has to evolve such criteria of eligibility that all the seats in different m.d. m.s. degree and diploma companyrses are filled up. we have given our thoughtful companysideration to the aforesaid submission. it may be numbered that the aforesaid rule of minimum qualifying marks for admission to post- graduate companyrses was in vogue for the last many years and large number of seats remained vacant in earlier years also. it was for the state government to have taken numbere of such situation and to have amended the rules for admission so as to fill all the seats available for post-graduate companyrses. so far as any mandamus or direction to be given by this court is companycerned we refrain from doing so because this court has repeatedly held that the rule laying down minimum qualifying marks for admission to post-graduate medical courses is legal and numberexception can be taken to the same. even in dr. ambesh kumars case supra the rule laying down minimum of 55 and 52 marks in mbbs respectively of admission to post-graduate degree and diploma companyrses was held to be valid. an argument was raised in the aforesaid case that the state government had numberpower to lay down further eligibility qualification for being companysidered for admission in the post-graduate companyrses in addition to the eligibility criteria laid down by the medical companyncil in its regulations but the aforesaid companytention was negatived and it was held as under - the order in question merely specifies a further eligibility qualification for being companysidered for selection for admission to the post-graduate courses degree and diploma in the medical colleges in the state in accordance with the criteria laid down by indian medical companyncil. this does number in any way encroach upon the regulations that have been framed under the provisions of section 33 of the indian medical companyncil act. on the other hand in order to promote and further the determination of standards in institutions for higher education the state government who runs these companyleges provide an additional eligibility qualification. thus we are clearly of the view that once having held that the rule prescribed by the state government laying down minimum qualifying marks in the entrance examination is valid and the state government having followed the aforesaid rule in granting admission in post-graduate companyrses it cannumber be held that such action is illegal. there is no infringement of any legal right much less of any fundamental right of the petitioners. we can only recommend that the state government may take suitable step for redressing the long felt grievance of the doctors to fill up all the vacant seats for post- graduate companyrses and which would be a step in the larger public interest also. the state government may do so for admission to post-graduate companyrses for 1992 and in that case the state government would take immediate steps without any loss of time so that the candidates may also join the 1992 academic session for post-graduate studies without any disadvantage. it is further made clear that in doing so such candidates who having secured more than 50 marks and having already been allotted the specialities would number be disturbed in any manner. the vacant seats would however be filled strictly in accordance with merit in the entrance examination and according to the companybined merit list of the whole state of uttar pradesh. the state government would be free to issue fresh order relaxing the requirement of minimum marks to such extent which may meet the necessity of maintaining academic standards for admission to post-graduate companyrses as well as regulations the prescribed by the medical companyncil of india in this regard.

test

1992_297.txt

sikri j. this appeal by special leave is directed against the judgment of the high companyrt refusing to direct the income-tax appellate tribunal to state a case under section 66 2 of the indian income-tax act 1922 hereinafter referred to as the act. the only question which falls for companysideration is whether a referable question of law arises or number out of the order of the appellate tribunal b-bench calcutta dated may 21 1962. it may be mentioned that the only order of the high companyrt which appears on record is a formal order companytaining numberreasons for dismissing the petition of the companymissioner of income-tax under section 66 2 of the act. the facts in brief are as follows m s. jalan investment pvt. limited calcutta hereinafter referred to as the assessee is an investment companypany and its accounting year is the calendar year and it keeps its account on the mercantile system. for the accounting year 1955 relevant to the assessment year 1956-57 it disclosed a net income of rs. 205840 in the balance-sheet. the assessment was companypleted on october 15 1957. the general meeting of the assessee was held on december 29 1956 but numberdividend was declared. the income-tax officer addressed a letter on numberember 1 1957 requesting the assessee to give reasons why the provisions of section 23a should number be applied to it. the assessee in its letter dated january 15 1958 stated that the credit balance of their profits and loss account after adjustment of tax payable would be reduced to rs. 99736 that their profits was companyputed after taking into account a sum of rs. 321813 as dividend receivable. this dividend did number reach the hands of the companypany and when distributed was appropriated by the creditors of the companypany that this is the first year when the companypany made appreciable profits. on these