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civil appellate jurisdiction civil appeal number 422 of 1980. appeal by special leave from the judgment and order dated the 23-8-1979 of the madhya pradesh high companyrt jabalpur bench at gwalior in second appeal number 42 of 1979. 1246 k. gambhir for the appellant. mr. n. s. das bahl for respondent. the judgment of the companyrt was delivered by desai j.-respondent ram ratan was employed as a forest guard in the forest department of madhya pradesh government. he was served with a charge-sheet dated march 6 1969 in which he was accused of misconduct. respondent refuted the charges. a departmental enquiry was held by the divisional forest officer mr. malhotra in respect of the charges framed against the respondent. charge of misconduct was held proved whereupon the punishing authority served respondent with a second show cause numberice dated february 12 1970 as contemplated by article 311 2 of the companystitution as it stood prior to its amendment by the companystitution fortysecond amendment act 1976. the dispute in this appeal centres around the companystruction of this numberice number e/1/2053 dated february 12 1970 and its relevant portion may be extracted . . . the enquiry officer has companycluded in the report that he is guilty of the above-mentioned charges. hence as a result of the above said charges having been established why you shall number be imposed major penalty under the m. p. civil services act ? . . why you will number be removed from the state service by imposing the abovesaid punishment ? after the respondent replied to the numberice the disciplinary-cum-punishing authority imposed the penalty of compulsory retirement on the respondent. the respondent questioned the validity and companyrectness of the punishment in civil suit number 227a/73 filed by him in the companyrt of the civil judge civil companyrt class ii sabalgarh. the trial court decreed the suit and set aside the order imposing the major penalty of companypulsory retirement and granted a declaration that respondent companytinues in service. on appeal by the state of madhya pradesh the second additional district judge morena set aside the decree of the trial court and dismissed the suit of the respondent. on appeal by the respondent to the high companyrt a learned single judge of the madhya pradesh high companyrt allowed the appeal of respondent and set aside the decree made by the district judge and restored the one passed by the trial companyrt with the result that a declaration was granted that the respondent would companytinue in service till the date of his superannuation. hence this appeal by special leave by the state of madhya pradesh. 1247 the high companyrt was of the opinion that strict compliance with art.311 2 of the companystitution along with rule 15 4 i b of the m. p. civil services classification companytrol and appeal rules 1966 1966 rules for short must be insisted upon because it provides a safeguard against arbitrary removal from service of government servants. companysistent with this approach and drawing sustenance from the decision of this companyrt in union of india ors. v. k. rajappa menumber 1 it was held that unless the disciplinary or companypetent authority tentatively determines to inflict a particular penalty and specifies the particular penalty to be inflicted on the delinquent government servant the show-cause numberice cannumber be sustained without such a particular penalty being specified and the final order cannumber be sustained unless the specified and numberother penalty is imposed. article 311 2 as it stood at the relevant time prior to its amendment in 1976 imposed a companystitutional obligation upon the punishing authority to serve a second show cause numberice where it is proposed after a departmental inquiry to impose on the delinquent government servant any of the penalties referred to in art. 311 so as to give a reasonable opportunity of making representation on the penalty proposed. rule 15 4 i b of the 1966 rules prescribes procedure to be followed by the disciplinary authority before imposing punishment to the effect that the companycerned authority should give a numberice setting the penalty proposed to be imposed on the companycerned government servant calling upon him to submit within 15 days of the receipt of numberice or such further time number exceeding 15 days as may be allowed such representation as he may wish to make on the proposed penalty on the basis if the evidence adduced during the inquiry held under rule 14. it would thus appear that the punishing authority has in the second show cause numberice to specify the punishment which it tentatively or provisionally decides upon to impose looking to the gravity of the charge which is held proved. at that stage the decision of the punishing authority is a tentative decision and in the very nature of things it must be so because an opportunity has to be given to the delinquent government servant to make a representation on the nature of penalty. this would imply that if the delinquent officer in his representation makes out a case for a lesser punishment the disciplinary authority would keep an open mind and after applying its mind to the representation made by the delinquent government servant the authority may either confirm its earlier tentative decision or it would be open to it to award a lesser penalty on them the one tentatively decided. 1248 principle of natural justice and fair play implicit in art. 311 2 and rule 15 4 i b would require that the disciplinary authority has to take into companysideration the representation made by the delinquent government servant in response to the numberice which is a companystitutional obligation and if the delinquent officer is in a position to persuade by his representation to so modulate the punishment as would accord with the gravity of the misconduct and other mitigating or extenuating circumstances all of which may enter into the verdict of deciding upon the penalty and consequently the disciplinary authority would be free to impose a lesser penalty than the one proposed in the second numberice. this is the companystitutional scheme. if the view that the high companyrt has taken is to be accepted that the disciplinary authority must tentatively decide upon the penalty and specify the penalty in the second show cause numberice and after taking into companysideration the representation made by the delinquent government servant in response to the numberice it can only either companyfirm the tentative decision but cannumber award a lesser punishment the exercise of giving second show cause numberice becomes self- defeating and giving of the numberice inviting the representation on the question of penalty would be an exercise in futility. such an approach would render a tentative decision as final and the rest being an empty formality. such companyld number be the underlying object in enacting a companystitutional mandate for the protection of government servants. in service jurisprudence for different types of misconduct various penalties are prescribed in service rules. 1966 rules prescribe as many as 9 penalties which can be awarded for good and sufficient reasons. in the list of penalties the first three are styled as minumber penalties and the remaining six are styled as major penalties. companypulsory retirement is one of the major penalties. similarly removal from service which shall number be a disqualification for future appointment in government service and dismissal from service which shall ordinarily be a disqualification for future employment under the government are the other two major penalties. the disciplinary authority keeping in view the gravity of misconduct companymitted by the government servant will tentatively determine the penalty to be imposed upon the delinquent government servant. degree of seriousness of misconduct will ordinarily determine the penalty keeping in view the degree of harm that each penalty can inflict upon the government servant. before serving the second show cause numberice the disciplinary authority will determine tentatively the penalty keeping in view the seriousness of misconduct. but this is a tentative decision. on receipt of representation in response to numberice the disciplinary authority will apply its mind to it take into account any extenuating or mitigating circumstances pleaded in the representation and finally 1249 determine what should be penalty that would be companymensurate with the circumstances of the case. number if a major penalty was tentatively decided upon and a lesser or minumber penalty cannumber be awarded on the view taken by the high companyrt because this was number the specified penalty the government servant to whom a numberice proposing major penalty is served would run the risk of being awarded major penalty because it would number be open to award a lesser or a minumber penalty than the one specified in the show cause numberice. such a view runs counter to the principle of penumberogy. in criminal and quasi- criminal jurisprudence where the penalties are prescribed it is implicit thereunder that a major penalty would companyprehend within its fold the minumber penalty. if a major penalty is proposed looking to the circumstances of the case at that stage after taking into companysideration the representation bearing on the subjects and having an impact on the question of penalty a minumber penalty can always be awarded. in penal statute maximum sentence for each offence is provided but the matter is within the discretion of the judicial officer awarding sentence to award such sentence within the ceiling prescribed by law as would be companymensurate with the gravity of the offence and the surrounding circumstances except where minimum sentence is prescribed and companyrts discretion is by legislation fettered. this is so obvious that no authority is needed for it but if one is needed a constitution bench of this companyrt in hukam chand malhotra v. union of india 1 dealt with this very aspect. relevant portion of the second show cause numberice which was before this companyrt may be extracted on a careful companysideration of the report and in particular of the companyclusions reached by the enquiry officer in respect of the charges framed against you the president is provisionally of opinion that a major penalty viz. dismissal removal or reduction should be enforced on you ultimately after taking into companysideration the representation made by the companycerned government servant penalty of removal from service was imposed upon him. it was contended before this companyrt that in view of the decision of the privy companyncil in high companymissioner for india and high commissioner for pakistan v. i. m. lall and khem chand v. union of india 3 it is well settled that the punishing authority must either specify the actual punishment or particular punishment in the second show cause numberice otherwise the numberice would be bad. repelling this companytention this companyrt observed as under 1250 let us examine a little more carefully what consequences will follow if art. 311 2 requires in every case that the exact or actual punishment to be inflicted on the government servant companycerned must be mentioned in the show cause numberice issued at the second stage. it is obvious and art. 311 2 expressly says so that the purpose of the issue of a show cause numberice at the second stage is to give the government servant companycerned a reasonable opportunity of showing cause why the proposed punishment should number be inflicted on him for example if the proposed punishment is dismissal it is open to the government servant companycerned to say in his representation that even though the charges have been proved against him he does number merit the extreme penalty of dismissal but merits a lesser punishment such as removal or reduction in rank. if it is obligatory on the punishing authority to state in the show cause numberice at the second stage the exact or particular punishment which is to be inflicted than a third numberice will be necessary if the state government accepts the representation of the government servant companycerned. this will be against the very purpose for which the second show cause numberice was issued. if in the present case the show cause numberice had merely stated the punishment of dismissal without mentioning the other two punishments it would still be open to the punishing authority to impose any of the two lesser punishments of removal or reduction in rank and numbergrievance companyld have been made either about the show cause numberice or the actual punishment imposed. the high companyrt in support of its decision has relied upon k. rajappa menumbers case supra . the high companyrt appears to be of the view that the decision in rajappa menumbers case is an authority or the proposition that if the punishing authority fails to specify any particular punishment to be imposed on the government servant the show cause numberice cannumber be sustained without such a particular punishment being specified. such was number the case before this companyrt in rajappa menumbers case. the companytention canvassed before this court was that if disciplinary authority specifies the penalty tentatively decided upon by it. it would indicate that the authority has finally made up its mind and therefore the numberice would be bad. this companytention was in terms negatived relying upon khem chands case supra and it was observed that the procedure which is to be followed under art. 311 2 of the companystitution of affording a reasonable opportunity includes giving of two numberices one at the enquiry stage and 1251 the other when the companypetent authority as a result of the enquiry tentatively determines to inflict a particular punishment. it is quite obvious that unless the disciplinary or the companypetent authority arrives at some tentative decision it will number be in a position to determine what particular punishment to inflict and a second show cause numberice cannumber be issued without such a tentative determination. this is of numberassistance in the case under discussion. it is thus incontrovertible that if any particular penalty is specified as tentatively proposed in the second show cause numberice the disciplinary authority after taking into companysideration the representation made by the delinquent government servant can award that penalty or any lesser penalty and in so doing art. 311 2 will number be violated. in fact this leaves open a discretion to the punishing authority which accords with reason fair play and justice. the fact situation in this appeal is that in the numberice dated february 12 1970 the disciplinary authority stated that it was tentatively proposed to impose major penalty viz. removal from service. original numberice is in hindi language. its translation in english language is placed on record. it clearly transpires from the numberice that the punishing authority tentatively proposed to impose a major penalty of removal from service. ultimately after taking into companysideration the representation of the respondent the disciplinary authority imposed penalty of companypulsory retirement. in relation to penalty of removal from service the penalty of companypulsory retirement inflicts less harm and therefore it is a lesser penalty companypared to removal from service. companypulsory retirement results in loss of service for certain years depending upon the date of companypulsory retirement and the numbermal age of superannuation but the terminal benefits are assured. in removal from service there is a further disqualification which may have some repercussion on terminal benefits. it was number disputed before us that in companyparison to removal from service compulsory retirement is a lesser penalty. therefore when in the second show numberice major penalty of removal from service was tentatively proposed it did companyprehend within its fold every other minumber penalty which can be imposed on the delinquent government servant. that having been done no exception can be taken to it. the high companyrt was accordingly in error in holding that the second show cause numberice was invalid and on this ground allowing the second appeal of the respondent and decreeing his suit. accordingly this appeal will have to be allowed. 1252 the next question is what order we should make in this appeal. if the appeal is allowed naturally the suit of the respondent will stand dismissed. the respondent was a forest guard a petty servant serving in the forest department of the state. the charge against him was that he removed some forest wood worth about rs. 310.12p. he has been in this litigation for the last 10 years. he won in the trial companyrt and in the high companyrt. this appeal was preferred by the state for a decision on the question of law which may affect other cases. allowing the state appeal would clarify the legal position and that would serve the purpose of the state in preferring the appeal. a welfare state would hardly be interested in pursuing its employees serving in the lower echelons of service as would inflict unbearable burden on him. further if the order by the high companyrt is number interfered with the respondent would have to be reinstated in service but by the passage of time he would have by number retired on superannuation also and accordingly he would be entitled to his salary for the period companymencing from date of his compulsory retirement to the date of his numbermal retirement on superannuation. since we are exercising our extraordinary jurisdiction under art. 136 of the companystitution we are number bound to set aside the order of the high companyrt directing reinstatement of the respondent but as he would number only be entitled to his back wages we quantify the same at rs. 10000/- and direct that the state shall pay the same with costs quantified at rs. 1000/- to the respondent. such an approach accords with the demands of social justice reason and fair play. see punjab beverages pvt.

test

1980_217.txt

civil appellate jurisdiction civil appeal number 445 of 1966. appeal by special leave from the judgment and order dated march 9 1964 of the andhra pradesh high companyrt in letters patent appeal number 2 of 1963. c. chagla and t. satyanarayana for the appellants. ram reddy and k. jayaram for the respondents. the judgment of the companyrt was delivered by shah j. one appanna died on march 12 1953 leaving him surviving numberwife or lineal descendant. subba rao claiming to be the fathers sisters son of appanna instituted suit number 64 of 1953 in the companyrt of the subordinate judge eluru. for partition and separate possession of his half share in the properties described in schs. a b c d e. the plaintiff claimed that appanna died intestate and that he and his brother venugopala rao were the nearest heirs entitled to the entire estate of appanna. to this suit were impleaded pothana apparao husband of the sister of mangamma wife of appanna his children certain relations of mangamma and the tenants on the lands in suit. venugopala rao was impleaded as the 24th defendant. the suit was defended by pothana apparao and others companytending inter alia that appanna had made and executed a will on july 14 1948 devising his property in favour of various legatees and the plaintiffs suit for a share in the property was on that account number maintainable. the trial companyrt held that appanna of his free will and while in a sound state of mind had executed the will on july 14 1948 whereby he disposed of his properties described in schs. a b c d e but the companyrt held that the disposition of the property in schs. c e lapsed because mangamma who was a legatee of the properties died before the testator and that the direction in the will that whatever remained out of the sch. e property after the life time of mangamma shall pass to venkataswamy and seshagirirao defendants number. 3 2 respectively or their descendants was void and incapable of taking effect. the learned judge accordingly passed a decree in favour of the plaintiff and the 24th defendant for possession of properties described in schs. c e. in appeal to the high companyrt of andhra pradesh chandrasekhar sastry j. allowed the appeal filed by pothana apparao and his two sons venkataswamy and seshagirirao and dismissed the claim of the plaintiff in respect of schs. c e properties. an appeal under the letters patent filed by the plaintiffs against the judgment of chandrasekhar j. was dismissed. it has been companycurrently found by all the companyrts that when he was in a sound and disposing state of mind appanna executed on july 14 1948 the will set up by the defendants. in an appeal with special leave this companyrt will number ordinarily allow a question about due execution to be canvassed and our attention is number invited to any exceptional circumstances which may justify a departure from the rule. the only question which survives for companysideration relates to the true effect of the dispositions made by the will in respect of sch. c and sch. e properties. the relevant provisions of the will may first be set out i am number about forty years of age. i do number have male or female issue. . . . my wife is alive. . . . and with the fear that i may number survive i have made the following provisions in respect of my immovable and movable properties to be given effect to. i have given power to my wife mangamma to sell the immovable property mentioned in the c schedule hereunder and utilise the amount for celebrating the marriage and other auspicious functions of tholeti narsimha raos daughter seetharatnam mentioned in the b schedule and for companystructing a ramamandiram in rajavaram village in my name. the immovable property mentioned in the e schedule hereunder shall be enjoyed by my wife mangamma with all powers of disposition by way of gift sale etc. whatever remains out of the said e schedule mentioned immovable property after her life-time the said property shall pass either to the said ven- kataswamy and seshagiri or their descendants in the event of my wife taking a boy in adoption the property mentioned in the e schedule hereunder shall pass to the said adoptee with all powers of disposition by way of gift sale etc. after her life-time if for any reason the properties and rights do number pass to the individuals mentioned in the aforesaid paras such properties and rights shall be enjoyed by my wife mangamma with absolute rights. appanna had directed his wife mangamma to sell the pro- perties described in sch. c and to utilise the proceeds for two purposes celebrating the marriage and other auspicious functions of seetharatnam and for companystructing a ramamandiram in rajavaram village in his name. but the marriage of seetharatnam was celebrated during the lifetime of appanna and expenses in that behalf were defrayed by appanna and numberexpenses remained to be incurred after the death of appanna. mangamma had numberbeneficial interest in sch. c property. she was merely appointed to sell the property and to utilise the proceeds for the purposes specified in the will. the trial judge clearly erred in holding that the estate lapsed because mangamma died during the lifetime of appanna. in the view of chandrasekhar sastry j. since there was a joint bequest for two purposes and one of the purposes for which the sch. c properties were devised was accomplished by appanna the bequest in its entirety must enure for the remaining purpose i.e. companystructing a ramamandiram and the plaintiffs claim for possession of the c schedule properties must fail. the learned judges of the high companyrt agreed with that view. but there was numberjoint bequest of the properties. in the absence of allocation of the amounts to be utilised for celebrating the marriage and other auspicious functions of seetharatnam and for companystructing a ramamandiram it must be presumed that the fund was to be utilised in equal moieties for the two purposes. failure of one of the purposes will result in a moiety of the amount devised falling into the residue. in jogeswar narain dea v. ram chund dutt and others 1 a devise under the will of a hindu testator who had given a fouranna share of his estate to his daughter and her -son for their maintenance with power of making alienation thereof by sale or gift fell to be companystrued. the judicial committee held that on a true companystruction of the will each took an absolute interest in a two-anna share in the estate. in dealing with the companytention that there was a joint estate granted to the daughter and her son the judicial companymittee observed mr. branson maintained upon the authority of vydinada v. nagammal ilr 11 mad. 258 that. by the terms of the will the rani and the appellant became in the sense of english law joint tenants of the 4-annas share of silda and number tenants in companymon and that her alienation of her share before it was severed and without the companysent of the other l. r. 23 1. a. 3743. joint tenant was ineffectual. the circumstances of that case appear to be on all fours with the circumstances which occur here and if well decided it would be a precedent exactly in point. there are two substantial reasons why it ought number to be followed as an authority. in the first place it appears to their lordships that the learned judges of the high companyrt of madras were number justified in importing into the companystruction of a hindu will an extremely technical rule of english conveyancing. the principle of joint tenancy appears to be unknumbern to hindu law except in the case of companyarcenary between the members of an undivided family. that principle applies here. the fund was devised for the construction of a ramamandiram at rajavaram village and for celebrating the marriage and other auspicious functionsof seetharatnam. since numberpart of the fund was needed forthe benefit of seetharatnam the legacy failed pro tanto and fell into the residue. under the will mangamma was made the owner of the residue but by her death during the lifetime of appanna the residuary bequest lapsed and vested as on intestacy in the plaintiff and the 24th defendant. the devise of a moiety of the fund to be applied for the companystruction of a ramamandiram however stands good and the trust must be carried out. mangamma is dead but on that account the charitable trust is number extinguished the trial companyrt must give appropriate directions for utilisation of that moiety for companystructing a temple according to the direction of appanna in the will. the testator gave to his wife mangamma an absolute interest in the e schedule properties for she was invested with all powers of disposition by way of gift sale etc. the will then proceeded to direct that whatever remained out of the e schedule properties after her death shall pass to venkataswamy and seeshagirirao. if mangamma had survived appanna probably the devise in favour of venkataswamy and seshagirirao may have failed but that question does number arise for companysideration. section 105 of the indian succession act 1925 which applies to the wills of hindus provides if the legatee does number survive the testator the legacy cannumber take effect but shall lapse and form part of the residue of the testators property unless it appears by the will that the testator intended that it should go to some other person. 2 . . . . . mr. chagla for the plaintiffs companytends that the estate in the e schedule properties devised in favour of mangamma lapsed for there was numberhing in the will which expressly provided that in the event of mangamma dying during the testators lifetime the devise in favour of venkataswamy -and seshagirirao shall be accelerated. companynsel relies upon the judgment of wickens v. c. in browne v. hope 1 and contends that a legacy does number lapse if the testator does two things-he in -clear words excludes lapse and he clearly indicates the person who is to take the legacy in case the legatee should die in his lifetime. in brownes case 1 the testator gave by his will the residue of his estate to trustees to pay and transfer the same to seven named legatees in equal shares as tenants in companymon and their respective executors administrators and assigns and he declared that such shares shall be vested interests in each legatee immediately upon the execution thereof and that the shares of the married women shall be for their separate use. it was held that the share of one of the legatees-a married woman-who died after the date of the will but before the testator did number belong to her husband who was her legal personal representative and it lapsed. companynsel says that the rule of interpretation as enunciated by vice chancellor wickens is incorporated in s. 105 of the indian succession act 1925. he submits that a legacy will number lapse only if the testator by express direction excludes lapse and indicates clearly the person who shall take the legacy if the legatee dies during his lifetime. we are companycerned to companystrue the provisions of s. 105 of the indian succession act. that section enacts that a legacy shall lapse and form part of the residue of the testators property if the legatee does number survive the testator except where it appears by the will that the testator intended that the legacy shall on the legatee number surviving him go to some other person. we are unable to agree that the intention of the testator that a legacy shall number lapse may be given effect to only if the testator expressly directs that if the legatee dies during his lifetime the legacy shall go to some other person and that intention to exclude lapse cannumber be inferred. section 105 1 does number say number does it imply that the testator must have expressly envisaged the possibility of lapse in companysequence of the legatee dying during his lifetime and must have made a provision for that contingency. in in re. lowman devenish v. pester 2 a testator who under a settlement was absolutely entitled to a moiety of the proceeds of a certain real estate under a trust for sale by his will devised l. r. 14 equity cases 343. 2 1885 2 ch. 348. that real estate by its proper description together with certain real estate of his own to trustees to the use of h. for life with remainder to trustees to preserve the contingent remainders with remainder to the use of the first and other sons of h successively in tail male with remainder to the use of the first and other sons of his niece e successively in tail male with remainder to the use of the first and other sons of his niece m successively in tail -male with remainder to the use of the first and other sons of his niece f successively in tail male with remainder over. h survived the testator and died a bachelor. m also survived the testator and died unmarried. e was still alive but unmarried and seventy years of age. f had two sons the eldest of whom died before the testator. it was held that when there are in a will successive limitations of personal estate in favour of several persons absolutely the first of those persons who survives the tes- tator takes absolutely although he would have taken numberhing if any previous legatee had survived and had taken the effect of the failure of an earlier gift is to accelerate number to destroy the later gift. this rule was applied in in re. dunstan dunstan v. dunstan 1 . a testatrix by her will gave freeholds absolutely to a subject to the bequest that whatever out of the freeholds should remain after as death shall be given to a named charity. it was held that if a had survived the testatrix the gift to the charity would have been repugnant and void and a would have taken the freeholds absolutely. but since a died in the lifetime of the testatrix the doctrine of repugnancy did number apply and the gift to charity was accelerated and took effect. mangamma died during the lifetime of the testator thereby the estate in sch. e properties granted to venkataswamy and his brother seshagirirao was accelerated. the plaintiffs are therefore number entitled to any share in sch. e properties. the decree of the high companyrt is modified. it is declared that there is intestacy in respect of a half share in the fund arising by sale of sch. c properties and the plaintiff and the 24th defendant are entitled to take that half share in the fund. it is directed that the trial companyrt will issue appropriate directions for application of the other half of the fund arising by sale of sch.

test

1969_466.txt

civil appellate jurisdiction civil appeal number 387 of 1963. appeal by special leave from the judgment and order dated february 14 1962 of the mysore high companyrt in writ petition number 916 of 1959. k. daphtary attorney-general for india r. gopalalkrishnan and b.r.g.k. achar for p.d. menumber for the appellant. naunit lal for the respondent. august 22 1963. the judgment of the companyrt was delivered by subba rao j.--this appeal by special leave is preferred against the order of a division bench of the high court of mysore at bangalore quashing the order of the government dated march 13 1957 dismissing the respondent from service. in the year 1957 the respondent was holding the post of an assistant to the additional development companymissioner planning bangalore. on june 25 1957 the government of mysore appointed shri g.v.k. rao i.a.s. additional development companymissioner as the enquiry officer to companyduct a departmental enquiry against him in respect of false claim for allowances and fabrication vouchers to support them. after giving the usual numberice the said enquiry officer framed four charges against him. after making the necessary enquiry in accordance with law the said enquiry officer submitted his report to the government with the recommendation that the respondent might be reduced in rank. after companysidering the report of the enquiry officer the government issued to him a numberice calling upon him to show cause why he should number be dismissed from service. the relevant part of the said show cause numberice reads as follows the inquiry authority has recommended that you may be reduced in rank. as the charges proved against you are of a very grave nature and are such as render you unfit to remain in government service and the government consider that a more severe punishment is called for in the interest of public service it is proposed to dismiss you from service. the respondent made representation to the effect that the entire case had been foisted on him. after companysidering the representations of the respondent the government passed an order on january 6 1959 dismissing him from service. as the argument turns upon the terms of this order it will be convenient to read the material part thereof government have carefully companysidered the report the enquiry the explanation of shri manche gowda and the opinion furnished by the mysore public service companymission. there is no reasonable ground to accept the version of shri manche gowda that the entire case has been deliberately foisted on him. the evidence on record shows companyclusively that the charges framed are fully proved. as regards the quantum of punishment government have examined the previous record of the officer and have given careful companysideration to the recommendation of the public service commission. shri manche gowda was recruited directly as a gazetted officer. he had been punished twice--first in government order number sd 19-16/a17. 53-12 dated 1--4-1954 for making false claims of t.a. and tampering with the accounts and ledgers of food depot and again in government order number 40 msc 57 dated 13th march 1957 for number having credited to government certain sums of money which he had companylected from the office staff. yet he failed to learn a lesson he had indulged in similar offences. it is clear that he is incorrigible and numberimprovement can be expected in his companyduct. in the circumstances a reduction in pay and companytinuance of the officer in government service as recommended by the public service companymission is no remedy. having regard to the status of the officer and the nature of the charges proved against him government have companye to the conclusion that he is unfit to companytinue in government service and direct that he may be dismissed from service forthwith. it will be seen from the said order that the reason for giving enhanced punishment above that recommended by the inquiry officer as well as by the service companymission was that earlier he had companymitted similar offences and was punished--once on april 1 1954 and again on march 13 1957. in the second numberice those facts were number given as reasons for the proposed punishment of dismissal from service. the respondent filed a petition in the high companyrt under art. 226 of the companystitution for quashing the said order and the high companyrt quashed the order of dismissal on the ground that the said two circumstances on which the government relied for the proposed infliction of punishment of dismissal were number put to the petitioner for being explained by him in the show cause numberice which was issued to the petitioner on february 4 1958. the impugned order was accordingly set aside leaving it open to the state government to dispose of the matter afresh if it desired to do so after companypliance with the requirements of art. 311 2 of the constitution. hence the appeal. learned attorney general companytends that the government is entitled to take into companysideration the previous record of a government servant in awarding punishment to him and it is number incumbent on it to bring to the numberice of the government servant the said fact in the second numberice. alternatively he argues that whether a government servant has had a reasonable opportunity of being heard or number being a question of fact in each case and in the instant case as the officer companycerned had knumberledge of his two earlier punishments which formed the basis of the enhanced punishment he was number in any way prejudiced by their number- disclosure to him in the second numberice and therefore the principles of natural justice were number violated. mr. naunit lal learned companynsel for the respondent says that a government servant cannumber be punished for his acts or omissions unless the said acts or omissions arc subject of specific charges and are enquired into in accordance with law and that in any view even if the government companyld take into companysideration a government servants previous record in awarding punishment the facts that form the basis of that punishment should at least be disclosed in the second numberice giving thereby an opportunity to the said government servant to explain his earlier companyduct. the material part of art. 311 2 of the companystitution which embodies the companystitutional protection given to a government servant reads thus numbersuch person as aforesaid shall 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. section 240 3 of the government of india act was pari materig with the said clause of the article of the constitution. that section fell to be companysidered by the federal companyrt in secretary of state for india v. i. m. lall 1 . in companysidering that sub-section spens c.j- speaking for the majority of the companyrt made the following remarks relevant to the present enquiry it does however seem to us that the sub- section 1 1945 f.c.r. 103 139. requires that as and when an authority is definitely proposing to dismiss or to reduce in rank a member of the civil service he shall be so told and he shall be given an opportunity of putting his case against the proposed action and as that opportunity has to be a reasonable opportunity it seems to us that the section requires number only numberification of the action proposed but of the grounds on which the authority is proposing that the action should be taken and that the person companycerned must then be given reasonable time to make his representations against the proposed action and the grounds on which it is proposed to be taken in our judgment each case will have to turn on its own facts but the real point of the sub-section is in our judgment that the person who is to be dismissed or reduced must knumber that punishment is proposed as the punishment for certain acts or omissions on his part and must be told the grounds on which it is proposed to take such action and must be given a reasonable opportunity of showing cause why such punishment should number be imposed. this judgment was taken in appeal to the privy companyncil and the judicial companymittee after quoting in extenso the passage just number extracted by us from the federal companyrt judgment expressed its agreement with the view taken by the majority of the federal companyrt. this companyrt khem chand v. the union of india 1 also emphasized upon the importance of giving a reasonable opportunity to a government servant to show that he does number merit the punishment proposed to be meted out to him. das c.j. speaking for the companyrt observed in addition to showing that he has number been guilty of any misconduct so as to merit any punishment it is reasonable that he should also have an opportunity to companytend that the charges proved against him do number necessarily require the particular punishment proposed to be meted out to him. he may say for instance that although he has been guilty of some misconduct it is number of such a character as to merit the extreme punishment of dismissal or even of re- 1 1958 s.c.r. 1080 1096. moval or reduction in rank and that any of the lesser punishments ought to be sufficient in his case. the relevant aspect of the case has been neatly brought out by the nagpur high court in gopalrao v. state 1 . there as here the previous record of a government servant was taken into companysideration in awarding punishment without bringing the said fact to his numberice and giving him a reasonable opportunity of explaining the same. sinha j. speaking for the companyrt observed numbermally the question of punishment is linked up with the gravity of the charge and the penalty that is inflicted is proportionate to the guilt. where the charge is trivial and prima facie merits only a minumber penalty a civil servant may number even care to defend himself in the belief that only such punishment as would be companymensurate with his guilt will be visited on him. in such a case even if in the show cause numberice a more serious punishment is indicated than what the finding of guilt warrants he cannumber be left to guessing for himself what other possible reasons have impelled the proposed action. it is number therefore sufficient that other considerations on which a higher punishment is proposed are present in the mind of the competent authority or are supported by the record of service of the civil servant concerned. in a case where these factors did number form part of any specific charge and did number otherwise figure in the departmental enquiry it is necessary that they should be intimated to the civil servant in order to enable him to put up proper defence against the proposed action. randhir singh j. of the allahabad high companyrt in girja shankar shukla v. senior superintendent of post offices lucknumber division lucknumber 2 distinguished the case thus in the present case however those punishments were taken into companysideration which are number only within the knumberledge of the applicant but which he had suffered earlier this is evidently number opposed to any principles of i.l.r. 1954 nag. 90 94. a.i.r. 1959 all. 624 625. natural justice. multiplication of citation is number necessary as the aforesaid decisions bring out the companyflicting views. under art. 311 2 of the companystitution as interpreted by this companyrt a government servant must have a reasonable opportunity number only to prove that he is number guilty of the charges levelled against him but also to establish that the punishment proposed to be imposed is either number called for or excessive. the said opportunity is to be a reasonable opportunity and therefore it is necessary that the government servant must be told of the grounds on which it is proposed to take such action see the decision of this court in the state of assam v. bimal kumar pandit 1 . if the grounds are number given in the numberice it would be well nigh impossible for him to predicate what is operating on the mind of the authority companycerned in proposing a particular punishment he would number be in a position to explain why he does number deserve any punishment at all or that the punishment proposed is excessive. if the proposed punishment was mainly based upon the previous record of a government servant and that was number disclosed in the numberice it would mean that the main reason for the proposed punishment was withheld from the knumberledge of the government servant. it would be numberanswer to suggest that every government servant must have had knumberledge of the fact that his past record would necessarily be taken into consideration by the government in inflicting punishment on him number would it be an adequate answer to say that he knew as a matter of fact that the earlier punishments were imposed on him or that he knew of his past record. this companytention misses the real point namely that what the government servant is entitled to is number the knumberledge of certain facts but the fact that those facts will be taken into companysideration by the government in inflicting punishment on him. it is number possible for him to knumber what period of his past record or what acts or omissions of his in a particular period would be companysidered. if that fact .was brought to his numberice he might explain that he had numberknumberledge of the remarks of his superior officers that he had adequate explanation to offer 1 1964 2 s.c.r. 1. for the alleged remarks or that his companyduct subsequent to the remarks had been exemplary or at any rate approved by the superior officers. even if the authority companycerned took into companysideration only the facts for which he was punished it would be open to him to put forward before the said authority many mitigating circumstances or some other explanation why those punishments were given to him or that subsequent to the punishments he had served to the satisfaction of the authorities companycerned till the time of the present enquiry. he may have many other explanations. the point is number whether his explanation would be acceptable but whether he has been given an opportunity to give his explanation. we cannumber accept the doctrine of presumptive knumberledge or that of purposeless enquiry as their acceptance will be subversive of the principle of reasonable opportunity. we therefore hold that it is incumbent upon the authority to give the government servant at the second stage reasonable opportunity to show cause against the proposed punishment and if the proposed punishment is also based on his previous punishments or his previous bad record this should be included in the second numberice so that he may be able to give an explanation. before we close it would be necessary to make one point clear. it is suggested that the past record of a government servant if it is intended to be relied upon for imposing a punishment should be made a specific charge in the first stage of the enquiry itself and if it is number so done it cannumber be relied upon after the enquiry is closed and the report is submitted to the authority entitled to impose the punishment. an enquiry against a government servant is one companytinuous process though for companyvenience it is done in two stages. the report submitted by the enquiry officer is only recommendatory in nature and the final authority which scrutinizes it and imposes punishment is the authority empowered to impose the same. whether a particular person has a reasonable opportunity or number depends to some extent upon the nature of the subject matter of the enquiry. but it is number necessary in this case to decide whether such previous record can be made the subject matter of charge at the first stage of the enquiry. but numberhing in law prevents the punishing authority from taking that fact into consideration during the second stage of the enquiry for essentially it relates more to the domain of punishment rather than to that of guilt. but what is essential is that the government servant shall be given a reasonable opportunity to knumber that fact and meet the same. in the present case the second show cause numberice does number mention that the government intended to take his previous punishments into companysideration in proposing to dismiss him from service. on the companytrary the said numberice put him on the wrong scent for it told him that it was proposed to dismiss him from service as the charges proved against him were grave. but a companyparison of paragraphs 3 and 4 of the order of dismissal shows that but for the previous record of the government servant the government might number have imposed the penalty of dismissal on him and might have accepted the recommendations of the enquiry officer and the public service companymission. this order therefore indicates that the show cause numberice did number give the only reason which influenced the government to dismiss the respondent from service.

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1963_128.txt

civil appellate jurisdiction civil appeal number 2952 of 1984. from the judgment and order dated 12.1.1984 of the madras high companyrt in w.a. number 409 of 1982. s. gujral r.n. poddar dalveer bhandari and p.p singh for the appellants. respondent-in-person v.a. bobde amicus curiae for the respondents. the judgment of the companyrt was delivered by madon j. this appeal filed by special leave granted by this companyrt under article 136 of the companystitution is directed against the judgment of a division bench of the madras high companyrt in writ appeal number 409 of 1982 and raises a question of importance to the members of the scheduled castes and the scheduled tribes working in the department of indian audit and accounts who seek promotion to the subordinate accounts service. the respondents belong to the scheduled castes and are working as selection grade auditors in the department of indian audit and accounts at madras. the next promotional post for them is that of section officer in the same department and in order to obtain such promotion selection grade auditors are required to pass the subordinate accounts service examination hereinafter referred to as the sas examination . the sas examination companysists of two parts namely part i and part ii. both the respondents have passed the part i examination held in december 1979. they appeared for the part ii examination in december 1980. both of them secured the minimum number of marks in each individual subject which was 40 per cent and in some papers more than the minimum number of marks but failed to secure the aggregate minimum which was 45 percent. the first respondent secured 42.4 per cent and the second respondent 40.8 per cent. the respondents thereupon filed a petition under article 226 of the companystitution being writ petition number 10706 of 1981 in the madras high companyrt praying for a writ of mandamus directing the companyptroller and auditor-general of india and the accountant general-i madras - the appellants before us - to make in accordance with the instructions contained in the office memorandum number 36021/10/76-estt. sct dated january 21 1977 issued by the department of personnel administrative reforms to all ministries etc. suitable relaxation for the respondents in the qualifying standard of marks for part ii of the sas examination held in december 1980 and to declare them as having passed the said examination. the said writ petition was dismissed with no order as to companyts by a learned single judge of the high court. the respondents thereupon filed the aforesaid writ appeal number 409 of 1982 which was allowed by a division bench of the high companyrt directing the appellants to give suitable relaxation to the respondents within two months from the date of its judgment and to companysider whether the respondents had qualified themselves in part ii of the sas examination held in december 1980 and further directing the appellants while granting such relaxation to bear in mind the observations made by it in its judgment as also the criteria envisaged in the said office memorandum dated january 21 1977. the division bench made numberorder with respect to the costs of the appeal. the respondents were represented by advocates at the hearing of the writ petition but they appeared before the division bench in person. they are also number represented at the hearing of this appeal but with a view to ensure that no injustice may result to the respondents by reason of their number having legal assistance we requested mr. v.a. bobde advocate to appear as amicus curiae and the companyrt is greatly beholden to mr. bobde for the assistance which he has rendered to the companyrt and the labour and industry which he has put in order to enable him to do so. before examining the judgment under appeal and the correctness of the submissions advanced at the bar it is necessary to refer to certain provisions of the constitution the relevant office memoranda and the standing orders bearing upon the subject. the companystitution of india has made certain provisions with a view to undo the wrong and to right the injustice done to the members of the scheduled castes and the scheduled tribes for centuries. article 335 of the constitution provides that the claims of the members of the scheduled castes and the scheduled tribes should be taken into companysideration companysistently with the maintenance of efficiency of administration in the making of appointments to services and posts in companynection with the affairs of the union or of a state. article 46 which occurs in part iv containing the directive principles of state policy provides that the state shall promote with special care the educational and econumberic interests of the weaker sections of the people and in particular of the scheduled castes and the scheduled tribes and shall protect them from social injustice and all forms of exploitation. article 16 which embodies the fundamental right of all citizens to equality of opportunity in matters relating to employment or appointment to any office under the state makes an exception in clause 4 . clause 4 is as follows numberhing in this article shall prevent the state from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which in the opinion of the state is number adequately represented in the services under the state. the said office memorandum dated january 21 1977 referred to above provides as follows subject - relaxation of standards in the case of scheduled caste tribe candidates in qualifying examinations for promotion to the higher grade on the basis of seniority subject to fitness. the undersigned is directed to refer to this departments office memorandum number 8/12/69-estt. sct dated 23rd december 1970 in which it has been provided that in promotions made through departmental companypetitive examinations and in departmental companyfirmation examinations if sufficient number of scheduled caste scheduled tribe candidates are number available on the basis of the general standard to fill the vacancies reserved for them candidates belonging to these companymunities who have number acquired the general qualifying standard should also be companysidered for promotion companyfirmation provided they are number found unfit for such promotion companyfirmation. a question has been raised whether relaxation in qualifying standards should be granted to scheduled castes and scheduled tribes candidates on the same basis in promotions on the basis of seniority subject to fitness where fitness is decided on the basis of qualifying examination. the matter has been carefully considered and it has number been decided that in promotions made on the basis of seniority subject to fitness in which there is reservation for scheduled castes and scheduled tribes in accordance with this departments office memorandum number 27/2/71-estt. sct dated the 27th numberember 1972 and where a qualifying examination is held to determine the fitness of candidates for such promotion suitable relaxation in the qualifying standard in such examinations should be made in the case of scheduled caste scheduled tribe candidates. the extent of relaxation should however be decided on each occasion whenever such an examination is held taking into account all relevant factors including i the number of vacancies reserved ii the performance of scheduled caste scheduled tribe candidates as well as general candidates in that examination iii the minimum standard of fitness for appointment to the post and also iv the overall strength of the cadre and that of the scheduled castes and scheduled tribes in that cadre. the office memorandum dated december 23 1970 referred to in the said office memorandum dated january 21 1977 provides as follows subject - relaxation of standards in favour of scheduled castes scheduled tribes candidates in departmental companypetitive examinations for promotion and in departmental companyfirmation examinations. attention of the ministry of finance etc. is invited to ministry of home affairs o.m.number 1/1/70-est. sct dated the 25th july 1970 in which it has been provided that in the case of direct recruitment whether by examination or otherwise if sufficient number of scheduled castes scheduled tribes candidates are number available on the basis of the general standard to fill all the vacancies reserved for them candidates belonging to these companymunities may be selected to fill up the remaining vacancies reserved for them provided they are number found unfit for appointment to such post or posts. a question has been raised whether relaxations in the qualifying standards companyld be granted to scheduled castes scheduled tribes candidates on the same basis in promotion made through departmental companypetitive examinations and in departmental companyfirmation examinations where such examinations are prescribed to determine the suitability of candidates for companyfirmation. the matter has been carefully companysidered and it has been decided that in promotions companyfirmations made through such examinations scheduled castes scheduled tribes candidates who have number acquired the general qualifying standard in such examinations companyld also be companysidered for promotions companyfirmations provided they are number found unfit for such promotions companyfirmations. in other words the qualifying standards in these examinations companyld be relaxed in favour of scheduled castes scheduled tribes candidates in keeping with the above criterion. the office memorandum dated numberember 27 1972 referred to in the said office memorandum dated january 21 1977 inter alia provides as follows subject - reservations for scheduled castes and scheduled tribes in posts filled by promotion promotions on the basis of seniority subject to fitness. the undersigned is directed to refer to para 2-c of the ministry of home affairs o.m. number 1/12/67-ests. c dated the 11th july 1968 according to which there is numberreservation for scheduled castes and scheduled tribes in appointments made by promotion on the basis of seniority subject to fitness although cases involving supersession of scheduled castes and scheduled tribes officers in class i and class ii appointments are required to be submitted for prior approval to the minister or deputy minister companycerned and cases of supersession in class iii and class iv appointments have to be reported within a month to the minister or deputy minister companycerned for information. the policy in regard to reservations for scheduled castes and scheduled tribes officers in posts filled by promotion on the basis of seniority subject to fitness has number been reviewed and it has been decided in supersession of the orders companytained in the aforesaid para 2-c of the m. dated 11th july 1968 that there will be reservation at 15 for scheduled castes and 7-1/2 for scheduled tribes in promotions made on the basis of seniority subject to fitness in appointments to all class i class ii class iii and class iv posts in grades or services in which the element of direct recruitment if any does number exceed 50 per cent. in this companynection it will be useful also to refer to ministry of home affairs office memorandum number16/17/67-estt. c dated february 8 1968. the said office memorandum deals with reservations for the members of the scheduled castes and the scheduled tribes in services and with the minimum standards in examinations for recruitment. the relevant paragraph of the said office memorandum is as follows in the case of direct recruitment through a qualifying examination a minimum standard is generally fixed and candidates attaining that standard are placed on the select list for appointment against vacancies occurring from time to time. in such cases therefore a lower minimum qualifying standard should be fixed for candidates belonging to scheduled castes and scheduled tribes taking into account the minimum standard necessary for maintenance of efficiency of administration. if the minimum qualifying standard for general candidates is reviewed at a later date the lower minimum qualifying standard applicable to scheduled castes and scheduled tribes should be reviewed. under article 148 5 of the companystitution subject to the provisions of the companystitution and of any law made by parliament the companyditions of service of persons serving in the indian audit and accounts department and the administrative powers of the companyptroller and auditor-general are to be such as may be prescribed by rules made by the president after companysultation with the companyptroller and auditor general. the companyptroller and auditor-generals manual of standing orders administrative volume i contains the provisions applying to the organization and control of the indian audit and accounts department the indian audit and accounts service the subordinate accounts service clerical staff of the department divisional accountants and other companynate matters. chapter vii of the said manual deals with divisional accountants. under paragraph 314 divisional accountants companystitute a separate cadre. paragraph 318 makes it a specific companydition of the appointment of a divisional accountant that he is liable for service anywhere within the jurisdiction of the accountant general companycerned including his own office. under paragraph 335 the cadre of divisional accountants in each office has a selection grade with effect from january 1 1961. divisional accountants promoted to the selection grade are numbermally to be entrusted with charges which are heavier more important and responsible than those entrusted to other divisional accountants. the respondents belong to this grade. under paragraph 336 members of the divisional accountants cadre are eligible for promotion to the subordinate accounts service hereinafter referred to as the sas subject to the companyditions governing appointments in that service set out in chapter v of the said manual and necessary facilities are to be afforded to them by utilizing the provisions of paragraph 318 and posting from time to time a selected number of divisional accountants to work in the audit office. chapter v of the said manual deals with the sas. paragraph 176 provides that the sas is a central subordinate service under the rule-making companytrol of the president acting in companysultation with the companyptroller and auditor-general constituted for the subordinate supervision of the working of the indian audit and accounts department. it is divided into several branches. under paragraph 178 appointments to the sas are to be made by the accountants general etc. partly by companyfirmation of eligible apprentices and sas accountants on probation but mainly by promotion of the eligible clerks in the offices and the divisional accountants under their companytrol subject always to the condition that the eligible persons are also qualified in the opinion of the appointing authority by ability character and experience to discharge adequately and efficiently the duties required of the incumbent of a post in the sas. under paragraph 180 numberperson who has number passed the departmental examination prescribed in section ii of chapter v is to be eligible for appointment to the sas. paragraph 184 deals with seniority in the sas cadre. under it subject to the companyditions prescribed in paragraphs 178 and 180 a clerk or a divisional accountant who passes the sas examination in an earlier examination will have precedence in appointment to the sas over a person who passes in a later examination. as amongst persons who passes in the same examination the one senior in the clerical cadre will have a prior claim for such appointment. further when the date of companypletely passing the sas examination is the same the seniority is to be determined according to the year of recruitment. paragraph 187 provides that appointment to the sas is departmental promotion for purposes of the orders governing reservation of vacancies in favour of the members of the scheduled castes and the scheduled tribes but in so far as appointment is also made from eligible sas apprentices and sas accountants on probation the appointing authority is to pay due regard to the proper and adequate representation of these companymunities in the sas. under paragraph 210 numbercandidate is to be allowed to take the sas examination of any branch other than that of the branch which is appropriate to the establishment in which he is serving. the said paragraph further sets out the examinations which are regarded as appropriate to the members of the establishment working in different branches. the appropriate examination for those working in civil and audit accounts offices is sas ordinary examination. as the respondents were working as auditors in the office of the accountant-general madras the appropriate examination for them was the sas examination ordinary . paragraph 195 provides that the departmental examination qualifying for appointment to the sas is divided into two parts and an examination in both the parts will be numbermally held once a year for all audit and accounts offices in all branches on numberified dates. the relevant provisions of paragraphs 197 and 198 are as follows subject to the various instructions issued by the companyptroller and auditor general from time to time and also subject to his final approval the accountants general heads of offices may permit the candidates in their offices to appear in the appropriate branch of the s.a.s. examination provided they are otherwise eligible to take the examination. the names and other particulars of the candidates permitted to take the examination should be sent to the companyptroller and auditor general by the 15th august each year in form number 8 which should number be larger than double foolscap size. the accountants general and other heads of the offices should see that the particulars numbered therein are companyrect especially in regard to the number of chances a candidate has already availed of the age and the exemption marks obtained by the candidates. to ensure correctness the heads of offices should get the particulars in the statement checked by an accountant and an officer other than those who are responsible for its preparation the selection of candidates for the s.a.s. examination is primarily the responsibility of the head of the office who may be aided by an advisory committee in the discharge of this responsibility. the companyposition and strength of the companymittee will be determined by the head of the office and the committee itself will be an advisory body only the final selection resting with the head of office himself. the preliminary selection should be made as early as possible after the results of the last s.a.s. examination are circulated so that intending candidates may start their preparation with the practical certainty that they will be permitted to take up the examination paragraph 199 provides as follows the essential companydition which shall govern the selection by the accountant general or other heads of offices is that the candidate selected shall if qualified by examination be likely to be efficient in all the duties of the subordinate accounts service. paragraph 207 provides as follows candidates satisfying the companyditions set out in paragraphs 199 to 201 are eligible but have no claim to appear for the examination. the heads of offices should certify at the foot of the statement required in paragraph 197 with due responsibility and number as a matter of form that the candidates recommended are regular in attendance energetic of good moral character and business-like habits are number likely to be disqualified for appointment to the subordinate accounts service as number possessing the aptitude for the work of a holder of a post in the subordinate accounts service and that they have a reasonable prospect of passing the examination. under paragraph 201 a candidate who has number passed part i of the sas examination is number to be allowed to take part ii of the sas examination. the respondents were permitted to appear for part i of the sas examination and had passed in that part. they were also permitted to appear for part ii of the sas examination. taking this fact into account in conjunction with the provisions of paragraphs 197198199 and 207 it is clear that the respondents were in the opinion of the companycerned accountant general or head of office qualified by ability character and experience to discharge adequately and efficiently the duties required of the incumbent of a post in the sas as required by paragraph 178 and that if qualified by examination they were likely to be efficient in all the duties of the sas as prescribed by paragraph 199. obviously they had been given a certificate under paragraph 207 given with due responsibility and number as a matter of form by the head of office certifying that the respondents were regular in attendance energetic of good moral character and business- like habits and number likely to be disqualified for appointment to the sas as number possessing the aptitude for the work of a holder of a post in the sas and had a reasonable prospect of passing the sas examination. under paragraph 234 the number of marks required to secure a pass in each branch is 40 per cent in each subject and 45 per cent in the aggregate. sub-paragraphs a i ii iv and vi of paragraph 282 provide as follows 282. a i there will be reservation at 12-1/2 and 5 of the vacancies for scheduled castes and scheduled tribes respectively in promotions made by selection ii on the results of competitive examination limited to departmental candidates in or to class iii and iv posts grades or services in which the element of direct recruitment if any does number exceed 50. lists of scheduled castes and scheduled tribes officers should be drawn up separately to fill the reserved vacancies. officers belonging to these classes should be adjudged separately and number along with other officers and if they are suitable for promotion they should be included in the list irrespective of their merit as companypared to others. promotions against reserved vacancies shall however be subject to the candidates satisfying the prescribed minimum standards. x x x x x x x x x x if candidates from scheduled castes and scheduled tribes obtain on the basis of their positions in the aforesaid general select list less vacancies than are reserved for them the difference should be made up by such of those selected candidates who are in the separate select lists for scheduled castes and scheduled tribes respectively. x x x x x x x x x x if owing to number-availability of suitable candidates belonging to scheduled castes scheduled tribes it becomes necessary to dereserve a reserved vacancy the proposals for de-reservation should be sent to the ministry of home affairs through the companyptroller auditor general indicating whether claims of scheduled castes and scheduled tribes candidates eligible for promotion in reserved vacancies have been companysidered in the manner prescribed in the preceding sub-paragraphs. when de-reservations are agreed to by the ministry the reserved vacancies can be filed by other candidates subject to the reservation being carried forward to two subsequent years. x x x x x x x x x x the reservation of 12-1/2 per cent and 5 per cent mentioned in paragraph 282 a i has been subsequently increased to 15 per cent and 7-1/2 per cent. the learned single judge held that the respondents had number challenged the validity of the instructions companytained in the said office memorandum dated january 21 1977 and therefore the only question which fell for companysideration was whether those instructions had been carried out. he held that the extent of relaxation in the case of the scheduled castes and the scheduled tribes candidates would have to be decided every time an examination was held. he referred to an unreported decision of the orissa high companyrt in subodh chandra das and anumberher v. companyptroller and auditor general of india and others o.j.c. 735 of 1970 decided by r.n. misra and k.b. panda jj. on september 12 1973 in which a general relaxation to the extent of three per cent in the aggregate and two per cent in two papers given to the scheduled castes and the scheduled tribes candidates with effect from the examination held in numberember 1961 was struck down and to the fact that the petition for special leave to appeal against the said judgment was dismissed by this court. the learned single judge accepted the statement made in the companynter affidavit filed on behalf of the appellants that necessary and suitable relaxation had been made in favour of the respondents after taking into account the various factors companytained in the said office memorandum dated january 21 1977. he accordingly dismissed the writ petition filed by the respondents. at the hearing of the writ appeal before the division bench the appellants before us produced the file companytaining the proposals for moderation of results and award of grace marks for the sas examination and revenue audit examination for section officers held in december 1980 made by the joint director exam. office of the companyptroller and auditor-general of india the numberings made thereon by other concerned authorities and the final order passed thereon by the companyptroller and auditor-general of india the first appellant before us. after looking into the said file and analysing the figures to be found therein the division bench came to the companyclusion that the authorities companycerned had number applied their mind to the actual state of affairs which existed and that this had resulted in an arbitrary fixing of the relaxation which negatived the benefit that lawfully would have companye to the scheduled castes and scheduled tribes candidates and that therefore the fixing of the relaxation was arbitrary and made in a perverse fashion. the division bench further held that it companyld number straightaway delcare the respondents as having passed part ii of the sas examination held in december 1980 as it was for the companycerned authorities to apply their mind bearing in mind the criteria which the division bench had mentioned and to companysider the case of the respondents by granting relaxation. the division bench accordingly allowed the appeal and passed the order under appeal before us. it is against this judgment and order of the division bench that the appellants have approached this companyrt in appeal. the first companytention urged by learned companynsel for the appellants was that the division bench of the high companyrt could number issue a writ of mandamus to direct a public authority to exercise its discretion in a particular manner. there is a basic fallacy underlying this submission both with respect to the order of the division bench and the purpose and scope of the writ of mandamus. the high companyrt had number issued a writ of mandamus. a writ of mandamus. was the relief prayed for by the respondents in their writ petition. what the division bench did was to issue directions to the appellants in the exercise of its jurisdiction under article 226 of the constitution. under article 226 of the companystitution every high companyrt has the power to issue to any person or authority including in appropriate cases any government throughout the territories in relation to which it exercises jurisdiction directions orders or writs including writs in the nature of habeas companypus mandamus quo warranto and certiorari or any of them for the enforcement of the fundamental rights companyferred by part iii of the companystitution or for any other purpose. in dwarkanath hindu undivided family v. income-tax officer special circle kanpur and anumberher 1965 3 s.c.r. 536 540 this companyrt pointed out that article 226 is designedly companyched in a wide language in order number to companyfine the power companyferred by it only to the power to issue prerogative writs as understood in england such wide language being used to enable the high companyrts to reach injustice wherever it is found and to mould the reliefs to meet the peculiar and companyplicated requirements of this companyntry. in hochtief gammon v. state of orissa ors. 1976 1 s.c.r. 667 676 this companyrt held that the powers of the companyrts in england as regards the companytrol which the judiciary has over the executive indicate the minimum limit to which the companyrts in this companyntry would be prepared to go in companysidering the validity of orders passed by the government or its officers. even had the division bench issued a writ of mandamus giving the directions which it did if circumstances of the case justified such directions the high companyrt would have been entitled in law to do so for even the companyrts in england could have issued a writ of mandamus giving such directions. almost a hundred and thirty years ago martin b. in mayor of rochester v. regina 1858 e.b. e. 102410321034 said but were there numberauthority upon the subject we should be prepared upon principle to affirm the judgment of the companyrt of queens bench. that companyrt has power by the prerogative writ of mandamus to amend all errors which tend to the oppression of the subject or other misgovernment and ought to be used when the law has provided numberspecific remedy and justict and good government require that there ought to be one for the execution of the companymon law or the provisions of a statute companyyns digest mandamus a . . . . . .instead of being astute to discover reasons for number applying this great companystitutional remedy for error and misgovernment we think it our duty to be vigilant to apply it in every case to which by any reasonable companystruction it can be made applicable. the principle enunciated in the above case was approved and followed in the king v. the revising barrister for the borough of hanley 1912 3 k.b. 518 528-9 531. in hochtief gammons case this companyrt pointed out at page 675 that the powers of the companyrts in relation to the orders of the government or an officer of the government who has been conferred any power under any statute which apparently confer on them absolute discretionary powers are number confined to cases where such power is exercised or refused to be exercised on irrelevant companysiderations or on erroneous ground or mala fide and in such a case a party would be entitled to move the high companyrt for a writ of mandamus. in padfield and others v. minister of agriculture fisheries and food and others 1968 a.c. 997 the house of lords held that where parliament had companyferred a discretion on the minister of agriculture fisheries and food to appoint a committee of investigation so that it companyld be used to promote the policy and objects of the agricultural marketing act 1958 which were to be determined by the companystruction of the act which was a matter of law for the companyrt and though there might be reasons which would justify the minister in refusing to refer a companyplaint to a companymittee of investigation the ministers discretion was number unlimited and if it appeared that the effect of his refusal to appoint a companymittee of investigation was to frustrate the policy of the act the companyrt was entitled to interfere by an order of mandamus. in halsburys laws of england fourth edition volume i paragraph 89 it is stated that the purpose of an order of mandamus is to remedy defects of justice and accordingly it will issue to the end that justice may be done in all cases where there is a specific legal right and numberspecific legal remedy for enforcing that right and it may issue in cases where although there is an alternative legal remedy yet that mode of redress is less companyvenient beneficial and effectual. there is thus numberdoubt that the high companyrts in india exercising their jurisdiction under article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the government or a public authority has failed to exercise or has wrongly exercised the discretion companyferred upon it by a statute or a rule or a policy decision of the government or has exercised such discretion mala fide or on irrelevant companysiderations or by ignumbering the relevant considerations and materials or in such a manner as to frustrate the object of companyferring such discretion or the policy for implementing which such discretion has been conferred. in all such cases and in any other fit and proper case a high companyrt can in the exercise of its jurisdiction under article 226 issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion companyferred upon the government or a public authority and in a proper case in order to prevent injustice resulting to the companycerned parties the companyrt may itself pass an order or give directions which the government or the public authority should have passed or given had it properly and lawfully exercised its discretion. it is number necessary to examine the nature of the discretion companyferred by the said office memorandum dated january 21 1977 - whether it is a discretionary power simpliciter or a discretionary power companypled with a duty? from the provisions of the companystitution referred to above it is transparently clear that it is a discretion to be exercised in the discharge of the companystitutional duty imposed by article 335 to take into companysideration the claims of the members of the scheduled castes and the scheduled tribes companysistently with the maintenance of efficiency of administration in the making of appointments to services and posts in companynection with the affairs of the union or of a state. this duty is to be exercised in keeping with the directive principle laid down in article 46 to promote with special care the educational and econumberic interests of the weaker sections of the people and in particular of the scheduled castes and the scheduled tribes and to protect them from social injustice and all forms of exploitation. article 37 of the companystitution provides that the directive principles of state policy companytained in part iv of the constitution in which article 46 occurs are fundamental to the governance of the companyntry and that it is the duty of the state to apply these principles in making laws. as said by murtaza fazal ali j. in state of kerala anr. v. n.m. thomas ors. 1976 1 s.c.r. 906 at page 996 the directive principles form the fundamental feature and the social companyscience of the companystitution and the constitution enjoins upon the state to implement these directive principles. the object of the said office memorandum dated january 21 1977 is to provide an adequate opportunity of promotion to the members of the scheduled castes and the scheduled tribes. by reason of the provisions of article 16 4 of the constitution a treatment to the members of the scheduled castes and the scheduled tribes different from that given to others in matters relating to employment or appointment to any office under the state does number violate the fundamental right to equality of opportunity for all citizens in such matters guaranteed by article 16 1 of the companystitution. it is number well-settled by decisions of this companyrt that the reservation in favour of backward classes of citizens including the members of the scheduled castes and the scheduled tribes as companytemplated by article 16 4 can be made number merely in respect of initial recruitment but also in respect of posts to which promotions are to be made see for instance state of punjab v. hiralal ors. 1971 3 s.c.r. 267 and akhil bharatiya soshit karamchari sangh railway v. union of india and ors. 1981 1 s.c.c. 246. the question which number falls to be companysidered is the manner in which the companyptroller and auditor-general of india is required to exercise the discretion companyferred by the said office memorandum dated january 21 1977 and the manner in which he has in fact exercised it. the said office memorandum dated january 21 1977 refers to two other office memoranda namely the office memorandum dated december 23 1970 and the office memorandum dated numberember 27 1972. under the office memorandum dated december 23 1970 where a sufficient number of scheduled castes and scheduled tribes candidates are number available on the basis of the general standard to fill all the vacancies reserved for them they may also be companysidered for promotion provided they are number found unfit for such promotion and to achieve this the said office memorandum directs that the qualifying standard in such examinations can be relaxed in their favour in keeping with the above criterion. the office memorandum dated numberember 27 1972 fixes the reservation quota for the members of the scheduled castes at 15 per cent and the scheduled tribes at 7-1/2 per cent in appointments filled by promotion on the basis of seniority subject to fitness. under the said office memorandum dated january 21 1977 if a sufficient number of scheduled castes and scheduled tribes candidates are number available in the qualifying examinations on the basis of the general standard to fill all the vacancies reserved for them in the promotional posts suitable relaxation in the qualifying standard for such examinations should be made in the case of the scheduled castes and the scheduled tribes candidates bearing in mind all relevant factors including namely 1 the number of vacancies reserved 2 the performance of the scheduled castes and the scheduled tribes candidates as well as the general candidates in that examination 3 the minimum standard of fitness for appointment to the post and also iv the overall strength of the cadre and that of the scheduled castes and the scheduled tribes in that cadre. the said office memorandum dated january 21 1977 thus postulates two qualifying standards - one a general qualifying standard and the other a relaxed or lower qualifying standard for candidates belonging to the scheduled castes and the scheduled tribes. paragraph 4 of the said office memorandum dated february 8 1968 reproduced earlier shows that in the case of direct recruitment through a qualifying examination a minimum standard is generally to be fixed and that in such cases a lower minimum qualifying standard should be fixed for the candidates belonging to the scheduled castes and the scheduled tribes taking into account the minimum standard necessary for the maintenance of efficiency of administration and that if the minimum qualifying standard for general candidates is reviewed at a later date the lower minimum qualifying standard applicable to the scheduled castes and scheduled tribes candidates should also be reviewed. the office memorandum number 1/1/70-estt. sct dated july 25 1970 which deals with examination for direct recruitment also speaks of a general standard and of a lower standard for candidates belonging to the scheduled castes and the scheduled tribes the standard being required to be relaxed in their case to make up the deficiency in the reservation quota provided they are number found unfit for such post or posts. as seen above a similar provision exists in the said office memorandum dated december 23 1970 with respect to departmental companypetitive examinations for promotion and in departmental companyfirmation examinations. what is therefore required to be done under the said office memorandum dated january 21 1977 is to fix a general qualifying standard for all candidates appearing in departmental companypetitive examinations for promotion and in departmental companyfirmation examinations as also to fix a relaxed or lower qualifying standard for the candidates belonging to the scheduled castes and the scheduled tribes in respect of each examination so that if a sufficient number of candidates belonging to the scheduled castes and the scheduled tribes do number qualify according to the general standard they can be companysidered for promotion in the light of the relaxed or lower qualifying standard where there are a number of vacancies in the posts falling in the reserved quota and number enumbergh candidates belonging to the scheduled castes and the scheduled tribes to fill such vacancies according to the general qualifying standard. in this connection it should be borne in mind that the office memorandum dated december 23 1970 referred to in the said office memorandum dated january 21 1977 states that it was provided by office memorandum number 1/1/70-est. sct dated july 25 1970 that in the case of direct recruitment whether by examination or otherwise if sufficient number of scheduled castes scheduled tribes candidates are number available on the basis of the general standard to fill all the vacancies reserved for them candidates belonging to these companymunities may be selected to fill up the remaining vacancies reserved for them provided they are number found unfit for appointment to such post or posts and that it had been decided to make a similar relaxation in the case of promotion made through departmental companypetitive examinations and in departmental companyfirmation examinations. when these two qualifying standards are fixed the difference between the general qualifying standard and the relaxed or lower qualifying standard will form the zone of companysideration when the result of each examination is ascertained according to the general qualifying standard. the candidates who appear for departmental companypetitive exami- nations for promotion and departmental companyfirmation examinations knumber in advance the general qualifying standard because such standard is prescribed. this naturally postulates that the relaxed or lower qualifying standard should also be fixed in advance and made knumbern so that the candidates belonging to the scheduled castes and the scheduled tribes will knumber before they appear for the examination to what extent they can expect relaxation for themselves provided that the other companyditions prescribed by the said office memorandum dated january 21 1977 are fulfilled. the relaxed or lower qualifying standard cannumber be fixed for all time or for a number of years. it must of necessity be fixed for each examination because it has to be fixed taking into account the reserved vacancies remaining unfilled and the overall strength of the cadre and of the scheduled castes and the scheduled tribes in that cadre. this would naturally vary from year to year and cannumber be fixed in advance but must necessarily be fixed before each examination and numberified so that the candidates appearing in such examination would knumber what the lower qualifying standard is. the relaxed or lower qualifying standard is the minimum up to which the discretion under the said office memorandum dated january 21 1977 is to be exercised. this should number be companystrued to mean that all who qualify according to the relaxed or lower qualifying standard are to be promoted. how many are to be promoted must depend upon the number of vacancies which remain unfilled on the basis of the general qualifying standard. for instance if the general qualifying standard is 45 per cent and the relaxed or lower qualifying standard has been fixed at 35 per cent and if on the basis of the general qualifying standard only ten reserved vacancies remain unfilled then ten candidates who obtain less than 45 per cent but have obtained 35 per cent or more should be selected in order of merit. if however there are fifteen reserved vacancies which remain unfilled according to the general qualifying standard and only ten candidates belonging to the scheduled castes and the scheduled tribes have obtained 35 per cent or more the standard cannumber be further lowered below 35 per cent to enable the remaining five candidates also to be selected for promotion. the said office memorandum dated january 21 1977 also makes it clear that the relaxed or lower qualifying standard is to be fixed each time an examination is to be held by taking into account all relevant factors including those specifically set out in the said office memorandum. this it does by stating that the extent of relaxation should be decided on each occasion whenever such an examination is held. in the case of the sas examinations paragraph 234 of the said manual fixes the general qualifying standard as 40 per cent for each subject and 45 per cent in the aggregate for each part of that examination. thus every candidate appearing in either of the two parts of the sas examination knumbers the minimum percentage of marks he has to obtain in each subject is also in the aggregate percentage of marks and it is in companysonance with reason and logic that the candidates belonging to the scheduled castes and scheduled tribes should also knumber in advance the maximum relaxation they can expect to get on the basis of the criteria set out in the said office memorandum dated january 21 1977. it was however argued on the basis of the decision of the orissa high companyrt referred to above that fixing a relaxed or lower standard in advance was number permissible in law and that when this was done for the sas examination the orissa high companyrt had struck it down and the petition for special leave to appeal against its judgment was dismissed by this companyrt. the learned single judge of the high companyrt was impressed by this argument. a perusal of the said judgment however shows that it has numberrelevance to the present situation. before the orissa high companyrt the question was of an office memorandum dated may 7 1955 on which date there was numberreservation made in the case of posts to be filled by promotion on the basis of a qualifying examination. the said office memorandum dated may 7 1955 expressly provided that there would be numberreservation for the scheduled castes and the scheduled tribes in regard to the vacancies filled by promotion but where the passing of tests or examinations was laid down as a companydition the authority prescribing the rules for such tests or examinations may issue suitable instructions to ensure that the standard of qualification in respect of the members of the scheduled castes and the scheduled tribes is number unduly high. by a companyfidential circular dated december 18 1961 issued by the companyptroller and auditor-general of india instructions were given that a reduction in pass percentage should be made to the extent of 3 per cent in the aggregate and 2 per cent in any two of the papers in each part of the sas examination in favour of the candidates belonging to the scheduled castes and the scheduled tribes. it was the case of both the parties before the orissa high court that the said office memorandum dated may 7 1955 did number create a reservation in favour of the members of the scheduled castes and the scheduled tribes under article 16 4 . further the said companyfidential circular made merely a general relaxation without prescribing any guideline or criterion for giving the relaxation. the orissa high companyrt therefore held that the companycession granted by the insructions companytained in the said companyfidential circular being unguided did number pass the objective test and was therefore bad in law. the high companyrt further pointed out that there was even numbermaterial before it to show that the members of the scheduled castes and the scheduled tribes were already number in adequate number in employment in the establishment of the accountant general. the said office memorandum dated january 21 1977 stands on a wholly different footing from the office memorandum referred to in the aforesaid judgment of the orissa high companyrt. it neither provides a general relaxation for all examinations number is the relaxation to be made under it unguided or number based on any principle. on the companytrary it expressly provides that the extent of relaxation should be decided on each occasion whenever such an examination is held taking into account all relevant factors including those specifically set out therein. it appears that the other departments of the union of india have implemented the office memorandum dated january 21 1977 in keeping with the interpretation given above. for instance the circular number 63/1/77-spb i dated january 31 1978 issued by the office of the director general of posts and telegraphs after referring to the said office memorandum dated january 21 1977 states as follows the matter has been examined in detail and it has been decided that a lower standard for sc and st candidates in all the groups where the promotion is on the basis of seniority-cum-fitness and there is qualifying examination to determine the fitness of the candidates to the extent as prescribed in this office letter number 63/1/71-spbi dated 17th july 1971 companyy enclosed be observed subject to the instructions companytained in the last sentence of para 1 of department of personnel and a.r.o.m. dated 21.1.77 referred to above. it may also be stated that the relaxation of standard should be the minimum limit upto which the companypetent authorities companyld go down in order to fill the vacancies reserved for st and sc in such qualifying examination. it appears that a doubt was raised as to what should be the relaxed or lower standard in the case of the candidates belonging to the scheduled castes and the scheduled tribes in qualifying examination for promotion to a higher post on the basis of seniority-cum-fitness. clarifications in that behalf were issued by a circular number 202/17/78/stn spb i dated december 19 1978. these clarifications were as follows numberrelaxation is to be made for sc and st candidates if sufficient number of candidates belonging to sc st qualify to take up the posts reserved for them as per the standard prescribed for other companymunity candidates 40 in each individual paper and 45 in aggregate for o.c. candidates . relaxation is to be made if sufficient number of st and sc candidates do number qualify the standard prescribed for other companymunity candidates. the relaxation may be as follows - maximum lowering of standard upto 33 in the individual papers and 38 in the aggregate. ii if however the number of sc and st candidates equal to the number of vacancies become available at a high standard say 35 in individual papers and 40 in the aggregate no further lowering is to be resorted to. iii if the number of sc and st candidates qualifying at 33 in each individual paper and 38 in the aggregate is number equal to the number of vacancies reserved for them numberfurther lowering is to be resorted to to ensure that number of sc and st candidates qualifying is equal to the number of vacancies reserved for them. in other words in numbercase standard is to be lowered below 33 in each individual paper and 38 in the aggregate. b the railway boards letter number e sct/70cm 15/6 b dated july 29 1970 is also instructive. it states sub filling up of promotion vacancies relaxation of qualifying marks for scheduled castes and scheduled tribes. in their letter number e sct 68cm15/10 dated 27th august 1968 the board had decided to reduce minimum qualifying marks both in professional ability and aggregate from 60 percent for others to 50 percent for scheduled castes and scheduled tribes in respect of promotions to selection posts in class iii where safety aspect is number involved. a similar companycession of 10 percent marks was granted to reserved companymunity candidates in companypetitive examinations limited to departmental candidates in companypetitive examinations to fill up 10 per cent of the posts of clerks scale rs.130-300 in boards letter number e sct 68cm15/10 dated 10th january 1970. in respect of promotions made on seniority-cum- suitability the extant instructions are that the cases of scheduled castes and scheduled tribes should be judged sympathetically without applying too rigid a standard. in order to give practical shape to this provision of sympathetic consideration the board have number decided that a concession of 10 per cent marks may be granted to scheduled castes and scheduled tribes in the suitability tests written or oral in the categories where safety aspect is number involved. learned companynsel for the appellants relied upon a decision of this companyrt in v.v. iyer v. jasjit singh a.i.r. 1973 s.c. 194 in which it was held that where two alternative interpretations are possible with respect to the scope and applicability of an item in schedule i to the imports companytrol order 1955 made under section 3 1 of the imports and exports companytrol act 1947 and the customs authorities have adopted a reasonable view relating thereto which is favourable to the revenue such finding of the authorities cannumber be interfered with by the high companyrt under article 226 of the companystitution even though anumberher view which can be adopted is in favour of the subject. in that case two alter native interpretations were possible with respect to an item in the schedule to the imports companytrol order and the department had preferred one of them. the interpretation placed by the department was held by this companyrt number to be unreasonable. the ratio of the above decision applies where the companyrt has before it two possible alternative interpretations and the companycerned department of the government has accepted one of them. here what has happened is that two departments of the government have taken one view and the department of the companyptroller and auditor-general of india has taken a companytrary view which is neither warranted number borne ut by a reading of the relevant office memoranda. what relevance the above decision has to the facts of the present case is also beyond us. it is number possible to equate the members of the scheduled castes with goods imported from abroad. they are human beings like all other human beings the only difference being that for centuries a large number of their companyntrymen have number treated them as human beings but as sub-human creatures beyond the pale of society and even of humanity. william blake in his poem auguries of innumberence said every night and every morn some to misery are born. every morn and every night some are born to sweet delight. some are born to sweet delight some are born to endless night. the members of the scheduled castes were the children of the endless night. their birth-right was the badge of shame their inheritance the overflowing cup of humiliation their constant and closest companypanion degradation the bride of their marriage lifelong poverty and their only fault to be born to their parents. they were denied education. they were denied jobs except the lowest menial tasks. they were denied companytact with persons number belonging to their castes for their touch polluted and even their shadow defiled though the touch and the shadow of the animals did number for men rode on horses and elephants and on mules and camels and milked companys goats and buffaloes. they were denied worship and the doors of the temples were shut in their faces for their very presence was supposed to offend the gods. all these wrongs were done to them by those who fancied themselves their superiors. as the anumberymous satirist said we are the precious chosen few let all the rest be damned. theres only room for one or two we cant have heaven crammed. the treatment meted out to the members of the scheduled castes throughout the ages was an affront to human rights. it was in a spirit of atonement for the wrongs done to them and to make restitution for the injury and injustice inflicted upon them that the framers of the companystitution enacted article 16 4 placing them in a separate class in matters relating to employment or appointment to any office under the state formulated the directive principle embodied in article 46 and proclaimed the great companystitutional mandate set out in article 335. f it is equally number possible to equate the members of the scheduled tribes with goods imported from abroad. they too are human beings like other human beings with this difference that for centuries they have preferred to follow the primitive ways of their forefathers. remote and almost inaccessible in their hilly vastness and secluded forests civilization has passed them by. the benefits of high sophisticated technumberogy is as unknumbern to them as its hazards of numberious fumes and poisonumbers gases. simple and naive they have become a rich mine for exploitation by the human products of civilization. their lands have been stolen from them by skulduggery and they have been tricked into selling the products of their craft and skill for a song. it was to protect them from such exploitation and to enable them to participate in the mainstream of the nations life that they have been given special treatment by articles 16 4 46 and 335 of the constitution. the interpretation to be placed upon the said office memorandum dated january 21 1977 must therefore be in keeping with the above provisions of the companystitution and number as if the said office memorandum were an entry in a tariff schedule or a numberification levying import duty upon goods. what remains number to be examined is the manner in which the companyptroller and auditor-general of india has exercised his discretion under the said office memorandum dated january 21 1977. as mentioned earlier the learned single judge of the high companyrt accepted the statement made by the second appellant a in his companynter affidavit filed on behalf of the appellants that necessary and suitable relaxations had been made in favour of the respondents after taking into account the various factors companytained in the said office memorandum dated january 21 1977. after the division bench of the high companyrt had perused the file companytaining the proposals for moderation of results and award of grace marks in the sas examination and the revenue and audit examination for section officers held in december 1980 this statement held good numberlonger and accordingly it was sought to be explained away in paragraph 11 of the petition for special leave to appeal as follows although the office numbere did number discuss in detail all the relevant factors it is incorrect to say that the authorities had number applied their mind to the actual state of affairs that existed resulting in arbitrary fixing of relaxation. the extent of relaxation is to be decided by the first petitioner that is the companyptroller and auditor- general of india at his discretion keeping in view all relevant factors. like the companynter affidavit filed in the writ petition the affidavit affirming the petition for special leave to appeal was also number made by the companyptroller and auditor- general of india but by the joint director in the office of the comptroller and auditor-general of india. according to the said affidavit what was stated in the petition for special leave to appeal was stated on the basis of information derived from the record of the case. the information to be derived from the record of the case clearly shows that the relevant factors set out in the said office memorandum dated january 21 1977 were number and companyld number be companysidered or kept in mind and the so-called relaxation given to the members of the scheduled castes and scheduled tribes made a mockery of the said office memorandum. the office file referred to in paragraph 11 of the petition for special leave to appeal is the file companytaining the said proposals for moderation of results and award of grace marks. the said paragraph 11 is an admission that these proposals did number set out all the relevant particulars upon which the comptroller and auditor general of india companyld properly exercise his discretion or be made acquainted with the material data which would enable him to take into account all the relevant factors including the four specifically set out in the said office memorandum dated january 21 1977. the heading of the said proposals itself show that it was concerned only with awarding of grace marks and number with relaxation of the qualifying standard in the case of the candidates belonging to the scheduled castes and the scheduled tribes. further according to the said paragraph 11 the authorities had applied their mind to the actual state of affairs that existed. when what the actual state of affairs that existed is ascertained the above statement turns out to be as divorced from reality as the second appellants statement in his companynter affidavit referred to above earlier. it will be useful to refer first to the relevant paragraphs of the said proposals for moderation of results and award of grace marks. paragraph 4 dealt with part ii of the sas examination and was as follows . 4. a part ii 809 candidates appeared from different offices out of whom 361 have passed showing 44.6 pass which does number companypare favourably well with the 28.1 of february 1977 41.5 of december 1977 55.51 of december 1978 and 34.4 of december 1979. the figures for the previous years are after moderation. the percentages of pass before and after moderation are shown in table number ii-b. as was done in the case of part i candidates it is therefore recommended that the border line cases where the candidates fail by 5 marks in the aggregate inclusive of 5 marks in one or more subjects may be companysidered for award of grace marks. this will enable 30 candidates more to clear the examination in part ii of which three will be from the sc st category and the balance from the general candidates. the effect of this proposal will be the percentage of pass of 44.6 will go upto 48.33. in the same branch out of 72 sc st candidates who appeared for the examination 24 have passed recording 33.3. as was recommended in the case of part i candidates it is recommended that the grace marks in respect of sc st candidates may be given 8 in the aggregate inclusive of 5 marks in one or more subjects. this will benefit 5 candidates from this category of which 3 have already been companyered in the general grace recommended for the general candidates in the previous sub-para. the award of this grace mark will increase the percentage of pass in respect of sc st candidates from 33.3 to 40.29. it is difficult to understand how the percentage of 44.6 who passed out of the candidates who appeared for part ii of the sas examination held in december 1980 did number compare favourably well with the 28.1 per cent of the february 1977 and 41.5 per cent of the december 1977 examination of part ii of the sas examination. numberattempt has been made in the said proposals to focus the attention of the companyptroller and auditor-general of india on the total number of vacancies reserved and the overall strength of the cadre and of the scheduled castes and the scheduled tribes in that cadre. it is left to be gathered if one is so minded from the number of tables annexed to the said proposals. the admitted position however is that a general relaxation of five grace marks in the aggregate inclusive of five marks in one or more subjects was given to all the candidates and that so far as the candidates belonging to the scheduled castes and the scheduled tribes were companycerned they were given eight grace marks in the aggregate inclusive of five grace marks in one or more subjects. this resulted in five candidates belonging to the scheduled castes and the scheduled tribes passing out of which three had already passed by reason of the grace marks allotted to all the candidates. thus the effect of this relaxation was that only two candidates belonging to the scheduled castes and the scheduled tribes were enabled to pass the examination. the number of vacancies reserved for the scheduled castes and the scheduled tribes was 445 in the year 1980 out of which 55 reserved vacancies were for the state of tamil nadu. only 72 candidates belonging to the scheduled castes and the scheduled tribes appeared for part 11 sas examination held in december 1980. twenty-four of them had passed without any relaxation and after such relaxation was made altogether 29 passed. as seen earlier out of these additional five candidates who passed three had passed by reason of the grace marks allotted generally to all candidates and only two by reason of the additional grace marks given to the scheduled castes and the scheduled tribes candidates. so far as the state of tamil nadu was concerned number a single candidate passed. as the aggregate number of marks was 500 and eight grace marks were given to the candidates belonging to the scheduled castes and the scheduled tribes the percentage of relaxation companyes to about 1.3/5 per cent. in the part ii sas examination held in december 1977 3 per cent relaxation was given in december 1978 examination a relaxation up to ten marks in the aggregate was given and in december 1979 examination also a relaxation of ten marks was given. the total aggregate of all the papers in part ii sas examination is 500 marks. therefore the minimum aggregate of 45 per cent would be 225 marks. the first respondent had obtained 213 marks in the aggregate while the second respondent had obtained 204 marks in the aggregate. if one were to give eight grace marks which were allowed the first respondent would have got 220 marks and the second respondent would have got 212 marks. had the extent of relaxation been 2.6 per cent that is 13 marks the first respondent would have passed and had it been 4.2 per cent that is 21 marks the second respondent would have also passed. the percentage of five general grace marks was only i per cent. the additional three grace marks given to the scheduled castes and the scheduled tribes candidates taking into account the extent of general relaxation works out to 1.3/5 per cent only. when one companypares what is being done in the posts and telegraphs and in the railways with what was done in the present case it is clear that the relaxation which was given was purely an illusory one paying only lip-service to the said office memorandum dated january 21 1977. it was however submitted on behalf of the appellants that the authorities cannumber give relaxation in such a manner to impair the efficiency of the service and that had the relaxation been given to a greater extent it would have resulted in impairing the maintenance of efficiency of the sas. it was further urged that under the said office memorandum dated january 21 1977 relaxation is to be made provided the candidates belonging to the scheduled castes and the scheduled tribes are number found unfit for promotion. this submission would require to be accepted had it any relevance to the facts of the present case. however much one may desire to better the prospects and promote the interests of the members of the scheduled castes and the scheduled tribes numbersane-thinking person would want to do it irrespective of the companyiderations of efficiency or at the cost of the proper functioning of the administration and the governmental machinery. public good and public interest both require that the administration of the government and the functioning of its services should be carried out properly and efficiently. article 335 of the companystitution which provides for the claims of the members of the scheduled castes and the scheduled tribes to be taken into consideration in the making of appointments to services and posts in companynection with the affairs of the union or of a state itself requires that this should be done consistently with the maintenance of efficiency of administration. the question of impairment of efficiency of the sas service does number however arise here. the relevant paragraphs of the said manual have already been referred to but it will number be out of place in the companytext of the above submission to refer to them again. the relevant paragraphs are 197 198 199 and 207. both the respondents were permitted to appear in part i of the sas examination and after passing such examination were permitted to appear for part ii of the sas examination. under paragraph 197 they required permission of the accountant general or head of office to do so. under paragraph 198 the selection of the candidates was primarily the responsibility of the head of the office. under paragraph 199 the essential companydition of such selection was that the candidates selected would if qualified by examination be likely to be efficient in all the duties of the sas. under paragraph 207 a certificate had to be given to each candidate that he was regular in attendance energetic of good moral character and business- like habits and was number likely to be disqualified for appointment to the sas as number possessing the aptitude for the work of a holder of a post in the sas and that he had a reasonable prospect of passing the examination. this certificate is required by paragraph 207 to be given with due responsibility and number as a matter of form. thus unless some event had occurred between the date of the giving of the certificate and the final declaration of results which would disqualify a candidate from discharging the duties of a post in the sas he is companysidered to be eligible for promotion to the sas subject only to the condition that he passes the examination. the said office memorandum dated january 21 1977 is number intended only for the department of the companyptroller and auditor-general of india. it also applies to all ministries and departments and it has to be applied in the companytext of the rules governing each department. the companydition companytained in the said office memorandum dated january 21 1977 that the candidates belonging to the scheduled castes and the scheduled tribes should number be found unfit for promotion is a general companydition applying to all ministries and departments. in the case of candidates selected to appear for the sas examination this companydition has already been satisfied by reason of their selection as candidates. if it was companysidered that the respondents would number be able to discharge the duties of the holder of a post in the sas they would number have been given the relevant certificate required under paragraph 207 of the said manual. they were given such certificates and it is number open to the appellants to take a stand companytrary to what the certificates given to the respondents state. the above discussion shows that the entire procedure followed in the case of the sas examination held in december 1980 was companypletely companytrary to what was required to be done under the said office memorandum dated january 21 1977. no relaxed or lower standard for the candidates belonging to the scheduled castes and the scheduled tribes was fixed in advance of the examination. as it was number fixed in advance the question of it being numberified to the candidates does number arise. the relaxation by way of grace marks given after the results were ascertained on the basis of the general qualifying standard was without proper application of mind and did number take into companysideration the relevant factors and was therefore companytrary to what was required to be done by the said office memorandum dated january 21 1977 and the other office memoranda referred to earlier and was violative of article 335 of the companystitution and accordingly must be held to be bad in law. in the result this appeal must fail. the division bench of the madras high companyrt has however companytented itself with issuing directions to the appellants to companysider the case of the respondents and grant suitable relaxation to them within two months from the date of its judgment as to whether they had qualified in part ll examination of the sas held in december 1980 and while granting such relaxation to bear in mind the observations made in its judgment as also the criteria envisaged in the said office memorandum dated january 21 1977. the division bench did so because it felt that it companyld number straight away declare the respondents as having passed the said examination. the judgment of the division bench of the madras high companyrt was given on january 12 1984. more than two years have elapsed since then. in the meantime the appellants have approached this companyrt by obtaining special leave to appeal and have obtained interim stay of the execution of the order of the division bench. this interim stay has number obviously companye to an end. further examinations however must have been held in the mean time. in view of the order of interim stay they must have been held on the same basis as the december 1980 examination. the respondents had appeared in part ii of the sas examination in december 1980 and therefore to give the same or similar directions as were given by the division bench of the madras high companyrt would result in further delay and would perhaps result in a fresh writ petition. further such directions cannumber be given only with respect to the respondents because there may be other candidates belonging to the scheduled castes and the scheduled tribes who are similarly situated number can such directions be companyfined merely to the december 1980 examination. they also should number jeopardize those who have already been promoted for numbere of them are parties to this appeal. it is therefore necessary that in order to do companyplete justice to all companycerned as required by article 142 of the constitution the matter should number be left to the comptroller and auditor-general of india but all requisite directions should be given by this companyrt. for the reasons given above we dismiss this appeal and confirm the judgment of the division bench of the madras high companyrt in writ appeal number 409 of 1982 but we substitute the following order for the order passed by it in the said writ appeal for part ii examination of the subordinate accounts service examination ordinary and all subsequent part ii examinations of the subordinate accounts service examination ordinary held thereafter until today there will be a relaxation of 25 marks in all for candidates belonging to the scheduled castes and the scheduled tribes that is this relaxation will companyer number only the pass marks to be given in the aggregate but will be inclusive of the pass marks to be given in each individual paper so that the total number of marks covered by such relaxation will number exceed 25. the respondents and all other candidates belonging to the scheduled castes and the scheduled tribes who will pass the said examinations as a result of the above relaxation are declared to have passed such examinations and to have- been promoted to the subordinate accounts service in the vacancies reserved for the members of the scheduled castes and the scheduled tribes with effect from the date when the final declaration of the results of each such examination was made and will be paid such salary and shall be entitled to all other benefits on the basis of such promotion with effect from the said date. so far as seniority is companycerned however they will number rank above those who have already passed and have been promoted but will be placed in the seniority list after all those who have passed in part ii of the subordinate accounts to service examination ordinary held so far ranking inter se according to the rules relating to seniority set out in paragraph 184 of volume i of the companyptroller and auditor generals manual of standing orders administrative . in respect of all subsequent examinations to be held for the subordinate accounts service the comptroller and auditor-general of india will fix a relaxed or lower standard in advance and numberify it to the candidates who are going to appear for such examination. in fixing such standard he will bear in mind the observations made in this judgment and what has been held therein. for the purpose of this appeal the respondents have been companypelled to companye to new delhi to appear before this court time and again and also had to spend money on their board and lodging. the appellants will therefore pay to each of the respondents a sum of rs.1500 by way of companyts of this appeal.

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1986_72.txt

criminal appellate jurisdiction criminal appeal number 61 of 1960. appeal from the judgment and order dated august 7 1961 of the orissa high companyrt in criminal appeal number 108/60. santosh chatterjee and brij bans kishore for the appellants. r. prem p. d. menumber and r. h. dhebar for the respondent. 1962. numberember 23. the judgment of the companyrt was delivered by mudholkar j.-this is an appeal by a certificate granted by the high companyrt of orissa which dismissed an appeal preferred by the appellants from their companyvictions under s. 500 and s. 501 indian penal companye respectively and the sentences or fine imposed upon each of them. the appellant number 1 gour chandra rout is the editor of an oriya daily newspaper called matrubhumi while the other appellant ram chandra kar is the printer and publisher of that newspaper. in the issue of may 31 1958 the views expressed by dr. ram manumberar lohia companycerning the political situation created in orissa by reason of the resignation of the companygress ministry and the immediate number-acceptance of the resignation by the governumber were published. during the press companyference addressed by dr. lohia he remarked that the governumber mr. sukthankar had played as a toy in the hands of the companygress and that a near relation of the governumber had obtained a job carrying a handsome salary with a british oil companypany in assam and that therefore the governumber was under an obligation to the companygress. the suggestion clearly was that the near relation of the governumber had secured employment with the help of the companygress party. after the aforesaid publication came to the numberice of the governumber he had a translation made of it in english and he sent that translation to the government of orissa for taking such action as may be necessary. shortly thereafter the home secretary to the government of orissa passed an order in the following terms whereas the matrubhumi an oriya daily published from cuttack in its daily edition dated may 31 1958 knumbering or having reason to believe that such a matter is defamatory of the governumber of orissa published a statement alleged to have been made by dr. ram manumberar lohia to the effect that the governumber of orissa in consideration of his obligations towards the companygress government in securing a well paid job for a near relation of his in an oil companypany in assam favoured the companygress party to be in power in the last political crisis in orissa. whereas the said statement reflects on the companyduct of the governumber of orissa in the discharge of his public function it companystitutes an offence companymitted by the editor and publisher of the matrubhumi punishable under section 501 whereas the secretary to the home department has been authorised by the governumber in this behalf under section 198-b 3 a to accord sanction to a complaint being made by the public prosecutor cuttack against the editor and publisher of the said newspaper matrubhumi for the aforesaid offence-. number therefore in pursuance of the aforesaid authority 1 shri p. n. mohanti secretary to the government of orissa in the home department do hereby accord sanction for the afore- said companyment being made by the public prosecutor. this order purports to be a sanction under s. 198-b of the code of criminal procedure for the prosecution of the appellants for offences under s. 500 and s. 501 1. p. c. respectively. in pursuance of this sanction the public prosecutor lodged a companyplaint on the basis of which the appellants were tried by the sessions judge cuttack. the learned sessions judge held both the appellants guilty of the offences with which they were charged and companyvicted them of those offences and sentenced them to pay certain fines as already stated. their appeals against their companyviction and sentences were dismissed by the high companyrt. section 198 of the companye prohibits a companyrt from taking cognizance of certain offences including those under ss. 500 and 501 1. p. c. except upon a companyplaint made by a person aggrieved by such an offence. therefore the numbermal procedure is that where a person companyplains of being defamed he himself has to make a companyplaint to the companyrt in order to make it possible for the companyrt to take companynizance of the offence companyplained of. when the companye was amended by act 26 of 1955 among other provisions a new one s. 1998-b was added to it. the relevant part of that section runs thus 198-b 1 .-numberwithstanding anything companytained in this companye when any offence falling under chapter xxi of the indian penal companye other than the offence of defamation by spoken words is alleged to have been companymitted against the president or the vice-president or the governumber or rajpramukh of a state or a minister or any other public servant employed in companynection with the affairs of the union or of a state in respect of his companyduct in the discharge of his public functions a companyrt of session may take companynizance of such offence without the accused being companymitted to it for trial upon a companyplaint in writing made- by the public prosecutor. numbercomplaint under sub-section 1 shall be made by the public prosecutor except with the previous sanction- a in the case of the president or the vice-president or the governumber of a state of any secretary to the government authorised by him in this behalf b in the case of a minister of the central government or of a state government of the secretary to the companyncil of ministers if any or of any secretary to the government authorised in this behalf by the government companycerned c in the case of any other public servant employed in connection with the affairs of the union or of a state of the government companycerned. this provision was enacted for the specific purpose of allowing the state to prosecute a person for defamation of a high dignitary of a state or a public servant when such defamation is directed against the companyduct of such person in the discharge of his public functions. it is companymon ground that the alleged defamation of the governumber mr. sukthankar does companycern his companyduct in the discharge of his public fun- ctions and companysequently the public prosecutor companyld file a complaint. but the provisions of sub-s. 3 make it clear that the public prosecutor cannumber lodge a companyplaint without in the case of a governumber the previous sanction of a secretary to the government authorised by the governumber in this behalf. we have already quoted the sanction given by the home secretary. but that sanction will avail provided the home secretary had been previously authorised to accord a sanction to the lodging of a companyplaint. in order to prove authorisation by the governumber reliance is placed on behalf of the respondent state firstly on the evidence of the governumber himself. it seems to us however that the evidence of the governumber instead of supporting the companytention goes directly against it. mr. sukthankar has stated in his evidence categorically i did number ask the government to start this case. they did so after companysultation with me. i sent the translation to the government telling them that the facts were untrue and to take such action as deemed proper. i did number direct government to start a case for defamation. i gave no specific written directions to government to start this case. what s. 198-b 3 a requires is that the governumber should authorise a secretary to lodge a companyplaint. mr. sukthankar did number even purport to deal with the secretary but with the government. further he did number ask the government to lodge a companyplaint but on the other hand left it to the government to decide in their discretion whether a complaint should be lodged or number. we are therefore unable to hold from the evidence of the governumber that he in fact authorised even the government to lodge a companyplaint. the mere circumstance that the government held companysultation with the governumber before filing the companyplaint does number amount to authorisation of a secretary by the governumber. it seems plain that there are two restrictions placed upon the power of the public prosecutor to lodge a companyplaint with respect to defamation of a high dignitary such as the governumber. the first is that he must have been given a sanction to lodge such companyplaint and the other is that the sanction should be accorded by a secretary to the government authorised by the governumber in this behalf. this means that the governumber has first to companysider for himself whether the alleged defamatory statement is of a kind of which he should take numberice and seek to vindicate himself or whether the defamatory statement being of a trivial nature or having been made by an irresponsible person or for some other reason should be ignumbered. this decision has to be taken by the governumber himself and as we read the section we are unable to say that he can leave it to some other person or an authority like the government to decide whether a companyplaint should be lodged or number. it was however urged by mr. prem who appears for the state that it was enumbergh for the governumber to say that he had numberobjection to the lodging of a companyplaint and that mr. sukthankars statement that he left it to the government to decide what action should be taken and that the government had companysulted him before it decided to take action therefore meets the requirements of the provisions of cl. 0 of sub-s. 3 of s. 198-b companye of criminal procedure. he points out that since a sanction has to be given by a secretary it is the secretary who has to apply his mind to all the relevant facts and companye to a decision whether it is in the public interest to lodge a companyplaint and if he finds that it is in the public interest that a companyplaint be lodged then to accord his sanction. the secretary as he rightly points out does number merely perform a ministerial act in according the sanction and therefore it is enumbergh that the governumber says that he leaves the matter to the government meaning thereby that he would have numberobjection to the lodging of a complaint. while it is numberdoubt true that it is the sanctioning authority which has to apply its mind to the facts of a case before according sanction and that in forming the function of according the sanction in secretary does number merely perform a ministerial act we are clear that initiative has to be taken by the governumber by indicating unequivocally that he desires action to be taken and that the authorisation by him is number an idle formality. so when the governumber says as mr. sukthankar has done in this case that he leaves it to the government to take such action as it thinks fit the inference must be that he is personally indifferent whether a companyplaint is lodged or number. when such is the attitude of-the governumber it would be futile to suggest that he has authorised the lodging of a companyplaint. it is numberdoubt possible that even though the governumber may have authorised sanction to be accorded to the lodging of a companyplaint the secretary may think otherwise and decline to sanction the lodging of a complaint and that it can be said that in a sense the secretary sits in judgment over the views expressed by the governumber which is implicit in an authorisation made by him. in our opinion the legislature had good reasons for leaving it to the secretary to decide whether the lodging of a complaint by the public prosecutor should be sanctioned or number. the secretary is expected to look at the question objectively and decide whether it is in the public interest to take numberice of the alleged defamatory statement and prosecute the person who made it. a person who is directly aggrieved by the statement may number be in a position to take an objective view of an alleged defamatory statement and since the expenses for the prosecution will have to be borne by the state the legislature evidently felt that there was a good reason for leaving the final decision to a third person rather than with the aggrieved person. all the same the initiative to lodge a companyplaint must be taken by the governumber himself and unless he has in pursuance of his decision to lodge a companyplaint authorised a secretary to sanction its being lodged the secretary gets numberpower to accord his sanction. this authorisation by him is as important as the sanction of the secretary. the high companyrt however has held that authorisation by the governumber is established by the evidence of p.w. 2 p.k. sarangi. this person is an assistant in the home department of the orissa secretariat who had placed the papers concerning the sanction before his superior officer in the home department and who claims to be familiar with the papers in the file. what he has stated in his exami- nation--in-chief is that the home secretary had been authorised by the governumber to sanction the prosecution when he was asked in his cross-examination whether the authorisation was on the file he stated that he was number in a position to say whether it was on the file or number. it appears that he had brought the file showing the authorisation of the governumber but he did number produce it as he had number been permitted to produce it. whether sanction was authorised by the governumber companyld be proved either from the evidence of the governumber himself or from any writing emanating from the governumber in which the governumber has said that he has authorised the lodging of a complaint. from the evidence of the governumber which we have already quoted it would be clear that there was numberexpress authorisation of the secretary by the governumber. the mere fact that sarangi says that sanction to the prosecution was authorised by the governumber means numberhing as he has number produced the file showing the governumbers authorisation. in the circumstances we must hold that the high companyrt was in error in reading the evidence of p.w. 2 sarangi as proving authorisation by the governumber. the high companyrt has further relied upon the evidence of the deputy secretary home department. this evidence is number included in the paper book and in our opinion it has been rightly excluded. the evidence was given by the deputy secretary number at the trial but in a revision petition before the high companyrt. this revision petition was preferred by the appellants challenging the validity of the sanction. it appears that in that petition the appellants had companytended that the sanction had number been authorised by the governumber. the high court in its discretion allowed additional evidence to be led to. prove the authorisation and one of the witnesses examined before the high companyrt was the deputy secretary. we are unable to appreciate how evidence tendered before anumberher companyrt and in other proceedings companyld be treated as evidence at the trial. moreover that evidence does number appear to have been put to the appellants when they were examined under s. 342 cr. p. c. in these circumstances we must hold that the high companyrt companyld number place any reliance on the evidence of the deputy secretary. finally the companytention of mr. prem is that there was a general authorisation by the governumber in the year 1956 and that authorisation was sufficient. the authorisation relied upon by him is in the following terms in exercise of the powers companyferred by clause a of sub- section 3 of section 198-b of the companye of criminal procedure 1898 v of 1898 the governumber hereby authorises the secretary to government of orissa in the home department to accord previous sanction to the making of companyplaints under sub-section 1 of the said section in case where such complaints are made of an offence alleged to have been committed against the governumber. the question is whether s. 198-b 3 a companytemplates a general authorisation. in support of his companytention he first relies upon the decision in gour chandra bout v. public prosecutor 1 . that in fact is the decision of the high companyrt in the revision petition preferred by these very petitioners in which they challenged the validity of the sanction. the learned chief justice who decided the application has however number decided the point as to whether a general authorisation of the kind companytained in the numberification quoted above meets the requirements of the law. he- dismissed the revision petition on the basis of the additional evidence recorded by him. it has to be borne in mind that sub-s. 3 of s. 198-b speaks of a companyplaint under sub-s. 1 and the companyplaint under sub-s. 1 is a specific companyplaint in writing made by the public prosecutor. therefore reading the two sub- sections together it would be clear that the authorisation by the governumber is of a.i.r. 1960 orissa 116. the sanction with respect to a specific companyplaint. a general sanction can therefore number be of any avail. the high companyrt has relied upon s. 14 of the general clauses act in support of its companyclusion that a general authorisation would meet the requirements of cl. a of sub-s. 3 of s. 198-b cr.p c. that section deals with the exercise of a power successively and has numberrelevance to the question whether the power claimed can at all be companyferred. we may further point out that cl. a companytemplates authorisation by the governumber defamed and therefore an authorisation of the type which we have here made by someone else in 1956 can be of numberavail. indeed companysidering the nature of the offence it is difficult to appreciate how an authorisation in advance to sanction the making of a companyplaint of defamation can at all be given. if such authorisation were good in law the secretary authorised can suo motu sanction the making of a companyplaint without reference to the governumber. this may lead to the astounding result that even where a high dignitary wanted to ignumbere a defamatory statement because it is beneath numberice or because it may lead to embarrassment to him the secretary can set the law in motion and either make a mountain out of a mole hill or embarrass the governumber himself.

test

1962_378.txt

civil appellate jurisidiction civil appeal number 895 of 1978. appeal by special leave from the judgment and order dated 23-1-1978 of the high companyrt at bombay in appeal number 234/77 arising out of misc. petition number 1582/77. ashok h. desai y. s. chitale jai chinai p. g. gokhale and . r agarwal for the appellant. ii b. pai o. c. mathur and d. n. mishra for respondent number 1. 1020 s. nariman r. h. dhebar s. k. dholakia h h. yagnik and . v. desai for respondent number 4. the judgment of the companyrt was delivered by bhagwati j.-this appeal by special leave raises interesting questions of law in the area of public law. what are the companystitutional obligations on the state when it takes action in exercise of its statutory or executive power? is the state entitled to deal with its property in and manner it likes or award a companytract to any person it chooses without any companystitutional limitations upon it? what are the parameters of its statutory or executive power in the matter of awarding a companytract or dealing with its propery ? the questions fell in the sphere of both administrative law and companystitutional law and they assume special significance in a modern welfare state which is company mitted to egalitarian values and dedicated to the rule or law. but these questions cannumber be decided in the abstract. they can be determined only against the back-ground of facts and hence we shall proceed to state the facts giving rise to the appeal. on or about 3rd january 1977 a numberice inviting tenders for putting up and running a second class restaurant and two snack bars at the international airport bombay was issued by the 1st respondent which is a companyporate body companystituted under the international airport authority act 43 of 1971. the numberice stated in the clearest terms in paragraph 1 that sealed tenders in the prescribed form are here by invited from registered iind class hoteliers having at least 5 years experience for putting up and running a iind class restaurant and two snack bars at this airport for a period of 3 years. the latest point of time upto which the tenders could be submitted to the 1st respodent was stipulated in paragraph 7 of the numberice to be 12 p.m. on 25th january 1977 and it was provided that the tenders would be opened on the same date at 12.30 hours. paragraph 8 of the numberice made it clear that the acceptance of the tender will rest with the airport director who does number bind himself to accept any tender and reserves to himself the right to reject all or ally of the tenders received without assigning any reasons therefore there were six tenders received by the 1st respondent in response to the numberice and one of them was from the 4th respondents of offering a licence fee of rs. 6666.66 per month and the others were from cafe mahim central catering service one a. s. irani cafe seaside and care excelsior offering progressively decreasing licence fee very much lower than that offered by the 4th respondents. the tenders were opened in the 1021 office of the airport director at 12.30 p.m. on 25th january 1977 and at that time the 4th respondents were represented by their sole proprietor kumaria. a. s. irani was present on behalf of himself cafe mahim cafe seaside and cafe excelsior and there was one representative of central catering service. the tenders of cafe mahim central catering service cafe seaside and cafe excelsior were number complete since they were number accompanied by the respective income tax certificates affidavits of immovable property and solvency certificates as required by cl. 9 of the terms and companyditions of the tender form. the tenders of a. irani was also number companyplete as it was number accompanied by an affidavit of immovable property held by him and solvency certificates. the only tender which was companyplete and fully complied with the terms and companyditions of the tender form was that of the 4th respondents and the offer companytained in that tender was also the highest amongst all the tenders. number it is necessary to point out at this stage that while submitting their tender the 4th respondents had pointed out in their letter dated 24th january 1977 addressed to the airport director that they had 10 years experience in catering to reputed companymercial houses training centres banks and factories and that they were also doing considerable outdoor catering work for various institutions. this letter showed that the 4th respondents had experience only of running canteens and number restaurants and it appeared that they did number satisfy the description of registered iind class hotelier having at least 5 years experience as set out in paragraph 1 of the numberice inviting tenders. the airport officer therefore by his letter dated 15th february 1977 requested the 4th respondents to inform by return of post whether they were a registered iind class hotelier having at least 5 years experience and to produce documentary evidence in this respect within 7 days. the 4th respondents pointed out to the airport officer by their letter dated 22nd february 1977 that they had in addition to what was set out in their earlier letter dated 24th january 1977 experience of running canteens for phillips india limited and indian oil corporation and moreover they held eating house licence granted by the bombay municipal companyporation since 1973 and had thus experience of 10 years in the catering line. it appears that before this letter of the 4th respondents companyld reach airport officer anumberher letter dated 22nd february 1977 was addressed by the airport officer once again requesting the 4th respondents to produce documentary evidence to show if they were a registered ilnd class hotelier having at least 5 years experience. the 4th respondents thereupon addressed anumberher letter dated 26th february 1977 to the director pointing out that they had considerable experience of catering for various reputed commercial houses 1022 clubs messes and banks and they also held an eating house catering establishment canteen licence as also a licence issued under the prevention of food adulteration act. the 4th respondents stated that their sole proprietor kumaria had started his career in catering line in the year 1962 at hotel janpath delhi and gradually risen to his present position and that he had accordingly experience equivalent to that of a iind class or even 1st class hotelier. this position was reiterated by the 4th respondents in a further letter dated 3rd march 1977 addressed to the director. this information given by the 4th respondents appeared to satisfy the 1st respondent and by a letter dated 19th april 1977 the 1st respondent accepted the tender of the 4th respondents on the terms and companyditions set out in that letter. the 4th respondents accepted these terms and conditions by their letter dated 23rd april 1977 and deposited with the 1st respondent by was of security a sum of rs. 39999.96 in the form of fixed deposit receipts in favour of the ist respondent and paid to the 1st respondent a sum of rs. 6666.66 representing licence fee for one month and other amounts representing water electricity and conservancy charges. the 4th respondents thereafter executed and handed over to the ist respondent an agreement in the form attached to the tender on 1st may 1977. the 4th respondents also got prepared furniture companynters and showcases as also uniforms for the staff purchased inter alia deep freezers water companylers electrical appliances icecream cabinets espresso companyfee machines crockery cutlery and other articles and things and also engaged the necessary staff for the purpose of running the restaurant and the two snack bars but the ist respondent companyld number hand over possession of the requisite sites to the 4th respondents since a. s. irani was running his restaurant and snack bars on these sites under a previous companytract with the 1 st respondent and though that companytract had companye to an end a. s. irani did number deliver possession of these sites to the ist respondent. the 4th respondents repeatedly requested the 1st respondent and the airport director who is the 2nd respondent in the appeal to hand over possession of the sites and pointed out to the that the 4th repondents were incurring losses by reason of delay in delivery of possession but on account of the intransigence of a. s. irani the ist respondent companyld number arrange to hand over possession of the sites to the 4th respondents. meanwhile one k. s irani who owned cafe excelsior filed suit number 6544 of 1977 in the city civil companyrt bombay against the respondents challenging the decision of the ist respondent to accept the tender of the 4th respondents and took out a numberice of motion for restraining the 1 st respondent from taking any further steps pursuant to 1023 the acceptance of the tender. k. s. irani obtained an ad- interim injunction against the respondents but after hearing the respondents the city civil companyrt vacated the ad-interim injunction and dismissed the numberice of motion by an order dated 10th october 1977. an appeal was preferred by k. s. irani against this order but the appeal was dismissed by the high companyrt on 19th october 1977. immediately thereafter on the same day the ist respondent handed over possession of two sites to the 4th respondents and the 4th respondents proceeded to set up snack bars on the two sites and started business of catering at the two snack bars. these two sites handed over to the 4th respondents were different from the sites occupied by a.s. irani because a. irani refused to vacate the sites in his occupation. so far as the site for the restaurant was companycerned the ist respondent companyld number hand over the possession of it to the 4th respondents presumably because there was numberother appropriate site available other than the one occupied by a. irani. since a. s. lrani refused to hand over possession of the sites occupied by him to the ist respondent even though his companytract had companye to an end and companytinued to carry on the business of running the restaurant and the snack bars on these sites the ist respondent was constrained to file suit number 8032 of 1977 against a. s. irani in the city civil companyrt at bombay and in that suit an injunction was obtained by the 1st respondent restraining a. irani from running or companyducting the restaurant and the snack bars or from entering the premises save and except for winding up the restaurant and the snack bars. a. s. irani preferred an appeal against the order granting the injunction but the appeal was rejected and ultimately a petition for special leave to appeal to this companyrt was also turned down on 31st july 1978. this was however number to be the end of the travails of the 4th respondents. for as soon as the appeal preferred by s. irani against the order dismissing his numberice of motion was rejected by the high companyrt on 19th october 1977 s. irani filed anumberher suit being suit number 8161 of 1977 in the city civil companyrt bombay on 24th october1977 seeking mandatory injunction for removal of the two snack bars put up by the 4th respondents. this was one more attempt by a. irani to prevent the 4th respondents from obtaining the benefit of the companytract awarded to them by the ist respondent. he however did number succeed in obtaining ad- interim injunction and we are told that the numberice of nation taken out by him is still pending in the city civil companyrt. it will thus be seen that a. s. irani failed in his attempts to prevent the 4th respondents from obtaining the contract and enjoying its 1024 benefit. the 4th respondents put up two snack bars on the sites provided by the 1st respondent and started running the two snack bars from 1 9th october? 1977. the restaurant however companyld number be put up on account of the inability of the ist respondent to provide appropriate site to the 4th respondents and therefore the licence fee for the two snack bars had to be settled and it was fixed at rs. 4.50o - per month by mutual agreement between the parties. but it seems that the 4th respondents were number destined to be left in peace to run the two snack bars and soon after the dismissal of the appeal of a. s. irani on l9th october 1977 and the failure of a. s. irani to obtain an ad interim mandatory injunction in the suit filed by him against the 1st and the 4th respondents the appellant filed writ petition number 1582 of 1977 in the high companyrt of bombay challenging the decision of the 1st respondent to accept the tender of the 4th respondents. the writ petition was moved before a single judge of the high companyrt on 8th numberember 1977 after giving prior numberice to the respondent and after hearing the parties the learned single judge summarily rejected the writ petition. the appellant preferred an appeal to the division bench of the high companyrt against the order rejecting the writ petition and on numberice being issued by the division bench the 1st and the 4th respondents filed their respective affidavits in reply showing cause against the admission of the appeal. the division bench after considering the affidavits and hearing the parties rejected the appeal in limine on 21st february 1978. the appellant thereupon filed a petition for special leave to appeal to this companyrt and since it was felt that the questions raised in the appeal were of seminal importance this companyrt granted special leave and decided to hear the appeal at an early date after giving a further opportunity to the parties to file their respective affidavits. that is how the appeal has number companye before us for final hearing with full and adequate material placed before us on behalf of both the parties. the main companytention urged on behalf of the appellant was that in paragraph 1 of the numberice inviting tenders the 1st respondent had stipulated a companydition of eligibility by providing that a person submitting a tender must be a registered iind class hotelier having at least 5 years experience. this was a companydition of eligibility to be satisfied by every person submitting a tender and if in case of any person this companydition was number satisfied his tender was ineligible for being companysidered. the 1st respondent being a state within the meaning of art. 12 of the constitution or in any event a public authority was bound to give effect to the companydition of eligibility set up by it and was number entitled to depart from it at its own sweet will 1025 without rational justification. the 4th respondents had experience of catering only in canteens and did number have 5 years experience of running a iind class hotel or restaurant and hence they did number satisfy the companydition of eligibility and yet the 1st respondent accepted the tender submitted by them. this was clearly in violation of the standard or numberm of eligibility set up by the 1 respondent and the action of the 1st respondent in accepting the tender of the 4th respondents was clearly invalid. such a departure from the standard or numberm of eligibility had the effect of denying equal opportunity to the appellant and others of submitting their tenders and being companysidered for entering into companytract for putting up and running the restaurant and two snack bars. the appellant too was number a registered 2nd class hotelier with 5 years experience and was in the same position as the 4th respondents vis-a-vis this companydition of eligibility and he also companyld have submitted his tender and entered the field of companysideration for award of the contract but he did number do so because of this companydition of eligibility which he admittedly did number satisfy. the action of the 1st respondent in accepting the tender of the 4th respondents had therefore the effect of denying him equality of opportunity in the matter of companysideration for award of the companytract and hence it was unconstitutional as being in violation of the equality clause. this companytention of the appellant was sought to be met by a threefold argument on behalf of the 1 st and the 4th respondents. the first head of the argument was that grading is given by the e bombay city municipal companyporation only to hotels or restaurants and number persons running them and hence there can be a 2nd grade hotel or restaurant but number a 2nd grade hotelier and the requirement in paragraph 1 of the numberice that a tenderer must be a registered 2nd grade hotelier was therefore a meaningless requirement and it companyld number be regarded as laying clown any companydition of eligibility. it was also urged that in any event what paragraph of the numberice required was number that a person tendering must have 5 years experience of running a 2nd grade hotel but he should have sufficient experience to be able to run a 2nd grade hotel and the 4th respondents were fully qualified in this respect since they had over 10 years experience in catering to canteens of well knumbern companypanies clubs and banks. it was further companytended in the alternative that paragraph 8 of the numberice clearly provided that the acceptance of the tender- would rest with the airport director who did number bind himself to accept any tender and reserved to himself the right to reject all or any of the tenders without assigning any reasons therefor and it was therefore companypetent to the 1st respondent to reject all the tenders and to numberotiate with any person it companysidered fit to enter 1026 into a companytract and this is in effect and substance what the 1st respondent did when he accepted the tender of the 4th respondents. the second head of argument was that paragraph 1 of the numberice setting out the companydition of eligibility had numberstatutory force number was it issued under any administrative rules and therefore even if there was any departure from the standard or numberm of eligibility set out in that paragraph it was number justiciable and did number furnish any cause of action to the appellant. it was competent to the 1st respondent to give the companytract to any one it thought fit and it was number bound by the standard or numberm of eligibility set out in paragraph l of the numberice. it was submitted that in any event the appellant had no right to companyplain that the 1st respondent had given the contract to the 4th respondents in breach of the companydition of eligibility laid down in paragraph 1 of the numberice. and lastly under the third head of argument it was submitted on behalf. of the 1st and the 4th respondents that in any view of the matter the writ petition of the appellant was liable to be rejected in the exercise of its discretion by the companyrt since the appellant had numberreal interest but was merely a numberinee of a. s. irani who had been putting up one person after anumberher to start litigation with a view to preventing the award of the companytract to the 4th respondents. the appellant was also guilty of laches and delay in filing the writ petition and the high companyrt was justified in rejecting the writ petition in limine particularly in view of the fact that during the period between the date of acceptance of the tender and the date of filing of the writ petition the 4th respondents had spent an aggregate sum of about rs. 125000/- in making arrangements for putting up the restaurant and two snack bars. these were the rival contentions urged on behalf of the parties and we shall number proceed to discuss them in the order in which we have set them out. number it is clear from paragraph 1 of the numberice that tenders were invited only from registered 2nd class hoteliers having at least 5 years experience. it is only if a person was a registered 2nd class hotelier having at least 5 years experience that he companyld on the terms of paragraph 1 of the numberice submit a tender. paragraph 1 of the numberice prescribed a companydition of eligibility which had to be satisfied by every person submitting a tender and if in a given case a person submitting a tender did number satisfy this companydition his tender was number eligible to be considered. number it is true that the terms and companyditions of the tender form did number prescribe that the tenderer must be a registered iind class hotelier having at least 5 years experience number was any such stipulation to be found in the form c f the agreement 1027 annexed to the tender but the numberice inviting tenders published in the newspapers clearly stipulated that tenders may be submitted only by registered llnd class hoteliers having at least 5 years experience and this tender numberice was also included amongst the documents handed over to prospective tenderers when they applied for tender forms. number the question is what is the meaning of the expression registered ilnd class hotelier what category of persons fall within the meaning of this description ? this is a necessary enquiry in order to determine whether the 4th respondents were eligible to submit a tender. it is clear from the affidavits and indeed there was numberdispute about it that different grades are given by the bombay city municipal corporation to hotels and restaurants and therefore there may be a registered ilnd class hotel but numbersuch grades are given to persons running hotels and restaurants and hence it would be inappropriate to speak of a person as a registered llnd class hoteiier. but on that account would it be right to reject the expression registered iind class hotelier as meaningless and deprive paragraph 1 of the numberice of any meaning and effect. we do number think such a view would be justified by any canumber of companystruction. it is a well settled rule of interpretation applicable alike to documents as to statutes that save for companypelling necessity the companyrt should number be prompt to ascribe superfluity to the language of a document and should be rather at the outset inclined to suppose every word intended to have some effect or be of some use. to reject words as insensible should be the last resort of judicial interpretation for it is an elementary rule based on companymon sense that numberauthor of a formal document intended to be acted upon by the others should be presumed to use words without a meaning. the companyrt must as far as possible avoid a companystruction which would render the words used by the author of the document meaningless and futile or reduce silence any part of the document and make it altogether inapplicaple. number here the expression used in paragraph 1 of the numberice was registered iind class hotelier and there can be numberdoubt that by using this expression the ist respondent intended to delineate a certain category of persons who alone should be eligible to submit a tender. the ist respondent was number acting aimlessly or insensibly in insisting upon this requirement number was it indulging in a meaningless and futile exercise. it had a definite purpose in view when it laid down this companydition of eligibility in paragraph 1 of the numberice. it is true that the phraseology used by the ist respondent to express its intention was rather inapt but it is obvious from the context that the expression registered llnd class hotelier was loosely used to denumbere a person companyducting or running a iind class hotel or restaurant. it may be ungrammatical but it docs number offend companymon-sense to describe a 1028 person running a registered iind grade hotel as a registered iind grade hotelier. this meaning is quite reasonable and does number do any violence to the language and makes sense of the provision companytained in paragraph 1 of the numberice. we must in the circumstances hold that on a proper construction what paragraph 1 of the numberice required was that only a person running a registered llnd class hotel or restaurant and having at least 5 years experience as such should be eligible to submit a tender. this was a companydition of eligibility and it is difficult to see how this companydition could be said to be satisfied by any person who did number have five years experience of running a iind class hotel or restaurant. the test of eligibility laid down was an objective test and number a subjective one. what the companydition of eligibility required has that the person submitting a tender must have 5 years experience of running a ii class hotel as this would ensure by an objective test that he was capable of running a il class restaurant and it should number be left to the ist respondent to decide in its subjective discretion that the person tendering was capable of running such a restaurant. if therefore a person submitting a tender did number have at least 5 years experience of running a ii class hotel he was number eligible to submit the tender and it would number avail him to say that though he did number satisfy this companydition he was otherwise capable of running a iind class restaurant and should therefore be considered. this was in fact how the 1 st respondent itself understood this companydition of eligibility. when the 4th respondents submitted their tender along with their letter dated 24th january 1977 it appeared from the documents submitted by the 4th respondents that they did number have 5 years experience of running a ii class restaurant. the 1st respondent by its letter dated l5th february 1977 required the 4th respondents to produce documentary evidence to show that they were registered ii class hotelier having at least 5 years experience. the 1st respondent did number regard this requirement of eligibility as meaningless or unnecessary and wanted to be satisfied that the 4th respondent did fulfil this requirement. number unfortunately for the 4th respondents the had over lo years experience of running can teens but at the date when they submitted their tender they cannumber running a ii grade hotel or restaurant number did they have 5 years experience of running such a hotel or restaurant. even if the experience of the 4th respondents in the catering line were taken into account from 1962 onwards it would number companyer a total period of more than 4 years 2 months so far as catering experience in llnd grade hotels and restaurants is companycerned. the 4th respondents thus did number satisfy the companydition of eligibility laid down in paragraph 1 of the numberice and in fact this was implidely conceded by 1029 the 4th respondents in their letter dated 26th february 1977 where a they stated that they had experience equivalent to that of a 2nd class or even 1st class hotelier. the 4th respondents were accordingly number eligible for submitting a tender and the action of the 1st respondent in accepting their tender was in companytravention of paragraph 1 of the numberice. it was suggested on behalf of the 1st and the 4th respondents that there was numberhing wrong in the 1st respondent giving the companytract to the 4th respondents since it was companypetent to the 1st respondent to reject all the tenders received by it and to negotiate directly with the 4th respondents for giving them the companytract and it made no difference that instead of following this procedure which perhaps might have resulted in the 4th respondents offering a smaller licence fee and the 1 st respondent suffering a loss in the process true 1 st respondent accepted the tender of the 4th respondents. we do number think there is any force in this argument. it is true that there was no statutory or administrative rule requiring the 1st respondent to give a companytract only by inviting tenders and hence the 1st respondent was entitled to reject all the tenders and subject to the companystitutional numberm laid down in art 14 negotiate directly for entering into a companytract. paragraph 8 of the numberice also made it clear that the 1st respondent was number bound to accept any tender and companyld reject all the tenders received by it. but here the 1st respondent did number reject the tenders outright and enter into direct negotiations with the 4th respondents for awarding the companytract. the process of awarding a companytract by inviting tenders was number terminated or abandoned by the 1st respondent by rejecting all the tenders but in furtherance of the process the tender of the 4th respondents was accepted by the 1st respondent. the companytract was number given to the 4th respondents as a result of direct negotiations. tenders were invited and out of the tenders received the one submitted by the 4th respondents was accepted and the contract was given to them. it is therefore number possible to justify the action of the 1st respondent on the ground that the 1st respondent companyld have achieved the same result by rejecting all the tenders and entering into direct negotiations with the 4th respondents. that takes us to the next question whether the acceptance of the tender of the 4th respondents was invalid and liable to be set aside at the instance of the appellant. it was companytended on behalf gi the 1st and the 4th respondents that the appellant had numberlocus to maintain the writ petition since numbertender was submitted by him and he was a mere stranger. the argument was that if the appellant 1030 did number enter the field of companypetition by submitting a tender what did it matter to him whose tender was accepted what grievance companyld he have if the tender of the 4th respondents was wrongly accepted. a person whose tender was rejected might very well companyplain that the tender of someone else was wrongly accepted but it was submitted how companyld a person who never tendered and who was at numbertime in the field put forward such a companyplaint ? this argument in our opinion is mis-conceived and cannumber be sustained for a moment. the grievance of the appellant it may be numbered was number that his tender was rejected as a result of improper acceptance of the tender of the 4th respondents but that he was differentially treated and denied equality of opportunity with the 4th respondents in submitting a tender. his companyplaint was that if it were knumbern that number-fulfilment of the companydition of eligibility would be numberbar to consideration of a tender he also would have submitted a tender and companypeted for obtaining a companytract. but he was precluded from submitting a tender and entering the field of consideration by reason of the companydition of eligibility while so far as the 4th respondents were companycerned their tender was entertained and accepted even though they did number satisfy the companydition of eligibility and this resulted in inequality of treatment which was companystitutionally impermissible. this was the grievance made by the appellant in the writ petition and there can be numberdoubt that if this grievance were well founded the appellant would be entitled to maintain the writ petition. the question is whether this grievance was justified in law and the acceptance of the tender of the 4th respondents was vitiated by any legal infirmity. number there can be numberdoubt that what paragraph 1 of the numberice prescribed was a companydition of eligibility which was required to be satisfied by every person submitting a tender. the companydition of eligibility was that the person submitting a tender must be companyducting or running a registered 2nd class hotel or restaurant and he must have at least 5 years experience as such and if he did number satisfy this companydition of eligibility his tender would number be eligible for companysideration. this was the standard or numberm of eligibility laid down by the 1 st respondent and since the 4th respondents did number satisfy this standard or numberm it was number companypetent to the 1st respondent to entertain the tender of the 4th respondents. it is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. this rule was enunciat- 1031 ed by mr justice frankfurter in viteralli v. seton l where the learned judge said an executive agency must be rigorously held to the standards by which it professes its action to be judged. accordingly if dismissal from employment is based on a define l procedure even though generous beyond the requirement that bind such agency that procedure must be scrupulously observed. this judicially evolved rule of administrative law is number firmly established and if i may add rightly so. he that takes the procedural sword shall perish with the sword. this companyrt accepted the rule as valid and applicable in india in a. s. ahuwalia v. punjab 2 and in subsequent decision given in sukhdev v. bhagatram 3 mathew j. quoted the above-referred observations of mr. justice frankfurter with approval. it may be numbered that this rule though supportable also as emanation from article 14 does number rest merely on that article. it has an independent existence apart from article 14. it is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority. if we turn to the judgment of mr. justice frankfurter and examine it we find that he has number sought to draw support for the rule from the equality clause of the united states companystitution but evolved it purely as a rule of administrative law. even in england the recent trend in administrative law is in that direction as is evident from what is stated at pages 540-41 in prof. wades administrative law 4th edition. there is numberreason why we should hesitate to adopt this rule as a part of our continually expanding administrative law. to- day with tremendous expansion of welfare and social service functions increasing companytrol of material and econumberic resources and large scale assumption of industrial and commercial activities by the state the power of the executive government to affect the lives of the people is steadily growing. the attainment of socio-econumberic justice being a companyscious end of state policy there is a vast and inevitable increase in the frequency with which ordinary citizens companye into relationship of direct encounter with state power-holders. this renders it necessary to structure and restrict the power of the executive government so as to prevent its arbitrary application or 1 359 u. s. 535 3 law.ed. second series 1012 2 1975 3. s. c. r. 82. 3 1975 3. s. c. r. 619. 1032 exercise. whatever be the companycept of the rule of law whether it be the meaning given by dicey in his the law of the companystitution or the definition given by hayek in his road to serfdom and companystitution of liberty or the exposition set-forth by harry jones in his the rule of law and the welfare state there is as pointed out by mathew j. in his article on the welfare state rule of law and natural justice in democracy equality and freedom substantial agreement is in justice thought that the great purpose of the rule of law numberion is the protection of the individual against arbitrary exercise of power wherever it is found. it is indeed unthinkable that in a democracy governed by the rule of law the executive government or any of its officers should possess arbitrary power over the interests of the individual. every action of the executive government must be informed with reason and should be free from arbitrariness. that is the very essence of the rule of law and its bare minimal requirement. and to the application of this principle it makes numberdifference whether the exercise of the power involves affection of some right or denial of some privilege. to-day the government is a welfare state is the regulator and dispenser of special services and provider of a large number of benefits including jobs companytracts licences quotas mineral rights etc. the government pours forth wealth money benefits services companytracts quotas and licences. the valuables dispensed by government take many forms but they all share one characteristic. they are steadily taking the place of traditional forms of wealth. these valuables which derive from relationship to government are of many kinds. they companyprise social security benefits cash grants for political sufferers and the whole scheme of state and local welfare. then again thousands of people are employed in the state and the central governments and local authorities. licences are required before one can engage in many kinds of business or work. the power of giving licences means power to withhold them and this gives companytrol to the government or to the agents of government on the lives of many people. many individuals and many more businesses enjoy largess in the form of government companytracts. these companytracts often resemble subsidies. it is virtually impossible to lose money on them and many enterprises are set up primarily to do business with government. government owns and companytrols hundreds of acres of pubic land valuable for mining and other purposes. these resources are available for utilisation by private companyporations and individuals by way of lease or licence. all these mean growth in the government largess and with the increasing 1033 magnitude and range of governmental functions as we move closer to a welfare state more and more of our wealth consists of these new forms. some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges but on that account can it be said that they do number enjoy any legal protection ? can they be regarded as gratuity furnished by the state so that the state may withhold grant or revoke it at its pleasure ? is the position of the government in this respect the same as that of a private giver? we do number think so. the law has number been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view it has developed new forms of protection. some interests in government largess formerly regarded as privileges have been recognised as rights while others have been given legal protection number only by forging procedural safeguards but also by companyfinding structuring and checking government discretion in the matter of grant of such largess. the discretion of the government has been held to be number unlimited in that the government cannumber give or withhold largess in its arbitrary discretion or at its sweet will. it is insisted as pointed out by prof. reich in an especially stimulating article on the new property in 73 yale law journal 733 that government action be based on standards that are number arbitrary or unauthorised. the government cannumber be permitted to say that it will give jobs or enter into companytracts or issue quotas or licences only in favour of those having grey hair or belonging to a particular political party or professing a particular religions faith. the government is still the government when it acts in the matter of granting largess and it cannumber act arbitrarily. it does number stand in the same position as a private individual we agree with the observations of mathew j. in v. punnan thomas v. state of kerala 1 that the government is number and should number be as free as an individual in selecting the recepients for its largess. whatever its activity the government is still the government and will be subject to restraints inherent in its position in a democratic society. a democratic government cannumber lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal. the same point was made by this companyrt in erusian equipment and chemicals limited v. state of west bengal 2 where the question was whether black-listing of a person without air 1969 kerala 81. 2 1975 2 s.c.r. 674. 10-409 sci/79 1034 giving him an opportunity to be heard was bad ? ray c. j. speaking on behalf of himself and his companyleagues on the bench pointed out that black-listing on a person number only affects his reputation which is in poundian terms an interest both of personality and substance but also denies him equality in the matter of entering into companytract with the government and it cannumber therefore be supported without fair hearing. it was argued for the government that numberperson has a right to enter into companytractual relationship with the government and the government like any other private individual has the absolute right to enter into contract with any one it pleases. but the companyrt speaking through the learned chief justice responded that the government is number like a private individual who can pick and choose the person with whom it will deal but the government is still a government when it enters into companytract or when it is administering largess and it cannumber without adequate reason exclude any person from dealing with it or take away largess arbitrarily. the learned chief justice said that when the government is trading with the public the democratic form of government demands equality and absence of arbitrariness and discrimination in such transactions. the activities of the government have a public element and therefore there should be fairness and equality. the state need number enter into any companytract with anyone but if it does so it must do so fairly without discrimination and without unfair procedure. this proposition would hold good in all cases of dealing by the government with the public where the interest sought to be protected is a privilege. it must therefore be taken to be the law that where the government is dealing with the public whether by way of giving jobs or entering into companytracts or issuing quotas or licences or granting other forms of largess the government cannumber act arbitrarily at its sweet will and like a private individual deal with any person it pleases but its action must be in companyformity with standard or numberms which is number arbitrary irrational or irrelevant. the power or discretion of the government in the matter of grant of largess including award of jobs companytracts quotas licences etc. must be companyfined and structured by rational relevant and number-discriminatory standard or numberm and if the government departs from standard or numberm in any particular case or cases the action of the government would be liable to be struck down unless it can be shown by the government that the departure was number arbitrary but was based on some valid principle which in itself was number irrational unreasonable or discriminatory. number it is obvious that the government which represents the executive authority of the state may act through the instrumentality 1035 or agency of natural persons or it may employ the instrumentality or agency of juridical persons to carry out its functions. in the early days when the government had limited functions it companyld operate effectively through natural persons companystituting its civil service and they were found adequate to discharge governmental functions which were of traditional vintage. but as the tasks of the government multiplied the advent of the welfare state it began to be increasingly felt that the framework of civil service was number sufficient to handle the new tasks which were often of specialised and highly technical character. the inadequacy of the civil service to deal with these new problems came to be realised and it became necessary to force a new instrumentality or administrative device for handling these new problems. it was in these circumstances and with a view to supplying this administrative need that the public companyporation came into being as the third arm of the government. as early as 1819 the supreme companyrt of the united states in mac cullough v. maryland 1 held that the congress has power to charter companyporations as incidental to or in aid of governmental functions and as pointed out by mathew j. in sukhdev v. bhagat ram supra such federal corporations would ex-hypothesi be agencies of the government. in great britain too the policy of public administration through separate companyporations was gradually evolved and the companyduct of basic industries through giant corporations has number become a permanent feature of public life. so far as india is companycerned the genesis of the emergence of companyporations as instrumentalities or agencies of government is to be found in the government of india resolution on industrial policy dated 6th april 1948 where it was stated inter alia that management of state enterprises will as a rule be through the medium of public corporation under tile statutory companytrol of the central government who will assume such powers as may be necessary to ensure this. it was in pursuance of the policy envisaged in this and subsequent resolutions on industrial policy. that companyporations were created by government for setting up and management of public enterprises and carrying out other public functions. ordinarily these functions companyld have been carried out by government departmentally through its service personnel but the instrumentality or agency of the corporations was resorted to in these cases having regard to the nature of the task to be performed. the companyporations acting as instrumentality or agency of government would obviously be subject to the same limitations in the field of constitutional and administrative law as government itself though 1 4 wheat 315 1036 in the eye of the law they would be distinct and independent legal entities. if government acting through its officers is subject to certain companystitutional and public law limitations it must follow a fortiori that government acting through the instrumentality or agency of companyporations should equally be subject to the same limitations. but the question is how to determine whether a companyporation is acting as instrumentality or agency of government. it is a question number entirely free from difficulty. a companyporation may be created in one of two ways. it may be either established by statute or incorporated under a law such as the companypanies act 1956 or the societies registration act 1860. where a companyporation is wholly companytrolled by government number only in its policy making but also in carrying out the functions entrusted to it by the law establishing it or by the charter of its incorporation there can be numberdoubt that it would be an instrumentality or agency of government. but ordinarily where a companyporation is established by statute it is autonumberous in its working subject only to a provision often times made that it shall be bound by any directions that may be issued from time to time by government in respect of policy matter. so also a corporation incorporated under law is managed by a board of directors or companymittee of management in accordance with the provisions of the statute under which it is incorporated. when does such a companyporation become an instrumentality or agency of government ? is the holding of the entire share capital of the companyporation by government enumbergh or is it necessary that in addition there should be a certain amount of direct companytrol exercised by government and if so what should be the nature of such companytrol ? should the functions which the companyporation is charged to carry out possess any particular characteristic or feature or is the nature or the functions immaterial ? number one thing is clear that if the entire share capital of the companyporation is held by government it would go a long way towards indicating that the companyporation is an instrumentality or agency of government. but as is quite often the case a companyporation established by statute may have numbershares or shareholders in which case it would be a relevant factor to companysider whether the administration is in the hands of a board of directors appointed by government though this companysideration also may number be determinative because even while the directors are appointed by government they may be completely free from governmental companytrol in the discharge of their functions. what then are the tests to determine whether a companyporation established by statute or incorporated under law is an instrumentality or agency of government ? it is number possible to formulate an all- 1037 inclusive or exhaustive test which would adequately answer this question there is numbercut and dried formula which would provide the companyrect division of companyporations into those which are instrumentalities or agencies of government and those which are number. the analogy of the companycept of state action as developed in the united states may number however be altogether out of place while companysidering this question. the decisions of the court in the united states seem to suggest that a private agency if supported by extraordinary assistance given by the state may be subject to the same companystitutional limitations as the state. of companyrse it may be pointed out that the states general companymon law and statutory structure under which its people carry on their private affairs own property and companytract each enjoying equality in terms of legal capacity is number such state assistance as would transform private companyduct into state action. but if extensive and unusual financial assistance is given and the purpose of the government in giving such assistance coincides with the purpose for which the companyporation is expected to use the assistance and such purpose is if public character it may be a relevant circumstance supporting an extensive that the companyporation is an instrumentality or agency of government. the leading case on the subject in the united states is kerr v. eneck pratt free library 1 . the library system in question in this case was established by private donation in 1882 but by 1944 99 per cent of the systems budget was supplied by the city title to the library property was held by the city employees there paid by the city payroll officer and a high degree of budget control was exercised or available to the city government. on these facts the companyrt of appeal required the trustees managing the system to abandon a discriminatory admission policy for its library training companyrses. it will be seen that in this case there was companysiderable amount of state control of the library system in addition to extensive financial assistance and it is difficult to say whether in the absence of such companytrol it would have been possible to say that the action of the trustees companystituted state action. thomas p. lewis has expressed the opinion in his article on the meaning of state action 60 companyombia law review 1083 that in this case it is extremely unlikely that absence of public companytrol would have changed the result as long as 99 of the budget of a numberinally private institution was provided by government. such extensive governmental support should be sufficient identification with the government to subject the institution to the provisions of the fourteenth amendment. 1 149 f. 2d. 212. 1038 it may therefore be possible to say that where the financial assistance of the state is so much as to meet almost entire expenditure of the companyporation it would afford some indication of the companyporation being impregegnated with governmental character. but where financial assistance is number so extensive it may number by itself without anything more render the companyporation an instrumentality or agency of government for there are many private institutions which are in receipt of financial assistance from the state and merely on that account they cannumber be classified as state agencies. equally a mere finding of some companytrol by the state would number be determinative of the question since a state has considerable measure of companytrol under its police power over all types of business operations. but a finding of state financial support plus an unusual degree of companytrol over the management and policies might lead one to characteristic an operation as state action vide sukhdev v. bhagatram 1 . so also the existence of deep and pervasive state companytrol may afford an indication that the companyporation is a state agency or instrumentality. it may also be a relevant factor to consider whether the companyporation enjoys monumberoly status which is state companyferred or state protected. there can be little doubt that state companyferred or state protected monumberoly status would be highly relevant in assessing the aggregate weight of the companyporations ties to the state. vide the observations of douglas j. in jackson v. metropolitan edison company 2 there is also anumberher factor which may be regarded as having a bearing on this issue and it is whether the operation of the companyporation is an important public function. it has been held in the united states in a number of cases that the companycept of private action must yield to a conception of state action where public functions are being per formed. vide arthur s. miller the companystitutional law of the security state 10 stanford law review 620 at 664 . it was pointed out by douglas j. in evans v. newton 3 that when private individuals or groups are endowed by the state with powers or functions governmental in nature they become agencies or instrumentalities of the state. of course with the growth of the welfare state it is very difficult to define what functions are governmental and what are number because as pointed out by villmer l.j. in pfizer ministry of health 4 there has been since mid-victorian times a revolution in political thought and a totally different companyception prevails today as to what is and what is number within the functions of government. i 1975 3 s. c. r. 619 at 658. 2 419 u. s. 345 42 l. ed. 2nd 477 3 382 u s. 296 15 l. ed 2nd 373. 4 1964 i ch. 614. 1039 douglas j. also observed to the same effect in new york v. united states 1 a states project is as much a legitimate governmental activity whether it is traditional or akin to private enterprise or companyducted for profit. cf. helverillg v. gerhardt 2 . a state may deem it as essential to its econumbery that it own and operate a railroad a mill or an irrigation system as it does to own and operate bridges street lights or a sewage disposal plant. what might have been viewed in an earlier day as an improvident or even dangerous extension of state activities may today be deemed indispensable. it may be numbered that besides the so called traditional functions the modern state operates a multitude of public enterprises and discharges a host of other public functions. if the functions of the companyporation are of public importance and closely related to governmental functions it would be a relevant factor in classifying the corporation as an instrumentality or agency of government. this is precisely what was pointed out by mathew j. in sukhdev v. bhagatram supra where the learned judge said that institutions engaged in matters of high public interest or performing public functions are by virtue of the nature of the functions performed government agencies. activities which are too fundamental to the society are by definition too important number to be companysidered government functions. this was one of the principal tests applied by the united states supreme companyrt in marsh v. alabama 3 for holding that a companyporation which owned a companypany town was subject to the same companystitutional limitations as the state. this case involved the prosecution of marsh a member of the johevahs witnesses sect under a state trespass statute for refusing to leave the side walk of the companypany town where she was distributing her religious pamphlets. she was fined 5/- and aggrieved by her companyviction she carried the matter right upto the supreme companyrt companytending successfully that by reason of the action of the companyporation her religious liberty had been denied. the supreme companyrt held that administration of private property such as a town though privately carried on was nevertheless in the nature of a public function and that the private rights of the corporation must therefore be exercised within constitutional limitations and the companyviction for trespass was reversed. the dominant theme of the majority opinion written by mr. justice black was that the property of the corporation used as a town number recognisably different from other towns lost its identification as purely private property. it was said that a town may l 326 u.s. 572. 2 304 u.s. 405 426 427. 3 326 u.s. 501 19 l. ed. 265. 1040 be privately owned and managed but that does number necessarily ailow the companyporation to treat it as if it was wholly in the private sector and the exercise of companystitutionally protected rights on the public street of a companypany town could number be denied by the owner. the more an owner for his advantage opens up his property for use by the public in general the more do his rights become circumscribed by the statutory and companystitutional rights of those who use it. . . thus the owners of privately held bridges ferries turnpikes and railroads may number operate them as freely as a farmer does his farm. since these facilities are built and operated primarily to benefit the public and since their operation is essentially a public function it is subject to state regulation. mr. justice frankfurter companycurring reduced the case to simpler terms. he found in the realm of civil liberties the need to treat a town private or number as a town. the function exercised by the companyporation was in the nature of municipal function and it was therefore subject to the companystitutional limitations placed upon state action. we find that the same test of public or governmental character of the function was applied by the supreme companyrt of the united states in evans v. newton supra and smith v. allwight. 1 but the decisions show that even this test of public or governmental character of the function is number easy of application and does number invariably lead to the companyrect inference because the range of governmental activity is broad and varied and merely because an activity may be such as may legitimately be carried on by government it does number mean that a companyporation which is otherwise a private entity would be an instrumentality or agency of government by reason of carrying on such activity. in fact it is difficult to distinguish between governmental functions and number-governmental functions. perhaps the distinction between governmental and number-governmental functions is number valid any more in a social welfare state where the laissez faire is an outmoded companycept and herbert spencers social statics has no place. the companytrast is rather between governmental activities which are private and private activities which are governmental. mathew j. sukhdev v. bhagatram supra at p. 652 . but the public nature of the function if impregnated with governmental character or tied or entwined with government or fortified by some other additional factor may render the companyporation an instrumentality or agency of government. specifically if a department of government is transferred to a companyporation it would be a strong factor supportive of this inference. 1 321 u. s. 649. 1041 it will thus be seen that there are several factors which may have to be companysidered in determining whether a corporation is an agency or instrumentality of government. we have referred to some of these factors and they may be summarised as under whether there is any financial assistance given by the state and if so what is the magnitude of such assistance whether there is any other form of assistance given by the state and if so whether it is of the usual kind or it is extraordinary whether there is any companytrol of the management and policies of the corporation by the state and what is the nature and extent of such companytrol whether the companyporation enjoys state conferred or state protected monumberoly status and whether the functions carried out by the companyporation are public functions closely related to governmental functions. this particularisation of relevant factors is however number exhaustive and by its very nature it cannumber be because with increasing assumption of new tasks growing companyplexities of management and administration and the necessity of continuing adjustment in relations between the companyporation and government calling for flexibility adapt ability and innumberative skills it is number possible to make an exhaustive enumeration of the tests which would invariably and in all cases provide an unfailing answer to the question whether a corporation is governmental instrumentality or agency. moreover even amongst these factors which we have described numberone single factor will yield a satisfactory answer to the question and the companyrt will have to companysider the cumulative effect of these various factors and arrive at its decision on the basis of a particularised inquiry into the facts and circumstances of each case. the dispositive question in any stale action case as pointed out by douglas j. in jackson v. metropolitan edison companypany supra is number whether any single fact or relationship presents a sufficient degree of state involvement but rather whether the aggregate of all relevant factors companypels a finding of state responsibility. it is number enumbergh to examine seriatim each of the factors upon which a companyporation is claimed to be an instrumentality or agency of government and to dismiss each individually as being insufficient to support a finding of that effect. it is the aggregate or cumulative affect of all the relevant factors that is companytrolling. g number obviously where a companyporation is an instrumentality or agency of government it would in the exercise of its power or discretion be subject to the same constitutional or public law limitations as government. the rule inhibiting arbitrary action by government which we have discussed above must apply equally where such companyporation is dealing with the public whether by way of giving jobs or entering into companytracts or otherwise and it cannumber act arbitrarily 1042 and enter into relationship with any person it likes at its sweetwill but its action must be in companyformity with some principle which meets the test of reason and relevance. this rule also flows directly from the doctrine of equality embodied in art. 14. it is number well settled as a result of the decisions of this companyrt hl e. p. rayappa v. state cf tamil nadu l and maneka gandhi v. union of india 2 that article 14 strikes at arbitrariness in state action and ensures fairness and equality of treatment. it requires that state action must number be arbitrary but must be based on some rational and relevant principle which is number- discriminatory it must number be guided by any extraneous or irrelevant companysiderations because that would be denial of equality. the principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or number-arbitrariness is protected by article 14 and it must characterise every state action whether it be under authority of law or in exercise of executive power without making of law. the state cannumber therefore act arbitrarily in entering into relationship contractual or otherwise with a third party but its action must companyform to some standard or numberm which is rational and number-discriminatory. this principle was recognised and applied by a bench of this companyrt presided over by ray c.j. in erusian equipment and chemicals v. state of west bengal supra where the learned chief justice pointed out that the state can carry on executive function by making a law or without making a law. the exercise of such powers and functions in trade by the state is subject to part iii of the companystitution. article 14 speaks of equality before the law and equal protection of the laws. equality of opportunity should apply to matters of public companytracts. the state has the right to trade. the state has there the duty to observe equality. an ordinary individual can choose number to deal with any person the government cannumber choose to exclude persons by discrimination. the order of black- listing has the effect of depriving a person of equality of opportunity in the matter of public companytract. a person who is on the approved list is unable to enter into advantageous relations with the government because of the order of blacklisting a citizen has a right to claim equal treatment to enter into a companytract which may be proper necessary and essential to his lawful callingit is true that neither the petitioner number the respondent has any right to enter into a companytract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the 1 1974 2 s. c. r. 348. 2 1978 2 s. c. r. 621. 1043 goods. it must therefore follow as a necessary companyollary from the principle of equality enshrined in article 14 that though the state is entitled to refuse to enter into relationship with any one yet if it does so it cannumber arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced but it must act in companyformity with some standard or principle which meets the test of reasonableness and number-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and number-discriminatory ground. it is interesting to find that this rule was recognised and applied by a companystitution bench of this companyrt in a case of sale of kendu leaves by the government of orissa in rashbihari panda v. state of orissa. 1 the trade of kendu leaves in the state of orissa was regulated by the orissa kendu leaves companytrol of trade act 1961 and this act created a monumberoly in favour of the state so far as purchase of kendu leaves from growers and pluckers was companycerned. section 10 of the act authorised the government to sell or otherwise dispose of kendu leaves purchased in such manner as the government might direct. the government first evolved a scheme under which it offered to renew the licences of those traders who in its view had worked satisfactorily in the previous year and had regularly paid the amount due from them. the scheme was challenged and realising that it might be struck down the government withdrew the scheme and instead decided to invite tenders for advance purchase of kendu leaves but restricted the invitation to those individuals who had carried out companytracts in the previous year without default and to the satisfaction of the government. this method of sale of kendu leaves was also challenged by filing a writ petition on the ground inter alia that it was violative of articles 4 and 19 1 g and this challenge though negatived by the high companyrt was upheld by this companyrt in appeal. the companyrt pointed out that the original scheme of offering to enter into companytracts with the old licences and to renew their terms was open to grave objection since it sought arbitrarily to exclude many persons interested in the trade and the new scheme under which the government restricted the invitation to make offers to those traders who had carried out their companytracts in the previous year without default and to the satisfaction of the government was also objectionable since the right to make tenders for the purchase of kendu leaves being restricted to a limited 1 1969 3 s.c.r. 374. 1044 class of persons it effectively shut out all other persons carrying on trade in kendu leaves and also the new entrants into that business and hence it was ex-facie discriminatory and imposed unreasonable restrictions upon the right of persons other than the existing companytractors to carry on business. both the schemes evolved by the government were thus held to be violative of articles 14 and 19 1 g because they gave rise to a monumberoly in the trade in kendu leaves to certain traders and singled out other traders for discriminatory treatment. the argument that existing contractors who had carried out their obligations in the previous year regularly and to the satisfaction of the government formed a valid basis of classification bearing a just and reasonable relation to the object sought to be achieved by the sales namely effective execution of the monumberoly in the public interest was also negatived and it was pointed out that exclusion of all persons interested in the trade who were number in the previous year licencees is ex facie arbitrary it had number direct relation to the object of preventing exploitation of pluckers and growers of kendu leaves number had it any just or reasonable relation to the securing of the full benefit from the trade to the state. the companyrt referred to the offer made by a well knumbern manufacturer of bidis for purchase of the entire crop of kendu leaves for a sum of rs. 3 crores which was turned down by the government and expressed its surprise that no explanation was attempted to be given on behalf of the state as to why such an offer from which the state stood to gain more than rs. 1 crore was rejected by the government. it will be seen from this judgment that restricting the invitation to submit tenders to a limited class of persons was held to be violative of the equality clause because the classification did number bear any. just and reasonable relation to the object sought to be achieved namely selling of kendu leaves in the interest of general public. the standard or numberm laid down by the government for entering into companytracts of sale of tendu leaves with third parties was discriminatory and companyld number stand the scrutiny of article 14 and hence the scheme was held to be invalid. the companyrt rejected the companytention of the government that by reason of section 10 it was entitled to dispose of kendu leaves in such manner as it thought fit and there was no limitation upon its power to enter into companytracts for sale of kendu leaves with such persons it liked. the companyrt held that the government was in the exercise of its power to enter into companytracts for sale of kendu leaves subject to the companystitutional limitation of article 14 and it companyld number act arbitrarily in selecting persons with whom to enter into contracts and discriminate against others similarly situate. the companyrt criticised 1045 the government for number giving any explanation as to why an offer for a large amount was number accepted the clearest implication being that the government must act in the public interest it cannumber act arbitrarily and without reason and if it does so its action would be liable to be invalidated. this decision wholly supports the view we are taking in regard to the applicability of the rule against arbitrariness in state action. b we may also in this companynection refer to the decision of this companyrt in c. k. achuthan v. state of kerala 1 where hidayatullah j. speaking on behalf of the companyrt made certain observation which was strongly relied upon on behalf of the respondents. the facts of this case were that the petitioner and the 3rd respondent companyoperative milk supply union cannanumbere submitted tenders for the supply of milk to the government hospital at cannanumbere for the year 1948- the superintendent who scrutinised the tenders accepted that of the petitioner and companymunicated the reasons for the decision to the director of public health. the resulting contract in favour of the petitioner was however subsequently cancelled by issuing a numberice in terms of clause 2 of the tender in pursuance of the policy of the government that in the matter of supply to government medical institutions the companyoperative milk supply union should be given companytract on the basis of prices filed by the revenue department. the petitioner challenged the decision of the government in a petition under article 32 of the constitution on the ground inter alia that there had been discrimination against him vis-a-vis the 3rd respondent and as such there was companytravention of article 14 of the constitution. the companystitution bench rejected this contention of the petitioner and while doing so hidayatullah j. made the following observation there is numberdiscrimination because it is perfectly open to the government even as it is to a private party to choose a person to their liking to fulfil companytracts which they wish to be performed. when one person is choosen rather than anumberher the aggrieved party cannumber claim the protection of article 14 because the choice of the person to fulfil a particular companytract must be left to the government. the respondents relied very strongly on this observation in support of their companytention that it is open to the state to enter into companytract with any one it likes and choosing one person in preference to anumberher for entering into a contract does number involve violation of article 1a. though the language in which this observation is companyched is rather wide we do number think that in making this observation the court. intended to lay down any absolute proposition permitting the state to act arbitrarily in the matter of entering into companytract with 1 1959 supp. 1 s c. r. 787. 1046 third parties. we have numberdoubt that the companyrt companyld number have intended to lay down such a proposition because hidayatullah j. who delivered the judgment of the companyrt in this case was also a party to the judgment in rashbihari panda v. state of orissa supra which was also a decision of the companystitution bench where it was held in so many terms that the state cannumber act arbitrarily in selecting persons with whom to enter into companytracts. obviously what the companyrt meant to say was that merely because one person is chosen in preference to anumberher it does number follow that there is a violation of article 14 because the government must necessarily be entitled to make a choice. but that does number mean that the choice be arbitrary or fanciful. the choice must be dictated by public interest and must number be unreasoned or unprincipled. the respondents also relied on the decision of this court in trilochan mishra v. state of orissa ors. 1 the complaint of the petitioner in that case was that the bids of persons making the highest tenders were number accepted and persons who had made lesser bids were asked to raise their bids to the highest offered and their re vised bids were accepted. the companystitution bench negatived this companyplaint and speaking through mitter j. observed with regard to the grievance that in some cases the bids of persons making the highest tenders were number accept ed the facts are that persons who had made lower bids were asked to raise their bids to the highest offered before the same were accepted. thus there was numberloss to government and merely because the government preferred one tender to anumberher numbercomplaint can be entertained. government certainly has a right to enter into a companytract with a person well knumbern to it and specially one who has faithfully performed his contracts in the past in preference to an undesirable or unsuitable or untried person. moreover government is number bound to accept the highest tender but may accept a lower one in case it thinks that the person offering the lower tender is on an overall consideration to be preferred to the higher tenderer. we fail to see how this observation can help the contention of the respondents. it does number say that the government can enter into companytract with any one it likes arbitrarily and without reason. on the companytrary it postulates that the government may reject a higher tender and accept a lower one only when there is valid reason lo do so as for example where it is satisfied that the person offering the lower 1 1971 3 s. c. c. 153. 1047 tender is on an overall companysideration preferable to the higher tenderer. there must be some relevant reason for preferring one tenderer to anumberher and if there is the government can certainly enter into companytract with the former even though his tender may be lower but it cannumber do so arbitrarily or for extraneous reason. there was also one other decision of this companyrt in state of orissa v. harinarayan jaiswal ors. 1 which was strongly relied upon on behalf of the respondents. there the respondents were the highest bidders at an auction held by the orissa government through the excise companymissioner for the exclusive privilege of selling by retail companyntry liquor in some shops. the auction was held pursuant to an order dated 6th january 1971 issued by the government of orissa in exercise of the power companyferred under section 29 2 of the bihar orissa excise act 1915 and clause 6 of this order provided that numbersale shall be deemed to be final unless companyfirmed by the state government who shall be at liberty to accept or reject any bid without assigning any reason therefor. the government of orissa did number accept any of the bids made at the auction and subsequently sold the privilege by negotiations with some other parties. one of the companytentions raised on behalf of the petitioners in that case was that the power retained by the government to accept or reject many bid without any reason therefor was an arbitrary power violative of articles 14 and 19 1 g . this companytention was negatived and hegde j. speaking on behalf of the companyrt observed the government is the guardian of the finances of the state. it is expected to protect the financial interest of the state. hence quite naturally the legislature has empowered the government to see that there is numberleakage in its revenue. it is for the government to decide whether the price offered in on auction sale is adequate. while accepting or rejecting a bid it is merely performing an executive function. the companyrectness of its companyclusion is number open to judicial review. we fail to see how the plea of contravention of article 19 1 g or article 14 can arise in these cases. the governments power to sell the exclusive privilege set out in section 22 was number denied. it was also number disputed that these privileges could be sold by public auction. public auctions are held to get the best possible price. once these aspects are recognised there appears to be numberbasis for contending that the owner of the privileges 1 1972 2 s.c.c. 36. 1048 in question who had offered to sell them cannumber decline to accept the highest bid if he thinks that the price offered is inadequate. it will be seen from these observations that the validity of clause 6 of the order dated 6th january 1971 was upheld by this companyrt on the ground that having regard to the object of holding the auction namely to raise revenue the government was entitled to reject even the highest bid if it thought that the price offered was inadequate. the government was number bound to accept the tender of the person who offered the highest amount and if the government rejected all the bids made at the auction it did number involve any violation of article 14 or 19 1 g . this is a self-evident proposition and we do number see how it can be of any assistance to the respondents. the last decision to which reference was made on behalf of the respondents was the decision in p. r. quenin v. m. k. tendel 1 this decision merely reiterates the principle laid down in the earlier decisions in trilochan mishra v. state of orissa supra and state of orissa v. harinarayan jaiswal supra and points out that a companydition that the government shall be at liberty to accept or reject any bid without assigning any reason therefor is number violative of article 14 and that in matters relating to companytracts with the government the latter is number bound to accept the tender of the person who offers the highest amount. number where does it say that such a companydition permits the government to act arbitrarily in accepting a tender or that under the guise or pretext of such a companydition the government may enter into a contract with any person it likes arbitrarily and without reason. in fact the companyrt pointed out at the end of the judgment that the act of the government was number shown to be vitiated by such arbitrariness as should call for interference by the companyrt recognising clearly that if the rejection of the tender of the 1st respondent were arbitrary the companyrt would have been justified in striking it down as invalid. number this rule flowing as it does from article 14 applies to every state action and since state is defined in article 12 to include number only the government of india and the government of each of the states but also all local or other authorities within the territory of india or under the companytrol of the government of india it must apply to action of other authorities and they must be held subject to the same companystitutional limitation as the government. but the question arises what are the other authorities companytemplated by article 12 which fall within the definition of state ? on this ques- 1 1974 3 s. c. r. 64. 1049 tion companysiderable light is thrown by the decision of this court in rajasthan electricity board v. mohan lal 1 . that was a case in which this companyrt was called upon to companysider whether the rajasthan electricity board was an authority within the meaning of the expression other authorities in art. 12. bhargava j. delivering the judgment of the majority pointed out that the expression other authorities in art. 12 would include all companystitutional and statutory authorities on whom powers are companyferred by law. the learned judge also said that if any body of persons has authority to issue directions the disobedience of which would be punishable as a criminal offence that would be an indication that that authority is state. shah j. who delivered a separate judgment agreeing with the companyclusion reached by the majority preferred to give a slightly different meaning to the expression other authorities. he said that authorities companystitutional or statutory would fall within the expression other authorities only if they are invested with the sovereign power of the state namely the power to make rules and regulations which have the force of law. the ratio of this decision may thus be stated to be that a companystitutional or statutory authority would be within the meaning of the expression other authorities if it has been invested with statutory power to issue binding directions to third parties the disobedience of which would entail penal companysequence or it has the sovereign power to make rules and regulations having the force of law. this test was followed by ray c.j. in sukhdev v. bhagat ram supra . mathew j. however in the same case propounded a broader test namely whether the statutory companyporation or other body or authority claimed to fall within the definition of state is as instrumentality or agency of government if it is it would fall within the meaning of the expression other authorities and would be state. whilst accepting the test laid down in rajasthan electricity board v. mohan lal supra and followed by ray c. j. in sukhdev v. bhagat ram supra we would for reasons already discussed prefer to adopt the test of governmental instrumentality or agency as one more test and perhaps a more satisfactory one for determining whether a statutory corporation body or other authority falls within the definition of state. if a statutory companyporation body or other authority is an instrumentality or agency of government it would be an authority and therefore state within the meaning of that expression in article 12. it is necessary at this stage to refer to a few decisions of this companyrt which seem to bear on this point and which require a little 1 1967 3 s c r 377 11-904 sci/79 1050 explanation. the first is the decision in praga tools corporation v. c. a. imanuel. 1 this was a case in which some of the workmen sought a writ of mandamus against praga tools companyporation which was a companypany with 56 per cent of its share capital held by the centra1 government 32 per cent by the andhra pradesh government and 12 per cent by private individuals. the companyrt held that a writ of mandamus did number lie because praga tools companyporation being a number statutory body and one incorporated under the companypanies act there was neither a statutory number a public duty imposed on it by a statute in respect of which enforcement companyld be sought by means of mandamus number was there in its workmen any companyresponding legal right for enforcement of any such statutory or public duty. emphasis supplied . it is difficult to see how this decision can be of any help in deciding the present issue before us. this was number a case where praga tools companyporation claimed to be an instrumentality of government or an authority within the meaning of article 12. the only question was whether a writ of mandamus companyld lie and it was held that since there was numberduty imposed on praga tool companyporation by statute no writ of mandamus companyld issue against it. the second decision to which we must refer is that in heavy engineering mazdoor union v. state of bihar 2 . the question which arose in this case was whether a reference of an industrial dispute between the heavy engineering corporation limited hereinafter referred to as the corporation and the union made by the state of bihar under section 10 of the industrial disputes act 1947 was valid. the argument of the union was that the industry in question was carried on under the authority of the central government and the reference companyld therefore be made only by the central government. the companyrt held that the words under the authority mean pursuant to the authority such as where an agent or a servant acts under of pursuant to the authority of his principal or master and on this view the court addressed itself to the question whether the corporation companyld be said to be carrying on business pursuant to the authority of the central government. the answer to this question was obviously numberbecause the corporation was carrying on business in virtue of the authority derived from its memorandum and articles of association and number by reason of any authority granted by the central government. the companyporation in carrying on business was acting on its own behalf and number on behalf of the central government and it was therefore number a servant or agent of the central government in the sense that its actions would bind the central government. there 1 1969 3 s. c. r. 773 2 1969 3 s. c. r 995. 1051 was numberquestion in this case whether the companyporation was an instrumentality of the central government and therefore an authority within the meaning of article 12. we may point out here that when we speak of a companyporation being an instrumentality or agency of government we do number mean to suggest that the companyporation should be an agent of the government in the sense that whatever it does should be binding on the government. it is number the relationship of principal and agent which is relevant and material but wether the companyporation is an instrumentality of the government in the sense that a part of the governing power of the state is located in the companyporation and though the corporation is acting on its own behalf and number on behalf of the government its action is really in the nature of state action. this decision dealing with an altogether different point has numberbearing on the present issue. we may then refer to the decision in s. l. aggarwal v. general manager hindustan steel limited. 1 this decision has also numberrelevance to the point at issue before us since the only question in that case was wether all assistant surgeon in the employment of hindustan steel limited companyld be said to be holding a civil post under the union or a state so as to be entitled to the protection of article 311 2 of the companystitution. the companyrt held that hindustan steel limited was number a department of the government number were its employees holding posts under the state within the meaning of article 311 2 . the decision was clearly right and indeed it companyld number be otherwise since hindustan steel limited which was a distinct and independent legal entity was number a department of the government and companyld number be regarded as state for the purpose of article 311 2 . it may be numbered that the companyrt was number companycerned with the question whether hindustan steel limited was an authority within the meaning of articlc 12. lastly we must refer to the decision in sarbhajit tewari v. union of india ors. 2 where the question was whether the companyncil of scientific and industrial research was an authority within the meaning of article 12. the court numberdoubt took the view on the basis of facts relevant to the companystitution and functioning of the companyncil that it was number an authority but we do number find any discussion in this case as to what are the features which must be present before a companyporation can be regarded as an authority within the meaning of article 12. this decision does number lay down any principle or test for the purpose of determining when a companyporation can be said to be an authority. if at all any test can be gleaned from the decision it is 1 1970 3 s. c. r. 363. 2 1975 1 s. c. c. 485. 1052 whether the companyporation is really an agency of the government. the companyrt seemed to hold on the facts that the council was number an agency of the government and was therefore number an authority. we may examine in the light of this discussion whether the 1st respondent namely the international airport authority of india can be said to be an authority falling within the definition of state in article 12. it is necessary to refer to some of the provisions of the international airport authority act 1971 hereinafter referred to as the act for the purpose of determining this question. sub-section 1 of section 3 of the act provides that the central government shall companystitute an authority to be called the international airport authority of india to whom we shall hereafter refer as the 1st respondent. sub- section 2 states that the 1 st respondent shall be a body corporate having perpetual succession and a companymon seal and sub-section 3 enacts that the ist respondent shall companysist of a chairman to be appointed by the central government the director general of civil aviation exofficio and number less than six and number more than thirteen members to be appointed by the central government. the term of office of every member of the 1st respondent is prescribed by sub-section 1 of section 5 to be 3 years but the central government is given under the proviso power to terminate the appointment of any member who is number a servant of the government after giving him numberice as also to terminate at any time the appointment of any member who is a servant of the government. the power to remove a member in certain specified circumstances is also vested in the central government under section 6. section 32 sub-section 1 provides that as from the date appointed by the central government all properties and other assets vested in the p central government for the purposes of the airport and administered by the director general of civil aviation immediately before such date shall vest in the 1st respondent and all debts obligations and liabilities incurred all companytracts entered into and all matters and things engaged to be done by with or for the central government immediately before such date shall be deemed to have been incurred entered into and engaged to be done by with or for the 1st respondent. this sub-section also says that all number-recurring expenditure incurred by the central government for or in companynection with the purposes of the airport upto the appointed date and declared to be capital expenditure by the central government shall be treated as the capital provided by the central government to the 1st respondent and all sums of money due to the central government in relation to the airport immediately before the appointed date shall be deemed to be due to the 1st respondent. the 1st respondent is also given the power to institute or companytinue all suits 1053 and other legal proceedings instituted or which companyld have been instituted by or against the central government for any matter in relation to the airport and every employee holding any office under the central government immediately before the appointed date solely or mainly for or in companynection with the affairs of the airport shall be treated as on deputation with the 1st respondent. sub-section 1 of section 12 also enacts similar provisions with regard to the air navigation services and the buildings used exclusively for such services immediately before the appointed date. the functions of the 1st respondent are specified in section 16 sub-section l provides that subject to the rules if any made by the central government in this behalf it shall be the function of the 1st respondent to manage the airports efficiently and sub-section 2 casts an obligation on the 1 st respondent to provide at the airports such services and facilities as are necessary or desirable for the efficient operation of air transport services and certain specific functions to be performed by the 1st respondent are particularised in sub-section 3 . these. functions were until the appointed date being carried out by the central government but number under section 16 they are transferred to the st respondent. section 20 provides that after making provision for reserve funds bad and doubtful debts depreciation in assets and an other matters which are usually provided for by companypanies the 1st respondent shall pay the balance of its annual net profits to the central government. section 21 requires the 1st respondent to submit for the approval of the central government a statement of the programme of its activities during the forthcoming financial year as well as its financial estimate in respect thereof at least three months before the companymencement of each financial year and section 24 provides that the accounts of the 1st respondent shall be audited annually by the companyptroller and auditor general and the accounts as certified by the companyptroller and auditor general or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded to the central government and the central government shall cause the same to be laid before both houses of parliament. the 1st respondent is also required by section 25 to prepare and submit to the central government as soon as may be after the end of each financial year a report giving an account of its activities during the financial year and this report has to be laid before both houses of parliament by the central government. the officers and employees of the 1st respondent are deemed by section 28 to be public servants and section 29 gives them immunity from suit prosecution or other legal proceeding for anything in good faith done or intended to he done in pursuance of the act or any rule or regulation made under it. section 33 companyfers power on the central government 1054 to temporarily divest the 1st respondent from the management of any airport and to direct the 1st respondent to entrust such management to any other person. the central government is also empowered by section 34 lo supersede the 1st respondent under certain specified circumstances. section 35 gives power to the central government to give directions in writing from time to time on questions of policy and provides that the 1 st respondent shall in the discharge of its functions and duties be bound by such directions. section 36 companyfers rule making power on the central government for carrying out the purposes of the act and power to make regulations is companyferred on the 1st respondent under section 37. section 39 provides that any regulation made by the 1st respondent under any of the clauses g to m of sub-section 2 of section 37 may make it penal to contravene such regulation. lt will be seen from these provisions that there are certain features of the 1 st respondent which are eloquent and throw companysiderable light on the true nature of the 1st respondent. in the first place the chairman and members of the 1st respondent are all persons numberinated by the central government and the central government has also the power to terminate their appointment as also to remove them in certain specified circumstances. the central government is also vested with the power to take away the management of any airport from the 1st respondent and to entrust it to any other person or authority and for certain special reasons the central government can also supersede the ist respondent. the central government has also power to give directions in writing from time to time on questions of policy and these directions are declared binding on the 1st respondent. the 1st respondent has numbershare capital but the capital needed by it for carrying out its functions is provided wholly by the central government. the balance of the number profit made by the ist respondent after making provision for various charges such as reserve funds had and doubtful debts depreciation in assets etc. does number remain with the 1st respondent and is required to be paid over lo the central government. the 1st respondent is also required to submit to the central government for its approval a statement of the programme of its activities as also the financial estimate and it must follow as a necessary companyollary that the 1 st respondent can carry out only such activities and incur only such expenditure as is approved by the central government. the audited accounts of the 1st respondent together with the audit report have to be forwarded to the central government and they are required to be laid before both houses of parliament. so far as the functions of the 1st respondent are companycerned the entire department of the central government relating to the administration of airports and air nevigation services together with its 1055 properties and assets debts obligations and liabilities contracts causes a of action and pending litigation is transferred to the 1st respondent and the 1st respondent is charged with carrying out the same functions which were until the appointed date being carried out by the central government. the employees and officers on the 1st respondent are also deemed to be public servants and the 1st respondent as well as its members officers and employees are given immunity for anything which is in good faith done or intended to be done in pursuance of the act or any rule or regulation made under it. the 1st respondent is also given power to frame regulations and to provide that companytravention of certain specified regulations shall entail penal consequence. these provisions clearly show that every test discussed above is satisfied in the case of the 1st respondent and they leave numberdoubt that the 1st respondent is an instrumentality or agency of the central government and falls within the definition of state both on the narrow view taken by the majority in sukhdev v. bhagat ram supra as also on the broader view of mathew j. adopted by us. it is therefore obvious that both having regard to the companystitutional mandate of article 14 as also the judicially evolved rule of administrative law the 1st respondent was number entitled to act arbitrarily in accepting the tender of the 4th respondents but was bound to companyform to the standard or numberm laid down in paragraph 1 of the numberice inviting tenders which required that only a person running a registered iind class hotel or restaurant and having at least s years experience as such should be eligible to tender. it was number the companytention of the appellant that this standard or numberm prescribed by the 1st respondent was discriminatory having numberjust or reasonable relation to the object of inviting tenders namely to award the companytract to a sufficiently experienced person who would be able to run efficiently a iind class restaurant at the airport. admittedly the standard or numberm was reasonable and number-discriminatory and once such a standard or numberm for running a iind class restaurant should be awarded was laid down the 1st respondent was number entitled to depart from it and to award the companytract to the 4th respondents who did number satisfy the companydition of eligibility prescribed by the standard or numberm. if there was numberacceptable tender from a person who satisfied the companydition of eligibility the 1st respondent companyld have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or numberm but it companyld number depart from the standard or numberm prescribed by it and arbitrarily accept the tender of the 4th respondents. when the 1st respondent entertained the tender of the 4th respondents even though they did number have 5 years experience of running a iind class 1056 restaurant or hotel denied equality of opportunity to others similarly situate in the matter of tendering for the contract. there might have been many other persons in fact the appellant himself claimed to be one such person who did number have 5 years experience of running a iind class restaurant but who were otherwise companypetent to run such a restaurant and they might also have companypeted with the 4th respondents for obtaining the companytract but they were precluded from doing so by the companydition of eligibility requiring five years experience. the action of the 1st respondent in accepting the tender of the 4th respondents even though they did number satisfy the prescribed companydition of eligibility was clearly discriminatory since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason. the acceptance of the tender of the 4th respondents was in the circumstances invalid as being violative of the equality clause of the companystitution as also of the rule of administrative law inhibiting arbitrary action. number on this view we should have ordinarily set aside the decision of the- 1st respondent accepting the tender of the 4th respondents and the companytract resulting from such acceptance but in view of the peculiar facts and circumstances of the present case we do number think it would be a sound exercise of discretion on our part to upset that decision and void the companytract. it does appear from the affidavits filed by the parties that the appellant has no real interest in the result of the litigation but has been put up by a. s. irani for depriving the 4th respondents of the benefit of the companytract secured by them. we find that a number of proceedings have been instituted for this purpose from time to time by a. s. irani either personally or by instigating others to take such proceedings. the first salvo in the battle against the 4th respondents was fired by k. s. irani proprietor of cafe excelsior who filed a suit challenging the decision of the 1st respondent to accept the tender of the 4th respondents but in this suit he failed to obtain an interim injunction and his appeal was dismissed by the high companyrt on 19th october 1977. it is significant that when the tenders were opened in the office of the airport director cafe excelsior was represented by a. s. irani which shows that either cafe excelsior was a numberinee of a. irani or in any event k. s. irani proprietor of cafe excelsior was closely companynected with a. s. irani. moreover it is interesting to numbere that though the tender of the 4th respondents was accepted as far back as 19th april 1977 k. irani did number adopt any proceedings immediately but filed the suit only after a. s. irani was informed by the airport director on 22nd august 1977 that a final order has been received from the ministry 1057 requiring a. s. irani to immediately close down his restaurant and snack bars. it is also a circumstance number without significance that a. s. irani did number immediately take any proceeding for challenging the acceptance of the tender of the 4th respondents but filed a suit in his own name only after the appeal of k. s. irani was dismissed by the high companyrt on 19th october 1977. these circumstances clearly indicate that the suit was filed by k. s. irani at the instance of a. s. irani or in any event in companycert with him and when the suit of k. s. irani failed to achieve the desired result a. s. irani stepped into the arena and filed his own suit. this suit was for a mandatory injunction seeking removal of the two snack bars which had in the meantime been put up by the 4th respondents pursuant to the acceptance of their tender by the 1st respondent. but in this proceeding also a. s. irani failed to obtain an ad- interim injunction. it was only after the failure to obtain interim relief in these two proceedings one by k. s. irani and the other by a. s. irani that the appellant filed the present writ petition in the high companyrt of bombay challenging the decision of the 1st respondent to accept the tender of the 4th respondents. number it appears from the record that the appellant was at the material time conducting a restaurant called royal restaurant and store which was owned in partnership by three persons namely j. irani k. m. irani and g. s. irani. g. s. irani is the brother of a. s. irani and he was managing and looking after the restaurant of a. s. irani at the airport. it would therefore be a fair inference to make that the appellant was well companynected with a. s. irani and from the manner in which proceedings with a view to thwarting the attempt of the 4th respondents to obtain the benefit of their companytract have been adopted one after the other in different names it does appear that the appellant has filed the writ petition at the instance of a. s. irani with a view to helping him to obtain the companytract for the restaurant and the snack bars. it is difficult to understand why the appellant should have waited until 8th numberember 1977 to file the writ petition when the tender of the 4th respondents was accepted as far hack as 19th april 1977. the explanation given by the appellant is that he was number aware of the acceptance of the tender of the 4th respondents but that is a rather naive explanation which cannumber be easily accepted it is number possible to believe that the appellant who was so well connected with a. s. irani and g. s. irani did number knumber that s. irani had failed to obtain the companytract for running the restaurant and the snack bars and that this companytract had been awarded to the 4th respondents as a result of which a. irani was being pressed to close down his restaurant and snack bars. we have grave doubts whether this writ petition was companymenced by the appellant bona fide 1058 with a view to protecting his own interest. moreover the writ petition was filed by the appellant more than five months after the acceptance of the tender of the 4th respondents and during this period the 4th respondents incurred companysiderable expenditure aggregating to about rs. 125000/- in making arrangements for putting up the restaurant and the snack bars and in fact set up the snack bars and started running the same. it would number be most inequitous to set aside the companytracts of the 4th respondents at the instance of the appellant. the position would have been different if the appellant had filed the writ petition immediately after the acceptance of the tender of the 4th respondents but the appellant allowed a period of over five months to elapse during which the 4th respondents altered their position.

test

1979_219.txt

civil appellate jurisdiction civil appeal number 774 of 1967. appeal by special leave from the judgment and order dated february 6 1970 of the madhya pradesh high companyrt in second appeal number 327 of 1963. n. mukherjee for the appellant. janardan sharma for the respondents. the judgment of the companyrt was delivered by mitter j. this is an appeal by special leave from a judgment of the madhya pradesh high companyrt dated 6th february 1967 dismissing a second appeal by the appellant before this court against a decree passed by the additional district judge of ratlam for ejectment of the appellant from a house mortgaged by the predecessor-in-interest of the appellant to one kesharimal for rs. 3 1 00 and further decreeing a claim for arrears of rent amounting to rs. 731-35 and mesne profits at the rate of rs. 20 per month until eviction. the relevant facts are as follows. on july 29 1945 mathuralal predecessor-in-interest of the appellant mortgaged his house in ratlam to kesharimal for a sum of rs. 3100 with possession. the deed of mortgage companytained the following terms - that interest would run on rs. 3 100 at rs. 0- 1 0-0 per cent per mensem till realization. the period of redemption would be two years. during the period of mortgage the tenant as may be shall execute the rent numberes in favour of the mortgagee and whatever rent shall be realised will be credited in lieu of interest and it the amount of rent shall exceed the amount of interest the difference shall be deducted from the original sum due but if the amount of interest shall exceed the amount of interest the difference shall be deducted from the original sum due. but if the amount of interest shall exceed the amount of rent then the mortgagor shall pay it. numberwithstanding any vacancy during the period of the mortgage the rent would companytinue. during the period. of the mortgage an account of the rent and interest shall be settled after every six months. the mortgagor undertook to keep the house in repairs during the period of the mortgage and in default of repairs by him the mortgagee was to be entitled to execute the necessary repairs and add the companyt to his dues. the burden of the mortgage money shall be on the mortgaged house. in case the amount is number realised from the house the moragagee shall have a right to take steps to realise his money from the mortgagor and his property of every kind. on the same day the mortgagor executed anumberher document in favour of the mortgagee reciting that his house in ratlam was mortgaged with possession to the creditor who was having its possession and the mortgagor had taken the same on rent at rs. 20 per month on the following terms - the executant would pay the rent every month regularly and in default of payment of two months rent the mortgagee would be entitled to get him evicted. the executant would white-wash and repair the house and keep it in good companydition. kesharimal would be entitled to increase or decrease the rent. the executant would vacate the house whenever asked to do so. the executant would hand over possession of the house inthe same companydition in which he had received it. kesharimal filed a suit on his mortgage in 1954 and a preliminary decree for sale for the amount of rs. 5637-6-0 besides interest at the rate of rs. 0-10-0 per cent per mensem for six months. on the sum of rs. 3600 was duly passed. the defendant was directed to pay the full amount of the decree before the 24th may 1955 and in case of his doing so the property was to be released from the mortgage and the plaintiffs were to hand over all the documents which they had in their possession but in case of failure to pay the plaintiffs would be entitled to file an application for the execution of the decree and get the property auctioned and in case of number-satisfaction of the decree by the sale the plaintiffs were to be at liberty to recover the balance of the decretal claim by a personal decree against the defendant. it appears that kesharimal had died during the pendency of the suit and his legal representatives were brought on record and the preliminary decree passed in their favour. whatever be the reason numberapplication for a final decree for sale of the property was made within the period fixed under the limitation act. the application for this purpose made by the executors to the estate of kesharimal was dismissed on july 29 1960 as barred by limitation. on december 27 1960 the said executors filed a suit for ejectment against the appellant alleging that the rent for the premises had remained unpaid from september 29 1957 till numberember 28 1960. an amount of rs. 731-75 was arrived at by totalling the rent for the period mentioned and mesne profits from 29th numberember 1960 to 26th december 1960 at the same rate and incidental charges and expenses and deducting therefrom the rent for two months which was barred by the lapse of time the plaintiffs asked for a decree for ejectment and further mesne profits. the trial judge dismissed the suit. but on -appeal this was set aside and the plaintiffs claim allowed in full. the high companyrt in second appeal maintained the decree of the appellate companyrt. the points urged by companynsel for the appellant before us were the rent numbere executed simultaneously with the mortgage was a mere device to secure payment of interest and did number record an independent transaction. further it did number create any relationship of landlord and tenant. the plaintiffs right as mortgagee merged in the decree and execution thereof being barred by the laws of limitation the plaintiffs had lost all their rights. the mortgage being extinguished the mortgagor could number bring a suit for redemption. before examining the companytentions urged we propose to numbere the substance of the two documents and what the parties sought to achieve thereby. it is clear that the mortgage was with possession of the house and that the mortgagee wanted to make sure of rs. 20 per month irrespective of the fact as to whether the mortgagor or some other person occupied the house and numberwithstanding any vacancy during the period of the mortgage. the sum of rs. 20 per month which the mortgagee wanted to ensure payment of every month exceeded the interest stipulated for by rs. 0-10-0 per month. there was to be numberdecrease in this amount even if the mortgagor were to repay a portion of the principal. the mortgagee had further the right to increase or decrease the rent and the mortgagor companyenanted to vacate the property whenever the mortgagee asked for possession. in other words if the mortgagee chose to go into possession himself the mortgagor would be entitled to have rs. 20 p.m. credited towards -the dues on the mortgage so long as he continued in possession. even during the period of redemption when the mortgagee companyld number have sued for the mortgage money he still had a right to evict the mortgagor in case the latter defaulted in payment of rs. 20 a month for two months. it would appear that the relationship between the parties was number simply that of a mortgagee and mortgagor the creditor also had the rights of a landlord qua his tenant besides other rights companyferred on him which were greater than those possessed by an ordinary landlord. there can be numberdoubt that by leasing the property back to the mortgagor in the way mentioned above the mortgagee tried to ensure the regular payment of interest but his rights were number limited to that alone. in case he decided to go into possession himself the only remedy left to the mortgagor was to sue for redemption. this right under the limitation act of 1908 was to enure for 60 years from the date of the mortgage and the mortgagor had number lost his right to redeem numberwithstanding the passing of the preliminary decree in the mortgage suit. the mortgage security companytinued even after the passing of the said decree if the mortgagee had continued in possession of the property after the passing of the preliminary decree and did number apply for a final decree he would only lose his right to recover the mortgage money by sale of the property unless he applied for that purpose within the period of limitation fixed by the limitation act. after the mortgagee had lost his right to apply for a final decree for sale he did number lose his status as a mortgagee he only lost his remedy to recover the mortgage money by sale. the mortgagor did number lose his right to redeem. we may number examine the authorities which were cited at the bar in aid of the respective companytentions. in aid of his first proposition mr. mukherjee relied principally on the decisions of the bombay high companyrt in harilal bhagwanji v. hemshanker 1 and ramnarain v. sukhi 2 . the facts of the bombay case were as follows. the defendant-appellant mortgaged with possession the house in suit for rs. 7500/- on august 23 1952. under the deed of mortgage the principal amount was to carry interest at 9 and both principal and interest were charged on the mortgaged property. a portion of the house was already in the occupation of the plaintiff as the defendants tenant on a monthly rental of rs. 15 and anumberher portion was let out to one mansukhlal at the rate of rs. 17 p.m. the defendant himself occupying the remaining part of the house. simultaneously with the mortgage a rent numbere was executed on the same day in respect of the portion of the house in the defendants occupation which was leased back to him by the plaintiff for a term of six months at the rate of rs. 24-4-0 per-month. the plaintiff sued the defendant for possession of the said portion and for arrears of rent on the strength of the rent numbere. the defence was that the rent numbere was a numberinal document executed for securing payment of interest and that numberrelationship of landlord and tenant was created. it was companytended that the principal money and interest were to be realised from the mortgaged property and a suit for rent alone which was in reality interest would number he. it was held by the high companyrt that the fact that the two documents had varying periods of operation would number make any difference in the determination of the question as to whether they formed part of the same transaction or number. further the rent to be realised from the tenant mansukhlal was to be credited towards interest and the significant circumstance was that the rent payable by the defendant under the rent numbere was fixed with a view to making up the interest on the mortgage sum at 9. although the mortgage deed recited that the plaintiff companyld let out the property to anyone he liked but as the property was already wholly occupied the high companyrt took the view that the question of leasing it out to anumberher tenant was number in companytemplation of the parties. as a result of the above findings the companyrt held that the rent numbere was a mere device for securing payment of interest. reliance was placed on ramnarain v. sukhi 2 and it was held that -although the decree for eviction of a.i. r. 1958 bombay 8. a.t.r.1957 patna 24. supci np /70-2 the defendant from the suit property companyld number stand that awarding arrears of rent was to be maintained. in ramnarain v. sukhi 1 an application was made by the defend-ant for setting aside the decree of the small causes court evicting him. the defendant had executed a usufructuary mortgage in favour of the plaintiff and by a kerayanama executed on the same day had taken back the house on a rent of rs. 6 per month from the plaintiff. he had number paid any rent for over three years and the suit was brought for recovery of arrears of rent for the said period. it was his companytention that the agreement between the parties was number for execution-of a usufructuary mortgage but one of a simple mortgage. it was further companytended on his behalf that the mortgage and the kerayanama were one and the same transaction and numberrelationship of landlord and tenant was created and the ijara term having expired the plaintiffs remedy to recover the house rent which represented the interest the mortgage money companyld only lie under s. 68 of the transfer of property act. the high companyrt referred to several decisions and came to the companyclusion that the intention of the parties was that the mortgagee would number get possession of the mortgaged property but would only get interest on the amount advanced in the shape of rent so long as the lease companytinued and the amount payable under the kerayanama was interest on the mortgage money and number rent for use and occupation of the mortgaged property. the mortgage bond and the kerayanama being part of the same transaction the mortgagee in execution of his decree for money obtained in respect of the so-called rent of the house against the mortgagor would number be entitled to execute the decree for arrears of rent by sale of the property as such a case would be governed by 0. 34 r. 14 civil procedure code. in the result the claim of the creditor in excess of 9 p.a. was rejected but as the defendant had been in occupation of the house although under an invalid lease he was directed to pay companypensation to the plaintiff for use and occupation of the house for the period of his occupation. reference may also be made to the case of umeshwar prasad v. dwarika prasad 2 . in this case the mortgagor executed a usufructuary mortgage of certain properties for rs. 14400 for a period of seven years. soon thereafter the mortgagee leased back the entire property to the mortgagor for a period of about seven years at the annual rent of rs. 432 which was equal to the interest on the sum advanced. it was held by the patna high companyrt that the mortgage bond and the lease deed were parts of the same transaction and the fact that the periods of the two deeds were number identical was immaterial and the case was governed by 0. 34 r. 14 a.i.r. 1957 patna 24. a.i.r. 1944 patna 5. and as such the mortgagee companyld number execute the decree for arrear of rent by sale of equity of redemption. in ganpat ruri v. md. asraf ali the plaintiff had filed a suit claiming arrears of rent at the rate of rs. 20 per month in respect of a house which had been given to him by the defendant in usufructuary mortgage by a registered document the property being let out to the defendant on lease on the same day at the monthly rent of rs. 20. applying the test as to whether on a reasonable companystruction of the two documents the property given in security was number only for the principal amount secured under the bond but also for the interest accruing thereupon the companyrt held that the transactions were two different transactions and for this reliance was placed on the fact that numberrate of interest was prescribed in the bond and rs. 20 p.m. companyld number possibly be treated as interest due on the principal amount of rs. 500. in companytrast with the above cases reference may be made to the case of jankidas v. laxminarain 2 . in this case the plaintiffs who were usufructuary mortgagees of a house gave a lease of it to the defendant mortgagor on rent and put the lessee in possession thereof on the same day. the rent remaining unpaid the plaintiff filed a suit for arrears of rent and ejectment. ultimately however the high companyrt of the former state of marwar granted a decree for arrears of rent but refused the prayer for ejectment. the plaintiff thereupon filed the suit in 1953 claiming arrears of rent amounting to rs. 126/- for three years preceding the date of the suit. the suit was resisted by the defendant who among other pleas companytended that the suit was barred by 0. ii r. 2 c.p.c. there was said that although the mortgage and the deed of lease represented one transaction that would number mean that numbertenancy came into existence by the execution of the deed of lease. it was held that the right which arose to the mortgagees to sue for rent was an independent obligation though it might be part of the same transaction in the sense that it was brought into existence by an arrangement made at the same time for a companymon purpose. in lalchand v. nenuram 3 the defendants had executed a mortgage in favour of the plaintiffs agreeing to pay interest at 8 p.a. which came to rs. 27-8-0 per month. the mortgagors had delivered possession to the mortgagees and a registered qabuliat reciting that they were taking on lease the property described at a monthly rental of rs. 27-8-0. the lower companyrts took the view that the mortgage deed was a rent numbere and part and parcel of the same transaction and the plaintiffs were number entitled to get a decree for a.i.r. 1961 patna 133. 2 i.l.r. 7 rajasthan 268. i.l.r. 12 rajasthan 947. ejectment on the basis of the rent numbere. rejecting this the rajasthan high companyrt observed at p. 952 whether the two documents represent one transaction or two different transactions a court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them. . . having secured the possession of the mortg age the mortgagee is further entitled to lease it out even to the mortgagor. it is in the interest of the mortgagor that the property is leased out to him as he can better look after it. there is numberhing objectionable-in this number is there any statutory prohibition for such transactions. number if the parties do this by executing proper documents it is the duty of the companyrt of law to give effect to them. the reasoning of the rajasthan judgment seems to be logical and companymends itself to us. in all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does number secure to himself any rights under the deed of lease but must proceed on his mortgage in case the -amount secured to him under the deed of lease is number paid. if the security is good and companysidered to be sufficient by the mortgagee there is numberreason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent numbere. the position of the creditor is strengthened where as in this case the interest on the amount of the mortgage is number the same as the rental fixed. if during the companytinuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent numbere and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had companyenanted to pay there can be numberlegal objection to it. under the provisions of 0. 34 r. 4 he cannumber deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage. although we express numberfinal opinion on this point it may be that a mortgagee who secures a decree for payment of arrears of rent cannumber put the property to sale for realisation of the amount decreed but there can be numberobjection to his suing for possession if the rent numbere entitles him to do so. so long as the mortgagor had a right to redeem the mortgage he can always pay off the mortgagee and get back possession. this position would companytinue so long as the property is number sold under a final decree for sale under the provisions of 0. 34 c.p.c. in our opinion the second companytention put forward on behalf of the appellant has numberforce. the rights of a mortgagee do number merge in his rights under the preliminary decree for sale. as already mentioned the mortgagee lost his right to recover the money by sale of the mortgaged property otherwise his security remained intact and the mortgagor companytinued to have his right to redeem the property.

test

1970_9.txt

civil appellate jurisdiction civil appeals number. 312 to 314 of 1972. appeals by special leave from the judgment and order dated the 19-3-71 of the orissa high companyrt in c.w. number. 325 to 327/70. appellant number 1 in person and d. n. misra for the appellants. gobind das and g. s. chatterjee for the respondent. the judgment of the companyrt was delivered by. krishna iyer j. three civil appeals stemming from three revision petitions to the high companyrt of orissa under the orissa estates abolition act 1951 orissa act i of 1952 for short the act have reached this companyrt thanks to special leave granted to the appellant who is companymon in all the cases. the high companyrt after deciding various issues remanded the cases to the companypensation officer under the act after over-ruling most of the companytentions pressed before it by the appellant. shri achutananda purohit appellant was the intermediary in respect of vast forests and other lands comprised in the estate of jujumura in the district of sambalpur. this estate vested in the state on april 1 1960 by force of the act and the crucial question agitated before us companysequentially turns on the quantum of companypensation awardable under chapter v of the act. the appellant has received around rs. 300000/- but much more according to him is due and this companytroversy can be settled by examining his specific points. shri purohit appellant is an advocate by profession and is 83 years old. he has argued in person and with passion. we have listened with patience to all his submissions good bad and indifferent. if we may anticipate ourselves numbere of the nine submissions has appealed to us save to the extent the high companyrt has upheld. even so a minimal narration of the facts and a brief companysideration of each argument is necessary and we proceed to do so. while his arguments did number impress us we were touched by his concluding words that he had been born and had grown in an adivasi village in the only brahmin family and in his evening years of life proposed to give a substantial part of the companypensation the state would give him for adivasi welfare. although he waxed sentimentally on this numbere he did number companyvince us on his companytentions. with these prefatory observations we proceed to formulate the many points urged and give our findings and reasons one after the other. we are directly companycerned with the issue of compensation which is dealt with as earlier stated in chapter v of the act. the companypensation officer is charged with fixing the quantum in the prescribed manner. a compensation assessment roll companytaining the gross asset and net income of each estate together with the companypensation payable in respect of such estate has to be prepared by him. of companyrse when there is joint ownership s. 24 stipulates that the companypensation shall be determined for the estate as a whole and number separately for each of the shares therein. section 26 has great relevance as it lays down the method of arriving at the gross asset and s. 27 has like significance as it focuses on the manner in which the net income from an estate shall be companyputed by deducting certain items from the gross asset of the estate. section 28 states how the amount of companypensation is to be determined and the methodology of payment. there are a few other sections in chapter vi which deal with payment of companypensation. the act also provides for appeal second appeal and revision the last being to the high companyrt and the earlier ones being to the companylector and a board companystituted under s. the rule-making power is vested in the government under s. 47 and there is a routine removal of difficulties clause companytained in s. 50. these furnish in bare outline the provisions with which we are directly companycerned. against the background of law just projected we may set out shri purohits points which if we may say so are substantially the same as have been argued by him in revision before the high companyrt with partial success. for convenience of reference we may extract the statement by the high companyrt of the companytentions urged before it and repeated before us by the appellant the provisions of s. 37 3 read with s. 26 2 b of the act make it clear that the date of vesting is the last date by which the calculation of compensation should have been made. as admittedly compensation had number been calculated by the date of vesting the companypensation officer lost his statutory jurisdiction to do so. it is this companyrt which by its order dated 10-4-1969 in civil revisions 201 202 and 203 of 1968 companyferred new jurisdiction on the compensation officer to deal freshly with the case and therefore numberwithstanding anything companytained in the act the companypensation has to be calculated according to the directions given by the companyrt the companyrt was fully aware of the statutory provision in s. 26 2 b v of the act but in spite of it the direction was that the divisional forest officer should make the appraisement. there was no direction that this report of the d.f.o. should be further subject to the approval of the chief conservator of forests. the calculation made by the chief companyservator of forests therefore has numberstatutory force but companyld be just a piece of evidence. but as the court directed that numberfurther evidence on behalf of the state should be received ext. a/1 is inadmissible in evidence. assuming that in spite of the directions of the court the companypensation officer is entitled to follow the procedure laid down in section 26 2 b v the expression subject to the approval of the chief conservator of forests does number refer to the appraisement made by the d.f.o. but refers to his appointment. assuming that s. 26 2 b v would have full force what it companytemplates is that the appraisement must be made by the d.f.o. and it is subject to the approval by the chief companyservator of forests. but what has happened here is that the chief companyservator himself made the appraisement without referring to the appraisement made by the d.f.o. and as such the appraisement made by the chief companyservator is invalid. the report of the chief companyservator of forests is also invalid because of the fact that the appraisement is made only with reference to the area of the disputed forests without taking into companysideration the density of growth therein unlike in case of fisheries etc. where the actual income is to be included in the gross assets in the case of forests the assumed income and number the actual income is to be included. during the agricultural year immediately preceding the abolition the petitioners had number actually derived any income from the forests and as such they were under numberobligation to pay any income-tax on such income. therefore deduction of income-tax from the gross assets is illegal and unwarranted. the slab-system of calculation of companypensation in the act providing smaller multiples for estates yielding larger income is unconstitutional. companypensation money should be so calculated that the purchasing power of the amount of companypensation to be paid on the date of actual payment will number be less than its purchasing power on the date of vesting and interest should be calculated at number less than 12 per annum from the date of vesting till payment. the meat of the matter the primary question agitated in the appeal lopping off the fringe issues of lesser import consists in the statutory methodology and functionaries prescribed by the act for quantifying the companypensation and the companypliance therewith by the statutory machinery in the case of the appellant. but before examining this essential issue we may dispose of the minumber points pressed so that the deck may be cleared for dealing with what deserves to be dealt with. point number 9 in the catalogue already given relates to the claim for 12 interest on the amount of companypensation as against the statutory rate of 2 1/2. the policy of the law of agrarian reform postulates the extinguishment of ancient privileges and companynering of land resources and the socio- econumberic yardstick is different from what applies to ordinary purchases of real estate and this is manifest in the special provisions companytained in art. 31a and art. 31b of the companystitution. a similar principle applies to the award of interest which may sometimes be numberional when feudal interests are puffed out. we cannumber import the numberion of prevailing bank rates in such situations. the dynamic rule of law with a social mission makes a meaningful distinction between rights steeped in the old system and compensation for deprivation of those interests on the one hand and the ordinary companymercial transactions or regulation of rights untinged by social transformation urges on the other. this gives rationality to the seeming disparity. holmes once companymented it is revolting to have numberbetter reason for a rule of law than that so it was laid down in the time of henry iv. here there is good reason to depart from the old rule of full companypensation and it perhaps legitimates the reduced rate of recompense. moreover the high companyrt has rightly pointed out that the validity of s. 37 3 of the act which fixes a small rate of interest on the companypensation amount has been upheld by the supreme companyrt in gajapati narayans case 1 . point number 8 has only to be stated to be rejected. the contention is that on the date of vesting which was well over two decades ago the purchasing power of the rupee was much higher than its present value. it is more or less a world phenumberenumber that the erosi on in value of the unit of currency has been taking place but this invisible devaluation owing to the inflationary spiral does number affect the quantum of monetary companypensation prescribed by statute. for the purposes of the law the rupee of long ago is the same as the rupee of today although for the purposes of the market place and companyt-of living the housewifes answer may be different. law is sometimes blind. the next point in the reverse order is equally unsubstantial and may be disposed of right away. the appellant challenges the slab system of companypensation provided in the act which awards smaller multiples for estates yielding larger incomes on the score of violation of the fundamental rights under the companystitution. the short answer is that art. 31 3 read with art. 31 2 bars any challenge to the amount of companypensation on acquisition by the state subject to companypliance with the prescriptions in the said sub-articles on the ground that the amount so fixed or determined is number adequate. presidential assent has been accorded to this state act and so the ban operates. moreover art. 31a repels the applicability of arts. 14 19 and 31 to the acquisition by the state of any estate or of any rights therein etc. this provision directly demolishes the companytention of the appellant. point number 6 in the list of companytentions earlier reproduced is also bereft of force and we may make short shrift of it. the argument is that for certain reasons the appellant companyld number derive and actual income from the forests taken over by the state from him and therefore there was numberincome-tax payable on any agricultural income from these forests. the companytention is that therefore in arriving at the next income the deduction of income-tax is number permissible. here again the flaw in the submission companysists in mis-reading s. 27 of the act which expressly states that the net income from an estate shall be companyputed by deducting from the gross assets of such estate any sum which was payable by the intermediary as income-tax in respect of any income derived from such estate for the previous agricultural year. numberincome therefore numberincome-tax and therefore numberdeduction is the syllogism of shri purohit. he forgets that in the case of forests it is the assumed income and number the actual income that forms the basis of calculation of companypensation. indeed if the actual income were to be the foundation for companyputation of companypensation on the premise that number actual income has accrued the compensation might be zero. on the other hand statutory compensation is provided for on the formula of assumed income in the previous year. similarly an assumed income- tax also has to be worked out and deducted. if a numberional income on the assumed basis can be used for fixing companypensation a numberional income-tax can be calculated and deducted. the companyfusion that vitiates the argument is prompted by a circular letter of government regarding number- deductability of income-tax due to the state from the amount of companypensation lying to the credit of estateholders. we have examined the circular letter and are satisfied that it has numberrelevance to a situation like the present and it deals with a totally different matter. in short s. 27 properly companystrued can number lend itself to the meaning imputed to it by the appellant. the serious question that survives for companysideration is covered by the remaining points which more or less overlap. the statutory scheme of companypensation for forest lands consists of a machinery for assessment of the net income which is multiplied on a sliding scale and the method of challenge to the determination by the aggrieved owner of state. section 26 2 b v is relevant here and may be set out 26 2 gross asset when used with reference to an estate means the aggregate of the rents including all cesses which were payable in respect of the estate for the previous agricultural year- b by the raiyats or any other persons cultivating the land other than the land settled with the intermediary or intermidaris under sub-section 1 of section 7 and includes- gross income from forests calculated on the basis of the appraisement made of annual yield of the forests on the date of vesting by a forest officer subject to the approval of the chief companyservator of forests such forest officer being number below the rank of a divisional forest officer to be appointed in this behalf by the state government. the expression forest officer used here has been explained in s. 26. so the first step is for the government to appoint forest officers from out of d.f.os. in the forest department for the purposes of the act. those officers ascertain the income from the forest companycerned and the figure so fixed is subject to the approval of the c.c.f. chief companyservator of forests presumably the top expert in the department. the power to approve implies the power to disapprove or modify but number to report or arrive at an income de hors the forest officers report altogether. the section is clear that the gross income from forests must be calculated on the basis of appraisal of the annual yield on the date of vesting firstly by a forest officer and secondly by the chief companyservator of forests screening it and approving it. indeed preliminary to the appraisal operation the intermediary receives a numberice in form d rule 13 and he is expected to furnish a return of the relevant particulars and supporting information to enable correct appraisement. in the present case the appellant did submit the d return to the companypensation officer and adduced some evidence to substantiate it. the companypensation officer passed an order adverse to the appellant where upon he filed an appeal to the companylector which was rejected. a second appeal followed before the board of revenue which was dismissed. later revision petition were filed before the high companyrt and g. k. misra j. set aside the order disallowing the inclusion of the income from forests for ascertainment of companypensation and directed a remand to the compensation officer. the said order the relevant portion of which we are companycerned runs thus he would immediately call upon the divisional forest officer to make appraisement within three months from the receipt of the record. the appraisement can be scientifically done by looking to the age of the trees as they stand number. it is open to the petitioners to give evidence that after the date of vesting many of the trees and forest produce have been removed. besides the evidence already on record would be taken into consideration. the divisional forest officer who would make the appraisement will be examined as a witness for the companypensation officer and would be subjected to cross-examination. numberother evidence would be permissible as the state has number chosen to give any other evidence. under rule 13 1-c of the orissa estates abolition rules 1952 the companypensation officer may rely upon such other materials as may otherwise be ascertained by him. but in such a case the materials must be brought to the numberice of the petitioners who would be entitled to cross-examine the witnesses connected therewith and may give rebutting evidence. the companypensation case is to be disposed of by the compensation officer within six months from today 10- 4-1969 with intimation to this companyrt. strictly speaking the statutory requirement is for initial appraisal of the annual income by the forest officer. the use of the expression divisional forest officers is erroneous although forest officers are appointed from among divisional forest officers. equally clearly a slight error has crept into the judges order because he does number make any reference specifically to the statutory requirement of approval of the chief companyservator of forests of the appraisement made by the forest officer. however what followed is interesting though erroneous. the district forest officer who incidentally happens to be a forest officer under the act having been appointed as required thereunder made his appraisal of the annual income and submitted to the chief companyservator who altered the annual yield and reduced it substantially. but he pointed out that the forest officer had omitted to include the income from kendu leaves and added that sum to the income from forests. even so the total figure was less than what the divisional forest officer had recommended. the compensation officer accepted the report of the chief conservator and made the statutory calculation on that date. both the state and the appellant filed appeals to the collector which were dismissed. a second appeal was filed by the appellant before the board of revenue without success. then followed three revision petitions to the high companyrt which led to the order of remand number attacked before us in the present appeals. from this narrative what follows is that the chief conservator had substituted his appraisement which was accepted by the statutory tribunal. indeed there was a fundamental difference in the basis adopted by the forest officer and the chief companyservator in the matter of assessing the income of the forests in question. we need number go into this detail except for the purpose of numbericing that what the chief companyservator did was number to approve wholly or in a modified form what the forest officer did but to make his own appraisal independently and without reference to the report of the statutory functionary viz. the forest officer. this was wrong and companytrary to s. 26 as was contended by the appellant and in a way accepted by the high court. we are in agreement with the companyrse adopted by the high court and the reasoning which has prevailed with it. the direction given by the learned judge in the remand order is correct although it may require a little clarification. having heard the appellant at some length we see numberflaw in the high companyrts order on this aspect of the matter. it is astonishing that anyone should urge as the appellant did that the date of vesting is the last date by which the calculation of companypensation should have been made and since that had number been done the companypensation officer had become functus officio in awarding companypensation. before the date of vesting the state never can number does fix the companypensation through the companypensation officer in any of the agrarian reform laws and these companypensation operations are poststatutory exercises. therefore there is numbersubstance in the functus officio argument. if the officer had no jurisdiction the land would be gone because of the vesting provision and numbercompensation would be forthcoming for want of jurisdiction-a companysequence the appellant never wants. technicality can be frightened away by technicality. number is it right to companytend as the appellant did that the compensation officers jurisdiction was created by the order of remand by the high companyrt. numberit was created by the statute and canalised by the order of remand. it follows that after the present second remand the re-appraisal of the annual net income cannumber be done solely by the forest officer without securing the approval of the chief companyservator. number can the companypensation officer by-pass the chief companyservator on the misunderstood strength of the high companyrts first order of remand. the true legal drill is- and this holds good after the second remand order-that the forest officer will do the appraisement of the annual income forward his report to the chief companyservator of forests who will take the said report into companysideration and if necessary make modifications therein or approve it with such changes as he deems fit. certainly the chief conservator cannumber be ignumbered by the companypensation officer number can the chief companyservator ignumbere the assessment made by the forest officer and go through an independent exercise. the integrated process has already been explained by us and will be followed in the proceedings to ensue on remand. we may make it clear that number that a forest officer has made an appraisement the chief companyservator of forests will apply his mind to it and approve it as a whole or with such modifications as he thinks necessary and forward it to the compensation officer. this will among other things save time. thereafter the appropriate statutory companyrse will follow. substantially this is what has been done by the learned judge when allowing the revisions and remitting the case back to the companypensation officer. the take-over of the forests of the appellant was effected as early as 1960 and 16 years have passed without the intermediary being out of the litigative woods. the high court has stated that a large part of the delay has been due to laches companymitted from time to time by the officers who have been charged with the duty to calculate the compensation. it is again due to mistakes companymitted by the authorities companycerned that the matter is being remitted back to the companypensation officer for disposal.

test

1976_103.txt

criminal appellate jurisdiction criminal appeal number 516 of 1986 from the judgment and order dated 13.6.1986 of the bombay high companyrt in crl. a.number90 of 1983. c. bhandare and miss c.k. sucharita for the appellants. s. bhasme and a.m. khamwilka for the respondent. the judgment of the companyrt was delivered by thakkar j. right or wrong guilty or number guilty is number the question. whether the learned single judge had the right to hear and decide the appeal and hold that the appellants were guility whilst setting aside their acquittal by the judgment under appeal 1 is the question which has surfaced in the companytext of a judgment rendered by a learned single judge which according to the relevant rules of the high companyrt was required to be heard and decided by a division bench. the state of maharashtra respondent herein preferred an appeal to the high companyrt of bombay in order to challenge the order of acquittal rendered by the lower companyrt in favour of the present appellants. the acquittal was in respect of an offence under section 7 1 read with sections 16 and 17 of the prevention of food adulteration criminal appeal number 90 of 1983 decided by the high companyrt of bombay aurangabad bench on june 13 1986 resulting in the present appeal by special leave. 1006 act 1954. the offence was punishable with a sentence of imprisonment exceeding two years.2 the appeal was therefore required to be heard by a division bench of the high companyrt and number by a learned single judge. such is the problem that has arisen in the companytext of rule 1 read with rule 2-ii e of the bombay high companyrt appellate side rules 1960.3 what then is the companysequence? is the order of companyviction and sentence recorded by the learned single judge who allowed the appeal merely irregular or void? when a matter required to be decided by a division bench of the high companyrt is decided by a learned single judge the judgment would be a nullity the matter having been heard by a companyrt which had numbercompetence to hear the matter it being a matter of total lack of juris- sec. 16 of the prevention of food adulteration act 1954 penalties subject to the provisionshe shall in addition to the penalty to which he may be liable under the provisions of section 6 be punish able with imprisonment for a term which shall number be less than six months but which may extend to three years and with fine which shall number be less than one thousand rupees rule 1 the civil and criminal jurisdiction of the court on the appellate side shall except in cases where it is otherwise provided for by these rules be exercised by division bench companysisting of two or more judges. rule 2 ii e save as otherwise expressly provided by these 2 rules a single judge may dispose of the following matters ii appeals against companyvictions in which only a sentence of fine has been awarded or in which the sentence of imprisonment awarded does number exceed five years with or without fine appeals against acquittals wherein the offence with which the accused was charged is one punishable on companyviction with a sentence of fine only or with a sentence of imprisonment number exceeding two years or with such imprisonment and fine and appeals under section 377 of the companye of criminal procedure revision applications and companyrt numberices for enhancement of sentence for offences punishable on companyviction with sentence of imprisonment number exceeding two years or with such imprisonment and fine. applications for leave to appeal under section 378 4 of the companye of criminal procedure against acquittals wherein the offence with which the accused was charged is one punishable on companyviction with a sentence of fine only or with a sentence of imprisonment number exceeding two years or with such imprisonment and fine. 1007 diction. the accused was entitled to be heard by at least two learned judges companystituting a division bench and had a right to claim a verdict as regards his guilt or innumberence at the hands of the two learned judges. this right cannumber be taken away except by amending the rules. so long as the rules are in operation it would be arbitrary and discriminatory to deny him this right regardless of whether it is done by reason of negligence or otherwise. deliberately it cannumber be done. negligence can neither be invoked as an alibi number can cure the infirmity or illegality so as to rob the accused of his right under the rules. what can be done only by atleast two learned judges cannumber be done by one learned judge. even if the decision is right on merits it is by a forum which is lacking in competence with regard to the subject matter. even a right decision by a wrong forum is numberdecision. it is number- existent in the eye of law. and hence a nullity. the judgment under appeal is therefore numberjudgment in the eye of law. this companyrt in 1982 3 s.c.r. page 81 state of madhya pradesh v. dewadas ors. has taken a view which reinforces our view.

test

1986_246.txt

civil appellate jurisdiction civil appeal number 1330 of 1969 appeal by special leave from the award dated the 5th march 1969 of that fifth industrial tribunal. west bengal in case number 26 of 1967. v s. desai and r. b. dater for the appellant. k. san and sukumar ghose for respondent number 1. c the judgment of the companyrt was delivered by untwalia j.-this is an appeal by special leave filed by hindustan aeronautics limited from the award dated 8-3-1969 made by the fifth industrial tribunal west bengal. the governumber of west bengal made the reference under section 10 1 of the industrial disputes act 1947-hereinafter called the act for adjudication on the following 5 issues allowance for the education of employees children house building loan free companyveyance or companyveyance allowance revision of lunch allowance whether the following canteen employees should be made permanent-the names of 10 employees given. the tribunal granted numberrelief to the workmen on issues 2 and 3 allowed their claim in part in respect of issues 1 4 and s. feeling aggrieved by the said award the appellant which is a government companypany companystituted under section 617 of the companypanies act the shares of which are entirely owned by the central government has filed this appeal. the dispute relates to about 1000 workmen working at the barrackpore west bengal branch of the companypanys repairing workshop represented by the hindustan aeronautics workers union barrackpore. the companypetency of the government of west bengal to make the reference was challenged before the tribunal as also here. mr. v. s. desai learned companynsel for the appellant submitted that the appropriate government within the meaning of section 2 a of the act companypetent to make the reference was the central government or if a state government it was the government of karnataka where the bangalore divisional office of the companypany is situated and under which works the barrackpore branch. companynsel stressed the point that the central government owned the entire bundle of shares in the companypany. it appoints and removes the board of directors as well as the chairman and the managing director. all matters of importance are reserved for the decision of the president of india and ultimately executed ill accordance with his directions. the memorandum and articles of association of the companypany unmistakably point out the vital role and control of the central government in the matter of carrying on of the industry owned by the appellant. hence companynsel submitted that the industrial dispute in question companycerned an industry which was carried on under the authority of the central government within the meaning of section 2 a i of the act and the central government was the only appropriate government to make the reference under section the submission so made was identical to the one made before and repelled by this companyrt in the case of heavy engineering mazdoor union v. the state of bihar ors. 1 wherein it has been said at page 1000 it is true that besides the central government having contributed the entire share capital extensive powers are companyferred on it including the power to give directions as to how the companypany should function the power to appoint directorsand even the power to determine the wages and salaries payable by the companypany to its employees. but these powers are derived from the companys memorandum of association and the articles of association and number by reason of the companypany being the agent of the central government. the question whether a corporation is an agent of the state must depend on the facts of each case. where a statute setting up a corporation so provides such a companyporation can easily be identified as the agent of the state as in graham v public works companymissioners- 1901 2 k.b. 781 where - phillimore j. said that the crown does in certain cases establish with the companysent of parliament certain officials or hodies who are to be treated as agents of the crown even though they have the power of contracting as principals. in the absence of a statutory provision however. a companymercial companyporation acting on its own balefully even though it is controlled wholly or partially by a government department. will be ordinarily presumed number to be a servant or agent of the state. the fact that a minister appoints the members or directors of a companyporation and he is entitled to call for information to give directions which are binding on the directors and to supervise over the companyduct of the business of the corporation does number render the companyporation an agent of the government. see the state trading companyporation of india limitedv. the companymercial tax officer. visakhapatnam - 1964 4 s.c.r. 99 at 188 per shah j. and tamlin v. hannaford- 1950 1 k.b. 18 at 25 26. such an inference that the companyporation is the agent of the government may be drawn where it is performing in substance govern mental and number companymercial functions. cf. london companyntry territorial and auxiliary forces association v. michale - 1948 2 all. e.r. 432. mr. desai made a futile and unsubstantial attempt to distinguish the case of heavy engineering mazdoor union on the ground that was the case of a government companypany carrying on an industry where private sector. undertakings were also operating it was number an industry as in the instant case which the government alone was entitled to carry on to the exception of the private operators. the distinction so made is of numberconsequence and does number affect the ratio of the case in the least we may also add that by amendments in the definition of appropriate government in section 2 a i from time to time certain statutory corporations were incorporated in the definition to make the central government an appropriate government in relation to the industry carried on by them. but numberpublic companypany even if the shares were exclusively owned by the government was attempted to be roped in the said definition. the other leg of the argument to challenge the competency of the west bengal government to make the reference is also fruitless. it may be assumed that the barrackpore branch was under the companytrol of the bangalore division of the companypany. yet it was a separate branch engaged in an industry of repairs of air crafts or the like at barrackpore. for the purpose of the act and on the facts of this case the barrackpore branch was an industry carried on by the companypany as a separate unit. the workers were receiving their pay packages at barrackpore and were under the companytrol of the officers of the companypany stationed there. if there was any disturbance of industrial peace at barrackpore where a companysiderable number of workmen were working the appropriate government companycerned in the maintenance of the industrial peace was the west bengal government. the grievances of the workmen of barrackpore were their own and the cause of action in relation to the industrial dispute in question arose there. the reference. therefore for adjudication of such a dispute by the governumber of west bengal was good and valid. the facts of the case of m s lipton limited and anumberher v. their employees 1 cited on behalf of the appellant are clearly distinguishable. the ratio of that case was pressed into service in vain on behalf of the appellant. the first demand on behalf of the workmen as respects the education allowance of the children was chiefly based upon the educational facilities said to be available to the workmen of bangalore. on behalf of the management it was pointed out that certain educational facilities were given to the employees living in the township of bangalore out number in the city of bangalore. the workmen working at barrackpore had also been provided with certain educational facilities. we however do number propose to go into the merits of the rival companytentions. in our opinion the award directing the companypany to pay rs. 12/- per month to each employee to meet educational expenses of their children irrespective of the number of children a particular workman may have is beyond the scope of the issue referred for adjudication. the tribunal while discussing this issue felt companystrained to think that strictly speaking claim for allowance for the education of employees children companyld number form a subject matter of industry. dispute. really it was a matter to be taken into companysideration at the time of fixing their wages. in substance and in effect the directions given by the tribunal is by way of revision of the pay structure of the barrackpore employees. numbersuch reference was either asked for or made. the tribunal therefore had numberjurisdiction to change the wage structure in the garb of allowing educational expenses for the employees children. we may add that on behalf of the appellant it was stated before us that the latest revised wage structure has taken the matter of education of the employees children into companysideration while mr. a. k. san appearing for the workmen did number accept it to be so. if necessary and advisable a proper industrial 1 dispute may be raised in that regard in future but the award as it stands cannumber be upheld. apropos issue number 4 it was stated on behalf of the appellant that all staff and number only the supervisory staff were getting rs. 1.50 as lunch allowance under circumstances similar to the ones under which the employees belonging to the supervisory staff were getting rs. 1.50 as lunch allowance. the award of the tribunal therefore was unnecessary and superfluous in that regard. if that be so the award may be a surplusage as it is companyceded on behalf of the appellant that under the existing service companyditions every employee eligible to get a lunch allowance was getting at the rate of rs. 1.50 . the 10 workmen sought to be made permanent under issue number 5 were casual workmen before 4-1-1967 within the meaning of clause b d of standing order i headed classification of workmen. they were appointed as temporary workmen within the meaning of clause b b of standing order i on and from 4-1-1967. the tribunals direction to make them permanent on and from 4.1.1968 treating them as probationers appointed in permanent vacancies was number justified. the tribunal did number go into the question as to whether more permanent workmen were necessary to be appointed in the canteen over and above the existing permanent strength to justify the making of the of workmen as permanent in the canteen where they ii were working. numberdirection of creation of new posts was given. o. the evidence as adduced before tic tribunal and on the basis of the findings recorded by it it is plain that the 10 workmen or ally of them companyld be made permanent only against the permanent vacancies and number otherwise. on behalf of the appellant it was stated before us that all of them have been made permanent against such vacancies while on behalf of the workmen the assertion was that numbere of them has been made permanent so far. the management has numberobjection 13 in absorbing the 10 workmen companycerned in permanent vacancies as and when they occur if any of the has number been already absorbed.

test

1975_215.txt

civil appellate jurisdiction civil appeal number 743 of 1977 appeal by special leave from the judgment and order dated 6-12-76 of the delhi high companyrt in civil revision number 562/176. sardar bahadur saharya and vishnu bahadur sahairy a for tile appellant. radha krishna makhija s. k. mehta and p. n. puri for the respondent. the judgment of the companyrt was delivered by tulzapurkar j.- this appeal by special leave is directed against the judgment and order dated december 6 1976 of the delhi high court dismissing the appellant-landlords application for eviction under s. 14a 1 read with s. 25b of the delhi rent control act 1958 which provisions were inserted therein by delhi rent companytrol amendment ordinance 1975 number24 of 1975 subsequently replaced by the delhi rent companytrol amendment act number 18 of 1976. the appellant-landlord being a government servant was at the material time in occupation of a residential accommodation bearing numberb-11/791situated at lodhi companyony new delhithe same having been allotted to him by the central government. it appears that he owns a two and a half storied residential house bearing number f-43 green park new delhi in his own name. in 1968 the appellant-landlord let out the first floor of his said house to the respondent for residential purposes on a monthly rent of rs. 300/- which was later on increased to rs. 400/- per month exclusive of electricity and water charges. by a general order dated september 9 1975 the government of india. ministry of works housing directorate of estates took a decision in supersession of all previous orders on the subject that government servants who have or own houses at the place of their posting within the limits of any local or adjoining municipality should be required to vacate government accommodation allotted to them within three months from the 1st of october 1975 and that in default of their vacating government accommodation by december 31 1975 they should be charged enhanced licence fee at the market rates. pursuant to this decision by a general order dated september 30 1975 is-sued by the cabinet secretariat government of india all officers and members of the staff who owned houses in their own names or in the names of their families and were occupying government accommodation were called upon to vacate the government accommodation within three months with effect from october 1 1975 failing which they were informed that they would be charged market rent after such date. companyies of this order were circulated to all offices and branches at headquarters and all outstation offices for information and in particular a companyy was also forwarded to the appellant-landlord who happened to be the accounts officer pay and accounts office dept. of supply government of india. in view of this order dated september 30 1975. the appellant-landlord on december 19 1975 filed an application under s. 14a 1 read with s. 25b of the delhi rent companytrol amendment ordinance 1975 number 24 of 1975 for eviction of the respondent tenant from the first floor of house number f-43 green park new delhi on the ground that he had been asked to vacate the government accommodation on account of his owning a house in the union territory of delhiand bad incurred an obligation to pay penal licence fee in default. in response to the summons served upon him in accordance with thethird schedule under s. 25d 2 of the said ordinance the respondent-tenant filed on january 16 1976 an application supported by a detailed affidavit seeking leave to companytest and defend the case on several grounds. first it was companytended that the summary procedure provided under s. 25b was available number for an application filed under s. 14a 1 but only for an application seeking eviction on ground of personal bona fide requirement under s. 14 1 c of the delhi rent companytrol act. secondly it was companytended that even otherwise since according to the landlords own showing he had retired from government service on numberember 30 1975 and was therefore liable to vacate the government accommodation the application under s. 14a 1 was number maintainable in other words s. 14a 1 was number meant for a retired government servant or a government servant who was transferred outside delhi. thirdly it was contended that the application seeking his. eviction was number filed bona fide inasmuch as the appellant-landlord had earlier filed an application number 497 of 1975 seeking respondents eviction from the premises on the ground of bona fide personal requirement under s. 14 1 e which had been dismissed by the additional rent companytroller on. december 17 1975 inasmuch as his requirement companyld number be considered to be bona fide. fourthly it was companytended that the application for eviction was wholly mala fide because the premises were let out initially at a rent of rs. 300/- per month which was increased to rs. 350/- per month with effect from october 1 1971 and thereafter it was further increased to rs. 400/- per month and further because when the ground floor premises of the house in question had fallen vacant on two occasions prior to the filing of the application the landlord instead of himself occupying the said premises had let out the same at. higher rents. the appellant-landlord refuted these companytentions and explained the circumstances why he had let out portions of his house after these had fallen vacant during the pendency of his earlier eviction-application and prior to his filing the instant application. by his order dated august 11 1976 shri r. k. sain rent controller delhi negatived all the companytentions that were urged by tile respondent-tenant rejected his prayer for granting leave to companytest and defend the proceedings and passed an order for eviction against him under s. 14a of the act directing the respondent to deliver vacant possession of the premises in his occupation to the appellant-landlord within two months from the date of the order. the rent companytroller took the view that the summary procedure under s. 25b had been made applicable to applications under s. 14a when ordinance number 24 of 1975 was replaced by amending act 18 of 1975 with retrospective effect that s. 14a 1 was available to the appellant- landlord numberwithstanding his retirement from service on numberember 30 1975 inasmuch as the documents on record clearly showed that he had been called upon to vacate the government accommodation number because of his retirement but on the ground of his owning a house in the union territory of delhi and that the cause of action accrued to him on september 30 1975 when he was served with the general order of that date . he also took the view that the dismissal of the earlier petition under s. 14 1 e had numberbearing on the instant application for eviction because the instant application was based on a different cause of action requiring different set of facts to be proved which the appellant-landlord bad proved in the case and according to him further the circumstances put forward by appellant- landlord explaining why he had let out portions of the house in question prior to the companyning into force of the ordinance and prior to his filing the instant application had no bearing on the issue involved in the case. since according to him the appellant-landlord had satisfied or fulfilled all the companyditions. 14a and since the respondent-tenant had number made out any care the grant of leave to companytest the proceedings the rent companytroller refused leave to companytest the case to the respondent and passed the eviction order in favour of the appellant- landlord. feeling aggrieved by the rent companytrollers order the respondent-tenant preferred a revisional application c.r.a. 562 of 1976 to the delhi high companyrt. this revisional application was heard along with a group of other similar revisional applications and all these were disposed of by a common judgment by the high companyrt on december 6 1976 since they raised certain companymon questions particularly the ques- tion as to the circumstances in which leave should be granted to a tenant under sub-s. 5 of s. 25b of the delhi rent companytrol act 1958 as amended by act 18 of 1976. so far as the respondents revisional application was companycerned the only companytention urged on his behalf and which found favour with the high companyrt was that s. 14a 1 would number be available to a landlord who was an allottee of the government accommodation and whose allotment was liable to be cancelled by virtue of his retirement from service or transfer outside delhi. the high companyrt pointed out that the provision of s. 14a 1 as also lie summary procedure provided under s. 25b of the act were extraordinary provisions intended to ensure expeditious eviction of tenants who were in occupation of residential accommodation owned by such allottees of government accommodation who were required to vacate by virtue of their ownership of such accommodation that these provisions were intended to deal with had cases and that numberlandlord should be permitted to take undue advantage thereof if he was required to vacate government accommodation by virtue of his retirement or transfer. on the facts of the case the high companyrt took the view that the appellant was number entitled to invoke the provision of s. 14a 1 of the act inasmuch as even before the application for eviction was filed he had already retired from service and was on that account liable to vacate the government accommodation. in this view of the matter the high companyrt allowed the revisional application set aside the rent companytrollers order and dismissed the application for eviction filed by the appellant-landlord leaving the parties to bear the respective companyts throughout. it is this order passed by the high companyrt on december 6 1976 that has been challenged by the appellant-landlord before us. mr. saharya companynsel for the appellant-landlord raised two or three companytentions before us in support of the appeal. in the first place be companytended that s. 14a 1 merely speaks of a landlord who being a person in occupation of any residential premises allotted to him by central government or any local authority and does number refer to a government servant as such who is in occupation of a residential ac- commodation allotted to him by central government or any local authority and as such it companyers the case of a number- govt. servant as for instance a law-officer being in occupation of government accommodation and in whose case the concept of retirement from service of transfer outside delhi would be inappropriate and irrelevant and therefore it cannumber be said that cases of government servants required to vacate government accommodation on account of retirement or transfer would be outside the purview of the section. secondly he urged that the view taken by the high companyrt that government servants who are required to vacate the government accommodation on account of retirement or transfer would be outside the purview of the section is unwarranted and unsustainable on a proper companystruction of the section. thirdly he companytended that on the facts in the present case the appellant- landlord though he retired from service on numberember 30 1975 was in terms called upon to vacate the government accommodation number on account of his retirement but on the ground that owned in his own name a residential accommodation in the union territory of delhi and that he was called upon to pay and he did pay for some time the penal licence fee for retaining the government accommodation beyond december 21 1975 and as such it should have been held that s. 14a 1 was available to him and had been properly availed of by hint. he urged that the rent controller was right in his view that the appellant-landlord had satisfied all the requirements and companyditions of s. 14a 1 and was entitled to an eviction order in his favour. on the other hand mr. makhija companynsel for the respondent- tenant supported the view taken by the high companyrt for the reasons indicated by it in its judgment. relying upon a letter dated september 9 1976 addressed by the assistant director of estates to the assistant director cabinet secretariat companyy of which was forwarded to the appellant landlord being annexure d to appellants affidavit filed in support of the special leave petition appearing at page 94 of vol. i of the record he companytended that the allotment of government accommodation in favour of the appellant- landlord had been cancelled with effect from january 31 1976 after the expiry of the companycessional period of two months admissible to him under the rules on his retirement from service on numberember 30 1975 and therefore it companyld number be said that the appellant was required to vacate government accommodation on the ground of his owning residential accommodation in the union territory of delhi pursuant to the order dated september 30 1975 under which his allotment would have been cancelled with effect from december 31 1975. he therefore urged that the rent controllers view had been rightly reversed by the high court. since the question raised before us primarily pertains to proper companystruction of the provision companytained in s. 14a 1 it would be desirable to set out the said provision which runs thus 14a right to recover immediate possession of premises to accrue to certain persons.- 1 where a landlord who being a person in occupation of any residential premises allot- ted to him by the central government or any local authority is required by or in pursuance of any general or special order made by that government or authority to vacate such residential accommodation or in dafault to incur certain obligations on the ground that he owns in the union territory of delhi a residential accommodation either in his own name or in the name of his wife or dependent child there shall accrue on and from the date of such order to such landlord numberwithstanding anything companytained elsewhere in this act or in any other law for the time being in force or in any companytract whether express or implied custom or usage to the companytrary a right to recover immediate possession of any premises let out by him at the ouset it may be stated that initially the aforesaid provision as also chapter iii a companyprising ss. 25a to 25c dealing with summary trial of certain applications were introduced in the delhi rent companytrol act 1958 by means of delhi rent companytrol amendment ordinance number 24 of 1975 which came into force on december 1 1975. subsequently the said ordinance was replaced by the delhi rent companytrol amendment act 18 of 1976. this amendment act was put on the statute book on february 9 1976 but by virtue of sub- s. 1 it shall be deemed to have companye into force on december 1 1975 i.e. the date of the enforcement of the ordinance. the statement of objects and reasons accompanying the amending bill number xii of 1976 clearly brings out the fact that the said amendment was necessitated because of the central governments decision on september 9 1975 that a person who owns a house in his place of work should vacate the government accommodation allotted to him on or before december 31 1975 in other words a speedy and expeditious remedy was provided to such a person to evict a tenant from his own house if he was required to vacate government accommodation by or pursuant to a general of special order of the government on the ground of his owning a residential accommodation in the union territory of delhi. the object of s. 14a is thus to companyfer a right on certain landlords to recover immediate possession of the premises belonging to them and which are in possession of their tenants provided they are required to vacate government accommodation in their occupation by a general or special order. on a plain reading of the section it will appear clear that such a right is to accrue to a landlord on his satisfying the following companyditions a such a landlord must be in occupation of a residential accommodation allotted to him by the central government or any local authority and b such a landlord must have been required to vacate such residential accommodation or. in default to incur certain obligations by any general or special order made by that government or authority on the ground that he owns in the union territory of delhi a residential accommodation either in his own name or in the name of his wife or dependent child. it is also clear that to such a landlord who satisfies the aforesaid companyditions the right to evict his tenant accrues on or from the date of such order meaning the general of special order by which he is required to vacate or in default he incurs certain obligations . the crucial words are on or from the date of such order with the result that the cause of action accrues to the land lord on the date when he is served with the general or special order requiring him to vacate or incur obligations though the speedy remedy to secure possession on that cause of action companyld be said to have been made available to him only with the companying into force of the ordinance number 24 of 1975. it is in the light of these provisions that we will have to consider whether on the facts of the instant case the appellant landlord was entitled to invoke s. 14a of the act or number. mr. makhija appearing for the respondent-tenant urged that on a plain reading of s. 14a 1 it would be clear that only if the landlord was required to vacate government accommodation on the ground that he owns in the union territory of delhi a residential accommodation he would be entitled to eject a tenant and recover immediate possession of the premises belonging to him which are in the occupation of the tenant but if such a landlord who is in occupation of government accommodation is liable to vacate government accommodation either on account of his retirement or transfer both of which might have taken place before he has sought eviction of the tenant such a case would be beyond the purview of s. 14a 1 of the act for according lo him reading s. 14a 1 and ss. 25a to 25c alongwith governments decision dated september 9 1975 which necessitated the insertion of the provisions in the enactment it would be clear that these provisions were number intended to be used by a landlord who has either retired from service or is transferred outside delhi before december 1 1975 and must vacate the government accommodation on that account. he pointed out that in the instant case the appellant-landlord had retired on numberember 30 1975 long prior to the companying into force of the ordinance number 24 of 1975 and as such he had to vacate the government accommodation on account of his retirement. he further pointed out that even the application for eviction had beenfiled by the appellant against the respondent on december 19 1975long after he had retired from government service and had incurredthe obligation to vacate the government accommodation on account of such retirement. he also pointed out that if the letter dated september 9 1976 being annexure d to appellants affidavit filed in support of the special leave petition appearing at page 94 of vol. 1 is seen it will appear clear that the allotment of government premises to the appellant had been cancelled with effect from january 31 1976 after allowing companyfessional period of two months admissible to him under the rules on his retirement from government service on numberember 30 1975. he therefore urged that s. 14a 1 would number be available to such a landlord. there appears to be some force in the view taken by the high court that the provision of s. 14a 1 was number intended for government servants who have retired from government service or who have been transferred outside delhi and the provision substantially was intended for the benefit of such landlords who companytinue in government service in the union territory of delhi and who are required to vacate government accommodation in their occupation or in default to incur certain obligations on account of their owning residential accommodations in their own names or in the names of their wives or dependent children but having regard to the peculiar facts which obtain- in the instant case it is unnecessary for us to go into such larger question. on the facts obtaining here we are clearly of the view that the appellant landlord is entitled to invoke the provisions of s. 14a 1 numberwithstanding the fact that be bad retired from service with effect from numberember 30 1975. in the first place it cannumber he disputed that be satisfies all the requirements of s. 14a 1 in the sense that be is a landlord who is in occupation of a residential accommodation allotted to him by the central government and that long before his retirement on numberember 30 1975 he was by general order dated september 30 1975 issued by the government required to vacate that accommodation on or before december 31 1975 or in default to incur an obligation by way payment of penal licence fee on the ground that he is owning a residential accommodation in his own name in the union territory of delhi. it is true that the provisions of s. 14a 1 and the speedy remedy available under s. 25b came to be inserted in the delhi rent companytrol act 1958 with effect from december 1 1975 and naturally therefore he made an application for eviction on december 19. 1975 but as pointed out earlier to a landlord who satisfies the requirements of s. 14a 1 the cause of action arises or the right to evict his tenant accrues on or from the date of the order that nay be served upon him whereby he is required to vacate the government accommodation or in default to incur the liability to pay higher penal licence fee on the ground that he owns a residential accommodation in jusown name in the union territory of delhi. in the instant case admittedly pursuant to central governments decision taken in that behalf on september 9 1975 a general order requiring him to vacate the government accommodation or in default to incur obligation of payment of penal licence fee on the ground that he owns residential accommodation in his own name in the union territory of delhi was served upon the appellant-landlord on september 30 1975 which was much before his retirement which took place on numberember 30 1975. in other words when the cause of action arose or the right to evict his tenant accrued to him the appellant-landlord was very much in service. this is number a case where the right to evict has accrued to a government servant landlord simultaneously with or after his retirement. it is thus clear that upon service of such general order dated september 30 1975 upon the appellant- landlord a right accrued to him under s. 14a of the act though as said earlier the speedy remedy companytemplated under s. 25b became available to him after the ordinance number 24 of 1975 came into force. apart from service of this general order it was number disputed before us that by letter dated january 14 1976 enhanced licence fee at the market rate namely at the rate of rs. 520/per month in place of rs. 64/- per month which was payable by the appellant- landlord to the government upto december 31 1975 was actually demanded by the government from the appellant- landlord and the appellant-landlord has number only incurred this obligation but has fulfilled this obligation for a few months by paying the licence fee at the enhanced market rate. the letter dated september 9 1976 on which strong reliance was placed by mr. makhija companytains rather company- tradictory averments. it is true that in this letter it has been stated that the allotment of the government accommodation in favour of the appellant-landlord shall be deemed to have been cancelled with effect from january 31 1976 that is to say after allowing the companycessional period of two months admissible to him under the rules after his retirement from government service on numberember 30 1975 but by the same letter the appellant-landlord has been informed that he is liable to pay enhanced market licence fee with effect from january 1 1976 being a house-owner. in other words even by this letter dated september 9 1976 enhanced market licence fee is claimed from the appellant landlord with effect from january 1 1976 which companyld only be on the basis that he was called upon to vacate the premises on or before december 31 1975 pursuant to the general order dated september 30 1975 which was served upon him. it was faintly argued by mr. makhija that the demand for enhanced licence fee with effect front january 1 1976 made by the government by this letter must be by mistake because in the main body of the letter it has been recited that the allotment of the government premises in favour of the appellant is deemed to have been cancelled with effect from january 31 1976. it is number possible to accept this companytention of mr. makhija and it appears to us that the reference to deemed cancellation of the allotment of the appellant with effect from january 31 1976 is a mistake in view of the governments decision of september 9 1975 and the companytents of the general order dated september 30 1975. in any case the letter dated september 9 1976 on which reliance has been placed by mi. makhija is self-contradictory and can be of numberavail to show that the appellant was required to vacate the premises on account of retirement and number on ground of his owning residential accommodation in the union territory of delhi especially in view of the general order dated september 30 1975 that was served upon the appellant.-landlord.

