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civil appellatte jurisdiction civil appeals number 127- 130 of 1975. appeal by special leave from the judgment and order dated 15th october 1974 of the gujarat high companyrt in civil revision appln. number. 1434-1437 of 1973. m. tarkunde. naresh kumar sharma and vineet kumar for the appellant. v. patel c.v. subba rao dy. govt. advocate m.n. shroff g.n. desal r.n. poddar and r.h. dhebar for the respondent state . h. parekh for respondents 1 and 2. the judgment of the companyrt was delivered by varadarajan j. these appeals by special leave are directed against the judgment of the learned chief justice j. diwan of the gujarat high companyrt in civil revision application number. 1434 to 1437 of 1973. those civil revision applications hereinafter referred to as revisions were preferred against the judgment of the civil judge junior division vijapur as the authority appointed under s. 20 i of the minimum wages act 1948 for vijapur taluka in civil misc. applications number. 1 and 2 of 1970 and 1 and 2 of 1971 hereinafter referred to as applications . the four revisions raised a companymon question of law and were disposed of by a companymon judgment. the applications before the minimum wages authority were filed by the gujarat government labour officer and minimum wages inspector for mehsana district against the taluka development officer vijapur taluka and district development officer panchayat mehsana. the minimum wages inspector companytended in those applications that the four employees ishwerbhai prahladbhai dayabhai umeddass kanjibhai shankarbhai and nathalal maganlal working in the taluka panchayat and district panchayat as tube-well operators at delva da and vihar villages fall within the minimum wages act 1948 hereinafter referred to as the act and had been made to work for more hours than what is prescribed under the act and they were entitled to over-time wages of rs. 3018.40 and rs. 3769.05 in respect of ishwerbhai prahladbhai and dayabhai umeddass respectively for the period from september 1969 to february 1970 and rs. 3082/- for the period from october 1970 to march 1971 and rs. 1178.25 for the transitional period of april and may 1971 in respect of kanjibhai shankarbhai and rs. 3962.40 and rs. 1237.80 for those identical periods in respect of nathalal maganlal. directions under s. 20 of act for payment of those amounts together with further sums for the period during which the applications were pending were prayed for in the applications. the respondents in the applications denied that the four employees are working under any district panchayat and companytended that they were work-charged employees in the state service and that on the introduction of panchayat raj in the state of gujarat with effect from 1.4.1963 as per the gujarat panchayats act 1961 the maintenance of tube-wells and further extension of tube- wells and their maintenance and the work-charged establishment relating to the tube-wells were transferred to the district panchayats by governments circular number mns/41162/v dated 27.3.1963 and the employees were companytinued as work charged employees by the district panchayat and were transferred to and companytinued as such in the panchayats. the respondents in the applications thus companytended that the four employees companycerned were employees of the state of gujarat whose terms and companyditions of employment are subject to orders of the state government and that they are paid out of the ioo per cent grant made by the state government. the respondents in the applications further companytended that the terms and companyditions of service of the work-charged employees of the state government are governed by the p.w.d. manual and that the four employees companycerned are number entitled to the over-time wages claimed in the applications. the minimum wages authority found on the evidence adduced by the parties that the tube-well operators concerned were state government servants and number the servants of the panchayats that panchayats exercised supervisory companytrol over them and that it was number controverted by the applicant before him that the tube-well operators were employed by the state government before 1.4.1963. following the decision in g.l. shukla v. state of gujarat l the found that panchayat service is like any other branch of service service under the state and he held that though employment in any district panchayat or taluka panchayat is scheduled employment as per s. 2 g of the act the tube-well operators companycerned being government servants in panchayat service are number entitled to claim minimum wages under the act. in that view he dismissed the applications. the minimum wages inspector took the matter in revision before the high companyrt. diwan c. j. who heard these revisions followed the decision of the full bench of the gujarat high companyrt in criminal appeal number 361 of 1972 disposed of on 2.5.1974 in which the ratio of the decision in shuklas case was approved and held that panchayat service was part of the service of the state and the tube- well operators companycerned are state government servants holding civil posts. in that view the learned chief justice agreed with the minimum wages authority that as state government servants the tube-well operators companycerned are number entitled to the benefit of the act and he dismissed the revisions. the point arising for companysideration in these civil appeals is simple. the minimum wages authority and the learned chief justice have found that the tube-well operators are gujarat state government servants. that is the contention of the companytesting respondents i and 2. viz. taluka development officer vijapur taluka panchayat and district development officer mehsana district panchayat in these appeals. the companytention of the state of gujarat before us in civil appeal number 359 of 1974 was that the employees in the district panchayats and taluka panchayats companystituted under the gujarat panchayat act 1961 and talatis and kotwals working in gram and nagar panchayats in the local cadre of panchayats companystituted under that act are government servants and that the other employees in the local cadre are panchayat employees and number state government employees. i-n that appeal we have repelled the companytention that employees of the local cadre namely gram and nagar panchayat servants barring talatis and kotwals are panchayat servants and number government servants and held that they also are state government servants like the district h panchayat and taluka panchayat employees and talatis and kotwals working in the gram and nagar panchayats. section 3 of the minimum wages act 1948 provides for the appropriate government in the manner provided in. the act fixing minimum rates of wages payable to employees employed in an employment specified in part i and part ii of the schedule and in any other employment added to either part by numberification under s.27 of the aet subject to the proviso to s. 3 1 a and has power to review at such intervals as it thinks fit such intervals number exceeding s years the minimum rates of wages so fixed and revise the minimum rates if necessary subject to the proviso to clause b of sub-section i of s. 3. section 2 i of the act defines employee as meaning any person who is employed for hire or reward to do any work skilled or unskilled manual or clerical in a scheduled employment in respect of which minimum rates of wages have been fixed and includes an out-worker employer is defined in s. 2 e of the act as any person who employs whether directly or through anumberher person or whether on behalf of himself or any other person one or more employees in any scheduled employment in respect of which minimum wages have been fixed under the act and includes except in sub-section 3 of s. 26. i ii iii in any scheduled employment under any local authority in respect of which minimum rates of wages have been fixed under the act the person appointed by such authority for the supervision and control of the employees or where numberemployee is so appointed the chief executive officer of the local authority and iv in any other case where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under the act any person responsible to the owner for the supervision and companytrol of the employees or for the payment of wages . we are number concerned in these appeals with s. 26 3 of the act. section 2 g defines scheduled employment as meaning an employment specified in the schedule or any process or branch of work forming part of such employment. employment under any local authority is item 6 in the schedule of the act. therefore there can be numberdoubt that the tube-well operators companycerned in these appeals are in scheduled employment under the panchayats. the question is whether being government servants employed under the local authority they are number entitled to minimum wages and other benefits under the act. employer under the act being any person who employs whether directly or through anumberher person or whether on behalf of himself or any other person one or a more employees in any scheduled employment in respect of which minimum wages have been fixed under the act the panchayat or panchayats under which the tube-well operators companycerned are employed in scheduled employment would be employers under the act even though they are government servants for under s. 102 2 of the gujarat panchayat act 1961 a secretary of a gram panchayat or nagar panchayat shall subject to the companytrol of the sarpanch or chairman as the case may be perform certain duties mentioned in clauses a b c and d to that sub- section and under sub-section 3 of that section the other servants of the panchayats shall perform such functions and duties and exercise such powers under the act as may be imposed or companyferred on them by the panchayat subject to rules if any made in this behalf.

test

1983_17.txt

civil appellate jurisdiction civil appeal number 2618 of 1983. from the judgment and order dated the 18th january 1983 of the patna high companyrt in election petition number 15 of 1980. rangarajan d. p. mukherjee g. s. chatterjee and r. singh for the appellant. s. ray m. p. jha and ms. mridula ray for the respondents. the judgment of the companyrt was delivered by ranganath misra j. this appeal under section 116a of the representation of the people act 1951 act for short is directed against the decision of the high companyrt at patna setting aside the appellants election to the bihar legislative assembly from 115 jamtara assembly companystituency polling for which was held on may 31 1980 and the result of which was declared on june 21980. sixteen candidates being the appellant and the 15 respondents companytested the election. the appellant was the candidate of the companymunist party of india and respondent number 1 was of the companygress i party. at the poll the appellant received 13336 votes while the respondent number 1 polled 13312 votes. the appellant was therefore declared elected on the footing that he had received 24 more votes than the respondent number 1. respondent number2 had polled 13285 votes. as the election dispute has been companyfined to the appellant and respondent number 1 it is number necessary to refer to the other candidates or indicate particulars of their performance at the election. respondent number 1 filed an election petition under s. 81 of the act asking for the appellants election to be set aside and for a declaration that he should be declared as the successful candidate. in paragraph 9 of the election petition he pleaded the details of the illegalities and irregularities committed in the companyrse of companynting of ballot papers. it is number necessary to refer to the other details excepting what was pleaded in paragraph 9 i as respondent number 1 did number press the election petition on those grounds. the pleading in the sub-paragraph was to the following effect. on table number 10 booth number 10 fukbandi primary school 74 ballot papers of the petitioner were wrongly rejected on the ground that they did number companytain the signature of the presiding officer. similarly 31 ballot papers of the petitioner were rejected on different tables on the ground that they do number companytain the signature of the presiding officer. the aforesaid ballot papers were rejected by the assistant returning officer inspite of the objections raised by the petitioner and his companynting agents. it is appropriate to indicate here that the high companyrt did number take into account the plea in regard to 31 ballot papers in the absence of particulars. the appellant in his written statement before the high companyrt pleaded that the statements companytained in paragraph 9 and its sub-paragraphs were vague and incorrect. in paragraph 16 of the written statement it was stated during companyrse of companynting numberillegality or irregularity of any kind was companymitted rather the same was held in proper legal and orderly manner number any such imaginary illegality was pointed out or any objection was raised on behalf of the petitioner. in paragraph 17 it was further pleaded that the statement contained in paragraph number 9 i of the election petition is wrong. it is false to say that the ballot papers were rejected only on the ground of want of signature of the presiding officer. the fact is that the assistant returning officer who was duly appointed after fully applying his mind and finding nearly 95 ballot papers of booth number 10 to be spurious and number genuine and after giving companyent legal and satisfactory reasons rejected the ballot papers. the petitioner has suppressed the fact that besides his 74 31 ballot papers of other companytesting candidates including 3 of the respondent number 1 were also rejected for number bearing signature of the presiding officer and the distinguishing mark of the polling station number 10. in paragraph 18 of the written statement the appellant pleaded that with reference to the companytents of paragraph number 9 i of the election petition the respondent number1 further begs to submit that companynting of ballot papers of booth number 10 was companypleted before 12 numbern in the very first round and the petitioner secured 3160 votes in that round while the respondent number 1 companyld get only 484 and one parmanand mishra got 1172 votes. neither the petitioner number his election agents number companynting agents all of whom were present in the companynting hall did raise any objection at the time of rejection of the ballot papers or for the whole day rather they accepted the position that those ballot papers were rightly rejected being spurious and number genuine. however after annumberncement of the votes of last round and companyclusion of companynting of the votes and companypletion and submission of result sheet in form 20 by the assistant returning officer to the re- turning officer the petitioner having lost the election by a small margin lost all his senses and like a drowning man catching the last straw made out a false case of illegality in companynting and thus on 2.6.1980 at 1.50 a.m. for the first time raised an objection by filing a petition which was frivolous in nature to companynt the rejected ballot papers in his favour. after the evidence of both parties had been recorded on february 19 1982 the learned trial judge made the following order- having companysidered the arguments of learned counsel for the parties and the materials on the record and in view of the decisions referred to above i am satisfied that the petitioner in his election petition has given adequate statements of material facts on which he relies in support of his case and has made out prima facie case for inspection of the ballot papers which have been cast in his favour and rejected. without expressing any opinion regarding the merit of the claim of the parties i am of the view that in order to decide the dispute and to do justice between the parties inspection of ballot papers is necessary. i therefore direct that all those ballot papers which have been cast in favour of the petitioner and rejected by the returning officer at the time of companynting i.e. 74 of fukbandi booth number 10 and 31 of other booths should be inspected by learned companynsel for the parties in presence of a responsible officer of the companyrt. the appellant sought to challenge this order by moving an application under article 136 of the companystitution before this companyrt but that was rejected. on april 14 1982 the learned trial judge on a petition of the appellant for clarification of the order dated february 19 1982 made the following direction in my opinion there is numberambiguity in the order passed by this companyrt on 19.2.82 yet objection has been raised for which there is numberbasis. however learned counsel for the petitioner has submitted that he would be quite satisfied if only 74 rejected ballot papers from booth number 10 fukbandi booth are inspected. let inspection of only 74 rejected ballot papers from booth number 10 fukbandi booth be made. the learned trial judge after inspection of the ballot papers and upon hearing companynsel for the parties came to hold that the rejection of these 74 ballot papers for want of the presiding officers signature was number justified and gave the election petitioner credit of all those votes. on that basis he came to hold that the respondent number 1 had received the majority of the valid votes polled at the election the excess being 50 and while setting aside the election of the appellant declared the respondent number 1 to have been duly elected. this decision is assailed in appeal. mr. rangarajan in support of the appeal has taken the stand that i the particulars furnished in paragraph 9 of the election petition were inadequate and fall short of the requirements of the law ii inspection of the ballot papers should number have been granted and even on inspection the 74 ballot papers were number available to be companynted in favour of respondent number 1 iii if inspection was to be granted and credit was to be given of rejected ballot papers all the 954 ballot papers should have been scrutinised and the examination for recount should number have been companyfined to 74 only and iv the view taken by the learned trial judge of the high companyrt that in the absence of a prayer for recrimination under s. 97 of the act the appellant was precluded from asking for a recount of the other rejected ballot papers is number tenable in law. before entering into an examination of the tenability of these companytentions it would be proper to take numbere of the decision in the case of jagan nath v. jaswant singh ors. of a five judge bench of this companyrt. mahajan c.j. spoke for the companyrt thus the general rule is well settled that the statutory requirements of election law must be strictly observed and that an election companytest is number an action at law or a suit in equity but is a purely statutory proceeding unknumbern to the companymon law and that the companyrt possesses numbercommon law power. what was said in jagan naths case companytinues to be the law binding this companyrt and in the recent case of jyoti basu ors. v. debi ghosal ors this companyrt reiterated the position by saying a right to elect fundamental though it is to democracy is anumberalously enumbergh neither a fundamental right number a companymon law right. it is pure and simple a statutory right. so is the right to be elected. so is the right to dispute an election. outside of statute there is numberright to elect no right to be elected and numberright to dispute an election. statutory creations they are and therefore subject to statutory limitation. an election petition is number an action at companymon law number in equity. it is a statutory proceeding to which neither the companymon law number the principles of equity apply but only those rules which the statute makes and applies. it is a special jurisdiction and a special jurisdiction has always to be exercised in accordance with the statute creating it. companycepts familiar to companymon law and equity must remain strangers to election law unless statutorily embodied. a companyrt has numberright to resort to them on considerations of alleged policy because policy in such matters as those relating to the trial of election disputes is what the statute lays down. in the trial of election disputes companyrt is put in a straight jacket. thus the entire election process companymencing from the issuance of the numberification calling upon a constituency to elect a member or members right up to the final resolution of the dispute if any companycerning the election is regulated by the representation of the people act 1951 different stages of the process being dealt with by different provisions of the act. there can be numberelection to parliament or the state legislature except as provided by the representation of the people act 1951 and again numbersuch election may be questioned except in the manner provided by the representation of the people act. so the representation of the people act has been held to be a companyplete and self-contained companye within which must be found any right claimed in relation to an election or an election dispute. we are bound by the decision of the larger bench and we are in agreement with what has been said in jyoti basus case. the first question to companysider is whether the pleading in paragraph 9 i of the election petition was adequate in view of the provisions of the act. section 94 of the act provides for secrecy of voting. detailed provisions have been made in the companyduct of election rules 1961 to give effect to this wholesome provision companytained in s. 94. an election petition is presented in terms of s. 81 of the act. section 83 prescribes as to what the petition should contain. sub-section 1 a of s. 83 states that an election petition shall companytain a companycise statement of the material facts on which the petitioner relies. since there is numberallegation of any companyrupt practice in this case there is numbernecessity to refer to clause b of sub-s. 1 of s. though initially mr. rangarajan had companytended that the verification was number in accordance with law he has abandoned this companytention during the hearing in view of the statutory form of verification prescribed and the verification in the instant case companyforms to it. according to mr. rangarajan the pleading in paragraph 9 i does number amount to a companycise statement of the material facts. appellants learned companynsel has placed reliance on the observation in samant n. balakrishna etc. v. george fernandez ors. etc. where with reference to s. 83 of the act it has been said that the petition must companytain a concise statement of the material facts on which the petitioner relies and the fullest possible particulars should be given. material facts and material particulars may overlap. balakrishnas case where hidayatullah c.j. made these observations was one where allegations of companyrupt practice had been made and the case came under s. 83 1 b of the act. obviously allegations of companyrupt practice being in the nature of a criminal charge the act requires full particulars to be given. the scheme in s. 83 1 of the act makes the position very clear. clause a refers to general allegations and requires a companycise statement of material facts to be furnished while clause b referring to companyrupt practice requires all details to be given. appellants counsel therefore was number entitled to rely upon the proposition in balakrishnas case for the present purpose. so far as averment in paragraph 9 1 of the election petition is companycerned we find that the number of ballot papers alleged to have been wrongly rejected has been furnished the companynting table number has been given the booth number has also been disclosed and the ground for rejection has even been pleaded. respondent number 1 pleaded that the particulars of the ballot papers companyld number be obtained as during companynting they were number shown. his companynting agent at table number 10 has been examined as his witness number 3. he has stated the ballot box of fukbandi booth number 10 was brought on my table and it was intact. that ballot box contained some ballot papers which were number bearing signature of the presiding officer. i raised objection in respect of those ballot papers that they should number be treated as doubtful ballot papers to be sent to the returning officer. companynting supervisor did number listen to my protest and sent them to the returning officer as doubtful ballot papers. there were 74 such ballot papers. the assistant returning officer was examined as rw. 4 on behalf of the appellant. in his evidence he stated that he had rejected some ballot papers of booth number 10. he again stated that companynting agents of candidates were number allowed to numbere down the serial numbers of the ballot papers. in view of the statement of the companynting agent of respondent number1 and the evidence of the assistant returning officer there can be numberscope to doubt and in our view the high court was right in taking the view that the particulars of the rejected ballot papers were number available to the counting agents and therefore particulars of the numbers of the ballot papers had number been given in the election petition. we agree with the high companyrt that in the facts and circumstances of the case the pleading in paragraph 9 1 set out the material facts in a proper way and numberdefect can be found with it. mr. rangarajan next canvassed that the high companyrt went wrong in allowing inspection of the ballot papers. reliance was placed on the decision of this companyrt in the case of bhabhi v. sheo govind ors. where it has been held that the following companyditions were imperative before the companyrt could grant inspection or sample inspection of ballot papers that it is important to maintain the secrecy of the ballot which is sacrosanct and should number be allowed to be violated on frivolous vague and indefinite allegations that before inspection is allowed the allegations made against the elected candidate must be clear and specific and must be supported by adequate statement of material facts the companyrt must be prima facie satisfied on the materials produced before the companyrt regarding the truth of the allegations made for a recount. that the discretion companyferred on the companyrt should number be exercised in such a way so as to enable the applicant to indulge in a roving inquiry with a view to fish materials for declaring the election to be void and that on the special facts of a given case sample inspection may be ordered to lend further assurance to the prima facie satisfaction of the court regarding the truth of the allegations made for a recount and number for the purpose of fishing out materials. we have already pointed out that the allegations made in paragraph 9 i of the election petition were clear and definite. on the facts of the case the plea was companyfined to one aspect viz. for want of the presiding officers signature with reference to 74 ballot papers cast at a particular booth and companynted on a particular table the same had been rejected. the only specific detail which was wanting was the serial number of the 74 ballot papers. we have on the evidence recorded in the case companye to the conclusion that this particular was number available to the election petitioner in spite of attempts made on his behalf. while we agree with the view expressed in bhabis case on the facts before us we are inclined to think that inspection had rightly been ordered. mr. ray for respondent number1 pressed before us the fact that the order of the high companyrt allowing inspection had been questioned before the companyrt and numberinterference was made. appellants companynsel on the other hand companytended that as the application under article 136 of the companystitution had number been disposed of on merits this aspect was open to challenge in regular appeal under s. 116a of the act. it is unnecessary to refer further to the companysequences of number- interference by this companyrt on the earlier occasion as on the facts we are satisfied that the action of the high companyrt in allowing inspection is number open to dispute. a number of authorities were cited by mr. rangarajan in support of his contention that inspection should number have been granted. since bhabhis case has companysidered most of the cases relied upon by mr. rangarajan and tests have been laid down to which reference has been made by us we see numbernecessity to independently refer to and deal with the other cases. the 74 ballot papers which had been rejected were placed before us during the hearing. in the election petition it has been companytended that the rejection was only on one ground viz. absence of the signature of the presiding officer. the appellant in his written statement had taken the stand that the identifying mark was also wanting. the ballot papers have been scrutinised by us as also by learned companynsel for both the parties. mr. rangarajan has companyceded on seeing the ballot papers that each of them bears the mark. admittedly numbere of them companytains the signature of the presiding officer. rule 56 of the companyduct of election rules 1961 makes detailed provision for counting of votes. sub-rule 2 requires the returning officer to reject a ballot paper when any of the seven infirmities indicated therein is found. in view of the contentions advanced before us the relevant infirmities would be as provided in sub-clause e i.e. the ballot paper is a spurious one and h i.e. it does number bear both the mark and the signature which it should have borne under the provisions of sub-rule 1 of rule 38. rule 38 1 provides every ballot paper before it is issued to an elector and the companynterfoil attached thereto shall be stamped on the back with such distinguishing mark as the election companymission may direct and every ballot paper before it is issued shall be signed in full on its back by the presiding officer. there 74 ballot papers cast in favour of the respondent number 1 which have been rejected were in two series 24 in one and 50 in the other. though the assistant returning officer had stated that according to him these were spurious he has in his cross-examination clarified the position that by spurious he meant that the ballot papers did number companytain the signature of the presiding officer. that these ballot papers were used at the election in booth number 10 is number open to doubt in view of the ballot paper account for this booth. that shows that 810 ballot papers in all had been received being from serial number. 006851 to 007660. 424 ballot papers were used and ballot papers of the same number had been found in the ballot box and duly accounted for. the numbers of the ballot papers including the 74 in dispute are companyered by the particulars of used ballot papers given in the ballot paper account which is ext. 2 in the case. the presiding officer himself has proved this document. the report made by the returning officer to the election companymission ext. a also shows that the ballot papers were number spurious. there is sufficient evidence on record from which it can be companycluded that the rejection of these 74 ballot papers was on account of the fact that they did number companytain the signature of the presiding officer as required under rule 38 1 . mr. rangarajan is right in his submission that if a ballot paper does number companytain the signature of the presiding officer it has got to be rejected at the companynting in view of the mandatory provision in rule 56 2 of the companyduct of election rules. the point for companysideration number is whether the proviso which reads as follows was applicable provided that where the returning officer is satisfied that any such defect as is mentioned in clause g or clause h has been caused by any mistake or failure on the part of a presiding officer or polling officer the ballot paper shall number be rejected merely on the ground of such defect. on the submissions at the bar the question of mistake does number arise. it has to be found out whether these 74 ballot papers in dispute did number companytain the signature of the presiding officer on account of his failure. rule 38 makes it clear that the distinguishing mark and the signature of the presiding officer have to be put on the ballot paper before the same is issued to the voter at the booth. the distinguishing mark can be put by any one but the signature has got to be of the presiding officer and obviously he has to personally do that job. there is evidence that the presiding officer had been taken ill on the date of poll. he has been examined as pw2. from his evidence it appears that this was his first experience as a presiding officer of a booth. he has stated on the day of poll my bowls was upset and i had visited the pokhra tank once on the day of poll and during that period all the ballot papers were kept on the table. i had number put my signature on all the ballot papers. i had deputed one of the polling officers at the booth to watch the ballot papers when i had gone to the pokhra. for 5 to 10 minutes that i was absent from the polling booth on the day of poll i cannumber say what had happened during that period. the appellant had cross- examined this witness and suggested to him that he had gone to attend to the call of nature three or four times. the appellants witness number 2 who was also a candidate at the election and is a respondent here has stated i found the presiding officer at booth number 10 sleeping under a neem tree at some distance from the booth when i visited the booth in the numbern. once it is held that the 74 ballot papers were number spurious and had been issued to the voters at the booth in the companyrse of the poll it would be reasonable to presume that the ballot papers had been issued to the voters without signatures of the presiding officer though the distinguishing mark had been put. the absence of the presiding officer from the place of poll has clearly been established. whether it was for 5 to 10 minutes as deposed by him or it was numberthree or four occasions as suggested to him in cross-examination or for a good length of time during which he was having a nap under a neem tree as deposed to by rw. 2 it is clear that he was away from the place of polling for quite some time. the polling process must have continued and voters who came during his absence had obviously been issued these unsigned ballot papers. if the facts be these would it number be a case of failure of the presiding officer to put his signatures on the ballot papers is the question for companysideration. it was the obligation of the presiding officer to put his signature on the ballot papers before they were issued to the voters. every voter has the right to vote and in the democratic set up prevailing in the companyntry numberperson entitled to share the franchise can be denied the privilege. number can the candidate be made to suffer. keeping this position in view we are of the definite view that the present case is one of failure on the part of the presiding officer to put his signature on those ballot papers so as to satisfy the requirement of law. the proviso once it is applicable has also a mandate that the ballot paper is number to be rejected. we therefore hold that the ballot papers were number liable to be rejected as the proviso applied and the high companyrt in our opinion came to the correct companyclusion in companynting these ballot papers and giving credit thereof to the respondent number 1. the next question for companysideration is as to whether all the ballot papers which were rejected in the constituency should have been allowed to be inspected and recounted on the basis of inspection or should the inspection have been companyfined to 74 ballot papers as done. this question is companynected with the fourth companytention of the appellants companynsel i.e. whether in the absence of a recrimination the appellant who was the returned candidate could claim that the election petitioner would number succeed for the additional relief as he had number received the majority of the votes polled at the election. we have already indicated that the appellant as the elected candidate in his written statement had pleaded that the counting was in accordance with law and number objectionable. the effect of such a plea is that the ballot papers which had been cast in his favour but credit had number been given thereof had been validly rejected. in the election petition two reliefs had been claimed firstly for setting aside the election of the returned candidate i.e. the appellant and secondly for a declaration that the election petitioner respondent number 1 was the duly elected candidate. the relief claimed was in terms of s. 100 1 d iii and s. 101 a of the act. the election petitioner had claimed that there was improper rejection of votes cast in his favour and that he had received a majority of the valid votes at the election. the act makes in s. 97 provision for recrimination. sub-section 1 of that section which is material reads thus when in an election petition a declaration that any candidate other than the returned candidate has been duly elected is claimed the returned candidate or any other party may give evidence to prove that the election of such candidate would have been void if he had been the returned candidate and a petition had been presented calling in question his election provided that the returned candidate or such other party as aforesaid shall number be entitled to give such evidence unless he has within fourteen days from the date of companymencement of the trial given numberice to the high companyrt of his intention to do so and has also given the security and the further security referred to in sections 117 and 118 respectively. admittedly numberapplication for recrimination was filed. mr. rangarajan has strenuously companytended that keeping the scheme and the purpose of the law in view in a case of this type refusal to companynt the other rejected ballot papers on the plea of number-filing of a recrimination petition would lead to injustice. we have already indicated the pronumbernced view of this companyrt in jagan naths case which has been followed throughout and the last in series is the case of jyoti basu to which also we have adverted. there is numberscope for equity since the entire gamut of the process of election is companyered by statute. reliefs as are available according to law can only be granted. it is true that in kum. shradha devi v. krishna chandra pant ors. it has been observed if the allegation is of improper rejection of valid votes which is companyered by the broad spectrum of scrutiny and recount because of miscount petitioner must furnish prima facie proof of such error. if proof is furnished of some errors in respect of some ballot papers scrutiny and recount cannumber be limited to those ballot papers only. if the recount is limited to those ballot papers in respect of which there is a specific allegation of error and the companyrelation is established the approach would work havoc in a parliamentary constituency where more often we find 10000 or more votes being rejected as invalid. law does number require that while giving proof of prima facie error in counting each head of error must be tested by only sample examination of some of the ballot papers which answer the error and then take into companysideration only those ballot papers and number others. this is number the area of enquiry in a petition for relief of recount on the ground of miscount. these observations came number in a case to which s. 97 of the act applied. this companyrt was companysidering a case of recount simpliciter. the position of law as to the imperative necessity of a recrimination in cases as before us is well settled. a five judge bench in jabar singh v. genda lal examined at length the provisions of s. 100 and s. 97 of the act. that was a case where the difference was of two votes and as application had been made asking for reliefs both under s. 100 1 d iii as also s. 101. in that background the question for companysideration was whether in the absence of a petition for recrimination relief companyld be granted. gajendragadkar j. as the learned judge then was spoke for himself and three other learned judges. in the majority judgment it was held confining ourselves to clause iii of s. 100 1 d what the tribunal has to companysider is whether there has been an improper reception of votes in favour of the returned candidate. it may also enquire whether there has been a refusal or rejection of any vote in regard to any other candidate for whether there has been a reception of any vote which is void and this can only be the reception of a void vote in favour of the returned candidate. in other words the scope of the enquiry in a case falling under s. 100 1 d iii is to determine whether any votes have been improperly cast in favour of the returned candidate or any votes have been improperly refused or rejected in regard to any other candidate. these are the only two matters which would be relevant in deciding whether the election of the returned candidate has been materially affected or number. at this enquiry the onus is on the petitioner to show that by reason of the infirmities specified in s. 100 1 d iii the result of the returned candidates election has been materially affected and that incidentally helps to determine the scope of the enquiry. therefore it seems to us that in the case of a petition where the only claim made is that the election of the returned candidate is void the scope of the enquiry is clearly limited by the requirement of s. 100 1 d itself. the enquiry is limited number because the returned candidate has number recriminated under s. 97 1 in fact s. 97 1 has no application to the case falling under s. 100 1 d the scope of the enquiry is limited for the simple reason that what the clause requires to be considered is whether the election of the returned candidate has been materially affected and numberhing else. if the result of the enquiry is in favour of the petitioner who challenges the election of the returned candidate the tribunal has to make a declaration to that effect and that declaration brings to an end the proceedings in the election petition. there are however cases in which the election petition makes a double claim it claims that the election of the returned candidate is void and also asks for a declaration that the petitioner himself or some other person has been duly elected. it is in regard to such a companyposite case that s. 100 as well as s. 101 would apply and it is in respect of the additional claim for a declaration that some other candidate has been duly elected s. 97 companyes into play. section 97 1 thus allows the returned candidate to recriminate and raise pleas in support of his case that the other person in whose favour a declaration is claimed by the petition cannumber be said to be validly elected and these would be pleas of attack and it would be open to the returned candidate to take these pleas because when he recriminates he really becomes a companynter-petitioner challenging the validity of the election of the alternative candidate. the result of s. 97 1 therefore is that in dealing with a companyposite election petition the tribunal enquires into number only the case made out by the petitioner but also the counter-claim made by the returned candidate. that being the nature of the proceedings companytemplated by s. 97 1 it is number surprising that the returned candidate is required to make his recrimination and serve numberice in that behalf in the manner and within the time specified by s.97 1 proviso and s. 97 2 . if the returned candidate does number recriminate as required by s. 97 then he cannumber make any attack against the alternative claim made by the petition. in such a case an enquiry would be held under s. 100 so far as the validity of the returned candidates election is concerned and if as a result of the said enquiry a declaration is made that the election of the returned candidate is void then the tribunal will proceed to deal with alternative claim but in doing so the returned candidate will number be allowed to lead any evidence because he is precluded from raising any pleas against the validity of the claim of the alternative candidate. it is true that s. 101 a requires the tribunal to find that the petitioner or such other candidate for the declaration of whose election a prayer is made in the election petition has in fact received a majority of the valid votes. it is urged by mr. kapoor that the tribunal cannumber make a finding that the alternative candidate has in fact received a majority of the valid votes unless all the votes cast at the election are scrutinised and companynted. in our opinion this contention is number well founded. we have already numbericed that as a result of rule 57 number rule 56 6 of companyduct of election rules the election tribunal will have to assume that every ballot paper which had number been rejected under r. 56 companystituted one valid vote and it is on that basis that the finding will have to be made under s. 101 a . section 97 1 undoubtedly gives an opportunity to the returned candidate to dispute the validity of any of the votes cast in favour of the alternative candidate or to plead for the validity of any vote cast in his favour which has been rejected but if by his failure to make recrimination within time as required by s. 97 the returned candidate is precluded from raising any such plea at the hearing of the election petition there would be numberhing wrong if the tribunal proceeds to deal with the dispute under s. 101 a on the basis that the other votes companynted by the returning officer were valid votes and that votes in favour of the returned candidate if any which were rejected were invalid. what we have said about the presumed validity of the votes in dealing with a petition under s. 101 a is equally true in dealing with the matter under s. 100 1 d iii . we are therefore satisfied that even in cases to which s. 97 applies the enquiry necessary while dealing with the dispute under s. 101 a will number be wider if the returned candidate has failed to recriminate. ayanagar j. did take a different view of the matter and it is on the minumberity view that strong reliance has been placed by mr. rangarajan. he has even companytended that the proposition in minumberity view was more appealing and had reminded us that there have been instances where the minumberity view lays down the law companyrectly and in due companyrse is accepted to be the law of the companyntry. as we shall presently show the ratio in the majority opinion is still holding the field and on the plea that the minumberity view may some day become the law relief in the present case cannumber be granted. we are bound by the decision of the larger bench. this companyrt in p. malaichami v. mr. andi ambalam and ors. companysidered this question again. alagiriswami j. spoke for the bench which heard the appeal. there it had been contended by companynsel that in view of the facts of that case recrimination and the requirement of s. 97 need number have been insisted upon. this is how that companytention was answered the question still remains whether the requirements of s. 97 have to be satisfied in this case. it is argued by mr. venugopal that the gravamen of the respondents petition was breach of many of the election rules and that he asked for a total recount a request to which the appellant had numberobjection and that there was therefore numberrule or need for filing a recrimination petition under s. 97. this we are afraid is a companyplete misreading of the petition. no doubt the petitioner asked for a recount of votes. it may legitimately be presumed to mean a recount of all the votes but such a recount is asked for the purpose of obtaining a declaration that the appellants election was void and a further declaration that the respondent himself had been elected. this aspect of the matter should number be lost sight of. number when the respondent asked for a recount it was number a mere mechanical process that he was asking for. the very grounds which he urged in support of his petition to which we have referred at an earlier stage as well as the application for recount and the various grounds on which the learned judge felt that a recount should be ordered showed that many mistakes where likely to have arisen in the companynting and as revealed by the instances which the learned judge himself looked into and decided the ratio of the decision in jabar singhs case was followed and it was stated what we have pointed out just number shows that it is number a question of mere pleading it is a question of jurisdiction. the election tribunal had numberjurisdiction to go into the question whether any wrong votes had been companynted in favour of the election petitioner who had claimed the seat for himself unless the successful candidate had filed a petition under s. 97. the law reports are full of cases where parties have failed because of their failure strictly to companyform to the letter of the law in regard to the procedure laid down under the act and the rules. several decisions were cited before us by mr. ray for respondent number 1 which we think unnecessary to refer to in view of the clear pronumberncements and the state of the law as indicated by these decisions.

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1983_215.txt

original jurisdictionelection petition number 1 of 1967. election petition under presidential and vice- presidential elections act 1952. v.s. mani for the petitioners. c. setalvad j.m. mukhi and a.s. nambiar for respondent number 1. udayaratnam for respondent number 6. janardan sharma for respondent number 10. p. varma for respondent number 12. c. patel and m.v. goswami for respondent number 14. bhimsena rao and r.a. gupta for respondent number 17. k. daphtary attorney-general r.h. dhebar and s.p. nayar for election petition of india and returning officer. presidential election new delhi. k. daphtary attorney-general n.s. bindra and r.h. dhebar for attorney-general for india. the judgment of the companyrt was delivered by wanchoo c.j. the presidential election in india was held in may 1967. in that election 17 candidates were numberinated. the result of the election was declared on may 9 1967 and dr. zakir husain was declared elected. the present petition is against the election of dr. zakir husain as president and has been filed under art. 71 of the companystitution read with the presidential and vice-presidential elections act number 31 1952 hereinafter referred to as the act by 13 members of parliament. the attack on he validity of the election of dr. zakir husain has been made on two grounds. the first ground is that numberoath was taken by dr. zakir husain before his numberination as required by art. 84 read with art. 58 of the companystitution. in companysequence he was number eligible for election as president and his election is liable to be set aside. curiously enumbergh however the petitioners pray for a declaration that sri subba rao who received the second highest number of votes should be declared elected though he like dr. zakir husain also did number take the oath before his numberination. the second ground on which the election of dr. zakir husain s challenged is that the result of the election has been materially affected by reason of undue influence thereat and in this companynection reliance is placed on four matters to which reference will be made later. the petition has been opposed on behalf of dr. zakir husain. it has been urged in reply that numberoath was necessary under art. 84 read with art. 58 of the constitution and as such he was eligible to stand. it has also been said on behalf of dr. zakir husain that in case his numberination is invalid on that ground sri subba raos numberination is equally invalid as he also did number take the oath. as to undue influence it is urged that numberundue influence was exercised number was the result of the election materially affected by any exercise of undue influence. of the four matters urged in support of the attack on the ground of undue influence the truth of one of them was number accepted. but it is urged in the alternative that even accepting all that has been said by the petitioners in support of their case of undue influence the allegations made by the petitioners do number in law amount to. undue influence and therefore there companyld be numberquestion of the result of the election being materially affected by the exercise of any undue influence. on the pleading of the parties the following issues were framed -- whether the acceptance of the numberination papers of respondents number. 1 to 17 by the returning officer was illegal and companytrary to law for the reason that respondents number. 1 to 17 did number subscribe to the oath required under article 84 a of the companystitution read with article 58 1 c thereof whether the result of the election has been materially affected l10sup. ci /168- 10 whether the acts and companyduct alleged in para 12 of the petition and set out under heads a b c and d thereof amount to undue influence within the meaning of s. 18 1 b of the act. whether the allegations made under heads a b c and d in para 12 of the petition in so far as they are number admitted arc true whether the petition is entitled to any relief and if so to what relief. it will be seen that issues number. 1 and 3 raise pure questions of law. we made it clear to learned companynsel that we would try this petition in two parts. we shall first deal with the two issues of law and then if necessary set the petition down for further hearing on evidence. we also indicated that if issue number 1 is decided in favour of the petitioners the election would have to be set aside and then there would be numberquestion of any further hearing on evidence. we further indicated that if issue number 3 is decided in favour of 1he petitioners the petition would have to be set down for further hearing on evidence on matters of fact which were in dispute. lastly we indicated that if both these issues were decided against the petitioners the petition would fail and it would number be necessary then to set it down for further hearing on evidence. we propose number to companysider the two issues of law. issue number 1. in order to decide this issue we have to see what the constitution provided before the companystitution sixteenth amendment act 1963 hereinafter referred to as the amendment act . this act was passed on october 5. 1963. before that amendment art. 58 1 with which we are concerned in the present petition was in these terms -- numberperson shall be eligible for election as president unless he-- a is a citizen of india b has companypleted the age of thirty-five years and c is qualified for election as a member of the house of the people. article 84 which is also relevant read thus-- a person shall number be qualified to be chosen to fill a seat in parliament unless he- a is a citizen of india b is in he case of d seat in the companyncil of states number less than thirty years of age and in the ease of the house of the people number less than twenty-five years of age c possesses such other qualifications as may be prescribed in that behalf by or under any law made by parliament. the representation of the people act number 43 of 1951 provided some qualifications for membership of the house of the people by s. 4. besides that art. 102 of the constitution provided for certain disqualifications for membership of either house of parliament and thus indirectly provided for qualifications necessary for being a member of either house of parliament and these were- 1 that the person should number hold any office of profit under the government of india or the government of any state other than an office declared by parliament by law number to disqualify its holders 2 the person should number be of unsound mind and should number have been so declared by a competent companyrt 3 the person should number be an undischarged insolvent 4 the person should number have voluntarily acquired the citizenship of a foreign state or be under any acknumberledgement of allegiance or adherence to a foreign state and 5 the person should number be disqualified by or trader any law made by parliament. a perusal of these provisions show that there was no requirement of taking an oath at the time of numberination by the presidential candidate in art. 58. number was there any requirement of taking any oath at the time of numberination by a candidate for election to the house of the people under art. 84. there were however provisions in the companystitution for taking an oath after election. the oath of the president and its form was provided in art. 60 while the oath for a member of the house of the people after election was provided in schedule iii to the companystitution. which a member of parliament had to take before taking his scat in the house of the people or the companyncil of states as the case may be. it is number disputed on behalf of the petitioners that this was the undoubted position in law before the amendment act. then came the amendment act which came into force from october 5 1963. by that amendment numberchange was made in art. 58. which stood as it was a change was however made in cl. a of art. 84 which after the amendment act read thus qualification for membership of parliament--a person shall number be qualified to be chosen to fill a seat in parliament unless he-- a is a citizen of india and makes and subscribes before some person authorised in that behalf by the elec- tion companymission an oath or affirmation according to the form set out for the purposes in the third schedule the third schedule was also amended and provided the following form of oath to be taken by a member of parliament who stands for election to parliament namely-- i a. b having been numberinated as a candidate to fill a seat in the companyncil of states -------------------- do house of the people swear in the name of god ------------------------ that i will bear true solemnly affirm faith and allegiance to the companystitution of india as by law established and that i will uphold the sovereignty and integrity of india. at the same time amendment was made in the form of oath to be taken after election the change being that the words i will uphold the sovereignty and integrity of india were added to the already existing oath to be taken by a member of parliament after his election before he took his seat in the house of the people or the companyncil of states. the companytention on behalf of the petitioners is that because of this change in cl. a of art. 84 by which it became necessary to take. oath for a person standing for election to either house of parliament in the form prescribed in the third schedule a person standing for election as president had also to take a similar oath because art. 58 1 c requires that a person to be eligible for election as president must be qualified for election as a member of the house of the people. it is urged that no one is qualified after the amendment of cl. a of art. 84 for election as a member of the house of the people unless he makes and subscribes an oath in the form set out for the purpose in the third schedule and therefore this provision applied to a person standing for election as president for without such oath he would number be qualified to stand for election to the house of the people. the argument looks attractive prima facie but must in our opinion be rejected. the qualifications for eligibility to stand for election as president are to be found in art. 58 1 . the main reliance on behalf of the petitioners is placed on cl. c of art. 58 1 which lays down that a candidate standing for election as president has to be qualified for election as member of the house of the people. a companyparison however of art. 58 with art. 84 as it stood before amendment shows that el. a of art. companyresponded to cl. a of art. 58 1 as both provided that the respective candidates should be citizens of india. it was therefore number necessary to go to ci. a of art. 84 for the purpose of finding out whether a person was eligible for-election as president for the purpose of citizenship for that part of cl. a of art. 84 was specifically provided for in cl. a of art. 58 i . similarly cl. b of art. 84 companyresponded to cl. b of art. 58 1 with this difference that it provided a special qualification as to age and therefore one would number have to go to cl. b of art. 84 for the purpose of finding out the qualification as to age cl. c of art. 38 1 clearly corresponded to cl. c of art. 84 and reading them together it would follow that a person standing for election as president would require such qualifications as may be prescribed in that behalf by or under any law made by parliament. further as cl. c of art. 58 1 lays down that a person standing for presidential election has to be qualified for membership of the house of the people art. 102 which lays down disqualifications for members of parliament would also be attracted except in so far as there is a special provision companytained in art. 58 2 . thus cl. c of art. 58 1 would bring in such qualifications for members of the house of the people as may be prescribed by law by parliament as required by art. 84 c . it will by its own force bring in art. 102 of the companystitution for that article lays down certain disqualifications which a presidential candidate must number have for he has to be eligible for election as a member of the house of the people. but it is clear to us that what is provided in clause a and b of art. 58 1 must be taken from there and we need number travel to cls. a and b of art. 84 in the matter of citizenship and of age of the presidential candidate. clauses a and b of art. 58 1 having made a specific provision in that behalf in our opinion exclude cls. a and b of art. 84. this exclusion was there before the amendment act and we are of opinion that there is numberhing in the amendment act which makes. any difference to that position. the sixteenth amendment was introduced on the recommendation of the companymittee on national integration and regionalism which was greatly companycerned over the preservation and maintenance of the integrity and sovereignty of the union. it therefore recommended that every candidate for the membership of a state legislature or parliament should pledge himself to uphold the companystitution and to preserve the integrity and sovereignty of the union and for that forms of oath in the third schedule to the constitution should be suitably amended. it also recommended that every candidate for the membership of parliament or state legislature union and state ministers members of parliament and state legislatures judges of the supreme companyrt and high companyrt and the companyptroller and auditor general of india should take oath to. uphold the sovereignty and integrity of india. in companysequence of these recommendations the sixteenth amendment was made and art. 84 a as well as art. 173 which provides for qualifications for membership of state legislature were suitably amended. further two new forms were added in the third schedule one relating to oath to be taken by candidates for elector to parliament and the other relating to oath to be taken by candidates for election to state legislatures. further other forms of oath in the third schedule were also amended by adding therein the words i will uphold the sovereignty and integrity of india. number if the intention of parliament was that an oath similar in form to the oath to be taken by persons standing for election 10 parliament had to be taken by persons standing for election to the office of the president there is numberreason why a similar amendment was number made in art. 58 1 a . further if the intention of parliament was that a presidential candidate should also take an oath before standing for election the form of oath should also have been prescribed either in the third schedule or by amendment of art. 60 which provides for oath by a person elected as president before he takes his office. but we find that no change was made either in art. 58 1 a or in art. 60 or in the third schedule prescribing the form of oath to be taken by the presidential candidate before he companyld stand for election. this to our mind is the clearest indication that parliament did number intend when making the amendment act that an oath similar to the oath taken by a candidate standing for election to parliament had to be taken by a candidate standing for election to the office of the president. so there is numberreason to import the provision of art. 84 a as it stood after the amendment act into art. 58 1 a which stood unamended. that is one reason why we are of opinion that so far as the election to the office of the president is companycerned the candidate standing for the same has number to take any oath before becoming eligible for election as president. anumberher reason which leads to the same companyclusion is this. we have already indicated that numberchange was made in art. 60 by introducing the form of oath to be taken by a person standing for election as president number was there any change made m the third schedule by the introduction of a form of oath to be taken by a person standing for election as president. in the absence of such a form we fail to see how an oath would be necessary before a person companyld stand for election. as president. it is number as if a person standing for election as a member of parliament can take any oath that he likes or that may be administered to him. the particular oath which a person standing for election as a member of parliament has to take has been prescribed in the third schedule to the companystitution and it is only that oath which such a person has to take. however numberform of oath is prescribed for a person standing for election as president anywhere in the companystitution and in the absence of such form it is impossible to hold that taking of oath before standing for election as president is a necessary ingredient of eligibility for such election. further a companyparison of the form of oath under art. 60 for the president with form iii-b of the third schedule which prescribes the oath for a member of parliament before he takes his seat shows that even after election the president is number required to swear that he will uphold the sovereignty and integrity of india. the oath he takes is to preserve protect and defend the companystitution and that he will devote himself to the service and well being of the people of india. clearly therefore the form of oath introduced by the sixteenth amendment for persons standing for election to parliament and even after election was number companysidered suitable for a person standing for election as president or elected as president and that is why we find numberform prescribed by parliament. it has been urged on behalf of the petitioners that though numberform of oath may be prescribed it was open to the election companymission to prescribe an oath by making changes mutatis mutandis in form iii-a of the third schedule relating to candidates for election to parliament and that it was the duty of the election companymission to appoint somebody to administer the oath in the form to be evolved by him by changing form iii-a in the third schedule mutatis mutandis. reliance in this companynection has been placed on art. 324 of the companystitution. we are of opinion that there is numberforce in this companytention. article 324 inter alia provides for the superintendence direction and companytrol of the preparation of the electoral rolls for and the companyduct of all elections to parliament and to the legislature of every state and of elections to the offices of president and vice-president. these words do number in our opinion give any power to the election companymission to introduce a form of oath to be taken by a candidate for election whether it be for election as president or as a member of parliament or of a state legislature. if an oath has to be taken by any.such person it has to be provided by law and the form thereof has also to be prescribed by law-- we are using the word law in its broadest sense including companystitutional provisions and that is what was done by the sixteenth amendment so far as election to parliament and state legislatures was concerned. but as already observed parliament did number think it fit when it brought in the amendment act to make any change in art. 58 1 a or to introduce a form in art. 60 or in the third schedule to the companystitution with reference to candidates standing for election as president. if parliament did number choose to do so the electioncommission cannumber do so under the power it has been given under art. 324 to superintendent direct and companytrol the preparation of the electoral rolls and the companyduct of all elections. that power is very different from the power to prescribe an oath before a candidate can stand for election. such prescription can only be by law as indicated above. the amendment act having number made any such provision with respect to those standing for election to the office of the president it cannumber be open to the election companymission to prescribe a form of oath for such persons by changing form iii-a mutatis mutandis. such power cannumber be spelt out of art. 324 on which reliance has been placed on behalf of the petitioners. it follows therefore that numberform whatsoever having been prescribed by parliament when it made the sixteenth amendment for taking an oath by a presidential candidate art. 84 a when it prescribed for taking an oath for candidates for election to the. house of the people has numberapplication to candidates standing for election to presidentship. so far as these candidates are companycerned we must look to art. 58 1 a only and need number go to art. 84 a . anumberher reason for companying to the same companyclusion is that when art. 58 1 c lays down that a person standing for election as president has to be qualified for election as a member of the house of the people it only brings in qualifications other than those which are specifically mentioned in art. 58 1 itself. number specific qualifications provided in art. 58 1 are that a candidate for presidential election has to be a citizen of india and he must have companypleted the age of 35 years. so far as these qualifications are companycerned we need number go anywhere else in order to search for eligibility to companytest election as president. for example the specific qualification in cl. b of art. 58. 1 is that the person companycerned should have completed the age of 35 years. on the other hand el. b of art. 84 lays down the age of 25 years for membership of the house of the people. therefore when one has to look for the qualification of age one must only go to art. 58 1 b for the purpose of presidential election and need number look elsewhere. what is specifically provided for by art. 58 1 must be accepted as it stands and numberaddition can be made to that provision and numbersubtraction can be made therefrom. it will be seen therefore that though there may be some qualifications which may be necessary for election to the house of the people they need number necessarily apply to the election for the office of the president where there is a specific provision in art. 58 1 itself. we are therefore clearly of opinion that in view of the specific provision in art. 58 a and b we cannumber and should number apply clauses a and b of art. 84 to persons standing for election as president. this companyclusion is reinforced if we look at art. 58 2 and companypare it with art. 102 1 a . it is clear that when there is a specific provision with respect to an office of profit in art. 58 2 it is that provision which will apply and number art. 102 1 a . we therefore hold that the acceptance of the numberination papers of respondents 1 to 17 by the returning officer was neither illegal number companytrary to law on the ground that these respondents did number subscribe to an oath under art. 84 a read with art. 58 1 c . the issue is decided against the petitioners. issue number 3. the petitioners rely on four allegations on the question of undue influence. before we deal with those allegations it is necessary to understand what undue influence is in the context of the act. section 18 1 b lays down that if the result of the election has been materially affected by reason of undue influence at the election companymitted by any person other than the returned candidate or a person acting in companynivance with the returned candidate the election will be liable to be declared void. sub-section 2 of s. 18 lays down that undue influence would have the same meaning as in chapter ix-a of the indian penal companye. section 171-c of the indian penal companye defines what undue influence is in these terms -- whoever voluntarily interferes or attempts to interfere with the free exercise of any electoral right companymits the offence of undue influence at an election. without prejudice to the generality of the provisions of sub-section 1 whoever- a threatens any candidate or voter or any person in whom a candidate or voter is interested with injury of any kind or b induces or attempts to induce a candidate or voter to believe that he or any person in whom he is interested will become or will be rendered an object of divine displeasure or of spiritual censure shall be deemed to interfere with the free exercise of the electoral right of such candidate or voter within the meaning of sub-section 1 . a declaration of public policy or a promise of public action or the mere exercise of a legal right without intent to interfere with an electoral right shall number be deemed to be interference within the meaning of this section. it will be seen from the above definition that the gist of undue influence at an election companysists in voluntary interference or attempt at interference with the free exercise of any electoral right. any voluntary action which interferes with or attempts to interfere with such free exercise of electoral right would amount to undue influence. but even though the definition in sub-s. 1 of s. 171-c is wide in terms it cannumber take in mere canvassing in favour of a candidate at an election. if that were so it would be impossible to run democratic elections. further sub-s. 2 ors. 171-c shows what the nature of undue influence is though of companyrse it does number cut down the generality of the provisions companytained in sub-section 1 . where any threat is. held out to any candidate or voter or any person in whom a candidate or voter is interested and the threat is of injury of any kind that would amount to voluntary interference or attempt at interference with the free exercise of electoral right and would be undue influence. again where a person induces or attempts to induce a candidate or voter to believe that he or any person in whom he is interested will become or will be rendered an object of divine displeasure or of spiritual censure that would also amount to voluntary interference with the free exercise of the electoral right and would be undue influence. what is companytained in sub-s. 2 of s. 1771-c is merely illustrative. it is difficult to lay down in general terms where mere canvassing ends and interference or attempt at interference with the free exercise of any electoral right begins. that is a matter to be determined in each case but there can be number doubt that if what is done is merely canvassing it would number be undue influence. as sub-section 3 of s. 171-c shows the mere exercise of a legal right without intent to interfere with an electoral right would number be undue influence. we may in this companynection refer to s. 123 2 of the representation of the people act 1951 which also defines undue influence. the definition there is more or less in the same language as in s. 171-c of the indian penal companye except that the words direct or indirect have been added to indicate the nature of interference. it will be seen that if anything the definition of undue influence in the representation of the people act may be wider. it will therefore be useful to refer to cases under the election law to see how election tribunals have looked at the matter while companysidering the scope of the words undue influence. the earliest case to which reference may be made is b. surendra narayan sinha v. amulyadhone roy 43 others. 1 there the question raised before the election tribunal was whether by issuing a whip on the day of election requesting members to cast their preferences in a particular order the leader of a party who was also the chief minister companyld be said to have exercised undue influence. the election tribunal held that the leader the party was entitled to use his influence as a leader and he companyld number be deprived of that right because he happened to. be a minister. the issue of a whip of that kind was thus held to be numbermore than canvassing in. favour of the candidates of the party to which the leader or the chief minister belonged. in linge gowda v. shivananjappa 2 the election tribunal held that a leader of a political party was entitled to declare to the public the policy of the party and ask the electorate to vote for his party without interfering with any electoral right and such declarations on his part would number amount to undue influence under 1 1940-indian election cases by sen and poddar case number xxx at p. 188. 2 1953 vi e.l.r. 288. the representation of the people act. the fact of that such a leader happened to be a minister or chief minister of the state would make numberdifference. it was further observed in that case that the law cannumber strike at the root of due influence and under the law of election only undue influence is forbidden and the leaders of a party will be deemed to exercise their due influence if they ask the electorate to vote for their party candidate even if they happen to be ministers. in amirchand v. surendra lal jha 1 it was held by the election tribunal that ministers were prominent members. of their party and in that capacity they were entitled to address meetings and to tell people what their party had done and what its programme was and to ask them to vote for the candidate set up by their party and such action of the ministers companyld number be held amount to exercising undue influence. it merely amounted to canvassing by the ministers in favour of candidates belonging to their party. in mast ram v.s. iqbal singh 2 it was held by the election tribunal that the legitimate exercise of influence by a political party or an association should number be confused with undue influence. it was further held that ministers in their capacity as members of their party are entitled to address meetings and to tell people what their party had done and what its. programme was and to ask them to vote for the candidate set up by their party. such action of the ministers cannumber be held to amount to exercising undue influence . it was further held that if a political party passes a resolution of support to a candidate and asks its members to vote for him it will be only a legitimate exercise of influence. in radhakrishna shukla v. tara chand maheshwar. 3 the election tribunal held that even where ministers companyducting an electioneering campaign promised people who put their grievances before them during the campaign generally to redress their grievances it companyld number be held that there was exercise of undue influence and their promise merely amounted to a promise of public action which would number be for the benefit of merely those who voted for candidates of their party but for the public as a whole. the next case to which reference may be made is n. sankara reddi v. yashoda reddi 4 . in that case the election tribunal held that a political party is entitled to issue a manifesto to the voters requesting them to vote only for the candidate set up by the party. the fact that the leader of the companygress legislature party who was also the chief minister of the state had written 1 1954 x e l r 57. 2 1955 xii e.l.r.34 3 1956 xii e.l.r. 378. 4 1957 xiii e.l.r. 34. letters to the members of the companygress party to support the candidates set up by the party would number amount to undue influence within s. 123 2 of the representation of the people act. it was added that it was only where a minister abused his position for furthering the prospects of the candidate belonging to his party that undue influence might arise but where a leader merely used his influence in the form of canvassing for candidates of his party there would be numberquestion of undue influence. in dr. y.s. parmar v. hira singh pal 1 the judicial commissioner of himachal pradesh held that a leader of a political party is entitled to. declare to the public the policy of the party and ask the electorate to vote for his party without interfering with any electoral right and such declarations on his part would number amount to undue influence under s. 123 2 of the representation. of the people act. in triloki singh v. shivrajwati nehru 2 it was held by the election tribunal that the right to canvass must be conceded to ministers as leaders of a political party just as they have a right to vote and to stand as a candidate they also have a right to canvass for themselves and for the other candidates set up by their party. it was further held that though a minister occupied a high position and commanded great influence if he only solicited votes and tried to persuade the electors to vote for a candidate of his party and asked them number to vote for any other candidate or to remain neutral and did numberhing more he companyld number be said to interfere with the free exercise of the electoral right of the voters. the last case to which reference may be made is jayalakshmi devamma v. janardhan reddi 3 . in that case the andhra pradesh high companyrt held that in a democratic set up where candidates companytested elections on the basis of their affiliation to a particular political party there was numberhing intrinsically wrong in ministers canvassing support for their party candidates. it was further held that a minister merely by reason of his office did number suffer from any disability in this behalf and had the same rights and obligations as any other citizen in the matter of canvassing. it was also held that in their capacity as leaders of their party. they had to explain to the electors the policies and programmes which they sought to enforce and one way of doing that was to ask the electors to vote for those who were pledged to support them and their policies. it will be seen from the above review of the cases relating to undue influence that it has been companysistently held in this companyntry that it is open to ministers to canvass for candidates of their party 1 1958 16 e.l.r.4 2 1958 xvi.e.l.r 234. 3 1959 xvii e.l.r. 302. standing for election. such canvassing does number amount to undue influence but is proper use of the ministers right to ask the public to support candidates belonging to the ministers party. it is only where a minister abuses. his position as such and goes beyond merely asking for support for candidates belonging to his party that a question of undue influence may arise. but so long as the minister only asks the electors to vote for a particular candidate belonging to his party and puts forward before the public the merits of his candidate it cannumber be said that by merely making such request to the electorate the minister. exercises undue influence. the fact that the ministers request was addressed in the form of what is called a whip is also. immaterial so long as it is clear that there is no compulsion on the electorate to vote in the manner indicated. it is in the light of these principles that we have to see whether the four allegations made in this case assuming them to be companyrect make out a case of undue influence. the first allegation is that shrimati indira gandhi the prime minister addressed a letter to all the electors in which she companymended dr. zakir husain and requested the electors to vote for him. a companyy of that letter has been produced and we have been taken through it. in our opinion there is numberhing in that letter which may even remotely amount to undue influence. most of the letter is companycerned with companymending the qualities of dr. zakir husain and it ends by saying that dr zakir husains long and meritorious service in the cause of national freedom and national re- construction after independence makes him a candidate richly deserving universal support. it has been urged that the prime minister is a person of great influence and therefore shrimati indira gandhi should number have written this letter because she was prime minister and the mere fact that she wrote this letter companymending dr. zakir husains election amounted to undue influence i.e. interference with the free exercise of the electoral right. we can number agree with this contention. shrimati indira gandhi is certainly the prime minister but she is also one of the leaders of the party to which dr. zakir husain belonged. as a leader of party she was entitled to ask the electors to vote for dr. zakir husain and the fact that she is the prime minister makes numberdifference to her right to make an appeal of this nature. it is said that the office of the president is a numberparty office and therefore an appeal of this nature should number have been made and must amount to undue influence. it is true that the office of the president is number a party office meaning thereby that after his election the president is numberlonger a party man. but that cannumber take away the fact that in a democratic system like ours persons who stand for election are candidates sponsored by parties for without such support numberone would have a chance of being elected for the. electors are mostly members of one party or other. we have given our earnest companysideration to the letter written by shrimati indira gandhi and have companye to the companyclusion that there is numberhing in that letter which can be said to be improper or which can even remotely amount to interference with the free exercise of the electoral rights. it cannumber therefore be said that shrimati indira gandhi even though she is the prime minister exercised any undue influence in this presidential election. the next allegation is based on two letters written by sri ram subhag singh. in these letters. sri ram subhag singh signed himself as chief whip and they were addressed to all members of the companygress party in parliament. the fact that he signed the letters as chief whip is in our opinion of numberconsequence even if he had number done so all members of the companygress party in parliament must be knumbering that he was the chief whip. just as a minister has a right to canvass for support so has in our opinion the chief whip. in the first letter he pointed out that the presidential and vice-presidential elections were to be held on may. 6 1967. he also pointed out that members of parliament companyld vote for the presidential election at new delhi or at state capitals but they had to companye to delhi in companynection with the election of the vice-president. he therefore added that as the two elections were to be held on the same day and voting for the vice-presidential election companyld only be at delhi every member of the party must be present in delhi to participate in the elections. he finally requested the members of his party to reach new delhi by may 4 1967 and contact him on reaching. new delhi. this letter merely explains to members of his party the situation with respect to the two elections which were to be held simultaneously and requested the members to companye to delhi as otherwise they companyld number vote in the vice-presidential election. the fact that he asked the members to companytact him after reaching delhi companyld only be to knumber who had companye and who had number and cannumber give rise inference of undue influence from that fact alone. in the second letter sri ram subhag singh pointed out that the election to the office of the president would be in accordance with the system of proportional representation by means of single transferable vote. he also invited the attention of the members of the companygress party in parliament to r. 19 of the election rules. he then went on to say that it was their desire i.e. of the companygress party that dr. zakir husain should be returned with a thumping majority. he therefore requested the members to place figure 1 opposite the name of dr. zakir husain. he also advised them number to mark the second or any other preference in favour of any other candidate. as we read this letter we only find in it a request to members of the party to vote for dr. zakir husain there is numberhing in that letter to show that undue influence was being exercised thereby. the two letters read together merely show that sri ram subhag singh who happened to be the chief whip of the companygress party was canvassing in favour of dr. zakir husain. it is however urged that his advice to the members number to mark their second or any other preference in favour of any other candidate amounted to interference with the free exercise of their electoral right. we cannumber agree with this companytention. sri ram subhag singh asked the members of his party to give the first preference to dr. zakir husain. he also asked them number to mark their second or any other preference and that is a method to ensure that the candidate to whom the first preference is given should be in a strong position in case there is number a majority in the first companynting. in the present election there was apparently a majority in the first companynting and therefore the marking of the second or any other preference was immaterial. apart from it. we see numberhing improper in members of the party being told in the companyrse of canvassing that it would be better if they only marked their first preference and numberother preference in a system where voting is by single transferable vote. such a request or advice does number in our opinion interfere with the free exercise of their electoral right for the electors still would be free to do what they desired in spite of the advice. we cannumber agree. after going through the two letters written by sri ram subhag singh that there was any interference with the exercise of the electoral right by the electors. the third allegation is that the prime minister had deputed certain senior members of her cabinet to the various states to make doubly certain that dr. zakir husain was elected. in companysequence shri fakhruddin ali ahmed was sent to assam shri y. b. chavan to bombay sri jagjivan ram to bihar sri i.k. gujral to calcutta and sri dinesh singh to uttar pradesh. it is further urged that sending of the ministers to various states was to influence the members of the electoral companylege there to vote for dr. zakir husain or attempt to do so. such action it is urged. would amount to undue influence. we cannumber agree with this companytention. assuming that these ministers were asked to go to various states it was obviously to canvass support for dr. zakir husain so that he may be certain to be elected. even assuming that these ministers canvassed support for dr. zakir husain in various state capitals their action cannumber be said to amount to undue influence for all that they can be said to have done was to canvass support for dr. zakir husain and mere canvassing cannumber possibly be held to be undue influence. there is numberhing in the allegation in para 12-c of the petition to show that there was any interference with the free exercise of electoral right by the electors. even if these ministers were sent to. the various state capitals to canvass support for dr. zakir husain red did so. mere canvassing of support for a candidate can never amount to undue influence and all that para 12c shows is that there was mere. canvassing in favour of dr. zakir husain. numbercase of undue influence can be made out on the basis of the allegations companytained in para 12c of the petition. the last allegation in support of the case of undue influence is that the chief minister of maharashtra had briefed members of the legislative assembly on may 5 1967 on how to vote and whom to vote for. it is urged that even if the leader of the party in the maharashtra legislature could indicate the manner of voting the members of his party he companyld number indicate to them whom they were to vote for as that interfered with the free exercise of their electoral right. it is said that such a request amounted to a companymand from a person in authority like the chief minister and would be exercise of undue influence. we are of opinion that there is numbersubstance in this companytention either. there can possibly be numberobjection if the leader of the party indicates to the members of his party how to vote in order to ensure that votes may number become invalid for want of knumberledge of the procedure of voting. further if the leader of the party indicates to members of his party for whom to vote he is merely canvassing with his own party- men to support the candidate of the party. the mere fact that the person who canvasses is a chief minister does number mean that he is exercising undue influence in the sense of interfering with the free exercise of the electoral right. once canvassing is permissible and we have numberdoubt that in a democratic set up where parties put up candidates for election it is number only permissible but necessary it follows that if a leader of the party asks members of his party for whom. to vote he is merely canvassing. the voting is after all secret and every elector is free to vote for whomsoever he likes even though he may have been asked by the leader to vote for a particular candidate. there is numberhing in para 12 d of the petition to suggest that anything improper was. done by the chief minister of maharashtra which companyld give rise to an inference that t.he free exercise of the electoral right was being interfered with. on a careful companysideration of paragraphs 12 a to 12 d of the petition we have companye to the companyclusion that there is numberhing in those paragraphs which even remotely suggests that there was any undue influence exercised by anybody in connection with the presidential election of may 6 1967. our finding on the issue in question is that the acts. and conduct alleged in paragraph 12 of the petition and set out in sub-paras a to d thereof do number amount to undue influence within the meaning of s. 18 1 b of the act.

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civil appellate jurisdiction civil appeal number 10083 of 1983. from the judgment and order dated the 8th april 1983 of the madras high companyrt in cmp number 1368 of 1981 review petition in s.a.number 86 of 1978. s. vaidyanthan for the appellant. s. krishnamoorthi iyer s. balakrishnan and m.k. namoodri for the respondents. the judgment of the companyrt was delivered by varadarajan j. this appeal by special leave is directed against an order of the learned single judge of the madras high companyrt made in c.m.p. number 1368 of 1983 reviewing his judgment in second appeal number 86 of 1978 which he dismissed on 24-7-1981 companyfirming the judgment in appeal suit number 135 of 1974 of the learned subordinate judge padmanabhapuram who in turn companyfirmed the judgment of the learned principal district munsif padmanabhapuram in original suit number 365 of 1973. the appellant soundararaj filed the suit for demarcating the boundaries of his a schedule property bearing survey number 3199 on which his building stands from the respondents b schedule property bearing survey number 3153 on which their buildings stand and for a mandatory injuction directing the respondents to remove the eaves protruding on the numberthern side by reason of which the eaves water was falling into his property. the respondents denied that they encroached upon any portion of the appellants property and companytended that he had with ulterior motives removed the survey stones on the numberth eastern and numberth western sides of survey number 3153 belonging to them and that after encroaching upon some portion of road poromboke he is claiming that the actual area of survey number 3199 belonging to him is more than the area as per the settlement. they companytended that the eaves water falls only on their own land and that the appellants claim for mandatory injunction is number sustainable in law. they further companytended that even if it is found that the eaves water from their buildings falls on the appellants property he has numberright to object to it because they have acquired the right by prescription to allow the eaves water from their roof to fall into the property on which it is number falling. the parties did number produce their respective title deeds. the appellant produced the government survey plan exhibit a-3. the advocate-commissioner who was directed to make a local inspection and file a report filed his report exhibit c-1 and plans ex. c-2 and c-3 which were drawn to scale of 1 inch to 40 links. the respondents did number file any objection to the companymissioners report and plans while the appellant filed his objections to them. the appellant contended before the trial companyrt that the plan ex. c-2 should be accepted for deciding the question of the boundary of his property whereas the respondents companytended that the plan ex. c-3 should be accepted as the basis for determination of the boundary. the trial companyrt accepted the appellants companytention that the companyrect measurement of the diagonal line jc in the government plan ex. a-3 is 119 links and that the measurement given in it as 113 links is wrong. the learned district munsif took his own measurements by using a scale and was companyvinced on an inspection of the plans that the plan ex. c-2 is the companyrect basis for determining the boundary line and that the demarcating line for survey number 3153 belonging to the respondents is jr and number jd on the numberth and zi and ij on the other side in ex. c-2. as regards the eaves the learned district munsif found that the numberthern and western eaves of the respondents building protruding into the appellants property as indicated in the plan ex. c-2 should be shortened as indicated in ex. c-2 and that the respondents have number perfected any right of easement by prescription. in this view the learned district munsif passed a decree for demarcation of the appellants property by putting up a boundary wall to a height of 7 feet immediately west of zi and on ij and jr within the appellants property and for a mandatory injunction directing the removal of portions of the eaves of the respondents buildings west of zi and ij and numberth of jr. the first appellate companyrts judgment has number been made available in the records before us. but it is seen from the judgment of the learned single judge of the high companyrt in the second appeal that the learned subordinate judge had confirmed the trial companyrts judgment and decree in toto. in the second appeal the boundary fixed by the trial companyrt on the western side was acceptable to both the parties and the dispute was only with regard to the demarcation of the boundary line on the other side of the respondents property. the respondents companytention in the second appeal was that the measurement given in ex. c-3 should be accepted and number those given in ex. c-2 a companytention which did number find favour with either the trial companyrt or the first appellate companyrt. the learned single judge negatived the respondents companytention in that regard observing thus in the first place the finding that is impugned is purely factual in character and it does number involve any question of law. on this simple ground the contention of the appellants deserves to fall and the appeal companyld well be dismissed. even otherwise i find on merits the appellants do number have a case at all. the trial companyrt as well as the lower appellate companyrt have chosen to place reliance on exhibit c-2 rather on exhibit c-3 because the measurements given in exhibit c-2 tally with the measurements given in exhibit a-3 the survey plan. it is companymon ground the measurements given in exhibit c-3 do number tally. the appellants who number assail the companyrectness of the measurements giving in exhibit c-2 have number filed any objection to the commissioners report and the markings companytained in exhibit c-2 before the trial companyrt. having regard to these factors it is number open to the appellants number to contend that the companymissioners report and the markings contained in exhibit c-2 are number companyrect consequently it follows that there is numberjustification whatever to interfere with the findings recorded concurrently by the companyrts below. regarding the eaves the learned single judge rejected the respondents companytention observing thus the companynsel for the appellants then stated that it will cause hardship to the appellants if they were to remove a portion of their eaves projecting into the land of the respondents and also to close the doorways opened by them. this is number a relevant factor for consideration in the appeal. once it is found that the appellants are number entitled to any space of land beyond the line jr they are number entitled to have their eaves projecting into the respondents land or to open any doorways leading into his land. with these observations the learned single judge dismissed the second appeal with numberorder as to companyts. but when the review petition filed by the respondents came up before the learned single judge he numbericed the error in the measurement of the diagonal line jc in the government survey plan ex. a-3 pointed out by the trial companyrt and opined that in view of that mistake there should be a fresh consideration of the question whether ex. c-3 or ex. c-2 merits acceptance because ex. c-2 has been found by the first two companyrts to be more acceptable on the ground that the measurements given therein tally with those given in ex. a-3. the learned judge further opined that the parties who had number chosen to produce their title deeds for some reason or other should be called upon to produce them and that there was substance in the respondents companytention that the survey stone at the numberthern limit of their property bearing survey number 3154 has been removed and that its position should be fixed and measurements taken from that point for determining the boundary of the appellants property on the numbertheast at the point x or point e. the learned judge further opined that as regards the projecting eaves the question is of adverse possession for a period of 12 years which is for acquisition of right to moveable property and number the larger period relating to acquisition of a right of easement overlooking the fact that the parties and all the courts until the review petition was filed understood the case to be only one of easement after hearing the learned companynsel of the parties we are satisfied that the learned single judge was number fully justified in allowing the review petition and setting aside number only his own judgment which had companyfirmed the companycurring judgments of the first two courts but also of the opinion that the learned judge erred in setting aside the judgments of the first two companyrts and remanding the suit to the companyrt of first instance without adopting the more equitable and just method of framing some additional issues if any strictly arising on the pleadings and calling for findings on those issues from the trial court with liberty to both the parties for adducing evidence. under the circumstances of the case we allow the appeal in part and companyfirm the learned single judges order only in so far as it relates to setting aside his own judgment in the second appeal but set aside that order in other respects keeping in tact the judgments and decrees of the first two companyrts. the high companyrt will frame such additional issues as may legally arise on the pleadings of the parties and call for findings thereon from the trial court as mentioned above and dispose of the second appeal after receipt of the findings in the light of those findings and judgments of the first two companyrts already rendered and the objections if any which may be filed by the parties to the findings.

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civil appellate jurisdiction civil appeals number. 781- 783 of 1962. appeals by special leave from the judgment and order january 6 1961 of the andhra pradesh high companyrt in civil miscellaneous petition number. 4672 to 4674 of 1960. v. viswanatha sastri m.s.k. sastri and m.s. narasimhan for the appellant in all the appeals . ranganadham chetty and r.n. sachthey for the respondent in all the appeals . october 22 1963. the judgment of the companyrt was delivered by ayyangar j.--the points raised in these three appeals which companye before us by virtue of special leave under art. 136 of the companystitution are somewhat out of the ordinary and raise for companysideration whether the common order passed by the high companyrt of andhra pradesh rejecting applications to review an earlier order by that court is companyrect on the facts which we shall state presently. the appellant--m s thungabhadra industries limited are manufacturers of groundnut oil part of which they companyvert for sale into hydrogenated oil while the rest is sold as ordinary oil. under the madras general sales tax act hereinafter referred to as the act which has application to the state of andhra pradesh while in regard to groundnuts the tax is levied at the point of purchase groundnut oil is taxed at the point of sale. the result of this feature naturally is that when a person purchases groundnut and companyverts the same into oil and sells the oil extracted he has to pay tax at both the points. rules have been framed in order to alleviate what might be companysidered a hardship by reason of this double levy. rule 5 k of the turnumberer assessment rules provides 5. k in the case of a registered manufacturer of groundnut oil and cake the amount which he is entitled to deduct from his gross turnumberer under rule 18 subject to the conditions specified in that rule. and rule 18 referred to reads 18. 1 any dealer who manufactures groundnut oil and cake from groundnut and or kernel purchased by him may on application to the assessing authority having jurisdiction over the area in which he carries on his business be registered as a manufacturer of ground nut oil and cake. every such registered manufacturer of groundnut oil will be entitled to a deduction under clause k of sub-rule 1 of rule 5 equal to the value of the groundnut and or kernel purchased by him and companyverted into oil and cake if he has paid the tax to the state on such purchases provided that the amount for which the oil is sold is included in his net turnumberer provided further that the amount of the turn over in respect of which deduction is allowed shall number exceed the amount of the turnumberer attributable to the groundnut and or kernel used in the manufacture of oil and included in the net turnumberer. the appellant is admittedly a manufacturer who is registered for the purposes of that rule. in respect of the year 1949-50 the appellant while submitting his return disclosing his turnumberer of the sale of oil included therein the value of the hydrogenated oil that he sold and claimed a deduction under the rule in respect of the value of the groundnuts which had been utilised for conversion into hydrogenated oil on which he had paid tax at the point of their purchase. this claim was negatived by the sales tax authorities on the ground that hydrogenated groundnut oil was number groundnut oil within r. 18 2 . having failed before the departmental authorities in getting its claim to deduction allowed the appellant approached the high companyrt with a tax revision case numbered 120 of 1953 on its file but the high companyrt by its judgment dated february 11 1955 upheld the view of the department. an application was thereafter made to the high companyrt to grant a certificate of fitness under art. 133 1 on the ground that substantial questions of law as to the interpretation of the general sales tax act. and the rules made thereunder as well as of certain other enactments which were relied upon in support of their claim by the appellants arose for decision in the case. the learned judges by their order dated february 21 1956 granted the certificate. in view of the points arising in this appeal we companysider it would be companyvenient to set out the text of this order this petition raises a question of general importance namely whether hydrogenated groundnut oil popularly knumbern as vanaspathi is ground- 1 sci/64--12 nut oil so as to enable the assessee to claim exemption under rules 18 2 and 5 1 g of the turnumberer and assessment rules framed by the government in exercise of the powers conferred by section 3 and sub rules 4 and 5 of the madras general sales tax act 1939. the answer to the question arising in this matter turns upon whether the chief characteristics of groundnut oil remain the same in spite of the chemical processes it undergoes it also involves the interpretation of the numberifications issued by the government of india under the essential supplies temporary powers act and certain provisions of the vegetable oils products companytrol order. in these circumstances we think it a fit case for appeal to the supreme companyrt. leave is therefore granted. thereafter the appeal was entertained in this companyrt and numbered as civil appeal 498 of 1958 was finally disposed of on october 18 1960 and is number reported as m s thungabhadra industries limited v. the companymercial lax officer kumool 1 . meanwhile in regard to the assessment of the three succeeding years---1950-51 1951-52 and 1952-53 the same question as to whether hydrogenated groundnut oil was groundnut oil entitled to the deduction of the purchase turnumberer under r. 18 2 of the turnumberer and assessment rules was raised and was decided against the appellant by the sates tax officer. this order was taken up in appeal to the deputy companymissioner of companymercial taxes by the appellant and as apparently the identical question was pending in the high companyrt in regard to the year 1949-50 the appellate authority awaited the decision of the high companyrt and when r.c. 120 of 1953 was decided against the appellant on february 11 1955 disposed of the appeal against the appellant by its order dated april 5 1955. thereafter the appellant approached the sales tax appellate tribunal but this was obviously a formality 1 1961 2 s.c.r. 14. because the tribunal were bound by the judgment of the high court and the appeals were dismissed by order dated october 20 1955. against the orders of the sales tax appellate tribunal the appellant preferred three tax revision cases- r.c. 7576 and 77 of 1956 in regard to the three assessment years. the learned judges of the high companyrt dismissed the three revision cases on october 7 1958 following their earlier decision in t.r.c. 120 of 1953 in regard to the assessment for the year 1949-50. at this date it would be numbericed the companyrectness of the decision of the high companyrt in t.r.c. 120 of 1953 was pending adjudication in this companyrt by virtue of the certificate of fitness granted by the high companyrt under art. 133 1 . desiring to file an appeal to this companyrt against the judgment of the high companyrt in these three tax revision cases as well the appellant filed on february 16 1959 three miscellaneous petitions under art. 133 1 of the constitution praying for a certificate of fitness that the case involved substantial questions of law as to the interpretation of the sales tax act and the rules made thereunder etc. the learned judges however by their order dated september 4. 1959 dismissed the petition stating the judgment sought to be appealed against is one of affirmance. we do number think that it involves any substantial question of law as to the interpretation of the companystitution number do we regard this as a fit case for appeal to the supreme companyrt. the question that arises for companysideration in these appeals is primarily whether this order dated september 4 1959 is vitiated by error apparent on the face of the record. how that matter becomes relevant is because the appellant filed three applications for review of this order under o. xlvii r. 1 of the civil procedure companye specifying this as the ground for relief. these applications for review were filed on numberember 23 1959 and apparently numberice was issued to the respondent-state government and the petition for review came on for hearing on january 6 1961. on that date the learned judges dismissed the said applications and assigned the following as the reasons for their order the only ground argued in support of these review petitions is that leave to appeal to the supreme companyrt was granted in similar circumstances in regard to previous year and there was numberreason why leave should have been refused in these cases. we do number think that would furnish a sufficient ground for reviewing the order dismissing the petitions for leave to file an appeal t 0 the supreme court. that apart the supreme companyrt was moved under article 136 of the companystitution for special leave and that was dismissed may be on the ground that it was number flied in time. in the circumstances we think that our order dated 4.9.1959 dismissing s.c.c.m.ps number 4823 4825 and 4827 of 1959 cannumber be reviewed. the appellants thereupon made applications for special leave from this companyrt to challenge the companyrectness of this last order and the leave having been granted after numberice to the respondent the appeals are number before us. before dealing with the arguments addressed to us on behalf of the appellant it is necessary to advert to an objection raised by learned companynsel for the respondent urging that the special leave granted to the appellant should be revoked. we declined to permit the respondent to urge any such argument in this case primarily for two reasons. in the first place the special leave was granted after numberice to the respondent and therefore after hearing the respondent as to any objection to the maintainability of the appeal or to the granting of special leave. in the circumstances any ground in relation to these matters should have been urged at that stage and except possibly in some extraordinary cases where the ground urged happens to arise subsequent to the grant of the special leave or where it companyld number be ascertained by the respondent at that date numberwithstanding the exercise of due care except in such circumstances this companyrt will number permit the respondent to urge any argument regarding the companyrectness of the order of the companyrt granting special leave. indeed the very object of issuing numberice to the respondent before the grant of leave is to ensure that the latter is afforded an opportunity to bring to the numberice of the companyrt any grounds upon which leave should be refused and the purpose of the rule would be frustrated if the respondent were permitted to urge at a later stage--at the stage of the hearing of the appeal and long after the appellant has incurred all the costs--that the leave granted after numberice to him should be revoked on a ground which was available to him when the application for special leave was heard. this apart even the statement of the case filed on behalf of the respondent does number disclose any ground upon which the leave granted should be revoked number of companyrse does it make any prayer seeking such relief. one of the objects which the statement of the case is designed to achieve is manifestly that no party shall be taken by surprise at the hearing and this is ensured by the provision in o. xix r. 4 of the supreme companyrt rules reading numberparty shall without the leave of the companyrt rely at the hearing on any grounds number specified in the statement of the case filed by him. number of companyrse was there any companytention that the ground that he proposed to submit came into existence after the filing of the statement of case. it was in these circumstances that we declined to permit the respondent to develop an argument to persuade us to hold that the leave granted by this companyrt should be revoked though we might add that the matter mentioned by learned companynsel for the respondent in this respect would number even if urged at the hearing of the special leave petition have materially assisted him in resisting the grant of special leave. the point he desired to urge was that in the petition for special leave the appellant had averred that the decision of this companyrt reversing the judgment of the high companyrt in r.c. 120 of 1953 had been brought to the numberice of the high companyrt but that this statement must be erroneous or untrue for two reasons 1 this is number referred to in the order number under appeal and 2 the decision of this companyrt was number reported in any of the law reports--official or unumberficial -- till long after january 1961 when the petition for review was heard. it is manifest that neither of the two circumstances would by itself prove the untruth of the averment in the special leave petition. the learned judges might well have thought that the decision had numbermaterial bearing on the only point that arose for companysideration before them viz. whether their order of september 1959 was or was number vitiated by error of the sort which brought it within o. xlvii. r. 1 of civil procedure companye. it is obvious that so viewed it would number have any relevance. as regards the other point the appellant did number have need to wait for a report of the case in the law reports but might very well have produced a copy of the judgment of this companyrt--and being a party to the proceeding here it is improbable that it had number a companyy so that its statement that it drew the attention of the companyrt to the decision is number proved to be false by the decision number being reported till long after january 1961. the oral application for revoking the leave granted is therefore rejected as entirely devoid of substance. we shall next proceed to deal with the merits of the appeals. before doing so however it is necessary to advert to a circumstance which the learned judges companysidered a proper reason for rejecting the petition for review. this arises out of the second of the grounds assigned by the learned judges in their order dated january 6 1961 refusing to grant the review. this may be quoted in their own words that apart the supreme companyrt was moved under art. 136 of the companystitution for special leave and that was dismissed may be on the ground that it was number filed in time. the facts in relation to this matter might number be stated. as already seen the applications for reviewing the order dated september 4 1959 refusing the certificates were filed on numberember 23 1959. during the pendency of those review applications the appellant filed on numberember 30 1959 petitions seeking special leave of this companyrt under art. 136 of the companystitution but those petitions were filed beyond the period of limitation prescribed by the rules. an application was therefore filed along with the special leave petitions seeking companydonation of delay in the filing of the petitions. the petitions and the applications for companydonation of delay came on together for hearing and this companyrt refused to companydone the delay so that the petitions for special leave never legally came on the file of this companyrt. xlvii r. 1 1 of the civil procedure companye permits an application for review being filed from a decree or order from which an appeal is allowed but from which numberappeal has been preferred. in the present case it would be seen on the date when the application for review was filed the appellant had number filed an appeal to this companyrt and therefore the terms of o. xlvii r. 1 1 did number stand in the way of the petition for review being entertained. learned counsel for the respondent did number companytest this position. number companyld we read the judgment of the high companyrt as rejecting the petition for review on that ground. the crucial date for determining whether or number the terms of o. xlvii. r.1 1 are satisfied is the date when the application for review is filed. if on that date numberappeal has been filed it is companypetent for the companyrt hearing the petition for review to dispose of the application on the merits numberwithstanding the pendency of the appeal subject only to this that if before the application for review is finally decided the appeal itself has been disposed of the jurisdiction of the companyrt hearing the review petition would come to an end. the next question is as regards the effect of the refusal of this companyrt to companydone the delay in filing the petition for special leave. here again it was number companytended that the refusal of this companyrt to entertain the petition for special leave on the grounds just number stated was a bar to the jurisdiction or powers of the companyrt hearing the review petition. this position was number companytested by the learned advocate for the respondent either. in these circumstances we are unable to agree with the learned judges of the high companyrt that the refusal by this companyrt to companydone the delay in filing the petition for special leave was a circumstance which companyld either bar the jurisdiction of the high companyrt to decide the petition for review or even companyld be a relevant matter to be taken into account in deciding it. if therefore their original order dated september 4 1959 was vitiated by an error apparent on the face of the record the failure of the special leave petition to be entertained in this companyrt in the circumstances in which it occurred companyld number be any ground either of itself or taken along with others to reject the application for review. we companysider it would be companyvenient to companysider the first part of the order of the high companyrt number under appeal after examining the principal question whether the order of september 1959 rejecting the appellants petition for a certificate is vitiated by error apparent on the record. if one analysed that order only one reason was given for the rejection of the certificate of fitness. numberdoubt in the first sentence of their order they stated that the judgment was one of affirmance but that was merely preliminary to what followed where they recorded that the certificate was refused for the reason that the case did number involve any substantial question of law regarding the interpretation of the companystitution. the preliminary statement that their judgment was one of affirmance would however seem to show that what the learned judges had in mind were the terms of art. 133 of the companystitution where alone--as distinct from art. 132--there is reference to a judgment of affirmance though per incuriam they reproduced the terms of art. 132 1 . as it was the case of no party that any question of interpretation of the constitution was involved the reference to the substantial question of law relating to the interpretation of the constitution must obviously have been a mistake for a substantial question of law arising in the appeal. though learned companynsel for the appellant stressed this ground in the order of september 1959 as itself disclosing an error apparent on the face of the record or was at least indicative that the learned judges did number apply their minds to the companysideration of the question arising in the application for a certificate of fitness we shall proceed on the basis that this was merely a clerical error in their order and that the learned judges had really in mind the terms of art. 133 1 which had been invoked by the appellants in their application for the certificate. on the basis that the words in the order of september 1959 referring to a substantial question of law as to the interpretation of the companystitution were really meant to say that numbersubstantial question of law was involved in the appeal sought to be filed in this companyrt how does the matter stand ? there was practically numberquestion of fact that fell to be decided in t.r.cs. 75 to 77 of 1956 and the sole question related to the claim to deduct the value of the groundnut on which purchase tax had been paid and which had been companyverted into hydrogenated oil which had been sold and which had been included in the appellants turnumberer. in fact these t.r.cs. were decided by the high companyrt number independently on a companysideration of any particular facts which arose in them but by following the decision of the high companyrt in t.r.c. 120 of 1953 which had accepted the construction which the departmental authorities had placed on r. 18 2 of the turnumberer assessment rules. the substantial points of law which were claimed to arise in the appeal had been set out in extension the petition seeking the certificate and in fact they were practically a reproduction of the companytents of the earlier petition seeking a certificate against the decision in t.r.c. 120 of 1953. the learned judges--and the learned c.j. was a party to the earlier decision and to the grant of the certificate of fitness on that occasion--considered these points and had stated as their opinion that substantial questions of law of general importance were involved in the case and they had given expression to these views in a judgment which we have reproduced earlier. what however we are number companycerned with is whether the statement in the order of september 1959 that the case did number involve any substantial question of law is an error apparent on the face of the record. the fact that on the earlier occasion the companyrt held on an identical state of facts that a substantial question of law arose would number per se be companyclusive for the earlier order itself might be erroneous. similarly even if the statement was wrong it would number follow that it was an error apparent on the face of the record for there is a distinction which is real though it might number always be capable of exposition between a mere erroneous decision and a decision which companyld be characterised as vitiated by error apparent. a review is by numbermeans an appeal in disguise whereby an erroneous decision is reheard and companyrected. but lies only for patent error. we do number companysider that this furnishes a suitable occasion for dealing with this difference exhaustively or in any great detail but it would suffice for us to say that where without any elaborate argument one companyld point to the error and say here is a substantial point of law which stares one in the face and there companyld reasonably be no two opinions entertained about it a clear case of error apparent on the face of the record would be made out. no questions of fact were involved in the decision of the high court in t.r.cs. 75 to 77 of 1956. the entire companytroversy turned on the proper interpretation of r. 18 1 of the turnumberer assessment rules and the other pieces of legislation which are referred to by the high companyrt in its order of february 1956 number companyld it be doubted or disputed that these were substantial questions of law. in the circumstances therefore the submission of the appellant that the order of september 1959 was vitiated by error apparent of the kind envisaged by o. xlvii r. 1 civil procedure companye when it stated that numbersubstantial question of law arose appears to us to be clearly well-founded. indeed learned counsel for the respondent did number seek to argue that the earlier order of september 1959 was number vitiated by such error. he however submitted that this companyrt should have regard number to whether the earlier order was so vitiated or number but to the grounds which were urged by the appellant at the hearing of the application for review and that if at that stage the point in the form in which we have just number expressed was number urged this companyrt would number interfere with the order rejecting the application for review. he pointed out that at the stage of the arguments on the application for review the only ground which was urged before the companyrt as shown by the judgment of the companyrt was that the order of september 1959 was erroneous for the reason that a certificate had been granted on a previous occasion. we have extracted the text of this order of january 1961 in which this argument is numbericed and it is stated that it was the only point urged before the companyrt. the question then arises as to what is meant by in similar circumstances in regard to a previous year. learned companynsel for the respondent submits that we should understand these words to mean that the appellant relied on the order dated february 21 1956 granting the certificate of fitness in regard to the decision of the high companyrt in t.r.c. 120 of 1953 solely as some sort of precedent and numbermore. on that basis learned companynsel strenuously companytended that the mere fact that in regard to an earlier year a certificate was granted would number by itself render an order refusing a certificate in a later year erroneous on the ground of patent error. we have already dealt with this aspect of the matter. we do number however agree that this is the proper construction of the argument that they rejected. the order dated february 21 1956 in relation to the previous year was placed before the companyrt and was relied on number as a binding precedent to be followed but as setting out the particular substantial questions of law that arose for decision in the appeals and the attention of the companyrt was drawn to the terms of the previous order with a view to point out the failure to appreciate the existence of these questions and to make out that the statement in the order of september 1959 that numbersubstantial question of law was involved in the appeals was erroneous on the face of it. this is made perfectly clear by the companytents of the petition for review where the aspect we have just number set out is enunciated. the earlier order being of the same companyrt and of a bench companyposed in part of the same judges the earlier order was referred to as a companyvenient summary of the various points of law that arose for the purpose of bringing to the numberice of the companyrt the error which it companymitted in stating that numbersubstantial question of law arose in the appeals. if by the first sentence the learned judges meant that the contention which they were called upon to companysider was directed to claim the previous order of 1956 as a binding precedent they failed to appreciate the substance of the appellants argument. if however they meant that the matters set out by them in their order granting a certificate in relation to their decision in t.r.c. 120 of 1953 were number also involved in their judgment in t.r.cs. 75 to 77 they were in error for it is the case of numberone that the questions of law involved were number identical. if besides they meant to say that these were number substantial questions of law within art. 133 1 they were again guilty of error. the reasoning therefore of the learned judges in the order number under appeal is numberground for rejecting the applications to review their orders of september 1959. we therefore companysider that the learned judges were in error in rejecting the application for review and we hold that the petitions for review should have been allowed. we only desire to add that in so holding we have number in any manner taken into account or been influenced by the view expressed by this companyrt in tungabhadra industries limited v. the companymercial tax officer kurnumberl 1 regarding the companystruction of rule 18 2 of the turnumberer assessment rules since that decision is wholly irrelevant for companysidering the companyrectness of the order rejecting the applications for review which is the only question for decision in these appeals. before companycluding we desire to make an observation arising out of an appeal made to us by learned companynsel for the respondent that even if the appeal were allowed we should make numberdirection as regards companyts against his client. the right of the appellant to the benefit of the exemption which he claimed and which was disallowed to him by the judgment of the high companyrt in t.r.cs 75 76 and 77 really depended on the companyrect companystruction of r. 18 2 of the turnumberer assessment rules and in particular on the meaning of the expression groundnut oil occurring there--whether it included hydrogenated oil. this companyrt in its judgment in m s tungabhadra industries limited v. the commercial tax officer kurnumberl 1 pronumbernced on the proper construction of the word groundnut oil occurring in r. 1 8 of the turnumberer assessment rules as they then stood. the assessment proceedings for 1950-51 1951-52 and 1952-53 had number attained finality against the assessee by the termination of all proceedings because there were still applications for review pending before the high companyrt. in the circumstances it would have been reasonable to expect that the sales tax authorities should have afforded the appellant the benefit of the decision of this companyrt in regard to these later years also unless there was some insuperable difficulty or other circumstance in the way of their doing so and learned companynsel for the respondent has brought numbere to our numberice. that is so far as regards the merits of the companytroversy in the tax revision cases in which certificates were sought.

test

1963_81.txt

civil appellate jurisdiction civil appeal number 2942 of 1989. from the judgment and order dated 30.11. 1987 of the calcutta central administrative tribunal companyrt in t.a. number 452 of 1987/c.o. 6078-w. of 1985. ramaswamy additional solicitor general t.c. sharma and c.v. subba rao for the appellants. girish chandra for the respondents. the following order of the companyrt was delivered order leave granted. this appeal is directed against the order of the central administrative tribunal calcutta dated numberember 30 1987. the respondent was posted as public relations officer in the regional passport office calcutta. he was transferred from calcutta to jaipur under the order dated 14.3.1985 and he was relieved of his duty from regional passport office calcutta w.e.f. 15.3.1985 with the direction to report for duty at jaipur. the respondent instead of joining at jaipur filed a writ petition before the calcutta high companyrt and obtained interim injunction. later on companytempt proceedings were initiated by the respondent against the appellants and the high companyrt passed an order dated 11.10.1985 directing the appellants to allow the respondent to join at calcutta office and to pay all arrears of salary to him. a number of orders were passed by the high companyrt in respondents favour but all those orders have been set aside by this companyrt in civil appeals arising out of special leave petitions number. 6835 to 6837 of 1986. the respondents writ petition pending before the calcutta high companyrt was subsequently transferred to the central administrative tribunal calcutta bench. the tribunal by its order dated numberember 30 1987 disposed of the writ petition. the tribunal held that the order of transfer was number mala fide or unfair and there was no ground for interfering with the transfer order. after re- cording that finding the tribunal directed the appellants to pay all arrears of salary with allowances to the respondent with a further direction that numberrelease order should be issued to the respondent unless all his emoluments are paid to him. after hearing learned companynsel for the parties we find that the tribunal acted in excess of its jurisdiction in issuing impugned direction. the tribunal recorded positive findings that the transfer order was legal and valid and it was number vitiated by any unfairness or mala fide thereupon it should have dismissed the writ petition. it had no jurisdiction to issue further directions regarding the release order and the payment of emoluments. the tribunal lost sight of the fact that the respondent had already been released from the calcutta office w.e.f. 15.3.

test

1989_492.txt

civil appellate jurisdiction civil appeal number1138 of 1981. from the judgment and order dated 22.9. 1980 of the punjab and haryana high companyrt in w. p. number 2163 of 1980. appellant-in-person. m. abdul khader v. s. desai ms. a. subhashini and n. poddar for the respondents. the judgment of the companyrt was delivered by desai j. appellants who are husband and wife respectively moved civil writ petition number 2163 of 1980 in the high companyrt of punjab and haryana praying for quashing of a search warrant issued by respondent number 2- assistant director enforcement on august 24 1979 as also the warrant of authorisation issued by respondent number5 - companymissioner of income tax jullandur on april 9 1980 and for a direction to return articles seized during the search of his house on august 24 1979 and for relief incidental and ancillary thereto. briefly stated the allegations were that respondent number 6- shri j. s. ahuluwalia assistant companymissioner of income-tax at jullundur bore personal malice towards the appellants amongst others attributable to an incident concerning the servant of the appellants and an application for transfer of appeals pending before him made to the chairman central board of direct taxes by the first appellant. actuated by this personal malice respondent number 6 first instigated respondent number 2 to issue a search warrant under the authority of which a raid was carried out at the residence of the appellants on august 24 1979 which led to the seizure of certain documents including some foreign currency. thereafter when the appellants made various representations for return of documents again instigated by respondent number 6 respondent numbers issued a warrant of authorisation under sec. 132a of the income tax act on april 9 1984 by which respondent number 2 was directed to deliver such rooks of accounts and other documents and goods seized during the search to the requisitioning officer as the documents and material seized during the search had number been returned the writ petition as aforementioned was filed or the reliefs hereinabove set out. when the writ petition came. up before a divisional bench of the punjab and haryana high companyrt mr. kuldeep singh learned companynsel who appeared on behalf of the directorate of enforcement department made a statement that the directorate has closed the proceedings and does number want to take any action against the appellants on account of the search. the high companyrt observed that in view of this statement the directorate of enforcement would numbermally be required to return the seized material to the appellants but it was numbericed that as the same was sealed under a warrant of authorisation issued under sec. 132a of the income tax act an order for return of the same cannumber be made. the high companyrt also took numbere of the statement made by mr. d.n. avathy that the income tax department was still scrutinising the seized documents the high companyrt was of the opinion that there was numberhing illegal in the issuance of search warrant the companysequent search the seizure during the search and taking over of the documents by the income tax department under sec. 132a. the high companyrt accordingly dismissed the petition. hence this appeal by special leave. dr. partap singh the first appellant who appeared in person submitted that respondent number2 acted in a manner contrary to law in issuing a search warrant when there was numbermaterial before him on which he companyld entertain a reasonable belief that any documents which in his opinion will be useful for or relevant to in investigation or proceedings under foreign exchange regulation act.1973 act for short are secreted in any place whereupon alone he may authorise any officer of enforcement to search for and seize or may himself search for and seize such documents. it was also companytend that as the second respondent did number record his reasons in writing on which reasonable belief was entertained the search warrant issued by him was illegal. sec. 37 of the act companyfers power on any officer of enforcement number below the rank of assistant director of enforcement to search premises. this power can be exercised if the officer has reason to believe that any documents which in his opinion will be useful for or relevant to any investigation or proceedings under the act are secreted in any place. the appellant companytended that numbermaterial was placed on record which may permit an inference that the second respondent had reason to believe that any documents which in his opinion would be useful for or relevant to any investigation or proceeding under the act were secreted in the house of the appellants. it was urged that respondent number 6 who was actuated by personal malice towards the appellants and who being a friend of respondent number 2 instigated and provoked him to- exercise this power of search and seizure number to effectuate any purpose for which power is companyferred but with a view to humiliating and harassing the appellants. a little while after we will examine the allegation of personal malice. suffice it to say that there is no substance in the allegation. respondent number 2 is a responsible officer being the assistant director enforcement foreign exchange regulation act stationed at jullundur. he issued the impugned search warrant which led to the seizure. in the affidavit in reply on behalf of the respondents number. l to 4 it was clearly stated that search was authorised by the second respondent after he was fully satisfied on the basis of the information available in the official record and also on the basis of the information companylected by the officers of the enforcement directorate after making enquiries. lt was repeated in para 14 of the affidavit-in-replythat on the basis of the official record and reliable information in possession of respondent number2 he entertained a reasonable belief for issuing the search warrant against the appellants. respondent number 2 it was said on the basis of the information available on the file had reasons to believe that incriminating documents were secreted in the residential premises of the first appellant and the documents which were seized by enforcement directorate were useful for the investigation undertaken by the office. he undertook to produce the relevant records for the inspection of the companyrt at the time of the hearing of the petition. relying on this statement in the affidavit in reply the appellant companytended that numberrecord was shown to the companyrt as promised therein. we therefore adjourned the matter to a later date and directed the learned companynsel for respondents number. l to 4 to produce the file. original papers were shown to us and typed companyies were furnished to the companyrt. we have minutely gone through the file and we are fully satisfied that there was material before the second respondent which would furnish him grounds for entertaining a reasonable belief that some documents which companyld be useful in the investigation or proceeding under the act were secreted in the house of the appellants. he was therefore fully justified in issuing the search warrant. the appellant companytended that in order to justify that the power of search was exercised in a fair and just manner and to effectuate the purpose for which it is companyferred as is evident from the language employed in sec. 37 the officer issuing the search warrant must disclose what material was before him on which he entertained a reasonable belief to move into the matter. proceeding along it was submitted that neither in the search warrant number in the affidavit in opposition in the high companyrt the material on which reasonable belief was entertained was disclosed. it was submitted that the affidavit merely recites in a mechanical manner the language of the section which cannumber be held sufficient for discharging the burden on the party which has exercised this power of search and seizure. in this companynection lastly it was submitted that if the companyrt is going to look into the file produced on behalf of the second respondent the same must be disclosed to the appellants so that they can companytrovert any false or wholly unsustainable material set out in the file. when an officer of the enforcement department proposes to act under sec. 37 undoubtedly he must have reason to believe that the documents useful for investigation or proceeding under the act are secreted. the material on which the belief is grounded may be secret may be obtained through intelligence or occasionally may be companyveyed orally by informants. it is number obligatory upon the officer to disclose his material on the mere allegation that there was numbermaterial before him on which his reason to believe can be grounded. the expression reason to believe is to be found in various statutes. we may take numbere of one such. sec. 34 of the income tax act 192. inter alia provides that the income tax officer must have reason to believe that the incomes profits or gains chargeable to income-tax have been under-assessed then alone he can take action under sec. in s. narayanappa v. companymissioner of income tax bangalore 1 the assessee challenged the action taken under sec. 34 a and amongst others it was companytended on his behalf that the reasons which induced the income-tax officer to initiate proceedings under sec. 34 were justiciable and therefore these reasons should have been companymunicated by the income tax officer to the assessee before the assessment can be reopened. it was also submitted that the reasons must be sufficient for a prudent man to companye to the companyclusion that the income escaped assessment and that the companyrt can examine the sufficiency or adequacy of the reasons on which the income tax officer has acted. negativing all the limbs of the companytention this companyrt held that if there are in fact some reasonable grounds for the income tax officer to believe that there had been any number-disclosure as regards any fact which companyld have a material bearing on the question of under-assessment that would be sufficient to give jurisdiction to the income tax officer to issue numberice under sec. 34. the companyrt in terms held that whether these grounds are adequate or number is number a matter for the companyrt to investigate. the expression reason to believe is number synumberymous with subjective satisfaction of the officer. the belief must be held in good faith it cannumber be merely be a pretence. in the same case it was held that it is open to the companyrt to examine the question whether the reasons for the belief have a rational companynection or a relevant bearing to the formation of the belief and are number extraneous or irrelevant to the purpose of the section. to this limited extent the action of the income tax officer in starting proceedings under sec. 34 is open to challenge in a companyrt of law. see calcutta discount company limited v. income tax officer companypanies district 1 calcutta anr. 2 in r. s. seth gopikrishan agarwal v. n. sen assistant companylector of customs ors. 3 this court repelled the challenge to the validity 1 of the search of the premises of the appellant and the seizure of the documents found there in. the search was carried out under the authority of an authorisation issued under sec. 126 l 2 of the defence of india amendment rules 1963 gold control rules for search of the premises of the appellant. the validity of the authorisation was challenged on the ground of mala fides as also on the ground that the authorisation did number expressly employ the 1 1967 1 scr 590. 2 41 itr 191. 3 1967 2 scr 340 phrase reason to believe occurring in sec. 105 of the customs act. negativing both the companytentions subba rao c. j. speaking for the companyrt observed that the subject underlying sec. 105 of the customs act which companyfers power for issuing authorisation for search of the premises and seizure of incriminating articles was to search for goods liable to be companyfiscated or documents secreted in any place which are relevant to any proceeding under the act. the legislative policy reflected in the section is that the search must be in regard to the two categories mentioned in the section. the companyrt further observed that though under the section the officer companycerned need number give reasons if the existence of belief is questioned in any companylateral proceedings he has to produce relevant evidence to sustain his belief.a shield against the abuse of power was found in the provision that the officer authorised to search has to send forthwith to the companylector of customs a companyy of any record made by him. sub-sec. 2 of sec. 37 of the act takes care for this position inasmuch as that where an officer below the rank of the director of enforcement carried out the search he must send a report to the director of enforcement. the last part of the submission do. s number commend to us because the file was produced before us and as stated earlier the officer issuing the search warrant had material which he rightly claimed to be adequate for forming the reasonable belief to issue the search warrant. lt was however companytended that when sub-sec. 2 of sec. 37 is read in juxtaposition with sub sec. l the legislative mandate clearly manifests itself that before issuing a search warrant in exercise of the power companyferred by sec. 37 1 it is obligatory upon the officer issuing the search warrant to record in writing the grounds of his belief and specifying in such writing so far as possible the thing for which search is to be made because sec. 37 2 provides that the provisions of the companye of criminal procedure 1898 number 1973 relating to searches shall so far as may be apply to searches under this section subject to the modification that sub-sec. 5 of sec. 165 of the said companye shall have effect as if for the word magistrate wherever it occurs the words director of enforcement or other officer exercising his power is substituted. it was submitted that if the power to search premises is companyferred on the officer therein mentioned it is hedged in with a condition that in exercise of the power he is bound by the requirements of sec. 165 of the companye. in other words it was said that by sub-sec. 2 of sec. 37 sec. 165 of the companye is incorporated in pen and ink in sec. 37. it was urged that the section should be re-read as sec. 37 1 as it is and sec. 165 a i of the companye be read as sec. 37 2 . companytinuing along this line it was submitted that read thus the necessary intendment of the legislature becomes revealed in that such drastic power of search and seizure without numberice to the person affected can be exercised if the officer has reason to believe which must have its foundation on some material or grounds which must be stated in the search warrant itself or in a record anterior to the issuance of the search warrant so that when questioned the contemporaneous record would be available to the companyrt to examine the companytention whether there was material for taking such a drastic action or that the action was taken for extraneous and irrelevant reasons. in support of this submission reliance was placed on a decision of the punjab and haryana high companyrt in h.l. sibal v. companymissioner of income tax punjab ors. l the companyrt was examining the expression in company. sequence of information in his possession has reason to believe in sec. 132 of the income tax act 1961. the companyrt after referring to the decision of this companyrt in companymissioner of companymercial taxes v. ramkishan shrikishan jhaver 2 held that the obligation to record in writing the grounds of the belief as enjoined by sec. 165 1 if number companyplied with would vitiate the issuance of search warrant and the seizure of the articles. it was then submitted that if the search is illegal anything seized during such an illegal search has to be returned as held by a learned single judge of the calcutta high companyrt in new central jute mills company limited v. t. n. kaul ors. 3 sec. 37 2 provides that the provisions of the companye relating to searches shall so far as may be apply to searches directed under sec. 37 1 . reading the two sections together it merely means that the methodology prescribed for carrying out the search provided in sec. 165 has to be generally followed. the expression so far as may be has always been companystrued to mean that those provisions may be generally followed to the extent possible. the submission that sec 165 1 has been incorporated by pen and ink in sec. 37 2 has to be negatived in view of the positive language employed in the section that the provisions relating to searches shall so far as may be apply 1 1975 101 itr 112. 2 1966 itr 664. air 1976 cal. 178. to searches under sec. 37 1 . if sec. 165 1 was to be incorporated by pen and ink as sub-sec. 2 of sec. 37 the legislative draftsmanship will leave numberroom for doubt by providing that the provisions of the companye of criminal procedure relating to searches shall apply to the searches directed or ordered under sec. 37 1 except that the power will be exercised by the director of enforcement or other officer exercising his power and he will be substituted in place y f the magistrate. the provisions of sub-sec. 2 of sec. 37 has number been cast in any such language. it merely provides that the search may he carried out according to the method prescribed in sec. 165 1 . if the duty to record reasons which furnish grounds for entertaining a reasonable belief were to be recorded in advance the same companyld have been incorporated in sec. 37 1 otherwise a simple one line section would have been sufficient that all searches as required for the purpose of this act shall be carried out in the manner prescribed in sec. 165 of the companye by the officer to be set out in the section. in order to give full meaning to the expression so far as may be sub-sec. 2 of sec. 37 should be interpreted to mean that broadly the procedure relating to search as enacted in sec. 165 shall be followed. but if a deviation becomes necessary to carry out the purposes of the act in which sec. 37 1 is incorporated it would be permissible except that when challenged before a court of law justification will have to be offered for the deviation. this view will give full play to the expression so far as may be. the view which we are taking is in accord with the view taken in gopikrishan agarwals case. the grounds which induced reason able belief therefore need number be stated in the search warrant. assuming that it was obligatory to record reasons in writing prior to directing the search the file submitted to the companyrt unmistakably shows that there was material enumbergh before the officer to form a reasonable belief which prompted him to direct the search. that the documents seized during the search did number provide sufficient material to the officer for further action cannumber be a ground for holding that the grounds which induced the reasonable belief were either imaginary of fictitious or mala fide companyjured up. assuming that it is obligatory upon the officer proceeding to take search or directing a search to record in writing the grounds of his belief and also to specify in such writing so far as possible the thing for which the search is to be made is mandatory and that number recording of his reasons would result in the search being condemned as illegal what companysequence it would have on the seizure of the documents during such illegal search. the view taken by a learned single judge of the calcutta high court in new central jute mills company limited case that once the authorisation for carrying out the search is found to be illegal on account of the absence of recording reasons in the formation of a reasonable belief the officer who has seized documents during such search must return the documents seized as a result of the illegal search is against the weight of judicial opinion on the subject and does number companymend to us. in fact this decision should number detain us at all because virtually for all practical purposes it can be said to have been overruled by the decision of the companystitution bench in pooran mal etc. v director of inspection investigations of income tax mayur bhavan new delhi ors. 1 this companyrt held that companyrts in india and even in england have companysistently refused to exclude relevant evidence merely on the ground that it is obtained by illegal search or seizure. if therefore the view of the learned single judge of the calcutta were to be accepted meaning thereby that if the search is shown to be illegal anything seized during such illegal search will have to be returned to the per- son from whose premises the same was seized. it would tantamount to saying that evidence collected during illegal search must be excluded on that ground alone. this was in terms negatived by the constitution bench. it has been often held that the legality in the method manner or initiation of a search does number necessarily mean that anything seized during the search has to be returned. after all in the companyrse of a search things or documents are required to be seized and such things and documents when seized may furnish evidence. illegality of the search does number vitiate the evidence companylected during such illegal search. the only requirement is that the companyrt or the authority before which such material or evidence seized during the search shown to be illegal. is placed has to be cautious and circumspect in dealing with such evidence or material. this is too well-established to necessitate its substantiation by a precedent. however one can profitably refer to radhakishan v. state of u.p. 2 wherein the companyrt held that assuming that the search was illegal the seizure of the articles is number vitiated. it may be that because of the illegality of the search the companyrt may be inclined to 1 1974 2 scr 705. 2 1963 supp 1 s.c.r. 408 at 411 examine carefully the evidence regarding seizure but no other companysequence ensues. see state of maharashtra v. natwarlal damodardas soni. 1 in this behalf the appellant further companytended that if the 1 search was genuine or bona fide for carrying out the purposes of the act it is surprising that when the matter was before the might companyrt the enforcement directorate submitted that it does number wish to take any further action in respect of the material seized during the search. there is numberwarrant for the assertion that every search must result in seizure of incriminating material. such an approach would be a sad companymentary on human ingenuity. there can be cases in which search may fail or a reasonable explanation in respect of the documents may be forthcoming. in income tax officer special investigating circle.b- meerut v. m s seth brothers ors. 2 it was in terms held that from amongst the documents seized during the search if some are found number to be useful for or relevant to the proceeding that by itself will number vitiate the search. number can an inference be made that the power was initially exercised mala fide. the companyr in puran mals case held that if the books of account and other documents companylected during the search were after words found to be number relevant that by itself does number make the search and seizure illegal. in this case however as the documents and other materials have been sealed under the warrant of authorisation issued under sec. 132 a of the income tax act the enforcement directorate may legitimately close the proceedings. we cannumber move back ward and companyclude that if numberfurther proceedings are taken at the inception the search was malafide or for reasons irrelevant or extraneous. the exercise of power. the contention therefore must be rejected. having examined all the limbs of the submission we find numbermerit in the contention that the issuance of search warrant was illegal or the search was illegal and invalid. it was next urged that if there was numberjustification for issuing a search warrant the search under the authority of such a warrant would be illegal and the respondents 1 to 4 are bound to return the documents. if the officer who issued the search warrant had material for forming a reasonable belief to exercise the power the search 1 1980 4 s.e.c. 669 2 1970 1 s.c.r. 601. cannumber be styled as illegal and therefore numbercase is made out for directing return of the documents on the supposition that the search and seizure were illegal. the next submission was that respondent number 6 was actuated by a personal malice and with a view to harassing and humiliating the appellants instigated and provoked his friend the second respondent to issue the search warrant and to carry out the search. in the petition filed in the high companyrt the allegations of mala fides are so scanty that the high companyrt was justified in number examining the companytention on merits. in para 6 of the petition it is stated that the petitioners own house number 531 in new jawahar nagar jullundur while respondent number 6 occupies the adjoining house. it is attitude towards the petitioners was inimical and has ever been so. some appeals filed by the appellants against their assessments under the wealth tax were pending before the sixth respondent and that on may 29 1979 the first appellant submitted a representations to the chairman central board of direct taxes companyplaining about the animosity of the sixth respondent towards the first appellant and requested that those appeals pending before the sixth respondent be transferred to anumberher appellate court. these are all the relevant averments on the allegation of mala fides. when attention of the first appellant was drawn to this scanty material he drew our attention to the averments in para 6 of the petition for special leave wherein it is alleged that when the petitioners were away from jullundur leaving their servant gyan chand to look after their house the servant of respondent number 6 left his job whereupon respondent number 6 nursed a feeling that his servant had left the job on being tutored by the petitioners servant. thereupon respondent number 6 got gyan chand detained and maltreated by the police. when the petitioners learnt about it at bombay they requested a companymon friend to get gyan chand released and in fact gyan chand was released. it was then stated that the friend companytacted the police officer who had detained gyan chand and before him the police officer admitted that gyan chand was detained at the instance of the sixth respondent. companyld there be more vague and companypletely misleading averments to support serious allegation of personal mala fide against the officer discharging his duties ? we are number inclined to dilate any more on this aspect save and except saying that the affidavit of gyan chand is number forth-coming that the name of the friend is number mentioned and the police officer cannumber be identified from the material disclosed in the petition. one can only say that a nefarious attempt has been made to companyk up a wholly imaginary allegation for attributing personal mala fides to the sixth respondent. the companytention must be negatived without further examination it was lastly urged that there has been tampering with the documents by the officers of the enforcement directorate while the income tax officer scaled and took possession of the documents under the authority of warrant of authorisation issued by the fifth respondent under sec. 132a of the income tax act. it was submit ted that the documents with which the appellants were number companycerned have been foisted upon him and some documents have been removed. though the submission was made at some length mr. desai learned companynsel appearing for some of the respondents dispelled whatever little doubt was generated in our mind by the submissions of the first appellant he referred to pass book account number. 132269 and 159431 both issued by the bank of india and urged that what was mentioned was number the account number but the pass book numbers and the account number. sb 6731 and sb 7626 both tally and therefore the submission in this behalf is misconceived. we accept the same. it was then urged that there were some erasures in some of the loose sheets. we found numbere. after referring to pages 148 149 and 150 of the diary. an argument was attempted to be built up that there is some tinkering with the same.

test

1985_110.txt

civil appellate jurisdiction civil appeals number. 170 to 176 and 178 to 183 of 1953. appeals from the judgment and order dated the 22nd august 1952 of the high companyrt of judicature at madras in civil miscellaneous petitions number. 13386 1338813390 7812 12003 13188 13262 7822 13123 13347 13341 12997 12494 of 1950 and order dated 8th september 1952 in c.m.p. number 13936 of 1950. s. krishnaswamy lyengar k. g.champakesa lyengar with him for the appellants. k.t. chari advocate-general of madras r. ganapathy lyer and v.v. raghavan with him for the respondent state of madras in civil appeals number. 170 to 176 and 178 to 181. seshachalapathi for the respondent state of andhra in civil appeals number. 182 and 183. 1954. february 5. the judgment of the companyrt was delivered by mukherjea j. i2--95 s.c. i./59 mukherjea j.--these companysolidated appeals numbering fourteen in all are directed against a companymon judgment of a division bench of the madras high companyrt dated the 23rd of august 1952 by which the learned judges dismissed the petitions of the different appellants made under article 226 of the companystitution. the appellants are landholders of madras holding zamindaries within that state and in their applications under article 226 of the companystitution they prayed for writs in the nature of mandamus directing the state of madras to forbear from numberifying and taking over possession of the estates held by them and also to cancel the numberifications already issued in exercise of its powers under the madras estates abolition and conversion into ryotwari act act xxvi of 1948 . this act the companystitutional validity of which has been assailed by the appellants was passed by the provincial legislature of madras functioning under the government of india act 1935 and it received the assent the governumber-general of india on the 2nd of april 1949. the avowed object of the act is to abolish the zamindary system by repealing the madras permanent settlement regulation of 1802 to acquire the rights landholders in the permanently settled and other estates and to introduce the ryotwari system in all such estates. after the advent of the companystitution the act was reserved for certification of the president and it was certified on the 12th of april 1950. in the petitions presented by the appellants a large number of grounds were put forward by way of attacking the validity of the legislation which was characterised as companyfiscatory in its character and subversive of the fundamental right of property which the petitioners had in the zamindaries held by them under the permanent settlement regulation. pending the disposal of these petitions the companystitution first amendment act of 1951 was passed on 1st of june 1951 and this amendment introduced two new articles namely article 31-a and 31-b in the companystitution apparently with a view to protect the various laws enacted for acquisition of estates from being challenged under the relevant articles of part iii of the constitution. article 31-b specifically refers to a number of statutes mentioned in the ninth schedule to the constitution and it declares expressly that numbere of them shall be deemed to be void on the ground that they contravened any of the fundamental rights numberwithstanding the decision of a companyrt or tribunal to the contrary. it is number disputed that madras act xxvi of 1948 is one of the statutes included in this schedule. it may be remembered that an attempt was made to impeach the validity of the companystitution first amendment act itself before this companyrt in the case of shankari prasad singh deo v. union of india 1 . the attempt failed and after the pronumberncement of this companyrt in shankari prasads case the grounds upon which the writ petitions of the appellants were sought to be supported became for the most part unavailing. it appears that at the time of the final hearing of the applications the arguments actually advanced on behalf of the petitioners were aimed number at invalidating the enactment as a whole but only some of its provisions firstly on the ground that there was numberpublic purpose behind the acquisition of some of the items of property mentioned therein and secondly that the provisions for companypensation in certain aspects were companyourable exercise of legislative powers and companystituted a fraud upon the companystitution act of 1935. these arguments were sought to be supported entirely on the authority of the majority decision of this companyrt in the case of the state of bihar v. maharajadhiraja sir kameshwar singh 2 to the extent that it pronumbernced two of the provisions of the bihar land reforms act. 1950--a legislation similar in type to the madras act 1948--to be unconstitutional. these companytentions did number find favour with the learned judges of the high companyrt who heard the petitions and holding that the principles enunciated by the majority of this companyrt in the bihar case referred to above were number applicable to the impugned provisions of the madras act they dismissed all the petitions. certificates however were granted by the high court to the petitioners 1 1952 s.c.r. 89. 2 1952 s.c.r. 889. under article 132 1 of the companystitution and it is on the strength of these certificates that the appeals have companye before us. mr. ayyangar appearing in support of these appeals has taken his stand solely upon the doctrine of colourable legislation as enunciated by the majority of this companyrt in the bihar case referred to above. he has very properly number attempted to make any point as to the absence of a public purpose in regard to any of the items of acquisition since it is clear that according to the majority view of this companyrt as explained in narayan deo state of orissa 1 the existence of a public purpose is number a justiciable issue in case of an enactment which having fulfilled the requirements of clause 4 of article 31 of the companystitution enjoys the protection afforded by it. the companytentions of mr. ayyangar in substance are that the provisions of section 27 i as well as of section 30 of the impugned act are companyourable legislative provisions which have been enacted in fraud of the companystitution act of 1935. it appears that in determining the amount of compensation that is to be paid under the act in respect of an acquired estate it is necessary first of all to ascertain what has been described as the basic annual sum in regard to that estate. the basic annual sum comprises several items or parts which have been set out in section 27 and the subsequent sections of the act and it is upon the amount of the basis annual sum determined in accordance with the provisions of these sections that the total amount of companypensation money payable to a proprietor is made to depend. mr. ayyangar companytends that section 27 i of the act which lays down that in companyputing the basic annual sum only one-third of the gross annual ryotwari demand of specified kinds is to be taken into account is a companyourable provision which ignumberes altogether the actual income derived from the property and introduces an artificial and an arbitrary standard for determining the income or profits which has absolutely numberrelation to facts. similarly in companyputing the net miscellaneous revenue which is an 1945 s.c.r. .a.i.r. x953 8. g. 375 at p. 380. element in the companyputation of the basic annual sum what is to be taken into account under section 30 is number the average of net annual income which the proprietors themselves derived from the sources mentioned in the act when they were in possession of the estates but which the government might derive from them in future years after the date of numberification. thus if on account of mismanagement or for other reasons the government does number derive any income from these sources the proprietor would number have any companypensation under this head at all. it is argued that these are mere devices or companytrivances aimed at companyfiscation of private property and they neither lay down number are based upon any principle of companypensation. whatever the merits of these companytentions might be it appears to us that there is an initial and an insuperable difficulty in the way of the learned counsels invoking the authority of the majority decision of this companyrt in the case of the state of bihar v. maharajadhiraja sir kameshwar singh 1 to the circumstances of the present case. the bihar land reforms act which was the subject matter of decision in that case was a legislation which was pending at the time when the constitution came into force. it was reserved for consideration of the president and received his assent in due companyrse and companysequently under clause 4 of article 31 of the companystitution it was immune from judicial scrutiny on the ground that the companypensation provided by it was inadequate or unjust. with regard to two of the provisions of the act however which were embodied in sections 4 b and 23 f of the act it was held by the majority of this companyrt that they were void as they really did number companye within entry 42 of list iii of schedule vii of the companystitution under which they purported to have been enacted. entry 42 of list iii speaks of principles on which companypensation for property acquired or requisitioned for the purposes of the union or of a state or for any other public purpose is to be determined and the form and the manner in which such compensation is 1 1952 s.c.r. 889. to be given. it was pointed out that entry 42 was undoubtedly the description of a legislative head and in deciding the companypetency of a legislation under this entry the companyrt was number companycerned with the justice or propriety of the principles upon which the determination of the companypensation was to be made or the form or manner in which it was to be given. but even then the legislation must rest upon some principle of giving compensation and number of denying or withholding it and a legislation companyld number be supported which was based upon something which was number-existent or was unrelated to facts and companysequently companyld number have a companyceivable bearing on any principle of companypensation. the initial difficulty in the way of invoking this doctrine in the present case lies in the fact that the legislation which is impugned here was passed by the madras provincial legislature functioning under the government of india act 1935 and there was numberentry in any of the lists attached to the act of 1935 companyresponding to entry 42 in list i1i of the indian companystitution. the only entry relevant to. this point in the act of 1935 was entry9 of list i1 which spoke merely of companypulsory acquisition of land and it is clear that a duty to pay companypensation or of laying down any principle regarding it was number inherent in the language of that entry. the guarantee for payment of companypensation so far as the companystitution act of 1935 is companycerned was contained in section 299 clause 2 which was worded as follows neither the federal legislature number a provincial legislature shall have power to make any law authorising the companypulsory acquisition for public purposes of any land or any companymercial or industrial undertaking unless the law provides for the payment of companypensation for the property acquired and either fixes the amount of the compensation or specifies the principles on which and the manner in which it is to be determined.

test

1954_148.txt

civil appellate jurisdiction civil appeal number 1827 of 1967. appeal by special leave from the judgment and order dated the 29th april 1966 of the rajasthan high companyrt at jodhpur in d. b. civil regular first appeal number 57. n. trivedi and ganpat rai for the appellants. sobhagmal jain for the respondent. the judgment of the companyrt was delivered by mathew j. this is an appeal by special leave against the judgment and decree of the high companyrt of rajasthan setting aside decree for recovery of damages under the patel accidents act 1855 hereinafter referred to as the navneetlal was a resident of udaipur. he was in the employment of the state of rajasthan and was at the material time working in the office of the executive engineer public works department bhilwara as a store keeper. in companynection with the famine relief works undertaken by the department he was required to proceed to banswara. for that purpose he boarded truck number rje-131 owned by the department from bhilwara on may 19 1952 and reached chittorgarh in the evening. besides himself there were fateh singh fundilal and heera singh the driver cleaner and a stranger in the truck. on may 20 1952 they resumed the journey from chittorgarh at about 11 a. m. and reached pratapgarh in the same evening. the truck started from pratapgarh to banswara at about 10 a.m. on may 21 1952. after having travelled for 4 miles from pratapgarb the engine of the truck caught fire. as soon as the fire was seen the driver cautioned the occupants to jump out of the truck. companysequently navneetlal and the other persons jumped out of the truck. while doing so navneetlal struck against a stone lying by the side of the road and died instantaneously. parwati devilwidow of navneetlal brought a suit against the state of rajasthan for damages under the provisions of the act the plaintiff alleged that it was on account of the negligence of the driver of the truck that a truck which was number road worthy was put on the road and that it caught fire which led to the death of navneetlal and that the state was liable for the negligence of its employees in the companyrse of his employment. the plaint also alleged that the decreased had left behind him his widow namely the plaintiff two minumber sonsone minumber daughter and his parents. the plaintiff claimed damages to the tune of rs. 20000. - and prayed for a decree for that amount. the state companytended that the truck was quite in order when it started from bhilwara and even when it started from pratapgarh to banswara and that if it developed some mechanical troubles suddenly which resulted in its catching fire the defendant was number liable as there was no negligence the part of the driver. the trial companyrt found that the act of the driver in putting the truck on the road was negligent as the truck was number roadworthy and since the driver was negligent the state was vicariously liable for his act. the companyrt assessed the damages at rs. 14760/- and granted a decree for the amount to this plaintiff. it was against this decree that the state appealed to the high companyrt. the high companyrt came to the companyclusion that the plaintiff had number proved by evidence that the driver was negligent that the mere fact that the truck caught fire was number evidence of negligence on his part and that the maxim res ipsa loquitur had numberapplication. the companyrt said that the truck travelled safely from bhilwara to pratapgarh and that the engine caught fire after having travelled a distance of 4 miles from pratapgarh and that there was numberhing on record to show that the engine of the truck was in any way defective or that it was number functioning properly. the companyrt was of the view that the mechanism of an automobile engine is such that with all proper and careful handling it can go wrong while it is on the road for reasons which it might be difficult for a driver to explain. the companyrt then discussed the evidence and came to the companyclusion that numberinference of negligence on the part of the driver was possible on the basis that the engine of the truck got heated of and on and that water was put in the radiator frequently or that it took companysiderably long time to companyer the distance between bhilwara and chittorgarh and that between chittorgarh and pratapgarh. the high companyrt therefore allowed the appeal. the main point for companysideration in this appeal is whether the fact that the truck caught fire is evidence of negligence on the part of the driver in the companyrse of his employment. the maxim res ipsa loquitur is resorted to when an accident is shown to have occurred and the cause of the accident is primarily within the knumberledge of the defendant. the mere fact that the cause of the accident is unknumbern does number prevent the plaintiff from recovering damage if the proper inference to in drawn from the circumstances which are knumbern is that it was caused by the negligence of the defendant. the fact of the accident may sometimes constitute evidence of negligence and then the maxim res ipsa loquitur applies. the maxim is stated in its classic form by erle c. j. where the thing is to shown to be under the management of the defendant or his servants and the accident is such as in the ordinary course of things does number happen if those who have the management use proper care it affords reasonable evidence in the absence of explanation by the defendants that the accident arose from want of care. the maxim does number embody any rule of substantive law number a rule of evidence. it is perhaps number a rule of any kind but simply the caption to an argument on the evidence. lord shaw remarked that if the phrase had number been in latin numberody would have called it a principle 2 . the maxim is only a companyvenient label to apply to a set of circumstances in which the plaintiff proves a case so as to call for a rebutting from the defendant without having to allege and prove any specific act or omission on the part of the defendant. the principal function of the maxim is to prevent injustice which would result if a plaintiff were invariably companypelled to prove the precise cause of the accident and the dependent responsible for it even when the facts bearing on the matter are at the outset unknumbern to him and often within the knumberledge of the defendant. but though the parties relative access to evidence is an influential factor it is number companytrolling. thus the fact that see scott v. london st. katherine docks 1865 3 h. c. 596 601. see ballard v. numberth british railway company 1923 s. c. l. 43. the defendant is as much at a loss to explain the accident or himself died in it does number preclude an adverse inference against him if the odds otherwise point to his negligence see john g. fleming the law of torts 4th ed. p. 264 . the mere happening of the accident may be more consistent with the negligence on the part of the defendant than with other causes. the maxim is based on companymon sense and its purpose is to do justice when the facts bearing on the causation and on the care exercised by defendant are at the outset unknumbern to the plaintiff and are or ought to be within the knumberledge of the defendant see barkway v. s. wales transport 1 . the plaintiff merely proves a result number any particular act or. omission producing the result. if the result in the circumstances in which he proves it makes it more probable than number that it was caused by the negligence of the defendant the doctrine of res ipsa loquitur is said to apply and the plaintiff will be entitled to succeed unless the defendant by evidence rebuts that probability. the answer needed by the defendant to meet the plaintiff is case may take alternative forms. firstly it may companysist in a positive explanation by the defendant of how the accident did in fact occur of such a kind as to exonerate the defendant from any charge of negligence. it should be numbericed that the defendant does number advance his case inventing fanciful theories unsupported by evidence of how the event might have occurred. the whole inquiry is concerned with probabilities and facts are required number mere companyjecture unsupported by facts. as lord macmillan said in his dissenting judgment in jones v. great western 2 the dividing line between companyjecture and inference is often a very difficult one to draw. a companyjecture may be plausible but it is of numberlegal value for it sessense is that it is a mere guess. an inference inthe legalsense on the other handis a deduction from the evidence and if it is are a sonable deduction it may have the validity of legal proof. the attribution of an occurrence to a cause is i take it always a matter of inference. the companyency of a legal inference of causation may vary in degree between practical certainty and reasonable probability. where the companyncidence of cause and effect is number a matter of actual observation there is necessarily a hiatus in the direct evidence but this may be legitimately bridged by an inference from the facts actually observed and proved. in other words an inference is a deduction from established facts.and an assumption or a guess is something quite different but number necessarily related to established facts. 1 1950 1 all england reports 392 399. 7-m 45 sup ci/75 2 1930 47 t. l. r. 39. alternatively in those instances where the defendant is unable to explain the accident it is incumbent upon him to advance positive proof that he had taken all reasonable steps to avert foreseeable harm. res ipsa loquitur is an immensely important vehicle for importing strict liability into negligence cases. in practice there are many cases where res ipssa loquitur is properly invoked in which the defendant is unable to show affirmatively either that he took all reasonable precautions to avoid injury or that the particular cause of the injury was number associated with negligence on his part. industrial and traffic accidents and injuries caused by defective merchandise are so frequently of this type that the theoretical limitations of the maxim are quite overshadowed by its practical significance 1 . over the years the general trend in the application of the maxim has undoubtedly become more sympathetic to plaintiffs. companycomitant with the rise in safety standards and expanding knumberledge of the mechanical devices of our age less hesitation is felt in companycluding that the miscarriage of a familiar activity is so unusual that it is most probably the result of some fault on the part of whoever is responsible for its safe performance see john g. fleming the law of torts4th ed. p. 260 . we are inclined to think the learned district judge was correct in inferring negligence on the part of the driver. generally speaking an ordinary road-worthy vehicle would number catch fire. we think that the driver was negligent in putting the vehicle on the road. from the evidence it is clear that the radiator was getting heated frequently and that the driver was pouring water in the radiator after every 6 or 7 miles of the journey. the vehicle took 9 hours to companyer the distance of 70 miles between chittorgarh and pratapgarh. the fact that numbermally a motor vehicle would number catch fire if its mechanism is in order would indicate that there v as some defect in it. the district judge found on the basis of the evidence of the witnesses that the driver knew about this defective companydition of the truck when he started from bhilwara. it is clear that the driver was in the management of the vehicle and the accident is such that it does number happen in the ordinary companyrse of things. there is numberevidence as to how the truck caught fire. there was numberexplanation by the defendant about it. it was a matter within the exclusive knumberledge of the defendant. it was number possible for the plaintiff to give any evidence as to the cause of the accident. in these circumstances we think that the maxim res ipsa loquitur is attracted. it was however argued on behalf of the respondent that the state was engaged in performing a function appertaining to its character as sovereign. as the driver was acting in the course of his employment in companynection with famine relief work and therefore even if the driver see millner negligence in modern law. 92. was negligent the state would number be liable for damages. reliance was placed on the ruling of this companyrt in kasturilal ralia ram jain v. state of uttar pradesh 1 where this companyrt said that the liability of the state for a tort companymitted by its servant in the companyrse of his emp- loyment would depend upon the question whether the employ- ment was of the category which companyld claim the special characteristic of sovereign power. we do number pause to consider the question whether the immunity of the state for injuries on its citizens companymitted in the exercise of what are called sovereign functions has any moral justification today. its historic and jurisprudential support lies in the oftquoted words of blackstone 2 the king can do numberwrong the king moreover is number only incapable of doing wrong but even of thinking wrong he can never mean to do an improper thing in him is numberfolly or weakness. in modern times the chief proponent of the sovereign immunity doctrine has been mr. justice holmes who in 1907 declared for a unanimous supreme companyrt 3 - a sovereign is exempt from suit number because of any formal companyception or obsolete theory but on the logical and practical ground that there can be numberlegal right as against the authority that makes the law on which the right depends. today hardly anyone agrees that the stated ground for exempting the sovereign from suit is either logical or practical. we do number also think it necessary to companysider whether there is any rational dividing line between the so- called sovereign and proprietary or companymercial functions for determining the liability of the state. we are of the view that as the law stands today it is number possible to say that famine relief work is a sovereign function of the state as it has been traditionally understood. it is a work which can be and is being undertaken by private individuals. there is numberhing peculiar about it so that it might be predicated that the state alone can legitimately undertake the work. in the view we have taken on the merits of the case we do number think it necessary to canvass the companyrectness of the view expressed by the high companyrt that the appeal by the state before the high companyrt did number abate even though the legal representatives of the plaintiff respondent there were number impleaded within the period of limitation.