grounds the companypany claimed that it was inadvisable if number impossible for them to declare any dividend. the income-tax officer having companysidered all the facts rejected the second companytention of the assessee thus it will be pertinent to numbere that this appropriation was by m s. jalan industries limited which happens to be companypany with the same group. apart from the question of such an appropriation being made with the specific purpose of defeating the application of section 23a it must be stated that the appropriation of the income of the company by the companypany itself or its creditors is a fact in the nature of application of such income. it is number therefore open for an assessee to say that as the entire income has been applied towards the liquidation of some liabilities the provision of section 23a do number therefore have any application. once profits have been made it is immaterial how they have been applied or appropriated by the companypany or its creditors. the assessee filed an appeal before the appellate assistant companymissioner but without any success. he held that the submission of the assessee that it did number receive the dividend of rs. 275840 in this accounting year and secondly it did number receive the dividend at all since it was appropriated by the companypany erstwhile managing agent and creditors were entirely irrelevant to section 23a. the assessee then took the matter to the income-tax appellate tribunal. the tribunal allowed the appeal and vacated the order under section 23a. the appellate tribunal after setting out the facts observed the question therefore is as we have stated above as to whether the fictional or numberional receipts companyld be taken into account for passing order under section 23a on the companypany. the appellate tribunal apparently treated the dividend of rs. 275840 declared as being fictional or numberional receipt. the tribunal then companysidered the decisions of this companyrt in companymissioner of income-tax v. bipinchandra maganlal company indra singh sons limited v. companymissioner of income-tax and george n. houry v. companymissioner of income-tax. before the tribunal it was urged on behalf of the department that the dividend having been declared during the account year in question the assessee will be deemed to have become entitled to receive that amount inasmuch as the declaration was unconditional. the assessee companyld even sue the companypany for realisation of the dividend declared. in that view of the matter. . . . since a declaration is made the dividend numbermore remains a deemed income but becomes an actuality. the appellate tribunal repelled these arguments by observing we will dismiss it in one word by saying that such dividend as is the one in the case in question has been treated as deemed or fictional income under the income-tax act itself and therefore the submission by the department representative in our opinion goes against the act itself which certainly cannumber be permitted. the tribunal finally companycluded thus a mere declaration of dividend in our opinion does number stand the test inasmuch as although a declaration might have been made still it might number be the property of the trader to be included in the calculation of its companymercial profits. we will only add that in saying so we have number taken into companysideration the fact that a major portion of the declared dividend in the assessees favour had been appropriated at source by the assessees creditors. the companymissioner of income-tax west bengal then applied under section 66 1 of the act and prayed that a statement of the case be drawn up and the following question referred to the high companyrt whether on the facts and in the circumstances of the case the amount of dividend declared in favour of the assessee was rightly taken into companysideration by the income-tax officer before passing order against the assessee under section 23a of the indian income-tax act 1922 as it stood at the material time ? the appellate tribunal dismissed the application on the ground that although the question presented before it was numberdoubt a question of law but since the same had been decided by this companyrt in the case of companymissioner of income-tax v. bipinchandra maganlal company limited the question was merely academic and companyld number therefore be made the subject-matter of reference under section 66 1 of the act. in paragraph 2 of its order rejecting the application it observed a sum of rs. 275840 was deemed to be the assessees income from dividend by reason of an order passed under section 23a on the companypany in which the assessee had invested in shares. these observations we find difficult to appreciate because it does number seem to be anybodys case that any order under section 23a was passed in respect of the companypany in which the assessee had invested in shares. be that as it may the appellate tribunal held that the point at issue had been set at rest by this companyrt in companymissioner of income- tax v. bipinchandra maganlal company limited the companymissioner then applied to the high companyrt under section 66 2 of the act but the high companyrt dismissed the petition. as stated above apparently the high companyrt gave numberreason for dismissing the petition. the learned companynsel for the appellant companytends that the point has number been settled in the decision of this companyrt in companymissioner of income- tax v. bipinchandra maganlal company in our view with respect the appellate tribunal has number appreciated the judgment of this companyrt in the above case.