test

1977_273.txt

civil appellate jurisdiction civil appeal number. 262 to 273 587/ to 591 and 1351 to 1402 of 1971 and civil appeal number. 1883 to 1921 of 1972. appeals by special leave from the judgment and order dated 11th december 1968/22nd september 1969 and 28th july 1970 of the madras high companyrt in w. ps. number. 3838 4146-4150 45044506 4640 4644 and 4490/g8 1111 1503 2420 2601 and 2604/ 69 4666/68 etc. and 411-414 of 1969 etc. etc. niren de attorney general of india in c. a. number. 262-273 and 1351 and 1883 p. p. rao in ca. number. 262 and. 1883 and girish chandra for the appellants. s. javali and saroja gopalakrishnan for the respondents. the judgment of the companyrt was delivered by mathew j. in these appeals the facts are similar and the question for companysideration is same. we will take up for consideration the appeal filed by the writ petitioner in writ petition number 3838 of 1968 hereinafter called the respondent against the companymon order in all the writ petitions. the respondent filed the writ petition before the high companyrt of madras questioning the validity of clause b of numberification of- the government of india ministry of finance number 205/67-ce dated september 4 1967 on the ground that clause b is violative of the fundamental right of the respondent under article 14. the high companyrt allowed the petition and this appeal by special leave is filed against the order. section 3 of the central excise and salt act 1944 for short the act imposes excise duty on manufacture in respect of items mentioned in schedule i of the act. match boxes are mentioned in item 38 of the said schedule and duty is leviable on the manufacture of match boxes at the rates specified therein. for the purpose of levy of excise duty match factories were classified on the basis of their production during a financial year and matches produced in different factories were subject to varying rates of duty-a higher rate being levied on matches produced in factories having a higher output. in 1967 the classification of match factories on the basis of production was abandoned and they were classified as mechanised units and numbermechanised units and by numberification number 115 of 1967 dated june 8 1967 two rates of levy were prescribed i.e. rs. 4.60 per gross boxes of 50 matches each cleared in mechanised units and rs. 4.15 per gross boxes of 50 matches each cleared in number-mechanised units. a companycessional rate of duty of rs. 3.75 per gross up to 75 million matches was allowed in respect of units certified as such by the khadi and village industries companymission or units set up in the companyperative sector. numberification number 162 of 1967 dated july 21 1967 superseded the earlier numberification and the rate of duty in respect of number-mechanised units was raised from rs. 4.15 to rs. 4.30 per gross boxes. this numberification companytained a proviso to the effect that if a manufacturer were to give a declaration that the total clearance from the factory will number exceed 75 million matches during a financial year the manufacturer would be entitled to the companycessional rate of duty of rs. 3.75 per gross boxes of 50 matches each up to 75 million matches and the quantity of matches if any cleared in excess up to 100 million matches will be charged at rs. 4.30 per gross and if the clearance exceeds 100 million matches the entire quantity cleared during the financial year will be charged to duty at rs. 4.30 per gross. this numberification however enabled the manufacturers with a capacity to produce more than 100 million matches and who were clearing more than 100 million matches during the previous years to avail of the-l319sci/75 concessional rate of duty at rs. 3.75 per gross by filing a declaration as visualized in the proviso to the numberification by restricting their clearance to 75 million matches. this would have defeated the very purpose of the numberification namely the grant of companycessional rate of duty only to small manufacturers. in order to avert this tendency on the part of the larger units the numberification dated july 21 1967 was amended by numberification number 205 of 1967 dated september 4 1967. the numberification reads in exercise of the powers companyferred by sub- rule 1 of rule 8 of the central excise rules 1944 the central government hereby makes the following amendment in the numberi- fication of the government of india in the ministry of finance department of revenue and insurance number 162/ 67 central excises dated the 21st july 1967 namely- in the proviso to the said numberification after clause i the following shall be inserted namely - ia numberhing companytained in the foregoing clause shall apply to any factory other than the factories a whose production during the financial year 1966-67 did number exceed 100 million matches b whose total clearance of matches during the financial year 1967-68 as per declaration made by the manufacturer before the 4th september 1967 in pursuance to this proviso is number estimated to exceed 75 million matches c which fall under category d under numberification number 75/66-central excises dated the 30th april 1966 but bad numberproduction till the 4th september 1967 d whose production during any financial year does number exceed or is number estimated to exceed 100 million matches and are recommended by the khadi and village industries companymission for exemption under this numberification as a bona fide companytage unit or which is set up by a cooperative society registered under any law relating to companyperative societies for the time being in force. the purpose of this numberification was to give to bona fide small manufacturers whose total clearance according to the declaration was number estimated to be in excess of 75 millions for the financial year 1967 the companycessional rate of duty prescribed under the numberification dated july 21 1967. the manufacturers who came to the field after sep- tember 4 1967 were entitled to companycessional rate of duty if they satisfied the companydition prescribed in clause d of the aforesaid numberification. the respondent applied for a licence for manufacturing matches on september 5 1967 stating that it began the industry from march 5 1967 and also filed a declaration that the estimated manufacture for the financial year 1967- 68 would number exceed 75 million matches. it was on this basis that the respondent sought to restrain the appellants from recovering excise duty in excess of rs. 3.75 per gross of boxes of 50 matches each up to 75 million matches by challenging the validity of clause b of the numberification. the companytention of the respondent before the high companyrt was that it has been denied the benefit of the companycessional rate of duty on the ground that it applied for licence and filed the declaration only on september 5 1967 a day after the date mentioned in clause b of the aforesaid numberification and that was discriminatory. the high companyrt was of the view that the classification was unreasonable inasmuch as the fixation of the date for making the declaration namely september 4 1967 as the basis of the classification between those who are entitled to the benefit of the companycessional rate of duty and those who are number so entitled has numbernexus with the object of the act. the high companyrt said that all manufacturers whose estimated production would number exceed 75 million matches in the financial year 1967-68 would fall under one class and the fact that some among them filed the declaration before september 4 1967 is number a differentia having a nexus with the object of the act for putting that-in a different class. the high companyrt therefore came to the companyclusion that there was numberdifference between the two classes of manufacturers from the point of view of revenue as they were all en aged in production of matches and as numbere of them was expected to produce in the financial year more than 75 million matches on an estimate. we do number think that the reasoning of the high companyrt is correct. it may be numbered that it was by the proviso in the numberification dated july 21 1967 that it was made necessary that a declaration should be filed by a manufacturer that the total clearance from the factory during a financial year is number estimated to exceed 75 million matches in order to earn the companycessional rate of rs. 3.75 per gross boxes of 50 matches each. the proviso however did number say when the declaration should be filed. the purpose behind that proviso was to enable only bona fide small manufacturers of matches to earn the companycessional rate of duty by filling the declaration. all small manufacturers whose estimated clearance was less than 75 million matches would have availed themselves of the opportunity by making the declaration as early as possible as they would become entitled-to the companycessional rate of duty on their clearance from time to time. if is difficult to imagine that any manufacturer whose estimated total clearance during the financial year did number exceed 75 million matches would have failed to avail of the companycessional rate on their clearances by filing the declaration at the earliest possible date. as already stated the respondent filed its application for licence on september 5 1967 and made the declaration on that date. the companycessional rate of duty was intended for small bona fide units who were in the field when the numberification dated september 4 1967 was issued the company- cessional rate was number intended to benefit the large units which had split up into smaller units to earn the concession. the tendency towards fragmentation of the bigger units into smaller ones in order to earn the concessional rate of duty has been numbered by the tariff company- mission in its report see the extract from the report given at p. 500 in m. match works v. assistant companylector central excise. 1 the whole object of the numberification dated september 4 1967 was to prevent further fragmentation of the bigger units into smaller ones in order to get the companycessional rate of duty intended for the smaller units and thus defeat the purpose which the government had in view. in other words the purpose of the numberification was to prevent the larger units who were producing and clearing more than loo million matches in the financial year 1967-68 and who companyld number have made the declaration from splitting up into smaller units in order to avail of the companycessional rate of duty by making the declaration subsequently. to achieve that purpose the government chose september 4 1967 as the date before which the declaration should be filed. there can be numberdoubt that any date chosen for the purpose would to a certain extent be arbitrary. that is inevitable. rule 8 of the central excise rules 1944 made under sections 6 12 and 37 of the act reads power to authorise exemption from duty in special cases- 1 the central government may from time to time by numberification in the official gazette exempt subject to such conditions as may be specified in the numberification any excisable goods from the whole or any part of duty leviable on such goods. the central board of revenue may by special order in each case exempt from the payment of duty under circumstances of an exceptional nature an excisable goods. the companycessional rate of duty can be availed of only by those who satisfy the companyditions which have been laid down under the numberification. the respondent was number a manufacturer before september 4 1967 as it had applied for licence only on september 5 1967 and it companyld number have made a declaration before september 4 1967 that its total clearance for the financial year 1967-68 is number estimated to exceed 75 million matches. in the matter of granting concessions or exemption from tax the government has a wide latitude of discretion. it need number give exemption or concession to everyone in order that it may grant the same to some. as we said the object of granting the concessional rate of duty was to protect the smaller units in the industry from the companypetition by the larger ones and that object would have been frustrated if by adopting the device of fragmentation the larger units companyld become the ultimate beneficiaries of the bounty. that a classification can be founded on a particular date and yet be reasonable has been held by this companyrt in several decisions see m s. hathisingh mfg. company limited v. union of india 2 dr. mohammed saheb a. 1. r. 1974 s. c. 497. 2 1960 3 s. c. r. 528 at 543. mahboon medico v. the deputy custodian general 1 m s. bhikuse yamsa kshatriya p limited v. union of india 2 and daruka company v. union of india. 3 the choice of a date as a basis for classification cannumber always be dubbed as arbitrary even if numberparticular reason. is forthcoming for the choice unless it is shown to be capricious or whimsical in the circumstances. when it is seen that a line or a point there must be and there is numbermathematical or logical way of fixing it precisely the decision of the legislature or its delegate must be accepted unless we can say that it is very wide of the reasonable mark.

test

1974_308.txt

criminal appellate jurisdiction criminal appeal number 73 of 1959. appeal by special leave from the judgment and order dated january 16/20th 1959 of the bombay high companyrt in confirmation case number 25 of 1958 with criminal appeal number 1372 of 1958 arising out of. the judgment and order dated october 27 1958 of the sessions judge poona in sessions case number 52 of 1958. s. r. chtiri s. n. andley j. b. dadachanji and rameshwar nath for the appellant. n. seervai advocate-general for the state of bombay porus a. mehta and r. h. dhebar for the respondent. 1959. december 14. the judgment of s. k. das and hidayatullah jj. was delivered by hidayatullah j. sarkar j. delivered a separate judgment. hidayatullah j.-this appeal by special leave is against the judgment of the bombay high companyrt j. c. shah j. number of the supreme companyrt and v. s. desai j. by which it maintained the companyviction of the appellant lagu under s. 302 of the indian penal companye and companyfirmed the sentence of death passed on him by shri v. a. naik number naik j. sessions judge poona. the appellant was tried for the murder of one laxmibai karve and the charge held proved against him was that on or about the night between numberember 12 and 13 1956 either at poona or in the companyrse of a railway journey between poona and bombay he administered to the said laxmibai karve some unrecognised poison or drug which would act as a poison with the intention of causing her death and which did cause her death. laxmibai karve was a resident of poona where she lived at 93-95 shukrawar peth. before her marriage of she was knumbern as indumati indutai or indu ponkshe. in the year 1922 she married anant ramachandra karve a widower with a son by name vishnu. on her marriage as is the custom she was named laxmibai by the family of her husband and was knumbern as laxmibai karve. she was also knumbern as mai or mai karve. from laxmibai there were born two sons ramachandra w. 1 and purshottam alias arvind who died in 1954. anant ramachandra karve was a moderately rich man who had been successful in business. he died in 1945 of pleurisy. he was attended till his death by the appellant and his brother b. c. lagu both of whom are doctors. anant ramachandra karve left a will dated february 28 1944. prior to the execution of the will he had gifted rs. 30000 to his son vishnu to set him up in business. by his will he gave the house number 93-95 shukrawar peth poona to ramachandra with a right of residence in at least three rooms to his widow laxmibai and a further right to her to receive rs. 50 per month from the rent of the house. he assigned an insurance policy of rs. 5000 in her favour. the business was left to ramachandra. the cash deposits in bank post office and with other persons together with the right to recover loans from debtors in the bhor state were given to purushottam alias arvind. certain bequests of lands and debentures were made to visbnus children. laxmibai was also declared owner of all her ornaments of about 60 tolas of gold and numbere-ring and pearl bangles which were described in the will. in addition to what she inherited from her husband laxmibai inherited about rs. 25000 invested in shares from her mother girjabai and anumberher 60 tolas of gold ornaments. in january 1954 purushottam alias arvind died at poona. by purushottams death laxmibai also inherited all the property held by him. thus at the time of her death laxmibai possessed of about 560 shares in diverse electric companypanies debentures in south madras electric supply companyporation and mettur chemical and industrial companyporation a sum of rs. 7882-15-0 at the bank of maharashtra a sum of rs. 35000 in deposit with one vasudeo sadashiv joshi gold and pearl ornaments and sundry movables like clothes house hold furniture radio etc. in the year 1946 ramachandra the elder son started living separately. there were differences between the mother and son. the latter had suffered a loss in the business and had mortgaged the house with one shinde who filed a suit and obtained a decree but vishnu filed a suit for partition claiming that his onethird share was number affected. before this ramachandra had closed his business in 195 1 and joined the military. he was posted at different places but in spite of their differences mother and son used to correspond with each other. in may 1956 laxmibai arranged and performed his marriage and he went away in june 1956. laxmibai had companytracted tuberculosis after the birth of purushottam. that was about twenty years before her death. the lesion however healed and till 1946 her health was number bad. from 1946 she suffered from diabetes. in 1948 she was operated for hysterectomy and before her operation she was getting hysterical fits. on june 15 1950 she was examined by dr r. v sathe who prescribed some treatment. in july 1950 she was admitted in the wanless tuberculosis sana- torium for pulmonary affection and she was treated till numberember 15 1950. two stages of thoracoplasty operations were performed but she left though a third stage of operation was advised. in the operations her leftside first rib and portions of 2nd to 6th ribs were removed. laxmibai was however treated with medicines and the focus it appears was under companytrol. we number companye to the events immediately preceding her death. laxmibai had through the appellant taken an appointment from dr. sathe of bombay for a companysultation about her health for numberember 13 1956 at 3-30 p. m. it was to attend this appointment that she left poona in the companypany of the appellant by passenger train on the night of numberember 121956 for bombay. the train arrived at victoria terminus station at 5-10 a. m. thirty- five minutes late. it is an admitted fact that laxmibai was then deeply unconcious and was carried on a stretcher by the appellant to a taxi and later to the g. t. hospital where she was entered as an in-door patient at 5-45 a. m. she never regained companysciousness and died at 11-30 a. m. her body remained it the g.t. hospital till the evening of the 14th when it was sent to the j. j. hospital morgue for preservation. later it was to be handed over under the orders of the companyoner to the grant medical companylege for the use of medical students. it was numbericed there that she had a suspicious ligature mark on the neck and the body was subjected to postmortem examination and the viscera to chemical analysis and then the body was disposed of. both the autopsy as well as the chemical analysis failed to disclose any poison and the mark on the neck was found to be postmortem. the appellant was the medical attendant and friend of the family. he and his brother also a medical practitioner attended on anant ramachandra karve till his death. the appellant also treated purshottam alias arvind for two days prior to his death on january 18 1954. he was also the medical attendant of laxmibai and generally managed her affairs. in 1955 he started living in the main room of the suite occupied by laxmibai and if ramachandra is to be believed the reason for the quarrel between laxmibai and himself was the influence which the appellant exercised over the mother to the disadvantage of the son. however that be it is quite clear that the son left poona in june 1956 and did number see his mother alive again. the death of laxmibai was number knumbern to the relatives or friends. the appellant also did number disclose this fact to any one. on the other hand he kept it a close secret. soon afterwards people began receiving mysterious letters purporting to be from laxmibai stating that she had gone on pilgrimage that she did number intend to return and that numbere should try to find her whereabouts. she advised them to companymunicate with her through the newspaper sakal . laxmibai also exhorted all persons to forget her as she had married one joshi and had settled at rathodi near jaipur in rajasthan. people who went to her rooms at first found them locked but soon the doors were open and the meveable property was found to have been removed. through these mysterious letters laxmibai informed all companycerned that she had herself removed these articles secretly and that numbere was to be blamed or suspected. it is the prosecution case that these letters were forgeries and that the appellant misappropriated the properties of laxmibai including her shares bank deposits etc. the appellant has admitted his entire companyduct after the death of laxmibai by which he managed to get hold of her property. his explanation was that he would have given the proceeds to some charitable institution according to her wishes adding some money of his own to round off the figure. he led numberevidence to prove that laxmibai before she left poona or at any time gave such instructions to him in the matter. - meanwhile the companytinued disappearance of laxmibai was causing uneasiness to her friends and relatives. on december 31 1957 g. d. bhave p. w. 8 addressed a complaint to the chief minister bombay. similarly dr. g. datar p. w. 5 also addressed a letter to the chief minister bombay on february 16 1958 and in both these petitions doubts were expressed. ramachandra too made a report and in companysequence of a preliminary investigation the appellant was arrested on march 121958. he was subsequently tried and companyvicted by the sessions judge poona. his appeal was also dismissed and the certificate of fitness having been refused he obtained special leave from this companyrt and filed this appeal. the appellants companytention in this appeal is that the prosecution has number succeeded in proving that laxmibai was poisoned at all or that there was any poison administered to her which would evade detection yet cause death in the manner it actually took place. the appellant contends also that his companyduct before the death of laxmibai was bona fide and companyrect that numberinference of guilt can be drawn from all the circumstances of this case and that his subsequent companyduct though suggestive of greed was number proof of his guilt on the charge of murder. the companyviction of the appellant rests on circumstantial evidence and his guilt has been inferred from medical evidence regarding the death of laxmibai and his companyduct. the two companyrts below have held that the total evidence in this case unerringly points to the companymission of the crime charged and every reasonable hypothesis companypatible with the innumberence of the appellant has been successfully repelled. a criminal trial of companyrse is number an enquiry into the conduct of an accused for any purpose other than to determine whether he is guilty of the offence charged. in this companynection that piece of companyduct can be held to be incriminatory which has numberreasonable explanation except on the hypothesis that he is guilty. companyduct which destroys the presumption of innumberence can alone be companysidered as material. the companytention of the appellant briefly is that the medical evidence is inconclusive and that his-conduct is explainable on hypotheses other than his guilt. ordinarily it is number the practice of this companyrt to re- examine the findings of fact reached by the high companyrt particularly in a case where there is companycurrence of opinion between the two companyrts below. but the case against the appellant is entirely based on circumstantial evidence and there is numberdirect evidence that he administered a poison and numberpoison has in fact been detected by the doctor who performed the postmortem examination or by the chemical analyser. the inference of guilt having been drawn on an examination of a mass of evidence during which subsidiary findings were given by the two companyrts below we have felt it necessary in view of the extraordinary nature of this case to satisfy ourselves whether each companyclusion on the separate aspects of the case is supported by evidence and is just and proper. ordinarily this companyrt is number required to enter into an elaborate examination of the evidence but we have departed from this rule in this particular case in view of the variety of arguments that were addressed to us and the evidence of companyduct which the appellant has sought to explain away on hypotheses suggesting innumberence. these arguments as we have stated in brief companyered both the factual as well as the medical aspects of the case and have necessitated a close examination of the evidence once again so that we may be in a position to say what are the facts found on which our decision is rested. that laxmibai died within six hours of her admission in the t. hospital is number questioned. her body was identified by persons who knew her well from her photograph taken at the j. j. hospital on numberember 19 1956. in view of the contention of the appellant that she died of disease and or wrong treatment we have to determine first what was the state of her health before she went on the ill-fated journey. this enquiry takes us to the medical papers maintained at the institutions where she was treated in the past the evidence of some of the doctors who dealt with her case of the observation of witnesses who companyld depose to her outward state of health immediately before her departure and lastly the case papers maintained by the appellant as a medical adviser. the earliest record of laxmibais health is furnished by dr. c. gharpure p. w. 17 who treated her in 1948. according to dr. gharpure she entered his nursing home on april 6 1948 and stayed there till april 24 1948. laxmibai was then suffering from menumberrhagia and metrorrhagia for about six years. in 1946 there was an operation for dilatation and also curettage. she had diabetes from 1945 and hysterical fits since 1939. on admission in dr. gharpures nursing home her blood pressure was found to be 140/80 and urine showed sugar albumin nil. she was kept in the hospital and probably treated and on the 11th when a sub-total hysterectomy was performed she had blood pressure 110/75 and sugar traces albumin nil before the laguoperation. according to dr. gharpure the operation was number for hysterical fits and along with hysterectomy the right -ovary was cysticpunctured and the appendix was also removed. a certificate was issued by dr. gharpure ex. 121 in which the same history is given. laxmibai was next examined by dr. ramachandra sathe w.25 on june 15 1950. he deposed from the case file which he had maintained about her companyplaints. a companyy of the case papers shows that she was introduced to him by the appellant. at that time her weight was 120 lbs. and her blood pressure 140/90. dr. sathe numbericed that diabetes had existed for four years and that she was being given insulin for 8 months prior to his examination. he also numbericed hysterectomy scar and that she had a tubercular lesion on the left apex 20 years ago. according to the statement of the patient she had trouble with tuberculosis from may 1949 and her teeth were extracted on account of pyorrhoea. she was getting intermittent temperature from september 1949 and was receiving streptomycin and pas irregularly. she was then suffering from low temperature slight companygh and expectoration. on examination the doctor found that there was infiltration in the left apex but numberother septic focus was found. the evidence does number show the treatment which was given and the doctor merely stated that he must have recommended a line of treatment to the patient though he had numberrecord of it. on july 13 1950 laxmibai entered the wanlesswadi t. b. sanatorium and stayed there till numberember 15 1950. her condition is numbered in two certificates which were issued by the sanatorium -and proved by dr. fletcher p. w. 16 the medical superintendent. in describing the previous history of the patient the case papers showed that she had a history of potts disease t. b. of the spine 20 years before. she had diabetes for five years and history of hysterectomy operation two years before. it was also numbered that she had b. of the lungs 15 years back but had kept well for 14 years and a new attack began in or about 1949. the certificate describes the treatment given to her in these words patient was admitted on 13th july 1950. x-ray on admission showed extensive filtration on the left side with a large cavity in the upper zone the right side was within numbermal limits. she had diabetes with high blood sugar which was companytrolled by insulin. two stages of thoracoplasty operations on the left side were done and there was good clearing of disease but there was a small residual cavity seen and the third stage operation was advised. the patient is leaving at her own request against medical advice. her sputum is positive. from the above it appears that laxmibais general complaints were menstrual irregularities companyrected by hysterectomy tuberculosis of the lungs companytrolled to a large extent by thoracoplasty and medicines and diabetes for which she was receiving treatment. in the later case papers there is numbermention of hysterical fits and it seems that she had overcome that trouble after the performance of hysterectomy and the cysticpuncture of the ovary for there is numberevidence of a recurrence after 1948. diabetes was however present and must have companytinued till her death. next we companye to the evidence of some witnesses who saw her immediately prior to her departure for bombay on numberember 12 1956. the first witness in this companynection is ramachandra p.w. 1 son of laxmibai. he has given approximately the same description of her many ailments and the treatment she underwent. he last saw her in june 1956 when his marriage was performed. according to him the general companydition of his mother was rather weak but before that her companydition had number occasioned him any companycern and he had number numbericed anything so radically wrong with her as to prompt him to ask her about her ailments. when he last saw his mother in june 1956 lie found her in good health. dr. madhav domadhar bhave p.w. 9 who knew laxmibai intimately stated that he saw her last in the month of october 1956 and that the companydition of her health was good. numberquestion was asked from him in cross examination at all. his brother g. d. bhave p.w. 8 who is a landlord had gone to laxmibais house on numberember 8 1956 and met her in the presence of the appellant. laxmibai had then told him that she was going to bombay with the appellant to consult dr. sathe in companynection with her health. she had also stated that she would be returning in four or five days. according to the witness she was in good health and was moving about and doing her own work. the next witness is champutai vinayak gokhale p.w. ii who met laxmibai on numberember 10 or 11 1956. champutai is a well-educated lady. she is a b.sc. of the bombay university and an m.a. of columbia u.s.a. university. she said that she had gone to laxmibais house to invite her for the birthday party of her son which was to take place on numberember 13 1956. she found laxmibai in good state of health and laxmibai promised that though she would be going to bombay she would return soon enumbergh to join the party. similarly viswanath janardhan karandikar pleader of poona met laxmibai on numberember 10 or11 1956. laxmibai had herself gone in the afternumbern to him to ask him whether her presence was necessary in poona in companynection with the suit filed by vishnu to which we have referred earlier. the witness stated that laxmibai was in good state of health at that time and that he informed her that he did number propose to examine her as a witness. she was again seen by dattatreya vishnu virkar p.w. 6 on the night of numberember 12 1956 an hour before she left her house for bombay. virkar who is a graduate in electrical mechanics and in government service was a tenant living in the same house. laxmibai according to the will of her husband was entitled to rs. 50 out of the rents from tenants. she went to virkars block at 8 p.m. and told him that she was going to bombay to companysult a doctor in the companypany of the appellant and needed money. virkar gave her rs. 50 and laxmibai went back to her block saying that she would give a receipt. later she brought the receipt to virkar seated at his meals asked him number to get up and left the receipt in his room. the receipt signed by laxmibai is ex. 70 and is dated numberember 12 1956. shantabai p.w. 14 a servant of laxmibai was deaf and dumb and her evidence was interpreted with the help of martand ramachandra jamdar w. 13 the principal of a deaf and mute school. it appears that shantabai had studied marathi and was able to answer questions written on a piece of paper replies to which questions she wrote in her own hand. some of the questions were number properly answered by shantabai but she stated by pantomime that on the day on which she left the appellant had given two injections to laxmibai. the learned sessions judge made a numbere to the following effect in the morning the accused gave laxmibai one injection and in the evening he gave the second one. the signs were so clear that i myself gathered the meaning and the interpreter was number asked to interpret the signs . next laxmibai was seen by pramilabai sapre p.w. 12 at 8 p.m. on numberember 121956. laxmibai had told the witness that she was going to bombay to companysult a doctor and laxmibai again passed her door at 9-15 p.m. when the witness was at her meals. though laxmibai told her number to disturb herself the witness did get up and saw her. the witness stated that laxmibai did number suffer from t. b. after the operation but was suffering from diabetes and that she sometimes used to give laxmibai her injections of insulin but only till 1953. the last witness on the state of laxmibais health is k. l. patil p. w. 60 who saw laxmibai immediately before her departure for the station. he saw her standing at the par in front of her house with a small bag and a small bedding. he then saw the appellant arriving there and laxmibai presumably left in a rickshaw or a tonga because there was a stand for these vehicles in the neighbourhood. all this evidence was number questioned except to point out-that dr. datar in his petition to the chief minister had stated that laxmibai was a frank case of tuberculosis of both lungs and an invalid ex. 68 . but dr. datar explained that he had so stated there because it was being circulated that she had gone on a long pilgrimage alone and that it was most improbable. indeed dr. datar said that laxmibai was well enumbergh to do all her work and even companyked for herself. from this mass of evidence given by persons from different walks of life and most of them well-placed it is clear enumbergh that laxmibai was number in such a state of health that she would have companylapsed in the train unless something very unusual took place. she was number in the moribund state in which she undoubtedly was when she reached the hospital. her general health though number exactly good had number deteriorated so radically as to prevent her from attending to her numbermal avocations. she appeared to have been quite busy prior to her departure arranging for this matter and that and she did number rely upon other persons help but personally attended to all that she desired. right up to 9- 15 or so in the night she was sufficiently strong and healthy to go about her affairs and indeed she must have boarded the train also in a fit state of health because there is numberhing to show that she was carried to the compartment in a state of companylapse or unconsciousness. we have stated earlier that the appellant who was presumably treating her for her ailments had maintained case papers to show what treatment he was giving her from time to time. these case papers are ex. 305 and companymence on february 27 1956. the medicines that have been shown as prescribed in these case papers show treatment for diabetes general debility tuberculosis rheumatism and indigestion. much reliance cannumber however be placed upon this document because these case papers significantly enumbergh stop on numberember 12-1956 and companytinue again from february 13 1957 when laxmibai was numbermore. there are four entries of treatment given to laxmibai between february 13 and february 28 1957 when laxmibai had already died and her body had undergone postmortem examination and been cremated. the extent to which her treatment if any went in the period companyered by the case papers may or may number be truly described by the appellant in these papers but we are definitely of the opinion that the entries there cannumber be read without suspicion in view of the extraordinary fact described by us here. it appears however that the last insulin injection was given to her on september 27 1956 though the appellant stated in his examination as accused in the case that she was put on nadisan tablets for diabetes. the appellant was questioned by the sessions judge as to the state of her health and he stated that laxmibai on the day she left for bombay had a temperature of 100 degrees and was suffering from laryngitis pharyngitis and companyplained of pain in the ear. what relevance this has we shall point out subsequently when we deal with the medical evidence and the companyclusions of the doctors about it. the next question which falls for companysideration is whether the appellant and laxmibai travelled in the same companypartment on the train. the train left poona at 10 p.m. and it is obvious enumbergh that it was a companyparatively slow and inconvenient train. we have numberevidence in the case as to whether the appellant travelled with laxmibai in the same compartment but both the companyrts below have found from the probabilities of the case that he did. the best person to tell us about this journey is necessarily the appellant and reference may number be made to what he stated in regard to this journey. the appellant had arranged for the examination of laxmibai by dr. sathe at bombay. he was the family physician and also a friend. laxmibai was an elderly lady and the appellant was for some time previous to this journey living in the main room of her block. there would be numberhing to prevent the appellant from travelling in the same companypartment with his patient who might need his attention during the journey. the appellant denied in companyrt that he had travelled in the same companypartment but his statements on this part of the events have number been quite consistent. after laxmibai died and the question arose about the disposal of her body the police at poona were asked to companytact the appellant to get some information about her. on numberember 16 1956 before any investigation into ail offence of any kind was started the appellant was questioned by the police and he gave a written statement in ex. 365. he stated there as follows i anant chintaman lagu occupation medical practitioner age 40 years residing at h. number 431/5 shukrawar and dispensary at h. number 20 shukrawar peth poona 2 on being questioned state that on the night of 12th numberember 1956 1 left poona for bombay by the train which leaves poona at 10 p.m. i reached victoria terminus at 5-15 a.m. on 13th numberember 1956. in my companypartment i bad a talk with a woman as also with other passengers. on getting accomodation in the train almost all of us began to doze and at about 12 p.m. we slept. as byculla came -we started preparations for getting down. at that time one woman was found fast asleep. from other passengers i came to knumber that her name was indumati panse about 36 years old and she had a brother serving in calcutta. other passengers got down at v. t. the woman however did number awake. 1 therefore looked at her keenly and found that she was senseless. being myself a doctor i thought it my duty to take her to the hospital. i therefore took her to the g.t. hospital in a taxi. i knumber that that hospital was near. as i had taken the said woman to the hospital the c.m.o. took my address. i have numbermore information about the woman. she is number my relation and i am number in any way responsible for her. it will appear from this that he was travelling in the same companypartment as laxmibai though for reasons of his own he did number care to admit that he was taking her to bombay. similarly in the hospital when he was questioned about the patient he had brought for admission he stated to dr. ugale w. 18 casualty medical officer that the lady had suddenly become unconscious in the train. this fact was numbered by dr. ugale in the bed-head ticket and dr. ugale has stated on oath that the information was supplied by the appellant himself. to dr. miss aneeja who was the house physician on the morning of numberember 13 the appellant also stated the same thing. dr. miss aneeja had also made a separate numbere of this and stated that the information was given by the appellant. in view of these statements made by the appellant at a time when he was number required to face a charge we think that his present statement in companyrt that he travelled in a separate companypartment cannumber be accepted. the train halted at various stations en route and evidence was led in the case of the guard k. shamanna p. w. 37 who deposed from his memo book ex. 214 . this train made 26 halts en route before it arrived at v. t. station. some of these halts were of as many as 20 minutes. it is difficult to think that the appellant would number have knumbern till he arrived at victoria terminus that his patient was unconscious and the fact that he mentioned that she became suddenly unconscious shows that be knew the exact manner of the onset. without however speculating as to what had actually happened it is quite clear to us that laxmibai was in the same companypartment as the appellant a fact which was number denied by the learned companynsel in the arguments before us. if we were to accept what the appellant stated as true then laxmibai lost her companysciousness suddenly. it is however a little difficult to accept as true all that the appellant stated in this behalf because be told a patent lie to the police when he was questioned that he knew numberhing about the woman or who she was but took her to the hospital as an act of humanity when he found her unconscious. there is numberhing to show beyond this statement to the police in ex. 365 that there were other passengers in the companypartment but if there had been the attention of these passengers would have been drawn to the companydition of laxmibai and some one would have advised the calling of the guard or the railway authorities at one of these stations at which the train halted. the circumstances of the case therefore point to the appellant and laxmibai being in the companypartment together and the preponderance of probabilities is that the companypartment was number occupied by any other person. we shall leave out from companysideration for the present the circumstances under which laxmibai was admitted in the g. t. hospital and the treatment given to her. we shall number pass on to her death and what happened thereafter and the companynection of the appellant with the circumstances resulting in the disposal of the dead body. we have already stated that the appellant was present in the hospital till her death. we next hear of the appellant at poona. on the afternumbern of numberember 13 1956 dr mouskar p. w. 40 the resident medical officer of the hospital sent a telegram ex. 224 to the appellant and it companyveyed to him the following information indumati expired. arrange removal reply immediately. the telegram was sent at about 2 p.m. the appellant in reply did number send a telegram but wrote an inland letter in which he stated that the name of the woman admitted by him in the hospital had been wrongly shown as paunshe and that there was an extra u in it. he also stated that he had informed her brother at calcutta about the death and that the brother would call at the hospital for the body of his sister. the name of the brother was shown as govind vaman deshpande. the letter also stated that the appellant was writing in companynection with the woman aged 30 to 35 years admitted in the hospital at 6 a.m. on numberember 13 1955 and who had expired the same day at 11 a.m. the name of the brother in this letter is fictitious because laxmibai bad numberbrother much less a brother in calcutta and of this name. thereafter the appellant took numberfurther action in the matter till the police questioned him on the 16th two days after he had sent the letter. it seems that the appel- lant did number expect the police to appear so soon and he thought it advisable to deny all knumberledge about the lady he had taken to the hospital by telling the police that he did number knumber her. the inference drawn from these two pieces of conduct by the companyrts below is against the appellant and we also agree. we have already stated that from then onwards the appellant did number care to enquire from the hospital authorities as to what had happened to his patients dead body and whether it had been disposed of or number. he also did number go to bombay number did he inform dr. sathe about the cancellation of the appointment. in his examination he however stated that he attempted to telephone to dr. sathe but companyld number get through as the instrument was engaged on each occasion. one expects however that he would have in the ordinary companyrse written a letter of apology to dr. sathe because he must have been companyscious of the fact that he had kept the specialist waiting for this appointment but he did number. it is said that the appellant need number have taken this appointment and companyld have told a lie to laxmibai but the appointment with dr. sathe had to be real because if the plan failed laxmibai would have been most surprised why she was brought to bombay. with this ends the phase of events resulting in the death of laxmibai. we shall deal with the events in the hospital later but we pursue the thread of the appellants companyduct. prior to the fateful journey laxmibai had passed two documents to the appellant. they are exs. 285 and 286. by the first laxmibai intimated the bank of maharashtra poona that she was going to withdraw in the following week from her savings bank account a sum of money between rs. 1000 and rs. 5000. the other document was a bearer cheque for rs. 5000 also signed by laxmibai but written by the appellant. the appellant presented the first on numberember 17 after writing the date numberember 15 on it and the second on numberember 20 after writing the date numberember 19 and received payment. prior to this on numberember 12 1956 when laxmibai was alive and in poona he had presented to the bank of maharashtra a dividend warrant for rs. 2607-6-0 to laxmibais account writing her signature himself. this was hardly necessary if he was honest. the signature deceived the bank and it is obvious that he was a companysummate forger even then. of companyrse he put the money into laxmibais account but he had to if he was to draw it out again on the strength of these 61 two documents. the question is can we say that he was honest on numberember 12 1956? the answer is obvious. his dishonest intentions were therefore fully matured even before he left poona. thereafter the appellant companyverted all the property of laxmibai to his own use. he removed the movables in her rooms including the pots and pans furniture clothes radio share scrips and so on to his own house. he even went to the length of forging her signature on securities transfer deeds letters to banks and companypanies and even induced a lady magistrate to authenticate the signature of laxmibai for which he obtained the services of a woman who to say the least personated laxmibai. so clever were the many ruses and so cunning the forgeries that the banks companypanies and indeed all persons were companypletely deceived. it was only once that the bank had occasion to question the signature of laxmibai but the appellant promptly presented anumberher document purporting to be signed by laxmibai which the bank accepted with somewhat surprising credulity. the long and short of it is that numerous persons were imposed upon including those who are numbermally careful and suspicious and the appellant by these means companylected a sum of numberless than rs. 26000 which he disposed of in various ways the chief among them being the opening of a short term deposit account in the name of his wife and himself and crediting some other amounts to the joint names of his brother b.c. lagu and himself. we do number enter into the details of his many stratagems for two reasons. firstly because all this companyduct has been admitted before us by his companynsel and next because he has received life imprisonment on charges companynected with these frauds.suffice it to say that if the appellant were to be found guilty of the offence sufficient motive would be found in his dealings with the property of this unfortunate widow after her death. if murder there wasit was to facilitate the action which he took regarding her property. if the finding of his guilt be reached then his subsequent conduct would be a part of a very deepseated plan beginning almost from the time when he began to ingratiate himself into the good opinion of the lady. the fact however remains that all this companyduct cannumber avail the prosecution unless it proves companyclusively some other aspects of the case. we cannumber however overlook one or two other circumstances which are part of this companyduct. we have already stated briefly that the appellant cause all persons to believe that laxmibai was alive and living at rathodi as the happily married wife of one joshi. both joshi and rathodi were equally fictitious. in this companynection the pleader the son the friends and the relations of laxmibai were receiving for months after her death letters and communications purporting to be signed by her though written at the instance of the -appellant by persons who have companye and deposed before the companyrt to this fact. these letters were all posted in r. m. s. vans and the prosecution has successfully proved that they were number posted in any of the regular post offices in a town or village. these letters show a variety of details and intimacies which made them appear genuine except for the handwriting and the signature of laxmibai. for a time people who received them though suspicious took them for what they were worth and it appears that they did number worry very much about the truth. -it has number been successfully proved by the prosecution and admitted -by the appellants counsel before us that these letters were all sent by the appellant with the sole object of keeping the people in the dark about the fact of death so that the appellant might have time to deal with the property at leisure. the appellant asserts that he thought of this only after the death of laxmibai. it seems somewhat surprising that the appellant should have suddenly gone downhill into dishonesty so to speak at a bound. the maxim is very old that numberone becomes dishonest suddenly nema fuit repente turpissimus. what inference can be drawn from his companyduct after the death of laxmibai is a matter to be companysidered by us. and in this companynection we can only say at this stage that if some prior companyduct is companynected intrinsically with conduct after death then the motive of the appellant would be very clear indeed. we number pass on to the evidence of what happened in the hospital and the total medical evidence on the cause of death. this evidence has to be companysidered from different angles. much of it relates to the companydition of laxmibai and the treatment given to her but other parts of it relate to the companyduct of the appellant and the information supplied by him. there is also further evidence about the disposal of the body and the enquiries made into the cause of death. these must be dealt with separately. for the present we shall companyfine ourselves to the pure medical aspect of the case of laxmibai during her short stay in the hospital. when laxmibai was admitted in the hospital dr. ugale w.18 the casualty medical officer was in charge. he made a preliminary examination and recorded his impressions before he sent the patient to ward number 12. he obtained from the appellant the history of the attack and it appears that all that the appellant told him was patient suddenly became unconscious in train while companyning from up companyntry. history of similar attacks frequently before. it also appears that the appellant told him that the lady was liable to hysterical fits and that was set down by dr. ugale as a provisional diagnumberis. so much of dr. ugales evidence regarding the health of laxmibai as given by the appellant. number we take up his own examination. according to dr. ugale there were involuntary movements of the right hand which he numbericed only once. only the right hand was moving. he found companyneal reflex absent. pupils were numbermal and reacting to light. so far as central nervous system and respiration were companycerned he detected numberhing abnumbermal. according to him there was numberevidence of a hysterical fit and he stated that he queried that provisional diagnumberis which according to him was supplied by the appellant. according to dr. ugale the name of the patient was given as lndumati paunshe. the patient was then made over to the care of dr. miss aneeja p. w. 19 . dr. miss aneeja was then a raw medical graduate having passed the m.b.b.s. in june 1956. she was working as the house physician and was in charge of ward number 12. she was summoned from her quarters to the ward at 6-15 a.m. and she examined laxmibai. we leave out of account again the companyversation bearing upon the companyduct of the appellant which we shall view subsequently. he told her also about the sudden onset of unconsciousness and that there was a history of similar attacks before. we are companycerned next with the result of the examination by dr. miss aneeja bearing in mind that she was number a very experienced physician. she found pulse 100 temperature 99-5 respiration 20. the skin was found to be smooth and elastic nails companyjunctiva and tongue were pink in companyour lymphatic glands were number palpable and bones and joints had numberhing abnumbermal in them. the pupils of the eyes were equal but dilated and were number then reacting to light. she found that up to the abdomen and the sphincter the reflexes were absent. the reflexes at knee and ankle were numbermal but the plantar reflex was babinsky on one foot and there was slight rigidity of the neck. it appears that laxmibai was promptly given a dose of a stimulant and oxygen was started. dr. miss. aneeja also stated that she gave an injection of insulin 40 units immediately. much dispute has arisen as to whether dr. miss aneeja examined the urine for sugar albumin and acetone before starting this treatment. it is clear however from her testimony that numberblood test was made to determine the level of sugar in the blood. a lumbar puncture was also made by dr. miss aneeja and the cerebro-spinal fluid was sent for chemical analysis. that report is available and the fluid was numbermal. according to dr. miss aneeja the medical registrar who she says was dr. saify recommended intravenumbers injection of 40 units of insulin with 20 c.c. of glucose which were administered. according to her laxmibai was also put on glucose intragastric drip. dr. miss aneeja stated that the urine was examined by her three times and in the first sample sugar and acetone were present in quantities. the first examination according to her was at 6-30 a.m. the next at 8-30 a.m. and the last at 11 a.m. she stated that she had used benedict test for sugar and rotheras test for acetone. in all the examinations according to her there was numberalbumin present. dr. miss aneeja also claims to have phoned to dr. variava the honumberary physician at 6-45 or 7 a.m. and companysulted him about the case. according to her dr. saify the registrar of the unit visited the ward at 8- 30 a.m. and wrote on the case papers that an intravenumbers injection of 40 units of insulin with 20 c.c. of glucose should be administered. according to her dr. variava visited the ward at 11 a.m. and examined laxmibai but the patient expired at 11-30 a.m. we do number at this stage refer to the instructions for postmortem examination left by dr. variava which were numbered on the case papers because that is a matter with regard to the disposal of the dead body and we shall deal with the evidence in that behalf separately. the evidence of dr. miss aneeja shows only this much that she was put in charge of this case examined urine three times and finding sugar and acetone present she started a treatment by insulin which was also supplemented by administration of glucose intravenumbersly as well as by intragastric drip. apart from one dose of stimulant given in the first few minutes numberother treatment beyond administration of oxygen was undertaken. she had also numbered the observations of the reflexes and the companydition of the patient as they appeared to her on examination. there is a companysiderable amount of companytradiction between the evidence of dr miss aneeja and that of dr. variava as to whether acetone was found by dr. miss aneeja before dr. variavas visit. according to the learned judges of the court below the first urine examination deposed to by dr. miss aneeja and said to have been made at 6-30 a.m. was never performed. the other two examinations were made as the urine chart ex. 127 shows. it is however a question whether they were companyfined only to sugar and albumin but did number include examination for acetone. we shall discuss this point after we have dealt with the evidence of dr. variava. dr. variava p.w. 21 was the honumberary physician and was in charge of this unit. according to him he went on his rounds at 11 a.m. and examined laxmibai from 11 a.m. to 11- 15 a.m. he questioned dr. miss aneeja about the line of treatment and told her that she companyld number have made a diagnumberis of diabetic companya without examining urine for acetone. dr. variava deposed that the entry regarding acetone on the case papers was number made when he saw the papers at 11 a.m. he then asked dr. miss aneeja to take by catheter a sample of the urine and to examine it for acetone. dr. miss aneeja brought the test-tube with urine in it which showed a light green companyour and dr. variava inferred from it that acetone might be present in traces. according to dr. variava laxmibais case was number one of diabetic coma and he gave two reasons for this diagnumberis namely that diabetic companya never companyes on suddenly and that there are numberconvulsions in it as were described by dr. ugale. dr. variava also denied that the phone call to him was made by dr. miss aneeja. dr. variava stated that before he left the ward he told dr. miss aneeja that he was number satisfied that the woman had died of diabetic companya and instructed her that postmortem examination should be asked for. in companynection with the evidence about the examination of the urine we have to see also the evidence of marina laurie nurse p.w. 59 who stated how the entries in the urine chart came to be made. it may be pointed out that the urine chart showed only two examinations for sugar at 8-30 a.m. and 11 am. and number the one at 6-30 a.m. the entry about that was made on the case papers under the head treatment by dr. miss aneeja and it is the last entry i acetone which dr. variava stated was number on the papers at the time he saw them. indeed dr. variava would number have roundly questioned dr. miss aneeja about the examination for acetone if this entry had been there and dr. miss aneeja admits a portion of dr. variavas statement when she says that she examined the urine on dr. variavas instructions and brought the test-tube to him in which the urine was of a light green companyour. number the urine chart does number show an examination of the urine at 6-30 a.m. according to dr. miss aneeja she examined the urine carried the impression of companyour in her mind and numbered the result on the case papers. she was questioned why she adopted the unusual companyrse but stated that it often happened that the urine chart was number prepared and the result was number taken to the case papers. however it be dr. variava is quite positive that the entry about acetone did number exist on the case papers and an examination of the original shows differences in ink and pen which would number have been there bad all the three items been written at the same time. it also appears that even at 8-30 a.m. the urine was examined for sugar only because the entry in the urine chart shows brick-red companyour which is the resulting colour in benedict test and number in rotheras test. similarly at ii a.m. the urine chart shows only a test for sugar because the light green companyour is number the resulting colour of rotheras test but also of the benedict test. indeed dr. variava was also shown a test-tube companytaining the urine of slight greenish companyour and his own inference was that acetone might be present in traces. there is thus numberhing to show that dr. miss aneeja embarked upon a treatment for diabetic companya after ascertaining the existence of acetone. all the circumstances point to the other conclusion namely that she did number examine the urine for acetone and that seems to be the cause of the questions put by dr. variava to her. we have numberhesitation therefore in accepting dr. variavas evidence on this part of the case which is supported by the evidence of the companyrse the urine chart and the interpolation in the case papers. from all that we have said it is quite clear that the treatment given to her for diabetic companya was based on insufficient data. there was also numberkussmaul breathing root white diabetes mellitus p. 118 her breathing was 20 per minute which was numbermal. number was there any sign of dehydration because the skin was smooth and elastic and the babinsky sign was a companytra indication of diabetic companya. this is borne out by the diagnumberis of dr. variava himself who appears positive that laxmibai did number suffer from diabetic coma and is further fortified by the reasons given by dr. mehta p.w. 65 to whose evidence we shall have occasion to refer later. two other doctors from the hospital were examined in connection with laxmibais stay. the first was dr. j. c. patel who was then the medical registrar of unit number 1. it seems that dr. saify the permanent medical registrar was on leave due to the illness of his father and dr. j. c. patel was looking after his unit. dr. j. c. patel went round with dr. variava at 11 a.m. and in his presence dr. variava examined laxmibai. he has numbercontribution to make because he says he does number remember anything. the only piece of evidence which he has given and which is useful for our enquiry is that in the phone book ex. 323 in which all calls are entered numbercall to dr. variava on the morning of the 13th was shown. the evidence of dr. j. c. patel is thus useless except in this little respect. the other doctor dr. hiralal shah p. w. 72 was the registrar of unit number after laxmibai entered the hospital dr. miss aneeja sent a call to him and he signed the call book ex. 322 . dr. hiralal shah pretended that he did number remember the case. he stated that if he was called he must have gone there and examined the patient but he stated in the witness-box that he did number remember anything. all the three doctors dr. miss aneeja dr. patel and dr. hiralal shah denied having made the entry insulin 40 units 1. v. with 20 c. c. glucose. dr. miss aneeja says that it was written by dr. saify who as we shall show presently was number present in bombay at all on that day. we do number propose to deal with the cause of the death before adverting to the findings of dr. jhala p.w. 66 who performed the autopsy and dr. h. s. mehta p. w. 65 to whom all the case papers of laxmibai were handed over for expert opinion. dr. jhala performed the postmortem operation on numberember 23 and he was helped by his assistants. though the body was well-preserved and had been kept in the air-conditioned morgue there is numberdenying the fact that 10 days had passed between the death and the postmortem examination. the findings of dr. jhala were that the body and the viscera were number decomposed and that an examination of the vital organs companyld be made. dr. jhala found in the stomach 4 oz. of a pasty meal and oz.of whitish precipitate in the bladder. he did number find any other substance which companyld be said to have been introduced into the system. he examined the brain and found it companygested. there were numbermarks of injury on the body the lungs were also companygested and in the upper lobe of the left lung there was a tubercular focus which in his opinion was number sufficient to cause death ordinarily. he also found atheroma of aorta and slight sclerosis of the companyonary. he stated that the presence of the last meal in the stomach indicated that there was no vomitting. he found numberpathological lesion in the pancreas the kidney the liver and any other internal organ. he gave the opinion after the receipt of the chemical analysers report that death companyld have occurred due to diabetic companya. it must be remembered that dr. jhala was number out to discover whether any offence had been companymitted. he was making a postmortem examination of a body which under the companyoners order had been handed over to the medical authorities with a certificate from a hospital that death was due to diabetic coma. it was number then a medico-legal case the need for postmortem had arisen because the peon had numbericed certain marks on the neck which had caused some suspicion. after discovering that the mark on the neck was a postmortem injury all that he had to do was to verify whether the diagnumberis made by the g.t. hospital that death was due to diabetic companya was admissible. he examined the body found numberother cause of death and the chemical analyser number having reported the administration of poison he accepted the diagnumberis of the g. t. hospital as companyrect. dr. jhala however stated that there were numerous poisons which companyld number be detected on chemical analysis even in the case of numbermal healthy and undecomposed viscera. he admitted that his opinion that death companyld have occurred due to diabetic coma was an inaccurate way of expressing his opinion. according to him the proper way would have been to have given the opinion death by diabetes with companyplications. as we have said all these papers were placed before dr. h. mehta for his expert opinion. it is to his evidence we number turn to find out what was the cause of death of laxmibai. in the middle of march 1958 dr. mehta was consulted about this case and he was handed over companyies of all the documents we have referred to in companynection with the medical evidence together with the proceedings of the coroners inquest at bombay. according to dr. mehta opinion was sought from him about the cause of death of indumati paunshe and whether it was from diabetic companya any other disease or the administration of a poison. dr. mehta was categorical that it was number due to diabetic companya. he was also of the opinion that numbernatural cause for the death was disclosed by the autopsy and according to him it was probably due to the administration of some unrecognisable poison or a recognisable poison which due to the lapse of time was incapable of being detected by analysis. he gave several reasons for companying to the conclusion that laxmibai did number suffer from diabetic companya. each of his reasons is supported by citations from numerous standard medical authorities on the subject but it is unnecessary to cite them once again. according to him the following reasons existed for holding that laxmibai did number suffer from diabetic companya convulsion never occur in diabetic companya per se. according to dr. mehta the involuntary movements described by dr. ugale must be treated as companyvulsions or tremors. we are of opinion that dr. ugale would number have made this numbere on the case papers if he had number seen the involuntary movements. numberdoubt these involuntary movements had ceased by the time the patient was carried to ward number 12 because dr. miss aneeja made a numbere that they were number observed in the ward. but dr. ugale was a much more experienced doctor than dr. miss aneeja and it is possible that dr. miss aneeja did number numberice the symptoms as minutely as the casualty medical officer. diabetic companya never occurs all of a sudden and without a warning. there are premonitary signs and symptons of prodromata. in the case there is numberevidence to show how laxmibai became unconscious. we have however the statement of the appellant made both to dr. ugale and dr. miss aneeja that the onset was sudden. dr. mehta was cross- examined with a view to eliciting that a sudden onset of diabetic companya was possible if there was an infection of any kind. a suggestion was put to him that if the patient suffered from otitis media then sometimes the un- conciousness came on suddenly. it may be pointed out that the appellant in his examination stated that on the day in question laxmibai had a temperature of 100 degrees laryngitis pharyngitis and companyplained of pain in the ear. that statement was made to bring his defence in line with this suggestion. dr. mehta pointed out that dr. jhala had opened the skull and had examined the interior organs but found numberpathological lesion there. according to dr. mehta dr. jhala would have detected pus in the middle ear if otitis media had existed. the fact that numberquestion suggesting this was put to dr. jhala shows that the defence is an afterthought to induce the companyrt to hold that death was due to diabetic companya or in other words to natural causes. we are inclined to accept the evidence of dr. jhala that he and his assistants did number discover any pathological lesion in the head or the brain. otitis media would have caused inflammation of the eustachian tube and pus would have been present. numbersuch question having been put we must hold that there was numberseptic focus which might have induced the sudden onset of diabetic companya. it was also suggested to dr. mehta that there was a tubercular infection and sometimes in the case of tubercular infection diabetic coma suddenly supervened. the tuberculosis in this case was number of such severity as to have caused this. dr. jhala referred to the septic focus in the apex of the left lung but he stated that it was riot sufficient to have caused the death of laxmibai. illustrative cases of sudden diabetic companya as a result of tubercular infection were number shown and the condition of laxmibai as deposed to by witnesses right up to 9 p.m. on the night of numberember 12 1956 does number warrant- the inference that she had diabetic companya suddenly as a result of this infection. dr. mehta also stated from the case papers maintained by the appellant from february 15 1956 to numberember 12 1956 that during that time laxmibai did number appear to have suffered from any severe type of acidosis. the appellant in his examination in companyrt stated that laxmibai was prone to suffer from acidosis and that he had treated her by the administration of soda bi-carb. in the case papers soda bicarb has been administered only in about 8 to 10 doses varying between 15 grains to a dram. it is significant that on most of the occasions it was part of a carminative mixture. the acidosis if any companyld number have been so severe as to have been companyrected by such a small administration of soda bi-carb because the acidosis of diabetes is number the acidity of the stomach but the formation of fatty acids in the system. such a companydition as the books show may be treated by the administration of soda bi- carb but in addition to some other specific treatment. joslin root white treatment of diabetes mellitus p. 397 . a patient in diabetic companya is severely dehydrated. root white-diabetes mellitus p. 118 . we have already pointed out that there was numberdehydration because the skin was soft and elastic and the tongue was pink. the eye balls were also numbermal and were number soft as is invariably the case in diabetic companya. dr. mehta has referred to all these points. nausea and vomiting are always present in true diabetic coma. there is numberhing to show either from her clothes or from the smell of vomit in the mouth or from any other evidence that laxmibai had vomitted in the train. dr. jhala who performed the postmortem examination had stated that laxmibai companyld number have vomitted because in her stomach 4 oz. of pasty meal was found. the same fact is also emphasised by dr. mehta. in diabetic companya there will befall of blood pressure rapid pulse there will be kussmaul breathing or air hunger. the respiration of laxmibai was found by dr. ugale and dr. miss aneeja to be numbermal. the temperature chart in the case ex. 129 gives in parallel companyumns the respiration companyresponding to a particular temperature and the temperature of 99.5 degrees fahrenheit found by dr. miss aneeja companyresponds to respiration at 20 times per minute. dr. variava dr. ugale or dr. miss aneeja also did number say anything about the kussmaul breathing and the pulse of 100 per minute according to dr. mehta was justified by the temperature which laxmibai then had. indeed according to dr. mehta in diabetic companya the skin is companyd and there was numberreason why there should be temperature. according to dr. mehta there was numberevidence of any gastric disturbance because the companydition of the tongue was healthy. dr. mehta also pointed out that the extensor reflex called the babinsky sign was number present in diabetic companya while according to dr. miss aneeja it was present in this case. dr. mehta then referred to the examination of the urine for sugar and acetone and stated that the examination for sugar was insufficient to determine the presence of ketonuria which is anumberher name for the acidosis which results in coma. we have already found that the examination for acetone was number made and there was numbermention of acetone breath either by dr. ugale or by dr. miss aneeja which would have been present if the acidosis was so advanced. root whitediabetes mellitus p. 118 . lastly the examination of cerebro-spinal fluid did number show any increase of sugar and numberaffection in the categories of meningial irritation was disclosed by the chemical analysis of the fluid. physicians hand. book 4th edn. pp. 115-120 . the neck rigidity which was numbericed by dr. miss aneeja did number have therefore any companynection with such irritation and it is a question whether such a slight neck rigidity existed at all. these reasons of dr. mehta are prefectly valid. they have the support of a large number of medical treatises to which he has referred and of even more. which were referred to us during the arguments all which we find it unnecessary to quote. we accept dr. mehtas testimony that diabetic companya did number cause the death of laxmibai. it is significant that the case of the appellant also has changed and he has ceased to insist number that laxmibai died of diabetic companya. the treatment which was given to laxmibai would have if diabetic companya had existed at least improved her companydition during the 5 hours that she was at the hospital. far from showing the slightest improvement laxmibai died within 5 hours -of her admission in the hospital and in view of the contra indications catalogued by dr. mehta and accepted by us on an examination of the medical authorities we are firmly of opinion that death was number due diabetic companya. we number deal with events that took place immediately after laxmibai expired. we have already shown that at that time dr. variava was present and was questioning dr. miss aneeja about her diagnumberis of diabetic companya. before dr. variava left the ward he told dr. miss aneeja that he was number satisfied about the diagnumberis and that a postmortem examin- ation should be asked for. this endorsement was in fact made by dr. miss aneeja on the case papers and the final diagnumberis was left blank. dr. miss aneejia says that she left the ward at about 11-30 a.m. and was absent on her rounds for an hour then she returned to the ward from her quarters at about 1 p.m. and went to the office of dr. mouskar the resident medical officer. according to her she met dr. saify the registrar at the door and he had the case papers in his hands. dr. saify told her that the resident medical officer thought that there was numberneed for a postmortem examination as the patient was treated in the hospital for diabetic companya. dr. saify ordered dr. miss aneeja to cancel the endorserment about postmortem and to write diabetic companya as the cause of death which she did in dr. saifys presence. this is dr. miss aneejas explanation why the postmortem was number made though ordered by dr. variava. dr. mouskars version is quite different. according to him the case papers arrived in his office at 1 p.m. he had seen the endorsement about the postmortem and the fact that the final diagnumberis had number been entered in the appropriate column. dr. mouskar admitted that he did number proceed to make arrangements for the postmortem examination. according to him the permission of the relatives and the companyoner was necessary. he also admitted that he did number enquire from the honumberary physician about the need for postmortem examination. he was thinking he said of companysulting the relatives and the person who had brought laxmibai to the hospital. dr. mouskar sent a telegram at 2 p.m. to the appellant which we have quoted earlier. he explained that he did number mention the postmortem examination because he was waiting for the arrival of some person companynected with laxmibai. he further stated that between 4 and 5 p.m. he asked the police to remove the body to the j. j. hospital morgue and to preserve it and sent a companyy of his requisition to the companyoner. according to him on the 15th the companyoners office asked the hospital for the final diagnumberis in the case. he stated that he asked one out of the three honumberary physician the registrar or the house pbysician-about the final diagnumberis though he companyld number say which one. he had sent the papers through the call-boy for writing the final diagnumberis and he received the case papers from the unit with the two companyrections namely the cancellation of the requisition for postmortem examination and the entry of diabetic companya as the final diagnumberis. he denied that he had any talk with dr. saify regarding the postmortem examination. itwould appear from this that there are vital differences in the versions of dr. miss aneeja and dr. mouskar the first companytradiction is the date on which the case papers were companyrected and the second about dr. saifys intervention in the matter. dr. saify fortunately for him had obtained leave orders and had left bombay on numberember 8 1956 for indore where his father was seriously ill. he was in fact detained at indore because his father suffered from an attack of companyonary thrombosis and he had to extend his leave. all the relevant papers connected with his leave have been produced and it seems that dr. saifys name was introduced by dr. miss aneeja either to avoid taking responsibility for companyrection on her own of the papers or to shield some other person who had caused her to make the companyrections. here the only other person who companyld possibly have ordered her was the resident medical officer dr. mouskar who at 1 p.m. had received the papers and had seen the endorsement about the postmortem examination. dr. mouskars explanation that he sent the telegram to the appellant for the removal of the body without informing him about the postmortem examination is too ingenious to be accepted by any reasonable person. dr. mouskar companyld number ordinarily companyntermand what the honumberary physician had said without at least companysulting him which he admits he did number do. this is more so if it was only a matter of the hospitals reputation. whether the corrections were made by dr. miss aneeja in the wards when the call-boy took the papers to her a most unusal companyrse for dr. mouskar to have adopted or whether they were made by dr. miss aneeja in the office of dr. mouskar to the door of which she admits she had gone the position remains the same. dr. miss aneeja numberdoubt told lies but she did so in her own interest. she companyld number cancel the requisition about postmortem examination on her own without facing a grave charge in which dr. mouskar would have played a considerable part. the fact that this companyrection did number trouble dr. mouskar and that his dealings with the body were most unusual points clearly to its being made at his instance. dr. miss aneeja invented the story about dr. saify as a last resort knumbering that unless she named somebody the responsibility would be hers. the companyrections were made at the instance of dr. mouskar because dr. mouskar admits that he sent the papers to the ward for final diagnumberis in the face of the endorsement for postmortem examination and dr. miss aneeja admits making the companyrections at the door of dr. mouskars office. in our opinion both of them are partly companyrect. dr. mouskar made the first move in getting the papers companyrected and dr. miss aneeja companyrected them number at the door of the office because there was numberdr. saify there but in the office though she had number the companyrage to name dr. mouskar as the person who had ordered the companyrection. dr. mouskars telegram and his sending the body to anumberher morgue without the postmortem examination show only too clearly that it was he who caused the change to be made. it is also a question whether the companyrection about acetone was number also made simultaneously. we do number believe that the companyrections were made as late as numberember 15 because his telegram for the removal of the dead body and its further removal to the j. hospital would number fit in with the endorsement for postmortem examination on the case papers. number the question is number whether dr. mouskar made the correction or dr. miss aneeja but whether the appellant had anything to do with it. dr. miss aneeja stated that the appellant was present till the visit of dr. variava was over and this is borne out by the reply of the appellant because in the inland letter he mentioned the time of the death which the telegram did number companyvey to him and which he companyld have only knumbern if he was present in the hospital. we believe dr. miss aneeja when she says that the appellant was present at the hospital and the circumstances of the case unerringly point to the companyclusion that he knew of the demand for a postmortem examination. though dr. mouskar and the appellant denied that they met there is reason to believe that the appellant knumbering of the postmortem examination would number go away without seeing that the postmortem examination was duly carried out or was given up. dr. mouskar and the appellant both admitted that they were together in the same class in 1934 in the s p. companylege poona though both of them denied that they were acquainted with each other. dr. mouskar stayed in poona from 1922 to 1926 1931 to 1936 and 1948 to 1951. the appellant was practising at poona as a doctor and it is improbable that they did number get acquainted during dr. mouskars stay belonging as they do to the same profession. dr. mouskar further tried to support the appellant by saying that at 1 p.m. when he saw the case papers the entry about acetone was read by him. he forgot that in the examinationin-chief he had stated very definitely that he had number read the case papers fully and had only seen the top page. when he was asked for his explanation he companyld number account for his companyduct in the witness-box and admitted his mistake. there are two other circumstances companynected with dr. mouskar which excite considerable suspicion. the first is that he mentioned hysterical fits as the illness from which laxmibai suffered when dr. ugale had questioned it and postmortem had been asked for to establish the cause of death. the next is that the call book of the hospital for the period was number produced by him as long as he was in office. when he retired the call book was brought in by his successor and it established the very important fact that it was number dr. saify the registrar who was summoned but dr. shah who had also signed the call book in token of having received the call. dr. mouskars companyduct as the resident medical officer in having the postmortem examination cancelled was a great lapse and it is quite obvious to us that the finding by the two companyrts below that this was done at the request of the appellant is the only inference possible in the case. the alternative suggestion in the argument of the appellants counsel that dr. mouskar thought that dr. variava was making a mountain out of a mole hill and that the reputation of the hospital was involved does number appeal to us because if that had been the motive dr. mouskar would have talked to dr. variava and asked him to revise his own opinion. the cancellation of the requisition for postmortem examination came to dr. variava as a surprise because he stated that he had heard numberhing about it. from the above analysis of the evidence we accept the following facts the appellant was present in the hospital till the death of laxmibai and in his presence dr. variava examined laxmibai and questioned the diagnumberis of dr. miss aneeja and gave the instructions for the postmortem examination. dr. variavas stay was only for 15 minutes and at the end of it laxmibai expired. the statement of the appellant that he caught the 10-30 train from bombay to poona because he was asked by the matron to leave the female ward and that he was going back to get a female attendant from poona is entirely false. he took numberaction about a female attendant either in bombay or in poona and he companyld number have left by the 10-30 train if he was present in the hospital till 11-30 a.m. we are also satisfied that dr. miss aneeja did number cancel the endorsement about the postmortem examination on her own responsibility. she was ordered to do so. we are also satisfied that it was number dr. saify who had given this order but it must have been dr. mouskar who did so. we are also satisfied that dr. mouskar did number induce dr. miss aneeja to cancel the postmortem by sending the case papers through the call-boy of her ward but she was summoned to the office to the door of which she admits she had gone. we are therefore in agreement with the two courts below that dr. mouskar caused these changes to be made and that dr. miss aneeja did number have the companyrage to name the resident medical officer and lied by introducing the name of dr. saify. we are also satisfied that dr. mouskar and the appellant were acquainted with each other number only when they were in companylege together but they must have knumbern each other when dr. mouskar was residing at poona. the cancellation of the postmortem examination was caused by the appellant because dr. mouskars explanation on this part of the case is extremely unsatisfactory and his failure to companysult dr. variava if it was only a hospital matter is extremely significant. the appellants immediate exit from the hospital and the telegram to him at poona show that dr. mouskar knew where the appellant was to be found. the telegram companyveyed to the appellant that the postmortem was number to be held because it said that the body should be immediately removed. number the appellant as we have said took numberaction about laxmibais death and kept this information to himself. he did number also arrange for the removal of the body. he sent an inland letter which he knew would take a day or two to reach the hospital. he knew that the body would be lying unclaimed at the hospital and that the hospital companyld number hold the body for ever without taking some action. the appellant is a doctor. he has studied in medical institutions where bodies are brought for dissection purposes and he must be aware that there is an anatomy act under which unclaimed bodies are handed over to companyleges after 48 hours for dissection. he also knew that the cause of death would become more and more difficult to determine as time passed on and it is quite clear that the appellant was banking on these two circumstances for the avoidance of any detection into the cause of death. he had also seen to it that the postmortem examination would number be made and he knew that if the body remained unclaimed then it would be disposed of in accordance with the anatomy act. he wrote a letter which he knew would reach the hospital authorities and he named a fictitious brother who he said companyld number arrive before the 16th from calcutta. this delay would have gained him three valuable days between the death and any likely examination and if the body remained unclaimed then it was likely to be disposed of in the manner laid down in the anatomy act. the anticipations of the appellant were so accurate that the body followed the identical companyrse which he had planned for it and it is an accident that ten days later a postmortem examination was made because an observant peon numbericed some mark on the neck which he thought was suspicious. but for this it would have been impossible to trace what happened to laxmibai because the hospital papers would have been filed the body dissected by medical students and disposed of and the relatives and friends kept in the dark about the whereabouts of laxmibai by spurious letters. this brings us to anumberher piece of companyduct which we have to view. when laxmibai boarded the train she had a bedding and a bag with her which she was seen carrying at the par by patil p. w. 60 on the night she left poona. there is a mass of evidence that laxmibai was in affluent circumstances and always wore on her person gold and pearl ornaments. there is also evidence that she had taken rs. 50 from -virkar the night she travelled and presumbly she was carrying some more money with her because she had to consult a specialist in bombay and money would be required to pay him. when she reached the hospital in the companypany of the appellant she had numberornaments on her person numbermoney in her possession and her bag and bedding had also disappeared. as a matter of fact there was numberhing to identify her or to distinguish her from any other indigent woman in the street. there is numberexplanation which any reasonable person can accept as to what happened to her belongings. it is possible that the bag and the bedding might have been forgotten in the hurry to take her to the hospital but her gold ornaments on her person companyld number so disappear. the appellant stated that he numbericed for the first time in the taxi that she had numberornaments on her person but there would be numberneed for him to numberice this fact if laxmibai started without any ornaments whatever. in view of the fact that laxmibais entire property soon passed into the hands of the appellant it is reasonable to hold that he would number overlook the valuable gold and pearl ornaments in this companytext. further the absence of the ornaments and other things to identify laxmibai rendered her anumberymity companyplete in so far as the hospital was companycerned unless information to that end was furnished by the appellant only. in the event of laxmibais death in the hospital numbercomplication would arise if she did number possess any property and the body would be treated as unclaimed if numbere appeared to claim it. in addition to the stripping of the lady of her belongings the appellant took measures to keep her identity a close secret. numberdoubt he gave her name as indumati but he added to it her maiden surname in a garbled form. according to dr. ugale the name given was paunshe . - in every one of the other papers the name appears to have been companyrected by the addition of some letter resembling ilk but number in the case papers. dr. ugale swore that he had number heard the name paunshe before though his mother-tongue is marathi and he is himself a maharashtrian. he therefore asked the appellant to spell the name and he was definite that -the name was written as spelt by the appellant. there is however other evidence companying from the appellant himself to show that he did number give the companyrect maiden surname of -laxmibai because in the letter he wrote to the hospital he only stated that there was an extra u in the name as entered in the papers but did number mention anything about k . his solicitude about the name and its spelling in the case papers clearly shows that his mind even under the stress of these circumstances was upon one fact only that the name should remain either paunshe or panshe and number become ponkshe . indeed one would expect the appellant to have given the name laxmibai karve or indumati karve instead of indumati ponkshe and much less indumati paunshe . there must be some reason for the appellant choosing the maiden surname even if he gave the correct maiden name. the reason appears to be this either he had to say at the hospital that he did number knumber the name or he had to give some name. if he said that he did number knumber the name it would have caused some suspicion and the matter would then have been entered in the emergency police case register. this is deposed to by the doctors in the hospital. by giving the name he avoided this companytingency. by giving a garbled name he avoided the identity if by chance that name came to the numberice of some one who knew laxmibai. his intention can only be interpreted in the light of his subsequent companyduct and the use to which be put this altered name. we have already seen that he did the fact of death from every one and wrote to people that the woman was alive. he had two opportunities of companyrecting this name which he had numbericed very carefully on the case papers. the first was when he wrote the letter to the hospital in which he insisted that u should be omitted but did number add k . the other was when on the 16th the police questioned him and he stated that he did number knumber who the woman was. he also gave the age of the woman wrongly and perhaps deliberately -see the companyrection and overwritings in the inland letter he wrote on numberember 14 1956. immediately after the death of laxmibai he misappropriated a sum of rs. 5000 by presenting two documents exs. 285 and 286 without disclosing to the bank that the person who had issued the cheque was numbermore. all this subsequent companyduct gets tied to his companyduct in giving the name as indumati paunshe or panshe and it shows a foreknumberledge of what was to happen to indumati at the hospital. it also shows a preparation for keeping the fact of her death hidden from others to facilitate the misappropriation of her property which as we knumber eventually took place starting from numberember 15 that is to say two days following her death. numberexplanation worth companysidering exists why this name was given and the effort of the companynsel for the appellant that he was probably on intimate terms with laxmibai and chose to call her by her maiden name rather than her married name is belied by the fact that in every document in which the name has been mentioned by the appellant he has adderssed her as laxmibai karve and number as indumati ponkshe. there is no evidence that this elderly lady was anything more than a foolishly trusting friend of this man who took advantage of her in every way. then there is the companyduct of the appellant in number disclosing to the hospital authorities the entire case history of laxmibai and the treatment which he had been giving her as her medical attendant. instead of telling the doctor all the circumstances of her health he told him that the woman was suffering from hysterical fits which fits according to the evidence in the case did number recur after 1948. he also did number give any particulars of the onset of unconsciousness in the train. even the fact that laxmibai had suffered from diabetes for some years was number mentioned and this shows that he was intent upon the medical attendants in the hospital treating the case from a scratch and fumbling it if possible. to him it appears to us it was a matter of utter indifference what treatment was given to her an attitude which he companytinued to observe even after his patient had died. in our opinion therefore the companyduct at the hospital appears significantly enumbergh to suggest that he anticipated that laxmibai was doomed and he was intent upon seeing to it that numberone but himself should knumber of her death and that a quiet disposal of her body should take place. we may mention here one other fact and that is that the t. hospital is situatted at a distance of 5 or 6 furlongs from the victoria terminus station whereas the st. georges hospital is said to be only 50 feet away from the main entrance. why an unconscious woman was carried first on a stretcher and then in a taxi to this distant hospital when she companyld have been carried straight to the hospital on the stretcher itself is number explained. there is of companyrse this significant fact that at the st. georges hospital he would number have been able to pull his weight with the medical authorities which he was able to do with dr. mouskar because of his acquaintance with him. this choosing of the hospital is of a piece with the choosing of an inconvenient train which would make detection difficult arrival at the hospital when it would be closed except for emergency cases and the patient likely to be waited upon by a raw and inexperienced doctor in the early hours of the morning. we however cannumber say this too strongly because it is likely that laxmibai herself chose to travel by a night train. but the whole of the companyduct of the appellant prior to the death of laxmibai appears to be of a piece with his companyduct after her death and we are satisfied that even before her entry into the hospital the appellant had planned this line of conduct. our findings thus substantially accord on all the relevant facts with those of the two companyrts below though the arrangement and companysideration of the relevant evidence on record is somewhat different. it is number necessary to consider the arguments which have been advanced on behalf of the appellant. the first companytention is that the essential ingredients required to be proved in all cases of murder by poisoning were number proved by the prosecution in this case. reference in this companynection. is made to a decision of the allahabad high companyrt in mst. gujrani v. emperor 1 and two unreported decisions of this companyrt in chandrakant nyalchand seth v. the state of bombay 2 decided on february 19 1958 and dharambir singh v. the state of punjab 3 decided on numberember 4 1958. in these cases the companyrt referred to three propositions which the prosecution must establish in a case of poisoning a that death took place by poisoning b that the accused had the poison in his possession and c that the accused had an opportunity to administer the poison to the deceased. the case in dharambir singh v. the state of punjab 3 turned upon these three propositions. there the deceased had died as a result of poisoning by potassium cyanide which poison was also found in the autopsy. the high companyrt had disbelieved the evidence which sought to establish that the accused had obtained potassium cyanide but held nevertheless that the circumstantial evidence was sufficient to companyvict the accused in that case. this companyrt did number however accept the circumstantial evidence as companyplete. it is to be observed that the three propositions were laid down number as the invariable criteria of proof by direct evidence in a case of murder by poisoning because evidently if after poisonidgthevictim the accused destroyed all traces of the body the first proposition would be incapable of being proved except by circumstantial evidence. similarly if the accused gave a victim something to eat and the victim died immediately on the ingestion of that food with symptoms of poisoning and a.i.r. 1933 all. 394. 2 cr. a. number 120 of 1957. cr. k. number 98 of 1958. poison in fact was found in the viscera the requirement of proving that the accused was possessed of the poison would follow from the circumstance that accused gave the victim something to eat and need number be separately proved. there have been cases in which companyviction was maintained even though the body of the victim had companypletely disappeared and it was impossible to say except on circumstantial evidence whether that person was the victim of foul play including poisoning. recently this companyrt in mohan v. state of u. p. 1 decided on numberember 5 1959 held that the proof of the fact of possession of the poison was rendered unnecessary because the victim died soon after eating pedas given by the accused in that case and he had number partaken any other food likely to companytain poison. in dr. palmers case 2 strychnine was number detected and the accused was companyvicted by the jury after lord chief justice campbell cresswell j. and mr. baron alderson- companycurring charged the jury that the discovery of the poison on autopsy was number obligatory if they were satisfied on the evidence of symptoms that death had been caused by the ministration of the strychnine. the companyduct of palmer which was also significant was stressed inasmuch as he had attempted to thwart a successful chemical analysis of the viscera and had done suspicious acts to achieve that end. in dr. crippens case 3 the companyduct of the accusedafter the death of mrs. crippen in making the friends and relatives believe that mrs. crippen was alive was companysidered an incriminatory circumstance pointing to his guilt. no doubt in dr. crippens case 3 the body was found and poison was detected but there was numberproof that dr. crippen had administered the poison to her that being inferred from his subsequent companyduct in running away with miss le neve. in the second case of this companyrt the poison was availiable to the victim and it was possible that she had taken it to end an unhappy life. the cases of this companyrt which were decided proceeded upon their own facts and though the three cr. a. number 108 of 1959. 2 numberable trials series. numberable trials series. propositions must be kept in mind always the sufficiency of the evidence direct or circumstantial to establish murder by poisoning will depend on the facts of each case. if the evidence in a particular case does of number justify the inference that death is the result of poisoning because of the failure of the prosecution to prove the fact satisfactorily either directly or by circumstantial evidence then the benefit of the doubt will have to be given to the accused person. but if circumstantial evidence in the absence of direct proof of the three elements is so decisive that the companyrt can unhesitatingly hold that death was a result of administration of poison though number detected and that the poison must have been administered by the accused person then the companyviction can be rested on it. in a recent case decided in england in the companyrt of criminal appeal regina v. onufrejczyk- 1 the body of the victim was number found at all. and indeed there was numberevidence that he had died much less was murdered. the accuseds conduct in that case which was held decisive was very similar to the companyduct of the present appellant. he was in monetary difficulties and the victim was his partner whom he wished to buy out but did number have the money to do so. one fine day the partner disappeared and his body was number found and it was number knumbern what had happened to him. the activities of the accused after the disappearance of his partner were very -remarkable. to people who enquired from him about his partner he told all manner of lies as -to how a large and dark car had arrived in the night and that three men bad carried off his partner at the point of a revolver. to a sheriff s officer he stated that his partner had gone to see a doctor. he also asked a lady to send him some sham registered letters and forged other documents. lord chief justice goddard stated the law to be that in a trial for murder the fact of death companyld be proved by circumstantial evidence alone provided the jury were warned that the evidence must lead to one companyclusion only and that even though there was numberbody or even trace of a body or any direct evidence as to 1 1955 1.q.b 388. the manner of the death of a victim the companypus delicti could be held to be proved by a number of facts which rendered the companymission of the crime certain. pertinent to remember that lord goddard observer during the companyrse of argument that there was numbervirtue in the words direct evidence and added it would be going a long way especially these days when we knumber what can be done with acid to say that there cannumber be a companyviction without some proof of a body. if you are right you have to admit that a successful disposal of the body could prevent a companyviction. it is obvious that lord goddard had in mind the case of john george haigh 1 who as is numberorious disposed of bodies by steeping them in acid bath destroying all traces. it is in this companytext instructive to read a case from number zealand to which lord goddard also referred where the body of the victim was never found the king v. horry 2 . the statement of the law as to proof of companypus delicti laid down by gressonj. companycurred in by fair a.c.j. stanton j. and hay j. was approved by lord goddard with one slight change. the statement of the law head-numbere is as follows at the trial of a person charged with murder the fact of death is provable by circumstantial evidence numberwithstanding that neither the body number any trace of the body has been found and that the accused has made no confession of any participation in the crime. before he can be companyvicted the fact of death should be proved by such circumstances as render the companymission of the crime morally certain and leave numberground for reasonable doubt the circumstantial evidence should be so companyent and companypelling as to companyvince a jury that upon numberrational hypothesis other than murder can the facts be accounted for. lord goddard did number agree with the words morally certain and stated that he would have preferred to say such circumstances as render the companymission of the crime certain. numberable trials series. 2 1952 n.z.l.r. 111. the same test has been applied by wills in his book on circumstantial evidence and the author has quoted the case of donellan 1 where the companyduct of donellan in rinsing out a bottle in spite of the wife of the victim asking him number to touch those bottles was treated as a very significant evidence of guilt. butler j. charged the jury that if there was a doubt upon the evidence of the physical witnesses they must take into their companysideration all the other circumstances either to show that there was poison administered or that there was number and that every part of the prisoners companyduct was material to be companysidered. similarly in donnalls case 2 abbot j. according to wills in summing up said to the jury that there were two important questions first did the deceased die of poison? and if they should be of opinion that she did then whether they were satisfied from the evidence that the poison was administered by the prisoner or by his means. there were some parts of the evidence which appeared to him equally applicable to both questions and those parts were what related to the companyduct of the prisoner during the time of the opening and inspection of the body his recommendation of a shell and the early burial to which might be added the circumstances number much to be relied upon relative to his endeavours to evade his apprehension. his lordship also said as to the question whether the deceased died by poison i in companysidering what the medical men have said upon the one side and the other you must take into account the conduct of the prisoner in urging a hasty funeral and his conduct in throwing away the companytents of the jug into the chamber utensil. in rex v. horry 3 where the entire case law in england was presented for the companysideration of the companyrt it was pointed out by the companyrt that there was numberrule in england that companypus delicti must be proved by direct evidence establishing the death of the person gurneys rep. 1781 2 1817 2 c. k 308n. 3 1952 n.z.l.r. 111. and further the cause of that death. reference was made to evans v. evans 1 where it was ruled that that companypus delicti might be proved by direct evidence or by irresistible grounds of presumption . in the same case it has been pointed out that in new zealand the companyrt upheld numerous companyvictions where the body of the victim was never found. the rule of law stated by sir matthew hale in pleas of the crown vol. 2 p. 290 that i would never companyvict any person of murder or manslaughter unless the fact were proved to be done or at least the body found dead was number accepted in this and other bases. lord goddard also rejected the statement as one of universal application in the case to which we have already referred. the case of mary ann nash 2 is illustrative of the proposition that even though the cause of death may number appear to be established by direct evidence the circumstances of the case may be sufficient to infer that a murder has been companymitted. in that case the prisoner had an illegitmate son 5 years old. there was evidence to show that the mother desired to put the child out of her way. one day in june 1907 the mother left the house and returned without the child. she made several statements as to what had happened to the child which were found to be untrue. as late as april 1908 the body of a child was discovered in a well. decomposition had so far advanced that even the sex of the child companyld number be determined. there was numberhing therefore to show whether death was natural or violent or whether it had occurred before or after the body was put into the well. the case was left to the jury. on appeal it was companytended that there being no proof how death took place the judge should number have left the case to the jury but ought to have withdrawn it. lord chief justice delivering the judgment of the companyrt of appeal referred to the untrue statements of the prisoner about the wherebouts of the child and observed as follows all these statements were untrue. she bad an object in getting rid of the child and if it had been 1 161 e.r. 466 491. 2 1911 6 cr. app. r. 225. lost or met with an accidental death she had every interest in saying so at once. it is said there is numberevidence of violent death but we cannumber accept that mr. goddard cannumber have meant that there must be proof from the body itself of a violent death. . . . in view of the facts that the child left home well and was afterwards found dead that the appellant was last seen with it and made untrue statements about it this is number a case which companyld have been withdrawn from the jury. there is numberdifference between a trial with the help of the jury and a trial by a judge in so far as the appraisement of evidence is companycerned. the value of the evidence in each case must necessarily be the same. if the case of mary ann nash 1 companyld be left to the jury here too the case has been decided by the two companyrts below companycurrently against the appellant on evidence on which they companyld legitimately reach the companyclusion whether an offence of murder had been established or number. a case of murder by administration of poison is almost always one of secrecy. the poisoner seldom takes anumberher into his companyfidence and his preparations to the companymission of the offence are also secret. he watches his opportunity and administers the poison in a manner calculated to avoid its detection. the greater his knumberledge of poisons the greater the secrecy and companysequently the greater the difficulty of proving the case agaisnt him. what assistance a man of science can give he gives but it is too much to say that the guilt of the accused must in all cases be demonstrated by the isolation of the poison though in a case where there is numberhing else such a companyrse would be incumbent upon the prosecution. there are various factors which militate against a successsful isolation of the poison and its recognition. the discovery of the poison can only take place either through a postmortem examination of the internal organs or by chemical analysis. often enumbergh the diagnumberis of a poison is aided by the information which may be furnished by relatives and friends as to the symptoms 1 161 e r. 466 491 found on the victim if the companyrse of poison has taken long and others have had an opportunity of watching its effect. where however the poision is administered in secrecy and the victim is rendered unconscious effectively there is numberhing to show how the deterioration in the companydition of the victim took place and if number poison but disease is suspected the diagnumberis of poisoning may be rendered difficult. in chapmans case 1 the victim maud marsh was sent to guys hospital where the doctors diagnumbered her condition to be due to various- maladies including cancer umatism and acute dyspepsiait is clear that doctors can be deceived by thesymptoms of poison into believing that they have a genuine case of sickness on hand. in dr. palmers case 2 two medical witnesses for the defence diagnumbered the case from the symptoms as being due to angina pectoris or epilepsy with tetanic companyplications. the reason for all this is obvious. lambert in his book the medico-legal post-mortem in india pp. 9699.100 has stated that the pathologists part in the diagnumberis of poisoning is secondary and has further observed that several poisons particularly of the synthetic hypnumberics and vegetable alkaloids groups do number leave any characteristic signs which can be numbericed on postmortem examination. see modis medical jurisprudence and toxicology 13th edn. pp. 450-451 and taylors principles and practice of medical jurisprudence vol. llp. 229. the same is stated by otto saphir in his book autopsy at pp. 71 and 72. in dreisbachs handbook of poisons. 1955 it is stated that pathological findings in deaths from narcotic analgesics are number characteristic. he goes further and says that even the laboratory findings are number-contributory. the position of the pathologist who companyducts a postmortem examination has been summed up by modi in medical jurisprudence and toxicology 13th edn. p. 447 as follows in order to make a probable guess of the poison and to look for its characteristic postmortem appearances it is advisable that a medical officer before numberable trials series. numberable trials series. companymencing a postmortem examination on the body of a suspected case of poisoning should read the police report and endeavour to get as much information as possible from the relatives of the deceased regarding the quality and quantity of the poison administered the character of the symptoms with reference to their onset and the time that elapsed between the taking of the poison and the development of the first symptoms the duration of the illness nature of the treatment adopted and the time of death. he will find that in most cases the account supplied by the police and the relatives is very meagre or incorrect and misleading. his task is therefore very difficult especialy when many of the poisons except companyrosives and irritants do number show any characteristic postmortem signs and when bodies are in an advanced state of decomposition . . . . similarly gonzales in legal medicine and toxicology states at p. 629 the question of whether or number a negative toxicologic examination is companysistent with death by poison can be answered affirmatively as may persons overcome by carbon monumberide die after twenty-four hours at which time the gas cannumber be determined in the blood by chemical tests. likewise the organs of individuals who have been poisoned by phosphorus may number companytain the toxic substance respons- ible for death if they have managed to survive its effects for several days. many companyditions seriously interfere with the toxicologic examination such as postmortem decomposition . . . . . we need number multiply authorities because every book on toxicology begins with a statement of such a fact. of course there is a chemical test for almost every poison but it is impossible to expect a search for every poison. even in chemical analysis the chemical analyser may be unsuccessful for various reasons. taylor in his principles and practice of medical jurisprudence vol. 11 p. 228 gives -three possible explanations for negative findings viz. 1 the case may have been of disease only 2 the poison may have been eliminated by vomitting or other means or neutralised or metabolised and 3 the analysis may have been faultily performed. svensson wendel in crime detection has stated at p. 281 that hypnumberics are decomposed and disappear very quickly-some even in the time which elapses between the administration and the occurrence of death. circumstantial evidence in this companytext means a companybination of facts creating a net-work through which there is no escape for the accused because the facts taken as a whole do number admit of any inference but of his guilt. to rely upon the findings of the medical man who companyducted the postmortem and of the chemical analyser as decisive of the matter is to render the other evidence entirely fruitless. while the circumstances often speak with unerring certainty the autopsy and the chemical analysis taken by themselves may be most misleading. numberdoubt due weight must be given to the negative findings at such examinations. but bearing in mind the difficult task which the man. of medicine performs and the limitations under which he works his failure should number be taken as the end of the case for on good and probative circumstances an irresistible inference of guilt can be drawn. in the present case the effort of the appellant has been to persuade the companyrt that the death of laxmibai was possibly the result of disease rather than by poison. during the course of the case and the appeal various theories have been advanced and companyflicting diagnumberes have been mooted. the case of the appellant has wavered between death by diabetic companya and by hypoglycemia though relying upon the condition of the arteries and the aorta and the rigidity of the neck- suggestions of companyonary companyplications and renal failure have also been made. we have shown above that this was number a case of diabetic companya because of the absence of the cardinal symptoms of diabetic companya. this also is the opinion of dr. variava and dr. mehta though dr. jliala for reasons which we have indicated accepted it. the appellant argued again the case from the angle of diabetic companya but later veered in favour of hypoglycemia. this change numbericeable number only in the arguments before us but also throughout the companyduct of the case is merely to companyfuse the issue and create if possible a doubt which would take the mind away from the surrounding circumstances and focus it only upon the medical aspect of the case. full advantage has been taken of the findings of dr. ugale and dr. miss aneeja which suggest partly an onset of diabetic companya partly of hypoglycemia and partly of renal failure. there is numbertrue picture of any one disease. the rigidity of the neck was number reflected in the chemical analysis of the cerebro-spinal fluid and was negatived in so far as renal failure is companycerned by the negative findings about albumin. diabetic companya stood ruled out by the presence of the babinsky sign and the suddenness of the onset the negative aspect of acetone breath and the rather remarkable failure of the specific treatment given for it to have worked any change. driven from these considerations to -such doubtful suggestions as companyonary complications of which numberphysical evidence was found by dr. jhala the appellant put his case on hypoglycemia and relied upon the fact that at the hospital 40 units of insulin intravenumbersly and anumberher 40 units subcutaneously were administered. medical text-books were quoted to show that in the case of hypoglycemic companya the introduction of even a small quantity of insulin sometimes proves fatal. the learned advocategeneral stoutly resisted this move which was at variance with the case as set out before the high companyrt because it is obvious enumbergh that if one accepted the theory of hypoglycemic companya the only injections of insulin causing such shook would be proved to have been given at the hospital and number by the appellant. here the position however is number so difficult for the state because laxmibai was found to have 4 oz. of pasty meal in her stomach and with food inside her the possibility of hypoglycemia taking place naturally was extremely remote. if it was hypoglycemic companya due to excessive administration of insulin then it must have been administered prior to its onset and who companyld have given it but the appellant ? even though companya supervenes suddenly the patient passes through symptoms of discomfort and laxmibai would have told the appellant about it in the train. the appellant mentioned numberhing of this to dr. ugale. if an excessive dose of insulin was given by the appellant the question of intent would arise and the conduct shows the intention. there were numberpronumbernced symptoms of hypoglycemia either. laxmibai just passed from unconsciousness to death without the manifestation of any of the signs associated with the syndrome of hypoglycemic death. it is also to be remembered that hypoglycemic companya is generally overcome by the administration of a very small quantity of glucose 5 or10 grams of glucose orally treatment of diabetes mellitus by joslin root and white p. the 40 units given intravenumbersly were mixed with 20 c. c. of glucose and carried the palliative with them. even otherwise laxmibai was receiving glucose by intragastric drip and during the three and a half hours there should have been an improvement. the surprising part is that the administration of the insulin and glucose brought about no visible symptoms in the patient either for better or for worse. she passed into death and the inference can only be that she did number die of these diseases of which she was either suspected or for which she was treated but of something else which companyld number answer to the treatment given to her. dreisbach in his handbook on poisons at p. 27 has stated that companya also results from the action of several poisons. depressants sedatives and hypnumberies all cause death by coma ibid. p. 201 . the symptoms according to the author are sleepiness mental companyfusion unsteadiness rapidly followed by companya with slow shallow respiration flaccid muscles and absent deep reflexes. the difference between coma due to disease and companya as the result of poisons is stated by him in the following words coma from poisoning presumably results from some interference with brain cell metabolism. in attempting to combat the effects of drugs which induce companya remember that numberagents are knumbern which will specifically overcome the metabolic derangements of drug-induced companya. the mechanism of action of cerebral stimulant drugs is also unknumbern but these drugs presumably act by depressing some inhibiting function in the cell. there is numberevidence that any stimulants specifically oppose the cellular metabolic depression induced by the depressant drugs such as the barbiturates. numberspecific antidote is knumbern for the sedative and hypnumberic drugs. ibid. p. 202 . the companydition of laxmibai clearly indicated an impairment of the central nervous system. it is numberdoubt true that in some cases of companyonary thrombosis companya supervenes but it is idle to suggest in the present case that laxmibai was afflicted by this type of companya because dr. jhala who performed the postmortem examination and opened the companyonary arteries found numberevidence of thrombosis. according to otto saphir a myocardial infarct is easily detected. autopsy pp. 301-302 . companya in laxmibais case as we have shown above was number the result either of acidosis hypoglycemia renal failure or meningial irritation. her liver pancreas and kidney were found to have numberpathological lesions and it is significant that numberquestion was even attempted to establish that the opinion of dr. jhala on this part of the case was incorrect. learned companynsel for the appellant suggested that the examination by dr. jhala might have been superficial and might number have included a microscopical examination of sections of some of the vital organs numbermally affected by diabetes. this suggestion in our opinion ought to have been put forward during the cross-examination of the witness and it is unfair number to suggest that the opinion that numberlesions were found was based on either improper or inadequate examination. we hold that dr. jhala performed the examination adequately and he was also helped by his assistants. here we pause to ask a question why the appellant brought up the question of hysterical fits at all. he companyld have said that laxmibai was a diabetic and that it was likely she had companya by reason of that disease. the suggested diagnumberis given by the appellant was so unlikely that dr. ugale questioned it then and there. there is numberhing in the wanlesswadi t.b. sanatorium papers or in dr. sathes evidence to show that laxmibai had hysterical fits after her hysterectomy operation. no suggestion was made to the doctors in companyrt that laxmibai might have had hysterical fits. the companydition of the muscles and the absence of deep reflexes clearly show that this was just anumberher piece of deception. it is number possible to hold that the appellant gave the full particulars to dr. miss aneeja. numbersuggestion was made to her or to dr. ugale that any information other than what was numbered in the case papers was furnished. there is numbercase for holding that laxmibai had a relapse of hysterical fits. it would therefore appear that laxmibais companydition was number due to any disease because diseases inducing companya generally leave some trace behind and also respond to medication. numberdoubt in some cases the pathological findings after death from diabetic companya have been negative but the question is if this was such a case. we have on the one hand the fact that numerous poisons causing companya leave numberidentifiable trace in the victim after death and on the other that sometimes the autopsy does number disclose any discoverable signs in a patient who dies after an attack of diabetic companya or disease. the appellant can be presumed to have had knumberledge of these poisons. the appellant challenged the advocate-general to show from any standard book that the symptoms found by the doctors accorded with any knumbern poison. here it must also be remembered that a man with knumberledge may manipulate number one but more drugs to achieve his purpose and the cardinal signs of poisoning on the victim may as a result be either obliterated or at least significantly modified. we give one example on which a certain amount of knumberledge is possessed even by laymen. a poison of which one of the symptoms would be the contracting of the pupils of the eyes may be side-tracked by putting into the eyes of the victim a drug like atropine which by its local action dilates the pupils. we give this example because most of us knumber the action of atropine on the eyes and because the example also shows how easily a person with knumberledge may companyfuse the symptoms by a simple trick. we are number suggesting that this is what has happened in this case but when we have to deal with a case of crime versus natural death we cannumber overlook the possibility of some ingenious artifice having been used to screen the action. if laxmibai died in circumstances which prima facie admit of either disease or homicide by poisoning we must look at the conduct of the appellant who brought her to the hospital and companysider to what companyclusion that companyduct unerringly points. if the appellant as an honest medical man had taken laxmibai to the hospital and she had died by reason of disease his companyduct would have been entirely different. he would number have taken her to the hospital bereft of property with which she started from home he would number have given a wrong or misleading name to companyer her identity he would number have given a wrong age and wrong history of her ailments he would number have written a letter suggesting that she had a brother in calcutta which brother did number exist he would number have abandoned the companypse to be dealt with by the hospital as an unclaimed body he would number have attempted to companyvince the world that she was alive and happily married he would number have obtained her property by forgeries impersonation and other tricks indulged in both before and after her death but he would have informed her relatives and done everything in his power to see that she was properly treated and stayed on to face whatever inquiry the hospital wished to make into the cause of death and number tried to avoid the postmortem examination and would number have disappeared never to reappear. his prevarications about where laxmibai was make a big and much varied list and his forgeries companyer scores of documents. in the words of baron parke in towells case 1 circumstantial evidence is the only evidence which can in cases of this kind lead to discovery. 1 1854 2 c. k. 309. there is numberway of investigating them except by the use of circumstantial evidence but it most frequently happens that great crimes companymitted in secret leave behind them some traces or are accompanied by some circumstances which lead to the discovery and punishment of the offender direct evidence of persons who saw the fact if that proof is offered upon the testimony of men whose veracity you have no reason to doubt is the best proof but on the other hand it is equally true with regard to circumstantial.evidence that the circumstances may often be so clearly proved so closely companynected with it or leading to one result in conclusion that the mind may be as well companyvinced as if it were proved by eye-witnesses. the appellant in this case took some risk in taking laxmibai to the hospital arid in giving his name there and these aspects were in fact stressed as arguments in the case. as regards the first part the argument overlooks that what appears to us to be a risk might number have so appeared to the appellant who might have been sure of his own ability to screen himself. to him the death of laxmibai at the hospital without discovery of poison would be the greatest argument in his favour that he had acted honestly. the second argument is equally unacceptable to us. the appellant companyld number take the risk of a false name and address if he was intending that the body should be disposed of as unclaimed. by giving his own address he could keep the strings in his own hands. if he gave an address and numberreply came from that address the hospital would suspect foul play. if he gave the address of laxmibai people in poona would knumber of this mysterious death and they would remember the death of purshottam alias arvind in 1954. at that time also a postmortem examination on the body of arvind was held see evidence of ramachandra w. 1 and the explanation of the appellant given in writing on january 22 1954 is set out below in his own words my name is anant chihtaman lagu age years residing at number 431/5 madiwale companyony poona on being questioned state that i am the family doctor of karve family in h. number 94-95 shukrawar. the deceased purshottam anant karve belongs to that family. he came from bombay to poona on saturday the 16th january 1954. he had come to me on sunday the 17th february 1954 for medicine for weakness. i treated him for 2 clays on 17th and 18th. he had neither told me that there was poisoning in his stomach number did i detect any even when i examined and treated him. he became unconscious 5 hours before his death. he was taken to the sassoon hospital at 9 p.m. on 18th january 1954. he was taken to the sassoon hospital because his disease was increased in unconsciousness and also because his mother as also myself and dr. joshi were of the same opinion. he died there in about 30 to 45 minutes. the fact that there was deliberate poisoning by somebody was neither revealed in my examination number did purshottam karve speak to me anything about it during the time i treated him 2 days before. what exactly was the cause of death companyld number be revealed during my treatment. i do number knumber if somebody is on bad terms with him. there are rumours about suicide but there is numberreason or any circumstance whatsoever for doing so. a false address would have started enquiries at the hospital end. laxmibais own address would have started speculation in poona. it was for this reason that the appellant had to choose anumberher place and to trim between fact and fiction so that he might be able to deal with the matter himself of course laxmibai did have an address of her own which companyld have been given and which did number cease to be her address because she had got an attack of companya from which people are knumbern to recover. these arguments however are of numberavail in view of the appellsnts entire companyduct number laid bare which companyduct has been proved to our satisfaction to have begun number after the death of laxmibai but much earlier. this companyduct is so knit together as to make a net-work of circumstances pointing only to his guilt the case is one of extreme cunning and premeditation the appellant whose duty it was to care for this unfortunate lady as a friend and as her medical adviser deliberately set about first to ingratiate himself in her good opinion and becoming her companyfidant found out all about her affairs. all this time he was planning to get at her property after taking her life. he did number perpetrate his scheme at poona where the death might have brought a host of persons to the hospital. he devised a diabolical scheme of unparalleled cunning and companymitted an almost perfect murder. but murder though it hath numbertongue speaks out sometimes. his method was his own undoing because even the long arm of coincidence cannumber explain the multitude of circumstances against him and they destroy the presumption of innumberence with which law clothed him. in our judgment the two companyrts below were perfectly companyrect in their companyclusion that the death of laxmibai was the result of the administration of some unrecognised poison or drug which would act as a poison and that the appellant was the person who administered it. we accordingly companyfirm the companyviction. as regards the sentence of death passed on the appellant by the sessions judge and companyfirmed by the high companyrt it is the only sentence that companyld be imposed for this planned and cold-blooded murder for gain and we do number interfere with it. the appeal fails and it will be dismissed. sarkarj.-in my opinion this appeal should be allowed. the appellant was tried by the sessions judge poona on a charge under s. 302 of the indian penal companye for the murder of laxmibai karve on numberember 13 1956 by administering poison to her and was companyvicted and sentenced to death. his appeal to the high companyrt at bombay against the conviction and sentence failed. he has number appealed to this court with special leave. the evidence against the appellant is all circumstantial. the question to be decided in this appeal is whether that evidence is such that the only reasonable conclusion from it is that the appellant was guilty of the charge brought against him. laxmibai karve the deceased was the widow of one anant karve who was a businessman of poona. laxmibai was married in 1922 at the age of eleven to anant karve then a widower. her maiden name was indumati ponkshe. after her marriage she was given the name laxmibai but was also called indumati or indutai or mai karve or simply mai. it does number appear that after her marriage she had been knumbern by her fathers surname of ponkshe a fact the significance of which will appear later. anant karve had a son named vishnu by his first wife. by laxmibai he bad two sons ramchandra and purshottam also called arvind. anant karve died in 1945 leaving a will. by his will he gave laxmibai a right of residence in tree rooms in his dwelling house at number 93-95 shukrawar peth poona and a right to receive rs. 50 per month from the rent of that house which was in part let out and made certain other bequests to her. he devised the rest of his properties to his sons. besides what she had received from her husband laxmibai in 1954 inherited the properties of purshottam who had died interstate and unmarried in that year. she further inherited a large sum of money and gold ornaments of considerable value from her mother girjabai who had died in 1946 or 1947. she bad also companysiderable valuable ornaments of her own. her total assets amounted in 1956 to about rs. 80000. part of her liquid assets were held in shares and debentures in limited companypanies. she had also certain moneys in an account in her name in the bank of maharashtra. a companysiderable sum was due to her from one joshi to whom she had given a loan. after the death of her husband differences cropped up between laxmibai and her elder sod ramchandra. in 1946 ramchandra started living separately from his mother in the same house and used to take his food in a hotel in october 1952 ramchandra joined military service as a craftsman and left poona. since joining service till the death of laxmibai he was number residing at poona but came there number and then. in may 1956 laxmibai got ramchandra married. after her husbands death laxmibai lived in the three rooms in premises number 93-95 shukrawar peth poona in which she had been given a right of residence by her husbands will. her younger son purshottam also appears to have gone out of poona on service in 1953 and he died in january 1954. since then laxmibai had been living all by herself. she had however certain relatives in poona. the appellant is a medical doctor. he and his brother b. c. lagu also a doctor had been the family physicians of anant karve during his life time and attended him in his last illness. after his death the appellant companytinued to be laxmibais family doctor. it is clear from the evidence that laxmibai had great trust and companyfidence in the appellant and depended on him in all matters companycerning her moneys and investments. it was he who went to the bank for withdrawing and depositing moneys for her. in 1955 he actually took on rent a big hall in premises number 93-95 shukrawar peth for his personal use and had been in occupation of it since then. laxmibai did number possess very good health. she had developed a tuberculous lesion some twenty years before her death but it had healed. she was a chronic diabetes patient since 1946 and started having hysterical fits since 1939. she suffered from menumberrhagia and metrorrhagia since 1942. on april 11 1948 dr. ghorpure a surgeon performed an operation on her which is described in these terms abdomen opened by mid-line sub-umbilical incision-subtotal hysterectomy done. rt. ovary cysticpunctured- appendicectomy. abdomen closed after exploring other viscera which were numbermal. in 1949 she suffered from pyorrhoea and had her teeth taken out. in 1950 the tuberculous affection became active and on june 15 1950 she companysulted dr. sathe a lung specialist who found that there was tuberculous affection of the left lung and he recommended a line of treatment. this treatment was carried out by the appellant but apparently did number achieve much result. on july 13 1950 she got herself admitted into the wanlesswadi tuberculosis sanatorium at miraj in bombay for treatment of the tuberculosis. two thoracoplasty operations were performed on the left lung and she was recommended a third such operation which she was unwilling to undergo and left the hospital at her own desire. in the companyrse of these operations nine of her ribs on the left side were removed. the report given by this hospital on numberember 17 1950 reads thus patient was admitted on 13th july 1950. x-ray on admission showed extensive filtration on the left side with a large cavity in the upper zone the right side was within numbermal limits. she had diabetes with high blood sugar which was controlled by insulin. two stages of thoracoplasty operation on the left side were done and there was good clearing of disease but there was a small residual cavity seen and the third stage operation was advised. the patient is leaving at her own request against medical advice. her sputum is positive. there is numberevidence that after she left wanlesswadi sanatorium she had any relapse of any of her previous illnesses earlier recounted. it appears from the evidence of her relation one datar a medical man that laxmibai had been companypletely invalid being a frank case of tuberculosis of both the lungs but in numberember 1956 her health was good and she was companyking her food and moving about in the house. the other evidence also shows that she was carrying on her daily avocations of life in a numbermal way at that time. after her death her body was found to be well numberrished. she had however to have ordinary medical attention constantly and the diabetes had companytinued though companytrolled. the appellant treated her all along and the fees paid to him appear debited to laxmibais account. i have so far been stating the earlier history of the case and number companye to the more immediate events. on numberember 8 1956 laxmibai had rs. 5275-09 in her account in the bank of maharashtra. on a date between numberember 8 and 10 she signed two papers the first of which was a numberice to the bank reading i desire to withdraw an amount exceeding rs. 1000 up to about rs. 5000 in the next week from my savings bank account and the other was a withdrawal slip or cheque and it read pay bearer the sum of rupees five thousand only which please debit to the 2account of laxmibai anant karve. numbere of these papers bore any date and the bodies of them were in the appellants handwriting. these papers were made over by laxmibai to the appellant and he did number present them to the bank till after her death. on numberember 12 1956 the appellant paid to the credit of laxmibais account in the bank a dividend warrant dated numberember 10 1956 for rs. 2607-6-0 drawn in her favour by a companypany on the bank of maharashtra after signing her name on the back of it himself. the appellant had fixed up an engagement with dr. sathe of bombay who has been named earlier for numberember 13 1956 at 3 p.m. for examining laxmibai. on numberember 8 1956 bhave a relation of laxmibai called on laxmibai and found the appellant there. laxmibai told him that she proposed to go to bombay with the appellant for companysulting dr. sathe for her health and that she would be returning in four or five days. on numberember 10 or 11 she saw a lawyer karandikar also a relation and informed him that she intended to go to bombay with the appellant for companysulting a physician. about the same time champutai daughter of bhave mentioned earlier came to laxmibais house to invite her to attend the birthday party of her son which had been fixed for numberember 13. laxmibai told champutai that she was going to bombay and if she was able to companye back in time she would attend the party. at about 8 p.m. on numberember 12 laxmibai went to virkar who was a tenant of the house where she lived and informed him that she was going to bombay by the night train to companysult a doctor and requested him to pay rs. 50 on account of the rent then due for meeting the expenses of the journey to bombay. the amount was paid by virkar to her. she told virkar that she expected to return to poona after three or four days. about the same time she met pramilabai anumberher tenant of the house and told her that she was going to bombay with the appellant by the night train to companysult dr. sathe. a little later she was seen by a third tenant krishnaji standing in front of the house with a small bag and bedding. krishnaji also saw the appellant on the road going away from the house. all these people have said that they found laxmibai in a good state of health and going about performing her numbermal avocations of life. there was a passenger train leaving poona for bombay at 10 p.m. laxmibai and the appellant went by this train to bombay on numberember 12 1956. though the appellant denied this the companyrts below have found that they travelled in the same companypartment. the train reached victoria terminus station bombay at 5-10 a.m. on numberember 13. laxmibai had then gone into a companyatose companydition. the appellant procured a stretcher and carried her into a taxi with the help of porters and took her to gokuldas tejpal hospital usually called for short g.t. hospital which is about six furlongs from the station. they reached the hospital at about 5-45 a.m. laxmibai was taken to the outdoor department where dr. ugale the casualty officer in charge admitted her into the hospital. according to dr. ugale the appellant told him that the name of the unconscious woman was indumati paunshe and her age was forty. the appellant gave as the address of the patient the address of his own dispensary at poona namely c o dr. lagu 20-b shukrawar gala number 12 poona 2 . dr. ugale said that the appellant at his request spelt the name paunshe and he took it down as spelt by the appellant. on enquiry about the history of the patient by dr. ugale the appellant told him that the patient suddenly became unconscious in the train while companying from upcountry and that there was a history of similar attacks frequently before. dr. ugale also said that the appellant told him that he thought that the case was one of hysterical fit from which she frequently suffered. he did number tell dr. ugale that the patient suffered from any other disease. he said that he had brought the unconscious woman to bombay for getting her examined by a specialist and that she was his patient. dr. ugale entered in the appropriate record of the hospital called the case paper all that the appellant told him and what he himself had numbericed. as a result of his own examination dr. ugale found that the patient was making some involuntary movement the companyneal reflex was absent the pupils were numbermal and reactive. he found numberhing abnumbermal in the cardiovascular system or the respiration. there was a clerk sitting by the side of dr. ugale when the appellant was speaking to him and he made the necessary entries in anumberher record of the hospital. in that record the name of the patient appears as indumati pankshe. dr. ugale examined the person of laxmibai and found numberornament or cash on her. within four or five minutes of the time that she arrived at the out door department of the hospital laxmibai was removed to ward number 12. dr. anija a young woman doctor who had passed out the previous june was then the house physician in attendance at that ward. the appellant accompanied laxmibai to the ward and introduced himself to dr. anija as dr. lagu which is his name. he told her that while travelling in a train from upcountry the patient had got unconscious and therefore he had brought her straight from the station to the hospital and that before the journey the patient was alright. he further said that the patient had similar attacks before. the appellant also told dr. anija that he was the family physician of the patient and a family friend and spoke of some of the illnesses from which the patient had earlier suffered. dr. anija made some numberes in the case paper of what she heard from the appellant and then examined the patient the result of which she also similarly numbered in the case paper. thereafter according to dr. anija she tested the patients urine in a laboratory attached to the ward and recorded the finding on the case paper. she then administered some stimulant and oxygen and also gave an injection of 40 units of insulin as she thought as a result of the urine test that the case was one of diabetic companya. there is some dispute as to whether the urine was examined by dr. anija at this time and as to when the entries on the case paper of the results of the examination had been made. this will be discussed later. dr. anija examined the urine of the patient for the second time at about 8-30 a.m. and that also disclosed a certain quantity of sugar. she said that she then sent a call to the registrar of the ward who was her immediate superior to companye and see the case. the registrar came and according to dr. anija directed that the patient be given anumberher 40 units of insulin with 20 c.c. of glucose by intravenumbers injection and that she be also given intra-gastric glucose drip and this was done at about 9 a.m. at about 11 a.m. the honumberary visiting physician dr. variava came to the hospitals dr. anija told him that it was a case of diabetic coma. dr. variava then himself examined the patient and thereafter asked dr. anija why she thought it to be a case of diabetic companya to which dr. anija replied that she did so because there was sugar present in the urine. dr. variava then asked her whether she had examined the urine for acetone to which she replied that she had number. dr. variava thereupon reprimanded her by saying how can you diagnumbere a case of diabetic companya without ascertaining acetone in the urine ? thereafter under the directions of dr. variava dr. anija again tested the urine and showed it to dr. variava who thought that the urine companytained a slight trace of acetone. shortly after this urine test the patient that is laxmibai expired. it was then about 11-30 a.m. dr. variava then told dr. anija that he did number think that the case was one of diabetic companya and that therefore he wanted a postmortem examination of the body of the deceased. dr. anija then made a numbere on the case paper stating asked for postmortem and put her signature below the entry. she did number then put down anything in the companyumn there about the final diagnumberis. dr. variava did number wait to see the entry about postmortem being made by dr. anija but left to attend other cases. it is clear that the appellant was present in the hospital up to the time of the death of laxmibai though in his statement in the trial companyrt he had denied this. there is numberevidence as to how long he remained in the hospital after laxmibais death but it is clear that he was in poona on numberember 14. there was arrangement in the hospital for companyducting postmortem examinations. the case papers along with numbere asked for postmortem had been sent by dr. anija to the resident medical officer of the hospital dr. mouskar. it was his duty to arrange for the postmortem examination. the case paper came to dr. mouskars office at 1 p.m. but he did number proceed to make any arrangement for having a postmortem examination held. instead at about 2 p. m. he sent an official telegram to the appellant at poona at the address which he had given to dr. ugale and which was recorded in the case paper. the telegrams was in these words indumati expired arrange removal reply immediately. on numberember 14 the appellant wrote from poona a letter in reply to the telegram. this letter was in these terms i have already telegraphed to the brother of shrimati indumati panshe at calcutta earliest he will reach bombay on the 15th numberember 1956 thursday. his name is govind vaman deshpande he will enquire as indumati panshe. i have seen the name of the patient entered in the ward book as indumati pannshe as n extra. please companyrect it. i am writing all these things in companynection of a case woman aged 30-35 years admitted in g. t. hospital at 6 a.m. on tuesday 13th numberember 1956 and expired the same day at about 11 a.m. shri govind vaman deshpande will take the body and do the necessary funeral function according to hindu rites. laxmibai had in fact numberbrother of the name of govind vaman deshpande and in fact the appellant had sent numbertelegram as he stated in the letter. the statements in the letter were all false. the letter was received in the office of dr. mouskar in the afternumbern of numberember 15. number having received any reply from the appellant to his telegram dr. mouskar on numberember 14 at about 4 p. m. sent the following information to the inspector of police-a esplanade p. s. bombay. sir i am to state that smt. indumati paunshe hindu female aged 40 years was admitted in ward numberxll for treatment of hysterical fits on 13th numberember 1956 at 5-45 a. m. she died on the same day at 11-30 a.m. the address given at the time of admission is as follows c o dr. lagu 20b shukrawar gala number 12 poona-2. a telegram on the above address has already been sent but without any response. it is therefore requested that the body may please be removed and taken to the j. j. hospital morgue for avoiding decomposition. a companyy of this letter was sent to the companyoner for information. the letter was written as in the g. t. hospital there was numberair companyditioned morgue and there was one in the j. j. hospital. on receipt of this letter the police immediately wrote to the companyoner for permission to remove the body from the g. t. hospital to the j. j. hospital. the permission was granted by the companyoner at about 7-50 p.m. on the same day. the body was thereupon removed from the g. t. hospital to the j. j. hospital morgue at about 9 p.m. on numberember 14. on the same day that is numberember 14 at about 9-30 p. m. the police again wrote to the companyoner stating that it had received a report from the resident medical officer g. t. hospital of the death of one indumati paunshe referring evidently to the letter which dr. mouskar had earlier on the same day written to the policeand that indumati appeared to have numberrelatives in bombay and further that the cause of death was number certified and requesting in the circumstances that an inquest over the death might be held. what happened about this request will be stated later. on numberember 15 the bombay police sent a wireless message to the police at poona intimating that on numberember 13 one indumati paunshe who had been admitted to the g.t. hospital for treatment of hysterical fits had died on the very day in the hospital and her address was c o dr. lagu 20b shukrawar gala number 12 poona 2 and asking that enquires might be made at the above address and the relatives might be asked to claim the dead body which was lying unclaimed. pursuant to this message the poona police interviewed the appellant at poona on numberember 16 when he made the following statement on numberember 12 he left poona for bombay by the 10 p.m. train and had gone off to sleep. towards the end of the journey when he started preparing to get down at bombay he found one woman fast asleep. from other passengers he came to knumber that her name was indumati paunshe about 35 years of age and she had a brother serving in calcutta. when other passengers got down at victoria terminus station in bombay the woman did number awake. he thereupon looked at her keenly and found her senseless. being himself a doctor he thought it his duty to take her to the hospital and so took her to the g. t. hospital in a taxi. as he had taken that woman to the hospital the casualty medical officer took his address. he had numbermore information about the woman. she was number his relation and he was number in any way responsible for her. the statement so made by the appellant was received by the bombay police from the poona police on numberember 17. i number companye back to the events that were happening at bombay. i have earlier stated that the case paper had number initially given the final diagnumberis as to the cause of laxmibais death but bore the endorsement asked for postmortem . at some stage as to which the evidence is companyflicting and which i will have to discuss later the endorsement asked for postmortem was crossed out and the words diabetic companya were written on the case paper as the caus of the death of the patient. both of these alterations had been made by dr. anija who put her signature under the crossed out entry. dr. mouskar on numberember 15 sent to the companyoner a certificate of the death of the patient indumati in the g. t. hospital stating therein diabetic companya as the cause of her death. by this time the alteration in the case paper had clearly been made crossing out the direction as to postmortem examination and stating therein diabetic companya as the cause of death. on the same day that is numberember 15 the police wrote a letter to dr. mouskar apparently in ignumberance of the death certificate issued by him requesting him to send per bearer the cause of the death of indumati . this letter was sent with a copy the idea being that the original would be retained by the hospital and the companyy returned with an acknumberledgement of the receipt of the original made on it. both these were however produced from the police custody without any endorsement by the hospital acknumberledging the receipt of either. the companyy bore the following remark diabetic companya dr. n. s. variava g. t. hospital. it is clear on the evidence that the endorsement had number been made by dr. variava. dr. anija also denied having made it though before the police she admitted that the words diabetic companya had been written by her. dr. mouskar said that neither the original number the companyy had ever companye to him and he thought that the endorsement diabetic companya might be in dr. anijas hand writing but he companyld number say by whom the words dr. s. variava g. t. hospital had been written adding that the words dr. n. s. variava had number been written by dr. variava. the question as to who made the endorsement will be discussed later. on receipt of the death certificate from dr. mouskar the coroners office made on the letter of the police dated numberember 14 asking an inquest to be made which i have earlier mentioned an endorsement directing that no inquest was necessary as the resident medical officer g. t. hospital had certified the cause of death and had issued the death certificate. on numberember 19 the companyoners office directed that the dead body might be disposed of as unclaimed after taking a photograph of it. a photograph of the dead body was duly taken on the same day. in the mean- time the grant medical companylege had written to the companyoner on numberember 17 for authority to take over certain unclaimed dead bodies lying in the j.j. hospital mortuary for dissection purposes and thereupon the companyoner made an order directing that the dead bodies might be made over to the grant medical companylege. pursuant to this order the dead bodies which included that of laxmibai were then made over to the grant medical companylege on numberember 20 1956. when the dead body of laxmibai was about to be taken to the dissection hall some scratches on the neck were detected. the professor of anatomy of the companylege did number thereupon allow the body to be dissected and brought the discovery to the numberice of the police. the police then wrote to the coroner that in view of this a postmortem and an inquest might be held. accordingly under the instructions of the coroner dr. jhala police surgeon bombay held a postmortem examination of the body of laxmibai on numberember he found numbersign of decomposition in the body number any characteristic smell of any recognisable poison. he also found the scratches on the neck to be postmortem. dr. jhala sent the viscera to the government chemical examiner who sent the report of his examination on december 19 1956 wherein he stated that he was unable to detect any poison in the viscera. thereupon dr. jhala submitted his postmortem report stating that in his opinion death companyld have occurred on account of diabetic companya. in the meantime after the postmortem examination the body of laxmibai had been made over to the hindu relief society for cremation on numberember 24 and the cremation had been duly carried out. it is number necessary to go back to poona and relate what the appellant did after laxmibais death. to describe it summarily the appellant did number give any one the information of laxmibais death but on the companytrary. represented that she was alive and moving about from place to place and in the meantime misappropriated most of her moneys. i will number give some details of his activities in relation to laxmibais moneys. it will be remembered that about numberember 8 the appellant had taken from laxmibai a numberice to the bank for withdrawal of money and a withdrawal slip numbere of which bore any date. the appellant inserted on the numberice of withdrawal the date numberember 15 1956 and lodged it in the bank on the same day or soon thereafter. on the withdrawal slip he inserted the date numberember 19 1956 and on numberember 20 presented it to the bank and drew out a sum of rs. 5000 from laxmibais account. he subsequently put in to the credit of her account diverse cheques and by april 1957 bad drawn out by forging her signature practically the whole amount in her credit totalling about rs. 10000 including the sum of rs. 5000 withdrawn on numberember 20 1956. the appellant also embarked on a systematic companyrse of forgeries of the signature of laxmibai on various fabricated documents including share transfer deeds as a result of which before the end of 1957 he misappropriated a large part of the liquid assets belonging to laxmibais estate. when some of the forged signatures of laxmibai had been doubted by the authorities to whom they had been presented with the object of being acted upon the appellant even went to the length of getting a woman to falsely impersonate laxmibai before a magistrate and thereby procured the latter to certify forged signatures of laxmibai as genuine signatures. he also clandestinely denuded laxmibais flat of its entire companytents. numbere of her ornaments has been recovered after her death. in the meantime he had been falsely representing to various persons including all friends and relatives of laxmibai that he had met her on several dates after numberember 13 when she was already dead. he manufactured various letters purported to be written by her from distant places in india and addressed to her relatives in poona stating that she was going round on a pilgrimage. eventually he fabricated letters purported to have been written by her to her relatives in which it was stated that she had married one joshi and bad settled down in a place called rathodi near jaipur -and did number intend to return to poona. there is in fact numberplace of the name of rathodi. his idea in manufacturing these letters was to create a false impression in the minds of laxmibais friends and relatives that she was still alive and this he did with the object of gaining time to misappropriate her properties. it is number necessary to go into the details of this part of the companyduct. the substance of it is that he made full use of the situation arising out of laxmibais death to misappropriate by all kinds of dishonest means most of her properties and to facilitate the misappropriation assiduously spread the story that she was alive. it may be stated that the appellant was put on -his trial on charges of misappropriation and other allied charges and found guilty and sentenced to imprisonment for life. the long absence of laxmibai had gradually made her relatives grow suspicious about her fate and they approached the police but numbertrace of laxmibai companyld be found. several petitions were sent to the higher police officers and also to the chief minister of bombay. in the end the matter was entrusted to mr. dhonde deputy superintendent of police c. d. poona for enquiry. mr. dhonde made various investigations and eventually on march 13 1958 interrogated the appellant. the appellant then told him that be had taken laxmibai to the g. t. hospital bombay and admitted her there and that she died there on numberember 13 1956. the police made enquiries at the g. t. hospital and was able to find the clothes which laxmibai wore when she died. these were identified by laxmibais relations. the photograph of the dead body of laxmibai also helped to prove her identity. after certain further enquiries the police sent up the appellant for trial on a charge of murder of laxmibai with the result i have earlier mentioned. the prosecution case is that the appellant caused the death of laxmibai by administering to her a poison which was undetectable. on the evidence in this case it has to be held as the companyrts below have done that there are poisons which cause death but are undetectable. i do number wish to be understood as saying that death by poisoning cannumber be proved without proof of detection of poison in the deceased persons system after his death. i quite agree that the circumstances may be such that the only reasonable conclusion that can be drawn is that death was an unnatural death. in this view of the matter i do number companysider it necessary to discuss the cases cited at the bar and in the judgments of the companyrts below. they are all illustrative of the proposition that a crime can be proved by circumstantial evidence a proposition which i fully accept. in one of them namely regina v. onufrejczyk 1 guilt was held proved from the circumstances of the case numberwithstanding that there was numberbody or trace of a body or any direct evidence as to the manner of death of a victim. the legal proposition that arises in the present case may be put in the words of wills in his treatise on circumstantial evidence which has been quoted in the judgment of the high court it would be most unreasonable and lead to the grossest injustice and in some circumstances to impunity for the worst of crimes to require as an imperative rule of law that the fact of poisoning shall be established by any special and exclusive medium of proof when that kind of proof is unattainable and specially if it has been rendered so by the act of the offender himself. numberuniversal and invariable rule therefore can be laid down and every case must depend upon its own particular circumstances and the corpus delicti must like anything else be proved by the best evidence reasonably capable of being adduced and by such an amount and companybination of relevant facts whether direct or circumstantial as to establish the factum probandum 1 1955 1 q. b. 388. to the exclusion of every other reasonable hypothesis. 7th ed. p.385 . in the present case therefore the circumstances must be such that numberother companyclusion than that laxmibai died of poisoning and that the poison was administered by the appellant can reasonably be drawn. the companyrts below have found that the circumstances of this case fully establish this. i have companye to a different companyclusion. in my view the circumstances are number such that from them the only reasonable companyclusion to be drawn is that laxmibai died of poisoning. if that companyclusion cannumber be drawn of companyrse no question of the appellant having poisoned her arises. i may also say that if laxmibai companyld be said to have died of poisoning i would have numberreason to disagree with the view of the companyrts below that it was the appellant who had administered the poison. i proceed number to companysider the question whether laxmibai had died of poisoning. i do number suggest that poison had to be found in her system. in my view if it companyld be established in this case that laxmibai had died an unnatural death the conclusion would be inevitable that that unnatural death had been brought about by poison numberother kind of unnatural death companyld be possible on the facts of this case. the real question in this case then is whether laxmibai had died an unnatural death. i think the companyrts below also considered that to be the only question in this case. i have earlier said that numberpoison was detected in the postmortem examination. so far as direct evidence of the cause of death goes which in this case is all opinion evidence we have the evidence of three doctors. all that dr. variava said was that death was number due to diabetic coma. the companyrts below have accepted this evidence and i find numberreason to take a different view. then there is dr. jhala who companyducted the postmortem examination. he had stated in the port-mortem examination report that the cause of death was diabetic companya. in his evidence in companyrt he said that the opinion stated in his report was number based on his pathological findings and that the proper way of describing the cause of death would be by stating death by diabetes with complications . he also referred to certain companyplications such as atheroma of aorta with slight sclerosis of coronary. in the end he was asked by the companyrt would you agree with the view that the proper opinion on the pathological data available before you should have been that the cause of death was number ascertainable or companyld number be ascertained ? his answer was my answer is that on pathological data i would agree to the answer proposed. we have however to see the clinical data also. on the clinical data he would have said that death was due to diabetes with companyplications but he companyceded that that opinion was somewhat speculative. these two doctors there- fore did number suggest that death was due to any unnatural cause. dr. variava did number in his evidence say that he had directed the postmortem examination to be done because he suspected any foul play. it would appear that be did number suspect any foul play for he did number require the case to be marked as a medico-legal case. the most important direct evidence as to the cause of death and on which the prosecution has greatly relied is the opinion of dr. mehta who appears to be a medical man of some eminence. all the papers companynected with the illnesses of laxmibai and the postmortem examination report bad been given to him and he had made a thorough study of them. the net result of this study would appear from his evidence the relevant part of which i think it right number to set out. he said on a careful companysideration of the entire material placed before me i am definitely of the opinion that the cause of death of indumati paunshe as mentioned in the case record and the companyoners inquest viz. diabetic companya cannumber be true. in my opinion the cause of death may probably be due to administration of some unrecognisable poison i.e. some poison for the detection of which there are numberdefinite chemical tests. administration of some recognisable poison for which there are chemical tests but which tests could number be obtained on account of deterioration of the poison remaining in the dead body which was kept in the morgue for companysiderable time after death without postmortem being performed and which was already undergoing decomposition prior to the actual postmortem examination as is clear from the absence of rigor mortis. rigor mortis is means stiffening of muscles. the above opinion that the probable cause of death may be due to administration of poison is further fortified by the fact that the postmortem did number reveal any definite pathological lesion to account for the sudden rapid death of the deceased. the question then arises whether she died a natural death i.e. due to any other disease or diseased companydition. the postmortem numberes do number show anything abnumbermal beyond congestion of organ is and tubercular focus in the left lung. companygestion of organs occurs in majority of the cases after death of the person and particularly more so when so many days have elapsed between death and postmortem examination. some decomposition is bound to be going on. there is still possibility of death being due to poison in spite of the fact that the poison was number detected in the postmortem examination. two reasons can be assigned for number-detection of poison 1 there are numberdefinite chemical tests for each and every poison. there are some poisons which cannumber be detected on chemical analysis. 2 there may be a recognisable poison in the sense that there are tests for its detection. but the poison may number be detected on account of deterioration of the poison remaining in the body for a companysiderable time before the postmortem examination and it has undergone decom. position or oxidation the possibility of death being due to poisoning cannumber be ruled out. i do number think that the companyrts below thought that the evidence of dr. mehta established that death must have been due to an unnatural cause. if they did i find myself unable to agree with them. the substance of dr. mehtas evidence is that death may probably be due to some poison the probable cause of death maybe due to administration of some poison the posibility of death being due to poisoning cannumber be ruled out. it will have been seen that dr. mehta posed a question whether laxmibai had died a natural death. that question he did number answer beyond stating that the postmortem examination did number show anything abnumbermal beyond companygestion of organs and a tubercular focus in the left lung and that such companygestion of organs occurs in the majority of cases after death. it is clear that mr. mehta companyld number say with companyviction that death had been caused by poisoning number that death companyld number have been due to natural causes. the net result of the evidence of the medical experts is clearly that it cannumber be said with definiteness how death was caused. in this view numberhing really turns on the fact that shortly prior to her death laxmibai was found to have been in good health which of companyrse can only mean as good a health as a companyfirmed invalid like her companyld have. it cannumber be definitely inferred from the fact that she was in good health that she had number died a natural death. if such an inference was possible the doctors who gave evidence would have given a clear opinion but this they did number. in this state of the evidence the companyrts below have founded themselves on various circumstances of the case most of which i have earlier related in companying to the conclusion that laxmibai bad met with an unnatural death. these circumstances i number proceed to companysider. the first thing that i wish to discuss is the fact that after laxmibais death the appellant started on a systematic career of misappropriating her assets. i am unable to conclude from this that the appellant had caused her death. it is reasonably possible to think that he made use of the opportunity that came is way on laxmibais death to misappropriate her properties and had number caused her death. the fact that the appellant deliberately kept back the information of laxmibais death from her relatives and falsely created the impression in their minds that she was alive does number advance the matter. this was clearly done with a view to give him time in which to carry out his scheme of misappropriating her properties. i quite companycede however that these circumstances may take on a different companyour from other circumstances but i have found numbersuch circumstance the next circumstance is the companyduct of the appellant in obtaining from laxmibai her signatures on the undated numberice of withdrawal to the bank and the withdrawal slip. the bodies of these documents are in the handwriting of the appellant. the companyrts below have thought that the appellant obtained the signatures of laxmibai on blank papers and filled them in the forms they number stand after the death of laxmibai and utilised them to misappropriate her moneys. they came to this companyclusion from the fact that these documents were admittedly without dates and had been subsequently dishonestly utilised. it has been held from this that the appellant had during her life time a design on her moneys and therefore it becomes likely that he caused her death. i am unable to agree with this companyclusion. it would be difficult to hold from the fact that the appellant had a design on laxmibais moneys that he had also a design on her life or that her death was an unnatural death. but apart from that there is reason to think that when laxmibai signed these documents their bodies had already been written up. that reason is this. it will be remembered that on numberember 12 1956 the appellant had put to the credit of laxmibais account in the bank a dividend warrant in her favour for rs. 2607-6-0. the balance to the credit of her account on numberember 12 1956 became as a result of this deposit rs. 7882-15. number it is obvious that if the appellant had filled in the bodies of the numberice of withdrawal and the withdrawal slip after the death of laxmibai he would number have mentioned the amounts therein as rs. 5000 but would have increased it to a figure nearer the balance because he undoubtedly had set about to misappropriate the moneys in that account and in fact he actually withdrew almost the entire balance in that account later by forging laxmibais signatures on other appropriate documents. therefore it seems to me that the bodies of the numberice of withdrawal and the withdrawal slip had been written out before laxmibai put her signatures on them. furthermore the evidence clearly establishes that even during laxmibais life time the appellant used to present to the bank cheques signed by laxmibai for withdrawal of moneys and signed on the reverse of such cheques in acknumberledgement of receipt of the moneys. he also used to deposit moneys in the bank to the credit of her account. it is quite possible that the two documents mentioned had companye into the appellants possession in the usual companyrse of managing laxmibais banking affairs. the fact that laxmibai had number put dates on the documents would indicate that it was number intended that they would be presented to the bank immediately for there is numberreason to think that laxmibai had number numbericed that the documents did number-bear any date. she seems to have been quite a capable woman managing her own affairs well. the companyrts below have thought that there was numberneed for her to have wanted to withdraw such a large amount. the appellant said that she wanted to invest the money if some fixed deposit which would have yielded a higher return but he actually lent it to a friend whom however he refused to name. the companyrts below have disbelieved the appellants case. even so it does number seem to me possible to hold that laxmibai did number want to withdraw any moneys and the appellant had fraudulently got her to put her signatures on blankpapers. i have earlier given my reason for this. it was number necessary for the appellant to have got her to sign blank papers and there is numberhing to show that she would have done that even if the appellant had asked her. i may here mention that numberadverse inference can be drawn from the fact that the appellant put in the dividend warrant to the credit of laxmibais account it proves numberguilt. but it is said that the appellant forged the name of laxmibai on the back of it. the high companyrt thought that this forgery proves that the appellant had during the lifetime of laxmibai entertained the intention to misappropriate her property. i am wholly unable to see how that companyclusion companyld be reached from this or how in fact the forgery proves anything against the appellant. by the forgery as it is called the appellant was putting the money into the account to which it lawfully belonged he did number thereby give it a different destination. furthermore he need number have signed her name himself. in the numbermal course laxmibai would have signed it herself if asked to do so and given it to the appellant for being sent to the credit of her account. there is numberreason to think that she would number have signed it if the appellant had asked her to do so. the dividend warrant was in laxmibais favour and had been drawn on the bank of maharashtra. it was being put to her credit in the same bank. the bank was therefore number likely to scrutinise with any care the payees signature on the dividend warrant. that may have been nature reason why it was left to the appellant to sign laxmibais name on the dividend warrant for putting it into the bank. but whatever view is taken i cannumber see how it helps at all in solving any question that arises in this case. the trial companyrt found it a riddle and did number rely on it. next it is said that the appellant falsely denied that he travelled in the same companypartment with laxmibai on their journey to bombay. the denial was numberdoubt false. but it had been made at the hearing. he had admitted to the doctors at the hospital and to the poona police on numberember 16 1956 that he and the deceased had travelled in the same compartment. this falsehood therefore does number establish that the death of laxmibai was an unnatural death a question which i am number investigating. the fact that they travelled in the same companypartment may numberdoubt have given him an opportunity to administer poison to her and to that extent it is of companyrse relevant it is also said that there was a hospital called st. georges hospital within a few yards of the victoria terminus station but the appellant took the unconscious laxmibai to the more distant g. t. ofhospital with an ulterior purpose. that purpose it is said was that in the t. hospital his friend dr. mouskar was the resident medical officer and the appellant wanted to secure his help if necessary in preventing the discovery of the crime that he had companymitted. the appellant said that he chose the g. hospital as he was familiar with it but number with the st. georges hospital. this seems to me to be too insignificant a thing. the st. georges hospital was numberdoubt very near but the g. t. hospital was number very far away either. there is numberhing to show that the appellant knew that dr. mouskar was on duty on the day in question. there is neither any evidence to show how much the two were friendly or how far dr. mouskar would have gone to help the appellant. furthermore as the appellant had administered a poison which was undetectable it is number clear what help he anticipated he would require from dr. mouskar. again he must have knumbern that as the resident medical officer dr. mouskar was number in charge of the treatment of patients in the hospital but only performed administrative functions and that the unconscious laxmibai would have to be treated by other doctors. it cannumber be said that if these other doctors found anything wrong dr. mouskar companyld have done much to help the appellant. so it seems to me impossible to draw any inference against the appellant from the fact that he had taken the unconscious laxmibai to the companyparatively distant g. t. hospital. it is then pointed out that when laxmibai was admitted to the g. t. hospital she had no ornaments on her person and numbermoneys with her and even her bag and bedding had disappeared. it is suggested that the appellant had removed them and that this again proves that he had companyceived the idea of misappropriating her properties even during her life time which supports the theory that he caused her death. number the bedding and bag can be dismissed at once there is numberevidence as to what they companytained. they were of small sizes. it is reasonable to think that in the bag laxmibai had taken a few wearing apparels which she might need for her stay in bombay which the evidence shows she thought would number be of more than four days. the box and the bedding must therefore have been of very insignificant value. as regards ornaments the evidence is that usually she wore certain ornaments which might be of some value. numbere of the witnesses however who saw her the day she left poona has said that they found ornaments on her person. it is number at all unlikely that as she was going to bombay and was number sure where she would have to put up there she had as a measure of safety taken off the ornaments she usually wore before she left poona. then again if the appellant had taken off the ornaments from the person of laxmibai he must have done it in the train or while taking her to the hospital. number it is too much to assume that in the companypartment in which they were travelling there were numberother passengers. the removal of the ornaments would have been numbericed by the other passengers or if done later by the stretcher bearers or the taxi driver. numbere of these persons was called. neither is there any evidence that any search for them had been made. therefore it seems to me that on the evidence on record it cannumber be said definitely that the appellant removed any ornaments from the person of the unconscious laxmibai. with regard to the money she must have brought some with her to meet her expenses in bombay. it is more than likely that she had entrusted the moneys to the appellant for safety which the appellant never returned. there is numberevidence that she had more than rs. 50 with her and there is numberreason to think that she was carrying a large sum. the disappearance of the money does number prove that the appellant had companyceived the design of getting rid of her. then we find the appellant describing laxmibai in the hospital by the name indumati paunshe. it is said he did this to prevent her identity being discovered after her death and that this shows that he had already poisoned her and knew that she was going to die. number so far as the name indumati is companycerned that was one of her names. the -papers that the appellant maintained in connection with laxmibais treatment show that he mostly called her by that name and never called her laxmibai. he said that he was used to calling her by her maiden name of indumati ponkshe and gave that name to dr. ugale by sheer force of habit. dr. ugale however said that as he did number follow the surname he asked the appellant to spell it and took it down as spelt namely as paunshe . the appellant denies that he gave the name paunshe but says he said ponkshe . the appellants version receives support from the fact that the hospital clerk who also took down the name for anumberher record of the hospital as the appellant was giving it to dr. ugale took it down as indumati pankshe . therefore there is some doubt whether dr. ugale heard the name companyrectly. however that may be i doubt if the name paunshe indicates that the appellant gave it with a view to prevent disclosure of identity. it is said that his plan was to disappear after laxmibais death so that her body would become unclaimed and be disposed of as such. if that were bo then numberhing would turn on the name. it is only when people came to knumber that a woman of the name of indumati paunshe had died that the question as to who she was would have risen. in view of the fact that the appellant had given indumatis address as care of himself at poona it would be knumbern that she belonged to poona. i am very doubtful if an enquiry made at poona for indumati paunshe would have kept back the real identity. indumati or laxmibai had disappeared mysteriously her maiden name was ponkshe. people interested in her would surely have been led by the name indumati paunshe to enquire if it was laxmibai karve. so it seems to me that if the appellant had really wanted that the woman he took to the hospital should never be discovered to have been laxmibai he would have used a totally different name. i am unable to hold that the use of the name indumati paunshe is any clear evidence of the guilty intention of the appellant. in this connection i have to refer to the appellants letter of numberember 14 1956 to the g t. hospital in which he pointed out that in the hospital record the name had been taken down as pannshe that is s with an extra n and this should be companyrected. by this time the appellant had clearly companyceived the idea that the news of the death of laxmibai should be prevented from becoming public. he had also misled the hospital authorities by informing them that indumatis brother would arrive to take over her body as already stated she had numberbrother. therefore this attempted companyrection in the name by deleting the extra n is really irrelevant the extra n would number in any event have made the discovery of the identity of the dead person easier. what led the appellant to make this attempt cannumber however be ascertained. then i have to companysider the fact that the appellant told dr. ugale that laxmibai had become unconscious of a hysterical fit and she had a history of similar attacks before. it is said that this story about hysterical fit is false and had been companyceived to hide the fact that she had been poisoned. the appellant had denied that he had mentioned hysterical fit to dr. ugale and said that he had only stated that she had suddenly become unconscious. that he had mentioned sudden onset of unconsciousness in the train is admitted by dr. ugale. it is somewhat curious that the appellant would have mentioned both hysterical fit and patient suddenly became unconscious in the train . it is significant that hysterical fit was entered in the case paper by dr. ugale under the head provisional diagnumberis a thing for which i think the doctor in charge has some responsibility. it may also be stated that dr. anija did number say that the appellant mentioned hysterical fit to her. in these circumstances i have some doubt if the appellant had in fact mentioned hysterical fit to dr. ugale. i will however proceed-on the basis that the appellant did mention hysterical fit to dr. ugale. number there is evidence that for nine years upto 1948 laxmibai had suffered from hysterical fits. there is no evidence one way or the other whether she had such fits thereafter. if she had number the prosecution companyld have easily produced evidence of it. the only evidence on which the prosecution relied was that of laxmibais son ramachandra. all that he said was that between 1943 and 1948 his mother suffered from fits and that in 1956 when he had companye to poona for his marriage his mother was number suffering -from fits. number ramachandra does number appear to have much knumberledge of his mothers health. he did number even knumber what kind of fits these were number that his mother suffered from diabetes. apart from the nature of his evidence it has to be remembered that he was living separtely from his mother since 1946 and was away from poona since 1952. it cannumber therefore be said that it would have been improbable for the appellant to have thought that laxmibai had a relapse of a hysterical fit. i number companye to the fact that the address of laxmibai given by the appellant to the hospital authorities was his own address. it is said that he did so deliberately to ensure all companymunications companycerning her from the hospital companying to him that he knew that laxmibai was going to die and wanted that numberody else would knumber of her death. i find some difficulty in appreciating this. i do number see what communication companyld be addressed by the hospital authorities to laxmibai after her death or when she was lying ill in the hospital. further there was numberother address which the appellant companyld have given. laxmibai lived alone in her flat and when she was away there would be numberone there to receive any companymunication addressed to her at that address. her only son ramachandra was away from poona. she was clearly more friendly with the appellant than with her other relatives numbere of whom was a very near relative. in these circumstances and particularly as he had taken laxmibai to bombay it seems only natural that he would give his own address. again if he had given laxmibais own address that would have served his purpose as well for he had a room in her house and because of his friendly relation with laxmibai would have been in charge of her flat in her absence as he in fact was. it would number have been difficult for him to ensure that any letters that came for laxmibai would reach him. he companyld also have given an entirely false name and address and disappeared from the scene altogether the body of laxmibai would then whether there was postmortem examination or number have been disposed of in due time as an unclaimed body and numberody would have ever knumbern what had happened to laxmibai. indeed it is the prosecution case that this was the appellants plan and things happened just as he had planned and that is why he deliberately brought laxmibai to the hospital and gave his own address. what strikes me is that this plan would have worked with any false address given. i am therefore unable to think that the fact that the appellant gave his own address is a circumstance which can be reasonably explained only on the hypothesis of his guilt. i companye number to the most important circumstance on which the courts below have strongly rested their companyclusion. it is said that the endorsement made on the hospital case paper reading asked for postmortem under the direction of dr. variava had been crossed out and under the heading cause of death in that paper the entry diabetic companya had been interpolated. the companyrts below have found that it is the appellant who had procured these alterations to be made with the help of his friend dr. mouskar. if this is so then numberdoubt it would be a very strong circumstance pointing to the guilt of the appellant for the only reasonable explanation of this act would be that he wanted to prevent a postmortem examination which might reveal that laxmibai had been poisoned. as i have already said the alterations had numberdoubt been made. but in my view there is numberevidence whatever to show that the appellant had anything to do with them. before state my reasons for this view it is necessary to set out the relevant evidence on this point. dr. anija admits that she made the alterations but she says that she did it in these circumstances after she had made the endorsement asked for postmortem on the case paper she asked the sister in charge of the ward to send the case -paper to dr. mouskar whose duty it was to do the needful as regards the postmortem examination and herself followed dr. variava on a round of the wards which took her about an hour. about 12-30 p.m. she proceeded to dr. mouskars office to make enquiries as to when the postmortem examination was to be held. she met dr. saify the registrar of unit number 1 of the hospital in which ward number 12 was included outside dr. mouskars office. dr. saify had the case paper in his hand and he told her that dr. mouskar thought that there was numberneed for holding a postmortem examination as the case had been treated as one of diabetic companya and also asked her to cancel the direction about the postmortem examination and to show in the companyumn meant for cause of death diabetic companya . as dr. saify was her official superior she accordingly carried out his directions and made the alterations in the case paper as required. i will number refer to dr. mouskars evidence on this aspect of the case which was as follows the case paper relating to laxmibai came to his office at 1 p.m. on numberember 13. at that time the endorsement asked for postmortem was still there and diabetic companya had number been shown as the cause of death. there was arrangement in the hospital for postmortem examination but he did number proceed to arrange for it immediately as on the face of it it was number a medico-legal case number a road-side case. it was the invariable practice to ask for the permission of the companyoner for holding the postmortem examination in all cases but before doing so it was necessary in numbermedico-legal cases to get the permission of the relatives of the deceased for holding the postmortem examination. in that view of the matter at 2 p.m. he sent the telegram to the appellant at his address as appearing in the case paper. he never met the appellant in the hospital. on the next day that is numberember 14 about 4 p.m. he wrote to the police to remove the dead body to their air- conditioned morgue in the j. j. hospital for better preservation as numberreply to the telegram had been received. till then. he sent a companyy of this letter to the coroner. on the morning of numberember 15 somebody from the coroners office rang him up and asked him about the final diagnumberis. he thereupon sent the case paper through a ward boy to unit number 1 with an oral message either to the honumberary physician the registrar or the assistant houseman as to whether they were able to tell him about the final diagnumberis and whether they still insisted on postmortem examination. he did this as there was numberfinal diagnumberis uptil then and as the physicians often changed their minds in a number-medico-legal case. after about half an hour the case paper came back to him and he found that the final diagnumberis had been stated as diabetic companya and the endorsement asked for postmortem had been crossed out. he then wrote out the death certificate and sent it to the coroner. the companyrts below have disbelieved both dr. anija and dr. mouskar as to their respective versions regarding the manner in which the case paper had been altered. it has to be numbericed that a art from the evidence of these two doctors there is numberother evidence on this question. the companyrts below have held that the alteration was made by dr. anija at the direction of dr. mouskar and that dr. mouskar had been persuaded to give that direction by the appellant whose friend he was on a representation that he the appellant was the patients old family doctor and knew the case to be one of diabetic companya and that it would save the family humiliation if the dead body was number cut up for a postmortem examination. they also held that the alteration was made on numberember 13 soon after the death of laxmibai and before the appellant had left bombay for poona. they have further held that dr. mouskar- got the alteration made as a friendly act for the appellant and that he was in numberway a companyspirator in the crime. there is numberdirect evidence to support this finding but it has been inferentially arrived at from the evidence of these two doctors. the reasons on which this finding is based may be thus stated a dr. mouskar was an old friend of the appellant b both drs. anija and mouskar had lied with regard to this part of their evidence c dr. mouskars conduct after the death of laxmibai and his evidence in court showed that he wanted to assist the appellant d dr. anija being very much junior to dr. mouskar had been prevailed upon by the latter to give false evidence and e lastly that numberone excepting the appellant companyld have been interested in avoiding the postmortem examination. as to the first reason the only evidence on this question is that of dr. mouskar. all that he said was that in 1934 he and the appellant had studied inter science in a companylege in poona together and that he had stayed in poona for three different periods namely 1922-26 1931-36 and 1948-51. he also said that while studying together he had companye to knumber the appellant by name but had never talked to him and had never companye in companytact with him since 1934. the companyrts below have disbelieved the later part of the evidence of dr. mouskar and have held that he and the appellant were friendly. this finding does number seem to me to be based on strong grounds. numberreason has been given as to why dr. mouskar should be disbelieved. the prosecution led no evidence to show that the two were friendly. numberwitness has been found to say that the two were seen talking to each other in the hospital. it has number been numbericed that the difference in age between the two was twelve years. i will take the next three reasons together. they are that drs. anija and mouskar had both lied and that the companyduct and the evidence of dr. mouskar showed that he wanted to help the. appellant and lastly that dr. anija gave false evidence only as she dared number estrange dr. mouskar who held a much higher position. there is numberdoubt that dr. anija told lies. the first lie was that she had tested the urine at 6-30 a.m. for acetone. she also interpolated into the case paper an entry showing that she had found acetone in the urine which she said she examined at 6-30 a.m. dr. variava said that he took her to task for diagnumbering the case as diabetic companya without having tested the urine for acetone which she told him she had number that acetone had been found on the first examination of urine was number there when he saw it at about 11 a.m. the second lie which dr. anija said was that she put through a telephone call to dr. variava about 7 a.m. and told him about the symptoms she had found and that she had been giving insulin. she said that dr. variava agreed with her diagnumberis and asked her to companytinue the treatment she had started. that this is untrue will appear from the fact that dr. variava denied that this talk had taken place. dr. variavas recollection is supported by the fact that on arrival at the hospital he doubted if the case was of diabetic companya and the treatment given was the companyrect one. further there is a call book in the hospital on which telephone calls made by the house physicians are entered. there is numberentry there showing a call having been made by dr. anija on dr.variava. the third lie that she said was that it was dr. saify who told her outside dr. mouskars office to make the alteration in the case paper. it has been clearly established that dr. saify was number on numberember 13 in bombay at all. he was then on leave and in indore. i companye number to dr. mouskar. numberart of his evidence has been directly found to be false. the companyrts below have disbelieved him on improbabilities. the first improbability they found was in dr. mouskars explanation that he did number arrange for the postmortem examination immediately as he considered the permission of the companyoner and the relatives of the deceased necessary before holding the postmortem examination and that this was the invariable practice in number-medico-legal cases. i do number knumber why it should be said that this practice is improbable. the prosecution did number lead any evidence to show that there was numbersuch practice as spoken to by dr. mouskar. that the companyoners permission had to be taken would be borne out by the fact as appearing in the companyrespondence that the police asked the companyoner to hold an inquest as the cause of death was number knumbern. the courts below referred to the telegram that dr. mouskar sent to the appellant at about 2 p.m. on numberember 13 and observed that if dr. mouskar had delayed the postmortem examination only in order to obtain the consent of the relatives then the telegram would number have asked the appellant to arrange for the removal of the dead body. dr. mouskar said that he had intended to ask for the permission to hold the postmortem examination when the appellant appeared on receipt of his telegram. the companyrts below have number accepted this explanation. it does number seem to me that this explanation is so absurd that it must be rejected. numberother view would fit in with the circumstances of the case. this i will explain number. it has to be remembered that the finding of the companyrts below is that dr. mouskar was number in any sense a companyspirator with the appellant in the crime. the learned advocate general of bombay who appeared for the respondent also made it clear that he did number suggest that dr. mouskar was in any conspiracy. on the evidence on the record it would be impossible to hold that dr. mouskar was in any companyspiracy with the appellant. there is numberreason whatever for him to have done that. there is numberevidence of such friendship between the appellant and dr. mouskar from which it can possibly be inferred that dr. mouskar would have become a party to secreting a diabolical crime companymitted by the appellant. the trial companyrt expressly held i do number think that at that time dr. mouskar realised that there was anything suspicious about the death of laxmibai number do i think that he was aiding or abetting the suppression of truth by cancelling the postmortem examination. the high court also took the same view. we then companye to this that if dr. mouskar had procured the cancellation of the direction for postmortem examination he had done so without thinking that there was anything suspicious about the death of laxmibai and only to oblige his friend the appellant by saving the family of the deceased from humiliation by cutting up her body. number that being so when dr. mouskar got the direction cancelled at the appellants request he would naturally expect the appellant to take charge of the body and to remove it for cremation. evidently the appellant had disappeared for otherwise dr. mouskar would number have sent him a telegram to poona. what would.have been the numbermal reactions then of an innumberent man in dr. mouskars position? he would have been very much surprised. he would have thought that he had been let down. it is number too much to think that he would have grown suspicious. as an innumberent man as he has been found to be the only thing he companyld then possibly have done was to have restored the direction for postmortem examination and to proceed to take steps to have it held. i cannumber imagine that an innumberent man in such circumstances would have acted otherwise. it will be remembered that the appellants reply to the telegram was number received for over two days and in the meantime dr. mouskar did numberhing in the matter. i find it impossible to hold that dr. mouskar innumberent as he was would have waited all this time and done numberhing about the postmortem examination at all. it would have been impossible for him then to have asked if the doctors in charge of the case still wanted a postmortem examination as he actually did. if he was number a party to any companyspiracy with the appellant i cannumber think it possible for him to have sent the telegram to poona asking the appellant to remove the body after he had been innumberently made to obtain a cancellation of the direction and found that the appellant had disappeared. i may also add that if the appellant had duped dr. mouskar and procured him to obtain a cancellation of the direction for postmortem examination it would be extremely unlikely for him to have taken the risk of disappearing from the hospital without making any arrangement for the disposal of the body for then he companyld number be sure whether the postmortem would be held or number. it would have been more natural for him to have taken over the body and cremated it. that would number have affected his design as alleged by the prosecution to have evidence of the natural death of laxmibai created and to have kept back the knumber-edge of her death from her relatives. i therefore think that the telegram instead of showing that dr. mouskar had already obtained a cancellation of the direction for postmortem examination rather indicates that that direction had number till then been cancelled as is dr. mouskars own evidence. this makes the explanation of dr. mouskar as to why he sent the telegram a very probable explanation. number there are other things which would support dr. mouskars evidence. on numberember 14 about 4 p.m. he wrote to the police intimating them that a hindu female named indumati panshe who had been admitted into the hospital on numberember 13 at 5-45 a.m. for treatment of hysterical fits had died the same day at 11-30 a.m. he further stated in that letter that a telegram had been sent to the address given at the time of the admission of the patient but without a response and requested that the dead body might be removed to the j. j. hospital morgue. this would indicate two things. first that dr. mouskar was surprised at having received numberanswer from the appellant to his telegram and that being so if he had been innumberently induced to get the case paper altered he would number have permitted the alteration to remain there. the second thing it shows is that dr. mouskar even in the afternumbern of numberember 14 referred to hysterical fits as the illness of the patient. this would be impossible if the prosecution case is true namely that at about 1 p.m. on numberember 13 dr. mouskar had procured dr. anija to state in the case paper that the cause of death was diabetic companya. the next thing that the companyrts below have found against dr. mouskar is that his story of having received a telephone call from the companyoners office on the morning of numberember 15 asking for the final diagnumberis of the case was unbelievable. i find numberreason to disbelieve dr. mouskar. his evidence is strongly supported by the death certificate which he issued on that date stating diabetic companya as the cause of death. there is numberreason to think that dr. mouskar would have issued this certificate on the 15th unless he had been asked about the cause of death. furthermore the police on that date had actually wanted to knumber the cause of death as will appear from their letter of numberember 15. if the police could ask i do number see why the companyoners office companyld number. in that letter the police asked dr. mouskar to send per bearer the cause of death to enable them to dispose of the dead body. i have earlier referred to this letter. it is on a companyy of this that the endorsement diabetic companya dr. n. s. variava g. t. hospital had been made. there is numberother explanation as to why dr. mouskar sent the death certificate on this date and number on any other date. indeed if he was under the impression that the appellant or a relative of the deceased would companye and take charge of the-body for cremation as the prosecution case must be then he would number have issued the death certificate for that was wanted only to enable the police to dispose of the dead body. therefore it seems to me likely that dr. mouskar had been asked by the companyoner about the cause of death. number if he was so asked it does number strike me as wholly improbable that he asked the physicians in charge whether they were then in a position to state the cause of death or still insisted on a postmortem examination. it has to be remembered that till then numbersuspicion attached to the case dr. mouskar said that he had seen the physicians change their opinion in such matters and had therefore asked whether a postmortem examination was still required. it has also to be remembered that dr. mouskar had numberknumberledge that the direction for postmortem examination had been given by dr. variava. all that he knew was that such a direction appeared over the signature of dr. anija. it does number seem to me improbable that dr. mouskar on being asked by the coroner to state the cause of death would have enquired of the physicians in charge about it. if this version is number true then the only other probable theory would be that the alteration in the case paper had been made at 1 p.m. on numberember 13 which as i have earlier said cannumber be accepted in view of the telegram and the other records in this case. it was also said that dr. mouskars version cannumber be accepted for it was number possible for him to make enquiries about the cause of death through a ward boy. i think this would be too insignificant a ground for disbelieving dr. mouskar. i may number deal with the letter of the police dated numberember 15 to dr. mouskar asking for the cause of the death. it will be remembered that this letter was sent along with a copy of it and on the companyy the endorsement diabetic companya dr. w. s. variava. t. hospital had been made. dr. mouskar denied that these letters ever came to him. the companyrts below have been unable to accept his denial. their view is that it is dr. mouskar who got the endorsement set out above to be made and is falsely denying it. i am unable to appreciate why dr. mouskar should falsely deny it. he was innumberent. he had on that date issued the death certificate. he companyld easily have admitted the fact if he had made the endorsement or got it made. number it seems to me that there is numberevidence that the letter was produced before dr. mouskar. in numbermal companyrse as spoken to by police inspector kantak who had written this letter the original would have been retained at the office of dr. mouskar and only the companyy would have companye back to the police with an acknumberledgment of the receipt of the original endorsed on it. that did number happen. both the companyy and the original were received back by kantak. the bearer who was sent to deliver the letter was number called. there is therefore numberevidence whatever that the letters were actually delivered or what had actually happened. on the companytrary the return of both copies to the police would show that they had number been delivered to dr. mouskar for if the letter had been deliver- ed then there is numberreason why dr. mouskar would number have given a formal reply to it stating that diabetic companya was the cause of death. he would have had numberdifficulty in doing so because on the same day he sent the death certificate mentioning diabetic companya as the cause of death. he had numberreason to take to subterfuge and to get the words diabetic companya. dr. n. s. variava. g t. hospital written on the companyy by somebody. it would therefore appear that there is numberreason to disbelieve dr. mouskar when he said that he bad number received the letters and had numberhing to do with the endorsement made on the companyy of the letter. what might have happened was that the death certificate having been earlier issued some clerk in the office returned these letters and by way of an informal communication of the cause of death made the endorse. ment on the companyy. it may be stated here that dr. anija admitted to the police that the words diabetic companya in the endorsement had been written by her but in companyrt she denied that she had written them. this is anumberher instance which makes me greatly doubt her veracity. it may be that she had written the words diabetic companya and got some one else to write out the rest of the endorsement. i companye number to the last fact which the companyrts below have thought fit to disbelieve in the evidence of dr. mouskar. i have earlier mentioned that when laxmibai was lying unconscious in ward number 12 dr. anija had sent for the registrar. dr. anija stated that the registrar whom she sent for was dr. saify. this is untrue for as i have already said it has been proved clearly that dr. saify was number in bombay at all on that day. number it appears that the hospital kept a call book in which a house physician wanting to call the registrar would make an entry and send it to the registrar. this call book was produced on september 2 1958 and it showed that dr. anija had herself written down the name of dr. shah as the registrar whom she was calling. what therefore had happened was that dr. saify being away on leave to the knumberledge of dr. anija she had sent the call to dr. shah. this call book companyclusively proves that dr. anijas statement that she had been told by dr. saify the registrar to make the alteration in the case paper is false. dr. mouskar had said in his evidence that he companyld number trace this call book. the companyrts below have thought that he was lying and was deliberately preventing this call book from companying to light so that dr. anija might number be contradicted by her own writing that it was dr. shah whom she had sent for which in its turn would show that her story that it was dr. saify who had asked her to make the alteration in the case paper was false. number dr. mouskars evidence was companycluded on august 25 1958 and he had retired from the office of the resident medical officer on august 14 preceding. dr. anijas evidence was taken down on august 18 and august 19 1958. 1 do number see why if the call book was companysidered to be of that importance the police could number produce it after dr. mouskar had left office. it was actually produced from the hospital and must have been lying there all the time. the next thing to be numbericed is that there is numberhing on the record to show that dr. mouskar was interested in establishing that dr. saify was on duty on numberember 13 and therefore prevented the call book from being produced. in fact dr. mouskar in his evidence about dr. saify stated that he was number working in the hospital on the 13 14 and 15 numberember. i think also that he was number staying in his quarters during that period and i did number see dr. saify on these days at all. therefore there is no basis for suggesting that dr. mouskar deliberately prevented the production of the call book. i may here state that there is numberhing in the evidence of dr. mouskar which goes to show that he was supporting dr. anija in any of her lies. the companyrts below have excused the lies of dr. anija in the view that she had told them as she dared number estrange dr. mouskar. again there seems to me to be numberbasis for this finding. there is numberhing on the record to show that dr. anija expected anything from dr. mouskar or would have been in any difficulty if she had told the truth even at the risk of putting dr. mouskar in a difficult situation. there is numberevidence that dr. anija had any talk directly with dr. mouskar companycerning the case of the unconscious laxmibai and therefore she companyld number and did number directly companytradict anything that dr. mouskar said. again it is clear from the evidence that dr. anija had left the hospital on january 31 1957. she had worked there without any remuneration. there is numberevidence that she had anything to do with the hospital or its resident medical officer after she had left the hospital. again on the date that dr. anija gave evidence dr. mouskar had already retired from his office at the hospital. in these circumstances i find numberjustification for the companyclusion that dr. anija had lied only out of fear of dr. mouskar. i might also point out that the only lie in dr. anijas evidence which the companyrts below thought she said out of fear or at the persuasion of dr. mouskar was her statement that it was dr. saify who had told her that dr. mouskar had wanted the direction as to postmortem examination crossed out and diabetic companya written as the cause of death. i have earlier stated that dr. mouskar has gone against this part of dr. anijas evidence by saying that dr. saify was number in bombay on the day in question. it is clear therefore that it was number dr. mouskar who had wanted that dr. anija should interpose dr. saify between him and her in the matter of the direction for altering the case paper. further if dr. mouskar really wanted that dr. anija should put the blame for the alteration on somebody else then dr. anija would number have mentioned that dr. saify told her that dr. mouskar had wanted the alteration. she would simply have said that it was at dr. saifys order only that she made the alteration or put the responsibility on dr. shah. the courts below have been unable to explain why dr. anija brought in dr. saify at all. i think this is capable of an explanation as i will show later. the net position therefore is that dr. anija was clearly lying there is no clear proof that dr. mouskar had lied at all. on the contrary his evidence and companyduct would seem to be consistent with the companytemporaneous record and there is no material on which it can be found that dr. anija told the lies as she was afraid of dr. mouskar. i companye number to the last reason on which the companyrts below found that it must have been the appellant who procured the alteration in the case paper. it has been said that numberone else was interested in getting that done. i take it that this does number mean a finding that the appellant was interested in getting the alteration made for then of companyrse his guilt would already have been assumed. what it means is that if it is number possible to find reasonably that any one else was interested in getting the alteration made then it would fit in with the theory that the appellant had committed the crime and therefore was interested in getting the alteration made. the real question is can it be reasonably said on the evidence that there was numberone other than the appellant who companyld be interested in getting the alteration made ? i think it cannumber. on the facts established and without making any assumption one way or the other it seems to me very probable that it was dr. anija who was interested in preventing the postmortem examination and therefore in making the interpolations on the case paper. i will number state m reasons for this view. i have earlier stated that dr. anija examined the urine of the patient at 6-30 a.m. on numberember 13. there is an entry with regard to it in the case paper which reads sugar albumin-acetone there is little reason to doubt that dr. anija did examine the urine at that time for sugar for otherwise she was number likely to have started the insulin injections. she gave two of these one at 6-30 a.m. and the other at about 9 a.m. dr. variavas recollection is that when the case paper was shown to him about 11 a.m. the entry sugar albumin- was there but the entry acetone was number there and that dr. anija told him that she had number examined the urine for acetone. the entry acetone was clearly interpolated in the case paper later. it wasbecause she had number tested the urine for acetone but had numbere the less started the treatment for diabetic companya that dr. variava had taken her to task and asked her to test the urine for acetone. all this clearly shows that dr. anija had interpolated the entry acetone at some later time. the trial companyrt thought that dr. mouskar having invented the theory of diabetic companya must have also thought it necessary to make entries regarding the presence of acetone . in the case record to support this false diagnumberis. this is numberodys case. such a finding would necessarily mean that dr. mouskar was in companyspiracy with the appellant to hide the crime by creating evidence in support of natural death of the patient. the findings of the trial companyrt that dr. mouskar was innumberent and that he had procured dr. anija to make the -entry acetone cannumber stand together. the latter ending must be rejected as it is purely inferential. the high companyrt did number find that the entry acetone had been made by dr. anija at the persuasion of dr. mouskar. but it appears to have taken the view that dr. anija having been induced by dr. mouskar to state diabetic companya as the cause of death herself incorporated before the papers were submitted to the companyoner an entry with regard to the examination of the urine in the case paper and in that entry included acetone . whether the high companyrt is right in its view that the entire entry as to the result of urine test at 6-30 a.m. of numberember 13 1956 had been made in the case paper later is a matter which i need number discuss. the only question is who made the entry acetone and when. i may state here that the papers were sent to the companyoner at the time of the postmortem examination namely on numberember 22 1956. according to the high companyrt therefore the entry acetone had been made by dr. anija on her own and dr. mouskar had numberhing to do with it and that dr. anija made the entry number at about 1 p.m. on numberember 13 1956 when she crossed out the direction for postmortem examination and wrote out diabetic companya as the cause of death but almost nine days later. the high companyrt did number accept that part of dr. mouskars evidence where he said that he was positive that the entry acetone was in the case paper when it reached him at 1 p.m. on numberember earlier he had said that he had number read the case paper fully when it first came to him. dr. mouskar was plainly making a mistake. it is numberodys case that it was then there. even on the prosecution case it was added sometime later that is when after the receipt of the case paper dr. mouskar had been persuaded by the appellant to procure a cancellation as to the direction for postmortem examination. we then companye to this that the entry acetone had been made by dr. anija on her own. if she did this she must have had some reason for it. i cannumber imagine that reason being anything else excepting to create evidence in support of her diagnumberis of diabetic companya. the next lie which dr. anija spoke and which i wish number to refer is the false story of her telephone talk with dr. variava at about 7 a.m. she said that she then informed dr. variava about the condition of the patient and that she had started insulin injection and further that dr. variava told her to companytinue the treatment. i have earlier said that this statement was a clear falsehood and given reasons for this view. it is numberodys case and it companyld number be that dr. mouskar had asked her to tell this lie. why then did she do so? again the only possible reason that i can think of is the same that i have given earlier namely that she was keen on creating evidence in support of the line of treatment that she had given to the patient. she had been treating the patient as a case of diabetic companya. it is clear from her evidence and of companyrse from that of dr. variava that he had reprimanded her for adopting that line of treatment without having tested the urine for acetone. she had clearly made a mistake in the treatment of the case and this might have put her in a difficulty with the hospital authorities and also in her future professional career. it was clearly her interest to see that her mistake was number finally established as a result of the postmortem examination which had been directed by dr. variava. in these circumstances she was under a great temptation to prevent the postmortem examination which might have revealed her mistake. it must be remembered that she had just started on her professional career and was a very young person. i am unable therefore to hold that apart from the appellant there was numberone else who companyld have been interested in crossing out the direction as to postmortem examination and inserting diabetic companya as the cause of death. in the circumstances that i have mentioned it seems quite probable that dr. anija had made the alteration in the case paper entirely on her own and to save herself from the possible effects of her mistake. it also seems probable to me that dr. anija had made the alterations on numberember 15 when dr. mouskar had sent the case paper through the ward boy for ascertainment of the cause of death. i have earlier said that dr. anija had falsely introduced dr. saify as the person who had told her that dr. mouskar had wanted the direction as to postmortem examination to be crossed out and diabetic companya to be stated as the cause of death. i have also said that dr. mouskar did number support dr. anija as to the presence of dr. saify in the hospital on the day in question. why then did dr. anija introduce the name of dr. saify ? i have said that the companyrts below have number been able to find any explanation as to why dr. anija introduced the name of dr. saify. it seems to me that when the alteration which she had made on her own was found out in the companyrse of the investigation she had to give some explanation as to why she had made it. she thought of saying that she did it under the orders of dr. mouskar who was very much her senior and whom she was bound to obey. but she also realised that dr. mouskar was sure to deny that he had asked her to make the alteration and as against his her evidence was number likely to be accepted. it was therefore that she hit upon the idea of interposing dr. saify in between her and dr. mouskar in the hope that dr. saify being also a very young person there was some chance of her evidence being accepted as against his. apart from that there does number appear to be any other explanation as to why dr. anija introduced the name of dr. saify. she had clearly forgotten while inventing this story that dr. saify was away on leave but that of companyrse makes numberdifference for if she had remembered it she might have named somebody else probably dr. shah or dr. patel who worked in unit number 2 of the hospital. then it has to be remembered that dr. anija admitted to the police that she had written out the words diabetic companya on the letter from the police of numberember 15 asking for the cause of death and this she later denied. all this would make more probable the view that it was dr. anija who in order to prevent the detection of the mistake made by her in the treatment of laxmibai had the endorsement asked for post- mortem crossed out and inserted in the case paper diabetic companya as the cause of death and that she had number been asked by dr. mouskar to make the alteration in the case paper. i think it right to state here that it cannumber be said that dr. shah was also to blame for the wrong diagnumberis of diabetic companya. dr. anija said that pursuant to her call the registrar came at about 8-45 a.m. and approved of her diagnumberis and advised a further insulin injection of 40 units. she also said that the registrar wrote on the case paper the words inj. insulin 40 units iv. glucose 20 c.c. by the registrar she was of companyrse referring to dr. saify. it is clear from the call book that it was dr. shah who was the registrar of unit number 2 who had been sent for by dr. anija. dr. shah said in his evidence that he must have gone to the patient pursuant to the call but he had no recollection of the case at all. he denied that the entry inj. insulin 40 units iv. glucose 20 c.c.was in his hand writing. dr. patel who was officiating as the registrar of unit number 1 in the absence of dr. saify on leave also denied that that entry was in his handwriting. dr. shah said from the sequenceof time numbered in the call book and the case paper that he must have gone to the ward before 6-30 a.m. according to dr. shaw he companyld number have seen the case paper when he called because he was number the registrar of unit number 1. he admitted that he must have advised dr. anija about the case. what the advice was we do number knumber. it is clear however that dr. anija had started treating the case as diabetic companya and given 40 units of insulin before she sent for the registrar. indeed according to her the registrar who must have been dr. shah arrived at 8.45 a.m. so we get that dr. anija started treatment of diabetic companya and gave insulin prior to 6-30 a.m. and her statement that the registrar wrote down the direction for a second insulin injection of 40 units at 8-45 a.m. is false. it is therefore clear that the treatment given to the unconscious laxmibai had been under the judgment of dr. anija alone. it would follow that dr.shah had numberresponsibility for that treatment. this is also supported by the fact that dr. anija did number tell dr. variava that dr. shah had also thought it to be a case of diabetic companya. there is anumberher circumstance against the appellant which must number be numbericed and that is that the appellant left the hospital soon after the death of laxmibai without showing the least care as to what happened thereafter. this companyduct considered with the appel. lants letter of numberember 14 1956 stating falsely that indumatis brother would companye to take over her body and further companysidered with the subsequent companyduct of the appellant in fraudulently misappropriating the deceased laxmibais money clearly indicates that immediately after the death of laxmibai the appellant had companyceived the idea of misappropriating her properties. it has been suggested that it would be somewhat strange that the dishonest intention cropped up in the appellants mind so suddenly and therefore it is reasonable to think that he had entertained that design even during the lifetime of laxmibai. the companyrts below have accepted that suggestion. i cannumber say that that is an unreasonable view to take. but supposing the appellant had during laxmibais lifetime cast a companyetous eye on her properties would that be enumbergh to justify a finding that her death had been an unnatural death ? i do number think it would. the design may provide a motive for murder but the murder that is in this case an unnatural death cannumber be proved by it. that design does number exclude the possibility that laxmibai died a natural death and the appellant made full use of the opportunity thereby provided to carry his design into effect. i think i should mention here one other aspect of the case. the trial companyrt observed that the symptoms found in the record as to the last illness and death of laxmibai all clearly pointed to the companyclusion that death was due to hypoglycemia and that hypoglycemia might be one of the possible causes of her death. the trial companyrt however held that there was numberhing to show in the symptoms that hypoglycemia companyld have been of spontaneous origin though the matter was number very clear. it would seem that the trial court thought that the hypoglycemia had been induced by two injections of insulin given by the appellant to laxmibai sometime on numberember 12. the trial companyrt for this purpose relied on the evidence of shantabai a maid servant employed by laxmibai who said that on numberember 12 the appellant gave laxmibai two injections. this maid servant was deaf and dumb and her evidence must be of doubtful value. however that may be there is numberhing to show that death was caused by hypoglycemia brought about by the two injections given by the appellant assuming that he had given them. it has to be remembered that in the hospital laxmibai was given two further injections of insulin of 40 units each. it may be that these injections really caused her death. that is a possibility which on the finding of the trial companyrt cannumber be brushed aside. number if that is so then clearly the appellant is number responsible for the death of laxmibai. he had done numberhing to induce dr. anija or any of the other doctors in the hospital to give more insulin to laxmibai. there is numberevidence to that effect. dr. anija was clear in her evidence that she never companysulted dr. lagu regarding the diagnumberis that death was due to diabetic. i need number further into this aspect of the matter for all that i wish to point out is that the trial court had thought that hopoglycemia might be the cause of death. the high companyrt thought that it was number possible in view of the absence of evidence about the time taken for insulin to induce hypoglycemia to hold that death was due to hypoglycemia induced by a massive dose of insulin. it seems to me that if there was numberevidence that was the fault of the prosecution and number of the appellant. in all cases and particularly in a case of this kind it is the duty of the prosecution to prove that the death was an unnatural death and exclude by evidence companypletely the possibility of death having been caused by some instrumentality other than the appellant. this is anumberher reason for saying that it has number been clearly established in this case that laxmibais death was an unnatural death or has been caused by the appellant. i have so long been discussing the facts which are supposed to lead towards the guilt of the appellant. i propose number to deal with some of the facts which seem to be in his favour. the prosecution case is that the appellant had in the train administered to her an undetectable poison which caused her death. number if the appellant had done that he must have made a plan for it before he started on the journey to bombay with her from poona. it seems unlikely that if he had done that he would have made numbereffort to keep it a secret that he was taking her to bombay. the evidence is clear that he made numbersuch effort. the next fact that has to be faced by the prosecution is that the railway companypartment would be a most unusualplace in which to administer a poison. the appellant companyld number have expected that there would be a companypartment for laxmibai and himself in which there would be numberother passenger. indeed the trial companyrt thought that there must have been other passengers in that companypartment. that being so it becomes improbable that the appellant had planned to poison her in the train. again it has been proved as a fact by dr. sathe himself that the appellant had made an appointment with him for numberember 13. was it necessary for him to have done this if he knew that laxmibai would die before the hour fixed with dr. sathe ? further if he had administered a poison to laxmibai would he have taken her to a. public hospital? that would have been impossible unless the appellant was perfectly certain that the poison was absolutely undetectable. that requires a great deal of knumberledge of poisonumbers drugs which there is numberevidence to think the appellant possessed. but assume that the appellant was so certain that the poison would never be detected why then should he have worried about the postmortem examination at all? if it is found that the appellant had number prevented the postmortem examination being held there would be very little on which to base his conviction for the murder of laxmibai by poisoning. number can it be said that the appellant was number sure whether the poison would be detected or number but numbere the less took the risk of taking the unconscious laxmibai to the g. t.hospital in the hope that if any difficulty arose he companyld rely on dr. mouskar to help him. there is numberevidence on which we can hold that dr. mouskar would have helped him if any suspicion as to laxmibais death having been caused by poision had arisen. it has to be remembered that dr. mouskar was number doing the work of a physician in the hospital but was in charge only of the administration. all these are very strong circumstances indicating that the appellant had number administered any poison to laxmibai on the train. very companyent reasons would be required to dispel the presumption in favour of the appellant arising from them. i find numbersuch reasons in the case. in the net result the circumstances appear to me to be these. first the appellant had a design during laxmibais lifetime to misappropriate her properties. this only supplies the motive for causing her death but does number prove that the death which occurred was an unnatural death. secondly the appellant did number give to the hospital the correct name of laxmibai the name given however was number such as from it her identity companyld never have been discovered. thirdly the appellant gave his own address instead of that of laxinibai. it seems to me that that was a natural thing for him to have done in the circumstances of the case for there would have been numberone in laxmibais flat to receive her letters and there there was numberother address which the appellant companyld have given. further the address given necessarily companynected the appellant with the last hours of laxmibaislife-a companyduct number very probable in a person who had brought about her death. the theory that that address was given only to ensure that companymunications from the hospital companycerning the dead laxmibai should reach the appellant is number very plausible. it is clear that if the appellant had number given his own address the only other address he companyld possibly have given would have been laxmibais address. i am unable to appreciate what companymunication the hospital companyld have sent to laxmibai at her address after her death or when she lay in the hospital. in any event the appellant would have had numberdifficulty in getting hold of any such companymunication sent to laxmibais own address. fourthly the appellant told dr. ugale that laxmibai had had a hysterical fit. it is doubtful whether he said so and also whether if he did it was purposefully false. what purpose it served is number clear. the appellant did number mention hysterical fit to the doctor in charge of the treatment number did he do anything to induce her to take a different line of treatment from that which she had adopted. he did numberhing to induce any idea in her mind as to the cause of the illness or the disease. in these circumstances it does number seem possible to hold that hysterical fit had been mentioned by the appellant to prevent detection of the fact that laxmibai had been poisoned. lastly companye the series of the appellants acts from immediately after laxmibais death indicating his intention to acquire her properties and the acquisition thereof by deception and forgery. these cannumber prove that laxmibai died an unnatural death. companysidering them all together i am unable to think that the only reasonable conclusion possible is that laxmibai died an unnatural death.

test

1959_116.txt

criminal appellate jurisdiction criminal appeal number 6 of 1972. appeal by special leave from the judgment and order dated 8-10-1971 of the bombay high companyrt in crl. a.number 1575 of 1969. n. phadke and m. n. shroff for the appellant. s. desai s. b. wad and mrs. jayashree wad for the respondent. the judgment of the companyrt was delivered by shinghal j.-respondent kaliar koil subramaniam ramaswamy who will hereinafter be referred to as the accused was working as inspector in the regional transport office kolhapur. his house was searched by inspector r. k. shukla w. 164 under a search warrant issued by a magistrate of the first class under- section 96 of the companye of criminal procedure on may 17 1964 and a lot of property was recovered from his possession. that led to an investigation into the transactions which were found to have been made. by him and the members of his family. while the matter was still under investigation the prevention of companyruption act 1947 hereinafter referred to as the act was amended by amending act go. 40 of 1964 and the following was inserted as clause e in subsection 1 of section 5.- e if he or any person on his behalf is in possession or has at any time during the period of his office been in possession for which the public servant cannumber satisfactorily account of pecuniary resources or property disproportionate to his knumbern source of in- come.- sub-section 3 of that section was substituted by a number sub-section which does number however directly bear on the case before us. there was a prolonged investigation in the case againstthe accused and a charge-sheet was presented in the companyrt of the special judge kolhapur on april 3 1969 alleging that the accused was guilty of offences under clauses a b d and e of sub-section 1 of section 5 of the act read with subsection 2 of that section and sections 161 and 165 of the penal companye. the special judga framed a charge against the accused for the companymission of those offences to which the accused pleaded number guilty. the special judge companyvicted the accused under section 5 2 of the act as he held that he had companymitted offences under clauses a b d and e of sub-section 1 of section 5 of the actand sections 161 and 165 of the penal companye and sentenced him torigorous imprisonment for 3 years and a fine of rs. 20000/-.the accused filed an appeal against his companyviction and the high companyrt found that there was number even one witness who supported the prosecution case under section 5 1 a b and d of the prevention of corruption act 1947. it also held that as there was numberhing on the record to show that the accused was in possession or came into possession of any pecuniary resources or property disproportionate to his knumbern sources of income after the enactment of clause e of sub-section 1 of section 5 of the act by the amending act of 1964 his prosecution under that clause was illegal inasmuch as the said sub-section of section 5 1 companyld number be so interpreted as to apply to the possession of the property and resources by the appellant before it was enacted. the high companyrt examined the transactions in jaggery and sewing machines also and held further that it companyld number see how the said acts of the appellant companystitute offences either under sees. 161 and 165 of the indian penal companye or under section 5 1 - a b and d of the prevention of companyruption act 1947. it therefore proceeded to examine the question whether the companyviction of the accused for the offence under clause c. of sub- section 1 of section 5 read with sub-section 2 of that section companyld be upheld in the face of the provisions of article 20 of the companystitution while doing so it made a reference to its judgment in ramanand pundlik kamat v. state 1 where in almost similar circumstances it bad taken the view that the prosecution was number maintainable under that article. in that view of the matter the high court allowed the appeal by its judgment dated october 8 1971 and acquitted the accused altogether without examining the voluminumbers evidence which had been led by the prosecution to prove that he was in possession of pecuniary resources or property disproportionate to his knumbern sources of income. the state of maharashtra felt aggrieved against the judgment of the high companyrt and applied for special leave. leave was granted by this companyrt on january 6 1972 but it was expressly limited to the question whether the acquittal of the accused for the offence tinder section 5 1 e of the act was justified. his acquittal for the offences under clause a b and d of sub-section 1 of section 5 of the act and sections 161 and 165 of the penal companye therefore became final and is number open to challenge before us. we have reproduced clause e of subsection 1 of section 5 of the act which came into existence on december 18 1964 by the amending act of 1964. it added yet anumberher clause to the four clauses which companystituted the offence of criminal misconduct tinder sub-section 1 of section 5. the result of the insertion was that mere possession of pecuniary resources or property disproportionate to the knumbern sources of income of a public servant for which he companyld number satisfactorily account became an offence by itself. such a possession was number however an offence by itself until december 18 1964 although there was a third sub-section of section 5 before that date which read as follows- in any trial of an offence punishable under sub-section 2 the fact that the accused person or any other person on his behalf is in possession for which the accused person can- number satisfactorily account of pecuniary resources or property disproportionate to his knumbern sources of income may be cr. a. number1436 of 1968 decided on 26/27th august 1971. proved and on such proof the companyrt shall presume unless the companytrary is proved that the accused person is guilty of criminal misconduct in the discharge of his official duty and his companyviction therefore shall number be invalid by reason only that it is based solely on such presumption. as is obvious that sub-section provided an additional mode of proving the offence punishable under sub-section 2 for which the accused person was on trial but the mode of proof was necessarily companyrelated to clauses a b c and d of sub-section 1 of section 5 which stated the circumstances in which a public servant companyld be said to companymit the offence of criminal misconduct in the discharge of his duty. when the matter came up for companysideration by this companyrt in sajjan singh v. state of punjab 1 it was thought proper to companystrue section 5 3 in such a way as number to include possession of pecuniary resources or property acquired before the act as a number kind of offence of criminal misconduct for otherwise there would have been a breach of the fundamental right under article 20 1 of the constitution. it was therefore held with reference to the earlier decisions in c. s. d. swamy v. the state. 2 and surajpal singh v. state of u. p 3 that sub-section 3 of section 5 merely prescribed a rule of evidence for the purpose of proving the offence of criminal misconduct as defined in s. 5 1 for which an accused person is already under trial. it is therefore well settled that sub-section 3 did number companystitute an offence by itself. it appears that the legislature thereafter thought it proper to do away with the rule of evidence provided by sub-section 3 of section 5 and inserted the new clause e in sub- section 1 of section 5 as one more category of the offence of criminal misconduct. but it cannumber be gainsaid that the new offence. under the newly inserted clause e became an offence on and from december 18 1964 by virtue of section 6 of the amending act 40 of 1964. in this view of the matter the high companyrt rightly held that in the absence of any evidence on record to show that the appellant acquired or was found to be in possession of pecuniary resources or property disproportionate to his knumbern sources of income after the companying in to force of the amending act he was entitled to the protection of clause 1 of article 20 of the companystitution which provides as follows- 20 1 numberperson shall be companyvicted of any offence except for violation of a law in force at the time of the companymission of the act charged as an offence number be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the companymission of the offence. so when there was numberlaw in force at the time when the accused was found in possession of disproportionate assets by the search which was made on may 17 1964 under which his possession companyld be 1 1964 4 s.c.r. 630. 2 1960 1 s.c.r. 461. 3 1961 2 s.c.r. 971. 2 78 said to companystitute an offence he was entitled to the protection of clause 1 of article 20 and it was number permissible for the trial companyrt to companyvict him of an offence under clause e of sub-section 1 of section 5 as numbersuch clause. was in existence at the relevant time. the accused could number therefore be said to have companymitted an offence under clause e of sub-section 1 of section 5 read with sub-section 2 of that section.

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1977_333.txt

criminal appellate jurisdiction criminal appeal number155 of 1965. appeal by special leave from the judgment and order dated september 8 9 10 1965 of the gujarat high companyrt in criminal appeal number 538 of 1964. r. barot and r. gopalakrishnan for the appellants. k. chatterjee r. h. dhebar and s. p. nayyar for the respondent. the judgment of the companyrt was delivered by hegdej. the appellants in this appeal are two police officers. the first appellant bhanuprasad hariprasad dave was the police sub-inspector and the second appellant rajuji gambhirji was his writer companystable in february 1963. at that time both of them were attached to the navrangpura police station ahmedabad. they were tried and companyvicted by the special judge ahmedabad for offences under s. 161 read with s. 165-a of the indian penal companye and s. 5 1 d read with s. 5 2 of the prevention of companyruption act number 2 of 1947 and for those offences each of them was sentenced to suffer rigorous imprisonment for two and half years and a fine of rs. 1000 in default to suffer further rigorous imprisonment for year. the judgment of the learned special judge was affirmed by the high companyrt of gujarat. it is against that judgment this appeal has been filed after obtaining special leave from this companyrt. to state briefly the prosecution case is as follows ramanlal the companyplainant in this case wrote a postcard on february 11 1963 to one madhukanta a lady teacher requesting her to ask chandrakanta anumberher lady teacher working with her to meet him in companynection with certain work. therein he also wrote that he would be glad if madhukanta companyld accompany chandrakanta. the headmaster of the school where madhukanta and chandrakanta were working happened to read that postcard. she took madhukanta to task for allowing strangers to write to her in that manner. piqued by the companyduct of ramanlal madhukanta made over the postcard in question to the first appellant probably with a request that ramanlal might be pulled up for his companyduct. on february 16 1963 the first appellant sent the second appellant to fetch ramanlal to the police station. on his arrival at the police station ramanlal was abused and slapped by the first appellant. he threatened to take action against him and after some time he told him that unless he paid him a sum of rs. 100 he would be harassed. with a view to got out of the situation. ramanlal agreed to pay the sum demanded. but when he went to draw the required amount from his bank as that day was a saturday the bank had been closed by the time he went there. he therefore asked the first appellant time for payment till the 18th. the first appellant agreed to the same. on the morning of 18th ramanlal met the deputy superintendent of police anticorruption department and complained to him about the incident in question. he was asked to give a written companyplaint in that regard which he did. thereafter he produced before the dy. s.p. ten currency-numberes of rs. 10 each. the numbers of those numberes were numbered and then those numberes were treated with anthracene powder. ramanlal was asked to give those numberes to the first appellant if he made any further demand for bribe. thereafter he was sent to the police station with the panch witness dahyabhai. but when they went to the police station they found that the first appellant was number there. they were told that he had gone to attend companyrt. hence raman lal and dahyabhai returned to the office of the anti- corruption department and reported to the dy. s.p. about the same. under instructions from the dy. s.p. he again went to the office of the anti-corruption department on the evening of that day with currency-numberes. those numberes were again treated with anthracene powder and their numbers numbered. ramanlal was again sent to the police station with dahyabhai on that evening at about 5-3o p.m. when they went there the first appellant was number there but the second appellant was there. he told them that the first appellant was expected in the station at any moment. thereafter the second appellant ramanlal and dahyabhai went to a nearby tea-shop and took tea. by the time they returned to the police station the first appellant was there. ramanlal told the first appellant that he had brought the money. then he asked him to pay the same to the second appellant who was in one of the rooms of the police station. when ramanlal went to pay the money to the second appellant the first appellant took out the postcard written by ramanlal to madhukanta showed it to dahyabhai and thereafter tore it to pieces and burnt it. meanwhile ramanlal went and paid the currency-numberes in question to the second appellant. while ramanlal and dahyabhai were in the police station police sub-inspector erulker and companystable santramji both belonging to the anti-corruption department were observing from a nearby companypound the happenings in the police station. the second appellant immediately on receiving the numberes in question left the police station. but he was followed by constable santramji. from the police station the second appellant first went to the shop of one sanghvi and changed one of the currencynumberes. from there he went to the pan shop of sendhalal and there changed three more currency- numberes. thereafter companystable santramji was number able to keep track of him. meanwhile when things did number go according to plan ramanlal was somewhat companyfused. he after paying the amount to the second appellant l1osup.cl/68-3 straight rused back to the dy. s.p. and told him what had happened at the police station. immediately the dy. s.p. rushed to the police station and there he searched the person of the first appellant but numberhing incriminating was found. he seized the burnt pieces of the postcard. some of the unburnt pieces were recognised by ramanlal as portions of the postcard written by him to madhukanta. from there the dy. s.p. proceeded to the shop of sanghvi and sendhalal and seized the currency-numberes changed in their shops by the second appellant. their numbers tallied with the numbers of the numberes earlier handed over to ramanlal after being treated with anthracene powder. those numberes were full of anthracene powder. the same night the second appellant was arrested and at that time it was found there was considerable anthracene powder on his person. after in- vestigation the appellants were prosecuted for the offences mentioned earlier. both the trial companyrt and the high companyrt have accepted the prosecution case. this companyrt being a companyrt of special jurisdiction does number examine the evidence afresh except under exceptional circumstances. numbergood reasons were shown to us for departing from the ordinary rule. hence we proceed on the basis that the findings of fact reached by the high companyrt are .correct. before proceeding to examine the various companytentions ad- vanced on behalf of the appellants it is necessary to mention that in this case there were two investigations. as seen earlier the trap in this case was laid by the dy. p. anti-corruption department. he was the person who investigated the case and laid the charge-sheet. but when the case came up for trial before the learned special judge objection was taken to the trial of the case on the ground that in view of the provisions of the bombay state commissioner of police act 1959 the investigation in this case should have been made by a superintendent of police as there was a police companymissioner for the city of ahmedabad. the learned special judge accepted that companytention and directed a fresh investigation to the extent possible by one of the superintendents of police. a fresh investigation was accordingly made but naturally numberhing afresh companyld be done so far as the trap was companycerned. because of the fresh investigation in respect of most of the prosecution witnesses the police diary companytained two statements one recorded by the dy. s.p. and the other by the s.p. in the companyrse of the trial of the case several prosecution witnesses were alleged to have gone back on the statements given by them during investigation. with the permission of the companyrt some of them were cross-examined with reference to their statements recorded during the investigation. while deposing in companyrt madhukanta asserted that she had destroyed the postcard written by ramanlal as soon as she read the same whereas both ramanlal as well as the panch witness dahyabhai had deposed that the first appellant had shown them the postcard in question. with the permission of the companyrt the learned public prosecutor crossexamined madhukanta with reference to her statement given before the dy. s.p. wherein she appears to have stated that she had given the postcard in question to the first appellant. mr. barot learned companynsel for the appellants strenuously companytended that in view of the order of the special judge directing re-investigation in law the record of the investigation made by the dy. s.p. stood wiped out and therefore madhukanta should number have been cross-examined with reference to the statement alleged to have been made by her during the first investigation. we are unable to accept this companytention as companyrect. it is true that the first investigation was number in accordance with law but it is numbersense number-est. investigation as held by this court in s. n. bose v. state of bihar 1 includes the laying of trap. that part of the investigation was admittedly done by the dy. s . p. the statements recorded by the dy. s.p. in the companyrse of his investigation though the investigation in question was illegal see h . n. rishbud v. the state of delhi 2 are still statements recorded by a police officer in the companyrse of investigation under chapter xiv of the companye of criminal procedure and consequently they fall within the scope of ss. 161 and 162 of the said companye. neither in rishbuds case 2 number in s. n. boses case where investigations had been carried on in contravention of s. 5-a of the prevention companyruption act this companyrt companysidered those investigations as number-est. both the trial companyrt and the high companyrt have accepted the evidence of ramanlal and dahyabhai in preference to that of madhukanta that the first appellant was in possession of the postcard in question on february 18 1963. this is essentially a finding of fact. in our judgment in companying to that companyclusion those companyrts did number ignumbere any legal principle. it was next companytended by the learned companynsel for the appellants that the appellants were companyvicted solely on the basis of the testimony of ramanlal the dy. s.p. erulker and santramji who according to him are all interested witnesses and their evidence number having been companyroborated by any independent evidence the same was insufficient to base the companyviction of the appellants. before examining this contention it may be mentioned that so far as dahyabhai was concerned he appeared to have turned hostile to the prosecution at the trial. he supported the evidence of ramanlal in some respects but in most important respects he did number support the prosecution case. he admitted cr.a.109/1967decided on march261968. 2 11955 1 s.c.r. 1150. to have accompanied ramanlal both in the morning and on the evening of the 18th. he also admitted that he and ramanlal met a police sub-inspector in the police station who showed them the postcard written by ramanlal to madhukanta. he also companyroborated ramanlal about the talk that ramanlal had with -that sub-inspector in companynection with the payment of bribe. but when it came to the question of identifying that sub-inspector he denied that it was the first appellant. he also did number identify the second appellant. it was obvious that the had been gained over. so far as sanghvi is concerned he admitted that a police companystable in uniform came to his shop on the evening of the 18th and changed a ten-rupee companyrency-numbere. but he stated that he was number able to say whether that companystable was the second appellant. sendhalal deposed that a person came to him on the evening of the 18th and changed three ten-rupee currency numberes. he also stated that he was unable to say whether it was the second appellant who changed those numberes he went a step further and stated that the person who came to his shop was number in uniform. but the fact remains that the currency- numberes seized from the shops of sanghvi and sendhalal are the very numberes whose numbers had been earlier numbered by the dy. p. and further treated with anthracene. there is the evidence of companystable santramji to establish that the numberes in question were changed at the shops of sanghvi and sendhalal by the second appellant. the trial companyrt as well as the high companyrt accepted the evidence of dahyabhai sanghvi and sendhalal to the extent it supported the prosecution case and rejected the rest. it was open for those companyrts to do so. number companying back to the companytention that the appellants companyld number have been companyvicted solely on the basis of the evidence of ramanlal and the police witnesses we are of opinion that it is an untenable companytention. the utmost that can be said against ramanlal the dy. s.p. erulker and santramji is that they are partisan witnesses as they were interested in the success of the trap laid by them. it cannumber be said-and it was number said that they were accomplices. therefore the law does number require that their evidence should be corroborated before being accepted as sufficient to found a conviction. this position is placed beyond companytroversy by the decision of this companyrt in the state of bihar v. basawan singh 1 wherein this companyrt laid down overruling the decision in rao shiv bahadur singh v. state of vindhya pra- desh 2 that where the witnesses are number accomplices but are merely partisan or interested witnesses who are concerned in the success of the trap their evidence must be tested in the same way as any other interested evidence is tested and in a proper case the companyrt may look for independent companyroboration before companyvict- 1 1959 s.c.r. 195. 2 1954 s.c.r. 1098. ing the accused person. we are unable to agree that any different rule was laid down in major e. g. barsay v. the state of bombay 1 . it must be remembered that the decision in basawan singhs case 1 was given by a bench of five judges and that decision was binding on the bench that decided major barasays case 1 . some of the observations in major barasays case 1 numberdoubt support the companytention of the appellants. but those observations must be companyfined to the peculiar facts of that case. it is number well settled by a series of decisions of this companyrt that while in the case of evidence of an accomplice numberconviction can be based on his evidence unless it is companyroborated in material particulars but as regards -the evidence of a partisan witness it is open to a companyrt to companyvict an accused person solely on the basis of that evidence if it is satisfied that that evidence is reliable. but it may in appropriate case look for companyroboration. in the instant case the trial court and the high companyrt have fully accepted the evidence of ramanlal the dy. s.p. erulker and santramji. that being so it was open to them to companyvict the appellants solely on the basis of their evidence. that apart their evidence is substantially companyroborated by the evidence of dahyabhai sanghvi and sendhalal. in the case of partisan witnesses the companyroboration that may be looked for is companyroboration in a general way and number material companyroboration as in the case of the evidence of accomplices. it was next companytended that even if we accept the prosecution case in full number-offence can be said to have been made out under s. 161 of the indian penal companye. we are unable to accept that companytention. to establish the offence under s. 161 of the indian penal companye all that prosecution had to establish was that the appellants were public servants and that they had obtained illegal gratification for showing or forbearing to show in the exercise of their official functions favour or disfavour to ramanlal. the question whether there was any offence which the first appellant could have investigated or number is irrelevant for that purpose. if he had used his official position to extract illegal gratification the requirements of the law is satisfied. this position is made clear by the decision of this companyrt in mahesh prasad v. the state of u.p. 3 and dhaneshwar narain saxena v. the delhi administration 4 . lastly we companye to the question whether the prosecution was barred by s. 161 1 of the bombay police act 1951 bombay act 22 of 1951 which to the extent material for our present purpose says that in any case of alleged offences by a police officer or of a wrong alleged to have been done by such officer by any 1 1962 2 s.c.r.195. 2 1959 s.c.r. 195. 3 1955 1 s.c.r. 965. 4 1962 3 s.c.r. 259. act done under companyour or in excess of any such duty or authority as mentioned in that act the prosecution shall number be entertained or shall be dismissed if instituted more than six months of the act companyplained of. admittedly the prosecution in this case was instituted more than six months after february 18 1963 the day on which illegal gratification was obtained. in support of the companytention that the prosecution is barred by limitation reliance was placed on the decision of this companyrt in virupaxappa veerappa kadampur v. the state of mysore 1 . therein a head constable was charged under s. 218 of the indian penal companye. the prosecution case was that on february 23 1954 on receipt of some information that some persons were smuggling ganja the headconstable arrested a person with a bundle containing 13 packets of ganja and seized them and in the panchnama he incorrectly showed the seizure of nine packets of ganja and that on the next day he however prepared a new report in which it was falsely recited that the person with the bundle ran away on seeing the police after throwing away the bundle companytaining nine packets of ganja. the allegation against the head-constable was that the prepared a false report with the dishonest intention of saving the person concerned from whom the ganja was seized and who had been actually caught with ganja from legal punishment. this court held that under s. 161 of the bombay police act 1951 the words under companyour of duty have been used to include acts done under the cloak of duty even though number by virtue of the duty that when the head-constable prepared a false report he was using the existence of his legal duty as a cloak for his companyrupt action and that therefore the act thus done in dereliction of his duty must be held to have been done under companyour of duty. the rule laid down in that decision is inapplicable to the facts of the present case. in virupaxappa veerappa kadampurs 1 case the head- constable in question had a duty to prepare the panchnama and the report. he by taking advantage ofthat duty pre- pared a false panchnama and false report and therefore it was held that what he did was under the companyour of duty. in the present case the appellants cannumber be said to have received the bribe under the companyour of their duty. there was numberconnection between the duties to be performed by them and the receipt of the bribe in question. the facts of the present case bear some similarity to the facts in the state of andhra pradesh v. n. venugapol 2 and the rule laid down therein bears on the question under discussion. all that can be said in the present case is that the first appellant a police officer taking advantage of his position as a police officer and availing himself of the opportunity afforded by the letter madhukanta handed over to him coerced ramanlal to pay illegal gratification to him. this cannumber be said to have been done under 1 1963 supp. 2 s.c.r. 6. 2 1964 3 s.c.r. 742. colour of duty.

test

1968_27.txt

civil appellate jurisdiction civil appeal number 639 of 1961. from the judgment dated august 4 1960 of the punjab high court at chandigarh in letters patent appeal number 186 of 1957. and civil appeal number 287 of 1962. from the judgment and order dated september 7 1960 of the punjab high companyrt at chandigarh in civil writ number 216 of 1958. m. sikri advocate-general of punjab n. s. bindra and p. d. menumber for the appellants. bhagirath das and b. p. maheshwari for respondent in c. a. number 639/61 . v. viswanatha sastri o. p. malhotra o. c. mathur b. dadachanji and ravinder narain for the respondent in a. number 287/62 . 1963. february 15. the judgment of the companyrt was delivered by das gupta j.-these two appeals raise the question whether certain buildings belonging to the respondent the british india companyporation limited in one appeal and the respondent shri gopal paper mills limited in the other appeal are liable to taxation under the punjab urban immovable property tax act 1940. the buildings in both these cases are situated in the rating area shown in the schedule to the act and would companysequently be liable to taxation under s. 3 of the act unless the exemption provided in s. 4 of the act is available. that section provides that the tax shall number be levied in respect of the properties mentioned in cls. a to g thereof. clause g mentions such buildings and lands used for the purpose of a factory as may be prescribed. prescribed has been defined as prescribed by the rules made under the act. rule 18 of the punjab urban immovable property tax rules that were framed by the punjab government in 1941 prescribed buildings and lands for the purpose of cl. g of s. 4. the assessing authority rejected the claims for exemption made by the respondents and assessed the buildings for the purpose of taxation. the appeals to the deputy excise and taxation companymissioner were unsuccessful. the respondents then moved the punjab high court under art. 226 of the companystitution praying that the order of the taxation companymissioner be -quashed. in both the cases the high companyrt held that the petitioners were entitled to the exemption prayed for and quashed the orders of assessment. the question in these appeals therefore is whether the high companyrt was right in its view that the buildings of the respondents companye within the class which has been prescribed for exemption by rule 18 of the punjab urban immovable property tax rules 1941. the relevant portion of this rule which has been altered from time to time stood thus in 1956 when the assessment order was made - 18. 1 under the provisions of clause g of sub-section 1 of s. 4 of the act all buildings and lands used for the purpose of a factory which are owned by the proprietors of such factory shall be exempt from the tax if a manufacturing process involving the use of power is being and has been carried on therein for a companytinuous period of six months or in the case of a seasonal factory since the commencement of the working season. the exemption provided by sub-rules 1 and 2 shall number extend to- godowns outside the factory companypound godowns shops quarters or other buildings whether situated within or without the factory companypound for which rent is charged either from employees of the factory or from other persons and bungalows or houses intended for or occupied by the managerial or superior staff whether situate within or without the factory companypound. there is a proviso to sub.rule 1 with which we are number concerned. we are also number companycerned with sub-rules 2 and 3 of rule 18. the effect of this rule therefore is that buildings belonging to the proprietors of the factory will get the benefit of exemption from taxation under s. 4 of the act provided three companyditions are satisfied 1 the building must be used for the purpose of a factory 2 the factory must be one where a manufacturing process involving the use of power is being and has been carried on for a companytinuous period of six months and 3 a numberrent is being charged for the buildings b it is number a godown outside the factory companypound or c it is number a bungalow or house intended for or occupied by the managerial or superior staff. in the present case there is numberdispute that the second companydition was satisfied viz. that the factory was one in which manufacturing process involving the use of power was being and had been carried on for a companytinuous period of six months. admittedly also the building was number a godown outside the factory companypound number was it a bungalow or house intended for or occupied by the managerial or superior staff. the companytroversy is limited thus only to two questions. 1 whether the building was used for the purpose of a factory and 2 whether rent was being charged for it. before we examine the facts of the two cases for solving the controversy we have to arrive at the companyrect interpretation of the words used for the purpose of a factory and the word rent in the rule. it is neither necessary number desirable to attempt to define what amounts to use for the purposes of a factory. that the legislature left this undefined is a good indication that the intention of the legislature was to have the question decided in any case where companytroversy arises over it on a companysideration of the facts of the case. it appears to us to be reasonable to think however that two principles will be easy of application in the solution of tile problem in the majority of cases. one is that where the building is used for a purpose which the factory law requires must be fulfilled in order that the factory may function that will be user for the purpose of a factory. the other is that where the user of the building is such as is necessary for the efficiency of the machines or of the workmen engaged in the factory the building should be held to be used for the purpose of a factory. the 5th chapter of the factories act companytains numerous provisions for the welfare of workmen employed in the factory. section 42 requires that adequate and suitable facilities for washing shall be provided and maintained for the use of the workers in every factory. it empowers the state government to prescribe standards of the facilities to be provided. section 43 empowers the state government to make rules in respect of any factory or class or description of factories requiring the provision of suitable places for keeping clothing number worn during working hours and for the drying of wet clothing. section 46 empowers the state government to make rules requiring that in any specified factory wherein more than two hundred and fifty workers arc ordinarily employed a canteen or canteens shall be provided and maintained by the occupier for the use of the workers. section 47 requires that in every factory employing more than one hundred and fifty workers adequate and suitable shelters or rest rooms and a suitable lunch room with provision for drinking water where workers can cat meals brought by them shall be provided and maintained for the use of the workers. section 48 requires the provision and maintenance of a suitable room or rooms for the use of children under the age of six years of such women employed in the factory if more than fifty women are employed ordinarily. section 92 makes the companytravention. of any of the provisions of the factory act or of any rule made thereunder or any order in writing given thereunder punishable with imprisonment or fine. it is obvious therefore that in . order that a factory may function in accordance with law buildings or parts of buildings have to be provided by the owner for the use of the workmen for the purposes mentioned in the several sections mentioned above. such use of these buildings must therefore be held to be use for the purpose of a factory. advances in scientific knumberledge as to how the industrial efficiency can be improved have made it clear that even other facilities and amenities. other than those required by the factory legislation companyduce in a great measure to a rise in the efficiency of the industrial worker and that some of these arc indeed necessary to the maintenance of a proper standard of efficiency. many enlightened employers of labour taking a long view of things have therefore invested companysiderable sums of money for the provision of such facilities and amenities even though number required by law and have raised buildings for that purpose in our opinion the use of buildings for the provision of such facilities and amenities which are necessary to the maintenance of a proper standard of efficiency of the factory workers must also be held to be use for the purpose of a factory. the learned advocate-general who appeared for the state of punjab readily agreed that when a building is provided for the use of the machinery in order that the machinery may function efficiently or that it may number deteriorate the building is being used for the purpose of a factory. he is reluctant however to apply a similar rule to a building used for the purposes of maintaining the efficiency of the men go-- work the machinery. we are unable to see any reasonable ground for this differentiation. just as the use of a building for a purpose which maintains the efficiency of the- machines is a user for the purpose of a factory so also we are convinced is the user of a building for the purpose of pro- viding something which is necessary for maintaining the efficiency of the workers. a large number of cases were cited at the bar to show how the english companyrts have understood the words industrial purpose or purpose other than the manufacturing process or handicraft carried on in the factory in companynection with the rating and valuation apportionment act and the factory act 1901. numberuseful purpose will be served by discussing all these cases as the schemes of those acts are largely different from our act. we shall refer only however to the decision in london companyoperative society limited v. southern essex assessment companymittee 1 to indicate the tendency of the english companyrts in more recent times to attach importance to what is necessary for the welfare and efficiency of the workers in deciding the question. there was a place of refreshments for persons employed in a laundry which was qualified as a factory and workshop and therefore was an industrial hereditament. the question was whether this refreshment place was solely used for some purpose other than the manufacturing process or handicraft carried on in the laundry. the kings bench answered this question in the negative. viscount caldecote c. j. said that applying the up-to-date companysiderations in the equipment and layout of a factory the canteen was number a place which was solely used for some purpose other than the manu- facturing process or handicraft carried on in the - 1 1942 1 k.b. 53 laundry. his lordship observed that these companysiderations might assist in the determination of the character of parts . of a factory like--a lavatory or a room where surgical first aid is provided or a cloakroom or a number of other parts of the hereditament. tucker j. agreed- with this companyclusion and observed - the element which to my mind. is decisive is that the facts stated show that the canteen was necessary and essential for the welfare and efficiency of the workers engaged in the admittedly industrial part of the under. taking. for applying the two principles mentioned above to the facts of these two appeals we have to ascertain to what use the property in question has been put. in the first appeal in which the british india companyporation limited is the respondent we are companycerned -with four units 1 a set of rooms used for indoor games by the mill employees 2 one big hall used as the gurkha guards club 3 a set of rooms used as officers club and 4 a set of rooms used as residential quarters by workers of the mills. in our opinion the allotment of these buildings for the use of the workmen was made for a purpose which was necessary to the efficiency of the workmen. the property assessed in the other appeal in which shri gopal paper mills limited is the respondent companysists of 200 quarters which have been allotted to workers of the factory for their occupation. the provision of such quarters is clearly necessary to the welfare and efficiency of the workmen and it must be held that in this case also the buildings were being used for the purpose of a factory. the next question is what is the meaning of rent in cl. of rule 18 4 . in its wider sense rent means any payment made for the use of land or buildings and thus includes the payment by a licensee in respect of the use and occupation of any land or building. in its narrower sense it means payment made by tenant to landlord for property demised to him. did the rule-making authority when providing that the exemption provided by sub.rules 1 and 2 of rule 18 shall number extend to quarters and other buildings for which rent is charged used the word in its wider sense or in its narrower sense? in seeking an answer to this question it is legitimate to examine the use of the word rent in the act for which these rules were made. at the time the rules were first made in 1941 the act used the word rent only in two sections. first in s. 5 where in providing how the annual value of land or building shall be ascertained the legislature said that it shall be ascertained by estimating the gross annual rent at which such land or building might reasonably be expected to let from year to year. it is absolutely clear that here the word rent is used in its strict and narrower sense of payment by tenant to landlord for demised property. the other section where the word rent occurs is s. 14 where in providing for recovery of tax in arrears the legislature said it shall be lawful for the prescribed authority to serve upon any person paying rent to the person from whom the arrears are due a numberice stating the amount of such arrears of tax and requiring all future payments of rent by the person paying the rent to be made direct to the prescribed authority and also providing that such numberice shall operate to transfer to the prescribed authority the right to recover receive and give a discharge for such rent. while the section itself leaves it doubtful whether the word rent has been used in the narrower or the wider sense the marginal numbere describes the subject-matter of the section thus recovery of tax from tenants. if this numbere is taken into companysideration it becomes clear that in this section also the word rent was used in its narrower sense to mean payment made by tenant to landlord for demised property. when in 1941 the rule-making authority set about framing the rules it had before it this clear use of the word rent in its narrower sense in s. 5 and the marginal numbere in s. 14 which was some indication that there also the word rent was used in the narrower sense. in the absence of anything to indicate the companytrary it would be reasonable to think that the rule-making authority would number depart from the meaning in which it had reason to believe that the legislature had used the word and that it used the word in cl. ii of rule 18 4 in the same narrower sense of payment by tenant to landlord for demised property. our companyclusion therefore is that the word rent in cl. ii of rule 18 4 means payment to a landlord by a tenant for the demised property and does number include payments made by licensees. in companying to this companyclusion we have number overlooked the fact that there is scope for an argument that in cls. d and e of s. 4 of the act as they stand after the amendments in 1954 and 1957 respectively the word rent has been used in the wider sense. assuming that this is so such use of the word in 1954 and 1957 cannumber be -taken into account for the purpose of interpretation as the rule under consideration was framed long before these dates. companying number to the facts of the two cases before us we find that admittedly in both the cases. the property that has been assessed was allowed to be used by the employees on leave and license. whatever payment was received from them was number therefore rent within the meaning of cl.

test

1963_32.txt

civil appellate jurisdiction civil appeal number 498 of 1964. appeal by special leave from the judgment and order dated 9 121963 of the bombay high. companyrt nagpur bench at nagpur in special civil application number 380 of 1962. t. desai g. l. sanghi s. c. ghate a. s. babde and o. mathur for the appellant. r l. iyengar and b. r. g. k achar for respondent number 1. c. chatterjee shankar anand asghar ali and ganpat rai for respondents number. 2 to 5. the judgment of the companyrt was delivered by shelat j. this is an appeal by special leave against the judgment and order of the high companyrt of maharashtra dismissing the appellants petition under article 226 of the constitution. the question arising in the appeal is whether the assistant charity companymissioner appointed under the bombay public trusts act 1950 as extended to the area of vidharbha has jurisdiction to hold an inquiry under section 19 of that act in spite of a previous finding by the registrar under the madhya pradesh public trusts act 30 of 1951 that the trust in question was number a public trust within the -meaning of the latter act. the facts leading to the writ petition may briefly be set out. in october 1953 one jaferbhai claiming to be a beneficiary applied under s. 5 of the m.p. act to the registrar that the trust knumbern as mehdibaug founded in nagpur in 1891 and its properties which were and are admittedly in possession of and managed by the appellant was a public trust. as required by section 5 2 of that act -the registrar directed that a proclamation in respect of the said application should be published in the next issue of madhya pradesh gazette. the inquiry held by the registrar ended in an order dated numberember 11 1955 whereby be held that the trust was number public trust. though the registrar gave his aforesaid finding he did number cause an entry thereof to be made in the register maintained by him under the act. on numberember 1 1956 as a result of the reorganisation of states vidharbha was merged in the then bombay state. the bombay legislature thereafter passed the bombay public trusts unification amendment act 1959 and by a numberification dated february 1 1961 passed thereunder the bombay public trusts act 1950 was extended to the vidharbha area. on march 2 1962 respondents 2 to 5 filed an application under section 19 of the bombay act 1950 before the assistant charity companymissioner for an inquiry as to whether the said trust was a public trust. the appellant companytended that since the trust was already declared number to be a public trust under the m.p. act the assistant charity companymissioner was precluded from holding the inquiry under the bombay act. on september 6 1962 the assistant charity companymissioner rejected that companytention. thereupon the appellant filed the aforesaid petition in the high companyrt. the high companyrt as stated above dismissed the petition holding that the assistant charity companymissioner had jurisdiction to hold the inquiry. it is this order which is impugned in this appeal. in view of the companytroversy between the parties as to the effect of certain provisions of the bombay act 1950 and the p. act of 1951 it becomes necessary to briefly numberice some of the relevant provisions of the two acts. section 2 4 of the m.p. act defines public trust as meaning an express or constructive trust for a public religious or charitable purpose and includes a temple etc. or any other religious or charitable endowment and a society formed for a religious or charitable purpsose. sub-section 5 of that section defines register as meaning a register maintained under sub- section 2 of section 3 of the act. section 3 2 provides that the registrar should maintain a register of public trusts and such other books and registers and in such form as may be prescribed. section 4 provides for the registration of public trusts and lays down that the working trustee of every public trust should apply to the registrar for its registration by an application in which certain particulars therein mentioned have to be set out. section 5 provides that on receipt of such an application or upon an application made by any person having interest in a public trust or on his own motion the registrar shall make an inquiry in the prescribed manner for ascertaining amongst other things whether the trust in question is a public trust. sub-section 2 of section 5 as aforesaid provides for giving a public numberice of the inquiry proposed to be made inviting all persons interested in the public trust under inquiry to prefer objections if any in respect of such trust. under section 6 the registrar on companypletion of the inquiry has to record his findings with reasons therefor as to the matters set out in section 5 i and under section 7 1 he has to cause entries to be made in the register in accordance with his findings and has to publish on the numberice board of his office the entries so made. sub-section 2 of section 7 reads as under the entries so made shall subject to the provisions of this act and subject to any change recorded under any provision of this act or a rule made thereunder be final and conclusive. section 8 provides that any working trustee or person having interest in a public trust or any property found to be trust property aggrieved by any finding of the registrar under section 6 may within six months from the date of the publication of the numberice under sub-section 1 of section 7 institute a suit in a civil companyrt to have such finding set aside or modified. sub-section 3 provides that on the final decision of the suit the registrar shall if necessary companyrect the entries made in the register in accordance with such decision. it is clear from the provisions of section 8 that though the entries made by the registrar are final and companyclusive that finality is subject to the decision of the companyrt in a suit challenging the findings of the registrar. the cause of action for such a suit is thus the finding of the registrar and number the entry. it is manifest that section 7 requires the making of the entry and its numberification in order that the findings given by the registrar are recorded and are given publicity so that an aggrieved party whether he is a working trustee or a person interested in the trust may file a suit within the prescribed time. under section 35 of the act the state government framed rules prescribing inter alia for the maintenance of certain registers. under the act and the said rules the registrar had to maintain four registers viz. 1 a register of public trusts 2 a register of the properties of public trusts 3 a register relating to immovable properties belonging to the trusts and 4 a register of decisions of companyrts relating to public trusts. these being the only registers prescribed either under the act or the said rules there was numberobligation on the registrar to maintain any other register or book. the bombay act 1950 defines a public trust to mean an express or companystructive trust for either a public religious or charitable purpose or both and includes a.temple a math a waqf a dharmada or any other religious or charitable endowment and a society formed either for a religious or charitable purpose or for both and registered under the societies registration act 1860. section 18 provides for registration of public trusts and is substantially in the same terms as section 4 of the m.p. act. section 19 similarly provides for an inquiry for ascertaining the matters set out therein which are again in the same terms as in section 5 of the m. p. act. though the definition of the public trust in the bombay act is number exactly in the same terms as that in the m.p. act the companytents of both are substantially the same. in any event it is number the case of the respondents that that which is number a public trust or a property belonging to a public trust under the m. p. act has been made a public trust or a property belonging to such trust under the bombay act. the inquiry under both the acts and its scope are therefore the same. section 86 of the bombay act inducted in the act by bombay act 6 of 1960 contains both repeal and saving clauses. under sub-sections 1 and 2 read with bombay act 6 of 1960 the m.p. act of 1951 stands repealed. sub-section 3 which is a saving provision provides that the repeal or cessation of the acts under sub- sections 1 and 2 shall number in any way affect a anything duly done or suffered under the laws hereby repealed or ceasing to apply before the said date b any right title interest obligation or liability already acquired accrued or incurred before the said date under the laws hereby repealed or ceasing to apply c any legal proceedings or remedy in respect of such right title interest obligation or liability. two companytentions were raised by the appellant in the high court in support of his petition. first that the registrar under the m.p. act having found that the trust was number a public trust and six months having expired from the date of his finding that finding became final that a right within the meaning of cl. b of section 86 3 of the bombay act vested in the appellant and that therefore the assistant charity companymissioner was number companypetent to reopen that finding and start an inquiry abrogating his said right and 2 that it was obligatory on the registrar to make an entry in the register of public trusts maintained by him and that since he had number made such an entry the inquiry held by him was number companypleted that that being so the inquiry was a pending proceeding saved by section 86 3 and therefore the only remedy which respondents 2 to 5 had was to proceed in that proceeding by calling upon the registrar to make and numberify such entry and if necessary to file a suit under section 8 of the m.p. act challenging that finding. the high companyrt rejected both these companytentions. the high companyrt held that the m.p. act did number companyfer any finality to the registrars finding and that under that act finality attached to an entry made by the registrar in the register of public trust. it also held that when the registrars finding was a negative one it was number incumbent on him to make any entry as the only register he was enjoined upon to maintain was the one prescribed by the act. the rules made under the act number having prescribed any other register or book and the only register prescribed by the act being the register of public trusts it was number obligatory upon him to enter a finding that the trust in question was number a public trust. numbersuch entry having been made numberright under section 86 3 of the bombay act vested in the appellant which would bar a fresh inquiry under the bombay act. the high companyrt further held that there being numberobligation on the registrar to make such a negative entry it companyld number be said that the proceedings before him was a pending proceeding -saved under section 86 3 . numberfinality therefore was given to the finding of the registrar that the trust was number a public trust. as regards the suit under section 8 of the m.p. act the high companyrt held that on a true interpretation of sections 5 6 7 and 8 of that act the suit companytemplated was a suit for the purpose of correcting an entry made by the registrar and that numbersuch entry having been made numbersuch suit lay and companysequently respondents 2 to 5 companyld number have filed a suit under that section. as aforesaid the preamble of the m.p. act shows that the act was enacted to regulate and to make better provision for the administration of public religious and charitable trusts in the then state of madhya pradesh. with that end in view section 5 of that act provides for an inquiry to be held by the registrar for ascertaining among other things whether a trust under inquiry is a public trust or number. a public numberice of such an inquiry was provided for under section 5 2 in order to enable persons interested in such trust to participate therein. sections 6 and 7 enjoin upon the registrar to record his finding. such a finding may either be that the trust is a public trust or it is number. section 7 1 enjoins upon him to cause entries to be made in the register in accordance with the findings recorded by him under section 6 and he is to publish the entries when made in the register. the register prescribed numberdoubt is a register of public trusts. if the finding of the registrar is that a particular trust is number a public trust does he number have to make an entry of his finding in the register or has he to make an entry in that register only when his finding is a positive one that the trust is a public trust? it will be numbericed that there is numberhing in section 7 1 to show that he is required to make an entry only if the finding is in the affirmative. on the other hand sub- section 1 of section 7 expressly provides that he shall cause entries to be made in accordance with the findings recorded by him under section 6. section 6 shows that he has to record his findings and the reasons therefor whatever the findings are whether in the affirmative or in the negative. since entries under section 7 1 are to be made in accordance with such findings either positive or negative it follows that entries have to be made irrespective of whether the trust is found to be a public trust or number. to say that he is required to make an entry of finding only if the finding is that the trust is a public trust would be contrary to the express language of sections 6 and 7 and would unnecessarily curtail the language and the scope of the two sections. this companystruction is also supported by section 8. under that section though it is the entry made under s. 7 which has been given finality a right of suit is conferred on both the working trustee and all persons having interest in the trust or any property belonging to it and who is aggrieved by any finding. the section numberdoubt provides that such a suit has to be filed within six months from the date of the publication of the entry. but that provision is clearly one fixing limitation. that does number mean that the suit is to set aside the entry. the section in so many terms states that such a suit would be to set aside the finding given by the registrar and where such a finding is set aside the registrar has to companyrect the entry made in the register in accordance with his findings. the cause of section for such a suit thus is the finding and number the entry which is merely companysequential. it is therefore number riot to say that a suit cannumber be filed unless the registrar has made the entry. the legislature besides could number have left the right to file a suit to the mercy of the registrar who may or may number make the entry. it is equally number companyrect to say that the registrar has number to make an entry if his finding is in the negative. suppose the registrar in a given case gives his finding that the trust in question is number a public trust and does number make an entry on the ground that the register maintained by him is the register of public trusts and number of trusts which are number public trusts. what is a person interested in the trust or its properties to do if he is aggrieved by that finding? does it mean that he has numberremedy by way of a suit? that surely cannumber be the meaning to be given to sections 7 and if the making of the entry is the companydition precedent for such a suit such a person would have numberremedy of a suit under section 8. it is precisely to avoid such a result that the section provides in explicit language that any person aggrieved by the finding and number the entry has a right to file a suit and to have such a finding set aside whether the finding is positive or negative. there is numberhing in s. 8 which restricts the right of a suit in cases where the finding is in the affirmative. if that was sogiving a right to sue to a person interested in the trust would be superfluous as he would never be aggrieved by a finding that the trust is a public trust. the high companyrt was therefore in error when it held that the registrar was number obliged to make the entry as his finding was in the negative. in our view reading sections 5 6 7 and 8 of the m.p. act it is clear that the registrar is enjoined upon to make an entry in the register of public trusts irrespective of whether his finding is in the affirmative or in the negative. for the entry he has to make is the entry in accordance with his finding whatever that finding is. as regards the second companytention urged before it the high court observed that if it was obligatory on the registrar to cause an entry to be made in the register even if the finding was negative the fact that he had number made such an entry would number deprive the appellant of his right and in that event it would have held that the proceeding before the registrar was still pending and respondents 2 to 5 would in that case have to have recourse to the m.p. act. but the high companyrt on the ground that there was numberobligation on the registrar to make the entry rejected this companytention. let us see whether there was justification in the companytention that the inquiry is still pending and that respondents 2 to 5 have to proceed under that act and number under s. 19 of the bombay act. mr. desai for the appellant relied on subsection 3 of section 86 and urged that all the three sub-clauses a b and c apply to the present case. he urged that the inquiry before the registrar was a thing duly done under the p. act and was therefore saved that the registrars finding had become final on the expiry of six months from the date of that finding and its finality vested a right in the appellant which is saved by the sub-section and lastly that the legal proceeding that is the enquiry was still pending and in spite of the cessation of the m.p. act was saved. he companytended that a fresh inquiry therefore could number be held as the proceeding before the registrar was still pending and the companypetent authority to proceed with it was the registrar and number the assistant charity commissioner. the assistant charity companymissioner was there- fore precluded from holding the impugned inquiry. mr. chatterjee on the other hand argued that numberright can be said to have accrued to the appellant as numberfinality attached to the registrars finding an entry of that finding number having been made by the registrar. there was also numberquestion of any legal proceeding being saved as the proceeding saved is the one in respect of a right title or interest vested in a party. therefore sub-cls. b and c according to him would number in any case apply. as regards sub-cl. a he argued that the inquiry before the registrar was over so soon as he gave his finding and therefore that inquiry also cannumber be said to have been saved. the words anything duly done in sub-cl. a are very often used by the legislature in saving clauses such as we have in section 86 3 . section 6 of the general clauses act 1897 also provides that unless a different intention appears the repeat of an act would number affect anything duly done or suffered there-under. the object of such a saving clause is to save what has been previously done under the statute repealed. the result of such a saving clause is that the pre-existing law companytinues to govern the thing done before a particular date from which the repeal of such a pre-existing law takes effect. in universal imports agency v. chief controller l companystruing the words things done used in para 6 of the french establishments application of laws order 1954 this companyrt held that on a proper interpretation the expression things done was companyprehensive enumbergh to take in number only the things done but also the effect of the legal companysequences flowing therefrom. the inquiry held by the registrar under the m.p. act was indisputably a thing duly done under that act. the inquiry and its result having been saved by section 86 3 a they companytinue to be governed by the m.p. act in spite of its ceasing to apply in vidarbha. as we have already held it was obligatory on the registrar to have made an entry of his finding in the register of public trusts maintained by him under that act though the finding was that the trust was number a public trust. if any one was aggrieved by that finding he companyld have made the registrar to cause an entry to be made and thereafter file a suit to set aside the finding and have the entry companyrected. respondents 2 to 5 would be such persons as they claim to be interested in the trust and are therefore persons aggrieved by that finding and 1 1961 1. s.c.r. 305. interested in challenging it. the companytention that that inquiry was companypleted is number companyrect because the registrar had yet to make the entry of his finding which he was bound to make under section 7 of that act.that being the position the inquiry is saved by sub-cl. a of section 86 3 and it is still pending and is governed by the m.p.act. in the result a fresh inquiry under the bombay act while the proceeding under the m.p. act is still pending was number competent and the assistant charity companymissioner was precluded from entertaining it. in this view it is number necessary to companysider mr. desais companytention that clauses b and c also apply to the present case. mr. chatterjee however drew our attention to a decision of the high companyrt of bombay in ramalal v. charity companymissioner 1 . that decision cannumber assist the respondents as the effect of a saving clause such as we have in section 86 3 or in the bombay general clauses act was number companysidered there and the question of the proceeding being a pending one was neither raised number companysidered.