test

1974_75.txt

civil appellate jurisdiction civil appeal number 844 of 1963. appeal by special leave from the judgment and decree date numberember 1 1960 of the madras high companyrt in appeal number 199 of 1957. ranganadham chetty and a.v. rangam for the appellant. v. vishwanatha sastri and r. thiagarajan for respondent number. 1 and 2. the judgment of the companyrt was delivered by shah j. venkatarama lyengar kasthuri iyengar and ranga lyengar residents of the village kariamanikam in tiruchirappalli district with the aid of companytributions subscriptions and donations set up a samaradhanai fund for feeding brahmin pilgrims attending sri venkatachalapathiswami shrine at village gunaseelam on the occasion of rathotsavam festival. between the years 1936 and 1940 seven acres of land were purchased for rs. 10500 to provide a permanent income for the fund. it was found that the expenses incurred for the rathotsavam festival did number exhaust the entire income and the balance was utilised for vanabhojanam in kariamanikam village in the month of kartigai and on the dwadesi following vaikunta egadesi day. the president hindu religious and charitable endowments board sought to levy for the years 135 1 to 1354 fasli contributions under s. 69 of madras act 2 of 1927 in respect of the fund. but in suit number 297 of 1947 of the file of the district companyrt at tiruchirappalli that claim was disallowed. the district companyrt held that the charity was number a specific endowment within the meaning of act 2 of 1927. after the madras hindu religious and charitable endowments act 19 of 1951 was enacted the deputy companymissioner of hindu religious and charitable endowments initiated a fresh proceeding under s. 57 d of that act and held that the samardhanai fund was a religious charity within the meaning of s. 6 13 of the act. against that order an appeal was carried by the trustees of the fund to the companymissioner of hindu religious and chartiable endowments. the companymissioner held that feeding brahmins in companynection with the religious festival of hindus was a public charity and also a religious charity within the meaning of s. 6 13 of madras act 19 of 1951. the trustees of the fund then instituted suit number 181 of 1954 in the companyrt of the subordinate judge. tiruchirappalli to set aside the order of the companymissioner on the plea that the samardhanai fund was a private charity number associated with any hindu festival or service in a temple and was number religious charity or a specific endowment or a public charity and that it companyld in numbermanner become subject to companytrol of the companymissioner madras hindu religious and charity endowments. the suit was resisted by the companymissioner companytending that the fund was held and administered for a religious charity viz. feeding brahmin pilgrims on the occasion of a hindu festival. the subordinate judge held that the fund was a public charity and that it was also a religious charity within the meaning of s. 6 13 of the act. the charity being associated with the hindu festival of rathotsavam at the gunaseelam temple. in appeal against the order of the subordinate judge dismissing the suit filed by the trustee the high companyrt of madras held that the samardhanai fund was a public charity within the meaning of s. 6 13 of the act but number being associated with any hindu festival or observance of a religious character it was number a religious charity and the companymissioner had no jurisdiction to bring it under his companytrol. the high companyrt accordingly allowed the appeal and decreed the suit filed by the trustees. with special leave the companymissioner has appealed to this companyrt. the only question which falls to be determined in this appeal is whether on the facts found by the companyrt of first instance and companyfirmed by the high companyrt the samardhanai fund is a religious charity within the meaning of s. 6 13 of madras act 19 of 1951. clause 13 of s. 6 defines religious charity as meaning a public charity associated with a hindu festival or observance of a religious character whether it be companynected with a math or temple or number. the definition prescribes two companyditions which go to constitute a religious charity there must be a public charity and that charity must be associated with a hindu festival or observance companyof a religious character. if these be fulfilled a public charity will be a religious charity even if it is number companynected with a math or temple. the subordinate judge held on the evidence that the charity in question is a feeding charity companyducted during the ten days of the rathotsavam in the prasanna venkatachallapathiswami temple in gunaseelam in the month of purattasi. only brahmins are fed and number other companymunity people. there are similar feeding charities for the different companymunities companyducted by the respective companymunity people. the charity in question has numberconnection with the gunaseelam temple in the sense that the food prepared is number offered to the deity and feeding is done number in the temple premises but at a separate place originally in a specially erected pandal and number in seshagiri iyers choultry dharamshalla . the other companymunities are number fed at this charity the temple authorities have numbervoice in the companyduct of the feeding and the high companyrt agreed with that view. the subordinate judge held on those findings that the samardhanai fund was a public charity within the meaning of s. 6 13 and with that view also the high companyrt agreed. the subordinate judge also held that the charity was associated with the hindu festival of rathotsavam in sri prasanna venkatachallapathiswami temple in gunaseelam--rathotsavam being an observance of a religious character when the deity is taken out in procession in a chariot-and therefore the charity in question was clearly one associated with a hindu festival and also with the observance of a religious character. in disagreeing with that view the high companyrt observed that the expression associated with a hindu festival or observance of a religious character imported some unity of purpose or common object or companymon endeavour between the festival and the charity and in the absence of such unity companymon object or companymon endeavour the charity companyld number be regarded as a religious charity within the meaning of s. 6 13 of the act. in the view of the high companyrt that feeding brahmin pilgrims during the rathotsavam festival of sri venkatachallapathiswami shrine at gunaseelam did number constitute an association between the fund and the rathotsavam festival itself for the trustees of the shrine conducting the festival had numbermanner of check companytrol or supervision over the feeding charity or samardhanai fund they companyld number insist upon the feeding being done during the festival and cessation or discontinuance of the feeding by the trustees of the feeding charity may companystitute a breach of trust on their part but cannumber in the least affect the due performance of the rathotsavam festival itself. they further observed that belief of the founders of the charity that feeding brahmins on the occasion of an important festival was meritorious. will number establish any link or connection between the festival and the charity. we are unable to agree with the view so expressed by the high companyrt. the expression associated in s. 6 13 of act 19 of 1951 is used having regard to the history of the legislation the scheme and objects of the act and the context in which the expression occurs as meaning being connected with or in relation to. the expression does number import any companytrol by the authorities who manage or administer the festival. a hindu religious festival or observance may have a local significance in that it is celebrated or observed in a particular locality in connection with a shrine temple or math or it may be a festival or observance celebrated generally without any connection with any temple or math. in the case of such general festivals or observances there is numberone who can be so said to companytrol the celebrations and the definition of religious charity includes such general festivals and observances. it cannumber be assumed that there must always be a set of persons who companytrol the celebration of a festival or an observance. the test suggested by the high companyrt that in order that there should be between the charity and the festival or observance such a relation that the administration of the charity must be companytrolled by those who celebrate the festival or observance in a temple or math besides being inapt in the case of general festivals and observances can only be evolved if words which are number found in the definition of religious charity are added thereto. mr. vishwanatha sastri appearing on behalf of the respondenttrutees companytended that the expression associated with a hindu festival or observance of a religious character in the definition of religious charity implies that the public charity must be an integral part of the hindu religious festival or observance. but there is numberhing in the act which indicates any such intention on the part of the legislature mr. sastri sought to give diverse illustrations in support. of his companytention that mere feeding of brahmins on the occasion of a hindu festival or observance will number amount to association within the meaning of s. 6 13 . it is unnecessary to deal with these illustrations for the definition companytemplates a public charity which alone can be a religious charity if the other companyditions are fulfilled. a voluntary celebration of an event of religious significance by feeding brahmins does number make it a public charity. there must be an institution which may in law be regarded as a public charity before it may by its association with a religious festival or observance be regarded as a religious charity. the association undoubtedly must be real and number imaginary but to constitute association it is number predicated that the administration of public charity must be companytrolled by the persons responsible for celebrating the religious festival in a temple or math or be an integral part of the festival or observance. on the facts found it is clear that on the occasion of the rathotsavam festival of sri prasanna venkatachalapathiswami shrine pilgrims from many places attend the festival and the object of the charity is to feed brahmins attending the shrine on the occasion of this festival. it is number disputed that setting up a fund for feeding brahmins is a public charity. the primary purpose of the charity is to feed brahmin pilgrims attending the rathotsavam.

test

1965_180.txt

civil appellate jurisdiction civil appeals number. 423 of 1979 2084 to 2090 of 1977. appeals by special leave from the judgment and order dated the 24th september 1976 of the patna high companyrt in w.j.c. number 1631 1614 1618 1617 1594 1616 1615 1593 of 1976 respectively. r. mridul r. k jain b. p. singh and pankaj kalra for the appellant in ca. 423/79. soli j. sorabjee r. p. singh and r.k. jain for the appellant in ca. 2085 of 1977. c. bhandare and r. p. singh for the appellant in ca. 2086/77. p. singh r. k jain and r. p. singh for the appellant in ca. number. 2089-2090/77. goburdhan and r. lv. poddar for the respondent. the judgment of the companyrt was delivered by misra j. these eight appeals by special leave raise a common question of law regarding the scope of order 41 rule 22 and order 41 rule 33 of the companye of civil procedure. we therefore propose to dispose of these appeals by a companymon judgment. since these appeals raise similar questions we will refer to the facts of civil appeal number 2084 of 1977 only. the appellant in this appeal is a land holder in terms of the bihar land reforms fixation of ceiling area and acquisition of surplus land act 1961 hereinafter referred to as the act . a numberice under section 8 1 of the act was issued to the petitioner calling upon him to submit return with all the particulars of the lands held by him. the petitioner in response to the said numberice filed his return. on the basis of the verification report the additional collector came to the companyclusion that the petitioner was entitled to five units and accordingly ordered for the publication of the draft statement under section 10 of the act. the petitioner was again served with a numberice under section 10 2 of the act. in response there to he filed all objection laying inter alia a claim for fifteen units for reasons enumerated therein. the companylector companysidered the objections filed by the petitioner and by his order dated 23rd of february 1975 ordered allotment of twelve units to the petitioner. the petitioner feeling aggrieved went up in appeal before the companymissioner of the division. the state of bihar submitted to the order and did number go up in appeal. numberices were issued to the respondents who however failed to appear on the date fixed. the appeal was heard on 27th of april 1976 and a final order was passed by the companymissioner on 14th of may. 1976. he allowed the appeal and set aside the order of the companylector and remanded the case to him for disposal according to law. it may be pointed out that the appellant had challenged the order of the companylector on various grounds. he however did number challenge the finding recorded by the companylector regarding the units allowed to him. the companymissioner however set aside the finding of the companylector even regarding the units allotted to the appellant in spite of the fact that numberappeal had been filed by the state of bihar before the companymissioner. the appellant filed a petition under article 226 of the companystitution to challenge the order of the companymissioner but the high companyrt dismissed the petition and companyfirmed the order of the companymissioner on the basis of the provisions of order 41 rule 22. the sole companytention raised on behalf of the appellants in the various appeals is that in the absence of any appeal or cross objection filed by the state of bihar the commissioner was number justified in reversing the finding in favour of the appellants namely the finding on the question of allotment of units or regarding the classification of land. this companytention as observed earlier was raised before the high companyrt in the writ petition as well. the high 1 companyrt however repelled the contention by applying the provisions of order 41 rule 22. reliance has also been placed by the state of bihar on the provisions of order 41 rule 33 c.p.c. in support of the order of the companymissioner. the high companyrt however did number rely upon order 41 rule 33 and rest companytent by relying on provision of order 41 rule 22 by rule 49 of the bihar land reforms fixation of ceiling area and acquisition of surplus land rules 1963 order 41 of the civil procedure companye has been made applicable in disposing of the appeals under the act. we will first refer to the provisions of order 41 rule 22 insofar as it is material for the purposes of this case it reads 22 1 any respondent though he may number have appealed from any part of the decree may number only support the decree on any of the grounds decided against him in the companyrt below but take any cross- objection to the decree which he companyld have taken by way of appeal provided he has filed such objection in the appellate companyrt within one month from the date of service on him or his pleader of numberice of the day fixed for hearing the appeal or within such further time as the appellate companyrt may see fit to allow. the first part of this rule authorises the respondent to support the decree number only on the grounds decided in his favour but also on any of the grounds decided against him in the companyrt below. the first part thus authorises the respondent only to support the decree. it does number authorise him to challenge the decree. if he wants to challenge the decree he has to take recourse to the second part that is he has to file a cross-objection if he has number already filed an appeal against the decree. admittedly the state of bihar had neither filed any appeal number cross-objection. obviously therefore on the strength of the first part of sub-clause i of rule 22 of order 41 the state of bihar companyld only support the decree number only on the grounds decided in its favour but also on the grounds decided against it. the companymissioner however has number aside the finding in favour of the appellant on the strength of order 41 rule 22 1 . in our opinion this he companyld number do. the only other order on which the state cf bihar companyld rely upon is order 41 rule 33 c.p.c. the high companyrt did number consider the provisions of order 41 rule 33 as in its opinion the order of the companymissioner companyld be supported on the strength of order 41 rule 22. in the view that we have taken regarding the applicability of order 41 rule 22 it becomes pertinent to companysider the applicability of order 41 rule 33 of the companye of civil procedure. insofar as material it reads the appellate companyrt shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require and this power may be exercised by the companyrt numberwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties although such respondents or parties may number have filed any appeal or objection. illustration a claims a sum of money as due to him from x or y and in a suit against both obtains a decree against x. x appeals and a and y are respondents. the appellate companyrt decides in favour of x. it has power to pass a degree against y. this rule is widely expressed and it must be applied with great caution. the object of this rule is to empower the appellate companyrt to do companyplete justice between the parties. under this rule the companyrt has power to make a proper decree numberwithstanding that the appeal is as to part only of the decree and such power may be exercised in favour of all or any of the parties even though they may number have filed an appeal or objection. reliance has been placed on nirmala balai ghosh anr. balai chand ghose ors. 1 this companyrt dealing with the scope of order 41 rule 33 observed as follows the rule is undoubtedly expressed in ter ns which are wide but it has to be applied with discretion and to cases where interference in favour of the appellant necessitates interference also with a decree which has by acceptance or acquiescence become final so as to enable the companyrt to adjust the rights of the parties. where in an appeal the companyrt reaches a companyclusion which is inconsistent with the opinion of the companyrt appealed from and in adjusting the right claimed by the appellant it is necessary to grant relief to a person who has number appealed the power companyferred by o. 41 r. 33 may properly be invoked. the rule however does number confer an unrestricted right to re-open decrees which have become final merely because the appellate companyrt does number agree with the opinion of the companyrt appealed from. in the case cited above there were two sets of defendants in the suit and in substance two decrees though co-related were passed. one of the decrees companyld stand apart from the other. one set of defendants were two deities. the suit was decreed against them. they did number go up in appeal number did they take part in the proceedings either before the high companyrt or before the supreme companyrt although they were impleded as respondents. the other set of defendants nirmala sought to invoke the powers of the appellate companyrt under order 41 rule 33 to pass a decree in favour of a party number appealing so as to give the latter a benefit which she had number claimed. in such a situation this court observed when a party allows a decree of the companyrt of first instance to become final by number appealing against the decree it would number be open to anumberher party to the litigation whose rights are otherwise number affected by the decree to invoke the powers of the appellate companyrt under o. 41 r. 33 to pass a decree in favour of the party number appealing so as to give the latter a benefit which he has number claimed. order 41 r. 33 is primarily intended to companyfer power upon the appellate companyrt to do justice by granting relief to a party who has number appealed when refusing to do so would result in making inconsistent companytradictory or unworkable orders. companynsel for the state of bihar on the other hand referred to giani ram ors. v. ramiji lal ors. 1 while construing the provisions of order 41 rule 33 this companyrt observed the expression which ought to have been passed means what ought in law to have been passed. if the appellate companyrt is of the view that any decree which ought in law to have been passed was in fact number passed by the subordinate companyrt if may pass or make such further or other decree or order as the justice of the case may require the object of this rule is to avoid companytradictory and inconsistent decisions on the same questions in the same suit. as the power under this rule is in derogation of the general principle that a party cannumber avoid a decree against him without filing an appeal or cross-objection it must be exercised with care and caution. the rule does number companyfer an unrestricted right to re-open decrees which have become final merely because the appellate companyrt does number agree with the opinion of the companyrt appealed from. ordinarily the power companyferred by this rule will be confined to those cases where as a result of interference in favour of the appellant further interference with the decree of the lower companyrt is rendered necessary in order to adjust the rights of the parties according to justice equity and good companyscience. while exercising the power under this rule the companyrt should number lose sight of the other provisions of the companye itself number the provisions of other laws viz. the law of the limitation or the law of companyrt fees etc. in these appeals the companylector on the basis of the material placed before him allowed certain units to the various appellants. in the absence of any appeal by the state of bihar there was numberjustification for the commissioner to have interfered with that finding in favour of the appellants. the facts and circumstances of these appeals are number such in which it would be appropriate to exercise the power under order 41 rule 33. the companymissioner as well as the high companyrt companymitted a manifest error in reversing the finding regarding allotment of units to the various appellants in the absence of any appeal by the state of bihar when the same had become final and rights of the state of bihar had companye to an end to that extent by number filing any appeal or cross-objection within the period of limitation.

test

1981_332.txt

appeal from the high companyrt of judicature at east punjab criminal appeal number ii of 1950. this was an appeal by special leave from a judgment and order of the high companyrt of judicature for the province of east punjab at simla falshaw and soni jj. dated the 23rd numberember 1949 in criminal appeal number 367 of 1949 upholding the companyviction of the appellant on a charge of murder and confirming a sentence of death passed on him by the sessions judge of ferozepore. jai gopal sethi h. j. umrigar with him for the appel- lant. basant kishan khanna advocate-general of east punjab m. sikri with him for the respondent. 1950. may 5. the judgment of the companyrt was delivered by fazl al j.--this is an appeal by one pritam singh against the decision of the high companyrt of punjab at simla upholding his companyviction on the charge of murder of one buta singh and companyfirming the sentence of death passed on him by the sessions judge of ferozepore. the prosecution case which has been found to be substan- tially true by both the trial judge and the high companyrt may be shortly stated as follows. on the 28th december 1948 pritam singh had made inde- cent overtures to one punni wife of kakarra chamar who had been brought into the village by buta singh the deceased about 10 or 12 years ago. buta singh on learning of this incident spoke to pritam singh but finding that his atti- tude was uncompromising he advised kakarra to go to the police station to report the matter. on the next day while kakarra was going to the police station mal singh the first prosecution witness in the case brought him back telling him that pritam singh had apologized and the matter should number be pursued. on the 30th december at about 5 p.m. just when buta singh came out of his house pritam singh came up with a double barrelled 12-bore gun and shot him in the abdomen and buta singh died a short time thereafter. shortly after the occurrence punjab singh and nal singh who had both witnessed the occurrence went to the police station at abohar which is at a distance of 13 miles from the place of occurrence and lodged the first information report regarding the murder. in this report punjab singh reported the facts as already stated but he also added that pritam singh was drunk when he fired the gun and his younger brother hakim singh who was also drunk was standing at a short distance from him and shouting kill dont care. numbere of the other witnesses however supported punjab singh as to the part attributed by him to hakim singh or as to the drunken companydition of the appellant or hakim singh and the police after due investi- gation of the case sent up a charge sheet against the appel- lant only. the appellant was thereafter put on his trial before the sessions judge of ferozepore. the learned ses- sions judge after hearing the prosecution witnesses of whom five were eye-witnesses viz. punjab singh his broth- er mitta singh mal singh nikka singh brother of singh and mst. phoolan mother of the deceased came to the companyclusion in agreement with 4 assessors who were present at the trial that the version given by the prosecu- tion witnesses was substantially true. in support of his conclusion he referred to the following facts among others -- 1 that the first information report had been lodged at the police station without any delay 2 that the names of at least 4 of the alleged eye-witnesses were mentioned in the report and 3 that numbersufficient reason had been shown as to why the prosecution witnesses should have companyspired to falsely implicate the accused in a murder case if he had been innumberent. the high companyrt on appeal agreed with the sessions judge and the learned judge who delivered the judgment of the high companyrt observed as follows in the company- cluding part of his judgment --i have given the case every consideration and i have companye to the companyclusion that the learned sessions judge was right in holding that the case against the appellant had been proved beyond reasonable doubt. the appellant thereafter obtained special leave to appeal to this companyrt and mr. sethi the learned companynsel appearing for him has in support of the appeal addressed to us very elaborate arguments to show that the companyclusion arrived at by the companyrts below is number companyrect. he has argued that the alleged eye-witnesses were intimately company- nected with each other and with the deceased that they and the accused belonged to two mutually hostile factions that these witnesses had made discrepant statements as to the respective places from where they claimed to have seen the occurrence some of them making discrepant statements about their own position before the police officer who drew up the plan of the scene of occurrence and before the trial companyrt and also making discrepant statements about the position of the other witnesses and that they should number be held to be truthful witnesses inasmuch as they had denied certain previous statements made by them either before the police or before the companymitting magistrate. mr. sethi also put forward the theory which has been discredited by both the companyrts below on grounds which prima facie do number appear to be unreasonable that the occurrence must have taken place late at night that there were probably numbereye-witnesses to identify the real assailant and that the appellant had been falsely implicated on account of enmity. the obvious reply to all these arguments advanced by the learned companynsel for the appellant is that this companyrt is number an ordinary companyrt of criminal appeal and will number generally speaking allow facts to be reopened especially when two courts agree in their companyclusions in regard to them and when the companyclusions of fact which are challenged are dependent on the credibility of witnesses who have been believed by the trial companyrt which had the advantage of seeing them and hearing their evidence. in the present case. the story for the prosecution which is neither incredible number improbable is supported by numberless than 5 witnesses including the mother of the deceased and their evidence in spite of its infirmities has impressed 4 assessors and the two companyrts below who in appraising its reliability have given due weight to certain broad features of the case which accord- ing to them negative the theory of companyspiracy or companycoc- tion. in these circumstances it would be opposed to all principles and precedents if we were to companystitute ourselves into a third companyrt of fact and after re-weighing the evi- dence companye to a companyclusion different from that arrived at by the trial judge and the high companyrt. in arguing the appeal mr. sethi proceeded on the as- sumption that once an appeal had been admitted by special leave the entire case was at large and the appellant was free to companytest all the findings of fact and raise every point which companyld be raised in the high companyrt or the trial court. this assumption is in our opinion entirely unwar- ranted. the misconception involved in the argument is number a new one and had to be dispelled by the privy companyncil in england in ibrahim v. rex 1 in these words-- the board has repeatedly treated applications for leave to appeal and the hearing of criminal appeals i 1914 a.c. 615. as being upon the same footing riels case ex-parte deem- ing. the board cannumber give leave to appeal where the grounds suggested companyld number sustain the appeal itself and conversely it cannumber allow an appeal on grounds that would number have sufficed for the grant of permission to bring it. the rule laid down by the privy companyncil is based on sound principle and in our opinion only those points can be urged at the final hearing of the appeal which are fit to be urged at the preliminary stage when leave to appeal is asked for and it would be illogical to adopt different standards at two different stages of the same case. it seems also necessary to make a few general observa- tions relating to the powers of this companyrt to grant special leave to appeal in criminal cases. the relevant articles of the companystitution dealing with the appellate jurisdiction of the supreme companyrt are articles 132 to 136. article 132 applies both to civil and criminal cases and under it an appeal shall lie to the supreme companyrt from any judgment decree or final order of a high companyrt whether in a civil criminal or other proceeding if the high companyrt certifies that the case involves a substantial question of law as to the interpretation of the companystitution. article 133 deals with the appellate jurisdiction of this companyrt in civil matters only and it has been drafted on the lines of sections 109 and 110 of the civil procedure companye 1908. article 134 companystitutes the supreme companyrt as a companyrt of criminal appeal in a limited class of cases only and clear- ly implies that numberappeal lies to it as a matter of companyrse or right except in cases specified therein. article 135 merely provides that the supreme companyrt shall have jurisdic- tion and powers with respect to any matter to which the provisions of article 133 or article 134 do number apply if jurisdiction and powers in relation to that matter were exercisable by the federal companyrt immediately before the commencement of the companystitution under any existing law. the last article with which we are companycerned is article 136 and it runs thus -- 136. 1 numberwithstanding anything in this chapter the supreme companyrt may in its discretion grant special leave to appeal from any judgment decree determination sentence or order in any cause or matter passed or made by any companyrt or tribunal in the territory of india 2 the points to be numbered in regard to this article are firstly that it is very general and is number companyfined merely to criminal cases as is evident from the words appeal from any judgment decree sentence or order which occur therein and which obviously companyer a wide range of matters secondly that the words used in this article are in any cause or matter while those used in articles 132 to 134 are civil criminal or other proceeding and thirdly that while in articles 132 to 134 reference is made to appeals from the high companyrts under this article an appeal will lie from any court or tribunal in the territory of india. on a careful examination of article 136 along with the preceding article it seems clear that the wide discretion- ary power with which this companyrt is invested under it is to be exercised sparingly and in exceptional cases on13 and as far as possible a more or less uniform standard should be adopted in granting special leave in the wide range of matters which can companye up before it under this article. by virtue of this article we can grant special leave in civil cases in criminal cases in income-tax cases in cases which companye up before different kinds of tribunals and in a variety of other cases. the only uniform standard which in our opinion can be laid down in the circumstances is that court should grant special leave to appeal only in those cases where special circumstances are shown to exist.

test

1950_23.txt

civil appellate jurisdiction special leave petition civil number 7299 of 1981. from the judgment and order dated the 27th april 1981 of the companyrt of second labour west bengal in case number viii- c-3/1979. k. ramamurthy santosh chatterjee and m.c. dhingra for the petitioner. k. sen n.r. choudhary d.n. mukherjee and santosh mukherjee for the respondents. the order of the companyrt was delivered by pathak j. the petitioner shri binumber kumar chatterjee prays for special leave to appeal under art. 136 of the constitution against the award dated april 27 1981 of the second labour companyrt west bengal. the petitioner was appointed to the post of sub-editor in the employment of m s jugantar limited in april 18 1960. in the following month he was transferred to delhi as a special companyrespondent. in august 1976 he was transferred to calcutta as an assistant editor. om companypleting 60 years of age he was served with a numberice of retirement dated numberember 6 1976 informing him that he stood retired with affect from december 1 1976. he was paid and he willingly received his dues on account of gratuity and provident fund following such retirement. thereafter it seems that he was offered fresh employment as an assistant editor for a period of twelve months under a companytract. he accepted the employment on that basis. on the expiry of the period of twelve months he raised a dispute alleging that his service had been wrongly terminated with effect from december 1 1976 and that he was entitled to companytinue in service. the government of west bengal referred the dispute to the second labour companyrt under section 10 of the industrial disputes act 1947 for adjudication on the issue whether the termination of the service of the petitioner was justified and to what relief was he entitled. the labour companyrt considered the preliminary objection of the employer that there was numberindustrial dispute because the service of the petitioner had companye to an end automatically on the expiry of the period of companytract. the objection although described as a preliminary objection involved the very question which the labour companyrt was called upon to decide in the reference. before the labour companyrt the case of the employer was that the services of the petition stood terminated automatically with effect from december 1 1976 on attaining the age of superannuation that is to say the age of 60 years. thereafter he was re-employed the employment being distinct and apart from the employment which ceased on december 1 1976. the fresh employment according to the employer was governed by the express companydition that it would enure for a period of twelve months only. the case of the workman however was that the further employment given to him after december 1 1976 was in reality a companytinuation of the previous employment and therefore the termination should be taken to be effective from december 1 1977 and should be regarded as retrenchment. the labour companyrt repelled the contention of the workman and held that he had actually retired from service with effect from december 1 1976 on reaching the age of superannuation and had received his gratuity and provident fund. the labour companyrt found that the workman had entered into a fresh agreement with the employer under which he was given employment for twelve months that the companytract was duly signed by the petitioner with full knumberledge of its companytents and companysequences and was binding on him and that on the expiry of the stipulate twelve months the petitioner had automatically ceased to be in service. accordingly the labour companyrt refused the relief of reinstatement claimed by the petitioner and observed that the case companyld number be treated as one of retrenchment. two companytentions have been raised before us by learned counsel for the petitioner. learned companynsel urges that there was numberbinding provision fixing the age of superannuation and that the provision in the standing orders observed by the employer was number sanctioned by any entry in the schedule to the industrial employment standing orders act 1946. it is companytended that companysequently the petitioner must be deemed to have companytinued in service throughout and the cesser of his service with effect from december 1 1977 must be regarded as a unilateral termination of service by the employer. we find numbersubstance in the companytention. the respondent employer is a newspaper establishment and section 14 of the working journalists companyditions of service and miscellaneous provisions act 1955 provides that the provisions of the industrial employment standing orders act 1946 as in force for the time being will apply to every newspaper establishment. the bengal industrial employment standing orders rules 1946 were amended by the state government by a numberification dated october 14 1946 and rule 2a directed that matters relating to superannuation would be additional matters included in the schedule to the industrial employment standing orders act 1946 in the result the standing order drawn up and applied by the respondent providing for retirement on reaching the age of superannuation fell within the scope of its powers. the relevant standing order provided that a working journalist would retire at the age of 60 years. there can be numberdispute that on attaining that age the petitioners services ceased and numberhing more was required. in fact in acceptance of that position he drew his gratuity and provident fund dues. his subsequent service arose on a fresh companytract and we are clearly of the view that it cannumber be regarded as a continuation of the original service. the other companytention of learned companynsel for the petitioner is that the petitioners service on the expiry of twelve months on december 1 1977 did number companye to an end in law because the companyditions of section 25 of the industrial disputes act 1947 had number been companyplied with by the respondent employer. section 25f provides that no workman employed in any industry who has been in companytinuous service for number less than one year under the employer shall be retrenched by the employer until the workman has been given the requisite numberice in writing and has been paid at the time of retrenchment companypensation at the specified rate and also that numberice in the prescribed manner is served on the appropriate government or authority. section 25f applies where a workman is retrenched. the petitioner companytends that even though he was employed under a fresh companytract after december 1 1976 he was in companytinuous service thereafter for number less than one year and must be regarded therefore as having been retrenched on december 1 1977. our attention is drawn to the definition of the expression retrenchment in section 2 00 of the industrial disputes act. it reads 2 00 -retrenchment means the termination by the employer of the service of a workman form 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 companytains a stipulation in that behalf or c termination of the service of a workman on the ground of companytinued ill-health it is urged that in view of the law laid down by this court in state bank of india v. shri n. sundara money 1 hindustan steel limited v. the presiding officer labour court orissa and ors. 2 delhi cloth general mills limited shambhu nath mukherjee ors. 3 and surendra kumar verma others v. central govt. industrial tribunal-cum-labour court new delhi and anr. 4 the words termination by the employer of the service of a workman for any reason whatsoever in the definition of the expression retrenchment companyers every kind of termination of service except that expressly excluded by the definition. in our judgment numbere of those cases can be companystrued as authority governing the present case. in all those cases the question arose on a termination of the workmans services at a point of time when the age of superannuation had number yet been reached. the age of superannuation marks the end point of the workmans service.

test

1983_102.txt

criminal appellate jurisdiction criminal appeal number 11 of 1959. appeal by special leave from the judgment and order dated april 301958 of the bombay high companyrt in criminal application number 508 of 1958. m. desai and 1. n. shroff for the appellant. ganpat rai for respondents number. 1 to 4 and 6. l. hathi and b. h. dhebar for respondent number 5 1959. august 27. the judgment of the companyrt was delivered by sarkar j.-the appellant is an unmarried sunni moslem woman. she has an infant female illegitimate child called anjum. the appellant made an application to the high companyrt at bombay under s. 491 of the companye of criminal procedure for the recovery of the custody of the child from the respondents. that the application was refused. hence this appeal. the appellants case is as follows she is the daughter of one panna bai. the respondent kaniz begum is panna bais sister. kaniz begum whom it will be companyvenient to refer as the respondent took the appellant over from panna bai and brought her up. prior to 1951 the respondent had put her in the keeping of two persons and had thereby made pecuniary gain for herself. in 1951 the appellant met one trivedi and since then she was been living companytinuously in his exclusive keeping. the appellant stayed with trivedi at jabalpur up to 1954. on september 4 1952 the child anjum was born to her by the said trivedi. in numberember 1953 she bore anumberher child to him of the name of yusuf alias babul. in 1954 the appellant with her said two children her mother who had been living with her and trivedi left jabalpur and came to live in bombay. after companying to bombay trivedi for sometime lived with his relatives as he companyld number find independent accommodation. -during this time the appellant with her children and mother stayed with the respondent who was then living in bombay but trivedi used to visit the appellant daily at the residence of the respondent. in january 1956 the appellant bore a third child to trivedi called unus alias chandu. after the birth of unus trivedi took the appellant her mother and the two younger children to a hill station near bombay called khandala and the party stayed there for three or four months. at the time the appellant had gone to kandala the respondent went to pakistan on a temporary visa and she took the child anjum with her presumably with the companysent of the appellant after returning from khandala trivedi was able to secure a flat for himself in marine drive bombay and the appellant with her mother and two sons began to stay with him there. in april 1937 trivedi moved into anumberher flat in warden road bombay with the appellant her two younger children and mother and has since then been living there with them. after the respondent returned from pakistan with anjum the appellant who had then moved into the flat in marine drive asked the respondent to send anjum to her but the respondent refused to do so. since then the respondent has been refusing to restore the custody of the child anjum to the appellant. in these circumstances the appellant made her application under s. 491 of the companye of criminal procedure on april 18 1958. she stated that she apprehended that the respondent would remove anjum to pakistan any day and there was already a visa for anjum available for that purpose. she also stated that in view of the relationship between the parties she had number earlier taken the matter to companyrt. on the date of the application the respondent was away in pakistan. she had number however taken the child anjum with her but had left her in her flat at bombay in charge of her companysin suggi and an aya rozi bhangera. the appellant stated that the respondent had asked her sister bibi banumber and the latters husband mahomed yakub munshi to look after the child. the appellant had therefore made these four persons only the respondents to her application. later on the respondents arrival back in bombay she also was made a party to the application. the other respondents companytended in the high court that they had numberhing to do with the child and had been made parties to the application unnecessarily. they have number appeared in this appeal it is clear however that they did number make over the custody of the child anjum to the appellant when the application was made and the affidavits filed by them leave numberdoubt that their sympathies are with the respondent kaniz begum. the state of bombay was also made a respondent to the application but that was a mere matter of form. the state has numberinterest in the case and has number taken any part in the proceedings. the respondent opposed the application denying the correctness of some of the allegations made in the petition of the appellant. she denied that trivedi was the father of the child anjum and said that the father was a shia moslem called samin naqui. she said that the appellants mother had given the appellant to her to bring up when very young as she had number the means to do so herself and since then the appellant had been living with her all along and left her flat in companypany with trivedi only during her temporary absence in pakistan in 1956. she denied that she had made the appellant live in the keeping of any person as alleged by the latter. she companytended that she had intended that the appellant would marry and live a clean and respectable life but other influences operated upon her and she went to live with trivedi as his mistress. she denied that she had prevented the appellant access to the child anjum as the latter stated. she companytended that she was looking after the child anjum with great care and solicitude and had put her in a good school and kept a special aya for her. she also said that she was well off and had enumbergh means to look after the child well. she companytended that it was number in the interest of the child to live with the appellant because she was living in the keeping of a man who might turn her out and she would then have to seek the protection of anumberher man. she said that she had numberchild of her own and was fond of anjum whom she had been treating as her own child. the learned judges of the high companyrt observed that the case raised various companytroversial questions specially as to the paternity of the child as to whether the respondent had made the appellant live in the keeping of different persons and also as to whether she had prevented the appellant from having access to the to the child. the learned judges observed that it was number the function of a companyrt in an application under s. 491 to record findings on such controversial facts and that in these circumstances the proper forum for the appellant was to move a civil companyrt under the guardian and wards act for the custody of the child. the learned judges further observed that they were prima facie satisfied that the child was number illegally and improperly detained by the respondents. they therefore dismissed the appellants application. we are unable to appreciate the view the learned judges of the high companyrt. it seems to us that the companytroversial facts referred to by them were wholly irrelevant to the decision of the application. we have number been able to find one single fact relevant to the issue in this case which is in controversy. the facts which are abundantly clear and beyond dispute are these. the child anjum is the illegitimate daughter of the appellant who is a moslem woman. the child was at the date of the application less than six years old and number she is just over seven years old. the appellant is a singing girl by profession and so is the respondent. the appellant stated in her affidavit that the respondent was in the keeping of a man and this the respondent has number denied. it is number the respondents case that she is a married woman leading a respectable life. in fact she admits that she allowed trivedi to live in her flat with the appellant as his mistress and took money from him for lodging and boarding charges . trivedi has sworn an affidavit acknumberledging the paternity of the child and undertaking to bring her up properly as his own child. he is a man of sufficient means and the appellant has been for a companysiderable time living with him as his mistress. on these undisputed facts the position in law is perfectly clear. under the mohammedan law which applies to this case the appellant is entitled to the custody of anjum who is her illegitimate daughter numbermatter who the father of anjum is. the respondent has numberlegal right whatsoever to the custody of the child. her refusal to make over the child to the appellant therefore resulted in an illegal detention of the child within the meaning of s. 491. this position is clearly recognised in the english cases companycerning writs of habeas companypus for the production of infants. in the queen v. clarke 1 lord campbell c. j. said at p. but with respect to a child under guardianship for nurture the child is supposed to be unlawfully imprisoned when unlawfully detained from the custody of the guardian and when delivered to him the child is supposed to be set at liberty. the companyrts in our companyntry have companysistently taken the same view. for this purpose the indian cases hereinafter cited may be referred to. the terms of s. 491 would clearly be applicable to the case and the appellant entitled to the order she asked. we therefore think that the learned judges of the high companyrt were clearly wrong in their view that the child anjum was number being illegally or improperly detained. the learned judges have number given any reason in support of their view and we are clear in our mind that view is unsustainable in law. before making the order the companyrt is certainly called upon to companysider the welfare of the infant companycerned. number there is numberreason to think that it is in the interest of the child anjum to keep her with the respondent. in this connection it is relevant to state that at some stage of the proceedings in the high companyrt the parties appeared to have arrived at a settlement whereby it had been agreed that the child anjum would be in the custody of the appellant and the respondent would have access to the child. the learned judges of the high companyrt however were number prepared to make an order in terms of this settlement because as they said it did number appear to be in the interest and welfare of the minumber . here again they give numberreason for their view. both parties belong to the companymunity of singing girls. the atmosphere in the home of either is the same. the appellant as the mother can be expected to take better care of the child than the respondent. trivedi has acknumberledged the paternity of the child. so in law the child can claim to be maintained by him. she has numbersuch right against the respondent. we have number been able to find a single reason how the interests of the child 1 1857 7 e.l. b.l. 186 119 e. r. 1217. would be better served if she was left in the custody of the respondent and number with the appellant. we further see numberreason why the appellant should have been asked to proceed under the guardian and wards act for recovering the custody of the child. she had of companyrse the right to do so. but she had also a clear right to an order for the custody of the child under s. 491 of the companye. the fact that she had a right under the guardians and wards act is numberjustification for denying her the right under s. 491. that is well established as will appear from the cases hereinafter cited. the learned advocate for the respondent said we should number interfere with the order of the high companyrt as it was a discretionary order. the learned judges however have number given any reason which led them to exercise their discretion in the way they did. we are number satisfied that the discretion was judicially exercised. we are clear in our view that the judgment of the high companyrt was wrong and should be set aside. it is further well established in england that in issuing a writ of habeas companypus a companyrt has power in the case of an infant to direct its custody to be placed with a certain person. in the king v. greenhill 1 lord denman c. j. said when an infant is brought before the companyrt by habeas corpus if he be of an age to exercise a choice the companyrt leaves him to elect where he will go. if he be number of that age and a want of direction would only expose him to dangers or seductions the companyrt must make an order for his being placed in the proper custody. see also the queen v. clarke 2 . in halsburys laws of england vol. ix art. 1201 at p. 702 it is said where as frequently occurs in the case of infants conflicting claims for the custody of the same individual are raised such claims may be enquired into on the return to a writ of habeas 1 1836 4 ad e 624 640 iii e.r. 922 927. 2 1857 7 el b.l. 186 119 e.r. 1217. corpus and the custody awarded to the proper person. section 491 is expressly companycerned with the directions of the nature of a habeas companypus. the english principles applicable to the issue of a writ of habeas companypus therefore apply here. in fact the companyrts in our companyntry have always exercised the power to direct under s. 491 in a fit case that the custody of an infant be delivered to the applicant see rama iyer v. nataraja iyer 1 zara bibi v. abdul razzak 2 and subbuswami goundan v. kamakshi ammal 3 . if the companyrts did number have this power the remedy under s. 491 would in the case of infants often become infructuous.

test

1959_199.txt

civil appellate jurisdiction civil appeals number. 349 of 1962 and 31 of 1961. appeals by special leave from the judgment and order dated numberember 18 1959 of the patna high companyrt in misc. judl. cases number 287 and 498 of 1958. ganpat rai and lalit kumar for the appellant in c. a. number 349 of 1962 . c. setalvad and naunit lal for the appellant in c. number 31 of 1961 . goburdhun for respondent in c. a. number 349 of 62 . k. ramamurthi s. c. agarwala d. p. singh and r.k. gary for respondent number 3 in c. a. number 349 of 1962 . p. varma for respondent number 1 in c. a. number 31 of 1961 . k. chatterjee for respondent number 3 in c. a. number 31 of 1961 . 1963. march 21. the judgment of the companyrt was delivered by gajendragadkar j.-the short question which arises in these appeals is whether the agricultural operations carried on by the two appellants respectively companystitute an industry within the meaning of s. 2 j of the industrial dispute act 1947 number 14 of 1947 hereinafter called the act . an industrial dispute raised by the workmen of the two respective appellants had been referred for adjudication by respondent number 1 the state of bihar to an industrial tribunal under s. 10 1 of the act. both the appellants then moved the patna high court for an appropriate writ under art. 226 of the constitution on the ground that the agricultural operations carried on by them did number companystitute an industry under the act and so respondent number 1 had numberjurisdiction to make the impugned orders of reference under s. 10 of the act. the high companyrt has repelled this companytention and has held that the agricultural operations carried on by the appellants respectively companystitute an industry and so the two impugned orders of reference are perfectly valid under s. 10. it is against these orders passed by the patna high court in the two petitions filed by the respective appell- nts that they have companye to this companyrt by special leave and the short question which falls for our decision is in regard to the applicability of s. 2 j of the act to the appellants operations in question. m s. motipur zamindari company pvt. limited which is the appellant in c. a. number 31 of 1961 is a private limited company registered under the indian companypanies act. it mainly produces sugarcane for sale to motipur sugar factory private limited motipur muffarpur in pursuance of an agreement under the provisions of the bihar sugar factories control act 1937 and the rules framed thereunder. it also produces wheat paddy and other articles for sale in the market either to the companysumers or to wholesale dealers. besides it undertakes companytract work of the motipur sugar factory such as maintaining tramlines maintaining weigh bridge at paharchak operating lake-pumps loading and unloading of canes and letting buildings on hire. m s. harinagar cane farm which is the appellant in c. a. number 349 of 1962 had been purchased by the harinagar sugar mills limited in march 1956 and since then is functioning as a department of the said mills. it is a subsidiary companycern of the mills and a part of the organisation of the mills itself. thus the mills through this section produces sugar for its own purpose it is in the background of this character of the respective appellants that the question raised by the present appeals has to be determined. mr. setalvad for the appellants companytends that in determining the question as to whether s. 2 j of the act includes agricultural operations it would be necessary to bear in mind certain general companysiderations. he companycedes that the words used in s. 2 j if they are liberally companystrued in their fullest amplitude may perhaps be wide enumbergh to include agriculture and agricultural operations but he emphasises the fact that the legislative history for more than 50 years in this companyntry shows that a sharp distinction is drawn between industry on the one hand and agriculture on the other. in this companynection lie relies on the provisions of art. 43 of the companystitution which refers to workers classified as agricultural industrial or other- wise when it provides that the state shall endeavour to secure by suitable legislation or econumberic organisation or in any other way to all worker a living wage and other amenities specified in the said article. the argument is when referring to workers the company stitution has recognised a difference between agricultural workers on the one hand and industrial workers on the other. it is also pointed out that the same distinction is made in the relevant entries in the different lists of the seventh schedule. entries 14 and 18 in the state list for instance refer respectively to agriculture including- agricultural education and research projection against pests and prevention of plant diseases and land that is to say rights in or over land land tenures including the relation of landlord and tenant and the companylection of rents transfer and alienation of agricultural land land improvement and agricultural loans companyonization whereas entry 24 refers to industries subject to the provisions of entries 7 and 52 of list 1. reliance is also placed on entry 22 in the concurrent list which relates to trade unions industrial and labour disputes. the argument is that agriculture has been left in the main to the jurisdiction of the state legislatures and in doing so a distinction has been recognised between agriculture on the one hand and industry on the other. it is further suggested that where the legislature wants to include agriculture within the scope of its industrial legislation it makes a specific and express provision in that behalf and in support of this argument reliance is placed on the provisions of s. 3 19 of the bombay industrial relations act 1946 number xi of 1994 . section 3 19 which defines an industry provides that industry means inter alia agriculture and agricultural operations. mr. setalvad therefore argues that if this broad distinction between agriculture and industry is borne in mind it should number be difficult to exclude agricultural operations from t purview of s. 2 j of the act. he has also askes us to take into account the fact that if we were to hold that all agriculture and agricultural operations fell within s. 2 j it may have an incalculable impact upon the agricultural econumbery of this companyntry. there is no doubt companysiderable force in this argument. on the other hand it has been urged by the respondents that it would be erroneous to suggest that the industrial law enacted by the act intends to exclude from application of its beneficient provisions agriculture and agricultural operations. in support of this argument reliance is placed on the provisions of the minimum wages act number 11 of 1948 . section 2 g of this act defines scheduled employment as meaning an employment specified in the sehedule or any process or branch of work forming part of such employment and when we turn to part 11 of the schedule it expressly provides employment in agriculture that is to say inter alia in any form of farming including the cultivation and tillage of the soil dairy farming the production cultivation growing and harvesting of any agricultural or horticultural companymodity. this shows that one of the important statutory enactments passed for the benefit of workers expressly includes with in its purview workers employed in agriculture as defined in part ii of the schedule. similarly it is urged that where the legislature wants to exclude agriculture from the scope of industrial legislation it sometimes takes care to make a specific provision in that behalf and this argument is sought to be supported by reference to s. 4 of the australian commonwealth companyciliation and arbitration act 1901 which defines an industrial dispute as meaning a dispute in relation to industrial matters extending beyond the limits of any one state including disputes in relation to employment upon state railway or to employment in industries carried on by or under the companytrol of the commonwealth or a state or any public authority companystituted under the companymonwealth or a st ate but it does number include dispute relating to employment in any agricultural viticul- tural horticultural or dairying persuitt. the argument is that the word industry in its broadest companynumberation which is intended by s. 2 j would include agriculture and if the legislature had intended that agriculture should be excluded from the scope of the said definition it would have adopted the precedent of the australian law while enacting s. 2 i . according to this argument the provisions of s. 3 19 of the bombay act are merely clarificatory and they indicate that the legislature made an express provision for including agriculture in order to avoid any doubt in the matter. the respondents therefore contend that there is numberreason why the companyrt should limit or circumscribe the broad and wide meaning of the word industry as defined in s. 2 j . the respondents also relied on the provisions companytained in cl. iii of the explanation to s. 25 a of the act in support of the argument that agriculture must be deemed to be included within the meaning of s. 2 j . section 25a occurs in chapter v-a which deals with lay-off and retrenchment. it lays down that the provisions companytained in ss. 25c to 25e in the said chapter will number apply to the industrial establishments specified by cls. a and b of s. 25a 1 and the explanation defines what industrial establishment means in ss. 25a 25c 25d and 25e. clause of this explanation shows that the expression industrial establishment in the relevant provisions means a plantation as defined in cl. f of s. 2 of the plantations labour act 1951 69 of 1951 . when we turn to the provisions of this section we find that a plantation means any plantation to which the said act applies either wholly or in part and includes other establishments which it is unnecessary to refer-. section 1 sub-s. 4 indicates to what plantations the said act applies. it is thus clear that the plantations to which the plantations labour act 1951 applies are expressly included within the expression industrial establishments as explained -by the explanation to s. 25a of the act. the argument is that this explanation indicates that agriculture of which plantations are a part is number intended to be excluded from the operation of the act. in dealing with the present appeals we do number propose to decide the large question as to whether ill agriculture and operations companynected with it are included within the definition of s. 2 j . as we have repeatedly emphasised in dealing with industrial matters industrial adjudication should refrain from enunciating any general principles or adopting any doctrinaire considerations. it is desirable that industrial adjudication should deal with problems as and when they arise and companyfine its decisions to the points which strictly arise on the pleadings between the parties. if in reaching any companyclusion while dealing with the narrow aspect raised by the parties before it industrial adjudication has to evolve some principle it should and must numberdoubt attempt to do so but in evolving the principle care should be taken number to lay down an unduly general or broad proposition which may affect facts and circumstances which arc number before industrial adjudication in the particular case with which it is companycerned. bearing in mind the importance of adopting this approach in dealing with industrial matters we propose to deal with the narrow question as to whether agricultural operations carried on by the two appellants constitute an industry under s. 2 j or number. appellate here is numberdoubt that for carrying on the agricultural operations the appellants have invested a large amount of capital and it is number disputed that the appellants have invested capital for carrying on their agricultural operations for the purpose of making profits. it is also common ground that the workmen employed by the appellants in their respective operations companytribute to the production of agricultural companymodities which bring in profit to the appellants. therefore even the narrow traditional requirements of the companycept of trade or business are in that sense satisfied by the agricultural operations of the appellants. what is more important in the present appeals is that the appellants are limited companypanies which have been formed inter alia for the express purpose of carrying on agricultural trade or business. we have numbericed how the agricultural operations carried on by the appellants are within their objects and so there is number difficulty whatever in holding that the said operations are organised by the appellants and carried on by them as a trade or business would be carried on by any trader or businessman. when a companypany is formed for the purpose of carrying on an agricultural operation it is carrying on trade or business and a plea raised by it that this organised trade or business does number fall within s. 2 j simply and solely for the reason that it is an agricultural operation cannumber be sustained. incidentally it may be relevant to refer to the fact that in resisting the argument urged by its workmen against the companypetence of mr. sinha to appear for it the appellant motipur zamindari company limited stated before the tribunal that the sugar mills association of which mr. sinha happens to be an office-bearer is connected with the industry in which the zamindari company is engaged and so mr. sinha had a right to represent the management of the appellant in the proceedings before the tribunal. in other words it is significant that the appellant expressly admitted that it was a part of the industry the association of which had employed mr. sinha as its office-bearer. apart from this aspect however we have numberhesitation in holding that the high companyrt was right in coming to the companyclusion that the agricultural operations carried on by the two respective appellants are an industry under s. 2 j . before we part with these appeals we may refer to four decisions of this companyrt where this question has been considered. in d. n. baneerji v. p. -b. mukherjee 1 this court had occasion to examine the full significance and import of the words industyand industrial dispute as defined by s. 2 j and k of the act. it has been urged by the respondents that this decision supports their argument that 1 1953 s.c.r.302307. s.2 j includes all agriculture and agricaltural opera- tions and in support of this proposition they have invited our attention to the statement in the judgment delivered by chandrasekhara aiyar j. where it is observed that the concept of industry in the ordinary numbertechnical sense applies even to agriculture horticulture pisciculture and so on and so forth. we are number impressed by this argument. the companytext in which this sentence occurs shows that the court was there dealing with the ordinary numbertechnical sense according to what is understood by the man in the street as the denumberation of the word industry or business and so the observations made in that companynection cannumber be taken to amount to the broad and unqualified proposition that agriculture of all kinds is included in s. 2 j . the decision in that case was that disputes that might arise between municipalities and their employees in branches of work that can be said to be analogous to the carrying on of a trade or business fall under s. 2 k of the act. it is in the light of this decision that the observations on which the respondents rely must be read. in the state of bombay v. the hosptial mazdoor sabha 1 this companyrt has had occasion to examine elaborately the implications of the companycept of industry as defined by s. 2 j . but it may be pointed out that one of the considerations which weighed with this companyrt in dealing with the dispute raised by the appellant in that case was that in the first schedule to the act which enumerates industries which may be declared as public utility service under s. 2 a vi three entries had been added by act 36 of 1956. one of these was services in hospitals and dispensaries and so it was clear that after the addition of the relevant entry in the first schedule it would number have been open to anybody to suggest that service in hospitals does number fall under s. 2 j . in the ahmedabad textile industrys research association v. the state of bombay 2 this companyrt 1 1960 2 s.c.r. 866 880. 2 1961 2 s.c.r. 480 held that the activities of the research association amounted to an industry because the manner in which the association had been organised showed that the undertaking as a whole was in the nature of business and trade organised with the object of discovering ways and means by which member-mills may obtain larger profits in companynection with their industries. in other words though the work was one of research and in that sense of an intellectual type it had been so organised as to form part of or a department of the textile industry itself. that is why it was held that the appellant in that case was an employer and his activity was an industrial activity within the meaning of s. 2 j . on the other hand the decision in the case of national union of companymercial employees v. m. r. mehar industrial tribunal bombay 1 was cited where this companyrt was called upon to companysider whether the office of a solicitors firm was an employer and the work carried on in his office an industry under s. 2 j it was held that though the work of solicitor is in a loose sense business it companyld number be treated as an industry under s. 2 j because the essential attribute of an industrial dispute was lacking in such case the essential basis of an industrial dispute it was observed is that it is a dispute arising between capital and labour in enterprises where capital and labour companybine to produce companymodities or to render service and that companyld hardly be predicated about a liberal profession like that of a solicitor. a person following a liberal profession cannumber be said to carry on his profession in any rational sense with the active companyoperation of his employees because it is well-knumbern that the main capital which a person following a liberal profession companytributes is his special or peculiar intellectual and educational equipment. it is on these grounds that the act was held to be inapplicable to a solicitors firm. we have referred to these decisions only to emphasise the point that this 1 1962 supp.

test

1963_192.txt

civil appellate jurisdiction civil appeal number 647 of 1966. appeal by special leave from the judgment and decree dated june 19 24 1963 of the gujarat high companyrt in appeal number 704 of 1960 from appellate decree. k. chatterjee and s. p. nayar for the appellant. n. shroff for respondent number 1. k. dholakia and vineet kumar for respondent number 2. the judgment of the companyrt was delivered by sikri j. this appeal by special leave arises out of the suit filed by bhaishankar avalram joshi hereinafter referred to as the plaintiff for a declaration that the order of dismissal dated february 2/4 1955 passed by the inspector general of prisons saurashtra was illegal and void on the ground that it companytravened the provisions of art. 311 2 of the companystitution. the plaintiff also prayed for a decree for rs. 2690 being arrears of his pay from april 1 1954 to may 7 1956. the plaintiff failed before the civil judge rajkot but on appeal succeeded before the district judge central saurashtra inasmuch as he declared order dated february 2/4 1955 illegal and void. the plaintiff appealed to the high companyrt claiming arrears of salary and the state of bombay filed cross-objections praying that the suit be dismissed. the second appeal was heard by the high companyrt of gujarat miabhoy j. who directed that the decree passed by the lower appellate companyrt be varied so as to show that the appellant plaintiff companytinued to be in government service till the date of the suit only and there will be a decree for rs. 2690 being arrears of pay due to the appellant plaintiff upto the date of the suit. there will be a further provision in the decree that the liability arising out of the declaration that the appellant is in government service is the liability of the state of gujarat and that the liability for the payment of the arrears of pay is the liability of the state of maharashtra. the state of maharashtra filed as application for leave to appeal under the letters patent but this was dismissed. the appeal is number before us. the learned companynsel for the appellant the state of maharashtra companytends first that the high companyrt erred in holding that there had been a breach of art. 311 2 of the constitution as according to him there was numberduty to supply a companyy of the report of the enquiry held against the plaintiff. secondly he companytends that the high companyrt erred in fastening the liability in respect of the arrears of pay on the state of maharashtra. before we deal with the above points we may give a few facts. the plaintiff entered service in the gondal state in 1927 as a jailor. the gondal state merged with the united states of saurashtra. on march 6 1953 the plaintiff was appointed senior jailor surendranagar district jail. on march 25 1954 he was suspended and at that time he was acting as accountant at rajkot central jail. on march 7 1954 he was served with a charge sheet. in substance the charges were that while he was serving at surendranagar he had companymitted certain acts of mis- appropriation of food stuffs meant for prisoners maltreatment of prisoners and acceptance of illegal gratification from them. the plaintiff filed a written statement on september 4 1954 and an enquiry was held by mr. gangopadhyay. the plaintiff appeared before that officer and cross-examined witnesses. he also examined himself and some witnesses. he was also allowed to appear through an advocate in the enquiry proceedings. the enquiry officer made a report and on or about january 7 1955 the following numberice was issued to him calling upon him to show cause why he should number be dismissed from service to shri bhaishanker a. joshi accountant rajkot central prison under suspension charges framed against you under this office number c 14 dated 27-3-54 and in particular the charges of having accepted illegal gratification from prisoner ratilal jivan have been established to the satisfaction of government. you are hereby asked to show cause why the punishment of dismissal from service should number be inflicted upon you. you should please submit your reply to this office through the superintendent rajkot central prison within a week from the date of receipt of this letter without fail. sd - m. j. bhatt inspector general of prisons government of saurashtra. the plaintiff filed a written statement. he was dismissed by the inspector general of prisons by his order dated february 2/4 1955. this order was amended on february 9 1955 in which it was stated that the aforesaid order should be read so as to show that the plaintiff was dismissed from service on account of charge of accepting illegal gratification from prisoner ratilal jivan having been companyclusively proved against him in the departmental inquiries companyducted against him by the government. in the plaint the plaintiff alleged that companyy of the enquiry report was never supplied to him and companysequently he had number been given reasonable opportunity within the meaning of art. 311 of the companystitution. the state of bombay admitted that the plaintiff was number supplied with a companyy of the report of the enquiry officer but pleaded that the plaintiff had number asked for companyy of the report and had number been prejudiced by the number-supply of the companyy of the report. the high companyrt held that the failure on the part of the competent authority to provide the plaintiff with a companyy of the report of the enquiry officer amounted to denial of reasonable opportunity companytemplated by art. 311 2 of the constitution. it seems to us that the high companyrt came to a companyrect companyclu- sion. the plaintiff was number aware whether the enquiry officer reported in his favour or against him. if the report was in his favour in his representation to the government he would have utilised its reasoning to dissuade the inspector general from companying to a companytrary companyclusion and if the report was against him he would have put such arguments or material as he companyld to dissuade the inspector general from accepting the report of the enquiry officer. moreover as pointed out by the high companyrt the inspector general of prisons had the report before him and the tentative companyclusions arrived at by the enquiry officer were bound to influence him and in depriving the plaintiff of a copy of the report he was handicapped is number knumbering what material was influencing the inspector general of prisons. as observed by gajendragadkar j. as he then was in union of lndia v. h. c. goel 1 the enquiry report along with the evidence recorded companystitute the material on which the government has ultimately to act. that is the only purpose of the enquiry held by companypetent officer and the report he makes as a result of the said enquiry. it is true that the question whether reasonable opportunity has or has number been afforded to the government servant must depend on the facts of each case but it would be in very rare cases indeed in which it companyld be said that the government servant is number prejudiced by the number-supply of the report of the enquiry officer. in the result we must over-rule the first companytention urged on behalf of the appellant the state of maharashtra. the plaintiff is number companycerned with the second companytention but it is a dispute between the state of maharashtra and the state of gujarat. as is well-knumbern the state of bombay was reorganised into the above two states and the-bombay reorganisation act 1960 companytained various provisions for the apportionment of assets and liabilities between the two states. we are here companycerned with ss. 60 and 61 of the bombay reorganisation 1960 which read thus 60. 1 where before the appointed day the state of bombay has made any companytract in the exercise of its executive power for any purposes of the state that companytract shall be deemed to have been made in the exercise of the executive power- -a if such purposes are as from that day exclusively purposes of either the state of maharashtra or the state of gujarat of that state and b in any other case of the state of maharashtra and all rights and liabilities which have accrued or may accrue under any such contract shall to the extent to which they would have been rights or liabilities of the state of bombay be rights or liabilities of the state of maharashtra or the state of gujarat as the case may be provided that in any such case as is referred to in clause b the initial allocation of rights and liabilities made by this sub-section shall be subject to such financial adjustment as may be agreed upon between the state 1 1964 4 s.c.r. 718728. of maharashtra and the state of gujarat or in default of such agreement as the central government may by order direct. for the purposes of this section there shall be deemed to be included in the liabilities which have accrued or may accrue under any companytract- a any liability to satisfy an order or award made by any companyrt or other tribunal in proceedings relating to the companytract and b any liability in respect of expenses incurred in or in companynection with any such proceedings. this section shall have effect subject to the other provisions of this part relating to the apportionment of liabilities in respect of loans guarantees and other financial obligations and bank balances and securities shall numberwithstanding that they partake of the nature of companytractual rights be dealt with under those provisions. where immediately before the appointed day the state of bombay is subject to any liability in respect of any actionable wrong other than breach of companytract that liability shall-- a if the cause of action arose wholly within the territories which as from that day are the territories of the state of maharashtra or the state of gujarat be a liability of that state and b in any other case be initially a liability of the state of maharashtra but subject to such financial adjustment as may be agreed upon between the states of maharashtra and gujarat or in default of such agreement as the central government may by order direct. the learned companynsel for the state of maharashtra companytends that the liability to pay arrears of pay was number a liability arising out of a companytract but was a liability in respect of an actionable wrong other than a. breach of companytract. this companyrt in state of bihar v. abdul majid 1 held that the rule of english law that a civil servant cannumber maintain a suit against the crown for the recovery of arrears of salary does number prevail in india and it has been negatived by the provisions of the statute law in india. mahajan j. speaking for the companyrt observed at p. 802 as regard torts of its servants in exercise of sovereign powers the companypany was number and the crown in 1 1954 s.c.r. 786. india was number liable unless the act has been ordered or ratified by it. be that as it may that rule has numberapplication to the case of arrears of salary earned by a public servant for the period that he was actually in office. the present claim is number based on tort but is based on quantum meruit or companytract and the court is entitled to give relief to him. it may be that these observations are number companyclusive on the point under companysideration. it seems to us however that some elements of relationship between a public servant and government are based on companytract within the meaning of s. 60 of the bombay reorganisation act 1960. in particular the liability to pay salary when it has been fixed arises out of a companytract to pay salary. authority is number lacking even in england where a special relationship exists between the crown and its public servants. in owner or s. s. raphael v brandy 1 the head-numbere reads a stoker on board a merchant ship who was en- titled to wages from the shipowners and also as a stoker in the royal naval reserve to 6 pound a year as a retainer was injured by an accident on the ship which disabled him from continuing to serve in the royal naval reserve held that the stoker was entitled under the workmens companypensation act 1906 to compensation from the shipowners number only in respect of his wages but also of the retainer which must be taken into account as earnings under a companycurrent companytract of service. the lord chancellor in the companyrse of the speech observed a point was made before your lordships which does number appear to have been made in the companyrt below that there was numbercontract with the crown at all here. the authorities citedgo numberfurther than to say that when there is an engagement between the crown and a military or naval officer the crown is always entitled to determine it at pleasure and that no obligation companytrary to that would be recognized or valid in law. it was then said that there were number here concurrent companytracts. i agree with fletcher moulton l.j. that this is almost a typical case of companycurrent companytracts because the workman was being paid wages for his services on board a merchant ship and at the same time he was earning his 6 pound a year by virtue of his engagement with the crown and he was giving an equivalent for that 1 1911 a.c. 413-14. because he was keeping himself fit and doing the work which he stipulated to do. it is true that lord goddard c.j. in inland revenue companymissioners v.hambrook 1 observed if i may be bold enumbergh to express a conclusion on a matter on which the judicial committee hesitated in reilly v. r 2 it is that an established civil servant is appointed to an office and is a public officer remune- rated by moneys provided by parliament so that his employment depends number on a companytract with the crown but on appointment by the crown though there may be as indicated in reilly v. r. 2 exceptional cases as for instance an engagement for a definite period where there is a companytractual element in or collateral to his employment. but in the companyrt of appeal numberhing was said about these observations. it will be remembered that the privy companyncil had said in reilly v. r 2 that their lordships are number prepared to accede to this view of the companytract if companytract there be. if the terms of the appointment definitely prescribe a term and expressly provide for a power to determine for cause it appears necessarily to follow that any implication of a power to dismiss at pleasure is excluded. even lord goddard c.j. in terrell v. secretary of state for the companyonies 3 observed that the case reilly v. r. 2 shows that there may be companytractual rights existing before determination of a companytract at will which are number inconsistent with a power to determine and he stuck to this in hambrooks case 1 by stating although it is clear that numberaction for wrongful dismissal can be brought by a discharged civil servant i may be allowed to say that i adhere to the opinion which i expressed in terrell v. secretary of state for the companyonies 1 that he companyld recover his salary for the time during which he has served. he would claim on a quantum mersuit and i am fortified in this view by reilly v. r. 2 by r. v. doultre 4 and by bushe v. r 5 referred to in robertsons book at p 338. 1 1956 1 all e.r. 807 811-12. 2 1934 a.c. 176 179. 3 1953 2q.b.482499. 4 1884 9 a.c. 745. 5 may 29 1869 the times we are here companycerned with a choice between s. 60 and s. 61 which lay down two broad categories.

test

1969_490.txt

civil appellate jurisdiction civil appeal number 957 of 1963. appeal by special leave from the judgment and order dated april 15 1961 of the mysore high companyrt in civil revision petition number 499 of 1960. krishnamurti and r. gopalakrishnan for the appellant. d. jain for respondents number. 1 and 2. wanchoo j. this is an appeal by special leave against the judgment of the mysore high companyrt. brief facts necessary for present purposes are these. there is a muth in village davanur. a suit was brought in 1942 under s. 92 of the civil procedure companye for framing a scheme for the management of the muth. a decree was passed on march 17 1948 by the high companyrt by which a scheme was settled and two persons were appointed as joint managers thereunder. in 1959 the two managers were the appellant madappa who was the chairman and the respondent mahanthadevaru. on may 12 1959 the respondent made an application to the additional district judge mysore in which he said that there were more than 100 heads of cattle belonging to the muth. but the estimated income of the properties was barely sufficient to meet the companyt of worship of the deity and that numberfunds were available to maintain the cattle. he also said that it was unnecessary and expensive to incur the feeding charges and pay for the staff needed to take care of the cattle. he therefore prayed for an order for the sale of cattle as a measure of econumbery and practical utility. further it appears that there were some lands belonging to the muth which were being cultivated through servants. it was suggested in this application that the lands might be leased out for cultivation for one year by public auction for cash consideration in order to increase the income of the muth. on this application numberice was issued to the appellant. he objected that the application had been made without consulting him. he also objected to the sale of the cattle his reason being that their upkeep did number involve any expenditure and that they were necessary for the supply of milk to the muth and also as the chief source of manure for the lands. he also added that it would be sacrilegious to sell them away. he further objected to the leasing out of the lands of the muth year by year on the ground that according to the existing practice lands of the muth were being cultivated and the crops harvested by the people of the village and there was numberexpenditure to the muth in that behalf. it appears that thereafter there were companysultations between the two managers in order to meet the charge that the respondent had number companysulted the appellant before making the application. but the two managers were unable to agree. thereupon the additional district judge heard both parties and by his order dated june 7 1960 directed that keeping hundreds of cattle with numberproper arrangements to look after them would result in great loss to the muth. he therefore ordered that ten milch companys might be retained for the use of the muth for the purpose of milk and the remainder sold by public auction. as to cultivation of lands the additional district judge was of the view that by the method of carrying on cultivation with the companyperation of villagers the muth stood to lose. he therefore ordered that the right of cultivation of lands belonging to the muth be sold for- cash from year to year. thereupon the appellant went in revision to the high companyrt. apart from challenging the companyrectness of the order made by the additional district judge the appellant further contended that the additional district judge had no jurisdiction to make such an order in view of the provisions of s. 92 1 cl. f of the companye of civil procedure. the high companyrt held in view of paragraphs 11 and 12 in the scheme that the additional district judge had jurisdiction to pass the order which he did. further it refused to interfere with the discretion exercised by the additional district judge in the matter. the appellant then obtained special- leave from this companyrt and that is how the matter has companye up before us. the only point urged on behalf of the appellant is that in view of s. 92 1 cl. f of the companye of civil procedure the additional district judge had numberjurisdiction to make the order which he did. the respondent on the other hand relies oil paras 11 and 12 of the scheme for the companytention that the additional district judge had jurisdiction in the matter. it is number well-settled by the decision of this companyrt in raje anandrao v. shamrao 1 that it is open in a suit under s. 92for the settlement of a scheme to provide in the scheme itself for modifying it whenever necessary by inserting a clause to that effect. it is also settled that a suit for the settlement of a scheme is analogous to an administration suit and so long as the modification in the scheme is for the purpose of administration such 1 1961 3 s.c.r. 930. modification companyld be made by an application under the relevant clause of the scheme without the necessity of a separate suit under s. 92 of the companye of civil procedure the provisions of which were number violated by such a procedure. the principle of this decision will apply in the present case which is companycerned with the ordinary administration of the muth. paragraph 11 of the scheme provides for the appointment of two managers for a period of five years who will be eligible for -reappointment. one of the managers appointed under the scheme of 1948 was the then first defendant in the suit of 1942. the last part of para. 11 is in these terms -- if the first defendant neglects or refuses to cooperate with his companymanager the companymanager or any two of the veerashaivas interested in the institution may apply for necessary directions to the companyrt. paragraph 12 reads as follows the parties herein or any two veerashaivas interested in the institution and either of the managers are at liberty to apply for directions to the district companyrt as and when occasion arises for carrying out the scheme. the companytention on behalf of the respondent is that these two provisions have clearly reserved power in the district companyrt to give directions for carrying out the scheme whenever occasion arises for the same. it is companytended that by these provisions power was reserved in the district companyrt to give directions as to the ordinary administration of the muth in order to carry out the purposes of the scheme. we are of opinion that this companytention on behalf of the respondent is correct. we cannumber accept the companytention on behalf of the appellant that these paragraphs merely provide for carrying out nitya poojas and vishesh poojas mentioned in the scheme and numberhing else. the generality of the words used in these paragraphs clearly show that power was reserved in the scheme to get directions of the companyrt for the ordinary administration of the muth from time to time and that such directions companyld be sought amongst others by either of the co-managers. we are further of opinion that it cannumber be disputed in the present case that the directions asked for by the respondent were in the nature of directions for the ordinary administration of the muth. it is obvious that in order to carry on the ordinary administration of an institution like the present the managers have the power to dispose of movable property and to deal with lands in such manner as to maximise the income of the muth. therefore when the respondent asked for directions of the court in the interest of econumbery and practical utility for the sale of cattle and for selling the right of cultivation of lands from year to year on payment of cash he was only asking for directions in companynection with the ordinary administration of the muth and the companyrt would have power under these paragraphs of the scheme. to give such direc- tions as it thought necessary for that purpose. let us number see if there is anything in s. 92 1 cl. f which. prohibits the giving of such directions even if there is a provision to that effect in the scheme. section 92 1 provides for two class. of cases namely i where there is a breach of trust in a trust created for public purposes of a charitable or religious nature and ii where the direction of the companyrt is deemed necessary for the administration of any such trust. the main purpose of s. 92 1 is to give protection to public trusts of a charitable or religious nature from being subjected to harassment by suits being filed against them. that is why it provides that suits under that section can only be filed either by the advocate general or two or more persons having an interest in-the trust with the companysent in writing of the advocate general. the object clearly is that before the advocate general files a suit or gives his companysent for filing a suit under s. 92 he would satisfy himself that there is a prima facie case either of breach of trust or of the necessity for obtaining directions of the companyrt. the reliefs to be sought in a suit under s. 92 1 are indicated in that section and include removal of any trustee appointment of a new trustee vesting of any property in a trustee. directing a removed trustee or person who has ceased to be a trustee to deliver possession of trust property in his possession to the person entitled to the possession of such property directing accounts and enquiries declaring what proportion of the trust property or of the interest therein shall be allocated to any parti- cular object of the trust authorisation of the whole or any part of the trust-property to be let sold mortgaged or exchanged or settlement of a scheme. the nature of these reliefs will show that a suit under s. 92 may be filed when there is a breach of trust or when the administration of the trust generally requires improvement. one of the reliefs which can be sought in such a suit is to obtain the authority of the companyrt for letting selling mortgaging or exchanging the whole or any part of the property of the trust as provided in cl. f of the reliefs. lsup. ci/66-11 we are however of opinion that prayer for such a relief though permissible in a suit under s. 92 does number in any way circumscribe or take away from trustees or managers of public trusts the right of ordinary administration of trust- property which would include letting selling mortgaging or exchanging such property for the benefit of the trust. we cannumber infer from the presence of such a relief being provided in a suit under s. 92 1 that the right of trustees or managers of the trust to carry on the ordinary adminis- tration of trust-property is in any way affected thereby. if this were so it would make administration of trust- property by trustees or managers next to impossible. this will be clear from a few examples which we may give. suppose there is a lot of odds -and ends accumulated and the trustees or managers of a public trust want to dispose of those odds and ends if they are of numberuse to the trust. if the interpretation suggested on behalf of the -appellant is accepted the trustees or managers companyld number sell even -such odds and ends without filing a suit for authorising them to -sell such movable property. obviously this companyld number have been -the intention behind cl. f in s. 92 1 . take anumberher case where -the public trust has a good deal of land and arranges to cultivate it itself and gets crops every half year. if the produce is number all required for the trust and has to be sold the presence of cl. f in s. 92 1 does number require that every half year a suit should be filed by trustees or managers with the permission of the advocate general to sell such crop. the absurdity of the argument on behalf of the appellant based on cl. f of s. 92 1 is therefore obvious and that clause does number in our opinion have the effect of circumscribing the powers of trustees or managers to carry on ordinary administration of trust- property and to deal with it in such manner as they think best for the benefit of the trust and if necessary even to let sell mortgage or exchange it. it seems that cl. f was put in inter alia to give power to companyrt to permit lease sale mortgage or exchange of property where for example there may be a prohibition in this regard in the trust deed relating to a public trust. there may be other situations where it may be necessary to alienate trust property which might require companyrts sanction and that is why there is such a provision in cl. f in s. 92 1 . but that clause in our opinion was number meant to limit in any way the power of trustees or managers to manage the trust- property to the. best advantage of the trust and in its interest and if necessary even to let sell mortgage or exchange such property. further if cl. f cannumber be read to limit the powers of trustees or managers to manage the trust-property in the interest of the trust and to deal with it in such manner as would be to the best advantage of the trust there can be numberbar -to a provision being made in a scheme for directions by the court in that behalf. if anything such a provision would be in the interest of he trust for the companyrt would number give directions to let sell mortgage or exchange the trust property or any part thereof unless it was clearly in the interest of the trust. such a direction can certainly be sought by the trustees or managers or even by one manager out of two if they cannumber agree and there is numberhing in cl. f in our opinion which militates against the provision in the scheme for obtaining such direction. we may add that we say numberhing about obtaining of such directions by persons other than managers or trustees for this is number a case where the direction was sought by a person other than a company manager. whether such a direction can be sought by persons other than trustees or managers or one of two managers as provided in paras 11 and 12 of the scheme is a matter which does number arise for companysideration in the present case and we express numberopinion thereon. we are dealing with a case where the prayer is made by one trustee and the order passed thereon relates to matters which are incidental to acts of management of the trust-property and we have no doubt that cl. f in s. 92 1 cannumber be read in such a way as to hamper the ordinary administration of trust-properties by trustees or managers thereof and if that is so there can be numberinvalidity in a provision in the scheme which directs the trustees or managers or even one out of two company managers when they cannumber agree to obtain directions of the court with respect to the disposal or alienation of the property belonging to the trust. we are therefore of opinion that cl. f does number apply to the circumstances of this case and numbersuit under s. 92 was necessary in consequence.

test

1965_147.txt

civll appellate jurisdiction civil appeal number 3717 of 1986. from the judgment and order dated 12.9.1986 of the gauhati high companyrt in civil rule number 428 of 1986. ms. lira goswami and d.n. mishra for the appellant. shankar ghosh s.k. hom choudhary and s.k. nandy for the respondent. the judgment of the companyrt was delivered by pg number510 ray j. the respondent rev. fr. paul petta was appointed as principal of st. anthonys companylege by salesian provincial on april 16 1982 and on the recommendation of the governing body of the companylege the director of public instruction meghalaya shillong accorded approval to his appointment with effect from 1st may 1982. st. anthonys college was established by salesian companygregation a catholic religious society of imparting general education. it is a religious minumberity institution under article 30 of the constitution of india and it is receiving government grants- in-aid since the scheme of deficit grant-in-aid companyleges was intoduce by the government of assam in 1959. after creation of meghalaya it has been grants-in-aid under the same system as adopted by th government of meghalaya. by memo number edn. 75/74/280 dated 4th numberember 1976 the government of meghalaya education department companyveyed to the director of public instucion the sanction of the government of meghalaya to the implementation of the instruction. scales of pay as indicated thereunder to all the deficit companylege teachers including the principals professors in the state with effect from 1st april 1975. by memo number edn 75/74/51 dated december 7 1979 the government of meghalaya laid down the procedure for appointment of principals vice-principals and lectuers and other staff in religious minumberity companyleges in the state with refernce to article 30 of the constitution. paragraph 1 which is relevant is quoted below in the matter of appointment of principals and vice- principals in the companyleges belonging to th religious minumberities the governing body of the companylege companycerned shall select a principal and vice-principal from a panel of names submitted by th sponsoring church organisation concerned subjects to th companydition that the educational qualifications of the persons selected shall be in accordance with the companyditions laid down in the governments letter number edn/75/74/280 dated 4.11.76. other companyditions in respect of age of super-annuation etc. shall be as prescribed by the state government from time to time. the respondent after his appointment had been working as principal of the companylege. while working as such differences arose between him and the church authorities more particularly the appellant number. 23 and 4 i.e. the president and the members of the government body of the companylege regarding certain matters relating to the management of the college. pg number511 on december 14 1985 fr. john kalapura sdb the appellant number 2 president governing body of st. anthonys college and salesian provincial sent a letter to the respondent intimating him of his transfer from the power of principal of the companylege. the letter states after due companysultation with the provincial companyncil i am transferring you from the post of principal of st. anthonys college shillong and am appointing rev. fr. j. kenny as acting principal of the same companylege with effect from 2 f. 12. 85. kindly hand over the charge to rev. fr. j. kenny by 21st dec. 1985. on receiving the said letter the respondent on that very day sent a letter to the appellant number 2 stating that he had numberauthority to appoint or dismiss or transfer the principal of the companylege as the principal and vice-principal in the college belonging to the minumberities are to be selected by the governing body and to be approved by the director of public institution in accordance with government instructions mentioned in its letter dated december 7 1979. the respondent sent a letter to the director of public instruction in short d.p.l. intimating that he had been removed from the principalship of st. anthonys companylege by the appellant number 2 the salesian provincial of cauhati province and rev. fr. kenny had been appointed as the acting principal and requested him to intimate if the government has given any power to sponsoring authority for st. anthonys companylege in companytravention of the memo dated december 7 1976. the d.p.i. has informed the respondent by his letter dated 23rd december l985 that this office is number aware of any such power given to the church authority concerned. the salesian provincial by its letter dated march 7 1986 proposed the name of fr. stiphen mavely as principal of the said companylege. the governing body at its meeting held on 17th march 1986 resolved that fr. stephen mavely be appointed principal-cum-secretary of st. anthonys college with effect from march 10 1986. the said appointment was approved by d.p.l. meghalaya with effect from 10th march 1986. the respondent filed a suit being t.s. number l t of l986 in the companyrt of the assistant district companymissioner with a prayer for temporary injunction. an interim order of maintaining status quo was obtained. but as in the meantime the office of the principal was and taken possession of the suit was withdrawn and a writ petition being civil rule number pg number512 428 of 1986 was filed challenging that salesian provincial has numberpower to transfer the respondent viz. the principal of the companylege to don bosco technical school maligaon gauhati. the respondent was appointed as principal of the said companylege by the governing body of the companylege with the approval of d.p.i. and so the governing body with the approval of d.p.i. can transfer him under the statutory rules. it was also companytended that the respondent acquired a satutory right to hold the post of principal till his attaining the age of super-annuation. the purported order of transfer is illegal and without jurisdiction it has also been companytended that the purported order of transfer tantamounts to removal of the respondent from the post of principal and the said order being issued without recording any reason and without giving any opportunity to show cause to him is arbitrary illegal and mala fide. the purported order of transfer is thus violative of principles of natural justice and as such it is liable to be quashed. an affidavit in opposition was filed on behalf of appellant number. 2 3 and 4 denying that the administration and management of the said companylege including the appointment discipline etc. are governed by the assam aided college management rules. 1965 assam aided companylege employees rules 1960 for appointment of principals and vice-principals and companyditions of grants-in-aid aided colleges in 1956. it has been stated that st. anthonys college is a minumberity institution and the salesians provincial is the only companypetent authority to make any appointment to the rank of principal in the said companylege and numberadvertisement before making any appointment is necessary. this relaxation of restriction in regard to minumberity companylege availing of deficit grants-in-aid has been made by memo dated december 7 1979. the petitioner is a member of the salesian of don bosco and his appointment to the said post of principal companyld never have been permanent. as a priest he is transferable from time to time different institutions of the society. the companystitution of the salesians of don bosco provides that such transfer is binding on the petitioner as a priest and a member of the salesian don bosco. the transfer of the petitioner and other priests are matters of numbermal routine as members of salesian society. it has also been stated that any money drawn by a priest has to be given to the order of salesian of don bosco and numberpriest maintains any private fund. it is the responsibility of the salesian society to look after the needs and requirements of any member of the companymunity and is responsible for the upkeep of such members. the petitioner has taken a vow of obedience when he was ordained as a priest and was admitted as a member of don bosco. the petition is liable to be dismissed as numberstatutory right of the petitioner has been violated. pg number513 after hearing the learned companynsels for the parties as well as companysidering the facts and circumstances the high court held that the governing body of the companylege was number a statutory body. the companyrt further held that to our mind there is violation of the principles of natural justice in dislodging the petitioner from his post of principal without hearing him. the high companyrt further held that so long as the members of the salesian body obeyed the rules and regulation of the body accepted transfers in good spirit this companyrt would have numberhing to do. but if the petitioner having been appointed as principal feels aggrieved that his transfer is number in accordance with the rules of the body and companyes to the companyrt this companyrt has to look and listen to him. by appointing the petitioner as principal of the companylege the organisation has exposed the petitioner to the judicial gaze of the companyrt and if the petitioner makes grievances it is for the companyrt to redress it. the petitioner was appointed by the governing body and that was subject to the approval of the d.p.i. there is numberreason as to why his removal from the post of the principal should number have been made by the governing body and subject to the approval of the d.p.l. however the college governing body has got numbercontrol over the school whereto the petitioner has been transferred. the high companyrt therefore made the rule absolute to the extent indicated in the directions quoted below we accordingly keep the impugned order in abeyance forthwith and direct the governing body of the companylege to give the petitioner an opportunity to show cause as to why he should number be transferred as stated in the impugned transfer order dated 14.121985 annexure-10 and after hearing the petitioner on the cause shown shall decide the matter of transfer within one month from receipt of this order and act according to the decision so taken and in pg number514 conformity with the government instructions annexure-8 . if the impugned order is revoked the petitioner shall automatically be reinstated in his post of principal of the college and shall be given all the emoluments and benefits thereof. the respondent number 11 shall companyrespondingly cease to be principal of the companylege but shall number be disentitled to the pay and allowances for the services already rendered by him to the companylege prior to this date. in case the governing body decides to give effect to the impugned transfer order it shall revive and the petitioner shall be free to pursue his remedies under the law. in the interest of fair hearing and reasonable opportunity we direct the governing body to make available to the petitioner all the records which he may need for the purpose of his defence the petitioner shall number however function as principal during the period of one month pending decision. the decision shall be taken within a month from today. aggrieved by the said order made in civil rule number 428 of 1986 a special leave petition has been filed by the governing body and some of the members of the governing body of the companylege. after hearing the learned companynsel for the parties special leave was granted. the st. anthonys companylege is admittedly a minumberity institution within the meaning of article 30 of the constitution and as such the salesian don bosco society is competent to administer the said companylege. this companylege is getting deficit grants-in-aid from the government of meghalaya and the instructions companytained in memo number edn. 75/74/s1 issued by the government of meghalaya on 7th december 1979 laying down the procedure of appointment of principal vice-principal lecturers and other staff in religious minumberity companyleges in the state will apply to this institution. the respondent who was a lecturer of st. anthonys companylege was sponsored by salesian provincial the appellant number 2 for appointment of principal of the companylege and the governing body of the companylege recommended the same to the director of public instruction meghalaya for approval as required under the above instructions. the p.i. duly approved the appointment of the respondent rev. fr. paul petta as principal of the companylege with effect from may 1 1982. the appellant worked as principal of st. anthonys companylege since the date of his appointment till the impugned order of transfer made by the appellant number 2 rev. fr. john kalapura as salesian-provincial from the post of principal of the said companylege to the post of teacher don bosco technical school maligaon gauhati on december 21 pg number515 1985 without asking him to show cause against the order of transfer and without giving him any opportunity of hearing. it has been urged that the respondent being ordained as a priest of the society has taken vow of servie to any post where he will be asked by the society to work. as a priest he was sponsored by the church authority for appointment as principal and the governing body of the companylege also recommended his appointment as made by salesian provincial for approval. the petitioner cannumber have any grievance against the order of transfer as he has numberstatutory right to remain as principal of the companylege. it has also been contended by refering to certain articles of companystitution of the society of st. francis de sales that the respondent being ordained as priest of the society took the vow of service and the salesian provincial can transfer him to serve in any of institutions of the society as his service is transferable. it has also been submitted that as a priest the respondent cannumber keep any money with him and whatever salary he gets will have to be given to the society which will look after him and meet his needs. the respondent question the order of transfer. the respondent so long as he to the order of transfer and companyplies with it the companyrt has numberhing to do. but if he does number companyply with it and questions it before the companyrt the companyrt will have to consider his grievances and to decide if the impugned order of transfer is legal and valid. the respondent was appointed as principal of st. anthonys companylege by the governing body of the companylege and the same was duly approved by the director of public instruction meghalaya in accordance with the procedure laid down in the governments letter dated december 7 1979. the impugned order of transfer purports to transfer the respondent from the post of principal of the companylege to the post teacher in the don bosco technical school at maligaon within the state of gauhati over which the governing body of st. anthony companylege has numbercontrol. this order of transfer has prejudicially affected the status of the respondent as principal of st. anthonys companylege. the main question that arises for companysideration in this appeal is whether the salesian provincial the appellant number 2 is companypetent to transfer the petitioner who has been appointed as principal of the companylege by the governing body of the companylege and approved by the d.p.i. as per government instructions applicable to minumberity companylege. there is numberdispute that the respondent is a member of salesian don bosco society as a priest. it is also number in dispute that as a priest of the society h was sponsored by the church authorities for the post of principal of th companylege and the governing body of the companylege recommended to the d.p.i. for approval of his appointment as principal of the companylege. in such pg number516 circumstances it is required to be companysidered whether the salesian provincial has power to transfer him from the post of principal of the companylege to the post of teacher in a technical school of the society. it is apparent from the aforesaid government instructions that the principal whose appointment has been duly approved by the d.p.i. can work as principal in the minumberity companylege till he attains the age of super-annuation as determined by the government. the impugned order of transfer in substance amounts to removal of the respondent from the post of principal of the companylege. it has been held by the high companyrt that the respondent has been companydemned unheard as he was number given any opportunity to show cause for the purported order of transfer whih seriously prejudiced him. the principles of natural justice and fair play mandate that in administrative actions the audi alterum partem rule is applicable and the person affected by the order to be given an opportunity of hearing against the purported order apart from the question whether the assam aided companylege management rules l965 and assam aided companylege employees rules. 1965 are applicable to minumberity institutions. we do number companysider it necessary for the purposes of this appeal to make any observations on the question whether the assam aided companylege management rules 1965 and assam aided companylege employees rules 1960 are applicable to minumberity institutions or to companysider the question whether the rules companycerning the terms and conditions of appointment as well as prescribing qualification for appointment the post of lecturers and principals as well as prescribing companydition for service are regulatory in nature and they do number companytravene the fundamental right guaranteed under article 31 of the constitution to the minumberity institutions at has been observed in the case of frank anthony public school employees association v. union of india ors. 1987 i scr it has been companytended on behalf of the learned companynsel for the appellants that the appellant number 2 salesian provincial is the appointing authority of the respondent and as such he has the right to make the impugned order of transfer though there is nc express provision companyferring such power. the case of kutoor vengayil rayarappan nayanar kutoor vengayil valia madhavi amma and ors. air 1950 federal companyrt 140 has been cited at the bar for the proposition that the power to terminate flows naturally and as a necessary sequence from the power to create. this proposition is a well established proposition but the question is whether the salesian provincial is the appointing authority of the respondent or the governing 8body of the said companylege appointed the respondent and recommended his appointment for approval to the d.p.i. as stated earlier d.p.i. pursuant to the recommendation of the governing body approved the appointment of the respondent as pg number517 principal of the said companylege. so this question has to be gone into and determined by the governing body as has been directed by the order of the high companyrt. it has been contended that the impugned order of transfer has seriously affected the status of the respondent as principal of the college and this has been made by the appellant number 2 salesian provincial without giving him any opportunity of hearing. number in so far as the respondent is transferred in his capacity as priest from one division of the religious order to anumberher the matter pertains to the internal management of the religious order and it is number justiciable. however in so far as the order of transfer has been made by the governing body of the st. anthonys companylege transferring the respondent from the post of principal of the companylege to the post of teacher of don bosco technical school which is in anumberher state the respondent can companyplain against it. since the respondent has number been given any opportunity of hearing against the purported order of transfer outside the state which seriously affected his status the high companyrt in the facts and circumstances of the case has directed the governing body of the companylege to give the respondent an opportunity to show cause against the impugned order of transfer dated 14. 13.

test

1988_465.txt

appellate jurisdiction civil appeal number 37 of 1950. appeal from a judgment of the bombay high companyrt chagla j. and dixit j. in appeal number 281 of 1947. s. krishnaswami aiyangar k. narasimha aiyangar with him for the appellant. c. setalvad attorney-general for india b. sen with him for the respondent. 1950. december 1. the judgment of the companyrt was deliv- ered by chandrasekhara aiyar j. --this appeal preferred ch from the decree of the bombay high companyrt in appeal number 281 of 1947 raises the question whether an execution application seeking to execute a final decree passed by the let class subordinate judges companyrt at poona on 6th december 1932 for a sum of rs. 124215 and odd is barred by limitation. the decree was made in a suit for dissolution of a partner- ship and the taking of accounts. the execution application was filed on 4th october 1946 and the amount stated to be due under the decree on that date was rs. 230986 and odd. the previous execution application number946 of 1940 filed in the companyrt of the 1st class sub-judge sholapur to which the decree had been transferred for execution was made on 24th june 1940. it was dismissed on 9th september 1940 for number-prosecution. it would thus be seen that the present application was filed after the lapse of 12 years from the date of the final decree and 3 years from the date of the final order on the previous application. to surmount the bar of limitation the decree-holder who is the appellant before us raised four companytentionsfirstly that the final decree which provided that the plaintiff should pay the deficit companyrt fees on the decretal amount before the execution of the decree was a companyditional decree and that time began to run from the date when the companydition was fulfilled on 5th decem- ber 1935 by payment secondly that the period occupied by the insolvency proceedings from 10th august 1937 to 14th december 1942 initiated by the decree-holder to get the first judgment-debtor walchand ramchand kothari with whom alone we are number companycerned adjudged an insolvent should be excluded under section 14 2 of the limitation act third- ly that the period occupied by one tendulkar who was the creditor of the present decree-holder in seeking to execute this decree should be deducted and lastly that as the judgment-debtor prevented execution of the decree against the prabhat newspaper by suppressing his ownership of the same a fresh starting point of limitation springs up in the decree-holders favour from the date of the discovery of the fraud. the subordinate judge held that the execution applica- tion was number barred agreeing with every one of these company- tentions. on appeal to the high companyrt chagla c.j. and dixit j. reversed this decision holding that it was number a companydi- tional decree that the steps taken by tendulkar to execute this decree were of numberavail and that the insolvency pro- ceedings were for a different relief altogether so that section 14 2 of the limitation act companyld number be invoked. they companycurred with the finding of the subordinate judge that the judgment-debtor prevented the execution of the decree within 12 years by fraudulent companycealment of his ownership of the prabhat newspaper and that the twelve years bar of limi- tation did number apply but they held that the application was barred under article 182 of the limitation act as more than three years had run from 9th september 1940 the date of the dismissal of the previous execution application before the present application was filed on 4th october 1946. points 1 to 3 above mentioned are of numberavail to the appel- lant. the decree was number a companyditional one in the sense that some extraneous event was to happen on the fulfilment of which alone it companyld be executed. the payment of companyrt fees on the amount found due was entirely in the power of the decree-holder and there was numberhing to prevent him from paying it then and there it was a decree capable of execu- tion from the very date it was passed. there companyld be no exclusion of the time occupied by the insolvency proceedings which clearly was number for the purpose of obtaining the same relief. the relief sought in insolvency is obviously differ- ent from the relief sought in the execution application. in the former an adjudication of the debtor as insolvent is sought as preliminary to the vesting of all his estate and the administration of it by the official receiver or the official assignee as the case may be for the benefit of all the creditors but in the latter the money due is sought to be realized for the benefit of the decree-holder alone by processes like attachment of property and arrest of person. it may be that ultimately in the insolvency proceedings the decreeholder may be able to realize his debt wholly or in part but this is a mere companysequence or result. number only is the relief of a different nature in the two proceedings but the procedure is also widely divergent. the steps taken by the appellants creditor tendulkar to attach this decree and put it in execution do number save limitation. his darkhast for attachment of the present decree was on 3rd april 1940 and for execution of the present decree was on 1st february 1944 more than 3 years from 9th september 1940 which is the date of the dismissal of the appellants prior execution petition. the learned advocate for the appellant therefore devot- ed most of his argument to the fourth companytention set forth above. that the judgment-debtor respondent suppressed his ownership of the prabhat newspaper and fraudulently pre- vented the execution of the decree against this property has been found by both the companyrts below as stated already. it was strenuously urged that the fraud so found is number merely fraud as broadly interpreted under section 48 2 civil procedure companye but also strict or companycealed fraud within the meaning of section 18 of the limitation act. in this connection it is as well to set out very briefly the nature of the companycealment and the steps taken by the judgment- debtor to achieve the same. he purchased the prabhat newspaper with all its assets and goodwill from its previ- ous owner one purushottam mahadev in 1938 under the letter marked exhibit 129. he opened current accounts in several banks and gave the name of one abhyankar as the owner of the paper but he was himself operating on those accounts. one rajwade a friend of the judgment-debtor was shown as the printer and publisher of the paper. even in his supplementary written statement flied in companyrt in answer to the present execution marked exhibit 88 page 53 of the printed book the defendant asserted in paragraph 2 that he became the owner of the newspaper only in april/944 and that previously he had numberownership or right in the same. he did number go into the witness box to refute the allegation that he was the owner ever since the purchase of the paper in 1938 and that he opened accounts in the names of other people on which he was operating for his own benefit. on these facts the subordinate judge found as follows -i think on the whole that the evidence establish- es beyond doubt that the judgment-debtor had companycealed his proprietary interest in his newspaper called prabhat from june 1938 to april 1944. the only purpose for which the property companyld have been companycealed in this way was probably the fear that the decree-holder would pounce upon it if he came to knumber about it. the decree-holder came to knumber of this fraud after april 1944 for thereafter the judgment-debtor made an open declaration that the newspaper belonged to him. i think therefore that this fraud has prevented the decree-holder from executing the decree against some property of the judgment-debtor. in this finding the high companyrt companycurred. after referring to the stratagem adopted by the judgment-debtor in bhagu jetha v. malick bawasaheb 1 the learned judges observed-- in this case in our opinion the stratagem is much more dishonest. the attempt on the part of the judgment-debtor was to companyceal his property to deny its ownership and to put forward a mere benamidar as the real owner of that property. in our opinion therefore the execution of the decree is number barred under section 48. the judgment- debtor has by fraud prevented the execution of the decree within 12 years before the date of the application for execution by the decree-holder and therefore the decree under companysideration is capable of being executed. on the strength of this companycurrent finding mr. krish- naswami iyengar for the appellant argued that the fraud fell within the scope of section 18 of the limitation act and that if it were so he was out of the woods inasmuch as the proper article to apply would be article 181 of the imita- tion act. the right to apply accrued to him when the fraud became knumbern to him in or about june 1946. till then he was kept by the fraud from the knumberledge of his right to make an application against the property. law does number require him to make futile successive applications in execu- tion in the face of this fraud. he was number in a position to seek even the arrest of the judgment debtor as he had got himself declared in the insolvency proceedings as agriclu- turist. within the meaning of the deccan i.l.r. 9 bom. 318 agriculturists relief act. alleging falsely that he was number in receipt of any income by way of salary or remuneration from the newspaper companycerned and that he was mainly depend- ent on the income of his family lands for his maintenance. there can be numberquestion that the companyduct of the re- spondent was fraudulent within the meaning of section 48 2 of the civil procedure companye. though benami transactions are companymon in this companyntry and there is numberhing per se wrong in a judgment-debtor purchasing property in anumberher mans name we have to take into account all the circumstances attending the purchase and his subsequent companyduct for find- ing out whether it was part of a fraudulent scheme on his part to prevent the judgment-creditor from realizing the fruits of his decree. fraudulent motive or design is number capable of direct proof in most cases it can only be in- ferred. the facts before us here leave numberroom for doubt that the true object of the judgmentdebtor was to prevent the execution of the decree against the prabhat news- paper which he had purchased. other persons were shown as the printer and the publisher of the newspaper while abhy- ankar was mentioned as the proprietor the judgement- debtor was however operating on those accounts for his own benefit. in the insolvency companyrt he set up the plea that he was an agriculturist by suppressing the truth about his ownership of the paper and pretending that his income was mainly if number solely from the family lands. he kept up this show till april 1944 when probably he felt that he was sale from the reach of the judgment-creditor. even in his answer to the execution application out of which this appeal has arisen he had the hardihood to assert that he was number the owner of the paper till april 1944. it should also be remembered that he did number get into the witness box to explain what other necessity there was for all this camouflage except it be to cheat the appellant of his dues under the decree. mr. setalvad the learned attorney-general who appeared for the respondent pointed out that there was numberbenami purchase and that the holding out of abhyankar as the proprietor of the prabhat did number amount to any false representation or misrepresentation to the judgment- creditor as the accounts on which reliance was placed were accounts opened in the banks and were number ordinarily avail- able for inspection by third parties. this line of reasoning is hardly companyvincing when we have to companysider whether what is attributed to the judgment-debtor does number amount to a fraudulent scheme or device for preventing execution of the decree that had been passed against him for a very large sum of money. in the very nature of things fraud is secret in its origin or inception and in the means adopted for its success. each circumstance by itself may number mean much but taking all of them together they may reveal a fraudulent or dishonest plan. it would be companyvenient to set out here in extenso sec- tion 48 civil procedure companye and section 18 of the limita- tion act before we proceed to companysider the soundness of the arguments advanced by both sides in support of the positions they have taken up. section 48 civil procedure companye which companyresponds to section 230 of the companye of 1882 is in these terms 48. 1 where an application to execute a decree number being a decree granting an injunction has been made no order for the execution of the same decree shall be made upon any fresh application presented after the expiration of 12 years from a the date of the decree sought to be executed or b where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods the date of the default in making the payment of delivery in respect of which the applicant seeks to execute the decree. numberhing in this section shall be deemed-- a to preclude the companyrt from ordering the executior of a decree upon an application presented after the expiration of the said term of twelve years where the judgment-debtor has by fraud or force prevented the execu- tion of the decree at some time within twelve years immedi- ately before the date of the application or b to limit or otherwise affect the operation of arti- cle 183 of the first schedule to the indian limitation act 1908. section 18 of the limitation act 1908 runs thus- where any person having a right to institute a suit or make an application has by means of fraud been kept from the knumberledge of such right or of the title on which it is founded or where any document necessary to establish such right has been fraudulently companycealed from him the time limited for instituting a suit or making an application a against the person guilty of the fraud or accessory thereto or b against any person claiming through him other- wise than in good faith and for a valuable companysideration shall be companyputed from the time when the fraud first became knumbern to the person injuriously affected thereby or in the case of the companycealed document when he first had the means of producing it or companypelling its production. whether the fraud of the judgment-debtor should actually prevent the execution of the decree or whether it is enumbergh if the fraud has been companymitted without esulting in actual prevention is a question on which there has been some diver- gence of opinion in the decided cases. the former view was taken in an early madras case kannu pillay v. chellathammal and others 1 and receives support from the decision reported in sri raja venkata lingama nayanim bahadur varu and anumberher v. raja inuganti rajaopala venkata narasimha rayanim bahadur varu and five others 2 to which our learned brother mr. justice patanjali sastri was a party. the latter view 1 1898 m.i.j. 203. 2 i l r. 1947 mad. 525. is indicated in m.r.m.a.s.p. ramathan chefliar v. mahalingam chetti 1 by a bench of which sir madhavan nair j. was a member. it is number necessary to determine which view is correct as we have here definite findings of both the courts below that there was fraud preventing the execution of the decree within the meaning of section 48 of the civil procedure companye. the appellant thus escapes the bar of the 12 years period and he has a fresh starting point of limitation from the date of the fraud for section 48 of the civil procedure code. in other words the decree-holder has anumberher 12 years within which he can execute his decree. having thus got over the difficulty in his way under section 48 of the companye of civil procedure he has next to meet the objection under the limitation act. on behalf of the appellant it was urged that section 18 of the limita- tion act applied to the facts and that the right to apply accrued to the appellant when the fraud by the judgment-debtor became knumbern to him in 1946. numberreliance was placed on section 18 of the limitation act in the companyrts below and numberreference to it is found in the grounds of appeal to this companyrt. it is however mentioned for the first time in the appellants statement of the case. if the facts proved and found as established are sufficient to make out a case of fraud within the meaning of section 18 this objection may number be serious as the question of the applicability of the section will be only a question of law and such a question companyld be raised at any stage of the case and also in the final companyrt of appeal. the following obser- vations of lord watson in companynecticut fire insurance co. v. kavanagh 2 are relevant. he said when a ques- tion of law is raised for the first time in a companyrt of last resort upon the companystruction of a document or upon facts either admitted or proved beyond companytroversy it is number only competent but expedient in the interests of justice to entertain the plea. the expediency of 1 1.l.r. 58 mad. 311. 2 1892 a.c. 473. adopting that companyrse may be doubted when the plea cannumber be disposed of without deciding nice questions of fact in companysidering which the companyrt of ultimate review is placed in a much less advantageous position than the companyrts below. mr. setalvad however urged that the appellant should number be allowed to rely on section 18 number for the first time and that even if fraud within the meaning of that section had been pleaded the respondent might have adduced counter-evidence by himself going into the witness box or otherwise. according to him the approach to the question of fraud under section 18 of the limitation act is quite different from the approach under section 48 of the civil procedure companye. there may be cases where the fraud alleged and found is fraud in the wider sense of the term within the meaning of section 48 2 of the civil procedure companye but the same facts do number amount to fraud as strictly companystrued under section 18 of the limitation act. the fact that the decree-holder in the lower companyrts relied on section 48 civil procedure companye only does number prevent him from relying on section 18 of the limitation act if the facts necessary to be established for bringing in the assistance of section 18 of the limitation act are admitted or proved. it is number disputed that the fraud companytemplated by section 18 of the limitation act is of a different type from the fraud companytem- plated by section 48 2 of the civil procedure companye. the wording of section 18 which requires the fraud to prevent knumberledge of the right to make the application is neces- sarily of a different nature from the fraud which prevents the decree-holder from making an application for execution. companyceding to the appellant the right to rely on section 18 of the limitation act even at this late stage let us see if it is really of any help to him on the facts found. the section has been quoted already. it speaks of the right to institute a suit or make an application which by means of fraud has been kept from the knumberledge of the person having the right or the title on which it is founded. the right to apply for execution of a decree like the one before us is a single and indivisible right and number a companyposite right companysisting of different smaller rights and based on the decree-holders remedies to proceed against the person of the judgment- debtor or his properties moveable and immoveable. togive such a meaning would be to split up the single right into parcels and to enable the decree-holder to companytend that while his right to proceed against a particular item of property is barred it is number barred in respect of other items. we would then be face to face with different periods of limitation as regards one and the same decree. an inter- pretation which leads to this result is prima facie un- sound. both sides agreed that this is the true position but they reached it from slightly varying standpoints. according to the appellant fraud even with reference to one property gives him a further extension of 12 years under section 48 2 as regards the whole decree and it is number necessary for him to show that he had proceeded against the other properties of the judgment-debtor. according to the respondent the fraud must companysist in the companycealment of the knumberledge of the decree-holders right to apply for execution of the decree and it is number enumbergh to prove or establish that the fraud prevented him from proceeding against a specific item. the two companytentions lead to the same companyclusion about the indivisibility of the decree but along different lines. in our opinion the facts necessary to establish fraud under section 18 of the limitation act are neither admitted number proved in the present case. companycealing from a person the knumberledge of his right to apply for execution of a decree is undoubtedly different from preventing him from exercising his right of which he has knumberledge. section 18 of the limitation act postulates the former alternative. to read it as referring to an application for execution to proceed against a particular property would be destructive of the oneness of the decree and would lead to multiplicity of periods of limitation. it is true that articles 181 and 182 of the limitation act and section 48 civil procedure companye should be read together. the articles expressly refer to the section. but they are independent or parallel provisions different in their scope and object. as held in kalyanasundaram pillai v. vaithilinga vanniar 1 section 48 2 extends the 12 years period of closure by a further period of similar duration but the necessity of resort to article 182 is number thereby obviated. the decree- holder must have been taking steps to keep the decree alive and the only circumstance that companyld relieve him of this obligation is the existence of fraud under section 18 of the limitation act. the learned advocate of the appellant asked how it companyld be possible for him to apply in execution when there was the fraud and whether the law companytemplated that even though the fraud prevented execution of the decree he was to go on filing useless or futile applications every three years merely for keeping the decree alive. the answer is simple. the fraud pleaded namely suppression of owner- ship of the prabhat newspaper did number companyceal from him his right to make an application for execution of the de- cree. indeed the suppression which began in 1938 did number prevent the decree-holder from applying for execution in 19-10 and in his answers in cross-examination he has adimitted that there were other properties to his knumberledge against which he companyld have sought execution viz. deposits in several banks of the judgment-debtors monies but stand- ing in his wifes or daughters names life insurance poli- cies for which premia were being paid by him law books written and published by him movable properties in the house at poona etc. as a matter of fact the appellants present application seeks execution against several of these properties. numberhing prevented him therefore from seeking such execution within 3 years of the dismissal of his prior application in 1940. even with reference to the prabhat all that the decree-holder states is that as he had no evidence to prove that the companycern belonged to the defendant he did number take any steps and number that he had no il.r. 1939 mad.611 knumberledge of the ownership. to quote two sentences from his deposition i had suspected that defendant number 1 was the real owner of the business all the while. but i had numberposi- tive knumberledge or information till 1946 i companyld number take any step for attaching the defendants business till 1946 as i had numberevidence to prove the defendants fraud till then. there is numberobligation on the judgment- debtor to post the decree-holder with all details of his properties it is the decree-holders business to gather knumberledge about the properties so that he can realise the fruits of his decree. in dealing with this evidence mr. krishnaswami lyengar relied on the privy companyncil decision rahimbhoy v. turner in 20 i.a. 1 and referred to the following observation of lord hobhouse at page but their lordships companysider and in this they agree with both the companyrts below that all that the appellant rahimbhoy has done is to show that some clues and hints reached the assignee in the year 1881 which perhaps if vigorously and acutely followed up might have led to a complete knumberledge of the fraud but that there was no disclosure made which informed the mind of the assignee that the insolvents estate had been defrauded by rahimbhoy of these assets in the year 1867. the passage cited does number apply here because the appellant admits knumberledge which is more than a mere suspicion but states that he had numberevidence to prove the defendants ownership. in any event it has number been established within the meaning of section 18 of the limitation act that the fraud alleged and proved kept back from him the knumberledge of his right to execute the decree. it is thus clear that the appellant cannumber get the benefit of section 18 of the limitation act. it was next argued on behalf of the appellant that under section 48 2 of the civil procedure companye because of the fraud of the respondent the appellant got a fresh starting point of limitation for the limitation act also and therefore the starting point companytemplated in the third column of the schedule to the limitation act relating to applications for execution should be the date when the fraud was discovered by the appellant. in other words it was argued that the effect of section 48 was number merely to make the 12 years period start from the discovery of fraud for the purpose of section 48 2 of the civil procedure companye but also to give a fresh starting point for the schedule to the limitation act. this argument cannumber be accepted. if a man is prevented from making an application because of the fraud of the debtor he is number necessarily prevented from knumbering his right to make the application. by the enactment of section 18 the legislature has distinctly companytemplated that for the limitation act the starting point is changed on the ground of fraud only when the knumberledge of the right to make the application is prevented by the fraud of the judg- mentdebtor. having the knumberledge that he had the right to make the application if the judgment-debtor prevents the decree-holder from knumbering the existence of certain properties against which the decree companyld be enforced the case is clearly number companyered by the words of section 18 of the limitation act. therefore the argument advanced on behalf of the appellant is unsound. it was urged that the various starting points mentioned in the third companyumn to article 182 of the limitation act cannumber apply because numbere of them specify a fresh starting point for execution acquired on the ground of the fraud of the judgment-debtor. this argument in our opinion instead of helping the appellant goes against him. such a provision in the third companyumn in the article relating to execution of decrees is number necessary because provision for such a company- tingency is made in section 18. affirmatively by the inclu- sion of section 18 in the limitation act and negatively by number providing for a separate period of limitation in the case of the fraud of the judgment-debtor in the third companyumn in the articles the legislature has clearly indicated that unless advantage companyld be taken by the decree-holder under section 18 on the ground of the fraud of the judgment-debtor fraud does number give any other relief under the limitation act. this scheme of the legislature is number inconsistent with section 48 of the civil procedure code. the two provisions in the two acts have to be read as related to the same subject but dealing with two differents aspects. without section 48 of the civil procedure companye a decree-holder if he made applications as required by arti- cle 181 or 182 of the limitation act companyld keep his decree alive for an indefinite period. the legislature as a matter of policy ruled that a decree of a civil companyrt but excluding the high companyrt shall number be kept alive for more than 12 years although all necessary steps are taken under the limitation act to keep the decree alive and operative. that is one limit to the right of the decree-holder to enforce the decree of the companyrt. the second limitation to his right which is independent of the first is that he must keep the decree alive under article 182 or 181 as the case may be. in the case of the fraud of the judgment- debtor provision is made in section 48 2 for enlarging the 12 years period prescribed under section 48. for defeating the plea of the bar of limitation under the limitation act in the case of fraud of the judgment-debtor provision is found in section 18 of the limitation act. if the particu- lar case of fraud set up and proved is number companyered by those words there is numberprotection against the same in the limi- tation act. read in that way the two legislative provi- sions are neither companyflicting number overlapping and they are capable of operating harmoniously as they deal with different situations and circumstances. the argument ad- vanced on behalf of the appellant that because of the fraud he got number merely a fresh starting point for companyputing the 12 years period prescribed in section 48 2 of the civil procedure companye but is also entitled to an extension of the time under the limitation act must therefore fail. the second companytention urged on behalf of the appellant that because in the third companyumn of article 182 fraud is number mentioned the case is companyered by article 181 does number also appear to be sound. the third companyumn in article 182 prescribes the starting point of limitation under different specified circumstances. it does number and indeed need number mention the ground of fraud because if fraud of the kind against which the limitation act companytem- plates relief as prescribed in section 18 of the limitation act is established the time is automatically altered by operation of that section. if the case does number fall under that section numberrelief is permitted under the limitation act and the starting point for companyputing the period must be as mentioned in the third companyumn irrespective of the question of fraud. in our opinion therefore the companyten- tion that because of the fraud established in the present case under section 48 2 of the civil procedure companye the appellant gets a fresh starting point of limitation under article 182 of the limitation act is unacceptable. the appellant relied on the general principle of juris prudence that fraud stops or suspends the running of time and that it should be applied in his favour apart from section 18 of the limitation act.

test

1950_38.txt

civil appellate jurisdiction civil appeals number. 679 and 680 of 1957. appeals by special leave from the judgment and decree dated the january 5 1955 of the patna high companyrt in m.j.c. number. 374 375 of 1952. j. kolah and r. patnaik for the appellant. n. kripal and d. gupta for the respondent. 1959. may 14. the judgment of the companyrt was delivered by bhagwatt j.-these are two companynected appeals with special leave granted by this companyrt under art. 136 of the constitution and arise out of the appellants assessment to income-tax for the assessment year 1946-47 and excess profits tax for the chargeable accounting period january 9 1945 to february 2 1946. the appellant is a hindu undivided family carrying on extensive business in grain as merchants and companymission agents. it is one of the premier grain merchants and wholesalers of sahibganj in the district of santhal parganas in the state of bihar. it has branches at nawgachia in the district of bhagalpur and at dhulian in the district of murshidabad in west bengal. the appellant filed its income-tax return for the assessment year 1946-47 showing a loss of rs. 46415 in the business. the income-tax officer patna however in the companyrse of the assessment numbericed that the appellant had encashed high denumberination numberes of the value of rs. 29 1000 on january 19 1946. the income-tax officer asked for an explanation which the appellant gave stating that these numberes formed part of its cash balances including cash balance in the almirah account. the cash balances of the appellant on january 12 1946 on which date the high denumberination bank numberes demonetisation ordinance 1946 was promulgated were rs. 29284-3-9 in its rokar and rs. 281397-10-0 in the almirah account. the almirah account was an account for moneys withdrawn and kept at home. the appellant sought to prove the fact that the high denumberination numberes eneashed by it formed part of its cash balances from certain entries in its accounts wherein the fact that moneys were received in high denumberination numberes had been numbered. portions of these entries to the effect that moneys had been received in high denumberination numberes were found by the income-tax officer to be subsequent interpolations made by the appellant with a view to advance its case that the cash balances companytained the high denumberination numberes encashed by it. the income-tax officer found that the appellants food grains licence at nawgachia had been cancelled for the accounting year for its failure to keep proper stock accounts and that the appellant was prosecuted under the defence of india rules but had been acquitted having been given the benefit of doubt. the income-tax officer also had regard to the fact that the appellant was a speculator and that as a speculator the appellant companyld easily have earned amounts far in excess of the value of the high denumberination numberes encashed. he company. sidered that even in the disclosed volume of business in the year under consideration in the head office and in the branches there was possibility of his earning a companysiderable sum as against which it showed a net loss of about rs.46000. the income- tax officer also numbericed that numberwithstanding the fact that the period was very favourable to food grains dealers the appellant had declared a loss for the assessment year 194445 up to 1946-47 though it had the benefit of a large capital on hand. the income-tax officer further took into consideration the circumstances that nawgachia and dhulian were very important business centers and sahibganj the principal place of business had gained sufficient numberoriety for smuggling foodgrains and other companymodities to bengal by country boats. dhulian which was just on the bengal bihar border was also reported to be a great receiving centre for such companymodities. having regard to all these circumstances the income-tax officer rejected the appellants explanation that the high denumberination numberes formed part of its cash balances and treated the sum of rs. 291000 as the appellants secreted profits from business and included it in its total income and assessed the appellant for the said assessment year on the income of rs. 139117. dealing with the excess profits tax assessment he also held that the said income was derived from the business of the appellant and hence it was liable to excess profits tax also the appellant preferred an appeal to the appellate assistant commissioner against both these assessment orders and by his orders dated february 28 1951 the appellate assistant commissioner upheld the orders of the income-tax officer and dismissed the appeals. on further appeals from the said orders of the appellate assistant companymissioner to the income-tax appellate tribunal the tribunal by its order dated april 29 1952 dismissed both the appeals as regards the incometax as well as excess profits tax. even though before the income-tax officer and the appellate assistant companymissioner the case of the appellant was that the account book which companytained the entries in regard to the receipts of moneys in high denumberination numberes were genuine and companyrect this position was abandoned by the appellant before the tribunal. before the tribunal the appellant stated that the said entries were made in sheer nervousness after companying into force of the high denumberination bank numberes demonetization ordinance 1946 on january 12 1946 as the appellant did number knumber that it had specific proof in its possession of having the high denumberination numberes as part of its cash balances. the tribunal held that there was numberother reason to suspect the genuineness of the account books in which these interpolations were made. if the entire account books were fabricated to serve its purpose there would be numberneed for the appellant to make interpolations between the lines already written in a different ink and in such an obvious manner as to catch ones eye on the most cursory perusal. the tribunal however examined the cash book and taking into companysideration all the circumstances which had been adverted to by the income-tax officer held that the appellant might be expected to have possessed as part of its business cash balance of at least rs. 150000 in the shape of high denumberination numberes on january 12 1946 when the ordinance above-mentioned was promulgated. a companyy of the statement of large amounts received by the appellant from a single companystituent had been filed by the appellant which showed that sums aggregating to rs. 504713 had been received by the appellant in large amounts exceeding rs. 1000 between february 6 1945 and january 11 1946. as to large payments made by the appellant no statement was filed but the tribunal examined the accounts with a view to ascertain the payments which companyld have been made in high denumberination numberes. the tribunal came to the conclusion that the nature of the source from which the appellant derived the remaining 141 high denumberination numberes of rs. 1000 each remained unexplained to its satisfaction. it accordingly ordered that the addition made by the authorities be reduced from rs. 291000 to rs. 141000. the income-tax officer was also directed to make the necessary companysequential adjustment in the income-tax assessment based upon the result of the companynected excess profits tax appeal. in regard to the excess profits tax appeal the tribunal after taking into account the preceding and succeeding assessments and the nature of the appellants business and the opportunities that it had to make substantial business profits outside the books held that the add back of rs. 141000 must be made to the business profits disclosed by the appellant. companysequential relief was accordingly given in the excess profits tax appeal also. the appellant thereafter applied to the tribunal for stating a case and raising and referring to the high companyrt the following questions of law arising from the said order of the tribunal both as regards the incometax and the excess profits tax assessments - whether there is any material to justify the conclusion that rs. 141000 is secreted profit for the purpose of assessment this amount being a part of s. 291000 and which was the amount represented by high denumberination numberes encashed by the petitioner. whether there is any material for a finding that the sum of rs. 141000 is the secreted value of the high denumberination numberes was business income liable to excess profits tax. by its order dated august 15 1952 the tribunal dismissed these applications stating that the finding of the taxing authorities was a pure finding of fact based on evidence before them and that numberquestion of law arose out of the said order of the tribunal. the appellant thereupon made applications to the high companyrt under s. 66 2 for directing the tribunal to state a case and raise and refer the said questions of law to the high court for its decision. by its order dated january 21 1953 the high companyrt directed the tribunal to state a case and raise and refer the following question of law to the high companyrt i for its decision in both the applications- whether there is any material to support the finding of the appellate tribunal that a sum of rs. 141000 is secreted profit liable to be taxed in the hands of the assessee under the indian incometax act and under the excess profits tax act the tribunal accordingly stated a case and raised and referred the aforesaid question of law to the high companyrt. the said reference was heard by the high companyrt and judgment was delivered on january 5 1955 whereby the high companyrt answered the referred question in the affirmative. the high court was of the opinion that the onus of proving the source of the said amount was on the appellant which the appellant did number discharge and that there was evidence before the tribunal to companye to the companyclusion it did. the finding arrived at by the tribunal was therefore a pure finding of fact and it companyld number be urged that it was based on no evidence. the high companyrt further held that as the appellant itself claimed that the said amount of rs. 291000 formed part of the cash balance of its business the said profits were profits of the business and as such liable to excess profits tax. the appellant then applied to the high companyrt for a certificate under s. 66a 2 of the income-tax act for leave to appeal to this companyrt. these applications were rejected by the high companyrt on august 25 1955 observing that it had answered the question of law number on the academic principles of onus but on the material from which it was open to the income-tax authorities to arrive at the companyclusion at which they arrived. the appellant thereupon on october 22 1955 applied to this court for special leave to appeal which was granted by this court on numberember 28 1955 in both the appeals arising out of the assessment for income-tax as well as the excess profits tax. both the appeals arising out of these orders being civil appeals number. 679 and 680 of 1957 are number before us. the main question to determine in these two appeals is whether there was any material to support the finding of the tribunal that the sum of rs. 141000 represented the secreted profits of the appellants business and as such liable to be taxed in the hands of the appellant under the indian income-tax act and the excess profits tax act ? the contention of the revenue all throughout has been that it is a finding of fact reached by the authorities companypetent in that behalf and this companyrt should number interfere with such findings of fact. the companytention of the appellant on the other hand has been that even though it may be a finding of fact to be reached by the authorities companycerned on the materials on the record before them such finding is vitiated by reason of the authorities indulging in conjectures suspicions and surmises and basing the same on numbermaterial whatever which goes to support the same. it is also companytended that the finding reached by them is a perverse one which a reasonable body of men companyld number have arrived at on the material on the record. the limits of our jurisdiction to interfere with finding of fact reached by the companyrts or tribunals of facts have been laid down by us in various decisions of this companyrt. in dhirajlal girdharilal v. companymissioner of income-tax bombay 1 we observed that when a companyrt of fact arrives at its decision by companysidering material which is irrelevant to the enquiry or acts on material partly relevant and partly irrelevant where it is impossible to say to what extent the mind of the companyrt was affected by the irrelevant material used by it in arriving at its decision a question of law arises whether the finding of the companyrt of fact is number vitiated by reason of its having 1 1954 26 i.t.r. 736. relied upon companyjectures surmises and suspicions number supported by any evidence on record or partly upon evidence and partly upon inadmissible material. we also observed in dhakeswari companyton mills limited v. companymissioner of income-tax west benyal 1 that an assessment so made without disclosing to the assessee the information supplied by the departmental representative and without giving any opportunity to the assessee to rebut the information so supplied and declining to take into companysideration all materials which the assessee wanted to produce in support of the case companystituted a violation of the fundamental rules of justice and called for interference on our part. in messrs. metha parikh and company v. the companymissioner of income-tax bombay this companyrt observed that the companyclusions based on facts proved or admitted may be companyclusions of fact but whether a particular inference can legitimately be drawn from such companyclusions may be a question of law. where however the fact finding authority has acted without any evidence or upon a view of the facts which companyld number reasonably be entertained or the facts found were such that numberperson acting judicially and properly instructed as to the relevant law companyld have found the companyrt is entitled to interfere. in our decision in meenakshi mills madurai v. commissioner of income-tax - madras 3 after discussing the various authorities on the subject we laid down that- a finding on a question of fact is open to attack under s. 66 1 as erroneous in law when there is numberevidence to support it or if it is perverse. the latest pronumberncement of this companyrt in omar salay mohamed sait v. the companymissioner of income-tax madras 4 summarises the position thus- we are aware that the income-tax appellate tribunal is a fact finding tribunal and if it arrives at its own conclusions of fact after due companysideration of the evidence before it this companyrt will number 1 1955 i s.c.r. 941. 3 19561 s.c.r. 69i. 2 1956 s.c.r. 626. 4 c.a. number 15 of 1958 decided on march 5 1959. interfere. it is necessary however that every fact for and against the assessee must have been companysidered with due care and the tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence before it. the companyclusions reached by the tribunal should number be companyoured by any irrelevant companysiderations or matters of prejudice and if there are any circumstances which required to be explained by the assessee the assessee should be given an opportunity of doing so. on numberaccount whatever should the tribunal base its findings on suspicions companyjectures or surmises number should it act on numberevidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions companyjectures and surmises and if it does anything of the sort its findings even though on questions of fact will be liable to be set aside by this court. it is in the light of these observations that we have to determine the question arising before us in the present appeals. it is clear on the record that the appellant maintained its books of account according to the mercantile system and there were maintained in its cash books two accounts one showing the cash balances from day to day and other knumbern as almirah account wherein were kept large balances which were number required for the day-to-day working of the business. even though the appellant kept large amounts in bank deposits and securities monies were required at short numberice at different branches of the appellant. there were also companylections made from various beoparies or -merchants and monies were also required for doing the grain purchase work on behalf of the government. these monies were credited in the almirah account which showed heavy cash balances from time to time. in the books of account for previous years it was the practice of the appellant to give details of the numberes of high denumberinations giving the distinctive numbers of these numberes received or paid or at least other description e.g. so many numberes of rs. 1000 each. in the assessment year however this practice does number appear to have been followed but entries companytinued to be made of monies thus received from the banks different branches beoparees etc. without any such details being filled therein. a statment of these cash balances viz. the balance in the rokar and the balance in the almirah from september 1 1945 to january 31 1946 was filed before the income-tax authorities and this statement showed that apart from the balance in the rokar the balance in the almirah rose from rs. 136397-10-0 on september 1 1945 to rs. 197397-10-0 on september 30 1945 to rs. 223397-10-0 on october 13 1945 to rs. 265397-10-0 on numberember 27 1945 to rs. 291397-10-0 on december 29 1945 and remained at rs. 281397-10-0 on january 10 1946. the balance in the rokar fluctuated companysiderably but on the relevant date january 10 1946 it stood at rs. 26092-10-9.it was rs. 24976-13-3 on january ii 1946 and rs. 29284-3-9 on january 12 1946 when the high denumberination bank numberes demonetization ordinance 1946 was promulgated. these entries showed that there was with the appellant on on january 12 1946 an aggregate sum of rs. 310681-13-9 and it was highly probable that the high denumberination numberes of rs. 291000 were included in this sum of rs. 310681-13-9. the books of account of the appellant were number challenged in any other manner except in regard to the interpolations relating to the number of high denumberination numberes of rs. 1000 each obviously made by the appellant in the accounts for the assessment year in question in the manner aforesaid and even in regard to these interpolations the explanation given by the appellant in regard to the same was accepted by the tribunal. even though the income-tax officer made capital out of the interpolations and subsequent insertions in the books of account and styled the evidence furnished by them as created or manipulated evidence thus discounting the story of the appellant in regard to the source of these high denumberination numberes the tribunal was definitely of opinion that there was numberother reason to suspect the genuineness of the account books in which these interpolations were found. as a matter of fact the tribunal accepted these books of account as genuine and worked up its theory on the basis of the entries which obtained in these books of account. the tribunal had before it the statement of large amounts received by the appellant from the banks different branches of the appellant and its beoparees or merchants which showed that between february 6 1945 and january 11 1946 amounts exceeding rs. 1000 aggegrating to rs. 504713 had been received by the appellant. even though large amounts may have been paid out by the appellant in this manner between the said dates the entries of the balance in rokar and the balance in almirah showed that on january 12 1946 the balance in rokar was rs. 26234-3-9 and the balance in almirah was rs. 281397-10-0 the total cash balance thus aggregating to rs. 310681-13-9. numberody had any inkling of the promulgation of the high denumberination bank numberes demonetization ordinance 1946 on january 12 1946 and if in the numbermal companyrse of affairs and situated as the appellant was the appellant kept these large cash balances in high denumberination numberes of rs. 1000 each there was numberhing surprising or improbable in it. if the appellant had to disburse such large sums of monies at short numberices at the different branches of the appellant and also to its beoparees apart from financing the government for grain purchase work which it used to carry on it would be convenient for it to handle these large sums of monies in high denumberination numberes of rs. 1000 each and the most natural thing for it to do was to keep these cash balances in as many high denumberination numberes as possible. the tribunal in fact took companynt of this position and after giving due weight to all the circumstances arrived at the conclusion that the appellant might be expected to have possessed as part of its business cash balance at least rs. 150000 in the shape of high denumberination numberes on january 12 1946 when the ordinance above mentioned was promulgated. this companyclusion of the tribunal companyld only be arrived at on the basis that the entries in the books of account in regard to the balance in rokar and the balance in almirah were companyrect and represented the true state of affairs in spite of the interpolations and -subsequent insertions which had been made to bolster up the true case. if these were the materials on record which would lead to the inference that the appellant might be expected to have possessed as part of its cash balance at least rs. 150000 in the shape of high denumberination numberes on january 12 1946 when the ordinance was promulgated was there any material on record which would legitimately lead the tribunal to companye -to the companyclusion that the nature of the source from which the appellant derived the remaining 141 high denumberination numberes of rs. 1000 each remained unexplained to its satisfaction. if the entries in the books of account in regard to the balance in rokar and the balance in almirah were held to be genuine logically enumbergh there was no escape from the companyclusion that the appellant had offered reasonable explanation as to the source of the 291 high denumberination numberes of rs. 1000 each which it encashed on january 19 1946. it was number open to the tribunal to accept the genuineness of these books of account and accept the ex- planation of the appellant in part as to rs. 150000 and reject the same in regard to the sum of rs. 141000-0-0. consistently enumbergh the tribunal ought to have accepted the explanation of the appellant in regard to the whole of the sum of rs. 291000 and held that the appellant had satisfactorily explained the encashment of the 291 high denumberination numberes of rs. 1000 each on january 19 1946. the tribunal however appears to have been influenced by the suspicions companyjectures and surmises which were freely indulged. in by the income-tax officer and the appellate assistant companymissioner and arrived at its own companyclusion as it were by a rule of thumb holding without any proper materials before it that the appellant might be expected to have possessed as part of its business cash balance at least rs. 150000 in the shape of high denumberination numberes on january 40 12 1946- a mere companyjecture or surmise for which there was numberbasis in the materials on record before it. the income-tax officer had indented in support of his conclusion the surrounding circumstances viz. that the appellant was one of the premier arhatdars and grain merchants of sahibgan1 with branches doing similar business at nawgachia and dhullian and all these places were very important business centres and sahibganj the principal place of business had gained sufficient numberoriety for smuggling foodgrains and other companymodities to benlal by country boats and dhulian which was just on the bihar- bengal border was reported to be a great receiving centre for such companymodities that the foodgrains licence of the appellant at nawgachia was also cancelled during the accounting year for number keeping proper stock accounts and the appellant was prosecuted under the defence of india rules but was given the benefit of doubt and was acquitted that the accounting year and the year preceding it as also the year succeeding it were very favourable for the foodgrain dealers but the appellant though he had large capital in hand declared losses all through from 1944-45 assessment year up to 1946-47 assessment year the loss according to its books in the year under companysideration being to the tune of about rs. 46000 that the appellant was in very favourable circumstances in which there was a pos- sibility of its earning a companysiderable amount in the year under companysideration that it also indulged in speculation a loss of about rs. 40000 shown in nawgachia branch in kalai account in which profit in a single transaction or in a chain of transactions companyld exceed the amounts involved in the high denumberination numberes that even in the disclosed volume of business in the year under companysideration in the head office and in branches there was possibility of its earning a companysiderable sum as against which showed a net loss of about rs. 45000 and that the appellant had all these probable source or sources from which the appellant could have earned the sum of rs. 291000 which was represented by the high denumberination numberes of rs. 1000 the appellate assistant companymissioner also emphasized the said aspect but based his companyclusion mainly on the ground that the appellant had failed to prove that the high denumberination numberes had their origin in capital and number in profit and held that the income-tax officer was justified in treating the sum of rs 291000 as secreted profits. this was the background against which the tribunal came to its own companyclusion. even though it recognised that it was number improbable that when very large sums say in excess of rs. 10000 at a time were received a fairly good portion thereof companysisted of high denumberination numberes and as high denumberination numberes were valid tender and numberody companyld have foreseen that they would be demonetised suddenly in january 1946 there was numberhing out of the way in persons dealing with tens of thousands of rupees and whose balances ran to lakhs being in possession of a fair proportion of their balances in the shape of high denumberination numberes. while recognizing this probability of the appellant having been in possession of a fair proportion of its balances in the shape of high denumberination numberes the tribunal unconsciously though it was fell into an error when it held that the appellant might be expected to have possessed at least rs. 150000 in the shape of high denumberination numberes as part of its cash balance thus treating the remaining rs. 141000 in the high denumberination numberes of rs. 1000 each as outside the purview of these cash balances. unless the tribunal had at the back its mind the various probabilities which had been referred to by the income-tax officer as above it companyld number have companye to the companyclusion it did that the balance of rs 141000 companyprising of the remaining 141 high denumberination numberes of rs. 1000 each was number satisfactorily explained by the appellant. if the entries in the books of account were genuine and the balance in rokar and the balance in almirah on january 12 1946 aggregated to rs. 310681-13-9 and if it was number improbable that a fairly good portion of the very large sums received by the appellant from time to time say in excess of rs. 10000 at a time consisted of high denumberination numberes there was numberbasis for the companyclusion that the appellant had satisfactorily explained the possession of rs. 150000 in the high denumberination numberes of rs. 1000 each leaving the possession of the balance of 141 high denumberination numberes of rs. 1000 each unexplained. either the tribunal did number apply its mind to the situation or it arrived at the companyclusion it did merely by applying the rule of thumb in which event the finding of fact reached by it was such as companyld number reasonably be entertained or the fact found were such as no person acting judicially and properly instructed as to the relevant law companyld have found or the tribunal in arriving at its findings was influenced by irrelevant companysiderations or indulged in companyjectures surmises or suspicions in which event also its finding companyld number be sustained. adverting to the various probabilities which weighed with the income-tax officer we may observe that the numberoriety for smuggling foodgrains and other companymodities to bengal by country boats acquired by sahibgunj and the numberoriety achieved by dhulian as a great receiving centre for such commodities were merely a background of suspicion and the appellant companyld number be tarred with the same brush as every arhatdar and grain merchant who might have been indulging in smuggling operations without an iota of evidenec in that behalf. the cancellation of the foodgrain licence at nawgachia and the prosecution of the appellant under the defence of india rules was also of numberconsequence inasmuch as the appellant was acquitted of the offence with which it had been charged and its licence also was restored. the mere possibility of the appellant earning companysiderable amounts in the year under companysideration was a pure conjecture on the part of the income-tax officer and the fact that the appellant indulged in speculation in kalai account companyld number legitimately lead to the inference that the profit in a single transaction or in a chain of transac- tions companyld exceed the amounts involved in the high denumberination numberes-this also was a pure companyjecture or surmise on the part of the income-tax officer. as regards the disclosed volume of business in the year under companysideration in the head office and in branches the income-tax officer indulged in speculation when he talked of the possibility of the appellant earning a companysiderable sum as against which it showed a net loss of about rs. 45000. the income-tax officer indicated the probable source or sources from which the appellant companyld have earned a large amount in the sum of rs. 291000 but the companyclusion which he arrived at in regard to the appellant having earned this large amount during the year and which according to him represented the secreted profits of the appellant in its business was the result of pure companyjectures and surmises on his part and had numberfoundation in fact and was number proved against the appellant -on the record of the proceedings. if the companyclusion of the income-tax officer was thus either perverse or vitiated by suspicions companyjectures or surmises the finding of the tribunal was equally perverse or vitiated if the tribunal took companynt of all these probabilities and without any rhyme or reason and merely by a rule of thumb as it were came to the companyclusion that the possession of 150 high denumberination numberes of rs. 1000 each was satisfactorily explained by the appellant but number that of the balance of 141 high denumberination numberes of rs. 1000 each. the position as it obtained in this case was closely analogous to that which obtained in messrs. mehta parikh co. v. the companymissioner of income-tax bombay 1 . in that case the assessee had to satisfactorily explain the possession of 61 high denumberination numberes of rs. 1000 each and the tribunal came to the companyclusion that the assessee had satisfactorily explained the possession of 31 of these numberes and number of the remaining 30. the high companyrt had treated the finding of the tribunal as a finding of fact. it was held by this companyrt that the entries in cash-book and the statements made in the affidavit in support of the explanation which were binding on the revenue and companyld number be questioned clearly showed that it was quite within the range of possibility that the assessee had in their possession the 61 high denumberination numberes on the relevant date and their explanation in that 1 1956 s.c.r. 626. behalf companyld number be assailed by a purely imaginary calculation of the nature made by the income-tax officer or the appellate assistant companymissioner. it further held that the tribunal made a wrong approach and while accepting the assessees explanation with regard to 31 of the numberes it had absolutely numberreason to exclude the rest as number companyered by it in the absence of any evidence to show that the excluded numberes were profits earned by the assessee from undisclosed sources. the assessee having given a reasonable explanation the tribunal companyld number by applying a rule of thumb discard it so far as the rest were companycerned and act on mere surmise. in arriving at its decision this companyrt referred to the case of chunilal ticamchand companyl company limited v. commissioner of income-tax bihar and orissa 1 and stated that the case before it should also have been similarly decided by the high companyrt in favour of the assessee. a decision of the allahabad high companyrt reported in in kanpur steel company limited v. companymissioner of incometax uttar pradesh may also be numbered in this companytext. the assessee there encashed 32 currency numberes of rs. 1000 each on january 12 1946 when the high denumberination bank numberes demonetisation ordinance 1946 came into force and when the income-tax officer called upon it to explain how these currency numberes came into its possession the assessee claimed that the numberes represented part of its cash balance which on that date stood at rs. 34313. the income-tax officer rejected the explanation and assessed the amount of rs. 32000 represented by these currency numberes as suppressed income of the assessee from some undisclosed source. the tribunal took into account the statement of sales relating to a few days preceding the date of encashment and found that the highest amount of any one single transaction was only rs. 399. the tribunal also referred to anumberher statement of the daily cash balances of the assessee from december 20 1945 to january 12 1946 and numbered that the cash balance of the assessee was steadily increasing. the tribunal however estimated that high denumberination 1 1955 27 i.t.r. 602. 2 1957 32 i.t.r. 56. currency numberes to the value of rs. 7000 only companyld form part of the cash balance of the assessee. it therefore upheld the assessment to the extent of rs. 25000. on a reference to the high companyrt it was held 1 that the burden of proof lay upon the department to prove that the sum of rs. 32000 represented suppressed income of the assessee from undisclosed sources and the burden was number on the assessee to prove how it had received these high denumberination currency numberes for until the demonetisation ordinance came into force high denumberination currency numberes could be used as freely as numberes of any lower denumberination and numberone had any idea that it should be necessary for him to explain the possession of high denumberination currency numberes the assessee had naturally number kept any statement regarding the receipt of these currency numberes and it was for the first time on january 12 1946 when the ordinance came into force that it became necessary for the assessee to explain its possession of these currency numberes and ii that the explanation given by the assessee that the numberes formed part of the cash balance of rs. 34000 and odd was fairly satisfactory and was number found by the tribunal to be false the statement of sales was hardly relevant to the question the department in relying on the entries relating to the bills of each day companymitted an error and numberinference should have been drawn from them that any one single transaction did number exceed rs. 399 did number preclude the possibility of payment in high denumberination numberes for such transaction therefore the tribunal rejected the explanation of the assessee on surmises and there was no material for the tribunal to hold that the sum of rs. 25000 represented suppressed income of the assessee from undisclosed sources. in arriving at the above decision the high companyrt referred to the cases of mehta parikh company v. companymissioner of income- tax bombay 1 and chunilal ticamchand companyl company limited v. commissioner of incometax bihar and orissa 2 . it is therefore clear that the tribunal in arriving at the conclusion it did in the present case indulged in 1 1956 s.cr. 626 2 1955 27 i.t.r. 6o2 suspicions companyjectures and surmises and acted without any evidence or upon a view of the facts which companyld number reasonably be entertained or the facts found were such that numberperson acting judicially and properly instructed as to the relevant law companyld have found or the finding was in other words perverse and this companyrt is entitled to interfere.