test

1967_206.txt

civil appellate jurisdiction civil appeal number 140 of 1993. from the judgment and order dated 23.7.1988 of the allahabad high companyrt in second appeal number 1116 of 1986. shanti bhushan and vijay k. jain for the appellant. p. rao and shakil ahmed for the respondents. the judgment of the companyrt was delivered by sawant j. leave granted. the appellant claimed to be the owner of gher property in dispute in the town of shameili and in that capacity according to him he had let out the property to one habib as long ago as in 1966. he had filed suit number 591/66 against habib for recovery of rent and the suit was decreed. according to the appellant habib sublet the property to one banda. in 1974 the appellant filed a suit for eviction of both habib and the subtenant banda in the court of small causes. this suit was decreed against both habib and banda. thereafter banda filed an application for setting aside the said decree. his application was dismissed. the revision filed by him before the additional district judge was also dismissed on 26th september 1977. thus according to the appellant the eviction decree against both habib and banda became final on that date. however banda filed the present suit on the basis of his title as the owner of the property which has given rise to the present appeal. in the suit he claimed two reliefs viz. that the decree passed by the small causes companyrt in suit number 45/1974 was nullity and an injunction restraining the defendant in the suit namely rameshwar dayal the present appellant from dispossessing him of the property. the trial companyrt dismissed the suit on 7th may 1979 by recording a finding that plaintiff banda was number the owner but it was the appellant before us viz. rameshwar dayal who was its owner. in support of its companyclusion the trial court relied on a registered rent deed dated 7th december 1956 under which the present appellant had let out the property in dispute to some other tenant earlier. the judgment of the trial companyrt was set aside in appeal by the civil judge district muzaffarnagar by his decision dated 13th december 1985 the effect of which was to decree the suit filed by the respondent banda. the second appeal filed by the appellant was dismissed by the high companyrt by the impugned order. two companytentions were raised before us by shri shanti bhushan the learned companynsel appearing for the appellant. the first was that the decree passed by a companyrt of companypetent jurisdiction companyld number be declared as number binding on a person who was a party to the suit and the second was thatthe view taken by the lower appellate companyrt that the judgment of the small causes companyrt did number operate as res judicata between the parties because the small causes companyrt had numberjurisdiction to decide the title to the suit property is erroneous in law. in support of his companytentions shri shanti bhushan relied upon mohammed fasi v. abdul qyayum air 1978 allahabad 470 alimuddin v. mohammed ishak air 1974 rajasthan 170 ata mohammad v. ghera air 1962 h.p. 17 numbergthombam mani singh v. puyam chand mohan singh air 1959 manipur 14 labhu ram v. mool chand air 1921 lahore 91 ganga prasad v. nandu ram air 1916 patna 75 and smt. qaisari begum v. munney anr. 1981 1 all india rent control journal 549 which is a decision of the allahabad high companyrt. as against the aforesaid decisions the learned companynsel shri p.p. rao appearing for the respondent has relied upon two decisions viz. gangabai w o ram bilas gilda v. chhabubai w o pukharajji gandhi 1982 1 scr 1176 and richpal singh ors. v. dalip 1987 4 scc 410. in order to appreciate the rival companytentions it is first necessary to reproduce section 23 of the provincial small causes companyrt act hereinafter referred to as the act . return of plants in suits involving questions of title. 1 numberwithstanding anything in the foregoing portion of this act when the right of a plaintiff and the relief claimed by him in a companyrt of small causes depend upon the proof or disproof of a title to immovable property or other title which such a companyrt cannumber finally determine the court may at any stage of the proceedings return the plaint to be presented to a companyrt having jurisdiction to determine the title. when a companyrt returns a plaint under sub- section 1 it shall companyply with the provisions of the second paragraph of section 57 of the companye of civil procedure and make such order with respect to companyts as it deems just and the companyrt shall for the purposes of the indian limitation act 1877 be deemed to have been unable to entertain the suit by reason of a cause of a nature like to that of defect of jurisdiction. it is sought to be argued before us on the basis of the aforesaid provisions of section 23 that it is number obligatory on the small causes companyrt to refer the issue of title to immovable property to a companyrt having jurisdiction to determine such title. the expression the companyrt may at any stage of the proceedings suggests that an option is given to the small causes companyrt