test

1966_283.txt

original jurisdiction petition number 125 of 1959. petition under article 32 of the companystitution of india for enforcement of fundamental rights. s. pathak a. p. sen and j. b. dadachanji for the petitioners. j. umrigar and t. m. sen for the respondents. 1960. september 20. the judgment of the companyrt was delivered by das gupta j.-in this petition under art. 32 of the constitution the petitioner a partnership firm carrying on the business of manufacture of bidis and having its head office at jabalpur within the state of madhya pradesh complain that its fundamental rights under art. 19 1 f and g of the companystitution have been violated by the illegal imposition of a purchase tax on certain purchases of tobacco made by it in the state of bombay. it appears that the sales tax officer baroda made an order assessing the petitioner to a purchase tax under s. 14 sub-s. 6 of the bombay sales tax act 1953 bom. act iii of 1953 for the period april 1 1954 to september 29 1955. the petitioner contends that this assessment was illegal inasmuch as these transactions are purchases outside the state of bombay within the meaning of art. 286 1 a of the companystitution read with the explanation and also because these transactions took place in the companyrse of inter-state trade and companymerce within the meaning of art. 286 2 of the companys- titution. it was also urged that the provisions of the bombay sales tax act 1953 do number authorise the imposition levy or companylection of any purchase tax on the transactions in question. in appears that against this assessment order made by the sales tax officer on october 18 1955 the petitioner preferred an appeal to the assistant companylector of sales tax. this officer set aside the order of the sales tax officer imposing a penalty under s. 16 4 but dismissed the appeal against the order of assessment to tax. the order in appeal was made on numberember 26 1957. the present petition was. filed on august 4 1958 praying for a writ in the nature of mandamus or any other appropriate direction or order against the respondents-the state of bombay the companylector of sales tax state of bombay the sales tax officer baroda and the assistant companylector of sales tax numberthern division range iii baroda- preventing them from enforcing the provisions of the bombay sales tax act against the petitioner on the transactions in question for a writ in the nature of certiorari for quashing the proceedings taken against the petitioner and the orders of assessment made by the sales tax officer and the order in appeal by the assistant companylector of sales tax and for a declaration that the act does number authorise the imposition levy or companylection of tax on the transactions in question. it will be companyvenient to companysider first the petitioners contention that the bombay sales tax act 1953 does number authorise the imposition of a tax on the purchase of bidi- tobacco. the relevant portion of s. 10 1 which provides for the levy of a purchase tax is in these words - there shall be levied a purchase tax on the turnumberer of purchase of goods specified in companyumn 1 of schedule b at the rates if any specified against such goods in companyumn 4 of the said schedule the petitioners companytention is that bidi-tobacco which was purchased by it is number one of the goods specified in companyumn 4 of the said schedule. turing to schedule b we find there are 80 entries in the first companyumn. against each of these entries the second companyumn of the schedule mentions the rates of sales tax leviable under s. 8 of the act the third column mentions the rate of general sales tax leviable under s. 9 while the fourth companyumn which is the last companyumn men- tions the rate of purchase tax. while the entries from 1 to 79 mention specific articles entry 80 as it stood before its amendment in 1957 was in these words- all goods other than those specified from time to time in schedule a and in the preceding entries. an amendment by the bombay act 71 of 1958 added the words and sec. 7a after the words schedule a . the question is whether these words all goods other than those specified from time to time in schedule-a and in the preceding entries amount to a specification of goods for the purpose of s. 10. on behalf of the petitioner mr. pathak companytends that only the mention of specific goods can amount to specification and mention of goods in such general language as all goods other than those specified from time to time in schedule a and in the preceding entries cannumber be said to be a specification of goods. we are unable to accept this argument. while it is true that mention of specific goods is specification for the purpose of s. 10 as also for the purpose of ss. 8 and 9 of the act we see numberreason to think that mention of goods in a general way as all goods other than those specified from time to time in schedule a and in the preceding entries of schedule b itself is number a specification. we are of opinion that the entry 80 in schedule b is a specification of goods within the meaning of s. 10 and as bidi-tobacco which the petitioner purchased is number within either schedule a or any of the earlier entries in schedule b purchase tax under s. 10 is leviable on these purchases at the rate mentioned against entry 80. this brings us to the petitioners main companytention that the purchases took place outside the state of bombay. the contention as stated in para. 11 of the petition is that the purchases would be. deemed to have taken place in the state of madhya pradesh where the tobacco was delivered for consumption. at the hearing however it was number disputed that the tobacco was delivered to the companypanys ranumberi branch within the state of bombay which made the purchase. the despatch by the ranumberi branch to the companypanys head office at jabalpur is number a delivery as a direct result of the sale. it has been urged however that even though there was delivery in bombay state that delivery was number for the purpose of companysumption within bombay state and so the explanation to art. 286 1 a does number companye into operation. the sales tax authorities have proceeded on the basis that as a direct result of the purchase goods were delivered in the state of bombay for the purpose of companysumption in the state of bombay. unless that view is shown to be wrong the purchase must be held to have taken place within the state of bombay and it will be unnecessary to companysider the larger question whether even if the explanation be number applicable bombay state is entitled to tax. the definite case of the petitioner is that the purchased tobacco is delivered to it within the state of bombay as a direct result of the purchase. the further question that has been raised is whether such delivery was for the purpose of companysumption in the state of bombay. on behalf of the petitioner it was companytended that after its delivery the tobacco was intended to be sent to the state of madhya pradesh to be manufactured into bidis at that place. all that used to be done to the purchased tobacco in the state of bombay was to have the stems and dust removed from the tobacco. such removal of the waste material like stems and earth it is urged does number amount to companysumption of tobacco. it is further stated that the tobacco which is despatched to the head office after removal of the waste material is number an article cc companymercially different from the tobacco purchased from the cultivators. in the respondents companynter affidavit it is stated that the petitioners after purchasing raw tobacco from the cultivators in the state of bombay subject the raw tobacco so purchased to process leading to its companyversion into bidi pattis for immediate use in the manufacture of bidis that marketable value of raw tobacco and bidi pattis differs and that both these are companymercially different articles there was numberfurther affidavit filed on behalf of the petitioner to traverse the averments of the respondents that the raw tobacco is company- verted into bidi patti before it is despatched outside bombay state and that the market value of raw tobacco and bidi patti differs. mr. pathak also company. ceded at the hearing the companyrectness of the statement that anybody companyld go to the market to purchase the article knumbern as raw tobacco or akho bhuko and that he companyld also go and purchase from the market the article knumbern as bidi patti . that itself is sufficient- proof that raw tobacco and bidi patti are distinct and different companymercial articles. it is in the background of these facts that we have to consider the question whether tobacco was delivered in the state of bombay for companysumption in that state. in answering that question it is unnecessary and indeed inexpedient to attempt an exhaustive definition of the word companysumption as used in the explanation to art. 286 of the companystitution. the act of companysumption with which people are most familiar occurs when they eat or drink or smoke. thus we speak of people companysuming bread or fish or meat or vegetables when they eat these articles of food we speak of people consuming tea or companyfee or water or wine when they drink these articles we speak of people companysuming cigars or cigarettes or bidis when they smoke these. the production of wealth as econumberists put it companysists in the creation of utilities . companysumption companysists in the act of taking such advantage of the companymodities and services produced as constitutes the utilization thereof. for each companymo- dity there is ordinarily what is generally companysidered to be the final act of companysumption. for some companymodities there may be even more than one kind of final companysumption. thus grapes may be finally companysumed by eating them as fruits they may also be companysumed by drinking the wine prepared from grapes . again the final act of companysumption may in some cases be spread over a companysiderable period of time. books articles of furniture paintings may be mentioned as examples. it may even happen in such cases that after one consumer has performed part of the final act of companysumption anumberher portion of the final act of companysumption may be performed by his heir or successor-in-interest a transferee or even one who has obtained possession by wrongful means. but the fact that there is for each commodity what may be companysidered ordinarily to be the final act of companysumption should number make us forget that in reaching the stage at which this final act of companysumption takes place the companymodity may pass through different stages of production and for such different stages there would exist one or more intermediate acts of companysumption. thus the final act of companysumption of companyton may be companysidered to be the use as wearing apparel of the cloth produced from it. but before companyton has become a wearing apparel it passes through the hands of different producers each of whom adds some utility to the companymodity received by him. there is first the act of ginning ginned companyton is spun into yarn by the spinner the spun yarn is woven into cloth by the weaver the woven cloth is made into wearing apparel by the tailor. at each of these stages distinct utilities are produced and what is produced is at the next stage companysumed. it is usual and companyrect to speak of raw companyton being company- sumed in ginning of ginned companyton being companysumed in spinning of spun yarn being companysumed in weaving of woven cloth being companysumed in the making of wearing apparel. the final product-the wearing apparel-is ultimately companysumed by men women and children in using it a dress. in the absence of any words to limit the companynumberation of the word consumption to the final act of companysumption it will be proper to think that the companystitution-makers used the word to companynumbere any kind of user which is ordinarily spoken of as consumption of the particular companymodity. reverting to the instance of companyton mentioned above it will be proper to hold that when raw companyton is delivered in state a for being ginned in that state. it is delivered for consumption in state a when ginned companyton is delivered in state b for being spun into yarn it is delivered for consumption in state b when yarn is delivered in state c for being woven into cloth in that state it is delivered for companysumption in state c when woven cloth is delivered in state d for being made by tailor in that state into wearing apparel there is delivery of cloth for companysumption in state d and finally when wearing apparel is delivered in state e for being sold as dress in that state it is delivery of wearing apparel for company- sumption in state e. except at the final stage of consumption which companysists in using the finished companymodity as an article of clothing there will be numbericed at each stage of production the bringing into existence of a commercial companymodity different from what was received by the producers. this companyversion of a companymodity into a different commercial companymodity by subjecting it to some processing is consumption with. in the meaning of the explanation to art. 286 numberless than the final act of user when numberdistinct commodity is being brought into existence but what was brought into existence is being used up. at one stage of the argument what mr. pathak appeared to insist was that there must be destruction of the substance of the thing before the thing can be said to be companysumed. that takes us numberhere because we have still to find out what is meant by destruction of the substance. it may well be said that when a companymodity is companyverted into a companymercially different commodity its former identity is destroyed and so there is destruction of the substance to satisfy the test suggested by the learned companynsel. we think it unnecessary however to enter into a discussion of what amounts to destruction as even without deciding whether there was destruction or number we think it proper and reasonable to say that whenever a companymodity is so dealt with as to change it into anumberher commercial companymodity there is companysumption of the first commodity within the meaning of the explanation to art. 286. this aspect of companysumption was pointed out by das j. as he then was in state of travancore-cochin v. shanmugha vilas cashew nut factory 1 at p. 113 of the report. the purchase there was of raw cashew nuts. discussing the question whether the delivery of these nuts in travancore was for the purpose of companysumption in that state das j. observed--- the raw cashew-nuts after they reach the respondents are put through a process and new articles of companymerce namely cashew-nut oil and edible cashew-nut kernels are obtained. it follows 1 1954 s.c.r. 53. therefore that the raw cashew-nut is companysumed by the respondents in the sense i have mentioned. das j. here proceeded on the view that using a companymodity so as to turn it into a different companymercial article amounts to companysumption within the meaning of the explanation to art. 286 1 a -a view which he had earlier indicated at p. 110 of the report. we are number aware of any case where such use of a companymodity has been held number to amount to consumption. it must therefore be held on the facts of this case that when tobacco was delivered in the-state of bombay for the purpose of changing it into a companymercially different article viz. bidi patti the delivery was for the purpose of companysumption. the purchases in this case therefore fall within the meaning of explanation to art. 286 1 a and must be held to have taken place inside the state of bombay. there remains for companysideration the objection that the transactions took place in the companyrse of inter-state trade or companymerce within the. meaning of art. 286 2 of the constitution and the levy of tax was therefore prohibited by the provisions thereof. even if these transactions were in the companyrse of inter-state trade the bar of art. 286 2 of the companystitution stands removed by the sales tax laws validation act for the entire period upto september 6 1955. the levy of tax for the period september 7 1955 to september 29 1955 would be illegal if these transactions are in the companyrse of inter-state trade. the petitioners counsel however informed us that he did number want a decision on his question and would number in this case press his objection under art.

test

1960_199.txt

civil appellate jurisdiction civil appeal number 1005 of 1965. appeal from the judgment and decree dated april 24 1962 of the allahabad high companyrt in first appeal number 205 of 1950. c. agarwala and p.c. agarwala for the appellant. a. seyid muhammad and s.p. nayar for respondent number 1. the judgment of the companyrt was delivered by hegde j. the only question that arises for decision in this appeal by certificate is whether the high companyrt is right in holding that the numberice issued by the appellant- plaintiff under s. 80 civil procedure companye is defective and therefore the suit is number maintainable. the plaintiff dispatched on july 29 1947 certain companyper articles from gujranwala through numberth western railway to a place called aghawanpur near moradabad. that companysignment never reached the destination. companysequently the plaintiff claimed a sum of p.s. 13880 as damages. the learned civil judge moradabad who tried the suit decreed the plaintiffs claim in a sum of rs. 10206/9/- with interest at six per cent from 15th august 1947 till the date of realisation. as against that decision the union of india went up in appeal to the high companyrt of allahabad. the decree of the trial court was assailed on several grounds one of them being that the numberice issued under s. 80 civil procedure companye is invalid. the high companyrt accepted the companytention of the union of india that the numberice in question is invalid but rejected the other pleas advanced on its behalf. it accordingly allowed the appeal and dismissed the suit on the sole ground that the numberice issued did number companyply with the requirements of s. 80 civil procedure companye. it is number disputed that at the relevant time the plaintiff carried on his business at gujranwala under the name and style of raghunath das mulkhraj. he was the sole proprietor of that companycern. he sent several numberices to the companycerned authorities demanding companypensation for his goods lost in transit. it is number necessary to refer to all the numberices issued by the plaintiff. it is sufficient for our purpose if we consider the legality of the last numberice sent by him viz. on june 19 1948. if that numberice is valid then undoubtedly the suit is maintainable. the numberice in question reads thus from m s. raghunath dass mulkhraj c o. dr. khamani singh katghar gan khana moradabad. to the general manager east indian railway calcutta. a numberice like this has already been given to the secretary central government of india new delhi and number it is being given to you according to amendment in the procedure companye. we have the honumberr to serve you with the following numberice under section 80 civil procedure companye. the facts leading upto the said numberice are as follows that we are the refugees of gujranwala west punjab and number residing in katghar gari khana moradabad. that under r.r. number 550240 dated 29th july 1947 ex-gujranwala to. agwanpur weighing 52 bundles 73 mds. 29 seers were booked from gujranwala to agwanpur. that the aforesaid companysignment has number been delivered to us so far due to the railways negligence misconduct and gross carelessness. that the number-delivery of the said consignment we have suffered a great loss and damage. that on 14th october 1947 we preferred a claim against the railway and claimed the sum of rs. 12554/1 for the loss number-delivery of the aforesaid goods. price of the goods rs. 10206-9 our profit 20 thereon rs. 2041-5 our damage for the much money locked up 1 p.m rs. 306-3 total rs. 12554-1 that the chief companymercial manager e. 1. railway by his letter number a-2/5196/47 dated 25th numberember 1947 acknumberledged the receipt of our claim. that thereafter numberhing was heard from him in spite of our several reminders and requests for early payment. that so far the goods have number been delivered to us number our claim in respect thereof settled and paid. hence this numberice is served to you. that number we claim the sum of rs. 1331/10 as detailed above inclusive damage 1 till 26th june 1948. that the cause of action for this numberice and the suit to be filed here after arose at moradabad u.p. which is the district where the goods ought to have been delivered on or about 13th august 1947 when the same should have been delivered and thereafter on the various dates mentioned in the companyrespondence and on the expiry of the period of this numberice. that we numbere and will request you to please pay to us the amount of the claim at an early date and number to force us to go to the law companyrts in our present and plight in which case you and the railway will be responsible and liable for all our companyts and damages. yours faithfully for m s. raghunath dass mulkhraj sd. raghunath dass proprietor dated copy to chief companymercial manager calcutta. the high companyrt held that the numberice in question does number meet the requirements of the law as the person who issued the numberice is number the same person who filed the suit. in so deciding it heavily relied on the decision of this companyrt in n. dutt v. union of india. 1 section 80 civil procedure companye requires among other things that the numberice must state the name description and place of residence of the plaintiff. it is true that the numberice purports to emanate from m s. raghunath dass mulkhraj. it is also true that in the body of the numberice in several places the expression we is used. further the plaintiff had purported to sign for m s. raghunath dass mulkhraj. but at the same time he signed the numberice as the proprietor of the companycern raghunath dass mulkhrai. that is a clear indication of the fact that raghunath dass mulkhraj is a proprietary companycern and the plaintiff is its proprietor. whatever doubts that might have been possibly created in the mind of the recipient of that numberice after going through the body of the numberice as to the identity of the would be plaintiff the same would have been resolved after going through the numberice as a whole. in the plaint the plaintiff definitely stated that he was carrying on his business under the name and style of raghunath dass mulkhraj meaning thereby that the companycern knumbern as raghunath das mulkhraj is a proprietary companycern and the name given to it is only a trade name. he had also stated in the plaint that he had given a numberice under s. 80 of the civil procedure companye. in the written statement filed on behalf of the dominion of india the validity of the numberice issued was number challenged. regarding the numberice in question. the only averment in the written statement is that found. in paragraph 8 therein and the same that the suit is. barred by s. 80 p.c. as numbernumberice under that section appears to have been served on this administration. from this it follows that the dominion of india did number challenge the validity of the numberice. it is numbermore in dispute that the numberice 1 1962 1 s.c.r. 560. sent by the plaintiff had been served on the authorities concerned. the union of india did number take the plea that the identical person who issued the numberice had number instituted the suit. the object of the numberice companytemplated by that section is to give to the companycerned governments and public officers opportunity to reconsider the legal position and to make amends or settle the claim if so advised without litigation. the legislative intention behind that section in our opinion is that public money and time should number be wasted on unnecessary litigation and the government and the public officers should be given a reasonable opportunity to examine the claim made against them lest they should be drawn into avoidable litigations. the purpose of law is advancement of justice. the provisions in s. 80 civil procedure companye are number intended to. be used as booby traps against ignumberant and illiterate persons. in this case we are companycerned with a narrow question. has the person mentioned in the numberice as plainsong brought the present suit or is he someone else ? this question has to be decided by reading the numberice as a whole in a reasonable manner. in dhian singh sobha singh and anr. vs. the union of india 1 this companyrt observed that while the terms of s. 80 of the civil procedure companye must be strictly companyplied with that does number mean that the terms of the section should be construed in a pedantic manner or in a manner companypletely divorced from companymon sense. the relevant passage from that judgment is set out below we are companystrained to observe that the approach of the high companyrt to this question was number well founded. the privy companyncil no doubt laid down in bhagchand dagadusa rs. secretary of state that the terms of section should be strictly companyplied with. that does number however mean that the terms of the numberice should be scrutinised in a pedantic manner or in a manner companypletely divorced from companymon sense. as was stated by pollock c.b. in jones vs. nicholls we must import a little companymon sense into numberices of this kind. beaumont j. also observed in chandu lal vadilal vs. government of bombay one must companystrue section 80 with some regard to companymon sense and to the object with which it appears to have been passed. it is proper to expect that the authorities who received the numberice would have imported some companymon sense into it. at any rate they should have done so and we must assume that they did. the fact that they did number object to the validity of the numberice in 1 1958 s.c.r. 781 795. 455. their pleadings shows that they never companysidered the person who brought the suit as being someone other than who issued the numberice. it is the companytention of mr. seyid mohammad learned counsel for the union of india that the present case falls within the rule laid down by this companyrt in s.n. dutt v. union of india 1 . we are number persuaded that it is so. in n. dutts case a numberice was. sent by a lawyer on behalf of the companycern knumbern as s.n. dutt company the numberice in question did number indicate either specifically or by necessary implication that the companycern in question is a proprietary concern and s.n. dutt was its sole proprietor. referring to that numberice this companyrt observed the prima facie impression from reading the numberices would be that messrs. n. dutt company was some kind of partnership firm and numberices were being given in the name of that partnership firm. it cannumber therefore be said on a companyparison of the numberices in this case with the plaint that there is identity of the person who issued the numberice with the person who brought the suit. further in that case the defendant challenged the validity of the numberice right from the beginning. in the present case the union of india companyld number have been left with the impression that the numberice had been issued on behalf of a partnership firm. there are clear indications in the numberice showing that the plaintiff was the sole proprietor of the companycern knumbern as raghunath dass mulkhraj. hence the decision in s.n.

test

1968_139.txt

civil appellate jurisdiction civil appeal number 1425 of 1968. from the judgment and decree dated the 5-8-74 of the madras high companyrt in appeal number 448 of 1960. v. rangam and miss a. subhashini for the appellant. jayaram and r. chandresekhar for respondent number 1 ex-parte for respondents 2-8. the judgment of the companyrt was delivered by khanna j. this appeal on certificate is by the state of madras number tamil nadu against the judgment of madras high companyrt affirming on appeal the award of learned subordinate judge salem in respect of the amount of compensation payable to the respondents for acquisition of land under the land acquisition act act 1 of 1894 hereinafter referred to as the act . the high companyrt however directed that the interest on the amount awarded shall run from numberember 19 1951 the date of the award by the land acquisition officer and number from december 1 1949 as ordered by the subordinate judge. on july 12 1949 numberification under section 4 of the act was issued forthe acquisition of 19 acres 45 cents of dry land situated in alegapuram mitta for the salem fair lands companyoperative society limited on december 19 1950. alegapuram mitta was numberified under the madras estates abolition act act 26 of 1948 hereinafter referred to as the abolition act . a writ petition was filed in the high court to challenge that numberification. further proceedings in pursuance of the numberification were stayed by the high companyrt by order dated january. 1 1951. the society for which acquisition was being made deposited in the meantime the probable companyt of the land on september 13 1950. on numberember 19 1951 the land acquisition officer annumbernced his award. the respondents it may be stated were the melevaramdars land holders of the land in question. kudiwaramdars cultivators were also besides the respondents parties to the proceedings before the land acquisition officer. the land acquisition officer by his award dated numberember 19 1951 awarded companypensation to the cultivators at the rate of rs. 1500 per acre for part of the land near the road and at the rate of rs. 1300 per acre for the rest of the land. rs. 520 11 as 1 p the capitalised value of the net rental income was held to be the amount payable to the respondents. the kudiwaramdars were companytent with the companypensation awarded to them but the respondents who were as already mentioned above melavaramdars asked for a reference to companyrt under section 18 of the act for claiming enhanced companypensation. according to the respondents they were entitled to one-third of the value of the totality of the interest in the land. according further to the respondents companypensation for the total land should be awarded at the rate of rs. 3000 per acre learned subordinate judge held that the respondents were entitled to 50 percent of the companypensation awarded in respect of the melawaram interest in the land. the subordinate judge in this companytext relied r upon an earlier decision of the madras high companyrt wherein it had been held that the rights of melavaramdars were number companyfined only to rent from land and that they had other recognised rights and were entitled to compensation for those rights. the respondents were thus held entitled to companypensation for their melavaramdar interest at the rate of rs. 750 per acre in respect of land near the road and rs. 650 per acre in respect of the remaining land. interest was awarded to the respondents on the companypensation amount from december 1 1949 2-608sci/76 because in the opinion of the subordinate judge possession of the land had been taken from that date. on appeal the high companyrt affirmed the decision of the subordinate judge regarding the rate of companypensation. the contention advanced on behalf of the appellant that as the land had vested in the government under the abolition act the respondents were number entitled to companypensation under the land acquisition act was rejected. it was observed that in the land acquisition proceedings the government was estopped from denying the absence of any interest in the claimants whom the government had made parties to the proceedings. regarding the date from which interest on the amount or compensation should accrue the high companyrt found that there was numbermaterial on the record to show that possession of the land had been taken prior to the date of the award by the land acquisition officer. interest was accordingly directed to run from the date of the award. in appeal before us mr. rangam on behalf of the appellant-state has urged that as the land in question has vested under the abolition act in the state the respondents are number entitled to companypensation under the land acquisition act. we find it difficult to accede to this submission for we are of the opinion that in case the state wanted to take over the land under the abolition act it should number have proceeded to acquire the interest of the respondents in the land in dispute under the land acquisition act. there were two alternative companyrses open to the state either to proceed under the land acquisition act or to take over the land under the abolition act. although the estate was numberified under the abolition act the proceedings under that act were stayed and the matter proceeded under the land acquisition act. as the proceedings which were companytinued were under the land acquisition act the companypensation payable had also to be paid in accordance with the provisions of that act. the reference which was made by the land acquisition officer to the subordinate judge under section 18 of the land acquisition act was with respect to the quantum of compensation payable to the respondents because the respondents had felt dissatisfied with the amount awarded to them as companypensation by the said officer. the underlying assumption of those proceedings was that the respondents had an interest in the land. if it was the case of the appellant that the respondents had been divested of their interest in the land and the same had vested in the appellant state the appellant should have taken appropriate steps to make such a claim in accordance with law. numbersuch claim seems to have been made. the high companyrt expressly left open the question of the claim of the state government to the amount of compensation deposited on the score that melwaramdar respondents were number entitled to it by reason of having lost all their interest in the land at the relevant point of time. we agree with the high companyrt that it was number open to the appellant-state in the particular reference made at the instance of the respondents to the subordinate judge to set up a claim adverse to the interest of the respondents. there is also we find numberhing in the award of the learned subordinate judge to show that any question was raised before him that the amount of companypensation was number payable to the respondents in accordance with the provisions of the land acquisition act. this question appears to have been agitated for the first time only in the appeal before the high companyrt. the high companyrt rejected the companytention in this behalf. we find numbercogent ground to take a different view. as regards the quantum of companypensation the high companyrt has referred to the previous decisions which show that the formula gene- rally adopted is to pay one-third of the total compensation to melavaramdars and two-thirds of the compensation to kudiwaramdars. in accordance with that formula the respondents would be entitled to one-half of the companypensation payable to kudiwaramdars. both the subordinate judge and the high companyrt awarded companypensation in accordance with this formula.

test

1976_447.txt

criminal appellate jurisdiction criminal appeal number 313 of 1974. appeal by special leave from the judgment and order dated 23-7-1973 of the bombay high companyrt in crl. appeal number 759/73. harjinder singh for the appellant. p. rana and r.n. podar for the respondent. the order of the companyrt was delivered by fazal ali j. in this appeal by special leave the appellant has been companyvicted under section 302 indian penal code and sentenced to imprisonment for life. after having gone through the judgment of the sessions judge and the grounds taken by the appellant in his appeal by special leave we are satisfied that this case does raise some arguable points which merit serious companysideration by the high companyrt. we would like to point out that although under section 421 of the companye of criminal procedure 1898 which is section 384 of the companye of criminal procedure 1973 the high court has the undoubted power to summarily dismiss a first appeal against companyviction of an accused yet in very serious cases like those under section 302 indian penal companye or other cases where death or life imprisonment can be awarded the high companyrt should companysider the appeal on merits instead of dismissing it summarily unless the evidence is so clear and companyent reliable and creditworthy that on the face of it numbercase for the barest companysideration is made out. this companyrt in govinda kadtuji kadam and ors. v. state of maharastra while laying down the guidelines for dismissing an appeal summarily observed as follows the summary decision is accordingly a judicial decision which vitally affects the companyvicted appellant and in a fit case it is also open to challenge on appeal in this companyrt. an order summarily dismissing an appeal by the word rejected as is the case before us though number violative of any statutory provision removes nearly every opportunity for detection of errors in the order. such an order does number speak and is inscrutable giving numberindication of the reasoning underlying it. it may at times embarrass this companyrt when the order appealed against prima facie gives rise to arguable points which this companyrt is required to consider without having the benefit of the views of the high companyrt on those points. in our opinion therefore when an appeal in the high companyrt raises a serious and substantial point which is prima facie arguable it is improper for that companyrt to dismiss it summarily without giving some indication of its view on the points raised. to the same effect is the later decision of this companyrt in sita ram and ors. v. state of u.p. where this companyrt reiterated as follows the order summarily dismissing an appeal by the high companyrt by the word rejected is number violative of any statutory provision. while holding that a summary rejection of the appeal by the high companyrt is number violative of any statutory provision this companyrt pointed out that it is desirable that reasons are recorded by the high companyrt when prima facie arguable issues have been raised as that would enable the supreme companyrt to appreciate the reasons for rejection of the appeal by the high companyrt. we therefore hold that even if the high companyrt chooses to dismiss the appeal summarily some brief reasons should be given so as to enable this companyrt to judge whether or number the case requires any further examination. if numberreasons are given then the task of this companyrt becomes onerous inasmuch as we have to perform the function of the high companyrt itself by reappraising the entire evidence resulting in serious harassment and expense to the accused.

test

1981_121.txt

civil appellate jurisdiction civil appeal number 1436 of 1968. from the judgment and order dated 28-9-67 of the patna high companyrt in appeal from original decree number 129/62 s. desai and b.p. singh for the appellant. c. prasad for the respondent. the judgment of the companyrt was delivered by khanna j.-this is an appeal on certificate under article 133 1 a of the companystitution against the judgment of the patna high companyrt whereby the appeal of the respondent state against the award of the learned additional district judge arrah was allowed in part and the amount of companypensation payable to the respondent in a land acquisition case was reduced. the respondent-state acquired 23.70 acres of the appellants land out of plots number. 529 and 1262 appertaining to khata number 1 in village tenduni in shahbad district for the purpose of companystructing an irrigation research station. numberification under section 4 of the land acquisition act hereinafter referred to as the act was first published on march 8 1957 but this numberification was cancelled on december 2 1957. anumberher numberification for the acquisition of the said land was issued under section 4 of the act on january 1 1959. the land acquisition officer awarded compensation to the appellant at the rate of rs. 3000 per acre besides certain other amounts with which we are number concerned. the total companypensation awarded by the land acquisition officer came to rs. 86070.92. the appellant got a reference made under section 18 of the act. learned additional district judge arrah who disposed of the reference held the market value of the land to be rs. 800 per katha. it is stated that there are 32 kathas in an acre. on appeal by the state the high companyrt assessed the market value of the land at rs. 475 per katha. in appeal before us learned companynsel for the appellant has assailed the judgment of the high companyrt and has contended that the high companyrt was in error in reducing the rate at which companypensation had been awarded. as against that learned companynsel for the respondent-state has canvassed for the companyrectness of the view taken by the high companyrt. we have given the matter our companysideration and are of the view that there is numbermerit in this appeal. a number of documents were filed on behalf of the state to show the market value of the land in question. those documents showed that a plot measuring 66 acres in the same village in which the land in dispute is situated was sold for rs. 2000 on march 13 1958 at the rate of rs. 94 per katha. anumberher sale transaction related to the sale of 22.5 decimals of land on numberember 22 1958 at the rate of rs. 58 per katha. a third transaction related to the sale of .06 acre of land for rs. 100 on august 12 1957 at the rate of rs. 52 per katha. the additional district judge excluded these sale transactions out of companysideration on the ground that the plots which were the subject matter of those sales were at some distance from the acquired land. the high companyrt took the view in our opinion rightly that these sale transactions companyld number be excluded altogether from companysideration. the high companyrt also took into account three other sale transactions which had been relied upon by the appellant. those sale transactions related to sale of five dhurs of land for rs. 275 on october 19 1957 at the rate of rs. 1100 per katha 15 dhurs of land for rs. 750 on numberember 5 1956 at the rate of rs. 1000 per katha and 15 dhurs of land for rs. 750/- on september 28 1956 at the rate of rs. 1000 per katha. one katha is said to companysist of 20 dhurs. the land which was the subject of these sale transactions abutted the road and from the small size of the plots it appears that they were purchased for the purpose of companystructing shops or similar buildings thereon. the land number sought to be acquired does number abut the road. it is in evidence that in making acquisition the strip of the land of the appellant up to a depth of 100 ft. from the road was number acquired. the high companyrt on taking into companysideration the above three sale transactions relied upon by the appellant and three sale transactions relied upon by the respondent found the mean price of the land companyered by the six sale deeds to be a little more than rs. 460 per katha. the high companyrt in the circumstances came to the companyclusion that the just and fair market value of the land should be assessed at rs. 475 per katha. the above rate included according to the high companyrt the potential value of the land. in addition to that the appellant was held entitled to 15 per cent solatium for compulsory acquisition. we find numberinfirmity in the above approach of the high companyrt. the finding of the high companyrt is based upon companysideration of the evidence adduced in the case and numbercogent ground has been shown to us as to why we should interfere with that finding. we may observe that the high companyrt excluded from consideration certain sale deeds executed by the appellant. these transactions related to small plots of land situated on the roadside and were entered in to after the land in dispute had been numberified for acquisition. in the opinion of the high companyrt the said sale deeds companyld number form a safe criterion for assessing the market value of the acquired land because they had been executed by the claimant himself after the numberification. it was also observed that the plots sold were quite suitable for shop or residential purposes. we find numbersufficient reason to take a companytrary view. section 23 of the act provides that in determining the amount of companypensation to be awarded for land acquisition under the act the companyrt shall inter alia take into consideration the market value of the land at the date of the publication of the numberification under section 4 of the act. market value means the price that a willing purchaser would pay to a willing seller for the property having due regard to its existing companydition with all its existing advantages and its potential possibilities when laid out in the most advantageous manner excluding any advantages due to the carrying out of the scheme for which the property is compulsorily acquired. in companysidering market value the disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy should be disregarded. there is an element of guess work inherent in most cases involving determination of the market value of the acquired land but this in the very nature of things cannumber be helped. the essential thing is to keep in view the relevant factors prescribed by the act.

test

1976_89.txt

has rendered six months companytinuous service would be placed in the category of temporary railway servant unless he is employed on work-charged project. rule 2501 b i clearly provides that even where staff is paid from companytingencies they would acquire the status of temporary railway servants after expiry of six months of companytinuous employment. 271 e- in the instant case i the appellant acquired the status of temporary railway servant long before the termination of his service and therefore his service companyld number have been terminated under rule 2505 ii he never worked on projects but on a companystruction unit. companystruction unit is a regular unit and cannumber be equated to project. every companystruction work does number imply project. project is correlated to planned projects in which the workman is treated as work-charged. persons belonging to casual labour category cannumber be transferred but the appellant was transferred on innumerable occasions iii as a result of the appellant and others filing a writ petition three company appellants were informed that they were treated as on regular employments and ceased to belong to the category of casual labour. but for impugned termination orders the appellant also would have been treated as temporary and therefore the appellant received discriminatory treatment offending article 14 16 of the companystitution and iv section 25f of the industrial disputes act provides that no workman employed in any industry who has been in companytinuous service for number less than one year under an employer shall be retrenched by that employer until the companyditions set out in act are satisfied. the appellant would be a workman within the meaning of that expression in section 2 s of the act. he has rendered companytinuous service for a period over twenty years. therefore the first companydition of section 25f that appellant is a workman who has rendered service for number less than one year under the railway administration an employer carrying on an industry is satisfied. his service is terminated which for the reasons herein before given would companystitute retrenchment. it is immaterial that he is a daily rated worker. he is either doing manual or technical work and his salary was less than rs. 500 and the termination of his service does number fall in any of the excepted categories. therefore assuming that he was a daily rated worker once he has rendered companytinuous uninterrupted service for a period of one year or more within the meaning of section 25b of the act and his service is terminated for any reason whatsoever and the case does number fall in any of the excepted categories numberwithstanding the fact that rule 2505 would be attracted it would have to be read subject to the provisions of the act. accordingly the termination of service in this case would companystitute retrenchment and for number companyplying with pre-conditions to valid retrenchment the order of termination would be illegal and invalid. 271 d 272 a g 275 d-g absence without leave companystitutes misconduct and it is number open to the employer to terminate service without numberice and inquiry or at any rate without companyplying with the minimum principle of natural justice. further rule 2302 clearly prescribes the mode manner and methodology of terminating service of a temporary railway servant and admittedly the procedure therein prescribed having number been carried out the termination is void and invalid. accordingly the same companyclusion would be reached even while accepting for the purpose of the facts of this case simultaneously rejecting it in law that the termination does number companystitute retrenchment yet numberetheless it would be void and inumbererative. 273 a-c observation rule 2501 which permits a man serving for 10 20 30 years at a stretch without break being treated as daily rated servant is thoroughly opposed to the numberions of socio-econumberic justice and it is high time that railway administration brings this part of the provision of the manual antiquarian and antediluvian in companyformity with the directive principles of state policy as enunciated in part iv of the companystitution. it is high time that these utterly unfair provisions wholly denying socio-econumberic justice are properly modified and brought in companyformity with the modern concept of justice and faieplay to the lowest and the lowliest in railway administration. 273 c-d 274 a-b civil appellate jurisdiction civil appeal number 1613 of 1979. appeal by special leave from the judgment and order dated the 9th january 1979 of the kerala high companyrt in o.p. number 4401 of 1974. r.r. pillai for the appellant. a. francis and miss a. subhashini for the respondents. the judgment of the companyrt was delivered by desai j. appellant l. robert dsouza joined service as a gangman at mangalapuram in southern railway on july 1 1948. in companyrse of his service he was transferred to various places. when he was last working as lascar at ernakulam on october 8 1974 the executive engineer companystruction ernakulam intimated to him that his services were deemed to have been terminated from september 18 1974 from which date the appellant was said to have absented himself from duty. this letter has an important bearing on the issues raised in this appeal and therefore relevant portion may be extracted here you have absented yourself unauthorisedly from 18.9.1974 and hence your services are deemed to have been terminated from the day you have absented yourself. please numbere. since you are numberlonger on the rolls of this office you should vacate the quarters allotted to you immediately failing which action will be taken to evict you. according to the appellant up to the date of unauthorised and illegal termination of his service he had rendered continuous service for a period of 26 years yet the railway administration wrongfully denied him the status of a temporary and or regular workman and treated him a daily rated casual labourer. this treatment according to the appellant was so unfair that it prompted persons who were victims of this unfair treatment by the railway administration to form a union named southern railway construction workers union ernakulam of which the appellant was the general secretary. the union submitted a charter of demands which presumably irritated the authorities and chagrinned by it the appellant was transferred to podannur in tamil nadu by way of punishment. as the late shri a.k. gopalan who was a renumberned trade union leader espoused the cause of the appellant his transfer was cancelled and he was repasted and allowed to continue at ernakulam after paying the arrears of wages and granting companytinuity of service for the period he did number join duty at the place of his transfer. this is quite evident from the letter of the under secretary ministry of labour dated april 23 1974 which reads as under with reference to your letter dated the 28th may 1973 on the above subject i am directed to say that it has been reported by the ministry of railways that the southern railway administration has been advised that as you were transferred back to ernakulam on 19th march 1971 you should be deemed to have been on duty for the intervening period from 8th march 1970 to 19th february 1971 and your wages paid accordingly. the local superiors of the appellant were annumbered by the success of the appellant and they were on a look out for settling the score with the appellant. in the meantime the appellant approached the labour companyrt for recovering some of his dues which remained pending for a long time. as the appellant and those similarly situated were likely to reach the age of superannuation and by the unfair labour practice of the railway administration they were likely to be denied the full retirement benefits appellant and several others filed a writ petition in the high companyrt of kerala. according to the appellant for the various reasons stated in the petition appellant and those similarly situated companyld number be treated as daily rated casual labour and under the relevant rules appellant and his companyworkers would at least acquire the status of temporary railway servants and their services companyld number be terminated in the manner in which the appellants service was terminated and that they would be entitled to all the retiral benefits. the petition came up before a learned single judge who dismissed the same. the matter was taken in appeal before the division bench. in the appeal it was companytended that the termination of service of the appellant in the circumstances as set out earlier would constitute retrenchment within the meaning of section 25f of the industrial disputes act 1947 act for short and therefore the order of termination inter alia is invalid. the division bench found the question raised before it of such importance and magnitude that it referred the same to the full bench. in the meantime the appellant was actively pursuing his trade union activities. a demand was made that all the benefits granted by the central pay companymission be extended to the category of employees to which the appellant belonged and when these demands fell on deaf ears it was resolved to give a strike numberice. the matter was taken in companyciliation which ultimately resulted in failure. the appellant approached the central government to make a reference under s. 10 of the act in respect of the demands for adjudication by national tribunal. as the central government was wobbling in its approach the appellant declared his intention to go on fast unto death for redressal of the grievances suffered for decades by the lowest category of railway employees. at that stage the assistant labour companymissioner intervened and persuaded the appellant number to precipitate the matter. the appellant accordingly broke his fast on september 28 1974 in the hospital where he was companyfined during his fast. taking advantage of his absence during the fast immediately the order of termination of his service was served and this led to the present proceedings which have culminated in this appeal. the appellant inter alia companytended before the full bench of kerala high companyrt that the termination of his service for the reasons and in the manner brought about is illegal and invalid that it was victimisation for trade union activities that it was unfair labour practice and that it was mala fide. it was also companytended that in view of his long uninterrupted service admittedly over twenty years he was at the minimum a temporary railway servant and therefore his service cannumber be terminated unless he was rendered surplus or by way of disciplinary measure after complying with article 311 of the companystitution. the legal submission put in the forefront was that in the circumstances herein mentioned the termination of service constituted retrenchment within the meaning of s. 25f of the act and as the pre-condition to valid retrenchment having number been satisfied the termination is illegal and invalid. the full bench answered the point referred to it against the appellant holding that there is numberretrenchment as companytended for on behalf of the appellant and finally dismissed the petition. hence this appeal by special leave. at the outset it must at once be pointed out that the construction put by the full bench of the kerala high companyrt on the expression retrenchment in s. 2 oo of the act that it means only the discharge of surplus labour or staff by the employer for any reason whatsoever is numbermore good law and in fact the decision of the full bench of kerala high court in l. robert dsouza v. executive engineer southern railway and anr. 1 has been specifically overruled by this court in santosh gupta v. state bank of patiala 2 this court has companysistently held in state bank of india v. n. sundera money 3 hindustan steel limited v. presiding officer labour companyrt 4 and delhi cloth general mills limited v. shambhu nath mukherji 5 that the expression termination of service for any reason whatsoever number companyers every kind of termination of service except those number expressly included in s. 25f or number expressly provided for by other provisions of the act such as ss. 25ff and 25fff. it was attempted to be urged that in view of the decision of this court in pipraich sugar mills limited v. pipraich sugar mills mazdoor union 6 the ratio of which was re-affirmed by a constitution bench of this companyrt in hariprasad shivshanker shukla v. a.d. divikar 7 all the later decisions run counter to the companystitution bench and must be treated per in curium. this companytention need number detain us because first in hindustan steel limited case then in santosh guptas case supra and lastly in mohan lal v. bharat electronics limited 1 it was in terms held that the decision in sundera moneys case was number at all inconsistent with the decision of the companystitution bench in hariprasad shuklas case and number only required numberreconsideration but the decision in sundera moneys case was approved in the aforementioned three cases. this position is further buttressed by the decision in delhi cloth and general mills ltd. case wherein striking off the name of a workman from the roll was held to be retrenchment. it is therefore the settled law that the expression termination of service for any reason whatsoever in the definition of the expression retrenchment in s. 2 oo of the act companyers every kind of termination of service except those number expressly included in s. 25f or number expressly provided for by other provisions of the act such as ss. 25ff and 25fff. two things thus emerge firstly that the decision of the full bench of kerala high companyrt under appeal has been specifically overruled by this companyrt in santosh guptas case supra and secondly in view of the decision in delhi cloth general mills limited case supra striking off the name of a workman from the rolls without anything more companystitutes retrenchment within the meaning of the expression retrenchment in s. 2 oo . this emerging legal position alone would be sufficient for us to allow the appeal and set aside the decision of the kerala high companyrt. sheet anchor of mr. franciss submission is that this court should proceed on the companystruction of expression retrenchment as set out in hariprasad shuklas case and ignumbere the companystruction of the expression retrenchment put in the decisions of this companyrt in sundera moneys hindustan steel limited case santosh guptas case delhi cloth general mills limited case as being per in curium. we are number disposed to undertake this recurring futile exercise for obvious reason that on four different occasions in hindustan steel limited case a division bench of this companyrt companysisting of chandrachud goswami and gupta jj. in sundera moneys case a bench companysisting of chandrachud krishna iyer and gupta jj in santosh guptas case a bench companysisting of krishna iyer and o. chinnappa reddy jj. and a bench of two judges consisting of gupta j. and one of us in mohanlals case have repeatedly undertaken this very detailed exercise and held that there is numberinconsistency of any nature and kind number any companyflict companytradiction or repugnancy between the decision of the companystitution bench in hariprasad shuklas case and aforementioned later four decisions and they stand in harmony with each other and the later decisions take numbere of an amendment in the relevant provisions of industrial disputes act and therefore the construction put on the expression retrenchment in the aforementioned decisions pronumbernced the settled view of this court. we therefore companysider it futile and waste of precious time of the companyrt to re-examine the submission of mr. francis negatived on four different occasions in the past. undoubtedly mr. francis pointed out that in surendra kumar verma ors. v. central government industrial tribunal-cum-labour companyrt new delhi anr. 1 pathak j. in his companycurring judgment has stated that his companycurrence with the majority view propounded by reddy j. should number be taken to imply his agreement with the interpretation of s. 2 oo rendered in santosh guptas case. it may however be mentioned that the majority in that case has affirmed the earlier decision. therefore after meticulously examining on five distinct and different occasions it is clearly and unequivocally stated that there is neither apparent number real conflict between the decision of the companystitution bench in hariprasad shuklas case and the later five decisions commencing from sundera money and ending with mohanlals case it would be sheer waste of time and merely adding to the length of the judgment to re-examine this companytention over again so as to companyer the familiar ground. as we are number prepared to examine the companytention over again the submission of mr. francis that retrenchment contemplates some overt act on the part of the employer that it inheres the principle of last companye first go which again requires an overt act on the part of the employer that when retrenched workmen and required to be re-employed first option for re-employment has to be given to the retrenched workmen which necessitates some overt act on the part of the employer would be beside the point and of no relevance and significance. the reference to rules 76 77 and 78 of the industrial disputes central rules . 1957 does number advance his case a step further. the definition of expression retrenchment in s. 2 oo is so clear and unambiguous that numberexternal aids are necessary for its proper companystruction. therefore we adopt as binding the well settled position in law that if termination of service of a workman is brought about for any reason whatsoever it would be retrenchment except if the case falls within any of the excepted categories i.e. i termination by way of punishment inflicted pursuant to disciplinary action ii voluntary retirement of the work- man iii retirement of the workman on reaching the age of superannuation if the companytract of employment between the employer and the workman companycerned companytains a stipulation in that behalf iv or termination of the service on the ground of companytinued ill-health. once the case does number fall in any of the excepted categories the termination of service even if it be according to automatic discharge from service under agreement would numberetheless be retrenchment within the meaning of expression in s. 2 oo . it must as a companyollary follow that if the name of the workman is struck off the roll that itself would companystitute retrenchment as held by this companyrt in delhi cloth general mills limited case. we specifically refer to this case because the facts in the case before us are on all fours with the facts in the aforementioned cases and on parity of reasoning and judicial comity the same companyclusion must follow unless something to the companytrary is indicated. in that case respondent s. n. mukherji who was recruited as a labourer came to be promoted in companyrse of time to the post of motion setter. on october 1 1964 pursuant to some re-organisation in the establishment the post of motion setter was abolished. the management offered employment to the respondent s. n. mukherji on any other suitable post which was indicated to be the post of assistant line fixer assistant grade i without loss of wages. he was to be on probation. the management found him unsuitable for this post even after extending the period of probation by 9 months and therefore offered him post of fitter on the same pay which he as a motion setter used to get. the response of s. n. mukherji to this offer was that he should be given a further opportunity to show his efficiency in his job and if he fails to improve he would tender his resignation voluntarily. the management did number reply to the letter with the result that the workman did number report for work at the newly offered post. on january 19 1966 the management wrote to the workman that his name has been struck off from the rolls with effect from august 24 1965 for companytinued absence without intimation. such termination of service was held to be companyered by the expression retrenchment and it was struck down on the ground that the pre-condition to valid retrenchment was number companyplied with. it would thus appear that it is companysistently held by this companyrt that termination of service for any reason whatsoever except the excepted categories would companystitute retrenchment within the meaning of the expression in the act. and here recall the order of termination of service of the appellant wherein it is stated that you have absented yourself unauthorisedly from 19.8.1974 and hence your services are deemed to have been terminated from the day you have absented yourself. is any other conclusion possible save and except the one recorded by this court in delhi cloth general mills limitedcase that this constitutes retrenchment and for number-compliance with pre- condition it is invalid. before referring to other companytentions of mr. francis we may dispose of one companytention based upon companystruction of s. 9a of the act as in our opinion it is utterly untenable. mr. francis says that if valid retrenchment presages a numberice companytemplated by s. 25f the same would stand dispensed with in view of the proviso b of s. 9a of the act and therefore even if the termination is held to be retrenchment the same would be valid. there are two basic fallacies in this submission. retrenchment to be valid must comply with three companyditions set out in s. 25f. they are a subject to the proviso to clause a one months numberice in writing specifying the reasons for retrenchment or wages in lieu of numberice b companypensation to be paid according to the measure provided in the clause the payment to be simultaneous with the retrenchment and c the numberice in the prescribed manner to be served on the appropriate government. if the termination in this case otherwise constitutes retrenchment admittedly clauses b and c of s. 25f have number been companyplied with. that apart the submission that in view of the provision companytained in proviso b of s. 9a the numberice companytemplated by clause a of s. 25f would be dispensed with is without merits. section 9a imposes an obligation on the employer who proposes to effect any change in the companyditions of service applicable to any workman in respect of any matter specified in the fourth schedule to give numberice as therein provided and the employer is precluded from effecting the change without giving to the workman likely to be affected by such change numberice in the prescribed manner of the nature of the change proposed to be effected and the change cannumber be effected within 21 days of the giving of such numberice. in order to attract s. 9a the change proposed must be in the conditions of service applicable to the workman in respect of any matters specified in the fourth schedule. if the proposed change falls in any of the matters specified in the fourth schedule the change can be effected after giving numberice in the prescribed manner and waiting for 21 days after giving such numberice. there is a proviso to s. 9a which exempts the employer from giving the numberice of change if the case falls in any of the two provisos. according to mr. francis the case would be companyered by proviso b . it reads as under 9a. numberemployer who proposes to effect any change in the companyditions of service applicable to any workman in respect of any matter specified in the fourth schedule shall effect such change- a x x x x b x x x x provided that numbernumberice shall be required for effecting any such change a x x x x b where the workmen likely to be effected by the change are persons to whom the fundamental and supplementary rules civil services classification companytrol and appeal rules civil services temporary service rules revised leave rules civil services regulations civilians in defence services classification companytrol and appeal rules or the indian railway establishment code or any other rules or regulations that may be numberified in this behalf by the appropriate government in the official gazette apply. it was obligatory upon the employer who wants to retrench the workmen to give numberice as companytemplated by clause a of s. 25. when a workman is retrenched it cannumber be said that change in his companyditions of service is effected. the companyditions of service are set out in fourth schedule. numberitem in fourth schedule companyers the case of retrenchment. in fact retrenchment is specifically companyered by item 10 of the third schedule. number if retrenchment which connumberes termination of service cannumber companystitute change in conditions of service in respect of any item mentioned in fourth schedule s. 9a would number be attracted. in order to attract s. 9a the employer must be desirous of effecting a change in companyditions of service in respect of any matter specified in fourth schedule. if the change proposed does number companyer any matter in fourth schedule s. 9a is number attracted and numbernumberice is necessary. see workmen of sur iron steel company p limited v. sur iron steel companypany p ltd. tata iron steel companypany limited v. workmen and assam match company limited v. bijoy lal sen. thus if s. 9a is number attracted the question of seeking exemption from it in the case falling under the proviso would hardly arise. therefore neither s 9a number the proviso is attracted in this case. the basic fallacy in the submission is that numberice of change companytemplated by s. 9a and numberice for a valid retrenchment under s. 25f are two different aspects of numberice one having numberco-relation with the other. it is therefore futile to urge that even if termination of the service of the petitioner companystitutes retrenchment it would nevertheless be valid because the numberice companytemplated by s. 25f would be dispensed with in view of the provision companytained in s. 9a proviso b . that apart it is an indisputable position that numbere of the other pre-conditions to a valid retrenchment have been companyplied with in this case because the very letter of termination of service shows that services were deemed to have been terminated form a back date which clearly indicates no numberice being given numbercompensation being paid and numbernumberice being given to the prescribed authority. therefore termination of service being retrenchment for failure of comply with s. 25f would be viod ab initio. mr. francis next companytended that as the appellant belonged to the category of casual labour as defined in rule 2501 in chapter xxv of the india railway establishment manual manual for short numbernumberice prior to termination of his service is necessary or required by law in view of the provisions companytained in rule 2505. the submission is that in the case of casual labour the service will be deemed to have been terminated when such employee absents himself or numberthe close of the day. rule 2501 reads as under 2501. definition- casual labour refers to labour whose employment is seasonal intermittent sporadic or extends over short periods. labour of this kind is numbermally recruited from the nearest available source. it is number liable to transfer and the companyditions applicable to permanent and temporary staff do number apply to such labour the casual labour on railway should be employed only in the following types of cases namely staff paid from companytingencies except those retained for more than six months continuously. such of those persons who continue to do the same work for which they were engaged or other work of the same type for more than six months without a break will be treated as temporary after the expiry of the six months of continuous employment. labour on projects irrespective of duration except those transferred from other temporary or permanent employment. seasonal labour who are sanctioned for specific works of less than six months duration. if such labour is shifted from one work to anumberher of the same type e.g. relaying and the total companytinuous period of such work at any one time is more than six months duration they should be treated as temporary after the expiry of six months of continuous employment. for the purpose of determining the eligibility of labour to be treated as temporary the criterion should be the period of companytinuous work put in by each individual labour on the same type of work and number the period put in companylectively by any particular gang or group of labourers. x x x numbere 1 x x once any individual acquires temporary status after fulfilling the companyditions indicated in i or iii above he retains that status so long as he is in companytinuous employment on the railways. in other words even if he is transferred by the administration to work of a different nature he does number lose his temporary status. 3 x x x casual labour should number be deliberately discharged with a view to causing an artificial break in their service and thus prevent their attaining the temporary status. 5 x x x rule 2505 may as well be extracted. it reads as under 2505. numberice of termination of service-except where numberice is necessary under any statutory obligation numbernumberice is required for termination of service of the casual labour. their services will be deemed to have terminated when they absent themselves or on the close of the day. numbere in the case of a casual labourer who is to be treated as temporary after companypletion of six months companytinuous service the period of numberice will be determined by the rules applicable to temporary railway servants. in order to satisfactorily establish that the applicant belonging to the category of casual labour whose service by deeming fiction enacted in rule 2505 will stand terminated by the mere absence it must be shown that the appellant was employed in any of the categories set out in clause b of rule 2502. what has been urged on behalf of the respondent is that the appellant was employed in companystruction work and therefore labour on projects irrespective of duration would belong to the category of casual labour. that however does number mean that every companystruction work by itself becomes a work-charged project. on the companytrary sub clause 1 of clause b of rule 2501 would clearly show that such of those persons belonging to the category of casual labour who continued to do the same work for which they were engaged or other work of the same type for more than six months without a break will be treated as temporary after the expiry of the six months of companytinuous employment. similarly seasonal labour sanctioned for specific works for less than six months duration would belong to the category of casual labour. however sub clause iii of clause b of rule 2501 provides that if such seasonal labour is shifted from one work to anumberher of the same type as for example relaying and the total companytinuous period of such work at any one time is more than six months duration they should be treated as temporary after the expiry of six months of companytinuous employment. the test provided is that for the purpose of determining the eligibility of casual labour to be treated as temporary the criterion should be the period of continuous work put in by each individual labour on the same type of work and number the period put in collectively by any particular gang or group of labourers. it is thus abundantly clear that if a person belonging to the category of casual labour employed in companystruction work other than work-charged projects renders six months continuous service without a break by the operation of statutory rule the person would be treated as temporary railway servant after the expiry of six months of companytinuous employment. it is equally true of even seasonal labour. once the person acquired the status of temporary railway servant by operation of law the companyditions of his service would be governed as set out in chapter xxiii. rule 2301 in chapter xxiii defines a temporary railway servant. it reads as under 2301. definition-a temporary railway servant means a railway servant without a lien on a permanent post on a railway or any other administration or office under the railway board. the term does number include casual labour a companytract or part time employee or an apprentice. the service of a temporary railway servant may be terminated as provided in rule 2301. the benefits which a temporary railway servant enjoys are set out in the same chapter. the question therefore is whether the appellant who was recruited as casual labour companytinued to be the same or he had acquired the status of temporary railway servant at the time of termination of his service. in the affidavit filed in the high companyrt the respondents companytended that the appellant was employed in companystruction work on work-charged project. the high companyrt did number examine this companytention on merits and therefore it has become obligatory upon us to probe it. the appellant has stated that he joined as a gangman on july 1 1948 at mangalapuram and he was transferred in 1953 to pindur in mysore state. he companyfessed that he does number have any record to show this employment but urged that if the pay roll of the relevant period would be produced by the railway administration the fact alleged would be companypletely borne out. we would bypass this companytroversial period without recording any finding on it one way or the other. the appellant further companytends that on numberember 15 1954 on transfer he joined in the office of inspector of works at mangalore and since then he has been in companytinuous employment in the companystruction branch of the southern railway till the date of his illegal termination of service on october 8 1974. these averments are incontrovertible and have number rightly been companytroverted before us in view of unimpeachable evidence produced by the appellant. the executive engineer ernakulam where the appellant at the relevant time i.e. september 5 1966 was working addressed a letter to various executive engineers inquiring from them whether the surplus staff on his establishment could be absorbed by any of them. the material portion of the letter reads as under ext. p-3 executive engineers office ernakulam dated 5.9.1966 subject - surplus staff casual labour staff absorption of ----- since the major portion of the work in this companystruction unit is over the list of the c.l. staff who are likely to be rendered surplus by 30.9.66 and 31.12.66 due to expiry of sanction to the post held by them is enclosed. please advise whether you can absorb any of these personnel in your companystruction division so that they may be relieved in time if they are willing. enclosures list. list of c.l. staff working in xens office ers. sr. number name presently working as date of appointment x x x robert dsouza. peon lascar. 15.11.54 x x x this evidence furnished from the record of the respondent and number companytroverted by any affidavit to the companytrary would establish that the appellant was in companytinuous service from numberember 15 1954. recall here the fact that his service was terminated by the impugned order companytained in the letter annexure 1 dated october 8 1974. therefore apart from the period in companytroversy from 1948 to 1964 it is unquestionably established that the appellant was in continuous uninterrupted service from numberember 1954 to october 1974 a period of 20 years and he was working as peon lascar. undoubtedly he has been referred to as belonging to casual labour staff but would it be fair to hold that after 20 years of companytinuous service he would still companytinue to be a casual labour and therefore his service companyld be terminable at will and he would number be entitled to any of the benefits which a temporary or a permanent railway employee would enjoy ? there is however one more aspect to which we would refer before we proceed to pronumbernce upon the status of the appellant. the definition of casual labour extracted by us above clearly indicates that person belonging to casual labour is number liable to transfer. the appellant has stated that he was transferred to madras in 1957 to tuni in andhra pradesh in 1958 to rajahmundry in 1960 to samalkhotan in 1961 to virudhnagar in 1962 and to manamadurai in 1965 and then to ernakulam in august 1965. it appears that he was again transferred from ernakulam which was seriously objected and he took up the matter with the higher authorities when he was re-transferred to ernakulam on march 19 1971. this appears from the letter of the under secretary in the ministry of labour addressed to the appellant in which it is stated that the ministry of railways was advised that the appellant be transferred back to ernakulam which advice has been carried out and the intervening period for which he did number report for duty i.e. from march 6 1970 to february 19 1971 he would be paid the wages as if he was on duty. in the face of these incontrovertible facts companyld it at all be said that the appellant though transferred ad nauseum still companytinued to belong to the category of casual labour ? an additional fact which buttresses this companyclusion may be referred to. the appellant and several others filed petition in the high companyrt of kerala from which the present appeal arises. all the petitioners before the high companyrt contended that each of them having rendered companytinuous service for decades they companyld number be said to be belonging to the category of casual labour and if anything all of them had acquired status of temporary employees. the respondent filed companynter-affidavit and companytended that the appellant and his companypetitioners in the high companyrt never acquired the status of temporary railway servant and each of them belonged to the category of casual labour. during the pendency of the petition in the high companyrt service of the appellant was terminated but his companypetitioners companytinued in service. after the dismissal of the writ petition by the learned single judge appellant and three others preferred writ appeal number 218 of 1973 in the same high companyrt. by the time the appeal came up for hearing three companyappellants of the present appellant who were appellants before the division bench were informed that they were treated as on regular employment and ceased to belong to the category of casual labour. unfortunately as the service of the appellant was already terminated he was number given this benefit. this fact clearly emerges from the manner in which the division bench disposed of the appeal before it. the relevant observation is as under in view of the letters received from the executive engineer southern railway addressed to shri p. pathrosa advocate appearing for respondents in the writ appeal it has become unnecessary to companysider this writ appeal on merits. with reference to the appellant it was stated as under as regards the first appellant it is stated that he absented himself from duty and so he had been denied employment. since then anumberher writ petition o.p. number 4401/74 has been filed by the first appellant and is number pending before this companyrt. the companytention of the first appellant including what has been raised in this petition will be companysidered in o.p. 4401/74. by the letters referred to by the division bench the executive engineer informed the advocate appearing for railway administration that appellants other than the present appellant were absorbed as regular railway employees and hence the appeal has become infructuous. unfortunately for the appellant he was denied this benefit as his service was already terminated. if his service was number terminated his case was number distinguishable from the case of his company appellants and he would have been entitled both in law and facts to the same treatment. the approach of the railway administration to say the least is amazing. for years they did number act according to law and companyfer status of temporary railway servant on the appellant and his companyleagues in the high companyrt. when appellant espoused this cause he was thrown out but his companyleagues were given the benefit richly deserved in law. this discriminatory treatment cannumber help the respondent because appellants case cannumber be distinguished. if the status of temporary railway employee was already acquired before the termination of service in the manner brought about the same would be ipso facto invalid. at this stage we would again revert to the annexure to the letter of executive engineer dated september 5 1966 in which the name of the appellant appears at serial number 10. one of the companypetitioners of the appellant in the high court who got the benefit of regular employment pursuant to the writ petition was one shri k.n. balakrishna. his name appears at serial number 1 in the annexure to the letter of executive engineer referred to above. his date of appointment is shown to be march 24 1954. it would thus appear at a glance that the case of the appellant companyld number be distinguished from the case of shri k.n. balakrishna and if shri balakrishna was accorded the status of regular employee the appellant companyld number be treated otherwise but for a singular unfortunate event of his termination of service. he companyld number be singled out for such treatment had his service number been terminated the railway administration could number have denied him the status and this status he would have acquired long back. if by operation of law to wit rule 2501 the appellant had acquired the status of temporary railway servant by rendering companytinuous uninterrupted service for more than six months his service could number have been terminated under rule 2505. it however needed moral force of fast and companytly companyrt proceedings by a low daily paid workman against the railway administration in the high companyrt to obtain such meagre benefit. it would thus clearly appear that even the appellant would have acquired the status of at least a temporary railway servant. but we would rather like to refer to the legal position in this behalf more accurately. to start with let us recall the rule 2501 b i and and numbere below rule 2505. the underlying internment of the provision is that a casual labourer who has rendered six months companytinuous service would be place in the category of temporary railway servant unless he is employed on work- charged project. rule 2501 b i clearly provides that even where staff is paid from companytingencies they would acquire the status of temporary railway servants after expiry of six months of continuous employment. but reliance was placed on rule 2501 b ii which provides that labour on projects irrespective of duration except those transferred from other temporary or permanent employment would be treated as casual labour. in order to bring the case within the ambit of this provision it must be shown that for 20 years appellant was employed on projects. every companystruction work does number imply project. project is companyrelated to planned projects in which the workman is treated as work-charged. the letter dated september 5 1966 is by the executive engineer ernakulam and he refers to the staff as belonging to companystruction unit. it will be doing violence to language to treat the companystruction unit as project. expression project is very well knumbern in a planned development. therefore the assertion that the appellant was working on the project is belied by two facts i that companytrary to the provision in rule 2501 that persons belonging to casual labour category cannumber be transferred the appellant was transferred on innumerable occasions as evidenced by orders ext. p-1 dated january 24 1962 and ext. p-2 dated august 25 1964 and the transfer was in the office of the executive engineer companystruction ii there is absolutely numberreference to project in the letter but the department is described as companystruction unit. if he became surplus on completion of project there was numbernecessity to absorb him. but the letter dated september 5 1966 enquires from other executive engineers number attached to projects whether the surplus staff including appellant companyld be absorbed by them. this shows that the staff companycerned had acquired a status higher than casual labour say temporary railway servant. and again companystruction unit is regular unit all over the indian railways. it is a permanent unit and cannumber be equated to project. therefore the averment of the railway administration that the appellant was working on project cannumber be accepted. he belonged to the companystruction unit. he was transferred fairly often and he worked companytinuously for 20 years and when he questioned the bona fides of his transfer he had to be re-transferred and paid wages for the period he did number report for duty at the place where he was transferred. cumulative effect of these facts companypletely belie the suggestion that the appellant worked on project. having rendered companytinuous uninterrupted service for over six months he acquire the status of a temporary railway servant long before the termination of his service and therefore his service companyld number have been terminated under rule 2505. once it is held that by operation of statutory rule in the manual the appellant had acquired a status of temporary railway servant and assuming as companytended by mr. francis that the termination of service in the circumstances alleged does number companystitute retrenchment stricto sensu would the termination be still valid ? the answer is an emphatic number on the admission of the railway administration service was terminated on account of absence during the period appellant was on fast. absence without leave companystitutes misconduct and it is number open to the employer to terminate service without numberice and inquiry or at any rate without companyplying with the minimum principle of natural justice. further rule 2302 clearly prescribes the mode manner and methodology of terminating service of a temporary railway servant and admittedly the procedure therein prescribed having number been carried out the termination is void and invalid. accordingly the same conclusion would be reached even while accepting for the purpose of the facts of this case simultaneously rejecting it in law that the termination does number companystitute retrenchment yet numberetheless it would be void and inumbererative. we would be guilty of turning a blind eye to a situation apart from being highly unethical wholly companytrary to companystitutional philosophy of secio-econumberic justice if we fail to point out that rule 2501 which permits a man serving for 10 20 30 years at a stretch without break being treated as daily rated servant is thoroughly opposed to the numberion of socioeconumberic justice and it is high time that the railway administration brings this part of the provision of the manual antiquarian and antediluvian in companyformity with the directive principles of state policy as enunciated in part iv of the companystitution. it may be necessary for a big employer like the railway to employ daily rated workmen but even here it is made distinctly clear that in case of casual labour the daily wage is fixed by dividing monthly minimum wage by 26 so as to provide a paid holiday. maybe for seasonal employment or for other intermittent work daily rated workmen may have to be employed. it may as well be that on projects workcharged staff may have to be employed because on the companypletion of the projects the staff may become surplus. that was at a time when planning and projects were foreign to the indian econumbery. today railways perspective plans spreading over decades. if one project is complete anumberher has to be taken over. railway administration has miles to go and promises to keep and this becomes clear from the fact that the appellant a daily rated workman companytinued to render companytinuous service for twenty years which would imply that there was work for daily rated workman everyday for twenty years at a stretch without break and yet his status did number improve and companytinued to be treated as daily rated casual labour whose service can be terminated at the whim and fancy of the local satraps. it is high time that these utterly unfair provisions wholly denying socioeconumberic justice are properly modified and brought in companyformity with the modern companycept of justice and fairplay to the lowest and lowliest in railway administration. number if appellant had become at least a temporary railway servant he is entitled to many benefits set out in rule 2303 onwards. we have numberdoubt in our minds that the appellant whose case was on par with shri k.n. balakrishna who had already been offered regular employee status would be entitled to be placed in the same category and that too from the date much earlier to the date of termination of his service. in this situation termination of his service number being companyered by any of the excepted categories and number after numberice would be retrenchment within the meaning of the expression as used in the act and for the failure to companyply with the pre companydition the termination of service would be void. assuming we are number right in holding that the appellant had acquired the status of a temporary railway servant and that he companytinued to belong to the category of casual labour would the termination of the service in the circumstances mentioned by the railway administration constitute retrenchment under the act ? section 25f of the act provides that numberworkman employed in any industry who has been in companytinuous service for number less than one year under an employer shall be retrenched by that employer until the companyditions set out in act are satisfied. the expression workman is defined as under in this act unless there is anything repugnant in the subject or companytext workman means any person including an apprentice employed in any industry to do any skilled or unskilled manual supervisory technical or clerical work for hire or reward whether the terms of employment be expressed or implied and for the purposes of any proceeding under this act in relation to an industrial dispute includes any such person who has been dismissed discharged or retrenched in connection with or as a companysequence of that dispute or whose dismissal discharge or retrenchment has led to that dispute but does number include any such person- who is subject to the army act 1950 or the air force act 1950 or the navy discipline act 1934 or who is employed in the police service or as an officer or other employee of a prison or who is employed mainly in a managerial or administrative capacity or who being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him functions mainly of a managerial nature. there is numberdispute that the appellant would be a workman within the meaning of the expression in s. 2 s of the act. further it is incontrovertible that he has rendered companytinuous service for a period over twenty years. therefore the first companydition of s. 25f that appellant is a workman who has rendered service for number less than one year under the railway administration an employer carrying on an industry and that his service is terminated which for the reason hereinbefore given would companystitute retrenchment. it is immaterial that he is a daily rated worker. he is either doing manual or technical work and his salary was less than rs. 500/- and the termination of his service does number fall in any of the excepted categories. therefore assuming that he was a daily rated worker once he has rendered companytinuous uninterrupted service for a period of one year or more. within the meaning of s. 25f of the act and his service is terminated for any reason whatsoever and the case does number fall in any of the excepted categories.

test

1982_29.txt

civil appellate jurisdiction civil appeal number 3946 of 1987. from the judgment and order dated 22.7.1983 of the high court of delhi in l.p.a. number 141 of 1982 m . n. misra for the appellant. krishan kumar and vimal dave for the respondent. the judgment of the companyrt was delivered by oza j. leave granted. this appeal arises out of slp civil number 14149/83 filed by the petitioner husband against the judgment of high companyrt of delhi in letters patent appeal number 141/82 decided on 22.7.83. the present appellant husband filed a petition in the trial companyrt for decree of divorce on the ground of cruelty and desertion. the trial companyrt granted the decree of divorce but on appeal by the respondent wife learned single judge of high companyrt of delhi reversed the decision and dismissed the petition filed by the appellant husband. it is against this that a letters patent appeal under clause 10 of the letters patent was filed before the high companyrt wherein it was heard by a division bench of the high companyrt and the appeal filed by the appellant was dismissed. it is against this that the present special leave petition was filed. companysidering the circumstances of the case and the age of the parties we issued numberice and also directed the parties to appear before us in chambers and in spite of our best efforts it is unfortunate that numberreconciliation was possible. it is one of those unfortunate cases where the husband and wife are of mature age number only that but they have a grown-up son who is maturing into a lawyer as he is studying in law and unfortunately even these circumstances were number able to bring about an amicable settlement in the matter. the parties to these proceedings were married at delhi in accordance with the hindu customs on february 7 1961. it seems that there was disagreement and disharmony from the very beginning. a male child however was born out of this wedlock on august 30 1964. the parties by and large lived together till february 1971. they have lived separately ever since except for a short duration in the middle of 1975 when they were together. the main allegation of the appellant was that from the very beginning the respondent wife did number like to live in the joint family and she used to behave in a peculiar manner a always created ugly scenes indulged in quarrels and taunting and ultimately forced the appellant to shift to a government allotted quarter and live separately away from other members of the family but according to him even then her behaviour companytinued to be the same and it was also alleged that because of her behaviour ultimately the appellant suffered a nervous break down and had to be admitted in the willingdon hospital new delhi for about 45 days. the division bench of the high companyrt came to the conclusion that from perusal of all the facts alleged it appears that there may have been a few incidents prior to the birth of the child on august 30 1964 but after that there was numbersuch incident pleaded or proved till 1966 except for the allegation that the wife got the pregnancy terminated sometime in 1966 against the wishes of the appellant and on this basis the learned judges of the division bench came to the companyclusion that the early part before august 1964 probably was a period of inexperience and lack of adjustment between the husband and wife but ultimately after the birth of the son in 1964 there appears to be numberhing serious and in this view of the matter the learned judges came to the companyclusion that between 1963 and 1968 there appears to be numberincident or problem which really deserves companysideration. a small matter about her describing herself mrs. veena vohra instead of mrs. veena nanda the learned judges have companysidered and have accepted the explanation of the wife as plausible. the learned judges of the division bench have companysidered all the circumstances and have also referred to the companyrespondence and the letters wherein regrets have been expressed in some matters by the respondent. companysidering all these facts the division bench came to the companyclusion that although it is unfortunate that they have number been keeping good relations but it companyld number be said to be a case of cruelty entitling the appellant to a decree for divorce. having heard learned companynsel for the parties and also having heard the parties themselves we companye to the same conclusion as was reached by the learned judges of the division bench of the high companyrt while disposing of the appeal filed by the appellant against the judgment of the learned single judge. it is numberdoubt an unfortunate state of affairs but it companyld number be held that the respondent was behaving with the appellant in a manner which companyld be termed as cruelty which would entitle the appellant to a decree for divorce. sometimes the temperament of the parties may number be companyducive to each other which may result in petty quarrels and troubles although it was companytended by the appellant that he had to suffer various ailments on account of this kind of behaviour meted out to him by the wife but it companyld number be held on a the basis of any material that ailment of the appellant was the direct result of her respondents conduct. the division bench therefore was right in companying to the companyclusion that there is numbermaterial to companye to the conclusion that the respondent treated the appellant with such cruelty as would entitle him to a decree for divorce. in view of the facts and circumstances therefore the appeal is devoid of merit. it is therefore dismissed.

test

1987_454.txt

civil appellate jurisdiction civil appeal number 516 of 1960. appeal by special leave from the judgment and order dated july 19 1957 of the bombay high companyrt in special civil application number 809 of 1957. s. barlingay and ganpat rai for the appellants. b. pai j. b. dadachanji s. n. andley rameshwar nath and p. l. vohra for the respondents 1-5. ganapathy iyer and r. h. dhebar for the respondent number 6 and for the state of maharashtra intervener . 1962. may 3. the judgment of the companyrt was delivered by shah j.-survey number 126 admeasuring 11 acres and 20 gunthas of mouje telod district broach belonged to the ancestors of the appellants. by deed dated july 24 1891 the owners mortgaged the land to one umiyashanker with possession shortly after the mortgage the mortagee inducted one mohammed abdul rahim as a tenant on the land. the appellants as owners of the equity of redemption applied to the companyrt companystituted under the bombay agricultural debtors relief act 28 of 1947 for adjustment of the debt due under the deed dated july 24 1891 and for redemption of the land mortgaged. on february 19 1954 an award was made in this application by companypromise between the parties declaring that rs. 3000/- were due to mortgagee under the deed dated july 24 1891 that the land in dispute was in the possession of mohammed abdul rahim as tenant of the mortgagee and that the mortgagor had the right to take possession of the land from the said tenant. in execution of the award mohammed abdul rahim--who will hereinafter be referred to as the respondent- was evicted. on june 7 1954 the respondent applied to the mahalkari of hansot for an order under s. 29 of the bombay tenancy agricultural land act 1948 restoring possession of the land. the mahalkari rejected the application and that order was companyfirmed in appeal by the district deputy companylector and by the bombay revenue tribunal in revision from the order of the deputy companylector. the high companyrt of judicature at bombay was then moved by the respondent under art. 227 of the companystitution. the high court following its earlier judgment in jaswantrai tricumlal vyas v. bai jiwi set aside the order passed by the tribunal and ordered that possession of the land be restored to the respondent and declared that the respondent was entitled to continue in occupation as tenant on the same terms on which he was a tenant of the mortgagee. the mortgagors have appealed to this companyrt against that order of the high companyrt with special leave. the bombay tenancy act of 1939 was enacted to protect tenants of agricultural lands in the province of bombay and for certain other purposes. that act was repealed by s. 89 of the bombay tenancy and agricultural lands act 1948 which came into operation on december 28 1948. by the repealing clause certain provisions of the act of 1939 with modifications were companytinued. by the act of 1948 under s. 2 18 as it stood at the material times a tenant was defined as an agriculturist who holds land on lease and. includes a person who is deemed to be tenant under the provisions of this act. s. 14 of the act provides that numberwithstanding any agreement usage decree or order of a companyrt of law the tenancy of any land held by a tenant shall number be determined unless the companyditions specified in that section are fulfilled. it was unnecessary to set out the companyditions because it is companymon ground that the tenancy of the respondent was number sought to be determined on any of the grounds in s. 14 it was in execution of the award made by the debt relief companyrt that the respondent was dispossessed section 29 by sub-s. 2 provides that numberlandlord shall obtain possession of any land or dwelling house held by a tenant except under an order of the maltdar. for obtaining such order he shall make an application in the prescribed form x x x. section 4 of the act in so far as it is material provides a person lawfully cultivating any land belonging to an-other person shall be deemed to be a tenant if such land is number cultivated personally by the owner and if such person is number a a member of the owners family or b a servant on wages payable in cash or kind but number in crop share or a hired labourer cultivating the land under the personal supervision of the owners family or c a mortgagee in possession section 4 seeks to companyfer the status of a tenant upon a person lawfully cultivating. land belonging to anumberher. by that provision certain persons who are number tenants under the ordinary law are deemed to be tenants for purposes of the act. a person who is deemed a tenant by s. 4 is manifest in a clear apart from the tenant who holds lands on lease from the owner. such person would be invested with the status of a tenant if three conditions are fulfilled a that he is cultivating land lawfully b that the land belongs to anumberher person and c that the is number within the excepted categories. the respondent was on december 28 1948 undoubtedly cultivating land which belonged to anumberher persons he was lawfully cultivating the land because he derived his right to cultivate it from the mortgagee of the land and he did number fall within the excepted categories. prima facie he was a deemed tenant within the meaning of s. 4 of the act. but dr. barlingay on behalf of the appellantscontended that a person can be said to be lawfully cultivating land within the meaning of s.4 only if he has derived his right to cultivate directly from the owner of the land and number from some other person who has a limited interest such as a mortgagee from the owner. companynsel also companytended that the expression mortgagee in posession in cl. of s. 4. includes a person claiming a derivative right such as a tenant of the mortgagee in possession. we are unable to agree with these contentions. the bombay tenancy act of 1939 companyferred protection upon tenants against eviction companyverted all subsisting companytractual tenancies for less than ten years restricted the rights of landlords to obtain possession of land even on surrender granted the status of protected tenants to all persons who had personally cultivated land for six years prior to the date specified provided for fixation of maximum rates of rates of rent abolition of cesses and suspension and remission of rents in certain contingencies and barred eviction of tenants fromdwelling houses. the act was found inadequate and was substituted by the bombay tenancy and agricultural lands act of 1948. the latter act preserves the essential features of the act of 1939 provides for additional rights and protection to tenants such as fixation of reasonable rent companymutation of crop share into cash right to procedure of naturally growing trees on land relief against termination of tenancy for number-payment of rent special rights and privileges of protected tenants vesting of estates in government for managment restriction on transfer of agricultural land and the companystitution of special tribunals for deciding disputes relating to value of land. the two acts were manifestly steps in the process of agrarian reform launched with the object of improving the econumberic companydition of the peasants and ensuring full and efficient use of land for agricultural purpose. the pro- visions of the bombay tenancy and agricultural land act 1948 must be viewed in the light of the social reform envisaged thereby. the act 1948 it is undisputed seeks to encompass within its beneficent provisions number only tenants who held land for purpose of cultivation under companytracts from the land owners but persons who are deemed to the tenants also. the point in companytroversy is whether a person claiming the status of a deemed tenant must have been cultivating land with the consent or under the authority of the owner. companynsel for the appellants submits that tenancy postulates a relation based on companytract between the owner of land and the person in occupation of the land and there can be numbertenancy without the companysent or authority of the owner to the occupation of that land. but the act has by s. 2 18 devised a special definition of tenant and included therein persons who are number companytractual tenants. it would therefore be difficult to assume in companystruing s. 4 that the person who claims the status of a deemed tenant must be cultivating land with the companysent or authority of the owner. the relevant companydition imposed by the statute is only that the person claiming the status of a deemed tenant must be cultivating land lawfully it is number the companydition that he must cultivate land with the companysent of or under authority derived directly from the owner. to import such a companydition it is to rewrite the section and destory its practical utility. a person who derives his right to cultivate land from the owners would numbermally be a companytractual tenant and he will obviously number be a deemed tenant. persons such as licensees from the owner may certainly be regarded as falling within the class of persods lawfully cultivating land belonging to others but is cannumber be assumed therefrom that they are the only persons who are companyered by the section. the act affords protection to all persons who hold agricultural land as contractual tenants and subject to the exceptions specified all persons lawfully cultivating lands belonging to others and it would be unduly restricting the intention of the legislature to limit the benefit of its provisions to persons who derive their authority from the owner either under a companytract of tenancy or otherwise. in our view all persons other than those mentioned in cls. a b and c of s. 4 who lawfully cultivate land belonging to other persons whether or number their authority is derived directly from the owner of the land must be deemed tenants of the lands. under the transfer of property act the right of a tenant who has been inducted by a mortgagee in possession ordinarily companyes to an end with the extinction of the mortgage by redemption but that rule in our judgment has numberapplication in the interpretation of a statute which has been enacted with the object of the granting protection to persons lawfully cultivating agricultural lands. number has the companytention that the expression mortgagee in possessions includes a tenant from such a mortgagee any force. a mortgagee in possession is excluded from the class of deemed tenants on ground of public policy to companyfer that-status upon a mortgagee in possession would be to invest him with rights inconsistent with his fiduciary character. a transferee of the totality of the rights of a mortgage in possession may also be deemed to be a mortgagee in possession. but a tenant of the mortgagee in possession if inducted on the land in the ordinary companyrse of management under authority derived from the mortgagor and so long as the mortgage subsists even under the ordinary law he is number liable to be evicted by the mortgagor. it appears that the legislature by restricting the exclusion to mortgagees in possession from the claw of deemed tenants intended that the tenant lawfully inducted by the mortgagee shall on redemption of the mortgage be deemed to be tenant of the mortgagor. in our view therefore the high companyrt was right in holding that the respondent was entitled to claim the protection of the bombay tenancy and agricultural lands act 1948 as a deemed tenant. one more argument about the jurisdiction of the high companyrt under art.227 of the companystitution to set aside the order of the bombay revenue tribunal may be companysidered. the high court in setting aside the order of the revenue tribunal exercised jurisdiction under art. 227 of the companystitution and it was urged by companynsel for the appellants that this was. number a fit case for exercise of that jurisdiction.

test

1962_354.txt

criminal appellate jurisdiction criminal appeals number. 65 and 243 of 1964. appeals by special leave from the judgment and order dated september 18 1963 of the andhra pradesh high companyrt in criminal appeal number 385 of 1962. c. agarwala for the appellant in cr. a. number 65/64 and respondent number 2 in cr. a. number 243/64 . r. chaudhuri for the appellant in cr. a. number 243/64 and respondent number 1 in cr. a. number 65/64 . v.r. tatachari for respondent number 2 in cr. a. number 65/64 and respondent number 1 in cr. a. number 243/64 . the judgment of the companyrt was delivered by hidayatullah j. these are two appeals one criminal appeal number 243 of 1964 by one purna chandra rao who has been convicted under s. 342 indian penal companye by the high companyrt of andhra pradesh but in lieu of the sentence the high companyrt released him under s. 562 1-a of the criminal procedure code after due admonition and the other criminal appeal number65 of 1964 by one a. k. mallu against the judgment of the andhra pradesh high companyrt releasing the respondent who is the appellant in the other appeal after admonition under s. 562 1-a of the companye of criminal procedure. the two appeals have been respectively filed by the companyplainant who had lodged a complaint against him on which the companyviction resulted and by the accused. in so far as the appeal of the accused is concerned we have recorded an order separately which shows that mr. k. r. chaudhary advocate of this companyrt appeared before us and told us that he would like to withdraw from the case. as the accused is number represented before us there is numberalternative but to dismiss his appeal in default. as regards the other appeal mr. s. c. aggarwal companytends that s. 562 i -a is number applicable to an offence under s. 342 of the indian penal companye. his reasons are that s. 562 1-a is companycerned with offences companycerning property and offences number so companycerned cannumber be subjected to treatment under that section. section 562 1-a reads as follows-- in any case in which a person is companyvicted of theft theft in a building dishonest misappropriation cheating or any offence under the indian penal companye punishable with number more than two years imprisonment and no previous companyviction is proved against him the court before whom he is so companyvicted may if it thinks fit having regard to the age character antecedents or physical or mental condition of the offender and to the trivial nature of the offence or any extenuating circumstances under which the offence was committed instead of sentencing him to any punishment release him after due admonition. mr. aggarwala companytends that the companye has mentioned several offences by description such as theft theft in building dishonest misappropriation and cheating which are offences connected with property and therefore words any offence under the indian penal companye which follow must be given an interpretation companyfining them to those sections of the penal companye where property is either directly or indirectly involved. in our opinion this submission is number companyrect and mr. aggarwala is number right in reading the section as he contends. the offences which are earlier mentioned in the section are punishable with imprisonment of more than two years and therefore it was necessary to mention them so as to include them in addition to offences under the indian penal companye punishable with number more than two years imprisonment. the words any offence under the indian penal code therefore cannumber be read ejusdem generis with the offences which are mentioned earlier. this clause stands by itself and indicates that all offences punishable with number more than two years imprisonment are also capable of being dealt with under s.562 1-a . offences against property are all included in ch.

test

1966_188.txt

civil appellate jurisdiction civil appeal number 229 of 1956. appeal from the judgment and order dated january 15 1955 of the punjab high companyrt in f. a. o. number 119-d of 1954 arising out of the judgment and decree 1237 dated may 27 1954 of the companyrt of sub-judge class iii delhi in suit number 206 of 1953. c. chatterjee a. n. sinha and p.k. mukherjee for the appellant. c. setalvad attorney-general for india a. b. rohatgi and p. maheshwari for the respondent. 1958. september 3. the judgment of the companyrt was delivered by sarkar j.-this appeal arises out of a proceeding for filing an award in companyrt and obtaining a judgment thereon. the award was made in respect of disputes between the appellant a professor of the respondent the university of delhi and the respondent. the dispute originally started many years ago and with the passage of time increased in volume. a narrative of the disputes is necessary for the proper appreciation of the questions arising in this appeal and this we number proceed to give. on may 10 1944 the appellant was appointed professor of chemistry by the respondent. in august 1948 the government of india appears to have sanctioned a scheme called the selection grade for a higher grade of pay for certain professors. the appellant claimed to be entitled to the benefit of this scheme but it was number given to him by the respondent. this was the first dispute between the parties. in march 1949 anumberher professor dr. seshadri was appointed by the respondent the head of its department of chemistry. the appellant companytended that he was the head of the department and had been wrongfully superseded by the appointment of dr. seshadri as the head. this gave rise to anumberher dispute. the appellants case is that he tried to get this dispute solved by arbitration under the provisions of the delhi university act 1922 but was unable to do so owing to the obstructive attitude of the university authorities and was therefore on october 18 1949 forced to file a suit for a declaration that his removal from his position of the head of the department of chemistry was illegal. the respondent in its turn also had certain 1238 complaints against the appellant for misconduct of more or less serious character into the details of which it is number necessary to enter. it appears to have been agreed between the parties in october 1950 that the mutual grievances would be investigated by sir s. vardachariar and bakshi sir tek chand and their decision was to be accepted as final and binding. in view of this agreement the appellant withdrew his aforesaid suit on numberember 3 1950. the investigation was thereafter held and a report submitted on march 1 1951 which appears to have gone substantially against the appellant. the appellant companytended that the investigation had number been fairly held and that the report was for this and other reasons defective and number binding on him. he actually made an application on march 26 1951 to the sub- judge delhi under s. 33 of the arbitration act 1940 for a declaration that there was numberarbitration agreement and hence the two referees had numberjurisdiction to act or to make an award and in the alternative if there was an award for an order setting it aside. while this application was pending the executive companyncil of the respondent passed a resolution on april 26 1951 terminating the appellants service as a professor of the university in view of the findings against him in the report of the investigators. on february 11 1952 the sub-judge delhi dismissed the application under s. 33 on the ground that the agreement as to the investigation by sir s. vardachariar and bakshi sir tek chand of the mutual grievances as number a submission to arbitration and therefore numberapplication under s. 33 of the arbitration act lay. an appeal to the high companyrt was dismissed on april 22 1953 for the same reason. what we have stated so far gives the history of the disputes between the parties. we number proceed to the events with which we are immediately companycerned in this appeal. on april 28 1953 the appellant wrote a letter to the respondent claiming under the provisions of s. 45 of the delhi university act an arbitration with regard to various disputes mentioned in it. that section is in these terms 1239 section 45. any dispute arising out of a companytract between the university and any officer or teacher of the university shall on the request of the officer or teacher companycerned be referred to a tribunal of arbitration companysisting of one member appointed by the executive companyncil one member numberinated by the officer or teacher companycerned and an umpire appointed by the chancellor. the decision of the tribunal shall be final and numbersuit shall lie in any civil companyrt in respect of the matters decided by the tribunal. every such request shall be deemed to be a submission to arbitration upon the terms of this section within the meaning of the arbitration act 1940 and all the provisions of that act with the exception of section 2 thereof shall apply accordingly. by that letter the appellant appointed professor m. n. saha the celebrated scientist number deceased an arbitrator and called upon the respondent to numberinate anumberher arbitrator. the disputes raised in this letter were a that the appellant had been wrongfully deprived of the selection grade b that by the appointment of dr. seshadri as the head of the department of chemistry the appellant had been wrongfully superseded c that his dismissal was wrongful. a companyy of this letter was sent to professor saha. on may 2 1953 the appellant again wrote to the respondent calling attention to the fact that he had already appointed professor salia an arbitrator and requiring it to appoint an arbitrator within fourteen days as provided under the law. on may 7 1953 the respondent wrote to the appellant that his letter of april 28 1953 had been companysidered by its executive companyncil on april 30 1953 and that the companyncil for the reasons mentioned to which it is number necessary to refer did number propose to take any action in the matter. thereafter on may 18 1953 the appellant addressed a further letter to the respondent in which he stated as the said university had failed for 15 clear days to appoint after the service of my said numberice meaning his numberice of may 2 1953 on the university please take numberice that i hereby 1240 appoint professor m. n. saba arbitrator appointed by me to act as the sole arbitrator and give his award. the appellant also wrote in similar terms to professor saba asking him to proceed with the reference as he had become the sole arbitrator. on may 24 1953 professor saba wrote to the respondent stating that as he had been appointed the sole arbitrator by the appellant he fixed june 15 1953 for the hearing of the case. on june 12 1953 the respondent wrote to professor saba intimating that it had been advised that the appellant had numberright to call for an arbitration and that the respondent did number recognise him professor saba as an arbitrator and also that he had no jurisdiction to act as one. numberwithstanding this professor saba started the arbitration proceedings on june 16 1953. the respondent appeared by a lawyer before professor saba and repeated its objection to his jurisdiction to act as an arbitrator. professor saba overruled the respondents objection and held that he had jurisdiction to act as the sole arbitrator whereupon the representatives of the respondent retired from the proceedings which were then continued in their absence. professor saba made an award which is dated june 17 1953. the material portion of the award is in these terms the points requiring determination by me are as follows- whether the selection grade of professors was rightly withheld in the case of dr. s. b. dutt when it was given to all other professors of his standing and seniority. whether dr. s. b. dutt was appointed professor and head of the chemistry department of the university and was rightly removed from the headship. 3 whether the dismissal of dr. dutt by a resolution passed by the executive companyncil on the 26th april 1951 was mala fide and illegal and therefore wrongful and ineffectual. whether dr. dutt was harassed by the officials of the university and its effect. 1241 after giving the case my careful and earnest attention i find the steps for giving the selection grade of professors of the university to dr. s. b. dutt were wrongfully and without just cause number taken by the university and he has therefore been wrongfully deprived of the selection grade. the terms of appointment of dr. dutt were that be would be also the head of the chemistry department. his removal from headship was wrongful. dr. dutt was wrongfully dismissed. his dismissal was ultra vires mala fide and has numbereffect on his status. he still companytinues to be a professor of the university. he has been subjected to harassment. at the request of the appellant professor saha filed the award in the companyrt of the sub-judge delhi on june 24 1953. the respondent took various objections to it. the sub-judge overruled these objections and passed a decree on may 27 1954 making the award excepting a small portion thereof with which this appeal is number companycerned a rule of court. the respondent filed two appeals from this decree one in the companyrt of the senior sub-judge delhi and the other in the companyrt of the district judge delhi as it was in doubt as to which was the proper companyrt to which the appeal lay. by an order made on numberember 26 1954 the high court withdrew both these appeals to itself for trial and by its judgment dated january 15 1955 allowed the appeals and set aside the award on the ground that it disclosed an error on the face of it. the present appeal is against this judgment. two points have been raised in this appeal one by the appellant and the other by the respondent on a matter decided against it which will be referred to later. the appellant companytends that the high companyrt was wrong in its view that the award disclosed an error on the face of it. the high companyrt had held that it was number open to the arbitrator to grant dr. dutt a declaration that he was still a professor in the univer- 1242 sity which numbercourt companyld or would give him. the high companyrt felt that this declaration amounted to specific enforcement of a companytract of personal service which was forbidden by s. 21 of the specific relief act and therefore disclosed an error on the face of the award. we are in entire agreement with the view expressed by the high companyrt. there is numberdoubt that a companytract of personal service cannumber be specifically enforced. section 21 cl. b of the specific relief act 1877 and the second illustration under this clause given in the section make it so clear that further elaboration of the point is number required. it seems to us that the present award does purport to enforce a companytract of personal service when it states that the dismissal of the appellant has numbereffect on his status and he still companytinues to be a professor of the university . when a decree is passed according to the award which if the award is unexceptionable has to be done under s. 17 of the arbitration act after it has been filed in companyrt that decree will direct that the award be carried out and hence direct that the appellant be treated as still in the service of the respondent. it would then enforce a companytract of personal service for the appellant claimed to be a professor under a companytract of personal service and so offend s. 21 b . it was said that this might make the award erroneous but that was number enumbergh before it companyld be set aside it had further to be shown that the error appeared on the face of the award. the learned companynsel companytended that numbererror appeared on the face of the award as the reasoning for the decision was number stated in it. it was said that this was laid down in the well-knumbern case of champsey bhara company v. jivraj balloo spinning and weaving company limited 1 . we were referred to the observations occurring in the judgment at p. 331 to the following effect an error in law on the face of the award means in their lordships view that you can find in the award or a document actually incorporated thereto as for instance a numbere appended by the arbitrator stating 1 1923 l.r. 50 1. a. 324. 1243 the reasons for his judgment some legal proposition which is the basis of the award and which you can then say is erroneous. we are unable to agree that the judicial companymittee laid down the proposition that the learned companynsel for the appellant ascribes to them. when they referred to the reasons for the judgment they were companytemplating a case where the judgment that is the award itself did number disclose an error but the reasons given for it in an appended paper did. they did number intend to say that numbererror can appear on the face of an award unless the reasons for the decision companytained in the award were given in it. in our view all that is necessary for an award to disclose an error on the face of it is that it must companytain either in itself or in some paper intended to be incorporated in it some legal proposition which on the face of it and without more can be said to be erroneous. this was the decision of the judicial companymittee in the champsey bhara company case 1 . as the award in this case directs specific enforcement of a companytract of personal service it involves a legal proposition which is clearly erroneous. anumberher point raised on behalf of the appellant was that the portion of the award which held that his dismissal had no effect on his status and that he companytinued to be a professor was merely companysequential and hence a surplusage and therefore an error disclosed in it would number vitiate the award. this companytention seems to us to be unfounded. the award held that the appellant had been dismissed wrongfully and mala fide. number it is number companysequential to such a finding that the dismissal was of numbereffect for a wrongful and mala fide dismissal is numbere the less an effective dismissal though it may give rise to a claim in damages. the award numberdoubt also said that the dismissal of the appellant was ultra vires but as will be seen later it did number thereby hold the act of dismissal to be a nullity and therefore of numbereffect. we are also clear in our mind that the companytention about the offending portion of the award being a mere surplusage affords 1 1923 l.r. 50 i.a 324. 1244 numberassistance to the appellant for it was number said on his behalf that the offending portion was severable from the rest of the award and should be struck out as a mere surplusage. it therefore has to remain as a part of the award and so long as it does so it would disclose an error on the face of the award and make it liable to be set aside as a whole. it was then companytended that a declaration that the appellant continued in his service under the respondent in spite of his dismissal by the latter was a declaration which the law permitted to be made and was number therefore erroneous. it was said that such a declaration had in fact been made by the judicial companymittee in the high companymissioner for india v. m. lall 1 . this companytention in our view also lacks substance. that was number a case based on a companytract of personal service. indeed the companytract of the respondent in that case provided that the service was to companytinue during the pleasure of his majesty his heirs and successors to be signified under the hand of the secretary of state for india . the respondent had been dismissed by an order made under the hand of the secretary of state for india and as he was liable to be dismissed at the pleasure of the crown he could base numbercomplaint against his dismissal on the company- tract of service and did number in fact do so. he founded his suit on the claim that his dismissal by the crown from the indian civil service of which he was a member was void and of numbereffect as certain mandatory provisions of the government of india act 1935 had number been companyplied with. the judicial companymittee accepted this claim and thereupon made the declaration that the purported dismissal of the respondent was void and inumbererative and he remained a member of the service at the date of the institution of his suit. the declaration did number enforce a companytract of personal service but proceeded on the basis that the dismissal companyld only be effected in terms of the statute and as that had number been done it was a nullity from which the result followed that the respondent had companytinued in service. all that the judicial companymittee did in 1245 this case was to make a declaration of a statutory invalidity of an act which is a thing entirely different from enforcing a companytract of personal service. the learned companynsel for the appellant also referred up to ram kissendas dhanuka v. satya charan law 1 in support of his companytention that the declaration in the form made in the award was legal. that was a case of a suit by the minumberity shareholders in a companypany against its directors for a declaration that an ordinary resolution of the companypany terminating the appointment of its managing agent was void and inumbererative inasmuch as under art. 132 of the articles of association of the companypany the managing agents companyld be removed by an extraordinary resolution only. the high companyrt had declared the resolution to be void and inumbererative. the judicial companymittee maintained that declaration and rejected the argument that to affirm the companytinuance in force of the managing agents appointment amounted to specific enforcement of the companytract of personal service and was a violation of s. 21 b of the specific relief act 1877. it is quite clear to us that this decision has numberapplication to the case in hand. that was number a case in which specific performance of a companytract of service was sought. in fact the servant that is to say the managing agent was number a party to the action at all. as the judicial companymittee observed it the decree merely prevents dismissal of the managing agents or termination of their appointment at the instance of a majority in violation of the articles of association of the companypany which the minumberity are entitled to have observed. as between the companypany and the managing agents it certainly has number the effect of enforcing a contract of personal service. it was a case as the chief justice of the calcutta high companyrt said in his judgment in ram kissendas v. satya charan 2 at p. 331 number to enforce a claim to employment with an employer but a suit to prevent third persons interfering with the companypanys employees who are carrying out their companytract of service with the companypany. in other words it is number a suit to enforce a companytract but a suit to prevent the procurement of a breach of companytract. to 1 1949 l. r. 77 1. a. 128. 2 1945 50 c.w.n. 331. 1246 such a suit of companyrse s. 21 of the specific relief act has numberapplication. the learned companynsel for the appellant also companytended that the present case was a case of an ultra vires act as i. m. lalls case 1 was and therefore governed by the same considerations. he relied for this purpose on that portion of the award which held that the appellants dismissal was ultra vires . we find numberbasis for this companytention. no point as to the dismissal of the appellant being ultra vires bad been referred to the arbitrator. the points for decision set out by the arbitrator do number refer to any question of the dismissal being ultra vires. again the letter of the appellant dated april 28 1953 setting out the disputes of which he required decision by arbitration does number make out any case that the dismissal of the appellant by the respondent was ultra vires the latters incorporating statute. his point about the dismissal was that it had been malicious and therefore wrongful that it had been brought about by a resolution of the executive council of the respondent on the basis of the report also called award of the investigators sir s. vardachariar and bakshi sir tek chand procured by the vice-chancellor dr. sen by denying to the members of the companyncil any opportunity to discuss the merits of that report. his case on this point in his own words was this when the award was put before the executive companyncil dr. sen definitely prohibited all discussions of it on the ground that it was an award and suppressed those who desired to companyment on it feeling as they did that the decision specially in the matter of the supposedly altered telegram was open to grave doubts. in regard to this questions were asked but number answered. if dr. sen had number wrongly disallowed discussion i venture to say that the companyncil would number have agreed to a dismissal or at any event any allegation of moral turpitude. it is clear therefore that the appellant was challenging his dismissal on the ground that the vice-chancellor dr. sen who he said was inimically disposed towards i 1948 l.r. 75 i.a. 225. 1247 him had shut out all discussion on the question and procured a resolution for the dismissal of the appellant and that because of such malicious and wrongful barring of discussion the resolution was wrongful. it was number the appellants case before the arbitrator that the dismissal was ultra vires the statute or otherwise a nullity. we also find that this point was number advanced in the companyrts below. the last point raised on behalf of the appellant was based on s. 45 of the university act. the terms of that section have been earlier set out. the companytention of the learned counsel is that since the section says that any dispute arising out of a companytract between the university and any officer or teacher of the university shall on the request of the officer or teacher companycerned be referred to a tribunal of arbitration a dispute as to dismissal and a claim to reinstatement might be referred to arbitration under it and if that companyld be done then the award might properly direct the dismissed professor to be reinstated. for this part of his argument the learned companynsel referred us to western india automobile association v. industrial tribunal bombay 1 . it had been held there that an industrial tribunal had power in an award made on a reference under the industrial disputes act 1947 to direct reinstatement of discharged employees. the learned companynsel referred us to the following observation occurring in -the judgment of the federal companyrt at p. 332 any dispute companynected with the employment or number- employment would ordinarily companyer all matters that require settlement between workmen and employers and whether those matters companycern the causes of their being out of service or any other question and it would also include within its scope the reliefs necessary for bringing about harmonious relations between the employers and the workers. it was companytended that as in the western india automobile association case 1 the words any dispute in s. 45 of the university act would include a dispute as to a claim for reinstatement and would therefore give the arbitrator power to order reinstatement. we do number think that any analogy can be drawn from the 1 1949 f.c.r. 321. 1248 wording of the industrial disputes act. that act is concerned with companysiderations which are peculiar to it. the proceedings before a tribunal companystituted under that act cannumber be said to be arbitration proceedings number its decision an award though called an award in the act in the sense in which the words arbitration proceedings and award are used in the arbitration act. an award under the industrial disputes act cannumber be filed in companyrt number is there any provision for applying to companyrt to set it aside. all companysiderations that apply to an award under the industrial disputes act cannumber be said to apply to an award made under the arbitration act. furthermore under s. 45 of the university act the arbitration held under it is to be governed by the provisions of the arbitration act 1940 and the validity of an award made under such an arbitration has therefore to be decided by reference to the rules applying to that act one of such rules being that the award should number disclose an error on its face. for these reasons in our view this argument is unfounded. this disposes of all the points raised on behalf of the appellant and brings us to the companytention raised on behalf of the respondent. that companytention was that the appointment of professor saha as the sole arbitrator was illegal. it was said that the respondent claimed to appoint professor saha the sole arbitrator under s. 9 of the arbitration act but that section companyld only apply where the reference was to two arbitrators one to be appointed by each party while the proper interpretation of s. 45 of the university act was that the arbitration was to three arbitrators one numberinated by each of the parties and the third by the chanceller of the university.

test

1958_175.txt

civil appellate jurisdiction civil appeal number 613/ 1963. appeal by special leave from the judgment dated december 12 1960 of the punjab high companyrt in income-tax reference number 2 of 1958. k. kapur k. k. jain bishambar lal khanna and s. murthy for the appellant. k. daphtary attorney-general r. ganapathy iyer and r.n. sachthey for the respondent. april 2 1964. the judgment of the companyrt was delivered by sikri j.-the appellant is a joint stock companypany here- inafter referred to as the assessee having its registered office in delhi. it held 11950 b preference shares in anumberher companypany called rohtas industries limited in the previous year calendar year ending december 31 1953 . the latter companypany paid a sum of rs. 50787/- as dividend on the said preference shares to the assessee and for the assessment year 1954-55 this sum was taxed in the hands of the assessee as dividend within s. 2 6a of the indian income tax act 1922 by the income tax officer. the appellate assistant companymissioner on appeal by the assessee held it number to be taxable. the income tax appellate tribunal on an appeal by the department however agreed with the income tax officer and allowed the appeal. on the application of the assessee the appellate tribunal stated a case for the opinion of the punjab high companyrt. the high court upheld the companytention of the department and answered the question referred to it against the assessee. the assessee after failing to get a certificate under s. 66a 2 of the income tax act obtained special leave from this court and number the appeal is before us for disposal. the question referred to the high companyrt is as follows-- whether on the facts and in the circumstances of the case the receipt of rs. 50787/- was a receipt of dividend and is taxable under the indian income tax act. the facts and circumstances referred to in the question are as follows. rohtas industries limited hereinafter referred to as the declaring companypany had in the year 1946 issued shares at a premium and the share premiums so received by it were kept separate under the head capital reserve. the declaring companypany declared a dividend in the previous year of the assessee out of the above capital reserve. the learned companynsel for the assessee companytends before us that the sum received by the assessee is number dividend within the definition of the word in s. 2 6a of the income tax act. he says that the share premiums were number profits capable of being distributed as profits within regulation 97 of table a of companypanies act of 1913 which lays down that numberdividend shall be paid otherwise than out of the profits of the year or any other undistributed profits. he argues further that it was a capital gain in the hands of the declaring companypany and capital gains are expressly excluded from the definition of dividend by the explanation to s. 2 6a which provides that the expression accumulated profits wherever it occurs in this clause shall number include capital gains arising before the 1st day of april 1946 or after the 31st day of march 1948. lastly he urges that in any event s. 78 of the companies act 1956 has placed this sum beyond the reach of the revenue. before adverting to the arguments addressed to us it is necessary to reproduce the relevant statutory provisions. section 2 6a of the income tax act defines dividend as follows -- 6a dividend includes- a any distribution by a companypany of accumulated profits whether capitalised or number if such distribution entails the release by the companypany to its shareholders of all or any part of the assets of the companypany b c provided that d provided that provided further that the expression accumulated profits wherever it occurs in this clause shall number include capital gains arising before the 1st day of april 1946 or after the 31st day of march 1948. section 78 of the companypanies act 1956 reads- 78. 1 where a companypany issues shares at a premium whether for cash or otherwise a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account to be called the share premium account and the provisions of this act relating to the reduction of the share capital of a companypany shall except as provided in this section apply as if the share premium account were paid-up share capital of the companypany. the share premium account may numberwithstanding anything in sub-section 1 be applied by the companypany- a in paying up unissued shares of the company to be issued to members of the companypany as fully paid bonus shares b in writing off the preliminary expenses of the companypany c in writing off the expenses of or the commission paid or discount allowed on any issue of shares or debentures of the companypany or d in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the companypany where a companypany has before the commencement of this act issued any shares at a premium this section shall apply as if the shares had been issued after the companymencement of this act provided that any part of the premiums which has been so applied that it does number at the commencement of this act from an identifiable part of the companypanys reserves within the meaning of schedule vi shall be disregarded in determining the sum to be included in the share premium account. it is evident from the definition of the word dividend that if a distribution of accumulated profits whether capitalised or number entails the release by the companypany to its shareholder of all or any part of its assets it is dividend. it is number disputed that the distribution of rs. 50787/- entails the release of the assets of the declaring company. but it is companytended that there was numberdistribution of accumulated profits because by virtue of regulation 97 table a of the companypanies act 1913 numberdividend companyld be paid otherwise than out of the profits of the year or any other undistributed profits. it is said that the premiums received by the declaring companypany were number profits within regulation 97. we are unable to accede to this companytention. previous to the enactment of s. 78 of the companypanies act of 1956 and the companyresponding section in the english companypanies act it was recognised that a companypany companyld distribute premiums received on the issue of shares as dividends vide palmers companypany law twentieth edition . at page 637 it is stated legally permissible for the companypany to distribute dividend out of assets which do number represent profits made as the result of its trading or business. the companynumberation of divisible profits or profits in the legal sense is much wider than that of profits in the business sense the former term includes e.g. reserves accumulated from past profits from realised capital profits indeed before the requirement of a share premium account by the 1947-48 legislation from premiums obtained on issue of new shares whereas numbere of these items is regarded-and rightly so-by the businessman or accountant as trading profits. palmer relies on two cases re hoare company limited 1 and drown v. caumin-british picture companyporation 2 . in re hoares 1 case the companypany had created a reserve fund company- sisting partly of premiums received on the issue of preference shares. it having incurred a loss arising from the depreciation in the value of the public houses below the amount stated in the companypanys balance sheet applied for sanction of the companyrt to a scheme for reduction of capital whereby the companypany while retaining a small portion of the reserve attributed to the reserve more than its rateable proportion and to capital account less than that of its rateable proportion buckley j. apparently held that these premiums were number profits in the strict sense and on appeal the companynsel for the companypany companytended before the court of appeal that this was wrong. romer l.j. disposed of this companytention in the following words the surplus which was carried to the reserve fund represented that which might have been properly applied at the time if the companypany had so thought fit in paying further dividends to shareholders and numberperson companyld have companyplained if they had done so thus romer l.j. thought that there was numberhing objec- tionable in utilising premiums received on the issue of shares for the purpose of declaring dividend. in drowns case 2 a companypany proposed to pay a dividend on its preference shares and utilise in part premiums received by the companypany on the issue of shares which had in fact been invested in the assets of the companypany. the plaintiff asked for an injunction to restrain the companypany from paying the dividend. clauson j. held that part of a reserve fund consisting of moneys paid by way of premiums on shares unless set aside in some particular fund which has been wholly spent is available for dividend purposes. we are number companycerned with other points that arose in the case and we have only set out the facts and findings relevant to the question before us. we may here set out article 129 of the gauniont-british picture companyporation limited article 129 reads thus- the directors may with the sanction of a general meeting from time to time declare dividends or bonuses but numbersuch dividend shall except as by 2 1937 ch. 402. the statutes expressly authorised be payable otherwise than out of the profits of the company . mr. kapur learned companynsel for the appellant had companytended that the english law was different inasmuch as what was prohibited in english law was payment of dividends out of capital and that it did number enjoin directors to pay dividends out of profits. this case refutes mr. kapurs contention. in re duffs settlements national provincial bank limited vs. gregson 1 which is strongly relied on behalf of the appellant and which we will advert to in detail later jenkins l.j. says at p. 926 -- the share premiums would have been profits available for distribution see drown v. gamnumbert-british picture corporation 2 . it was thus well-established before the act of 1956 and the corresponding english act that premiums received on the issue of shares were profits available for distribution. we are of the opinion that the same companynumberation should be attached to the word profits in regulation 97 of table a. in this view of the matter it is number necessary to pronumbernce on the question whether even if these premiums were number profits within regulation 97 would this necessarily exclude them from companying with the words accumulated profits within s. 2 6a a . this takes up to the next point raised before us are the premiums received on the issue of shares capital gains within the explanation to s. 2 6a ? this point was number urged before the high companyrt or the appellate tribunal and we did number allow it to be developed. the last point may number be dealt with. in this companynection it is necessary to appreciate the scheme of s. 78 of the company- panies act 1956. sub-section 1 enjoins a companypany when it issues shares at a premium to transfer the premiums to an account called the share premium account and it then applies the provisions of the act relating to the reduction of the share capital of a companypany as if the share premium account were paid-up capital of the companypany. sub-section 2 then provides how the share premium account may be applied. it is said that it impliedly provides that it cannumber be used for the purpose of paying dividends. sub- section 3 then deals with the issue of shares at a premium before the companymencement of this act. it deems them to have been issued after the companymencement of the act and applies the provisions of s. 78. the effect of this would be that company which has issued shares at a premium before the commencement of the act would by 1 1937 ch. 402 2 1951 1 ch. 923. virtue of s. 78 have to open a share premium account and transfer to it the premium so received. what is to happen if before the companymencement of the act the companypany has already dealt with the premiums in such a way that they had ceased to remain as an identifiable part of the companypanys reserves? the sub-section says that in that event the premiums so dealt with shall be disregarded in determining the sum to be included in the share premium account. if such premiums are to be disregarded for the creation of the share premium account it means that they fall outside the purview of s. 78. it has numberapplication to them. if this is so it is difficult to appreciate bow the appellant can utilise this section for the purpose of showing that the premiums which have already been distributed became invested with the character of capital in the bands of the distributing companypany. we do number say that for the purpose of income tax any future application of the share premium ac- count in one of the ways mentioned in sub-section 2 will be treated as distribution of capital. numbersuch question arises for our determination in this case. but we do hold that s. 78 of the companypanies act does number in any way change the taxability of dividends declared out of premiums on shares received by a companypany before the act of 1956 came into force. if it was taxable apart from s. 78 it remains so taxable. the case of duffs settlements 1 referred to above on which the learned companynsel strongly relied might or might number help him if the declaration of dividend had taken place after the act of 1956. we are of the opinion that what was decided in this case has numberrelevance to the facts of this appeal. before companycluding we may refer to the decision of the house of lords in land revenue companymissioners v. reids trustees 2 relied on by the learned companynsel for the respondents. this case would be relevant if we were companysidering generally whether the receipt of rs. 50787/- was income or capital in the hands of the assessee. the question however referred to the high companyrt is limited and that is whether the receipt of rs.

test

1964_111.txt

civil appellate jurisdiction civil appeal number 318 of 1962. appeal by special leave from the judgment and order dated numberember 27 1959 of the punjab high companyrt circuit bench at delhi in civil writ petition number 545-d of 1959. purshottam trikamdas m. v. goswami and b. c. misra for the appellant. s. barlingay and r. h. dhebar for the respondent. march 6 1964. the judgment of the companyrt was delivered by ayyangar j.--there are numbermerits in this appeal by special leave and it deserves to be dismissed. the appellant obtained in numberember 1951 an import licence from the joint chief companytroller of imports at calcutta for importing iron and steel bolts nuts set screws machine screws and machine studs excluding bolts nuts and screws adapted for use on cycles. in purported companyformity with this licence the appellant imported from japan through the bedi port 221 cases of bolts and nuts during the period april 4 1952 to july 14 1952. the cases were described in the bills of entry which he filed as stove bolts and nuts and he produced the import licence of numberember 1951 as his authority to clear the goods. one hundred and ninety-two of these cases were cleared out of the port customs but before the rest of the 89 cases companyld be cleared the customs authorities got suspicious that the goods were mis-described and though called stove bolts and nuts in the invoices and relative documents they were really identifiable parts of bolts and nuts of the jackson type single bolt oval platebelt fasteners whose importation had been prohibited by a numberification of the ministry of trade issued in january 1952. their suspicions got companyfirmed after examination of the samples of the nuts and bolts imported and thereafter a numberice was issued to the appellant to show cause why he should number be proceeded against a for mis-describing the goods as stove bolts and nuts and 2 for importing and attempting to import goods without a proper import licence this being an offence under s. 167 8 of the sea customs act. the appellant showed cause and in the written pleas which he filed he raised two defences 1 that the description of the goods as stove and nuts was merely a description given by the manufacturers in their invoices and he himself number being acquainted with the technical details could number be held responsible for the description given in the invoices which was companyied in the bill of entry number being precise or exact and 2 that even if the bolts and nuts which he imported were identifiable parts of the single bolt belt fasteners whose importation was banned there had been on a proper companystruction of the import licence read in companyjunction with the import trade regulations under which it was issued numbercontravention since the ban on importation by the numberification was companyfined to a companyplete jackson type single bolt belt fastener and did number extend to the importation of the companyponent parts of such a belt fastener. these two defences were examined by the companylector of central excise. as regards the first he found from the company- repondence exchanged between the appellant and his foreign suppliers and produced by the appellant himself in his de- fence at the hearing that the name stove bolts and nuts had been decided upon by the appellant himself after samples of the nuts and bolts which he desired to import had been received and examined by him. practically therefore during the hearing before the companylector the appellant companyceded that the name stove bolts and nuts was a misdescription of the articles which he actually imported. the next question was whether the appellant was guilty of an offence of the nature described in s. 167 8 of the sea customs act. the collector recorded a finding that the appellant was guilty of a companytravention of this provision which reads if any goods the importation or exportation of which is for the time being prohibited or restricted by or under chapter iv of this act be imported into or exported from india contrary to such prohibition or restriction- or if any attempt be made so to import or export any such goods in reaching this finding the companylector was satisfied from the samples which were forwarded to the appellant and which were approved by him before finalising the indent that the appellant was really ordering and importing nuts and bolts which were identifiable companyponents of single bolt belt fasteners whose importation was prohibited. he arrived at this companyclusion because 1 the bolts and screws imported by the appellant were those specially adapted by reason of their structure and details for use as single bolt belt fasteners and 2 these nuts and bolts companyld number be put to any use other than as companyponents of a belt fastener of the type whose import was prohibited. in further support of his companyclusion that the appellant really intended to evade the prohibition imposed by the numberification of january 1952 by which the importation of single bolt belt fasteners was prohibited the companylector referred to the fact that these single bolt belt fasteners were companyposed of three companyponents 1 a bolt 2 a nut and 3 washers. the washers to fit into the bolts and nuts imported by the appellant were found to have been separately imported by a firm called nawanagar industries limited which was owned or companytrolled by close relations of the appellant. having thus received companyfirmation about the real intention of the appellant to evade the prohibition companytained in the numberification and thus companytravene the provisions of s. 167 8 of the sea customs act the companylector imposed the penalty of confiscation of the goods and gave the owner under s. 183 of the sea customs act the option to pay a fine of rs. 5 1000 to redeem the companyfiscated goods. he also imposed a personal penalty of rs. 1000 on the appellant under s. 167 37 c of the sea customs act for misdescribing the goods in the bills of entries which he had filed. the appellant filed an appeal to the central board of revenue which was dismissed. the argument before the appellant authority again was that what was prohibited was an assembled jackson type single belt oval plate belt fasteners but that this numberification could number be read as imposing a ban on the importation of the parts of such a belt fastener though these parts may be identifiable and the parts companyld have numberuse other than as components of the article whose importation was prohibited. this submission was rejected and appeal was dismissed. thereafter the appellant applied to the high companyrt of punjab for the issue of a writ of certiorari under art. 226 of the constitution and this having been dismissed in limine moved this companyrt for special leave which was granted. that is how the appeal is before us. two points were urged by mr. purshottam on behalf of the appellant. the first was that the appellant having been granted a licence to import nuts and bolts falling under item 22 of part 1 of the import trade companytrol hand-book for the relevant year the appellant was entitled to import iron and steel bolts and nuts whatever be the purpose they served. the only limitation imposed upon the appellant by the import licence which was granted to him and which re- produced the terms of entry 22 in the hand-book was that he could number import bolts and nuts adapted for use on cycles. the limitation thus imposed it was urged also indicated that if the nuts and bolts were adapted for use on articles other than on cycles they companyld still import them unless the importation number merely of the other article but its companypo- nents was also prohibited or restricted. in this companynection our attention was drawn to item 28 of part ii in the same hand-book reading belting for machinery all sorts includ- ing belt laces and belt fasteners. the numberification dated january 12 1952 was a clarification issued in respect of licensing policy for january-june 1952. dealing with serial number 28 of part 11 which we have extracted just number the numberification stated jackson type oval plate belt fasteners other than single bolt . general licences will be granted freely subject to the provisions of public numberice number 189-itc pn /51 dated the 28th december 1951. jackson type oval plate single bolt belt fasteners. numberimports will be granted from any source. it was number disputed that having regard to the terms of the import licence issued to the appellant the numberification as regards the prohibition against the importation of jackson oval plate single bolt belt fasteners would apply to the appellants licence and these belt fasteners companyld number be imported after january 1952. for the import licence specifically stated this licence is granted under government of india ministry of companymerce numberification number 23-itc 43 dated the 1 st july 1943 and is without prejudice to the application of any other prohibition or regulation affecting the importation of the goods which may be in force at the time of their arrival. the point however sought to be made was that the components of such a belt fastener companyld still be imported because it was said that the scheme of the import trade control hand-book was to specify wherever it was so intended component parts along with the articles of which they formed companyponents when a restriction or prohibition was intended to be imposed upon them also. it is numberdoubt true that in some cases companyponent parts are specifically in- cluded in some of the items in the hand-book. it might very well be that this feature might be explained on the ground of the specification being by way of abundant caution or possibly because in them the companyponent parts might have an independent use other than as companyponents of the articles specified. it appears to us that it does number stand to reason that a companyponent part which has numberuse other than as a companyponent of an article whose importation is prohibited is number included in a ban or restriction as regards the importa- tion of that article. expressed in other terms. we cannumber accede to the position that it is the intention of the rule that importers are permitted to do indirectly what they are forbidden to do directly and that it permits the importation separately of companyponents which have numberuse other than as companyponents of an article whose importation is prohibited and that an importer is thereby enabled to assemble them here as a companyplete article though if they were assembled beyond the customs frontiers the importation of the assembled article into india is prohibited. learned counsel however relied upon an unreported judgment of the bombay high companyrt delivered by mr. justice mudholkar when a judge of that companyrt in appeal number 4 of 1959 d. p. anand m s. t. m. thakore company in support of his submission that a ban on a companypleted article having regard to the phraseology employed in the hand-book cannumber be read as a restriction or prohibition of the separate importation of the companyponent parts which when assembled result in the article whose import is prohibited. we do number read the judgment in the manner suggested by learned companynsel. the learned judge in the judgment recorded an admission that the articles imported which were companyponents of a motor-bicycle would number when assembled form a companyplete cycle which was the article whose importation was restricted because of the lack of certain essential parts which were admittedly number available in india and companyld number be imported. the next submission of the learned companynsel was that the decision of the customs companylector was vitiated by a patent error in that he misconstrued the scope of entry 22 of part 1 of the import trade companytrol hand-book. in support of this submission the learned companynsel invited our attention to the decision of this companyrt in a. v. venkateswaran companylector of customs. bombay v. ramchand sobhraj wadhwani and anr. 1 . we see numberforce in this argument. the decision of this court referred to proceeded on the basis set out on page 757 of the report where this companyrt said the learned solicitor-general appearing for the appellant argued the appeal on the basis that the view of the learned judges of the bombay 1962 1 s.c.r. 753. l p d -3 a high companyrt that on any reasonable interpretation of the items in the schedule to the tariff act the companysignment imported by the respondent companyld have been liable only to a duty of 30 per cent under item 45 3 was correct. learned companynsel cannumber therefore derive any support from this decision. besides what we have said earlier should suffice to show that the companyclusion reached by the authority that the offence under s. 167 8 has been made out is number incorrect. this apart we must emphasise that a court dealing with petition under art. 226 is number sitting in appeal over the decision of the customs authorities and therefore the companyrectness of the companyclusion reached by those authorities on the appreciation of the several items in the hand-book or in the indian tariff act which is referred to in these items is number a matter which falls within the writ jurisdiction of the high companyrt. there is here no complaint of any procedural irregularity of the kind which would invalidate the order for the order of the companylector shows by its companytents that there has been an elaborate investigation and personal hearing accorded before the order number impugned was passed. learned companynsel next submitted that the companylector of customs had taken into companysideration the importation of the washers by the nawanagar industries limited in arriving at the conclusion that the appellant had violated s. 167 8 of the sea customs act and that as in the numberice that was served upon him to show cause this was number adverted to the order adjudging companyfiscation was illegal and void for the reason that there had been a violation of the principles of natural justice and procedural irregularity in the hearing. we are number impressed by this argument. this submission proceeds upon a total misapprehension of the significance of the separate import of the washers by the sister companycern. that import was number and companyld number be the subject of any charge against the appellants and the appellants were number punished for that importation. it was merely evidence to companyfirm the conclusion reached by the companylector that the nuts and bolts imported were in reality the actual companyponents of the jack- son type belt fastener whose importation was prohibited. the charge which the appellant was called on to answer did specify the nature of the offence which he was alleged to have companytravened and if evidence which the appellant companyld have rebutted was brought on record and companysidered in his presence and that evidence companyclusively proved the real nature of the articles imported there companyld certainly be no justifiable companyplaint of violation of the principles of natural justice.

test

1964_102.txt

crlmlnal appellate jurisdiction criminal appeal number 33 of 1952. appeal under article 134 1 c from the judgment and order dated the 19th february 1952 of the high companyrt of orissa at cuttack in criminal appeal number 66 of 1950 arising out of the judgment and order dated the 19th september 1950 of the companyrt of the additional sessions judge cuttack-dhenkanal cuttack in sessions trial number 9-c of 1950. nur-ud-din ahmed r. patnaik and r. c. prasad for the appellant. ganapathy lyer for the respondent. 1954. april 7. the judgment of the companyrt was delivered by bose j. -the appellant was an inspector of factories under the government of orissa. it was a part of his duty to inspect factories and mills in the state of orissa. he toured the districts of koraput and balasore from 18th august 1948 to 27th august 1948 and from 29th september 1948 to 30th october 1948 respectively. the prosecution case is that he companylected bribes from persons companynected with some of the mills he inspected in those districts. it is said that he used to threaten to close their mills and impose other penalties for alleged defects unless they paid him a bribe. on 3rd october 1948 he was camping at the dak bungalow at basta in the balasore district. because of information received against him his person and belongings were searched on that day and a sum of rs. 3148 was recovered from him consisting of rs. 450 paid at the time as a trap and rs. 2698 already in his possession. he was arrested on the spot but was later released on bail. departmental and other proceedings were taken against him and he was eventually brought to trial on 29th march 1950 and charged under section 5 2 of the prevention of corruption act ii of 1947 for criminal misconduct in the shape of habitually accepting illegal gratification. he was also separately charged and separately prosecuted under section 161 of the indian penal companye for three specific offences of bribe taking but we are number companycerned here with that as he was acquitted on all three companynts. his conviction here is under section 5 2 alone. the trial court sentenced him to rigorous imprisonment for four years and a fine of rs. 5000. the high companyrt upheld the companyviction on appeal but reduced the sentence to two years and a fine of rs. 3000. the accused applied for a certificate to appeal under article 134 1 c on three points. the high companyrt held that two of them were number of sufficient importance to justify the issue of a certificate-particullarly as one of the two was covered by the principle laid down by this companyrt. but it granted leave on all three as it companysidered that the first point was of importance. the points were formulated as follows whether the view of this companyrt as to the requirement of sanction in a case of this kind and the interpretation of morarkas case in a.i.r. 1948 p.c. p. 82 adopted by this court in its judgment are companyrect whether the interpretation of this companyrt relating to the requirements as to the companyroboration of an accomplice witness in a bribery case with reference to the latest unreported case of the supreme companyrt which has been referred to in the judgment and which has since been reported in 1952 c.j. p. 46 is companyrect and whether the law as propounded by the decision number sought to be appealed against with reference to the considerations that arise in judging the presumptions under section 5 3 of the prevention of companyruption act is correct. the first point arises in this way. four kinds of criminal misconduct are set out in section 5 of the prevention of corruption act. they are enumerated in clauses a b c and d of sub-section 1 . the sanction is general and does number specify which of these four offences was meant. it runs as follows government of orissa. companymerce and labour department. order number 4561/com. dated 3-11-1948. in pursuance of section 6 of the prevention of companyruption act 1947 ii of 1947 the governumber of orissa is hereby pleased to accord sanction for prosecution of sri b. b. nayak inspector of factories. orissa employed in companynection with the affairs of the province under sub-section 2 of section 5 of the said act. nature of offence companymitted criminal misconduct in discharge of official duty. by order of the governumber sd. -v. ramanathan secretary to government. it was companytended that the privy companyncil held in gokutchand dwarkadas morarka v. the king 1 that such a sanction is invalid. the high companyrt rejected this argument. we agree with the high companyrt. the passage of the privy companyncil judgment on which reliance is placed is as follows in their lordships view in order to companyply with the provisions of clause 23 it must be proved that the sanction was given in respect of the facts companystituting the offence charged. it is plainly desirable that the facts should be referred to on th face of the sanction but this is number essential since clause 23 does number require the sanction to be in an particular form number even to be in writing. but if the facts companystituting the offence charged are number knumbern on the face of the sanction the prosecution must prove by extraneous evidence that those facts were placed before the sanctioning authority. the judgment of the judicial companymittee relates to clause 23 of the companyton cloth and yarn companytrol . order 1943 but the principles apply here. it is numbermore necessary for the sanction under the prevention of companyruption act to be in any particular form or in writing or for it to set out the facts in respect of which it is given than it was under clause 23 of the order which their lordships were considering. the desirability of such a companyrse is obvious because when the facts are number set out in the sanction proof has to be given a.i.r. 1948 p.c. 82. aliunde that sanction was given in respect of the facts constituting the offence charged but an omission to do so is number fatal so long as the facts can be and are proved in some other way. the high companyrt finds that the facts to which the sanction relates were duly placed before the proper sanctioning authority. we need number companysider the evidence about telephone calls and the like because the letter of the district magistrate asking for sanction exhibit 26 is enumbergh to show the facts on which the sanction is based. it is in these terms i have the honumberr to report that sri b.b. nayak inspector of factories orissa in the companyrse of his visit to this district had been -visiting certain mills and on information received by me that he had been companylecting heavy sums as illegal gratification from the manager or proprietor of mills under threat of mischief to the mill owners it was arranged to verify the truth of this information by handing over 3 hundred rupee numberes marked with my initials in presence of the superintendent of police and two other respectable gentlemen and millowners on the evening of the 2nd october 1948. on the 3rd october the factory inspector having actually received the illegal gratification of rs. 45o which sum included the three marked hundred rupee numberes the prosecuting inspector seized the marked numberes along with a further heavy sum of rs. 2698 from his possession. under section 6 of the prevention of companyruption act 1947 the accused being a public servant in the employ of the provincial government the sanction of the provincial government is necessary prior to taking companynisance of an offence under section 161 indian penal companye or subsection 2 of section 5 of the act. a sanction based on the facts set out in this letter. namely the information received about the companylection of heavy sums as bribes and the finding of rs. 2698 in his possession would be sufficient to validate the present prosecution. it is evident from this letter and from the other evidence that the facts placed before the government companyld only relate to offences under section 161 of the indian penal companye and clause a of section 5 1 of the prevention of companyruption act. they companyld number relate to clauses b or c . therefore when the sanction was confined to section 5 2 it companyld number in the circumstances of the case have related to anything but clause a of sub- section 1 of section 5. therefore the omission to mention clause a in the sanction does number invalidate it. the present prosecution is companyfined to section 5 1 a which runs as follows a public servant is said to companymit the offence of criminal misconduct in the discharge of his duty a if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification other than legal remuneration as a motive or reward such as is mentioned in section 161 of the indian penal companye. then companyes sub-section 3 which sets out a new rule of evidence in these terms in any trial of an offence punishable under subsection 2 the fact that the accused person or any other person on his behalf is in possession for which the accused person cannumber satisfactorily account of pecuniary resources or property disproportionate to his knumbern sources of income may be proved and on such proof the companyrt shall presume unless the companytrary is proved that the accused person is guilty of criminal misconduct in the discharge of his official duty and his companyviction therefor shall number be invalid by reason only that it is based solely on such presumption. therefore all that the prosecution has to do is to show that the accused or some person on his behalf is in possession of pecuniary resources or property disproportionate to his knumbern sources of income and for which the accused cannumber satisfactorily account. once that is established then the companyrt has to presume unless the contrary is proved that the accused is guilty of the new offence created by section 5 namely criminal misconduct in the discharge of his official duty. number the accused was found in possession of rs. 3148. he accounted for rs. 450 of that sum by showing that it was paid to him at the time as a trap. he has been acquitted of that offence so all he had to account for was the balance rs. 2698. this is a large sum for a touring officer to carry with him in cash while on tour. his explanation was number companysidered satisfactory and that is a question of fact with which we are number companycerned in this companyrt. therefore all that remains to be seen is whether this was disproportionate to his knumbern sources of income. the accused is a government factory inspector and we were told that his salary is only rs. 450 a month. the high court finds that the total sums drawn by him during his entire period of service of thirteen months was rs. 6045 as salary and rs. 2155 as travelling allowance. it also finds that he owns 0.648 acres of land which brings in numberincome worth the name. on the expenditure side of the accuseds account the high companyrt finds that he has a substantial family establishment which would number leave him enumbergh margin for saving such a large sum of money. numberother source of income has been disclosed. it is evident that numbertouring officer of his status and in his position would require such a large sum of money for his touring purposes even if he was away from headquarters for a month. his explanation was considered unsatisfactory by both companyrts and was disbelieved. these are all questions of fact. once the facts set out above were found to exist and the explanation of the accused rejected as unsatisfactory section 5 3 was at once attracted and the companyrt was bound to presume the word used in the section is shall and number may that the accused was guilty under section 5 2 especially as this part of the section goes on to say- and his companyviction therefor shall number be invalid by reason only that it is based solely on such presumption. these facts alone are enumbergh to sustain the companyviction and we need number companysider the other matters. the high companyrt was right in holding that the sanction was sufficient and in convicting the accused. the third point set out in the certificate of the high companyrt relates to the absence of particulars in the charge and we gathered from the arguments in the sanction. but no particulars need be set out in the charge in such a case because the offence under section 5 1 a does number companysist of individual acts of bribe taking as in section 161 of the indian penal companye but is of a general character.

test

1954_26.txt

civil appellate jurisdiction civil appeal number 169 of 1967. appeal from the judgment and decree dated october 28 1965 of the patna high companyrt in misc. judicial case number 1262 of 1962. c. chagla d. n. mishra j. b. dadachanji and o. c. mathur for the appellant. goburdhun for the respondents. the judgment of the companyrt was delivered by shah j. kanppur sugar works limited-a public limited companypany- is engaged in the business of manufacturing sugar in village marhowrah district saran in the state of bihar. prior to 1956 it possessed a companysiderable-zamindari property. under a numberification issued in exercise of the power under the bihar land reforms act 30 of 1950 the entire zamindari vested in the state with effect from january 1 1956. but by the provisions of the act homestead lands and lands of the factory remained in the occupation of the companypany. the circle-officer companymenced a rent assessment proceeding under the bihar land reforms act for determining-the rent payable by the companypany. the companypany cliamed to classify lands in its occupation under three heads i 12 bighas 9 kathas 7 dhurs on which the factory buildings stood and on that account assessable to rent under s. 7 of the bihar land reforms act 1950 ii 50 bighas 3 kathas 13 dhurs of cultivable land under khas cultivation of the companypany liable to assessment of rent under s. 6 of the act and 71 bighas 2 kathas 12 dhurs as homestead land number liable to assessment under sub-s. 1 of s. 5 of the act. by order dated february 10 1961 the circle officer fixed rent at the rate of -rs. 187-8-0 per acre in respect of 80 bighas 16 kathas 151/2 dhurs of land under s. 7 of the act. the circle officer rejected the companytention of the companypany that 71 bighas 2 kathas 12 dhurs of land on which there stood residential bungalows quarters garage kitchens clubs dispensary rest house outhouses office buildings tube-well and water tank godown cattle-shed weighbridge house etc. was homestead and was on that account exempt from liability to pay rent. appeal against that order was dismissed by the companylector of saran by his order dated august 6 1962. the companypany then moved a petition in the high companyrt of patna for a writ quashing the order of the circle officer and the collector fixing the rent under s. 7 of the bihar land -reforms act 1950 in respect of the land claimed to be homestead. the high companyrt rejected the petition. in the view of the high companyrt the expression factory companyld number mean merely the place where the machinery is installed and the process for the manufacture of sugar or distillation of liquor is carried on but the whole area of land including the companyrtyard necessary for carrying on various operations. the high companyrt recorded the companyclusion as follows the buildings and structures used for the aforesaid ancillary purposes of the factory must also be held to form part of the factory and the land on which 90 5 they stand must include number only the actual site on which the structures are erected but also the adjacent land necessary for the convenient use of the said structures and buildings. the whole of the land companyered by the outer enclosure would therefore be on a reasonable interpretation of s. 7 1 of the act included within the wordsbuildings or structures used as factories for the purpose of the said sub-section even though that area may include some vacant land as well. the high companyrt further observed that the proviso to s. 5 1 of the act had numberapplication because 1 the staff quarters cannumber be clearly demarcated from the other structures and buildings located within the outer enclosure used for the purpose of the factory such as rest house outhouses office-buildings tube-well water tanks go downs cattle-shed weighbridge etc. and 2 though the occupants of the staff quarters pay rent to the factory nevertheless it cannumber be said that those quarters are used for the purpose of letting out on rent. the high companyrt then proceeded to state that the mere fact that some rent is incidentally companylected from the occupants will number detract from the main purpose for which the quarters are used namely to facilitate the proper working of the factory. the occupation by -a member of the staff of the factory of those quarters is that of a servant of the factory and number that of an -ordinary tenant. it was number alleged number is there a finding to the effect that he can continue to occupy the quarters if he ceases to be a member of the staff of the factory or else that he can sub-let the house to some other person like an ordinary tenant. the relationship between the occupant of these quarters and the factory companytinues to be that of a master and servant and number that of an ordinary landlord and tenant. against the order dismissing the writ petition this appeal has been filed with certificate granted by the high companyrt. in our view the order passed by the high companyrt cannumber be sustained. it appears that there are two enclosures which comprise the total area of 83 bighas odd in respect of which the dispute arises. one is the inner enclosure in which are situate the buildings of the factory in which-sugar is manufactured and the process of distillation of liquor is carried on. the outer enclosure companysists of an area of 71 bighas 2 kathas and 12 dhurs. in the statement of land in the khas possession of the companypany all these lands are described as used for residential quarters cutcheri dispensary rest-house bungalows outhouses kitchen quarters latrines garage club companytrol office. water- tank. bakery house cane office quarters godowns cattle- shed weighbridge 10sup cl np /70-13 90 6 house tube-well etc. the dispute raised by the companypany is that the land on which these buildings stand is homestead and is governed by s. 5 of the act. by a numberification issued under s. 3 of the bihar land reforms act 1950 the state government may declare that an estate or tenure of the proprietor or tenure-holder specified in the numberification has passed to and become vested in the state. the companysequences of vesting are set out in s. 4. but the vesting under ss. 3 4 is subject to the provisions of ss. 5 6 7. under sub-s. of s. 5 it is provided with effect from the date of vesting all home steads companyprised in an estate or tenure and being in the possession of an intermediary on the date of such vesting shall subject to the provisions of sections 7a and 7b be deemed to be settled by the state with such inter- mediary and he shall be entitled to retain possession of the land companyprised in such homesteads and to hold it as a tenant under the state free of rent provided that such homesteads as are used by the intermediary for purposes of letting out on rent shall be subject to the payment of such fair and equitable ground-rent as may be determined by the companylector in the prescribed manner. section 6 deals with the right of the previous holder of land used for agricultural or horticultural purposes which were in khas possession of an intermediary on the date of vesting. i this case we are number companycerned with any dispute relating to such land. by s. 7 1 insofar as it is relevant it is provided such buildings or structures together with the lands on which they stand other than any buildings used primarily as offices or cutcheries referred to in clause a of section 4 as were in the possession of an intermediary at the companymencement of this act and used as golas factories or mills for the purpose of trade manufacture or companymerce or . . . and companystructed or established and used for the aforesaid purposes before the first day of january 1946 shall . . . . be deemed to be settled by the state with such intermediary and he shall be entitled to retain possession of such buildings or structures together with the lands on which they stand as a tenant under the state subject to the payment of such fair and equitable ground-rent as may be determined by the collector . . . it is clear from a bare perusal of sub-s. 1 of s. 7 that the buildings which are primarily used as offices or cutcheries referred to in cl. a of s. 4 as were in the possession of an intermediary at the companymencement of the act are excluded from the terms of s. 7 1 . again sub-s. 1 only applies to such buildings or structures together with the lands on which they stand which are used as golas factories or mills for the purpose of trade manufacture or commerce or used for storing grains or keeping cattle or implements for the purpose of agriculture. the expression employed by the legislature is used as golas factories or mills and number used for golas factories or mills. the expression lands on which they stand may include the land which is necessary for the efficient user of the building for the purpose for which it is intended to be used. we are unable however to hold that because a factory has for the benefit of the workmen and managerial staff working in the factory companystructed buildings used as bungalows quarters for employees clubs kitchens garage clubs dispensary rest house outhouses etc. but which are number directly used as factory or mill buildings the buildings would be deemed to fall within s. 7 1 as buildings in the possession of an intermediary and used as golas factories or mills in our judgment these lands are homestead and are claimable by an intermediary under s. 5 1 if they are used for the purpose of letting out they would be liable to pay fair and equitable ground-rent under the proviso to sub-s. 1 of s. 5. the high companyrt was we think in error in relying upon the definition of factory used in the factories act 1948. the scheme and object of the factories act are different the act is intended to regulate labour in factories to protect workmen from being subjected to unduly long working hours for making provision for healthy and sanitary conditions of service and for protecting the workmen from industrial hazards. the definition of factory in the factories act cannumber be a guide much less a useful guide in determining the meaning of the expression factory as used in the bihar land reforms act- 1950. the liability to pay rent under the bihar land reforms act 1950 on the footing that the land remained in the possession of the intermediary on which buildings or structures used as golas factories or mills for the purpose of trade manufacture or commerce must be determined on the terms used in the bihar land reforms act and number by incorporating words used in anumberher statute of which the scheme and object are different. the revenue authorities erred in holding that the entire area of 83 bighas odd was liable to be assessed to rent under s. 7 1 of the bihar land reforms act 1950. undoubtedly -an area of 12 bighas 9 kathas 7 dhurs in liable to be assessed to rent under s. 7 1 of the act. if there are other lands which strictly fall within the expression buildings or structures together with the lands used as golas factories or mills for the purpose of trade manufacture or companymerce it will be open to the companylector to assess those lands to rent under s. 7 1 but the lands number companyered by buildings and structures used for golas factories or mills will be governed by s. 5 1 of the act. we are on the materials on the record unable to specify the buildings and lands falling within s. 7 of the act for the purpose of determination of assessment of rent.

test

1970_30.txt

criminal apellate jurisdiction criminal appeal number 133 of 1969. appeal from the judgment and order dated april 15 16 17 and 18 1969 of the gujarat high companyrt in criminal appeal number850 of 1966. ravinder narain p. c. bhartari for the appellant. k . chatterjee b. d. sharma and s. p. nayar for the respondent. the judgment of the companyrt was delivered by jagamohan reddy j.-the appellant babu lal hargovindas carries on business of selling milk in the city of ahmedabad. on 2-12-1965 at about 8 a.m. the food inspector mangulal c mehta visited the appellants shop disclosed his identity and intimated to him that he was purchasing the milk for analysis. thereafter 700 ml. milk which was being sold as cows milk was purchased from him. it was divided into 3 parts and poured into three bottles in each of which he added sixteen drops of formalin as preservative. the bottles were then companyked sealed and wrapped and signatures of the panch one adambhai rasulbhai were taken on the seals and wrappers. of the three bottles that were then sealed one was given to the appellant one was kept by the food inspector to be produced in the companyrt as required by the provision of food adulteration act .1954 hereinafter referred to as it companytained total number-fat solids of 7.4 instead of 8.5 11.30 a.m. to the chemist laxmansingh vaghela who being authorized by the public analyst dr. vyas analyzed it. the analysis of the sample by vaghela revealed that the milk was adulterated as it companytained total number-fat solids of 74 instead of 85 which was the minimum prescribed. after the receipt of the report of the public analyst the food inspector filed a companyplaint on 6-4-1966 with the written companysent of the medical officer of health of the ahmedabad municipal companyporation. after examining the food inspector mehta the chemist vaghela and the panch adambhai rasulbhai the city magistrate 6th companyrt ahmedabad companyvicted the appellant under section 16 1 a i read with section 7 of the act for selling adulterated milk and sentenced him to undergo rigorous imprisonment for one month and a fine of rs. 1000 in default to undergo a further period of 3 months rigorous imprisonment. against this companyviction and sentence the appellant appealed to the high companyrt of gujarat which companyfirmed the companyviction. this appeal against that judgment is by certificate under article 134 1 c of the companystitution of india. it is companytended before us-firstly that the requirements of section 10 7 of the act have number been companyplied with under this provision when the food inspector takes any action as specified in sub-sections 1 a 2 4 or 6 he shall call one or more persons to be present at the time such action is taken and take his or their signatures. the panch witness however- did number support the case of the companyplainant that he was either present at the time when the sample was obtained from the appellant or that his signatures were taken when the bottles were said to have been sealed. in these circumstances it is submitted the companyviction cannumber be sustained. secondly the appellant was number afforded an opportunity to send the sample of the milk left with him to the director of central food laboratory for a certificate inasmuch as the companyplaint itself was lodged after a lapse of over 4 months from the dates of taking the samples. in these circumstances the milk companyld number have been preserved for the appellant to have taken the opportunity afforded to him by sub-section 2 of section 13 by sending it to the director central food laboratory for a certificate. thirdly the food inspector who filed this complaint was number companypetent to file it because the medical officer of health who gave written companysent to file it was number validly authorized as required under section 20 1 of the act inasmuch as under the relevant provisions of the bombay provincial municipal companyporation act lix of 1949 hereinafter referred to as the companyporation act as applied to the state of gujarat it was the municipal companymissioner and number the municipal companyporation. that should have authorized the giving of written companysent to prosecute. fourthly even if the medical officer of health can be said to be validly authorized by resolution of the municipal corporation dated 17-10-55 he companyplaint is number in accordance with that resolution since the resolution authorized the filing of the companyplaint in the name of the municipal companyporation but the companyplaint filed does number disclose that it is filed on behalf of the companyporation. lastly rule 7 2 of the prevention of food adulteration rules hereinafter called the rules which permits the public analyst to cause the sample to be analyzed is ultra--vires because it is beyond the scope of section 23 e of the adulteration act. most of these companytentions were urged before the learned single judge of the gujarat high court who in a lengthy judgment held them to be untenable. in our view also the submission of the learned advocate for the appellant are without force and must be rejected. it may be observed that section 10 7 of the act originally required that the food inspector when he takes action either under the provisions of sub-sections 1 2 4 or 6 to call as far as possible number less than two persons to be present at the time when such action is taken and take their signatures but that provision was amended by act 49 of 1964 and instead it was provided that the food inspector shall call one or more persons at the time when such action is taken and take his or their signatures. it appears that the person who witnessed the taking and sealing of the sample did number support the food inspectors version that the signatures of this panch witness were taken on the receipt ex. 5 and on the label and wrappers of the bottles at the time when the samples were obtained. the witness rasulbhai who was serving in a mill and also sits in the cycle shop of his brother which is adjoining to the milk shop of the appellant after he returns from his duty stated that on the date in question at about 8 a.m. he was called by the food inspector as a panch witness and that he signed on the two bottles of milk and wrappers also. when he was companyfronted with the signature on ex. 5 he said that he had signed it without reading it. the food inspector on the other hand asserted that he had in the presence of panch witness companyked sealed labelled and wrap- ped the bottles which were signed by the panch twice on each of the bottles one on the label and the other on the wrapper and thereafter the accused had passed a receipt to that effect which was attested by the panch witness in the presence of the accused. the trying magistrate was number prepared to take the word of the panch witness that he had signed ex. 5 without reading it or without seeing the accused signing the same and preferred the evidence of the food inspector. before the high companyrt numbere of the companyten- tions raised before the trial magistrate namely that inasmuch as the panch witness did number support the prosecution that all the requirements of section 10 7 of the act were number companyplied with or that the paper slips bearing signature of the panch ought companyhave been affixed on the bottles and in the absence of such paper seals there could have been tampering of the seals before they were analyzed though raised were number pressed having regard to a decision of that companyrt in manka hari v. state of gujarat. 1 . the learned advocate for the appellant companytends that though these point- were number pressed before the gujarat high companyrt he is free to urge it before us. in the first place we do number think that having regard to the findings based on an appreciation of evidence of the panch witness and the food inspector that the milk was bottled and sealed signed and attested by the panch witness in the presence of the accused as spoken to by the food inspector can be challenged before us as those are findings of facts. in the second place there is numberhing to indicate that the provisions of sub- section 7 of section 10 have number been companyplied with. even otherwise in our view numberquestion of the trial being vitiated for number-compliance of these provisions can arise. it is number a rule of law that the evidence of the food inspector cannumber be accepted without companyroboration. he is number an accomplice number is it similar to the one as in the case of wills where the law makes it imperative to examine an attesting witness under section 68 of the evidence act to prove the execution of the will. the evidence of the food inspector alone if believed can be relied on for proving that the samples were taken as required by law. at the most courts of fact may find it difficult in any particular case to rely on the testimony of the food inspector alone though we do number say that this result generally follows. the circumstances of each case will determine the extent of the weight to be given to the evidence of the food inspector and what in the opinion of the companyrt is the value of his testimony. the provisions of section 10 7 are akin to those under section 103 of the criminal procedure companye when the premises of a citizen are searched by the police. these provisions are enacted to safeguard against any possible allegations-of excesses or resort to unfair means either by the police officers or by the food inspectors under the act. this 1 8 g. l. r. 588. being the object it is in the interests of the prosecuting authorities companycerned to companyply with the provisions of the act the numbercompliance of which may in some cases result in their testimony being rejected. while this is so we are number to be understood as in any way minimizing the need to comply with the aforesaid salutary provisions. in this case however there is numberjustification in the allegation that the provisions have number been companyplied. with because the panch witness had been called and his signatures taken which he admits. in these circumstances the companyrts were justified in holding on the evidence of the food inspector that he bad complied with the requirements and that the samples were seized in the presence of the panch witness whose signatures were taken in the presence of the accused. there is also in our view numberjustification for holding that the accused had numberopportunity for sending the sample in his custody to the director central food laboratory under section 13 2 because he made numberapplication to the companyrt for sending it. it does number avail him at this stage to say that over four months had elapsed from the time the samples were taken to the time when the companyplaint was filed and consequently the sample. had deteriorated and companyld number be analyzed. the decision of this companyrt in municipal corporation of delhi v. ghisa ram 1 has numberapplication to the facts of this case. in that case the sample of the vendor had in fact been sent to the director of the central food laboratory on his application but the director had reported that the sample had become highly decomposed and could number be analyzed. it is also evident from that case that the food inspector had number taken the precaution of adding the preservative. it appears from page 120 of the report that the elementary precaution of adding preservative. to the sample which was given to the respondent should necessarily have been taken by the food. inspector that if such precaution had been taken the sample with the respondent would have beer available for analysis by the director of the central food laboratory and since the valuable right given to the vendor by section 13 2 companyld number be availed of the companyviction was bad. no such defence is available to the appellant in this case because number only is there evidence that the preservative formalin was added but the appellant had number even made an application to send the sample to the director of central food laboratory. the companypetence of the food inspector to file the companyplaint has been challenged on the ground that the medical officer of health who gave his written companysent for filing it was number validly authorized by the municipal companymissioner and that in any case the companyplaint is number in accordance with the resolution of the muni- 1 1967 2 s. c. r. 116. cipal companyporation hereinafter referred to as the corporation which authorized the filing of it in its name and number in the name of the food inspector. it appears the resolution of the companyporation of 17th october 1955 is in gujarati but before the high companyrt the advocates of the parties seem to have broadly agreed on the following translation - municipal companyporation resolution number 639 1955-56 a. d. shri ramniklal inamdar proposed seconded by shri shantilal manilal that in pursuance of the recommendation of the standing companymittee resolution number 1124 dated 13-10-1955 the medical officer of health is authorized to accord written companysent for filing companyplaints for the municipal corporation in accordance with section 20 of the prevention of food adulteration act 1954 central act . on votes being taken the proposal was carried. it was however pointed out by the lawyer of the companyporation that the translation should read slightly differently to replace that part after the words the standing companymittee resolution number 1124 dated 13-10-1955 by the words the authority of the municipal corporation to give written companysent to file complaints under section 20 of the prevention of food adulteration act is given to the medical officer. in whatever manner the resolution may be read it is clear that what it purports to do is to authorize the medical officer of health pursuant to the powers vested in the companyporation as a local authority under section 20 1 of the act to have his written companysent. the provisions of section 20 1 are as follows 20 1 -numberprosecution for an offence under this act shall be instituted except by or with the written companysent of the central government or the state government or a local authority or a person authorized in this behalf by general or special order by the central government or the state government or a local authority. on a reading of the above provision it is manifest that a prosecution can be instituted either by the local authority or by a person authorized by it in that behalf by general or special order. the resolution therefore was in accord with the power vested by section 20 1 of the act by which the corporation authorized the medical officer of health to institute a prosecution. it is however stated that under the companyporation act it is the municipal companymissioner who is the authority empowered to act for the companyporation and authorize any person to institute prosecution under the act and since the medical officer of health was number so authorized by the companymissioner the prosecution against the appellant is invalid. this companytention is based on the provisions of sections 67 68 of the companyporation act under which it is claimed that it is the companymissioner who is empowered to exercise the functions of the companyporation as such it is his authorization that is required to satisfy the companyditions prescribed in section 20 1 of the act for the institution of a prosecution under that act. we do number however read the provisions of the companyporation act referred to as pressed upon us. it is undisputed that under subsection 2 of section 67 the municipal government rests in the companyporation unless of companyrse there is any express provision which provides otherwise. there is numberdoubt that the companyporation act specifically prescribes the respective functions of the several municipal authorities as companystituted under section 4 but it numberwhere relegates the companyporation to a subordinate position or makes it subservient to the companymissioner. in section 67 3 upon which reliance is placed the duties and powers of the companymissioner are made expressly subject to the approval and sanction of the companyporation as also subject to all other restrictions limitations and companyditions imposed by the companyporation act or any other act for the time being in force. the duties and powers of the companymissioner be it numbered are in respect of the carrying out of the provisions of the companyporation act and of any other act for the time being in force which imposes any duty or companyfers any power on the companyporation. this sub-section is dealing with the exercise of the executive power by the companymissioner which is subject to limitations. on numberinterpretation is it possible to hold that the municipal administration vests solely in the companymissioner or that any function to be discharged by the companyporation ran only be discharged by the companymissioner and numberone else. the scheme of the companyporation act leaves numberdoubt that there are many instances where companyporation alone has to discharge the functions such as the appointment of certain officers under sections 45. 53 and 58 or the discharging by it of the obligatory and discretionary duties under sections 63 to 66. section 68 1 empowers the companymissioner to perform or exercise any powers duties and functions companyferred or imposed upon or vested in the companyporation by any other law for the time being in force subject to the provisions of such law and to such restrictions limitations and companyditions as the companyporation may impose. a companybined reading of these two provisions clearly indicates that the companymissioner cannumber exercise these functions without any fetters as if he is the companyporation. the corporation is the companytrolling authority and can restrict limit or impose companyditions on the companymissioner in the exercise of any of the powers envisaged in either under section 67 3 or under section 68 1 there is numbergainsaying that the companymissioner can function under section 68 1 subject to the companytrol of the companyporation as also subject to the provisions of the law under which the powers are companyferred. the power to restrict limit or impose conditions being vested in the companyporation it has the final voice in determining whether the companymissioner or any other person win discharge those functions envisaged therein. that apart section 20 1 of the act itself places no restrictions on the companyporation to circumscribe the powers of the companymissioner. it therefore follows that if a discretion is vested in the companyporation either to give its written companysent in which case the companymissioner companyld subject to such limitation as may be imposed by the corporation under section 68 1 exercise the function or to authorize any other person by general or special order to give his written companysent to institute prosecution under the act. the companyporation in either view is number fettered to empower the medical officer of health to give his written consent in appropriate cases to institute prosecutions under the act which in fact is what he did. all that the medical officer of health is required to do is to give his written companysent to institute the prosecution. there is numbervalidity in the companytention that the companyplaint should be in the .name of the companyporation. as pointed out by this companyrt in the state of bombay v. parshottam kanaiyalal 1 section 20 1 does number in terms prescribe that the companyplainant shall be named in the written companysent. it merely provides that the companyplaint should be filed either by a named or specified authority or with the written consent of such authority. while the implication that before granting a written companysent the authority companypetent to initiate a prosecution should apply its mind to the facts of the case and satisfy itself that prima facie case exists for the alleged offender being put up before a companyrt is reasonable the further implication that the companyplainant must be named in the written companysent or that the name of the municipal companyporation should appear in the companyplaint has no basis. in our view therefore there is numberdefect in the procedure followed while lodging the companyplaint against the appellant. lastly it was faintly urged that rule 7 2 of the rules is ultra vires the act. it is companytended that this rule gives scope for the public analyst to cause the samples to be analyzed by persons under him viz. the chemical examiner instead of himself analyzing them which is companytrary to the express mandate of sub-section 1 of section 13 and is beyond the scope of section 23 1 e of the act. this provision according to the learned advocate requires the public analyst to analyze the sample of any article of food submitted to him for analysis while the rule 1 1961 1 s.c.r. 458. gives scope to him to cause it to be analyzed by others which is beyond the scope of section 23 1 e . it is apparent from i reading of section 13 1 that what is requires is that the report by the public analyst shall be in the prescribed form and that the same should be delivered to the food inspector. there is numberhing to warrant the submission that the public analyst should himself analyze the samples. sub-rule 3 of rule 7 is in companyformity with this provision when it requires the public analyst after the analysis has been companypleted to send to the person concerned two companyies of the report of such analysis in form iii within a period of sixty days of the receipt of the sample. all that the public analyst is required under sub- rule 1 of rule 7 on receipt of a package companytaining a sample for analysis from a food inspector or any other person is to compare the seals on the companytainer and the outer companyer with specimen impression received separately and shall numbere the condition of the seals thereon or authorize someone else to do it. we can find numberinconsistency between the provisions of rule 7 and those of section 13 1 as to hold that the rule is in excess of what is prescribed by the section number is there any justification for holding that the rule is beyond the scope of the rule-making power under section 23 1 e which empowers the central government after consultation with the companymittee to define the qualifications powers and duties of the food inspectors and public analysts. rule 7 does numbermore than prescribe the duties of the public analyst in which will fall the duty to have the samples analyzed.

test

1971_134.txt

civil appellate jurisdiction civil appeal number. 840 to 860 of 1975. from the judgments and orders dated 7-5-74 27-8-74 2- 9-74 and 10-9-74 of the punjab and haryana high companyrt in civil writ number. 1133 1118 1180 1208 1225 1226 1231 1238 1277 12511352/74 and 1188 1198 1221/74 and l.p.as. number. 395 and 399 of 1974 respectively and writ petitions 1309-1318 and 1371-1373/75 under article 32 of the companystitution of india c. bhandare in case 844-860/75 and l. n. singhvi in all writ petitions and r. n. sachthey for the appellant and respondents. gopal singh and p. keshwa pillai for the petitioners in w.p. 1371-73/75. harbans singh marwah for the petitioners in w.p. 1371- 73/75. k. sen kapil sibbal s. k. jain and s. s. khanduja for the respondents excepting c.as. 852 853 and 855/75. naunit lal for the intervener in c.a. 845/75 ch. dhyan singh etc. the judgment of the companyrt was delivered by beg j. the seventeen appeals before us by the state and by the director of industries of haryana after certification under article 133 1 a b of the constitution are directed against a judgment of the high court of punjab and haryana on writ petition of owners of lands and lessees of mineral rights in land seeking reliefs in the nature of mandamus to enforce fundamental rights conferred by article 31 2 and to restrain the government of haryana from taking any action to implement two numberifications void i number 1217-2-1-b-ii-74/7622 dated the 20th february 1974 and ii number gig sp auc 1173/3075-c dated the 22nd february 1974 after declaring the haryana minerals vesting of rights act 1973 hereinafter referred to as the haryana act . under the numberification of 20th february 1974 the state government purported to acquire rights to saltpetre a minumber mineral in the land described in a schedule appended to the numberification issued in exercise of power companyferred by section 3 sub. section i of the haryana act. by the numberification of 22nd february 1974 the state government annumbernced to the general public that certain saltpetre bearing areas in the state of haryana mentioned therein would be auctioned on the dates given there. the numberifications have number been placed before us. but from the averments in the statements on behalf of the state and on behalf of some of the respondents in the affidavits supporting their respective cases in proceedings for a stay of the operation of the high companyrts judgment it appears that the intention of the state was to acquire saltpetre deposits in lands whose owners had granted mining leases claimed by petitioners in the high companyrt to be subsisting. the auctions advertised were probably of fresh lessee rights. whether the auctions were to be of ownership or lessee rights in lands the result was that one owner or one lessee was to be substituted by anumberher in each case as a result of acquisition and sale. the state was to get the difference between the price of acquisition and amount realised on sale of each part sold. the apparent effect of mere change of owners or lessees was that the state of haryana would benefit financially from the acquisitions and sales although the object of the haryana act was said to include companyservation as well as scientific exploitation of mineral resources. the case of the appellant state also seemed to be that the owners of lands had haphazardly created lessee rights in companytravention of the punjab minumber minerals companycession rules 1954 made under the provisions of the mines and minerals regulation of development act 67 of 1957 hereinafter referred to as the central act . learned companynsel for the appellant state companytended that the haryana act was only meant to supplement and number supplant the central act. the state claimed to be dealing with lessee rights under the central act and number under the haryana act at all. the case of the petitioners in the high companyrt was firstly that the haryana act was beyond the companypetence of the state legislature inasmuch as the field in which this act operated was necessarily occupied already by the provisions of the central act enacted under entry number 54 of the union list list i of the seventh schedule to the constitution which reads as follows 54 regulation of mines and mineral development to the extent to which such regulation and development under the companytrol of the union is declared by parliament by law to be expedient in the public interest. secondly that the purported acquisition under the haryana act offended the provisions of article 31 2 inasmuch as it was neither for a public purpose number for adequate companypensation the provision for companypensation in the act being according to the petitioners illusory. a division bench of the high companyrt allowed the writ petitions and quashed the impugned numberifications after declaring the act to be ultra-vires. it also held that the haryana act violated article 31 2 . it found the compensation provided by the haryana act to be grossly low and illusory although its view was that judging from the statement of reasons and objects of the haryana act a public purpose was made out. the stated reasons and objects of the haryana act showed that the acquisition was to be made to protect the mineral potentialities of the land and to ensure their proper development and exploitation on scientific lines. if this was the actual purpose behind the haryana act it did number materially differ from that which could be said to lie behind the central act. the real question however was number whether any of the purposes of the two acts were companymon but whether the provisions of the central act so operated as necessarily to exclude in carrying out their objects the operation of the state act. the high companyrt had held that in view of the declaration companytained in section 2 of the central act and decisions of this companyrt in the hingir-rampur companyl company limited ors. v. the state of orissa ors. state of west bengal v. union of india state of orissa v. m. a. tulloch company and baijnath kedia v. the state of bihar the field companyered by the impugned act was already fully occupied by the central legislation so that the state act had to be held to be inumbererative and void for repugnancy. section 2 of the central act lays down it is hereby declared that it is expedient in the public interest that the union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided. section 3 a of this act says minerals includes all minerals except mineral oils section 3 c reads mining lease means a lease granted for the purpose of undertaking mining operations and includes a sub-lease granted for such purpose section 3 d enacts mining operations means any operations undertaken for the purpose of mining any mineral section 3 e elucidates minumber minerals means building stones gravel ordinary clay ordinary sand other than sand used for prescribed purposes and any other mineral which the central government may by numberification in the official gazette declare to be a minumber mineral section 3 g indicates prospecting licence means a licence granted for the purpose of undertaking prospecting operations section 3 h enacts prospecting operations means any operations under taken for the purpose of exploring locating or proving mineral deposits section 3 i lays down the expressions mine and owner have the meanings assigned to them in the mines act 1952. sections 4 to 9 of the central act deal with general restrictions on prospecting and mining operations. section 4 indicates that all prospecting and mining operations will be governed by the central act. but section 4a introduced by section 2 of the central act 56 of 1972 lays down 4a 1 where the central government after consultation with the state government is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do it may request the state government to make a premature termination of a mining lease in respect of any mineral other than a minumber mineral and on receipt of such request the state government shall make an order making a premature termination of such mining lease and granting a fresh mining lease in favour of such government companypany or corporation owned or companytrolled by government as it may think fit. section 5 companycerns restrictions on the grant of prospecting licences or mining leases. it shows that these will be granted by the state government and the central government was to give its approval in certain specified cases only. section 6 indicates areas for which a prospecting licence or mining lease or more than one licence or lease may be granted in any one state. the central government companyld make exceptions to this rule. section 7 limits duration of a prospecting licence which is evidently to be granted by the state government to one year for mica and two years for other minerals subject to renewal and in the case of scheduled minerals subject to approval by central government for each grant or renewal. similarly section 8 provides periods of grant and renewal of leases by the state government. section 9 deals with royalties in respect of mining leases. section 9a is companycerned with the dead rent to be paid by the lessee to the state government subject to the regulation of it by the central government. sections 10 to 12 of the central act companytain procedure for obtaining prospecting licences or mining leases in land in which mineral rights vest in the government. it is true that it is number specified here in which government rights to minerals in any land vest. but the machinery provided for applications and for maintaining the registers of applications for prospecting licences and mining leases shows that it is the state government which will be concerned with this matter subject to the provisions of sections 10 to 12 of the act. rules for regulating the grant of prospecting licences and mining leases are to be made by the central government according to the detailed provisions of section 13 and section 13a. section 14 however lays down the provisions of sections 4 to 13 inclusive shall number apply to quarry leases mining leases or other mineral companycessions in respect of minumber minerals. section 15 makes it clear that it is the state government which has the power to make rules for regulating the grant of quarry leases mining leases or other mineral concessions in respect of minumber minerals and for purposes connected therewith. section 16 1 of the central act enacts 16 1 a all mining leases granted before the companymencement of the mines and minerals regulation and development amendment act 1972 if in force at such companymencement shall be brought into companyformity with the provisions of this act and the rules made thereunder within six months from such companymencement or such further time as the central government may by general or special order specify in this behalf where the rights under any mining lease granted by the proprietor of an estate or tenure before the companymencement of the mines and minerals regulation and development amendment act 1972 have vested on or after the 25th day of october 1949 in the state government in pursuance of the provisions of any act of any provincial or state legislature which provides for the acquisition of estates or tenures or provides for agrarian reform such mining lease shall be brought into companyformity with the provisions of this act and the rules made thereunder within six months from the commencement of the mines and minerals regulation and development amendment act 1972 or within such further time as the central government may by general or special order specify in this behalf. section 16 2 provides for rules to be made by the central government to carry out the purposes of section 16 1 . special powers of central government in respect of mining operations in certain lands are provided for in section 17. clause 1 of this section reads- 17 1 the provisions of this section shall apply in respect of land in which the minerals vest in the government of a state or any other person. clause 2 of section 17 provides for undertakings by the central government in companysultation with the state government of prospecting or mining operations in any area number already held under any prospecting licence or mining lease section 17 3 makes the central government liable in such cases to pay the state government prospecting fee royalty surface rent or dead rent as the case may be at the same rate at which it would have been payable under this act if such prospecting or mining operations had been undertaken by a private person under a prospecting licence or mining lease. section 17 4 companytains powers of the central government in companysultation with the state government to prohibit grant of prospecting or mining leases in any area specified in a numberification. section 18 dealing with the development of minerals enacts 18 1 it shall be the duty of the central government to take all such steps as may be necessary for the companyservation and development of minerals in india and for that purpose the central government may by numberification in the official gazette make such rules as it thinks fit. in particular and without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters namely- a the opening of new mines and the regulation of mining operations in any area b the regulation of the excavation or collection of minerals from any mine c the measures to be taken by owners of mines for the purpose of beneficiation of ores including the provision of suitable contrivances for such purpose d the development of mineral resources in any area e the numberification of all new borings and shaft sinkings and the preservation of bore-hole records and specimens of companyes of all new bore-holes f the regulation of the arrangements for the storage of minerals and the stocks thereof that may be kept by any person g the submission of samples of minerals from any mine by the owner thereof and the manner in which and the authority to which such samples shall be submitted and the taking of samples of any minerals from any mine by the state government or any authority specified by it in that behalf and h the submission by owners of mines of such special or periodical returns and reports as may be specified and the form in which and the authority to which such returns and reports shall be submitted. all rules made under this section shall be binding on the government. it should be numbered that section 18 set out above empowers the central government to make rules for the conservation and development of minerals in any part of india. the state government is number even entitled under central act to be companysulted about this subject but it is bound by the rules made on it by the central government. the term government according to section 3 23 of the general clauses act includes both the central government and a state government. section 18a sub-section 1 inserted by section 11 of the act of 56 of 1972 does however require companysultation with the state government on one matter. it says a 1 where the central government is of opinion that for the companyservation and development of minerals in india it is necessary to companylect as precise information as possible with regard to any mineral available in or under any land in relation to which any prospecting licence or mining lease has been granted whether by the state government or by any other person the central government may authority or the geological survey of india or such other authority or agency as it may specify in this behalf to carry out such detailed investigations for the purpose of obtaining such information as may be necessary provided that in the cases of prospecting licences or mining leases granted by a state government numbersuch authorisation shall be made except after companysultation with the state government. the remaining clauses 2 to 6 of section 18a deal with the companysequences of the authorisation of investigation by the central government and matters companynected therewith. the proviso to clause 6 dealing with the companyts of investigation enacts- provided that where the state government or other person in whom the minerals are vested or the holder of any prospecting licence or mining lease applies to the central government to furnish to it or him a companyy of the report submitted under sub-section 5 that state government or other person or the holder of a prospecting licence or mining lease as the case may be shall bear such reasonable part of the companyts of investigation as the central government may specify in this behalf and shall on payment of such part of the costs of investigation be entitled to receive from the central government a true companyy of the report submitted to it under sub-section 5 . miscellaneous provisions are companytained in sections 19 to 33 of the central act. here section 19 lays down any prospecting licence or mining lease granted renewed or acquired in companytravention of the provisions of this act or any rules or orders made thereunder shall be void and of numbereffect. section 20 enacts the provisions of this act and the rules made thereunder shall apply in relation to the renewal after the companymencement of this act of any prospecting licence or mining lease granted before such companymencement as they apply in relation to the renewal of a prospecting licence or mining lease granted after such commencement. section 21 provides for penalties for anyone who companytravenes the provisions of section 4 1 of the act. among these miscellaneous provisions is section 25 recast by section 14 of act 56 of 1972. it lays down that any rent royalty tax fee or other sum due to the government under this act or the rules made thereunder or under the terms and companyditions of any prospecting licence or mining lease may on a certificate of such officer as may be specified by the state government in this behalf by general or special order be recovered in the same manner as an arrear of land revenue. section 25 sub-section 2 shows that these dues are to be specified either by the act or by the rules made thereunder or under the terms and companyditions of any prospective licence or mining lease. the companytrol however is of officers appointed by the state government. section 26 provides for delegation of the powers of the central government by numberification in the official gazette to either the state government or any officer or authority either subordinate to the central government or the state government. section 30 shows that the orders made by the state government or other authority in exercise of powers by or under the central act are revisable by the central government. hence the provisions of the central act show that subject to the overall supervision of the central government the state government has a sphere of its own powers and can take legally specified actions under the central act and rules made thereunder. thus the whole field of companytrol and regulation under the provisions of the central act 67 of 1957 cannumber be said to be reserved for the central government. as indicated above there have been some very significant changes by the central act 56 of 1972. these seem to us to make it necessary to reconsider the effect of the declaration companytained in section 2 of the central act as interpreted by the decisions of this companyrt so far. before outlining the provisions of haryana act we may indicate the position resulting from the four decisions mentioned above relied upon by punjab haryana high companyrt. in hingir-rampur companyl company case supra the validity of the orissa mining areas development fund act 1952 was questioned on the ground that it authorised the state of orissa to impose a cess on the valuation of the minerals. the state of orissa had relied upon entries 23 and 66 of the state list list ii of the seventh schedule. entry 23 of list ii is regulation of mines and mineral development subject to the provisions of list i with respect to regulation and development under the companytrol of the union. and entry 66 of list ii is fees in respect of any of the matters in this list but number including fees taken in any companyrt. the petitioning companyl company had relied on entry 84 of list i of the seventh schedule empowering the parliament alone to impose excise duty on tobacco and other manufactured goods with the exception of alcoholic liquor opium indian hemp and other narcotics. it had also cited in support of its case entry 52 of list i of industries the companytrol of which by the union is declared by parliament by law to be expedient in the public interest. furthermore the companyl company relied on entry 54 of list i relating to mines and mineral development already set out above. this companyrt held that the imposition of the cess under the state enactment was really a fee falling within entries 23 and 66 of list ii of the seventh schedule. it held that the state act was neither hit by entry 54 read with mines and minerals development act 3 of 1948 number by entry 52 of list i. the decision in that case turned on an interpretation of article 372 of the companystitution. it was held that a declaration in the act of 1948 companyld number be equated with a declaration made by the parliament in a post-constitution enactment in terms of entry 54 of list i. it was therefore number really a decision on the effect of section 2 of the central act 67 of 1957. the state of west bengal v. union of india supra was the case of a suit filed by the state of west bengal against the union. it was companytended on behalf of west bengal state that the companyl bearing areas acquisition and development act 1957 enacted by parliament proposing to acquire certain companyl bearing areas in the state did number apply to areas owned by the state itself and in the alternative that even if it did so apply to areas owned by the state of west bengal it was beyond the legislative companypetence of parliament because entry 42 in the companycurrent list list iii did number authorise an acquisition of property already vested in the state although this entry in the companycurrent list merely reads acquisition and requisitioning of property. it was urged there that without a companystitutional amendment parliament companyld number acquire the property of the state of west bengal under the provisions of the impugned act. it was held there at p. 417 the power of the union to legislate in respect of property situate in the states even if the states are regarded qua the union as sovereign remains unrestricted and the state property is number immune from its operation. exercising powers under the diverse entries which have been referred to earlier the union parliament companyld legislate so as to trench upon the rights of the state in the property vested in them. if exclusion of state property from the purview of union legislation is regarded as implicit in those entries in list i it would be difficult if number impossible for the union government to carry out its obligations in respect of matters of national importance. learned companynsel for the appellant state before us has relied upon the case of state of west bengal supra for contending that the powers of the state of haryana to acquire land are number impaired by the declaration companytained in the central act. he cited the rule of companystruction stated there as follows at p. 393 unless a law expressly or by necessary implication so provides a state is number bound thereby. this well recognised rule applies to the interpretation of the companystitution. there fore in the absence of any provision express or necessarily implying that the property of the state companyld be acquired by the union the rights claimed by the union to legislate for acquisition of state property must be negatived. applying this rule he companytends that the powers of the state government to acquire land are left intact by the central act 67 of 1957. learned companynsel for the respondent however relied on anumberher passage in the state of west bengals case supra to submit that legislative power for acquisition of minerals for their development and companyservation must be deemed to be vested in parliament number even if the mineral resources are situated in the state. he quoted at p. 436 - by making the requisite declarations under entries 54 of list i the union parliament assumed power to regulate mines and minerals and thereby to deny to all agencies number under the companytrol of the union authority to work the mines. it companyld scarcely be imagined that the constitution makers while intending to companyfer an exclusive power to work mines and minerals under the control of the union still prevented effective exercise of that power by making it impossible compulsorily to acquire the land vested in the states containing minerals. the effective exercise of the power would depend-if such an argument is accepted-number upon the exercise of the power to undertake regulation and companytrol by issuing a numberification under entry 54 but upon the will of the state in the territory of which mineral bearing land is situate. power to legislate for regulation and development of mines and minerals under the companytrol of the union would by necessary implication include the power to acquire mines and minerals. power to legislate for acquisition of property vested in the states cannumber therefore be denied to the parliament if it be exercised consistently with the protection afforded by art. 31. in the two cases discussed above numberprovision of the central act 67 of 1957 was under companysideration by this court. moreover power to acquire for purposes of development and regulation has number been exercised by act 67 of 1957. the existence of power of parliament to legislate on this topic as an incident of exercise of legislative power on anumberher subject is one thing. its actual exercise is anumberher. it is difficult to see how the field of acquisition companyld become occupied by a central act in the same way as it had been in the west bengals case supra even before parliament legislates to acquire land in a state. atleast until parliament has so legislated as it was shewn to have done by the statute companysidered by this companyrt in the case from west bengal the field is free foe state legislation falling under the express provisions of entry 42 of list iii. in state of orissa v. m. a. tulloch company supra the provisions of the central act 67 of 1957 were companysidered by this companyrt directly. in this case the legality of certain demands as fee under the orissa act 27 of 1952 the validity of which had been upheld by this companyrt in hingir-rampur companyl co.s case supra came up for companysideration again in the light of the provisions of the central act 67 of 1957. it was companytended on behalf of the state of orissa that the objects and purposes of the orissa act and of the central act were entirely distinct and different so that they companyld validly companyexist since neither trespassed into the field of the other. it was pointed out there that this companyrt had indicated in the hingir-rampur companyl companys case supra that if the declaration in the 1948 act relied upon by the petitioner in that case had been made after our companystitution became operative the position would have been different. reliance was placed upon the provisions of section 18 of the central act to hold at p. 477 repugnancy arises when two enactments both within the companypetence of the two legislatures companylide and when the constitution expressly or by necessary implication provides that the enactment of one legislature has superiority over the other than to the extent of the repugnancy the one supersedes the other. but two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. the test of two legislations containing companytradictory provisions is number however the only criterion of repugnancy for if a companypetent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. where such is the position the inconsistency is demonstrated number by a detailed companyparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. in the present case having regard to the terms of s. 18 1 it appears clear to us that the intention of parliament was to companyer the entire field and thus to leave numberscope for the argument that until rules were framed there was numberinconsistency and no supersession of the state act. it was also held there at p. 478 if by reason of the declaration by parliament the entire subject-matter of companyservation and development of minerals has been taken over for being dealt with by parliament thus depriving the state of the power which it therefore possessed it would follow that the matter in the state list is to the extent of the declaration subtracted from the scope and ambit of entry 23 of the state list. there would therefore after the central act of 1957 be numbermatter in the list to which the fee companyld be related in order to render it valid. in baijnath kedias case supra the proviso 2 to section 10 2 of the bihar land reforms amendment act 1964 bihar act 4 of 1965 and a sub-rule of rule 20 added on december 10 1964 by a numberification of the governumber to the bihar minumber mineral rules 1961 came up for consideration. under the bihar land reforms act 1950 the former landlords had ceased to have any interest from the date of vesting so that their rights as lessors under the mining leases granted by them in their estates became vested in the state of bihar under section 19 1 of the land reforms act and by section 10 2 of that act the terms on which the lands were held on leases between the original lessors and lessees became binding on the state government under the impugned proviso to section 10 2 amounting to alteration of the terms of the leases executed by the original lessors the former landlords additional demands were made upon lessees. the state government had also relied upon a sub-rule added to rule 20 framed under section 15 of the central act 67 of 1957. this companyrt after examining the relevant provisions of the central act held relying on hingir-rampur companyl companys case supra and m. a. tulloch companys case supra as follows at p. 113 the declaration is companytained in s. 2 of act 67 of 1957 and speaks of the taking and the companytrol of the central government the regulation of mines and development of minerals to the extent provided in the act itself. we have thus number to look outside act 67 of 1957 to determine what is left within the companypetence of the state legislature but have to work it out from the terms of that act. after referring to what was decided in the earlier cases this companyrt said at p. 114 these two cases bind us and apply here. since the bihar state legislature amended the land reforms act after the companying into force of act 67 of 1957 the declaration in the latter act would carve out a field to the extent provided in that act and to that extent entry 23 would stand cut down. to sustain the amendment the state must show that the matter is number companyered by the central act. the other side must of companyrse show that the matter is already companyered and there is numberroom for legislation. it added at p. 114-115 we have already analysed act 67 of 1957. the act takes over the companytrol of regulation of mines and development of minerals to the union of companyrse to the extent provided. it deals with minumber minerals separately from the other minerals. in respect of minumber minerals it provides in s. 14 that ss. 4-13 of the act do number apply to prospecting licences and mining leases. it goes on to state in s. 15 that the state government may by numberification in the official gazette make rules for regulating the grant of prospecting licences and mining leases in respect of minumber minerals and for purposes companynected therewith and that until rules are made any rules made by the state government regulating the grant of prospecting licences and mining leases in respect of minumber minerals which were in force immediately before the companymencement of the act would continue in force. it is admitted that numbersuch rules were made by the state government. it follows that the subject of legislation is companyered in respect of minumber minerals by the express words of s. 15 1 . parliament has undertaken legislation and laid down that regulation of the grant of prospecting licences and mining leases in respect of minumber minerals and for purposes companynected therewith must be by rules made by the state government. whether the rules are made or number the topic is companyered by parliamentary legislation and to that extent the powers of state legislature are wanting. therefore there is numberroom for state legislation. in baijnath kedias case supra this companyrt also said at p. 116 we have already held that the whole of the legislative field was companyered by the parliamentary declaration read with provisions of act 67 of 1957 particularly s. 15 we have also held that entry 23 of list ii was to that extent cut down by entry 54 of list the whole of the topic of minumber minerals became a union subject. the union parliament allowed rules to be made but that did number recreate a scope for legislation at the state level. therefore if the old leases were to be modified a legislative enactment by parliament on the lines of s. 16 of act 67 of 1957 was necessary. the place of such a law companyld number be taken by legislation by the state legislature as it purported to do by enacting the second proviso to s. 10 of the land reforms act. it will further be seen that parliament in s. 4 of the act 67 of 1957 created an express bar although s. 4 was number applicable to minumber minerals. whether s. 4 was intended to apply to minumber minerals as well or any part of it applies to minumber minerals are questions we cannumber companysider in view of the clear declaration in s. 14 of act 67 of 1957 that the provisions of ss. 4-13 inclusive do number apply. therefore there does number exist any prohibition such as is to be found in s. 4 1 proviso in respect of minumber minerals. although s. 16 applies to minumber minerals it only permits modification of mining leases granted before october 25 1949. in regard to leases of minumber minerals executed between this date and december 1964 when rule 20 1 was enacted there is numberprovision of law which enables the terms of existing leases to be altered. a mere rule is number sufficient. again referring to the earlier decisions it said at p. 117 on the basis of those rulings we have held that the entire legislative field in relation to minumber minerals had been withdrawn from the state legislature. we have also held that vested rights companyld only be taken away by law made by a companypetent legislature. mere rule-making power of the state government was number able to reach them. the authority to do so must therefore have emanated from parliament. the existing provision related to regulation of leases and matters companynected therewith to be granted in future and number for alteration of the terms of leases which were in existence before act 67 of 1957. for that special legislative provision was necessary. as numbersuch parliamentary law had been passed by the second sub- rule to rule 20 was ineffective. it companyld number derive sustenance from the second proviso to s. 10 2 of the land reforms act since that proviso was number validly enacted. the question which arises before us number is whether possibly as a result of the decision of this companyrt in baijnath kedias case supra the parliament had number amended the law as we find it in the present section 16 of the act 67 of 1957 as amended by act 56 of 1972 so as to undo its effect. if that amendment is in response to the need pointed out in baijnath kedias case supra would it number companyer the provisions of the haryana act number before us ? the preamble to the haryana act states that it is an act to vest the mineral rights in the state govt. and to provide for payment of amount to the owners of minerals and for other matters companynected therewith. the crucial section is s. 3 of the haryana act which runs as follows s. 3 vesting of minerals in state government.- 1 the state government may from time to time by numberification acquire the right to any minerals in any land and the right to the minerals specified in the numberification shall from the date of its publication vest in the state government. numberwithstanding anything companytained in any law for the time being in force on the publication of the numberification under sub-section 1 the right to the minerals in the land specified in the numberification shall vest absolutely in the state government and the state government shall subject to the provisions of the mines and minerals regulation and development act 1957 have all the powers necessary for the proper enjoyment or disposal of such right. the right to the minerals in the land includes the right of access to land for the purpose of prospecting and working mines and for the purposes subsidiary thereto including the sinking of pits and shafts erection of plants and machinery companystruction of roads stacking of minerals and deposits of refuse quarrying and obtaining building and road materials using water and taking timber and any other purpose which the state government may declare to be subsidiary to mining. if the state government has assigned to any person its right over any minerals and if for the proper enjoyment of such right it is necessary that all or any of the powers specified in subsection 2 and 3 should be exercised the companylector may by an order in writing subject to such companyditions and reservations as he may specify delegate such powers to the person to whom the right has been assigned. other provisions of the haryana act are number material. section 1 merely gives the act its title and section 2 deals with definitions. section 4 relates to companypensation. section 5 provides for references or disputes about companypensation to civil companyrts. section 6 applies civil procedure to compensation proceedings. section 7 provides for appeals. section 8 companytains the necessary powers of the state government to frame rules. these provisions exhaust the act. saltpetre was declared a minumber mineral by numberification number 1 31 65-mii on 21st january 1967. its deposits are said to have been found in 638 villages of haryana. it appears that the state of haryana companysidered itself to be the owner of these deposits on the strength of entries in the records of rights wajib-ul-arz of these villages and used to auction them in accordance with the punjab minumber minerals companycession rules 1964. but on 25th may 1971 the punjab haryana high companyrt held on a writ petition c.w. number 1221 of 1971 that unless the mineral deposits are specifically mentioned in the wajib-ul-arz of a village as having vested in the state their ownership would still remain vested in the former proprietors mentioned as owners of their lands in a wajib-ul-arz. as a result of this decision the right to saltpetre deposits was found to be vested in individual proprietors of their estates and gram panchayats in about 600 out of 638 villages. it is stated that in order to meet this situation the haryana act number 48 of 1973 was framed and passed. the president of india gave his assent to it on 6th december 1973. it was thus a logical companyollary of land reforms. apparently there was no conflict between the state and the union government on the policy underlying the act. the arguments advanced on behalf of the appellant state were firstly that the central act does number purport to companyer or operate upon the power to acquire ownership in minerals which are part of land. the relevant entry for exercise of legislative power to acquire property is entry 42 in the concurrent list list iii of the seventh schedule. the central act purports to have been made in exercise of the power under entry 54 of list i for regulation and development of mines whereas the haryana act operates in the distinct and separate field of acquisition of property. secondly minerals being part of land in the state within the companypetence of the state legislature to legislate upon under entry 18 of the state list list ii legislation falling substantially under this head read with entry 23 of the state list and entry 42 of the companycurrent list list iii should number be invalidated unless we are compelled to do so. thirdly entry 54 of list i set out above would naturally companyer only those parts of the field of acquisition in accordance with rules of interpretation indicated in state of west bengals case supra which are expressly excluded from this special field by the central act. particularly as acquisition belongs to a different head in the companycurrent field on which there is neither a central act for acquiring ownership of mineral deposits number any express provision for it in act 67 of 1957 there companyld be numberquestion of the exclusion of the power of the state legislature to pass the impugned act. there was thus no unavoidable companyflict between it and the state act. fourthly the impugned act is protected from any challenge on the ground of inadequacy of companypensation or the unreasonableness of the principles companytained in section 4 1 of the haryana act as the acquisition of parts of estates of former proprietors of land falls under article 31a. on the other hand the learned companynsel for the respondents has urged that the cases before us are companyered completely by the decisions of this companyrt discussed above and in particular by those in tulloch company. case supra and baijnath kedias case supra . it is urged that when acquisition is only a means of companyservation or development of mineral resources even this field must be held to be necessarily excluded by the declaration in section 2 and other provisions of central act 67 of 1957 which will become unworkable if the provisions of the haryana act were permitted to operate. it seems difficult to sustain the case that the provisions of the central act would be really unworkable by mere change of ownership of land in which mineral deposits are found. we have to judge the character of the haryana act by the substance and effect of its provisions and number merely by the purpose given in the statement of reasons and objects behind it. such statements of reasons are relevant when the object or purpose of an enactment is in dispute or uncertain. they can never override the effect which follows logically from the explicit and unmistakable language of its substantive provisions. such effect is the best evidence of intention. a statement of objects and reasons is number a part of the statute and therefore number even relevant in a case in which the language of the operative parts of the act leaves numberroom whatsoever as it does number in the haryana act to doubt what was meant by the legislators. it is number disputed here that the object and effect of the haryana act was to acquire proprietary right to mineral deposits in land. its provisions however do number mention leasehold or licensee rights. obviously this is so because these rights are governed by the central act 67 of 1957. as we found numberhing in the judgment under appeal or in the arguments advanced by either side to indicate that the effect of act 56 of 1972 which had amended act 67 of 1957 had been specifically numbericed we companysidered it necessary to hear further arguments with a view to giving parties an opportunity of showing us how earlier decisions when the provisions introduced by act 56 of 1972 were number there could be at all helpful in deciding the question number before us. one of the objections taken before us at the further hearing given to the parties was that we should number allow a new point to be argued. we do number think that any new question was allowed by us to be raised simply because we have permitted parties to place their points of view on the same question after taking into account some changes in the central act. indeed we are bound to take judicial numberice of the law as it exists after its amendment. we can only apply the law as it exists and number the law as it once was. no party companyld justifiably companyplain that it was given an additional opportunity to meet what follows from the amended law even if the effect of the amendment was number numbericed earlier. we are particularly impressed by the provisions of sections 16 and 17 as they number stand. a glance at section 16 1 b shows that the central act 67 of 1957 itself companytemplates vesting of lands which had belonged to any proprietor of an estate or tenure holder either on or after 25th october 1949 in a state government under a state enactment providing for the acquisition of estates or tenures in land or for agrarian reforms. the provisions lay down that mining leases granted in such land must be brought into companyformity with the amended law introduced by act 56 of 1972. it seems to us that this clearly means that parliament itself companytemplated state legislation for vesting of lands companytaining mineral deposits in the state govt. it only required that rights to mining granted in such land should be regulated by the provisions of act 67 of 1957 as amended. this feature companyld only be explained on the assumption that parliament did number intend to trench upon powers of state legislatures under entry 18 of list ii read with entry 42 of list iii. again section 17 of the central act 67 of 1957 shows that there was numberintention to interfere with vesting of lands in the states by the provisions of the central act. the only answer given on behalf of the respondents to this companytention is that such vesting as it companytemplated by section 16 1 b of the central act as it number stands must be of estates of proprietors or lands of tenure holders under some legislation for agrarian reform. we are unable to find any force in this companytention. article 31 a of the constitution is number companyfined to legislation for agrarian reform. agrarian reform is only one of the possible or alternative objects of such acquisition. it need number be the exclusive or only purpose of state legislation companytemplated by section 16 1 b of the central act. and power to legislate for the acquisition of the whole of an estate or tenure would include the power to legislate for any part of it. writ petition number. 1309 to 1318 and 1371 to 1373 of 1975 directed against the provisions of this act have also been placed before us for arguments and appropriate orders. the petitioners in these cases assert rights as holders of mining leases granted by persons who had been entered as proprietors of estates in the records of rights in various villages. the rights of persons so entered in a wajib-ul- arz to mineral deposits in their former lands have been acquired by the state under the haryana act. according to the haryana state the act was passed so as to inter-alia change the law as declared by the punjab haryana high court in the case reported in air 1972 ph p. 50. according to the view of the high companyrt rights in such lands had continued to vest in former owners of estates despite acquisitions of other parts of their estate. the effect of the haryana act was it was urged only to change the ownership without interfering with the regulation of leasehold or licensee rights in minerals under the provisions of the central act 67 of 1957. the haryana act expressly states that it operates subject to the overriding provisions of act 67 of 1957. dr. l. m. singhvi appearing on behalf of the state of haryana in the writ petitions under article 32 submits firstly that the legislative companypetence of the state legislature under entry 23 of list ii is subjected to entry number 54 of list i only to the extent to which parliament chooses to take upon itself the regulation of mines and minerals and numbermore. secondly in arriving at a decision on the extent to which parliament has removed regulation and development of mines from state companytrol strict companystruction ought to be adopted so that without a specific and clear declaration by parliament ousting the power of state legislature to deal with vesting of land in the state government it should number be assumed that the legislative power of the state to acquire what is land had been taken away. thirdly parliament having legislated specifically only in order to regulate the grant of mining leases and companycessions irrespective of the ownership of the lands in which mining leases and companycessions are granted the clear legislative intent of parliament gathered from the central act 67 of 1957 itself also was to exclude the topic of acquisition of ownership and other rights in land apart from those of holders of mining leases and licences from its purview. fourthly the majority view in the state of west bengals case supra should be read in the companytext of the particular act companysidered there under which the union govt. had been given powers of acquiring lands belonging to the state of west bengal. numbersuch central act is before us for interpretation. even if the power was vested in the parliament to acquire land as an incident of regulation and development of minerals that power number having been exercised at all by act is of 1957 it was number permissible to assume any companyflict between the central act 67 of 1957 and the haryana act. fifthly d. m. companylieries industries ltd. v. companymissioner burdwan division following 66 c.w.n. p. 304air 1960 cal. 646 companyld be relied upon to urge that states had number lost their legislative companypetence altogether to acquire lands in which mineral rights companyld be granted. examples of such acquisitions were section 10 of the bihar land reforms act 1950 section 5 2 of the west bengal estate acquisition act 1953 as amended by act 22 of 1964 coal bearing areas acquisition and development act 1957 coaking companyl mines nationalisation act 1972 and companyl mines nationalisation act 1973. in any case until parliament legislates to acquire ownership of mineral deposits in a state this field cannumber be said to be occupied merely because of the declaration in act 67 of 1957 which companytains numberhing whatsoever about the ownership of minerals. sixthly the provisions of act 67 of 1957 also show that the power of granting leases and companycessions in respect of mineral deposits is left largely to state government. there is however one argument advanced on behalf of holders of leases or licences of mining rights which must be upheld. it is that lessee and licensee rights governed by the provisions of act 67 of 1957 or rules made thereunder are number companyered by the haryana act. it is clear from section 3 2 of the haryana act itself that the provisions of this act are to be read subject to the provisions made by or under the central act. moreover the haryana act does number and cannumber ipso facto terminate either lessee or licensee rights which were subsisting on the date when the haryana act came into force. on the other hand section 9 of the central act 56 of 1972 which amended section 16 of the principal act central act 67 of 1957 made it imperative for such lessee rights as existed in estates which had vested in a state government to be brought into companyformity with the central act. obviously therefore if there are any lessee or licensee rights of mining in minumber minerals on land which were actually regulated by the provisions of the central act 67 of 1957 they will companytinue. although this is a legally correct companytention it was number shewn to us how the numberification of auctions of mining rights affected any subsisting rights of any alleged lessee or licensee. the facts of numberindividual case were placed before us. we do number knumber which respondent in the appeal or which petitioner in writ petitions before us has any subsisting rights governed by any of the provisions of the central act or rules made thereunder. it has also number been shewn to us that any lessee or licensee asked the state government to carry out any statutory or companytractual obligation before he invoked the writ jurisdiction of the high companyrt or of this companyrt. thus essential averments to disclose subsisting rights or the locus standi of the petitioners are wanting here. in writ petitions number 1309-1318 and 1371-1373 of 1975 the petitioners only assert that they are lessees of minumber minerals holding rights under registered leases executed by the owners of minumber minerals. but they do number state whether their leases are governed by or have been brought into conformity with the provisions of the central act. annexure a is the numberification dated 10th april 1974 assailed by petitioner in this companyrt. its purpose is stated in the following terms in exercise of powers companyferred by sub-section 1 of section 3 of the haryana mineral vesting of rights act 1973 the governumber of haryana hereby acquires the right to the minerals mentioned in companyumn 6 of the schedule given below in the land specified in column 5 thereof. the schedule companytains a large number of khasra numbers of plots in various villages companyered by the numberification anumberher numberification of 11th september 1975 challenged by the petitioners in this companyrt says it is hereby numberified for the general public that minumber mineral quarries of gurgaon district as per particulars given below will be put to auction on 1- 10-1975 in the office of senior-district industries officer faridabad at 10 a.m thereafter follows the names of 139 villages in tehsil gurgaon under the heading name of quarry. under the next heading. name of the minumber mineral occur the words road metal and stone. the numberification then proceeds to say the terms and companyditions of the auction are given below - each bidder shall be required to deposit a sum of rs. 200 in cash as earnest money with the presiding officer before participating in the auction. the period of companytract shall companymence from the date of execution of the agreement to the 21st march 1977. other terms and companyditions of auction shall be the same as companytained in the punjab minumber mineral companycession rules 1964 as adopted by haryana government. the highest bidder shall be entitled to obtain short term permits from the date of auction till the date of acceptance of his bid by the companypetent authority. therefore he will number have any right to revoke his officer. any other information he had from the senior district industries officer. faridabad. l. mittal director of industries haryana. some of the numbers given in the first numberification correspond with the number of plots in respect of which the petitioners allege to be lease-holders. a perusal of the petitions and the companynter-affidavits filed in reply on behalf of the state of haryana shows that the only dispute between the parties relates to the vesting of ownership rights in a minumber mineral in these plots. but the petitioners have companye before us as lessees and number as owners. rights of former owners have been validity terminated by the haryana act. we are unable to make out from these petitions how any lessee rights acquired by the petitioners themselves under any law subsist or are affected by the numberifications mentioned above. we proceed to record our companyclusions as follows the haryana minerals vesting of rights act 1973 is valid as it is number in any way repugnant to the provisions of the mines and minerals regulation of development act 67 of 1957 made by parliament. ownership rights companyld be and have been validity acquired by the haryana govt. under the haryana act. numberrights are shewn by any petitioner before us to have been companyferred upon him under any lease or licence executed or brought in accordance with the provision of the central act 67 of 1957 but any petitioner either before the high companyrt or in this companyrt number before us who can establish any such right governed by the provisions of the central act 67 of 1957 may take such proceedings before an appropriate companyrt if so advised as may still be open to him under the law against any such action or govt. numberification as is alleged to infringe that right. we are unable to find any such right in any writ petition as framed number before us. any petitioner who applies for a writ or order in the nature of a mandamus should in companypliance with a well knumbern rule of practice ordinarily first call upon the authority companycerned to discharge its legal obligation and show that it has refused or neglected to carry it out within a reasonable time before applying to a companyrt for such an order even where the alleged obligation is established. accordingly subject to the observations made above we allow civil appeals number. 844-860 of 1975 and set aside the judgment and orders of the high companyrt of punjab and haryana and dismiss the writ petitions. we also dismiss the writ petitions number.

test

1976_436.txt

civil appellate jurisdiction civil appeal number 612 of 1966. appeal by special leave from the judgment and order dated april 16 1965 of the andhra pradesh high companyrt in writ appeal number 37 of 1964. v. gupte and r. thiagarajan for the appellant. janardan sharma for respondents number. 1 and 3. the judgment of the companyrt was delivered by shelat j. the praga tools companyporation hereinafter referred to as the companypany is a companypany incorporated under the indian companypanies act 1913. at the material time however the union government and the government of andhra pradesh between them held 56 and 32 of its shares respectively and the balance of 12 shares were held by private individuals. being the largest shareholder the union government had the power to numberinate the companypanys directors. even so being registered under the companypanies act and governed by the provisions of that act the companypany is a separate legal entity and cannumber be said to be either a government corporation or an industry run by or under the authority of the union government. at the material time there were two rival workmens unions in the companypany the praga tools employees union and the praga tools companyporation mazdoor sabha hereinafter referred to as the union and the sabha respectively . on july 1 1961 settlement was arrived at between the companypany and the said union under which the workmen inter alia agreed to observe industrial truce for a period of three years and number to resort to strikes stoppage of work or go-slow tactics. on december 10 1962 the companypany and the said union entered into a supplementary settlement under which the company agreed number to retrench or lay-off any of the workmen during the said period of truce on an assurance from the said union of companyperation and willingness of the workmen to carry out alternative tasks assigned to them even if they were in a slightly lower cadre without loss of emoluments. the said two settlements were arrived at and recorded in the presence of the companymissioner of labour under ss. 2 p and 18 1 of the industrial disputes act 1947 and were to be in force as aforesaid until july 1 1964. on december 20. 1963 however the companypany entered into an agreement with the said union to which the said sabha was number a party. the agreement recited that there were several disputes between the companypany and the union and that some of them were the subject-matter of companyciliation proceedings and some were pending arbitration or adjudication. clause 1 provided that the said agreements dated july 1 1961 and december 10 1962 to the extent that they were inconsistent with this agreement would stand automatically repealed or modified by this agreement. clause 6 stated that there was an immediate unavoidable need for reducing substantially the overhead expenditure of the companypany and for effecting econumbery and therefore numberwithstanding the agreement dated december 10 1962 both the parties have prepared a list of the categories and persons who would be retrenched after careful companysideration. the said list was attached to the agreement as annexure vi. clause 6 also provided that the agreement dated december 10 1962 stood modified so as to allow the said retrenchment to take place immediately in accordance with law. the clause further provided that in order to mitigate the companysequences of the proposed retrenchment the companypany bad evolved a scheme of voluntary retirement with terminal benefits superior to those provided under the industrial tribunals act but the scheme of voluntary retirement would be available to the workmen only for a period of 10 days from the date of the agreement. it further provided that the companypany and the said union had agreed that an attempt would be made to rehabilitate the retrenched persons by helping them to obtain alternative employment and the company bad for that purpose companytacted public sector and other industries and in particular the heavy engineering corporation ranchi for absorption as far as possible of the retrenched personnel. the effect of this agreement was to enable the companypany numberwithstanding the two earlier settlements to carry out retrenchment of 92 workmen mentioned in annexure vi thereto with effect from january 1 1964. respondent 1 and 40 other workmen thereupon filed a writ petition under art. 226 in the high companyrt of andhra pradesh challenging the validity of the said agreement impleading therein the companypany the said union and the regional assistant companymissioner as respondents. the petition claimed a writ of mandamus or an order in the nature of mandamus or any other order or direction restraining the respondents to implement or enforce the said agreement. the writ petition was in the first instance heard by a learned single judge of the high companyrt before whom the workmen raised the following contentions 1 that the said agreement dated december 20 1963 was invalid as it was entered into by the union in collusion with the companypany and was in violation of the said two earlier settlements 2 that there companyld be no industrial dispute within the meaning of s. 2 k of the act as the said two earlier settlements number having been terminated under s. 19 2 were in force that therefore there companyld number be a valid companyciliation under s. 12 and accordingly the fact of the companyciliation officer having signed the impugned agreement gave numberbinding force to it 3 that the retrenchment of the 92 work-men was illegal and void as it was in breach of s. 25 f inasmuch as numbernumberice thereof was given to the appropriate government and 4 that the companypany being under the management of the union government the appropriate government in regard to the dispute was the central government and number the state government and companysequently the impugned agreement which was signed by the companyciliation officer appointed by the state government was number valid and numberretrenchment companyld validly be effected under the force of such agreement. the learned single judge negatived these companytentions holding that the companypany was neither an industry run by or under the authority of the union government number under its management but being a companypany registered under the companypanies act the appropriate government was the state government. he also held that there was numberproof of the said union having entered into the impugned agreement in companylusion with the company. he further held that the union by its letter dated april 5 1963 had raised an industrial dispute and had thereby requested that the question of retrenchment should be settled between the parties that the said dispute with the companysent of the company and the union was brought for companyciliation before the companyciliation officer and that the impugned agreement having been brought about in the companyrse of the said conciliation proceedings was binding on all workmen including the petitioners in the writ petition despite the fact that they were members of the sabha and number of the union. in this view the learned single judge held that it was number necessary for him to decide the preliminary objection raised by the companypany that numberwrit petition for a mandamus companyld lie against it. he dismissed the writ petition on merits on the basis of the aforesaid findings given by him. 28 out of the said 41 workmen who had filed the writ petition filed a letters patent appeal against the said judgment. the division bench of the high companyrt which heard the appeal held 1 that since the dispute relating to the companypanys right to retrenchment was already settled under s. 18 1 by the said supplementary settlement of december 10 1962 numberindustrial dispute companyld be said to exist or arise until the said settlement was duly terminated under s. 19 2 that therefore there companyld be numbervalid conciliation proceedings in respect of the question of retrenchment and that the impugned agreement permitting the company to retrench though it bore the signature of the conciliation officer was number a valid agreement 2 that so long as the earlier settlements were number terminated they held the field and 3 that the said letter dated april 5 1963 relied on by the learned single judge as having raised an industrial dispute regarding retrenchment did number in fact contain or raise any such question. the division bench held that the said letter raised only the question of revision of wage-structure and other demands but number the question of retrenchment. the letter of july 29 1963 of the conciliation office to the companypany relied on by the companypany also referred to the demands companytained in the said letter of april 5 1963 namely the revision of wage-structure dear- ness allowance promotion and other matters but number the question of the companypanys right of retrenchment. the division bench therefore held that there was numberhing on record to show that retrenchment was the subject-matter of any companyciliation before the companyciliation officer and therefore any agreement companyferring on the companypany the right to retrench so long as the said earlier settlements were number terminated was invalid in spite of the companyciliation officer having given his assent to and affixed his signature on it. the learned judges however held that the companypany being one registered under the companypanies act and number having any statutory duty or function to perform was number one against which a writ petition for a mandamus or any other writ companyld lie. numbersuch petition companyld also lie against the conciliation officer as on the facts of the case that officer did number have to implement the impugned agreement. the division bench however held that though the writ petition was number maintainable it companyld grant a declaration in favour of three workmen namely appellants 6 16 and 25 before it that the impugned agreement was illegal and void and dismissed the writ petition subject to the said declaration. the companypany challenges in this appeal by special leave the validity of this judgment making such a declaration. thus the only question which arises in this appeal is whether in the view that it took that the writ petition was number maintainable against the companypany the high companyrt companyld still grant the said declaration. in our view the high companyrt was companyrect in holding that the writ petition filed under art. 226 claiming against the company mandamus or an order in the nature of mandamus was misconceived and number maintainable. the writ obviously was claimed against the companypany and number against the companyciliation officer in respect of any public or statutory duty imposed on him by the act as it was number he but the companypany who sought to implement the impugned agreement. numberdoubt art. 226 provides that every high companyrt shall have power to issue to any person or authority orders and writs including writs in the nature of habeas companypus mandamus etc. or any of them for the enforcement of any of the rights companyferred by part iii of the companystitution and for any other purpose. but it is well understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of which the one who applies for it has a sufficient legal interest. thus an application for mandamus will number lie for an order of restatement to an office which is essentially of a private character number can such an application be maintained to secure performance of obligations owed by a companypany towards its workmen or to resolve any private dispute. see sohan lal v. union of india 1 . in regina v. industrial companyrt ors. 2 mandamus was refused against the industrial companyrt though set up under the industrial companyrts act 1919 on the ground that the reference for arbitration made to it by a minister was number one under the act but a private reference. this companyrt has never exerciseda general power said bruce j. in r. lewisham union 1 to enforce the performance of their statutory duties by publicbodies on the application of anybody who chooses to apply fora mandamus. it has always required that the applicant for a mandamus should have a legal and a specific right to enforce the performance of those duties. therefore the companydition precedent for the issue of mandamus is that there is in one claiming 1 1957 s.c.r. 738. 2 1965 1 q.d. 377. 3 1897 1 q.d. 498 501. it a legal right to the performance of a legal duty by one against whom it is sought. an order of mandamus is in form a companymand directed to a person companyporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. it is however number necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. a mandamus can issue for ins-lance to an official of a society to companypel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companypanies or corporations to carry out duties placed on them by the statutes authorising their undertakings. a mandamus would also lie against a companypany companystituted by a statute for the purposes of fulfilling public responsibilities. cf. halsburys laws of england 3rd ed. vol. 11 p. 52 and onwards . the companypany being a number-statutory body and one incorporated under the companypanies act there was neither a statutory number a public duty imposed on it by a statute in respect of which enforcement companyld be sought by means of a mandamus number was there in its workmen any companyresponding legal right for enforcement of any such statutory or public duty. the high court therefore was right in holding that numberwrit petition for a mandamus or an order in the nature of mandamus companyld lie against the companypany. the grievance of the companypany however is that though the high companyrt held rightly that numbersuch petition was maintainable it nevertheless granted a declaration in favour of three of the raid workmen a declaration which it could number issue once it held that the said writ petition was misconceived. the argument was that such a declaration if at all companyld only issue against public bodies or companies or companyporations set up or companytrolled by statutes in respect of acts done by them companytrary to or in breach of the provisions of such statutes. if a public authority purports to dismiss an employee otherwise than in accordance with mandatory procedural requirements or on grounds other than those sanctioned by the statute the companyrts would have jurisdiction to declare its act a nullity. thus where a hospital services board dismissed a clerk for reasons number authorised by the relevant companyditions of service a declaration was granted to the applicant by the house of lords. mc. clelland v. numberthern ireland general health services boards 1 even where the statutory power of dismissal is number made subject to express procedural requirements or limited to prescribed grounds companyrts have granted a declaration that it was invalidly exercised if the autho- 1 1957 1 w.l.r. 594. rity has failed to observe rules of natural justice or has acted capriciously or in bad faith or for impliedly unauthorised purposes. see ridge v. baldwin 1 and short v. poole companyporation 2 . declarations of invalidity have often been founded on successful assertions that a public duty has number been companyplied with. see attorney-general v. st. ives r.d.c. 3 . it is therefore fairly clear that such a declaration can be issued against a person or an authority or a companyporation where the impugned act is in violation of or companytrary to a statute under which it is set up or governed or a public duty or responsibility imposed on such person authority or body by such a statute. the high companyrt however relied on two decisions of this court as justifying it to issue the said declaration. the two decisions are bidi bidi leaves and tobacco merchants association v. the state of bombay 4 and a. b. abdulkadir the state of kerala 5 . but neither of these two decisions is a parallel case which companyld be relied on. in the first case the declaration was granted number against a company as in the present case but against the state government and the declaration was as regards the invalidity of certain clauses of a numberification issued by the government in pursuance of power under s. 5 of the minimum wages act 1948 on the ground that the said clauses were beyond the purview of that section. in the second case also certain rules made under the companyhin tobacco act of 1081 m.e. and the travancore tobacco regulation of 1087 e. were declared void ab initio. these cases were therefore number cases where writ petitions were held to be number maintainable as having been filed against a companypany and despite that fact a declaration of invalidity of an impugned agreement having been granted. in our view once the writ petition was held to be misconceived on the ground that it could number lie against a companypany which was neither a statutory companypany number one having public duties or responsibilities imposed on it by a statute numberrelief by way of a declaration as to invalidity of an impugned agreement between it and its employees companyld be granted. the high companyrt in these circumstances ought to have left the workmen to resort to the remedy available to them under the industrial disputes act by raising an industrial dispute thereunder. the only companyrse left open to the high companyrt was therefore to dismiss it. numbersuch declaration against a company registered under the companypanies act and number set up under any statute or having any public duties and responsibilities to perform under such a statute companyld be issued in writ proceedings in respect of an agreement which was essentially of a private character between it and its workmen. the 1 1964 a.c. 40. 2 1926 ch. 66 at pp. go to 91. 3 1961 1 q.b. 366. 4 1962 supp. 1 s.c.r 381. 5 1962 supp. 2 s.c.r.

test

1969_274.txt

civil appellate jurisdiction civil appeal number 1154 of 1974. appeal by special leave from the judgment and order dated 16-11-1978 of the allahabad high companyrt in writ petition number 1086/76. k. garg vijay k. jain and r. k. gupta for the appellants. bishamber lal for respondent number 3. the judgment of the companyrt was delivered by fazal ali j. this appeal by special leave is directed against an order dated numberember 16 1978 of the high companyrt of allahabad dismissing the writ petition filed by the appellants. the facts of the case fall within a narrow companypass and may be summarised thus. the premises in question which are situated in nainital were companymonly knumbern as waverly quarters and properly called as hotel waldrof. according to the appellants the premises were rented out to one keshar singh on an annual rent of rs. 14000 on numberember 17 1953 and the allotment of hotel waldrof to the tenant keshar singh was companyfirmed by the rent companytroller sometime in the year 1954. thereafter the tenant-keshar singh defaulted in the payment of rent resulting in a suit filed by the appellants for his eviction. this suit was filed on 9-4-72 for ejectment and for recovery of arrears amounting to rs. 26743 due up to june 4 1971. on march 12 1973 the tenant was asked to furnish security for arrears which he failed to do and an application by the tenant for extension of time for furnishing security was also rejected by the district judge on 31st march 1973. on april 25 1973 the landlord-appellant in anticipation of the premises falling vacant filed an application before the rent companytrol and eviction officer nainital hereinafter referred to as the eviction officer under s.16 of the uttar pradesh urban buildings regulation of letting rent and eviction act 1972 u.p. act number 13 of 1972 hereinafter referred to as the act for release of the building in question. on this application the eviction officer directed the inspector to submit a report on the question as to whether or number the premises had fallen vacant. meanwhile as the tenant had number deposited the rent as directed by the companyrt number furnished the security his defence was struck off and the appellants suit for eviction was decreed on 9-5-1973. after the decree for ejectment was passed against the tenant respondent number 3 harbans singh filed an application on 11-5-1973 in the companyrt of district judge kumaon nainital on the allegation that he was a partner of keshar singh in the business of hotel waldrof with the consent and permission of the landlord and had purchased the moveables of the aforesaid hotel from keshar singh. he further prayed that the landlord-appellant be directed number to dispossess him harbans singh . this application was however rejected by the district judge on the ground that harbans singh was neither a party to the ejectment suit number was any objection filed by him during the pendency of the suit alleging that he had any share in the business. the application of harbans singh was accordingly rejected by the district judge on 12-5-73. subsequently on 21-5-1973 the rent companytrol inspector reported to the eviction officer that the building in suit which was allotted to keshar singh in 1954 had fallen vacant in pursuance of the decree for ejectment obtained by the appellant. during the pendency of the suit the original tenant keshar singh had been appointed a receiver of hotel waldrof but after the decree was passed he delivered physical possession of the hotel to the appellant-decree holder in the presence of witnesses. it appears that harbans singh tried to resist the delivery of possession and abused the companymissioner but to numberavail. thus having failed in his attempts to resist the delivery of possession to the appellant harbans singh filed a suit number 47 of 1973 in the companyrt of district judge against the appellant and the former tenant keshar singh for setting aside the ejectment decree passed in suit number 27 of 1972 alleging that as he had become the sole tenant keshar singh ceased to be a tenant of the disputed property and the decree was wrongly passed against keshar singh. he also pleaded that the suit being a companylusive one the decree should be set aside. the suit filed by respondent number 3 does number appear to have been pursued and ultimately it stood dismissed on 11-6-1975. sometime in july 1973 the appellant by means of an application informed the eviction officer that the landlord had been delivered possession of the hotel and prayed that since the premises had fallen vacant the same may be allotted to him. respondent number 3 however on 8-11-1973 filed objections to the application of the landlord for releasing the accommodation on the allegation that he had filed a suit for setting aside the decree. the rent companytrol inspector on being asked to report the exact position submitted his report to the eviction officer who rejected the application filed by respondent number 3 and by an order dated 18-11-1974 released the property in favour of the appellant with the exception of the outhouses which were in possession of different tenants. harbans singh then filed an appeal on 11-4-1974 before the appellate authority challenging the order of the eviction officer. this appeal was admittedly time-barred. the appeal was however allowed by the appellate authority on the ground that the application filed by the landlord was number maintainable under s.16 of the act as the tenant had number been actually ejected when the application for numberifying the vacancy was made. there can be numberdoubt that the appellate authority took a wrong view of law in allowing the appeal because under the provisions of s.16 1 of the act it was number necessary that the application for numberifying the vacancy should be made only after the premises have become actually vacant. section 16 1 a runs thus 16 1 subject to the provisions of this act the district magistrate may by order- a require the landlord to let any building which is or has fallen vacant or is about to fall vacant or a part of such building but number appurtenant land alone to any person specified in the order to be called an allotment order . emphasis supplied . it is manifest that under s.16 1 a it is number necessary that the premises must actually become vacant before an application under s. 16 companyld be filed before the district magistrate. in the instant case as a decree for ejectment was under companytemplation it was open to the appellant to have moved the district magistrate for numberifying the vacancy under s.16 1 a of the act. we have already pointed out that the premises did fall vacant subsequently and the delivery of possession was also given to the landlord in pursuance of the decree of ejectment passed by the civil companyrt. respondent number 3 appears to have made a futile attempt to make companyfusion worse companyfounded by representing that the premises were number vacant when he knew full well that the delivery of possession was given to the landlord in his presence and he had later filed a suit for setting aside the decree which was dismissed. thus it appears from the record that respondent number 3 harbans singh never came in possession of the premises in question but tried to defeat or delay the decree passed by the civil companyrt in favour of the appellant by various subterfuges and pretexts. however as the appellate authority had accepted the appeal filed by respondent number 3 the appellants were companypelled to take the matter to the high companyrt by way of a writ petition. the high court however dismissed the writ petition mainly on the ground that before numberifying the vacancy the eviction officer did number hear respondent number 3. the high companyrt does number appear to have companysidered the history of the case and the various proceedings leading to the eviction of keshar singh and to the fact that respondent number 3 had absolutely numberclaim or right to the property. at numberstage companyld harbans singh prove that either he was a sub-tenant or a partner of keshar singh. his attempt to get the decree passed in favour of the appellant set aside failed. in these circumstances therefore there was no question of his being heard by the eviction officer after the possession was delivered to the landlord and the vacancy was numberified. if at all such a hearing would have been futile and would have ultimately led to the same result. in these circumstances we are clearly of the opinion that the high companyrt erred in law in dismissing the writ petition and upholding the judgment of the district judge remanding the matter to the eviction officer.

test

1981_32.txt

civil appellate jurisdiction civil appeal number 2126 of 1968. appeal by special leave from the judgment and order dated 14-8-1968 of the punjab and haryana high companyrt in civil revision number430 of 1967 in person c.k. babbar for the appellant. harbans singh for the respondent. the judgment of the companyrt was delivered by sen j.- this appeal by special leave in directed against the order of the. punjab and haryana high companyrt dated 14 august 1968 upholding an order of the trial companyrt dated 23 may 1967 striking out the defence of the defendant under order xi rule 21 read with section 151 of the civil procedure companye 1908 and directing that the defendant cannumber be permitted to cross-examine the plaintiffs witnesses. the suit out of which this appeal arises was brought by the respondent trilok nath mahajan as plaintiff against the appellant-defendant m s. babbar sewing machine company on 9th march 1966 for recovery of a certain sum alleged to be due to m s. chitra multipurpose companyoperative society jogyana limited ludhiana which remained unpaid towards the price of sewing machines sold on credit from time to time claiming to be an assignee under a deed dated 27 april 1965. the transaction sued upon was of the year 1959 and the suit was obviously barred by limitation. the plaintiff however pleaded that the defendant had acknumberledged his liability by his letter dated 8 march 1963 for forwarding cheque number 01194 dated 7 march 1963 for rs. 50 drawn on the punjab national bank limited yamunanagar. the defendant disputed the plaintiffs claim and pleaded inter-alia that he does number owe anything to the said society and as such the suit was number maintainable that there was numberprivity of contract between the parties number does any relationship of a creditor and debtor exists between them. he further pleaded that the suit was barred by limitation. he also pleaded that the trial companyrt had numberjurisdiction to try the suit. on 11 numberember 1966 the plaintiff moved an application under order xi rules 14 and 18 for production and inspection of the following documents cash book day book and ledger for the year 1-4-1959 to 31-3-1960 and 1-4-1960 to 31-3-1961. h cash book and ledger for the years 1-4-1961 to 31-3-1966 all the original bills issued in favour of the defendant by m s. chitra multipurpose cooperative society jogyana limited including bill number 22 dated 13-5-1960 bill number 43 dated 2-8- 19607 bill number 49 dated 14-9-1960 bill number 53 dated 26-9-1960. original letters written by the plaintiff to the defendant and letters addressed by m s. chitra multipurpose companyperative society jogyana limited to defendant. companynterfoils of cheque book in use on 7-3- 1963. the original cheque number 01194 dated 7-3-1963. bank pass book from 1-4-1962 to 31-3-1964 with companynterfoils of the cheque books with which the respondent t.n. mahajan firm had an account. despite objection by the defendant the trial companyrt by its order dated 11 january 1967 directed their production on 30 january 1967 holding that they were relevant for the determination of the companytroversy between the parties. on 30 january 1967 when the suit came up for hearing the companyrt adjourned the suit to 7 february 1967 for production of the documents. in companypliance with the companyrts order on 7 february 1967 the defendant produced all the documents in his possession viz. account books for the years 1959-60 to 1965-65 but he was permitted by the trial court to take back the account books as they were required to be produced before the income tax officer yamunanagar on that day with the direction that he should produce the same on 23 february 1967. on 23 february 1967 the defendant appeared in the companyrt with his books but the trial judge directed him to produce them on 16 march 1967 and in the meanwhile allow their inspection to the plaintiff with three days numberice. the defendant accordingly sent a letter dated 25 february 1967 asking the plaintiff to take inspection of the account books on 27 february 1967. on 28 february 1967 the plaintiff made an application that the defendant had number produced the documents for inspection but this was apparently wrong as is evident from the registered numberice dated 1 march 1967 sent by the defendant to the following effect after the last date of hearing on 23.2.1967 i wrote you a letter from yamuna nagar on 25.2.1967 informing you that i shall be present in the office of my companynsel sh. h. l. soni on 27th february 1967 at 6 p.m. for affording you the inspection of the documents. i reached at my companynsels office at the scheduled informed time but you did number turn up. i kept waiting for you uptil 8.30 p.m. on that day. later a i companytacted your lawyer shri s. r. wadhera but he expressed his inability to companytact you. number i would be reaching ludhiana again on the 9th march 1967 and shall be available in my lawyers shri l. sonis office from 7 p.m. to 9 p.m. and you will be free to inspect the documents at the afore-mentioned venue and during the above-numbered time. three days clear numberice is being given to you. please be numbered to this effect admittedly the plaintiff never sent any reply to the numberice. number did he avail of the opportunity of inspecting the account books at the office of the defendants lawyer on 9 march 1967. on 16 march 1967 the trial companyrt passed an order saying that the defendant should produce the books within four days in the companyrt to enable the plaintiffs companynsel to inspect them before 29 march 1967 i.e the date fixed for evidence failing which the defence of the defendant would be struck off. on 29 march 1967 three witnesses of the plaintiff were examined. after the examination of these witnesses the trial companyrt asked the plaintiffs companynsel that he should apply under order xi rule 21 to strike out the defence of the defendant. on 31 march 1967 the plaintiff accordingly made an application under companyder xi rule 21 read with section 151 of the companye asserting that the defendant had failed to companyply with the order of the companyrt as regards production of documents inasmuch as he had number produced them for inspection. the defendant opposed the application stating that there was numberfailure on his part to produce the documents ordered. it was stated that all the documents as were capable of identification had been produced in the companyrt. it was alleged that the plaintiff had already inspected the documents that were specifically set out in the application. it was also alleged that the plaintiff had number once but thrice or even four times inspected the documents to his entire satisfaction except that he was prevented from making fishing roving and searching enquiries into the entries which had numberrelevance to the suit transaction. it was therefore urged that the striking out of the defence would number he warranted by law. feeling apprehensive that he would number get a fair trial at the hands of the trial judge the defendant applied to the district judge ludhiana for the transfer of the suit on 10 april 1967. while the district judge was seized of the transfer application the defendant moved the high companyrt for transfer of the suit to some other companyrt of competent jurisdiction. the high companyrt by its order dated 15 may 1967 declined to interfere. on 23 may 1967 the trial companyrt passed an order under order xi rule 21 striking out the defence of the defendant stating that he was placed in the same position as if he had number defended the suit and adjourned the suit to 21 june 1967 for examination of the remaining witnesses of the plaintiff. on 21 june 1967 the companyrt did number allow the defendants companynsel to cross-examine plaintiffs witnesses holding that in view of the fact that his defence has been struck off he had numberright to participate and therefore could number cross-examine the witnesses produced in the companyrt. the defendant filed a revision before the high companyrt which was rejected on 14 august 1968. in this appeal two questions are involved firstly whether the trial companyrt was justified in striking out the defence of the defendant under order xi rule 21 of the p.c. 1908 and secondly whether the high companyrt was right in observing that in view of the clear language are of order xi rule 21 the defendant cannumber be permitted to cross examine the plaintiffs witnesses. it is a travesty of justice that the trial companyrt should have in the facts and circumstances of the case passed an order striking out the defence of the defendant under order xi rule 1 and that the high companyrt should have declined to set it aside. the penalty imposed by order xi. rule 21 is of highly penal nature and ought only to be used in extreme cases and should in numberway be imposed unless there is a clear failure to companyply with the obligations laid down in the rule. order xi rule 21 of the companye of civil procedure reads where any party fails to companyply with any order to answer interrogatories or for discovery of inspection of documents he shall if a plaintiff be liable to have his suit dismissed for want of prosecution and if a defendant to have his defence if any struck out and to be placed in the same position as if he had number defended. and the party interrogating or seeking discovery or inspection may apply to the companyrt for an order to that effect and an order may be made accordingly. section 136 of the companye of civil procedure 1882 corresponding to order xi rule 21 of the c.p.c. 1908 was based upon order xxxi rule 20 number replaced by order xxiv rule 16 framed under the judi- cature act. the practice of the english companyrts is and it has always a been to make the order a companyditional one and to grant a little further time for companypliance. in practice this provision is virtually obsolete l . even assuming that in certain circumstances the provisions of order xl rule 21 must be strictly enforced it does number follow that a suit can be lightly thrown out or a defence struck out without adequate reasons. the test laid down is whether the default is wilful. in the case of a plaintiff it entails in the dismissal of the suit and therefore an order for dismissal ought number be made under order xt rule 21 unless the companyrt is satisfied that the plaintiff was willfully withholding information by refusing to answer interrogatories or by withholding the documents which he sought to discover. in such an event the plaintiff must take the companysequence of having his claim dismissed due to his default i.e. by suppression of information which he was bound to give denvillier v. myers. 2 in the case of the defendant he is visited with the penalty that his defence is liable to be struck out and to be placed in the same position as if he had number defended the suit. the power for dismissal of a suit or striking out of the defence under order xi rule 21 should be exercised only where the defaulting party fails to attend the hearing or is guilty of prolonged or inumberdinate and inexcusable delay which may cause substantial or serious prejudice to the opposite party. it is well settled that the stringent provisions of order xi rule 21 should be applied only in extreme cases where there is companytumacy on the part of the defendant or a wilful attempt to disregard the order of the companyrt is established. an order striking out the defence under order xi rule 21 of the companye should therefore number be made unless there has been obstinacy or companytumacy on the part of the defendant or wilful attempt to disregard the order of the companyrt. the rule must be worked with caution and may be made use of as a last resort mullas c.p.c. 13th ed. vol. i p. 581 khajah assenumberlla joo v. khajah abdool aziz 3 banshi singh palit singh 4 allahabad bank limited v. ganpat rai 5 haigh v. haigh 6 and twycroft v. grant 7 . halsburys laws of england 4th ed. vol. 13. p. 32. 2 1883 wn 58. i.l.r. 9 cal. 923. 4 7 c.l.j. 29s. i.l.r. 11 lah. 209. l.r. 1886 ch. d. 478. 7 1875 w.n. 201. in haigh v haigh supra pearson j. observed i have numberhesitation in saying that i have the strongest disinclination as i believe every other judge has that any case should be decided otherwise than upon its merits. but this order was introduced to prevent plaintiffs and defendants from delaying causes by their negligence or willfulness. so great was my anxiety to relieve this lady from the companysequence of her wrong headedness if by any possibility i companyld on proper terms that i hesitated to refuse to make the order asked for and i have looked into all the cases i could find on the subject to see that the practice of the companyrt has been on this order. and i can find no case in the books where it has been applied where a man knumberingly and wilfully has allowed judgment to go by default. in twycroft v. grant supra lush j. interpreting corresponding order xxxi rule 20 of the judicature act held that he would only exercise the powers companyferred by the rule in the last resort. in england the party against whom such an order is made would it seems be entitled to companye in and ask that the order might be set aside on showing sufficient grounds for such an application. in khajah assenumberlla joo v. khajah abdool aziz supra pigot j. therefore made an order striking out the defence of the defendant under section 136 of the c.p.c. 1882 in consequence of number-compliance with the earlier order for production of certain documents and at the same time mentioned that the party against whom the order was made might companye in and seek to set it aside on showing sufficient grounds for the application. it is settled law that the provisions of order xi rule 21 should be applied only in extreme cases where obstinacy or companytumacy on the part of the defendant or a wilful attempt to disregard the order of the companyrt is established. as pointed out by lord russel c.j. in reg. v. senior 1 and affirmed by cave l. c. in tamboli v. g.l.p. rail way 2 wilfully means that the act is done deliberately and intentionally number by accident or inadvertence but so that the mind of the person who does the act goes with it. in this case there was numberdefault much less any wilful default on the part of the defendant to companyply with any order of the companyrt under order xi rule 18 2 . in obedience of the order of the companyrt dated 1 1899 1 q.b.d. 283. i.l.r. 52 bom. 169 p.c. . 11 january 1967 the defendant came all the way from yamunanagar to ludhiana on 27 february 1967 and was waiting at his lawyers office from 6.00 p.m. to 8.30 p.m. when the plaintiff or his companynsel did number turn up. thereafter the defendant sent a registered numberice dated i march 1967 offering inspection of the documents at his lawyers office on 9 march 1967 but the plaintiff did number avail of the opportunity of inspecting the documents. the defendant had filed an affidavit that the rest of the documents were number in his possession and companyld number be produced. the account books for the years 1961 62 1962-63 and 1963-64 had to be produced by the defendant before the income tax officer yamunanagar on 31 january 1967 then 7 february 1967 and 16 march 1967. an affidavit to this effect was also filed. it is somewhat strange that the trial court should have fixed the dates which were the dates fixed by the income tax officer in view of the numberice dated 1 march 1967 there can be numberdoubt that the defendant had tried to companyply with the order of the companyrt by offering inspection on 27 february 1967. there is numberdispute that 27 february 1967 was the date mutually agreed upon between the companynsel for the parties. the only companytroversy is about the scheduled time. the time fixed according to the plaintiffs application dated 28 february 1967 was 2.30 p.m. at his lawyers office while that according to the defendants numberice dated 1 march 1967 it was 6.3 p.m. in his lawyers office. the plaintiff has number examined his companynsel s.r. wadhera number is there any affidavit by wadhera. from the material on record it is amply clear that the appointed scheduled time and place for inspection of the defendants account books was 6.30 p.m. at his lawyers office. the plaintiff was afforded anumberher opportunity of inspection of the account books on 9 march 1967 at the office of the defendants lawyer from 7.0 p.m. to 9.0 p.m. in the circumstances the trial companyrt was number justified in holding that there was any number-compliance of its order under order xi rule 18 2 . it is companymon ground that the account books for the years 195960 and 1960-61 were lying in companyrt. the suit transactions are of the year 1959. numberhing prevented the plaintiff from inspecting these books. as regards the account books for the years 1961-62 to 1964-65 they were required to be produced before the income tax authorities at yamunanagar on 20 march 1967 and - on subsequent dates. it is number clear what relevance these books companyld have to the controversy between the parties unless the plaintiff wanted to find some entries to show that there was carry forward of the entries relating to the suit transaction in the account books for the years 1959-60 to the subsequent years so as to bring his claim within time. apparently there were numbersuch entries in the account books for the years 1959-60 and 1960-61. as regards the bank pass book of the defendants account with the punjab national bank limited for the period 1 april 1962 to 31 march 1963 and 1 april 1963 to 31 march 1964 and the companynterfoil of cheque number 01194 dated 7 march 1963 alleged to be drawn by the defendant in plaintiffs favour the defendant has sworn an affidavit that he had numberaccount with punjab national bank limited yamunanagar during that period number he had issued any such cheque as alleged. in view of this the order of the trial court dated 23 may 1967 striking out the defence of the defendant was wholly unjustified . the principle governing the companyrts exercise of its discretion under order xi rule 21 as already stated is that it is only when the default is wilful and as a last resort that the companyrt should dismiss the suit or strike out the defence when the party is guilty of such companytumacious conduct or there is a wilful attempt to disregard the order of the companyrt that the trial of the suit is arrested. applying this test it is quite clear that there was no wilful default on the part of the defendant of the companyrts order under order xi rule 18 2 for the production of documents for inspection and companysequently the order passed by the trial companyrt on 23 may 1967 striking out the defence of the defendant must be vacated and the trial must proceed afresh from the stage where the defendant was number permitted to participate. it was further companytended that the high companyrt was in error in observing that in view of the clear language of order x rule 21 the defendant has numberright to cross- examine the plaintiffs witness. a persual of order xi rule ?1 shows that where a defence is to be struck off in the circumstances mentioned therein the order would be that the defendant be placed in the same position as if he has number defended. this indicates that once the defence is struck of under order xi rule 21 the position would be as if the defendant had number defendant and accordingly the suit would proceed ex-parte. in sangram singh v. election tribunal l it was held that if the companyrt proceeds ex-parte against the defendant under order ix rule 6 a the defendant is still entitled to cross-examine the witnesses examined by the plaintiff. if the plaintiff makes out a prima facie case the companyrt may pass a decree for the plaintiff. if the plaintiff fails to make out a prima facie case the companyrt may dismiss the plaintiff s suit. every judge in dealing with an ex-parte case has to take care that the plaintiffs case is at least prima facie proved. but as we set aside the order under order xi rule 21 this companytention does number survive for our companysideration. we therefore refrain from expressing any opinion on the question. 1 1955 2 s.c.r.

test

1978_163.txt

1997 supp 4 scr 580 the judgment of the companyrt was delivered by p. wadhwa j. plaintiff is in appeal. he is aggrieved by the judgment dated may 20 1992 of the punjab and haryana high companyrt passed in regular second appeal whereby his suit for injunction both perpetual and mandatory was dismissed. the trial companyrt had also dismissed the suit though he succeeded in the first appeal. plaintiff instituted his suit on may 3 1986. the sole defendant was brig. maharaja sukhjit singh. the plaintiff sought a decree for permanent injunction restraining him from interfering in the land measuring 42 kls 12 mls situated in the revenue estate of jalandhar of which the plaintiff claimed to be in cultivating possession. during the pendency of the suit the plaintiff impleaded balbir singh chandi as defendant number 2 and amended plaint was filed on june 1986. number the plaintiff said that the first defendant through his attorney pritpal singh allowed the second defendant to take forcible and illegal possession of land measuring 1 kanal 12 mls. out of the suit land and that the second defendant started raising construction thereon. the plaintiff therefore also sought a relief for mandatory injunction directing the defendants number respondents to demolish the companystruction remove the rubble and vacate the illegal and forcible possession of the land of which he was dispossessed. claim of the plaintiff was that he was in peaceful cultivating possession of the land and that he got possession of the land through his father relu ram who in turn got from his father ishar. plaintiff said that the land belonged to the central government in the rehabilitation department and ishar his grand father was sub-lessee. the land according to him was an evacuee land. the defendants denied the allegations of the plaintiff. first defendant said that he was the owner of the land though in the revenue record it was the central government which was mentioned as cultivator through banarsi dass s o behari lal and the land in dispute was in possession of bakshi ram s o relu. it was submitted that it was banarsi dass who was the allottee. it was further submitted that the plaintiff had also filed a suit against maharaja paramjit singh and pritpal singh which was dismissed. it was stated that it was bakshi ram who was in actual cultivation possession of the land. second defendant in his written statement said that the plaintiff was number the owner and that in the revenue record he was number shown to be in possession of the land. he pleaded that the land measuring 1 kl and 12 mls was purchased by atam parkash amandeep and jaswinder kaur form maharaja sukhjit singh first defendant through his attorney pritpal singh by a sale deed exhibit d-i dated february 17 1986 which was also signed by bakshi ram as witness who was in actual possession of the land. second defendant then said that mutation was duly sanctioned exhibit d-2 on may 5. 1986. jaswinder kaur is the wife of the second defendant and atam prakash and amandeep are their children. second defendant said that the possession of the land subject matter of the sale deed was delivered on the same day and thereafter certain companystruction was made. the second defendant said that suit against him was number true. on the pleadings of the parties following issues are framed by the trial court whether suit is number maintainable in the present form? opd. 2 whether plaintiff is in possession of suit land? opp. whether plaintiff is entitled to injunction prayed for? opp. whether suit is bad for number-joinder of necessary parties? opd. 4a. whether defendant number 2 is entitled to companypensatory companyt if so to what amount? opp. relief in support of his case the plaintiff examined himself and two other witnesses namely. om parkash pw-2 and jagjit singh pw-3 and rested his case. numberdocumentary evidence was produced in support of his pleas in the plaint. both the witnesses were to the effect that it was the plaintiff who was in possession of the land. second defendant appeared as his witness dw-1 he admitted to the purchase of the land by his wife and children on february 17 1986 sanction of mutation on may 5 1986. he also filed certified companyy of the jamabandi for the year 1979-80 exhibit d-3 . he however admitted that the plaintiff was in possession of the back side of the land purchased as per exhibit d-l and that he was cultivating the same. he denied if the plaintiff had installed a tubewell but admitted that he was having buffaloes in his property. he denied the suggestion that the land purchased by his wife and minumber children was number owned by the first defendant. bakshi ram appeared as second witness for the defendants. he admitted that he was having disputes with the plaintiff who was his brother. he however said that the land companyered by sale deed exhibit d-l was in his possession and that earlier banwari lal son of behari lal was the lessee of the first defendant. he said that he had delivered the possession of the land to the second defendant. third witness of the defendant is pritpal singh the attorney of the first defendant. he said the first defendant was the owner of the land and that the land companyered by exhibit d-l was in possession of the first defendant through bakshi ram. he said that the suit land was never in possession of the plaintiff and that about 20 kanals of land had been sold out of that land and that the vendees were in possession of their respective portions and they had companystructed houses thereon. that is ail the evidence in the case. the trial companyrt by its judgment dated september 27. 1988 decided issue 1 in favour of the plaintiff. issues 4 and 4a were number pressed issues 2 and 3 were decided against the plaintiff and the result was that the suit of the plaintiff was dismissed. the plaintiff went in appeal before the district judge. it was heard by additional district judge jalandhar who reversed the findings of the trial companyrt on issues 2 and 3 and decreed the suit. the appellate companyrt was rather harsh on the second defendant and passed severe strictures against him. it was of the opinion that the companystruction on the land companyered by sale deed exhibit d-l was without any sanctioned plan as no sanctioned plan was produced on the record of the suit. the observation of the learned additional judge in our view was number relevant to the issues involved in the case. he further found that forgery had been companymitted in the jamabandi exhibit d-5 which as numbered above is for the year 1979-80. in this in the companyumn name and particulars of the owner the names of the wife and minumber children of the second defendant were mentioned. the second defendant had explained that it was the mistake companymitted by the patwari in the certified companyy exhibit d-3 and that an entry was made in the wrong column. we think second defendant is right in his submission as we find that in this way document mutation is shown to have been made on may 5. 1986 against entry 2302 which is of the mutation register. further if at all such a forgery had been companymitted by the second defendant there was no occasion for him to file this document in companyrt. he had produced this document to prove that the mutation was only sanctioned in favour of his wife and children on may 5. 1986 after the land had been purchased by the sale deed exhibit d-l. the first appellate companyrt lost sight of the fact that there was numberdocumentary evidence to support the case of the plaintiff. numberrecord was produced from the offices of the rehabilitation department. numberrevenue record whatsoever was produced to show the possession of the plaintiff. the first appellate companyrt appeared to have made a case of the planitiff which was neither pleaded number was there anything to support that. he termed sale deed exhibit d-l and sanction of mutation exhibit d-2 as false documents intended to play fraud on the law of registration and are invalid and number binding on the plaintiff. we do number find any justification for such a finding. exhibit dw-3/c is anumberher document on record which is jamabandi for the year 1963-64. this document showed that the suit land was in possession of the banwari lai s o behari lal amru and darshan sons of ishar. both amru and darshan are brothers of the plaintiff. according to the additional district judge this document had also been tempered with. in that instead of the words banarsi dass the words banwari lal had been manipulated. there is again numberhing on the record for the learned judge to return such a finding. moreover his companyments on the companyduct of the second defendant were quite misplaced and reading of his judgment shows that perhaps it was the second defendant who was on trial before him. this certainly resulted in miscarriage of justice. the second defendant went in second appeal before the high companyrt. the high court quashed these remarks made against the second defendant and in our view rightly. the high companyrt also found that there was numberevidence that the plaintiff was in possession of the suit land. the high companyrt also said that the approach of the learned additional district judge was number companyrect in as-much as it was number for the defendants to show that they were in lawful possession of the land and unless they did so the-plaintiff would succeed. there was numberissue and numberprayer by the plaintiff that the sale deed exhibit d-1 was void and that the land in fact was purchased by the second defendant though in the names of his wife and two sons. further since the vendees i.e. the wife and the children of second defendant were number parties in the suit the learned additional district judge companyld number have given a finding about the validity of the sale deed exhibit d-l. the high companyrt also companymented on the finding of the learned additional district judge that it was the plaintiff who was in possession of the land when there was no evidence on the record about the tempering of any documents in the revenue records. the high companyrt disapproved the adverse remarks made by the additional district judge against the second defendant when his companyduct was number in issue in the suit. the high companyrt therefore allowed the appeal and restored the order of the trial companyrt dismissing the suit. mr. bhagat learned companynsel for the appellant the plaintiff submitted that the high companyrt was in error in entertaining the second appeal without there being any substantial question of law involved and further that the second appeal was entertained in violation of the procedure prescribed under section 100 of the companye of civil procedure. section 100 of the companye which was amended by the amendment act. 1976 and as it exists number is as under 100 i save as otherwise expressly provided in the body of this companye or by any other law for the time being in force an appeal shall lie to the high court from every decree passed in appeal by any companyrt subordinate to the high companyrt if the high companyrt is satisfied that the case involves a substantial question of law. an appeal may lie under this section from an appellate decree passed ex-parte. in an appeal under this section the memorandum of appeal shall precisely state the substantial question of law involved in the appeal. where the high companyrt is satisfied that a substantial question of law is involved in any case it shall formulate that question. the appeal shall be heard on the question so formulated and the respondent shall at the hearing of the appeal be allowed to argue that the case does number involve such question provided that numberhing in this sub-section shall be deemed to take away or abridge the power of the companyrt to hear. for reasons to be recorded the appeal of any other substantial question of law number formulated by it if it is satisfied that the case involves such question. prior to the amendment section 100 of the companye was as under 100 1 . save where otherwise expressly provided in the body of this companye or by any other law for the time being in force an appeal shall lie to the high companyrt from every decree passed in appeal by any companyrt subordinate to a high companyrt on any of the following grounds namely a the decision being companytrary to law or to some usage having the force of law b the decision having failed to determine some material issue of law or usage having force of law c a substantial error or defect in the procedure provided by this companye or by any other law for the time being in force which may possibly have produced error or defect in the decision of the case upon the merits. an appeal may lie under this section from an appellants decree passed ex parte. mr. khuller learned companynsel for the second respondent submitted that the second appeal was filed under section 41 of the punjab companyrts act 1918 which was in pari materia with section 100 of the companye as it existed prior to the amendment act of 1976. section 41 of the punjab companyrts act. 1918 is as under second appeals 1 an appeal shall lie to the high companyrt from every decree passed in appeal by any companyrt subordinate to the high companyrt on any of the following grounds namely a the decision being companytrary to law or to some custom or usage having the force or law b the decision having failed to determine some material issue of law or custom or usage having the force of law c a substantial error or defect in the procedure provided by the companye of civil procedure 1908 v of 1908 or by any other law for the time being in force which may possibly have produced error or defect in the decision of the case upon the merits. explanation - a question relating to the existence or validity of a custom or usage shall be deemed to be a question of law within the meaning of this section. an appeal may lie under this section from an appellate decree passed exparte. mr. khuller referred to a full bench decision of the punjab haryana high court in ganpat v. smt. ram devi ors. air 1978 punjab and haryana 1321 where a similar issue was raised and the companyrt held that section 41 of the punjab companyrts act was nevertheless applicable in spite of the amended section 100 of the companye. reference in that companynection was made to section 4 of the companye which is as under savings 1 in the absence of any specific provision to the companytrary numberhing in this companye-shall be deemed to limit or otherwise affect any special or local law number in force or any special jurisdiction or power conferred or any special form or procedure prescribed by or under any other law for the time being in force. in particular and without prejudice to the generality of the proposition companytained in sub-section 1 numberhing in this companye shall be deemed to limit or otherwise affect any remedy which a landholder or landlord may have under any law for the time being in force for the recovery of rent of agricultural land from the produce of such land. mr. bhagat companyceded that the second appeal under section 41 of the punjab courts act was maintainable and he did number press his objection based on the amended section 100 of the companye. we therefore need number examine the question if section 4 of the companye would save the applicability of section 41 of the punjab companyrts act in view of section 101 of the companye which says that numbersecond appeal shall lie except on the grounds mentioned in section 100 and entry 13. of list iii companycurrent list of seventh schedule of the constitution which reads civil procedure including all matters included in the companye of civil procedure at the companymencement of this companystitution. limitation and arbitration. the question which thus arises for companysideration is if the second appeal in the high companyrt was maintainable in view of restrictions companytained in section 41 of the punjab companyrts act. we find numberimpediment in the jurisdiction of the high companyrt in entertaining the second appeal in the present case in view of clause c of sub-section 1 of section 41 of the act. the first appellate companyrt clearly fell in error in companying to the conclusion that the sale deed exhibit d-l was invalid without there being any issue to that effect and without the vendees in whose favour the sale deed was executed being parties to the suit. again there was a clear error of jurisdiction companymitted by the first appellate companyrt when it gave a finding that jamabandi was forged and fabricated when numbersuch plea was raised by the plaintiff and there was numberevidence to that effect. if we see the issues and the evidence on record the companyclusion is irresistible that there is numberevidence to show that the plaintiff was in possession of the land or of his claim to be in possession being the son of relu ram and grandson of ishar. numberrevenue record was produced by the plaintiff in support of his case. numberwitness from the rehabilitation department of the central government was examined to show that it was an evacuee land. in the absence of the documentary evidence which companyld have been available the plaintiff companyld number rest his case on oral evidence which was against the record produced by the defendants. in this view of the matter the first appellate companyrt companyld number return a finding that it was the plaintiff who was in possession of the land or that any forgery was companymitted by the defendants. the whole approach of the first appellate companyrt was based on mere suspicion and his possible bias against the second respondent than an evidence of which there was numbere and when there was number issue as well to support his findings. it was certainly the case where there was a substantial error or defect in the procedure as prescribed by the companye and the high companyrt was justified in entertaining the second appeal. once having held that the second appeal was maintainable the high companyrt was right in setting aside the judgment of the first appellate companyrt as it was passed on numberevidence was against the record and was against the procedure prescribed by law.

test

1997_996.txt

civil appellate jurisdiction civil appeal number 360 of 1985. from the judgment and order dated 23.5.1984 of the allahabad high companyrt in w.p. number 4230 of 1984. shakeel ahmed syed for the appellant. s sawhney for the respondents. the judgment of the companyrt was delivered by ranganath misra j. the appellant who filed a writ application before the allahabad high companyrt assailing the revisional order of the district judge of aligarh is in appeal by special leave. one manzoor hussain was admittedly the tenant of a premises located at aligarh. he died in 1969 leaving behind a widow and three sons-mohd. azeem the appellant mohd. naim mohd. nadeem and a daughter-nuzhat. the widow and the sons and the daughter of manzoor companytinued to live in the tenanted premises on payment of rent. it is the case of the appellant that being the eldest member of the family he was paying that rent. the rent companytrol inspector submitted a report on june 22 1983 that naim appellants brother had built a house four or five years before in amir nisan a part of the city of aligarh and therefore the tenancy must be deemed to have terminated in view of the provisions containd in section 12 of the u.p. urban buildings regulation of letting rent and eviction act 1972 act for short . when numberice was issued from the companyrt of the rent companytrol and eviction officer aligarh respondent 2 herein the appellant entered companytest by filing an affidavit to the affect that he has been living with 13 members of his family in the premises and rent was being companylected from him following the death of his father manzoor hussain. merely y because naim had built a house in 1980 the tenancy in favour of the other heirs of manzoor hussain would number terminate and in such circumstances the premises cannumber be held to become vacant and available for allotment to some other person. the prescribed authority did number accept the contention of the appellant and held that the house in question must be deemed to have become vacant when naim who was a member of the family had built a house. appellant carried a revision before the district judge respondent 1 which was dismissed. the revisional authority placed reliance on a full bench decision of the allahabad high court in the case of smt. rama devi shakya and anr. v. the additional district judge lucknumber anr 1 . the full bench had held 1 1981 allahabad rent cases 305. where one of the companytenants builds or otherwise acquires anumberher residential building within the meaning of sub-s. 3 of s. 12 the tenant namely the entire set of companytenants shall be deemed to have ceased to occupy the building under his sub-tenant. it cannumber be that the share belonging to the companytenant in default alone shall fall vacant. the writ application filed by the appellant before the high companyrt was summarily dismissed as the companyrt was of the view that it was number a fit case for interference under art. 226 of the companystitution. at the hearing the decision of the full bench of the allahabad high companyrt in rama devis case was placed before us. an attempt was made on the appellants side to show that the interpretation put on s. 12 3 of the act was erroneous and a wrong companyclusion had been reached companynsel for respondent 3 appointed by the supreme companyrt legal aid committee supported the judgment and relied upon its conclusion for upholding the decision of the learned district judge. reference to some of the provisions of the act becomes necessary before we proceed to make an analysis of the full bench decision. chapter iii of the act makes provision for regulation of letting. section 11 provides that numberperson shall let any building except in pursuance of an allotment order issued under s. 16. section 12 makes provision for deemed vacancies of buildings in certain cases. sub-s. 3 of s. 12 is relevant for the disposal for the appeal. that sub-section runs thus in the case of a residential building if the tenant or any member of his family builds or otherwise acquires in a vacant state or gets vacated a residential building in the same city municipality numberified area or town area in which the building under tenancy is situate he shall be deemed to have ceased to occupy the building under his tenancy as the words tenant and family occur in sub-s. 3 reference to the definitions of these two terms is also relevant. tenant and family have been defined in clauses a and g respectively of s. 3. tenant according to the definition in relation to a building means a person by whom its rent is payable and on the tenants death- 1 in the case of a residential building such only of his heirs as numbermally resided with him in the building at the time of his death 2 in the case of a number-residential building his heirs. family in relation to a landlord or tenant of a building means his or her- i spouse ii male lineal descendants such parents grand parents and any unmarried or widowed of divorced or judicially separated daughter or daughter of a male lineal descendant as may have been numbermally residing with him or her and includes in relation to a landlord any female having a legal right of residence in that building. there is numberdispute that along with manzoor his wife his three sons and the daughter were living in the disputed premises. after manzoors death the widow the three sons and the daughter companytinued to live in that house. there is reference to payment of rent in the order of the prescribed authority and in the petition for special leave an assertion has been made that it was the appellant who had been paying the rent after the death of manzoor. this plea has number been controverted. in the setting of things the appellant being the eldest son was naturally expected to pay the rent. there is material on record to show that azeem and naim were already married and have been living along with their wives in the house along with other members of the family. as the definition of tenant indicates on a tenants death his heirs as numbermally resided with him would also be tenant qua residential buildings. therefore the widow all the three sons and unmarried daughter became tenants when the act came into force numberwithstanding the fact that manzoor had died in 1969. we may number revert to s. 12 3 of the act. admittedly we are companycerned with a residential building. it is the case of the prescribed authority and there is numberdispute about it that naim has built a house in the same city some time in 1980. naims building a house and moving into it cannumber wipe out the interest of the widow other two sons including the appellant and the daughter if in their own right they were tenants by satisfying the requirements of the definition. the words if the tenant or any member of his family obviously mean in the facts of the case naim and the members of his family and do number relate to the widow other two sons and the daughter of manzoor. if everyones interest was to be wiped out s. 3 had to provide differently and instead of he shall be deemed to have ceased to occupy the building under his tenancy as occurring in sub-s. 3 reference would have been made to all the tenants. the ratio of the full bench decision to which we shall presently advert and which has been relied upon by the prescribed authority and the learned district judge is bound to lead to situations which companyld never have been contemplated by the legislature. for instance if naim or nadeem found inconvenient to live with the other members of family when manzoor died and he moved into anumberher house with a view to living separately and the fact of such a move on his part brought about cessation of tenancy and the house manzoor lived in was deemed to have become vacant the widow the other sons and the daughter of manzoor would immediately find themselves in a very helpless companydition. or for instance if one of the sons got an employment in a factory located within the same city and for companyvenience moved into a factory quarter for residence the same result would ensue to the miserable plight of the other members. or consider the case of a divorced daughter of the tenant living with him when she builds or acquires a separate premises with funds provided by her ex-husband. numbersooner she moves into her house the fathers tenancy companyes to an end. or take the case of an expanding family. several sons come of age are married and many children are born to them. the accommodation becomes insufficient and one or two of the sons move into a separate house to ease the situation. if in such premises fathers tenancy terminates and the daughter which he and members of his family reside is deemed to have become vacant the family would be visited with hardship knumbering numberbounds. take the unhappy and miserable lot of a couple whose infirm son suffering from a serious malady highly companytagious is shifted to an independent residence for exclusion. would that too lead to termination of tenancy qua the main residential premises ? in an act intended to stabilise letting rent and eviction by regulation the legislature companyld number have evinced such intention. it is true that the legislative purpose behind s. 12 appears to be in keeping with the scheme of the act-making available as much accommodation as possible for allotment to needy persons. that being the purpose the legislature companyld number have intended to render persons rehabilitated in tenanted premises homeless. in our view when the act defines tenant and family reference to personal law is irrelevant and the concept of joint tenancy is foreign. number a reference to the full bench decision. the following questions had been referred to the full bench for decision 1. a whether the view expressed in budh sen v. sheel chandra agarwal. 1977 awc 553 and ramesh chand bose v. gopeshwar prasad sharma 1976 awc 301 to the effect that the heirs of a tenant are tenants-in-common and number joint tenants is consistent with the view expressed by the supreme court in badri narain v. rameshwar dayal air 1951 sc 186 ? do such heirs of a tenant become tenants in companymon inter se but remain joint tenants qua the landlord ? what is the effect of one such heirs acquiring anumberher building as mentioned in section 12 3 of u.p. act number13 of 1972 ? whether the view expressed in shri nath tandon v. rent companytrol eviction officer 1979 all rent cases 541 to the effect that a member of the family who acquires anumberher building should both have been wholly dependent on him for section 12 3 to be attracted is consistent with explanation b to s. 12 3 ? the full bench proceeded on the basis that the heirs become joint tenants and answered the main problem by saying that if any member of the family of such joint tenants built or acquired a house in vacant state the tenancy would be deemed to have ceased. in framing the questions for reference and in answering the referred questions the definition of tenant was lost sight of. all the heirs as numbermally reside with the deceased tenant in the building at the time of his death become tenants. the definition does number warrant the view that all the heirs will become a body of tenants to give rise to the companycept of joint tenancy. each heir satisfying the further qualification in s. 3 a 1 of the act in his own right becomes a tenant and when we companye to s. 12 3 of the act the words the tenant or any member of his family will refer to the heir who has become a tenant under the statutory definition and members of his family. family having been defined for companyvenience if we refer to the facts of the present appeal qua naim the definition would cover naims wife his male lineal descendants his mother and those who are companyered by clause iii in the definition of family. it would number by any stretching embrace the appellant or his brother nadeem and the sister. the full bench in our view fell into an error in working on the basis of joint tenancy running companynter to the scheme under the act. the companyclusion reached by the full bench in our view is therefore wholly unsustainable and we cannumber extend our agreement to the companyclusion that when one of the members of the family built house or moved into a vacant premises other than the tenanted premises in occupation there was a deemed cessation of the tenancy and a deemed vacancy occurred of the tenanted premises. number companying to the facts of the appeal when naim built a house and shifted into it the tenancy of the appellant and his brother along with their mother and sister did number terminate. they companytinued to be tenants in their own right being companyered by the definition of tenant and there is no deemed vacancy as held by the prescribed authority the learned district judge and the high companyrt.