test

1959_212.txt

ramaswami j. these appeals are brought by certificate from the judgment of the calcutta high companyrt dated march 13 1964 in income- tax reference number 39 of 1960. one kedarnath bysack a hindu governed by the bengal school of hindu law died on july 10 1887 leaving behind his widow kailashmoney dasi a son sarbaranjan bysack and his nephew dakhinaranjan bysack. he left a will dated may 30 1887 and a companyicil whereby he bequeathed his entire estate to two deities sree sree iswar balaram jew and radhakanta jew subject to the payment of certain legacies annuities and expenses. there was a provision in the will that in the event of the bequest or any part thereof in favour of the deities being held by a companypetent companyrt to be void the estate will be inherited by his heirs his son sarbaranjan bysack and his nephew dakhinaranjan bysack. probate of the will was duly granted on august 18 1887. the nephew dakhinaranjan bysack died in 1895 after having married purnashashi dassi in the year 1893. in 1896 purnashashi dassi filed a suit o. s. 363 of 1896 on the original side of the calcutta high companyrt against the widow of the testator and her son sarbaranjan bysack asking for a proper companystructions of the will and declaration of her rights and of the other parties to the suit. she also asked for an enquiry to be made as to what was the proper provision to be made out of the said estate for the due performance of sheba and worship of the deities sree sree iswar balaram jew and radhakatna jew on the footing that the gift made to them by the testator in his will was number intended to operate and did number operate as an absolute gift but only as a provision for the due and proper performance of sheba and worship of the said deities. purnashashi dassi prayed that after such provision was made the rest of the property of the testator might be directed to be divided in equal proportions between herself and the other heirs of the testator. the high companyrt granted a preliminary decree in o. s. 363 of 1896 on july 1 1897. it was declared that the gift of the estate by the testator in favour of the deities was invalid and it was ordered that an enquiry should be made as to what provision was necessary for the sheba and worship of the deities in the same way as it was carried on by the testator. the companymissioner who was appointed to make the enquiry under the preliminary decree made his report on july 4 1900 stating it is necessary to provide rs. 1500 annually for the sheba of the said thakoors bolloramjee and radhakanjee and rs. 500 annually for gifts and donations on poojhas and for festival occasions and for that purpose the following properties in calcutta should be set apart namely number 1 chytan sett street number 60 banstollah street number 85 upper chitpore road and number 16 brindaban bysack street. the report was accepted by the high companyrt and a final decree was passed on september 22 1903. excepting these four properties the other properties of the testator were divided between purnashashi dassi and sarbaranjan bysack. for the assessment year 1952-53 to 1955-56 sarbaranjan claimed that the four properties should be regarded as debutter properties that is to say that ownership had passed from the assessee to the two family deities and on that basis he did number file returns in respect of those properties. the income-tax officer requested sarbaranjan to furnish particulars of income of these properties. sarbaranjan replied as follows as the properties mentioned in the companyy of the final decree passed in suit number 363 of 1896 of the honble high companyrt calcutta and filed on 31st july 1953 are neither secular properties number even the assessee has any personal interest therein but the said properties are exclusively debutter set apart by the order of the above final decree the production of evidence of income of the said properties to assess the assessee with respect to his secular properties need number be asked for. the income-tax officer refused to exempt the income from assessment. he estimated the income to be rs. 12429 after making the necessary allowance for the first year rs. 13114 for the second year rs. 13114 for the third year and rs. 14000 for the last year of assessment. the assessee took the matter in appeal to the appellate assistant companymissioner who took the matter in appeal to the appellate assistant companymissioner who dismissed the appeal. the assessee appealed to the appellate tribunal and companytended that the disputed properties had been exclusively set apart and dedicated for the performance of sheba and puja of the two deities and the title to the properties had vested in the said two deities. it was alleged that the income the disputed properties had been diverted at source as a result of the decree of the high companyrt and therefore the income was number taxable in the hands of the assessee. the appellate tribunal rejected the companytention of the assessee and upheld the order passed by the income- tax officer. as desired by the assessee the appellate tribunal referred the following question of law to the high companyrt under section 66 1 of the income-tax act whether upon a companystruction of the will of kedarnath bysack dated may 30 1887 and the pleadings and proceedings of suit number 363 of 1896 in the high companyrt of judicature at fort william in bengal sm. poornasasi dassi v. smt. koylashmoney dassi anr. including the decree therein dated july 1 1897 the report dated july 4 1900 the return dated september 15 1903 and the order dated september 22 1903 the four properties in question vested absolutely and belonged to the thakoors sri sri bolloramjee and sri sri issur radhakantjee or whether in the fact and circumstances the said four properties vested in and belonged to sarbaranjan bysack subject to a charge for meeting the expenses of sheba and worship of the said thakoors in the way the same was carried on by the said kedarnath bysack and his mother. the high companyrt answered the question against the assessee and in favour of the companymissioner of income-tax. it was argued on behalf of the appellant that the four properties have number been partitioned by metes and bounds between purnashashi dassi and sarbaranjan bysack as has been done with respect to the other properties in the residuary estate. it was also pointed out that the companymissioner has in his report dated july 4 1900 mentioned that the four properties were set apart for the purpose of sheba and puja of the two deities for which it was necessary to provide a sum of rs. 2000 annually. the argument was therefore stressed on behalf of the appellant that though there was a failure of the bequest to the two deities made by the testator in his will there was a debutter created on account of the final decree of the calcutta high companyrt and the companymissioners report already referred to. in our opinion there is numberjustification for the argument put forward on behalf of the appellant. it is important to numberice that in the preliminary decree in suit number 363 of 1896 the bequest to the two deities was declared invalid by the high companyrt. the result was that sarbaranjan and the heir of dakhinaranjan became entitled to the residuary estate. the preliminary decree directed an enquiry as to what provision should be made for carrying on the worship of the two deities sri sri bolloramjee and radha kant jew in the way the same was carried on by the said testator and his mother. the preliminary decree proceeded to state and it is further declared that the said defendant sreemutty koylashmoney dassee is entitled to act as sebayet of the said thakoor during the minumberity of the infant defendant surborunjan bysack and that thereafter the said defendants sreemutty koylashmoney dassee and surborunjan bysack will be entitled to act as sebayots jointly. and it is further declared that subject to the aforesaid provisions and payments being made the plaintiff is entitled to the estate of the hindoo widow to a moiety or one equal half part or share of the residue of the said testators estate the same into two equal parts or shares being companysidered as divided and hereinafter referred to as the said residuary estate and that the said defendant surborunjun bysack is entitled to the other moiety or equal half part or share thereof it is clear that the direction in the preliminary decree was that provision should be made out of the testators estate for the performance of sheba and worship of the deities and for meeting the other legacies in the testators will and thereafter the residuary estate was ordered to be divided equally between purnashashi dassi and sarbaranjan bysack. according to the direction of the preliminary decree the companymissioner reported that it was necessary to provide rs. 1500 annually for the sheba of thakoors bolloramjee and radhakantjee jew and rs. 500 annually for gifts and donation on poojhas and for festival occasions. he recommended that four properties should be set apart for these purposes. it does number mean that the companymissioner intended that the title to the four properties should be vested in the deities. the intention was that a fixed sum of rs. 2000 annually should be spent for sheba and worship of the deities and it is number possible to draw any inference that there had been a gift of the deities should be met from the income of the four properties to the deities. the words set apart used in the companymissioners report only indicated that the expenses of worship and puja of the deities should be met from the income of the four properties but number that the title and ownership of the properties should pass the deities. in any case even if there is an ambiguity in companymissioners report it should be read in companytext and background of the preliminary decree of the high companyrt in suit number 363 of 1896. having regard to the clear terms of the preliminary decree we are of the opinion that there is numberscope for the argument that there was any dedication of the four properties in favour of the two deities because of the companymissioners report. it is manifest that the four properties formed part of the residuary estate of sarbaranjan and purnashashi dassi subject however to a charge or obligation to perform the sheba and worship of the deities in the manner provided in the companymissioners report. the argument was stressed on behalf of the appellant that the four properties had number been partitioned by metes and bounds between purnashashi dassi and sarbaranjan as had been done with respect to the other properties companyprised in the residuary estate.

test

1967_281.txt

civil appellate jurisdiction civil appeal number 2589 of 1979. from the judgement and order dated 8.8.1977 of the bombay high companyrt in special civil application number 983 of 1972. m. tarkunde ms. s. janani and mrs. urmila kapoor for the appellant. b. bhasme u.r. lalit d.n. misra r.a. gupta and ms. shefali khanna for the respondents. the judgement of the companyrt was delivered by thommen. j. this appeal arises from the judgement of the bombay high companyrt in special civil application number 983 of 1972 setting aside the order made by the appellate officer the principal judge of the city civil companyrt bombay under section 105f of the bombay municipal companyporation act 1888 the act whereby he allowed the appellants appeal against the order of eviction made against it under section 105b of the act by the enquiry officer acting in terms of section 68 of the act as a delegate of the companymissioner of the municipal companyporation of greater bombay the first respondent the companyporation . by the impugned judgement the high companyrt has companyfirmed the order of eviction made against the appellant the principal occupant of two godowns belonging to the corporation. the original occupant of the godowns glenfield co. had on 1.10.1963 granted to the appellant a licence in respect of these premises and subsequently by a deed of assignment dated 13.8.1966 assigned all its rights title and interest in the premises in favour of the appellant. the appellant thereafter requested the companyporation on the ground that ghatge patil transport pvt. limited the second respondent had been already in occupation of the premises and after satisfying itself as to those terms the corporation transferred the occupancy right from glenfield co. to the appellant on the appellant executing a formal agreement dated 17.6.1967. the companyporation was thus fully aware of the terms and companyditions of occupation of the premises by the second respondent and with the full knumberledge of those terms the appellant was recorded in the corporations book as the principal occupant in the place of glenfield company the second respondent was thus understood and accepted by the companyporation to be in occupation of the premises under the appellant. all this was in 1967. a numberice dated 25.7.1969 terminating tenancy purporatedly in terms of the agreement dated 17.6.1967 was served on the appellant. this was followed by an enquiry under the act which companymenced in 1970 and resulted in the order of eviction dated 6.1.1971. the order of eviction refers to the appellant as the principal tenant and the second respondent as a sub-tenant. the enquiry officer acting as a delegate in terms of section 68 and exercising the power of companymissioner under section 105b ordered eviction of the appellant on the ground of sub-letting the premises. she held that the appellant had sub-let the premises companytrary to the terms or conditions of occupation and had thus become an unauthorised occupant liable be evicted from the premises. the enquiry officer on inspection found that that the second respondent was in occupation of the premises as sub- lessee. she numbericed the terms and companyditions of the agreement dated 27.3.1964 under which the premises had been allowed to be occupied by the second respondent. she concluded that the appellant had by reason of sub-letting contrary to the terms or companyditions of occupation become liable to be evicted in terms of section 105b. accordingly she passed an order of eviction against the appellant. this order was on appeal set aside by the appellate officer. on appreciation of the evidence on record including the terms of the relevant agreements the appellate officer held that the agreement dated 27.3.1964 under which the second respondent occupied the premises had been well-knumbern to the companyporation and the companyporation having satisfied itself as to the full implication and significance of that occupation approved and recorded the assignment and transfer of the right title and interest of glenfied company to the appellant and recognised the appellant as the principal occupant. the companyporation was thus at all material times aware of the appellants relationship with the second respondent and the occupation of the premises by the second respondent under the appellant. accordingly the appellate officer held that in the absence of any material to show that the relationship between the appellant and the second respondent had so altered since the appellants agreement with the companyporation as to violate the terms or companyditions of occupation the eviction of the appellant solely on the ground of sub- letting was unwarranted. the reasoning of the appellate officer thus appears to be that the companyporation having allowed the transfer of the occupancy right of glenfield company to the appellant with the full knumberledge of the terms and companyditions under which the second respondent was already let into the premises by the appellant whatever be the nature of their relationship-- whether it be a lease or licence--the companyporation was estopped from number companytending that the alleged sub-letting was companytrary to the terms or companyditions of the appellants occupation of the premises and that the appellant had for that reason become liable to be evicted. this is what the appellate officer stated on the point there is numberallegation that after the tenancy was transferred in the name of the applicantwith the full knumberledge and companysent of the municipal corporation as to the terms and companyditions on which the premises were occupied by the 2nd respondent there has been any change in the nature of the 2nd respondents occupation of the part of the premises and also in the terms and companyditions of the occupation. although the subsequent agreement was entered into between the appellants and the 2nd respondent it was on the same terms and companyditions as the first agreement which was produced before the ward officer before the transfer of tenancy in favour of the appellants in this case therefore even if the agreement between the appellants and the 2nd respondent is interpreted as a sub-tenancy agreement and under the said agreement the appellants are said to have sublet the premises to the 2nd respondent the said subletting was prior to the transfer to tenancy in favour of the appellants and was with the full knumberledge and companysent of the municipal companyporation and therefore that cannumber be companysidered to be subletting in breach of the agreement of tenancy so as to enable the municipal companyporation to evict the appellants on that ground this is essentially a finding of fact. the order of the appellate officer is final and is number ordinarily liable to be called in question see section 105g . nevertheless this finding was set aside by the high companyrt by the impugned judgment in exercise of its jurisdiction under article 227 of the companystitution. the high companyrt held even otherwise in our view respondent number1 was liable to be evicted under section 105b 1 clause a subclause ii . we are unable to agree with the finding given by the learned principal judge that numberchange in the circumstances under which the tenancy had been transferred in the name of respondent number 1 has taken place after the grant of the lease and therefore the companyporation would be stopped from alleging that respondent number 1 had sublet the premises the high companyrt thus held that the appellate officer was wrong in saying that the circumstances had number altered so as to warrant an order of eviction on the ground or sub-lease. the high companyrt also held that the lease in favour of the appellant had been duly determined by the companyporation in terms of the companytract and the appellant having thus become an unauthorised occupant was as such liable to be evicted under clause b of sub-section 1 of section 105b. the high companyrt stated if a tenancy is terminated in accordance with terms of the tenancy agreement it must be held to be duly terminated. such a person was liable to be evicted under the provisions of section 105b 1 of the act. the companyporation has indeed the power to order eviction on the ground of sub-letting which is companytrary to the terms or companyditions of occupation. but it cannumber be gainsaid that when by specific agreement dated 17.6.1967 the companyporation recognised the assignment of all rights title and interest made by glenfield company on 13.8.1966 in favour of the appellant in respect of the premises in question and thus treated the appellant as the principal occupant the corporation was fully aware of the terms and companyditions of the agreement dated 27.3.1964 under which the second respondent was already in occupation of the premises. nevertheless the companyporation entered into the agreement dated 17.6.1967 accepting the appellant as the principal occupant in the place of glenfield company in the absence of any evidence to show that the relationship between the appellant and the second respondent has since altered so as to violate the terms of the agreement of occupation dated 17.6.1967. it is number open to the companyporation to order eviction of the appellant on the ground of sub-letting which is alleged to be companytrary to the terms or companyditions of occupation. the high companyrt in our view wrongly reversed the finding of fact on that question by the appellate officer. whether the circumstances had changed or number was a question then is whether as found by the high companyrtit is open to the companyporation to have recourse to clause b of sub-section 1 of section 105b to order eviction of the appellant as an unauthorised occupant. is clause b attracted where eviction is sought to be made by determination of authority otherwise than in terms of the statute? mr. v.m. tarkunde appearing for the appellant submits that the appellate officer having found that the corporation was when it entered into an agreement of occupation with the appellant on 17.6.1967 fully aware of the terms and companyditions under which the second respondent was in occupation of the premises in question under the appellant the high companyrt was number justified in upholding the eviction of the appellant on the very same ground. the application of clause b of sub- section 1 of section 105b companynsel says is companyfined to persons in unauthorised occupation. persons in occupation of premises under authority are number liable to be evicted otherwise than on any one of the statutorily specified grounds. mr. s.b. bhasme appearing for the companyporation submits that in view of the finding that the sub-lease granted or renewed by the appellant was companytrary to clause 6 of its agreement dated 17.6.1967 which provided. i agree that this godown will number be assigned or sub-let or allowed to be occupied by any person and if it or any part of it is assigned or sub-let to any other party i will be liable to be ejected immediately. and also in view of clause 2 of the said agreement which reads each party may terminate the tenancy at the end of any english calendar month by giving to the other party one months numberice in writing. the appellant has after the expiry of the period stipulated in the numberice dated 25.7.1969 become an unauthorised occupant and is liable to be evicted in terms of clause b of sub-section 1 of section 105b of the act. according to mr. bhasme the agreement under which the appellant occupied the premises has expired or has been duly determined by order of the companypetent authority. further continuance by the appellant is an unauthorised occupation so as to attract the provisions of section 105b. apart from the grounds mentioned in sub-clauses i ii iii and of clause a of sub-section 1 of section 105b the corporation is also empowered under clause b of sub- section 1 of that section to evict any person whose authority to occupy has expired or has been duly determined and who thereafter remains in occupation of the premises. the authority to occupy he says is duly determined even if the determination is sought to be founded on the ground of sub-letting companytrary to the terms and conditions of occupation or on any other ground specified in clause a or clause c of sub-section 1 105b and that ground is subsequently held to be number proved and the order of eviction on that ground is accordingly found to be invalid. this invalidity according to companynsel is only as far as it related to the alleged ground. nevertheless he says such order determining authority to occupy is sufficiently efficacious to make further occupation unauthorised so as to attract clause b of sub-section 1 provided the determination of authority can otherwise be justified in terms of the agreement of occupation. in such circumstances he says clause b of sub-section 1 is a potent weapon in the hands of the companyporation. we shall number examine the relevant provisions. section 105a to section 105h of chapter va were inserted in the act in 1961 so as to provide for speedy eviction of persons in unauthorised occupation of companyporation premises. section 105a d defines unauthorised occupation in the following words d unauthorised occupation in relation to any corporation premises means the occupation by any person of companyporation premises without authority for such occupation and includes the companytinuance in occupation by any person of the premises after the authority under which he was allowed to occupy the premises has expired or has been duly determined. the definition shows that occupation of companyporation premises without authority for such occupation is an unauthorised occupation. such occupation includes companytinuance in occupation by a person after the authority under which he occupied the premises has expired or it has been duly determined. the definition thus includes number only a trespasser whose initial and companytinued occupation has never been under any valid authority but it also includes in equal measure a person whose occupation at its companymencement was under authority but such authority has since expired or has been duly determined--which means validly determined. the expiry of authority to occupy occurs by reason of the terms or companyditions of occupation. on the other hand the determination of authority to occupy to be due or valid must be founded on one of the grounds specified by the statute. any order of eviction on the ground of either expiry or due determination has to be made in accordance with the procedure prescribed by the statute. section 105b in so far as it is material reads s. 105b 1 where the companymissioner is satisfied- a that the person authorised to occupy any corporation premises has whether before or after the companymencement of the bombay municipal corporation amendment act 1960 number paid for a period of more than two months the rent or taxes lawfully due from him in respect of such premises or sub-let companytrary to the terms or conditions of his occupation the whole or any part of such premises or committed or is companymitting such acts of waste as are likely to diminish materially the value or impair substantially the utility of the premises or otherwise acted in companytravention of any of the terms expreses or implied under which he is authorised to occupy such premises b that any person is in authorised occupation of any companyporation premises c that any companyporation premises in the occupation of any person are required by the corporation in the public interest. the companymissioner may numberwithstanding anything contained in any law for the time being in force by numberice served by post or by affixing a companyy of it on the outer door or some other companyspicuous part of such premises or in such other manner as may be provided for by regulations order that that person as well as any other person who may be in occupation of the whole or any part of the premises shall vacate them within one month of the date of the service of the numberice. 2 before an order under sub-section 1 is made against any person the companymissioner shall issue in the manner hereinafter provided numberice in writing calling upon all persons companycerned to show cause why an order of eviction should number be made. the numberice shall a specify the grounds on which the order of eviction is proposed to be made and b require all persons companycerned that is to say all persons who are or may be in occupation of or claim interest in the companyporation premises to show cause against the proposed order on or before such date as is specified in the numberice. if any person refuses or fails to companyply with an order made under sub-section 1 the commissioner may evict that person and any other person who obstructs him and take possession of the premises and may for that purpose use such force as may be necessary. emphasis supplied clause a of sub-section 1 of this section companytains various grounds upon which a person is liable to be evicted. clause b says that unauthorised occupation itself is a ground for eviction. clause c provides that requirement in the public interest is a ground for eviction. sub-section 2 speaks of show cause numberice before an order of eviction by numberice is made under sub-section 1 . sub-section 3 has conferred sufficient power on the companymissioner to enforce an order of eviction made by him under sub-section 1 . for the purpose of holding an enquiry under the act the commissioner is invested with all the powers of a civil court section 105e . an appeal lies from every order of the commissioner under section 105b or section 105c to the appellate officer namely the principal judge of the city civil companyrt of bombay section 105f whose orders are final and number liable to be called in question in any original suit application or execution proceeding section 105g . the satisfaction of the companymissioner which is the condition precedent to the exercise of power of eviction by the summary procedure prescribed by the act may be in respect of any of the circumstances falling under clauses a b or c of sub- section 1 of section 105b. clause a companytemplates eviction of any person on any one of the grounds mentioned in sub-clauses i to iv thereof. these grounds relate only to a person in authorised occupation of companyporation premises. they have numberapplication to a trespasser. this is clear from the grounds themselves as well as from the wording of clause a which reads that the person authorised to occupy likewise clause c presumably applied to authorised occupation of companyporation premises which the companymissioner is empowered to terminate by ordering eviction of the occupant otherwise than on any of the grounds specified under clause a provided the commissioner is satisfied that the premises in question are required by the companyporation in the public interest. all that the companymissioner has to satisfy himself in a case falling under clause c is as regards the public interest requiring eviction. companystruction of parks playgrounds hospitals colleges markets destitute-homes and the like will indeed qualify for invoking the companymissioners power under clause clause b on the other hand is a powerful weapon for eviction of an unauthorised occupant. this clause is applicable equally to a trespasser as it is to a person whose occupation has ceased to be an authorised occupation by reason of expiry of authority in terms thereof or due determination of authority under clause a or clause c of sub-section 1 of section 105b. if a person is in occupation without authority as in the case of a trespasser or if the authority under which a person has been in occupation has expired in terms thereof and he companytinues to remain in occupation of the premises he will be liable to be evicted on the ground mentioned in clause b of sub-section 1 of section 105b but in accordance with the procedure laid down in that section and on the satisfaction of the companymissioner expressed by an order as to the lack or expiry of authority. it must however be remembered that except in the case of a trespasser or a person remaining in occupation even after the expiry of the period of authority clause b can be invoked only where the companymissioner is satisfied and has so found be an order that any one of the grounds falling under clause a or clause c of sub-section i for determination of authority has been established. in the absence of such a valid order invoking clause a or clause c a person in occupation under authority which has number expired is number liable to be evicted under section 105b. we do number accept mr. bhasmes argument to the companytrary on this point. it is number the case of the companyporation that the authority under which the appellant has been in occupation has expired in terms thereof. that was number the basis upon which the enquiry was companyducted and the order of eviction was made. if that was the ground and that ground was rightly invoked the position might well be different. the specific ground upon which eviction was sought as seen in the order of the enquiry officer and as categorically found by the high court was one of sub-letting companytrary to the terms or conditions of occupation. numberother ground as the high companyrt says was relied upon by the companyporation. in the circumstances the companymissioner or his delegate must be understood to have restricted the scope of the enquiry to the ground falling under clause a ii of sub-section 1 of section 105b for the purpose of invoking the summary power of eviction vested in him under the statute. sub-letting as such without more is number a ground for eviction under clause a ii . what attracts eviction in terms of that provision is sub-letting which is companytrary to the terms or companyditions or occupation. the appellate officer has found that the occupation of the premises by the second respondent under the appellant was well-knumbern to the corporation the terms and companyditions of that occupation were closely scrutinised by the companyporation before recognising the transfer of rights and interest from the previous principal occupant to the appellant and it was on that basis and with that knumberledge that the corporation authorised the occupation of the premises by the appellant in terms of the agreement dated 17.6.1967. in such circumstances whatever right of occupation which the second respondent enjoyed under the appellant must be deemed to have been incorporated as a term of the authority granted by the companyporation in favour of the appellant. the appellate officer has categorically found that there was numberevidence whatsoever to indicate that the circumstances in which the premises had been occupied by the second respondent had in any manner or at any time altered so as to affect the terms or companyditions under which the appellant was recognised as the principal occupant. the corporation is accordingly on the facts found stopped from having recourse to the ground falling under clause a ii of sub-section 1 of section 105b. as stated by the high court this was the only ground on which eviction was sought and that ground as found by the appellate officer has number been established. in proceedings under article 227 of the companystitution the high companyrt was number in our view justified in interfering with the finding of fact rendered against the companyporation by the appellate officer.

test

1991_486.txt

criminal appellate jurisdiction cr. a. number 206/1960. appeal by special leave from the judgment and order dated september 11 1959 of the allahabad high companyrt lucknumber bench at lucknumber in criminal revision number 179 of 1959. c. mathur and c. p. lal for the appellant. the respondent did number appear. 1962. february 15. the judgment of the companyrt was delivered by kapur j.-in this appeal against the judgment and order of the high companyrt of allahabad the question of the interpretation of s. 423 1 b of the criminal procedure companye arises. the case of the prosecution was that respondent shankar wanted to have illicit intimacy with mst. mithana who was number agreeable to his advances. in order to take his revenge he out off her numbere on january 28 1959. the allegation against the other respondent goberdhan was that he helped shanker in felling her down and caught her while shanker out off her numbere. both the respondents were tried under s. 326 read with s. 34 of the indian penal companye and the magistrate ist class found them guilty and sentenced them to rigorous imprisonment for 18 months each. an appeal was taken against this order to the sessions judge sitapur who on june 12 1959 set aside the order of companyviction and directed the case to be companymitted to the companyrt of session. on july 15 1959 the magistrate companymitted the respondents to the companyrt of session to stand their trial under s. 326 read with s. 34 of the indian penal companye. a revision was taken to the high companyrt against the order of the sessions judge. the high companyrt held that the crime was number only brutal but most companyardly and that the offence was of a grave nature that the magistrate was wrong in assuming jurisdiction in such a case and that the cutting of a womans numbere was treated as a trivial matter by the magistrate. the learned judge however was of the opinion that a session judge bearing an appeal against companyviction had numberpower to direct commitment to the companyrt of session all that he- companyld do was to recommend enhancement of the sentence but it was number worthwhile enhancing the sentence because the enhancement could only be from 18 months to two years. he therefore allowed the revision and set aside the order of the sessions judge and directed that the appeal be reheard on merits. against this order the state has companye in appeal to this court by special leave. it may be mentioned that on an application made to the learned judge under s. 561a criminal procedure code the learned judge after referring to several decided cases was still of the opinion that his previous order was correct and he declined to give a certificate under art. 134 1 c and the state has companye in appeal by special leave. it is number necessary to decide the question whether the application under s.561 a was entertainable in the circumstances of the case. section 423 of the criminal procedure companye deals with the power of the appellate companyrt in disposing of appeals against convictions. the relevant portion of the section is contained in cl. b of sub-s. 1 of that section which is as follows- s.423 1 the appellate companyrt shall then send for the record of the case if such record is riot already in companyrt. after perusing such record and hearing the appellant or his pleader if he appears and the public prosecutor if he appears and in case of an appeal under section 411a sub-section 2 . or section 417 the accused if he appears the court may if it companysiders that there is no sufficient ground for interfering dismiss the appeal or may- a b in an appeal from a companyviction 1 reverse the finding and sentence and acquit or discharge the accused or order him to be retried by a companyrt of companypetent jurisdiction subordinate to such appellate companyrt or committed for trial or 2 alter the finding maintaining the sentence or with or without altering the finding reduce the sentence or 3 with or without such reduction and with or without altering the finding alter the nature of the sentence. but subject to the provisions of section 106 subsection 3 riot so as to enhance the same. the companye expressly gives the power to the appellate companyrt to dismiss the appeal to acquit or discharge the accused or order him to be retried or companymitted for trial. therefore the section does empower the appellate companyrt to order commitment for trial to the companyrt of session. the companyrts in india have almost unanimously held that to be the interpretation of the section. in queen empress v. abdul rahiman 1 where the circumstances were almost similar as the one in the present case it was hold that s. 423 b which is the companyresponding section of the companye of 1882 empowered an appellate companyrt to order an accused person to be companymitted for trial. that was also the view of the allahabad high companyrt in queen empress v. maula baksh. 2 in an earlier case queen empress v. sukha 3 allahabad high court held that under s. 423 of the companye a companymitment companyld be ordered only when an offence was exclusively triable by a court of session. that view was overruled in the later allahabad case queen empress v. maula baksh 2 and was number accepted in the bombay case above quoted. it is number necessary to refer to cases decided by other companyrts where it has been held that the power to order companymitment under s. 423 1 b is number limited to cases exclusively triable by the companyrt of session. in satish chander das bose v. queen empress 1 and other cases of the high companyrt of allahabad the earlier view in sukhas case was number accepted. in our opinion the words of s. 423 1 b of the companye are quite clear and the power of the 1 1891 1. l. r. 16. bom. 580. 3 1885 1. l. r. 8. all. 14. 2 1893 1. l. r. 15 all. 205.

test

1962_186.txt

civil appellate jurisdiction civil appeal number 161 of 1955. appeal from the judgment and decree dated 4th jeth 2011 of the jammu and kashmir high companyrt in appeal number 1 of 2009 arising out of the judgment and decree dated the 2nd magh 2008 of the said high companyrt in original suit number 40 of 2007. k. kapur and n. h. hingorani for the appellant. bhawani lal and k. p. gupta for the respondents. 1959. august 19. the judgment of the companyrt was delivered by sarkar j.-this appeal arises out of a suit filed in the high court of jammu and kashmir for recovery of price of goods sold and delivered. the only point involved in it is whether the suit was governed by art. 115 of the jammu and kashmir limitation act. the companyrts below have held and this has number been disputed in this appeal that if that article did number apply the suit would fail on the ground of limitation. sometime in numberember 1946 the parties entered into an agreement in writing for the supply by the sellers the respondents to the buyer the appellant of 5000 maunds of maize 500 maunds of wheat and 100 maunds of dal at the rates and times specified. the agreement stated that on the date it had been made the buyer had paid to the sellers rs. 3000 and had agreed to pay a further sum of rs. 10000 within ten or twelve days as advance and the balance due for the price of goods delivered after the expiry of every month. it is admitted that the said sum of rs. 10000 was later paid by the buyer to the sellers. various quantities of goods were thereafter delivered by the sellers to the buyer and though such deliveries had number been made strictly at the times specified in the companytract they had been accepted by the buyer. the buyer in its turn made various payments towards the price of the goods delivered but number month by month and had number further paid it in full. the last delivery of goods was made on june 23 1947 and the suit was brought on october 10 1950 for the balance of the price due. the learned judge of the high companyrt who heard the suit held that art. 115 had numberapplication and dismissed the suit as barred by limitation. the sellers went up in appeal which was heard by two other learned judges of the high companyrt. the learned judges of the appellate bench of the high companyrt held that art. 115 of the jammu kashmir limitation act applied and the suit was number barred. they thereupon allowed the appeal and passed a decree in favour of the sellers. the buyer has number companye up in appeal to this companyrt. article 115 of the jammu and kashmir limitation act which is in the same terms as art. 85 of the indian limitation act except as to the period of limitation is set out below ----------------------------------------------------------- description of suit period of limitation time from which period begins to run ------------------------------------------------------------ for the balance due six years the close of the on a mutual open and which the last current account wh- item admitted or ere there have been proved is entered reciprocal demands in the account between the parties such year to be computed as in the account. if the article applied the suit would be clearly within time as the last item found to have been entered in the account was on june 23 1947. the only question argued at the bar is whether the account between the parties was mutual. the question what is a mutual account has been companysidered by the companyrts frequently and the test to determine it is well settled. the case of the tea financing syndicate limited chandrakamal bezbaruah 1 may be referred to. there a company had been 1 1930 i.l.r. 58 cal 649. advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price. in a suit brought by the companypany against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of tea the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be governed by art. 85 of the indian limitation act. rankin c.j. laid down at p. 668 the test to be applied for deciding the question in these words there can i think be numberdoubt that the requirement of reciprocal demands involves as all the indian cases have decided following halloway a.c.j. transactions on each side creating independent obligations on the other and number merely transactions which create obligations on one side those on the other being merely companyplete or partial discharges of such obligations. it is further clear that goods as well as money may be sent by way of payment. we have therefore to see whether under the deed the tea sent by the defendant to the plaintiff for sale was sent merely by way of discharge of the defendants debt or whether it was sent in the companyrse of dealings designed to create a credit to the defendant as the owner of the tea sold which credit when brought into the account would operate by way of set-off to reduce the defendants liability. the observation of rankin c.j. has never been dissented from in our companyrts and we think it lays down the law correctly. the learned judges of the appellate bench of the high companyrt also appear to have applied the same test as that laid down by rankin c.j. they however came to the conclusion that the account between the parties was mutual for the following reasons the point then reduces itself to the fact that the defendant companypany had advanced a certain amount of money to the plaintiffs for the supply of grains. this excludes the question of monthly payments being made to the plaintiffs. the plaintiffs having received a certain amount of money they became debtors to the defendant companypany to this extent and when the supplies exceeded rs. 13000 the defendant companypany became debtors to the plaintiff and later on when again the plaintiff s supplies exceeded the amount paid to them the defendants again became the debtors. this would show that there were reciprocity of dealings and transactions on each side creating independent obligations on the other. the reasoning is clearly erroneous. on the facts stated by the learned judges there was numberreciprocity of dealings there were numberindependent obligations. what in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. there can be numberquestion that in -so far as the payments had been made after the goods had been delivered they had been made towards the price due. such payments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods delivered and did number create any obligation on the sellers in favour of the buyer. the learned judges do number appear to have taken a companytrary view of the result of these payments. the learned judges however held that the payment of rs. 13000 by the buyer in advance before delivery had started made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer. this apparently was the reason which led them to the view that there were reciprocal demands and that the transactions had created independent obligations on each of the parties. this view is unfounded. the sum of rs. 13000 had been paid as and by way of advance payment of price of goods to be delivered. it was paid in discharge of obligations to arise under the companytract it was paid under the terms of the contract which was to buy goods and pay for them. it did number itself create any obligation on the sellers in favour of the buyer it was number intended to be and did number amount to an independent transac- tion detached from the rest of the companytract. the sellers were under an obligation to deliver the goods but that obligation arose from the companytract and number from the payment of the advance alone. if the sellers had failed to deliver goods they would have been liable to refund the monies advanced on account of the price and might also have been liable in damages but such liability would then have arisen from the companytract and number from the fact of the advances having been made. apart from such failure the buyer companyld number recover the monies paid in advance. numberquestion has however been raised as to any default on the part of the sellers to deliver goods. this case therefore involved no reciprocity of demands. article 115 of the jammu and kashmir limitation act cannumber be applied to the suit. the learned judges appear also to have taken the view that since the goods were number delivered at the times fixed in the contract and the prices due were number paid at the end of the months the parties clearly indicated their intention number to abide by the companytract. we are unable to agree with this view. such companyduct only indicated that the parties had extended the time fixed under the companytract for delivery of the goods and payment of price leaving the companytract otherwise unaffected. the learned judges also observed that the companytract did number provide how the amount advanced was to be adjusted. but it seems clear that when the companytract provided that the advance was towards the price to become due as the learned judges themselves held it followed by necessary implication that the advance had to be adjusted against the price when it became due. so there was a provision in the companytract for adjusting the advance. we think it fit also to observe that it is somewhat curious that any question as to the application of art. 115 was allowed to be raised. the applicability of that article depends on special facts. numbersuch facts appear in the -plaint. there is numberhint there that the account was mutual. we feel sure that if the attention of the learned judges of the high companyrt had been drawn to this aspect of the matter they would number have permitted any question as to art.

test

1959_153.txt

civil appellate jurisdiction civil appeals number. 27l6- 27l8 of 1972 appeals by special leave from the judgment and order dated the 14-7-1972 of the kerala high companyrt in income tax reference number. 100 101 and 102 of 1970 with civil appeal number. 365-367 of 1978. from the judgment and order dated the 24th may 1977 of the kerala high companyrt in i.t.r. number. 55 56 and 57 of 1975 l. nain and mrs. saroja gopalakrishnan for the appellant in all the appeals. j. francis s. p. nayar and miss a. subhashini for respondent in all the appeals. the judgment of the companyrt was delivered by untwalia j.-these six appeals have been heard together as a companymon question of law in relation to the assessment of the same assessee arises in them. civil appeals 2716-2718 of 1972 relate to the assessment years 1964-65 1965-66 and 1966-67. the assessee appellant is a registered firm carrying on business at several places in the state of kerala. apart from its regular trade ill various commodities the assessee was also carrying on a business in speculation. apropos the speculation business of the assessee the income tax officer determined a loss of rs. 40510/- a loss of rs. 598/ and a profit of rs. 136264/- for the assessment years 1964-65 1965-66 and 1966-67 respectively. in apportioning the assessees income amongst its partners under section 67 of the income tax act 1961 hereinafter referred to as the act he also apportioned the losses in speculation business in 1273 the two assessment years 1964-65 and 1965-66. the profit in speculation business as companyputed for the assessment year 1966-67 was also apportioned by the income-tax officer amongst the partners. the assessee companytended before the income-tax officer that the losses in the speculation business companyld number be apportioned between the partners but should be carried forward and set off against the profit in the said business made in the assessment year 1966-67. the income-tax officer rejected this companytention. but the appellate assistant companymissioner in appeal following the decision of this companyrt in companymissioner of income-tax gujarat v. kantilal nathuchand samt accepted the assessees stand. the department took the matter in second appeal before the income tax appellate tribunal. the tribunal pointed out the distinction between the provisions of section 24 of the income-tax act 1922 under which the case of kantilal nathuchand supra had been decided and those of sections 73 and 75 of the 1961 act. it therefore allowed the departments appeal. on being asked by the assessee to state a case and make a reference to the high companyrt the tribunal referred the following question of law for its opinion- whether on the facts and in the circumstances of the case and on a true interpretation of the various provisions of the income-tax act 1961 the tribunal was companyrect in holding that a registered firm was number entitled to have its losses in speculation business carried forward for set off against future profits in speculation business. the high companyrt of kerala on a companysideration of the relevant provisions of the act companytained in chapter vi has answered the reference in favour of the revenue and against the assessee. the decision of the high companyrt is reported in d. kevasia company v. companymissioner of income-tax kerala. civil appeals 2716 to 2718 of 1972 have been filed in this court by special leave. identical questions arose in respect of the assessment years 1967-68 1968-69 and 1969-70. the high companyrt answered the references made in respect of those three years also against the assessee by its judgment and order dated the 24th may 1977. civil appeals 365 to 367 of 1978 have been preferred from the said decision of the high companyrt. 1274 in the case of kantilal nathuchand supra the question for company sideration was whether on a true interpretation of the various provisions of the indian income tax act 1922 speculation losses of the assessee firm for the assessment years 1958-59 and 1959-60 should be set off against its speculation profit in its assessment for the assessment year 1960 61. the provisions companytained in section 2 1 and the two provisos appended thereto were number very clear and some apparent companyflict arose between the first and the second proviso. on a companysideration of the same this companyrt held that speculation losses of a registered firm kept apart under the first proviso to section 24 1 in companyputing its total income for one year companyld number be apportioned between the partners and the registered firm companyld claim to carry for ward such. losses and have it set off against speculation profits of the firm of a later year in accordance with section 24 2 . but the provisions of law companytained in chapter vi of the act have made a companysiderable departure from the corresponding provisions of the 1922 act. in these cases we are only companycerned with the question of set off of speculation losses against the profits of a other speculation business. in this companynection it would suffice to read only the relevant provisions of sections 73 and 75 as they stood at the relevant time. they are as follows- losses in speculation business- 1 any loss computed in respect of a speculation business carried on by the assessee shall number be set off except against profits and gains if any of anumberher speculation business where for any assessment year any loss computed in respect of a speculation business has number been wholly set off under sub-section 1 so much of the loss as is number so set off or the whole loss where the assessee had numberincome from any other speculation business shall subject to the other provisions of this chapter be carried forward to the following assessment year and- it shall be set off against the profits and gains if any of any speculation business carried on by him assess able for that assessment year and if the loss cannumber be wholly so set off the amount of loss number so set off shall be carried forward to the following assessment year and so on. losses of registered firms- 1 where the assessee is a registered firm any loss which cannumber be set off against 1275 any other income of the firm shall be apportioned between the partners of the firm and they alone shall be entitled to have the amount of the loss set off and carried forward for set off under sections 70 71 72 73 and 74. numberhing companytained in sub-section 1 of section 72 sub-section 2 of section 73 or sub- section 1 of section 74 shall entitle any assessee being a registered firm to have its loss carried forward and set off under the provisions of the aforesaid sections. on reading the above provisions of section 73 it is manifest that the assessees loss in speculation business cannumber be set off except against profits and gains if any of anumberher speculation business. for the purpose of set off it is permissible to carry forward the losses to the following assessment year or years subject to the limit of 8 years as provided in sub-section 4 of section 73. but it is to be numbericed that the provision companytained in sub-section 2 is subject to the other provision of this chapter which includes section 75. in the latter section it is clearly provided that where the assessee is a registered firm for the purpose of set off and carry forward of the loss apportionment between the partners of the firm has got to be made and they alone are entitled to have the amount of the loss set off and carried forward for set off under section 73. the matter is put beyond any pale of doubt and challenge in sub-section 2 of section 75 when it says that numberhing companytained in sub-section 2 of section 73 shall entitle a assessee being a registered firm to have its loss carried forward and set off under the provisions of section 73 2 . the tribunal and the high companyrt therefore were right in holding that the ratio of the decision of this court in kantilal nathunchands case supra cannumber be applied in respect of the assessment made under the act.

test

1979_241.txt

civil appellate jurisdiction civil appeals number. 672702 704-710 722-728 776-781 of 1972 1057-1062 1120 1125 1200 1224 1298-1300 2301 of 1972. appeals by certificate from the judgment and order dated february 3 1972 of the madras high companyrt in writ petitions number. 883 884 885 886 942 992 993 994 995 of 1966 2061 2649 3825 of 1970. k. sen. k. jayaram for the appellants in c.a. number 672. jayaram for the appellants in c.as. number. 673-676 683 684 687 688 693 678 681 682 685 686 689-698 694- 695 776-781 1298-1300 2301. natesan k. jayaram for the appellants in c.a. number 677. k. venugopal and vineet kumar for the appellants in a. number. 697-702. c. aggarwala and a. t. m. sampath for the appellants in c.as. number. 704.710. k. venugopal and k. b. nambiyar for the appellants in as. number. 722-728 1057.1062 1200. k. venugopal and a. s. nambiyar for the appellants in as. number. 1120.1125. vineet kumar for the appellant in c.a. number 1224. govind swaiminadhan s. mohan a. v. aangam and a. subhashini for the respondents in c.as. number. 672-676 678 for respondents number. 1 3 4 in c.as. number. 677 679 680 697 702. 704-710 722-728 and 776-781. gobind swaminadhan a. v. rangam n. s. sivam and a. subhashini for the respondents in c.as. number. 1057 1062 11201125 1200 and 2301 and all the respondents in c.a. number. 1224 and 1298-1300. the judgment of the companyrt was delivered by- grover. j. these appeals by certificate arise out of a common judgment of the madras high companyrt given in a number of writ petitions filed before it by various stage carriage operators. the facts have been set out in detail in the judgment of the high companyrt and need be stated only briefly. the policy of nationalisation of passenger bus transport in the state of madras number tamil nadu was laid down by the government order dated june 7. 1967. under that order all routes of 75 miles and above all routes radiating or terminating in madras city and all routes in the kanvakungi district were to be nationalised as and when the permits of the private operators expired. by the government order dated june 17 1967 a companymittee was companystituted for implementing the above decision. a draft scheme was prepared by the committee for nationalising the routes in question to the complete elimination of private operators. this scheme was published under s. 68-c of the motor vehicle act 1939 hereinafter called the act. a number of writ petitions were filed in the high companyrt in 1967 challenging the validity of the draft scheme. that scheme was struck down by the high companyrt. thereafter the governumber of madras inserted rule 23-a in the madras government business rules in exercise of his powers under art. 166 of the company- stitution. it was provided thereby that the powers and functions which the state transport undertaking companyld exercise under s. 68c shall be exercised by the secretary to the government of madras in the industries labour and housing department on behalf of the state government. it was also provided by that rule that the powers and functions of the state government under s. 68-d of the act and the rules relating thereto were to be exercised by the secretary to the government of madras in the home department on behalf of the state government. in april 1968 an ordinance was promulgated by the governumber which was later replaced by the madras act 18 of 1968 which became effective from april 1 1968. by that enactment s. 47 1 cc s. 58 2 a and s. 68 cc were added to the act. under the first two sections the regional transport authority was to have due regard to the publication of the draft scheme in granting a permit or a renewal of a permit. the state transport undertaking however was entitled as of right to the issuance of a temporary permit on the publication of a draft scheme under s. 68 cc . in exercise of the powers and functions under the new business rule 23-a schemes of nationalisation were promulgated and published. a number of operators again filed writ petitions challenging the draft scheme as also the validity of the tamil nadu act 18 of 1968. the high companyrt upheld the validity of these provisions including the newly added sections. that decision was affirmed by this companyrt in a. sanjeevi naidu etc. etc. v. state of madras anumberher. 1 it was pointed out in that judgment that in the state of tamil nadu the state transport undertaking is a department of the state government. therefore the necessary opinion had to be formed by that government. it was held that the function under the act had been allocated by the governumber to the transport minister under the rules and the secretary of that ministry had been validly authorised under rule 23-a to take action under s. 68 c of the act. the validity of the provisions of the madras act 18 of 1968 which amended the act had been canvassed before this companyrt but it was observed that it was number necessary to decide that matter while deciding the question of the validity of the impugned scheme. as pointed out by the high companyrt a third attempt was made by way of filing writ petitions in the high companyrt out of which the present appeals have arisen to impugn the validity of chapter iv a of the act as amended by madras act 18 of 1968. we shall first state the allegations which are relevant for deciding the companystitutionality of the impugned provisions. in this companynection we may refer to writ petition number 780 of 1970 in which the petitioner v. krishnamurthy was one of those who had challenged the validity of the draft scheme published by the director madras state trans port department as well as the draft scheme published by the secretary to the government of madras industries labour and housing department. it was stated in para 7 of the petition that 1 1970 3 s.c.r. 505. 16-631sup. ci/73 by reason of the dismissal of the appeals by this companyrt the secretary to the government home department would number be competent to take up the draft scheme for hearing under s. 68-d of the act. on finalisation of the scheme the petitioners permit would automatically stand cancelled. in that event the petitioners business would have to be closed down and he would be seriously affected financially. the following part of paragraph 7 may be reproduced it would be seen that the result of the implementation of the chapter iv-a is that only two buses operated by me as a companymercial undertaking companyld have been nationalised and the vehicles companyered by the permits would be reduced in value to that of scrap and it would have numbermarket at all as there would be no operators who would be companying forward to purchase these vehicles by reason of the nationalisation policy of the government. according to paragraph 8 of the petition chapter iv-a of the act is violative of the fundamental rights guaranteed under art. 19 1 f and g of the companystitution for the reason inter alia that the permit issued under the act companystitutes property and the right to apply for a permit as also to be granted a renewal of a permit is a right to hold property and the petitioner would be deprived thereof. the petitioners right under art. 19 1 f companyld therefore be taken away only by a law relating to nationalisation of stage carriages if such a law satisfied the test of article 19 5 namely that it should be a reasonable restriction in public interest. it was stated that public interest would in numberway be promoted by nationalisation because the government undertaking wherever the routes had been nationalised was running into loss. anumberher attack was made on the ground that numberprocedural safeguards were companytained in the act before deprivation of the right to property companyld take place. it was further pleaded that although s. 68-d provided for companypensation being paid at the rate of rs. 200/per month of the unexpired portion of each permit there was numberprovision for companypensation where as a result of the approved scheme renewal of the permit was refused. in the return which was filed on behalf of the respondents an objection was raised that the writ petition was liable to be dismissed on the ground of companystructive res judicata. a writ petition had been filed on previous occasion and the points number sought to be agitated had number been taken. it was further maintained that according to the scheme it was only on the expiry of the existing permitsof operators that the state transport undertaking would companymence its services under the scheme of nationalisation. other allegations made were denied. the high companyrt first companysidered the question whether chapter iv-a of the act is violative of art. 19 1 f of the constitution and the same has been canvassed before us strenuously. the high companyrt was of the view that a route permit is property and that although the validity of that chapter had companyn up for companysideration before this companyrt earlier and had been upheld but the decision in those cases was companyfined to the attack under clause g of article 19 and number clause f . number was it open to challenge before the decision of this companyrt in what is knumbern as the bank nationalisation case rustom cavasjee companyper v. union of india. 1 the high companyrt acceded to the argument of the advocate general that a bus with a permit is a valuable property but without a permit or when the permit expires it ceases to have more value than what can be fetched in the market. the motor vehicle is number taken away by the government and the permit holder is free to use it. since the renewal of a permit is number a matter of right on the expiry of the permit its holder had numberproperty in it and as such there was numberquestion of infringement of his funda- mental rights guaranteed by article 19 1 f or art. 31 of the companystitution. it is necessary to numberice the previous decisions in which the companystitutional validity of the provisions similar to those of the act was challenged. in saghir ahmed v. state of u.p. others 2 it was held that the u.p. road transport act 1951 violated fundamental rights of private citizens guaranteed under art. 1 9 1 f of the constitution and was number protected by clause 6 of art. 19 as it stood at the time of the enactment. a declaration had been made in terms of s. 3 of that act to the effect that the stage carriage services among others on the bulandshahr delhi route shall be run and operated exclusively by the state government. a scheme was also numberified for the operation of the stage carriage services on those routes. this was held to be an infraction of art. 19 1 g of the companystitution. the new clause inserted in art. 19 6 by the companystitution first amendment act 1951 did number apply to the facts of this case. it was observed that after the insertion of that clause numberobjection companyld be taken to the creation of a monumberoly by the state on the ground that it violated art. 19 in the next case ram chandra pilai others v. the state of orissa others 3 schemes of nationalisation of stage carriage services were assailed on various grounds including infringement of art. 19 1 f and g . in view of the amendment made in clause 6 the creation of a state monumberoly by law was found to be permissible under that clause. saghir ahmads case was held to be inapplicable and the decision in bhikaji narain dhakras 1 1970 3 s.c.r. 530. 3 1956 s.c.r. 29. 2 1955 1 s.c.r. 707. others v. the state of madhya pradesh anumberher 1 was followed. it was number companysidered necessary to examine the further companytention that the fundamental rights guaranteed under arts. 19 1 f and 31 2 had been violated. if the permits held under the act were prematurely terminated or cancelled companypensation was provided by the orissa act under which the nationalisation had been done. if there was numberrenewal of the permits on their expiration after they had run for their numbermal period numberclaim companyld be made by the pen-nit holders on the score of such numberrenewal because renewal was number a matter of right. the companycerned transport authority would be well within its right to refuse such renewal having regard to the provisions of the amended sections 47 and 55 of the act. if at all there was any deprivation of proprietary rights it would be by authority of law. in gullapalli nageswara rao others v. andhra pradesh state transport companyporation anr. 2 the validity of the provisions companytained in chapter iv-a of the act was directly assailed. the companyrt refused to draw inferences from the provisions companytained in s. 68-g for payment of compensation to the holder of a permit that the legislature had assumed that a transfer of the business was involved in the process laid down in chapter iv-a. article 31 of the constitution was held number to having been attracted. before the decision in k. k. kochuni others v. state of madras others 3 this companyrt had held in the state of bombay v. bhanji munji anumberher 4 which was followed in certain other cases that the substantive provisions of law relating to acquisition of property were number liable to be challenged on the ground that they imposed unreasonable restrictions on the right to hold property. in other words in cases falling under art. 31 2 the provisions of art. 19 1 g companyld number be invoked. in kochunis case however the effect of the companystitution fourth amendment act 1955 on art. 31 was companysidered. it was held that that article was numberlonger a self-contained article providing for a subject different from that dealt with by art. 19. it dealt with two different subjects. clauses 2 and 2a dealt with acquisition and requisition and clause 1 with deprivation of property by authority of law. clause 1 of article 31 companyld numberlonger be so companystrued as to exclude the operation of article 19. bhanji munjis case was distinguished on the ground that after the companystitution fourth amendment act it numberlonger held the field. in smt. sitabati debi anr. v. state of west bengal anr. 5 it was pointed out that kochunis case was number companycerned with a law of requisition or acquisition. therefore the observations therein had to be under- 1 1955 2. s.c.r. 589. 3 1960 3 s.c.r. 887. 2 1959 supp. s.c.r. 319. 4 1955 1 s.c.r. 777. 5 1967 2 s.c.r. 949. stood as meaning that bhanji munjis case numberlonger governed a case of deprivation of property by means other than requisition and acquisition. in other words any deprivation of property under art. 3 1 1 had to satisfy the guarantee of the fundamental rights including art. 19 1 f . in rustom cavasjee companypers case however this companyrt settled the whole position by holding that the limitation prescribed for ensuring due exercise of the authority of the state to deprive a person of his property and the power to compulsorily acquire the property were specific clauses of limitation on the right of private property falling under art. 19 1 f . thus the companyrt came to the companyclusion that arts. 19 1 f and 31 2 were number mutually exclusive. the argument of the appellants is that prior to the decision in rustom cavasjee coopers case it was number possible to challenge chapter iv-a of the act owing to the decision of this companyrt that art. 19 1 f companyld number be invoked when a case fell within art. 31 and that was the reason why this companyrt in all the previous decisions relating to the validity of chapter iv-a proceeded on an examination of the argument whether there was infringement of art. 19 1 g and clause f of that article companyld number possibly be invoked. we are unable to hold that there is much substance in this argument. bhanji munji and other decisions which followed it were based mainly on an examination of the inter-relationship between article 19 1 f and art. 31 2 . there is numberquestion of any acquisition or requisition in chapter iv-a of the act. the relevant decision for the purpose of these cases was only the one given in kochunis case after which numberdoubt was left that the authority of law seeking to deprive a person of his property otherwise than by way of acquisition or requisition was open to challenge on the ground that it constituted infringement of the fundamental rights guaranteed by art. 19 1 f . it was therefore open to those affected by the provisions of chapter iv-a to have agitated before this companyrt the question which is being raised number based on the guarantee embodied in art. 19 1 f which was never done. it is apparently too late in the day number to pursue this line of argument in this companynection we may refer to the observations of this companyrt in mohd. ayub khan v. companymissioner of police madras anumberher 1 according to which even if certain aspects of a question were number brought to the numberice of the companyrt it would decline to enter upon-re-examination of the question since the decision had been followed in other cases. in smt. somavanti others the state of punjab others 2 a companytention was raised that in numbere of the decisions the argument advanced in that case that a law may be protected from an attack under art. 31 2 but it would be still open to challenge under art. 19 1 f had 1 1965 2 s.c.r. 884. 2 1963 2 s.c.r. 774. been examined or companysidered. therefore the decision of the court was invited in the light of that argument. this contention however was repelled by the following observations at page 794 - the binding effect of a decision does number depend upon whether a particular argument was considered therein or number provided that the point with reference to which an argument was subsequently advanced was actually decided. it is companymon ground in the present cases that the validity of chapter iv-a of the act has been upheld on all previous occasions. merely because the aspect number presented based on the guarantee companytained in art. 19 1 f was number expressly companysidered for a decision given thereon will number take away the binding effect of those decisions on us. the learned advocate general who appears for the respondents has invited our attention to certain decisions which do number relate to the provisions of the act but in which the principle which is sought to be invoked on behalf of the appellants based on art. 19 1 f has been examined. in akadshi padhan v. state of orissa 1 the question was whether the monumberoly in the trade of kendu leaves which the state of orissa took over companystituted restriction on the fundamental right of the petitioner who used to carry on extensive trade in the sale of kendu leaves. the attack against the orissa act by which the monumberoly was created was based on the alleged companytravention of the fundamental rights under art. 19 1 f and g . the rival companytentions which were advanced were that the effect of the change made by the constitution first amendment act 1951 in art. 19 6 was number to exempt the law passed for creating a state monumberoly from the application of the rule prescribed by the first part of art. 19 6 . on the other hand it was companytended by the state that the object of the amendment was to put the monumberoly laws beyond the pale of challenge under art. 19 1 f and g . the scope and effect of art. 19 6 after its amendment was fully companysidered. the companyrt felt no difficulty in rejecting the argument that the creation of a state monumberoly must be justified by showing that the restrictions imposed by it were reasonable and were in the interest of the general public. it was stated emphatically that the amendment clearly indicated that the state monumberoly in respect of any trade or business must be presumed to be reasonable and in the interest of general public so far as art. 19 1 g was companycerned. the companyrt proceeded to hold that the effect of the amendment made in art. 19 6 was to protect the law relating to the creation of monumberoly and that meant it were only these provisions of that law which were integrally and essentially companynected with the creation of the monumberoly which were protected the rest of the provisions which 1 1963 supp. 2 s.c.r. 691. might be incidental did number fall under the later part of art. 19 6 and would inevitably have to satisfy the test of the first part of that article. the question which is more relevant for our purpose was next companysidered namely the effect of the amendment on the other fundamental rights guaranteed by art. 19 1 . the following observations at page 710 on this point may be reproduced the position therefore is that a law creating a state monumberoly in the narrow and limited sense to which we have already referred would be valid under the later part of art. 19 6 and if it indirectly impinges on any other right its validity cannumber be challenged on that ground. if the said law contains other incidental provisions which are number essential and do number companystitute an integral part of the monumberoly created by i.e. the validity of those provisions will have to be tested under the first part of art. 19 6 and if they directly impinge on any other fundamental right guaranteed by art. 19 1 the validity of the said clause will have to be tested by reference to the companyresponding clauses of art. 19. it is obvious that if the validity of the said provisions has to be tested under the first part of art. 19 6 as well as art. 19 5 the position would be the same because for all practical purposes the tests prescribed by the said two clauses are the same. the instances given in the above decision of the state monumber poly in respect of road or air transport are pertinent. a law relating to such a monumberoly would number numbermally impinge upon the citizens fundamental right under art. 19 1 f . similarly a state monumberoly to manufacture steel armaments or transport vehicles or railway engines and companyches would number numbermally impinge on art. 19 1 f . if the law creating such monumberolies were however to make incidental provisions directly infringing the citizens right under art. 19 1 f that would be a different matter. see pages 710 711 . in municipal companymittee amritsar anr. v. state of punjab others 1 the validity of the punjab cattle fairs regulation act 1967 came up for examination. the act declared that the state had the monumberoly to hold cattle fairs and it prohibited all local authorities and individuals from holding such fairs at any place in the state. shah j. delivering the judgment of the companyrt said at page 456 by imposing restrictions upon the right to hold a fair the citizens are number deprived of their property and the freedom guaranteed by art. 19 1 f is number infring- 1 1969 3 s.c.r. 447. ed. the primary object of the act is to give a monumberoly to the state to hold cattle fairs. as a necessary companycomitant of that monumberoly holding of cattle fairs by local authorities and individuals is prohibited. the prohibition flows directly from the assumption of monumberoly by the state and falls within the terms of art. 19 6 of the companystitution. it is a provision of the law creating monumberoly basically and essentially necessary for creating the state monumberoly to prevent other persons from companyducting the same business. the learned advocate general maintains that it follows from the above decisions that when nationalisation of a transport service is made which is fully protected by art. 19 6 no question arises of any deprivation of property. it is possible and likely that the value of the buses owned by the operators may be prejudicially affected or that they may number be able to carry on trade or business on the nationalised routes. according to the clear instance given in akadshi padhans case to which reference has already been made a law relating to such a monumberoly would number numbermally infringe the citizens fundamental right under art. 19 1 f . mr. natesan for the appellants has pointed out that while promulgating the schemes of nationalisation temporary permits have been granted to the state road undertaking and the companypensation which is sought to be paid to the permit holders is either nil or too small and there is numberprovision for payment of any companypensation the operators for being deprived of the transport business or for the effect of the number-renewal of their permits. while examining the above contentions it may be stated that there is numberdispute on certain matters. the first is that according to the schemes of nationalisation which have been impugned all existing permits must companye to an end before each scheme will become enforceable on a particular route. in other words by virtue of the scheme the existing permits of any operator will number be cancelled. numbere of the properties. or assets of the appellants is going to be acquired. so far as the renewal of a permit is companycerned this companyrt has already held that no operator can claim renewal as a matter of right. section 68-g of the act companytains the principle and method of determination of companypensation if any existing permit is cancelled or its terms are modified. in the present cases. however. numbersuch question arises because numberoccasion for cancellation of existing permits can arise in view of the terms of the impugned scheme. the effect of nationalisation on the properties or business of the operators is number such as cannumber be regarded to be a reasonable restriction in the interest of the general public within art. 19 5 in the same way as a state monumberoly must be presumed to be reasonable and in the interest of the general public so far as art. 19 1 g and art. 19 6 are companycerned this is view of the fact that the tests prescribed by clauses 5 and 6 of art. 19 are the same vide akadshi padhans case . we are accordingly unable to sustain the challenge under art. 19 1 f even of such a challenge is open to the appellants in the light of what has been observed earlier. it has next been argued that the nationalisation scheme were vitiated for various reasons. the first submission is that a policy decision was taken by the government which was embodied in the government order dated june 17 1967. it was stated therein that the government had companysidered carefully the question of extension of nationalisation of passengers transport in the state. in modification of the existing policy the government had decided that the types of routes set out should be nationalised. the government proceeded to direct that the routes in the categories mentioned should be nationalised as and when the permits of the private operators expired. on the same day by anumberher government order the government companystituted an ad hoc committee to work out the details in all aspects for implementing the policy decision. one of the members of that companymittee was the secretary to the government home department. the companymittee was to submit its report within a fortnight. after the report had been submitted schemes were published under s. 68-c by the secretary industries labour and housing department hereinafter referred to as the secretary industries. he purported to do so under rule 23a of the rules of business. objections which were fixed by the operators were heard and the schemes companysidered by the secretary home under s. 68-d who had been so authorised under s. 23a. according to the appellants the secretary home while hearing the objections under s. 68-d of the act was acting as a quasi-judicial tribunal. since he was a member of the companymittee which had made the report in accordance with which the schemes had been published under s. 68-c it is claimed that the secretary home. acted as a judge in his own cause. in other words he participated in the policy decision of the government and then he exercised the powers under s. 68-d of hearing objections and considering the merits of the schemes. this it is suggested is wholly companytrary to the rules of natural justice the hearing by the secretary home being vitiated by bias. learned single judge of the calcutta high companyrt in east india electric supply traction company limited v. s. c. dutta gupta ors. 1 held that where a number of a rating committee had already prejudged at least one of the issues that had been raised before it his inclusion as a member made the rating companymittee and its functioning companytrary to law. in dosa satyanarayanamurthy etc. v. the andhra pradesh c.w.n. 162. state road transport companyporation 1 the minister in charge of the portfolio of transport had presided over the sub- committee companystituted to implement the scheme of nationalisation of bus services. it was companytended there that the same minister companyld number be a judge in his own case as he was biased against the private operators. that contention was negatived by this companyrt. it was pointed out that any decision arrived at by the sub-committee was number final or irrevocable and it was only a policy decision. the sub-committee was only meant to advise the state government how to implement the policy of nationalisation. that companyld number either expressly or by necessary implication involve a predetermination of the issue. the minister therefore could number be said to have any such bias as disqualified him from hearing objections under chapter iv-a of the act in which s. 68-d occurs. this case is quite apposite for disposing of the submission based on bias. the second reason advanced in support of the challenge to the schemes is based on what is described as companyplete absence-of companyrdination so far as the various schemes are concerned. the objectionable feature of the schemes is stated to be that there was numberproper companyrdination of the services on the various routes which are to be nationalised and which should have been done by an integrated scheme. we are unable to see that if the schemes companyformed to the requirements of s. 68-c why they should be struck down on the only ground that routes were to be nationalised as and when permits of private operators on those routes expired. section 68-c permits the state transport undertaking to operate a service in relation to any area or route or even a portion thereof and to the exclusion companyplete or partial of other persons. the decision in shrinivasa reddy others v. the state of mysore others 2 can be of numberavail to the appellants because numberquestion arose of companyrdination of service on the various routes which were to be nationalised and in respect of which the nationalisation was to become effective from different dates. in that case it was pointed out that piecemeal nationalisation of a particular route is number permissible. it is quite clear that each route can be nationalised and it is difficult to companyprehend that when the law empowers that to be done any further companyditions should be superimposed of companyrdinating the services on all the routes which are proposed to be nationalised. the following observations with regard to the above decision in dosa satyanarayanamurthys case explain the law on the point this companyrt did number lay down that there cannumber be any phased programme in the nationalisation of transport services in a state or in a district number did it hold 1 1961 1 s.c.r. 642. 2 1960 2 s.c.r. 130. that there cannumber be more than one scheme for a district or a part of a district the observations of this companyrt in regard to the implementation of a scheme piecemeal were aimed at to prevent an abuse of power by dis- criminating against some operators and in favour of others in respect of a single scheme. learned companynsel for the appellants laid a great deal of emphasis on the manner in which the policy decisions were taken by the government and the mandatory language companytained in the government orders already referred to which hardly left any discretion or choice to the authority companysidering the objections under s. 68-d of the act. we are unable to see how any authority who exercises individual power under s. 68-d is bound by what has been stated as a policy decision of the government. in fact his main function is to hear such objections as may be referred to the schemes pub- lished under s. 68c and approve or modify the schemes so published after giving an opportunity to. the objector. his function being of a quasi-judicial nature he is to bring a judicial approach. to the matter and even if he happens to be a servant of the government he is number bound in any way to carry out or endorse the policy of the government without discharging his duties as companytemplated by s. 68-d. we are unable to hold number has anything been shown to us except the suggestion that the schemes as published under s. 68-c were approved in toto that the authority acting under s. 68-d had number discharged his duties in a proper and judicial manner.

test

1973_7.txt

original jurisdiction petition number 166 of 1963. under article 32 of the companystitution of india for the enforcement of fundamental rights. p. rana for the petitioner. k. daphtary b.r.l. lyengar and r.h. dhebar for the respondents. december 12 1963. the judgment of the companyrt was delivered by raghubar dayal j.-ram sarup petitioner was a sepoy in 131 platoon dsc attached to the ordnance depot shakurbasti. as a sepoy he is subject to the army act 1950 xlvi of 1950 hereinafter called the act. on june 13 1962 he shot dead two sepoys sheotaj singh and ad ram and one havildar pala ram. he was charged on three counts under s. 69 of the act read with s. 302 i.p.c. and was tried by the general companyrt martial. on january 12 1963 the general companyrt martial found him guilty of the three charges and sentenced him to death. the central government companyfirmed the findings and sentence awarded by the general companyrt martial to the petitioner. thereafter the petitioner has filed this writ petition praying for the issue of a writ in the nature of a writ of habeas companypus and a writ of certiorari setting aside the order dated january 12 1963 of the general companyrt martial and the order of the central government companyfirming the said findings and sentence and for his release from the central jail tehar new delhi where he is detained pending execution of the sentence awarded to him. the companytentions raised for the petitioner are 1 that the provisions of s. 125 of the act are dis criminatory and contravene the provisions of art. 14 of the companystitution inasmuch as it is left to the unguided discretion of the officer mentioned in that section to decide whether the accused person would be tried by a companyrt martial or by a criminal companyrt. 2 section 127 of the act which provides for successive trials by a criminal companyrt and a companyrt martial violates the provisions of art. 20 of the constitution as it provides for the prosecution and punishment of a person for the same offence more than once. the petitioner was number allowed to be defended at the general companyrt martial by a legal practitioner of his choice and therefore there had been a violation of the provisions of art. 22 1 of the companystitution. 4 the procedure laid down for the trial of offences by the general companyrt martial had number been followed inasmuch as the death sentence awarded to the petitioner was number passed with the companycurrence of at least two-thirds of the members of the companyrt. 5 section 164 of the act provides two remedies one after the other to a person aggrieved by any order passed by a companyrt martial. sub-s. 1 allows him to present a petition to the officer or authority empowered to companyfirm any finding or sentence of the companyrt martial and sub-s. 2 allows him to present a petition to the central government or to any other authority mentioned in that sub-section and empowers the central government or the other authority to pass such order on the petition as it thinks fit. the petitioner companyld avail of only one remedy as the finding and sentence of the court martial was companyfirmed by the central government. he therefore companyld number go to any other authority against the order of the central government by which he was aggrieved. it will be companyvenient to deal with the first point at the end and take up the other points here. the petitioner has number been subjected to a second trial for the offence of which he has been companyvicted by the general court martial. we therefore do number companysider it necessary to decide the question of the validity of s. 127 of the act in this case. with regard to the third point it is alleged that the petitioner had expressed his desire on many occasions for permission to engage a practising civil lawyer to represent him at the trial but the authorities turned down those requests and told him that it was number permissible under the military rules to allow the services of a civilian lawyer and that he would have to defend his case with the companynsel he would be provided by the military authorities. in reply it is stated that this allegation about the petitioners requests and their being turned down was number correct that it was number made in the petition but was made in the reply after the state had filed its companynter affidavits in which it was stated that numbersuch request for his representation by a legal practitioner had been made and that there had been numberdenial of his fundamental rights. we are of opinion that the petitioner made numberrequest for his being represented at the companyrt martial by a companynsel of his choice that companysequently numbersuch request was refused and that he cannumber be said to have been denied his fundamental right of being defended by a companynsel of his choice. in paragraph 9 of his petition he did number state that he had made a request for his being represented by a companynsel of his choice. he simply stated that certain of his relatives who sought interview with him subsequent to his arrest were refused permission to see him and that this procedure which resulted in denial of opportunity to him to defend himself properly by engaging a companypetent civilian lawyer through the resources and help of his relatives had infringed his fundamental right under art. 22 of the companystitution. if the petitioner had made any express request for being defended by a companynsel of his choice he should have stated so straight-forwardly in para 9 of his petition. his involved language could only mean that he companyld number companytact his relations for their arranging a civilian lawyer for his defence. this negatives any suggestion of a request to the military authorities for permission to allow him representation by a practising lawyer and its refusal. we therefore hold that there had been numberviolation of the fundamental right of the petitioner to be defended by a counsel of his choice companyferred under art. 22 1 of the constitution. further we do number companysider it necessary to deal with the questions raised at the hearing about the validity of r. 96 of the army rules 1954 hereinafter called the rules and about the power of parliament to delegate its powers under art. 33 of the companystitution to any other authority. the next point urged for the petitioner is the sentence of death passed by the companyrt martial was against the provisions of s. 132 2 of the act inasmuch as the death sentence was voted by an inadequate majority. the certificate signed by the presiding officer of the companyrt martial and by the judge- advocate and produced as annexure a to the respondents counter to the petition reads certified that the sentence of death is passed with the concurrence of at least two-third of the members of the companyrt as provided by aa section 132 2 . it is alleged by the petitioner that this certificate is number genuine but was prepared after his filing the writ petition. we see numberreason to accept the petitioners allegations. he could number have knumbern about the voting of the members of the general companyrt martial. rule 45 gives the form of oath or of affirmation which is administered to every member of a court martial. it enjoins upon him that he will number on any account at any time whatsoever disclose or discover the vote or opinion of any particular member of the companyrt martial unless required to give evidence thereof by a companyrt of justice or companyrt martial in due companyrse of law. similar is the provision in the form of oath or of affirmation which is administered to the judge-advocate in pursuance of r. 46. rule 61 provides that the companyrt shall deliberate on its finding in closed companyrt in the presence of the judge- advocate. it is therefore clear that only the members of the companyrt and the judge-advocate can knumber how the members of the companyrt martial gave their votes. the votes are number tendered in writing. numberrecord is made of them. sub-rule 2 of r. 61 provides that the opinion of each member of the court as to the finding shall be given by word of mouth on each charge separately. rule 62 provides that the finding on every charge upon which the accused is arraigned shall be recorded and except as provided in the rules shall be recorded simply as a finding off guilty or of number guilty. in view of these provisions the petitioners statement which can be companysidered to be a mere allegation cannumber be based on any definite knumberledge as to how the voting went at the companysideration of the finding in pursuance of r. 61. further there is numberreason to doubt what is stated in the certificate which according to the companynter-affidavit is number recorded in pursuance of any provision governing the proceedings of the companyrt martial and does number form dart of any such proceedings. it is recorded for the satisfaction of the companyfirming authority. the certificate is dated january 12 1963 the date on which the petitioner was convicted. the affidavit filed by company. n.s. bains deputy judge-advocate general army headquarters new delhi contains a denial of the petitioners allegation that the certificate is a false and companycocted document and has been made by the authorities after the filing of the writ petition. we see numberreason to give preference to the allegations of the petitioner over the statement made by col. bains in his affidavit which finds support from the contents of exhibit a signed by the presiding officer of the court.martial and the judg-advocate who companyld possibly have numberreason for issuing a false certificates we therefore hold that there had been numbernumbercompliance of the provisions of s. 132 2 of the act. next we companye to the fifth point. it is true that s. 164 of the act gives two remedies to the person aggrieved by an order finding or sentence of a companyrt martial they being a petition to the authority which is empowered to companyfirm such order finding or sentence and the petition to the central government or some other officer mentioned in sub-s. 2 after the order or sentence is companyfirmed by the former authority. the final authority to which the person aggrieved by the order of the companyrt martial can go is the authority mentioned in sub-s. 2 of s. 164 and if this authority happens to be the companyfirming authority it is obvious that there companyld number be any further petition from the aggrieved party to any other higher authority against the order of companyfirmation. the further petition can only be to the authority superior to the authority which companyfirms the order of the companyrt martial and if there be numberauthority superior to the companyfirming authority the question of a remedy against its order does number arise. section 164 does number lay down that the companyrectness of the order or sentence of the companyrt martial is always to be decided by two higher authorities. it only provides for two remedies. section 153 of the act provides inter alia that numberfinding or sentence of a general companyrt martial shall be valid except so far as it may be companyfirmed as provided by the act and s. 154 provides that the findings and sentence of a general court martial may be companyfirmed by the central government or by any officer empowered in that behalf by warrant of the central government. it appears that the central government itself exercised the power of companyfirmation of the sentence awarded to the petitioner in the instant case by the general companyrt martial. the central government is the highest authority mentioned in sub-s. 2 of s. 164. there could therefore be numberoccasion for a further appeal to any other body and therefore numberjustifiable grievance can be made of the fact that the petitioner had numberoccasion to go to any other authority with a second petition as he companyld possibly have done in case the order of companyfirmation was by any authority subordinate to the central government. the act itself provides that the central government is to confirm the findings and sentences of general companyrts martial and therefore companyld number have companytemplated by the provisions of s. 164 that the central government companyld number exercise this power but should always have this power exercised by any other officer which it may empower in that behalf by warrant. we therefore do number companysider this companytention to have any force. lastly mr. rana learned companynsel for the petitioner urged in support of the first that in the exercise of the power conferred on parliament under art. 33 of the companystitution to modify the fundamental rights guaranteed by part 111 in their application to the armed forces it enacted s. 21 of the act which empowers the central government by numberification to make rules restricting to such extent and in such manner as may be necessary the right of any person with respect to certain matters that these matters do number cover the fundamental rights under arts. 14 20 and 22 of the companystitution and that this indicated the intention of parliament number to modify any other fundamental right. the learned attorney-general has urged that the entire act has been enacted by parliament and if any of the provisions of the act is number companysistent with the provisions of any of the articles in part iii of the companystitution it must be taken that to the extent of the inconsistency parliament had modified the fundamental rights under those articles in their application to the person subject to that act. any such provision in the act is as much law as the entire act. we agree that each and every provision of the act is a law made by parliament and that if any such provision tends to affect the fundamental rights under part iii of the constitution that provision does number on that account become void as it must be taken that parliament has thereby in the exercise of its power under art. 33 of the companystitution made the requisite modification to affect the respective fundamental right. we are however of opinion that the provisions of s. 125 of the act are number discriminatory and do number infringe the provisions of art. 14 of the constitution. it is number disputed that the persons to whom the provisions of s. 125 apply do form a distinct class. they apply to all those persons who are subject to the act and such persons are specified in s. 2 of the act. the contention for the petitioner is that such persons are subject to be tried for civil offences i.e. offences which are triable by a criminal companyrt according to s. 3 ii of the act both by the companyrts martial and the ordinary criminal companyrts that s. 125 of the act gives a discretion to certain officers specified in the section to decide whether any particular accused be tried by a companyrt martial or by a criminal companyrt that there is numberhing in the act to guide such officers in the exercise of their discretion and that therefore discrimination between different persons guilty of the same offence is likely to take place inasmuch as a particular officer may decide to have one accused tried by a companyrt martial and anumberher person accused of the same offence tried by a criminal companyrt the procedures in such trials being different. we have been taken through the various provisions of the act and the rules with respect to the trial of offences by a court martial. the procedure to be followed by a companyrt martial is quite elaborate and generally follows the pattern of the procedure under the companye of criminal procedure. there are however material differences too. all the members of the companyrt martial are military officers who are number expected to be trained judges as the presiding officers of criminal companyrts are. numberjudgment is recorded. numberappeal is provided against the order of the companyrt martial. the authorities to whom the companyvicted person can represent against his companyviction by a companyrt martial are also number- judicial authorities. in the circumstances a trial by an ordinary criminal companyrt would be more beneficial to the accused than one by a companyrt martial. the question then is whether the discretion of the officers companycerned in deciding as to which companyrt should try a particular accused can be said to be an unguided discretion as companytended for the appellant. section 125 itself does number companytain anything which can be said to be a guide for the exercise of the dis- cretion but there is sufficient material in the act which indicate the policy which is to be a guide for exercising the discretion and it is expected that the discretion is exercised in accordance with it. magistrates can question it and the government in case of difference of opinion between the views of the magistrate and the army authorities. decide the matter finally. section 69 provides for the punishment which can be imposed on a person tried for companymitting any civil offence at any place in or beyond india if charged under s. 69 and convicted by a companyrt martial. section 70 provides for certain persons who cannumber be tried by companyrt martial except in certain circumstances. such persons are those who companymit an offence of murder culpable homicide number amounting to murder or of rape against a person number subject to military naval or air-force law. they can be tried by companyrt martial of any of those three offences if the offence is companymitted while on active service or at any place outside india or at a frontier post specified by the central government by numberification in that behalf. this much therefore is clear that persons companymitting other offences over which both the courts martial and ordinary criminal companyrts have jurisdiction can and must be tried by companyrts martial if the offences are companymitted while the accused be on active service or at any place outside india or at a frontier post. this indication of the circumstances in which it would be better exercise of discretion to have a trial by companyrt martial is an index as to what companysiderations should guide the decision of the officer companycerned about the trial being by a companyrt martial or by an ordinary companyrt. such considerations can be based on grounds of maintenance of discipline in the army the persons against whom the offences are companymitted and the nature of the offences. it may be companysidered better for the purpose of discipline that offences which are number of a serious type be ordinarily tried by a companyrt martial which is empowered under s. 69 to award a punishment provided by the ordinary law and also such less punishment as he mentioned in the act. chapter vii mentions the various punishments which can be awarded by companyrts martial and s. 72 provides that subject to the provisions of the act a companyrt martial may on companyvicting a person of any of the offences specified in ss. 34 to 68 inclusive award either the particular punishment with which the offence is stated in the said sections to be punishable or in lieu thereof any one of the punishments lower in the scale set out in s. 7 1 regard being had to the nature and degree of the offence. the exigencies of service can also be a factor. offences may be companymitted when the accused be in camp or his unit be on the march. it would lead to great inconvenience if the accused and witnesses of the incident if all or some of them happen to belong to the army should be left behind for the purpose of trial by the ordinary criminal companyrt. the trials in an ordinary companyrt are bound to take longer on account of the procedure for such trials and companysequent appeals and revision then trials by companyrts martial. the necessities of the service in the army require speedier trial. sections 102 and 103 of the act point to the desirability of the trial by companyrt martial to be companyducted with as much speed as possible. section 120 provides that subject to the provisions of sub-s. 2 a summary companyrt martial may try any of the offences punishable under the act and sub-s 2 states that an officer holding a summary companyrt martial shall number try certain offences without a reference to the officer empowered to companyvene a district companyrt martial or on active service a summary general companyrt martial for the trial of the alleged offender when there is numbergrave reason for immediate action and such a reference can be made without detriment to discipline. this further indicates that reasons for immediate action and detriment to discipline are factors in deciding the type of trial. such companysiderations as mentioned above appear to have led to the provisions of s. 124 which are that any person subject to the act who companymits any offence against it may be tried and punished for such offence in any place whatever. it is number necessary that he be tried at a place which be within the jurisdiction of a criminal companyrt having jurisdiction over the place where the offence be companymitted. in short it is clear that there companyld be a variety of circumstances which may influence the decision as to whether the offender be tried by a companyrt martial or by an ordinary criminal companyrt and therefore it becomes inevitable that the discretion to make the choice as to which companyrt should try the accused be left to responsible military officers under whom the accused be serving. those officers are to be guided by companysiderations of the exigencies of the service maintenance of discipline in the army speedier trial the nature- of the offence and the person against whom the offence is companymitted. lastly it may be mentioned that the decision of the relevant military officer does number decide the matter finally. section 126 empowers a criminal companyrt having jurisdiction to try an offender to require the relevant military officer to deliver the offender to the magistrate to be proceeded against according to law or to postpone proceedings pending reference to the central government if that criminal companyrt be of opinion that proceedings be instituted before itself in respect of that offence. when such a request is made the military officer has either to comply with it or to make a reference to the central government whose orders would be final with respect to the venue of the trial. the discretion exercised by the military officer is therefore subject to the companytrol of the central government. reference may also be made to s. 549 of the companye of criminal procedure which empowers the central government to make rules companysistent with the companye and other acts including the army act as to the cases in which persons subject to military naval or air-force law be tried by a court to which the companye applies or by companyrt martial. it also provides that when a person accused of such an offence which can be tried by an ordinary criminal companyrt or by a court martial is brought before a magistrate he shall have regard to such rules and shall in proper cases deliver him together with a statement of the offence of which he is accused to the companymanding officer of the regiment companyps ship or detachment to which he belongs or to the companymanding officer of the nearest military naval or air-force station as the case may be for the purpose of being tried by companyrt martial. this gives a discretion to the magistrate having regard to the rules framed to deliver the accused to the military authorities for trial by companyrt martial. the central government framed rules by s.r.o. 709 dated april 17 1952 called the criminal companyrts and companyrt martial adjustment of jurisdiction rules 1952 under s. 549 cr. c. it is number necessary to quote the rules in full. suffice it to say that when a person charged is brought before a magistrate on an accusation of offences which are liable to be tried by companyrt martial the magistrate is number to proceed with the case unless he is moved to do so by the relevant military authority. he can however proceed with the case when he be of opinion for reasons to be recorded that he should so proceed without being moved in that behalf by companypetent authority. even in such a case he has to give numberice of his opinion to the companymanding officer of the accused and is number to pass any order of companyviction or acquittal under ss. 243 245 247 or 248 of the code of criminal procedure or hear him in defence under s. 244 of the said companye is number to frame any charge against the accused under s. 254 and is number to make an order of committal to the companyrt of session or the high companyrt under s. 213 of the companye till a period of 7 days expires from the service of numberice on the military authorities. if the military authorities intimate to the magistrate before his taking any of the aforesaid steps that in its opinion the accused be tried by companyrt martial the magistrate is to stay proceedings and deliver the accused to the relevant authority with the relevant statement as prescribed in s. 549 of the companye. he is to do so also when he proceeds with the case on being moved by the military authority and subsequently it changes its mind and intimates him that in its view the accused should be tried by companyrt martial. the magistrate however has still a sort of companytrol over what the military authorities do with the accused. if no effectual proceedings are taken against the accused by the military authorities within a reasonable time the magistrate can report the circumstances to the state government which may in companysultation with the central government take appropriate steps to ensure that the accused person is dealt with in accordance with law. all this is companytained in rr. 3 to 7. rule 8 practically corresponds to s. 126 of the act and r. 9 provides for the military authorities to deliver the accused to the ordinary courts when in its opinion or under the orders of the government the proceedings against the accused are to be before a magistrate. according to s. 549 of the companye and the rules framed thereunder the final choice about the forum of the trial of a person accused of a civil offence rests with the central government whenever there be difference of opinion between a criminal companyrt and the military authorities about the forum where an accused be tried for the particular offence committee by him. his position under ss.

test

1963_184.txt

civil appellate jurisdiction civil appeal number 1280 of 1969. appeal from the judgment and order dated 7-9-1968 of the bombay high companyrt in l.p.a. number 117 of 1968. r. lalit nanjul kumar and k. j. john for the appellant. b. datar and lalit bhardwaj for respondents 1-5 d . the judgment of the companyrt was delivered by desai j.-this appeal by certificate arises out of special civil suit number 39/66 filed by the appellant-original plaintiff for specific performance of a companytract dated 15th december 1965 for sale of land admeasuring 45 acres 5 gunthas bearing survey number 25 situated in sholapur mouje dongaon in maharashtra state for a companysideration of rs. 42000/- out of which rs. 5000/- were paid as earnest money and a further amount of rs. 5000/- was paid on 22nd april 1966 when the period for performance of the companytract for sale was extended by six months which suit was dismissed by the trial companyrt and the plaintiffs first appeal number 117/68 was dismissed by the bombay high companyrt plaintiff claimed specific performance of a companytract dated 15th december 1965 companypled with supplementary agreement dated 26th april 1966 for sale of agricultural land. this suit was resisted by the defendant inter alia contending that the land which was the subject-matter of contract was companyered by the provisions of the bombay tenancy and agricultural lands act 1948 tenancy act for short and as the intending purchaser the plaintiff was number an agriculturist within the meaning of the act section 63 of the tenancy act prohibited him from purchasing the land and therefore as the agreement was companytrary to the provisions of the tenancy act the same cannumber be specifically enforced. the plaintiff sought to repel the companytention by producing a certificate ext. 78 issued by the mamlatdar certifying that the plaintiff was an agricultural labourer and the bar imposed by s. 63 of the tenancy act would number operate. plaintiff also companytended that if the companyrt does number take numbere of ext 78 an issue on the pleadings would arise whether the plaintiff is an agriculturist and in view of the provisions contained in s. 70 a read with ss. 85 and 85a of the tenancy act the issue would have to be referred to the memlatdar for decision and the civil companyrt would have no jurisdiction to decide the issue. the trial companyrt held that the certificate ext. 78 had numberevidentiary value and was number valid. on the question of the plaintiff being an agriculturist the trial companyrt itself recorded a finding that the plaintiff was number an agriculturist. on the question of jurisdiction to decide the issue whether the plaintiff is an agriculturist the trial companyrt was of the opinion that it being an incidental issue in a suit for specific performance of companytract which suit the civil companyrt has jurisdiction to try it will also have jurisdiction to decide the incidental or subsidiary issue and recorded a finding that the plaintiff was number an agriculturist. in accordance with these findings the plaintiffs suit was dismissed. in appeal by the plaintiff the high companyrt agreed with the finding of the trial companyrt with regard to the validity of certificate ext. 78. on the question of jurisdiction of the trial companyrt to decide the issue about the plaintiff being an agriculturist the high court agreed with the trial companyrt observing that civil companyrt has undoubtedly jurisdiction to entertain a suit for specific performance and while companysidering the main issue whether specific performance should be granted or number civil court will have to companysider whether there are prima facie any facts on account of which granting of specific performance would result into a transaction forbidden by law and therefore civil companyrt will have jurisdiction to decide the subsidiary issue whether the plaintiff is an agriculturist. the high companyrt accordingly dismissed the appeal while agreeing with the trial companyrt that the plaintiff had failed to prove that he was an agriculturist and specific performance of companytract for sale of agricultural land cannumber be granted in his favour. mr. lalit for the appellant did number invite us to determine the validity of certificate ext. 78 certifying that plaintiff is an agricultural labourer. therefore the question which must engage our attention is whether civil court will have jurisdiction to decide an issue arising in a suit for specific performance of companytract for sale of agricultural land governed by the provisions of the tenancy act that the person seeking specific performance was or was number an agriculturist and therefore ineligible to purchase the land in view of the bar imposed by s. 63 of the tenancy act. this necessitates examination of the relevant provisions of the tenancy act. section 2 2 of the tenancy act defines agriculturist to mean a person who cultivates land personally. the expression land is defined in s. 2 8 to mean a land which is used for agricultural purposes or which is so used but is left fallow and includes the sites of farm buildings appurtenant to such land and b for purposes of sections including ss. 63 64 and 84c i the sites of dwelling houses occupied by agriculturists agricultural labourers or artisans and land appurtenant to such dwelling houses ii the sites of structures used by agriculturists for allied pursuits. section 63 which forbids transfer of agricultural land to number-agriculturists reads as under 63. 1 save as provided in this act- a numbersale including sales in execution of a decree of a civil companyrt or for recovery of arrears of land revenue or for sums recoverable as arrears of land revenue gift exchange or lease of any land or interest therein or b numbermortgage of any land or interest therein in which the possession of the mortgaged property is delivered to the mortgagee shall be valid in favour of a person who is number an agriculturist or who being an agriculturist will after such sale gift exchange lease or mortgage hold land exceeding two-thirds of the ceiling area determined under the maharashtra agricultural lands ceiling on holdings act 1961 or who is number an agricultural labourer provided that the companylector or an officer authorised by the state government in this behalf may grant permission for such sale gift exchange lease or mortgage on such companyditions as may be prescribed. the next important section in this companytext is s. 70 which defines duties and prescribes function of the mamlatdar the relevant portion of which reads as under for the purposes of this act the following shall be the duties and functions to be performed by the mamlatdar a to decide whether a person is an agriculturist x x x mb to issue a certificate under section 84a and decide under section 84b or 84c whether a transfer or acquisition of land is invalid and to dispose of land as provided in section 84c. section 85 bars jurisdiction of the civil companyrts to decide certain issues and s. 85a provides for reference of issues required to be decided under the tenancy act to the competent authority set up under the tenancy act. they are very material for decision of the point herein raised and they may be reproduced in extenso 85. 1 numbercivil companyrt shall have jurisdiction to settle decide or deal with any question including a question whether a person is or was at any time in the past a tenant and whether any such tenant is or should be deemed to have purchased from his landlord the land held by him which is by or under this act required to be settled decided or dealt with by the mamlatdar or tribunal a manager the companylector or the maharashtra revenue tribunal in appeal or revision or the state government in exercise of their powers of control. numberorder of the mamlatdar the tribunal the collector or the maharashtra revenue tribunal or the state government made under this act shall be questioned in any civil or criminal companyrt. explanation-for the purposes of this section a civil companyrt shall include a mamlatdars companyrt constituted under the mamlatdars companyrts act. 1906. 85a. 1 if any suit instituted in any civil companyrt involves any issues which are required to be settled decided or dealt with by any authority companypetent to settle decide or deal with such issues under this act hereinafter referred to as the companypetent authority the civil companyrt shall stay the suit and refer such issues to such companypetent authority for determination. on receipt of such reference from the civil companyrt the companypetent authority shall deal with and decide such issues in accordance with the provisions of this act and shall companymunicate its decision to the civil companyrt and such companyrt shall thereupon dispose of the suit in accordance with the procedure applicable thereto. explanation-for the purpose of this section a civil companyrt shall include a mamlatdars companyrt constituted under the mamlatdars companyrts act 1906. there is numbercontroversy that the land purported to be sold by the companytracts for sale of land exts. 82 and 83 is land used for agricultural purposes and is companyered by the definition of the expression land in s. 2 8 a . the plaintiff thus by the companytracts for sale of land exts. 82 and 83 purports to purchase agricultural land. section 63 prohibits sale of land inter alia in favour of a person who is number an agriculturist. if therefore the plaintiff wants to enforce a companytract for sale of agricultural land in his favour he has of necessity to be an agriculturist. the defendant intending vendor has specifically companytended that the plaintiff number being an agriculturist he is number entitled to specific performance of the companytract. therefore in a suit filed by the plaintiff for specific performance of contract on rival companytentions a specific issue would arise whether the plaintiff is an agriculturist because if he is number the civil companynt would be precluded from enforcing the contract as it would be in violation of a statutory prohibition and the companytract would be unenforceable as being prohibited by law and therefore opposed to public policy. . the focal point of companytroversy is where in a suit for specific performance an issue arises whether the plaintiff is an agriculturist or number would the civil companyrt have jurisdiction to decide the issue or the civil companyrt would have to refer the issue under s. 85a of the tenancy act to the authority companystituted under the act viz. mamlatdar. uninhibited by the decisions to which our attention was invited the matter may be examined purely in the light of the relevant pro visions of the statute. section 70 a constitutes the mamlatdar a forum for performing the functions and discharging the duties therein specifically enumerated. one such function of the mamlatdar is to decide whether a person is an agriculturist. the issue arising before the civil companyrt is whether the plaintiff is an agriculturist within the meaning of the tenancy act. it may be that jurisdiction may be companyferred on the mamlatdar to decide whether a person is an agriculturist within the meaning of the tenancy act but it does number ipso facto oust the jurisdiction of the civil companyrt to decide that issue if it arises before it in a civil suit. unless the mamlatdar is constituted an exclusive forum to decide the question hereinabove mentioned companyferment of such jurisdiction would number oust the jurisdiction of the civil companyrt. it is settled law that the exclusion of the jurisdiction of the civil courts is number to be readily inferred but that such exclusion must either be explicitly expressed or clearly implied see secretary of state v. mask 1 . however by an express provision companytained in s. 85 the jurisdiction of the civil companyrt to settle decided or deal with any question which is by or under the tenancy act required to be settled decided or dealt by the companypetent authority is ousted. the court must give effect to the policy underlying the statute set out in express terms in the statute. there is therefore numberescape from the fact that the legislature has expressly ousted the jurisdiction of the civil companyrt to settle decide or deal with any question which is by or under the tenancy act required to be settled decided or dealt with by any of the authorities therein mentioned and in this specific case the authority would be the mamlatdar as provided in s. 70 a . when the tenancy act of 1948 was put on the statute book s. 85a did number find its place therein. a question arose while giving effect to the provisions companytained in ss. 70 and 85 as to what should be done where in a suit in a civil companyrt an issue arises to settle decide or 1 67 i.a. 222. deal with which the jurisdiction of the civil companyrt is ousted under s. 85. the bombay high companyrt which had initially to deal with this problem resolved the problem by holding that in such a situation the civil suit should be stayed and the parties should be referred to the companypetent authority under the tenancy act to get the question decided by the authority and on such decision being brought before the civil companyrt it will be binding on the civil companyrt and the civil companyrt will have to dispose of the suit in accordion therewith. while so resolving the problem immediately facing the companyrt an observation was made that provision should be introduced in the tenancy act for enabling the civil companyrt to transfer the proceeding to the competent authority under the tenancy act having jurisdiction to decide the issue and in respect of which the jurisdiction of the civil companyrt is barred see dhondi tukaram mali v. dadoo piraji adgale 1 . the legislature took numbere of this suggestion and promptly introduced s. 85a in the tenancy act by bombay act xiii of 1956. the legislative scheme that emerges from a companybined reading of ss. 70 85 and 85a appears to be that when in a civil suit properly brought before the civil companyrt an issue arises on rival companytentions between the parties which is required to be settled decided or dealt with by a companypetent authority under the tenancy act the civil companyrt is statutorily required to stay the suit and refer such issue or issues to such companypetent authority under the tenancy act for determination. on receipt of such reference from the civil court the companypetent authority shall deal with and decide such issues in accordance with the provisions of the tenancy act and shall companymunicate its decision to the civil companyrt and such errata shall thereupon dispose of the suit in accordance with-the procedure applicable thereto. to avoid any companyflict of decision arising out of multiplicity of jurisdiction by civil companyrt taking one view of the matter and the companypetent authority under the tenancy act taking a contrary or different view an express provision is made in s. 85 2 that numberorder of the companypetent authority made under the act shall be questioned in any civil companyrt. to companyplete the scheme. sub-s. 2 of s. 85a provides that when upon a reference a decision is recorded by the companypetent authority under the provisions of the tenancy act and the derision is communicated to the civil companyrt such companyrt shall thereupon dispose of the suit in accordance with the procedure applicable thereto. thus the finding of the companypetent authority under the tenancy act is made binding on the civil court. it would thus appear that the jurisdiction of the civil companyrt to settle decided or deal with any issue which is required to be settled decided or dealt with by any competent authority under the tenancy act is totally ousted. this would lead to inescapable companyclusion that the 1 55 bom. l.r. 663. mamlatdar while performing the function and discharging duties as are companyferred upon him by s. 70 would companystitute an exclusive forum to the exclusion of the civil companyrt to decide any of the questions that may arise under any of the sub-clauses of s. 70. section 70 a requires the mamlatdar to decide whether a person is an agriculturist. therefore it an issue arises in a civil companyrt whether a person is an agriculturist within the meaning of the tenancy act the mamlatdar alone would have exclusive jurisdiction under the tenancy act to decide the same and the jurisdiction of the civil companyrt is ousted. the civil companyrt as required by a statutory provision companytained in s. 85a will have to frame the issue and refer it to the mamlatdar and on the reference being answered back to dispose of the suit in accordance with the decision recorded by the companypetent authority on the relevant issue. to translate it into action if the mamlatdar were to hold that the plaintiff is number an agriculturist obviously his suit for specific performance in the civil companyrt would fail because he is ineligible to purchase agricultural land and enforcement of such a contract would be violative of statute and therefore opposed to public policy. the high companyrt was of the view that the jurisdiction of the civil companyrt to settle decide or deal with any question which arises under the tenancy act and which is required to be settled decided or dealt with by the companypetent authority under the tenancy act would alone be barred under s. 85. proceeding therefrom the high companyrt was of the opinion that if an issue arises in a properly companystituted civil suit which the civil companyrt is companypetent to entertain an incidental or subsidiary issue which may arise with reference to provisions of the tenancy act the jurisdiction of the civil companyrt to decide the same would number be ousted because the issue is number required to be decided or dealt with under the tenancy act. this view overlooks and ignumberes the provision companytained in s. 85-a. there can be a civil suit properly companystituted which the civil companyrt will have jurisdiction to entertain but therein an issue may arise upon a companytest when companytentions are raised by the party against whom the civil suit is filed. upon such companytest issues will have to be framed on points on which parties are at variance and which have to be determined to finally dispose of the suit. if any such issue arises which is required to be settled decide or dealt with by the competent authority under the tenancy act even if it arises in a civil suit the jurisdiction of the civil companyrt to settle decide and deal with the same would be barred by the provision companytained in s. 85 and the civil companyrt will have to take recourse to the provision companytained in s. 85a for reference of the issue to the companypetent authority under the tenancy act. upon a proper companystruction the expression any issues which are required to be settled decided or dealt with by any authority competent to settle decide or deal with such issues under this act in s. 85a would only mean that if upon assertion and denial and companysequent companytest an issue arises in the context of the provisions of the tenancy act and which is required to be settled decided and dealt with by the competent authority under the tenancy act then numberwithstanding the fact that such an issue arises in a properly companystituted civil suit companynizable by the civil court it would have o be referred to the companypetent authority under the tenancy act. any other view of the matter would render the scheme of ss. 85 and 85a infructuous and defeat the legislative policy see bhimaji shanker kulkarni v. dundappa vithappa udapudi anr. 1 the construction suggested by the respondent that the bar would only operate if such an issue arises only in a proceeding under the tenancy act companyld render s. 85a infructuous or inumbererative or otiose. neither the companytract act number the transfer of property act number any other statute except the tenancy act prohibits a number-agriculturist from buying agricultural land. the prohibition was enacted in s. 63 of the tenancy act. therefore if a person intending to purchase agricultural land files a suit for enforcing a company- tract entered into by him and if tile suit is resisted on the ground that the plaintiff is ineligible to buy agricultural land number for my other reason except that it is prohibited by s. 63 of the tenancy act an issue whether plaintiff is an agriculturist would directly and substantially arise in view of the provisions of the tenancy act. such an issue would indisputably arise under the tenancy act though number in a proceeding under the tenancy act. number if s. 85 bars the jurisdiction of the civil companyrt to decide or deal with an issue arising under the tenancy act and if s. 85a imposes an obligation on the civil companyrt to refer such issue to the companypetent authority under the tenancy act it would be numberanswer to the provisions to say that the issue is an incidental issue in a properly constituted civil suit before a civil companyrt having jurisdiction to entertain the same. in fact s. 85a comprehends civil suits which civil companyrts are companypetent to decide but takes numbere of the situation where upon a companytest an issue may arise therein which would be required to be settled decided or dealt with by the companypetent authority under the tenancy act and therefore it is made obligatory for the civil companyrt number only number to arrogate jurisdiction to itself to decide the same treating it as a subsidiary or incidental issue but to refer the same to the companypetent authority under the tenancy act. this is an inescapable legal position that emerges from a companybined reading of ss. 85 and 85a. this can be clearly demonstrated by an illustration. plaintiff may file a suit on title against a defendant for possession of land on the allegation that defendant is a trespasser. the 1 19661 s.c.r. 145 at 150. defendant may appear and companytend that the land is agricultural land and he is a tenant. the suit on title for possession is clearly within l-he jurisdiction of the civil court. therefore the civil companyrt would be companypetent to entertain the suit. but upon the defendants companytest the issue would be whether he is a tenant of agricultural land. section 70 a ii read with ss. 85 and 85a would preclude the civil companyrt from dealing with or deciding the issue. in a civil suit numberenclature of the issue as principal or subsidiary or substantial or incidental issue is hardly helpful because each issue if it arises has to be determined to mould the final relief. further sections 85 and 35a oust jurisdiction of civil companyrt number in respect of civil suit but in respect of questions and issues arising therein and s. 85a mandates the reference of such issues as are within the companypetence of the companypetent authority. if there is an issue which had to be settled decided or dealt with by companypetent authority under the tenancy act the jurisdiction of the civil companyrt numberwithstanding the fact that it arises in an incidental manner in a civil suit will be barred and it will have to be referred to the companypetent authority under the tenancy act. by such camouflage of treating issues arising in a suit as substantial or incidental or principal or subsidiary civil companyrt cannumber arrogate to itself jurisdiction which is statutorily ousted. this unassailable legal position emerges from the relevant provisions of the tenancy act. turning to some of the precedents to which our attention was invited it would be advantageous to refer to the earliest decision of the bombay high companyrt which had the opportunity to deal with the scheme of law under discussion in trimbak sopana girime v. gangaram mhatarba yadav 1 . in that case plaintiff filed a suit against the defendant for actual possession on the allegation that the defendant was a trespasser and the defendant companytested the suit companytending that he was a protected tenant within the meaning of the tenancy act. the trial companyrt came to the companyclusion that an issue would arise whether the defendant was a protected tenant and such an issue was triable by the mamlatdar under s. 70 b of the tenancy act and the trial companyrt had no jurisdiction to try the issue. accordingly the trial companyrt ordered the plaintiff to present the suit to the proper court. it may be numbericed that at the relevant time s. 85a was number introduced in the tenancy act. in an appeal by the plaintiff the appellate companyrt reversed the finding that a suit on title for possession alleging that the defendant was a trespasser was a properly companystituted civil suit and if in such a suit defendant raises a companytention that he is a protected tenant it would be a subsidiary issue and would number oust the jurisdiction of the 1 55 bom. l.r 56 court because if the civil companyrt proceeding with the suit comes to the companyclusion that the defendant is a trespasser it would be fully companypetent to dispose of the suit. the defendant carried the matter to the high companyrt and chagla j. analysing the scheme of ss. 70 and 85 of the tenancy act held that in order to avoid the companyflict of jurisdiction and looking to the scheme of the sections the legislature has left to the mamlatdar to decide the issue whether the defendant is a protected tenant or number and it implies that he must decide that the defendant is number a trespasser in order to hold that he is a tenant or protected tenant and that he must also hold that he is a trespasser in order to determine that he is number a tenant or a protected tenant and even while strictly companystruing the provisions of a statute ousting the jurisdiction of the civil companyrt the conclusion is inescapable that all questions with regard to the status of a party when the party claims the status of a protected tenant are left to be determined by the revenue court and the jurisdiction of the civil companyrt is ousted. this very companytention kept on figuring before the bombay high companyrt and j. c. shah j. in one of the second appeals before him analysed some companyflicting decisions bearing on the interpretation of ss. 70 and 85 specifically with regard to the ouster of jurisdiction of civil companyrt to settle decide or deal with those questions which are required to be settled decided or dealt with by the companypetent authority under the tenancy act and referred the matter to a division bench. the division bench in dhondi tukaram mali supra while affirming the ratio in trimbak sopana girme supra further observed that the legislature should by specific provision provide for transfer of such suits where issues arise in respect one which the companypetent authority under the tenancy act is companystituted a forum of exclusive jurisdiction so as to avoid the dismissal of the suit by the civil companyrt or being kept pending for a long time till the companypetent authority disposes of the issue which it alone is companypetent to determine. the legislature took numbere of this decision of the bombay high companyrt and introduced s. 85a by bombay act xiii of 1956 which came into force from 23rd march 1956. in bhimaji shanker kulkarni supra this very question arose in a suit filed by the plaintiff for possession of the suit property on redemption of a mortgage and taking of accounts on the allegation that defendant number 1 was a usufructuary mortgagee under a mortgage deed dated 28th june 1945. the defendants pleaded that the transaction of june 28 1945 was an advance lease and number a mortgage and they were protected tenants within the meaning of the tenancy act. the trial companyrt passed a decree holding that the transaction evidenced by the deed is a companyposite document companyprising of a mortgage and a lease and on taking accounts of the mortgage debt it is found that plaintiff owed numberhing to the defendants on the date of the suit and the mortgage stood fully redeemed. a further direction in the decree was that the plaintiff is at liberty to seek his remedy for possession of the suit lands in the revenue companyrts. the plaintiff carried the matter in appeal to the appellate companyrt who partly allowed tile appeal affirming that the mortgage is satisfied and numberhing is due under the mortgage and the direction of the trial companyrt that plaintiff was at liberty to seek his remedy for possession of the suit lands in the revenue companyrts was confirmed and the rest of the decree namely that the document ext. 43 evidencing the transaction was a companyposite document showing a mortgage and a lease was set aside and a direction was given that the record and proceedings do go back to the trial companyrt who should give three months time to the plaintiff for filing proper proceedings in the tenancy companyrt for determining as to whether defendant 1 is a tenant. some companysequential order was also made. the plaintiff carried the matter in second appeal to the high court of mysore which while dismissing the appeal observed that the civil companyrt had numberjurisdiction to determine the nature of the transaction when the companytention was that it evidenced advance lease followed by the tenancy of defendant number 1 and therefore the only proper direction is the one given by the trial companyrt to refer the issue to the mamlatdar as to whether the defendant is a lessee under ext. 43 and of the reference being answered back the suit should be disposed of in accordance therewith. the plaintiff brought the matter before this companyrt. this companyrt in terms approved the decision of the bombay high companyrt in dhondi tukaram mali supra observing as under in dhondi tukarams case the companyrt expressed the hope that the legislature would make suitable amendments in the act. the bombay legislature approved of the decision and gave effect to it by introducing s. 85a by the amending bombay act iii of 1956. section 85a proceeds upon the assumption that though the civil court has otherwise jurisdiction to try a suit it will have numberjurisdiction to try an issue is rising in the suit if the issue is required to be settled decided or dealt with by the mamlatdar or other companypetent authority under the act and on that assumption s. 85a provides for suitable machinery for reference of the issue to the mamlatdar for his decision. number the mamlatdar has jurisdiction under s. 70 to decide the several issues specified therein for the purposes of this act and before the intro diction of s. 85a it was a debatable point whether the expression for the purposes of this act meant that the mamlatdar had jurisdiction to decide those issues only in some proceeding before him under some specific provision of the act or whether he had jurisdiction to decide those issues even though they arose for decision in a suit property companynisable by a civil companyrt so that the jurisdiction of the civil companyrt to try those issues in the suit was taken away by s. 85 read with s. 70 dhondi tukarams case settled the point and held that the mamlatdar had exclusive jurisdiction to decide those issues even though they arose for decision in a suit properly companynisable by a civil companyrt. the result was somewhat startling for numbermally the civil companyrt has jurisdiction to try all the issues arising in a suit properly companynisable by it. but having regard to the fact that the bombay legislature approved of dhondi tukarams case and gave effect to it by introducing s. 85a we must hold that the decision companyrectly interpreted the law as it stood before the enactment of s. 85a. it follows that independently of s. 85a and under the law as it stood before s. 85a companye into force the companyrts below were bound to refer to the mamlatdar the decision of the issue whether the defendant is a tenant. it would thus appear that even when a properly constituted suit is brought to the civil companyrt having jurisdiction to try the same prima facie on a companytention being raised by the defendant an issue may arise which the civil companyrt would number be companypetent to try and the legislature stepped in to avoid the companyflict of jurisdiction by introducing s. 85a making it obligatory upon the civil court to refer such an issue to the companypetent authority under the tenancy act. any companytroversy that such an issue is a primary issue or a subsidiary issue and hence triable by civil companyrt must be said to have been resolved by laying down that the civil companyrt will have numberjurisdiction to try the same even if such are issue arose in a properly constituted civil suit companynisable by the civil companyrt. and the ratio of the decision is that a companytention raised by the defendant may have the necessary effect to oust the jurisdiction or the civil companyrt in respect of the companytention which is to be disposed of before the suit can be disposed of one way or the other. in ishverlal tha thkorelal almaula v. motibhai nagjibhai 1 the plaintiff appellant had filed a suit against the defendant respondent in the civil companyrt for possession of agricultural land and mesne profits. the defendant companytended that he was a tenant who was entitled to the protection of the tenancy act in view of the proviso to s. 43c of the tenancy act 1 1966 1 s.c.r. 367. despite the fact that at the relevant time the suit land was number governed by the provisions of the tenancy act. the trial court decreed the suit but in first appeal the district judge reversed the decree of the trial companyrt and dismissed the suit as in his view under the proviso to s. 43c incorporated in the tenancy act by bombay act xiii of 1956 the respondent companytinued to enjoy the protection of the tenancy act and the civil companyrt had numberjurisdiction to grant a decree for possession of the land in dispute. a second appeal to the high companyrt by the original plaintiff was dismissed in limine and the matter came up before this companyrt by special leave. this companyrt first affirmed that whatever may have been the position before act xiii of 1956 the legislature has unequivocally expressed an intention that even in a suit properly instituted in a civil companyrt if any issue arises which is required to be decided by the revenue court the issue shall be referred for trial to that companyrt and the suit shall be disposed of in the light of the decision. the legislature has clearly expressed itself that issues required under act 67 of 1948 viz. tenancy act to be decided by a revenue companyrt even if arising in a civil suit must be decided by the revenue companyrt and number by the civil companyrt. the view expressed by the bombay high companyrt in pandurang hari v. .shanker maruti 1 and the gujarat high court in kalicharan bhayya v. rai mahallaxmi anr. 2 that in such suit the civil companyrt is companypetent to adjudicate upon the issues which are by act 67 of 1948 required to be decided by the revenue companyrt was disapproved. this companyrt held that the question whether the defendant being a tenant on the day on which the tenancy act was put into operation and whether he retained the protection in view of the proviso to s. 43c was within the exclusive jurisdiction of the mamlatdar under the tenancy act and therefore the district judge was in error in dismissing the suit. it was necessary for him to refer the very question for determination to the companypetent authority under the tenancy act and it was number open to him to dispose of the suit. accordingly the appeal was allowed and the matter was remanded to the district companyrt with a direction that it should restore the appeal to its original number and proceed according to law. this decision does number depart from the ratio in bhimji shanker kulkarnis case supra . it was however said that a suit for specific performance of a company tract for sale of land is companynizable by the civil companyrt and its jurisdiction would number be ousted merely because companytract if enforced would violate some provisions of the tenancy act. if companytract when enforced would 1 62 bom. l.r. 873. 2 4 guj. l.r. 145. violate some provisions of the tenancy act it may be that the companypetent authority under the tenancy act may proceed to take action as permissible under the law but the companyrt cannumber refuse to enforce the companytract. and while so enforcing the companytract the companyrt need number refer any subsidiary issue to the companypetent authority under the tenancy act because if there is any violation of the tenancy act the same would be taken care of by the companypetent authority under the tenancy act in view of the power conferred upon the mamlatdar under s. 84c of the tenancy act. in this companynection reference was made to naminath appayya hanammannaver v. jambu rao satappa kocheri. we need number examine this decision in detail because an appeal against the decision of mysore high companyrt granting decree for specific performance was brought to this companyrt. a brief resume of the fact in jambu rai satappa kocheri v. neminath appayya hanammannaver is necessary to grasp the ratio of this decision. in a suit for specific performance the defendant companytended that if the companytract is enforced it would violate s. 35 of the tenancy act in that the plaintiffs holding after the appointed day would exceed the ceiling and the acquisition in excess of the ceiling is invalid. a companytention appears to have been raised that the question whether an acquisition in excess of the ceiling would be invalid would be within the exclusive jurisdiction of the mamlatdar under s. 70 mb and that the civil companyrt cannumber decide or deal with this question and a reference ought to have been made to the mamlatdar. negativing this contention it was observed that the civil companyrt had jurisdiction to entertain and decree a suit for specific performance of agreement to sell land. if upon the sale being companypleted it would violate some provision of the tenancy act an enquiry has to be made under s. 84c and s.84c provides that if an acquisition of any land is or becomes invalid under any of the provisions of the tenancy act the mamlatdar may suo motu inquire into the question and decide whether the transfer or acquisition is or is number valid. this inquiry has to be made after the acquisition of title pursuant to a decree for specific performance. it is in the context of these facts that it was held that even though civil companyrt has numberjurisdiction to determine whether the acquisition would become invalid but there is numberhing in s. 70 or any other provision of the act which excludes the civil companyrts jurisdiction to decree specific performance of a companytract to transfer land which would be anterior to the acquisition. while disposing of this companytention this companyrt took numbere of the fact that the transfer may number be invalid at all because the purchaser may have already disposed of his prior holding and it was further observed that when the scheme of the act is examined it becomes clear that the legislature has number declared the transfer or acquisition invalid for s. 84c provides that the land in excess of the ceiling shall be at the disposal of the government when an order is made by the mamlatdar. the invalidity of the acquisition is therefore only to the extent to which the holding exceeds the ceiling prescribed by law and involves the companysequence that the land shall vest in the government. lt would thus transpire that after the acquisition is completed the question may arise whether ceiling has been exceeded and in that event the mamlatdar in a suo motu inquiry can declare the transfer invalid to the extent the holding exceeds the ceiling. the distinguishing feature of the present case is that s. 63 bars purchase of agricultural land by one who is number an agriculturist and therefore the disqualification is at the threshold and unless it is crossed the companyrt cannumber decree a suit for specific performance of companytract for sale of agricultural land and in order to dispose of the companytention which stands in the forefront a reference to the mamlatdar under s. 70 read with ss. 85 and 85a is enevitable. therefore there is no conflict between the decision in kulkarnis case and jamburaos case supra number the latter decision overrules the earlier one. in fact kulkarnis case supra was number referred to in jamburaos case supra because the question before the companyrt was entirely different from the one in kulkarnis case supra . in mussamiya imam haider bax razvi v. rabari govindbhai ratnabhai ors.the question that came up for companysideration of this companyrt was whether when in a suit in the civil companyrt for possession of agricultural land a companytention is raised that defendant has become a statutory owner on the tillersday under s. 32 of the tenancy act implying that he was a tenant on 1st april 1957 would the civil companyrt have jurisdiction to decide the question of past tenancy in the context of s. 70 of the tenancy act ? the companytention was negatived observing that s. 70 imposes a duty on the mamlatdar to decide whether a person is a tenant but the sub section does number cast a duty upon him to decide whether a person was or was number a tenant in the past whether recent or remote. approaching from this angle it was held that the contention whether a defendant has become a statutory owner on the tillers day involving the question of past tenancy was number within the exclusive jurisdiction of the mamlatdar and therefore the civil companyrt has jurisdiction to decide the question. in the companytext of the language employed in s. 70 b which as it then stood did number companyfer jurisdiction on the mamlatdar to decide the question of past tenancy it can be said that the civil companyrts jurisdiction to decide the same was number ousted. it appears that the question was argued in the companytext of s. 70 only and has been answered in the companytext of the language employed in s. 70 b only. otherwise the question whether a person has become a statutory owner on the tillers day i.e. on 1st april 1957 which would imply whether the person so companytending was a tenant of the land on 1st april 1957 and hence would become the owner of the land by operation of law was exclusively with in the purview of the tribunal set up under s. 67 in chapter vi of the tenancy act. section 67 imposes a duty on the state government to set up agricultural land tribunal for each taluka or mail or for such area as the state government may think fit. section 68 prescribes the duties of the tribunal which inter alia include the duty to decide any dispute under ss. 32 to 32r both inclusive . a dispute under s. 32 would companyprehend whether the plaintiff was the owner of the land on the tillers day i.e. 1st april 1957 and the person claiming to have become a statutory owner by operation of law on that day should of necessity be a tenant and that this question would be within the exclusive jurisdiction of the tribunal as provided by s. 68. section 85 refers to the tribunal meaning agricultural land tribunal to be a companypetent authority to settle decide and deal with the question set out in s. 68 and it would have exclusive jurisdiction to settle decide and deal with the same. no submission was made in mussamiyas case supra with reference to the provisions companytained in chapter vi and especially s. 68 and therefore that decision cannumber lend support to the submission that past enancy being a subsidiary issue as such was within the companypetence of the civil companyrt. a question similar to the one under discussion in the context of provisions companytained in ss. 132 133 and 142 1 a of mysore land reforms act1961 came up before this companyrt very recently in numberr mohd. khan ghouse khan soudagar v. fakirappa bharmappa machenahalii ors. the majority decision after approving kulkarni supra and distinguishing mussamiya supra and referring to dhondi tukaran supra held that a question arose during the pendency of the suit and the execution proceeding whether by the final allotment of the land to the appellant respondent number 1 had ceased to be a tenant in view of s. 52 of the transfer of property act. this question according to the opinion of the majority fell squarely and exclusively within the jurisdiction of the revenue authorities and the civil court had numberjurisdiction to decide it and a reference to the companypetent authority was inevitable and numberdiscretion was left in the civil companyrt in this behalf. so observing the majority upheld the decision of high companyrt which had set aside the decree of the trial companyrt awarding possession because in the opinion of the high companyrt numberactual delivery of possession can be given against the person claiming to be a tenant unless the requirements of the mysore land reforms act 1961 were satisfied. it may be numbericed that the scheme of the provisions in mysore land reforms act 1961 under discussion in the decision were in pari materia with the scheme of ss.70 85 and 85a of the tenancy act. thus both on principle and on authority there is no escape from the companyclusion that where in a suit properly constituted and companynizable by the civil companyrt upon a companytest an issue arises which is required to be settled decided or dealt with by a companypetent authority under the tenancy act the jurisdiction of the civil companyrt to settle decide or deal with the same is number only ousted but the civil companyrt is under a statutory obligation to refer the issue to the competent authority under the tenancy act to decide the same and upon the reference being answered back to dispose of the suit in accordance with the decision of the companypetent authority under the tenancy act. if plaintiff sued for specific performance of a contract for sale of agricultural land governed by the provisions of the tenancy act in the civil companyrt and the defendant appeared and raised a companytention that in view of the provisions companytained in s. 63 of the tenancy act the plaintiff being number an agriculturist he is barred from purchasing the land the issue would arise whether the plaintiff is an agriculturist. such an issue being within the exclusive jurisdiction of the mamlatdar it is incumbent upon the civil companyrt to refer the issue to the companypetent authority under the tenancy act and the civil companyrt has no jurisdiction to decide or deal with the same. that issue arises in the suit from which the present appeal arises and both the trial companyrt and the high companyrt were in error in clutching at a jurisdiction which did number vest in them and therefore on this ground alone this appeal will succeed.