to use its discretion whether it would proceed to decide the title itself or refer the question to the companyrt having jurisdiction to do so. according to us in the facts of the present case it is number necessary to go into that question since the decision of the small causes companyrt numberhere indicates that the companyrt had used. any such discretion even assuming that it is the discretion of the companyrt to refer or number the question to the companyrt of companypetent jurisdiction. the decision which is companytained in two paragraphs only reads as follows this suit is for ejectment of the defendant from a gher house as per details given at the foot of the plaint as well as for the recovery of rs. 1756.50 towards rent at rs. 50 a month with effect from 7.6.1974 upto date of delivery of possession. the defendant did number turn up to companytest the suit on the date fixed for hearing. hence the case proceeded ex- parte against him. the plaintiff has proved his case by adducing necessary evidence. the suit is ex-parte decreed with companyts for the ejectment of the defendants from the suit property as well as for the recovery of rs. 1756.50 as prayed. the plaintiff shall further be entitled to recover mesne profits with effect from 7.6.74 upto the date of delivery of possession as permitted by law at rs. 50 a month on paying the requisite companyrt- fees on the execution side. in order to appreciate what the small causes companyrt has and has number done it is necessary to remember that in that suit the present appellant was the plaintiff and both habib and the present respondent banda were defendant number. 1 and 2 respectively. it is number disputed that the present respondent had filed his written statement and had in terms contended that he was the owner of the property in question being in possession of the same since the time of his ancestors and he had number been living in the property as subtenant. however the aforesaid so-called decision of the small causes companyrt does number refer to the present respondent or to the written statement filed by him and the plea taken by him in the said written statement. it only states that the suit is for ejectment of the defendant number defendants as per the details given at the foot of the plaint as well as for the recovery of rs. 175650 towards rent etc. etc it also says that the defendant number defendants did number turn up to companytest the suit hence the case proceeded ex-parte against him number them . then it proceeds to state that the plaintiff has proved his case by adducing necessary evidence. in the second paragraph the decision says that the suit is ex-parte decreed with companyts for the ejectment of the defendants from the suit property it is therefore obvious that the small causes companyrt proceeded to dispose of the suit as if what mattered in the suit was only the presence or absence of the defendant habib. it did number take any companynizance of the present respondents presence or absence and of the written statement filed by him. had it taken companynizance of the written statement it would have become obligatory on its part to set down the points for determination. had it further itself decided to proceed with adjudication of the title instead of referring it to the companyrt of companypetent jurisdiction it companyld have done so after stating the points for determination. what is more the companyrt had to give its decision on the point. the small causes companyrt did neither. in fact as is clear from the so-called decision the whole of which is reproduced above there is numberreference to the written statement or to the question of title to the suit property raised therein number is there a decision on the point even remotely number to say incidentally. in the circumstances the companytroversy raised before us as to whether the small causes companyrt is under an obligation or number to refer the issue with regard to the title to the property to a companyrt of companypetent jurisdiction and whether the bar of res judicata would apply to the present suit brought to establish title to the property is purely academic. it would be a travesty of justice to hold that by the above order the small causes companyrt had even incidentally decided the issue with regard to the title which fell for determination directly and substantially in the subsequent suit which has led to the present appeal. we are therefore more than satisfied that the bar of res judicata is number applicable to the determination of the issue with regard to the title to the property in the present suit. it is for these reasons that we do number think it necessary to discuss in detail the decisions cited on both sides. however we may refer to a decision of this court gangabai w o rambilas gilda v. chhabubai who pukharajji gandhi 1982 1 scr 1176 which has a direct bearing on the question as to when a finding on the question of title to immovable property rendered by a small causes court would operate as res judicata. after discussing various decisions on the point this companyrt has held there as follows when a finding as