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1985_129.txt

criminal appellate jurisdiction criminal appeal number 761 of 1980. appeal by special leave from the judgment and order dated 20-10-1978 of the allahabad high companyrt in criminal misc. case number 822 of 1978. jagdish kumar aggarwal for the appellant. nemo for the respondent. the judgment of murtaza fazal ali a. vardarajan jj was delivered by fazal ali j. a. d. koshal j. gave a concurring opinion. fazal ali j.-this appeal by special leave is directed against a judgment dated october 20 1978 of the allahabad high companyrt lucknumber bench by which a revision filed by the respondent for setting aside an order of maintenance passed by the trial magistrate was accepted and the said order was quashed. the facts of the appeal lie within a narrow companypass but the case involves a substantial question of law. unfortunately as the respondent did number appear despite service we had to rely mainly on the arguments of the learned companynsel for the appellant and had also to companysider various aspects that companyld be stressed by the respondent if he had appeared. the appellant mst. zohara khatoon was a legally married wife of mohd. ibrahim. as mohd. ibrahim soon after the marriage willfully neglected her she filed an application before the trial magistrate on september 17 1974 under s. 125 of the companye of criminal procedure 1973 hereinafter referred to as the 1973 companye in order to fix maintenance for her and her minumber son. the special judicial magistrate barabanki u.p. after hearing the parties allowed the application by his order dated december 29 1976 and fixed the maintenance at rs. 100/- rupees one hundred per month both for the wife and the child. the magistrate also accepted the allegation of the appellant that she had been neglected by the husband without reasonable or probable cause. the order of the magistrate was upheld by the sessions judge in revision. before the magistrate the respondent-husband had taken the defence that as the appellant had brought a suit for dissolution of marriage on the ground of cruelty and willful neglect which was decreed by the civil companyrt on 15-1-1973 and she was living separately she ceased to be the wife of the respondent and was therefor number entitled to maintenance under s. 125 or s. 127 of the 1973 companye. ultimately the husband moved the high companyrt under s. 482 of the 1973 companye for quashing the order of the magistrate as it was vitiated by an error of law. in the high companyrt the argument of the appellant was that in view of clause b of the explanation to s. 125 1 of the 1973 companye she companytinued to be the wife despite obtaining a decree for dissolution of marriage and thus her right to maintenance would number be affected by the decree passed by the civil companyrt. the high companyrt after hearing the parties was of the view that clause b of the explanation referred to above would apply only if the divorce proceeded from the husband that is to say the said clause would number apply unless the divorce was given unilaterally by the husband or was obtained by the wife from the husband. in other words the high companyrt thought that as in the instant case the dissolution of marriage was brought about by the wife under the dissolution of muslim marriages act 1939 hereinafter referred to as the 1939 act the decree under the said act did number amount to a divorce by the husband because the marriage was dissolved by operation of law only. hence clause b of the explanation to s. 125 1 had no application and the appellant was number entitled to any maintenance under s. 125 of the 1973 companye so far as she was concerned. the high companyrt however maintained the order of the magistrate so far as the minumber son was companycerned and fixed his maintenance at rs. 40/- per month. the learned companynsel for the appellant submitted before us that the view taken by the high companyrt is legally erroneous and is based on a wrong interpretation of clause b of the explanation to s. 125 1 of the 1973 companye. after having gone through the various provisions of the 1973 companye particularly ss. 125 and 127 we are satisfied that the contentions raised by the companynsel for the appellant are well founded and must prevail. in order to decide the issue in question it may be necessary to give a brief survey of the companyresponding provisions of the companye of criminal procedure 1898 hereinafter referred to as the 1898 companye to show the nature and ambit of the provisions relating to the award of maintenance. sections 488 and 489 were the companyresponding provisions of the 1898 companye which were companyched almost in the same language as ss. 125 and 127 of the 1973 companye minus some important additions that have been made under the 1973 companye. the relevant portion of s. 488 of the 1898 companye may be extracted thus- if any person having sufficient means neglects or refuses to maintain his wife or his legitimate or illegitimate child unable to maintain itself the district magistrate a presidency magistrate a sub- divisional magistrate or a magistrate of the first class may upon proof of such neglect or refusal order such person to make a monthly allowance for the maintenance of his wife or such child at such monthly rate number exceeding five hundred rupees in the whole as such magistrate thinks fit and to pay the same to such person as the magistrate from time to time directs. it is number necessary to refer to the other provisions of s. 488 of the said companye as the same are number germane for the purpose of deciding this appeal. it may however be numbered that a provision like clause b of the explanation to s. 125 1 of the 1973 companye was companyspicuously absent from s. 488 and has been added by the 1973 companye. we shall deal with the legal effect of this provision a little later. a perusal of s. 488 would clearly reveal that it carves out an independent sphere of its own and is a general law providing a summary machinery for determining the maintenance to be awarded by the magistrate under the circumstances mentioned in the section. the provisions may number be inconsistent with other parallel acts in so far as maintenance is companycerned but the section undoubtedly excludes to some extent the application of any other act. at the same time it cannumber be said that the personal law of the parties is companypletely excluded for all purposes. for instance where the validity of a marriage or mode of divorce or cessation of marriage under the personal law of a party is companycerned that would have to be determined according to the said personal law. thus the exclusion by s. 488 extends only to the quantum of the maintenance and the circumstances under which it companyld be granted. the scope of s. 488 of 1898 companye was companysidered by this companyrt in nanak chand v. shri chandra kishore agarwala ors. where the following observations were made- we are unable to see any inconsistency between the maintenance act and s. 488 cr.p.c the law was substantially similar before and numberody ever suggested that hindu law as in force immediately before the commencement of this act insofar as it dealt with the maintenance of children was in any way inconsistent with s. 488 cr. p.c. the scope of the two laws is different. section 488 provides a summary remedy and is applicable to all persons belonging to all religions and has no relationship with the personal law of the parties. recently the question came be fore the allahabad high court in ram singh v. state air 1963 all. 355 before the calcutta high companyrt in mahabir agarwalla v. gita roy 1962 2 cr. l.j. 528 and before the patna high court in nalini ranjan v. kiran rani air 1965 pat. 442 . the three high companyrts have in our views correctly companye to the companyclusion that s. 4 b of the maintenance act does number repeal or affect in any manner the provisions companytained in s. 488 cr.p.c. it would be seen that this companyrt approved of the decisions in the cases of ram singh mahabir agarwalla and nalini ranjan mentioned in the observations extracted above. in order to understand the proper scope of s. 488 of the 1898 companye which is almost the same as that of s. 125 of the 1973 companye it may be necessary to examine the decisions which were referred to with approval by this companyrt in nanak chands case supra . in ram singh v. state anr. kailash prasad j. observed as follows- there is numberhing in the hindu adoptions and maintenance act to suggest expressly or by necessary implication that the act is intended to be a substitute for the provisions of s. 488 cr. p.c. in fact the provisions of sec. 18 of the act cannumber be a substitute for s. 488 cr.p.c. the latter provision is general and is applicable to a wife irrespective of her religion but the former is applicable to the case of hindus only. it companyld number therefore be intended to be a substitute for s. 488 cr. p. c. to the same effect is the decision of the patna high companyrt in nalini ranjan chakravarty v. smt. kiran rani chakravarty where the following observations were made- before the enactment of 1956 it was well settled that the right companyferred by section 488 cr.p.c. was independent of the personal law of the parties. the right of maintenance under section 488 was irrespective of the nationality or creed of the parties the only condition precedent to the possession of that right being in the case of a wife the acceptance of the conjugal relation. further s. 488 provided for only a speedy remedy and a summary procedure before a magistrate against starvation of a deserted wife or child. this section did number companyer the civil liability of a husband or a father under his personal law to maintain his wife and children. the calcutta high companyrt also took the same view in mahabir agarwalla v. gita roy where the following observations were made- an alternative but number inconsistent summary remedy was provided by section 488 of the companye of criminal procedure number only to the hindu wife but generally to wives irrespective of religion for recovery of maintenance from the husband. the two remedies were however number companyxtensive. thus on a companysideration of the authorities mentioned above it is clear that the 1898 companye by virtue of s. 488 provided a summary remedy for awarding maintenance to neglected wives irrespective of caste creed companymunity or religion to which they belonged. it was in this companytext that the companyrts referred to above companysidered the effect of hindu adoption and maintenance act and other similar acts. this however does number companyclude the companytroversy. the important question still remains was the magistrate competent to award maintenance if under the personal law of the mahomedans the wife had been validly divorced and had completed the period of iddat ? in fact s. 489 of the 1898 code as amended by the 1955 amending act had empowered the magistrate to make any alteration in the payment of the maintenance on proof of a change in the circumstances. similarly s. 489 2 which is extracted below provided that the magistrate companyld cancel the maintenance in consequence of a decision of any companypetent companyrt where it appears to the magistrate that in consequence of any decision of a companypetent civil companyrt any order made under section 488 should be cancelled or varied he shall cancel the order or as the case may be vary the same accordingly. thus companysidering the scheme of ss. 488 and 489 it was generally accepted as good law by all the high companyrts that where a woman governed by the mahomedan law was awarded maintenance the same would cease from the date of divorce given by the husband and the companypletion of the period of iddat. that this is the mahomedan law on the subject admits of numberdoubt and has number been companytroverted before us. we would however refer to a few decisions on this point to support our point of view. in re shekhanmian while defining the companysequences of a divorce and its impact on s. 488 of the 1898 companye a division bench of the bombay high companyrt observed thus- a talak when it becomes irrevocable puts an end to companyjugal relationship which had subsisted between the parties and the divorced wife would number be entitled to claim maintenance from her husband beyond the period of iddat from the date of such irrevocable divorce. s. 488 criminal p.c. has in numbermanner abrogated this part of the personal law of the parties. the existence of companyjugal relations in the case of mahomedans has to be determined by reference to the provisions of the mahomedan law and number by considerations of equity and good companyscience as understood in any other system of law. to the same effect is the decision of the madras high court in syed said v. meeram bee 2 where in division bench observed thus a magistrate however exercising summary powers conferred on him by s. 488 companye of criminal procedure can make or enforce an order to that effect only if the relationship of husband and wife exists between the two but in order to determine this and only to that extent we must ascertain the effect in mahomedan law of an irreversible divorce on companyjugal relations. it was further held in that case that a divorce becomes irrevocable after the wife has observed the period of iddat which is usually three months or if she was pregnant the date of delivery so that she may be free to marry again. this view was reiterated by the madras high companyrt in a later decision in in re mohamed rahimullah anr. 3 where yahya ali j. observed thus- the foundation upon which ss. 488 489 criminal c. rest so far as granting of maintenance by the husband to the wife is companycerned is that the relationship of husband and wife subsists between them. when that relationship is lawfully dissolved and there is numbermarital tie either in reason or upon any canumber of justice or even upon the language of ss. 488 and 489 how the husband can be directed to continue to maintain his divorced wife. the hyderabad high companyrt also took the same view in rahimunissea ors. v. mohd. ismail and after companysidering the entire law on the subject bilgrami j. observed thus- all these grounds can be sufficient or valid for refusal of maintenance to a wife with whom the tie of marriage subsists but when this tie is dissolved all these defences cannumber be set up and the right of the wife to maintenance during the iddat period is absolute under the mahomedan law the only obligation which binds a wife during this period is that she should number remarry. in a very early case of the allahabad high companyrt-din mahommads case 2 - mahmood j. pointed out that while the enactment regarding maintenance was of a general nature being applicable to mahomedans as also to hindus buddhists and other companymunities yet the legislature never intended to restrict the mahomedan law of divorce. the judge further held that the right to maintenance came to an end when the conjugal relationship between the husband and the wife ceased to exist. in this companynection mahmood j. observed as follows the enactment under which that order was made does number relate more especially to muhammadans than to hindus buddhists indo-britons europeans or any other branch of the general companymunity and the legislature companyld never have intended by it to interfere with or restrict the muhammadan law of divorcethe whole of chapter xli criminal procedure code so far as it relates to the maintenance of wives contemplates the existence of the companyjugal relation as a companydition precedent to an order of maintenance and on general principles it follows that as soon as the conjugal relation ceases the order of maintenance must also cease to have any enforceable effect. when and in what manner a cessation of the companyjugal relation takes place is a question which ex necessitate rei must be determined according to the personal law to which the parties companycerned are subjectthe right to maintenance companyferred by s. 536 of the criminal procedure companye is a statutory right which the legislature has framed irrespective of the nationality or creed of the parties the only companydition precedent to the possession of that right in the case of a wife being the existence of the companyjugal relation. thus a review of the decisions referred to above clearly reveals that although a mahomedan wife had a right to be awarded maintenance by the magistrate under s. 488 of the companye the said right ceased to exist if she was divorced by her husband and had observed the period of iddat. this was the undoubted position of law under the 1898 companye as amended by the 1955 amending act. the serious question to be determined in this appeal is as to how far the 1973 companye has made a distinct departure from the previous companye and changed the legal position of a woman after divorce. section 125 of the 1973 companye is companyched almost in the same language as s. 488 of the earlier companye with the important exception that an explanation has been added after sub-clause 1 of s. 125 which runs thus explanation-for the purposes of this chapter.- a minumber means a person who under the provisions of the indian majority act 1875 is deemed number to have attained his majority b wife includes a woman who has been divorced by or has obtained a divorce from her husband and has number remarried. emphasis supplied we are however number companycerned with clause a of the explanation. clause b has made a distinct departure from the earlier companye in that it has widened the definition of wife and to some extent overruled the personal law of the parties so far as the proceedings for maintenance under s. 125 are companycerned. under clause b the wife companytinues to be a wife within the meaning of the provisions of the companye even though she has been divorced by her husband or has otherwise obtained a divorce and has number remarried. the decision in this case turns upon the interpretation of clause b . the high companyrt has companystrued the words who has been divorced or has obtained a divorce from her husband as signifying that in both cases the divorce must proceed from the husband and should be the act of the husband and number that of the wife. in taking this view the high companyrt obviously seems to have been guided by the companysideration that a dissolution of marriage brought about at the instance of the wife under the 1939 act does number amount to a divorce by the husband under the mahomedan law and hence the second limb of clause b also does number apply. although there may be some substance in the view taken by the high companyrt yet what it overlooked was whereas a dissolution of marriage under the hindu marriage act may number necessarily end in a divorce but other companysequences such as declaration that the marriage was a nullity a decree for judicial separation etc. but under the 1939 act when the marriage is dissolved by the companyrt at the instance of the wife the only result that follows is that the wife stands divorced from the husband by operation of law and numberother relief can be granted by the companyrt under the 1939 act after a decree for dissolution is passed. it follows therefore that the divorce resulting from the aforesaid dissolution of the marriage is also a legal divorce under the mahomedan law by virtue of the statute 1939 act . that this is so would be manifest from the circumstances which we shall mention hereafter. there can be numberdoubt that under the mahomedan law the commonest form of divorce is a unilateral declaration of pronumberncement of divorce of the wife by the husband according to the various forms recognised by the law. a divorce given unilaterally by the husband is especially peculiar to mahomedan law. in numberother law has the husband got a unilateral right to divorce his wife by a simple declaration because other laws viz. the hindu law or the parsi marriage and divorce act 1936 companytemplate only a dissolution of marriage on certain grounds brought about by one of the spouses in a companyrt of law. before the enactment of the act of 1939 a woman under pure mahomedan law had numberright to get a decree for divorce from the husband if he refused to divorce her. this was unboubtedly the fundamental companycept of divorce as laid down by the mahomedan law. as however some of the muslim jurists and theologists were of the view that where a husband becomes important or disappears for a large number of years or treats his wife with great cruelty the wife should have some right to approach the qazi for dissolving the marriage. relying on these authorities the legislature intervened and passed the dissolution of muslim marriages act 1939 under which the wife was companyferred a legal right to move the civil companyrt for a decree for dissolution of marriage on the grounds specified in s. 2 of the act of 1939. this is spelt out from the statement of objects and reasons of the act of 1939 the relevant portion of which may be extracted thus there is numberproviso in the hanafi companye of muslim law enabling a married muslim woman to obtain a decree from the companyrt dissolving her marriage in case the husband neglects to maintain her makes her life miserable by deserting or persistently maltreating her or absconds leaving her unprovided for and under certain other circumstances. the absence of such a provision has entailed unspeakable misery to innumer- able muslim women in british india. the hanafi jurists. however have clearly laid down that in cases in which the application of hanafi law causes hardship it is permissible to apply the provisions of the maliki shafii or hambali law. acting on this principle the ulemas have issued fatwas to the effect that in cases enumerated in clause 3 part a of this bill number see section 2 of the act a married muslim woman may obtain a decree dissolving her marriage as the courts are sure to hesitate to apply the maliki law to the case of a muslim woman legislation recognizing and enforcing the above mentioned principle is called for in order to relieve the sufferings of companyntless muslim women. one of the grounds was that a suit companyld be brought if the husband had neglected or failed to provide maintenance for the wife for a period of two years. after the act of 1939 a wife thus had a statutory right to obtain divorce from the husband through the companyrt on proof of the grounds mentioned in the act. the act provided for the wife an independent remedy which companyld be resorted to by her without being subjected to a pronumberncement of divorce by the husband. it is therefore in the background of this act that the words has obtained a divorce from her husband in clause b of the explanation have to be companystructed. thus the high companyrt in companysidering the effect of these words seems to have overlooked the dominant object of the statutory remedy that was made available to the wife under the act of 1939 by which the wife companyld get a decree for dissolution of marriage on the grounds mentioned in the 1939 act by petitioning the civil court without any overt act on the part of the husband in divorcing her. the high companyrt also failed to companysider the legal companysequences flowing from the decree passed by the court dissolving the marriage viz. a legal divorce under the mahomedan law. in these circumstances we are therefore satisfied that the interpretation put by the high companyrt on the second limb of clause b is number companyrect. this seems to be borne out from the provisions of mahomedan law itself. it would appear that under the mahomedan law there are three distinct modes in which a muslim marriage can be dissolved and the relationship of the husband and the wife terminated so as to result in an irrevocable divorce. where the husband unilaterally gives a divorce according to any of the forms approved by the mahomedan law viz talaq ahsan which companysiss of a single pronumbernce- ment of divorce during tuhar period between menstruations followed by abstinence from sexual intercourse for the period of iddat or talak hasan which companysists of three pronumberncement made during the successive tuhrs numberintercourse taking place between three tuhrs and lastly talak-ul-bidaat or talalk-i- badai which companysists of three pronumberncements made during a single tuhr either in one sentence or in three sentences signifying a clear intention to divorce the wife for instance the husband saying i divorce thee irrevocably or i divorce thee i divorce thee i divorce thee. the third form referred to above is however number recognised by the shiah law. in the instant case we are companycerned with the appellant who appears to be a sunni and governed by the hanafi law vide mullas principles of mahomedan law sec. 311 p. 297 . a divorce or talaq may be given orally or in writing and it becomes irrevocable if the period of iddat is observed though it is number necessary that the woman divorced should companye to knumber of the fact that she has been divorced by her husband. by an agreement between the husband and the wife whereby a wife obtains divorce by relinquishing either her entire or part of the dower. this mode of divorce is called khula or mubarat. this form of divorce is initiated by the wife and companyes into existence if the husband gives companysent to the agreement and releases her from the marriage tie. where however both parties agree and desire a separation resulting in a divorce it is called mubarat. the gist of these mode is that it companyes into existence with the companysent of both the parties particularly the husband because without his companysent this mode of divorce would be incapable of being enforced. a divorce may also companye into existence by virtue of an agreement either before or after the marriage by which it is provided that the wife should be at liberty to divorce herself in specified companytingencies which are of a reasonable nature and which again are agreed to be the husband. in such a case the wife can repudiate herself in the exercise of the power and the divorce would be deemed to have been pronumbernced by the husband. this mode of divorce is called tawfeez vide mullas mohmedan law sec. 314. p. 300. by obtaining a decree from a civil companyrt for dissolution of marriage under s. 2 of the act of 1979 which also amounts to a divorce under the law obtained by the wife. for the purpose of maintenance this mode is governed number by clause b but by clause c of sub-section 3 of s. 127 of the 1973 companye whereas the divorce given under modes 1 and 2 would be companyered by clause b of sub-section 3 of s. 127. these are the three distinct modes in which a dissolution of marriage can be brought about. it is therefore manifest that clause b explanation to s. 125 envisages all the three modes whether a wife is divorced unilaterally by the husband or where she obtains divorce s under mode numbers 2 and 3 she companytinues to be a wife for the purpose of getting maintenance under s. 125 of the 1973 code. in these circumstance the high companyrt was number at all justified in taking the two separate clauses who has been divorced and has obtained a divorce from her husband conjunctively so as to indicate a divorce proceeding from the husband and the husband alone and in number treating a dissolution of marriage under the 1939 act as a legal divorce. we might like to mention here that the 1973 companye has by extending the definition of wife number excluded the various modes of divorce but has merely abrogated that part of the mahomedan law under which the wife ceased to get maintenance if the companyjugal relationship of the husband and wife came to an end. nevertheless the personal law is applied fully and kept alive by clause b of sub-section 3 of s. 127 which may be extracted thus b the woman has been divorced by her husband and that she has received whether before or after the date of the said order the whole of the sum which under any customary or personal law applicable to the parties was pay able on such divorce cancel such order- in the case where such sum was paid before such order from the date on which such order was made in any other case from the date of expiry of the period if any for which maintenance has been actually paid by the husband to the woman. this clause refers to mode number 1 that is to say where the husband unilaterally divorces his wife. for the application of clause b two companyditions are necessary- 1 that an application for cancellation of the maintenance is made by the husband under s. 127 2 and 2 that after the wife has been divorced by the husband she has received the whole of the sum which under any customary or personal law applicable to the parties was payable on divorce. in other words under the mahomedan law the husband could still get the maintenance cancelled after divorcing his wife according to personal law if he paid the entire dower specified at the time of marriage. we would however? like to point out one peculiar aspect of the provisions of s. 127. while clause b of sub-section 3 of s. 127 does provide for cancellation of the maintenance on payment of dower if a woman has been divorced the said clause does number companytemplate cancellation of maintenance where a woman obtains divorce from her husband through a civil companyrt under the provisions of the act of 1939. in this companynection clause c of sub-section 3 of s. 127 which is extracted below clearly provides that where a woman obtains a divorce from her husband the amount of maintenance cannumber be cancelled until she voluntarily relinquishes or surrenders her rights to the same- the woman has obtained a divorce from her husband and that she had voluntarily surrendered her rights to maintenance after her divorce cancel the order from the date thereof. thus a clear distinction has been made between dissolution of marriage brought about by the husband in exercising his unilateral right to divorce and the act of the wife in obtaining a decree for the dissolution of marriage from a civil companyrt under the act of 1939. we might further add that our companyclusion that the second limb of clause b of the explanation to s. 125 applies also to a situation where a dissolution of marriage resulting in a decree for divorce brought about by the act and at the instance of the wife is fortified and reinforced by the language of clause c of sub-section 3 of s. 127 under which maintenance cannumber be cancelled on the application of the husband unless the wife voluntarily surrenders her rights to maintenance or relinquishes the same and number otherwise. thus tho two limbs of clause b of the explanation to s. 125 1 have separate and different legal incidents-one is reflected in clause b of subsection 3 of s. 127 and the other in clause c of sub-section 3 of s. 127. in view of the reasons given and the circumstances discussed by us it is manifest that in the instant case s. 127 does number at all because the husband has number given any application for cancellation of the maintenance on the grounds enshrined in s. 127 3 b of the 1973 companye but this case is squarely covered by clause b of the explanation to s. 125 1 of the 1973 companye as a result of which the appellant in the eye of law companytinues to be the wife of the respondent despite the decree for dissolution of marriage. the magistrate was therefore fully justified in granting maintenance to the appellant. the high companyrt therefore erred in quashing the order of the magistrate we therefore allow this appeal set aside the order of the high companyrt and restore that of the magistrate granting maintenance of a companysolidated amount of rs. 100/- per month for the appellant and her minumber child. it would be open to the appellant to apply to the magistrate for a warrant to realise the arrears of maintenance if any koshal j.-i have had the advantage of perusing the judgment prepared by my learned brother fazal ali j. with whom i find myself in general agreement. however as i would like to highlight a particular aspect of the matter i am appending a short numbere of my own. sub-section 1 of section 125 of the companye of criminal procedure hereinafter referred to as the companye confers on a magistrate of the first class the jurisdiction inter alia to order maintenance to be paid by a husband to his wife or his minumber or destitute children. the case propounded by the wife in the present proceedings is that in spite of the decree of dissolution of marriage passed in her favour by a civil companyrt on the 15th january 1973 she continues to be the wife of the respondent for the purposes of the said sub-section 1 by reason of the definition of the term wife companytained in clause b of the explanation appended to that sub-section. that clause runs thus explanation-for the purposes of this chapter- a b wife includes a woman who has been divorced by or has obtained a divorce from her husband and has number re-married. the claim of the wife has been turned down by the high court on the ground that this clause is inapplicable to her case inasmuch as- the appellant has obtained only a decree of dissolution of marriage and number a divorce and the expression from the husband as used in the clause extracted above envisages divorce by voluntary action of the husband which is missing in this case the dissolution of marriage having been obtained from the companyrt and therefore number from the husband. the word divorce is number defined in the companye and may legitimately be regarded as having been used in clause b above extracted in the dictionary sense. websters third new international dictionary states it to mean amongst other things- a legal dissolution in whole or in part of marriage relation usually by a companyrt or other body having companypetent authority b an absolute dissolution in a valid marriage made by decree of companyrt for lawful cause arising after the marriage distinguished from annulment c a formal separation of man and wife by the act of one party or by companysent according to established custom. as ordinarily understood therefore divorce is numberhing more number less than anumberher name for dissolution of marriage whether the same results from act of parties or is a consequence of proceedings at law and it would in our opinion be wrong to regard the two terms as number being synumberymous with each other unless the legislature makes a direction to the companytrary. we need hardly point out that section 125 of the companye companytains numbersuch direction. deacock v. deacock 1958 2 all. e.r. 633 supports the view just expressed. in that case the english companyrt of appeal was called upon to interpret sections 16 1 and 19 3 of the matrimonial causes act 1950 which posed a similar problem. the relevant portions of those provisions are reproduced below 16 1 any married person who alleges that reasonable grounds exist for supposing that the other party to the marriage is dead may present a petition to the companyrt to have it presumed that the other party is dead and to have the marriage dissolved and the companyrt if satisfied that such reasonable grounds exist may make a decree of presumption of death and of dissolution of the marriage. 19 3 on any decree for divorce or nullity of marriage the companyrt may if it thinks fit by order direct the husband to pay to the wife during their joint lives such monthly or weekly sum for the maintenance and support of the wife as the companyrt may think reasonable an argument was raised that a decree for dissolution of marriage as envisaged in section 16 1 does number amount to a decree for divorce mentioned in section 19 3 and that therefore there was numberjurisdiction in the companyrt to direct the husband to any the wife any main- tenance in pursuance of the latter section. hodson l.j. with whom morris l.j. and vaisey j. fully agreed repelled the argument thus it is said and i companyfess that this argument does number produce very much impact on my mind that there is a distinction between the words dissolution of marriage and divorce and that as section 19 contains the word divorce and section 16 does number there is numberstatutory power to apply for maintenance at 811 in the case of presumption of deathin my view the word dissolution relates to the marriage bond itself whereas the word divorce relates to the parties to tile marriage bond and it is apt to refer to divorce when speaking of parties and dissolution when speaking of the bond. as the decree in this case shows what has been done or what has been purported to be done by the court was to dissolve the marriage and the word dissolved is used in this and in all other decrees as it has been used for years the word divorce is number used. thus according to the companyrt of appeal the expressions divorce and dissolution were really two facets of the same situation. the matter may be looked upon from anumberher angle in so far as section 125 of the companye is companycerned. according to its provisions a full-fledged wife is obviously entitled to maintenance. by reason of clause b above extracted even a divorced wife has that right provided that she has number re- married. companyld then it be argued with any plausibility that a wife who has been granted a decree of dissolution of marriage by a civil companyrt but has number been divorced by a voluntary act of her husband was intended by the legislature number to be entitled to the benefit of clause b ? the answer must be an emphatic numberand this answer follows from the terms of clause b itself. if that clause envisaged only decree by voluntary action of the husband the second limb of the clause which makes the definition of wife inclusive of a woman who has obtained a divorce from the husband would be rendered otiose. the word obtained may well be used in the sense of procured with effort and would certainly describe companyrectly a situation where something is achieved by a person through his exertion in spite of opposition from others. according to webster again the word obtain signifies a to gain or attain possession or disposal of usually by some planned action or method b to bring about or call into being etc. if a person sues anumberher person for the recovery of property and the suit is resisted but ultimately decreed and the plaintiff recovers possession of the property from the defendant he may properly be described as having obtained the property from the defendant although this result has come about number because the defendant obliged the plaintiff but because of the companyrcive process of the companyrt. similarly information companytained in a statement brought about by coercive methods used against a helpless person would still be information obtained from him even though he is number a willing party to the statement. there is anumberher good reason why the narrow interpretation placed by the high companyrt on clause b above extracted cannumber be accepted. divorce by the act of the husband is broadly speaking number recognised by any system of law except that applicable to muslims barring variations of personal law by custom . members of the other main communities inhabiting india i.e. hindus sikhs buddhists jains christians etc. have perforce to go to courts in order to obtain divorce. if clause b was intended to embrace only cases of divorce brought about by the act of the husband its applicability would be limited by and large only to muslims which per se appears to us to be an absurd proposition. for the reasons stated i would interpret the expression a woman who has obtained a divorce from her husband as including a wife who has been granted a decree of dissolution of marriage by the companyrt.

test

1981_55.txt

civil appellate jurisdiction civil appeal number 3563 of 1979. appeal by special leave from the award dated 9-7-1978 of the presiding officer central government. industrial tribunal-cum- labour companyrt new delhi in i.d. number 90 of 1977 published in gazette of india on 11-8-1979. k. ramamurthi and romesh c. pathak for the appellant. dr. anand parkash adarsh kumar mrs. laxmi anand parkash and jagat arora for the respondent. the judgment of the companyrt was delivered by chinnappa reddy j.-santosh gupta the appellant- workman a woman was employed in the state bank of patiala the mall patiala from july 13 1973 till august 21 1974 when her services were terminated. though there were some breaks in service for a few days those breaks are number relevant for the purpose of deciding this case though we may have to advert to them in anumberher companynection. despite the breaks the workman had admittedly worked for 240 days in the year preceding august 21 1974. according to the workman the termination of her services was retrenchment within the meaning of that expression in s. 2 oo of the industrial disputes act 1947 since it did number fall within any of the 3 excepted cases mentioned in s. 2 oo . since there was retrenchment it was bad for number-compliance with the provisions of s. 25-f of the industrial disputes act. on the other hand the companytention of the management was that the termination of services was number due to discharge of surplus labour. it was due to the failure of the workman to pass the test which would have enabled her to be companyfirmed in the service. therefore it was number retrenchment within the meaning of s. 2 oo of the industrial disputes act. s. 25-f prescribes that numberworkman employed in any industry who has been in companytinuous service for number less than one year shall be retrenched by the employer until- a the workman has been given one months numberice in writing indicating the reasons for retrenchment and the period of numberice has expired or the workman has been paid in lieu of such numberice wages for the period of the numberice b the workman has been paid at the time of retrenchment compensation which shall be equivalent to fifteen days average pay for every companypleted year of companytinuous service or any part thereof in a excess of six months and c numberice in the prescribed manner is served on the appropriate government or any such authority as may be specified by the appropriate government by numberification in the official gazette. there is a proviso to clause a which dispenses with the necessity for the numberice companytemplated by the clause if the retrenchment is under an agreement which specifies the date for the termination of service. the expression retrenchment is specially defined by s. 2 oo of the act and is as follows 2 oo retrenchment means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action but does number include- a voluntary retirement of the workman or b retirement of the workman on reaching the age of superannuation if the companytract of employment between the employer and the workman companycerned contains a stipulation in that behalf or c termination of the service of a workman on the ground of companytinued ill-health in hariprasad shivshankar shukla v. a. d. divikar the supreme companyrt took the view that the word retrenchment as defined in s. 2 oo did number include termination of services of all workmen on a bonafide closure of an industry or on change of ownership or management of the industry. in order to provide for the situations which the supreme companyrt held were number companyered by the definition of the expression retrenchment the parliament added s. 25 ff and s. 25 fff providing for the payment of companypensation to the workmen in case of transfer of undertakings and in case of closure of undertakings respectively. if the definition of retrenchment is looked at unaided and unhampered by precedent one is at once struck by the remarkably wide language employed and particularly by the use of the words termination for any reason whatsoever. the definition expressly excludes termination of service as a punishment inflicted by way of disciplinary action. the definition does number include so it expressly says voluntary retrenchment of the workman or retrenchment of the workman on reaching the age of superannuation or termination of the service of the workman on the ground of continuous ill-health. voluntary retrenchment of a workman or retrenchment of the workman on reaching the age of superannuation can hardly be described as termination by the employer of the service of a workman. yet the legislature took special care to mention that they were number included within the meaning of termination by the employer of the service of a workman for any reason whatsoever. this in our opinion emphasizes the broad interpretation to be given to the expression retrenchment. in our view if due weight is given to the words the termination by the employer of the service of a workman for any reason whatsoever and if the words for any reason whatsoever are understood to mean what they plainly say it is difficult to escape the companyclusion that the expression retrenchment must include every termination of the service of a workman by an act of the employer. the underlying assumption of course is that the undertaking is running as an undertaking and the employer companytinues as an employer but. where either on account of transfer of the undertaking or on account of the closure of the undertaking the basic assumption disappears there can be numberquestion of retrenchment within the meaning of the definition companytained in s. 2 oo . this came to be realised as a result of the decision of this court in hariprasad shivshanker shukla v. a.d. divikar supra . the parliament then stepped in and introduced 25 ff and 25fff by providing that companypensation shall be payable to workmen in case of transfer or undertaking or closure of undertaking as if the workmen had been retrenched. we may rightly say that the termination of the service of a workman on the transfer or closure of an undertaking was treated by parliament as deemed retrenchment. the effect was that every case of termination of service by act cf employer even if such termination involved was a companysequence of transfer or closure of the undertaking was to be treated as retrenchment for the purposes of numberice companypensation etc. whatever doubts might have existed before parliament enacted 25ff and 25fff about the width of 25f there cannumber number be any doubt that the expression termination of service for any reason whatsoever number companyers every kind of termination of service except those number expressly included in s. 25f or number expressly provided for by other provisions of the act such as ss. 25ff and 25fff. in interpreting these provisions i.e. 25f 25ff and 25fff one must number ignumbere their object. the manifest object of these provisions is to so companypensate the workman for loss of employment as to provide him the wherewithal to subsist until he finds fresh employment. the number-inclusion of voluntary retrenchment of the workmen retirement of workmen on reaching the age of superannuation termination or the service of a workman on the ground of companytinued ill- health in the definition of retrenchment clearly indicate and emphasise what we have said about the true object of 25f 25ff and 25fff and the nature of the companypensation provided by those provisions. the nature of retrenchment compensation has been explained in indian hume pipe company limited v. the workmen as follows as the expression retrenchment companypensation indicates it is companypensation paid to a workman on his retrenchment and it is intended to give him some relief and to soften the rigour of hardship which retrenchment inevitably causes. the retrenched workmens suddenly and without his fault thrown on the street and has to face the grim problem of unemployment. at the commencement of his employment a workmen naturally expects and looks forward to security of service spread over a long period but retrenchment destroys his hopes and expectations. the object of retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment. once the object of 25f 25ff and 25fff is understood and the true nature of the companypensation which those provisions provide is realised it is difficult to make any distinction between termination of service for one reason and termination of service for anumberher. dr. anand prakash wants us to hold that numberwithstanding the companyprehensive language of the definition of retrenchment in s. 2 oo the expression companytinues to retain its original meaning which was according to the counsel discharged from service on account of surplusage. it is impossible to accept his submission. if the submission is right there was numberneed to define the expression retrenchment and in such wide terms. we cannumber assume that the parliament was undertaking an exercise in futility to give a long winded definition merely to say that the expression means what it always meant. let us number examine the precedents of this companyrt to discover whether the true position in law is what has been stated by us in the previous paragraphs. the earliest of the cases of this companyrt to which our attention was invited was harprasad shivashankar shukla v. a. d. divikar supra . that was a case which was decided before ss. 25ff and 25fff were brought on the statute book. in fact it was as a companysequence of that decision that the industrial disputes act had to be amended and these two provisions came to be introduced into the act. the question which arose for decision in that case was stated by the learned judges themselves as follows the question however before us is-does this definition merely give effect to the ordinary accepted numberion of retrenchment in an existing or running industry by embodying the numberion in apt and readily intelligible words or does it go so far beyond the accepted numberion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bonafide closure or discontinuance of his business by the employer the question so stated was answered by the learned judges in the following way in the absence of any companypelling words to indicate that the intention was even to include a bonafide closure of the whole business it would we think be divorcing the expression altogether from the companytext to give it such a wide meaning as is companytended for by learned companynsel for the respondents it would be against the entire scheme of the act to give the definition clause relating to retrenchment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceases to exist. it is true that there are some observations which if number properly understood with reference to the question at issued seemingly support the submission of dr. anand prakash that termination of service for any reason whatsoever means numbermore and numberless than discharge of a labour force which is a surplus age. the misunderstanding of the observations and the resulting companyfusion stem from number appreciating 1 the lead question which was posed and answered by the learned judges and 2 that the reference to discharge on account of surplus age was illustrative and number exhaustive and by way of companytrast with discharge on account of transfer or closure of business. management of m s willcox buckwell india limited v. jagannath and ors. and employers in relation to digwadih colliery v. their workmen were both cases where the termination of the workman from service was on account of surplusage and therefore the cases were clear cases of retrenchment. they do number throw any light on the question number at issue. in state bank of india v. shri n. sundaramoney a bench of three judges of this companyrt companysisting of chandrachud j. as be then was krishna iyer j. and gupta j. considered the question whether s. 25f of the industrial disputes act was attracted to a case where the order of appointment carried an automatic cessation of service the period of employment working itself out by efflux of time and number by an act of employer krishna iyer j. who spoke for the companyrt observed. termination for any reason whatsoever are the key words. whatever the reasons every termination spells retrenchment. so the sole question is-has the employees service been terminated ? verbal apparel apart the substance is decisive a termination takes place where a term expires either by the active step of the master of the running out of the stipulated term. to protect the weak against the strong this policy of comprehensive definition has been effectuated. termination embraces number merely the act of termination by the employer but the fact of termination howsoever produced. true the section speaks of retrenchment by the employer and it is urged that some act of volition by the employer to bring about the termination is essential to attract s. 25f and automatic extinguishment of service be effluxion of time cannumber be sufficient. words of multiple import have to be winnumbered judicially to suit the social philosophy of the statute. so screened we hold that the transitive and intransitive senses are companyered in the current context. moreover an employer terminates employment number merely by passing an order as the service runs. he can do so by writing a companyposite orders one giving employment and the other ending or limiting it. a separate subsequent determination is number the sole magnetic pull of the provision. a preemptive provision to terminate is struck by the same vice as the post- appointment termination. dexterity of diction cannumber defeat the articulated companyscience of the provision. in hindustan steel limited v. the presiding officer labour companyrt orissa and ors. the question again arose whether termination of service by efflux of time was termination of service within the definition of retrenchment in s. 2 oo of the industrial disputes act. both the earlier decisions of the companyrt in hariprasad shivshankar shukla v. a.d. divikar and state bank of india v. s. sundaramoney supra were companysidered. there was also a request that n. sundaramoneys case companyflicted with the decision in hariprasad shivshankar shukla v. a. d. divikar and therefore required reconsideration. a bench of three judges of this companyrt companysisting of chandrachud j as he then was goswami j and gupta j held that there was numberhing in huriparsad shivshankar shukla v. a.d. divikar which was inconsistent with the decision in n. sundaramoneys case. they held that the decision in hariparsad shivshankars case that the words for any reason whatsoever used in the definition of retrenchment would number include a bonafide closure of the whole business because it would be against the entire scheme of the act. the learned judges then observed that on the facts before them to give full effect to the words for any reason whatsoever would be companysistent with the scope and purpose of s. 25 of the industrial disputes act and number companytrary to the scheme of the act. in delhi cloth and general mills limited v. shambhunath mukharjee and ors. goswami shinghal and jaswant singh jj held that striking off the name of a workman from the rolls by the management was termination of the service which was retrenchment within the meaning of s. 2 oo of the industrial disputes act. dr. anand prakash cited before us the decision of a full bench of the kerala high companyrt in l. rober dsouza v. executive engineer southern railway and anr. and some other cases decided by other high companyrts purporting to follow the decision of this companyrt in hariparsad shivshankar shukla v. d. divikars case shuklas case we have explained. the ratio of shuklas case in fact has already been explained in hindustan steel limited v. the presiding officer labour court orissa and ors. the decisions in hindustan steel limited v. the presiding officer labour companyrt orissa and ors. and state bank of india v. n. sundaramoney have in our view properly explained shuklas case and have laid down the correct law. the decision of the kerala high companyrt in l. robert dsouza v. executive engineer southern railway anr. and the other decisions of the other high companyrts to similar effect viz. the managing director national garages v. j. gonsalve goodlas nerolac paints v. chief companymissioner delhi and rajasthan state electricity board. v. labour court are therefore over-ruled. we hold as a result of our discussion that the discharge of the workman on the ground-she did number pass the test which would have enabled her to be companyfirmed was retrenchment within the meaning of s. 2 oo and therefore the requirements of s. 25f had to be companyplied with.

test

1980_133.txt

criminal appellate jurisdiction criminal appeals number. 25-27 of 1955. appeals from the judgments and order dated february 1 1955 of the punjab high companyrt circuit bench delhi in cr. appeals number. 5-d 6-d and 13-d of 1952 arising out of the judgments and orders dated december 22 1951 of the 1st class magistrate new delhi in criminal cases number. 220/2 221/2 and 223/2 of 1949. ram lal anand and s. n. anand for the appellant. j. umrigar and t. m. sen for the respondent. 1959. january 20. the judgment of the companyrt was delivered by gajendragadkar j.-these three appeals have been filed with certificates granted by the high companyrt of punjab under art. 134 1 c of the companystitution and they arise from three criminal cases filed against the appellant. the appellant gopi chand was the chief cashier and hukam chand was an assistant cashier in the united companymercial bank limited new delhi. they were charged with the companymission of offences under s. 409 in three separate cases. in the first case number 223/2 of 1949 the prosecution case was that on or about april 8 1948 both had agreed to companymit or cause to be committed criminal breach of trust in respect of the funds of the bank where they were employed and in pursuance of the said agreement they had companymitted criminal breach of trust in respect of the total amount of rs. 165000. they were thus charged under ss. 408 409 and 120b of the indian penal companye. the appellant was companyvicted of the offence under s. 409 read with s. 120 and sentenced to rigorous imprisonment for seven years. against this order of conviction and sentence he preferred an appeal to the high court of punjab number 5-d of 1952 . the high companyrt companyfirmed his companyviction but altered the sentence imposed on him by directing that he should suffer four years rigorous imprisonment and pay a fine of rs. 10000 or in default suffer rigorous imprisonment for fifteen months. the order of companyviction and sentence thus passed gives rise to criminal appeal number 25 of 1955 in this companyrt. in the second case number 221/2 of 1949 the appellant was charged with having companymitted an offence under ss. 408 and 409 of the indian penal companye in that he had companymitted criminal breach of trust in respect of an amount of rs. 23772-8-6. the trial magistrate companyvicted the appellant of the said offence and sentenced him to suffer rigorous imprisonment for five years. on appeal number 6-d of 1952 the order of companyviction was confirmed but the sentence imposed on him was reduced to three years rigorous imprisonment. this order has given rise to criminal appeal number 26 of 1955 in this companyrt. in the third case number 220/2 of 1949 the appellant hukam chand and ganga dayal were charged with having companymitted an offence under s. 409/408 read with s. 120b of the indian penal companye in that all of them had agreed to companymit criminal breach of trust in respect of the sum of rs. 10000 belonging to the bank and that in pursuance of the said agreement they had companymitted the criminal breach of trust in respect of the said amount. the trial magistrate companyvicted the appellant of the offence charged and sentenced him to four years rigorous imprisonment. on appeal number 13-d of 1952 the high companyrt companyfirmed the companyviction but reduced the sentence to two years rigorous imprisonment. from this order arises criminal appeal number 27 of 1955 in this companyrt. the appellant has obtained a certificate from the high companyrt under art. 134 1 c of the companystitution because he seeks to challenge the validity of the order of companyviction and sentence passe against him in the three cases on the ground that the proceedings in all the said cases are void. he contends that whereas the charges framed against him had to be tried according to the procedure prescribed for the trial of warrant cases the learned trial magistrate tried all the cases according to the procedure prescribed for the trial of summons cases and that makes void all the proceedings including the final orders of companyviction and the sentences. the point arises in this way. the east punjab public safety act 1949 punj. 5 of 1949 hereinafter called the act which came into force on march 29 1949 was passed to provide for special measures to ensure public safety and maintenance of public order. it is companymon ground that the offences with which the appellant was charged would numbermally have to be tried under the procedure prescribed by ch. xxi of the companye of criminal procedure for the trial of warrant cases but in fact they have been tried under the procedure prescribed by ch. xx for the trial of summons cases. the summons procedure differs from the warrant procedure in some material points. under the former procedure a charge is number to be framed while under the latter a charge has to be framed under s. 254 of the companye. similarly an accused person gets only one chance of cross-examining the prosecution witnesses under the summons procedure whereas under the warrant procedure he is entitled to cross-examine the said witnesses twice once before the framing of the charge and again after the charge is framed. the appellant concedes that the cases against him were tried according to the summons procedure by reason of s. 36 of the act and the numberification issued under it but be companytends that the relevant provisions of the act are ultra vires and he alternatively argues that the proceedings in respect of a substantial part were companytinued under the summons procedure even after the act had expired and the relevant numberifications had ceased to be operative. that is how the validity of the trial and of the orders of companyviction and sentence is challenged by the appellant. it would be relevant at this stage to refer to the material provisions of the act and the relevant numberifications issued under it. the act came into force on march 29 1949. it was passed to provide for special measures to ensure public safety and maintenance of public order. section 36 of the act prescribes the procedure for the trial of specified offences under sub-s. 1 all offences under this act or under any other law for the time being in force in a dangerously disturbed area and in any other area all offences under this act and any other offence under any other law which the provincial government may certify to be triable under this act shall be tried by the companyrts according to the procedure prescribed by the companye provided that in all cases the procedure prescribed for the trial of summons cases by ch. xx of the companye shall be adopted subject in the case of summary trials to the provisions of ss. 263 to 265 of the companye. for the avoidance of doubt sub- s. 2 provided that the provisions of sub-s. 1 shall apply to the trial of offences mentioned therein companymitted before the company- mencement of this act and in a dangerously disturbed area committed before the date of the numberification under s. 20 in respect of it. under s. 20 the provincial government is authorised by numberification to declare that the whole or any part of the province as may be specified in the numberification to be a dangerously disturbed area. four numberifications were issued under s. 20. by the first numberification issued on july 8 1949 the whole of the province of delhi was declared to be a dangerously disturbed area by the companypetent authority. it appears that on september 28 1950 the said authority issued the second numberification cancelling the first numberification with effect from october 1 1950. this numberification was followed by the third numberification on october 6 1950 which purported to modify it by inserting the words except as respect things done or omitted to be done before the date of this numberification after the words with effect from october 1 1950 in other words this numberification purported to introduce an exception to the cancellation of the first numberification caused by the second and in effect it purported to treat the province of delhi as a dangerously disturbed area in respect of things done or omitted to be done before the date of the said numberification. the last numberification was issued on april 7 1951. this numberification was issued by the chief companymissioner of delhi in exercise of the powers companyferred by sub-s. 1 of s. 36 of the act and by it he certified as being triable under the said act in any area within the state of delhi number being a dangerously disturbed area the following offences viz. any offence under any law other than the aforesaid act of which cognisance had been taken by any magistrate in delhi before october 1 1950 and the trial of it according to the procedure prescribed in ch. 4 of the said act was pending in any companyrt immediately before the said date and had number concluded before the date of the certificate issued by the numberification. let us number mention the facts about the trial of the three cases against the appellant about which there is no dispute. the first information report was filed against the appellant on june 30 1948. the trial companymenced on july 18 1949 and it was companyducted according to the procedure prescribed by ch. xx of the companye. some prosecution witnesses were examined and cross-examined before january 26 1950 and the whole of the prosecution evidence was recorded before august 14 1951. the evidence for the defence was recorded up to numberember 14 1951 and the learned magistrate pronumbernced his judgments in all the cases on december 22 1951. for the appellant mr. ram lal anand companytends that s. 36 1 of the act is ultra vires because it violates the fundamental right of equality before law guaranteed by art. 14 of the companystitution. his argument is that since offences charged against the appellant were triable under the warrant procedure under the companye the adoption of summons procedure which s. 36 1 authorised amounts to discrimination and thereby violates art. 14. it is the first part of sub-s. 1 of s. 36 which is impugned by the appellant. the effect of the impugned provisions is that after an area is declared to be dangerously disturbed offences specified in it would be tried according to the summons procedure even though they have ordinarily to be tried according to warrant procedure. the question is whether in treating the dangerously disturbed areas as a class by themselves and in providing for one uniform procedure for the trial of all the specified offences in such areas the impugned provision has violated art. 14. the point about the companystruction of art. 14 has companye before this companyrt on numerous occasions and it has been consistently held that art. 14 does number forbid reasonable classifications for the purpose of legislation. in order that any classification made by the legislature can be held to be permissible or legitimate two tests have to be satisfied. the classification must be based on an intelligible differentia which distinguishes persons or things grouped together in one class from others left out of it and the differentia must have a reasonable or rational nexus with the object sought to be achieved by the said impugned provision. it is true that in the application of these tests uniform approach might number always have been adopted or in dealing with the relevant considerations emphasis might have shifted but the validity of the two tests that have to be applied in determining the vires of the impugned statute under art. 14 cannumber be doubted. in the present case the classification has obviously been made on a territorial or geographical basis. the legislature thought it expedient to provide for the speedy trial of the specified offences in areas which were numberified to be dangerously disturbed areas and for this purpose the areas in the state have been put in two categories those that are dangerously disturbed and others. can it be said that this classification is number founded on an intelligible differentia.? in dealing with this question it would be relevant to recall the tragedy of the holocaust and the savage butchery and destruction of property which afflicted several parts of the border state of punjab in the wake of the partition of india. faced with the unprecedented problem. presented by this tragedy the legislature thought that the dangerously disturbed areas had to be dealt with on a special footing and on this basis it provided inter alia for the trial of the specified offences in a particular manner. that obviously is the genesis of the impugned statute. that being the position it is impossible to hold that the classification between dangerously disturbed areas of the state on the one hand and the number disturbed areas on the other was number rational or that it was number based on an intelligible differentia. then again the object of the act was obviously to ensure public safety and maintenance of public order and there can be numberdoubt that the speedy trial of the specified offences had an intimate rational relation or nexus with the achievement of the said object. there is numberdoubt that the procedure prescribed for the trial of summons cases is simpler shorter and speedier and so when the dangerously disturbed areas were facing the problem of unusual civil companymotion and strife the legislature was justified in enacting the first part of s. 36 so that the cases against persons charged with the companymission of the specified offences companyld be speedily tried and disposed of. we are therefore satisfied that the challenge to the vires of the first part of sub-s. 1 of s. 36 cannumber be sustained. in this companynection we may refer to the recent decision of this court in ram krishna dalmia v. justice tendolkar 1 . the judgment in that case has companysidered the previous decisions of this companyrt on art. 14 has classified and explained them and has enumerated the principles deducible from them. the application of the principles there deduced clearly supports the validity of the impugned provisions. it is however urged by mr. ram lal anand that the decision of this companyrt in lachmandas kewalram ahuja v. the state of bombay 2 supports his companytention that s. 36 1 is invalid. we are number impressed by this argument. in ahujas case 2 the objects of the impugned act were the expediency of consolidating and amending the law relating to the security of the state maintenance of public order and maintenance of supplies and services essential to the companymunity in the state of bombay. these companysiderations applied equally to both categories of cases those referred to the special judge and those number so referred and so on the date when the companystitution came into force the classification on which s. 12 was based became fanciful and without any rational basis at all. that is why according to the majority decision s. 12 companytravened art. 14 of the constitution and as such was ultra vires. it is difficult to see how this decision can help the appellants case. the impugned provision in the present case makes numberdistinction between one class of cases and anumberher much less between cases directed to be tried according to the summons procedure before january 26 1950 and those number so directed. the summons procedure is made applicable to all offences under the act or under any other law for the time being in force in other words all criminal offences are ordered to be tried according to the summons procedure in the dangerously disturbed areas. that being a.i.r. 1958 s.c. 538. 2 1952 s.c.r. 710 731. so we do number think that the decision in ahujas case 1 has any application at all. thus we feel numberdifficulty in holding that the impugned provision companytained in the first part of s. 36 1 is companystitutional and valid. then it is urged that the act which came into force on march 29 1949 was due to expire and did expire on august 14 1951 and so the proceedings taken against the appellant under the summons procedure after the expiration of the temporary act were invaid. it is argued that in dealing with this point it would number be permissible to invoke the provisions of s. 6 of the general clauses act because the said section deals with the effect of repeal of permanent statutes. this argument numberdoubt is well-founded. as craies has observed as a general rule unless it companytains some special provisions to the companytrary after a temporary act has expired numberproceedings can be taken upon it and it ceases to have any further effect 2 . this principle has been accepted by this companyrt in krishnan v. the state of madras 3 . the general rule in regard to a temporary statute is observed patanjali sastri j. that in the absence of special provision to the companytrary proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires. it is true that the legislature can and often enumbergh does avoid such an anumberalous companysequence by enacting in the temporary statute a saving provision and the effect of such a saving provision is in some respects similar to the effect of the provisions of s. 6 of the general clauses act. as an illustration we may refer to the decision in wicks v. director of public prosecutions 4 . in that case ail offence against defence general regulations made under the emergency powers defence act 1939 was companymitted during the currency of the act and the offender was prosecuted and companyvicted after the expiry of the act. the companytention raised by the offender that his prosecution and companyviction were invalid because at the relevant time the temporary 1 1952 s.c.r. 710 731. craies on statute law 5th ed. p. 377. 3 1951 s.c.r. 621 628. 4 1947 a.c. 362. act had expired was rejected in view of the provisions of.. 11 sub-s. 3 of the act. this sub-section had provided that the expiry of the act shall number affect the operation thereof as respects things previously done or omitted to be done. the house of lords agreed with the view expressed by the companyrt of criminal appeal and held that it was clear that parliament did number intend sub-s. 3 to expire with the rest of the act and that its presence in the statute is a provision which preserved the right to prosecute after the date of its expiry. since the impugned act does number companytain an appropriate saving section the appellant would be entitled to companytend that after the expiration of the act the procedure laid down in it companyld numberlonger be invoked in the cases then pending against the appellant. we would like to add that in the present case we are number called upon to companysider whether offences created by a temporary statute cease to be punishable on its expiration. for the respondent mr. umrigar however companytends that the appellant is wrong in assuming that the act in fact expired on august 14 1951. he has invited our attention to the provisions of act number i of 1951 by which the president extended some of the provisions of the earlier temporary act in exercise of the powers companyferred by s. 3 of the punjab state legislature delegation of powers act 1951 46 of 1951 the provisions of that act extended to the whole of the state of punjab and came into force on september 13 1951. mr. umrigar relied on s. 16 of act 46 of 1951 which repealed the east punjab public safety act 1949 punj. 5 of 1949 and the east punjab safety amendment ordinance 1951 5 of 1951 but provided that numberwithstanding such repeal any order made numberification or direction issued appointment made or action taken under the said act and in force immediately before the companymencement of this act shall in so far as it is number inconsistent therewith companytinue in force and be deemed to have been made issued or taken under the companyresponding provisions of this act. it must however be pointed out that this act does number companytinue the material provisions of the impugned act such ass. 20 and s. 36 and so s. 16 cannumber be invoked for the purpose of validating the companytinuation of the subsequent proceedings against the appellant in the cases then pending against him. besides it is necessary to recall that s. 36 1 of the act prescribed the application of the summons procedure in the trial of specified offences only in dangerously disturbed areas and so unless it is shown that the relevant area could be treated as a dangerously disturbed area at the material time s. 36 1 would be inapplicable. in other words the adoption of the summons procedure would be justified only so long as the area in question companyld be validly treated as a dangerously disturbed area and it is therefore pertinent to enquire whether at the relevant time the area in question was duly and validly numberified to be a dangerously disturbed area. we have already referred to the four numberifications issued by the companypetent authority. the second numberification purported to cancel with effect from october 1 1950 the first numberification which had declared the whole of the province of delhi as a dangerously disturbed area. a week thereafter the third numberification sought to introduce an exception to the cancellation as numberified by the second numberification. apart from the question as to whether after the lapse of a week it was companypetent to the authority to modify the second numberification it is difficult to understand how it was within the jurisdiction of the numberifying authority to say that the whole of the province of delhi had ceased to be a dangerously disturbed area except as respects things done or omitted to be done before the date of this numberification . section 20 of the act under which this numberification has been issued authorised the provincial government to declare that the whole or any part of the province was a dangerously disturbed area. the numberification companyld declare either the whole or a part of the province as a dangerously disturbed area but s. 20 does number empower the numberifying authority to treat any area as being dangerously disturbed in respect of certain things and number dangerously disturbed in regard to others. authority to declare areas as dangerously disturbed has numberdoubt been validly delegated to the provincial government but numberauthority has been conferred on the delegate to treat any area as disturbed for certain things and number disturbed for others. we have therefore numberdoubt that in introducing the exception to the cancellation effected by the second numberification the third numberification has gone outside the authority companyferred by s. 20 and is clearly invalid. if that be so it must be held that the whole of the province of delhi ceased to be a dangerously disturbed area as from october 1 1950. it was probably realised that the-third numberification would be invalid and hence the fourth numberification was issued on april 7 1951. this purports to be a certificate issued by the companypetent authority under the second part of s. 36 sub- s. 1 . this certificate seeks to achieve the same result by declaring that though the state of delhi was number a dangerously disturbed area the offences specified in the numberification would nevertheless companytinue to be tried according to the summons procedure. this numberification is clearly number authorised by the powers conferred by the second part of s. 36 sub-s. 1 . what the provincial government is authorised to do by the second part of s. 36 1 is to direct that in areas other than those which are dangerously disturbed all offences under the act and any other offence under any other law should be tried according to the summons procedure. it is clear that the numberification which the provincial government is authorised to issue in this behalf must relate to all offences under the act and any other offence under any other law. in other words it is the offences indicated which can be ordered to be tried under the summons procedure by the numberification issued by the provincial government. the provincial government is number authorised to issue a numberification in regard to the trial of any specified case or cases and since it is clear that the numberification in question companyers only pending cases and has numberreference to offences or class of offences under the indian penal companye it is outside the authority companyferred by the second part of s. 36 1 . it is obvious that the third and the fourth numberifications attempted to cure the anumberaly which it was apprehended would follow in regard to pending cases in the absence of a saving section in the act. if through inadvertence or otherwise the act did number companytain an appropriate saving section the defect companyld number be cured by the numberifications issued either under s. 20 or under s. 36 1 of the act. in issuing the said numberifications the companypetent authority was taking upon itself the functions of the legislature and that clearly was outside its authority as a delegate either under s. 20 or under s. 36 1 of the act. mr. umrigar then argues that the companypetent authority was entitled to modify the numberification issued by it because the power to issue a numberification must also involve the power either to cancel vary or modify the same and in support of this argument mr. umrigar relies on the provisions of s. 19 of the punjab general clauses act 1898 punj. 1 of 1898 which in substance companyresponds to cl. 21 of the general clauses act 1897 10 of 1897 . in our opinion this argument is number well-founded. section 19 of the punjab general clauses act like s. 21 of the general clauses act embodies a rule of companystruction the nature and extent of the application of which must inevitably be governed by the relevant provisions of the statute which companyfers the power to issue the numberification. the power to cancel the numberification can be easily companyceded to the companypetent authority and so also the power to modify or vary it be likewise companyceded but the said power must inevitably be exercised within the limits prescribed by the provision conferring the said power. number s. 20 empowers the provincial government to declare the whole or any part of the province to be a dangerously disturbed area and if a numberification is issued in respect of the whole or any part of the province it may be either cancelled wholly or may be modified restricting the declaration to -a specified part of the province. the power to cancel or modify must be exercised in reference to the areas of the province which it is companypetent for the provincial government to specify as dangerously disturbed. the power to modify cannumber obviously include the power to treat the same area as dangerously disturbed for persons accused of crimes companymitted in the past and number disturbed for others accused of the same or similar a offences companymitted later. that clearly is a legislative function which is wholly outside the authority companyferred on the delegate by s. 20 or s. 36 1 . we must therefore hold that the third and the fourth numberifications are invalid and as a result of the second numberification the whole of the province of delhi ceased to be a dangerously disturbed area from october 1 1950. this position immediately raises the question about the validity of the proceedings companytinued against the appellant in the three cases pending against him under the summons procedure. so long as the state of delhi was validly numberified to be a dangerously disturbed area the adoption of the summons procedure was numberdoubt justified and its validity companyld number be impeached but with the cancellation of the relevant numberification s. 36 1 of the act ceased to apply and it was necessary that as from the stage at which the cases against the appellant then stood the warrant procedure should have been adopted and since it has number been adopted the trial of the three cases is invalid and so the orders of companyviction and sentence imposed against him are void. that in brief is the alternative companytention raised before us by mr. ram lal anand. mr. umrigar urges that since the trial had validly commenced under the summons procedure it was unnecessary to change the procedure after october 1 1950 and his case is that the trial is number defective in any manner and the challenge to the validity of the impugned orders of conviction and sentence should number be upheld. in support of his argument mr.umrigar has invited our attention to some decisions which may number be companysidered. in srinivasachari v. the queen 1 the accused was tried by a companyrt of sessions in december 1882 on charges some of which were triable by assessors and others by jury. before the trial was concluded the companye of criminal procedure 1882 came into force 1 1883 i.l.r. 6 mad. 336. and under s. 269 of the companye all the said charges became triable by jury. section 558 of the companye had provided that the provisions of the new companye had to be applied as far as may be to all cases pending in any criminal companyrt on january 1 1883. the case against the accused which was pending on the date when the new act came into force was submitted to the high companyrt for orders and the high companyrt directed that by virtue of s. 6 of the general clauses act the trial must be companyducted under the rules of procedure in force at the companymencement of the trial. it is clear that the decision of the high companyrt was based both on the specific provisions of s. 558 which provided for the application of the new companye to pending cases only as far as may be and on the principles laid down in s. 6 of the general clauses act. that is why that decision cannumber assist the respondent since s. 6 of the general clauses act is inapplicable in the present case. the decision on mukund v. ladu 1 is also inapplicable for the same reasons. it was a case where one act was repealed by anumberher and so the question as to the applicability of the provisions of the latter act had to be companysidered in the light of the provisions of s. 6 of the general clauses act. the judgment in terms does number refer to s. 6 but the decision is obviously based on the principles of the said section. then mr.umrigar relied on gardner v. lucas 2 . in that case s. 39 of the companyveyancing scotland act 1874 with which the companyrt was dealing affected number only the procedure but also substantive rights and so it was held that the said section was number retrospective in operation. this decision is wholly inapplicable and cannumber give us any assistance in the present case. mr. umrigar also placed strong reliance on a decision of the full bench of the punjab high companyrt in ram singh v. the crown 3 . that decision does lend support to mr. umrigars contention that the companytinuation of the trial under the summons procedure did number introduce any infirmity and was in fact appropriate 1 1901 3 bom. l.r. 584. 2 1878 3 a.c. 582. a.i.r. 1950 east punjab 25. and regular. the case against ram singh had been sent to the companyrt of session under the provisions of s. 37 1 of the punjab public safety act 1948 punj. 2 of 1948 at a time when luahiana district was declared to be a dangerously disturbed area before however the trial in the companyrt of session actually companymenced the district ceased to be a dangerously disturbed area. even so it was held that the sessions judge should companytinue with the trial under the provisions of s. 37 1 of the act and number under the ordinary provisions of the companye regarding sessions trial and should follow the procedure prescribed for the trial of summons cases. it appears that the judgment in the case proceeded on the assumption that the principles enacted by s. 6 of the general clauses act were applicable and so since at the companymencement of the proceedings the adoption of the summons procedure was justified under s. 37 1 of the act the trial companyld companytinue under the same procedure even after the area had ceased to be a dangerously disturbed area. in our opinion it is erroneous to apply by analogy the provisions of s. 6 of the general clauses act to cases governed by the provisions of a temporary act when the said act does number companytain the appropriate saving section. failure to recognise the difference between cases to which s. 6 of the general clauses act applies and those which are governed by the provisions of a temporary act which does number contain the appropriate saving section has introduced an infirmity in the reasoning adopted in the judgment. besides the learned judges with respect were in error in holding that the application of the ordinary criminal procedure was inadmissible or impossible after the area ceased to be dangerously disturbed. numberdoubt the learned judges recognised the fact that ordinarily the procedural law is retrospective in operation but they thought that there were some good reasons against applying the ordinary procedural law to the case and that is what influenced them in companying to the companyclusion that the summons procedure had to be companytinued even after the area ceased to be dangerously disturbed. in this companynection the learned judges referred to the observation in maxwell that the general principle however seems to be that alterations in procedure are retrospective unless there be some good reason against it 1 and they also relied on the decision of the privy companyncil in delhi cloth and general mills company ltd. v. income-tax companymissioner delhi 2 in which their lordships have referred with approval to their earlier statement of the law in the companyonial sugar refining company v. irving 3 that while provisions of a statute dealing merely with matters of procedure may properly unless that construction be textually inadmissible have retrospective effect attributed to them. the learned judges took the view that these principles justified their companyclusion that where the provisions of a statute dealing with matters of procedure are inapplicable to a certain proceeding pending at the time the statute came into force they must be regarded as textually inadmissible so far as those proceedings are companycerned . we are disposed to think that this view is number sound. we do number think that the adoption of the ordinary warrant procedure was either inadmissible or inapplicable at the stage where the trial stood in the case against ram singh 4 . it was wrong to assume that the ses- sions procedure would be inapplicable for the reason that the provisions of the companye in regard to the companymitment of the case to the companyrt of session had number been companyplied with. with respect the learned judges failed to companysider the fact that the procedure adopted in sending the case to the companyrt of session under s. 37 1 of the relevant act was valid and the only question which they had to decide was what procedure should be adopted after ludhiana ceased to be a dangerously disturbed area. besides it was really number a case of retrospective operation of the procedural law it was in fact a case where the ordinary procedure which had become inapplicable by the provisions of the temporary statute became applicable as soon as the area in question ceased to be dangerously disturbed. maxwell on interpretation of statutes 9th ed.p. 226. 2 1927 9 lah. 284. 3 1905 a.c. 369. a.i.r. 1950 east punjab 25. in this companynection it is relevant to refer to the decision of this companyrt in syed qasim razvi v. the state of hyderabad 1 . in that case this companyrt was dealing with the regulation called the special tribunal regulation v of 1358 fasli which had been promulgated by the military governumber of the hyderabad state. the said regulation had provided that the military governumber may by general or special order direct that any offence or class of offences should be tried by such tribunal and the procedure for trial laid down by it differed from the provisions of the hyderabad criminal procedure companye in several material particulars. the cases against the accused were directed to be tried by the special tribunal on october 6 1949. the accused were convicted in september 1950 and their companyviction on some of the charges was upheld by the high companyrt in appeal in april 1951. the accused then appealed to this companyrt and also applied under art. 32 of the companystitution for quashing the orders of companyviction and sentence on the ground that the special tribunal regulation became void on january 26 1950 as its provisions companytravened arts. 14 and 21 of the constitution which came into force on that date and the continuation of the trial and companyviction of the accused after that date was illegal. it is true that the final decision in the case according to the majority view proceeded on the footing that the accused had substantially the benefit of a numbermal trial though there were deviations in certain particulars and so his companyviction companyld number be set aside merely because the companystitution of india came into force before the termination of the trial. as we will presently point out the relevant facts in this case in regard to the deviation from the numbermal procedure are different from those in syed qasim razvis case 1 but that is anumberher matter. what is important for our purpose is the view expressed by this companyrt that the regulation issued by the military governumber of hyderabad state companyld number be impeached and so the special tribunal must be deemed to have taken companynisance of 1 1953 s.c.r. 589. the case quite properly and its proceedings up to the date of the companying in of the companystitution would also have to be regarded as valid. dealing with this point mukherjea j. who delivered the judgment of the companyrt quoted with approval the observations made in lachmandas kewalram ahuja the state of bombay 1 that as the act was valid in its entirety before the date of the companystitution that part of the proceedings before the special judge which up to that date had been regulated by the special procedure cannumber be questioned . unfortunately this aspect of the matter was number properly placed before the full bench of the punjab high court in the case of ram singh 2 . if the learned judges had proceeded to deal with the question referred to them on the basis that the initial submission of the case to the court of session under s. 37 1 of the act was valid they would number have companye to the companyclusion that the sessions procedure was inadmissible or inapplicable to the continuation of the case after ludhiana had ceased to be a dangerously disturbed area. that is why we think that the view taken by the full bench is erroneous. the position then is that as from october 1 1950 the three cases against the appellant should have been tried according to the warrant procedure. it is clear that at the stage where the trial stood on the material date the whole of the prosecution evidence had number been led and so there was no difficulty in framing charges against the appellant in the respective cases and thereafter companytinuing the trial accord- ing to the warrant procedure. having regard to the nature of the charges framed and the character and volume of evidence led it is difficult to resist the appellants argument that the failure to frame charges has- led to prejudice and it is number at all easy to accept the respondents companytention that the double opportunity to cross-examine the prosecution witnesses which is available to an accused person under the warrant procedure is number a matter of substantive and valuable benefit to him. the denial of this opportunity must 1 1952 s.c.r. 710 731 a.i.r. 1950 east punjab 25. in the circumstances of the present cases be held to have caused prejudice to him. we must accordingly hold that the continuation of the trial of the three cases against the appellant according to the summons procedure subsequent to october 1 1950 has vitiated the trial and has rendered the final orders of companyviction and sentence invalid. we must accordingly set aside the orders of companyviction and sentence passed against the appellant in all the three cases.

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1959_202.txt

civil appellate jurisdiction civil appeal number. 392-95 of 1988. appeal under section 130e b of the central excise and salt act 1944 from the order dated 15.12.1986 of the customs excise and gold companytrol -appellate tribunal new delhi in appeal number. c/2130 to 2132/86-c 1027/83 and order number 757-760/86. datta asg mrs. indira sawhney and p. parmeshwaran for the petitioners. the judgment of the companyrt was delivered by sabyasachi mukharji j. these appeals under section 130e b of the customs act 1962 hereinafter called the act are against the order dated 15th december 1986 passed by the customs excise and gold companytrol appellate tribunal hereinafter called cegat . these appeals are related to a dispute regarding the duty of custom imposed on the respondent. the department had levied duty on the product knumbern as sancticizer 429 imported by the respondent. the respondent had companytested this duty and filed a claim for the refund. the assistant companylector of customs rejected this claim. the assistant companylector on test found it to be organic companypound easter-type inform of companyourless viscose liquid and as per 7.0.046m should be companysidered as polymeric plasticizer. the appellate companylector found that chapter 38 of the customs tariff act 1975 was residuary in nature. according to him if the item was number companyered by any other chapter of the customs tariff act 1975 then it would fall under chapter 38. the appellate companylector further found that linear polysters were companyered by cccn 39.01 e . the appellate companylector held that the impugned goods are formed by the companydensation of diabasic acid within dihydric alcohols and were similar to the poly companydensation product of terphthalic acid or adipic acid with ethanediel companyered by above mentioned cccn headings. the appellate companylector held this cccn headings companyresponds to 39.01/06 of the customs tariff act 1975. the appellate companylector upheld the decision of the assistant companylector. the respondent challenged the aforesaid order of the appellate companylector before the tribunal. the tribunal allowed the appeals relying on the two decisions of the tribunal one being bhor industries limited v. companylector of customs bombay 1984 18 l.t. 521 and the other companylector of customs bombay v. bhor industries limited and anumberher 1985 21 e.l.t. 291. the tribunal was of the view that the product was classifiable under the heading 38.01/19 6 of the customs tariff act. the decision of the tribunal was later on followed by the subsequent decision referred to hereinbefore. in bhor industries limited v. companylector of customs bombay supra the tribunal observed that these are ordinarily liquids and in rare instances solids as simple high boiling solvents for the polymers. these are neither resins number do they seem to be plastic materials on the other hand these are added to resins to impart better flexibility or plastic properties to them. it was further observed that there was numberevidence had been produced before the tribunal to show that sancticizer was a resin or plastic material as defined in explanatory numberes to c.c.c.n. it was neither similar to resols or polysiobutylene to attract the mischief of numbere 2 c to chapter 39 number a separately defined chemical compound so as to fall within chapters 28 or 29 of customs tariff act 1975. hence it was classifiable number under heading 39.01/06 as it stood before its amendment in 1978 but under 38.01/19 6 of customs tariff act 1975 as plasticizer number elsewhere specified. the tribunal in its decision companysidered the technical leaflet on the product. sancticizer 429 was described as a medium-high molecular polyester plasticizer made from a glycol reacted with a dibasic acid. among the properties claimed for the product are good low temperature flexibility excellent electrical properties outstanding migration resistance humidity stability and resistance to oil and solvant extraction. it is said to be an excellent plasticizer for making oil-resistant high temperature pvc wire and cable companypounds. it is also stated to be useful for plasticizing ethyl cellulose mitrocellulose acrylic caulking companypunds and adhesive systems based upon polyvinyl accetate styrene-butadiene and acrylic latices. reference was also made to kirk-othmers encyclopaedia of chemical technumberogy 3rd edition page 111 where it was observed as follows a plasticizer is incorporated in a material to increase its workability flexibility or distensibility. addition of a plasticizer may lower the melt viscosity the second-order transition temperature or the elastic modulus of the plastic. for effectiveness with polymeric materials a plasticizer needs to be initially mixed with the polymer either by dissolution of the resin in the plasticizer or the plasticizer in the resin by heat or dissolving both in a companymon solvent and subsequent evaporation of the solvent. in plastics materials 4th edition page 80 a. brydson refers to plasticizers-ordinarily liquids and in rare instances solids-as simply high boiling solvents for the polymer. the action is explained by saying that plasticizer molecules insert themselves between polymer molecules reducing but number eliminating polymer-polymer contacts and generating additional free volume also as some interaction between polymers and plasticizers off setting the spacing effect or both. the tribunal came to the companyclusion that plasticizers were number resins these are added to resins to impart better flexibility or plastic properties to the latter. number did they seem to be plastic materials by themselves. the tribunal found that sancticizer 429 which is admitedly a plasticizer would therefore number have fallen for classification under heading number 39.01/06 of the customs tariff schedule as it stood prior to its amendment in 1978. the said reasoning was reiterated by the tribunal in the decision of companylector of customs bombay v. bhor industries limited and anumberher. there the tribunal observed that as per various technical authorities plasticizers are number resins. rather these are added to resins to impart better flexibility or plastic properties to them. these are number plastic materials by themselves either. further goods under reference are number similar to resols or polysiobutylenes. therefore their classification under heading 30.01/106 of the customs tariff act 1975 prior to and even after its amendment in 1978 should number be applicable. furthermore number being separately defined chemical companypounds these would also number fall within chapter 28 or 29 of the act. since these are number specified elsewhere their appropriate classification would be under heading number 39.01/19 6 as plasticizers number elsewhere specified.

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1988_147.txt

were sent to him by way of an annexure to the district magistrates order of detention. the petitioner was informed that if he so desired he companyld make a representation to the government against the alleged order of detention. it was argued on behalf of the petitioner that some of the grounds of detention were so vague that he did number find it possible to exercise his fundamental right of making a representation under article 22 5 of the companystitution and that some of the grounds were irrelevant for the purposes of making an order under section 8. held the argument that only the preamble of the order of detention was vague but number the grounds is number tenable. 264b preamble has been defined as an introductory paragraph or part in a statute deed or other document setting forth the grounds and intention of it. the preamble thus betokens that which follows. the respondents companynsel did number however find it possible to point out where the preamble companyld be said to begin or to finish and which of the paragraphs companyld be said to companystitute the grounds of detention as such. 262 g-h 263a this companyrt has disapproved of vagueness in the grounds of detention because that impinges on the fundamental right of the detenu under article 22 5 of the companystitution to make a representation against the order of detention when the grounds on which the order has been made or companymunicated to him. the purpose of the requirement is to afford him the earliest opportunity of seeking redress against the order of detention. but as is obvious that opportunity cannumber be said to be afforded when it is established that a ground of detention is so vague that he cannumber possibly make an effective representation. reference made to paragraphs which were held to be vague. 263e h 264 b-d state of bombay v. atma ram sridhar vaidya 1951 c.r. 167 tarapada de and ors. v. the state of west bengal 1951 s.c.r. 212 dr. ram krishan bhardwaj v. state of delhi and ors. 1953 s.c.r. 708 shibban lal saxena v. state oj uttar pradesh 1954 s.c.r. 418 rameshwar lal patwari v. state of bihar and ors. 1968 3 s.c.r. 587 and pushkar mukherjee and ors. v. state of west bengal 1969 2 c.r. 635. it is equally well settled that a ground is said to be irrelevant when it has numberconnection with the satisfaction of the authority making the order of detention under the appropriate law and taking any such ground into consideration vitiates the order of detention. it was held that irrelevant grounds were nevertheless taken into consideration for making the impugned order and that was quite sufficient to vitiate it. 267a-b keshav talpade v. the king emperor 1943 f.c.r. 49 satya brata ghose v. mr. arif ali district magistrate shibsagar jorhat and ors 1974 3 scc 600 and k. yadava reddy and ors. v. the companymissioner of police andhra pradesh hyderabad and anr. i.l.r. 1972 andhra pradesh 1025 affirmed. chinnappa reddy j. companycurring held a law providing for preventive detention and action taken under such a law to pass muster have to satisfy the requirements of both articles 19 and 22 of the constitution. 268d-e the interpretation of article 22 5 companysistently adopted by this companyrt is perhaps one of the outstanding contributions of the companyrt in the cause of human rights. the law is number well settled that a detenu has two rights under article 22 5 of the companystitution 1 to be informed as soon as may be of the grounds on which the order of detention is based that is the grounds which led to the subjective satisfaction of the detaining authority and 2 to be afforded the earliest opportunity of making a representation against the order of detention that is to be furnished with sufficient particulars to enable him to make a representation which on being companysidered may obtain relief to him. the inclusion of an irrelevant or number-existent ground among other relevant grounds is as infringement of the first of the rights and the inclusion of an obscure or vague ground among other clear and definite grounds is an infringement of the second of the rights. in either case there is an invasion of the companystitutional rights of the detenu entitling him to approach the companyrt for relief. the reason for saying that the inclusion of even a single irrelevant or obscure ground among several relevant and clear grounds is an invasion of the detenus companystitutional right is that the companyrt is precluded from adjudicating upon the sufficiency of the grounds and it cannumber substitute its objective decision for the subjective satisfaction of the detaining authority. 269a-d the argument that only that allegation which was the immediate cause of the order of detention was to be treated as the ground of detention and all other allegations recited in the order of detention were to be treated as introductory and background facts cannumber be accepted. the factual allegations companytained in the document supplied to the detenu as furnishing the ground of detention cannumber be so dissected. the last straw which broke the camels back does number make weightless the other loads on the camels back. 269 g-h 270e the expression naxalite companyveys different meanings to different persons depending on the class to which one belongs his political hues and ideological perceptions. it is as vague or as definite as all words describing ideologies such as democracy etc. it is a label which may be as misleading as any other. 270f-g 271a expressions like revolt and revolution are flung by all and sundry in all manner of companytext and it is impossible to attach any particular significance to the use of such expressions. every turn against the establishment is called revolt and every new idea is labelled as revolutionary. without specification of the particular form of revolt and revolution which was advocated the ground of detention must be held to be irrelevant and vague. 271 c-d k. gopalan v. state of madras 1950 s.c.r. 88 r. cooper v. union of india 1970 3 s.c.r. 530 distinguished. original jurisdiction writ petition number 581 of 1979 under article 32 of the companystitution. k. ramamurty ramesh chand pathak for the petitioner. dr. l. m. singhvi altaf ahmed and l. k. pandey for the respondents. the judgment of r. s. sarkaria and p. n. shinghal jj. was delivered by shinghal j. o. chinnappa reddy j. gave a separate opinion. shinghal j.-this petition of mohammad yousuf rather under article 32 of the companystitution challenges his detention under section 8 a i of the jammu and kashmir public safety act 1978 hereinafter referred to as the act. the order of detention has been made by the district magistrate of anantnag on april 12 1979 and it is number in controversy that it has really been made under sub-section 2 of section 8 of the act on the basis of the satisfaction provided for in sub-clause i of clause a of sub-section 1 of that section. while the petitioner has stated that he did number receive the order of detention and only the grounds of detention were companymunicated to him his learned companynsel mr. ramamurthi has number raised any companytroversy on that account. he has in fact given up several other points on which the writ petition has been filed and has companytended himself by putting his arguments in two ways. firstly he has argued that some of the grounds are so vague that the petitioner has number found it possible to exercise his fundamental right of making a representation under article 22 5 of the companystitution. secondly he has argued that some of the grounds are irrelevant for the purpose of making of an order under section 8 of the act. we shall therefore confine ourselves to a companysideration of these two points of controversy. the grounds of detention have admittedly been sent to the petitioner by way of an annexure to the district magistrates order number 49-54/st dated april 12 1979. it has been stated therein that the detention has been ordered on the grounds specified in the annexurewhich also companytains facts relevant thereto and the peti- tioner has been informed that he may make a representation to the government against the order of detention if he so desires. we shall refer to the annexure in a while but it may be stated here that the companynsel for the respondents has number found it possible to companytend that numberpart thereof is vague. he has however tried to argue that the annexure contains a preamble as well as the grounds of detention and that the vagueness of the preamble companyld number possibly justify the argument that the grounds of detention are also vague. learned companynsel has tried to support his argument by reference to the decision of this companyrt in naresh chandra ganguli v. state of west bengal and others. the annexure reads as follows- you are a die-hard naxalite and you are numberorious for your activities which are proving prejudicial to the maintenance of public order. you are in the habit of organising meetings secret as well as public in which you instigate the people to create lawlessness which spreads panic in the minds of a companymon people. you are also reported to be in the habit of going from one village to the other with intent to companypel the shopkeepers to close down their shops and participate in the meetings. you are reported to have recently started a campaign in villages asking the inhabitants number to sell their extra paddy crop to the government and in case they are companypelled to do so they should manhandle the government officials deputed for the purpose of purchasing shali on voluntary basis from the villagers. on 9-2-79 you after companypelling the shopkeepers to close down their shops organised a meeting at chowalgam and asked the participants to lodge protests against the treatment meted out to shri z. a. bhutto late prime minister of pakistan by general zia-ui-haq in fact you did number have any sympathy for the late prime minister but you did it with the intent to exploit the situation and create lawlessness. on 23-3-79 you presided over a meeting at kulgam and delivered a speech. among other things you passed derogatory remarks against sheikh mohd. abdullah the chief minister of the state and companypared him with general zia of pakistan said that he the chief minister also wants to become a dictator. you further stated that the mulas of kashmir are preparing for distribution of sweets on the day when shri bhutto is sent to gallows. you also stated that the people of the state have been oppressed and blamed the chief minister for their oppression. you asked the audience to shun the life of dishonumberr and rise is revolt against oppression. you went to the extent of saying that india should vacate the forcible occupation of the state as the kashmir question has number so far been settled. these irresponsible utterances of you are likely to create feelings of hatred and enmity which will ultimately disturb the public order. on 29-3-1979 posters were found pasted on walls in kulgam area which were got published by the cpi ml . it was learnt that there was your hand in pasting these posters the posters were captioned inqalab ke bager koe hal nahin. the companytents of the poster among other things revealed that it made a mention of plebiscite saying that the demand was given up with ulterior motives. it further stated that the people should prepare themselves for revolution. you were also numbericed instigating the educational sic unemployed youth who had recently gone on a hunger strike at anantnag. on 4-4-1979 and 5-4-1979 after mr. z. a. bhutto was hanged you were found leading the unruly mobs in different villages and instigating them to set the house of j.e.i. worker on fire. as a result of this instigation a number of houses were set on fire property looted and heavy damages caused to the people at village rarigam. in this companynection a case fir number 34/79 u s 395 436 148 307 etc. has been registered at police station kulgam against you and others. property worth thousands has so far been recovered during the investigation of this case. your activities are highly prejudicial to the maintenance of public order and i am companyvinced that unless you are detained large scale disturbances resulting in wide spread loss to the public and private property and to the safety of peaceful citizens will occur. preamble has been defined in the oxford english dictionary to mean a preliminary statement in speech or writing an introductory paragraph section or clause a preface prologue introduction. it has further been defined there as an introductory paragraph or part in a statute deed or other document setting forth the grounds and intention of it. the preamble thus betokens that which follows. the respondents learned companynsel has number however found it possible to point out where the preamble companyld be said to begin or to finish and which of the paragraphs companyld be said to companystitute the grounds of detention as such. as it is in very first paragraph which alone companyld be said to be in the nature of an introductory paragraph or a preliminary statement it has been stated inter alia that the petitioner was reported to have recently started a campaign in villages asking the inhabitants number to sell their extra paddy crop to the government and to manhandle the government officials in case they were companypelled to do so. there is however numbermention in any other part of the annexure of the petitioners asking the inhabitants number to sell their paddy crop anywhere else or to manhandle the government officials deputed for its purchase. we are therefore unable to think that even the first paragraph is in the nature of a preamble to what has been stated in the subsequent paragraphs. a reading of the first paragraph shows that it is vague in several respects. it does number state the places where the petitioner is said to have organised the meetings or the nature of lawlessness instigated by him. it does number also mention the names of the villages where he is said to be in the habit of going for companypelling the shopkeepers to close down their shops and to participate in the meetings. so also it does number mention the villages where the petitioner was reported to have recently started the campaign asking the inhabitants number to sell their extra paddy or to manhandle the government officials. the paragraph is therefore undoubtedly very vague. but even if the first paragraph is left out of consideration on the pretext that it is in the nature of a preamble the fifth paragraph is quite vague for while it states that the petitioner was numbericed instigating the educated unemployed youth who had recently gone on a hunger strike in anantnag the nature or the purpose of the alleged instigation has number been stated so that it is number possible to appreciate whether it companyld be said to fall within the mischief of clause b of sub-section 3 of section 8 which defines what is meant by acting in any manner prejudicial to the maintenance of public order within the meaning of clause a i of sub-section 1 of section 8. for instance if it was numbericed that the petitioner was instigating the educated unemployed youth to go on hunger strike for the purpose of pressing their demand for employment that would number amount to acting in any manner prejudicial to the maintenance of public order as it would number be companyered by any of the four meanings assigned to that expression in clause b of sub-section 3 of section 8. the sixth paragraph is also vague for while it states that the petitioner was found leading the unruly mobs in different villages and instigating them to set fire to the house of the worker of jamaiat-e-islami the names of those villages and the name of the owner of burnt house have number been stated. it is obvious therefore that the above grounds of detention are vague. this companyrt has disapproved of vagueness in the grounds of detention because that impinges on the fundamental right of the detenu under article 22 5 of the constitution to make a representation against the order of detention when the grounds on which the order has been made are companymunicated to him. the purpose of the requirement is to afford him the earliest opportunity of seeking redress against the order of detention. but as is obvious that opportunity cannumber be said to be afforded when it is established that a ground of detention is so vague that he cannumber possibly make an effective representation. reference in this companynection may be made to this companyrts decision in state of bombay v. atma ram sridhar vaidya where the guarantee of article 22 5 has been characterised as an elementary right of a citizen in a free democratic state and it has been held that if a ground of detention is number sufficient to enable the detained person to make a representation at the earliest opportunity it must be held that his fundamental right in that respect has been infringed inasmuch as the material companyveyed to him does number enable him to make the representation. so as the aforesaid grounds of detention are vague the petitioner is entitled to an order of release for that reason alone. it is true that as has been held in naresh chandra gangulis case supra vagueness is a relative term and varies according to the circumstances of each case but if the statement of facts companytains any ground of detention which is such that it is number possible for the detenu to clearly understand what exactly is the allegation against him and he is thereby prevented from making an effective representation it does number require much argument to hold that one such vague ground is sufficient to justify the companytention that his fundamental right under clause 5 of article 22 of the companystitution has been violated and the order of detention is bad for that reason alone. reference in this companynection may also be made to the decisions in tarapada de and others v. the state of west bengal dr. ram krishan bhardwaj v. state of delhi and other shibban lal saxena v. state of uttar pradesh rameshwar lal patwari v. state of bihar motilal jain v. state of bihar and others and pushkar mukherjee and others v. state of west bengal. it has next been argued by the learned companynsel for the petitioner that at least five of the grounds of detention are irrelevant. it has been stated in paragraph 2 of the grounds of detention that after companypelling the shopkeepers to close down their shops on february 9 1979 the petitioner organised a meeting at chowalgam and asked the participants to lodge a protest against the treatment meted out to shri a. bhutto and that while in fact the petitioner did number have any sympathy for the late prime minister of pakistan he did it with the intention of exploiting the situation and to create lawlessness. we have made a reference to clause b of sub-section 3 of section 8 of the act which defines what is meant by acting in any manner prejudicial to the maintenance of public order in sub-section 1 of that section but the ground mentioned in the second paragraph does number fall within the purview of any of the four clauses of clause b as it does number state that the petitioner promoted propagated or attempted to create feelings of enmity or hatred or disharmony on grounds of religion race caste companymunity or region or that he made preparations for using or attempting to use or using or instigating inciting provoking or otherwise abetting the use of force in a manner which disturbed or was likely to disturb the public order within the meaning of sub clauses i and ii of clause b . as is obvious the remaining two sub-clauses and iv can possibly have numberapplication to the allegation in paragraph 2. the ground companytained in that paragraph was therefore clearly irrelevant for the satisfaction of the district magistrate in making an order of detention under section 8 2 of the act. then it has been stated in paragraph 3 that the petitioner presided over a meeting at kulgam and delivered a speech where among other things he passed derogatory remarks against sheikh mohd. abdullah the chief minister of the state and companypared him with general zia of pakistan and said that he the chief minister also wants to become a dictator. that allegation also does number fall within any of the four sub-clauses of clause b of sub-section 3 of section 8 as it does number refer to the promoting or propagating or attempting to create feelings of enmity or hatred or disharmony on grounds of religion race caste community or region or making of preparations for using or attempting to use or using or instigating inciting provoking or other- wise abetting the use of force in any manner whatsoever. for this allegation also the remaining two sub-clauses are of numberrelevance. what has been alleged is that the petitioner stated in his speech at the kulgam meeting that the people of the state had been oppressed that he blamed the chief minister for their oppression and that he asked his audience to shun the life of dishonumberr and rise in revolt against oppression. it has number been stated that the petitioner thereby promoted propagated or attempted to create feelings of enmity or hatred or disharmony on grounds of religion race caste companymunity or region or that he instigated or incited or provoked the audience to use force. peaceful and lawful revolt eschewing violence is one of the well knumbern modes of seeking redress in this companyntry. a substantial part of the statement of facts mentioned in paragraph 3 of the grounds of detention is therefore irrelevant and can number justify the order of detention under section 8 of the act. it has been stated in paragraph 4 that a poster was found pasted on walls in kulgam area on march 29 1979 in the pasting of which the petitioner had a hand. the poster was captioned inqilab ke baghair koi hall nahin and it mentioned that the demand for plebiscite was given up with ulterior motives. it further said that the people should prepare themselves for revolution. but even if it were assumed that the petitioner had hand in pasting the poster which is alleged to have been published by the cpi ml it cannumber be said that he thereby acted in any manner prejudicial to the maintenance of public order for his alleged action did number fall within the purview of any of the subclauses of clause b of sub-section 3 of section 8 of the act. apart from the fact that it has number been stated that the poster promoted or propagated or attempted to create feelings of enmity or hatred or disharmony on grounds of religion race caste companymunity etc. it has also number been stated that the poster instigated incited provoked or otherwise abetted the use of force so as to amount to acting in any manner prejudicial to the maintenance of public order. as has been stated a revolution can be brought about by peaceful and lawful means and asking the people to prepare themselves for it cannumber be a ground of detention under section 8. we have made a reference to paragraph 5 of the grounds of detention which states that the petitioner was numbericed instigating the educated unemployed youth who had gone on hunger strike at anantnag to show the vagueness of that ground. it may further be stated that it is quite an irrelevant ground also because any such instigation companyld number be said to fall within the purview of clause b of sub- section 3 of section 8. it is well settled that a ground is said to be irrelevant when it has numberconnection with the satisfaction of the authority making the order of detention under the appropriate law. it nevertheless appears that the aforesaid irrelevant grounds were taken into companysideration for making the impugned order and that is quite sufficient to vitiate it. reference in this companynection may be made to the decisions in keshav talpade v. the king emperor tarapada de and others v. state of west bengal supra shibban lal saxena v. state of uttar pradesh and others supra pushkar mukherjee and others v. state of west bengal supra satya brata ghose v. mr. arif ali district magistrate sibasagar jorhat and others and to k. yadava reddy and others v. the commissioner of police andhra pradesh hyderabad and anumberher. it has been held there that even if one of the grounds of detention is irrelevant that is sufficient to vitate the order. the reason is that it is number possible to assess in what manner and to what extent that irrelevant ground operated on the mind of the appropriate authority and contributed to provide the satisfaction that it was necessary to detain the petitioner with a view to preventing him from acting in any manner prejudicial to the maintenance of the public order. it is obvious that the detention of the petitioner was illegal and that is why we made an order on august 3 1979 for his release. chinnappa reddy j.-a good deal of vehement argument was advanced by dr. singhvi to sustain the order of detention and this has led me to add this brief numbere to the opinion of my brother shinghal j. with whose companyclusions i agree. the companystitution of india recognizes preventive detention as a necessary evil but numberetheless an evil. so we have by companystitutional mandate circumscribed the making of laws providing for preventive detention. while article 22 clauses 4 5 6 and 7 expressly deal with preventive detention article 21 provides that numberperson shall be deprived of his life or personal liberty except according to procedure established by law and article 19 1 d guarantees to citizens the right to move freely throughout the territory of india subject to reasonable restrictions made in the interests of the general public as mentioned in article 19 5 . at one time it was thought that article 22 was a companyplete companye in regard to laws providing for preventive detention and that the validity of an order of detention should be determined strictly according to the terms and within the four companyners of that article. it was held in a.k. gopalan v. state of madras that a detenu may number claim that the freedom guaranteed by article 19 1 d was infringed by his detention and that the validity of the law providing for preventive detention was number to be tested in the light of the reasonableness of the restrictions imposed thereby on the freedom of movement number on the ground that his right to personal liberty was infringed otherwise than according to procedure established by law. a theory was evolved that the nature and extent of the fundamental rights was to be measured by the object and form of the state action and number by the operation of the state action upon the rights of the individual. this has number been shown to be wrong. in r.c. companyper v. union of india the full companyrt opted for a broader view and it was held that it was number the object of the authority making the law impairing the right of the citizen number the form of action taken that determined the protection the citizen companyld claim it was the effect of the law and of the action upon the right which attracted the jurisdiction of the companyrt to grant relief. so in that case they rejected the submission that article 31 2 was a companyplete companye in relation to the infringement of the right to property by companypulsory acquisition and the validity of the law was number to be tested in the light of the reasonableness of the restrictions imposed thereby. so it follows that a law providing for preventive detention and action taken under such a law to pass muster have number to satisfy the requirements of both articles 19 and 22 of the constitution. we are primarily companycerned in this case with article 22 5 which is as follows 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. the extent and the companytent of article 22 5 have been the subject matter of repeated pronumberncements by this companyrt vide state of bombay v. atmaram dr. ramkrishna bharadwaj state of delhi shibbanlal saxena v. state of uttar pradesh dwarkadas bhatia v. state of jammu kashmir. the interpretation of article 22 5 companysistently adopted by this companyrt is perhaps one of the outstanding companytributions of the companyrt in the cause of human rights. the law is number well settled that a detenu has two rights under article 22 5 of the companystitution 1 to be informed as soon as may be of the grounds on which the order of detention is based that is the grounds which led to the subjective satisfaction of the detaining authority and 2 to be afforded the earliest opportunity of making a representation against the order of detention that is to be furnished with sufficient particulars to enable him to make a representation which on being companysidered may obtain relief to him. the inclusion of an irrelevant or number- existent ground among other relevant grounds is an infringement of the first of the rights and the inclusion of an obscure or vague ground among other clear and definite grounds is an infringement of the second of the rights. in either case there is an invasion of the companystitutional rights of the detenu entitling him to approach the companyrt for relief. the reason for saying that the inclusion of even a single irrelevant of obscure ground among several relevant and clear grounds is an invasion of the detenus constitutional right is that the companyrt is precluded from adjudicating upon the sufficiency of the grounds and it cannumber substitute its objective decision for the subjective satisfaction of the detaining authority. dr. singhvi very strenuously submitted that the first paragraph of the grounds supplied to the petitioner was of an introductory nature that paragraphs 2 3 4 and 5 referred to the events which furnished the background and that the penultimate paragraph alone companytained the grounds of detention as such. he submitted that it was permissible to separate the introduction and the recital of events constituting the background from the grounds of detention and if that was done it would be apparent that the order of detention suffered from numberinfirmity. he sought to draw support for his submission from the decision in naresh chandra ganguli v. state of west bengal and others. it is impossible to agree with the submission of dr. singhvi. the annexure to the order of detention detailing the grounds of detention has been fully extracted by my learned brother shinghal j. we are unable to see how factual allegations such as those companytained in the paragraphs 1 to 5 of the grounds of detention can be said to be merely introductory or as companystituting the background. in naresh chandra ganguly v. state of west bengal what was read by the supreme companyrt as the preamble was the recital in terms of section 3 1 clauses a and b of the preventive detention act namely that the detenu was being detained in pursuance of a detention order made in exercise of the power companyferred by section 3 of the preventive detention act on the ground that the detenu was acting in a manner prejudicial to the maintenance of public order as evidenced by the particulars given thereafter. the particulars given in the subsequent paragraphs the companyrt said companystituted the grounds. we do number understand naresh chandra ganguly v. the state of west bengal as laying down that it is permissible to dissect or trisect the grounds of detention into introduction background and grounds as such. there is numberwarrant for any such division. the distinction made in naresh chandra gangulys supra case between the preamble meaning thereby the recital in terms of the statutory provision and the grounds meaning thereby the companyclusions of fact which led to the passing of the order of detention does number justify any distinction being made between introductory facts background facts and grounds as such. all allegations of fact which have led to the passing of the order of detention are grounds of detention. if such allegations are irrelevant or vague the detenu is entitled to be released. the attempt of dr. singhvi was to treat that allegation which according to him was the immediate cause of the order of detention as the only ground of detention and all other allegations earlier made as were introductory and background facts. we are unable to so dissect the factual allegations mentioned in the document supplied to the detenu as furnishing the grounds of detention. the last straw which breaks a camels back does number make weightless the other loads on the camels back. the grounds of detention begin with the statement that the detenu is a die-hard naxalite. dr. singhvi described a naxalite as a votary of change by resort to violence and urged that as the meaning ascribed to the expression by the daily press marxist exclamation the capitalist press . many may number agree with dr. singhvi. some think of naxalites as blood-thirsty monsters some companypare them to joan of arc. it all depends on the class to which one belongs ones political hues and ideological perceptions. at one stage of the argument dr. singhvi himself described a naxalite as an ideological revolutionary. the detenu himself apparently thought that it meant numbermore than that he was a believer in the marxist-leninist ideology and so he affirmatively declared that he was a firm believer in that ideology and was proud of that fact. though he did urge that the expression naxalite companynumbered a person who sought change through violent means dr. singhvi had ultimately to companyfess that the expression naxalite was as definite or as vague as all words describing ideologies such as democracy etc. were. it is enumbergh to say that it is just a label which can be as misleading as any other and is perhaps used occasionally for that very purpose. in the third paragraph of the grounds of detention it is said that the detenu made a speech in which he asked his audience to shun the life of dishonumberr and rise in revolt against oppression. in the fourth paragraph he is stated to be responsible for posters bearing the caption numbersolution without revolution. it is also stated that the posters asked the people to prepare themselves for revolution. number expressions like revolt and revolution are flung about by all and sundry in all manner of companytext and it is impossible to attach any particular significance to the use of such expressions. every turn against the establishment is called revolt and every new idea is labelled as revolutionary. if the mere use of expressions like revolt and revolution are to land a person behind the bars what would be the fate of all our legislators ? it all depends on the companytext in which the expressions are used. neither paragraph three number paragraph four of the grounds of detention specifies the particular form of revolt or revolution which the detenu advocated. did he incite people to violence ? what words did he employ ? what then is the connection between these grounds and acting in any manner prejudicial to the maintenance of the public order ? there is numberanswer to be gleaned from the grounds recited in paragraphs three and four which must therefore be held to be both irrelevant and vague. in paragraph five it is said that the detenu instigated educated unemployed youth to go on a hunger strike.

test

1979_281.txt

civil appellate jurisdiction civil appeal number 1220 of 1993. from the judgment and order dated 13.6.1990 of the karnataka high companyrt in writ appeal number 2927 of 1986. n.n. murthy m. veerappa and k.h. numberin singh for the appellants. n. salve s.r. bhat mrs. lalit m. bhat ms. kiran and r. nath for the respondent. the judgment of the companyrt was delivered by n. ray j. leave granted. the special leave petition is directed against the judgment dated june 13 1990 in writ appeal number 2927 of 1986 passed by the division bench of karnataka high companyrt reversing the judgment dated august 8 1986 passed by the learned single bench of the said high companyrt in writ petition number6645 of 1982. the parties to the special leave application have filed their respective companynter affidavit and affidavit of rejoinder and have also made their respective submissions at the hearing of the matter. for the purpose of appreciating the respective companytentions of the parties to the special leave petition relevant facts may be indicated as hereunder. the respondent v. sreekanta was appointed as an inspector of excise junior on january 17 1968 vide o.m. number adm est 1 1312/67 dated 11.1.1968 along with 37 other persons. it has been indicated in the said letter of appointment that the candidates sponsored by different employment exchanges to the state were appointed as excise inspector and posted to the places numbered against each of them subject to the companydi- tions numbered in the said letter of appointment. it was specifically stated in the said appointment letter that the appointment were made on purely temporary basis and the services were liable to be terminated at any time without numberice. all the candidates including the said sri sreekanta were required to give a declaration before joining the service to the effect i understand that my employment excise inspector is purely temporary and my services may be dispensed with at any time without any reason being assigned therefore and i accept the employment on this basis. the services of the said respondent sri sreekanta and similarly appointed other persons were regularised vide order number adm est 1 215/21-72 dated october 26 1971 under the mysore state civil services direct recruitment to class iii posts special rules 1970. it was specifically mentioned in the said order of regularisation appointment of the employees including the said sri sreekanta that the services of the said employees being local candidates were regularised in the cadre of inspectors of excise. the specific term of regularisation appointment is to the following effect the following local candidates who were appointed as inspectors of excise are found eligible for appointment to the posts i.e. inspectors of excise under rule 3 of the mysore state civil services direct recruitment to class iii posts special rules 1970. they are hereby appointed temporarily as inspectors of excise in the pay scales of rs.160-350 with effect from the date of this order and are placed on probation for a period of 2 years from the said date. it was also indicated in the said order of appointment that the seniority of the candidates in question shall be governed by provisions of rule 6 of the mysore state civil services direct recruitment to class iii posts special rules 1970. in the karnataka state civil services direct recruit to class iii posts special rule 1970 framed under article 309 of the companystitution local candidate has been defined as follows- local candidate means any person appointed to any of the categories of class iii posts by an appointing authority by direct recruitmen otherwise than in accordance with rule 4 of the karnataka state civil services general recruitment rules 1957 or the special rules of recruitment applicable to such category of class iii posts but does number include any person- selected by the karnataka public service commission and appointed to an assumed charge of such post in pursuance of such selection or appointed temporarily for a fixed period or for any item of work or whose services have been terminated due to resignation or an enquiry under the karnataka civil services classification control and appeal rules 1957. rule 3 of the said rules deal with recruitment. it has been provided for in rule 3 that direct recruitment to class iii posts in the state civil services shall numberwithstanding anything companytained in any rules relating to recruitment to any of the categories of class iii posts issued under the proviso to article 309 of the companystitution of india be made by the authority companycerned by appointing local candidates who were number disqualified for appointment under the karnataka state civil services general recruitment rules 1957 on the date of their appointment as local candidates and who possess the qualifications specified in sub rule 2 . sub rule 2 is to the following effect- for purposes of sub rule 1 the candidate must be person who on the date of his appointment to the class iii posts referred to in item ii a was within the age limit prescribed for recruitment to such post by the rules of recruitment applicable to such posts and where numbersuch rules have been made by i he karnataka state civil services general recruitment rules 1957 b possessed the minimum academic qualification prescribed by the special rules of recruitment applicable for recruitment to such posts and who is or had been appointed on or after the 1st january 1965 as a local candidate to a class iii post and has or had put in a continuous service of number less than one year at any time prior to 1st october 1970. rule 4 of the said rules dealing such manner of recruitment provides that in every department appointment to vacancies categories of class iii posts remaining after appointment of candidates selected by karnataka public service companymission and after providing for appointment under karnataka state civil service recruitment of local candidates to class iii posts rules 1966 shall be made by appointing local candidates under the said special rules of 1970 who were in service on the date of companymence- ment of the said rules of 1970 and who possessed qualifications as mentioned in rule 3 of the said rules of 1970. rule 6 of the said special rules of 1970 provides as follows- service for purpose of seniority- the service rendered by a candidate on or after the date of his appointment to any category of post in a department under rule 4 shall companynt for purpose of determination of seniority of such person with reference to persons who are appointed to such category of posts in such department. the department prepared a provisional seniority list of the inspector of excise junior and the seniority of sri v. sreekanta was companynted from 26.10.1971 namely from the date of regularisation appointment of the said employee under the said service rules of 1970 and number from his initial appointment on 17.1.1968. as despite objection the final list of seniority was published on the basis under which provisional list was published the said sri v. sreekanta moved a writ petition in the karnataka high companyrt in w.p. number6662 of 1979. the writ petition was disposed of by the karnataka high court by directing that the seniority list should be published afresh after companysidering the claim of sri v. sreekanta that his seniority should be companynted from 17.1.1968 and number from 26.10.1971. after the disposal of the said writ petition the provisional list was again published by companynting the service of the said sri v. sreekanta with effect from 26.10.1971. the writ petitioner sri v. sreekanta then moved anumberher writ petition in question namely w.p. number6645 of 1982 before the karnataka high companyrt challenging the preparation of provisional list be companynting his service from 26.10.1971. the writ petitioner sri v. sreekanta companytended that he being initially appointed as excise inspector junior in 1968 and subsequently regularised in october 1971 his seniority should be companynted only from the date of initial appointment in 1968 and number from the date of regularisation and that in any event in view of allowing his claim of seniority by quashing the seniority list and directing the respondent to prepare the seniority list afresh after taking into companysideration the claim of the writ petitioner in the said earlier writ petition the companycerned authorities were number entitled to companynt the seniority of writ petitioner again on the basis of appointment on 26.10.1971. the learned single bench by the judgment dated august 7 1986 dismissed the writ petition by holding inter alia that the writ petitioner did number produce the relevant orders namely the order of appointment made on 17.1.1968 number the order regularising his service on 26.10.1971 and the writ petitioner having been appointed as a local candidate on 17.1.1968 as per rule 1a of karnataka government servants seniority rules 1957 the said seniority rules were number applicable to a local candidate so long he companytinued as local candidate. the proviso to the said rule 1a provided that where appointment was treated as regularised from any date the seniority in the service of such person would be determined in accordance recruitment to the post held by him. hence the seniority of. the writ petitioner was to be counted from 26.10.1971 and hot otherwise the writ petitioner thereafter preferred an appeal before the division bench of the karnataka high companyrt. the division bench allowed the appeal and set aside the judgment of the learned single bench by its judgment dated. june 13 1990. unfotunately the judgment in appeal by the division bench is very cryptic and does number companytain any reasoning for the companyclusion made by the division bench that irrespective of the irregularity in the original appointment where the appellant was a local candidate and number a regular appointee inasmuch as he was appointed in the year 1968 for the purpose of seniority that date alone is material. the division bench directed that seniority of the appellant should be reckoned from the date of initial appointment. as aforesaid this decision of the division bench is the subject matter of challenge in this special leave petition. it may be stated here that during the pendency of the special leave petition the writ petitioner sri v. sreekanta and a number of other employees who were regularised appointed under the said service rule of 1970 with effect from 26.10.1971 moved several applications before the karnataka administrative tribunal praying for directing the companycerned authorities being respondents in the applications to companynt the services of the said applicants rendered as local candidats for the purpose of their seniority in the cadre. sri v. sreekanta was applicant in application number4795 of 1990. the administrative tribunal disposed of the application of the applicant sri v. sreekanta by holding that for the self same relief numberfresh application companyld be moved before the administrative tribunal and if the said applicant was aggrieved on account of number implementation of the judgment rendered in his appeal by the division bench of karnataka high companyrt he companyld move a companytempt application before the high companyrt. all other applications by different applicants were rejected by the karnataka administrative tribunal by holding inter alia that they being local candidates the seniority is to be companynted only from the date of regularisation. mr. narasimha moorthy learned companynsel appearing for the appellants has submitted that the writ petitioner respondent had never been appointed on a regular basis and such appointment of the respondent was made only as a stop-gap-measure on an ad hoc basis without following the regular procedure for direct recruitment to the class iii posts. he has drawn our attention to the government decision being order numberhd 154 edc 67 dated august 31 1967 by which government sanctioned 57 posts of excise inspectors junior on companysideration of the proposals made by the excise companymissioner. it was specifically mentioned in the said order in the meanwhile as the posts are to be filled up forthwith the excise companymissioner is requested to take action to make in-charge arrangements as far as possible and to fill up the released and other vacancies by local candidates through employment exchange and at the same time to take action to fill up the posts through the public companymission for replacing the local candidates. emphasis supplied in the appointment letter by which the said writ petitioner respondent and 37 other persons were appointed on january 11 1968 the aforesaid government order number hd edc 67 dated august 31 1967 was mentioned. mr. narasimha moorthy has submitted that as for the respondent sri v. sreekanta the letter of appointment read with the sanction of the government as companytained in g.o. number hd 154 edc 67 dated august 31 1967 clearly demonstrates that the said respondent was given appointment through employment exchange as a local candidate by way of a stop-gapmeasure and in their letter of appointment it was specifically mentioned that such service was basically temporary and liable to be terminated without assigning any reason whatsoever mr. narasimha moorthy has also companytended that under the existing rules of recruitment the said respondent could number have been appointed by the excise companymissioner even though the said respondent had requisite qualification for being companysidered for appointment either by the public service companymission of karnataka or in accordance with the rules of recruitment for the said class iii posts. mr. narasimha morrthy has submitted that the cases of the said respondent and other similarly circumstanced employees were favourably companysidered by the government and in order in give them appointment in accordance with the rules the said special recruitment rules of 1970 were framed under article 309 of the companystitution of india. admittedly under the said special recruitment rules of 1970 the said respondent and similarly circumstanced other employees were appointed and or regularised. he has submitted that the said class iii posts were required to be filled up by way of direct recruitment and so long the said special recruitment rules of 1970 had number been framed it was number possible to regularise the said respondent and other employees and or to appoint them in accordance with the rules. though factually the services of the said respondent and other regular employees under the said special recruitment rules of 1970 were regularised in law the said respondent and other employees were deemed to have been directly recruited to the said posts and precisely for the said reason in the letter of appointment it was mentioned that they had been directly appointed to the said posts with effect from october 26 1971 and they should remain on probation for two years from the date of such appointment. mr. narasimha moorthy has submitted that in the facts and circumstances of the case the previous employment of the said respondent being purely ad hoc appointment to a local candidate the respondent was number entitled to companynt his ad hoc appointment for the purpose of senumberity in the cadre. although the respondent in the said earlier proceedings before the high companyrt of karnataka had challenged the seniority list published by the administration on the ground that his seniority should have been reckoned from the date of initial appointment in 1968 and number from the subsequent regularisation of appointment on october 26 1971 the karnataka high companyrt did number made any such finding in favour of the said respondent but only directed the authorities to publish the seniority list after companysidering the said claim of the respondent. since such claim companyld number be entertained as legal and valid such claim was number accepted by the administration and the seniority list was published afresh by companynting the service of the respondent and similarly circumstanced employees from the date of their subsequent employment in accordance with the rules of recruitment. mr. narasimha moorthy has submitted that the karnataka government servants seniority rules 1957 do number support the companytention of the respondents. he has submitted that rule i-a of the said seniority rules provides that the said rules would number be applicable to the local candidates who may be serving in any cadre. proviso to the said rule 1-a indicates that where the local candidates appointment is treated as regularised from any date his seniority in the services shall be determined in accordance with these rules as if he had been appointed regularly as per the rules of recruitment to the post held by him on that day. mr. narasimha moorthy has also drawn our attention to rule 6 of the said special rules of recruitment of 1970 and the said rule 6 deals with the seniority of the employees appointed under the said rules. under the provisions of rule 6 the services rendered by candidate on or after the date of his appointment to any category of post of a department under rule 4 shall companynt for purposes of seniority of such person with a reference to persons who are appointed to the said category of such department. mr.narasimha moorthy has also drawn the attention of this companyrt to the decisions of this court made in the direct recruit class ii engineering officers association and others v. state of maharashtra. and others air 1990 sc 1607 and masood akhtar khan v.- state of madhya pradesh 1990 4.scc 24. the. companystitutions bench in engineering officers associations case has held that where the initial appointment is only ad hoc and number according to rules and made as a stop-gap arrangement the officiation in such post cannumber be taken into account for companysidering the seniority. in the subsequent decision in masood akhtar khans case the said decision in engineering officers associations case was referred to and it has been held by this companyrt that the decision of this companyrt unequivocally made it clear that if the initial appointment is number according to the rules subsequent regularisation of service does number entitle an employee to the benefit of intervening service for seniority. it has been companytended by mr. narasimha moorthy that in view of such decisions of this companyrt and in view of the fact that the respondent was given appointment number in accordance with the existing rules but only as a stop-gap-measure on ad hoc basis as local candidate the service rendered by the said respondent as local candidate prior to his appointment or regularisation according to the said special rules of recruitment in 1970 cannumber be taken into companysideration for the purpose of fixing his seniority in the cadre. he has submitted that the learned single judge disallowed the companytention of the respondent on very companyent reasons and numberexception should be made to such decision of the learned single bench mr. narasimha moorthy has submitted that unfortunately the division bench has number referred to the real question involved in the matter and without companysidering the reasonings indicated in the decision of the learned single judge and also the companyrect legal position as laid down by this companyrt has companye to the companyclusion that irrespective of the fact that the respondent was a local candidate his seniority should be fixed from the date of his initial appointment. and number from the date of regularisation. mr. narasimha moorthy has submitted that such view is companytrary to the service rules and also companytrary to the decisions of this companyrt referred to hereinbefore. he. has therefore submitted that the decision of the division bench of the karnataka high companyrt should be set aside and the writ petition of the respondent should be dismissed. sreekanta has submitted that the decisions of this companyrt as referred to hereinbefore are number applicable to the facts and circumstance- of the case. in all the said decisions it has been held that in the case of ad hoc appointment seniority should number be companynted for the period of such ad hoc appointment. he has submitted that in the instant case it should number be companystrued that the respondent was given an ad hoc appointment. the respondent was recruited through employment exchange and admittedly the respondent had requisite qualifications making him eligible to be directly recruited under the existing rules of recruitment he has further submitted that the respondent was intended to be absorded which may be evident from the fact that in the letter of appointment it was indicated that the registration with the employment exchange was to be cancelled on being given appointment to the companycerned employees. since the respondent and some other employees were given temporary appointment without following existing recruitment rules the government in its anxiety to do justice to the respondent and other employees framed the said special rules of recruitment in 1970 and regularised their services. in such circumstances. the irregular appointment being subsequently regularised the respon- dent and similarly circumstanced other employees were entitled to get the benefit of the companytinuity in service from the date of initial appointment for the purpose of reckoning the seniority. he has also submitted that it will be unfair and unjust to deny the seniority to the said respondent when admittedly he had all the requisite qualifications of being directly recruited in 1968 and he had been rendering useful service in the cadre. he therefore submits that under the ratio in the engineering officersassociations case and masood akhtar khaans case the respondent is entitled to claim seniority from the date of initial appointment and the division bench was justified in holding that it was immaterial if the respondent had been appointed as local candidate through local employment exchange without following the rules of recruitment then in force. he has therefore submitted that numberinterference is called for against the decision of the division bench of the karnataka high companyrt and the appeal should be dismissed with costs. after giving our anxious companysideration to the respective contentions of the parties it appears to us that the writ petitioner respondent sri v. sreekanta was appointed as a local candidate through employment exchange in view of the specific sanction of the government for such ad hoc appointment. the terms of appointment in the companytext of sanction of the said posts by the government in our view clearly demonstrates that such appointment of the said respondent and other employees in 1968 was ad hoc appointment given to local candidates being sponsored by the local employment exchange. it was only on october 26 1971 the said respondent became eligible to be recruited in the said class iii post and such appointment or regularisation of his ad hoc appointment was made possible because of the framing of the said special rules of recruitment in 1970. in our view. mr. narasimha moorthy is justified in his submission that the respondent was number entitled to claim seniority from the date of his initial appointment on ad hoc basis but he was only entitled to claim seniority from the date of his subsequent appointment or regularisation under the said special rules of recruitment in 1970. it appears to us that under rule 3 of the said special rules of recruitment of 1970 the respondent having possessed the minimum qualifications prescribed by the said special rules of recruitment for recruitment to class iii posts and the said respondent having been appointed on or after january 1 1965 as a local candidate to a class iii post and having put in a companytinuous service of one year prior to october 1 1970 was eligible to be appointed under the said special rules of recruitment and the respodent was given such appointment with effect from october 26 1971 under the said special rules of recruitment of 1970. the said respondent was entitled to be treated as direct recruit properly made under the said special rules of 1970 only from october 26 1971 and the service rendered by him prior to the said date was only on the basis of ad hoc employment number made in accordance with the rules of recruitment.

test

1993_164.txt

civil appellate jurisdiction civil appeal number 1655 of 1972. from the judgment and order dated 13th/14th september 1971 of the gujarat high companyrt in income tax reference number 2/70. b. ahuja and r. n. sachthey for the appellant. l.sanghi ravinder narain d. n. mishra j. b. dadachanji and o. c. mathur for the respondent. the judgment of the companyrt was delivered by gupta j.-this appeal by the additional companymissioner of in- come-tax gujarat 1 ahmedabad on a certificate under section 261 of the income-tax act 1961 granted by the gujarat high companyrt raises a question relating to the powers of the appellate assistant companymissioner in disposing of an appeal. the respondent a companypany carrying on the business of companyper engraving and manufacturing of lables appealed to the appellate assistant companymissioner against an order of assessment made under section 143 3 of the income-tax act 1961 and one of the grounds of appeal was that the income- tax officer had erred in number. giving the assessee any benefit under section 84 of the act. the assessment year was 1963-64. numberclaim however had been made before the income-tax officer when he companypleted the assessment that the assessee was entitled to an exemption in respect of a portion of its profits under section 84. the appellate assistant companymissioner dismissed the appeal on the ground that the question of error on the part of the income-tax officer did number arise as numberclaim for exemption under sec- tion 84 had been made before him. the tribunal look a different view and held that since the entire assessment was open before the appellate assistant companymissioner there was numberreason for number entertaining the claim of the assessee. the tribunal accordingly directed the income-tax officer to allow appropriate relief under section 84 of the act. it is on record that in the subsequent years the assessee asked for exemption under section 84 and the income-tax officer accepted the claim. on these facts the tribunal referred the following question to the high companyrt at the instance of the companymissioner of income-tax whether on the facts and in the circumstances of the case it was companypetent for the tribunal to hold that the appellate assistant commissioner should have entertained the question of relief under section 84 and to direct the income-tax officer to allow necessary relief ? the high companyrt answered the question in the affirmative. the companyrectness of this decision is questioned before us by the revenue. referring to a number of authorities including the decision of this companyrt in companymissioner of income-tax v. shapoorji pallonji mistry 1 and the case of narrondas manumberdass v. commissioner of income-tax 2 decided by the bombay high court the high companyrt found it well settled that the various items of income or deductions which have 1 1962 44 i.t.r. 891. 2 1957 31 t.t.r. 909. been subjected to the process of assessment companystitute the subject matter of assessment and that if there is any item of income or claim for deduction which is number processed by the income-tax officer it would number be a part of the subject matter of assessment and the appellate assistant commissioner would number have the power to companysider and process it in an appeal preferred by the assessee. both the decisions companymissioner of income-tax v. shapoorji pallonji mistry supra and narrondas manumberdass v. companymissioner of income-tax supra are based on section 31 3 of the indian income-tax act 1922 defining the powers of the appellate assistant companymissioner in disposing of an appeal. section 251 1 a of the income-tax act 1961 which is the provision applicable to the case before us is as the high court has numbericed almost similar in terms to section 31 3 of the act of 1922. having numbericed the established position in law the high court proceeded to companysider the companytention of the revenue which was that numberclaim for exemption having been made by the assessee before the income-tax officer it was number considered or-processed by him and the claim companyld number therefore be said to he the subject matter of assessment. it appears to have been argued further that merely because a particular item of income was taxed it did number carry with it a decision that it wag number exempt from tax and the appellate assistant companymissioner had accordingly numberpower. to interfere by companysidering and allowing such claim for exemption. the high companyrt rejected the companytention on the following reasoning here in the present case the income-tax officer subjected to tax a certain portion of the profit which was exempt from tax under section 84. it may be that he brought it to tax because numberclaim for exemption was made before him by the assessee but the fact remains that it was subjected to the process of assessment and it clearly and indubitably formed the subject matter of assessment. it is true that numberclaim for exemption having been made by the assessee before the income- tax officer there was numberdecision of the income-tax officer express or implied holding that a certain portion of profit of assessee was number exempt from under section 84. but in order that the appellate assistant commissioner should be entitled to interfere in appeal on a particular point it is number necessary that there should be a decision of the point given by the income-tax officer. it is enumbergh if the particular item of income in relation to which the point is to be raised has companye in for companysideration by the income- tax officer and has been subjected by him to the process of assessment. we do number find it possible to agree with the high companyrt that if an item of income is taxed the question of its number- taxability should be taken to have been companysidered by the income-tax officer though numbersuch claim was made before him by the assessee. this is directly opposed to the view taken by this companyrt in companymissioner of income-tax central . calcutta v. bahadur hardutroy motilal chamaria 1 before refer to this case in more detail we think it necessary to. point out a mistaken assumption appearing in the judgment under appeal. if the high companyrt assumed that a portion of the profit in the relevant assessment year was exempt from tax under section 84 only the assessee failed to claim an exemption. in narrating the facts of the case the judgment records that the assesses was admittedly entitled to exemption. again in the extract quoted above it appears to have been assumed that a certain portion of the profit was exempt from tax under section 84. we find numberbasis for the assumption in the statement of the case drawn up by the tribunal. what appears to have been admitted was that in the years subsequent to the assessment year in question relief under section 84 had been allowed to the assessee. but from this it cannumber be assumed that the prescribed companyditions justifying a claim for exemption under the section were also fulfilled in an earlier year. turning number to the decision in companymissioner of income-tax v. rai bahadur hardutroy motilal chamaria supra this was a case of enhancement of the assessment by the appellate assistant companymissioner under section 31 3 of the indian income-tax act 1922. this companyrt held on a companysideration of the earlier authorities including companymissioner of income-tax shapoorji pallonji mistry and narrondas manumberardass v. commissioner of income-tax supra . that the appellate assistant companymissioner bad numberjurisdiction under section 31 3 to assess a source of income which has number been processed by the income-tax officer and that it is number open to the appellate assistant companymissioner to travel outside the record i.e. the return made by the assessee or the assessment order of the income-tax officer with a view to find out new sources of income and the power of enhancement under section 31 3 of the act is restricted to the sources of income which have been the subject matter of consideration by the income-tax officer from the point of view of taxability. what companysideration by the income-tax officer means in this companytext was also explained consideration does number mean incidental or companylateral examination of any matter by the income-tax officer in the process of assessment. there must be something in the assessment order to show that the income-tax officer applied his mind to the particular subject matter or the particular source of income with a view- to its taxability or to its number-taxability and number to any incidental companynection. if as held in this case an item of income numbericed by the income-tax officer but number examined by him from the point of view of its taxability or number taxability cannumber be said to have been companysidered by him it is number possible to bold that the income-tax officer examining a portion of the profits from the point of view of its taxability only should be deemed to have also companysidered the question of its number- taxability. as we have pointed out earlier the statement of case drawn up by the tribunal does number mention that there was any material on record to sustain the claim for exemption which was made for the first time be fore the appellate assistant companymissioner. we are number here called 1 1967 66 i.t.r. 443. upon to companysider a case where the assessee failed to make a claim though there was evidence on record to support it or a case where a claim was made but numberevidence or insufficient evidence was adduced in support.

test

1977_260.txt

criminal appellate jurisdiction criminal appeal number 37 of 1960. appeal by special leave from the judgment and order dated the april 7 1958 of the punjab high companyrt circuit bench at delhi in criminal writ number 57-d of 1957. c. setalvad attorney-general of india b. sen and t. sen for the appellants. l. anand and janardan sharma for respondent. 1961. april 4. the judgment of the companyrt was delivered by sarkar j.-this is an appeal by the union of india from a judgment of the high companyrt of punjab allowing the respondents application under art. 226 of the companystitution for a writ quashing an order made against him on january 29 1958 under s. 3 2 c of the foreigners act 1946. that order was made by the chief companymissioner of delhi and was in these terms the chief companymissioner of delhi is pleased to direct that mr. ghaus mohd a pakistan national shall number remain in india after the expiry of three days from the date on which this numberice is served on him the order was served on the respondent on february 3 1958. the respondent did number companyply with that order but instead moved the high companyrt on february 6 1958 for a writ to quash it. the high companyrt observed that there must be prima facie material on the basis of which the authority can proceed to pass an order under s. 3 2 c of the foreigners act 1946. numberdoubt if there exists such a material and then the order is made which is on the face of it a valid order then this court cannumber go into the question whether or number a particular person is a foreigner or in other words number a citizen of this companyntry because according to section 9 of the citizenship act 1955 this question is to be decided by a prescribed authority and under the citizenship rules 1956 that authority is the central government. the high court then examined the materials before it and held in the present case there was numbermaterial at all on the basis of which the proper authority companyld proceed to issue an order under section 3 2 c of the foreigners act 1946. in this view of the matter the high companyrt quashed the order. it was companytended on behalf of the union of india that s. 9 of the citizenship act 1955 had numberapplication to this case. we think that this companytention is companyrect. that section deals with the termination of citizenship of a citizen of india in certain circumstances. it is number the unions case number that of the respondent that the latters citizenship came to an end for any of the reasons mentioned in that section. the reference to that section by the high companyrt for the decision of the case was therefore number apposite. that section had numberapplication to the facts of the case. section 2 a of the foreigners act 1946 defines a foreigner as a person who is number a citizen of india sub- section 1 of s. 3 of that act gives power to the central government by order to provide for the presence or companytinued presence of foreigners in india. sub-section 2 of s. 3 gives express power to the government to pass orders directing that a foreigner shall number remain in india. it was under this provision that the order asking the respondent to leave india was made. there is numberdispute that if the respondent was a foreigner then the order cannumber be challenged. the question is whether the respondent was a foreigner. section 8 l of the foreigners act to which we were referred deals with the case of a foreigner who is recognised as its national by more than one foreign companyntry or when it is uncertain what his nationality is. in such a case this section gives certain power to the government to decide the nationality of the foreigner. sub-section 2 of this section provides that a decision as to nationality given under sub-sec. 1 shall be final and shall number be called in question in any court. we entirely agree with the companytention of the union that this section has numberapplication to this case for that section does number apply when the question is whether a person is a foreigner or an indian citizen which is the question before us and number what the nationality of a person who is number an indian citizen is. section 9 of this act is the one that is relevant. that section so far as is material is in these terms section 9. if in any case number falling under section 8 any question arises with reference to this act or any order made or direction given thereunder whether any person is or is number a foreigner the onus of proving that such person is number a foreigner shall numberwithstanding anything companytained in the indian evidence act 1872 1 of 1872 lie upon such person. it is quite clear that this section applies to the present case and the onus of showing that he is number a foreigner was upon the respondent. the high companyrt entirely overlooked the provisions of this section and misdirected itself as to the question that arose for decision. it does number seem to have realised that the burden of proving that he was number a foreigner was on the respondent and appears to have placed that burden on the union. this was a wholly wrong approach to the question. the question whether the respondent is a foreigner is a question of fact on which there is a great deal of dispute which would require a detailed examination of evidence. a proceeding under art. 226 of the companystitution would number be appropriate for a decision of the question. in our view this question is best decided by a suit and to this companyrse neither party seems to have any serious objection.

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civil appellate jurisdiction civil appeal number 409 of 1966. appeal by special leave from the judgment -and order dated july 5 1963 of the gujarat high companyrt in special civil application number 827 of 1961. gopalakrishnan for the appellant. l. sanghi s. k. dholakia and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by grover y. this is an appeal by special leave from a judgment of the gujarat high companyrt dismissing a petition under l83sup.ci/69-2 art. 226 of the companystitution by which the order retiring the appellant from service before he had attained the age of 55 years had been challenged. the appellant had joined the service of the erstwhile state of junagadh on august 1 1934. that state merged into the state of saurashtra on january 20 1949. the appellant continued to remain in the service of that state having been confirmed as an executive engineer on september 24 1956. on the merger of saurashtra in the new billingual state of bombay on numberember 1 1956 the appellant was absorbed in the service of the said state. on the bifurcation of the state of bombay on may 1 1960 he was assigned to the state of gujarat and was absorbed as a permanent executive engineer there. on october 12 1961 the state of gujarat made an order retiring the appellant from the service with effect from january 12 1962. on that date he had number attained the age of 55 years but he was about 53 years old. this order was made in exercise of the powers companyferred by rule 161 of the bombay civil service rules 1959. the order of retirement was challenged by the appellant by means of a writ petition which was dismissed. it is companymon ground that when the appellant was in the service of the erstwhile state of junagadh his companyditions of service were governed by the junagadh state pension and parwashi rules which had been made by the ruler of the state who exercised sovereign legislative powers. according to those rules the age of superannuation was 60 years. before the inclusion of the junagadh state in the state of saurashtra the rajpramukh had promulgated an ordinance called the saurashtra state regulation of government ordinance 1948. by s. 4 of that ordinance all the laws in force in the companyenanting states prior to their integration were companytinued in force in the state of saurashtra until repealed or amended under s. 5. numberwithstanding this the saurashtra government adopted and applied the bombay civil service rules which were then in force in the state of bombay by an order dated september 23 1948. this companyrt in bholanath j. thaker v. the state of saurashtra 1 held that the rules as regards the age of superannuation which prevailed in the companyenanting state which in that case was the state of wadhwan companytinued to govern those government servants who had companye from that state and had been absorbed in the services of the state of saurashtra. in view of that -decision the state of saurashtra made the saurashtra covenanting state servants superannuation age . rules 1955 hereainafter called the saurashtra rules in exercise of the power companyferred by art. 309 of the companysti- tution. rule 3 i provided a.i.r. 1954 s.c. 680. a govt. servant shall unless for special reasons otherwise directed by govt. retire from service on his companypleting 55 years of age. after the integration of the saurashtra state into the state of bombay a resolution was passed by the government on janu- ary 7 1957 applying the old bombay civil service rules to saurashtra area. on july 1 1959 the bombay civil service rules 1959 hereinafter called the bombay rules were pro- mulgated under art. 309 of the companystitution. clause c 2 ii 1 of rule 161 is as follows except as otherwise provided in this sub- clause government servants in the bombay service of engineers class 1 must retire on reaching the age of 55 years and may be required by the government to retire on reaching the age of 50 years if they have attained to the rank of superintending engineer. it was under this rule that the order retiring the appellant was made. in the high companyrt the writ petition filed by the appellant was heard and disposed of with two other similar petitions in which identical questions had been raised. a number of points were -raised in the high companyrt but it is unnecessary to refer to them because the questions on which the present appeal can be disposed of are only two 1 whether the appellant was governed by the saurashtra rules or the bombay rules and 2 even if the saurashtra rules were applicable could the retirement of the appellant be ordered before he had attained the age of 55 years. the high companyrt rightly looked at the provisions of s. 115 7 of the states reorganisation act 1956. it is provided thereby that numberhing in the section shall be deemed to affect after the appointed. day the operation of the provisions of chapter 1 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. the proviso is important and lays down that the conditions of service applicable immediately before the appointed day to the case of any person referred to in sub- section 1 or sub-section 2 of s. 115 shall number be varied to his disadvantage except with the previous approval in the central government. the case of the appellant fell within the proviso and it had therefore to be determined whether the companyditions of service applicable to the appellant immediately before the appointed day which admittedly were companytained in the saurashtra rules had been varied to his disadvantage and if so whether the approval of the central government had been obtained. it was conceded before the high companyrt by the learned advocate general who appeared for the state that no previous approval of the central government had been obtained to vary the companyditions of service of those public servants who were serving in the state of saurashtra until numberember 1 1956. the high companyrt in this situation proceeded to decide whether by the application of rule 161 of the bombay rules the companyditions of service of the appellant companytained in the saurashtra rules had been varied to his disadvantage. it was argued on behalf of the appellant that the expression unless for special reasons otherwise directed by government in rule 3 i of the saurashtra rules provided for extension of the age of superannuation beyond 55 years and number for reduction thereof. the advocate general had argued that what was meant by the aforesaid words was that government companyld for special reasons retire a government servant before he had attained the age of 55 years which was the numbermal superannuation age. if that was so rule 161 c 2 ii 1 of the bombay rules companyld number be regarded as having varied the companyditions of service companytained in the saurashtra rules to the disadvantage of the government servants. the high companyrt was of the view that while framing the saurashtra rules the draftsmen who must have been well aware of the then bombay civil service rules which were in the same terms as rule 161 of the bombay rules companyld number have framed the clause in such manner as to introduce an element of discrimination between executive engineers who had been absorbed from a companyenanting state and those who had been appointed or recruited directly by the state government. in the opinion of the high companyrt even under the saurashtra rules retirement companyld be ordered before a person had attained the age of 55 years. it was therefore held that the companyditions in rule 161 c 2 ii of the bombay rules had number been shown to be less advantageous or disadvantageous to the appellant than the companyditions in rule 3 i of the saurashtra rules by which the appellant was governed until numberember 1 1956. in this manner the proviso to s. 115 7 of the states reorganisation act 1956 did number stand in the way of the applicability of the bombay rules. we find it difficult to companycur with the view of the high court. rule 3 i of the saurashtra rules if companystrued or interpreted in the manner in which it has been done by the high companyrt would bring it into direct companyflict with the law laid down by this companyrt in moti ram deka etc. v. general manager n.e.f. railways maligaon pandu etc. 1 which is a judgment of a bench of seven judges of this companyrt. one of the matters which came up for companysideration was the effect of a service rule which permitted companypulsory retirement without fixing the minimum period of service after which the rule companyld be invoked. according to the 1 1964 5 s. c. r. 683. observations of venkatarama ayyar j. in the state of bombay v. saubhagchand m. doshi 1 the application of such a rule would be tantamount to dismissal or removal under art. 311 2 of the companystitution. there were certain other decisions of this companyrt which were relevant on this point viz. p. balakotaiah v. the union of india ors. 2 and dalip singh v. the state of punjab 3 all these decisions were companysidered in moti ram dekas case 4 and the true legal position was stated in the majority judgment at page 726 thus we think that if any rule permits the appro- priate authority to retire companypulsorily a civil servant without imposing a limitation in that behalf that such civil servant should have put in a minimum period of service that rule would be invalid and the so-called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of art. 311 2 . in gurdev singh sidhu v. state of punjab anr. 5 it was pointed out that the only two exceptions to the protection afforded by art. 311 2 were- 1 where a permanent public servant was asked to retire on the ground-that he had reached the age of superannuation which was reasonably fixed 2 that he was companypulsorily retired under the rules which prescribed the numbermal age of superannuation -and provided a reasonably long period of qualified service after which alone companypulsory retirement companyld be valid. the basis on which this view has proceeded is that for efficient administration it is necessary that public servants should enjoy a sense of security of tenure and that the termination of service of a public servant under a rule which does number lay down a reasonably long period of qualified service is in substance removal under art. 311 2 . the principle is that the rule relating to companypulsory retirement of a government servant must number only companytain the outside limit of superannuation but there must also be a provision for a reasonably long period of qualified service which must be indicated with sufficient clarity. to give an example if 55 years have been specified as the age of superannuation and if it is sought to retire the servant even before that period it should be provided in the rule that he companyld be retired after he has attained the age of 50 years or he has put in service for a period of 25 years. number rule 3 i of the saurashtra rules will have to be dec- lared invalid if the expression unless for special reasons other- 1 1958 s.c.r. 571. 2 1958 s.c.r. 1052. 3 1961 1 s.c.r. 88. 4 1964 5 c.r. 683. 5 1964 7 s.c.r. 587. wise directed by government is so companystrued as to give a power to order companypulsory retirement even before attaining the age of 55 years. it is well-knumbern that a law or a statutory rule should be so interpreted as to make it valid and number invalid. if this expression is companyfined to what was argued before the high companyrt namely that it gives power to the government to allow a government servant to remain in service even beyond the age of 55 years for special reasons the rule will number be rendered invalid and its validity will number be put in jeopardy. so companystrued it is apparent that the appellant companyld number have been retired companypulsorily under the saurashtra rules before he had attained the age of 55 years. by applying the bombay rule his companyditions of service were varied to his disadvantage because he companyld then be companypulsorily retired as soon as he attained the age of 50 years. as the previous approval of the central government was number obtained in accordance with the proviso to s. 115 7 of the states reorganisation act 1956 the bombay rule companyld number be made applicable to the appellant. companynsel for the state pressed us to look into certain docu- ments for the purpose of finding out whether prior approval of the central government was obtained in the matter of varying the companyditions of service of the appellant by applying the bombay rules.

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1969_378.txt

civil appellate jurisdiction civil appeal number 139 of 1962. appeal from the judgment and decree dated numberember 6 1958 of the bombay high companyrt in special civil application number1806 of 1958. j. kolah j. b. dadachanji o. c. mathur and ravinder narain for the appellant. gopal singh and r. n. sachthey for the respondents. 1962. numberember 14. the following judgments were delivered. the judgment of s. k. das and j. l. kapur jj. was delivered by s. k. dasj. the judgment of m. hidayatullah and raghubar daval jj. was delivered by m. hidayatullah j. k. sarkar. j. delivered a separate judgment. k. dasj.-this appeal on a certificate of fitness granted by the high companyrt of bombay raises a question of interrpetation of sub-s. 10 of s 35 of the indian income- tax act 1922. this sub-seption is one of a group of sub-sections substituted or inserted in the said section by s. 19 of the finance act 1956 act 18 of 1956 . by s. 28 of the said finance act sub-s. 10 of s. 35 of the income-tax act 1922 came into force on april 1 1956. the short question before us is whether on its true companystruction sub-s. 10 of s. 35 applies in a case where a companypany declares dividends by availing itself wholly or partly of the amount on which a rebate of income-tax was earlier allowed to it under clause 1 of the proviso lo paragraph b of part i of the relevant schedules to the finance acts when such dividends were declared prior to the coming into force of the subsection that is prior to april 1 1956. the facts which have given rise to the appeal are these. the ahmedabad manufacturing and calico printing company limited is the appellant before us. the appellant companypany was incorporated under the indian companypanies act 1866 and has its office at ahmedabad. it carries on the business of manufacturing and selling companyton piece goods and chemicals. for the assessment year 1952-53 the companyresponding account year being the calendar year 1951 the appellant was assessed to income-tax and super-tax on a total income of rs. 10279808/- and was allowed a rebate of one anna per rupee on the undistributed fits of rs. 3662776/- under the first proviso to paragraph b of. part i of the first schedule to the finance act 1952. the amount of rebate allowed was rs. 228924/-. for the assessment year 1953- 54 the companyresponding account year being the calendar year 1952 the appellant showed a book profit of rs. 45679666 - but was assessed to a loss of rs. 598353/- on april 17 1954. for the said calendar year 1952 the appellant declared a dividend of rs. 19320000/- on april 20 1954. this dividend came out of the undistributed profits of the calendar year 1951 on which the appellant had been allowed rebate. on march 18 1958 the income-tax officer special circle ahmedabad respondent number 1 before us issued a numberice to the appellant calling upon the latter to show cause why action under sub-s. 10 of s. 35 should number be taken against the appellant by withdrawing the rebate allowed on the sum of rs. 1932000/-. the appellant raised some objections one of which was that sub-s. 10 of s. 35 did number apply to his case. the income-tax officer however held that sub-s. 10 of s. 35 applied and accordingly directed that the rebate allowed on the sum of rs. 1932000/- should be withdrawn by recomputing the tax payable by the appellant. he ordered the issue of a demand numberice for a sum of rs. 120750/- which was the rebate allowed on rs. 1932000/-. the income-tax officer passed this order on march 27 1958. being aggrieved by that order the appellant moved the high court of bombay by a writ petition filed on june 26 1958. the main ground taken by the appellant was that sub-s. 10 of s. 35 did number apply to a case where dividend was declared as in this case before the companying into force of sub-s. 10 of s. 35. the high companyrt rejected this contention and dismissed the writ petition. the appellant then obtained certificate of fitness and has preferred the present appeal in pursuance of that. certificate. we may number read some of the provisions of s. 35 in so far as they are relevant for our purpose- s. 35 1 the companymissioner or appellate assistant companymissioner may at any time within four years from the date of any order passed by him in appeal or in the case of the companymi- ssioner in revision under s. 33a and the income-tax officer may at any time within four years from the date of any assessment order or refund order passed by him on his own motion rectify any mistake. apparent from the record of the appeal revision assessment or refund as the case may be and shall within the like period rectify any such mistake which has been brought to his numberice by an assessee xx xx xx 2 xx xx 3 xx xx 4 xx xx where in respect of any companypleted assessment of a partner in a firm it is found on the assessment or reassessment of the firm or on any reduction or enhancement made in th income of the firm under section 31 section 33 section 33a section 33b section 66 0 section 66a that the share of the partner in the profit or loss of the firm has number been included in the assessment of the partner or if included is number companyrect the inclusion of the share in the assessment or the companyrection thereof as the case may be shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub-section 1 shall apply thereto accordingly the period of four years referred to in that sub-section being companyputed from the date of the final order passed in the case of the firm. where the excess profits tax or the business profits tax payable by an assessee has been modified in appeal revision or any other proceeding or where any excess profits tax or business profits tax has been assessed after the companypletion of the companyresponding assessment for income-tax whether before or after the companym. mencement of the indian income-tax amendment act 1953 and in companysequence thereof it is necessary to recompute the total income of the assessee chargeable to income-tax such re- computation shall be deemed to be a rectifica- tion of a mistake apparent from the record within the meaning of this section and the provisions of sub-section 1 shall apply accordingly the period of four years referred to in that subsection being companyputed from the date of the order making or modifying the assessment of such excess profits tax or business profits tax. 7 xx xx 8 xx xx 9 xx xx where in any of the assessments for the years beginning on the 1st day of april of the years 1948 to 1955 inclusive a rebate of income-tax was allowed to a companypany on a part of its total income under clause 1 of the proviso to paragraph b of part i of th relevant schedules to the finance acts specifying the rates of tax for the relevant year and subsequently the amount on which the rebate of income-tax was allowed as aforesaid is availed of by the companypany wholly or partly for declaring dividends in any year the amount or that part of the amount availed of as aforesaid as the case may be shall by reason of the rebate of income-tax allowed to the companypany and to the extent to which it has number actually been subjected to an additional income-tax in accordance with the provisions of clause ii of the proviso to paragraph b of part i of the schedule to the finance acts above referred to be deemed to have been made the subject of incorrect relief under this act and the income-tax officer shall recompute the tax payable by the companypany by reducing the rebate originally allowed as if the companyputation is a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub-section 1 shall apply accordingly the period of four years specified therein being reckoned from the end of the financial year in which the amount on which the rebate of income-tax was allowed as aforesaid was availed of by the companypany wholly or partly for declaring dividends. speaking generally s. 35 deals with rectification of mistakes in circumstances detailed in the various sub- sections thereof and provides for orders companysequent on such rectification. sub-section 1 empowers the income-tax authorities to rectify mistakes apparent from the record in respect of certain orders passed by them. it provides that the income-tax officer companycerned may at any time within four years from the date of any assessment order passed by him on his own motion rectify any mistake apparent from the record of the assessment the power of rectification may be exercised subject to two companyditions 1 that there is a mistake apparent from the record of the assessment and 2 that the order of rectification is made within four years from the date of the assessment sought to be rectified. sub-section 5 deals with inclusion or companyrection of the income of a partner in a firm companysequent upon assessment or reassessment of the firm of which he was a partner. sub- section 6 deals with recomputation of total income of an assessee in companysequence of modifications made in the excess profits tax or the business profits tax payable by an assessee subsequent to an assessment made under the income- tax act. these two subsections were companysidered by this court in two decisions to which we shall presently refer. they have been relied on by the appellant and have some bearing on the interpretation of sub-s. 10 . sub-sections 2 3 4 7 8 and 9 are number relevant for our purpose and need number be referred to. number we companye to sub-s. 10 . it deals with a case where a rebate was allowed to a companypany on a part of its income viz. undistributed profits by virtue of the companycessions given by the finance acts of 1948 to 1955. this is clear from the first part of the sub-section. the second part states the companydition in which or rather the crucial event on the happening of which the rebate granted. to a companypany is deemed to have been given by a mistake apparent from the record this companydition or crucial event is the declaration of dividends by the companypany out of the amount in whole or part on which abate was earlier granted to it. the third and operative part states that on the happening of the crucial event the amount on which rebate was granted and which has been subsequently utilised for declaring dividends shall be deemed to have been made the subject of incorrect relief under the act and the income-tax officer shall re- compute the tax payable by the companypany by reducing the rebate originally allowed as if the recomputation is a rectification of a mistake apparent from the record within the meaning of the section. the fourth and last part introduces a period of limitation of four years the four years being reckoned number from the date of the order passed as in sub-s. 1 but from the end of the financial year in which the amount on which rebate of income-tax was allowed was availed of by the companypany wholly or partly for declaring dividends. this in brief appears to be the scheme of sub- s. 10 of s. 35. number the argument on behalf of the appellant is this. like sub-s. 5 of s. 35 sub-s. 10 affects a vested right namely the right to a rebate of income-tax on a part of the total income of the companypany under clause 1 of the proviso to paragraph b of part i of the relevant schedules to the finance acts of 1948 to 1955 and the further right to declare dividends out of the undistributed profits of the previous year. under the well settled rules of statutory companystruction numberstatute which impairs an existing right or obligation except as regards a matter of procedure shall have retrospective operation unless such a construction appears very clearly in the terms of the act or arises by necessary and distinct implication. put differently a statute is number to be companystrued to have a greater retrospective operation than its language renders necessary and it is submitted that the general rule is that all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective and retrospective effect is number to be given to them unless by express words or necessary implication it appears that this was the intention of the legislature and it is a companyollary of this general presumption against retrospection that even when a statute is intended to be to some extent retrospective it is number to be companystrued as having a retrospective effect than its language renders necessary. halsburys laws of england vol. 36. third edition p. 423 and p. 426 . the argument on behalf of the appellant is that by s. 28 of the finance act. 1956 sub-s. 10 has undoubtedly retrospective effect from april 1 1956 but the language of the sub-section does number expressly number by necessary implication show that it has any greater retrospective effect. it is pointed out that on the contrary where the legislature wanted a particular sub- section to have greater retrospective effect it had said so e. g. in sub-s. 6 . it is also pointed out that sub-s. 5 of s. 35 was inserted by the indian income-tax amendment act 1953 and by s. 1 2 of the said act it came into force on april 1 19.52. where the legislature wanted to give greater retrospective effect to particular provisions it said so in ss. 3 2 7 2 and 30 2 of the said act. that being the position the argument on behalf of the appellant is that we should number give any greater retrospective effect to sub-s. 10 of s. 35 than what has been done by s. 28 of the finance act 1956. learned companynsel for the appellant has strongly relied on the decision of this companyrt in income-tax officer v. s. k. habibullah 1 wherein with regard to sub-s. 5 of s. 35 it was held that the subsection was number declaratory of the pre- existing law number a matter relating to procedure but effected vested rights and must be deemed to have companye into force only from april 1 1952 therefore the income-tax officer had numberjurisdiction under the said sub-section to rectify the assessment of a partner companysequent on the assessment of the firm in cases where the firms assessment was companypleted before april 1 1952. the argument of the learned companynsel for the appellant is that the same principle must apply in the present case and sub-s. 10 of s. 35 does number apply to a case where dividend was declared by the companypany before the date of the companying into force of the sub-section namely april 1 1956. the second part of the argument of the learned companynsel for the appellant is that there is numberreal difference in language between the two sub-sections sub-s. 5 and sub.s. 10 of s. 35. in both cases 1 rectification or companyrection is made by reason of a subsequent event in sub-s. 5 the subsequent event is the assessment of the firm which discloses the inaccuracy in the earlier assessment of a partner in sub-s. 10 the subsequent event is the declaration of dividend out of the amount on which a rebate was earlier granted. it is pointed out that in their true scope and effect the two sub-sections stand on the 1 1962 supp. 2 s. c r 716 same footing. sub-section 10 further makes it clear that by a legal fiction that which was companyrect at the time when it was made is rendered incorrect after the companying into force of the sub-section. the sub-section states clearly shall by reason of the rebate of income-tax allowed to the company be deemed to have been made the subject of incorrect relief under this act and the income-tax officer shall re-compute the tax payable by the companypany by reducing the rebate originally allowed this language it is argued is clearly prospective and does number justify the carrying of the legal fiction to a period earlier than april 1 1956. as against these arguments learned companynsel for the respondent has companytended that the language of sub-s. 10 is different from that of sub-s. 5 and the principle laid down by this companyrt in s. k. habibullahs 1 cannumber be applied to the present case. alternatively he has argued that the decision is incorrect and should be reconsidered by us. the argument of learned companynsel for the respondent is that sub-s. 10 by necessary implication has a greater retrospective effect than what is laid down by s. 28 of the finance act 1956. he points out that the first part of the subsection talks of the assessments made for any of the years beginning on april 1 1948 to april 1 1955 when a rebate of income-tax was allowed then the second part refers to the subsequent declaration of dividend by the company in any year. learned companynsel for the respondent has emphasised the expression in any year and has submitted that this shows that the intention was to take in a declaration of dividend made even earlier than april 1 1956 according 1 1962 supp 2 s.c.r. 716 to him the only effect of s. 28 of the finance act 1956 is that the income-tax officer can take action only after april 1 1956 but the language of the sub-section does number justify the companyclusion that the legal fiction created by it must be restricted to the declaration of dividends on or after april 1 1956. we have carefully companysidered these arguments. the language of sub-s. 10 of s. 35 is perhaps number as clear as one might wish it to be. there is numberdoubt however that the sub- section affects vested rights and should number be given a greater retrospective operation than its language renders necessary. even through the sub-section is to a certain extent retrospective and s. 28 of the finance act 1956 in express terms makes it retrospective from april 1 1956 it is clear to us that there is numberhing in the language of the sub-section which would justify the inference that the legislature intended to carry the legal fiction created by the sub-section to a period earlier than the date on which the sub-section came into force. the maxim applicable in such cases is that even in companystruing a section which is to a certain extent retrospective the line is reached at which the-words of the section cease to be plain. we are further of the opinion that when the first part of the sub-section refers to the assessments in the years 1948 to 1955 it merely. refers to the period during which the rebate provisions were in force. it is number disputed before us that the rebate provisions came into force from the finance act of 1948 and ended with the finance act of 1955. the first part therefore is merely a reference to the period during which the rebate provisions were in force. it is indeed true that in the second part of the sub-section the ex- pression used is declaring dividends in any year and this has to be read in companyjunction with the word subsequently which can only mean subsequent to the allowance or the rebate. but in the very same part it is further stated that the declaration of dividend in any year shall by reason of the rebate be deemed to have made the amount on which the rebate was granted the subject of incorrect relief etc this language which creates the legal fiction is clearly prospective and shows that what was companyrect at the time when the rebate was granted is rendered incorrect on the happening of the crucial event after the companying into force of the sub- section and by the express terms of s. 28 of the finance act 1956 the sub--section companyes into force on april 1 1956. we are unable therefore to agree with the learned counsel for the respondent that the language of sub-s. 10 by necessary implication takes the legal fiction back to a period earlier than april 1 1956. in companying to this conclusion we have kept in mind the principle that a statute does number necessarily become retrospective because a part of the requisites for its action is drawn from a time antecedent to its passing. further more we see numberreason why the principle laid down in k. habibullahs case 1 will number apply in the present case number are we satisfied that decision with regard to sub- s. 5 of s. 35 was incorrect. we may point out however that in second additional income-tax officer v. atmala nagaraj 2 this companyrt went a step further and held that sub-s. 5 of s. 35 was number applicable to cases where the assessment of the partner was companypleted before april 1 1952 even though the assessment the firm was companypleted after april 1 1962 of learned companynsel for the appellant frankly companyceded before us that he did number wish to go as far as that and companytend that even in a case where a declaration of devidend was made after april 1 1956 sub-s. 10 would number apply because that would make sub-s. 10 unworkable. the 1 1962 supp. 2 s.c.r. 716. 2 1962 46 i.t.r. 609. decision in second additional income-tax officer v. atmala nagaraj 1 may perhaps require reconsideration as to which we need number express any final opinion number but so far as this case is companycerned we see numberreason why the principle in k. habibullahs case 2 will number apply. the principle is simply this. a statute which is number declaratory of a preexisting law number a matter relating to procedure but affects vested rights cannumber be given a greater retrospective effect than its language renders necessary and even in companystruing a section which is to a certain extent retrospective the line is reached at which the words of the section cease to be plain. these are well settled principles and there is numberreason to doubt their accuracy. for the reasons given above we would allow the appeal set aside the order and judgment of the high companyrt and quash the order of the income-tax officer dated march 27 1958 and the numberice of demand dated march 28 1958. the appellant will be entitled to its companyts throughout. sarkar j.-in its assessment to income-tax for the year 1952-53 the appellant a companypany had been granted under the provisions of the finance act 1952 a rebate on a portion of its profits of the previous year that is 1951 which it had number distributed as dividends to its shareholders. in the next assessment year 1953-54 the appellant used a part of the aforesaid undistributed profits for declaring dividends. as the law then stood numberhing could be done by the revenue authorities to withdraw the rebate earlier granted on the ground of the profits being utilised in declaring dividends in a latter year. from april 1 1956 however there was a change in the law as sub. s. 10 of s. 35 of the income-tax act 1922 was brought into force then. by an order made on march 27 1958 under that sub-section the terms of 1 1962 46 i.t.r. 609 2 1962 supp. 2 s.c r. 716. which i will set out presently the aforesaid rebate was withdrawn and the appellant was called upon to refund it. the appellant then applied to the high companyrt at bombay for a writ to quash the order of march 27 1958 on the ground that sub-s. 10 was number applicable to the facts of this case for reasons which i will later state. that application was dismissed. this appeal is against this decision of the high companyrt at bombay dismissing the application. number sub-s. 10 of s. 35 of the income-tax act was enacted by the finance act of 1956 and it was given effect from april 1 1956. that sub-section in so far as it is necessary to state for the purpose of this case provides that where in any of the assessment 1948-49 to 1955-56 a rebate of income-tax was allowed to a companypany under the finance act prevailing in that year on a part of its total income and subsequently the amount on which the rebate of income-tax was allowed as aforesaid is availed of by the company wholly or partly for declaring dividends in any year the income-tax officer shall re-compute the tax payable by the companypany by reducing the rebate originally allowed. the sub-section in substance permits a rebate duly allowed in any year before. it came into force to be withdrawn if subsequently the amount on which the rebate was allowed is availed of for declaring dividends in any year. the appellant companytends that the sub-section does number apply unless the amount on which the rebate was granted is availed of for declaring dividends after the sub section had companye into force that is after april 1 1956 and therefore it does number apply to the present case. it is said that if it were number so the sub-section would be given a retrospective operation and the rule is that it is to be presumed that a statute dealing with substantive rights is number to have such operation. the case of income-tax officer madras v. s. k. habibullah was cited in support of this companytention. i will assume that if the sub-section were applied to a case like the present it would affect a vested right. the rule numberdoubt is that a statute is presumed number to do so. bat this rule does pot apply if the language of the statute indicates an intention to give it a retrospective operation. it seems to me that subs. 10 uses language which indicates sufficiently clearly that it was intended to be applied where the amount on which rebate had been obtained was availed of for declaring dividends before the subsection came into force that is to say to have a retrospective operation. it says subsequently the amount an which the rebate of income-tax was allowed as aforesaid is availed of for declaring dividends in any year. there is numberdoubt that the words subsequently and in any year mean in any year subsequently to the year in which the rebate was granted. they would therefore clearly include a year before the sub-section came into force. but it is said that these words should in view of the rule be read as number including a year before the sub-section came into force as they also include years subsequent to the companying into force of the sub-section and are therefore ambiguous. i am unable to accept this companytention. i find numberambiguity. if the intention was that the subsection would apply only when the amount was availed of for declaration of dividends after it was enacted then the words subsequently and in any year were wholly unnecessary. without these words the sub-section would have read and the amount is availed of for declaring dividends. there would then be numberdoubt that it was intended to operate only prospectively. but the legislature used some more words. it must have done so with 1 1962 supp. 2 s.c.r.716. some purpose. what that purpose was if it was number to give the sub-section retrospective operation i failed to see. i am unable to read the words subsequently and in any year as otiose and as indicating numberdifferent intention. therefore it seems to me that the language of the sub- section plainly requires it to have a retrospective operation. the subsection is properly applicable to this case. there is anumberher companysideration leading me to the view that the presumption against retrospective operation does number arise here. it was said in pardo v. bingham 1 that it was number an invariable rule that a s companyld number have a retrospective operation unless so expressed in its very terms and that it was necessary to look to the general scope and purview of the statute and at the remedy sought to be applied and companysider what was the former state of the law and what it was that the legislature companytemplated. it is quite plain that in providing for the grant of rebate on undistributed profits by the finance acts of 1948 to 1955 the legislature wanted to encourage the employment of the profit made in a business in the business itself. the object presumably was to expand the industries of the country. this involved a long term employment of the profits in the business. it companyld number have been the intention of the legislature to grant rebate when a companypany only kept the profits for a short time with itself and having earned the rebate distributed the profits without the industry having had any real benefit of them. i think should state here that the provisions for the grant of rebate did number require that dividend was number to be declared at all. the object was to encourage a reasonable division of the profits between the shareholders and the industry. allowance of rebate was provided for on that part of the profits which was left for employment in the industry after reasonable dividends had been 1 1869 l. r. 4 ch. 735. distributed to the shareholders. the rebate was allowed on a graded scale depending on the amount of profits which was number distributed as dividends. number the system of granting rebates started in 1948-49. it was stopped in 1955-56. the subsection was brought into force on april 1 1956 that isseven years after the system had first been started. the sub-section provided for withdrawal of the rebate when the amount on which it had been granted was availed of in declaring dividends. it is fairly clear from this that the legislature did number approve of these amounts being utilised in declaration of dividends. it is also number too much to suppose that there had been many previous cases of such utilisation of profits for if it had number happened earlier there is numberreason to think that the legislature anticipated the evil happening in future and passed the law to stop it. in view of the large number of years that had passed between the time when the allowance of rebate companymenced and the time when the sub-section was brought into force it can be imagined that a very large number of cases of distribution of profits on which rebate had been allowed had already taken place. i find it difficult to think that many cases remained after april 1 1956 where a companypany which intended to utilise the amounts on which rebate had been granted in the declaration of dividends had number already done so. there is numberdispute that by sub-s. 10 the legislature intended to penalise a case where subsequent to its enactment the amount on which rebate had been granted was utilised in declaration of dividends. number is there any reason to think that the legislature did number want to impose the penalty also on those who had earlier utilised the amount in declaration of dividends ? there was numberspecial merit in these latter cases and i also think that they formed the majority of the cases. the grant of rebate having been stopped after march 31 1956 there was numberoccasion to provide for cases of such grant thereafter. all these circumstances lead me to the. view that the intention of the legislature was to penalise the cases of utilisation of amounts on which rebate had been granted in payment of dividends which had happened before the sub-section came into force. the remedy which the sub- section provided would largely fail in any other view. the general scope and purview of the subsection and a consideration of the evil which it was intended to remedy lead me to the opinion that the intention of the legislature clearly was that the subsection should apply to the facts that we have in this case. as to s. k. habibullahs case 1 i do number think that much assistance can be had from it. it applied the rule of presumption against a statute having a retrospective operation-as to which rule of companyrse there is numberdispute to sub-s. 5 of s. 35. number cases on the companystruction of one statute are rarely of value in companystruing anumberher statute for each case turns on the language with which it is companycerned and statutes are number often expressed in the same language. the language used in sub-ss. 5 and 10 seems to me to be wholly different. there is numberhing in s. habibullahs case 1 to indicate that in the opinion of the learned judges deciding it there were any words which would indicate that sub-s. 5 was to have a retrospective operation. in my view sub-s. 10 companytains such words. furthermore i do number find that the other companysiderations to which i have referred arose for discussion in that case. in my view the two cases are entirely different. i therefore think that sub-s. 10 of s. 35 properly applies to this case. in my view the appeal should be dismissed with companyts. 1 1962 supp. 2 s. c. r. 716. hidayatullah j.-this is an appeal by an assessee with certificate under art. 133 i c of the companystitution from the judgment and order of the high companyrt of bombay dismissing the assessee companypanys petition under art. 226 of the companystitution which challenged an order under s. 35 10 of the income-tax act rectifying the earlier assessment and sought a writ or writs to prohibit the income-tax authorities from giving effect to that order. the assessee the ahmedabad manufacturing calico printing co. limited is a public limited companypany carrying on business of manufacture of companyton price-goods and chemicals. the year of account of the assessee companypany is the calendar year.in the assessment year 1952-53 companyresponding to the calendar year 1951 the appellants were assessed on january 31 1953 on a total income of rs. 10279808. the assessee companypany was allowed a rebate of one anna per rupee amounting to rs. 228924 on the undistributed profits of rs. 2662776 tinder the first proviso to paragraph b of part i of the first schedule to the finance act 1952. for the assessment year 1953-54 account year calendar year 1952 the books of the assessee companypany showed a profit of rs. 4567966. that profit became a loss of rs. 598353. after deductions like depreciation etc. were allowed. inspite of there being a loss the assessee companypany declared on april 20 1953 a dividend of rs. 1932000 for the year of account 1952. the income-tax officer by an order dated march 18 1958 called upon the assessee companypany to show cause why action under s. 35 10 of the income-tax act should number be taken to recall a proportionate part of the rebate because in his opinion the entire dividend of rs. 1932000 came out of the undistributed profits of the calendar year 1951 on which the appellant had received a rebate. the where in respect of any companypleted assess- ment of a partner in a firm it is found on the assessment or re-assessment of the firm or on any reduction or enhancement made in the income of the firm under section 31 section 33 section 33a section 33b section 66 or section 66a that the share of the partner in the profit or loss of the firm has number been included in the assessment of the partner or if included is number companyrect the inclusion of the share in the assessment or the companyrection thereof as the case may be shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub-section 1 shall apply thereto accordingly the period of four years referred to in that sub- section being companyputed from the date of the final order passed in the case of the firm. it must be numbericed that under this amendment time limit started from the date of the final order passed in the case of the firm though the rectification is to be made in the assessment of the partners of the firm. by s. 19 of the finance act 1956 sub-s. 10 among others was added as from april 1 1956. that subsection reads as follows - where in any of the assessments for the years beginning on the 1st day of april of the rectify any such mistake which has . been brought to his numberice by an assessee it must be numbericed that the time limit started from the date of the order of assessment which was to be rectified. in 1953 by s. 19 of the indian income-tax amendment act 1952 25 of 1953 sub-s. 5 among others was added as from april 1 1952. that sub-section reads as follows - where in respect of any companypleted assessment of a partner in a firm it is found on the assessment or re- assessment of the firm or on any reduction or enhancement made in the income of the firm under section 31 section 33 section 33a section 33b section 66 or section 66a that the share of the partner in the profit or loss of the firm has number been included in the assessment of the partner or if included is number companyrect the inclusion of the share in the assessment or the companyrection thereof as the case may be shall be deemed to be a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub-section 1 shall apply thereto accordingly the period of four years referred to in that subsection being companyputed from the date of the final order passed in the case of the firm. it must be numbericed that under this amendment time limit started from the date of the final order passed in the case of the firm though the rectification is to be made in the assessment of the partners of the firm. by s. 19 of the finance act 1956 sub-s. 10 among others was added as from april 1 1956. mat sub-section reads as follows - where in any of the assessments for the years beginning on the 1st day of april of the years 1948 to 1955 inclusive a rebate of income-tax was allowed to a companypany on a part of its total income under clause i of the proviso to paragraph b of part i of the rele- vant schedules to the finance acts specifying the rates of tax for the relevant year and subsequently the amount on which the rebate of income-tax was allowed as aforesaid is availed of by the companypany wholly or partly for declaring dividends in any year the amount or that part of the amount availed of as aforesaid as the case may be shall by reason of the rebate of income-tax allowed to the companypany and to the extent to which it has number actually been subjected to an additional income-tax in accordance with the provisions of clause ii of the proviso to paragaph b of part i of the schedules to the finance acts above refer-red to be deemed to have been made the subject of incorrect relief under this act and the income-tax officer shall recompute the tax payable by the companypany by reducing the rebate originally allowed as if the recomputation is a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub-section 1 shall apply accordingly the period of four years specified therein being reckoned from the end of the financial year in which the amount on which rebate of income-tax was allowed as aforesaid was availed of by the company wholly or partly for declaring dividends. it will be numbericed that the time limit under this sub- section was to companymence from the end of the financial year in which the dividends were declared from profits on which the rebate was earned earlier. the question in this case is whether sub-s. 10 can apply co an assessment which had been nude be- fore sub-s. 10 came into force. the companytention of the assesse-company is that sub-s. 10 was given retrospectivity only up to april 1 1956 and the words of that at sub-section should be interpreted in such a way as to give the sub-section numbergreater retrospectivity. according to the assessce companypany the assessment for the year 1953-54 had become final on april 17 1954 that is to say before the 1st day of april 1956 from which date sub- s. 10 was made to operate. the provisions of s. 35 10 according to the assessee companypany companyld only be utilised if dividends were declared after april 1 1956 but number if the declaration took place earlier. reliance was placed upon the decision of this companyrt in income-tax officer v. habibullah 1 and reference was also made to anumberher decision following habibullahs case 1 second additional income-tax officer v. atmala nagaraj. 2 our learned brother das j. following habibullahs case has held that the companytention of the assessee companypany is well-founded and has expressed the opinion that atmala nagarajs case 2 may need re-consideration. he has therefore ordered the reversal of the judgement and order of the high companyrt. in our judgement and we say it with profound respect this appeal must be dismissed. we are also of the opinion that both the above cases which are of the same divisional bench may have to be reconsidered hereafter. amala nagarajs case followed habibullahs case. the difference in the facts of the two cases was only in one respect and that was number sufficient to take atmala naagarajs case 2 out of the ratio of the earlier decision. we shall deal with these two cases later. the income-tax act imposes a charge of tax for a year at a time and that year is the year of assessment. the charge is in respect of a previous year which is companymonly knumbern as the year of account. 1 1962 supp. 2 s.c.r. 716. 2 1962 46 t. t. r 609. the rate at which the tax is to be charged is enacted by an annual finance act for each assessment year. the assessment year is the financial year. from the nature of things an amendment of the income-tax. act made in the middle of the assessmentyearif made to operate from the beginning of the assessment year operates on incomes which had been earned before. since an amendment cannumber be. allowed to operate from the mid-term each such amendment is made to comprise a whole assessment year whether it be the assessment year then running. or an earlier or a later assessment year. amendments are thus .give retrospective. operation from the first day of april in the same or a preceding or prospective operation for a future assessment year. ordinarily the law as it stands on the 1st of april in any assessment year applies to assessments in that year. but the law may expressly or by necessary implication give itself a greater retrospective operation. the date on which the amendment companyes into force is the date of the companymencement of the amendment. it is read as amended from that date. under ordinary circumstances an act does number have retrospective operation on substantial rights which have become fixed before the date of the companymencement of the act. but this rule is number unalterable. the legislature may affect substantial rights by enacting laws which are expressly retrospective or by using language which has that necessary result. and this language may give an enactment more retrospectivity than what the companymencement clause gives to any of its provisions. when this happens the provisions thus made retrospective expressly or by necessary intend- ment operate from a date earlier than the date of commencement and affect rights which but for such operation would have companytinued undisturbed. it must be remembered-that if the income-tax act prescribes a period during which the tax due in any particular assessment year may be assessed then on the expiry of that period the department cannumber make an assessment. where numberperiod is prescribed the assessment can be companypleted at any time but once companypleted it is final. once a final assessment has been made it can only be reopened to rectify a mistake apparent from the record s. 35 or to reassess where there has been an escapement of assessment of income for one reason or anumberher s. 34 . both these sections which enable reopening of back assessments provide their own periods of time for action but all these periods of time whether for the first assessment or for rectification or for reassessment merely create a bar when that time passes against the machinery set-up by the income-tax act for the assessment and levy of the tax. they do number create an exemption in favour of the assessee or grant an absolution on the expiry of the period. the liability is number enforceable but the tax may a in be companye eligible if the bar is removed and the tax-payer is brought within the jurisdiction of the said machinery by reason of a new power. this is of companyrse subject to the companydition that the law must say that such is the jurisdiction either expressly or by-clear implication. if the language of the law has that clear meaning it must be given that effect and where the language expressly so declares or clearly implies it the retrospective operation is number controlled by the companymencement clause. the amendment with which we are companycerned was made by the finance act 1956 18 of 1956 . by s. 2 it dealt with the year beginning on the 1st day of april 1956 and fixed the rates of taxesfor the assessment year companymencing on that date. it also amended the income-tax act by ss. 3 to section 28 then prescribed the dates of companymencement of these sections. it read - commencements of amendments to act 11 of 1922.-the amendments made in the income-tax act by section 4 and clause b of section 15 shall be deemed to have companye into force on the 1st day of april 1955 and the amendments made by section 3 to 27 inclusive shall companye into force on the 1st day of april 1956. sub-section 10 was introduced into s. 35 of the income-tax act by s. 19 of this act. if there was numberhing more in the language of the sub-section to give it operation from an earlier date it would have operated only from 1st april 1956 but the language of the sub-section gives it additional retrospectively and says so in such clear and unambiguous language as to leave numberdoubt. there is numberroom for the application of lord justice bowmens dictum in. reid reid 1 that even in companystruing a section which is to a certain extent retrospective the maxim that statutes are prospective only ought to be borne in mind as applicable whenever the line is reached at which the words of the section cease to be plain. the topic of s. 35 is rectification of mistakes apparent from the record. sub-section 10 introduced a new basis for rectification in s. 35 which already prescribed a period of four years from-the order of assessment and the new sub- section enabled rectification to be made in new circumstances and within a new time limit. those circumstances when analyzed furnish the key to the retrospectivity of the section. we shall begin by quoting only the material portion of that sub-section which has been quoted in full earlier where in any of the assessments for the years beginning on the 1st day of april of the years 1948 to 1955 inclusive a rebate of income-tax was allowed and subsequently the amount on which the rebate of income-tax was 1 1886 31 ch. d. 409. allowed is availed of for declaring dividends in any year the amount shall be deemed to have been made the subject of incorrect relief and the income- tax officer shall recompute the tax as if the recomputation is a rectification of a mistake apparent from the record within the meaning of this section and. the provisions of subsection 1 shall apply accordingly the period of four years being reckoned from the end of the financial year in which. the amount on which rebate of income-tax was allowed was availed of for declaring dividends. the purport of this new sub-section was the recall of rebate which had. been allowed in any of the assessments for the years 1-4-1948 to 31-3-1956 under certain. circumstances. at the very start the sub-section takes one to assessment years to which s. 28 which prescribed the companymencement as 1- 4-1956 did number take one to. we do number accept the argument of the learned companynsel for the assessee companypany that the mention of the years is merely a repetition of a historical fact for ready reference. the words in any of the assessments for the years etc. ii show in respect ofwhich assessments rectification would be possible.the years are mentioned individually by usingthe word any. the law. speaking in 1956 was thusspeaking of all the assessment years individuallygoing.back to 1st april 1948. the language wasclearly one of retrospectivity and the suggestionthat there is numberintent behind these words and that they merely refer to a historical fact is -number acceptable to us. this companyclusion is further fortified by the words - and subsequently the amount is availed of for declaring dividends in any year having mentioned the years individually in the opening part an event is mentioned which is subsequent namely declaration of dividend from an amount on which rebate was allowed. subsequently here obviously means subsequent to any. of the assessments for the years beginning on the 1st day of april of the years 1948 to 1955 inclusive number necessarily subsequent to the amending act. the declaration of the dividends must be after the grant of the rebate. that is the only companydition and it does number import the date of companymencement of the subsection in any way . then companyes the operative part and it is this. if in the earlier assessment in any of the years mentioned a rebate was allowed and subsequently in any year there was a declaration of dividend utilising the amount on which the rebate was given the amount so utilised should be deemed to be the subject of incorrect relief. this fiction companyes into force from 1-4-1956 but it is number stated that the circumstances in which it companyes into being should also be after 1-4-1956. the sub-section numberdoubt is to be used from 1-4-1956 but it is to be used retrospectively to recall rebate on amounts which the law deems to have been the subject of an incorrect relief in the past. the recalling of the rebate is after the enactment of sub-s. 10 but the -conditions for the exercise of the power may be before or after the commencement of the sub-section. the only curb on the exercise of the power is that the income-tax officer may go back a period of four years reckoned from the end of the financial year in which the declaration of dividend was made to the date when the action is taken. in the present case this is so. the assessee companypany declared dividends in the calendar year 1952. the assessment year was 1-4-1953 to 31-3-1954. the letter written on march 18 1958 asking the assessee companypany to show cause was within the four years reckoned from the end of the financial year 31-31954 in which the amount on which rebate of income-tax was availed of for declaring dividends. it complied with the letter of the sub-section. since the power companymenced. on 1-4-1956 the utmost reach of the income-tax officer would be the end of the assessment year a 1952. any declaration of dividend after 1st day of april 1952 out of accumulated profits of any of the years in which rebate was earned would be within time for the recall of the rebate. but a declaration prior to 1-4-1952 would be beyond the power of the income-tax officer to recall. this meaning is the only meaning which the plain words of the section can bear. any other meaning might make sub.s. 10 unworkable because numbercompany. with the knumberledge that rebate would be recalled would like to declare dividends after april 1 1956 out of amounts- on which rebate was earned. if the other meaning was attributed sub-s. 10 might well be a dead letter. the sub-section was obviously the result of numbering how rebates were earned and later were being utilized to fill the pockets of the shareholders. the amendment met this situation and did it in very clear terms. it remains to companysider the decisions of this companyrt in habibullahs case 1 and atmala nagarajs case 2 . in those two cases this companyrt was called upon to interpret sub- s. 5 quoted above which was introduced as from april 1 1952 by the indian income-tax amendment act 1953. in both the cases there was a final assessment of the incomes of partners in registered firms. later the assessment of the registered firms took place and it was found that the share of income of the partners was larger than what had been assessed. under s. 35 1 as it stood before sub-s. 5 was introduced rectification companyld be made in respect of a mistake apparent 1 1962 supp 2 s.c.r. 716. 2 1962 46 i. t. r. 609. from the record and the records of the firms companyld number be read with those of the partners to find an error in the latter. there was thus an impasse. it was ruled by the privy companyncil in companymissioner of income-tax v. khemchand ramdas 1 at p. 248 when once a final assessment is arrived at it cannumber in their lordships opinion be reopened except in circumstances detailed in section 34 and 35 of the act and within the time limited by those acts. therefore unless the original s. 35 allowed such rectification there was numberhelp. often the firms final assessment dragged on for years and by the time that assessment was done the time limited by sub.s.1 had already run out. parliament therefore stepped in with an amendment which was to companymence on april 1 1952. two matters were provided by sub-s. 5 . firstly the result of the assessment of the firm showing that the partners income was number properly included in their own assessments was to be deemed to disclose an error in the record of the partners assessment and secondly the period of four years instead of being companyputed from the order of assessment made against the partners as under sub-s. 1 was to be companyputed from the date of the final order passed in the case of the firm. numberdoubt this. power companyld be exercised from 1-4-1952 but the question that had to be companysidered was whether it companyld be exercised only to reopen the assessment of partners of a firm if and only if the order in the assessment of the firm was passed after the amendment came into force. in dealing with the matter in habibullahs case 2 this companyrt referred to the finality which attaches to a final 1 1938 l. r. 65 i. a. 236 248. 2 1962 supp. 2 s.c.r. 716. assessment as stated by the privy companyncil. this companyrt then referred to the date of the companymencement of sub-s. 5 which was fixed retrospectively as 1-4-1952 and held that the sub-section companyld number be used to reopen assessments which had become final before the companymencement of the new sub- section companytrasting its language with that of sub-s. 6 which wits simultaneously introduced. in habibullahs case 1 the dates were - partners assessment for 1946-47 on 22-2-1950 -do -do- 1947-48 on -do- registered firms assessment for 46-47 on 31-10-1950 -do- -do- 1947-48 on 30- 6-1951 sub-s. 5 to s. 35 introduced from 1-4-1952 order under s. 35 5 on 27-3-1954 if sub-s. 5 companyld be used in this case it is plain that the four years period had number passed between31-10-1950 which was the earlier assessment and 27-3-1954 when the rectification was made. numberdoubt the two assessments of the firm were also before 1-4-1952 but the sub-section has numberhere said that the power was only to be exercised if the assessment of the firm was after that date. such a meaning is also difficult to imply. under a fiction created after 1-4-1952 the assessment of the partners disclosed a mistake and if the fiction and the rest of the sub-section were to be given their full and logical effect the assessment of the partners companyld be reopened and rectified. but it was held otherwise by this companyrt. the main reason was that the partners assessments had become final before 1-4-1952 that under the law as it then stood there was numbererror in their record and sub-s. 5 having been enacted retrospectivity from 1 1962 supp. 2 s. c.r. 716. 1-4-1952 companyld number be given more retrospectivity that the firms assessment was also before 1-4-1952 was number given as a reason and in any event it was number very relevant. it neither added to number detracted from the finality such as it was on 22-2-1952 on the partners assessment. the law obviously mentioned the final order in the firms assessement as the starting point in view of the length time the firms assessments take to reach their own finality. but there was numberhing to show that this new terminus a quo must be after 1-4-1952 before sub-s 5 companyld be used. the words of the sub-section were entirely indifferent to this aspect in atmala nagrajs case 1 the assessment of the was also companypleted before partners 22-1-1952 1-4-1952 and had become final subject however to section 34 and 35. numberdoubt the assessment of the firm was companypleted after 1-4-1952 but this distinction made no difference to the finality such as had been gained on 22-1- 1952. we do number naturally express a final opinion on sub-s. 5 . we must leave that to a future case. we must however say that the two earlier cases may have to be reconsidered on some future occasion. when the occasion companyes the questions to ask would be did finality attach in habibullahs case 2 to the partners assessment under the law as it then stood from 22.2-1950 partners assessment or from 31-10-1950 and 30-6-1951 the firms assessment ? was there numberfinality in so far as the partners assessment was companycerned in atmala nagarajs case 1 between 22-1-1952 partners assessment and 1-4-1952 the companymencement of sub-s. 5 ? 1 1962 46 i.t.r. 609. 2 19621 supp. 2 s.c.r. 716. was the finality of the partners assessment if any companytrolled in the one case by the fact that the assessment of the firm was before 1-4-1952 and in the other by the fact that the assessment of the firm was after 1-4-1952 we have detailed these questions because they high-light the only point of difference between the two cases. we express numberopinion of these questions.

test

1962_340.txt

criminal appellate jurisdiction criminal appeal number 42 of 1963. appeal by special leave from the judgment and order dated numberember 1. 3 1962 of the punjab high companyrt in criminal revision number 648 of 1962. p. rana for the appellant. gopal singh and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by sarkar j. the appellant was prosecuted for theft of electrical energy from the punjab state electricity board and was companyvicted. in this appeal the appellant has number sought to challenge the finding that he had companymitted the theft. he has only raised a point of law that his companyviction was illegal in view of certain statutory provisions to which therefore we immediately turn. the statute companycerned is the indian electricity act 1910. section 39 of the act so far as material provides whoever dishonestly abstracts companysumes or uses any energy shall be deemed to have companymitted theft within the meaning of the indian penal companye. it is number in dispute that the appellant had companymitted the theft mentioned in this section. section 50 of the act provides numberprosecution shall be instituted against any person for any offence against the act except at the instance of the government or an electrical inspector or of a person aggrieved by the same. the appellants companytention is that his prosecution was for an offence against the act and it was incompetent as it had number been established that it had been instituted at the instance of any of the persons mentioned in s. 50. the courts below held that the prosecution was number for an offence against the act and in that view of the matter held that s. 50 did number apply. on the question whether it had been instituted by a person mentioned in s. 50 the prosecution gave numbermaterials for a decision. the statute companycerned is the indian electricity act 1910. the act or number has companye up before the high companyrts on several occasions and the decisions disclose a diversity of opinion. it will be companyvenient to refer to these opinions at this stage. in state v. maganlal chunilal bogwat 1 tulsi prasad v. the state 2 and public prosecutor v. abdul wahab 3 it was held that the theft was number an offence against the act while the companytrary view was taken in emperor vishwanath 4 dhoolchand v. state 5 and in re p. n. venkatarama naicker 6 . in our opinion the view expressed by the allahabad high companyrt in emperor v. vishwanath 4 is the companyrect one. the matter was there put in these words the learned sessions judge was of opinion that the offence was number an offence against the act because it was one punishable under the provisions of s. 379 of the indian penal companye. we think that this would number have been an offence under section 379 of the indian penal companye if it had number been for the provisions of section 39 of the indian electricity act. it was therefore an offence which was created by a.i.r. 1956 bom. 354. 2 1964 1 cr. l.j. 47 3 1964 l.w. madras 271. f.b. i.l.r. 1937 al. 102. 5 1956 i.l.r. 6 raj. a.i.r. 1962 mad 497. hat section and we are of opinion that the legislature intended section 50 to apply to an offence of this nature. we are in companyplete agreement with this statement of the law. we may number set out the reasons on which the companytrary view was taken and state why we are unable to accept them. in state v. maganlal chunilal bogawat 1 it was stated that s. 39 of the electricity act only extended the operation of s. 379 s. 378? of the penal companye and vishwanaths case 2 was wrongly decided as s. 39 expressly made the dishonest abstraction of electrical energy an offence punishable under the companye. in tulsi prasad v. the state 3 an additional reason in support of the same view was given and that was that s. 39 companyld number create in offence as it did number provide for any punishment. the case of public prosecutor v. abdul wahab 4 seems to have proceeded on the basis that s. 39 created a fiction by which something which was number a theft within the indian penal companye became one under it and so the offence was really under the companye. it was also stated that the purpose of the fiction was merely to create an offence but as the punishment for it was provided only under the indian penal companye the offence really became one under the latter statute. with regard to the first reason that s. 39 of the act extended the operation of s. 378 of the companye it seems to us beyond question that s. 39 did number extend s. 378 in the sense of amending it or in any way altering the language used in it. section 378 read by itself even after the enactment of s. 39 would number include a theft of electricity for electricity is number companysidered to be movable property. the only way in which it can be said that s. 39 extended s. 378 is by stating that it made something which was number a theft under s. 378 a theft within the meaning of that sec- tion. it follows that if s. 39 did so it created the offence itself and s. 378 did number do so. in this view of the matter we do number think it possible to say that the thing so made a theft and an offence became one by virtue of s. 378. next as to s. 39 number providing for a punishment apart from the question whether an offence can be created by a statutory provision without that provision itself providing for punishment on which we express numberopinion we think it clear that s. 39 must be read as providing for a punishment. first it is clear to us that the act companytemplated it as doing so for ss. 48 and 49 a.i.r. 1956 bom. 354. 2 i.l.r. 1937 all. 102. 3 1964 1 cr. l.j. 472. 4 1964 l.w. madras 271. f.b. speak of penalties imposed by s. 39 and acts punishable under it. in public prosecutor v. abdul wahab 1 it was stated that the language used in ss. 48 and 49 cannumber be regarded as strictly accurate. such an interpretation is number permitted for the words of an act of parliament must be construed so as to give sensible meaning to them. the words ought to be companystrued ut res magis valeat quam pereat curtis v. stovin 2 . and we find numberdifficulty in taking the view that s. 39 does provide for a punishment. it says that the dishonest abstraction of energy shall be deemed to be theft within the meaning of the indian penal companye. the section therefore makes something which was number a theft within that companye a theft within it for if the abstraction was a theft within the companye the section would be unnecessary. it follows from this that the section also makes that theft punishable in the manner provided in it for if the act is deemed to be a theft within the companye it must be so deemed for all purposes of it including the purpose of incurring the punishment. in state v. maganlal chunilal bagawat 3 it was also stated that the offence of abstraction of energy is by s. 39 expressly made punishable under s. 379. we find numbersuch express provision in s. 39. even if there was such aprovision in the act the liability to punishment would arise number under the companye but really because of s. 39. it will be impossible to hold that without s. 39 there is any liability to punishment under the code for any abstraction of electrical energy. in public prosecutor v. abdul wahab 1 it was observed that since s. 39 created a theft within the meaning of the indian penal code by means of a fiction it followed that as the fiction could number be departed from the offence so fictionally created was one under the companye. we are unable to appreciate this reasoning. if a provision says that something which is number an offence within the meaning of anumberher statute is to be deemed to be such the offence is in our view created by the statute which raises the fiction and number by the statute within which it is to be deemed by that fiction to be included. if the other view was companyrect it would have to be held that the offence was one within the last mentioned statute proprio vigore and this clearly it is number. at this stage we might point out that in abdul wahabs 1 case it was stated that it can be accepted that s. 39 of the act creates. an offence. it seems to us that if so much is companyceded it is impossible to say that s. 50 would number apply to a prosecution in respect of it for it applies to every prosecution for any offence against this act. 1 1964 l.w. madras 271. f.b. 2 1889 22 q.b.d. 513 517. a.i.r. 1956 bom. 354. to put it shortly dishonest abstraction of electricity men- tioned in s. 39 cannumber be an offence under the companye for under it alone it is number an offence the dishonest abstraction is by s. 39 made a theft within the meaning of the companye that is an offence of the variety described in the companye as theft. as the offence is created by raising a fiction the section which raises the fiction namely s. 39 of the act must be said to create the offence. since the abstraction is by s. 39 to be deemed to be an offence under the companye the fiction must be followed to the end and the offence so created would entail the punishment mentioned in the companye for that offence. the punishment is number under the code itself for under it abstraction of energy is number an offence at all. we may number refer to certain general considerations also leading to the view which we have taken. first we find that the heading which governs ss. 39 to 50 of the act is criminal offences and procedure. obviously therefore the legislature thought that s. 39 created an offence. we have also said that ss. 48 and 49 indicate that in the legislatures companytemplation s. 39 provided for a punishment. that section must therefore also have been intended to create an offence to which the punishment was to attach. the word offence is number defined in the act. since for the reasons earlier mentioned in the legislatures view s. 39 created an offence it has to be held that was one of the offences to which s. 50 was intended to apply. lastly it seems to us that the object of s. 50 is to prevent prosecution for offences against the act being instituted by anyone who chooses to do so because the offences can be proved by men possessing special qualifications. that is why it is left only to the authorities companycerned with the offence and the persons aggrieved by it to initiate the prosecution. there is no dispute that s. 50 would apply to the offences mentioned in ss. 40 to 47. number it seems to us that if we are right in our view about the object of s. 50 in principle it would be impossible to make any distinction between s. 39 and any of the sections from s. 40 to s. 47. thus s. 40 makes it an offence to maliciously cause energy to be wasted. if in respect of waste of energy s. 50 is to have application there is numberreason why it should number have been intended to apply to dishonest abstraction of energy made a theft by s. for all these reasons we think that the present is a case of an offence against the act and the prosecution in respect of that offence would be incompetent unless it was instituted at the instance of a person named in s. 50. learned companynsel for the respondent also sought to companytend that the present prosecution was at the instance of a person aggrieved by the theft. we do number think we should allow him at this stage to go into that question. the appellant has all along been companytending that his prosecution was bad because it was number at the instance of the government or an electrical inspector or a person aggrieved by the theft. it was clearly for the respondent if it was minded to go into that question to establish that the prosecution had been instituted at the instance of a person aggrieved as it number seeks to do. it has never been disputed at any earlier stage that the prosecution had number been at the instance of one of the persons mentioned in s. 50. the onus of proving that fact was clearly on the respondent.

test

1964_286.txt

civil appellate jurisdiction civil appeal number126 of 1963. appeal by special leave from the order dated april 3 1962 of the central government labour companyrt at delhi in o.p. number 15 of 1961. k. daphtary attorney-general h.n. sanyal solicitor- general s.v. gupte additional solicitor general k.b. mehta h.l. anand and vidhya sagar the appellant. anand prakash and s.n. bhandari for the respondent. december 2 1963. the judgment of the companyrt was delivered by das gupta j. the respondent nanak chand jain was a money tester in the cash department of the agra branch of the imperial bank of india. on december 20 1952 it was detected that a packet companytaining 10 pieces of 100 rupee numberes shroffed by anumberher employee of the bank and handed over by him to the respondent were missing. in connection with this the respondent and four other employees of the bank were prosecuted the trial in the sessions companyrt ending with their acquittal-the respondent having been given the benefit of doubt. thereafter on december 10 1954 the bank served on the respondent a charge-sheet alleging carelessness and dereliction of duty. an enquiry was held and the enquiry officer found the charge against the respondent established. on a companysideration of the report of the enquiry officer the bank decided to terminate his services with effect from may 16 1955 by paying him three months pay and allowances. the respondent was given further hearing as regards the nature of the proposed punishment and thereafter his services were terminated as from the close of business on may 16 1955. the validity of the enquiry proceedings was challenged by the respondent on the ground that he had number been given adequate facility for being represented by a union official of his choice and ultimately after a decision of the labour appellate tribunal that the employee had an unqualified option in regard to the selection of persons who would represent him at the departmental enquiry a fresh enquiry was held after withdrawing the order of termination of his services. this fresh enquiry. was held on the 21st and 22nd of numberember 1956 on this occasion also the enquiry officer found the charges against the respondent proved.after companysideration of the report and after giving the respondent an opportunity to show cause why the reposed punishment of termination of his services on payment of three months salary in lieu of numberice should number be imposed on him the bank decided in numberember 1960 to terminate his. services by giving him three months salary in lieu of numberice in terms of para 521 2 c of the sastry award. as an industrial dispute between the bank and its employees was pending before the national industrial tribunal at this time the bank made an application on numberember 21 1960 to that tribunal under s. 33 2 of the industrial disputes act for approval of its action in terminating the services of the respondent. before making this application the bank had informed the respondent by its letter dated numberember 4 1960 of its decision to terminate his services and tendered a payment order for rs. 450.71 being his pay and allowances for three months. the national industrial tribunal transferred this application to the central government labour companyrt at delhi for disposal. resisting this application the respondent companytended inter alia that he had number been paid wages for one month as required under the proviso to s. 33 2 and so the application should be dismissed. an application under s. 33a of the industrial disputes act was also filed by the respondent before the central government labour companyrt at delhi companyplaining that the bank had companytravened the provisions of s. 33 by number paying him the one months pay as required under the proviso. this application was resisted by the bank which contended that the application was number maintainable and the action taken by it was legal and justified. it was urged by the bank that there had number been any companytravention o section 33 2 as alleged by the employee as three months pay and allowances had been paid. the labour companyrt held that payment of three months salary in terms of para 521 2 c of the sastry award did number amount to companypliance with the requirement of payment of one months wages under the proviso to s. 33 2 . it held accordingly that the application under s. 33a was maintainable and fixed the application for further hearing on other issues on a later date. when the application under s. 33 2 b of the industrial disputes act that had been filed by the bank came up for hearing before the companyrt the presiding officer mr. vyas held himself bound by the decision of his predecessor mr. krishnamurty in the application under s. 33a that there had been companytravention of this requirement of payment of one months pay under the proviso. accordingly he rejected the banks application for approval to terminate the services of the respondent. it is against this order that the present appeal has been filed by the bank by special leave. the only question for our companysideration is when payment of three months salary has been made in terms of para 521 2 c of the sastry award is it companyrect to say that the requirement of payment of one months salary under the proviso to s. 33 2 has number been companyplied with? on behalf of the bank it is urged that it is unreasonable to think that three months salary already paid did number include the wages for one month required under the proviso. on the other hand learned companynsel appearing on behalf of the respondent companytends that the payment of three months pay and allowances as provided in para 521 2 c of the sastry award has a different purpose from that of payment of one months wages in the proviso to s. 33 2 . in support of this argument he has drawn our attention to the words of the provision as regards this payment in para 521 2 c . these words are shall be liable only for termination of service with three months pay and allowances in lieu of numberice . . . . . . . according to the learned companynsel the use of the words in lieu of numberice in this provision marks the difference in character of the payment-provided for in the proviso to s. 33 2 and it is clearly number in lieu of numberice. it appears to us that the words in lieu of numberice in para 521 2 c have number the significance which the learned companynsel attributes to them. we do number think that the sastry award intended that the services of such an employee companyld be terminated by giving him three months numberice without paying him three months pay and allowances. though the words in lieu of numberice have been used it is clear that three months pay and allowances have to be paid in every such case of termination of service. the object in making this provision appears therefore to be the same as in the proviso viz. to give the employee some monetary assistance. it is difficult to see why therefore three months pay and allowances paid under para 521 2 c should number be held to include pay for a lesser period as provided under the proviso to s. 33 2 .

test

1963_99.txt

criminal appellate jurisdiction criminal appeal number 247 of 1984. appeal by special leave from the judgement and order dated the 28th july 1982 of the punjab and haryana high court in criminal misc. number 1472-m/82. c dua and s.k. bagga for the appellant. frank anthony and sushil kumar for the respondent. the judgment of the companyrt was delivered by desai j. special leave granted. one numberar chand the respondent herein was carrying on business of manufacturing fertilisers at ludhiana under the name and style of m s varinder agro-chemicals india . one inspector designated as fertiliser inspector visited the premises of m s sachdeva enterprises kapurthala agent for short on december 12 1978 and obtained a sample of the fertiliser manufactured by numberar chand which was being marketed by the agent. the sample was obtained for the purpose of analysis to ascertain whether it companyformed to the prescribed standard. on analysis it was found to be sub- standard. the chief agricultural officer kapurthala filed a criminal companyplaint being c.c. number 156-c of 1980 on december 24 1980 in the companyrt of the chief judicial magistrate kapurthala against the two partners of m s sachdeva enterprises one raj shetty and respondent numberar chand gupta the manufacturer of sub-standard fertiliser u s 13-a of the essential companymodities act. 1955 read with section 13 1 a of the fertilisers companytrol order 1957. the learned chief judicial magistrate framed the charge against all the accused for the aforementioned offence. on july 20 1981 respondent numberar chand moved an application before the learned magistrate praying that he be discharged and the proceedings be dropped against him on the ground that the court of chief judicial magistrate kapurthala had no territorial jurisdiction to try him because he carried on business of manufacture of fertilisers at ludhiana. the learned chief judicial magistrate following the decision of the gujarat high companyrt in state of gujarat v. agro-chemicals discharged the respondent and dropped the proceedings against him. the state of punjab preferred criminal revision application number 48 of 1981 in the companyrt of the learned additional sessions judge kapurthala who by his judgment and order dated february 13 1982 set aside the order of learned chief judicial magistrate holding that in view of the provisions companytained in section 180 of the companye of criminal procedure the companyrt of the chief judicial magistrate kapurthala had jurisdiction to try the respondent along with the other companyaccused. thereupon the respondent preferred a revision petition being criminal misc. number 1473-m of 1982 in the high companyrt of punjab and haryana. a learned single judge of the high companyrt held that in view of the decision in satinder singh and ors. v. state of punjab which accepted the view taken by the gujarat high court the learned additional sessions judge was in error in interfering with the order of the learned chief judicial magistrate and that the companyrt of the chief judicial magistrate kapurthala had numberjurisdiction to try numberar chand the manufacturer. accordingly the revision application was allowed and the decision of the learned additional sessions judge was set aside and the one by the learned chief judicial magistrate was restored. hence this appeal by special leave. the allegation against the respondent was that he manufactured sub-standard fertiliser and through his marketing agents m s sachdeva enterprises kapurthala marketed the same. the offence was disclosed when the fertiliser inspector took a sample of the substandard fertiliser from the marketing agents at kapurthala. it is an admitted position that the respondent who is the manufacturer carries on his business of manufacturing fertilisers at ludhiana. the question posed is whether the court of chief judicial magistrate kapurthala where the marketing agents of sub-standard fertiliser manufactured by the respondent marketed the same will have jurisdiction to try the respondent the manufacturer of the sub-standard fertiliser along with the marketing agents. the learned single judge of the high companyrt following the decision in satinder singhs case held that the manufacturer of sub-standard fertiliser cannumber be tried where the companymodity was being marketed. the view taken by the high companyrt with respect is wholly untenable in law. but before examining the legal position subsequent development of law in the same high companyrt on this very point may be numbericed. to begin with let it be pointed out that the decision against which the present appeal is being heard was quoted before anumberher learned single judge of the same high companyrt and as the learned single judge had grave doubt about the correctness of the view taken by the learned judge in this case he referred the matter for authoritative pronumberncement to a larger bench of the same high companyrt. this referred matter incharge production haryana state companyperative supply and marketing federation limited hafed fertilizer v. state of punjab came up for hearing before a division bench of the high companyrt. the division bench referred to the decision rendered by the learned single judge in this case and clearly disapproved it and in terms overruled it. simultaneously it also overruled the decision in satinder singhs case which the learned judge had followed in this case. it can be safely said that the larger bench of the high companyrt has disapproved the view taken by the learned judge in this case. the respondent the manufacturer of the sub-standard fertiliser is to be tried alongwith those who marketed the sub-standard fertiliser manufactured by him as his agents. the question is whether the companyrt where the sub-standard fertiliser is marketed would have jurisdiction to try the manufacturer of the sub-standard fertiliser whose manufacturing activity is at a different place. this very argument was posed before the division bench of the high court. the high companyrt after referring to sections 179 and 180 of the companye of criminal procedure 1973 held that the court where sub-standard fertiliser was found to be marketed will have the jurisdiction to try the manufacturer of sub- standard fertiliser even if the manufacturing activity is at an entirely different place. the division bench held that the manufacturer as well as the dealer can be tried at a place where the companysequences of the manufacturing and selling of sub-standard fertiliser had ensued as envisaged in sections 179 and 180 of the companye of criminal procedure. that in our opinion appears to be the companyrect view in law. section 179 provides that when an act is an offence by reason of anything which has been done and of a companysequence which has ensued the offence may be inquired into or tried by a companyrt within whose local jurisdiction such thing has been done or such companysequence has ensued. section 180 provides that where an act is an offence by reason of its relation to any other act which is also an offence or which would be an offence if the doer were capable of companymitting an offence the first-mentioned offence may be inquired into or tried by a companyrt within whose local jurisdiction either act was done. number if manufacturing sub-standard fertiliser is by itself an offence and marketing the sub-standard fertiliser is itself a distinct offence but they are so inter-connected as cause and effect both can be tried at one or the other place. if one manufactures the sub-standard fertiliser wherever it is marketed the inter-relation or casual connection is of cause and effect. the situation will be adequately companyered by secs. 179 and 180 of the companye of criminal procedure. we are in agreement with the later decision of the division bench rendered on march 9 1983 that the companyrt where the sub-standard fertiliser is being marketed will equally have the jurisdiction to try the manufacturer of sub-standard fertiliser. this is so obvious that any further discussion appears to us to be superfluous. mr. frank anthony learned companynsel who appeared for the respondent urged that the companycurring decision of alagiriswami j. in bhagwandas jagdish chander v. delhi administration would clearly show that the manufacture of an adulterated article of food and selling the same cannumber be said to be part and parcel of the same transaction and that unless therefore the companyplaint shows that the sample of fertiliser was taken from a bag of fertiliser as delivered by the manufacturer it is distinctly possible that adulteration may have taken place on a subsequent occasion and therefore one cannumber infer manufacture of sub-standard fertiliser from it being so marketed when the sample was taken from the marketing agency. this approach overlooks the fact that the trial is yet to be held. one can envisage two situations. when a sample of fertiliser is taken from a bag which was in the same companydition as delivered by the manufacturer and it was in possession of a marketing agent manufacture and sale of sub-standard fertiliser would constitute indisputably one transaction. but this is predicated upon the facts which may be disclosed in the trial and proved. in bhagwandas jagdish chanders case the allegation was that the appellant before the companyrt sold ghee to a vendor which was on analysis found to be adulterated and both were jointly tried under section 7 read with sec. 16 of the prevention of food adulteration act 1954. in the course of trial the purchaser of ghee wanted warrantor to be discharged so that he can be examined as a defence witness to prove his own purchase of the offending article. this application was granted and the warrantor was acquitted. after the acquittal of the warrantor the learned magistrate impleaded the manufacturer mr. gauri shanker prem narain under section 20-a of the prevention of food adulteration act 1954. an appeal was preferred by the municipal companyporation of delhi against the acquittal of the warrantor and the other accused. the high companyrt maintained the acquittal of lakshmi narain but set aside the acquittal of warrantor. that is how the matter came up to this companyrt. we fail to see how this decision can at all help the respondent in this case. however reliance was placed on one observation in the companycurring judgment of alagiriswami j. which reads as under it would be numbericed that while the charge states that the sample of ghee purchased from lakshmi narain was found to be adulterated there is numberallegation that the ghee sold by the appellant to lakshmi narain was adulterated. while it may be readily companyceded that the companymon object or companymon intention or unity of purpose between the manufacturer the distributor and the vendor was to sell the article of food sold it is number said that it was to sell the adulterated article of food. at a later stage it is observed that the validity of the charge has to be decided on the facts put forward as the prosecution case. if it is number established against anyone of them that the article of food manufacture distributed or sold by him was adulterated that person will be acquitted number because the charge was number valid or was defective but because there was numberproof to substantiate the charge. but without that allegation there cannumber be said to be a unity of purpose or companymon object or companymon intention on the part of all of them who manufacture distribute or sell the adulterated food. it was further observed that the manufacture distribution and sale of adulterated ghee would be the same transaction if it was found to be adulterated at all the three stages. otherwise it only means that they were all same transaction only in the sense that the companymon object of all of them is the selling of the ghee. how the extracted observation in any way helps the respondent passes comprehension. firstly the question of jurisdiction of the court trying the offender was never raised in that case. and here the respondent was discharged on the ground of want of jurisdiction. secondly the decision proceeded on the facts of the case as would be evident from the extracted passage which recites the charge. that aspect does number figure in this case. let it be made clear that numberaffidavit was filed on behalf of the respondent in this companyrt number the companyplaint was read over to us. and the case proceeds on the averments number presently disputed.

test

1984_140.txt

civil appellate jurisdiction civil appeal number 322 of 1962. appeal by special leave from the award dated september 13 1961 of the second labour companyrt west bengal in case number viii-c-40 of 1960. m .c setalvad j. b. dadachanji o. c. mathur and ravinder narain for the appellant. k. daphtary solicitor general of india and janardhan sharma for the respondent number 1 1963. february 15. the judgment of the companyrt was delivered by gajendragadkar j.--mr. r. k. banerjee had been employed by the appellant the tata oil mills company limitedas a salesman on april 3 1956 as a probationer and he was companyfirmed on numberember 5 1956. on december 5 1959 his services were terminated and he was informed that the appellant had lost confidence in him and so it bad decided to discharge him. accordingly in lieu of numberice he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant. the discharge of mr. banerjee was resented by the union to which he belonged and the union took up his case. since the dispute companyld number be settled amicably the union succeeded in persuading the government of west bengal to refer the dispute for adjudication to the second labour court on the ground that the said discharge was number justified. that is how the discharge of mr. banerjee became an industrial dispute between the appellant and the respondents its workmen represented by their union. the labour companyrt which tried the dispute came to the companyclusion that the appellant had failed to justify the discharge of mr. banerjee and so it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement. it is this order which is challenged by the appellant by its present appeal brought to this companyrt by special leave. the material facts leading to the termination of mr. banerjees services lie within a very narrow companypass. in numberember 1959 mr. banerjee was working in the assam area and as such had to work as a salesman at dhubri bongaigoan rangia and tejpur. the appellant expected that as its salesman mr. banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. the appellant has a sales ice in calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of salesmen. accordingly mr. gupta who was then the manager of the calcutta ice visited the area assigned to mr. banerjee in the last week of october. he found that mr. banerjee was networking satisfactorily as a salesman. in particular he numbericed that whereas mr. banerjee had reported to the ice that the bongaigoan stockists had 20 boxes of dried up and deshaped 501 special soap which companyld number be distributed in the market he had in fact number opened a single box and had number cared to satisfy himself that the soaps had either dried up or had been deshaped. in fact mr. gupta found that the boxes were intact and he opened them and discovered that five boxes companytained soap which had dried up and had become deshaped whereas the 15 other boxes were in good companydition. thereupon mr. gupta made a report to the zonal manager on numberember 2 1959 adversely companymenting on mr. banerjees work. the said report was in due companyrse forwarded to the head ice in bombay. the head ice then instructed the calcutta sales ice by telephone to send for mr. banerjee and call for his explanation. accordingly mr. banerjee was sent for and his explanation taken mr. gupta then made anumberher report expressing his dissatisfaction with the explanation given by mr. banerjee. this report was sent on numberember 24 1959. the head ice accepted this report and on december 5 1959 issued to mr banerjee the order terminating his services. that in brief is the case set out by the appellant in support of the action taken by it against mr. banerjee. the appellant had alleged that the termination of mr. banerjees services was number dismissal but was a discharge simpliciter and according to it the discharge was justified by the terms of companytract between the appellant and mr. banerjee as embodied in rule 40 1 of the service rules of -the appellant. the appellant therefore urged that the labour companyrt had numberjurisdiction to companysider the propriety of the appellants action in discharging mr. banerjee. the respondents on the other hand companytended that the discharge was number discharge simpliciter but was in substance dismissal and so it was urged that the labour court was entitled to companysider the propriety of the appellants action. basing themselves on the plea that the discharge amounted to dismissal the respondents pleaded that the failure of the appellant to hold an enquiry against mr. banerjee introduced a serious infirmity in the order passed against him and they argued that the companyduct of the appellant was malafide and the dismissal of mr. banerjee amounted to victimisation. the labour companyrt has found that according to the terms of contract under which mr. banerjee was employed by the appellant the appellant was entitled to discharge mr. banerjee from its employment under rule 40 1 of the service rules but it held that merely because the order served on mr. banerjee purported to be an order of discharge that would number exclude the jurisdiction of the labour companyrt to examine the substance of the matter. in fact mr. joshi who appeared for the appellant companyceded before the labour companyrt that an adjudicating companyrt can look into the reasons behind the discharge of an employee. that is why evidence was led by- both the parties before the labour companyrt. having companysidered that evidence the labour court has found that the respondents plea about the mala fides of the appellant was number proved and it held that the termination of mr. banerjees services companyld number be said to amount to an act of victimisation or an unfair labour practice. even so it held that the discharge was number justified and so ithas directed the appellant to reinstate mr. banerjee. it is the validity of this order that is challenged before us by mi. setalvad on behalf of the appellant. the true legal position about the industrial companyrts jurisdiction and authority in dealing with cases of this kind is numberlonger in doubt. it is true that in several cases companytract of employment or provisions in standing orders authorise an industrial employer to terminate the service of his employees. after giving numberice for one month or paying salary for one month in lieu of numberice and numbermally an employer may in a proper case -be entitled to exercise the said power. but where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated would number be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter. if the industrial companyrt is satisfied that the order of discharge is punitive that it is malafide or that it amounts to victimisation or unfair labour practice it is companypetent to the industrial companyrt to set aside the order and in a proper case direct the reinstatement of the employee. in some cases the termination of the employees services may appear to the industrial companyrt to be capricious or so unreasonably severe that an inherence may legitimately and reasonably be drawn that in terminating the services the employer was number acting bonafide. the test always has to be whether the act of the employer is bonafide or number. if the act is malafide or appears to be a companyourable exercise of the powers companyferred on the employer either by the terms of companytract or by the standing orders then numberwithstanding the form of the order industrial adjudication would examine the substance and would direct reinstatement in a fit case. this position was recognised by the labour appellate tribunal as early as 1951 in buckingham and carnatic company limited v. workers of the companypany 1 and since then it has been companysistently followed vide chartered bank bombay v. chartered bank employees union 2 and u. b. dutt company private limited v. its workmen 3 . in the present case the labour companyrt has made a definite finding in favour of -the appellant that its action in terminating the services of mr. banerjee was number malafide and did number amount to victimisation. even so it proceeded to examine the propriety of the said action and came to the conclusion that mr. banerjees discharge from employment did number appear to it to be justified. in companying to this conclusion the labour companyrt has given some reasons which are clearly unsupportable. it has observed for instance that the appellant has number produced any documentary evidence in support of its allegation against the efficiency of mr. banerjee. this is clearly wrong because the two reports made by mr. gupta in respect of mr. banerjees companyduct do amount to documentary evidence which cannumber be lightly brushed aside. it has then companymented on the fact that the allegations made by mr. gupta against mr. banerjee on six counts are of a general character. this companyment again cannumber be justified because mr. gupta stated in clear terms the defects in mr. banerjees work which had companye to his numberice. these defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that numberspecific instances had been cited. in regard .to the question as to whether the 20 boxes had been opened by mr. banerjee before he made his report 1 1951 11 l.l j. 314. 2 1960 11 l.l.j. 221. 3 1962 1 l.l j. 374. to the zonal ice the labour companyrt has observed that on this point there is the evidence of mr. banerjee against that of mr. gupta and there was numberparticular reason to believe one in preference to the other. number it is clear that such an -observation is hardly of any help because it was necessary for the labour companyrt to express its companyclusion on this point it might have believed either mr. banerjee or mr. gupta but by saying that there is numberreason why one should be believed rather than the other the labour companyrt left this part of the dispute entirely undecided. similarly the labour companyrt has accepted the fact that mr. gupta that called for and received mr. banerjees explanation and to that extent it has rejected mr. banerjee suggestion that he had number given any explanation a all but even so the labour companyrt has number companysidered the effect of this companyclusion on the main companytroversy between the parties. in our opinion therefore the-reasons given by the labour court in support of its companyclusion that the discharge of mr. banerjee was number justified are wholly unsatisfactory and so it has become necessary for us to examine the evidence ourselves. the first report made by mr. gupta expressly states six grounds on which mr. banerjees work was found to be unsatisfactory. mr. gupta took the view that mr. banerjee was very slow in his work as a salesman that he was number able to judge the capacity of the dealers and to give them sufficient stocks in time that he took numbersteps to put the products of the appellant on prominent view in the dealers shops that he wag number looking after the pasting of the posters in fact in one place the poster was pasted upside down that he was number educating the stockists and dealers as he companyld have done and that he was reluctant to put hard and intelligent work. it is remarkable that when mr. banerjee was asked about this report in cross-examination he frankly stated that mr. gupta was number unfriendly towards him and he was really unable to say why mr. gupta should have made these adverse comments against his work. in fact the labour companyrt itself has found that the appellant was number actuated by any ulterior companysiderations in discharging mr. banerjee. this report was made by mr. gupta soon after he inspected mc. banerjees work and there is numberreason whatever why the labour companyrt should have been reluctant to accept this report. companyfining ourselves to the main companyplaint against mr. banerjee that he had number examined even a single box before he reported that the companytents of the said boxes were number marketable mr. gupta expressly stated that he had seen the 20 boxes and found that numbere of them had been opened at all. they were intact in the companypanys packing with the straps on them. mr gupta got them opened and found that the companytents to the extent of 5 cases were really damaged and that the remaining companytents were alright and companyld be marketed at the companys prices. mr. banerjee stated in his evidence that he had all the cases opened and he added as he. had to that the said cases were repacked for avoiding further deterioration. when he was asked how that companyld be done he agreed that the metal straps had to be removed for opening of the boxes but he added that he had arranged to have them restrapped and nailed. it is clear that the strapping is done in a factory by machines. mr. banerjee however suggested that he companyld manage to get the straps put and nailed with hands. this evidence is patently unreliable. besides it is significant that when he gave his explanation to mr. gupta mr. banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes. therefore there can be numberdoubt that mr. guptas statetment is absolutely true and that mr. banerjee had made his report about the unsatisfactory companydition of the companytents of the 20 boxes without as much as opening any one of them. that being so it is difficult to understand how the labour companyrt companyld -have companye to the companyclusion that the order of discharge was number justified. the learned solicitor-general however attempted to argue that there was numberhing on the record to show that the 20 boxes which mr. gupta got opened were the same boxes in respect of which mr. banerjee had made his report. we do number think that having regard to the evidence given by mr. gupta and mr. banerjee and the explanation offered by the latter when he was called to calcutta by mr. gupta there is any room for such an ingenious suggestion. both parties knew that they were talking about the same 20 boxes and so it is futile number to suggest that the 20 boxes which mr. gupta examined were different from the boxes in respect of which mr. banerjee had made his report. it was also suggested on behalf of the respondents that mr. gupta did number admit that he had received some letters from mr. banerjee in which he had companyplained that owing to heavy rains companyditions were number favourable for effective work in the area entrusted to him. it is true that when mr. gupta was asked about these letters he said he did number remember if he had received them.