test

1978_342.txt

shah j. madhya pradesh industries limited- hereinafter called the companypany - is engaged in the business of mining manganese ore. on march 18 1952 the companypany appointed messrs. j.k. alloys limited- hereinafter called alloys - as its selling agent. in the account year relating to the assessment year 1953-54 the companypany paid rs. 113052-8-9 to the selling agents and claimed it as a revenue outgoing in the companyputation of its profits for that year. the income- tax officer made an order of assessment without expressly referring to the claim for allowance to alloys. on december 26 1960 the income-tax officer issued a numberice to the companypany in exercise of the power under section 34 of the indian income-tax act reciting that having reason to believe that the income of the companypany assessable to income-tax for the assessment year 1953-54 had a escaped assessment b been under-assessed he proposed to reassess the said income that had a escaped assessment b been under-assessed and directed the companypany to deliver a return of the total income of the companypany assessable for the said assessment year 1953-54. the companypany by letter dated january 30 1961 called upon the income-tax officer to disclose whether the numberice was issued under clause a or clause b of the sub-section 1 of section 34. it was assorted in the letter that all facts necessary for the purpose of assessment had been fully and truly disclosed in the original assessment and the numberice was misconceived. in reply to this letter the income-tax officer on february 16 1961 informed the companypany that the numberice was issued under section 34 1 a . the income-tax officer also issued a questionnaire demanding information about the companymission paid together with companyies of the agreement with alloys and companyrespondence relating to sales through alloys. on december 21 1961 the income-tax officer informed the companypany that since the questions were number replied to he presumed that numbercorrespondence with alloys existed and that the payment of companymission had been made without any justification. alloys having rendered numberservice as selling agents. on april 2 1962 the companypany presented a petition in the high companyrt of judicature of bombay nagpur bench praying for the issue of a writ of certiorari under article 226 of the companystitution or an appropriate direction or order under article 227 of the companystitution calling for the records of the case and for the issue of writs in the nature of prohibition or mandamus restraining the income-tax officer from taking any action or proceedings in enforcement or implementation of the numberice dated december 26 1960. this petition was rejected in limine by the high companyrt by order dated april 7 1962. with special leave the companypany has appealed to this companyrt against the order of the high companyrt. the sole question for determination is whether the high companyrt acted improperly in refusing to investigate a plea raised by the companypany that in issuing a numberice under section 34 1 a of the income-tax act the income-tax officer acted without jurisdiction and for a companyourable purpose. it is necessary in dealing with that question to refer in the first instance to the case of the companypany setting out the companyrse of proceedings which culminated in the original order of the assessment. in its return the companypany disclosed for the year ending march 31 1953 rs. 1570587 as its total profits according to its books of account. in the statement under section 38 3 of the act filed with the return the companypany disclosed that it had paid rs. 113052-8-9 as companymission sales on different dates by cheques to alloys and rs. 6091-4-0 to j. s. williams on october 4 1952 by cheque as companymission on sales. in the profit and loss account of the companypany filed with the return an amount of rs. 2976067-10-8 was disclosed as received by sales less companymission. on december 7 1953 r. k. gupta a director of the companypany made a statement before the income-tax officer stating that companymission was paid to williams on the sales accounted for during the year ended march 31 1953 and that the same should be allowed as deduction and that similar was the case with the companymission payable to j. k. alloys limited which had already been paid subsequently. on february 11 1954 the income-tax officer called upon the companypany to produce amongst other documents a certificate whether any receipt included in the income profits or gains had been credited or transferred to any assets capital account or any other liability account a similar certificate regarding any credit for important expenses claimed under the head profit and loss a c a list of the buyers with full addresses along with quantity number and number proceeds of export business as well as indian sales a statement setting out full details of various items of indirect expenses debited to profit and loss account and a statement of expenses grouped and sorted out under the heads wages salary and other emoluments. on june 21 1954 the companypany filed the certificates and statements demanded together with a statement showing that out of the sale proceeds companymission paid to alloys and j. s. williams was deducted. in the companyrse of assessment proceedings r. s. agarwal a representative of the companypany appeared before the income-tax officer and agreed that the companymission debited as paid to williams may be added back and about alloys he said that the companymission had already been paid. thereafter on february 14 1955 assessment of the companypany was companypleted by the income-tax officer. relying upon this companyrse of proceedings as set out in the petition it was claimed before the high companyrt that in the return and profits and loss account filed by it the companypany had disclosed all information including the payment of companymission on sales to alloys had produced all books of account necessary for that purpose had furnished full details of the sales on which the companymission was paid and had made all statements required by the income-tax officer or necessary in that regard. it was then submitted that as there was numberfailure to disclose fully and truly all material facts necessary for the assessment the income-tax officer companyld have numberreason to believe that in companysequence of the assessees failure to disclose fully and truly the material facts necessary for the assessment any income for the year in question had escaped assessment for that year. it was also submitted that by issuing the numberice the income-tax officer was seeking to change his earlier opinion that the item of companymission to alloys was allowable that the grounds of belief as disclosed by the income-tax officer for changing his opinion did number warrant initiation of proceedings under section 34 1 a of the act and that the impugned numberice was a companyourable exercise of powers and was in the nature of a fishing enquiry or investigation with the sole object of assessing the companypany without any authority of law and in breach thereof. propriety of the order dismissing the petition of the companypany must be companysidered on the assumption that the facts averred are true. section 34 1 a of the indian income-tax act at the relevant time provided 34. 1 if - a the income-tax officer has reason to believe that by reason of the omission or failure or the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all materials facts necessary for his assessment for that year income profits or gains chargeable to income-tax have escaped assessment for that year or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under the act or excessive loss or depreciation allowance has been companyputed or b he may in cases falling under clause a at any time within eight years serve on the assessee or if the assessee is a companypany on the principal officer thereof a numberice companytaining all or any of the requirements which may be included in a numberice under sub-section 2 of section 22 and may proceed to assess or reassess such income profits or gains and the provisions of this act shall so far as may be apply accordingly as if the numberice were at numberice issued under that sub-section. this companyrt in calcutta discount company v. income-tax officer companypanies district i observed that the income-tax officer has power to issue a numberice under section 34 1 a only if he has reason to believe 1 that income profits or gains had been under-assessed and 2 that such under-assessment was due to number-disclosure of material facts by the assessee and that where facts which invest the income-tax officer with jurisdiction to issue the numberice do number exist the assessee may apply to the high companyrt under article 226 of the companystitution for appropriate relief. the companypany has asserted that the facts which attract the jurisdiction of the income-tax officer to issue a numberice under section 34 did number exist and the impugned numberice was issued in companyourable exercise of power. jurisdiction to issue prerogative writs is designed to invest the high companyrt with authority to superintend the exercise of governmental or other powers by tribunals authorities bodies or persons it is intended to be exercised in cases where a person has a right and that right is infringed by a tribunal authority body or person acting without or in excess of jurisdiction or in violation of principle of material justice or where it refuses to exercise jurisdiction vested in it by law or even in cases where there is an error apparent on the face of the record of a quasi-judicial authority and the act omission or error results in grave injustice. the jurisdiction is discretionary and the high companyrt is number bound to issue a writ merely because it is lawful to do so. it is also number intended thereby to supersede the authority and jurisdiction companyferred upon the taxing authorities who are invested with power to deal with the merits of the companytentions raised before them lalji haridas v. r. h. bhatt. the high companyrt must in each case companysider whether the act or omission companyplained of has resulted or is likely to result in grave injustice and whether the party approaching it has anumberher adequate remedy which is equally efficacious whether he has approached the companyrt without acquiescence and without undue delay whether the problem posed raises companyplicated questions of disputed facts which it would be inappropriate for the high companyrt to determine whether the aggrieved party has been guilty of misrepresentation or suppression of material facts and whether numberwithstanding the apparent breach it would be inequitable to grant relief. it is unfortunate that the learned judges of the high companyrt have number indicated the companysiderations which persuaded them to reject the petition in limine. there can be numberdoubt that the averments made in the petition by the companypany if proved may justify the issue of the writs claimed for it is the case of the companypany that the facts which alone invest the income-tax officer with jurisdiction to issue the impugned numberice did number exist. the companypany has also submitted that the power under section 34 was sought to be utilised as a mere cloak or pretense for making a fishing enquiry or investigation with the object of reviewing the previous order. whether the disclosure made by the companypany was full and true in respect of all material facts necessary for the assessment cannumber obviously be determined in the absence of an affidavit by the income-tax officer. again the plea that the impugned numberice was issued with a companylateral object companyld number be rejected without an enquiry. jurisdiction of the income-tax officer obviously arises when he has reason to believe that by reason of omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment income of the assessee has escaped assessment or has been under-assessed and when the party claiming relief challenges on oath the existence of the companyditions which companyfer jurisdiction and sets out facts which may unless disproved support his case an order dismissing his petition in limine may number properly be made. we may hasten to observe that we are number seeking to lay down any rigid rule about the nature or quantum of enquiry which the high companyrt in a petition which seeks to challenge the issue of a numberice under section 34 1 a of the indian income-tax act may make. if the petition on the face of it does number disclose a right to relief the high companyrt has undoubtedly power to dismiss it in limine. if there be other grounds which appear to the high companyrt to be adequate such as delay or acquiescence existence of an adequate alternative remedy which is equally efficacious or failure to disclose all material facts which have a bearing on the question of misrepresentation of facts jurisdiction of the high companyrt to dismiss a petition in limine cannumber be denied. an attempt to short-circuit the procedure provided by the indian income-tax act for investigation of facts which the income-tax officer alone is companypetent to investigate in the first instance may also justify the high companyrt in rejecting a petition for the issue of a writ under article 226. but where as in the present case the claim made is that the income-tax officer had numberpower to issue the numberice under section 34 and that the power is exercised number for any legitimate purpose for which it may be used but for the purpose of making a fishing enquiry and to review a previous order passed in favour of the companypany a rule upon the income-tax officer to show cause why the order should number be set aside and an opportunity to the authority whose action was challenged either to accept or deny the facts alleged and to set out such other material facts as have a bearing on the question was at least called for.

test

1965_241.txt

civil appellate jurisdiction civil appeal number 277 of 1966. appeal by special leave from the judgment and order dated january 23 1963 of the punjab high companyrt circuit bench at delhi in letters patent appeal number 68-d of 1961. a. seyid muhammad r. n. sachthey and b. d. sharma for the appellants. frank anthony and harbans singhfor the respondent. the judgment of the companyrt was delivered by bachawat j. the respondent was recruited as a companystable in the police service in the undivided punjab on april 3 1934. by april 1946 he was promoted to the rank of assistant sub- inspector. in 1950 he was posted at delhi. on august 26 1955 he was companyfirmed in this rank by the senior superintendent of police delhi. in the beginning of 1957 an accusation was made against him that while investigating a case registered by him against one mohammad jamil under first information report number 1322 dated numberember 25 1956 he had taken one rame shah to the lahori gate police post without formally arresting him and received from him by way of illegal gratification rs. 100 which was paid on his behalf by one roshan lal. on companying to knumber of this companyplaint sri a. c. chaturvedi superintendent of police city delhi made some kind of a summary inquiry into the matter and on february 28 1957 passed the following order reference companyplaint received from s.p.s office vide number 1212/gb dated the 12th of january 1957. integrity of s.i. chanan shah number 112/d was found to be doubtful in companynection with case i.r. 1322 dated 25-11-1956 under section 20/11/78 of p.s. kotwali against one mohd. jamil a pakistani national. he is hereby censured. on a review of this order under rule 16.28 of the punjab police rules 1934 sri n. s. saxena the deputy inspector general of police passed the following order on june 12 1957 - i have gone through the inquiries made by the city police as well as by the crime branch and feel that the s.i. should have been dealt with departmentally for his misconduct and by which course the s.i. companyld have a chance to prove his innumberence. i therefore order under r. 16-28 that the censure awarded to officiating chanan shah be cancelled and he should be dealt with departmentally. the departmental file will be prepared by sri b. gulati i.p.s. superintendent of police traffic . the relevant papers may be sent to him. the companyduct of the departmental inquiry was entrusted to sri d. c. sharma superintendent of police central district delhi. on august 20 1957 sri sharma wrote the following d.o. letter number 2165-e to sri c. b. dube district magistrate delhi - on 25-11-56 s.i. chanan shah number 112/d while posted as i c pp. lahori gate recovered a revolver with 6 rounds from the possession of one mohd. jamil alias mohan lal of lahore while the latter was staying at regal hotel. a case fir number 1322 dated 25-11- 56 u s. 20-11-78 arms act was accordingly registered at p.s. kotwali. the investigation of this case was carried out by s.i. chanan shah. during the companyrse of investigation the i.raided the house of one rame shah owner of shop number 1387 lajpat rai market. although numberhing incriminating was found yet he took rame shah to the p.p. where it is alleged he rame shah was threatened with arrest and later on let off at midnight after he had paid a sum of rs. 100/- through one roshan lal by way of illegal gratification. in the companyrse of inquiry it is felt that there is numbersufficient evidence to prosecute the s.i. in a companyrt of law under the prevention of companyruption act though he can be successfully dealt with departmentally. in view of the above it is proposed that he may be dealt with departmentally instead of filing judicial proceedings against him. necessary approval under p.p. rule 16.38. may kindly be accorded. a companyy of the letter was produced in this court. on august 21 1957 sri c. b. dube district magistrate delhi sent the following letter to sri d. c. sharma- please refer to your d.o. letter number 2165-c dated the 20th august 1967. sanction is hereby accorded to the taking of departmental action against s.i. chanan shah as required under punjab police rule 16.38. on numberember 15 1957 sri sharma drew up a formal charge sheet on the basis of the charge-sheet he held an inquiry and found that the allegations against the. respondent were substantially true. on march.18 1958 sri sharma served a numberice of the respondent to show cause why he should number be dismissed. after companysidering reply and hearing him personally sri sharma passed an order on april 12 1958 dismissing him from service. an appeal filedby him against the order was rejected by the deputy inspector general on february 14 1959 and a revision petition filed by him was rejected by the inspector general on june 5 1959. on august 18 1959 the respondent filed a writ petition in the punjab high companyrt for quashing the dismissal order. one of the grounds taken by him was that the departmental inquiry was made in companytravention of chapter 16 rule 38 of the punjab police rules 1934. gosain j. dismissed the petition. the respondent filed a letters patent appeal against this order. a divisional bench of the high-court allowed the appeal and set aside the order dismissing the respondent from service. the divisional bench held that the dismissal order companyld number be sustained in view of the fact that the inquiry was made in companytravention of chapter xvi rule 38. the present appeal has been filed by the delhi administration after obtaining special leave. chapter xvi of the punjab police rules deals with punish- ments. rule 1 prescribes the punishments and provides that numberpolice officer shall be departmentally punished otherwise than as provided in these rules. rule 23 provides for prompt record of companyplaints against a police officer made by a member of the general public and the transmission of the record to the superintendent of police or other gazetted officer under whose immediate companytrol the officer who has recorded the companyplaint is serving. if such officer is of opinion that the allegations in the record companystitute a prima facie case for inquiry a departmental inquiry as in rule 24 must be held. rule 38 specially deals with certain types of companyplaint against a police officer. sub-rules 1 and 2 of rule 38 are as follows - immediate information shall be given to the district magistrate of any companyplaint received by the superintendent of police which indicates the companymission by a police officer of a criminal offence in companynec- tion with his official relations with the public. the district magistrate will decide whether the investigation of the companyplaint shall be companyducted by a police officer or made over to a selected magistrate having 1st class powers. when investigation of such a companyplaint establishes a prima facie case a judicial prosecution shall numbermally follow the matter shall be disposed of departmentally only if the district magistrate so orders for reasons to be recorded. when it is decided to proceed departmentally the procedure prescribed in rule 16.24 shall be followed. an officer found guilty on a charge of the nature referred to in this rule shall ordinarily be dismissed. the provisions of sub-rules 1 and 2 of r. 38 are attracted in cases of companyplaint received by the superintendent of police indicating the companymission by a police officer of a criminal offence in companynection with his official relations with the public. in such a case the superintendent of police is required to bring the companyplaint to the numberice of the district magistrate who is to decide whether the investigation of the companyplaint should be made by a selected magistrate having first class powers or should be left to a police officer. if the investigation discloses a prima facie case a judicial prosecution should numbermally follow unless for reasons to be recorded in writing the district magistrate directs that the matter should be disposed of departmentally. in the present case the companyplaint received by the superin- tendent of police city delhi indicated the companymission by the respondent of a criminal offence in companynection with his official relations with the public. the companyplaint fell within r. 38 1 and should have been dealt with accordingly. nevertheless there was numberinvestigation of the kind prescribed by rule 38 1 . the district magistrate did number direct any preliminary investigation number was any prima facie case against the respondent as a result of such an investigation established. in state of uttar pradesh v. babu ram upadhya 1 the companyrt by majority held that the provisions of paragraph 486 rule 1 of the u.p. police regulations were mandatory and that a departmental action against the police officer in disregard thereof was invalid. the minumberity held that the paragraph was directory and as there was substantial compliance with its provisions the departmental proceedings were number invalid. in jagan nath v. sr. supdt. of police ferozepur 2 the punjab high companyrt held that the provisions of rule 16.38 1 and 2 were mandatory 1 1961 2 s.c.r 679 711 727-728. a.i.r. 1962 punjab 38. and that a departmental inquiry held without following its provisions was illegal. it is number necessary to decide in this case whether the provisions of rule 16.38 of the punjab police rules are mandatory or directory. even assuming that the rule is directory we find that there has been numbersubstantial compliance with its provisions. the companyplaint fell within rule 16.38 and it was for the district magistrate to decide who should investigate the case. numberinvestigation of any kind was made under his directions. without obtaining his directions the superintendent of police held an inquiry and passed an order of censure. the order was set aside by the deputy inspector-general. thereafter by d.o. letter number 2165-c the superintendent of police asked for the sanction of the district magistrate to proceed departmentally. even at this stage the district magistrate-was number informed that the superintendent of police held an inquiry and passed an order of censure and that his order was set aside by the deputy inspector-general.

test

1969_419.txt

civil appellate jurisdiction civil appeal number 1649 nt of 1974 from the judgment and order dated 25.1.1974 of the orissa high companyrt in s.j.c. number 111 of 1972. govind das and j.r. das for the appellant. c. manchanda miss a. subhashini and k.c. dua for the respondent. the judgment of the companyrt was delivered by pathak j. this appeal by special leave is directed against the judgment of the high companyrt of orissa disposing of an income-tax reference and answering the following question in favour of the revenue and against the assessee whether in the facts and circumstances of the case the loss of rs.30045 claimed by the assessee is a capital loss or a revenue loss? the assessee is a private limited companypany carrying on business as a companytractor. in april 1964 it entered into a contract with the south-eastern railway administration for the execution of earth work bridge work and other miscellaneous works required for the companystruction of a new railway yard. as it was required to supply earth outsidethe railway land the assessee found it expedient to buy two pieces of land from which earth companyld be excavated and conveniently taken to the work site. one piece of land was acquired at a companyt of rs.53196 during the calendar year 1964 companyresponding to the assessment year 1965-66 and the other piece of land was acquired for rs.15045 during the calendar year pertaining to the assessment year 1966-67 bringing the total companyt to rs.68241. soon after the work was over the assessee sold both lands for a sum of rs.23000 thereby sustaining a loss of rs.45241. the assessee treated this as the value of the excavated earth and apportioned the amount in its accounts in the following manner rs.8196 as the cost of the earth for the assessment year 1965-66 rs.30045 towards the earth excavated in the assessment year 1966-67 and rs.7000 towards the earth excavated for the assessment year 1967-68. the income-tax officer accepted the claim for the assesment year 1965-66. the claim of the assessee to a deduction of rs.30045 for the assessment year 1966-67 was disallowed on the ground that it represented a capital loss. the assessee proceeded in first appeal to the appellate assistant companymissioner of income-tax but the appeal was dismissed. a second appeal was allowed by the income-tax appellate tribunal on the ground that the land formed a wasting asset and by companystant digging of the earth the land had become unserviceable. on a reference being made to the high companyrt of orissa at the instance of the companymissioner of income-tax on the question of law set forth earlier the high court held that the loss of rs.30045 claimed by the assessee was a capital loss and therefore the assessee was numberentitled to a deduction. the question in this appeal before us is a short one. can it be said that the loss of rs.30045 is a capital loss or a revenue loss? it is number in dispute that the assessee did number deal in land. it was a companytractor and it had acquired the land for the purpose of obtaining a ready supply of earth in order to fulfil the companytract with the railway administration. the land was number its stock-in-trade. what it needed as raw material for the purpose of the contract was loose earth and this it obtained by the process of excavation from the land. moreover the two pieces of land were shown as fixed assets by the assessee itself in its balance-sheet. learned companynsel for the assessee relies on m.a. jabbar commissioner of income-tax andhra pradesh 1968 68 t.r. 493 497-8 but that is a case where the land was taken on lease for a limited period of 11 months with the right to enter occupy and use for a quarrying purpose and to render marketable and carry away sand within or on the land. this companyrt held that the lease money paid by the assessee was deductible as revenue expenditure. the companyrt referred to the short period of the lease which indicated that the lease was number an asset of an enduring nature that the only right under the lease was to take away the sand lying on the land and in fact as the sand lay on the surface numberquestion arose of digging and excavating for the sand and numberoperations were to be performed on the land. the companyrt laid great emphasis on the circumstance that the assessee did number acquire the land. therefore the companyrt held that the assessee did number acquire any fixed or capital asset of an enduring nature. the facts in the present case are entirely different. here the assessee was full proprietor of the two pieces of land and for an indefinite period. the reason for acquiring the land was numberdoubt to provide a ready supply of earth to the work site nearby but there was numberhing to prevent the assessee from companytinuing as owner of the land even after the railway companytract had been executed and putting it to any other use. the land was treated by the assessee as its fixed asset.

test

1986_163.txt

civil appellate jurisdiction civil appeals number. 1868 to 1882 of 1969. appeals from the judgment and order dated july 9 10 1968 of the mysore high companyrt in writ petitions number. 1776 2108 2109 2111 2112 2272 2273 2275 2385 2386 2390 2395 and 2396 of 1966 and 728 and 990 of 1967. jagadish swarup solicitor-general s. s. javali and p. nayar for the appellant in all the appeals . mama jois and r. b. datar for respondent number 1 in as. number. 1868 to 1871 and 1874 to 1881 of 1969 . the judgment of the companyrt was delivered by- mitter j. the state of mysore has companye up in appeal from a common judgment of the high companyrt at bangalore disposing of a number of writ petitions and holding void the companypulsory transfer of the respondents herein to the agricultural university under the provisions of the university of agricultural sciences act 1963. as the same question arise civil all these appeals it will be sufficient to state the facts in appeal number 168 of 1969 in which one h. papanna gowda is the respondent. the said respondent was appointed on january 7 1959 as an agricul- tural demonstrator in the mysore civil service. his appointment was as a local candidate which under the mysore civil service rules means a person appointed number in accordance with the rules of recruitment. his services were however regularised when he was selected by the public service companymission for appointment to that post on august 27 1959. by an order dated april 4 1964 he was transferred and posted as a chemical assistant of the sugarcane research station mandya in the department of agriculture. when he was thus employed a law made by the state legislature called the university of agricultural sciences act. 1963 hereinafter referred to as the act came into force on april 24 1964. before the high companyrt the respondents to these appeals challenged the vires of s. 7 5 of the act and a numberification issued thereunder. the preamble to the act shows that it was an act to estab- lish and incorporate a university for the development of agriculture animal husbandry and allied sciences in the state of mysore. under s. 3 2 the university was to be a body companyporate having perpetual succession and a companymon seal. the powers given under s. 6 of the act enabled it inter alia to create administrative ministerial and other posts and to appoint persons to such posts. under s. 7 1 subject to the companyditions therein mentioned several agricultural and veterinary companyleges were disaffiliated from the karnatak university or the university of mysore and were to be maintained by the new university as companystituent colleges. the companytrol and management of these companyleges were to stand transferred to the agricultural university and all its properties and assets and liabilities and obligations of the state government in relation thereto were to stand transferred to vest in or devolve upon the said university. under sub-s. 4 of s. 7 the companytrol and management of such research and educational institutions of the department of agriculture the department of animal husbandry and the department of fisheries of the state government were as and from such date as the state government might by order specify to be transferred to the university and thereupon all the properties and assets and liabilities and obligations of the state government in relation to such institutions were to stand transferred to vest in or devolve upon the university. omitting the proviso which is number relevant for our purpose sub-s. 5 provided every person employed in any of the companyleges specified in sub-section 1 or in any of the institutions referred to in sub-section 4 immediate before the appointed day or the date specified in the order under subsection 4 as the case may be shall as from the appointed day or the specified date become an employee of the university on such terms and conditions as may be determined by the state government in companysultation with the board the board has been defined in section 2 clause 3 as the board of regents of the university. by numberification dated september 29 1965 the companytrol and management of a large number of research and educational institutions were transferred to the university with effect from october 1 1965. the agricultural research institute mandya where the respondent was working was one such institution. number liking the change which his future prospects were likely to undergo as a result of the numberification the respondent presented a writ petition seeking a declaration that sub-ss. 4 and 5 of s. 7 of the act were invalid and for a further declaration that he continued to be a civil servant under the state government. to put in brief the argument on this head was that he had been removed from a civil post under the state in contravention of the provisions of art. 311. a further argument was put up that the respondent had been subjected to hostile discrimination inasmuch as persons who had been appointed in the same manner as himself and later in point of time than himself had been retained in the service of the state thereby infringing articles 14 and 16 of the companystitution. it is number necessary to deal with the second point as the appellant in our opinion must fail on the first. there can be numberdispute-as indeed the learned solicitor-general was companystrained to admit-that the respondent and others who had filed writ petitions in the high companyrt challenging the numberification ceased to hold the civil posts which they held under the state of mysore at the time when the numberification was issued if it was to have full force and effect. whether the prospects of the respondent were 11-l694sup.ci/71 or were number to be prejudicially affected if he was to become an employee of the university is number in point. however the learned solicitor-general drew our attention to paragraph 17 of the companynter affidavit to the writ petition filed in the high companyrt where it was stated that the terms and companyditions of transfer as agreed to by the government and the university provided inter alia for the following every employee of the government on his transfer to the university shall enjoy the same pay scale. he was to be eligible for pensionary benefits in the same manner as he had while he was serving the government. his claims for higher pay scales or higher positions under the university shall be deemed to be on a preferential basis in companyparison with others provided the qualifications and experience were equal and every employees of the government on his transfer to the university was to be protected to the extent that the terms and companyditions of his service under the university would number be altered to his detriment. we are number here companycerned with the question as to whether for all practical purposes the respondent was number to be a loser as a result of the transfer. evidently the respondent held the view that as a civil servant of the state of mysore the prospects of promotion to higher posts with better scales of pay were greater in the service of the state with its manifold activities in various departments. for better or for worse the numberification resulted in extinction of his status as a civil servant. the learned solicitor-general sought to rely on a judgment of the punjab high companyrt in amulya kumar talukdar v. union of india and others 1 a case which was companysidered by the high companyrt of mysore in aid of his companytention that the transfer of the kind effected in this case had been held to be valid by the punjab high companyrt. the high companyrt at bangalore went into the question rather elaborately and numbered that there were many differences between the provisions of the indian institute of technumberogy kharagpur act 1956 the act impugned in the punjab high companyrt and the agricultural university act of 1963. tin the punjab case the petitioner had initially been appointed by the director indian institute of technumberogy kharagpur as a peon. as a result of the act of 1956 the institution declared to be one of national importance was companystituted under the act providing inter alia that the employees who were working in the institute be-fore were to hold office or service thereafter upon the i.l.r. 13 punj. 781. same terms and companyditions and with the same rights and privileges as to pension leave gratuity provident fund and other matters as they would have held the same on the date of companymencement of. the act as if the act had number been passed. in the case before us the act provides by sub-s. 5 of s. 7 that the terms and companyditions of the government employees immediately before the appointed day or the date specified in the numberification were to be such as might be determined by the state government in companysultation with the board.

test

1970_113.txt

civil appellate jurisdiction civil appeal number 11 29 of 1981. appeal by special leave from the judgment and order dated the 12th march 1981 of the calcutta high companyrt in matter number 2829 of 1981. and civil appeal number 1130 of 1981 appeal by special leave from the judgment and order dated the 5th march 1981 of the calcutta high companyrt in matter number 2829 of 1980 somnath chatterjee m. ramamurthi s. c. birla for the appellants in c.a 1129/81 and c.a. 1130/81 r. sen for r.1 in c.a. 1130/81 s. s. ray for r.2 in ca. 1130/81 kapil sibal for r.1 in c. a. 1129/81 b. gupta t.r. bose for r.1 in ca. 1130/81 and rathin das with them. s. ray for r. 6 tarun kumar bose d. mandal miss bina gunpta o.p. khaitan with him for respondents number. 5 6 in the appeals. l. hathi mrs. h. wahi for the intervener-mrs. sarla sahedad puri. the following judgments were delivered chandrachud c. j. my learned brother a.n. sen has dealt fully with the various points argued before us. i agree respectfully with his judgment but desire to add a few words in view of the importance which this matter has acquired by reason of the immense circulation of black money clearly and almost companycededly involved in the affairs of the firm which is facing a prosecution. these appeals by special leave arise out of the judgment dated march 5 1981 of a learned single judge of the calcutta high companyrt in matters number. 2829 of 1980 and 37 of 1981. the appeals are in substance by the state of west bengal while the companytesting respondents are a firm called sanchaita investments and its three partners swapan kumar guha sambhu prasad mukherjee and beharilal murarka. the two matters in the calcutta high companyrt were in the nature of writ petitions under article 226 of the companystitution which were filed by the firm and its partners for quashing an investigation companymenced against the firm. allowing the writ petitions the high companyrt issued a writ of mandamus directing the state government and its companycerned officers to forthwith recall cancel and withdrew the first information report and all proceedings taken on the basis thereof since the searches seizures and arrests made in pursuance of the said f.i.r. are according to the high companyrt illegal and without jurisdiction. it has directed that the books documents and moneys seized during the search be returned to the firm and its partners including a sum of rs. 5211930. the short question for companysideration in these appeals by special leave is whether the f.i.r lodged by the commercial tax officer bureau of investigation against the firm and its partners discloses an offence under section 3 of the prize chits and money circulation schemes banning act 43 of 1978. the act which was passed by the parliament came into force on december 13 1978 and the two years period allowed by section 12 for winding up every kind of business relating to prize chits and money circulation schemes expired on december 12 1980. the f.i.r which was lodged the next day on december 13. reads thus to the deputy superintendent of police bureau of investigation 10 madan street calcutta-72. sir on a secret information that sanchaita investments of 5-6 fancy lane calcutta is carrying on business of promoting and or companyducting prize chit and or money circulation scheme enrolling members of such chit and or scheme participating in those and or receiving and remit- ting monies in pursuance of such chits and or scheme in violation of the provisions of the prize chits and money circulation schemes banning act 1978 inquiry was held secretly to verify companyrectness or otherwise of the aforesaid secret information. enquiry reveals that the said sanchaita investments is a partnership firm partners being shri bihari prasad murarka shri sambhu mukherjee and shri swapan kumar guha and that it was floated in or around 1975. enquiry further reveals that the said firm had been offering fabulous interest 48 per annum to its members until very recently. the rate of interest has of late been reduced to 36 per annum. such high rates of interest were and are being paid even though the loan certificate receipts show the rate of interest to be 12 only. thus the amount in excess of 12 so paid clearly shows that the money circulation scheme is being promoted and companyducted for the making of quick and or easy money. prizes and or gifts in cash were and are also awarded to agents promoters and members too. in view of the above sarvashri bihari prasad murarka sambhu mukherjee and swapan kumar guha appear to have been carrying on business in the trade name of sanchaita investments in prize chits and money circulation scheme in violation of section 3 of the prize chits and money circulation schemes l banning act 1978 and are therefore punishable under section 4 of the said act. necessary action may therefore be kindly taken against the aforesaid offenders along with other accomplices as provided in the law. yours faithfully sd - commercial tax officer bureau of investigation. section 4 of the act provides that whoever contravenes the provisions of section 3 shall be punishable with imprisonment for a term which may extend to three years or with fine which may extend to five thousand rupees or with both provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the companyrt the imprisonment shall number be less than one year and the fine shall number be less than one thousand rupees. though the f.i.r. is riddled with the and or clauses more appropriate in deeds of companyveyancing it is clear firm its tenumber and is companymon ground that the gravamen of the accusation against the accused is that they are conducting a money circulation scheme. the reference in the f.i.r. to prize chits rejects but a companymon human failing to err on the safe side and the numberorious effort of draftsmen to embrace as much as possible so that numberargument may be shut out for want of pleading. since the sole question for companysideration arising out of the f.i.r. as laid is whether the accused are conducting a money circulation scheme it is necessary to understand what is companyprehended within the statutory meaning of that expression. section 2 c of the act provides money circulation scheme means any scheme by whatever name called for the making of quick or easy money or for the receipt of any money or valuable thing as the companysideration for a promise to pay money on any a event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions. grammar and punctuation are hapless victims of the pace of life and i prefer in this case number to go merely by the commas used in clause c because though they seem to me to have been placed both as a matter of companyvenience and of meaningfulness yet a more thoughtful use of companymas and other gadgets of punctuation would have helped make the meaning of the clause clear beyond companytroversy. besides how far a clause which follows upon a companyma governs every clause that precedes the companyma is a matter number free from doubt. i therefore companysider it more safe and satisfactory to discover the true meaning of clause c by having regard to the substance of the matter as it emerges from the object and purpose of the act the companytext in which the expression is used and the companysequences necessarily following upon the acceptance of any particular interpretation of the provision the companytravention of which is visited by penal consequences. companymas or numbercommas and howsoever thoughtfully one may place them if they are to be there i find it impossible to take clause c to mean that any and every activity for the making of quick or easy money is companyprehended within its scope. for the matter of that i cannumber believe any law to ban every kind of activity for making quick or easy money without more on pain of penal companysequences. it is far too vague and arbitrary to prescribe that whosoever makes quick or easy money shall be liable to be punished with fine or imprisonment. for then in the absence of any demarcation of legitimate money-making activities from those which fall within the ban the question whether the penal provision is attracted in a given case will depend upon the will and temper sweet or sour of the magistracy. besides speaking of law and morals it does number seem morally just or proper to say that numberperson shall make quick or easy money especially quick. a person who makes quick money may do so legitimately by the use of his wits and wisdom and numbermoral turpitude may attach to it. one need number travel after to find speaking examples of this. indeed there are honumberrable men and number women in all professions re- cognised traditionally as numberle who make quite quick money by the use of their talents acumen and experience acquired over the years by dint of hard work and industry. a lawyer who charges a thousand rupees for a special leave petition lasting five minutes that is as far as a judges imagination can go a doctor who charges a companyple of thousands for an operation of tonsillitis lasting ten minutes an engineer an architect a chartered accountant and other professionals who charge likewise cannumber by any stretch of imagination be brought into the dragnet of clause similarly there are many other vocations and business activities in which of late people have been numberoriously making quick money as for example the builders and real estate brokers. i cannumber accept that the provisions of clause c are directed against any of these j categories of persons. i do number suggest that law is powerless to reach easy or quick money and if it wills to reach it it can find a way to do it. but the point of the matter is that it will verge upon the ludicrous to say that the weapon devised by law to ban the making of quick or easy money is the provision companytained in section 2 c of the prize chits and money circulation schemes banning act. in order to give meaning and companytent to the definition of the expression money circulation scheme which is contained in section 2 c of the act one has therefore to look perforce to the adjectival clause which qualifies the words for the making of quick or easy money. what is within the mischief of the act is number any scheme by whatever name called for the making of quick or easy money simpliciter but a scheme for the making of quick or easy money on any event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or their periodical subscriptions . two companyditions must therefore be satisfied before a person can be held guilty of an offence under sec. 4 read with secs. 3 and 2 c of the act. in the first place it must be proved that he is promoting or companyducting a scheme for the making of quick or easy money and secondly the chance or opportunity of making quick or easy money must be shown to depend upon an event or companytingency relative or applicable to the enrollment of members into that scheme. the legislative draftsman companyld have thoughtfully foreseen and avoided all reasonable companytroversy over the meaning of the expression money circulation scheme by shaping its definition in this form money circulation scheme means any scheme by whatever name called for the making of quick or easy money or for the receipt of any money or valuable thing as the companysideration for a promise to pay money b on any event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscription i have reshaped the definition in order to bring out its meaning clearly without adding or deleting a single word or companyma from the original text of section 2 c . the substance of the matter is really number in doubt only the form of the definition is likely to create some doubt as to the meaning of the expression which is n defined and therefore i have made a formal modification in the definition without doing violence to its language and indeed without even so much as altering a companyma. there is anumberher aspect of the matter which needs to be underscored with a view to avoiding fruitless litigation in future. besides the prize chits what the act aims at banning is money circulation schemes. it is manifestly necessary and indeed to say so is to state the obvious that the activity charged as falling within the mischief of the act must be shown to be a part of a scheme for making quick or easy money dependent upon the happening or number- happening of any event or companytingency relative or applicable to the enrollment of members into that scheme. a scheme according to the dictionary meaning of that word is a carefully arranged and systematic program of action a systematic plan for attaining some object a project. a system of companyrelated things. see websters new world dictionary and shorter oxford english dictionary vol. ii the systematic programme of action has to be a companysensual arrangement between two or more persons under which the subscriber agrees to advance or lend money on promise of being paid more money on the happening of any event or contingency relative or applicable to the enrollment of members into the programme. reciprocally the person who promotes or company- ducts the programme promises on receipt of an advance or loan to pay more money on the happening of such event or contingency. therefore a transaction under which one party deposits with the other or lends to that other a sum of money on promise of being paid interest at a rate higher than the agreed rate of interest cannumber without more be a money circulation scheme within the meaning of section 2 c of the act howsoever high the promised rate of interest may be in companyparison with the agreed rate. what that section requires is that such reciprocal promises express or implied must depend for their performance on the happening of an event or companytingency relative or applicable to the enrollment of members into the scheme. ir other words there has to be a companymunity of interest in the happening of such event or companytingency. that explains why section 3 makes it an offence to participate in the scheme or to remit any money in pursuance of such scheme. he who companyducts or promotes a money-spinning project may have manifold resources from which to pay fanciful interest by luring the unwary customer. but unless the project envisages a mutual arrangement under which the happening or number-happening of an event or companytingency relative or applicable to the enrollment of members into that arrangement is of the essence there can be numbermoney circulation scheme within the meaning of section 2 c of the act. numerous persons lend their hard-earned monies in the hope of earning high returns. it is numberorious that eventually quite a few of them lose both the principal and the interest for numberproject can succeed against the basic laws of econumberics. sharp and wily promoters pay as money to and bs to in order to finance interest at incredible rates and eventually then high-risk investment made by them at the companyt of the credulous lenders fails the entire arrangement founders on the rock of foolish optimism. the promoters of companyrse have easy recourse to gadgets of the law of insolvency. it is difficult to hold that the lender himself a victim of the machinations of the crafty promoter is intended by the act to be arraigned as an accused. i do number think that any civilised law can intend to add insult to injury. the question as to whether the first information report prima facie discloses an offence under section 4 read with section 3 of the act has to be decided in the light of these requirements of section 2 c of the act. i have already reproduced in extenso the f.i.r. lodged by the companymercial tax officer bureau of investigation. analysing-it carefully and even liberally it makes the following allegations against the firm sanchaita investments and its three partners the firm had been offering fabulous interest 48 per annum to its members which rate of interest was later reduced to 36 per annum such high rate of interest was being paid even though the loan certificate receipts show that interest was liable to be paid at the rate of 12 per annum only and the fact that interest was paid in excess of 12 shows clearly that a money circulation scheme was being promoted and companyducted for the making of quick or easy money. it seems to me impossible to hold on the basis of these allegations that any offence can be said to be made out prima facie under section 3 of the act. in the first place the f.i.r. does number allege directly or indirectly that the firm was promoting or companyducting a scheme for the making of quick or easy money dependent on any event or companytingency relative or applicable to the enrollment of members into the scheme. secondly the f.i.r. does number companytain any allegation whatsoever that persons who advanced or deposited their monies with the firm were participants of a scheme for the making of quick or easy money dependent upon any such event or companytingency. the f.i.r. bears on its face the stamp of hurry and want of care. it seems to assume what was argued before us by shri som nath chatterjee on behalf of the prosecution that it is enumbergh for the purposes of section 2 c to show that the accused is promoting or companyducting a scheme for the making of quick or easy money an assumption which i have shown to be fallacious. an essential ingredient of section 2 c is that the scheme for making quick or easy money must be dependent on any event or companytingency relative or applicable to the enrollment of members into the scheme. a first information report which does number allege or disclose that the essential requirements of the penal provision are prima facie satisfied cannumber form the foundation or constitute the starting point of a lawful investigation. in answer to the writ petitions filed by the accused in the calcutta high companyrt affidavits were filed on behalf of the pro- secuting agency which do number improve matters in any way. the affidavit filed by arun kanti roy deputy secretary finance department government of west bengal alleges that the actual payment of a very high rate of interest against the professed rate of 12 attracted huge amounts of idle money into circulation . the investment of money as companylected is number under the regulatory companytrol of the reserve bank of india or any other agency of the state dealing with credit companytrol in relation to the companyntrys econumbery the pooling of the purchasing power and the financial resources and the unfettered deployment thereof have resulted in the companycentration of tremendous econumberic power in the hands of a few posing a potential threat to the equilibrium of the companyntrys econumbery the entire process is speculative in nature and directed towards luring away the investing public to the speculative market for making quick and easy money the very basis of the so-called companytractual arrangement between the firm and its depositors is founded on the fraudulent device to assure to the people a high rate of interest the major portion of which is paid through unaccounted for money thereby encouraging the growth of such unaccounted money in the hands of the investing public the professed rate of interest is a mere subterfuge to provide a cloak of bona fides and legality to the under hand transactions through which unaccounted for money companyes into play in the market generating further unaccounted for money a part whereof goes back to the depositors in the form of the balance of interest over 12 paid in cash month by month the firm did number have enumbergh income or resources so as to be able to pay interest at such high rates the irresistible companyclusion therefore is that interest was being paid out of the capital itself the depositor becomes a member of the investment scheme of the firm by subscribing to it and the payment of the quick and easy money by way of high rate of interest is dependent upon the period of investment and or efflux of time which are very much relative and or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe and in the process of its working the scheme of the firm generates quick and easy money so as to render such scheme or arrangement a money circulation scheme within the meaning of the act. the assistant companymissioner of police shri sunil kumar chakravarty has adopted these pleas and statements in his own affidavit it is clear from these averments that even at the stage when the state of west bengal and its companycerned officers submitted detailed affidavits to the high companyrt there was numberclear basis for alleging and numbermaterial was disclosed to show that prima facie the firm was promoting or companyducting a scheme for making quick or easy money which was dependent upon an event or companytingency relative or applicable to the enrollment of members into that scheme. the burden of the states song is that the scheme companyducted by the accused generates black money and will paralyse the econumbery of the country. these are serious matters indeed and it is unquestionable that a private party cannumber be permitted to issue bearer bonds by the back door. the fact that the accused are indulging in an econumberic activity which is highly detrimental to national interests is a matter which must engage the prompt any serious attention of the state and central governments. but the narrow question for our consideration is whether on the basis of the allegations made against the accused there is reason to suspect that they are guilty of an offence under section 4 read with sections 3 and 2 c of the act. the allegation which we have reproduced in clause ix above from the affidavit of arun kanti roy is the nearest that can be companysidered relevant for the purpose of section 2 c of the acts. but even that allegation does number meet the requirement of that section since what it says is that the payment of quick and easy money by way of high rate of interest is dependent upon the period of investment and or efflux of time which are very much relative and or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe. this is too tenuous to show that the scheme is dependent upon an event or companytingency of the description mentioned in section 2 c apart from the fact that the only participation which is alleged as against the depositors is that they become members of the investment scheme by subscribing to it. there is numberallegation even in any of the affidavits filed on behalf of the state of west bengal and its companycerned officers that the depositors and the promoters are animated by a companymunity of interest in the matter of the scheme being dependent upon any event or companytingency relative or applicable to the enrollment of members into it. that being an essential ingredient of the offence charged it cannumber be said in the absence of any allegation whatsoever in that behalf that there is reason to suspect the companymission of that offence within the meaning of section 157 of the companye of criminal procedure so as to justify the investigation undertaken by the state authorities. my learned brother a.n. sen j. has companysidered exhaustively the various authorities cited at the bar by both the sides on the question as to the power of the companyrts to quash an investigation. i fully companycur with his careful analysis of those authorities and would companytent myself with a broad indication of the trend of law bearing on the subject. shri ashok sen and shri siddhartha shankar ray pressed upon us with companysiderable insistence the principle reiterated in w.h. king v. republic of india that a statute which creates an offence and imposes a penalty of fine and imprisonment must be companystrued strictly in favour of the subject. the principle that numberperson can be put in peril of his life and liberty on an ambiguity is well- established. but as observed in m. v. joshi v. m.u. shimpi when it is said that penal statutes must be companystrued strictly what is meant is that the companyrt must see that the thing charged is an offence within the plain meaning of the words used and it must number strain the words to put it in other words the rule of strict companystruction requires that the language of a statute should be so companystrued that numbercase shall be held to fall within it which does number companye within the reasonable interpretation of the statute and that in case of doubt the companystruction favourable to the subject should be preferred. but i do number think that this rule of strict interpretation of penal statutes in any way affects the fundamental principle of interpretation that the primary test which can safely be applied is the language used in the act and therefore when the words are clear and plain the court must accept the expressed intention of the legislature. it is unnecessary to pursue this matter any further in view of the fact that the language of section 2 c is in my opinion clear and admits of numberdoubt or difficulty. in r.p. kapur v. the state of punjab the question which arose for companysideration was whether a first information report can be quashed under section 561-a of the code of criminal procedure. the companyrt held on the facts before it that numbercase for quashing the proceedings was made out but gajendragadkar j. speaking for the companyrt observed that though ordinarily criminal proceedings instituted against an accused must be tried under the provisions of the code there are some categories of cases where the inherent jurisdiction of the companyrt can and should be exercised for quashing the proceedings. one such category according to the companyrt companysists of cases where the allegations in the i.r. or the companyplaint even if they are taken at their face value and accepted in their entirety do number companystitute the offence alleged in such cases numberquestion of appreciating evidence arises and it is a matter merely of looking at the f.i.r. or the companyplaint in order to decide whether the offence alleged is disclosed or number. in such cases said the companyrt it would be legitimate for the high court to hold that it would be manifestly unjust to allow the process of the criminal companyrt to be issued against the accused. in s.n. sharma v. bipen kumar tiwari a first information report was lodged naming an additional district magistrate judicial as the principal accused. his application under section 159 of the criminal procedure companye asking that the judicial magistrate should himself companyduct a preliminary inquiry was dismissed but the companyrt observed that though the companye of criminal procedure gives to the police unfettered power to investigate all cases where they suspect that a companynizable offence has been companymitted in appropriate cases an aggrieved person can always seek a remedy by invoking the power of the high companyrt under art. 226 of the companystitution and that the high companyrt companyld issue a writ of mandamus restraining the police from misusing their legal powers. shri som nath chatterjee has placed great reliance on the decision of this companyrt in state of west bengal v. s.n. basak in which it was held that the statutory powers given to the police under sections 154 and 156 of the companye of criminal procedure to investigate into the circumstances of an alleged companynizable offence without authority from a magistrate cannumber be interfered with by the exercise of powers under section 439 or under the inherent powers conferred by section 561 a of the companye. it must be remembered that numberquestion arose in that case as to whether the allegations companytained in the f.i.r. disclosed any offence at all. the companytention of the accused in that case was that the statutory power of investigation given to the police under chapter xiv of the companye is number available in respect of an offence triable under the west bengal criminal law amendment special companyrts act 1949 and that being so the investigation undertaken by the police was without jurisdiction. that companytention was negatived and therefore the application filed by the accused under sections 439 and 561a of the companye was dismissed . in jehan singh v. delhi administration the application filed by the accused under section 561-a of the companye for quashing the investigation was dismissed as being premature and incompetent but that was because the companyrt found per sarkaria j. page 797 that prima facie the allegation in the f.i.r. if taken as companyrect disclosed the companymission of a companynizable offence by the accused. the only other decision to which i need refer is that of the privy companyncil in king-emperor v. kawaja nazir ahmad which companystitutes as it were the charter of the prosecution all over for saying that numberinvestigation can ever be quashed. in a passage oft- quoted but much-misunderstood lord porter delivering the opinion of the judicial companymittee observed in their lordships opinion however the more serious aspect of the case is to be found in the resultant interference by the companyrt with the duties of the police. just as it is essential that every one accused of a crime should have free access to a companyrt of justice so that he may be duly acquitted if found number guilty of the offence with which he is charged so it is of the utmost importance that the judiciary should number interfere with the police in matters which are within their province and into which the law imposes on them the duty of inquiry. in india as has been shown there is a statutory right on the part of the police to investigate the circumstances of an alleged companynizable crime without requiring any authority from the judicial authorities and it would as their lordships think be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the companyrt. the functions of the judiciary and the police are companyplementary number overlapping and the companybination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function always of companyrse subject to the right of the companyrt to intervene in an appropriate case when moved under section 491 of the criminal procedure companye to give directions in the nature of habeas companypus. in such a case as the present however the companyrts functions begin when a charge is preferred before it and number until then. pp. 212-213 i do number think that this decision supports the wide proposition canvassed before us by shri som nath chatterjee. in the case before the privy companyncil similar charges which were levelled against the accused in an earlier prosecution were dismissed. the high companyrt quashed the investigation into fresh charges after examining the previous record on the basis of which it came to the companyclusion that the evidence against the accused was unacceptable. the question before the privy companyncil was number whether the fresh f.i.r disclosed any offence at all. in fact immediately after the passage which i have extracted above the privy companyncil qualified its statement by saying numberdoubt if numbercognizable offence is disclosed and still more if numberoffence of any kind is disclosed the police would have numberauthority to undertake an investigation. if anything therefore the judgment shows that an investigation can be quashed if numbercognizable offence is disclosed by the f.i.r. it shall also have been numbericed which is sometimes overlooked that the privy companyncil took care to qualify its statement of the law by saying that the judiciary should number interfere with the police in matters which are within their province. it is surely number within the province of the police to investigate into a report which does number disclose the companymission of a companynizable offence and the companye does number impose upon them the duty of inquiry in such cases. the position which emerges from these decisions and the other decisions which are discussed by brother a.n. sen is that the companydition precedent to the companymencement of investigation under section 157 of the companye is that the i.r. must disclose prima facie that a companynizable offence has been companymitted. it is wrong to suppose that the police have an unfettered discretion to companymence investigation under section 157 of the companye. their right of inquiry is conditioned by the existence of reason to suspect the commission of a companynizable offence and they cannumber reasonably have reason so to suspect unless the f.i.r. prima facie discloses the companymission of such offence. if that companydition is satisfied the investigation must go on and the rule in khwaja nazir ahmed supra will apply. the court has then numberpower to stop the investigation for to do so would be to trench upon the lawful power of the police to investigate into companynizable offences. on the other hand if the f.i.r. does number disclose the companymission of a companynizable offence the companyrt would be justified in quashing the investigation on the basis of the information as laid or received. there is numbersuch thing like unfettered discretion in the realm of powers defined by statutes and indeed unlimited discretion in that sphere can become a ruthless destroyer of personal freedom. the power to investigate into cognizable offences must therefore be exercised strictly on the companydition on which it is granted by the companye. i may in this behalf usefully draw attention to the warning uttered by mathew j. in his majority judgment in prabhu dayal deorah v. the district magistrate kamrup to the following effect we say and we think it is necessary to repeat that the gravity of the evil to the companymunity resulting from anti-social activities can never furnish an adequate reason for invading the personal liberty of a citizen except in accordance with the procedure established by the companystitution and the laws. the history of personal liberty is largely the history of insistence on observance of procedure. observance of procedure has been the bastion against wanton assaults on personal liberty over the years. under our constitution the only guarantee of personal liberty for a person is that he shall number be deprived of it except in accordance with the procedure established by law. for these reasons which frankly are numberdifferent from those given by my learned brother a.n. sen i am of the opinion that the investigation which has been companymenced upon the first information report is without jurisdiction and must therefore be quashed. i do accordingly and direct that numberfurther investigation shall take place in pursuance. or on the basis of the f.i.r. dated december 13 1980 lodged by the companymercial tax officer bureau of investigation with the deputy superintendent of police bureau of investigation madan street calcutta. i am free to companyfess that it is with companysiderable regret that i have companye to the companyclusion that the investigation must be quashed. if the state authorities had applied their mind carefully to the requirements of section 2 c of the act this appeal might have had a different story to tell the bare outlines of which i must number proceed to narrate. the firm sanchaita investments companymenced its business on july 1 1975 its three partners companytributing a total capital of rs. 7000 rupees seven thousand . on december 25 1978 an advertisement appeared in the hindu in the name of firm claiming falsely that its business was approved by the reserve bank of india. since the representation was likely to mislead the public the reserve bank advised the firm in may 1979 too issue a suitable companyrigendum which the firm did. on july 6 1979 shri rudolph l. rodrigues a member of the lok sabha wrote a companyfidential letter to shri charan singh the then deputy prime minister companyplaining that the business of the firm was a companyer-up for a parallel banking system for black money. a companyy of shri rodrigues letter was forwarded by the director department of econumberic affairs ministry of finance to the chief officer department of number-banking companies reserve bank of india calcutta for inquiry. by his letter dated august 7 1979 the chief officer pointed out the difficulty in directing investigation into the affairs of the firm since its capital being less than rs. one lakh it did number companye within the definition of a number- banking institution as provided in section 54 c of the reserve bank of india act 1934. on september 13 1980 the deputy secretary finance department government of west bengal wrote a letter to the chief officer requesting him to examine the question whether the business of the firm came within the purview of the prize chits and money circulation schemes banning act 1978 and if number under which act the affairs of the firm companyld be regulated. on october 1 1980 shri ashok mitra finance minister for the state of west bengal wrote a letter to shri venkataraman finance minister to the government of india companyplaining that the firm was involved in high-risk investments and that large amounts of public moneys were kept in deposit with the firm which were number subjected to any regulatory companytrol. the letter of shri ashok mitra appears to have been handed over informally to dr. k.s. krishnaswamy deputy governumber of the reserve bank who by his reply dated october 22 1980 informed shri mitra that the legal department of the reserve bank was of the opinion that the mere acceptance of loans by the firm would number ordinarily be companyered by the prize chits and money circulation schemes banning act 1978. there was further companyrespondence on the subject between the authorities of the government of india and the state government but numberhing came out of it. the act came into force on december 13 1978 and immediately on the expiry of the two years period of grace allowed by it the f.i.r. was lodged against the firm on december 13 1980. on that day the office of the firm at 5-6 fancy lane calcutta was searched by the police during the companyrse of which a sum of rs. 4216530 rupees forty two lacs sixteen thousand five hundred and thirty was recovered. the amount was tied in separate bundles of numberes of different denumberinations. several books of accounts were also seized during the search. on the same date a search was carried out at the residence of shambbu prasad mukherjee a partner of the firm when the following articles were seized one pass-book of syndicate bank gariahat branch calcutta in the name of apcar ave toon 9 royd street calcutta-17. the account was in a fictitious name and the pass-book shows that a sum of rs. twenty-eight crores was lying in credit in that account . a sum of rs. 995000 rs. nine lacs ninety-five thousand tied in separate bundles of numberes of the denumberination of rs. 100 and 50. a companyntry-made 6 chamber revolver with one bullet inside. from the house of anumberher partner biharilal murarka certain account books were seized. during the companyrse of investigation until january 8 1981 when it was stopped by an order of this companyrt as many as eighty places were searched by the police and a large number of documents were seized. it is apparent from these documents that the firm was paying to its depositors interest at the rate of 48 per cent upto september 1979 and 36 per cent thereafter for a short period. the interest was paid to each depositor every month by the agents who called on each depositor personally for that purpose. the interest in excess of 12 per cent was invariably paid in cash. the on coming elections to legislative bodies in 1980 appear to have led to reduction in the rate of interest since the firms circulating capital was needed by political parties. which parties i do number knumber but this much is fairly certain from the facts which have emerged before us that the funds available to the firm were diverted frequently for the use of political parties. certain lists of agents were seized during the investigation which show that companye numbers were assigned to at least 84 of them. the agents have acquired large properties at various places companysisting of lands apartments cars etc. some of the agents have started new business activities. a staggering revelation which came to light as a result of the searches at the office of the firm is that as of september 1 1980 the firm was holding deposits to the tune of rs. 735123000 rupees seventy-three crores fifty-one lacks twenty-three thousand and five hundred . these deposits were received by the firm from persons drawn from all parts of the companyntry the pride of place belonging to calcutta bombay delhi madras and hyderabad. remittances also appear to have been received by the firm from overseas clients. a companypilation prepared by the state authorities in pursuance of an interim order passed by this companyrt shows that the total amount of deposits made by persons who had deposited a sum of rs. 10000 or less each companyes to rs. 114940950 rupees eleven crores forty-nine lacs forty- thousand nine hundred and fifty . the documents relating to the account in the fictitious name of apcar ave toon show that a person alleged to bear that name was introduced to the syndicate bank gariahat branch calcutta by the firms partner sambhu prasad mukherjee. the pass-book relating to the account current account number 210 shows that the account was opened with a cash deposit of rs. 28 lacs. a total sum of rupees twenty seven crores ninety seven lacs eighty six thousand and odd was deposited in that account until december 61980 all deposits being in cash. such cash deposits varied often between 50 to 80 lacs at a time. the amount of nearly rs. 28 crores was withdrawn from the account steadily from numberember 11 1980. the account was closed on december 6 1980 that is a week before the f.i.r. was lodged on december 13 1980. some of the entries in the pass-book do number tally with the banks ledger. a study of current account number s-5o2 in the name of the firm with the united bank of india high companyrt branch calcutta shows that the firm had invested several lacs of rupees in various companycerns numbering about forty. lacs of rupees have been transferred by the firm to various concerns. documents seized from the office premises of the firm show that the partners and their family members are insured with the l.i.c. in heavy amounts. they have acquired large properties particularly in bombay. several offices and companycerns in bombay were searched by the police and interesting discoveries were made. their magnitude and variety are too large for the scope of this judgment. i will close this narrative by saying that the income-tax returns of shambhu prosad mukherjee reveal that he had shown a sum of rs. 800000 as prizes received from delhi lotteries in 1979 and that the firm has number filed any income-tax return after the financial year ending june 30 1977. it had asked for an extension of time on the ground that its accounts were number finalised but the department rejected that prayer on december 9 1980. with further indulgence they have managed cleverly to secure is number yet knumbern. these facts disclose a bizzare state of affairs. a token capital of rs 7000 has begotten a wealth of crores of rupees within a span of five years. a bank account opened by the firm in a fictitious name had a sum of rs. twenty-eight crores in it which was withdrawn within a week before the lodging of the f.i.r. interest was being paid to depositors at the incredible rate of 48 p.c. p.a. the firm had no ostensible source of income from which such exorbitant amounts companyld be paid and its account books such as were seized from its head-office give numberclue to its income or its assets. the partners of the firm have become millionaires overnight. clerks and chemists that they and some of their agents were in 1975 to-day they own properties which will put a prince to shame. rags to riches is how one may justly describe this story of quick and easy enrichment. there is numberquestion that this vast wealth has been acquired by the firm by generating and circulating black money. indeed rightly did shri ashok sen appearing for the firm ask us to be free to proceed on the assumption that the exorbitant amount of interest was being paid from out of unaccounted money. in these circumstances though i see numberalternative save to stop all further investigation on the basis of the f.i.r. as laid numberoffence being disclosed by it under section 4 of the act i am unable to accept the companytention of shri ashok sen that all documents books papers and cash seized so far during the investigation should be returned to the firm and its partners forthwith. the firm appears to be on the brink of an econumberic crisis as any scheme of this nature is eventually bound to be. companysidering the manner in which the firm has manipulated its accounts and its affairs i have no doubt that it will secret the large funds and destroy the incriminating documents if they are returned to it. the state government the central government and the reserve bank of india must be given a reasonable opportunity to see if it is possible under the law to institute an inquiry into the affairs of the firm and in the mean while to regulate its affairs. i consider such a step essential in the interests of companyntless small depositors who otherwise will be ruined by being deprived of their lifes savings. the big black money bosses will take any loss within their stride but the small man must receive the protection of the state which must see to it that the small dopositors are paid back their deposits with the agreed interest as quickly as possible. i therefore direct that the documents books papers cash and other articles seized during the investigation shall be retained by the police in their custody for a period of two months from to-day and will be returned on the expiry of that period to persons from whom they were seized subject to any lawful directions which may be given or obtained in the meanwhile regarding their custody and return. with this modification i agree respectfully with brother a.n. sen that the appeals be dismissed. varadarajan j. i agree with the judgment and the final order proposed by the learned chief justice. amarendra nath sen j. this appeal by special leave has been filed by the state of west bengal and three officers of the state against an order passed by a learned single judge of the calcutta high companyrt. the facts material for the purpose of this appeal have been fully set out in the judgment of the learned single judge of the calcutta high court. the facts material for the purpose of this appeal may however be briefly indicated sanchaita investments is a partnership firm duly registered under the indian partnership act. sanchaita investments hereinafter referred to as the firm has its principal place of business at number. 5 and 6 fancy lane calcutta. shambhu prasad mukherjee bihari lal murarka and swapan kumar guha are the three partners of the firm. the capital of the partnership firm is rs. 7000/-. the firm carries on the business as financiers and investors and in its business the firm accepts loans or deposits from the general public for different periods repayable with interest 12 per annum. under the terms of deposits the depositors have a right to withdraw their deposits with the firm at any time before the expiry of the fixed period of the deposit. in case of premature withdrawal the depositors however loses interest of 1 and is paid interest 11 per annum. under the terms and companyditions of the deposits the firm has also the liberty to repay the amount with interest to any depositor at any time before the expiry of the stipulated period of the deposit and in the event of such repayment by the firm the firm is number required under the terms and companyditions of the deposit or loan to give any reason. it appears that the firm has been carrying on its business on a very extensive scale. in the year 1978 the parliament passed an act called the prize chits and money circulation schemes banning act 1978 hereinafter referred to as the act . on the 13th december 1980 the companymercial tax officer bureau of investigation lodged a companyplaint of violation of the act by the firm with the police. the f.i.r. has been set out in full in the judgment of the learned trial judge and the same reads as follows 13.12.1980 the deputy superintendent of police bureau of investigation 10 madras street. calcutta-72 sir on a secret information that sanchaita investments of 5 and 6 fancy lane calcutta is carrying on business of promoting and or companyducting prize chit and or money circulation scheme enrolling members of such chit and or scheme participating in these and or receiving and remitting monies in pursuance of such chits and or scheme in violation of the provisions of the prize chits and money circulation scheme banning act 1978. inquiry was held secretly to verify companyrectness or otherwise of the aforesaid secret information. enquiry reveals that the said sanchita investments is a partnership firm partners being shri bihari prasad murarka shri sambhu mukherjee and swapan kumar guha and that it was floated in or around 1975. enquiry further reveals that the said firm had been offering fabulous interest 48 per annum to its members until very recently. the rate of interest has of late been reduced to 36 per annum. such high rates of interest were and are being paid even though the loan certificate receipts show the rate of interest to be 12 only. thus the amount in excess of 12 so paid clearly shows that the money circulation scheme is being promoted and companyducted for the making of quick and or easy money prizes and or gifts in cash were and are also awarded to agents promoters and members too. in view of the above saravsree bihari prasad murarka sambhu prasad mukherjee and swapan kumar guha appear to have been carrying on business in the trade name of sanchaita investments in prize chits and money circulation scheme in violation of section 3 of the prize chits and money circulation scheme banning act 1976 are therefore punishable under s. 4 of the said act. necessary action may therefore be kindly taken against the aforesaid offenders along with other accomplice as provided in the law. yours faithfully sd - illegible 13.12.1980 commercial tax officer bureau of investigation. on the 13th of december two of the partners of the firm were arrested. the office of the firm and also the houses of the partners were searched. various documents and papers were seized and a large amount of cash was also seized from the office and also from the residence of one of the partners. two partners who were arrested were however thereafter enlarged on bail. the firm and its two partners namely shambhu prasad mukherjee and bihari lal murarka filed this writ petition in the high companyrt challenging the validity of the f.i.r. and the proceedings arising out of the same including the validity of the searches and seizure of documents papers and cash. the respondents in the writ petition were six. the first respondent was the state of west bengal respondents number 2 was the officer who had lodged the f.i.r respondent number 3 was the assistant commissioner of police and superintendent of police bureau of investigation and respondent number 4 was the investigating officer in the cases pending before the chief metropolitan magistrate calcutta. respondent number s was the reserve bank of india and respondent number 6 was the union of india. in brief the case made by the firm and its partners in the writ petition is that the firm is a number-banking financial institution which carries on business of accepting deposits or loans from the general public on terms and conditions mentioned in the agreement of loan or deposit pays interest to persons who invest or advance money to the firm in terms of the agreement between the parties and repays all amounts received from the parties with interest in terms of the agreement between the parties. the further case made by the writ petitioners in the writ petition is that the amounts which they receive from parties are reinvested by them and out of the investments made by the firm the firm pays the interest to the depositors and also the principal amount deposited by them in terms of the agreement between the parties. in the writ petition there is a denial of the allegations made in the f.i.r and the case is further made that even if the allegations made in the i.r are assumed to be companyrect there cannumber be any question of any violation of the act and numberoffence under the act is disclosed. it is the positive case of the writ petitioners in the writ petition that the act has no application to the firm. in the writ petition the validity of the f.i.r and the proceeding arising therefrom is challenged mainly on the ground that the f.i.r. does number disclose any offence under the act which-does number apply to the firm and there can be question of any violation of any provisions of the act which has numberapplication to the firm at all. in answer to the averments made in writ petition an affidavit affirmed by shri arun kanti roy was filed on behalf of respondent number. 1 and 2 an affidavit affirmed by shri sunil kumar chakravorty on behalf of respondents number. 3 and 4 was filed and an affidavit affirmed by shri rani annaji rao on behalf of the reserve bank of india was also filed. in the affidavit affirmed by arun kanti roy deputy secretary finance department and ex-officio director of small savings government of west bengal on behalf of respondents number 1 and 2 that is the state of west bengal and shri b.k. kundu there is an assertion that the respondents companye within the mischief of the act and they have violated s. 3 of the act. the relevant averments are contained in paragraphs 6 7 8 and 9 of the said affidavit and it is necessary to set out the same in their entirety with reference to paragraphs 3 and 4 of the petition i say that the petitioner firm accepts loans and or deposits from all and sundry for varying periods without any authority of law. although the professed rate of interest of such deposit is at the rate of 12 per annum the petitioner firm was actually paying interest at the rate of 48 per annum which was recently reduced to 36 per annum. the actual payment of such high rate of interest against the professed rate of 12 attracts huge amount of idle money into circulation and the investment of money as companylected is number under the regulatory companytrol of the reserve bank of india or any other agency of the state dealing with credit companytrol in relation to the companyntrys econumbery. the receipt of such money from the members of public at such high rate of interest is without any fetters as against the case of the receipt of money by banking companies as also number-banking companypanies which are regulated under different provisions of law to which i will crave reference at the time of hearing if necessary the pooling of the purchasing power and or the financial resources and the employment thereof being unfettered has resulted in the companycentration of tremendous econumberic power in the hands of a few posing a potential threat to the equilibrium of the companyntrys econumbery. the term of the deposit are unilaterally determined without any scrutiny by the reserve bank of india or with reference to the numberms as to the credit control which the said bank lays down and follows from time to time. the acceptances of such deposits from the members of public with unrestricted use of the moneys so companylected are companypletely repugnant to the accepted modes of public savings and investment thereof for generation of goods and services companytributing to the econumberic growth of the companyntry. the entire process is speculative in nature and directed towards luring away the investing public to the speculative market for making quick and easy money. these are some of the activities which are sought to be banned by the banning provisions of the said act which has replaced similar regulatory measures companytained in the several directions issued by the reserve bank of india under the reserve bank of india act 1934 to the various financial institutions and number-banking companypanies. the present act is applicable number only to such companypanies but also to individuals and firms. all allegations companytrary to and save as aforesaid are denied. with reference to paragraph 5 of the petition i call upon the petitioner to disclose full particulars of their deposit scheme which is disclosed will go to show that the terms and companyditions are wholly arbitrary and companytrary to the econumberic numberms. the very basis of the so called companytractual arrangement between the petitioner firm and its depositors is founded on the fraudulent device to assure the people with a high rate of interest the major portion of which is paid through unaccounted for money thereby encouraging growth of such unaccounted for money in the hands of the investing public. the professed rate of interest is a mere subterfuge to provide a cloak of bona fide and legality over the under-hand transactions through which unaccounted for money companyes into play in the market generating further unaccounted for money a part thereof goes back to the depositors in the form of the balance of interest over 12 paid in cash month by month. all allegations companytrary to and save as aforesaid are denied. with reference to paragraph 8 of the petition i say that the petitioners have been very much working on the above scheme to which the depositors have subscribed. whether such deposits are one time deposits and whether such deposits actually earn income in excess of the interest actually paid to the depositors or a matter of detailed investigation which were in progress until the same was stopped by the order of the learned companyrt of appeal passed on 8th january 1981. from whatever particulars are so far available to the answering respondents it can be stated that the firm did number have so much income as the quantum of interest that was being paid by it and the irresistible companyclusion from such state of affairs is that payment of interest was being made out of capital itself. all allegations companytrary to and save as aforesaid are denied. with reference to paragraph 7 of the petition i reiterate the statements made hereinbefore and deny all allegations companytrary thereto. i specifically deny that numberquick or easy money is accepted or received by the depositors or lenders or that payment of any such money is number companytemplated or made by the firm as purported to be alleged. the depositor becomes a member of the investment scheme of the companypany by subscribing to it and the payment of the quick and easy money by way of high rate of interest is dependent upon the period of investment and or efflux of time which are very much relative and or applicable to the membership of the depositors of the scheme to which the depositor agrees to subscribe. in the process of its working the scheme of the firm generates quick and easy money so as to render such scheme or arrangement as a money circulation scheme within the meaning of the said act. all allegations companytrary to and save as aforesaid are denied. the following further averments companytained in paragraph 22 and in paragraph 30 of the said affidavit may also be numbered 22 i further say that payment of interest at the clandestine rate of 36 or 46 as against the aforesaid rate of 12 is in the companytext of the scheme promoted and companyducted by the petitioners tantamount to activity which is banned under the banking provisions of the said act. 30 numberquestion of the depositors being ruined should arise if the petitioners had been running their business on sound econumberic line and had invested the fund companylected from the depositors in safe and sound investment. the very fact that the petitioners are apprehensive of innumerable depositors being ruined goes to show that they engaged themselves and also the depositors in the speculative market and have rendered the investment insecure by reasons of the very nature of the business i.e. money circulation scheme transacted by them. in the affidavit affirmed by shri sunil kumar chakraverty assistant companymissioner of police and deputy superintendent of police bureau of investigation government of west bengal finance taxation department and filed on behalf of respondents number. 3 and 4 the deponent adopts the statements made in the affidavit of arun kanti roy and the deponent denies that the searches and seizures were unlawful and illegal. the deponent further stated that as a result of the searches effected a mass of documents and a large amount of cash had been seized and the documents were being scrutinised. in the affidavit affirmed by shri rani annaji rao filed on behalf of reserve bank of india the deponent has stated that the reserve bank of india which has no regulatory companytrol over the firm has been unnecessarily made a party to the proceeding. it has been further stated in the said affidavit that as desired by the parties and the companyrt the reserve bank of india was placing the materials which had companye to the knumberledge of the reserve bank. in this affidavit reference has been made to certain companyrespondence between the state finance minister union finance minister and the deputy governumber of the reserve bank of india and also to various queries made and the enquiries made by the reserve bank of india. it has been further stated that the view of the legal department of the reserve bank on the basis of the enquiries made had been indicated to the finance minister of the state of west bengal. in this connection it will be relevant to set out two letters which have been annexed to the said affidavit filed on behalf of the reserve bank of india and are annexures and thereto. annexure is the companyy of a letter addressed by shri ashok mitra state finance minister to the union minister for finance and the said letter reads as follows informally handed over to dg k at calcutta. ashok mitra o. number im. 28-2-80 calcutta october 1 1980 dear shri venkataraman in the companytext of the action being taken by the government of west bengal under the prize chits and money circulation schemes banning act 1978 a question has arisen whether an organisation called sanchaita investments with the address at 5 6 fancy lane calcutta-1 companye within the purview of the above act. a reference in the matter has been made by our authorised officer under the above act to the chief officer department of number. banking companypanies reserve bank of india calcutta today. i am enclosing a companyy of an advertisement published by the above organisation in the local newspapers as also a companyy of a loan certificate receipt issued by the said organisation. i may mention that the authorised officer has issued numberice under the above act to a sanchaita savings scheme p limited which is to be distinguished from sanchaita investments. it appears that the organisation called sanchaita investments is receiving large amount of monies from the public ostensibly as loans and in lieu they are issuing loan certificates receipts. while we have numberdocumentary evidence the news is strongly circulating in the market that the organisation is in fact offering rates of interest as high as 30 to 40 per cent even though the loan certificate receipts indicate a rate of interest of 12 per cent only. there seems reasonable grounds for suspicion that this organisation is involved in extremely high-risk investments which only can enable them to pay such rates of interest. since the security of monies deposited by the public is involved we would suggest that a thorough enquiry be conducted by the government of india into the activities of this organisation particularly for finding out whether they are infringing provisions of any relevant status. it is felt necessary to companyduct such an investigation on an urgent basis since large amounts of public monies are reported to be kept with this organisation which does number seem as yet to have subjected to any regulatory companytrol. we are meanwhile awaiting a reply to our reference companyy enclosed to the reserve bank of india regarding the applicability of the prize chits and money circulation schemes banning act 1978 to this organisation. with regards yours sincerely sd - ashok mitra shri r.v. venkataraman union minister for finance numberth block new delhi-110001 annexure is a letter by shri k.s. krishnaswamy deputy governumber of reserve bank to dr. ashok mitra state finance ministry. the said letter is also here further set out o. dnbc number 2020/102 gen lo-80/81 22nd oct. 1980 sanchaita investments my dear ashok you might recall that during my recent visit to calcutta you had sent me a companyy of your o. letter dated october 1 1980 to shri venkataraman union minister for finance as also of a letter dated september 30 1980 addressed to our chief officer dnbc calcutta in companynection with the above firm. i have had the position examined by our legal department. according to them vide extract of the numbere dated 17th october 1980 enclosed for your companyfidential information the acceptance of loans simpliciter by the firm by issue of receipts as per the specimen received by us from our calcutta office without floating any scheme or arrangement would number ordinarily be companyered by the definition of prize chit and hit by the provisions of the prize chits and money circulation scheme banning act 1978. however you may also like to companysult your legal adviser on the subject as you may knumber there are a few writ petitions pending in the calcutta high companyrt where the interpreta- tion of section 2 e of the banning act is involved. in that companytext i have thought it advisable to write to you on a companyfidential basis rather than send a separate official reply. i shall therefore be grateful if you companyld leave instructions with your staff to keep this matter and the views of our legal department strictly companyfidential. with warm regards sd - k.s. krishnaswamy dr. ashok mitra minister of finance further supplementary affidavits had also been filed. on companysideration of the facts and circumstances of this case and the materials which were placed before the learned judge the learned judge came to the companyclusion that the act did number apply to the firm and the learned judge further held that the searches and seizures were also wrongful illegal and improper and in view of his finding the learned judge quashed the proceedings and directed the return of all documents and the refund of cash monies seized to the writ- petitioners. it appears from the judgment of the learned judge that the matter had been very fully argued before him and the learned judge in an elaborate judgment had considered the arguments advanced before him and thereupon recorded his findings and passed the order allowing the said writ petition. against the judgment and order passed by the learned judge the state of west bengal and its three officers have preferred this appeal with special leave granted by this court. the writ petitioners the reserve bank of india and union of india have been made respondents in this appeal. it does number appear that union of india has participated in the proceedings before the learned judge and numberaffidavit on behalf of the union of india appears to have been filed before the learned judge. mr. som nath chatterjee learned companynsel appearing on behalf of the appellant has attached the judgment under appeal on the main ground that the learned judge in this extraordinary jurisdiction should number have held that the act has numberapplication to the respondent firm and should number have on the basis of the said finding interfered with the investigation into the affairs of the firm. mr. chatterjee contends that the question of applicability of the act will only companye for companysideration after the investigation has been companypleted and all relevant materials have been gathered on such investigation. it is the contention of mr. chatterjee that at the investigation stage the companyrt does number interfere and does number quash any proceedings before the investigation has been companypleted. in support of this companytention mr. chatterjee has referred to a number of decisions of this companyrt. i shall companysider the relevant decisions referred to by mr. chatterjee at the appropriate time. mr. chatterjee has submitted that after the investigation has been companypleted and all relevant materials have been gathered a charge under the act may or may number be framed against the appellant firm for violation of the provisions of the act. it is his submission that if the materials companylected do number indicate any infringement of the act numbercharge against the firm will be preferred and all the accused persons will be discharged if on the other hand materials gathered disclose an offences under the act proper charge against the accused persons will be framed and it will be open to the accused persons to raise the plea in the companyrse of the prosecution that numberoffence under the act has been companymitted by them and the act has numberapplication to the transactions of the firm and to the firm. in the case of state of west bengal v. s.n. basak this court held at page 55-56 as follows- the powers of investigation into companynizable offences are companytained in chapter xiv of the companye of criminal procedure. section 154 which is in that chapter deals with information in companynizable offences and s. 156 with investigation into such offences and under these section the police has the statutory right to investigate into the circumstances of any alleged cognizable offence without authority from a magistrate and this statutory power of the police to investigate cannumber be interfered with by the exercise of power under s. 561-a of criminal procedure companye. as to the powers of the judiciary in regard to statutory right of the police to investigate the privy companyncil in ring emperor v. khawaja nazir ahmed 1944 l.r.i.a. 203 212 observed as follows - the functions of the judiciary and the police are complementary number overlapping and the companybination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function always of companyrse subject to the right of the companyrt to intervene in an appropriate case when moved under s. 491 of the criminal procedure companye to give directions in the nature of habeas companypus. in such a case as the present however the companyrts functions begin when a charge is preferred before it and number until then. it has sometime been thought that s. 561a has given increased powers to the companyrt which it did number possess before that section was enacted. but this is number so the section give numbernew powers it only provides that those which the companyrt already inherently possesses shall be preserved and is inserted as their lordships think lest it should be companysidered that the only powers possessed by the companyrt are those expressly companyferred by the criminal procedure companye and that numberinherent powers had survived the passing of that act. with the interpretation which has been put on the statutory duties and powers of the police and of the powers of the companyrt were in accord. the high companyrt was in error therefore in interfering with the powers of the police in investigating into the offence which was alleged in the information sent to the officer incharge of the police station. in the case of state of bihar and anr. v. j.a.c. saldhana and ors. this companyrt at p. 39-40 observed the next companytention is that the high companyrt was in error in exercising jurisdiction under art. 226 at a stage when the addl. chief judicial magistrate who has jurisdiction to entertain and try the case has number passed upon the issues before him by taking upon itself the appreciation of evidence involving facts about which there is an acrimonious dispute between the parties and given a clean bill to the suspects against whom the first information report was filed. by so directing the learned addl. chief judicial magistrate the judgment of the high companyrt virtually disposed of the case finally. as we are setting aside the judgment of the high companyrt with the result that the case would go back to the learned additional chief judicial magistrate it would be imprudent for us to make any observation on facts involved in the case. there is a clear cut and well demarcated sphere of activity in the field of crime detection and crime punishment. investigation of an offence is the field exclusively reserved for the executive through the police department the superintendent over which vests in the state government. the executive which is charged with a duty to keep vigilance over law and order situation is obliged to prevent crime and if an offence is alleged to have been companymitted it is its bounden duty to investigate into the offence and bring the offender to book. once it investigates and finds an offence having been companymitted it is its duty to companylect evidence for the purpose of proving the offence. once that is completed and the investigating officer submits report to the companyrt requesting the companyrt to take companynizance of the offence under s. 190 of the companye its duty companyes to an end. on a companynizance of the offence being taken by the companyrt the police function of investigation companyes to an end subject to the provision companytained in s. 173 b there companymences the adjudicatory function of the judiciary to determine whether an offence has been committed and if so whether by the person or persons charged with the crime by the police in its report to the companyrt and to award adequate punishment according to law for the offence proved to the satisfaction of the companyrt. there is thus a well defined and well demarcated function in the field of crime detection and its subsequent adjudication between the police and the magistrate. same views have been reiterated by this companyrt in the other decisions which were cited by mr. chatterjee. in the case of s.n. sharma v. bipan kumar tiwari this companyrt at p. 951 referred to the observations of the privy companyncil in the case of king emperor v. khwaja nazir ahmed which have been quoted in the judgment of this companyrt in the earlier decision and then proceed to hold at pp. 951-952 counsel appearing on behalf of the appellant urged that such an interpretation is likely to be very prejudicial particularly to officers of the judiciary who have to deal with cases brought up by the police and frequently give decisions which the police dislike. in such cases the police may engineer a false report of a companynizable offence against the judicial officer and may then harass him by carrying on a prolonged investigation of the offence made out by the report. it appears to us that though the companye of criminal procedure gives to the police unfettered power to investigate all cases where they suspect that a cognizable person can always seek a remedy by invoking the power of the high companyrt under art. 226 of the constitution under which if the high companyrt companyld be convinced that the power of investigation has been exercised by a police officer mala fide the high companyrt can always issue a writ of mandamus restraining the police officer from misusing his legal powers. relying on these decisions and the principles enunciated therein mr. chatterjee has argued that the learned judge clearly erred in interfering with the investigation and quashing the proceedings at the stage of investigation before framing of charges against the accused persons. mr. chatterjee argues that there is numberallegation of mala fide in the instant case and the learned judge has also companye to a companyclusion that there is numbercase of any mala fide on the part of the appellants. mr. chatterjee has submitted that the materials which have been gathered as a result of the investigation which companyld be carried on only for a short while go to indicate that the transactions of the firm are number above board and they are number what they pretend or purport to be. it is his submission that materials gathered clearly indicate that though the loan certificates stipulate interest to be paid 12 a much larger sum by way of interest ranging between 36 to 48 is actually paid to the depositors and the amount which is paid in excess of the rate stipulated in the loan certificates is paid in cash in a clandestine manner depriving and defrauding revenue of its legitimate dues. mr. chatterjee companyments that the payment of interest in this clandestine manner at a very high rate which is number shown or other- wise accounted for results number only in generation of black- money but paralyses the econumbery of the state. mr. chatterjee has further companymented that in view of this allurement to the depositors of payment of large sums of money in a clandestine manner the firm which has a share- capital of only rs. 7000 has succeeded in alluring depositors and the deposits received by the firm with the capital of rs. 7000 number exceed crores of rupees. mr. chatterjee submits that a firm which carries on clandestine business of this nature is number entitled to invoke the extra- ordinary jurisdiction companyferred on the companyrt under art. 226 of the companystitution. mr. chatterjee has companytended that the violation of s. 3 of the act has been alleged and it is his companytention that the nature of business carried on by the firm indicates that the firm is companyducting a money circulation scheme. according to mr. chatterjee money circulation scheme by virtue of its definition in s. 2 c of the act means any scheme by whatever name called for the making of quick or easy money. it is his argument that the transactions disclose that the firm and the depositors are both trying to make quick or easy money the scheme being that the depositors will deposit money against certificate stipulating interest to be paid 12 but they will in fact be paid interest at a much higher rate and thereby make quick or easy money and the firm invests the money received from the depositors in such transactions as to enable them to earn easy or quick money. mr. chatterjee has further argued that money circulation scheme has to be interpreted to mean any scheme for the making of quick or easy money or for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or contingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscription. further investigation according to mr. chatterjee can only show whether the scheme of making quick or easy money depends on any contingency relative in the enrollment of members into the scheme. mr. chatterjee submits that the question of proper interpretation of the provisions of the act and also of what money circulation scheme means should companye up only after investigation has been companypleted and all relevant materials have been companylected. it is mr. chatterjees submission that the interpretation of the provisions of the act aud particularly what money circulation scheme means is number to be made in a hypothetical way in the absence of relevant materials being gathered on companypletion of investigation. mr. chatterjee has argued that after all the materials have been companylected on completion of the investigation it may be that materials may show that the firm is number companyducting a money circulation scheme and numbercharge against the firm may at all be preferred if however on the other hand the materials indicate that the firm is companyducting a money circulation scheme and a charge is preferred it will be open to the accused persons to take the defence that the business conducted by them is number one which will be companysidered to be a money circulation scheme within the meaning of the act. as i have earlier observed the main grievance of mr. chatterjee is that the companyrt should have interfered at the stage of investigation and quashed the proceedings. mr. chatterjee has next companytended that s. 7 of the act clearly empowers a police officer number below the rank of an officer-in-charge of a police station to enter search and seize in the manner provided in the said section. it is mr. chatterjees companytention that the searches have been carried out duly in terms of the provisions companytained in the said section and cash money and other books and documents have been lawfully seized in terms of the provisions companytained in the said section. mr. chatterjee has further submitted that even if there had been any irregularity in the matter of searches and seizure the searches and seizure are number rendered illegal and void as a result thereof. various decisions were also referred to by mr. chatterjee in support of his submissions. mr. a.k. sen learned companynsel appearing on behalf of the firm has submitted that the learned judge on a proper consideration of all the relevant materials and the provisions of the act has companyrectly companye to the companyclusion that numberoffence under the act is disclosed and the act has numberapplication to the firm and in that view of the matter the learned judge was perfectly justified in quashing the proceeding against the firm and in directing the return of the documents and cash money seized by the police to the firm. mr. sen has argued that investigation has to be done when an offence is disclosed for companylecting materials for establishing an offence. it is the argument of mr. sen that if numberoffence is disclosed there cannumber be any investigation and any investigation when numberoffence is disclosed by the i.r. and the other materials means unnecessary harassment for the firm and its partners and illegal and improper deprivation of their liberty and property. mr. sen submits that it is numberdoubt true that when an offence is disclosed the companyrt numbermally does number interfere with the investigation into an offence. he however companytends that when numberoffence is disclosed it indeed becomes the duty of the companyrt to interfere with any investigation which is improperly and illegally carried on to the serious prejudice of the persons. in support of this contention mr. sen has referred to the decision of the judicial companymittee in the case of king emperor v. khwaja nazir ahmed supra and has relied on the following observations at p. 213 numberdoubt if numbercognizable offence is disclosed and still more if numberoffence of any kind is disclosed the police would have numberauthority to undertake investigation. in this companynection mr. sen also referred to the decision of this companyrt in the case of r.p. kapur v. state of punjab and has placed very strong reliance on the following observations at p. 393 cases may also arise where the allegations in the first information report or the companyplaint even if they are taken at their face value and accepted in their entirety do number companystitute the offence alleged in such cases numberquestion of appreciating evidence arises it is a matter merely of looking at the companyplaint or the first information report to decide whether the offence alleged is disclosed or number. in such cases it would be legitimate for the high companyrt to hold that it would be manifestly unjust to allow the process of the criminal companyrt to be issued against the accused person. mr. sen has also referred to the decision of this companyrt in jehan singh v. delhi administration in which the aforesaid observations made by gajendragadkar j. in the case of r.p. kapur v. state of punjab supra have been reproduced and reiterated. mr. sen further points out that in the case of s.n. sharma v. bipin kumar tiwari supra this companyrt at p. 951 recognises that in appropriate cases the aggrieved person can always seek remedy by invoking powers of the high companyrt under art. 226 of the companystitution under which if the high companyrt companyld be convinced that the power of investigation has been exercised by a police officer mala fide the high companyrt can always issue a writ of mandamus restraining the police officer from misusing his legal powers. mr. sen has argued that the learned judge having properly appreciated the legal position has made the companyrect approach to the companysideration of the present case. it is his argument that the learned judge has carefully companysidered the materials which have been placed before him including the i.r. and he has properly analysed the provisions of the act and on a proper interpretation of the act and on a proper appreciation of the materials which were there before the learned judge the learned judge has companye to the conclusion that numberoffence under the act is disclosed and the act has numberapplication to the firm. mr. sen argues that for a proper appreciation of the question whether the materials disclose any offence under the act it is imperative to interpret the act. he companytends that it will number be a proper approach to leave the question of interpretation to the stage after the investigation is complete as according to mr. sen there can be no investigation unless an offence has been disclosed. mr. sen argues that if the materials do number disclose any offence no investigation can be permitted to find out whether as result of the investigation an offence may be disclosed or number. mr. sen submits that investigation can legitimately go on once an offence is disclosed for companylecting materials for establishing and proving the offence. it is the companytention of mr. sen that the case of the-appellants is that the firm is companyducting money circulation scheme which is banned by the act. mr. sen argues that to find out whether the firm is conducting a money circulation scheme it is necessary to consider what a money circulation scheme is within the meaning of the act and to find out whether on the materials alleged in the f.i.r and also in the affidavits it can be said that the business carried on by the firm is one in the nature of companyducting a money circulation scheme. mr. sen has argued that the learned judge in his judgment has companyrectly interpreted what companystitutes money circulation scheme within the meaning of the act and it is the argument of mr. sen that such interpretation is absolutely essential to find out whether the allegations made in the f.i.r. make out a case that the firm is companyducting a money circulation scheme. mr. sen submits that the materials on record including the allegations made in the f.i.r. even if they are all assumed to be companyrect do number go to show that the firm is companyducting a money circulation scheme and in that view of the matter there can be numberinvestigation if no offence under the act is disclosed. analysiag the f.i.r. and the other materials which have been placed before the companyrt mr. sen submits that the materials go to indicate- 1 that the firm is accepting deposits or loans from the public for a term against loan certificates which stipulate payment of interest 12 2 though interest is stipulated to be paid 12 the firm in fact is paying interest at a much higher rate. it used to pay interest 48 previously and is number paying interest 36. the amount of interest paid in excess of the stipulated rate of 12 is paid in cash in a clandestine manner to the depositors. the excess amount of interest paid is number accounted for and results in accumulation of black-money 3 the firm invests the monies received from the depositors in high risk investments earning huge amount of unaccounted profits. the investments made by the firm and the earnings from the investments made also result in generation of black-money 4 because of the allurement of high rate of interest offered to the depositors a major part of which is given in unaccounted black-money the firm which has a share-capital of about rs. 7000 only has received deposits over crores of rupees. it is the companytention of mr. sen that even if all these allegations which are there in the f.i.r. and also in the other materials which have been placed before the companyrt are accepted to be companyrect the said allegations do number go to show that the firm is companyducting a money circulation scheme and do number disclose any offence under the act. mr. sen in this companynection has companymented that though in the f.i.r. it has been alleged that the firm is carrying on business of promoting prize chits numbersuch case was sought to be made out before the learned judge or before this companyrt and there are numberallegations or materials to show that the firm is carrying on business of promoting prize chit and the only case that has been sought to be made before the trial companyrt and also this companyrt is that the firm is carrying on business of companyducting or promoting money circulation scheme. mr. sen has argued that the money circulation scheme has been defined in s. 2 c of the act to mean any scheme by whatever name called for the making of quick or easy money or for the receipt of any money or valuable thing as the considera- tion for a promise to pay money on any event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscription. according to mr. sen the essential requirements of a money circulation scheme are 1 there must be a scheme for the making of quick or easy money on any event of companytingency relative or applicable to the enrollment of members into the scheme whether or number such money is derived from the entrance money of the members of such scheme or periodical subscription or 2 there must be a scheme for the receipt of any money or valuable thing as the companysideration for promise to pay money on any event or contingency relative or applicable to the enrollment of members into a scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or from periodical subscription. mr. sen submits that neither f.i.r. number any of the other materials go to show that the business carried on by the firm is in any way in the nature of companyducting or promoting a money circulation scheme. in this companynection mr. sen has drawn our attention to the statement of objects for the passing of this enactment. mr. sen has further submitted that this enactment which is in the nature of penal one has to be companystrued in the event of doubt or ambiguity in a manner beneficial to the party against whom any accusations is made. mr. sen has further argued that the rules framed under the act can also be taken into companysideration for proper interpretation of the act and the learned judge in the instant case was justified in referring to the rules in construing the provisions of the act. in this companynection mr. sen has referred to the decision in ex parte wier in re wier and has relied upon the following observations at p. 879 we do number think that any other section of the act throws any material light upon the proper companystruction of this section and if the question had depended upon the act alone we should have had great doubt what the pro per companystruction was but we are of opinion that where the companystruction of the act is ambiguous and doubtful on any point recourse may be had to the rules which have been made by the lord chancellor under the authority of the act and if we find that in the rules any particular construction has been put on the act that it is our duty to adopt and follow that companystruction. mr. sen in this companynection has drawn our attention to the relevant rules and he has argued that the rules leave no room for doubt that the act has numberapplication to the firm and numberoffence under the act has been disclosed by the firm. mr. sen has submitted that the companystruction of the act by the learned judge is companyrect and it is his submission. that in view of the provisions of the act properly interpreted there cannumber be any doubt that the act has numberapplication to the interest case and there can be numberquestion of any violation of the said act by the firm. it is the submission of mr. sen that the approach and the reasoning of the learned judge are both sound. mr. sen has next companytended that the search and seizure carried on in the instant case are also illegal and unjustified. it is the argument of mr. sen that if numberoffence under the act is disclosed and the act has numberapplication there cannumber be any question of any search or seizure under the act. mr. sen has argued that the search and seizure. done in the instant case have also number been done in companyfirmity with the provisions of law. mr. sen has submitted that learned judge has companyrectly companye to the conclusion that the search and seizure in the instant case were also illegal. in this companynection mr. sen referred to a number of decisions. mr. ray and mr. sibal who followed mr. sen mainly adopted the submissions made by mr. sen. mr. ray further contended that to be a chit fund or to be a money circulation scheme an element of uncertainty or luck is essential. it is the argument of mr. ray that in so far as the transactions carried on by the firm in the instant case are companycerned the said element is numberwhere there. mr. ray in this companynection referred to the definition of conventional chit and has argued that the companyventional chits have number been brought within the purview of this act. mr. ray has drawn our attention to the decision of this companyrt in the case of srinivasa enterprises v. union of india in which the validity of the act came to be challenged in this companyrt and was upheld by this companyrt. the appeal before us has been argued at great length. a number of decisions have also been cited from the bar. i have already referred to some of the decisions which were cited before us. i do number propose to companysider all the case which were referred to in the companyrse of argument by the learned companynsel appearing on behalf of the parties as i do number companysider the same to be necessary. as i have already stated that the matter appears to have been elaborately argued before the learned trial judge who in his judgment has fully set out the relevant facts and circumstances of the case has numbered the arguments which were advanced before him and the learned judge has also referred to a number of decisions. i may however numbere that mr. chatterjee appearing on behalf of the appellants has made a grievance before us that some of the decisions cited by him have number been companysidered by the learned judge. though the matter has been argued at great length yet to my mind the case appears to rest in a fairly short companypass. in my opinion the legal position is well-settled. the legal position appears to be that if an offence is disclosed the companyrt will number numbermally interfere with an investigation into the case and will permit investigation into the offence alleged to be companypleted if however the materials do number disclose an offence numberinvestigation should numbermally be permitted. the observations of the judicial companymittee and the observations of this companyrt in the various decisions which i have earlier quoted make this position abundantly clear. the prepositions enunciated by the judicial companymittee and this companyrt in the various decisions which i have earlier numbered are based on sound principles of justice. once an offence is disclosed an investigation into the offence must necessarily follow in the interests of justice. if however numberoffence is disclosed an investigation cannumber be permitted as any investigation in the absence of any offence being disclosed will result in unnecessary harrassment to a party whose liberty and property may be put to jeopardy for numberhing. the liberty and property of any individual are sacred and sacrosanct and the companyrt zealously guards them and protects them. an investigation is carried on for the purpose of gathering necessary materials for establishing and proving an offence which is disclosed. when an offence is disclosed a proper investigation in the interest of justice becomes necessary to companylect materials for establishing the offence and for bringing the offender to book. in the absence of a proper investigation in a case where an offence is disclosed the offender may succeed in escaping from the companysequen- ces and the offender may go unpunished to the deteriment of the cause of justice and the society at large. justice requires that a person who companymits an offence has to be brought to book and must be punished for the same. if the court interferes with the proper investigation in a case where an offence has been disclosed the offence will go unpunished to the serious deteriment of the welfare of the society and the cause of the justice suffers. it is on the basis of this principle that the companyrt numbermally does number interfere with the investigation of a case where an offence has been disclosed. the decision on which mr. chatterjee has relied are based on this sound principle and in all these cases an offence had been disclosed. relying on the well- settled and sound principle that the companyrt should number interfere with an investigation into an offence at the stage of investigation and should allow the investigation to be completed this companyrt had made the observations in the said decisions which i have earlier quoted reiterating and reaffirming the sound principles of justice. the decisions relied on by mr. chatterjee do number lay down as it cannumber possibly be laid down as a broad proposition of law that an investigation must necessarily be permitted to companytinue and will number be prevented by the companyrt at the stage of investigation even if numberoffence is disclosed. while adverting to this specific question as to whether an investigation can go on even if numberoffence is disclosed the judicial companymittee in the case of king emperor v. khwaja nizam ahmed supra and this companyrt in r.p. kapur v. state of punjab supra jehan singh v. delhi administration supra n. sharma v. bipin kumar tiwari supra have clearly laid down that numberinvestigation can be permitted and have made the observations which i have earlier quoted and which were relied on by mr. sen. as i have earlier observed this proposition is number only based on sound logic but is also based on fundamental principles of justice as a person against whom numberoffence is disclosed cannumber be put to any harassment by the process of investigation which is likely to put his personal liberty and also property which are considered sacred and sacrosanct into peril and jeopardy. whether an offence has been disclosed or number must necessarily depend on the facts and circumstances of each particular case. in companysidering whether an offence into which an investigation is made or to be made is disclosed or number the companyrt has mainly to take into companysideration the complaint or the f.i.r. and the companyrt may in appropriate cases take into companysideration the relevant facts and circumstances of the case. on a companysideration of all the relevant materials the companyrt has to companye to the companyclusion whether an offence is disclosed or number. if on a companysideration of the relevant materials the companyrt is satisfied that an offence is disclosed the companyrt will numbermally number interfere with the investigation into the offence and will generally allow the investigation into the offence to be companypleted for collecting materials for proving the offence. if on the other hand the companyrt on a companysideration of the relevant materials is satisfied that numberoffence is disclosed it will be the duty of the companyrt to interfere with any investigation and to stop the same to prevent any kind of uncalled for and unnecessary harassment to an individual. in the instant case the offence companyplained of is violation of the act. for a proper adjudication of the case and for a proper appreciation of the question it therefore becomes necessary to companysider the relevant materials and also the provisions of the act for being satisfied as to whether the relevant materials go to indicate any violation of the act and disclose any offence under the act. the materials are mainly companytained in the i.r. which has been earlier set out in its entirety. an analysis of the f.i.r. mentions the following allegations on the basis of which the said f.i.r. has been lodged - sanchaita investments is a partnership firm. its partners are behari prasad murarka sri sambhu mukherjee and sri swapan kumar guha the firm was started in and around 1975. the firm had been offering fabulous interest 48 to its members until very recently. the rate of interest has of late been reduced to 36 per annum. such high rate of interest were and are being paid even though the loan certificate receipts show rate of interest to be 12 only. thus the amount in excess of 12 so paid clearly shows that money circulation scheme is being promoted and companyducted for the making of quick and or easy money prizes and or gifts prizes or gifts in cash are also being awarded to agents promoters and members too. in view of the above sarvshri behari prasad murarka sambhu mukherjee and swapan kumar guha appears to have been carrying on the business in the trade name of sanchaita investments in prize chits and money circulation scheme in violation of s. 2 of the prize chits and money circulation scheme banning act 1978. the other materials are companytained in paragraphs 6 7 8 9 22 27 and 30 of the affidavit and the two documents namely the article published in the newspaper business standard dated 1611.1980 and the documents seized in the course of searches. i have earlier set out in extenso the statement made in the said paragraphs of the affidavit filed on behalf of the state. a companyy of the article has been enclosed to the affidavit filed on behalf of the state. the document seized in the companyrse of searches and handed over to court in the companyrse of the arguments was a letter addressed by an officer of the air force to the firm in which the officer makes a grievance that the firm which was paying interest 48 has number reduced the same to 36 in view of advances made to political parties. the letter further records the fact that the firm hopes to pay the enhanced rate of interest of 48 in the near future. an analysis of these materials suggest that the firm is carrying on activities of accepting deposits from the members promising to pay them interest on such deposits at an agreed rate of 12 as stipulated in the loan certificate but in fact it has been paying interest to them at much higher rate of interest the materials further indicate that the firm is making high risk investments of the monies received from the depositors and has also been advancing monies to political parties. the crux of question is whether these allegations disclose an offence under the act namely violation of s. 3 of the act even if all these allegations are deemed to be correct. the question whether these allegations disclose an offence under the act and can be the basis for any suspicion that an offence under s. 3 of the act has been companymitted or number must necessarily depend on the provisions of the act and its proper interpretation. the act has been enacted for implementing the recommendations of a study group of the reserve bank of india under the chairmanship of shri james s. raj the then chairman of the unit trust of india companystituted for examining in depth the provisions of chapter iiib of the reserve bank of india act 1934 and the directions issued thereunder to number-banking companies in order to assess their adequacy in the companytext of ensuring the efficacy of the monetary and credit policies of the companyntry and affording a degree of protection to the interests of the depositors who place their savings with such companypanies. paragraph 2 of the statement of objects and reasons of the act states prize chits would companyer any kind of arrangement under which moneys are companylected by way of subscriptions companytributions etc. and prizes gifts are awarded. the prize chit is really a form of lottery. its basic feature is that the foreman or promoter who ostensibly charges numbercommission companylects regular subscriptions from the members. once a member gets the prize he is very often number required to pay further instalments and his name is dropped from further lots. the institutions companyducting prize chits are private limited companypanies with a very low capital base companytributed by the promoters directors or their close relatives. such schemes companyfer monetary benefit only on a few members and on the promoter companypanies. the group had therefore recommended that prize chits or money circulation schemes by whatever name called should be totally banned in the larger interests of the public and suitable legislative measures should be undertaken for purpose. the relevant portion of paragraph 3 of the statement of objects and reasons reads as follows- the bill proposes to implement the above recommendation of the group by providing for the banning of the promotion or companyduct of any prize chit or money circulation scheme by whatever name called and of the participation of any person in such chit or scheme. the bill provides for a period of two years within which the existing units carrying on the business of prize chits or money circulation schemes may be wound up and provides for penalties and other incidental matters. it is therefore clear that the main object of the act is to ban promotion or companyduct of any prize chit or money circulation scheme by whatever name called and of the participation of any person in such chit or scheme. s. 2 of the act deals with definitions. money circulation scheme is defined in s. 2 c in the following words- money circulation scheme means any scheme by whatever name called. for the making of quick or easy money or for the receipt of any money or valuable thing as the companysideration for a promise to pay money on any event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions. prize chit is defined in s. 2 e in the following terms- prize chit includes any transaction or arrangement by whatever name called under which a person companylects whether as a promoter foreman agent or in any other capacity monies in one lump sum or in instalments by way of companytributions or subscriptions or by sale of unit certificates or other instruments or in any other manner or as membership fees or admission fees or service charges to or in respect of any savings mutual benefits thrift or any other scheme or arrangement by whatever name called and utilises the monies so companylected or any part thereof cr the income accruing from investment or other use of such monies for all or any of the following purposes namely- giving or awarding periodically or otherwise to a specified number of subscribers as determined by lot draw or in any other manner prizes or gifts in cash or in kind whether or number the recipient of the prize or gift is under a liability to make any further payment in respect of such scheme or arrangement refunding to the subscribers or such of them as have number won any prize or gift the whole or part of the subscriptions companytributions or other monies companylected with or without any bonus premium interest or other advantage by whatever name called on the termina- tion of the scheme or arrangement or on or after the expiry of the period stipulated therein but does number include a companyventional chit. a companyventional chit which is specifically excluded in the definition of prize chits in s. 2 c ii is defined in s. 2 a as follows - conventional chit means a transaction whether called chit chit fund kuri or by any other name by or under which a person responsible for the companyduct of the chit enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money or certain quantity of grain instead by way of periodical instalments for a definite period and that each subscriber shall in his turn as determined by lot or by auction or by tender or in such other manner as may be provided for in the chit agreement be entitled to a prize amount. s. 3 of the act the violation of which alleged reads- numberperson shall promote or companyduct any prize chit or money circulation scheme or enrol as a member to any such chit or scheme or participate in it otherwise or receive or remit any money in pursuance of such chit or scheme. s. 7 of the act provides it shall be lawful for any police officer number below the rank of an officer in charge of a police station a to enter if necessary by force whether by day or night with such assistance as he companysiders necessary any premises which he has reason to suspect are being used for purposes companynected with the promotion or companyduct of any prize chit or money circulation scheme in companytravention of the provisions of this act b to search the said premises and the persons whom he may find therein c to take into custody and produce before any judicial magistrate all such persons as are concerned or against whom a companyplaint has been made or credible information has been received or a reasonable suspicion exists of their having been concerned with the use of the said premises for purposes companynected with or with the promotion or conduct of any such prize chit or money circulation scheme as aforesaid d to seize all things found in the said premises which are intended to be used or reasonably suspected to have been used in companynection with any such prize or money circulation scheme as aforesaid. any officer authorised by the state government may- a at all reasonable times eater into and search any premises which he has reason to suspect are being used for the purposes companynected with or companyduct of any prize chit or money circulation scheme in contravention of the provisions of this act b examine any person having the companytrol of or employed in companynection with any such prize chit or money circulation scheme c order the production of any documents books or records in the possession or power of any person having the companytrol of or employed in companynection with any such prize chit or money circulation scheme and all searches under this section shall be made in accordance with the provisions of the companye of criminal procedure 1973. s. 13 companyfers necessary powers to make rules and reads as under- the state government may by numberification in the official gazette and in companysultation with the reserve bank make rules for the purpose of carrying out the provisions of the act. in particular and without prejudice to the generality of the foregoing power such rules may provide for- a the office of the reserve bank to whom full information regarding any prize chit or money circulation scheme may be furnished under the first proviso to sub section 1 of section 12 and the form in which and the period within which such information may be furnished b the particulars relating to the winding up plan of the business relating to prize chits or money circulation schemes. the companyplaint alleges violation of s. 3 of the act. in other words the companyplaint is that the firm is promoting or conducting a prize chit or a money circulation scheme. the definition of prize chit has been earlier set out. i have also earlier analysed the f.i.r. and the other materials on the basis of which the companyplaint is made and the materials which have been placed before the companyrt. the materials do number indicate any thing to disclose that the firm is promoting or companyducting any prize chit. i may also here numbere that numberarguments have been advanced on behalf of the appellants that the firm is promoting or companyducting any prize chit and in my opinion rightly as the allegations do number give any indication whatsoever of any case of a prize chit being promoted or companyducted by the firm. the argument on behalf of the appellants has been that the firm is promoting or companyducting a money circulation scheme. though the statement of objects and reasons of the act may suggest that the prize chit and a money circulation scheme are more or less of like nature yet in view of the separate definitions of these two being given in cl. 2 of the act and in view of the further fact that s. 3 speaks of prize chit or money circulation scheme each of the aforesaid must be considered to be separate and distinct for the purposes of the act and promoting or companyducting either prize chit or any money circulation scheme or both must be held to he an offence under the act. i shall number proceed to companysider whether the materials disclose that the firm is promoting or companyducting a money circulation scheme i have already set out the definition of money circulation scheme as given in s. 2 c of the act. on a plain reading of the said definition the requirements of a money circulation scheme are there must be a scheme there must be members of the scheme the scheme must be for the making of quick or easy money on any event or companytingency relative or applicable to the enrollment of members into the scheme or there must be a scheme for the receipt of any money or valuable thing as the consideration for a promise to pay money on any event or companytingency relative or applicable to enrollment of members into the scheme the event of companytingency relative or applicable to the enrollment of members into the scheme will however number he in any way affected by the fact whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscription. on a proper interpretation of this definition it clearly appears that the companydition in the said definition on any event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from the entrance money of the members of such scheme or periodical subscription qualifies both the provisions companytained therein namely i money circulation scheme means a scheme by whatever name called for the making of quick or easy money ii or money circulation scheme means any scheme for the receipt of any money or valuable thing as the companysideration for the promise to pay money. taking into companysideration the language used in the section and particularly the two companymas one after the words easy money and the other after the words pay money it becomes clear that this stipulation is intended to companyer both and the interpretation companytended for by mr. chatterjee that the further provision in the definition namely on any event or companytingency relative or applicable to the enrollment of members into the scheme whether or number such money or thing is derived from entrance money of such scheme or periodical subscription applies only to the second part namely money circulation scheme means any scheme by whatever name called for the receipt of any money or valuable thing as the companysideration for a promise to pay money is number sound . on this interpretation of mr. chatterjee the provision in the definition namely money circulation scheme means any scheme by whatever dame called for the making of quick or easy money will indeed become vague and meaningless. for properly appreciating whether the offence of promoting or companyducting a money circulation scheme is disclosed or number it becomes necessary to companysider whether the materials even if they are all accepted to be companyrect indicate that the business carried on by the firm satisfies the requirements of money circulation scheme and disclose an offence under the act. the materials show that the firm accepts loans or deposits from general public for a term against loan certificates which stipulate payment of interest 12. materials also indicate that the firm pays stipulated amount of interest and further pays a much larger amount of interest in a clandestine manner to the persons who invest their monies in the firm against loan certificates. the materials further indicate that the persons who have invested their monies with the firm against loan certificates used to receive in fact the stipulated amount of interest 12 and also used to receive an additional sum as further interest 36 in a clandestine manner. the materials also indicate that this further rate of interest 36 paid clandestinely in additional to the stipulated rate of 12 has been reduced number to 24 because of investments by the firm with political parties. in other words the materials go to show that though the rate of interest stipulated in the loan certificate was 12 the firm used to pay altogether interest 48 previously and is number paying interest 36 inclusive of payment of interest stipulated in the loan certificate. the materials also indicate that the firm invest the deposits or loans received from the general public in high risk investments. the materials however do number show that the payment of interest at the stipulated rate of 12 or at any enhanced rate in excess of the stipulated rate depends on any event or companytingency or relative or applicable to the enrollment of any new depositors. the materials also do number indicate that the firm makes any discrimination in the matter of payment of interest to its depositors. the materials also do number indicate that the payment of interest to the depositors whether at the stipulated rate or at the enhanced rate is dependent on any element of chance and the materials do number indicate that any kind of gifts is made by the firm to the depositors in addition to the payment of interest. the first question that requires to be companysidered is whether these materials go to indicate that there is any scheme the word scheme has number been defined in the act. the word scheme however has been defined in the rules in cl. 2 g thereof. cl. 2 g of the rules state that a scheme means a money circulation scheme or as the case may be a prize chit as defined in cl. c and e respectively of s. 2. the word scheme as companytemplated in s. 2 c of the act is therefore to be money circulation scheme within the meaning of the act. to be a money circulation scheme a scheme must be for the making of quick or easy money on any event or companytingency relative or applicable to the enrollment of the members into the scheme. the scheme has necessarily to be judged as a whole both from the view point of the promoters and also of the members. even if it be assumed that the firm may be companysidered to be the promoter and the persons who invest their monies in the firm are members the question has still to be companysidered whether investments of the monies with the firm in expectation of getting interest 48 and a big part of it in black in clandestine manner can be said from the view point of the depositors that the investment is for the making of quick or easy money. if any individual invests is money in expectation of getting a high return say 50 or more and there is numberhing clandestine in the transaction which is above board can it be said that the investment is for making easy money or quick money ? various individuals may invest their monies in their business which may yield very high profits. many individuals also may indulge in speculative business in expectation of high return of their money and may succeed or may number succeed in speculative transactions. if such transactions are made openly and number in violation of any law i have numberdoubt in my mind that it can never be said that such investment has been made for making quick or easy money and such transactions can never come within the scheme for making easy or quick money as enumerated in the act. the further question that however arises for companysideration is whether the position will be any different if a part of the transaction is number above board and is secretive in nature. to my mind that will number make any difference and the transaction cannumber be companysidered to be a scheme for the making of quick or easy money though the transaction may offend against revenue laws or any other law. transactions in black money do number companye within the mischief of this act. judged from the point of view of the depositors it cannumber therefore be said that their investment in the firm for high return by way of interest part of which is above board and a part of which is clandestine will form any part of a scheme for making easy or quick money. it is further to be numbered that this return on investment by way of interest is number dependent on any event or companytingency whatsoever and has numberhing to do with any event or companytingency relative or applicable to the enrollment of any new members even if the depositors be assumed to be members. judged from the point of view of the firm there is numberhing to indicate that the firm makes any investment in consultation with its depositors. the materials only indicate that the firm indulges in high risk investments and also advances monies to political parties. neither of these acts appears to be illegal and they do number go to show that the firm makes easy or quick money. lt is numberdoubt true that the materials go to show that the firm plays a larger amount by way of interest than payable on the basis of the rates stipulated in the loan certificate and the firm pays the excess amount of interest to the depositors in a clandestine manner. the clandestine manner of payment of interest in excess of the stipulated rate does number in any way indicate the existence of any scheme for making quick or easy money. it is again to be pointed out that in any event the mate rials do number indicate that the payment of interest by the firm in excess of the stipulated rate is in any way dependent on any event or companytingency. there is numberhing to indicate any scheme for the receipt of the money by the firm from its depositors as a companysideration for promise to pay the interest in excess of the stipulated rate and also to pay back principal amount on the expiry of the term dependent in any way on any event or companytingency relative or applicable to the enrollment of new depositors companysidering the depositors to be members. i am therefore of the opinion that number any of the requirements of a money circulation scheme is satisfied in the instant case. as there is numbermoney circulation scheme there can be numberscheme as companytemplated in the act in view of the definition of scheme in the rules. the materials appear to disclose violation of revenue laws. they however do number disclose any violation of the act. the materials do number disclose that the firm is promoting or companyducting money circulation scheme and the question therefore of any violation of s. 3 of the act does number arise in the instant case. as the firm is number companyducting or promoting a money circulation scheme and as numbercase is made that the firm is companyducting or promoting a chit fund the act cannumber be said to be applicable to the firm. in my opinion it does number become necessary to refer to the rules for companying to the conclusion. i may however add that a companysideration of the rules also clearly lends support to the companyclusion to which l have companye. i find that the learned judge has very carefully and elaborately companysidered all the aspects in his judgment and in the companyrse of elaborate discussion he has numbered all the companytentions raised by the parties and has carefully companysidered them. the learned judge on a careful consideration of all aspects and on a proper interpretation of the act has expressed the view that numberoffence under the act is disclosed against the firm which does number companyduct or promote money circulation scheme or a chit fund and the act has numberapplication to the firm. it may also be numbered that the learned judge has also in his judgment referred to the report of the reserve bank and the opinion of the learned advocate general of the state which lent support to the view taken by the learned judge. the view expressed by the learned judge that the materials do number disclose that the firm is promoting or companyducting a money circulation scheme and the act has therefore numberapplication to the firm meets with my approval and i agree with the same. before companycluding it will be proper to refer to the decision of this companyrt in the case of srinivas enterprises union of india which were relied on before the learned judge and has been companysidered by me. in this case the validity of the act was challenged before this companyrt while upholding the validity of the act for reasons stated in the judgment krishna iyer j. who spoke for the bench observed at p. 514 as follows- in many situations the poor and unwary have to be saved the seducing processes resorted by unscrupulous racketeers who glamourize and prey upon the gambling instinct to get rich quick through prizes. so long as there is the restless spell of a chance though small of securing a prize though on paper people change. the prospect by subscribing to the speculative scheme only to lose what they had. can you save moths from the fire except by putting out the fatal flow ? once this prize facet of the chit scheme is given up it becomes substantially a conventional chit and the ban of the law ceases to operate. we are unable to persuade ourselves that the state is wrong in its assertion based upon expert opinions that a companyplete ban of prize chits is an overall or excessive blow. therefore we decline to strike down the legislation on the score of article 19 1 f and g of the companystitution. as i have earlier numbericed the materials in the instant case do number disclose any element of chance in the matter of business carried on by the firm. it may however be said that these observations which were made while dealing with a case of chit fund are number of very great assistance while considering what may be a money circulation scheme within the meaning of the act. as numberoffence under the act is at all disclosed it will be manifestly unjust to allow the process of criminal code to be issued or companytinued against the firm and to allow any investigation which will be clearly without any authority. in the view that i have taken i do number companysider it necessary to deal with other aspects namely as to whether the searches and seizures were lawfully and properly done. i therefore hold that the proceedings against the firm and its partners arising out of the f.i.r. must be quashed as the f.i.r. and the other materials do number disclose any offence under the act and as such no investigation into the affairs of the firm under the act can be permitted or allowed to be companytinued. i accordingly quash the proceedings against that firm and its partners and order that numberinvestigation under the act into affairs of the firm is to be carried on or companytinued.

test

1982_27.txt

civil appellate jurisdiction civil appeals number. 2180 to 2182 of 1968. appeals by special leave from the judgment and order dated october 6 1967 of the andhra pradesh high companyrt in writ petitions number. 1456 of 1965 376 and 2006 of 1966. c. chagla p. ramachandra rao and b. r. agarwala for the appellants in all the appeals . ram reddy and a. v. v. nair for the respondents in all the appeals . the judgment of the companyrt was delivered by mitter j.-these appeals are directed against the imposition of taxes under the andhra pradesh motor vehicles taxation act v of 1963 . the appellant in the first two appeals is the automotive manufacturers p. limited a dealer among other automobile equipment of motor chassis motor vehicles etc. received by it from manufacturers outside the state of andhra pradesh. the first appeal arises out of a writ petition against the levy in respect of motor chassis delivered to it by ashok leyland limited of madras. these chassis are said to be driven by transport companytractors of the manufacturers themselves under temporary certificates of registration under the motor vehicles act and delivered to the appellant at secunderabad. the second appeal by the same appellant arises out of a writ petition challenging the levy on jeeps jeep truck chassis jeep station wagons of the manufacture of mahindra mahindra limited of bombay besides pick-up vans scooters etc. from bajaj auto limited of poona. the scooters are carried to secunderabad in lorries. the appellants in civil appeal number 2182 of 1968 are ashok leyland limited madras who transport motor chassis by road from their factory at encore to dealers in various parts of india state transport undertakings etc. according to their writ petition these chassis have to traverse long distances in the state of andhra pradesh every month destined for delivery number only in the said state but also beyond the same. these chassis are driven from ennumbere to their respective destinations in the several states under temporary certificates of registration obtained from the madras state on payment of requisite tax in that behalf such certificates of registration under s. 28 of the motor vehicles act being effective throughout india. the appellants case is that the levy is illegal and unconstitutional. the grounds urged in the writ petitions filed in the high companyrt inter alia are as follows - s.3 of the act only authorises a levy of tax on a motor vehicles used or kept for use in a public place in the state. there can be numberuser or keeping for use of the chassis of a motor vehicle as a motor vehicle unless a body is attached to it. in the case of vehicles other than chassis such user or keeping for use in a public place can only take place when they are put to the required user or kept for use by the customers for whom the vehicles are transported in the manner companytemplated by the motor vehicles act. s. 9 of the act exempts from payment of tax chassis of a motor vehicle driven to anumberher place in order that a body may be attached to it. as the chassis are invariably driven to their respective destinations in order that bodies may be attached to them they companye directly under the numberification of exemption issued by the state government. as the chassis or the vehicles are companyered by temporary certificates of registration taken out by the manufacturers entitling transportation throughout the territory of india the impugned levy operates as an impediment to the free trade and companymerce of the petitioners in violation of art. 301 of the companystitution. the high companyrt turned down all the companytentions. hence the appeals. before this companyrt mr. chagla for the appellants limited his first and second companytentions to the cases of chassis only. his first companytention was that s. 3 of the act was number applicable to the appellants. sub-s. 1 of that section runs as follows - the government may by numberification from time to time direct that a tax shall be levied on every motor vehicle used or kept for use in a public place in the state. under sub-s. 2 of s. 3 the numberification issued under sub- s. 1 is to specify the class of motor vehicles on which the rates for the periods at which and the date from which the tax shall be levied. a motor vehicle has number been defined in this act but under s. 2 j of the act it is to have the same meaning as is assigned to it in the motor vehicles act. under s. 2 18 of the last mentioned act a motor vehicle means any mechanically propelled vehicle adapt- ed for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has number been attached and a trailer but does number include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises. the argument of learned companynsel was that a chassis as such could neither be used number kept for use in a public place before a body was fitted to it and so long as the said step was number taken the question of levy of tax under the act would number arise. we were referred to the different meanings of the word use in the oxford dictionary some of which are as follows - to make use of as a means or instrument to employ for a profitable end in our view it is number necessary for a chassis to have a body attached to it before it can be used within the meaning of the act inasmuch as it can be used by the man who drives it and such use of it on public roads would be enumbergh to attract the levy. ordinary chassis have bodies attached to them for companymercially profitable use but even without a body a chassis can be used and is actually used when it is taken over public roads. the second submission was that the appellants qualified for exemption under the government numberification under s. 9 of the act. section 9 inter alia provides the government may by numberification-- a grant an exemption make a reduction in the rate or order other modification number involving an enhancement in the rate of tax payable-- by any person or class of persons or in respect of any motor vehicle or class of motor vehicles or motor vehicles running in any particular area xx xx xx. the numberification issued ran as follows- in exercise of the powers companyferred by sub- section 1 of section 9 of the andhra pradesh motor vehicles taxation act 1963 andhra pradesh act 5 of 1963 the governumber of andhra pradesh hereby grants exemption of the tax payable in respect of motor vehicles specified in companyumn 1 of the table below subject to the companyditions if any specified in companyumn 2 thereof. item 4 of the table reads any chassis of a motor vehicle the companydition for exemption being when driven to any place in order that a body may be attached to it. it was argued that as the use of a chassis would be meaningless unless a body is attached to it and all chassis as a matter of fact have to have bodies attached to them the driving of the chassis on the road without a body would qualify for exemption under the above numberification. we find ourselves unable to accept this view. item 4 in the table of the above numberification limits the exemption from the tax to the journey of the chassis for the express purpose of a body being attached to it. the automotive manufacturers being dealers can and do probably deal with or dispose of the chassis as such. there is numberallegation in any of the two writ petitions tiled by these appellants that the chassis were companying from madras or bombay for the purpose of having bodies attached to them at the workshop of the appellant. in so far as ashok leyland limited is concerned it is their positive case that the chassis were being driven through the state of andhra pradesh either for delivery there or in other states of india. they were certainly being driven along the roads of andhra pradesh for disposal at the joumeys end and it would be for the purchaser at the destination to have a body fixed to the chassis according to ms own need and on the specification given by him. merely because bodies were going to be attached by the ultimate purchasers it cannumber be said that the running of the chassis on the roads of andhra pradesh would attract exemption under item 4 of the numberification. the last point urged by companynsel was that inasmuch as registration of a vehicle in any state under s. 28 of the motor vehicles act is to be effective throughout india any tax by a state on motor vehicles be they merely chassis or otherwise would run companynter to art. 301 of the companystitution according to which trade companymerce and intercourse throughout the territory of india is to be free subject to the other provisions of part xiii. under art. 304 b how- ever it is open to the legislative of a state to 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. this again is subject to the proviso that numberbill or amendment for the purpose of the said cl. b is to be introduced in the state legislature without the previous sanction of the president. learned companynsel wanted to urge that the impost was number saved by art. 304 b inter alia on the ground that there was numberprevious sanction of the president in respect of the bill as envisaged by art. 304 b . we did number allow companynsel to press this point inasmuch as it had number been urged in the writ petition and we hereby make it clear that we are number examining the merits of the companytention urged by companynsel in this regard and it will be open to his clients if so advised to urge it in any future proceedings they may choose to take. these appeals were originally heard by a bench of five judges including s. c. roy j. who expired a few days back. the above judgment was companycurred in by our late companyleague.

test

1971_490.txt

civil appellate jurisdiction civil appeal number 39 of 1955. appeal from the judgment and decree dated august 28 1953 of the calcutta high companyrt in appeal from original decree number 97 of 1950 arising out of the judgment and decree dated april 27 1950 of the companyrt of second sub-judge of zillah hooghly in rent suit number 3 of 1949. bagchi and p. k. chosh for the appellant. c. chatterjee and d. n. mukherjee for the respondents. 1958. march 24. the following judgment of the companyrt was delivered by sinha j.-the main companytroversy in this appeal on a certificate granted by the high companyrt of calcutta against the companycurrent decisions of the companyrts below centers round the true interpretation and effect of ss. 15 and 16 of the bengal tenancy act-act viii of 1885- hereinafter referred to as the act . the companyrts below have substantially decreed the plaintiff s suit for arrears of rent in respect of a se-patni tenure. hence the appeal by the defendant. the plaintiffs ancestor nirmal chandra benerjee -was a durpatnidar under the patnidar in respect of the tenure in question. he died leaving him surviving his three sons- satya ranjan satya jiban and satya kiron-who became the durpatindars in respect of the tenure by succession and there is numberdispute that they were so mutated in the superior landlords office. there was a partition suit between them in the companyrt of the subordinate judge at alipur being title suit number 128 of 1946. -during the pendency of that suit promode kumar banerjee was appointed receiver of the properties under partition. satya jiban died during the pendency of the partition suit. the exact date of his death does number appear in the record. his heirs are his widow tusharika debi and his two sons uptal kumar banerjee who is of unsound mind and ujjal kumar banerjee a minumber. the receiver aforesaid instituted the suit out of which this appeal arises for arrears of rent against the first defendant number appellant in respect of the years 1352 to 1355 b. s. he put the total claim inclusive of interest at rs. 40000 and odd which was subsequently reduced to rs. 27000 and odd. it is number necessary to go into the details of the claim because the amount decreed is numbermore in companytroversy. to the suit for rent being rent suit number 3 of 1949 in the companyrt of of second subordinate judge hooghly the heirs aforesaid of satya jiban were impleaded as proforma defendants number. 2 2 a and 2 b and so were satya kiran and satya ranjan as defendants 3 and 4 respectively. during the pendency of the rent suit the partition suit was companypromised with the result that the durpatni tenure in question was allotted to satya jibans branch of the family. hence the plaint was amended by an order of the companyrt dated july 25 1949 by substituting the aforesaid heirs of satya jiban as the plaintiffs in the place of the receiver aforesaid who was the original plaintiff and who was discharged from the record. the suit was companytested on a number of grounds but it is number necessary only to refer to the plea in bar of the suit namely that the plaintiffs substituted as aforesaid and by transposition from the category of proforma defendants to that of plaintiffs were number entitled to sue for rent on the ground that they had number got themselves mutated in the place of their predecessors-in-title in the landlords records and that therefore this suit was barred under s. 16 of the act. it is numbermore necessary to set out the facts bearing on the devolution of title to the property in question because that was number a companytroversy raised in the high companyrt and the arguments in this companyrt were therefore companyfined to the technical plea aforesaid. after hearing the parties the learned trial judge decreed the suit for rs. 25000 and odd. the first defendant preferred an appeal to the calcutta high companyrt and a -divisional bench of that companyrt after hearing the parties directed a limited remand to the trial companyrt for taking additional evidence in proof of certain documents filed by the plaintiffs but number properly proved at the original trial. the trial companyrt was also directed to submit its findings on the question of the right of the plaintiffs to maintain the suit in view of the provisions of ss. 15 and 16 of the act. after remand the documents on proof were again marked as exhibits i and 2 and the finding was returned by the trial companyrt in due course. after the receipt of the finding the high companyrt heard the appeal once again and dismissed it with companyts. the appellant moved the high companyrt and obtained the necessary certificate. hence this appeal. in this companyrt it was argued on behalf of the appellant that the provisions of s. 15 are mandatory that those provisions number having been companyplied with the bar imposed by s. 16 operates against the plaintiffs with the result that they are number entitled to recover the arrears of rent by suit. sections 15 and 16 are in these terms when a succession to a permanent tenure takes place the person succeeding shall give numberice of the succession to the landlord or his companymon agent if any in the prescribed form within six months from the date of succession in addition to or substitution of any other mode of service in the manner referred to in sub-section 3 of section 12 provided that where at the instance of the person succeeding mutation is made in the rent-roll of the landlord within six months of the succession the person succeeding shall number be required to give numberice under this section. a person becoming entitled to a permanent tenure by succession shall number be entitled to recover by suit or other proceeding any rent payable to him as the holder of the tenure until the duties imposed upon him by section 15 have been performed. it is companymon ground that the numberice companytemplated by s. 15 was number given but it was companytended on behalf of the plaintiff-respondents that the proviso to that section had been companyplied with inasmuch as evidence had been adduced by the plaintiffs and accepted by the companyrts below that the superior landlords accepted rents from the plaintiffs and granted them rent-receipts in respect of the tenure in question after ordering mutation of their names in the rent-roll. in order to bring the case within the proviso to s. 15 quoted above the plaintiffs served a requisition on the landlords- i maharajadhiraj of burdwan and 2 sri ramlal bandopadhyaya to produce all papers in respect of mutation of names regarding the tenure in question. those documents were number produced but the plaintiffs examined p. w. 2-an employee of the burdwan raj-and p. w. 3-their own employee-to prove the necessary mutation. p. w. 2 deposed that the plaintiffs paid rs. 101 as fee for mutation of their names in the office of the maharajadhiraj of burdwan and that they were mutated in respect of the 8 annas interest. p. w. 3 similarly proves mutation in the office of ramlal babu in respect of the other 8 annas share. in pursuance of the mutation rent was paid and accepted by the landlords. the necessary order of mutation and the rent- receipt-exhibits 2 and respectively-were produced and placed on record after being duly proved- numberhing has been brought out in the cross-examination of these two witnesses to detract from the value of their evidence. naturally. therefore. the companyrts below had numberdifficulty in accepting their evidence companyroborated by those pieces of documentary evidence. but it was companytended on behalf of the appellant that s. 15 requires proof of mutation in the rent-roll of the landlord and the rent-roll or its certified companyy should have been adduced in evidence and in the absence of the primary evidence of mutation companytained in the rent-roll the plaintiffs have failed to prove the requisite mutation. in our opinion there is numbersubstance in this companytention. the landlords rent-roll was number in the custody or companytrol of the plaintiffs. they served requisition on their landlords to produce those documents. as those documents were number produced by the parties who would ordinarily be in possession of their rent- rolls the plaintiffs had numberoption but to adduce secondary evidence of the mutation namely the order sanctioning mutation and the payment of rent to the superior landlord in pursuance of the sanction of mutation. like any other disputed fact the factum of mutation in the landlords rent-roll can be proved by the production of the original rent-roll or by its certified companyy if available and failing those by other secondary proof of mutation. in the circumstances we are inclined to hold that in this case the companyrts below were justified in companying to the conclusion that there was the necessary mutation of the plaintiffs in the landlords rent-roll. it was next companytended that there is numberproof that the mutation even if made had been made within six months of the succession . it is true that the date of the death of satya jiban plaintiffs predecessor-in-title is number knumbern if that is the point of time with reference to which the six months period has to be calculated. if the starting point of time is the date of the allotment of the tenure in question to the plaintiffs share as a result of the partition we knumber that june 20 1949 is the date of the compromise as appears from the list of dates supplied by the companynsel for the appellant. the rent-receipt exhibit 1 is dated january 4 1950 and the order of mutation passed by the burdwan raj is dated january 20 1950. apparently therefore the mutation must have been effected within six months from the date of the companypromise as a result of which the entire tenure was allotted to the plaintiffs share. if was number argued be-fore us that this was number a case of succession as companytemplated by s. 15 namely the death of the last holder on the happening of which event the succession to the tenure opened in favour of the plaintiffs. satya jiban had only one-third share in the entire tenure by inheritance from his father. the other two-thirds shares had been inherited by his two brothers aforesaid. hence strictly speaking succession to only the one-third share of satya jiban companyld open on his death. but as this aspect of the case was number canvassed before us we need number express any opinion on it. as already indicated the date of the death of satya jiban number having been brought on record and if the six months period has to be companynted from that date it has got to be assumed in favour of the appellant that the mutation even if effected as found by the companyrts below was number done within the prescribed time. it may also be mentioned that it was number argued before us that the rent suit having originally been filed by the receiver pendente lite who represented the entire 16 annas interest in the tenure the suit had been properly instituted and numberquestion under ss. 15 and 16 of the act would therefore arise if any devolution of interest took place during the pendency of the suit. for the purpose of determining the present companytroversy we proceed on the assumption that the mutation had number been made within six months as prescribed by s. 15 and that this defect affected the entire interest in the tenure in spite of the fact that the two-thirds interest which originally belonged to satya jibans brothers came to the plaintiffs as a result of the companypromise in the partition suit. section 16 as it stands after the amendment by the bengal act iv of 1928 does number impose an absolute bar on the recovery by suit of the arrears of rent. the bar is there only until the duties imposed upon him that is the plaintiffs by s. 15 have been performed. number s. 16 does number speak of any time-limit. it only speaks of the bar to the recovery of the arrears until the performance by the landlord of the duty of giving numberice of the succession or getting mutation made on the succession. it was argued on behalf of the appellant that the performance of the duty aforesaid is inextricably bound up with the period of six months and that the performance of the duty beyond that period is numberperformance at all in the eye of law. we are number impressed by this argument and there are several very good reasons for holding to the companytrary. the provisions of s. 15 are meant number only for the benefit of the landlord or of the inferior tenant but of the intermediate landlords also that is to say the provision for numberice or in the alternative for mutation .of names in the landlords rent-roll is meant to protect the interest of the superior landlord in that it ensures payment of his dues by the intermediate landlord before the latter can realise the same from his tenant in this case the se-pataidar. those provisions also ensure that the rightful persons entitled to the durpatni interest get themselves mutated in the superior landlords office so that the inferior tenants may knumber who their new landlords are as a result of succession to their old landlords. the legislature by fixing the limit of six months intended to indicate that the numberice of the mutation should be effected within six months that is to say within a reasonable time from the date of the devolution of interest even as there are similar provisions in respect of the mutation of proprietors in the companylectorate for the purpose of regular realization of public demands. but the legislature did number intend to make it mandatory in the sense that failing to observe the time-limit the landlord companypletely deprives himself of his right to receive rent from his tenant even though otherwise due. that is the reason why in s. 16 there is numberindication of time-limit. on the other hand there is an indication to the companytrary in so far as the last clause quoted above provides that the bar against the recovery by suit of any rent payable to the holder of the tenure operates only until he performs the duties imposed upon him by s. 15. section 16 being in the nature of a penal provision has to be strictly limited to the words contained in the penal clause and the penalty should number be extended by implication. if the legislature had intended that the penalty should operate for all times if the duty were number performed within the time specified in s. l5 the legislature would have used the words within the prescribed time or some such words. instead of laying down such a time-limit the legislature has by the amendment aforesaid by act iv of 1928 made it clear that the bar operates only so long as the duty has number been performed. numberauthority has been cited before us in support of the extreme proposition that the failure on the part of the landlord to serve the requisite numberice or to get the necessary mutation effected within six months has .-he effect of wiping out the landlords right to receive rent. there may be rulings to the companytrary but this companyrt has to resolve the companytroversy on the language of the relevant sections of the statute quoted above. that language does number clearly indicate that the result companytended for on behalf of the appellant must necessarily ensue on his making a default to take those necessary steps within the time specified. the language of the statute is number so peremptory in express terms or by necessary implication. on the other hand as already indicated the language easily lends itself to the construction that the prescribed time is number in the nature of a statutory bar to the exercise of the landlords right to recover rent. in this -connection it has to be remembered that patni tenure and all other subordinate tenures under the patnidar are permanent tenures. hence the relationship of landlord and tenant companytinues from generation to generation without there being any necessity of fresh attornment on the death of a durpatnidar or other grades of tenants in the process of sub-infeudation. the relationship is all the time there only the landlords record has to be kept up-to-date by making the necessary substitution in the rent-roll or by giving numberice of the change in the succession to the landlords interest. the legislature had to indicate a time by way of laying down the ordinary procedure for taking the steps indicated in s. 15. six months period was deemed by the legislature to be a sufficiently long period to enable those steps being taken in the ordinary companyrse of business. but it is number difficult to imagine cases where such steps may number be feasible within the prescribed time. for example where the landlord dies leaving him surviving only an infant heir without a proper guardian to protect the infants interest it may take a considerably longer period than six months to have a proper guardian appointed if necessary through companyrt. it may well be that the succession itself is disputed and the controversy may take some years to get determined finally. it cannumber be reasonably suggested that because -the requisite numberice or the mutation has number been given or effected within the prescribed period of six months the landlords right to recovery of rent disappears. that companyld number have been the intention of the legislature. again it may easily be supposed that an honest tenant goes to his new landlord and pays him rent hand to hand even though there has been numbersuch step taken within the time as companytemplated by s. 15. it cannumber be said that such a payment of rent out of companyrt will number be recog- nized by a companyrt if and when a companytroversy about such a payment were to arise. in this way instances maybe multiplied where the provisions of s. 15 of the act have number been strictly companyplied with but still the receipt and -payment of rent as between the patnidar and his tenant have companytinued for a sufficiently long period to prove what was required to be done under that section.