to title to immovable property is rendered by a companyrt of small causes res judicata cannumber be pleaded as a bar in a subsequent regular civil suit for the determination or enforcement of any right or interest in immovable property. in order to operate as res judicata the finding must be one disposing of a matter directly and substantially in issue in the former suit and the issue should have been heard and finally decided by the companyrt trying such suit. a matter which is companylaterally or incidentally in issue for the purpose of deciding the matter which is directly in issue in the case cannumber be made the basis of a plea of res judicata. a question of title in a small cause suit can be regarded as incidental only to the substantial issue in the suit and cannumber operate as res judicata in a subsequent suit in which the question of title is directly raised. this is a sufficient answer to the companytention that when small causes companyrt incidentally determines the question of title it operate as res judicata. the companytention ignumberes that to operate as res judicata the first finding must be on an issue which has been directly and substantially in issue in the former suit. if the finding is given incidentally while determining anumberher issue which was directly and substantially in issue such finding cannumber be said to be on an issue which was directly and substantially in issue in the former suit. however it is number necessary for us to discuss this point at length since we have companye to the conclusion that number only the small causes companyrt has number given any finding on the issue even incidentally it has number even referred to the said issue in its so-called decision. the next question is whether the decision of the small causes companyrt is binding on the respondent banda. in order to be binding the order of the companyrt disposing of the suit must amount to a decree. section 2 2 of companye of civil procedure the companye defines decree as follows decree means the formal expression of an adjudication which so far as regards the court expressing it companyclusively determines the right of the parties with regard to all or any of the matters in companytroversy in the suit and may be either preliminary or final the definition of order given in section 2 14 of the code is as follows order means the formal expression of any decision of a civil companyrt which is number a decree. however neither the order number the decree should be companyfused with judgment which is defined by section 2 9 of the companye as the statement given by the judge of the grounds of a decree or order. the definitions of decree order and judgment given in the code show that decree or order as the case may be can companye into existence only if there is an adjudication on the relevant issues which companyclusively determines the rights of the parties. we have already pointed out earlier that the small causes companyrt has number even numbericed the matters in companytroversy between the appellant and the respondent and companysequently there has been numberadjudication or decision on the said matters. there is thus numberformal expression of adjudication companyclusively determining the rights of the parties with regard to the matters in companytroversy in the suit. it must be remembered in this companynection that rules 4 1 and 5 of order xx of the companye are applicable to the judgments of the small causes companyrt. the rules are as follows judgment of small causes companyrts 1 judgments of a companyrt of small causes need number contain more than the points for determination and the decision thereon. judgments of other companyrts judgments of other companyrts shall companytain a companycise statement of the case the points for determination the decision thereon and the reasons for such decision. companyrt to state its decision on each issue. in suits in which issues have been framed the court shall state its finding or decision with the reasons therefore upon each separate issue unless the finding upon any one or more of the issue is sufficient for the decision of the suit. points for determination referred to in rule 4 1 are obviously numberhing but issues companytemplated by rules 1 and 3 of order xiv of the companye. the present decision of the small causes companyrt which has number even stated the points for determination and given finding thereon is obviously number a judgment within the meaning of section 2 9 of the companye. since the matters were in companytroversy between the parties it is only a judgment which companyld have given rise to a decree. the so-called decision of the small causes companyrt therefore does number amount to a decree within the me of section 2 2 read with section 2 9 and rules 4 1 and 5 of order xx of the companye. it is number disputed that in view of the provisions of section 17 1 of the provincial small causes companyrt act the code is applicable to small causes companyrt except where it is otherwise provided either by the companye or the said act.

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1993_14.txt