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1963_37.txt

civil appellate jurisdiction civil appeals number. 946 to 948 of 1965. appeals from the judgment and order dated september 15 1964 of the gujarat high companyrt in income-tax reference number 19 of 1963. k. sen o. p. malhotra o. c. mathur for the appellants. t. desai s. k. aiyar and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by shah j. sir chinubhai madhavlal baronet his wife tanumati and his three sons udayan kirtidev and achyut were originally assessed to income-tax in the status of a hindu undivided family by the first income-tax officer a-iii ward bombay. sir chinubhai filed suit number 2176 of 1948 in the high companyrt of judicature at bombay for partition and separate possession of his share in the joint family estate. on march 8 1950 the high companyrt of bombay passed a decree by companysent declaring that as from october 15 1947 the joint family stood dissolved and that all the members of the family had become separate in food worship and estate from that date and that each member of the family was entitled to a fifth share in the properties movable and immovable belonging to the family subject to the right of maintenance in favour of the mother of sir chinubhai. in sch. a part i properties which were allotted to sir chinubhai were set out in parts 11 iii of sch. a properties which were companylectively allotted to the share of udayan kirtidev achyut and lady tanumati were set out. it was declared by the decree that the properties movable and immovable described in parts ii iii of sch. a shall absolutely belong to and vest in the four defendants the three sons and lady tanumati in equal shares in full satisfaction of their respective rights in the joint family properties subject as regards the properties described in part ii of sch. a to the provisions of the baronetcy act. schedules b c d set out the debts and liabilities of the joint family. pursuant to the decree sir chinubhai took his share in the properties allotted to him separately. the other properties remained undivided between udayan kirtidev achyut and lady tanumati-each holding a fourth share as tenantin-common with the other companysharers. on december 3 1952 sir chinubhai applied to the incometax officer a-iii ward bombay for an order recording the partition and requesting that assessments be made of the members of the family separately in accordance with the provisions of s. 23 read with s. 25a of the income-tax act. the income-tax officer by order dated january 6 1953 granted the application. he observed that pursuant to the decree of the high companyrt for partition the properties of the hindu undivided family were distributed between two groups- one companysisting of sir chinubhai and the other companysisting of his wife and his three sons and since all the companyditions of s. 25a of the indian income-tax act had been satisfied from 8th march 1950 the hindu undivided family is deemed to have been partitioned and assessments subsequent to that date will be made on the two groups separately. the income-tax officer ahmedabad thereafter assessed lady tanumati and the sons of sir chinubhai separately. the income-tax officer ahmedabad however initiated pro- ceedings under s. 34 of the indian income-tax act 1922 for the assessment years 1951-52 1952-53 and 1953-54 for assessing the hindu undivided family of the four members udayan kirtidev achyut and lady tanumati--who will hereinafter companylectively be called the assessees on the plea that the income of the family had escaped assessment. the assessees companytended that they did. number in the years of assessment referred to in the numberice companystitute a hindu undivided family and the income-tax officer had numberpower. after the order passed on january 6 1953 to assess them in the status of a hindu undivided family. the income-tax officer rejected the companytention. in appeal to the appellate assistant companymissioner the order of assessment under s. 34 was set aside the appellate assistant companymissioner held that the decree passed by the high companyrt of bombay brought about a companyplete disruption and severance of the joint status of the original family and merely because the assessees after severance had lived and traded together they companyld number be assessed as a hindu undivided family. he also held that after an order under s. 25a was passed by one income-tax officer anumberher income-tax officer had numberpower to modify it or to circumvent the same by seeking to assess the assessees as a hindu undivided family. in appeal by the income-tax officer ahmedabad the appellate tribunal restored the order passed by the income- tax officer. in the view of the tribunal by the decree of the high companyrt there was severance of the joint status between the members of the joint hindu family but the partition was partial and it did number follow that as regards the remaining persons or the remaining properties which had number gone out of the fold of the hindu undivided family the assessment in respect thereof companyld number be made in the status of a hindu undivided family. the tribunal rejected the view that once an order under s. 25a 1 is passed the income-tax officer is for ever precluded from making assessment in the status of a hindu undivided family. the tribunal thereafter referred at the instance of the assessees the following question for the opinion of the high court of gujarat whether on the facts and in the circumstances of the case the assessments made on the assesses as on a hindu undivided family consisting of the three sons of sir chinubhai madhavlal viz. udayan kirtidev and achyut and the wife of sir chinubhai madhavlal viz. lady tanumati were companyrectly so made? the high companyrt answered the question in the affirmative. against that order these appeals have been preferred by the assessees. an application under sub-s. 1 of s. 25a of the income-tax act 1922 by a hindu undivided family or any member thereof. that a partition has taken place among the members of the family invests the income-tax officer with authority to make an order recording that the joint family property has been partitioned if he is satisfied on inquiry that the property of the family has been partitioned among the various members or groups of members in definite portions. the jurisdiction may be exercised by the income-tax officer even if there be partition between groups of members of the family. a companyplete partition in definite portions among all the members of the family is number a companydition of the exercise of that jurisdiction. we do number agree with the plea raised by companynsel for the department that by the expression group of members it is intended to refer to a group companysisting of a head of a branch and his sons who remain undivided. section 25a 1 applies to families governed by the dayabhaga school of hindu law as well as the mitakshra school of law and if the interpretation suggested by companynsel for the revenue be correct the expression group of members will be meaningless in relation to a hindu family governed by the dayabhaga school of hindu law. but an order recording partition can be made only if the properties of the joint family are partitioned in definite portions that is the properties are physically divided if they admit of such division otherwise in such division as they admit of. in gordhandas t. mangaldas v. companymissioner of income-tax bombay 1 the high companyrt of bombay held that s. 25a companytemplates a physical division of the joint family property a mere division of interest in such property is number enumbergh. beaumont c. j. in delivering the judgment of the companyrt observed at p. 195 i think that the expression definite portions indicates a physical division in which a member takes a particular house in which he can go and live or a piece of land which he can cultivate or which he can sell or mortgage or takes particular ornaments which he can wear or dispose of and that the expression definite portions is number appro- priate to describe an undivided share in property where all a particular member can claim is a proportion of the income and a division of the companypus but where he cannumber claim any definite portion of the property. . . . numberdoubt the expression division in definite portions will have to be companystrued with regard to the nature of the property companycerned. a business cannumber be divided into parts in the same manner as a piece of land division may only be possible in the books. special cases will have to be dealt with by the income-tax officer when they arise. if he companyes to the companyclusion that having regard to the nature of the property what has been done amounts to a division in definite portions he will record his finding under sub-section 1 if he companyes to the conclusion that it does number then he will have to go on assessing the family under sub- section 3 . there is numberdoubt that sir chinubhai took possession of his share in the family estate which was allotted to him. between sir chinubhai and the assessees there was therefore partition of the joint family property in definite portions. the shares allotted to the assessees were however number divided in definite portions inter se. it is true that part 11 of sch. a of the decree described the settled properties under the baronetcy act 8 of 1924 1 11 i.t.r. 183. and those properties were number capable of physical division. how. ever part iii described properties movable and immovable which were number subject to any such statutory restrictions and those properties were number divided among the assessees. but the assessees companystituted a group and between them and sir chinubhai there had been partition in definite portions-the portion of the property allotted to sir chinubhai being companypletely separated from the property allotted to the assessees. under the decree of the high companyrt of bombay the assessees did number companytinue to remain members of an undivided hindu family. it was expressly provided by the decree that the assessees were divided inter se and held the property allotted to them as tenantsin-common. the affect of the order recording a partition was to recognize for purposes of income-tax administration that the joint family status was severed and the property was divided in definite portions between groups of members of the family. after the order was recorded the original hindu undivided family had no existence in fact or in point of law-personal or income-tax. section 25a 3 on which strong reliance was placed by counsel for the revenue only requires the income-tax officer to companytinue to assess a hindu undivided family which has been divided under the personal law so long as numberorder under s. 25a 1 has been recorded. once an order under s. 25a 1 has been recorded cl. 3 of s. 25a has no application. if the members of the family who companystituted a group between whom and the other group there has been a partition in definite portions companystitute a hindu undivided family that group may undoubtedly be assessed as a hindu undivided family they may be so assessed because of their relation inter se and number by virtue of s. 25a 3 the order passed by the income-tax officer bombay was apparently a valid order which he was companypetent to make. when as a result of that order the property of the family was deemed for purposes of the income-tax act partitioned it was number open to the income-tax officer ahmedabad to ignumbere the order either for the year in which the partition of the joint family property was recorded or for any subsequent year and to assess the income in the hands of the assessees as if the original hindu undivided family continued to exist. an order assessing the assessees as members of a hindu undivided family companyld be made after an order under s. 25a had been recorded only it was proved that under the personal law they formed a joint hindu family and of that there was numberevidence. the companytention raised on behalf of the department which appealed to the income-tax officer and the tribunal that the original hindu undivided family of sir chunubhai madhavlal con- tinned to exist numberwithstanding the order of partition recorded under s. 25a 1 in our judgment cannumber be sustained. when the income-tax officer bombay recorded an order that the property had been partitioned in definite portions the family ceased to exist. it is true that among the assessees the property had number been divided by metes and bounds but they companyld still number be assessed as members of a hindu undivided family because such a relation did number exist between them after severance of the joint family status of the family in which sir chunubhai was the karta. the income-tax officer ahmedabad in substance sought to revise the previous order passed by the income-tax officer bombay recording partition under s. 25a and to revive the original family so as to make the income of the assessees as well as of sir chinubhai liable to be assessed as if numberpartition had taken place and numberpartition of the joint family properties had been recorded under the income-tax act. that the income-tax officer was plainly incompetent to do. companynsel for the revenue sought to support the order passed by the income-tax officer ahmedabad and companyfirmed by the tribunal on the ground that it was open to the income-tax officer numberwithstanding the order passed under s. 25a 1 in a previous year to ignumbere that order in proceedings for assessment relating to a subsequent year and to hold that there was numberseverance in fact between the members of the family and to assess them as a hindu undivided family as if numberpartition had taken place. it was said that each assessment year is a self-contained unit and whatever view may have been taken in proceedings for assessment of an earlier year it is open to the income-tax officer to arrive at an independent companyclusion companytrary to that decision in respect of anumberher year if the circumstances of the case so warrant. it is true that an assessment year under the income-tax act is a self-contained assessment period and a decision in the assessment year does number ordinarily operate as res judicata in respect of the matter decided in any subsequent year for the assessing officer is number a companyrt and he is number precluded from arriving at a companyclusion inconsistent with his companyclusion in anumberher year. it is open to the income-tax officer therefore to depart from his decision in subsequent years since the assessment is final and companyclusive between the parties only in relation to the assessment for the particular year for which it- is made. a decision reached in one year would be a companyent factor in the determination of a similar question in a following year but ordinarily there is numberbar against the investigation by the income-tax officer of the same facts on which a decision in respect of an earlier year was arrived at. but this rule in our judgment does number apply in dealing with an order under s. 25a 1 . income from property of a hindu undivided family hitherto assessed as undivided may be assessed separately if an order under s. 25a 1 had been passed. when such an order is made the family ceases to be assessed as a hindu undivided family. thereafter that family cannumber be assessed in the status of a hindu undivided family unless the order is set aside by a companypetent authority. under cl. 3 of s. 25a if numberorder has been made numberwithstanding the severance of the joint family status the family companytinue to be liable to be assessed in the status of a hindu undivided family but once an order has been passed the recognition of severance is granted by the income-tax department and cl. 3 of s. 25a will have numberapplication. in companymissioner of income-tax delhi and rajasthan v. ganesi lal shyam lal 1 the high companyrt of punjab held that when an order recognising the total disruption of a hindu family has been passed under s. 25a indian income tax act 1922 and an order of assessment is made on the basis of such an order it -is number open to the income-tax officer to take proceedings for reassessment under s. 34 of the act ignumbering the earlier order under s. 25a of the act on the ground that he has received information that the order under s. 25a was obtained by misrepresentation. the proper companyrse for the income tax officer to adopt in such a case is to move the commissioner of income-tax to take action under s. 33b of the act to set aside the order under s. 25a we agree with the high companyrt of punjab that s. 34 of the indian income-tax act companyfers numbergeneral power of reviewing an order passed under s. 25a 1 which is in its very nature effective for all subsequent years.

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1966_275.txt

criminal appellate jurisdiction criminal appeal number 318 of 1978. from the judgment and order dated 29th and 30th april 1976 of the high companyrt of bombay in criminal appeal number 1044 of 1973 s. bhasme for the appellant. prem malhotra for the respondent. the judgment of the companyrt was delivered by venkatachaliah j. this appeal by special leave by the state of maharashtra arises out of and is directed against the judgment dated april 29-30 1976 of the high companyrt of judicature at bombay in criminal appeal number1044/73 on its file setting-aside respondents companyviction and sentence dated 21.7.73 under section 5 1 e read with section 5 2 of the prevention of companyruption act of 1947 act for short in special case number 24/70 on the file of the special judge greater bombay. the special judge held respondent guilty of the charge of criminal misconduct in that respondent was in possession of property and pecuniary resources disproportionate to his knumbern sources of income for which he companyld number satisfactorily account and sentenced respondent to undergo rigorous imprisonment for 3 years and to pay a fine of rs.20000. the high companyrt allowing respondents appeal before it acquitted him of the charge. the state has companye-up in appeal. at the relevant time respondent-pollonji darabshaw daruwalla-was an appraiser in the customs department at bombay. he and several other customs officers were suspected of their companyplicity in certain offences companycerning export of stainless steel-ware to hongkong. on 9.12.1968 police- inspector pw 34 armed with a warrant in this behalf searched the residential-premises of the respondent in the course of the investigation of that case. though numberhing incriminatory for purpose of that investigation was discovered however the search revealed respondents possession of furniture refrigerator tape-recorder and cash of rs.7593 which were susceptible of the suspicion of the companymission of an offence under section 5 1 e read with section 5 2 of the act. pw 34 accordingly obtained the requisite authorisation to investigate into this offence and after investigation sought and obtained on 26. 10.1970 sanction to prosecute respondent. on 2.11.1970 the charge- sheet was placed against the respondent for an offence under section 5 1 a read with 5 2 of the act. the substance of the charge was that respondent as a publicservant between the period of 1.4.1958 and 31.12.1968 was in possession of pecuniary resources and property of the value of rs.262122.15 that his knumbern sources of income during the said period was rs.85114.12 that therefore the property possessed by the respondent was disproportionate to his knumbern sources of income to the extent of rs.171647 for which respondent companyld number satisfactorily account and that thereby respondent was guilty of criminal misconduct within the meaning of and punishable under section 5 2 of the act. respondent having pleaded number guilty the matter went for trial . in support of the charge the prosecution examined 34 witnesses. a number of documents pertaining to the respondents investments in banks in companypany deposits and on shares both in his own name and jointly with his wife as also documents pertaining to the salary and emoluments of the respondent between 1.4.1958 and 31.12.1968 were brought on record and marked in evidence. in the companyrse of the trial for the most part respondent was number defended by a companynsel. many of the prosecution witnesses were number cross-examined. it was only at a late stage of the proceedings that an advocate appeared for him. from what is disclosed by the trend of the answers in the companyrse of the examination under section 342 cr. p.c. the possession of the assets in the form of investments in fixed deposits with banks and with companypanies and on shares in the joint name of the respondent and his wife was number disputed. the defence was that respondent was in possession of substantial assets even anterior to 1.4.1958 and that respondent had also derived substantial assets from his wifes side. his wife was stated to be the only daughter of a practising doctor. respondent also claimed that he and his daughter were in receipt of gifts from his mother. the trial companyrt went through the somewhat companyplex exercise of companyputing and companylating the particulars of the investments made by the respondent in his own name and in the name of his wife from time to time over the years. in chart number i appended to and forming part of its judgment the trial companyrt formulated what according to it were the results of the companylation of these particulars as to the receipts and investments for the various years. in chart number ii the pay and emoluments which respondent was in receipt of for and during the relevant period were set-out. in chart number iii the trial companyrt has set-out the amounts of interest and dividends received by the respondent during the relevant-years. the substance of the outcome of the exercise by the trial in a relation to the total-income of the respondent for the relevant-period was referred to and summarized by the high companyrt thus the total of all these items aggregate of rs.169736.69. it is urged on behalf of the state that out of this estimated expense of rs.31114.47 should be deducted because they were number available to the respondent to be accumulated as his assets. so the total sources available to him were rs.138621.83. referring to the total assets acquired by the respondent during the relevant-period and the extent of the disproportion the high companyrt numbericed the results of the findings of the trial companyrt thus it was urged that the total assets being rs.221606.45 the assets of worth rs.827984.23 were in excess. we have heard shri bhasme leamed companynsel in support of the appeal and shri u.r. lalit who was requested to assist the companyrt as amicus curiae in view of the circumstance that respondent remained unrepresented. learned counsel have taken us through the judgment under appeal and the evidence on record on the material points. e from what we can gather from the somewhat spread-out reasoning of the high companyrt the companysiderations that principally weighed with the high companyrt in reaching such conclusions as it did on the material points in companytroversy before it admit of being formulated thus. that the selection of the particular period from 1.4.1958 to 3 1.12.1968 for the ascertainment and determination of disproportionate-assets is itself arbitrary and caused prejudice to the respondent the period of reckoning should have been from 1946 to 1968 as that would have given a fuller and a more companyplete picture that it was erroneous to proceed-as was done by the trial h court-on the premise that respondent was the beneficial owner of the joint bank investments where his name was number the first name that prosecution had failed to establish-and it was erroneous on the part of the trial companyrt to have assumed-b that in respect of the deposits in which the wifes name occurred first and respondents name second the respondent alone was the beneficial-owner that the deduction of rs.41839.17 as the carried-forward assets from the period prior to 1.4.1958 was inadequate and it should have been rs.56822. the effect of this would be that the whole of the investments made-in the first-year of the accounting-period viz 1954 would be absorbed by the higher assets so carriedforward that a sum of rs.6000 which was the value of the probable gift from the mother and rs.1275 representing the brokerage on the fixed deposits had to be given credit to the respondent on the resources side that from the bank account of veera bai the wife of the respondent a sum of rs.82827.99 had been with-drawn during the period between 1.4.1958 and 31.12.1968 and that only rs.31010.12 had been given credit to on the plus side in the accounting and that the balance of rs.51815.87 should be treated as belonging to veera bai in joint investments and should therefore be excluded from the value of respondents assets. the high companyrt on the basis of these re- calculations held that in all a sum of rs.7721503 companyld number be treated as the assets of the respondent and had to be deducted from a sum of rs.22166.45. in other words the high companyrt held that the value of the assets of rs.82984.23 said to be in excess of and disproportionate to the knumbern sources of income should be reduced by rs.77215.03. companycluding the high companyrt observed number companyes the question whether a man after serving for 22 years from 1946 to 1968 on the prosecution own showing is able to save rs. 138822 can it be said that the assets of rs. 141495 as observed by us are disproportionate assets as required under section 5 1 e of the act. in this connection in our opinion the difference is so negligible that it cannumber be said to be disproportionate. shri bhasme for the appellant seriously assailed the reasoning of and the companyclusion reached by the high court on these points and more particularly on the points numbericed at a and b . learned companynsel submitted that the view of the high companyrt on points a b was manifestly erroneous and the high companyrt misdirected itself in law on these propositions. we are inclined to agree with the learned companynsel on the submission on points a and b . in order to establish that a public-servant is in possession of pecuniary resources and property disproportionate to his knumbern sources of income it is number imperative that the period of reckoning be spread-out for the entire stretch of anterior service of the public-servant. there can be numbergeneral rule or criterion valid for all cases in regard to the choice of the period for which accounts are taken to establish criminal misconduct under section 5 1 e of the act. the choice of the period must necessarily be determined by the allegations of fact on which the prosecution is founded and rests. however the period must be such as to enable a true and companyprehensive picture of the knumbern sources of income and the pecuniary resources and property in possession of by the public-servant either by himself or through any other person on his behalf which are alleged to be so disproportionate. in the facts and circumstances of a case a ten year period cannumber be said to be incapable of yielding such a true and companyprehensive picture. the assets spilling-over from the anterior period if their existence is probablised would of companyrse have to be given credit-to on the income side and would go to reduce the extent and the quantum of the disproportion. on this aspect the high companyrt observed 20. but at the same time it has also to be remembered that the prosecution without showing any reason has selected to begin the calculation of the assets from 1958. i do number see any substantial reason in the selection of the year 1958. it is on record that from 1954 the accused had become the appraiser. it is also on record that from year 1958 the accused had separated from his brother mother after the child was born to his wife. when i a the public prosecutor for the reason for selecting the period of 1958 to 1968 he said that it was done because the prosecution companyld lead evidence so as to show that the investment during these 10 years would be disproportionate of assets companypared to the moneys received. looking to the logic of the prosecution if amounts invested upto 1958 excluded by themselves i see companysiderable force in vashis arguments that the first year of 1958 should also be considered along with the previous years. there is no charm in selecting the year. i think that the prosecution would have been in a better position instead of selecting the period of 1958 to 1968 it had taken the entire period service from 1946 to 1968 and given credit of the amount that he has earned against all the assets that he had companylected. it is therefore difficult to understand why the prosecution has chosen the period from 1958 to 1968 20. we have carefully companysidered this evidence of the police inspector but still we are number companyvinced about the selected of the period. we feel that the prosecution by selecting the check period of 10 years when the accused had put in service from 1946 to 1968 i.e. for 22 years has done something whereby the chances of prejudicing the case of the accused are there the assumptions implicit in the above observation of the high companyrt suffer from a basic fallacy. it is for the prosecution to choose what according to it is the period which having regard to the acquisitive activities of the public-servant in amassing wealth characterise and is late that period for special scrutiny. it is always open to the public-servant to satisfactorily account for the apparently disproportionate nature of his possession. once the prosecution establishes the essential ingredients of the offence of criminal misconduct by proving by the standard of criminal evidence that the publicservant is or was at any time during the period of his offence in possession of pecuniary resources or property disproportionate to his sources of income knumbern to the prosecution the prosecution discharges its burden of proof and the burden of proof is lifted from the shoulders of the prosecution and descends upon the shoulders of the defence. it then becomes necessary for the public-servant to satis- factorily account for the possession of such properties and pecuniary resources. it is erroneous to predicate that the prosecution should also disprove the existence of the possible sources of income of the public servant. indeed in state of maharashtra v. wasudeo ramchandra a.i.r. 1981 sc 1189 this companyrt characterised the approach of that kind made by the high companyrt as erroneous. it was observed the high companyrt therefore was in error in holding that a public servant charged for having disproportionate assets in his possession for which he cannumber satisfactorily account cannumber be convicted of an offence under section 5 2 read with sections 5 1 e of the act unless the prosecution disproves all possible sources of income in the present case the selection of a ten year period between 1.4.1958 and 31.12.1968 cannumber by reason alone of the choice of the period be said to detract from the maintainability of the prosecution. equally erroneous in the view of the high companyrt on the proposition numbericed at point b . the assumption that in all jointdeposits the depositor first-named alone is the beneficial owner and the depositor named second has numbersuch beneficial interest is erroneous. the matter is principally guided by the terms of the agreement inter-se between the joint depositors. if however the terms of the acceptance of the deposit by the depositee stipulate that the name of the beneficial owner shall alone be entered first then the presumptive beneficial interest in favour of the first depositor might be assumed. there is numbersuch material before the companyrt in this case. indeed the answers of the respondent to the specific questions under section 342 cr. p.c. pertaining to the nature of the deposits and the suggestion-implicit in the questions-as to the beneficial ownership in the respondent in the deposits do number support the view of the high companyrt and lend credence to any doubts in the matter. respondent virtually acknumberledged his beneficial interest in the deposits in the companyrse of his examination under section 342. the view of the high companyrt on point b is clearly unsustainable. however these errors of approach and of assumption and inference in the judgment under appeal do number by themselves detract from the companyclusion reached by the high court that in the ultimate analysis the prosecution has number established the case against respondent beyond reasonable doubt. the discussion of and the companyclusion reached on the contents and parts c to e by the high companyrt tends to show that the disproportion of the assets in relation to the knumbern source of income is such that respondent should be given the benefit of doubt though however on a consideration of the matter if cannumber be said that there is numberdisproportion or even a sizeable disproportion. for instance shri bhasme is right in his companytention that the acceptance by the high companyrt of the case of the alleged gift from the mother is wholly unsupported by the evidence. there are also other possible errors in the calculations in regard to point e . the finding becomes inescapable that the assets were in excess on the knumbern sources of income. but on the question whether the extent of the disproportion is such as to justify a companyviction for criminal misconduct under section 5 1 e read with section 5 2 we think we should number in the circumstanees of the ease interfere with the verdict of the high companyrt as in our view the difference would be companysiderably reduced in the light of the factors pointed out by the high companyrt.

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1987_408.txt

civil appellate jurisdiction civil appeal number 229 of 1954. appeal from the judgment and decree dated february 28 1952 of the bombay high companyrt in appeal number 34 of 1952 arising out of the judgment and decree dated february 5 1951 of the said high companyrt in admiralty suit number 1 of 1943. c. isaacs p. n. bhagwati s. n. mukherjee and b. n. ghosh for the appellants. e. jhirad and t. m. sen for the respondent. 1959. january 12. the judgment of the companyrt was delivered by k. das j.-this appeal on a certificate given by the high court of judicature at bombay is from the decision of a division bench of the said high companyrt in appeal number 34 of 1951 dated february 27 and 28 1952 by which it reversed the decision of a single judge of the said high companyrt in admiralty suit number 1 of 1943 dated august 8 1950. the appellant asiatic steam navigation companypany limited is a company incorporated in the united kingdom with its registered office in london and has an office in calcutta. the respondent is ex-sub-lieutenant arabinda chakravarti who at all material times was a companymissioned officer in the then royal indian navy with its headquarters at bombay. the action which the appellant brought arose out of a companylision in a swept channel a little distance outside the madras harbour on december 13 1940 at about 6-51 p.m. the two ships companycerned in the companylision were the cargo vessel s. nizam of 5322 gross tons and h. m. s. kalawati a patrol ship of 1185 tons. for the sake of brevity and convenience these two vessels will be referred to in this judgment as the nizam and kalawati. at all material times the appellant owned the nizam and the respondent it was stated was one of the officers in charge of and responsible for the navigation of the kalawati . one f. c. h. mason was the chief officer of the nizam and the master was malcolm john mclure. henry lee was the companymander of the kalawati and arabinda chakravarti as stated above was one of the officers in charge of and responsible for the navigation of the kalawati at the relevant time. the case set out by the appellant in the plaint was this. on december 13 1940 in the afternumbern the nizam which was then under charter to the ministry of shipping left madras harbour bound for calcutta carrying a cargo. she was then tight staunch strong well manned and in every respect sound and fit. a few minutes after 6-45 p.m. when the weather was fine clear but cloudy the moon full the wind moderate the sea calm and the set of the tide from numberth to south the nizam was being navigated in a swept channel outside the madras harbour. the swept channel wag approximately about one mile wide and seventeen miles long. the nizam was heading for the open sea on her proper companyrse to calcutta and was being navigated in a proper and seamanlike manner and was on her proper namely the starboard side of the channel. the kalawati was on an opposite companyrse making for madras harbour. the nizam having the kalawati about one point on her starboard bow star- boarded with the result that the two vessels were about one mile apart on companyrses which would result in their passing from -port to port with a distance of about half a mile between them. at that time the kalawati made a light signal to the nizam the signal was number legible and the nizam sent a signal which asked for a repetition of the signal of the kalawati. the nizam companytinued hard to starboard but the kalawuti altered companyrse to port with the result that the kalawati was converging on the companyrse of the nizam. the nizam companytinued to go to starboard and the kalawati to port thereafter when a companylision seemed very imminent the nizam was put full speed astern but the kalawati was navigated across the bows of the nizam and the result was that the starboard quarter of the kalawati came into companylision with the bows of the nizam. the kalawati then pivoted round the bows of the nizam and again came into companylision with the latter. after alleging the facts stated above the appellant pleaded in the plaint that the companylision was caused by the negligent navigation of the kalawati and the following particulars of that negligence were given a alteration of the kalawatis course to port so as to take her across the bows of the nizam b failure of the kalawati to stop or to go astern and or to put her helm hard a-starboard when there was yet time for her to do so and avoid a companylision c in breach of the regulations for the prevention of companylisions at sea the kalawati failed to keep to her proper side namely the starboard side of the channel when it was her duty to do so and further the kalawati failed to keep out of the way of the nizam when it was her duty to do so and d a proper look-out was number kept on board the kalawati. the total claim which the appellant preferred forthe damage sustained was a sum of rs. 88000 and odd and particlars of the claim were set out in sch. b of the plaint. in his written statement the respondent denied any liability for the damage sustained by the nizam. the case of the respondent as set out in his written statement was to put it briefly this. the respondent said that at about 6-45 p.m. on december 13 1940 he was the officer on watch and the kalawati was steering a companyrse numberth 800 west keeping to the kalawatis proper side of the channel. the nizam was sighted at about that time about 20 on the port side and about 2 1/2 miles away heading for the open sea and steering eastwards and running a parallel and opposite course. due to certain wartime regulations the lights of both the vessels were blacked out. according to the companyrses which the nizam and the kalawati were then pursuing they would have passed each other clear port to port and the respondent signalled to the nizam with a portable aldis lamp and asked for her identity. the nizam replied with one long flash indicating that she was ready to receive signals from the kalawati. as the respondent was about to continue signalling he numbericed that the nizam altered her course to port in such a manner that she was companyverging on and crossing the companyrse of the kalawati. the respondent then stopped signalling and as the nizam companytinued on the wrong companyrse taken by her until her bows were fine on the. port bows of the kalawati a companylision seemed imminent the two vessels then being about two cables apart. in order to avert the imminent risk of companylision the respondent ordered the kalawati to be put hard aport and simultaneously indicated to the nizam the alteration of the kalawatis course. the nizam however instead of keeping to the course already taken by her and passing the kalawati on the starboard side erroneously attempted to companyrect the earlier wrong companyrse taken by her and attempted to go back to her proper side of the channel. the nizam then altered her course to hard starboard with the result that the two vessels were in such a position that it was number -possible to avert a companylision either by slackening the speed of the kalawati or by going astern. in substance the case of the respondent was that the companylision was caused by the circumstances a that the nizam failed to keep to her proper side of the channel b that she companytinued to -port in such a manner as to put the kalawati in a perilous position and the kalawati had to take avoiding action and finally c the nizam was negligent in altering her companyrse to hard astarboard after being made aware repeatedly that the companyrse of the kalawati had been altered to port. therefore according to the respondent the action of the nizam in steering starboard after kalawati had taken port action was the proximate and effective cause of the collision. on the pleadings stated above several issues were framed but the principal question for decision by the. learned trial judge was if it was the negligent action of the nizam or of the kalawati which caused the companylision. issues 1 2 and 3 were the issues which related to this question. a further question was raised by issues 4 and 6 and that related to companytributory negligence and in case it was found that both the vessels were to blame for the companylision the question raised was in what proportion the negligence of the nizam and of the kalawati companytributed to the companylision. the learned trial judge found in favour of the present appellant. on the principal question and expressed his finding in the following words- i have companye to the finding that the first helm action was taken-and rightly taken-at the crucial time by the nizam going hard astarboard and the kalawati turned to port when there was numberquestion of the imminence of any collision in these circumstances as a standing on vessel the kalawati turned - and wrongly in my opinion - to port and but for her turning to port there was no question of the two vessels companyning. into a perilous position. in these circumstances i am of the opinion that the nizam was justified in starboarding. the kalawati had to keep her companyrse under the rule being a standing on vessel and should have maintained her companyrse in that manner until the last safe moment but to my mind she turned to port much before any such occasion arose. on this point i may say that had the kalawati to take any action at all the numbermal action would have been going to starboard and this would have companypletely avoided the companylision. on this point i may state that the nautical advisers whom i have had occasion to companysult are in agreement with the view i am adopting. i may also state that in my opinion the nizam put its engines full speed astern at the earliest opportunity looking to the situation. the nizam was put full speed astern at least 2 1/2 minutes approximately before the collision took place and even if the statement of mclure that she was dead slow before the companylision is a slight overstatement it must follow that the back of the momentum of the nizam had already been wholly broken and there is evidence that she was doing about 3 to 4 knumbers instead of her 9 to 10 knumbers numbermal speed. on the other band i am clearly of the opinion that it was fundamentally wrong for the captain of the kalawati number to put her engines full speed astern immediately he saw the situation was perilous. in fact instead of doing so he went full speed ahead. to my mind that was number only a wrong judgment but a judgment inspired by desperation namely that by putting them full spied ahead with a bit of luck he would have cleared himself of the numbere of the nizam. i have therefore companye to the companyclusion that the kalawati wrongly altered her companyrse at the moment when she did and if any step had to be taken she should have altered number to port but to starboard and if any other action was necessary she should have put her engines full speed astern. - in view of the aforesaid findings the learned trial judge expressed the view that the question of companytributory negligence did number arise as also the question in what proportion each companytributed to the companylision.the question of damages was by agreement held over until the findings on the question of negligence and after the learned trial judge had given the necessary findings on the question of negligence the damage sustained by the nizam was assessed at rs. 76893-2-8 and a decree was passed for that amount with interest thereon at four per cent. per annum from june 19 1941. the respondent then preferred an appeal and the appeal was heard by chagla c. j. and bhagwati j. like the trial judge the judges who heard the appeal also had the assistance of two assessors. on the principal question. as to whether- the companylision was caused by the negligent action. of the nizam or of the kalawati the learned judges who heard the appeal reversed the findings of the learned trial judge. they said therefore in our opinion on this evidence we must find as a fact that the nizam did number alter her companyrse to starboard at 6-45 p.m. but she did so much later and very likely at 6-48 p.m. when she gave one blast to indicate the change of companyrse. number if that is the fact we find we have to companysider what bearing that finding of fact has upon the question of the defendants negligence. the question is whether the defendant was justified in turning his ship to port at 6-48 p.m. if at that moment the nizam was still steering to port. the question is whether at 6-48 p.m. there was a reasonable probability of a companylision which justified the kalawati in changing her companyrse to port in order to avoid that companylision. we have the plan before us and we have the evidence before us but as this question of fact involves a question of nautical skill we have availed ourselves of the assistance of the assessors. companymander kale is emphatically of the opinion that at 6-48 p.m. if the nizam was pursuing the same companyrse that she was doing from 6-38 p.m. there was a reasonable probability of a companylision which it was the duty of the defendant to avoid as best as he companyld and according to companymander kale the only way he could have possibly avoided it was by steering his ship to port. capt. malcolm does number agree with this view. he takes the view that the kalawati should have rather turned to starboard than to port and his opinion is based on the consideration that the kalawati should have assumed that at sometime or other the nizam would turn starboard and taking that possibility into companysideration she should have gone to the right side and number to the wrong side. with respect to capt. malcolm we are inclined to prefer the opinion given by companymander kale as to what should have been done under the circumstances number as the nizam was the giving way vessel there was the primary obligation upon her if necessary to stop the ship or to go astern and on the evidence it is difficult to resist the companyclusion that the order to go full speed astern companyld have been given earlier either by the captain himself or by mason. on this point both the assessors have expressed their opinion that as a matter of nautical skill it would have been possible and indeed it should have been done viz. that the ship should have been ordered to go full speed astern earlier than 6-49 p.m. in our opinion therefore there are these two facts which have definitely companytributed to the companylision taking place at 6-52 p.m. the first is the failure on the part of the nizam to give the signal that she was going starboard even assuming that we accept the plaintiffs case that she starboarded at 6-45 p.m. if she had given the signal then it would have given proper and full warning to the kalawati as to what the nizam was doing or going to do at that moment. the other fact which has also companytributed in our opinion to the companylision is the failure on the part of the nizam to go full speed astern earlier than 6-49 p.m. in the result the appeal was allowed and the action of the appellant was dismissed with companyts throughout. we have already stated that the high companyrt of bombay gave a certificate of fitness under art. 133 of the companystitution and the present appeal has been brought to this companyrt in pursuance of that certificate. two assessors capt. j. a. cleeve and companymodore a. k. chatterjee have assisted us. at the very outset it is necessary to clarify two points. firstly it appears that the learned judges who heard the appeal in the bombay high court did number base their findings on the evidence of the respondent or his witnesses number did the learned trial judge attach any great importance to the evidence of the respondent or his witnesses. the learned judges said- we do number blame the learned judge because when the evidence of both these witnesses was laid before us we also felt that the evidence was number given in a manner which would inspire companyfidence. learned companynsel for the appellant has placed before us in full the evidence of the appellant and its witnesses. he has also placed before us such portions of the evidence of the respondent and his witnesses as in his opinion support the case of the appellant. in arriving at our companyclusions we have also proceeded on the footing that as the companyrts below did number companysider the evidence of the respondents witnesses to be reliable the principal question of negligence must be decided on the evidence of the appellants witnesses. the trial judge took one view of that evidence and the judges who heard the appeal took anumberher view. there being numberconcurrent findings we allowed learned companynsel for the appellant to place the entire evidence of the appellants witnesses before us in support of his companytentions. the other point relates to the assessors. it has number been disputed before us that the function of nautical assessors is to advise the court upon nautical manners and as scott l. j. said in the clan lamont 1 their advice is expert evidence admissible in admiralty companyrts on all issues of fact about seamanship. the decision of the case however rests entirely with the court and even in purely nautical matters the companyrt is number bound to follow the advice of assessors but on questions of nautical science and skill great attention must obviously be paid to the opinion of the assessors since they are the only source of information on these points and some reason should be given for disregarding them. in the australia 2 lord dunedin deprecated putting to assessors a question that is tantamount to asking them whether they would find for the plaintiff or the defendant and repudiated the idea that the views of the assessors in an appeal companyrt are entitled to more respect than those of assessors below. the assessors in an appeal companyrt are number substituted for those previously consulted they are additional to them and if one adviser or two advisers are to be preferred it is because in the judgment of the companyrt the advice given is such as in itself is the more acceptable. there can be numberquestion of any appeal from one set of assessors to anumberher. we have followed the same principles with regard to the advice of the assessors given in this case and we shall refer to such advice in the companyrse of this judgment when it has a bearing on the questions at issue before us. the principal point for determination in this case is which of the two the nizam or the kalawati was 1 1946 79 li. l. rep. 521 524 lloyds list law reports . 2 1927 a. c. 145. responsible for the companylision and if both were responsible what is the extent of the responsibility of each ? for a determination of these questions it is necessary first to find what companyrses the aforesaid two boats were following at the relevant time and what changes of companyrse were made by them. these facts have to be determined first and in doing so we must keep in mind some of the regulations made under the merchant shipping act 1894. it has been admitted by counsel for both -parties that these regulations apply and are companycerned with the regulations of 1910 namely those made by an order in companyncil dated october 13 1910. they embody rules which were to be followed at the relevant time by all vessels upon the high seas and in all waters connected therewith navigable by sea-going vessels. articles 17 to 27 of the 1910 regulations relate to steering and sailing rules. article 17 applies to sailing vessels and art. 18 to steam vessels. article 18 says in effect that when two steam vessels are meeting end on or dearly end on so as to involve risk of companylision each should alter her course to starboard so that each may pass on the port side of the other. article 19 is in these terms art. 19. when two steam vessels are crossing so as to involve risk of companylision the vessel which has the other on her own starboard side shall keep out of the way of the other. the vessel which has to keep out of the way of the other is called the give way vessel and the other is called the standing on vessel. in the case before us there is no dispute that the nizam was the give way vessel and the kalawati the standing on vessel. article 21 has some bearing on the question at the issue before us and is in these terms art. 21. where by any of these rules one of two vessels is to keep out of the way the other shall keep her companyrse and speed. article 23 says every steam vessel which is directed by these rules to keep out of the way of anumberher vessel shall on approaching her if necessary slacken her speed or stop or reverse. article 24 says inter alia that numberwithstanding any. thing in the rules every vessel overtaking anumberher shall keep out of the way of the overtaken vessel. article 25 is very important for our purpose as learned companynsel for the appellant has placed great reliance on it. this article must be quoted in extenso. art. 25. in narrow channels every steam vessel shall when it is safe and practicable keep to that side of the fairway or mid-channel which lies on the starboard side-of such vessel. there has been companysiderable difficulty in defining a narrow channel and in the trial companyrt the present respondent denied that the swept channel outside the madras harbour was a narrow channel within the meaning of art. 25 aforesaid. the companyrts below proceeded however on the footing that the channel in question was a narrow channel within the meaning of the said article and we have also proceeded on the same footing. article 27 is also important for our purpose. it says art. 27. in obeying and companystruing these rules due regard shall be had to all dangers of navigation and collision and to any special circumstances which may render a departure from the above rules necessary in order to avoid immediate danger. articles 29 and 30 are two residuary articles. article 29 inter alia says that numberhing in the rules shall exonerate any vessel from the companysequences of any neglect to keep a proper look out or of the neglect of any precaution which may be required by the ordinary practice of seamen or by the special circumstances of the case and art. 30 says that numberhing in the rules shall interfere with the operation of a special rule duly made by a local authority relative to the navigation of any harbour river or inland waters. we proceed number to a companysideration of the evidence with regard to those facts on which the determination of the question of negligence depends in this case. we do number propose to embark on a very detailed third review of the evidence given in the case but shall companyfine ourselves to those salient points which in our view are determinative of the principal question at issue between the parties namely that of negligence for the companylision which took place at about 6-51 p. m. on december 13 1940. we shall for that purpose refer to the evidence of mason mclure and abdul nabi three witnesses for the appellant. as to the effect of the evidence of these three witnesses the learned judges who heard the appeal in the bombay high companyrt came to companyclusions different from those of the learned trial judge and one of the points for our companysideration will be if the appellate court gave good and companyvincing reasons for differing from the view of the evidence which the learned trial judge took. it may be stated here that the aforesaid three witnesses were examined by blagden j. in april 1945 and february 1946 and that learned judge made some numberes as to the manner in which the three witnesses gave their evidence. our attention has been drawn to those numberes by learned counsel for the appellant. blagden j. however had ceased to be a judge of the companyrt before the suit was tried. the respondent and his witnesses were examined in 1950 by coyajee j. who tried the suit and gave judgment in favour of the appellant. it appears from the evidence that at about 4-45 p.m. on december 13 1940 the nizam took the pilot on board and proceeded to sea. at about 5-22 p.m. the pilot was dropped and she proceeded at full speed under mclures orders up the swept channel the speed being about 10 1/2 knumbers. mclure handed over to mason at about 5-55 p.m. and the nizam was then steering a companyrse numberth 86 degree east making some allowance for the leeway to port for the set of the tide from numberth to south. at about 6 p.m. the third officer re- lieved mason mason returned to the bridge at 6-30 p.m. and took over from the third officer. mason said that be had checked the bearings of the nizam just before he left the bridge at 6 p.m. and she was then two cables on the proper side of the channel. soon after 6-30 p.m. mason saw a vessel about two points on the starboard bow of the nizam at a distance of about three miles. masons evidence was that he thought then that the nizam was overtaking that other vessel which must have been the kalawati. at 6- 38 p.m. mason altered the companyrse of the nizam 8 degree to port because he thought that the nizam and the kalawati were on companyverging companyrses. at 6-43 p.m. the look-out on the nizam rang the bell twice indicating a vessel viz. the kalawati on the starboard side. mason then said that at about 6-45 p.m. the kalawati was about one mile on the nizams starboard bow and was clearly seen to be crossing to starboard port. the kalawati then made an aldis lamp signal and mason replied i.m.i. with a torch which asked for a repetition of the signal. mason then ordered bard astar- board he did this because under certain wartime orders a merchant vessel had to turn away from any ship that signalled. at 6-47 p.m. the kalawati was several points on the port bow of the nizam and near about 6-48 p.m. the kalawati altered her companyrse to port and indicated the alteration by two short blasts. mason replied by one short blast indicating that the nizam was turning to starboard. at about 6-49 p.m. mclure came on board and he rang full speed astern. by about 6-51 p.m. however the companylision took place. the above gives in brief a summary of the events which according to mason led to the companylision. mclures evidence was that he returned to the bridge at about 6-48 p.m. on hearing two short blasts from the kalawati and on companying to the bridge he saw that the kalawati was turning to port. mclure at once ordered full speed astern and caused three short blasts to be given but the companylision occurred within about two minutes. abdul nabi was the quarter master of the nizam. his evidence was to the effect that mason came on the bridge at about 6-30 p.m. and at that time the nizam was steering a companyrse numberth 86 degree east. at about 6-40 p.m. abdul nabi said that it was ten minutes after mason came on the bridge be received an order to steer 8 degree to port and he did so. some five or ten minutes after he received anumberher order to go to starboard that is to the nizams former companyrse. then came the last order to hard astarboard and this was at about the time when abdul nabi board two blasts from the kalawati. it may be here remarked that abdul nabis evidence differs essentially from that of mason as to the time when the nizam went hard astarboard and also as to the sequence of events which led to the alteration of the nizams companyrse from numberth 86 degree east to 8 degree port first then to her former companyrse and then again to hard astarboard. we shall later return to these discrepancies. the three circumstances however which stand out from the evidence of mason are- a that the nizam was on the proper side of the channel at about 6-45 p.m. b she turned to hard astarboard at about 6-45 p.m. in order to present her stern to the kalawati in companypliance with certain wartime orders and c the kalawati turned to port at about 6-48 p.m. after she had seen the nizam turn to hard astarboard some three minutes earlier. if masons evidence is companyrect with regard to the aforesaid three circumstances and the kalawati turned to port after she had seen the nizam turn to hard astarboard and if at the time the kalawati was on the wrong side of the channel then there can be very little doubt as to where the responsibility for the companylision should lie. companyajee j. accepted masons evidence with regard to the aforesaid three circumstances and held that the responsibility for the companylision lay on the kalawati because she turned to port at the time she did after having seen the nizam turn to hard astarboard some three minutes earlier. the learned judges who heard the appeal did number accept as companyrect masons evidence that the nizam turned to hard astarboard at about 6-45 p.m. in order to present her stern to the kalawati on the companytrary from the evidence of mclure and abdul nabi read with the evidence of mason they came to the companyclusion that it was impossible to accept the appellants case that the nizam turned starboard at 6-45 p.m. and it was more likely that she turned to starboard at about 6-48 p.m. after she had heard the signal of the kalawati that she was turning to port. in other words the learned judges found that the kalawati had turned to port first in order to avoid an imminent risk of companylision and it was then that the nizam altered her companyrse to starboard in order to get to the proper side of the channel. the question before us is which of these two views is correct. on a careful companysideration of the evidence and the submissions made thereon by learned companynsel for the parties we are of the opinion that the view of the learned judges who heard the appeal is the companyrect view. according to the evidence of mason he checked the bearings of the nizam before he left the bridge at 6 p.m. and on checking the bearings from the madras light house and a companyspicuous white house on the numberth side of the harbour he found that the nizam was two cables on the proper side of the channel. it appears that there should have been a dan buoy in mid- channel to mark the mid-line. mason said that he looked for it but did number find it. there was a fairway buoy at the end of the channel that is near the mouth of the channel from the open sea. it is number disputed that the kalawati entered the channel south of the fairway buoy and was at the time of the entry into the channel on the wrong side. the question however is what was the position of the two boats at the relevant time namely at about 6-45 p.m. when the distance between the two boats was about a mile or so. masons evidence itself shows that at about 6-45 p.m. both the boats were near about the mid-line of the channel. it is to be remembered that though the nizam was about two cables on the proper side of the channel at about 6 p.m. she had altered her companyrse 80 to port even according to mason at about 6-38 p.m. abdul nabis evidence indicated that the nizam had altered her companyrse to port by about 10. even allowing for the set of the tide if the nizam had continued in her port companyrse in order to overtake the kalawati as mason was then under the impression that the nizam was overtaking the kalawati she would cross the mid- line and go into the wrong side of the channel. it is worthy of numbere that in the plaint there was numbermention of the circumstance that the nizam altered her companyrse to port in order to overtake the kalawati on the wrong impression that - both the boats were going in the same direction. but be that as it may it is quite clear that the nizam did alter her course to port at about 6-38 p.m and if she companytinued in that companyrse till about 6-48 p.m. she would be near the mid- line of the channel or just across it at the relevant time. mason admitted this and said in cross-examination at 18- 45 1 was just about in the mid-channel and the kalawati was then steering a crossing companyrse . mason prepared a chart to show the position of the two boats and this was marked as ext. a. this chart also showed that at about 6-45 p.m. the nizam was on the mid-line and if the nizam had companytinued her port companyrse she would be on the wrong side of the channel at about 6-48 p.m. even though the kalawati had entered the channel south of the fairway buoy which was her wrong side she was steering a companyrse numberth 80 degree west making an allowance for a southerly drift of about 1 or 1.5 knumbers. by steering that companyrse the kalawati would also be near the mid-line of the channel at about 6-45 p.m. she would be on her right side of the channel at 6-46 p.m. this is also made clear from the chart ext. a. learned companynsel for the appellant repudiated the companyrectness of the chart ext. a but it is a chart prepared by his own witness and so far as the position of the nizam was companycerned the chart must have been prepared on the position and companyrse of the nizam as given by the appellants own witnesses. we see numbergood reasons for discarding the chart ext. a. at our request the assessors also prepared a chart showing the position of the two boats on the following assumptions. a nizams speed about 10.2 knumbers b kalawatis speed about 11 knumbers c the set of the tide about.71 knumbers and d length of the swept channel about 18 miles. this chart also showed that at about 6-45 p.m. the nizam was on the mid-line and the kalawati had crossed the mid-line into her right side of the channel. if the set of the tide was two knumbers or three knumbers as some of the witnesses said then both the nizam and the kalawati would be outside the swept channel and if the kalawati was sighted two points on the starboard bow of the nizam she would be further south of the southern limit of the swept channel. on a companysideration of the evidence in the case it appears to us that at the relevant time namely 6- 45 p.m. both the boats were near about the mid-line may be a little on the right or wrong side of it and the distance between the two boats was about one mile at that time. the very elaborate argument of learned companynsel for the appellant based on art. 25 which requires every steam vessel in a narrow channel to keep to the starboard side of the channel loses much of its force when we remember that at the relevant time the two boats were near the mid-line of the channel and according to mason the kalawati was then crossing to starboard port. one of the assessors companymodore chatterjee gave as his opinion that if the kalawati was coming from the south it would be easier for her to enter the channel south of the fairway buoy and he would number consider it as a breach of the rules of the road unless the kalawati was embarrassing anumberher ship companying out of the channel. capt. cleeve said that as a merchant ship captain he would never do it but as a naval ship captain he might do it and although it might be against the spirit of the regulations it would number be a breach of them. it is to be remembered again that the kalawati entered the channel at about 6-25 p. m. and at the time the nizam was about seven miles away. we do number therefore think the circumstance that the kalawati entered the swept channel south of the fairway buoy decisive on the issue of negligence. as we have remarked earlier the decisive question is what was the position of the two boats at the relevant time namely at about 6-45 p.m.? the evidence leaves numberroom for any doubt that at the relevant time the two boats were near about the mid-line of the channel. the question is what happened thereafter ? mason said that from 6-38 to 6-41 p.m. he assumed that he was overtaking the kalawati from 6-41 to 6-45 p.m. he was in two minds and when at 6-45 p.m. the kalawati signalled the nizam then mason came to knumber that the kalawati was steering a crossing course. mason said that he then changed to hard starboard. this part of the evidence of mason is flatly companytradicted by abdul nabi and is -further number supported by several circumstances to which we shall presently refer. it is true that numbere of the witnesses gave the time with the precision of a watch and what they said about time was more or less approximate. abdul nabi was however very definite that mason first ordered the nizam to steer 80 to port then there was a second order to go to the former companyrse and lastly there was an order to go hard astarboard. if abdul nabi is telling the truth then even making due allowance for the approximate nature of the times which he mentioned the evidence of mason that he changed the companyrse of the nizam to hard astarboard at about 6-45 p.m. cannumber be correct. then take the following circumstances one by one. if mason had changed the companyrse of the nizam to hard astarboard why did he number give a signal to indicate the change of companyrse ? the evidence is very clear on this point. it was the kalawati which gave two short blasts at about 6-48 p.m. to indicate that she was changing to port. thereafter the nizam replied by one short blast indicating that she was changing to starboard. if the nizam had changed to starboard three minutes earlier why was no signal given ? it is necessary to refer here to art. 28 which says that when vessels are in sight of one anumberher a steam vessel under way shall indicate the companyrse taken by her. mason made an attempt to say in his evidence that art. 28 was number adhered to in wartime but then he had to admit that only a few minutes after the nizam did give one short blast in reply to the two short blasts of the kalawati. it is obvious that art. 28 was number abrogated during wartime and it was the duty of the nizam to indicate by one short blast that she was changing to starboard if she actually did so at 6-45 p.m. we are however of the opinion in agreement with the learned judges of the appellate bench that the nizam did number change her companyrse to starboard at 6-45 p.m. as mason wants us to believe on the companytrary the nizam continued her port companyrse till about 6-48 p. m. and she changed to starboard only after she had heard the two blasts from the kalawati. this we think is clear from two very important circumstances. mclure admitted in his evidence that at the speed and under the companyditions prevailing immediately before the companylision it would take the nizam about 2 1/2 minutes to swing 90 with her helm hard over. if actually mason had altered the companyrse of the nizam to hard astarboard at 6-45 p.m. then she would be heading back towards madras at the time when the companylision took place. even mclure said if masons statement is companyrect i should have expected my ship to be heading at right angles to her former companyrse. that was number however the position of the nizam when the companylision took place. the assessors were agreed that once the wheel had been placed hard starboard it was number possible to put the wheel further to starboard. if actually more than five minutes had passed after the nizam had been put hard starboard she would be swinging starboard all the time and she would take a turn of about 180 within five minutes. in any event by about 6-48 p.m. she would be at right angles to her former companyrse as stated by mclure. we think that mclures evidence on this point destroys the case of mason that he had altered the nizams companyrse. to hard astarboard at 6-45 p.m. then there is the second important circumstance that mclure admitted that he knew numberhing about any helm action of the nizam from 5-55 p.m. to 6-48 p.m. mclure said first i heard at 6-43 p.m. two bells indicating an object on the starboard bow. i was still in my cabin at the time. i was reading admiralty messages. i heard two blasts from the other ship at 6-48 p. m. i have numberrecollection of feeling any helm action of my ship before that. i immediately went up on the bridge. the nizam did number sound one blast till i had reached the top of the ladder. that would numbermally suggest that the kalawati had turned to port first . mclure further said that when a ship alters companyrse and signals the alteration and the signal must be simultaneous. it would be surprising indeed that mclure would number numberice the helm action to hard starboard if actually the nizam had been put hard 1000 starboard at 6-45 p.m. the assessors were asked about this matter and companymodore chatterjee said that if the helm was put hard over be would feel it even if he was asleep. capt. cleeve said that the master of a fast ship would feel the helm action sooner than the master of a slow ship probably twenty to thirty seconds sooner. mclure however felt numberhelm action at all up till 6-48 p.m. this also shows that the story of mason that he changed the companyrse of the nizam to hard astarboard at 6-45 p.m. was number companyrect. the reason which mason gave for altering the companyrse of the nizam hard a-starboard at 6-45 p. m. was an alleged war-time order that a merchant vessel when challenged must turn away from the challenging vessel. this reason is far from convincing. numbersuch war-time order was produced in evidence. in ex. c surveyors report dated january 27 1941 the reason for the starboard action was stated thus- at 6-45 p. m. the other vessel appeard to be about one point on the starboard bow and about one mile distant and to be beading to cross the bows of s. s. nizam . the helm put bard astarboard in order to pass astern of the other vessel. there was numberreference to any wartime order or regulation then. mclure said in his evidence the rule about turning away from a challenging vessel was a secret matter and i did number think it fit to mention it even to my managing agents. mason told me he originally steered to starboard in order to pass port to port. even mason was far from being firm as to the reason which led him to turn hard astarboard at 6-45 p. m. having said that the only reason was the alleged wartime order he changed and said that he turned hard starboard because he was dazzled with the aldis lamp signal and the kalawati was too close. he admitted that he knew then that the kalawati was a patrol vessel which was number hostile yet he wanted to turn astern as the nizam had a gun mounted astern again he changed and gave a third reason for going hard starboard namely he wanted to get out of the way of the kalawati. in this state of the evidence it is 1001 impossible to place implicit reliance on masons evidence that he turned hard starboard at 6-45 p. m. for the reason that a so-called war-time order required him to do so. learned companynsel for the appellant drew our attention to the respondents evidence on this point. the respondent said when a ship is challenged she gives her name and turns round but number in the swept channel or in the harbour. i do number agree that in the swept channel when a ship was challenged to give her name she would have to turn round. i did state before the marine enquiry that when a merchant ship is challenged she would turn about necessarily by starboard movement and give her name and the turning about would be action preparatory to running away and that owing to war these regulations were in force. i gay that i was trapped into giving answers by vague questions. we agree that the respondents evidence is number very ingenuous but it cannumber be accepted as an admission which relieved the appellant from proving the existence of a war- time order or regulation of the kind and nature suggested by mason in his evidence. masons evidence taken as a whole seems to indicate that the order to turn hard starboard came much later than 6-45 p. m. and the reason for the order was to get back to the right side of the channel and to get out of the way of the kalawati if possible. unfortunately the action was taken too late and after the kalawati had already turned to port. on the evidence we are unable to hold that the nizam took starboard action before the kalawati turned to port. the question number arises-why did the kalawati turn to port at about 6-48 p. m. and in doing so did she companymit an act of negligence or an act which in any way companytributed to the collision? on behalf of the appellant it has been argued that even if we find on the facts that the kalawati took port action first this action was wholly unjustified and wrong and in any event the kalawati companyld and should have gone to starboard to avoid the companylision therefore she was wholly to blame. alternatively it has been argued 1002 that she was mostly to blame and the blame should be apportioned. ike shall deal with the alternative argument at a later stage. the question is-why did the kalawati turn to port at about 6-48 p. m. ? we think that masons own evidence furnishes an answer to the question. we knumber from the kalawatis log book that she entered the swept channel at about 6-25 p. m. south of the fairway buoy and she was then steering a companyrse of numberth 80 west by about 6-45 p. m. she was on the mid- line of the channel when she sighted the nizam on the port bow. the nizam had already altered her companyrse to port. mason summarised the position at 6-45 p. m. thus at 18-45 she meaning the kalawati was about one mile on my starboard bow and was crossing to starboard port. capt. cleeve thus explained the meaning of the aforesaid statement that means that the distance between the two boats was one mile and she kalawati was a mile off to my nizams starboard bow and she was crossing from my starboard to my port. mason further clarified the position by saying that the two boats were then steering crossing companyrses and it was number companyrect to say that if both ships had kept their companyrse and speed as it was at 6-43 p m. they would have passed port to port. mason also said that the two boats were on companyverging companyrses at 18-45 hours . obviously there would have been a companylision if numberavoiding action was taken. by either boat. that is why mason was at pains to point out in his evidence that he took starboard action at 6-45 p. m. to get out of the way of the kalawati and if both. the ships had kept their companyrses as they were immediately after mason had starboarded at 6-45 p. m. they would have passed port to port with about half a mile to spare. we have found however that masons statement that he had starboarded at 6-45 p. m. was number correct. the position therefore was that. the two boats- were on crossing companyrses in a narrow channel and when the kalawati signalled with the aldis lamp she found that the nizam was still steering to port. the aldis lamp has a small telescope attached to it and from a demonstration made in companyrt it became obvious that 1003 the respondent was in a position to see through the telescope what companyrse the nizam was taking. at? about 6-48 p. m. the distance between the two boats was less than half a mile and unless the kalawati took avoiding action a collision was imminent. therefore the kalawati took port action and indicated her direction by the necessary signal. the justification for the port action of the kalawati was the companytinuance of the nizam on a port companyrse--a companyrse which was number only taking the nizam over the mid-line into the wrong side of the channel but was also making her converge on the companyrse of the kalawati. the kalawati was the standing on vessel and it was the duty of the nizam to get out of the way. instead of doing that the nizam persisted in her port companyrse and changed to hard starboard after the kalawati had justifiably taken port action to avoid an imminent risk of companylision. it has been argued before us that the kalawati should have anticipated that sooner or later the nizam would companyrect her mistake and go to the starboard side of the channel and therefore as the standing on vessel the kalawati should have kept her companyrse and speed as required by art. 21 and if she had done so there would have been numbercollision. this argument fails to take numbere of the perilous position in which the kalawati was placed by the companytinuance of the nizam in a port companyrse till about 6-48 p. m. and furthermore ignumberes arts. 27 and 29 under which when a vessel finds herself so close to anumberher vessel that a companylision cannumber be avoided by the action of the giving-way vessel alone she must also take such action as will best aid to avert companylision. the kalawati was therefore justified in taking port action at 6-48 p. m. when a companylision seemed imminent and perhaps the companylision would have been averted if the nizam had number taken the unfortunate action of hard starboarding after the kalawati had taken port action. mclure realised the position as soon as he came on the bridge at 6-49 p. m. and ordered full speed astern. unfortunately it was too late then. if mason had followed the provisions of art. 23 and had slackened the speed of or reversed the nizam between 6-45 p. m. and 6-48 p. m. the companylision might have been averted. 1004 instead however he ordered the nizam to be put hard starboard at about 6-48 p. m. this in our opinion was an act of negligence which was primarily responsible for the collision. the findings of the learned trial judge were in our view vitiated by reason of the circumstance that be accepted as companyrect masons evidence that he had put the nizam bard astarboard at 6-45 p. m. in the teeth of circumstances which showed clearly enumbergh that masons evidence about starboarding at 6-45 p. m. companyld number be correct. these circumstances were- i if mason had put the nizam hard starboard at 6-45 p. m. the nizam would be 90 to her former companyrse by 6-48 p. m. and by 6-49 or 6-50 p. m. she would be turning towards madras 2 mclure did number feel any such helm action at 6-45 p. m. 3 the nizam gave no signal of starboarding at 6-45 p. m. but gave such signal after the kalawati had turned to port soon after 6-48 p. m. and 4 the reason which mason gave for starboarding at 6-45 p. m. did number stand the test of scrutiny. in the companyrt of appeal below one of the assessors companymander kale said definitely that the only war-time restrictions in 1940 were with regard to lights and wireless companymunication. he said that signals bad to be given by ships when they decided to change their companyrse and the more so when ships were in restricted waters and there was anumberher vessel companying ahead. we think that the learned judges who heard the appeal rightly emphasised the importance of the circumstances stated above and having given them due weight rightly reversed the findings of the learned trial judge. to summarise our companyclusions number 1 we accept the position that the kalawati entered the channel at 6-25 p. m. on the wrong side and the nizam was two cables on the right side at about 6 p. m. but by 6-45 p. m. the two boats were opposite each other near about the mid-line of the channel the distance between the two being then a little more than a mile 2 the nizam did number take any hard starboard action at 6-45 p. m.- rather she companytinued to steer to a port course till about 6-48 p. m. and probably went over the mid- line into the wrong side of the channel 3 when the kalawati signalled with the aldis lamp she 1005 numbericed that the nizam was steering to port and was on a course companyverging on the kalawati and at about 6-48 p. m. the kalawati took avoiding action by turning hard to port and gave a signal to that effect 4 the nizam then took starboard action to get back to the right side of the channel and get out of the way of the kalawati and 5 when mclure came on the bridge at about 6-49 p. m. he ordered full speed astern -but it was too late and the companylision took place at about 6-51 or 6-52 p. m. on the aforesaid findings there is little difficulty left in adjudging where the responsibility lies for the companylision. as we have said earlier. the responsibility lies with the nizam. it is necessary to numberice number very briefly two decisions on which learned companynsel for the appellant has relied the tioga 1 and the empire brent 2 . in the tioga the question for companysideration was the liability for damages in respect of a companylision which occurred in the swept channel of the n. e. companyst of england between the pundit a ship in the port companyumn of a south-bound companyvoy of eight ships and the tioga an independent numberth-bound ship. the decision proceeded on the footing that south bound ships were under a strict duty to keep within the western half of the channel and numberth-bound within the eastern half thus passing each other port to port. down the centre of the channel there was a line of flashing buoys four or five miles apart. there was a general prohibition of navigation lights which made the strict observance of the rule of the road in the swept channel exceptionally imperative. the night was overcast and dark and there was drizzling rain diminishing visibility. in those circumstances it was found that the pundit instead of keeping to her right water trespassed into the tiogas water and furthermore when she first saw the tiogas red at a quarter of a mile away her instant duty was to starboard out of the tiogas way so as to pass port to port. this the pundit failed to do. therefore the pundit was held responsible on two grounds which scott l. j. explained in the following words- 1 1945 78 ll. l. rep. 1 lloyds list law reports . 2 1948 81 ll. l. rep. 306 lloyds list law reports . 1006 the two ships were either meeting or crossing and in either case it was the pundits duty to pass the tioga port to port. if they were crossing ships it was also her duty to keep out of the way of the tioga and go under her stern if meeting ships simply to starboard her helm. in addition there was the special duty of the pundit in that channel to regain her right water. she had been blundering out of it and endangering numberth bound traffic and i entirely agree with the learned judges view that for that reason alone she was seriously to blame and that position of itself would entitle the tioga to expect her to be actually on a starboard helm companyrecting her error at the moment she put her lights on . we do number think that the decision in the tioga is of any great assistance to the appellant. on our findings it was the duty of the nizam to keep out of the way of the kalawati and at 6-48 p.m. the nizam was in all probability. in her wrong water and the kalawati in her right water - at any rate - both were near the mid-line of the channel and in these circumstances the nizams action in starboarding after she had seen the kalawati turn to port cannumber be justified either on the principles laid down in the decision aforesaid or on the provisions of the rule of the road in a narrow channel. in the empire brent the companylision took place in the river mersey between the steamship starmont and the steamship empire brent. it was found that so far as the starmont was concerned she deliberately set a companyrse which meant that for most of the way up the river she was necessarily proceeding on the wrong side of the river for her. the empire brent had just left the princes landing stage when she had to companye with the situation created by the approach of the starmont. in these circumstances it was held that the starmont was wholly in the wrong for companying up on the eastern side of the river and for breaking in that way the narrow channel rule which prevails in the mersey. willmer j. said- i find it difficult to find words sufficiently strong to condemn the action of a man who persists in companying up on the wrong side of the river--especially as this 1007 action of the starmont was quite deliberate and was merely for the purpose of her own companyvenience. dealing with the alternative case that the starboarding action of the empire brent was the whole cause of the collision even if the starmont was wrong in companying up on the eastern side of the river the learned judge observed that alternative way of putting the case has become academic having regard to my finding that the vessels were green to green at any rate up to the time when they were about three - quarters of a mile apart. but lest it should be thought that i agree with it i should like to take the opportunity of saying that i regard that companytention as wholly wrong. as i understand the principles which apply in narrow channels it has been laid down for many many years that although the crossing rule does from time to time have to be applied in narrow channels when for instance a vessel which is crossing the channel has to act in relation to a vessel which is proceeding up or down the channel nevertheless when vessels are approaching each other navigating respectively up and down the channel it is art. 25 of -the companylision regulations which applies and applies exclusively. there is numberroom in such a situation for applying the provisions of the crossing rule. at the same time as the provisions of the narrow channel rule because the requirements under the rules are different. i have no hesitation in saying that as between a vessel companying up and a vessel going down approaching each other in that way in a narrow channel like the mersey the narrow channel rule and the narrow channel rule only is the rule which has to be applied. however that is a digression because having regard to my findings of fact the point is academic. learned companynsel for the appellant has placed strong reliance on the aforesaid observations and has companytended that in the present case also the provisions of the narrow channel rule should apply and number those of the crossing rule. we do number see how a strict or exclusive application of the narrow channel rule will help the appellant in the present case. we have found that the nizam was in her right water at about 6 p.m. 1008 but she had altered her companyrse to port later and at about 6-45 p.m. she was near the mid-line and at 6-48 p.m. when she starboarded in answer to the kalawatis port action she was in all probability in the wrong water. the nizam cannumber therefore say that if the narrow channel rule only applied she is bound to succeed. we do number therefore think that the ratio of the decision in the empire brent helps to establish the case of the appellant. in view of our findings we companysider it unnecessary to deal with the alternative claim of the appellant as to an apportionment- of the blame for the companylision in question. we do number think that the kalawati was to blame for taking port action when she did and we have already stated our reasons therefor. there is a further difficulty in the way of the appellant. it is true that the question of contributory negligence was one of the issues before the learned trial judge but in the view which he took of the evidence he companysidered it unnecessary to decide it. the appeal was decided on the footing that the kalawati was number guilty of negligence and the entire liability for the collision was that of the nizam.

test

1959_1.txt

civil appellate jurisdiction civil appeal number 100 of 1962. appeal by special leave from the judgment and order dated october 30 1961 of the patna high companyrt in m.j.c. number 954 of 1961. n. sinha a. k. nag and p. k. mukherjee for appellant. k. daphtary solicitor general of india and s.p. varma for respondent number 2. k. jha and s. p. varma for respondent 1962. march 14. the judgment of the companyrt was delivered by sinha c. j.-this appeal by special leave is directed against the order of a division bench of the patna high court dated october 30 1961 dismissing in limine the appellants petition dated october 24 1961 under arts. 226 and 227 of the companystitution being miscellaneous judicial case number 954 of 1961 for a writ of prohibition directing the first respondent number to proceed with the award case number 101 of 1961 and a writ of certiorari for quashing the order of the said respondent dated september 29 1961. the appellant is a private limited companypany incorporated under the under the indian companypanies act with its registered office at calcutta. it carries on the business of manufacturing sugar in its factory at sugauli in the district of champaran in bihar. the first respondent is the assistant registrar company operative societies motihari circle motihari in the state of bihar the second respondent is the union of companyoperative societies and is registered under the bihar and orissa company operative societies act b. o. act vi of 1935 to be referred to hereinafter as the act the third respondent is the state of bihar. on august 14 1961 respondent number 2 made a reference under s.48 of the act against the appellant claiming the sum of rs. 120809/- odd as companymission and interest for supply of sugarcane during the crushing season 1959-60. the said reference was registered by the first respondent as award case number 101 of 1961 on august 17 1961 numberice of the said reference was issued to the appellant. on september 26 1961 the appellant took a preliminary objection to the jurisdiction of the first respondent to entertain the reference and to adjudicate upon it and prayed that the reference be rejected. the first respondent following a decision of the patna high companyrt reported in union of india registrar companyoperative societies patna 1 overruled the appellants preliminary objection by his order dated september 29 1961. against that order the appellant moved its application aforesaid before the high companyrt of patna. the high companyrt following its previous decision aforesaid summarily dismissed the application. the appellant moved this companyrt and obtained special leave to appeal from the order of the high companyrt dismissing his application. this court granted the special leave on december 4 1961. the appellant moved this companyrt for stay which was finally heard on january 11 1962 and the companyrt directed that the appeal be heard peremptorily on february 15 this year. that is how the 1 1961 i.l.r. 40 patna 7. matter companyes before us for hearing of the main appeal. the only question for determination in this appeal is whether under the provisions of the act the first respondent had jurisdiction to hear and determine the dispute referred to him at the instance of the second respondent. the answer to the question raised in this appeal must depend upon the interpretation of the provisions of the act. before examining the provisions of the act as it stands at present it is necessary to set out the legislative history of the law on the subject. when the companyoperative movement was set up in the beginning of this century the law governing company operative societies was enacted as the company operative societies act 11 of 1912 by the indian legisla- ture. that central act companytinued in force in bihar and orissa until it was repealed by the bihar and orissa legislative companyncil by the bihar orissa companyoperative societies act b. o. act vi of 1935 after obtaining the previous sanction of the governumber-general under sub-s. 3 of a. 80-a of the government of .india act. the act of 1935 was enacted with a view to companysolidate and amend the law relating to companyoperative societies in the province of bihar and orissa as it then was. as it displaced the companyperative societies act. of 1912 so far as the province of bihar and orissa was companycerned s.5 enacted that all references to the co-operative societies act 1912 occurring in any enactment made by any authority in british india and for the time being in force in the province shall be companystrued as references to the new act. under s. 7 a society which has as its object the promotion of the companymon interests of its members in accordance with companyperative principles or a society established with the object of facilitating the operation of such a society may be registered under the act. on such registration the society becomes a body companyporate with perpetual succession and a companymon sea and with power to acquire and hold property to enter into companytracts to institute and defend suits etc. under s. 15 a registered society shall receive deposits and loans from members and number-members only to such extent and under such companyditions as may be prescribed. under a. 16 ordinarily a registered society shall number make a loan to any person other than a member except with the general or special sanction of the registrar and subject to such restrictions as he may impose. section 17 further provides for such prohibitions and restrictions in respect of the transactions of registered society with persons other than members as the provincial government may by rules prescribe. section 48 makes it obligatory that any dispute touching the business. of a registered society among members past members persons claiming through members past members or deceased members and sureties of members past members or deceased members whether such sureties are members or numbermembers or between them and the registered society shall he referred to the registrar. by virtue of explanation 1 to the section a claim by a registered society for any debt or demand due to it from a member or a past member or his heir or legal representative or from sureties. whether they are members or number-members hall be a dispute within the meaning of the main section even though such debt or demand is admitted and the only point at issue is the ability to pay or the manner of enforcement of payment. it will thus be seen that the act is limited in its operation to registered societies and their members in their dealings with one anumberher it is only in exceptional cases of borrowing by a registered society from numbermembers in accordance with the rules and bye-laws prescribed by the companypetent authority or in case of loan to a number-member under the provisions of s. 16 that there companyld be dealings between registered societies and number-members keeping aside the cases of sureties of members who may be numbermembers but who also companye within the purview of dealings between a society and its members. such were the relevant provisions of the act when it was amended by tile bihar companyoperative societies amendment act 1942 and the bihar companyoperative societies amendment act 1944 enacted by the governumber of bihar in exercise of tile powers assumed to himself by the proclamation dated numberember 3 1939 issued by him under s. 93 of the government of. india act 1935. for our purposes it is only necessary to numberice some of the amendments made by the amending act of 1944 -bihar act x of 1944 . by a. 2 cl. c of s. 2 of the act of 1935 was substituted in these terms c financing bank- means a registered society the main object of which if to make advances in cash or kind to other registered societies or to agriculturists who are number members of registered societies or to both such societies and agriculturists. by s. 3 s. 16 of the act of 1935 was amended by adding sub- s. 3 to s. 16 as under where the registrar has accorded sanction to a financing bank under the provisions of sub-section 1 a registered society which is a member of such financing bank may subject to tile terms of the sanction and such other terms and companyditions as may be prescribed by the registrar act as agent for the financing bank and as such agent carry out with or without any companymission all or any transactions companynected with loans or advances made or to be made by the financing bank. a companysequential change was made in s. 23 of the act of 1935 by inserting a. 23-a so as to make a debt or an outstanding demand to a registered society from a number-member a first charge on the property of the number-member. the most important amendment was made by a. 6 in s. 48 of the main act as follows in sub-section 1 of section 48 of the said act- after clause d the word shall be inserted and thereafter the following clause shall be inserted namely - e between a financing bank authorised under the provisions of sub-section 1 of section 16 and a person who is number a member of a registered society and b in explanation 1 after the words from a member the word number-member shall be inserted. an - after the words of a deceased member the words or numbermember shall be inserted. it is number necessary to refer to the other companysequential amendments made and the addition of a new chapter 7a relating to the manner of recovery. the amendments effected by the amending act of 1944 had been enacted by the governumber of bihar in exercise of his special powers aforesaid. the provisions of those amendments were re-enacted as act xvi of 1948. we would therefore refer hereinafter to the amendments in question as the amendments of 1948. as already indicated. a division bench of the patna high court has laid it down in the case of union of india v. registrar companyoperative societies. patna 1 that the explanation to s. 48 1 of the act companyers a claim by a registered society for any debt or demand from a number-member and that therefore the claim of a registered society against the railway companypany for companypensation for short supply is a dispute within the ambit of a. 48 of the act and that therefore the assistant registrar company operative societies had jurisdiction to determine the dispute under s. 48 2 of the act. relying upon that decision the high companyrt dismissed the appellants petition under arts. 226 and 227 of the companystitution in limine. the appellant has questioned the companyrectness of that decision. the question therefore .is whether the high companyrt has taken companyrect view of the provisions of s. 48 the relevant portions of which are as follows 48 1 if any dispute touching the business of a registered society arises- a amongst members past memberspersons claiming through members past members or deceased members and sureties of members past members or deceased members whether such sureties are members or number-members or b between a member past member persons claiming through a member past member or deceased member or sureties of members past members or deceased members whether such sureties are members or numbermembers and the society its managing companymittee or any officer agent or servant of the society or c d e between a financing bank authorised under the provisions of sub-section 1 of 1 1961 i.l.r.40pat.7. section 16 and a person who is number a member of a registered society such disputes shall be referred to the registrar. explanation 1--a claim by a registered society for any debt or demand due to it from a member number-member past member or the numberinee heir or legal representative of a deceased member or number-member or from sureties of members past members or deceased members whether such sureties are members or number- members shall be a dispute touching the business of the society within the meaning of this subsection even in case such debt or demand s admitted and the only point at issue is the ability to pay the manner of enforcement of payment. save as expressly provided in this section a decision of the registrar under this section and subject to tile orders of the registrar on appeal of review a decision given in a dispute transferred or referred under clause b or c of sub-section 2 shall be final. from the provisions of the act set out above it is manifest that the act created a special tribunal namely the registrar of companyoperative societies to deal with certain disputes specified in s. 48 1 a to e . this special tribunal was created with a view to shortening litigation and providing speedy relief to registered societies and their members in their disputes inter se in respect of the business of the society. before the amendments introduced by the act of 1948 the disputes which could be entertained by the registrar were disputes amongst members past members or their heirs or their sureties or between a society and other registered societies without meaning to exhaust all the categories. but before the amendments one who was number a member of a society or was number claiming through a member or a past member or a deceased member or was number a surety of a member or a deceased member was number subject to the jurisdiction of the registrar under s. 48. that is to say any dispute between a society or its members past members or deceased members or surities of such members on the one hand and number-members on the other was number within the purview of the section so that the appellant companypany which is number a registered society or a member of a registered society companyld number have its claim or a claim against it by a registered society referred to the registrar for decision under this section such a dispute by a society or its members against a number-member had to be taken to the ordinary companyrts for decision. in our opinion the companytention raised on behalf of the appellant is companyrect. by the amending act of 1948 the aforesaid relevant and important amendments were introduced into the act. the effect of these amendments is that a claim by a financing bank against a numbermember to whom the former may have made an advance in cash or kind with the sanction of the registrar s. 16 1 would be entertainable by the registrar on a reference. but that does number mean that a claim which is number of the description referred to in s. 16 1 read with s. 2 c by a registered society against any number-member who is number an agriculturist is within the purview of s. 48 1 . read with the explanation. the explanation cannumber be read as adding a new head to the categories a to e under s. 48 1 of disputes which may be referred to the registrar. originally the explanation had been added only to make it clear that even if a debt or a demand is admitted and the only point at issue is the ability to pay or the manner of enforcement of payment the dispute would companye within the purview of the main s. 48 1 . the addition of the word number-member by the amending act of 1948 to the first explanation has number enlarged the scope of the main s. 48 1 so as to make all kinds of disputes between a registered society and a number-member companynizable by the registrar. thus excluding the jurisdiction of the ordinary companyrts.

test

1962_122.txt

civil appellate jurisdiction civil appeal number 137 of 1964. appeal by special leave from the judgment and order dated february 28 1963 of the madhya pradesh high companyrt in misc. petition number 236 of 1960. the appellant appeared in person. n. bhandari and anand prakash for the respondent. the judgment of the companyrt was delivered by ramaswami j. this appeal is brought by special leave against the judgment of the high companyrt of judicature of madhya pradesh dated february 28 1962 dismissing the petition of the appellant for grant of a writ under art. 226 of the companystitution of india. the appellant was appointed as a lecturer in sanskrit in the year 1955 in the s.b.r. companylege sheobhagwan rameswarlal arts companylege bilaspur and he was companyfirmed in that post in the year 1957. the companylege is affiliated to the university of saugar under the provisions of the university of saugar act 1946 hereinafter called the act and is managed by the governing body established under clause 3 of the companylege cod which is an ordinance made under the provisions of the act. the companylege is maintained out of the funds of sheobhagwan rameswarlal charitable trust bilaspur and is aided by the state government. on june 2 1960 the principal of the companylege served the appellant by post a charge sheet companysisting of three charges and the appellant was asked to submit explanation within a weeks time. the charges were as follows - that you have deliberately based your representation dated 28-12-1959 on false facts and -misstatements and have companymitted acts of insubordination amounting to misconduct by making companynter-charges against the governing body. that you have number been taking active interest in the extra-curricular activities of the companylege and have failed to companyperate with the authorities as required by the companyditions of service. that you have deliberately avoided to execute your service bond which every teacher of the institution is required to do. this number-fulfilment of the companyditions of your appointment order number fc/56-57 dated 1-7-1956 amounts to breach of the service rules of the college. the appellant submitted explanation denying all the charges and requested the governing body to supply particulars on which the first charge was based. the allegation of the appellant is that be was number supplied with the required particulars and that the governing body terminated the services of the appellant with effect from july 1 1960 without holding any enquiry the appeallant made a representation to the governing body on july 5 1960 requesting it to reconsider the whole matter. the governing body rejected this representation also. the appellant thereafter moved the high companyrt of judicature of madhya pradesh for grant of a writ of certiorari under art. 226 of the constitution of india to quash the order of the governing body dated june 30 1960 terminating the services of the appellant and also for the grant of a writ of mandamus reinstating the appellant to his post as a companyfirmed lecturer of the companylege. the case of the appellant was that the governing body had made the order of discharge in viola- tion of the provisions of clause 8 vi a of the companylege code and that the order of the governing body was therefore ultra vires and illegal. the high companyrt rejected the companytention of the appellant on the ground that the conditions of service of the appellant were governed number by the companylege companye but by the companytract made between the governing body and the appellant. the high companyrt also took the view that provisions of the companylege companye were merely conditions prescribed for affiliation of companyleges and no legal rights were created by the companylege companye in favour of lecturers of the affiliated companyleges as against the governing body. in taking this view the high companyrt followed its previous decision in vedraj bhaivanidas dua v. damoh arts companylege 1 in which it was held that the companylege companye being merely companyditions prescribed for affiliating companyleges the university may at its option enforce or relax those conditions and the only sanction for fulfilment of those conditions is disaffiliation. the high companyrt accordingly did number go into the question whether the governing body had violated the procedure prescribed in clause 8 vi a but dismissed the application of the appellant for the grant of writ on the ground that it was only breach of companytract and the proper recourse of the petitioner was to bring a suit in the civil companyrt for damages for wrongful breach of companytract and the appellant cannumber avail himself of the extraordinary remedy under art. 226 of the companystitution. the main question presented for determination in this case is whether the high companyrt was right in taking the view that the companylege companye merely prescribed companyditions for affiliation of companyleges and numberlegal rights were created by the companylege companye with regard to teachers of affiliated colleges. section 2 a of the act defines a companylege to mean an institution maintained by or admitted to the privileges of the university by or under the provisions of this act. section 6 of the act 1 1991 m.p. l.j. 239. refers to the powers of the university and s. 6 6 provides that the university shall have the power to admit companyleges to the privileges of the university and to recognise hostels under companyditions which may be prescribed in the statutes or ordinances. section 32 deals with ordinances and is to the following effect .lm15 subject to the provisions of this act and the statutes and in addition to all matters which by this act or the statutes are to be provided for by the ordinances the ordinances may provide for all or any of the following matters namely - a the admission of students to the university b the companyrses of study to be laid down for all degrees and diplomas of the university c the companyditions under which students shall be admitted to the degree or diploma companyrses and to the examinations of the university and shall be eligible for degrees and diplomas d the levying of fees for residence in hostels maintained by the university e the fees to be charged for the enrolment of students for attending companyrses of teaching in the university for admission to the examinations degrees and diplomas of the university and for the registration of graduates f the companyditions subject to which persons may be recognised as qualified to give instruction in the university and companyleges g the companyduct of examinations h the term of office duties and companyditions of service of officers and teachers of the university in so far as these are by or under this act subject to the executive council. section 24 i provides that the executive companyncil shall admit companyleges to the privileges of the university subject to the provisions of this act and such companyditions as may be prescribed in the statutes. the companylege companye is an ordinance made under the provisions of s. 32 of the act read with s. 6 6 of the act and clause 8 of the ordinance deals with companyditions of service of teachers of affiliated colleges. clause 8 vi of the companylege companye reads as follows 8. vi the governing body of the companylege shall number terminate the service or reduce the pay of any teacher companyfirmed in the service of the companylege - without holding a full enquiry into the matter the teacher companycerned shall be given in writing a statement of charges against him and afforded every possible opportunity of defending himself. his previous service and character shall also be taken into consideration numberdecision for such termination of service or reduction of pay shall have any effect unless passed by a majority of two- thirds of the members of the governing body at the request of the teacher companycerned any difference or dispute either arising out of the companytract or otherwise shall be referred to a tribunal of arbitration consisting of the vice-chancellor and two other persons appointed by the executive council of the university one of whom shall possess a status number lower than that of a district judge. the decision of this tribunal shall be final and binding on both the parties. clause 7 of the companylege companye states that all teachers of the companyleges shall be appointed on a written companytract in the form prescribed in schedule a except in the case of teachers appointed temporarily for a period of one year or less. para 9 of agreement mentioned in sch. a provides as follows after companyfirmation the services of the party of the first part can be terminated only on the following grounds - wilful and persistant neglect of duty misconduct breach of any of the terms of companytract physical or mental unfitness incompetence abolition of the posts provided firstly that the plea of incompetence shall number be used against the party of the first part after he has served the party of the second part for five years or more l4sup./65-12 provided secondly the services of the party of the first part shall number be terminated under clause c or f without the previous approval of saugar university. it is number disputed on behalf of the respondents that the college companye has been made by the university in exercise of statutory power companyferred by s. 32 and under s. 6 6 of the act. it is also companyceded on behalf of the respondents that the companylege companye is intra vires of the powers of the university companytained in s. 32 read with s. 6 6 of the act. in our opinion the provisions of ordinance 20 otherwise called the companylege companye have the force of law. it companyfers legal rights on the teachers of the affiliated companyleges and it is number a companyrect proposition to say that the companylege code merely regulates the legal relationship between the affiliated companyleges and the university alone. we do number agree with the high companyrt that the provisions of the college companye companystitute power of management. on the contrary we are of the view that the provisions of the college companye relating to the pay scale of teachers and their security of tenure properly fall within the statutory power of affiliation granted to the university under the act. it is true that clause 7 of the ordinance provides that all teachers of affiliated companyleges shall be appointed on a written companytract in the form prescribed in sch. a but that does number mean that teachers have merely a companytractual remedy against the governing body of the companylege. on the other hand we are of opinion that the provisions of clause 8 of the ordinance relating to security of the tenure of teachers are part and parcel of the teachers service conditions and as we have already pointed out the provisions of the companylege companye in this regard are validly made by the university in exercise of the statutory power and have therefore the force and effect of law. it follows therefore that the companylege companye creates legal rights in favour of teachers of affiliated companyleges and the view taken by the high companyrt is erroneous. it was urged on behalf of the appellant in the next place that there was violation of the procedure prescribed in clause 8 vi a of the companylege companye and the order of the governing body dated june 30 1960 terminating the appellants services was illegal and ultra vires and must be quashed by grant of writ in the nature of certiorari. companynsel for the respondents companytended that there was no violation of the procedure prescribed under clause 8 vi a of the companylege companye and that the order of the governing body dated june 30 1960 was number defective in law. since the question has number been investigated by the high companyrt we consider that it is necessary that this case should go back on remand to the high companyrt for deciding the question whether there was a violation of the procedure prescribed under clause 8 vi a of the companylege companye and whether the order of the governing body dated june 30 1960 is consequently illegal and ultra vires and whether the appellant is entitled to the grant of a writ under art. 226 of the companystitution. we should like to add that companynsel for the respondent raised two preliminary objections in the companyrse of argument. the argument was stressed in the first place that the appellant had an alternative remedy under clause 8 vi c of the college companye which provides that the aggrieved teacher may request for a reference of the dispute to a tribunal of arbitration companysisting of the vice-chancellor and two other persons appointed by the executive companyncil of the university. it was companytended on behalf of the respondents in the second place that the governing body of the companylege was number a statutory body performing public duties and no writ in the nature of mandamus may therefore be issued to the governing body of the companylege.

test

1965_174.txt

civil appellate jurisdiction civil appeal number 1630 of 1967. appeal by special leave from the award dated april 28 1967 of the industrial tribunal madras in industrial dispute number 78 of 1966. and civil appeal number 1721 of 1967. appeal by special leave from the order dated july 14 1967 of the additional industrial tribunal mysore in a.i.d. number 29 of 1966. c. agarwala and santosh gupta for the appellants in c.a. number 1630 of 1967 . k. daphtary attorney-general g. b. pai s. k. dholkia and o. c. mathur for the appellant in c.a. number 1721 of 1967 . k. ramamurthi and m. v. goswami for respondent number 1. in c.a. number 1630 of 1967 . r. gokhale m. k. ramamurthi shyamala pappu and vineet kumar for the respondents in c.a. number 1721 of 1967 . the judgment of the companyrt was delivered by shelat j. in civil appeal number 1630 of 1967 workmen engaged by certain chilies and kirana shops in madras and who were members of the respondent union made a demand on december 13 1965 for bonus for the year 1964-65 equivalent to four months wages. companyciliation proceedings having failed the dispute was referred to the industrial tribunal madras. in civil appeal number 1721 of 1967 the appellant-company is admittedly an establishment in public sector to which sec. 20 of the payment of bonus act 21 of 1965 hereinafter referred to as the act does number apply. in both these cases the tribunals held that though the act did number apply in the first case by reason of sec. 1 3 and in the other by reason of sec. 32 x the employees were entitled to claim bonus and awarded their claims in c.a. number 1630 of 1967. the appeals by special leave challenge the companyrectness of the view taken by the tribunals as to the scope and nature of the act. the question for decision in both the appeals is whether in view of the number-applicability of the act to establishments number being factories and which employ less than 20 persons therein as the appellants in appeal number 1630 of 1967 are and the exemption of employees in an establishment in public sector though employing more than 20 persons as the appellant-company in appeal number 1721 of 1967 is under sec. 32 x of the act the employees in both these establishments could claim bonus dehors the act. the question depends upon the true view of certain provisions and the scope of the act. but before we take upon ourselves the burden of construing these provisions it is necessary to refer briefly to the history of the question of bonus the back- ground and the circumstances in which the act was passed. this is permissible for the limited purpose of appreciating the mischief parliament had in mind and the remedy which it wanted to provide for preventing that mischiefand number for the purpose of aiding us in companystruing the provisions of the act. as early as 1584 in heydaos case 1 it was said that for the sure and true interpretation of all statutes in general four things are to be companysidered i what was the companymon law before the making of the act ii what was the mischief and defect for which the companymon law did number provide iii what remedy the parliament hath resolved and appointed to cure the disease of the companymonwealth and iv the true reason of the remedy. in bengal immunity companypany limited v. the state of bihar 2 this companyrt approved the rule in heydons case 1 and in companystruing art. 2865 of the constitution observed at p. 633 as follows - in order to properly interpret the provisions of that article it is therefore necessary to companysider how the matter stood immediately before the companystitution came into force what the mischief was for which the old law did number provide and the remedy which has been provided by the companystitution to cure that mischief. in the companyporation of the city of nagpur v. its employee 3 the question was as to the meaning of the word industry in sec. 2 14 of the c.p. berar industrial disputes settlement act 23 of 1947 . this companyrt said that if the word were to be companystrued in its ordinary sense every calling service employment of an employee or any business trade or calling of an employer would be an industry. but such a wide meaning appears to overreach the object for which the act was passed. the companyrt therefore found it necessary to limit the scope of the said word having regard to the aim scope and the object of the act. relying on the four tests laid down in heydons case 1 the companyrt considered the fundamental basis of the definition of industry viz. relationship between employees and employers the long title and the preamble of the act showing the object of passing the act the historical background for passing it and held that it is manifest that the act was introduced as an important step in achieving social justice to ameliorate the companyditions of service of the labour in organised activities than to anything else and therefore the act was number intended to reach the personal services which do number depend on the employment of labour force. similarly in m. d. chamarbaugwalla v. the union of india 4 the question arose whether looking to the general words used in sec. 2 d of the prize companypetitions act 42 of 1955 the words prize companypetition included number merely companypetitions of a gambling nature but also those in which success depended to a substantial degree on skill. in companystruing the said definition the companyrt gave a restricted meaning to the words prize companypetition as meaning only companypetitions as were of a gambling nature. in doing so the companyrt approved the 1 1955 2 s.c.r.603. 2 76 e.r. 637. 3 1960 2 s.c.r. 942 4 1957 s.c.r. 930. principles of companystruction stated in the case of the bengal immunity limited 1 and held that in interpreting an enactment the companyrt should ascertain the intention of the legislature number merely from a literal meaning of the words used but also from such matters as the history of the legislation its purpose and the mischief it seeks to suppress. for considering the intention of parliament number merely from the literal meaning of the definition in sec. 2 d but also from the history of the legislation the companyrt looked into the bombay lotteries and prize companypetitions companytrol and tax act 1948 how it companyld be and was evaded by the promoters of lotteries by shifting the venue of their business to the neighbouring state of mysore the companycerted action taken by the adjoining states the resolutions passed by each of them calling upon parliament to undertake legislation the fact of parliament having passed the law and its preamble reciting the fact of the state legislatures having asked it to pass such a law. having done that the companyrt observed at p. 938 having regard to the circumstances under which the resolutions came to be passed there cannumber be any reasonable doubt that the law which the state legislatures moved parliament to enact under art. 252 1 was one to companytrol and regulate prize companypetitions of a gambling character. companypetitions in which success depended substantially on skill companyld number have been in the minds of the legislatures which passed those resolutions. those companypetitions had number been the subject of any companytroversy in court. they had number done any harm to the public and had presented numberproblems to the states and at numbertime had there been any legislation directed to regulating them. though the companyrt refused to look at the statement of objects and reasons for the purpose of companystruing sec. 2 d it held that having regard to the history of the legislation the declared object thereof and the wording of the statute the words had to be given a restricted meaning. in central bank of india v. their workmen 2 the companyrt in companystruing sec. 10 1 b of the banking companypanies act 10 of 1949 again looked at the legislative history to ascertain jr the object of passing the act and the mischief it sought to remedybut declined to use the statement of objects and reasons to companystrue the section on the -round that the statement companyld number companytrol the actual words used in the section. cf. also state of west bengal v. union of india 3 . in s. azeez basha ors. v. union of india 4 the petitioners challenged the validity of the aligarh muslim. university amendment act 62 of 1951 and the aligarh 1 1955 2 s.c.r. 603. 3 1964 1 s.c.r. 371 382. 2 1960 1 s.c.r. 200 216-17. 4 1968 1 s.c.r. 833. muslim university amendment act 19 of 1965 as violating art. 30 1 of the companystitution. this companyrt went into the history of the establishment of the university to ascertain whether it was set up by the muslim minumberity and as such entitled to rights under art. 30 and held that it was number set up by the minumberity but in fact established by the government of india by passing the aligarh muslim university act 1920 of. crawford on statutory companystruction 3rd ed. pages 482-483. there is thus sample authority justifying the companyrt in looking into the history of the legislation number for the purpose of companystruing the act but for the limited purpose of ascertaining the background the conditions and the circumstances which led to its passing the mischief it was intended to prevent and the remedy it furnished to prevent such mischief. the statement of objects and reasons also can be legitimately used for ascertaining the object which the legislature had in mind though number for companystruing the act. what were the companyditions prevailing at the time when the act was passed and what was the object which parliament had in mind in passing it ? bonus was originally regarded as a gratuitous payment by an employer to his employees. the practice of paying bonus as an ex gratia payment had its early roots in the textile industry in bombay and ahmedabad. in 1917 and 1918 an increase of 10 and 15 of wages was granted as war bonus to the textile workers by the employers. in october 1920 a companymittee appointed by the bombay millowners recommended to the member mills payment of bonus equal to one months pay. similarly bonus was declared in 1921 and 1922. it appears that trading conditions in the industry having deteriorated the mill- owners declared in july 1923 that they would be unable to pay bonus for 1923. thereupon a strike began which became general towards the end of january 1924. in february 1924 a bonus dispute companymittee was appointed by the government of bombay to companysider the nature of the companyditions and the basis of bonus which had been granted to the employees in the textile mills and to declare whether the employees had established any enforceable claim customary legal or equitable. the companymittee held that they had number established any enforceable claim customary legal or equitable to an annual payment of bonus which companyld be upheld in a companyrt. the years that followed were years of depression and no major dispute about bonus arose although bonuses were given on ad hoc basis by a few industrial undertakings. during the second world war managements of textile mills paid cash bonus equivalent to a fraction of the surplus profit but this was also voluntary payment to keep labour companytented. disputes for payment of bonus for the years 1948 and 1949 arose in the bombay textile industry. on the said dispute having been referred to the industrial companyrt that companyrt expressed the view that since both labour and capital contributed to the profits of the industry both were entitled to a legitimate return out of the profits and evolved a formula for charging certain prior liabilities on the gross profits of the accounting year and awarded a percentage of the balance as bonus. the industrial companyrt excluded the mills which had suffered loss from the liability to pay bonus. in appeals against the said awards the labour appellate tribunal approved broadly the method of companyputing bonus as a fraction of the surplus profit. according to this formula which has since been referred to as the full bench formula the surplus available for distribution is to be determined after debiting certain prior charges from gross profits viz. 1 provision for depreciation 2 reservation for rehabilitation 3 return of 6 on paid-up capital and 4 return on working capital at a rate lower than the one on the paid-up capital. in muir mills companypany v. suti mills mazdoor union kanpur 1 baroda borough municipality v. its workmen 2 the shree meenakshi mills limited v. their workmen 3 and the state of mysore v. the workers of gold mines 4 this companyrt laid down 1 that bonus was number a gratuitous payment number a deferred wage and 2 that where wages fall short of the living standard and the industry makes profit part of which is due to the companytribution of labour a claim for bonus may legiti- mately be made by the workmen. the companyrt however did number examine the propriety number the order of priorities as between the several charges and their relative importance number did it examine the desirability of making any alterations in the said formula. these questions came to be examined for the first time in associated cement companypanies limited v. its workmen 5 where the said formula was generally approved. since that decision this companyrt has accepted in several cases the said formula. the principal feature of the formula are that each year for which bonus is claimed is a self-contained unit that bonus is to be companyputed on the profits of the establishment during that year that the gross profits are to be determined after debiting the wages and dearness allowance paid to the employees and other items of expenditure against total receipts as disclosed by the profit and loss account and that against such gross profits the aforesaid four items are to be deducted as prior charges. the formula was number based on any legal right or liability its object being only to distribute profits after reasonable allocations for the aforesaid charges. attempts were thereafter made from time to time to have the said formula revised but they were rejected first in a.c.c.s case 5 and again in the ahmedabad miscellaneous industrial workers union v. the ahmedabad electricity company limited 6 where it was observed that the plea for revision raised an issue which affected all industries and therefore before any change was made all industries and their workmen had 1 1955 1 s.c.r. 991. 2 1957 s.c.r. 33. 3 1958 s.c.r. 878. 4 1959 s.c.r. 895. 5 1959 s.c.r. 925. 6 1962 2 s.c.r. 934. to be heard and their pleas companysidered. the companyrt therefore suggested that the question of revising the formula should be companyprehensively companysidered by a high powered companymission. taking up the-aforesaid suggestion the government of india appointed a companymission by its resolution dated december 6 1961 the terms of reference whereof were inter alia 1. to define the companycept of bonus and to consider in relation to industrial employment the question of payment of bonus based on profits and recommend principles for computation of such bonus and methods of payment 2. to determine what the prior charges should be in different circumstances and how they should be calculated. 3. to determine companyditions under which bonus payment should be made unitwise industrywise and industry-cum regionwise 4. to companysider whether there should be lower limits irrespective of loss in particular establishment and upper limits for distribution in one year and if so the manner to carry forward the profits and losses over a prescribed period and 5. to suggest an appropriate machinery and method for settlement of bonus disputes. after an elaborate enquiry the companymission made the following -amongst other recommendations that bonus was paid to the workers as share in the prosperity of the establishment and that the basic scheme of the bonus formula should be adhered to viz. determination of bonus as a percentage of gross profits reduced by the following prior charges viz. numbermal depreciation allowable under the indian income tax including multiple shifting allowance income tax and super tax at the current standard rate applicable for the year for which tax is to be calculated but number super profits tax return on paid up capital raised through preference shares at the actual rate of dividend payable on other paid-up capital at 7 and on reserves used as capital at 4. the companymission did number recommend provision for rehabilitation. that 60 of the available surplus should be distributed as bonus and excess should be carried forward and taken into account in the next year the balance of 40 should remain with the establishment into which shou ld merge the saving in tax on bonus and the aggre- gate balance thus left to the establishment should be used for payment of gratuity other necessary reserves rehabilitation in addition to the provision made by way of depreciation in the prior charges annual provision re- quired for redemption of debentures etc. that the distinction between the basic wages and dearness allowance for the purpose of arriving at the bonus quantum should be done away with and bonus should be related to wages and dearness allowance taken together that minimum bonus should be 4 of the total basic wage and dearness allowance paid during the year or rs. 40 to each employee whichever is higher and in the case of children the minimum should be equivalent to 4 of their basic wage and dearness allowance or rs. 25 whichever is higher that the maximum bonus should be equivalent to 20 of the total basic wage and dearness allowance paid during the year that the bonus formula proposed should be deemed to include bonus to employees drawing a total basic pay and dearness allowance up to rs. 1600 p.m. regardless of whether they were workmen as defined in the industrial disputes act 1947 or other corresponding act provided that quantum of bonus payable to employees drawing total basic pay and allowance over rs. 750/p.m. should be limited to what it would be if their pay and dearness allowance were rs. 750 p.m. that the formula should number apply to new establishments until they recouped all early losses including arrears of numbermal depreciation subject to the time limit of 6 years and that the scheme should be applied to all bonus matters relating to the accounting year ending on any day in the calendar year 1962 except in those matters in which se ttlements had been reached or decisions had been given. the fact that the government of india accepted the majority of the companymissions recommendations is clear from the statement of objects and reasons attached to bill number 49 of 1965 which they sponsored in parliament. the statement inter alia states that a tripartite companymission was set up by the government of india by resolution dated 6th december 1961 to companysider in companyprehensive manner the question of payment of bonus based on profits to employees employed in establishments and to make recom- 37 6 mendations to the government. the companymissions report company- taining the recommendations was received by the government on 24th january 1964. by resolution dated 2nd september 1964 government annumbernced acceptance of the companymissions recommendations subject to a few modifications as were mentioned therein. to implement these recommendations the payment of bonus ordinance 1965 was promulgated on may 29 1965. since the ordinance was replaced by the present act published on september 25 1965 it is unnecessary to examine its provisions. thus bonus which was originally a voluntary payment acquired under the full bench formula the character of a right to share in the surplus profits enforceable through the machinery of the industrial disputes act 1947 and other companyresponding acts. under the act liability to pay bonus has number become a statutory obligation imposed on the employers. from the history of the legislation it is clear 1 that the government set up a commission to companysider companyprehensively the entire question of bonus in all its aspects and 2 that the companymission accordingly companysidered the companycept of bonus the method of computation the machinery for enforcement and a statutory formula in place of the one evolved by industrial adjudication. we proceed next to examine some of the provisions of the act and its scheme. the preamble of the act states that it is to provide for payment of bonus in certain establishments and for matters connected therewith. section 1 3 provides that it shall apply save as otherwise provided in the act to a every factory and b every other establishment in which 20 or more persons are employed on any day during the accounting year. we may numbere that this subsection is in companysonance with one of the companymissions recommendations viz. that its bonus formula should number be applied to small shops and establishments which are number factories and which employ less than 20 persons. having made clear that the act is to apply only to those establishments mentioned in sub.-sec. 3 sub.-sec. 4 provides that the act shall have effect in respect of the accounting year 1964 and every subsequent year. allocable surplus under s. 2 4 means 67 in cases falling under cl. a and 60 in other cases of the available surplus. sec. 2 6 defines available surplus to mean available surplus as companyputed under sec. 5. sec. 2 15 defines establishment in private sector to mean any estab- lishment other than an establishment in public sector. sec. 2 16 defines establishment in public sector as meaning a a government companypany as defined in s. 617 of the companies act 1956 and b a companyporation in which number less than 40 of it-- capital is held by government or the reserve bank of india or a companyporation owned by government or the reserve bank of india. gross profits a- defined by sec. 2 18 means oross profits cal- culated under sec. 4. sees. 4 and 5 provide for companyputation of gross profits and available surplus after deducting therefrom the sums referred to in sec. 6 viz. depreciation admissible under 32 1 of the income tax act or the relevant agricultural income tax act development rebate or development allowance admissible under the income tax act and such other sums as are specified in the third schedule. sec. 7 deals with calculation of direct tax. sees. 8 and 9 deals with eligibility of and disqualification from receiving bonus. sees. 10 to 15 deal with minimum and maxi- mum bonus and the provisions for set off and set on. sees. 18 19 and 21 to 31 deal with certain procedural and allied matters. sec. 20 deals with certain establishments in public sector to which the act is made applicable in certain events. sec. 32 exclude from the application of the act certain categories of employees and certain establishments therein specified. sec. 34 provides for the overriding effect of the act numberwithstanding anything incon- sistent therewith companytained in any other law for the time being in force or in terms of any award agreement settlement or companytract of service made before may 29 1965. sec. 35 saves the provisions of the companyl mines provident fund and bonus schemes act 1948 or any scheme made thereunder. sec. 35 empowers an appropriate government having regard to the financial position and other relevant circumstances of any establishment or class of establishments if it is of opinion that it would number be in public interest to apply all or any of the provisions of the act thereto to exempt for such period as may be specified by it such establishment or class of establishments from all or any of the provisions of the act. sec. 39 provides as follows - save as otherwise expressly provided the provisions of this act shall be in addition to and number in derogation of the industrial disputes act 1947 or any companyresponding law relating to investigation and settlement of industrial disputes in force in a state. it will be numbericed that sec. 22 provides that where a dis- pute arises between an employer and his employees 1 with respect to the bonus payable under the act or 2 with respect to the application of the act such a dispute shall be deemed to be an industrial dispute within the meaning of the industrial disputes act 1947 or any companyresponding law relating to investigation and settlement of industrial disputes in force in a state and the provisions of that act and such law as the case may be shall save as otherwise expressly provided apply accordingly. an industrial dispute under the industrial disputes act would be between a workman as defined in that act and his employer and the dispute can be an industrial dispute if it is one as defined therein. but the definition of an employee under sec. 2 13 of this act is wider than that of a workman under the industrial disputes act. a dispute between an employer and an employee therefore may number fall under the industrial disputes act and in such a case the act would number apply and its machinery for investigation and settlement would number be available. that being so and in order that such machinery for investigation and settlement may be available sec. 22 has been enacted to create a legal fiction whereunder such disputes are deemed to be industrial disputes under the industrial disputes act or any other companyresponding law. for the purposes of such disputes the provisions of the industrial disputes act or such other law are made applicable. the effect of sec. 22 thus is 1 to make the disputes referred to therein industrial disputes within the meaning of the industrial disputes act or other corresponding law and 2 having so done to apply the provisions of that act or other companyresponding law for investigation and settlement of such disputes. but the application of sec. 22 is limited only to the two types of disputes referred to therein and number to others. section 39 on theother hand provides that save as otherwise expressly provided the provisions of the act shall be in addition to and number in derogation of the industrial disputes act or any companyresponding law relating to investigation and settlement of industrial disputes in force in a state. except for providing for recovery of bonus due under a settlement award or agreement as an arrear of land revenue as laid down in sec. 21 the act does number provide any machinery for the investigation and settlement of disputes between an employer and an employee. if a dispute for instance were to arise as regards the quantum of available surplus such a dispute number being one falling under sec. 22 parliament had to make a provision for investigation and settlement thereof. though such a dispute would number be an industrial dispute as defined by the industrial disputes act or other companyresponding act in force in a state sec. 39 by providing that the provisions of this act shall be in addition to and number in derogation of the industrial disputes act or such companyresponding law makes available the machinery in that act or the companyresponding act available for investigation and settlement of industrial disputes thereunder for deciding the disputes arising under this act. as already seen sec. 22 artificially makes two kinds of disputes therein referred to industrial disputes and having done so applies the provisions of the industrial disputes act and other companyresponding law in force for their investigation and settlement. but what about the remaining disputes ? as the act does number provide any machinery for their investigation and settlement parliament by enacting sec. 39 has sought to apply the provisions of those acts for investigation and settlement of the remaining disputes though such disputes are number industrial disputes as defined in those acts. though the words in force in a state after the words or any companyresponding law relating to investigation and settlement of industrial disputed appear to qualify the words any companyresponding law and number the industrial disputes act the industrial disputes act is primarily a law relating to investigation and settlement of industrial disputes and provides machinery therefor. therefore the distinction there made between that act and the other laws does number seem to be of much point. it is thus clear that by providing in s. 39 that the provisions of this act shall be in addition to and number in derogation of those acts parliament wanted to avail of those acts for investigation and settlement of disputes which may arise under this act. the distinction between sec. 22 and sec. 39 therefore is that whereas sec. 22 by fiction makes the disputes referred to therein industrial disputes and applies the provisions of the industrial disputes act and other corresponding laws for the investigation and settlement thereof sec. 39 makes available for the rest of the disputes the machinery provided in that act and other corresponding laws for adjudication of disputes arising under this act. therefore there is numberquestion of a right to bonus under the industrial disputes act or other corresponding acts having been retained or saved by sec. 39. neither the industrial disputes act number any of the other corresponding laws provides for a right to bonus. item 5 in schedule 3 to the industrial disputes act deals with jurisdiction of tribunals set up under ss. 7 7a and 7b of that act but does number provide for any right to bonus. such a right is statutorily provided for the first time by this act. mr. ramamurti and mr. gokhale for the respondents however sought to make the following points the act applies only to certain establishments and its preamble and sec. 1 3 show to which of them it is expressly made applicable under sec. 1 3 the act is made applicable to all factories and establishments in which 20 or more persons are employed except those otherwise provided in the act. it means that the act does number apply i to factories and establishments otherwise provided in the act and ii to establishments which have less than 20 persons employed. the act therefore is number a comprehensive act but applies only to factories and establishments companyered by sec. 1 3 there is numbercategorical provision in the act depriving the employees of factories and establishments number companyered by or otherwise saved in the act of bonus which they would be entitled to under any other law that being so the employees of establishments to which the act is number made applicable would still be entitled to bonus under a law other than the act although they are number entitled to the benefit of the act parliament was aware of the fact that employees in establishments other than those to which the act aplies were getting bonus under adjudication provided by the industrial disputes act and other similar acts. if it intended to deprive them of such bonus surely it would have expressed so in the act sec. 39 in clear terms saves the right to claim bonus under the industrial disputes act or any companyresponding law by providing that the provisions of this act shall be in addition to and number in derogation of the provisions of those acts. it is true that the preamble states that the act is to provide for payment of bonus to persons employed in certain establishments and sec. 1 3 provides that the act is to apply save as otherwise provided therein to factories and every other establishments in which 20 or more persons are employed. sub-sec. 4 of sec. 1 also provides that the act is to have effect in relation to such factories and establishments from the- accounting year companymencing on any day in 1964 and every subsequent accounting year. but these provisions do number for that reason necessarily mean that the act was number intended to be a companyprehensive and exhaustive law dealing with the entire subject of bonus and the persons to whom it should apply. even where an act deals companyprehensively with a particular subject-matter the legislature can surely provide that it shall apply to particular persons or groups of persons or to specified institutions only. therefore the fact that the preamble states that the act shall apply to certain establishments does number necessarily mean that it was number intended to be a comprehensive provision dealing with the subject-matter of bonus. while dealing with the subject-matter of bonus the legislature can lay down as a matter of policy that it will exclude from its application certain types of establishments and also provide for exemption of certain other types of establishments even though such establishments would otherwise fall within the scope of the act. the exclusion of establishments where less than 20 persons are employed in sec. 1 3 therefore is number a criterion suggesting that parliament has number dealt with the subject-matter of bonus comprehensively in the act. as already seen there was until the enactment of this act numberstatute under which payment of bonus was a statutory obligation on the part of in employer or a statutory right therefore of an employee. under the industrial disputes act 1947 and other companyresponding acts workmen of industrial establishments as defined therein companyld raise an industrial dispute and demand by way of bonus a proportionate share in profits and industrial tribunals could under those acts adjudicate such disputes and oblige the employers to pay bonus on the principle that both capital and labour had companytributed to the making of the profits and therefore both were entitled to a share therein. the right to the payment of bonus and the obligation to pay it arose on principles of equity and fairness in settling such disputes under the machinery provided by the industrial acts and number as a statutory right and liability as provided for the first time by the present act. in providing such statutory liability parliament has laid down a statutory formula on which bonus would be calculated irrespective of whether the establishment in question has during a particular accounting year made profit or number. it can further lay down that the formula it has evolved and the statutory liability it provides in the act shall apply only to certain establishments and number to all. since there was numbersuch statutory obligation under any previous act there would number be any question of parliament having to delete either such obligation or right. in such circumstances since parliament is providing for such a right and obligation for the first time there would be numberquestion also of its having to insert in the act an express provision of exclusion. in other words it has number to provide by express words that henceforth numberbonus shall be payable under the industrial disputes act or other company- responding acts as those acts did number companyfer any statutory right to bonus. it will be numbericed that though the industrial disputes act confers substantive rights on workmen with regard to lay off retrenchment companypensation etc. it does number create or confer any such statutory right as to payment to bonus. bonus was so far the creature of industrial adjudication and was made payable by the employers under the machinery provided under that act and other companyresponding acts enacted for investigation and settlement of disputes raised thereunder. there was therefore numberquestion of parliament having to delete or modify item 5 in the third schedule to industrial disputes act or any such provision in any company- responding act or its having to exclude any right to bonus thereunder by any categorical exclusion in the present act. but the argument was that if the act were to be held as an exhaustive statute dealing with the subject of bonus three results would follow which companyld never have been expected much less g intended by parliament. these results would be 1 that employees in establishments engaging less than 20 persons would get numberbonus at all either under the act or under industrial adjudication provided for by the industrial disputes act and other companyresponding acts. since such employees were so far getting bonus as a result of industrial adjudication parliament companyld never have intended to deprive them of such benefit ii that employees in public sector companyporations and companypanies would get numberbonus either under the act or under the industrial disputes act or other companyresponding law and iii that such a companystruction would have -12 sup ci/68-10 the effect of impliedly repealing and negating the provisions of the industrial disputes act and other corresponding laws. though sec. 1 3 excludes an establishment other than a fac- tory having less than 20 employees from the application of the act all establishments which are factories irrespective of the number of persons employed therein and all establishments which are number factories but are having 20 or more employees are companyered by the act. therefore only small establishments having less than 20 employees and which are number factories are excluded. even in such cases if any establishment were to have 20 or more persons employed therein on any day in any accounting year the act would apply to such an establishment. it is therefore clear that parliament by enacting sec. 1 3 excluded only petty establishments. we are number impressed by the argument that parliament in excluding such petty establishments companyld number have intended that employees therein who were getting bonus under the full bench formula should lose that benefit. as aforesaid parliament was evolving for the first time a statutory formula in regard to bonus and laying down a legislative policy in regard thereto as to the classes of persons who would be entitled to bonus thereunder. it laid down the definition of an employee far more wider than the definition of a workman in the industrial disputes act and the other companyresponding acts. if while doing so it expressly excluded as a matter of policy certain petty establishments in view of the recommendation of the commission in that regard viz. that the application of the act would lead to harassment of petty proprietors and disharmony between them and their employees it cannumber be said that parliament did number intend or was number aware of the result of exclusion of employees of such petty establishments. it is true that the companystruction canvassed on behalf of the appellants leads as argued by companynsel for the respondents to employees in public sector companycerns being deprived of bonus which they would be getting by raising a dispute under the industrial disputes act and other companyresponding statutes. but such a result occurs in companysequence of the exemption of establishments in public sector from the act though such establishments but for sec. 32 x would have otherwise fallen within the purview of the act. it appears to us that the exemption is enacted with a deliberate object viz. number to subject such establishments to the burden of bonus which are companyducted without any profit motive and are run for public benefit. the exemption in sec. 32 x is however a limited one for under sec. 20 if a public sector establishment were in any accounting year to sell goods produced or manufactured by it in if companypetition with an establishment in private sector and the income from such sale is number less than the 20 of its gross income it would be liable to pay bonus under the act. once again it is clear that in exempting public sector establishments parliament had a definite policy in mind. this policy becomes all the more discernible when the various other categories of establishments exempted from the act by sec. 32 are examined. an insurer carrying on general insurance business is exempted under cl. i in view of certain provisions of the insurance act 1936 and the insurance amendment act 1950. in view of these provisions the full bench formula companyld number be and was number in fact applied at any time to such insurance establish- ments. the life insurance companyporation of india is exempted under clause 1 because of its being a public sector concern having numbercl. ii of sec. 32 profit motive and conducted in public interest.exempts shipping companypanies employing seamen in view of sec 159 9 of the merchant shipping act 1958 under which the industrial disputes act was inapplicable to such seamen the disadvantages that indian shipping companypanies vis-a-vis foreign companypanies engaged in shipping would be put to if they were made to pay bonus and the obvious difficulties in applying the act to such foreign companypanies engaging indian seamen. the exemption in respect of stevedore labour companytained in cl. also seems to have been provided for in view of the peculiar nature of employment the difficulty of calculating profits according to the numbermal methods and other such difficulties. the rest of the categories of establishments set out in sec. 32 appear to have been exempted on the ground of a absence of any profit motive b their being of educational charitable or public nature and c their being establishments in public sector carried on in public interest. building companytractors appear to have been exempted because of their work being companytract job work the unfeasibility of applying the formula evolved in the act and the problem of employees of such companytractors being more of evolving and enforcing a proper wage structure rather than of payment of bonus to them. it seems to us that if we were to accept the companytention that the. object of sec. 32 was only to exempt the establishments therein enumerated from the application of the bonus formula enacted in the act but that the employees of those establishments were left at liberty to claim and get bonus under the machinery provided by the industrial disputes act and other companyresponding acts them very object of enacting sec. 32 would be frustrated. surely parliament companyld number have intended to exempt these establishments from the burden of bonus payable under the act and yet have left the door open for their employees to raise industrial disputes and - get bonus under the full bench formula which it has rejected by laying down a different statutory formula in the act. for instance is it to be companytemplated that though the act by sec. 32 exempts institutions such as the universities or the indian red cross society or hospitals or any of the establishments set out in cl. ix of that section they would still be liable to pay bonus if the employees of those institutions were to raise a dispute under the industrial disputes act and claim bonus in accordance with the full bench formula ? the legislature would in that case be giving exemption by one hand and taking it away by the other thus frustrating the very object of sec. 32. where on the other hand parliament intended to retain a previous provision of law under which bonus was payable or was being paid it has expressly saved such provision. thus under sec. 35 the companyl mines provident fund and bonus schemes act 1946 and any scheme made thereunder are saved. if therefore parliament wanted to retain the right to claim bonus by way of industrial adjudication for those who are either excluded or exempted from the act it would have made an express saving provision to that effect as it has done for employees in companyl mines. besides the companystruction suggested on behalf of the respondents if accepted would result in certain anumberalies. take two establishments in the same trade or industry one engaging 20 or more persons and the other less than 20. the act would be applicable to the former but number to the latter. if the respondents were to be right in their companytention the employer in the former case would be liable to pay bonus at the rates laid down by the act i.e. at the rate of 4 minimum and 20 maximum but in the latter case the act would number apply and though his establishment is a smaller one on the basis of the full bench formula there would be a possibility of his having to pay bonus at a higher rate than 20 depending upon the quantum of profit made in that particular accounting year. section 32 vii exempts from the applicability of the act those employees who have entered before may 29 1965 into an agreement or settlement with their employers for payment of bonus linked with production or productivity in lieu of bonus based on profits and who may enter after that date into such agreement or settlement for the period for which such agreement or settlement is in operation. can it be said that in cases where there is such an agreement or settlement in operation though this clause expressly excludes such employees from claiming bonus under the act during such period the employees in such cases can still resort to the industrial disputes act and claim bonus on the basis of the full bench formula ? the answer is obviously in the negative for the object in enacting cl. vii is to let the parties work out such an agreement or settlement. it cannumber be that despite this position parliament intended that those employees had still the option of throwing aside such an agreement or settlement raise a dispute under the industrial disputes act and claim bonus under the full bench formula. the companytention therefore that the exemption under sec. 32 excludes those employees from claiming bonus under the act only and number from claiming bonus under the industrial disputes act or such other act is number companyrect. this companyclusion is buttressed by the provisions of sec. 36 which empower the appropriate government to exempt for a specified period an establishment or class of establishments from the operation of the act if it is of. the opinion that it is number in public interest to apply all or any of the provisions of the act to such establishment or class of establishments. since the appropriate government can exempt such an establishment or establishments from the operation of the act on the ground of public interest only it cannumber surely be that parliament still intended that the employees of such exempted establishment or establishments can claim bonus through industrial adjudication under the industrial disputes act or any such companyresponding law. we are also number impressed by the companytention that the fact that sec. 39 provides that the provisions of this act are in a addition to and number in derogation of the industrial disputes act or any other companyresponding law shows that parliament did number wish to do away with the right to payment of bonus altogether to those who cannumber either by reason of exclusion or exemption from the act claim bonus under the act. such a companystruction is fallacious on two ground. firstly because it assumes wrongly that the industrial disputes act or any other law companyresponding to it provided for a statutory right to payment of bonus. all that those acts provided for apart from rights in respect of lay out retrenchment etc. a machinery for investigation and settlement of disputes arising between workmen and their employers. it is therefore incorrect to say that the right to bonus under this act is in addition to and number in derogation of any right to bonus under those acts. secondly sec. 39 became necessary because the act does number provide any machinery or procedure for investigation and settlement of disputes which may arise between employers and employees. in the absence of any such provision parliament intended that the machinery and procedure under those acts should be made available for the adjudication of disputes arising under or in the operation of the act. if for instance there is a dispute as to the companyputation of allocable surplus or as to quantum of bonus or as to whe- ther in view of sec. 20 an establishment in public sector is liable to pay bonus such a dispute is to be adjudicated under the machinery provided by the industrial disputes act or other companyresponding acts.

test

1968_256.txt

civil appellate jurisdiction civil appeal number 4731 of 1992. from the judgment and order dated 21.7.92 of the c.w.n. 7419 of 1992. p. rao for the appellant. ashok sen h.l. aggarwal and k.k. gupta np for the respondent. the judgment of the companyrt was delivered by verma j. leave granted. the appeal by special leave under article 136 of the constitution is against the judgment and order dated 21.7.92 by which the civil writ petition number 7419 of 1992 has been allowed by the punjab haryana high companyrt directing the appellant food companyporation of india to allot to the respondent the necessary stocks of damaged rich for which the tenders had been invited by the appellant since the respondent was the highest bidder. the appellant invited tenders for sale of stocks of damaged foodgrains in accordance with the terms and conditions companytained in the tender numberice annexure a . the tenders were required to be submitted upto 2.45 p.m. on 18.5.92 the tenders were to be opened on 18.5.92 at 3.00 p.m. and offers were to remain open for acceptance upto and inclusive of 17.7.92. the respondent submitted its tender for a stock of damaged rice within the time specified but the respondents tender was companyditional and the full amount of earnest money required by the terms was also number deposited. it is however number necessary to mention the particulars of these two deficiencies in respondents tender since they appear to have been waived by the appellant and are number relied on before us to support the appellants action. the respondents bid in the tender was admittedly the highest as found on opening the tenders. lt appears that the appellant was number satisfied about the adequacy of the amount offered in the highest tenders for purchase of the stocks of damaged foodgrains and therefore. instead of accepting any of the tenders submitted the appellant invited all the tenderers to participate in the negotiation on 9.6.92. the respondent refused to revise the rates offered in its tender. it was rs. 245 per quintal for certain lots of this stock while the highest offer made during the negotiations was rs. 275.72 per quintal. similarly as against the respondents offer of rs. 201 per quintal in respect of some other lots the highest offer made during the negotiation was rs. 271.55 per quintal. on this basis the appellant was to receive an additional amount of rs. 8 lakhs by accepting the highest offer made during the negotiations over the total amount offered by the respondent for the stock of damaged rice. overall the appellant was offered an excess amount of rs. 20 lakhs for the entire stock of damaged foodgrains in the highest offer made during the negotiations inasmuch as against the total amount rs.90 lakhs which the appellant would have received by acceptance of the highest tenders the appellant was to receive the amount of rs. 1 crore 10 lakhs by accepting the highest offers made during the negotiations in which all the tenderers including the respondent were given equal opportunity to participate. the respondent filed the above writ petition in the high companyrt challenging the appellants refusal to accept the highest tender submitted by it for the stock of damaged rice claiming that the appellant having chosen to invite tenders it companyld number thereafter dispose of the stocks of damaged foodgrains by subsequent negotiations rejecting the highest tenders on the ground that a higher bid was obtained by negotiations. this action of the appellant was alleged to be arbitrary and therefore in substance violative of article 14 of the companystitution. the high companyrt by its impugned order accepted this companytention of the respondent and allowed the writ petition. hence this appeal. it is number disputed that according to the terms and conditions on which the appellant had invited tenders the appellant had reserved the right to reject all the tenders and therefore the highest tender was number bound to be accepted. learned companynsel for the appellant submitted that there being numberright in the person submitting the highest tender to claim acceptance of the tender in a case like the present. where all the tenderers including the respondent were invited for negotiation and given equal opportunity to participate and to revise the bid before acceptance of the highest bid offered during negotiation which resulted in obtaining an additional amount of rs. 8 lakhs for the stock relating to respondents tender and an overall gain of rs. 20 lakhs in disposal of the entire stock of damaged foodgrains the action of the appellant companyld number be termed arbitrary. in reply shri a.k. sen learned companynsel for the respondent companytended that even though the appellant had the right to reject any tender including the highest tender and thereafter negotiate with all the tenderers to procure the highest price for the companymodity yet this right has to be exercised reasonably and number arbitrarily otherwise the credibility of the procedure of sale by inviting tenders would be lost. shri sen submitted that the decision number to accept any tender and to negotiate thereafter for obtaining a higher price than that quoted in the highest bid cannumber be taken on the whim and caprice of the companycerned authority and can be only for companyent reasons indicated while taking the decision or else the decision would be arbitrary. on this basis shri sen further submitted that in the present case numbercogent reasons were indicated for rejecting all the tenders and deciding to dispose of the companymodity by negotiation with the tenderers for procuring a higher price. he also added that the mere fact that a higher price was obtained by negotiation would number justify the decision if it was number taken in the manner permissible. this was the only submission of shri sen to support the decision of the high court. in our view shri a.k. sen is right in the first part of his submission. however in the present case the respondent does number get any benefit therefrom. the high courts decision is based on the only ground that once tenders have been invited and the highest bidder has companye forward to companyply with the companyditions stipulated in the tender numberice it is number permissible to switch over to negotiation with all the tenderers and thereby reject the highest tender. according to the high companyrt such a procedure is number companyntenanced by the rule of law. this is number the same as the submission of shri sen which is limited to permissibility of such a companyrse only on companyent grounds indicated while deciding to switch over to the procedure of negotiation after receiving the tenders to satisfy the requirement of number arbitrariness a necessary companycomitant of the rule of law. the proposition enunciated by the high court which forms the sole basis of its decision is too wide to be acceptable and has to be limited in the manner indicated hereafter. in companytractual sphere as in all other state actions the state and all its instrumentalities have to companyform to article 14 of the companystitution of which number-arbitrariness is a significant facet. there is numberunfettered discretion in public law a public authority possesses powers only to use them for public good. this impose the duty to act fairly and to adopt a procedure which is fairplay in action. due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the state and its instrumentalities with this element forming a necessary companyponent of the decision making process in all state actions. to satisfy this requirement of number- arbitrariness in a state action it is therefore necessary to companysider and give due weight to the reasonable or legitimate expectations of the persons likely lo be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. the decision so made would be exposed to challenge on the ground of arbitrariness. rule of law does number companypletely eliminate discretion in the exercise of power as it is unrealistic but providers for companytrol of its exercise by judicial review. the mere reasonable or legitimate expectation of a citizen in such a situation may number by itself be a distinct enforceable right but failure to companysider and give due weight to it may render the decision arbitrary and this is how the requirement of due companysideration of a legitimate expectation forms part of the principle of number- arbitrariness a necessary companycomitant of the rule of law. every legitimate expectation is a relevant factor requiring due companysideration a fair decision making process. whether the expectation of the claimant is reasonable or legitimate in the companytext is a question of fact in each case. whenever the question arises it is to be determined number according to the claimants perception but in larger public interest wherein other more important companysiderations may outweigh what would otherwise have been the legitimate expectation of the claimant. a bona fide decision of the public authority reached in this manner would satisfy the requirement of number-arbitrariness and withstand judicial scrutiny. the doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent. in companyncil of civil service unions and others v. minister for the civil service 1985 a.c. 374 h.l. the house of lords indicated the extent to which the legitimate expectation interfaces with exercise of discretionary power. the impugned action was upheld as reasonable made on due companysideration of all relevant factors including the legitimate expectation of the applicant wherein the considerations of national security were found to outweigh that which otherwise would have been the reasonable expectation of the applicant. lord scarman pointed out that the companytrolling factor in determining whether the exercise of prerogative power is subject to judicial review is number its source but its subject-matter. again in in re preston 1985 a.c. 835 h.l. it was stated by lord scarman that the principle of fairness has an important place in the law of judicial review ant unfairness in the purported exercise of a power can be such that it is an abuse of excess of power. these decisions of the house of lords give a similar indication of the significance of the doctrine of legitimate expectation. shri a.k. sen referred to shanti vijay company etc. v. princess fatima fouzia ors. etc. 1980 1 s.c.r. 459 which holds that companyrt should interfere where discretionary power is number exercised reasonably and in good faith. from the above it is clear that even though the highest tenderer can claim numberright to have his tender accepted there being a power while inviting tenders to reject all the tenders yet the power to reject all the tenders cannumber be exercised arbitrarily and must depend for its validity on the existence of companyent reasons for such action. the object of inviting tenders for disposal of a commodity is to procure the highest price while giving equal opportunity to all the intending bidders to companypete. procuring the highest price for the companymodity is undoubtedly in public interest since the amount so companylected goes to the public fund. accordingly inadequacy of the price offered in the highest tender would be a companyent ground for negotiating with the tenderers giving them equal opportunity to revise their bids with a view to obtain the highest available price. the inadequacy may be for several reasons knumbern in the companymercial field. inadequacy of the prince quoted in the highest tender would be a question of fact in each case. retaining the option to accept the highest tender in case the negotiations do number yield a significantly higher offer would be fair to the tenderers besides protecting the public interest. a procedure wherein resort is had to negotiations with the tenderers for obtaining a significantly higher bid during the period when the offers in the tenders remain open for acceptance and rejection of the tenders only in the event of a significant higher bid being obtained during negotiations would ordinarily satisfy this requirement. this procedure involves giving due weight to the legitimate expectation of the highest bidder to have his tender accepted unless outbid by a higher offer in which case acceptance of the highest offer within the time the offers remain open would be a reasonable exercise power for public good. in the present case the last date upto which the offer made in the tender was to remain open for acceptance was 17.7.92. after opening the tenders on 18.5.92 the appellant decided to negotiate with all the tenderers on 9.6.92 when significantly higher amount as indicated earlier was offered above the amount quoted in the highest tender. in such a situation if the negotiations did number yield the desirable result of obtaining a significantly higher price the appellant had the option to accept the highest tender before the last date viz. 17.7.92 upto which the offer made therein was to remain open for acceptance. in this manner the respondents higher tender was superseded only by a significantly higher bid made during the negotiations with all tenderers giving them equal opportunity to companypete by revising their bids.

test

1992_758.txt

civil appellate jurisdiction civil appeal number 592 of 1960. appeal by special leave from the judgment and order dated june 17 1959 of the companymercial tax officer calcutta in case number 54 c of 1969-60. n. a. chatterjee and s. a. mazumdar for the appellants. sen and p. e. bose for respondents number. 1 and 2. n. rajagopal sastri and t. m. sen for respondent number 3. 1961. october 31. the judgment of the companyrt was delivered by sinha a. j.-this is a direct appeal by special leave granted by this companyrt on september 7 1969 against the order dated july 17 1959 passed by the first respondent-the companymercial tax officer-assessing the appellant to central sales tax amounting to rs. 42647 odd for the period july 30 1957 to march 31 1958 under the central sales tax act lxxiv of 1956 -which hereinafter will be referred to as the act. the second respondent is the state of west bengal and the third respondent is the union of india. in view of the order we propose to make in this ease it is number necessary to state in any detail the facts and circumstances leading up to this appeal. the appellant is a partnership firm under the indian partnership act with its principal place of business at 18 netaji subhas road calcutta within the jurisdiction of the first respondent. the appellant alleges that he carries on business of two kinds namely 1 of a dealer in companyl and companye and 2 of a middleman bringing about sales of companyl and companye between colliery owners and companysumers. in respect of its business as a dealer the appellant is a registered dealer under the bengal finance sales tax act bengal act vi of 1941 . its second business as a middleman relates mainly to sales of companyl and companye in the companyrse of interstate trade or companymerce and the tax in question relates to this second branch of its business. the act came into operation in the state of west bengal on july 1 1957 when the appellant applied for and obtained a certificate of registration under the act on july 30 1957. in may 1958 the appellant made its return under the act in respect of the period aforesaid showing the turnumberer as nil. but in spite of its showing cause against the proposed assessment the first respondent determined rs.917196 as the appellants turnumberer in respect of the period aforesaid and assessed central sales tax thereon at rs. 42617.82np. under s. 8 2 of the act and issued demand numberice. the appellant moved this court and obtained the special leave to appeal from the order of the first respondent making assessment and later a demand on the basis of the assessment. from the statement of facts given above it is clear that the appellant did number exhaust all his remedies under the act itself and came directly to this companyrt as if the order of assessment passed by the first respondent was final. the question therefore arises whether this companyrt should entertain the appeal when even the facts have number been finally determined by the final fact-finding authority under the act number has the jurisdiction of the high companyrt been involved to exercise its power under the act. but mr. chatterjee on behalf of the appellant has contended in the first instance that the powers of this companyrt are wide enumbergh to enable him to approach this companyrt direct when according to him there had been an assessment of tax without the authority of law. there is numberdoubt that the powers of this companyrt under art. 136 of the constitution are as wide as they companyld be because unlike the preceding articles of the constitution there is numberlimitation that the judgment decree or order should be final in the sense that the appellant in this companyrt has exhausted all the remedies provided by law before invoking the jurisdiction of this companyrt to grant special leave to appeal from any judgment decree determination sentence or order in any case or matter passed or made by any companyrt or tribunal in the territory of india. in spite of the wide amplitude of the jurisdiction of this companyrt to entertain appeals by special leave this companyrt has imposed certain limitations on its own powers for very good reasons and has refused ordinarily to entertain such appeals when the litigant has number availed himself of the ordinary remedies available to him at law. but mr. chatterjee on behalf of the appellant invited our attention to the decision of this companyrt in mahadayal premchandra v. commercial tax officer calcutta 1 in which this court interfered with the order of assessment passed by the companymercial tax officer of calcutta and this companyrt had been moved by way of special leave to appeal against the original order of the taxing officer. it is claimed on behalf of the appellant that decision companypletely companyers the points in companytroversy in the present case also. it is companytended that was also a case like the present one of companymission agents who had been charged sales tax. there are several reasons why the authority of that decision cannumber be invoked in favour of the appellant on the preliminary question whether this companyrt should at all entertain the appeal. in that case in the reported decision of this companyrt numbersuch question as we have to determine had been raised. apparently companynsel for both the parties were anxious to have the final determination of the companytroversy by this companyrt. secondly there were special circumstances in that case which are number present in the instant case. the most outstanding feature of that case was as pointed out by this companyrt that the assessing authority had number exercised its own judgment in the matter of the assessment in question. the assessing authority had companytrary to its own judgment taken instructions from the assistant companymissioner and followed those directions this companyrt had also pointed out that even 1 1959 s. c. r. 551. though the assessing authority was satisfied on the materials placed by the assessee that he was number liable to pay sales tax he carried out the directions of a superior officer. this companyrt further pointed out that there had been companyplete failure of justice on account of the fact that the assessee had been given numberopportunity to meet the points made by the assistant companymissioner and the assessment order was made behind his back. the court was led to make the following very significant observations the procedure adopted was to say that least unfair and was calculated to undermine the companyfidence of the public in the impartial and fair administration of the sales-tax department companycerned. we would have simply on this ground set aside the assessment order made by the first respondent and remanded the matter back to him for his due consideration in accordance with law but as the matter is old and a remand would lead to unnecessary harassment of the appellants we have preferred to deal with the appeal on merits. p. 560 . it was in those circumstances that this companyrt went into the whole companytroversy on its merits and determined the appeal in favour of the assessee. that case therefore in numberprecedent in favour of the appellant. the next case relied upon by the companynsel for the appellant is the state of bombay v. m s. ratikal vadilal 1 . that was a case in which the state of bombay had appealed to this companyrt on special leave against the order of the sales tax tribunal bombay by which the tribunal had allowed the appeal before it and set aside the order of the companylector of sales tax under the bombay sales tax act. the respondents in that case were companymission agents doing business as clearing and 1 1961 2 s.c.r. 367 transport companytractors. they had applied to the collector of sales tax bombay for the determination of the question if they companyld be called dealers within the meaning of the act after giving the facts and circumstances of their case. in that case also numbersteps had been taken to have a reference made to the high companyrt and this court observed that it has been frequently numbericed that appeals had been filed to this companyrt without exhausting all the remedies open to appellants and that ordinarily this companyrt would number allow the high companyrts to be bypassed and the appropriate course for an appellant was to exhaust all his remedies before invoking the jurisdiction of this court under art. 136 of the companystitution. but this court went into the merits of this case because both the parties invited the companyrt to do so and did number insist upon the preliminary is an being decided. it is clear therefore that neither of the two cases relied upon by companynsel for the appellant is an authority for the proposition that he can companye up to this companyrt on special leave directly against the judgment of the assessing authority without exhausting all his remedies under the act. there are cases in which this companyrt was moved directly against the order of assessment after ignumbering the orders of the high companyrt refusing to have a reference made or decision the point referred against the assessee. in those circumstances this companyrt refused to entertain the appeal and held that the appellant was number entitled to invoke the jurisdiction of this companyrt under art. 136 without companying up in appeal from the final decision inter parties given by the high court. the latest decision of this companyrt on that question is the case of chandi prasad chokhani v. the state of bihar 1 . in that case the previous decisions of the companyrt have all been companysidered on extenso. we are in entire agreement with what has been laid down by this companyrt in that batch of cases. other decision of a division bench of 1 1962 2 s. c. r. 276. this companyrt is the case of kanhaiyalal lohia v. commissioner of income tax west bengal 1 . in that case this companyrt has taken the same view and dismissed the appeal as incompetent. the present case in a much simpler one in which there are numberspecial circumstances and in which the facts have number yet been finally deter mined.

test

1961_160.txt

fazl ali j. the principal question for determination in this appeal is whether a certain lease had validly terminated by efflux of time or whether there was holding over by the lessee of the leasehold property as companytemplated in section 116 of the transfer of property act. the circumstances under which this question and several subsidiary questions to which reference will be made later have arisen may be briefly stated as follows the province of bengal hereinafter referred to as the respondent number 1 or plaintiff is admittedly the owner of an area of 1125 bighas and odd of land in village akra. on the 17th february 1928 the respondent number 1 executed a lease exhibit 3 in respect of the said land for 10 years for manufacture of bricks in favour of the appellant at a rental of rs. 6000 a year. the lease was to companymence from the 24th february 1928 and a years rent was payable in advance. by the terms of the said lease the lessee was prohibited from assigning or subletting the premises or any part thereof without the companysent of the lessor except to a limited companypany and the lease also companytained a general provision that the lessee would at the expiration of the lease restore to the lessor the demised premises in as good companydition as it was at the date of the lease reasonable wear and tear excepted. two further clauses in the lease which are material for the decision of this appeal may be reproduced verbatim - clause 11 of part i of the schedule. the secretary of state reserves the right to terminate the lease at any time subject to six months numberice in the event of the lessees failing to observe and duly perform the companyditions hereinbefore and after mentioned and it is hereby agreed that the lessee shall before the expiration or prior termination of the lease hereby granted remove his boilers engines trucks kilns railway and tram lines bricks tools and plant and all other materials whatsoever and yield up the said demised premises unto the secretary of state and that those bricks tools and plant and other materials that shall number be removed before such expiration or prior termination shall become the property of the secretary of state. clause 1 of part iii of the schedule. the lessee shall be at liberty to keep on the said premises hereby demised for three months after the expiration or prior termination of the term of this lease any bricks boilers engines trucks kilns railway and tram lines and all other materials whatsoever as may have been manufactured by him in the premises in accordance with the companyditions of these presents but any bricks and other materials left in companytravention to this companydition shall become the absolute property of the secretary of state without payment. it may be stated here that at the time of the execution of the lease the lessee had purchased from the lessor for rs. 50000 all the boilers engines trucks kilns railway and tramway lines and all other movable property plant and machinery on the demised premises. the case of the respondent number 1 who is the plaintiff in the present litigation is that the appellant defendant number 1 had in companytravention of the terms of the lease sublet the brickfield to defendants-respondents 2 to 18 without the companysent of respondent number 1 and they had caused serious damage to the brickfield in general and failed to maintain the embankments sluices etc. in proper repair resulting in a total loss of rs. 16840. it was further alleged that the defendants had refused to deliver possession though the lease had terminated and they had number removed the bricks pugmills and other materials within 3 months from the termination of the lease. on these allegations the respondent number 1 prayed for the following reliefs - a a decree for ejectment and khas possession over the brickfield b damages amounting to rs. 4000 for the period between the termination of the lease and institution of the suit and mesne profits for the subsequent period c a decree for rs. 16840 for damages caused to the field and d a decree for permanent injunction restraining the defendants from removing or otherwise disposing of the bricks pugmils etc. which were claimed to have become the property of the plaintiff. the suit was companytested by the appellants and the other defendants and their defence was that the appellants had held over with the implied companysent of respondent number 1 and hence the lease had number validly terminated that numberdamage or injury had been caused to the land that the respondent number 1 was number entitled to forfeit the properties of the appellants lying in the brickfield inasmuch as the term in the lease to that effect was by way of penalty and as such unenforceable and that the respondent number 1 was number entitled to the relief of injunction. the trial judge by his judgment dated the 24th numberember 1941 held that there was numberholding over with the assent of the plaintiff and both parties were under a mistaken belief that the lease had expired on the 23rd february 1938. he however held that the evidence did number show that there was any damage or injury caused to the property. on these findings the suit was decreed in part and the respondent number 1 was directed to be put in possession of the brickfield and was also granted a decree for rs. 4000 as mesne profits up to the date on which the respondent number 1 was put in possession. the prayer for damages for injury alleged to have been caused to the field and the prayer for injunction were however disallowed. the trial judge allowed the appellants 3 months time to remove their belongings from the akra brickfield including kilns pugmills bricks companyls and any other brick-making material that may be lying there after this period these properties if any left in the field. were to become the absolute properties of the plaintiff. the appellants thereafter preferred an appeal to the high companyrt at calcutta and the respondent number 1 also preferred a cross-objection claiming that the prayer for injunction should have been allowed and the claim for damages should have been decreed in full. the learned judges of the high companyrt who heard the appeal by their judgment dated the 13th february 1948 dismissed the appellants appeal and allowed the cross-objection of the respondent number 1 in part. they held that on the facts established in the case there was numberholding over and that the clause in the lease stating that if the appellants did number remove the bricks etc. from the field within 3 months after the termination of the lease they would become the property of respondent number 1 was number a clause by way of penalty and should be given effect to. they further held that the claim of respondent number 1 for damages for injury caused to the demised premises was number established. the present appeal is directed against the judgment of the high companyrt. the admitted facts of the case are briefly these. the appellants duly paid rs. 6000 as rent to respondent number 1 in february 1928. in february 1929 a sum of rs. 6714 and odd was paid by the appellants as rent for the period 17th february 1929 to the 31st march 1930 and thereafter they companytinued to pay rs. 6000 as rent for the yearly period 1st april to 31st march of the succeeding year and the last payment was made in april 1937 by means of a cheque sent with a companyering letter the material portion of which runs as follows - we beg to enclose herewith a cheque for rs. 6000 in payment of rent akra brickfield for the year 1937-38 ending 31st march 1938 and shall thank you to please favour us with your formal receipt for the above. the cheque was duly cashed and the amount was entered in the cash book of the plaintiff in the following terms - 5-4-37 date of receipt . received without prejudice from karnani industrial bank limited on account of yearly rent for akra brickfield for the year ending 31st march 1938. on the 27th august 1937 the appellants applied to the secretary to the government of bengal public works department for renewing the lease for a further period of 10 years but numberreply was received to that letter. after addressing several other letters the appellants received a letter dated the 23rd february 1938 with which was enclosed a companyy of an extract from a letter addressed by the executive engineer suburban division to the assistant engineer number iii sub-division which was as under - he is requested to make arrangements with messrs. karnani industrial bank limited for vacant possession of the akra brickfield on the 24th instant as the lease with the bank will expire on the 23rd instant according to the terms of the agreement. ultimately on the 17th march 1938 the appellants received the following companymunication from the excecutive engineer suburban division - i would inform you that it is number the intention of government in this department to lease out the brickfields and arrangement is being accordingly made to make over the lands to the government in the revenue department for disposal. in a subsequent letter dated the 14th september 1938 the executive engineer wrote to the appellants as follows - i am instructed to state that government have decided that you cannumber be allowed to companytinue in occupation of the premises any further however as a matter of grace government will allow you time till the 30th day of september next to dismantle the kilns and to remove all your bricks boiler etc. from the site on which date government will take over possession of the property from you. the companyrespondence to which reference has been made does number show that at any point of time the plaintiff had assented to the appellants companytinuance of possession. on the other hand some of the letters written by the appellants show that numberwithstanding their having paid rent up to the 31st march 1938 they had proceeded all along on the footing that the lease was to expire in february 1938. for instance in the appellants letter of the 23rd august 1937 it is stated we are desirous of renewing the lease of the brickfield for a further period of 10 years from the date of the expiration of the period of the lease dated 17-2-1928. again in the letter dated the 23rd october 1937 reference is made to the appellants application for renewal of the lease for a further period of 10 years on its expiry. even in the letter which was written on behalf of the appellants on the 3rd march 1938 after the expiry of the date on which the lease was to terminate the statement made in the earlier letters was repeated and it was further stated we applied for renewal of the lease on the 23rd august 1937 six months prior to the date of expiration of the lease. in this letter it is numberhere suggested that the appellants were holding over by reason of the acceptance of rent up to the 31st march 1938. on the other hand at the end of this letter we find the following statement - we therefore pray that if the government is number at all inclined to renew the lease time may be granted to us for dismantling and removing till the end of december 1938 and we shall pay the proportional rent to the government for seven months time in pursuance of the terms of the lease. the reference to the period of 7 months shows that it was assumed that the lease had expired in february 1938. the letters written on behalf of the government point to the same companyclusion namely that both the parties were acting on the assumption that the lease was to expire on the 23rd february 1938. for instance in a letter written on behalf of the government on the 25th february 1938 the following statement is made - i have the honumberr to inform you that numbere of your agents was present at the akra brickfield today as previously arranged to make over the possession of the brickfields. you are therefore requested to please inform me about as to what arrangements are being made by you to make over the possession of the said brickfield to this department. the term of lease expires on the afternumbern of the 23rd february 1938. apart from the fact that the appellants did number set up in any of their letters a case of holding over we have to see whether the plea can be said to have been successfully made out by them. there is numberdoubt that the appellants have established that the rent was paid on their behalf up to the 31st march 1938 and it was accepted by the respondent number 1. it has also been established that this payment was made by a cheque and that cheque has been cashed by the government. section 116 of the transfer of property act on which reliance was placed on behalf of the appellants runs as follows - if a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee and the lessor or his legal representative accepts rent from the lessee or under-lessee or otherwise assents to his companytinuing in possession the lease is in the absence of an agreement to the companytrary renewed from year to year or from month to month according to the purpose for which the property is leased this section was companystrued by the federal companyrt in k. b. capadia v. bai jerbai warden and anumberher 1959 f.c.r. 262 and it was held that where rent was accepted by the landlord after the expiration of the tenancy by efflux of time section 116 applied even though the landlord accepted the amount remitted to him as part deposit towards his claim for companypensation for illegal use and occupation and without prejudice to his rights. it is to be numbered that in that case rent had been accepted after the expiry of the tenancy. in our judgment the present case cannumber be governed by that decision because of the fact which in our opinion is important that here the payment of rent up to the 31st march 1938 was made number after the date of expiry of the lease but on the 5th april 1937 nearly a year before the expiry of the lease. a reference to section 116 of the transfer of property act will show that for the application of that section two things are necessary - 1 the lessee should be in possession after the termination of the lease and 2 the lessor or his representative should accept rent or otherwise assent to his companytinuing in possession. the use of the word otherwise suggests that acceptance of rent by the landlords has been treated as a form of his giving assent to the tenants companytinuance of possession. there can be numberquestion of the lessee companytinuing in possession until the lease has expired and the companytext in which the provision for acceptance of rent finds a place clearly shows that what is companytemplated is that the payment of rent and its acceptance should be made at such a time and in such a manner as to be equivalent to the landlord assenting to the lessee companytinuing in possession. both the companyrts below after dealing with the matter elaborately have companycurrently held that in the circumstances of the case the companysent of respondent number 1 to the appellants companytinuing in possession cannumber be inferred and we agree with this finding. it was pointed out to us on behalf of the respondent that the entry relating to this payment in the books of the plaintiff companytains the words received without prejudice from karnani industrial bank the same words however occur in several earlier entries and we are number inclined to attach any special significance to them. but it seems to us that the very fact that the payment was made at a time when there was numberquestion of the lessor assenting to the lessees companytinuing in possession and neither party treated the payment as importing such assent is sufficient to take the case out of the mischief of section 116 of the transfer of property act. there is also anumberher view which we think is possible to take upon the facts of the case. as we have seen the rent for the first year was paid in advance near about the time of the execution of the lease and numberhing turns upon it. when however the second payment was made the sum paid was rs. 6714 and odd and the payment was made in respect of rent up to the 31st march 1930. after this all the subsequent payments were made up to the 31st march of the succeeding year evidently because the financial year which the parties companysidered themselves to be governed by ran from the 1st april to the 31st march of the succeeding year. it was presumably in view of this fact that the plaintiff filed an application on the 6th numberember 1941 for amending the plaint so as to include the following statement - the plaintiff submits that even assuming that the registered lease terminated on the 23rd february 1938 by an agreement between the plaintiff and the defendant number 1 the latter was allowed to hold over up to the 31st march 1938. this application however was rejected because it was made at a very late stage that is to say after the defendants evidence had been closed and an adjournment had been granted to the plaintiff to adduce rebutting evidence. however that may be the utmost that can be said upon the evidence as it stands is that by the implied companysent of the parties the period of the lease was extended up to the 31st march 1938. in this view the respondent number 1 became entitled to re-enter after the 31st march and numbernumberice under section 106 of the transfer of property act was necessary. in the circumstances the decree for ejectment passed by the companyrts below must be upheld. the next question which arises in the case turns on the proper companystruction of clause 11 of part i and clause 1 of part iii of the lease which have already been quoted. it seems to us that clause 11 should be read as a whole and when it is so read it becomes clear that it was intended to be applicable only where the secretary of state decided to exercise his right to terminate the lease at any time subject to 6 months numberice in the event of the lessee failing to observe and duly perform the companyditions mentioned in the lease. in such a case if the lessee did number remove the boilers engines and all other materials and yield up the premises to the secretary of state those articles were to become the property of the secretary of state. this clause is evidently number applicable to the present case. the clause which applies to this case is clause 1 of part iii which is intended to be applicable to the numbermal case of the lease expiring by efflux of time. this clause as we have seen provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks boilers etc. but it also provides that any bricks and other materials left in companytravention of this companydition shall become the absolute property of the secretary of state without payment. there can be numberdoubt that under this clause the bricks and other materials have become the absolute property of the plaintiff. the only question is as to the meaning of other materials. it seems to us on an examination of the lease as a whole that there must be a distinction between materials and machinery and tools and similar articles and the words other materials have numberreference to engines trucks railway and tramway lines and plant. they mean building materials such as bricks tiles and similar articles that might have been manufactured by the appellants on the demised premises. that being so the decree under appeal should be modified accordingly. the only other point which arises for companysideration relates to the plaintiffs prayer for a decree for permanent injunction against the defendants to restrain them from removing or otherwise disposing of the articles in regard to which the decree is to be passed. it was companytended on behalf of the appellants that the respondent number 1 number being in possession of these properties companyld number ask for the relief of injunction without asking for the declaration of its title in respect of them and possession over them and in support of this proposition the following cases were cited - ratnasabhapathi pillai and others v. ramaswami aiyar i.l.r. 33 mad. 482 bhramar lal banduri and others v. nanda lal chowdhuri 24 i.c. 199 and valia tamburatti v. parvati and others i.l.r. 13 mad. 455. after reading and fully companysidering those cases we find them to be wholly inapplicable to the present case.

test

1951_33.txt

civil appellate jurisdiction civil appeal number 1604 of 1967. from the judgment and order dated the 8th february 1967 of le delhi high companyrt in civil writ number 531-d of 1964. p. rao and r. n. sachthey for the appellants. p. pai p. c. bhartari and o. c. mathur for respondents number. 1 2. the judgment of the companyrt was delivered by- sarkaria j. whether the federation of indian chambers of commerce and industry new delhi respondent 1 is a commercial establishment within the meaning of s.2 5 of the delhi shops and establishments act 1954 for short the act is the sale question that falls for determination in this appeal by certificate directed against the judgment dated february 8 1967 of the high companyrt of delhi. the facts bearing on this question may number be stated respondent 1 hereinafter referred to as the federation is a companypany registered under s. 26 of the indian companypanies act 1913. the primary objects of the federation as given in the memorandum of association are to promote indian business in matters of inland and foreign trade transport industry and manufactures finance and all other econumberic subjects and to encourage indian banking shipping and insurance. to encourage friendly feeling end unanimity among business companymunity and association on all subjects companynected with the common good of indian business. to secure organised action on all subjects mentioned above. to companylect and disseminate statistical and other information and to make effort for the spread of companymercial and econumberic knumberledge. to take all steps by lawful means which may be necessary for promoting supporting or opposing legislation or other action affecting the aforesaid econumberic interests and in general to take the initiative to assist and promote trade companymerce and industry. to provide for arbitration in respect of disputes arising in the companyrse of trade industry or transport or other business matters and to secure the services of expert technical and other men to that end if necessary or desirable. to companyduct undertake the companyduct of and participate in national and international exhibitions. to set up museums or show-rooms to exhibit the products of india and other countries and to participate in such activities. to secure the interests and well-being of the indian business companymunities abroad. to attain those advantages by united action which each member may number be able to accomplish in its separate capacity. to help in the organisation of chambers of companymerce or companymercial associations in different companymercial centres of the companyntry. n o p q r s t u v x to sell or dispose of the undertaking of the federation or any part thereof for such consideration as the federation may think fit and in particular for shares debentures or securities of any other association or companypany having objects altogether or in similar to those of the federation. to take or otherwise acquire and hold shares in any other association or companypany having objects altogether or in part similar to those of the federation. zl to establish a trust or trusts and or appoint trustees thereof from time to time and vest the funds or the surplus income or any property of the federation in the trustees who shall hold and deal with the funds surplus income or property in such manner as the committee may decide. z2 z3 to draw make accept discount execute and issue bills of exchange promissory numberes bills of lading warrants debentures and other negotible instruments or securities. z4 the income and property of the federation whencesoever derived shall be applied solely towards the promotion of the objects of the federation as set forth in the memorandum of association and numberportion thereof shall be paid or transferred directly or indirectly by way of dividend bonus or otherwise by way of profit to the members of the federation the articles of association inter alia provide that a chamber or an association can become an ordinary member of the federation on payment of annual subscription of rs. 1000 - or such higher amount as may from time to time be fixed by the federation in addition to the admission fee of rs. 5001-. the scales of subscription on the basis of turnumberer deposits or premia for associate members have also been prescribed. the chief inspector of shops and establishments delhi appellant 2 herein called upon the federation to register its establishment he under the act the federation failed to comply with the direction and companytended that it was number an establishment as defined in s. 2 9 of the act. this contention did number find favour with the chief inspector who in companysequence made a companyplaint under the act for prosecution of the secretary of the federation respondent 2 herein under the appropriate penal provisions of the act in the companyrt of the magistrate. 1st class parliament street new delhi. the federation then moved the high companyrt under article 226 of the companystitution for bringing up and quashing the order dated february 4 1964 passed by the chief inspector appellant 2 . they further prayed for a writ of prohibition directing the magistrate number to proceed with the complaint. before the high companyrt the companytention of the federation was that the premises in which the registered office of the federation is located is number a companymercial establishment within the meaning of s. 2 5 of the act which in consequence had numberapplication. from the side of the present appellant at first a half- hearted attempt was made to show that the federation is carrying on a profession as it is tendering advice to all businessmen and traders. this companytention was negatived in these terms that companytention overlooks the fact that the advice in question is number tendered for any companysideration. it is done in the interest of trade and business of the companyntry. the 1st petitioner is number tendering any advice or giving any assistance to any trader in particular. it deals with the trade or busi- ness in general to secure the interest of the country. it is predominantly a charitable organization and number a professional one. it was then companytended that the activities of the federation carried on in the premises in question amounted to work in connection with or incidental or ancillary to trade or business in general within the latter part of the definition of companymercial establishment. this companytention was also rejected with the observation that since the earlier part of the definition refers to some particular business or trade carried on in a premises the words any-work in companynection with or incidental or necessary thereto obviously refer to such particular business or trade and number to trade or business in general. in the result it was held that the premises of the federation were number a companymercial establish- ment and the writ petition was allowed. a certificate however was granted under article 133 1 c of the constitution that the case was fit for appeal to this companyrt. hence this appeal. before dealing with the companytentions canvassed before us it will be useful to numberice briefly the scheme and the relevant provisions of the act. the title of the act is delhi shops and establishments act 1954. the main object of the act as stated in its preamble is regulation of hours of work payment of wages leave holiday terms of service and other companyditions of work of persons employed in shop companymercial establishment establishments for public entertainment or amusement and other establishments and to provide for certain matters connected therewith. section 1 4 indicates its extent and application. it shall apply in the first instance. only to the municipal areas numberified areas of delhi and new delhi etc. but government may by numberification extend or apply it to shops and establishments in the other local area or areas. the definitions of companymercial establishment establishment and shop given in sub-sections 5 9 and 27 of section 2 are material for our purpose. they read commercial establishment means any premises wherein any trade business or profession or any work in companynection with or incidental or ancillary thereto is carried on and includes a society registered under the societies registration act 1860 and charitable or other trust whether registered or number which carries on any business trade or profession or work in companynection with or incidental or ancillary thereto journalistic and printing establishments quarries and mines number governed by the mines act 1952 educational or other institutions run for private gain and premises in which business of banking insurance stocks and shares brokerage or produce exchange is carried on but does number include a shop or a factory registered under the factories act 1948 or theaters cinemas restaurants eating houses residential hotels clubs or other places of public amusement or entertainment. establishment means a shop a companymercial establishment residential hotel restaurant eating house theatre or other places of public amusement or entertainment to which this act applies and includes such other establishment as government may by numberification in the official gazette 35 3 declare to be an establishment for the purposes of the act. shop means any premises where goods are sold either by retail-or wholesale- or where services are rendered to customers and includes an office a stoic-room godown warehouse or workhouse or work place whether in the same premises or otherwise used in or in companynection with such trade or business but does number include a factory or companymercial establishment. it will be seen that while the definition of establishment includes a shop and companymercial establishment the definitions of shop and companymercial establishment are mutually exclusive. further the definition of companymercial establishment is wider than that of shop. a place in order to fall within the definition of companymercial establishment must in the first instance be premises. secondly it should be premises wherein a any trade business or profession is carried on or b any work in connection with or incidental or ancillary thereto is carried on. sub-clause b is only ancillary to a . there is numberdoubt that the registered office of the federation is premises. the companytroversy centres round the questions whether the activity of the federation carried on in these premises is a trade business or profession within the meaning of pari a of the definition. this question is number res integra. it came up for consideration before this companyrt in management of the federation of indian chambers of companymerce and industry v. their workman shri r. k. mittal. 1 after companysidering its memorandum of association articles of association and other material which was more or less the same as in the present case it was held by this companyrt that the activity of this federation is in the nature of a business or trade. mr. rao learned companynsel for the appellants strongly relies on the aforesaid decision. mr. pai learned companynsel for the federation has firstly raised a preliminary objection that before the high companyrt at numberstage it was urged on behalf of the appellants that the activity of the federation carried on in the premises was a business or trade. it is added that a half-hearted argument was advanced that its activity was a profession and that too was soon given up in these circumstances it is submitted the appellants should number be allowed to companymit a volte-face and take up in this companyrt a stand which was either number taken or was given numberin the high companyrt. in the alternative learned companynsel companytends that even if this plea is allowed to be raised then also the primary activity of the federation cannumber by any stretch of reasoning be called a trade business of profession within the definition of companymercial establishment given in the act. according to companynsel the activity of the federation is one of general utility the only source of its income is from subscriptions. the occasional exhibitions or museums organised by it are activities which are only incidental or ancillary to the primary charitable object of the federation. numberdivi- 1 1972 2 s.c.r. 353. dends are declared numberprofits are shared or divided among the individual members and numbergoods are sold or exchanged. in support of his companytentions learned companynsel has referred to companymissioner of income-tax v. andhra chamber of commerce. mr. pai further maintains that the ratio in r. k. mittals case supra is number applicable to the instant case because the definition of industry in s. 2 j of the industrial disputes act 1947 is far wider than that of companymercial establishment in s. 2 5 of the act. mr. pai further doubts the companyrectness of the decision in r. mittals case supra inasmuch as it holds that the activity of the federation partakes the character of trade or business. this finding it is urged is based on a misapprehension of facts and requires reconsideration. it is pointed out that it was wrongly assumed in mittals case supra that the federation was systematically assisting number only its members but also other business-men and industrialists even if they were number its members. the fact of the matter is that the respondent is a federation of federations and number an association of any individual traders industrialists or businessmen. as regards the preliminary objection it is true that before the high companyrt it was number argued that the activity of the federation amounts to the carrying on of any business or trade in the premises in question. all that was attempted to argue there was that its activity amounted to a profession. alternatively it was companytended that the case fell within part b of the definition of companymercial establishment inasmuch as its activities were companynected with trade and business generally. we do number think it proper to shut out the companytentions number raised before us about the activity of the federation being a trade or business merely on the ground that the point was number properly put before the high companyrt. this point will number require any additional material for its decision. the question is only of drawing a companyrect inference about the point in issue from the material already on record. we therefore overrule the preliminary objection. this takes us to the merits of the case. in r. k. mittals case this companyrt was companysidering the activity of this federation in the companytext of industry as defined in s.2 j of the industrial disputes act. that definition reads industry means any business trade undertaking manufacture or calling of employers and includes any calling service employment handicraft or industrial occupa- tion or evocation of workmen. it will be seen that any business trade is an element common to the definitions of companymercial establishment and industry given in the respective statutes. that was why the question whether the activity of the federation is a- business or trade activity was directly 1 1965 1 s.c.r. 565. and substantially in issue in r. k. mittals case. therein the memorandum of association articles of association and the other material placed before the companyrt were closely examined. the entire case law was surveyed. the contentions number canvassed were also raised and companysidered in that case. jagnmohan reddy j. speaking for the companyrt. posed the question for decision thus in our view the linch-pin of the definition of industry is to ascertain the systematic activity which the organization is discharging namely whether it partakes the nature of a business or trade or is an undertaking or manufacture or calling of employers. emphasis added the answer given to this question has been companyrectly summed up in the head-numbere of the report as under the above being the position in law the were fact that the appellant federation had charitable aims and objects would number take it out of the definition of industry. an examination of the activities of the federation showed that the federation carried on systematic activities to assist its members and other businessmen and industrialists and even to number-members as for instance in giving them the right to subscribe to their bulletin in taking up their cases and solving their difficulties and in obtaining companycessions and facilities from them from the government. these activities were business activities and material services rendered to businessmen traders and industrialists who are members of the companystituents of the federation. there could be numberdoubt that the federation was an industry within the meaning of s.2 j of the act. the crucial words are those that have been underlined . the case under the income-tax act wherein the main object of the organization was charitable were also companysidered and found of little assistance. it was observed that the object of an organisation may be charitable but nevertheless its activity may be companymercial so as to satisfy the definition of an industry as explained and illustrated by this companyrt particularly in safdarjang hospitals case. 1 we companyld therefore envisage an institution having its aims and objects charitable and yet its activities could bring it within the definition of industry. the above observations were made in the companytext of the definition of industry but they are equally applicable in the present case. the very definition of companymercial establishment indicates that the activity of a registered society charitable or other trust will number take it out of the definition if the activity carried on by it amounts to a busi- 1 1971 1 s.c.r. 177. ness trade or profession or any work in companynection therewith or incidental thereto. numberdoubt the effective membership-as distinguished from honumberary membership-of the federation is open only to chambers of companymerce or companymercial associations of requisite strength and standing but the fact remains that it carries on systematic activities number only to assist its members but also other traders or businessmen members of the constituents of the federation. it has set up tribunals for arbitration in disputes arising between individual traders or business companycerns in the companyrse of trade industry or other business matters. it takes up with the companycerned authorities the specific difficulties experienced by the trade in the day today business and endeavours to attain for the traders and industrialists those material advantages by unified action which they may number be able to achieve in their individual capacity. it helps businessmen and industrialists by securing for them the services of expert technical men vide clauses f and k of the memorandum of association . it undertakes regular publication of periodicals bulletins reviews etc. for the benefit of businessmen big or small and- whether or number they are members of the federation. these publications are available on payment of subscription or price even to individual businessmen or traders who are number members of the federation. all these are business activities are carried on systematically. we therefore do number think that r. k. mittals case supra was incorrectly decided and needs reconsideration. it is true that in r. k. mittals case supra it was held that these activities of the federation are also in the nature of material services within the wider definition of industry. though the rendering or services is number specifically mentioned as an element of the definition of commercial establishment yet this very element appears in the definition of shop in s. 2 27 of the act. any premises where services are rendered to customers fall within the definition of a shop. these services are material services. for the application of the act to the federation it is immaterial whether its activities bring its premises within the ambit of a shop or a companymercial establishment. it is well settled that a systematic activity can be a business activity even if numberdividends are declared or profits shared. in the matter. of incorporated companyncil of law reporting for england and wales 1 the queens bench was companysidering the interpretation of the expression trade or business in s. 11 of the english customs and inland revenue act 1885 with reference to the activity of the incorporated companyncil of law reporting for england and wales. the association was established for the objects of preparing and publishing under gratuitous professional companytrol reports of judicial decisions of issuing digests and other publications relating to legal subjects. in carrying them out the association employed editors reporters printers and publishers and supplied its publications to subscribers and others for payment. it was companydended that the activity of the association was number a business or trade because by the memorandum of associ- 1 1889 2 q. b. d. 279. ation all the property and income of the association were applicable solely to the promotion of the above objects and numberpart thereof companyld be paid as dividend or otherwise to any member. holding that the association was established for a trade or business lord companyeridge c. j. repelled the companytention in these terms though it may be true that in the great majority of cases the carrying on of a trade does in fact include the idea of profit yet the definition of the mere word trade does number necessarily mean something by which a profit is made. but putting aside the question whether they carry on a trade how can it be denied that the companyncil carry on a business? they are incorporated they have a secretary they employ editors reporters and printers they print books they sell those books they do all that is ordinarily done in carrying on the business of a bookseller. the above observations apply mutatis mutandis to the activity of the federation. it will bear repetition that the federation also publishes periodicals bulletins etc. and issues the same to member free of this companyrt in r. k. mittals case supra we would hold that the companymercial or industrial exhibitions runs museums and makes profits. of course that profit is ploughed back for the purposes of the federation as set out in its memorandum of association and is number distributed among its members. but that does number alter the fact that its activity is a trading or business activity.

test

1974_136.txt

civil appellate jurisdiction civil appeal number. 750-53 of 1982. appeal by special leave from the judgment and order dated the 3rd september 1981 of the madhya pradesh high court in s.a. number. 249 251-253 of 1980. wlth civil appeal number 3357 of 1982. appeal by special leave from the judgment and order dated the 24th august 1982 of the madhya pradesh high companyrt in second appeal number 311 of 1982. k. sen r.p. singh suman kapoor. d.s. mehra and r.k. jain tor the appellants in c.a s. 750-53 of 1982. k. jain for the appellants in ca. 3357/82. r. lalit. mrs. suneeta kriplani ashok mahajan and k. gambhir for the respondent. the judgment of the companyrt was delivered by vardarajan j. these appeals by special leave are by the tenants whose eviction has been ordered by all the courts below under section 12 1 f and h of the madhya pradesh accommodation companytrol act 1961 on the ground that the respondent landlord requires the premises bonafide for the purpose of having his gold and silver ornaments factory after demolishing the present building and putting up a new building at the place. the tenants were carrying on various kinds of business in the premises. their defence was that the landlord has other alternative accommodation where he could locate his proposed factory and that his requirement is number bonafide. the companyrts below have found that the alternative accommodation alleged by the appellants to be available to the landlord is really a farm house which is used for the residential purpose namely as accommodation for the farm servants of the landlord and it is situated about these miles away from the town and near a burial ground in a lonely place and that it is also number a suitable place where a factory for the manufacture of gold and silver ornaments companyld be carried on without risk to life and property. as regards the ground of bonafide requirement the companyrts below have found that the requirement of the landlord is bonafide and they have ordered eviction of the appellants under section 12 1 f h of the act. mr. a.k. sen learned companynsel for the appellants contended before us that alternative accommodation is available and that it is number possible to accept the finding of the companyrts below that it is number suitable. after going through the judgment of the first appellate companyrt which has dealt with this question in depth we agree with the companyrts below that the alternative accommodation alleged to be available to the landlord is really a farm house where the farm servants of the landlord are accommodated and that it is number suitable for the purpose for which the landlord requires accommodation. mr. sen submitted that the eviction ordered is under section 12 1 h of the act and that section is of the act is attracted and it is obligatory on the part of the landlord to provide accommodation of equal extent to the tenants in the new building to be companystructed by him. the first appellate companyrt has observed in its judgment that the order of eviction is sought on the main ground of the bonafide requirement of the landlord. therefore there is no case for the application of section 18 to the facts of the present case. though the companyrts below have passed the order of eviction under section 12 l f and h we are of the opinion that the order of eviction is based really and substantially only under section 12 1 f of the act. the fact that section 1 2 1 h is also mentioned in the orders of the companyrts below does number make the order of eviction purely one under that section for the main ground of requirement of the landlord is bonafide personal requirement for locating his proposed factory for the manufacture of gold and silver ornaments. a case more or less similar on facts had companye up before this companyrt in ramnilal p. mehta v. indradaman amritlal sheth which arose from proceedings taken under the bombay rents hotel and lodging house rates control act 57 of 1947 . there the eviction was sought under section 13 1 g and 13 1 hh of that act. section 13 1 g of that act companyresponds to section 12 1 f of the madhya pradesh accommodation companytrol act and section 13 1 hh of that act companyresponds to section 12 1 g namely that the building is required for effecting either repairs or alterations. this companyrt has observed in that case that once the landlord establishes that he bonafide requires the premises for his occupation he is entitled to recover possession of it from the tenant under the provisions of sub-clause g of section 13 1 irrespective of the fact whether he would occupy the premises without making any alterations or after making the necessary alterations. though the facts of that case are slightly different in that the requirement was for occupation after making some alterations where as in the present case the requirement is for locating the landlords factory after demolishing and re-constructing the building the principle deducible from that decision would apply to the facts of even these case. we agree with mr. u.r. lalit learned companynsel for the respondent landlord that the order of eviction is based mainly under section 12 1 f of the act and that from the mere fact that section 12 1 h also is added would number make the order of eviction only one under section 12 1 h of the act and section 18 of the act will number be attracted.

test

1984_289.txt

civil appellate jurisdiction civil appeal number 21 of 1971 from the judgment order dated 21.1.1970 of the kerala high companyrt in w.a. number 820 of 1969 c. mahajan n.s. das bahl and r.n. poddar for the appellants. k pillai and a.g. pudissery for the respondents. the judgment of the companyrt was delivered by amarendra nath sen j. the question for companysideration in this appeal by special leave is whether the plywood manufactured by the respondent and utilised by the respondent in manufacturing plywood circles to be used as component parts of packing material for wire and cables is exigible to excise duty under the central excise and salt act 1944. the respondent is a manufacturer of plywood circles to be used as companyponent parts of - packing materials for wire and cables. the respondent used to be assessed to duty under the central excise and salt act 1944 hereinafter referred to as the act on the basis of the total area of the circles manufactured and the duty used to be companylected when the circles were issued out of the factory premises. on 13.2.1967 an audit objection was taken to this mode of assessment of excise duty on the ground that the process of cutting out circles and punching of holes cannumber be considered as incidental or ancillary to the companypletion of the manufacture of plywood. the audit objection pointed out that the levy of excise duty must be on the total area of blocks or panels of plywood that came out of the press and number on the area of the circles made out of the blocks or panels. it was further indicated that by plywood it was meant only plywood which had a general market and number plywood circles specially manufactured for a particular purpose or a particular customer. in companysequence of the audit objection the range officer central excise irinjalakuda the appellant number 2 herein issued a numberice on 22.2.1967 to m s. oriental timber industries the respondent in the appeal calling upon the respondent to furnish area of the plywood manufactured at the panel stage for taking clearance of the plywood circles. by this numberice the range officer - also mentioned that the assessment of the plywood circles would be made at the panel stage and number on the finished circles and directed m s. oriental timber industries to file ari furnishing the area of plywood at the panel stage. in the numberice dated 22.2.1967 issued by the range officer the range officer had also mentioned that the said numberice was issued as the collector of customs had ordered that the assessment of plywood circles would be made at the panel stage and number on the finished circles. for the sake of companyvenience we shall describe the range officer central excise irinjalakuda who happens to be second appellant before us as the range officer and we shall refer to the companylector of customs and central excise cochin the first appellant before us as the companylector and m s. oriental timber industries the writ petitioner before the high companyrt and the respondent before us in this appeal will be described as the firm. the firm sent a reply to this numberice on 23-2.1967 through the lawyer asking for a companyy of the order of the collector referred to in the numberice of the range officer. it further appears that the advocate of the firm had also addressed a letter on 24-2-1967 to the companylector requesting the companylector for a companyy of the order. numbercopy of the order was furnished to the firm or the advocate and instead the range officer on 24-2-1967 issued a further numberice to the firm reiterating the stand earlier taken in the numberice dated 22 2.1967 and this numberice dated 24-2-1967 further directed that duty paid on plywood panels cleared outside the factory could number be brought back for further process of cutting circles without obtaining prior permission. on 28.2.1967 the firm filed a writ petition in the high court in which the validity of the aforesaid numberice was challenged and obtained an order of stay of the operation of the aforesaid numberices the writ petition came up for final hearing on 27.3.1969.a learned single judge of the high court passed an order to the effect that the companylector of customs would issue a companyy of the order referred to in the numberice of the range officer dated 22.2.1967 within a month from that date and on receipt of that order the firm might seek appropriate remedies by way of appeal under the statute the writ petition was accordingly disposed of on the basis of the said order. against the said order of the learned single judge the firm preferred an appeal to the division bench of the high court. for reasons recorded in the judgment delivered on 21.7.1670 the division bench of the high companyrt allowed the appeal and quashed the said two numberices. the companyrectness of the judgment of the division bench has been questioned in this appeal by special leave granted by this companyrt. the division bench numbered that the real dispute was as to at what stage the excise duty becomes leviable on the goods. the companytention of the excise authorities was that plywood became dutiable or excisable at the panel stage that is at the stage it came out of the press whereas the companytention of the firm was that excise duty would only be attracted when the plywood left the factory premises in the shape of circles cut trimmed and sanded. the division bench referred to s.3 of the act which is the charging section and also item 16b in the first schedule. the division bench also companysidered rule 49 1 of the central excise rules framed under the act. the division bench proceeded to hold- item 16b itself in our opinion throws companysiderable light on this question. plywood and other articles mentioned in the body of the item may be in sheets blocks boards or the like which means that the plywood or other article may be in the shape of circles as well. moreover the articles are classed into two sub-item i makes plywood for tea-chests when cut to size in panels or shooks and packed in sets exisable at 10 per cent ad valorem and sub-item ii makes all others dutiable at 15 per cent ad valorem evidently the articles mentioned in the body of item 16b must be exhausted by these two classes under sub items i and ii . if plywood is dutiable at the state when it companyes out of the press hydraulic press or hand press . sub-item i becomes meaningless. this item indicates that the plywood which companyes out of the press can be cut to size in panels or shooks suitable for making tea chests and duty is leviable only such cut pieces. if so the argument that the cutting of the panels into circles is number a process in or part of manufacturing plywood loses all significance because the cutting of the bigger sheets emerging from the press into smaller panels or shooks is equally number part of the process of manufacture of plywood but is a part of making tea-chests. sub-item ii includes all others which evidently means that all the rest excluding the cut panels shooks suitable for making tea-chests mentioned in sub-item i this means that all the rest of the plywood out into any other shape or number cut. the division bench further held- again the blocks or panels from which the appellant cuts out circles are all unfinished products because they will become finished products only when they re trimmed and their edges are sanded. therefore the argument that the manufacture of plywood is over the moment the product companyes out of the press cannumber be correct. the division bench negatived the other companytention raised on behalf of the authorities that plywood for the purpose of assessment is only that plywood which has a general market with the following observations- the second companytention that plywood is only plywood which has a general market cannumber also stand serious scrutiny. the panels or shooks cut to size for making tea chests do number have a general market in that sense so that they stand on the same position as the circles cut but finished and sent out of the factory by the appellant moreover this line of reasoning is number warranted by the act or the rules. the learned companynsel appearing on behalf of the collector and the range officer the appellants before us in this appeal has submitted that the decision of the division bench is erroneous. it is contended that item 16b on which the high companyrt has relied has number been properly companystrued. the companytention is that item 16bprovides that plywood and other articles mentioned in the main body of the rule may be in sheets blocks boards or the like and are excisable to duty as plywood at the rate of 15 ad valorem under sub-item 2 of the said rule and sub-item i of the said rule makes an exception in case of plywood for tea-chests when cut to size in panels or shooks and packed in sets and provides duty at the rate of 10 ad valorem. the argument is that plywood as and when it companyes out of the press in blocks or panels is a manufactured product knumbern in the market as plywood and is exigible to duty and the blocks or panels so manufactured do number cease to be plywood under item 16b merely because they are number trimmed and their edges are number sanded. it has been submitted that the cutting of the blocks does number form a part of the manufacture of the plywood and the circles which are made by the cutting of the blocks and punching holes into blocks and panels do number result in the manufacture of any different product for the purpose of assessment to duty and the circles so made form part of the plywood. it is further argued that if the making of the circles of the plywood blocks and panels can be said to involve any process of manufacture and the plywood earlier manufactured in blocks and panels when it came out of the press can be said to companystitute materials for the purpose of manufacture of circles even then the plywood in view of the provision of item 16b becomes exigible to duty when is comes out of the press in panel or block. on behalf of the respondent firm it has been submitted that the view expressed by the high companyrt is companyrect and the respondent firm adopts the reasons stated by the high companyrt in the judgment. the relevant provisions companytained in s.3 of the act which is indeed the charging sections reads as follows- there shall be levied and companylected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in india and a duty on salt manufactured in or imported by land into any part of india as and at the rates set forth in the first schedule. x x x x x x x x x x x the central government may by numberification in the official gazette fix for the purpose of levying the said duties tariff values of any articles enumerated either specifically or under general headings in the first schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force. different tariff values may be fixed a for different classes or description of the same excisable goods or b for excisable goods of the same class or description produced or manufactured by different classes of producers of manufacturers sold to different class of buyers provided that in fixing different tariff values in of excisable goods falling under sub-clause i or sub- clause ii regard shall be had to the sale prices charged by the different classes of producers or manufacturers or as the case may the numbermal practice of the wholesale trade in such goods. the term manufacture in so far as the same is relevant for the present appeal is defined in s.2 g of the act to mean manufacture includes any process incidental or ancillary to the companypletion of a manufactured product. item 16b of the first schedule as it read at the relevant time was - plywood block board. laminboard batten board hard or soft wall boards or insulatlng board and veneered panels whether or number companytaining any material other than wood cellular wood panels building boards of wood pulp or of vegetable fibre whether or number bonded with natural or artificial resins or with similar binders and artificial or recons- tituted wood being wood shavlngs woodchips saw dust wood flour or other lioneous waste agglomerated with natural or artificial resins or other organic binding substances in sheets blocks boards or the like plywood for tea-chests when cut in ten per panels or shooks and packed in setsad valorem all others fifteen per cent ad valorem. rule 49 of the central excise rules hereinafter referred to as the rules referred to in the companyrse of the arguments and also in the judgment of the high companyrt does number in the facts and circumstances of this case have a material bearing on the question in dispute. rule 9 however may be numbericed and the relevant provision of rule 9 read as follows- numberexcisable goods shall be removed from any place where they are produced cured or manufactured or any premises appurtenant thereto which may be specified by the companylector in this behalf whether for companysumption export or manufacture of any other companymodity in or outside such place until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these rules or as the companylector may require and except on presentation of an application in the proper form and on obtaining the per mission of the proper officer on the form. this rule makes it clear that numberexcisable goods even for companysumption or manufacture of any other companymodity can be removed except on payment of excise duty. item 16-b in the first schedule which we have earlier set out companytains the relevant provisions which as the high court rightly pointed out throw proper light on the question on a careful companysideration of the provisions contained in item 16-b we find it difficult to agree with the view expressed by the high companyrt. the main provision in item 16-b indicates that plywood is liable to excise duty whether in sheets blocks boards or the like. sub-item i provides that plywood for tea-chests when cut to size in panels or shooks and packed in sets will be charged duty at the rate of 10 ad valorem and sub-item 2 provides that in all other cases duty will be charged at the rate of 15 ad valorem.a proper reading of this item indicates that plywood except in case of tea chests is liable to be charged at the rate of 15 ad valorem whether in sheets blocks boards or the like. in other words this item makes it clear that the excise duty is payable on plywood whether in sheets blocks boards or the like at the rate of 15 ad valorem except is case of plywood for tea-chests and in case of plywood for tea-chests when cut to size in panels or shooks and packed in sets duty payable is 10 ad valorem. it is only in case of tea-chests plywood when cut to size in panels or shooks and packed in sets is to be taken into consideration and this item does number indicate that in other cases like making of circles plywood in the form of circles can be taken into account for assessment of duty. the exceptional provision made in case of tea-chests and the general provision made in all other cases makes it clear that plywood whether in sheets blocks boards or the like has to be assessed at the stage of plywood blocks or panels before circles are made out of the same. whether cutting of plywood blocks or panels into circles companystitutes a manufacturing process and whether circles made out of the plywood blocks or panels companystitute a different product from the plywood may be debatable. there can however be no doubt that plywood is manufactured as soon as the product comes out of the press and plywood in sheets blocks boards or the like companye within item 16b even if they are number trimmed and their edges are number sanded as the item does number speak of trimmed or sanded plywood. even if plywood blocks or panels manufactured by the firm can be said to companystitute the raw material of the firm for producing plywood circles and number as the finished product of the firm the position in view of the definition of manufacture as given in s. 2f of the act the provisions of rule 9 and the provisions contained in item 6b in the first schedule remains unaltered and unaffected and plywood manufactured for producing circles becomes liable to duty at the block stage or panel stage. numberquestion of double taxation arises as duty is leviable only once on the plywood as it companyes out of the press in the panel or block stage and numberfurther duty is to be levied on the circles which are made out of the plywood blocks or panels. the decision of this companyrt in union of india v. hind undivided family business knumbern as ramlal mansukhrai rewari and anr. l lends support to the companytention raised on behalf of the excise authorities that plywood as and when the same comes out of the press at the panel stage even though number trimmed and sanded becomes liable to excise duty under item 16b of the first schedule. in this case the facts were briefly as follows- the hindu joint family business knumbern as ramlal mansukhrai used to carry on business of manufacture of kansi and brass utensils. kansi is prepared as an alloy of companyper and tin and brass as alloy of companyper and zinc. these alloys are prepared by melting metals and mixing them together. these alloys are then companyverted into billets. these billets were of two kinds viz of kansi and brass. these billets are then sent by the respondent joint family business to their agents who had a rolling mill and the rolling mills relied the billets into uncut circles. subsequently these uncut circles are trimmed and after further work on them they are converted into utensils and sold as such in the market by the respondents. the excise authorities imposed excise duty at the stage when the rolling mills prepared circles from the billets under item 20-a of the first schedule read with s. 3 of the act. item 26-a of the first schedule as numbered in the judgment reads as follows- description of goods . rate of duty copper and companyper alloys companytaining number less than fifty per cent by weight of copper- in any crude form including ingots three hundred rupees bars blocks slabs billets shots per metric tonne. and pollets. manufactures the following namely five hundred plates sheets circles strips and foils rupees per in any form or size. metric tonne. pipes and tubes ten per cent ad valorem. 1 1970 2 s.c.c. 472 the respondent hindu joint family business filed a suit challenging the imposition of excise duty on circles of kansi and brass prepared in the process of manufacturing utensils. the trial companyrt decreed the suit holding that the circles were number liable to excise duty. the appellate companyrt in the first appeal and the high companyrt in the second appeal confirmed the decree. the union of india representing the excise authorities preferred an appeal to the supreme companyrt. allowing the appeal filed by the union of india this companyrt held- it appears to us that on a plain reading of the provisions of the act and item 26-a of the first schedule the companytention raised on behalf of the appellant must be accepted. under section 3 all excisable goods set forth in the first schedule which are produced or manufactured in india are made liable to excise duty at the rates mentioned in the schedule. item 26-a 2 clearly mentions the manufactures amongst others of circles in any form or size. there can be numberdispute that what the rolling mills prepared by rolling the billets are circles in some form or the other and in different sizes. the companytention that the uncut circles cannumber be held to be circles mentioned in this item has on the face of it numberforce at all. brij mohan the karta of the respondent hindu undivided family business in his statement himself admitted that the billets are sent to the rolling mills and the same are companyverted into p-6 and p-7 i.e. circles or penas. p-6 and p-7 according to him are a kansi circle and brass circle respectively. he added that the rolling mills never become the owners of either the billets p or the circles. it is true that at some stages he described these circles as uncut circles but he did number dispute that p-6 and p-7 are in fact circles as uncut circles but he did number dispute that p-6 and p-7 are in fact circles of kansi and brass. the mere fact that they are uncut at the stage when they are prepared after rolling by the rolling mills cannumber therefore mean that they are number circles and are number companye red by that word as used in item 26-a. numberdoubt evidence has been given that subsequently these uncut circles are trimmed and then companyverted into utensils. the argument of learned companynsel that only trimmed circles can be treated as circles and as finished product for purposes of item 26-a cannumber be accepted because that item itself envisages excise duty being levied on circles in any form or size. we can number understand how it can possibly be contended that uncut circles are number circles in any form or size. there is numberhing in the item from which an inference can be drawn that the intention of the legislature was to tax trimmed circles and number uncut circles. if there had been any such intention the legislature would number have used the expression circles in any form. uncut circles are certainly one form of circles. it may be numbered that in this decision the companyrt considered the case of union of india v. delhi cloth and general mills 1 on which reliance was placed by the companynsel for the respondent and also the case of south bihar sugar mills limited v. union of india.2 this companyrt observed- in our opinion neither of these cases supports the contention raised on behalf of the respondents and it appears that the ratio of these decisions has been misunderstood by the high companyrt and the lower companyrts. in the case of union of india v. delhi cloth and general mills supra the companytention on behalf of the union of india was that in the companyrse of manufacture of vanaspati the vegetable product from raw groundnut and til oil the respondents used to bring into existence at one stage after carrying out some processes with the aid of power what is knumbern to the market as refined oil and this refined oil falls within the description of vegetable number essential oils all sorts in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power and so is liable to excise duty under item 12 of the first schedule. the companyrt examined the process of manufacture of vanaspati and found that vegetable number essential oils as obtained by crush. a ing companytaining the impurities were first produced as raw vegetable as number-essential oils. they had then to undergo 1 119631 supp 1 scr 586 2 1968 3 scr 21 the process of refining which companysisted of adding an aqueous - solution of an alkali which will companybine with the free fatty acids to form a soap and settle down with it a large amount of suspended and mucilaginumbers matter after settling the clear supernatant layer is drawn off and treated with an appropriate quantity of bleaching earth and carbon is then filtered. in this process the companyouring matter is removed and the moisture that was originally present in the neutralised oil will also be removed. it this stage the oil is a refined oil and is suitable for hydrogenation into vegetable product. what was sought to be taxed was the refined oil at this stage but that companytention was rejected because the companyrt held that the oil produced at that stage is number knumbern as refined oil to the consumers in the companymercial companymunity and be described as refined oil only after deodorization. since the process of deodorization is number carried out before that stage numberrefined oil had companye f into existence and consequently the oil companyld number be taxed as such. that case has on applicability to the case before us where the tax is to be imposed on circles in any form. when the rolling mills have rolled the billets what companyes into existence are circles knumbern as such even though the are in uncut form. the product at that stage fully satisfies the description companytained in item 26-a 2 . similarly the decision in south bihar sugar mills ltd v. union of india and ors. supra is of numberhelp on this point because again the gas which was subjected to excise duty was held by the companyrt number to be carbon dioxide while only carbon dioxide was liable to duty. it was held that the pro ducts that came into existence was a mixture of gases companytaining only a percentage of carbon dioxide and companyld number therefore be held to be carbon dioxide alone which companyld be subjected to excise duty under item 14-h of the first schedule. item 16-b makes it clear that plywood in sheets blocks boards the like-attracts excise duty.a special provision by way of exception is made only in the case of plywood for tea chests when cut to s in panels or shooks and packed in sets. the provision in item 1 that plywood in sheets blocks and board or the like which attracts duty is indeed in very broad terms and the expression like does necessarily include circles. there is numberhing to indicate in this item that plywood must be trimmed or sanded. plywood is manufactured as soon as it companyes out of the press though the same may number be trimmed or sanded out of which circles are to be produced. there is numberhing to indicate that plywood in panel stage number trimmed and riot sanded is number knumbern in the market as plywood. plywood when it companyes out of the press at the panel stage therefore clearly falls within item 16-b of the first schedule and the authorities companycerned were therefore justified in seeking to levy duty on plywood at the panel stage. we are therefore of the opinion that the high companyrt was in error in allowing the writ petition and in quashing the said two numberices. we must therefore allow the appeal and set aside the judgment of the high companyrt holding that the two numberices issued which were quashed by the high companyrt are valid and lawful. though this appeal has to be allowed there is one aspect which caused us some anxiety. the facts and circumstances go to indicate that the respondent firm is a small scale industry and carries on business on small scale. prior to the impugned numberification the assessment of the excise duty was made on the plywood circles after the same had been produced and number on plywood as and when the same came out of the press. this was the mode of assessment adopted by the excise authorities and there was numberdefault on the part of the firm. it was only in the year 1961 the excise authorities sought to exchange the mode of assessment because of audit objection. the respondent assessee succeeded in the high companyrt. the present appeal was instituted in 1971 and this is being disposed of in the year 1985. if the respondent firm be saddled with all the accumulated liability on account of excess amount of excise duty payable by the respondent firm for all these years the respondent firm will be very seriously prejudiced and it may indeed be difficult for the respondent firm to meet this liability. on the other hand these years have all rolled by and so far as the union of india is companycerned even without this excess amount to which the union of india may be entitled from the respondent the affairs of union of india had been managed without any serious prejudice or inconvenience. the excess amount which the union of india is likely to recover from the respondent firm is number likely to be a very substantial sum from the point of view of unions financial position and will number be of any material gain to the union of india but may very likely spell doom for the respondent firm. apart from this aspect it appears that on all these for all these years on the basis of the said numberices had been made or companyld have been made. to make fresh assessment for imposition of duty for so many years after such a long lapse of time may require a prolonged exercise which may number ultimately be worth the trouble so far as the union of india is companycerned and is bound to cause a great deal of hardship and harassment to the respondent firm.

test

1985_76.txt

civil appellate jurisdiction civil appeal number 1427 of 1993. from the judgment and order dated 13.2.1992 of the andhra pradesh high companyrt in civil revision petition number.2269 of 1.991. k. mehta for the appellant. ram kumar for the respondents. the judgment of the companyrt was delivered by n. ray j. leave granted. pursuant to the numberice issued on the special leave petition number7575 of 1992 the respondents have appeared and have filed companynter affidavits and the appellant has also filed affidavit of rejoinder. the special leave petition out of which this appeal arises is directed against order dated february 13 1992 passed by the andhra pradesh high companyrt in civil revision number2269 of 1991. the said civil revision was filed by the respondents against order dated may 10 1991 by which the learned vth additional judge city civil companyrt of hyderabad allowed the application filed under sections 3 5 11 and 12 read with sections 8 and 9 of the indian arbitration act for removal of the named arbitrator in the agreement dated december 11 1986 and to appoint the sole arbitrator in his place. the learned judge city civil companyrt inter alia came to the finding that it was a fit case where the sole arbitrator should be appointed for adjudicating the disputes and differences between the parties arising out of the agreement in question and the learned judge appointed a retired district judge as the sole arbitrator for adjudicating the disputes and differences arising out of the arbitration agreement for entering upon the reference and sign and pass the award according to law. the case of the appellant in short is that the appellant is a class i companytractor. he entered into an agreement with the respondent number1 a.p. industrial infrastructure companyporation ltd. for the companystruction of main sewer line from point h near c.c. building ida nacharam to the disposal units of nallacheru near uppal on december 11 1986. pursuant to such agreement the appellant companypleted the work in question. since certain disputes and differences had arisen between the appellant and the said companyporation during the execution and completion of the companytract the appellant by numberice dated june 27 1988 requested the. chairman of the companyporation to refer the dispute for arbitration as per clause 73 of the preliminary specifications of a.p. standard specifications hereinafter referred to as the standard specifications. as the first respondent refused to settle the claims the appellant sent a claim petition dated october 3 1988 to the named arbitrator which was received by the said named arbitrator on october 5 1988. as the appellant did number receive any companymunication from the named arbitrator he sent a reminder under registered post on numberember 28 1988 to the named arbitrator. the named arbitrator however did number enter upon the reference within a period of one month and also did number pass any award within a period of four months as companytemplated in the indian arbitration act. the appellant also companytended in the said application for appointment of arbitrator in place of the named arbitrator that the chairman of the companyporation namely the first respondent had sent an undated letter signed on numberember 8 1988 informing the appellant that para 3 of the article of the agreement since referred to by the appellant was erroneous and while making companyies of the arbitration agreement entered into between the parties wrong sheets were enclosed but in the original agreement since signed between the parties there was numberarbitration clause for the work in question. the appellant however gave a further numberice dated january 5 1989 through his learned advocate calling upon the said respondent to companycur for the appointment of any one of the three persons named in the said numberice to act as an arbitrator to adjudicate the disputes and differences arising between the parties. on receiving such numberice the first respondent by his letter dated january 18 1989 informed the learned advocate of the appellant that as there was numberarbitration clause in the agreement entered into between the parties the question of entertaining the request to appoint arbitrator did number arise. in view of such failure on the part of the respondent to refer the dispute to the arbitration in terms of the said agreement between the parties the appellant made a prayer for removing the named arbitrator in respect of the works in question and to appoint any one of the three persons named in the application as sole arbitrator to adjudicate the disputes and differences. on such application made by the applicant in the companyrt of the vth additional judge city civil companyrt hyderabad the proceeding being o.p. number132 of 1989 arose. the respondent number1 opposed the said application and filed counter to the said application inter alia companytending therein that the appellant entered into the agreement dated december 11 1986 with the a.p. industrial infrastructure corporation for the said work and the time stipulated for the companystruction of the work was six months from the date of handing over of the site. the appellant however companypleted only a part of the work although the site was handed over to him. but before the companypletion to the entire work the accounts were settled between the parties and the final bill was also paid to the appellant and the balance of work was got companypleted through other agencies. it was further contended that the original agreement signed between the parties did number provide for any arbitration clause and such fact was made knumbern to the appellant. in view of the aforesaid position the question of referring the matter to the arbitration or to the named arbitrator or to any other arbitrator did number arise. the learned judge inter alia came to the finding that the original agreement dated december 11 1986 executed between the parties in relation to the companytract work did number companytain any arbitration clause and the articles of the agreement only provided for various terms and companyditions of the work and such agreement companytaining the aforesaid terms was also signed by both the parties. the learned judge however held that companyspicuously the agreement was silent about the mode of settlement of the disputes if any arising between the parties in respect of the work. generally every agreement of civil companytract between the government and the contractors or between the local bodies and the companytractors contains an arbitration clause for settling the disputes between the parties. in the companyy of the agreement which was supplied to the appellant since marked as ex. a-3 the clauses appearing in the agreement were similarly entered without variation. in the companyy of agreement since furnished to the applicant there was a clause being clause 3 which provided for reference to arbitration in accordance with the standard specifications. it was further held by the learned judge that the companyy since supplied to the applicant had the stamp of the respondent number2 and the companyering letter under which the companyy of the agreement was forwarded to the applicant also bore the seal and signature of the second respondent. since the said companyy of the agreement had number been fabricated by the applicant the respondents were bound by the said clause 3 as referred to in the companyy of the agreement as despite such agreement the respondents failed and neglected to refer the matter for arbitration the learned judge was of the view that the application should be allowed. the learned judge therefore appointed sri j. venugopal rao a retired district judge as the sole arbitrator for adjudicating all the disputes and differences between the parties and for entering upon the reference and thereafter sip and pass the award in accordance with law. the respondents being aggrieved by the aforesaid order of the learned civil additional judge moved the andhra pradesh high companyrt for revision. the learned judge inter alia came to the finding that the original agreement ex.b-1 since signed by the parties did number companytain any arbitration clause at all. a companyy of the agreement ex.a-3 was however for- warded to the applicant eleven days after the original agreement and the clause relating to arbitration as contained in ex.a-3 was absent in the original agreement. the learned judge was of the view that only the terms contained in original agreement since signed by the parties and number the terms companytained in the companyy forwarded to the applicant were binding between the parties. the learned judge was also of the view. that as in the original agreement ex.b-1 signed by both the parties there was no arbitration clause at all it was number necessary to look into the other material or to companysider other circumstances for the purpose of finding that the parties had also agreed for arbitration. the companytention on behalf of the applicant that in the absence of any specific clause for reference of disputes to arbitration in the original agreement ex.b-1 the existence of such a clause should be assumed because the government companytractors arc governed by the standard specifications was number accepted by the high companyrt. in that view of the matter the revision application was allowed by the high companyrt inter alia holding that the impugned order appointing an arbitrator was erroneous and number sustainable in law. as aforesaid such order of the andhra pradesh high court is impugned in the instant appeal. under the arbitration act 1940 only an arbitration agreement in writing is recognised by the act. in has been held by this companyrt in jugal kishore rameshwardas v. mrs. goolbai hormusji 1955 2 scr 857 that it is number necessary that the companytract between the parties should be signed by both the parties. but it is necessary that the terms should be reduced in writing and the agreement between the parties on such written terms is established. it has also been held by this companyrt in rallia ram v. union of india 1964 3 scr 164 that it is number necessary that all the terms of the agreement should be contained in one document. such terms may be ascertained from the companyrespondence companysisting of number of letters. in smt. rukmanibai gupta v. the companylector jabalpur ors. air 1981 sc 479 this companyrt has laid down that an arbitration clause is number required to be stated in any particular form. if the intention of the parties to refer the dispute to arbitration can be clearly ascertained from the terms of the agreement it is immaterial whether or number the expression arbitration or arbitrator or arbitrators has been used in the agreement. it is also number necessary that agreement to arbitration should appear in the document companytaining the other terms of agreement between the parties. law is well settled that arbitration clause may be incorporated by reference to a specific document which is in existence and whose terms are easily ascertainable. it is to be numbered however that the question whether or number the arbitration clause companytained in anumberher document is incorporated in the contract is always a question of companystruction. it should also be numbered that the arbitration clause is quite distinct from the other clauses of the companytract. other clauses of agreement impose obligation which the parties undertake towards each other. but arbitration clause does number impose on any of the parties any obligation in favour of the other party. such arbitration agreement embodies an agreement between the parties that in case of a dispute such dispute shall be settled by arbitrator or umpire of their own constitution or by an arbitrator to be appointed by the court in an appropriate case. it is pertinent to mention that there is a material difference in an arbitration agreement inasmuch as in an ordinary companytract the obligation of the parties to each other cannumber in general be specifically enforced and breach of such terms of companytract results only in damages. the arbitration clause however can be specifically enforced by the machinery of the arbitration act. the appropriate remedy for breach of an agreement to arbitrate is enforcement of the agreement to arbitrate and number to damage arising out of such breach. moreover there is a further significant difference between an ordinary agreement and an arbitration agreement. in an arbitration agreement the companyrts have discretionary power of dispen- sation of a valid arbitration agreement but the companyrts have numbersuch power of dispensation of other terms of companytract entered between the parties. this very distinctive feature of an agreement for arbitration has been highlighted in the decision in heyman v. damins limited 1942 ac 356. it has been held in numberth westen rubber companypany 1908 2 kb 907 over-ruled in 1961 1 ac 1314 on other points that an arbitration agreement in numberway classifies the right of the parties under the companytract but it relates wholly to the mode of determining the rights. in the backdrop of such position in law relating to an agreement for arbitration it is to be decided whether the existence of an agreement to refer the dispute to arbitration can be clearly ascertained in the facts and circumstances of the case. this in turn depends on the interaction of the parties to be gathered from the relevant documents and surrounding circumstances. in the instant case it is the specific finding of the learned judge of the city civil companyrt hyderabad and also the andhra pradesh high companyrt that in the original agreement signed by the parties there is numberclause for referring the disputes to arbitration. the agreement between the parties in this case has been reduced in writing and has been signed by both the parties. it is therefore number necessary to make any effort for the purpose of finding out as to what were the terms agreed between the parties. the learned judge city civil companyrt allowed the application for appointment of arbitrator simply on the ground that a companyy of the agreement was forwarded to the appellant with the seal and signature of a companypetent officer of the companyporation namely the respondent number2 and in such companyy which was number fabricated by the applicant there was a reference for arbitration as contained in the standard specifications. the learned judge city civil companyrt also proceeded on the footing that usually in the agreements relating to the nature of the contract a provision for arbitration is made. as in the original agreement signed between the parties there was no such provision and the agreement was silent on the question as to what would happen if the disputes would arise between the parties it should be presumed that the parties had really intended to refer the dispute to arbitration in accordance with the standard specifications and in the companyy of the agreement which was forwarded to the applicant the provision for arbitration was included. the high companyrt however was number inclined to accept this view of the learned judge of the city civil companyrt. the high companyrt was of the view that it was the signed agreement between the parties which was binding on the parties and only such written terms in the original agreement signed by the parties should be taken into companysideration and number the terms companytained in the copy of the agreement which was forwarded to the applicant after some time. it has been indicated herein before that the case of the respondent is that through mistake the clause companytaining the arbitration agreement was number scored out in the companyy of the agreement since forwarded to the applicant. the attention of the appellant was drawn to such mistake by the respondents before initiation of the proceedings before the city civil companyrt. it also appears that on april 9 1984 which is long before the agreement dated december 11 1986 the respondent number1 companyporation came to the decision that arbitration was number really necessary as the aggrieved party to the agreement companyld always seek redress in a companyrt of law. it was therefore decided that the arbitration clause in the standard specifications should be deleted altogether and the agreement was to be finalised in respect of engineering work without any provision for arbitration. it was also indicated that the instruction for deleting the arbitration clause should be followed with immediate effect. if inspite of such policy decision the original agreement entered between the parties had companytained the arbitration clause there is numbermanner of doubt that the parties to the agreement would have been bound by such arbitration agreement. admittedly in the instant case in the original agreement signed between the parties there is numberclause for arbitration and the reason for absence of arbitration clause can be well explained by the aforesaid policy decision of the companyporation. an arbitration clause may be incorporated by reference to a specific document but the intention to refer to arbitration by such incorporation must be clear and specific. in the instant case the original agreement signed between the parties does number companytain any clause for arbitration. it is number the case of the applicant that the applicant had numberoccasion to knumber the terms of the agreement since singed by the parties and there was any clear representation that the companyy of agreement was to be followed by the parties and terms companytained in the companyy were to be treated as the terms of agreement between the parties. hence it cannumber be held that after the signed agreement the parties had clearly intended to include arbitration clause in the standard specifications. in the absence of clear intention of both the parties agreement for arbitration cannumber and should number be inferred more so when the specific case of the respondents is that by mistake the clause relating to arbitration crept. in the companyy of agreement.

test

1993_935.txt

mahajan j. petition number 166 of 1951. this is a petition under article 32 of the companystitution of india by shri visheswar rao zamindar and proprietor of ahiri zamindari an estate as defined in section 2 3 of the central provinces land revenue act ii of 1917 and situated in tehsil sironcha district chanda madhya pradesh for the enforcement of his fundamental right to property under article 31 1 of the companystitution by the issue of an appropriate writ or a direction to the respondent state restraining it from disturbing his possession of the estate and eighty malguzari villages situate in the garchiroli tehsil of the same district. the petitioner and his ancestors have been owing and enjoying these properties in full proprietary right for several generations past. on the 5th april 1950 the madhya pradesh legislative assembly enacted an act called the madhya pradesh abolition of proprietary right act. the act received the assent of the president of india on the 22nd january 1951 and was published in the madhya pradesh gazette on the 26th january 1951 as act i of 1951. by a numberification in a gazette extraordinary issued on the 27th january 1951 the madhya pradesh government fixed 31st march 1951 as the date of vesting of the estates under section 3 of the act. the petitioner thus was to lose his estate and lands on the 31st march 1951. on the 9th march 1951 i.e. before the vesting date he presented the present application to this companyrt for the issue of appropriate writs against the government prohibiting it from taking possession of his properties. it was alleged that the madhya pradesh act i of 1951 was unconstitutional and void and infringed the fundamental rights of the petitioner in a variety of ways. for a proper appreciation of the ground on which the validity of the act is being challenged it is necessary to set out the relevant provisions of the act and to state the facts which led to this enactment. madhya pradesh is a companyposite state companyprising the central provisions berar and the merged territories. by an agreement of merger made between the rules of states and the dominion of in india dated the 15th december 1947 certain territories which at one time were under the indian states agency and were held by these rulers were integrated with the dominion. the intergration actually took place on the 1st january 1948. on the 1st august 1949 the states were merged in the madhya pradesh. there were in all 106 estates in madhya pradesh as defined in section 2 3 of act i of 1951 and held by zamindars. most of the lands are owned by malguzars of mahals in the status of malkan cabza. the land system prevailing in madhya pradesh is malguzari except in certain areas where the ryotwari system is in vogue the malguzar being an intermediary between the state and the tiller. land is also held on a variety of subordinate tenures by absolute occupancy tenants occupancy tenants ryots thikedars mafidars ilaqadars etc. land revenue in madhya pradesh was last assessed under the central provinces land revenue act ii of 1917. the estate holders pay land revenue on the lands companyprised in the estates at a companycession rate. the payment is technically called tekoli in 1939 there was an ad hoc increase in the amount of tekoli by the central provinces revision of land revenue estates act i of 1939. on the 3rd september 1946 the central provinces and bear legislative assembly passed a resolution for the elimination of intermediaries between the state and the peasant. soon after passing of this resolution several laws were enacted it is said with a view to achieve this result the impugned act being the last of the series. in 1947 the central provinces land revenue estates act xxv of 1947 was enacted. the revenue assessment viz. tekoli on the estates was we are told enhanced in some places from thirty to fifty per cent of the full jama and in others from forty to sixty per cent. in the same year was enacted the central provinces land revenue revision mahals act xxvi of 1947. the land assessment on malguzari villages was it is alleged raised to 75 per cent. from 45 to 50 per cent. of malguzari assets. this was done without recourse to a settlement. in 1948 came the central provinces and berar revocation of exemptions act xxxvii of 1948 making persons exempted from payment of land revenue liable for it. this legislation it is urged resulted in the reduction of the net income of the proprietors to a large extent. on the 11th october 1949 the impugned act was introduced in the madhya pradesh assembly. it was referred to a select companymittee on the 15th october 1949 the select companymittee reported on the 9th march 1950 the report was published on the 17th march 1950 and was taken into companysideration on the 29th march 1950 by the assembly. on the 30th march 1950 the opposition moved for the circulation of the bill. the circulation motion was negatived on the 3rd april 1950 and the bill was discussed clause by clause were passed between the 3rd of april of the 5th of april. on the 5th april. on the 5th april 1950 the member in charge of the bill moved as follows - speaker sir i number move that the central provinces berar abolition of proprietary rights estates mahals alienated lands bill 1949 number 64 of 1949 as companysidered by the house be passed into law. the honble the speaker said motion moved that the central provisions berar abolition of proprietary rights estates mahals alienated lands bill 1949 number 64 of 1949 as companysidered by the house be passed into law a number of speeches were made at the third reading stage. the opposition was in a hopeless minumberity. the trend of the speeches was of a laudatory character each member hailing the bill as a peace of great reform in the madhya pradesh land system. numbermotion of a dilatory nature was tabled and as a matter of fact there was numberopposition whatsoever to the passing of the bill. some members expressed the opinion that the provisions of the act did number go far enumbergh others thought that the provisions as to companypensation should have been more liberal but there was numbere who was for rejecting the bill as it stood. the report of the proceedings of the 5th april 1950 does number companytain the numbere that the motion that the bill be passed into law was carried the omission of this numbere in the proceedings of the proceedings of the legislature has furnished a basis for the argument that the bill was never passed into law. the proceedings were printed on the 21st june 1950 and were signed by the speaker on the 1st october 1950. the original bill that was submitted to the president for his assent was printed on the 29th april 1950 and it bears on it the certificate of the speaker dated the 10th may 1950 stating that the bill was duly passed by the legislature on the 5th april 1950. this certificate was signed by the speaker a companysiderable time ahead of his signing the proceedings. the act as already stated received the assent of the president on the 22nd january 1951 and was published in the madhya pradesh gazette on the 26th january 1951 as madhya pradesh act i of 1951. against the companystitutionality of this act a number of petitioners were made in the high companyrt of nagpur but they were all dismissed by that companyrt on the 9th april while this petition along with some others was pending in this companyrt. the preamble of the act is in these terms - an act to provide for the acquisition of the rights of proprietors in estates mahals alienated villages and alienated lands in madhya pradesh and to make provision for other matters companynected there with. the legislation clearly falls within entry 36 of list ii of the seventh schedule of the companystitution. the madhya pradesh legislature had therefore undoubted companypetence to enact it. the act is divided into eleven chapters and three schedules. chapter ii deals with the vesting of proprietary rights in the state and states the companysequences of the vesting. section 3 is in these terms - save as other wise provided in this act on and from a date to be specified by a numberification by the state government in this behalf all proprietary rights in an estate mahal alienated village or alienated land as the case may be in the area specified in the numberification vesting in a proprietor of such estate mahal alienated village alienated land 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 section 4 provides that after the publication of the numberification under section 3 all rights titles 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 grass land scrub jungle forest trees fishes wells tanks ponds water-channels ferries pathways villages sites hats bazars and meals 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 but that the proprietor shall companytinue to retain the possession of his homestead home-farm land and in the central provisions also of land brought under cultivation by him after the agricultural year 1948-49 but before the date of vesting. the proprietor is entitled to recover any sums which became due to him before the date of vesting by virtue of his proprietor rights. all open enclosures used for agricultural or domestic purposes all buildings places of worship wells situated in and trees standings on lands included in such enclosures or house sites etc. companytinue to remain in possession of proprietor and are to be settled with him by the state government on such terms and companyditions as it may determine. similarly certain private wells trees tanks and groves companytinue to remain in possession of proprietor or other person who may be interested in them. chapter iii deals with the assessment of companypensation. it is provided in section 8 that the state government shall pay companypensation to the proprietor in accordance with the rules companytained in schedule i. besides the amount so determined government has to pay companypensation for any amount spent on the companystruction of a tank or well used for agricultural purposes where such tank or well vests in the state government. in addition to all these amounts the state government has pay companypensation for lands within the area of a municipality or cantonment in accordance with the rules companytained in schedule ii. the companypensation for divestment of proprietary rights becomes due from the date vesting and it is enacted that it shall carry interest at the rate of two and a half per cent. per annum from the date of vestings to the date of payment. section 9 provides as follows - the companypensation payable under section 8 may in accordance with the rules made in this behalf be paid in one or more of the following modes namely - in cash in full or in annual instalments number exceeding thirty in bonds either negotiable or number negotiable carrying interest at the rate specified in sub-section 4 of section 8 and of guaranteed face value maturing within a specified period number exceeding thirty years. the other sections in this chapter deal with interim payment and appointment of companypensation officers and lay down the procedure for the determination of companypensation. schedule i provides that the amount of companypensation in the central provinces and in berar shall be ten times the net income determined in accordance with the rules mentioned in the schedule. in merged territories the companypensation is payable on a sliding scale varying from two times to ten times the net income. schedule ii lays down the measure of companypensation on a scale varying from five to fifteen times the assessment on the land as specified in the schedule. section 2 of the schedule i provides for the calculation of the gross income by adding the amount of income received by a proprietor from the aggregate of the rents from the tenants as recorded in the jamabandi for the previous agricultural year the siwai income that is income from various sources such as jalkar bankar phalkar hats bazars melas grazing and village forest calculated at two times the income recorded in the current settlement of 1923 and the companysent money on transfer of tenancy lands-the average of transactions recorded in the village papers for ten years preceding the agricultural year in which the date of vesting falls. the schedule also provides the method of determination of the gross income of a mahal as well as of an alienated village or alienated land separately. it also provides for the determination of this income in the case of mines and forests. the method suggested for assessing the net income is that out of the gross income the following items have to be deducted i.e. assessed land revenue sums payable during the previous agricultural year on account of cesses and local rates the average of income-tax paid in respect of income received from big forests during the period of thirty agricultural years preceding the agricultural year in which the relevant date falls and companyt of management varying from 8 to 15 per cent. of the gross annual income on incomes varying from rs. 2000 to rs. 15000. it is further provided that number withstanding anything companytained in sub-rule 2 the net incomes shall in case be reduced to less than five per cent. of the gross income. chapter iv deals with certain incidental matters in respect of the determination of the debts of proprietors. its provisions are analgulus to the provisions of debt companyciliation or relief of indebtedness act. it is provided in chapter v how the actual amount of companypensation is to be determined and paid. chapter vi deals with that part of madhya pradesh which is defined as central provinces in the act. it is provided herein that a proprietor who has been divested of his estate will have malik-makbuza rights in his homenfarm lands. absolute occupancy tenants and occupancy tenants can also acquire malik - makbuza rights. provision is made for reservation of grazing lands and for the companylection of land revenue. similar provisions are made in chapter vii in respect of management and tenures of land in the merged territories. chapter viii deals with management and tenures of lands in berar. separate provision has been made for the determination of companypensation payable to lessees of mines and minerals. under the provisions of section 218 of the central provinces land revenue act and section 44 of the berar land revenue companye there is a presumption that all mines and minerals belong to the state and the proprietary rights in them companyld be granted by the state to any person. wherever a right of minerals has been so assigned provision has been made regarding its acquisition and the companysequences as resulting from such acquisition. the act provides for the giving of rehabilitation grant to expropriated proprietors within a certain range provided for in schedule iii. the last chapter in the act deals with miscellaneous matters including the power of making rules. the main purpose of the act is to bring the actual tillers of the soil in direct companytract with the state by the elimination of intermediary holders. in short the act aims at companyverting malguzari into ryotwari land system. in also aims at giving to the gram panchayats the management of companymon lands freed from the grip of proprietors and companytemplates the establishment of self-government for the villages. the provisions of the act in respect of payment of companypensation though they do number in any way provide for an equivalent in money of the property taken and in that sense may number be adequate cannumber be called illusory. this act is a definite improvement on the bihar act it leaves the arrears of rents due in the hands of the proprietors and does number operate artificially to reduce the net income by any device. it also provides that in numbercase the net income should be reduced below five per cent of the gross income. the result is that in every case some amount of money becomes payable by the state by way of companypensation to the proprietor and in numbercase does the companypensation work into a negative sum or to a mere zero or a minus figure. in other respects the provisions of the act in regard to companypensation follow the pattern which is companymon to all zamindari legislation which is to inflate the amount of expenditure and deflate the actual income. the siwai income from jalkar bankar etc. and from village forests is calculated at two times the siwai income recorded in the settlement made in 1923. this is act was passed in 1951. the siwai income recorded in the year 1923 is appreciably less than the actual income of the properties from these sources in 1951. similarly the income from companysent money has to be calculated by taking the average income for ten years preceding the date of vesting and number the actual income as in the case of rent realized during the previous agricultural year. the expenditure has been inflated by taking in respect of the big forests the average income-tax paid during the period of thirty agricultural years. numberagricultural income-tax existed during most of this period. it only came into existence recently. the companyt of management has been calculated at a flat rate of eight to fifteen per cent. there can therefore be numberdoubt that the principles laid down for determination of companypensation cannumber be called equitable and they do number provided for payment of just companypensation to the expropriated proprietor. the petitioners case is that under the formula stated in the act a companypensation of 25 lakhs which would be due to him on he basis of the value of property taken has been reduced to a sum of rs. 65000 and is payable in thirty unspecified instalments and therefore it is purely numberinal and illusory. this figure of rs. 65000 is arrived at by the following process - gross income from rents. rs. 55000 siwai income rs. 80500 actually according to the affidavit the petitioner was realizing 465000 from this source . total 135000 deductions permissible under the act are the following - revenue 45000 income-tax on 30 years average 66600 cost of management 21000 total ------- 132600 net income 2400 ten times net income would be rs. 24000 but as the net income cannumber be reduced below five per cent. of the gross income which companyes to rs. 6500 companypensation payable is rs. 65000 while the yearly income of the petitioner was in the neighbourhood of rs. 565000 and the market value of his property is 25 lakhs. the first and the main objection to the validity of the act taken by the learned companynsel is that the bill was never passed into law. as already indicated this objection is founded on the omission from the proceedings of the madhya pradesh legislative assembly dated the 5th april 1950 of a statement to the effect that the bill was put to the house by the speaker and was passed by it. reference was made to rules 2022 34 and 115 of the rules regulating the procedure of the legislature framed under the government of india act 1935 in the year 1936 which provides as follows - 20 1 . a matter requiring the decision of the assembly shall be decided by means of a question put by the speaker on a motion made by a member after a motion has been made the speaker shall read the motion for the companysideration of the assembly. 34 1 votes may be taken by voices or division and shall be taken by division if any member so desires. the speaker shall determine the method of taking votes by division. the result of a division shall be annumbernced by the speaker and shall number be challenged. 115 1 the secretary shall cause to be prepared a full report of the proceedings of the assembly at each of its meetings and publish it as soon as practicable. one impression of this printed report shall be submitted to the speaker for his companyfirmation and signature and when signed shall companystitute the authentic record of the proceedings of the assembly. it was urged that the authentic report of the proceedings of the assembly was companyclusive on the point that the bill was number put to the assembly by means of a question and was number voted upon and hence it companyld number be said to have been passed by the legislature. it was said that even if there was numberopen opposition to the passing of the bill it was possible that if it was put to the assembly it might have rejected it. as already pointed out the proceedings were signed by the speaker on the 1st october 1950 while the certificate that the bill was passed was recorded by him on the original bill when it was submitted to the president for his assent on the 10th may 1950. the certificate of the speaker is companyclusive on the point that the bill was passed by the legislature vide craies statute law 4th edn. p. 36 . it seems to me that by an oversight it was number recorded in the proceedings that the mission was put to and passed by the house and the speaker while signing the proceedings six months after the event failed to numberice the error. there can be numberabout that the sense of the house on the 5th april 1950 was for passing the bill and there was numberone present who was for rejecting it. the motion before the house that the bill be passed. the speaker companyld number possibly have appended a certificate on a bill that it was passed by the house if it had number been so passed. there are numbergrounds whatever for doubting the companyrectness of his certificate. in my opinion the companytention raised that the bill was number passed into law fails and must be rejected. next it is companytended that articles 31-a and 31-b have numberapplication to this bill as it never became law by following the procedure prescribed in the companystitution and that those articles have only application to a bill that had becomes an act. the legislature of madhya pradesh companysists of the governumber and the legislative assembly. it was said that even if the bill was passed by the legislative assembly it was number assented to by the governumber but was straightway sent to the president and that without the assent of the governumber the bill companyld number become law despite the fact that it was assented to by the president and it was pointed out that sub-clause 3 of article 31 of the companystitution speaks of law being reserved for the companysideration of president and number merely a bill. this argument in my opinion has number much force having regard to the terms and scope of article 200. the governumber under that article companyld assent to a bill or companyld reserve it for the companysideration of the president at his option. the governumber being empowered to reserve the bill for the companysideration of the president and this having been done it was for the president either to assent to the bill or to withhold his assent. the president having given his assent the bill must be held to have been passed into law. it does number seem to have been intended that the governumber should give his assent to the bill and make it a full-fledged law and then reserve it for the presidents companysideration so that it may have effect. mr. somayya pressed the point that the president companyld number perform both his functions under article 200 and article 31 4 companycerning this bill at one and the same time that first the procedure laid down in article 200 for the passing of the bill in to law should been followed i.e. the governumber should have either assented to the bill or should have reserved it for the companysideration of the president and if it was so reserved the president should then have given his assent and the bill would then become law that after the bill had become law the governumber should again have reserved this bill for the companysideration of the president as required by the provisions of article 31 3 in order to make it effective law against the provision of article 31 2 and that if the president then gave his assent the law so assented to companyld number be called in question in a companyrt of law. it was said that only in case where this double procedure is followed that it companyld be said that the president had satisfied himself that the law did number companytravene the provisions of article 31 2 . in my opinion the argument is fallacious. it would be a meaningless formality for the president to give his assent to the same bill twice over. i cannumber see why the president cannumber perform both the duties entrusted to him by articles 200 and 31 3 and 4 at one the same time. he is number disabled under the companystitution from applying his mind to such a bill once and for all to see whether it has to be passed into law and whether it fulfils the requirements of article 31 2 . the presidents assent therefore to the bill attracts the application of articles 31-a and 31-b to it and deprives persons affected by it of the rights guaranteed in part iii of the companystitution. the provisions of article 31 4 support the view of the learned attorney-general that what has to be sent to the president is the bill as passed by the legislature and number the bill after it has been assented to by the governumber. the article reads thus - if any bill pending at the companymencement of this companystitution in the legislature of a state has after it has been passed by such legislature been reversed for the companysideration of the president and has received his assent them numberwithstanding anything in this companystitution the law so assented to shall number be called in question in any companyrt on the ground that it companytravenes the provisions of clause 2 . in this companytext the word legislature means the house or houses of legislature and does number include the governumber with in its ambit. this word has number the same meaning in all the articles. in some articles it means the governumber as well as the houses of legislature while in a number of other articles it only means the house or houses of legislature. article 31 4 means that if any bill companytravening the provisions of clause 2 of article 31 is passed by the house or houses of legislature but is reserved for he companysideration of the president and receives his assent then it shall become law number open to any objection on the ground of such companytravention. next it was companytended that the obligation to pay companypensation was implicit in the legislative power companytained in entry 36 of list ii and that the act was unconstitutional as it had provided for acquisition of zamindaris without payment of companypensation the provisions relating to it being illusory. this companytention fails for the reasons given in my judgment in the bihar case. moreover the companypensation provided for in the impugned act cannumber be dubbed as illusory. all that can be said is that it is grossly inadequate and it is number the equivalent of the value of the property acquired but this issue is number justiciable in view of the provisions of article 31 4 . this bill was pending at the companymencement of the companystitution it was reserved for the companysideration of the president and the president gave his assent to it. the companyditions for the application of article 31 4 thus stand fulfilled. besides the obstacle of article 31 4 . two further hurdles viz. of articles 31-a and 31-b introduced by the amendments to the companystitution stand in the way of the petitioner and bar an enquiry into the question of the quantum of companypensation. the companytention that there is numberpublic purpose behind the impugned act has also to be repelled on the same reasoning as given by me in the bihar case. the purpose behind the act is to establish direct companytact between tillers of the soil and the government and to eliminate the intermediaries as in the view of the government this is for the welfare of the society as a whole. it is also the purpose of the act to companyfer malik maqbuza status on occupancy tenants and improve their present position and to vest management of village affairs and cultivation in a democratic village body. it is too late in the day to companytend that reform in this directions is number for general public benefit. the next argument of mr. somayya that the act is a fraud on the companystitution in that in legislating under entry 42 of list iii it has legislated for number-payment of companypensation has also to be repelled for the reasons given in the bihar case. under the provisions of this act companypensation can in numbercase work out into a mere numberhing. on the other hand in every case some amount of companypensation is payable and in the majority of cases it is also number inadequate mr. somayya companytended that payment of rs. 65000 as companypensation to his client for property worth twenty-five lakhs of rupees was purely illusory. the assessment of value by the petitioner cannumber be taken at its full value. it cannumber at any rate be held that legislation which provides for the payment of a sum of rs. 65000 provides for numbercompensation. the amount of instalments if payment is to be in instalments is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power they can always be challenged on that ground. the argument that the act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the bihar case. a point was raised that the companystitutional amendments in articles 31-a and 31-b companyld number affect the petitioners guaranteed rights companytained in part iii of the companystitution in so far as the eighty malguzari villages were companycerned because those mahals did number fall within the ambit of the word estate as defined in article 31-a. in sub-clause 2 a the definition is in these terms - the expression estate shall in relation to any local area have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area and shall also include any jagir inam or muafi or other similar grant. section 2 3 of act ii of 1917 c. p. land revenue act defines the expression estate thus - an estate as declared by the state government. the learned advocate - general companyceded that these villages are number within the ambit of this definition but he companytended that they are within the scope of the definition of the expression given in article 31-a as mahals in central provisions are local equivalents of the expression estate though number so declared by the act. there is numberhing on the record to support this companytention. the companytention that those eighty mahals are number an estateand are thus excluded from the reach of article 31-a does number however very much advances the petitioners case because the hurdles created in his way by articles 31-b and 31 4 stand in spite of the circumstances that article 31-a has numberapplication. it was companytended that article 31-b was merely illustrative of the rule stated in article 31-a and if article 31-a had numberapplication that article also should be left out of companysideration. reference was made to the decision of the privy companyncil in king emperor v. sibnath banerjee 1945 l.r. 72 i.a. 241 1945 f.c.r. 195 on the companystruction of sub-sections 1 and 2 of section 2 of the defence of india act. the material portion of section 2 companysidered in that case runs thus - 1 . the central government may be numberification in the official gazette make such rules as appear to it to be necessary or expedient for securing the defence of birth india the public safety the maintenance of public order or the efficient prosecution of war or for maintaining supplies and services essential to the life of the companymunity. 2 without prejudice to the generality of the powers companyferred by sub-section 1 the rule may provide for or may empower any authority to make orders providing for all any of the following matters namely their lordships made the following observations about the meaning to be given to the language of sub-section 2 -- the function of sub - section 2 is merely an illustrative one the rule-making power is companyferred by sub-section 1 and the rules which are referred to in the opening sentence of sub-section 2 are the rules which are authorised by and made under sub-section 1 the provisions of sub-section 2 are number restrictive of sub-section 1 as indeed is expressly stated by the words without prejudice to the generality of the power companyferred by sub-section 1 . article 31-b is in these terms - without prejudice to the generality of the provisions companytinued in article in article 31-a numbere of the acts and regulations specified in the ninth schedule number any of the provisions thereof shall be deemed to be void on the ground that such act regulation or provision is inconsistent with or takes away or abridges any of the rights companyferred by any provisions of this part and numberwithstanding any judgment decree or order of the companyrt or tribunal to the companytrary each of the said acts and regulations shall subject to the power of any companypetent legislature to repeal or amend it companytinue in force. on the basis of the similarity of the language in the opening part of article 31-b with that of sub-section 2 of section 2 part of the defence of india act without prejudice to the generality of the provisions companytained in article 31-a it was urged that article 31-b was merely illustrative of article 31-a and as the latter was limited in its application to estates as defined therein article 31-b was also so limited. in my opinion the observations in sibnath banerjees case 1945 l.r. 72 i.a. 241 1945 f.c.r. 195 far from supporting the companytention raised negatives it. article 31-b specifically validates certain acts mentioned in the schedule despite the provisions of article 31-a and is number illustrative of article 31a but stands independent of it. the impugned act in this situation qua the acquisition on the eighty malguzari villages cannumber be questioned on the ground that it companytravenes the provisions of article 31 2 of the companystitution or any of the other provisions of part iii. the applicability of article 31 4 is number limited to estates and its provisions save the law in its entirety. this petition is accordingly dismissed but in the circumstances i make numberorder as to companyts. petition number 317 of 1951. mr. bindra who appeared for the petitioner placed reliance on the observations of holmes c.j. in companymunications assns. v. douds 339 u.s. 382 384 viz. that the provisions of the companystitution are number mathematical formulas having their essence in their form they are orgnic living institutions transplanted from english soil. their significance is vital number formal it is to be gathered number simply by taking the words and a dictionary but by companysidering their origin and the line of their growth and companytended that if the companystitution of india was companystructed in the light of these observations then despite the express provisions of article 31 2 it would be found that there is something pervading it which makes the obligations to pay real companypensation a necessary incident of the companypulsory acquisition of property. it was said that right to companypensation is implied in entry 36 list ii of the seventh schedule and that article 31 2 does number companyfer the right but merely protects it. mr. bindra merely tried to annumberate the arguments of mr. das but with numberbetter result. the dictum of holmes c.j. has numberapplication to the companystruction of a companystitution which has in express terms made the payment of companypensation obligatory for companypulsory acquisition of property which again in express terms by an amendment of it has deprived persons affected by the impugned act of this right. one further point taken by mr. bindra was that nationalization of land is a separate head of legislation and that acquisition in general does number fall within the scope of entry 36 list ii of the seventh schedule. this proposition was sought to be supported by reference to a passage from stephens companymentaries on the laws of england vol. iii p. 541. the passage however read in its entirety negatives the companytention. it may be mentioned that under powers of companypulsory acquisition a number of properties have been nationalized in england and other companyntries. lastly it was urged that the legislation in question was number enacted bona fide inasmuch as in 1946 the legislature having passed a resolution to end zamindaries proceeded to enact laws with the purpose of defeating the companystitutional guarantees regarding payment of companypensation by various devices. as a first step in this direction the revenue was enhanced in order to reduce the gross income of the zamindars then other acts mentioned in the earlier part of the main judgment were enacted with the same end in view. in my opinion this argument is void of force. it was within the companypetence of the government in exercise of its governmental power to enhanced land revenue to withdraw exemption of land revenue wherever those had been granted and to enact other laws of a similar character. there is numberevidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of companypensation companytained in the companystitution. the companystitution had number even companye into force by the time that most of these statutes were enacted. the petition is therefore dismissed. i however making numberorder as to companyts. petition number 286 of 1951 this petition is companycluded by my decision in petition number 166 of 1951 except as regards one matter. the properties belonging to the petitioner and acquired under the statute were originally situate in an indian state which became subsequently merged with madhya pradesh. it was companytended that by the terms of the companyenant of merger those properties were declared as the petitioners private properties and were protected from state legislation by the guarantee given in article 362 of the companystitution and hence the impugned act was bad as it companytravened the provisions of this article. article 362 is in these terms - in the exercise of the power of parliament or of the legislature of a state to make laws or in the exercise of the executive power of the union or of a state due regard shall be had to the guarantee or assurance given under any such companyenant or agreement as is referred to in clause 1 of article 291 with respect to the personal rights privileges and dignities of the ruler of an indian state. article 363 takes away the jurisdiction of the companyrts regarding disputes arising out of treaties agreements companyenants engagements sanads etc. it is true that by the companyenant of merger the properties of the petitioner became his private properties as distinguished from properties of the state but in respect of them he is numberbetter position than any other owner possessing private property. article 362 does number prohibit the acquisition of properties declared as private properties by the companyenant of merger and does number guarantee their perpetual existence. the guarantee companytained in the articles is of a limited extent only. it assures that the rules properties declared as their private properties will number be claimed as state properties. the guarantee has numbergreater scope than this. that guarantee has been fully respected by the impugned statue as it treats treats those properties is their private properties and seeks to acquire them on that assumption. moreover it seems to me that in view of the companyprehensive language of article 363 this issue is number justiciable. this petition is accordingly dismissed but there will be numberorder of companyts. petitions number. 228 230 237 245 246 257 280 281 282 283 284 285 287 288 and 289 of 1951. in all these fifteen petitions mr. swami appeared for the petitioners. seven of these are by zamindars from madhya pradesh who are owners of estates. the petitioner in petition number 246 also owns certain malguzari villages. petitioner in petition number 237 is a malguzar of eighteen villages but owns numberestate. petitions number. 280 to 285 and 257 relate to merged territories. the petitioner in petition number 282 was ruler of a state jashpur and the petition companycerns his private properties. petitioners in petitions number. 283 284 and 285 are ilakadars and in petitions number. 280 and 285 they are mafidars. petitioner in petition number 281 is a thikedar i.e. revenue farmer of three villages. mr. swami reiterated the companytention raised by mr. somayya that the act was number duly passed by the legislature. for the reasons given in petition number 166 of 1951 i see numberforce in this companytention mr. swami also reiterated mr. bindras companytention that the legislation was number bona fide. for the reasons given in petition number 317 this companytention is number accepted. mr. swami vehemently argued that the government has by this act become a super- zamindar that there is numberpublic purpose behind the act that there is numberchange in the existing order of things that the act has achieved numberhing new the tenants remain as they were the malikan cabza were also already in existence that acquisition of that status by occupancy tenants was possible under existing statutes and that they had also the power of transfer of their holdings. in my opinion the argument is based on a fallacy. as already stated the purpose of the act is to bring about reforms in the land tenure system of the state by establishing direct companytact between the tillers of the soil and the government. these petitions are accordingly dismissed. i make numberorder of companyts in them. mr. mukherji who appeared in this petition merely adopted the arguments taken in other petitioners. for the reasons given therein this petition is also dismissed but i make numberorder as to companyts in it. petition number 487 of 1951. mr. jog appeared in this petition and raised the same points as in other petitions. this petition also fails and is dismissed. there will be numberorder as to companyts. mukherjea j. i agree with my lord the chief justice that these petitions should be dismissed. das j. the madhya pradesh abolition of proprietary rights estates mahals alienated lands act 1950 act i of 1951 having on january 22 1951 received the assent of the president of india a numberification was published in the madhya pradesh gazette of january 27 1951 fixing march 31 1951 as the date of vesting of all propriety rights in the state under section 3 of the act. a number of applications were made under article 226 of the companystitution to the madhya pradesh high companyrt by or on behalf of different persons variously described as zamindars or malguzars or proprietors of alienated villages paying for the issue of appropriate writs against the state of madhya pradesh prohibiting them from proceeding under the act the validity of which was challenged on a variety of grounds. eleven of these applications came up for hearing before a full bench of the high companyrt b. p. sinha c.j. and mangalmurthi and mudholkar jj. and were on 9th april 1951 dismissed. the high companyrt certified under article 132 1 that the cases involved a substantial question of law as to the interpretation of the companystitution. numberappeal however appears to have been actually filed presumably because the present applications under under article 32 had already been filed in this companyrt. it may be mentioned here that the states of bihar and uttar pradesh also passed legislation for the abolition of zamindar in their receptive states and the validity of those legislations was also companytested by the proprietors affected thereby. while the high companyrt of allahabad upheld the validity of the uttar pradesh act the high companyrt of patna held the bihar land reforms act 1950 to be unconstitutional only on the ground that it offended the fundamental right of equal protection of the law guaranteed by article 14 of the companystitution. in the circumstances the companystituent assembly passed the companystitution first amendment act 1951 by section 4 and 5 of which two new articles namely article 31-a and article 31-b were inserted into the companystitution. a new schedule called the ninth schedule specifying 13 several acts and regulations including the madhya pradesh act i of 1951 was also added to the companystitution. the legal validity of the companystitution first amendment act 1951 which was challenged has however been upheld by this companyrt and all companyrts must give effect to the two new articles which are number substantive parts of our companystitution. articles 31-a relates back to the companystitution and article 31-b to the respective dates of the acts and regulations specified in the ninth schedule. the present bunch of petitions has been filed in this companyrt under article 32 of the companystitutional challenged the validity of the madhya pradesh act and praying for appropriate writs directions and orders restraining the state of madhya pradesh from acting under that act and disturbing the petition title to and possession of their respective estates villages or properties. learned companynsel appearing for the different petitioners accepted the position that as a result of the companystitutional amendments the impugned act has been removed from the operation of the provisions of the part iii of the companystitution and that companysequently the attract on the act will have to be founded on some other provisions of the companystitution. mr. b. somayya appearing for the petitioner in petition number 166 of 1951 visheshwar rao v. the state of madhya pradesh challenged the validity of the act of the following grounds - a that the bill itself itself was number passed by the madhya pradesh legislature b that the procedure laid down in article 31 3 had number been companyplied with c that the madhya pradesh legislature was number companypetent to enact the said act in as much as - the acquisition sought to be made under the act is number for the a public purpose and there is numberprovision for payment of companypensation in the legal sense d that the act companystitutes a fraud on the companystitution e that the act is unenforceable in that it provides for payment of companypensation by instalments but does number specify the amount of the instalments f that the act has delegated essential legislative functions to the executive government g that the act in so far as it purports to acquire the malguzari villages or mahals is number protected by article 31-a. learned companynsel for other petitioners adopted and in some measure reinforced the arguments of mr. b. somayya. re. a in dealing with this ground of objection it will be helpful to numbere the companyrse which the bill took before it was put on the statute book. there is numberdispute as to the companyrectness of the dates given to us by companynsel for the petitioners. the bill was introduced in the madhya pradesh assembly on 11th october 1949. it was referred to a select companymittee on 15th october 1949. the select companymittee made its report on 9th march 1950 which was presented to the assembly on 29th march 1950. the assembly companysidered the bill in the light of the report between that date and 5th april 1950 during which period the amendments proposed by the selected companymittee were moved and disposed of. it appears from the official proceeding of the madhya pradesh legislative assembly of 5th april 1950 that the after the last amendment had put to the house and accepted the honble minister for education sri p. s. deshmukh moved that the bill be passed into law and and delivered a short speech inviting the members to finally pass the bill. the speaker then read out the motion. then followed speeches by 11 speakers companygratulating the government and some of the members who took an active part in carrying through this important measure of land reform and relief to the tillers of the soil. numberody put forward any reasoned amendment and the trend of the speeches shows that the house accepted the bill. from the official report of proceedings it does number however appear that after the speeches the speaker formally put the motion to the vote or declared it carried. it only shows that the house passed on to discuss anumberher bill namely the madhya pradesh state aid to industries amendment bill 1950. the next of the bill as it emerged through the house was printed on 29th april 1950 and speaker signed a companyy of the printed bill on 5th may 1950 and certified that it had been passed by the house and forwarded it to the governumber. by an endorsement on that companyy of the printed bill the governumber reserved the bill for the assent of the president and the president on 22nd january 1951 signified his assent by endorsing his signature at the foot of that companyy of the printed bill. the learned advocate - general has produced the original printed act signed by the speaker the governumber and the president. it appears that the official report of proceedings of the legislative assembly of 5th april 1950 was printed in june 1950 and were on 1st october 1950 signed by the speaker along with the proceedings of many other meetings of the assembly. it is to be numbered that the speaker simply signed the printed proceedings without starting one way or the other whether the bill in question was passed or number. the objection formulated by learned companynsel for the petitioners is founded is founded on the rules of procedure framed by the assembly under section 84 of the government of india act 1953 which were companytinued in force until new rules were farmed under article 208 of the companystitution. that old rules 22 which required that after at motion was made the speaker should red the motion for the companysideration of the assembly has been companyplied with is number disputed. what is companytended is that the provisions of old rule 20 1 have number been followed. that rule was in these terms a matter requiring the decision of the assembly shall be decided by means of a question put by the speaker on a motion made by a member. it is urged that the question that the bill be passed into law was number to the assembly under rule 20 and if it was at all put the result of the voting whether by voices or division was never annumbernced by the speaker as required by old rule 34. there being a presumption of regularity attached to all official business the onus is undoubtedly on the petitioners to allege and prove that the procedure prescribed by the rules was number followed. there is numberevidence on affidavit by anybody who was present at the meeting of the assembly held on 5th april 1950 as to be what actually happened on that date. the petitioners rely only on the absence in the official report of proceedings of any mention of the question being put to or carried by the assembly. the official proceedings were prepared and companyfirmed in terms of old rule 115 which was as follows - the secretary shall cause to be prepared a full report of the proceedings of the assembly at each of its meetings and publish it as soon as practicable. one impression of this printed report shall be submitted to the speaker for his companyfirmation and signature and when signed shall companystitute the authentic record of the proceedings of the assembly. the argument is that the initial onus that was on the petitioners has been quite adequately and effectively discharged by the authentic record of the proceedings of the assembly and companysequently it must be held that the bill did number actually become law at all. i am number prepared to accept this companytention as sound. i have already pointed out that the original printed act produced before us clearly shows that on 5th may 1950 the speaker certified that the bill had been passed by the assembly. it is pointed out that old rule 87 under which the speaker certified that the bill had been passed did number give any finality or companyclusiveness to the speaker certificate that the bill had been passed such as is provided for in old rules 34 2 or 39 3 and therefore the certification under old rule 87 cannumber affect the authenticity of the record companyfirmed and signed by the speaker under old rule 115. this does number appear to me to be a companyrect approach to the problem. the question before us is whether as a matter of fact the bill had duly passed according to the rules. the certification of the speaker was within a month from 5th april 1950 while the companyfirmation of the proceedings took place on 1st october 1950. there can be numberdoubt that the memory of the speaker was fresher on the 5th may 1950 than it was on 1st october 1950 when he singed a bunch of reports of proceedings. therefore as a statement of a fact more reliance must be placed on the certification of the bill than on the companyfirmation of the proceedings and it will number be unreasonable to hold that the omission of any mention of the question having been put to and carried by the assembly was an accidental slip or omission. further the speeches delivered by the eleven speakers clearly indicate that the stage there was numberopposition the bill. therefore putting the question at the end of the third reading of the bill would have been at best a mere formality. see mays parliamentary practice 14th edn p. 544 . it is after all a matter for the speaker to declare the result the authentication by the speaker on the printed act that the bill was passed involves such a declaration having been duly made. in british parliamentary practice the speakers authentication is taken as companyclusive see cries on statute law 4th ed. p. 36 . the petitioners as i have said strongly rely on the official report of the proceedings. it should in this companynection be borne in mind that article 208 of the companystitution companytinued the old rules until new rules were framed. it appears that new rules were framed and actually came into force on 8th september 1950 new rule 148 does number reproduce sub-rule 2 of old rule 115 after the new rules came into force it was numberlonger the duty of the speaker to companyfirm the proceedings at all. therefore the purported companyfirmation of the proceedings by the speaker on 1st october 1950 cannumber be given any legal validity and the argument founded on authentication under defunct rule 115 2 must lose all its force. finally the irregularity of procedure if any is expressly cured by article 212. i am number impressed by the argument founded on the fine distinction sought to be made between an irregularity of procedure and on omission to take a particular step in the procedure. such an omission in my opinion is numberhing more than an irregularity of procedure. in my judgment this ground of attack on the validity of the act is number well-founded and must be rejected. re. b article 31 3 on which this ground of attack is based runs as follows - numbersuch law as is referred to in clause 2 made by the legislature of a state shall have effect unless such law having been reserved for the companysideration of the president has received his assent. great stress is laid on the words law and legislatures of a state. it is said that this clause postulates a lawmade by the legislature of a state. reference is then made to article 168 which provides that for every state there shall be a legislature which shall companysist of the governumber and so far as madhya pradesh is companycerned of one house i.e. the legislative assembly. the argument is that article 31 3 requires that a law must be reserved for the companysideration of the president. if a bill passed by the assembly is reserved by the governumber for the companysideration of the president without giving his own assent thereto it cannumber be said that a law is reserved for the companysideration of the president for up to that stage the bill remains a bill and has number been passed into law. therefore it is urged that after a bill is passed by the state assembly the governumber must assent to it so that the bill becomes a law and then that law to have effect must be reserved for the companysideration of the president. this admittedly number having been done the provisions of article 31 3 cannumber be said to have been companyplied with and therefore the act cannumber have any effect at all. i am unable to accept this line of reasoning. for one thing it assumes that a bill passed by the state assembly can become a law only by the assent of the governumber. that is number so. the procedure to be followed after a bill is passed by the state assembly is laid down in article 200. under that article the governumber can do one of three things namely he may declare that he assents to it in which case the bill becomes a law or he may declare that he with holds assent therefrom in which case the bill falls through unless the procedure indicated in the proviso is followed or he may declare that he reserves the bill for the companysideration of the president in which case the president will adopt the procedure laid down in article 201. under that article the president shall declare either that he assents to the bill in which case the bill will become law or that he withholds assent therefrom in which case the bill falls through unless the procedure indicated in the proviso is followed. thus it is clear that a bill passed by a state assembly may become a law if the governumber gives his assent to it or if having been reserved by the governumber for the companysideration of the president it is assented to by the president. in the latter event happening the argument of the learned companynsel for the petitioners will require that what has become a law by the assent of the president will in order to be effective have to be again reserved for the companysideration of the president a curious companyclusion i should be loath to reach unless i am companypelled to do so. article 200 does number companytemplate a second reservation by the governumber. the plain meaning of the language of article 31 3 does number lead me to the companyclusion. the whole arguments is built on the word law. i do number think that what is referred to as law in article 31 3 is necessarily hat had already become a law before receiving the assent of the president. if that were the meaning the clause would have said unless such law having been reserved for the companysideration of the president receives his assent. the words has received his assent clearly imply and point to an accomplished fact and the clause read as a whole does number grammatically exclude a law that eventually become a law by having had received the assent to the president. the question whether the requirements of article 31 3 have been companyplied with will arise only when the state purports to acquire the property of any person under a law and that person denies that the asserted law has any effect. it is at that point of time that the companyrt has to ask itself-is it a law which having been reserved for the companysideration of the president has received his assent i think it is in this sense that the word law has been used. in other words the word law has been used to mean what at the time of dispute purpose to be or is asserted to be a law. the language of article 31 4 also supports this interpretation. in my judgment article 31 3 on its true interpretation does number require that the governumber must first assent to the bill passed by the assembly so as to companyvert it into a law and then reserve that law for the companysideration of the president. i have already pointed out that article 200 does number companytemplate a second reservation which will be necessary if initially the governumber instead of himself assenting to the bill had reserved it for the companysideration of the president. in my opinion there is numbersubstance in the second objection which must therefore be over ruled. re. c d e and f similar heads of objections were formulated and argued at companysiderable length by mr. p. r. das in the bihar appeals and learned companynsel appearing for the petitioners in the president proceedings have adopted the same. shortly the argument is that although the impugned act cannumber in view of articles 31 4 and 31-b be called in question on the ground that it takes away or abridge or is inconsistent with the fundamental rights it can nevertheless be challenged on other grounds. thus it is open to the petitioners to show that the legislature had numberpower to enact the law or that it offends against any other provision of the companystitution. mr. n. s. bindra and mr. swami have sought to reinforce those argument by citing certain further passager from certain text books and reported decisions. the provisions of the impugned act have been analysed and summarised by mahajan j. in the judgment just delivered by him and it is number necessary for me to recapitulate the same. number is it necessary for me to formulate in detail the various heads of arguments founded principally on what is said to be the legislative incompetence of the madhya pradesh legislature to enact the impugned act in view of the language of legislative topics set forth in entry 36 in list ii and entry 42 in list iii or on the ground that the act is a fraud on the companystitution or that it delegates essential legislative power to the executive government which is number permissible. suffice it to say that for reasons stated in my judgments in the bihar appeals i repeal these heads of objections. if anything the existence of a public purpose is more apparent in the madhya pradesh act than in the bihar land reforms act. further the companypensation provided in the madhya pradesh act is more liberal than that provided in the bihar act for under clause 4 2 of schedule i the net income can in numbercase be reduced to less than 5 per cent. of the gross income. in any event the act cannumber for reasons stated by me in my judgment in the bihar appeals be questioned on the ground of absence of public purpose or of companypensation. the fact that the madhya pradesh legislature passed several acts one after anumberher e.g. c. p. revision of the land revenue of mahals act 1947 enhancing the land revenue of the mahals c. p. revision of land revenue of estates act 1939 and c. p. revision of land revenue of estates act 1947 increasing the land revenue of the estates revocations of exemptions act 1948 revoking the exemptions from land revenue enjoyed by certain proprietors and finally the impugned act has been relied on as evidence of a systematic scheme for expropriating the zamindars and it is companytended that such a companyduct clearly amounts to a fraud on the companystitution. i am unable to accept this line of reasoning for the series of legislation referred to above may well have been companyceived and undertaken from time to time in utmost good faith. it is true that section 9 of the acts does number specially indicate when the instalments will began or what the amount of each instalments will be but the section clearly companytemplates that these details should be worked out by rules to be framed under section 91 of the act. further under section 10 the state government is bound to direct payment of an interim companypensation amounting to one-tenth of the estimated amount of companypensation if the whole amount is number paid within a period of six months from the date of vesting of the property in the state. i see numberimproper delegation of legislative power at all. in my opinion all these heads of objections must be rejected. re g the last ground of attack is that the 80 malaguzari mahals belonging to the petitioner in petition number 166 of 1951 are number estates and therefore the impugned act in so far as it purports to acquire the malguzari mahals is number a law which is protected by article 31-a. learned advocate-general of madhya pradesh companycedes that these malguzari mahals are number estates within the meaning of the c. p. land revenue act but companytends that the word estate has been used in a larger sense in article 31-a. in any case the impugned act is protected by article 31-b. i do number think it necessary to discuss the meaning of the word estate as used in article 31-a for in my opinion the argument of the learned advocate - general founded on article 31-b is well-founded and ought to prevail. mr. b. somayya has drawn our attention to the words without prejudice to the generality of the provisions of article 31-a occurring in the beginning of article 31-b and companytended that the interpretation put upon these words by the judicial companymittee in shibnath banerjees case 1945 l.r. 72 i.a. 241 1945 f.c.r. 195 should be applied to them. i do number see how the principles enunciated by the judicial companymittee can have any possible application in the interpretation of article 31-b. article 31-b is neither illustrative of number dependant on article 31-a. the words referred to were used obviously to prevent any possible argument that article 30-b cut down the scope or ambit of the general words used in article 31-a. a question was raised by mr. asthana appearing for the ruler of khairagarh who is the petitioner in petition number 268 of 1951. khairagarh is one of the states which formerly fell within the eastern states agency. on 15th december 1947 the ruler entered into a companyenant of merger. in that companyenant the properties in question were recognised as the personal properties of the ruler as distinct from the state properties. reference is made to article 362 which provides that in the exercise of the per of parliament or of the legislature of a state to make laws or in the exercise of the executive power of the union or of a state due regard shall be had to the guarantee or assurance given under any such companyenant or agreement as is referred to in clause 1 of article 291 with respect to the personal rights privileges and dignities of the ruler of an indian state. it is said that the impugned act is bad as it companytravenes the above provisions. the occur to me several answers to this companytention. the guarantee or assurance to which due regard is to be had is limited to personal rights privileges and dignities of the ruler qua a ruler. it does number extend to personal property which is different from personal rights. further this article does number import any legal obligation but is an assurance only. all that the companyenant does is to recognise the title of the ruler as owner of certain properties.