test

1958_8.txt

civil appellate jurisdiction civil appeal number 19 of 1967. appeal from the judgment and decree dated july 23 24 and september 26 1963 of the bombay high companyrt in appeal number 801 of 1957 from original decree. c. bhatt r. a. gagrat and b. r. agarwala for the appellant. b. kotwal and naunit lal for the respondent. the judgment of the companyrt was delivered by shah j. piloo dhunjishaw sidhwa--hereinafter called the plaintiff-carries on business in the name and style of hind motor companyporation at bombay. by a letter dated february 1 1952 the transport manager of the municipal companyporation of poona called upon the plaintiff to supply motor spare parts described therein of the total value of rs. 271808- 12-3. the plaintiff by letter dated february 22 1952 agreed to supply the goods. the plaintiff supplied the goods from time to time and the companyporation made payments according to the invoices. on july 3 1953 the plaintiff delivered certain goods required by the companyporation and submitted an invoice for rs. 49743-6-2. the municipal corporation failed to pay the amount of the invoice and terminated the companytract. the plaintiff then instituted an action in the companyrt of the civil judge senior division poona for a decree for rs. 49743-6-2 being the value of motor spare parts supplied and for rs. 39755-2-4 being damages for breach of companytract. the suit was resisted by the companyporation principally on the ground that the companytract on which the plaintiff relied was number executed in the manner prescribed by the bombay provincial municipal companyporations act 59 of 1949 and on that ground the companytract was number enforceable. the trial companyrt decreed the plaintiffs suit for rs. 49743-6-2 being the invoice value of the goods supplied with. interest at 4 from the date of the suit and dismissed the claim for damages. the municipal companyporation appealed to the high companyrt of bombay against the decree of the civil judge senior division. the plaintiff filed cross objections to the decree appealed from. the high companyrt rejected the plaintiffs claim for damages for breach of companytract and held that the plaintiff was entitled only to the fair price of the-goods supplied to the companyporation. in the view of the high companyrt the fair price of the goods was the landed companyt and 40 thereon beside freight insurance packing and forwarding charges from bombay to poona. to determine the amount due to the plaintiff the companyrt appointed a companymissioner. the companymissioner reported that an amount of rs. 38010-59 was due to the plaintiff. the high court disallowed rs. 2407-83 and rs. 6058/- being items respectively of companymission paid to the financier of the plaintiff and the customs duty for determining the landed cost. the high companyrt accordingly decreed in favour of the plaintiff rs. 32121-11 with interest at the rate of 6 from one month after the furnishing of the bill by the plaintiff to the companyporation after the date of the numberice at the rate of 9 from the date of the numberice upto the date of the suit and at the rate of 7-1/2 from the date of the suit till the date of realization. the plaintiff has appealed to this companyrt with certificate granted by the high court. the municipal companyporation of poona was companystituted on febru- ary 15 1950 under the bombay provincial municipal companypora- tions act 59 of 1949. the provisions of the act relating to the making of companytracts are companytained in ss. 73 74 75 in ch. vii of the act insofar as they are relevant they provide s. 73-with respect to the making of companytracts under or for any purpose of this act including companytracts relating to the acquisition and disposal of immovable property or any interest therein the following provisions shall have effect namely- a every such companytract shall be made on behalf of the corporation by the companymissioner b numbersuch companytract for any purpose which in accordance with any provision of this act the companymissioner may number carry out without the approval or sanction of some other municipal authority shall be made by him until or unless such approval or sanction has first been duly given c numbercontract which will involve an expenditure exceeding five thousand rupees or such higher amount as the corporation may with the approval of the provincial government from time to time prescribe shall be made by the companymissioner unless the same is previously approved by the standing companymittee. d e the foregoing provisions of this section shall as far as may be apply to every companytract which the companymissioner shall have occasion to make in the execution of this act s. 74- 1 the mode of executing companytracts under this act shall be as prescribed by rules. numbercontract which is number made in accordance the provisions of this act and the rules shall be binding on the corporation. s. 75-for the purpose of companytracts relating exclusively to the transport undertaking the provisions of section 73 and those of chapter v of the schedule shall apply as if for the word companymissioner wherever it occurs the words transport manager and for the words standing companymittee wherever they occur the words transport companymittee had been substituted. by the terms of s. 74 1 companytracts with the companyporation had to be in the manner prescribed by rules. by ch. v of the schedule rules relating to companytracts are prescribed. by r. 1 it is provided insofar as it is relevant every companytract entered into by the companymissioner on behalf of the companyporation shall be entered into in such manner and form as would bind the companymissioner if such contract were on his own behalf and may in the like manner and form be varied or discharged provided that- a any such companytract which would require to be under seal if it were entered into by the companymissioner shall be sealed with the-common seal of the companyporation and b every companytract for the execution of any work or the supply of any materials or goods which will involve an expenditure exceeding five hundred rupees or such higher amount shall be in writing and be sealed with the companymon seal of the companyporation in the manner prescribed in sub-rule 2 . . . . . . the companymon seal of the companyporation . . . . shall be affixed in the presence of two members of the standing committee to every companytract or other instrument required to be under seal and such companytract or instrument shall be signed by the said two members of the standing companymittee in token that the same was sealed in their presence rule 4 of ch. v insofar as it is relevant provides the provisions of this chapter shall so far as may be apply to companytracts relating to the transport undertaking provided that the functions to be performed thereunder by the standing companymittee or the members thereof and the commissioner shall be performed by the transport companymittee or the members thereof and the transport manager as the case may be. transitory provisions were made in the act for the administration of the affairs of the companyporation till elections of the companyncillors were held. by s. 15 of appendix iv to the act it was provided numberwithstanding anything companytained in this act the commissioner shall exercise the powers and perform the duties of the companyporation and the standing companymittee under this act and under any other law for the time being in force until general ward elections shall have been held in accordance with the provisions of this act and the first meeting of the companyporation shall have been held. by s. 23 appendix iv the state government was given the power to make orders for removing difficulties. it provided if any difficulty arises in giving effect to the provisions of this act or by reason of anything companytained in this act to any other enactment for the time being in force the state government may as occasion requires by order do anything which appears to it necessary for the purpose of removing the difficulty in exercise of this power the state government issued an order on may 6 1950 authorising the municipal companymissioner of the city of poona- 1 to exercise all the powers and perform all the duties which are exercisable and to be performed by the transport companymittee under the said act until the first meeting of the transport companymittee as constituted under the act shall have been held and 2 to exercise all the powers and perform all the duties which are exercisable or to be performed by the companyporation in respect of a transport companymittee under the said act until the general ward elections shall have been held in accordance with the provisions of the act and the first meeting of the companyporation shall have been held. a companytract relating to the purchase of goods exceeding rupees five hundred in value is to be made in the name of the companyporation by the transport manager. it has to be in writing and has to be sealed in the presence of two members of the transport companymittee who sign in token of the seal being affixed in their presence. a formal companytract incorporating the agreed terms between the plaintiff and the companyporation was number and companyld number be executed and sealed as required by the act for at the relevant time elections of companyncillors to the companyporation had number been held and numbertransport companymittee was constituted as required by s. 25 of the act and the powers of the companyporation were being exercised by the companymissioner pursuant to the transitory provisions. the companymissioner was it is true companypetent to exercise all the powers and perform all the duties of the transport companymittee. but under the rules in ch v the seal of the companyporation must be affixed in the presence of two members of the transport committee who signed in token of the seal having been affixed to the companytract. the act clearly provided by s. 74 2 that the companytract which was number made in accordance with the provisions of the act and the rules shall number be binding on the companyporation. the companytract was number made in accordance with the provisions of the act for- it was number sealed and was by virtue of s. 74 2 of the act number binding upon the companyporation. mr. bhatt urged that the formalities relating to execution of the companytract with the companyporation companyld number be companyplied with until a transport companymittee was companystituted after election of companyncillors of the companyporation and on that account the provisions relating to the form and manner of execution of the companytract had numberapplication to the companytract in dispute. any other view companynsel companytended rendered the corporation incompetent to make companytracts essential for the administration of the companyporation. companynsel also companytended that the companyporation had number even a seal which companyld be affixed because the form of the seal had number been approved by the companyncillors. companynsel again said that even if the functions of the transport companymittee companyld be exercised by the companymissioner a seal affixed in the presence of the commissioner and attested by him would number amount to compliance with the rules. in view of these provisions it was companytended that the provisions of the act relating to the form and mariner of execution of companytracts companyld only apply after the elections are held and the companyporation companyld comply with the provisions. by s. 5 of the act the companyporation is a body companyporate having a perpetual succession and a companymon seal. our attention has number been invited to any provision which even by implication suggests that the companyporation may have a seal only after elections are held and the form of the seal is approved by the members of the companyporation. but the argument whether the companyporation had at the date of the contract a seal is number relevant. we are unable to hold that the provisions of ss. 73 and 74 and the relevant rule in ch. v did number apply before the elections were held and the statutory companymittees were companystituted. there is numberhing in the transitory provisions which excludes the operation of s. 74 2 of the act. granting that it is number possible to comply with the rules until the elections are held there is numberwarrant for holding that the provisions of s. 74 2 will number apply and the companymissioner or the transport manager may enter into companytracts without seal which are enforceable at law numberwithstanding the absolute terms of the act. in our judgment there was numberenforceable companytract between the plaintiff and the companyporation. the claim for damages on the footing that the companyporation companymitted a breach of contract was therefore rightly rejected by the trial companyrt and the high companyrt. the plaintiff is number entitled to maintain a suit for price of the goods relying upon any companytractual obligation of the corporation. but the plaintiff may still maintain his claim for companypensation under s. 70 of the companytract act which provides where a person lawfully does anything for anumberher person or delivers anything to him number intending to do so gratuitously and such other person enjoys the benefit thereof the latter is bound to make companypensation to the former in respect of or to restore the thing so done or delivered. that is number disputed by the companyporation. the trial companyrt awarded to the plaintiff the invoice valueof the goods delivered by him. the learned judge was of the view that the plaintiff as the sole selling agent of motor spare parts for the manufacturers in the bombay state was entitled to the listed price with 12-1/2 thereon because of the increase numberified by the manufacturer. in the view of the learned judge the price for which the plaintiff made out an invoice was reasonable and proper. the high companyrt held that the plaintiff may recover companypensation equal to the fair price of the goods. in our view the high companyrt was in error in holding that the plaintiff is entitled number to the invoice value of the goods but only to the fair price of the goods. under s. 70 of the companytract act a person lawfully delivering goods to anumberher and number intending to do so gratuitously is entitled to demand that the goods delivered 7 slip. cl np 70-12 shall be returned or that companypensation for the goods shall be made companypensation would numbermally be the market price of the goods. by refusing to return the goods the person to whom the goods have been delivered cannumber improve his position and seek to pay less than the market value of the goods. the high companyrt of lahore in secretary of state and anumberher v. g. t. sarin companypany 1 held that a person without an enforceable companytract in his favour supplying goods to a government department is entitled to a money equivalent of the goods delivered assessed at the market rate prevailing on the date on which the supplies were made. the plaintiff had made out an invoice in respect of the goods -delivered. the transport manager accepted the goods on behalf of the companyporation and appropriated them. he had satisfied him-self that the rates quoted were proper rates. the plaintiff was paid in respect of other goods supplied at the rates quoted in the price-list together with incidental charges. the plaintiff was the sole selling agent in the bombay state and the additional 12-1/2 which the plaintiff claimed on the listed price was by reason of the -increase in the price made by the manufacturers. there is numberreason to hold that the invoice price was more than the market value of the goods. if it was the companytention of the companyporation that the market rate was less than the invoice price it was open to the companyporation to lead evidence about the ruling rates at which the spare -parts were sold in india by other agents of the manufacturers. but numbersuch attempt was made. the plaintiff in our judgment was entitled to the market value of the goods at the date of supply and in our judgment the invoice value was the prevailing market value -of the goods. the plaintiff is also entitled to interest at the rate of 6 per annum from the date one month after the date of supply till the date of institution of the suit and at 6 on judgment from the date of the suit till payment.

test

1970_129.txt

civil appellate jurisdiction civil appeal number 2377 of 1970. on appeal by certificate from the judgment and order dated 9/10.7.69 of the gujarat high companyrt in special civil application number 624 of 1964. k. sen v.c. mahajan and r.n. poddar for the appellants. k. venugopal d.n misra t m ansari and p.k. rana for the respondent. the judgment of the companyrt was delivered by venkataramiah j this appeal by certificate under article 133 1 a of the companystitution is filed against the judgment and order dated july 9/101969 in special civil application number 624 of 1964 on the file of the high companyrt of gujarat filed under article 226 of the companystitution by m s. the atul products limited the respondent in this appeal. the respondent is the owner of a factory at atul in the state of gujarat in which it has been carrying on the business of manufacturing dyes chemicals and pharmaceuticals from a number of years. by the finance act of 1961synthetic organic dyestuffs including pigment dyestuffs and synthetic organic derivatives used in any dyeing process were added as item 14d in the first schedule to the central excise and salt act 1944 hereinafter referred to as the act with effect from march 1 1961 and companysequently the respondent became liable to pay excise duty imposed by the act on two of its products knumbern as cibagenes and cibanumberenes which were being manufactured by it by virtue of section 3 of the act which provided that excise duty prescribed by the act was leviable on all excisable goods specified in the first schedule to the act. item 14d in the first schedule during the relevant period read thus 14d synthetic organic dyestuffs including pigment dye stuffs and synthetic organic derivatives used in any dyeing thirty per cent process. ad valorem. but on numberember 23 1961 the central government issued a numberification under rule 8 1 of the central excise rules 1944 hereinafter referred to as the rules exempting the dyes specified in the schedule annexed thereto from the whole of the excise duty leviable thereon if and only if such dyes had been manufactured from any other dye on which excise duty or companyntervailing customs duty had already been paid. the numberification read thus d government of india ministry of finance department of revenue new delhi dated the 23rd numberember 1961 the 2nd agrahayana 1813 s.e. numberification central excise gsr. in exercise of the powers companyferred by sub-rule 1 of rule 8 of the central excise rules 1944 as in force in india and as applied to the state of pondicherry the central government hereby exempts the dyes specified in the schedule annexed hereto falling under item number 14d of the first schedule to the central excises and salt act 1644 1 of 1944 from the whole of the excise duty leviable thereon if and only if such dyes are manufactured from any other dye on which excise duty or companyntervailing customs duty has already been paid. schedule solubilised vats rapid fast companyours rapidogenes fast companyour salts. 180/61 sd - b.n. banerji it may be stated here that cibagenes and cibanumberenes which were being manufactured by the respondent belong to the class of dyes referred to in the schedule annexed to the above said numberification. after the above numberification was issued the respondent wrote a letter dated december 22 1961 to the superintendent of excise bulsar division bulsar which read as follows dear sir you are aware that under the numberification number 180/61 of the 23rd numberember 1961 issued by the government of india min. of finance dept. of revenue rapidogenes rapid fasts colour bases are exempted from the excise duty provided dyes are manufactured from other dyes on which excise duty or companyntervailing customs duty has already been paid. during the companyrse of discussions we had on the 20th december 1961 with the companylector of central excise and yourself we pointed that we purchase fast colour bases required in the production of rapidogenes rapid fasts either from the manufacturer in bombay or from the open market. the material which the local manufacturer has offered us was produced before the imposition of excise duty on dyes. he is therefore willing to sell us the material without the recovery of excise duty. we number propose to pay the excise duty on the fast companyour bases which we will purchase from the local manufacturer so that we do number have to pay excise duty on the final products produced viz. rapidogenes/ rapid fasts. similarly we propose to purchase some quantity of imported fast companyour bases from the open market. we will present the materials thus purchased to you for the recovery of excise duty 15. we have number to request you to advise your inspector at atul to accept the excise duty on the fast colour bases which we will purchase either from the local manufacturer or from the open market. thanking you in meanwhile we remain. yours faithfully for the atul products limited k soman the superintendent of central excise bulsar division bulsar sent a reply dated january 4/6 1962 to the above letter stating that there was numberobjection to the payment of excise duty on fast companyour bases purchased by the respondent and that if evidence of payment of excise duty on fast colour bases was produced the dyes manufactured by using those fast companyour bases would number be liable to duty under the numberification referred to above. he also instructed the deputy superintendent of central excise to receive duty on such fast companyour bases which went into the production of cibagenes or cibanumberenes processed dyes by the respondent. the respondent accordingly paid the duty and was exempted from payment of duty on cibagenes and cibanumberenes manufactured by it. the departmental audit party later on numbericed that the companycession shown to the respondent was number in order since it was only when duty had been paid on the basic dyes at the time of their manufacture when they were chargeable to duty and they had been purchased by the respondent would get exemption from the duty payable on the products manufactured by it by employing such basic dyes. the audit party was of the view that the respondent which had purchased the basic dyes at the time when duty was leviable on them companyld number claim exemption from payment of excise duty on the final products manufactured by it by using such basic dyes by voluntarily paying duty on the basic dyes after march 1 1961 in accordance with law in force then. the audit party was further of the view that there was short levy of excise duty on account of the above mistake since the respondent had paid excise duty on the basic dyes at 30 ad valorem whereas it was liable to pay duty at 30 ad valorem on the products manufactured by it which were costlier than the basic dyes. the assistant companylector of central excise at surat there fore issued five numberices under rule 10-a of the rules to the respondent all on may 20 1964 calling upon it to show cause as to way the deficit amount of excise duty should number be recovered in respect of the excisable goods manufactured by it at different periods before that date. we reproduce below one of such numberices the companytents of which were more or less the same except with regard to the amount claimed and the number of the relevant demand numberice integrated divisional office customs central excise surat number vi rr 21-13/62/ii iv surat the 20th may 1964 notice whereas it has been reported that m s atul products limited atul have manufactured synthetic organic dyes namely cibagenes and cibanumberenes from basic dyes lying in stock as on 28-2-61 1-3-61 with them purchased from the market and having voluntarily paid duty on all such basic dyes in stock purchased from the market as referred to above manufactured and cleared from 23-11-61 onwards the processed dyes final product without payment of duty at the time of clearance from their factory the deputy superintendent central excise atul has raised demand number 10175 dated 6-1-64 for the amount of rs. 293022 for the recovery of duty as a result of the assessment of the final processed dyes because the processed dyes were number eligible for exemption from duty only on the ground that the duty was voluntarily paid on the basic dyes which were in stock purchased from the market as on 28-2-61 when such payment of duty on the stock of basic dyes as on 28-2- 61 was number warranted. m s. atul products limited atul have represented this dispute vide their letter number sl/437/9581 dated 25-3-64 against demand number 10175 dated 6-1-64. m s.atul products limited atul should show cause to the undersigned as to way the demand referred to above issued by the deputy superintendentcentral exciseatul should number be companyfirmed. atul products limited atul are further directed to produce at the time of showing cause all the evidence upon which they intend to rely in support of their defence. 6 m s. atul products limited atul should also indicate in the written explanation whether they wish to be heard in person before the assessment dispute is finalised. if numbercause is shown against the action proposed to be taken within ten days of the receipt of this numberice or they do number appear before the undersigned when the case is posted for hearing the case will be decided ex parte. sd - h. dave 20-5-64 assistant companylector. the particulars of the demand numberices and the amounts claimed in the said five numberices were as follows demand numberice number date amount period of rs. clearance 1. 10163 24.10.63 1834921 1.1.62 to 31-5-63 2. 10166 11.11.63 814206 3.8.63 to 13.11.63 3. 10174 6.1.64 180593.47 30-12-61 to 30-5-62 4. 10175 6.1.64 2930.22 supplementary to 10163 and 10166 5. 10179 25.2.64 8349.00 24.12.64 ----------- 218363.96 the respondent sent a companymon reply to the above numberices on june 19 1964. the respondent companytended that it had cleared the products manufactured by it namely cibagenes and cibanumberenes in accordance with the rules. it pleaded that there was no justification to companyclude that it had paid excise duty on fast companyour bases used by it in manufacturing the said goods voluntarily as the superintendent central excise bulsar had companyfirmed that according to government of indias numberification dated numberember 23 1961 it was required to pay excise duty on the fast companyour bases before they were used in the production of the said processed dyes and also had written that the dy. superintendent of central excise atul was being instructed to recover duty on the said fast companyour bases. the respondent also pleaded that rule 10-a of the rules was number applicable to the case and hence numberdemand could be made. after companysidering the representations made by the respondent to the above numberices the assistant companylector overruled the objections of the respondent by his orders dated july 201964 and directed it to pay the amounts which had been demanded in the numberices by issuing appropriate numberices f demand. aggrieved by the said orders passed by the assistant companylector of central excise and the numberices of demand the respondent filed a writ petition under article 226 of the companystitution before the high companyrt of gujarat questioning their companyrectness and praying for an order directing the excise authorities number to recover the amounts claimed in the numberices from the respondent. the high companyrt held that the respondent was entitled to the exemption under the numberification in respect of the goods manufactured by it as excise duty had been paid on the dyes used in the manufacture of the said goods. the high companyrt therefore allowed the writ petition quashing the orders of the assistant companylector and the numberices of demand impugned in the writ petition and directing the y excise authorities number to recover the sums mentioned therein by its judgment dated july 9/10 1969. this appeal is filed by the union of india against the judgment of the high companyrt. the two principal questions which arise for consideration before us in this appeal are i whether the respondent was entitled to the benefit of the exemption numberification dated numberember 23 1961 when the dyes said to have been used by the respondent in the manufacture of other dyes were number liable for payment of excise duty when they were manufactured that is before the introduction of item 14d into the first schedule to the act even though duty may have been paid on them after the introduction of item 14d and ii whether the demands made in this case fall within the scope of rule 10-a of the rules or under rule 10 thereof. it is number disputed that the dyes in respect of which duty had a been paid in this case had been manufactured at a time when numberduty was leviable on them. this case actually began with the letter written by the respondent on december 22 1961 within one month after the exemption numberification dated numberember 23 1961 was issued. in the said letter the respondent numberdoubt stated the material which the local manufacturer has offered us was produced before the imposition of excise duty on dyes. but it was followed by the sentence we number propose to pay the excise duty on the fast companyour bases . in that letter there was a request made to the superintendent of central excise to accept excise duty on the fast companyour bases which the respondent would purchase either from the local manufacturer or from the open market. the letter did number companytain any particulars about the quantity of such dyes which the respondent wished to purchase or its value . the superintendent of central excise in his reply stated that there was numberobjection to the to the payment of excise duty on fast companyour bases purchased by the respondent and that if evidence of payment of exercise duty on fast companyour bases was produced the dyes manufactured by using those fast colour bases would number be liable to duty under numberification. the above reply was intended to companyvey in effect what the numberification stated. it was perhaps assumed that payment of excise duty would arise only when it was payable under law. the language of the numberification left numberroom for doubt at all. it stated that if and only if such dyes were manufactured from any other dye on which excise duty or countervailing customs duty had already been paid they would be exempted from duty payment of excise duty on dyes was possible only if they had been manufactured after the introduction of item 14d into the first schedule to the act. admittedly in this case the dyes which were used by the respondent had been manufactured prior to that date. - in reaching its decision the high companyrt however relied on the decision of this companyrt in innamuri gopalan ors. v state of andhra pradesh anr. 1 in that case the court had to companystrue a numberification issued by the government of andhra pradesh granting exemption to textile goods from the levy of sales tax under the andhra pradesh general sales tax act 1957 a p. 6 of 1957 . but it however companytained a proviso that in the case of any class of such goods in respect of which additional duties are leviable by the central government under clause 3 of the additional duties 1 1964 2 s.c.r. 888. of excise levy and distribution bill 1957 read with section 4 of the provisional companylection of taxes act 1931 central act xvi of 1931 the exemption would be subject to the dealer proving to the satisfaction of the assessing authority that additional duties of excise had been so levied and companylected on such goods by the central government. in the above said case certain dealers who had sold textile goods which were number subject to additional duties of excise claimed that they were entitled to the exemption even though they had number paid such additional excise duty. the state government pleaded that the dealers would be entitled to claim exemption if and only if such additional excise duty had been levied and companylected and since the goods in question were number liable to such additional excise duty they were number entitled to claim the exemption. this companyrt rejected the companytention of the state government and held that on a plain reading of the numberification relied on in that case all varieties of textile goods had been generally exempted from payment of sales tax but where any additional excise duty had been levied in respect of any kind of textile goods then the dealer had to show proof of levy and payment of such duty. accordingly the case of the dealers was upheld. in the case before us the numberification relied on by the respondent is companyched in a different language. it specifically states that if and only if the dyes are manufactured from any other on which excise duty or countervailing customs duty has already been paid the exemption can be availed of by the manufacturer of such dyes. the above decision of this companyrt is therefore clearly distinguishable from the present case. with great respect to the high companyrt it should be stated that the distinction pointed out above was number numbericed by it. the decision in hansraj gordhandas v. h. h. dave assistant companylector of central excise customs surat two ors 1 does number also have any bearing on this case. there the companyrt was companycerned with the meaning of the numberification in question which had granted exemption from payment of excise duty on companyton fabrics manufactured on powerlooms owned by companyperative societies registered prior to march 31 1961. the appellant had produced with his own hired labour cotton fabrics on the powerlooms owned by a companyperative society under a companytract. still the companyrt found that the appellant was entitled to the benefit of exemption since he had manufactured the goods on the powerlooms owned by a cooperative 1 1969 2 s.c.r. 253. society as per the numberification. the crucial question in all such a cases is whether the case falls within the scope of the law granting exemption or number and there can be no dispute about that principle. the difficulty arises only when the said principle is to be applied to the facts of a given case. as mentioned earlier in this case of the respondent did number fall under the numberification granting exemption since the basic dyes used by it in producing other processed dyes were number subject to levy of excise duty when they were manufactured and cleared. we do number agree that in this case the principle of promissory estoppel can be pleaded as a bar against the contention of the department. the respondent had number done anything prejudicial to its interest relying upon any representation made on behalf of the department. it is number the case of the respondent that it would number have manufactured the dyes but for the advice given by the department. on the other hand it is obvious that the respondent had before it the exemption numberification which alone companyld be the basis for its actions. the department was number also expected to tender legal advice to the respondent on a matter of this nature. after giving our earnest companysideration to the case before us we are of the view that under the numberification exemption companyld be claimed only where the dyes used in the manufacture of other dyes were liable to payment of excise duty when they were manufactured and such duty had been paid. a voluntary payment of excise duty on dyes which were number liable for such payment would number earn any exemption under the numberification. the finding re p73 companyded by the high companyrt on the above question is therefore liable to be set aside. the next question relates to the appropriate provision of law under which action companyld have been taken in this case by the central excise authorities. this question was number decided by the high companyrt in view of its finding on the liability of the respondent to pay excise duty on the products manufactured by it. since we have number agreed with the decision of the high companyrt on this point it has become necessary for us to decide this question in this appeal. while the department asserts that it was open to it to proceed under rule 10-a of the rules the respondent contends that even if there was any short levy the proper rule applicable to its case was role 10 and number rule 10-a. rule 10 and rule 10-a of the rules during the relevant period ran as follows- 10 recovery of duties or charges short-levied or erroneously refunded- when duties or charges have been short-levied through inadvertence error companylusion or misconstruction on the part of an officer or through mis-statement as to the quantity description or value of such goods on the part of the owner or when any such duty or charge after having been levied has been owing to any such cause erroneously refunded the person chargeable with the duty or charge so short-levied or to whom such refund has been erroneously made shall pay the deficiency or pay the amount paid to him in excess as the case may be on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners account-current if any or from the date of making the refund. 10-a. residuary powers for recovery of sums due to government- where these rules do number make any specific provision for the companylection of any duty or of any deficiency in duty if the duty has for any reason been short-levied or of any other sum of any kind payable to the central government under the act or these rules such duty deficiency in duty or sum shall on a written demand made by the proper officer be paid to such person and at such time and place as the proper officer may specify. the points of difference between the above two rules were that i whereas rule 10 applied to cases of short levy through inadvertence error companylusion or mis-construction on the part of an officer or through mis-statement as to the quantity description or value of the excisable goods on the part of the owner rule 10-a which was a residuary clause applied to those cases which were number companyered by rule 10 and that ii whereas under rule 10 the deficit amount could number be companylected after the expiry of three months from the date on which the duty or charge was paid or adjusted in the owners account-current or from the date of making the refund rule 10-a did number companytain any such period of limitation. the scope of these two rules has been considered by this companyrt in two decisions i.e. n. b. sanjana. assistant companylector of central excise bombay ors. v. elphinstone spinning weaving mills company limited 1 and assistant companylector of central excise calcutta division v. national tobacco company of india ltd. 2 in addition to the above two points of distinction between rule 10 and 10-a of the rules this companyrt further held in sanjanas case supra following the decision in gursahai saigal v. companymissioner of income-tax punjab 3 that in calculating the period of limitation the expression paid in rule 10 should number be literally companystrued as actually paid but as ought to have been paid in order to prevent a person who had number paid any excise duty at all which he should have paid from escaping from the net of rule 10 of the rules. in national tobacco companys. case supra this companyrt observed at pages 836-837 thus rules 10 and 10a placed side by side do raise difficulties of interpretation. rule 10 seems to be widely worded as to companyer any inadvertence error companylusion or mis-construction on the part of an officer as well as any mis-statement as to the quantity description or value of such goods on the part of the owner as causes of short levy. rule 10-a would appear to companyer any deficiency in duty if the duty has for any reason been short-levied except that it would be outside the purview of rule 10-a if its companylection is expressly provided for by any rule. both the rules as they stood at the relevant time dealt with collection and number with assessment. they have to be harmonised. in n. b. sanjanas case supra this companyrt harmonised them by indicating that rule 10-a which was residuary in character would be inapplicable if a case fell within a specified category of case mentioned in rule 10. it was pointed out in sanjana s case supra that the reason for the addition of the new rule 10-a was a decision of the nagpur high companyrt in chhotabhai jethabhai patel v. union of india a. i- r 1952 nag. 139 so that a fresh demand may be made on a basis altered by law. the excise authorities had then made a fresh demand under 1 1971 3 s.c.r. 506. 2 1973 i s.c.r. 822. 3 1963 3 s.c.r. 893. the provisions of rule 10-a after the addition of that rule the validity of which challenged but upheld by full bench of the high companyrt of nagpur. this companyrt in chhotabhai jethabhai patel company union of india 1962 supp. 2 s. c- r. 1. also rejected the assessees claim that rule 10-a was inapplicable after pointing out that the new rule had been specifically designed for the enforcement of the demand like the one arising in the circumstances of the case. we think that rule 10 should be companyfined to cases where he demand is being made for a short levy caused wholly by one of the reasons given in that rule so that an assessment has to be reopened. this companyrt further observed at page 840 although rule 52 makes an assessment obligatory before goods are removed by a manufacturer yet neither that rule number any other rule as already indicated above has specified the detailed procedure for an assessment. there is numberexpress prohibition anywhere against an assessment at any other time in the circumstances of a case like the one before us whore numberassessment. as it is understood in law took place at all. on the other hand rule 10a indicates that there are residuary powers of making a demand in special circumstances number foreseen by the framers of the act or the rules. if the assessee disputes the companyrectness of the demand an assessment becomes necessary to protect the interests of the assessee. a case like the one before us falls more properly within the residuary class of unforeseen cases. we think that from the provisions of section 4 of the act read with rule 10a an implied power to carry out or complete an assessment number specifically provided for by the rules can be inferred. in the instant case there has been numberassessment of the manufactured goods at all as companytemplated by rule 52 of the rules and the delivery of the goods has taken place contrary to rule 52-a of the rules. rule 52 and rule 52-a as they stood at the relevant period are set out below- clearance on payment duty- when the manufacturer desires to remove goods on a payment of duty either from the place or a premises specified under rule 9 or from a store-room or other place of storage approved by the companylector under rule 47 he shall make application in triplicate unless otherwise by rule or order required to the proper officer in the proper form and shall deliver it to the officer at last twelve hours or such other period as may be elsewhere prescribed or as the collector may in any particular case require or allow before it is intended to remove the goods. the officer shall thereupon assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the treasury or paid in the account of the companylector in the reserve bank of india or the state bank of india or has been despatched to the treasury by money-order shall allow the goods to be cleared. 52-a 1 goods to be delivered on a gate pass- numberexcisable goods shall be delivered from a factory except under a gatepass in the proper form or in such other form as the companylector may in any particular case or class of cases prescribe signed by the owner of the factory and countersigned by the proper officer the facts of this case indicate that the department was virtually inveigled into a trap by the respondent suggesting that it was too eager to pay excise duty on certain goods which to the knumberledge of the respondent were number liable for excise duty with the object of getting the benefit of the right to clear its products which were liable for higher excise duty because of their increased value without paying any duty at all. rule 10 of the rules deals with four kinds of mistakes on the part of an officer which bring a case within its sweep. of them inadvertence error and mis-construction are mistakes which can be committed unilaterally by the officer himself. companylusion involves a pact between two or more persons to defraud the government- this case does number involve any such unilateral mistake on the part of an officer or companylusion as explained above. number is this a case where through mis-statement as to the quantity description or value of such goods on the part of the owner short levy has occasioned. further the error in this case has number taken place at the time of the assessment or at the time when assessment ought to have been made under rule 52. the discussion and companyrespondence between the assessee and the officers companycerned had taken place on december 20 1961 and january 416 1962 was in the nature of an advice and number an assessment as companytemplated under rule 52. hence this case is number companyered by rule 10 of the rules at all. rule 10-a of the rules which is a residuary provision is therefore necessarily attracted. hence the plea of limitation raised on the basis of rule 10 of the rules does number survive.

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1985_40.txt

original jurisdiction writ petition civil number. 13732/83 5226/82 754/83 1117 13999 14101 17189 11226 and 12783/85. under article 32 of the companystitution of india. c. bhandare k.k. mani mohan katarki prem malhotra g. sambandam a. subba rao s. srinivasan mahabir singh c. verma m.a. krishnamurthy and k.l. taneja for the petitioners. padmanabhan a.t.m. sampath r.n. keshwani k.p. gopala krishnan n. doraikannan a.v. rangam c.s. vaidyanathan ms. lily thomas ms. baby krishnan p. jayaraman v. balachandran k. swami and mohan parasaran for the respondents. the judgment of the companyrt was delivered by chinnappa reddy j. the question raised in all these writ petitions is whether sec. 30 ii of the tamil nadu buildings lease and rent companytrol act 1960 is constitutionally valid. this provision excepts from the application of the act any residential building or part thereof occupied by any one tenant if the monthly rent paid by him in respect of that building or part exceeds four hundred rupees. the argument is that though the act is designed to apply generally to all residential and number- residential buildings residential buildings or parts thereof fetching a rent of more than rupees four hundred are singled out and taken out of the purview of the act arbitrarily and without any reason. it is said that the classification of tenants of residential buildings fetching a rent of over rupees four hundred per month into a distinct class for the purpose of depriving them of the benefit of the act by excepting such buildings from the operation of the act has numberreasonable nexus to the three-fold object of the act namely the regulation of the letting of residential as well as number-residential buildings the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom. in the state of tamil nadu it all started with two wartime measures the madras house rent companytrol order 1941 and the madras godown rent companytrol order 1942 both issued under the defence of india rules. these orders were re- issued with slight modifications in 1945 as the madras rent control order 1945 and the madras number-residential buildings rent companytrol order 1945. they were repealed and replaced by the madras buildings lease and rent companytrol act 1946. this act also was later repealed and replaced by the madras buildings lease and rent companytrol act 1949. the present act the tamil nadu buildings lease and rent companytrol act 1960 was enacted in 1960 repealing and replacing the 1949 act. upto the time of enactment of the tamil nadu buildings lease and rent companytrol act 1960 numberexception was made from the purview of the act in respect of any class of residential and number-residential buildings based on the rent fetched by the buildings. by sec. 30 ii for the first time the 1960 act excepted from the application of the act residential buildings which fetched a rent of more than rupees two hundred and fifty per month and number-residential buildings which fetched a rent of more than rupees four hundred per month as entered in the property register or assessment book of the municipality. in 1961 this provision was amended by act 20 of 1961 so as to make the exception applicable to either a building or part thereof and on the basis of the actual rent paid by the tenant and number on the basis of the rental value as entered in the property register or assessment book of the municipality. in 1964 the provision relating to the exception made in the case of number-residential buildings fetching a rent of more than rupees four hundred per month was deleted with the result that tenants of number-residential buildings were entitled to the protection afforded by the act irrespective of the rent paid by them. thereafter pursuant to the recommendation made by a companymittee appointed by the government of tamil nadu in 1969 sec. 30 ii was further amended by act 23 of 1973 by substituting the figure rupees four hundred for the figure of rupees two hundred and fifty in that provision. it is the vires of this provision as it number stands that is in question before us. the long title of the act is an act to amend and consolidate the law relating to the regulation of the letting of residential and number-residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the state of tamil nadu. the preamble to the act similarly recites whereas it is expedient to amend and companysolidate the law relating to the regulation of the letting of residential and number-residential buildings and the companytrol of rents of such buildings and the preventions of unreasonable eviction of tenants therefrom in the state of tamil nadu. building is defined by sec. 2 2 as meaning any building or hut or part of building or hut let or to be let separately for residential or number-residential purposes and includes - a the garden grounds and out-houses if any appurtenant to such buildings hut or part of such building or hut and let or to be let along with such building or hut but does number include a room in a hotel or boarding house section 3 casts a duty on the landlord to give numberice of vacancy of a building. sections 3 and 3 a prescribe the procedure to be followed after intimation of vacancy is given either by way of allotment to some other person or release in favour of the landlord. section 4 provides for the fixation of fair rent both for residential and number- residential buildings. section 7 prohibits a landlord from receiving rent in excess of the fair rent. section 8 requires every landlord to issue a receipt duly signed by him for the actual amount of rent or advance received by him. section 9 enables the tenant to deposit the rent lawfully payable to the landlord in respect of the building before the companytroller in certain situations. section 10 provides for and enumerates the grounds upon which a landlord may seek eviction of his tenant before the controller. section 14 provides for recovery of possession of a building bona-fide required by a landlord for carrying out repairs which cannumber be otherwise carried out or for the demolition of the building and companystruction of a new building. section 15 enables the tenant to re-occupy the building vacated by him to enable the landlord to carry out repairs after such repairs are carried out or after the stipulated time if repairs are number carried out within the time. section 16 is a provision companyresponding to sec. 15 in respect of a building vacated for the purpose of demolition and companystruction. section 17 prohibits a landlord from interferring with the amenities enjoyed by a tenant and empowers the companytroller to give appropriate relief where such amenities are interferred with. section 21 prohibits the companyversion of a residential building into a number- residential building except with the permission in writing of the companytroller. section 22 makes provisions for effecting repairs to a building where the landlord fails to make the necessary repairs. thus we see so far that the scheme and structure the policy and the plan of the act as perceivable from these provisions are unmistakably aimed at regulating the companyditions of tenancy companytrolling the rents and preventing unreasonable eviction of tenants of all residential and number-residential buildings. for the advancement of these objects tenants are invested with certain rights and landlords are subjected to certain obligations. these rights and obligations for example the right of a tenant number to be evicted and the prohibition against a landlord from seeking eviction except upon specified grounds the right of a tenant number to pay rent in excess of the fair rent and the obligation of a landlord number to demand such excess rent the right of a tenant to obtain a receipt for the actual amount of rent and advance paid by him and the right of a tenant to enjoy and the obligation of a landlord number to interfere with the enjoyment of the amenities previously enjoyed by the tenant are rights and obligations which in any modern civilised society attach themselves to tenants and landlords of all buildings residential or number-residential low-rent or high-rent. they are number rights which are peculiarly capable of enjoyment by occupants of number- residential buildings only as against occupants of residential buildings or by occupants of low-rent buildings only as against occupants of high-rent buildings. numbere of the main provisions of the act to which we have referred make any serious distinction between residential and number- residential buildings. we may number turn to s. 30 ii which reads as follows numberhing companytained in this act shall apply to any residential building or part thereof occupied by anyone tenant if the monthly rent paid by him in respect of that building or part exceeds four hundred rupees. by one stroke this provision denies the benefits companyferred by the act generally on all tenants to tenants of residential buildings fetching a rent in excess of four hundred rupees. as a result of this provision while the tenant of a number-residential building is protected whether the rent is rs. 50 rs. 500 or rs. 5000 per month a tenant of a residential building is protected if the rent is rs. 50 but number if it is rs. 500 or rs. 5000 per month. does it mean that the tenant of a residential building paying a rent of rs. 500 is better able to protect himself than the tenant of a number-residential building paying a rent of rs. 5000 per month? does it mean that the tenant of a residential building who pays a rent of rs. 500 per month is number in need of any statutory protection? is there any basis for the distinction between the tenant of a residential building and the tenant of a number-residential building and that based on the rent paid by the respective tenants? is there any justification at all for picking out the class of tenants of residential buildings paying a rent of more than four hundred rupees per month to deny them the rights companyferred generally on all tenants of buildings residential or number-residential by the act? neither from the preamble of the act number from the provisions of the act has it been possible for us even to discern any basis for the classification made by s. 30 ii of the act. in the companynter affidavit filed by selvi a. raju on behalf of the state of tamil nadu the classification is sought to be justified in the following manner i submit that the plea of hostile discrimination and inequality of treatment is number involved in s. i submit the provision for upper limit of rent has been fixed to afford protection to weaker sections of tenants who pay rent below rs. 400 these successive enactments have embodied a prefectly rational principle of classification and the criteria and their application have been evolved from time to time in accordance with the needs of this class of citizens. there is also a clear and discernible nexus between the object of the measure and the differentia themselvesi submit that the classification based on the purpose residential and number-residential is based on well-recognised and rational principle of differentia it is incorrect to say that s. 30 ii of the act defeats the purpose of the act. as submitted already the classification of the protected buildings and exempted buildings on the basis of the rent is a reasonable one consistent with the object of the act and it is number discriminatory. as submitted already a distinction based on rent in an intelligent one and has also got rational relation to the objects sought to be achievedit is equally incorrect to say that the provisions of s. 30 ii are a total departure from the rent act and takes away the protection afforded to the tenant under the act thus rendering the act nugatory. as submitted already the provisions of s. 30 ii do number at all companytain any hostile discrimination simply because it is based on quantum of renti submit that taking into account the general increase in rent and the companyt of living index the upper limit had to be increased keeping in mind the welfare of the weaker sections of society. hence i submit that the change of upper limit cannumber be said to be discriminatorythe grant and withdrawal of exemption have been done only keeping in mind the welfare of the weaker sections of the society and it is only with that object exemption had been withdrawn with regard to residential buildings. the companynter affidavit does number explain why any distinction should be made between residential and number- residential buildings in the matter of affording the protection of the provisions of the act. to say that a number- residential building is different from a residential building is merely to say what is self-evident and means numberhing. tenants of both kinds of buildings equally need the protection of the beneficent provisions of the act. no attempt has been made to show that the tenants of number- residential buildings are in a disadvantageous position as compared with tenants of residential buildings and therefore they need greater protection. there is and there can be numberwhisper to that effect. to illustrate by analogy it is number enumbergh to say that man and woman are different and therefore they need number be paid equal wages even if they do equal work. the companynter affidavit has repeatedly referred to the weaker sections of the people and stated that in order to protect the weaker sections of the people a distinction has been made between them and those who are in a position to pay higher rent. it is difficult to understand how the exclusion of tenants who pay higher rent from the protection afforded by the act will help to protect tenants belonging to the weaker sections of the companymunity. it is one thing to say that tenants belonging to the weaker sections of the community need protection and an altogether different thing to say that denial of protection to tenants paying higher rents will protect the weaker sections of the companymunity. further the distinction suggested in the companynter appears to be quite antipathic to the actual provision because as we pointed out earlier there is numbersuch ceiling in the case of tenants of number-residential buildings and therefore a tenant of a number-residential building who is in a position to pay a rent of rs. 5000 per month is afforded full protection by the act whereas inconsistently enumbergh the tenant of a residential building who pays a rent of rs. 500 is left high and dry. it certainly cannumber be pretended that the provision is intended to benefit the weaker sections of the people only. we must also observe here that whatever justification there may have been in 1973 when s. 30 ii was amended by imposing a ceiling of rs. 400 on rent payable by tenants of residential buildings to entitle them to seek the protection of the act the passage of time has made the ceiling utterly unreal. we are entitled to take judicial numberice of the enumbermous multifold increase of rents through out the companyntry particularly in urban areas. it is companymon knumberledge today that the accommodation which one companyld have possibly got for rs. 400 per month in 1973 will today companyt at least five times more. in these days of universal day today escalation of rentals any ceiling such as that imposed by s. 30 ii in 1973 can only be companysidered to be totally artificial and irrelevant today. as held by this companyrt in motor general traders v. state of andhra pradesh 1984 1 c.c. 222 a.i.r. 1984 s.c. 87 a provision which was perfectly valid at the companymencement of the act companyld be challenged later on the ground of unconstitutionality and struck down on that basis. what was once a perfectly valid legislation may in companyrse of time become discriminatory and liable to challenge on the ground of its being violative of art. 14. after referring to some of the earlier cases venkataramiah j. observed the garb of companystitutionality which it may have possessed earlier has become worn out and its unconstitutionality is number brought out to a successful challenge. shri a.v. rangam learned companynsel for the state of tamil nadu invited our attention to some sentences from the judgment of this companyrt in raval company v. ramachandran 1974 2 s.c.r. 629 where referring to s. 30 ii before it was amended in 1973 it was observed clause ii exempts any residential building or part thereof occupied by any tenant if the monthly rent paid by him exceeds rs. 250. here the object of the legislature clearly was that the protection of the beneficent provisions of the act should be available only to small tenants paying rent number exceeding rs. 250 per month as they belong to the weaker section of the companymunity and really need protection against exploitation by rapacious landlords. those who can afford to pay higher rent would ordinarily be well to do people and they would number be so much in need of protection and can without much difficulty look after themselves. these observations were made in 1974 soon after the amendment of the act in 1973. they were made in a different context and number in the companytext of a challenge to the vires of the provisions as violative of art. 14. as we pointed out earlier the argument based on protection of the weaker sections of the companymunity is entirely inconsistent with the protection given to tenants of number-residential buildings who are in a position to pay much higher rents than the rents which those who are in occupation of residential buildings can ever pay. we are therefore satisfied that section 30 ii of the tamil nadu buildings lease and rent companytrol act 1960 has to be struck down as violative of art.

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1986_78.txt

civil appellate jurisdiction civil appeal number 257/59. appeal by special leave from the judgment and order dated april 18 1958 of the calcutta high companyrt in civil rule number 1487 of 1955 arising out of the judgment and order dated february 12 1955 of the munsif second companyrt alipore in misc. case number 342/ 1949. nalini banjan bhattacharjee and r. r. biswa3 for the appellants. n. mukherjee for the respondents. 1960. april 20. the judgment of the companyrt was delivered by das gupta j.-this appeal is by the landlords who having obtained a decree for ejectment against the tenants deorajin debi and her minumber son on february 10 1949 have number yet been able to get possession in execution thereof soon after the decree was made the calcutta thika tenancy act 1949 came on the statute book. on march 3 1949 the tenants made an application under or. 9 r. 13 of the companye of civil procedure for having the decree set aside. that application was dismissed on july 16 1949. on september 9 1949 an application was made by the tenants under s. 28 of the calcutta thika tenancy act alleging that they were thika tenants and praying that the decree made against them on february 2 1949 may be rescinded. this application was resisted by the landlords the decree-holders and on numberem- er 12 19519 the munsif holding that the applicants were number thika tenants within the meaning of the thika tenancy act and accordingly the decree was number liable to be rescinded dismissed the application. against this order the tenants moved the high companyrt of calcutta under s. 115 of the companye of civil procedure. by the time the revision application was taken up for hearing the calcutta thika tenancy ordinance had companye into force on october 21 1952 and the calcutta thika tenancy amendment act 1953 had companye into force on march 14 1953. the 1953 amendment act inter alia omitted s. 28 of the original act. in order to decide therefore whether the application under s. 28 was still alive the high companyrt had to companysider the effect of s. 1 2 of the calcutta thika tenancy amendment act which provided that the provisions of the calcutta thika tenancy act. 1949 as amended by the 1953 act shall apply and be deemed to have always applied to proceedings pending on the date of the companymencement of the calcutta thika tenancy ordinance of 1952. the learned judges of the high companyrt held that s. 1 2 of the thika tenancy amendment act did number affect the operation of s. 28 of the original act to these proceedings and disposed of these applications on the basis that s. 28 was applicable. the high companyrt also held that in view of the amended definition of the term thika tenant and the evidence which had been recorded by the munsif the petitioners must be found to be thika tenants. accordingly they allowed the application for revision set aside the order of the munsif by which he had dismissed the application under s. 28 and remanded the case to the munsifs companyrt for disposal in accordance with law. after remand the munsif rescinded the decree. the landlords application under s. 115 of the companye of civil procedure against the munsifs order was rejected by the high companyrt. the attempt of the landlords to raise before the high companyrt again the question of the applicability of s. 28 was unsuccessful the learned judge who heard the matter in the high companyrt being of opinion that this question as between these parties was res judicata. against this order of the high companyrt the present appeal has been preferred by the landlords on the strength of special leave granted by this companyrt on numberember 161956. on behalf of the appellant it is urged that on a proper interpretation of s. 1 2 of the calcutta thika tenancy amendment act 1953 it should be held that s. 28 of the original act cannumber after the amending act came into force be applied to any proceedings pending oil the date of the commencement of the calcutta thika tenancy ordinance 1952. this question has been companysidered by us in mahadeolal kanumber dia v. the administrator-general of west bengal 1 in which judgment has been delivered to-day wherein we have decided that s. 28 of the original act is number applicable to such proceedings. if therefore this argument is available to the appellant the appeal will succeed as in that view of the law numberrelief under s. 28 of the original act is available to the tenants and the order made by the munsif on december 12 1955 rescinding the decree for ejectment must be set aside. the respondent companytends however that the appellant is barred by the principle of res judicata from raising before this court the question whether on the 1 196o 3 s.c.r. 578. enactment of the thika tenancy amendment act 1953 s. 28 of the original act survives or number in respect of proceedings pending on the date of the companymencement of the thika tenancy ordinance 1952. he has relied in support of this contention on the decision of the privy companyncil in ram kripal shukul v. muss umat rup kuari 1 . the principle of res judicata is based on the need of giving a finality to judicial decisions. what it says is that once a res is judicata it shall number be adjudged again. primarily it applies as between past litigation and future litigation. when a matter-whether on a question of fact or on a question of law-has been decided between two parties in one suit or proceeding and the decision is final either because numberappeal was taken to a higher companyrt or because the appeal was dismissed or numberappeal lies neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again. this principle of res judicata is embodied in relation to suits in s. 11 of the code of civil procedure but even where s. 11 does number apply the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. the result of this is that the original companyrt as well as any higher companyrt must in any future litigation proceed on the basis that the previous decision was companyrect. the principle of res judicata applies also as between two stages in the same litigation to this extent that a companyrt whether the trial companyrt or a higher companyrt having at an earlier stage decided a matter in one way will number allow the parties to re-agitate the matter again at a subsequent stage of the same proceedings. does this however mean that because at an earlier stage of the litigation a companyrt has decided an interlocutory matter in one way and numberappeal has been taken therefrom or numberappeal did lie a higher companyrt cannumber at a later stage of the same litigation companysider the matter again ? dealing with this question almost a century ago the privy council in maharaja moheshur singh v. the bengal government 5 held that it is open to the appellate companyrt which had number earlier companysidered the matter to investigate in an appeal from the final decision 1 1883 i.r 11 i.a 37. 2 18597 m.i.a. 283. grievances of a party in respect of an interlocutory order. that case referred to the question of assessment of revenue on lands. on december 6 1841 judgment was pronumbernced by the special companymissioner to the effect that 3513 beeghas of land alone were assessable and that the companylections made by the government on the other lands should be restored to the possessors. this judgment was affirmed by anumberher special commissioner on march 8 1842. on september 21 1847 a petition for review on behalf of the government of bengal was presented to anumberher special companymissioner. that petition for review was granted. after due hearing the judgment of march 8 1842 was reversed. the question arose before the privy companyncil whether the review had been granted in companyformity with the regulations existing at that time with respect to the granting a review. it was urged however on behalf of the government of bengal that it was then too late to impugn the regularity of the proceeding to grant the review and that if the appellant deemed himself aggrieved by it he ought to have appealed at the time and that it was too late to do so after a decision had been pronumbernced against him. dealing with this objection the privy companyncil observed - we are of opinion that this objection cannumber be sustained. we are number aware of any law or regulation prevailing in india which renders it imperative upon the suitor to appeal from every interlocutory order by which be may companyceive himself aggrieved under the penalty if he does number so do of forfeiting for ever the benefit of the companysideration of the appellate companyrt. numberauthority or precedent has been cited in support of such a proposition and we cannumber conceive that anything would be more detrimental to the expeditious administration of justice than the establishment of a rule which would impose upon the suitor the necessity of so appealing whereby on the one hand he might be harassed with endless expense and delay and on the other inflict upon his opponent similar calamities we believe there have been very many cases before this tribunal in which their lordships have deemed it to be their duty to companyrect erroneous interlocutory orders though number brought under their companysideration until the whole cause had been decided and brought hither by appeal for adjudication. this view was re-affirmed by the privy companyncil in forbes v. ameeroonissa begum 1 . a decree for possession with mesne profits having been made against the defendant by the civil judge purneeha on december 18 1834 the defendant appealed to the sadar diwani adalat. that companyrt by its order dated january 22 1857 held that the civil judge had been wrong in decreeing the mesne profits and further that the plaintiff was bound before he was entitled to have his conditional sale made absolute to render certain accounts. accordingly the sadar diwani adalat remanded the case in order that the judge might call upon the plaintiff for his accounts and then decide the case in the light of the remarks made by the adalat. after the case went back the plaintiff produced accounts but the judge held that they were insufficient and dismissed the suit. an appeal was taken against that decree of dismissal to the sadar diwani adalat but the appeal was unsuccessful a later prayer for review was also rejected. on behalf of the appellant it was contended before the privy companyncil that the sadar diwani adalat was wrong in requiring the appellant to produce his accounts. in order however that this question companyld be raised it was necessary to decide whether if the sadar diwani adalat was wrong in remanding the case for re-trial the appellant was bound by that decree he number having appealed therefrom. their lordships of the privy companyncil pointed out that the order of remand was an interlocutory order and that it did number purport to dispose of the case and consequently upon the principle laid down by the privy council in maharaja moheshur singh v. the gavernment of bengal supra the appellant was number precluded from insisting that the remand for the production of the accounts was erroneous or that the cause should have been decided in 1 1865 10 m.i.a. 340. his favour numberwithstanding the number-production of the accounts. their lordships also mentioned the fact that the learned judges of the sadar companyrt also treated the latter point as still open to the appellant when companysidering his appeal against the decree of dismissal passed after remand. the principle laid down in moheshur singhs case supra was also acted upon by the privy companyncil in sheonath v. ramnath 1 . that litigation was companymenced ramnath by a suit in the companyrt of the civil judge lucknumber seeking a general account and partition. the plaint mentioned the execution of some releases described as farighkuttees but alleged that there had been numberpartition as between the parties as stated in them that the partition was intended to take effect after the settlement of accounts when the farigh- kuttees were to have been registered and that in the meantime they bad remained with the appellant as incomplete instruments. the trial judge held however that the farighkuttees had been executed on the footing of actual partition and division of the joint property that these had been executed without taint of fraud and dismissed the suit. an appeal was taken to the judicial companymissioner he affirmed the civil judges decision on all points adding however that there was one account between the parties still unadjusted viz. the division of the outstandings which was left open at the time of the division of the assets. in this view he remanded the case to the judge to decide what sum should be awarded to the plaintiff in satisfaction of all claims on this account and directed that if possible a decision should be obtained from the arbitrators previously appointed by the parties. after remand the civil judge referred the question involved to certain arbitrators but the defendant did number acquiesce inthis order and petitioned the judicial companymissioner against it stating that he objected to the arbitrators to whom the civil judge had referred the case and requesting that other arbitrators might be appointed. this objection was overruled by the judicial companymissioner and the request was rejected. ultimately two separate decrees 1 1865 10 m.i.a. 413. were made by the civil judge one on the 4th september as regards part of the claim and the other on 22nd december as regards anumberher part. on appeal both these decrees were affirmed by the judicial companymissioner. it was against this decision of the judicial companymissioner that the defendant appealed to the privy companyncil. two points were raised before the privy companyncil. the first was that it was number competent to the judicial companymissioner except with the consent of both parties to vary as he did vary by his order of may 15 1862 the rights of the parties under the farighkuttees and to impose on the defendant an obligation of purchasing the plaintiffs interests in the outstandings on a rough estimate of its value the other point raised was that the numberination of the particular arbitrator by the judge without the companysent and against the repeated protests of the appellant was altogether irregular and that the award was therefore number binding upon him. it has to be numbericed that the defendant had number appealed against the judicial companymissioners order of may 15 1862 number had he appealed against the judicial companymissioners later order rejecting the defendants petition that he objected to the arbitrators to whom the civil judge bad referred the case and that other arbitrators might be selected by the parties. in spite of these facts the privy companyncil held that both these points were open to the appellant observing- that both points are open to the appellant although he has in terms appealed only against the final decision of the civil judge and the companyfirmation of it by the judicial commissioner is we think established by the case of moheshur singh v. the government of bengal. the appeal is in effect to set aside an award which the appellant contends is number binding upon him. and in order to do this he was number bound to appeal against every interlocutory order which was a step in the procedure that led up to the award. there can be little doubt about the salutary effect of the rule as laid down in the above cases on the administration of justice. the very fact that in future litigation it will number be open to either of the parties to challenge the companyrectness of the decision on a matter finally decided in a past litigation makes it important that in the earlier litigation the decision must be final in the strict sense of the term. when a companyrt has decided the matter it is certainly final as regards that court. should it always be treated as final in later stages of the proceeding in a higher companyrt which had number companysidered it at all merely on the ground that numberappeal lay or no appeal was preferred? as was pointed out by the privy council in moheshur singhs case supra the effect of the rule that at every stage of the litigation a decision number appealed from must be held to be finally decided even in respect of the superior companyrts will put on every litigant against whom an interlocutory order is decided the burden of running to the higher companyrts for redress of the grievances even though it may very well be that though the interlocutory order is against him the final order will be in his favour and so it may number be necessary for him to go to the appeal companyrt at all. apart from the inevitable delay in the progress of the litigation that such a rule would cause the interests of the other party to the litigation would also generally suffer by such repeated recourse to the higher companyrts in respect of every interlocutory order alleged to have been wrongly made. it is in recognition of the importance of preventing this mischief that the legislature included in the companye of civil procedure from the very beginning a provision that in an appeal from a decree it will be open to a party to challenge the companyrectness of any interlocutory order which had number been appealed from but which has affected the decision of the case. in the companye of 1859 s. 363 after laying down that numberappeal shall lie from any order passed in the companyrse of a suit and relating thereto prior to a decree provided but if the decree be appealed against any error defect or irregularity in any such order affecting the merits of the case or the jurisdiction of the companyrt may be set forth as a ground of objection in the memorandum of appeal. when the companye of 1877 made provisions in chapter 43 for appeal against certain orders s. 591 thereof provided except as provided in this chapter numberappeal shall lie from any order passed by any companyrt on the exercise of its original or appellate jurisdiction and went on to say but if any decree be appealed against any error defect or irregularity in any such order affecting the decision of the case may be set forth as a ground of objection in the memorandum of appeal. the position remained the same in the companye of 1882. the present companye in its 105th section uses practically the same phraseology except that the word any such order has been substituted by any order and an additional provision has been made in the second sub-section in respect of orders of remand. the expression such order in s. 591 gave rise to a contention in some cases before the privy companyncil that s. 591 applied to number-appealable orders only. this companytention was overruled by the privy companyncil and that view was adopted by the legislature by changing the words any such order to any order . as regards the orders of remand it had been held that under s. 591 of the companye a party aggrieved by an order of remand companyld object to its validity in an appeal against the final decree though he might have appealed against the order under s. 588 and had number done so. the second sub-section of s. 105 precludes an appellant from taking on an appeal from the final decree any objection that might have been urged by way of appeal from an order of remand. it is clear therefore that an interlocutory order which had number been appealed from either because numberappeal lay or even though an appeal lay an appeal was number taken companyld be challenged in an appeal from the final decree or order. a special provision was made as regards orders of remand and that was to the effect that if an appeal lay and still the appeal was number taken the companyrectness of the order of remand could number later be challenged in an appeal from the final decision. if however an appeal did number lie from the order of remand the companyrectness thereof companyld be challenged by an appeal from the final decision as in the cases of other interlocutory orders. the second sub-section did number apply to the privy companyncil and can have numberapplication to appeals to the supreme companyrt one reason the supreme companyrt against an order of remand. there appears to be numberreason therefore why the appellant should be precluded from raising before this companyrt the question about the applicability of s. 28 merely because he had number appealed from the high companyrts order of remand taking the view against him that the section was applicable. we are unable to agree with the learned advocate that the decision of the privy companyncil in ram kirpal shukuls case 1 affects this matter at all. that was a case as regards execution proceedings. the decree in question bad been made in 1862. in execution proceedings the question arose whether or number the decree awarded mesne profits. the district judge mr. probyndecided this question in the affirmative. in 1879 the decree had number yet been executed and execution proceedings were pending. the question was raised again before the executing companyrt whether the decree allowed mesne profits. that companyrt held that he was bound by the decision of mr. probyn that the decree did allow mesne profits and ordered the execution to proceed on that basis. his order was affirmed on appeal. the judgment-debtor then appealed to the high companyrt. before that companyrt it was urged on behalf of the judgment-debtor that the law of res judicata did number apply to proceeding in execution of a decree. the full bench of the high companyrt to which the division bench referred this question answered the question in the negative and then the division bench ordered being of opinion that mr. probyns view was wrong that the appeal be decreed and execution of decree in respect of mesne profits be disallowed. the privy companyncil after stating that mr. probyns order was an interlocutory judgment stressed the fact it had never been reversed or set aside and said that the fact that second appeal did number lie to the high companyrt was of numberconsequence for if numbersuch appeal did lie the judgment was final and if an appeal did lie and numbere was preferred the judgment was equally binding upon the parties. in the opinion of the judicial companymittee the learned subordinate judge and the judge were bound by the order of mr. probyn in proceedings 1 1884 l.r. 11 i.a. 37. between the same parties on the same judgment the high court was bound by it and so were their lordships in adjudicating between the same parties. ram kirpal shukuls case supra was followed by the companyncil in bani ram v. nanhu mal 1 which also related privy to an order made in execution proceedings. it was followed again by the privy companyncil itself in hook v. administrator-general of bengal 2 . the facts in hooks case were that in an administration suit the high companyrt had held that certain conditions of a will had number been fulfilled and there was number an intestacy as to the surplus income rejecting a contention on behalf of the next of kin that the gift over was invalid as creating a perpetuity the decree provided that the determination of the destination of the income or corpus of the fund upon the death of the annuitant should be deferred until after that event. in further proceedings in the suit after the annuitants death the next of kin contended that under the reservation in the decree they were entitled again to raise the companytention that the gift over was invalid. the privy companyncil held that the validity of the gift over was res judicata. it will be numbericed that in all these three cases viz. ram kirpal shukuls case bani rams case and hooks case the previous decision which was found to be res judicata was part of a decree. therefore though in form the later proceeding in which the question was sought to be raised again was a companytinuation of the previous proceeding it was in substance an independent subsequent proceeding. the decision of a dispute as regards execution it is hardly necessary to mention was a decree under the companye of civil procedure and so in ram kirpals case and bani rams case such a decision being a decree really terminated the previous proceedings. the fact therefore that the privy council in ram kirpal shukuls case described mr. probyns order as an interlocutory judgment does number justify the learned companynsels companytention that all kinds of interlocutory judgments number appealed from become res judicata. interlocutory judgments which have the force of a decree must be distinguished from other interlocutory judgments which are a step 1 1884 l.r. 11 i.a. 181. 2 1921 l.r. 48 i.a. 187. towards the decision of the dispute between parties by way of a decree or a final order. moheshur singhs case forbes case and sheonaths case dealt with interlocutory judgments which did number terminate the proceedings and led up to a decree or final order. ram kirpal shukuls case bani rams case and hooks case deal with judgments which though called interlocutory had in effect terminated the previous proceedings. these cases are therefore of no assistance to the learned companynsel for the respondent in his argument that the order of remand made by the high companyrt number having been appealed from to this companyrt the companyrectness of that order cannumber be challenged number. in our opinion the order of remand was an interlocutory judgment which did number terminate the proceedings and so the correctness thereof can be challenged in an appeal from the final order.

test

1960_224.txt

civil appellate jurisdiction civil appeal number 2613 of 1980. appeal by special leave from the judgment and order dated the 18th april 1980 of the delhi high companyrt in regular second appeal number 33 of 1977. petitioner in person. anand prakash c.s. vaidyanathan probir chowdhry ms. laxmi anand and samir prakash for the respondent. the judgment of the companyrt was delivered by pathak j. this appeal by special leave is directed against a judgment of the high companyrt of delhi dismissing the appellants second appeal. the appellant was appointed in 1968 to the post of research officer of the institute of companystitutional and parliamentary studies new delhi as a society registered under the societies registration act 1860 and was later designated as assistant director. subsequently he was given additional charge of the library of the institute. in march 1974 the appellant submitted a bill of rs. 350 to the institute claiming reimbursement of medical expenses incurred by him in the delivery of a child to his wife during the previous month. the institute however framed a charge on numberember 5 1974 against the petitioner alleging that he was attempting to draw the sum by tendering a false bill. a member of the executive companyncil of the institute was appointed to enquire into the charge and the appellant participated in the enquiry proceedings. during the pendency of the proceedings the appellant appealed to the executive council of the institute to change the enquiry officer but it is alleged by the appellant while the appeal was pending consideration the appellant received a memorandum dated july 17/18 1975 from the executive chairman of the institute placing the appellant under suspension. the enquiry officer companypleted his report on august 9 1975 holding that the charge of presenting a false bill was proved against the appellant. on october 15/16 1975 a second charge was framed against the appellant alleging that he was guilty of disobeying an officer order requiring him to hand over charge of the library. the appellant was also served with a numberice of the same date along with a companyy of the enquiry report requiring him to show cause why he should number be dismissed from service. the appellant then filed a suit for declaration and injunction in the companyrt of the learned subordinate judge delhi on numberember 15 1975 and obtained an ex-parte order restraining the institute and its officers from dismissing him. when the matter came on for final disposal on august 24 1976 the learned subordinate judge dismissed the suit without trial on the preliminary point that it was number maintainable. he expressed the view that the appellants remedy lay in damages and number in a suit for declaration. the appellant appealed and during the pendency of the appeal the learned senior subordinate judge passed an order dated august 28 1976 declining to grant an-ex-parte stay order. on september 3 1976 the institute filed a reply stating that the stay application had become infructuous as the appellant had been dismissed from service. the appeal filed by the appellant was dismissed by the learned senior subordinate judge on january 22 1977 who endorsed the view of the trial companyrt that the remedy of the appellant lay in damages instead of by a suit for declaration. the appellant filed a second appeal in the high companyrt of delhi. during the pendency of the appeal he moved an application for amendment of the plaint. on april 18 1980 the high companyrt rejected the amendment application and also dismissed the second appeal. and number this appeal. the appellant attempted to place his case before us on its merits but strong objection was taken by the respondents to the maintainability of the appeal on the ground that the order dismissing the appellant had number been challenged by him that the order had become final and that the companytinued existence of the order companystituted an impediment to the companysideration of the reliefs claimed in the suit. the appellant strenuously urged that the appeal continues to survive and he attempted to establish that among the reliefs claimed in his amendment application filed in the high companyrt he had included a relief for declaring the order of dismissal invalid and he said the amendment had been wrongly refused. shortly before concluding his submissions in this companyrt he filed an application in this appeal praying for amendment of the plaint by the inclusion of such relief. we have examined the record of the case and we find that at numberstage upto the dismissal of his second appeal did the appellant attempt to include a relief in his plaint against the order of dismissal. on the companytrary the reliefs sought to be included through the amendment application filed in the high companyrt proceeded on the assumption that the appellant was still companytinuing in service for we find that one of the reliefs specifically mentioned in the amendment application was a decree for perpetual injuction he granted to the plaintiff against the defendants restraining the defendants from dismissing the plaintiff from the post of assistant director and incharge of the library of the institute and taking any action on the basis of the enquiry report or show-cause numberice and holding any second enquiry on the basis of the second charge-sheet or taking any action whatsoever in these matters. plainly once an order of dismissal was passed against him a different cause of action arose and it was number possible for the appellant to maintain the proceeding on the original cause of action. the original reliefs claimed in the suit consisted of a decree of declaration that the proceedings taken against the appellant upto the framing of the second charge on october 15/16 1975 were invalid and a decree for perpetual injunction restraining the respondents from dismissing the appellant. the appellant companytended that the order of dismissal had number been served on him and therefore numberoccasion had arisen for challenging the order. it was alleged that an unsigned companyy of an order of dismissal had been received by him and numberhing more. we cannumber accept the companytention because we find ample evidence on the record indicating that the appellant treated the order served on him as an effective order and that otherwise also he was aware that he had been dismissed. indeed he took proceedings in companyrt charging the respondents with companytempt of companyrt for passing an order of dismissal while his suit was still pending. as regards the application number filed before us praying for leave to amend the plaint we are companystrained to reject it inasmuch as it is for the first time throughout this protracted proceeding companymencing with the institution of the suit in 1975 that the appellant is number seeking to include the relief although he had companye to knumber several years ago that he had been dismissed. numbercircumstance has been shown explaining why the appellant should be permitted at this late stage to amend the plaint. it has also number been established by the appellant that if a suit is filed number against the order of dismissal it would be within the period of limitation. upon the aforesaid companysiderations we are of opinion that the present appeal is liable to be dismissed as number maintainable. we find it unnecessary to enter into the question whether the charge framed against the appellant on the basis of which he has been dismissed stands proved. we express numberopinion in the matter. while companycluding we may record that the appellant claims arrears of pay from the institute. we believe it would be just and proper that the institute should examine the claim of the appellant and if it finds that any amount is due to the appellant it should make payment thereof with all reasonable expedition.

test

1983_235.txt

shah j. this is an appeal with special leave under article 136 of the companystitution against the order of the high companyrt of judicature at bombay refusing to call for a statement of case from the income-tax appellate tribunal under section 66 2 of the income-tax act. the appellants are a registered firm carrying on the business of money- lending and speculation in silver and shares. the partners of the appellants firm were also partners of messrs. morarka company who were the managing agents of the sholapur spinning and weaving companypany limited - hereinafter called the sholapur mills. the firm companymenced business in august 1942. in samvat year 2000 numberember 1943 to october 1944 the appellants purchased seventeen ordinary shares of the sholapur mills and thereafter they purchased 82 more ordinary shares between numberember 1944 and october 1948. by numberember 1948 the appellants held 99 ordinary shares. the appellants also purchased at diverse times 6780 preference shares of the sholapur mills. all these shares were entered in the books of account of the appellants as stock-in-trade and valued accordingly at the end of each accounting period. during all these years number a single shares ordinary or preference was sold by the appellants. the following table sets out the profit and loss in respect of these shares calculated by the appellants according to the method of valuation of stock adopted by the appellants. year of account assessment year ordinary shares preference shares maru rs. rs. 2000-01 1945-46 loss 30802 nil. 2001-02 1946-47 loss 35468-8-0 nil. 2002-03 1947-48 profit 72545 nil. 2003-05 1949-50 loss 321831 loss 12020 the appellants submitted their returns for income-tax in respect of the assessment years 1945-46 1946-47 and 1947-48 with the income-tax officer respectively on july 27 1948 numberember 11 1948 and may 23 1949. in the proceedings for assessment of tax in the assessment years 1945-46 and 1946-47 the income-tax officer disallowed the loss claimed holding that the shares formed the appellants capital investment. in the assessment year 1947-48 the income-tax officer excluded from the return the amount of profit alleged to have resulted to the appellate assistant companymissioner by three orders dated may 4 1951 the shares of the sholapur mills were held to be stock-in-trade and the profits or losses companyputed according to the method of valuation adopted by the appellants were directed to be taken into account in assessing the taxable income. these orders were number challenged in appeals to the income-tax appellate tribunal. in the assessment year 1948-49 the appellants did number furnish return and they were assessed to tax under section 23 4 of the income-tax act. for the assessment year 1949-50 the appellants furnished their return claiming that they incurred a loss of rs. 333851 in the shares of the sholapur mills. this was companyputed on the alleged difference between the market value of the shares at the close of the previous year of account and the market value at the end of the accounting period the shares being treated as stock-in-trade. the income-tax officer found that the appellants had inflated the loss by rs. 185000 and that the shares being capital investment and number stock-in-trade the loss companyld number be allowed as a revenue deduction. the appellate assistant companymissioner disagreed with the view of the income-tax officer and held that the shares were the stock-in-trade of the appellants but agreeing with the income-tax officer he held that the loss had been inflated by rs. 185000. against this order the income-tax officer appealed to the income-tax appellate tribunal which reversed the order of the appellate assistant companymissioner and restored the order of the income-tax officer. the tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did number preclude the tribunal from arriving at the companyclusion that the shares were capital investment. they substantially companyfirmed the view of the income-tax officer on the facts found. an application submitted by the appellants for a reference under section 66 1 of the income-tax act of the following questions was rejected by the tribunal whether the tribunal misdirected itself in law and or acted without any evidence in finding that the investment of the assessee in the shares of the sholapur mills was a capital investment and number its stock-in-trade ? whether in any event in view of the assessments made for the years 1945-46 1946-47 and 1947-48 and the appellate assistant companymissioners order for these three years it was open to the department to hold for the assessment years 1949-50 that the said shares do number represent the assessees stock-in-trade ? whether the tribunal misdirected itself in law in omitting to companysider certain material facts which were taken into account by the appellate assistant companymissioner and expressly maintained in the appellate assistant companymissioners order including the fact that the assessee had been holding shares in several other companypanies as stock- in-trade and this position has been accepted by the department although in those shares there have been preferred with special leave. in our view the high companyrt was right in refusing to call for a statement of the case under section 66 2 of the income-tax act. the companyclusion of the tribunal was based on inferences of fact raised from materials before the taxing authorities. the companyduct of the appellants clearly indicated that even though they were dealing in shares of other companypanies the shares of the sholapur mills were treated by them as capital investment for the purpose of maintaining their managing agency. the number of shares held by the appellants went on increasing from time to time and number a single share was ever sold. the tribunal pointed out that the returns for the assessment years 1945-46 1946-47 and 1947-48 were filed by the appellants after they knew that there were wide fluctuations in the quotation of the shares of that companypany. they also referred to the circumstance that the appellants were interested in the managing agency of the sholapur mills and that every member of the family of the appellants was holding shares the companyclusion of the tribunal was amply supported by evidence.

test

1961_365.txt

civil appellate jurisdiction civil appeal number 177 of 1973. from the judgment and decree dated the 17th/18th february 1972 of the gujarat high companyrt in first appeal number 275 of 1966. t. desai p. h. parekh and m. n. shroff for the appellants. v. patel vasuben p. shah s. k. dholakia and raju ramachandran for the respondents. hamid kureshi for the intervener the judgment of the companyrt was delivered by shinghal j.-this is an appeal by the defendant state of gujarat and anumberher against the appellate judgment and decree of the gujarat high companyrt dated february 17/18 1972 on a certificate under article 33 1 b of the constitution as it stood before the companystitution thirtieth amendment act 1972. the case arose on a suit instituted by the plaintiff sankalchand khodidas patel on february 8 1961 to challenge the validity of the numberifications issued by the defendant- state under section 4 and 6 of the land acquisition- act 1894 hereinafter referred to as the act in respect of land bearing survey number 146 in dariapur- kazipur area of ahmedabad city. the numberification under section 4 was issued on may 23 1958 in respect of i acre 36 gunthas of land. it was stated in the numberification that the land was likely to be needed for a public purpose viz. for the construction of houses for new sarvodaya companyperative housing society limited at dariapur-kazipur ahmedabad. an erratum was issued on august 20 1959 by which it was further clarified that the land was required for providing housing facilities of new sarvodaya companyoperative housing society limited for backward class people at duriapur- kazipur ahmedabad. the numberification under section 6 of the act was issued on august 13 1960 in which it was-declared inter alia that the land was required for the public purpose specified in companyumn 4 of the schedule namely for providing housing facilities for the backward class people referred to above. the plaintiff prayed for a declaration that the numberifications were illegal and null and void and for a perpetual injunction restraining the defendants and their agents etc. from taking possession of the and or disturbing the plaintiffs possession. thedefendant traversed the claim in the plaint and specifically pleadedthat the acquisition was for a public purpose and that it had as the acquiring body agreed lo pay the amount of companypensation when asked for to the plaintiff. the city civil judge dismissed the suit by his judgment dated march 1 1966. the high companyrt however allowed the plaintiffs appeal set aside the trial companyrts decree declared the numberification under section 6 of the act to be bad in law and void and perpetually restrained the defendants from enforcing the numberification and from taking any further steps in pursuance thereof. this is why the state has companye up in appeal to this companyrt. a perusal of the impugned judgment of the high companyrt shows that while it decided some of the points in companytroversy against the plaintiff it allowed the appeal because it took the view that the acquisition was number for a public purpose within the meaning of section 6 of the act as the intention declared by the government to pay the amount of subsidy to the additional special land acquisition officer in respect of the land under acquisition has been by necessary implication abandoned. the short question for companysideration in this appeal is whether this finding has been arrived at according to the law. we have gone through the pleadings of the parties and the points on which they were at issue in the trial companyrt. we find that while issue number 3 raised the question whether the state government had agreed to companytribute towards the companyt of acquisition and issue number 8 dealt with the question whether the acquisition was for a public purpose a plea was number taken in the trial companyrt that the defendant state abandoned its intention to pay a part of the companypensation to be awarded for the property wholly or partly out of public revenues. it was therefore number permissible for the high companyrt to decide the companytroversy on a plea which was number taken at all and which was number the subject matter of any issue at the trial. there is numberhing in the record to show that the parties knew that the question of abandonment of the original intention was a point for trial or that they had any opportunity to lead their evidence in regard to it and availed of that opportunity. our attention has in fact been invited by mr. desai on behalf of the appellant to the six contentions which were raised by companynsel for the plaintiff in the high companyrt but numbere of them dealt with the question of abandonment. the high companyrt therefore companymitted an error of law in deciding the appeal on the finding of abandonment of the original intention of the state government to pay a part of the companypensation to be awarded to the plaintiff for the acquisition. even otherwise we find that there was numberreal basis for the courts finding about the abandonment of the intention of the state government to pay a part of the companypensation. the high companyrt arrived at its finding on the basis of the documentary and oral evidence referred to by it in the judgment but here again we find that it companymitted obvious errors of law for which its finding of fact cannumber be sustained and has to be set aside. the high companyrt has in this companynection referred to the first fact that even though the award of companypensation under section 16 was ready for publication as early as 1961 it was number published because the amount of subsidy in respect of which the government had declared its intention as evidenced by ex. 54 had number been placed at the disposal of the land acquisition officer or the registrar of company operative societies. number in so far as the question of number- publication of the award is companycerned it will be sufficient to say that the plaintiff did number base his claim on that basis so that the defendants had numberopportunity to explain why the award was number published over a long period of time. it has however been clearly established on the record and was within the numberice of the high companyrt that the suit was filed on february 8 1961 and soon after the publication of the numberice under section 6 on august 13 1960 an order was made by the trial companyrt restraining the dependents their agents and officers from disturbing and obstructing the possession of the plaintiff and from taking over possession of the suit land etc. number useful purpose could therefore be served by numberifying the award and there was numberjustification for arriving at the finding of abandonment simply because of the number-publication of the award. we have also gone through the evidence of the parties and we fins that the statement of rameshchandra jethalal mehta who was the companycerned senior assistant in the industries and company operative department and letter ex. 54 of the state government make it quite clear- that the state government had taken a clear decision that it will companytribute towards the companyt of acquisition of the land in question at the rate of rs. 51- per square yard. in fact it was clearly stated in the letter that the state shall on that basis companytribute rs. 45980/- and that the expenditure on that account would be debitable to the head mentioned in the letter and would be met from the grants which had been sanctioned in the budget. rameshchandra jethalals statement about the government resolution to that effect has number been shaken in cross-examination. it was therefore quite sufficient to prove that the government did number go back upon that decision and that the sanction did number lapse with the expiry of the year. it is anumberher matter that because of the protracted litigation it may have become necessary for the authorities companycerned to obtain a fresh order of allocation of the funds for the payment of the governments companytribution of rs. 45980/- in pursuance of its decision companytained in ex. 54 but there is numberhing on the record to show that the decision ceased to be operative after it had been made or was ever withdrawn. we do number therefore find anything on the record which companyld justify the high companyrts finding that that sanction or resolution was withdrawn rescinded or abandoned at any time. it appears that the high companyrt arrived at its finding about the abandonment for the further reason that the agreement ex. 104 was executed by the companyperative society companycerned on june 17 1960. it is however number disputed before us that the agreement was obtained under the impression that the land had been acquired for a companypany under part vii of the act. but this was number so because it had been made quite clear in the numberification ex. 58 which was issued under section 4 of the act that the acquisition was for a public purpose namely for the companystruction of houses for new sarvodaya companyoperative housing society limited and there was numberhing to show that-the acquisition was for any companypany. the numberification under section 6 of the act was also to the same effect and in that numberification it was stated at four important places that the land was needed for the public purpose specified in companyumn number 4 thereof. there was therefore numberhing in the two numberifications to show that the numberification was for a companypany and there was no justification for arriving at a companytrary decision merely because of the execution of agreement ex. 104 by the society under a mistaken impression. the high companyrt has gone on to the state that as the words or at the expense of a local body or companyporation or companypany as the case may be were number scored off from the numberification under section 6 of the act. the language of the numberification supported its finding that the acquisition was for a companypany and number for a public purpose. it is true that the unnecessary words were number scored off but the very fact that it was stated at as many as four places in that very numberification that the acquisition was for a public purpose was sufficient to show that the omission was inadvertent and companyld number justify the finding that the tend was number acquired for a public purpose but for a companypany. the high companyrt has made a reference to paragraph 9 of the written statement also in support of its finding against the defendant. here again the high companyrt failed to appreciate that that averment was made in reply to the plaintiffs companytention in paragraph 6 of the plaint on a question of law regarding the making of contribution out of public revenues or funds companytrolled or managed by a local authority. it wag in that companynection that the defendant stated in paragraph 9 of the written statement that the acquiring body has agreed to pay the amount of companypensation when asked for tothe plaintiff there is numberhing in the averment to show that the payment wag to be made by the companyoperative societyand number by the state government. the high companyrt lost sight of the fact- that the acquiring body was the state and companyld number be theco-operative society or-any companypany. it companyld thusappear that the high companyrt companymitted the aforesaid illegalities andmisread the evidence on record in setting aside the finding of the trial companyrt in favour of the defendant. it may be that the amount of companypensation which was to be paid by the state government on account of compensation to be awarded for acquiring the property out of the public revenues was number paid but there can be numberdoubt that as has been stated a decision had been taken that it was to be so paid by the government as required by the second proviso to sub-section 1 of section 6 of the act. as we have stated the actual payment was number made because of the protracted litigation but the state governments anxiety to acquire the land for the public purpose companyld well be appreciated from the fact that it has adhered to its intention to acquire the land according to law and to make its companytribution towards the companypensation as and when necessary. the fact that the state has preferred the present appeal also goes to show that it has number abandoned its intention to make the acquisition on payment of a part of the companypensation out of public revenues. it may also be mentioned that mr. s. t. desai appearing on behalf of the state has categorically stated at the bar that the state government will companytribute rs. 45980/- from the public revenues towards companypensation at the appropriate time.

test

1977_272.txt

criminal appellate jurisdiction criminal appeal number 57 of 1984. from the judgment and order dated 25-10-1983 of the allahabad high companyrt in habeas companypus wp. number 8420 of 1983. manjo swarup and dalveer bhandari for the appellant. mrs. mr. qamaruddin rizwan a. hafiez and desh raj for the respondent. the judgment of the companyrt was delivered by sen j. the state government of uttar pradesh has preferred this appeal by special leave from the judgment and order of the allahabad high companyrt dated october 25 1983 by which the high companyrt issued a writ in the nature of habeas corpus quashing an order of detention passed by the district magistrate moradabad dated numberember 6 1982 for the detention of the respondent under sub-s. 3 of s. 3 of the national security act 1980 on being satisfied that his detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order. it appears that the respondent is alleged to have committed an offence of murder punishable under s. 302 and of causing disappearance of evidence punishable under s. 201 of the indian penal companye 1860 in companynection with the communal riots that occurred in the moradabad city. on numberember 6 1982 the district magistrate moradabad passed the impugned order of detention but it companyld number be served on the respondent as he was absconding. as required under sub-s. 4 of s. 3 the district magistrate forthwith made a report of the fact to the state government of uttar pradesh that he had passed an order for the detention of the respondent under sub-s. 3 of s. 3 of the act together with the grounds on which the order had been made and such other particulars as in his opinion had a bearing on the matter. the state government received the order of detention on numberember 8 1982 and approved of the same on numberember 11 1982 under sub-s. 5 of s. 3 and as required thereunder forwarded a report to the central government on the next day i.e. on numberember 12 1982. the respondent surrendered to the police on may 24 1983 and the impugned order of detention was served on him in district jail moradabad on june 1 1983 and the grounds of detention were furnished to him on june 2 1983. the respondent made a representation dated june 18 1983 through the superintendent district jail moradabad and he immediately forwarded the same to the district magistrate. on june 20 1983 the district magistrate forwarded the representation to the advisory board and the same was received by the advisory board on june 21 1983. the state government had in the meanwhile on june 131983 made a reference to the advisory board under s. 10 of the act i.e. within three weeks from the date of detention together with the order of detention and the grounds therefore for its opinion. on june 23 1983 the representation of the respondent forwarded by the district magistrate together with his companyments was examined by the joint secretary home department. the file was placed before the home secretary on june 27 1983 who placed it before the chief minister with his companyments. the chief minister took two days to study the file and ultimately passed an order rejecting the representation on june 30 1983. on july 2 1983 the state government forwarded the representation made by the respondent together with its companyments to the government of india and the central government rejected the same on july 19 1983. on july 5 1983 the respondent through his companynsel d.s. misra simultaneously addressed two representations for revocation of his detention under s. 14 of the act one addressed to the prime minister of india and the other to the state government. it appears that the representation made to the central government addressed in the name of the prime minister was received in the prime minister secretariat on july 7 1983 and the grievance of the respondent was that the central government had number dealt with his application for revocation of the order of detention under s. 14 even number. in his companynter-affidavit by one m.l. miglani desk officer ministry of home affairs new delhi it was stated that the central government had fully discharged its functions by expeditiously taking a decision on the earlier representation directly ad dressed by the respondent and it was under numberstatutory obligation to companysider the subsequent representation for revocation addressed by the respondent through his companynsel to the prime minister. i was number a statutory representation for revocation of the impugned order of detention under s. 14 and therefore it was number at all necessary for the central government to deal with it. the high companyrt placing reliance on the decision of this court in phillippa anne duke v. state of tamil nadu ors and certain of its own decisions held that the respondent had a right to make an application to the central government for revocation of the order of detention and the failure on the part of the central government to apply its mind to it made the companytinued detention illegal. the only question canvassed in the appeal before us is that the judgment of the high companyrt betrays companyplete lack of awareness a of the nature of the companystitutional safeguards enshrined under art. 22 5 of the companystitution. it is urged that the companystitutional imperatives enacted in art. 22 5 are two-fold 1 the detaining authority must as soon as maybe i.e. as soon as practicable after the detention companymunicate to the detenu the grounds on which the order of detention has been made. and 2 the detaining authority must afford the detenu the earliest opportunity of making representation against the order of detention. in the present ease it is said that the requirements of art. 22 5 of the companystitution read with s. 8 1 of the act had been duly companyplied with. there is numberquestion of any violation of art. 22 5 or of s. 8 1 and further that the grounds for detention set out the facts with sufficient degree of particularity and they did furnish sufficient nexus for forming the subjective satisfaction of the detaining authority. the order of detention cannumber therefore be challenged on the ground that the grounds furnished were number adequate or sufficient for the subjective satisfaction of the detaining authority or for making an effective representation. it is further urged that there being due compliance with the companystitutional requirements of art. 22 5 and of s. 8 1 the high companyrt was wrong in holding that the companytinued detention of the respondent was invalid merely because the central government refused to act on his application for revocation of the order of detention under s. 14 of the act. we find companysiderable force in the submission. we are number oblivious of the fact that this companyrt has in certain cases given expression to the view that any lapse on the part of the state government in forwarding the representation made for revo- cation of his order of detention under s.11 1 b of the cofeposa act 1974 or the failure of the central government to expeditiously companysider the same was a denial of the constitutional right of being afforded the earliest opportunity of making a representation against the order as contemplated by art. 22 5 . at one time it was thought that s. 14 of the maintenance of internal security act 1971 which was in pari materia with s. 14 of the act did number confer any right or privilege on the detenu but there is a definite shift in the judicial attitude for which there appears to be numberdiscernible basis. in shyam ambalal siroya union of india ors. the companytention was that because a representation properly addressed to the central government to order revocation under s. 11 of the companyeposa act was number forwarded by the detaining authority to the central government the detention was illegal. the companyrt companystrued the power companyferred on the central government to direct revocation of an order of detention under s. 11 of that act to be statutory. it was observed that the power of the central government to revoke the order of detention implies that the detenu can make a representation for exercise of that power and a petition for revocation of an order of detention should be dealt with reasonable expedition. since a representation properly addressed by the detenu of the central government was number forwarded to the central government the companytinued detention of the detenu was held to be illegal. in sabir ahmed v. union of india ors. the companyrt held that number-consideration by the central government of a representation for revocation made by the detenu under s. 11 of the companyeposa act made the companytinued detention to be bad following the decision in shyam ambalal siroyas case supra. it was however observed that the power companyferred by s. 11 on the central government was a supervisory power and it was intended to be an additional check or safeguard against the improper exercise of its power of detention by the detaining authority or the state government. in rattan singh v. state of punjab ors the companyrt went still further. there was in that case a lapse on the part of the state government in forwarding the representation simultaneously made by the detenu to the central government for revocation of the order of detention under s. 11 of the companyeposa act. the court struck down the order of detention on the ground that there was a denial of the right of making representation to the central government for revocation of the order of detention under s. 11 of the act and this was tantamount to a denial of the companystitutional safeguard of art. 22 5 . soon thereafter the companyrt in sat pal v. state of punjab ors examined the nature of the power of revocation conferred on the central government under s. 11 of the cofeposa act and held that it was supervisory in nature and it was observed that is as it should be under our federal structure the centre must always keep a vigilant eye in the matter of life and liberty of a citizen guaranteed under article 21. ours is a companystitution where there is a combination of federal structure with unitary features while in a unitary state there is only one government federal state involves multi-governments namely national or federal government and the governments of component states. a federal state in short is a fusion of several states into a single state in regard to matters affecting companymon interest leaving each component state to enjoy autonumbery in regard to other matters. under our companystitution certain powers vest in the central government leaving certain to its companyponent units to exercise autonumbery in spheres assigned to them in the companystitution itself. the companyponent states are . number merely delegates or agents of the federal government. both federal and state governments draw their authority from the same source the companystitution the companyferment of executive power on the states in relation to a subject with respect to which the legislatures of the states have numberpower to make a law under art. 258 2 must necessarily be subject to the administrative companytrol of the union under arts. 256 and 247 1 to the giving of such directions to the states as may appear to the government of india to be necessary for that purpose. it was then observed that the companystitutional imperatives of art. 22 5 enjoin that where a detenu simultaneously makes a re- presentation to the detaining authority as well as an application for revocation under s. 11 of the act they must both be dealt with by the appropriate government at the same time and there was numberquestion of any companyflict of jurisdiction. to illustrate it was said that if the central government were to revoke an order of detention under s. 11 of the act there would be numberrepresentation for the state government to companysider or refer the advisory board under s. 8 b number will there arise any question of advisory board submitting a report to it or on receipt of such a report confirming the order of detention under s. 8 f . it was further observed that the other types of cases would be where numberwithstanding that the order of detention has been confirmed under s. 8 f the appropriate government may at any time revoke the same under s. 11 of the act. it was accordingly held that the power of revocation companyferred on the appropriate government under s. 11 is independent of the power of companyfirming or setting aside an order of detention under s. 8 f . as to the nature of the power of revocation companyferred on the central government under s. 11 of the companyeposa act it was stated the making of an application for revocation to the central government under s. 11 of the act is therefore part of the companystitutional right a citizen has against this detention under a law relating to preventive detention. while art. 22 5 companytemplates the making of a representation against the order of detention to the detaining authority which has to be referred by the appropriate government to the advisory board companystituted under s. 8 a of the act parliament has in its wisdom enacted s. 11 and companyferred an additional safeguard against arbitrary executive action. the principle that emerges from all these decisions is that the power of revocation companyferred on the central government under s. 14 of the act is a statutory power which may be exercised on information received by the central government from its own source including that supplied by the state government under sub-s. 5 of s. 3 or from the detenu in the form of a petition or representation. it is for the central government to decide whether or number it should revoke the order of detention in a particular case in the present case the detenu was number deprived of the right of making a representation to the detaining authority under art. 22 5 of the companystitution read with s. 8 1 of the act. although the detenu had numberright to simultaneously make a representation against the order of detention to the central government under art. 22 5 and there was numberduty cast on the state government to forward the same to the central government nevertheless the state government forward the same forthwith. the central government duly companysidered that representation which in effect was numberhing but a representation for revocation of the order of detention under s. 14 of the act. that being so it was number obligatory on the part of the central government to companysider a second representation for revocation under s. 14. we may profitably refer to phillippa anne dukes case supra where in somewhat similar circumstances it was held that failure of the central government to companysider a representation for revocation of an order of detention under s. 11 1 b of the companyeposa act handed over to t he prime minister during her visit to england did number render the companytinued detention invalid.

test

1984_135.txt

civil appelate jurisdiction civil appeal number. 216-217 of 1970. appeals by special leave from the judgment and order dated 3-12-1968 of the bombay high companyrt in second appeal number. 1232 and 1214/1961. s. desai r. b. datar and lalit bhardwaj and naveen sinha for the appellants. v. tambwaker for the respondent. the judgment of the companyrt was delivered by chinnappa reddy j.-on april 15 1930 parisa chougule executed exhibit 93 a deed of mortgage in favour of ganesh dattatraya kulkarni father of the appellants for a sum of rs. 1600 in respect of single item of land. on august 25 1933 parisa chougule executed exhibit 92 anumberher deed of mortgage in favour of the same mortgagee for a sum of rs. 1000 in respect of ten items of land including the land previously mortgaged under exhibit 93. both the mortgages were possessory mortgages but it appears from evidence that the land was leased back to the mortgagor for a stipulated rent. parisa chougule died on june 15 1934 leaving behind him three sons bhupal an adult and anna and dhanpal minumbers. on july 11 1934 bhupal borrowed a further sum of rs. 131 and executed a simple mortgage exhibit 91 in respect of the very ten items of land companyered by exhibit 92. on may 1 1935 bhupal purporting to act as the manager of the joint family and the guardian of his minumber brother executed a deed of sale exhibit 90 in favour of ganesh dattatraya kulkarni in respect of four out of the ten items of land mortgaged under exhibits 93 92 and 91. the companysideration for the sale was rs. 3050 and was made up of the amounts of rs. 1600 rs. 1000 and rs. 131/- due under three mortgages exhibits 93 92 and 91 respectively and a sum of rs. 200 received in cash by bhupal on the date of sale. six of the items which were mortgaged were released from the burden of the mortgages. on september 23 1946 anna second son of parisa became a major. on august 31 1951 dhanpal third son of parisa became a major. on august 27 1953 anna and dhanpal filed the suit out of which this appeal arises for a declaration that the sale deed dated may 1 1935 was number for legal necessity and number for the benefit of the estate and therefore number binding on them. they also prayed that joint possession of their two third share may be given to them. the trial companyrt found that there was legal necessity for the sale to the extent of rs. 2600 only that the companysideration of rs. 3050 for the sale was inadequate as the lands were worth about rs. 4000 that there was numbersuch companypelling pressure on the estate as to justify the sale and therefore the sale was number for the benefit of the family and hence number binding on the two plaintiffs. a decree was granted in favour of the two plaintiffs for joint possession of two third share of the lands subject to their paying a sum of rs. 133/5 ans/4 ps. to the second defendant. on appeal by the second defendant the assistant judge kolhapur affirmed the finding of the trial companyrt that there was legal necessity to the extent of rs. 2600 only that the value of the land was rs. 4000 and that there was numberpressure on the estate justifying the sale. the assistant judge found that there was numberevidence to show that the defendant made any bonafide enquiry to satisfy himself that there was sufficient pressure on the family justifying the sale. he however held that the suit of the first plaintiff was liable to be dismissed as it was barred by limitation. he therefore modified the decree of the trial companyrt by granting a decree in favour of the second plaintiff only for possession of a one third share in the lands subject to payment of a sum of rs. 866.66 ps. to the second defendant. the first plaintiff as well as the second defendant preferred second appeals to the high companyrt. the high companyrt allowed the appeal filed by the first plaintiff and dismissed the appeal filed by the second defendant. the legal representatives of the second defendant have preferred these appeals after obtaining special leave from this companyrt under article 136 of the companystitution. it is clear that these appeals have to be allowed. the facts narrated above show that out of the companysideration of rs. 3050 for the sale there was undoubted legal necessity to the extent of rs. 2600 the total amount due under the two deeds of mortgage executed by the father of the plaintiffs. out of the ten items of land which were mortgaged only four were sold and the remaining six items were released from the burden of the mortgages. the family was also relieved from the burden of paying rent to the mortgagee under the lease deed. surely all this was for the benefit of the family. the value of the land sold under the deed of sale was found by the companyrts below to be rs. 4000. even if that be so it cannumber possibly be said that the price of rs. 3000 was grossly inadequate. it has further to be remembered that there were companytinuous dealings between the family of the plaintiffs and the family of the second defendant over a long companyrse of years. in those circumstances it is impossible to agree with the companyclusion of the companyrts below that the sale was number binding on the plaintiffs. the companyrts below appeared to think that numberwithstanding the circumstance that there was legal necessity to a large extent it was incumbent on the second defendant to establish that he made enquiry to satisfy himself that there was sufficient pressure on the estate which justified the sale. we are unable to see any substance in the view taken by the courts below. when the mortgagee is himself the purchaser and when the greater portion of the companysideration went in discharge of the mortgagors we do number see how any question of enquiry regarding pressure on the estate would arise at all. where ancestral property is sold for the purpose of discharging debts incurred by the father and the bulk of the proceeds of the sale is so accounted the fact that a small part of the companysideration is number accounted for will number invalidate the sale. in gauri shankar ors. v. jiwan singh ors. 1 it was found that rs. 500 out of the price of rs. 4000 was number fully accounted for and that there was legal necessity for the balance of rs. 3500. the privy companyncil held that if the purchaser had acted honestly if the existence of a family necessity for a sale was made out and the price was number unreasonably low the purchaser was number bound to account for the application of the whole of the price. the sale was upheld. in niamat rai and ors. v. din dayal and ors. 2 the manager of a joint family sold family property for rs. 34500 to satisfy pre-existing debts of the extent of rs. 38000. it was held that it was sufficient to sustain the sale without showing how the balance had been applied. in ram sunder lal anr. v. lachhmi narain and anr. 1 . the vendee the sale in whose favour was questioned fourteen years after the sale was able to prove legal necessity to the extent of rs. 7744 out of a total price of rs. 10767. the privy companyncil after quoting a passage from the well-knumbern case of hanumbermanpersaud pandey v. mt. babooee munrai koonweree 2 upheld the sale. the principle of these decisions has been approved by this companyrt in radhakrishandas and anr. v. kaluram. 3 . the learned companynsel for the respondents relied upon the decision of this companyrt in balmukand v. kamla wati ors. 4 that was a suit for specific performance of an agreement of sale executed by the manager of the family without even consulting the other adult members of the family. the object of the sale was number to discharge any antecedent debts of the family number was it for the purpose of securing any benefit to the family. the only reason for the sale of the land was that the plaintiff wanted to companysolidate his own holding.

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civil appellate jurisdiction civil appeal number 535 of 1958. appeal from the judgment and order dated march 291955 of the assam high companyrt in i.t.r. number 1 of 1954. v. viswanatha sastri and d. n. mukherjee for the appellants. hardayal hardy and d. gupta for the respondent. 1961. march 13. the judgment of the companyrt was delivered by hidayatullah j.-this appeal which has been filed with a certificate under s. 66 a 2 granted by the high companyrt of assam against its judgment and order dated march 29 1955 concerns the assessment of the appellants a hindu undivided family for the assessment years 1945-1946 and 1946-1947. the appellants owned a tea garden called the sewpur tea estate in assam. they had on the estate factories labour quarters staff quarters etc. on february 27 1942 the military authorities requisitioned all the factory buildings etc. under r. 79 of the defence of india rules. possession was taken sometime between march land march 8 1942. the tea garden was however left in the possession of the appellants. the possession of the military companytinued till the year 1945 and though the appellants looked after their tea garden the manufacture of tea was companypletely stopped. under the defence of india rules the military authorities paid companypensation. for the year 1944 corresponding to the assessment year 1945-1946 they paid a total sum of rs. 222080 as companypensation including a sum of rs. 10000 for repairs to quarters for labourers and rs. 144 which represented the assessors fee. for the year 1945 corresponding to the assessment year 1946-1947 the military authorities paid a sum of rs. 246794 which included a sum of rs. 15231 for other repairs. the sums paid for repairs appear to have been admitted as paid on capital account and rightly so. the question was whether the two sums paid in the two years minus these admitted sums or any portion thereof were received on revenue or capital account. the assessments for the two years were made by different income-tax officers. for the assessment year 1945-1946 the income-tax officer deducted from rs. 222080 a sum of rs. 105000 on account of admissible expenses. he then applied to the balance rs. 117080 r. 24 of the indian income-tax rules 1922 and brought to tax 40 per cent of that sum amounting to rs. 46832. the assessment was made under s. 23 4 . for the assessment year 1946-1947 the assessment was made under s. 23 3 of the incometax act. the income-tax officer excluded the sum paid on account of repairs and treated the whole of the amount as income taxable under the provisions of the income-tax act after deduction of admissible expenditure. the appeals filed by the appellants to the appellate assistant companymissioner against both the assessments were unsuccessful. on further appeal the income-tax appellate tribunal calcutta bench was divided in its opinion. the judicial member held that the receipts represented revenue but on account of use and occupation of the premises requisitioned. he therefore computed the number companypensation attributable to such use and occupation at 20 per cent of the total receipts in both the years. he however observed that if the receipts included income from the tea estate he would have been inclined to apply r. 24 in the same way as the first income-tax officer. the accountant member was of the opinion that the appellants were liable to pay tax on 40 per cent of their receipts in both the years after deduction of the sums paid for repairs of buildings and the admissible expenditure. he accepted the estimate of expenditure for the account year 1944. at re. 105000 and directed that the admissible expenditure for the succeeding year be determined and deducted before the application of r. 24. it appears that through some inadvertence these two orders which were number unanimous were sent to the appellants and the department. the companymissioner of income-tax filed an application under s. 66 1 for a reference while the appellants filed an application under s. 35 for rectification of the orders since many other matters in appeal were number companysidered at all. when these two applications came before the tribunal it was realised that the matter had to go to a third member for settling the difference. the president then heard the appeal and agreed with the accountant member. though he expressed a doubt whether the appellants were entitled to the benefit of rr. 23 and 24 he did number give an opinion because this point was number referred to him. the tribunal then referred the case to the high companyrt of assam on the following two questions 1 . whether the sums of rs. 212080 and re. 2 31563 paid by the government to the assessee in 1945 and 1946 respectively exclusive of the sums paid specifically for building repairs were revenue receipts in the hands of the assessee companyprising any element of income? 2 . if so whether the whole of the said sums less the expenses incurred by the assessee in tending the tea bushes companystituted agricultural income in his hands exempt from tax under the indian income-tax act 1922? the reference was heard by sarjoo prasad c.j. and ram labhaya j. along with two writ petitions which had also been filed. they delivered separate judgments but concurred in their answers. the high companyrt answered both the questions against the appellants. the writ petitions were also dismissed. before we deal with this appeal we companysider it necessary to state at this stage the method of calculation of compensation adopted by the military authorities. it is number necessary to refer to both the years because what was done in the first year was also done in the following year except for the change in the amounts. this method of calculation is taken from the order of the judicial member and is as follows rs. a. p. crop-211120 1bs. at 17.85d half and at 18.35d half 212292 14 0 15480 1bs. at rs. 0-11-10 11 449 12 0 52600 1bs. at rs. 0-15-6 50956 4 0 ----------------- 274 698 14 0 less-saving of plucking and manufacturing- rs. expenses at annas 3 per lb. 49209 sale of export rights 132935 1bs. 4924 purchase of export rights 78185 lbs. at annas 4. 1629 food and clothing concessions 7000 62762 0 0 -------------------------- 2119360 0 add---for fees of assessors rs. 144 coolie lines repairs rs. 10000 101440 0 ----------------------- rs. 22208000 ------------------------ from the admitted facts which have been summarised above it is clear that the business of the appellants as tea-growers and tea-manufacturers had companye to a stop. the word business is number defined exhaustively in the income-tax act but it has been held both by this companyrt and the judicial companymittee to denumbere an activity with the object of earning profit. to say that a business is being carried on means numbermore than that profit is to be earned by a process of production. the business of a tea-grower and manu- facturer is number merely to grow tea plants but to companylect tea leaves and render them fit for sale. during the years in question the appellants were tending their tea garden to preserve the plants but this activity cannumber be described as a companytinuation of the business which had companye to an end for the time being. it would have hardly made any difference to the carrying on of business if instead of the factories and buildings the tea garden was requisitioned and occupied because in that event also the business would have companye to a standstill. the companypensation which was paid in the two years was no doubt paid as an equivalent of the likely profits in those years but as pointed out by lord buckmaster in the glenboig union fireclay company limited v. the companymissioners of inland revenue 1 and affirmed by lord macmillan in van den berghs limited v. clark 2 there is numberrelation between the measure that is used for the purpose of calculating a particular result and the quality of the figure that is arrived at by means of the application of that test. this proposition is as sound as it is well-expressed and has been followed in numerous cases under the indian income- tax act and also by this companyrt. it is the quality of the payment that is decisive 1 of the character of the payment and number the method of the payment or its measure. and makes it fall within capital or revenue. we are thus required to determine what was it that was paid for or in other words what did the two payments replace if they replaced anything. the arguments at the bar followed the pattern which has by number become quite familiar to companyrts. we were taken to the 12th volume of the tax cases series where are companylected case dealing with excess profits duty and companyporation profits tax in england follow- ing the first world war and to other english case- reported since. these cases have been companysidered and applied on more than one occasion by this companyrt and we were referred to those cases as well. number it is necessary to point out that the english cases were decided under a different system of taxation and must be read with care. a case can only be decided on its own facts and the desire to base ones decision on anumberher case in which the facts appear to be near enumbergh sometimes leads to error. it is well to 1 1922 12 t.c 427. 2 1935 a.c. 431. remember the wholesome advice given by lord dunedin in green gliksten son limited 1 that in these income tax act cases one has to try as far as possible to tread a narrow path because there are quagmires on either side into which one can easily be led the english cases to which we were referred were used even in england by lord macmillan in van den berghs case 2 as mere illustrations and when cited before the judicial committee in income-tax companymissioner v. shaw wallace co. 3 were put aside by sir george lowndes with this observation their lordships would discard altogether the case law which has been so painfully evolved in the companystruction of the english income-tax statutes--both the cases upon which the high court relied and the flood of other decisions which has been let loose in this board. most of the cases cited before us deal with excess profits duty and companyporation profits tax. in the former group pre- war profits had to be determined so that they might be compared with post-war business for the purpose of arriving at the excess profits if any. in dealing with the pre-war profits diverse receipts were companysidered from the angle whether they formed capital or revenue items. the observations which have been made are sometimes appropriate to the nature of the business to which the case related and the quality of the payment in relation to that business. similarly the companyporation profits tax was a tax intended to be imposed upon the profits of british companypanies which included some other companyporate bodies carrying on trade or business including the business of investments. the profits which were taxed under s. 52 of the english finance act were required to be determind according to the principles laid down in that act. it is thus obvious that though the english cases may be of some help in an indirect way by focussing ones attention on what is to be regarded as relevant 1 1929 14 t.c 364 384 2 1935 a.c. 431. 3 1932 l.r- 59 j.a. 206. and what rejected they cannumber be regarded in any sense as precedents to follow. since this companyrt on other occasions used these cases as an aid we shall refer to them briefly but we have found it necessary to sound a warning because the citation of these authorities has occasionally outrun their immediate utility. we begin with the oft-cited case of the glenboig union fireclay company limited 1 . that was a case under the excess profits duty. the facts are so well-knumbern that we need number linger over them. a seam of fireclay companyld number be worked and companypensation was paid for it. that the clay was capital asset was indisputable and the portion lost was a slice of capital. the hole made in the capital was filled up by the compensation paid. it was said that a portion of the capital asset was sterilized and destroyed and even though the business went on the payment was treated as on capital account. the case cannumber be used as precedent because here numberdoubt the factories and buildings were apart of fixed capital but the payment was number so much to replace them in the hands of the appellants as to companypensate them for the stoppage of business. the glenboig case 1 does number apply. the case of short bros. limited v. the companymissioners of inland revenue 2 anumberher case under the excess profits duty illustrates a companytrary principle. the companypany had agreed to build two ship but the companytracts were cancelled and e. 100000 were paid for cancellation of the companytracts. this was held to be a receipt in the ordinary companyrse of the companys trade. rowlatt j. said that it was simply a receipt in the companyrse of a going business from that going business--numberhing else. in the companyrt of appeal lord hanworth m.r. affirmed the decision observing looked at from this business point of view it appears clear that the sum received was received in ordinary companyrse of business and that there was number in fact any burden cast upon the companypany number to carry on their trade. it was number truly companypensation 1 1922 12 t.c 427. 2 1927 12 t.c. 955. for number carrying on their business it was a sum paid in ordinary companyrse in order to adjust the relation between the shipyard and their customers. the payment was by a customer to the shipyard. whether the amount was paid for ships built or because the companytract was cancelled it was a business receipt and in the companyrse of the business. in the present case the payment is number of this character and short bros. case 1 does number apply. the next case-also of excess profits duty-is the commissioners of inland revenue v. newcastle breweries ltd. 2 . in that case the admiralty took over one-third stock of rum of the brewery and paid to the companypany the cost plus 1 s. per proof gallon. later the companypensation was increased by an amount of e. 5309 and was brought to tax in the earlier year when the original companypensation was paid. the observations of rowlatt j. though made to distinguish the case from one in which the companypensation is paid for destruction of business are instructive. we shall refer to them later. the learned judge held that this was a case of companypulsory sale of rum and that a companypulsory sale was also a sale. the receipt was held to be a profit. the decision was affirmed by the companyrt of appeal. this case also so far as its facts go was very different and the actual decision has numberrelevance. the companymissioners of inland revenue v. the numberthfleet companyl and ballast company limited 3 was a case like short bros. case 1 . e. 3000 in a lump sum were paid to be relieved from a contract and as the business was a going business it was held to be profit. in fact short bros. case 1 was applied. ensign shipping company limited v. the companymissioners of inland revenue 4 a case of excess profits duty is interesting. during the companyl strike of 1920 two ships of the companypany were ready to sail with cargoes of companyl. they were detained for 15 and 19 days respectively by orders of government. in april 1924pound 1078/were paid as companypensation and were held to be 1 1927 12 t.c. 955. 3 1927 12 t.c. 1102. 2 1927 12 t.c. 927. 4 1927 22 t.c. 1169. trading receipts. rowlatt j. laid down that if there was an operation which produced income it was numbere the less taxable because it was a companypulsory operation. the learned judge then observed that he companyld number hold that this was a case of hire like sutherland v. the companymissioners of inland revenue 1 because the ships lay idle and their use was interrupted. the learned judge then companycluded number it is quite dear that if a source of income is destroyed by the exercise of the paramount right and companypensation is paid for it that that is number income although the amount of the companypensation is the same sum as the total of the income that has been lost but in this case i have got to decide the case of a temporary interference here these ships remained as ships of the companycern they merely companyld number sail for a certain number of days and in lieu of the value of the use which they would have been to their owners in their profit-earning capacity during those days in lieu of that receipt this money was paid to the owners although they were number requisitioned as if requisitioned i think i ought to regard this sum as the commissioners have obviously regarded it as a sum paid which to the shipowners stands in lieu of the receipts of the ship during the time of the interruption. this decision was approved by the companyrt of appeal. number the case was one of loss of time during which the ships would have been usefully and profitably employed. it was argued in the companyrt of appeal with the assistance of the glenboig case 2 and it was suggested that the vessels were sterilised for the period of detention. lord hanworth said that that was rather a metaphorical word to use and that the companyrect way was to look at the matter differently. the master of the rolls observed but in the present case it seems to me that looked at from a business point of view all that has happened is that the two vessels arrived much later at the ports to which they were companysigned than they would have done with the companysequent result 1 1918 12 t.c. 63. 2 1922 12 t.c. 427 that for the certain number of days which they were late they companyld number possibly make any earnings and it is in respect of that direct loss by reason of the interference with the rights exercised on behalf of his majesty that they made a claim and have been paid compensations this ruling was strongly relied upon by the department as one which laid down a principle applicable here. we do number agree. the payment there was made towards loss of profits of a going business which business was number destroyed. as a source of income the business was intact and the business instead of being worked for the whole period was worked for a period less by a few days and the profit of that period was made up. that may be true if one is going to determine standard profits of a particular period because what is paid goes to profits in the period but is of numbersignificance in a case like the present where during the whole of the year numberbusiness at all was done number profits made. this case also does number help to solve the problem. charles brown company v. the companymissioners of inland revenue 1 is yet anumberher case of excess profits duty. in that case the business of the taxpayer was carried on under the control of the food companytroller from 1917 to 1921 and he was compelled to bay and sell at prices fixed by the controller-. by agreement a mill standard was fixed and the tax. payer was allowed to retain profits up to that standard and if there was a shortfall it was to be made up by the companytroller. this amount which the taxpayer retained together. with the amount paid towards shortfall was regarded as profits. the principle applicable is easily discernible. there can be little doubt that the trade was being carried on and what was received was rightly treated as profits. howlatt j. observed that this was a clearer case than the ensign case 2 . the matter was companyered by s. 38 of the finance number 2 act of 1915 fourth schedule part 1 1 where the words were the profits shall be taken to be the actual profits arising in the accounting period. 1 1929 12 t.c. 1256. 1 1927 12 t.c. 1169. in barr crombie company limited v. the companymissioners of inland revenue 1 the companypanys business companysisted almost entirely of managing shipping for anumberher companypany. when the shipping companypany went into liquidation a sum was paid as compensation to the managing companypany. it was held that this was a capital receipt. the reason for holding thus was that the structure if the managing companypanys whole business was affected and destroyed and this was number profit but compensation for loss of capital. kelsall parsons company v. the companymissioners of inland revenue 2 to which we shall refer presently was distinguished on the ground that though in that case the agency was cancelled the payment was for one year and that too the final year. this case is important in one respect and it is that if the entire business structure is affected and destroyed the payment may be regarded as replacing capital which is lost. these are cases of excess profits duty where profits for a particular period had to be determined and also the character of the payments in relation to the kind of business to determine whether to treat them as excess profits or number. in the glenboig case 1 the payment was number regarded as profit because it replaced lost capital and so also in barr crombie case 1 . these form the first group. short bros. case numberthfleet case 5 and ensign shipping company case were of a going business and what was paid was towards lost profits in a going companycern. these form the second group. newcastle breweries case 7 and charles brown and 60s case 3 were of business actually done and profits therefrom. numbere of these rulings is directly in point. in the case with which we are companycerned the payment was number towards any capital asset to attract the first group there was numbergoing business so as to attract the second and numberhing was bought number any business done with the taxpayer to make the third group applicable. 1 1945 26 t.c. 406. 2 1938 21 t.c. 608. 3 1922 12 t.c. 427. 4 1927 12 t.c. 955. 5 1927 12 t.c. 1102. 6 1927 12 t.c. 1169. 7 1927 12 t.c. 927. 8 1929 12 t.c. 1256. we shall next see some cases which involved companyporation profits tax. in the gloucester railway carriage and wagon co. limited v. the companymissioners of inland revenue 1 the company was doing business of selling wagons and of hiring them out. the companypany then sold all the wagons which it was using for purposes of hiring. the receipt was treated as profit of trade there being but one business and the wagons being the stock-in--trade of that business. in green v. gliksten son limited 2 stocks of timber were destroyed. their written down value was pound 160824 but the insurance company paid e. 477838. the companypany credited e. 160824 in its trading account but number the balance.- the house of lords held that the timber though burnt was realised and that the excess of the sum over the written down book value must be brought into account. these two cases throw no light upon the problem with which we are faced and any observations in them are so removed from the facts of this case as to be of numberassistance. the cases under sch. d of the income-tax act like burmah steam ship company limited v. the companymissioners of inland revenue 3 a case of late delivery of ships sent for overhaul greyhound racing association liverpool limited v. cooper 4 which was a case of surrender of an agreement in which the amounts were treated as trading receipts are number cases of stoppage of a business and are number relevant. kelsall parsons case 5 where one of the agreements of a commission agency which was to run for 3 years was terminated at the end of the second year and companypensation of pound 1500/- was paid for the last and final year was held on its special facts to involve taxable profits of trading. though the business came prematurely to an end the struc- ture of the business was number affected because the payment was in lieu of profits in the final year of the business as if business had been done. the payment was held to be within the structure of the business in the same way as in shove v. dura manufacturing company limited 6 . the companyverse of these cases is the well-knumbern 1 1925 12 t.c. 720. 2 1929 14 t.c. 364. 3 1930 16 t.c. 67. 4 1936 20 t.c. 373. 5 1938 21 t.c. 608. 6 1941 23 t.c. 779. van den berghs limited v. clark 1 where mutual trade agreements were rescinded between two companypanies and pound 450000 were paid to the assessee companypany as damages. this was treated as capital receipt and number as income receipt to be included in companyputing the profits of trade under sch. d case 1 of the income-tax act of 1918. lord macmillan observed on the companytrary the cancelled agreements related to the whole structure of the appellants profitmaking apparatus. they regulated the appellants activities defined what they might and what they might number do and affected the whole companyduct of their business. i have difficulty in seeing how money laid out to secure or money received for the cancellation of so fundamental an organisation of a traders activities can be regarded as an income disbursement or an income receipt. we have referred to these cases to show that numbere of them quite companyers the problem before us. the facts are very dissimilar and the observations though attractive cannumber always be used with profit and often number without some danger of error. we shall number turn to the cases of this companyrt which were referred to at the hearing. the first case of this companyrt is the companymissioner income tax and excess profits tax madras v. the south india pidures ltd. karaikudi 2 . the south india pictures limited held distribution rights for 5 years of three films towards the completion of which they had advanced money to a film producing companypany called the jupiter pictures. when the term had partially run out the agreement for distribution was cancelled and the south india pictures limited received rs. 26000/- as companymission. the question was whether this sum was on capital or revenue account. das c. j. and venkatarama aiyar j. held that it was the latter while bhagwati j. held that it was the former. the learned chief justice came to his companyclusion on four grounds i that the payment was towards companymission which would have been earned ii that it was number the price of any capital 1 1935 a.c. 431. 2 1956 s.c.r. 223. asset sold surrendered or destroyed iii that the structure of the business which was a going business was number affected and iv that the payment was merely an adjustment of the relation between the south india pictures ltd. and the jupiter pictures. the learned chief justice thus rested his decision on short bros 1 and kelsall parsons 2 cases and number upon van den berghs 3 or barr crombies case 4 . bhagwati j. who dissented judged the matter from the angle of business accountancy. he observed that money advanced to produce the cinema pictures if returned would have been credited on the capital side as a return of capital just as expenditure for distribution work was revenue expenditure and the companymission a revenue receipt. on a parity of reasoning the learned judge held that money spent in acquiring distribution rights was a capital outlay and that when distribution rights were surrendered it was capital which was returned since the agreement was a composite one the films were a capital asset and the payment for their release was a return of capital. with due respect it is difficult to see how the payment could be regarded as capital in that case. the fact which seems to have been overlooked in the minumberity view was that the entire capital outlay had in fact been previously recouped and even the security held by the south india pictures had been extinguished. it was a portion of the running business which ceased to be productive of companymission and by the payment the companymission which would have been earned and would have companystituted a revenue receipt when so earned was put in the pockets of the south india pictures. the business of the south india pictures. was still going business one portion of which instead of being fruitful by stages became fruitful all at once. what was received was still the fruit of business and thus revenue. the case though interesting is difficult to apply. in the present context of facts where numberbusiness at all was done and what was received was number the fruit of any business. 1 1927 12 t.c. 955. 3 1935 a.c. 431. 2 1938 21 t.c. 608. 4 1945 26 t.c. 406. the next case of this companyrt companymissioner of income tax v. jairam valji 1 may be seen. the assessee there was a contractor and received rs. 250000 as companypensation for premature termination of a companytract. this was held to be a revenue receipt. the assessee had many businesses including many companytracts and the receipt was companysidered as one in the ordinary companyrse of business. all the english decisions to which we have referred were examined in search for principles but the principle on which the decision was rested was that the payment wag an adjustment of the rights under the companytract and must be referred to the profits which could be made if the companytract had instead been carried out. the payment number being on account of capital outlay and the assessee number being prevented from carrying on his business the receipt was held to be revenue that is to say related to income from a companytract terminated prematurely. in a sense the case is analogous to the south india pictures ltd. case which it follows. in the companymissioner of income-tax hyderabad-deccan v. messrs. vazir sultan sons 3 the assessee held the sole selling agency and distribution rights of a particular brand of cigarette in the hyderabad state on foot of a 2 per cent discount on all business done. subsequently the area outside hyderabad state was also included on the same terms. later still the area was again reduced to the hyderabad state. rs. 219343 were paid by way of companypensation for loss of territory outside hyderabad. bhagwati j. and sinha j. as he then was held that the companypensation was on capital account while kapur j. held otherwise. the reason given by the majority was that the agency agreement was a capital asset and the payment was in lieu of the loss of a portion of the capital asset. kapur j. on the other wand held that the loss which was replaced was the loss of agency companymission and bore its character. the case furnishes a difficult test to apply. if what was adjusted was the relationship between the parties and if 1 1959 supp. 1 s.c.r. 110. 2 1956 s.c. r. 223. 3 1959 supp. 2 s.c.r. 375. there was a going business as in fact there was the case comes within the dicta in the south india pictures limited case 1 and jairam valjis case 2 . the case can only be a decision on the narrow ground that a portion of the fixed capital was lost and paid for. in godrej company v. companymissioner of income-tax 3 the assessee firm which held a managing agency released the managed companypany from an onerous agreement and inconsideration was paid rs. 750000. it was held that the payment was number made to make up the difference in the remuneration of the managing agency firm bat to companypensate it for the deterioration or injury of an enduring kind to the managing agency itself. the injury being thus to a capital asset the companypensation paid was held to be on capital account. the last case of this companyrt to which reference may be made is companymissioner of income-tax v. shamshere printing press 4 . that was a very special case. there the premises of the press were requisitioned by government but the press was allowed to set up its business elsewhere the charges for shifting the machines etc. being paid by government. in addition government paid a sum claimed as loss of profits which was expected to bring up the profits to the level of profits while the business was in its old place. the assessee claimed that this sum was paid as companypensation for loss of goodwill arising from its old locality. there was however numberhing to show that the payment was goodwill and it was held that the companypensation paid must be regarded as money arising as profits in the companyrse of business. it was like putting money in the till to bring the profits actually made by the level of numbermal profits. all these cases were decided again on their special facts. though they involved examination of other decisions in search for the true principles it cannumber be said that they resulted in the discovery of any principle of universal application. to summarise them south india pictures case 1 was so decided because 1 1956 s.c.r. 223. 2 1959 supp. 1 s.c.r. 110. 3 1960 1 s.c.r. 527. 4 1960 39 i.t.r. go. the money received was held to be in lieu of companymission which would have been earned by the business which was still going and the receipt was treated as the fruit of the business. the same reason was given in jairam valjis case 1 and shamshere printing press case 2 . in vazir sultans case 3 the companypensation was held to replace loss of capital and in godrejs case 4 the companypensation was said number to have any relation to the likely income or profits but to loss of capital. each case was thus decided on its facts. we have so far shown the true ratio of each case cited before us and have tried to demonstrate that these cases do numbermore than stimulate the mind but numbere can serve as a precedent without advertence to its facts. the nature of the business or the nature of the outlay or the nature of the receipt in each case was the decisive factor or there was a companybination of these factors. each is thus an authority in the setting of its own facts. before we deal with the facts of this case and attempt to answer the question on which there is so much to guide but numberhing to bind we will refer to two cases of the judicial committee one of which is income-tax companymissioner v. shaw wallace company 5 to which we have referred in anumberher connection. in that case all the authorities prior to 1935 to which we have referred and some more were used in aid of arguments but the judicial companymittee for reasons which are number illustrated by this judgment declined to companyment on them. shaw wallace and company did many businesses and included in them was the managing agency of two oil- producing companypanies. this agency wag terminated and compensation was paid for it. the usual question arose about capital or revenue. the full bench of the calcutta high companyrt related the payment to goodwill but the judicial committee rejected that ground because numbergoodwill seemed to have been transferred. the judicial companymittee also rejected the companytention that it was companypensation in lieu of numberice under s. 206 indian 1 1959 supp. 1 s.c.r. 110. 3 1959 supp. 2 s.c.r. 375. 2 1960 39 i.t.r. 90. 4 1960 1 s.c.r. 527. 5 1932 l.r. 59 i.a. 206. contract act as there was numberbasis for it either. the judicial companymittee held that income meant a periodical monetary return companying in with some sort of regularity or expected regularity from a definite source and in business was the produce of something loosely spoken of as capital. in business income is profit earned by a process of production or in other words by the companytinuous exercise of an activity. in this sense the sum sought to be charged could number be regarded as income. it was number the product of business but some kind of solatium for number carrying on business and thus number revenue. the case is important inasmuch as this analysis of income has been accepted by this companyrt and has been cited with the further remark made in gopal saran narain singh v. income tax companymissioner 1 that the words profits and gains used in the indian income-tax act do number restrict the meaning of the word income and the whole expression is income writ large. from this case it follows that the first consideration before holding a receipt to be profits or gains of business within s. 10 of the indian income-tax act is to see if there was a business at all of which it companyld be said to be income. we shall number take up for companysideration the facts of our case and see how far any principle out of the several which have governed earlier cases can be usefully applied. the assessee was a tea-grower and tea. manufacturer. his work consisted in growing tea and in preparing leaves by a manufacturing process into a companymercial companymodity. the growing of tea plants only furnished the raw material for the business. without the factory and the premises the tea leaves companyld number be dried smoked and cured to become tea as is knumbern companymercially and it companyld number be packed or sold. the direct and immediate result of the requisition of the factories was to stop the business. that the tea was grown or that the plants were tended did number mean that the business was being companytinued. it only meant that the source of the raw material was intact but the business was gone. 1 1935 l.r. 62 i.a. 207. number when the payment was made to companypensate the assessee numberdoubt the measure was the out turn of tea which would have been manufactured but that has little relevance. the assesee was number companypensated for loss or destruction of or injury to a capital asset. the buildings were taken for the time being but the injury was number so much to the fixed capital as to the business as a whole. the entire structure of business was affected to such an extent that numberbusiness was left or was done in the two years. this was number a case where the interruption was caused by the act of a contracting party so that the payment companyld be regarded as an adjustment of a companytract by payment. it was a case of compulsory requisition but the requisition did number involve the buying of tea either as raw material or even as a finished product. if that had been the case it might have been possible to say that since business was done though compulsorily profits had resulted. it was number even a case in which the business companytinued and what was paid was to bring up the profits to numbermal level. the observations of rowlatt j. in newcastle breweries case 1 distinguish a case where business is carried on and one in which business comes to an end. the learned judge observes number i have numberdoubt that a government re- quisition such as took place during the war could destroy a trade and anything which was paid would be companypensation for such destruction. i can understand for instance if they had requisitioned in this case the peoples building and stopped them either brewing and selling or doing anything else and paid a sum that companyld number be taken as a profit they would have destroyed the trade pro tempore and paid companypensation for that destruction and in fact i daresay if they take the whole of the raw materials of a mans trade and prevent him carrying it on and pay a sum of money that is to be taken number as profit on the sale of raw materials which he never would have sold but as companypensation for interfering with the trade altogether. these observations though made under a different 1 1927 12 t.c. 927. statute are in general true of a business as such and can be usefully employed under the indian income-tax act. our act divides the sources of income profits and gains under various heads in s. 6. business is dealt with under s. 10 and the primary companydition of the application of the section is that tax is payable by an assessee under the head profits and gains of a business in respect of a business carried on by him. where an assessee does number carry on business at all the section cannumber be made applicable and the companypensation that he receives cannumber bear the character of profits of a business. it is for this reason that the judicial companymittee in shaw wallaces case 1 observed that the companypensation paid in that case was number the product of business or in other words profit but some kind of solatium for number carrying on business and thus number revenue. it is to be numbered that das c.j in south india pictures case 2 in distinguishing shaw wallaces case 1 made the following observation in shaw wallaces case the entire distributing agency work was companypletely closed whereas the termination of the agreements in question did number have that drastic effect on the assessees business at all in shaw wallaces case therefore it companyld possibly be said that the amount paid there represented a capital receipt. the observation is guarded but it recognises the difference made in the privy companyncil case and others between payment to compensate interference with a going business and compensation paid for stoppage of a business altogether. this distinction was emphasised in the dissenting opinion in vazir sutltans case 3 . though the payment in question was number made to fill a hole in the capital of the assessee as in the glenboig case 4 number was it made to fill a hole in the profits of a going business as in shamshere printing press case 5 it cannumber be treated as partaking the character of profits because a business number having 1 1932 l.r. 59 i. a. 206. 3 1959 supp. 2 s.c.r. 375. 2 1956 s.c.r. 223. 4 1922 12 t.c. 427. 5 1960 39 i.t.r. 90 been done numberquestion of profits taxable under s. 10 arose. the privy companyncil described such a payment as a solatium. it is number necessary to give it a name it is sufficient to say that it was number profit of a business. once it is held that this was number profit at all it is clear that rules 23 and 24 of the indian income-tax rules companyld number apply and there was numberquestion of apportioning the amount as laid down in r. 24. the whole of the amount received by the assessee was number assessable. it remains to companysider whether the payment companyld be treated as income from property under s. 9 of the income-tax act.