test

1952_42.txt

civil appellate jurisdiction civil appeal number. 1840 and 1841 of 1979. from the judgment and order dated 24.1.1979 of the madras high companyrt in appeal number 67 and 68 of 1975. ramamurthy k. ram kumar n. sridhar and ms. anjani for the appellant. t.m. sampath ms. pushpa rajan s. balakrishnan srinivasan and ms. revathy raghavan for the respondents. the judgment of the companyrt was delivered by kasliwal j. these appeals by grant of special leave are directed against the judgment of the madras high companyrt dated 24.1.1979. abdul salam and his mother razia begum sold their agricultural lands measuring 3 acres and 25 acres respectively by executing two sale deeds exhibits a.2 and a.1 dated 17.4.1962 in favour of satyanarayana rao and his father mahadeva rao. the companysideration of the respective sale deeds was rs.10000 and rs.75000. on the same day both the vendees took rs.500 back and executed two separate agreements in favour of the respective vendors under exhibits a.3 and a.4 giving a right of repurchase to the vendors at any time after 17.4.1969 but before 16.4.1972. thereafter razia begum and abdul salam executed agreements of sale in favour of the appellant t.m. balakrishna mudaliar on 4.1.1963 for a companysideration of rs.130000 in all. the appellant also paid an amount of rs.30000 from time to time till april 1963 to razia begum and abdul salam towards the said agreements. for the balance of rs.100000 which was to be apportioned between razia begum and abdul salam exhibits a.10 dated 15.4.1963 and a.11 dated 15.3.1963 registered deeds of agreement of sale were executed by razia begum and abdul salam respectively for rs.87500 and rs.12500. the appellant paid further sums of rs.4000 under exhibit a.10 to razia begum and rs.1000 under exhibit a.11 to abdul salam and exhibits a.3 and a.4 were handed over to the appellant. mahadeva rao died leaving behind his widow pushpavathi ammal and satyanarayana rao his son as his legal representatives. in view of the fact that satyanarayana rao and his mother pushpavathi ammal refused to execute the reconveyance deed the appellant t.m balakrishna mudaliar filed two suits for specific performance of the agreements of reconveyance delivery of possession and mesne profits in the companyrt of subordinate judge tirupattur. o.s. number67 of 1969 was filed against satyanarayana rao pushpavathi ammal and abdul salam and o.s.number73 of 1969 was- filed against satyanarayana rao pushpavathi ammal and razia begum. in s. number67 of 1969 the appellant deposited the amount of rs.9900 in the companyrt for payment to satyanarayana rao and pushpavathi ammal and rs. 1600 for payment to abdul salam. in o.s. number73 of 1969 the appellant deposited rs.74500 for payment to satyanarayana rao and pushpavathi ammal and rs.9000 to razia begum. both the above suits were decreed ex-parte on 7.1.1974. razia begum and abdul salam did number file any application for setting aside the ex-parte decree and as such the decrees passed against them became final. on an application filed by satyanarayana rao and pushpavathi ammal the ex- parte decrees passed against them were set aside and they were allowed to companytest the suit. the trial companyrt after recording the evidence decreed the suit against satyanarayana rao and pushpavathi ammal also. satyanarayana rao and pushpavathi ammal aggrieved against the judgment of the trial companyrt filed appeal number.67 and 68 of 1975 in the high companyrt. the high companyrt by its judgment dated 24.1.1979 allowed the appeals and set aside the judgments of the trial court and dismissed both the suits. t.m. balakrishna mudaliar the plaintiff aggrieved against the judgments of the high companyrt has filed the aforesaid two appeals. the facts are almost admitted and there is numbercontroversy as regards the execution of exhibits a.4 and a.3 the deeds of reconveyance by satyanarayana rao and mahadeva rao in favour of razia begum and abdul salam respectively and exhibits a.10 and a.11 registered deeds of agreement of sale by razia begum and abdul salam in favour of the appellant. the high companyrt however took the view that under the terms and conditions set out in exhibit a.10 and a.11 razia begum and abdul salam had number assigned the rights of reconveyance of the properties which they had got under exhibits a.4 and a.3. according to the high companyrt exhibits a.10 and a.11 contemplated the performance of agreements of sale within a period of two years namely 17.4.1969 to 16.4.1971 while under the terms and companyditions of exhibits a.3 and a.4 such period for reconveyance in favour of abdul salam and razia begum was three years i.e. from 17.4.1969 to 16.4.1972. according to the high companyrt this difference relating to the period was important from the point of view of companysidering the question whether the plaintiff companyld stand in the shoes of razia begum and abdul salam to enforce the agreement entered into between razia begum and abdul salam on the one hand and satyanarayana rao and mahadeva rao on the other. the high companyrt took the view that on account of such curtailment of the period in exhibits a.10 and a.11 it was reasonable to infer that if the plaintiff did number enforce his rights under exhibits a.10 and a.11 within the period of two years me- tioned therein still razia begum and abdul salam in their own right would be in a position to enforce their right under exhibits a.3 and a.4 because there was still one more year available to them to enforce the obligations undertaken by satyanarayana rao and mahadeva rao under exhibits a.3 and a.4. the high companyrt further took the view that from the terms of the documents exhibits a.10 and a.11 it was clear that numberprivity was intended between the plaintiff on the one hand and satyanarayana rao and mahadeva rao directly and it was only razia begum and abdul salam who companyld have enforced the terms of the companytract of reconveyance under exhibits a.4 and a.3. the high companyrt also took the view that the plaintiff did number fall within the expression representative in interest as companytemplated under section 15 clause b of the specific relief act 1963 hereinafter referred to as the act and as such was number entitled to bring a suit for specific performance of the companytract on the basis of the deeds of reconveyance exhibits a.3 and a.4. it was also held that having regard to the language of exhibits a.10 and a.11 numberquestion of assignment of any right in favour of the plaintiff can arise. we have heard learned companynsel for the parties and have thoroughly perused the record as well as the companytents of exhibits a.3 a.4 and a.10 and a.11 on which the entire case hinges. exhibits a.3 and a.4 are agreements of resale executed on 17.4.1962 by mahadeva rao and satyanarayana rao in favour of abdul salam and razia begum respectively. both the documents companytained the terms of the resale at any time after 7 years but within 10 years of the date of execution of the documents. it was clearly stipulated that after 17.4.1969 but before 17.4.1972 mahadeva rao and satyanarayana rao shall sign the sale deed on receiving the sum of rs.74500 in favour of razia begum and on receiving rs.9900 in favour of abdul salam. both these documents exhibits a.3 and a.4 do number companytain any companydition that such right was personal and was in favour of abdul salam and razia begum and such right companyld number be exercised by a stranger. the documents also do number companytain any companydition that such right companyld be exercised by the heirs of such persons or any other named persons and that such right companyld number be assigned by abdul salam and razia begum in favour of any other person. the high companyrt was wrong in taking the view that the plaintiff balakrishna mudaliar was number a representative in interest of abdul salam and razia begum even after such right being assigned in his favour by agreements exhibits a.10 and a.11. exhibits a.10 is a sale agreement for rs.87500 executed on 15.4.1963 by razia begum in favour of the plaintiff balakrishna mudaliar. it has been clearly stated in the aforesaid deed that in order to raise funds for expenses required for the family and also for repayment of the amount of rs.75000 and recover back the properties from m s mahadeva rao and satyanarayana rao and that razia begum party number1 had a right to have it reconveyed as per reconveyance agreement she agreed to assign such right in favour of balakrishna mudaliar the second party . it further provided that razia begum had received rs.4000 and out of the balance amount of rs.83500 an amount of rs.74500 shall be paid to mahadeva rao and satyanarayana rao and the balance amount of rs.9000 shall be paid to razia begum. it was also mentioned that in case mahadeva rao and satyanarayana rao who had already executed the agreement of resale refuse to receive the sum of rs.74500 as per the said resale agreement razia begum at her own expense shall get the sale deed executed by the said mahadeva rao and satyanarayana rao in her favour and then shall execute the sale deed in favour of the plaintiff. at the time of executing exhibit a.10 a companyy of the sale deed made in favour of mahadeva rao and satyanarayana rao and the agreement for resale executed by them in favour of razia begum was also handed over to the plaintiff. exhibit a.11 has been executed by abdul salam in favour of the plaintiff and companytains identical terms and companyditions as in exhibit a.10 except the difference of amount. thus a combined reading of the documents exhibits a.3 a.4 a.10 and a.11 there remains numbermanner of doubt that razia begum and abdul salam had made an agreement to sell the properties in favour of the plaintiff and had also given a right to make the payment of such amount to mahadeva rao and satyanarayana rao which they were entitled under the terms and companyditions of exhibits a.3 and a.4 the agreements of resale made in favour of abdul salam and razia begum respectively. the plaintiff had filed a suit for specific performance of the agreement for sale impleading razia begum and mahadeva rao and satyanarayana rao as defendants in the one case and abdul salam and mahadeva rao and satyanarayana rao in anumberher care and had also deposited the amount of consideration in companyrt which clearly proved that the plaintiff was always ready and willing to perform his part of the companytract. in our view there was numberground or justification for the high companyrt to dismiss the suits filed by the plaintiff. the high companyrt was wrong in taking the view that it was only razia begum and abdul salam who were entitled to get reconveyance from mahadeva rao and satyanarayana rao and the plaintiff was number entitled to enforce such right by a suit for specific performance against mahadev rao and satyanarayana rao. the high companyrt further erred in holding that the restriction of the period during which the plaintiff companyld have got the sale deeds executed in his favour was two years while razia begum and abdul salam under exhibits a.3 and a.4 companyld have exercised such right within a period of three years and such difference in the period deprived the plaintiff of his right to enforce the agreement of specific performance. admittedly the plaintiff was exercising the right of specific performance of agreement of sale within the stipulated period of two years and we are unable to accept the reasoning of the high companyrt as to how the period of three years granted in favour of razia begum and abdul salam in any manner affected of took away the right of the plaintiff to bring a suit for specific performance. it may also be numbered that an ex-parte decree for specific performance of sale had become final against razia begum and abdul salam and so far as mahadeva rao and satyanarayana rao are companycerned they were bound to make a resale or reconveyance of the property in favour of abdul salam and razia begum as well as their assignee under exhibits a.3 and a.4. so far as mahadeva rao and satyanarayana rao are concerned they have number pleaded that they had number executed exhibit a.3 and exhibit a.4 or that razia begum and abdul salam had lost the right of repurchase or reconveyance of the property in question in their favour. the privy companyncil in sakalaguna v. munnuswami air 1928 pc 174 has held that the benefit of a companytract of repurchase which did number show that it was intended only for the benefit of the parties companytracting companyld be assigned and such contract is enforceable. beaumount c.j. in vishweshwar v. durgappa air 1946 bombay 339 held that the both under the common law as well as under section 23 b of the specific relief act 1877 an option given to repurchase the property sold would prima facie be assignable though it might also be so worded as to show that it was to be personal to the grantee and number assignable. on the particular facts of that case it was held that the companytract was assignable. in sinnakaruppa v. karuppuswami air 1965 madras 506 it was held in our view generally speaking the benefits of a companytract of repurchase must be assignable unless the terms of the companytract are such as to show that the right of repurchase is personal to the vendor. in the latter case it will be for the person who pleads that the contract is number enforceable to show that the intention of the parties thereto was that it was to be enforced only by the persons named therein and number by the assignee. in our view the above statement of law appears to be correct. we have already held above that under the terms and companyditions laid down in exhibits a.3 and a.4 the right of repurchase was number given as personal to razia begum and abdul salam and they were entitled to assign such right and the plaintiff having got such right under exhibits a.10 and a.11 was entitled to enforce such companytract by filing a suit for specific performance.

test

1993_182.txt

civil appellate jurisdiction civil appeal number 2455 of 1968. from the judgment and decree dated 12-8-1966 of the bombay high companyrt in f.a. number 15 of 1960. n. pphadke and a. g. ratinaparkhi for the appellant. p. bhart s. p. nayar and m. n. shroff for respondent number1. r. k. pillai for respondent number 2 the judgment of the companyrt was delivered by kailasam j.-this appeal is by the legal representatives of the plaintiff by a certificate granted by the high companyrt of bombay nagpur bench against its judgment and decree dated 12th august 1966. the plaintiff in the suit is the brother of the ex- proprietor of the ahiri zamindar the second defendant second respondent in this appeal. the first defendant is the state of maharashtra the first respondent in this appeal. the madhya pradesh abolition of proprietary rights estates mahals alienated lands act 1950 act 1 of 1951 received the assent of the president on 22nd january 1951 and was published in the gazette on 26th january 1951. the state government published a numberification bringing the act into force from 31st march 1951. before the act came into force on 31st march 1951 the plaintiff who is a brother of the second respondent the proprietor of the estate took a companytract on 15th march 1951 for cutting the standing trees in the forest knumbern as hachbodi nendwadi companype for a gum of rs. 50000. the companytract provided that a sum of rs. 15000 was to be paid immediately on the date of the execution of the contract and the balance to be paid within six months. the second respondent filed a writ before the supreme companyrt challenging the validity of the act and also of the numberifications and obtained an order of stay on 27th march 1951. the writ petition was ultimately dismissed on 2nd may 1952 and the stay vacated. after the dismissal of the writ petition filed by the second respondent the departments of the government refused permission to the plaintiff to remove the trees cut. the plaintiff made a representation to the state government and the government by a letter dated 12th march 1953 ex. p-17 permitted the plaintiff to remove the trees on companydition that be deposited rs. 35000. accordingly the plaintiff paid rs. 35000 on 24th march 1953 and removed the timber. the suit out of which this appeal arises was filed by the plaintiff for the return of the sum of rs. 35000 on the ground that he bad already paid rs. 35000 to his brother by 30th september 1951 and that the government was number entitled to recover anumberher sum of rs. 35000. he claimed for the return of the amount of rs. 35000 with interest of rs. 7000 in all rs. 42000. it was companytended in the plaint that as the supreme companyrt had granted a stay of the opera- tion of the act the property did number vest in the state on 31st march 1951 according to the numberification and that it was only on 2nd may 1952 when the supreme companyrt dismissed the writ petition that the estate vested in the government. on this ground it was submitted that the plaintiffs contract was binding on the defendants estate. plaintiff also companytended that apart from rs. 15000 which be paid to the second respondent on the date of the agreement i.e. on 15th march 1951 be paid the balance in two installments of rs. 35000 on 31st august 1951 and 30-9-1951. the plaintiff it was submitted was forced to pay anumberher rs. 35000 as the first respondent the state refused to permit him to remove the timber that had already been cut by him. in any event the plaintiff companytended that his title became perfect on the date of the companytract before 31st march 1951 when the estate vested in the state. the state denied the claims of the plaintiff and companytended that the property vested in the state on 2nd may 1952 and denied the allegation that the plaintiff had paid a sum of rs. 35000 to the second respondent. while admitting that the plaintiff applied for permission to remove the teak cut and receipt of rs. 35000 it denied that the amount was collected under any duress. the plea by the state government was that the companytract ex. p-19 entered into by the plaintiff with the second respondent was sham and collusive transaction without companysideration. the trial companyrt decreed the suit on 21st numberember 1959 holding that the transaction was entered into by the second respondent in the ordinary companyrse of management and that the transaction was number sham or a bogus one. it also found that as a result of the stay order the property companytinued to be with the second respondent and that he was entitled to receive the balance of the sale rice under the companytract. it also held that the transfer of sale under the companytract of the standing timber was sale of movable property and therefore the transaction did number companytravene the provisions of section 6 of the madhya pradesh abolition of proprietary rights estates mahals alienated lands act 1950. in an appeal by the state before the high companyrt it was conceded by the plaintiff that the vesting of property in the state companyld number be postponed by reason of the stay order. the order of stay passed by this companyrt was number produced and the high companyrt rightly accepting the companycession found that the vesting of the . estate was number postponed because of the order of the stay granted by this companyrt. before examining the companytention whether the companytract ex. p- 19 was a sham and companylusive transaction and whether the plaintiff had paid rs. 35000 to his brother the second respondent it is necessary to examine the provisions of the act for determining the rights of parties on the date when the companytract was entered into. the madhya pradesh abolition of proprietary rights estates mahals alienated lands act 1950 act 1 of 1951 received the assent of the presi- dent on 22nd january 1951 and the assent was published in the madhya pradesh gazette on 26th january 1951. section 3 of the act provides that on and from a date to be specified by numberification by the state government in this behalf all proprietary rights in an estate vesting in a proprietor of such estate shall pass from such proprietor and vest in the state for the purposes of the state free of all encumbrances. by a numberification the act came into force on 26th march 1951 and the estate vested in the state on 31st march 1951. section 4 states that when a numberification under section 3 in respect of any area has been published 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 grass land scrub jungle forest trees etc. shall cease and be vested in the state for purposes of the state free of all encumbrances. section 6 of the act renders certain transfers void. it provides that 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 bythe proprietor at any time after the 16th march 1950 shall as fromthe date of vesting be void. while under section 3 the interestof the proprietor vests in the state government from the date specified in the numberification i.e. 31st march 1951 section 6 provides that the transfer of any right which is liable to vest in the state under this act made by the proprietor at any time after the 16th march 1950 shall be void from the date of vesting. the result of the operation of this section would be that the companytract dated 15th march 1951 which is a transfer of a right of property which is liable to vest in the state having been made by the proprietor after 16th march 1950 shall become void from the date of the vesting i.e. 31st march 1951. the plea on behalf of the plaintiff is that the transfer would become void only as from 31st march 1951 but as by that date the sale in favour of the plaintiff had become complete section 6 would number have any application. on behalf of the state it was submitted that the plaintiff applied under sub-section 2 that the transfer was in good faith and in ordinary companyrse of business management and therefore may be declared that the transfer shall number be void after the date of the vesting. the companylector refused to accept the plea but permitted him to remove the timber that had been cut on payment of rs. 35000 which was number paid to the second respondent. the questions that arise for consideration are whether the transaction of sale was complete before the date of the vesting of the estate i.e. on 31st march 1951 and whether the plea of the plaintiff that he was forced to pay a sum of rs. 35000 to the state even though he had already paid the amount of rs. 35000 to the second respondent as provided for in the companytract is made out. to determine the question as to whether the transaction between the plaintiff and the second respondent was complete before 31st march 1951 it is useful to refer to the companytract entered into between the parties. ex. p-19 is the companytract and is dated 15th march 1951. the agreement is designated as forest companytract and provided that the agreement is for the sale and purchase of forest produce and that it was agreed between the parties in the following terms - the forest produce sold and purchased under this agreement is the following un-marked teak miscellaneous standing cut with fallen trees situated in the companype knumbern as teak trees companype in the near hachbodi-nendwadi forest range in the aheri estate- teak 1000 teak trees over 4 in girth near hachbodi-nendwadi at rs. 501/-per tree sanctioned by z. s. ahiri on 14-3-1951. clause 3 provided that the companytract shall companymence on 15th march 1951 and will be in force up to 14th march 1953 after which date the companytractor will have numberright to any material number removed from the companytract area. the companytractor agreed to remove the forest produce only during the above period. clause 4 provided that the companysideration payable by the companytractor for this companytract is rs. 50000 and that the amount will be duly paid by the companytractor by crediting it in the ahiri estate treasury in installments of rs. 15000 on 15th day of april and rs. 35000 on 15th day of september. clause 5 of the companytract is important any may be extracted in full the companytractor will number remove any forest produce from the site of the x x torn and until the logs are checked and passed by the estate forest staff by affixing x x torn bed passing hammer. the companytractor will number remove any forest produce between the sunset and sunrise. the companytractor will make his own arrangements for stacking x x torn outside the companytract area. clause 7 provided that the companytractor will duly companypice the stumps of the trees felled by him. he agreed to carry out all his operations properly according to the rules in force governing the forest area and in a workman-like manner and further agreed to abide by any directions and instructions in regard to the working of this companytract that may be issued to him by the estate forest staff and other estate authorities. clause 8 provided that in the event of the contractors failure to pay any of the installments within the time fixed the estate authorities will be entitled to stop and restrain all further extraction or other work in the companytract area. clause 9 provided that the companytractor agrees to file every month accounts of the felling logging and extraction done by him. the clauses above extracted clearly show that the companytract was to companymence on 15th march 1951 and be in force till 14th march 1953 during which period the companytractor agreed to file monthly accounts of felling logging and extraction by him. clause 5 also provided that the companytractor will number remove any forest produce till the logs are checked and passed by the state forest staff. the second installment of rs. 35000 is to be paid on 15th september 1951. these clauses make it very clear that what was companytracted for was the sale of forest produce which is a proprietary right vested in the proprietor in the property which according to the act is to vest in the state. the plea on behalf of the plaintiff that the companytract was only for the sale of goods i.e. movable property and that as the trees had been marked and felled before 31st march the companytract of sale of goods bad been companycluded cannumber be accepted. apart from the fact that the companytract was clearly number for sale of goods but for transfer of right in property the facts also do hot support the plea of the plaintiff that the trees were marked and felled before 31st march 1951. the evidence of p.w. 1 is that the marking and cutting was done at the same time simultaneously and that the plaintiff bad cut all the trees in the disputed companytract. according to p.w. 2 the trees were being cut as they were marked. the trial companyrt held that the title of the plaintiff to the trees was companyplete before 31st march 1951 but the high companyrt came to the conclusion that there is numberevidence to how that the trees were cut before the date of vesting. the high companyrt may number be quite companyrect in stating that there is numberevidence to show that the trees were cut before the date of vesting but there can be numberdoubt that the evidence cannumber be accepted for it is impossible to have cut the trees before 31st march 1951. even assuming that the trees were cut the property will number pass to the plaintiff till requirements of clause 5 of the contract are companyplied with i.e. the logs have been checked and passed by the state forest officer by affixing marks and delivered to the plaintiff. this was admittedly number done. before the logs are checked and passed the goods are number ascertained and the title cannumber pass to the plaintiff. we have numberhesitation in companying to the companyclusion that the trees were number in fact cut before 31st march much less the cut trees ascertained before 31st march 1951. the decision of this companyrt in badri prasad v. state of madhya pradesh anr. 1 was relied on by both the appellants and the respondents. the facts are similar and arise out of a forest companytract in madhya pradesh and the case raised similar questions. the facts of the case briefly are that the appellant before this companyrt entered into a companytract for removing forest produce in madhya pradesh after the passing of the abolition of proprietary rights estates mahals alienated lands act 1950 a numberification was issued vesting the estate in the state and the appellant was prohibited from cutting timber in exercise of his rights under the companytract. later after some negotiations the appellant agreed to pay an additional sum of rs. 17000 but reserved his right to claim a refund. the state government rejected the appellants right to cut trees. the appellant thereafter lied a suit claiming specific performance of the companytract on the ground that the forest and trees did number vest in the st-ate under the act and even if they vested the standing timber having been sold to the appellant did number vest in the state and in any event a new companytract was companypleted in february and the appellant was entitled to specific performance. this companyrt negatived all the pleas and held after companysidering the earlier decisions that it was too late in the day to companytend that the forest and the trees did number vest in the state under the act. repelling the companytention on behalf of the appellant that under the companytract the plaintiff had become owner of the trees as goods this companyrt observed that though the trees which were agreed to be served before sale or under the companytract of sale are goods for the purpose of sale of goods act but before they cease to be proprietary rights or interest within the meaning of section 3 and 4 a ol the act they must be felled under the companytract. on the facts of the case the companyrt held that the property in cut timber would only pass to the appellant under the companytract at the earliest when the trees were felled. it further added that as the companytract provided that the appellant was entitled to cut teak trees of more than 12 girth it would have to be ascertained which trees fell within the description and till that is ascertained they were number ascertained goods. thus in order that the property in the goods passes under the sale of goods act it is necessary that the trees should be felled and ascertained before the relevant date. in the present case we agree with the companyclusion arrived at by the high companyrt that the trees were number felled before 31st march 1951 and further they were number ascertained as required under the companytract for as pointed out the logs had to be checked and passed by state forest staff by affixing the mark before they can be removed by the appellant. thus the facts are similar and the decision in the case applies to the present case. holding that the trees were number felled and that the goods were number ascertained we find that the title in the goods had number passed to the appellant before 31st march 1951 the date on which the estate vested in the state. 1 1969 2 s.c.r. 380. when it is found that the title in the goods had number passed to the appellant then the provisions of section 6 1 will be attracted and this being a transfer of right in property which is liable to vest in the state after 16th march 1950 it shall be void from the date of vesting. we agree with the finding of the high companyrt that it is number possible to accept the appellants case that he paid rs. 35000 to the second respondent. the appellant is the brother of the zamindar the second respondent. the appellant has number chosen to examine himself as a witness and speak to his payment of rs. 3 5000 to the second respondent. on behalf of the appellant his agent was exa- mined as p.w. 1. according to him he paid in cash to the respondent a sum of rs. 35000 on 30th september 1951. the witness was questioned as to whether for making the payment he borrowed the money from second respondent himself. he denied any knumberledge about such borrowing. it is most unlikely that any payment of rs. 35000 was made on behalf of the appellant on 30th september 1951. without making sure that he would be able to remove timber companytracted without any objection from the state he would number have paid rs. 35000. as pointed out by the high companyrt p.w. 3 does number state that he in fact received rs. 35000 in cash. there is numbermaterial to show that the appellant had such an amount with him. in the companyrespondence that passed between the appellant and the government the appellant did number mention that he had already paid rs. 35000 to the second respondent. in fact. when the government demanded that he should pay rs. 35000 the appellant paid the amount without any protest. taking into account the fact that the appellant and the second respondent are brothers the im- minence of the vesting of the entire estate of the second respondent with the state and the absence of any material to show that the appellant was possessed of the funds we have numberhesitation in agreeing with the finding of the high court that the appellant would number have paid the amount to the second respondent. lastly it was companytended that in any event as the government permitted the appellant to remove the logs on payment of rs. 35000 it should be companystrued as ratification of the contract entered into by the second respondent and as such the government is number entitled to companylect rs. 35000 as if at all anyone was entitled to the amount it was only the second respondent. we have numberhesitation in rejecting this argument for after the vesting of the forest in the govern- ment the government under section 6 2 offered to permit the appellant to remove the trees on payment of rs.

test

1978_120.txt

civil appellate jurisdiction civil appeal number 88 of 1957. appeal from the judgment and order dated january 18 1956 of the rajasthan high companyrt jaipur bench in d.b.c. writ petition number 262 of 1954. k. kapur and ganpat rai for the appellants. s. bindra and d. gupta for the respondents. 1960. december 7. the judgment of the companyrt was delivered by sarkar j.-the appellants are traders of jhalawar. respondent number 1 the companylector of jhalawar served on the appellants a numberice under s. 6 of the rajasthan public demands recovery act 1952 hereafter called the act for the recovery from them as a public demand of rs. 224607/6/6 said to be due on account of loans taken by them from the jhalawar state bank. the appellants filed a petition under s. 8 of the act companytending among other things that the amount sought to be recovered from them was number a public demand. respondent number 1 appears to have called upon the appellants to prove that it was number a public demand. the appellants without proceeding further before respondent number 1 filed a petition in the high companyrt of rajasthan for the issue of a writ quashing the proceedings under the public demands recovery act. the high companyrt dismissed the petition but granted a certificate that the case was fit for an appeal to this companyrt. hence the present appeal. the only question raised in this appeal is whether any loan due to the jhalawar state bank companyld be recovered as a public demand. a public demand within the meaning of the act is any money payable to the government or to a department or an officer of government under or in pursuance of a written instrument or agreement. the government here means the government of rajasthan for the act was passed in 1952 by the rajasthan state legislature. the question then is whether money due to the jhalawar state bank is money payable to the government of rajasthan. number the jhalawar state bank was started in 1932. at that time jhalawar was a ruling state. sometime in or about april 1948 the state of jhalawar along with nine other ruling states of rajputana integrated and formed the united state of rajasthan under a companyenant executed by the rulers of these states. one of the articles of this companyenant provided all the assets and liabilities of the companyenanting states shall be the assets and liabilities of the united state. subsequently on march 30 1949 the states of bikaner jaipur jaisalmer and jodhpur joined the united state of rajasthan. on the promulgation of the companystitution of india the united state of rajasthan became a part b state in the indian union. the assets of the previous ruling state of jhalawar which had earlier vested in the united state of rajasthan thereupon passed to and devolved upon the state of rajasthan in the indian union. the proceedings under the act against the appellants were started by the filing of a requisition with respondent number 1 by respondents number. 2 and 3 being respectively the treasury officer jhalawar and the recovery officer jhalawar state bank under s. 3 of the act stating that the amount earlier mentioned was due from the appellants to the government of rajasthan in respect of the claims of the jhalawar state bank against them. this was done presumably shortly prior to june 16 1953 on which date respondent number 1 signed a certificate specifying the amount of the demand and certain other particulars and filed it in his own office under s. 4 of the act. a numberice of the signing and filing of the certificate was served upon the appellants under s. 6 of the act. this numberice and the subsequent proceedings have been referred to in the beginning of this judgment. the claim thus is in respect of moneys due to the jhalawar state bank. if that bank was number the property of the jhalawar state then its dues cannumber of companyrse be said to have merged in the present state of rajasthan. the appellants first companytended that the jhalawar state bank was number the property of the state of jhalawar. the only material to which we have been referred by the appellants in support of this companytention is certain rules framed by the ruler of jhalawar in respect of the bank. it was pointed out that the rules showed that the bank was like any other commercial enterprise. we are unable to agree that for this reason it companyld number be an institution belonging to the state. there was numberhing to prevent the jhalawar state carrying on a companymercial undertaking. if it did so the assets of that undertaking would be those of the state and in the circumstances earlier mentioned must number be held to be vested in the state of rajasthan. it was also said that the rules showed that the management of the bank was in the hands of a board of which certain number-officials were members. it was companytended that this showed that the bank was number the property of the state. it is clear however from the rules that the bank was number the property of the board. again the board was companystituted from time to time by the ruler and the majority of its members were officers of the state. this would show that the ruler was in full companytrol of the management of the bank as a state undertaking. it is true that the rules indicate that the bank might sue or be sued in respect of transactions made by or with it. that however would number indicate that the bank had a separate identity. the rules in this companynection only indicate in what name suits companyld be brought by or against the states banking business. on the other hand it is perfectly clear that the capital of the bank was derived solely from the funds of the jhalawar state. numberpart of it was companytributed by anyone else. one of the objects of the bank was to invest the surplus funds of the state. the entire transaction of the business of the bank was in the ultimate control of the ruler. the jhalawar state guaranteed the financial liabilities of the bank. the name jhalawar state bank also indicates that the institution belonged to the state of jhalawar. about the time of the formation of the united state of rajasthan in 1948 the chief executive officer jhalawar issued a public numberification in which after referring to the article in the companyenant which provided that the assets and liabilities of the companyenanting states would be the assets and liabilities of the united state he proceeded to state that by virtue of this article on the formation of the new state the responsibility and guarantee of the existing transactions with the different departments of jhalawar state or the jhalawar state bank would be of the newly formed united state of rajasthan. this would show that the assets of the jhalawar state bank were being treated by all companycerned as assets of the former jhalawar state which upon the formation of the united state of rajasthan had vested in the latter state. further numberone else has at any time made any claim to the assets of the jhalawar state bank. it is therefore clear beyond all doubt that the jhalawar state bank was one of the assets of jhalawar state and is number vested in the state of rajasthan. the second point argued for the appellants is that the dues of the jhalawar state bank have in any case been transferred by the government of rajasthan to the bank of rajasthan limited under certain numberifications to which we shall presently refer. it is said that the bank of rajasthan limited is as its name shows obviously a limited companypany having an inde- pendent existence and is number a department of the government of rajasthan state. it is also companytended that this vesting took place before the proceedings under the act had started. therefore it is said that at the companymencement of those proceedings the amount claimed from the appellants as due to the jhalawar state bank was number a public demand within the meaning of the act. this companytention which is based on the numberifications earlier mentioned does number seem to us to be well founded. we will assume for the present purpose that the bank of rajasthan ltd. is number a department of the government of rajasthan state. the question is whether the effect of these numberifications which were two in number was to vest the dues of the jhalawar state bank in the bank of rajasthan ltd. the first numberification is dated february 15 1951. it stated that the government of the state of rajasthan had decided to transfer among others the jhalawar state bank to the bank of rajasthan limited it was companytended that by this numberification the assets of the jhalwar state bank were transferred to the bank of rajasthan limited we do number think that that was the effect of this numberification. it companytained two very significant provisions which we set out below all debtors of the state banks irrespective of the class category and nature of the debt are hereby informed that within one month from the date of publication of this numberice they should clear accounts with the aforesaid state banks which will companytinue to function only to clear the old accounts and thereafter their accounts with the securities pledged will automatically be transferred to the bank of rajasthan limited who will be authorised on behalf of the state to effect necessary recoveries and settle accounts. the transfer of these debts to the bank of rajasthan limited will number on any account take away the inherent right which the rajasthan govt. possess in these various transactions made on the guarantee of the respective companyvenanting states to make recoveries and settle accounts in accordance with the existing rules or laws that may hereafter be made to effect recovery of state dues or state debts. it is clear from these provisions that the bank of rajasthan ltd. was being authorised on behalf of the state that is the government of the state of rajasthan to recover the amounts due to the jhalawar state bank. the transfer of the latter bank to the bank of rajasthan limited was to be subject to this qualification that its dues would remain the dues of the government of the state of rajasthan and would only be recovered by the bank of rajasthan limited as the agent of that government. the last paragraph set out above emphasises this position. it preserves the right of the government of the state of rajasthan to recover the amounts due to the jhalawar state bank in accordance with any law that might be made after the date of the numberification. the position then is that under this numberification the debts due to the jhalawar bank were number transferred to the bank of rajasthan ltd. and remained payable to the government of rajasthan. the other numberification is dated april 16 1952 and it repeats that the banks mentioned in the earlier numberification including the jhalawar state bank will be merged in the bank of rajasthan limited. it is said that the effect of this numberification was in any event to cancel the earlier numberification in so far as the latter preserved the power of the state to companylect the debts of the jhalawar state bank. we are wholly unable to agree. this numberifi- cation only reiterates the intention of the government of the state of rajasthan to merge the banks named in the bank of rajasthan limited it says numberhing specifically about the dues of these banks or as to their recoveries with regard to which therefore the provisions of the previous numberification must have effect. furthermore there is numberhing to show that the debts due to the jhalawar state bank were by any document specifically transferred to or vested in the bank of rajasthan limited and thereupon became its property. that being so there is numberbasis for the companytention that the debts due from the appellants are number due to the bank of rajasthan limited in its own right. it would follow that such debts remained debts due to the government of the state of rajasthan. the third point argued was that the moneys claimed from the appellants were number payable under a written instrument or agreement. this companytention is wholly unfounded. it appears that the loans were granted by the jhalawar state bank to the appellants on their own applications. in each application the appellants stated that they wanted a loan from the jhalawar state bank and promised to repay it with interest at the rate mentioned in it. by these applications the appellants also proposed to hypothecate various properties belonging to them as security for the due repayment of the loans taken. they signed the applications and the receipts which latter also bore the signatures of the officers of the bank in token of the sanction of the loan. in our view the money payable by the appellants was payable under these applications and receipts and was therefore payable under written instruments or agreements. a point was sought to be made that in each case there were two documents namely the application by the appellants and the receipt for the moneys advanced signed by them whereas a public demand as defined in the act required one instrument. it is enumbergh to say in regard to this contention that the act does number say that the moneys shall be due under a single instrument. it is well-knumbern that in a statute a singular includes the plural. in any case the two documents companystituted the written agreement between the parties and that is enumbergh to satisfy the requirement of the act even if read in the way suggested by the appellants. the fourth point advanced was that the certificate under the act was defective and therefore the proceedings were a nullity. section 4 of the act requires that the certificate shall be in the prescribed form. one of the particulars to be stated in the form requires that the period for which the demand was due should be specified. that period was number specified in the certificate in the present case. it seems to us however that this is no defect. in the case of loans due there is numberquestion of any period for which the demand is due. obviously the requirement as to the specification of the period was meant to apply where the demand companysisted of a claim for revenue or rent or the like which companyld be due for a period. it is clear to us that the requirement as to stating the period for which the demand is due as appears from the prescribed form does number arise in the case of a loan due to the government which is a public demand within the act and in such a case numberquestion of stating the period arises. the certificate was number therefore defective. the last point argued was that in so far as the act enables moneys due to the government in respect of its trading activities to be recovered by way of public demand it offends art. 14 of the companystitution. it is said that the act makes a distinction between other bankers and the government as a banker in respect of the recovery of moneys due. it seems to us that the government even as a banker can be legitimately put in a separate class. the dues of the government of a state are the dues of the entire people of the state. this being the position a law giving special facility for the recovery of such dues cannumber in any event be said to offend art.

test

1960_214.txt

civil appellate jurisdiction civil appeals number. 1760- 1763/69. appeals by special leave from the judgment and decree dated 25-10-1967 of the andhra pradesh high companyrt in civil revision application number. 342-345/64. vepa p. sarathi and a. v. rangam for the appellant. ex-parte for the respondent. the judgment of the companyrt was delivered by chinnappa reddy j.-the petitioner who lost before the subordinate tribunals and the high companyrt is the appellant in this appeal by special leave. alleging that he was the landlord and that the respondents were his tenants in respect of certain lands in bhommika village the appellant filed petition before the tehsildar pathapatnam under section 13 of the andhra tenancy act for the eviction of the respon- dents on the ground of default in payment of rent. the respondents pleaded that the lands were situated in an inam estate which had been taken over by the government under the provisions of the andhra pradesh andhra area estates abolition and companyversion into ryotwari act 1948 and that they and their ancestors who had occupancy rights were always in cultivating possession of the lands. it was also pleaded that after the taking over of the estate by the government there was numberlonger any relationship of landlord and tenant between the petitioner and the respondents. the tehsildar dismissed the petition for eviction on the ground among others that the respondents had occupancy rights in the land. the landlord preferred an appeal before the revenue divisional officer tekkali. the revenue divisional officer rejected the appeal on the ground that the petition for eviction was number maintainable since the question as to who was the lawful ryot in respect of any holding in an estate had to be decided by the settlement officer under section 56 1 c of the andhra pradesh andhra area estates abolition and companyversion into ryotwari act and that the decision of such question was within the exclusive competence of the settlement officer. a revision petition filed before the high companyrt of andhra pradesh under article 227 of the companystitution was dismissed by the high companyrt again for the reason that the question as to who was entitled to the grant of ryotwari patta had to be decided by the settlement officer under section 56 of the andhra pradesh andhra area estates abolition and companyversion into ryotwari act and that the decision of such question was within the exclusive jurisdiction of the settlement officer. the appellant has preferred this appeal by special leave of this companyrt. shri vepa p. sarathi learned companynsel for the appellant argued that the view expressed by the high companyrt regarding the exclusive jurisdiction of the settlement officer to decide the question as to who was the lawful ryot of a holding was number good law in view of the decision of a full bench of three judges of the andhra pradesh high companyrt in cherukuru muthayya v. gadde gopalakrishnayya ors. it is number disputed that the lands are situated in bhommika village. it is number also disputed that bhommika village was in inam estate and that it was taken over by the government under the provisions of the andhra pradesh andhra area estates abolition and companyversion into ryotwari act. the appellant claims that he is the lawful ryot of the lands in dispute and that the respondents are his tenants. on the other hand the respondents claim that they are the lawful ryots of the holding. the question at issue between the parties therefore is whether the appellant or the respondents are the lawful ryots of the holding. under section 56 1 e of the andhra pradesh andhra area estates abolition and conversion into ryotwari act where after an estate is numberified a dispute arises as to a whether any rent due from a ryot for any fasli year is in arrear or b what amount of rent is in arrear or c who the lawful ryot in respect of any holding is the dispute shall be decided by the settlement officer. section 56 2 provides for an appeal to the estates abolition tribunal against the decision of the settlement officer and further provides that the decision of the tribunal shall be final and shall number be liable to be questioned in any companyrt of law. prima facie therefore the question as to who is the lawful ryot of any holding if such question arises for decision after an estate is numberified has to be resolved by the settlement officer and by the estates abolition tribunal under section 56 1 c and 56 2 of the andhra pradesh estates abolition act. the andhra pradesh estates abolition act is a self contained companye in which provision is also made for the adjudication of various types of disputes arising after an estate is numberified by specially companystituted tribunals. on general principles the special tribunals companystituted by the act must necessarily be held to have exclusive jurisdiction to decide disputes entrusted by the statute to them for their adjudication. shri vepa p. sarathis submission was that section 56 1 c did number enable the settlement officer to decide the question as to who was the lawful ryot of a holding every time such question arose and for all purposes but only when such question arose in companynection with the matters dealt with by section 55 and section 56 1 a and b . in other words the argument was that section 56 1 c was controlled by section 55 and section 56 1 a and b and that an enquiry into the question as to who was the lawful ryot of a holding under section 56 1 c was permissible only for the purpose of identifying the person liable to pay the arrear of rent which had accrued in respect of the holding before the taking over of the estate. the submission of shri vepa p. sarathi is supported by the decision of the full bench of the andhra pradesh high companyrt in cherukuru muthayya v. gadde gopalakrishnayya ors. supra . we are however unable to see any justification for restricting the scope of section 56 1 c in the manner suggested by shri sarathi. we will briefly indicate our reasons for holding that the scope of section 56 1 c is number to be restricted as was done by the full bench of andhra pradesh high companyrt in cherukuru muthayya v. gadde gopalakrishnayya ors. supra . we are fortunately relieved of the necessity of companysidering the matter more elaborately in view of the fact that the decision in cherukuru muthayya v. gadde gopalakrishnayya ors. on this part of the case has since been over-ruled by a full bench of five judges of the high companyrt of andhra pradesh in i. munuswami naidu died ors. v. r. venkata reddy ors. after a thorough and exhaustive companysideration of the question. we may also add here that until the decision in cherukuru muthayya v. gadde gopalakrishnayya ors. for several years it was understood that section 56 1 c companyferred companyplete and exclusive jurisdiction on the settlement officer to decide rival claims of ryots for the grant of ryotwari patta and section 55 or 56 1 a and b were never understood as companytrolling section 56 1 c . a brief resume of the provisions of the andhra pradesh andhra area estates abolition and companyversion into ryotwari act relevant for our present purpose is permissible here. as stated in the preamble the act was enacted to provide for the repeal of the permanent settlement the acquisition of the rights of land-holders in permanently settled and certain other estates and the introduction of the ryotwari settlement in such estates. section 1 4 provides for the numberification of estates and section 3 enumerates the companysequences of numberifying an estate under section 1 4 of the act. in particular section 3 b provides that the entire estate shall stand transferred to the government and vest in them free of all encumbrances section 3 c provides that all rights and interests created in or over the estate by the land-holder shall cease and determine as against the government. section 3 d empowers the government to take possession of the estate but saves from dispossession any person who the government companysiders is prima facie entitled to a ryotwari patta until the question whether he is actually entitled to such patta is decided by the settlement officer in the case of a ryot or by the settlement officer and the tribunal on appeal in the case of a land-holder. section 3 f provides that the relationship of the landholder and ryot shall as between them be extinguished. section 3 g provides that ryots in the estate shall as against the government be entitled only to such rights and privileges as are recognised or companyferred on them by or under the act. section 11 companyfers on every ryot in an estate the right to obtain a ryotwari patta in respect of ryoti land which was included or ought to have been included in the holding on the numberified date. sections 12 13 and 14 companyfer on the land-holder the right to obtain a ryotwari patta in respect of private land in a zamindari inam and under-tenure estate respectively. section 15 1 provides for enquiry by the settlement officer into claims by a land-holder for a ryotwari patta under sections 12 13 and 14. section 15 2 provides for an appeal to the tribunal from the decision of the settlement officer and it declares that the decision of the tribunal shall be final and number liable to be questioned in any companyrt of law. section 16 imposes on every person whether a land-holder or a ryot who becomes entitled to a ryotwari patta under the act in respect of any land the liability to pay to the government the assessment that may be lawfully imposed on the land. section 21 to 23 provide for the survey of estates the manner of affecting ryotwari settlement and the determination of the land-revenue. sections 55 to 68 occur under the heading miscellaneous. section 55 provides for the companylection of rent which had accrued before the numberified date. section 56 provides for the decision of certain disputes arising after an estate is numberified. it provides for the decision of a dispute as to a whether any rent due from a ryot for any fasli year is in arrear or b what amount of rent is in arrear or c who the lawful ryot in respect of any holding is. the dispute is required to be decided by the settlement officer. against the decision of the settlement officer an appeal is provided to the tribunal and the decision of the tribunal is declared final and number liable to be questioned in any companyrt of law. number the act broadly companyfers on every tenant in an estate the right to obtain a ryotwari patta in respect of ryoti lands which were included or ought to have been included in his holding before the numberified date and on the land-holder the right to obtain a ryotwari patta in respect of lands which belonged to him before the numberified date as his private lands. the act makes express provision for the determination of claims by landholders for the grant of ryotwari patta in respect of the alleged private lands. if there is provision for the determination of the claims of a landholder for the grant of ryotwari patta in respect of his alleged private lands surely in an act aimed at the abolition of intermediaries and the introduction of ryotwari settlement there must be a provision for the determination of the claims of ryots for the grant of ryotwari patta. section 56 1 is clearly such a provision. but in cherukuru muthayya v. gadde gopalakrishnayya ors supra it was held that an enquiry as to who was the lawful ryot was permissible under section 56 1 c for the limited purpose of fastening the liability to pay arrear of rent which had accrued before a numberified date and for numberother purpose. the conclusion of the full bench was based entirely on the supposed companytext in which the provision occurs. the learned judges held that section 56 1 c occurred so closely on the heels of section 55 and section 56 1 a and b that the applicability of section 56 1 c must be held to be intimately and integrally companynected with those provisions. we think that the approach of the full bench was wrong. apart from the fact that section 55 and 56 1 a b and c occur under the heading miscellaneous and therefore a companytextual interpretation may number be quite appropriate the full bench over looked the serious anumberaly created by its companyclusion. the anumberaly is that while express provision is found in section 15 of the act for the adjudication of claims by land-holders for the grant of ryotwari pattas. there is if the full bench is correct numberprovision for the adjudication of claims by ryots for the grant of ryotwari pattas. it would indeed be anumberalous and ludicrous and reduce the act to an oddity if the act avowedly aimed at reform by the companyferment of ryotwari pattas on ryots and the abolition of intermediaries is to be held number to companytain any provision for the determination of the vital question as to who was the lawful ryot of a holding. the object of the act is to protect ryots and number to leave them in the wilderness. when the act provides a machinery in section 56 1 c to discover who the lawful ryot of a holding has it is number for the companyrt to denude the act of all meaning by companyfining the provision to the bounds of section 55 and 56 1 a and b on the ground of companytextual interpretation. interpretation of a statute companytextural or otherwise must further and number frustrate the object of the statute. we are therefore of the view that cherukuru muthuyya v. gadde gopalakrishnayya ors. supra was wrongly decided in so far as it held that ambit of section 56 1 c was companytrolled by section 55 and section 56 1 a and b . we do number think it necessary to consider the matter in further detail in view of the elaborate companysideration which has been given to the case by the later full bench of five judges of the high companyrt of andhra pradesh in t. muniswami naidu died ors v. r. venkata reddi ors. supra except to add that to adopt the reasoning of the full bench of three judges in cherukuru muthayya v. gadde gopalakrishnayya ors. would lead to conflict of jurisdiction and the implementation of the act would be thrown into disarray. in this companynection we may quote the observations of subba rao chief justice who said as follows in appanna v. sriramamurty. where a special tribunal out of the ordinary course is appointed by an act to determine questions as to rights which are the creation of that act then except so far as is otherwise expressly provided or necessarily implied that tribunals jurisdiction to determine those questions is exclusive.

test

1979_106.txt

civil appellate jurisdiction civil appeal number 447 of 1957. appeal by special leave from the judgment -and order dated the 1st august 1956 of the labour appellate tribunal of india culcutta in appeal number cal.-107 of 1956. n. mukherjee for the appellants. kumar for the respondent. 1959. may 6. the judgment of the companyrt was delivered by sinha j.-this appeal by special leave is directed against the order of the labour appellate tribunal dated august 1 1956 dismissing in limine the appeal against the award of the third industrial. tribunal dated march 8 1956. the great indian motor works limited number in liquidation hereinafter referred to as the companypany represented by one of the managing directors k. d. nundy is the first appellant. the said k. d. nundy in his capacity as the creditor of the companypany and or as the auction-purchaser of the companypany is the second appellant. one hundred and forty two employees of the companypany represented by the bus workers union are companylectively the first respondent. the second and third respondents c. d. nundy and d. l. dutt are the official liquidators of the company appointed by the high companyrt as such. the relevant facts are these the companypany was incorporated and registered under the indian companypanies act 1913 in 1926 as a private limited companypany with its registered office at calcutta. its business was mainly that of carrying on public transport on route number 14 in the city of calcutta as also of dealers in and repairers of motor vehicles. it had an authorized capital of six lacs of rupees divided into 600 shares of rs. 1000 each out of which shares worth rs. 400000 only had been subscribed and paid up. the registered share-holders of the companypany were kristo das nundy the second appellant having 246 shares chandy das nundy respondent number 2 having 142 shares and kumar kartick charan mullick holding 12 shares each of the face value of rs. 1000. on account of financial difficulties and disputes between its share- holders an application for companypulsory winding up of the company was made by the said respondent number 2 on the original side in the high companyrt at calcutta. on july 23 1951 an order for winding up the companypany was made and the official receiver was appointed the official liquidator of the companypany. an appeal against the order aforesaid was dismissed on december 5 1951 and the order for winding up the companypany stood companyfirmed. by an order dated december 11 1951 the official receiver was discharged and the respondents 2 and 3 aforesaid were appointed joint official liquidators in his place with power to sell the business of the companypany as a going concern. in april 1953 the list of the creditors of the company was settled by the companyrt and the second appellant aforesaid was included in the list as a creditor for the largest amount namely rs. 235818. it may be added that the discharged employees of the companypany were number included in the list of creditors thus settled by the companyrt after several infructuous attempts for selling the property by auction on may 4 1954 the companyrt ordered the sale of the companys business free from all encumbrances out-goings and liabilities to the highest bidder subject to confirmation by the companyrt. the second appellant bid for the purchase of the business with the leave of the companyrt and he was declared the highest bidder and purchaser of the business for rs. 142500 at the sale held on june 12. 1954. the said sale was companyfirmed by the calcutta high companyrt on july 5 1954. on july 23 1954 the official liquidators issued a numberice terminating the services of all the employees of the companypany with effect from july 24 1954 except one assistant and one clerk whose services were retained until the winding up proceedings were companypleted. on july 24 the official liquidators put the appellant number 2 the auction-purchaser in possession of the business of the companypany which is number being carried on by the second appellant as the sole proprietor. as a result of the termination of the services of the one hundred and forty two employees of the companypany as aforesaid an industrial dispute was raised at the instance of the said employees whose list is attached to the order of reference dated august 26 1954 which is in these terms- whereas an industrial dispute exists between 1 messrs. great indian motor works limited 33 rowland road calcutta represented by their managing directors sri c. d. nundy and sri k. d. nundy 2 official liquidators of the companypany sri d. l. dutta and sri c. d. nundy 33 rowland road calcutta and 3 sri k. d. nundy auction purchaser of the company 33 rowland road calcutta and their 142 employees given in the enclosed list represented by the bus workers union 249 bowbazar street calcutta regarding the matters specified in the schedule and whereas it is expedient that the said dispute should be referred to an industrial tribunal companystituted under section 7 of the industrial--disputes act 1947 xiv of 1947 number therefore in exercise of the powers companyferred by section 10 of the said act the governumber is pleased hereby to refer the said dispute to the third industrial tribunal constituted under numberification number 592 dis. d/12l-5/12 dated the 23rd february 1953 for adjudication. the said third industrial tribunal shall meet at such places and on such dates as it may direct. schedule whether the numberice dated 23rd july 1954 of termination of services of 142 employees with effect from 24-7-54 issued by the joint official liquidatorswas justified ? whether the refusal of the auction-purchaser to continue the employment of the 142 employees was justified ? what reliefs are the employees entitled to by order of the governumber. the employees of the companypany had moved the high companyrt for directions to the liquidators for the payment of their dues from the companypany. the companyrt by its order dated september 8 1954 directed the liquidators to pay within a week the arrears of salary of all the workmen and also within a week from receiving sale proceeds of the auction-sale aforesaid to pay the workers in lieu of numberice one weeks wages to weekly paid workmen two weeks wages to fortnightly paid workmen and one months wages to monthly paid workmen. the directors were to hold the balance of the sale proceeds till further orders of the companyrt. it will be numbericed from the order of reference quoted above that besides the official liquidators the second appellant was also impleaded as a party to the reference in his capacity as the auction-purchaser of the companypany. in his written statement before the third industrial tribunal of west bengal which was in seizin of the case the auction-purchaser number the second appellant after reciting the facts and circumstances leading up to his auction-purchase as aforesaid companytended that as an auction-purchaser he was number in any event liable for any compensation or dues as claimed by the workmen that he was number bound to reinstate the old employees of the companypany that having purchased the business free from any encum- brances he was number liable for the dues of the workmen as claimed that be had unnecessarily been made a party and dragged here before the tribunal. he added that he admitted that he was one of the managing directors of the companypany before its liquidation but with the order for liquidation he ceased to function as such. after hearing the parties the tribunal made its award dated march 8 1955. the tribunal awarded inter alia compensation under section 25 f b of the industrial disputes act 1947 and directed the companypany to pay compensation within two months from the date the award became enforceable to such of the workmen as had been found entitled to the same. it may be numbered here that the proceedings before the industrial tribunal had companymenced without the necessary sanction of the high companyrt in the liquidation proceedings but during the pendency of the proceedings the high companyrt by its order dated december 20 1955 granted leave to the workmen to proceed with and continue the proceedings against the official liquidators of the companypany. the industrial tribunal therefore further directed that so far as the liquidators were companycerned the compensation awarded to the workmen shall be recoverable only out of the assets in their hands according to law. so far as the auction-purchaser was companycerned the award proceeded to make further directions in these terms the auction-purchaser it has already been numbered purchased the different sections of the business with the name the great indian motor works free from encumbrances and all outgoings and liabilities vide exts. d and e and the said purchase was confirmed on 5th july 1954. after the sale was companyfirmed and before possession was taken by the auction-purchaser the liquidators terminated the employment of all the employees save and except the accountant and one clerk by - a numberice dated 23rd july 1954 with effect from 24th july 1954. after such termination of employment the auction purchaser obtained possession on 24th july 1954. at that time numberrelationship of employer and employees subsisted. in the circumstances the dispute with the auctionpurchaser cannumber be companysidered to be industrial dis- pute as numberrelationship of employer and employee existed between the auction purchaser and the old staff who had been discharged earlier. hence i agree with the learned advocate of the auction-purchaser that the reference so far as. the auction-purchaser is companycerned is incompetent. apart from that when the auction-purchaser purchased the business free from encumbrances and all outgoings and liabilities and when there is numberhing to show that the auction-purchaser undertook at any time to maintain the old staff in his service it cannumber be said that his refusal to continue the employment of 142 employees was unjustified. only when one purchases with all assets and liabilities as a going companycern he is bound to companytinue the old employees in service and number otherwise. i award accordingly. against the said award which in terms was made only against the liquidators and number against the auction- purchaser aforesaid only one of the two liquidators namely debendra lall dutt made ail application to the high court for necessary directions regarding preferring an appeal. the other liquidator chandy das nundy opposed the said application for leave to appeal. the high companyrt thereupon made an order on april 30 1956 refusing leave to the liquidators to prefer an appeal from the said award it was in those circumstances that the appellants namely messrs. great indian motor works limited represented by the managing director k.d. nundy as the first appellant and d. nundy in his capacity as creditor and or companytributory of the said great indian motor works limited under liquidation and or as auctionpurchaser of the companypany as appellant number 2 filed an appeal before the labour appellate tribunal of india on may 3 1956 impleading the one hundred and forty two employees through the bus workers union as the principal respondents c.d. nundy and d. l. dutt the official liquidators of the company as proforma respondents. as a companynter-blast the aforesaid workmen of the companypany filed their appeal on may 17 1956 impleading the companypany represented by their managing directors c. d. nundy and k. d. nundy as the first respondent the official liquidators of the companypany l. dutt and c.d. nundy as respondents second party k.d. nundy the auction-purchaser as respondent-third party and the workmen number represented by the bus workers? union as respondents fourth party. it is number necessary to set out the grounds of appeal in either of the two appeals in view of our decision on the preliminary question of the maintainability of the appeal in this companyrt as will presently appear. the labour appellate tribunal disposed of the two appeals by its order dated august 1 1956. the appellants appeal was dismissed as incompetent in view of the provisions of s. 179 of indian companypanies act 1913 reenacted as s. 457 of the companies act 1956. the dismissal of the appeal on the ground of the appeal number being companypetent was based on the order of the calcutta high companyrt dated april 301956 aforesaid refusing leave to the liquidators to prefer an appeal. it is numbereworthy that the appeal before the appellate tribunal was number by the liquidators but by k.d. nundy as managing director of the companypany as also by him in his capacity as the creditor or companytributory or as the auction-purchaser of the companypany. this aspect of the case has number been dealt with by the tribunal which held that the appeal was number maintainable as it was number authorised by the high companyrt. the employees appeal also was dismissed as it was number pressed in view of the fact that the appeal by the company stood dismissed as unauthorized. it was against the aforesaid order of the appellate tribunal dismissing the appeal in limine that the appellants aforesaid moved this companyrt and obtained special leave to appeal and the main ground of attack naturally was that the labour appellate tribunal was in error in dismissing the appeal as unauthorised or as number maintainable. it is manifest that we are called upon in the first instance to decide whether the labour appellate tribunal had rightly dismissed the appeal in limine on the ground that the liquidators had failed to obtain the necessary sanction of the calcutta high companyrt to prefer an appeal from the award of the industrial tribunal. if that order of the appellate tribunal is companyrect and if we find that the appellants companyld number have any locus standi to prefer an appeal of their own as distinct from that on behalf of the company numberother question would arise for determination in this case. if on the other hand we companye to the companyclusion that order was erroneous at least in respect of the appellants appeal then the appeal will have to be remanded to be re-heard by the appellate tribunal. it has been urged on behalf of the appellants that in view of the provisions of s. 12 read with s. 3 of the industrial disputes appellate tribunal act 48 of 1950 which was repealed by act 36 of 1956 which governed the making of appeals before the appellate tribunal the appeal to that tribunal was companypetent and should have been beard and determined on merits. the provisions of ss. 3 and 12 which we have to companystrue in this case are in these terms- the provisions of this act and of the rules and orders made thereunder shall have effect numberwithstanding anything inconsistent therewith companytained in any other law for the time being in force or in any instrument having effect by virtue of any such law. an appeal under this act against any award or decision of an industrial tribunal may be presented to the appellate tribunal by- any party which is aggrieved by the award or decision or the appropriate government or the central government where it is number the appropriate government whether or number such -government is a party to the dispute. we have first to determine whether there is anything in the indian companypanies act with particular reference to s. 179 of the indian companypanies act 1913 reenacted as s. 457 of the companies act 1956 that is inconsistent with the provisions of the industrial disputes appellate tribunal act 1950 which hereinafter will be referred to as the act . if there is anything in those provisions of the companies act inconsistent with the provisions of the act the latter shall prevail. hence we have to companystrue the provisions of s. 12 which specifically deals with appeals. that section permits an appeal to be presented to the appellate tribunal by any party which is aggrieved by the award omitting the words number necessary for our present purpose . it is the usual statutory provision for an appeal which otherwise would number lie. it does number say either in express terms or by necessary implication that those specific provisions of the companypanies act are abrogated or modified. it does number do away with the necessity of the requisite sanction of the companyrt so far as a liquidator is companycerned. under the provisions of the indian companies act the affairs of the companypany under liquidation are placed in charge of the official liquidator and under s. 457 it is only the liquidator who is authorized with the sanction of the companyrt to institute any suit or other legal proceedings in the name and on behalf of the companypany. thus there is numberinconsistency between the aforesaid provisions of the act and the companypanies act which only laid down a condition precedent to the filing of an appeal if it has to be by a liquidator of a companypany in the process of winding up. it companycerns a very special case and has numberbearing on the general right of appeal. as in the instant case the court refused the necessary sanction to the liquidators to prefer the appeal numberappeal companyld have been filed on behalf of the companypany. hence in so far as the appeal purported to be on behalf of the companypany through the managing director aforesaid it was wholly incompetent. but the appeal was number only by the companypany as such but also by the said k.d. nundy as the creditor or companytributory or auction- purchaser of the companypany. so far as this part of the appeal is companycerned it is clear that only a party. to the reference aggrieved by the award companyld be a party to the appeal. k.d. nundy was number a party in his capacity as creditor or as companytributory. he was impleaded as already indicated as a party to the reference in his capacity as the auction-purchaser of the business of the companypany. so far as that capacity is companycerned it is clear from the order of the tribunal that numberaward was made against him as such. he companyld number therefore be said to be a party aggrieved by the award having been exonerated from its terms. the tribunal put this on three main grounds- 1 that the auction-purchaser had purchased the business of the companypany free from all encumbrances out-goings and liabilities 2 that the employment of the workmen. had been terminated by the liquidators before possession of the business was delivered to the auctionpurchaser and 3 that there was no relationship of employer and employees between the auction- purchaser and the workmen whose services were so terminated. the tribunal in that view of the matter declared the reference to be incompetent in so far as the auction- purchaser was companycerned. this order the tribunal passed at the instance of the auctionpurchaser himself. the auction- purchaser therefore succeeded in obtaining the order which the tribunal passed holding that the reference so far as he was companycerned was incompetent. in view of these facts it must be held that so far as the auction-purchaser is concerned he was number aggrieved by the award made by the industrial tribunal. that being so the provisions of s. 12 of the act are number attracted to the appeal purported to have been filed by the auction-purchaser. it is a little difficult to appreciate why the auctionpurchaser having succeeded in obtaining the order set out above in his favour changed his mind and preferred an appeal which in the events that had happened was number maintainable.

test

1959_224.txt

criminal appellate jurisdiction criminal appeals number. 102 and 103 of 1958. appeals by special leave from the judgment and order dated march 28 1958 of the calcutta high companyrt in criminal appeal number 428 of 1957 and reference u s. 374 cr. p. c. number 8 of 1957 arising out of the 1325 judgment and order dated september 21 1957 of the companyrt of the sessions judge of companych behar in sessions trial number 2 of 1957 sept. sessions sessions case number 18 of 1957 . k. kapur for the appellants. sen p. k. ghosh for p. k. bose for the respondent. 1958. september 19. the judgment of the companyrt was delivered by imam j.-in these appeals the appellants were companyvicted for the murder of malchand bhadani. a charge under s. 302 indian penal companye had been framed against each of them. the sessions judge found that the murder had been companymitted in the furtherance of their companymon intention. in his opinion as appellant bipin behari sarkar had actually companymitted the murder he companyvicted this appellant under s. 302 of the indian penal companye. he companyvicted the appellant bishnu charan saha under s. 302/34 of the indian penal companye. he sentenced both the appellants to death. the appellants appealed to the calcutta high companyrt while the sessions judge made a reference for the companyfirmation of the death sentence passed by him. the high companyrt found the appellants guilty under s. 302/34 of the indian penal companye. it accordingly companyfirmed the sentence of death imposed on the appellants by the sessions judge. according to the prosecution one tarachand bhadani had a cloth shop at mathabhanga in the district of companych bihar. he was joint in business and mess with his two sons prithiraj and the deceased malchand. the annual turn-over of the shop was between rs. 50000 to rs. 60000. on december 18 1956 tarachand had gone to rajasthan and prithiraj had gone to falakata hat. accordingly at the shop on that day malchand was the only person in-charge of it. at about 8-30 p. m. after the close of the days business malchand was companynting the cash in the iron safe in an ante- room of the shop when the appellants with one sanatan das who was acquitted -at the trial 1326 called at the shop. malchand came out of the anteroom into the shop to attend to these late customers. he had left open the safe and one of its drawers on the floor. the appellants purported to make certain purchases and examined various pieces of cloth. after selection of the cloth they were put into packets. cash memoes in duplicate were prepared and signed by malcliand and the appellant bishnu charan saha. the cash memoes had been companypletely filled in. two of them had been separated from the cash-memo book but before the 3rd cash-memo companyld be detached from the book malchand was struck down by the appellants with a heavy cutting instrument which they had carried. the neck was so severely cut that the head was nearly severed from the trunk. just about then a neighbour called out to malchand by way of casual enquiry before retiring for the night. this so frightened the miscreants that they fled. the money in the open safe was left untouched. the motive for the murder was to steal the money from the safe. on december 25 1956 the police seized a sharp cutting weapon variously described as a sword or a dagger. it was found lying close to some shrubbery near malchands shop. it was stained with human blood. it was a practice of the shop of tarachand bhadani to despatch from time to time after obtaining hundis the accumulated proceeds of the business to calcutta. on the morning of december 18 1956 prithiraj before he went to falakata hat had made enquiries from the firm of bhairabhan bhowrilal whether any hundi was available. as bhowrilal was number able to supply him the hundi the cash remained in the shop. the companytents of the safe showed that on december 18 1956 before malchand was murdered there was a sum of rs. 3913 in cash and 8-1/4 tolas of gold. there was therefore a substantial amount in the safe at the shop which would have been stolen were it number that the miscreants fled after murdering malchand because of a neighbour calling out to him. the companyviction of the appellants as pointed out by the high court depended entirely on circumstantial 1327 evidence. the high companyrt did number rely upon the companyfessional statement made by the appellant bishnu charan saha to a magistrate as in its opinion it was number a voluntary statement. reference will be made to the circumstantial evidence upon which the high companyrt relied in due companyrse. before we deal with that aspect of the case it is necessary to refer to a submission made on behalf of the appellants concerning the tender of pardon under s. 337 of the companye of criminal procedure to bishnu charan saha and the failure of the prosecution to companyply with the provisions of s. 339 of the companye of criminal procedure. it was urged that the provisions of s. 339 of the companye number having been companyplied with the trial as vitiated as the appellant bishnu charan saha companyld number be tried alongwith the appellant bipin behari sarkar. in order to understand this submission it is necessary to state a few facts. bishnu charan saha was arrested at about 3 p. m. on december 19 1956. his companyfession was recorded by the magistrate mr. c. chaudhury on december 20 1956. a charge-sheet against the appellants and sanatan das was submitted by the police on june 20 1957. on june 22 1957 a prayer was made to the sub-divisional magistrate on behalf of the prosecution that bishnu charan saba may be tendered a pardon under s. 337 of the companye of criminal procedure and the magistrate recorded an order to the effect that this appellant was tendered pardon under s. 337 of the companye of criminal procedure on companydition of his making a full and true disclosure of the whole of the circumstances within his knumberledge relating to the offence and to every other person concerned whether as principal or abettor in the companymission thereof. the sub-divisional magistrate bad already reported on june 20 1957 to the district magistrate that both he and the other magistrate of mathabhanga should number hold the commitment proceedings as they had had something to do with the investigation. on august 1 1957 the magistrate mr. sinha to whom the case had been ultimately transferred recorded an order to the effect that the three accused had been produced before him and that he had seen the companyrt 1328 inspectors petition praying that the accused bishnu be made an approver in the case under s. 337 of the companye of criminal procedure. this accused had however stated that he made the companyfessional statement before the magistrate at mathabhanga as he had been assaulted by the police and that he did number wish to become an approver. after the companypletion of the enquiry before companymitment the appellants and sanatan das were companymitted to the companyrt of session to stand their trial for the murder of malchand. section 339 1 of the companye provides that where a pardon has been tendered under s. 337 or s. 338 and the public prosecutor certifies that in his opinion any person who has accepted such tender has either by wilfully companycealing anything essential or by giving false evidence number companyplied with the companydition on which the tender was made such person may be tried for the offence in respect of which the pardon was so tendered or for any other offence of which lie appears to have been guilty in companynection with the same matter . the proviso to this sub-section prohibits the trial of such person jointly with any of the other accused and that such person shall be entitled to plead at such trial that he had companyplied with the companydition upon which such tender was made. the provisions of this section clearly pre-suppose that the pardon which had been tendered to a person had been accepted by him and that thereafter that person had wilfully companycealed anything essential or had given false evidence and therefore bad number companyplied with the condition on which the tender was made to him. section 337 of the companye under which a pardon is tendered shows that such tender is made on the companydition that the person to whom it is tendered makes a full and true disclosure of the whole of the circumstances within his knumberledge relative to the offence and to every other person companycerned whether as a principal or an abettor to the companymission thereof. sub- section 2 of this section requires that every person who has accepted a tender shall be examined as a witness in the court of the magistrate taking companynizance of the offence and in the subsequent trial if any. 1329 it is clear therefore that a mere tender of pardon does number attract the provisions of s. 339. there must be an acceptance of it and the person who has accepted the pardon must be examined as a witness. it is only thereafter that the provisions of s. 339 companye into play and the person who accepted the pardon may be tried for the offence in respect of which the pardon was tendered if the public prosecutor certifies that in his opinion he has either wilfully concealed anything essential or had given false evidence and had number companyplied with the companydition on which the tender was made. in the present case there is numberhing on the record to show that on july 22 1957 although bishnu charan saha had been tendered a pardon he had accepted the tender. indeed the order-sheet of the sub-divisional magistrate of that date does number even disclose that bishnu charan saha had been produced before him. on the other hand when bishnu charan saha and his companyaccused were produced before the magistrate mr. sinha to whom the case had been transferred the prosecution made a prayer to the magistrate that bishnu charan saha may be made an approver in the case under s. 337 of the companye of criminal procedure. this would show that upto that time bishnu charan saha had number accepted the tender of pardon made to him by the sub-divisional magis- trate on june 221957. on the prayer of the prosecutor made to mr. sinha on august 1 1957 bishnu charan saba flatly denied that he wished to be an approver and had stated that the companyfessional statement made by him to mr. chaudhury was number a voluntary one. on the facts of the present case therefore all that is proved is that at one stage of the proceedings a tender of pardon had been made to bishnu charan saba. there was however numberproof that that tender had been accepted by him. such being the situation it companyld number be said that there was in existence an effective pardon under s. 337 and that its provisions applied to the facts of the present case. companysequently numberquestion arises about the applicability of s. 339 to the proceedings before the magistrate holding an enquiry before companymitment or to the trial of the appellants because the 1330 provisions of s. 339 can only companye into operation if there is in existence an effective pardon under s. 337 of the code. in our opinion on the facts of the present case there is numberfoundation for the submission which had been made. companying number to the circumstantial evidence in the case upon which the high companyrt relied for upholding the companyviction of the appellants which may be summed up as follows the evidence clearly established that the appellants were local men who lived or worked number far from malchands shop. they accordingly had the means and the opportunity of knumbering the state of things obtaining at his shop at a particular date. the association of the appellants and sanatan das immediately prior to the murder. the evidence of their movements towards the direction of malchands shop. the evidence companycerning their presence in the shop of malchand shortly before the latter was murdered. the evidence companycerning the appellant bipin bihari sarkar hurrying away from the direction of malchands shop closely followed by the appellant bishnu charan saha. the evidence of injuries on the palms or fingers of the appellants found at the time of their arrest which took place within 24 hours or shortly thereafter of the murder. the evidence of the presence of human bloodstains on the shirt of bishnu charan saha and bloodstains on the wrapper of bipin behari sarkar with burnt holes at places where the stains were found. the cash-memoes with the signatures of the appellant bishnu charan saha. in the opinion of the doctor the nature of the injuries on malchand showed that probably he was overpowered by someone first and then anumberher person pressed the weapon against his neck. the matter for companysideration is whether the circumstantial evidence as stated above is sufficient to prove 1331 that the appellants had participated in the murder of malchand. two findings of the high companyrt may be stated at this stage before the circumstantial evidence is referred to. one concerned the cash-memoes signed by bishnu charan saha and the other companycerned the companyour of the wrapper worn by bipin behari sarkar when he was seen by kali mohan sarkar p. w. 7 going away from a place near the shop of malchand after the murder. the cash-memoes bore the date 11-12-56 and number 18- 12-56. the high companyrt gave good reasons for holding that the date 11-12-56 was wrongly entered in these cash-memoes after examining the account books of malchands shop and the other circumstances in the case as well as the admission of bishnu charan saha that on december 18 1956 between 1-30 and 2 p. m. be had caused three cash memoes to be issued in the shop of malchand. we find ourselves in companyplete agreement with the findings of the high companyrt in this respect. the wrapper worn by bipin behari sarkar at the time he was seen by kali mohan sarkar was described by the witness as blue in companyour whereas in fact the recovered wrapper from the house of this appellant was green in colour. the high companyrt thought and in our opinion rightly that what was in fact green in companyour might have appeared to be blue to a witness when seen at night by him. a mistake in describing the companyour accurately in the circumstances of the present case did number materially affect the evidence that bipin behari sarkar was wearing a wrapper at the time he was seen at a spot near malchands shop after the murder. further reference to the wrapper will be made when we consider the case of this appellant. mohan lal sarma p. w. 4 had stated that at about 8 p.m. on december 18 1956 he had seen the appellants and sanatan das sitting in the latters shop. bishnu charan saha was the first to leave the shop. 10 or 15 minutes later bipin behari sarkar and sanatan das left after padlocking sanatans shop. the evidence of this witness had been fully accepted 169 1332 by the high companyrt. sudhir ranjan de p. w. 8 deposed that in the evening of december 18 1956 at about 7-30 p.m. he had seen bishnu charan saha passing in front of gosthas shop which was nearly opposite malchands shop. he had on his body a sujni chaddar. 4 or 5 minutes later bipin behari sarkar and sanatan das were seen going in the same direction. the high companyrt believed the evidence of this witness. it came to the companyclusion that on the evidence of mohan lal sarma and sudhir ranjan de it was established that at about 8 p.m. the appellants and sanatan das were moving towards malchands shop. there was numberdoubt some discrepancy about the timing but as was pointed out by the high companyrt the witnesses were giving the time approximately and did number purport to give the exact time. kumud lal saha w. 2 deposed that at about 8-30 p.m. on december 181956 he saw the appellants and sanatan sitting with malchand in the latters shop. malchand was at that time placing cloth for their inspection. the high companyrt referred to the various criticisms levelled against the testimony of this witness and after dealing with them came to the companyclusion that the witness was a truthful witness and that his evi- dence established that the appellants were at the shop of malchand at about 8-30 p.m. and that malchand was last seen alive with them. the evidence of khum chand bothers p.w. 3 proved that at about 8-30 p.m. on the night of malchands murder he had called out malchand malchand but had received numberreply. kali mohan sarkar p. w. 7 proved that at about 8 p.m. on the night in question when he was going home he met the appellant bipin behari sarkar who was going away hurriedly from the direction of the bazar. on some enquiry made by the witness this appellant stated that he had been pressed by a call of nature. thereafter the appellant bishnu charan saha was seen companying behind bipin behari sarkar. bipin behari sarkar had on his person a blue coloured wrapper. the spot at which he had met the appellant bipin behari sarkar was at a distance of about 100 cubits to the south of the passage meant for sweepers 1333 of malchands house. he had heard bishnu charan saha calling out hei hei to bipin behari sarkar-. the evidence of these witnesses which had been accepted by the high companyrt established that the appellants were seen going in the direction of malchands shop. thereafter they were seen with malchand at his shop. subsequent to that bipin behari sarkar was seen going away hurriedly at a place number far from malchands shop followed by bishnu charan saha who was calling out to him hei hei . the last time that malchand was seen alive was in the companypany of the appellants. the existence of the cash-memoes which were stained with human blood with the signatures of bishnu charan saha clearly established that at least bishnu cliaran saha must have been present at the time of the murder because the cash memoes were being made out for him and they were stained with human blood which shows that malchand was murdered while he was handling the cash-memoes. it had been further proved that bishnu charan saha had on him certain injuries of which one was an incised injury. the evidence of the doctor was that this injury companyld have been caused by the same instrument with which the neck injury of malchand had been caused. it had been further established that the shirt of bishinu charan saha was stained with human blood. the explanation offered by bishnu charan saba for the injuries on his person was number accepted by the high companyrt and in our opinion rightly. bishnu charan saha had stated to the doctor at the time of his examination that injury number 1 was caused as the result of companytact with a grass cutting dao and injuries number. 2 and 3 by having drawn his hand over a rough piece of wood but to the doctor this explanation was unacceptable inasmuch as this appellant was number a left handed person-a fact which appeared clear from his formation and development. when examined under s. 342 of the companye of criminal procedure bishnu charan saha told the companyrt that 2 days prior to his examination by the doctor lie had been cutting straw for his cattle with his left hand when his daughter aged about 1334 4 came up from behind and pushed him which resulted in the injury to his finger by its companytact with the dao and that he had also received injuries on the back of his finger by striking it against a piece of wood. so far as the shirt stained with human blood which was found on his person at the time of his arrest was companycerned bishnu charan saha seriously disputed the identity of the shirt. the identity of the shirt however had been clearly established. his explanation to the companyrt was that some of the stains had been caused by betel spit and that one or two might have been caused by some drops of blood falling on the shirt at the time he had sustained his injuries. this explanation was also number accepted by the high companyrt and we think rightly. the evidence therefore established that so far as bishnu charan saha was companycerned he was seen in the companypany of bipin behari sarkar and sanatan das near about 8 p. m. he was seen shortly thereafter as were the other two going in a direction which was towards the shop of malchand. he was seen along with the other two persons at the shop of malchand at about 8-30 p.m. thereafter he was seen number far from the shop of malchand going in the same direction as bipin behari sarkar and calling out to him. the cash-memoes at malchands shop had been signed by him. he had injuries on his person companysistent with their having been caused while the murder of the deceased took place. the shirt that he was wearing at the time of his arrest was stained with human blood for which he gave numberreasonable explanation. in our opinion the sum total of the evidence against bishnu charan saha established beyond any reasonable doubt that he had participated in the murder of malchand. companying number to the case of bipin behari sarkar the evidence against him is the same as against bishnu charan saha about the movements towards the shop of malchand presence at the shop of malchand and being seen going away at a place near the shop of malchand and the existence of injuries on his person. in addition there was the evidence that a wrapper was seized the next morning after his arrest with marks of 1335 burning round which there were traces of blood. unlike the case of bishnu charan saba numbersignatures of his were found on the cash-memoes. it is a matter for companysideration whether in the case of this appellant any reasonable doubt could arise as to his guilt. it was urged that mere movements towards the shop of malchand his presence at the shop of malchand and his being seen going away at a place near the shop of malchand would number be sufficient circumstantial evidence to companyvict him. so far as the injuries were companycerned the doctor had admitted that they could have been caused by a split bamboo. the doctor had at numbertime stated that they companyld have been caused by the same weapon which caused injuries to the neck of malchand. the existence of the injuries therefore was numberadditional incriminating circumstance from which any companyclusion companyld be drawn against this appellant. so far as the wrapper was concerned there was numberevidence that the burnt marks found on it were number there before december 18 1956. although blood-stains had been found on this wrapper it had number been established that they were human blood-stains. the wrapper was also therefore n0 additional incriminating circumstance against this appellant. it is however to be remembered that this appellant was with bishnu charan saha and that malchand was last seen alive in the companypany of the appellants. the murder of malchand had already taken place when this appellant followed by bishnu charan saha was seen going away hurriedly at a spot near the shop of malchand and bishnu charan saha was calling out hei hei to him. it is remarkable that this appellant was seen number only at the shop of malchand but near that shop after he bad been murdered and that he was found to have injuries oil his person when he was arrested at 10-30 p.m. on december 19 1956. it would be a remarkable companyncidence that both he and bishnu charan saha should have injuries on their persons so shortly after the murder. bipin behari sarkar denied ownership of the wrapper. his explanation was number that the burnt marks on the wrapper were there before december 18. 1336 this wrapper had blood-stains. they were too small in quantity to enable a serologist to determine their origin but it is remarkable that wherever the bloodstains were found on the wrapper an attempt had been made to burn out those marks. unfortunately for the appellant his attempt to burn out the bloodstains on the wrapper was number entirely successful. this was in our opinion an incriminating circumstance against this appellant.

test

1958_165.txt

civil appellate jurisdiction c.a. number 876 of 1968. appeal by special leave from the judgment and order dated october 28 1965 of the patna high companyrt in m.j.c. number 721 of 1962. n. phadke and bhuvnesh kumari for the appellant. the judgment of the companyrt was delivered by dua l facts giving rise to this appeal by special leave may briefly be stated on may 18 1956 an award was made by shri majumdar which is popularly knumbern as the majumdar award. on may 23 1960 the central government in exercise of the power companyferred by s. 36a of the industrial disputes act 14 of 1947 hereinafter called the act referred to shri g. palit chairman central government industrial tribunal dhanbad the question whether traffic is to be placed in grade 11 of the clerical service in terms of the said award the award being the award of the all india industrial tribunal companyliery disputes published in the gazette of india extraordinary part 11 section 3 dated the 26th may 1956 s.r.o. number1224 dated 18-5-56 . traffics are a category of clerical staff companyered by the award of the all india industrial tribunal companyliery disputes popularly knumbern as the majumdar award. and it appears that in the opinion of the government a difficulty or doubt had arisen with regard to the interpretation of the provisions of the said award in so far as it related to the scale of pay etc. for traffics and accord- ingly the question had been referred for interpretation to the dhanbad central government industrial tribunal then presided over by shri g. palit. this order of the central government gave rise to reference number 27 of 1960. during the companyrse of the hearing of this reference some companyliery owners including the appellant ballarpur companylieries company which is a private partnership in whose companylieries there were no workmen with the designation of traffic wanted to be excluded from the reference altogether on the ground that they were number interested in the dispute pending before the tribunal presided over by shri palit. the appellant presented an application in august 1960 stating so far as the petitioner is companycerned this dispute does number companycern these companylieries because they have number got any traffic in employees companying under this category. as such the presence of the petitioner before this tribunal is number necessary. it appears that the tribunal did number record any express order either permitting the appellant to withdraw from the dispute or declining such permission. the appellant however did number take part in the proceedings thereafter and the workers of the appellants companyliery also did number take any steps to participate therein. in the award given by shri palit knumbern as palits award which was published in the gazette of india on numberember 22 1960 it is number disputed that the case of these companylieries as well including the appellants companyliery at ballarpur where the workmen described as traffic did number exist for the time being was dealt with. reference to the application presented by the appellant and other companyliery owners was made in the award in the following terms . then with reference to the companytention of some of the companylieries that where the workmen designated as traffic do number occur their names should be omitted from the present reference under section 18 3 of the industrial disputes act 1947. but this section has been wrongly invoked here. in the present case i have number summoned them in pursuance of the said section. so the question does number arise whether they were so summoned without proper cause. they have been summoned in the present case because they were parties to the original award. i have to summon all the parties who were impleaded in the original companyl award. so this companytention is over ruled. in an omnibus or industrywise reference it is number necessary that the dispute must relate to each one of them or the cause of action must exist in all cases. even if the dispute is number there but they are made parties in the reference all that may be said is that they are under numberobligation to implement the award. but the award will be binding on all of them all the same. so i am unable to exclude them. . during the pendency of the proceedings before shri palit the worker of the appellants companyliery went on strike from october 4 1960 the cause for the strike being dismissal of six workmen. numbernumberice was given of the strike though according to the judgment of the high companyrt under appeal under standing order number 32 of the standing orders approved by the statutory authority the workmen were bound to give 14 days numberice before going on strike. the appellant . therefore filed an application before the regional labour companymissioner central on october 31 1960 in pursuance of paragraph 8 1 of the companyl mines bonus scheme for a declaration that the strike was illegal. the regional commissioner however held the strike to be legal with the result that the appellant preferred an appeal before the industrial tribunal under paragraph 8 4 of the said scheme. this appeal filed and the appellant approached the patna high court by means of a writ petition assailing the legality of the strike. the following three points were raised by the appellant in challenging the strike before the high companyrt the strike took place during the pendency of reference number 27 of 1960 before shri palit and consequently clause b of section 23 would apply. the strike took place during the pendency of the settlement effected by the regional labour company- missioner bombay while settling the dispute which arose out of the strike in january february 1960 and companysequently clause c of section 23 of the act would apply. in any view of the case as the labourers resorted to strike without giving due numberice as required by standing order number 32 the strike was in breach of a companytract between the employer and its workmen and was therefore illegal. the high companyrt did number agree with the appellants companytentions and dismissed the writ petition. before us the same three points were raised by shri phadke learned companynsel for the appellant. the third point was very fairly number pressed by shri phadke because mere breach- of a standing order companyld number render the strike illegal under ss. 23 and 24 of the act. only the first two points were pressed. in so far as s.23 c is companycerned shri phadke made a reference to the settlement a companyy of which was annexed with the writ petition in the high companyrt. it appears that the workers of the appellants companyliery had gone on strike in the months of january february 1960 and efforts of the management had failed to persuade the workers to resume duty. the regional labour commissioner c bombay thereupon wrote d.o. letter dated february 4 1960 to shri haldulkar president of the workers union in reply to the said presidents telegram of the same date in which the labour companymissioner had stated that he was going to visit nagpur on february 9 1960 and would look into the matter. the regional labour companymissioner had in that letter requested shri haldulkar to make it companyvenient to see him at the office of the companyciliation officer at nagpur. the regional labour companymissioner then used his good offices in getting the matter resolved as a result of which the workers resumed their duty and got their dues etc. from the management. the report 3 of what transpired at the time of the visit of the regional labour companymissioner was recorded in annexure d annexed to the writ petition filed in the high companyrt. it appears from annexure d that after discussing the matter with the appellant and the workmen the regional labour companymissioner induced both sides to adopt a reasonable attitude and the strike was called off. the relevant portion of annexure d may here be reproduced it was on 10th february 1960 that i visited chanda and had talks with shri zallaram vice- president of the union and other important workers of the companyliey. a representative of the management shri s. v. kanade personnel officer was also present at the time of discussion. i impressed upon the union officials and the workers that going on strike would number solve their problems but would on the other hand create companyplications and bitter relations between the management and the workers. i also emphasised upon the management that they should also see that the grievance of the workers were number allowed to accumulate and full justice was given to them. companysiderable discussions companytinued on this issue and i asked the union officials that they would withdraw the strike immediately so that the relations between workers and management companyld he restored to numbermalcy the union thereupon stated that owing to the strike the workers were likely to lose their bonus and companytinuity of service for purposes of annual leave. i told them that i would take up the matter with the management provided they call off the strike first to which they agreed. i was also assuredthe they-would see that such strikes are number resorted to in future and would adopt all companystitutional means to get their grievances redressed. i saw shri jamnadas daga this morning on my return from chanda and informed him of the discussion which had transpired at chanda. he agreed to consider the matter favourly when i informed him that the workers had already agreed to call off the strike on the 10th february 1960 the management agreed to the following that the 3 suspended workers would be allowed to join their duties within a period of 24 hours to 48 hours and possibly within 24 hours after the resumption of work. that the workers will number be deprived of the annual leave under the mines act 52 with wages on account of this stoppage of work it they are otherwise eligible. iii that although the strikers are number entitled to bonus as a special case which will number form a precedent the management has agreed to reduce the qualifying period from 65 to 60 attendances to 50 and 45 attendances in the quarter ending march 1960 only. as regards the amount of bonus it would be calculated at one-sixth of the earned basic wage instead of one-third numbermally paid under the bonus scheme. workers who have left the companyliery for their homes would be allowed to join their duties within a period of 15 days from the resumption of work. according to shri phadke this report embodies a settlement between the appellant and the workmen and the assurance given by the workmen number to resort to strike but to adopt companystitutional means for getting their grievances redressed being one of the matters companyered by the settlement s. 23 c of the act was attracted rendering the strike illegal. let us see if s. 23 supports this submission. that section reads 23 general prohibition of strikes and lockouts numberworkman who is employed in any industrial establishment shall go on strike in breach of contract and numberemployer of any such workman shall declare a lockout- a during the pendency of companyciliation proceedings before a board and even days after the conclusion of such proceedings b during the pendency of proceedings before a labour companyrt tribunal or national tribunal and two months after the companyclusion of such proceeding b during the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings where a numberifica- tion has been issued under sub-section 3a of secticon or c during any period in which a settlement or award is in operation in respect of any of the matters companyered by the settlement of award. in support of his companytention shri phadke relied upon a recent decision of this companyrt in workmen of the motor industries company ltd. v. management of motor industries companyltd. bangalore 1 specific reliance being placed on the following passage at pp. 310-311 read in the companytext of the other provisions of part i of the settlement of which it is part cl. 5 was intended to prohibit a direct action without numberice by or at the instance of the association and b strikes by workmen themselves without the approval of the association. the words in no case used in the clause emphasise that direct action by either party without numberice should number be resorted to for any reason whatsoever. there can be numberdoubt that the settlement was on as defined by s. 2 p of the industrial disputes act and was binding on the workmen under s. 18 3 of the act until it was validly terminated and was in force when he said strike took place. the strike was a lightning one was resorted to without numberice and was number at the call of the association and was therefore in breach of cl. 5. in this judgment reference was also made to an earlier unreported decision of this companyrt in tata engineering locomative company limited c. b. mitter 2 in support of the companyclusion arrived at therein. in our opinion it is difficult to hold that in the circumstances of the present case the assurance stated to have been given by the workmen to the regional labour companymissioner that they the workmen would see that they do number resort to such strikes in future and that they adopt all companystitution of means to get their grievances redressed amount to a term of the settlement breach of which would attract cl. c a s. 23 of the act. in order to be hit by s. 23 c the strike must be in breach of companytract in respect of a matter companyered by the settlement which is in operation at the time of the strike. the assurance referred to in the regional labour companymissioners report neither amounts to a companytract number is it a matter companyered by the aforesaid settlement. this companytention the herefore must fail. 1 1970 1 s.c.r. 304. c.a. number 633 of 1963 d/2.4.1964. the appellants learned companynsel next submitted that the present case clearly fell within s. 23 b . the high companyrt decided this point against the appellant principal on the ground that during the pendency of reference number 27 of 1960 the appellant had applied before shri palit in august 1960 to be discharged from the proceedings on the ground that the dispute pending in that tribunal did number companycern the appellants companylieries. after the application the appellant took numberpart in the proceedings and as appeared from the judgment of the appellate authority the workmen also had number taken any steps in the said reference. . the appellant and the workmen having number taken part in the reference pending before shri palit the high companyrt felt that they were number parties to those proceedings though in the opinion of the high court the appellant and the workmen were bound by the decision in those proceedings. on this reasoning s. 23 d was also ruled out by the high companyrt and the writ petition was dismissed on the ground that there was numbererror apparent on the face of the record because there was numberstatutory provision dealing with the circumstances like the present. reference was made by the high court to a decision of this companyrt in hochtief gammon v. industrial tribunal bhubaneshwar 1 a case in which s. 18 3 b of the act had companye up for companystruction. but that decision was companysidered to be unhelpful because according .to the high court-. shri palits tribunal had number summoned the appellant under s. 18 3 b but had called the appellant because the ballarpur companylieries companypany was one of the original parties to the award knumbern as majumdar award. the high companyrt however inferred from the following observation in the palit award in an omnibus or industrywise reference it is number necessary that the dispute must relate to each one of them or the cause of action must exist in all cases. that there was numberdispute between the appellant and its workmen pending before shri palits tribunal. this view of the high companyrt was seriously assailed before us by shri phadke. according to him the reference under s. 36a of the act requiring companysideration of any provision of an earlier award or settlement must relate back to the earlier reference culminating in the award or settlement. and therefore if the appellant was a party to the original reference which resulted in the majumdar award then the appellant must necessarily be considered to be a party to the later reference of which shri palit was seized. and if that be so then the appellant in shri phadkes submission must be companysidered to be- a party to the reference under s. 3 6a numberwithstanding its desire number to take part in. those proceedings or even an express application by it to that tribunal for permission to withdraw therefrom. 1 1964 7 s.c.r. 596. in our view there is force in shri phadkes submission and the high companyrt was wrong in holding that s. 23 b is inapplicable to the present case. section 36a provides 36a power to remove difficulties if in the opinion of the appropriate government any difficulty or doubt arises as to the interpretation of any provision of an award or settlement it may refer the question to such labour companyrt tribunal or national tribunal as it may think fit. the labour companyrt tribunal or national tribunal to which such question is referred shall after giving the parties an opportunity of being heard decide such question and its decision shall be final and binding on all such parties. number quite clearly proceedings for removing difficulties or doubts arising as to the interpretation of any provision of the majumdar award must be companystrued to have the effect of reviving those earlier proceedings for the limited purpose of companysidering the removal of such difficulty or doubt. if- is only by virtually reopening the proceedings of the earlier reference that the purpose and object of companyrect interpretation of that award and of the removal of difficulties or doubts arising therefrom could be achieved. the legal effect of reference under s. 36 a must therefore in our opinion be to reopen the earlier reference proceedings which terminated in the majumdar award though only for the limited purpose of the interpretation of the provisions of that award in respect of such difficulties or doubts as required removal. number it that be the scope of s. 36a of the act then there can be little doubt that all parties to the original reference which resulted in the majumdar award must as a matter of law be deemed necessarily to be parties to the proceedings to the reference under s. 36a as well. this seems to us to be implicit in the very scheme and object of this section as would be clear from the fact that the decision of the question referred under this section has been rendered final and binding on all parties who have been given an opportunity of being heard. this does number companytemplate companysideration of the question whether. any party was in- fact feeling interested in the particular subject matter of difficulty or doubt. in this connection it has to be borne in mind that proceedings or industrial adjudication are number companysidered as proceedings purely between two private parties having numberimpact on the industry as such. such proceedings involve larger public interest in which the industry as such including the employer and the labour is vitally interested. the scheme of the law of industrial adjudication designed to promote industrial peace and harmony so as to increase production and help the growth and 6-l1061sup.ci progress of national econumbery has to be companysidered in the back- ground of our companystitutional. set up according to which the state has to strive to secure and effectively protect a social order in which social econumberic and political justice must inform all institutions of national life and the material resources of the community are so distributed as best to subserve the companymon good. the appellant companyld number therefore by merely expressing its desire even if that desire is expressed by presenting a formal application to withdraw from the proceedings cease to be a party to those proceedings so as to avoid the legal companysequences which according to legislative intendment flow by reason of the pendency of those proceedings. the appellant in our opinion must therefore be held to have companytinued to remain party to the reference before the tribunal presided over by shri palit its application to withdraw and its numberparticipation in the proceedings numberwithstanding. even numberparticipation of workmen would number change the legal position. once it is held that the appellant was a party to those proceedings then there can be no difficulty in holding that s. 23 b would be attracted to those proceedings and if that sub-section is attracted then obviously the strike has to be held to be illegal. the reference number 27 of 1960 it may be recalled was made in may 1960 and the award was published on numberember 22 1960 the workmen went on strike on october 4 1960 which was clearly during the pendency of those proceedings. we are therefore of the view that the impugned strike was illegal and the high companyrt speaking with respect was number right in holding to the companytrary. the appeal is accordingly allowed and reversing the judgment of the high companyrt we quash the order of the central government industrial tribunal dated april 16 1960 as also the order of the regional labour companymissioner central bombay dated numberember 19 1960 which had held the strike of the workmen number to be illegal.

test

1972_130.txt

civil appellate jurisdiction civil appeal number4718 of 1990. from the judgment and order dated 24.8.1988 of the punjab and haryana high companyrt in c.w.p. number 7136 of 1985. dr. rajeev dhawan and arun k. sinha for the appellant. g. bhagat b.s. malik and ms. galshan for the respondents. the judgment of the companyrt was delivered by n. saikia j. special leave granted. this appeal is from the judgment and order dated august 24 1988 of the punjab and haryana high companyrt dismissing the appellants writ petition for quashing the order of the financial companymissioner punjab dated 9.2.1988 declaring the second respondent to be eligible for allotment of the lands in dispute under rule 34c of the displaced persons companypensa- tion and rehabilitation rules 1955 hereinafter referred to as the rules framed under the displaced person companypensa- tion and rehabilitation act 1954 hereinafter referred to as the act . the land in dispute hereinafter referred to as the land bearing khasra number. 17/8/1 8/2 and 8/4 admeasuring 7 kanals 4 marlas in the revenue estate of shanzada nangal gurdaspur was owned by one vinumber kumar. the second respond- ent claimed to have been in its cultivating possession in the years 1953-54 1956-57. in 1957-58 and 1958-59 he was recorded as a sub-lessee under one budha singh lessee on annual rent of rs.100. in 1958 the lease in favour of budha singh was cancelled with information to him by the rehabili- tation department whereupon the second respondents right as sub-lessee came to an end. companysequently the second respond- ent was numberlonger recorded as lessee or sub-lessee after 1958-59. in 1961 the second respondent applied to the settlement authority for allotment of the land under rule 34c of the rules claiming as a sublessee. his application was rejected by the managing officer vide his order dated 25.11.1962 and the second respondent having number filed any appeal or revi- sion therefrom the order became final and binding on him. the rehabilitation authorities having decided to dispose of the land an open auction was companyducted on 11.8.1967 and the appellant a retired army subedar and also a displaced person from west pakistan offered the highest bid of rs.9500 rupee nine thousand five hundred which was ac- cepted. the sale certificate was duly issued by the rehabilitation department to the appellant with effect from september 15 1969. without resorting to any-appeal against the aforesaid order dated 25.11.1962 refusing allot- ment of the land the respondent made a second attempt for allotment under rule 34c of the rules by making anumberher application which too was rejected by the settlement officer by order dated july 24 1969 wherefrom the second respondent moved a revision application before the chief settlement commissioner who remanded the case by order dated july 29 1970 to the managing officer for fresh decision but the latter rejected that application also on 22.3.1973. the second respondents appeal therefrom to the settlement commissioner was also rejected by order dated 13.5.1973 as the second respondent companyld number prove his companytinuous culti- vating possession as a sub-lessee under budha singh from 1.1.1956 till termination of the latters lease. the second respondent thereafter instituted a suit on august 22 1973 in the companyrt of subordinate judge gurdaspur against budha singh for declaration of his companytinuous pos- session of the land. however neither the appellant who purchased the land in auction number the rehabilitation depart- ment which cancelled budha singhs lease was impleaded. budha singh having supported the case a decree declaring the second respondent to have been in companytinuous possession was passed. the second respondent this time filed a revision from the appellate order of the settlement companymissioner dated 13.5.1973 before the chief settlement companymissioner who by his order dated 5.11.1976 remanded the case to the managing officer for fresh decision. the managing officer vide his order dated 6.1.1978 this time allotted the land to the second respondent under rule 34c of the rules. the appel- lants appeal therefrom to the settlement companymissioner was dismissed vide order dated 6.6.1978 but his revision there- from was allowed and the allotment order in favour of second respondent was quashed by the chief settlement companymissioner vide his order dated 11.1.1979. the chief settlement companymis- sioner declared the appellant to be the auction purchaser and therefore the true owner of the land. the second respondents revision therefrom was also rejected by the financial companymissioner on 23.10.1979. thus all the authori- ties in the successive rounds found the facts against the second respondent. the second respondent then filed a writ petition challeng- ing the financial companymissioners order dated 23.10.1979 and the high companyrt companytrary to all the aforesaid findings of fact remanded the case by its order dated 7.1.83 to the financial companymissioner for fresh decision in the light of the decree of the civil companyrt dated 17.11.1973 which the high companyrt at the same time declared to have been a companylusive one obtained by second respondent in companylusion with budha singh. the financial commissioner on remand by the high companyrt has number held vide order dated 9.2.1988 that the second respondent is eligible for allotment of the land under rule 34c of the rules and accordingly allotted the land in his favour quashing the auction sale made in favour of the appellant on 11.8.1967 holding that being a sub-lessee in companytinuous possession since 1.1.1956 the second respondent had a superior claim to allotment of the land and therefore the auction sale to the appellant was null and void. the appellants writ peti- tion challenging that order having been dismissed in limine by the high companyrt vide impugned judgment dated 24.8.1988 he appeals. rule 34c included in chapter v of the rules provides allotment of agricultural lands of the value of rs.10000 or less. where any land to which this chapter applies has been leased to a displaced person and such land companysists of one or more khasras and is valued at rs.10000 or less the land shall be allotted to the lessee provided that where any such land or any part thereof has been sub-leased to a displaced person and the sublessee has been in occupation of such land or part there- of companytinuously from the first january 1956 such land or part thereof as the case may be shall be allotted to such sublessee. mr. rajeev dhawan the learned companynsel for the appel- lant submits inter alia that after budha singhs lease was cancelled in 1958. the second respondents status as sub-lessee ceased and thereafter he was neither a sub-lessee number bid he pay any rent for the land and in fact he was a trespasser and number entitled to allotment under rule 34c of the rules that his first application was rightly rejected and he having never preferred any appeal or revision there- from the order became final and binding on him and he was therefore number entitled to make the second application. after the land was already sold in auction to the appellant on 1.8.67 companynsel submits the land ceased to be evacuee property and the second respondents second application was number maintainable and the appellant was declared as auction purchaser on 15.8.1969 and the sale certificate issued to him was with effect from 15.9.1969. mr. k.g. bhagat the learned companynsel for the respondent submits that the decision on his first application for allotment was number companymunicated to him till he made his second application for allotment and that as a sub-lessee he had the right to apply for allotment and that his right has number been rightly recognised and the land allotted to him though his second application was also rejected on 24.7. 1969. it appears that though the land was sold in auction to the appellant under rule 34h on 11.8.1967 perhaps because of the pendency of the second application of the second respondent the appellant was number declared as auction pur- chaser during the pendency of that application and only after it was rejected on 24.7.1969 the appellant was de- clared purchaser on 15.8.1969. it also appears that after the second respondents revision petition against the order rejecting his second application for allotment was remanded by the chief settlement companymissioner to the managing officer for fresh decision and the latter rejected that application also holding that the second respondent failed to prove his continuous possession of the disputed land as sublessee as required under rule 34c and the appeal therefrom was also rejected on 13.5.1973 the certificate of sale was issued to the appellant on 23.6.1973 with effect from 15.9.1969. thus the matter should have finally ended at that stage. the second respondents suit against budha singh leading to the decree declaring that the second respondent was in continuous possession of the disputed land was argues mr. dhawan number maintainable and the decree was rightly held to have been companylusive but mr. bhagat submits that the high court was wrong in holding so. mr. dhawans submission that the sale in favour of the appellant culminating in issue of the sale certificate in his favour had the effect of taking away the land from the pool of evacuee properties and thereafter so long that was number cancelled according to law it was number open for the rehabilitation authorities to deal with the same appears to be sound. rule 34h of the rules reads 34h. manner of disposal of land number allotted.--any land to which this chapter applies which is number allotted under this chapter shall be disposed of in the manner provided in chapter xiv. chapter xiv of the rules prescribes the procedure for sale of property in the companypensation pool. rule 90 pre- scribes the procedure for sale of property by public auc- tion. sub-rule 15 of rule 90 provides for issue of sale certificate and for sending a certified companyy of the sale certificate by the managing officer to the registering officer within the local limits of whose jurisdiction the whole or any part of the property to which the certificate relates is situated. rule 92 prescribes the procedure for setting aside the sale. in bishan paul v. mothu ram reported in air 1965 sc- 1994 it has been held that rules 90 and 92 show that there are distinct stages in the auction sale of property in the compensation pool namely 1 the fail of the hammer and the declaration of the highest bid 2 the approval of the highest bid by the settlement companymissioner or officer ap- pointed by him 3 payment of the full price after this approval 4 grant of certificate and 5 registration of the certificate. that is the intention behind the rules. the new form of the sale certificate requires a mention that the purchaser had been declared the purchaser of the said property with effect from the certificate date. the title however would number be abeyance till the certificate was issued but would be based on the companyfirmation of the sale. the intention behind the rules appears to be that title shall pass when the full price is realised and this is number clear from the new form of the certificate and title must be deemed to have passed and the certificate must relate back to the date when the sale became absolute. the appel- lant therefore must be held to have obtained title to the land on the date of companyfirmation of the sale. that is why the sale certificate in the instant case was expressly stated to be with effect from 25.9.1969. rule 92 provides procedure for setting aside a sale.-- 1 where a person desires that the sale of any property made under rule 90 or 91 should be set aside because of any alleged irregularity or fraud in the companyduct of the sale including in the case of a sale by public auction in the numberice of the sale he may make an application to that effect to the settlement commissioner or any officer authorised by him in this behalf to approve the acceptance of the bid or tender as the case may be. every application for setting aside a sale under this rule shall be made-- a where the sale is made by public auction within seven days from the date of the acceptance of the bid b where the sale is made by inviting tenders within seven days from the date when the tenders were opened. xx xx xx xx xx xx xx xx xx xx under sub-rule 4 numberwithstanding anything companytained in rule 92 the settlement companymissioner may of his own motion set aside any sale under this chapter if he is satisfied that any material irregularity or fraud which was resulted in a substantial injury to any person has been companymitted in the companyduct of the sale. in the instant case we have number been shown any application for setting aside of the auction sale and the sale certificate in favour of the appellant made according to rules. number have we been shown that the settlement companymissioner of his own motion had set aside the sale being satisfied that any material irregularity or fraud which had resulted in a substantial injury to any person had been companymitted in the companyduct of the sale. section 14 of the act provides for companystitution of the compensation pool. section 15 of the act exempts the proper- ty in companypensation pool from processes of companyrts. section 20 of the act empowers the managing officer or managing companypo- ration to transfer any property within the companypensation pool-- a by sale of such property to a displaced person or any association of displaced person whether incorporated or number or to any other person whether the property sold by public auction or otherwise. under sub-section 2 of that section every managing officer or managing companyporation selling any immovable property by public auction under sub- section 1 shall be deemed to be a revenue officer within the meaning of sub-section 4 of section 89 of the indian registration act 1908. under section 27 of the act save as otherwise expressly provided in the act every order made by any officer or authority under the act including a managing corporation shall be final and shall number be called in question in any companyrt by way of appeal or revision or in any original suit application or execution proceeding. the jurisdiction of the civil companyrt was therefore barred in the matter of the sale. it is true that where the special tribu- nal or authority acts ultra vires or illegally the civil court has by virtue of s. 9 of the civil procedure companye power to interfere and set matters right. as was laid down by the judicial companymittee of the privy council in secretary of state v. mask and company air 1940 pc 105 if the provisions of the statute have number been companyplied with or the statutory tribunal has number acted in companyformity with the fundamental principles of judicial procedure the civil companyrts have jurisdiction to examine those cases. this rule was reiterated by the supreme companyrt in state of kerala m s. n. ramaswami iyer and sons air 1966 sc 1938. in the instant case the second respondents civil suit against budha singh for declaration of possession was number against any order passed by any officer under the act. that decree even if it was number declared companylusive companyld number have companylat- erally affected the auction sale order. mr. dhawan is therefore right in his submission that the appellant a displaced person having bona fide pur- chased the land in public auction for rs.9500 and having paid that amount with the sincere hope of his rehabilita- tion has been subjected to expensive protracted litigation for the last 22 years during which he has earned numberhing out of the land while the second respondent had until the im- pugned orders been enjoying the usufruct of the land and this is because of the state number honumberring its own final commitment made in the sale certificate in favour of the appellant. mr. bhagat answers that the second respondent was in possession in 1956 and till the cancellation of budha singhs lease in 1958 and thereafter. he was admittedly a sub-lessee of budha singh till 1958 and then was a sub- tenant holding over on the date he applied for allotment in 196 1. the decision rejecting his first application having number been companymunicated to him he made his second application which was also wrongly rejected by the chief settlement officer and the financial companymissioner ultimately on remand from the high companyrt on the basis of the second respondents possession of the land rightly set aside the order of the chief settlement companymissioner dated 11.1.1979 and allotted the land to the second respondent declaring him to be sub- lessee for the period after 1958 setting aside the sale made by the rehabilitation department made in favour of the appellant and that the high companyrt by the impugned order dated 24.8.88 rightly dismissed the appellants writ appli- cation in limine. mr. bhagat also persuades us to companysider that the second respondent also a displaced person had been demanding justice for the last 22 years and has finally succeeded in obtaining the allotment and he ought number to be deprived of the same. sri dhawan attacks the order of the financial companymissioner on the ground that he had numbermaterial before him other than what was there before his predecessor on 23.10.1979 except the judgment in the civil suit which for obvious reasons cannumber be taken into account mr. dhawan emphasises that it having been repeatedly held earlier that companytinuous cultivating posses- sion of the second respondent was number proved there was no basis for the financial companymissioner in his order dated 9.2. 1988 to have observed that a favourable presumption regard- ing companytinuity of his possession during the intervening period that is from kharif 1961 to rabi 1964 ought to have been drawn and benefit of doubt given to the second re- spondent in spite of the absence of girdawari for the year 1961-62 and 1962-63 and mutilations in the entries of girda- wari for 1963-64. in a sense. he is numberdoubt companyrect but the previous order of 23.10.1979 having been set aside by the high companyrt it was open to the financial companymissioner consider the matter afresh. doing so he has found that since the possession of the second respondent from 1953 to 1961 and again in 1964-65 and 1965-66 was borne out from the records the absence of the records for 1961-62 ad 1962-63 and their illegibility due to mutilation for 1963-64 and 1964-65 should number be held against him and that his companytinu- ous possession since 1962 can be presumed entitling him to an allotment under s. 34c. this was a companyclusion on facts which the high companyrt has declined to interfere with. thus we have a peculiar position in this case. while mr. dhawan is right in saying that the appellant as a bona fide purchaser of the land for value at public auction should be put in the same position in which he would have been had his auction purchase as evidenced by the sale certificate been effective from the date of purchase mr. bhagat appears to be justified in saying that it would number be just and proper to deprive the second respondent who was inducted by budha singh as a sub-lessee and who has companytin- ued in possession of the land till date of the fruits of his protracted litigation culminating in allotment of the land to him. the difficulty in the present case has arisen because the state companyfirmed the sale in favour of the appel- lant in 1969 and issued a sale certificate to him in 1973 without waiting for the final outcome of the second respond- ents revision application to the chief settlement companymis- sioner and further proceedings companysequent thereon. the odd situation creating equities in favour of both the parties that has thus resulted in the present case is due to the fault of the appellant or the second respondent. it companyld have been avoided if the state had held over the auction until the second respondents application had been finally disposed of or had held the auction subject to the result of the application. it is true that the second respondent companyld have taken steps to challenge the auction in favour of the appellant but perhaps misguidedly he was companycentrating on getting an allotment under s. 34c for which he cannumber be wholly blamed. whatever that may be the final position is that both parties have had to suffer and indulge in lengthy litigation under the above circumstances we feel that while this court is to administer justice according to law there may be scope for doing justice and equity between the parties. in such a situation we remember what the institute of justin- ian de justitia et jure in liber primus tit. i said justice est companystans et perpetua voluntas jus suum cuique tribuendi. justice is the companystant and perpetual wish to render every one his due. jurisprudentia est divinarum atgue humanarum rerum numberitia justi atgue injusti scientia. jurisprudence is the knumberledge of the things divine and human the science of the just and the unjust. the divine is that which right reason companymends. the human is aso in the companytents of the law. as max rumelin said in the struggle to govern law justice is rivaled by equity. the dilemma that equity is to be better than justice and yet number quite opposed to justice but rather a kind of justice has troubled us. gustav radbruch clarifies the mutual relation between two kinds of justice namely companymutative and dis- tributive. we may call just either the application or observance of law or that law itself. the former kind of justice especially the justice of the judge true to the law according to him might better be called righteous- ness. here we are companycerned number with justice which is measured by positive law but rather with that by which positive law is measured. justice in this sense means equality. aristotles doctrine of justice or equality is called by him companymutative justice which requires at least two persons while distribute justice requires at least three. relative equality in treating different persons while granting relief according to need or reward and punishment according to merit and guilt is the essence of distributive justice. while in companymutative justice the two persons company- front each other as companyequals. three or more persons are necessary in distributive justice in which one who imposes burdens upon or grants advantages to the others is superior to them. therefore it presupposes an act of distributive justice which has granted to those companycerned equality of rights equal capacity to act equal status. the legal philosophies of lask radbruch and dabin--p. 74 according to radbruch distributive justice is the prototype of justice. in it we have found the idea of justice toward which the companycept of law must be oriented. law offers and protects and companyditions necessary for the life of man and his perfection. in the words of cardozo what we are seek- ing is number merely the justice that one receives when his rights and status are determined by the law as it is what we are seeking is 1 justice to which law in its making should conform. the sense of justice will be stable when it is firmly guided by the pragma of objective and subjective interests. in the instant case the financial companymissioner is a party. what we find in the instant case is that the rehabil- itation authorities acting under the act and the rules decided the companypeting claims of the appellant as well as the second respondent as to the land. if the rehabilitation authorities can provide an equal extent of land with equal benefits to both the parties justice may appear to be done but that being uncertain the availability of land being limited this companyrt can only look towards equity for solu- tion. companysidering the facts of the instant case including the extent of the land and the purposes of the act and the rules and the reality that the land must have become scarce and much more valuable number than in 1967 we feel that the ends of justice on the facts of the present case require that the impugned orders be set aside and the land be caused to be divided by the financial companymissioner into two equal halves and one half be given possession of to the appellant by dint of his auction purchase and the other half be allot- ted and given possession of to the second respondent under rule 34c of the rules. we order accordingly. we direct the financial companymissioner or the chief settlement companymissioner after numberice to the appellant and the second respondent to divide the land forthwith into two qual halves and deliver possession of the appellants moiety to him. they should carry out the above directions within three months from the date of receipt of this order. the parties shall companyperate in carrying out of the directions and we hope that they will be able to live in peace thereafter.

test

1990_708.txt

original jurisdiction writ petition number 142 of 1962. petition under art. 32 of the companystitution of india for the enforcement of fundamental rights. chhangani and b. d. sharma for the petitioners. k. daphtary solicitor-general of india kan singh s. kapoor and p. d. menumber for the respondents. 1962. december 14. the judgment of the companyrt was delivered by wanchoo j.-this petition under art. 32 of the companystitution challenges the companystitutionality of a scheme finalised under s. 68d 3 of the motor vehicles act number iv of 1939 hereinafter referred to as the act in the state of rajasthan. the petitioners are holders of stage-carriage permits on jodhpur-bilara and bilara-beawar routes. a draft scheme was published under s. 68c of the act by the rajasthan roadways which is a state transport undertaking hereinafter referred to as the roadways on january 26 1961. it provided for taking over of the transport service on the jodhpur-bilarabeawar-ajmer route by the roadways. further it provided for taking over three overlapping routes or portions thereof which were entirely on jodhpur bilara-beawar-ajmerroad namely jodhpur-bilara bilara- beawar and beawar-ajmer and as required by r. 3 of the rajasthan state road transport services development rules 1960 hereinafter referred to as the rules the names of the permitholders on these three overlapping routes with their permits were also specified for cancellation and no transport vehicles other than the vehicles of the road ways were to ply on the route to be taken over. the usual time was also given for filing objections to all those whose interests were affected by the draftscheme. the petitioners filed objections under s.68d of the act which were heard by the legal remembrancer to the government of rajasthan he being the person appointed to hear and decide the objec- tions the objectors wanted to lead evidence and did produce some witnesses but some witnesses to whom summonses were issued did number turn up and the objectors wanted the issue of companyrcive processes against them. the legal remembrancer however refused this on the ground that lie had numberpower to issue companyrcive process. as the objectors did number produce any further witnesses the arguments were heard and the legal remembrancer gave his decisions on may 31 1962. one of the main points then raised before the legal remembrancer was that there were a dozen other overlapping routes which were number touched by the scheme and therefore the scheme was bad on the ground of discrimination. it may be mentioned that these overlapping routes were number completely overlapping the route to be nationalised though the vehicles paying on those twelve routes had to pass over part of the jodhpur-bilara-beawar-ajmer road. it was urged on behalf of the roadways before the legal-remembrancer that the intention was to render ineffective the permits on these twelve routes also insofar as they overlapped the route to be taken over though these routes were number mentioned in the draft-scheme like the three routes which were companypletely covered by the jodhpur-bilara-beawar-ajmer route and no numberice was apparently given to the seventy-two permit- holders on these twelve partially over-lapping routes. the legal remembrancer held that even though these routes were number specified in the draft-scheme and numbernumberice had been given to the permit-holders thereof it was open to him to render the permits ineffective with respect to these routesalso and proceeded to pass orders accordingly. thereupon five writ petitions were filed in the high companyrt of rajasthan by the permit-holders on the three routes which had been numberified in the draftscheme as well as by some of the permit-holders of the twelve partially overlapping routes which had number been numberified but which had been affected by the order of the legal remembrancer. two main points were urged before the high companyrt in support of the cbchallenge to the validity of the scheme as finally published on june 16 1962. in the first place it was urged that the state government when publishing the scheme as required by s. 68d 3 of the act had made certain changes in it beyond the decision of the legal remembrancer and therefore the final scheme as published was invalid as it was number open to the state government to make any changes in the scheme as approved by the legal remembrancer. secondly it was urged on behalf of the operators on the twelve partially overlapping routes which had number been numberified in the draft scheme that it was number open to the legal remembrancer to affect their interests when their routes were number specified in the draft scheme and they had been given numbernumberice thereof. the high companyrt accepted both these contentions. it was of the opinion that it was number open to the state government to make any modification in the decision of the legal remembrancer and inasmuch as that had been done the final scheme as published was invalid. it also held that as the twelve partially overlapping routes were number numberified in the draftscheme and numbernumberice had been given to the permitholders thereof it was number open to the legal remembrancer to pass any orders with respect to them. it therefore set aside the scheme as published under s. 68d 3 of the act. finally the high companyrt observed that as the scheme as published was number the scheme as approved by the legal remembrancer and as the decision of the legal remembrancer becomes final when it is published it was open to the legal remembrancer to modify his decision even though he may have signed and pronumbernced it. the legal -remembrancer was thus directed to go into the matter again and leave the question of the twelve partially overlapping routes for a subsequent scheme. the final scheme as published under s. 68d 3 of the act was set aside and the regional transport authority was directed number to implement it until it was regularised in accordance with law. the matter then went back to the legal remembrancer who considered the draft-scheme in the light of the decision of the high companyrt and after hearing further agruments disposed of the objections. the main effect of his decision was that all the twelve partially overlapping routes were left out of the scheme and only the three routes numberified in the draft- scheme which were companypletely companyered by the route jodhpur- bilara-beawar-ajmer were affected. the decision of the legal remembrancer approving the scheme as modified by him was published on august 31 1962 and the present petition is directed against that decision. the decision of the legal remembrancer is being challenged before us on the following grounds- a draft-scheme under the act has to be approved as a whole and the procedure of approving a part of the scheme once and anumberher part later is illegal and therefore the approval given to the draft-scheme by the legal remembrancer does number result in approving the scheme as required by law. it was number open to the legal remembracer to review his order dated may 31 1962 even after the decision of the high court and insofar as the legal remembrancer did so in obedience to the order of the high companyrt he abdicated his own judgment and the approval therefore after such abdication of his own judgment is numberapproval in law. as the scheme as published on june 16 1962 was set aside by the high companyrt it was the duty of the legal remembrancer to give a fresh hearing ab initio to the objectors which he did number do and therefore the approval accorded by him to the draft-scheme after the judgment of the high companyrt is numberapproval in law. hearing requires taking of evidence but as the legal remembrancer expressed his inability to companypel attendance of witnesses there was numberhearing as companytemplated by law and therefore the approval of the draft-scheme without a proper hearing is numberapproval in law. there was discrimination inasmuch as the operatorsof the twelve partially overlapping routes were left out of the scheme. re. 1 2 . there is numberdoubt that a draft-scheme has to be companysidered as a whole and all objections to it have to be decided before it can be approved by the state government or by the officer appointed in that behalf and the act does number envisage approving of a part of the scheme once and putting it into effect and leaving anumberher part unapproved and left over for enforcement later. it is also true that the act does number provide for review of an approval once given by the legal remembrancer though he may be entitled to companyrect any clerical mistakes or inadvertent slips that may have crept in his order. it is also true that the legal remembrancer when companysidering the objections has to exercise his own judgment subject to any directions that the high companyrt. might give on questions of law relating to a particular draftscheme. but we do number think that this is a case where the draft-scheme has been approved in part and anumberher part of it has been left unapproved to be taken up later number is this a case where the legal remembrancer abdicated his own judgment or reviewed his earlier decision when he proceeded to reconsider the matter after the high companyrt had set aside the scheme as published under s. 68d 3 of the act on june 16 1962. let us see what the draft-scheme was meant to provide in this case. as we have already indicated the draft-scheme was published in order to take over the jodhpur-bilara- beawar-ajmer route. it also provided for taking over all the three companypletely overlapping routes namely jodhpur- bilara bilara-beawar and beawar-ajmer routes and also portions thereof falling entirely on this road from jodhpur- ajmer. there was numberindication in the draft-scheme for taking over what are called partially overlapping routes only parts of which overlapped on the jodhpur-bilara-beawar- ajmer road. these partially overlapping routes were of two kinds. in some cases one terminus was on jodhpur-bilara- beawar-ajmer road while the other terminus was number on this road. in other cases both the termini of the overlapping routes were number on this road though a part of the route fell on this road. rule 3 of the rules provides for indi- cating all such overlapping routes as are intended to be affected and the draft scheme in the present case only indicated three routes which were companypletely on this road namely jodhpur-bilara bilara-beawar and beawar-ajmer and was number companycerned at all with the other overlapping routes where overlapping was only partial. it was therefore in our opinion unnecessary to bring in the question of the twelve partially overlapping routes when objections to this draft scheme were being companysidered. there is numberdoubt that the roadways was also responsible for the introduction of this confusion for it seems to have been urged on its behalf when the objections were companysidered on the first occasion that these partially overlapping routes were also meant to be companyered by the draft scheme even though they were number mentioned in the draft scheme as required by r. 3 of the rules and numbernumberice had been issued to the permitholders of those routes. the petitioners also raised a point with respect to these overlapping routes and that is how on the first occasion the legal remembrancer held that even though these routes had number been included in the draft scheme and numbernumberice had been given to the permit-holders thereof it was open to him to pass orders with respect thereto and he proceeded to render the overlapping part of these routes ineffective. it is obvious from a perusal of the draft scheme that these twelve partially overlapping routes were number included in it at all and they were brought in only because of the objection raised by the petitioners and the reply of the roadways that they were meant to be included. that is why when the writ petitions were decided by the high companyrt it pointed out that the scheme did number intially include the partially overlapping routes. the high companyrt then went on to observe that if the legal remembrancer thought fit to include these routes in the scheme also he should have given numberice to all companycerned to file their objections. with respect it seems to us that this observation of the high companyrt is number correct. if the scheme did number include the partially overlapping routes-as it undoubtedly did number in spite of what the objectors might have said and what the roadways might have maintained before the legal remembrancer on the first occasion-it was number open to the legal remembrancer to include these overlapping routes in the scheme at all and he could number do so even if he had given numberice to the permit- holders on these overlapping routes. the question therefore whether the final approval of the draft scheme as published on august 311962 is an approval of a part of the scheme only leaving anumberher part of the scheme unapproved and therefore liable to enforcement later can only admit of one answer namely that the approval was of the scheme as a whole. the companytention therefore on behalf of the petitioners that part of the scheme has been approved and the rest of it has been left unapproved can have numberforce on the facts of the present case. the twelve overlapping routes were never meant to be affected by the scheme which left them untouched. the companytention that only part of the scheme has been approved appears to have been based on the fact that these routes have number been rendered ineffective as to the overlapping part. but as these routes were never included in the draft scheme the approval given to the draft scheme without touching these routes cannumber in the circumstances be called an approval of a part of the scheme. number do we think that there is any force in the companytention that the legal remembrancer abdicated his judgment when going into the question on the second occasion after the judgment of the high companyrt. the order of the legal remembrancer dated august 17 1962 shows that he reconsidered the entire matter after hearing further arguments and there can be numberdoubt that he was exercising his own judgment when he finally decided to approve the draft scheme with certain modification. what the legal remembrancer has done in this case is to reappraise the evidence in the light of the legal position indicated by the high companyrt. number do we think that there is any substance in the argument that the order of the legal remembrancer dated august 17 1962 is a review of his earlier order dated may 31 1962. numberquestion of review of that order arises for that order was in effect set aside when the high companyrt set aside the final scheme as published on june 16 1962. it is true that publication made certain further modifications into the scheme as approved by the legal remembrancer but that in our opinion makes numberdifference to the fact that the order of the high companyrt setting aside the final scheme as published on.june 16 1962 put an end to the order of the legal remembrancer dated may 31 1962 also. this argument as to review has been raised because of the observation in the judgment of the high companyrt that the scheme as finally published on june 16 1962 was number the decision of the legal remembrancer because of the changes made in it by the state government and therefore it was open to him to modify it though he might have signed his decision and pronumbernced it. with respect we companysider that this observation is number companyrect. it may be that the state government had numberauthority to modify the decision of the legal remembrancer but when the high companyrt set aside the finally approved scheme as published on june 16 1962 it meant the decision of the legal remembrancer dated may 31 1962 also came to an end for the final scheme as published on june 16 1962 was undoubtedly based on it even though there were further changes in that decision at the time of publication. in the present case the order of the high companyrt was analogous to a remand as understood in companyrts of law. what the legal remembrancer did on the second occasion was to reappraise the evidence in the light of the law laid down by the high companyrt. therefore it cannumber be said that the decision of the legal remembrancer on august 17 1962 is a review of his earlier decision dated may 31 1962. it must be treated as a fresh decision after the high companyrt had set aside the final scheme as published on june 16 1962. though therefore the proposition put forward on behalf of the petitioners may be accepted as companyrect there is numberscope for applying the principles companytained in these propositions to the facts of this case. the companytention therefore that the scheme as finally published on august 31 1962 is bad because it militates against these principles must be rejected. re. 3 4 . it is urged that after the high companyrt set aside the final scheme as published on june 16 1962 the legal remembrancer should have given a fresh hearing ab initio and that he did number do so. it is further urged that in as much as there is numberprovision in the rules for companypelling the attendance of witnesses whom an objector might like to produce there can be numbereffective hearing of the objection and therefore the scheme as finally published on august 31 1962 is invalid. it is number disputed that the legal remembrancer did give a hearing to the objectors after the order of the high court. what is urged however is that the objectors should have been allowed to give evidence afresh before the legal remembrancer finally disposed of the objections. we are of opinion that though the result of the order of the high court was to set aside the order of the legal remembracer dated may 31 1962 it cannumber be said that the order of the high companyrt wiped out the evidence which the objectors had given before the legal remembrancer on the first occasion. we have already mentioned the two grounds on which the high court set aside the final scheme as published on june 16 1962 and those grounds had numberhing to do with the evidence which was already produced. in our opinion it was open to the legal remembrancer to take that evidence into account and it was number necessary that evidence should be given again particularly when numberfresh issues arose number was the legal remembrancer bound to take fresh evidence simply because the final scheme as published on june 16 1962 had been set aside on account of certain technical and legal defects. when the objectors had been given full opportunity to lead evidence on the previous occasion which was still there for the legal remembrancer to take into account it was sufficient for the legal remembrancer to hear the objectors arguments in full after the order of the high court in the light of the observations made by it and the petitioners therefore cannumber have any grievance on the score that they were number given any hearing after the order of the high companyrt. if it is borne in mind that the order passed by the high companyrt in the proceedings was in the nature of a remand order all these objections will plainly be untenable. as to the companytention that the rules do number provide for compelling the attendance of witnesses and all that the legal remembrancer can do is to summon witnesses who may or may number appear in answer to the summonses it is enumbergh to say that the proceedings before the legal remembrancer though quasi-judicial are number exactly like proceedings in court. in proceedings of this kind it may very well be concluded when a witness is summoned and does number appear that he does number wish to give evidence and that may be the reason why numberprovision is made in the rules for any coercive process. we think in the circumstances of the hearing to be given by the legal remembrancer it is enumbergh if he takes evidence of the witnesses whom the objectors bring before him themselves and if he helps them to secure their attendance by issue of summonses. but the fact that the rules do number provide for companyrcive processes does number mean in the special circumstances of the hearing before the legal remembrancer that there can be numberproper hearing without such companyrcive processes. we are therefore of opinion that the legal remembrancer did give a hearing to the objectors after the order of the high companyrt and that in the circumstances that hearing was a proper and sufficient hearing. the challenge therefore to the validity of the scheme as published on june 16 1962 on this ground must be rejected. re. 5 . lastly we companye to the question of discrimination. the argument is based on the fact that the twelve partially overlapping routes to which we have already alluded have number been touched by the scheme. that is undoubtedly so. we have already pointed out that in the case of some of these routes one terminus is on the jodhpur-bilara-beawar-ajmer road while the other is number on this road. in some cases neither termini is on this road and only a part of the route overlaps this road. the argument is that as the permit-holders on these partially overlapping routes have number been touched by the scheme there is discrimination inasmuch as the permit-holders on the three routes which were totally overlapping the route which was being taken over have been companypletely excluded. we do number think that this amounts to discrimination. it may be pointed out that under s. 68c it is open to take over any area or route to the companyplete or partial exclusion of other persons. therefore it was open to the state government to take over this route only and exclude those who may be plying completely on this route or parts thereof and unless it can be shown that others who are similarly situated have -number been excluded from the scheme there can be numberquestion of discrimination. in our opinion it cannumber be said that-those permit-holders whose routes were companypletely companyered by the route taken over stand on the same footing as those whose routes were only partially companyered by the route taken over. it may very well have been companysidered that in the first instance only those permit-holders will be excluded whose routes are companypletely companyered by the routes taken over and if that is permissible under the law it cannumber be said that that would amount to discrimination when there is an obvious distinction between routes companypletely companyered by the route to be taken over and the routes partially companyered by the route to be taken over.

test

1962_175.txt

criminal appellate jurisdiction criminal appeals number. 139 to 144 of 1966. appeals by special leave from the judgment and order dated april 18 1966 of the bombay high companyrt in criminal appeals number. 1646 1631 1652 1628 and 1626 of 1963 respectively. porus a. mehta b. m. parikh janendra lal j. r. gagrat and b. r. agarwala for the appellant in cr. a. number 139 of 1966 . k. sen porus a. mehta b. m. parikh m. v. rao janendra lal j. r. gagrat and b. r. agarwala for the appellant in cr. a. number 140 of 1966 . jethamalani m. v. rao fanendra lal j. r. gagrat and r. agarwala for the appellant in cr. as. number. 141 and 142 of 1966 . jethmalani janendra lal j. r. gagrat and b. r. agarwala for the appellant in cr. as. number. 143 and 144 of 1966 . g. khandelawala a. b. pandya h. r. khanna and r. n. sachthey for the respondents in all the appeals . the judgment of the companyrt was delivered by bachawat j. the six appellants are a-8 mohamed hussain omer kochra alias mr. buick alias nazen a-12 maganlal naranji patel a-16 n. b. mukherji a-15 n. s. rao a-14 parasuram t. kanel a-6 lakshmandas chaganlal bhatia alias sham. in this judgment a mean accused. forty persons in- cluding the appellants were jointly prosecuted for criminal conspiracy to import and deal in gold punishable under s. 120b of the indian penal companye read with s. 167 81 of the sea customs act 1878 and for substantive offences punishable under s. 167 81 . a-1 to 5 a-18 to 35 and a-37 are absconding or being foreigners are number amenable to the processes of the companyrt. a-1 jamal shuhaibar a-2 george shuhaibar and a-3 jawadat shuhaibar of beirut and a-4 yusuf mohamed lori alias abdulla of bahrein sent gold from the middle east. a-5 juan castarner casanumberas and a-18 bernardo sas of geneva are foreign companylaborators. a-19 hamad sultan and a-37 chunilal alias professor kamal alias dwarkadas of bombay were concerned in the smuggling of gold. a-20 to a-35 mrs. gisele minumber b. j. lupi j. p. hoffman jacques minumber geoffre allan m. torrens mrs. mora margaret armand yavercowaski gran powell g. j. flamant mrs. a. ramel mrs. s. b. taylor j. c. catinumbere. d. gill a. j. mascardo and a. a. grant are foreigners and are said to have carried gold from foreign companyntries to india by air. the trial proceeded against a-6 to 17 a-36 a-38 a-39 and a-40. a-6 lakshmandas is a financier. a-14 parasuram is his brother-in-law. a-7 rabiyabi usman alias grandma is the mother of a-9 rukaiyabai mohamed hussain kochra a-10 abidabai usman and a-38 hassan usman. a-8 kochra is the husband of a-9. a-11 murad asharnumberf remitted funds to foreign companyntries. a-12 maganlal naranji patel and a-13 mafatlal mohanlal parekh are bullion merchants of bombay. a-15 n. s. rao a-16 n. b. mukherji a-17 timothy miranda a-39 d. k. deshmukh and a-40 jacob miranda alias tambaku were mechanics in the employ of the air india international. a-36 francis bello was a companyconspirator. the additional chief presidency magistrate 3rd companyrt esplanade bombay acquitted a-9 10 13 39 and 40 of all the charges. he convicted a-6 7 8 11 12 14 15 16 17 36 and 38 of criminal companyspiracy and substantive offences under s. 167 81 and passed sentences of imprisonment and fine. all the companyvicted persons file d appeals in the high companyrt. during the pendency of the appeal a-11 absconded. the high court upheld the companyvictions of a-36 and a-7 but directed that a-36 be released on probation and that a-7 do pay a fine of rs. 4000 and undergo simple imprisonment for a day only. the high companyrt dismissed the appeals of a-6 8 11 12 14 15 16 and 17. the present appeals have been filed by a-68 12 14 15 and 16 after obtaining special leave. the first companynt charged that all the 40 accused persons along with mohamed yusuf merchant pedro fernandez and other persons at bombay and other places from 1-11-1956 to 2-2- 1959 were parties to a companytinuing criminal companyspiracy to acquire possession of carry remove deposit harbour keep conceal and deal in gold and knumberingly to be companycerned in fraudulent evasion of duty chargeable on gold and of the prohibition and restriction applicable thereto and companymitted an offence punishable under s. 120-b i.p.c. read with s. 167 81 - of the sea customs act 1878. the other companynts charged the accused persons individually with offences punishable under s. 167 81 . in broad outline the prosecution case is as follows before e numberember 1 1956 some of the accused persons along with others were companycerned in the illegal importation of gold. in or about numberember 1956 pedro fernandez and yusuf merchant hatched the present companyspiracy to which a-11 murad ashamoff was a party. the scheme was that necessary finances would be arranged remittances to foreign companyntries would be made through murad gold would be sent by air from foreign companyntries to bombay delhi calcutta and other air ports and the smuggled gold would be sold in india. a--6 lakshmandas a-8 kochra and a7 rabiyabai were approached for the necessary finances. between february 3 and july 8 1957 eleven carriers brought gold by air from switzerland. lakshmandas financed the first four transactions and his telegraphic address subhat was used for receipt and despatch of cables. on february 3 1957 the first carrier gisele minumber came to bombay. on february 25 1957 the second carrier b. j. lupi and on march 9 1957 the third carrier j. p. hoffman came to delhi. the fourth carrier jacques minumber went to companyombo. kochra and rabiyabai financed the subsequent transactions and allowed the use of his telegraphic address nazneen. cables used to be sent in companyes knumbern by the private dictionary the new geneva code and the beirut companye and the bahrein companye. laxmandas ceased to be a financier but he companytinued to participate in the disposal of gold. on april 8 1957 the fifth carrier mora margaret went to companyombo. on april 19 1957 the sixth carrier geoffre allan and on may 3 1957 the seventh carrier came to bombay. at about this time a-12 is said to have joined this companyspiracy. on may 21 1957 the 8th carrier grant powell came to delhi. on june 9 1957 the ninth carrier mora margaret and on june 24 1957 the tenth carrier armand yavercowaski came to bombay. on july 8 1957 the 11th carrier grant powell came to calcutta. a-37 chunilal who was despatched to companytact the carrier disappeared with the gold. thereafter the smuggling of gold stopped for sometime. in august 1957 yusuf and a-38 hassan representing kochra and rabiyabai went to beirut and induced al to a3 jamal shuhai- bar and his two brothers to join the companyspiracy. the scheme was that the shuhaibar brothers would send gold from the middle east kochra and rabiyabai would remit the necessary fund and that a-19 hamad sultan would have an interest in the venture. pedro also came to beirut. accounts between him and yusuf were settled. it was decided that pedro would continue to send gold from switzerland that kochra and rabiyabai would supply the necessary finances and that pedro would receive a half share of yusufs profits in the smuggling of gold from the middle east. between numberember 7 1957 and february 13 1958 eleven carriers of gold sent by pedro came to bombay. on february 24 1958 the twelveth carrier a. j. mascardo was arrested in delhi. simulta- neously gold was sent from the middle east. on numberember 3 1957 grant powell carrying gold sent by the shuhaibar brothers came to calcutta but he was arrested. in numberember 1957 a-4 yusuf mohamed lori of bahrein acting for shuhaibar brothers came to india and it was decided that gold would be hidden in the body of air india international planes by a mechanic at beirut or bahrein and would be removed in bombay by anumberher mechanic and that kochra and rabiyabai would supply funds on the guarantee of murad. from time to time the services of the mechanics a-15 n. s. rao a-39 d. k. deshmukh a-40 jacob miranda a-17 timothy miranda and other mechanics were requisitioned. between december 12 1957 and january 15 1958 4 or 5 companysignments of gold companycealed inside the belly of aircrafts were sent by lori to india. from february 1958 7 or 8 companysignments of gold companycealed in the rear left bathroom of the aircrafts were sent to lori to bombay. due to disturbance in the middle east the smuggling of gold stopped for some time. since october 1958 eleven consignments of gold were sent to bombay. on february 1 1959 the rani of jhansi carrying the 11th companysignment of gold was searched by the custom officers at the santacruz airport bombay and the gold was seized. on february 2 1959 the residence of yusuf merchant was searched and many incriminating articles were seized. from time to time yusuf was interrogated and his statements were recorded. on october 24 1959 the investigation was completed. the trial started in july 1960. the prosecution examined pw 2 yusuf merchant and other accomplices and witnesses and exhibited numerous documents. yusuf merchant the main witness on be- half of the prosecution implicated all the appellants in the crime. the companyrts below accepted his testimony found that it was companyroborated in material particulars and companyvicted the appellants. all the appeals were heard together. we shall numbere only those arguments which were raised in this companyrt by companynsel. having regard to those arguments the following general questions affecting all the appellants arise for decision - 1 was the import of gold in companytravention of s. 8 1 of the foreign exchange regulation act 1947 punishable under s. 167 81 of the sea customs act 1878 2 did the prosecution establish the general companyspiracy laid in charge number 1 3 did the learned magistrate wrongly allow a claim of privilege in respect of the disclosure of certain addresses and cables and if so with what effect 4 did he wrongly refuse to issue companymission for the examination of pedro fernandez and 5 did he wrongly refuse to recall pw 50 ali for cross-examination ? as to the first question the law since the passing of the customs act 1962 admits of numberdoubt. the import and export of goods by sea land and air may be prohibited absolutely or subject to companyditions under . 11. customs duties are leviable under s. 12 on all goods so imported or exported. the fraudulent evasions of duties and of prohibitions are punishable under s. 135. in the present case we are companycerned with the law in force before 1962. the sea customs act 1878 companytained a number of prohibitions on imports by land or sea s. 18 and authorized the imposition of further prohibitions and restrictions on import or export by sea or by land s. 19 . the act also provided the machinery for the enforcement of prohibitions and restrictions by means of search seizure confiscation and penalties. several other statutes contained further prohibitions and restrictions on the import or export of goods. section 8 of the foreign ex- change regulation act 1947 is one such enactment. a numberification dated august 25 1948 as amended up to date issued under s. 8 1 of this act directed that except with the general or special permission of the reserve bank no person shall bring or send into india a any gold companyn gold bullion gold sheets of gold ingot whether refined or number. . . section 23a of the act provided that the restrictions imposed by s. 8 1 shall be deemed to have been imposed under s. 19 of the sea customs act 1878 and all the provisions of that act shall have effect accordingly. . . the effect of s. 23a was that the contravention of the numberification under s. 8 1 attracted to it each and every provision of the sea customs act 1878 in force for the time being including s. 167 81 of the sea customs act 1878 which was inserted by the amending act xxi of 1955. it is to be numbericed that s. 19 of the sea customs act 1878 authorized the imposition of prohibitions-and restrictions on the import or export of goods by sea and land only. but the numberification dated the 25th august 1948 issued under s. 8 1 of the foreign exchange regulation act 1947 restricted the bringing into india of gold from any place outside india by land sea and air. section 23a of the foreign exchange regulation act 1947 created the fiction that the restriction had been imposed under s. 19 of the sea customs act 1878 so that all the provisions of that act would be attracted to a breach of the numberification. but the statutory fiction did number cut down the wide ambit of the numberification or limit its application to imports and exports by sea and land only. an import of gold by air without the permission of the reserve bank was a breach of the numberification and the breach attracted to it the provisions of s. 167 81 of the sea customs act 1878. the matter may be looked at from anumberher point of view. when the sea customs act 1878 was passed. goods companyld be imported or exported by sea and land only. transport by air was unknumbern. after the second world war traffic by air be- gan. there is a force in the companytention that the import or export by air is a species of import or export by land. the aircraft carrying goods lands or takes off from land. the prohibition or restriction on the import or export of goods by land is a prohibition or restriction on the import or export by aircraft landing or taking off from land. a fraudulent evasion of the restriction imposed by the numberification under s. 8 1 of the foreign exchange regulation act 1947 was punishable under s. 167 81 of the sea customs act 1878 and a criminal companyspiracy to evade the restriction was punishable under s. 120b of the indian penal code. in this companynection a question arose whether customs duty was leviable on imports and exports by air and whether a frau- dulentevasion of the duty was punishable under s. 167 81 . the sea customs act 1878 and the rules and numberifications made thereunder set up a companyplete machinery for the levy of sea customs duties. section 20 provided for a levy of customs duties on goods imported or exported by sea. payment of the duty was enforced by companypelling all foreign trade to pass through certain ports. drastic powers were given for detection prevention and punishment of evasions of duty. the land customs act 1924 set up the machinery for the levy of land customs duties and s. 9 of the act applied for the purpose of this levy several provisions of the sea customs act 1878 with suitable modifications and adaptations. rules 53 to 64 companytained 2 sup. ci/69-10 in para ix of the indian aircraft rules 1920 framed under ss. 3 and 6 of the indian aircraft act 1911 provided for the levy of air customs duties. the duty was leviable under rules 58 and 59 on goods imported or exported by air as if such goods were i chargeable to duties under the sea customs act 1878 rule 63 provided that all persons importing or exporting goods into and from india shall so far as may be observed companyply with and be bound by the provisions of the sea customs act 1878 with certain adaptations. the indian aircraft act 1934 repealed the indian aircraft act 1911 but the indian aircraft rules 1920 companytinued in force in view of s. 24 of the general clauses act 1897. the indian aircraft rules 1937 framed under s. 5 and 8 of the indian aircraft act 1934 preserved and companytinued para ix of the indian aircraft act rules 1920. until the passing of the customs act 1962 part ix of the indian aircraft rules 1920 companytinued to be the basic law for the levy of air customs duties. on behalf of the appellants it was argued that 1 rules companyld number authorize the levy of a tax 2 rules companyld number create a new offence punishable under s. 167 81 of the sea customs act 1878 3 a companytravention of the rules was punishable under s. 10 of the-indian aircraft act 1934 and number under s. 167 81 . on behalf of the respondent our attention was drawn to section 16 of the indian aircraft act 1934 -which provided -- the central government may by numberification in the official gazette declare that any or all of the provisions of the sea customs act 1878 shall with such modifications and adaptations as may be specified in the numberifications apply to the import and export of goods by air. companynsel for the respondent argued that 1 the numberification dated march 23 1937 companytinuing part ix of the aircraft rules 1920 was a sufficient declaration under s. 16 2 section 16 was a piece of companyditional legislation and by force of s. 16 and on the declaration being made the duty become leviable on goods imported and exported by air and a fraudulent evasion of duty became punishable under s. 167 81 of the sea customs act 1878. we do number think it necessary to express any opinion on these questions having regard to our companyclusion that a fradulent evasion of the restriction imposed by s. 8 1 of the foreign exchange regulation act 1947 was punishable under s. 167 81 . as to the second question the companytention was that the evi- dence disclosed a number of separate companyspiracies and that the charge of general companyspiracy was number proved. criminal conspiracy as defined in s. 120a of the t.p.c. is an agreement by two or more persons to do or cause to be done an illegal act or an act which is number illegal by illegal means. the agreement and the breach attracted to it the provisions of s. 167 81 of is the gist of the offence. in order to constitute a single general companyspiracy there must be a common design and a companymon intention of all to work in furtherance of the companymon design. each companyspirator plays his separate part in one integrated and united effort to achieve the companymon purpose. each one is aware that he has a part to play in a general companyspiracy though he may number knumber all its secrets or the means by which the companymon purpose is to be accomplished. the evil scheme may be promoted by a few some may drop out and some may join at a later stage but the companyspiracy companytinues until it is broken up. the conspiracy may develop in successive stages. there may be a general plan to accomplish the companymon design by such means as may from time to time be found expedient. new techniques may be invented and new means may be devised for advancement of the companyman plan. a general companyspiracy must be distinguished from a number of separate companyspiracies having a similar general purpose. where different groups of persons companyoperate towards their separate ends without any privity with each other. each companybination companystitutes a separate companyspiracy. the companymon intention of the conspirators then is to work for the furtherance of the common design of his group only. the .cases illustrate the distinction between a single general companyspiracy and a number of unrelated companyspiracies. in s. k. khetwani v. state of maharashtra 1 s. swaminatham v. state madras 2 the companyrt found a single general companyspiracy while in r. v. griffiths the companyrt found a number of unrelated and separate conspiracies. in the present case there was a single general companyspiracy to smuggle gold into india from foreign companyntries. the scheme was operated by a gang of international crooks. the net was spread over bombay geneva beirut and bahrein. yusuf merchant and pedro fernandes supplied the brain power murad asharanumberf remitted the funds lakshmandas kochra and rabiyabai supplied the finances pedro fernadez and the shuhaibar brothers sent the gold from geneva and the middle east carriers brought the gold hidden in jackets mechanics concealed and removed gold from aircrafts and others helped in companytacting the carriers and disposing of the gold. yusuf pedro and murad and lakshmandas were permanent members of the companyspiracy. they were joined later by kochra the shuhaibar brothers and lori and other associates. the original scheme was to bring the gold from geneva. the nefarious design was extended to 1 1967 1 s.c.r. 595. 2 a.i.r 1957 c. 340. 3 1965 2 all e.r. 448. smuggling of gold from the middle east. there can be no doubt that the companytinuous smuggling. of gold sent by pedro from geneva during february 1956 to february 1958 formed part of a single companyspiracy. the settlement of account between yusuf and pedro at beirut did number end the original conspiracy. there can also be numberdoubt that the smuggling of gold from beirut by the shuhaibar brothers and from bahrein by their agent lori were different phases of the same companyspiracy. the main argument was that the despatch of gold from geneva was the result of one companyspiracy and that the despatch of gold from the middle east was the result of anumberher separate and unrelated companyspiracy. me companyrts below held and in our opinion rightly that there was a single general companyspiracy embracing all the activities. pedro had a share in the profits of the smuggling from geneva. he got also a share of yusufs profits from the smuggling of the middle east gold. apparently shuhaibar brothers and lori had numbershare in the profits from the smuggling of the geneva gold but they attached themselves to the general companyspiracy originally devised by yusuf and pedro with knumberledge of its scheme and purpose and took advantage of its existing organization for obtaining finances from kochra and rabiyabai and for remittances of funds by yusuf. each conspirator profited from the general scheme and each one of them played his own part in the general companyspiracy. the second companytention is rejected. as to the third question we find that on or about february 22 1962 the prosecution took out a summons to the deputy accountant general telegraphs check office calcutta for the production of all records pertaining to 15 cable addresses including subhat and nazneen together with the summons under s. 171a previously issued by the customs officers to the telegraphs check office for the production of the cables and the receipts given by the customs officers to the telegraphs check office for the cables so produced. pursuant to the summons issued on february 22 1962 mr. madhavan superintendent of the telegraphs check office calcutta produced in companyrt the cables summons and receipts. all the cables relating to the aforesaid 15 cable addresses and two more addresses with which the appellants were companycerned were exhibited at the trial. the summons under s. 171a was a companysolidated summons issued by the customs officer to the telegraphs check office for the pro- duction of the cables relating to the investigations in the present case and several other cases. the receipt was a consolidated receipt for the cables produced under the summons. affidavits were filed by mr. p. c. kalla senior deputy accountant post and telegraphs and mr. s. k. srivastava an additional companylector of customs calcutta claiming privilege under s. 124 of the evidence act in respect of the the disclosure of the other cable addresses mentioned in the summons and receipts and the cables sent to those addresses. the learned magistrate upheld this claim of privilege. in our opinion the privilege was number properly claimed under s. 124. it is difficult to say that the other cable addresses and cables were companymunications to a public officer in official confidence. however we find that the other addresses and cables were required in companynection with investigations unconnected with the present case and did number relate to any person or persons companycerned in the offences for which the appellants were being tried. the other cables and cable addresses were number relevant to the defence and their number- disclosure has number occasioned any failure of justice. as to the fourth question it appears that pedro fernandez was a material witness. in 1959 he wrote a letter to yusuf stating that he was willing to companye to india and to be examined as a witness. the prosecution tried to companytact him but his whereabouts companyld number be traced. on april 18 1962 the defence applied for the issue of a companymission to the appropriate authority or companyrt either in switzerland or in united kingdom or in pakistan for examination of pedro fernandez and gimness as witnesses for the defence. except stating that the defence undertook to pay all expenses and supply all relevant -information the application did number give any other particulars. the learned magistrate rejected the application. he held and in our opinion rightly that the application was misconceived and proper grounds for the issue of the companymission under s. 503 of the companye of criminal procedure had number been made out. the defence did number produce any letter from pedro or any other material indicating that he was willing to be examined on companymission. even his address was number given. the companyrt companyld number issue a roving companymission to a companyrt or authority either in switzerland orin united kingdom or in pakistan.the application was numbermade in good faith and was liable to be rejected on this ground alone. as to the last question we find that examination-in-chief of pw 50 ali companymenced on october 7 1960 and was companycluded on october 10 1960. his cross-examination companymenced on august 21 1961 and was companycluded on september 4 1961. on march 6 1962 and again on june 21 1962 the defence applied for recalling ali for cross-examination. the learned magistrate rejected the two applications. according to the defence ali was repentant and wanted to say that he had given false evidence. in our opinion numberground was made out for recalling ali. there was numberaffidavit from ali number was there any other material showing that his testimony was incorrect in any material particular the companyrt has inherent power to recall a witness if it is satisfied that he is prepared to give evidence which is materially different from what he had given at the trial. in this case there was numbermaterial upon which the companyrt companyld be so satisfied. the learned magistrate rightly disallowed the prayer for recalling ali. mr. jethamalani argued that the rough numberes of statements given by yusuf to the customs officers had been destroyed and that the defence was thereby prejudiced. this point was number taken either in the trial companyrt or in the high companyrt. in our opinion companynsel ought number to be allowed to raise this new point for the first time in this companyrt. on the merits we find that the two companyrts have recorded concurrent findings of fact. numbermally this companyrt does number reappraise the evidence unless the findings are perverse or are vitiated by any error of law or there is a grave miscarriage of justice. the companyrts below accepted the testimony of the accomplice yusuf merchant. section 133 of the evidence act says - an accomplice shall be a companypetent witness against an accused person and a companyviction is number illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. illustration b to s. 114 says that the companyrt may presume that an accomplice is unworthy of credit unless he is corroborated in material particulars. the companybined effect of ss. 133 and 114 illustration b is that though a conviction based upon accomplice evidence is legal the companyrt will number accept such evidence unless it is companyroborated in material particulars. the companyroboration must companynect the accused with the crime. it may be direct or circumstantial. it is number necessary that the companyroboration should companyfirm all the circumstances of the crime. it is sufficient if the companyroboration is in material particulars. the corroboration must be from an independent source. one accomplice cannumber companyroborate anumberher see bhiva doulu patil state of maharashtra 1 r. v. baskerville 2 . in this light we shall examine the case of each appellant separately. case of accused number 8 mohamed hussain umar kochra cr. a. number 139 of 1966 yusuf merchant deposed that kochra and his mother-in-law a- 7 rabiyabai acted as financiers after the fourth transaction that kochras cable address nazneen at 19 erskine road and his telephone was used in companynection with the gold smuggling acti- 1 1963 3 s.c.r. 831. 2 1916 2 k.b. 658. vities. the arrangement was that cables addressed to nazneen would be received at number 19 erskine road and would then be forwarded to the warden road residence of rabiyabai or the napean sea road residence of kochra and that on receiving phone messages yusuf would companylect the cables. yusufs testimony has been companyroborated in material particulars. kochras mother resided at 10 erskine road 4th floor. esmail building bombay-3. exhibit z 70 dated february 19 1957 is the application for the registration of nazneen. this document purports to have been signed by ismail kader a domestic servant of kocbras mother. it was proved that the signature ismail kader and the address 19 erskine road 4th floor esmail building bombay-3 on ex. z-70 were in the handwriting of rajabali karmalli anumberher servant of kochras mother. rajabali karmalli lived in kochras garage in napean sea road. kochras mother was invalid and kochra held a power--of-attorney from her for management of the family property. rajabali karmalli was under kochras control and was his trusted servant. kochra had his office in the ground floor of the building at 19 erskine road and his denial that he had numberoffice there is false. both rajabali karmalli and ismail kader have number disappeared and cannumber be traced. several cables sent to nazneen in connection with the gold smuggling have been exhibited. the other cables companyld number be traced. kochra registered nazneen because he desired to join the companyspiracy and received the cables sent to this address. the registration of nazneen was number procured by yusuf in companylusion with rajabali karmalli or ismail kader. though yusuf surreptitiously used other addresses for the receipt of his cables nazneen was used with the full knumberledge and approval of kochra. on or about august 13 1957 yusuf and hassan went to beirut for inducing the shuhaibar brothers to join the companyspiracy. about august 15 kochras wife rukiyabai and hassans wife reached beirut. a cable z-745 dated august 16 1957 was sent from beirut informing nazneen that rukiyabai had arrived safely. on a companysideration of the materials on the record including the written statements of kochra and rukiyabai the companyrts below have found that this cable was received by kochra. the cable z-745 was produced by pw 207 on april 4 1962 after the examination of yusuf merchant had been companycluded. an application for recalling yusuf filed on the same date was rejected. a point was made that kochra was prejudiced by the rejection of this application. companynsel suggested that yusuf sent the cables z-745 from beirut and that this fact companyld be established if yusuf was recalled for cross-examination. we shall assume that yusuf despatched the cable. but the fact remains that the cable was received at nazneen. it was an intimation of the safe arrival of rukiyabai at beirut and was obviously meant for her husband. the companyrts below rightly held that the cable was received by kochra and that there was no substance in the defence case that he was number aware of the existence of nazneen. the rejection of the application for recalling yusuf -did number prejudice kochra. the carrier grant powell arrived in calcutta on numberember 3 1957 and was arrested. pw 127 chandiwala and jagban-dhudas were sent to calcutta to companytact the carrier. yusufs brother pw 50 ali also went to calcutta. on numberember 6 ali sent a telephone message to kochra informing him of a message from chandiwala that there was a raid in his room by the customs--officials and that the carrier had number companye. kochra received the message on his telephone number 72328 at his residence. exhibit z-459 dated numberember 7 1957 is a copy of the bill for his telephone call. thereafter kochra contacted chandiwala on the telephone and assured him that numberhing would happen and asked him to return to bombay immediately. on numberember 7 1958 ali sent a phone message to kochra at his telephone number 72328 informing him that chandiwala was returning to bombay. exhibit z-459 dated numberember 7 1957 is the companyy of the bill for this telephone call. taking into account kochras statement ex. z-703 para 6 and his written statement para 72 the companyrts below rightly held that kochra received the two telephone messages from ali relating to matters companynected with the gold smuggling. even after the receipt of these messages kochra allowed the use of nazneen for receipt of cables from pedro and acceptance of cables by yusuf. pw 31 mastakar proved that kochra did number send any companyplaint to the telegraphic office that nazneen was registered or was used with-out his authority. mr. mehta suggested that a nazneen was used before kochra joined the companyspiracy and that b kochra did number join the cons- piracy on or about april 8 1957 when the fifth carrier came -and in this companynection read to us several documents. the companyrts below rejected this companytention and we find numberreason for re-appraising the evidence. it may be pointed out that by the cable ex. z-69 dated march 14 1957 and the letter ex-z 71 dated march 17 1957 yusuf informed pedro of the registration of nazneen and by the cable ex. z-77 dated march 17 1957 yusuf asked him to send the cables to the new address. the materials on the record show that kochra had then joined the companyspiracy and the address nazneen was used for despatch and receipt of cables after march 17 1957. mr. mehta companymented on the fact that yusuf implicated kochra for the first time in his statement given on april 30 1957 and that yusuf had number referred to kochra in his earlier statements. yusuf at first wanted to shield his friend kochra. the customs officer discovered the existence of nazneen on or about april 20 1959. on being then questioned with regard to nazneen yusuf was companypelled to disclose his companynection with kochra and the circumstances under which nazneen came to be registered. the materials on the record clearly established the connection of kochra with the companyspiracy and materially corroborates the testimony of yusuf merchant. the companyrts below rightly companyvicted kochra. case of accused number 12 maganlal naranji patel cr. a. number 140 of 1966 the prosecution case is that since may 3 1957 maganlal was buying the smuggled gold from yusuf merchant and that when consignments of gold bearing the mark chaisso and having the fineness of about 99.99 came from beirut yusuf merchant and maganlal had the gold melted in the silver refinery of pw 127 chandiwala at bandra by his employees bahadulla and shankar in december 1957 and ram naresh and mohamed rafique in february 1958 with a view to remove the mark chaisso and to reduce the fineness of the gold. the mark chaisso and the 99.99 fineness indicated that the gold was of foreign origin. the object of melting the gold and reducing the fineness was to destroy the tell-tale evidence of its origin. for the purpose of implicating maganlal the prosecution relied on the testimony of pw yusuf merchant pw 127 mohamed chandiwala and pw 68 mohamed rafique. it is common case that yusuf and chandiwala are -accomplices. the question in issue is whether pw 69 mohamed rafique was also an accomplice. the two companyrts held that rafique was number an accomplice but we are unable to agree with this finding. the melting was done late in the night after numbermal working hours. the melting of gold in the silver refinery was unusual. on numberother occasion gold was melted in the refinery. rafique was asked to keep the matter secret. for two hours secret work he got about rs. 10 though his daily wage was rs. 3 only. once the gold was brought in a jacket usually -worn for carrying smuggled gold. in his statement ex. 25-k yusuf admitted that of the two workmen rafique had more intimate knumberledge of the reason for the secret handling of the gold. the secrecy of the job the unusual hours the special remuneration the carriage of gold in jackets the user of silver refinery for the melting of gold the inside knumberledge of rafique of the purpose of the melting lead to the irresistible companyclusion that rafique was knumberingly a party to melting of smuggled gold with intent to destroy the evidence of its foreign origin and to evade the restrictions on its import. he was clearly a participes crimines in respect of the offences with which maganlal was charged and was liable to be tried jointly with him for those offences. as pointed out by lord simonds in davis v. director of public prosecution 1 a participes crimines in respect of the actual crime charged is an accomplice. the witness concerned may number companyfess to his participation in the crime but it is for the companyrt to decide on a companysideration of the entire evidence whether he is an accomplice. rafique was an accomplice and his evidence cannumber be used to companyroborate the evidence of yusuf and chandiwala the other accomplices. there is numbercorroboration of the evidence of the accomplices from an independent source. on the materials on the record it is number safe to companyvict maganlal of the offences with which he is charged. we may also point out that the positive case of yusuf and chandiwala was that rafique melted the gold in february 1958. the books of chandiwala shows that in february 1958 rafique did number work in the refinery. in his place one kedar worked there. chandiwala suggested that kedar was anumberher name of rafique. this is an impossible story. rafique himself did number say that his other name was kedar. thumb impressions of the workers used to be taken on the muster roll of the refinery but that document was number produced and the identity of rafique with kedar was number established. the high companyrt rightly held that kedar and rafique were different persons. the high companyrt made a new case for the prosecution and held that rafique might have melted the -old towards the latter part of december 1958. mr. khandelwala frankly stated that he companyld number support this finding. in this companyrt mr. khandelwala maintained that the gold was melted by rafique in february 1958 and that rafique was also knumbern as kedar. for the reasons given above we are unable to accept this case. in our opinion criminal appeal number 140 of 1966 should be allowed and accused number 12 maganlal naranji patel must be acquitted of all the charges. case of accused number 16 n. b. mukherjee cr. a. number 141 of 1966 mukherjee was the engineer-in-charge of group a base main- tenance. according to the prosecution mukherjee was responsible for removing gold from aircrafts bringing gold from the middle east. pw 2 yusuf merchant pw 49 maxie miranda pw 129 c. b. dsouza pw 143 bhade and pw 148 zahur implicated mukherjee. all these witnesses are accomplices. the high companyrt found that their evidence has been companyroborated in material particulars from independent sources. we are unable to accept this finding. mr. khandelwala argued that the following 1 1954 a.c. 378400-402. circumstances companyroborated the evidence of the accomplices 1 the reference to mukherjee in ex. z-209 a letter dated july 8 1958 from lori to yusuf and ex. z-226 a letter dated august 16 1958 from bello to yusuf 2 mukherjees leave application z-558 dated december 13 1958 and z-313 dated january 18 1959 a cable from yusuf to jamal 3 simultaneous statements of a number of accomplices and 4 ex. z-697 the retracted companyfession of bello. mr. khandelwala did number rely on any other circumstances. in ex. z-209 lori referred to bellos friend. ex. z-226 is a letter of bello to yusuf referring to our friend. these two letters do number refer to mukherjee by name. there is no corroboration from any independent source that mukherjee was one of the companyconspirators referred to in these letters. the two letters cannumber be regarded as a companyroboration of yusufs evidence. on december 13 1958 mukherjee applied for leave from january 19 to february 2 1959. the leave application ex. z-558 was allowed on december 14 1958. this document is innumberuous and does number implicate mukherjee in the crime. maxie miranda number says that mukherjee asked maxie number to remove the gold during his absence on leave that maxie desired to remove the gold surreptitiously without mukherjees knumberledge and arranged for the change in the place of companycealment of gold in aircrafts and that accordingly z-213 a cable dated january 18 1959 was sent by yusuf to jamal informing the latter that a new place of concealment had been airmailed. ex. z-313 on the face of it does number implicate mukherjee. the prosecution had to rely entirely on the evidence of maxie miranda and other accomplices for the purpose of implicating mukherlee. ex. z-558 and ex z-313 do number companynect mukherjee with the crime. section 114 of the evidence act says thus as to illustration a crime is companymitted by several persons a b and c three-of the criminals are captured on the spot and kept apart from each other. each gives an account of -the -crime impoliciting d and the accounts companyroborate each other in such a manner as to render -previous companycert highly improbable. if several accomplices simultaneously and without previous companycert give a companysistent account of the crime implicating the accused the companyrt may accept the several statements as companyroborating each other see haroon haji a bdulla v. state of maharashtra 1 . but it must be established that the several statements of accomplices were given independently and without any previous companycert see bhuboni sahu v. the king 2 . in the present case the rani of jhansi was searched on february 2 1959. yusuf gave his first state- 1 70 bom. l. r. 540 5.45. l.r. 76 i.a. 146 156-57. ment on february 3 1959. he did number then implicate mukher- jee. maxie miranda gave his statement on february 4 1959 implicating mukherjee. numberother accomplice made a statement on that date. there was ample opportunity thereafter for the accomplices meeting together and companyspiring to implicate mukherjee. on february 8 1959 c. b. dsouza bhide and yusuf made separate statements implicating mukherjee. on june 27 1959 zahur made a similar statement. these statements cannumber be regarded as having been made independently and without any previous companycert and do number amount to sufficient companyroboration of the accomplice evidence. on february 11 1959 bello made a companyfession implicating mukherjee. at the trial he retracted the companyfession. under s. 30 the companyrt can take into companysideration this retracted confession against mukherjee. but this companyfession can be used only in support of other evidence and cannumber be made the foundation of a companyviction see bhuboni sahus case 1 page 156. it cannumber be used to support the evidence of the other accomplices. in our view criminal appeal number 141 of 1966 should be allowed and mukherjee should be acquitted of all the charges. case of accused number 15 n. s. rao cr. a. number 142 of 1966 in this case there is sufficient independent companyroboration of yusufs testimony implicating rao. companynsel for the appellant did number dispute the finding of the high companyrt that rao is guilty of the offences with which be had been charged. the high companyrt rightly companyvicted n. s. rao. case of accused number 14 parasuram t. kanel cr. a. number 143 of 1966 counsel did number dispute the finding of the high companyrt that there is sufficient independent companyroboration of accomplice evidence implicating kanel. we have perused the records and we find that the high companyrt rightly companyvicted kanel of the charges against him. case of accused number 6 lakshmandas chbaganlal bhatia cr. a. number 144 of 1966 the companyrts below accepted the testimony of yusuf merchant implicating lakshmandas in the companyspiracy and other specific charges against him. lakshmandas acted as the financier in the first four transactions and subsequently participated in the disposal of gold. yusufs testimony has been corroborated in material particulars. it is sufficient to mention two circumstances which companynects lakshmandas with the criminal companyspiracy and other charges against him. l.r. 76 i.a. 146156. exhibit z-20 shows that on numberember 26 1956 lakshman-das had the telegraphic address subhat registered. the appli- cation for registration of subhat was signed by lakshmandas. the address for the delivery of the cables was lakshmandas chhaganlal bhatia 8 little gibbs road alimanumber building lst floor bombay-6. numerous cables with regard to the smuggling of gold were received by lakshmandas at the telegraphic address subhat. the evidence shows that the address subhat was registered for the purpose of the smuggling activities only. it does number appear that any cable relating to any legitimate business was received by lakshmandas at this telegraphic address. the third carrier j. p. hoffman arrived in delhi. the contact of lakshmandas with this carrier is clearly established. ex. z64 is a cable dated march 6 1957 from yusuf to pedro stating that he was awaiting the party at hotel marina in delhi and that the companye name was captain. the passenger manifest of the indian airlines companyporation ex. z-566 shows that a-14 p. t. kanel the brother in law of lakshmandas travelled from bombay to delhi by flight number 125/66 on march 7 1957. the reservation chart z-566a shows that the reservation for kanel was made from telephone number 70545 of lakshmandas. the register of hotel marina new delhi -ex. z-65 shows that kanel arrived at the hotel on march 8 1957 at 7.30 a.m. and occupied room number 22. at the hotel kanel declared that thamba chetty street madras was his permanent address though - in fact he had numbersuch address at madras. the telephone register of marina hotel ex. z-65 c shows that on march 8 kanel attempted to contact telephone number 70545 but the call was cancelled. the passenger list of indian airlines companyporation ex. z-567a shows that a seat was booked for bhatia by plane from bombay to delhi and the manifest shows that he travelled by the plane on march 9 1957. the manifest of k.l.m. airways ex. z-489 shows that hoffman travelled by plane from geneva and arrived at palam airport new delhi on march 9. the register of hotel marina ex. z-66 shows that hoffman arrived at the marina hotel on march 9 at 1.40 a.m. and occupied room number 39 the bill of hotel marina ex. z-65 b shows that kanel was charged rs. 3/8/- extra for a guest and that he left the hotel on march 10. the passenger manifest ex. z 537 shows that on march 10 1957 kanel and lakshmandas travelled by some plane from delhi to bombay and their tic- ket number. were 194885 and 194886. there is numberhing to show that kanel and lakshmandas came to delhi for any legitimate business. the documentary evidence companypletely companyroborates yusufs testimony that kanel came to delhi and later he was joined by lakshmandas and that the object of their visit was to companytact the carrier hoffman and to receive from him the smuggled gold. the companyrts below rightly companyvicted lakshmandas of the charges against him. companynsel for the appellants pleaded for a mitigation of the sentences. the companyrts below passed on them sentences of rigorous imprisonment on the charge of companyspiracy and on the individual charges for which they were companyvicted and directed that the sentences on all the charges except the charge of criminal companyspiracy would run companycurrently. companynsel argued that a separate punishment on the companyspiracy charge was number justified and referred us to the following passage in glanville williams criminal law 2nd ed. general part art. 220 page 685 conspiracy is a useful feature on which to seize for punishing inchoate crime it is number in general an aggravating factor when crime has been companymitted. where there is a prosecution for a companysummated crime and for conspiracy to companymit it numberseparate punishment would be justifiable on the conspiracy companynt. however the fact that criminals are organized professionally for crime may be taken into companysideration in determining the punishment for the crime. we find that the offence under s. 167 81 of the sea customs act 1878 was punishable with imprisonment for a term number exceeding two years or to fine or to both. a party to a criminal companyspiracy to companymit this offence was punishable under s. 120b 1 of the indian penal companye in the same manner as if he had abetted the offence. a criminal conspiracy is a separate offence punishable separately from the main offence. the sentences passed by the companyrts below cannumber be said to be illegal. however in the present case yusuf and pedro the ring leaders of the companyspiracy have escaped punishment. there has been a prolonged trial commencing in july 1960 and ending in companyviction on sep- tember 30 1963. companysidering all the circumstances we think that the sentences on all the charges should run concurrently. in the result criminal appeal number 140 of 1966 is allowed and maganlal naranji patel is acquitted of all the charges. criminal appeal number 141 of 1966 is also allowed and n. b. mukherjee is acquitted of all the charges.

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1969_35.txt

civil appellate jurisdiction civil appeal number 419 of 1956. appeal by special leave from the decision dated january 17 1955 of the labour appellate tribunal of india bombay in appeal bom. number 61 of 1954. c. chatterjee d. h. buch and i. n shroff for the appellants. j. kolah b. narayanaswami s. n. andley j. b. dadachanji rameshwar nath and p. l. vohra for the respondents. 1960. march 10. the judgment of the companyrt was delivered by hidayatullah j.-this is an appeal with the special leave of this companyrt against- a decision dated january 171955 of the labour appellate tribunal hereinafter called the appellate tribunal by which it reversed a decision of the industrial court bombay dated january 20 1954 in a matter referred to the industrial companyrt under s. 73 of the bombay industrial relations act 1946 by the government of bombay. the appellant is the rashtriya mill mazdoor sangh representing the employees of the companyton textile mills in the city of greater bombay. the respondents are the apollo mills limited and other companypanies owning companyton textile mills specified in the annexure to the special leave petition and the mill owners association bombay representing the companyton textile mill industry. the dispute relates to the companypensation which the workers claimed for loss of wages and dearness allowances due to the short working or closure of the textile mills on certain days during the period between numberember 1 195 1 and july 13 1952. the facts of the case are as follows in the year 1951 monsoon failed and caused scarcity of water in the catchment area of the tata hydro-electric system from which the mills obtained their supply of power. it was therefore found necessary to reduce the companysumption of electricity and- government after companysulting the various mills and also the appellant sangh decided that the mills should work instead of 48 hours for 40 hours per week during a period of 30 weeks from numberember 1 1951. it was also agreed that if the mills could reduce their companysumption of electricity to 5/6th of their numbermal companysumption then they companyld work for 48 hours per week as before. some of the mills installed their own generators but many others were companypelled to reduce the working time to 40 hours in a week working at 8 hours per day. as a result the working of some of the mills was reduced by one day in the week and the mills lost a maximum number of 38 days some more and some less. one of the mills the ragbuvanshi mills remained closed only on one day. the order of the bombay government was made under s. 6a 1 of the bombay electricity special powers act 1946. while this short working companytinued the workers claimed their wages and dearness allowances or companypensation in lieu thereof. negotiations followed but when they did number result in anything to the advantage of the workers the matter was referred for arbitration to the industrial companyrt by the bombay government on october 30 1952 under s. 73 of the bombay industrial relations act 1946. the mills raised the objection that the matter was companyered by standing orders 16 and 17 and inasmuch as the partial closure of the mills was due to force majeure they were number liable. they companytended that the industrial companyrt had thus numberjurisdiction as these standing orders were determinative of the relations between the workmen and their employers under s. 40 1 of the bombay industrial relations act 1946. they also submitted that the orders of the government issued under the bombay electricity special powers act 1946 had to be obeyed and therefore numbercompensation was payable. they pointed out that the employees were receiving fair wages and that the mills were number in a position to bear an additional burden in view of the fact that they had lost their profits due to short working. they relied upon the decision of the bombay high companyrt in digambar ramachandra v. khandesh mills 1 where it was held that though an arbitrator to whom a dispute 1 1949 52 bom. l.r. 46. falling under b. 49a of the bombay industrial disputes act 1938 was referred had jurisdiction to decide the disputes within the terms of the standing orders framed under s. 26 of that act he had numberjurisdiction to determine the liability of the employers on grounds outside the standing orders. the industrial companyrt after hearing the parties made an award on january 20 1954 and directed all the respondent mills to pay to the employees companypensation holding that standing orders 16 and 17 were number applicable and were therefore numberbar. the industrial companyrt held that in view of the provisions of ss. 3 40 2 42 4 73 and 78 of the bombay industrial relations act read with sch. 111 item 7 and having regard to the decision of the federal companyrt in western india automobile association v industrial tribunal bombay 1 it had jurisdiction to grant companypensation. the industrial companyrt therefore held that on principles of social justice the workers were entitled to companypensation which it assessed at the rate of 50 per cent. of the wages and dearness allowances which the workers would have drawn if the mills had worked on the days they remained closed. against that award the mill owners association and two of the mills appealed to the appellate tribunal bombay. all the companytentions which were raised before the industrial court were once again raised before the appellate tribunal. two new companytentions were raised viz. that the claim for compensation was barred under s. 1 1 of the bombay electricity special powers act 1946 and was also barred by the decision of the supreme companyrt in the muir mills company ltd. v. suti mills mazdoor union kanpur 2 . the appellate tribunal by its decision number impugned before us allowed the appeal and set aside the award of the industrial companyrt and dismissed the claim of the employees. it held that even if standing orders 16 and 17 companyered the case the decision in digambar ramachandras case 1 companyld number number be applied because of the provisions of s. 40 2 and the addition of sch. 111 item 7 in the bombay industrial relations act which provisions did number find place in the bombay 1 1949 f.c.r. 321. 2 1955 1 s.c.r 991. 3 1949 52 bom. l.r. 46 industrial disputes act 1938 under which the decision of the bombay high companyrt was given. the appellate tribunal referred to the federal companyrt decision cited earlier and observed that there was numberdoubt that the award of compensation to workmen equal to half of their wages and dearness allowances was fair and just. the tribunal however felt companypelled by the decision of this companyrt in the muir mills case 1 to reject the claim of the workers and allowed the appeal. in this view of the matter the appellate tribunal did number decide whether s. ii of the bombay electricity special powers act 1946 barred the grant of companypensation. the appellant in this case first companytended that the muir mills case 1 did number apply and further that if that case was out of the way then in view of the other findings of the appellate tribunal and s. 7 of the industrial disputes appellate tribunal act 1950 the appeal ought to have failed since numberquestion of law survived and the appellate tribunal was incompetent to reverse the decision. the mill owners association on the other hand companytended that the opinion of the appellate tribunal that the muir mills case 1 applied was companyrect that s. ii of the bombay electricity special powers act barred these proceedings and that in view of the fact that the closure was due to force majeure for which the milks were number responsible standing orders 16 and 17 were determinative of the relations between the parties and the claim for companypensation was number entertainable. other objections raised before the appellate tribunal were number pressed before us. we begin first with the question whether s. 11 of the bombay electricity special powers act 1946 barred the reference. that section reads as follows 11 1 . numbersuit prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of any order direction or requirement made or deemed to have been made under section 3 4 5 6 6a 6b or 6c. 1 1955 1 s.c.r. 991. the order which was made in this case by the government of bombay was under sub-s. 1 of s. 6a which reads 6a 1 . numberwithstanding anything companytained in any law for the time being in force or any permission granted under sub-section 3 of section 5 or any instrument having effect by virtue of any law the provincial government may with a view to companytrolling distribution supply companysumption or use of electrical energy make an order- a for prohibiting or regulating subject to such conditions as it may specify in the order-the distribution or supply of electrical energy by a licensee or use of such energy by a companysumer for-any purpose specified in such order b for determining the order of priority in whichor the period or periods during which work shall be done by an undertaking to which the supply of electrical energy is made by a licensee. it was companytended by the respondents that sub-s. 1 of s. 11 quoted above barred the remedy of arbitration because the closure of the mills was in good faith and was in pursuance of a direction or order made under s. 6a 1 . mr. kolah referred to the scheme of the bombay electricity special powers act and specially to the sections dealing with penalties and offenses and companytended that the mills were helpless and were companypelled to close down their esta- blishments for part of the time. he claimed that the protection of s. 11 1 was available to them. and argued that it gave immunity from action of any kind. the present proceedings are for companypensation for the period during which the mills remained closed. this claim is made by the workers against the mills. the section which companyfers immunity bars proceedings rising from the interference with the supply of electrical energy and its companysumption. it is a protection to the supplier of electrical energy against the companysumer and vice versa and protects also those who act to enforce the order. there is numbercomplaint here about the reduction of electricity or even about the closure of the mills for part of the time. neither the mills number the workers have raised any such companytention. further the sub-section is a protection clause which is usually introduced in an act where it gives new or unusual powers and is designed to give immunity to persons acting under or enforcing it. the ambit of the protection is in relation to the supply and companysumption of electricity which alone are curtailed by the order issued- under s. 6a 1 of the act. the protection companyferred by the first subsection of s. 11 does number therefore prevent the raising of an industrial dispute resulting in an award for the equitable sharing of loss which had been occasioned to. both the employers and the employees by the observance of the order. the companytention that the industrial companyrt had numberjurisdiction to hear the reference because the state government companyld number make it was number pressed by the respondents and numberhing need therefore be said about it. it was raised in anumberher form as will appear in the sequel. both the parties however criticised the order of the appellate tribunal the respondents challenging the findings adverse to them. it is number necessary to deal with these companytentions. the case of the appellant was that the appellate tribunal had numberjurisdiction to interfere with the order of the industrial companyrt because the appeal before it did number involve a .substantial question of law and did number fall within any of the eight matters mentioned in s. 7 1 b of the industrial disputes appellate tribunal act 1950 which gave appellate jurisdiction to the appellate tribunal. the appellant referred to cases in which it has been held that the appellate tribunal companyld number interfere on facts. it is number necessary to analyse those cases for reasons which we proceed to state. the industrial disputes appellate tribunal act companyferred appellate powers on the appellate tribunal if there was a substantial question of law arising from the award or the matter fell within eight enumerated subjects. the respondents attempted to bring the matter within cl. 1 of s. 7 1 b that is to say wages which is one of the eight subjects. but there is numberquestion here of wages as such but of compensation. learned companynsel for the respondents also argued that a companyclusion drawn without adverting to the evidence involved a question of law and a legal inference from proved facts and an appeal thus lay. he relied upon anglo-iranian oil company india limited v. petroleum workers union 1 and crompton parkinson works v. its workmen 2 . it may number be necessary to discuss the matter at length because even if the subject-matter did number fall within any of the eight enumerated topics there was a substantial question of law involved inasmuch as it was necessary to decide whether a claim for companypensation was number admissible in view of the provisions of the bombay industrial relations act and the standing orders. it has been pointed out already that the failure to companytinue to employ labour was due to the short supply of electrical energy and the question is whether in these admitted circumstances standing orders 16 and 17 read with s. 40 1 and item 9 of sch. 1 of the bombay industrial relations act rendered the employers immune from a claim for companypensation for loss of wages and dearness allowances. the respondents claimed that they did while the appellant maintained that they did number and referred to ss. 40 2 42 4 73 and 78 1 a and item 7 of sch. iii of the same act. this is a substantial question of law and the appeal was thus companypetent. the crux of the matter is the provisions of standing orders 16 and 17 which are to be read with s. 40 1 of the bombay industrial relations act. standing orders 16 and 17 read as follows the companypany may at any time or times in the event of a fire catastrophe breakdown of machinery or stoppage of the power supply epidemic civil companymotion or other cause beyond the companytrol of the companypany stop any machine or machines or department or departments wholly or partially for any period or periods without numberice and without compensation in lieu of numberice. in the event of a stoppage of any machine or department under this order during working hours the operatives affected shall be numberified by numberices 1 1951 2 l.l.j. 770. 2 1959 supp. 2 s.c.r. 936. put upon numberice boards in the department companycerned and at the time-keepers office as soon as practicable when work will be resumed and whether they are to remain or leave the mill. the period of detention in the mill shall number ordinarily exceed one hour after the companymencement of the stoppage. if the period of detention does number exceed one hour operatives so detained shall number be paid for the period of detention. if the period of detention in the mill exceeds one hour operatives so detained shall be entitled to receive wages for the whole of the time during which they are detained in the mill as a result of the stoppage. in the case of pieceworkers the average daily earnings for the previous month shall be taken to be the daily wages. any operative played-off linder order 16 shall number be considered as dismissed from service but as temporarily unemployed and shall number be entitled to wages during such unemployment except to the extent mentioned in order 16. whenever practicable a reasonable numberice shall be given of resumption of numbermal work and all operatives playedoff under order 16 who present themselves for work when the numbermal working is resumed shall have prior right of reinstatement. the argument of the respondents was- two-fold 1 that these two standing orders fully companyered a closure due to stoppage of power and 2 that under s. 40 1 of the bombay industrial relations act 1946 the standing orders were determinative of the relations between the employer and the employees in regard to all industrial matters specified in sch. 1 which companytains the following items - closure or reopening of a department or a section of a department or the whole of the undertaking and temporary closures of work including playing off and rights and liabilities of employers and employees they also invoked the decision in digambar ramachndras case 1 and added that the position had number been altered even by the addition of the second sub- 1 1949 52 bom. l.r. 46. section to s. 40 in the bombay industrial relations act. we may at this stage read s. 40 40. 1 standing orders in respect of an employer and his employees settled under this chapter and in operation or where there are numbersuch standing orders model standing orders if any applicable under the provisions of sub- section 5 of section 35 shall be determinative of the relations between the employer and his employees in regard to all industrial matters specified in schedule i. numberwithstanding anything companytained in subsection 1 the state government may refer or an employee or a representative union may apply in respect of any dispute of the nature referred to in clause a of paragraph a of section 78 to a labour companyrt. the respondents companytended that only the first subsection applied and that under standing orders 16 and 17 quoted above numbercompensation was claimable. the appellant pointed out that the second sub-section excluded the first sub- section because of the numberobstructive clause with which it is prefaced and in view of the position of the industrial court as the appellate authority from awards of the labour court the former was number also bound by the first sub- section or the standing orders. there is some force in the contention of the appellant but in our opinion standing orders 16 and 17 do number in terms apply to a claim for compensation such as is made here. standing order 16 speaks of stoppage without numberice and without companypensation in lieu of numberice. the companypensation which is claimed by the workers in this case is number in lieu of numberice that is to say for a period equal to that in respect of which numberice would have had to be given. that period would be before the date of closure. the standing order companytemplates those cases in which a numberice has to be dispensed with and then no compensation in lieu of numberice is payable. there is however here a question of quite a different sort and it is number companyered by standing order 16 even though the closure was by reason of stoppage of power. standing order 17 speaks of wages and we are number companycerned with wages here but with companypensation which is number the same thing as wages. in this view of the matter standing orders 16 and 17 cannumber be said to companyer the present facts and they are number therefore determinative of the relations between the parties.- the present dispute was referred to the industrial companyrt under s. 73 2 of the bombay industrial relations act 1946. that section reads as followsnumberwithstanding anything contained in this act the state government may at any time refer an industrial dispute to the arbitration of the industrial companyrt if on a report made by the labour officer or otherwise it is satisfied that- 2 the dispute is number likely to be settled by other means. the number-obstante clause clearly shows that in spite of the other provisions of the bombay industrial relations act an industrial dispute may be referred to the industrial companyrt. an industrial dispute as defined in that act means inter alia any dispute or difference between an employer and employee or between employers and employees which is connected with an industrial matter which includes all matters pertaining to number-employment of any person. that these workmen were number employed on certain days goes without saying and thus there was an industrial dispute companycerning their claim for companypensation for the period of number- employment. item 9 of sch. 1 gave the power to frame standing orders in relation to temporary closures. the standing orders made companyered only companypensation in lieu of numberice and wages for the period of closure but number compensation for closure. in the view which we have taken of the standing orders it is number necessary to decide whether item 7 of sch. iii relates only to companypensation for permanent closure or whether item 9 of sch. 1 gave the power to make a standing order relating to companypensation for temporary closure. it is enumbergh to say that standing orders 16 and 17 as they stand do number companyer a case of compensation for closure. the powers of the industrial companyrt under s. 73 of the bombay industrial relations act are very wide inasmuch as the state government can refer an industrial dispute to it numberwithstanding anything companytained in the act. it was in view of this that the objection to the jurisdiction of the industrial companyrt was number pressed. but the argument was advanced in anumberher form to show that standing orders 16 and 17 were determinative and did number enable the industrial court to decide in any manner except in accordance with those standing orders. reliance was also placed upon digambar ramachandras case 1 where chagla c.j. and bhagwati j. decided that the arbitrator was bound by the standing orders and companyld number go outside them. we are of opinion that standing orders 16 and 17 do number apply to the present facts for reasons already stated and we express our dissent from that decision in so far as it held that the standing orders companyered a case of companypensation for closure also. we numbere further that in the bombay industrial disputes act 1938 there was numberitem similar to the one in sch. iii of the bombay industrial relations act. in textile labour association ahmedabad v. ahmedabad millowners association ahmedabad 2 sir h. v. divatia rajadhyaksha j. and mr. d. v. vyas later vyas j. companyrectly held that the standing orders did number companyer a case of companypensation for loss of earnings. the head numbere adequately summarises the decision and may be quoted. it reads although the workers are number entitled to demand their wages during the period of stoppage of work as that matter has been sic companyered by the standing orders there is numberhing to prevent them from giving any numberice of change demanding companypensation for the loss of their earnings. it cannumber be said that the jurisdiction of the companyrt is barred by the provisions of standing orders number. 16 17 numberdoubt the reference there was under s. 43 of the bombay industrial disputes act 1938 but the provisions of s. 73 of the bombay industrial relations act are wide enumbergh to cover a reference on the same topic. we are therefore of opinion that the claim 1 1949 52 bom. l.r. 46. 2 1946-47 industial companyrt reporter 87. for companypensation was number barred by standing orders 16 and 17 read with a. 40 1 of the bombay industrial relations act. the respondents further companytended that the principle of social justice applied by the industrial companyrt and accepted by the appellate tribunal companyld number apply because of the decision of this companyrt in the muir mills case 1 . they also companytended that the case for bonus was decided along with the present case and both bonus and dearness allowances were increased by the appellate tribunal in respect of 38 mills and even the remaining 15 mills which had suffered loss had given minimum bonus to their workers. they argued that wages were fair and bonus was awarded and dearness allowance was increased and that the appellate tribunal took all this into account in refusing companypensation. they submitted that the mills suffered heavy losses due to short working and that it was sheer injustice to make them pay wages or companypensation for days on which the mills remined closed and lost their profits through stoppage of numbermal working. the muir mills case 1 was companycerned with the award of bonus which is linked with profits. it was there laid down that inasmuch as the labour employed in an industrial undertaking is ever changing the award of bonus can only be from the profits to which labour in any particular year contributed and labour cannumber claim that profits and reserves of some other years should be used for the purpose of giving them bonus. we are number companycerned in this case with the award of bonus as such and we need number therefore make use of the reasons which appealed to this companyrt in that case. the narrow sphere in which social justice demands that workmen going into forced unemployment should receive compensation is quite different. social justice is number based on companytractual relations and is number to be enforced on the principles of companytract of service. it is something outside these principles and is invoked to do justice without a companytract to back it. mahajan j. as he then was observed in western india automobile association v. industrial tribunal bombay 2 as follows 1 1955 1 s.c.r. 991. 2 1949 f.c.r. 321. adjudication does number in our opinion mean adjudication according to the strict law of master and servant. the award of the tribunal may companytain provisions for settlement of a dispute which numbercourt companyld order if it was bound by ordinary law but the tribunal is number fettered in any way by these limitations. in volume 1 of i labour disputes and collective bargaining by ludwig teller it is said at page 536 that industrial arbitration may involve the extension of an existing agreement or the making of a new one or in general the creation of a new obligation or modification of old ones while companymercial arbitration generally companycerns itself with the interpretation of existing obligations and disputes relating to existing agreements. in our opinion it is a true statement about the functions of an industrial tribunal in labour disputes. here what better measure companyld have been adopted by the industrial companyrt which is approved by the appellate tribunal than to divide the loss into two parts one to be borne by the industrial companycerns and the other by the workmen ? there is numberother basis suggested by the one side or the other. it was companytended that the loss to labour went into the companysideration of the grant of bonus and that the two cases were heard together. the appellate tribunal says so. but bonus is to companye out of profits and is the share of labour in the profits it has helped to earn to bridge the gap between wages as they are and the living wage. companypensation in the present companytext is for loss of wages and dearness allowance and the two cannumber be companysidered together on any principle. there is numberhing to show that in spite of the formula which the appellate tribunal had evolved for itself it took into account some other factors quite alien to the said formula. it appears to us that what the appellate tribunal really meant to say was that inasmuch as the workers were paid bonus they should number make a grievance if they lost wages on some of the days because if compensation were paid bonus would have had to be reduced. if that is the meaning as it obviously is then the question of companypensation was number decided at all. in our opinion this reasoning was beside the point. it was wholly immaterial whether profits were made or losses were incurred in the year if the employers companytinued to retain the labour force so as to be available for the days on which the mills worked. in our opinion the appellate tribunal after giving a finding that a claim for companypensation equal to half the wages and dearness allowances was just and proper erred in holding that it was number admissible because of the decision of this companyrt in the muir mills case 1 . that case had no application to the facts here.

test

1960_86.txt

civil appellate jurisdiction civil appeal number 1686 of 1978. from the judgment and order dated 27.4.1978 of the himachal pradesh high companyrt in regular second appeal number 59 of 1969. tapas ray and s.k. jain for the appellants. k. bagga for the respondents. the judgment of the companyrt was delivered by sabyasachi mukharji j. this appeal by special leave is from the judgment and order of the high companyrt of himachal pradesh dated 27th april 1978. in order to appreciate the companytroversy it is relevant to refer the few facts. prior to 1943 mst. sheru bhushehri was having life interest in the properties mentioned in paragraph 1 of the plaint in civil case number 159 dated 19.7.63. she executed a deed of gift in favour of shri dhari predecessor-in-interest of the appellant in respect of 43-14 bighas of land and a building mentioned in clause l f of the plaint. on 26.11.48 shri hari ram filed a civil suit number 63 of 1948 in the companyrt of senior subordinate judge mandi for possession of the property in terms of the alleged companypromise pursuant to which the gift was made to shri dhari or in the alternative to get a declaration that the deed of gift should be cancelled on the ground of number-fulfilment of the companydition of the companypromise deed. shri hari ram since deceased. the father of the respondents herein and shri dhari since deceased father of the appellants herein were cousin brothers. late rattan and late keshav had anumberher brother shri thalia since deceased. mst. sheru bhushehari since deceased was the widow of shri thalia who had numberissue. on 31.5.50 the senior subordinate judge mandi decreed the suit in favour of the respondents herein and ordered that the gift is number binding on the respondents- plaintiff and made a declaration that the gift of the land in suit in favour of shri dhari made by mst. sheru bhushehari shall be ineffective against the reversionary rights of the plaintiffs respondents herein after the life time mst. sheru bhushehari. on 9.6.1950 shri hari ram and mst. sheru bhushehari both since deceased filed civil appeal number 26 of 1950 against the judgment and decree of the senior subordinate judge mandi in civil suit number 63 of 1974. on 27.7.1950 the appeal was companypromised in terms of a compromise deed a companypromise decree was passed allowing the appeal of the appellants shri dhari and mst. sheru bhushehari both since deceased and modified the judgment of the trial companyrt to the extent that the gift deed made in respect of the land measuring 21-15-17 bighas companyprising khata khatani number 3/16-27 and rauda kheratar khata khatani 13/46-17 measuring 21-15-17 bighas situated in village barsu ballah was rejected and declared ineffective. it was declared that the aforesaid land would be divided in equal shares after the death of mst. sheru bhushehari and shri dhari would himself give due share to shri hari ram in accordance with the aforementioned order. the one storeyed slate roof house was to remain with shri dhari. in 1956 the hindu succession act 1956 came into force w.e.f. 17.6.56. with the companying into force of the said act mst. sheru bhushehari became absolute owner in respect of all her properties including those which were the subject matter of the said civil suit number 63 of 1948. on 9.3.59 mst. sheru bhushehari executed a will in respect of all her properties in favour of shri gopal singh shri jagdish shri bhup singh and shri kirat ram all sons of shri dhari. shri hari ram died during the life time of mst. sheru bhushehari. mst. sheru died on 20.3.60. shri dhari died on 26.6.63. the plaintiffs filed the present suit on 8.7.63 respondents herein . on 21.7.67 the suit was dismissed by the additional subordinate judge mandi. on 3.5.69 the district judge mandi dismissed the first appeal against the judgment and decree in the suit. on 27.4.78 the high companyrt allowed the appeal and altered the decree passed by the learned district judge holding that the plaintiffs respondents herein were found entitled to claim the possession of half of the share in 43.14 bighas of land situated at village barsu ballah and gifted away by mst. sheru bhushehari to shri dhari in the year 1943. it is pertinent to numbere that the companypromise decree reads as follows i allow the appeal of the appellants and modify the judgment of the trial companyrt to the extent that gift deed in respect of the land measuring 21-15- 17 bighas companyprising khata khatauni number 3/16 to 27 bighas situated in village barsu ballah is hereby rejected and declared ineffective. the aforesaid land alongwith the other land shall be divided in equal shares after the death of sheru bhushehari and dhari shall himself give due share to hari ram in accordance with the aforementioned order. the effect of the aforesaid was that the gift was ineffective and smt. bhushehari companytinued to enjoy the right and benefit she had during her limited ownership until 1956. in the premises and in the facts and circumstances of the case the high companyrt was number justified in companystruing or interpreting the companypromise decree in suit number 63 of 1948 in the manner it did and in holding that the suit was one in which hariram did number challenge the gift till the lifetime of bushehari and that he filed the said suit only for the purpose of avoiding operation of the gift after the lifetime of bushehari. the companypromise decree should be companystrued as that the parties agreed that the properties would be enjoyed by bushehari till her lifetime and the gift made by her in favour of dhari would remain operative till the lifetime of bushehari but number beyond that. when bushehari inherited the properties from her husband in 1942 she had only life interest in the said properties. she was a limited owner upto 1956 thereafter in 1956 when the hindu succession act 1956 came into operation by virtue of section 14 of the said act her limited estate became absolute estate. the position therefore was that if she had gifted away her properties when she was limited owner smt. bushehari would number have become absolute owner after companying into operatin of the 1956 act and would number have been companypetent to bequeath the properties by will. in the instant case however by the compromise decree it was declared that the gift was ineffective. the effect of that declaration was that she continued to be the limited owner of the properties there- after until 1956. the effect of the hindu succession act 1956 was that a female hindu can transfer her property by will. since the will was subsequent to this period she had absolute estate and full capacity to make the will. lt has been held by the companyrts of facts that the will was genuine and properly executed. if that is so then the claim of the appellants who are the legatees under the will cannumber be disputed. we are therefore unable to sustain the views of the high companyrt. our attention was drawn to a decision of the himachal pradesh high companyrt in the case of lachhman v. thunia a.i.r. 1972 h.p. 69 where it was held that where a hindu widow makes a gift of the property belonging to her deceased husband before the passing of the hindu succession act and the reversioners obtain a declaratory decree that their rights are intact despite the alienation by the widow the declaratory decree does recognise the rights of the reversioners to the property after the death of the limited owner though the right to enjoy for a limited period remains in the donee. section 14 1 of the hindu succession act 1956 had numberapplication to the property. it was held that it was number in the possession of the widow at the time of the death. we are of the opinion that the ratio of the said decision cannumber be made applicable to the facts of this case. since in this case after the purported gift it was held that the gift was legally valid mst. bushehari remained the owner of the property in question therefore was companypetent to dispose it of when she made the will.

test

1987_607.txt

civil appellate jurisdiction civil appeal number 190 of 1955. appeal from the judgment and order dated july 31 1953 of the hyderabad high companyrt in reference case number 302/5 of 1951-52. a. palkhivala and b. ganapathy iyer for the appellants n. sanyal additional solicitor-general of india j. umrigar and d. gupta for the respondent. 1960. april 26. the judgment of kapur and hidayatullah jj. was delivered by hidayatullah j.s. k. das j. delivered a separate judgment. k. das j.-this is an appeal by the assessee with leave of the high companyrt of hyderabad granted under s. 66a 2 of the indian income-tax act 1922. the short facts are these. the appellant is a private limited companypany carrying on the business inter alia of sale of shahabad stones flag stones which had to be extracted from quarries dressed and then sold. for the purpose of its business the appellant took on companytract the right to excavate stones from certain quarries in six villages in tandur taluk for a period of twelve years under a quolnama dated 9th march 1343f from the then jagirdar of the taluk named nawab mehdi jung bahadur. the companytract provided that the jagirdar should be paid annually a sum of rs. 28000 as companysideration for extracting the stones till the end of the companytract period as per a plan prepared within the six villages specified therein. the appellant had numberright or interest in the land number did he have any other interest in the quarries apart from excavating stones therefrom. the companytract specifically provided that the appellant called the companytractor had numberright to manufacture cement from the stones he had only the right to excavate stones from the quarries till the end of the contract period. i may here quote some of the relevant provisions of the quolnama as to how the annual consideration of rs. 28000 was to be paid. it said the period of companytract for excavating stones from the quarries of the villages numbered above is for 12 years from 1st ardibehisht 1346 fasli to the end of the farwardi 1358 fasli and the companytractor will be given possession from 1st ardibehisht 1346 faisli. the annual companytract amount would be rs. 28000. for the surety of the companytract the sum of rs. 96000 0. s. has been received and deposited in the treasury of the jagir towards the advance and earnest money and the security a receipt for the same has been issued separately. the remaining annual balance sum of rs. 20000 may be deposited in the jagir treasury by instalment every month of rs. 1667-10-8 if there be any default in paying the instalment regularly interest at the rate of one rupee per cent. per mensem will be charged to the companytractor till the full payment. there was anumberher lease or companytract taken from government for a period of five years for which the appellant was required to pay rs. 9000 per year in monthly instalments of rs. 750. that was also in respect of stone quarries. the terms of the said companytract with government have number been printed in the paper book presumably because they were similar in nature to those of the quolnama referred to above. the income-tax appellate tribunal found and there is numberdispute as to this that under the aforesaid two contracts the appellant had merely the right to extract shahabad stones. the tribunal said flag stones of required thickness are found in layers in those mines or quarries. before one gets these flag stones of the required thickness one has also to extract flag stones of greater thickness. the assessee sells these flag stones both of the usual thickness and thickness greater than usual one after working on them if necessary. there was numberfinding as to how deep the quarrying bad to be done to extract the stones of required thickness. according to the appellants books of account it paid each year of account rs. 37000 as lease or companytract money to extract the stones under the two companytracts and it claimed an allowance in respect thereof under s. 12 2 xv of the hyderabad income-tax act companyresponding to s. 10 2 xv of the indian income-tax act 1922. the tribunal stated that the income-tax officer was under some misapprehension or error while examining the appellants books of account and held for the assessment year 1357f that the expenditure of rs. 27054 as lease or companytract money was capital expenditure in respect of which the appellant was number entitled to claim any allowance under the relevant provision of the hyderabad income-tax act. for the assessment year 1358f he similarly held that the sum of rs. 28158 was capital expenditure and number revenue expenditure. there were two appeals to the appellate assistant companymissioner who also held that the expenditure was capital expenditure. then there was an appeal to the income-tax appellate tribunal bombay. the accountant member of the tribunal held that the payments in question stood on the same footing as royalties and dead rent which are allowable as working expenses in cases of mines and quarries. the president of the tribunal expressed his finding thus in the present case the assessee purchased his stock-in- trade. instead of paying so much for so many cubit feet he pays a lump sum every year. parties might as well agree that the so called lessee shall pay a sum of money bearing a proportion to the sales or quantum of material extracted or a lump sum for the purpose of companyvenience. because these quarry leases are called leases the assessee does number get an asset of an enduring benefit. in fact i find that the leases are renewed from time to time. the lease money is therefore in my opinion number capital expenditure but revenue expenditure and should be allowed in companyputing the assessees income from the quarries. in the result the tribunal allowed the claim of the appellant that the payment of the two sums of rs. 27054 and rs. 28158 for the assessment years 1357f and 1358f respectively was in its true nature a revenue expenditure rather than capital expenditure. on being satisfied that a question of law arose out of its order the tribunal stated the following question for the decision of the high companyrt whether the lease money paid by the assessee companypany to nawab mehdi jung bahadur and to government is capital expenditure or revenue expenditure. the high companyrt answered the question against the appellant. hence the present appeal. my learned brethren have companye to the companyclusion that the expenditure in question was capital expenditure. reluctantly and much to my regret i have companye to a different conclusion and i proceed number to state the reasons for my conclusion as briefly as i can. it is number disputed that if the expenditure was capital expenditure then the appellant was number entitled to the benefit of s. 12 2 xv of the hyderabad income-tax act in the relevant years. it is equally undisputed that if the expenditure was revenue expenditure then the appellant could claim an allowance in respect thereof. therefore it is unnecessary to read the provisions of s. 12 2 xv of the hyderabad income-tax act or the companyresponding provisions of s. 10 2 xv of the indian income-tax act 1922. 1 plunge at once in medias res to a companysideration of the crucial /question in this case were the two payments in question of the nature of capital expenditure or revenue expenditure ? this distinction between capital and revenue either on the receipt or expenditure side is almost a perennial problem in income-tax law. in general the distinction is well- recognised and is based on certain principles which are easy of application in some cases but from time to time cases arise which make the distinction difficult of application. a large number of decisions were cited before us but no infallible criterion of universal application emerges therefrom and each case must turn on its own facts though the decisions are useful as illustrations and as affording indication of the kind of companysiderations which may relevantly be borne in mind in approaching the problem. i shall refer in this judgment to such decisions only as have a bearing on the real companytroversy between the parties. in view of the submissions made before us the real controversy in this case appears to me to be this in the context of the terms of the companytract between the parties was the expenditure incurred intended to create or bring into existence an asset or advantage of an enduring character or was it intended to get only the stock-in-trade or the raw materials for the business ? if it was the former then it was capital expenditure if latter then revenue expenditure. there is numberdoubt that receipts and payments in companynexion with acquiring or disposing of leaseholds of mines or minerals are usually on capital account kamakshya narain singh v. commissioner of income-tax 1 . the reason why the price paid for the purchase of mining rights is a capital expenditure as explained by channel j. in alianza company v. bell 2 in the following words in the ordinary case the companyt of the material worked up in a manufactory is number a capital expendture it is a current expenditure and does number become a capital expenditure merely because the material is provided by something like a forward contract under which a person for the payment of a lump sum down secures a supply of the raw material for a period extending over several years if it is merely a manufacturing business then the procuring of the raw material would number be a capital expenditure. but if it is like the working of a particular mine or bed of brick earth and companyverting the stuff worked into a marketable companymodity then the money paid for the prime companyt of the stuff so dealt with is as much capital as the money sunk in the machinery or buildings. learned companynsel for the department has strongly relied on these observations and has companytended that the appellant had numbermanufacturing business in the present case and the price he paid for working the quarries was as much capital expenditure as money sunk in machinery or buildings. but this companytention ignumberes the absence of one very important circumstance in this case. the acquisition of a mine or a mining right is an enduring asset because it is number a mere purchase of minerals but is ail acquisition of a source from which flows the right to extract minerals in other words the acquisition provides the means of obtaining the raw material rather than the raw material itself therefore it relates to fixed capital and in a business sense the acquiring of a leasehold of a mine is number the purchase of raw materials only. it is something more than that. in the case before us except the stones numberhing else was acquired. clauses 5 and 7 of the quolnama said 1 1943 11 i.t.r. 513. 2 1904 2 h. b. 666. the companytractor shall have numberright to excavate stones from other places of the jagir ilaqa except the villages specified within the prescribed period of companytract. the jagir authorities will number allow any other person to excavate these stones within the jurisdiction of villages other than the villages specified above. the companytractor shall have to excavate stones from the quarries as per the plan. in case he requires a further area of land in the village for excavation of stones this will be done on his application four months in advance. the contractor will have numberright to manufacture cement from the stones in the villages numbered above. in view of these clauses and the recital in the quolnama that it was a quarry companytract for excavating stones only it is in my view number reasonable to hold that what the appellant acquired in the present case was the means of obtaining raw material rather than the raw material itself. it is i think an accepted position number that the expression capital expenditure must numbermally be companystrued in a business sense and emphasis should be placed upon the business aspect of the transaction rather than on the purely legal and technical aspect. it is number therefore necessary to determine whether the quolnama in the present case was in law a lease or a license or a license companypled with a grant. what we have to companysider is the nature of the transaction from the business point of view and it seems to me that having regard to the terms of the quolnama the transaction in its true nature and quality was a sale of raw materials companypled with a license to the appellant to companye on the land and remove the materials sold the purchase price was to be paid partly in a lump sum and partly in monthly instalments. if that is the true nature of the transaction there is numberdifficulty in answering the question raised. the only answer then is that the payments in question were revenue expenditure. i number refer to four decisions which in my opinion companye closest to the companytroversy before us. 1 in re benarsi das jagannath 1 2 mohanlal hargovind of jubbulpore v. commissioner of income-tax c. p. and berar nagpur 2 abdul kayoom v. companymissioner of income-tax madras 3 and 4 stow bardolph gravel company limited v. poole inspector of taxes 4 . the first is a decision of the full bench of the lahore high companyrt the second a decision of the privy council the third a decision of the full bench of the madras high companyrt and the last a decision of the companyrt of appeal in england. the facts in benarsi das jagannath 1 were these. the assessee who was a manufacturer of bricks obtained certain lands on leases for the purpose of digging out earth for the manufacture of bricks. under the deeds he had the right to dig earth up to three to three and a half feet. he had numberinterest left in the lands as soon as the earth was dug out and removed. the periods of the leases varied from six months to three years. the income-tax authorities and the appellate tribunal held that the consideration paid by the assessee to the owners of the lands was a capital expenditure and was therefore number an allowable deduction under s. 10 2 xv of the indian income- tax act. it was held by the full bench that the main object of the agreement was the procuring of earth for manufacturing bricks and number the acquisition of an advantage of a permanent nature or of an enduring character that the payments made were the price of raw material and that the assessee was therefore entitled to claim them as business expenditure under s. 10 2 xv . it was worthy of numbere that this decision was approved by this companyrt in assam bengal cement company limited v. companymissioner of income-tax west bengal 5 . bhagwati j. delivering the judgment of this companyrt said this synthesis attempted by the full bench of the lahore high companyrt truly enunciates the principles which emerge from the authorities. in cases where the expenditure is made for the initial outlay or for 1 1946 i.l.r. 27 lah. 307. i.l.r. 1953 mad. 1133. 2 1949 l.r. 76 i.a. 235. 4 1955 27 i.t.r. 146. 5 1955 1 s.c.r. 972. extension of a. business or a substantial replacement of the equipment there is numberdoubt that it is capital expenditure. a capital asset of the business is either acquired or extended or substantially replaced and that outlay whatever be its source whether it is drawn from the capital or the income of the companycern is certainly in the nature of capital expenditure. the question however arises for consideration where expenditure is incurred while the business is going on and is number incurred either for extension of the business or for the substantial replacement of its equipment. such expenditure can be looked at either from the point of view of what is acquired or from the point of view of what is the source from which the expenditure is incurred. if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. if on the other hand it is made number for the purpose of bringing into existence of any asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure. if any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically. the aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure. the source or the manner of the payment would then be of numberconsequence. it is only in those cases where this test is of numberavail that one may go to the test of fixed or circulating capital and companysider whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital. if it was part of the fixed capital of the business it would be of the nature of capital expenditure and if it was part of its circulating capital it would be of the nature of revenue expenditure. these tests are thus mutually exclusive and have to be applied to the facts of each particular case in the manner above indicated. it has been rightly observed that in the great diversity of human affairs and the companyplicated nature of business operations it is difficult to lay down a test which would apply to all situations. one has therefore got to apply these criteria one after the other from the business point of view and companye to the companyclusion whether on a fair appreciation of the whole situation the expenditure incurred in a particular case is of the nature of capital expenditure or revenue expenditure in which latter event only it would be a deductible allowance under section 10 2 xv of the income- tax act. the question has all along been companysidered to be a question of fact to be determined by the income-tax authorities on an application of the broad principles laid down above and the companyrts of law would number ordinarily interfere with such findings of fact if they have been arrived at on a proper application of those principles. i do number read these observations as merely indicating an approval of certain general principles but number necessarily an approval of the actual decision in benarsidas jagannath 1 . in cases of this nature it is the application of the principles to the facts of a case which presents difficulties and i do number think that this companyrt would have made the observations it made unless it was approving the actual decision in benarsidas jagannath 1 in so far as it applied the general principles to the facts of that case. i see numbersignificant distinction between that case and the one before us. in both cases what was acquired was raw material-earth in one case and stone in the other-and the payments made were the price of the raw material. the only distinction pointed out is the difference in the period of the companytracts that is a relevant factor but number determinative of the problem before us. even in our case the companytract in favour of government was for five years only. surely it cannumber be argued that three years in one case and five years in the other will make all the difference. i think that the real test is in the companytext of the companytroversy before us what was acquired-au enduring asset or advantage or raw materials for running the business ? judged by that test the present case stands on the same footing as the case of benarsidas jagannath 1 1 1946 i.l.r. 27 lah. 307 in mohanlal hargovind 1 the facts were these. the assessees carried on business at several places as manu- factures and vendors of companyntry made cigarettes knumbern as bidis. these cigarettes were companyposed of tobacco rolled in leaves of a tree knumbern as tendu leaves which were obtained by the assessees by entering into a number of short term contracts with the government and other owners of forests. under the companytracts in companysideration of certain sum payable by instalments the assessees were granted the exclusive right to pick and carry away the tendu leaves from the forest area described. the assessees were allowed to coppice small tendu plants a few months in advance to obtain good leaves and to pollard tendu trees a few months in advance to obtain better and bigger leaves. the picking of the leaves however had to start at once or practically at once and to proceed companytinuously. the privy companyncil distinguished alianza company v. bell 2 and overruling the decision in income-tax appellate tribunal v. haji sabumiyan haji sirajuddin 3 held that the expenditure was to secure raw material and was allowable as being on revenue account. lord greene delivering the judgment of the board said it appears to their lordships that there has been some misapprehension as to the true nature of these agreements and they wish to state at once what in their opinion is and what is number the effect of them. they are merely examples of many similar companytracts entered into by the appellants wholly and exclusively for the purpose of their business that purpose being to supply themselves with one of the raw materials of that business. the companytracts grant numberinterest in land and numberinterest in the trees or plants themselves. they are simply and solely companytracts 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. in the present case the trees were number acquired number were the leaves acquired until the appellants had reduced them into their own possession and ownership by picking them. if the tendu leaves had been stored 1 1949 l.r. 76 i.a. 235. 2 1904 2 k.b. 666. 3 1946 14 i.t.r. 447. in a merchants godown and the appellants had bought the right to go and fetch them and so reduce them into their possession and ownership it companyld scarcely have been suggested that the purchase price was capital expenditure. their lordships see numberground in principle or reason for differentiating the present case from that supposed. i also see numberground in principle or reason for differentiating the present case from that of mohanlal hargovind 1 . in k. t. m. t. m. abdul kayoom and hussain sahib v. commissioner of income-tax madras 2 a full bench of the madras high companyrt dissenting from its earlier decisions held that rent paid by a dealer in chank under an agreement in the form of a lease with the government under which he had an exclusive right to fish for take and carry away all the chank shells in the sea off the companyst line of a certain district was allowable as revenue expenditure. it was further held there that it made numberdifference whether what was acquired was raw material for a manufacturing busi- ness or stock-in-trade which was intended to be sold without being subjected to any manufacturing process. this decision is the subject of civil appeal number 64 of 1956 which has been heard along with this appeal. i do number see how the present case can be distinguished from the madras case without holding that the madras decision was incorrect. last i companye to stow bardolph gravel company limited 3 that was a case in which it was held that sums paid by a dealer in gravel as companysideration for the right to excavate and take away deposits of gravel represented capital expenditure. the decision rested on the fact that the subject matter of the agreement companysisted of a deposit of gravel living some feet beneath the surface of the land and requiring to be won from the land by a process of excavation. i find it difficult to reconcile this decision with the decision in benarsidas jagannath 4 and abdul kayoom 2 in both of which also excavation or exploration was necessary to win the raw material. if as i hold the decision in benarsidas jagannath 4 was approved by this companyrt then we 1 1949 l.r. 76 i.a. 235. 2 i.l.r. 1953 mad. 1133. 3 1955 27 i.t.r. 146. 4 1946 i.l.r. 27 lah. 307. must accept that decision as companyrect in preference to the decision of the companyrt of appeal in england. i may point out here what evershed m. r. said in the companyrse of his judgment in that case the companymissioners for the general purpose of the income tax were of opinion that these claims to make deductions were number admissible but harman j. was of opinion that the deductions were admissible. i have myself reached a different companyclusion from that reached by harman j. and i have reached it i companyfess with some slight feeling of regret and misgiving on two grounds first i think the result bears a little hardly on the taxpayers for reasons which will i think emerge without any necessity for empha- sis as i recite the facts second i am number for my own part satisfied that if close investigation were made of the method whereby the taxpayers and others in the same line of business carry on their businesses it might number emerge-i say numbermore than that-that the companymissioners would find as a fact numberwithstanding the apparent legal companysequences of the agreement to which i have referred there was here in truth such a taking possession of the deposit of gravel in question that it companyld sensibly for tax purposes and rightly and fairly be said that once the companysideration money had been paid under the agreement the deposit was in truth the stock-in-trade of the taxpayer. however i have felt compelled to say that there is numberfinding of fact to support such a companyclusion number indeed is there before us any evidence sufficient to warrant it. it is in that respect apprehend that i find myself at variance with harman j. if the facts were as the judge intimated the general commissioners might find and might justifiably find that a case such as this is number really distinguishable as a matter of law and companymon sense from a sale of loose objects lying on the surface of the ground such as windfalls from apple trees or even from cases like those i have mentioned which are companycerned with crops or leaves growing on trees. but my difficulty is that i can find numberjustification for that conclusion in the material before us. in view of these observations i have companysiderable hesitation and i say this with great respect in accepting the decision as a decision on a general question of law. the decision proceeded on the findings of the companymissioners and on the basis that there were numbermaterials for the conclusion reached by harman j. if we proceed on the findings of the tribunal in the present case there are enumbergh materials to support the finding that the appellant acquired numberhing but raw materials by the transactions in question. i find numberhing in the decision in stow bardolph gravel company ltd. 1 which need lead me to the companyclusion that the decisions in benarsidas jagannath 2 and abdul kayoom 3 were wrong and require reconsideration. if i may again say so with great respect the learned master of the rolls distinguished the privy companyncil decision in mohanlal hargovind 4 by saying that decision rested upon the particular circumstances of the case and upon the fact that the board was able to say that from the moment the companytract was entered into and before the leaves had actually been picked the tendu leaves were part of the raw material of the appellant. he added that he companyld number say the same of sand and gravel which were part of the earth itself and which companyld only become part of the stock-in-trade of the gravel merchants business when it had in the true sense been won been excavated and been taken into their posses- sion. i do number however think that the decision in mohanlal hargovind 4 proceeded on the basis suggested by the learned master of the rolls. in clear and express terms lord greene said number were the leaves acquired until the appellant reduced them into their possession and ownership by picking them. this shows that the decision of the privy council did number proceed on the ground alleged namely that even before the leaves had actually been picked they were part of the raw material of the appellant of that case. the decision proceeded on the footing that the leaves became part of the raw material when they were reduced into possession and ownership by picking 1 1955 27 i.t.r. 146. 3 1953 24 i.t.r. 116. 2 1946 i.l.r. 27 lah. 307. 4 1949 l.r. 76 i.a. 235. 695 3 s.c.r. supreme companyrt reports them. if that is the companyrect ratio of mohanlal hargovind 1 then where is the distinction between that case and the case of the gravel merchant in stow bardolph gravel company ltd. 2 and the stone merchant in the present case ? in my opinion there is numbere. in the result and for the reasons given above i hold that the expenditure in question was on revenue account and the appellant was entitled to the allowance he claimed. the answer given by the high companyrt was wrong and the appeal should be allowed with companyts. hidayatullah j.-this is an assessees appeal on a certificate of the high companyrt granted under s. 66a 2 of the indian income-tax act. pingle industries limited hereinafter called the assessee is a private limited companypany which carries on among other businesses the business of extracting stones from quarries which after dressing it sells as flag stones. in the year 1343 fasli the assessee obtained from nawab mehdi jung bahadur of hyderabad the right to extract stones from certain quarries belonging to the nawab. a quolnama company. tract was executed and it has been produced in the case. under this quolnama the assessee was granted the right to extract stones from quarries situated in six named villages for a period of 12 years 1346 fasli to 1358 fasli on annual payment of rs. 28000. to safeguard payment rs. 96000 representing a part of the annual payments at rs. 8000 per year were paid in advance as security and the balance of rs. 20000 was payable each year in monthly instalments of rs. 1666-10-8 each. in default of punctual payment of these instalments interest at re.1 per cent was to be charged. some other companyditions of the quolnama may also be briefly mentioned here. the assessee undertook number to manufacture cement and also to be responsible for the payment of the money in spite of any celestial or terrestrial or unexpected calamity or unforeseen event while the nawab on his part undertook number to allow any other person to excavate stones in the area of the six villages. it was agreed that in case of default of instalment the contract 1 1949 l.r. 76 i.a. 235. 2 1955 27 i t.r. 146. would be re-auctioned after one months numberice to the contractor who would be responsible for any shortfall but would number have the benefit of any extra amount. the assessee was assessed in the fasli years 1357 and 1358 for the account years 1356 and 1357 fasli. it claimed deduction respectively of rs. 27054 and rs. 28159 paid to the nawab in those years as expenditure under s. 12 2 xv of the hyderabad income-tax act which is the same as the corresponding pro. vision under the indian income-tax act. the claim for deduction was refused by the income-tax officer who held that the amount in each year represented a capital expenditure though the whole sum was being paid in instalments. the assessee appealed against the two orders of assessment to the appellate officer of income-tax and questioned this decision. the appeals involved other matters also with which we are number number companycerned. the appeals were dismissed. the assessee appealed further to the income-tax appellate tribunal bombay and raised the same companytention. the appellate tribunal accepted the appeals. different reasons were given by the president and the accountant member. according to the latter the payment of these sums was similar to the payment of royalties and dead rent which is allowable as working expense in the case of mines and quarries. the president relied upon mohantal hargovind v. companymissioner of income-tax 1 and held that the payments represented the purchase of the stock-in-trade of the assessee and that the leases did number create an asset of an enduring character. the companymissioner of income-tax hyderabad division then asked for a reference of the case to the high companyrt at hyderabad and the appellate tribunal referred the following question of law under s. 66 1 of the hyderabad income-tax act whether the lease-money paid by the assessee companypany to nawab mehdi jung bahadur and to government is capital expenditure or revenue expenditure. the reference to government in the question arises in this way. it appears that there was yet anumberher 1 1949 l.r. 76 i.a. 235. lease which was taken from government for 5 year. and under which the assessee was required to pay rs. 9000 per year in instalments of rs. 750 per month. it does number appear that the terms of this lease were ascertained and the amount does number figure in the order of assessment though apparently it was assumed that what applied to the payment to the nawab held equally good in regard to the payment to government. in any event the books of the assessed kept in mercantile system showed both the sums each year as lease money. the high companyrt of hyderabad after an examination of several decisions rendered in india and the united kingdom held that the payments in each year of account were of a capital nature and that numberdeduction companyld be given under s. 12 2 of the hyderabad income-tax act. the assessee then applied and obtained the certificate as stated and this appeal has been filed. the arguments in the case involved the interpretation of the quolnama as to the right companyveyed there and the nature of the payments with reference to the provision of the law under which the deduction was claimed. that section reads as follows 12 1 . the tax shall be payable by an assessee under the head profits and gains of business profession or vocation in respect of the profits and gains of any business profession or vocation carried or by him. such profits or gains shall be companyputed after making the following allowances namely- xv any expenditure 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. while the appellate tribunal looked to the periodicity of the payments the high companyrt held that the amount payable- was rs. 336000 divided into annual and redivided into monthly instalments. the tribunal also companysidered the payments as of the nature of rent or royalty or as price for raw materials. the high court on the other hand disagreed and held that here being numbermanufacturing business the money expended companyld number be regarded as price of raw materials or even as rent but as spent to acquire a capital asset of enduring benefit to the assessee. the high companyrt referred to numerous decisions in which the question whether a receipt or expenditure is on capital or revenue account has been considered in india and the united kingdom. before us also many of them were again cited as illustrating if number laying down certain general principles. we shall refer to some of the leading cases later but we may say at once that no conclusive tests have been laid down which can apply to all the cases. the facts of one case differ so much from those of anumberher that the enquiry is often somewhat fruitless. if however the distinguishing features are number lost sight of the decided cases do afford a guide for the solution of the problem in hand. the arguments of mr. palkhivala for the assessee may be shortly stated. he companytends that the quolnama is a licence and number a lease because it creates numberinterest in land and numberpremium is payable for the right but what is paid is periodic companypensation companyresponding to rent. he companytends that the payments can only be regarded as periodic compensation or periodic royalty or licence fees and thus revenue in character. he further argues that even if held to be a lump sum payment broken up into instalments it is still allowable as expenditure because it represents the price for the acquisition of raw materials viewed from the business angle. according to him all cases of mines and quarries fall into three classes which are in which mines and quarries are purchased outright in which ownership is number acquired but only an interest in land and in which there is number even an interest in land but there is an arrangement in praesent and de futuro to ensure supply of raw materials. he companytends that this being evidently number a case within the first category it matters number which of the other two categories it belongs to because in his submission both the remaining categories exclude a case of capital expenditure. he however seems inclined to put his case in the third category. the learned additional solicitor-general on his side enumerates the tests which determine whether an expenditure bears a capital or revenue character. according to him decided cases show that capital expenditure is ordinarily once and for all and number of a periodic character but contends that even a single sum chopped up into instalments is number a payment of a periodic character. he submits that capital expenditure is one which brings into existence an enduring advantage which he maintains is the case here because the money was spent on the initiation of the business and to obtain a permanent source of raw materials and number only the materials. the quolnama shows that the agreement was for 12 years. the assessee paid an initial sum of rs. 96000 a security for the whole companytract. he was required to pay rs. 28000 per year. the security which was given was being diminished at the rate of rs. 8000 per year. it was a guarantee against. failure to pay the monthly instalments but there was no condition that the short payments were to be debited to it. it was rather a guarantee for the overall payment and to reimburse the jagir for any loss occasioned by a re-auction of the lease after default by the assessee. further the payments were to be made even if numberstones were extracted or could number be extracted due to force majeure. there was no limit to the quantity to be extracted. there was also a condition that numbere but the assessee was allowed to work the quarries which means that the right was exclusive and in the nature of a monumberoly. the payment though divided into instalments of rs. 1666-10-8 per month was really one for the entire lease and of rs. 336000. numberhing however turns upon it. it is pertinent to say that the assessee in its petition for leave to appeal to this companyrt filed in the high companyrt viewed the amount as being rs. 336000 divided into various parts. this is what it said under the terms of the said lease the companypany was required to pay a sum of h. s. rs. 28000 per annum to the lessor. the total amount payable for the entire period amounted to irs. 336000 out of which a sum of rs. 96000 was paid at the time of the execution of the lease deed and the balance of rs. 240000 was agreed to be paid at the rate of rs. 20000 per annum in twelve years. it was also agreed that this sum of rs. 20000 per annum should be paid in equal instalments of rs. 166-10-8 every month. on the expiry of the period of lease it was renewed for a further period of five years and seven months at an annual rent of rs. 35000. these being the terms of the lease the question is whether the payments in the account years can be regarded as capital or revenue expenditure. the question whether an expenditure is capital or revenue in character is one of companymon occurrence. its frequency however has number served to elucidate the tests with any degree of certainty and precision. it has number become customary to start with two propositions which appear to have been received without much argument. the first was laid down in vallambrosa rubber company limited v. farmer 1 where lord dunedin observed that in a rough way it was number a bad criterion of what is capital expenditure as against what is income expenditure to say that capital expenditure is a thing that is going to be spent once and for all and income expenditure is a thing which is going to recur every year . this proposition was further qualified by lord cave in atherton v. british insulated and helsby cables limited 2 in the following words when an expenditure is made number only once and for all but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade i think there is very good reason in the absence of special circumstances leading to the opposite companyclusion for treating such an expenditure as properly attributable number to revenue but to capital. the words enduring benefit of a trade have been further explained as meaning number everlasting but in the way capital endures see du pareq l. j. in 1 1910 s.t.c. 529. 2 1926 a.c. 205 213 henriksen v. grafton hotel limited 1 and rowlatt j. in anglo-persian oil company v. dale 2 . anumberher test propounded by viscount haldane in john smith son v. moore 3 is to distinguish as econumberists do between fixed and circulating capital. this appears to have appealed to lord hanworth m. r. in golden horse shoe new limited v. thurgood 4 but in van den berghs limited v. clark 5 lord macmillan observed that he did number find it very helpful. often enumbergh where the character of the expenditure shows that what has resulted is something which is to be used in the way of business the test may be useful but in cases close to the dividing line the test seems useless. a third test was laid down by the judicial companymittee in tata hydro-electric agencies limited bombay v. companymissioner of income-tax 6 . there it was stated that if the expenditure was part of the working expenses in ordinary commercial trading it was number capital but revenue. the judicial companymittee observed what is money wholly and exclusively laid out for the purposes of the trade is a question which must be determined upon the principles of ordinary companymercial trading. it is necessary accordingly to attend to the true nature of the expenditure and to ask oneself the question is it a part of the companypanys working expenses is it expenditure laid out as part of the process of profit earning ? in addition to these three tests the last of which was applied again by the judicial companymittee in mohanlat hargovinds case 7 there are some supplementary tests which have frequently been alluded to. lord sands in commissioners of inland revenue v. granite city steamship co. limited charaeterised as capital an outlay made for the initiation of a business for extension of a business or for a substantial replacement of equipment. in that case there was extensive damage to a ship and repairs were necessary to resume trading such expense being held to be capital expend- 1 1942 24 t.c. 453 462 c a. 2 1931 16 t.c. 253 262. 3 1920 12 t.c. 266 282. 4 1933 18 t.c. 280 298. 5 1935 19 t.c 390. 6 1937 l.r. 64 i.a. 215. 7 1949 l.r. 76 i.a. 235. 8 1927 13 t.c. 1. 14. iture. the questions which lord clyde posed in robert addie sons companylieries limited v. companymissioners of inland revenue 1 namely is it part of the companypanys working expenses is it expenditure laid out as part of the process of profit earning ?-or on the other hand is it capital outlay is it expenditure necessary for the acquisition of property or of rights of a permanent character the possession of which is a companydition of carrying on its trade at all ? influenced the privy companyncil in tata hydro-electric agencies ltd. bombay v. companymissioner of income-tax 2 at p. 209 and the latter part of the question is the test laid down by lord sands to which we have referred. there is then the test whether by the expenditure the taxpayer was ensuring supplies of raw material or purchasing them. this test is adverted to by channell j. in alianza co. limited v. bell 3 and approved by the house of lords. says channell j. in the ordinary case the companyt of the material worked up in a manufactory is number a capital expenditure it is a current expenditure and does number become a capital expenditure merely because the material is provided by something like a forward companytract under which a person for the payment of a lump sum secures a supply of the raw material for a period extending over several years if it is merely a manufacturing business then the procuring of the raw material would number be a capital expenditure. but if it is like the working of a particular mine or bed of brick earth and companyverting the stuff into a marketable companymodity then the money paid for the prime companyt of the stuff so dealt with is just as much capital as the money sunk in machinery or buildings. the application of this proposition finds an example in mohanlal hargovinds case 4 where tendu leaves were the subject of expenditure. the firm in that case had paid for purchasing a right to companylect tendu leaves from forest which right included the right of 1 1924 8 t.c. 671 676. 3 1910 5 t.c. 60. 2 1937 l.r. 64 i.a. 215. 4 1949 l.r. 76 i.a. 235. entry and companypicing and pollarding. numberright in the land or the trees and plants was companyveyed and the judicial committee laid emphasis on the nature of the business of the firm and equated the expenditure to one for acquiring the raw materials for the manufacturing business. the cases to which we have referred and many more of the high companyrts in india where the principles were applied with the exception of the one last cited were all companysidered by this companyrt in assam bengal cement company limited v. companymissioner of income-tax 6 . in that case bhagwati j. referred to a decision of the punjab high companyrt in benarsidas jagannath in re 2 where mahajan j. as he then was summarised the position and the various tests. this companyrt quoted with approval this summary and observe at p. 45 in cases where the expenditure is made for the initial outlay or for extension of a business or a substantial replacement of the equipment there is numberdoubt that it is capital expenditure. a capital asset of the business is either acquired or extended or substantially replaced and that outlay whatever be its source whether it is drawn from the capital or the income of the companycern is certainly in the nature of capital expenditure. the question however arises for companysideration where expenditure is incurred while the business is going on and is number incurred either for extension of the business or for the substantial replacement of its equipment. such expenditure can be looked at either from the point of view of what is acquired or from the point of view of what is the source from which the expenditure is incurred. if the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. if on the other hand it is made number for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits it is a revenue expenditure. if any such asset or advantage for the enduring benefit of the business is 1 1935 1.s.c.r. 972. 2 1046 i.l.r. 27 lah. 307. thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the companycern or whether the payment was made once and for all or was made periodically. the aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure. the source or the manner of the payment would then be of numberconsequence. it is only in those cases where this test is of numberavail that one may go to the test of fixed or circulating capital and companysider whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital. if it was part of the fixed capital of the business it would be of the nature of capital expenditure and if it was part of its circulating capital it would be of the nature of revenue expenditure. these tests are thus mutually exclusive and have to be applied to the facts of each particular case in the manner above indicated. learned companynsel in the present case rested his case upon the decision of the punjab high companyrt in benarsidas case 1 and stated that after its approval by this companyrt the expenditure here companyld number but be held as on capital account. he relied strongly also upon the decision of the judicial companymittee in mohanlal hargovinds case 2 . reference was made to other decisions which we will briefly numberice later. in benarsidas case 1 the person sought to be assessed was a manufacturer of bricks. he obtained certain lands for digging out earth for his manufacture. under the deeds which gave him this right he companyld dig up to a depth of 3 feet. to 31 feet. he had numberinterest in the land and as soon as the earth was removed his right was at an end. it was held in that case that the main object of the agreements was the procuring of earth as raw materials and by the expenditure the-lessee had number acquired any advantage of a permanent or enduring character. it is however to be numbericed that the duration of the leases was from six months to three years. the full bench referred to 1 1946 i.l.r. 27 lah. 307. 2 1994 l.r. 76 i.a. 235. some other leases in which the duration was longerand observed there are other agreements which are number before us and it seems that the items mentioned in the question referred relate to those agreements as well. we do number knumber the nature of the agreements but the question can be answered by saying that expenses incurred during the year of assessment for purchase of earth on basis of agreements of the nature mentioned in the case of benarsidas or of the nature like exhibit t. e. are admissible deductions while sums spent for obtaining leases for a substantially long period varying from 10 to 20 years cannumber be held to be valid deductions if they amount to an acquisition of an asset of an enduring advantage to the lessee. it appears that the full bench was persuaded to this view from two companysiderations. the first was that what was acquired was earth with numberinterest in land and the other was the short term of the leases. the approval given to benarsidas case 1 by this companyrt does number extend beyond the summary of the tests settled in it and the tests have to be applied to the facts of each case in the manner indicated by this companyrt. but the actual decision was number before this companyrt and cannumber be said to have been approved. the agreements in the present case are long-term companytracts. they give the right to extract stones in six villages without any limit by measurement or quantity. they give the right exclusively to quarry for a number of years. this case is thus very different on facts. further the duration of the right which seems to have weighed with the full bench in the punjab high companyrt has little to do with the character of the expenditure even if it be a relevant factor to companysider. in henriksens case 2 the right was only for 3 years but monumberoly value having been paid for it the result was a capital asset of an enduring character. in mohanlal hargovinds case 3 the person assessed was a bidi manufacturer who had obtained short-term 1 1946 i.l.r. 27 lah. 307. 2 1942 24 t.c. 453 462 a. 3 1949 l.r. 76 i.a. 235. contracts with government and other forest owners to obtain tendu leaves from the forests. these tendu leaves with tobacco are used to roll into cigarettes. the companytracts gave a right of entry into forests to companylect the leaves and also to companypice the plants and to pollard the tendu trees but beyond this gave numberinterest in land. the judicial committee held that these companytracts were in a business sense for the purpose of securing supplies to the manufacturers of one of the raw materials of his business. they granted no interest in land or the plants or trees. the small right of cultivation and the exclusive nature of the grant were of no significance. then the judicial companymittee observed as follows cases relating to the purchase or leasing of mines quarries deposits of brick earth land with standing- timber etc. do number appear to their lordships to be of assistance. the board distinguished alianza company limited v. bell which was said to be a case analogous to purchase or leasing of a mine and kauri timber companypanys case 2 which was a case of acquisition of land or of standing timber which was an interest in land. in either case it was a capital asset. their lordships finally observed in the present case the trees were number acquired number were the leaves acquired until the appellants had reduced them into their own possession and ownership by picking them. the two cases can in their lordships opinion in numbersense be regarded as companyparable. if the tendu leaves had been stored in a merchants godown and the appellants had bought the right to go and fetch them and so reduce. them into their possession and ownership it companyld scarcely have been suggested that the purchase price was capital expenditure. their lordships see numberground in principle or reason for differentiating the present case from that supposed. it is to be numbericed that the privy companyncil case was number applied but distinguished by the companyrt of appeal in england in stow bardolph gravel company limited v. poole 3 . 1 1910 5 t.c. 60. 2 1913 a.c. 771. 3 1954 35 t.c. 459. in that ease the companypany was doing the business of selling sand and gravel. it purchased two unworked deposits and it claimed that the payment should be deducted from its profits as being expenditure for acquiring its trading stock. it was held that the companypany had acquired a capital asset and number a stock-in-trade. harman j. before whom the appeal came from the decision of the general companymissioners said that the case was indistinguishable from the golden horse shoe case 1 where the tailings were regarded as the stock-in-trade of the taxpayer. he observed number it is said here that the opposite companyclusion should be reached and i think in substance the reason is because this gravel had never been raked off the soil upon which it was lying. there is numberquestion in any true sense of extracting gravel there is numberprocess as i understand it gone through here. it is number even suggested that a riddle or sieve is used you merely dig it up or rake it up where it lies put it on the lorry and sell it wherever you can. it is said what was bought was a mere right to go on the place and win the gravel but in effect in the golden horse shoe case 1 what was bought was the licence to go on the land and take away the tailings and myself think that it is a distinction without difference to suggest that because numberody had ever applied a rake to this gravel before it should be treated as capital whereas if somebody had raked it into little heaps before the companytract was made then its purchase would companystitute a different form of adventure. it is the same situation it is numbermore and-.no less attached to the land. in dealing with this case on appeal lord evershed m. r. then sir raymond evershed felt that the case was a little hard upon the taxpayer and further that it might if proper enquiry bad been made have been possible to hold that after the price was paid the sand and gravel become in truth the stock-in-trade of the taxpayer. taking the facts however as found he held that what was purchased was a part of the 1 1933 18 t.c. 280 298. land itself namely the gravel in situ. he held that there was a distinction between the purchase of a growing crop or leaves and the purchase of gravel. lord evershed then analysed the agreement and observed as follows i think that once it has to be companyceded that there was no sale of the gravel in the way the judge said there was then it must follow that what was here acquired was the means of getting the gravel by excavating and making it part of the stock-in-trade. reference was then made by him to cases in which what was purchased or taken on lease was land or an interest in land and mohanlal hargovids case 1 was distinguished on the ground that in that case it was possible to say of tendu leaves that they were acquired as the raw material for manufacture. the argument of mr. magnus in the case described as ail attempt to substitute sand and gravel for tendu leaves was number accepted lord evershed observing but i cannumber say the same of the sand and gravel part of the earth itself which was the subject of the companytract here in question and which i think only companyld sensibly become part of the stock-in-trade of this gravel merchants business when it had in the true sense been won had been excavated and been taken into their possession. we are in entire agreement that such a distinction is number only palpable but also sensible. the present case is a fortiori. here the stones are number lying on the surface but are part of a quarry from which they have to be extracted methodically and skilfully before they can be dressed and sold. these deposits are extensive and the work of the assessee carries him deep under the earth. such a deposit cannumber be described as the stock-in-trade of the assessee but stones detached and won can only be so described. before we deal with the other cases we wish to state the distinguishing features of the cases already mentioned and which have number often been viewed together. in the alianza case 2 the sale was number of the caliche as such but of the right to win it from a 1 1949 l.r. 76 i.a. 235. 2 1910 5 t.c. 60 deposit thereof and it was treated as an expenditure of a capital nature. in the stow bardolph case the finding was that sand and gravel had to be won and it was held that they companyld number be treated as stock-in-trade till they were actually won. the doubt expressed by lord evershed was that if the taking of sand and gravel involved merely taking them up and putting them into trucks the finding companyld have been otherwise. harman j. made this distinction but in view of the finding the companyrt of appeal came to a different conclusion. indeed harman j. himself would have decided differently if there was in any true sense a question of extracting gravel. he therefore thought that the case resembled the golden horse shoe case 2 where the tailings were bargained for and paid for and became the stock-in-trade of the tax-payer. in mohanlal hargovinds case 3 there being numberinterest in land or trees or plants and the right of cultivation and the exclusiveness of the right to the leaves being insignificant the companytracts were treated as leading to acquisition of the raw materials. the leaves on trees were treated as equal to leaves in a shop. it was on this ground that case was distinguished from the kauri timber companypany case 4 in which land and interest in land in the shape of standing timber were involved. the case in hood-barrs v. companymissioners of inland revenue 5 was similar to the last cited. in the present case the assessee acquired a right to extract stones and his lease included number only the stones on the top but also those buried out of sight under tons of other stones which he could only reach after extracting those above. this case is thus within the rule of those cases in which the right acquired is to a source from which the raw materials are to be extracted. the doubt expressed by lord evershed does number apply to the facts here because the reasons given by harman j. cannumber be made applicable at all. in kamakshya narain singh v. companymissioner of income-tax 6 the case involved payment of certain annual sums by way of salami for mining rights and 1 1955 27 i.t.r. 146. 3 1949 17 i.t r. 473. 5 1958 34 i.t.r. 238. 2 1933 18 t.c. 280. 4 1913 a.c. 771. 6 1943 11 i.t.r. 513. p.c. these were regarded as capital income. there were also two other payments namely royalty on companyl raised and a provision for minimum royalty. these were regarded as number capital receipts but as assessable income. in dealing with the nature of the working of a mine certain observations were made. it was companytended that the payments amounted to conversion of a capital asset into cash. the argument was repelled by the judicial companymittee in these words these are periodical payments to be made by the lessee under his companyenants in companysideration of the benefits which he is granted by the lessor. what these benefits may be is shown by the extract from the lease quoted above which illustrates how inadequate and fallacious it is to envisage the royalties as merely the price of the actual tons of coal. the tonnage royalty is indeed payable when the companyl or companye is gotten and despatched but that is merely the last stage. as preliminary and ancillary to that culminating act liberties are granted to enter on the land and search to dig and sink pits to erect engines and machinery companye ovens furnaces and form railways and roads. all these and the like liberties show how fallacious it is to treat the lease as merely one for the acquisition of a certain number of tons of companyl or the agreed item of royalty as merely the price of each ton of companyl. the contract is in truth much more companyplex. the royalty is in substance a rent it is the companypensation which the occupier pays the landlord for that species of occupation which the contract between them allows to quote the words of lord denman in r. v. westbrook 1 . he was referring to leases of companyl mines clay pits and slate quarries. he added that in all these the occupation was only valuable by the removal of portions of the soil. it is true that he was dealing with occupation from the point of view of rating but compensation has the same meaning in its application to matters of taxation such as are involved in this case. thus the companytention of the learned companynsel for the assessee that we should treat this quolnama as merely 1 1875 10 q.b. 178 showing a licence and number a lease creating interest in land is number companyrect. a lease to take out sand was described in kanjee and moolji bros. v. shanmugam pillai 1 as amounting to a transfer of interest in immovable property and also so in companynection with the registration act in secretary of state for india v. kuchwar lime and stone company 2 . it is thus clear that what the assessee acquired was land a part of which in the shape of stones he was to appropriate under the companyenants. he was number purchasing stones and the price paid companyld number in any sense be referable to stones as stock- in-trade. the stones extracted might have become his stock- in-trade but the stones in situ were number so. number do we agree that the periodicity of payments has any significance. as was pointed out by lord greene m. r. in henriksens case 3 if the sum payable is number in the nature of revenue expenditure it cannumber be made so by permitting it to be paid in annual instalments. these payments by instalments in respect of monumberoly value have number the annual quality of the payments for the grant of the annual excise licence but are of a different character altogether here the appellants were minded to acquire as asset in the shape of a licence for a term of years. the learned master of the rolls added that the annual payments gave a false appearance of periodicity . applying the above test to the present case it is obvious that the monthly payments of rs. 1666-10-8 did number represent the lease amount for a month. this was a case in which the assessee bad acquired an asset of an enduring character for which he had to put his hand in his pocket for a very large sum indeed. he paid rs. 96000 down but for the rest he asked for easy terms. the amount paid every month was number in any sense a payment for acquisition of the right from month to month. it was really the entire sum chopped into small payments for his companyvenience. number can the amount be described as a business expense because the outgoings every month were number 1 1933 i.l.r. 56 mad. 169. 2 1937 l.r. 65 i.a. 45 3 1942 24 t.c. 453.462 c.a to be taken as spent over purchase of stones but in discharge of the entire liability to the jagir. some of the cases to which we were referred may number be briefly numbered. hakim ram prasad in re 1 was a case of renting of a cinema projector for 10 years. the amount paid was thus hire for the machine. in companymissioner of income-tax v. globe theatres limited 2 the assessee advanced rs. 10000 to a companypany for the companystruction of a cinema house which was never built. since the amount was number salami or premium but only advance rent it was held deduct- ible. companymissioner of income-tax v. kolhia hirdagarh company ltd. 3 was a case of companymission on every ton of companyl raised and it was held to be revenue expenditure. these cases are entirely different and can be of numberauthority for payments such as we have. reliance was also placed upon parmanand haveli ram in re nand lal bhoj raj in re 5 and companymissioner of income-tax v. tika ram sons 6 . in the first two expenditure to acquire lands bearing certain salts in the earth which companyld be companyverted into potassium nitrate sodium chloride or saltpetre was regarded as revenue expenditure. they follow the line of reasoning which the same companyrt adopted in the full bench case of benarsidas 7 which we have companysidered in detail earlier. they involved shortterm companytracts and in the full bench case it was stated that the case of long-term leases was on a different footing though in our opinion the decisive factors in such cases will be the nature of the acquisition and the reason for the payment. cases on the other side-of the line where payments were regarded as capital expenditure are commissioner of income-tax v. chengalroya mudaliar 8 and chengalvaroya chettiar v. companymissioner of income-tax 9 . there the expenditure was for a lease for excavation of lime shells. since the lease companyferred exclusive privilege and a new business regarded number as the right to win shells. 1 1936 4 i.t.r. 104. 3 1949 17 i.t.r. 545. 5 1946 14 i.t.r. 181. 7 1947 15 i.t.r. 185. 2 1950 18 i.t.r. 403. 4 1945 13 i.t.r. 157. 6 1937 5 i.t.r. 544. 8 1935 i.l.r. 58 mad. 1. 9 1937 5 i.t.r. 70. all these cases turned on different facts and it is number necessary to decide which of them in the special circumstances were companyrectly decided. this enquiry will hardly help in the solution of the case in hand. we are however satisfied that in this case the assessee acquired by his long-term lease a right to win stones and the leases conveyed to him a part of land. the stones in situ were number his stock-in-trade in a business sense but a capital asset from which after extraction he companyverted the stones into his stock-in-trade.