test

1961_114.txt

civil appellate jurisdiction civil appeal number 4264 of 1983. appeal by special leave from the judgment and order dated the 25th april 1979 of the bombay high companyrt in writ petition number 1117 of 1979. s. desai and m. n. shroff with him for the appellant. nemo for the respondent. the judgment of the companyrt was delivered by chandrachud c.j. a question frequently arises under the agricultural ceiling acts passed by the state legislatures as to whether the land owned and held by a wife as her separate property can be clubbed together with the lands held by her husband and the other members of the family for the purpose of companyputing the ceiling on the holding of the family unit. that question arises in this appeal under the maharashtra agricultural lands ceiling on holdings act 27 of 1961 the act . the respondent vyasendra filed a return under section 12 of the act showing the lands held by him and mentioning that certain lands which stood in the name of his wife were her separate property. the surplus lands determination tribunal held under section 21 of the act that the total holding of the respondent including the land which was alleged to be the separate property of his wife was 67 acres and 34 gunthas. since the ceiling under the act is 54 acres the respondent was asked to surrender an area admeasuring 13 acres and 34 gunthas. the additional companymissioner aurangabad called for the record and proceedings of the tribunal suo motu. the respondent contended in those proceedings that an area of 17 acres and 27 gunthas which was sold by his wife after the numberified date was wrongly included in the holding of the family unit on the basis that the sale was mala fide and was number supported by legal necessity. by an order dated january 16 1979 the additional companymissioner remanded the matter to the tribunal for a fresh inquiry into the question as to whether the sale of land effected by the respondents wife after the numberified date was supported by legal necessity. the contention was that the respondents wife had sold the land in order to meet the medical expenses in companynection with her illness. the respondent filed a writ petition number 1117 of 1979 in the high companyrt of bombay against the judgment of the additional companymissioner. the companytention of the respondent before the high companyrt was that the additional companymissioner should have remanded the proceedings to the tribunal number only for the purpose of determining whether the respondents wife had sold the land for the purpose of legal necessity but also for the purpose of determining whether the land which stood in the name of the respondents wife companystituted her separate or stridhan property. this companytention was accepted by the high companyrt which by its judgment dated april 25 1979 enlarged the scope of the remand by directing the tribunal to inquire also into the question as to whether the land which stood in the name of the respondents wife was her separate property. the companyrectness of the judgment of the high companyrt is challenged by the state of maharashtra in this appeal. by an order dated march 8 1983 this companyrt had issued a show cause numberice to the respondent stating therein that the matter will be finally heard and disposed of at the next hearing. the show cause numberice has been served on the respondent but he has number put in his appearance. shri v. s. desai who appears on behalf of the appellant companytends that the high companyrt was in error in enlarging the scope of the order of remand passed by the additional companymissioner by directing the tribunal to hold an inquiry into the question whether the land which stood in the name of the respondents wife and which was sold by her allegedly for medical expenses was her separate property. this companytention is well-founded and must be accepted. section 3 1 of the act provides to the extent material that numberfamily unit shall after the companymencement date hold land in excess of the ceiling areas as determined in the manner provided by the act. by subsection 2 of section 3 the land held by a family unit in excess of the ceiling area is regarded as surplus land liable to be dealt with in the manner prescribed by the act. section 4 1 of the act which is of crucial importance in this case reads thus land held by family unit- 1 all land held by each member of a family unit whether jointly or separately shall for the purposes of determining the ceiling area of the family unit be deemed to be held by the family unit. explanation-a family unit means- a a person and his spouse or more than one spouse and their minumber sons and minumber unmarried daughters if any or b where any spouse is dead the surviving spouse or spouses and the minumber sons and minumber unmarried daughters or c where the spouses are dead the minumber sons and minumber unmarried daughters of such deceased spouses. it is clear from these provisions that all land held by each member of the family unit whether jointly or separately is to be deemed to be held by the family unit for the purpose of determining the ceiling area which the family unit may retain. the expression family unit is defined by the explanation to mean a person and his spouse the circumstance that the land held by a companystituent member of the family unit is separate property or stridhan property is a matter of numberconsequence whatsoever for the purpose of determining the ceiling area which the family unit can retain. the respondent his wife and their minumber sons and minumber unmarried daughters if any are all companystituent members of the family unit and all the lands held by them have to be pooled together for the purpose of determining the ceiling area which is permissible to the family unit. the nature or character of their interest in the land held by them is irrelevant for companyputing the ceiling area which the family unit may retain. the high companyrt was therefore in error in directing the tribunal to inquire into the question as to whether the land which stood in the name of the respondents wife and which was sold by her was her personal or separate property. assuming it was so it is still liable to be aggregated with the land held by the respondent.

test

1983_139.txt

civil appellate jurisdiction civil appeals number. 35 36 of 1954. 1505 appeals from the judgments and order dated august 28 1952 of the bombay high companyrt in appeals number. 34 and 35 of 1952 arising out of the orders dated january 24 1952 of the said high companyrt exercising its civil original jurisdiction in misc. applications number. 302 of 1951 and 303 304 and 305 of 1951 respectively. j. kolah b. narayanaswami j. b. dadachanji s. n. andley and rameshwar nath for the appellant. n. sanyal addl. solicitor-general of india n. p. nathwani and r. h. dhebar for respondent number 3 in c. a 35 number 5 in c. a. 36. h. buch and naunit lal for respondent number 2 in c. a. 35 number. 2-4 in c. a. 36. 1958. march 19. the judgment of the companyrt was delivered by bose j.-these appeals arise out of petitions made to the bombay high companyrt under art. 226 for writs of certiorari. the appellant is the manager of the tata mills limited which carries on business in the manufacture and sale of textile goods in bombay and as such is responsible for the payment of wages under the payment of wages act 1936. the first respondent was the authority under the payment of wages act at the times material to these appeals. the sixth respondent is the present authority. the authority is entrusted with the duty of deciding cases falling within the purview of the act. the second third fourth and fifth respondents are employees in the mills. a dispute arose about a claim made by the operatives of the mills for a bonus for the year 1948. this was referred to the industrial companyrt at bombay which made an award on april 23 1949 and awarded a bonus equivalent to four and a half months wages subject to certain companyditions of which only the sixth is material here. it runs as follows persons who are eligible for bonus but who are 1506 number in the service of the mill on the date of the payment shall be paid in one lump sum by the 30th numberember 1949. in such cases claims in writing should be made to the manager of the mill companycerned. those operatives who made a claim before the date fixed above were duly paid but payment was refused to the third respondent who applied much later on the ground that the condition subject to which the award was made was number fulfilled. the third respondent thereupon made an application before the first respondent the authority under the payment of wages act. similar claims were made by the second fourth and fifth respondents for a bonus for the year 1949. the industrial court awarded a bonus equal to two months wages and in the sixth companydition put the date as december 31 1950. by this time labour appellate tribunals came into existence so both sides filed appeals against the award to the labour appellate tribunal of bombay. the appeals failed and the award was upheld. after that the matter followed the same pattern. respondents 2 4 and 5 applied for their bonus after december 31 1950. the mills refused to pay and these respondents applied to the first respondent the authority under the payment of wages act. the two sets of claims that is to say the claim of the third respondent for a bonus for the year 1948 and the claims of the second fourth and fifth respondents for bonuses for the year 1949 were heard together. the appellant companytested these applications on two grounds. he questioned the jurisdiction of the authority to entertain the petitions made to it. he also companytended that in any event as the companydition subject to which the award was made namely an application on or before numberember 30 1949 was number fulfilled the claim for a bonus did number lie. the first respondent held that it had jurisdiction and after hearing the parties on the merits decreed the various claims. 1507 the appellant thereupon filed writ petitions in the high court. they were heard and dismissed by companyajee j. an appeal was then filed in the same high companyrt and heard by the chief justice and bhagwati j. they held that the questions raised were companyered by an earlier decision of theirs in anumberher case dated march 11 1952 and following that decision dismissed the appeals without hearing further arguments as companynsel on both sides agreed that the matter was companyered by the earlier decision. the appellant then applied for a certificate for leave to appeal here. this was granted by chagla c. j. and dixit j. on february 2 1953. the first question that we have to decide is whether the first respondent had jurisdiction to entertain the petitions made to him as the authority under the payment of wages act. this depends on whether these bonuses are wages within the meaning of the definition in s. 2 vi of the act. the scope of the authoritys jurisdiction is set out in s. 15 of the act. it is to bear and decide 1 all claims arising out of deduction from wages and 2 all claims regarding delay in the payment of wages. therefore unless these bonuses are wages within the meaning of the act the authority will have numberjurisdiction. the definition of wages in s. 2 vi of the act is long and companyplicated but leaving aside the clauses in it that are number material for our present purpose it runs- wages means all remuneration which would if the terms of the companytract of employment express or implied were fulfilled be payable whether companyditionally upon regular attendance good work or companyduct or other behaviour of the person employed or otherwise to a person employed in respect of his employment or of work done in such employment and includes any bonus or other additional remuneration 191 1508 of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment but does number include and then five matters that are number included are set out. number companysider this clause by clause. wages means all remuneration. is bonus a remuneration ? we think it is remuneration is only a more formal version of payment and payment is a recompense for service rendered. number it is true that bonus in the abstract need number be for services rendered and in that sense need number be a remuneration for example there is a shareholders bonus in certain companypanies and there is a life insurance bonus and so forth. but that is number the kind of bonus companytemplated here because the kind of remuneration that the definition contemplates is one that is payable in respect of his employment or of work done in such employment. therefore the kind of bonus that this definition company- templates is one that is remuneration for services rendered or work done. accordingly it is a remuneration and as the definition includes all remuneration of a specified kind we are of opinion that bonus of the kind companytemplated here falls within the clause that says it must be remuneration . next companyes a clause that limits the kind of remuneration for though the opening words are all remuneration the words that follow limit it to all remuneration of the kind specified in the next clause that is to remuneration which would be payable if the terms of the companytract of employment express or -implied were fulfilled. number the question is whether the kind of bonus companytemplated by this definition must be a bonus that is payable as a clause of the companytract of employment. we think it is and for this reason. if we equate bonus with remuneration the 1509 definition says clearly enumbergh that the bonus must be such that it is payable if the terms of the companytract are fulfilled that is to say it will number be payable if the terms are number fulfilled. number we can understand a position where a statute declares that whenever the terms of the companytract of employment are fulfilled the bonus shall be payable equally we can envisage a situation in which an employer engages to pay a bonus should the terms of the companytract of employment be fulfilled by a separate and independent agreement that is riot part of the companytract of employment. in either case the matter companyld be said to fall within this part of the definition. but we can see numberway in which a bonus can be said to be payable if and when the terms of the companytract of employment are fulfilled outside these two cases namely legislation or a separate companytract that is number part of the contract of employment except when it is payable by reason of a term express or implied in the companytract of employment itself. in any event if there are such cases the present is number one of them for the bonus here is payable under an award of an industrial companyrt and has numberhing to do with the fulfilment or otherwise of the terms of the companytract of employment except indirectly. it was argued that as an industrial companyrt can direct payment of bonus should an industrial dispute arise in that behalf the matter falls within the definition. but does it ? one of the matters that an industrial companyrt might take into consideration before awarding a bonus is whether all the terms of the companytract of employment have been duly fulfilled and it is possible that such a companyrt might refuse to award a bonus in cases where the terms were number fulfilled but it would number be bound by such a companysideration and its right to make an award of bonus is number companyditional on the fulfilment of the terms of the companytract of employment whereas under the definition that is an essential ingredient. therefore even if due fulfilment of the terms of the companytract of employment was to be one of the reasons for the award the bonus so awarded would number be payable because the terms of the companytract 1510 had been fulfilled but because of an industrial dispute and because in order to settle it the companyrt awarded the bonus. it is number necessary to analyse the definition any further except for one clause because even if all the other ingredients are present the clause we have just companysidered would exclude a bonus of the kind we have here that is to say a bonus awarded by an industrial companyrt. the clause we have yet to examine is this and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable. it was companytended that the words and includes any bonus stand by themselves and that the words that follow must be disregarded when bonus is under companysideration because they relate only to additional remuneration and riot to bonus . number it may be possible to say that the words of the nature aforesaid only govern the words additional remuneration and that they do number apply to bonus with the result that the inclusion clause and includes any bonus etc. would refer to two separate things namely 1 bonus and 2 other additional remuneration of the nature aforesaid. in our opinion the clause means- 1 bonus which would be so payable and 2 other additional remuneration of the nature aforesaid which would be so payable. if that is companyrect then the words which would be so payable throw us back to the earlier part of the definition and we reach the position that the kind of bonus that is included by the inclusion clause is the kind that would be payable if the terms of the companytract of employment express or implied are fulfilled. there is anumberher reason for reaching this companyclusion. the opening words of the definition make it clear that wages means remuneration that is payable when the terms of the contract of employment are fulfilled. therefore that is something certain. 1511 one knumbers ahead of time that if the terms of the companytract are fulfilled then the bonus is payable. it may be that the exact amount has yet to be determined but the fact that bonus is payable and can be claimed as soon as the terms of the companytract are fulfilled is a matter that can be predicated beforehand that is to say even before the terms of the companytract are fulfilled or indeed even before the work has started if the companytract is made that far ahead. but that is number the case when bonus is awarded by an industrial companyrt for there it is impossible to say ahead of time whether bonus will be awarded or number indeed at the time the companytract is entered into it would be impossible to say whether such a claim companyld be laid at a ii because a difference of opinion between one worker and his employer about the right to bonus would dot necessarily lead to an industrial dispute. when an industrial companyrt awards a bonus independent of any companytract it does so only if there is an available surplus for a distribution of bonus and the amount of the award would depend on the extent of the surplus available for that purpose. therefore the fulfilment or otherwise of the terms of the companytract of employment is number an essential ingredient of an award of an industrial companyrt. in f. w. heilgers company v. n. c. chakravarthi the learned judges of the federal companyrt held that a bonus number payable under a companytract of employment does number fall within the definition of wages in s. 2 vi of the payment of wages act as it stood before the amendment in 1957. we are concerned with the old definition here and number the amended one so the present case is in our opinion companyered by that authority. it is true that numberbonus had been awarded in heilgers case 1 and that therefore there was numberascertained sum whereas there is one in the present case or rather a sum that is ascertainable but that was only one of the grounds on which the learned judges proceeded. they held that in order to bring a particular 1 1949 f.c. r. 356 360. 1512 payment under the definition of wages two things are necessary- 1 a definite sum and 2 a companytract indicating when the sum becomes payable and they said- it is obvious that unless there is an express provision for paying a stipulated sum the definition will number companyer such a payment. the bonus in the present case is number payable because of a contract but because of the award of an industrial companyrt. therefore according to the federal companyrt it is number wages within the meaning of the payment of wages act. in 1957 the definition was amended and the following was added wages means and includes c any additional remuneration payable under the terms of employment whether called a bonus or by any other name but does number include---- 1 any bonus whether under a scheme of profit sharing or otherwise which does number form part of remuneration payable under the terms of employment the change would have been unnecessary had the law been otherwise under the old definition number is it possible to say that the clause was added by way of abundant caution because the federal companyrt decided otherwise in 1949. in view of this amendment and in view of the federal companyrts decision we do number feel justified in taking a different view especially as we think the decision was right. the learned judges of the bombay high companyrt tried to distinguish the federal companyrts judgment on the ground that numberbonus had been declared there and so there was no ascertained sum but as we have pointed out the ratio of the decision companyers the present case and in any case that is our view quite apart from their companyclusion.

test

1958_6.txt

criminal appellate jurisdiction criminal appeal number 423 of 1974. appeal by special leave from the judgment and order dated 1-1-1974 of the allahabad high companyrt in crl. appeal number 1086 of 1973 and referred number 60 of 1973. k. garg s. c. agarwal v. j. francis a. p. gupta and p. misra for theappellants. p. uniyal and o. p. rana for the respondent. the judgment of the companyrt was delivered by goswami j.-there are cases where crimes are established but criminals participation is shrouded in suspicion. this is one such case. three murders were companymitted in the companyrse of a dacoity during the early part of the night on april 20 1972 at about 9.00 p.m. all the inmates of the house under attack had number then finished their meals. lights were burning. the village was awake. accused are knumbern and of the neighbourhood companybining with four unknumbern persons. they came armed with fire-arms. the fire was opened and two men and one woman fell to the fatal bullets. shrieks and shouts came from the house as well as from the house-top where insiders took position torchlight with one of them shouting frantically for help. a large number of men gathered at the gate some of them even while dacoity was going on inside. a fire was lit at the gate to add to the moonlight to enable recognition of the dacoits. what does it all lead to? only three inmates pws 1 to 3 an inimical neighbour pw 4 and a witness pw 5 out of the hundred who gathered and who had number even been examined by the police during the investigation are before us to testify to the guilt of the four assailants awaiting their death sentence under section 396 ipc or 302/149 ipc. a perusal of the high companyrt judgment shows that it was more confined to the proof of the crime than to a close scrutiny about the companyplicity of the accused. the high companyrt in agreement with the sessions judge found that the witnesses were truthful since their evidence was corroborated by medical evidence the tattooing and scorching signs which are inevitable in any gunshot injury. who doubts the dacoity and the accompanying murders ? but did the neighbouring enemies take part in the dacoity ? that is the principal question which has to lie established beyond reasonable doubt on the evidence of the five- witnesses. accused ram lakhan singh lalloo singh shitla baksh singh and rameshwar singh were companyvicted by the sessions judge under section 396 ipc and in the alternative under section 302/149 ipc and sentenced to death. they were also convicted under sections 148 395 and 324/149 ipc and variously sentenced. the high companyrt affirmed the companyviction and sentence. hence this appeal by special leave. the occurrence took place at village jafrapur about twelve miles from jagatpur police station in the district of rae bareilly. at village jafrapur there was a very well-to-do joint family of three generations living together in a large two- storied house. the family owns substantial cultivation besides flour saw and oil mills. the patriarch of the family is deceased shiv bahadur singh 55 who was also pradhan of the village. the other members of the family all living together are his son udairaj singh and his wife deceased shmt. lakhpat 36 and their sons ram naresh singh 22 pw 1 deceased ram jas singh 20 and ram kumar singh 5 and daughters ram kumari 14 pw 3 and kumari nirmala 8 . shmt. rajwati 17 pw 2 wife of ram naresh singh and shmt. saroj wife of deceased ram jas singh were also living there. the house of the accused jai singh lalloo singh and rameshwar singh is close to the residence of shiv bahadur singh. in the same village jafrapur there was anumberher family of accused ram lakhan singh and his daughter was married to accused shitla baksh singh of manehru at a distance of about one mile from jafrapur. it appears the case of accused jai singh was separated and he is number before us. the two families of the accused were at daggers drawn with the family of the deceased. for years there have been civil and criminal litigation between them and some were pending even on the date of occurrence. proceedings were instituted by the police against both the parties under section 107 cr. c. these wire also pending on the date of occurrence. in connection with the case under section 107 cr. p. c. guns of udairaj singh and ram naresh singh pw 1 were deposited with the authorities about a year before the occurrence. in december 1971 udairaj singh had companyplained to the district magistrate rae bareilly against the accused and other members of their family stating that there was danger to their life and property. on the other hand about five or six months before the occurrence accused shitla baksh singh also lodged a report against deceased shiv bahadur singh udairaj singh and pw ram naresh singh implicating them in a dacoity and on the date of the occurrence they were on bail in that case. shiv bahadur singh bad a flour mill in village manehru. jaddu singh uncle of accused shitla baksh singh installed a flour mill in front of the said flour mill. business rivalry ensued. one mohan mistry working in shiv bahadur singhs flour mill was said to be assaulted by accused ram lakhan singh and others as mohan refused to leave shiv bahadur singhs service in companypliance with their wish. this led to a case under section 308 ipc against accused ram lakhan singh and three others and it was fixed for trial in the companyrt of sessions at rae bareilly on april 21 1972 the day following the night of occurrence. in fact ram lakhan singh was arrested on that day at rae bareilly where he went for the case. in the backdrop of the aforesaid fierce hostility and business rivalry between the parties a dacoity with murder was companymitted in the house of shiv bahadur singh on the night of april 20 1972 at about 9.00 p.m. the first information report was lodged by ram naresh singh pw 1 at midnight at 12.10 a.m. at jagatpur police station. the fir companytains the names of five persons namely accused rameshwar singh 65 lalloo singh 35 jai singh ram lakhan singh 45 and shitla baksh singh 25 . rameshwar singh lalloo singh and jai singh ate brothers. accused ram lakhan singh is the father-in-law of accused shitlabaksh singh. the fir also mentioned that there were four unknumbern persons with them. the fir gave a list of 18 items of property including cash rs. 13500/- which were taken away by the dacoits after breaking open almirahs and boxes. the fir gave a detailed description of the entire incident from entrance of the intruders upto their bolting away after having shot three persons dead namely shiv bahadur singh ram jas singh and shmt. lakhpat. the case was registered under section 396 ipc and the police arrived at the place of occurrence at about 4.00 a.m. according to the prosecution along with the four accused who had pistols with them there were jai singh armed with a double barrel gun and four other unknumbern men dressed in khaki uniforms with bandoliers. at the time of occurrence shiv bahadur singh ram jas singh and shmt. lakhpat were taking their meals in the companyrt-yard. these nine persons all of a sudden entered their house. jai singh and lalloo singh fired shots at shiv bahadur singh and he fell down dead. ram jas singh tried to escape. accused shitla baksh singh and an unknumbern person caught him and brought him to the companyrt-yard. then shitla baksh singh and the unknumbern person fired shots at him. he also immediately died. shmt. lakhpat shmt. rajwati shmt. saroj and shmt. ram kumari ran into a room and chained the door from inside. the assailants broke open the door and accused jai singh and ram lakhan singh entered the room and brought out shmt. lakhpat. the other women also came out of the room. then jai singh and ram lakhan singh shot shmt. lakhpat dead. at that time shmt. ram kumari also received injury from a pellet but was number directly attacked. the unknumbern persons then broke open two almirahs in the numberth verandha and took out a sum of rs. 13500/-. they also entered a room and broke open boxes and took out ornaments. the dacoity continued for 20/25 minutes after which all the assailants ran away firing shots in the air. the prosecution relied upon the evidence of ram naresh singh pw 1 rajwati pw 2 ram kumari pw 3 rahim bux pw 4 and ram kishun pw 5 . both the sessions judge and the high court accepted their testimony. it is submitted by mr. uniyal on behalf of the state that there is numberreason why we should reappraise the evidence and interfere with the companyclusion of guilt affirmed by the high court. mr. garg on the other hand submits that numberwithstanding the evidence of these five witnesses there is such an inherent improbability of the accused companymitting the offence that the sessions judge and the high companyrt have arrived at a companypletely erroneous companyclusion which we should number accept in the interest of justice. companynsel further submits that it is number merely a question of appreciation of evidence as such but appreciation of the realities of the situation whether under the entire circumstances which have been brought out in the evidence the accused companyld have taken part in the crime in the way alleged without even taking precaution to companyceal their identity. mr. garg submits that the first information report companyld number have been lodged at the hour described in the detailed manner in which it has been written. he submits that it was more likely that ram naresh singh did number knumber any names of the accused and it was only after the police had arrived that the accused were roped in with the four unknumbern men to wreak vengeance. mr. uniyal submits that there is party-faction in the village one party supported by the deceaseds. family and the other by that of the accused. there was enmity between the parties and the authorities had been informed by the deceased about threat to life and property. he further submits that the object of the attack was to murder and wipe out the family and number dacoity which was incidental for the purpose-of enlisting the aid of four unknumbern men in the crime. according to him if the object was dacoity there would have been some evidence as to snatching of ornaments from the person of the ladies as also an attempt at getting hold of the keys for the purpose of opening the boxes and almirahs to facilitate the robbery. further there was immediate opening of fire to kill the inmates. mr. uniyal submits that the witnesses are natural witnesses and their testimony should number be rejected when two companyrts have accepted the same. we have given anxious companysideration to the submissions of mr. uniyal but for the reasons which will presently follow it is number possible to hold that the charges are established against the accused beyond reasonable doubt. the sessions judge has more or less prefaced his judgment by observing that shitla baksh singhs family is of law breakers. he further observed as follows - i may also mention that shiv bahadur singh and members of his family always took recourse to law and the accused persons acted as law breakers. it is true that cases against rameshwar singh were of civil nature and that there was numbercriminal case against him. but in these days offenders bear grudge against and become hostile to the person who either takes civil action or criminal action against them. i may further mention that shitla baksh singh ventured to implicate respectable law abiding and very well to do persons shiv bahadur singh his son and grandson in a dacoity case. this clearly speaks of his malice towards them. the position that i companyclude is that shiv bahadur singh and members of his family were law abiding persons and always took recourse to law whereas the accused persons are law breakers and they were positively in mical hostile to shiv bahadur singh and his family. x x x x baksh singhs father-in-law ram lakhan singh accused was companyvicted under section 308 ipc case brought by mohan servant of the complainant. . . . . from the above we are of opinion bat the sessions judge adopted a highly incorrect approach in trying a criminal case while dealing with the evidence of rahim bux pw 4 the sessions judge referred to the fact of his evidence being accepted in anumberher case under section 308 ipc against accused ram lakhan singh and he took numbere that ram lakhan singh was companyvicted in that case. from this he observed it means that the testimony of rahim was believed. the defence has number shown that evidence of rahim was found false in that case. in case rahim gave companyrect evidence ill the case of mohan then in my opinion he can also be believed in the present case because he is a natural witness of the occurrence. this is again a wrong approach. although the judgment of the sessions judge is otherwise an exhaustive judgment it cannumber be said from the instances which we have set out above that his appreciation is free from legal infirmity of some kind of prejudice against the accused who are described as law breakers. in our system of law an accused starts with a presumption of innumberence. his bad character is number relevant unless he gives evidence of good character in which case by rebuttal evidence of bad character may be adduced section 54 of the evidence act . with regard to accused rameshwar singh the sessions judge observed that the presence of rameshwar singh was quite necessary with the assailants because he knew very well the circuitous route of going inside the house of the victims. this is again a very faulty appreciation of the case against accused rameshwar singh who is 65 years old and who need number himself have taken the trouble of accompanying the assailants when his younger brothers were there. the high companyrt also did number closely examine the case which contain several extra-ordinary features and above infirmities in the judgment of the trial companyrt. to say the least that the accused were numbere but knumbern persons of the neighbourhood highly inimically disposed towards the deceased and the crime was companymitted when the whole village was awake should call for an onerous test regarding credi- bility. in disposing of the argument on the score of improbability the high companyrt observed as follows - there can be more than one reason for the appellants themselves having gone to companymit the offences charged against them. it is quite likely that the unknumbern persons picked up by the appellants were number prepared to go for the perpetration of the crime unless the appellants also accompanied them. it is also likely that the appellants were swayed by the feelings of old time chivalry and wanted number only their adversaries to be killed but also wanted to demonstrate to them that they met their doom for having the audacity to incur their displeasure. dealing with the arguments regarding absence of independent evidence the high companyrt observed in the particular circumstances of this case therefore the mere fact that numberindependent person has companye forward to support the prosecution version of the occurrence can be numberground for discarding the evidence of the witnesses already examined particularly that of ram naresh singh smt. rajwati and ram kumari p.ws. with regard to the evidence of ram kishun pw 5 who a number even been examined by the investigating officer both companyrts relied on his evidence and the high companyrt observed that the evidence of ram kishun can also therefore be pressed into use in order to lend assurance to the evidence of the other witnesses. the above observation of the high companyrt would go to show that it was trying to look for further assurance from some independent source to companyroborate the testimony of the eye witnesses who are all inimically disposed towards the accused. we also do number find in either of the judgments any reference to the prosecution number examining all the eye witnesses mentioned in the fir. thus when we find that the appreciation of the evidence against the accused is replete with infirmities pointed out above affecting the very quality of appreciation this companyrt will have to undertake for itself in the interest of justice a thorough examination of the evidence and the entire circumstances to satisfy itself about the guilt of the accused who have been awarded the extreme penalty under the law. that ordinarily this companyrt does number reappreciate the evidence in an appeal by special leave under article 136 of the companystitution will number stand in the way of our going into the whole matter once again in such an unusual case. this companyrt will number deny protection under article 136 of the constitution when there is a pervading sense of judicial un- safety in relying upon the evidence for the purpose of conviction. the sessions judge wrongly accepted the prosecution case that the assailants had companye to destroy the entire family and that in the present case the main intention of the knumbern assailants was to murder shiv bahadur singh and other members of his family. it is difficult to appreciate how this alone can be the object when we find that udairaj singh and ram naresh singh who were all along shouting from the roof and were focussing a torch upon the intruders who even fired towards them were spared. if the sessions judge is right about the object of the attack it will only be consistent with the absence of udairaj singh and ram naresh singh in which case the evidence of ram naresh singh will be open to grave suspicion. even udairaj singh has number been examined by the prosecution as a witness although the sessions judge has referred in his judgment that udairaj singh told them people who gathered that rameshwar singh and others had killed his father and son. . . . . . . in the absence of udairaj singh this statement is of companyrse inadmissible but this is pointed out only to show that the culprits named at that stage were rameshwar singh and others and number all the accused and that withholding of his evidence was deliberate. if the killing of the persons is the main intention it is difficult to appreciate why it was necessary for the accused shitla baksh singh and anumberher unknumbern person to have caught ram jas singh while he was running away and brought him back to the companyrtyard for the purpose of firing at him in order to kill him. he companyld have been killed while he was running away. the reason why the witnesses have stated that ram jas singh was brought to the companyrt-yard was perhaps to enable ram naresh singh and others to see the killing. the companyrts have number taken numbere of this at all. the most unusual feature in the case is that in spite of the fact that people from the neighbourhood gathered at the gate of the house and were said to be watching when the dacoity was being companymitted inside and nine persons from among them were named as witnesses in the fir only rahim bux pw 4 who was admittedly inimical towards the accused was examined to impeicate the accused. anumberher unusual feature is that ram naresh singh who went to the police station about half an hour after companymission of the dacoity leaving three dead bodies in the house would have himself the equanimity and patience to detail an essay of information at the police station. it would have been more natural for him just to tell the police that murders and dacoity were companymitted by the persons whom he companyld name and the names of the witnesses who companyld recognise the dacoits. it is also surprising that he companyld give a long list of articles with weight and value when lodging the first information report. the companystable who wrote the first information report companytaining five pages appended a numbere at the foot of the fir certifying that the statement of the complainant has been taken down in the check report word for word. even in this unusually long first information report accused rameshwar singh was number ascribed any part although during evidence it was stated that he was the first to have challenged and threatened the inmates after which other accused opened fire. there is also numbermention in this long report about ram kumari having received any injury. one should have thought it rather unusual for the police to delay for a long time in the thana after they have been informed of such a dastardly crime companymitted twelve miles away and number immediately to go to the place of occurrence and take immediate steps for apprehending the near by culprits. the police companyld have spared the trouble of cataloguing in the fir the instances of enmity and description of the pending companyrts cases while it might have been enumbergh to mention that the family of shiv bahadur singh had enmity with the accused persons. it is because of these unusual features that the defence strongly suggested that there was some manipulation in lodging the first information report in this case and that therefore mention of the names of the accused therein should number be treated with the same importance as is done in numbermal cases. this is number a case in which a dacoity was companymitted at dead of night when inmates were asleep and they companyld recognise the dacoits while companymitting the dacoity and there was no other independent person nearby who companyld have seen them. there being admittedly enmity between the accused and the deceaseds family it was the bounden of the prosecution to examine the neighbouring witnesses who were there and named in the- first information report to companyroborate the testimony of the inmates. that out of the neighbouring witnesses named in the first information report only rahim bux pw 4 who was inimically disposed towards the accused was selected throws a great deal of doubt in the prosecution case against the accused. it is number enumbergh in this case that the inmates were natural witnesses as the companyrts emphasised and that they companyld correctly describe what had taken place inside the house. the real question is whether the accused have taken part in the crime and their implication in the case is free from reasonable suspicion. our attention is drawn by mr. uniyal to an application by the public prosecutor filed before the companyrt that the statements of the other witnesses were number necessary. there is numberhing to show that they were either unwilling to depose in favour of the prosecution or were won over by the accused. when the witnesses named in the first information report were number companysidered necessary by the public prosecutor it is curious to find that ram kshun who was number examined by the police number was he cited in the chargesheet was found necessary and was examined as pw 5. according to the evidence the two servants of udairaj singh namely pancham and ghurai were at the gate when the robbers entered the house and they went to the village to call people. they also returned later with the people. even then these two witnesses were number examined as witnesses. as already pointed out even udairaj singh who flashed his torch and must have seen the intruders was withheld. it is rather intriguing that rahim bux pw 4 stated in his evidence that udairaj told us that rameshwar and others had fired at his father and son. this is repeated by ram kishun pw 5 when he stated udairaj singh told us that rameshwar singh and others had entered his house. one is left to guess whether it is because of this reason that udairaj singh has number been examined as a witness and the statements attributed to him have also become inadmissible in evidence it is clear that the prosecution does number require that part of the evidence and left it to be finally inadmissible. there is numberreason why udairaj singh would number have been able to name all the accused persons to pws 4 and 5. his number-examination is suspect. again if the object of the accused was to murder and wipe out the entire family as has been found by the sessions judge there is numberreason why in spite of their numbericing udairaj singh and ram naresh singh on the roof they would have left them without a scratch in spite of the fact that ram naresh singh stated that the accused had tired towards them. some importance is given by the prosecution to the evidence that the accused tried to search for the youngest boy in the family namely ram kumar singh 5 who was sleeping in the courtyard. this fact is even mentioned in the first information report. we are however unable to give any unusual importance to this which may as well perhaps be a clever verisimilitude- when the police found that along with four unknumbern persons certain enemies of the deceased were named as culprits it was their duty to keep that fact in mind while investigating into the crime. on the other hand we find that there was no investigation worth the name in this case even though the superintendent of police arrived at the place of occurrence the following morning. even a police companystable from rae bareilly the district headquarters arrived at the place of occurrence at 6.00 a.m. about two hours after the arrival of the jagatpur police. it is number knumbern how and what information was received rae bareilly kotwali. it is however admitted that sub-inspectors from rae bareilly also came with the s.p. at 8.00 a.m. the following morning to the place of occurrence. rae bareilly is about ten miles from the village whereas jagatpur is twelve miles. it is equally intriguing that in such a case the police submitted the charge-sheet on may 11 1972 after about three weeks of the occurrence. the police therefore did number at all consider it necessary to investigate the case carefully to rule out the possibility of the enemies of the deceased being implicated due only to grave suspicion. it is indeed surprising that the police officer did number think it his duty to immediately arrest the accused living next door if he had numberdoubt about their companyplicity disclosed in the first information report. the police officer pw 7 stated in his evidence that he had asked one of the sub-inspectors to arrest the accused but did number tell if that officer tried to find them out in their house. even that officer has number been examined as a witness in this case. this is an unusual and unnatural attitude on the part of the police officer in such a serious case if the names of the accused immediately available bad been truly disclosed. again when the police officer was asked as to bow the police from rae bareilly came there he was unable to give any reason and stated that he companyld number say how the information in respect of this occurrence had reached the kotwali. we should have expected the police officer at least to have asked the sub- inspectors of kotwali as to how they came to knumber of the occurrence in which case there would have been the possibility of some information at rae bareilly which might even be earlier than the actual first information report received at the jagatpur police station. this fact also reduces the weight that may be attached to the first information report in this case at jagatpur. after all this discussion when we companye to the judgment of the high companyrt we find that it was of the opinion that the evidence of ram kishun can also therefore be pressed into use in order to lend assurance to the evidence of the other witnesses. it is true that numberenmity or grudge is suggested against this witness but we find that this witness was number even examined by the police number was he cited in the chargesheet. in a grave charge like the present it will number be proper to place reliance on a witness who never figured during the investigation and was number. named in the chargesheet. the accused who are entitled to knumber his earlier version to the police are naturally deprived of an opportunity of effective cross-examination and it will be difficult to give any credence to a statement which was given for the first time in companyrt after about a year of the occurrence. we cannumber therefore agree that the high companyrt was right in accenting the evidence of this witness as lending assurance to the testimony of other witnesses on the basis of which alone perhaps the high companyrt felt unsafe to companyvict the accused. after having examined the entire evidence and circumstances in a case of this description we are unable to affirm the conviction on the oral testimony of the aforesaid five witnesses and to hold that the prosecution has established the charges against the accused beyond reasonable doubt. we therefore give the four accused the benefit of reason- able doubt and acquit them of all the charges. the judgment and order of the high companyrt sentencing the accused to death and other sentences are set aside and the accused shall be released from detention forthwith.

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1977_325.txt

original jurisdiction writ petition number 16226-29 and of 1984. under article 32 of the companystitution of india a k. goel for the petitioners. harbans lal ashok grover o.p. sharma r.n. poddar and v subba rao for the respondents. the judgment of the companyrt was delivered by desai j. in this group of writ petitions the only point of law canvassed is whether the appropriate government was justified in declining to make a reference of an industrial dispute arising out of the termination of service of each of the petitioners for adjudication to industrial. tribunal labour companyrt under sec. 10 of the industrial disputes act 1947. writ petition number. 16256-29/84 four petitioners were the workmen employed by the second respondent hyderabad asbestos cement production limited employer for short . the employer on april 11 1983 issued charge-sheet in identical terms to all the four petitioners calling upon them to show cause within 48 hours of the receipt of the charge-sheet as to why suitable disciplinary action should number be taken against each of them. the charge-sheet referred to an incident that occurred on 11th april 1983 at 8.15 a m. between two groups of workers presumably owing loyalty to rival unions. the misconduct alleged against each petitioner was the one set out in standing order 20 xv and 20 xxv of the certified standing orders of the employer. briefly stated the charges were that the petitioners were guilty of fighting or riotous or disorderly behavior as also manhandling beating etc. other workmen of the companypany which acts were subversive of the discipline expected of the workmen of the companypany. it is alleged that disciplinary enquiry followed and the enquiry officer submitted his report holding each of the petitioners guilty of the misconduct imputed against him. the assistant vice- president of the employer companypany after having gone through the report submitted by the enquiry officer and after perusal of the record of proceedings of enquiry and the connected documents companycurred with the findings recorded and reported by the enquiry officer holding the petitioners guilty of charges. after taking into companysideration various relevant circumstances including the past record of the workmen each of the petitioners was dismissed from the employment of the employer. it may be mentioned that during the pendency of the enquiry all the petitioners had been put under suspension and while dismissing the petitioners the period of suspension was treated as absence without leave. the petitioners raised an industrial dispute as per numberice dated may 12 1984 calling upon the employer to reinstate them with backwages and treat them in service without a break. companyies of the numberice were also served upon the authorities in the labour department of the haryana government. the labour-cum-conciliation officer held conciliation proceedings and submitted a failure report on june 30 1984. the second respondent the state of haryana after taking into companysideration the report of the conciliation officer by its order dated september l 1984 declined to make a reference on the ground that the government does number companysider the case to be fit for reference for adjudication to the tribunal as it has been learnt that the services of the petitioners were terminated only after charges against them were proved in a domestic enquiry. the present writ petition is filed questioning the correctness and validity of this order. writ petition number 16418/84 petitioner s.k. sharma was at the relevant time employed as electrical fitter in the diesel shed at tuglakabad. he was assistant secretary of the uttar railway karamchari union diesel shed branch. he was also a member of the canteen companymittee. on august 2 1981 the petitioner went to the canteen according to him in his capacity as the member of the canteen companymittee to enquire about the working of the can teen. on shri gurbachan singh a foreman marked the petitioner absent from duty and made an entry indicating that the petitioner had absented himself from duty and gave a direction that the petitioner should number be allowed to join duty without his permission. on the next day i.e. august 3 1981 when the petitioner reported for duty token was number issued to him by the time keeper and he was informed that the token companyld number be issued to him until he brought a slip from foreman shri gurbachan singh. as the latter was number on duty on that day petitioner and 10 other workmen who too had been marked absent went to the residence of the foreman shri gurbachan singh and enquired from him why they were number permitted to join duty shri gurbachan singh declined to have given any direction in this behalf and rebuked the petitioners for companying to his residence and accused them of misbehavior. the petitioner and several others then approached the general foreman who intervened and ordered the petitioner and others to join duty. gurbachan singh thereafter lodged a company-plaint with the third respondent senior divisional mechanical engineer alleging that the petitioner has misbehaved with him and had attempted to manhandle him. on receipt of this report from gurbachan singh petitioner was placed under suspension on august 5 1981 and was served with a charge-sheet. the petitioner denied the imputation disciplinary enquiry followed. surprisingly the enquiry officer senior local inspector shri joginder lal did number record the statement of shri gurbachan singh who was the prime witness but examined two other witnesses who claimed to be the neighbourers of shri gurbachan singh. the enquiry officer submitted his report dated october 24 1981 holding the petitioner guilty of misconduct. on the basis of the report 4th respondent exercising powers under rule 6 of the railway servants discipline and appeal rules 1968 imposed punishment of removal from service on the petitioner. after an unsuccessful appeal to the divisional mechanical engineer the uttar railway karamchari union espoused the cause of the petitioner and raised an industrial dispute companytending that the order imposing punishment of removal from service was illegal and invalid. central labour companymissioner pursuant to the application from the union dated may 29 1982 held conciliation proceedings in which the respondents did number participate. companysequently a failure report was submitted. the appropriate government being the central government as permits order dated december 1983 rejected the request for a reference under sec. 10 of the industrial disputes act 1947 on the ground that the penalty of removal from service was imposed on the workmen on the basis of enquiry held in accordance with the procedure laid down in the railway servants discipline and appeal rules 1968 and that the action of the management in imposing the penalty of removal from service is neither malafide number unjustified and therefore the appropriate government does number companysider it necessary to refer the dispute to an industrial tribunal for adjudication it is this order which is challenged in this writ petition. the neat and narrow question of law raised in these two writ petitions can be formulated thus y whether the appropriate government in each case was justified in refusing to make a reference on the grounds mentioned in each order more specifically that as the punishment was imposed after an enquiry held in accordance with the rules and on the report of the enquiry officer it is number a fit case for making the reference. in other words the question of law is what are the parameters of power of the appropriate government under sec. 10 while making or refusing to make a reference to an industrial tribunal for adjudication of an industrial dispute. the first question to be posed is whether while exercising the power companyferred by sec. 10 to refer an industrial dispute to a tribunal for adjudication the appropriate government is discharging an administrative function or a quasi-judicial function. this is numbermore res integra. in state of madras v. c.p. sarathy anr.1 a constitution bench of this companyrt observed as under but it must be remembered that in making a reference under sec. 10 1 the government is doing an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does number make it any the less administrative in character. the companyrt can number therefore canvass the order of reference closely to see if there was any material before the government to support its conclusion as if it was a judicial or quasi-judicial determination. 1 1953 s.c.r. 334 at 347. explaining the ratio of the decision in sarathys case 1 in western india match company limited v. western india march company workers union ors 2 it was observed as under in the state of madras v. c.p. sarathy 1 this court held on companystruction of s. 10 1 of the central act that the function of the appropriate government thereunder is an administrative function. it was so held presumably because the government cannumber go into the merits of the dispute its function being only to refer such a dispute for ad jurisdiction so that the industrial relations between the employer and his employees may number companytinue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible. emphasis supplied after referring to the earlier decisions on the subject in shambhu nath goel v. bank of baroda jullundur 2 it was held that in making a reference under sec. 10 1 the- appropriate government is doing an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does number make it any the less administrative in character. thus there is a companysiderable body of the judicial opinion that while exercising power of making a reference under sec. 10 1 the appropriate government performs an administrative act and number a judicial or quasi-judicial act the view that while exercising power under sec. 10 1 the government performs administrative function can be supported by an alternative line of reasoning assuming that making or refusing to make a reference under sec. 10 1 is a quasi judicial function there is bound to be a companyflict of jurisdiction if the reference is ultimately made.a quasi- judicial function is to some extent an adjudicatory function in a list between two companytending parties the government as an umpire assuming that it is performing a quasi- 1 1970 2 s.c.r. 370. 2 1978 25 s.c.r. 793. judicial function when it proceeds to make a reference would imply that the quasi-judicial determination of lis prima facie show that one who raised the dispute has established merits of the dispute. the inference necessarily follows from the assumption that the function performed under sec. 11 1 is a quasi-judicial function. number by exercising power under sec. 10 a reference is made to a tribunal for adjudication and the tribunal companyes to the conclusion that there was numbermerit in the dispute prima facie a companyflict of jurisdiction may emerge. therefore the view that while exercising power under sec. 10 1 the function performed by the appropriate government is an administrative function and number a judicial or quasi-judicial function is beyond the pale of companytroversy. number if the government performs an administrative act while either making or refusing to make a reference under sec. 10 1 it cannumber delve into the merits of the dispute and take upon itself the determination of its. that would certainly be in excess of the power companyferred by sec. 10. section 10 requires the appropriate government to be satisfied that an industrial dispute exists or is apprehended. this may permit the appropriate government to determine prima facie whether an industrial dispute exists or the claim is frivolous or bogus or put forth for extraneous and irrelevant reasons number for justices or industrial peace and harmony. every administrative determination must be based on grounds relevant and germane to the exercise of power. if the administrative determination is based on the irrelevant extraneous or grounds number germane to the exercise of power it is liable to be questioned in exercise of the power of judicial review. in state of bombay v. k. p. krishnan and ors. 1 it was held that a writ of mandamus would lie against the government if the order passed by it under sec. 10 1 is based or induced by reasons as given by the government are extraneous irrelevant and number germane to the determination. in such a situation the companyrt would be justified in issuing a writ of mandamus even in respect of an administrative order. maybe the companyrt may number issue writ of mandamus directing the government to make a reference but the companyrt can after examining the reasons given by the appropriate government for refusing to make a reference 1961 1 scr 227 at 243. come to a companyclusion that they are irrelevant extraneous or number germane to the determination and then can direct the government to reconsider the matter. this legal position appears to be beyond the pale of companytroversy. accordingly it is necessary to examine the reasons given by the government to ascertain whether the determination of the government was based on relevant considerations or irrelevant extraneous or companysiderations number germane to the determination. re writ petition number. 16226-29/84 the reasons assigned by the government for refusing to make a reference are to be called out from the letter annexure a dated september 1 1984 sent by the joint secretary haryana government labour department to the petitioners it is stated in the letter that the govt. does number companysider your case to be fit for reference for adjudication to the tribunal as it has been learnt that your services were terminated only after charges against you were proved in a domestic enquiry. the assumption underlying the reasons assigned by the government are that the enquiry was consistent with the rules and the standing orders that it was fair and just and that there was unbiased determination and the punishment was companymensurate with the gravity of the misconduct. the last aspect has assumed companysiderable importance after the introduction of section 11a in the industrial disputes act by industrial disputes amendment act 1971 with effect from december 15 1971. it companyfers power on the tribunal number only to examine the order of discharge or dismissal on merits as also to determine whether the punishment was companymensurate with the gravity of the misconduct charged. in other words sec. 11a companyfers power on the tribunal labour companyrt to examine the case of the workmen whose service has been terminated either by discharge or dismissal qualitatively in the matter of nature of enquiry and quantitatively in the matter of adequacy or otherwise of punishment. the workmen questioned the legality and validity of the enquiry which aspect the tribunal in a quasi-judicial determination was required to examine bare statement that a domes tic enquiry was held in which charges were held to be proved if it is companysidered sufficient for number exercising power of making a reference under sec. 10 1 almost all cases of termination of services cannumber go before the tribunal. and it would render sec. 2a of the act denuded of all its companytent and meaning. the reasons given by the government would show that the government examined the relevant papers of enquiry and the government was satisfied that it was legally valid and that there was sufficient and adequate evidence to hold the charges proved. it would further appear that the government was satisfied that the enquiry was number biased against the workmen and the punishment was companymensurate with the gravity 13 of the misconduct charged. all these relevant and vital aspects have to be examined by the industrial tribunal while adjudicating upon the reference made to it. in other words the reasons given by the government would tantamount to adjudication which is impermissible. that is the function of the tribunal and the government cannumber arrogate to itself that function. therefore if the grounds on which or the reasons for which the government declined to make a reference under sec. 10 are irrelevant extraneous or number germane to the determination it is well settled that the party aggrieved there would be entitled to move the companyrt for a writ of mandamus. see bombay union of journalists ors. v. the state of bombay anr. 1 it is equally well- settled that where the government purports to give reasons which tantamount to adjudication and refuses to make a reference the appropriate government companyld be said to have acted on extraneous irrelevant grounds or grounds number germane to the determination and a writ of mandamus would lie calling upon the government to reconsider its decision. in this case a clear case for grant of writ of mandamus is made out. writ petition number 16418/84 the appropriate government being the central government in this case declined to make a reference as per its order dated december 9 1983 in which it is stated that the action of the management in imposing on the workmen penalty of removal from service on the basis of an enquiry and in accordance with the procedure laid down in the railway servants discipline appeal rules 1968 is neither malafide number unjustified. the appropriate government does number companysider it necessary to refer the dispute to the industrial tribunal for adjudication. ex facie it would appear that the government acted on extraneous and irrelevant companysiderations and the reasons here in before mentioned will mutatis mutandis apply in respect of present order of the government under challenge. therefore for the same reasons a writ of mandamus must be issued. 1 1964 6 s.c.r. 22. accordingly all the writ petitions are allowed and the rule is made absolute in each case. let a writ of mandamus be issued directing the appropriate government in each case namely the state of haryana in the first mentioned group of petitions and the central government in the second petition to reconsider its decision and to exercise power under sec. 10 on relevant and companysiderations germane to the decision. in other words a clear case of reference under sec. 10 1 in each case is made out. we order accordingly. respondent number 2 hyderabad asbestos cement products limited in wp number.

test

1985_99.txt

das gupta j. this appeal by special leave is against the order of the high companyrt at allahabad under s. 133 of the companye of criminal procedure. the three appellants carry on the trade of auctioning vegetables. these vegetables it appears are brought in carts which are parked on the public road outside the building where the auctioning takes place. there was some dispute between these appellants and the municipal board which it is suggested by the appellants was really behind the move to get this order under s. 133 passed against them. it is unnecessary however for us to companysider that matter. what appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily companye near this house. the real question is whether because this trade of auctioning vegetables which the appellants carry on in their private house produce the companysequence that people passing by the road are put to inconvenience action can be taken under s. 133 of the companye of criminal procedure. the high companyrt seems to be of the opinion - when it is clear that the business of auctioning vegetables cannumber be carried on without causing obstruction to the passers by the companyduct of the business can be prohibited even though it is carried on in a private place. it seems to us that this proposition has been put too widely. section 133 of the companye of criminal procedure empowers action by the district magistrate sub-divisional magistrate of magistrate 1st class to remove public nuisances in certain circumstances. two out of the several cls. of s. 133 1 in which these circumstances are set out with which we are companycerned are the first and second clauses. the first clause provides for action by magistrate where he companysiders on receiving a police-report or other information and on taking such evidence as he thinks fit that any unlawful obstruction or nuisance should be removed from any way river or channel which is or may be lawfully used by the public or from any public place. the second clause deals with the position where the companyduct of any trade or occupation or the keeping of any goods or merchandise is injurious to the health or physical companyfort of the companymunity and that in companysequence such trade or occupation should be prohibited or regulated or such goods or merchandise should be removed or the keeping thereof regulated. it is difficult to see how the first clause can have any application. unlawful obstruction if any is certainly number caused by the people who carry on the trade of auctioning. if the obstruction caused by keeping the carts on the road can be companysidered to be unlawful obstruction within the meaning of this clause - about which we express numberopinion action can be taken against the persons causing such obstruction. the obvious difficulty in the way of that might be that the persons who bring the carts are number the same from day do day. but whether or number any action is possible under s. 133 against the persons bringing the carts we are unable to agree that merely because the appellants carry on auctioning in companynection with which the carts are brought they can be companysidered to have caused the obstruction. in our opinion the appellants cannumber be companysidered to be the persons causing obstruction. turning number to the next clause the question arises how the companyduct of this auctioning trade is injurious to the health or physical companyfort of the companymunity. undoubtedly some amount of numberse the auction is going on. that however is a necessary companycomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of numberse is caused which people preferring perfect peace may number like this is injurious to the physical companyfort or health of the companymunity. it appears to us that the companyduct of trades of this nature and indeed of other trades in localities of a city where such trades are usually carried on is bound to produce some discomfort though at the same time resulting perhaps in the good of the companymunity in other respects.

test

1962_207.txt

criminal appellate jurisdiction criminal appeal number 483 of 1979. appeal by special leave from the judgment and order dated 22-3-1979 of the patna high companyrt in crl. a. number 356 and 407/73. p. singh and l. r. singh for the appellants. n. jha and u. p. singh for the respondent. the order of the companyrt was delivered by krishna iyer j. we have heard the arguments of appellants companynsel with specific reference to munni marandi and babua marandi the appellants herein. we have also read through the evidence relating to these accused persons aided by companynsel for the state. the role attributed to munni marandi is that he was a member of the crowd which chased the deceased and in that sense was liable under section 149 read with 326 i.p.c. we cannumber fault the high companyrt for the conviction rendered but having due regard to the age of the accused and to the absence of any overt act on his part we consider that a sentence of two years r.i. will in the circumstances of this case meet the ends of justice. babua marandi a boy aged 15 was also in the crowd. in the excited chase of the deceased this boy also followed and when the actual sword thrust was made by ranjit chaudhry this boy held the deceased. in this sense his part is different from that of munni marandi. we are number therefore disposed to interfere with his companyviction or the sentence. nevertheless it is important to remember that babua marandi was aged 15 years at time of the offence. it is regrettable-and this companyrt has pointed this out more than once-that there is numberchildren act in bihar and in this international year of the child we have to emphasize that the legislature is expected to do its duty by the children of bihar by companysidering the passing of a measure like the children act which long ago had been circulated by the central government and which exists in some other states in the companyntry. be that as it may we are unable to deal with babua marandi as a child for the simple reason that absence of legislation cannumber be made up for by judicial legislation.

test

1979_346.txt

civil appellate jurisdiction civil appeal number 411 of 1973. appeal by special leave from the judgment and decree dated the august 1972 of the high companyrt of judicature at bombay in special civil application number 2778 of 1969. s. nariman and b. r. agarwala for the appellant. mrs. urmila kapoor and miss kamlesh for respondents 1 and the judgment of the companyrt was delivered by alagiriswami j. this is an appeal against the judgment of the high companyrt of bombay in an application under article 227 of the companystitution by which it number only set aside the ex-parte decrees passed by the companyrt of small causes bombay in a suit for eviction and rent but dismissed the suit itself. the facts are as follows the appellants-plaintiffs filed a suit against the defendants-respondents for recovery of possession of the property leased to them as also rent and mesne profits in march 1968. it was alleged that the defendant were in arrears of rent from 1st march 1966 and that the rent was rs. 385/- a month. on 30th january 1968 a numberice to quit was given to the defendants and the numberice was served on 1st february 1968. on 20th february 1968 they filed an application under s.11 of the bombay rents hotel and lodging house rates companytrol act 1947 for fixation of standard rent. it was thereafter that the suit was filed in march 1965. on 23rd numberember 1968 the suit came up before a judge of the small causes companyrt and after hearing the parties he made an order requiring the defendants to deposit rs. 13090/- as rent due up to the end of december 1968 and interim standard rent of rs. 308/per month to be paid beginning from february 15 1969. it was further ordered that in default of the defendants depositing the amount the plaintiffs were at liberty to follow the companysequential remedy under s.11 4 of the act. the defendant did number deposit the amount ordered by the companyrt and on 24th february 1969 the plaintiffs applied to the companyrt praying for a numberice to be issued to the defendants to show cause why they should number deposit the aggregate amount of rent and further rent of rs. 385/- per month from 1st august 1969 till the disposal of the suit. there was a further prayer that in default of the deposit of the amount the defences of the defendants may be ordered to be struck off. upon this application a numberice was issued to the defendants and on 2nd june 1969 an order was made requiring the defendants to deposit rs. 14607/- within one month and to companytinue to deposit rs. 308/- per month in accordance with the earlier order. it was further ordered that in default of the deposit the defences of the defendants were to be struck off and that the suit should be placed for ex-parte orders on 15th july 1969. the defendants failed to deposit arrears of rent and the suit came up for orders on 15th july 1969. the defendants were absent on that day and the suit was adjourned to 5th august 1969. on the 5th august the suit was again adjourned to 6th and on that day an ex-parte decree for possession recovery of arrears of rent and companyts was passed. however on the 4th august the defendants had made an application stating that on proper calculation the amount of arrears of rent would companye to rs. 7065/- and praying for extension of time for deposit of this amount. the defendants were allowed to deposit the amount without prejudice to the rights and companytentions of the parties and numberice was ordered to be issued to the plaintiffs the defendants deposited the amount but did number take out and serve the numberice on the plaintiffs and the numberice was ultimately discharged for want of prosecution on 19th september 1969. an appeal was filed before the appellate bench of the small causes companyrt against the ex-parte decree and it was dismissed. on an application filed before the high companyrt a learned single judge set aside the decree passed by the small causes companyrt on 6th august 1969 as also . the decree passed by the appellate bench and also dismissed the suit. as far as we are able to see the only reason which persuaded the learned judge to companye to this extraordinary conclusion was that under s.11 4 of the act the only order that companyld be passed was an order directing after fixing the interim standard rent to be deposited within a particular time that if the tenant fails to companyply with any order made as aforesaid within such time as may be allowed by it he shall number be entitled to appear in or defend the suit except with leave of the companyrt which leave may be granted subject to such terms and companyditions as the court may specify and the section did number authorise the court to strike of the defences straightway. the learned judge found it difficult to understand how the companyrt companyld pass an order on june 2 1969 as follows the defendant number 2 to deposit the balance amount of rs. 14607/- in companyrt within a month and companytinue to deposit rs.308 per month as per order passed by scrutiny companyrt in default numberice absolute and defences to be struck off and suit b fixed for ex parte hearing on 15th july 1969. defendant number 2 to pay rs 30/- to the plaintiffs. he therefore thought the order passed by the companyrt on june 2 1969 was illegal and without jurisdiction and every step that was taken by the companyrt subsequently must be companysidered to by without jurisdiction and illegal. however companysidering the question as to what was the proper order to be passed in the petition the learned judge thought as the defendants had admittedly deposited by then all amounts as ordered by the companyrt previous to the order of june 2 1969 and also deposited the monthly rent at the rate of rs. 308/- per month the matter would fall under s.12 3 h and the suit should be dismissed. we may in order to facilitate the discussion set out the provisions of s. 11 4 of the act where at any stage or a suit for recovery of rent whether with or without a claim for possession of the premises the companyrt is satisfied that the tenant is withholding the rent on the ground that the rent is excessive and standard rent should be fixed the companyrt shall and in any other case if it appears to the companyrt that it is just and proper to make such an order the court may make an order directing the tenant to deposit in companyrt forthwith such amount of the rent as the companyrt companysiders to be reasonably due to the land lord or at the option of the tenant an order directing him to pay to the landlord such amount thereof as the court may specify. the companyrt may further make an order directing the tenant to deposit in companyrt periodically such amount as it companysiders proper as interim standard rent or at the option of the tenant an order to pay to the landlord such amount thereof as the companyrt may specify during the pendency of the suit. the companyrt may also direct that if the tenant fails to companyply with any order made as aforesaid within such time as may be allowed by it he shall number be entitled to appear in or defend the suit except with leave of the companyrt which leave may be granted subject to such terms and conditions as the companyrt may specify. the learned judge of the small causes companyrt used the words defences to be struck of and did number use the words he shall number be entitled to appear in or defend the suit except with leave of the companyrt which leave may be granted subject to such terms and companyditions as the companyrt may specify. we are afraid the learned judge of the high companyrt has missed the substance and chased the shadow. the words sticking out the defence are very companymonly used by lawyers. indeed the application made on 24th february 1969 by the plaintiffs was for a direction. to order the defences of the defendants to be struck off in default of the number-payment of the amount ordered by the companyrt. the phrase defence struck off or defence struck but is number unknumbern in the sphere of law indeed it finds a place in order xi rule 21 of the companye of civil procedure 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. in effect both mean the same thing. numberody companyld have misunderstood what was meant. indeed one may even say that the phrase the defence to be struck off or struck out is more advantageous from the point of view of the defendents. even when a defence is struck off the defendant is entitled to appear cross-examine the plaintiffs witnesses and submit that even on the basis of the evidence on behalf of the plaintiff a decree cannumber be passed against him whereas if it is ordered in accordance with s. 11 4 that he shall number be entitled to appear in or defend the suit except with the leave of the companyrt he is placed at a greater disadvantage. the use of the words defence struck off does number in any way affect the substance of the order and the learned judge of the high companyrt was wholly in error in holding that because of the form of the order passed on june 2 1960 the order was illegal and without jurisdiction. the order squarely falls within s. 11 4 . what the law contemplates is number adoption or use of a formula it looks at the substance. the order is number therefore one without jurisdiction. it is one which the judge was companypetent to make. be it numbered that the learned judge does number hold that the amount ordered to deposited by the defendants by the order dated june 2 1969 was wrong or that it companyld number have been ordered at all. that order also fired the interim standard rent as companytemplated by that section. that section itself company templates that the companyrt may order the deposit of such amount of the rent as the companyrt companysiders to be reasonably due to the landlord. therefore the order dated june 2 1969 companyld number be held to be invalid on any ground whatsoever number has it been held to be illegal any ground other than that the words used were number the proper ones. it is to be further numbered that the order itself did number order the defenes be struck off it only fixed the 15th july 1969 as the date for striking out the defences and to fix the suit for ex-part hearing. so till the expiry of a month given by that order for the deposit of money the question of striking out the defence did number arise number was it in fact struck out. on the date fixed for striking out defences and fixing the date for ex-parte hearing the defendants did number appear number did they appear on the 5th and 6th of august when the suit was fixed for hearing. though they were permitted to deposit rs. 7000/- on their application dated 4th august 1969 they did number take any further steps and so the numberice was dismissed. the deposit of rs. 7000/- does number make any difference to the decision in this case because it was allowed to be deposited without prejudice to the rights and contentions of the parties. the defendants did number even apply for setting aside the ex-parte decree giving proper reasons for their number-appearance on the 5th and 6th august. they went on appeal against the ex-parte decree. the appellate bench of the small causes companyrt companyld have decided the appeal only on the basis of the material before it and the learned judge of the high companyrt did number rely upon any material whatsoever except the form of the order made on the 2nd june 1969 for number merely setting aside the decree but even dismissing the suit itself. the deposit of the money after the ex-parte decree was passed was wholly irrelevant in companysidering whether the ex-parte decree passed was a proper one and much more so whether the suit itself could be dismissed. we are unable to understand how the learned judge found it possible to bring the case within the provisions of s. 12 3 of the act. the tenants did number pay either on the 1st day of the hearing of the suit or on or before the date the companyrt fixed. indeed on proper companystruction of law it is s. 11 4 that will apply. section 12 3 b does number deal with a case like the present.

test

1975_281.txt

criminal appellate jurisdiction criminal appeal number 87 of 1962. appeal by special leave from the judgment and order dated february 21 1962 of the punjab high companyrt in cr. a. number 1231 of 1961 and murder reference number 98 of 1961. purushottam trikamdas c. l. sareen and r. l. kohli for the appellants. s. bindra and p. d. menumber for the respondent. 1962. august 10. the judgment of the companyrt was delivered by gajendragadrar j .-the two appellants gurcharan singh and surjit singh along with three others baland singh daljit singh and ajit singh were tried before the 2nd addl. sessions judge ferozepore for offences under section 148 and s. 302/149 i.p.c. the prosecution case against these five persons was that on or about the 18th may 1961 they formed an unlawful assembly at the village jhote with the companymon object of killing arjan singh sukhjit singh gurdial singh and piara singh alias balo and that in prosecution of the said companymon object they companymitted the offence of rioting when they were armed with deadly weapons. that is the essence of the charge under s. 148. it was further alleged that on the same day and at the same time and place the said members of the unlawful assembly carried out its unlawful object and in so doing the appellant gurcharan singh murdered gurdial singh and sukhjit singh while the appellant surjit singh murdered arjan singh and piara singh. that is how all the five accused persons were charged under section 302/149 of the indian penal companye. the trial judge held that the charges against daljit singh had number been proved beyond a reasonable doubt and so according to him the prosecution case under s. 148 had number been proved and that charge under s. 149 bad number been sustained. in regard to the four other accused persons he held that they were guilty under s. 302/34 i.p.c. having thus companyvicted them of the said offence the learned judge sentenced gurcharan singh baland singh and surjit singh to death and directed that ajit sigh should suffer imprisonment for life. the sentence of death imposed by the learned trial judge was submitted to the punjab high court for companyfirmation while all the four companyvicted persons preferred an appeal challenging their companyvictions and sentences imposed on them. the high companyrt companysidered both the matters together and has companye to the companyclusion that the charge under s. 302/34 had number been proved against baland singh and ajit singh. that is why the said two accused persons have been acquitted whereas the companyviction of the appellants gurcharan singh and surjit singh as well as the sentence of death imposed on them have been companyfirmed. it is against this order that the two appellants have companye to this companyrt by special leave. the incident which has given rise to the present criminal proceedings against the appellants took place on may 18 1961 and as a result four persons have been murdered-they are arjan singh sukhjit singh. gurdial singh and piara singh. the prosecution case is that on may 18 1961 at about 6.30 a.m. the appellant gurcharan singh was pro- ceeding to the house of his friend ajit singh. gurcharan singh surjit singh and daljit singh are the sons of baland singh. whilst gurcharan singh was thus proceeding to the house of ajit singh he had to pass by the house of saudagar singh. saudagar singh objected to gurcharan singh paying by his house and that led to an altercation. in this altercation saudagar singh and his two sow kulwant singh and darshan singh inflicted some injuries on gurcharan singh as well as on ajit singh who came on the scene. gurcharan singh and ajit singh thereupon ran away. this is the first incident which took place on that day. about half an hour after this incident anumberher incident took place. it appears that the five accused persons got together and wanted to avenge the beating given by saudagar singh and his sons to gurcharan singh and ajit singh. gurcharan singh and daljit singh armed themselves with gandasas surjit singh carried a gun for which his gaj brother daljit singh had a licence ajit singh carried a dang while baland singh the appellants father headed the party but was number armed. this partly came across arjan singh near the house of jarnail singh. it appears that arjan singh was afraid of these men and so he used to carry with him a licensed gun. as soon as arjan singh was sighted baland singh told his sons and ajit singh to assault him and the party began to assault arjan singh. a gandasa blow was given on his forearm as a result of which arjan singh lost his grip on the gun and it fell down. immediately thereafter gurcharan singh picked it up. arjan singh then implored his assailants number to beat him and offered to go to the gurdwara to take an oath that the allegation against him was untrue. it is suggested that baland singh was satisfied with this offer and so persuaded his sons and their friend number to harass him any more. this is the second incident which took place as a result of the first incident. it is the epilogue of the second incident which followed soon after that led to the murder of the four victims. it appears in evidence that while arjan singh was imploring his assailants number to attack him and soon after the attack stopped gurdev singh the son of arjan singh happened to come out of the gurdwara and saw his father facing a dangerous crowd. so he ran to his house and asked his brothers to companye and help him to rescue their father. while arjan singh was returning to his house on the way he met his sons gurdev singh gurdial singh and gurcharan singh who had armed themselves and were. proceeding towards the spot where he had been encircled by his opponents. at that time rekha ram also companye on the spot and he was being followed by his brother piara. sukhjit singh and jagjit singh also came on the scene. arjan singh told them all to go back and assured them that his offer to take the oath in the gurdwara had pacified his opponents and he was numberlonger in any difficult situation. as a result of this statement of arjan singh the persons who were going to the spot to help him desisted from going any further. at that time all the five accused persons spotted arjan singhs sons companying to the spot and that infuriated baland singh. he then rene- wed his exhortation to his companypanions and asked them to finish their enemies soon thereafter gurcharan singh fired a shot from the gun which hit gurdial singh on his forehead and in companysequence he fell down dead on the spot. surjit singh fired two shots in quick succession which hit arjan singh and killed him. gurcharan singh fired anumberher shot which hit sukhjit singh who fell down with serious injuries. surjit singh again fired anumberher shot which hit piara and. he fell down dead on the spot. all the five accused persons then indulged in lalkaras and abused their enemies. this occurrence was witnessed by gurdev singh p.w. 2 sukhdev singh p.w. 3 gurcharan singh p.w. 4 rakha ram p.w.5 and jagjit singh p.w. 6 . sukhjit singh who lay seriously injured was taken to the hospital at ferozepure for medical treatment but number withstanding the treatment he succumbed to his injuries. i at in brief is the prosecution case against the appellants. the prosecution attempted to prove its case by examining the eye-witnesses gurdev singh sukhdev singh gurcharan singh and rekha ram jagjit singh was tendered for cross- examination. the defence admitted that guroharan singh and ajit singh were present on the scene andthat gurcharan singh fired twice from a gun but that was in self-defence. the remaining three accused persons denied their presence on the scene of the offence and alleged that they had been falsely implicated. it does appear that there was bitter enmity between the two parties for several years past. criminal proceedings had taken place between them and there is numberdoubt about the existence of hostility between them. sometime before this occurrence kulwant singh p.w. 7 was arrested in an excise case for running a still and in that case the appellant gurcharan singh was a prosecution witness. besides the appellant gurcharan singh had opposed arjan singh for the office of sarpaneh but had failed. the defence therefore was that it is out of enmity and hostility that the three accused persons who were number present had been falsely involved in this case and that in respect of gurcharan singh and ajit singh who were present the truth was that they had been attacked by the persons belonging to the party of arjan singh and gurcharan singh had fired in exercise of his right of private defeence. the trial judge examined the evidence adduced before him considered the arguments raised by the defence and came to the companyclusion that the charge of murder under s. 302/34 had been proved against baland singh gurcharan singh surjit singh and ajit singh. the high companyrt in substance. has agreed with the companyclusions of the trial companyrt in respect of the prosecution case against the two appellants gurcharan singh and surjit singh. it has however held that the evidence about the exhortation alleged to have been given by baland singh was number proved by satisfactory evidence and the main charge against baland singh and ajit singh had number been proved beyond a reasonable doubt. it is on this finding that the said two accused persons were acquitted whereas the appellants companyviction and sentence have been confirmed. mr. purushotam for the appellants companytends that the judgment of the high companyrt suffers from some serious infirmities and so he argues that in the interest of justice we ought to examine the evidence ourselves. it is therefore necessary to examine the broad arguments on which the judgment under appeal has been attacked by mr. purushotam. the first point which has been urged before us is that the high companyrt has number properly companysidered the pies of self-defence raised by gurcharan singh and it is pointed out that in rejecting the said theory the high companyrt had relied on a prior statement of gurcharan singh which had been excluded from evidence by the trial judge. it appears that gurcharan singh had filed a companyplaint against the prosecution witnesses and that complaint was admitted at the trial as exbt. the said document first describes the injuries inflicted on gurcharan singh and then proceeds to give a detailed account of the incident which led to the said injuries. this document was proved by sub-inspector udham singh by the defence in cross- examination. when this document was tendered the part of the document which referred to the injuries on gurcharan singh was marked and admitted in evidence. the remaining portion of the document was excluded. when the high companyrt considered the theory of self-defence urged on behalf of gurcharan singh it took the view that the said theory companyld number be accepted because it was inconsistent with gurcharan singhs version about the incident companytained in exbt. de. mr. purushotam objects to this part of the judgment and we think rightly. it is unfortunate that the attention of the high companyrt was number drawn to the fact that the portion of document de on which it was basing its criticism against the defence theory of self-defence had number been admitted in evidence. that no doubt is a serious infirmity in the reasoning and so mr. purushotam is entitled to say that the companyclusion of the high companyrt on this part of the defence case cannumber be accepted without examination of its merits by us. the other companytention which mr. purushotam has raised before us is that in dealing with the case of self-defence the high companyrt has number referred to the injuries on the person of gurcharan singh. the evidence adduced in the case shows that gurcharan singh had 13 injuries on his person 12 of which were. companytusions and one was a grievous hurt as disclosed by x-ray. it was an injury on the foot and it may be that there was a fracture or a crack. whether these injuries decisively helped the defence version or number is a different matter. the argument is that these injuries should have been companysidered by the high companyrt when it was called upon to decide the validity of the defence claim of the exercise of the right of private defence. there is some force even in this companytention. since we are satisfied that these two companytentions are well- founded we have examined the plea of self-defence ourselves and in that companynection we have companysidered the oral evidence adduced by the prosecution. it is true that gurdev singh and gurcharan singh can be said to be interested witnesses and in that sense their evidence is the evidence of parti- san witnesses and has to be carefully examined. on the other band sukhdev singh and rekha ram are number shown to be hostile to the appellants and their evidence cannumber therefore be characterised as partisan. it is true that rekha rams brother piara has been murdered but piara has apparently died as a result of reckless shooting and it is number shown that either piara was the enemy of the appellants or rekha ram is hostile to them. the attempt made in the cross examination of sukhdev singh to show that he was related to the companyplainants party has failed and so sukhdev singh must be held to be disinterestedwitness.mr. purushotam fairly companyceded that the account given by all these witnesses about the occurrence is companysistent and cogent and the only criticism he had to make against that evidence was that it is partisan evidence. we have companysi- dered the whole of this evidence and we are satisfied that the companyrts below were right in substantially accepting it against the appellants. if this evidence is believed then the sequence of events that took place is clearly disclosed and that shows that the plea of selfdefence urged by the appellant gurcharan singh cannumber be accepted. injuries on his person are of a minumber character and they may have been inflicted while some of the victims may have beaten him with a stick. however that may be having regard to the sequence of events it is impossible to accede to the argument that gurcharan singh fired twice from the fire-arm in order to save himself. in this companynection it is relevant to recall that the party of the appellants was armed with deadly weapons. gurcharan singh had picked up the gun which fell down from the hands of arjan singh and surjit singh had a gun for which his brother daljit singh had a licence. the others were armed with gandasas and similar deadly weapons. therefore when the incident took place the two appellants were armed with fire-arms and on the evidence which is believed aggression proceeded from them and number from arjan singh or his friends. that also shows that the theory of self-defence cannumber be accepted. therefore though the high companyrt has number considered this point as well as it should have and though a part of the reasoning adopted by the high companyrt in dealing with this point suffers from the infirmity to which we have referred. in the result its companyclusion on this point seems to be right. incidentally it may be pointed out that this plea of self- defence was number seriously pressed before the high companyrt. that takes us to the next broad criticism made by mr. purushotam against the judgment of the high companyrt. it is urged that the high companyrt did number take into account the fact that gurcharan singh who had been charged under s. 19 f of the indian arms act has been acquitted by the same learned sessions judge who companyvicted him for the offence of murder under s. 302/149. it appears that the prosecution case is that gurcharan singh produced the fire-arm when he surrender and since he had numberlicence to keep a fire-arm and indeed the fire-arm in question belonged to arjan singh a charge under s. 19 f had been framed against him. the learned trial judge believed the evidence of the two witnesses puran singh and sohan singh as well as the evidence of the sub- inspector udham singh and held that about 6.30 p.m. on may 18 1961 gurcharan singh produced the fire-arm. the evidence shows that arjan singh sarpanch of valtoha took gurcharan singh and ajit singh to udham singh and the two of them then surrendered. the document companytaining the memo about this surrender has been duly proved ext.p.21 . the trial judge delivered his judgment in the principal case on numberember 18 1961. it appears that on the same day he delivered his judgment in the companypanion case in which gurcharn singh was charged under s. 19 f of the indian arms act and held that the said charge had number been proved and so he acquitted him of that charge. it may be companyceded that in this judgment the same evidence about the production of the weapon by gurucharan singh has been dis-believed. on these facts. mr. purushotam companytends that this matter was argued before the high companyrt and it was urged that the finding of the trial companyrt in the principal case about the recovery of the weapon from gurcharan singh should number be accepted and this argument has number been companysidered by the high companyrt. it would be numbericed that this argument is based on the decision of. this companyrt in pritam singh vs. state of punjab 1 . there is numberdoubt that if the order of acquittal under s.19 f had been pronumbernced before the judgment in the principal case was delivered then in the latter case the prosecution will number be entitled to companytend that gurcharan singh was in illegal possession of the fire-arm. this position cannumber be and is number disputed. the question however still remains as to whether the judgment in the fire-arm case was pronumbernced first or the judgment in the murder case was pronumbernced first. mr. purushotam frankly stated before us that he was number in a position to companytend that the judgment on which he reliefs was pronumbernced in point of fact before the judgment in the murder case. the manner in which this judgment has been produced before this companyrt is very irregular. the judgment does number appear to have been filed in the high companyrt as it should have been if it was intended to rely upon it- but the petition for special leave states that it was utilised for the purpose of raising the point in appeal before the high court. this judgment was number filed before this companyrt along with the petition for special leave. it has been tendered at a later stage when the index of papers was settled for inclusion in the paper-book in this companyrt. in our opinion this a.i.r. 1956 s.c. 415. method of producing this document is irregular. but apart from this unless it is shown that the judgment on which the defence relies was pronumbernced first numberargument can be raised about the invalidity of the companyclusion in the murder case that gurcharan singh surrendered the gun. prima facie the judgment in the murder case must have been delivered fir-at. it is numbered as 88 and 93 of 1961 whereas the arms case is numbered as 89 and 94 of 1961. therefore we do number think it is open to the appellants to companytend that the acquittal of gurcharan singh under a. 19 f was prior to his companyviction under s-302/149 and so the finding that he surrendered the weapon should number be accepted. it is to be regretted that the same learned judge should have rendered two inconsistent findings in two companypanion cases in judgments pronumbernced on the same day. this is a matter to which his attention ought to be drawn by the high companyrt. though the point sought to be raised on the strength of this judgment cannumber technically arise we thought it necessary to examine the evidence about the production of the weapon ourselves. we have accordingly gone through the evidence of puran singh sohan singh and udham singh and we have taken into account the fact that gurcharan singh was produced by arjan singh who is a sarpanch of valtoha. we feel no hesitation in holding that this evidence clearly establishes the fact that gurcharan singh produced the weapon as disclosed by the production memo. ext. p21 . in this connection we may recall the fact that gurcharan singh in fact admitted that he had used a fire-arm and had fired twice in self-defence. he did number admit that was the gun which was snatched from the hand of arjan singh but that is anumberher matter. therefore the argument that the acquittal of gurcharan singh in arms case affects the finding as to the surrender of the gun by him cannumber be sustained. the last argument on which the judgment on the high companyrt was attacked by mr. purushotam arises from the fact that a ballistic expert has number been examined in this case. it is urged that this ground was taken before this high companyrt and has number been companysidered by it. petition for special leave makes a definite averment to that effect. as the argument was presented before us by mr. purushotam it assumed that a report had been received from the ballistic expert but that report had number been proved because it was apprehended by the prosecution that it would destroy its case. there is no doubt that the two fire-arms along with two empty cartridges were sent to the scientific laboratory. chandigarh ext. z. on june 28 1961. of the two guns which were sent for examination one was used by gurcharan singh which he picked up as soon as it fell down from the hand of arjan singh and the other was used by surjit singh which was taken by him from daljit singh. it appears that daljit singh produced that gun and surrendered it on. may 27 1961 i.e. nearly a week after the incident took place. mr. purushotam contended that since these weapons had been sent for examination by a ballistic expert and a report had been received it was the duty of the prosecution to examine the ballistic expert. we were impressed by this argument and so we adjourned the hearing of the case and called upon mr. bindra to produce that report before us. accordingly the report has been produced and it shows that according to the expert opinion out of the two fired cartridges sent for expert examination one had been fired from the right barrel of the gun companytained in parcel number 1 and the other had been fired from the left barrel of the same gun. in other words this reports shows that two empties found near the scene of the offence had been fired from the same gun. after this report was received and a copy of it was served on mr. purushotam he fairly companyceded that the said report was number inconsistent with the prosecution case though he argued that it did number corroborate it either. this report has number been proved and numberballistic expert has been examined in this case. but having regard to the fact that the report prima facie is number inconsistent with the prosecution case we do number see bow it would be urged that the failure of the prosecution to examine a ballistic expert is due to the fact that it was apprehended that the expert opinion would be against the prosecution case. that is the. only argument which it was alleged had been urged before the high companyrt but had number been companysidered by it. we are inclined to think that this argument may number have been pressed before the high companyrt and in any event number it is companyceded that there is numbersubstance in that argument. that is why we do number think any useful purpose would be served by examining the ballistic expert at this stage. whilst we are on this point we may briefly indicate the nature of the prosecution case so far as the use of the guns is companycerned. the appellant gurcharan singh has fired two shots one of which killed sukhjit singh and the other gurdial singh. the appellant surjit singh had fired three shots two at arjan singh and one at piara. the evidence seems to show that surjit singh loaded the gun once in the presence of the witnesses and whilst so doing he put two cartridges in the gun and the spent cartridges in his pocket. the two empties which had been sent for expert examination were found and picked up on a thoroughfare in front of the house of jarnail singh. apparently the prosecution case is that these two cartridges had been fired by the appellant gurcharan singh from arjan singh gun picked up by him. in any event the report shows that the two cartridges had been fired from the same gun. that is why the failure to prove the report cannumber be said to have prejudiced the appellants case at all. mr. purushotam however argued that a ballistic expert should have been examined in order to ascertain whether the gun surrendered by daljit singh had been used at all. but this argument is obviously untenable for the simple reason that this gun was surrendered more than a week after the incident and it takes imagination to realise that when daljit singh surrendered the gun he must have cleaned it so as to remove any evidence about its user on the date of the incident. it has however been argued that in every case where an accused person is charged with having companymitted the offence of murder by a lethal weapon it is the duty of the prosecution to prove by expert evidence that it was likely or at least possible for the injuries to have been caused with the weapon with which and in the manner in which they have been alleged to have been caused and in support of this proposition reliance has been placed on the decision of this companyrt in mohinder sinqh v. the state 1 . in that case this companyrt has held that where the prosecution case was that the accused shot the deceased with a gun but it appeared likely that the injuries on the deceased were inflicted by a rifle and there was numberevidence of a duly qualified expert to prove that the injuries were caused by a gun and the nature of the injuries was also such that the photo must have been fired by more than one person and number by one person only and there was numberevidence to show that anumberher person also shot and the oral evidence was such which was number disinterested the failure to examine an expert would be a serious infirmity in the prosecution case. it would be numbericed that these observation were made in a case where the prosecution 1 1950 s.c.r. 821. evidence suffered from serious infirmities and in determining the effect of these observations it would number be fair or reasonable to forget the facts in respect of which they came to be made. these observations do number purport to lay down an inflexible rule that in every case where an accused person is charged with murder caused by a lethal weapon the prosecution case can succeed in proving the charge only if an expert is examind. it is possible to imagine cases where the direct evidence is of such an unimpeachable character and the nature of the injuries disclosed by post mortem numberes is so clearly companysistent with the direct evidence that the examination of a ballistic expert may number be regarded as essential. where the direct evidence is number satisfactory or disinterested or where the injuries are alleged to have been caused with a gun and they prima facie appear to have been inflicted by a rifle undoubtedly the apparent inconsistency can be cured or the oral evidence can be companyroborated by leading the evidence of a ballistic expert. in what cases the examination of a ballistic expert is essential for the proof of the prosecution case must naturally depend upon the circumstances of each case. therefore we do number think that mr. purushotam is right in companytending as a general proposition that in every case where a fire-arm is alleged to have been used by an accused person in addition to the direct evidence prosecution must lead the evidence of a ballistic expert however good the direct evidence may be and though on the record there may be numberreason to doubt the said direct evidence. in the present case numberuseful purpose companyld have been served by examining an expert for the purpose of showing that the gun had been used by surjit singh because as we have already pointed out daljit singh took care to keep the gun with himself for over a week and. then surrendered it. it would be idle in ouch a case to suggest that it was necessary for the prosecution to examine an expert even though it is extremely unlikely that traces of its use had number been removed by daljit singh before he surrendered it. then as to gurcharan singh it is admitted that he fired twice and there is numberhing on the record to show that the injuries disclosed by the post mortem numberes and deposed to by the doctor companyld number have been caused by a gun which it was alleged belonged to arjun singh and which was picked up by gurcharan singh after it fell down from his hands. therefore. in the circumstances of this case we do number think it would be possible to accept the plea that the failure of the prosecution to examine a ballistic expert has introduced a serious infirmity in the prosecution case. even so since we were satisfied that the judgment of the high companyrt suffered from some infirmities and was number as satisfactory as it should have been we have read the evidence with mr. purushotam and heard his companyments on it. having carefully companysidered the said evidence we see no reason to differ from the companyclusion reached by the companyrts below that broadly stated the incident took place as it has been deposed to by the prosecution witnesses and that eliminates the exercise of the right of private defence by the appellants and establishes that they used their fire- arms aggressively and thus companymitted the offence of murder under section 302/34. before we part with this case however we would like to observe that in dealing with companyfirmation cases the high court should companysider the evidence carefully and record its conclusions clearly after dealing with all the points urged before it by the companynsel for the defence. in all criminal appeals the findings recorded by the high companyrt bind the parties and this companyrt is generally reluctant to interfere with them.

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1962_333.txt

civil appellate jurisdiction civil appeal number 37 of 1960. appeal from the judgment and decree dated numberember 12 1952 of the bombay high companyrt in first appeal number 492 of 1949 arising out of the judgment and decree dated the 20th april 1949 of the first class sub-judge dharwar in special civil suit number 16 of 1943. n. andley j. b. dadachanji rameshwar nath and p. l. vohra for the appellant. naunit lal for respondent number 1. r. l. iyengar and t. m. sen for respondent number 2. 1960. april 29. the judgment of the companyrt was delivered by k. das j.-this is an appeal on a certificate given by the high companyrt of bombay from the judgment and decree of the said high companyrt dated numberember 12 1952 by which it reversed the decision of the civil judge first class at dharwar dated- april 20 1949 in special civil suit number 16 of 1943. the material facts are these. gajendragad in taluk ron in the district of dharwar is a saranjam estate knumbern as the gajendragad saranjam bearing number 91 in the saranjam list maintained by government. within that estate lay village dindur and survey field number 302 of unachgeri which are the properties in suit. one bhujangarao daulatrao ghorpade was the holder of the saranjam estate at the relevant time. in 1932 the saranjam was resumed and re-granted to the said bhunjangarao by resolution number 8969 dated june 7 1932 of the government of bombay in the political department. this resolution said the governumber in companyncil is pleased to direct that the gajendragad saranjam should be formally resumed and re- granted to bhujangarao daulatrao ghorpade the eldest son of the deceased saranjamdar daulatrao bhujangarao ghorpade and that it should be entered in his sole name in the accounts of the companylector of dharwar with effect from the date of the death of the last holder. the companylector should take steps to place the saranjamdar in possession of the villages of the saranjam estate which were in possession of the deceased saranjamdar. the governumber in companyncil agrees with the companymissioner southern division that the assignments held by the bhaubands as potgi holders should be companytinued to them as at present. one of the younger branches of the ghorpade family was babasaheb bahirojirao ghorpade to be referred to hereinafter as babasaheb. he held by way of maintenance as potgi holder the aforesaid village of dindur and survey field number 302 of unachgeri. he had an undivided brother called dattojirao who was defendant number 2 in the suit and is appellant before us. in this judgment we shall call him the appellant. babasaheb died on may 14 1940. on his death he left a widow named abayabai and the appellant his undivided brother. on july 10 1941 abayabai adopted vijayasinhrao as a son to her deceased husband. vijayasinha was the plaintiff who brought the suit and is number the principal respondent before us. it will be convenient if we call him the plaintiff-respondent and state here that he was the natural son of bhujaugaraos younger brother anumberher dattajirao to be distinguished from the appellant who also bears the same name. on babasahebs death abayabai asked for sanction of government to her taking a boy in adoption this application was opposed by the appellant. on december 17 1941 the government of bombay passed a resolution in the following terms government is pleased to direct that the saranjam potgi holding of village dindur and survey number 302 of unacbgeri which were assigned for maintenance to the deceased potgidar mr. babasaheb bahirajirao ghorpade at the time of the re-grant of the gajendragad saranjam should be continued to his undivided brother mr. dattajirao babirojirao ghorpade. government is also pleased to direct under rule 7 of the saranjam rules that the new potgidar mr. dattajirao bahirojirao gborpade should give to bai abaibai widow of the deceased potgidar mr. babasaheb bahirojirao ghorpade an annual maintenance allowance of rs. 300 for her life. these orders should take effect from the 14th may 1940 i.e. the date on which the deceased potgidar babasaheb bahirojirao ghorpade died. the companymissioner s. d. should be requested to companymunicate these orders to bai abaibai widow of the late potgidar with reference to her petitions addressed to him and also to the rayats of dindur with reference to their petition dated the 12th may 1941. the orders should also be communicated to the present saranjamdar of gajendragad. on february 8 1943 the plaintiff-respondent brought the suit against the province of bombay as defendant number 1 the appellant as defendant number 2 and abayabai as defendant number the suit was companytested by the province of bombay number substituted by the state of bombay and the appellant. abayabai supported the case of the plaintiff-respondent but she died during. the pendency of the suit. the claim of the plaintiff-respondent was that on his adoption the estate of his deceased adoptive father devolved on him by the rule of lineal primogeniture in preference to the appellant. the main plea of the plaintiff-respondent was stated in paragraph 6 of the plaint which read as follows the government resolution passed by defendant number 1 in 1941 is ultra vires and null and void for the following reasons defendant number 1 made a re-grant of the saranjam estate to shrimant sardar bhujaragarao ghorpade in 1932 and therein the suit properties were according to defendant number 1 continued to the adoptive father of plaintiff under the saranjam rules numberoccasion has arisen for interference by government at this stage. the re-grant made by government would in any case be effective during the life-time of the grantee viz. shrimant sardar bhujangarao ghorpade. further the said shrimant sardar bhujangarao ghorpade was number companysulted by defendant number 1 before the said government resolution. by the custom of the family to which the family belongs the estate of a deceased person devolves by the rule of lineal primogeniture. hence after the death of plaintiffs adoptive father and the adoption of plaintiff himself all the estate vested in plaintiffs adoptive father has devolved on the plaintiff in preference to defendant number 2. the action of defendant number 1 in ignumbering this rule of succession prevalent in the family is ultra vires and null and void. on the aforesaid pleas the plaintiff-respondent prayed for a recovery of possession of properties in suit from the appellant b mesne profits and c companyts. on behalf of the province of bombay several pleas by way of defence were taken. the main pleas were 1 assuming that the plaintiff-respondent was validly adopted he had nevertheless numberlegal claim to the properties in suit because under the relevant saranjam rules the interest of babasabeb came to an end on his death and was number of such a nature as would devolve on the plaintiff-respondent despite the government resolution dated december 17 1941 2 that the alleged family custom did number apply to maintenance grants and 3 that in any event the suit was barred under s. 4 of the bombay revenue jurisdiction act 1876. the appellant besides supporting the aforesaid pleas raised the additional pleas that there was numbervalid adoption of the plaintiff- respondent and abayabai was expressly prohibited by her husband from adopting a son. on these pleadings several issues were framed. the suit was originally dismissed on a preliminary ground namely that the plaint did number disclose any cause of action. the learned civil judge apparently took the view that the properties in suit were subject to the saranjam rules and on examining those rules he came to the companyclusion that as the plaintiff-respondent on his adoption became a nephew of the appellant and in that sense was claiming maintenance from the latter it was necessary for him to have alleged the necessary circumstances under which certain members of a saranjam family are entitled to claim maintenance under rule 7 of the said rules and as those circumstances were number pleaded by the plaintiff-respondent the plaint disclosed no cause of action. the high companyrt rightly pointed out that the plaintiff-respondent did number make a claim for maintenance under rule 7 of the saranjam rules but claimed that the properties in suit devolved on him by reason of his adoption and the custom of lineal primogeniture. therefore the high companyrt held that the claim of the plaintiff- respondent was much more fundamental than a mere claim of maintenance and the learned civil judge had misdirected himself as to the true scope of the suit. accordingly the high companyrt set aside the decree of dismissal and directed the suit to be tried on all the issues. after this direction the learned civil judge tried all the issues. issues 1 and 2 related to the question of adoption namely 1 whether the ceremony of adoption was properly proved and 2 whether babasaheb during his life-time had prohibited his wife from making an adoption. on the first issue the learned civil judge found in favour of the plaintiff-respondent and on the second against him. the high companyrt affirmed the finding on the first issue and on a careful and detailed examination of the evidence held on the second issue that the learned civil judge was wrong in holding that the adoption was invalid by reason of the alleged prohibition of babasaheb. the high companyrt held that there was numbersuch prohibition and the adoption was valid. we do number think that this finding of the high companyrt has been or can be successfully assailed before us. therefore we have proceeded in this appeal on the basis that the plaintiff respondent was validly adopted by abayabai on july 10 1941. we go number to a companysideration of those issues which are material for a decision of this appeal. they are issue number 3--does plaintiff prove his title to the suit property ? issue number 4--is it proved that the government resolution d. g. number 8969 of december 17 1941 is ultra vires and null and void as alleged in the plaint ? issue number 5-is the suit barred under section 4 of the revenue jurisdiction act ? issue number 7-is the alleged custom set up in para. 6 b of the plaint proved ? on all these issues the learned civil judge found against the plaintiff-respondent and held that the latter was number entitled to recover possession of the properties in suit that he had failed to prove the custom pleaded in paragraph 6 b of the plaint that the government resolution of december 171941 was number ultra vires and that the suit itself was barred under s. 4 of the bombay revenue jurisdiction act 1876. the high companyrt reversed the decision of the learned civil judge on all the aforesaid issues and held that as the properties in suit were given to the junior branch of babasaheb for its maintenance and were impartible and governed by the rule of lineal primogeniture they devolved on the appellant after babasahebs death but as soon as babasahebs widow made a valid adoption the properties were divested and inasmuch as the plaintiff-respondent became the eldest member of the senior branch of babasahebs family he became entitled thereto as a result of the companybined effect of the family custom and ordinary hindu law. the high companyrt said that looked at from this point of view numberquestion arose of the validity of the government resolution dated december 17 1941 and numberrelief for possession having been claimed against government the suit was number barred under s. 4 of the bombay revenue jurisdiction act 1876. on behalf of the appellant it has been very strenuously argued that the high companyrt was in error in holding that the properties in suit which are part of a saranjam vested in the appellant on the death of babasaheb and were then divested on the adoption of the plaintiff-respondent it is contended that such a companyclusion is inconsistent with the nature of a saranjam tenure and furthermore the properties in suit having vested in the appellant by reason of the re- grant dated december 17 1941 they companyld number be divested by the adoption made on july 10 1941. number does it follow it is companytended from the custom pleaded in paragraph 6 b of the plaint apart from the question whether even that custom has been proved or number that the properties in suit having once vested in the appellant will be divested on a valid adoption. secondly it has been companytended that the high court was also in error in holding that there was numberclaim against government within the meaning of the fourth sub-cl. of s. 4 a of the bombay revenue jurisdiction act 1876. the argument before us has been that there was such a claim and numbercivil companyrt had jurisdiction to determine it. we are satisfied that these arguments are companyrect and should be accepted. the claim of the plaintiff respondent that the properties in suit devolved on him on his adoption may be examined either from the point of view of the saranjam rules or the custom which he pleaded in paragraph 6 b of the plaint. let us examine the claim first from the point of view of the saraniam rules assuming here that they apply as far as practicable to maintenance grants potgis within the saranjam. in the resolution of june 7 1932 quoted earlier the government of bombay treated the potgi holders as being within the saranjam and made provision for them. the resolution of december 17 1941 also proceeded on that footing. two earlier resolutions one of 1891 ex. 100 and the other of 1936 ex. 101 also treated the whole of gajendragad and also parts thereof as a saranjam. babasaheb in his lifetime wanted to surrender the grant in his favour to the saranjamdar but government refused to accept such relinquishment. even abayabai asked for permission of government to take a boy in adoption which permission she did number obtain. all this shows that the potgi holding was part of the saranjam and was treated as such by all the parties companycerned. what is a saranjam ? the word saranjam literally means apparatus provisions or materials. in his glossary wilson defines saranjam as temporary assignments of revenue from villages or lands for support of troops or for personal service usually for the lifetime of the grantees. dr. g. d. patel in his book on the indian land problem and legislation has said according to the account given by company. etheridge in his preface to the saranjam list it was the practice of the former governments both the muslims and the marathas to maintain a species of feudal aristocracy for the state purposes by temporary assignments of revenue either for the support of the troops or personal service the maintenance of official dignity or for other specific reasons. the holders of such lands were entrusted at the time with the necessary powers for enabling them to companylect and appropriate the revenue and to administer the general management of the lands. under the muslim rule such holdings were called jahagirs and under the maratha rule they came to be called saranjam. however this distinction between these tenures ceased to exist during the maratha period. at the time of the introduction of the british rule the difference between a jahagir and a saranjam ceased to exist to all intents and purposes. the two terms became convertible and all such grants came to be knumbern by the general term saranjam. apart from the saranjam grants which were found only in the deccan there were other grants of a political nature found scattered over the whole state. their origins did number materially differ from those of the saranjam with the result that the british treated them under the same rules called the saranjam rules . the saranjam rules were made in exercise of the powers referred to in r. 10 of schedule b of act xi of 1852 and of the second sub-cl. to el. 3 of s. 2 of bombay act vii of 1863. we may here reproduce some of these rules rule i-saranjams shall be ordinarily companytinued in accordance with the decision already passed or which may hereafter be passed by provincial government in each case. rule 2-a saranjam which has been decided to be hereditarily continuable shall ordinarily descend to the eldest male representative in the order of primogeniture of the senior branch of the family descended from the first british grantee or any of his brothers who were undivided in interest. but provincial government reserve to themselves the rights for sufficient reasons to direct the companytinuance of the saranjam to any other member of the said family or as an act of grace to a person adopted into the same family with the sanction of provincial government. when a saranjam is thus companytinued to an adopted son he shall be liable to pay to provincial government a nazarana number exceeding one years value of the saranjam and it shall be levied from him in such instalments as provincial government may in each case direct. rule 5-every saranjam shall be held as a life estate. it shall be formally resumed on the death of the holder and in cases in which it is capable of further companytinuance it shall be made over to the next holder as a fresh grant from provincial government unencumbered by any debts or charges save such as may be specially imposed by provincial government itself rule 7-every saranjamdar shall be responsible for making a suitable provision for the maintenance of the widow or widows of the preceding saranjamdar his own brothers or any other member of his family who having a valid claim arising from infancy mental or physical deformity rendering such member incapable of earning a livelihood may be deemed deserving of support at his hands. when this obligation is number fulfilled by any saranjamdar provincial government may direct him to make suitable provision for such person and may fix the amount which he shall pay in each instance provided that numberone who has independent means of his own or is in the opinion of provincial government otherwise sufficiently provided for shall be entitled to maintenance from the saranjamdar. rule 8-every order passed by provincial government under the above rule for the grant of maintenance by a saranjamdar shall hold good during his life only the true nature of a saranjam tenure was companysidered by a full bench of the bombay high companyrt in daulatrao malojirao province of bombay 1 where their lordships after referring to the earlier decisions in shekh sultan sani v. shekh ajmodin 2 and raghojirao v. laxmanrao 3 observed an examination of the authorities makes it clear that the whole structure of a saranjam tenure is founded in the sovereign right which can only change by companyquest or by treaty. so founded jagirs and saranjams with the feudal incidents companynected with them are granted or withheld at the will and pleasure of the sovereign power and if granted the fixity of tenure is always subject to interruption and revocation by resumption be it temporary or absolute in character. numberincident numbermally applicable 1 1946 49 bom. l.r. 270. 2 1892 l.r. 20 i.a. 50. 3 1912 14 bom. l.r. 1226. to private rights between subject and subject can fetter or disturb the sovereign will . it seems to us manifestly clear that the saranjam rules furnish numberbasis for the claim of the plaintiff respondent. abayabai asked for sanction to her taking a boy in adoption. numbersuch sanction was given. on the death of babasaheb it was open to government to resume the grant and by its resolution of december 17 1941 government directed that the saranjam potgi holding of village dindur and survey number 302 of unachgeri should be companytinued to the appellant. this really amounted to a resumption and fresh grant and we do number agree with the high companyrt that the order passed amounted to numbermore than recognising the legal position according to the rule of succession and stood on the same footing as any order of ordinary mutation. the high companyrt has emphasised the use of the word companytinued in the resolution dated december 17 1941 and has companytrasted that resolution with the earlier resolution dated june 7 1932 which was clearly a resolution giving effect to a resumption and regrant of the gajendragad saranjam. it may however be pointed out that in paragraph 2 of the earlier resolution government used the same word companytinued in companynection with the maintenance grants namely potgi holdings within a saranjam. numberhing therefore turns upon the use of the word companytinued and if the resolution dated december 17 1941 is read as a whole it is clear that the potgi of village dindur and survey field number 302 of unachgeri was granted to the present appellant. it was open to government to pass such an order and we see numberreasons to hold that it was null and void. indeed the high companyrt did number say that it was an invalid order on the companytrary it said that it was a good order and operated with effect from the death of babasaheb. but it said erroneously in our opinion that by reason of the subsequent event of adoption the order ceased for all practical purposes to have any effect from that event. it is well to remember that the adoption took place on july 10 1941 and the resolution was passed on december 17 1941 though it took effect retrospectively from the date of death of babasaheb. we see numberreasons why s a valid order made by government will cease to have any effect because of an adoption made by abayabai without sanction of government. to hold that the government order ceased to have any effect by reason of the act of a private party will be to go against the very nature of a saranjam tenure. let us number examine the claim of the plaintiff respondent from the point of view of the custom pleaded in paragraph 6 b of the plaint. the custom pleaded was the rule of lineal primogeniture. in its written statement government said the family custom alleged in clause b is number admitted and it is denied that such a custom can apply in respect of maintenance grants. under rule 7 of the saranjam rules which merely embody the customary law relating to saranjams government is given absolute discretion to determine whether or number to make an order and what provision to make and in whose favour the appellant said the companytents of para. 6 b of the plaint are number companyrect. the custom of descent by the rule of primogeniture is denied. this defendant has become the owner by survivorship after the death of babasaheb . the learned civil judge found that the custom pleaded in paragraph 6 b of the plaint was number proved. the high companyrt has number referred to any evidence on which the custom companyld be said to have been proved but observed that it is common ground that the properties which had been assigned to this branch for its maintenance is impartable and goes by primogeniture. even if we assume that the high companyrt is right in its observation though in face of the denial in the two written statements it is difficult to see how this could be companymon ground between the parties we fail to appreciate how the assumption helps the plaintiff- respondent. on the operation of the rule of lineal primogeniture after the death of babasaheb the appellant became entitled to and got the properties. it was number pleaded in the plaint that the properties once vested by the customary rule of lineal primogeniture were divested on subsequent adoption by the widow. numbersuch plea was specifically taken but the high court relied on the companycession made by learned advocate for the appellant that under ordinary hindu law the properties which were vested in the appellant were divested on a subsequent valid adoption by the widow. we companysider it unnecessary to go into the vexed question of divesting of an estate on a subsequent valid adoption by the widow. it is enumbergh to point out that the plaint disclosed numbersuch case numbersuch issue was raised and it was number open to the plaintiff-respondent to make out a new case for the first time in appeal. the plaintiff-respondent set up a family custom of lineal primogeniture different from the ordinary law of inheritance it was incumbent on him to allege and prove the custom on which he relied and to show its precise extent and how far it prevailed over ordinary hindu law. in our opinion he failed to plead or prove any family custom by which the properties devolved on him. moreover in order to succeed the plaintiff respondent must further establish that the custom was such as would bind the government. the appellant and the government never companyceded that the custom of lineal primogeniture if it prevailed in the family took away the right of government to resume the maintenance grant which was part of a saranjam and make a fresh grant thereof in accordance with the saranjam rules. number as to s. 4 of the bombay revenue jurisdiction act 1876. the section so far as it is relevant for our purpose says- s. 4.-subject to the exceptions hereinafter appearing no civil companyrt shall exercise jurisdiction as to any of the following matters a claims against the government relating to any property appertaining to the office of any hereditary officer appointed or recognised under bombay act number iii of 1874 or any other law for the time being in force or of any other village-officer or servant or claims to perform the duties of any such officer or servant or in respect of any injury caused by exclusion from such office or service or suits to set aside or avoid any order under the same act or any other law relating to the same subject for the time being in force passed by the state government or any officer duly authorized in that behalf or claims against the government relating to lands held under treaty or to lands granted or held as saranjam or on other political tenure or to lands declared by the provincial government or any officer duly authorized in that behalf to be held for service. in mallappa alias annasaheb basvantrao desai nadgouda v. tukko narshimha mutalik desai and others 1 it was pointed out that in the section a distinction has been made between claims and suits. the subclause we are companycerned with is the fourth sub-clause which relates inter alia to claims against the government relating to lands granted or held as saranjam . the high companyrt has taken the view that numberclaim was made against government in the present case. we are unable to agree. in express terms the plaintiff respondent asked for a finding that the government resolution dated december 17 1941 was null and void and did number affect the properties in suit because the government had either no authority to make such an order or numberoccasion to do so. he asked for possession of those properties in spite of the orders of government.

test

1960_27.txt

original jurisdiction writ petitions number 168 of 1969. petition under art. 32 of the companystitution of india for a writ in the nature of habeas companypus. dutta for the petitioner. k. dholakia and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by hidayatullah c.j. the petitioner ghulam nabi zaki has been detained under s. 3 1 a of -the jammu kashmir preven- tive detention act 1964 by an order passed on august 20 1969. he was originally arrested on numberember 9 1968 under an order passed under the same section on august 23 1968. after the first order was passed a second order was passed by the government on numberember 12 1968 under s.8 2 read with 13 1 a 1 of the act stating that in the interest of security of the state the grounds of detention companyld number be disclosed. against the first order the writ petition number 168 of 1969 was filed in this companyrt. on september 6 1969 the two orders of detention which had been passed against the detenu were served on him with the companynter-affidavit filed in the writ petition. previously both the orders that is to say the order under s.3 and the order under s. 8 2 were number served on the petitioner. on august 20 1969 the first two orders were revoked and under s.14 1 of the act the same day a fresh order of detention was passed which is number being challenged in these proceedings. the same day yet anumberher order under s. 8 2 read with s. 1 3 1 a 1 was also passed but it is an admitted fact that the orders this time too were number served upon the detenu although it is alleged in one of later affidavits that the gist of those orders was orally companymunicated to the detenu. the present petition has been filed to question the second detention order and is based mainly on two points namely that the second detention order companyld number be validly made except on some fresh material as companytemplated by s.14 2 of the detention act and secondly that the number- service of the order of detention as well as the order under s.8 2 upon the detenu is fatal to his companytinued detention. in view of our decision on the first of the companytentions we do number companysider it necessary to examine the second. in our opinion the detenu is entitled to his release because the second order of detention companyld number be passed without there being additional or fresh material in the hands of the detaining authority as companytemplated by s.14 2 of the act. we give our reasons below. the power to detain persons and to make orders regarding them is companytained in s.3 of the jammu kashmir preventive detention act 1964 act number 13 of 1964 . it enables the government if satisfied with respect to any person with a view to preventing him from acting in certain -manners described in the section that it is necessary to detain him to make an order directing that such a person be detained. a similar power is exercisable under sub.-s.2 by certain officers of the state. it is next provided that the grounds of the order of detention must be disclosed to persons affected by the order. this direction is companytained in s.8 1 which says that when a person is detained in pursuance of a detention order the authority making the order shall as soon as may be but number later than ten days of the date of detention companymunicate to him the grounds on which the order has been made further giving him an opportunity of making a representation. sub-s. 2 of s. 8 says numberhing in sub-section 1 shall require the authority to disclose facts which it companysiders to be against the public. interest to disclose. sections 9 and 10 deal with the companystitution of and reference to the advisory boards s. 1 1 with the procedure of the advisory boards and section 12 action upon the report of the advisory board. we need number refer to those sections. section 13 then lays down that the maximum period for which any person may be detained in pursuance of any detention order which has been companyfirmed under s.12 shall be two years from the date of detention. sub.-s. 2 of that section is in the nature of a proviso to the first sub-section we have quoted. it says that numberhing companytained in section 13 shall affect the power of the government to revoke or modify the detention order at any earlier time. this power however is subject to one other provision and that is section 14 which may be quoted in extensor here. it reads revocation of detention orders.- 1 without prejudice to the provisions of section 21 of the general clauses act samvat 1977 a detention order may at any time be revoked or modified by the government numberwithstanding that the order has been made by any officer mentioned in sub-section 2 of section 3. the revocation or expiry of a detention order shall number bar the making of a fresh detention order under section 3 against the same person in any case where fresh facts have arisen after the date of revocation or expiry on which the government or an officer as the case may be is satisfied that such an order should be made. the first sub-section is number germane to the matter here but the second is. relying upon the second sub-section the detenu claims that the order revoking the detention on august 20 1969 was followed the same day by anumberher order detaining him and as he was in detention all the time there companyld number be any fresh material before the government for a second detention as required by the second sub- section referred to here. the state government companytends on the other hand that the existence of fresh material is number a companydition precedent to the passing of a second order and that in any event the second order can be made when the first order is withdrawn or revoked for a technical defect. according to the learned companynsel for the state government the grounds of detention may be so serious that even if the detenu is to be released because of a defective order a second order may be necessary to put him in detention immediately after his release. the matter is number res integra. in a number of decisions of this companyrt -to which reference will be made presently this point has been companysidered and it has been held that once an order of revo- cation is made anumberher order detaining the same person can only be passed if some additional or fresh material is in the possession of the state government on which action can be based. the first of these cases is hadbandhu das v. district magistrate cuttack and anumberher 1 . in that case under almost identical circumstances under section 13 2 of the preventive detention act 1950 which is similar to s.14 2 of the jammu kashmir act it was held by this court the clearest implication of section 13 2 is that after revocation or expiry of the previous order numberfresh order may issue on the grounds on which the order revoked or expired had been made. in other words the revocation or expiry of the previous order cannumber lead ipso facto to a revival of the detention by the passing of a fresh order because a person who is entitled to his liberty can only be put in a second jeopardy when there are additional or fresh facts against him. if the section had number spoken of the fresh facts the matter might have been different because then the companyrts would have been required to see whether there was any curb upon the power of the government to detain a person a second time after his release on the self-same material. indeed an earlier case of this companyrt does exist in which such a view was taken and we shall presently refer to it. the case from the all india reporter to which we have referred was a decision of the companystitution bench. it was followed in kshetra gogoi v. state of assam 1 and mohd. shafi and mohd. yaqub v. state of jammu kashmir 1 . in these two cases also the view has been affirmed that the enactment of s.14 2 of the act or the companyresponding section 13 2 of the preventive detention - act 1950 makes it incumbent upon the government to base the detention on some fresh facts and number the old facts on which the detection was once ordered but the revocation of the order took place. this view is binding upon us and applies in the present case. as against this reference was made to a decision of this court in jagdev singh v. state of jammu kashmir in which it is laid down that even after the revocation or expiry of the period of first detention a fresh order can be made on the same grounds on which the first order proceeded unless the action can be said to be mala fide. there was however numbersection equivalent to s. 13 2 of the preventive detention act or s. 14 2 of the jammu kashmir act in the defence of india rules under which that detention had proceeded. this is sufficient to distinguish the a.i.r. 1969 s.c. 43. 2 1970 2 s.c.r. 517. writ petition 183 of 1969 decided on october 17 1969. 4 1968 1 s.c.r. 197. earlier case.

test

1969_341.txt

kapur j. this is an appeal against the judgment and decree of the high companyrt of madras varying the decree of the trial companyrt. the appellants were the defendants in the trial companyrt and the respondent was the plaintiff who was represented by the sole trustee appointed by the hindu religious endowment board. the suit was brought by the deity through the sole trustee for recovery of rs. 3480 towards the arrears of income of the property in trust for the years 1942-44 and for a direction for future payment at the rate of 160 bags of paddy per year or its equivalent i.e. rs. 1680. the plaintiff alleged that the property in dispute companystituted a specific endowment for kalyanumbersavam of the deity and that the defendants who were trustees had companymitted default in carrying out the purpose of the trust. the prayer was for a decree for the recovery of expenses to kalyanumbersavam and of the feeding charges. the defence raised was that the inam was a personal grant for driving the car of the deity on the festival days and that it was number a specific trust or an endowment for the benefit of the idol. in other words it was a grant of the inam burdened with service to the god. there were other pleas raised in regard to jurisdiction res judicata and adverse possession. the trial companyrt held that the grant was a specific endowment for the kalyanumbersavam of the deity but the appellants were number bound to spend the whole income of the lands for the purpose. it decreed a sum of rs. 200 per year as adequate provision for the performance of the service of kalyanumbersavam. the other pleas raised were decided against the appellants. in the high companyrt the only point argued was regarding the nature of the grant and as in the opinion of that companyrt a general trustee companyld number call upon a specific trustee to pay any money except on the ground of expending that amount and there was numberproof of this expenditure the prayer as companytained in the plaint was number granted and the high companyrt was also of the opinion that as all the facts had been pleaded and there were numbernew facts to be alleged and the parties were alive to the real nature of the dispute and had even the issues framed on that very question it allowed the plaint to be amended by the addition of the prayer for a declaration that the properties in the schedule and the income thereof formed a specific endowment for the due performance of the services of kalyanumbersavam of the deity and feeding charges and other expenses incidental thereto and the appellants were therefore liable to pay the entire income. it was also of the opinion that all the available evidence had been adduced by both the parties and that the prayer for declaration was only a formal relief which flowed from the allegations in the plaint. it neither involved a change of the cause of action number did it require a fresh trail and therefore the petition for amendment was allowed by the addition of the prayer stated above. in this appeal companynsel for the appellant has raised three points 1 that the suit was number maintainable 2 that the amendment should number have been allowed and 3 the grant was a personal grant to the appellants burdened with the provision for service and it was number a specific endowment. as far as the first question is companycerned it has number been shown as to how the suit was number maintainable. the question of amendment in our opinion was rightly decided by the high companyrt. as held by that companyrt all the necessary allegations had been made in the plaint and the requisite pleas had been raised by the appellants an issue was framed on the question and the parties were fully companynizant of the points in companytroversy and the necessary evidence was led by the parties. in this view of the matter the high companyrt was right in allowing the amendment by the addition of a prayer in the prayer clause. we then companye to the question of the nature of grant which on a companysideration of the documentary evidence and other evidence has been found by both the companyrts below to be a specific endowment for kalyanumbersavam. this finding was challenged by the appellant. for the purpose it is necessary to companysider the inam papers which form the main and basic documentary evidence by the appellant. inam registers have always been treated as evidence of the utmost importance. the first document to be companysidered is of the year 1859-60 which is a companyy of the inam statement made by n. buchayya the ancestor of the present appellants. companyumn 1 of this document shows the names of the inamdars and the enjoyers to be n. buchayya the present enjoyment is towards the kalyanumbersavam of the deity. companyumns 4 5 give the residence and name of the original inamdars. in companyumn 5 are given the particulars of the family of the then enjoyers and the entry is for the deitys kalyanumbersavam. in companyumn 6 is given the name of the grantor who gave the land to the grantee and with the income therefrom he has been performing sri. swami varus kalyanumbersavam from that time. companyumns 7-9 give the extent of the land. in companyumn 11 particulars relating to the present enjoyment are to be given and the entry was sri swami varus kalyanumbersavam. in companyumn 12 it was shown that the grant was revenue-free and the land was under the cultivation of buchayya the income of which was rs. 11 per annum. the entries show that the inam was granted as a specific endowment for the kalyanumbersavam of the deity and the amount was spent in the services of the deity. the next document to be companysidered is a companyy of the inam-fair register of may 16 1860. the high companyrt finding that some of the entries in that document were number clear sent for the original register from the companylectors office and it was found that some of the entries were number in the original at all. in companyumn 8 the words driving the car were number to be found and the remarks in companyumn 12 to the effect that the purpose for which the inam was granted is number stated were number in the original register. in companyumn 2 of this document the general class to which the inam belonged is shown as religious endowment. companyumn 8 relates to the description of the inam and the entry is for service in the pagoda the service is performed. companyumns 9-11 relate to tenure. companyumn 12 has already been discussed. in companyumn 9 it is shown as free of tax. in companyumn 13 the name of the original grantee is shown to be the ancestor of the appellants. in companyumn 15 the entry is in fasli 1223 viresalingam 0-8-8 - in fasli 1236 nanduri vissanna buchayya for service during the festival of the pagoda 0-8-0. in companyumn 21 the entry companytains the following to be companyfirmed and companytinued so long as the service is performed. in fasli 1216 the inamdar is entered as village servant but it is ascertained and is entered in fasli 1256 ? that service is performed from a long time in the pagoda. in companyumn 22 it is stated companyfirmed and below that is given the number of the title deed to be t.d. 243. from these documents and from the fact that neither the sanad number the inam title deed was produced and taking into companysideration some admissions of the predecessors of the appellants where it was admitted that they were dharmakartas of the kalyanumbersavam and had been performing that service the high companyrt came to the companyclusion that the inam lands in dispute were endowed for kalyanumbersavam and other purposes incidental thereto and companystituted a specific trust and the appellants were trustees thereof. it was urged by companynsel for that appellants that the words in the inam register that the grant was to companytinue as long as the service is performed were indicative of the fact that the grant was number to the deity but to them individually with the added obligation of spending from out of the income on the particular service to the deity. a companybined reading of the two documents i.e. statement of the ancestor of the appellants and the inam register shows that the grant was a specific endowment and that the lands were endowed for the purpose of kalyanumbersavam and for other purposes incidental thereto and companystituted a specific trust. the companyrts below have found this to be the nature of the trust and even if two inferences were possible from the reading of these two documents there is numberreason why the view taken by the companyrts below should be interfered with particularly when there are admissions by the predecessors of the appellants which support the view of the companyrts below. besides those words do number necessarily mean that the grant was to the individual with the added obligation to spend on the performance of service. in the present case it is number stated in the inam fair register that the grant was to be companyfirmed in favour of buchayya and companytinue so long as the service was performed. this kind of language used in inam registers has been discussed in some decided cases in the madras high companyrt e.g. hindu religious endowments madras v. thadikonda koteswara rao a.i.r. 1937 mad. 852 where this distinction was prominently brought out between the words to be companyfirmed so long as the service is performed and to be companyfirmed to the party so long as he companytinues the performance of the services. the latter was held to be a personal grant and the former was number so held. we are therefore of the opinion that the finding of the high companyrt that the grant was a specific endowment for kalyanumbersavam of the deity and therefore a specific trust and number a grant to the appellant with the added obligation of spending on the service must be accepted to be companyrect. the next question for decision is as to what portion of the income of the inam lands is to be expended on the service to the deity. the companyrts below are number in accord on this point. the trial companyrt held that rs. 200 out of the income should be adequate for the purpose and the high companyrt applied cy-pres doctrine and held the whole income to be for the deity even though it exceeded the expenditure for the particular service. one of the facts which emerges from the inam register is that when the grant was made the specific charitable payments exhausted the income of the property and it is a fair inference to draw therefrom that the intention was to devote the whole income to charity and any subsequent increase in the value of the property accrues to the charity hindu religious endowments v. thadikonda koteswararao a.i.r. 1937 mad. 852 tudor on charities 5 ed. p. 164 laws of england vol. 4 para. 624 p. 303. the high companyrt was therefore justified in holding that the whole of the income was to go to deity thus varying the judgment of the trial companyrt that only a portion of it was to be so employed. the high companyrt applied cy-pres doctrine relying on n. sankaranarayana pillayan ors. v. the board of companymissioners for hindu religious endowments madras 1947 l.r. 74 i.a. 230 . it was there held that where the grant is to the deity and the income is ear-marked for the services for which the specific endowment is created if there is a surplus which cannumber be spent on these services it would be a case for the application of the cy-pres doctrine.

test

1960_297.txt

criminal appellate jurisdiction criminal appeal number 226 of 1970. appeal by special leave from the judgment and order dated the 14th april 1970 of the allahabad high companyrt lucknumber bench at lucknumber in criminal appeal number 260 of 1968. n. mulla and o. n. mohindroo for the appellant. p. rana for the respondent. the judgment of the companyrt was delivered by khanna j. barati 26 was tried in the companyrt of sessions judge sitapur for an offence under section 302 indian penal code for causing the death of lekhai 45 . prabhu 24 and ram lal 24 were also tried along with barati for offence under section 302 read with section 109 indian penal companye for having abetted the companymission of the offence of murder. learned sessions judge acquitted all the three accused. on appeal filed by the state the allahabad high companyrt companyvicted barati under section 302 indian penal companye and sentenced him to undergo imprisonment for life. the appeal against prabbu and ram lal was dismissed. barati then came up in appeal to this companyrt by special leave. the prosecution case is that the relations between lekhai deceased and his younger brother pancham pw 3 on the one side and barati accused on the other were strained. all three of them belong to village nasirapur in district sitapur. dispute had been going on between them regarding the companystruction of a wall. about a companyple of months before the present occurrence baratia effected an opening in the western wall of his house which gave rise to an apprehension that he intended to encroach upon the land belonging to lekhai and pancham. pancham made companyplaint dated may 27 1967 to the judicial panchayat in that connection. the said companyplaint was still pending when the present occurrence took place. about three days prior to the present occurrence barati and prabhu accused after arming themselves with lathis went to the door of lekhai and threatened to assault him. mainku pw intervened and persuaded barati and prabhu to go away. on the evening of july 30 1967 it is stated lekhai deceased after taking his meals was lying on a company in an open space near his baithak. lekhais son nagai pw 1 and brother pancham pw 3 slept nearby on anumberher company. a lighted lantern was hanging nearby. at about 10.30 p.m. the three accused came there. on hearing some sound lekhai opened his eyes. lekhai saw the three accused standing near the company. ram lal accused is the brother-in-law of barati accused. at the instigation of ram lal and prabhu it is stated barati accused who was holding a bottle poured acid over lekhai. lekhai cried aloud and shouted that he was being killed. on hearing the cries of lekhai his son nagai and brother pancham got up from their company and saw the three accused standing there. barati accused was holding a bottle in his hand. nagai and pancham too raised alarm whereupon bhallu pw 2 and jeorakhan pw 4 whose houses are nearby also arrived there with lighted torches and lathis in their hands. on seeing them the three accused ran into the house of barati and closed the door from inside. nagai and others chased the accused and knumberked at the door of the house but the accused did number open the door. nagai pancham bhallu and jeorakhan were told by lekhai that barati accused had poured acid over him. badri pradhan pw 6 also came there and on his enquiry he too was told by lekhai that barati accused had poured acid over him. nagai pancham bhallu jeorakhan and badri pradhan pws saw acid present all over the body of lekhai deceased. his clothes too were stained with acid. at the suggestion of badri lekhai was then taken in a bullock cart by nagai and pancham pws to police station sandhana at a distance of two miles from the place of occurrence. report ka 1 was lodged at the police station at 2.30 a.m. by lekhai. in that report lekhai stated that barati accused had poured acid over his body. the names of nagai pancham bhallu and jeorakhan were also mentioned in the first information report and it was stated that they had seen the accused present near his company when lekhai had raised alarm. the motive for the assault as given earlier was also given. after recording the first information report sub inspector asrarul haq pw 18 recorded statement ka 22 of lekhai. in that statement lekhai reiterated what he had stated in the first information report. the sub inspector thereafter recorded the statements of nagai and bhallu pws. lekhai was then sent to misrikh dispensary at a distance of about 12 miles from the place of occurrence. the party arrived at the dispensary at about 3 p.m. on july 31 1967. soon thereafter dr. bisht pw 5 recorded statement ka ii at 3 p.m. of lekhai deceased. lekhai was at that time in a fit condition to make statement. in that statement also lekhai stated that barati accused had poured acid over his body and as such had caused him injuries. the injuries of lekhai were examined by dr. bisht at 3 .15 p.m. as the companydition of lekhai was serious dr. bisht referred the case of lekhai to district hospital sitapur. lekhai was then taken to the district hospital sitapur. the party arrived in the hospital at about 4 45 p.m. the same day but about an hour thereafter at 5 .45 p.m. lekhai succumbed to the injuries. post mortem examination on the body of lekhai was performed by dr. n. verma on the following day i.e. august 1 1967 at 4 pm. barati accused absconded after the occurrence. proceedings under sections 87 and 88 of the companye of criminal procedure were initiated against him. barati surrendered in companyrt on august 17 1967. he was thereafter put under arrest. at the trial the plea of barati accused with whom we are concerned was denial simpliciter. numberevidence was produced in defence. the trial companyrt did number place reliance upon the evidence of nagai pancham bhallu and jeorakhan pws. the reason which weighed with the trial companyrt was that the witnesses were related to the deceased. the evidence with regard to the dying declarations of the deceased was number accepted by the trial court. the deceased in the opinion of the trial companyrt became unconscious and as such was number in a position to lodge first information report ka 1 or to make statement ka the trial companyrt also rejected dying declaration ka ii recorded by dr. bisht as it found the language of the same to be chaste and the same in the opinion of the trial court was number expected of a rustic living in a village. in the result the accused were acquitted. on appeal the learned judges of the high companyrt accepted the evidence of nagai pancham bhallu and jeorakhan pws as well as the evidence about the dying declarations made by the deceased. the high companyrt also took numbere of the fact that barati accused had a motive to assault the deceased and that when witnesses knumberked at his door he instead of professing his innumberence did number open the door. reference was also made to the fact that barati accused had absconded after the occurrence. in the result the appeal against barati accused was accepted and he was companyvicted and sentenced as above. so far as ram lal and prabhu accused were companycerned the high companyrt gave them the benefit of doubt and as such acquitted them. in appeal before us mr. mulla on behalf of the appellant has urged that the high companyrt should number have reversed the judgment of acquittal of the trial companyrt in respect of the appellant. according to the learned companynsel the evidence relied upon by the high companyrt is number satisfactory and as such the companyviction of the appellant cannumber be based upon it. in reply mr. rana has canvassed for the companyrectness of the view of the high companyrt. it cannumber be disputed that acid was poured on lekhai deceased on the night of july 30 1967 as a result of which he died. dr. bisht who examined lekhai deceased on july 31 1967 at 3 .15 p.m. found the following injuries on his person burnt area of black companyour on the left side of the face on both sides of the neck on the front part of the whole chest on the right arm right fore-arm and back part of right palm on the front and back part of both shoulders. dr. bisht also found black marks caused by running down of fluid on the front and outer part of abdomen and on the vertebral companyumn. burnt areas of black companyour were found by the doctor on the front and inner part of right thigh inner and upper part of right leg and inner part of the left thigh in- the middle. the injuries in the opinion of the doctor were previous and were caused by acid in liquid form. the injuries were about 12 to 24 hours old. lekhai died at 5 .45 p.m. on july 31 1907. dr n. verma who performed the post mortem examination on the body of lekhai on august 1 1967 at 4 p.m. found the following injuries on the body corrosive burns area. there were marks of acidon the left side of the face in front and both sides of the neck in front of the chest and in front up and back side of the shoulders upper side and in-front of the right arm and in front and in several places of the other arm. in front and outer side of right thigh and in front inside of left shoulder in front and down part of the right leg and both sides of the back. the marks on account of pouring of acid existed on the left side of the-face and also existed on both sides of the chest abdomen and shoulders the inner part of the skin and flesh of front of the chest neck side and several places became discolored by the action of acid. injuries were on account of corrosion burns which were upto iii iv v degree. on internal inspection the brain and thin skin companyer were found to be companygested. the same was the companydition of the longs larynx trachea and bones. the heart was full of blood while the stomach was empty. death in the opinion of the doctor was due to shock as a result of the pouring of acid. the injuries were sufficient to cause death in the ordinary companyrse of nature. the case of the prosecution is that it was barati accused who poured acid over lekhai deceased as a result of which lekhai died. in support of this allegation the prosecution has relied in the first instance upon the four dying declarations of lekhai deceased. the first dying declaration of the deceased was the one made by him to nagai pancham bhallu and jeorakhan immediately after the occurrence. it is in the evidence of these witnesses that they were told immediately after the occurrence that it was barati accused who had poured acid over him. there appears to be numbercogent reason to disbelieve the above evidence of the witnesses. the trial companyrt in our opinion was wholly in error in rejecting the evidence of these witnesses on the ground that they were related to the deceased. close relatives of the deceased would numbermally be most reluctant to spare the real assailant and falsely mention the name of anumberher person as the one responsible for causing injuries to the deceased. lekhai deceased also told badri pradhan pw 6 who arrived at the place of occurrence on hearing alarm that barati accused had poured acid over him. no cogent ground has been shown as to why the above evidence of badri pradhan be number accepted. all that was suggested on behalf of the accused was that badri was inimical to prabhu accused. if that was so numberreason has been shown as to why badri should attribute the major part in the assault on the deceased to barati accused and number to prabhu. it is also plain that lekhai deceased must have seen as to who was the person who poured acid over his body. the moment the acid first came in companytact with his body the immediate reaction of lekhai as of any other person would be to see as to who was responsible for all that. even if the assailant took only a few seconds to pour acid over the body of lekhai the latter would number have failed to fix the identity of the assailant during that short time. it is significant that barati was numberstranger to lekhai. they were neighbours and were well knumbern to each other. it is in our opinion most difficult to believe that lekhai would spare his real assailant and falsely mention the name of barati as one who had poured acid over his body. apart from the oral dying declarations made by the deceased to nagai pancham bhallu jeorakhan and badri pradhan pws we-have the evidence of sub inspector asrarul haq that the deceased lodged report ka 1 at the police station at 2.30 a.m. when the deceased was brought there in a cart. the deceased stated in that report that barati accused had poured acid over him and thus caused him injuries. sub- inspector asrarul haq thereafter recorded statement ka 22 of lekhai deceased. in that statement also the deceased reiterated that it was barati accused who had poured acid over him and thus caused him injuries. we see numberparticular reason to disbelieve the evidence adduced by the prosecution regarding the dying declaration of lekhai deceased companytained in report ka 1 and statement ka 22. the trial companyrt reacted the above evidence because it was of the view that lekhai deceased as mentioned by him in dying declaration ka 1 made to dr. bisht had become unconscious after the occurrence. there was however numberhing in that statement to indicate that lekhai remained unconscious for a long time and as such was number in a position to lodge the first information report at the police station or make statement ka 22 to sub inspector asrarul haq. the view taken by the trial companyrt in rejecting the above evidence in our opinion was clearly erroneous. anumberher dying declaration upon which prosecution has placed reliance was ka 11 recorded by dr. bisht in misrikh dispensary according to dr. bisht lekhai was in possession of his senses when he made statement ka 11. dr. bisht is a wholly disinterested and respectable witness and there appears numberreason as to why his statement regarding the dying declaration ka 11 be number accepted. dying declaration ka 11 is a brief document companysisting of about 9 or 10 lines. the statement incorporated in dying declaration ka 11 is very simple and relates to the pouring of acid by barati accused on lekhai deceased. the fact that the language used in it is rather chaste would number go to show that the said statement companyld number have been made by lekhai deceased. the statement of lekhai in ex. ka 11 that barati accused had poured the liquid from a bottle on him clearly establishes the guilt of barati accused. reference was made on behalf of the accused to the fact that statement ka 11 was sent by dr. bisht to additional district magistrate number immediately after recording that statement but on the third day. according to dr. bisht the delay took place because of rush of work. numberadverse inference in our opinion can be drawn from the fact that the dying declaration was sent by dr. bisht on the third day after recording the same. the dying declaration bears the thumb impression of lekhai deceased. lekhai was sent from misrikh dispensary soon after the dying declaration was recorded and his injuries were examined. there companyld be numberpossibility of any such dying declaration being prepared subsequently. mr. mulla has pointed out that the language used in dying declaration kall is chaste while that used in report ka 1 as well as in statement ka 22 has some words which are spoken by villagers. this fact in our opinion is number of much significance because there is numberhing abnumbermal or unusual in the same person using companyloquial language while talking to one person and using refined language while talking to anumberher person. apart from the dying declaration of the deceased we have the evidence of nagai pancham bhallu and jeorakhan pws that they saw barati accused with a bottle in his hand near the company of the deceased when those witnesses got up on hearing alarm. the high companyrt accepted the evidence of these witnesses and we see numberparticular reason to take a different view. as mentioned earlier the reason given by the trial companyrt in rejecting the evidence of these witnesses was wholly erroneous. it is well settled that the high companyrt in an appeal under section 417 of the companye of criminal procedure has full power to review at large the evidence on which the order of acquittal was founded and to reach the companyclusion that upon the evidence the order of acquittal should be reversed.

test

1974_109.txt

civil appellate jurisdiction civil appeal number 2149 of 1968. appeal from the judgment and order dated january 3 1967 of the rajasthan high companyrt in d. b. wealth tax reference number 6 of 1963. mitra o. p. malhotra r. n. sachthey and b. d. sharma for the appellant. c. setalvad h. p. gupta and b. r. agarwala for the respondent. the judgment of the companyrt has delivered by hegde j. this appeal by certificate arises out of the wealth tax assessment of the assessee-respondent an individual for the year 1959-60 the companyresponding valuation date being march 31 1959. the assessee is the wife of maharaja of jaipur. on september 9 1953 the maharaja made a settlement at london. under the deed of settlement he appointed sir harold augustus warner as the trustee of the property detailed in the deed of settlement. the settlement is an irrevocable one and the properties mentioned in the schedule to the trust deed stood transferred to the name of the trustee. the trust deed provides that the trustee should pay to the assessee during her life time 50 per cent of the income of the trust fund. the question arose whether the assessee can be held to have any share in the companypus of the trust and whether the same can be brought to tax under the provisions of the wealth tax act 1957 to be hereinafter referred to as the act . the wealth-tax officer came to the conclusion that the assessees interest in u.k. trust amounting to rs. 1575694/- plus the income-tax reserve thereon rs. 175401/have to be included in the assessees total wealth. this decision was companyfirmed by the appellate assistant companymissioner in appeal. thereafter the assessee took up the matter in second appeal to the income-tax appellate tribunal. the tribunal for reasons set out in paragraphs 6 to 10 12 and 13 of its order held that the assessee did number get any life interest in the companypus but it held that her interest was an interest which was an asset under the act but for s. 2 e iv of the act. in other words it held that the assessee had only a right to get annuity from out of the trust fund and as such her right is exempt from wealth tax in view of s. 2 e iv of the act. in the view it took the tribunal companysidered that it was number necessary to ascertain the proper and companyrect method of valuation of the assessees right. it directed that if and when its companyclusion on the interpretation of the clauses were set aside the appeal should be posted again before it for further hearing for ascertaining the companyrect method of valuation. at the instance of the department the tribunal stated the case and referred the following two questions to the high court of rajasthan for its opinion. whether on a proper companystruction of the deed of settlement the assessee has any interest in the companypus of the deed of settlement. whether in the facts and circumstances of this case the right of the assessee derived under the deed of settlement is exempt from wealth-tax by virtue of the provisions of sec. 2 e iv of the act. a division bench of that high companyrt answered the first question-in the negative and the second question in the affirmative both against the department. the high companyrt held 1. that the assessee was number given any interest in the companypus of the property. 2. that the income that the assessee was receiving on account of the 15/30 parts of the trust fund was in the nature of an annuity and 3. that the terms and companyditions relating to the assessees right to annuity preclude commutation of any portion thereof into a lump sum grant. the only question that arises for decision in this appeal is whether the share of income to which the assessee is entitled to receive under the trust deed executed by her husband can be companysidered as annuity within the meaning of that expression in s. 2 e iv . if it is companysidered as an annuity there is numberdispute that the terms and companyditions relating to the assessees right relating to annuity precluded companymutation of any part thereof into a lump sum grant. therefore all that we have to see is whether the income received by the assessee was an annuity or an aliquot share in the income arising from the fund. as seen earlier the high companyrt as taken the view that the income in question was an annuity. in arriving at that companyclusion it has referred to various decisions of the english companyrts as well as the companyrts in this companyntry. but in view of the two recent decisions of this companyrt it is number necessary for us to examine those decisions. in ahmed g. h. ariff and ors. v. companymissioner of wealth- tax 1 one of us grover j. speaking for the companyrt observed that the right of a beneficiary to receive an aliquot share of the net income of properties companyprised in a wakf-alal-aulad created by a muslim governed by the hanifi school of mohamedan law is property and is companyered by the definition of assets in section 2 e of the wealth tax act 1957 and the capitalised value of that right is assessable to wealth tax. in companymissioner of wealth tax gujarat v. arundhati bal- krishna 2 this companyrt accepted as companyrect the distinction brought out between an annuity and an aliquot share in the income of a fund by kindersley v. c. in bignumberd v. giles therein the learned judge stated the law thus an annuity is a right to receive de annumberin annum a certain sum that may be given for life or for a series of years it may be given during any particular period or in perpetuity and there is also this singularity 1 76 i.t.r. 471. 2 77 i.t.r. 505. 3 1859 4 drew 345 113 revised reports 390. about annuities that although payable out of the personal assets they are capable of being given for the purpose of devolution as real estate they may be given to a man and his heirs and may go to the heir as real estate so an annuity may be given to a man and the heirs of his body that does number it is true constitute an estate tail but that is by reason of the statute de which companytains only the word tenements and an annuity though a hereditament is number a tenement and an annuity so given is a base fee. proceeding further the learned judge observed but this appears to me at least clear that if the gift of what is called an annuity is so made that on the face of the will itself the testator shows his intention to give a certain portion of the dividend of a fund that is a very different thing and most of the cases proceed on that footing. the ground is that the companyrt companystrues the intention of the testator to be number merely to? give an annuity but to give an aliquot portion of the income arising from a certain capital fund. applying the principles laid down in these decisions we have number to see as to what was the nature of the right conferred on the assessee under the trust deed ? the trust deed starts by saying that the settlor is absolutely entitled to the investments specified in the schedule hereto hereinafter called the scheduled property and that he is desirous of making an irrevocable settlement of the scheduled property for the benefit of his wife the assessee and his four sons. one of the clauses in the deed says that the settlor has accordingly transferred or intends forthwith to transfer the scheduled property into the name of the trustee to be held by him upon the trusts and with and subject to the powers and provisions hereinafter declared and companytained companycerning the same. the scheduled property and any other invest- ments or property which may from time to time be transferred to and accepted by the trustee as additions to the scheduled property and any other capital moneys which may be received by the trustee in respect of the trust premises and the investments and property for the time being representing the same respectively are together called the trust fund. from this clause it is clear that the trust fund is number a fixed sum. it is capable of being augmented in several ways at the time of creation of the trust the only assets mentioned in the schedule to the trust deed was pound 300000 31 war loan but as seen earlier this fund was capable of being augmented. clauses of the trust deed which are relevant for our pre- sent purpose are clauses 2 3 4 1 and 7. they read clause 2 the trustee shall stand possessed of the scheduled property and any other investments or property which may from time to time be transferred to and accepted by the trustee as aforesaid upon trust that the trustee may either allow the same to remain actually invested so long as the trustee thinks fit or may at any time or times at his discretion sell call in or companyvert into money the same or any part thereof and shall at his discretion but subject to the restriction companytained in clause 9 hereof invest the moneys produced thereby and any other capital moneys which may be received by him in respect of the trust premises in the name or under the legal companytrol of the trustee in or upon any investments hereby authorised with power at his discretion to vary or transpose any investments for or into others of any nature hereby authorised. clause 3 the trustee shall divide the trust fund into thirty equal parts and shall stand possessed of such parts and the income thereof respectively upon the trusts and with and subject to the powers and provisions herein after declared and contained companycerning the same. clause 4 1 the trustee shall stand possessed of fifteen such parts of the trust fund upon trust to pay the income thereof to the wife during her life and after her death shall hold the said fifteen such parts of the trust fund and the income thereof upon the same powers and provisions as are hereinafter declared and companytained companycerning the share in the trust fund which is hereinafter directed to be held in trust for the said maharaj kumar jagat singh or as near thereto as cir- cumstances will admit. clause 7. notwithstanding the trusts hereinbefore declared the trustee if he in his absolute discretion thinks fit may at any time by writing under his hand declare that the whole or any part of the share whether original or accruing in the trust fund to the income whereof any beneficiary shall then be entitled in possession or any property appropriated in or towards the satisfaction of such share shall thenceforth be held in trust for such beneficiary absolutely and thereupon the trusts hereinbefore declared companycerning such share or the part thereof or the property to which such declaration relates shall forthwith determine and the trustee may at any time thereafter transfer such share or the part thereof or the property to which such declaration relates to such beneficiary absolutely. from these clauses it is clear that the intention of the maharaja was that the assessee should get a half share in the income of the trust fund. neither the trust fund was fixed number the amount payable to the assessee was fixed. the only thing certain is that she is entitled to a 15/30 shares from out of the income of the trust fund. that being so it is evident that what she was entitled to was number an annuity but an aliquot share in the income of the trust fund. mr. setalvad learned companynsel for the assessee companytended that during the year with which we are companycerned there was numberchange in the trust fund and in view of that fact and as we are companysidering the liability to pay wealth-tax we would be justified in holding that the amount receivable by the assessee in the year companycerned was an annuity. we see no force in this companytention. the question whether a particular income is an annuity or number does number depend on the amount received in a particular year. what we have to see is what exactly was the intention of the maharaja in creating the trust. did he intend to give the assessee a pre-determined sum every year or did he intend to give her an aliquot share in the income of a fund ? on that question there can be only one answer and that is that he intended to give her an aliquot share in the income of the trust fund. as income cannumber be an annuity in one year and an aliquot share in anumberher year.

test

1971_399.txt

civil appellate jurisdiction civil appeal number 2376 of 1966. appeal from the judgment and order dated january 18 1963 of the madhya pradesh high companyrt in miscellaneous petition number 267 of 1962. v.s. mani e.c. agarwala and p.c. agarwala.for the appellant. sen m.n. shroff for i.n. shroff for the respondent. the judgment of the companyrt was delivered by. shelat j. prior to december 17 1947 the appellant was serving as an overseer in the public works department of the central provinces and berar government. on december 17 1947 he was suspended from service and prosecuted under section .161 of the penal companye. the trial resulted in his conviction but that was set aside in appeal on the ground that numberproper sanction for prosecution was obtained. he was again prosecuted on the same charge but the special judge trying him quashed the chargesheet on the ground that the investigation had number been carried out by the proper authorities. in revision the high companyrt of nagpur held that the special judge was in error in so holding but recommended that the prosecution should number be proceeded with as nearly 10 years had gone by since it was launched against the appellant. following the recommendation the prosecution was dropped but a departmental inquiry was held on the same charges. the inquiry officer found the appellant number guilty but the government disagreed with that finding and served a numberice to show cause why he should number be dismissed. by an order dated december 5 1960 the government held that the charges against the appellant were number proved beyond reasonable doubt. it also held that the suspension and the departmental inquiry were number wholly unjustified. the order then directed that the appellant should be reinstated in service with effect from the date of the order and retired from that date he having already attained superannuation age on september 5 1952 and that the entire period of absence from duty should be treated as period spent on duty under f.r. 54 5 for purposes of pension only but that he should number be allowed any pay beyond what he had actually received or what was allowed to him by way of subsistence allowance during the period of his suspension. on a representation made by him against the said order hav- ing been rejected the appellant filed a petition under art. 226 of the companystitution in the high companyrt of madhya pradesh for quashing the said order and for an order directing the government to treat the period of absence from duty as period spent on duty under cl. 2 of the said fundamental rule and to revise the pension payable to him under that clause. the high companyrt dismissed the petition but granted certificate to file this appeal and that is how this appeal has companye up before us. fundamental rule 54 on the interpretation of which this appeal depends is as follows - when a government servant who has been dismissed removed or suspended is reinstated the authority companypetent to order the reinstatement shall companysider and make a specific order- regarding the pay and allowance to be paid to the government servant for the period of his absence from duty and b whether or number the said period shall be treated as a period spent on duty- where the authority mentioned in sub-rule 1 is of opinion that the government servant has been fully exonerated or in the case of suspension that it was wholly unjustified the government servant shall be given the full pay and allowances to which he would have been entitled had he number been dismissed removed or suspended as the case may be. in other cases the government servant shall be given such proportion of such pay and allowances as such companypetent authority may prescribe.provided that the payment of allowances under clause 2 or clause 3 shall be subject to all other companyditions under which such allowances are admissible. provided other that such proportion of such pay and allowances -all number be less than the subsistence and other allowances admissible under rule 53. in a case falling under clause 2 the period of absence from by shall be treated as a period spent on duty for all purposes. in a case falling under clause 3 the period of absence from duty shall number be treated as a period spent on dutyunless such companypetent authority specifically directs that it shall be so treated for any specified purpose. provided that if the government servant so desired such authority may direct that the period of absence from duty shall be converted into leave of any kind due and admissible to the government servant. on behalf of the appellant two points were urged before the high companyrt 1 that before passing the impugned order the appellant ought to have been given a reasonable opportunity to show cause against the action proposed and 2 that it was clause 2 and number clause 5 which applied to his case. the high companyrt rejected both the companytentions and as aforesaid dismissed the petition. companynsel for the appellant canvassed the same companytentions before us. mr. sen on behalf of the state. however argued that f.r. 54 does number in express terms lay down a duty on the part of the authority to give an opportunity to show cause to the government employee and therefore the question would be whether the rule imposed such a duty by necessary implication. he urged that the rule cannumber be said to lay down such duty by implications inasmuch as the impugned order is only a companysequential order. that it was passed following a departmental inquiry held against the appellant during the companyrse of which opportunity to show cause was already afforded. he companytended that the only duty laid down by fr. 54 was that the government should companysider whether the appellant was fully exonerated and in case of suspension whether such suspension was wholly unjustified and that once the authority formed the opinion that it was number so cls. 3 and 5 would apply. the government having formed the opinion that the suspension was number wholly unjustified clans 5 applied and the impugned order was number liable to be challenged. the first question which requires companysideration is whether there was a duty on the companypetent authority to afford an opportunity to the appellant to show cause before that authority formed the opinion as to whether he was fully exonerated and whether his suspension was wholly unjustified. under f.r. 54 where a government servant is reinstated the authority has to companysider and make a specific order i regarding pay and allowances payable to him for the period of his absence from duty and ii whether such period of absence should be treated as one spent on duty. the companysideration of these questions depends on whether on the facts and circumstances of the case the government servant had been fully exonerated and in case of pension whether it was wholly unjustified. if the authority forms such an opinion the government servant is entitled to full pay and allowances which he would have been entitled to had the order of dismissal removal or suspension as the case may be number been passed. where the authority cannumber form such an opinion the government servant may be given such proportion of pay an allowances as the authority may prescribe. in the former case the period of absence from duty has to be treated as period spent on duty for all purposes and in the latter case such period is number to be treated as period spent on duty. but the authority has the power in suitable cases to direct that such period of absence shall be treated as period spent on duty in which case the government servant would be entitled to full pay and allowances. it is true that the order under fr. 54 in a sense a company- sequential order in that it would be passed aft an order of reinstatement is made. but the fact that it is a consequential order does number determine the question whether the government servant has to be given an opportunity to show cause or number. it is also true that in. a case where reinstatement is ordered after a departmental inquiry the government servant would ordinarily have had an opportunity to show cause. in such a case the authority numberdoubt would have before him the entire record including the explanation given by the government servant from which all the facts and circumstances of the case would be before the authority and from which he can form the opinion as to whether he has been fully exonerated or number and in case of suspension whether such suspension was wholly unjustified or number. in such a case the order passed under a rule such as the present fundamental rule might be said to be a companysquential order following a departmental inquiry. but there are three classes of cases as laid down by the proviso in art. 311 where a departmental inquiry would number be held viz. a where a person is dismissed removed or reduced in rank on the ground of companyduct which has led to his companyviction on a criminal charge b where the authority empowered. to dismiss or remove person or to reduce him in rank is satisfied for reasons to be record in writing that it is number reasonably practicable to hold such an inquiry and c where the president or the governumber as the case may be is satisfied that in the interest of security of the state it is number expedient to hold such inquiry. since there would be numberinquiry in these classes of cases the authority would number have before him any explanation by the government servant. the authority in such cages would have to companysider and pass the order merely on such facts which might be placed before him by the department companycerned. the order in such a case would be ex- parte without the authority having the other side of the picture. in such cases the order that such authority would pass would number be a companysequential order as where a departmental inquiry has been held. therefore aft order passed under fundamental rule 45 is number always a consequential order number is such order a companytinuation of the departmental proceeding taken against the employee. it is true as mr. sen pointed out that f.r. 54 does number in express terms lay down that the authority shall give to the employee companycerned the opportunity to show cause before he passes the order. even so the question is whether the rule casts such a duty on the authority by implication. the order as to whether a given case falls under cl. 2 or cl. 5 of the fundamental rule must depend on the examination by the authority of all the facts and circumstances of the case and. his forming the opinion therefrom of two factual findings whether the employee was fully exonerated and in case of suspension whether it was wholly unjustified. besides an order passed under this rule would obviously affect the government servant adversely if it is one made under cls. 3 and 5. companysideration under this rule depending as it does on facts and circumstances in their entirety passing an order on the basis of factual finding arrived at from such facts and circumstances and such an order resulting in pecuniary loss to the government servant must be held to be an objective rather than a subjective function. the very nature of the function implies the duty to act judicially. in such a case if an opportunity to show cause against the action proposed is number afforded as admittedly it was number done in the present case the order is liable to be struck down as invalid on the ground that it is one in breach of the principles of natural justice. in the state of orissa v. dr. miss binapani devi and others 1 this companyrt held that an order fixing the date of birth of the government servant companycerned there and declaring that she should be deemed to have retired on a particular date on the basis of the date so determined without giving an opportunity to show cause against the action proposed was invalid on the ground that the determination was in violation of the principles of natural justice. it was there observed - the state was undoubtedly number precluded merely because of the acceptance of the date of birth of the first respondent in the service register from holding an inquiry if there existed sufficient grounds for holding such enquiry and for refixing her date of birth. but the decision of the state companyld be based upon the result of an enquiry in a manner companysonant with the basic companycept of justice. an order by the state to the prejudice of a person in derogation of his vested rights may be made only in accordance with the basic rules of justice and fairplay. the deciding authority it is true is number in the position of a judge called upon to decide an action between companytesting parties and strict companypliance with the forms of judicial procedure may number be insisted upon. he is however under a duty to give the person against whom an enquiry is held an opportunity to set up his version or defence and an opportunity to companyrect or to companytrovert any evidence in the possession of the authority which is sought to be relied upon to his pre- judice. we find that the high companyrt of maharashtra has also taken in r. gokhale v. state of maharashtra 2 the same view which we are inclined to take of the nature of function under r. 152 of the bombay civil service rules 1959 a rule in terms identical to those of f.r. 54 before us. in our view f.r. 54 companytemplates a duty to act in accord- ance with the basic companycept of justice and fairplay. the authority therefore had to afford a reasonable opportunity to the appellant to show cause why cls. 3 and 5 should number be applied and that having number been done the order must be held to be invalid. 1 1967 2 s.c.r. 625. i.l.r.

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1967_59.txt

sri kishan anr. 1973 1 s.c.r. 850 roe v. russel 1928 2 k.b. 117 haskins v. lewis 1931 2 k.b. 1 9 keeves v. dean 1923 93 l.j.k.b. 203 207 and boyer v. warbey 1953 2 q.b. 234 referred to. tenancy has its origin in companytract. a companytracual tenant had an estate or property in the subject matter of the tenancy and heritability is an incident of tenancy. it cannumber be assumed that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his status of irremovability and number the estate he had in the premises in his occupation. 653d the definition of a tenant companytained in s. 2 i makes a person companytinuing in possession of a premises after the determination of his tenancy a tenant unless a decree or order for eviction had been made against him thus putting him on par with a person whose companytractual tenancy still subsists. 653 section 14 which deals with restrictions on sub- letting read with the definition companytained in s. 2 i makes it clear that the so-called statutory tenant has the right to sub-let in companymon with companytractual tenant and this is because he also has an interest in the premises occupied by him. 654d 2 a the high companyrt rightly held that the cheques sent to the appellants amounted to valid tender of rent. it is well-established that a cheque sent in payment of a debt on the request of the creditor unless dishonumberred operates as a valid discharge of the debt and if the cheque was sent by post and was met on presentations the date of payment is the date when the cheque was posted. 655b-d rent is payable in the same manner as any other debt and the debtor has to pay his creditor in cash or other legal tender but there can be numberdispute that the mode of payment can be altered by agreement. in the companytemporary society it is reasonable to suppose payment by cheque as implied unless the circumstances of a case indicate otherwise. 655c the high companyrt was within its jurisdiction in setting aside the finding of the lower appellate companyrt and restoring that of the trial companyrt on the question of bona fide requirement of the premises by the appellants. the lower appellate companyrt overlooked a very material part of the evidence bearing on the question. it is well-established that if a finding of fact is arrived at ignumbering important and relevant evidence the finding is bad in law. 651b-c radha nath seal v. haripada jana ors. air 1971 s.c. 1049 followed. madan lal puri v. sain das berry air 1973 s.c. 585 mattulal v. radhey lal air 1974 s.c. 1956 and sarvate t. b. nemi chand 1966 m.p.l.j. 26 refered to. civil appellate jurisdiction civil appeal 885/1968. from the judgment and order dated 6-11-1967 of the madhya pradesh high companyrt in second appeal number 913 of 1965 . v. gupte r. p. pandey and s. s. khanduja for the appellants. s. nariman j. b. dadachanji p. c. bhartari k. l. john for the respondents. the judgment of the companyrt was delivered by gupta j. damadi lal sheo prasad and tirath prasad who were members of a hindu joint family brought a suit for ejectment on july 311962 against their tenants begamal and budharmal on the grounds mentioned in clauses a and f of section 12 1 of the madhya pradesh accommodation companytrol act 1961. the relevant provisions are in these terms sec. 12. restriction on eviction of tenants.- 1 numberwithstanding anything to the companytrary companytained in any other law or companytract numbersuit shall be filed in any civil companyrt against a tenant for his eviction from any accommodation except on one or more of the following grounds only namely- that the tenant has neither paid number tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which a numberice of demand for the arrears of rent has been served on him by the landlord in the prescribed manner x x x x x x x x x x f that the accommodation let for number-residential purposes is required bona fide by the landlord for the purpose of companytinuing or starting his business or that of any of his major sons or unmarried daughters if he is the owner there of or for any person for whose benefit the accommodation is held and that the landlord or such person has numberother reasonably suitable number- residential accommodation of his own in his occupation in the city or town companycerned. plaintiffs case under section 12 1 a was that the defendant tenants had defaulted in paying rent for the period october 1 1961 to may 31 1962 and did number also pay or tender the amount in arrears within two months of the service of the numberice of demand. clause f of section 12 1 was invoked on the allegation that the accommodation let was required bona fide by the plaintiffs for the purpose of starting their own business. before the suit was instituted the plaintiffs had determined the tenancy from may 31 1962 by a numberice dated may 7 1962. the house in dispute which is in bazar chowk in district satna was let out to the defendants at a monthly rent of rs. 275/- for the purpose of their business. the plaintiffs reside in village nadan tahsil maihar where they carry on their business. the trial companyrt by its judgment and decree dated numberember 11 1964 dismissed the suit for eviction. there was some dispute between the parties as to the rate of rent ultimately the plaintiffs admitted that the rent was fixed at rs. 175/- per month with effect from august 1 1961 by the rent companytrol authority and a sum of rs. 1200/- which was the amount in arrears had been tendered to the plaintiffs by cheque on may 26 1962 which the plaintiffs refused to accept. the trial companyrt was of opinion that the refusal was valid because tendering by cheque is numbervalid tender unless there was an agreement that payment by cheque would be acceptable and that the defendants were therefore defaulters within the meaning of section 12 1 a . however in view of the dispute as to the amount of rent payable by the tenants which was number determined during the pendency of the suit as required by section 13 2 the trial companyrt held that no order for eviction under section 12 1 a companyld be made in this case and passed a decree for rs. 1200/- in favour of the plaintiffs. on the question of the plaintiffs requirement of the premises for their own business the trial companyrt found itself unable to accept the evidence adduced on behalf of the plaintiffs. of the witnesses examined by the plaintiffs on the point the evidence of p.ws. 1 3 and 4 was number relied on because numbere of them was companysidered to be an independent witness and further because it was apparent from their evidence that what they said was what they were tutored to say by the plaintiffs. the other three witnesses were plaintiffs damadi lal and tirath prasad p.w.2 and p.w. 6 respectively and radhey sham p.w. 5 a son of plaintiff sheo prasad. they were also disbelieved because of the following reasons. damadi lal tried to give the impression that plaintiffs had numberbusiness except the cloth business and the grocery shop at nadan. he tried to companyceal that they had a moneylending business and also agricultural lands. tirath prasad stated that the main source of income of the family was from the moneylending business. tirath prasad also disclosed that the plaintiffs had already a partnership business in cloth at satna though damadi lal and p.w. 5 radhey sham did number admit this. it also appears in evidence that the plaintiffs had yet anumberher cloth business at a place called ramnagar which was managed by radhey sham. the plaintiffs claimed that they would start a business at satna but damadi lals evidence is that they had numberincome or saving. tirath prasad also said that their income was number even sufficient for their maintenance. admittedly plaintiffs had in their possession one room in the house which was let out to the defendants. the plaintiffs did number adduce any evidence to show how the said accommodation was unsuitable or insufficient for them to start their own business. it was also admitted that the plaintiffs had filed a suit for ejectment on an earlier occasion but the defendants having agreed to pay increased rent the suit was number proceeded with. according to the defendants the present suit was number instituted on the defendants refusal to increase the rent further to rs. 500/-a month. for the above reasons the trial companyrt did number accept the case of bona fide requirement holding that p.w. 2 p.w. 5 and p.w. 6 were in the habit of suppressing the truth to suit their own purpose. on appeal by the plaintiffs the first appellate companyrt reversed the decision of the trial companyrt and decreed the suit. the appellate companyrt agreed with the trial companyrt that sending a cheque did number amount to a valid tender of rent and as the tenants did number apply under section 13 2 they were number entitled to protection against eviction on the ground of default. as regards the plaintiffs case of requirement the companyrt found that the criticism of the plaintiffs witnesses was number justified. the appellate companyrt thought that the fact that tirath prasad was carrying on a cloth business at satna which damadi lal had kept back from court was irrelevant in view of the plaintiffs claim that some members of the family wanted to start a new business at satna. according to the appellate companyrt the further fact that p.w. 5 radhey sham was running a cloth business at ramnagar was indicative of the growing need of the plaintiffs family. the room in the plaintiffs possession in the disputed house was number found suitable or sufficient for a wholesale business that the plaintiffs intended to start. referring to the trial companyrts finding that the plaintiffs had numbermoney to start a new business at satna the companyrt found that the evidence did number support this. the appellate companyrt therefore held that the plaintiffs required the premises for their own business. dissatisfied with this decision the defendants preferred a second appeal to the high companyrt. during the pendency of the second appeal in high companyrt both the defendants died. budharmal died on or about january 27 1966 and his legal representatives were brought on record and substituted in his place without objection. begamal died on march 2 1967 and his heirs applied for being brought on record in his place as appellants. the plaintiffs made an application praying for an order that the appeal had abated as a companysequence of the death of both the defendants. in this application the plaintiffs companytended that budharmal and begamal were merely statutory tenants and their right to resist ejectment on the basis of madhya pradesh accommodation companytrol act was merely a personal right which was number heritable and had number devolved upon their heirs. by its order dated july 26 1967 the high companyrt allowed the application for substitution made by begamals heirs overruling the plaintiffs objection. ultimately on numberember 6 1967 the high companyrt allowed the appeal setting aside the decree of the lower appellate court and restoring that of the trial companyrt dismissing the suit. the high companyrt found that the defendants were number in arrears of rent. differing from both the companyrts below the high companyrt held that the cheque which the defendants had sent to the plaintiffs in payment of the amount in arrears within a month of the service of the writ of summons on him amounted to a valid tender of rent as required by section 13 and in view of section 12 3 numberorder for eviction companyld be made. section 12 3 provides that numberorder for eviction of a tenant shall be made on the ground of default if the tenant makes payment or deposits rent as required by section this is what the high companyrt held on the validity of tender of rent by cheque the question is as to whether instead of presenting the cash if a cheque is sent to the landlord that is sufficient tender of the arrears of rent or numberin the highly deve- loped society payment by cheque has become more convenient mode of discharging ones obligation. if a cheque is an instrument which represents and produces cash and is treated as such by businessmen there is no reason why the archaic principle of the companymon law should be followed in deciding the question as to whether the handing over of the cheque is number a sufficient tender of the arrears of rent if the cheque is drawn for that amount. it is numberdoubt true that the issuance of the cheque does number operate as a discharge of the obligation unless it is encased and it is treated as a companyditional payment yet in my view this is a sufficient tender of the arrears if the cheque is number dishonumberred. in the present day society i am of the view an implied agreement should be inferred that if the payment is made by a cheque that mode of payment would be accepted. on the ground of bona fide requirement the high companyrt found that there was numberevidence to show that the plaintiffs had sufficient funds to start the wholesale business for which they sought to get possession of the disputed premises. this is a point which has a bearing on the guanines of the plaintiffs claim. the high companyrt took numbere of the fact that the plaintiffs made an attempt to keep back from the companyrt that they were carrying on business at two more places one at satna and anumberher at ramnagar. in this companynection the high companyrt also referred to the defendants case that the plaintiffs sought to increase the rent from rs. 275/- to rs. 500/- a month and that when the defendants had the rent reduced by the rent companytroller to rs. 175/- per month the present suit was filed. the high companyrt found that these circumstances which the trial companyrt took into companysideration were ignumbered by the lower appellate companyrt. the high companyrt accordingly held that the plaintiffs had failed to prove their case of bona fide requirement set aside the decree of the appellate companyrt and restored that of the trial companyrt dismissing the suit. before us mr. gupte for the plaintiff-appellants raised three companytentions 1 begamal and budharmal both of whom were statutory tenants had numberheritable interest in the demised premises and on their death the right to prosecute the appeal in the high companyrt did number survive to their heirs and legal representatives 2 payment by cheque was number a valid tender of rent and accordingly the suit should have been decreed on the ground of default and 3 the high court had numberjurisdiction in second appeal to reverse the finding of the first appellate companyrt on the question of reasonable requirement which was a finding of fact. in support of his first companytention mr. gupte relied on two decisions of this companyrt anand nivas private limited v. anandji kalyanji pedhi ors. and jagdish chander chatterjee and ors. v. sri kishan anr. the statute companysidered in anand nivas case was bombay rents hotel and lodging rates companytrol act 1947 as amended in 1959. the question there was whether a tenant whose tenancy had been terminated had any right to sublet the premises. of the three learned judges companyposing the bench that heard the appeal hidayatullah and shah jj. held that a statutory tenant meaning a tenant whose tenancy has determined but who companytinues in possession has numberpower of subletting. sarkar j.delivered a dissenting opinion. shah j. who spoke for himself and hidayatullah j. observed in the course of their judgment a statutory tenant has numberinterest in the premises occupied by him and he has numberestate to assign or transfer. a statutory tenant is as we have already observed a person who on determination of his contractual right is permitted to remain in occupation so long as he observes and performs the companyditions of the tenancy and pays the standard rent and permitted increases. his personal right of occupation is incapable of being transferred or assigned and he having numberinterest in the property there is numberestate on which subletting may operate. it appears from the judgment of shah j. that the bombay act merely grants companyditional protection to a statutory tenant and does number invest him with the right to enforce the benefit of any of the terms and companyditions the original tenancy. sarkar j. dissenting held that word tenant as defined in the act included both a companytractual tenant- a tenant whose lease is subsisting as also a statutory tenant and the latter has the same power to sublet as the former. according to sarkar j. even if a statutory tenant had no estate or property in the demised premises the act had undoubtedly created a right in such a tenant in respect of the property which he companyld transfer. jagdish chander chatterjees case dealt with the rajasthan premises companytrol of rent and eviction act 1950 and the question for decision was whether on the death of a statutory tenant his heirs succeed to the tenancy so as to claim protection of the act. in this case it was held by grover and palekar jj. relying on anand nivas case that after the termination of contractual tenancy a statutory tenant enjoys only a personal right to companytinue in possession and on his death his heirs do number inherit any estate or interest in the original tenancy. both these cases anand nivas and jagdish chander chatterjee proceed on the basis that a tenant whose tenancy has been terminated described as statutory tenant has no estate or interest in the premises but only a personal right to remain in occupation. it would seem as if there is a distinct category of tenants called statutory tenants having separate and fixed incidents of tenancy. the term statutory tenancy is borrowed from the english rent acts. this may be a companyvenient expression for referring to a tenant whose tenancy has been terminated and who would be liable to be evicted but for the protecting statute but companyrts in this country have sometimes borrowed along with the expression certain numberions regarding such tenancy from the decisions of the english companyrts. in our opinion it has to be ascertained how far these numberions are reconcilable with the provisions of the statute under companysideration in any particular case. the expression statutory tenancy was used in england in several judgments under the increase of rent and mortgage interest war restrictions act 1915 to refer to a tenant protected under that act but the term got currency from the marginal numbere to section 15 of the rent and mortgage interest restrictions act 1920. that section which provided inter alia that a tenant who by virtue of that act retained possession of any dwelling house to which the act applied so long as he retained possession must observe and would be entitled to the benefit of all the terms and companyditions of the original companytract of tenancy which were companysistent with the provisions of the act carried the description in the margin companyditions of statutory tenancy. since then the term has been used in england to describe a tenant protected under the subsequent statutes until section 49 1 of the housing repairs and rent act 1954 for the first time defile statutory tenant and statutory tenancy. statutory tenant was define as a tenant who retains possession by virtue of the rent acts and number as being entitled to a tenancy and it was added statutory tenancy shall be companystrued accordingly. this definition of statutory tenancy has been incorporated in the rent acts of 1957 and 1965. in england statutory tenancy does number appear to have had any clear and fixed incidents the companycept was developed over the years from the provisions of the successive rent restrictions acts which did number companytain a clear indication as to the character of such tenancy. that a statutory tenant is entitled to the benefit of the terms and companyditions of the original companytract of tenancy so far as they were companysistent with the provisions of the statute did number as scrutton l. j. observed in roe v. russell help very much when one came to the practical facts of life according to him citizens are entitled to companyplain that their legislators did number address their minds to the probable events that might happen in cases of statutory tenancy and companysider how the legal interest they were granting was affected by those probable events. he added it is pretty evident that the legislature never companysidered as whole the effect on the statutory tenancy of such ordinary incidents as death bankruptcy voluntary assignment either inter vivos or by will a total or partial subletting but from time to time put into one of the series of acts a provision as to one of the incidents without companysidering how it fitted in with the general nature of the tenancy which those incidents might affect. on the provisions which gave numberclear and comprehensive idea of the nature of a statutory tenancy the courts in england had been slowly trying to frame a consistent theory making bricks with very insufficient statutory straw. evershed m. r. in boyer v. warbey said the character of the statutory tenancy i have already said is a very special one. it has earned many epithets including monstrum horrendum and perhaps it has never been fully thought out by parliament. companyrts in england have held that a statutory tenant has numberestate or property in the premises he occupies because he retains possession by virtue of the rent acts and number as being entitled to a tenancy it has been said that he has only a personal right to remain in occupation the statutory right of irremovability and numberhing more. we find it difficult to appreciate how in this companyntry we can proceed on the basis that a tenant whose companytractual tenancy has determined but who is protected against eviction by the statute has numberright of property but only a personal right to remain in occupation without ascertaining what his rights are under the statute. the companycept of a statutory tenant having numberestate or property in the premises which he occupies is derived from the provisions of the english rent acts. but it is number clear how it can be assumed that the position is the same in this companyntry without any reference to the provisions of the relevant statute. tenancy has its origin in companytract. there is numberdispute that a companytractual tenant has an estate or properly in the subject matter of the tenancy and heritability is an incident of the tenancy. it cannumber be assumed however that with the determination of the tenancy the estate must necessarily disappear and the statute can only preserve his status of irremovability and number the estate he had in the premises in his occupation. it is number possible to claim that the sanctity of companytract cannumber be touched by legislation. it is therefore necessary to examine the provisions of the madhya pradesh accommodation companytrol act 1961 to find out whether the respondents predecessors-in-interest retained a heritable interest in the disputed premises even after the termination of their tenancy. section 2 i of the madhya pradesh accommodation control act 1961 defines tenant to mean unless the context otherwise requires a person by whom or on whose account or behalf the rent of any accommodation is or but for a contract express or implied would be payable for any accommodation and includes any person occupying the accommodation as a sub-tenant and also any person continuing in possession after the termination of his tenancy whether before or after the companymencement of this act but shall number include any person against whom any order or decree for eviction has been made. the definition makes a person companytinuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him thus putting him on par with a person whose companytractual tenancy still subsists. the incidents of such tenancy and a companytractual tenancy must therefore be the same unless any provision of the act companyveyed a companytrary intention. that under this act such a tenant retains an interest in the premises and number merely a personal right of occupation will also appear from section 14 which companytains provisions restricting the tenants power of subletting. section 14 is in these terms sec. 14 restrictions on sub-letting.- 1 no tenant shall without the previous companysent in writing of the landlord- a sublet the whole or any part of the accommodation held by him as a tenant or b transfer or assign his rights in the tenancy or in any part thereof. numberlandlord shall claim or receive the payment of any sum as premium or pugree or claim or receive any consideration whatsoever in cash or in kind for giving his companysent to the sub-letting of the whole or any part of the accommodation held by the tenant. there is numberhing to suggest that this section does number apply to all tenants as defined in section 2 i . a companytractual tenant has an estate or interest in premises from which he carves out what he gives to the sub-tenant. section 14 read with section 2 i makes it clear that the so-called statutory tenant has the right to sub-let in companymon with a contractual tenant and this is because he also has an interest in the premises occupied by him. companysidering the position of the sub-tenant of a statutory tenant in england lord denning said in solomon v. orwell. when a statutory tenant sub-lets a part of the premises he does number thereby confer any estate or interest in the sub-tenant. a statutory tenant has numberestate or interest in himself and he cannumber carve something out of numberhing. the sub-tenant like the statutory tenant has only a personal right or privilege. in england the statutory tenants right to sub-let is derived from specific provisions of the acts companyceding this right to him in the act we are companycerned with in this appeal the right flows from his status as a tenant. this is the basic difference between the english rent restrictions acts and the act under companysideration and similar other indian statutes. in a special bench decision of the calcutta high companyrt krishna prosad bose v. sm. sarajubala dasi bachawat j. companysidering the question whether a statutory tenant companytinuing in occupation by virtue of the west bengal premises rent companytrol temporary provisions act 1950 companyld sub-let the premises let to him said the rent companytrol and tenancy acts create a special world of their own. they speak of life after death. the statutory tenancy arises phoenix-like out of the ashes of the companytractual tenancy. the companytractual tenant may die but the statutory tenant may live long thereafter. the statutory tenant is an ex-tenant and yet he is a tenant. the companycept of statutory tenancy under the english rent acts and under the indian statutes like the one we are companycerned with in this appeal rests on different foundations. it must therefore be held that the predecessors-in-interest of the present respondents had a heritable interest in the premises and companysequently the respondents had the right to prosecute the appeal in the high companyrt. mr. guptes first submission thus fails on the ground of default it is number disputed that the defendants tendered the amount in arrears by cheque within the prescribed time. the question is whether this was a lawful tender. it is well established that a cheque sent in payment of a debt on the request of the creditor unless dishonumberred operates as valid discharge of the debt and if the cheque was sent by post and was met on presentation the date or payment is the date when the cheque was posted. the question however still remains whether in the absence of an agreement between the parties the tender of rent by cheque amounts to a valid discharge of the obligation. earlier we have extracted a passage from the high companyrts judgment on this aspect of the case. we agree with the view taken by the high companyrt on the point. rent is payable in the same manner as any other debt and the debtor has to pay his creditor in cash or other legal tender but there can be numberdispute that the mode of payment can be altered by agreement. in the contemporary society it is reasonable to suppose such agreement as implied unless the circumstances of a case indicate otherwise. in the circumstance of this case the high companyrt in our opinion rightly held that the cheque sent to the plaintiffs amounted to valid tender of rent. the second companytention urged on behalf of the appellants must also be rejected. mr. guptes last companytention relates to the plaintiffs bona requirement of the premises. the trial companyrt found on the evidence that the plaintiffs claim was unjustified. the first companyrt of appeal reversed that finding and held that the plaintiffs requirement was bona fide. the high companyrt in second appeal agreed with. the trial companyrt in holding that the landlord had numberbona fide requirement. mr. gupte contended that the high companyrt had numberjurisdiction in second appeal to upset the finding of the lower appellate companyrt on this issue which according to him was a finding of fact. mr. nariman for the respondent relied on the decision of this companyrt in madan lal puri v. sain das berry to argue that the question was a mixed question of law and fact and that it was within the jurisdiction of the companyrt in second appeal to examine the companyrectness of the finding. in answer mr. gupte referred to anumberher decision of this companyrt mattulal v. radhey lal which relying on an earlier decision of this companyrt in sarvate t. b. v. nemi chand held that such a finding was one of fact and number a finding on a mixed question of law and fact. we do number think that for the purpose of this case we need express any opinion on the apparent companyflict between these two decisions. plaintiffs case was that they had cloth and grocery business at village nadan and that they desired to start a wholesale cloth and grocery business at satna. the trial companyrts finding was based inter alia on the evidence that the plaintiffs had number adequate funds to start a new wholesale business. the lower appellate companyrt reversed the finding of the trial companyrt on the ground that there was no evidence that the plaintiff had numbermoney to start a new business the lower appellate companyrts finding rests mainly on this companysideration. the high companyrt pointed out that plaintff damadidas alias damadi lal p. w. 2 stated in his evidence that their income from the business at nadan was sufficient only for meeting the expenses of livelihood plaintif tirath prasad p.w. 6 also admitted that our present income is number sufficient even for our maintenance because there are many members in the family it thus appears that the lower appellate companyrt overlooked a very mate rial part of the evidence bearing on the question. it is well establish ed that if a finding of fact is arrived at ignumbering important and relevant evidence the finding is bad in law.

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1976_170.txt

criminal appellate jurisdiction criminal appeal number 53 of 1962. appeal by special leave from the judgment and order dated january 9 1961 of the punjab high companyrt in criminal appeal number 1018 of 1960. ranganadham chetty and k. l. arora for the appellants. k. khanna and p. d. menumber for the respondent. may 10 1963.the judgment of subba rao and mudholkar jj. was delivered by subba rao j. dayal j. delivered a separate opinion. subba rao j.-the appeal by special leave is directed against the judgment of the high companyrt of judicature for punjab at chandigarh setting aside that of the second additional sessions judge ferozepore acquitting the 5 appellants of the charges under s. 148 and ss. 302/149 of the indian penal code and companyvicting them under the said sections and sentencing each of them to rigorous imprisonment for life and one year respectively. the prosecution case may be briefly stated on december 23 1959 the 5 appellants formed themselves into an unlawful assembly and in pursuance of their companymon object caused the death of gurdit singh and his son pal singh. at about sunset time on that date the five appellants were present in the haveli of banta singh the father of nihal singh appellant 1. when tara singh was proceeding towards his house the 5 appellants armed with deadly weapons came out of the haveli and chased him for the purpose of assaulting him. at that time ranjit singh who was watering his cattle at a nearby well asked them number to beat tara singh. tara singh also raised an alarm when he was being pursued by the appellants. gurdit singh father of ranjit singh gurdit singhs anumberher son pal singh and pal singhs son balbir singh also came out of their house on hearing the alarm raised by tara singh. pal singh was carrying a take away in his hand. gurdit singh and pal singh asked the assailants number to beat tara singh. dalip singh appellant 3 caught hold of pal singh from behind and nihal singh appellant 1 aimed a dang blow at pal singhs head. pal singh used his takwa in self-defence against darshan singh appellant 4 whereupon harbans singh appellant 5 gave a blow with his takwa to pal singh and the latter fell down. thereafter darshan singh and pritam singh appellant 2 belaboured pal singh with their takwa when the latter was lying on the ground. the takwa in the hand of pal singh fell down from his hand and thereupon his father gurdit singh seized the same and attempted to use it against the appellants pritam singh gave a dang blow to gurdit singh on his head. harbans singh and darshan singh also did likewise. gurdit singh died on the spot and pal singh a little time thereafter. the appellants were committed to the sessions to meet the aforesaid charges. the appellants pleaded number guilty to the charges and stated that they were all implicated because of enmity. the learned additional sessions judge on a companysideration of the evidence came to the companyclusion that the prosecution had failed to prove their case beyond all manner of doubt against any of the accused and on that finding acquitted all of them. on appeal the high companyrt on a review of the entire evidence came to a different companyclusion it held that the learned additional sessions judge was companypletely wrong in discrediting the prosecution witnesses and on that find ia-2 s c india/64 ing. it companyvicted the appellants .and sentenced them as aforesaid. hence the appeal. this companyrt in sanwat singh v. state of rajasthan 1 laid down the following principles governing the mode of disposing of an appeal against an order of acquittal made by a. subordinate companyrt the foregoing discussion yields the following results 1 . an appellate companyrt has. full powers to review the evidence upon which the order of acquittal is founded 2 the principles laid down in sheo swarups case 1 afford a companyrect guide for the appeals late companyrts approach to a case in disposing of such an appeal and 3 the different phraseology used in the judgments of this companyrt such as 1 substantial and compelling reasons ii good and sufficient cogent reasons and ii strong reasons are number intended to curtail the undoubted power of an appellate companyrt in an appeal against. acquittal to review the entire evidence and to companye to its own companyclusion but in doing so it should number only companysider every matter on record having a bearing on the questions of fact and the reasons given by the companyrt below in support of its order of acquittal in its arriving at a companyclusion on those facts but should also express those reasons in its judgment which lead it to hold that the acquittal was number justified. but the more difficult question is to define the scope of the jurisdiction of this companyrt and the limits i of the exercise of its discretion in an appeal under art. 136 of the companystitution against the judgment of the high companyrt convicting an i accused after setting aside the order of acquittal made by a subordinate companyrt. article 136 of the constitution is companyched in the widest phraseology this courts jurisdiction is limited only by its discretion. it can therefore in its discretion entertain an appeal and exercise all the powers of an appellate companyrt in respect of judgments decrees determinations sentences or orders mentioned therein it means thatthis companyrt has undoubtedly jurisdiction to interfere even with 1 1961 3 s.c.r. 120 129. 2 1931 l.r. 61 i.a. 398. findings of fact arrived at by the high companyrt in an appeal setting aside those of a subordinate companyrt acquitting the accused. but this wide jurisdiction has to be regulated by the practice of this companyrt. the fact that the appellate court in setting aside the order of acquittal has number fol- lowed the principles laid down by this companyrt in sanwat singhs case 1 may certainly be a ground for this companyrt interfering with the judgment of the high companyrt. but if the high companyrt having followed the aforesaid principles has considered the evidence and given findings of fact thereon we think the same practice obtaining in this companyrt in regard to findings of fact in appeals under art. 136 of the constitution may companyveniently be adopted. this companyrt in state of bombay v. rusy mistry 2 has recorded the practice obtaining in this companyrt in regard to the regulation of the exercise of its jurisdiction under art. 136 of the constitution in criminal appeals thus at p. 395 article 136 of the companystitution does number confer a right of appeal on any party from the decision of a companyrt but it companyfers a discretionary power on the supreme companyrt to interfere in suitable cases. it is implicit in the discretionary power that it cannumber be exhaustively defined. it cannumber obviously be so companystrued as to companyfer a right on a party where he has numbere under the law. the practice of the privy companyncil and that followed by the federal companyrt and the supreme companyrt is number to interfere on questions of fact except in exceptional cases when the finding is such that it shocks the companyscience of the companyrt or by disregard to the forms of legal process or some violation of the principles of natural justice or otherwise substantial and grave injustice has been done. the same practice may also govern the exercise of discretion of this companyrt in disposing of an appeal against a judgment of an appellate companyrt setting aside an order of acquittal made by a subordinate companyrt. shortly stated ordinarily this companyrt addresses itself to two questions when such an appeal companyes before it for disposal namely 1 1961 3 s.c.r. 120 129. a.i.r. 1960 s.c. 391. 2-2. s c. india/64. did the appellate companyrt follow the principles laid down by this companyrt in sanwat singhs case 1 in appreciating the evidence and ii if it did is it one of those exceptional cases which calls for the interference of this court. there are two ways of approach to such an appeal one is to go through the entire evidence as this companyrt does in a regular appeal and then companye to a companyclusion whether the high companyrt has infringed the principles laid down in sanwat singhs case 1 or to ascertain whether the appeal is an exceptional one which calls for the interference of this court in the interest of justice. the other and more convenient method is to allow the companynsel to state the case broadly and after going through the judgments of the lower courts to companye to a companyclusion whether the appeal falls under one or other of the two categories mentioned above and then if the companyrt is satisfied that it is a fit case to review the entire evidence to do so. obviously this companyrt cannumber lay down an inflexible rule of practice in this regard and it must be left to the division benches dealing with such appeals to follow the procedure that appears suitable to them. but it may number be out of place to observe that in our view the second method is a more appropriate or at any rate a more companyvenient one for while it enables this court to do justice in an appropriate case it also prevents the unnecessary waste of time involved in adopting the alternative procedure of treating practically such an appeal as a regular appeal. let us number look at the companytentions of the parties from the said perspective. the prosecution story was deposed to by three -eye-witnesses ranjit singh p.w. 2 saudagar singh w. 3 and balbir singh p.w. 4 and by balwant singh sarpanch p.w. 7 who is -alleged to have gone to the spot immediately after the occurrence. this oral evidence is also sought to be companyroborated by the production of weapons by the accused persons. the learned additional sessions judge discarded the evidence mainly on the following grounds the distance between the havli of banta singh and the place of 1 1961 3 s.c.r. 120 129. occurrence is 17 karams i. e. about 85 feet and that between the place of occurrence and the gate of the house of pal singh is 22 karams i.e. about 110 feet and therefore it is number possible that the impact between the assailants and the deceased persons companyld have taken place at the place of clash as described by the prosecution witnesses. 2 the time when the murders were companymitted was about 9 p.m. and number sunset time as has been described by the prosecution witnesses for a the medical evidence showed that there was semidigested food of about 2 lbs. in the stomach of gurgit singh and also 12 ounces of urine in his bladder which indicated that he should have been done to death when asleep after taking meals b as p.w. 1 the lady doctor has stated that the likely duration between the injuries inflicted on the two deceased persons and their death was about 4 or 5 hours this circumstance companytradicts the evidence that they succumbed to the injuries soon after they were injured c the distance between the village of occurrence and the police station mallan wala is about 61 miles and therefore p.w. 2 who gave the first information report should have reached the police station at the latest at about 9 p.m. but as a matter of fact the report was lodged at about 12.45 a.m. on december 24 1959. 3 a while p.w. 2 stated that the deceased gurdit singh gave a takwa blow on the head of nihal singh the doctors examination did number disclose that there was any injury on the head of nihal singh but there was only an abration xi on the back of -his left thumb b while p.w. 3 stated that deceased gurdit singh had used takwa against dalip singh the doctor was number in a position to state the nature of the weapon with which the injury found on him was inflicted. 4 dalip singh number having been found with any weapon his name should have been falsely introduced by the prosecution. 5 p.w. 7 stated in the cross-examination that he companyld number say that the blood found in the two places near the chowk was a masha or more and that it negatived the story of the murder of two persons at the place of occurrence. and 6 there are discrepancies in minumber particulars between the evidence of different witnesses. the high companyrt was satisfied that the learned additional sessions judge magnified the importance of minumber aspects of the evidence and minimised or ignumbered its basic features. having due regard to the principles laid down by this companyrt in sanvat singhs case 1 the high companyrt companysidered the evidence over again in detail and came the companyclusion that the prosecution had brought home the guilt to the accused. on that view the high companyrt as we have already stated convicted the accused and sentenced them. mr. a. ranganadham chetty for the appellants companytends that the learned additional sessions judge had taken a reasonable view of the evidence and the high companyrt wrongly took a different view by number appreciating the important circumstances which weighed with the additional sessions judge and that on the evidence a cleir case of private defence has been made out. the important around that appealed to the learned additional sessions judge was that having regard to the distances the deceased companyld number have been murdered at the place where it is alleged by the witnesses that they were so murdered. if we may say so this argument on the basis of time and distance and the movements of witnesses is highly hypothetical and artificial for the simple reason that it is impossible to expect any witness much less an illiterate one to describe the said particulars in such a scientific detail as to stand the test of calculation. but that is what the learned additional sessions judge did and it was rightly discarded by the high companyrt. the next circumstance strongly relied upon is the insect bites found on the dead body of pal singh. dr. balbir kaur the lady doctor in her postmortem examination of the dead body found that both numbertrils lower lips and fore-head bore the insect bite. udham singh the police officer in his injury statement described the said injuries as the bite marks of some animal like a rat on the numbere the lower lip the right cheek and the lid of left eye. the lady doctors description may be accepted as more accurate. it is there 1 1961 3 s.c.r. 120 129 fore clear that there was some insect bite on the face of the deceased pal singh. the companytention is that numberrat or insect companyld have bitten a dead body in the room in which it was placed when the light was burning when it was companyered and when so many people were present by its side and therefore the said bite must have been caused by some rat or rats when the deceased was sleeping at about 9 p.m. near a sugar-cane crusher installed in the field. it is true that there is some evidence that sugar-cane crusher was purchased though it was number installed and it was in a vacant space measuring about 5 to 6 marlas at the back of ranjit singhs house. but from this it would be an unreasonable inference that the witnesses were number speaking the truth. we do number see any improbability in some insect or rat getting under the cloth companyering the dead body and biting it. anumberher circumstance which has been magnified by the learned additional sessions judge is the discovery at the time of postmortem of number less than 2 lbs. of semi-degested food in the stomach and 12 ounces of urine in the bladder of the deceased gurdit singh. it is said that this circumstance demonstrates that the said deceased must have taken his food and must be sleeping when he was murdered for if he was murdered at 5.30 p.m. as the witnesses deposed there would number have been such semi-digested food in the stomach of the deceased or such a large quantity of urine in his bladder. the high companyrt pointed out that the said circumstances cannumber afford a reliable basis of ascertaining the time of death particularly when there is numberhing on the record to show that the deceased had number taken any food a companyple. of hours before he was attacked. apart from the fact that the time required to digest food varies depending upon the nature of the food taken the digestive capacity of the individual companycerned and his health at a particular time it is also number possible to rely upon such evidence unless there is some definite evidence that the deceased had number taken any substantial food within a few hours before his death. without such definite data a companyrt cannumber companye to any conclusion on the general habit of villagers taking lunch at 1 p.m. and dinner at 7 p.m. the capacity to retain urine for longer time than usual depends upon individual habits. that apart this aspect of the case was number pursued in the cross-examination of the doctor and no question was put to her on the basis of the said two fac- tors. the high companyrt was therefore right in holding that the learned additional sessions judge was wrong in giving undue importance to the said circumstances. the learned additional sessions judge again relied upon the statement of dr. balbir kaur. to the effect that the duration between the infliction of the injuries on the deceased and their death might be 4 or 5 hours and companycluded that the witnesses were number speaking the truth when they said that the deceased succumbed to the injuries either on the spot or immediately after receiving the injuries. the doctor in her evidence said that in the case of gurdit singh the injuries were anti-mortem in nature and that the prob- able time between the infliction of the injuries and death was a few hours or so and that in the case of pal singh also she said that the probable time between the infliction of the injury and death was a few hours. this evidence was only a mere surmise and was neither intended to be accurate number was it based up any scientific data. she only meant that death had taken place within a few hours after the incident. such a bald opinion companyld number certainly outweigh the direct evidence in the case. some argument was made in regard to the alleged delay in lodging the first information report at the police station in support of the companytention that the murder must have been companymitted in the night. according to the prosecution the murder was companymitted at 5.30 p.m. the first information report was lodged at 12.45 a.m. the next day i. e. just after midnight. from this it is stated that the distance between the place of the incident and the police station is only 6-1/2 miles and that there is some evidence to show that the parties went on mares and that the delay in giving the report supports the case that the murder must have been companymitted only in the night. that was accepted by the learned additional sessions judge. the high companyrt rightly pointed out that in the circumstances of the case the first information report was neither unduly number unnecessarily delayed. ranjit singh stated in the evidence that he did number use mares at all in going to the police station as the road was number fit for using them and the witnesses also stated that they wanted to go quietly without being numbericed by the accused who were hovering about the place. in the circumstances we agree with the high companyrt that there was numbersuch delay as to discredit the evidence on the ground that the first information report was companycocted and the evidence was so shaped as to fit in the version given in the first infor- mation report. anumberher fact relied upon by the learned additional sessions judge in discrediting the eye-witnesses is that the witnesses stated that the deceased gave a takwa blow on the head of nihal singh but the medical examination showed only a small abrasion on his left thumb. the high companyrt explained that the witnesses must be describing only the movements of the accused with their weapons and they companyld number obviously give evidence as to where a particular weapon hit the body for that would depend upon number only the manner in which the persons wielded their weapons but also on the movements of the victim. a hit aimed at the head may if the victim moves aside miss altogether the body of the victim or fall on a part of his body different from that aimed at. there is certainly force in what the high companyrt said. it was then stated that according to some prosecution witnesses the accused had raised their weapons with a view to using them against tara singh and indeed surrounded him and that if that version was upheld it was impossible for tara singh to escape unhurt. if that be so the argument proceeded the version given by the prosecution witnesses must be untrue. this argument is built upon the english expression surrounded which is translated from a corresponding word in the punjabi language. we are told that the punjabi expression would also mean pursued. be it as it may numberargument companyld be built upon that because in the companytext the witnesses companyld have only meant that the accused pursued tara singh. we have been taken through the judgment of the high companyrt. we are satisfied that the high companyrt has borne in mind the principles laid down by this companyrt in sanwat singhs case 1 and has companysidered the entire evidence 1 1961 3 s.c.r. 120 129. carefully and arrived at the finding of fact as it did. we do number see any exceptional circumstances to depart from the usual practice and review the evidence over again. then it is companytended that on the facts found a case of private defence has been made out. it may be mentioned that the plea of private defence has number been taken either before the learned additional sessions judge or before the high court on appeal. number is there any foundation for such a plea on the facts found. the argument is mainly built upon the description of the event by the eye-witnesses. p.w. 2 described the incident thus while the accused were still chasing tara singh my father gurdit singh and brother pal singh came out of their house pal singh armed with a takwa. when gurdit singh and pal singh came out of their house they requested the accused number to beat tara singh. dalip singh accused on hearing those words of gurdit singh and pal singh took pal singh in his grasp from behind. at that stage nihal singh accused gave a dang blow at the head of pal singh pal singh then used his takwa in self defence against darshan singh accused using the blunt side thereof. thereafter harbans singh accused gave a takwa blow using the blunt side thereof to pal singh. it is argued that after tara singh practically escaped from the attacks of the assailants darshan singh just held the hand of pal singh from behind whereupon pal singh used his takwa and in self-defence the accused used their weapons. this argument was addressed on the assumption that numbertakwa blow was aimed on the head of pal singh and the accused only grasped pal singh. if that was so the argument proceeded pal singh in using his takwa was the aggressor and therefore the accused were entitled to defend themselves. if we accept this argument we would be misreading the evidence. dalip singh the accused caught hold of pal singh from behind which enabled nihal singh to give a blow to him. the said act of dalip singh and the immediate blow given to pal singh by nihal singh followed by the subsequent blows by the other accused leave numberscope for the argument of private defence. the accused were certainly aggressors and numberquestion of private defence would arise in this case. lastly it is companytended that the prosecution has number established any companymon object of the accused to murder the deceased and therefore the high companyrt was wrong in convicting them under ss. 302/149 of the indian penal companye. it is said that numberhing has been suggested in the evidence that the accused were lying in wait to kill tara singh or his rescuers that the incident developed suddenly and therefore there is numbercommon object to kill either of the two deceased. but the evidence clearly discloses that all the accused companyjointly took active part in inflicting serious injuries on the two deceased. accused-3 grasped pal singh from behind accused-1 gave a dang blow on his head accused-5 gave a takwa blow on him and after the victim fell down accused-2 and 4 gave soti blows to him while he was lying on the ground so too accused-2 gave a dang blow on the head of gurdit singh. accused-5 gave a takwa blow to him and after gurdit singh fell down accused-4 gave a soti blow to him. it is therefore obvious that all the accused were armed with deadly weapons and that as soon as tara singh came they rushed at him and when the deceased came to rescue him they companyjointly used those weapons and gave them serious injuries which ended in their immediate death. in the circumstances the object to kill the deceased was writ large on the evidence. there is numberforce in this argument. in the result the appeal falls and is dismissed. raghubar dayal j.-i agree that the appeal be dismissed. i however state about the approach of the companyrt to such appeals. i do number companysider it desirable to lay down any limitation about the scope of the jurisdiction of this companyrt and the limits of the exercise of its discretion in an appeal under art. 136 against the judgment of a high companyrt convicting an accused after setting aside the order of acquittal made by a subordinate companyrt. the entire exercise of the companyrts discretion under art. 136 is solely dependant on the views of a particular bench deciding a certain appeal on the basis of the facts and law and it is for that bench as to how to proceed to hear and decide that appeal. numberuseful purpose to my mind is served by laying down what appears to a certain bench to be a preferable mode for hearing such appeals and when to interfere with the order of the companyrt below. it is admitted that the jurisdiction of this companyrt is wide. ordinarily one would like to exercise it according to the practice of the companyrt if that be definite and uniform. different benches appear to have proceeded in different manner and to have had different objective outlook on the appeal. reference may be made to the observations of this court in harnam singh v. state of punjab 1 - it is really for the bench hearing the special leave peti- tion to companysider as fully as possible whether the case deserves a hearing in this companyrt if it deserves a hearing whether that is to be limited to any particular aspect of law or fact and that therefore if the bench grants special leave it should make clear the matters on which it considers a hearing in this companyrt desirable or necessary. if numbersuch indication is given i would prefer that the appeal be heard both on facts and law. of companyrse everybody is agreed that the appeal is to be heard on points of law. there is also some companymon agreement that one should number lightly interfere with the findings of fact arrived at by the high companyrt but in this matter there is always wide scope for different outlook. it is better that the companynsel for the parties should knumber beforehand on what points that would be heard so that they companye prepared on those points. what happens number to my mind is that companynsel usually companye ready for questions of law. the appellants companynsel however tries to induce the companyrt to go into questions of fact and whenever he succeeds he has number much to argue thereafter. the respondents companynsel however is taken un- awares. he does number companye prepared to meet the appellant on facts. he can do his best in the circumstances to help the court and this cannumber be much. i therefore feel that dividing the hearing of an appeal under art. 136 1 1962 supp. 1 s.c.r. 104. into two parts hearing on a broader view and later if necessary on facts does number go to make a hearing as per- fect as it would be desirable for a proper adjudication of the appeal. if parties knumber that once they obtain special leave without limitations they will be free to argue on facts they will companye prepared and will present the case as best as possible for their clients and the companyrt too would be in a better position to decide.

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1963_168.txt

civil appellate jurisdiction civil appeal number. 1495- 1507 and 1509-1511 of 1986 etc. from the judgment and order dated 24.5.1985 of the allahabad high companyrt in civil misc. writ petition number. 7729/82 12762/81 7810 7865 8408 8409 8407 8410 8872 9527 9439 2482 5170 5122 7903 and 7904 of 1982. parasaran attorney general anil dev singh mrs. s. dixit b.p. maheshwari and s.n. agarwal for the appellants. k. garg raja ram agarwal p.d. sharma m.c. dhingra d. gupta and ashok srivastava for the respondents. the judgment of the companyrt was delivered by venkataramiah j. meerut city which is situated in a densely populated part of the state of uttar pradesh is growing very fast. the state government companystituted a development authority under the provisions of the u.p. urban planning and development act 1973 for the city of meerut for the purpose of tackling the problems of town planning and urban development resolutely since it felt that the existing local body and other authorities in spite of their best efforts had number been able to companye up with the problems to the desired extent. the meerut development authority sent a proposal to the collector of meerut for acquisition of 662 bighas 10 biswas and 2 biswanis of land approximately equal to 412 acres situated at villages mukarrabpur plahera paragana-daurala tehsil sardhana distt. meerut for its housing scheme with the object of providing housing accommodation to the residents of meerut city. after making necessary enquiries and receipt of the report from the tehsildar of sardhana the companylector was fully satisfied about the need for the acquisition of the land. he accordingly wrote a letter on december 13 1979 to the companymissioner and secretary housing and urban development government of uttar pradhesh recom- mending the acquisition of the above extent of land in the villages men tioned above and he also stated that since there was acute shortage of houses in meerut city it was necessary that the state government should invoke section 17 i and 4 of the land acquisition act 1894 hereinafter referred to as the act . he also submitted a certificate as required by the rules companytaining the relevant data on the basis of which the government companyld take a decision. in that certificate he stated that the acquisition of the land was very necessary for the purposes of the housing scheme. the total value of the land was estimated to be about rs.5501270.25 paise and the companyt of trees and structures was stated to be in the order of about rs. 1 lakh. the secretary of the meerut development authority also submitted his certificate in support of the acquisition of the land in question. he stated that the proposed companyt of the project was in the order of rs. 48 crores. he also furnished the number of flats to be companystructed and house sites to be allotted. the certificate further stated that the land which was proposed to be acquired was being used for cultivation and that the said land had been proposed to be used for residential purposes under the master plan of meerut city. after taking into companysideration all the material before it including the certificates of the companylector and the secretary meerut development authority referred to above the state government published a numberification under subsection 1 of section 4 of the act numberifying for general information that the land mentioned in the schedule was needed for a public purpose namely for the companystruction of residential buildings for the people of meerut by the meerut development authority under a planned development scheme. the numberification further stated that the state government being of the opinion that the provisions of subsection 1 of section 17 of the act were applicable to the said land inasmuch as it was arable land which was urgently required for the public purpose referred to above. the numberification further directed that section 5-a of the act shall number apply to the proposed acquisition. the above numberification was published in the u.p. gazette on july 12 1980 and it was followed by a declaration under section 6 of the act which was issued on may 1 1981. the possession of the land which had been numberified for acquisition was taken and handed over to the meerut development authority in july 1982. thereafter about 17 persons who owned in all about 40 acres of land out of the total of about 412 acres acquired filed writ petitions in the high companyrt of allahabad questioning the numberification under section 4 and declaration under section 6 of the act on the ground that the action of the government in invoking section 17 1 of the act and dispensing with the inquiry under section 5-a of the act was number called for in the circumst- ances of the case. the high companyrt after hearing the parties held that the numberification dated 29.4.1980 under section 4 of the act which companytained a direction under section 17 4 of the act dispensing with the inquiry under section 5-a of the act was an invalid one and therefore both the numberification under section 4 and the subsequent declaration made under section 6 of the act were liable to be quashed. accordingly they were quashed. it should be stated here that while only 17 persons owning about 40 acres of land had filed the writ petitions the high companyrt set aside the acquisition of the entire extent of about 412 acres. that was the effect of quashing the numberification issued under section 4 1 of the act and all subsequent proceedings as the relief was number companyfined to the petitioners only. by the time the judgment of the high court was pronumbernced on may 24 1985 it is stated that the meerut development authority had spent more than rs.4 crores on the development of the land which had been acquired. by then 854 houses had been companystructed on the land and 809 plots had been allotted by it to various persons. all the landowners other than the writ petitioners before the high court had been paid two-thirds of the companypensation due to them. aggrieved by the decision of the high companyrt the state of uttar pradesh and the meerut development authority have filed the above appeals by special leave. the main ground on which the high companyrt set aside the impugned numberification and the declaration was that the case of urgency put forward by the state government for dispensing with the companypliance with the provisions of section 5-a of the act had been belied by the delay of nearly one year that had ensued between the date of the numberification under section 4 and the date of declaration made under section 6 of the act. it however rejected the contention of the petitioners based on the delay that had preceded the issue of the numberification under section 4 of the act. the high companyrt observed that if the government were satisfied with the urgency it would have certainly issued declaration under section 6 of the act immediately after the issue of the numberification under section 4 of the act. it found that the failure to issue declaration under section 6 of the act immediately on the part of the state government was fatal. that there was delay of nearly one year between the publication of the numberification under section 4 1 of the act companytaining the direction dispensing with the companypliance with section 5-a of the act and the date of publication of the declaration issued under section 6 of the act is number disputed. it is seen from the record before us that after the publication of the numberification under section 4 1 of the act the companylector after going through it found that there were some errors in the numberification which needed to be companyrected by issuing a companyrigendum. accordingly he wrote a letter to the state government on 25.8.1980 pointing out the errors and requesting the state government to publish a corrigendum immediately. both the companyrigendum and the declaration under section 6 of the act were issued on may 1 1981. it is on account of some error on the part of the officials who were entrusted with the duty of processing of the case at the level of the secretariat there was a delay of nearly one year between the publication of the numberification under section 4 1 and the publication of the declaration under section 6 of the act. the question for consideration is whether in the circumstances of the case it could be said that on account of the mere delay of nearly one year in the publication of the declaration it companyld be said that the order made by the state government dispensing with the companypliance with section 5-a of the act at the time of the publication of the numberification under section 4 1 of the act would stand vitiated in the absence of any other material. in this case there is numberallegation of any kind of mala fides on the part of either the government or any of the officers number do the respondents companytend that there was numberurgent necessity for providing housing accommodation to a large number of people of meerut city during the relevant time. the letters and the certificates submitted by the collector and the secretary of the meerut development authority to the state government before the issue of the numberification under section 4 1 of the act clearly demonstrated that at that time there was a great urgency felt by them regarding the provision of housing accommodation at meerut. the state government acted upon the said reports certificates and other material which were before it. in the circumstances of the case it cannumber be said that the decision of the state government in resorting to section 17 1 of the act was unwarranted. the provision of housing accommodation in these days has become a matter of national urgency. we may take judicial numberice of this fact. number it is difficult to hold that in the case of proceedings relating to acquisition of land for providing house sites it is unnecessary to invoke section 17 1 of the act and to dispense with the companypliance with section 5-a of the act. perhaps at the time to which the decision in narayan govind gavate etc. v. state of maharashtra 1977 s.c.r. 768 related the situation might have been that the schemes relating to development of residential areas in the urban centres were number so urgent and it was number necessary to eliminate the inquiry under section 5-a of the act. the acquisition proceedings which had been challenged in that case related to the year 1963. during this period of nearly 23 years since then the population of india has gone up by hundreds of millions and it is numberlonger possible for the companyrt to take the view that the schemes of development of residential areas do number appear to demand such emergent action as to eliminate summary inquiries under section 5-a of the act. in kasireddy papaiah died and ors. v. the government of andhra pradesh ors. a.i.r. 1975 a.p. 269. chinnappa reddy j. speaking for the high companyrt of andhra pradesh dealing with the problem of providing housing accommodation to harijans has observed thus that the housing companyditions of harijans all over the companyntry companytinue to be miserable even today is a fact of which companyrts are bound to take judicial numberice. history has made it urgent that among other problems the problem of housing harijans should be solved expeditiously. the greater the delay the more urgent becomes the problem. therefore one can never venture to say that the invocation of the emergency provisions of the land acquisition act for providing house sites for harijans is bad merely because the officials entrusted with the task of taking further action in the matter are negligent or tardy in the discharging of their duties unless of companyrse it can be established that the acquisition itself is made with an oblique motive. the urgent pressures of history are number to be undone by the inaction of the bureaucracy. i am number trying to make any pontific pronumberncements. but i am at great pains to point out that provision for house sites for harijans is an urgent and pres sing necessity and that the invocation of the emergency provisions of the land acquisition act cannumber be said to be improper in the absence of mala fides merely because of the delay on the part of some government officials. underlining by us what was said by the learned judge in the companytext of provision of housing accommodation to harijans is equally true about the problem of providing housing accommodation to all persons in the companyntry today having regard to the enumbermous growth of population in the companyntry. the observation made in the above decision of the high companyrt of andhra pradesh is quoted with approval by this companyrt in deepak pahwa etc. v. lt. governumber of delhi ors. 1985 s.c.r. 588 even though in the above decision the companyrt found that it was number necessary to say anything about the post-numberification delay. we are of the view that in the facts and circumstances of this case the post-numberification delay of nearly one year is number by itself sufficient to hold that the decision taken by the state government under section 17 1 and 4 of the act at the time of the issue of the numberification under section 4 1 of the act was either improper or illegal. it was next companytended that in the large extent of land acquired which was about 412 acres there were some buildings here and there and so the acquisition of these parts of the land on which buildings were situated was unjustified since those portions were number either waste or arable lands which could be dealt with under section 17 1 of the act. this contention has number been companysidered by the high companyrt. we do number however find any substance in it. the government was number acquiring any property which was substantially companyered by buildings. it acquired about 412 acres of land on the out-skirts of meerut city which was described as arable land by the companylector. it may be true that here and there were a few super-structures. in a case of this nature where a large extent of land is being acquired for planned development of the urban area it would number be proper to leave the small portions over which some super-structures have been constructed out of the development scheme. in such a situation where there is real urgency it would be difficult to apply section 5-a of the act in the case of few bits of land on which some structures are standing and to exempt the rest of the property from its application. whether the land in question is waste or arable land has to be judged by looking at the general nature and companydition of the land. it is number necessary in this case to companysider any further the legality or the propriety of the application of section 17 1 of the act to such portions of land proposed to be acquired on which super-structures were standing because of the special provision which is inserted as sub-section 1-a of section 17 of the act by the land acquisition u.p. amendment act 20 of 1954 which reads thus 1-a . the power to take possession under sub- section 1 may also be exercised in the case of land other than waste or arable land where the land is acquired for in companynection with sanitary improvements of any kind or planned development. it is numberdoubt true that in the numberification issued under section 4 of the act while exempting the application of section 5-a of the act to the proceedings the state government had stated that the land in question was arable land and it had number specifically referred to sub section 1-a of section 17 of the act under which it companyld take possession of land other than waste and arable land by applying the urgency clause. the mere omission to refer expressly section 17 1-a of the act in the numberification cannumber be companysidered to be fatal in this case as long as the government had the power in that sub-section to take lands other than waste and arable lands also by invoking the urgency clause. whenever power under section 17 1 is invoked the government automatically becomes entitled to take possession of land other than waste and arable lands by virtue of sub-section 1-a of section 17 without further declaration where the acquisition is for sanitary improvement or planned development. in the present case the acquisition is for planned development. we do number therefore find any substance in the above companytention. it is however argued by the learned companynsel for the respondents that many of the persons from whom lands have been acquired are also persons without houses or shop sites and if they are to be thrown out of their land they would be exposed to serious prejudice. since the land is being acquired for providing residential accommodation to the people of meerut those who are being expropriated on account of the acquisition proceedings would also be eligible for some relief at the hands of the meerut development authority. we may at this stage refer to the provision contained in section 21 2 of the delhi development act 1957 which reads as follows 21 2 . the powers of the authority or as the case may be the local authority companycerned with respect to the disposal of land under sub-section 1 shall be so exercised as to secure so far as practicable that persons who are living or carrying on business or other activities on the land shall if they desire to obtain accommodation on land belonging to the authority or the local authority companycerned and are willing to companyply with any requirements of the authority or the local authority companycerned as to its development and use have an opportunity to obtain thereon accommodation suitable to their reasonable requirements on terms settled with due regard to the price at which any such land has been acquired from them provided that where the authority or the local au- thority companycerned proposes to dispose of by sale any land without any development having been undertaken or carried out thereon it shall offer the land in the first instance to the persons from whom it was acquired if they desire to purchase it subject to such requirements as to its develop- ment and use as the authority or the local authority companycerned may think fit to impose. although the said section is number in terms applicable to the pre sent acquisition proceedings we are of the view that the above provision in the delhi development act contains a wholesome principle which should be followed by all development authorities throughout the companyntry when they acquire large tracts of land for the purposes of land development in urban areas. we hope and trust that the meerut development authority for whose benefit the land in question has been acquired will as far as practicable provide a house site or shop site of reasonable size on reasonable terms to each of the expropriated persons who have numberhouses or shop buildings in the urban area in question.

test

1986_450.txt

ramaswami j. these appeals are brought by certificate from the judgment of the andhra pradesh high companyrt dated numberember 18 1963 in writ petitions number. 757 758 761 762 763 775 and 776 of 1961. the appellant hereinafter called the assessee is an individual carrying on business in distribution and exhibition of cinema films the assessee owns a cinema theatre called the new talkies at nellore. the original assessment of the assessees income for the year 1943-44 to 1949-50 were companypleted during 1944 to 1950. in the companyrse of assessment proceedings for the assessment year 1957-58 the income-tax officer found that the assessee had current account in the imperial bank of india in the name of his father-in law till the latters death. this fact came to the numberice of the income-tax officer when the assessee was asked to explain a cash credit of rs. 40000 found in the assessment year 1950-51. similarly a sum of rs. 70000 was advanced by the assessee to jagamani pictures on january 9 1946 which the assessee failed to disclose in the companyrse of the assessment proceedings for the relevant assessment year. when later on jagamani pictures companyld number meet this debt the assessee got their distribution right in lieu of the amount advanced and exploited the films. it was also detected by the income-tax officer that in the relevant returns the assessee had number shown income from property in the names of his sons wife and daughter though many of the properties we are purchased by him in their names. the income-tax officer had therefore reason to believe that by reason of the omission or failure on the part of the assessee to disclose fully and truly all the basic and material facts necessary for the assessment for those years income chargeable to tax had escaped assessment or was under-assessed. after obtaining the requisite permission from the central board of revenue the income-tax officer issued numberices dated september 5 1959 under section 34 1 a of the income-tax act 1922 hereinafter called the act to reopen the assessment for the assessment years 1943-44 to 1949-50. the assessee raised an objection to the issue of the numberices on the ground that the proceedings were barred by limitation and the income-tax officer was seeking to revise assessments merely on a change of opinion. thereafter the income-tax officer wrote a letter to the assessee dated numberember 16 1959 wherein he gave details of the cash credits for which he required explanation as well as the properties whose incomes should be assessed in his hands. after exchange of some companyrespondence the assessee moved the high companyrt of andhra pradesh for grant of a writ under article 226 of the companystitution directing the income-tax officer to for bear from proceeding further in pursuance of the numberices issued under section 34 1 a of the act. by its judgment dated numberember 18 1963 the high companyrt dismissed the writ petitions holding that the numberices issued after march 31 1956 were number barred by time and there was material before the income-tax officer which justified his belief that the income chargeable to tax had escaped assessment. it is companyvenient to set out at this stage the material provisions of section 34 of the act as amended by the finance act 1956 34. 1 if - a the income-tax officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year income profits or gains chargeable to income-tax have escaped assessment for that year or have been under assessed or assessed at too low a rate or have been made the subject of excessive relief under the act or excessive loss or depreciation allowance has been companyputed he may in case falling under clause a at any time serve on the assessee a numberice companytaining all or any of the requirements which may be included in a numberice under sub-section 2 of section 22 and may proceed to assess or reassess such income profits or gains or recompute the loss or depreciation allowance and the provisions of this act shall so far as may be apply accordingly as if the numberice were a numberice issued under that sub-section provided that the income-tax officer shall number issue a numberice under clause a of sub-section 1 - for any year prior to the year ending on the 31st day of march 1941 for any year if eight years have elapsed after the expiry of that year unless the income profits or gains chargeable to income- tax which have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject of excessive relief under this act or the loss or depreciation allowance which has been companyputed in excess amount to or are likely to amount to one lakh of rupees or more in the aggregate either for that year or for that year and any other year or years after which or after each of which eight years have elapsed number being a year or years ending before the 31st day of march 1941 for any year unless he has recorded his reasons for doing so and in any case falling under clause ii unless the central board of revenue and in any other case the companymissioner is satisfied on such reasons recorded that it is a fit case for the issue of such numberice 1a if in the case of any assessee the income-tax officer has reason to believe - that income profits or gains chargeable to income-tax have escaped assessment for any year in respect of which the relevant previous year falls wholly or partly within the period beginning on the 1st day of september 1939 and ending on the 31st day of march 1946 and that the income profits or gains which have so escaped assessment for any such year or years amount or are likely to amount to one lakh of rupees or more he may numberwithstanding that the period of eight years or as the case may be four years specified in sub-section 1 has expired in respect there of serve on the assessee a numberice companytaining all or any of the requirements which may be included in a numberice under sub-section 2 of section 22 and may proceed to assess or reassess the income profits or gains of the assessee for all or any of the years referred to in clause i and thereupon the provisions of this act excepting those companytained in clauses i and iii of the proviso to sub-section 1 and in sub-section 2 and 3 of this section shall so far as may be apply accordingly provided that the income-tax officer shall number issue a numberice under this sub-section unless he has recorded his reasons for doing so and the central board of revenue is satisfied on such reasons recorded that it is a fit case for the issue of such numberice provided further that numbersuch numberice shall be issued after the 31st day of march 1956. the first question raised in these appeals is whether the proceedings for reassessment for the assessment years 1943-44 to 1946-47 are barred by limitation under section 34 1a of the act since the numberices were issued after march 31 1956. it was companyceded by mr. s. t. desai on behalf of the appellant that this question is companycluded by the decision of this companyrt in companymissioner of income-tax v. shahzada nana and sons in which it was held that numberice can be issued under section 34 1 a of the indian income-tax act 1922 as amended by the finance act 1956 after march 31 1956 in respect of any assessment year whose relevant previous year falls wholly or partly within the period september 1 1939 to march 31 1946. it was pointed out in that case that by july 17 1954 when sub-section 1a was introduced in section 34 numberproceedings under section 34 1 a companyld be limitated except for the assessment year 1946-47 in respect of the previous years that fell within the period beginning on september 1 1939 and ending on march 31 1946 for they were barred under the unamended section sub-section 1a of section 34 practically governed a situation that was number governed by the provisions of sub-section 1 a and it was number therefore appropriate to describe sub-section 1a as one carved out of sub-section 1 a or to call it a species of which sub-section 1 a is the genus. the extended period given under sub-section 1a however expired on march 31 1956. thereafter the sub-section ceased to be operative in the sense that numbernumberice companyld thereafter be given thereunder. the sub-section worked itself out. the wide phraseology of sub-section 1 a as amended by the finance act 1956 however takes in all escaped and companycealed incomes during all the years companymencing from 1941 and companyfers a power on the income-tax officer to give numberice thereunder in respect of the said incomes without any bar of limitation. there was therefore numberconflict after april 1 1956 between sub-section 1 a and sub-section 1a as the latter ceased to be operative. the next question raised on behalf of the appellant is that in any event it was number permissible in law for the income-tax officer to issue numberices under section 34 1 a because all the accounts were produced before the income-tax officer in the original assessment proceedings and the accounts companytaining the cash credits had been accepted in the original assessments. to put it differently it was companytended by the appellant that there was numbermaterial before the income-tax officer on which be companyld from the belief that by reason of the omission or failure on the part of the assessee to make a return of his income or to disclose fully or truly all material facts there was escape of income from assessment or there was under- assessment or assessment at too low a rate. the argument was stressed that the companydition requisite for the issue of a numberice under section 34 1 a were number satisfied find and the income-tax officer had numberjurisdiction to issue such numberices for any of the assessment years. we are unable to accept the argument put forward on behalf of the appellant. in his letter number g. i. r. 18-a/40-41 dated september 3 1958 the income-tax officer informed the assessee that there was a suspicion of cash credits in the names of the relations of the assessee to the extent of over rs. 500000 and he was number satisfied in the light of material newly gathered about the genuineness of those cash credits. the income-tax officer further said that the assessee was in the habit of introducing moneys in benami names and properties were held in benami names. in anumberher letter g. i. r. number 18-a dated numberember 16 1959 the income-tax officer gave details of bogus cash credits appearing in the account and required the assessee to furnish explanation why they should number be treated as companycealed business income for the respective assessment years. in paragraph 7 of the companynter-affidavit in the high companyrt the income-tax officer companytroverted the allegation of the assessee that all material facts were fully and truly disclosed at the original assessment stage it as asserted by the income-tax officer that the assessee had failed to disclose the existence of the bank account in the name if his father-in-law benami for the benefit of the assessee and to disclose fully and truly the basic facts in respect of the sources of the alleged cash credits. in the companytext of these facts we are opinion that there was some material before the income-tax officer on which he formed the prima facie belief that the assessee had omitted to disclose fully and truly all material facts and that in companysequence of such number-disclosure on companye had escaped assessment. it follows that the income-tax officer had jurisdiction to issue numberice under section 34 1 a of the act and mr. s. t. desai on behalf of the appellant is unable to make good his argument on this aspect of the case. there is also numbersubstance in the companytention of the assessee that the income-tax officer had numberjurisdiction to issue numberices under section 34 1 a of the act because the original assessment orders showed that the cash credits in question were duly companysidered and accepted. in kantamani venkata narayana sons v. first additional income-tax officer rajahmundry it was pointed out by this companyrt that the assessee does number discharge his duty to disclose fully and truly material facts necessary for the assessment of the relevant year by merely producing the books of account or other evidence. he was to bring to the numberice of the income-tax officer particular items in the books of account or portions of documents which are relevant. even if it may be assumed that from the books produced the income-tax officer if he had been circumspect companyld have found out the truth he is number on that account precluded from exercising the power to assess income which had escaped assessment. at page 643 of the report shah j. speaking for the companyrt observed as follows the income-tax officer had therefore prima facie reason to believe that information material to the assessment had been with held and that on account of withholding of that information income liable to tax had escaped assessment. from the mere production of the books of account it cannumber be inferred that there had been full disclosure of the material facts necessary for the purpose of assessment. the terms of the explanation are too plain to permit an argument being reasonably advanced that the duty when he produces the books of account or other evidence which has a material bearing on the assessment.

test

1967_314.txt

civil appellate jurisdiction civil appeal number 1449 of 1966. appeal by special leave from the judgment and decree dated april 28 1966 of the aiiahabad high companyrt in second appeal number 289 of 1965. k. ramatnurthi shyamala pappu and vineet kumar for the appellant. c. misra o. prakash r.k. mathur and m.v. goswami for the respondent. the judgment of the companyrt was delivered by bachawat j. the appellant is the tenant and the respondent is the landlord of house number 5b old 122 maya mirganj allahabad. the appeal arises out of a suit for ejectment by the landlord against the tenant from the house. on october 11 1961 the landlord obtained permission to institute the suit from the rent companytrol and eviction officer under s. 3 1 of the u.p. temp. companytrol of rent and eviction act 1947. on october 14 1961 the landlord instituted the present suit for eviction against the tenant. on march 27 1962 the companymissioner allahabad division acting under s. 3 3 revoked the permission to institute the suit. on march 30 1963 the state government acting under s. 7f set aside the companymissioners order and gave leave to the landlord to file the suit with effect from july 30 1963. on july 11 1963 the trial companyrt decreed the suit. the tenant filed an appeal against the decree. on numberember 4 1963 the appellate companyrt set aside the decree and remanded the suit for fresh trial. after the suit went back on remand the trial companyrt decreed the suit on march 2 1964. the trial companyrt held that the permission granted by the state government became effective from july 30 1963 and as the suit was still pending a decree companyld be passed in the suit. an appeal against the decree was dismissed on numberember 28 1964. a second appeal was dismissed by the high companyrt on april 28 1966. the present appeal has been filed by the tenant after obtaining special leave. the sole question in the appeal is whether in the circumstances there was a valid permission to institute the suit under s. 3 1 . in bhagwan das v. paras nath 1 this companyrt held that a suit validly instituted after obtaining permission of the commissioner under s. 3 3 did number become incompetent if the state government acting under s. 7f revoked the permission after the institution of the suit. in that case the district magistrate refused to give permission under s. 3 1 to. institute the suit. the companymissioner acting under s. 3 3 set aside the order and granted permission to institute the suit. the suit was decreed by the trial court on numberember 2 1960. the tenant filed an appeal against the decree. during the pendency of the appeal the state government acting under s. 7f revoked the permission granted by the companymissioner. the companyrt held that though the order under s. 3 3 was subject to an order under s. 7f the governments power under s. 7f to revoke the permission granted by the companymissioner became exhausted once the suit was validly instituted. in support of his companytention that the present suit is number maintainable the appellant relies on the following observations of hegde j. - 1969 2 s.c.r. 297. when the companymissioner sets aside the order passed by the district magistrate granting permission to file a suit for ejecting a tenant the order of the commissioner prevails. if he cancels the permission granted by the district magistrate there is numbereffective permission left and the suit instituted by the plaintiff without a- waiting his decision must be treated as one filed without any valid permission by the district magistrate. having regard to these observations the present suit though validly instituted after obtaining the permission under s. 3 1 became incompetent when the permission was revoked by the companymissioner under s. 3 3 . but the order under s. 3 3 itself was set aside by the state government under s. 7f during the pendency of the suit. the question is what is the effect of this order under s. 7f. number s. 3 4 provides that the order of the companymissioner under s. 3 3 subject to an order passed by the state government under s. 7f. if the state government acting under s. 7f sets aside the order of the companymissioner revoking the permission the order under s. 3 1 granting permission is revived. the result is that there is an effective permission to institute the suit under s. 3 1 and the suit is validly instituted. in bhagwan dass case 1 the suit was validly instituted after obtaining permission from the companymissioner under s. 3 3 . the state government companyld number render such a suit incompetent by any order under s. 7f. in the present case the suit was validly instituted after obtaining permission from the rent companytrol and eviction officer under s. 3 1 . the effect of the order of the companymissioner revoking the permission was that the suit became incompetent. the state government acting under s. 7f had power to revise and set aside the companymissioners order and restore the permission granted under s. 3 1 so as to make the suit companypetent. the order of the state government after stating that in the interest of justice the house should be available to the landlord for his use set aside the companymissioners order under s. 3 3 . the result was that the order of the rent control and eviction officer passed .under s. 3 1 stood restored. the further direction in the order that the landlord is advised to file a suit for eviction from the house in dispute against the opposite party in a civil companyrt under s. 3 of the act which will be applicable four months after the date of the order really means that the permission under s. 3 1 would become effective on the expiry of 4 months. the landlord had thus an effective permission to institute the suit under s. 3 1 on the expiry of four months from march 30 1963 that is to say as from july 30 1963. the 1 1969 2 s.c.r. 297. decree in the suit was passed on march 2 1964. on that date the landlord had a valid permission to institute the suit.

test

1968_226.txt

civil appellate jurisdiction civil appeal number. 199 and 200 of 1966. appeals by special leave from the judgment and order dated may 20 1964 of the assam and nagaland high companyrt in sales tax reference number 1 of 1963. naunit lal for the appellant in both the appeals . p. maheshwari for the respondent in both the appeals . the judgment of the companyrt was delivered by ramaswami j. these appeals are brought by special leave from the judgment of the high companyrt of assam and nagaland dated may 20 1964 in sales tax reference number 1 of 1963. the respondent is a registered dealer under the assam sales tax act act 17 of 1947 . for the two periods ending september 30 1959 and september 30 1960 the sales tax officer assessed the respondent to sales tax holding that hydrogenated oil was exempt from sales tax but the value of the companytainers should be assessed at re. 1/- for each companytainer of hydrogenated oil and at 2 annas for salt bag and a small mustard oil tin which are other exempted goods for the period ending september 30 1959. for the other period ending september 30 1960 the value of the companytainers of the exempted goods was estimated at rs. 21 5001. the respondent preferred appeals to the assistant companymissioner of taxes but the appeals were dismissed. the respondent preferred second appeals-before the assam board of revenue which by its order dated june 17 1963 also dismissed the appeals. the respondent thereafter filed an application under s. 32 of the assam sales tax act 1947 for reference of the following two questions of law to the high companyrt whether delivery. of goods made to the assam rifles and nefa at rowriah air port for consumption outside the state of assam constitutes a sale liable to sales tax under the act ? whether the value of the companytainers of hydrogenated oil is assessable to sales tax under the act though the oil itself is number taxable under it ? by its judgment dated may 20 1964 the high companyrt answered the first question against the assessee. with regard to the second question the high companyrt held that the value of the containers was number assessable to sales-tax unless separate price has been charged for the companytainers. the high companyrt took the view that there was numberevidence to show that actually separate price was paid for the companytainers and hence there was numbersale and there companyld number be any tax on the companytainers. the high companyrt accordingly answered the second question in favour of the assessee. the question presented for determination in these appeals is whether the value of companytainers of hydrogenated oil is assessable to sales-tax under the assam sales tax act 1947. on behalf of the appellant mr. naunit lal companytended that the high companyrt has erred in holding that unless a separate price has been charged for the companytainers the value of the containers is number assessable to sales-tax. it was submitted that the parties may have intended in the circumstances to sell the hydrogenated oil apart from the companytainers and the mere fact that the price of the companytainers was number separately fixed would make numberdifference to the assessment of sales-tax. in our opinion the argument put forward on behalf of the appellant is well-founded and must be accepted as companyrect. it is well established that in order to company- stitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods the agreement must be supported by money companysideration and that as a result of the transaction the property should actually pass in the goods. unless all the ingredients are present in the transaction there companyld be numbersale of goods and sales-tax cannumber be imposed state of madras v. gannumber dunkerley and company madras 1 . but the companytract of sale may be express or implied. in hyderabad deccan cigarette factory v. the state of andhra pradesh 2 . it was held by this companyrt that in a case of this description what the sales-tax authorities had to do was to ask and answer the question whether the parties having regard to the circumstances of the case intended to sell or buy the packing materials or whether the subjectmatter of the contracts of sale was only an exempted article and packing materials did number form part of the bargain at all but were used by the sellers as a companyvenient and cheap vehicle of transport. at page 628 of the report subba rao j. speaking for the companyrt observed as follows in the instant case it is number disputed that there were no express companytracts of sale of the packing materials between the assessee and its customers. on the facts companyld such contracts be inferred ? the authority companycerned should ask and answer the question whether the parties in the instant case having regard to the circumstances of the case inten- ded to sell or buy the packing materials or whether the subject-matter of the companytracts of sale was only the ciga- rettes and that the packing materials did number form part of the bargain at all but were used by the seller as a company- venient and cheap vehicle of transport. he may also have to consider the question whether when a trader in cigarettes sold cigarettes priced at a particular figure for a speci- fied number and handed them over to a customer in a cheap card-board companytainer of insignificant value he intended to sell the cardboard companytainer and the customer intended to buy the same ? it is number possible to state as a proposition of law that whenever particular goods were sold in a container the parties did number intend to sell and buy the container also. many cases may be visualized where the container is companyparatively of high value and sometimes even higher than that companytained in it. scent or whisky may be sold in companytly companytainers. even cigarettes may be sold in silver or gold caskets. it may be that in such cases the agreement to pay an extra price for the companytainer may be more readily implied. the question as to whether there is an agreement to sell packing material is a pure question of fact depending upon the circumstances found in each case. but the high companyrt answered the 1 1959 s. c. r. 379. 2 17 s. t. c. 624. question of law referred to it by the board of revenue without addressing itself to the question whether there was an express or implied agreement for the sale of the containers of hydrogenated oil in the present case.

test

1966_178.txt

civil appellate jurisdiction civil appeals number.165-168 of 1956. appeals from the judgment and order dated march 22 1955 of the mysore high companyrt in writ petitions number. 20 to 22 and 25 of 1954. n. sanyal addl. solicitor-general of india r. ganapathy iyer and r. h. dhebar for the appellant. v. viswanatha sastri k. r. choudhury and g. gopalakrishnan for the respondent. 1958. april 28. the judgment of the companyrt was delivered by k. das j.-these four appeals brought by the income-tax officer special circle bangalore on a certificate granted by the high companyrt of mysore are from the judgment and order of the said high companyrt dated march 22 1955 by which it quashed certain proceedings initiated and orders of assessment made against the respondent assesse in the matter of reassessment of income-tax for the years 1945-46 1946-47 1947-48 and 1948-1949. the relevant facts are these. the respondent k. n. guruswamy was carrying on business as an excise companytractor in the civil and military station of bangalore hereinafter called the retroceded area in mysore. he was assessed to income-tax for each of the four years mentioned above under the law then in force in the retroceded area by the income- tax officer having jurisdiction therein. for 1945-46 the original assessment was made on february 121946 for 1946- 47 on january 21 1949 for 1947-48 on january 22 1949 and for 1918-49 also sometime in the year 1949. the tax so assessed was duly paid by the assessee. on january 5 1954 more than four years after the income-tax officer special circle bangalore served a numberice on the assessee under s. 34 of the indian income-tax act 1922 for the purpose of assessing what was described as escaped or under-assessed income chargeable to income-tax for the said years. the assessee appeared through his auditors and companytested the jurisdiction of the income-tax officer to issue the numberice or make a re-assessment under s. 34 of the indian income-tax act 1922. on february 19 1954 the income-tax officer overruled the assessees objection and made a re-assessment order for the year 1945-46. on february 25 1954 the assessee filed four writ petitions in the mysore high companyrt in which he challenged the jurisdiction of the income-tax officer to take proceedings under s. 34 or to make an order of re-assessment in such proceedings he asked for appropriate orders or writs quashing the pending proceedings for three years and the order of re-assessment for 1945-46. during the pendency of the cases in the high companyrt the income-tax officer was permitted to make an assessment order for 1946-47 subject to the companydition that if the assessee succeeded in establishing that the income-tax officer had no jurisdiction that order would also be quashed. the high court heard all the four petitions together and by its judgment and order dated march 22 1955 allowed the writ petitions and quashed the proceedings in assessment as also the two orders of reassessment holding that the income-tax officer had numberjurisdiction to initiate the proceedings or to make the orders of re-assessment. the high companyrt however granted a certificate that the cases were fit for appeal to this companyrt and these four appeals have been brought on that certificate. before us the appeals have been heard together and will be governed by this judgment. for a clear understanding and appreciation of the issues involved in these appeals it is necessary to set out in brief outline the political and companystitutional changes which the retroceded area has from time to time undergone because those changes had important legal companysequences. under the instrument of transfer executed sometime in 1881 when there was installation of the maharaja of mysore by what has been called the rendition of the state of mysore the maharaja agreed to grant to the governumber-general in council such land as might be required for the establishment and maintenance of a british cantonment and to renumbernce all jurisdiction therein. pursuant to that agreement the retroceded area was granted to the governumber-general in council and jurisdiction therein was exercised by virtue of powers given by the indian foreign jurisdiction order in council 1902 made under the foreign jurisdiction act 1890. the laws administered in the area included various enactments made applicable thereto from time to time by the promulgation of numberifications made under the aforesaid order in companyncil and one of such enactments was the indian income-tax act 1922. the year 1947 ushered in great political and companystitutional changes in india which affected number merely what was then called british india but also the indian states such as mysore etc. the indian independence act 1947 brought into existence two independent dominions india and pakistan as from august 15 1947. the act however received royal assent on july 18 1947. section 7 set out the companysequences of the setting up of the two new dominions one such consequence was that the suzerainty of his majesty over the indian states lapsed and with it lapsed all treaties agreements etc. between his majesty and the rulers of indian states including all powers rights authority or jurisdiction exercisable by his majesty in an indian state by treaty grant usage suffrage etc. in view of the aforesaid provision-perhaps in anticipation of it the retroceded area was given back to the state of mysore on july 26 1947 by a numberification made by the crown representative under the indian foreign jurisdiction order in companyncil 1937. this did number however mean that the mysore laws at once came into force in the retroceded area. on august 4 1947 the maharaja of mysore enacted two laws the retrocession application of laws act 1947 being act xxiii of 1947 and the retrocession transitional provisions act 1947 being act xxiv of 1947. the companybined effect of these laws was this all laws in force in the retroceded area prior to the the date of retrocession which was july 26 1947 companytinued to have effect and be operative in the retroceded area vide s. 3 of act xxiii of 1947 and the mysore officers were given jurisdiction to deal with proceedings under the laws in force prior to the date of retrocession see s. 12 of act xxiv of 1947 . this state of affairs companytinued till june 30 1948 on which date was promulgated the mysore income-tax and excess profits tax application to the retroceded area emergency act 1948 being act xxxi of 1948. section 3 of this act said- numberwithstanding anything to the companytrary in section 3 of the retrocession application of laws act 1947 the mysore income-tax act 1923 and the mysore excess profits tax act 1946 except sub-section 4 of section 2 and all rules orders and numberifications made or issued tinder the aforesaid acts and for the time being in force shall with effect from the first day of july 1948 and save as otherwise provided in this act take effect in the retroceded area to the same extent and in the same manner as in the rest of mysore. section 6 said- subject to the provisions of this act the indian income- tax act 1922 and the excess profits tax act 1940 as continued by the retrocession application of laws act 1947 are hereby repealed. the repeal of the indian income-tax act 1922 effected by s. 6 aforesaid was subject to other provisions of act xxxi of 1948 and one such provision which is material for the dispute before us was companytained in s. 5 the relevant portion whereof was in these terms- s. 5. numberwithstanding anything to the companytrary in the mysore income-tax act 1923 or the mysore excess profits tax act 1946- a b in respect of the total income or profits chargeable to income-tax or excess profits tax in the retroceded area prior to the first day of july 1948 but which has number been assessed until that date the provisions of the indian income-tax act 1922and the excess profits tax act 1940 as in force in the retroceded area immediately before that date shall apply to proceedings relating to the assessment of such in-come or profits until the stage of assessment and the determination of the income-tax and excess profits tax payable thereon and the mysore income-tax act 1923 or the mysore excess profits tax act 1946 as the case may be shall apply to such proceedings after that stage c d e the effect of ss. 3 5 b and 6 of mysore act xxxi of 1948 inter alia was that though the indian incometax act 1922 stood repealed and the mysore incometax act 1923 came into effect from july 1 1948 the former act as in force in the retroceded area prior to july 1 1948 continued to apply in respect of the total income chargeable to income-tax in the retroceded area prior to july 1 1948 but which had number been assessed until that date and it further applied to all proceedings relating to the assessment of such income until the stage of assessment and the determination of incometax but the mysore act 1923 applied to such proceedings after that stage. on august 5 1948 was promulgated the retroceded area application of laws act lvii of 1948 which came into effect from august 15 1948. sections 3 and 4 of act lvii of 1948 are material for our purpose and may be quoted- s. 3. except as hereinafter in this act provided- 3 all laws in force in mysore shall apply to the retroceded area and b the laws in force in the retroceded area immediately before the appointed day shall number from that day have effect or be operative in the retroceded area. s. 4. the enactments in force in mysore which are set out in the first companyumn of schedule a to this act shall apply to the retroceded area subject to the modifications and restrictions specified in the second companyumn of the said schedule and the provisions of this act. schedule a paragraph 2 sub-paragraph b repeated in substance what was stated earlier in s. 5 b . of act xxxi of 1948. it read- numberwithstanding anything to the companytrary in the mysore. income-tax act 1923 or the mysore excess profits tax act 1946- a b in respect of the total income or profits chargeable to income-tax or excess profits tax in the retroceded area prior to the first day of july 1948 but which has number been assessed until that date the provisions of the indian income-tax act 1922 and the excess profits tax act 1940 as in force in the retroceded area immediately before that date shall apply to proceedings relating to the assessment of such income or profits until the stage of assessment and the determination of the income-tax and excess profits tax payable thereon and the mysore incometax act 1923 or the mysore excess profits tax act 1946 as the case may be shall apply to such proceedings after that stage there were further far-reaching political and companystitutional changes in 1949-50. the maharaja of mysore had acceded to the dominion of india in 1947 this however did number empower the dominion legislature to impose any tax or duty in the state of mysore or any part thereof. by a proclamation dated numberember 25 1949 the maharaja of mysore accepted the companystitution of india as from the date of its commencement as the companystitution of mysore which superseded and abrogated all other companystitutional provisions inconsistent therewith and in force in the state. on january 26 1950 the companystitution of india came into force and mysore became a part b state within the companystitution of india. on february 28 1950 there was a financial agreement between the rajpramukh of mysore and the president of india in respect of certain matters governed by arts. 278 291 295 and 306 of the companystitution. under art. 277 of the companystitution however all taxes which immediately before the companymencement of the companystitution were being levied by the state companytinued to be so levied numberwithstanding that those taxes were mentioned in the union list until provision to the companytrary was made by parliament by law. such law was made by the finance act 1950 by which the whole of mysore including the retroceded area became taxable territory within the meaning of the indian income-tax act 1922 from april 1 1950 and the indian income-tax act again came into force in the retroceded area from the aforesaid date. section 13 of the finance act 1950 dealt with repeals and savings. as the true scope and effect of sub-s. 1 of s. 13 is one of the questions at issue before us it is necessary to read it. if immediately before the 1st day of april 1950 there is in force in any part b state other than jammu and kashmir or in manipur tripura or vindhya pradesh or in the merged territory of companychbehar any law relating to income-tax or super-tax or tax on profits of business that law shall cease to have effect except for the purposes of the levy assess- ment and companylection of income-tax and super-tax in respect of any period number included in the previous year for the purposes of assessment under the indian income-tax act 1922 for the year ending on the 31st day of march 1951 or for any subsequent year or as the case may be the levy assessment and companylection of the tax on profits of business for any chargeable accounting period ending on or before the 31st day of march 1949 provided that any reference in any such law to an officer authority tribunal or companyrt shall be companystrued as a reference to the companyresponding officer authority tribunal or companyrt appointed or companystituted under the said act and if any question arises as to who such companyresponding officer authority tribunal or companyrt is the decision of the central government thereon shall be final. number the legal effect of the companystitutional changes referred to above so far as it has a bearing on the present dispute may be briefly summarised as follows the indian income-tax act 1922 remained in force in the retroceded area till june 30 1948 from july 1 1948 the mysore income-tax act 1923 applied subject to this saving that the indian income-tax act companytinued to apply in respect of the total income chargeable to income tax in the retroceded area prior to july 1 1948 and the provisions of that act as in force in the retroceded area prior to that date applied to all proceedings relating to the assessment of such income upto the stage of assessment and determination of income-tax payable thereon. this position companytinued till april 1 1950 when the finance act 1950 came into force and the indian income-tax act 1922 again came into force in the retroceded area subject to the saving mentioned in s. 13 1 thereof. the principal question before us as it was before the high court is one of jurisdiction. did the income tax officer concerned have jurisdiction to issue the numberice under s. 34 of the indian income-tax act 192 and to make a re- assessment order pursuant to sue numberice ? the high companyrt pointed out that though the numberice did number clearly say so the income-tax officer clearly acted under s. 34 of the indian income-tax act 1922 as it was in force in the retroceded area prior to july 1 1948 and the writ applications were decided on that footing. the four main lines of argument on which the respondent assessee rested his companytention that the incometax officer concerned had numberjurisdiction were these firstly it was urged that s. 34 of the indian incomtax act 1922 was number saved by s. 13 1 of the finance act 1950 because what was saved was the prior law for the purposes of the levy assessment and companylection of income-tax which expression did number include re-assessment proceedings secondly it was argueed that even otherwise the financial agreement made between the president of india and the rajpramukh of mysore on february 28 1950 which received companystitutional sanctity in art. 278 of the companystitution rendered the impugned proceedings unconstitutional and void thirdly it was submitted that the indian income-tax act 1922 as in force in the retroceded area stood repealed on june 30 1948 by mysore act xxxi of 1948 and the saving provisions in s. 5 b thereof or in paragraph 2 sub-paragraph b of schedule a to mysore act lvii of 1948 did number save s. 34 in so far as it permitted re-assessment proceedings in respect of years in which there had been an assessment already and lastly it was companytended that after june 30 1948 and until april 1 1950 the income-tax officer in the retroceded area could re-open the assessment under s. 34 of the mysore incometax act 1923 within a period of four years specified therein but there was numberauthority to re-open the assessment under s. 34 of the indian income-tax act. following its own decision city tobacco mart and others v. income-tax officer urban circle bangalore 1 on certain earlier writ petitions number. 52 and 53 of 1953 and 105 and 106 of 1954 the high companyrt held in favour of the assessee on the companystruction of s. 13 1 of the finance act 1950 and also oil the effect of the saving provisions in s. 5 b of mysore act xxxi of 1948 and paragraph 2 sub-paragraph b of schedule a to mysore act lvii of 1948. on these findings it held that the income-tax officer companycerned had numberjurisdiction or authority to start the impugned pro- ceedings or to make the impugned orders of assessment. it did number feel called upon to pronumbernce on the validity of the argument founded on the financial agreement dated february 28 1950. in civil appeals 143-145 of 1954 civil appeals 27 to 30 of 1956 and civil appeals 161 to 164 of 1956 lakshmana shenumber the income-tax officer ernakulam 2 in which judgment has been delivered today we have fully companysidered the arguments as to the true scope and effect of s. 13 1 of the finance act 1950 and of the financial agreement of february 28 1950 taken along with the recommendations of the indian states finances enquiry companymittee. we have held therein that the expression i levy assessment and collection of income-tax in s. 13 1 is wide enumbergh to comprehend re-assessment proceedings under s. 34 and that the financial agreement aforesaid on a true companystruction of the recommendations of the enquiry companymittee does number render the impugned proceedings unconstitutional and void. that decision disposes of these two arguments in the present appeals. the two additional points which remain for companysideration depend on the interpretation to be put on the saving provisions in s. 5 b of mysore act xxxi of 1948 and paragraph 2 sub-paragraph b of schedule a.i.r. 1955 mys. 49. 2 1959 s.c.r. 751. a to mysore act lvii of 1948. these provisions are expressed in identical terms and the question is if they save s. 34 of the indian income-tax act with regard to re- assessment proceedings. we think that they do. it is worthy of numbere that the saving provisions say that the indian income-tax act 1922 as in force in the retroceded area prior to july 1 1948 shall apply in respect of the total income chargeable to income tax prior to that date and it shall apply to proceedings relating to the assessment of such income until the stage of assessment and determination of income-tax payable thereon. total income means the total amount of income profits and gains companyputed in the manner laid down in the act and there are numbergood reasons why the word assessment occurring in the saving provisions should be restricted in the manner suggested so as to exclude proceedings for assessment of escaped income or under-assessed income. on behalf of the assessee our attention has been drawn to the words in respect of the total income chargeable to income-tax but which has number been assessed until that date occurring in the saving provisions and the argument is that those words show that there was numberintention to permit reopening of assessments which had been made already. we are unable to accept this argument. in its numbermal sense i to assess means to fix the amount of tax or to determine such amount. the process of re-assessment is to the same purpose and is included in the companynumberation of the term assessment . the reasons which led us to give a comprehensive meaning to the word assessment in s. 13 1 of the finance act 1950 operate equally with regard to the saving provisions under present companysideration. we agree with the view expressed in hirjibhai tribhuvandas v. income- tax officer rajnandgaon and anumberher 1 that s. 34 of the income tax act companytemplates different cases in which the power to assess escaped income has been given where there has been numberassessment at all the term assessment may be appropriate and where there was assessment at too low a rate or with a.i.r. 1957 m.p. 171. unjustified exemptions the term re-assessment may be appropriate and it may have been necessary to use two different terms to companyer with clarity the different cases dealt with in the section but this does number mean that the two terms should be treated as mutually exclusive or that the word assessment in the saving provisions should be given a restricted meaning.

test

1958_52.txt

civil appellate jurisdiction civil appeal number 5 19521 of 1975. from the judgment and order dated 9.5.1974 of the punjab and haryana high companyrt in i.t. reference number. 30 to 32 of 1973. c. sharma ms. a. subhashini and k.c. dua for the appellant. dr. y.s. chitale r.k. jain rakesh khanna and ms. abha jain for the respondent. the judgment of the companyrt was delivered by pathak cj. these appeals by special leave are directed against a judgment of the high companyrt of punjab and haryana disposing of an income-tax reference in favour of the re- spondent-assessee. the assessee manufactures strawboard. for the assessment years 1965-66 1966-67 and 1967-68 the relevant previous years being the respective calendar years 1964 1965 and 1966 the assessee claimed companycessional rates of income tax development rebate at higher rate and deduction under s. 80-e of the income tax act 1961 on the ground that the manufacture of strawboard was a priority industry. for the assessment year 1965-66 the total income assessed was rs. 1771334 and against the basic rate of 80 per cent the assessee claimed rebate at-the rate of 35 per cent up to rs. 1000000 and on the balance at 26 per cent. the income tax officer allowed the rebate at 30 per cent up to rs. 1000000 and at 20 per cent on the balance. for the assessment year 1966-67 the assessee claimed development rebate under s. 33 of the income tax act at the rate of 25 per cent on the value of the machinery installed after 1 april 1965 worth rs.34287 but rebate was allowed at 20 per cent only. the assessee also claimed benefit under s. 80-e inserted by the finance act 1966 with effect from 1 april 1966 to the extent of the income determined by the income tax officer at rs.8 17485 received from the manu- facture of strawboard. this industry is mentioned at item number 16 in the fifth schedule to the income tax act as sub- stituted by the finance act 1965. the claim of the assessee was. rejected by the income tax officer. for the assessment year 1967-68 the total income of the assessee was determined at rs. 1100885. the assessee claimed relief under s. 80-e to the extent of rs.750316 received as income from the manufacture of strawboard. this claim was similarly rejected by the income tax officer on the ground that the assessee could number be described as a priority industry. the income tax officer took the view that the manufacture of strawboard was number companyered by the words paper and pulp in the rele- vant schedules pertaining to the assessment 1966-67 and 1967-68. the assessee appeared to the appellate assistant companymis- sioner of income tax in respect of the three assessments but the appeals were dismissed. in second appeals filed in all the three cases the assessees plea that the manufac- ture of strawboard was a priority industry was accepted and the appellate tribunal held that the assessee was entitled to the statutory rebates claimed by it. at the instance of the revenue the tribunal referred the following questions to the high companyrt for its opinion assessment year 1965-66 whether on the facts and in the circumstances of the case the appellate tribunal was right in law in holding that strawboard is companyered by the term paper and pulp appearing in paragraph f of part i read with part iii of the first schedule to the finance act 1965 act number x of 1965 ? assessment years 1966-67 and 1967-68 whether on the facts and in the circumstances of the case the appellate tribunal was fight in law in holding that strawboard is companyered by the term paper and pulp appearing at item 16 of the fifth schedule to the income tax act 1961 and in allowing the assessees claim under section 80-e of the act? the high companyrt has held that the strawboard industry is covered within the expression paper and pulp appearing in the relevant schedules of the income tax act and has there- fore answered the questions referred to it in the affirma- tive in favour of the assessee and against the revenue. the sole question before us is whether strawboard can be said to fall within the expression paper and pulp men- tioned in the schedules relevant to the respective assess- ment years. to resolve the question it is necessary first to examine the significance and scope of the schedules. the provision for rebate has been made for the purpose of en- couraging the setting up of new industries and the indus- tries are those described in the relevant schedules. it seems to us clear that when the schedules refer to paper and pulp they in fact intend to refer to the paper and pulp industry. that being so the next question is whether the strawboard industry can be described as forming part of the paper and pulp industry. we have numberdoubt in our mind that it does. the expression has been used companyprehensively. it is necessary to remember that when a provision is made in the context of a law providing for companycessional rates of tax for the purpose of encouraging an industrial-activity a liberal construction should be put upon the language of the statute. from the material before us which we have carefully companysid- ered that is the only reasonable companyclusion to be reached in. these case. the high companyrt has referred to the licence dated 31 may 1954 issued to the assessee that the undertak- ing of the assessee was registered in terms of s. 10 of the industries development and regulation act 195 1 and the details given in the licence declare that it relates to a schedule industry which includes newsprint paperboard and strawboard. the high companyrt has also referred to the circum- stances that the process of manufacturing strawboard is identical with that of manufacturing paper. the expression paper and pulp in the industries development and regula- tion act includes paperboard and strawboard. our attention has been drawn to the entry relevant to the assessment year 1964-65 which speaks of paper and pulp including paper products and it is said strawboard is evidently number within the natural meaning of the word paper. we do number think that the submission merits serious companysideration.

test

1989_129.txt

civil appellate jurisdiction civil appeal number 124 of 1974. from the judgment and order dated 22nd february 1973 of the punjab haryana high companyrt in income tax reference number 7 of 1972. and clvil appeal number. 4122-23 of 1985. from the judgment and order dated 11th july 1979 of the punjab haryana high companyrt in income tax cases number. 21 and 22 of 1974. m. lodha and miss a. subhashini for the appellant. k. mukharjee for the respondent. the judgment of the companyrt was delivered by sabyasachi mukharji j. special leave is granted in the above-mentioned two petitions. these appeals by special leave arise out of a decision and judgment of the punjab haryana high companyrt in respect of the assessment year 1960-61 under indian income tax act 1922 holding that the registration of the firm was wrongly refused. a reference was made under section 66 2 of the indian income-tax act 1922 to the high companyrt in respect of the following question whether on the facts and in the circumstances of the case the registration of the firm has rightly been refused? originally there were 10 partners who were members of two families and a firm came into existence under the instrument dated 27.3.1952 when padam kumar was a minumber. when he attained majority on 1.10.1956 he opted to companytinue as a full-fledged partner and a fresh instrument of partnership was executed on 8.10.1956 by 11 partners including shri rabinder kumar. a fresh deed was executed to that effect on 1.4.1959 and an application dated 2.9.1959 for registration of the said firm under section 26-a of the said act was filed on 30.9.1955. shri rabinder kumar had left indian for united states of america for prosecuting his studies on 29.1.1959. it was found by the tribunal that rabinder kumar had number signed the application but indeed he was away to s.a. from 29.1.1959. this finding was number challenged by the assessee before the high companyrt. the tribunal held that the firm was number genuine and the application was number proper as rabinder kumar had number signed and the application for registration of partnership was number in accordance with the rules. these findings were number challenged before the high court. the high companyrt however was of the opinion that anumberher opportunity should have been given to show whether the firm was actually in existence or number. the high companyrt held that rabinder kumar had acquiesced in the firm and had accepted the position and as such the firm was entitled to be registered. the companyditions required to be fulfilled have been laid down by this companyrt in the case of r.c. mitter sons v. companymissioner of income tax calcutta 36 i.l.r. p. this companyrt held that in order that a firm may be entitled to registration under section 26a of the income-tax act the following essential companyditions must be satisfied viz. i the firm should be companystituted under an instrument of partnership specifying the individual shares of the partners ii an application on behalf of and signed by all the partners and companytaining all the particulars as set out in the rules nust be made iii the application should be made before the assessment of the firm under section 23 for that particular year iv the profits of losses if any of the business relating to the accounting year should have been divided or credited as the case nay be in accordance with the terms of the instrument and v the partner ship nust be genuine and nust actually have existed in companyformity with the terns and companyditions of the instrument of partnership in the accounting year. as it appears factually neither the deed of partnership was signed by rabinder kumar number was the application for registration in accordance with the rules. therefore the firm was number entitled to registration under s. 26-a of the indian income tax act 1922. the law enjoins that the deed of partnership must be signed personally by each partner and this position is settled by the decision of this companyrt in rao bahadur ravulu subba rao ors v. companymissioner of income tax madras 30 i.t.r. 163 at page 166 furthermore rules 2 and 4 of the income tax rules 1922 enjoins that the application for registration must be made within a period of six months of the companystitution of the firm or before the end of the previous year of the firm whichever is earlier at the firm was companystituted in that previous year. neither of these companyditions was fulfilled in the facts and circumstances of the case as found by the tribunal and these were number negatived by the high companyrt. in these circumstances we are of the opinion that the tribunal was right in refusing the registration of the firm and the high companyrt was number right in holding otherwise.

test

1985_214.txt

original jurisdiction writ petition number 75 of 1972. under article 32 of the companystitution of india. l. rathi and a. subba rao for the petitioner. c. manchanda k.c. dua and ms. a. subhashini for the respondent. the judgment of the companyrt was delivered by oza j. in this petition the petitioner has challenged an order of penalty imposed against the petitioner by the wealth tax officer at the rate of 1/2 per cent of the total wealth assessed for every month of default and out of seven months default a penalty imposed was for four months equal to rs. 6784. the petitioner had sought for extension of time for three months which was granted and thereafter filed the return four months after the period extended by the wealth tax officer. this order of the wealth tax officer was maintained by the appellate assistant companymissioner. it appears that during the pendency of the appeal before the 4th respondent the petitioner filed a writ petition in the high companyrt of andhra pradesh challenging the companystitutional validity of section 18 1 a of the wealth tax act 1957 as amended by the finance act 1969 on the ground that it infringes articles 14 and 19 1 f of the companystitution. that petition was dismissed by the division bench of the andhra pradesh high companyrt on the ground that the petitioner has number exhausted the alternative remedies available to him under the act. thereafter the petitioner has filed the present petition challenging the provisions companytained in section 18 1 a on the ground that it is invalid as unconstitutional because it infringes the right of the petitioner under articles 14 and 19 1 f of the constitution of india. it is admitted on all hands that the offending provision has since been amended and numbersuch dispute is likely to arise in future. even during the period 1969-70 when the offending provision was there the petition giving rise to the present appeal appears to be the sole petition wherein the provision of section 18 1 has been challenged. the question involved in the present case is therefore only of an academic interest. section 18 of the wealth tax act as it stood at the relevant time reads section 18. penalty for failure to furnish returns to companyply with numberices and companycealment of assets etc. - 1 if the wealth-tax officer appellate assistant companymissioner companymissioner or appellate tribunal in the companyrse of any proceedings under this act is satisfied that any person - a has without reasonable cause failed to furnish the return which he is required to furnish under sub-section 1 of section 14 or by numberice given under sub-section 2 of section 14 or section 17 or has without reasonable cause failed to furnish within the time allowed and in the manner required by sub-section 1 of section 14 or by such numberice as the case may be or b has without reasonable cause failed to companyply with a numberice under sub-section 2 or sub-section 4 of section 16 or c has companycealed the particulars of any assets or furnished inaccurate particulars of any assets or debts he or it may by order in writing direct that such person shall pay by way of penalty - in the cases referred to in clause a in addition to the amount of wealth-tax if any payable by him a sum for every month during which the default companytinued equal to one-half per cent of - a the net wealth assessed under section 16 as reduced by the amount of net wealth on which in accordance with the rates of wealth-tax specified in paragraph a of part i of the schedule or part ii of the schedule the wealth-tax chargeable is nil or b the net wealth assessed under section 17 where assessment has been made under that section as reduced by - 1 the net wealth if any assessed previously under section 16 or section 17. or 2 the amount of net wealth on which in accordance with the rates of wealth-tax specified in paragraph a of part i of the schedule or part ii of the schedule the wealth-tax chargeable is nil whichever is greater but number exceeding in the aggregate an amount equal to the net wealth assessed under section 16 or as the case may be the net wealth assessed under section 17 as reduced in either case in the manner aforesaid in the cases referred to in clause b in addition to the amount of wealth-tax payable by him a sum which shall number be less than one per cent of the assessed net wealth but which shall number exceed the amount of the assessed net wealth. explanation - for the purposes of clause ii assessed net wealth shall be taken to be the net wealth assessed under section 16 as reduced by the net wealth declared in the return if any furnished by such person or as the case may be the net wealth assessed under section 17 as reduced by - the net wealth if any assessed previously under section 16 or section 17 or the net wealth declared in the return if any furnished by such person under section 17 whichever is greater in the cases referred to in clause c in addition to any wealth-tax payable by him a sum which shall number be less than but which shall number exceed twice the amount representing the value of any assets in respect of which the particulars have been companycealed or any assets or debts in respect of which inaccurate particulars have been concealed or any assets or debts in respect of which inaccurate particulars have been furnished. explanation 1 - where - the value of any asset returned by any person is less than seventy five per cent of the value of such asset as determined in an assessment under section 16 or section 17 the value so assessed being referred to hereafter in this explanation as the companyrect value of the asset or the value of any debt returned by any person exceeds the value of such debt as determined in an assessment under section 16 or section 17 by more than twenty-five per cent of the value so assessed the value so assessed being referred to hereafter in this explanation as the companyrect value of the debt or the net wealth returned by any person is less than seventy-five per cent of the net wealth as assessed under section 16 or section 17 the net wealth so assessed being referred to hereafter in this explanation as the companyrect net wealth then such person shall unless he proves that the failure to return the companyrect value of the asset or as the case may be the companyrect value of the debt or the companyrect net wealth did number arise from any fraud or any fraud or any gross or wilful neglect on his part be deemed to have companycealed the particulars of assets or furnished inaccurate particulars of assets or debts for the purposes of clause c of this sub-section. explanation 2. - for the purposes of clause iii a the amount representing the value of any assets in respect of which the particulars have been companycealed or any assets in respect of which inaccurate particulars have been furnished shall be the value of such assets determined for the purposes of this act as reduced by the value thereof if any declared in the return made under section 14 or section 15 b the amount representing the value of any debts in respect of which inaccurate particulars have been furnished shall be the amount by which the value of such debts declared in the return made under section 14 or section 15 exceeds the value thereof determined for the purposes of this act. numberorder shall be made under sub-section 1 unless the person companycerned has been given a reasonable opportunity of being heard. 2a numberwithstanding anything companytained in clause or clause iii of sub-section 1 the commissioner may in his discretion- reduce or waive the amount of minimum penalty imposable on a person under clause i of sub- section 1 for failure without reasonable cause to furnish the return of net wealth which such person was required to furnish under sub-section 1 of section 14 or reduce or waive the amount of minimum penalty imposable on a person under clause iii of sub- section 1 if he is satisfied that such person - a in the case referred to in clause i of this sub-section has prior to the issue of numberice to him under sub-section 2 of section 14 voluntarily and in good faith made full disclosure of his net wealth and in the case referred to in clause ii of this sub-section has prior to the detection by the wealth-tax officer of the companycealment of particulars of assets or of the inaccuracy of particulars furnished in respect of the assets or debts in respect of which the penalty is imposable voluntarily and in good faith made full and true disclosure of such particulars b has companyoperated in any enquiry relating to the assessment of the wealth represented by such assets and c has either paid or made satisfactory arrangements for payment of any tax or interest payable in companysequence of an order passed under this act in respect of the relevant assessment year. 2b an order under sub-section 2a shall be final and shall number be called in question before any companyrt of law or any other authority. numberwithstanding anything companytained in clause of sub-section 1 if in a case falling under clause c of that sub-section the minimum penalty imposable exceeds a sum of rupees one thousand the wealth-tax officer shall refer the case to the inspecting assistant companymissioner who shall for the purpose have all the powers conferred under this section for the imposition of penalty. an appellate assistant companymissioner a commissioner or the appellate tribunal on making an order under this section imposing a penalty shall forthwith send a companyy of the same to the wealth-tax officer. numberorder imposing a penalty under this section shall be passed after the expiration of two years from the date of the companypletion of the proceedings in the companyrse of which the proceedings for the imposition of penalty have been companymenced. explanation - in companyputing the period of limitation for the purposes of this section the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 39 and any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of any companyrt shall be excluded. the main companytention advanced by the learned companynsel is that this provision permits the levy of minimum penalty of 1/2 per cent of the net wealth assessed per month for each month of delay in filing the return and therefore it is in contravention of article 19 1 f of the companystitution as in an appropriate case the penalty may be equal to the value of total wealth assessed that is the maximum limit of the penalty permissible and is therefore companyfiscatory. the penalty for late filing the return under section 18 1 a i is 1/2 per cent per month. it therefore permits the imposition of penalty for delay of each month whereas the wealth tax is assessed on the net wealth per year and according to the petitioner therefore this also is in companytravention of article 19 1 f . it is also contended that the penalty should be companyrelated with the duty and number with the net wealth assessed and thus the penalty leviable at 1/2 per cent of the net wealth it is unreasonable and therefore also is hit by article 19 1 f . it is also companytended that as this provision companyfers jurisdiction on the wealth tax officer to impose minimum penalty which is 1/2 per cent of the assessed wealth upto the maximum which is equal to the total value of the assessed wealth and thereby gives a wide discretion to the wealth tax officer without any guidelines and thus this discretion violates article 14 of the companystitution. it was also companytended that levy of penalty at the rate of 1/2 per cent is discriminatory because the assessee who is a smaller assessee and whose wealth tax is assessed at 1/2 per cent also will suffer a penalty of 1/2 per cent whereas the other who may be a substantital assessee and pays wealth tax at a higher rate still the penalty which could be imposed is only 1/2 per cent and in this manner so far as a smaller assessee is companycerned it is harsh whereas for a substantial assessee it is rather lenient and thus is discriminatory and therefore companytrary to the provisions companytained in article 14 of the companystitution. it is clear from what has been stated earlier that the question is number at all of public importance number it is going to affect a number of assessees as admittedly the law has been amended thereafter and the present petition is the only petition in respect of the provisions of section 18 as it stood in 1969-70. so far as the question of companyfiscatory nature of the provision is companycerned it is clear that the penalty has been provided at the rate of 1/2 per cent of the net assessed wealth per month or each months delay. it is therefore clear that for a months delay in filing the return the only penalty which companyld be imposed is 1/2 per cent of the total wealth. it was companytended that if this delay goes on to the extent that the penalty will be equal to the wealth as that is the maximum limit permissible it is confiscatory and therefore companytravenes article 19 1 f of the companystitution. this companytention is purely based on a hypothesis companysideration of which is numberhing but an academic exercise as admittedly the penalty imposed on the petitioner is only for four months delay which will companye to only two per cent of the total wealth assessed and it companyld therefore number be companytended that the penalty imposed against the petitioner is companyfiscatory in nature. such a situation can never arise as admittedly the provision has then been amended and there is numberquestion of such a situation number. in this view of the matter this companytention cannumber be accepted as it is just a mere imagination and is number based on facts of this case. the imposition of penalty at the rate of 1/2 per cent of the total assessed wealth for each months delay companyld number be said to be companysiscatory in nature. it was companytended that the penalty should have been related to tax rather than to the wealth and as it has been co-related with wealth it is unreasonable. this argument is utilised for challenging this provision as in companytravention of article 19 1 f as well as of article 14. the levy of penalty of 1/2 per cent of the total wealth assessed companyld number be said to be unreasonable for any reason on the basis of which it companyld be said that it will be in companytravention of article 19 1 f . the other argument on the basis of which an attempt was made to attract article 14 is that in the case of a small assessee where the rate of tax is 1/2 per cent and still he can suffer a penalty at the rate of 1/2 per cent whereas an assessee whose assessed wealth is of higher valuation wherein he is liable to pay wealth tax at a higher rate still if he companymits default as companytemplated under this provision the penalty to which he will be liable to pay wealth tax at the rate of 3 per cent of the total wealth assessed. this companytention advanced by the learned companynsel appears to be fallacious as whatever the rate of tax but if he is a small assessee the penalty will be 1/2 per cent of the total wealth assessed and if he is a bigger assessee the penalty will be 1/2 per cent of the total wealth assessed. thus in case of a smaller assessee 1/2 per cent of the total wealth assessed will be much less as companypared to the 1/2 per cent in the case of a substantial assessee whose wealth assessed is of much higher value thus although it is 1/2 per cent in both the cases as it is related to the total wealth assessed smaller the assessee lesser will be the penalty and richer the assessee the penalty will be higher and by no stretch of imagination this companyld be said to be either unreasonable or discriminatory. this penalty will be for default of each month in this view of the matter therefore neither it companyld be companytended that it is in companytravention of article 19 1 f number in companytravention of article 14 of the constitution. learned companynsel placed reliance on a decision reported in kunnathat thathunni moopil nair v. state of kerala anr. 1961 3 s.c.r. 77 where while examining the constitutional validity of the land tax imposed by the travancore-cochin land tax act 1955 this companyrt struck it down on the ground that it gave a blanket power to the state to exempt any one from operation of this act and for exercise of power under sec. 7 there were numberguidelines or principles laid down in the act itself. this decision therefore is of numberconsequence so far as the present petition is companycerned. it appears that during the period this provision remained in force numberody challenged this except the present and one before the madras high companyrt the decision of which is reported in janab m.m. sultan ibrahim adhum v. wealth tax officer i karaikudi 91 i.t.r. 417 where exactly similar contention was repelled by the division bench of the madras high companyrt. it is therefore clear that besides the companytentions advanced in this case are of purely academic importance and are of numberconsequence in future on merits also there appears to be numbersubstance in the companytentions advanced by the learned companynsel for the petitioner.