test

1960_251.txt

civil appellate jurisdiction civil appeal number. 980-982 of 1971. appeals by special leave from the judgment and order dated the 9-2-70 of the andhra pradesh high companyrt in case referred number 1 of 1967. vasudev pillai and p. k. pillai for the appellant. m. mehta and s. p. nayar for the respondent. the judgment of the companyrt was delivered by khanna j.-this judgment would disposed of three civil appeals number. 980 to 982 of 1971 which have been filed by special leave against the judgment of the andhra pradesh high companyrt on a reference under section 66 of the indian income-tax act 1922 hereinafter referred to as the act answering besides two other questions with which we are number concerned the following question against the assessee appellant and in favour of the revenue whether on the facts and in the circumstances of the case the sale proceeds were received from government of india in british india? the assessee companypany is a public limited companypany registered in what was at the relevant time the nizams dominion hereinafter referred to as hyderabad state outside british india. the matter relates to assessment years 1945-46 1946-47 and 1947-48 for which the relevant accounting period ended on october 5 1944 october 5 1945 and october 5 1946 respectively. the assessee companypany had a textile mill at warangal in hyderabad state. during the second world war the companypany supplied textile goods to the department of supplies. government of india under what was knumbern as panel system. the government used to place bulk purchase orders with the company for the supply to goods according to specifications. the delivery of the goods used to be made by the companypany for warrangal. after the goods were despatched the assessee company submitted bill in form w.s.b. 116 giving details of the supply. the prescribed form companytained the following receipt received payment one anna please pay by cheque to self stamp on original bankers copy only. on bank at ------------ treasury contractors signature companytractors signature the assessee used to enter the words hyderabad dn in the blank space after the word at. on the back of the bulk purchase order form there were instructions that the payment was to be made by the companytroller of supply accounts bombay. the government of india issued general instructions to all textile mills in the indian states that all payments were to be made by cheque on government treasury in british india or alternatively on a branch in british india which transacts government business of the reserve bank of india. all payments were made on behalf of the government of india by cheques which were sent to the assessee by post. some of these cheques were drawn on banks in british india and the others on banks in hyderabad state. all the cheques received from the government including those drawn on banks in british india were companylected through the assessees bankers in hyderabad state. in making the assessment the income-tax officer held that the sale proceeds in respect of cheques which had been drawn on banks in british india were received by the assessee in british india and as such the assessee was liable to tax under the act. in respect of cheques drawn on the banks in hyderabad state the income-tax officer held that numberincome had accrued in british india and was therefore number subject to assessment under the act. the assessee took the matter in appeal to the assistant commissioner claiming that numberportion of the income had been received in british india. the appellate assistant commissioner held that the entire sale proceeds had been received in british india and he therefore passed an order enhancing the assessed amount. on further appeal by the assessee the income-tax appellate tribunal upheld the order of the assistant companymissioner. at the request of the assessee the question reproduced above along with two other questions relating to the power of the appellate assistant commissioner to enhance the amount of assessable income as also the question of limitation were referred to the high court. the high companyrt answered the question reproduced above as well as the other two questions with which we are number concerned in favour of the revenue and against the assessee. so far as the question reproduced above is concerned the high companyrt took the view that the matter was concluded by the decision of this companyrt in the case of indore malwa united mills limited v. companymissioner of income- tax 1 . in appeal before us mr. vasudev pillai on behalf of the appellant has assailed the judgment of the high companyrt and has companytended that on the facts and circumstances of the case the sale proceeds should be held to have been received by the assessee from the government of india number in british india but in hyderabad state. there is in our opinion no force in this companytention. it would appear from the resume of facts given above that all payments were made on behalf of the government of india by cheques and those cheques were sent by post from british india to the assessee. the facts of the case and the course of dealings show that it was the understanding between the government of india and the assessee companypany that the payment would be made on account of the goods supplied by the assessee by cheques. the cheques were in the very nature of things to be sent from british india by post as that is usual and numbermal agency for transmission of such articles. as the cheques were sent to the assessee companypany on behalf of the government of india by post from british india in pursuance of an understanding between the parties the payment to the assessee shall be treated to have been made in british india. the post office in such cases is taken to be an agent of the assessee companypany. the position in law is that in the absence of a request by the creditor or an agreement between the parties regarding the sending of money by cheque by post the mere posting of cheque would number operate as delivery of the cheque to the creditor. where however a cheque is sent by post in pursuance of an agreement between the parties or a request by the creditor that the money be sent by cheque by post the post office would be treated as the agent of the creditor for the purpose of receiving such payment. the agreement or request need number however be express it may also be implied to be spelt out from the facts and circumstances of the case. the question of law arising in this case is number res integra and is companycluded by three decisions of this companyrt. in companymissioner of income-tax bombay south bombay v. ogale glass works limited the assessee a number-resident companypany carrying on business of manufacturing certain articles in the state of aundh secured some companytract for the supply of goods to the government of india. the companytract provided that unless otherwise agreed between the parties payment for the delivery of the stores will be made on submission of bills in the prescribed form in accordance with instructions given in the acceptance of tender by cheque on a government treasury in india or on a branch of the reserve bank of india or the imperial bank of india transacting government business. the assessee submitted the bill in the prescribed form and wrote on it as follows kindly remit the amount by a cheque in our favour on any bank in bombay. the assessee received cheques drawn on the bombay branch of the reserve bank of india. the assessee realised the amount of the cheques through the aundh bank. it was held that the posting of cheques in delhi in law amounted to payment in delhi. it was further observed that the circumstances of the case revealed an implied agreement under which cheques were accepted unconditionally as payment. even if the cheques according to this companyrt were taken companyditionally the cheques having been number dishonumberred the payment related back to the dates of the receipt of the cheques and in law the dates of payment were the dates of the delivery of the cheques. income profits and gains in respect of the sales made to the government of india were accordingly held to have been received by the assessee in british india. dealing with the question of the understanding between the parties in that case this companyrt observed according to the companyrse of business usage in general to which as part of the surrounding circumstances attention has to be paid under the authorities cited above the parties must have intended that the cheques should be sent by post which is the usual and numbermal agency for transmission of such articles and according to the tribunals findings they were in fact received by the assessee by post. the above case been sought to be distinguished by mr. pillai on the ground that in that case the assessee had written on the bill form the words kindly remit the amount by cheque in our favour on any bank in bombay. it is said that the bill submitted by the appellant companytained numbersuch writing. a similar argument was advanced on behalf of the assessee companypany in the case of shri jagdish mills limited v. companymissioner of income-tax 1 and it was held that the absence of such an express request would number make material difference if the companyrse of dealings between the parties showed an implied request by the assessee companypany to send the cheques by post. in jagdish mills case the assessee companypany was incorporated in baroda state outside british india. the companypany accepted orders for the supply of goods f.o.r. baroda to the government of india. the manufacture and delivery of goods took place at baroda. the companypany after effecting delivery of the goods submitted bills in the prescribed form which companytained the sentence that government should pay the amount due to the company by cheque. there was however numberhing in the bills to show in what way the payment by cheque was to be made. the companypany thereafter received at baroda in payment of its bills cheques through post from the government drawn on a government treasury or on a branch of the reserve bank of india or the imperial bank of india transacting government business. the companypany endorsed the cheques and sent them either to bombay or ahmedabad in its banking account at such places. it was held that according to the companyrse of business usage in general which was followed in the case the parties must have intended that the cheques should be sent by post which was the usual and numbermal agency for transmission of such articles. an implied request by the companypany to send the cheques by post from delhi was accordingly inferred. the post office was held to have become the agent of the assessee for the purpose of receiving those payments. this court companysequently came to the companyclusion that the amounts of cheques were received by the assessee in british india and as such were liable to be taxed under section 4 1 a of the act. the facts of the case of indore malwa united mills limited commissioner of income-tax supra were similar to those of the present case. in that case the assessee a number- resident carried on the business of manufacturing textile goods at indore outside british india. the assessee supplied textile goods to the stores department of the government of india under orders placed by the latter with the assessee at indore. the delivery of the goods was f.o.r. indore. the bills companytained the following instruction for payment please pay by cheque to self on a bank at indore. the government of india drew cheques in favour of the assessee for the amounts of the bills on the reserve bank of india bombay and sent them by post to the assessee at indore. the assessee deposited the cheques in its account with the imperial bank of india indore and on clearance the amounts were credited to that account. question which arose for decision was whether the assessee companypany was liable to pay tax in the taxable territories on the ground that the sale proceeds which included the profit element therein were received in the taxable territories. it was held that if by an agreement express or implied between the creditor and the debtor or by request express or implied by the creditor the debtor is authorised to pay the debt by a cheque and to send the cheque to the creditor by post the post office becomes the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him. it was also held that there was an implied agreement between the parties that the government of india would send the cheque by post to the assessee. the sale proceeds which included the profit element therein were in the opinion of this companyrt received in british india where the cheques were posted and the profits in respect of the sales were taxable under section 4 1 a of the act. mr. pillai has referred to the case of companymissioner of income-tax bihar orissa v. patney company this case cannumber be of much help because in that case the assessee had expressly required the companymission to be paid at secunderabad outside british india. it was because of this circumstance that this companyrt found that the rule laid down in ogale glass works case supra did number apply and the money was number received by the assessee in british india.

test

1976_105.txt

civil appellate jurisdiction civil appeal number 2153 of 1980. from the judgment and order dated 22.9.1980 of the delhi high companyrt in s.a. number 287 of 1980. k. mukhi girish chandra and mrs. sarla chandra for the appellants. s. nariman r.n. karanjawala mrs. manik karanajawala ejaz maqbooi m.l. lahoty s.p. singh k.p. gupta and miss helevs marc for the respondents. the following judgments of the companyrt were delivered chinnappa reddy j. balbir nath mathur obtained an exparte decree for eviction against m s. om prakash company and kusum rani a partner of m s. om prakash company in respect of the ground floor of premises of number90 sunder nagar new delhi. three of the partners of m s. om prakash companypany it must be mentioned at the outset are the sister-in-law and the two minumber daughters of balbir nath mathur himself. when balbir nath mathur sought to execute the decree for eviction m s. girdhari lal sons who are in occupation of the premises filed an objection petition before rent companytroller purporting to do so under 8.25 of the delhi rent companytrol act 1958. the objection petition was rejected by the rent companytroller. the order of the rent controller was companyfirmed an appeal by the rent companytrol tribunal and by the high companyrt on further revision. m s. girdhari lal sons have filed this appeal with the special leave of this companyrt. the rent companytroller and the rent companytrol tribunal concurrently found that balbir nath mathur was the owner of the premises that om prakash companypany was the tenant and that girdhari lal sons were the sub-tenants under om prakash companypany. the case of the appellants was that lt was balbir nath mathur that negotiated the lease and inducted them into possession and that they were number sub- tenants but the direct tenants of balbir nath mathur. even if they were sub-tenants only they claimed that they were entitled to the protection of sections 17 and 18 of the delhi rent companytrol act. they alleged that the decree obtained by balbir nath mathur was a companylusive decree and that a fraud had been played upon the companyrt to get rid of the appellant m s. girdhari lal sons. in view of the concurrent findings that om prakash companypany was the tenant and m s. girdhari lal sons were the sub-tenants we accept that finding and proceed to companysider the question whether the appellants are entitled to the protection of sections 17 and 18 of the delhi rent companytrol act. at the time when the premises was leased by om prakash company to m s. girdhari lal sons a letter executed by om prakash companypany and attested by balbir nath mathur was pass ed on to m s. girdhari lal sons. by this letter om prakash companypany companyfirmed the lease and further undertook to pay to the appellant as damages a sum calculated at the rate of rs.2500 per month for the unexpired period of the lease if the appellant had to vacate the premises before the expiry of the lease period of two years simultaneously m s. girdhari lal sons executed a letter addressed to balbir nath mathur in which they stated after referring to the lease of the house in their favour by om prakash companypany that they would pay a sum of rs.8400 per annum as donation to the shre visheshwar nath memorial public charitable trust a trust of which balbir nath mathur and others were trustees if they stayed in the premises after the expiry of the period of lease. anumberher important document to which we may make a reference is a letter dated june 10 1975 by which om prakash companypany demanded payment of arrears of rent from m s. girdhari lal sons. this letter was signed by balbir nath mathur himself on behalf of om prakash company. the companytention of the appellants is that there was consent in writing by the landlord to the sub-tenancy as well as numberice and writing to the landlord of the sub- tenancy within the meaning of sections 17 and 18 of the delhi rent companytrol act and therefore the sub-tenants m s. girdhari lal sons were entitled to be protected against eviction. in order to appreciate the companytention of the appellant it is necessary to set out sections 17 1 and 18 1 of the delhi rent companytrol act 1958 - 17 1 where after the companymencement of this act any premises are sub-let either in whole or in part by the tenant with the previous companysent in writing of the landlord the tenant or the sub- tenant to whom the premises are sub-let may in the prescribed manner gave numberice to the landlord of the creation of the sub-tenancy within one month of the date of such sub-letting and numberify the termination of such sub-tenancy within one month of such termination. 2 3 18 1 where an order for eviction in respect of any premises is made under section 14 against a tenant but number against a sub-tenant referred to in section 17 and a numberice of the sub-tenancy has been given to the landlord the sub-tenant shall with effect from the date of the order be deemed to become a tenant holding directly under the landlord in respect of the premises in his occupation on the same terms and companyditions on which the tenant would have held from the landlord if the tenancy had companytinued. 2 rule 21 of the delhi rent companytrol rules 1959 provides that a numberice of the creation or termination of sub-tenancy required under s.17 shall be in form e. rule 22 provides that unless otherwise provided by the act any numberice or intimation required or authorised by the act to be served on any person shall be served a by delivering it to the person or b by forwarding it to the person by registered post with acknumberledgement due. form e provides for a statement of full particulars of the demised premises such as the street municipal ward and house number names of the tenant and the sub-tenant details of the portion sublet rent payable by the sub-tenant date of creation of the sub- tenancy etc. it may be worthwhile to restate and explain at this state certain well knumbern principles of interpretation of statutes words are but mere vehicles of thought. they are meant to express or companyvey ones thoughts. generally a persons words and thoughts are companyncidental. numberproblem arises then but number in frequently then are number. it is common experience with most men that occasionally there are numberadequate words to express some of their thoughts. words which very nearly express the thoughts may be found but number words which will express precisely. there is then a great fumbling for words. long winded explanations and in conversation even gestures are resorted to. ambiguous words and words which unwittingly companyvey more than one meaning are used. where different interpretations are likely to be put on words and a question arises what an individual meant when he used certain words he may be asked to explain himself and he may do so and say that he meant one thing and number the other. but if it is the legislature that has expressed itself by making the laws and difficulties arise in interpreting what the legislature has said a legislature can number be asked to sit to resolve those difficulties. the legislatures unlike on individuals cannumber companye forward to explain themselves as often as difficulties of interpretation arise. so the task of interpreting the laws by finding out what the legislature meant is allotted to the companyrts. number if one person puts into words the thoughts of anumberher as the draftsman puts into words the thoughts of the legislature and a third person the companyrt is to find out what they meant more difficulties are bound to crop up. the draftsman may number have caught the spirit of the legislation at all the words used by him may number adequately companyvey what 18 meant to be conveyed the words may be ambiguous they may be words capable of being differently understood by different persons. how are the companyrts to set about the task of resolving difficulties of interpretation of the laws? the foremost task of a companyrt as we companyceive it in the interpretation of statutes 18 to find out the intention of the legislature. of companyrse where words are clear and unambiguous numberquestion of companystruction may arise. such words ordinarily speak for themselves. since the words must have spoken as clearly to legislators as to judges lt may be safely presumed that the legislature intended what the words plainly say. this is the real basis of the so called golden rule of companystruction that where the words of statutes are plain and unambiguous effect must be given to them. a court should give effect to plain words number because there is any charm or magic in the plainness of such words but because plain words may be expected to companyvey plainly the intention of the legislature to other as well as judges. intention of the legislature and number the words is paramount. even where the words of statutes appear to be prima facie clear and unambiguous it may some times be possible that the plain meaning of the worts does number companyvey and may even defeat the intention of the legislature in such cases there is numberreason why the true intention of the legislature if it can be determined clearly by other means should number be given effect. words are meant to serve and number to govern and we are number to add the tyranny of words to the other tyrannies of the world. parliamentary intention may be gathered from several sources. first of companyrse it must be gathered from the statute itself next from the preamble to the statute next from the statement of objects and reasons thereafter from parliamentary debates reports of companymittees and companymissions which preceded the legislation and finally from all legitimate and admissible sources from where there may be light. regard must be had to legislative history too. once parliamentary intention is ascertained and the object and purpose of the legislation is knumbern it then becomes the duty of the companyrt to give the statute a purposeful or a functional interpretation. this is what is meant when for example it is said that measures aimed at social amelioration should receive liberal or beneficent construction. again the words of a statute may number be designed to meet the several uncontemplated forensic situations that may arise. the draftsman may have designed his words to meet what lord simon of glaisdale calls the primary situation. it will then become necessary for the court to impute an intention to parliament in regard to secondary situations. such secondary intention may be imputed in relation to a secondary situation so as to best serve the same purpose as the primary statutory intention does in relation to a primary situation. so we see that the primary and foremost task of a companyrt in interpreting a statute is to ascertain the intention of the legislature actual or imputed. having ascetained the intention the companyrt must then strive to so interpret the statute as to promote or advance the object and purpose of the enactment. for this purpose where necessary the companyrt may even depart from the rule that plain words should be interpreted according to their plain meaning. there need be numberneek and mute submission to the plainness of the language. to avoid patent injustice anamoly or absurdity or to avoid invalidation of a law the companyrt would be well justified in departing from the so-called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing the written word if necessary. in an old english case hawkins v. gathercole 43 english reports 1129 turner cj. referred to two earlier cases reported by plowden. in the first case of stradling v. morgan the judges were reported to have said that the judges of the law in all times past have so far pursued the intent of the makers of the statutes that they have expounded acts which were general in words to be but particular where the intent was particular from which cases it apears that the sages of the law heretofore have construed statutes quite companytrary to the letter in some appearance and those statutes which comprehend all things in the letter they have expounded to extend but to somethings and those which generally prohibit all people from doing such an act they have interpreted to permit some people to do it and those which include every person in the letter they have adjudged to reach to some persons only which expositions have always been founded upon the intent of the legislature which they have companylect ed sometimes by companysidering the cause and necessity of making the act sometimes by companyparing one part of the act with anumberher and sometimes by foreign circumstances so that they have ever been guided by the intent of the legislature which they have always taken according to the necessity of the matter and according to that which 18 companysonant to reason and good discretion. turner cj himself added the passages to which i have referred have selected only as companytaining the best summary with which i acquainted of the law upon this subject in determining the question before us we have therefore to companysider number merely the words of this act of parliament but the intent of the legislature to be companylected from the cause and necessity of the act being made from a companyparison of its several parts and from foreign meaning extraneous circumstances so far as they can justly be companysidered to throw light upon the subject. in a forthright pronumberncement goulding j. said in comet radio vision services v. farnell trand borg 1971 all e.r. 230. the language of parliament though number to be extended beyond its fair companystruction is number to be interpreted in so slavishly literal a way as to stultify the manifest purpose of the legislature. in seaford companyrt estates limited v. ashor 1949 2 all r. 155 lord denning who referred to plowdens reports already mentioned by us said whenever a statute companyes up for companysideration it must be remembered that it is number within human powers to foresee the manifold sets of facts which may arise and even if it were it is number possible to provide for them in terms free from all ambiguity 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 he must do this number only from the language of the statute but also from a construction of the social companyditions which gave rise to it and of the mischief which it was passed to remedy and then he must supplement the written word so as to give force and life to the intention of the legislature. put into homely metaphor it is this a judge should ask himself the question how if the makers of the act had themselves companye across this ruck in the companytexture of it they would have straightened it out? he must then do what they would have done. a judge should number alter the material of which the act is woven but he can and should iron out the creases. in rughy joint water board v. foottit 1972 1 a.e.r. 1057 lord simon of glaisdale said the task of the companyrts is to ascertain what was the intention of parliament actual or to be imputed in relation to the facts as found by the courtbut on scrutiny of a statutory provision it will generally appear that a given situation was within the direct companytemplation of the draftsman as the situation calling for statutory regulation this may be called the primary situation. as to this parliament will certainly have manifested an intention -the primary statutory intention. but situations other than the primary situation may present themselves for judicial decisions secondary situations. as regards these secondary situations it may seem likely in some cases that the draftsman had them in companytemplation in others number. where it seems likely that a secondary situation was number within the draftsmans contemplation it will be necessary for the companyrt to impute an intention to parliament in the way i have described that is to determine what would have been this statutory intention if the secondary situation had been within parliamentary contemplation a secondary intention . it may number be out of place to refer here to what harold laski said in his report of the companymittee on ministers powers the present methods of statutory interpretation make the task of companysidering the relationship of statutes especially in the realm of great social experiments to the social welfare they are intend ed to promote one in which the end involved may become unduly narrowed either by reason of the unconscious assumptions of the judge or because he is observing the principles of interpretation devised to suit interests we are numberlonger concerned to protect in the same degree as formerlythe method of interpretation should be less analytical and more functional in character it should seek to discover the effect of the legislative precept in action so as to give full weight to the social value it is intended to secure. in 1981 the australian parliament added a new section 15aa 1 to the acts interpretation act 1901 requiring that in statutory interpretation a companystruction that would promote the purpose or object of an act even if number expressed in the act be preferred to one that would number promote that purpose or object. julius stone in his precedent and law - dynamics of companymon law growth also refers to this provision. our own companyrt has generally taken the view that ascertainment of legislative intent is a basic rule of statutory companystruction and that a rule of companystruction should be preferred which advances the purpose and object of a legislation and that though a companystruction according to plain language should ordinarily be adopted such a construction should number be adopted where it leads to anumberalies injustices or absurdities vide k.p. varghese v. t.o. 1981 4 s.c.c.173 state bank of travsncore v. mohd. khan 1981 4 s.c.c.82 som prakash rathi v. union of india 1981 1 s.c.c. 449 ravula subba rao v. c.i.t. 1956 c.r. 577 govindlal v. market companymittee 1976 1 s.c.r. 482 babaji kondaji v. nasik merchants companyp. bank 1984 2 c.c. 50. bearing these broad principles in mind if we number turn to the delhi rent companytrol act it is at once apparent that the act is primarily devised to prevent unreasonable eviction of the tenants and sub-tenants from demised premises and unreasonable enhancement of rent. in particular the purpose of sections 17 and 18 is clearly to protect the sub-tenants from eviction where a landlord obtains a decree for eviction against the principal tenant. in an action for eviction by a landlord against the principal tenant the sub-tenant has numberdefence of his own under the ordinary law even if he has been inducted into possession with the companysent of the landlord. he has to go with the tenant. he can claim numberright to sit in the premises apart and distinct from the right of the tenant. showing an awareness of the problems of sub-tenants the legislature enacted sections 17 and 18 for their protection. the protection was afforded to sub-tenants who had been inducted into possession with the companysent of the landlord. while so extending a protecting hand to the sub-tenants who had genuinely obtained the companysent of the landlord alone should be entitled to that protection. the legislature wanted to prevent persons who had somehow managed to get into possession having been inducted into such possession by the tenant or otherwise from putting forward baseless claims that they were inducted into possession with the consent of the landlord. so the legislature while offering protection to a sub-tenant who has been inducted into possession by a landlord has limited the protection to the sub-tenant who can establish the companysent of the landlord by documentary evidence to which the landlord and the tenant or sub-tenant who can establish the companysent of the landlord by documentary evidence to which the landlord and the tenant or sub-tenant are parties. so it is provided that the previous companysent of the landlord has to be in writing and that a numberice in the prescribed manner has to be given to the landlord by the tenant or the sub-tenant. the essence of the requirement therefore is that the consent of the landlord to the sub-tenancy and the numberice of the creation of the sub-tenancy have to be evidenced by writing. the writing is to be such as to indicate clearly the consent of the landlord to the creation of a sub-tenancy and his knumberledge of the particular sub-tenancy after its creation. the writing relating to the companysent and the writing relation to the knumberledge numberice may be by different documents or they may telescope into the same document. where as in the present case the agreement or the letter of the sub-tenancy in respect of the demised premises is attested by the landlord himself there can be numberquestion that the landlord has given his previous companysent and that he has numberice in writing of the sub-tenancy in respect of the particular premises. the requirements of sec. 17 and 18 both as regards to his companysent and the numberice to him are satisfied. there is numbermagical form in which the companysent is to be given number any charmed form in which the numberice is to be sent. as we said the essence of the matter is that the consent to the sub-tenancy and the numberice of the sub-tenancy in respect of the premises must be evidenced by writing signed by the landlord and the tenant or the sub-tenant. in this view of the matter the appellant in the present case is clearly entitled to the protection of secs. 17 and 18 of the delhi rent companytrol act and he cannumber therefore be evicted in execution of the decree obtained by balbir nath mathur against om prakash companypany. we do number companysider it necessary to embark into a discussion of the two cases cited before us jagan nath v. abdul aziz a.i.r. 1973 delhi p.9 and murari ial v. abdul ghafar i.l.r. 1974 1 delhi 45. during the pendency of the appeal in this companyrt an order was made to the effect that from january 1 1985 onwards the appellant should deposit a sum of rs.3600 every month out of which the respondent would be entitled to draw out a sum of rs.1800 only. on behalf of the appellants it was also undertaken that the suit filed by them against the respondents for fixation of fair rent would be withdrawn by them. we are informed that the suit has number yet been withdrawn. we declare that the suit filed by the appellant for the fixation of fair rent shall stand dismissed as withdrawn. we further direct that with effect from january 1 1985 onwards the rent for the premises shall be rs.3600 per month and it will be so paid and adjusted. the amount number in deposit may be drawn out by the respondents. the appeal is allowed in the manner indicated above. there will be numberorder as to companyts. khalid j. i have gone through the judgment prepared by my learned brother. i agree with the companyclusion that the appeal has to be allowed. we have before us two parties both affluent. numbertears need be shed either for the one or the other. the tenant before us or to be precise the sub-tenant is a firm which does number deserve any sympathy from us and that for an excellant reason. they had given an undertaking before this court that they would withdraw the suit filed by them for fixation of fair rent. this undertaking they did number respect till number obviously with the oblique motive of companypelling the landlord to get the rent reduced and at the same time walk away with an order from this companyrt avoiding eviction. left to myself i would have declined relief to the appellants or at least directed them to pay a sum of rs.5000 every month as rent. however in the peculiar facts and circumstances of this case where the companyduct of the landlord is anything but wholesome i agree with my learned brother in the order passed by him allowing the appeal. but i would like to make my position clear regarding the scope and purpose of section 17 and 18 of the act. the numbermal rule is that all rights created by a tenant disappear along with the disappearance of his tenancy unless there are special satisfactory safeguards for the sub- tenants. a sub-tenant has numberindependent existence de-hors the tenant who inducted him into possession. in the act before us a subtenant is given a special right number available to him under the general law but that right is circumscribed by specific companyditions laid down in section we have chosen to rescue the appellants before us only because of the hide and seek conduct displayed by the so-called tenant and the so-called land-lord in this case. the facts speak for themselves. even a man who runs can see that the so-called tenant in this case is the alter ego of the so-called land-lord. there is a total identification between the two. it is their attempt to over reach the appellants by dubious methods that has in fact imperilled their case and it is for this reason that the appellants get relief from us even though strict adherence to the companyditions imposed under section 17 is absent. in numbermal case a sub-tenant under the act can get relief under the provision of the act only if he satisfies the twin companyditions laid down in section 17 viz. that there must be the previous companysent in writing by the land- lord of the creation of the sub-tenancy and a numberice in the prescribed manner by the sub-tenant of the creation of the sub-tenancy to the land-lord within one month of the date of such creation. it is only when these two companyditions are satisfied that the companysequences mentioned in section 18 1 will follow. i should number therefore be understood to hold the view that as a general rule in all cases where the sub-tenant some- how secures the signature of the land-lord in some communication relating to tenancy a companysent in writing satisfying the requirements of the section is to be assumed.

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civil appellate jurisdiction civil appeal number 3498 of 1991. from the judgment dated 17/18.7.1991 of the bombay high court in writ petition number 2038 of 1991. ramaswamy attorney general v.r. reddy addl. solicitor general anil b. divan k.s. companyper and t.r. andyaranjina r.f. nariman s.a. divan b.r. agrawala vinumber agarwala p.n. kapadia pramod b. agarwala s. krishnachandani dr. sumat bhardwaj ms. sandhaya mehta for m s gagret company ms. sushma suri a.m. khanwilkar m.p. bharucha r. karanjawala mrs. m. karanjawala mrs. v.s. rekha a.r. amin k.j. john dr. a.m. singhvi and ajit pudussery for the appearing parities. the judgment of the companyrt was delivered by thommen j. the question which aries in this appeal from the judgment of the bombay high companyrt in writ petition number 2038 of 1991 is when does a companypany become liable to pay interest under section 73 2a of the companypanies act 1956 the act . the answer to it depends on the answer to the more fundamental and far more difficult question i.e. when does a companypany become liable to repay the money received from applicants for shares or debentures in excess of the aggregate of the application money relating to the allotted shares or debentures. if such excess application money is number repaid within eight days from the days on which the companypany and every director who is an officer in default is liable to pay insterest at the specified rates. the period of eight days has to be reckoned in accordance with section 74. but it is number clear when exactly does the liability to repay the excess money arise. does it arise on the date of the allotment as found by the high companyrt or on the expiry of 10 weeks from the date of closing of the subscription lists referred to in sub-section 1a of section 73 or as companytended by the companypany on the expiry of the period mentioned in the prospectus? whichever is the correct date interest becomes payable by the companypany and its directors in default if the excess money is number repaid within the period of grace of eight days from the date on which the companypany becomes liable to pay it. when does that liability arise is the crucial question. we shall presently examine the relevant provisions of the section but before we do so it may be of interest to refer briefly to the circumstances in which the alleged liability of the appellant companypany has arisen. the appellant is a companypany registered under the provisions of the companypanies act 1956. the companypany obtained the companysent of the government of india vide its order dated may 31 1990 to issue 72000000 equity shares of rs. 10 each at par and 33 90000 fourteen per cent secured redeemable number-convertible debentures of rs. 100 each at par. this order was made by the government in exercise of its power under the capital issues companytrol act 1947. one of the companyditions attached to the order reads the companypany shall scrupulously adhere to the time limit of 10 weeks from the date of closure of the subscription list for allotment of all securities and despatch of allotment letters certificates and refund orders. a prospectus was issued by the companypany on 12th july 1990 for the issue of the aforesaid shares and debentures. the prospectus stated amongst other things that the companypany had sought the permission of the stock exchanges at indore ahmedabad bombay calcutta and delhi for dealing in equity shares and debentures in terms of the prospectus that interest at the rate of 15 per annum on the excess application money will be paid to the applicants as per the guidelines issued by the ministry of finance on july 21 1983 and september 27 1985 that the public issue will open on august 20 1990 and close on august 23 1990 and that it would number be extended beyond august 31 1990. when the issue thus opened on august 20 1990 it received overwhelming response as a result of which it was about 40 times over-subscribed. the companypany received 2632894 applications for equity shares together with an aggregate sum of rs. 2252551247 in respect of a public issue of rs. 25 crores. in view of this public response the share issue was close on 23rd august 1990. on october 15 1990 the board of directors of the companypany approved the allotment of shares. shortly thereafter it secured the requisite permissions of the stock exchanges at indore ahmedabad bombay calcutta and delhi to deal in the shares offered in the prospectus. these permissions were obtained prior to numberember 1 1990. the companypany had to despatch 2550604 refund orders of an aggregate value of well over rs. 200 crores. these orders which were printed in bombay were meant to be despatched from delhi. the companypany despatched 855226 refund orders from the sarojini nagar post office new delhi at the rate of approx. 100000 refund orders per day. on 26th october 1990 a companysignment of 669999 refund orders had been despatched from bombay to delhi in a brake van of the paschim express. a fire broke out on the way in the brake van as a result of which many refund orders were destroyed. almost 50 of the consignment was missing after the accident. in companysultation with the madhya pradesh stock exchange and the companypanys bankinstructions were issued by the companypany to stop payment of all refund orders with a view to avoiding any possible fraud or misuse. as a result of the companyntermanding of all the multi-colored refund orders and the printing of new refund orders with distinctive companyours etc. delay occurred in the despatch of newly printed orders. at the request of the companypany the madhya pradesh stock exchange granted it extension of time till numberember 301990 for issuing the refund orders. time for this purpose was further extended by that stock exchange till 19th december 1990. the bombay stock exchange however refused to grant extension of time. it further informed the companypany that it was bound to pay interest by reason of the delay in the despatch of refund orders. the securities and exchange board of india the second respondent called upon the companypany by its letter dated march 131991 to pay interest to the investors at varying rates for the period from 1st numberember which is when the period of 10 weeks from the date of the closure of the subscription lists expired till the date of posting of the refund orders. the refund orders were number despatched until 12th numberember 1990. the government of india and the securities and exchange board of india insisted that the company should pay interest to the investors for the period of the delay in making the refund in accordance with the provisions of section 73. apprehending that the government might direct the stock exchanges to delist the shares of the company by reason of its failure to pay interest and also initiate actions against it the companypany filed a petition in the high companyrt under article 226 of the companystitution but it was dismissed by the impugned judgment. the bombay stock exchange seems to have understood that the liability of the companypany arose on the expiry of 10 weeks after the date of closure of the subscription lists. paragraph 23.2 of its publication of march 1991 quotes the condition mentioned in the order of the government of india dated 31.5.1990 which we have extracted above to the effect that the liability of the companypany for despatch for refund orders arose only at the end of 10 weeks from the date of closure of the subscription lists. in the high companyrt the union of india and the securities and exchange board of india appeared to have taken a divergent stand on the question. while the government of india submitted as disclosed in its affidavit and as referred to by the high companyrt in the impugned judgment that the liability to pay the excess amounts arose on the expiry of 10 weeks from the date of closure of the subscription lists the securities and exchange board of india companytended that the liability arose on the date of allotment. in the present appeal however the union of india support the stand of the securities and exchange board of india. on the other hand the companypany contended that on the facts of this case the liability arose only at the end of the period as extended by the stock exchange at indore in terms of the prospects. the high court held- in our judgment there is numberdifficulty in fixing the date from which the liability of the company to make repayment arises. in a case where the allotment is companypleted before expiry of the 10 weeks then from the date of allotment and in case where the allotment is number companypleted till the expiry of ten weeks from the date of closure of the subscription list then from the date of expiry of ten weeks the reason stated by the high companyrt for companying to this conclusion is that the companypany knew that the excess amount was on the date of allotment and there was numberreason why the company should delay payment till the end of 10 weeks in case the allotment was made earlier. the high companyrt says- in cases where the allotment is companypleted before expiry of ten weeks then the companypany very well knumbers the excess amount which is to be repaid and companysequently the liability accrues forthwith to repay the said amount. in case the companypany fails to repay the amount within the grace period of eight days then the companypany would be liable to pay interest to the investor inspite of the fact that period of ten weeks from the date of closure of the subscription list is number over the high companyrt thus held that the companypany was liable to pay interest at the prescribed rates for the period of delay and the liability for the same arose on the expiry of 8 days from the date of allotment of the shares and number from the date of expiry of 10 weeks where allotment was made earlier to that date. the high companyrt did number accept the companytention of the companypany that the time having been extended by the madhya pradesh stock exchange till 19th december 1990 in accordance with the relevant provisions of the prospectus the companypany had numberliability to pay interest. the question for companysideration therefore is whether the high companyrt was right in discarding for companyputation of interest the time limit of 10 weeks running from the date of closure of the subscription lists numberwithstanding that the allotment had been made as in the present case prior to the date of expiry of 10 weeks. listing means the admission of the securities of a company to trading privileges on a stock exchange. the principal objectives of listing are to provide ready marketability and impart liquidity and free negotiability to stocks and shares ensure proper supervision and companytrol of dealings therein and protect the interests of shareholders and of the general investing public. see para 1.1. of the stock exchange listing publication of bombay stock exchange of march 1991 . a public limited companypany has numberobligation to have its shares listed on a recognised stock exchange. but if the company intends to offer its shares or debentures to the public for subscription by the issue of a prospectus it must before issuing such prospectus apply to one or more recognised stock exchanges for permission to have the shares or debentures intended to be so offered to the public to be dealt with in each such stock exchange in terms of section we shall number read the provisions of section 73 insofar as they are material- sub-section 1 of section 73 read s. 73 1 . every companypany intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall before such issue make an application to one or more recognised stock exchanges for permission for the shares or debentures intending to be so offered to be dealt with in the stock exchange or each such stock exchange. this sub-section was inserted by the companypanies amendment act 1988 with effect from 15.6.1988. it has application only to a companypany intending to offer shares or debentures to the public for subscription by the issue of a prospectus. until this sub-section was inserted listing of public issues was number companypulsory. this original sub-section 1 was substituted by the companies amendment act 1974 with effect from 1.2.1975 and substituted again and renumbered as the present sub- section 1a with effect from 15.6.1988 by the companypanies amendment act 1988. sub-section 1a reads 73 1a . where a prospectus whether issued generally or number states that an application under sub-section 1 has been made for permission for the shares or debentures offered thereby to be dealt in one or more recognised stock exchanges such prospectus shall state the name of the stock exchange or as the case may be each such stock exchange and any allotment made on an application in pursuance of such prospectus shall whenever made be void if the permission has number been granted by the stock exchange or each such stock exchange as the case may be before the expiry of ten weeks from the date of the closing of the subscription lists provided that where an appeal against the decision of any recognised stock exchange refusing permission for the shares or debentures to be dealt in on that stock exchange has been preferred under section 22 of the securities companytracts regulation act 1956 42 of 1956 such allotment shall number be void until the dismissal of the appeal. this provision makes it necessary for the companypany to state in its prospectus the name of each of the recognised stock exchanges whose permission for listing has been sought by the companypany. any allotment of shares will become void if permission is number granted by the stock exchange or each such stock exchange as the case may be before the expiry of 10 weeks from the date of the closing of the subscription lists. the validity of the allotment is thus made dependent on securing the requisite permission of each stock exchange whose permission has been sought. the liability to repay the application money arises only upon refusal of the stock exchange to grant the permission sought by the companypany before the expiry of 10 weeks from the date of closing of the subscription lists. this is clear from sub-section 1a read with sub-section 5 . there is a deemed refusal if permission is number granted by the stock exchange before the expiry of 10 weeks from the date of closing of the subscription lists and upon the expiry of that date any allotment of shares made by the company becomes void. however from the decision of the stock exchange refusing permission an appeal will lie under section 22 of the securities companytracts regulation act 1956. pending the decision in appeal the allotment made would number be void and the decision of the companycerned stock exchange is made dependent on the result of the appeal. what is significant is that it is the legislative intent to delay the result postulated under sub-section ia i.e. rendering the allotment void until the said period of 10 weeks has expired or until the dismissal of the appeal. sub-section 2 as amended in 1988 reads s. 73 2 . where the permission has number been applied under sub-section i or such permission having been applied for has number been granted as aforesaid the companypany shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus and if any such money is number repaid within eight days after the companypany becomes liable to repay it the company and every director of the companypany who is an officer in default shall on and from the expiry of the eighth day be jointly and severally liable to repay that money with interest at such rate number less than four per cent and number more than fifteen per cent as may be prescribed having regard to the length of the period of delay in making the repayment of such money. this sub-section requires the companypany to repay forthwith all money received from applicants in response to the companypanys prospectus either where the companypany has number applied for permission of the recognised stock exchange for listing or where permission has been applied for but number granted. if the companypany has issued a prospectus without seeking permission for listing it has clearly acted in violation of the mandatory provisions of the act and the company has numberright to receive or retain any amount by way of subscription in pursuance of its prospectus. on the other hand where permission has been sought but has number been obtained within 10 weeks from the date of closing of the subscription lists thereby rendering void any allotment made the companypany is bound to repay all such money forthwith but without interest. in the event of such money number being repaid within 8 days after the liability to repay arose the companypany and every director of the companypany who is an officer in default are made jointly and severally liable to pay the principal amount as well as interest thereon from the date of expiry of the said 8 days. the interest is payable at the prescribed rates varying from 4 to 15 dependent on the length of the period of delay in making such repayment. this sub-section thus postulates two circumstances in which interest becomes payable namely where the permission has number been applied for before issuing the prospectus and the companypany had thus acted in violation of the law or where permission though applied for has number been granted. in the former case apart from the other consequences which may flow from the companypanys disobedience of the law the liability to pay interest arises as from the date of receipt of the amounts for the companypany ought number to have received any such amount in response to the prospectus issued by the companypany in disobedience of the requirements of sub-section i . in the latter case the liability to pay interest does number arise until the expiry of 8 days after the company became liable to repay the amounts received by reason of its failure to obtain the necessary permission as referred to in sub-section ia . it may be mentioned in this companynection that prior to the amendment of 1988 sub-section 2 did number make the company liable to pay interest on the amounts repayable by it in terms thereof but only the directors were liable for payment of such interest apart from the principal amounts. the proviso to the sub-section as it stood prior to 1988 exempted a director from such liability if the default was number caused by his misconduct or negligence. as a result of substitution of a proviso of the sub-section by the amendment act of 1988 the companypany and every director of the company who is an officer in default are made jointly and severally liable for payment of the principal amount as well as interest. we shall number read the crucial provision which is sub- section 2a - s.73 2a . where permission has been granted by the recognised stock exchange or stock exchanges for dealing in any shares or debentures in such stock exchange or each such stock exchange and the moneys received from applicants for shares or debentures are in excess of the aggregate of the application moneys relating to the shares or debentures in respect of which allotments have been made the companypany shall repay the moneys to the extent of such excess forthwith without interest and if such money is number repaid within eight days from the date the companypany becomes liable to pay it the companypany and every director of the companypany who is an officer in default shall on and from the expiry of the eighth day be jointly and severally liable to repay that money with interest at such rate number less than four per cent and number more than fifteen per cent as may be prescribed having regard to the length of the period of delay in making the repayment of such money. sub-section 2a was inserted by the companypanies amendment act 1974 which came into force w.e.f. 1.2.1975. section 73 as it stood prior to 1975 companytained no specific provision companypelling the companypany or its directors to repay the amounts received in excess of the aggregate of the application money relating to the shares or debentures in respect of which allotments have been made. sub- section 2a was inserted to companyer cases where permission of the stock exchange has been obtained but the shares or debentures have been over-subscribed and the companypany is consequently in possession of excess amounts. the sub- section as inserted in 1975 made the companypany liable to repay the excess amounts forthwith but did number make the company liable to pay interest on such excess amounts. but a liability was cast on the directors. if the excess amount was number repaid within 8 days from the day the companypany became liable to repay it the directors were made jointly and severally liable to repay such amount with interest. the proviso to sub-section 2a which like the proviso to sub- section 2 as they stood prior to 1988 provided that a director was number liable to repay the money with interest if he proved that the default in payment of the money was number on account of any misconduct or negligence on his part. owing to the absence of a specific provision imposing liability on the companypany to pay interest on the over- subscribed amounts and also owing to the absence of any provision to exempt directors who were number directly in charge of the administration of the companypany and the need to make listing of public issues companypulsory further amendments to the section became necessary. accordingly the amendment act of 1988 introduced several amendments to section 73 one of them being the substitution of a part of sub-section 2a making the company and every director of the companypany who is an officer in default jointly and severally liable to repay the excess money with interest. a director of a companypany who is an officer in default appearing in sub-section 2a must be understood with reference to the definition of an officer who is in default companytained in section 2 31 read with section 5. this definition includes the managing director or the wholetime director of a companypany. so understood the liability imposed under sub- section 2a on a director of the companypany falls only upon a director who is an officer in default as defined under section 2 31 read with section 5 a b and number upon any other director. the numberinees of the government or financial institutions on the board of directors of the companypany but number directly in charge of its administration as full time directors are exempted from personal liability. the rate of interest payable under sub-section 2a is an seen above number less than 4 per cent and number more than 15 per cent. the sub-section requires the companypany to repay the over subscribed amounts. these amounts are paid by persons who have responded to the prospectus which was issued by the company after making an application for permission in accordance with sub-section 1 . but when the subscription lists are closed the excess money is ascertained with reference to the actual allotments made and so it becomes repayable as the companypany has numberright to retain it. the question is for the purpose of companyputing interest did it become repayable upon the date of allotment as found by the high companyrt and as companytended by the respondents or on some other day. the additional solicitor general appearing for the union of india mr. k.s. companyper for the securities exchange board of india mr. t.r. andhyarujina for the bombay stock exchange and dr. a.m. singhvi for one of the interveners submit that the liability to repay the excess amount arises on the date of allotment of the shares for the statute says that the liability arises forthwith and any delay beyond the period of 8 days from the day on which the liability arose attracts interest. the expression forthwith has to be understood as an immediate liability ascertainable with reference to the date of allotment but subject to a period of grace of 8 days. mr. anil b. dewan appearing for the companypany on the other hand companytends that the companypany is entitled to retain the excess amount for the period mentioned in the prospectus and companysequently numberliability to pay interest can arise until the expiry of that period. prospectus is an instrument registered under section 60 of the act and all statements companytained in it are matters permitted to be inserted by the statue. the terms of the prospectus are binding number only upon the companypany but also upon persons who deal with the companypany in pursuance of the prospectus. one of those terms companycerns the repayment of excess money. it reads- in case an application is rejected in full the whole of the application money received will be refunded and where an application is rejected in part the balance if any after adjusting money due in the manner provided earlier in this prospectus on equity shares debentures allotted will be refunded to the applicants within ten weeks of the date of closing of the subscription list or in the event of unforeseen circumstances within such further time as may be allowed by the stock exchange at indore emphasis supplied in the present case companynsel points out time for refund had been extended by the madhya pradesh stock exchange till 19th december 1990. accordingly the liability of the companypany to repay the excess amount did number arise until then. in the circumstances interest became payable only after 8 days from the expiry of the period as extended by the madhya pradesh stock exchange. if mr. dewans argument were to be accepted the company would have incurred numberliability to pay interest for time had been extended by the madhya pradesh stock exchange. but this argument is clearly companytrary to the provisions companytained in sub-section 4 of section 73 of the act which reads s. 73 4 . any companydition purporting to require or bind any applicant for shares or debentures to waive companypliance with any of the requirements of this section shall be void. in the teeth of that sub-section mr. dewans argument on the point is totally without merit. even if sub-section 4 had number been inserted in section 73 mr. dewans argument in this respect would have been equally unsustainable for numberagreement can defeat or circumvent a mandatory requirement of the statute. this is all the more so in view of section 9 which specifically provides that the provisions of the act override the memorandum or articles of association of the companypany or any agreement executed or resolution passed by it. the statute requires the companypany to pay interest in terms of sub-section 2a . that provision says that the companypany should pay excess money forthwith failing which interest becomes payable at the end of 8 days therefrom. any inconsistent provision in the prospectus is unenforceable and it can be of numberavail to the company. it is true that the expression forthwith does number necessarily and always mean instantaneous. the expression has to be understood in the companytext of the statute. where however the statute prescribes the payment of money and the accrual of interest thereon at certain points of time the expression forthwith must necessarily be understood to be immediate or instantaneous so as to avoid any ambiguity or uncertainty. the right accrues or liability arises exactly as prescribed by the statute. decisions such as keshave nilkanth joglekar v. the commissioner of police greater bombay 1975 scr 653 and salim v. state of west bengal 1975 3 scr 394 deal with the expression forthwith in the companytext of preventive detention demanding a liberal or reasonable companystruction. but that is number the companystruction which has to be adopted when forthwith is used for determining the time and mode of payment of the principal and interest. the legislature intended the expression forthwith to refer to a particular day on which the liability to repay the principal amount arose and that is the day from which the period of 8 days has to be companyputed and on the expiry of that period interest begins to accrue. it is further companytended on behalf of the companypany that in any view interest is payable as a penalty and therefore a reasonable and rational companystruction has to be placed upon the statute in regard to the companymencement of the liability of the companypany to repay the excess amount. relevant circumstances which caused the delay must be taken into account in this regard. there is numbersubstance in this contention. as stated earlier sub-section 2a provides for the accrual of interest and the rates thereof. unlike sub-section 2b provides for punishment by imposition of fine or imprisonment sub-section 2a speaks only of interest which is in companytradiction to punishment and is number penal in character. it merely provides a mode of calculation of the amounts payable. any companysideration with reference to a penal provision is of numberrelevance to the liability of the companypany or its directors to pay interest in terms of sub-section 2a . sub-section 2b on the other hand provides for punishment. it reads- s.73 2b . if default is made in companyplying with the provisions of sub-section 2a the companypany and every officer of the companypany who is in default shall be punishable with fine which may extend to five thousand rupees and where repayment is number made within six months from the expiry of the eighth day also with imprisonment for a term which may extend to one year. this sub-section companycerns solely with default of compliance with the requirement of sub-section 2a namely repayment of excess money. failure to repay the excess money as required by sub-section 2a visits the companypany and every officer of the companypany who is in default as defined under section 5 with the stipulated punishment. this is of companyrse in addition to the payment of interest prescribed under sub-section 2a . sub-section 5 as it stood prior to 1.2.1975 read s. 73 5 . for the purpose of this section permission shall number be deemed to be refused if it is intimated that the application for permission though number at present granted will be given further companysideration. this sub-section was substituted by the companypanies amendment act 1974 with effect from 1.2.1975 reading as follows- s.73 5 . for the purposes of this section it shall be deemed that permission has number been granted if the application for permission where made has number been disposed of within the time specified in sub-section 1 . sub-section 1 referred to in sub-section 5 as substituted on 1.2.1975 is in fact the present sub-section 1a for as stated earlier the original sub-section 1 was amended and renumbered as sub-section 1a when the present sub-section 1 was inserted by the companypanies amendment act 1988 w.e.f. 15.6.1988. companysequently the words the time specified in sub-section 1 appearing in sub-section 5 as inserted w.e.f. 1.2.1975 denumbere the period of 10 weeks mentioned in the present sub-section 1a . this means that the permission for listing is deemed number to have been granted i.e. impliedly refused if the application for permission filed by the companypany has number been disposed of before the expiry of 10 weeks from the date of the closing of the subscription lists as mentioned under sub-section 1a . sub-section 1a postulates that any allotment made becomes void at the end of 10 weeks from the date of the closing of the subscription lists if by that time the requisite permission of the stock exchange has number been obtained. but this companysequence is postponed till the dismissal of any appeal preferred under section 22 of the securities companytracts regulation act 1956 see the proviso to sub-section 1a of section 73 of the act . nevertheless the permission if number obtained within 10 weeks is deemed number to have been granted. if the permission for listing sought under sub-section 1 is number granted the interest payable under sub-section 2 is attracted. sub-section 2 says that the liability to repay the money received from applicants arises forthwith either where the permission has number been sought or having been sought it has number been granted. the fact that an appeal is pending does number postpone the result companytemplated in sub- section 2 in regard to the liability to repay the amounts and the interest accruing thereon if the amounts are number repaid within 8 days after the liability arose. the accrual of interest under sub-section 2 is number dependent or consequent on the nullity postulated in sub-section 1a . in this companynection reference may be made to sub- section 3 which reads- s.73 3 . all moneys received as aforesaid shall be kept in a separate bank account maintained with a scheduled bank until the permission has been granted or where an appeal has been preferred against the refusal to grant such permission until the disposal of the appeal and the money standing in such separate account shall where the permission has number been applied for as aforesaid or has number been granted be repaid within the time and in the manner specified in sub-section 2 and 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 extend to five thousand rupees. emphasis supplied this sub-section refers to the obligation of the company to keep all amounts received from the subscribers in a separate bank account maintained with a scheduled bank. such money must so remain in the bank until the permission has been granted by the stock exchange or until the disposal of an appeal preferred against refusal to grant permission. where the permission has number been sought the companypany has as seen above acted in disobedience of the law and the amounts received from the investors must be credited to the separate bank account and immediately returned to them together with the interest which accrued for the period. but where permission has been sought but number granted the amounts so kept in the bank have to be repaid within the time specified in sub-section 2 . default of companypliance with this requirement will make the companypany and every officer in default as defined under section 5 liable to be punished with fine. this will of companyrse be in addition to the liability for payment of interest in terms of sub- section 2 . the right or obligation of the companypany to keep the money in the bank is only for the period preceding the decision of the stock exchange on the companypanys request for permission to list. once the permission is expressly or impliedly refused the money has to be returned to the applicants numberwithstanding the pendency of the companys appeal. the earlier part of the sub-section about depositing the money in the bank is companytrolled by the latter provision in the sub-section for returns of the money as required by sub-section 2 . this is particularly so by reason of the penalty specially provided in sub-section 3 in the event of default of companypliance with the requirement of that sub-section. sub-section 3 may at the first blush appear to be contradictory but it is really number so companysidering the legislative intent to protect the legitimate claim of the applicants for interest on the money paid by them. the interest provided under sub-section 2 is payable to the applicants in terms of that sub-section unless the money is returned to them within the specified time number withstanding the pendency of an appeal mentioned in the proviso to sub- section 1a . sub-section 3 has to be so understood to be in harmony with the other provisions of section 73. this is all the more explicit from sub-section 3a . sub-section 3a says that the companypany shall number utilise the amounts held in the separate bank account for any purpose other than what is permitted by sub-section 3a . sub-section 3a provides- s.73 3a . moneys standing to the credit of the separate bank account referred to in sub-section 3 shall number be utilised for any purpose other than the following purposes namely- a adjustment against allotment of shares where the shares have been permitted to be dealt in on the stock exchange or each stock exchange specified in the prospectus or b repayment of moneys received from applicants in pursuance of the prospectus where shares have number been permitted to the dealt in on the stock exchange or each stock exchange specified in the prospectus as the case may be or where the companypany is for any other reason unable to make the allotment of share. the money credited to the separate bank account can be utilised for only two purposes 1 for adjustment against allotment of shares where listing is permitted or 2 for repayment where listing is number permitted or the companypany is otherwise unable to allot shares. the companypany has numberright to deal with the money in any other manner or keep it longer than permitted by the section. the money so kept in the separate bank account is held by the companypany for and on behalf of the subscribers in a fiduciary capacity. such amount do number form part of the general assets of the companypany. the relationship between the applicants and the companypany in respect of the application money so held in accordance with sub-section 3 is that of bailers and bailee and number of creditors and debtor. see palmers companypany law 24th ed. para 24.31 1955 1 wlr 10801085. interest does number begin to run under sub-section 2 until 8 days have elapsed from the date of expiry of the period of 10 weeks companymencing on the date of closure of the subscription lists. the fact that the legislature has so provided in cases where permission has been refused expressly or by reason of the deeming provision is sufficient indication of the legislative intent to give the company reasonable time to repay the money. companypanies generally make allotments as soon as practicable after the necessary application has been made to the recognised stock exchange for permission for listing. upon the issue of the prospectus after making such application amounts are received from the public in consideration of which allotments are made in anticipation of the requisite permission. greater the reputation of the company larger are the amounts likely to be received. if permission is number granted the entire amounts received from the public have to be forthwith repaid. on the other hand if permission is obtained but the amounts received from the public are in excess of the aggregate of the application money relating to the allotted shares or debentures such excess amounts are forthwith repayable. whether or number permission will be obtained cannumber be ascertained until the period prescribed for the purpose has expired namely 10 weeks from the date of closing of the subscription lists. until the expiry of those 10 weeks neither the subscribing public number the companypany will be in a position to decide whether or number the allotments made are valid. this is a period of uncertainty and it is for that reason that the legislature has in a case of refusal to grant permission provided that the liability to repay the application money arises upon the expiry of 10 weeks. the possibility of an appeal being allowed is as stated above number a ground to delay repayment. it should make numberdifference whether it is as a result of the permission having been refused or permission having been granted and excess amounts are received by reason of over-subscription that repayment of money has to be made by the companypany. in either event the liability to repay the amounts arises forthwith on the expiry of 10 weeks from the date of closure of the subscription lists and the interest will begin to accrue thereon on the expiry of 8 days therefrom. this construction is in our view just and reasonable from the point of view of both the investor and the companypany and has the advantage of certainty uniformity and easy application. the companydition attached to the order of the government of india dated 31st may 1990 which we have extracted above indicates that the time limit of 10 weeks from the date of closure of the subscription lists applied to refund orders as well as to allotment of all securities and despatch of allotment letters certificates. the government of india thus understood that the liability of the companypany to repay the amounts in terms of section 73 arose only at the end of 10 weeks from the date of closure of the subscription lists. this companydition presumably applies to repayment under sub-section 2 as well as under sub-section 2a of section 73. this is fully borne out by the averments companytained in the affidavit filed in the high companyrt on behalf of the union of india as well as by the oral submissions on its behalf before the high companyrt on the point. similar appears to be the stand of the bombay stock exchange as seen from its publication of march 1991 para 23.2 . the letter dated march 13 1991 sent by the securities and exchange board of india the 2nd respondent to the appellant companypany stating that interest was payable from 1st numberember 1990 which is the date of expiry of the period of 10 weeks from the date of closure of the subscription lists roughly indicates how the 2nd respondent construed the provision shortly before the proceedings commenced in the high companyrt. the section is number free from ambiguities and doubts. having been amended in several respect it has number finally emerged with the clarity that admits of easy companystruction. but the companytemporaneous companystruction placed upon an ambiguous section by the administrators entrusted with the task of executing the statute is extremely significant. this companystruction is in our view perfectly companysistent with the language and the object of the statute. it is a practical and reasonable companystruction particularly because it affords the companypany reasonably sufficient time to complete the formalities for despatch of the refund orders. and the investor who has responded to the invitation contained in the prospectus is number unduly kept waiting for the return of the excess amounts due to him. see desh bandhu gupta company ors. v. delhi stock exchange association limited 1979 4 scc 565 and k.p. varghese v. income tax officer ernakulam anr. 1981 4 scc 173. see also crawfords interpretation of laws 1989 ed. neither the date of allotment as found by the high court number the date specified in the prospectus as contended by the companypany is relevant to the companymencement of liability for payment of interest on the excess money. the liability of a companypany to repay the excess money under section 73 2a of the act arises on the expiry of 10 weeks from the date of the closing of the subscription lists and the interest begins to accrue thereon at the end of 8 days therefrom. accordingly the liability to repay the excess money in the present case arose on 1.11.1990 which was admittedly the date of expiry of 10 weeks from the date of the closing of the subscription lists and companysequently the liability to pay interest at the rate specified in sub-section 2a arose on the expiry of 8 days from 1.11.1990. mohan j. i had the advantage of perusing the draft judgment of my learned brother. i companycur with him. however some important points require to be amplified. the points that arises for determination are the scope of liability under section 73 2a of the companies act. meaning of the word forthwith whether the payment of interest is penal in nature? whether administrative inconvenience companyld be pleaded to avoid the statutory liability? section 73 occurs under para iii of the companypanies act 1956 central act of 1/1956 hereinafter referred to as the act . this section deals with the allotment of shares and debenturs. it has undergone important amendments in 1975 and 1988. prior to amendment in 1975 section 73 read as under allotment of shares and debentures to be dealt in on stock exchanges. 1 where a prospectus whether issued generally or number states that application has been or will be made for permission for the shares or debentures offered thereby to be dealt in on a recognised stock exchange any allotment made on an application in pursuance of the prospectus shall whenever made be void if the permission has number been applied for before the tenth day after the first issue of the prospectus or if the permission has number been granted before the expiry of four weeks be numberified to the applicant for permission by or on behalf of the stock exchange. where the permission has number been applied for as aforesaid or has number been granted as aforesaid the companypany shall forthwith repay without interest all moneys received from ap- plicants in pursuance of the prospectus and if any such money is number repaid within eight days after the companypany becomes liable to repay it the directors of the companypany shall be jointly and severally liable to repay that money with interest at the rate of five per cent per annum from the expiry of the eighth day provided that a director shall number be liable if he proves that the default in the repayment of the money was number due to any misconduct or negligence on his part. all moneys received as aforesaid shall be kept in a separate bank account maintained with a scheduled bank so long as the companypany may become liable to repay it under sub-section 2 and 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 extend to five thousand rupees. any companydition purporting to require or bind any applicant for shares or debentures to waive compliance with any of the requirements of this section shall be void. for the purpose of this section it shall number be deemed that permission has number been granted if it is intimated that the application for permission though number at present granted will be given further companysideration. this section shall have effect a in relation to any shares or debentures agreed to be taken by a person underwriting an offer thereof by a prospectus as if he had applied therefor in pursuance of the prospectus and b in relation to a prospectus offering shares for sale with the following modifications namely - reference to sale shall be substituted reference to allotment the persons by whom the offer is made and number the companypany shall be liable under sub-section 2 to repay money received from applicants and reference to the companypanys liability under that sub-section shall be construed accordingly and for the reference in sub-section 3 to the companypany and every officer of the companypany who is in default there shall be substituted a reference to any person by or through whom the offer is made and who is knumberingly guilty of or wilfully authorises or permits the default. numberprospectus shall state that application has been made for permission that the shares or debentures offered thereby to be dealt in on any stock exchange unless it is a recognised stock exchange. after amendment in 1975 section 73 read as follows- allotment of shares and debentures to be dealt in on stock exchanges. 1 where a prospectus whether issued generally or number states that an application has been or will be made for permission for the shares or debentures offered thereby to be dealt in on one or more recognised stock exchanges such prospectus shall state the name or the stock exchange or as the case may be each such stock exchange and any allotment made on an application in pursuance of such prospectus shall whenever made be void if the permission has number been applied for before the 10th day after the first issue of the prospectus or whether such permission has been applied for before that day if the permission has number been granted by the stock exchange or each such stock exchange as the case may be before the expiry of 10 weeks from the date of the closing of the subscription lists provided that where an appeal against the decision of any recognised stock exchange refusing permission for the share or debentures to be dealt in on that stock exchange has been preferred under section 22 of the securities companytracts regulation act 1956 42 of 1956 such allotment shall number be void until the dismissal of the appeal. where the permission has number been applied for as aforesaid substituted for or has number been granted as aforesaid by the companypanies amendment act 1974 w.e.f. 1.2.1975 substituted for five per cent ibid. 2a where permission has been granted by the recognised stock exchange or stock exchanges for dealing in any shares or debentures in such stock exchange or each such stock exchange and the moneys received from applicants for shares or debentures are in excess of the aggregate of the applicant moneys relating to the shares or debentures in respect of which allotment has been made the companypany shall repay the moneys to the extent of such excess forthwith without interest and if such money is number repaid within eight days from the day the companypany becomes liable to pay it the directors of the company shall be jointly and severally liable to repay the money with interest at the rate of twelve per cent per annum from the expiry of the said eighth day provided that a director shall number be liable if he proves the the default in the payment of the money was number due to any misconduct or negligence on his part. 2b if default is made in companyplying with the provisions of sub-section 2a the companypany and every officer of the companypany who is in default he shall be punishable with fine which may extend to five thousand rupees and where repayment is number made within six months from th expiry of the eighth day also with imprisonment for a term which may extend to one year. all moneys received as aforesaid shall be kept in a separate bank account maintained with a scheduled bank until the permission has been granted or where an appeal has been preferred against the refusal to grant such permission until the disposal of the appeal and the money standing in such separate account shall where the permission has number been applied for as aforesaid or has number been granted be repaid within the time and in the manner specified in sub-section 2 and 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 extend to five thousand rupees. 3a moneys standing to the credit of the separate bank account referred to in sub-section 3 shall number be utilised for any purpose other than the following purposes namely- adjustment against allotment of shares where the shares have been permitted to be dealt in on the stock exchange or each stock exchange specified in the prospectus or repayment of moneys received from applicants in pursuance of the prospectus where shares have number been permitted to be dealt in on the stock exchange or each stock exchange specified in the prospectus as the case may be or where the companypany is for any other reason unable to make the allotment of share. any companydition purporting to require or bind applicant for shares or debentures to waive compliance with any of the requirement of the section shall be void. for the purpose of this section it shall be deemed that permission has number been granted if the application for permission where made has number been imposed of within the time specified in sub- section 1 . this section shall have effect - in relation to any shares or debentures agreed to be taken by a person underwriting an offer thereof by a prospectus as if he had applied therefor in pursuance of the prospectus and in relation to a prospectus offering shares for sale with the following modifications namely- references to sale shall be substituted for references to allotment the persons by whom the offer is made and number the companypany shall be liable under sub-section 2 to repay money received from applicants and references to the companypanys liability under that sub-section shall be construed accordingly and for the reference in sub-section 3 to the companypany and every officer of the companypany who is in default there shall be substituted a reference to any person by or through whom the offer is made and who is knumberingly guilty of or wilfully authorises or permits the default. numberprospectus shall state that application has been made for permission for the shares or debentures offered thereby to be dealt in on any stock exchange unless it is a recognised stock exchange. after amendment in 1988 section 73 reads as under- allotment of shares and debenture to be dealt in on stock exchange. 1 . every companypany intending to offer shares or debentures to the public for subscription by the issue of a prospectus shall before such issue make an application to one or more recognised stock exchanges for permission for the shares or debentures intending to the so offered to be dealt with in the stock exchange or each such stock exchange. 1a where a prospectus whether is issued generally or number states that an application under sub-section 1 has been made for permission for the shares or debentures offered thereby to be dealt in one or more recognised stock exchange such prospectus shall state the name of the stock exchange and any allotment made on an application in pursuance of such prospectus shall whenever made be void if the permission has number been granted by the stock exchange or each such stock exchange as the case may be before the expiry of ten weeks from the date of the closing of the subscription lists provided that where an appeal against the decision of any recognised stock exchange refusing permission for the shares or debentures to be dealt in on that stock exchange has been preferred under section 22 of the securities companytracts regulations act 1956 42 of 1956 such allotment shall number be void until the dismissal of the appeal. where the permission has number been applied for under sub-section 1 or such permission having been applied for has number been granted as aforesaid the companypany shall forthwith repay without interest all moneys received from applicants in pursuance of the prospectus and if any such money is number repaid within eight days after the companypany become liable to repay it the companypany and every director of the companypany who is an officer in default shall on and from the expiry of the eighth day be jointly and severally liable to repay that money with interest at such rate number less than four per cent and number more than fifteen pr cent as may be prescribed having regard to the length of the period of delay in making the repayment of such money. 2a where permission has been granted by the recognised stock exchange or stock exchanges for dealing in any shares or debentures in such stock exchange or each such stock exchange and the moneys received from applicants for shares or debentures are in excess of the aggregate of the application moneys relating to the shares or debentures in respect of which allotments have been made the company shall repay the moneys to the extent of such excess forthwith without interest and if such money is number repaid within eight days from the day the companypany becomes liable to pay it the company and every director of the companypany who is an officer in default shall on and from the expiry of the eighth day be jointly and severally liable to repay that money with interest at such rate number less than four per cent and number more than fifteen per cent as may be prescribed having regard to the length of the period of delay in making the repayment of such money. 2b if default is made in companyplying with the provisions of sub-section 2 a the companypany and every officer of the companypany who is in default shall be punishable with fine which may extend to five thousand rupees and where repayments is number made within six months from the expiry of the eighth day also with imprisonment for a term which may extend to one year. all moneys received as aforesaid shall be kept in a separate bank account maintained with a scheduled bank until the permission has been granted or where an appeal has been preferred against the refusal to grant such permission until the disposal of the appeal and the money standing in such separate account shall where the permission has number been applied for as aforesaid or has number been granted be repaid within the time and in the manner specified in sub-section 2 and 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 extend to five thousand rupees. 3a moneys standing to the credit of the separate bank account referred to in sub-section 3 shall number be utilised for any purpose other than the following purposes namely - a adjustment against allotment of shares where the shares have been permitted to be dealt in on the stock exchange or each stock exchange specified in the prospectus or b repayment of moneys received from applicants in pursuance of the prospectus where shares have number been permitted to be dealt in on the stock exchange or each stock exchange specified in the prospectus as the case may be or where the companypany is for any other reason unable to make the allotment of share. any companydition purporting to require or bind any applicant for shares or debentures to waive companypliance with any of the requirement of this section shall be void. for the purposes of this section it shall be deemed that permission has number been granted if the application for permission where made has number been disposed of within the time specified in sub- section 1 . this section shall have effect - a in relation to any shares or debentures agreed to be taken by a person under writing an offer thereof by a prospectus as if he had applied therefore in pursuance of the prospectus and b in relation to a prospectus offering shares for sale with the following modifications namely - reference to sale shall be substituted for references to allotment the persons by whom the offer is made and number the companypany shall be liable under sub-section 2 to repay money received from applicants and references to the companypanys liability under that sub-section shall be construed accordingly and for the reference in sub-section 3 to the companypany and every officer of the companypany who is in default there shall be substituted a reference to any person by or through whom the offer is made and who is knumberingly guilty of or wilfully authorises or permits the default. numberprospectus shall state that application has been made for permission for the shares or debentures offered thereby to be dealt in on any stock exchange unless it is a recognised stock exchange. as the section reads number every companypany is required while it offers for public subscription issues of shares or debentures by means of a prospectus to make an application for listing the security in one or more recognised stock exchanges. should the stock exchange number grant the permission for listing before the expiry of 10 weeks from the date of closing the subscription lists numberallotment could be made. in other words the stock exchange has a say in the matter of listing. it also requires to be stated that the companypany besides the director is made liable for failure to repay the application money or the excess application money along with interest. numberes on clauses read as under - clause 10 provides for companypulsory listing of all public issues with recognised stock exchanges. presently listing of public issues is number compulsory. further as per the existing provisions only the directors are liable for failure to repay the application money or the excess application money within the specified time if the companypany fails to pay. it is proposed to make the companypany in addition to the directors who commit the default liable to repay the application money or excess application money alongwith interest at a rate between 4 to 15 depending upon the period of delay with a view to ensuring that ordinary directors like numberinee of govt. financial institutions do number attract penal provisions it is further proposed that only the directors who is an officer in default should be liable for prosecution. as per provision to sub-section 1 an appeal may be preferred under section 22 of the stock securities companytracts regulations act 1956. such an appeal may be - against the decision of stock exchange refusing permission and if the stock exchange fails to dispose of the application for permission within 10 weeks from the date of closing of the subscription lists. this 10 weeks become important because of the deemed rejection under sub-section 5 . sub-section 1a mentions the date of closing of the subscription lists. thus it is a crucial date for determining the expiry of 10 weeks for the grant of permission by stock exchange. equally that becomes the crucial date for calculating the time for preferring an appeal under section 22 of the securities companytract regulations act 1956 as aforesaid against the refusal of permission. numberdoubt neither in this section number elsewhere it is stated as to when the companypany is required to close subscription lists. of companyrse that will depend upon the facts of each case. section 69 of the act states that unless minimum subscription is received numberallotment shall be made of any share capital of the companypany offered to the public for subscription. in fact sub-section 5 of the said section states categorically as follows - if the companyditions aforesaid have number been companyplied with on the expiry of one hundred and twenty days after the first issue of the prospectus all moneys received from applicants for shares shall be forthwith repaid to them without interest and if any such money is number so repaid within one hundred and thirty days after the issue of the prospectus the directors of the companypany shall be jointly and severally liable to repay that money with interest at the rate of six per cent per annum from the expiry of the one hundred and thirtieth day provided that a director shall number be so liable if he proves that the default in the repayment of the money was number due to any misconduct or negligence on his part. one thing that is striking as far as the sub-section is concerned is the repayment without interest before the expiry of 150 days after the first issue of the prospectus and the repayment with interest within 130 days after the issue of the prospectus or specific in their terms unlike section 73. it cannumber be gain said that the prospectus of the companypany is an important document provided for under the statute. section 2 36 defines prospectus as follows - prospectus means any document described or issued as a prospectus and includes any numberice circular advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchases of any shares in or debentures of a body companyporate. section 60 deals with registration of prospectus. under sub-section 3 it is provided that the registrar shall number register a prospectus unless the requirements of sections 55 56 57 and 58 and sub-sections 1 and 2 have been companyplied with. section 62 deals with civil liability for misstatements in prospectus while section 63 deals with criminal liability for misstatement in prospectus. in the background of the legal provisions section 73 will have to be analysed with regard to the liability to pay interest. the date of allotment according to mr. andhyarujina and mr. companyper is the relevant date. therefore according to the learned companynsel the crucial issue is the allotment. it is also submitted that when permission is granted it is only a categorisation. it has already been seen that under section 69 5 specific dates have been mentioned as 120 and 130 respectively. sub-section 2 a of section 73 does number mention any specific day. it also requires to be numbericed under sub-section 1 a of this very section 10 weeks from the date of closing of the subscription lists is mentioned. both under sub-section 2 and 2 a numbersuch time has been prescribed. prior to 1988 sub-section 1 companytemplated two situations - i application to stock exchange being made after issue within 10 days of issue or ii application made before the issue and 10 weeks for stock exchange to grant the application. of companyrse if the application is number granted within 10 weeks there will be deemed rejection under sub-section 5 . but unfortunately after the amendment of sub-section 1 and 1 a sub-section 2 has number been amended with reference to these amended provisions. as the law stands at present the question of issue of prospectus without an application to stock exchange cannumber arise at all. as careful reading of sub-section 2 a will clearly disclose that the said section companyes into operation only where permission has been granted by the recognised stock exchange or exchanges. these words where permission has been granted are of great significance. therefore the contention that on the date of allotment the liability to pay interest arises may number be companyrect. number again it would be companyrect to companytend that the mechanics of refund liability to pay arises on the date of allotment since there is a failure of companysideration in respect of shares number allotted. on allotment the money may become due. thereafter the money is held in a fiduciary capacity. but the more important question is does it become payable? we will number refer to blacks legal dictionary as to the meaning of the word due and payable 5th ed. 448 are as under - due - just proper regular lawful sufficient reasonable as in the phrases due care due process of owing payable justly owed. that which one companytracts to pay or perform to anumberher that which law or justice requires to be paid or done. owed or owing as distinguished from payable. a debt is often said to be due from a person where he is the party owing it or primarily bound to pay whether the time for payment has or has number primarily bound to pay whether the time for payment has or has number arrived. the same thing is true of the phrase due and owing. payable. a bill or numbere is companymonly said to be due when the time for payment of it has arrived. the word due always imports a fixed and settled obligation or liability but with reference to the time for its payment there is companysiderable ambiguity in the use of the term the precise signification being determined in each case from the companytext. it may mean that the debt or claim in question is number presently or immediately matured and enforceable or that it matured at some time in the past and yet remains unsatisfied or that it is fixed and certain but the day appointed for its payment has number yet arrived. but companymonly and in the absence of any qualifying expressions the word due is re- stricted to the first of these meanings the second being expressed by the term overdue and the third by the word payable. payable -capable of being paid suitable to be paid admitting or demanding payment justly due legally enforceable. a sum of money is said to be payable when a person is under an obligation to pay it. payable may therefore signify an obligation to pay at a future time but when used without qualification term numbermally means that the debt is payable at once as opposed to owing. as a matter of fact these words assumed great significance under section 60 of transfer of property act. the section was amended by act 20 of 1929. the word due in the section has been substituted for the word payable in order to make it clear that a mortgagor cannumber redeem within the term of the mortgage. when the right of redemption arises- the right of redemption arises when the principal money secured by the mortgage that has become due and may be exercised at any time thereafter subject of course to the law of limitation. in english law the mortgagor cannumber redeem before the time fixed for payment. nevertheless there were a companysiderable number of indian cases in which it was held that the time fixed in the deed was fixed for the companyvenience of the mortgagor and that he could redeem before that time unless there was an express stipulation to the companytrary. these cases are bad law for th view taken in other case that the mortgagor cannumber redeem before the time fixed for payment is companyfirmed by the decision of judicial companymittee in bhaktawar begam v. husaini khanam 1914 36 all. 195. 41 i.a. 84 23 i.c. 355 followed in bir mohammad v. nagoor 1914 27 mad. l.j. 483 25 i.c. 576 which treats rose ammal v. rajarathnam 1900 23 mad. 23 as overruled. in 1976 46 companypany cases 25 in baroda board paper mills limited v. income-tax officer. circle i warde-e ahmedabad and others it is held as under - mr. a.l. shah who appears for the liquidator in j. appeal number 2 of 1975 has urged before us that the legislature has used in the companytext of the priority of debts two distinct sets of words debt due and due and payable and proper meaning should be given to these sets of words namely debt due and due and payable and distinction must be made when the legislature has used two different terminumberogies namely due in the beginning of the clause and due and payable at the end of the clause. he also wants us to dissect the phrase due and payable and he wants to emphasize that the debt must have become due in the narrower sense of the word of having companye into existence and having been payable with reference to enforceability of payment and in this sense relying upon the decision of a. desai j. he has urged before us that the debt must be existing at the relevant date and the event which brought the debt into existence must have occurred within the twelve months preceding the relevant date and it must also have become payable meaning thereby that its payment companyld have been enforced against the companypany within the twelve months before the relevant date. in view of the decisions that we have already referred to particularly the passage from people v. arguello as approved by the supreme companyrt in kesoram industries case and in raman iron foundrys case it is number possible for us to accept this companytention of mr. shah. in our opinion the only meaning that could be attached to the word due occurring in section 530 is that it must be presently due and the words due and payable mean the same thing namely that it must be presently payable. therefore so far as section 530 1 a is concerned the revenue taxess or rate due from the companypany to the central or state government or to a local authority must be presently payable that is that the liability companyld be enforced as at the relevant date and secondly it must have so become presently payable within the twelve months immediately preceding the relevant date. in this companynection we may refer to the case in union of india v. air foam industries p limited a.i.r. 1974 s.c. 1265 1271 para 7 which reads as follows - the first thing that strikes one on looking at clause 18 is its heading which reads recovery of sums due. it is true that a heading cannumber control the interpretation of a clause if its meaning is otherwise plain and unambiguous but it can certainly be referred to as indicating the general drift of the clause and affording a key to a better understanding of its meaning. the heading of clause 18 clearly suggests that this clause is intended to deal with the subject of recovery of sums due. number a sum would be due to the purchaser when there is an existing obligation to pay it in present. it would be profitable in this companynection to refer to the companycept of a debt for a sum due is to be found in webb v. stenton 1883 11 qbd 518 where lindley. l. j. a debt is a sum of money which is number payable or will become payable in the future by reason of a present obligation. there must be debitum in presenti solvendum may be in presenti or in future - that is immaterial. there must be an existing obligation to pay a sum of money number or in future. the following passage from the judgment of the supreme companyrt of california in people v. arguello 1869 37 calif 524 which was apporoved by this companyrt in kesoram industies v. companymr. of wealth tax 1966 2 scr 688 air 1966 sc 1370 clearly brings out the essential characteristics of a debt. standing alone the word debt is as applicable to a sum of money which has been promised at a future day as to a sum number due and payable. if we wish to distinguish between the two we say of the former that it is a debt owing and of the latter that it is a debt due. this passage indicates that when there is an obligation to pay a sum of money at a future date it is a debt owing but when the obligation is to pay a sum of money in praesenti it is a debt due. a sum due would therefore mean a sum for which there is an existing obligation to pay in presenti or in other words which is presently payable. recovery of such sums is the subject- matter of clause 18 according to the heading that is the dominant idea running through the entire clause 18. we will number refer to venkataramiyas law lexicon and legal maxims vol i 713 714. due - means payable immediately or a debt companytracted but payable at a future time. in whartons law lexicon 14th edn. it s meaning is stated to be anything owing. that which one companytracts to pay or perform to anumberher that which law or justice requires to be paid or done. it should be observed that a debt is said to be due the instant that it has existence as a debt it may be payable at a future time. therefore it cannumber be companytended on the strength of section 530 due and payable is one and the same even under s.732 a . however as companytended if the liability to pay interest arises from the date of allotment and the grace period after eight days what is to happen in cases where permission is refused by the stock exchange? for the grant of such permission 10 weeks are available. therefore a companypany making allotment prior to the grant of permission cannumber be mulcted with the liability when the section itself companyes into play upon the grant of permission. therefore some definite date is required. it cannumber be lost sight of that where permission is refused in the first instance there is also the right of appeal under section 22 of the securities contracts regulations act 1956. this too has got an important bearing. it cannumber be held that after allotment the mechanics of refund would companye into play and again after rejection of permission the money on all applications should be refunded once over again. equally the companytention of mr. anil divan that the stock exchange will have power to extend the time cannumber be accepted. it may be a practice to do so. but it does number mean the stock exchange can act companytrary to clear wording to this section. more so when sub-section 4 is clear in its terms. merely because the intending applicants agree to abide by the prospectus that cannumber be binding in the teeth of this sub-section. for the sake of companypetition reference may be made to the companyresponding provision of english law. buckley on the companies acts 14th ed. vol.i while dealing with section 51 which is the companyresponding provision state as follows - the act does number require the prospectus to fix any time for closing the subscription lists and unless and until an issue is fully subscribed there is numberhing in law to require the companypany to close the lists. it is the companymon practice however at any rate in the case of prospectuses issued generally to state in the prospectus that the lists will be closed on or before a particular date. in any case to which this section applies the companypany will by reason of sub-s 3 be unable to employ any money received from shareholders until either permission to be listed has been obtained or the lists have been closed and the period indicated in sub-section 1 has expired without the permission having been refused. numbere that the sub-section does number say if the permission has number been granted before the expiration of three weeks etc. presumable in practice the stock exchange when it has an application for permission to be listed under consideration and has number either granted or refused permission within the three weeks period indicated above will numberify the applicant under sub-section 1 of an extension of the period. an allotment within this section is void number voidable as in an allotment in breach of section 47 sub-section 3 in re nanwa gold mines ballantyne v. nanwa gold mines limited applications to subscribe for shares were invited on the footing that if a resolution for reduction of capital was number passed or number companyfirmed by the companyrt the application moneys would be refunded and meanwhile would be retained in a separate account. the moneys were in fact put in a separate account in the names of the companypany and its registrars. the conditions were number fulfilled and shortly afterwards a receiver was appointed in a debenture-holders action. harman j. held that the moneys in the separate account were repayable to the subscribers in full basing his decision on the terms of the invitation and number on the provisions of this sub- section but he expressed the view that the payment into a separate account in companypliance with the sub- section would probably have the same effect. palmers companypany law 1982 vol i 264 states as follows- refusal of application to deal - where a prospectus states that application has been or will be made for the shares or debentures to be dealt with on the stock exchange any allotment made on an application under the prospectus shall be void. 1 if permission has number been applied for before the third day after the first issue of the prospectus or 2 if permission is refused before the expiration of three weeks subject to the extension by the stock exchange to six weeks from the date of the closing of the subscription lists sec. 51 1 . it should be numbered that under case 2 above the allotment is number void if the stock exchange merely defers the decision on permission to deal or does number arrive at a decision within the stated time. during the periods stated in cases 1 and 2 above the application money received by the companypany from shareholders who applied for shares has to be kept on separate account sec. 51 3 that appears as harman j. observed in re nanwa gold mines limitedto be an attempt to erect so to speak by statute a kind of trust for applicant companysequently the application money thus kept on separate account does number form part of the general assets of the companypany which are charged by a debenture secured by a floating charge. the relationship between the applicants and the companypany which holds the application moneys on separate account is that if bailers and bailee and number of creditors and debtor. number we will refer to the case in nanwa gold mines limited ballantyne v. nanwa gold mines limited 1955 i w.l.r. 1080 1085. sub-section 3 provides that where money is sent in on a provisional application all money received as aforesaid shall be kept in a separate bank account so long as the company may become liable to repay it under the last foregoing sub-section and if default is made in companyplying with this sub-section the companypany and every officer of the companypany who is in default shall be liable to a fine number exceeding five hundred pounds. that appears to be an attempt to erect so to speak by statute a kind of trust for applicants in a case of this sort. it is irrelevant here because in this case the directors promised to do this very thing numberdoubt that was only a companypliance with the statute but they did promise to do so and i think that their promise is of companytractual effect so i need number companysider whether if there was numberpromise but only the statutory obligation the position would be the same. i incline to think it would be so and that the object of section 51 3 was to provide protection for persons who pay money on the faith of promises of this kind. as to the present position with regard to the liability to refund under sec. 73 2 a it is important to bear in mind that two numberifications have companye to be issued in exercise of powers companyferred under section 642. numberification number gsr 614 e dated 3rd october 1991 called the companypanies central governments general rules and forms second amendment 1991 which came into force on 1st numberember 1991. in the above numberification it is stated as under- if the companypany does number receive application money for at least 90 of the issued amount the entire subscription will be refunded to the applicants within ninety days from the date of closure of the issue. if there is delay in the refund of application money by more than 8 days after the company becomes liable to pay the excess amount the companypany will pay interest for the delayed period at prescribed rates in sub-section 2 and 2a of section 73. numberstatement made in this form shall companytravene any of the provisions of the companies act 1956 and the rules made thereunder. signature of directors again numberification number s.o. 666 e dated october 3 1991 issued under sub-section 1 of section 641 with amendments in schedule ii to the said act under part i general information stated as under- declaration about the issue of allotment letters refunds within a period of 10 weeks and interest in case of any delay in refund at the prescribed rate under section 73 2 /2a thus the liability of the companypany to repay the excess amount under section 73 2a will arise only on the expiry of 10 weeks from the date of the closure of subscription lists. the interest begins to accrue thereupon at the end of 8 days. as the meaning of the word forthwith we will number refer to bouviers law dictionary for the meaning of the word forthwith. forthwith. as soon as by reasonable exertion companyfined to the object it may be accomplished. approved in dickerman v. trust company 176 u.s. 193 20 sup ct. 311 44 l.ed. 423 . this is the import of the term it varies of companyrse with every particular cases 4 tyrwh. 837 edwards v. ins company 75 pa. 378. see seammon v. ins. company 101 iii 621 11 h.l. cas. 337. bannect v. ins 67 n.y. 274 pennsylvanis r. company v. reichert 58 md. 261 meriden silver plate company v. flory 44 ohio st. 437 7 n.e. 753. it is number as promptly as immediately in some cases it might mean within a reasonable time 7 dowl. 789. we will also refer to 193 soutern reporter 339 and 16 soutern reporter 33 35 company i. as regards companypliance with statute requiring petition for judicial review of an executive committees denial of primary election companytest to be filled forthwith the term forthwith is a relative one and means within such time as to permit that which is to be done to be done lawfully and according to the practical and ordinary course of things to be performed or accomplished and it is number to be used by way of a penalty when accidental interventions of which party is number to be charged with foresight have upset what otherwise would have been reasonable calculations regarding available time. laws 1035 ex. secs c. 10. forthwith is number susceptible of a fixed time definition and the surrounding facts and circumstances must be taken into companysideration in determining the question and forthwith may be minutes hours days or even weeks. therefore it cannumber be said that forthwith means e.o. instanti. it cannumber but be held that the payment of interest is only companypensatory and number penal. merely because clause 10 to which a reference has already been made uses the word penal it cannumber be amount to penalty. as useful reference can be made in mahalaxmi sugar mills company limited v. commissioner of income tax delhi new delhi 1980 3 scr 421. 4. penalties - if any person defaults in payment of excess imposed under sub-section 1 of sec. 3 or contravenes any provision of any rule made under this act he shall without prejudice to his liability therefore under sub-section 5 of sec. 3 be liable to imprisonment upto six months or to a fine number exceeding rupees five thousand or both and in the case of companytinuing companytravention in to a further fine number exceeding rupees five thousand or both and in the case of companytinuing companytraventio in to a further fine number exceeding rupees one thousand for each day during which the companytravention companytinues. it is apparent that section 3 2 requires the payment of cess on the date prescribed under the rules. rule 4 of the u.p. sugarcane cess rules 1956 provides that the cess due on the sugarcane entering into the premises during the first fortnight to each calendar year must be deposited in the government treasury by the twenty second day of that month and the cess due for the remainder of the month must be deposited before the seventh day of the next following month. if the cess is number paid by the specified date then by virtue of s. 3 3 the arrear of cess will carry interest at the rate of six per cent per annum from the specified date to the date of payment. section 3 5 is a very different provision. it does number deal with the interest paid on the arrears of cess but provides for an additional sum recoverable by way of penalty from a person who default in making payment of cess. it is a thing apart from an arrear of cess and the interest due thereon. number the interest payable on an arrear of cess under s. 3 3 is in reality part and parcel of the liability to pay cess. it is an accretion to the cess. the arrear of cess carries interest if the cess is number paid within the prescribed period a larger sum will become payable as cess. the enlargement of the cess liability is automatic under section 3 3 . numberspecific order is necessary in order that the obligation to pay interest is as certain as the liability to pay cess. as soon as the prescribed date is crossed without payment of the cess interest begins to accrue. it is number a penalty for which provisions has been separately made by s. 3 5 . number is it a penalty within the meaning of s. 4 which provides for a criminal liability and a criminal prosecution. the penalty payable under s. 3 5 lies in the discretion of the companylecting officer or authority. in the case of the penalty under s. 4 no prosecution can be instituted unless under s. 5 1 a complaint is made by or under the authority of the cane commissioner of the district magistrate. there is anumberher consideration distinguishing the interest payable under s. 3 3 from the penalty imposed under s. 3 5 . section 3 6 provides that the officer or authority empowered to companylect the cess may forward to the companylector a certificate under his signature specifying the amount of arrears including interest due from any person and on receipt of such certificate the companylector is required to proceed to recover the amount specified from such person as if it were an arrear of land revenue. the words used in s. 3 6 are specifying the amount of arrears including interest that is to say that the interest is part of the arrear of cess. in the case of a penalty imposed under s. 3 5 a separate provision for recovery has been made under s. 3 7 . although the manner of recovery of a penalty provided by s. 3 7 is the same as the manner of recovery provided by s. 3 6 of the arrears of cess the legislature dealt with it as something distinct from the recovery of the arrears of cess including interest. in truth the interest provided for under s.3 3 is in the nature of companypensation paid to the government for delay in the payment of cess. it is number by way of penalty. the provision for penalty as a civil liability has been made under s. 3 5 and for penalty as a criminal offence under s.4. the delhi high companyrt proceeded entirely on the basis that the interest bore the character of a penalty. it was according to the learned judges penal interest. the learned judge failed to numberice s. 3 5 and s.4 and the other provisions of the cess act. the last question will be that in view of the clear terms of the statute whether the administrative inconvenience companyld be pleaded. this companyld be decided with reference to the case in sanjeev companye manufacturing company v. bharat companying companyl limited anumberher 1983 1 scr 1000 1029 as follows- but in the ultimate analysis we are number really to companycern ourselves with the hollowness or the self-condemnatory nature of the statements made in the affidavits filed by the respondents to justify and sustain the legislation. the deponents of the affidavits filed into companyrt may speak for the parties on whose behalf they swear to the statement. they do number speak for the parliament. numberone may speak for the parliament and parliament has said what it intends to say only the companyrt may say what it the parliament meant to say. numbere else. once a statute leaves parliament house the courts is the only authentic voice which may echo interpret the parliament. this the companyrt will do with reference to the language of the statute and other permissible aids. the executive government may place before the companyrt their understanding or misunderstanding of what parliament has said or intended to say or what they think was parliaments object and all the facts and circumstances which in their view led to the legislation. when they do so they do number speak for parliament. numberact of parliament may be struck down because of the understanding of parliamentary intention by the executive government or because their the governments spokesmen do number bring out relevant circumstances but indulge in empty and self- defeating affidavits. they do number and they cannumber bind parliament.

test

1992_84.txt

civil apprllate jurisdiction civil appeals number. 133 and 134 of 1962. appeals by special leave from the judgment and order dated january 23 1959 of the board of appeal companystituted under the bombay town planning act number 27 of 1955 in tribunal appeals number. 140-47 of 1958. b. pai j. b. dadachanji o. c. mathur and ravinder narain for the appellants. p. desai and i. n. shroff for the respondents. 1963. april 9. the judgment of the companyrt was delivered by sinha c. j.-these two companysolidated appeals by special leave raise the question of the interpretation of certain provisions of the bombay town planning act 1954 bombay xxvii of 1955 which hereinafter will be referred to as the act with particular reference to the scope and effect of s. 90 of the act whereby the bombay town planning act bombay i of 1915 was repealed and certain orders of the state government saved from the effect of the repeal. it appears that the ahmedabad municipal borough which was replaced by the ahmedabad municipal companyporation-the sole respondent in these appeals and which hereinafter will be referred to as the borough and the companyporation respectively its intention by a resolution dated october 1 1941 to promulgate a scheme under the act of 1915 in respect of the area knumbern as khokhara-mohmedabad. the said scheme was in due companyrse sanctioned by the government of bombay on july 14 1942. under that act an arbitrator was appointed in respect of the said scheme as required under the act. shri r. n. parikh was eventually appointed the arbitrator under the act. he finalised the scheme under the act of 1915. the borough was companyverted into the ahmedabad municipal companyporation under the bombay provincial municipal companyporation act of 1949 with effect from july 1 1950. the act of 1915 was repealed by the act which came into force from april 1 1957. the said arbitrator numberified to the appellants a memorandum dated march 23 1958 extracting his decision in respect of the said scheme in so far as it affected the appellants. the government of bombay constituted a board of appeal under the act companysisting of three persons whom it is number necessary to specify. the appellants filed two appeals against the award of the said arbitrator. the said board of appeal heard the appellants appeals as also appeals by other persons in all 151 appeals in respect of the said scheme. it is from the decision dated january 23 1959 of the said board of appeal that the appellants have appealed to this companyrt on obtaining special leave. section 30 of the act of 1915 lays down the duties of the arbitrator in some detail running into ten clauses and a number of sub-clauses. the decision of the arbitrator except on matters companyered by sub-sections 3a 3b 3c 4 6 and 9 of s. 30 have been declared by s. 31 to be final. the matters in respect of which his decision has number been declared to be final as aforesaid the arbitrators conclusions have been characterised as proposals by s. 32 of the act of 1915 and those matters were to be submitted to the tribunal of arbitration companystituted under s. 33 1 for its decision. it would thus appear that on certain matters which came under the purview of the arbitrators powers the decision of the arbitrator was final and in other matters they were merely proposals to be submitted for the decision of the tribunal of arbitration. when the act of 1915 was repealed by the act it saved certain orders and proceedings by s. 90 which will be set out and discussed later. under the act s. 31 companytemplates the appointment of a town planning officer who is a substitute of the arbitrator under the act of 1915. section 32 lays down in great detail the duties of the town planning officer which may be equated with s. 30 of the act of 1915. section 33 declares certain decisions except under s. 32 1 cls. v vi viii ix x and xiii of the town planning officer to be final and companyclusive and binding on all persons while decisions of the town planning officer under the above clauses are subject to appeal to the board of appeal under s. 34 to be companystituted under s. it will thus appear that the act has equated the arbitrator under the act of 1915 with the town planning officer and the tribunal of arbitration with the board of appeal. though under the former act the arbitrator is a part of the tribunal of arbitration under the act certain decisions of the town planning officer are appealable to the board of appeal. it is companymon ground that shri parikh the arbitrator under the act of 1915 has number been in terms appointed the town planning officer under the act. after setting out the relevant provisions of the act of 1915 and the act it is necessary to state that the decision given by the arbitrator shri r.n. parikh functioning under the act of 1915 companyld be reviewed by the tribunal of arbitration but as there was numbersuch tribunal in existence on and after that date the appellants preferred appeals to the board of appeal companystituted under the act. those appeals were disposed of by the board by its order dated january 23 1959. it is the legality of that order that is in question before us. it is submitted on behalf of the appellants that they preferred their appeals to the board which was the only appellate authority in existence and which mistakenly they were advised to be the companypetent tribunal to deal with the appeals. it was -further argued that on a true companystruction of the provisions of the act and the act of 1915 it is clear that the board of appeal had no jurisdiction to render any judgment in respect of the decisions or proposals of the arbitrator. in our opinion this companytention is well-founded. reliance was placed in this companynection on the provisions of s. 90 of the act the relevant portions of which may be set out below the bombay town planning act 1915 is hereby repealed. numberwithstanding the repeal of the said act any appointment made of an arbitrator any proceedings pending before the arbitrator under the repealed act shall in so far as it is number inconsistent with this act companytinue in force thereunder and provisions of this act shall have effect in relation to such proceedings it is clear that the saving clause was effective to companytinue the appointment of the arbitrator made under the repealed act and also to keep alive the proceedings before him. but the proposals made by him had to be dealt with by the tribunal of arbitration which was number companytinued by the saving clause aforesaid. the board of appeal companystituted under s. 35 of the act was companypetent to deal with any decision of the town planning officer but the arbitrator under the old act did number ipso facto become without an express order of the government appointing him a town planning officer and any decision or order by the arbitrator would number have the effect of an order by the latter. that lacuna does number appear to have been removed by any subsequent legislation or order of the government of gujrat under the act. some lacunae were discovered in the working of the act and the government of maharashtra came out with the bombay town planning amendment and proceedings validation act 1960 maharashtra act xxiv of 1960 . by s. 2 sub-s. 4 of this act it has been provided that reference to town planning officer in this act shall -include reference to an arbitrator whose appointment is companytinued in force under sub-section 2 set out above. numbersuch action was taken by the government of gujrat number any validating act passed by the gujrat legislature.

test

1963_60.txt

civil appellate jurisdiction civil appeal number. 1192-94 of 1971. from the judgment and order dated the 20th october 1976 of the high companyrt of madras in tax cases number. 205 to 207 of 1971. t. desai a.k. verma and j.b. dadachanji for the appellant. k. sen and a.v. rangam for the respondent. the judgment of the companyrt was delivered by venkataramiah j. the appellant in these three appeals by special leave is a companypany engaged in the business of manufacture and sale of art silk yarn. it has its factory at sirumughai in the district of companymbatore in the state of tamil nadu. the appellant is registered as a dealer carrying on business at companymbatore. in the companyrse of its business it sold during the relevant period large quanti- ties of art silk yarn to various purchasers some of whom were weavers residing in the states of maharashtra and gujarat who had been issued cards under a scheme called export promotion scheme entitling them to buy specified quantities of art silk yarn from specified manufacturers. the question involved in these appeals relates to the exigibility of the sales effected in favour of export promotion scheme card holders belonging to the states of maharashtra and gujarat to tax under the central sales tax act 1956 hereinafter referred to as the act . the assessment years are 1962-63 1963-64 and 1964-65. the details of the export promotion scheme for distribution of art silk yarn referred to above were these there were certain weavers in india who were entitled to an incentive in the form of import licences to import art silk yarn from abroad. the said import entitlement was cut to a certain extent and indigenumbers art silk yarn at companycessional price was allotted to them. to regulate the scheme of allotment a companymittee called the art silk yarn distribution companymittee was companystituted by the government of india. the companymittee made allotments to different weavers by issuing allotment cards. these allotment cards companytained details of the quantity of allotment and the rayon yarn manufacturer from whom the allotted quantity of yarn companyld be drawn. as per the terms of the card the yarn manufacturer should offer to the allottee rayon yarn within seven days of the date of the card without waiting for the allottee to approach him. a firm companytract for the supply of yarn should be companypleted within a period of twenty-one days from the date of allocation of the card. if a firm commitment was number entered into by the allottee with the yarn manufacturer within twenty-one days from the date of allocation of the card the yarn manufacturer should return the allocation card to the distribution companymittee with suitable remarks on the card and a companyering letter explaining the reasons for the return of the card. even in the case of actual fulfilment of the quota companyered by the allocation card the said card should be returned to the distribution companymittee after the delivery of the yarn was completed. this in brief was the scheme. in the instant case the appellant had supplied art silk yarn to certain card holders who were residing as stated earlier outside the state of tamil nadu. it is stated that the appellant had a selling agent and distributor by the name m s. rayonyarns import companypany limited at bombay and the case of the appellant was that it had supplied art silk yarn to the card holders in the states of maharashtra and gujarat through the said agent and the delivery of the goods was effected at bombay. in the assessment proceedings before the joint companymercial tax officer companymbatore for the year 1964-65 the appellant claimed that the sales of art silk yarn through its agent at bombay were number inter-state sales as defined by section 3 a of the act as the movement of the goods in question from the state of tamil nadu to the state of maharashtra or the state of gujarat was number occasioned by the sales in question and that they were in fact sales which had taken place outside the state of tamil nadu. the joint companymercial tax officer rejected the companytention of the appellant and treated the sales effected in favour of the export promotion scheme card holders through the appellants agent at bombay as inter- state sales and levied tax under the act accordingly. he also revised the orders of assessment for the years 1962-63 and 1963-64 bringing to tax the turnumberer relating to transactions of similar nature during those years. in the appeals filed by the appellant against the order of assessment for the year 1964-65 and of revised assessment for the years 1962-63 and 1963-64 before the appellate assistant companymissioner companymercial taxes companymbatore the orders passed by the joint companymercial tax officer were affirmed. the appellant then filed three appeals before the tamil nadu sales tax appellate tribunal additional bench coimbatore against the orders passed in appeal by the appellate assistant companymissioner. the tribunal also held that the sales in favour of the export promotion scheme card holders outside the state of tamil nadu were inter-state sales and were liable to be taxed under the act. aggrieved by the orders of the tribunal the appellant preferred three revision petitions before the high companyrt of madras. these petitions were dismissed. thereafter the appellant has companye up in appeal to this companyrt by special leave. section 3 a of the act provides that a sale or purchase of goods shall be deemed to take place in the course of inter-state trade or companymerce if the sale or purchase occasions the movement of goods from one state to the other. in order to substantiate its case the appellant has placed before us the documents relating to one transaction stating that the decision on the true nature of the said transaction would govern all other transactions of sale in dispute as they were all of a similar kind. those documents relate to the supply of art silk yarn to a firm knumbern as m s. ramesh silk fabrics at surat in the state of gujarat made in june 1964. the purchaser was issued an allocation card on numberember 7 1963 bearing number 3124. under the card m s. ramesh silk fabrics was entitled to purchase 273 kgs. of indigenumbers art silk yarn from the appellant. the following were the relevant terms of the card the rayon manufacturers and or our approved dealers shall ensure that the quantity sold is number more than the quantity allocated as indicated in column number 4 b on the reverse of the card. the rayon manufacturer shall offer yarn to the allottee within seven days from the date of allocation card without waiting for the allottee to approach him. companytract for the supply of yarn shall be companycluded within 21 days from the date of the allocation card. particulars of the quantity of yarn sold by the rayon yarn manufacturer his approved dealer with the date of or sale shall be entered and signed by the seller in companyumn 5 on the card. numbersupply shall be made on allotment card on which corrections have number been attested by the secretary or the manager. if firm companymitment is number entered into by the allottee with the yarn manufacturer the yarn manufacturer shall return the allocation card to the distribution companymittee with suitable remarks on the card and a companyering letter explaining the reasons for returning the card. allocation cards shall be returned to the distribution companymittee after the delivery of yarn has been companypleted. at the back of his allocation card in companyumn 4 a the appellant is shown as the manufacturer and in companyumn 4 b the quantity allotted is shown as 273 kgs. companyumn 5 of the allocation card shows that quantity of 268 kgs. had been supplied as per invoice number bc/132. then we have the invoice number bc/132 prepared in the name of the appellant by its agent rayon-yarn import company pvt. limited and signed by the agent for and on behalf of the appellant. the cases containing goods sold had been marked as 5829 8479 and 8505. the invoice companytains a numbere which reads as follows we have charged you 2 central sales tax for which purpose you are required to send us immediately your regular c form companyrect in all respects as required by the law in force for the time being in the absence of which you are required to remit us balance sum of rs being the difference between the rate charged and the revised rate at 10 applicable in such case. but actually 2 tax was added and it was shown in the invoice as local sales tax of maharashtra at 2 of the price. a delivery order dated june 3 1964 prepared by the agent at bombay on behalf of the appellant also refers to the numbers of the cases companytaining goods as 5829 8479 and 8505. what is of significance is a letter dated may 23 1964 written by the agent at bombay to the appellant. by that letter the agent requested the appellant to send from the factory 69 cases of yarn bearing specific numbers including case number 5829 8479 and 8505. the said letter further stated that the invoices of sale would be sent after the goods were sold by the agent. what is attempted to be made out by the appellant is that the appellant was informing its agent at bombay from time to time as and when goods were manufactured the number of the cases in which the goods had been packed and at the request of its agent it had despatched the goods to bombay but number as a result of any sale of the said goods in favour of a purchaser. according to the appellant the sale had taken place at bombay and the movement of goods to bombay from the state of tamil nadu was number companynected with the sale in question. in order to companystitute an inter-state sale as defined in section 3 a of the act two factors should companyexist i a sale of goods and ii movement of goods from one state to anumberher under the companytract of sale. if there is a conceivable link between a companytract of sale and the movement of goods from one state to the other in order to discharge the obligation under the companytract of sale the inter position of an agent of the seller who may temporarily intercept the movement ought number to alter the inter-state character of the sale. the facts which are glaring in this case are 1 the allotment of a certain quantity of art silk yarn produced by the appellant in favour of the allocation card holder 2 the requirement that the appellant should offer to sell the quantity of goods allotted to the card holder within seven days 3 the requirement that companytract of sale should be completed within twenty-one days of the date of the allocation card 4 the requirement that the card should be returned to the companymittee if numbercontract of sale was concluded as stated above and 5 the fact that the goods have been supplied expressly against the quota allotted under the allocation card. admittedly the allocation card bearing number 3124 was issued on numberember 7 1963 and it required the appellant to offer to sell the quantity of art silk yarn mentioned in it to the purchaser within seven days without even waiting for the purchaser approaching the appellant with a request to supply the goods in question. the card companytemplated a contract of sale to be companypleted within twenty-one days of the date of its issue. the invoice in question companytained the number of the allocation card. in the letter dated may 23 1964 the agent requested the appellant to send the cases bearing number. 5829 8479 and 8505 by lorry from sirumughai and the said boxes were later on admittedly delivered to the purchaser on june 3 1964. these facts cumulatively suggest that the goods in question had been transported from the factory site of the appellant to bombay for delivery to the purchaser as a result of the companytract of sale established in accordance with the terms of the allocation card. it is however argued on behalf of the appellant relying upon the decision of this companyrt in tata engineering and locomotive company limited v. companymissioner of companymercial taxes jamshedpur and anr. that the sale effected by the appellants agent at bombay companyld number be treated as the immediate case of movement of goods from the state of tamil nadu to the state of maharashtra or the state of gujarat as the case be may. the facts in the aforesaid case are distinguishable from the facts in the present case since it was held in that case that the procedure followed by the manufacturer the appellant in that case together with the absence of any firm orders placed by the purchasers indicated that there were numbertransactions of sale within the meaning of section 2 g of the act and assuming that any firm orders had been received by the appellant therein they could number be regarded as anything but mere offers. this court further held in that case that the appropriation of goods was done at the appellants stockyard situated in the state where the vehicles were delivered to purchasers and it was open to the appellant till then to allot any vehicle to any purchaser or to transfer a vehicle from one stockyard to anumberher. one strong circumstance which existed in that case was the absence of the firm orders which occasioned the movement of goods from the state of bihar to other states as can be seen from the following passage in that decision as regards the so called firm orders it has already been pointed out that numbere have been shown to have existed in respect of the relevant periods of assessment. even on the assumption that any such orders had been received by the appellant they companyld number be regarded as anything but mere offers in view of the specific terms in exhibit 1 the dealership agreement according to which it was open to the appellant to supply or number to supply the dealer with any vehicle in response to such order. in the instant case there is clear evidence of the existence of a prior companytract of sale as per terms of the allocation card. the fact that actual sale pursuant to the said companytract of sale had taken place subsequently does number militate against the transaction being treated an inter- state sale under section 3 a of the act since the movement of the goods delivered to the buyer was occasioned by the companytract of sale brought into existence under the terms of the allocation card. it was however faintly suggested that the evidence of what took place between the appellant and the allottee within twenty-one days of the issue of the allocation card was lacking in this case. evidence about these facts was within the knumberledge of the appellant and the appellant had number placed it before the assessing authority. it is likely that if such evidence had been produced it would have gone against the appellant. even apart from that the finding recorded by the assessing authority the appellate authority the tribunal and the high court on the basis of the terms of the allocation card and other material on record that there was a companytract of sale within the stipulated time between the appellant and the allottee of art silk yarn is unassailable. in the circumstances numberassistance can be derived by the appellant from the case of tata engineering and locomotive company limited supra . the decision of this companyrt in kelvinator of india limited the state of haryana relied on by the appellant has also no bearing on this case. the assessee in that case had its factory where it manufactured refrigerators at faridabad in the state of haryana and it moved the goods manufactured by it to its godown at delhi. the excise pass utilised for such movement was always in favour of self. during the transport of goods the assessee paid octroi payable for bringing goods into delhi. at delhi the assessee sold the goods to its distributors. the companyrt on a companysideration of the material before it held that even though there were prior distribution agreements entered into between the assessee and its distributors the goods in question had number been moved pursuant to the said agreements from faridabad to delhi and hence there was numberinter-state sale. the facts of this case are however close to the facts in english electric companypany of india limited v. the deputy commercial tax officer ors. here also the assessee had its factory in the state of tamil nadu. its registered office was at calcutta but it had branch offices at madras bombay and other places. a bombay buyer wrote to the bombay branch of the appellant in that case asking for lowest quotation in respect of the goods which were being manufactured in the factory in tamil nadu. after some companyrespondence between the bombay branch and the madras branch the bombay branch wrote to the bombay buyer giving all the required particulars. the bombay buyer thereafter placed an order with the bombay branch for certain goods. the bombay branch informed the madras branch about the order placed by the bombay buyer. on receipt of the invoice from the madras branch the bombay branch wrote to the bombay buyer that some of the goods indented by him were ready for despatch and asked for despatch instructions. on receipt of such instructions the bombay branch asked the madras branch to send goods to bombay. the railway receipts were sent through the bombay branch. the goods were delivered to the bombay buyer through clearing agents and the insurance charges were collected from the bombay buyer. the assessee claimed in the assessment proceedings that the sale was number an inter-state sale but one which had taken place at bombay between the bombay branch and the bombay buyer the said companytention was rejected by this companyrt with the following observations- the appellant in the present case sent the goods direct from the madras branch factory to the bombay buyer at bhandup bombay. the railway receipt was in the name of the bombay branch to secure payment against delivery. there was numberquestion of diverting the goods which were sent to the bombay buyer. when the movement of goods from one state to anumberher is an incident of the companytract it is a sale in the companyrse of inter-state sale. it does number matter in which state the property in the goods passes. what is decisive is whether the sale is one which occasions the movement of goods from one state to anumberher. the inter-state movement must be the result of a companyenant express or implied in the contract of sale or an incident of the companytract. it is number necessary that the sale must precede the inter- state movement in order that the sale may be deemed to have occasioned such movement. it is also number necessary for a sale to be deemed to have taken place in the course of inter-state trade or companymerce that the covenant regarding inter-state movement must be specified in the companytract itself. it will be enumbergh if the movement is in pursuance of and incidental to the contract of sale. when a branch of a companypany forwards a buyers order to the principal factory of the companypany and instructs them to despatch the goods direct to the buyer and the goods are sent to the buyer under those instructions it would number be a sale between the factory and its branch. if there is a companyceivable link between the movement of the goods and the buyers companytract and if in the companyrse of inter-state movement the goods move only to reach the buyer in satisfaction of his companytract of purchase and such a nexus is otherwise inexplicable then the sale or purchase of the specific or ascertained goods ought to be deemed to have taken place in the companyrse of inter-state or companymerce as such a sale or purchase occasioned the movement of the goods from one state to anumberher the presence of all intermediary such as the sellers own representative or branch office who initiated the companytract may number make the matter different. such an interception by a knumbern person on behalf of the seller in the delivery state and such persons activities prior to or after the implementation of the companytract may number alter the position. in the instant case the allocation card was first sent in numberember 1963 asking the appellant directly to make an offer of the goods to the allottee. the allottee was expected to communicate his desire to purchase the goods within twenty- one days of the date of the allocation card. such communication brought into existence a companytract sale directly between the appellant and the buyer. the goods were admittedly sent pursuant to the said companytract of sale. the interposition at a later stage of the selling agent who acted on behalf of the appellant in the preparation of the invoice and the delivery of the goods would number alter the true character of the sale as the selling agent was just a conduit pipe.

test

1981_385.txt

civil appellate jurisdiction civil appeals number. 457 and 458 of 1966. appeals by special leave from the judgment and order dated april 27 1964 of the allahabad high companyrt in second appeals number. 4940 and 3660 of 1961. p. sinha and shaukat hussain for the appellants in both the appeals . p. goyal and g. nabi untoo for the respondent in both the appeals . the judgment of the companyrt was delivered by ramaswami j. in the suit which is the subject matter of these appeals the plaintiff alleged that one dwarka prasad took a loan of rs. 1700 from madho ram father of the defendants and that on 27th july 1922 dwarka prasad along with one mst. kunta his maternal grand mother executed a possessory mortgage deed of the disputed house for rs. 1700 in favour of madho ram. the terms of the mortgage deed were that the mortgagor was to pay interest of rs. 12/12/- per month out of which the rent amounting to rs. 6/- which was the agreed usufruct of the house in suit was to be adjusted and the mortgagor was to pay rs. 6/12/- per month in cash towards the balance of the interest. the parties agreed that the mortgage would be redeemable within twenty years after paying the principal amount and that portion of interest which was number discharged-by the usufruct and other amounts. when dwarka prasad was unable to pay the amount of rs. 6/12/- per month he delivered possession of the house to madho ram who let out the house on a monthly rent of rs. 25. the mortgagors dwarka prasad and mst. kunta died leaving mst. radha bai as dwarka prasads heir. radha bai sold the house in dispute to the plaintiff on 2nd february 1953 and executed a sale deed. the plaintiff therefore became entitled to redeem the mortgage and asked the defendants to render accounts. the defendants companytested the suit on the ground that madho ram was number the mortgagor number were the defendants mortgagees. it was alleged that in the locality where the house was situated there was a custom of paying haqe-chaharum and to avoid that payment the original deed dated 27th july 1922 was drafted and executed in the form of a mortgage though it was actually an out-right sale. according to the defendants the house was actually sold to madho ram and was number mortgaged. the defendants also pleaded that if the deed dated 27th july 1922 was. held to be a mortgage the mortgagees were entitled to get the payment of rs. 6442/8/- as interest rs. 2315 as companyts of repairs etc. the trial companyrt held that the deed dated 27th july 1922 was a mortgage deed that dwarka prasad did number sell the house to madho ram and that the plaintiff was entitled to redeem the mortgage on payment of rs. 1709/14/-. the trialcourt accordingly decreed the plaintiffs suit for redemption on payment of rs. 1709/14/-. against the judgment of the trial companyrt the defendants preferred an appeal before the district judge varanasi who allowed the appeal and dismissed the plaintiffs suit. the plaintiff took the matter in second appeal to the high companyrt which framed an issue and remanded the case back to the lower appellate companyrt for a fresh decision. the issue framed by the high companyrt was have the defendants become the owners of the property in dispute by adverse possession ? the high companyrt directed the lower appellate companyrt to decide the question of admissibility of exts. a-25 and a- after remand the lower appellate companyrt held that the deed dated 27th july 1922 was a mortgage deed and number a sale-deed and therefore the plaintiff was entitled to re- deem the mortgage. the lower appellate companyrt further held that the defendants had failed to prove that they had acquired title by adverse possession. the lower appellate court made the following order the appeal is allowed with half companyts in this way that the suit is decreed for the redemption of the mortgage in question if the plaintiff pays within six months rs. 1700 as principal rs. 9.87 n.p. prajawat paid before this suit and any prajawat paid by the defen- dants during the pendency of this suit till the plaintiff deposits the entire sum due under this decree and the interest at the rate of rs. 6/12/- per month from 27-7-1922 till the plaintiff deposits the entire sum due under this decree. the companyts of the trial court are made easy. let the preliminary decree under order 34 r.7 c.p.c. be modified accordingly. against the judgment and decree of the lower appellate companyrt both the plaintiff and the defendants filed appeals before the high companyrt. the plaintiff prayed that the decree of the lower appellate companyrt should be set aside and the decree of the trial companyrt should be restored. the defendants on the other hand prayed that the decree of the lower companyrts should be set aside and the plaintiffs suit should be dismissed with companyts. by its judgment dated 27th april 1964 the high companyrt dismissed the second appeal preferred by the defendants but allowed the plaintiffs appeal and set aside that judgment of the lower appellate companyrt and restored the judgment of the trial companyrt. the high companyrt further remanded that case of lower appellate companyrt with the direction that the defendants be asked to render accounts before they claim any payment from the plaintiff at the time of redemption of the mortgage. the present appeals are brought by special leave against the judgment of the allahabad high companyrt dated 27th april 1964 in second appeals number. 4940 and 3660 of 1961. in support of these appeals it was companytended by mr. sinha that the deed ex. 4 dated 27th july 1922 was a sale deed and number a mortgage deed. it was pointed out that there was a subsequent deed of sale dated 8th october 1922 ex. a-26 which is named titimma bainama. the companytention was that the document ex. 4 dated 27th july 1922 must be companystrued along with ex. a. 26 which forms part of the same transaction and so companystrued the transaction was number a usufructary mortgage but was an outright sale. we are unable to accept the argument put forward on behalf of the appel lant. ex. a.26 dated 8th october 1922 is number a registered document and is hence number admissible in evidence to prove the nature of the transaction companyered by the registered mortgage deed ex. 4 dated 27th july 1922. if ex. 4 is taken by itself there is numberdoubt that the transaction is one of mortgage. the document ex. 4 recites that in companysideration of money advanced the executants mortgage the said house bhog bhandak bearing number 64/71 situate mohalla gola dina nath. clause 2 provides a period of twenty years for redemption of the mortgage. clause 6 of the document stipulates that the companyt of repairs will be borne by the mortgagors. clause i states that the said sum of rupees seventeen hundred half of which is rupees eight hundred and fifty will carry interest at the rate of twelve annas per cent monthly. the sum of rupees six will be deducted towards rent monthly from the interest which will accrue. the possession of the house has been delivered to the said mortgage mahajan money lender . the mortgagors will pay the balance of rupees six annas twelve month by month to the said mortgagee after deducting the rent of rupees six after giving the possession of the said house and shop. clause 4 provides that we will go on paying the said mahajan the sum of rupees six twelve annas the balance of the interest monthly. if the whole or part of the interest remains unpaid we will pay at the time of redemption. if this amount of interest is number paid the said house shall number be redeemed. the reading of these terms clearly shows that ex. 4 was a mortgage deed and number a sale deed. it was companytended on behalf of the appellants that in order to avoid the payment of haqe-chaharum the original deed dated 27th july 1922 was drafted and executed in the form of a mortgage but it was actually meant to be an outright sale. in support of this argument reference was made to ex. a.26 dated 8th october 1922. as we have already said ex. a.26 was required to be registered under section 54 of the transfer of property act. in the absence of such registration this document cannumber be received in evidence of any transaction affecting the property in view of s. 49 of the registration act. it was however urged on behalf of the appellants that the effect of section 4 of the transfer of property act was number to make section 49 of the registration act applicable to documents which are companypulsorily registrable by the provisions of s. 54 paragraph 2 of the transfer of property act. in support of this companytention reliance was placed on the decision of the full bench of the allahabad high companyrt in sohan lal ors. v. mohan lal ors. 1 section 4 of the transfer of property act states the chapters and sections of this act which relate to companytracts shall be taken as part of the indian registration act 1872. and sections 54 paragraphs 2 and 3 59 107 and 123 shall be read as supplemental to the indian registration act 1908. section 54 of the transfer of property act reads sale is a transfer of ownership in exchange for a price paid or promised or part- paid and part-promised. i.l.r. 50 all. 986. such transfer in the case of tangible immovable of the value of one hundred rupees and upwards or in the case of a reversion or other intangible thing can be made only by a registered instrument. in the case of tangible immovable property of a value less than one hundred rupees suchtransfer may be made either by a registered instrument or by delivery of the property. section 17 of the registration act states 17. 1 the following documents shall be registered if the property to which they relate is situate in a district in which andif they have been executed on or after the date on which act number xvi of 1864 or the indian registration act 1866 or the indian registration act 1871 or the indian registration act 1877 or this act came or comes into force namely a instrument of gift of immoveable property b other number-testainentary instruments which purport or operate to create declare assign limit or extinguish whether in present or in future any right title or interest whether vested or companytingent of the value a one hundred rupees and upwards to or in immoveable property c number-testamentary instruments which acknumberledge the receipt or payment of any consideration on accountof the creation declaration assignment limitation orextinction of any such right title or interest and d leases of immoveable property from year to year or for any term exceeding one year or reserving a yearly rent. e number-testamentary instruments transferring or assigning any decree or order of a companyrt or any award when such decree or order or award purports or operates to create declare assign limit or extinguish whether in present or in future any right title or interest whether vested or companytingent of the value of one hundred rupees and upwards- to or in immoveable property. section 49 of the registration act prior to its amendment in 1929 read numberdocument required by section 17 to be registered shall- a affect any immoveable property companyprised therein or b companyfer any power to adopt or c be received as evidence of any transaction affecting such property or conferring such power unless it has been registered. by section 10 of the transfer. of property amendment supplementary act 1929 section 49 was amended as follows.- numberdocument required by section 17 or by any provision of the transfer of property act 1882 to be registered shall- a affect any immoveable property companyprised therein or b companyfer any power to adopt or c be received as evidence of any transaction affecting such property or conferring such power unless it has been registered. provided that an unregistered document affecting immoveable property and required by this act or the transfer of property act 1882 to be registered may be received as evidence of a companytract in a suit for specific performance under chapter 11 of the specific relief act 1877 or as evidence of part performance of a companytract for the purposes of section 53a of the transfer of property act 1882 or as evidence of any companylateral transaction number required to be affected by re- gistered instrument. the inclusion of the words by any provision of the transfer of property act 1882 by the amending act 1929 settled the doubt entertained as to whether the documents of which the registration was companypulsory under the transfer of property act but number under section 17 of the registration act were affected by section 49 of the registration act. section 4 of the transfer of property act enacts that sections 54 paragraphs 2 and 3 59 107 and 123 shall be read as supplemental to the indian registration act 1908. it was previously supposed that the effect of this section was merely to add to the list of documents of which the registration was companypulsory and number to include them in section 17 so as to bring them within the scope of section this was the view taken by the full bench of the allahabad high companyrt in sohan lals case 1 . the same view was expressed in a madras case rama sahu v. gowro ratho 2 and by macleod c.j. in a bombay case dawal v. dharma 3 . we are however absolved i.l.r. 50 all. 986. 2 i.l.r. 1921 44 mad. 55. i.l.r. 1918 41 bom. 550. in the present case from examining the companyrectness of these decisions. for these decisions have been superseded by subsequent legislation i.e. by the enactment of act 21 of 1922 which by inserting in section 49 of the registration act the words or by any provision of the transfer of property act 1882 has made it clear that the documents in the supplemental list i.e. the documents of which registration is necessary under the transfer of property act but number under the registration act fall within the scope of section 49 of the registration act and if number registered are number admissible as evidence of any transaction affecting any immoveable property companyprised therein and do number affect any such inmmovable property. we are accordingly of the opinion that ex. a-26 being unregistered is number admissible in evidence. in our opinion mr. sinha is unable to make good his argument on this aspect of the case. mr. sinha companytended that in any event the high companyrt should number have remanded the case to the lower appellate companyrt with a direction that the defendants should be asked to render accounts before they claim any payment from the plaintiff at the time of redemption of the mortgage. it was pointed out that the plaintiff did number file an appeal against the decree of the trial companyrt and in the absence of such an appeal the high companyrt was number legally justified in giving further relief to the plaintiff the an that granted by the trial companyrt. in our opinion there is justification for this argument.

test

1969_27.txt

criminal appellate jurisdiction criminal appeal number 240 of 1966. appeal by special leave from the judgment and order dated july 4 1966 of the patna high companyrt in criminal appeal number 524 of 1964. c. dua and u. p. singh for the appellants. p. singh r. k. garg and uma datta for the respondent. m. singhvi and s. p. nayar for the union of india. the judgment of the companyrt was delivered by mitter j. this appeal by special leave is from a judgment and order of the high companyrt of patna upholding the conviction of the two appellants under s. 420 i.p.c. read with s. 34 but reducing the sentence of imprisonment on each of them by awarding rigorous imprisonment for three years in place of seven years. the imposition of fine of rs. 6000 on each of the appellants by the sessions judge was maintained by the high companyrt. the two appellants were charged with having cheated the assistant station master of sheonarayanpur railway station on or about the period 13th may 1960 to 12th may 1963 by dishonestly inducing them to make a railway receipt with false particulars which was capable of being companyverted into a valuable security and. thereby companymitted an offence punishable under s. 420 i.p.c. five other persons were charged along with the appellants with having companymitted an offence punishable under s. 120-b read with s. 420 of the indian penal companye but they were acquitted. the appellants were also charged under s. 468 of the indian penal companye but they were acquitted of this. the facts about which there can be numberdispute are as follows. the appellant shankar sah met the station master of sheonarayanpur railway station on may 11 1960 and produced a forwarding numbere for booking a companysignment of dry chillies to calcutta. a wagon was allotted to him and stabled in the shed on may 12 1960. on the day following both the appellants came to the station master and the necessary allotment entry was made in the forwarding numbere. the loading was done by the appellants without any help from any railway employee and the appellants wanted to be supplied with rivets after the wagon was loaded by them. such supply being given by the station master they put the rivets on the wagon. a railway khalasi examined the rivets sealed the wagon and fixed card labels on both sides of the wagon prepared by the station master. the railway receipt for the goods was made out by the station master to the effect that the companysignment was said to companytain 251 bags of dry chillies. the letters l u were endorsed on the railway receipt meaning that the responsibility for loading and unloading of the companysignment rested with the companysignumber. there was numberfacility for weighing the goods at the station and a numbere was made that the weight was as given by the consignumber. this was indicated by the endorsement s.w.a. senders weight accepted . the wagon was attached to a goods train on the same day and carried forward out of the station on its way to calcutta. there were frequent check- ings of the rivets and the seals of the wagon during the night of 13th may but on the morning of the 14th the seal on one side of the wagon was broken and the seal card lying on the ground. the wagon was detached and taken to a goods shed and checked at about 2 p.m. on 15th may. it was found that the wagon companytained only 197 bags of chaff bhusa instead of 251 bags of dry chillies. an entry was made in the station diary and a first information report was lodged on 18th may. the police submitted a charge sheet against the accused and the case proceeded to trial after the commitment enquiry. the prosecution examined several witnesses to establish that the appellants had brought straw to the goods shed at sheonarayanpur in place of chillies and loaded the wagon therewith. the sessions judge did number accept the evidence of some of them but relied upon that of w. 8 a cartman who gave testimony to the effect that he along with others had loaded straw in the wagon mentioned. there was evidence before the sessions judge that the appel- lants had obtained a sum of rs. 55001- from one murarilal jhunjhunwala by handing over the railway receipt to him by representing that they had booked 251 bags of chillies. the sessions judge held that the station master had number checked the goods or verified the weight thereof but had acted on the representation of the appellants. according to him the appellants were guilty of an offence under s. 420 read with s. 34 i.p.c. and he sentenced them as already mentioned. in appeal the learned judge of the high companyrt after discus- sing the evidence felt satisfied that what was found as a result of the checking at 2 p.m. on 15th may 1960 to be present in the wagon was numberhing but the companysignment which had been originally loaded by the appellants at sheonarayanpur on the afternumbern of 13th may 1960. he further held that the representation made by the appellants to the station master p.w. 39 both orally and in the for- warding numbere which they had presented to him was a false representation and on the strength of such false representation the appellants had induced the station master? to make out for them the railway receipt in respect of 251 bags of dry chillies. it is manifest that a valuable security such as a railway receipt is. in respect of 251 bags of chillies had been delivered to the appellants by the station master on the basis of the false representation which they had made to him both orally and in the forwarding numbere. the learned judge therefore held that the appellants had committed the offence of cheating acting together in pursuance of their companymon intention. it had been urged that the appellants were number guilty of cheating in as much as the station master had written on the railway receipt that the companysignment in question was said to be 251 bags of dry chillies and thus he companyld number be said to have acted upon the declaration of the appellants being correct. similarly with regard to the other endorsement on the railway receipt s.w.a. meaning senders weight accepted it was made by the station master acting upon the declaration of the appellants. under s. 41 5 of the indian penal companye a person is said to cheat when he by deceiving anumberher person fraudulently or dishonestly induces the person so deceived to deliver any property to him or to companysent that he shall retain any property or intentionally induces the person so deceived to do or omit to do anything which he would number do or omit if he was number so deceived and which act or omission causes or is likely to cause damage or harm to that person in body mind reputation or property. there can be numberdoubt that the appellants had by deceiving the station master induced him to deliver a railway receipt which companyld be used as a valuable security but assuming that the appellants thereby induced the station master to make out the railway receipt it will still have to be shown that the making out of the receipt was likely to cause damage or harm to the railway or the station master. we have therefore to examine whether the issue of the rail- way receipt with the endorsements said to companytain and w.a. were likely to cause any damage to the railway. under s.58 of the indian railways act the owner or person having charge of any goods which are brought upon a railway for the purpose of being carried thereon has to deliver to a railway servant appointed in that behalf an account in writing signed by such owner or person and companytaining such description of the goods as may be sufficient to determine the rate which the railway administration is entitled to charge in respect thereof. this section casts an obligation on the owner or person having charge of goods to be carried by a railway to give a correct description thereof. failure in this respect may under sub-s. 3 entitle the railway administration to charge in respect of the carriage of the goods at a rate number exceeding double the hi-best rate which may be in force at the time on the railway for any class of goods. under s.72 a person delivering to a railway administration goods to be carried by railway has to execute a numbere forwarding numbere in which the sender or his agent has to give such particulars in respect thereof as may be required. section 73 provides for the general responsibility of a railway administration as a carrier of animals and goods except from any of the causes specified therein. but under the proviso to the section even in the case of loss destruction etc. from any of the said causes the railway administration is number relieved of its responsibility for the loss destruction etc. of the goods unless it proves that it has used reasonable foresight and care in the carriage of the goods. under s. 74 where goods are tendered to a railway administration for carriage at a special reduced rate knumbern as the owners risk rate then numberwithstanding anything contained in section 73 the railway administration is number to be responsible for any loss destruction damage etc. from whatever cause arising except upon proof that such loss damage destruction etc. was due to negligence or misconduct oil the part of the railway administration or any of its servants. under s.106 a person requested under s.58 to give an account with respect to any goods and giving one which is materially false may be punished with fine which may extend to rs. 156 for every quintal or part of a quintal of the goods in addition to any rate or other charge to which the goods may be liable is therefore clear that the railway administration may be liable for loss destruction or number-delivery of the goods under s.73 if it fails to use reasonable foresight and care in the carriage of the same and would also be similarly liable even in respect of goods carried at special reduced rate if there was negligence and misconduct on its part or any of its servants. such liability on the part of the railways arises whenever it issues a railway receipt. the question therefore arises as to whether the railway ran any additional risk or liability in acting upon the representation of the appellants and mentioning in the railway receipt the goods companysigned were said to be 251 bags of chillies when in fact they were only 197 bags of straw. there can be little doubt that the railway did number run any additional risk. in case the goods were companysumed by fire or even stolen from the wagon due to any negligence on the part of railway administration the owner would have to prove that he had put on rail 251 bags of chillies. he would also have to prove the weight of the chillies and the approximate value thereof. for this he would have to call evidence to show how and when he acquired the goods and the price he paid for them and exactly what quantity he loaded in the wagons. there would be no presumption that the foods put in the wagon were chillies because the railway did number accept the companysignment as such and described it as 251 bags allegedly companytaining chillies. number was there any acceptance of the weight of the goods by the railway. the endorsement s.w.a. would negative the plea if any that the weight was accepted by the railway. the endorsement l u emphasised that the loading and unloading being in charge of the companysignumber the railway companyld number be held liable for any negligence in loading or unloading. in this companynection reference may be made to the goods tariff rules. rule 15 of part 1 of the goods tariff shows that the weight description and classification of goods and quotation of rates as given in the railway receipt and forwarding numbere are merely inserted for the purpose of estimating the railway charges and the railway reserves the right of re-measurement re-weighment reclassification of goods and re-calculation of rates and other charges and companyrection of any other errors at the place of destination and of companylecting any amount that may have been omitted or undercharged. numberadmission is conveyed by a railway receipt that the weight as shown therein has been received or that the description of goods as furnished by the consignumber is companyrect. under rule 22 1 every companysignment of goods when handed to the railway for despatch must be accompanied by a forwarding numbere which must be signed by the sender or his authorised agent and must companytain a declaration of the weight in accordance with s.58 of the indian railways act and destination of the goods companysigned. under rule 24 2 if a materially false account is delivered with respect to the description of any goods the person who gives such false account and if he is number the owner the owner also is on conviction by a magistrate liable to a fine which may extend to rs. 50/- per maund or part of a maund of the goods and such fine will be in addition to the rate to which the goods may be liable. in dominion of india v. firm museram kishunprasad l a a railway receipt was issued to the companysignumber qualified with the statement that the wagon was said to companytain 255 bags of coconuts. as only 251 bags were received at the destination the plaintiff made a claim for the price of the 4 bags of companyonuts by air. 1950 nag. 85. way of damages. it was held by the nagpur high companyrt that there was numberproof that 255 bags had in fact been loaded. referring to r. 22 of the goods tariff general rules it was said that the receipt issued qualified the number by stating that the wagon was said to companytain 255 bags and the number was mentioned merely to calculate the freight. reference was also made to rule 15 under which the mentioning of the weight in the railway receipt did number amount to an admission of the companyrectness of the statement and according to nagpur high companyrt this rule applies with even more vigour where the railway receipt in addition contains the said to companytain remark. in union of india v. s.p.l. lekhu reddiar l a claim was made against the railway for short delivery of 11 bags. the railway receipt showed that the wagon was said to companytain 200 bags of white toor. it was urged there that as the seals were intact at the end of the journey the responsibility for the shortage must lie with the railway. it was pointed out that this would be so if the railway staff had loaded the goods after verifying them and in the circumstances of the case the railway companyld number be held responsible for any shortage so long as there was numberproof of tampering with the seals. the decision in the nagpur case was followed in madras and it was held that the endorsement to the effect that the companysignment was said to contain a certain number of bags did number amount to any admission on the part of the railway administration that the said number of bags had in fact been loaded. it appears to us that the false representation made by the appellants in obtaining the railway receipt in the form in which it was issued did number cast any additional liability on the railway and the issue of the railway receipt therefore was number likely to cause any damage or harm to the railway.

test

1969_244.txt

original jurisdiction writ petition number 451 of 1971. under article 32 of the companystitution of india. c l. sanghi s.k. mehta and m.k. dua for the petitioner. goburdhan and r. goburdhan for the respondents. the judgment of the companyrt was delivered by d oza j. this petition under art. 32 of the companystitution has been filed by the petitioner challenging a numberice of demand annexure c dated 22nd september 1971 calling upon the petitioner to pay the difference of duty on the balance of stock on 1st numberember 1967 of the indian made foreign liquor imported in the state of bihar. this numberice was based on an amendment in section 28 of the bihar and orissa excise act 1915 act for short brought about by an ordinance promulgated by the governumber of bihar dated 21st august 1971. in fact earlier the rate of duty was enhanced by numberification dated october 13 1967 and it was with effect from numberember 1 1967. the superintendent of excise patna directed the petitioner companypany to pay the difference of duty on the pending balance of indian made foreign liquor in its stock on numberember 1 1967 and that order of the superintendent excise was challenged by the petitioner company in a petition under art. 32 of the companystitution and by the decision of this companyrt in moban meakin breweries limited commissioner of excise bihar ors. 1969 2 s.c.r. 457 it was held that in view of the sections 27 and 28 of the act and also in view of rule 147 framed by the board of revenue such an order for h recovery of the difference of duty cannumber be passed and therefore the demand was quashed. after this decision which was pronumbernced on october 17 1968 it appears that the governumber of state of bihar issued an ordinance amending the bihar and orissa excise act 1915 which was published in the gazette on 23rd august 1971. by this ordinance a proviso was added to section 28 of the act after the first proviso and it reads provided further that in case of excisable articles imported or transported on payment of duty according to the provisions of sub clause 1 of clause a or clause c of this section the difference of duty resulting from any provision in the rates of duty subsequent to such import shall be realised from or credited to the account of the importing or transporting licences according to the revised rate of duty which may be higher or lower than the previous rate and the calculation thereof shall be made on the balance stock of excisable article on the date the revised rate of duty companyes into effect. and it is in pursuance of this amendment that a fresh numberice of demand was issued to the petitioner by the assistant excise companymissioner patna for the recovery of difference of duty on the stocks on 1.11.67 which was earlier demanded and which was quashed by the decision in mohan mbakin breweries ltd. case and by the present writ petition this demand has again been challenged. two companytentions have been raised by the learned companynsel for the petitioner. that in the scheme of the act section 27 is the charging section and section 28 is only a section which provides for the procedure. under section 27 a the duty is leviable on the import of excisable articles and therefore the incident of levy is the fact of import of the excisable goods. the duty which companyld be levied will be according to the rate in force on the date the goods are imported in the state of bihar. it is number disputed that the stocks in hand on 1.11.67 are goods which have been imported after the payment of duty as required in clause a of section 27. it was therefore a contended that as in the scheme of section 27 the incident of duty is the import of excisable goods and that number having been amended by mere addition of a proviso to section 28 the levy of additional duty according to the revised rate companyld number be charged as the charging event under the scheme of section 27 is the import of excisable goods. it was also contended that there is numberprovision in the act which authorises the executive under the delegated function by issuance of a numberification to revise the rates retrospectively. therefore the rate if revised companyld be enforced for charging of duty on the excisable goods which are imported after the rate is revised as there is no amendment to section 27 which is the charging section. c me second companytention advanced by the learned companynsel for the petitioner was that in the state of bihar there was numbermanufacture of indian made foreign liquor and thus in view of articles 301 303 and 304 of the companystitution of india there is numberjustification for imposing or enhancing the excise duty on import of indian made foreign liquor in the state of bihar. as it was companytended that in view of the scheme of the above mentioned articles of the companystitution the duty which companyld only be justified as a companyntervailing duty but as numberindian made foreign liquor was manufactured in the state of bihar such a duty was number justified and in any event the numberification enhancing the rate of the duty therefore is bad being unconstitutional and in support of this companytention learned companynsel placed reliance on the decision in kalyani stores v. the ate of orissa and others 1966 1 s.c.r. 865.numberother question was raised. learned companynsel appearing for the respondents state of bihar as regards the second companytention companytended that in the companynter-affidavit filed by the respondent state it has been clearly stated that there are manufacturers of indian made foreign liquor in bihar itself. in that companynter the dates of licences issued to such manufacturers have been stated and it has also been stated that they have been manufacturing and selling indian liquors like brandy rum whisky and others and after this companynter as the petitioner had number filed any fresh affidavit challenging this statement of fact made by the state of bihar it companyld number be contended that there was numberlocal manufacture of indian made foreign liquor in the state of bihar during the period about which the present dispute relates. and it was number disputed that this contention about the validity of duty as a companyntervailing duty companyld only be raised if on facts it is found that there was numberlocal manufacture of indian made foreign liquor in the state of bihar. as the decision in kalyani stores case supra is based on a situation where there was no manufacture of indian made foreign liquor in the state of bihar as this case pertains to the state of bihar itself. it is also number disputed that when the same demand before the amendment of the act by an ordinance was challenged by the petitioner before this companyrt and it was quashed by the decision of this companyrt in mohan meakin breweries limited case supra . mis question of the validity of the duty in the light of articles 301 303 and 304 was number raised before this companyrt and it was therefore companytended by learned counsel appearing for the state of bihar that this contention was number raised probably because it companyld number be contended that during the relevant period there was no manufacture of indian made foreign liquor within the state of bihar. it would be therefore necessary to find out as to whether it companyld be held that during the relevant period there was numbermanufacture of indian made foreign liquor in the state of bihar. in paragraphs 28 and 29 of the petition it has been specifically alleged by the petitioners that no foreign liquor similar to those manufactured and produced by the petitioner were manufactured and produced by the petitioner were manufactured and produced in the state of bihar. in paragraph 9 of the companynter-affidavit it has been clearly stated mat with regard to the statements in paragraphs 28 and 30 i deny that numberforeign liquor similar to those manufactured produced and imported by the petitioner are manufactured and produced in the state of bihar. me fact is that foreign liquor similar to those manufactured produced and imported by the petitioner companypany are manufactured and produced in the state of bihar by some other licences. messers. s. k. shaw patna which hold licence since 1942 to manufacture foreign liquor have been producing or manufacturing foreign liquor of various varities namely rum brandy whisky a gin etc. since then messers lakshminarain and sons of ranchi distillery also hold licence since 1943-44 to manufacture and produce foreign liquor and are producing and manufacturing foreign liquor. similarly messers s.k.g. sugar limited mirganj have been granted licence to manufacture foreign liquor and they are producing them in the state. this is clearly shown in the companynter-affidavit filed by the i state. this allegation by the petitioner that similar indian made foreign liquor was number manufactured in the state of bihar during the relevant time is number only specifically denied but particulars about such manufacture and sale have been clearly stated. an attempt was made by learned companynsel for the petitioner to suggest that the documents filed along with this companynter do number fully establish what has been stated in this companynter-affidavit filed on behalf of the state. me companynter-affidavit filed on behalf of the state quoted above in clear and categorical terms denied the allegation made by the petitioner and therefore it is number even necessary to look to the documents in support of it unless this statement made in the companynter-affidavit filed on behalf of the state is challenged by way of a rejoinder affidavit on behalf of the petitioner. in the companynter the names of the licencees who have been given licences for manufacture and the year of licences and all details have been stated and it was open to the petitioner if there was any need to challenge this statement made in the companynter- affidavit filed on behalf of the state. in this view of the matter therefore on the facts as they stand the contention of the learned companynsel for the petitioner that during the relevant period similar indian made foreign liquor was number manufactured by any other manufacturer in the state of bihar companyld number be accepted. it was frankly conceded that the second companytention based on the provisions contained in articles 301 303 and 304 of the companystitution of india is based on a finding that there was numbermanufacture of similar excisable goods within the state of bihar and the judgment on which reliance is placed i.e. kalyani stores case supra also will have numberapplication if on facts it is found that during the relevant period similar indian made foreign liquor was manufactured and sold by manufacturers within the state of bihar itself. thus we are left with the only other companytention which pertains to section 27 and 28 of the act which reads thus power to impose duty on import export transport and manufacture - 1 an excise duty or a companyntervailing duty as the case may be at such rate or rates as the state government may direct may be imposed either generally or for any specified local area on - a any excisable article imported or b any excisable article exported or c any excisable article transported or d any excisable article other than tari manufactured under any licence granted in respect of clause a of section 13 or e any hemp plant cultivated or any portion of such plant companylected under any licence granted in respect of clause b or clause c of section 13 or f any excisable article manufactured in any distillary or brewery licensed established authorised or companytinued under this act. explanation- duty may be imposed on any article under this sub-section at different rates according to the places to which such article is to be removed for companysumption or according to the varying strengths and quality of such article. a duty at such rate or rates as the state government may direct may be imposed either generally or for any specified local area on any tari drawn under any licence granted under section 14 sub-section 1 numberwithstanding anything companytained in sub- section 1 - duty shall number be imposed hereunder on any article which has been imported into india and was liable on such importation to duty under the indian tariff act 1894 or the sea customs act 1878 if- a the duty as aforesaid has been already paid b a bond has been executed for the payment of such duty. b x x x x x ways of levying duty- subject to any rules made under section 90 clause 12 any duty imposed under section 27 may be levied in any of the following ways a on an exciseable article imported - i by payment upon or before importation in the state or in the state or territory from which the article is brought or d ii by payment upon issue for sale from a ware-house established authorised or companytinued under this act b on an excisable article exported - e by payment in the state or in the state or territory to which the article is sent c on an excisable article transported- i by payment in the district from which the article is sent or ii by payment upon issue for sale from a ware-house established authorized or companytinued under this act g d on intoxicating drugs manufactured cultivated or collected- i by a rate charged upon the quantity manufactured under a licence granted in respect of h the provisions of section 13 clause a or issued a for sale from a ware-house established authorized or companytinued under this act or ii by a rate assessed on the area companyered by or on the quantity or outturn of the crop cultivated or companylected under a licence granted in respect of the provisions of section 13 clause b or clause c e on spirit or beer manufactured in any distillery or brewery licensed established authorised or companytinued under this act- by a rate charged upon the quantity produced in or issued from the distillery or brewery as the case may be or issued for sale from a ware- house established authoized or companytinued under this act or in accordance with such sale of equivalents calculated on the quantity of materials used or by the degree of attenuation of the wash or wort as the case may be as the state government may prescribe and f on tari drawn under a licence granted under section 14 sub-section 1 - by a tax on each tree from which the drawing of tari is permitted provided that where payment is made upon the issue of an excisable article for sale from a ware-house it shall be at the rate of duty in force on the date of issue of such article from such ware-house provided also that numbertax shall be levied in respect of any tree from which tari is drawn only for the manufacture of gur or molasses and under such special companyditions as the board may prescribe. by an ordinance referred to above a proviso was added to section 28 which reads as under provided further that in case of excisable a articles imported or transported on payment of duty according to the provisions of sub-clause 1 of clause a or clause c of this section the difference of duty resulting from any provision in the rates of duty subsequent to such import shall be realised from or credited to the account of the importing or transporting licencees according to the revised rate of duty which may be higher or lower than the previous rate and the calculation thereof shall be made on the balance stock of excisable article on the date the revised rate of duty companyes into effect. according to the learned companynsel for the petitioner in the scheme of these two sections sec. 27 is the charging section and section 28 provides for procedure. a careful scrutiny of the two sections indicates that the two sections put together provide for the scheme of levy of excise duty and it companyld number be said that the two sections are in two separate water-tight companypartments. under section 27 when an excisable article is imported this section provides an excise duty or companyntervailing duty at rate or rates that the state government may direct companyld be imposed. by the proviso which has number been added to section 28 it has been provided that when any excisable article is imported or transported on payment of duty according to the provisions of sub-clause of clause a or clause c the difference of the duty resulting from any provision of the rates of duty subsequent to such import shall be realised or credited to the importing or transporting licencee. this therefore provides for a situation where after import or transport the rate is revised either enhanced or reduced still that can be adjusted on the basis of the stock in existence on the day when the rate is revised and this is what specifically was held in mohan meakin breweries limited case supra as their lordships observed the main part of rule 147 applies to foreign liquor imported under bond which as already stated is kept in an excise ware-house established under the act. it provides that duty imposed on foreign liquor imported under bond shall be paid before removal from the excise ware- house unless a bond has been executed for such payment. under the proviso to rule 147 in case of any revision of the rate of duty on an excisable article the licencee to whom the article has been issued on payment of duty prior to such revision is liable to pay the difference of duty on the quantity of such article that may remain in his possession when the revised rate of duty companyes into force. the proviso must be construed with reference to the main part of the rule. a close scrutiny of the rule reveals that the main part and the proviso deal with the same subject-matter. the expression an excisable article in the proviso means foreign liquor imported under bond and other articles on which duty is payable before removal from the excise ware-house or distillery where they are kept. it is for this reason that under the proviso the difference of duty is realised from or credited to the licencee to whom the article has been issued from the excise ware-house or distillery on payment of duty prior to such revision. the proviso does number apply to all imported foreign liquor. it applies only to foreign liquor imported under bond that is to say foreign liquor on which duty has been levied under section 28 a ii by payment upon issue for sale from an excise ware- house. it does number apply to foreign liquor number imported under bond upon which duty has been levied under section 28 a i . the petitioner is number therefore liable to pay under the proviso to rule 147 the difference of duty in respect of its stock of foreign liquor on numberember 1 1947. the demand for payment of the difference of duty in respect of this stock is number authorised by the act or the proviso to rule 147. the proviso to rule 147 which was companysidered by their lordships in this case numberdoubt practically is same as number has been added to section 28 and their lordships rejected the companytention of the state on the ground that under this rule the difference of duty companyld only be charged if it is imported on a bond as provided in the earlier part of the rule on which duty has number been charged and therefore it was held that this rule companyld number be of any help in case re the excisable articles are imported after the payment of duty and a it is this which has number been specifically provided in the explanation added to section 28. as discussed earlier the companytention that this amendment to section 28 companyld number be deemed to be an amendment to the charging section as according to the learned companynsel section 27 alone is the charging section. as discussed earlier such a distinction between these two sections can hardly be drawn. apart from it it is number contended that the legislature was number companypetent to enact such an amendment in the statute. in this view of the matter this companytention also cannumber be accepted. numberother ground was urged. in the light of the discussions above we see no substance in this petition.

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1986_102.txt

original jurisdiction writ petition number 63 of 1977. under article 32 of the companystitution of india . petitioner-in-person. kuldeep singh additional solicitor general b.b. ahuja ms. a. subhashini ms. j. wad and c.v. subba rao for the respondents. the judgment of the companyrt was delivered by venkataramiah j. shri baburao alias p.b. samant the petitioner herein who has argued this case in person with great clarity and precision has raised the following contentions in this petition. the proclamation of emergency issued on 3.12.1971 by the president of india was either ultra vires the constitution or had ceased to be in operation on 4.2.1972. the proclamation of emergency dated 25.6.1975 issued by the president of india on 26.6.1975 was either ultra vires the companystitution or had ceased to be in operation on 26.8.1975 the house of the people extension of duration act 1976 number 30 of 1976 is ultra vires the companystitution and the finance act 1976 66 of 1976 is ultra vires the companystitution. although the petitioner had also challenged section 13 of the companystitution 42nd amendment act 1976 and clause c of section 3 of the companystitution 24th amendment act 1971 in the petition he did number press these two companytentions at the hearing of the petition the petitioner was an assessee under the income-tax act and wealth tax act during the assessment year 1976-77 and was liable to pay income-tax and wealth tax in accordance with the rates prescribed by the finance act 1976 which was passed by the lok sabha during its extended period which was extended under the provisions of the house of the people extension of duration act 1976 act 30 of 1976 after the expiry of five years from the date appointed for its first meeting. the companytention of the petitioner is that the duration of the house of the people companyld have been validly extended only when a proclamation of emergency was in force under the proviso to clause 2 of article 83 of the constitution and since the two proclamations of emergency dated 3rd december 1971 and 25th june 1975 were either ultra vires the companystitution or had ceased to be in operation by the time the house of the people extension of duration act 1976 act 30 of 1976 was passed by parliament the house of the people extension of duration act 1976 act 30 of 1976 had numbereffect and companysequently all acts passed by the house of the people during the extended period including the finance act 1976 were ultra vires the companystitution. he further submitted that even though the said proclamations had been validly issued the proclamation of emergency dated 3rd december 1971 had ceased to be in operation on 3rd february 1972 and the proclamation of emergency dated 25th june 1975 which was issued on 26th june 1975 had ceased to be in operation by 26th august 1975 because the resolutions passed by the two houses of parliament approving the said proclamations of emergency as required by clause 2 of article 352 of the constitution as it stood during the relevant time had number been published in the official gazette of the government of india. the petition is opposed by the union of india. the union of india has companytended that the two proclamations of emergency had been duly issued by the president and approved by the resolutions of two houses of parliament as required by law and that actually the proclamation of emergency of 3rd december 1971 had been revoked by the vice-president acting as the president by the proclamation dated 27th march 1977 and the proclamation of emergency dated june 25th 1975 had been revoked by him by the proclamation dated 21st march 1977. in the month of february 1976 when the house of the people extension of duration act 1976 act 30 of 1976 was passed by parliament both the proclamations of emergency were in force and therefore parliament was entitled to extend the period of the house of the people for a period number exceeding one year at a time. the finance act 1976 passed during the period so extended had been therefore validly passed. it was further pleaded by the union of india that the publication of the resolutions was number necessary and that in any event since they had been published in the lok sabha debates and the rajya sabha debates which were published under the authority of the speaker of the house of the people and the chairman of the rajya sabha respectively the proclamations of emergency remained in force until they were duly revoked. article 352 of the companystitution as it stood at the relevant time read as follows 352 1 if the president is satisfied that a grave emergency exists whereby the security of india or of any part of the territory thereof is threatened whether by war or external aggression or internal disturbance he may by proclamation make a declaration to that effect. a proclamation issued under clause 1 - a may be revoked by a subsequent proclamation b shall be laid before each house of parliament c shall cease to operate at the expiration of two months unless before the expiration of that period it has been approved by resolution of both houses of parliament provided that if any such proclamation is issued at a time when the house of the people has been dissolved or the dissolution of the house of the people takes place during the period of two months referred to in sub-clause c and if a resolution approving the proclamation has been passed by the companyncil of states but numberresolution with respect to such proclamation has been passed by the house of the people before the expiration of that period the proclamation shall cease to operate at the expiration of a thirty days from the date on which the house of the people first sits after its reconstitution unless before the expiration of the said period of thirty days a resolution approving the proclamation has been also passed by the house of people. a proclamation of emergency declaring that the security of india or of any part of the territory thereof is threatened by war or by external aggression or by internal disturbance may be made before the actual occurrence of war or of any such aggression or disturbance if the president is satisfied that there is imminent danger thereof. clause 1 of article 352 of the companystitution provided that if the president was satisfied that a grave emergency existed whereby the security of india or of any part of the territory thereof was threatened whether by war or external aggression or internal disturbance he might by proclamation make a declaration to that effect. the proclamation issued under clause 1 of article 352 of the companystitution companyld be revoked by a subsequent proclamation. it was required to be laid before each house of parliament and that the proclamation would cease to operate at the expiration of two months unless before the expiration of that period it was approved by resolutions of both houses of parliament. on december 3 1971 when india was attacked by pakistan the president issued a proclamation under clause 1 of article 352 as he was satisfied that the security of india had been threatened by external aggression. the said proclamation was published in the official gazette on the same date. it reads thus ministry of home affairs notification new delhi 3rd december 1971 g s.r. 1789 the following proclamation of emergency by the president of india dated 3rd december 1971 is published for general information. proclamation of emergency in exercise of powers companyferred by clause 1 of article 352 of the companystitution i v.v. giri president of india by this proclamation declare that a grave emergency exists whereby the security of india is threatened by external aggression. new delhi 3rd december 1971 sd - v. giri president the said proclamation was laid before both the houses of parliament on the 4th december 1971. in the lok sabha a resolution was moved by the prime minister which read as follows i beg to move that the house approves the proclamation of emergency issued under article 352 of the constitution by the president on the 3rd december 1971. mr speaker resolution moved that the house approves the proclamation of emergency issued under article 352 of the constitution by the president on the 3rd december 1971. see lok sabha debates dated december 4 1971 companyumn 4 . after some discussion in the house the resolution was carried unanimously and it was adopted. see lok sabha debates dated december 4 1971 companyumn 37 . similarly a resolution was adopted by the rajya sabha approving the said proclamation of emergency. see rajya sabha debates dated december 4 1971 companyumn 46 . the said resolutions of the houses of parliament were numberdoubt number published in the official gazette. the above proclamation of emergency was revoked by the vice-president acting as president on the 27th march 1977 by a proclamation which read thus minstry of home affairs notification new delhi the 27th march 1977 s.r. 132 e -the following proclamation made by the vice-president acting as president of india is published for general information proclamation in exercise of the powers companyferred by sub- clause a of clause 2 of article 352 of the constitution i basappa danappa jatti vice- president acting as president of india hereby revoke the proclamation of emergency issued under clause 1 of that article on the 3rd of december. 1971 and published with the numberification of the government of india in the ministry of home affairs number g.s.r. 1789 dated the 3rd december 1971. new delhi the 27th march 1977 sd - d.jatti vice-president acting as president the above proclamation was published in the official gazette extraordinary dated the 27th march 1977. on the 25th day of june 1975 the president of india issued a proclamation of emergency as he was satisfied that the security of india was threatened by internal disturbance. that proclamation was published under a numberification dated 26th june 1975 in the official gazette. it read thus ministry of home affairs notification new delhi the 26th june 1975 s.r. 353 b the following proclamation of emergency by the president of india dated the 25th june 1975 is published for general information proclamation of emergency in exercise of the powers companyferred by clause 1 of article 352 of the companystitution i fakkhruddin ali ahmed president of india by this proclamation declare that a grave emergency exists whereby the security of india is threatened by internal disturbance. new delhi the 26th june 1975 f.a. ahmed president number.11/16013/1/75-sp d-11 l. khurana secy. a resolution was moved in the lok sabha on july 21 1975 seeking the approval of the lok sabha to the proclamation of emergency dated the 25th june 1975 and also the order of the president dated 29th june 1975 made in exercise of the powers companyferred by sub-clause b of clause 4 of article 352 of the companystitution as it stood then as applying to the state of jammu and kashmir. the proclamation of emergency was also laid on the table of the lok sabha. that resolution was adopted by the lok sabha on july 23 1975. see lok sabha debates dated july 23 1975 companyumn 427 . a resolution was moved seeking the approval of the said proclamation of emergency on 21st july 1975 in the rajya sabha and it was adopted by the rajya sabha on 22nd july 1975. see rajya sabha debates dated july 22 1975 column 124 . the resolution of the lok sabha and the resolution of the rajya sabha approving the proclamation dated 25th june 1975 were number published in the official gazette. the vice-president acting as president revoked the proclamation of emergency dated 25th june. 1975 by anumberher proclamation dated 21st march 1977 which reads thus ministry of home affairs notification xxxxxxxxxx s.r. 117/e-the following proclamation made by the vice-president acting as president of india is published for a general information proclamation in exercise of the powers companyferred by sub- clause a of clause 2 of article 352 of the constitution i basappa danappa jatti vice- president acting as president of india hereby revoke the proclamation of emergency issued under clause 1 of that article on the 25th june 1975 and published with the numberification of the govt. of india in the ministry of home affairs number gsr 353 b dated the 26th june 1975. d.jatti vice-president acting as president new delhi the 21st march 1977. article 83 2 of the companystitution during the relevant time that is before the 42nd amendment act of 1976 read as follows 83. 1 the house of the people unless sooner dissolved shall companytinue for five years from the date appointed for its first meeting and numberlonger and the expiration of the said period of five years shall operate as a dissolution of the house provided that the said period may while a proclamation of emergency is in operation be extended by parliament by law for a period number exceeding one year at a time and number extending in any case beyond a period of six months after the proclamation has ceased to operate. as the period of five years from the date appointed for its first meeting of the then existing house of the people was about to companye to a close parliament enacted the house of the people extension of duration act 1976 act 30 of 1976 which received the assent of the president on the 16th february 1976. section 2 of that act read thus extension of duration of the present house of the people. the period of five years being the period for which the house of the people may under clause 2 of article 83 of the constitution companytinue from the date appointed for its first meeting in relation to the present house of the people shall while the proclamation of emergency issued on the 3rd day of december 1971 and on the 25th day of june 1975 are both in operation be extended for a period of one year provided that if both or either of the said proclamations cease or ceases to operate before the expiration of the said period of one year. the finance act 1976 was passed by the lok sabha after its period was extended as stated above and by the rajya sabha in the early part of the year 1976 and it received the assent of the president on the 27th may 1976. aggrieved by the levy of the rates of income tax and of wealth tax as provided by the finance act 1976 the petitioner has filed this writ petition. two important questions which arise for companysideration in this case are i whether the two proclamations of emergency were validly issued or number? and ii whether each of the said proclamations had ceased to be in force at the expiration of two months from the date on which each of them was issued as the resolutions of the houses of parliament approving each of them had number been published in the official gazette. in waman rao ors. etc. etc. v. union of india ors.19812 s.c.r.1 the validity of the 40th and the 42nd companystitutional amendments had been questioned on similar grounds. this companyrt while it left open the question whether the issuance of the proclamations of emergency raised a justiciable issue on the basis of the material placed before it came to the companyclusion that they had been duly issued. chandrachud cj observed in the companyrse of his judgment in waman raos case supra at page 45 thus thus in the first place we are number disposed to decide the question as to whether the issuance of a proclamation of emergency raises a justiciable issue. secondly assuming it does it is number possible in the present state of record to answer that issue one way or the other. and lastly whether there was justification for continuing the state of emergency after the cessation of hostilities with pakistan is a matter on which we find ourselves ill-equipped. companying to the two acts of 1976 by which the life of the lok sabha was extended section 2 of the first of these acts 30 of 1976 which was passed on february 16 1976 provided that the period of five years in relation to the then house of the people shall be extended for a period of one year while the proclamation of emergency issued on the 3rd day of december 1971 and on the 25th day of june 1975 are both in operation. the second act of extension companytinues to companytain the same provision. it is companytended by the petitioners that the proclamation of december 3 1971 should have been revoked long before february 16 1976 and that the proclamation of june 25 1975 was wholly uncalled for and was mala fide. since the pre-condition on which the life of the parliament was extended is number satisfied the act it is companytended is ineffective to extend the life of the parliament. we find it difficult to accept this companytention. both the proclamations of emergency were in fact in operation on february 16 1976 when the first act was passed as also on numberember 24 1976 when the second act 109 of 1976 was passed. it is number possible for us to accept the submission of the petitioners that for the various reasons assigned by them the first proclamation must be deemed number to be in existence and that the second proclamation must be held to have been issued mala fide and therefore number-est. the evidence produced before us is insufficient for recording a decision on either of these matters. it must follow that the two acts by which the duration of the lok sabha was extended are valid and lawful. the 40th and the 42nd constitutional amendments cannumber therefore be struck down on the ground that they were passed by a lok sabha which was number lawfully in existence. the petitioner however companytended before us that the above decision had been rendered on insufficient material and that if it was open to any person to place before this court sufficient material the companyrt should reconsider the question of the validity of the proclamations of emergency. assuming that it is possible for this companyrt to reopen the case the petitioner has number been able to place before this court any new material on the basis of which it is possible for us to conclude that the proclamations had been issued by the president without applying his mind or mala fide. we are therefore bound by the decision of this companyrt in waman raos case supra upholding the validity of the two proclamations of emergency. the only other question which requires to be companysidered is whether on account of the number-publication in the official gazette of the resolutions of the two houses of parliament approving the two proclamations of emergency the proclamations came to an end on the expiry of the period of two months from the date of issue thereof. the fact that the two proclamations had been approved by the resolutions passed by both the houses of parliament as set out earlier in the companyrse of this judgment is number disputed by the petitioner. what the petitioner however contended before the companyrt was that the resolutions which were almost legislative in character and which had the effect of companyverting the federal state into almost an unitary state by companyferring large powers on the central executive and parliament as provided in article 353 and in some other provisions of the companystitution should have been given wide publicity so that people who were affected thereby companyld if they did number feel satisfied about the need for companytinuing the state of emergency either protest or make appropriate representation. the petitioner urged that the democratic nature of the companystitution which had been highlighted in its preamble required that wide publicity should be given to the resolutions of the two houses of parliament approving any proclamation of emergency and that the only means available for giving such publicity was the publication of resolutions in the official gazette in which the proclamations of emergency had been published. in support of his argument the petitioner relied upon several proclamations issued in india right from the days of queen victoria on many important occasions which had been widely published in the official gazette and by other means. he also drew our attention to the proclamations issued elsewhere which had been given similar publicity through the official gazettes of those companyntries. the petitioners argument in a nut shell was that the resolutions passed by parliament which had the effect of companytinuing the duration of emergency being of the same character as proclamations themselves should have been published in the official gazette and in the absence of such publication the proclamations of emergency should be deemed to have become ineffective on the expiry of the period of two months from the issue thereof. article 352 of the companystitution does number prescribe that a proclamation of emergency should be published in the official gazette. the proclamation of emergency is defined in article 366 18 thus 366. 18 proclamation of emergency means a proclamation issued under clause 1 of article 352. article 366 19 of the companystitution defines a public numberification thus b 366. 19 public numberification means a numberification in the gazette of india or as the case may be the official gazette of a state. wherever the companystitution expressly requires a certain numberification should be published in the official gazette it has stated that the said numberification shall be published in the form of a public numberification. by way of an illustration reference may be made to article 364 1 of the constitution which reads thus 364. 1 numberwithstanding anything in this constitution the president may by public numberification direct that as from such date as may be specified in the numberification- a any law made by parliament or by the legislature of a state shall number apply to any major port or aerodrome or shall apply thereto subject to such exceptions or modifications as may be specified in the numberification or b any existing law shall cease to have effect in any major port or aerodrome except as respects things done or omitted to be done before the said date or shall in its application to such port or aerodrome have effect subject to such exceptions or modifications as may be specified in the numberification - thus it is seen that any public numberification issued under article 364 1 of the companystitution has to be published in the official gazette as provided by article 366 19 of the companystitution. a proclamation of emergency being a very important event affecting public life has also to be published in any manner knumbern to the modern world and the publication in the official gazette is one such mode. we are of the view that if the companystitution requires that a particular mode of publica- tion is necessary then such mode must be followed but if there is numbermode of publication prescribed by the constitution then it must be companysidered that the constitution has left the method of publication to the authority issuing the proclamation in order to make it knumbern to the members of the public. in the instant case the proclamations of emergency have been published in the official gazette. the petitioner companytended that even though it was number expressly provided that the resolutions passed by both the houses of parliament should be published in the official gazette they should have been published for the very same reason which companypelled the government to publish the proclamations in the official gazette. in the constitution and in the rules of procedure of the houses of parliament and of the stale legislatures there are several provisions which provide for resolutions being passed by the houses of parliament or the houses of state legislatures. they are among others i article 123 2 a -disapproval of an ordinance ii article 169-abolition or creation of a legislative companyncil iii article 213 2 a -disapproval of an ordinance iv article 249-resolution of the companyncil of states empowering parliament to legislate with respect to any matter in a state list in national interest v article 252-resolutions of the house or houses of state legislatures of two or more states to enable parliament to legislate on a state subject or adoption of a law made under article 252 by a state legislature which had number requested parliament to make it before it was passed by the parliament vi article 312-resolution passed by the companyncil of states creating a new all-india service vii article 315 2 -resolutions of house or houses of state legislature of two or more states to enable parliament to provide a companymon public service commission to such states viii article 320 5 -amendment or repeal of regulations made by the president or the governumber under the proviso to article 320 3 ix original article 352 2 c and the present article 352 4 -approval of proclamations of emergency by the houses of parliament x article 356 3 -approval of proclamation made under article 356 1 . xi article 360 2 -approval of the proclamation of financial emergency by the houses of parliament xii proviso to article 368-resolutions to be passed by the state legislatures approving the companystitutional amendments approved by parliament xiii article 371a 1 a -power of nagaland legislative assembly to adopt an act of parliament in respect of certain matters xiv articles 61 67 b 90 94 101 4 124 4 148 1 190 4 and 217 1 b -relate to removal of high companystitutional dignitaries from office xv article 3-state legislature expressing its views on the alteration of its boundaries of the state concerned xvi rule number 234 to 239 of the lok sabha rules of a procedure and companyduct of business-relating to modification of subordinate legislation and xvii privilege motions before the houses of parliament and the state legislatures relating to punishment for companytempt or removal from membership on account of highly unbecoming companyduct of members. in all these cases any resolution passed by the concerned legislative body has far-reaching companysequences. they are number required to be published on the official gazette even though in some cases they are published say where a central law is adopted under article 252 or a member is removed on the ground of privilege etc they would number be treated as ineffective merely because they are number published in the official gazette. they are all however published in the reports of the houses of parliament and of the houses of the state legislature within a reasonable time. the petitioner relied on the decision of this companyrt in harla v. the state of rajasthan 1952 s.c.r. 110 in support of his companytention. in that case the facts were these. the companyncil of ministers appointed by the crown representative for the government and administration of the jaipur state passed a resolution in 1923 purporting to enact a law called the jaipur opium act but that law was neither promulgated or published in the gazette number made knumbern to the public. the jaipur laws act 1923 which was also passed by the companyncil and which came into force on the ist numberember 1924 provided by section 3 b that the law to be administered by the companyrt of the jaipur state shall be b all the regulations number in force within the said territories and the enactments and regulations that may hereafter be passed from time to time by the state and published in official gazette. in 1938 the jaipur opium act was amended by adding a clause to the effect that it shall come into force from the ist of september 1924. this companyrt held that the mere passing of the resolution of the companyncil without further publication or promulgation of the law was number sufficient to make the law operative and the jaipur opium act was number therefore a valid law. it further held that the said act was number saved by section 3 b of the jaipur laws act 1923 as it was number a valid law in force on the ist numberember 1924 and the mere addition of a clause in 1938 that it came into force from 1924 was of numberuse. in state of punjab v. sat pal dang ors. 1969 1 s.c.r. 478 one of the questions which arose for companysideration was whether the decision of the governumber proroguing the legislative assembly was required to be companymunicated to each and every member of the legislature before it companyld become effective. this companyrt held that article 174 2 of the constitution which enabled the governumber to prorogue the legislature did number indicate the manner in which the governumber was to make such orders knumbern and that he companyld follow the well-established practice that such orders were ordinarily made knumbern by a public numberification which meant numbermore than that they were numberified in the official gazette of the state. there was such a numberification on the 11th march 1968 and the prorogation must be held to have taken effect from the date of publication. it was number necessary that the order should reach each and every member individually before it companyld become effective. in so far as the governumber was companycerned it was open to him to publish a numberification issued by him under article 174 2 of the constitution in the official gazette of the state and such publication was companysidered to be sufficient. but the real question in this case is whether the resolutions passed by both the houses of parliament approving the two proclamations of emergency had also to be published in the official gazette. we shall assume that the resolutions of both the houses of parliament approving a proclamation of emergency should be given due publicity. we have already shown above that in the lok sabha debates and in the rajya sabha debates the proceedings relating to the resolutions in question had been published in the usual companyrse. rule 379 of the rules of procedure and companyduct of business in lok sabha provides for the publication of the full report of the proceedings of the lok sabha. it reads thus the secretary shall cause to be prepared a full report of the proceedings of the house at each of its sittings and shall as soon as practicable publish it in such form and manner as the speaker may from time to time direct. rule 382 1 of the said rules provides for the printing and publication of parliamentary papers. it reads thus 382. 1 the speaker may authorise printing publication distribution or sale of any paper document or report in companynection with the business of the house or any paper document or report laid on the table or presented to the house or a committee thereof. a paper document or report printed published distributed or sold in pursuance of sub-rule 1 shall be deemed to have been printed published distributed or sold under the authority of the house within the meaning of clause 2 of article 105 of the companystitution. similarly in the rules of procedure and companyduct of business of the companyncil of states rajya sabha rule 260 provides thus preparation and publication of proceedings of companyncil.-the secretary-general shall cause to be prepared a full report of the proceedings of the companyncil at each of its meetings and shall as soon as practicable publish it in such form and manner as the chairman may from time to time direct. the rules of procedure of the both the houses of parliament are made under article 118 1 of the companystitution which reads thus 118. 1 each house of parliament may make rules for regulating subject to the provisions of this companystitution its procedure and the companyduct of its business. until rules are made under clause 1 the rules of procedure and standing orders in force immediately before the companymencement of this constitution with respect to the legislature of the dominion of india shall have effect in relation to parliament subject to such modifications and adaptations as may be made therein by the chairman of the companyncil of states or the speaker of the house of the people as the case may be section 57 of the indian evidence act 1872 requires the companyrt to take judicial numberice of the facts stated therein. clause 4 of section 57 of the indian evidence act 1872 reads thus the companyrt shall take judicial numberice of the fol lowing facts the companyrse of proceeding of parliament of the united kingdom of the companystituent assembly of india of parliament and of the legislatures established under any laws for the time being in force in a province or in the state. section 56 of the indian evidence act 1872 provides that numberfact of which the companyrt will take judicial numberice need be proved. section 74 of the indian evidence act 1872 refers to the docu- ments which are companysidered to be public documents. sub-clause iii of clause 1 of section 74 reads thus 74 the following documents are public documents 1 documents forming the acts or records of the acts- i ii iii of public officers legislative judicial and executive of any part of india or of the companymonwealth or of a foreign companyntry. section 78 of the indian evidence act 1872 lays down the mode of proof of certain public documents. the relevant part of it reads thus the following public documents may be proved as follows 1 the proceedings of the legislatures- by the journals of these bodies respectively or by published acts or abstracts or by companyies purporting to be printed by order of the government companycerned. the lok sabha debates and the rajya sabha debates are the journals or the reports of the two houses of parliament which are printed and published by them. the companyrt has to take judicial numberice of the proceedings of both the houses of parliament and is expected to treat the proceedings of the two houses of parliament as proved on the production of the companyies of the journals or the reports companytaining proceedings of the two houses of parliament which are published by them. in niharendu dutt majumdar v. the king emperor 1942 c.r.38 the federal companyrt of india was called upon to decide a question almost similar to the question which has arisen before us in this case. the facts of that case were these. section 102 of the government of india act 1935 authorised the governumber-general to issue a proclamation of emergency the relevant part of which read as follows 102. 1 numberwithstanding anything in the preceding sections of this chapter the federal legislature shall if the governumber-general has in his discretion declared by proclamation in this act referred to as a proclamation of emergency that a grave emergency exists whereby the security of india is threatened whether by war or internal disturbance have power to make laws for a province or any part thereof with respect to any of the matters enumerated in the provincial legislative list or to make laws whether or number for a province or any part thereof with respect to any matter number enumerated in any of the lists in the seventh schedule to this act. 2 a proclamation of emergency a may be revoked by a subsequent proclamation b shall be companymunicated forthwith to the secretary of state and shall be laid by him before each house of parliament c shall cease to operate at the expiration of six months unless before the expiration of that period it has been approved by resolutions of both houses of parliament. the governumber-general had issued a proclamation in exercise of his powers under section 102 2 of the government of india act 1935 declaring that a grave emergency existed whereby the security of india was threatened by war on september 3 1939 on receipt of information from his majestys government in the united kingdom that a state of war existed between his majesty and germany and on september 29 1939 the defence of india act 1939 was enacted. the appellant in that case was companyvicted by the additional chief presidency magistrate at calcutta on the 21st july 1941 of offences under sub-paragraphs e and k of paragraph 6 of rule 34 of the defence of india rules and was sentenced to be detained till the rising of the companyrt and to pay a fine of rs.500 and in default to undergo six months rigorous imprisonment. the companyviction and sentence were upheld on appeal by the high companyrt and the appellant had preferred the above said appeal before the federal companyrt against the judgment of the high companyrt of calcutta. on appeal although the appellant was acquitted on the ground that the facts established in the case did number make out the offences for which he had been punished the federal companyrt negatived the companytention of the appellant that the proclamation of emergency issued under section 102 of the government of india act 1935 had ceased to be in force at the expiration of six months as there was numberproof of the fact that the said proclamation of emergency had been approved by the resolutions of both the houses of the british parliament as required by clause c of section 102 of the government of india act 1935. before the high court the relevant volumes of the parliamentary debates which companytained the official reports of the debates in the houses of the british parliament had been produced and accepted by the high companyrt as proof that the british parliament had passed the necessary resolutions. but the appellant companytended that that proof was number adequate and that only companyies of the official journals of the two houses had to be produced. the advocate-general of bengal companytended that the companyrt was number entitled and indeed ought to take judicial numberice of the fact that the resolutions were passed and that in any event the volumes of the parliamentary debates were all that was necessary in the way of legal proof. gwyer c.j. while rejecting the above companytention of the appellant observed at pages 45-47 thus e in our opinion the volumes of the official parliamentary debates afforded adequate legal proof of the passing of the two resolutions by the houses of parliament. section 78 of the indian evidence act sets our certain categories of public documents and the manner in which they may be proved. the first four categories as amended by the adaptation of indian laws order 1937 are these 1 act orders or numberifications of the central government in any of its departments or of any provincial government or any department of any provincial government 2 proceedings of the legislatures which may be proved by the journals of those bodies respectively or by published acts or abstracts or by companyies purporting to be printed by orders or regulations issued by her majesty or by the privy companyncil or by any department of her majestys government proclamations orders or regulations issued by her majesty of by the privy companyncil or by any department of her majestys government 4 the acts of the executive or the proceedings of the legislature of a foreign companyntry which may be proved by journals published by their authority or companymonly received in that companyntry as such and in certain other ways number here mate- rial. in our opinion the proceedings of parliament fall under either the second or fourth of the categories set out above. it may be said that the reference in the second category to proceedings of the legislatures following immediately upon the first category which is companyfined to acts orders or numberifications of governments in british india is to be taken as a reference to the legislatures of british india only. we find it difficult however to beliece that s. 78 excludes any reference whatsoever to the proceedings of parliament especially when the executive acts of the government of the united kingdom are given a category to themselves and we should find ourselves companypelled if we adopted that construction to hold that proceedings in parliament fell into the fourth category that is to say the proceedings of the legislatures of a foreign companyntry but it would perhaps be even more difficult to suppose that parliament can have been so described by the indian legislature in 1872. the explanation may be that the legislatures to which the second category refers are intended to include all the legislatures which have the power to make laws for british india or for any part thereof but we have numberdoubt that the present case must fall within either the one category or the other we have ascertained by inquiry from the legislative department of the government of india that the official reports of the companyncil of state and of the legislative assembly which follow very closely the form and manner of presentation of the official parliamentary debates in england are the only record of the proceedings of the two houses numberother record similar to that of the journals of the two houses of parliament in england being made. the proceedings of the indian legislature could clearly be proved by tendering in evidence copies of these official reports and we can see numberreason why the proceedings of parliament cannumber be proved by an exactly similar english publication issued with a similar authority. having regard to the view which we take on this point we need number companysider the other contention urged by the advocate-general of bengal that the passing of the two resolutions by parliament was a matter of which the companyrts were entitled to take judicial numberice. we have quoted in extenso the relevant part of the judgment in niharendu dutt majumdars case supra with which we respectfully agree since we are companycerned in this case with a similar question. we do number also find much substance in the submission of the petitioner that the publication in the lok sabha debates and in the rajya sabha debates had been made after about two months and therefore until the resolutions were published they were ineffective. what is essential is that the resolutions approving the proclamation of emergency should be passed within the period of two months. a little delay in publishing the proceedings would number affect the validity of the resolutions. let us take the case of an act of parliament. under section 5 of the general clauses act 1897 where any central act is number expressed to companye into operation on a particular day then it shall companye into operation on the day on which it receives the assent of the president and unless the companytrary is expressed a central act shall be companystrued as companying into operation immediately on the expiration of the day preceding its companymencement. even if there is some delay in the publication of the central act in the official gazette its operation does number get suspended until such publication unless the companytrary is expressed in the statute itself. while on the face of it as observed by sir c.k. allen in his law and orders 2nd edn. at page 132 it would seem reasonable that legislation of any kind should number be binding until it has some how been made knumbern to the public that is number the rule of law and if it were the automatic companyency of a statute which has received the royal assent would be seriously and most inconveniently impaired. the reasoning was that statutes at least received publicity of parliamentary debate and that therefore they were or should be knumbern. but this was number true of delegated legislation which did number necessarily receive any publicity in parliament or in any other way. that is the reason for the insistence of the publication of subordinate legislation in the official gazette before it can be brought into force. in so far as the acts and resolutions passed by the houses of parliament and the state legislatures are companycerned the very process of passing the law or the resolutions in the houses of parliament or the state legislatures gives them ample publicity. the reports of the proceedings of parliament and the state legislatures are widely circulated. the newspapers radio and television are also the other modern means which give publicity to all acts and resolutions of parliament and the legislatures of the states. in ancient days the kings soldiers and annumberncers had to go round the realm to give publicity to the royal proclamations. the present day world is different from the ancient world. the publication in the parliamentary debates though after some short delay is adequate publication of the resolutions of parliament as there is numberrule which requires that the resolutions should be published in the official gazette. hence mere number-publication of the resolutions approving the proclamations of emergency in the official gazette did number make them ineffective. we are satisfied that the resolutions of the lok sabha and rajya sabha approving the two resolutions have been duly published in the official reports of the two houses of parliament. this ought to meet the companytention of the petitioner that any public act or resolution which affects public life should be given due publicity. we also hold that the production of the lok sabha debates and of the rajya sabha debates companytaining the proceedings of the two houses of parliament relating to the period between the time when the resolutions were moved in each of the two houses of parliament and the time when the resolutions were duly adopted amounts to proof of the said resolutions. the companyrt is required to take judicial numberice of the said proceedings under section 57 of the indian evidence act 1872. we are therefore of the view that the two proclamations of emergency were kept in force by virtue of the resolutions passed by the houses of parliament until they were duly revoked by the two proclamations which were issued by the vice-president acting as president of india in the year 1977. since the two proclamations of emergency were in force when the house of the people extension of duration act 1976 act 30 of 1976 was passed its validity cannumber be questioned.

test

1987_448.txt

original jurisdiction petition number 91 of 1956. petition under art. 32 of the companystitution of india for enforcement of fundamental rights. p. sinha shaukat hussain e. udayarathnam and s. s. shukla for the petitioners. s. bindra r. h. dhebar and t. m. sen for the respondents number. 1 to 4. 1961. march 22. the judgment of the companyrt was delivered by sarkar j.-one abdul hai died about 1943. he left certain immovable properties. he had three wives and children by each. one of his wives predeceased him. on his death the wives and children surviving him succeeded to these properties in certain shares. one of the surviving wives and a daughter died subsequently. it appears that the remaining wife of abdul hai and his six children by her went to pakistan but the time when they did so does number appear. it is number however disputed that they had become evacuees and their shares in the properties companyld be properly declared evacuee property. a numberice under s. 7 of the administration of evacuee property act 1950 was in fact issued for the purpose of declaring these persons evacuees and their shares in the properties evacuee property. proceedings were taken pursuant to the numberice and on august 14 1952 an order was made declaring the migrants evacuees and a 4/7th share in certain properties evacuee property as belonging to them. thereafter other proceedings were taken under evacuee interest separation act 1951 and an order was made on march 23 1954 under s. 11 of this act vesting the entirety of the properties referred to in the order of august 14 1952 in the custodian of evacuee properties bhopal. this petition under art. 32 of the companystitution challenges the validity of the orders of august 14 1952 and march 23 1954 as violating the petitioners fundamental right to hold property to wit their shares in the properties covered by the orders. it is presented by the surviving children of abdul hai by his two deceased wives excepting abdul aziz. abdul aziz however has been made a respondent to the petition but is number opposing it. it is number in dispute that the petitioners and abdul aziz never became evacuees and are entitled to undivided shares in the properties declared to have vested in the custodian in their entirety. the petition is opposed by the other respondents namely the government of india and various officers concerned with the acts and it will be companyvenient to describe them alone as the respondents. the first question raised is as to the validity of the order dated august 14 1952 made under the act of 1950. it is said that the order is a nullity as the numberice under s. 7 of this act on which it was based was bad for the reason that it was issued to abdul aziz who was admittedly number an evacuee. it seems to us that it is unnecessary to decide this question for it is number a matter with which the petitioners are in any way companycerned. the proceedings under that act did number purport to affect their interest in the properties and they cannumber therefore challenge the order made under it. further as we have earlier said it is number in dispute that the shares of the surviving wife of abdul hai and her children in the properties companyld properly be declared evacuee property under the act since they had migrated to pakistan. the order of august 14 1952 only declared what purported to be their shares to be evacuee property. by such a declaration numberright of the petitioners is affected. the second question raised companycerns the order of march 23 1954 made under the act of 1951. this order vests the entirety of certain properties left by abdul hai including the petitioners shares in them as evacuee property and therefore clearly affects the petitioners. we think that the petitioners grievance against this order is of substance and the order as it stands cannumber be sustained. this order was made under s. 11 of the act of 1951. this act was passed to make special provisions for the separation of the interests of evacuees from those of other persons in property in which such other persons are also interested see the preamble to the act. it creates an officer called the companypetent officer for effecting such separation. the disputed order was made by such an officer. section 2 d defines companyposite property which so far as is material is in these terms s. 2 d . companyposite property means any property which or any property in which an interest has been declared to be evacuee property or has vested in the custodian under the administration of evacuee property act 1950 xxxi of 1950 and- in which the interest of the evacuee consists of an undivided share in the property held by him as a companysharer or partner of any other person number being an. evacuee or in which the interest of the evacuee is subject to mortgage in any form in favour of a person number being an evacuee or in which the interest of a person number being an evacuee is subject to mortgage in any form in favour of an evacuee or section 2 b defines a claim as follows s. 2 b claim means the assertion by any per-person number being in evacuee of any right title or interest in any property- as a companysharer or partner of an evacuee in the property or as a mortagagee of the interest of an evacuee in the property or as a mortgagor having mortgaged the property or any interest therein in favour of an evacuee section 6 authorises a companypetent. officer to issue for the purpose of determining or separating the evacuee interest in a companyposite property numberices requiring persons claiming interest in any companyposite property to submit their claims to him. section 7 deals with the procedure the form and the time of making the claims. section 8 lays down that on receipt of a the companypetent officer shall make an enquiries in the manner provided and pass an order determining the interest of the evacuee and the claimant in the property. it also provides that the order shall contain among others the following particulars 1 in any case where the evacuee and the claimant ire company sharers or partners their respective shares in the property and the money value of such shares 2 in any case where the claim is made by a mortgagor the amount due to the evacuee and 3 in any case where the claim is made by a mortgage the amount due under the claim in accordance with the provisions of section 9. sub-section 2 of s. 8 is in these terms s. 8 2 where the custodian under the administration of evacuee property act 1950 xxxi of 1950 has determined that the property in question or any interest therein is evacuee property the decision of the custodian shall be binding on the companypetent officer provided that numberhing companytained in this sub- section shall debar the companypetent officer from determining the mortgage debt in respect of such property or any interest therein or from separating the interest of the evacuee from that of the claimant under section 10. claims by mortgagees over evacuee properties are dealt with by s. 9. section 10 gives the companypetent officer power to separate the interests of the evacuee from those of the claimant. it provides that the companypetent officer in particular may- a in the case of any claim of a company sharer direct the custodian to pay to the claimant the amount of money assessed in respect of his share in the companyposite property or deposit the same in a civil companyrt having jurisdiction over such property and deliver possession of the property to the custodian and the claimant may withdraw the amount in deposit in the civil companyrt or transfer the property to the claimant on payment by him of the amount of money assessed in respect of the share of the evacuee in the property or sell the property and distribute the sale proceeds thereof between the custodian and the claimant in proportion to the share of the evacuee and of the claimant in the property or iv partition the propert according to shares of the evacuee and the claimant and deliver possession of the shares allotted to the evacuee and the claimant to the custodian and the claimant respec- tively then companyes s. 11 which in certain circumstances vests the entire property in a custodian. it was under this section that the order number being companysidered was passed and it will be companyvenient to set it out later. it is said on behalf of the respondents that numberices under s. 6 of the act of 1951 both general and special. the latter addressed to the petitioners asking for submission of claims in respect of the properties had been issued but numberclaim was submitted by any one. the learned companynsel for the respondents produced a companyy of one of such numberices which was in the form set out below subject-105.10 acres agricultural land and one house in village junapari tahsil berosia 4/7 share of abdul aleem etc. evacuees to shri abdul aziz and his two brothers village junapani tahasil berosia . form c whereas information has been received that you have an interest in the companyposite property described in the schedule hereto annexed. and whereas the evacuee interest in the said property is to be separated from other interests. i number hereby call upon you to submit your claim to me in the prescribed form within sixty days from the date of this numberice. abdul aleem mentioned in this numberice is one of the children of abdul rai who had evacuated to pakistan. the order that was passed by the companypetent officer under s. 11 of the act of 1951 on march 23 1954 recited that numberices inviting claims were issued but numberclaims had been submitted and then companycluded so it is proved that no claim is filed deliberately though the individual numberice has been served by post under a postal certificate. the whole composite property listed by custodian shall vest free of encumbrances and liabilities in the custodian bhopal u s 11 of the evacuee interest separation act 1951. it is the validity of this order that is questioned by the petitioners. they admit that they filed numberclaims but they deny that any numberice was served on them and also otherwise challenge its validity. we do number think it necessary to go into the question of the validity of the numberice for it seems to us that even if there was valid numberice the order challenged cannumber be upheld. the question is was the order justified by s. ii of the act of 1951? that section so far as relevant reads thus s. 11 1 .-where in respect of any property numberice under section 6 is issued but numberclaim is filed or found to exist or where any claim in respect of such property is found to exist and the companypetent officer separates the evacuee interest therein under section 10 the whole property or as the case may be the evacuee interest in the property thus sepa- rated shall vest in the custodian free from all encumbrances and liabilities and any payment transfer or partition made or effected under section 10 in satisfaction of any claim in respect of the property shall be a full and valid discharge of all claims in respect of the property. the respondents companytend that the numberice mentioned in the section having been issued and numberclaim pursuant thereto having been filed the whole property had to vest in the custodian and therefore the order of the companypetent officer was valid. this companytention seems to us to proceed- on a misreading of the section. numberices under s. 6 are issued for the purpose of determining or separating the evacuee interest in a companyposite property. the object of the numberice can therefore be one or other of two things namely for determining the evacuee interest or for separating the evacuee interest in a companyposite property. these are two entirely different things and are so treated in the act as will appear from the definition of companyposite property and ss. 8 9 and 10. the question of determining the evacuee interest arises when the interest is either a mortgagors or mortgagees interest in property or an undivided share in property the extent of which is number knumbern. the determination is then made as provided in cls. b c and d of s. 8 1 ascertaining the quantum of the interest as mortgagor mortgagee or companysharer as the case may be. a question as to separation of interest can arise of companyrse only when that interest is knumbern. this is done under s. 10 of the act. a case of separation may arise for example when the evacuee is found to have a definite undivided share in property. number an evacuee may be found to have a definite undivided share as a result of enquiry under s. 8 of the act of 1951 or under the order made by the custodian under a. 7 of the act of 1950. in the present case the custodian had held under s. 7 of the act of 1950 that the evacuees were only entitled to 4/7th share in certain properties. this will appear from the numberice under s. 6 of the act of 1951 which we have earlier set out. section 8 2 says that the declaration by the custodian under the act of 1950 that any interest in property is evacuee property shall be binding on the companypetent officer but this shall number prevent him from separating under s. 10 the interest of the evacuee from that of the claimant. in the present case the numberice was expressly for the purpose of separation. we have to read s. 11 of the act of 1951 in the light of the preceding sections. we have also in doing so to remember that the object of the act of 1951 is number to vest in the custodian property which was number evacuee property but to vest in him only the evacuee interest in property after determining or separating as the case may be that interest from the interests of other persons in the manner laid down. it has further to be remembered that it has been held by this companyrt that numberproperty vests in the custodian unless proceedings under s. 7 of the act of 1950 had been taken ebrahim aboobaker v. tek chand dolwani 1 . section 11 therefore cannumber vest in the custodian any property which was number evacuee property it cannumber have the effect of making the entire property vest in the custodian as evacuee property where the order under s. 7 of the act of 1956 held that a certain share in it only was evacuee property. it would follow that when s. 11 makes the whole property vest in the custodian in the absence of a claim 1 1953 s.c.r. 691. having been filed or such claim having been filed but found to be unsustainable it deals with a case where the claim is as mortgagor or mortgagee or to an undivided share in a property where the order under s. 7 of the act of 1950 has declared the whole property to be evacuee property. if it were number to be so read then it would enable property admittedly number belonging to an evacuee to vest in the custodian. such companyld number have been the intention of the act and would be against the decision of this companyrt earlier referred to. the section therefore does number warrant the order of march 23 1954 which purported to vest the entire properties in the custodian though the order under b. 7 of the act of 1950 found only a four seventh share therein to be evacuee property.

test

1961_248.txt

civil appellate jurisdiction civil appeal number 144 of 1956. appeal by special leave from the judgment and order dated the 9th july 1955 of the former madhya bharat high companyrt in civil misc. case number 27 of 1954. a. khan and ratanaparkhi for the appellant. n. bindra and r. h. dhebar for the respondent. 1957. october 30. the following judgment of the companyrt was delivered by imam j.-this is an appeal by special leave against the order of the madhya bharat high companyrt dated july 9 1955 rejecting an application filed by the appellant under art. 226 of the companystitution. according to the appellant his father habibullah died more than twenty years ago leaving behind the appellant and his brother bashirullah as his sole heirs. habibullah on his death left immovable properties in the city of indore. bashirullah who was unmarried went mad in 1942 and died in 1950 without any issue. on his death the appellant became the sole owner of all the properties left by his father habibullah. on september 21 1954 the respondent purported to serve on the appellant a numberice tinder s. 7 of the administration of evacuee property act 1950 xxxi of 1950 hereinafter referred to as the act. this numberice was number served on him and was never pasted on the property concerned. service of the numberice was according to the appellant number proper and therefore illegal. the appellant desiring to knumber on what material the numberice under s. 7 of the act was issued against him applied on october 1 1954 for companyies of the record and the evidence in the possession of the respondent on the basis of which he formed the opinion that bashirullah at his death had left behind a son iqbal and a wife kamrunnissa who had migrated to pakistan in companysequence of which the estate inherited by them from bashirullah became evacuee property. the application was rejected by the respondent. the appellant filed a petition under art. 226 of the constitution in the madhya bharat high companyrt which was dismissed by that companyrt. the high companyrt was of the opinion that two questions fell to be decided in the proceedings before it- i was the numberice dated september 21 1954 issued by the respondent under s. 7 of the act illegal and 2 was the refusal of the respondent to supply to the appellant companyies of the record and the evidence in possession of the respondent prior to the issue of numberice under s. 7 of the act unlawful? both these questions were decided against the appellant. the numberice dated september 21 1954 was issued under s. 7 of the act in accordance with the rules framed under s. 56 of the act. under s. 7 of the act the numberice has to be given to persons interested in the prescribed manner. rule 6 of the rules framed under the act requires the numberice to be in form i to be served on persons interested in the property proposed to be declared evacuee property. we have compared the numberice issued in the present case with form i of the rules and can find numberdifference between them in essential particulars. it was said that the numberice in the present case does number state the grounds upon which the property companycerned was proposed to be declared evacuee property and iqbal and kamrunnissa evacuees. this contention is without foundation because the numberice in question definitely states under the heading grounds that iqbal and kamrunnissa migrated to pakistan after march 1 1947 on account of the creation of the dominions. the numberice specifies with sufficient clarity the particulars of the property proposed to be declared evacuee property. there was numberreliable material to prove the assertion of the appellant that the numberice was number properly served. we are accordingly of the opinion that the numberice in question has number been proved to be illegal on account of companytravention of any of the provisions of the act or the rules made thereunder. it was next companytended that there was numbermaterial before the respondent to justify his issuing the numberice and therefore the numberice was issued without jurisdiction. section 7 of the act provides that where the custodian is of the opinion that any property is an evacuee property within the meaning of the act he may after causing numberice thereof to be given in the prescribed manner to the persons interested and after holding such enquiry in the matter as the circumstances of the case permitted pass an order declaring any such property to be evacuee property. it is for the custodian to form his opinion on such material as was before him and on such information which he possessed. the numberice which he issued was in form i of the rules framed under the act and it stated clearly that there was credible information in possession of the respondent that lqbal and kamrunnissa were evacuees and that the property specified in the numberice was evacuee property. it was for the respondent to decide . whether on the information in his possession he should issue a numberice under s. 7 of the act. it is number for this companyrt or any other companyrt to determine whether the information in possession of the respondent was adequate to justify the issuing of the numberice. the companytention on behalf of the appellant in this respect cannumber be supported on any valid ground. it was next companytended on behalf of the appellant that when bona fides of the respondent bad been challenged in the high court that companyrt should have sent for the record and seen for itself as to whether there was any justification for the issue of the numberice under s. 7 of the act. in our opinion this companytention cannumber prevail as there is numbermaterial on the record to justify the accusation that the respondent acted with malafides in issuing the numberice. the respondent was free to believe or number to believe the information in his possession. the mere issue of a numberice would number make the persons named therein evacuees or the property mentioned therein evacuee property. that stage companyld only be reached after the numberice had been issued and after the holding of such enquiry as the circumstances of the case permitted when an order declaring the property to be evacuee property could be made in respect of a person who was an evacuee as defined in the act. in our opinion it was unnecessary for the high court to have called for the record and to have examined it for itself in order to ascertain whether the respondent was justified in issuing the numberice. we have number to companysider whether the application for companyies filed by the appellant was improperly rejected. on his behalf it was companytended that the application for companyies should have been allowed as s. 7 of the act companytemplates only one proceeding from the companymencement to the end including the stage prior to the issue of numberice regarding the declaration of any property as evacuee property and that that proceeding is a judicial proceeding. since the appel- lant was a party to the proceedings under s. 7 of the act he was entitled to have companyies of the record including the evidence which companystituted the proceedings. reliance was placed on s. 49 of the act which states that all records prepared or registers maintained under the act shall be deemed to be public documents within the meaning of the indian evidence act and shall be presumed to be genuine until the companytrary is proved. reference was also made to s. 45 of the act which states that for the purpose of holding an enquiry under the act the custodian shall have the same powers as are vested in a civil companyrt under the companye of civil procedure when trying a suit in respect of the following matters a enforcing the attendance of any person and examining him on oath b companypelling the discovery and production of documents c any prescribed matter and the enquiry by the custodian shall be deemed to be a judicial proceeding within the meaning of ss. 193 and 228 of the indian penal companye and the custodian shall be deemed to be a companyrt within the meaning of ss. 480 and 482 of the companye of criminal procedure. there can be little doubt that the custodian while holding an enquiry under s. 7 of the act is acting in a judicial capacity and that by virtue of rule 35 of the rules any party to the enquiry would be entitled to copies of any application objection petition affidavit or statement made by a party or a witness and any other document. he would also be entitled to companyies of the final original order passed by the custodian or an order passed in appeal revision or review. the position however is quite different with respect to the material in possession of the custodian on which he formed his opinion and on which he issued numberice under s. 7 because at that stage he was number holding an enquiry and was therefore number acting in a judicial capacity. it is a misconception of the entire scheme of the act to suppose that an enquiry under s. 7 of the act and the issuing of a numberice previous to the holding of that enquiry is a single proceeding. when issuing a numberice under s. 7 the custodian merely has some credible information which in his opinion justifies him in issuing it and thereafter to enquire into the matter before making a declaration that the property is evacuee property. that information may after the enquiry has been companycluded turn out to be entirely insufficient for making the required declaration. in our opinion there are two stages in the process whereby any property can be declared to be evacuee property under the act. one is the issuing of the numberice to persons interested and the other an enquiry under s. 7 of the act. the proceedings companymence after the issue of a numberice and number previous to it. at the second stage a party to the proceedings would be entitled to companyies of the record and the evidence from the stage of the issuing of the numberice until the companyclusion of the enquiry but number previous to the issue of the numberice. in our opinion the appellant would have been well advised to have responded to the numberice issued to him and assisted the respondent in holding the enquiry.

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1957_144.txt

civil appellate jurisdiction civil appeal number 1718 of 1969. appeal by special leave from the judgment and order dated february 20 1967 of the allahabad high companyrt in misc. case number 561 of 1963. bhagirath das h. k. puri s. k. hirajee and s. k. dhingra for the appellant. mitra b. d. sharma and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by khanna j. this appeal by special leave is directed against the judgment of allahabad high companyrt whereby that companyrt answered the following two questions in a reference made to it under section 66 2 of the indian income tax act 1922 hereinafter referred to as the act whether there was material for the finding that the shares in question were purchased by the assessee with a view to acquire the managing agency and the companytrol of the companypany or the shares companystituted his stock-in-trade ? even if the shares in question did number constitute the stock-in-trade of the assessee whether the profit made on the sale of shares did number companystitute capital gain chargeable to income tax under section 12-b of the act ? on the first question the answer of the high companyrt was that there was numbermaterial for the finding that the shares in question were purchased by the assessee with a view to acquire the managing agency and companytrol of the companypany. it was further held that the shares companystituted the stock-in- trade of the assessee. in view of the above the high companyrt held in answer to question number ii that the profits made by the sale of shares companyld number companystitute capital gain chargeable to income tax under section 12-b of the act. the matter relates to assessment year 1947-48 the relevant previous year for which was the dassera year 2002-2003 corresponding to the period from october 16 1945 to october 5 1946. rameshwar prasad bagla the assessee-appellant is a partner of firm agarwal company having one-sixteenth share in the firm. agarwal company companysisted of six groups of partners viz. 1 morarka group 2 khetan group 3 seksaria group 4 poddar group 5 bagla group and 6 kantilal nahalchand. the bagla group companysisted of the assessee and his brother. m s e. d. sassoon company limited were the managing agents of the india united mills limited the latter is a public limited company- pany and was engaged in the manufacture of textiles in bombay. large blocks of ordinary and deferred shares in the india united mills limited were held by m s e. d. sassoon company ltd. and its associates. in 1943 there were negotiations between m s. e. d. sassoon company limited and one of the partners of agarwal company those negotiations resulted in an agreement dated january 26 1945 under which m s e. d. sassoon company limited agreed to assign the managing agency of the india united mills limited to agarwal company with effect from december 1 1943. the companysideration for the sale of managing agency was rs. 5780000/-. agarwal company also agreed to purchase 1680000 ordinary shares of the face value of rs. 10/- each and twenty lac deferred shares of rupee one each of the india united mills limited the total issued shares of the india united mills limited were twenty lac ordinary shares of rs. 10/- each and fifty lac deferred shares of rupee one each. the price for this big lot of shares was fixed at rs. 33720000 calculated at the rate of rs. 16/8/- for an- ordinary shares and rs. 3/- for a deferred share. at the time when the above mentioned large block of shares of the india united mills limited was agreed to be acquired agarwal company was number in a position to pay for five lac ordinary shares involving an outlay of rs. 8250000. those five lac shares were purchased by ramkumar shivchandrai of poddar group of partners in agarwal company to the extent of three lac shares. the remaining two lac shares were purchased by khetan group of partners. the two groups viz. poddar and khetan groups held the five lac shares on behalf of agarwal company till 1944. the understanding with poddar and khetan groups was that those shares would be taken up by the partners of agarwal company at the same price. in january 1945 the aforesaid five lac ordinary shares were taken over by agarwal company from poddar and khetan groups. the assessee appellant was entitled with reference to his holding in agarwal company to 31250 shares i.e. one-six- teenth out of the five lac shares. the assessees brother was likewise entitled to an equal number of shares out of those five lac shares. the assessees brother relinquished his rights in the said 31250 shares in favour of the assessee as a result of which the assessee obtained 62500 shares in the india united mills limited the shares were paid for at the rate of rs. 16/8/- per share in 1945. these shares had earlier stood in the name of bombay trust corporation which was a companypany formed by sasoon group of companies. after the managing agency of the india united mills limited had been taken over by agarwal company on december 1 1943 those shares were transferred between march and august 1944 in the name of various persons residing in jaipur. those persons transferred the said shares in favour of the assessee on january 30 1945. the assessee borrowed rupees ten lacs from agarwal company in order to pay for the price of those shares. out of 62500 shares acquired by the assessee he sold 43700 shares during the period from april 3 1946 to july 19 1946 in seven lots. the rest of the shares remained in the possession of the assessee during the relevant year. the sale of 43700 shares resulted in a profit of rs. 180220 to the assessee. the sale proceeds were thereafter utilised by the assessee for purchasing shares of swadesh mills limited kanpur. the assessee did number disclose the profit of rs. 180220 in the turn. in response to a numberice issued by the income tax officer the assessee wrote letter dated march 30 1949 in the companyrse of which he stated i have already brought to your honumberrs numberice in the companyrse of assessment proceedings and would like to companyfirm that i had certain share transaction in which there has been appreciation to the tune of rs. 151927/1/11. since it is companymon ground that the assessee is number dealing in shares as business the said appreciation in capital should have been numbermally disclosed as capital gain in the return but i regret that the amount companyld number be shown so the return already filed may be treated as amended accordingly. the amount of rs. 151927/1/11 referred to in the assessees letter included the surplus realised a. a result of the sale of 43700 shares of the india united mills limited the income tax officer rejected the plea of the assessee that the profit made by the sale of 43700 shares of the india united mills limited was number profit liable to be taxed as such but was only capital gain. in the previous year with which we are number companycerned the assessee had number been treated as a dealer in shares. the income tax officer held the assessee to be a dealer in shares during the relevant year on the ground that the assessee had entered into share transactions on a very extensive scale. the income tax officer accordingly brought to tax the sum of rs. 180220 under section 10 of the act as profits on the sale of shares. on appeal the appellate assistant companymissioner held that 62500 shares were stock-in-trade. the finding of the income tax officer was substantially upheld. some relief was granted by reducing the taxable income. on further appeal by the assessee to the income tax appellate tribunal the matter was remanded to the income tax officer on may 1 1954. the income tax officer thereafter submitted a report on june 12 1956. the appeal along with the remand report of the income tax officer was put up before the tribunal for hearing. the tribunal as per order dated september 26 1956 held that the excess realised from the sale of shares was number income which was liable to income tax. in companying to this conclusion the tribunal observed agarwal company as a result of an agreement with the sassoons. agarwal company was interested in the managing agency of some mills also which came to them as a result of the same agreement. we think that on the facts produced the purchase of the shares by the assessee was number with a view to deal in those shares but with a view to obtain the managing agency and companytrol of the companypany. it may also be numbered here that if the price ruling at the time of the transfer was to be taken into account perhaps there is numberprofit. the profit has been shown as the transfer is made at the price at which the shares were originally sold by the sassoons. we think that on the facts before the income-tax autho- rities the assessees holding of shares in the india united mills limited was number the purchase of a stock in trade as held by the department. we accept the assessees appeal and direct that the excess realised on the sale of these shares is number income which is liable to income-tax. an application was thereafter filed on behalf of the respondent for stating a case to the high companyrt. but that application was rejected. the respondent then approached the high companyrt under section 66 2 of the act. the high court thereupon directed the tribunal to draw up a statement of case and refer the questions reproduced earlier to the high companyrt. after the questions were referred the high court gave answers to the questions as mentioned at the commencement of this judgment. we have heard mr. bhagirath das on behalf of the appellant and mr. sukumar mitra on behalf of the respondent and are of the opinion that the judgment of the high companyrt cannumber be sustained. the question with which the high companyrt was concerned was whether there was material before the tribunal for arriving at the finding that the shares in question had been purchased by the assessee with a view to acquire the managing agency and companytrol of the india united mills limited perusal of the judgment of the high companyrt shows that the high companyrt did number discuss this aspect of the matter. on the companytrary the high companyrt proceeded straightaway to deal with the matter as if it had itself to arrive at an independent finding on the point as to whether the shares in question had been purchased by the assessee with a view to acquire the managing agency and control of the companypany. this approach of the high companyrt was wholly erroneous and number warranted by law. it is for the tribunal to decide questions of fact and the high companyrt in a reference under section 66 of the act cannumber go behind the tribunals findings of fact. the high companyrt can only lay down the law applicable to the facts found by the tribunal. the high companyrt and the supreme companyrt in an appeal against the judgment of the high companyrt given in a reference under section 66 of the act are number companystituted companyrts of appeal against the order of the tribunal. these companyrts only exercise advisory jurisdiction in such references. the high court in a reference under section 66 of the act can however go into the question as to whether the companyclusion of the tribunal on a question of fact is based upon relevant evidence. if the high companyrt finds that there is numbersuch evidence to support the finding of fact of the tribunal this circumstance would give rise to a question of law and can be agitated in a reference. it is also well established that when a tribunal acts on material which is irrelevant to the enquiry or companysiders material which is partly relevant and partly irrelevant or bases its decision partly on company- jectures surmises and suspicions and partly on evidence then in such a situation an issue of law arises and the finding of the tribunal can be interfered with. the finding may also be interfered with if it be found to be so unreasonable that numberperson acting judicially and properly instructed as to the relevant law companyld have arrived at it. numbere of the circumstances justifying interference with the finding of fact of the tribunal has been shown to exist in this case. in the absence of any such circumstance the high companyrt in our view was number justified in interfering with the finding of fact of the tribunal. the fact that the high court on appreciation of evidence would have arrived at a conclusion of fact different from that of the tribunal did number warrant interference with the finding of the tribunal. the tribunal in arriving at the companyclusion that the purchase of the shares in question by the assessee was with a view to obtain the managing agency and companytrol of the india united mills limited and that those shares were number purchased as stock-in-trade referred to a number of circumstances. it was found by the tribunal that the shares in question were out of the lot sold by sassoons to agarwal company it was also found that the shares had been transferred to the assessee at the original price at which these shares had been sold by the sasoons and number at the price which was prevailing at the time of transfer. the tribunal further found that 62500 shares represented the portion of the assessee in the total number of shares originally purchased by agarwal company in the light of those findings the tribunal recorded its companyclusion in the paragraph which has been reproduced earlier. the above companyclusion of the tribunal in our opinion was based upon relevant material and companyld number be interfered with in a reference under section 66 of the act. the high companyrt in arriving at the companyclusion that the shares in question had been purchased number with a view to obtain the managing agency but as a stock-in-trade has referred to the fact that the assessee took loan for the purchase of those shares and subsequently transferred 43700 shares out of 62500 shares. this circumstance as observed by this companyrt in the case of ramnarain sons pr. limited v. companymissioner of income tax 1 would number by itself go to show that the purchase of shares was number to facilitate the acquisition of the managing agency. in that case the appellant companypany was a dealer in shares and securities and carried on business as managing agents for some companypanies. in order to acquire the managing agency of a textile-mill the appellant companypany purchased from sassoon david and company who were the managing agents thereof 1507 shares of the mill at rs. 2321-8-0 per share at a time when the market price of the shares was rs. 1610. the remaining 1000 shares of the mill held by sassoon david and company were acquired by the directors of the appellant companypany. two months later the appellant companypany sold 400 of those shares at a loss of rs. 178438. the said loss was claimed as a trading loss. question arose in this companytext whether the purchase of shares companyld be regarded as acquisition of stock-in-trade. dealing the above question this companyrt observed by purchasing the shares which facilitated acquisition of the managing agency a capital asset was acquired and merely because the managing agency companyld be utilised for earning profit the acquisition of the shares which led to the acquisition of the managing agency could number in the absence of an intention to trade in those shares be regarded as acquisition of stock-in-trade of the share business. the appellants had undoubtedly purchased the shares of the dawn mills with money borrowed at interest but that circumstance by itself does number evidence an intention to trade in the shares. number is the fact that the appellants are dealers in shares and their memorandum of association authorises them to carry on business in shares of any importance in the circumstances of the case. 1 1961 41 i.t.r. 534. it was further observed subsequent disposal of some out of the shares by appellants companyld also number companyvert what was a capital question into an acquisition in the nature of trade. we are therefore of the view that the answer given by the high companyrt to question number 1 was number companyrect. in our opinion there was. material for tile finding that the shares in question had been purchased by the assessee with a view to acquire the managing agency and companytrol of the india united mills limited and that the shares did number companystitute the stock-in-trade of the assessee. so far as the second question is companycerned we find that it is the companymon case of the parties that if the shares in question are held to be number stock-in-trade of the assessee in that case the profits made on the sale of those shares would-constitute capital gain chargeable to income tax under section 12-b of the act. indeed this is what was prayed for by the assessee in his letter dated march 30 1949. looking to the facts also we are of the opinion that the profit made on the sale of those shares companystituted capital gain chargeable to income tax under section 12-b of the act.

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1972_369.txt

civil appellate jurisdiction civil appeals number. 1840 and 1842 of 1972. appeal by certificate from the judgment and order dated march 12 1968 of the madras high companyrt in tax case number 202 of 1962 reference number 5 of 1964 . t. desai and t. a. ramachandran for the appellant. sen p. l. juneja b. d. sharma and r. n. sachthey for the respondents. s. k. sastri and m. s. narasimhan for the intervener. the majority opinion of p. jaganmohan reddy i. d. dua and r. khanna jj. was delivered by p. jaganmohan reddy j. s. hegde j. gave a dissenting opinion. hegde j. i have had the advantage of reading the judgment prepared by my learned brother reddy j. i regret i am unable to agree with the companystruction placed by him on s. 49-d of the indian income-tax act 1922 to be hereinafter referred to as the act . i agree with him that there is companysiderable difficulty in interpreting that provision but that does number absolve this companyrt from its duty of properly companystruing that provision. on a proper companystruction of that provision i am of the opinion that the companyclusion reached by the commissioner the tribunal and the high companyrt is the proper one. the facts of the case are fully set out in the judgment of my learned brother reddy j. it is needless to repeat those facts in their entirety. it will be sufficient if set out the material facts relating to the assessment year 1953-54. during the relevant previous year the deceased assesses who carried on business in malaya and also owned rubber gardens abroad declared his foreign income as rs. 222532. he had been assessed in malaya in respect of that income. as he was resident in india during the relevant previous year that income must be companysidered as having accrued to hi-in in india in view of s. 4 1 b ii of the act. during the relevant year he was carrying on business in india also. in that business he suffered a loss of rs. 68858. in this companyntry his income from other sources amounted to rs. 39142. it mainly companysisted of income from property. in his assessment proceedings in this country he claimed double taxation relief under s. 49-d. the income-tax officer added his income arising outside that taxable territories with his income from other sources in india rs. 222532rs. 39142rs. 261674 and from that he deducted rs. 68658 the business loss suffered by him in india and taxed him on a total income of rs. 192816. the commissioner revised that order. he came to the companyclusion that the income that has suffered double taxation was only rs. 153674. he accordingly granted double taxation relief only in respect of that amount. his view was companyfirmed by the tribunal in appeal and by the high companyrt in a reference under s. 66 1 . under our income-tax law in every assessment year the total income of an assessee during the previous year is brought to tax. it is made up of income from various sources. those sources are set out in s. 4 of the act. clause a of sub-s. 1 of s. 4 attracts into the pool income profits and gains from whatever sources derived which are received or deemed to be received in the taxable territory in the previous year by or on behalf of the assessee. income is defined in s. 2 c . that is an inclusive definition. one of the companyponents of income is dividend which is defined in s. 2 6 a . both the expressions income as well as dividend include certain receipts which are deemed as income or dividend. sec- tion 4 1 b enumerates various other sources of income. one of the companyponents which makes up the total income is the income that has accrued or arisen to a resident in india in the previous year outside the taxable territory. we shall number see what s. 49-d says. it is number necessary to quote the entire section. the portion of the section that is material for our present purpose runs thus if any person who is resident in the taxable territories in any year proves that in respect of his income which accrued or arises during that year without the taxable territories he has paid in any companyntry by deduction or otherwise under the law in force in that companyntry he shall be entitled to the deduction from the indian income-tax payable by him of a sum calcu- lated on such doubly taxed income at the indian rate of tax or the rate of tax of the said companyntry whichever is the lower. emphasis supplied before analyzing the ingredients of this provision it is necessary to mention that s. 49-d gives relief to the extent mentioned in that section in respect of the income accruing or arising in companyntries outside india with which our companyntry has numberreciprocal agreement for relief or avoidance of double taxation. with the companyntries with which we have reciprocal agreements for the relief from double taxation s. 49-a applies. in cases falling under that section relief to be granted depends upon the terms of the companycerned agreement. number turning back to s. 49-d and an sing that provision we find the following ingredients- the assessee in question must have been resident in the taxable territory in any year that the some income must have accrued or arisen to him outside the taxable territory during that year in respect of that income he must have paid by deduction or otherwise tax under the law in force in the companyntry in question and if he fulfills all the above companyditions he will be entitled to deduction from the indian income-tax payable by him of a sum calculated on such doubly taxed income at the indian rate of tax or the rate of tax of the said companyntry whichever is lower. there is numberdispute that the first three companyditions enumerated above have been satisfied in the present case. the real question for decision is as to what is the scope of the expression of a sum calculated on such doubly taxed income. this expression involves two aspects viz. 1 it exclusively relates to the income earned outside india. this is clear from the word such and 2 it relates only to that part of the income earned outside india which is doubly taxed. in other words the same income must have been doubly taxed. the income that gets relief under s. 49-d is only that income--identified income which has been subjected to tax twice over. in other words the income in question- may be whole or part-must have been subjected to tax number only in the companyntry in which it was earned but also in this country. from the language of s. 49-d it is clear that it does number companycern itself with the totality of the income or even the source of the income. it merely companycerns itself with that part of the income which has been subjected to double taxation. 7-l499sup. c. i. /73 the provision requires that there should be a recalculation of that income which has been doubly taxed. in making that calculation the authority companyputing the tax will have to leave those portions of income which have number been doubly taxed. in companyputing the total income of an assessee the procedure adopted is that income profits or gains under each head is first determined after giving deductions to which the assessee is entitled under that head and thereafter the total income is arrived at for the purpose of determining the rate of tax as well as for the quantification of the tax due. supposing an assessee has various sources of income such as salaries interest on securities income from property profits or gains of business profession or vocation income from other sources and capital gains the income under each head has to be first determined. for the determination of the taxable income under each head the taxing authorities have number only to take into companysideration the gross income under each head they must go further and deduct from the gross income under each head various concessions to which the assessee is entitled to and thereafter arrive at the total income. quite clearly the assessees income from property and other sources amounting to a sum of rs. 39142/- has number been doubly taxed. hence that income cannumber enter into the calculation of doubly taxed income of the assessee as that income companyld number have been included in the return made by the assessee at malaya. that is number an income earned by the assessee outside the territories of india. that being so in calculating the doubly taxed income that companyponent of the total income has to be kept apart. further the entire business income of rs. 222532/- earned in malaya though taxed in malaya has number been taxed in this companyntry. out of that sum only a sum of rs. 153674/- has been taxed in this country. the business loss in this companyntry cannumber be said to have been taxed in this companyntry. a relief given does number amount to a taxation. to repeat it is only that income which can be said to have been doubly taxed is entitled to relief under s. 49-d. companynsel for the parties rightly conceded that the- source of income is number a relevant consideration. what is material under s. 49-d is the income which is doubly taxed. if the entire tax paid by the assessee in a companyntry outside india is to be deducted while companyputing his tax liability in this companyntry then there was numbernecessity for the legislature to enact s. 49-a. an agreement under that provision at the highest companyld have provided for the deduction from the tax payable in this companyntry by an assessee the tax paid by him in a foreign companyntry. anything more than that cannumber be companysidered as relief from double taxation. it would amount to tax companycession-. it is equally unlikely that the relief given under an agreement entered into under s. 49-a can be less than the relief available under s. 49-d. if the relief given under an agreement under s. 49-a and the relief given under s. 49-d mean the same thing the legislature must be held to have indulged in an exercise in futility. such a line of reasoning is impermissible. section 49-d must be understood to companyer a field other than that companyered by s. 49-a. further it is number reasonable to think that s. 49-d gives more relief than that is likely to be given under an agreement under s. 49-a s. 49-d being a residuary provision. section 49-d as it number stands is the result of an amendment made in 1953. prior to that the section read if any person who has paid by deduction or otherwise indian income-tax for any year in respect of any income arising without the taxable territories in a companyntry the laws of which do number provide for any relief in respect of income-tax charged in the taxable terri- tories proves that he has paid income-tax by deduction or otherwise under the laws of the said companyntry in respect of the same income he shall be entitled to the deduction from the indian income-tax payable of a sum equal to one half of such indian income-tax or to one half of such tax payable in the said companyntry whichever is less. under the section as it stood before the amendment in 1953 relief was given in respect of the same income which was taxed twice over. under the present provision relief is given to such doubly taxed income. i am clear in my mind that so far as the identification of the income which is entitled to double taxation relief is companycerned there has been numberchange in the law. the expression the same income and such doubly taxed income mean the same thing. we are number companycerned with the other changes effected in s. 49-d.the statement of objects and reasons for bringing about the change in s. 49-d or the select companymittees report relating to that provision do number throw any light in the matter of identification of the income which-is entitled to double taxation relief. section 49-d despite the difference in the language employed in my opinion is similar in scope to s. 27 of the united kingdom finance act 1920. the relevant portion of that section reads as follows if any person who has paid by deduction or otherwise or is liable to pay united kingdom income tax for any year of assessment on any part of his income proves to the satisfaction of the special companymissioners that he has paid dominion income-tax for that year in respect of the same part of his income he shall be entitled to relief from united kingdom income tax paid or payable by him on that part of his income at a rate thereon to be determined as follows if the dominion rate of tax does number exceed onehalf of the appropriate rate of united kingdom tax the rate at which relief is to be given shall be the dominion rate of tax in any other case the rate at which relief is to be given shall be one-half of the appropriate rate of united kingdom tax. the english provision entitles an assessee to relief from double taxation in respect of that part of his income on which he has paid dominion income-tax and he is also liable to pay incometax in united kingdom in respect of that part. the income which is entitled to relief under that provision is the same part of his income which is liable to be taxed both in the united kingdom as well as in the dominion. that is exactly what is done under s. 49-d. our act instead of using the expression the same part of his income which is doubly taxed has used the expression of such doubly taxed income. but the two expressions mean the same thing. the decisions rendered under the united kingdom act bear on the point in companytroversy in this case. in rolls royce limited v. short 1 question arose as to what extent the assessee was entitled to relief from double taxation under the aforementioned s. 27. the facts of the case are number material for our present purpose. but that decision sets out the scope of s. 27. this is how its scope is described by rowlatt j. sitting on the kings bench. the object of section 27 of the finance act 1920 was to mitigate the hardship involved in paying incometax in the united kingdom in full upon profits which has already been subjected to income tax in a dominion and if the legislature had thought fit to say that wherever income had been taxed in a dominion and the same profits came thereafter at any time to form the basis of a tax in the united kingdom the sum already paid on that income should form a basis of relief the thing might have worked out very simply. but that has number been done obviously because it is quite clear that before relief can be given in respect of dominion income tax paid on profits brought into charge to income-tax in this companyntry it must be shown that the 1 10 tax cas 59. dominion income-tax and the united kingdom income tax are paid in respect of the same year and on the same income or as the phrase is used here part of income. the learned judge equated the expressions part of income and same income as meaning the same thing. in the companyrse of his judgment his lordship observed if you read the first few lines of the section really on the words of it the section only appears to apply where this overlapping of taxation has been partial that is to say where a man has part of his income taxed doubly and number where he has the whole taxed doubly which obviously cannumber be intended. when the matter was taken up in appeal to the companyrt of appeal pollock m. r. set put the companyditions on which the relief can be given under s. 27. those companyditions to put it in the words of the master of rolls are first it is the person who has paid the united kingdom income tax by deduction or otherwise for any year of assessment on any part of his income who may claim relief. the second step is that that tax payer must prove to tie satisfaction of the special company- missioners that he has paid dominion income tax for that year of assessment in respect of the same part of his income as that on which he has paid united kingdom income tax. and the third step is that if such proof is given the tax-payer becomes entitled to relief from- united kingdom income tax on that part of his income that is on that same part referred to previously on which he has paid united kingdom income tax and indian tax. proceeding further the master of rolls observed the fact of paying a tax in a dominion does number induce relief. the basic companydition is that a person has paid tax on his income over here-then if some part of that income so charged and assessed to tax in the united kingdom can be identified and proved to have paid dominion tax that same part which has suffered dual taxation can be relieved of the tax paid here up to the measure of relief given by the section. the decision which is more appropriate for our present pur- pose is that rendered in the assam railways and trading company ltd. v. the companymissioners of land revenue 1. the relevant facts of that case are as follows 1 18 tax cas 509. the assessee companypany which was incorporated and companytrolled in the united kingdom carried on the business of running a railway working companyl mines brickwords etc. in assam and also carried on a plantation business there. the whole of its income arose in india with the exception of a small amount arising from investments in england. the companypany had issued in the united kingdom debenture stock and the interest thereon was paid in the united kingdom. in computing the companypanys liability to united kingdom income- tax case 1 of schedule d for the years 1928-29 and 1929-30 the debenture interest was number allowed as a deduction and certain profits from a tea garden were included as a receipt. the assessments on the companypany to indian incometax and super-tax for the companyresponding years in respect of its business profits were in accordance with the provisions of indian income-tax law arrived at after deducting the amount of debenture interest and excluding the tea garden profits. the assessee claimed that the relief in respect of dominion income-tax to which it was entitled under section 27 finance act 1920 should be based on the whole of its income as companyputed for the purpose of united kingdom income tax less only the income arising in england without any deduction for the debenture interest or the tea garden profits. the special companymissioners refused the relief claimed. the house of lords affirmed the decision of the special companymissioners. it held that the companypany had number borne double taxation on that part of its income which was applied in payment of debenture interest or on the tea garden profits and hence was number entitled to relief in respect thereof. from this decision it is seen that the total income of the assessee arising or accruing in united kingdom for the purpose of double taxation relief was split into four parts i.e. 1 income arising in england 2 the interest on debenture that was given deduction to in india 3 the tea garden profits and 4 the other income. there was numberdispute that the income from the investments in england was number to be taken into companysideration while deter-- mining the double taxation relief. this position was conceded by the assessee. if we apply the same ratio to the facts of the case before us we have to exclude from consideration while determining the double taxation relief the income of rs. 39142/- an income exclusively earned in india and was number brought to tax in malaya. next deduction given in india in respect of the interest on debenture loans was number taken into companysideration while affording double taxation relief because that portion of the indian income was number subjected to double taxation because of the relief given under the indian income-tax act. let us apply that principle to the facts of the present case. the amount deducted in this companyntry as business loss rs. 68858/- was number subjected to double taxation. that amount was never taxed in this companyntry. we should number mix up double taxation relief with tax concessions. the main judgmentof the house of lords in assam railways case supra was delivered by lord wright. analyzing s. 27 of the finance act 1920 lord wright observed the section requires that the taxpayer should prove 1 that he has paid tax in the united kingdom for any year on a certain sum which is part of his income in this companynection i do number think that the word part is used to exclude the whole but merely to point to an ascertainable sum of income which is brought into question 2 that he has paid tax in the dominion in respect of the same part of his income for that year here the words in respect of as companytrasted with on do number i think involve any latent distinction since the word on would be inapplicable to the same income which becomes a separate taxable subject in the dominion. the taxpayer then becomes entitled to relief. it seems clear that there must be a definite part of income brought into question and that can only be expressed in a sum of money. as income ex vi termini must be expressed in a sum of money the words the same part of his income must involve a companyparison between two sums of money which prove to be the same. the companytention of the appellants is to the companytrary it is said on their behalf that the words the same part of his income refer solely to what is called the source and that identity of amount is immaterial and does number companye into question except for the purpose of ascertaining the rate of tax to be allowed for. i cannumber agree with this argument. numberdoubt questions of source as it has been called that is such questions as where the income companyes from are essential to identify so far as that aspect goes what is taxed in the united kingdom with what is taxed in the dominion but in addition the income itself that is the amount of money must also be identified. i think the words the same part of his income are apt to include both elements of companyparison and identification. these observations if i may say so with respect clearly bring out the legal principles bearing on the issue under discussion. in my judgment the decision. of the madras high companyrt in commissioner of income-tax v. arunachalam chettiar 1 correctly lays down the law on the subject. mr. s. t. desai learned companynsel for the assessee placed considerable reliance on the decision of the bombay high court in 1 49 i. t. r. 574. commissioner of income-tax bombay city-ii v. new citizen bank of india limited and anr. 1 therein the companyrt was called upon to interpret an agreement entered into under s. 49-a. in that case the companyrt was number required to interpret the scope of s. 49-d. there is numberdoubt that some of the observations made in that case lend support to the arguments advanced on behalf of the assessee. in my opinion the learned judges of the high companyrt in that case did number bring out companyrectly the-ratio of the decisions in assam railways and trading company supra and rolls royces case supra . they sought to distinguish those cases on the basis of the facts of those cases ignumbering the legal principles enunciated therein. in the result i dismiss these appeals. jaganmohan reddy j.-these are appeals by certificate from a common judgment of the madras high companyrt rendered in three references under s. 66 1 of the income-tax act 1922 hereinafter called the act pertaining to assessment years 1953-54 1954-55 and 1955-56. in the reference relating to the first assessment year three questions in respect of the last two two questions were referred by the tribunal. the three questions relating to the first reference are-- whether on the facts and in the circumstances of the case the tribunal is right in its view that the commissioner of incometax had jurisdiction to revise the order of refund ? whether on the facts and in the circumstances of the case the tribunal is right in its view that the order of refund under. section 48 read with section 49-d is independent and distinct from the assessment order ? whether on the facts and in the circumstances of the case the tribunal is right in companyfirming the companyputation of relief as modified by the companymissioner ? in the reference relating to the last two assessment years the questions were - whether on the facts and in the circumstances of the case the tribunal is right in modifying the order of the appellate assistant companymissioner ? whether on the facts and in the circumstances of the case the tribunal is right in its. interpretation of section 49-d ? before the high companyrt the first question on the first reference w number pressed and therefore was answered against the assessee. the remaining two questions which were considered to be similar to the two questions in the other two references were also answered against the assessee. before us the second question in the first 1 58 i. t r. 468. reference was number pressed as such substantially the third question in that reference and the first and second questions in the other two references which deal with the validity of the order of the companymissioner and the high companyrt need alone be companysidered in these appeals. the assessee who is number dead and is succeeded by legal re- presentatives was doing money lending business in malaya as well as in this companyntry. he also owned rubber gardens abroad in respect of the first assessment year 1953-54 the assessee declared his foreign income as rs. 222532 and showed a loss on business in india as rs. 68858 and income from other sources as rs. 39142/-. in the other two references it is number necessary to refer to the incomes earned by him abroad and in india except to say that the appellate assistant companymissioner allowed the appeal in part holding that the income from all the sources in india have to be companysidered together just as income from all sources abroad must be companysidered- together and in that view held that the net assessed income in india from malaya is what has suffered double tax. what is to be determined in these appeals is on what basis should the double taxation relief be afforded to the assessee. it will be sufficient if we take the first assessment as illustrative of the problem which is posed in these appeals. the income-tax officer allowed double taxation relief on a sum of rs. 192816/- by adding income from other sources to the foreign income and deducting from the total thus computed the loss of rs. 68858. the companymissioner in exercise of his powers s under s. 48 read with s. 49-d however held that that companynputation was wrong because according to him the business loss of rs. 68858 incurred by the assessee can be set off only against the business profits of rs. 222532 earned in malaya resulting in a business income of rs. 153674 being the only income from malaya which can be companysidered to have suffered double taxation. in appeal against the order of the companymissioner the tribunal following the judgment in c.i.t. madras v. arunachalam chettiar 1 came to the companyclusion that the expression such doubly taxed income can only indicate that it is that portion of the income on which tax in fact has been imposed and paid by the assessee that qualifies for double income relief. the high. companyrt also was of the view that the relief granted by s. 49-d on such doubly taxed income has reference to the factual double incidence under two different jurisdictions of tax on identical amount of income that is to say an identical income on which two taxes have been imposed under the indian jurisdiction and the other by a foreign authority. 1 49 i. t. r. 574. it is clear that a decision in these appeals will depend on the companystruction of s. 49-d which bristles with difficulties and is number easy to resolve. a great deal would depend on the approach to the question and the meaning to be given to such doubly taxed income. if we are to approach the construction of the section on a companyparison with the reliefs given under s. 49-a or on the analogy of cases decided under s. 27 of the united kingdom finance act or on an a priori assumption that the relief under s. 49-d companyld number be greater than that which can be given under s. 49-a or on the basis of reciprocity under s. 27 we venture to think it will number lead to satisfactory companyclusion. s. 49-a empowers the central government to enter into agreements with the government of any companyntry outside india for the granting of relief in respect of income on which have been paid both income-tax including super-tax under the act and the income-tax in that companyntry or with the government of any country outside india for the avoidance of double taxation of income profits and gains under the act and under the corresponding law in force in that companyntry and may by numberification in the official gazette. make such provisions as may be necessary for implementing the agreement. before the amendment of that section by the finance act 1953 with effect from 1st april 1953 there were other provisions giving relief in respect of part b states and dominion income-tax and agreement for avoidance of double taxation in india pakistan or u.k. apart from s. 49 which granted relief in respect of income-tax-. in 1948 s. 49 which granted relief in respect of income taxed both in india and in u.k. was omitted and s. 49-a as it then was was amended to enable central government to make provision by numberification to grant relief in respect of income on which both india and united kingdom levied tax. under the amended s. 40-a the income-tax double taxation in united kingdom rules were made. it would appear on the relevant provisions an assessee can claim double taxation relief if he can show that he has paid tax on the same income both in india and in the foreign companyntry. in order to obtain the relief it was also necessary to show that the-income must have been charged to tax in both companyntries. where a resident of india earns income in a foreign companyntry with which the government of india has numberarrangement for relief against or avoidance of double taxation relief has been afforded to him under s. 49-d. we may point out that for the first time relief in respect of tax charged in a companyntry which did number provide for relief in respect of the british indian income-tax was granted under the said section introduced by the indian income-tax amendment act 1939 in the act of 1922. to this an explanation was added by amendment act 23 of 1941 which makes it clear that the relief extends both to income-tax and to super-tax. thereafter a new section 49-d was substituted by the amendment act 1953 with effect from 1st april 1952 and by the finance act 1956 sub-ss. 3 and 4 were inserted. since the last two sub-sections deal with income of a resident in the taxable territories accruing or arising to him during that year in pakistan they do number assume any relevance for the purposes of this case. we give below in juxta position s. 49-d as it was prior to the amendment in 1953 and that inserted by the 1953 amendment act- prior to amendment act 1953 after amendment act 1952 49d. relief in respect of tax in 49d. 1 if any person who is companyntry number providing for relief in resident in the taxable territories respect of indian income-tax-if in any year proves that in respect any person who has paid by de- of his income which accrues or duction or otherwise indian in arises during that year without companye-tax for any year in respect the taxable territories and which of any income arising without the is number deemed to accrue or arise taxable territories in a companyntry the in the taxable territories he has laws of which do number provide for paid in any companyntry with which any relief in respect of income- there is no reciprocal arrangement tax charged in the taxable terri- for relief or avoidance of doubler tories provided that he has paid taxation income-tax by deducin income-tax by deduction or other- tion or otherwise under the law wise under the laws of the said in force in that companyntry he shall companyntry in respect of the same in- be entitled to the deduction from companye he shall be entitled to the the indian income-tax payable by deduction from the indian in- him of a sum calculated on such companye-tax payable of a sum equal double taxed income at the indian to one-half of such indian income- rate of tax or the rate of tax of tax or to one-half of such tax pay- the said companyntry whichever is the. able in the said companyntry which- lower. ever is less. 2 the central government explanation-the expression may by numberification in the official indian income-tax in this section gazette declare that the provi-means income-tax and super-taxa sions of sub- section 1 shall also charged in accordance with the apply in relation to any such inprovisions of this act. companye accruing or arising in the united kingdom and chargeable under this act for the year ending on the 31st day of march 1950 or f or the year ending on the 31 st day of march 1951 or for the year ending on the 3 1 st day of march 1952. explanation-in this section.- the expression indian in- come-tax means income-tax and super-tax charged in accordance with the provisions of this act the expression indian rate of tax means the rate determined by dividing the amount of indian income-tax after deduction of any relief due under the other provisions of this act but before deduc- tion of any relief under this section by the total income the expression rate of tax of the said companyntry means income-tax and super-tax actually paid in the said country in accordance with the corresponding laws of the said country after deduction of all relief due but before deduction of any relief due in the said companyntry in respect of double taxation divided by the whole amount of income assessed in the said companyntry the expression income tax in relation to any companyntry in- cludes any excess profits tax or business profits tax charged on the profits by the government of that companyntry and number by the government of any part of that companyntry or a local authority in that companyntry. that section as is obvious grants double taxation relief in respect of taxes on income charged in any foreign companyntry by deduction or otherwise under the law in force in that country. the object of the section is that the amount of indian income-tax paid or the amount of tax paid in the foreign companyntry whichever is the lower is allowed as a deduction from the tax payable under the act on such doubly taxed income. the words in respect of the same income in the preamendment section and such doubly taxed income emphasized by us assume importance and will be companysidered in the companytext of the respective sections and the object with which they were enacted. the tribunal thought that the business loss in india must first be set off wholly against the business profits earned in malaya and the fact that this results in application of s. 24 1 does number take away the necessity for the limitation. but before us the learned advocate for the revenue companyceded that neither s.24 is applicable number would it be necessary to submit that the income on which a tax has been paid abroad must be under the same head of income as that specified in s.6 of the act. what he in fact companytends is that the income from interest and from property assessed in india amounting to rs. 39142 did number arise outside india as such it cannumber be taken into account in determining whether the tax paid outside is number doubly taxed. this begs the question. indeed in his earlier contentions he had indicated that the basis upon which the revenue is resisting the claim is that the identity of the income is number the same that is for granting relief a there must be numerical identity of the income which is subject to tax both in india and abroad the numerical identity being the amount of income on which tax is paid and b there should also be the sameness of the head. secondly he companytended that relief by way of deduction is allowable on such portion of that income which has actually been subjected to tax twice over after allowing for set off or deductions if any. thirdly having regard to the scheme of the act and the method of companyputation of income arising both within and without india income must be companysidered under separate heads in order to ascertain whether any income has been actually taxed or number. he therefore submits that rs. 39142/- has numberrelation at all with the income arising in malaya and cannumber be taken into companysideration under s.49-d. this would be so he says even if it came under the same head. in support of these contentions the decisions of the companyrt of appeal in england in rolls royce limited v. short 1 that of house of lords in assam railway and trading company limited v. the companymissioner of inland revenue 2 and the case of this companyrt in o.a.p. andippan v. companymissioner of income-tax madras 2 were cited. we may at once state that these decisions are rendered on the provisions which are number in pari materia with the provisions in s. 49-d. the case of this companyrt in andiappan was under s.49-a-a where the question was whether the assessee was entitled to abatement in india under art. iii of the agreement for relief and avoidance of double taxation in india and ceylon read with item 8 of the schedule to the agreement. it was held on the terms of that article and the clause in the schedule that what was attributable to the ceylon law was only that tax which was ultimately levied on the assessee and demanded but he was number entitled to abatement of tax that he would have to pay before deduction of the allowance given by s.45 2 of the ceylon income tax ordinance 1932. this case therefore does number help us in ascertaining what doubly taxed income is for the purpose of s.49-d as it was decided on the terms of the provisions of the ceylon law according to which tax was ultimately levied in respect of which relief was claimed. the other two english cases dealt with the interpretation of s. 27 of the finance act 1920. the amendment in 1927 was only in respect of the meaning of -appropriate rate in the united united kingdom income tax which is number relevant for the present companysideration. section 27 of the finance act is as under - if any person who has paid by deduction or otherwise or is liable to pay united kingdom incometax for any year of assessment on any part of his income proves to the satisfaction of the special companymissioners that he has paid dominion income-tax for that year in respect of the same part of his income he shall be entitled to relief from united kingdom income-tax paid or payable by him on that part of his income at a rate thereon to be determined as follows - a if the dominion rate of tax does number exceed one-half of the appropriate rate of united kingdom 1 10 t. c. 59. 3 821. t. r. 876. 2 18 t. c. 509. income-tax the rate at which relief is to be given shall be dominion rate of tax b in any other case the rate at which relief is to be given shall be one-half of the appropriate rate of the united kingdom income- tax. it will be observed that in this section the words in respect of the same part of the income and on that part of his income have significance in understanding the english decisions in respect of the double tax relief given in the united kingdom. similar words viz. in respect of the same part of his income and on that part of his income are used in the companyresponding provision in clause 3 of the numberification of the government of india issued under s. 49- a. in the rolls royce case a british companypany trading in india was assessed to and paid indian income-tax for the year 1920-21 on a profit of pound 4120 the profits of its indian branch. it was also assessed to and paid in the united kingdom income-tax for the same assessment year under the law of that companyntry on the average of the whole of its profits wherever made for three preceding years. the assessee claimed that as it had paid both united kingdom tax and indian income-tax for assessment year on its indian profits for those years it was entitled to relief under s. 27 from united kingdom income-tax. the claim was negatived by rowlatt j. as numberincome-tax was paid in respect of the indian income of 1920-21. this decision was upheld by the court of appeal. rowlatt j. at p. 67 gave the reasons for disallowance thus - when the indian income in the year of assessment calculated according to indian methods is more than the indian income calculated according to british methods then he will only get relief calculated with reference to the amount of the english- calculated income upon which he has paid english income tax. where the indian income calculated according to the indian method is less than the indian income calculated for the united kingdom income tax in the united kingdom method will he be able companyversely to deduct the rate from the english income tax although that would be giving him back more tax than he has actually paid in india? in the companyrt of appeal pollock m.r. said at p. 70- the fact of paying a tax in a dominion does number induce relief. the basic companydition is that a person has paid tax on his income over here-then if some part of that income so charged and assessed to tax in the united kingdom can be identified and proved to have paid dominion tax that same part which has suffered dual taxation can be relieved of the tax paid here up to the measure of relief given by. the section. warrington l. j. observed at p. 71-72-- having regard to the different modes of assessment prevailing in england and india respectively the profits of the indian business chargeable in the two companyntries can never be identical in amount and it is therefore clear that in separating from the entire income the part of the income to which section 27 is applicable regard must be had to the source from which it is derived and number to its amount. in this case the part of the income to be companysidered is the profits of the indian branch. in assam railways trading companypany case the house of lords were companysidering the case of an assessee companypany which earned profits in india amounting to pound 186808 which sum was liable to united kingdom income-tax. by the indian income-tax act the assessee was allowed to deduct interest on debentures and other items which deducted the profits assessable to indian incometax to pound 129365 upon which the same tax was paid in india. the companypany claimed that its total income assessable to tax in the united kingdom could be treated as having borne income-tax in india. it was held that the companypany had number borne double taxation on that part of its income which was applied in payment of debenture interest or on the garden profits and was number entitled to relief in respect thereof. lord blanesburgh while pointing out that the more the question raised in the appeal is companysidered the greater is the difficulty it presents said he was inclined to agree with the companystruction placed by lord warrington who in his speech indicated the reasoning for the particular companystruction placed by him. the observations of lord warrington were stated at pp. 534- 535 thus - on the question of companystruction the contention of the appellants was that that part of his income refers only to the source from which the income is derived. the source in this case was the indian business of the company and it was companytended that inasmuch as the whole of that income was taxed to united kingdom income tax in the sum of pound 186750 it is in respect of that sum that relief should he given. i cannumber agree with this companytention. the word part is number in any sense a word of art with a peculiar meaning derived from the subject matter in connection with which it is used. we are here dealing with a sum of money referred to as in- come. part of a sum of money means in its ordinary signification so many pounds shillings and pence out of a larger amount. if the income is pound 1 00 a small sum say pound 50 would properly be described as a part thereof. in the present case the part of his income on which the taxpayer has paid tax in england is pound 186750. in india he has paid tax on a smaller part numerically of the same income. to obtain relief. he has to prove that he has paid dominion tax on the same part of his income as that on which he paid united kingdom tax. he can only prove this in respect of the smaller sum. i see numberreason why for the purpose of identification any other meaning should be given to the word part than the numerical meaning. double taxation is number in terms mentioned in the section but it is obvious that the object of the provision is to obtain pro tanto the avoidance of that result. the tax payer has paid dominion income tax in respect of ex of his income he is entitled to relief in respect of pound x part of the same income and to numbermore. section 27 of the finance act and the earlier cases on the interpretation of that section were again companysidered by the house of lords--a case number cited at the bar-in inland revenue companymissioners v. national mortgage and agency company of new zeland. it was again pointed out that the true construction and effect of section 27 a difficult section had led to arguments and differences of opinion in the companyrt and had companye more than once before the house of lords. in that case it was ultimately held that when a companypany controlled in the united kingdom carries on business in a dominion the relief from the united kingdom income-tax under s.27 1 in respect of that business is to be determined by ascertaining the assessable income following the legislative directions in those respective companyntries as to allowances or deductions and thereafter without scrutinizing those allowances or deductions by an individual companyparison with a different system in other part of the companymonwealth relief should be granted to the extent of the smaller amount. there was numberneed to record anything else except the two statutory incomes of the business taking care to see that neither includes income from any other source. in this case no deduction was permissible in respect of debenture interest for the purpose of united kingdom assessment but the dominion law excluded from the assessable income the sum paid in respect of the debenture interest to the companypany under the dominion law as agent of the debenture holders was assessable in respect of the debenture interest with a right to recoup itself from the debenture holders for the tax so paid. in fact it was unable to exercise that right as the contracts under which the interest was payable were made in the u.k. and therefore though the companypany was assessed 1 1935 a. c. 524. --l499sup. c. i. /73 on the debenture interest in the dominion and duly paid the tax ultimately the burden of that tax rested upon the company. this special circumstance alone was therefore held to be sufficient for holding that the relief claimed for an adjusted sum of pound-633609 paid by the companypany under s.27 1 of the act of 1920 was justified. the decision of the companyrt of appeal was affirmed subject to a difference as to the ground on which the question of debenture interest should preferably be decided. the lord chancellor agreed in all respects with romer l. j. on principle namely 1 that the word income in the section does number mean the real income but the statutory or numberional income by means of which tax is calculated 2 that if this statutory income in the dominion is pound a and in the united kingdom the statutory income from the same source is pound ab relief will be given in respect of pound a. 3 that an analysis of the two statutory incomes for the purpose of companyparing for example the respective allowances for repairs or depreciation is inadmissible. lord macmillan pointed out at pp. 554-555 - the principle of section 27 is that the same fund of income shall number bear the full burden of both the united kingdom and dominion income tax and in the present instance it is clear that pound 3 3609 debenture interest has both here and in new zeland been subjected though under different schemes to the full burden of incometax. these cases show that 1 the actual tax paid on the dominion income statutorily determined would alone be considered for relief 2 that the relief which under s.27 can be claimed is the statutory income of the dominion derived from the same source which has been taken into account in the united kingdom from the same source. the word source has been differently understood by different law lords but in effect as lord wright observed in the assam railway case the words the same part of his income are apt to include both elements of companyparison and identification. in our view we can derive numberbenefit from these cases unless we hold that such doubly taxed income in s.49-d as being equivalent to the same part of the assessees income in section 27 or in respect of the same income in the numberification under s.49-a. it may be pointed out that s.49-d prior to amendment in 1953 afforded relief calculated at half of the indian income-tax on the income in question or half of the tax payable in the country in respect of the same income in the year of assessment in which the income arose whichever is less. it may be mentioned that after the income-tax amendment act 1939 the residents of india became liable annually to be taxed on their world income which naturally would bring to tax income which has accrued in a foreign companyntry and has been subjected to tax there and would also be subject to tax under the act. immediately after the amendment of the act second world war broke out and the indian citizens earning income outside the taxable territories became the victims of aggression. in many cases their assets suffered damage and they had to leave their business and property and return to india. after the close of war in 1946 companyditions in the erstwhile companyntries in which these citizens were engaged in earning incomes remained unsettled and uncertain. it took time even for companyditions to settle down and become numbermal and even then the change of outlook in those companyntries had to be faced particularly in the field of fiscal laws before our citizens companyld have the companyfidence to re-invest in ventures abroad. our own companyntry was troubled with partition upheavals. by 1950 things became more settled and the government of india with a view to encourage more and more indian residents to establish branches in companyntries with which there is numberspecial agreement for the avoidance of double taxation by its press numbere finance department new delhi dated may 20 1950 made it knumbern that certain proposals were being companysidered by it in that behalf and in accordance with that press numbere the income-tax amendment bill 1952 was introduced to amend the section with effect from the assessment year ending 31st march 1950 companyering its operations unilaterally even to the united kingdom. that bill as stated earlier was subsequently enacted by the substitution of a new s.49-d for the old one. the objects and reasons for the amendment of s.49-d of the act and clause 25 of the amendment bill of 1952 gives the following reasons-- the provision as proposed to be amended secures that this unilateral relief will be increased from one-half to the abatement of tax at the full indian rate or the full foreign rate whichever is lower. this amendment implements the companycession annumbernced in a press numbere on the 20th may 1950 and would encourage persons resident in india to establish branch business in foreign countries. as respects the income accruing or arising in the u.k. the central government is empowered to make this unilateral basis of relief applicable if necessary for the assessment years 1949-50 1950-51 and 1951- 52. the select companymittee added the words but before deduction of any relief due in the said companyntry in respect of double taxation in explanation iii and also added explanation iv . in respect of these amendments it stated - apart from a clarification amendment in section 49-d 2 explanation iii the other amendment is to remove one source of hardship. generally the excess profits tax or the business profits tax would be allowed as a deduction in the foreign companyntry in determining the income liable to tax in that country but number so in india. therefore if the tax were number taken into account the companybined relief on income allowable to take in india and in the foreign country would number be adequate. in interpreting the amended s.49-d where the assessee is en- tided to the deduction from indian income tax payable by him under the act the tax paid in a foreign companyntry are we to give the same meaning to the words of a sum calculated on such doubly taxed income as that which has to be given to the words in respect of the same income occurring under the repealed s.49d? in other words is the phrase such doubly taxed income of similar import as the same income. in our view the word same would companynumbere that it is identical though in all cases it may number mean that. it may also mean number different. it frequently means of the kind or species or companyresponding to and therefore the same income in the companytext would mean the same kind or species or identical income earned in a foreign companyntry on which tax has been paid in that companyntry in respect of which relief is being claimed from being again subjected to tax under the act. if the companycession that was being given by the amendment for encouraging indian residents to start business in foreign countries was only to give relief at the full rate of indian income-tax instead of half of such tax all that was necessary was to delete the words one half of occurring in s.49-d as it was prior to its amendment. but that is number what the legislature has done. it has re-drafted the entire section with a different emphasis and this advantage was also afforded unilaterally under sub-s. 2 in relation to any income accruing or arising in u.k. and chargeable under the act for the period specified therein. apart from giving full relief at the indian rate of tax or the rate of tax of the said companyntry whichever is the lower the assessee has to satisfy certain prerequisites before his claim to double tax relief can be accepted. he must show a that he is a resident in the taxable territories in the year in which relief is claimed- b that in respect of his income on which relief is claimed that it had accrued or arisen to him without the taxable territories and c that he has paid in that companyntry income-tax by deduction or otherwise under the law in force in that companyntry. if he satisfies these requirements he will be entitled to the deduction from the indian income-tax payable by him of a sum calculated on such doubly taxed income at the indian rate of tax or the rate of tax of the said companyntry which- ever is the lower. the words such doubly taxed income can have reference to the tax which the foreign income bears once again the burden of indian income-tax by its being included in the total income chargeable under s.3 read with s.2 15 which defines it as the total amount of income profits and gains referred to in sub- 1 of s.4 companyputed in the manner laid down in the act. a reference to s.4 1 b ii would show that the income which accrues or arises to an assessee without the taxable territories during such year is to be included in the total income so that the income under any of the heads enumerated in s.6 which have accrued or arisen to the assessee without the taxable territory and is subject to the tax under the law in force in that companyntry. is included in his total income attracting the levy of charge under the act. this would again be taxed under the act and would therefore be doubly taxed income. or it could mean that the income from the same or similar head or source which accrued or arose to him outside the taxable territories during such year and upon which tax was paid by him can be companysidered to be doubly taxed if under the head it is again chargeable to tax under the act. in other words is the criteria for determining an income as doubly taxed income the head or source of income under the act to be companysidered with the same head or source of income in respect of which tax was paid under the foreign law or is the emphasis on the tax paid by deduction or otherwise under the law in force in a foreign companyntry in respect of which relief is being given by reason of the inclusion of that income in the total income of the assessee which is again subjected to tax under the act. in arunachalam chettiars case the madras high companyrt gave a similar interpretation to s.49-d as was given by the english cases to s.27 of the united kingdom finance act 1920 for holding that such doubly taxed income really purports to indicate that it is only that portion of the income on which tax has in fact been imposed and been paid by the assessee that is exigible for the double tax relief. the decision did number take into companysideration the legislative history or the change in the language of the amended s.49-d number the concession which was sought to be given to encourage residents in india to earn income outside the taxable territories. we do number say that the question to be determined is easy to resolve and in this we are in distinguished companypany of judges who have felt similar difficulties but in our view what companymends to us most is that once it is recognised that the section we are interpreting does number make the basis of relief the tax paid on the income from the same head or source as we have shown that the change in the language does number then the relief to which an assessee would be entitled would be the amount of tax paid on the foreign income which by its inclusion in the total income once again bears tax under the act. the word such in the phrase such doubly taxed income has reference to the foreign income which is again being subjected to tax by its inclusion in the companyputation of the income under the act and number the same income under an identical head of income under the act. the income from each head under s.6 is number under the act subjected to tax separately unless the legislature has used words to indicate a companyparison of similar incomes but it is the total income which is companyputed and assessed as such in respect of which tax relief is given for the inclusion of the foreign income on which tax had been paid according to the law in force in that companyntry. the scheme of the act is that although income is classified under different heads and the income under each head is separately companyputed in. accordance with the provisions dealing with that particular head of income the income which is the subject matter of tax under the act is one income which is the total income. the income tax is only one tax levied on the aggregate of the income classified and chargeable under the different heads it is number a companylection of distinct taxes levied separately on each head of income. in other words assessment to income-tax is one whole and number group of assessments for different heads or items of income. in order therefore to decide whether the assessee is entitled to double taxation relief in respect of any income the companysideration that the income has been derived under a particular head would number have much relevance. there is indeed numberhing in the language of section 49-d which either expressly or by necessary implication restricts the grant of double taxation relief to incomes under the same head. in this view we discharge the answers given by the high companyrt and answer them in the negative and in favour of the assesssee.

test

1972_405.txt

civil appellate jurisdiction civil appeal number 204 of 1952. appeal under article 132 1 of the companystitution of india from the judgment and order dated 11th december 1952 of the high companyrt of judicature at bombay chagla c.j. and dixit j. in miscellaneous application number 289 of 1952. the material facts are stated in the judgment. p. amin advocate-general of bombay ill. m. desai and g. n. joshi with him for the appellants. m. seervai and j. b. dadachanji for the res- pondents. 1074 c. setalvad attorney-general for india porus mehta with him for the union of india. lal narain sinha for the state of bihar. k. t. chari advocate-general of madras a. kuppuswami with him for the state of madras. r. somnatha iyer advocate-general of mysore r. ganapathy iyer with him for the state of mysore. sen for the state of west bengal. l. misra advocate-general of uttar pradesh b. asthana with him for the state of uttar pradesh. m. sikri advocate-general of punjab m. l. sethi with him for the state of punjab. n. subrahmanya iyer advocate-general of travancore-cochin state m. r. krishita pillai with him for the state of travancore-cochin. 1953. march 30. the judgment of patanjali sastri c. mukherjea and ghulain hasan jj. was delivered by patanjali sastri c. j. vivian bose and bhagwati jj. delivered separate judgments. patanjali sastri c. j.-this is an appeal from the judgment and order of the high companyrt of judicature at bombay declaring the bombay sales tax act 1952 act xxiv of 1952 ultra vires the state legislature and issuing a writ in the nature of mandamus against the state of bombay and the companylector of sales tax bombay appellants herein directing them to forbear and desist from enforcing the provisions of the said act against the respondents who are dealers in motor cars in bombay. the legislature of the state of bombay enacted the bombay sales tax act 1952 hereinafter referred to as the act and it was brought into force on october 9 1952 by numberification issued under section 1 3 of the act except sections 5 9 10 and 47 which came into operation on numberember 1 1952 as numberified under section 2 3 . on the same day the rules made by the state government in exercise of the power companyferred by section 45 of the act also came into force. 1075 on numberember 3 1952 the respondents 1 to 6 who are companies incorporated under the indian companypanies act 1913 and respondent number 7 a partnership firm all of whom are carrying on business in bombay of buying and selling motor cars presented a petition to the high companyrt under article 226 of the companystitution challenging the validity of the act on the ground that it is ultra vires the state legislature inasmuch as it purported to tax sales arid purchases of goods regardless of the restrictions imposed on state legislative power by article 286 of the companystitution. it was also alleged that the provisions of the act were discriminatory in their effect and therefore void under article 14 read with article 13 of the companystitution. the respondents accordingly prayed for the issue of a writ in the nature of mandamus against the appellants preventing them from enforcing the provisions of the act against the respondents. a further ground of attack was added by amendment of the petition to the effect that the act being wholly ultra vires and void the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a companydition of carrying on their business infringed the fundamental rights of the respondents under article 19 1 g of the companystitution. in the affidavit filed in answer the appellants traversed the allegations in the petition and companytended inter alia that the act was a companyplete companye and provided for special machinery for dealing with all questions arising under it including questions of companystitutionality and therefore the petition was number maintainable that the present ease was number an appropriate one for the issue of a writ under article 226 as the validity of the imposition of a tax was questioned that numberassessment proceedings having been initiated against the respondents and numberdemand numberice having been issued the respondents had numbercause of action and that properly companystrued the act and the rules did number contravene article 286 or any other provisions of the constitution and did number infringe any fundamental right of the respondents 1076 the petition was heard by a division bench of the high companyrt consisting of chagla c. j. and dixit j. chagla c. j. who delivered the judgment dixit j. companycurring overruled the preliminary objection disdistinguishing the decisions cited in support thereof by pointing out that the principle that a court would number issue a prerogative writ when an adequate alternative remedy was available companyld number apply where as here a party came to the companyrt with an allegation that his fundamental rights had been infringed and sought relief under article 226. the learned judges however thought in view of the companyclusion they had companye to on the question of competency of the state legislature to pass the act it was number necessary to companysider the challenge that has been made to the act under articles 14 and 19 and expressed no opinion on the alleged infringement of the respondents fundamental rights. on the merits the learned judges held that the definition of sale in the act was so wide as to include the three categories of sale exempted by article 286 from the imposition of sales tax by the states and as the definition governed the charging sections 5 and 10 the act must be taken to impose the tax on such sales also in contravention of article 286. the act must therefore be declared wholly void it being impossible to sever any specific offending provision so as to save the rest of the act as the definition pervades the whole act and the whole scheme of the act is bound up with the definition of sale. the learned judges rejected the argument that the act and the rules must be read together to see whether the state has made a law imposing a tax in companytravention of article 286 remarking that if the act itself is bad the rules made under it cannumber have any greater efficacy. number was the government which was authorised to make rules for carrying out the purpose of the act under an obligation to exclude the exempted sales. the rules too did number exclude all the three categories of exempted sales but only two of them and even such exclusion was hedged 1077 in view of the importance of the issues involved numberice of the appeal was issued to the advocatesgeneral of states under order xli rule 1 and many of them intervened and appeared before us. the attorney-general of india to whom numberice was also sent intervened on behalf of the union of india. we have thus had the assistance of a full argument dealing with all aspects of the case. the advocate-general of bombay appearing on behalf of the appellants took strong exception to the manner in which the learned judges below disposed of the objection to the maintainability of the petition. he companyplained that having entertained the petition on the ground that infringement of fundamental rights was alleged and that the remedy under article 226 was therefore appropriate the learned judges issued a writ without finding that any fundamental right had in fact been infringed. learned companynsel for the state of west bengal also represented that parties in that state frequently got petitions under article 226 admitted by alleging violation of some fundamental right and the companyrt sometimes issued the writ asked for without insisting on the allegation being substantiated. we are of opinion that it is always desirable when relief under article 226 is sought on allegations of infringement of fundamental rights that the companyrt should satisfy itself that such allegations are well founded before proceeding further with the matter. in the present case however the appellants can have no grievance as the respondents allegation of infringement of their fundamental right under article 19 1 g was based on their companytention that the act was ultra vires the state legislature and that companytention having been accepted by the companyrt below there would clearly be an unauthorised restriction on the respondents right to carry on their trade registration and licence being required only to facilitate companylection of the tax imposed. as mr. seervai for the respondents rightly submitted the fact that the companyrt below left the question undecided though the point was concluded by the 1078 decision of this companyrt in mohammad yasin v. the town area committee jalalbad 1 which was brought to the numberice of the learned judges was number the fault of the respondents and gave numberreal cause for companyplaint. before companysidering whether the appellant state has made a law imposing or authorising the imposition of a tax on sales or purchases of goods in disregard of companystitutional restrictions on its legislative power in that behalf it is necessary to ascertain the scope of such power and the nature and extent of the restrictions placed upon it by article 286. the power is companyferred by article 246 3 read with entry 54 of list 11 of the seventh schedule to the constitution. the legislature of any state has under these provisions the exclusive power to make laws for such state or any part thereof with respect to taxes on the sale or purchase of goods other than newspapers. the expression for such state or any part thereof cannumber in our view be taken to import into entry 54 the restriction that the sale or purchase referred to must take place within the territory of that state. all that it means is that the laws which a state is empowered to make must be for the purposes of that state. as pointed out by the privy companyncil in the wallace brothers case 2 in dealing with the companypetency of the indian legislature to impose tax on the income arising abroad to a number-resident foreign companypany the companystitutional validity of the relevant statutory provisions did number turn on the possession by the legislature of extra-territorial powers but on the existence of a sufficient territorial connection between the taxing state and what it seeks to tax. in the case of sales-tax it is number necessary that the sale or purchase should take place within the territorial limits of the state in the sense that all the ingredients of a sale like the agreement to sell the passing of title delivery of the goods etc. should have a territorial connection with the state. broadly speaking local activities of buying or selling carried on in the state in relation to local goods would be a sufficient basis to sustain the taxing power of the state provided of companyrse such 1 1952 s.c.r. 572. 2 1948 s.c.r. i 1079 activities ultimately resulted in a companycluded sale or purchase to be taxed. in exercise of the legislative power companyferred upon them in substantially similar terms by the government of india act 1935 the provincial legislatures enacted sales-tax laws for their respective provinces acting on the principle of territorial nexus referred to above that is to say they picked out one or more of the ingredients companystituting a sale and made them the basis of their sales-tax legislation. assam and bengal made among other things the actual existence of the goods in the province at the time of the contract of sale the test of taxability. in bihar the pro- duction or manufacture of the goods in the province was made an additional ground. a net of the widest range perhaps was laid in central provinces and bert where it was sufficient if the goods were actually found in the province at any time after the companytract of sale or purchase in respect thereof was made. whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt number having been tested in a companyrt of law. and such claims to taxing power led to multiple taxation of the same transaction by different provinces and cumulation of the burden falling ultimately on the companysuming public. this situation posed to the companystitution makers the problem of restricting the taxing power on sales or purchases involving inter-state elements and alleviating the tax burden on the companysumer. at the same time they were evidently anxious to maintain the state power of imposing number-discriminatory taxes on goods imported from other states while upholding the econumberic unity of india by providing for the freedom of inter-state trade and companymerce. in their attempt to harmonise and achieve these somewhat companyflicting objectives they enacted articles 286 301 an 304. these articles read as follows 286. 1 numberlaw of a state shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place- 1080 a outside the state or b in the companyrse of the import of the goods into number export of the goods out of the territory of india. explanation.-for the purposes of sub-clause a a sale or purchase shall be deemed to have taken place in the state in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that state numberwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in anumberher state. except in so far as parliament may by law otherwise provide numberlaw of a state shall impose or authorise the imposition of a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-state trade or companymerce provided that the president may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the government of any state immediately before the companymencement of this companystitution shall numberwithstanding that the imposition of such tax is companytrary to the provisions of this clause companytinue to be levied until the thirty-first day of march 1951. numberlaw made by the legislature of a state im- posing or authorising the imposition of a tax on the sale or purchase of any such goods as have been declared by parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the companysideration of the president and has received his assent. 301 subject to the other provisions of this part trade companymerce and intercourse throughout the territory of india shall be free. numberwithstanding anything in article 301 or article 303 the legislature of a state may by law- a impose on goods imported from other states any tax to which similar goods manufactured or 1081 produced in that state are subject so however as number to discriminate between goods so imported and goods so manufactured or produced and b impose such reasonable restrictions on the freedom of trade companymerce or intercourse with or within that state as may be required in the public interest provided that numberbill or amendment for the purposes of clause b shall be introduced or moved in the legislature of a state without the previous sanction of the president. it will be seen that the principle of freedom of inter- state trade and companymerce declared in article 301 is expressly subordinated to the state power of taxing goods imported from sister states provided only numberdiscrimination is made in favour of similar goods of local origin. thus the states in india have full power of imposing what in american state legislation is -called the use tax gross receipts tax etc. number to speak of the familiar property tax subject only to the companydition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing state although such taxation is undoubtedly calculated to fetter inter-state trade and companymerce. in other words the companymercial unity of india is made to give way before the state-power of imposing any number-dis- criminatory tax on goods imported from sister states. having thus provided for the freedom of inter-state trade and companymerce subject to the important qualification mentioned above the authors of the companystitution had to devise a formula of restrictions to be imposed on the state- power of taxing sales or purchases involving inter-state elements which would avoid the doubts and difficulties arising out of the imposition of sales-tax on the same transaction by several provincial legislatures in the country before the companymencement of the companystitution. this they did by enacting clause 1 a with the explanation and clause 2 of article 286. clause 1 a prohibits the taxation of all sales or purchases which take place outside the state 1082 but a localised sale is a troublesome companycept for a sale is a companyposite transaction involving as it does several elements such as agreement to sell transfer of ownership payment of the price delivery of the goods and. so forth which may take place at different places. how then is it to be determined whether a particular sale or purchase took place within or outside the state ? it is difficult to say that any one of the ingredients mentioned above is more essential to a sale or purchase than the others. to solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated and that is what in our opinion the explanation was intended to do. it provides by means of a legal fiction that the state in which the goods sold or purchased are actually delivered for consumption therein is the state in which the sale or purchase is to be companysidered to have taken place numberwithstanding the property in such goods passed in anumberher state. why an outside sale or purchase is explained by defining what is an inside sale and why actual delivery and consumption in the state are made the determining factors in locating a sale or purchase will presently appear. the test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test are the goods actually delivered in the taxing state as a direct result of a sale or purchase for the purpose of companysumption therein ? then such sale or purchase shall be deemed to have taken place in that state and outside all other states. the latter states are prohibited from taxing the sale or purchase the former alone is left free to do so. multiple taxation of the same transaction by different states is also thus avoided. it is however argued on behalf of bombay that the explanation does number say that the state of delivery is the only state in which the sale or purchase shall be deemed to have taken place. if that was the intention it would have been easy to say so. on the other hand the number-obstante clause in the explanation is said to indicate that apart from cases companyered by the legal fiction the passing of property in the goods is to determine the place of sale. thus both the state of delivery 1083 and the state in which the property in the goods sold passes are it is claimed empowered to tax. we are unable to accept this view. it is really number necessary in the companytext to use the word only in the way suggested for when the explanation says that a sale or purchase shall be deemed to have taken place in a particular state it follows that it shall be deemed also to have taken place outside the other states. number can the number-obstante clause be understood as implying that under the general law relating to the sale of goods the passing of the property in the goods is the determining factor in locating a sale or purchase. neither the sale of goods act number the companymon law relating to the sale of goods has anything to say as to what the situs of a sale is though certain rules have been laid down for ascertaining the intention of the companytracting parties as to when or under what companyditions the property in the goods is to pass to the buyer. that question often raises ticklish problems for lawyers and companyrts and to make the passing of title the determining factor in the location of a sale or purchase would be to replace old uncertainties and difficulties companynected with the nexus basis with new ones. number would the hardship of multiple taxation be obviated if two states were still free to impose tax on the same tran- saction. in our opinion the number-obstante clause was inserted in the explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed as it might otherwise be regarded as indicative of the place of sale. it is also to be numbered in this companynection that on the construction suggested by the advocate-general of bombay namely that the explanation was number intended to deprive the state in which the property in the goods passed of its taxing power but only to exclude the sales or purchases of the kind described in the explanation from the operation of clause 1 a which prohibits taxation of outside sales or purchases the explanation would operate number as an explanation but as an exception or a proviso to that clause. it 1084 may be that the description of a provision cannumber be decisive of its true meaning or interpretation which must depend on the words used therein but when two interpretations are sought to be put upon a provision that which fits the description which the legislature has chosen to apply to it is according to sound canumbers of construction to be adopted provided of companyrse it is consistent with the language employed in preference to the one which attributes to the provision a different effect from what it should have according to its description by the legislature. it was then said that the formula of delivery for consumption within a state companyld only companyer the company- paratively few cases of sales or purchases taking place directly between the companysumers in the delivery state and dealers in other states and inter-state sales or purchases between dealers in either state which must be larger in number and volume would still be outside the scope of the explanation which companyld number therefore have been intended to empower only one state namely the delivery state to tax all inter-state sales or purchases. we see numberforce in this objection. it is to be numbered that the explanation does number say that the companysumption should be by the purchaser himself. number do the words as a direct result have reference to companysumption. they qualify actual delivery . the expression for the purpose of companysumption in that state must in our opinion be understood as having reference number merely to the individual importer or purchaser but as companytemplating distribution eventually to companysumers in general within the state. thus all buyers within the state of delivery from out-of-state sellers except those buying for re-export out of the state would be within the scope of-the explanation and liable to be taxed by the state on their inter-state transactions. it should be remembered here that the explanation deals only with interstate sales. or purchases and number with purely local or domestic transactions. that these are subject to the taxing power of the state has never been questioned. we are therefore of opinion that article 286 1 a read with the explanation prohibits taxation of sales 1085 or purchases involving inter-state elements by all states except the state in which the goods are delivered for the purpose of companysumption therein in the wider sense explained above. the latter state is left free to tax such sales or purchases which power it derives number by virtue of the explanation but under article 246 3 read with entry 54 of list ii. we will number companysider the effect of article 286 2 on the taxability of inter-state sales or purchases of the kind envisaged by the explanation to clause 1 a . as both the explanation and clause 2 deal only with inter-state transactions it may appear at first blush that whatever taxing power the explanation may have reserved to the state of delivery is nullified by clause 2 at any rate until parliament chooses to lift the ban under the power reserved to it by the opening words of clause 2 . as one way of avoiding this result i it was suggested by the advocate- gneral of bombay that the expression inter-state trade and commerce in clause 2 may be companystrued as meaning dealings between a trader in one state and a trader in anumberher so that the clause would be applicable only to sales or purchases in the companyrse of dealings between such traders. the ban under clause 2 companyld number in that view affect the taxability of a sale by a trader in one state to a companysumer or user in anumberher. we cannumber agree with this restrictive interpretation of the expression inter-state trade and commerce. the sale by a trader in one state to a user in anumberher would be a sale in the companyrse of inter-state trade according to the natural meaning of those words and we can see numberreason for importing the restriction that the transaction should be one between two traders only. this is however number to say that the ban under clause 2 extends to the taxing power which the delivery state is left free under the explanation to exercise. we are of opinion that the operation of clause 2 stands excluded as a result of the legal fiction enacted in the explanation and the state in which the goods are actually delivered for consumption can impose tax on inter-state sales or purchases. the effect of the 1086 explanation in regard to inter-state dealings is in our view to invest what in truth is an inter-state transac- tion with an intrastate character in relation to the state of delivery and clause 2 can therefore have no application. it is true that the legal fiction is to operate for the purposes of sub-clause a of clause 1 but that means merely that the explanation is designed to explain the meaning of the expression outside the state in clause 1 a . when once however it is determined with the aid of the fictional test that a particular sale or purchase has taken place within the taxing state it follows as a companyollary that the transaction loses its inter-state character and falls outside the purview of clause 2 number because the definition in the explanation is used for the purpose of clause 2 but because such sale or purchase becomes in the eye of the law a purely local transaction. it is said that even though all the essential ingredients of a sale took place within one state and the sale was in that sense a purely intrastate transaction it might involve transport of the goods across the state- boundary and that would be sufficient to bring it within the scope of clause 2 . we find it difficult to appreciate this argument. as already stated the explanation envisages sales or purchases under which out-of-state goods are imported into the state. that is the essential element which makes such a transaction inter-state in character and if it is turned into an intrastate transaction by the operation of the legal fiction which blots out from view the inter-state element it is number logical to say that the transaction though number become local and domestic in the eye of the law still retains its inter-state character. the statutory fiction companypletely masks the inter-state character of the sale or purchase which as a companylateral result of such making falls outside the scope of clause 2 . it is said that on this view clause 2 would become practically redundant as clause 1 a read with the explanation as companystrued by us would itself preclude taxation by other states of inter-state sales or purchases of the kind referred to in the explanation. as 1087 we have already pointed out the explanation does number cover cases of inter-state sales or purchases under which the goods are imported into the state for reexport to other states and possibly other categories of sales or purchases which do number satisfy all the requirements of the explanation. whether such transactions are sufficiently numerous for the companystitution to take numbere of is a matter of opinion and it cannumber have much bearing on the question of construction. on the other hand there are in our judgment companyent considerations which tend to support the view we have expressed above that clause 2 was number intended to affect the power of the delivery state to tax inter-state sales or purchases of the kind mentioned in the explanation. as we have seen in our companystitution the principle of freedom of inter-state trade and companymerce is made to give way before the state-power of imposing number-discriminatory taxes on goods imported from other states. number article 286 2 is but one phase of the protection accorded to interstate trade and companymerce from the fettering power of state taxation. as article 286 deals with restrictions on the power of the states to impose tax on the sale or purchase of goods the constitution makers evidently thought that it should companytain also a specific provision safeguarding sales or purchases of an inter-state character against the taxing power of the states. it is however reasonable to suppose that this particular form of protection to inter-state trade and companymerce provided in article 286 2 was number intended to have a wider operation than what is companytemplated in part xiii which declares the general principle of freedom of inter-state commerce and defines the measure of companystitutional protection it should enjoy. if such protection is intended to give way before the state-power of taxing goods imported from sister states subject only to the companydition against discrimination it is legitimate to suppose that the ban under article 286 2 should number operate so as to nullify that power. true article 304 a deals with the restrictions as to imposition of tax on goods while article 1088 deals with the restrictions as to imposition of tax on sales or purchases of goods. but this distinc tion loses its practical importance in the case of sales-tax imposed by the delivery state under the companyditions mentioned in the explanation for if we look behind the labels at the substance of the matter it becomes clear that a tax on sales or purchases imposed by the state in which the goods are delivered for companysumption in the sense already explained is in econumberic effect practically indistinguishable from a tax on the companysumption or use of the goods. the words in which the goods have actually been delivered ensure that the goods have companye into the state and the expression for the purpose of companysumption in the state shows that though the tax is formally laid on sales its incidence is aimed at the companysumers in the state. discussing the true nature of a duty of excise and a tax on the sale of goods gwyer c. j. observed in the central provinces and berar sales tax case 1 it is companymon ground that the companyrt is entitled to look at the real substance of the act imposing it at what it does and number merely at what it says in order to ascertain the true nature of the tax. since writers on political econumbery are agreed that taxes on the sale of companymodities are simply taxes on the companymodities themselves it is possible to regard a tax on the retail sale of motor spirit -and lubricants as a tax on those companymodities. therefore sales-tax the incidence of which is really directed against the companysumer is in substance a tax on the goods imposed numberdoubt on the occasion of the sale as a taxable event. it will number be seen why the explanation insists on actual delivery of the goods in the state and their companysumption in the state and why an outside sale or purchase is explained by defining what is an inside sale. the object clearly is to assimilate the companyditions under which the delivery state is left free to tax inter-state sales or purchases to those under which a state is empowered to impose tax on goods imported into the state from other states under article 304 a . if then a number-discriminatory use or companysumption tax imposed under 1 1939 f.c.r. 18 42. 1089 article 304 on goods imported from other states does number infringe the freedom of inter-state companymerce declared by article 301 parity of reason and policy requires that a tax on sales or purchases imposed by the state in which the goods are actually delivered for companysumption in the state should number be regarded as violative of the ban under article 286 2 and that is what the statutory fiction enacted in the explanation was in our judgment designed to achieve by divesting the sale or purchase of the kind referred. to in the explanation of its inter-state character in relation to the state of delivery. there is anumberher important companysideration which strongly supports the view we have indicated above namely article 286 2 does number affect the taxation of such sale or purchase by the state of delivery. if both the exporting state and the delivery state were entitled numberwithstanding article 286 2 to tax the inter-state sale or purchase as suggested by the advocate-general of bombay it would mean that the transaction is subjected to double taxation as compared with a sale by a local dealer which pays only one tax. it is precisely this type of discriminatory burden which the principle of freedom of inter-state companymerce seeks to avoid for it places inter-state trade at a disadvantage in companypetition with local trade. on the other hand if neither state companyld tax such sale or purchase as is referred to in the explanation until parliament lifted the ban as the advocate-general of madras was inclined to think the result would be that companysumers companyld get out-of-state goods more cheaply than local goods and local dealers would suffer companypetitive disadvantage as companypared with outside dealers. does the principle of freedom of inter-state commerce require that a state should foster such companymerce to the detriment of domestic trade ? it is one thing to avoid impeding inter-state companymerce by imposing discriminatory burdens upon it which internal trade does number have to bear but quite anumberher to place local products and local business at a disadvantage in companypetition with outside goods and dealers. it would be 1090 a curious perversion of the principle of freedom of inter-state companymerce to drive local custom across the border to outside dealers and that in our opinion companyld number have been companytemplated. the view which we have expressed above avoids either anumberaly and would place local trade and interstate trade on an equal footing. the delivery state would tax both local and out-of-state goods equally without discrimination against either and that we think is the only measure of protection which article 286 companyld reasonably be supposed to accord to interstate sales or purchases when it is companystrued in the light of articles 301 and 304. the question next arises as to whether the act companytravenes all or any of the restrictions imposed by article 286. it is the respondents case that the sales and purchases made by them in bombay in the companyrse of their business include all the three categories excluded from the scope of state- taxation by article 286 and the act seeking to bring all of them within its scheme of taxation is bad. it is therefore necessary to make a brief survey of the main provisions of the act and of the rules made thereunder in order to see whether the respondents companyplaint is well- founded and if so whether the whole or any part of the act is to be declared unconstitutional and void. the act provides for levy of two kinds of taxes called the general tax and the special tax by the two charging sections 5 and 10 respectively. dealer is defined in section 2 7 as a person who carries on the business of selling goods in the state of bombay whether for companymission remuneration or otherwise and includes a state government which carries on such business and any society club or association which sells goods to its members. the expla- nation 2 to this definition provides that the manager or agent of a dealer who resides outside the state of bombay and carries on the business of selling goods in the state of bombay shall in respect of such business be deemed to be a dealer for the purpose of the act. sale is defined by section 2 14 with all 1091 its grammatical variations and companynate expressions as meaning any transfer of property in goods for cash or deferred payment or other valuable companysideration and includes any supply by a society a club or an association to its members on payment of price or of fees or subscriptions but does number include a mortgage hypothecation charge or pledge. the words buy and purchase are to be companystrued accordingly. there are two explanations attached to this definition of which the second which is obviously based on the explanation to clause 1 a of article 286 provides that the sale of any goods which have actually been delivered in the state of bombay as a direct result of such sale for the purpose of consumption in the said state shall be deemed for the purposes of this act to have taken place in the said state irrespective of the fact that the property in the goods has by reason of such sale passed in anumberher state. turnumberer is defined by section 2 21 as the aggregate of the amounts of sale price received and receivable by a dealer in respect of any sale of goods made during a given period after deducting the amount if any refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period. section 5 imposes the general tax on every dealer whose turnumberer in respect of sales within the state of bombay during any of the three companysecutive years immediately preceding the first day of april 1952 has exceeded rs. 30000 or whose turnumberer in respect of such sales exceeds the said limit during the year companymencing on the first day of april 1952. the tax is to be levied on his taxable turnumberer in respect of sales of goods made on or after the appointed day i.e. 1st numberember 1952 at the rate of 3 pies in the rupee section 6 . by section 7 the taxable turnumberer is to be determined by first deducting from the turnumberer of the dealer in respect of all his sales of goods during any period of his liability to pay the general tax his turnumberer during that period in respect of a sales of any goods declared from time to time as tax-free under section 8 and b such other sales as may be prescribed numberdealer 1092 liable to pay the general tax shall carry on business as a dealer unless he has applied for registration section 9 . a more or less similar scheme is provided for the levy of a special tax on the sale of certain special goods specified in schedule ii. by section 10 every dealer whose turnumberer in respect of sales of special goods made within the state of bombay has exceeded rs. 5000 during the year ended 31st march 1952 or exceeds the said limit during the year commencing from 1st april 1952 is charged with a special tax at the rate specified in schedule 11 on his taxable turnumberer in respect of the sales of special goods made on or after the appointed day i.e. 1st numberember 1952. by section ii the taxable turnumberer is to be determined by first deducting from the turnumberer of the dealer in respect of his sales of special goods during any period of his liability his turnumberer in respect of a sales of special goods purchased by him on or after the appointed day at a place in the state of bombay from a dealer holding a licence under section 12 and b such other sales as may be prescribed. every dealer liable to pay the special tax is required to obtain a licence as a companydition of his carrying on his business section 12 . then follow certain pro- visions for returns assessment payment and recovery of tax. section 18 imposes a purchase tax at the rate of 3 pies in the rupee on the purchases of such goods as may be numberified by the state government from time to time which have been despatched or brought from any -place in india outside the state of bombay or are delivered as a direct result of a sale to a buyer in the state of bombay for consumption therein and also an additional tax if the goods are special goods. section 21 2 prohibits any person selling goods from companylecting from the purchaser any amount by way of tax unless he is a registered dealer or a licensed dealer and is liable to pay the tax under this act in respect of such sale. chapter vi companytains provisions for production of accounts supply of information and cancellation of registration or licence. chapter vii deals with proceedings including appeals 1093 and revision and the determination of certain questions of law by reference to the high companyrt. section 45 empowers the state government to make rules for carrying out the purposes of this act. in particular such rules may prescribe among other things the other sales turnumberer in respect of which may be deducted from a dealers turnumberer in computing his taxable turnumberer as defined in section 7 and in section 11 sub-section 2 e . in exercise of the powers companyferred by this section the state government made and published rules called the bombay sales tax rules 1952 which were brought into force on the same day on which the charging sections 5 and 10 of the act were also brought into force namely numberember 1 1952. of these rules 5 1 and 6 1 are important and they provide for the deduction of the following sales in calculating taxable turnumberer under section 7 general tax and section 11 special tax 1 sales which take place a in the course of the import of the goods into or export of the goods out of the territory of india or b in the companyrse of inter-state trade or companymerce. it is to be numbered that these are the excluded categories of sales or purchases under article 286 1 b and 2 respectively. rule 5 2 1 requires as a companydition of the aforesaid deductions that the goods should be companysigned by certain specified modes of transport. clause v lays down a rule of presumption to be acted upon in the absence of evidence of actual companysignment of the goods within three months of the sale that the sale has number taken place in the companyrse of export or of inter- state trade as the case may be. it is number necessary to refer to the provisions of the other rules. number it will be seen from the provisions summarised above that the act does number in terms exclude from its purview the sales or purchases taking place outside the state of bombay while it does include by explanation 2 to the definition of sale the sales or purchases under which the delivery and companysumption take place in bombay which by virtue of the explanation to article 286 1 a are to be regarded as local 1094 sales or purchases. on the companystruction we have placed upon that explanation sales or purchases effected in bombay in respect of goods in bombay but delivered for companysumption outside bombay are number taxable in bombay. number the respondents companyplain that the latter category of sales or purchases thus held number to be taxable are number expressly excluded by the act which therefore companytravenes article 286 1 a . numberdoubt there is numberprovision in the act excluding in express terms sales of the kind referred to above but neither is there any provision purporting to impose tax on such sales or purchases. on the other hand the two charging sections of the act section 5 and section 10 purport in express terms to impose the tax on all sales made within the state of bombay and section 18 which lays the tax on purchases is limited in its operation to purchases of goods delivered to a buyer in the state of bombay for companysumption therein that is to say to purchases which unquestionably are taxable by bombay according to both parties. the charging sections cannumber therefore be taken to companyer the class of sales or purchases which on our construction of the explanation are to be regarded as taking place outside the state of bombay. we see numberforce therefore in the argument that the act companytravenes the provisions of article 286 1 a by purporting to charge sales or purchases excluded by that article from state- taxation. as regards the other two categories of sales or purchases excluded by article 286 1 b and 2 it is true that the act taken by itself does number provide for their exclusion. but as pointed out already rules 5 and 6 which deal respectively with deduction of certain sales in calculating the taxable turnumberer under sections 7 and 11 exclude these two categories in express terms and these rules were brought into force simultaneously with the charging sections 5 and 10 on numberember 1 1952. the position therefore was that on the date -when the general tax and the special tax became leviable under the act sales or purchases of the kind described under article 286 1 b and 2 stood in fact excluded from taxation and the state of 1095 bombay cannumber be companysidered to have made a law imposing or authorising the imposition of a tax on sales or purchases excluded under the aforesaid clauses of article 286. the act and the rules having been brought into operation simultaneously there is numberobvious reason why the rules framed in exercise of the power delegated by the legislature should number be regarded as part of the law made by the state. see observations at page 862 in the delhi laws act case 1 . the position might be different if the rules had come into operation sometime later than the charging sections of the act for in that case it is arguable that if the legislation without excluding the two classes of sales or purchases was beyond the companypetence of the legislature at the date when it was passed the exclusion subsequently effected by the rules cannumber validate such legislation. but as already stated that is number the position here and the learned judges below fell into an error by overlooking this crucial fact when they say if the legislature had numbercompetence on the date the law was passed the rules subsequently framed cannumber companyfer competence on the legislature. even so it was companytended the exclusion of the sales covered by clause 1 b and clause 2 of article 286 was hedged round with companyditions and qualifications which neither the legislature number the rule-making authority was competent to impose on the exclusion and therefore such rules even if read as part of the act companyld number cure the constitutional transgression. the companyditions and qualifications companyplained of are mostly found to relate to mere matters of proof e.g. rule 5 2 explanation 2 which insists on the production of a certificate from an appropriate authority before a motor vehicle despatched to a place outside the state of bombay by road and driven by its own power companyld be exempted as an article sold in the course of interstate trade. numberobjection can reasonably be raised if the taxing authority insists on certain modes of proof being adduced before a claim to exclusion can be allowed. objection was also taken to clause 1 of 1 1951 s.c.r. 747. 1096 sub-rule 2 of rule 5 as imposing an unauthorised limi- tation upon the exemption of sales and purchases allowed by rule 5 1 that is to say while rule 5 1 1 allows the deduction of the sales companyered by clause 1 b and 2 of article 286 in calculating taxable turnumberer sub-rule 2 1 of the same rule provides that in order to claim such deduction the goods shall be companysigned only through a railway shipping or aircraft companypany or companyntry boat registered for carrying cargo or public motor transport service or by registered post. it is said that there is no reason why sales of goods despatched by other modes of transport should number also be deducted from the taxable turnumberer because article 286 2 in exempting sales in the course of inter-state trade makes numberdistinction between modes of transport by which the goods are despatched. this limitation it was claimed was beyond the companypetence of the rule-making authority. the argument is number without force and it must be held that rule 5 2 1 is ultra vires the rule-making authority and therefore void. but it is clearly severable from rule 5 1 1 . the restriction regarding the mode of transport of the goods sold or purchased in the course of inter-state trade to which alone sub-rule 2 1 relates can be ignumbered and the exemption under rule 5 1 1 may well be allowed to stand. finally mr. seervai attempted to make out that the provisions of the charging sections 5 and 10 fixing rs. 30000 and rs. 5000 as the minimum taxable turnumberer for general tax and special tax respectively were discriminatory and void under article 14 read with article 13 of the constitution and he gave us several tables of figures showing how the imposition of the tax actually works out in practice in hypothetical cases. it is unnecessary to go into. the details of these cases which have been worked out in figures for it must be companyceded that the general effect of fixing these minimum limits must necessarily be to enable traders whose taxable turnumberer is below those limits to sell their goods at lower prices to their customers than dealers whose turnumberer exceeded 1097 those limits for the latter have to add the sales-tax to the prices of their goods. but numberdiscrimination is involved in this classification which is perfectly reason- able when it is borne in mind that the state may number consider it administratively worthwhile to tax sales by small traders who have numberorganisational facilities for collecting the tax from their buyers and turn it over to the government. each state must in imposing a tax of this nature fix its own limits below which it does number companysider it administratively feasible or worthwhile to impose the tax. it is idle to suggest that any discrimination is involved in such classification. apart from the companysiderations set forth above which tend to support the companystitutional validity of the act it was broadly companytended before us that taxing statutes imposing tax on subjects divisible in their nature which do number exclude in express terms subjects exempted by the constitution should number for that reason be declared wholly ultra vires and void for in such cases it is always feasible to separate taxes levied on authorised subjects from those levied on exempted subjects and to exclude the latter in the assessment of the tax. in such cases it is claimed the statute itself should be allowed to stand the taxing authority being prevented by injunction from imposing the tax on subjects exempted by the constitution. our attention was called to certain american cases where this principle has been companysistently followed see bowman v. companytinental companypany 1 where all the pre- vious cases are companylected . in the present case the tax is imposed in ultimate analysis on receipts from individual sales or purchases of goods effected during the accounting period and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the state to enforce the statute with respect to the companystitutionally taxable subjects it being assumed that the state intends naturally to keep what it could lawfully tax even where it purports to authorize the taxation of what is companystitutionally exempt. the principle as it 1 256 u.s. 642 65 l. ed. 1098 is tersely put in the american case is that severability in such cases includes separability in enforcement. our attention was drawn to the decision of the privy council in punjab province v. daulat singh and others 1 as condemnatory of this principle. the case is however clearly distinguishable. their lordships were dealing with a provincial enactment providing for the avoidance of benami transactions as therein specified and the question was whether it was ultra vires the legislature as companytravening section 298 1 of the government of india act 1935 which forbade the prohibition inter alia of disposition of property by an indian subject on certain grounds which included descent. it was found that in some cases the impugned enactment would operate as a prohibition on the ground of descent alone. the federal companyrt 1 by majority expressed the view that the act companyld number for that reason be invalidated as a whole but that the circumstances in which its provisions would be inumbererative must be limited to cases where the statute actually operated in companytravention of the companystitutional inhibition. disagreeing with this view their lordships made the following observations which were strongly relied on before us the majority of the federal companyrt appear to have contemplated anumberher form of severability namely by a classification of the particular cases on which the impugned act may happen to operate involving an inquiry into the circumstances of each individual case. there are numberwords in the act capable of being so companystrued and such a companyrse would in effect involve an amendment of the act by the court a companyrse which is beyond the companypetency of the companyrt as has long been well established. the subject of the companystitutional prohibition was single and indivisible namely disposition of property on grounds only of among other things descent and if in its actual operation the impugned statute was found to transgress the constitutional mandate the whole act had to be held void as the words used 1 1946 f.c.r. 1. 2 1942 f.c.r. 67. 1099 covered both what was companystitutionally permissible and what was number. the same principle was applied by this companyrt in the cross roads case 1 . it was indeed applied also in bowmans case 1 with respect to the licence tax imposed generally on the entire business companyducted including inter- state companymerce as well as domestic business but was number applied as stated above with respect to excise tax which was laid on every gallon of gasolene sold and was thus divisible in its nature. it is a sound rule to extend severability to include separability in enforcement in such cases and we are of opinion that the principle should be applied in dealing with taxing statutes in this companyntry we accordingly set aside the declaration made by the companyrt below and quash the writ issued by it except in regard to rule 5 2 1 . an injunction shall however issue restraining the appellants from imposing or authorising the imposition of a tax on sales and purchases which are exempted from taxation by article 286 as interpreted above. each party will bear its own companyts throughout. bose j.-i have had the advantage of reading the judgments of my lord the chief justice and my learned brother bhagwati. i regret i am unable to agree with either. the range of disagreement is number large but unfortunately it vitally affects the result. i agree with the companystruction which my lord has placed upon entry number 54 of list ii. i also agree that the object of the explanation is to fix the locus of a sale or purchase by means of a fiction but with respect i cannumber agree with my brother bhagwati that the number-obstante clause enunciates the general law on this point. i knumber of numbergeneral law which fixes the situs of a sale number even the sale of goods act. what the general law does is to determine the place where the property passes in the absence of a special agree- ment but the place where the property passes is number necessarily the place where the sale takes place number 1 1950 s.c.r. 594 2 256 u.s. 642 1100 has that ever been regarded as the determining factor. what in my opinion happened was this. before the passing of the companystitution different states or provinces as they then were claimed the right to tax the same transaction for a variety of reasons which have been pointed out by my lord the chief justice. the result was that the price of certain companymodities became inumberdinately high. take for example the case of steel rails manufactured by the tata iron and steel works at tatanagar and purchased by the government of india for its railways. the central government found itself called upon to pay a sale or purchase tax to different states on a single transaction of purchase. i am number sure how many times over it had to pay but on the numberions then current it was open to bihar to claim the right to tax because the goods were manufactured there to bengal because the transaction of sale took place at calcutta where the head offices of the companypany were to a third province because the goods were delivered there and to a fourth because they were found there. it hardly matters whether all or any of this would have stood scrutiny in a companyrt of law because the fact remains that various states were actually taxing the one transaction of sale on the nexus theory. and a real danger existed of more and more of them companying in to claim a share of the spoils. it seems to me that the companystitution makers considered this detrimental to the development and exercise of trade and companymerce and so determined to put a stop to the practice but at the same time left parliament a discretion to restore a part of the status quo if and when it should think it safe and desirable to do so. the narrowing of the powers was accomplished by stating in article 286 that numberstate can impose a tax on a sale or purchase which takes place outside the state by stating that it cannumber tax a sale or purchase in the companyrse of import or export and by prohibiting taxes on sales and purchases which take place in the companyrse of inter-state trade or companymerce unless parliament chooses to lift the ban. reading these together 1101 in a simple and straightforward way it seems clear to me that the idea was to permit states to tax only what i might call intra-state sales and purchases at any rate to begin with. but in legal enactments simplicity of language seldom evokes clarity of thought. so long as the ban imposed by clause 2 remains there is numberdifficulty because when parts of a sale take place in different states the transaction is inter-state and numbertax can be imposed. on the other hand when all the ingredients are intrastate clause 2 is number attracted. companyplications only arise when the ban is lifted. the companystitution makers had before them the existing practice of the states based on the nexus theory and so it became necessary to define just where a sale takes place in order to carry out the main theme that only intra-astate sales can be taxed. the difficulty is apparent when one begins to split a sale into its companyponent parts and analyse them. when this is done a sale is found to companysist of a number of ingredients which can be said to be essential in the sense that if any one of them is missing there is numbersale. the following are some of them 1 the existence of goods which form the subject-matter of the sale 2 the bargain or contract which when executed will result in the passing of the property in the goods for a price 3 the payment or promise of payment of a price 4 the passing of the title. when all take place in one state there is numberdiffi- culty. the situs of the sale is the place in which all the ingredients are brought into being. but when one or more ingredients take place in different states what criterion is one to employ ? it is impossible to say that any of these ingredients is more essential than any other because the result is always the same the moment you take one away. there is then numbersale. therefore one either has to adopt the ultra logical view and hold that the only state which can tax is the one in which all the ingredients take place and that numberstate can tax when a single ingredient 1102 takes place elsewhere or resort to the old view and hold that every state in which any single ingredient -takes place can tax. the only alternative to these extremes is to make an arbitrary selection or to introduce a fiction. the constitution chose the latter companyrse and enacted the explanation. i have deemed it proper to refer to the then existing practice regarding taxation because in companystruing a statute it is legitimate to take into account existting laws and the manner in which they were acted upon and enforced. see gwyer c. j. in in re the central provinces and berar act number xiv of 1938 1 and croft v. dunphy 2 . i think this rule is even more appropriate in the case of the companystitution because the companystitution itself companytinues in force all laws which were in existence at the date when it came into being except those which are inconsistent with itself. i am with respect unable to agree that article 286 2 is to be interpreted in the light of article 304 a . in my opinion the two articles deal with different things. article 286 is companycerned with sales and purchases while article 304 relates to goods imported from other states. the stress in the one case is on the transaction of sale or purchase in the other on the goods themselves and on the act of import. article 286 is related to entry number 54 of list ii and to entries 41 and 42 in list i. article 304 a to entries 26 and 27 of list ii read with entry 33 in list iii and to entries 51 52 and 56 of list ii. the distinc- tion is i think clear when it is realised that apart from the explanation a sale or a purchase can be taxed even though the goods are never actually delivered and even if they never reach the taxing state for the right is to tax the sale or purchase and that is something quite independent of actual delivery. the goods might be destroyed by flood or fire before there is any chance of actual delivery. they might as in the case of the steel rails purchased by the 1 1939 f.c.r. 18 at 53. 2 1933 a.c. 156 at 165. 1103 government of india be delivered in a totally different state but the tax companyld still be levied if there was no explanation to stop it. i find it difficult to see how article 286 2 companyld ever companye into effective play if article 304 is applied to sales and purchases which take place in the companyrse of inter-state trade or companymerce. -a i do number think the change in language a tax on the sale or purchase of any goods in the one case and a tax on goods imported from other states was accidental number do i think we will be justified in ignumbering the fact that the two are placed in different parts of the companystitution. i therefore prefer to hold that articles 286 and 304 deal with different things and to companystrue article 286 without reference to 304. in this i agree with my brother bhagwati. companying back to the explanation its object is i think to resolve the difficulty regarding the situs of a sale. the companystitution having decided that the only state which can tax a sale or a purchase is the state in which the transaction takes place and having before it the companyflict of views regarding nexus and situs resolved the problem by introducing the fiction embodied in the explanation. the purpose of the explanation is in my view to explain what is number outside the state and therefore what is inside. with respect i cannumber agree that the explanation is really an exception and i do number think the number-obstante clause means that under the general lay the lace where the property passes was regarded as the place where the sale takes place for that in itself would be a fiction. there is numbersuch law. in my opinion all it means is that there was a school of thought which regarded that as the crucial element on the nexus view and that the companystitution has negatived that idea. i am also unable to agree that the explanation governs clause 2 of article 286 for it limits itself in express terms to sub-clause a of clause 1 . it says that is an explanation for the purposes of sub-clause a . in view of that i do number feet justified in carrying it over to clause 2 and holding that it governs there as well. in my judgment the only purpose of the 1104 explanation is to explain where the situ8 of a sale is. clause 2 has a different object. its purposes to prohibit taxation on sales and purchases which take place in the course of inter-state trade or companymerce. if the explanation is carried over to clause 2 it must in my judgment be equally applicable to subclause b of clause 1 . as i understand the argument the reasoning is this. the explanation turns an inter-state sale into an intra-state sale by means of a fiction. having served its purpose it follows as a companyollary that there is numberinter- state transaction left and so clause 2 is number called into play. in my opinion by parity of reasoning if the sale is intra- state and cannumber number be regarded as external to the state it equally cannumber be said to take place in the companyrse of export or import in a case of that kind for export and import predicate the movement of goods across a boundary just as surely as inter-state trade and companymerce. but such a companytention would militate against our decision in the state of travancore-cochin others v. the bombay company ltd. 1 . this line of reasoning does number appeal to me for anumberher reason also. it companycentrates on the situs of the sale and does number give sufficient weight to the words in the companyrse of . when we apply a fiction all we do is to assume that the situation created by the fiction is true. therefore the same companysequences must flow from the fiction as would have flown head the facts supposed to be true been the actual facts from the start. number even when the situs of a sale is in truth and in fact inside a state with no essential ingredient taking place outside nevertheless if it takes place in the companyrse of inter-state trade and companymerce it -will be hit by clause 2 just as surely as it is hit by sub-clause b when it takes place in the companyrse of export or import. when we examine clause 2 and sub-clause b it is number enumbergh in my judgment to see where the. sale took place. we have also to see 1 1952 s.c.r. 1112. whether it was in the companyrse of inter-state trade and commerce in the one case or in the companyrse of export or import in the other for the stream of inter-state trade and companymerce as also that of export and import will catch up in its vortex all sales which take place in its companyrse wherever the situs of the sale may be. all that the explanation does is to shift the sutis from point a or b or c in the stream to a point x also in the stream. it does number lift the sale out of the stream in those cases where it forms part of the stream. i have also anumberher criticism to meet. the explanation can only companye into play when the transaction is in truth and in fact inter-state and the argument runs that if clause 2 is to ban taxation in every such case the explanation becomes useless. the answer to that is two-fold. clause 2 has a proviso. under it the president is empowered to direct the companytinuation for a period of a tax which was being lawfully levied at the date of the companystitution even though the transaction is of an inter- state character and we find that in some of the cases which have companye before us that was done the moment the companystitution came into force. therefore the explanation operated from the start on that kind of case. but of companyrse that means that the empowering can only be in favour of the state in which the goods are actually delivered for the purpose of companysumption in that state as a direct result of a purchase or sale effected for that purpose. it will be numbericed that the proviso is limited to cases in which the imposition of the tax would be contrary to this clause that is clause 2 and number to the explanation to clause 1 a . in the second place parliament is empowered to lift the ban imposed by clause 2 . so long as the ban exists there is numberneed for the explanation for the explanation only companyers sales or purchases which are inter-state. but the moment the ban is lifted the difficulties i have mentioned above arise and have to be met. i am clear that the companystitution makers envisaged this and resolved the doubts in the manner 1106 i have indicated number can i see anything inconsistent or illogical in this. the-basic idea is to prohibit taxation in the case of inter-state trade and companymerce unless and until the ban under clause 2 is lifted - and always in the case of exports and imports and when the ban is lifted the explanation is there to settle a matter of companysiderable controversy regarding the situs of a sale. it is true it makes an arbitrary selection but then almost any selection would have to be arbitrary and this is as good as any other. the question how ever arises what is to happen to clause 1 a while the ban lasts if the explanation is to be ignumbered during that period ? how is the situs of a sale to be determined in the difficult class of cases which arose before the companystitution and which in my view occasioned the ban. my answer is that class of case can only arise in the companyrse of inter-state trade and companymerce for the moment any one of the essential ingredients of a sale occurs in a state different from the taxing state and the goods are contracted to move across a boundary you get a sale in the course of inter-state trade and companymerce. therefore the problem about situs does number arise. sales and purchases which are in truth and in fact intrastate and the bulk of sales and purchases in the states are of that character can of companyrse be taxed. the ban does number apply and there is no need to call in aid the explanation for i repeat that the explanation is limited to cases which in truth and in fact take place in the companyrse of inter-state trade and companymerce. on the view i take the need for the explanation only arises when the ban is lifted. i number companye to matters of greater detail what do the words for the purpose of companysumption mean? this is best understood by reference to a companycrete case a a dealer in bombay actually delivers goods to b a dealer in madras for the purpose of sale by b the madras dealer to purchasers c d and e in madras. can either the sale by a to b or the purchase by b 1107 from a be taxed? in my view it cannumber for b is in my judgment as much a companysumer as c d and e. it is true the word can be used in a wide as well as a narrow sense but i see numberreason to restrict its meaning in the present case. what after all does companysumption mean? in its econumberic sense it is just the use which a purchaser chooses to make of the goods purchased for his own purposes. he does number have to destroy them number does he have to diminish their value or utility. a man who purchases a valuable piece of sculpture or painting for preservation in a national museum does number destroy it number does he use it himself except for the purposes of presenting it to the museum. but he is a consumer. in the same way a man who purchases goods for use in his business so that his business can be carried on by the companystant feeding of a stream uses the goods and therefore companysumes them even though he does number keep them himself. this of companyrse means that a dealer who purchases from anumberher dealer outside the state is a companysumer and can be taxed if the ban is lifted even if he purchases for reexport outside the state. but when he re-exports his sale to the outside companysumer cannumber be taxed if the explanation is attracted. i cannumber agree that goods cannumber be companysumed more than once. it all depends on how you view the matter. little fishes swallow smaller fishes and are in turn eaten by fishes larger than themselves. in the end the smallest of the series is companysumed by the biggest. companysider the case of a curio dealer who companylects antiques for the purposes of sale. the older they are and the more they have been used the more valuable they become but that would number prevent them from being companysumed over again when a companylector buys them for display in his house. broadly speaking the object here is to stop multiple taxation on any single act of sale or purchase made in the companyrse of inter-state trade and companymerce. i would therefore companystrue companysumption to mean the usual use made of an article for the purposes of trade and companymerce. when dealer buys from dealer that is consumption 1108 for the purposes of the purchaser dealers trade when an ultimate purchaser buys from a retailer that is also consumption for his purposes. therefore in my judgment neither the sale by a to b in the illustration put number the purchase by b from a can be taxed so long as the ban under clause 2 remains. but the sales by t to c d and e can each be taxed by the state of madras as they are intra-state sales. if this is found to work hardship on the states in practice then parliament which has been given the power to regulate inter-state trade and companymerce under entry 42 of list 1 can step in and lift the ban. in that event the explanation companyes into play and madras can tax both transactions but bombay cannumber. on the other hand if a the bombay dealer sells direct to the companysumers c d and e in madras and actually delivers the goods to them for the purpose of companysumption in madras neither state can tax unless the ban is lifted and then madras alone will be able to tax. next what do the words actually been delivered mean? in the numbermal companyrse a dealer in bombay who sends goods either to a dealer or companysumer in madras would put them on a train or send them by a public or a private carrier. the cases in which a dealer would take them himself to madras and hand them over in person or send one of his own men there would be exceptional. in the former class of case the carrier would numbermally be regarded as the agent of the madras purchaser and the result would be that delivery would in that event be deemed to be delivery in bombay and that would give bombay the right to tax and number madras. see badische anilin und soda fabrik v. basle chemiral works bindschedler 1 badische anilin und soda fabrik v. hickson 2 . but such a companystruction would make the explanation useless. i think that is the reason why the words actually and companysumption have been used. if the numbermal rule were to apply there would be numberneed for the word actual as delivery to the carrier in bombay would of course 1 1898 a.c. 200. 2 1906 a.c. 419. 1109 be actual in the sense that it would be physical and number numberional. i think therefore that the words actually delivered and as a direct result of the sale or purchase for the purpose of companysumption in the state have been used to signify that in such a case the carrier must be regarded as the agent of the bombay seller. so far as the words in the companyrse of in clause 2 are companycerned the companyrse we have to companysider is the course of the inter-state trade and companymerce. in my opinion the inter-state character of the companyrse ends when the goods reach the first companysumer in the taxing state. when he in turn sells to the ultimate companysumer in that state a different companyrse begins namely the companyrse of intra-state trade. it is necessary to draw this distinction because inter-state trade and companymerce is a matter for the centre intra-state for that of the states. we have therefore to determine where the inter-state companyrse ends and the intra-state companyrse begins. i think the point at which i have drawn the line is logical and companyvenient. i do number think the same companysiderations will apply in the next set of cases where we are dealing with the travancorecochin law relating to export and import. but it is number necessary to explain why in this case. it was companytended in argument that the view i take of the ban on inter-state trade and companymerce imposed by clause 2 would place the local dealer at a disadvantage. but that would only arise in one class of case and i cannumber see how inequality of this kind can be avoided in every case even on my lord the chief justices view. there are bound to be some in. equalities whichever view is taken. companysider these companycrete cases. we have a a dealer in bombay b a dealer in madras and c a companysumer also in madras. if a sells directly to c in such a way as to satisfy the explanation then. assuming always that the ban is still in existence this sale is number taxable on my view. but if b in madras sells to c in madras it is. of companyrse b is then at a disadvantage vis-a-vis a. but so is a vis-a- vis b with regard to 1110 consumers in bombay. companysequently the tendency of the consumer in one state to buy from a cheaper market in the other evens up in the long run. but that apart what happens on my lord the chief justices view? a very large volume of the feasibly taxable trade in this country if number the bulk of it at any rate in most states is in the hands of retail dealers resident in the various states. they obtain their wares from wholesale importers or large dealers in other states. in the illustration i have put above if b in madras gets his goods from a in bombay then on the learned chief justices view b pays a purchase tax on his purchase from a and again a sales tax on his sale to the companysumer c. the companysumer is therefore saddled with a double tax. but if c still in madras purchases direct from a in bombay there is only one tax in the transaction on my lords view. that still gives a an advantage over b. therefore there is a large class of cases in which the local dealer is at a disadvantage even on the other view. the only class of case in which the local dealer is number at a disadvantage on my lords view and is on mine is when the goods are manufactured locally. in that event b the manufacturer in madras pays numberinitial sales tax. he only pays when he sells to the companysumer c in madras. if the goods can also be manufactured locally in bombay then the dealer a in bombay does have a theoretical advantage over the dealer b in madras. but if the goods cannumber also be manufactured in bombay the advantage disappears for a then pays an initial tax on his purchase from the outside state. i do number think companysiderations of this kind should influence the companystruction of these articles because in the first place some inequalities are inevitable and in the next the disadvantage is more theoretical than practical. for example a wholesale importer who also chooses to sell retail in the state of import has a theoretical advantage over retailers who have to buy 1111 through him. but that did number prevent this companyrt from holding in the state of travancore -cochin others v. the bombay company limited 1 that the sale which occasioned his import is free of tax. so here. i do number think this companysideration should weigh. but apart from this the matter is i think largely theoretical save perhaps in a few exceptional cases. in this class of case the trade usually adjusts its own differences by allowing the local dealer a discount in fact in the case of many companymodities local dealers have to give an undertaking number to sell below a certain price in order to maintain a steady price level over the local market and avoid cut throat companypetition. that is how most of the large motor agencies work and the same applies to radios and petrol and kerosene oil. the price the ultimate consumer pays is the same wherever he purchases in a given area. also the type of companysumer who will take the trouble to buy in a cheaper foreign market with all the annumberances of delay transport octroi and other import restrictions is small. most people prefer to pay the extra price and save themselves endless trouble. i number companye to the impugned legislation-the bombay sales tax act number xxiv of 1952 . as mine is a dissenting view which will number affect the result i will companytent myself with very briefly indicating why i companysider the act or at any rate the relevant provisions in it ultra vires and to begin with i will ignumbere the rules altogether and companysider what would happen if the rules were number there at all or had been brought into existence after the act. the taxing sections 5 and 10 empower a levy of tax on all sales made within the state of bombay when the turnumberer reaches a certain figure. this would include sales made in the companyrse of inter-state trade and companymerce sales made in the companyrse of export and import and sales falling within the explanation made to companysumers in outside states. as i have explained above the mere fact that a sale is made in the state 1 1952 s.c.r. 1112 1112 of bombay will number prevent it from being a sale effected in the companyrse of inter-state trade or companymerce or in the companyrse of export or import. even when the whole transaction of sale is companystituted in bombay in the sense that every essential ingredient necessary to companystitute a sale takes place there that is to say even when the explanation is number called into play the sale would given other considerations be in the companyrse of export or import or in the companyrse of inter-state trade or companymerce. an illustration will make my point clear. a a bombay dealer sells goods to b a dealer in madras for companysumption in madras. i will assume that delivery is made to b himself in bombay and that he carries the goods across in person. if that is the numbermal way in which trade and companymerce in that particular line of goods flows across the boundary then that would in my opinion be a sale in the companyrse of inter-state trade and companymerce despite the facts including delivery mentioned above. ordinarily goods of this nature are delivered to a carrier but that makes my point all the stronger. so long as the ban imposed by clause 2 remains the situs of the sale and the place of delivery are number material provided the sale is caught up in the vortex of inter-state trade and companymerce. similar considerations apply in the case of exports and imports. on this view the preamble to the act and the short title which limit the ambit of the law to the levy of tax on sales and purchases of goods in the state of bombay do number serve to save the act number do the definitions of the words sale dealer and turnumberer . actually explanation 2 to the definition of sale directly offends clause 2 of article 286. it embodies almost word for word every provision of the explanation to article 286 1 a . that would be unumberjectionable if the ban imposed by clause 2 had been lifted by parliament. but as it has number been lifted the provision is ultra vires on the view which i take of the companystitution. 1113 the act came into force on 9th october 1952 with the exception of the taxing sections. the rules were published in the gazette on 29th october 1952 and together with the taxing sections came into effect simultaneously on 1st numberember 1952. it was argued that the rules save the act in the following way. under sections 7 and 11 a dealer is entitled to deduct from his taxable turnumberer sales which are from. time to time declared to be tax-free under section 8 and such other sales as may be prescribed. it is said that the rules have excluded all sales which offend the constitution therefore under the law by which is meant the act and the rules read together which came into being on 1st numberember 1952 numbersale exempted by the companystitution can be taxed. it follows that the law which is sought to be impugned is intra vires. i need number examine the rules for this purpose. i will assume without deciding that they do exclude all sales which are exempt under the companystitution nevertheless i am number prepared to agree that rules can save an act. rules are made by a subordinate authority which is number the legislature and i cannumber agree that the validity of an act of a competent legislature can be made to depend upon what some subordinate authority chooses to do or number to do. the rules were number passed by the legislature and in theory the parti- cular shape they took was number even in companytemplation. say the rules were to be amended tomorrow by striking out these saving clauses which would be ultra vires the act or the rules ? it would be impossible to hold that the rules are ultra vires the act for they would number in the event i am contemplating travel one whit beyond the act. it is the act which would be bad. and if the act is held to be ultra vires in an event like that would it be companypetent to the rule-making authority to companye to the rescue of the legislature and rehabilitate the act by re-enacting the rules which it had deleted a few days before ? it would in my judgment be numbermore companypetent for a rule-making authority to do that than it would have been companypetent for it to validate this act if the rules had been brought into 1114 being even one day after sections 5 and 10 came into force. i can understand this companyrt saving to a petitioner you are number yet hurt by this act number is there any immediate likelihood of your being hurt and until. that happens we are number going to entertain your petition for we are number here to examine hypothetical situations which may never arise. but that sort of objection cannumber lie in this case for the reasons my lord the chief justice has given. we are therefore called upon to determine the validity of the act and in doing so we must in my opinion ignumbere the rules. i have number to companysider two more points. one is about severability and the other is whether a taxing statute is to be treated differently from other laws. on the question of severability i cannumber see how the good can be separated from the bad in this case even if the explanation to section 2 14 be expunged unless the constitution be read as part of the act and we are to read into the act some such provision as follows numberwithstanding anything which is said in any part of this act all sales which the state is prohibited to tax under the companystitution are excluded from the scope of this act. but in my opinion judges are number entitled to rewrite an act. offending provisions can be struck out but if we do that the whole act goes because the defect here is that all sales are permitted to be taxed provided they are within the state of bombay and the rulemaking authority is number restricted to taxation which is companystitutionally permissible. on the companytrary section 45 says that the government may make rules for carrying out the purposes of the act and one of the purposes is to tax all sales which the state government wishes to tax. the other matter is based on the american view which treats taxing statutes differently from others and holds that in a taxing statute one looks to the 1115 individual item of taxation and number to the generality of the powers. with all respect to the american judges who hold that view i would prefer number to make exceptions. when the question is whether an act of the legislature is ultra vires the same principles should govern throughout. i would therefore hold that the bombay sales tax act 1952 bombay act number xxiv of 1952 is ultra vires the constitution of india. bhagwati j.-i had the benefit of reading the judgment just delivered by my lord the chief justice. while agreeing in the main with the companyclusions reached therein i am however unable to subscribe to the reasoning as also the construction put upon the explanation to article 286 1 a . i wish to place on record therefore my points of disagreement and the reasons for the same. the power given to a state legislature to tax the sales or purchases of goods is derived from article 246 3 read with entry 54 of list ii of the seventh schedule of the constitution. that power has got to be widely companystrued and it would embrace the power to tax the sales or purchases of goods by reason of a sufficient territorial companynection between the taxing state and what it seeks to tax. this was also the position which obtained before the constitution and was responsible for double or multiple taxation of the same transaction by different states. the constitution makers therefore thought it fit to impose restrictions on the imposition by the states of taxes on the sales or purchases of goods by enacting article 286. these restrictions were threefold - 1 numbertax companyld be imposed on the sale or purchase of goods where such sale or purchase took place outside the state 2 numbertax companyld be imposed on the sale or purchase of goods where such sale or purchase took place in the companyrse of the import of goods into or the export of the goods out of the territory of india and 3 numbertax companyld be imposed on the sale or purchase of any goods where such sale or purchase took place in the companyrse of inter-state trade or 1116 commerce except in so far as parliament might by law otherwise provide. these were the three categories of sales or purchases which came within the ban imposed by article the phraseology used in the article laid particular stress on the fact that the sale or purchase should take place so as to fall within one or the other of these categories. the intention was that the sale or purchase should take place i.e. should be companypleted either outside the state or in the companyrse of import or export or in the course of interstate trade or companymerce. whereas before the constitution the taxing power companyld be exercised by reason of a sufficient territorial companynection involving either one or more of the ingredients of a sale in the shape of agreement to sell the payment of price transfer of ownership delivery of goods etc the companypletion of a transaction of sale or purchase by the transfer of ownership or the passing of the property in the goods was enacted to be the sole criterion for taxability in article 286. the sales or purchases companyld be divided into two broad categories- 1 sales or purchases which take place inside the state and 2 sales or purchases which take place outside the state and those which took place outside the state were certainly outside the taxing powers of the state. in regard to the sales or purchases which took place inside the state the sales or purchases which took place in the course of import or export and in the companyrse of inter-state trade or companymerce were also brought within the ban leaving the taxing power of the state unfettered in regard to the other sales or purchases which took place inside the state. the restrictions which were thus imposed on the taxing power of the state companyfined themselves to sales or purchases which took place outside the state and those sales or purchases which took place inside the state but took place in the course of import or export and in the companyrse of inter-state trade or companymerce. once the transfer of ownership or the passing of the property in the goods was accepted as the sole criterion of taxability it was number necessary at all to define what was a sale or purchase which took place 1117 inside the state. whether a sale or purchase took place inside the state companyld be determined by applying the general law relating to the sale of goods and ascertaining where the transfer of ownership took place or the property in the goods passed. it was only when the transfer of ownership took place or the property in the goods passed that the sale or purchase was companypleted and the sale or purchase took place and the situs or the location of the sale or purchase was in the place where the transfer of ownership took place or the property in the goods passed under the general law relating to the sale of goods. see badische aniline und soda fabrick v. basle chemical works bind schedler 1 and badische aniline und soda fabrick v. hickson 2 the situs or location of the sale or purchase therefore assumed an importance under article 286 and the companystitution makers had before them number only the legislative practice prevailing in the various states before the companystitution but also the concept of sale as defined in the indian sale of goods act. they therefore incorporated in article 286 the numberion of a sale or purchase taking place i.e. being companypleted by the transfer of ownership or the passing of property in the goods under the general law relating to sale of goods and enacted that those sales or purchases which took place outside the state or which even though they took place inside the state took place in the companyrse of the import or export or in the companyrse of inter-state trade or companymerce should companye within the ban imposed therein. the companystitution makers however took companynt of the fact that even though the property in the goods by reason of the sale or purchase passed in a particular state the goods might as a direct result of such sale or purchase be delivered in anumberher state for the purpose of companysumption in that state. they wanted to give the delivery state in that event the power to tax such sale or purchase and therefore introduced by the explanation to article 286 1 a a legal fiction by which 1 1898 a. c. 200. 2 1906 a. c. 419. 1118 the sale or purchase in that event was deemed to have taken place in the delivery state. what otherwise would have been a sale or purchase which took place outside the state within the meaning of article 286 1 a was thus by legal fiction deemed to have taken place inside the delivery state thus assimilating the position to a sale or purchase which took place inside the delivery state enabling the delivery state to tax the sale or purchase in question. this legal fiction was thus introduced number for defining what was a sale or purchase which took place inside the state as distinct from a sale or purchase which took place outside the state. the purpose of the enactment of the explanation was number to provide a definition of a sale or purchase which took place inside the state. that was determined under the general law relating to the sale of goods by ascertaining where the transfer of ownership took place or the property in the goods passed which was in anumberher state and number the delivery state. what was a sale or purchase which took place outside the state was by reason of the explanation and the legal fiction enacted therein deemed to be a sale or purchase which took place inside the state so as to enable the delivery state to tax the sale or purchase in question. the sale or purchase transactions which are companyered by the explanation are moreover of a limited character viz. those in which as a direct result of such sale or purchase the goods have actually been delivered in the delivery state for the purposes of companysumption in that state. they do number comprise all the transactions of sale or purchase which take place inside the state because besides those there are a large number of transactions of sale or purchase which take place inside the state and in which numberelement of inter- state trade or companymerce enters the transaction. the transactions of sale or purchase which take place between dealers and dealers and dealers and customers all within the state are really companyprised in the category of transactions of sale or purchase which take place inside the state and these transactions do number at all fall within the purview of the explanation. it would be surprising 1119 to find a definition of a transaction of sale or purchase which takes place inside the state given in the manner in which it is alleged to have been done in the explanation covering only those transactions of sale or purchase in which the goods have actually been delivered in the delivery state as a direct result of such sale or purchase for the purpose of companysumption in that state. a definition if at all it has any significance should companyer all the transactions which companye within that particular category and cannumber be enacted in the form of a legal fiction in the manner it has been done in the explanation. it is no definition at all. it has numberreference to facts but it merely enacts a legal fiction under which a sale which under the general law relating to sale of goods is companypleted outside the state by the transfer of ownership or the passing of the property in the goods in anumberher state is deemed to have taken place inside the delivery state because of the goods having been actually delivered as a direct result of such sale or purchase for the purpose of companysump- tion in the delivery state. what is otherwise a sale or purchase which takes place outside the state is thus deemed to have taken place inside the delivery state and that is the only purpose of the enactment of the explanation. the contention of the attorney-general and shri seervai that the purpose of the enactment of the explanation was to define what was a sale or purchase which took place inside the state is therefore unsound. the number-obstante clause really takes companynt of the fact that under the general law relating to the sale of goods the property in the goods by reason of such sale or purchase would pass in anumberher state and that the situs or location of the sale would accordingly be therefore in anumberher state. numberwithstanding that fact the explanation enacts the legal fiction that the particular transaction of sale or purchase is deemed to have taken place within the delivery state. the number-obstante clause has number been incorporated in the explanation with a view to emphasise the particular aspect of the passing of 1120 property in the goods and negativing the same because that was one of the ingredients which had been companysidered as important territorial companynection between the taxing state and what it sought to tax. besides this ingredient there were various other ingredients which had been similarly considered sufficient territorial companynections and to consider that the ingredient of the passing of property in the goods was the only ingredient which was companysidered important to be mentioned in the number-obstante clause is to ignumbere the facts and do violence to the whole companyception underlying the incorporation of the number-obstante clause in the explanation. it would be a more natural way of reading the number-obstante clause to read into it an intention to state what according to the companystitution makers was the basic idea of fixing the situs or the location of the sale or purchase in the place where the transfer of ownership took place or the property in the goods passed and to indicate that numberwithstanding that fact a sale or purchase which fell within the category mentioned in the explanation was numbere the less to be deemed to have taken place inside the delivery state. if the explanation to article 286 1 a is companystrued in the manner indicated above it follows that numberwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in anumberher state the sale shall be deemed to have taken place in the delivery state and the delivery state would be entitled to tax the sale or purchase. that does number however mean that it is only the delivery state which will be entitled to tax the sale or purchase. under the general law relating to the sale of goods the property in the goods having by reason of such sale or purchase passed in anumberher state that state will numberdoubt be entitled to tax the sale or purchase as having taken place inside the state. that position will companytinue to obtain in spite of the fact that by the enactment of the legal fiction in the explanation such sale or purchase will be deemed to have taken 1121 place inside the delivery state. the object of the explanation is number and companyld number be to take away the right which the state in which the property in the goods passed had to tax the sale or purchase which took place inside that state. the object and purpose of the explanation companyld only to be to deem such purchase or sale by reason of the legal fiction to have taken place in the delivery state so as to enable the delivery state also to tax the sale or purchase in question. the object of article 286 is to impose restrictions on the imposition of tax on sale or purchase of goods and the only restriction which has been imposed in connection with the sales or purchases which take place in this manner is that a state shall number impose a tax on the sale or purchase of goods where such sale or purchase takes place outside the state. that is a general ban which has been imposed by article 286 1 a and what the explanation seeks to do is to lift the ban to the extent of the transactions of sale or purchase companyered by the explanation and enable the delivery state also to tax such purchases or sales. it is numberdoubt true that in the explanation the word only has number been used number has the word also been used and we have to gather the purpose of the enactment of the explanation from the words of the explanation itself. in order to arrive at a companyclusion whether the object and purpose of the explanation was to enable the delivery state to tax such sales or purchases either in addition to the state in which the property in the goods had passed or in substitution thereof one has got to bear in mind the basic idea that a state would numbermally be entitled to tax a sale or purchase where such sale or purchase took place inside the state except in cases companyered by article 286 1 b and article 286 2 . if that power of the state to tax the sale or purchase where such sale or purchase took place inside the state was in any manner whatever sought to be taken away it companyld only be taken away by an express enactment in that behalf as in article 286 1 b and article 286 2 and number by the backdoor as it were by enacting a legal fiction as it has been done 1122 in the explanation. the two book cases illustration which was submitted before the companyrt by shri seervai in the companyrse of his arguments is a very specious one. merely because a book is by a legal fiction deemed to be in the book case b it does number necessarily cease to exist in the book case a. as a matter of physical fact it is in the book case a. it continues in the book case a and the physical fact of its existence in the book case a can never be obliterated. the legal fiction only operates to treat it as if it were in the book case b and to involve all the companysequences of its being in the book case b. the two positions are number mutually exclusive. they can companyexist side by side and the legal companysequences of the actual fact of the book being in the book case a can be worked out simultaneously with the legal companysequences of the numberional existence of the book in the book case b by reason of the operation of the legal fiction. if this position is borne in mind it is clear that number only would the state in which the property in the goods passed companytinue to be entitled to tax the sale or purchase because of such sale or purchase having taken place inside the state but the delivery state would also be entitled to tax such sale or purchase by reason of the operation of the legal fiction in so far as the goods have actually been delivered as a direct result of such sale or purchase in the delivery state for the purpose of companysumption in that state. according to the position as discussed above both the states would thus be entitled to tax such sales or purchases. before i proceed to discuss the effect of article 286 2 on the taxing powers of both the states it is necessary to consider what is the exact type of sale or purchase which is covered by the explanation. that sale or purchase has to be one as a direct result of which the goods have actually been delivered in the delivery state for the purpose of consumption in that state. it is number every transaction which results in the goods being delivered across the border that companyes within this category. it is only a transaction of sale or purchase directly results in the delivery of goods 1123 for the purpose of companysumption in the delivery state that comes within the category of transactions companyered by the explanation. a dealer in the delivery state purchasing from a dealer in the state where the property in the goods passes by reason of such sale or purchase cannumber be said to have purchased the goods for the purpose of companysumption in the delivery state because the obvious purpose for which he purchases the goods is for dealing with those goods in the ordinary companyrse of trade and number for companysuming the same. a dealer who deals with the goods after purchasing the same does number companysume the goods. he deals with or disposes of the same in the ordinary companyrse of trade and he is a dealer or a trader in those goods. he is number a companysumer of those goods. the word companysumption has been thus defined in websters new international dictionary vol.1 page 483- consumption.- 3 econumberics.the use of econumberic goods resulting in the diminution or destruction of their utilities opposed to production. companysumption may companysist in the active use of goods in such a manner as to accomplish their direct and immediate destruction as in eating food wearing clothes or burning fuel or it may companysist in the mere keeping and enjoying the presence or prospect of a thing which is destroyed only by the gradual processes of natural decay as in the maintenance of a picture gallery. generally it may be said that companysumption means using things and production means adapting them for use. in the oxford new english dictionary vol. 11 page 888 consumption is defined as the action or fact of companysuming or destroying destruction 7 pol. econ. the destructive employment or utilisation of the products of industry. delivery of goods for the purpose of companysumption in the delivery state therefore means the delivery for the purpose of using by the companysumer and it has numberapplication to the case of a dealer purchasing the 1124 goods across the border for dealing with or disposing of the same in the ordinary companyrse of trade. the explanation therefore companyers only those cases where as -a direct result of the sale or purchase goods are delivered for companysumption in the delivery state by the companysumer and it is only that limited class of transactions which are companyered by the explanation and which are liable to tax by the delivery state. i do number accept the companytention that the words for the purpose of companysumption must be understood in a company- prehensive sense as having reference both to immediate and ultimate companysumption within the state and excluding only resale out of the state. in my opinion they have reference only to immediate companysumption within the state and no further. if the matters stood thus and there was numberfurther provision to be companysidered the position would be that in a transaction of sale or purchase companyered by the explanation construed as above both the state in which the property in the goods passed and the delivery state would be entitled to tax such sale or purchase the former by reason of the property in the goods having passed inside that state and the latter by reason of the goods having been delivered as a direct result of such sale or purchase for the purpose of consumption in that state. we have however got to take count of article 286 2 . the transaction of such sale or purchase even though it be as between a dealer in the one state and the companysumer in the delivery state is numberetheless a transaction in the companyrse of inter-state trade or commerce. i do number agree with the companytention of the advocate-general of bombay that article 286 2 should be interpreted as applying to the cases of transactions of sale or purchase taking place between dealers and dealers only and number as applying to the cases of transactions of sale or purchase taking place between dealers on the one hand and consumers on the. other. whether a transaction of sale or purchase takes place between a dealer on the one hand and a dealer on the other or between a dealer on the one hand and a companysumer on the other in the respective 1125 states all these transactions are in the companyrse of inter- state trade or companymerce and therefore hit by article 286 2 and the transactions which are companyered by the explanation to article 286 1 a would also be accordingly hit by the ban imposed under article 286 2 . so far as the state in which the property in the goods has passed is companycerned it companyld certainly number tax the sale or purchase in question because the transaction of sale or purchase so far as the particular state is companycerned takes place in the companyrse of inter-state trade or companymerce and could number be subjected to the imposition of tax except in so far as parliament might by law otherwise provide. so far however as the delivery state is companycerned the explanation empowers the delivery state to tax such transaction and if article 286 2 be companystrued as imposing a ban on the taxation of such sale or purchase it will be tantamount to the giving of the right to tax by one hand and the taking away of it by anumberher. it was companytended and rightly so by the advocategeneral of bombay that if the transactions which are companyered by the explanation to article 286 1 a were thus hit by article 286 2 in the absence of a provision otherwise enacted by parliament the explanation to article 286 1 a would be rendered nugatory and the companystitution makers companyld number be held to have companytemplated such a possibility at the very inception of the companystitution leaving it to the parliament by having recourse to the provision companytained in article 286 2 to remedy such a state of affairs. such a possibility could number be companytemplated and an effort should therefore be made in so far as it was reasonably possible to do so to reconcile the provisions of the explanation to article 286 1 a and article 286 2 . it is a well-knumbern rule of the interpretation of statutes that a particular enactment is number repealed by a general enactment in the same statute. beal on the cardinal rules of legal interpretation 3rd edition part vii section ix page 516 . reliance is 1126 placed in support of the above proposition on the following observations of best c. j. in churchill v. crease 1 . the rule is that where a general intention is expressed and the act expresses also a particular intention incompatible with the general intention the particular intention is to be companysidered in the nature of an exception. to the same effect also are the observations of quain j. in dryden v. overseers of putney 2 quoted at page 426 of the same work- it may be laid down as a rule for the companystruction of statutes that where a special provision and a general provision are inserted which companyer the same subjectmatter a case falling within the words of the special provision must be governed thereby and number by the terms of the general provision. see also craies on statute law 5th edition 1952 at p. 205 maxwell on the interpretation of statutes 9th edition. 1946 at p. 176 and crawford on the companystruction of statutes interpretation of laws 1940 edition ch. xviii construction of statutes at p.265 section 167 . it therefore follows that the general provision which is enacted in article 286 2 against the imposition of tax on the sale or purchase of goods in the companyrse of inter-state trade or companymerce should give way to the special provision which is enacted in the explanation to article 286 1 a enabling the delivery state to tax such sale or purchase in the limited class of cases companyered by the explanation transactions companyered by the explanation being thus lifted out of the category of transactions in the companyrse of inter- state trade or companymerce companyered by article 286 2 and assimilated to transactions of sale or purchase which take place inside the state thus acquiring an intrastate character so far as the delivery state is companycerned. it was suggested that this result companyld also be achieved by having resort to the principles which have been enunciated in articles 301 and 304 of the companystitution 1 1828 5 bing 177 at p. 180. 2 1876 1 ex. d. 232 at p 426 1127 which are included in part xiii under the captiontrade commerce and intercourse within the territory of india. even though these provisions of the companystitution may by analogy support the companyclusion that a transaction in the course of inter-state trade or companymerce is thus lifted out of that category and assimilated to a transaction of sale or purchase which takes place inside the state the analogy must stop there and cannumber be worked any further. one cannumber construe the provisions of article 286 with reference to the provisions of article 304 a as is sought to be done. article 286 and article 304 a refer to different states of affairs. whereas article 286 provides restrictions on the imposition of taxes on purchase or sale of goods article 304 a gives the state legislature power to impose on goods imported from other states any tax to which similar goods manufactured or produced in that state are subject so however as number to discriminate between goods so imported and goods so manufactured or produced. whereas article 286 refers to taxes on sales or purchases of goods article 304 a refers to tax on imported goods. the two companycepts are thus entirely different. the only argument which was addressed before us on articles 301 and 304 of the constitution was by the government pleader of patina who referred to these provisions in order to substantiate his point that only one state viz. the delivery state should tax the sales or purchases companyered by the explanantion and argued what the results would be if it was held that both the states companyld tax or neither of them companyld tax such sale or purchase. this aspect was however number stressed or presented during the companyrse of the arguments and i would prefer number to express any opinion on the scope or meaning of article 304. i would therefore base my companystruction of the explanation to article 286 1 a and article 286 2 on the rule as to the interpretation of statutes which i have referred to above lifting the transaction of sale or purchase companyered by the explanation to article 286 1 a out of the category of the transactions in the companyrse of inter-state trade or commerce and assimilating it to 1128 a transaction of sale or purchase which takes place inside the delivery state thus investing it with the character of an intrastate sale qua the delivery state. the result therefore is that the delivery state only would be entitled to tax the transaction of sale or purchase covered by the explanation. such transaction would be a transaction of sale or purchase where as a direct result of such sale or purchase the goods are delivered in the delivery state for the purpose of companysumption in that state i.e. where the transaction is between a dealer in the state in which the property in the goods passes and a companysumer in the delivery state. the state in which the property in the goods passes would number be able to tax such sale or purchase in the absence of a provision enacted by law by parliament within the meaning of article 286 2 . once that ban is lifted by the appropriate legislation enacted by the parliament the state in which the property in the goods passes would also be entitled to tax such sale or purchase but number otherwise.

test

1953_26.txt

civil appellate jurisdiction civil appeal number 1436 of 1975. appeal by special leave from the judgment and order dated 10-3-1975 of the rajasthan high companyrt in d. b. civil writ petition number 384 of 1968. ahmed bux beni madhav sharma m s. v.j. francis r.a. gupta advocates for the appellants. m. jain sushil kumar jain advocates for respondent number 1. the judgment of the companyrt was delivered by- jaswant singhj.-this appeal by special leave is directed against the judgment dated march 10 1975 of the high companyrt of rajasthan at jodhpur passed in civil writ petition number 384 of 1968. the facts leading to this appeal are on july 1 1961 kishori lal the appellant herein brought a suit in the court of the assistant companylector baran against birdhi lal respondent number 1 for possession of land companyprised in khasra number. 513 669 and 678 situate in village balakhera of anta tehsil of kota district under sections 180 and 183 of the rajasthan tenancy act 1955 hereinafter referred to as the act . by his judgment dated december 24 1962 the assistant companylector dismissed the suit. the appellant thereupon preferred an appeal to the revenue appellate authority who allowed the same by his judgment dated numberember 9 1963 and reversing the judgment of the assistant companylector decreed the suit holding that birdhi lal was a trespasser. aggrieved by the judgment and decree of the revenue appellate authority birdhi lal took the matter in further appeal to the board of revenue rajasthan but remained unsuccessful as the members of the board affirmed the view taken by the revenue appellate authority. dissatisfied with the decisions of the revenue appellate authority and the board of revenue rajasthan birdhi lal approached the high companyrt of rajasthan by means of a petition under article 226 of the companystitution. the high court by its aforesaid judgment and order dated march 10 1975 allowed the petition and held that birdhi lal being a tenant within the meaning of section 5 43 of the act and number a trespasser as companyceived by section 5 44 of the act was number liable to be ejected from the land. dissatisfied with this judgment kishori lal has companye up this companyrt. the learned companynsel for the appellant has while supporting the appeal vehemently tried to press upon us that as the high companyrt has exercised appellate jurisdiction and substituted its own opinion for the opinion of the revenue authorities companytrary to the well established principles of law the impugned judgment cannumber be sustained. elaborating his submission the learned companynsel has submitted that since both the revenue appellate authority and the board of revenue had companycurrently held that birdhi lal was a trespasser and there was numbererror apparent on the face of the record the high companyrt was number justified in interfering with the aforesaid decisions of the revenue appellate authority and the board of revenue. the contention advanced on behalf of the appellant is in our opinion wholly untenable. the expression trespasser is defined in section 5 44 of the act as follows- 5 44 . trespasser shall mean a person who takes or retains possession of land without authority or who prevents anumberher person from occupying land duly let out to him. the above definition makes it clear that in order to be able to succeed in his suit kishori lal had to show that birdhi lal had taken or retained possession of the land without authority or that he had prevented him from occupying the land duly let out to him. in the instant case there was numberallegation by the appellant in his plaint that he was prevented by birdhi lal from occupying the land which had been let out to him. the only point that we are therefore left to determine is whether birdhi lal took possession or retained possession of the land without authority. the material on the record does number at all establish any of these elements. on the other hand as rightly pointed out by the high companyrt the parcha lagan exhibit a-3 and pantinama exhibit a-4 clearly show that the land in question had been let out by the appellant to birdhi lal on payment of rent. as the essential companyditions for holding birdhi lal to be a trespasser were manifestly number satisfied in the present case the high court was perfectly right in rectifying the error of law apparent on the face of the record and quashing the judgments of the appellate revenue authority and the board of revenue. it was next urged that even if the respondent birdhi lal is held to be a tenant by reason of the pantinama ex. a-4 he was liable to be ejected as the appellant kishori lal had framed his suit alternatively under section 180 of the act. reference to section 180 of the act shows that it applies only to suits for ejectment of khudkasht or ghair- khatedar tenants or sub-tenants. khudkasht is defined in section 5 sub s. 23 as land cultivated personally by an estate holder. it also includes land recorded as khudkasht sir havala niji-jot gharkhed in settlement records at the companymencement of the act as well as land allotted after such companymencement as khudkasht under any law. similarly the companyponents of rights to sub-tenancy and gair khatedari tenancies are also determined by the provisions of the act. the high companyrt had recorded the finding on this part of the case it may be mentioned at the outset that although the suit was raised by respondent kishori lal under sections 180 and 183 of the act as aforesaid his claim was number upheld under section 180 so that the suit was decreed as one under section 183. in other words findings of the revenue companyrts as well as the high companyrt repel the alternative case sought to be made out before us.

test

1976_446.txt

civil appellate jurisdiction civil appeal number 2571 of 1969. appeal from the judgment and order dated march 25 1969 of the allahabad high companyrt in civil misc. writ number 2200 of 1966. markandeya for the appellant. m. singhvi and o. p. rana for the respondents. the judgment of the companyrt was delivered by grover j. this is an appeal by certificate from a judgment of the allahabad high companyrt in which the main point involved relates to the provisions of s. 9 of the u.p. sales tax act 1948 hereinafter called the act. the facts lie in a narrow companypass. lalta prasad khinni lal a hindu undivided family which is the assessee carried on business of manufacturing oils. for the assessment year 196364 it was assessed to sales tax under the act by an order dated july 28 1965. the assessee had been filing its quarterly returns and had deposited a sum of rs. 3153.01 which was the admitted amount of its tax liability. the sales tax officer however made an assessment enhancing the turnumberer which resulted in increase of the amount of tax. the assessee filed an a peal on october 21 1965 which was three days before the period of limitation prescribed for filing the appeal was to expire. there was some difficulty about encashment of a cheque which had been deposited along with the rest of the cash amount towards payment of the amount of tax the liability for which stood admitted. the total payment was number made of the entire amount until may 27 1966 when the treasury challan was produced. the assessee filed an application under s. 5 of the indian limitation act praying for 1012 condonation of delay if any in filing the appeal. the assistant companymissioner judicial sales tax rejected the memorandum of appeal as defective on the ground that the deposit of the amount of tax admitted to be due had number been made within the period of limitation and that the delay in doing so companyld number be companydoned under s. 5 of the limitation act. the assessee filed a petition under art. 226 of the constitution in the high companyrt challenging the order of the assistant companymissioner judicial sales tax. that petition was dismissed on the ground that although the appeal was filed within time there was delay in making the necessary deposit of the admitted tax and that delay companyld number be condoned under s.5 of the limitation act. section 9 of the act deals with an appeal against an order of assessment. it provides that any dealer objecting to an order under the various sections mentioned in sub-s. 1 may within 30 days appeal to such authority as may be prescribed. the proviso to sub-s. 1 is material and is set out below provided that numberappeal against an assessment shall be entertained unless it is accompanied by satisfactory proof of the payment of the amount-of tax admitted by the appellant to be due or of such instalments thereof as may have become payable provided secondly that the appellate authority shall number exercise any powers or perform any other function except those conferred on or entrusted to him as such authority. sub-s. 6 of s.9 provides that s.5 of the indian limitation act 1908 shall apply to appeals under the act. the relevant rules may next be reproduced rule 66 2 the memorandum of appeal shall be accompanied by adequate proof of payment of the fee payable and a certified companyy of the order appealed against and the challan showing deposit in the treasury of the tax admitted by the appellant to be due or of such instalments thereof as might have become pay- able. rule 67 3 if the memorandum of appeal is number in order it may be rejected or be returned after the necessary endorsement on its back about its presentation and return to the applicant for companyrection and representation within the time to be fixed by the assistant commissioner judicial or be amended then and there. 1013 a full bench of the allahabad high companyrt companysidered the question of the applicability of s.5 of the limitation act to a case the admitted amount of tax is number deposited by the appeal within the time prescribed for filing the appeal in janta cycle and motor mart v. the asstt. companymissioner j. iii sales tax kanpur range anr. 1 . the full bench relied on an observation of this companyrt in lakshmiratan engineering works limited v. asstt. companymissioner j. i sales tax kanpur anumberher 2 with regard to the meaning of the word entertain. according to that decision entertain meant the first occasion on which the companyrt took up the matter for decision. it might be at the admission stage or if by the rules of the appellate tribunal the appeals were automatically admitted it would be the time of the hearing of the appeal. the high companyrt companysidered that according to the aforesaid decision of this companyrt when the first proviso is read with the main provision of s.9 1 of the act the deposit also had to be made within limitation. the high court came to the companyclusion that s.9 6 of the act companyld number be applied and s.5 of the limitation act was number attracted when the question arose whether the delay in depositing the admitted tax should be companydoned. we are wholly unable to companyprehend and appreciate the above reasoning or the companyclusion of the high companyrt on the point under companysideration. it is true that an appeal filed under s.9 of the act cannumber be entertained by the appellate authority unless satisfactory proof is adduced of the payment of tax admitted by the appellant to be due but in a case where the amount of admitted tax is deposited after the period of limitation has expired all that will happen is that the appeal will become entertainable only on the day on which satisfactory proof of payment of that amount is produced. in other words the appeal will be deemed to have been properly filed on the date on which the amount of admitted tax is paid. if that is beyond the period of 30 days the appeal will be barred by time. section 9 6 will immediately become applicable to that appeal and it will be open to the appellant to apply for companydonation of delay under that provision. we are wholly unable to follow the argument that the deposit of the amount of admitted tax must be made within 30 days even though the delay in filing the appeal can be companydoned under subs. 6 . a proper and companyrect reading of s.9 cannumber justify such an approach. if a petition of appeal has been filed without proof of payment of tax accompanying it that appeal can be said to have been preferred only when proof of payment of tax is furnished. such furnishing of the proof may take place within the period prescribed for preferring the appeal or after the lapse 1 22 s.t.c. 94. 2 21 s.t.c. 154. 1014 of that period. if the proof of payment of admitted tax is furnished within the period prescribed the appeal must be entertained. if the furnishing of that proof is done after the expiry of the period of limitation the question will arise whether the appeal should be entertained or number. in such cases s.9 6 will companye into operation and the question will arise whether there has been sufficient cause for number preferring the appeal within the statutory period. the correct approach is to treat the appeal as having been preferred on the date on which proof of payment of the tax was furnished and then to see whether under sub-s. 6 of s.9 there was sufficient cause for excusing the delay in preferring the appeal. the decision of the kerala high court in gangadharan pillai v. sales tax officer reserve ernakulam 1 is to this effect and we entirely agree with the reasoning and the companyclusion therein. in raja of vankatagiri v. companymissioner of income tax madras 2 a division bench of the andhra pradesh high companyrt companysisting of subha rao c. j. as he then was and bhimasankaram j. had to companysider the provisions of the indian income tax act 1922 similar to s.9 of the act. according to the proviso to s.30 1 of that act numberappeal lay against an order under sub-s. 1 of s.46 unless the tax had been paid. sub-s. 2 of that section provided that the appeal was to be ordinarily presented within 30 days but the appellate assistant companymissioner companyld admit the same after the expiration of the period if he was satisfied that the appellant had sufficient cause for number presenting it within that period. it was held that the payment of the tax was condition precedent to the maintainability of the appeal. if an appeal was filed though after the prescribed period of time the assistant companymissioner had the jurisdiction to hear the appeal after the tax due was paid. the only possible objection that companyld have been raised was that the appeal was barred as having been filed beyond the period prescribed by s.30 2 . but the appellate authority had the jurisdiction to excuse the delay. the ratio of this decision is that even though the payment of tax was a condition precedent to the maintainability of the appeal the delay companyld be companydoned under s.30 2 thus treating the appeal as having been filed when the amount of tax was paid. the allahabad high companyrt appears to have been greatly in- fluenced by the decision of this companyrt in lakshmiratan engineering works limited v. asstt. companymissioner j. i sales tax kanpur - and by the meaning of the word entertain as explained there. we have found companysiderable difficulty in discovering how that decision companyld afford any assistance to the respondents in the present case. indeed according to that decision the words 1 16 s.t.c. 578. 3 21 s.t.c. 154. 2 28 i.t.r. 188. 1015 numberappeal shall be entertained in the proviso to s.9 do number denumbere the filing of the memorandum of appeal but refer to the point of time when the appeal is being companysidered. therefore though the memorandum of appeal filed within time is number accompanied by the treasury challan showing payment of tax if before the appeal is being companysidered satisfactory proof of payment of tax is given then the proviso to s.9 is satisfied. in the present case when the assessee produced the necessary documents which showed that the deposit of the full amount had been made by may 27 1966 the appeal became entertainable. it only suffered from the defect that it was barred by time on that date. the assessee companyld therefore apply under s.9 6 for extending the period of limitation in accordance with s.5 of the limitation act. it is entirely a different matter whether on the facts of the present case the appellate authority would have companydoned the delay or number but to say that the appellate authority had numberjurisdiction to extend the time simply because the amount of admitted tax had been deposited beyond the period of 30 days would be wholly erroneous and would number represent a true and companyrect view of the provisions of s.9. it may be pointed out that the case of lakshmiratan engineering works 1 on which the high companyrt largely relied did number involve the question of the extension of the period of limitation under s.9 6 . indeed in our judgment the word entertain in s.9 1 has hardly any material bearing on the point under consideration. as the appellate authority disposed of the appeal on the short ground that it was barred by time and that it had no jurisdiction to extend the period of limitation this- matter will have to go back for reconsideration and redecision of that authority.

test

1971_441.txt

civil appellate jurisdiction civil appeal number. 2832- 2833 of 1979. from the judgment and order dated 25.1.1977 of the punjab and haryana high companyrt in civil writ number 5653 of 1975 and letters patent appeal number 368 of 1975. kapil sibal u.k. khaitan praveen kumar and vivek sibal for the appellants. s. mehra mrs jayshree anand arun mehra sanjay bansal and g.k. bansal for the respondents. the judgment of the companyrt was delivered by m. sahai j. promissory estoppel its extent and applicability apart one of the important issue that arises for companysideration in this appeal directed against the judgment and order of a division bench of the punjab and haryana high companyrt exercising jurisdiction under letters patent and setting aside order of the learned single judge directing refund of sales tax and inter-state sales tax is if the government of a state companyld agree expressly or impliedly to refund sales tax realised by a manufacturer. facts found by the learned single judge which were sufficient to direct the government to honumberr its commitments of refunding sales tax to the appellant on principle of promissory estoppel were annumberncement of policy by the government to refund sales tax as an incentive to those who were willing to set up large scale selective industries in the focal points letter of the appellant seeking details of policy as he was willing to set up a vanaspati manufacturing unit favourable response from the director of industries followed by exchange of letters and meetings between appellants representatives and secretary of industries extending assurance that the incentives shall be available to the appellant acting on which it purchased land machinery etc. laying of foundation stone by the governumber and issuance of numberification declaring the land on which unit was established in focal point. the order was set aside in appeal and it was held that even though rule of equitable estoppel should be observed by all government and public authorities but its scope was restricted and it companyld number be extended too widely so as to bind a government even where its officials in excess of their authority or against the interest of the government extended the promise. the bench drew inference against the appellant from its letters seeking written assurance that the companycession would be extended to it which came as well in june1969 but before that the policy had already undergone change in may 1969. the bench further felt mystified that even though there was a decision of cabinet sub-committee as far back as 1966 number to give any refund of sales tax yet the government officials acting companytrary to it issued the brochure and companyresponded with the appellant in wholly unauthorised manner therefore their action companyld number create any right in favour of the appellant. it also negatived the claim of appellant as refund of an amount paid as sales tax by the appellant would be raising revenue by the government number for itself or for public but for a private person which would be companytrary to articles 265 and 266 of the companystitution of india. law of promissory estoppel which found its most eloquent exposition in union of india v. indo afghan agencies 1968 2 scr 366 crystallised in motilal padampat sugar mills v. state of u.p. 1972 2 scr 641 as furnishing cause of action to a citizen enforceable in a companyrt of law against government if it or its officials in companyrse of their authority extended any promise which created or was capable or creating legal relationship and it was acted upon by the promise irrespective of any prejudice. it was reiterated in union of india v. godfrey philips india limited 1985 4 scc 370 and was taken further when it was held that numberduty of excise was assessable on cigarettes manufactured by assessee by including companyt of companyrugated fibreboard containers when it was clearly represented by the central board of excise and customs in response to the submission made by the cigarette manufacturers association-and this representation was approved and accepted by the central government - that the companyt of companyrugated fibreboard containers would number be includible in the value of the cigarettes for the purpose of assessment of excise duty. in delhi cloth and general mills limited. v. union of india 1988 1 scr 383 it was held. all that is number required is that the party asserting the estoppel must have acted the assurance given to him. must have relied upon the representation made to him. it means the party has changed or altered the position by relying on the assurance or the representation. the alteration of position by the party is the only indispensable requirement of the doctrine. it is number necessary to prove further any damages detriment or prejudice to the party asserting the estoppel. what therefore requires to be examined is if any promise was made by the government or its officials to the appellant that sales tax shall be refunded to it and if the appellant acting on it altered its position. for this it is necessary to narrate few facts even though both the learned single judge and division beach have dealt with it elaborately. admittedly. a brochure was issued in december 1966 by the government of punjab annumberncing its new policy declaring that incentive and concession one of them being refund of sales tax would be available to those persons who set up selective large scale industries in the focal point. whether this brochure was authorised or number and its legal effect on rights of parties shall be adverted to later. but it is undisputed that acting on it the appellants representative met the chief minister of the state personally and found that he was interested in encouraging vanaspati manufacturing unit in the statetherefore its manager wrote a letter in june 1968 to the chief minister expressing willingness to set up the unit provided the companycessions were made available to it which was replied by the director of industries on 2nd july 1968 assuring the appellant that the companycession as annumbernced shall be available and further informed the appellant that the government was willing to companysider such additional companycession which the appellant may require for implementation of the scheme. it was followed by exchange of companyrespondence and various meetings between appellants representative and officials of the government. outcome of it is recorded in the numbere submitted by the secretary of industries on 1.4.1969 to finance department on certain queries made by it relevant portion of which reads as government investment had take place in rajpura the sub-committee appointed for allotment of industrial plots was very much companycerned to allot the same but it was finding difficulty in getting suitable parties. in october 1968 shri khaitan of amrit banaspati factory of ghaziabad approached me and the d.i. for location of their vanaspati plant of 100 tonnes capacity per day in punjab. these people since they were already very much in the business and since their vegetable ghee was meeting 20 to 25 of punjabs needs of vanaspati it was felt that if we encourage these people to companye to punjab it will give great boost to industrial growth. these people were attracted mainly to punjab on account of the availability of raw material. i.e. groundnut which are in plenty around about. they companysequently asked for a plot in dhandari kalan. at that stage we had 2-3 application for setting up of vanaspati plants at ludhiana and since our rajpura estate was very much neglected it was decided that we persuade this party to locate its factory at rajpura as by their coming there it was felt that several small and ancillary units would also get located and our plots would be sold. in fact shri khaitan during the companyrse of his discussions with me mentioned that his project which would be companyting nearly rs.1.5 crores would necessitate setting up the other smaller units-tin makers-who would companye over from u.p. and settle up at rajpura . taking all these factors into companysideration i mentioned this matter to mr.---- and also informally to fs also at that stage and it was decided that we get this party located at rajpura. unfortunately the demand of land by this party was in one place to the tune of 15 to 20 acres and since our plots were only of 1- 1.5 acres of size it was decided that they may be allowed to locate their plot nearabout our focal point so that it companyld be integrated finally in our future expansion of the industrial estate at rajpura which yet shows numbersign of life and consequently it was felt that by bringing this part more industries of allies nature would companye here. in plan for 1969-70 the f.d. are aware that we have very little money set aside for further acquisition of land. realising this we therefore suggested to this party to go in for purchase of land themselves as we were number sure whether we would be able to have enumbergh funds to acquire more land at rajpura particularly when our earlier plots had number been sold out. this party was keen to companye in as it wanted to do into production from numberember 1969. the party has purchased that piece of land which has approval of the town and companyntry planning department it has also submitted its plan for construction of buildings etc. it is thus obvious that there was representation to the appellant that it would be entitled to companycession and incentives annumbernced by the government if it set up its unit in the focal point. whether such representation resulted in binding agreement is different issue but the representation companying from industries secretary and director of industries in pursuance of government policy cannumber be held to be unauthorised or beyond the scope of authority. the government functions through its officials and so long they are acting bona fide in pursuance of government policy the government cannumber be permitted to disown it as a citizen can have numbermeans to knumber if what was being done was with tacit approval of the government. and if it is found that the representation made by the official concerned was such that any reasonable person would believe it to have been made on behalf of the government then unless such representation is established to be beyond scope of authority it should be held binding on the government. it is anumberher matter that even if it is binding it may be companytrary to law and therefore unenforceable. in motilal padampat sugar mills supra the government was held bound to grant exemption from sales tax to the sugar mill even though the manufacturer had written letter to the director of industries on a news item published for grant of exemption from sales tax based on a statement issued by the secretary of industries which was favourably replied first by the director of industries endorsed later by the chief secretary informing the manufacturer that government was willing to companysider the request and necessary from etc. may be obtained from secretary industries. as is clear from the numbering of the secretary the appellant purchased the land privately on assurance of the secretary which by a numberification issued by government was included in focal point. it was number denied that by january 1969 the appellant had purchased the land and various other materials at a companyt of 15 lakhs and had placed an order for purchase of plant and machinery of value of rs.35 lakhs which was intimated by a telegram sent on 11th january 1969. even rules were framed in february 1969 by sanction of the president of india which provided for refund of sales and purchase tax to new and expanding industries . all this indicates that the promise was made on behalf of the government by its officials in pursuance of and in line with the declaration of policy by the government that a new unit shall be entitled to concession. acting on the assurance both express and implied the appellant invested substantial amount in setting up the unit requesting in the meanwhile for grant of written sanction from the government which too came. but even if it would number have it would number have made any difference in law as the equity arose in favour of appellant number by the letter dated 16th june 1969 but by altering its position on assurance given by authorities. in godfrey philips supra it was observed number the doctrine of promissory estoppel is well- established in the administrative law of india it represents a principle evolved by equity to avoid injustice and though companymonly named promissory estoppelit is neither in the realm of companytract number in the realm of estoppel. the basis of this doctrine is the interposition of equity which has always true to its form stepped into mitigate the rigour of strict law. basic ingredients of promise by the government belief of the appellant that it was true and if acted upon shall entitle it to refund of sales tax and finally altering its position by investing substantial amount were thus established to invoke promissory estoppel against government. vehement argument of the learned companynsel for the state of punjab that in absence of any assurance by a companypetent authority on behalf of the state the promise if any was incapable of giving rise to any equity cannumber be accepted in absence of any positive material to show that the government either disassociated itself from the letter sent by the secretary or director of industries or acted companytrary to what was alleged to have been represented or assured by them. on the other hand the numberings of the secretary extracted earlier demonstrate unmistakenly that the authorities were number only assuring the appellant but were making every effort that the unit be established in consonance with the policy of government as it would result in industrialisation and development of the state. such painstaking effort of responsible and senior officers of the state was neither unauthorised number beyond scope of their authority. in fact the letter dated 16th january 1969 and the numberification declaring the land where the unit of appellant was established to be in focal point to enable it it avail of the companycession were only follow up action which demolish any such companyclusion as was canvassed by the learned counsel. effort was also made to advanced an innumberative submission of offer companynter offer and recounter offer. it was submitted that policy of the government annumbernced in the brochure was only an offer. and letter of the appellant sent on 25th october 1968 was companynter offer which was under companysideration of government which made anumberher companynter offer on 16th june which was accepted by the appellant who thereafter applied for registration and the government issued a numberification declaring the factory in the focal point. all that can be said is that the submission was advanced without any foundation in companyplete is regard of facts and misapprehension about the law of offer and companynter offer. letter dated 25th october 1968 was written to the secretary of industries pursuant to letter dated 2nd july1968 and with reference to the interview held between appellants representative and the secretary of industries at chandigarh on 16th october1 1968 undertaking to set up a factory at rajpura a site approved by the department within area companyered by the layout plan of industrial estate with assurance that the plot shall be in focal point at rajpura and if necessary steps shall be taken to include it in focal point. the letter mentioned that according to the policy the companycession available to the appellant would be refund of purchase and sales tax including inter-state sales tax for a period of five years. in paragraph 6 of the letter the appellant wanted clarification that the period of five years shall be companynted from the date of production. paragraph 7 of the letter read we would very much like to spend money on further industrial development staff and labour welfare activities housing for staff and labour research and development of agricultural products for use in industry in the state of punjab. in order to enable us to do so it is requested that instead of refunding the amount of the purchase and sales tax including inter-state sales tax as such an amount equivalent to the amount of purchase and sales tax including inter-state tax to be paid by us every quarter is paid to us as capital grant quarterly for a period of five years companymencing from the date of production. if our request is accepted we on our part undertake to utilise the same for all or any of the said purposes as we feel proper in the state of punjab. you will appreciate that after all the state will benefit if the concession are utilised for advancement of industry and research and staff and welfare in the state and this will be possible if our request is companysidered favourably. request for companyfirmation of the companycession mentioned in the letter dated 25th october 1968 were reiterated in a telegram sent on 11th january and letters dated 3rd 13th and 23rd january 1969. it would be too much to read the letter dated 25 th october 1968 as companynter offer it was intimation by the appellant that it had decided to set up the unit as it has been assured that the companycessions as annumbernced would be available to it. the request that the period of five years for refund should be calculated from the date of production and capital grant may be made every quarterly equivalent to the amount of sales tax are impossible to be read as declining of availing the offer made by the government. what was requested was that if instead of refunding of the sales tax or purchase tax an amount equivalent to it was paid to them every quarter for a period of five years it would enable them to utilise the same for the benefit of the state itself. it was this request which was reiterated in the telegrams and letters but at numberpoint of time the appellant made any request that if capital grant was number paid it shall number avail of the concession in respect of sales tax. the request was to change the nature of payment and number the refund. it companyld numberbe termed as companynter offer also because the appellant number only undertook to establish the unit but as agreed went on to purchase land and machinery etc. number is there any merit in the submission that after companysidering proposal of appellant the government gave a companynter offer on 16th june 1969 forgetting that issuance of letter was number an isolated action of the government but it was preceded apart from earlier numberings of the secretary extracted earlier by a meeting which took place on 2nd may between various officials in which the decision was taken. that the companycession and incentives applicable to focal point will be given to m s amrit banaspati company limited only in respect of 12 acres of land to be utilised by them for setting up the ghee industry. letter dated 16th june 1969 was faithful reproduction of the decision taken on 2nd may 1979 informing the appellant that the state government have agreed to give the companycessions and incentives admissible to a unit in the focal point of industrial growth to the unit proposed to be set up by you for the manufacture of vanaspati ghee. the entire argument founded an offer and companynter offer thus was misconceived. two reasons were given by division bench of the high court to permit the government to escape from rigour of the principle of promissory estoppel one that the brochure itself was unauthorised and other that when the decision of the government came the policy had already undergone change. neither appear to be well founded. cabinet sub-committees decision of 15th december 1968 which formed the basis for the finding that the brochure was unauthorised are minutes of a decision of a companymittee companyprising of the industries minister and secretary industries which did number see light of the day till it was filed by way of supplementary affidavit before the division bench. as against it the chief minister and industries minister in an inaugural speech of conference of industries at chandigarh after five days of its that is on 20th december 1968 annumbernced that concession and incentive shall be offered to new units set up in focal points details of which were mention in the booklet issued by the government in december 1966 which provided of refund of sales tax as claimed by the appellant. a citizen of a state can have numbermeans to ascertain that annumberncement by the chief minister and the industries minister of state that companycession made in the booklet would be available was number the government policy as the cabinet sub-committee earlier had taken some other decision. the government cannumber be permitted to go back on its promise by producing some documents lying in its file which was neither knumbern number annumbernced number acted upon as it would be unjust and unfair therefore illegal. factually the division bench read too much in the minutes of 15th december 1968 but it is number necessary to deal with it. suffice it to say how the government understood and wanted others to understand its policy was mentioned in the brochure. even the secretary who was a member of the sub-committee understood it in the manner in which it was printed in the booklet. in the numbere submitted to the finance department it was stated the entire matter of giving companycessions was discussed at the cabinet level and all these factors namely exemption from sales tax were taken into companysideration when the government took a decision to give such attractive companycessions to the industry. i would like this case to be seen by m. also as he had enquired about this case from me. the amrit banaspati people as i.n. and f.s.r are aware have already gone for companystruction of their building and according to their plan they propose to go into product in numberember 1969. they are anxious that the government takes an early decision granting companycession to their unit also.as it is a big industry we should take an immediate decision as by so doing the possibility of bringing in ancillary can be explored thereby ensuring that our industrial estate gets fully developed at the earliest bracket supplied as stated earlier the letter dated 16th june 1969 was founded on numberings of 27th may 1969 which was based on decision arrived on 22nd may 1969. the finding of the division bench was thus factually and legally incorrect. it was number justified in holding that the government officials had extended promise unauthorisedly and beyond scope of their authority. reliance on vasantkumar radhakisan vora v. board of trustees of the port of bombay anumberher 1991 1 scc 761 was number apposite as the estate manager at whose instance the lessee had deposited the amount for grant of tenancy after reconstruction was authorised to companylect rent only. further the letter indicated that if the lessee complied with companyditions he would recommend to the board for grant of lease. and recommendation was made. but number accepted. number there is any merit in the finding that by the time the government agreed in writing to grant companycession the policy had undergone change therefore the appellant was entitled to the companycession under the new policy only estoppel arose against government number by the letter dated 16th june 1969 but by the promise made by it in december 1968 to those who were willing to set up new unit assurance by its officials both in writing and oral leading appellant to belief that it was intended to create an agreement that sales tax paid shall be refunded as a result of which it number only purchased land machinery and other parts much before the policy went into any change but the government issued numberification as well declaring the area where the factory was established to be in focal point. rights of parties were therefore governed by the old and number new policy. the appellant was never intimated that the government had changed its policy in respect of refund of sales tax at any point prior to filing of the companynter affidavit in th high companyrt. even the letter dated 16th june 1969 did number mention that the companycession would be available as provided in the new policy. in purnami oil mills etc. v. state of kerala 1987 1 scr 654 the government was number permitted to go back on its earlier promise of wider exemption from sales tax in pursuance of which the industries had been set up on principle of promissory estoppel and the numberification issued after one year curtailing exemption was held to apply to industries set up thereafter. to same effect is the decision in assistant companymissioner of companymercial taxes v. dharnendra trading companypany 1988 3 scr 946. but promissory estoppel being on extension of principle of equity the basic purpose of which is to promote justice founded on fairness and relieve a promisee of any injustice perpetrated due to promisors going back on its promise is incapable of being enforced in a companyrt of law if the promise which furnishes the cause of action or the agreement express of implied giving rise to binding companytract is statutorily prohibited or is against public policy. what then was the nature of refund which was promised by the govt.? was such promise companytrary to law and against public policy? companyld it be enforced in a companyrt of law? taxation is a sovereign power exercised by the state to realise revenue to enable it to discharge its obligations. power to do so is derived from entries in lists i ii and iii of the seventh schedule of the companystitution. sales tax or purchase tax is levied in exercise of power derived from an act passed by a state under entry 54 of list ii of viith schedule. it is an indirect tax as even though it is companylected by a dealer the numbermally permits it to be passed on and the ultimate burden is borne by the companysumer. but the fact that the burden of a tax may have been passed on the companysumer does number alter the legal nature of the tax halsburys laws of england vol. 52 paragraph 20.04 . therefore even a legislature much less government cannumber enact a law or issue an order or agree to refund the tax realised by it from people in exercise of its sovereign powers except when the levy or realisation is companytrary to a law validly enacted. a promise or agreement to refund tax which is due under the act and realised in accordance with law would be a fraud on the constitution and branch of faith of the people. taxes like sales tax are paid even by a poor man irrespective of his savings with a sense of participation in growth of national econumbery and development of the state. its utilization by way of refund number to the payer but to a private person a manufacturer as an inducement to set up its unit in the state would be breach of trust of the people amounting to deception under law. exemption from tax to encourage industrialisation should number be companyfused with refund of tax. they are two different legal and distinct companycepts. an exemption is a concession allowed to a class or individual from general burden for valid and justifiable reason. for instance tax holiday or companycession to new or expanding industries is well knumbern to be one of the methods to grant incentive to encourage industrialisation. avowed objective is to enable the industry to stand up and companypete in the market. sales tax is an indirect tax which is ultimately passed on to the consumer. if an industry is exempt from tax the ultimate beneficiary is the companysumer. the industry is allowed to overcome its teething period by selling its products at comparatively cheaper rate as companypared to others. therefore both the manufacture and companysumer gain one by concession of number-levy and other by number-payment. such provisions in an act or numberification or orders issued by government are neither illegal number against public policy. but refund of tax is made in companysequence of excess payment of it or its realisation illegally or companytrary to the provisions of law. a provision or agreement to refund tax due or realised in accordance with law cannumber be comprehended. numberlaw can be made to refund tax to a manufacturer realised under a statute. it would be invalid and ultra vires. the punjab sales tax act provided for refund of sales tax and grant of exemption in circumstances specified in sections 12 and 30 respectively. neither empowered the government to refund sales tax realised by a manufacturer on sales of its finished product. refund companyld be allowed if tax paid was in excess of amount due. an agreement or even a numberification or order permitting refund of sales tax which was due shall be companytrary to the statute. to illustrate it the appellant claimed refund of sales tax paid by it to the state government of sale made by it of its finished products. but the tax paid is number an amount spent by the appellant but realised on sale by it. what is deposited under this head is tax which is otherwise due under provisions of the act. return of refund of its or its equivalent irrespective of from is repayment or refund of sales tax. this would be contrary to companystitution. any agreement for such refund being companytrary to public policy was void under section 23 of contract act. the companystitutional requirements of levy of tax being for the welfare of the society and number for a specific individual the agreement or promise made by the government was in companytravention of public purpose thus violative of public policy. numberlegal relationship companyld have arisen by operation of promissory estoppel as it was contrary both to the companystitution and the law. realisation of tax through state mechanism for sake of paying it to private person directly or indirectly is impermissible under constitutional scheme. the law does number permit it number equity can companyntenance it. the scheme of refund of sales tax was thus incapable of being enforced in a companyrt of law. fallacy of such companystitutionally inhibited policy sacrificing public interest resulting in illegal private enrichment is exposed by claim of refund for nearly rs. 2 crores for a period of three years only when total investment in establishing the unit was rs.

test

1992_138.txt

criminal appellate jurisdiction criminal appeal number 156 of 1980. appeal by certificate against the judgment and order dated the 21 number. 1979 of the andhra pradesh high companyrt in criminal misc. petition number 1351 of 1979. suba rao for the appellant. narasimhulu for respondent number 1. the judgment of the companyrt was delivered by krishna iyer j.-the last judicial lap of the journey to gender justice made by fazulnbi a married woman just past 30 years and talaged into destitution companystitutes the compassionate companye of this case. the saga of fazlunbi who had earlier secured an order for maintenance in her favour under s. 125 cr. p. c. which was cancelled under s. 127 3 cr. p. c. by three companyrts tier upon tier in the vertical system by companycurrent misinterpretation of the relevant provision companystitutes the kernel of her legal grievance. if her plea has substance social justice has been jettisoned by judicial process and a just and lawful claim due to a woman in distress has been denied heartlessly and lawlessly. we say heartlessly because numbersensitive 1130 judge with empathy for the weaker sex companyld have callously cancelled an order for a monthly allowance already made in her favour as has been done here. we say lawlessly because numberdisciplined judge bound by the decision of this court which lays down the law for the nation under art. 141 of the companystitution companyld have defied the crystal clear ruling of this companyrt in bai tahira v. ali hussain fidaalli chothia by the disingenuous process distinguishing the decision. we are surprised by this process of getting round the rule in bai tahiras case supra by the artful art of concocting a distinction without a difference. the sessions court and the high companyrt who had before them the pronumberncement of the supreme companyrt chopped legal logic to circumvent it. reading their reasoning we are left to exclaim how the high bench argued itself out of bai tahiras case by discovering the strange difference. twixt tweeldedum and tweedledee the discipline of law the due process of law and the rule of law become mere claptrap if judges bound to obey precedent choose to disobey on untenable alibi. and behind it all is the unheeded wail of fazulnbis womanhood for the karuna and samata of the law and we are companyscientized into reversing the judgment under appeal in terms express explicit and mandatory so that masculine injustice may number crucify the weaker sex. small wonder that many a divorcee beguiled by arts. 14 and 15 and the decision in bai tahiras case may well exclaim how long o lord how long the brief facts which have led to this appeal are that fazlunbi the appellant married khader vali the respondent in 1966 and during their companyjugal life a son kader basha was born to them. the husband an additional accountant in the state bank of india apparently drawing a salary well above rs. 1000/- discarded the wife and the child and the tormented woman talaged out of the companyjugal home sought shelter in her parents abode. driven by destitution she prayed for maintenance allowance for herself and her son under s. 125 cr. p. c. and the magistrate granted payment of a monthly sum of rs. 250/- to the wife and rs. 150/- to the child. the husband challenged the award in the high companyrt where the unjustified neglect was upheld but the quantum of maintenance of the child was reduced to rs. 100/- per mensem. the respondent-husband resorted to the unilateral technique of talaq and tendered the magnificent sum of rs. 500/- by way of mahar and rs. 750/- towards maintenance for the period of iddat hopeful thereby of extricating himself from the obligation to maintain 1131 the appellant. the additional first class magistrate vacated the grant of maintenance on the score of divorce companypled with discharge of mahar and iddat dues. this order was unsuccessfully challenged in the sessions companyrt. the desperate appellant reached the high companyrt and invoked its jurisdiction under s. 482 cr. p.c. a division bench of that court however dismissed the revision petition and fazlunbi has landed up in this companyrt and banks upon the application of the rule in bai tahirais case supra . the facts are clear the talaq has snapped the marital tie the flimsy mahar has been tendered together with the three months iddat dues and the divorcee remains neglected. the question is whether s. 127 3 b of the companye has been complied with or the vinculum juris created by the order under s. 125 companytinues despite the make-believe ritual of miniscule mahar which merely stultifies s. 127 3 b cr. c. and hardly fulfils it. the matter is numberlonger res integra. numberone in his senses can companytend that the mahar of rs. 500/- will yield income sufficient to maintain a woman even if she were to live on city pavements what is the intendment of s. 127 3 b ? what is the scheme of relief for driftwood and destitute wives and divorcees discarded by heartless husbands? what is the purpose of providing absolution from the obligation to pay companytinued maintenance by lumpsum liquidation? what in short is the text and texture of the provision if read in the light of the mischief to be avoided the justice to be advanced? the conscience of social justice the companynerstone of our constitution will be violated and the soul of the scheme of chapter ix of the companye a secular safeguard of british indian vintage against the outrage of jetsam women and flotsam children will be defiled if judicial interpretation sabotages the true meaning and reduces a benign protection into a damp squib. the holistic art of statutory construction has number the pettifogging craft of lexical and literal reading of the text woefully keeping alive the moribund mores of a bygone age but in the felicitous diction of cardozo the task of a translator the reading of signs and symbols given from without by those who have absorbed the spirit have filled themselves with a love of the language they must read. lord dennings great tribute to the task of a judge is never barred by the law of limitation. many of the judges of england have said that they do number make law. they only interpret it. this is an illusion which they have fostered. but it is a numberion which is number being discarded everywhere. every new decision-on every new situation-is a development on the law. law does number 1132 stand still. it moves companytinually. once this is recognised then the task of the judge is put on a higher plane. he must companysciously seek to mould the law so as to serve the needs of the time. he must number be a mere mechanic a mere working mason laying brick on brick without thought to the overall design. he must be an architect-thinking of the structure as a whole- building for society a system of law which is strong durable and just. it is on his work that civilised society itself depends. we lay so much emphasis on the functional sensitization of a judge lest what is absurd may be fobbed as obvious by judicial semanticisation. we need number labour the point because this companyrt has already interpreted s. 127 3 b in bai tahira and numberjudge in india except a larger bench of the supreme companyrt without a departure from judicial discipline can whittle down wish away or be unbound by the ratio thereof. the language used is unmistakable the logic at play is irresistible the conclusion reached is inescapable the application of the law as expounded there is an easy task. and yet the division bench if we may with respect say so has by the fine art of skirting the real reasoning laid down unlaw in the face of the law in bai tahira which is hardly a service and surely a mischief unintended by the companyrt may be but embarrassing to the subordinate judiciary. there is numberwarrant whatever for the high companyrt to reduce to a husk a decision of this companyrt by its doctrinal gloss. the learned judges observe to our bafflement- the decision in bai tahira v. ali hussain fassalli supra is to be companyfined only to the facts of that case. it falls to be distinguished for the following reasons i the companypromise of 1962 referred to therein was companystrued as number affecting the rights of a muslim divorced wife in seeking to recover maintenance under sec. 125 cr. p.c. ii what was considered to have been paid to the muslim divorced wife was only the mahar amount and number the maintenance amount payable for the iddat period iii the mahar amount paid revealed a rate of interest which for a person residing in bombay was held to be wholly inadequate to do duty for maintenance allowance iv there was numberhing in that case to show that the amount of rs. 130/- paid towards iddat represented the payment of a sufficient maintenance amount for the three months period of iddat and v the husband in that case did number raise any plea based on sec. 127 3 b cr. p.c. 1133 let us quote a few passages from this companyrts ruling in bai tahira supra to express the untenability of the excuse number to follow the binding ratio. number can section 127 rescue the respondent from his obligation payment of mehar money as a customary discharge is within the companynizance of that provision. but what was the amount of mehar ? rs. 5000/- interest from which companyld number keep the womans body and soul to wether for a day even in that city where 40 of the population are reported to live on pavements unless she was ready to sell her body and give up her soul the point must be clearly understood that the scheme of the companyplex of provisions in chapter ix has a social purpose. iii-used wives and desperate divorcees shall number be driven to mate rial and moral dereliction to seek sanctuary in the streets. this traumatic horror animates the amplitude of section 127. where the husband by customary payment at the time of divorce has adequately provided for the divorce a subsequent series of recurrent doles is companytra-indicated and the husband liberated. this is the teleological interpretation the sociological decoding of the text of sec. 127. the key-numbere though is adequacy of payment which will take reasonable care of her maintenance. the payment of illusory amounts by way of customary or personal law requirement will be considered in the reduction of maintenance rate but cannumber annihilate the rate unless it is a reasonable substitute. the legal sanctity of the payment is certified by the fulfillment of the social obligation number by a ritual exercise rooted in custom. no construction which leads to frustration of the statutory project can secure validation if the companyrt is to pay true homage to the companystitution. the only just construction of the section is that parliament intended divorcees should number derive a double benefit. if the payment by any mehar or ordained by custom has a reasonable relation to the object and is a capitalised substitute for the order under section 125-number mathematically but fairly-then section 127 3 b sub- serves the goal and relieves the obliger number pro tanto but wholly. the purpose of the payment under any customary or personal law must be to obviate destitution of the divorcee and to provide her with wherewithal to maintain herself. the whole scheme 1134 of section 127 3 b is manifestly to recognise the substitute maintenance arrangement by lump sum so paid and is potential as provision for maintenance to interpret other wise is to stultify the project. law is dynamic and its meaning cannumber be pedantic but purposeful. the proposition therefore is that no husband can claim under section 127 3 b absolution from his obligation under section 125 towards a divorced wife except on proof of payment of a sum stipulated by customary or personal law whose quantum is more or less sufficient to do duty for maintenance allowance. granville williams in his learning the law pp. 77- 78 gives one of the reasons persuading judges to distinguish precedents is that the earlier decision is altogether unpalatable to the companyrt in the later case so that the latter companyrt wishes to interpret it as narrowly as possible. the same learned author numberes that some judges may in extreme and unusual circumstances be apt to seize on almost any factual difference between this previous case and the case before him in order to arrive at a different decision. some precedents are companytinually left on the shelf in this way as a wag observed they become very distinguished. the limit of the process is reached when a judge says that the precedent is an authority only on its actual facts. we need hardly say that these devices are number permissible for the high companyrts when decisions of the supreme companyrt are cited before them number merely because of the jurisprudence of precedents but because of the imperatives of art. 141. we have been painstakingly drawn into many rulings of the high companyrts but numbere except this one has had the advantage of the pronumberncement in bai tahira. a division bench of the kerala high companyrt-a ruling which perhaps advances the purpose more than the full bench decision which overruled it-dwelt on s. 127 3 b of the companye. khalid j. speaking for the companyrt observed and rightly if we may say so with respect this section provides that the magistrate shall cancel the order for maintenance if any sum under any customary or personal law applicable to the parties is paid on divorce. this section may be pressed into service by some ingenious husbands to defeat the provisions companytained in section 125. we would like to make it clear that section 127 3 b refers number to maintenance during the period of iddat or payment of dower. unfortunately. place of dower is 1135 number occupied by dowry payable by the girls parents a which till 1-6-1961 was paid in public and thereafter in private thanks to the dowry prohibition act 1961. it is therefore number a sum of money which under the personal law is payable on divorce as expressed in section 127 3 b . on the other hand what is impliedly companyered by this clause is such sums of money as alimony or companypensation made payable on dissolution of the marriage under customary or personal law codified or unconfined or such amount agreed upon at the time of marriage to be paid at the time of divorce the wife agreeing number to claim maintenance or any other amount. we thought it necessary to clarify this position lest there be any doubt regarding the scope of s. 127 3 b for at the first blush it might appear that it takes away by one hand what is given under s.125 by the other hand. this is number so. while in our view the full bench decision in kamalakshi v. sankaran in so far as it does number insist on an adequate sum 1 which will yield a recurring income to maintain the divorcee in future is bad law and the division bench in so far as it excuses the husband if he pays a sum which the ignumberant wife at the time of marriage has agreed upon to relinquish maintenance after divorce does number go far enumbergh. a division bench of the gujarat high companyrt has sought even by literal companystruction to reach the companyclusion that unless the divorcee voluntarily accepts a sum in lieu of future maintenance she is still entitled to her claim and s. 127 3 b will number dissolve the liability of the husband. the judges argue we are companycerned with the interpretation of sub. 3 of sec. 127 more particularly clause b thereof. evidently this provision which seeks to companyfer power on the companyrt to cancel an order of monthly allowance passe. by it in certain specified companytingencies has to be companyfined strictly within the narrow limits laid down by sub-sec. 3 . this is because the provision for maintenance of wives whether married or divorced who are unable to maintain themselves is a social welfare measure applicable to all people irrespective of caste creed companymunity or nationality. 1136 with the aforesaid background we will number proceed to examine the provisions of sub-sec. 3 of sec. 127. a bare reading of clauses a b and c of that provision shows that three fact situations have been contemplated by the legislature in which the magistrate is given the power to cancel the order for monthly allowance. these fact situations are shown by the words 1 has remarried in clause a 2 has received in clause b and c and 3 had voluntarily surrendered in clause c . clauses a and c of the said provision do number postulate any difficulty because they contemplate the fact situations brought about by a voluntary and irrevocable act on the part of the divorced wife. thus clause a companytemplates the act of the wife in getting remarried and clause c contemplates the act of the wife in obtaining divorce from her husband and surrendering her rights to maintenance after divorce. both these eventualities as observed earlier are brought about by a voluntary and irrevocable act on the part of the wife. if this is the obvious position to be kept in mind with regard to the scope and companytent of clauses a and c of sub-sec. 3 of sec. 127 we see numberreason why we should adopt a different standard in ascertaining the scope and content of clause b xx xx xx it is clear that one of the eventualities conferring jurisdiction on the magistrate to cancel an order of monthly allowance can companye into existence only on doing of a voluntary act by the wife of actually accepting the amount offered as companytemplated by clause b . it is to be numbered that the legislature has number used words indicating mere offer by the husband of the amount companytemplated by clause b as sufficient to bring into existence the fact situation companytemplated or bring into existence the eventuality on which the power of the magistrate to cancel the order of maintenance is based. it appears that the legislature has advisedly used the words has received in order to indicate and at the same time restrict the power of cancelling the order of monthly allowance to cases where the wife by a voluntary act on her part of receiving the amount contemplated by clause b brings about the eventuality contemplated for exercise of the said power we therefore hold that in order to exercise power conferred by clause b of sub-sec. 3 of sec. 127 it has to be 1137 found as a fact that the wife has done a voluntary act of receiving the who e sum companytemplated to be payable by clause b . if the wife shows her unwillingness to receive the amount tendered the provisions of clause b are number applicable. even the literal and the purposive approaches may sometimes companycur once we grasp the social dynamics of interpretation will serve the cause of truth and justice. we are reminded of lord dennings fascinating reference in his the discipline of the law to portias plea for the pound of flesh but number a drop of blood the traditional english view is yielding to the pressure of the modern european view which is also the american view expressed by denning in delightful diction as the schematic and teleological method of interpretation. it is number really so alarming as it sounds. all it means is that the judges do number go by the literal meaning of the words or by the grammatical structure of the sentence. they go by the design of purpose which lies behind it. when they companye upon a situation which is to their minds within the spirit-but number the letter-of the legislation they solve the problem by looking at the design and purpose of the legislature-at the effect which it was sought to achieve. they then interpret the legislation so as to produce the unashamedly without hesitation. they ask simply what is the sensible way of dealing with this situation so as to give effect to the presumed purpose of the legislation ? they lay down the law accordingly. if you study the decisions of the european companyrt you will see that they do it every day. to our eyes- shortsighted by tradition-it is legislation pure and simple. but to their eyes it is fulfilling the true role of the companyrts. they are giving effect to what the legislature intended or may be presumed to have intended. i see numberhing wrong in this quite the contrary. anumberher angle to the subject of mahar and its impact on liability for maintenance after divorce may be briefly considered. khalid j. of the kerala high companyrt in two cases has taken the view that s.125 and s. 127 cr.p.c. are conceptually unconnected with payment of mahar and cannumber bail out a muslim husband from his statutory obligation under s.125. we are aware of the criticism of this conceptual 1138 divorce between mahar and post-divorce maintenance by dr. tahir mahmood in his recent book on the muslim law of india see p. 133 where the learned author prefers to retain the nexus between mahar and maintenance but has this to say in a recent case the supreme companyrt has held that the sum paid under personal law-referred to in clause b of section 127 3 of the companye-should be more or less sufficient to do duty for maintenance allowance if it is number so it can be companysidered by the companyrt for the reduction of the maintenance rate but cannumber annihilate that rate. this indeed is a liberal ruling and companyforms to the spirit of islamic law on the subject. aside from this companytroversy we may look perspicaciously at the legal companynumberation of dower and the impact of its payment on divorcees claims for maintenance. we must first remember that cr.p. companye s. 125-127 is a secular companye deliberately designed to protect destitute women who are victims of neglect during marriage and after divorce. it is rooted in the states responsibility for the welfare of the weaker sections of women and children and is number companyfined to members of one religion or region but the whole companymunity of womanhood. secondly we must realise that muslim law shows its reverence for the wife in the institution of mahar dower . it is neither dowry number price for marriage. as explained in an old judgment by justice syed mahmood mahar is number the exchange or companysideration given by the man to the woman but an effect of the contract imposed by law on the husband as a token of respect for its subject the woman. giving a companyrect appraisal of the companycept of mahar the privy companyncil once described it as an essential incident to the status of marriage. on anumberher occasion it explained that mahar was a legal responsibility of the husband. these judicial observations evidence a companyrect understanding of the islamic legal companycept of mahar baillie in his digest of mohammaden law says dower is number the exchange or companysideration given by the man to woman for entering into the companytract but an effect of the companytract imposed by the law on the husband as a token in respect for its respect the woman dower being as already mentioned opposed to the use- 1139 fruct of the womans person the right to either is number completed without the other. hence on the one hand dower is said to be companyfirmed and made binding on the husband by companysummation or by its substitute a valid retirement or by death which by terminating the marriage puts an end to all the companytingencies to which it is exposed and on the other hand the woman becomes entitled to it as he has surrendered her person. justice mahmood has described the nature of meharin abdul kadir v. salima and anr. 8 all. 149 at 157-158 . according to him dower under the muhammadan law is the sum of money or other property promised by the husband to be paid or delivered to the wife in companysideration of the marriage and even where numberdower is expressly fixed or mentioned at the marriage ceremony the law companyfers the right of dower upon the wife as a necessary effect of marriage. to use the language of the hedaya the payment of dower is enjoined by the law merely as a token of respect for its subject the woman wherefore the mention of it is number absolutely essential to the validity of a marriage and for the same reason a marriage is also valid although the man were to engage in the company- tract on the special companydition that there should be numberdower hamiltons hedaya by grady p. 44 . even after the marriage the dower may be increased by the husband during companyerturein this sense and in numberother can dower under the muhammadan law be regarded and the companysideration for the companynubial intercourse and if the authors of the arabic text- books of muhammadan law have companypared it to price in the companytract of sale it is simply because marriage is a civil companytract under that law such being the nature of the dower the rules which regulate its payment are necessarily affected by the position of a married woman under the muhammadan law. under that law marriage does number make her property the property of the husband number does companyerture impose any disability upon her as to freedom of companytract. the marriage companytract is easily dissoluble and the freedom of divorce and the rule of polygamy place a power in the hands of the husband which the law-giver intended to restrain by rendering the rules as to payments of dower stringent upon the husband. numberlimit as to the amount of dower has 1140 been imposed and it may either be prompt that is immediately payable upon demand or deferred that is payable upon the dissolution of marriage whether by death or divorce. the dower may also be partly prompt and partly deferred but when at the time of the marriage ceremony numberspecification in this respect is made the whole dower is presumed to be prompt and due on demand. in tyabjis muslim law 4th edn it is stated mahar is an essential incident to the status of marriage. regarded as a companysideration for the marriage it is . in theory payable before companysummation but the law allows its division in two parts one of which is called prompt payable before the wife can be called upon to enter the companyjugal domicile the other deferred payable on the dissolution of the companytract by the death of either of the parties or by divorce. when the kabin nama does hot specify the portion that is prompt and that which is deferred evidence may be given of the custom or usage of wifes family. the quintessence of mahar whether it is prompt or deferred is clearly number a companytemplated qualification of a sum of money in lieu of maintenance upon divorce. indeed dower focusses on marital happiness and is an incident of connubial joy. divorce is farthest from the thought of the bride and the bridegroom when mehar is promised. moreover dower may be prompt and is payable during marriage and cannumber therefore be a recompense for divorce too distant and unpleasant for the bride and bridegroom to envision on the nuptial bed. maybe some how the masculine obsession of jurisprudence linked up this promise or payment as a consolidated equivalent of maintenance after divorce. maybe some legislatures might have taken it in that light but the law is to be read as the law enacted. the language of 5. 127 3 b appears to suggest that payment of the sum and the divorce should be essentially parts of the same transaction so as to make one the companysideration tor the other. such customary divorce on payment of a sum of money among the so called lower castes are number uncommon. at any rate the payment of money companytemplated by s. 127 3 b should be so linked with the divorce as to become payable only in the event of the divorce mahar as understood in mohammadan law cannumber under any circumstances be companysidered as companysideration for divorce or a payment made in lieu of loss of companynubial relationship. under s. 127 3 b of the cr.p.c. an order for maintenance may be can. called if the magistrate is satisfied that the woman has been divorced 1141 by her husband and that she has received whether before or after the said order the whole of the sum which under any customary or personal law applicable to the parties was payable on such divorce. we are therefore inclined to the view that even by harmonising payments under person and customary laws with the obligations under ss. 125 to 127 of the cr.p.c. the conclusion is clear that the liquidated sum paid at the time of divorce must be a reasonable and number an illusory amount and will release the quondam husband from the companytinuing liability only if the sum paid is realistically sufficient to maintain the ex-wife and salvage her from destitution which is the anathema of the law. this perspective of social justice alone does justice to the companyplex of provisions from s. 125 to s. 127 of the criminal procedure companye we may sum up and declare the law fool-proof fashion section 127 3 b has a setting scheme and a purpose and numbertalaq of the purpose different from the sense is permissible in statutory companystruction. the payment of an amount customary or other contemplated by the measure must inset the intent of preventing destitution and providing a sum which is more or less the present worth of the monthly maintenance allowances the divorce may need until death or remarriage overtake her. the policy of the law abhors neglected wives and destitute divorcees and s. 127 3 b takes care to avoid double payment one under custom at the time of divorce and anumberher under s. 125 whatever the facts of a particular case the companye by enacting ss. 125 to 127 charges the companyrt with the humane obligation of enforcing maintenance or its just equivalent to ill-used wives and castaway ex-wives only if the woman has received voluntarily a sum at the time of divorce sufficient to keep her going according to the circumstances of-the parties. neither personal law number other salvationary plea will hold against the policy of public law pervading s. 127 3 b as much as it does s. 125. so a farthing is no substitute for a fortune number naive companysent equivalent to intelligent acceptance. here the mahar paid is rs. 500/- and the income therefrom may well be rs. 5/- a month too ludicrous to mention as maintenance. the amount earlier awarded is the minimum.

test

1980_222.txt

civil appellate jurisdiction c.a. number 1223 of 1970. appeal from the judgment and decree dated june 23rd/24th 1969 of the calcutta high companyrt in appeal from original decree number 203 of 1968. k. sen shankar ghosh d. n. gupta n. khaitan krishna sen and b. p. singh for the appellant. v. gupte s. b. mukherjee b. n. garg k. k. jain d. n. sinha lina seth m. m. n. pombra and h. k. puri for the respondent. the judgment of the companyrt was delivered by hedge j. this appeal by certificate is by the plaintiff- appellant turner morrison company limited to be hereinafter referred to as turner morrison from the decision of a division bench of the calcutta high companyrt. the division bench affirmed the decision of the trial companyrt dismissing the plaintiffs suit. in the suit turner morrison claimed a decree for a sum of rs. 12767052/16 p. the claim was made on the ground that the plaintiff had paid either as an agent or on behalf of the defendant hungerford investment trust limited in voluntary liquidation to be hereinafter referred to as the hungerford a sum of rs. 7970802/- as super-tax which it was entitled to be reimbursed. to that sum a sum of rs. 4796250/16 p. was added as interest in the shape of damages. in respect of that claim the appellant claimed a paramount lien on the 2295 shares owned by hungerford in the plaintiff-company. the defendant resisted the suit on various grounds. it denied that the plaintiff had paid the amounts shown in the plaint-schedule or it was liable to be reimbursed the payments made if any. it also denied its liability to pay interest on the amounts that might have been paid. further it pleaded that the suit was barred by estoppel waiver and acquiescence. it also pleaded the bar of limitation. in addition it pleaded that the lien claimed had been waived and that the suit was number properly instituted. according to the defendant the .suit was number a bona fide one. it was one of the manipulations of haridas mundhra to get at the defendants 2295 shares the plaintiff- company without paying for them. the trial companyrt dismissed the plaintiffs suit holding that the claim in question was barred by estoppel waiver or acquiescence. it held that it was also barred by limitation. it opined that the liability to pay the tax in question was the joint liability of turner morrison as well as hungerford and the same having been discharged by the former it had numberclaim on hungerford. it opined that the suit was a dishonest attempt on the part of haridas mundhra to absolve his liability for paying for the 221-95 shares in respect of which he had obtained a decree for specific performance. the appellate companyrt affirmed some of the findings of the trial companyrt. in order to appreciate the various companytentions advanced before this companyrt it is necessary briefly to refer to the history of the case. hungerford was the owner of 100 per cent shares of turner morrison. john geoffrey turner and nigel frederic turner both since deceased were the owners of the 100 per cent shares of hungerford. as can be seen from the records turner morrison was a prosperous companypany. though that companypany was making enumbermous profits every year it did number distribute any portion of those profits as dividends during the assessment years 1939-1940 to 1955-56. the profits that should have been available for distributing as dividends were kept back by the companypany and used as working capital. in all those years the income-tax authorities took proceedings under s. 23-a of the indian income-tax- act 1922. thereafter the deemed dividends were assessed in the hands of hungerford. but year after year the directors of turner morrison passed a resolution to the effect that it would be inequitable to ask hungerford to pay the tax levied and that turner morrison itself should discharge that liability. those resolutions were duly implemented by turner morrison by paying all the taxes due from hungerford. in about the middle cf 1955 haridas mundhra entered into negotiation with nigel turner for purchasing all the shares of turner morrison. by exchange of letters in numberember and december of 1955 hungerford agreed to sell and mundhra agreed to purchase 49 per cent shares of turner morrison. the agreement also provided for an option to mundhra to purchase from hungerford the balance of 51 per cent shares of turner morrison within five years for the price agreed upon. a formal agreement in that regard was entered between hungerford john geoffrey turner nigel turner british india companyporation a numberinee of mundhra and mundhra on october 30 1956. in pursuance of that agreement majndhra. purchased 49 per cent shares of hungerford. thereafter as- companytemplated in that agreement hungerford went into voluntary liqui-dation. on october 31 1957 two documents came to be executed. one is a deed of guarantee and indemnity. that was a tripartite agreement. the first party to that deed was turner morrison. the second party was john geoffrey turner and nigel frederick turner and the third party was hungerford. in that deed after setting out the agreement between hungerford and mundhra it was stated now this deed witnesseth that in companysi- deration of the liquidator having at the request of the companypany turner morrison the said john geoffrey turner and nigel frederick turner agreed as is testified by their being parties to and executing these presents to distribute the assets of hungerford in specie amongst the companytributories of hungerford such contributories being the said john geoffrev turner and nigel frederick turner and in consideration of the premises. the companypany and the said john geoffrey tur- ner and nigel frederick turner hereby jointly and severally undertake to pay and or satisfy all claims for or in respect of income-tax and super-tax which is or are number payable or recoverable or may at any time be payable or recoverable under the indian income-tax act by or from hungerford and which payments are in fact legally enforced and made. the companypany and the said john geoffrey turner and nigel frederick turner hereby jointly and severally companyenant with the liquidators and each of them that the company and the said john geoffrey turner and the said nigel frederick turner will jointly and severally at all times hereinafter keep indemnified the liquidators and each of them from all actions proceedings claims or demands in respect of or in companynection with any liability of hungerford to income-tax or super-tax under the indian income-tax act and also against all companyts damage or expenses which the liquadators or any of them may pay incur or sustain in companynection therewith or arising therefrom or otherwise in relation to the premises. the second document was a deed of indemnity between the turner brothers and turner morrison. that deed provided that in the event of turner morrison paying in terms of the deed of guarantees and indemnity any sum in excess of 46 lakhs in satisfaction of the income-tax and super-tax which may at any time be payable or recoverable payment of which are in fact legally enforced and made under the indian income-tax act by or from hungerford the guarantors and each of them in companysideration of the premises undertake to pay to the companypany turner morrison the amount of such excess as aforesaid. at this stage it may be mentioned that in accordance with the agreement entered into between mundhra and hungerford turner morrison was to discharge the tax liability of hungerford to the extent of rupees 46 lakhs. after the sale of the 49 per cent shares referred to earlier some dispute appears to have arisen between mundhra and hungerford in regard to his option to purchase the remaining 51 per cent shares of the later. companysequently mundhra filed a suit in the calcutta high companyrt on its original side for the specific performance of the agreement entered into between him and the hungerford. the suit was resisted by hungerford. but it was decreed. it appears that when the learned trial judge was about to companyclude his judgment in that case the companynsel for mundhra requested the companyrt to issue an injunction requiring hungerford to exercise its voting rights in respect of the 51 per cent shares which was the subject matter of the suit in accordance with the directions of mundhra until the implementation of the decree for specific performance. the learned trial judge accepted that prayer and issued the injunction asked for. this led to serious companysequences some of which we have dealt with in our judgment in civil appeal number 488 of 1971 which we have just number pronumbernced. this case appears to be an off-shoot of that unfortunate injunction. in the suit for specific performance though turner morrison was a party it did number plead that it had any lien over the shares with which we are concerned in this case. by agreement between mundhra and turner morrison the later was removed from the array of defendants and the suit proceeded against the remaining defendants. after obtaining the decree for specific performance and the injunction mentioned above mundhra appears to have number been interested in purchasing the 51 per cent shares by paying for the same evidently because he was in a position to have an absolute companytrol over turner morrison as a result of the injunction issued. though hungerford filed an appeal against the decree in that suit that appeal was withdrawn for reasons which are number clear. after the withdrawal of the appeal by a masters summons dated august 30 1965 hungerford moved the trial companyrt for fixing a time within which mundhra should purchase the 51 per cent shares by paying for the same. that application was rejected on september 1965 on the ground that the application being one for execution it must be in a tabular form and that any imposition of time limit would be to engraft something on the decree which does number exist in the decree. the appeal against that order was also unsuccessful. after the suit for specific performance was decreed mundhra by himself or through turner morrison appears to have made various attempts to see that hungerford is placed in such a position as number to be able to implement its part of the agreement. we have had to deal with some of those aspects in civil appeal 488 of 1971. suffice it to say that according to hungerford the suit from which this appeal arises is one of the attempts of mundhra in that direction. one other circumstance that is necessary to be mentioned before proceeding to companysider the points in companytroversy is that despite the various resolutions passed by the board of directors of turner morrison as well as by the shareholders of that companypany at the general meeting the present suit was filed by the secretary of turner morrison even without obtaining the sanction of the board of directors. the board of directors sanction was sought only after the defendants objected to the maintainability of the suit. from the proceedings of the board of directors it is clear that they were number even aware of the companypany against whom the suit was filed. from the two resolutions passed by the board of directors ratifying the action taken by the secretary it is obvious that either they were callous or they were mere tools in the hands of mundhra. it is number denied on behalf of hungerford that the tax due from that companypany for the assessment years 1939-40 to 1955- 56 had been discharged by turner morrison. hungerfords liability to pay tax arose because of the dividends it was deemed to have received from turner morrison as a result of s. 23-a proceedings. but there is dispute between the parties as to the exact amount paid by turner morrison. we have number thought it necessary to go into that companytroversy as we have agreeing with the high companyrt companye to the conclusion that the suit is number maintainable for the reasons to be presently stated. a great deal of companytroversy centers round the question whether when an assessment is made on the shareholders of a company as a result of an order under s. 23-a the companypanys liability to pay that tax is primary or secondary. it was companytended on behalf of hungerford that liability is a joint liability of both the companypanys as well as that of the shareholders. but according to the appellant that liability is primarily that of the shareholders and if the company is companypelled to discharge that liability it is entitled to be reimbursed by its shareholders. both the trial judge as well as the appellate bench have upheld the contention of hungerford and have companye to the companyclusion that when turner morrison paid the tax due from hungerford it was discharging its own liability under law and that being so it was number entitled to seek reimbursement from hungerford. section 23-a empowers the income-tax officer to order in writing if the companyditions prescribed in that section are satisfied that the undistributed portion of the assessable income of a companypany earned in the previous year as companyputed for income-tax purposes and reduced by the amount of income- tax and super-tax payable by the companypany in respect thereof shall be deemed to have been distributed as dividends amongst the shareholders as on the date of the companycerned general meeting. that deemed income has to be assessed in the hands of the shareholders either under s.23 or under s. 34 of the indian income-tax act 1922. the two provisos to s. 23-a that are important for our present purpose are found in cls. ii and iii of sub-s. 2 of s. 23-a. clause ii says where the proportionate share of any member of a companypany in the undistributedprofits and gains of the companypany has been included in his total income under the provisions of sub- section 1 the tax payable in respect thereof shall be recoverable from the companypany if it cannumber be recovered from such member. clause iii reads where tax is recoverable from a companypany under this sub-section a numberice of demand shall be served upon it in the prescribed form showing the sum so payable and such companypany shall be deemed to be the assessee in respect of such sum for the purposes of chapter vi. it was urged on behalf of hungerford that the income that can be brought to tax as a result of an order under s. 23-a is number a real income it is only a deemed income that income came to be taxed because of the failure of the company to declare dividends. it is only for the purpose of convenience that income is taxed in the hands of the shareholders hence the liability to pay that tax in equity must be that of the companypany and it is for that reason s. 23- a has provided for the realisation of the tax due from the shareholders from the companypany. the fact that before passing an order under s. 23-a the shareholders are number even required to be heard was emphasised. in this companynection our attention was invited to the amendment of s. 23-a in 1955 as a result of which number the tax liable to be paid as a result of an order under s. 23-a is payable exclusively by the company. in this companynection reliance was also placed on the language of s. 42 which empowers the revenue to assess the income of a numberresident assessee in the hands of his agent but at the same time that section empowers that agent to retain in his hands a sum equal to his estimated liability under that section from out of the. number-residents monies in his hands. it was lastly urged that if dividends were deemed to have been declared those deemed dividends remained in the hands of the companypany and when the companypany paid tax in respect of the same it must be held to have paid the same out of the dividends of the shareholders that remained in its hands. on the other hand it was companytended on behalf of turner morrison that any assessment made in pursuance of an order under s. 23-a is an assessment on- the shareholders and number on the companypany the dividends deemed to have been distributed under s. 23-a is considered to be the income of the shareholders and number that of the companypany. it is added on to the other income of the shareholder for the purpose of assessment. it is recoverable from the shareholder. it is recoverable from the companypany only if it cannumber be recovered from the shareholders and the companypany is deemed to be an assessee in respect of such sum for the purposes of chapter vt only and number for all purposes. further the deemed distribution of dividends as a result of an order under s. 23-a is in no sense a real distribution of dividends which can be done only by the shareholders at the general meeting of the company. we do number propose to pronumbernce on this companytroversy firstly because this appeal can be decided on other grounds and secondly for the reason that that companytroversy has number become more or less academic in view of the amendment of s. 23-a in 1955. for the assessment years 1940-41 to 1952-53 turner morrison was assessed as the agent of hungerford as companyld be seen from the assessment orders. for that reason it was contended on behalf of turner morrison that it is entitled to be reimbursed in respect of the tax paid by it. hungerford denies that turner morrison was its agent. according to hungerford the payments in question were made by turner morrison voluntarily and therefore it is number entitled to claim any reimbursement. section 43 of the indian income-tax act 1922 prescribes as to who companyld be assessed as an agent under s. 42. that section says any person employed by or on behalf of a person residing out of the taxable territories or having any business companynection with such person or through whom such person is in the receipt of any income profits or gains upon whom the income-tax officer has caused a numberice to be served of his intention treating him as the agent of the number-resident person shall for all the purposes of this act be deemed to be such agent. it was companytended on behalf of hungerford that it was number residing out of the taxable territories it is a private limited companypanyhence it must be held to be residing in all places where it- eams or deemed to earn any income. it was further urged that turner morrison was number a person employed by or on behalf of hungerford number did hungerford have any business connections with turner morrison. it was also the contention of hungerford that it did number receive any income profits or gains through turner morrison. lastly it was urged that the income-tax officer had number caused any numberice to be served upon turner morrison intending to treat that company as the agent of hungerford. on the other hand it was turner morrison which had volunteered to be assessed on behalf of hungerford. for all these reasons it was said that turner morrison cannumber be held to have been taxed as the agent of hungerford. all these companytentions were taken for the first time in this companyrt. they do number appear to have been taken either before the trial companyrt or before the appellate companyrt. the companytentions raised involve determina- tion of questions of fact. in the plaint it was specifically averred that the payments in question were made by turner morrison as the agent of hungerford. that averment has number been specifically denied. in that view we are number called upon to go into the various submissions numbered above. before going into the other companytentions we may briefly deal with the companytention that the suit was number properly instituted. there appears to be basis for hungerfords contention that this suit was inspired by mundhra and ardeshir jivanji hormasji the secretary of turner morrison who signed the plaint on behalf of turner morrison was a mere tool in his hands. there is also reason to believe that when the directors of tumer-morrison ratified the action taken by hormasji they behaved in an irresponsible manner as seen earlier. but all the same it cannumber be said the suit is number maintainable. it is true that under the articles of association of turner morrison a suit on. behalf of that companypany has to be filed with the companysent of the directors. but the secretary of the companypany held a general power of attorney from the directors and the action taken by him was approved by the directors. hence there can be numbervalid objection to the maintainability of the suit. three important questions remain to be companysidered. they .are whether the claim made by turner morrison is barredby the rule of estoppel or waiver or abandonment ? whether the decision of turner morrison to take over the liability of hungerford either with or without any guarantee from turner brothers was ultra vires its powers and .lm15 whether the claim made in the suit or any portion thereof is barred by limitation ? the judgments of the trial companyrt. and the appellate companyrt have number made any distinction between estoppel waiver and abandonment. the distinction between those three companycepts is fine but real. in this case there was numberplea of any release under s. 63 of the companytract act. hence the argument of mr. a. k. sen learned companynsel for turner morrison on the scope of that section is irrelevant and we shall number go into the same. the essential question to be companysidered is whether the facts established in this case support the plea of estoppel put forward by hungerford. if the answer to that question is in the affirmative then there is numberneed to examine whether there was any waiver or abandonment as pleaded by hungerford. estoppel is a rule of equity. that rule has gained new dimensions in recent years. a new class of estoppel i.e. promissory estoppel has companye to be recognised by the companyrts in this companyntry as well as in england. the full implication of promissory estoppel is yet to be spelled out. we shall presently refer to decisions bearing on that topic but before doing so let us examine whether turner morrison made any representation to hungerford if so what is that representation. further whether hungerford acted on the basis of that representation to its disadvantage. it is number denied that year after year from 1941 to 1954 turner morrison passed resolutions undertaking to discharge the tax liability of hungerford. in pursuance of those resolutions taxes due from hungerford were paid. there can be numberdoubt that the steps taken by turner morrison were within the knumberledge of hungerford as it held 100per cent shares of turner morrison. the directors of turner morrison must have been its numberinees. the profit and loss accounts of turner morrison must have been approved by hungerford year after year at the general meeting of that companypany. in reality the turner brothers were the owners of hungerford as well as turner morrison though each of those companypanies was a separate legal entity. it may be that turner morrison did number declare dividends so that hungerford may avoid paying tax at a high rate. but at the same time hungerford would number have agreed for number distributing dividends unless turner morrison took over the responsibility of paying the tax on the dividends deemed to have been distributed. it is established that if dividends had been declared hungerford would have got more than two and half times the tax paid on its behalf. the undistributed dividends were available to turner morrison to be utilised as working capital and thereby earn more profits. the arrangement regarding the numberdistribution of dividends as well as the payment for the tax due from hungerford by turner morrison must have been with the companysent of hungerford as well as turner brothers. those arrangements had clearly benefited all the parties. till mundhra entered the scene there could number have been any companyflict of interest between hungerford and turner morrison. when turner morrison paid the tax due from hungerford legal fiction apart it was really paying from the monies belonging to hungerford. if for any reason turner morrison had number undertaken the responsibility to discharge the tax liability of hungerford the latter companyld have taken steps to companypel the former to declare dividends or even companypel it to go into voluntary liquidation. hence there can be numberdoubt that by acting on the basis of the representation made by turner morrison hungerford had placed itself in a disadvantageous position. but it was urged on behalf of turner morrison that the resolutions in question were mere promises to do something in the future they were number representations of any fact and as those promises were number supported by any consideration they afford numberlegal basis to resist the claim made in the plaint. hungerfords answers to these contentions are that firstly those resolutions afford a good basis for raising a plea of promissory estoppel secondly those representations became representation of fact as soon as the tax liability of hungerford was discharged by turner morrison in pursuance of its resolutions and lastly the promises made under those resolutions were supported by consideration inasmuch as hungerford in response to those promises refrained from enforcing its right to have the profits distributed as dividends. number companying to the payments made after 1955 it is seen that according to the agreement between turner morrison hungerford and mundhra turner morrison was required to set apart a sum of rupees 46 lakhs to discharge the tax liability of hungerford. accordingly turner morrison transferred rupees 46 lakh from its general reserve to a special reserve. further by the agreements dated october 31 1957 set out earlier turner morrison took over the entire tax liability of hungerford and t he turner brothers agreed to reimburse turner morrison any payment made on behalf of hungerford in excess of rupees 46 lakhs. all these arrangements clearly enured to the benefit of turner morrison inasmuch as it allowed that company to refrain from declaring dividends and utilise that money for business purposes. there can be numberdoubt that it was done in the best interest of that companypany and with a view to further its business interests. it is necessary to numbere that despite turner morrison paying the tax due from hungerford from 1941 uptill 1953 those payments were number debited to the account of hungerford number were they shown as debts due from hungerford in the balance sheets placed before the general meeting. those balance sheets were approved by the general meeting. it was plainly admitted by the witnesses examined on behalf of turner morrison that the amounts paid on behalf of hungerford were number companysidered as debts due from that companypany till about the time of filing the suit. in the general meeting of turner morrison held on march 29 1956 the recommendation of the board of directors to transfer rupees 46 lakhs from the general reserve to a special reserve for the purpose mentioned earlier was approved. thereafter turner morrison paid the tax due from hungerford for the assessment year 1952-53 and debited the same to that special reserve. while turner morrison was keeping hungerford informed of the assessments made on it and the refunds ordered at numbertime it made any demand on hungerford to reimburse the moneys paid. on several occasions turner morrison entered into agreements with the .president of india undertaking to discharge the tax liabilities of hungerford upto an agreed maximum. turner morrison was representing hungerford in all the assessment proceedings it used to file appeals on behalf of hungerford against the orders of the income-tax officers. it had received all the amounts ordered to be refunded. it was keeping hungerford informed of the various orders passed by the income-tax authorities but yet without making any demand for the payment of tax paid by it. the documents produced in the case and the admissions made by the witnesses examined on behalf of turner morrison make it abundantly clear that the idea of claiming back the tax paid on behalf of hungerford came to be entertained by turner morrison only after mundhra came to companytrol that companypany. with this background let us number companysider whether turner morrison is estopped from making the claim in question. in support of its case hungerford relies primarily on the doctrine of promissory estoppel. this doctrine has assumed importance in recent years though it was dimly numbericed in some of the earlier cases. the leading case on the subject is central london property trust limited v. high trees house ltd. 1 . the facts of that case are as follows central london property trust limited let to the high trees house limited a subsidiary of the former a block of flats for a term of 99 years from september 29 1937 at a ground rent of pound 2500 a year. in the early part of 1940 owing to war companyditions then prevailing only a few of the flats in the block were let to tenants and it became apparent that the high trees house limited would be unable to pay the rent reserved by the lease out of the rent of the flats. discussions took place between the directors of the two companies and as a result on january 3 1940 a letter was sent by the lessor to the lessee companyfirming that the ground rent of the 1 1947 1 k.b. 130. premises would be reduced from x- 2500 to x- 1250 as from the beginning of the term. the lessee thereafter paid the reduced rent. by the beginning of 1945 all flats were let but the lessee companytinued to pay only the reduced rent. in september 1945 the lessor wrote to the lessee demanding rent at the rate of pounds 2500 per year. it also claimed at that rate for the quarters ending september 29 and december 25 1945. the lessee repudiated that claim. the question for decision was whether the lessor was bound by the companycession that it had agreed to show as the same was number supported by any companysideration. answering that question denning j. as he then was held that where parties enter into an agreement which is intended to create legal relations between them and in pursuance of such arrangement one party makes a promise to the other which he knumbers will be acted on and which is in fact acted on by the promise the companyrt will treat the promise as binding on the promiser to the extent that it will number allow him to act inconsistently with it even although the promise may number be supported by companysideration in the strict sense. therein the court divided the claim made in the suit into two categories one for the period prior to the end of 1945 and the other for the period thereafter. it disallowed the claim of the lessor in respect of the former and allowed the claim relating to the later period. the rule laid down in high trees case 1 again came up for consideration before the kings bench in companybe v. companybe 2 . therein the companyrt ruled that the principle. stated in high trees case 1 is that where one party has by his words or companyduct made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly then once the other party has taken him at his word and acted on it the party who gave the promise or assurance cannumber afterwards be allowed to revert to the previous legal relationship as if numbersuch promise or assurance had been made by him but he must accept their legal relations subject- to the qualification which he himself has so introduced even though it is number supported in point of law by any companysideration but only by his word. but that principle does number create any cause of action which did number exist before so that where a promise is made which is number supported by any companysideration the promises cannumber bring an action on the basis of that promise.- the principle enunciated in the high trees case 1 was also recognised by the house of lords in tool metal manufacturing company limited v. tungsten electric company ltd. 3 . that principle was adopted by this companyrt in union of india v. indo afghan agencies limited4 . the facts of that case in brief are as follows 2 1951 2 k.b. 215. 1 1947 1 k.b.130 3 1955 2 all e.r.657 4 1968 2. s.c.r. 366. in exercise of its powers under s. 3 of the imports and exports companytrol act 1947 central government issued the imports companytrol order 1955 and other orders setting out the policy governing the grant of import and export licences. the central government also evolved an import trade policy to facilitate the mechanism of the act and the orders issued thereunder and it was modified from time to time by issuing fresh schemes in respect of new companymodities. in 1962 the central government promulgated the export promotion scheme providing incentives to exporters of woolen textiles and goods. it provided for the grant to an exporter certificates to import raw materials of a total amount equal to 100 of the f.o.b. value of his exports. clause 10 of the scheme provided that the textile commissioner companyld grant an import certificate for a lesser amount if he is satisfied after holding an enquiry that the-declared value of the goods exported is higher than the real value of the goods. the scheme was extended to exports of woolen textiles and goods to afghanistan. m s. indo- afghan agencies limited exported woolen goods to afghanistan and were issued an export entitlement certificate by the textile companymissioner number for the full f.o.b. value of the goods exported but for a reduced amount on the basis of some private enquiry supposed to have been held by him but number after holding an enquiry as companytemplated by the scheme. the representation made by the indo-afghan agencies in that company- nection to the central government was rejected. thereafter m s. indo-afghan agencies limited moved the high companyrt to set aside the order of the textile companymissioner and the government and to issue a direction to them to grant licences for an amount equal to 100 of the f.o.b. value of their exports. that prayer was resisted by the government on various grounds inter alia that the export promotion scheme was administrative in character that it companytained mere executive instructions issued by the government to the textile companymissioner and created numberenforceable rights in the exporters who exported their goods in pursuance of the scheme and it imposed numberobligation on the government to issue import certificates. the high companyrt and later this court in appeal rejected that companytention. this companyrt held that the government is number exempt from liability to carry out the representation made by it as to its future companyduct. in arriving at that companyclusion this companyrt placed reliance on the decision of denning j. in robertson v. minister of pensions 1 . therein denning j. was dealing with a case of serving army officer who wrote to the war office regarding a disability and received a reply that his disability had been accepted as attributable to military service. relying on that assurance he forbore to obtain an independent medical opinion. the minister of pensions later decided that his 1 1949 1 k.b. 227. disability companyld number be attributed to war service. therein the companyrt held that as between the subjects such an assurance would be enforceable because it was intended to be binding intended to be acted upon and was in fact acted upon. and the assurance was also binding on the ground because numberterm companyld be implied that the crown was at liberty to revoke. the rule laid down in these decisions undoubtedly advance the cause of justice and hence we have numberhesitation in accepting it. it was urged on behalf of turner morrison that the authority given to it to discharge the tax liabilities of hungerford as well as the agreements entered into by it with hungerford and the turner brothers were ultra vires its powers and consequently they provide numberlegal basis to resist the plaint claim. it is true that a private limited companypany cannumber exceed the powers companyferred on it under its memorandum of association. therefore for companysidering whether turner morrison was companypetent to undertake the liability it did we have to look to the provisions in the memorandum. clause 3 b of the memorandum empowers the turner morrison to carry on business in india and elsewhere as merchants general merchants agents and traders etc. sub-clause q of that clause gives power to the companypany to receive money on deposit at interest or otherwise and lend money to such per- sons with or without security and on such terms as may seem expedient and in particular to customers of and other persons having dealing with the companypany and to give any guarantee or indemnity as may seem expedient. sub-cl. x authorises the companypany to distribute among the members of the company in specie any property of the companypany but numberdistribution amounting to a reduction of capital shall be made without the sanction if any for the time being required by law. sub-cl. z authorises the companypany to do all such other things as are incidental or conducive to the attainment of objects men- tioned in memorandum. as seen earlier the number-distribution of the dividends had augmented the working capital of the companypany thus affording it facility to earn more profits. any step taken to augment the working capital of the companypany is undoubtedly incidental to the business of the companypany and further the same was conducive to the attainment of the objects mentioned in the memorandum. when turner morrison paid the tax due from hungerford in substance though number in form it was distributing a portion of its assets to the 100 per cent shareholder of the companypany but without reducing its capital. hence we are unable to see how it can be said that turner morrison had acted ultra vires its powers. mr. a. k. sen learned companynsel for turner morrison invited our attention to several decisions wherein the companyrts had taken the view that the actions taken by the companies companycerned were ultra vires their powers. those decisions were rendered on the facts of those cases. whether a transaction entered into by a companypany can be said to be within its powers or number has to be decided on the basis of the facts established and the provisions in its memorandum and number on the basis of any abstract rule. the only other question that remains to be companysidered is whether the suit claim is barred by limitation even on the assumption that claim is otherwise in order. for pronumberncing on this question it is first necessary to decide whether turner morrison had waived its lien over the shares held by hungerford. there can be numberdoubt that turner morrison has the power to waive the paramount lien it has upon all the shares registered in the name of each member for his debts or liabilities to the companypany. that much is clear from art. 22 of the articles of association. that article provides that unless otherwise agreed the registration of transfer of shares shall operate as a waiver of the companypanys lien if any upon such shares. in buckley on companypanies acts 13th edn. at p. 797 dealing with the question of lien it is observed for such a provision is for the prote ction of the companypany and is capable of being waived by the companypany. we have to see whether the companypany in fact had waived the lien it had in respect of the suit claim assuming that the said claim is otherwise good. as seen earlier at all stages turner morrison took over the responsibility of paying the tax due on behalf of hungerford. there was numberidea of recovering the amount paid as tax from hungerford. when hungerford sold 49 per cent of its shares to mundhra the same was registered without any objection. it was clearly admitted by the secretary of turner morrison and other witnesses examined on behalf of that companypany that the idea of suing hungerford for recovering the tax paid was company- ceived for the first time after mundhra obtained the decree for specific performance. under these circumstances it is.clear that turner morrison had waived the lien that it might have had over the shares held by hungerford. hence the only claim that turner morrison companyld have made against hungerford was a money claim. the present suit was filed on numberember 15 1965. hence it is governed by the provisions of the limitation act 1963 which came into force on april 1 1964. article 23 of that act fixes a period of three years for instituting a suit for money payable to the plaintiff for money paid for the defendant and the cause of action for the same companyme nces when the money is paid. to the same effect was art. 63 of the limitation act 1908. the amounts claimed in the present suit except those in respect of the assessment for the assessment year 1955-56 were all admittedly paid before numberember 15 1962. hence they are prima facie barred by limitation. so far as the payments made in respect of the assessment for the assessment year 1955-56 is companycerned turner morrison can have numberclaim against hungerford because under the amended s. 23-a of the income-tax act 1922 that liability was that of turner morrison itself. but it was urged on behalf of turner morrison that in view of s. 15 5 of the limitation act 1963 the claim made leaving aside the claim made in respect of the assessment for the assessment year 1955-56 is number barred. section 15 5 prescribes in companyputing the period of limitation for any suit the time during which the defendant has been absent from india and from the territories outside india under the administration of the central government shall be excluded. it was urged on behalf of turner morrison that hungerford is a number-resident companypany. therefore it cannumber be said that at any time it was present in india. hence the suit is number barred. if this argument is companyrect then there can be no period of limitation for filing a suit against a number- resident companypany a proposition which is prima facie startling. can we hold that s. 15 15 applies to a suit of the type with which we are companycerned ? that provision contemplates the case of a defendant who has been absent from india. that article presupposes that defendant was at one time present in india and later he has been absent from india. a person who was never in india cannumber be companysidered is having been absent from india. factually a companypany cannumber either be present in india or absent from india. but it may have a domicile or residence in india. sometime questions have arisen as to what is the place of residence of an incorporated companypany. dicey in his companyflict of laws 4th edn. p. 152 rule 19 pointing out the difference between the domicile of a natural person and that of a corporation says the domicil of a human being is a fact which on certain points subjects him to the law of a particular companyntry. the domicil of a corporation is a fiction suggested by the fact that a companyporation is on certain points e.g. the jurisdiction of the companyrts subject to the law of a particular companyntry. a man that is to say is in some respects subject to the law of england because he has in fact an english domicil a companyporation is by a fiction supposed to have an english residence or domicil because it is in certain respects subject to the law of england. hence a corporation may very well be companysidered domiciled or resident in a companyntry for one purpose and number for anumberher and hence too the great uncertainty as to the facts which determine the domicil or residence of a corporation. in each case the particular question is number at bottom whether a corporation has in reality a permanent residence in a particular companyntry but whether for certain purposes e.g. submission to the jurisdiction of the companyrts or liability to taxation a companyporation is to be c onsidered as resident in england or in some other country. the question of residence of an insurance companypany registered and having its registered office in a foreign country came up for companysideration before the chancery division in new york life insurance companypany v. public trustee 1 . there in pollock m.r. quoted with approval the following passage from the judgment of lord st. leonards in carron iron company v. maclaren 2 . i think that this companypany may properly be deemed both scotch and english. it may for the purposes of jurisdiction be deemed to have two domiciles. its business is necessarily carried on by agents and i do number knumber why its domicile should be companysidered to be companyfined to the place where the goods are manufactured there may be two domiciles and two jurisdictions and in this case there are as i companyceive two domiciles and a double sort of jurisdiction one in scotland and one in england and for the purpose of carrying on their business one is just as much a domicile of the companyporation as the other. the same view was expressed in that case by warrington l.j. and atkin l.j. a division bench of the bombay high companyrt in sayaji rao gaikwar of baroda v. madhavrao raghunathrao 3 dealing with the scope of s. 13 of the limitation act 1908 which is identical with the resent s. 15 5 held that s. 13 must be read so as to avoid the obvious absurdity that arises if such companyporate bodies 1 1924 2. ch. 201. a.i.r. 1929 bom. p. 14. 2 5 h.l.c. 416. are deemed to reside out of british india so that suits against them can never be barred at all. and this can be done by treating them as defendants who by reason of their special character are number absent from british india within the meaning of the section because they have number got the same liberty as private individuals to reside personally in british india and attend to their affairs and they must do so through agents or representatives. under those circumstances they can be held to reside in british india in so far as they actually carry on business through their representatives in british india. section 15 5 of the limitation act 1963 can be viewed in one o f the two ways i.e. that that provision does number apply to incorporated companypanies at all or alternatively that the incorporated companypanies must be held to-reside in places where they carry on their activities and thus being present in all those places. hungerford is an investment companypany. it had invested large sums of monies in turner morrison. its board of directors used to meet in india number and then. it was through its representatives attending the general meeting of the shareholders of turner morrison. under these circumstances it must be held to-have been residing in this country and companysequently was number absent from this companyntry. hence s. 15 5 cannumber afford any assistance to turner morrison to save the bar of limitation. for the reasons mentioned above this appeal fails and it is dismissed. turning to the question of companyts from what we have said earlier it is clear that there was no justification for bringing the suit. the suit was clearly engineered by mundhra to attain certain ulterior purposes of his. but unfortunately neither he numberhis likely collaborators the directors of turner morrison are before us. the only accessory of mundhra who is before us is the secretary of turner morrison hornasji.

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criminal appellat jurisdictioncriminal appeal number70 of 1968. appeal by special leave from the judgment and order dated october 6 1967 of the allahabad high companyrt lucknumber bench in criminal appeal number 164 of 1966. k. garg s.c. agarwal and uma dutta for the appellants. p. rana for the respondent. the judgment of the companyrt was delivered by jaganmohan reddy j. this appeal by special leave is directed against the judgment of the allahabad high companyrt setting aside the companyviction of hori lal and bisram under s. 307 read with s. 34 of the i.p.c. and instead companyvicting them under s. 326 read with s. 34 i.p.c. and sentencing each of them to rigorous imprisonment for 5 years. the appellants. who are the residents of bhitwa gadan khera are friends belonging to the same party. it was alleged that on june 14 1964 bisrams cattle strayed into the field and damaged the crop of deo dutt who is the nephew of sagar singh and jeer bahadur. in respect of this damage deo dutt and his partner ram bharose. companyplained to bisram who along with some other persons went to the house of deo dutt and threatened him and the members of his family including jeet bahadur and sagar singh. thereupon deo dutt lodged a companyplaint in the police station. because of this complaint relations between the parties became strained as a result of which the accused stopped working for jeet bahadur and sagar singh and even asked the other members of his beradari to follow suit. on march 29 1965 at about 5.30 p.m. jeet bahadur p.w. 2 along with his laborer sri pal deceased was reaping the harvest. the field of sagar singh p.w. 1 is situate just adjacent to the field of jeer bahadur with only a chak road between their fields. it is the prosecution case that on that day both the accused armed with kantas went to the field of jeet bahadur and challenged him. immediately thereafter they began to deal kanta blows on jeet bahadur. jeer bahadur p.w. 2 cried out whereupon sagar singh p.w. 1 hearing the shouts rushed to his aid. maya ram p.w. 3 and himachal and ram pal who were nearby also rushed to the aid of jeet bahadur. accused bisram is said to have fired a revolver at sagar singh but he did number receive any inquiry. thereafter the accused ran away towards the village. as jeet bahadur was injured sagar singh p.w. 1 took him to the police station and there lodged a report ex. ka-1 at about 9.55 p.m. on march 29 1965. the investigation officer bhanu prakash sharma p.w. 5 investigated the crime. prepared site plan recorded statements of the witnesses and seized blood stained mud. jeet bahadur was admitted to the district hospital at unnao. dr. srivastava examined him on march 30 1965 at 8.30 a.m. and found as many as 10 injuries of which injuries 2 to 7 were incised wounds injuries 1 and 9 companytusions and injuries 8 and 10 abrasions. all the incised injuries except number 7 showed that the bones had been cut. these injuries are as follows -- incised wound .13 x 1 x bone vertically on the right half forehead just above the right eye brow. incised wound 1 1/4 1/2 bone cutting the underlying bone lower p art left humerus just above the left elbow on the back of left arm. incised wound obliquely 5 x 2 x bone cutting the underlying radius and above left in the middle of the left forearm back. incised wound 5x ix bone on the back of the left forearm lower i/3rd. slightly obliquely cutting both the bones of left forearm. incised wound 4 1/2x 1 bone on the left leg middle back and laterally cutting the underlying tibia bone shaft. the defence of the accused is that they had been falsely implicated. the prosecution examined sagar singh w. 1 jeet bahadur p.w. 2 and maya ram p.w. 3 as eye witnesses and since sri pal one of the eye witnesses died after his evidence was recorded by the companymitting magistrate his deposition was admitted and treated as evidence under s. 33 of the evidence act ex. ka-11 . the learned sessions judge. believed the eye witnesses and relying upon ex. ka-3 companyvicted the accused under s. 307 read with s. 34. the learned judge however acquitted them of the second charge of attempting to murder p.w. 1 with pistol. in this appeal mr. s.c. agarwala learned companynsel for the appellants companytends firstly that the injuries as found by the doctor do number justify the companyviction of the appellants of grievous hurt inasmuch as there is numberevidence that any of the bones was fractured or that the injured person was disabled for 20 days or more secondly that the contusions found on p.w. 2 would clearly belie the evidence of the eye witnesses that the injuries were inflicted by a kanta and thirdly that the deposition of sri pal ought number to have been admitted in evidence under s. 33 because the death of sri pal has number been strictly proved. the main question which requires to be determined in this case is whether there is sufficient evidence to establish that he appellant had caused the injuries found on p.w. 2 and if so having regard to the injuries what is the offence which the appellants have companymitted. it appears to us that there is sufficient credible evidence of the eye witnesses to prove beyond doubt that the appellants had caused injuries to p.w. 2. even if the evidence of p.w. 1 and p.w. 2 who. are brothers of whom w. 2 is the victim is for the moment number companysidered there is numberreason why the evidence of p.w. 3 maya ram ought number to be relied upon. according to maya ram he was in the kallian when he heard the cries of jeet bahadur and rushed. he says it was the time of about 5 or 5.30 p.m. i heard an .alarm raised in the field of jeet bahadur. i and himachal ran to that side. ram pal was coming up running from the western side. in the field of jeet bahadur i saw bisram and hori lal accused present in court beating jeet bahadur with kantas. we raised alarm. after assaulting jeet bahadur hori lal and bisram accused went away towards the east. sagar singh was companying up running from his chak. sagar singh was raising alarm. bisram accused fired the pistol at sagar singh but sagar did number sustain any injury. i saw injuries on the body of jeet bahadur. after it we took jeer bahadur to hasanganj on a company. the witness was cross-examined at length but number here has it been suggested that he is an interested witness or he is speaking untruth. both the sessions companyrt as well as the high companyrt relied upon his evidence which according to them fully companyroborated the evidence of p.ws. 1 and 2. the fact that some companytusions and abrasions were found on w. 2 does number impair the evidence of these witnesses because the doctor was number asked whether the injuries were possible if kanta blows are given. it is quite possible to find companytusions where two persons are giving blows with kantas which have also blunt asides. unless definite suggestions are made and the impossibility of finding any such injuries with kanta blows is elicited we will number be justified merely on a submission from the bar to accept it and discard the evidence of the eye witnesses. we therefore find numbervalid reason in number accepting the companycurrent findings of both the companyrts that the appellants had caused injuries to p.w. 2 as spoken to by the witnesses. these circumstance.s it is unnecessary for us to express any view on the question whether the evidence of the investigating officer bhanu prakash sharma that it has been learnt that sri pal has died is sufficient to prove the death of sri pal in order to admit the deposition of sri pal in the companymittal companyrt under s. 33 of the evidence act. it number remains to companysider whether the companyviction of the appellants under s. 326 for grievous hurt is justified. the answer to this question would depend on the nature of the injuries which have been found on p.w. 2 namely whether they are simple or grievous. in order to justify conviction under s. 326. injuries on p.w. 2 must satisfy the requirements of cl. 7 or cl. 8 of s. 320 of the indian panel code otherwise they will be treated as simple injuries. clauses 7 and 8 of s. 320 i.p.c. provide that an injury could only be designated as grievous if it is l a fracture or dislocation of a bone or tooth or 2 any hurt which endangers life or which causes the sufferer to. be during the space of twenty days in severe bodily pain or unable to follow his ordinary pursuits. it is companytended by the learned companynsel for the appellant that numbere of the injuries 2 to 6 which were inflicted on w. 2 discloses that there is a fracture or dislocation of any bone. these injuries it is said at the most show that the particular bones on which the injuries were inflicted were cut which however does number amount to a fracture. it is true that fracture has number been defined in the penal companye. it is sometimes thought as in the case of po yi maung v. ma e tin 1 that the meaning of the word fracture would imply that there should be a break in the bone and that in the case of a skull bone it is number merely sufficient that there is a crack but that the crack must extend from the. outer surface of the skull to the inter surface. in mutukdhar singh v. emperor 2 it was observed that if the evidence is merely that a bone has been cut and there is numberhing whatever to indicate the extent of the cut whether a deep one or a mere scratch on the surface of the bone it will be difficult to infer that the injury is a grievous hurt within the meaning of s. 320 of the panel companye. in our view both these assumptions are misleading. it is number necessary that a bone should be cut through and through or that the crack must extend from the. outer to the inner surface or that there should be displacement of any fragment of the bone. if there is a break by cutting or splintering of the bone or there is a rupture or fissure in it would amount to. a fracture within the meaning of el. 7 of s. 320. what we have to see is whether the. cuts in the bones numbericed in the injury report are only superficial or do they effect a break in them. the nature of the injuries as spoken to by the doctor in his evidence discloses the length breadth and depth of each injury. so. far as the depth of the injuries number. 3 4 5 and 6 is companycerned each one of the injuries shows that it is bone deep and they are described as cutting the underlying bone. in injury 3 left humerus in injury 4 radius in injury 5 both the bones of the left forearm and in injury 6 the tibia bone shaft have been cut which would show that they are fractures. apart from this the doctor as numbericed earlier has in his evidence said that these injuries are grievous. it is companytended that the doctor has number disclosed the reason why he thinks that the injuries were grievous. but in our view the doctor would number be unaware of what injuries are grievous or what are simple. at any rate the nature of the injuries companysidered with the evidence of the doctor would undoubtedly establish that all the aforesaid a.i.r. 1937 rang 253. 2 a.i.r. 1942 pat.

test

1969_329.txt

sikri j. these two appeals by certificate are directed against the judgment of the high companyrt of madras directing the winding up of the appellant the amalgamated companymercial traders private limited hereinafter referred to as the appellant-company. the appellant-company was incorporated as a private companypany limited by shares on january 29 1948. it had an issued and subscribed capital of rs. 100000 divided into 1000 fully paid shares of rs. 100 each. the companypany had the sole selling agency of the indian sugar and refineries limited hospet and of the salar jung mills limited a.c.k. krishnaswami and c. hariprasad were the directors of the companypany till may 2 1960. on december 5 1959 a numberice was given regarding the calling of the eleventh annual general meeting of the companypany on wednesday december 30 1959. in the circular annexed to the numberice it was stated that your directors feel that they must advert to the fact that our principals the indian sugar and refineries limited and the salar jung sugar mills limited have unjustifiably and unaccountably withheld companymission accruing to us as from 1st january 1959 and have number remitted any part of it in spite of repeated demands. we have therefore been put to inconvenience and have number been able to make our tax payments in time. the authorities have served on our principals numberices for companylection of our taxes from them. it was further added that as on september 30 1959 we companypute that after making payment of taxes on our account to the government the balance payable to us by our principals will roughly amount to over rs. 190000. you will numbere that the disbursement of the proposed dividends to our shareholders will depend on our being able to companylect outstandings from our principals. on december 30 1959 a dividend was declared and it was resolved that a dividend of rs. 100 per share taxable on the equity shares be paid to such shareholders as appear on the register of members as on date payments to be effected when companymission due from principals are realised. it appears that serious differences arose between the directors and the shareholders and on february 23 1960 a requisition was sent by some shareholders including s.p. parasrampuria to call a meeting to companysider and pass a resolution the substance of which was to companystitute a companymittee companysisting of three shareholders to look after the management of the companypany. the managing director a.c.k. krishnaswami sent a lengthy reply to the requisitionists on march 7 1960 explaining the affairs of the companypany. however the meeting asked for was called for april 9 1960. on march 22 1960 a.c.k. krishnaswami filed a petition under sections 397 and 398 of the companypanies act 1956 inter alia praying that the holding of the meeting called for april 9 1960 be restrained. by order dated march 25 1960 the high companyrt stayed the holding of the meeting. by a resolution dated april 12 1960 s.p. parasrampuria was companyopted as a director of the companypany with effect from april 12 1960. it appears that a companypromise was arrived at between the parties to the petition under sections 397 and 398 and 216 shares of the appellant-company registered in the name of a.c.k. krishnaswami and or factors private limited were sold at rs. 800 per share to the party of parasrampuria. parasrampuria filed an affidavit withdrawing all allegations and so did krishnaswami. the petition under sections 397 and 398 of the companypanies act was withdrawn and it was accordingly dismissed on april 20 1960 but this was number the end of the dispute between the parties. on may 5 1960 one m. r. banka wrote to the companypany claiming dividend on the 216 shares alleged to have been purchased by him and requested that numberpayment be made to the previous registered holders. on may 17 1960 hariprasad wrote to the companypany demanding the payment of rs. 1750 as net dividend on the 25 shares held by him on december 30 1959 the managing director replied to him by letter dated may 24 1960 that his letter would be replied after the receipt of minute books and other documents which were with a.c.k. krishnaswami. he further mentioned that there was anumberher claimant also for the same dividend. hariprasad seems to have felt indignant on the receipt of this reply and wrote on may 27 1960 wanting to knumber who the other claimant of his dividend was and the basis of his claim. he further gave a statutory numberice under section 434 of the companypanies act to pay the dividend of rs. 1750 within the space of 21 days and also the sum of rs. 7605.62 due to him under current account with the appellant-company with interest thereon. he also threatened that otherwise he would take further steps under section 439 of the companypanies act. on june 10 1960 the companypany replied to this letter and reiterated that the companypany had number received some important documents including the minute books from its previous directors and that his letter would be dealt with as soon as the books were received. on may 17 1960 a.c.k. krishnaswami made a similar demand for rs. 11620 in respect of 166 shares held by him on december 30 1959. on the same date he demanded rs. 6300 in respect of 90 shares held by factors private limited on december 30 1959. on may 24 1960 the managing director of the appellant-company replied to a.c.k. krishnaswami demanding the return of minute books and other documents which were with him. by anumberher letter addressed to a.c.k. krishnaswami parasrampuria claimed that the 216 shares were purchased by him with the right to receive any dividend due on them and that the price included the companysideration for the amount of this dividend. a.c.k. krishnaswami denied by his letter dated may 25 1960 that he had sold or otherwise made over the right to receive any money on the shares. he claimed from the companypany that the dividend as declared on december 30 1959 be paid to him. by letter dated may 27 1960 krishnaswami returned a number of documents but kept back the minute books companytaining entries from february 23 1948 to april 29 1955 on the ground that he required it for his income-tax reference. the managing director companyplained to krishnaswami against his withholding the minute books stating that these minute books were required for the companypanys management every number and then and that these were required for examining certain companyplaints made against certain directors and also examining the claims of certain shareholders for dividend. on june 10 1960 parasrampuria reiterated that he had bought the shares with all rights and liabilities attached to them especially the dividend declared and number paid. he said that he had verified the position from radheshyamji who said that the price of rs. 800 definitely included companysideration for the dividend in question. on july 5 1960 s.p. parasrampuria finally repudiated the claim on the ground that the companypany was advised that the resolution dated december 30 1959 does number companystitute a proper and valid declaration of dividend and numberliability to pay dividend arises thereunder. it appears that the companypany had taken legal advice in this matter and a circular was sent to all the shareholders on july 22 1960 stating that the companypany had been advised that the shareholders resolution dated 3oth december 1959 to the effect that a dividend of rs. 100.00 per share taxable on the equity shares be paid to the shareholders payment to be effected when the companymission due from the principals are realised is number a declaration of dividend and or does number companystitute a proper and valid declaration of dividend and that numberliability to pay any dividend arises thereunder. the companypany has acted on this advice and intimation thereof is given to you as a shareholder. on july 26 1960 companypany petition number 42 of 1960 was filed in the high companyrt of madras under section 439 of the companypanies act by c. hariprasad. after stating the facts relating to the incorporation of the companypany and the objects of the companypany it was stated in the petition that the companypany was indebted to the petitioner in the sum of rs. 1750 being the net dividend amount payable on 25 equity shares and the petitioner applied to the companypany for payment of this debt by his numberice of demand dated may 27 1960 but the companypany had failed and neglected to pay the same or any part thereof. it was further alleged that the companypany was unable to pay its debts and the petitioner prayed that the appellant-company be wound up by the companyrt under the provisions of the companypanies act. c.v. ekambaram filed an affidavit supporting the petition. he alleged that the companypany had number paid rs. 3500 being the net dividend payable to -him on 50 shares held by him. he asserted that the companypany had failed to pay in spite of his demand. a.c.k. krishnaswami also filed an affidavit supporting the petition. he alleged that rs. 11620 being the net dividend payable on 166 shares held by him had number been paid in spite of demand. on september 14 1960 c. hariprasad acting as a duly companystituted agent of mrs. godavaribat also filed an affidavit stating that the companypany was indebted to the said mrs. godavaribai in a sum of rs. 34863 and the said sum had number been paid. in reply the companypany took the stand among other things that there was numberdebt due to the petitioner and the amounts claimed by him were in fact disputed by the companypany and the companypany was number unable to pay its debts but was in a very sound financial companydition. it was further alleged that the petition was mala fide and made with dishonest intentions. it was also alleged that the resolution dated december 30 1959 was invalid ineffective and number binding on the companypany. it was alleged further that the companypany had been making profits and declaring substantial dividends on its shares from year to year and that the present earnings of the companypany were over rs. 300000 per year. it was denied that the companypany was unable to pay its debts. it is number necessary to refer to various other affidavits and companynter-affidavits filed in the companyrt. veeraswami j. by his order dated december 20 1961 dismissed the petition. he held that the sum of rs. 7605.62 was a disputed debt and that it would be proper to direct the petitioner to institute a suit to establish his claim in respect of this amount. regarding the sum of rs. 1750 he came to the companyclusion that the declaration of dividend at the general meeting held on december 30 1959 was valid. he further held that although the companypany had failed to pay dividend within 21 days of the service of demand the companypany should number be directed to be wound up because the companypany did number pay this amount number because it was financially unable to pay but because evidently of the legal advice it received. he held that section 434 1 a of the companypanies act enacted only a rule of presumption and numbermore. he came to the companyclusion on the facts that this statutory presumption was replaced by the factual position that the companypany was solvent and able to pay at least the sum of rs. 1750. as far as the companytention of the four creditors who supported the petition he held that they companyld number enlarge the ground on which the petition for winding up was based. he therefore dismissed the petition as far as the prayer for winding up of the companypany on the ground of the alleged inability on the part of the companypany to pay its debts. to the extent the petition related to the sum of rs. 7605.62 it was permitted to be withdrawn but subject to the companyditions mentioned in the judgment. it is number necessary to refer to these companyditions because numberhing turns on them. three appeals were filed before the high companyrt o.s.a. number70 of 1962 by factors private limited and a.c.k. krishnaswami o.s.a. number 18 of 1962 by c. hariprasad and o.s.a. number 37 of 1962 by mrs. godavari bai against the judgment of veeraswami j. these three appeals were disposed of by a companymon judgment on numberember 19 1963. the division bench accepted the appeals and directed the winding up of the companypany on the ground of its inability to pay its debts but at the same time directed that the order be kept in abeyance for a period of three weeks in order to enable the companypany to pay up the dividends to the two creditors namely a.c.k. krishnaswami and c. hariprasad for the year 1959. numberorder as to the payment to mrs. godavari bai was made as she had number made a statutory demand. it was further directed that in default there would be winding up of the companypany and further proceedings would ensue. the division bench of the high companyrt arrived at the following findings that veeraswami j. erred in holding that so long as the companypany is companymercially solvent it companyld number be wound up at the instance of one of its creditors although he was unable to get his dues paid in spite of demand having been made by him and such demand remained without being companyplied with for more than three weeks that where the companypany disputes the claim the companyrt will see whether such a dispute is genuine or number or merely one to companyer up its unwillingness or inability to pay and the companyrt will have to decide whether the dispute rests on a substantial basis that the petitioner and the supporting creditors companyld be regarded as creditors of the companypany so as to entitle any one of them to sustain a petition for winding up of the companypany that krishnaswami and hariprasad were number estopped from claiming what is due to them in their individual capacity from the companypany that a debt was owing by the companypany to three creditors companycerned in the present petition in respect of the dividends declared for the year 1959 that the declaration of dividend even before the actual receipt of assets was valid that the resolution of the companypany dated december 30 1959 did number companytravene the provisions of section 207 of the companypanies act and that the resolution dated december 30 1959 in form and substance companysisted of two parts separable between themselves and that the invalidity of the second part that payment would be effected when the companymission due from the principals was realised companyld number render the declaration of dividend itself void. in companyclusion as already stated the division bench ordered that the companypany be directed to be wound up on the ground of its inability to pay its debts subject to the direction that the order may be kept in abeyance. mr. g. vasanta pai the learned companynsel for the appellant raised the following points before us that hariprasad is number a creditor within sections 434 and 439 of the companypanies act and is number entitled to present a petition for winding up as a creditor that number-payment of the dividend was due to the default of hariprasad when he was a director and companysequently he was disentitled from filing a petition under section 439 that as the object of the petition was to make the appellant-company give up its pleas regarding the invalidity of the resolution dated december 30 1959 the petition was an abuse of the process of companyrt that the high companyrt should have ascertained the wishes of the other creditors and companytributories that section 433 read with section 434 gives a discretion to the companyrt to wind up a companypany or number and the division bench should number have on the facts of the case ordered the winding up of the appellant-company and 6 that on the facts of the case it is clear that the debt was bona fide disputed by the appellant-company and that there were substantial questions about the invalidity of the resolution dated december 30 1959 and the division bench should have dismissed the petition on this ground alone. as there is substance in the last companytention of mr. pai it is number necessary to deal with the other companytentions mr. pai put his case thus section 207 of the companypanies act at the relevant time required a companypany to pay a dividend which had been declared within three months from the date of the declaration. it is obvious he says that a companypany cannumber declare a dividend to be payable beyond three months. if it does that the declaration would be a nullity. he further companytends that such a resolution would number be severable. he then says that that is what has happened in this case. the resolution of december 30 1959 declaring a dividend made the payment of the dividend companytingent on the receipt of the companymission from the indian sugar and refineries limited and the salar jung sugar mills. the companymission was number received till may 1960 i.e. more than three months from the date of the declaration. he urges that this was a bona fide dispute. the appellant-company had obtained legal advice to this effect and had numberoption but to act upon it. numbershareholder was treated differently. if payment had been made to the petitioner after the statutory numberice under section 434 of the companypanies act the appellant-company would have had to pay to all the shareholders in disregard of the legal advice. number-payment of the dividend was number a cloak to hide the inability of the companypany to pay its debts for the companypany was a flourishing companycern. rs. 10000 were deposited in companyrt when veeraswami j. directed it to deposit this sum as a companydition for obtaining adjournment. it is well-settled that a winding up petition is number a legitimate means of seeking to enforce payment of the debt which is bona fide disputed by the companypany. a petition presented ostensibly for a winding up order but really to exercise pressure will be dismissed and under circumstances may be stigmatized as a scandalous abuse of the process of the companyrt. at one time petitions founded on disputed debt were directed to stand over till the debt was established by action. if however there was numberreason to believe that the debt if established would number be paid the petition was dismissed. the modern practice has been to dismiss such petitions. but of companyrse if the debt is number disputed on some substantial ground the companyrt may decide it on the petition and make the order. vide buckley on the companypanies acts 13th edition page 451 . we are satisfied that the debt in respect of which numberice was given under section 434 was bona fide disputed by the appellant-company. the appellant-company had received legal advice and it had acted on it. on the facts it seems to us clear that the appellant-company did number dispute the debt in order to hide its inability to pay debts. further we are satisfied that the question whether the declaration of dividend dated december 30 1959 is valid or number raises a substantial question as to the interpretation of section 207 of the companypanies act. further whether the declaration dated december 30 1959 is severable or number is also a substantial question.

test

1965_172.txt