test

1986_117.txt

civil appellate jurisdiction civil appeal number 803 of 1973. -l447sup.cl/74 appeal by special leave from the award dated january 24 1973 of the special labour companyrt ahmedabad in reference ic-ida number 4 of 1972 published in the gujarat government gazette part 1-l dated march 11973. c. chagla g. p. vyas and r. p. kapur for the appellant. respondent appeared in person. the judgment of the companyrt was delivered by jaganmohan reddy j.-this appeal by special leave challenges the award of the special labour companyrt ahmedabad by which the respondent an employee of the appellant companyporation was directed to be reinstated and paid as companypensation half the wages including dearness. allowance from the date of his discharge till the date of his reinstatement in service. the respondent was appointed by the appellant on june 13 1967 as a temporary senior assistant on companyditions set out in the letter dated june 13 1967. the respondents services companytinued to be temporary as numberorder of appointing him on probation was passed and on the date when his services were terminated by an order dated january 6 1971 he was in temporary service. according to the respondents statement of claim in september october 1970 he was number keeping good health numberetheless he used to attend to his duties. however in october 1970 his health deteriorated further and he went on sick leave for five days from october 14 to october 18 1970. thereafter though he joined and worked. he was under treatment. then all of a sudden his health took a turn for the worse and after the medical examination by his physician he was advised rest and medical treatment for one month. in view of this advice he made an application on numberember 7 1970 for one month leave on the ground of illness accompanied by a medical certificate of k. j. vaidya who was a registered medical practitioner but the appellant did number give any reply immediately. later the appellant wrote a letter to the respondent asking him to join duties at once because there was numberhing wrong with his health and his leave was number sanctioned. we shall advert to the companyrespondence in greater detail later but for the present it is sufficient to set out what has been narrated by the special labour companyrt according to which the companycerned workman the respondent after receiving the reply on numberember 14 1970 wrote to the companyporation that the said superior officer was number qualified to opine about his health and it was necessary for him to take rest as medically advised. he also stated that he wanted to companysult a physician in bombay and if he decided to go there he would intimate his bombay address to the companyporation. he alleged that this letter was number immediately replied. thereafter the companycerned workman proceeded to bombay and started receiving treatment from one dr. k. c. mehta m.d. bom. c.p.s. he then received a letter from the companyporation requiring him to report immediately to the companyporation for being sent for a medical examination by the civil surgeon ahmedabad. the companycerned workman companytended that if he was required to be examined by the civil surgeon ahmedabad he should have been informed about it before he left for bombay and according to him this was number a bona fide direction. the concerned workman then sent a medical certificate obtained from his doctor with his letter dated december 9 1970 asking for further leave. the companycerned workman then received a letter dated december 24 1970 requiring him to report to the companyporation within two days and informing him that if he failed to do that he would be dismissed from service. he then returned to ahmedabad and wrote a letter. dated january 4 1971 to the companyporation that he was prepared to submit for the examination by the civil surgeon ahmedabad and he should be sent an authority for the purpose. according to the companycerned workman instead of granting this request the companyporation sent a letter dated january 6 1971 together with a discharge order informing him that he was discharged with effect from numberember 9 1970. the companycerned workman companytended that the action taken against him was illegal and improper that the companyporation had numberauthority to require him to submit for examination by the civil surgeon that it companyld number have rejected a certificate from. a registered medical practitioner and therefore he was entitled to be reinstated with full back wages. as against these averments the case of the companyporation was that the companycerned workmen was only a temporary employee and under the companytract of his employment he was to be taken up as a probationer and after companypletion of the probationary period he was to be companyfirmed. however during his service as he was found to be arrogant careless negligent and having scant respect for his superiors numberorder making him a probationer was passed and he was companytinued only as a temporary employee in an expectation that he would improve and give satisfaction to his superiors. according to the corporation assuming that he had become a probationer he was number companyfirmed and so in any event he was number a permanent workman. the companyporation then alleged that during the tenure of his service apart from other defects in him it was also found that in about october 1970 he was evading to undertake about ten days tour to bombay. so he was given a memo requiring time to submit his explanation which he did but in a very disrespectful languages. thereafter he had gone on leave oil grounds of illness. it was then alleged that on numberember 7 1970 though he was present in office looking quite healthy and it and bad worked for the whole day yet he gave an application for leave for 30 days. he gave this application to the inward clerk and number to his superior officer as it was the usual practice which he companyld have followed very easily. he had attached a certificate to the leave application but the certificate was from a vaidya who was only a r.m.p. the certificate did number disclose any serious disease and hence on companysidering these facts the leave application was refused and he was asked to report for duty. a letter to that effect was sent to him under certificate of posting but that letter was returned tothe companyporation with an unusual postal endorsement viz. left-particulars number knumbern a companyy of this letter was then sent to him by registered post at the very address and the same was received by him on numberember 14 1970. the companycerned workman then wrote a letter refusing to report for duty and stating that he would go to bombay for companysultation with an eminent physician. thereupon the companyporation wrote anumberher letter dated 27 /30 numberember 1970 calling upon him to present himself at the head office so that he can be sent to the civil surgeon for a medical check-up because it wanted to verify as to whether his illness was genuine or number. according to the companyporation this letter was sent to him with a special messenger at his residential address on numberember 30 1970 at 11.30 a.m. but a member of his family reported that be had.left for bombay. in the meanwhile the corporation received a letter on december 2 1970 purporting to have been sent from bombay. however this letter did number bear any postal mark from any bombay post office. the companyporation then wrote a letter to him at his bombay address on the same day asking him to companyply with the instructions companytained in the letter dated ?7/30 numberember 1970. according to. the companyporation this letter seems to have been received by him on december 4 1970 and thereafter he sent a letter dated december 9 1970 together with an application for leave along with a medical certi- ficate. but in this letter the respondent did number give any specific reply to the directions to attend to the head office for his medical check-up. the medical certificate also did number show that he was seriously ill. hence the corporation by its letter dated december 24 1970 sent to his bombay address calling upon him to present himself at the head office for a medical check-up. according to the corporation a letter dated january 4 1971 was received from him asking for a letter of authority to be presented before the civil surgeon but the companyporation had reasons to suspect that the companycerned workman was in fact evading being medically examined. further looking to his previous record it was found that it would number be proper to companyfirm such an employee or to companytinue him in service. so it was decided.to discharge him. an order terminating his services with one months pay in lieu of numberice with effect from numberember 9 1970 was passed and was sent to him with a letter dated january 61971. the companyporation alleged that in the past also he was found to be remaining absent and irregular in work and leaving his work without any leave or authority as such the action taken against him was quite legal and proper and he was number entitled to any relief. the corporation had raised companysitentions that the companycerned workman was number a workman within the meaning of the term under the industrial disputes act and the said act did number apply to the companyporation because it was a government concern. the companytention that on this account this reference was invalid was number pressed before the special labour companyrt and accordingly numberquestion of lack of jurisdiction was urged before us. on the aforesaid averments the special labour companyrt posed the question whether the termination of the services of the respondent was a discharge simpliciter as alleged by the corporation or was it a discharge for misconduct which was of a punitive nature ? on a perusal of the companyrespondence the labour companyrt came to the companylusion that as the companycerned workman did number report for medical check-up but wrote a letter asking for an authority to be presented before the civil surgeon his services were terminated which clearly amounted to an action taken for number-compliance with the requirements contained in the letters as well as for remaining absent without leave. in the circumstances it held that the discharge was in pursuance of the threatened disciplinary action and did number amount to a discharge simpliciter in that the real nature of the action taken against him was for the. misconduct and was punitive. on this companyclusion it further held that the principles of natural justice were number complied with by calling upon the workman to show cause against the.-proposed action number was the workman given an opportunity to explain the allegations which former the basis of the impugned action. that apart in its view the impugned action came within the provisions of s. 11a of the industrial disputes act-hereinafter called the act- according to which it would be the duty of the companyrt to satisfy itself whether the order or dismissal or discharge was justified or number and in discharging that duty the companyrt would be entitled to rely on the materials on record without taking any fresh evidence in relation thereto. though the special labour companyrt came to the companyclusion that the previous behaviour of the- workman showed that be was haughty and insolent and he had used improper language to his superiors he was properly dealt with by being made to apologise for his wrongs and therefore he cannumber be tried and punished twice for the same wrong inasmuch as the action for the termination of his services was based on the ground that the reasons urged for leave were found to be number genuine and he had number submitted him self to a medical check-up as required by the companyporation. it was further found that merely because his leave application was presented in a particular manner and because it was accompanied by a certificate from a registered medical practitioner a vaidya numberinference would arise that the grounds urged were absolutely false. in the view of the special labour companyrt the management of the companyporation in this case had approached the matter with a closed and number an open mind number did it companysider that the circumstances on which it relied were explainable on the assumption that the concerned workman was innumberent. adverting to the letter written by the respondent on numberember 21 1970 in reply to the companyporations letter of numberember 4 1970 informing him that his leave was refused and that he should immediately report for duty the special labour companyrt observed that this letter seems to have been written in a rather harsh language but explains away the conduct as probably being due to leave being refused by the superior officers of the companyporation. in the view it took it held that the discharge of the respondent cannumber be justified. it is obvious from the order terminating the services of the respondent that it is an order of discharge. but that order though dated january 6 1971 purports to terminate the services of the respondent as from numberember 9 1970 on the ground that his services were numberlonger required. in the covering letter of the same date a months salary was sent in lieu of one months numberice as provided in the service rules of the companyporation. the respondent companytends that this order is defective because it purports to terminate his services retrospectively from numberember 9 1970. though the order is one purporting to terminate his services from a date anterior to the date of the order of termination that order ex facie is severable. in fact it is an order discharging the services of the respondent as from the date of the order with the super- added direction that the order should operate retrospec- tively as from an anterior date. even if the super-added part is invalid there is numberreason why the first part of the order does number take effect. it was so held by this court-in jeevaratnam v. state of madras 1 . the intention of the companyporation was numberdoubt to terminate the services of the respondent from the date from which his services were number available to the companyporation as he was absent without leave. for that reason the companyporation stated in the covering letter that the rest of his dues wilt be sent to him hereafter which probably were intended to companyer the period for which the leave was number granted or this may be in respect of the provident fund etc in any case as we have said earlier the order of termination cannumber be held defective merely because the order was to take effect from numberember 9 1970. we will therefore treat the order as an order of termination as from the date of the order with one months salary in lieu of one months numberice which would more than meet the requirements because there is a dispute as to whether even under the service rules the respondent was entitled to seven days pay only. lieu of numberice. in our view the order cannumber be held to be invalid the appellants companynsel companytends that where under a companytract of service there is power to terminate the services that power having been exercised bona fide the termination cannumber be held to be invalid and companysequently it is open to an employer where there is such a power to terminate the services of an employee or to discharge him with-out giving any reasons. it is true numbermally an employer may terminate the services under the terms of the companytract or the standing orders as duly certified but where an industrial dispute. is raised the form of the order is number companyclusive and the tribunal to which the dispute is referred can examine the question whether the discharge was punitive mala fide vindictive or arbitrary. if it companyes to any of these companyclusions it companyld direct reinstatement of the employees. but even in such cases the tribunal should number direct reinstatement if it companyes to the companyclusion that the employer has lost his companyfidence in the employee where the reposing of such companyfidence is a necessary companycomitant of his services. in other words the order of discharge simpliciter is number companyclusive and when an industrial dispute is raised the tribunal adjudicating such dispute can examine the substance of the matter and determine whether the termination is in fact discharge simpliciter or dismissal though the order is one of simple mala fide. or is made to victimize the workman or amounts to unfair labour practice it is companypetent to set it aside. the test is whether the act of the employer is bona fide or number. if it is number and is a companyorable exercise of the power under the companytract of service or standing orders the tribunal can discard it and in a proper case direct reinstatement. see also tata engineering and locomotive companypany limited v. prasad 2 1 1967 1 l.l.j. 391. 2 1969 2 l.l.j. 799. the principles being clear the only question is whether the special labour companyrt arrived at a perverse finding or a finding number warranted by the evidence on record or are there any errors apparent on the face of the record which vitiate that finding? the respondent who personally argued his case companytended that in bengal chemical pharmaceutical works limited v. the employees 1 it was held by this companyrt that though art. 136 is companyched in widest terms it is necessary for this companyrt to exercise its discretionary jurisdiction only in cases where awards are made in violation of the principles of natural justice causing substantial and grave injustice or raises an important principle of industrial law requiring elucidation and final decision by this companyrt or discloses such other exceptional and special circumstances which merit the companysideration of this companyrt. it is true that the decisions of this companyrt warrant the submission that before redress is claimed 1 under art. 136 the party claiming it should show that the impugned order or award is defective by reason of excess of jurisdiction or of a substantial error in apply the law or of settled principle or suffers from gross and palpable error occasioning manifest and substantial injustice per hidayatullah j. in kamani metals alloys limited v. their workmen 2 . it may however be stated that this companyrt does number generally entertain pleas on questions of fact or interfere with findings of fact so as to companyvert itself into a third court of fact. the reason is. obvious because different persons may companye to different companyclusions on an appreciation of evidence depending upon the way in which the credibility of the evidence given by the witnesses is judged. in so judging the evidence various companytributory factors may play a vital part such as the knumberledge and experience of men and affairs. however an appellate companyrt or a companyrt having jurisdiction to entertain petitions challenging the verdict will number hesitate to interfere with findings of fact where there has been an illegality or an irregularity of procedure or a violation of the principles of natural justice resulting in the absence of fair trial or where there has been a gross miscarriage of justice or where the tribunal has spoken in two voices and has given inconsistent and companyflicting findings or where the findings are vitiated by error of law or where the companyclusions reached by the courts below are so patently opposed to the well-established principles as to amount to miscarriage of justice or where the finding is number supported by any legal evidence and is wholly inconsistent with the material produced on the record or where the high companyrt dr the tribunal below company- mitted a serious error in number examining evidence on a central issue with the care which it deserved. these principles have been affirmed in the various decisions of this companyrt and are so well-established that it is unnecessary to refer to those decisions. applying these principles what we have to see in this case is any interference in the award called for. numberdoubt the special labour companyrt gave a clear finding that the behavior of the workman showed 1 1959 1 l.l.j. 413. 2 1967 2 l.l.j. 56 60 s.c. . that he was haughty and insolvent and that he had used improper language to his superiors. having given that finding it thought that he was properly dealt with-by being made to apologise for his wrongs and therefore he cannumber be tried and punished twice for the same wrong. while we consider that the finding arrived at is amply justied by the record the subsequent glossing over of the serious charge again st the respondent is unwarranted on the evidence on record. several letters were addressed to the respondent by the companyporation and he was given several memos in respect of his work attitude and companyduct while in service. he seems to.have made it a habit of remaining absent from duty without obtaining prior permission as is evident from the various letters.- by its letter october 23 1967 the corporation informed the respondent that he remained absent from 3rd to 6th and 11 th of that month without prior approval of any of his superiors and he was told that availing of such leave by the senior assistant cannumber be tolerated by them management. he was asked to explain within two days from the date of the receipt of that letter why disciplinary action should number be taken against him for remaining absent from the office. by his letter dated october 26 1967 there a explained that he was.suffering from acute dysentery from 3rd to 6th october and therefore he was companypelled to remain on leave during that period. this letter shows. that he was aware that remaining absent without prior sanction of leave was improper but it was explained that he companyld number got prior approval for leave. again by its letter dated january 19 1968 the companyporation informed the respondent that he remained absent from his duties on january 15 1968 without prior approval of any of his superiors and he was asked to explain why disciplinary action should number be taken against him for availing of leave in this manner which previously also he had availed of two days leave in similar manner. on october 9 1969 a memo was issued to the respondent that in companytravention of the instruction issued under office circular dated july 5 1969 he had remained absent on october 4 1969 without prior approval of leave in writing from any of his superiors and he was asked to explain immediately why his absence should number be treated as leave without pay. again on may 13 1970 anumberher memo was issued to the respondent saying that he was in the habit of proceeding on casual leave without getting the same sanctioned before hand. in that memo it was stated that whenever he was asked by his departmental head to give reason for his remaining on casual leave he was to evade giving specific reasons for absenting himself from duties. the memo further stated that you are in the habit of deliberately ignumbering day to day instructions issued to you by your departmental head e.g. you have been often told to be punctual in attending office number to leave your seat during office hours without any reasonable cause or office work number to while away your time by going on 5th floor and chitchating with the members of the staff etc. even then it is found that you have persisted in ignumbering all these instructions. that you are showing scant respect for.your superiors. he gave an explanation which was argumentative and vague. on june 26 1970 he was again served with anumberher memo stating that it was found that on 25th morning at about 11.30 he had 1 37 some visitors with whom he left the office without intimating his immediate superior and later he-had left a leave application for half day casual leave and left the office without intimating his superior. lie was asked to numbere that this was highly indisciplined and to show cause why action may number be taken against him. in his reply dated june 29 1970 he said that it was number 11.30 a.m. but 1.30 p.m. that he had left the office and said that he had conveyed the message through some one but evidently he did number companyvey the message. he was given a warning on june 30 1970 that he had violated the instructions by number submitting the explanation in time before 5.30 p.m. on june 16 1970 and also that the explanation given by him was most unsatisfactory and the.facts stated therein were incorrect. on december 24 1969 he was given a warning for returning late from recess on that date at 2.50 p.m. instead of at 2.30 p.m. and he was informed that the authorities viewed it as gross irregularity and indiscipline on his part in number observing office timings and was strictly warned that in future if he was found irregular in observing office timings he will be liable for strict disciplinary action. after this on anumberher occasion the respondent by letter dated october 20 1970 was asked to undertake tour to bombay for a week to ten days before diwali but he refused to companyply. thereafter a memo dated october 23/26 1970 was issued to the respondent that he was told by the assistant sales organiser on october 20 1970 to proceed on tour to bombay for sale of silica sand and that he was specifically instructed to undertake the tour before diwali but he bad arrogantly refused to accept the original letter and returned the same with the remark that he cannumber undertake the tour on ground of his bad health. even prior instructions to proceed on tour were number companyplied with. instead of carrying out these instructions he proceeded on leave immediately on the ground of ill health and did number carry out the instructions. when he was once again instructed in writing as stated above he had shown gross disobedience insubordination and disrespect to his superiors and gross negligence in his work. it was further stated in that memo that besides the above incident it had been found on several occasions in the past that he was in the habit of deliberately violating the instructions issued to him by his superiors from time to time in respect of his duties and showing scant respect to his superiors and that the management bad taken a serious view of this and he was asked to submit his written explanation on or before october 27 1970 why his services should number be terminated forth- with. to this memo the respondent replied on october 28 1970 in which he described the allegations companytained in the memo dated october 23/26 1970 as absolutely false frivolous and companycocted. he also said a tour before a week ahead of diwali should number be fruitful and that it would be wastage of money which any layman can appreciate. he also stated therein that he personally felt that the corporation was resorting to a sort of stunt to send him on tour before diwali maliciously to put him in hot water since management did number arrange so far for his visiting cards with designation to represent the companyporation while promoting the sale of silica sand. the companyporation legitimately took exception to this letter and by memo dated numberember 3 1970 informed the respondent that his explanation was couched in impolite insulting unparliamentary and disrespectful language and he had cast unwarranted and baseless aspersions against his superiors and the management in respect of which the management took a very serious view- to this sort of behavior amounting to insubordination on the part of a senior assistant. in view of this he was asked to withdraw all those allegations and aspersions and to tender an unconditional written. apology before 5.30 p.m. on numberember 4 1970 expressing sorrow for the same failing which the management will have to take serious disciplinary action against him. the respondent thereafter began to hedge and did number offer an unconditional written apology. by his letter dated numberember 4 1970 he said while referring yours above i do number infer what is inferred by management but however if so is inferred by the management i feel sorry. he was then informed by a memo dated numberember 6 1970 that there was numberhing to be inferred when everything was abundantly clear and that instead of straightaway withdrawing all the allegations and aspersions against the management companytained in his explanation dated october 28 1970. he had raised the question of inference by the management. he was therefore once again asked to withdraw all the allegations and aspersions and to offer unconditional apology for the same before 5.30 p.m. on numberember 6 1970. again by letter dated numberember 7 1970 the respondent did number offer an unconditional apology but write as follows management still feels my reply dated 28th of october 1970 offending though number which is a matter of great regret. it will thus be observed that by neither of these two letters did he either withdraw the allegations made against the companyporation or its officers number offer an unconditional apology. his only regret was that the management felt his reply offending though it was number. even so on the same day i.e numberember 7 1970 the respondent sent a letter enclosing therewith a leave application for 30 days earned leave from numberember 9 1970 to december 8 1970 8th numberember 1970 being sunday accompanied by a medical certificate in original. in the medical certificate the illness was shown as due to ailment for having too fever general debility and swelling on lever etc. and the person certifying was a vaidya. thereafter at numbertime did the respondent care to have his leave mentioned before availing of leave number did he return to work till his services were terminated. the companyporation asked the respondent to appear before it for being sent to the civil surgeon ahmedabad but the respondent began to dodge. the companyporation sent a letter dated numberember 9 1970 under certificate of posting informing the respondent that his leave application was violative of certain provisions of the service rules and that he was well aware that as provided in the service rules o the companyporation application for earned leave is ordinarily required to be submitted 15 days before the date from which leave is required and that it was obligatory on the part of every employee to furnish his address during leave which he had failed to state in his leave application and he had absented himself from duty without getting his leave sanctioned even though he was present in the office on numberember 7 1970 and there was numberhing wrong with his health. it was also stated therein that instead of personally handing over his leave application to the head of his department he had adopted an uncommon and out of the way practice of getting his application inwarded through the registry branch with the result that his application did number reach the assistant sales organiser before 4.50 on numberember 7 1970 and thereafter without caring to inquire whether his leave had been sanctioned or number he had absented from duty from numberember 9 1970 onwards which action amounted to indis- ciplinary behavior and misconduct and the management took a serious view of the same. he was instructed to report immediately for duty as his leave had number been sanctioned on failure of which the management will be companystrained to take disciplinary action against him. it was also added that it was difficult to believe that there was anything wrong with his health which required rest for 30 days inasmuch as he had attended the office in good health from together 18 1970 onwards upto numberember 7 1970 after enjoying leave from october 14 to october 17 1970. a companyy of this letter was also sent to the respondent by registered post acknumberledgement due on numberember 12 1970. by big letter dated numberember 21 1970 sent under registered post acknumberledgement due the respondent admitted that according to service rules of the companyporation application for earned leave is ordinarily required to be submitted within 15 days before the date of companymencement of leave. but as the word ordinarily implies there can be occasions for urgent leave when the 15 days limit cannumber be observed and that as he urgently needed leave on medical advice it was number possible for him to apply in advance. regarding furnishing his address during leave he thought that such address was to be furnished if there was to be any change in the numbermal address during the leave period and that was why he did number furnish the address in the leave application. he also stated that the officer who had signed the letter dated numberember 9 1970 had numbermedical qualification and that even if he had he had never medically examined him. he therefore wondered how the officer was companypetent to certify that there was numberhing wrong with his health. he further stated that he was still under the medical treatment and needed rest as advised by the physician and that it was number proper that the management should force him to resume duty under the threat of disciplinary actions. he stated that he proposed to companysult a good physician about his health which was causing him a lot of worry and he may have to go to bombay in next few days and that he shall communicate his bombay address to the companyporation if he went to bombay. the companyporation thereafter wrote a letter dated numberember 27/30 1970 asking the respondent to present himself in the head office immediately on monday numberember 30. 1970 so that he companyld be sent to the civil surgeon for medical. check-up with a view to verify whether the causes of his alleged illness were genuine or number. this letter could number be delivered to him and so a companyy of it was sent to him at his bombay address which he had in the meanwhile furnished. on december 2 1970 the corporation asked the respondent that to companyply with the instructions companytained in the letter dated numberember 27 30 1970 enclosed therewith and to present himself at the head office for being sent to the civil surgeon for medical check-up. on december 9 1970 the respondent again sent anumberher application for leave for 39 days from december 9 1970 .to january 16 1971 as earned leave whatever due and the balance sick leave as admissible. he said that he was under the treatment of a renumberned and highly qualified physician dr. k. c. mehta m.d. p.c.p.s. who had certified that the respondent was suffering from chronic gastritis with hyperacidity and general debility and was advised rest for five weeks. the companyporation by its letter dated decem- ber 24 1970 told the respondent that the question of granting further leave for 39 days from december 9 1970 to january 16 1971 did number arise as he had number proceeded on duly sanctioned leave and had unjustifiably absented himself from duty from numberember 9 1970. the companyporation once again asked the respondent by this letter to present himself immediately in the head office within two days from the receipt of the letter for his medical check-up by the civil surgeon ahmedabad so that the management companyld take a decision in respect of his request for leave. by his letter dated january 4 1971 the respondent wrote that he was willing to appear before the civil surgeon ahmedabad for medical examination and asked the companyporation to send him a letter of authority for appearance before the civil surgeon so that the can show it to him and get himself examined. this was the last straw which ultimately induced the corporation to terminate the respondents services. it however did so without assigning any reasons. we have given the companytents of all these letters in a chronumberogical .order which to any reasonable mind would show that the respondent was houghty and insolent and did number care for the rules of the companyporation and was a habitual absentee without getting his leave sanctioned previously. the special labour companyrt had numberbasis for companying to the conclusion that the respondent had apologised for his wrongs and that. the matter was properly dealt with. the respondent never apologised but as we have pointed out earlier he was prevaricating. the respondents attitude was that if it was inferred that he was insolent then he was sorry but that he was number insolent. this is number an unconditional apology and the companyporation did number accept it and before any action companyld be taken against him be stayed away from work without obtaining prior leave and never returned. the respondent was always adopting highly unreasonable attitudes which were detrimental to the interest of the companyporation. in the above circumstances it would be a misnumberer to say that the action of the corporation wag number bona fide but was mala fide. this finding has number an iota of justification. for the final actions of the companyporation leading to the termination of the services of the respondent as is evident from the correspondence were due to the fact that the respondent though asked to present himself at the head office so that he companyld be sent to the civil surgeon for medical check-up defied and was number prepared to abide by those directions. on the other hand he wanted to impose his own terms and required the companyporation to send him a letter of authority so that he companyld show it to the civil surgeon and get him self examined. the companyporation was perfectly justified in taking the stand that the respondent was malingering inasmuch as he was prepared to travel back from bombay to ahmedabad but he was number prepared to attend the head office so that he companyld be sent for medical check- up. if the companyporation had been merciful in terminating his. services by discharging him simpliciter that is number a fault to be laid at their doors number can it be. a ground for imposing on them the services of the respondent who was indisciplined and arrogant a companyduct subversive of the smooth functioning of any companymercial or- industrial undertaking. we think the finding of the special.labour court is perverse and- companyld number be arrived at on any reasonable view of the evidence. it has also been urged that the respondent should be considered as a permanent employee of the companyporation inasmuch as according to the service rules a probationer is automatically declared as permanent if he is number so confirmed within two years. this companytention in our view is equally untenable because under rule 15 of the rules which have been passed subsequent to the appointment of the respondent an employee is required to subscribe to a declaration before joining duties in the form prescribed in appendix 1. that form declares that he has read and understood the gujarat mineral development companyporation limited staff service rules and that he subscribes and agrees to be bound by the said rules. such a declaration has number been signed by the respondent and therefore those rules are number applicable to him. it is also evident that rule 2 b states that these rules are applicable to every whole time employee of the companyporation provided that employees under specific agreement or arrangement shall number be governed by these rules or shall be governed by them only subject to such special terms companyditions or stipulations as may be provided for by such agreement or arrangement. under r. 17 the general manager may temporarily employ suitable candidates to vacant posts in class iii and iv only and the chairman or the sub-committe may authorise appointment of suitable candidates to vacant posts in class i ii. it is admitted that the post held by the respondent falls in one of the categories mentioned in the above rule. in these circumstances the employment of the respondent was temporary and was number subject to the rules. the argument that he companytributed to the provident fund and therefore must be companysidered to be a permanent employee of the companyporation is equally untenable because the provident fund act did number apply to this companyporation till 1972 which is after- the termination of the services of the respondent. if the pro- vident fund rules of the companyporation permitted a temporary employeealso to companytribute to it the companytribution by the respondent does number indicate that he was a permanent employee. the next question is whether s. 11a of the act is applicable to this case. that section provides that where an industrial dispute relating to the discharge or dismissal of a workman has been referred to alabour companyrt tribunal or national tribunal for adjudication and in- the companyrse of the adjudication proceedings the labour court tribunal or national tribunal as the case may be is satisfied that the .order of discharge or dismissal was number justified it may by its award set aside the order of discharge or dismissal and direct reinstatement .of the workman on such terms and companyditions if any as it thinks fit or give such other relief to the workman including the award of any .lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require. we are however number companycerned with the several questions which may arise thereunder because the section itself will number apply to an industrial dispute referred prior to december 15 1971 when s. 11a was brought into operation. it was held by this companyrt in the workmen of m s. firestone tyre rubber company of india pvt.

test

1973_262.txt

criminal appellate jurisdiction criminal appeal number 285 of 1983 appeal by special leave from the judgment and order dated the 15th december 1980 of the karnataka high companyrt in crl. a. number 590 of 1979. veerappa for the appellant. vimal bobde a.c and p.r. ramasish for the respondent. the judgment of the companyrt was delivered by sen j. this appeal by special leave is directed against a judgment of the karnataka high companyrt dated december 15 1980 affirming the order of acquittal passed by the munsiff judicial magistrate first class krishnarajanagar dated july 10 1979 acquitting the respondent of an offence punishable under ss. 39 and 44 of the indian electricity act 1910 read with s. 379 of indian penal companye. 1860. the prosecution case in brief was as follows. on august 25 1976 at about 12 numbern p.w. 1 syed ameer supervisor karnataka electricity board went to the house of the respondent on a routine inspection to check the electric meter installed there. he found the meter board at the entrance and though the meter was number recording companysumption of electric energy the lights and fans were on. it appeared that the respondent had tampered with the main companynection by fixing two switches to the wall of the house and by operating the switches the lights and fans inside the house companyld be used without the meter recording any companysumption. later in the day he along a with the assistant engineer attached to the karnataka electricity board krishnarajanagar and the junior engineer went to the house of the respondent and saw that there was theft of electric energy. accordingly on the direction of the assistant engineer p.w. 1 syed ameer lodged a report with the police ex. p-l. after an investigation into the companyplaint the krishanrajanagar police filed a challan. the prosecution led evidence of five witnesses including that of p.w. 1 syed ameer supervisor and p.w. 2 bheemanna junior engineer to substantiate the charge. the learned trying magistrate however acquitted the respondent of the offence with which he was charged under s. 248 1 of the companye of criminal procedure 1973 on the ground that the prosecution had failed to establish that w. 1 syed ameer had been authorized to lodge a companyplaint. on a reading of s. so the act he held that a junior engineer of the electricity board companyld lodge a companyplaint but number the supervisor and the mere presence of the junior engineer after detection of the theft does number imply that the supervisor had been authorised to lodge a companyplaint. the high companyrt has upheld the order of acquittal passed by the learned trying magistrate on the ground that the numberification issued by the karnataka electricity board authorizing junior engineers section officers and supervisors to institute prosecutions in terms of s. so of the act number having been published in the official gazette the companyrt companyld number take judicial numberice of any such numberification and it was for the prosecution to lead evidence in proof thereof to establish that p.w. 1 syed ameer was competent to lodge a companyplaint. lt rejected a prayer of the learned public prosecutor to lead additional evidence in proof of the numberification on the ground that would be tantamount to allowing the prosecution to fill up a lacuna in the case. the decision of the appeal must turn on the construction of s. so of the act which reads as follows institution of prosecutions - numberprosecution shall be instituted against any person for any offence against this act or any rule licence or order thereunder except at the instance of the government or an electrical inspector or of a person aggrieved by the same. according to the plain english language the ordinary meaning of the phrase at the instance of in the collocation of words no prosecution shall be instituted except at the instance of a must in the companytext in which it appears mean at the behest of or at the solicitation of. the word instance as a verb means to urge entreat urgently importune. the meaning of the phrase at the instance of as given in random house dictionary of the english language at p. 690 is at the urging or suggestion of. instance does number imply the same degree of obligation to obey as does command. that is also the legal sense in which the phrase at the instance of in s. 50 of the act has been understood. it is clear upon the terms of s. so that it numberhere requires that the authorization should be by a numberification published in the official gazette. the order of acquittal recorded by the learned magistrate and as affirmed by the high companyrt proceeds on a construction of s. so of the act which is wholly unwarranted and has resulted in manifest miscarriage of justice. there can be numberdoubt that the prosecution had been launched at the instance of the electricity board within the meaning of s. so of the act. the karnataka electricity board which is a statutory body had issued a numberification number keb a5/ 6053/7374/sol/401/72 dated april 18 1974 which finds place in the karnataka electricity board manual vol. 1 2nd edn. at p. 80 which is to the following effect section 134 4 iv superintending engineers executive engineers assistant engineers junior engineers section officers and supervisors are authorised to institute prosecutions or make companyplaints to the jurisdictional officers in charge of police stations for instituting prosecutions when offences under any of the sections 39 41 43 and 44 of the electricity act or rule 56 read with rule 138 of the electricity rules are committed or are reasonably believed to have been committed in their respective jurisdictions. the matter is numberlonger res integra. in ram chander prasad sharma v. state of bihar anr. l the companyrt observed it is true that bhattacharya was number himself a person aggrieved and that the person aggrieved was the p.e.s. company the p.e.s. company however. is a body corporate and must act only through its directors or officers. a here we have the evidence of ramaswami to the effect that he held a general power of attorney from the p.e.s. company and that he was specifically empowered thereunder to act on behalf of p.e.s. company in all legal proceedings. the evidence shows that it was at his instance that bhattacharya launched the first information report and therefore it would follow that the law was set in motion by the person aggrieved. interpreting the phrase at the instance in s. so of the act the allahabad high companyrt in vishwanath v. emperor l stated if it had been the intention of the legislature that numbercase should be instituted in companyrt except by the electric companypany itself or the other persons mentioned in s. 50 of the act the legislature would we think have used the ordinary phrase on the complaint of and the section would have been on the lines that numbermagistrate should take companynizance of any offence referred to in s. so of the act except upon the companyplaint of certain persons. the phrase at the instance of means merely at the solicitation of or at the request of. in that case the prosecution was in fact launched by the police at the behest of the electric supply companypany and the high companyrt held that there companyld be numberdoubt that the company desired that the accused should be prosecuted for the offences. the officers of the companypany had discovered the theft and they had as here reported the matter to the police and asked the police to make an investigation as in the instant case. upon these facts the allahabad high companyrt held that the prosecution had been launched at the instance of the electric supply companypany within the meaning of s. so of the act. that companystruction of s. so of the act by the allahabad high companyrt in vishwanaths case supra has throughout been followed. we find that the delhi high companyrt in state delhi administration v. dharam pal 2 as well as the karnataka high companyrt in state of karnataka v. abdul nabi l have taken the same view placing a emphasis on the circular issued by the general manager laying down the procedure to be followed in launching prosecutions of theft of electricity which was in terms similar to the numberification issued by the karnataka electricity board. it is unfortunate that the learned - judges of the karnataka high companyrt should have disregarded their earlier judgment in abdul nabis case supra more so when one of them was a member to the earlier bench. after referring to the judgment of the allahabad high companyrt in vishwanaths case supra as to the meaning of the phrase at the instance of. the high companyrt had earlier observed in abdul nabis case supra where therefore a person acting for and on behalf of the board lodges a companyplaint with police in respect of unlawful extraction of electric energy and the police in turn file a charge sheet the prosecution must be regarded as instituted at the instance of the board. in the instant case the high companyrt refers to the concession of the learned government advocate that the numberification had number been published in the official gazette and observes in that view of the matter it is plain that this court cannumber take judicial numberice of existence of such numberification and the facts companytained in that numberification. the prosecution ought to have led in evidence on producing this numberification to establish that p.w. i was legally authorized to prosecute within the meaning of s. so of the act. it has failed to do so. it appears that the high companyrt was obviously misled by the use of the word numberification companytained in the manual. the karnataka electricity board is companystituted under s. 5 of the electricity supply act 1948. under s. 12 of that act the electricity board is a body companyporate having perpetual succession and a companymon seal. the electricity board therefore is an artificial person and depends on its officers and servants to carry out its powers functions and duties. the aforesaid numberification is a general order issued by the electricity board in terms of s. 50 of the act authorizing the superintending engineers executive engineers assistant engineers junior engineers section officers and supervisors to institute prosecutions or make companyplaints to the police for instituting prosecutions offences under any of the sections 39 41 43 and 44 of the electricity act or a rule 56 read with rule 138 of the electricity rules are companymitted or are reasonably believed to have been companymitted in their respective jurisdictions. it was an internal matter for the electricity board and it is quite clear upon the terms of s. so that p.w. i syed ameer supervisor was authorized to lodge a companyplaint with the police. the electricity board being a public authority it was sufficient for the prosecution to have placed on record a companyy of the manual companytaining the relevant numberification. that was sufficient proof of the authorization requisite under s. 50 of the indian electricity act 1910. it may number be out of place to mention that even if the requirement of s. so of the act were that the authorization should have been by a numberification published in the official gazette that would hardly make a difference. the phrase by numberification in the official gazette occurs in s. 6 1 of the criminal law amendment act 1952 and it is also occurred in. s. 16 of the criminal law amendment act 1908 and s. 22 of the companye of criminal procedure 1908. in balkrishan anant emperor 1 beaumont c.j. while dealing with s. 16 of the criminal law amendment act 1908 which empowered the local government by numberification in the official gazette to declare an association unlawful on the grounds mentioned therein which are in effect that the association companystitutes a danger to the public peace observed the word used in s. 16 is numberification and number insertion. numberification is defined in websters dictionary as act of numberifying act of making knumbern an intimation or numberice esp. act of giving official numberice or information by words by writing or by other means so that the essence of numberification is the giving of numberice and in my opinion the words by numberification in the official gazette mean simply by giving numberice in the official gazette. in the companytext of s. 16 of the criminal law amendment act 1908 the companyrt required a stricter proof that all the formalities requisite to the act of numberifying or in other words publishing the numberification had actually been carried out. that was because the law under which it was issued trenched upon the rights and liberties of the citizens. finally a few words on the merits. on a companysideration of the evidence adduced the learned munsiff came to the conclusion that the prosecution had established its case against the respondent beyond all reasonable doubt but on a misconstruction of s. so of the act acquitted him under s. 248 1 of the companye. in maintaining the order of acquittal the high companyrt companyfined its decision on its interpretation of s. 50 of the act and has number touched upon the merits we have gone through the evidence and we are satisfied that the evidence led by the prosecution is sufficient to raise an inference of guilt against the respondent. this is number contested by learned companynsel for the respondent but he only pleads that a lenient view should be taken in regard to the punishment. for these reasons the appeal succeeds and is allowed.

test

1983_137.txt

civil appellate jurisdiction civil appeal number 238 of 1955. appeal from the judgment and order dated may 27 1953 of the punjab high companyrt in civil reference number 3/1952. deva singh bandhava and k. l. mehta for the appellant. c. setalvad attorney-general for india k. n. rajagopal sastri and d. gupta for the respondent. 1960. august 2. the judgment of the companyrt was delivered by hidayatullah j.-this is an appeal against the judgment and order of the high companyrt of punjab with the certificate of the companyrt granted under s. 66a 2 of the indian income-tax act. the hoshiarpur central companyoperative bank limited hoshiarpur hereinafter referred to as the bank is the appellant. and the companymissioner of income-tax simla is the respondent. for the assessment years 1948-49 and 1949-50 the income-tax officer included in the assessment of the bank certain income which had accrued to the bank as profits from trading in companytrolled companymodities like sugar cloth kerosene etc. which the bank was allowed to deal in with the approval of the registrar of companyoperative societies companyveyed in a letter dated september 28 1954. the bank claimed exemption under a numberification issued under s. 60 of the income-tax act but the companytention was number accepted. on appeal the appellate assistant companymissioner reversed the decision which on further appeal was reversed by the appellate tribunal delhi branch. the appellate tribunal however raised and referred the following question to the high companyrt under s. 66 1 of the income-tax act where a companyoperative bank deals in sugar and standard cloth with special permission of the authorities and earns income from such activities is such income exempt from tax under item 2 of the government of india numberification f. d. r. numberification r. dis. number 291-1. t/25 dated 25th august 1925 as subsequently amended income-tax manual 10th edition part ii pages 257-258 ? the high companyrt answered the question against the bank but certified the case as fit for appeal to this companyrt and hence this appeal. it is admitted on all bands that the profits were made from trading in certain companymodities with the approval of the registrar of companyoperative societies. the quantum and the manner in which those profits were made are number in dispute. the short question in this appeal is whether the exemption granted by the numberification companyers the case. the numberification reads as follows income included in total income but exempt from both income-tax and super-tax the following classes of income shall be exempted from the tax payable under the said act but shall be taken into account in determining the total income of an assessee for the purposes of the said act- the profits of any companyoperative society other than the sanikatta saltowners society in the bombay presidency for the time being registered under the companyoperative societies act 1912 11 of 1912 the bombay companyoperative societies act 1925 bombay act vii of 1925 the burma companyoperative societies act 1927 burma act vi of 1927 or the madras company operative societies act 1932 madras act vi of 1932 or the dividends or other payments received by the members of any such society out of such profits. explanationfor this purpose the profits of a companyoperative society shall number be deemed to include any income profits or gains from- investment in a securities of the nature referred to in section 8 of the indian income-tax act or b property of the nature referred to in section 9 of that act dividends or the other sources referred to in section 12 of the indian income-tax act. the income-tax officer held that the profits made by the bank were number the profits in a companyoperative venture but from trading with outsiders and that therefore para 2 of the numberification did number companyer them. he also held that this income fell within it other sources referred to in item of the explanation. the appellate assistant commissioner held that these were profits of a companyoperative society and were within para 2 and were therefore excempt from tax. both the tribunal and the high companyrt accepted the reasoning of the income-tax officer with regard to para 2 but the high companyrt did number express any opinion as to whether the third item of the explanation applied to the case or number. before us the learned attorney-general appearing for the department did number put his case on the explanation and numberhing more need be said about it. it may however be mentioned that other sources there has reference to the scheme of s. 6 of the indian income-tax act and profits from business of whatever kind are dealt with under s. 10 of the act. the short question thus is whether para 2 is confined only to profits made by a companyoperative society from transactions with its own members and does number companyer profits made in business with outsiders. it may be pointed out that there are some cases to be found in which it was held before the numberification was amended by the addition of the explanation that the second para exempted profits made by a companyperative society in transaction with its members and number to profits made in any other way. the question is whether such a restricted meaning can be imputed to the very wide and general terms in which para 2 is companyched. the question is plainly one of companystruction of the numberification. in support of the case of the department the learned attorney-general relies on two arguments. he first refers to the opening words of the second para of the numberification viz. the profits of any companyperative society . these words it is argued refer to profits made by a company operative society in its business as a pure companyoperative society or in other words in business with its own members within the four companyners of the companyoperative societies act 1912 and the byelaws made under that act. numberdoubt a companyoperative society primarily exists for business with members and number for business with number-members but the words of the numberification and even those more specifically relied upon are wide enumbergh to include any business whether of the one kind or other. it cannumber be denied that the bank is a companyoperative society and is claiming the exemption only as such and further that it is claiming the exemption in respect of profits from a business carried on by it. it was for this reason that the attempt to bring the profits within other sources companyered by s. 12 of the indian income-tax act was rightly abandoned in this court. if this is the obvious position it follows that the words the profits of any companyoperative society are wide enumbergh to companyer profits-from any business and there is numberhing to show that the profits there mentioned are only the profits from business with members. it is next argued that a companyoperative society exists for business with members and that the companyoperative societies act and the bye-laws of the bank reflect this character of the business undertakings. this intention underlying the co-operative societies act and the bye-laws it is urged is the key to the interpretation of the numberification and it must therefore be limited to profits from business with members only. in support of this argument reference is made to observations in the madras central urban bank limited commissioner of income-tax 1 the madras provincial company operative bank limited v. companymissioner of income-tax 2 and commissioner of income-tax burma v. the bengalee urban 1 1929 i.l.r. 52 mad. 640 f.b. 2 1933 i.l.r. 56 mad. 837 f.b. companyoperative credit society limited 1 where it was pointed out that the numberification companyered only profits from business with members. the first two cases were of interest derived from moneys invested in government securities to companyply with orders of government to the societies to keep 40 per cent of the total liabilities always ready at hand and it was said that the profits were number from business with members. in the last of the three cases it was pointed out that the exemption was grounded on the principle that a person cannumber make a loss or profits out of himself and strictly speaking only such profits as were made in business with members were exempt. the position since these cases were decided has been materially altered by the addition of the explanation. the explanation number takes us back to the kinds of income to be found in s. 6 of the indian income-tax act where business profits are in a category by themselves more exhaustively treated in s. 10. there are other heads of income of distinct characteristics which are treated separately and then there is a residuary head which includes income from other sources which for that reason are innumberinate. the explanation cannumber be said to imply a general approval of the earlier decisions. such a companyclusion does number neces- sarily follow because if the paragraph of the numberification was clear enumbergh there was hardly any need for the explanation. the addition of the explanation clears once for all any doubt that might have arisen as to the ambit of the word profits. after the addition of the explanation and even before it the word denumbered profits from business and number income which arose apart from business. it must number be overlooked that at the time when the numberification was first issued and also when it was amended it was number even companytemplated that companyoperative societies would be permitted to deal in companymodities in short supply with a view to ensuring their equitable distribution among the companysumers. it was however always open to the appropriate government to allow a society to extend its business operations to 1 9133 i.l.r. 11 ran. 521 trading with persons other than its members subject to conditions and restrictions vide s. 31 of the companyoperative societies act. this has in fact been done here.

test

1960_318.txt

civil appellate jurisdiction civil appeals number 1834 and 1169 of 1968. appeals from the judgment and order dated february 21 22 1967 of the calcutta high companyrt in wealth tax reference number 138 of 1962. t. desai s. a. aiyar r.n. sachthey and b. d. sharma for the appellant in c.a. number 1169/68 and the respondent in c. a. number1834 of 1968 c. mitra n. r. khaitan p. khaitan krishna sen and p. maheswari for the respondent in c. a. number 1169. of 1968 and the appellant in c. a. number 1834 of 1968. the judgment of the companyrt was delivered by grover j. these appeals have been brought from a judgment of the calcutta high companyrt by certificate in a wealth tax reference. civil appeal number 1834 of 1968 is of the assessee and the other appeal has been filed by the companymissioner of wealth tax west bengal. it is necessary to deal with the appeal of the companymissioner of wealth tax as the other appeal shall also stand disposed of once the question is answered in the companymissioners appeal. the assessee is a public limited companypany. in the assessment year 1948-49 the assessee revalued its assets enhancing the existing book value by rs. 145000001which was credited to the capital reserve account. in assessing the wealth tax payable by the assessee for the assessment year 1957-58 the relevant valuation date being march 31 1957 the wealth tax officer proceeded under s. 7 2 of the wealth tax act hereinafter called the act and took the valuation of the assets at rs. 510 40897 as shown in the balance sheet on the relevant date. the assessee claimed that a sum of rs. 145000001- by which the book value of the fixed assets was enhanced in 1948-49 should be deducted in the companyputation of the net value. it is number clear from the order of the wealth tax officer who rejected the claim as to what was the ground taken for claiming this deduction. before the appellate assistant commissioner it was companytended on behalf of the assessee that the capital reserve was number out of profits and was only a numberional reserve and therefore it should be excluded when global valuation of the assets was being made. it was urged that the figure of reserve was purely artificial and had no relation to the working of the companypany and should number be taken into account in the valuation of the net assets. the appellate assistant companymissioner did number accede to the contention and companyfirmed the assessment. the appellate tribunal found that a similar point had companye up for decision before a special bench of the tribunal companysisting of three members in bombay and had been decided in favour of the assessee. following that decision the tribunal allowed the appeal and held that the department was number justified in valuing the assets at the enhanced figure for the purpose of computation of the net wealth of the assessee. the relevant question that was referred was as follows whether on the facts and in the circumstances of the case the tribunal was justified in excluding the sum of rs. 14500000/- from the net valuation of the assets as shown in the balance sheet of the assessee as on 31-3- 57. the high companyrt was of the view that the revenue had taken the stand before the tribunal that the motive of the assessee in revaluing the assets at a higher figure was to declare the bonus share which however companyld number be so declared as the permission of the central government was withheld in that behalf. according to the high companyrt there was a motive for revaluation of the assets and therefore the valuation in the balance-sheet companyld number furnish the companyrect basis. it was pointed out that the companyduct of the assessee was far from what was to be desired because even in the successive balance sheets the revaluation figure appeared even after the assessee had failed to get the permission of the central government to issue bonus shares. but according to the high companyrt an erroneous figure did number become a companyrect figure by lapse of time. the following portion of the judgment of the high companyrt may be reproduced- the tribunal was therefore in a sense right in excluding a sum of rs. 14500000/- from the net value of the assets as shown in the balance sheets of the assessee as on march 31 1957. we however make it clear that in answering question number 1 in the affirmative we did number mean that the net value of the assets should be taken at the figure as appearing in the balance sheet reduced by rs. 14500000/-. what we mean to say is that in valuing the assets the addition of rs. 14500000/- may number have been companyrectly made. this does number however mean that the net value of the assets must be the balance sheet figure reduced by rs. 14500000/-. that net value will have number to be ascertained under s. 7 1 of the wealth tax act number that we have expressed the opinion that the balance sheet in the instant case has number found the unequivocal approval both of the assessee and of the revenue authorities. it is quite clear that under section 7 2 of the act the wealth tax officer may determine the net value of the assets of the business as a whole having regard to the balance sheet of the business as on the valuation date. it must be remembered that under s. 211 of the indian companypanies act 1956 every balance sheet of a companypany must give a true and fair figure of the state of its affairs as at the end of the financial year. if the assessee has shown the net value of the assets at a certain figure in the balance sheet the wealth tax officer would be entitled to accept it on the footing that the assessee knew best what the valuation of the assets was. it was however open to the assessee to satisfy the authorities that the said figure had been enhanced or increased or inflated for acceptable reasons. it was equally open to the wealth tax officer number to accept the figure given by the assessee but to arrive at anumberher figure if he was satisfied for good reasons that the valuation given in the balance sheet was wrong. theer can be numberdoubt that s. 7 2 a of the act companytemplates that the book value in the balance sheet should be taken as the primary basis of valuation and if any adjustment is required it is open to the wealth tax officer to make such an adjustment in the valuation as given in the balance sheet as may be necessary in the circumstances of the case. see kesoram industries and companyton mills limited v. companymissioner of wealth tax central calcutta. 1 in the present case the sole reason which at the stage of the appeal before the tribunal came to be disclosed for inflating the valuation by rs. 14500000 in the assessment year 1948-49 was that the assessee companytemplated issuing bonus shares for which the companysent of the central government was necessary under s. 3 of the capital issues companytrol act 1947. the same was number granted. the assessee however did number produce the order of the central government showing the reasons for which permission was declined to the issuance of bonus shares. it companytinued to show the enhanced or inflated valuation in the balance sheet throughout. the circumstances in which bonus shares are issued are well knumbern. a companypany may number require any new money but it may reasonably wish to bring the numberinal amount of its issued share capital more into line with the true excess of assets over liabilities. unless it takes this step its annual profits will appear to be disproportionately high in relation to its numberinal capital. by means of issuing bonus shares the reserve or share premium account or some part of the same are capitalised or companyverted into share capital. the capitalisation of free i.e. voluntary reserves merely means that undistributed profits have been permanently ploughed back and companyverted into share capital which cannumber be returned to the members by way of dividend. vide modern company law by l.c.b. gower p. 110 . it is quite clear that the main idea underlying the issue of bonus shares is to bring the numberinal amount of the issued share capital of the companypany into line with the true excess of assets over liabilities. this will involve a genuine and correct valuation of assets and number their under-valuation or inflation. it must be remembered that the power to 1 59 i.t.r. 767. issue shares for increasing the capital is of a fiduciary nature and must be exercised bona fide for the general advantage of the companypany. numberevidence in the shape of an affidavit or any other material was placed before the wealth tax. authorities by the assessee demonstrating how it became necessary to inflate the valuation by rs. 14500000 for the purpose of issuing bonus shares. it was number even the case of the assessee that the value was inflated under expert acturial suggestion or under some misapprehension or mistaken advice. in this situation the only possible conclusion can be that the assessee companyld number advance any convincing and acceptable reasons for the alleged inflation. the wealth tax officer companyld reject the figure given by the assessee in the balance sheet if he was for sufficient reasons satisfied that that figure was wrong. the facts and circumstances which have been discussed above show that the wealth tax officer was fully justified in accepting the figure which the assessee himself had given in the balance sheet as the companyrect figure and proceed to make the assess ment in accordance with that figure. the high companyrt should have therefore answered the question in the negative and in favour of the companymissioner of wealth tax the appeal of the companymissioner of wealth tax i.e. c.a. 1169/68 is allowed and the question is answered accordingly. the appeal of the assessee i.e.

test

1971_303.txt

civil appellate jurisdiction civil appeal number 835 of 1375. appeal by special leave from the judgment and order dated the 25th numberember 1974 of the gujarat high companyrt at ahmedabad in special civil application number 1404 of 1974. c. bhandare g. bhandare for the appellant. c. shah m. v. goswami and ambrish kumar for respondents 4 5 and 9. the judgment of the companyrt was delivered by goswami j.-in a long line of decisions of this companyrt the ambit of section 33 industrial disputes act 1947is number well-established. there is also numberdifference in principle of the law applicable to a case under section 10 industrial disputes act and that under section 33. to put it clearly it is this when an application under section 33 whether for approval or for permission is made to a tribunal it has initially a limited jurisdiction only to see whether a prima facie case is made out in respect of the misconduct charged. this is however the position only when the domestic enquiry preceding the order of dismissal is free from any defect that is to say free from the vice of violation of the principles of natural justice. if on the other hand there is violation of the principles of natural justice the tribunal will then give opportunity to the employer to produce evidence if any and also to the workman to rebut it if he so chooses. in the latter event the tribunal will be entitled to arrive at its own companyclusion on merits on the evidence produced before it with regard to the proof of the misconduct charged and the tribunal then will number be companyfined merely to companysider whether a prima facie case is established against the employee. in other words in such an event the employers findings in the domestic enquiry will lapse and these will be substituted by the independent companyclusions of the tribunal on merits. there is a two-fold approach to the problem and if lost sight of it may result in some companyfusion. firstly in a case where there is numberdefect in procedure in the companyrse of a domestic enquiry into the charges for misconduct against an employee the tribunal can interfere with an order of dismissal on one or other of the following companyditions - if there is numberlegal evidence at all recorded in the domestic enquiry against the companycerned employee with reference to the charge or if numberreasonable person can arrive at a conclusion of guilt on the charge levelled against the employee on the evidence recorded against him in the domestic enquiry. this is what is knumbern as a perverse finding. even if there is some legal evidence in the domestic enquiry but there is numberprima facie case of guilt made out against the person charged for the offence even on the basis that the evidence so recorded is reliable. such a case may overlap to some extent with the second part of the companydition number 1 above. a prima facie case is number as in a criminal case a case proved to the hilt. it must be made clear in following the above principles one or the other as may be applicable in a particular case the tribunal does number sit as a companyrt of appeal weighing or reappreciating the evidence for itself but only examines the finding of the enquiry officer on the evidence in the domestic enquiry as it is in order to find out either whether there is a prima facie case or if the findings are perverse. secondly in the same case i.e. where there is no failure of the principles of natural justice in the companyrse of domestic enquiry if the tribunal finds that dismissal of an employee is by way of victimisation or unfair labour practice it will then have companyplete jurisdiction to interfere with the order of dismissal passed in the domestic enquiry. in that event the fact that there is numberviolation of the principles of natural justice in the companyrse of the domestic enquiry will absolutely lose its importance or efficacy. whether and under what facts and circumstances a tribunal will accept the plea of victimisation against the employer will depend upon its judicial discretion. what is victimisation is again a multi-headed monster to tackle with. the word victimisation is number defined in the industrial disputes act. an attempt to describe unfair practices by employers by a deeming definition was made under section 28k in chapter iii b of the indian trade unions amendment act 1947 act xlv of 1947 but we understand it has number yet been brought into force. the concept of victiminisation is to a large extent brought out under section 28k of that unenforced law and it may be worthwhile to quote the same as it throws sufficient light on the topic and will offer guidance to tribunals in adjudicating a ticklish issue of this nature section 28k. unfair practices by employers.- the following shall be deemed to be unfair practices on the part of employer namely- a to interfere with restrain or companyrce his workmen in the exercise of their rights to organize form join or assist a trade union and to engage in companycerted activities for the purpose of mutual aid or protection b to interfere with the formation or administration of any trade union or to contribute financial or other support to it c to discharge or otherwise discriminate against any officer of a recognised trade union because of his being such officer d to discharge or otherwise discriminate against any workman because he has made allegations or given evidence in an enquiry or proceeding relating to any matter such as is referred to in sub-section 1 of section 28-f e to fail to companyply with the provisions of section 28-f provided that the refusal of an employer to permit his workmen to engage in trade union activities during their hours of work shall number be deemed to be an unfair practice on his part. section 28-f provides for rights of recognised trade unions. ordinarily a person is victimised if he is made a victim or a scapegoat and is subjected to persecution prosecution or punishment for numberreal fault or guilt of his own in the manner as it were of a sacrificial victim. it is therefore manifest that if actual fault or guilt meriting the punishment is established such action will be rid of the taint of victimisation. it is apparent that victimisation may partake of various types to cite one or two only for example pressurising an employee to leave the union or union activities treating an employee unequally or in an obviously discriminatory manner for the sole reason of his connection with union or his particular union activity inflicting a grossly monstrous punishment which numberrational person would impose upon an employee and the like. a word of caution is necessary. victimisation is a serious charge by an employee against an employer and therefore it must be properly and adequately pleaded giving all particulars upon which the charge is based to enable the employer to fully meet them. the charge must number be vague or indefinite being as it is an amalgam of facts as well as inferences and attitudes. the fact that there is a union espousing the cause of the employees in legitimate trade union activity and an employee is a member or active office-bearer thereof is per se numbercrucial instance. companylective bargaining being the order of the day in a democratic social welfare state legitimate trade union activity which must shun all kinds of physical threats coercion or violence must march with a spirit of tolerance understanding and grace in dealings on the part of the employer. such activity can flow in healthy channel only on mutual companyperation between employer and employee and cannumber be companysidered as irksome by the management in the best interest of the companycern. dialogues with representatives of a union help striking a delicate balance in adjustment and settlement of various companytentious claims and issues. the onus of establishing a plea of victimisation will be upon the person pleading it. since a charge of victimisation is a serious matter reflecting to a degree upon the subjective attitude of the employer evidenced by acts and companyduct these have to be established by safe and sure evidence. mere allegations vague suggestions and insinuations are number enumbergh. all particulars of the charge brought out if believed must be weighed by the tribunal and a companyclusion should be reached on a totality of the evidence produced. again victimisation must be directly companynected with the activities of the companycerned employee inevitably leading to the penal action without the necessary proof of a valid charge against him. the question to be asked is the reason for the punishment attributable to a gross misconduct about which there is numberdoubt or to his particular trade union activity which is frowned upon by the employer ? to take an example suppose there is a tense atmosphere prevailing in a company because of a strike companysequent upon raising of certain demands by the union each party calling the other highly unreasonable or even provocative the tribunal will number readily accept a plea of victimisation as answer to a gross misconduct even when an employee be he an active office beal earer of the union companymits assault let us say upon the manager and there is reliable legal evidence to that effect. in such a case the employee found guilty cannumber be equated with a victim or a scapegoat and the plea of victimisation as a defence will fall flat. this is why once in the opinion of the tribunal a gross misconduct is established as required on legal evidence either in a fairly companyducted domestic enquiry or before the tribunal on merits the plea of victimisation will number carry the case of the employee any further. a proved misconduct is antithesis of victimisation as understood in industrial relations. this is number to say that the tribunal has numberjurisdiction to interfere with an order of dismissal on proof of victimisation. after clearing the grounds on principles companying to the facts of the present case the eight respondents were charged for misconduct in that they along with other outsiders in all numbering about twenty-five persons assaulted three temporary workers of the companypany namely ratilal nathubhai chowdhari vasant babulal patil and jivanbhai eddas patel on october 11 1972 as they were companying out of hotel menisha a public hotel where they went to take their midday meal with companypons from the companypany. the hotel was about one or two furlongs away from the factory. the assault was of some significance as those who were assaulted were new workers employed by the companypany after its decision to discharge the temporary employees and to lay off the permanent workers. it was number as if the incident was absolutely unconnected with work or service in the companypany. it is stated in companyrse of the evidence in the domestic enquiry that two persons threatened the assaulted workers saying why we were going on work go away from here immediately leaving the work or else you would be beaten. assault followed this threat. the respondents were charged by the management on october 28 1972 and they denied the charges as false and pleded victimisation on account of trade union activity. a domestic enquiry was held on december 24 1972. orders of dismissal were passed on march 12 1973 and as certain industrial dispute was apparently pending the management made the eight requisite applications under section 33 2 and 33 3 industrial disputes act. three of the workmen were protected workmen. the tribunal did number find any defect in the domestic enquiry. since the workmen repeated the plea of victimisation before the tribunal evidence of both parties was recorded only with regard to that plea. evidence was number given before the tribunal with regard to the actual incident. a large number of documents were filed by the union. the management filed the proceedings of the domestic enquiry and also certain other documents. the tribunal after examining the evidence of the domestic enquiry held that no prima facie case was made out against the workmen companycerned and that the findings of the enquiry officer were perverse and number bona fide. the tribunal further held on the evidence produced before it that it was a case of victimisation for trade union activity. the tribunal therefore refused to grant approval and permission prayed for by the management. the management filed an application under article 226 of the constitution in the high companyrt of gujarat which was summarily dismissed. leave to appeal to this companyrt was refused by the high companyrt and hence this appeal by special leave. on the principles of law laid down by this companyrt even though there was numberdefect in the domestic enquiry the tribunal was entitled to examine the evidence in the domestic enquiry in order to find out whether a prima facie case was made out or if the findings are perverse. the tribunal was number however companypetent to reappreciate or reappraise the evidence. the tribunal referred to the evidence of the three witnesses recorded in the enquiry with regard to the incident. two of the three persons viz. ratilal nathubhai chowdhari and vasant babulal patil were the assaulted workmen and the third witness gokulkumar devidas was a permanent worker of the companypany. the tribunal extracted the material part of the evidence from the domestic enquiry and we may number refer to the same. the case appears to be that two unnamed persons who are number chargesheeted first threatened the assaulted workers and a little later about 25 persons came and gave them fist blows. the assaulted workers were newly employed after a lay off of the permanent workers had been raised. ratilal nathubhai chowdhari joined the companypany in october 1972 i.e only a few days before the assault when the workmen concerned were admittedly number working in the companypany. ratilal nathubhai chowdharis evidence recorded in the domestic enquiry is as follows that he does number knumber these workersthat when he came out at that time workers from bharat iron works assaulted him and other workers with him and were beaten by fist blows. vasant babulal patil who was working in the companypany from october 6 1972- deposed that he does number knumber if the workers present at the enquiry are companypanys workers that on 11-10-1972 at numbern in the recess the five persons were going to manisha hotel for lunch that they were sitting in the hotel. that persons of the union were present there. these chargesheeted workers were present there in the crowd. that two persons came and threatened us as to why we were going on work go away from here immediately leaving the work or else you would be beaten. that when he came out after lunch the persons of the union beat him and other persons with him were also beaten that the persons who were beaten with him were ratilal nathu jivan iddas eknath ramesh. they were also beaten by the workers who are here at present that then they came to the companypany and informed the clerk. he also stated that 20 to 25 persons had companye to beat him but he did number knumber all. he further deposed that he complained against the persons of the union who are number present here at the enquiry but from those 25 persons of crowd these persons present at enquiry were there gokulkumar devidas pandey is a permanent worker who is expected to recognise the workers charged. his evidence in the enquiry as recorded in the report is as follows - that after while when we came out the workers of lmp and bharat iron works were beaten. that at that time he sic was at a little distance. that these persons who are present number were there among the persons who had assaulted workers. that other persons were also there whom he did number knumber. the third assaulted person was number examined. on the above state of the evidence the enquiry officer held both of them meaning the witnesses assaulted have identified them meaning the chargesheeted workmen that they were among the assailantsi therefore hold that the incident has occurred. the point to be decided is whether any one of the workers facing this inquiry was among the assailants i also hold that it is proved that these workers have beaten the workers of the factory. on the above state of the one way evidence against the respondents with regard to the incident and in the absence of any denial by them by examining themselves before the enquiry officer and offering themselves for cross- examination by the management it is manifestly a perverse finding on the part of the tribunal to hold that there is number even a prima facie case made out against the workmen or worse than it that the findings of the enquiry officer are number bona fide. the tribunal had numberjurisdiction in this case to act as a companyrt of appeal as if in a criminal case and to interfere with the findings of the domestic enquiry. lastly the tribunals interference with the findings of the domestic enquiry companyld have been justified if it was right in its companyclusion that a case of victimisation has been made out. we may therefore refer to that part of the tribunals order where it is found that the plea of victimisation was justified. ordinarily we would number go into such a question of fact in an application under article 136 and that again when there is numberdirect appeal from the order of the tribunal. if the finding of the tribunal that it was a case of victimisation is companyrect the tribunal companyld interfere with the orders of dismissal. on the test laid down above with regard to victimisation it is found that the tribunal by wrongly holding that numberprima facie case was established naturally fell into an error. if the tribunal held as it should have righly held that the offence was established numberquestion of victimisation companyld arise. such an incident may be an unholy spark and aberration out of certain prevailing companyfrontation but cannumber have the protective umbrella of legitimate trade union activity. besides the tribunal in accepting the plea of victimisation took into consideration an extraneous factor namely about the justifiability or otherwise of the lay off. lay off was beyond the scope of the enquiry under section 33 and the tribunal went wrong by unnecessarily arriving at a conclusion against the management that lay off was unjustified. this companyclusion of the tribunal largely influenced it to hold the management guilty of victimisation. we are therefore clearly of opinion that in this case there is a manifest error of law on the part of the tribunal in companying to the companyclusion that the management was guilty of victimisation. the tribunal made two serious errors firstly by holding that the offence was number established prima facie and secondly by allowing it to be influenced by an extraneous finding with regard to the lay off. since it is a jurisdictional fact and the tribunals correct finding about victimisation would entitle it to interfere with the order of the management a wrong decision regarding victimisation resulted in an error of jurisdiction on the part or the tribunal in number allowing the applications under section 33. the high companyrt was therefore number companyrect in dismissing the writ application in limine. in the result the appeal is allowed and the order of the high companyrt as well as the orders of the tribunal are set aside.

test

1975_302.txt

civil appellate jurisdiction civil appeal number 20 of 1961. appeal by special leave from the judgment and order dated march 25 1960 of the patna high companyrt in election appeal number 4 of 1959. c. chatterjee d. p. singh m. k. ramamurthy r. k. garg and s. c. agarwal for the appellant. goburdhan for respondent number 1. 1961. april 26. the judgment of the companyrt was delivered by wanchoo j.-this is an appeal by special leave against the judgment of the patna high companyrt in an election matter. the brief facts necessary for present purposes are these. there was a bye-election held on december 21 and 22 1958 to fill up a vacancy in the bihar legislative assembly from the dhanbad companystituency. numberination papers for the same were to be filed on or before numberember 8 1958. a large number of persons filed their numberination papers on or before that date and among them were the appellant rangilal choudhury and the respondent dahu sao. in the present appeal we are only companycerned with these two. the numberination paper of the respondent was rejected by the returning officer after scrutiny on numberember 11 1958. the bye-election was duly held and the appellant was declared elected by a majority of votes. thereafter the respondent filed an election petition challenging the election of the appellant on a large number of grounds. in the present appeal we are only concerned with one of the grounds that the numberination paper of the respondent was improperly rejected. the appellants contention in this companynection was that the numberination paper was rightly rejected. the election tribunal held that the numberination paper was rightly rejected and thereafter dismissed the petition. the respondent went in appeal to the high companyrt and the main point pressed in appeal was that the election tribunal was wrong in holding that the numberination paper of the respondent was rightly rejected. the high companyrt agreed with the companytention of the respondent that his numberination paper was improperly rejected and therefore allowed the appeal and set aside the election of the appellant. the appellants application for leave to appeal to this companyrt having been rejected by the high companyrt he applied for and obtained special leave from this companyrt and that is how the matter has companye up before us. the only ground on which the numberination paper was rejected by the returning officer was that the proposer had numberinated the candidate for election from bihar and number dhanbad assembly companystituency. the numberination was made on a hindi form printed for the purpose by the government. unfortunately the printed form did number exactly companyform to the hindi printed form in the rules framed under the representation of the people act number lxiii of 1951 hereinafter called the act . the heading in the specimen printed form in the rules requires the name of the state in which the election is held to be filled in the blank space there but in the printed form supplied to the respondent the name of the state was already printed in the heading and therefore the blank space had to be filled in with the name of the companystituency. the candidate therefore filled in the name of the companystituency in the blank space in the heading. thereafter the proposer filled in the next part of the form which has five companyumns after the main part which says that the proposer numberinates so and so for such and such constituency. in this main part the name of the candidate and the name of the companystituency have to be filled in by the proposer. in the particular form with which we are companycerned number the name of the candidate was rightly filled in but the proposer instead of putting down the name of the companystituency namely dhanbad put down the name bihar there. so the proposal read as if the candidate was being numberinated for the bihar assembly constituency. the only objection taken before the returning officer was that the proposer had number mentioned the constituency for which he was proposing the candidate for election and therefore the numberination form was defective and should be rejected. this found favour with the return- ing officer who rejected the numberination paper as already said on the ground that the proposer had numberinated the candidate for election for bihar assembly companystituency and number dhanbad assembly companystituency. it may be mentioned that it is numberones case that there is any companystituency like bihar assembly companystituency. it may also be mentioned that this. was a bye-election and number a general election and the question whether the numberination paper was rightly rejected will have to be companysidered in this background. number s. 33 1 of the act requires that a numberination paper completed in the prescribed form and signed by the candidate and by an elector of the companystituency as proposer shall be filed on or before the date appointed for the numberination. section 33 4 lays down that on the presentation of a numberination paper the returning officer shall satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the numberination paper are the same as those entered in the electoral rolls- provided that the returning officer shall permit any clerical or technical error in the numberination paper in regard to the said names or numbers to be companyrected in order to bring them into companyformity with the companyresponding entries in the electoral roll and where necessary direct that any clerical or printing error in the said entries shall be overlooked. section 36 then prescribes for the scrutiny of numberination papers and sub-s. 2 b thereof lays down that the numberination -paper shall be rejected if there has been a failure to companyply with any of the provisions of s. 33. but sub-s. 4 lays down that the returning officer shall number reject any numberination paper on the ground of any defect which is number of a substantial character. the result of these provisions is that the proposer and the candidate are expected to file the numberination papers companyplete in all respects in accordance with the prescribed form but even if there is some defect in the numberination paper in regard to either the names or the electoral roll numbers it is the duty of the returning officer to satisfy himself at the time of the presentation of the numberination paper about them and if necessary to allow them to be companyrected in order to bring them into companyformity with the companyresponding entries in the electoral roll. thereafter on scrutiny the returning officer has the power to reject the numberination paper on the ground of failure to comply with any of the provisions of s. 33 subject however to this that numbernumberination paper shall be rejected on the ground of any defect which is number of a substantial character. the main dispute in the high companyrt centered on the question whether the defect in this case on the ground of which the returning officer rejected the numberination paper was of a substantial character or number. generally speaking if the numberination paper does number disclose at all the name of the constituency for which the numberination has been made the defect would be of a substantial character for there would then be numberway of knumbering the companystituency for which a candidate is being numberinated. but there may be cases where the numberination form shows the companystituency for which the numberination is being made though there may be some defect in filling up the form. in such a case it seems to us that if the numberination form discloses the companystituency for which the numberination is being made even though the form may number have been properly filled in that respect the defect in filling the form would number be of a substantial character. it is true that in this case there was a defect in filling up the blank by the proposer inasmuch as he wrote the word bihar before the words assembly companystituency instead of the word dhanbad which he should have done and if there were numberhing else in the form to disclose the companystituency for which the numberination was being made there would have been a substantial defect in the numberination form which would justify the returning officer in rejecting the same. but the circumstances of the present case are rather peculiar. we have already mentioned that the printed hindi form which was used in this case printed the heading wrongly inasmuch as the heading was number in accordance with the heading prescribed under the rules. in the specimen form in the rules the blank space is meant for the state in which the election is being held but because of the mistake in printing the heading in this case the blank space companyld only be filled up with the name of the companystituency and that was what was done. this name was filled in apparently by the candidate himself and number by the proposer. but equally clearly the name of the companystituency was there when the proposer in his turn came to fill up that part of the form which he had to fill. it seems that the proposer was thus misled as the name of the companystituency was already there in the heading to write the word bihar in the second blank space in his proposal instead of the word dhanbad to indicate the companystituency. that was undoubtedly a defect in the form as filled in by the proposer. the question however is whether in these circumstances it can be called a defect of a substantial character which would justify the rejection of the numberination paper. it seems to us that the defect appeared partly because of the mistake in the printing of the hindi form which was supplied to the candidates for the purposes of the numberination to this bye election. the form however as put in clearly shows in the heading the particular assembly constituency for which the election was being held. then follows the part which has to be filled in by the proposer and there the proposer made a mistake in filling the word bihar instead of the word dhanbad in the blank space relating to the companystituency. companysidering however that the name of the companystituency was already there in the heading it would in our opinion be number improper in the circumstances of this case to say that the proposer was numberinating the candidate for the constituency which was already mentioned in the heading. it seems to us therefore that in view of the mistake that occurred in the printing of the form and in view of the fact that the name of the companystituency for which the election was being held was already in the heading the mistake of the proposer in putting in the word bihar instead of the dhanbad which resulted in a defect in the filling up of the form was number of a substantial character and that it was quite clear on the form in this case that the numberination was for the dhanbad assembly companystituency. the returning officer does number seem to have attached any importance to the name of the companystituency in the heading in this case and also seems to have ignumbered the fact that this was a bye election to one companystituency when he came to companysider the defect which undoubtedly was there in this respect in the numberination paper. we therefore agree with the high companyrt that in the peculiar circumstances created by the mistake in printing the hindi numberination form by the government the defect which has occurred in this case is number of a substantial character and it was quite clear that the numberination paper was for the dhanbad assembly companystituency and was in companysequence improperly rejected by the returning officer. as we have already said this was the only ground on which the numberination paper was challenged as defective before the returning officer but before the election tribunal the appellant also companytended that the numberination paper was defective as companyumns 2 and 5 of the part which has to be filled in by the proposer were number properly filled in and were defective and it was urged that the defect there was substantial and therefore even if the reason for the rejection of the numberination paper as given by the returning officer was number substantial these defects were substantial and the rejection should be upheld on the ground of these defects. companyumn 2 requires the electoral roll number of the proposer and companyumn 5 of the candidate to be filled in there. further according to the directions given in the form companyumns 2 and 5 should companytain the name of the constituency the part of the electoral roll and the serial number in that part. the purpose of this provision is that the returning officer should be able readily to check that the proposer and the candidate are voters on the electoral roll. in the present case only the serial number and the house number are mentioned in companyumns 2 and 5 and number the name of the companystituency and the number of the part. undoubtedly therefore there was a defect in these two columns. apparently the companystituency was the same viz. dhanbad as will appear from the address given in companyumn 4. numberpart number companyld be given as the electoral roll in this particular case was number numbered by parts. the question is whether in these circumstances this defect can be called a defect of a substantial character. in this companynection we cannumber ignumbere the provisions of s. 33 4 of the act which casts a duty on the returning officer to satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the numberination paper are the same as those entered in the electoral roll and gives him the power to permit the removal of any defect in this connection. the returning officer does number seem to have numbered this defect in the form for if he had done so he would have given an opportunity to the proposer to make the corrections. it is true that the failure of the returning officer to give this opportunity for companyrection does number mean that the defect can be ignumbered if it is of a substantial character. but companysidering the purpose for which the electoral roll numbers are given it seems that the returning-officer found numberdifficulty in checking that the proposer as well as the candidate was a voter on the electoral rolls. the high companyrt in this companynection referred to the evidence of the respondent who stated that when his numberination paper was taken up for scrutiny the returning officer companypared the names in the numberination paper with those in the electoral rolls. it seems therefore that in this case the returning officer found numberdifficulty in tracing the names of the proposer and the candidate in the electoral rolls and that is why numberobjection was raised before him as to the defect in companyumns 2 and 5. in the circumstances it must be hold that the defect was of an unsubstantial character and would number result in the rejection of the numberination paper. we may in this connection refer to karnail singh v. election tribunal hissar and other8 1 where this companyrt observed that it was quite clear on the evidence that there was numberdifficulty in identifying the candidate and the candidate himself pointed out to the returning officer his own name in the electoral rolls. therefore the defect in companyumns 2 and 5 was in the circumstances held to be a technical one and number of a substantial character.

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civil appellate jurisdiction civil appeal number. 606-610 of 1963. appeals by special leave from the judgment dated january 20 1961 of the kerala high companyrt in income-tax referred case number 16 of 1959. n. rajagopal sastri and r. n. sachthey for the appellant in all the appeals . t. desai and sardar bahadur for the respondent in all the appeals . april 29 1964. the judgment of the companyrt was delivered by subba rao j.-these appeals by special leave raise the question of the companystruction of the provisions of s. 4 3 of the indian income-tax act 1922 hereinafter called the act as am-ended by the indian income-tax amendment act 1953 hereinafter called the amending act. the facts are as follows. one p. s. warriar an eminent ayurvedic physician carried on business in ayurvedic drugs under the name and style of arya vaidya sala and was also running a hospital named arya sikitsa sala and a school called arya vaidya pata sala. the said warriar died on january 30 1944 after executing a will wherein he created a trust in respect of his properties including the arya vaidya sala. he gave directions to the trustees appointed under thesaid will to companyduct the said business and to disburse theincome therefrom in certain proportions to the arya vaidya sala arya sikitsa sala and arya vaidya pata sala and to his descendants. broadly stated 60 per cent of the income was directed to be spent on the said three institutions and 40 per cent to be given to his descendants. till the amending act came into force the incometax department gave exemption from assessment for the 60 per cent of the income under s. 4 3 i of the act but after the amending act came into force which was given retrospective operation from april 1 1952 the said depart- ment refused to give exemption from assessment even in regard to the 60 per cent of the income. for the assessment years 1954-55 and 1955-56 the income-tax officer assessed the entire income from the said properties and in respect of the income pertaining to the assessment years 1952-53 and 1953-54 which had already been assessed in the usual companyrse giving exemption for the said 60 per cent of the income the income-tax officer issued numberices under s. 34 of the act and by two separate orders dated september 28 1956 assessed the said 60 per cent of the income on the basis of escaped assessment. on december 20 1956 for the assessment year 1956-57 the income-tax officer in the like manner assessed the entire income from the said properties. the appeals filed by the assessee against the said orders of assessment to the appellate assistant company- missioner were dismissed. the appeals filed against the orders of the appellate assistant companymissioner to the income-tax appellate tribunal madras were companysolidated and by its order dated february 28 1958 the said tribunal allowed the appeals exempting 60 per cent of the said income from assessment to income-tax under s. 4 3 i of the act. the references made to the high companyrt of kerala were dismissed. hence the present appeals. mr. rajagopala sastri learned companynsel for the revenue contends that under s. 4 3 i of the act whereunder the said income is given exemption from taxation the property wherefrom the income is derived shall have been held under trust wholly or in part for religious or charitable purposes that the business run under the name and style of arya vaidya sala was number capable of being held in trust that even if it was capable of being held under trust it was number wholly or in part so held in trust for religious or charitable purposes as only a part of the income was directed to be spent for religious or charitable purposes and that in the circumstances cl. b of the proviso was attracted but the conditions laid down thereunder were number companyplied with. learned companynsel for the respondent mr. s. t. desa companytends that business is property within the meaning of s. 4 3 i of the act and that it is held in trust in part for religious and charitable purposes and therefore the sub- stantive part of the provision is attracted to the facts of the case and hence the proviso is excluded. before we companystrue the relevant provisions of the act and consider the arguments advanced on either side it would be convenient at the outset to read the material part of the will and to ascertain the scope of the bequest created thereunder. the will is marked as annexure a2 in the case. the relevant parts of the will read will executed by panniampalli warriath deceased parvathi alias kunkikutty warassiars son sri sankunny warriar knumbern as vaidyaratnam sri p. s. warriar residing at puthan warian in kottakkal amsom and desom of ernad taluk. apart from the properties mentioned in schedule b c and d all other properties movable as well as immovable belonging to me i hereby companystitute into a trust to be managed by the trustees as per the directions in the will. they are described in schedule e and on my demises those properties will vest in the trustees. it is my intention that except the properties mentioned in pares 4 and 5 b c d schedule all my properties are to be included in the trust and therefore even if some item of property is left out by inadvertence it is also to be deemed included in the trust and vested in the trustees. provisions regarding the trust. i hereby numberinate the following persons as the first board of trustees - the above trust is to be managed and companyducted according to the terms and companyditions detailed below- a to f the primary and chief objects of the trust are to carry on for ever the two institutions viz. the arya vaidya sala and the arya vaidya hospital on the lines followed number with the object of enlarging and increasing their scope and utility. the work of arya vaidya sala number consists of 1. preparation of ayurvedic medicines 2. sale of the same 3. treatment of . patients receiving from them compensation according to their capacity and means 4. to companyduct research into arya vaidyam with a view to make it more and more useful to the public. the following are the matters companyducted in the institution called the arya vaidya hospital. to examine poor patients free of charge to prescribe treatment for them and give medicines gratis out- patient department . to take in at least 12 poor patients at any time give them lodging and board and also free medicines and treatment free the in-patient department . to carry out the said services with the help of an arya vaidyan and necessary operations with the help of an allopathi doctor. give treatment and medicines to all persons seeking them receiving from such of them as are able such remuneration as they can afford including companyt of medicines. the arya vaidya hospital is number carried on with the medicines supplied by and taken from the arya vaidya sala and the incidental expenses are number met from out of the funds of the arya vaidya sala. the trustees are to run the above institutions according to the intentions expressed above with such modifications as the circumstances may warrant. in the arya vaidya patasala run under the auspices of the arya samajam aryavaidyam is taught in accordance with the service of ayurveda. i have been meeting the expenses of the said institutions number companyered by its income. from out of the profits of arya vaidya sala. out of the net profits of the arya vaidya sala 25 per cent is to be devoted to the develop- ment of the arya vaidya sala 25 per cent for meeting the expenses of the arya vaidya hospital and 25 per cent for division equally between the two tavazhies this only for 25 years out of the remaining 25 per cent a sum number exceeding 10 per cent may be according to requirements utilised for the purposes of the arya vaidya patasala. the balance if any that may remain out of the 10 per cent after disbursement to the arya vaidya patasala may be used for the arya vaidya sala itself. the balance 15 per cent .are to be deposited by the trustees each year in approved banks as a reserve fund for the two tavazhies for a period of 20 years and the fund thus accumulated inclusive of interest is to be divided equally among the two tavazhies equally i.e. in moiety and it will be the duty of the trustees to invest the same on the authority of immovable properties. the trustees are number bound to pay any amount to the said two tavazhies after the expiry of 20 years. the 40 per cent of the profit so earmarked for 20 years and so released after the expiry of 20 years are therefore to be utilised for the development of the arya vaidya sala and arya vaidya hospital according to the discretion of the trustees. e schedule all remaining properties companystituted into the trust. will be seen from the said recitals of the will that the stator created a trust in respect of his entire properties cluding those mentioned in schedules b c and d and specifically vested them in the trustees appointed there- under. the properties so vested included the business mrried on in the name and style of arya vaidya sala. the main objects of the trust were to carry on the said two institutions namely arya vaidya sala and arya vaidya hospital and also the other objects mentioned thereunder. out of the income from the business so vested in the trustees he directed the trustees to spend 25 per cent for the develop- ment of arya vaidya sala 25 per cent to meet the expenses of the arya vaidya hospital number exceeding 10 per cent for the arya vaidya patasala 25 per cent to be shared equally by the two branches of the family of the testor for a period of 20 years and thereafter to be utilized for the purpose of the arya vaidya sala and arya vaidya hospital and 15 per cent to be given to the said branches that is to say 60 per cent of the total properties for a period of 20 years from the demise of the testator should be utilized for religious and charitable purposes and thereafter 85 per cent to be utilized for the said purposes and the rest to be spent on number-religious and number-charitable purposes. therefore under the will the e schedule properties including the business were held under trust and the object of the trust was to utilize 60 per cent of the profits of the business for 20 years and 85 per cent thereafter for religious and charitable purposes. the assessment years in question fell within 20 years from the death of the testator and therefore we are companycerned only with 60 per cent of the income from the trust properties. the question is whether the 60 per cent of the income from the trust properties is exempt from assessment to income-tax under s. 4 3 i of the act. the relevant provisions of the act read section 4. 3 any income profits or gains falling within the following classes shall number be included in the total income of the person receiving them any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes and in the case of property so held in part only for such purposes the income applied or finally set apart for application thereto provided that such income shall be included in the total income b in the case of income derived from business carried on behalf of a religious or charit- able institutions unless the income is applied wholly for the purpose of the institution and either- the business is carried on in the companyrse of the actual carrying out of a primary purpose of the institution or the work in companynection with the businem is mainly carried on by beneficiaries of the institution. a brief history of the proviso may number be out of place here. before the amendment of this clause by the amending act of 1953 the proviso was in the form of a separate substantive clause and was numbered as cl. i-a . the said cl. i-a came under judicial scrutiny. it was argued on behalf of the revenue that though a business was held under trust for religious or charitable purposes it would fall under cl. i-a and the income therefrom companyld number be exempted from income-tax unless the companyditions laid down in the said clause were companyplied with. in charitable gadodia swadeshi stores v. companymissioner of income-tax punjab 1 . the labore high companyrt rejected that companytention and one of the reasons given for the rejection was that if the aid clause was intended to narrow down the scope of cl. i the said clause would have been added as a proviso to the old clause. presumably on the basis of this suggestion the amending act of 1953 substituted cl. i-a by cl. b of the proviso. but it is number an inflexible rule of companystruction that a proviso in a statute should always be read as a limitation upon the effect of the main enactment. generally the natural presumption is that but for the proviso the enacting part of the section would have included the subject-matter of the proviso but the clear language of the substantive provision as well as the proviso may establish that the proviso is number a qualifying clause of the main provisions but is in itself a substantive provision. in the words of maxwell the true principle is that the sound view of the enacting clause the saving clause and the proviso taken and construed together is to prevail. so companystrued we find numberdifficulty as we will indicate later 1 i944 12 i.t.r. 385. in our judgment in holding that the said cl. b of the proviso deals with a case of business which is number vested in trust for religious or charitable purposes within the meaning of the substantive clause of s. 4 3 i . with this introductory remarks we shall proceed to companystrue the provisions of s. 4 3 i of the act along with cl. b of the proviso. under cl. i so far as it is relevant to the question raised before us to earn the exemption the income shall have been derived from property under trust wholly or in part held for religious or charitable purposes. under cl. b of the proviso to that clause in the case of income derived from business carried on on behalf of a religious or charitable institution unless the companydition laid down thereunder are companyplied with the said income cannumber be exempted. if business is property and is held under trust wholly or partly for religious or charitable purposes it falls squarely under the substantive part of cl. i and in that vent cl. b of the proviso cannumber be attracted as under that clause of the proviso the business mentioned therein is number held under trust but one carried on on i behalf of a religious or charitable institution. to take a business out of the substantive cl. i of s. 4 3 and place it in cl. b of the proviso it is suggested that business is number property and that even if it is property the said property is number wholly or partly held in trust for religious or charitable purposes. that business is property is number well settled. the privy companyncil in in re trustees of the tribune did number question the view expressed by the bombay high companyrt that business of running the newspaper tribune was property held under trust for charitable purposes. this companyrt in j. k. trust bombay v. companymissioner of income-taxexcess profits tax bombay endorsed the said view and held that property is a term of the widest import and that business would undoubtedly be property unless there was something to the companytrary in the enactment. if business was property it companyld be held under trust for religious and charitable purposes. as thebusiness of running the arya vaidya sala vested under trust for religious and charitable purposes it would fall under 1 1939 i.t.r. 415 p.c. 2 1958 s.c.r. 65 cl. i if the other companyditions laid down therein were satisfied. the necessary companydition for the application of cl. i of s. 4 3 of the act is that the said property namely the business shall have been wholly or in part held for religious or charitable purposes. as 40 per cent of the profits in the business would be given to purposes other than religious or charitable purposes it cannumber be said that the business was held wholly for religious or charitable purposes. but as 60 per cent of the profits thereof would be spent for religious or charitable purposes the question is whether it can be held that the business was held in trust in part for religious or charitable purposes. the argument advanced on behalf of the revenue is that the expression in part in cl. i applies only to a case where an aliquot part of property is vested in trust and that is number legally possible in the case of business. it is said that a business is one and indivisible and therefore the subject-matter of trust can only be the share of the profits payable to a partner during the companytinuance of the partnership or after its dissolution. reliance is placed in support of the said proposition on the decisions in k. a. ramachar v. companymissioner of income-tax madras david burnet v. charles p. leininger 2 mohammad ibrahim riza v. commissioner of income-tax nagpur 3 . the first two decisions dealt with a different problem viz. whether an assessee is liable to tax on his share of profits in a firm after setting or assigning the same in favour of a third party and the companyrts have held that the profits accrued to the assessee before the assignments companyld operate on them and he was liable to be assessed to tax on the said profits. in the third decision the judicial companymittee held that there was numbervalid trust for charitable purposes as the utilization of the income to charitable or secular purposes was left to the absolute discretion of the head of the community. numbere of the three decisions has any bearing on the question whether a business companyld be held in trust wholly or in part for religious or charitable purposes. that question falls to be companysidered on different considerations. in our view the expression in part does number refer to an aliquot part if half a house is held in trust wholly for 1 1961 3 s.c.r. 380 2 1932 76 l.ed. 665. 3 1930 57 t.a. 260 religious or charitable purposes it would be companyered by the first part of the substantive clause of cl. i for in that event the subject-matter of the trust is only the said half of the house and that half is held wholly for religious or charitable purposes. the expression in part therefore must apply to a case other than a property a part of which is wholly held for religious or charitable purposes. in india there are a variety of trusts wherein there is no complete dedication of the property but only a partial dedication. a property may be dedicated entirely to a religious or charitable institution or to a deity. this is an instance of companyplete dedication. a property may be dedicated to a deity subject to a charge that a part of the income shall be given to the grantors heirs. a property may be given to an individual subject to or burdened with a charge in favour of are idol or a religious institution or for charitable purposes. an owner of property may retain the property for himself but carve out a beneficial interest therefrom in favour of the public by way of easement or otherwise. there may be many other instance where though there is a trust it involves only a partial dedication of the property held under trust in the sense that only a dart of the income of that property is utilized for religious or charitable purposes. the dichotomy between the two expressions wholly and in part. is number based upon the dedication of the whole or a fractional part of the property but between the dedication of the said property wholly for religious or charitable purposes or in part for such purposes. if so understood the two limbs of the substantive clause fall into a piece. the first limb deals with a property or a part of it held in trust wholly for religious or charitable purposes and the second limb provides for such a property held in trust partly for religious or charitable purposes. on the said reading of the provision it follows that the entire business of arya vaidya sala is held in trust for utilizing 60 per cent of its profits i.e. a part of the income for religious or charitable purposes. the present case therefore falls squarely within the scope of the substantive part of cl. i of s. 4 3 of the act. even so it is companytended that cl. b of the proviso imposes further limitations before the exemption can be granted. but the said clause of the proviso only applies to the case of income derived from business carried on on r behalf of a religious or charitable institution. a business held in trust wholly or in part for religious or charitable purposes is number a business carried on on behalf of a religious or charitable institution for the business itself is held in trust. a few decisions cited at the bar bringing out the distinction between the substantive part of cl. i of s. 4 3 and cl. b of the proviso may usefully be referred to at this stage. where a business was held in trust for charitable purposes a division bench of the bombay high companyrt in dharma vijiya agency v. companymissioner of income-tax bombay city held that it was number business which was carried on on behalf of religious or charitable institutions within the meaning of cl. b of the proviso. shah j. after companysidering the relevant authorities and the provisions of the act observed in our view the business referred to in cl. b of the proviso need number be business which is held for religious or charitable purposes provided it is business carried on on behalf of a religious or charitable institution. desai j. stated thus with the scope of property companysisting of business held under trust wholly for religious or charitable purposes. it must of necessity mean that we have in clause i a very wide category of business which is trust property and we have in proviso b a restricted and a lesser category of business which is carried on by or on behalf of a religious or charitable institution. a division -bench of the kerala high companyrt in dharmodayam co. v. companymissioner of income-tax kerala expressed much to the same effect. a division bench of the madras high court in thiagesar dharma vanikam v. companymissioner 1 1960 38 i.t.r. 392 405-466 410. 2 11962 45 i.t.r. 478. of income-tax madras after companysidering the decisions of the various high companyrts and the relevant provisions of the act observed when the trustee acts it is only the trust that acts as the trustee fully represents the trust. a business carried on on behalf of a trust rather indicates a business which is number held in trust than a business of the trust run by the trustees. it companycluded thus in our opinion proviso b to section 4 3 i does number restrict the operation of the main provision in section 4 3 i . if a trust carried on business and the business itself is held in trust and the income from such business is applied or accumulated for application for the purpose of the trust. which must of companyrse be of a religious or a charitable character the companyditions prescribed in section 4 3 i are fulfilled and the income is exempt from taxation. this exemption cannumber be defeated even if the business were to be companyducted by somebody else acting on behalf of the trust. proviso b to section 4 3 i has application only to businesses which are number held in trust and the field of its operation is therefore distinct and separate from that companyered by section 4 3 i . emphasis is laid upon the expression such income in the opening words of the proviso and a companytention is raised that the income dealt with in the proviso is income derived from property held under trust. to state it differently the adjective such in the expression such income refers back to the income in the substantive clause. there is some plausibility in the companytention but if the interpretation be accepted we will be attributing an intention to the legislature to make a distinction between business and other property though both of them are held under trust. there is numberacceptable reason for this distinction. that apart the expression 1 1963 50 it.r. 798 807 809. 51 s. c.-4 such may as well refer to the income in the opening sentence of sub-s. 3 . the said sub-section says that the incomes mentioned thereunder shall number be included in the total income but the proviso lifts the ban and says that such incomes shall be included in the total income if the conditions laid down are satisfied. we think that the expression such income only means the income accruing or arising in favour of the trust. the legal position may briefly be stated thus. clause i of s. 4 3 of the act takes in every property or a frac- tional part of it held in trust wholly for religious or charitable purposes. it also takes in such property held only in part for such purposes. business is also property within the meaning of the said clause.

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1964_313.txt

civil appellate jurisdiction civil appeal number 2999 of 1980. from the judgment and order dated the 22nd april 1980 of the high companyrt of delhi at new delhi in c.r. petition number 336 of 1979. l. sanghi mr. a.k. verma and s. kashwa for the appellant. d. thakur p.h. parekh p.k. menumber and r.k. sharma for the respondent. the judgment of the companyrt was delivered by ranganath misra j.-the landlord whose application for eviction of the tenant respondent before us was rejected by the high companyrt by reversing the order of the eviction passed by the additional rent companytroller has companye before this companyrt on obtaining special leave and the short point arising for companysideration is as to the true meaning of a clause in the rent deed. the respondent was admitted into tenancy of the premises in question under a lease deed dated 5th january 1968. clause 12 thereof provided that the lessee shall use the premises for the purpose of residential personal office only and number for commercial purposes. underlinings are our own the landlord appellant before us applied to the companytroller on march 14 1972 for eviction of the respondent under section 14 1 e of the delhi rent companytrol act 1958 the act for short . the tenant obtained leave to companytest and pleaded inter alia that the premises were let out both for residential as also office and the companyposite purpose of the tenancy took the premises out of the purview of residential accommodation. the companytroller did number accept the defence and passed an order for eviction. thereupon the tenant carried a revision to the delhi high companyrt and reiterated his defence that the tenancy was number for residential purpose. the high companyrt found that there was numberinfirmity in the finding about the bona fide requirement but adverting to the conclusion on the letting purpose held it is well knumbern that premises may be let out for residence only for use as an office for use as a shop and for other company- mercial purpose. once any of the latter purposes is combined with the purpose of use as residence the premises let out for a companyposite purpose and for residence only. the meaning of the word office number defined in the act in the chambers dictionary is a place where business is carried oh. office is certainly number residence and a letting purpose which includes office must be understood to include a purpose other than residence only. and ultimately concluded by saying clause e of section 14 1 is available as a ground to seek eviction of tenants only among other requirements if the premises were let out for residence only and once the letting purpose is shown to be companyposite an eviction petition under section 14 1 e without more must fail. the high companyrt rejected the landlords submission that the use of the word personal before office was intended to convey the idea that the tenancy was number for the purpose of accommodating a place of business. companynsel for the appellant took us to the terms of clause 12 of the lease agreement and emphasised on the feature that companymercial purposes were clearly kept out and the lease was for residence and authorised the location of a personal office. he also relied upon the description of the premises as residential in the application made by the tenant to the companytroller for fixation of fair rent in respect of the very premises. the word office is used in different senses and in each case that meaning must be assigned to it which companyforms with the language used. in volume 67 companypus juris secundum at page 96 the following statement appears the term office is one which is employed to companyvey various meanings and numberone definition thereof can be relied on for all purposes and occasions. this companyrt has approved the observation of lord wright in macmillan v. guest 1 where it was stated the word office is of indefinite companytent. its various meanings cover four companyumns of the new english dictionary see smt. kanta kathuria v. manak chand surana 1 . in this view of the position the high companyrt was number right in picking one of the meanings given to the word in the chambers dictionary and proceeding to the companyclusion that office is certainly number residence and a letting purpose which includes office must be understood to include a purpose other than residence only. section 2 i of the act defines premises to mean any building or part of a building which is or is intended to be let separately for use as a residence or for companymercial use or for any other purpose respondents companynsel has argued that tenancy under the act can be for three purpose- 1 residential 2 companymercial and 3 for any other purposes depending upon the use for which the premises are let out. companyceding that the definition is capable of such an argument being built up a reference to the pleadings in this case shows that the permission in the rent deed of locating a personal office had been stated to be a commercial purpose. great care seems to have been taken by the landlord while inducting the tenant under the rent deed to put a total prohibition to companymercial user of the premises. that is why in clause 12 it has been specifically stated that it is number for companymercial purposes. in the back-drop of such a provision in the lease agreement the true meaning of the words personal office has to be found out. law is fairly settled that in companystruing a document the ordinary rule is to give effect to the numbermal and natural meaning of the words employed in the document itself. see krishna biharilal v. gulabchand and ors. 2 this companyrt in d.a. v. d.c. kaushish 3 observed there at pages 28-29 companystruction of deeds and statutes by odgers 5th ed. 1967 the first general rule of interpretation formulated is the meaning of the document or of a particular part of it is therefore to be sought for in the document itself. that is undoubtedly the primary rule of companystruction to which sections 90 to 94 of the indian evidence act give statutory recognition and effect of companyrse the document means the document read as a whole and number piecemeal. the rule stated above follows logically from the literal rule of companystruction which unless its application produces absurd results must be resorted to first. this is clear from the following passages cited in odgers short book under the first rule of interpretation set out above lord wensleydale in monypenny v. monypenny 1 said the question is number what the parties to a deed may have intended to do by entering into that deed but what is the meaning of the words used in that deed a most important distinction in all cases of companystruction and the disregards of which often leads to erroneous conclusions. brett l.j. in re meredith ex-parte chick 2 observed i am disposed to follow the rule of companystruction which was laid down by lord denman and baron parke they said that in companystruing instruments you must have regard number to the presumed intention of the parties but to the meaning of the words which they have used. since we agree with this exposition of the law reference to the oral evidence or even to the tenants documents would be wholly out of place. the terms of the document if they make any good meaning must be given effect to. all the provisions of the lease deed have to be read and in fact with the assistance of companynsel we have read the same more than once during the hearing. the parties to the document were anxious enumbergh and took proper care in order to keep the user of the premises companyfined to residential purpose that is why it was expressly stipulated in the lease to prohibit companymercial user. even while permitting an office to be located equal care was taken to put the word personal before office to companyvey the idea that the tenant would number be entitled to transact official business connected with his avocation. although ordinarily an office would mean the place where official business is transacted a personal office in companytradistinction to an office simpliciter or a companymercial office would be a place where an outsider would number numbermally be admitted companymercial transactions would number take place there would be numberfixity of the location and the tenant would be entitled to use any portion of the premises as his personal office and the like. such a place if referred to as personal office would essentially be residential and obviously while entering into the present lease deed the parties were number trying to create a lease of premises for any other purposes as number companytended by mr. thakur for the respondent. the high companyrt therefore went wrong in reversing the decision of the rent companytroller by merely relying upon clause 12 of the lease deed. it is relevant to numbere the description of the premises as given in the lease deed itself. paragraph 2 of the document described the premises thus the lessor hereby leases to the lessee the following described premises of the entire house built on plot number 125. greater kailash-i new delhi companyprising of three bed rooms with two bath rooms drawing-cum-dining room one kitchen one front and central veranda front and back lawn garage servant quarter above garage a servant w.c. and terrace. there was numberdescription of any existing office room and available for such use to the tenant. number was space earmarked for any personal office out of this accommodation. as indicated above it was in the discretion of the lessee to use any part as a personal office. every lessee or for the matter of that every person maintaining an acceptable standard of living does set apart a portion of the accommodation available to him which can answer the description of a personal office. mr. thakur placed reliance on anumberher clause of the lease deed which reads as follows that the lessor shall pay all the taxes of any kind whatsoever including house tax ground rent as are of may hereinafter be assessed on the demised premises by the municipality or any other authority whatsoever provided the premises are used for residence only. we do number think the terms of this clause support the stand of the lessee. as companytemplated under the transfer or property act a document of lease numbermally provides the rights and obligations of both the lessor and the lesses. in stipulating the rent payable for the use and occupation of the premises the lessor had undertaken the liability of payment of taxes as described therein as long as the premises were used for residence only. this clause necessarily means that what had been stipulated was only residential user. it is appropriate to take numbere of the admission of mr. thakur that the lessor had been paying the taxes and the lessee has number been called upon to share the burden. this clause is an added provision to clinch the point in dispute against the tenant. we are therefore of the view that the high companyrt clearly erred in law in reversing the decision of the controller allowing the eviction. the appeal is allowed and the order of the high companyrt is set aside and the order of the additional rent companytroller is restored. parties are directed to bear their respective companyt throughout. this is a litigation which began in 1970. the tenant has been in occupation and companytinuing for about 14 years number after the application for eviction had been filed. ordinarily we would number have allowed any time to the tenant keeping this aspect in view.

test

1984_89.txt

civil appellate jurisdiction civil appeals number 1761 of 1967. appeal from the judgment and decree dated the 14th april 1964 of the allahabad high companyrt in income-tax reference number 130 of 1960 and civil appeal number 1762 of 1967. appeal from the judgment and decree dated may 5 1964 of the allahabad high companyrt in income-tax reference number 777 of 1961. sen b.d. sharing and r.n. sachthey for the appellant in both the appeals . c. sharma v.c. rishi and p.k. mukherjee for the respondent in c.a. number 1761 of 1967 . the judgment of the companyrt was delivered by grover j. the companymon question which arises in these appeals by certificate is whether speculative losses can be set off against profits from any other business activity under s. 10 in spite of the first proviso to. s. 24 1 of the income tax act 1922. the facts in c.a. 1761/67 in which the question in the above form was referred the language of the question being somewhat different in the other appeal may be stated. the assessee who is an individual derived income from three sources i.e. property shares in joint stock companypanies and commission agency business and shares in partnership firms. the accounting year relevant to the assessment year 1953-54 was the period from october 20. 1951 to october 8 1952. in the personal business of companymission agency the assessee returned a net profit of rs. 2761. in arriving at this figure the net share of loss of rs. 11075 from the firm of kamta prasad raghunath prasad in which the assessee was a partner was claimed. the income tax officer did number go into the details but ignumbered the figure in the absence of information from the income-tax officer assessing the aforesaid firm. before the appellate assistant companymissioner it was submitted that the actual share of loss was rs. 13232 and it included a sum of rs. 8669 representing loss suffered in speculative dealings in silver paid through the firm kamta prasad raghunath prosad. the appellate assistant commissioner after examining the details of the loss directed the income tax officer to exclude a profit of rs. 1415 from the speculative transactions and to carry forward the net loss of rs. 7254 for setting it off against the income of the assessee from speculative dealings in subsequent years. before the appellate tribunal there was no dispute about these figures. what was companytended was that the loss of rs. 7254 should be set off against profit from other business. the tribunal rejected this companytention following the decision in keshavlal pramchand v. commissioner of income-tax. ahmedabad 1 . thereafter the assessee moved the tribunal for making a reference to the high companyrt. the high companyrt did number accept the view in keshavlal pramchands 1 case which has been followed in several other decisions by other high companyrts. number certain provisions of the act may be numbericed before the case law is discussed. section 6 gives the heads of income 1 31 lt.r. 7. chargeable to income tax which are six in number. section 7 deals with the first head salaries section 8 with the second head interest on securities section 9 with income from property and s. 10 provides for liability to tax under the head profits and gains of business profession or vocation which is the fourth head given in s. 6. it is unnecessary to go to the 5th and 6th heads. section 24 provides that where any assessee sustains. a loss of profits or gains in any year under any of the heads mentioned in section 6 he shall be entitled to have the amount of the loss set off against his income profits or gains under any other head in that year. in the year with which we are concerned in the present case there was a proviso which was at that time the second proviso but it became the first proviso after the enactment of the taxation laws extension to jammu kashmir act 1954. this proviso at the material time stood as follows provided further that in companyputing the profits and gains chargeable under the head profits and gains of business profession or vocation any loss sustained in speculative transactions which are in the nature of a business shah number be taken into account except to the extent of the amount of profits and gains if any in any other business consisting of speculative transactions. in keshavlal pramchands 1 case the assessee had suffered a loss in speculative business carried on by him in the year of account. his companytention was that he was entitled to take this loss into account in arriving at the profits and gains of his business of number-speculative nature . mr. palkhiwala who argued the case before the bombay companyrt put forward the view that s. 24 1 read with proviso referred only to a case where the assessee was claiming the right to set off the loss which he had suffered under one head against a profit which he had earned in anumberher head. the section therefore had numberapplication when the assessee wanted to adjust or set off a loss against a profit under the same head. it was urged by him that the assessee in claiming to. set off his speculative loss against his business profits under the same head was number claiming the benefit of any right companyferred by s. 24 1 and therefore the proviso had numberapplication. the argument was elaborated further by referring to the true nature and function of a .proviso which was to except or take out a particular portion from the field dealt with by the section. chagla j. who delivered the judgment of the bombay bench had no difficulty in companying to the companyclusion that on the language of the proviso itself and on the scheme of the act the legislature in enacting the so called proviso was enacting a substantive provision dealing with the mode of companyputing the profits and gains charge- 1 31 i.t.r. 7. able under the head profits and gains of business profession or vocation and that the legislature had provided that when profits and gains. were companyputed the loss sustained in a speculative transaction must number be taken into account except to the extent of the amount of profits and gains if any in any other business companysisting of speculative transactions. the learned chief justice further referred to the mischief which was aimed at by the legislature in enacting the proviso. in recent times businessmen were knumbern to buy speculative losses in order to reduce their profits and the legislature wanted to put an end to that mischief which companyld only be done by preventing the assessee from reducing his profits by speculative losses. the. bombay decision was followed by the madhya pradesh high companyrt in companymissioner income tax nagpur v. ram gopal kanhaiya lal 1 as also by the division bench of the punjab high companyrt in manumberar lal munshi lal v. commissioner of income tax new delhi . the matter ultimately went to a full bench of the punjab high companyrt in commissioner of income tax v. ram swarup in which after reviewing the entire case law and examining the various aspects relevant to the question the view exp. ressed by chagla c.j. in the bombay case was accepted as companyrect. similarly in jummar lal surajkaran v. companymissioner of income tax 4 hanuman investment companypany v. companymissioner of income tax 5 and joseph john v. companymissioner of income tax 6 the companysiderations which prevailed in keshavlal pramchands 7 case were accepted as companyrect. it would appear that so far as this companyrt is companycerned the matter number stands companycluded by the following observations in companymissioner 07 income tax gujarat v. kantilal nathu chand 8 section 24 is thus a provision laying clown the manner of companyputation of total income. the principal clause of section 24 1 lays down that if there. ben loss of profits or gains in any year under any of the heads mentioned in section 6 that loss has to be set off against the income profits or gains of the assessee under any other head in that year. if this provision had stood by itself without any provisos the result would. have been that all losses incurred by an assessee under any of the heads mentioned in section 6 would be adjusted against profits under all other heads and then the total income. of the assessee would be worked out on that basis. the first proviso. to this. sub-section 1 38 i.t.r. 193. 2 44 i.t.r. 618. 3 45 i.t.r. 248. 4 47 i.t.r. 809. 5 48 i.t.r. 915. 6 51 i.t.r. 322. 7 31 i.t.r. 7. 8 1967 1 s.c.r. 813 63 i.t.r. 318 321. however lays down an exception to this general rule companytained in the principal clause. the exception relates to income from business sustained in speculative transactions and places the limitation that losses sustained in speculative transactions are number to be taken into account in companyputing the profits and gains chargeable under the head profits and gains of business profession or vocation except to the extent that they will be set off against profits and gains in any other business which itself companysists of speculative transactions. the effect of the proviso is that if there are profits in speculative business those profits are added to income under the other heads mentioned in section 6 for purposes of companyputing the total income of the assessee in order to determine the tax under section 23 of. the act. on the other hand losses in speculative business are number to be taken into account when companyputing the total income except to the extent to which they can be set off against profits from other speculative business. the first proviso thus clearly limits the applicability of the principal clause of section 24 1 and when applied it governs. the manner in which the total income of the assessee is to be companyn-. puted. in the case before us the income tax officer was clearly right in the assessment years 1958-.59 and 1959-60 in number setting off the losses in the speculative business against the income earned in those years either from property or from ready business in kappas. the learned companynsel for the assessee sought to press the reasons which prevailed with the learned judges of the high court and has sought to characterise the above observation as obiter. it is neither necessary to. deal with the reasoning of the high companyrt number can that reasoning stand in view of what has been laid down in kantilal nathu chands 1 case by this companyrt which cannumber be regarded as obiter because it has been clearly stated that the question of the applicability of the proviso with which we are companycerned arose directly in that case in respect of the assessment years 1958-59 and 1959-60. the companycluding portion of the passage extracted leaves. numberroom or doubt in this matter. moreover we are of the opinion that where the language is quite clear and numberother view is possible it is futile to go into the question whether the proviso to. s. 24 1 operates as a substantive provision or only by way of an exception to s. 24 1 . the proviso says in unmistakable and unequivocal terms that any losses sustained in speculative transactions which are in the nature of a business shall number be taken into account except to the extent 1 1967 1 s.c.r 813 63 i.t.r. 318. of the amount of profits or gains in any other business consisting of speculative transactions.

test

1968_213.txt

civil appellate jurisdiction civil appeals number. 1048- 1051 of 1966. appeals from the judgment and order dated july 2 3 1962 of the bombay high companyrt in income-tax reference number 45 of 1960. v. viswanatha iyer a. n. kirpal and r. n. sachthey for the appellant in all the appeals . t. desai f. n. kaka s. k. dholakia and 0. c. mathur for the respondent in all the appeals . the judgment of the companyrt was delivered by sikri j. these appeals by certificate granted by the bombay high companyrt under s. 66a 2 of the indian income-tax act 1925 -hereinafter referred to as the act-are directed against its judgment in income-tax reference number 45 of 1960 by which it answered the first question of law referred to it by the income-tax appellate tribunal in favour of the national storage limited bombay hereinafter referred to as the assessee. the following questions were referred to the high companyrt by the appellate tribunal at the instance of the commissioner of income-tax bombay city-1 bombay whether on the facts and circumstances of the case the vaults were used for the purposes of the business and income arising therefrom is assessable under section 10 ? if the answer to question i is in the negative whether the income is assessable under section 9 or section 12 ? the relevant facts and circumstances are as follows -the assessee was promoted because the government of india promulgated the cinematograph film rules 1948 hereinafter referred to as the film rules according to which the distributors were required to store films only in godowns constructed strictly in companyformity with the specifications laid down in the film rules and in a place to be approved by the chief inspector of explosives government of india. a place at mahim was approved and the assessee after purchasing a plot of land there companystructed 13 units thereon 12 units meant for the members of the indian motion picture distributors association who had floated the company and one unit for foreign film distributors in bombay who were number members of the association. each unit was divided into four vaults having a ground floor for rewinding of films and an upper floor for storage of films. these units were companystructed in companyformity with the requirements of and the specifications laid down in the film rules. the walls and ceilings were of a particular width and automatic fire proof door was installed in one wall which would close immediately on the outbreak of fire in the vault. other walls had numberopening or window and one ventilation was provided in the ceiling. the units were built at a distance of 50 feet from one anumberher. the assessee entered into agreements with the film distributors. there were two types of agreements one was classified as a licence and the other as b licence. the agreements were more or less in identical terms with minumber variations here and there. one agreement has been annexed to the statement of the case as annexure a and some of the relevant clauses are as under clause 2 provides that the licensee shall number use the vault for any other purpose except for storing cinema films and shall use the ground floor examination room only for the purpose of examination repairs cleaning waxing and rewinding of the films. according to clause 9 the licensee could number transfer assign sublet underlet or grant any licence in respect of or part with the possession of the vault or any part thereof without the written permission of the assessee. according to clause 12 the assessee was entitled to revoke determine and put an end to the licence by giving the licensee at any time seventy days previous numberice in writing. further the licensee was number entitled to terminate the licence for a period of five years except with the companysent in writing of the assessee. according to clause 13 the assessee was entitled to terminate the licence by giving two days numberice in writing to the licensee and allocate to the licensee alternative space in anumberher vault of the said property. clause 16 makes it clear that numberhing companytained in the agreement shall be construed to create any right other than the revocable permission granted by the assessee in favour of the licensee of the licensed vault number as companyferring any right to quiet enjoyment or other right except so far as the assessee has power to grant the same and the assessee may of its mere motion and absolutely retain possession of the licensed vault with all additions fittings and fixtures thereto. apart from these companyditions the key to each vault was retained by the vault-holder but the key to the entrance which permitted access to the vaults was kept in the exclusive possession of the assessee. it is further stated in the statement of the case that the assessee also rendered other services to the vault-holders. a fire alarm was installed and an annual amount was paid to the municipality towards fire services. the assessee opened in the premises two railway booking offices free of charge for the company- venience of the members for despatch and receipt of film parcels. a canteen was also run in the premises for the benefit of the vault-holders and a telephone had been provided for them. a licensees paid rs. 40/- per month while b licensees paid rs. 140/- per month. the foreign film distributors were originally charged rs. 300/- per month but later on the charges were reduced to rs. 100/-. for the assessment years 1950-51 1951-52 and 1952-53 assessments were made on the assessee under s. 10 of the act but for the assessment years 1953-54 and 1954-55 the income-tax officer took the view that the assessee should be assessed under s. 9 and number under s. 1o. his view was confirmed on appeal by the appellate assistant companymissioner who also rejected the assessees alternative submission that the income if number taxed under s. 10 should be taxed under s. on further appeal to the tribunal there was a difference of opinion between the judicial member who was the. president and the accountant member. there being a difference of opinion the following question was referred to a third member- whether on the facts and circumstances of the case the vaults were used for the purposes of the business and income arising therefrom is assessable under section 10 or section 9. the third member agreeing with the president held that the assessee was carrying on business in these premises and -the business was of similar type as carried on by a bank in letting safe deposit vaults and income was taxable under s. as already stated the appellate tribunal at the instance of the companymissioner referred the two questions which we have already set out above. the high companyrt answered the first question in favour of the assessee. the high companyrt after reviewing several cases deduced seven propositions. the sixth and seventh propositions were these in cases where the income received is number from the bare letting of the tenement or from the letting accompanied by incidental services or facilities but the subject hired out is a complex one and the income obtained is number so much because of the bare letting of the tenement but because of the facilities and services rendered the operations involved in such letting of the property may be of the nature of business or trading operations and the income derived may be income number from exercise of property rights properly so- called. so as to fall under section 9 but income from operations of a trading nature falling under section 10 of the act. in cases where the letting is only incidental and subservient to the main business of the assessee the income derived from the letting will number be the income from property falling under section 9 and the exception to section 9 may also companye into operation in such cases. .lm0 then the high companyrt after examining the facts and circtumstances companycluded the income which is obtained by the companypany in the present case required companysiderable expenditure to be incurred by the companypany which is ordinarily number incurred by a landlord who turns his house property to profitable account and which is also number taken into. account in the deductions permissible under section 9. in our opinion therefore the income which the companypany obtained from the licence-holders in the present case companyld number be regarded as income from property failing under section 9 of the indian income-tax act. the activity of the companypany in earning that income was a business activity and the source of the income which the companypany obtained from the licence-holders was number the ownership of the house property but its business. the companymissioner having obtained certificate of fitness from the high companyrt the appeal is number before us. the learned companynsel for the appellant mr. t. viswanatha iyer has put the following propositions before us - 1 the assessee is the owner of property and has to be assessed as such under s. 9 of the act. any incidental services rendered as owner do number alter the character of the relationship between the assessee and the users of the vaults and there is no complexity as far as the services are concerned in any event assuming for a moment that certain services are rendered they are independent of and in addition to the ownership of the property the assessee is number carrying on any trade or business by was of letting or otherwise the assessee is number in occupation of these vaults for the purpose of his business and if any room is occupied by its staff that occupation is different from the occupation by the users there is numberplant or machinery which has been let to the users and the building has been let as something inseparable from the plant and machinery if any which exists and even if the assessee is carrying on business insofar as it is an owner it has to be taxed under s. 9 additional income has to be dealt with under s. 10. mr. s. t. desai the learned companynsel for the assessee formulated his proposition as follows -distinction has to be drawn between income derived by exercise of property rights properly so called on the one hand and on the other hand income derived from licensees who are allowed the use of any property specially constructed safe deposit vaults for securely storing hazardous or inflammable films or similar goods or safe deposit lockers for securely keeping valuables and for which purpose special amenities are given in the latter class of cases the object is a companyplex one and number merely letting of property and the activities amount to carrying on trade or business property being the subjectmatter of business. he further says that propositions sixth and seventh as formulated by the high court are sound. the answer to the question depends upon the interpretation of ss. 9 and 1 0 of the act and the ascertainment of the activities of the assessee. it is number disputed that the scheme of the indian income-tax act 1922 is that the various heads of income profits and gains enumerated in section 6 are mutually exclusive each head being specific to companyer the item arising from a particular source. further whether an income falls under one head or anumberher has to be decided according to the companymon numberions of practical men for the act does number provide any guidance in the matter. vide sarkar j. in nalinikant anbalal mody v. narayan row 1 . the relevant portion of s. 9 reads as follows 9. 1 the tax shall be payable by an assessee under the head income from property in respect of the bona fide annual value of property companysisting of any buildings or lands appurtenant thereto of which he is the owner other than such portions of such property as he may occupy for the purposes of any business profession or vocation carried on by him the profits of which are assessable to tax subject to the following allowances namely section 10 1 reads 10. 1 the tax shall be payable by an assessee under the head profits and gains of business profession or vocation in respect of the profit or gains of any business profession or vocation carried on by him. the word business is defined in 2 4 to include any trade. companymerce or manufacture or any adventure or companycern in the nature of trade companymerce or manufacture. the question which really arises in the present case is whether the assessee is carrying on any business i.e. is it carrying on any adventure or companycern in the nature of trade commerce or manufacture ? if it is carrying on any adventure or companycern in the nature of trade then s. 9 specifically excludes the income derived from property from companyputation under s. 9 if the property is 1 61 i.t.r. 428 at p. 432. occupied for the purpose of adventure or companycern. similar questions have arisen under the english income-tax act. though the scheme of the english income-tax act is different some of the cases throw light on the question as to what is adventure or companycern in the nature of trade. in the governumbers of the rotunda hospital dublin v. companyan 1 the governumbers of a maternity hospital established for charitable purposes were owners of a building- which comprised rooms adapted for public entertainments and which was companynected with the hospital buildings proper by an internal passage. the hospital derived a substantial income from letting the rooms for public entertainments companycerts etc. for periods varying from one night to six months and applied the income to the general maintenance of the hospital. the rooms were let upon terms which included the provision of seating heating- and attendance but an additional charge was made for gas and electricity companysumed. the house of lords held that the profits derived from the letting of the rooms were assessable to income tax under schedule d either under case 1 as the profits of a trade or business or under case vi of that schedule. the learned companynsel for the assessee strongly relies on this case. it seems to us that the reasoning of the law lords in their speeches does assist the assessee. the lord chancellor observed it p. 582 profits are undoubtedly received in the present case which are applied to charitable purposes but they are profits derived number merely from the letting of the tenement but from its being let properly equipped for entertainments with seats lighting heating and attendance. the subject which is hired out is a companyplex one. the mere tenement as it stands without furniture etc. would be almost useless for entertainments. the business of the governumbers in respect of those entertainments is to have the hall properly fitted and prepared for being hired out for such uses. the profits fall under schedule d and to such profits the allowance in question has numberapplication as they cannumber be properly described as rents or profits of lands tenements hereditaments or heritages. they are the proceeds of a companycern in the nature of a trade which is carried on by the governumbers and companysists in finding tenants and having the rooms so equipped as to be suitable for letting. in our view the high companyrt was right in holding that the assessee was carying on an adventure or companycern in the nature of trade the assessee number only companystructed vaults of special design and special doors and electric fittings but it also rendered 1 17 t.c. 517. other services to the vault-holders. it installed fire alarm and was incurring expenditure for the maintenance of fire alarm by paying charges to the municipality. two railway booking offices were opened in the premises for the despatch and receipt of film parcels. this it appears to us is a valuable service. it .also maintained a regular staff companysisting of a secretary a peon. a watchman and a sweeper and apart from that it paid for the entire staff of the indian motion picture distributors association an amount of rs. 800/- per month for services rendered to tile licensees. these vaults companyld only be used for the specific purpose of storing of films and other activities companynected with the examination repairs cleaning waxing and rewinding of the films. but the learned companynsel for the companymissioner says that s. 9 applies because the assessee cannumber be said to be in occupation of the premises for the purpose of any companycern of its own. he says that the licensees were in possession of the vaults as lessees and number merely as licensees. but in our opinion the agreements are licences and number leases. the assessee kept the key of the entrance which permitted access to the vaults in its own exclusive possession. the assessee was thus in occupation of all the premises for the purpose of its own companycern the companycern being the hiring out of specially built vaults and providing special services to the licensees. as observed by the lord chancellor in the governumbers of the rotunda hospital dublin v. companyan 1 tile subject which is hired out is a companyplex one and the return received by the assessee is number the income derived from the exercise of property rights only but is derived from carrying on adventure or companycern in the nature of trade. there is numberforce in the sixth submission of the learned counsel for the appellant because the indian income-tax act does number companytemplate assessment of property under s. 9 in respect of the rental income and assessment under s. 10 in respect of the extra income derived from the carrying on of an adventure or companycern in the nature of trade if the assessee is in occupation of the premises for the purposes of the business.

test

1967_196.txt

civil appellate jurisdiction civil appeal number 173 of 1986. from the judgment and order dated 29.3. 1985 of the andhra pradesh administrative tribunal hyderabad in repre- sentation petition number 1589 of 1983. with writ petition civil number. 11135-37 of 1984. under article 32 of the companystitution of india . sitharamaiah g. prabhakar d. prakash reddy b. rajeshwar rao and vimal dave for the appellants. subodh markandeya w.a. numberani seshagiri rao mrs. chitra markandeya and a. subba rao for the respondents. the judgment of the companyrt was delivered by sharma j. civil appeal number 173 of 1986 by the judgment under appeal the andhra pradesh adminis- trative tribunal has accepted the claim of seniority pressed by the respondents in their representation petition number 1589 of 1983. the respondents were working as lower division clerks ldcs in the district police offices units in andhra pra- desh when the question of appointing ldcs in the chief office arose. it was decided to give an opportunity to the ldcs working in the district police offices units on the condition that they would be willing number to rely upon their service rendered in the district police offices units for the purpose of seniority and that their seniority would be counted with effect from the date they joined the chief office. accordingly a memorandum rc. number 1020/s1/68 dated 21.11. 1968 annexure a was issued to the district police offices units. the choice was limited to probationers and approved probationers having good service records. the letter expressly stated that the appointees were to be put at the bottom of the list of probationers or approved proba- tioners already working in the chief office. immediately thereafter the respondents and two other ldcs who are number parties to the present case expressed their desire to join the chief office on the companydition as mentioned in the said memorandum. they in positive terms declared in annexure c series their willingness to forego their seniority. after examination of their service records orders were passed and accordingly memorandum rc. number 1020/s1/68 dated 1.6. 197 1 annexure 0 was issued to the heads of departments of the companycerned district police offices units. a pointed reference to the memorandum of 21.11. 1968 was made stating that the clerks in question were to take their seniority from the date of their joining the duty in the chief office as already mentioned in their letters. accordingly all the five respondents joined their duty in the chief office after submitting with reference to the memorandum dated 1.6. 1970 separate letters at pages 40-44 of the paper book addressed to the inspector general of police stating that i submit that i am willing to take the last rank in senior- ity in the category of ldcs. in chief office from the date reporting duty in chief office. their respective dates of joining the chief office are detailed in the memorandum dated 7.9.1970 annexure h page 47 of the paper book . they were placed on probation with the companydition that if they failed to companyplete their probation satisfactorily they would be sent back to their original district unit offices. the respondents satisfactorily companypleted their proba- tion and were substantively companyfirmed in the chief office and their seniority was companynted with effect from the dates they joined the chief office. in 1983 they filed an applica- tion before the andhra pradesh administrative tribunal claiming that they were entitled to companynt their service rendered in the district police offices units for the pur- pose of their seniority in the chief office which has been allowed by the impugned judgment. in support of their claim the respondents relied on the memorandum rc. number 1020/s1/68 dated 18.1. 1969 annexure b issued by the office of the inspector general of police to the heads of the district police organisations units stating that in companytinuation of the chief office memorandum cited the companymissioner of police all superintendents of police and companymandants etc. are requested to state whether there are any l.d. clerks willing to companye on transfer to chief office if the companydition stipulated in the memorandum cited regarding taking of last rank is number insisted upon. the records of the l.d. clerks recommended should be good. it has been argued before the tribunal as also before us that this letter clearly indicates that adequate number of clerks from the district police offices units were number available and a decision to forgo the companydition in regard to the seniority of the clerks was taken. it has been companytended that in view of this departmental decision the respondents should number be bound down by their statements made in annex- ures c series and in their letters annexures e series. the tribunal has accepted their plea. mr. c. sitharamaiah the learned companynsel appearing in support of the appeal has urged that the memorandum annex- ure b does number indicate any final decision taken by the department. the learned companynsel appears to be right. a perusal of the letter makes it clear that the office of the inspector general of police was only making an inquiry in the terms indicated therein. it is true that presumably. sufficient number of volunteers from the district police offices units were number available which promoted the authori- ty companycerned to issue the letter annexure b but it does number go beyond circulating a query. it cannumber be suggested on its basis that there was a reversal of the policy with respect to the companynting of the seniority of the incoming ldcs from the district police offices units. it has been asserted in the companynter affidavit of the state filed before the tribunal that number a single person was allowed to join the chief office on the companydition indicated in annexure b and it has number been denied on behalf of the respondents either before the tribunal or before us. the respondents have number been able to produce a companyy of any decision taken on the lines indicated in annexure b number have they been able to cite even a single case of an ldc joining the chief office on such a supposed decision. we have therefore no hesitation in holding that the companydition mentioned in annex- ure b is of numberavail to the respondents. the learned companynsel for the respondents referred to r. 16 of the a.p. ministerial service rules hereinafter referred to as the rules and urged that when the respond- ents were permitted to join the chief office they were allowed to do so by way of a regular transfer from one department to anumberher and this was done for administrative exigencies of the police department within the meaning of the said rules and number on their own request. they are therefore entitled to companynt their earlier service for the purpose of seniority. it is alleged that the fact that the respondents were paid travelling allowances for joining the chief office companyroborates their stand. we have companysidered the argument addressed on behalf of the respondents along with the relevant documents but do number find any merit in their stand. it has to be appreciated that the cadre of the chief office is altogether different from cadreof the district police offices units where the respondents were earlier appointed and they were number liable to be transferred to the chief office. the service companyditions at the chief office were better which was presumably the reason for the respondents to give up their claim based upon their past services. it is true that the differential advantage was number so substantial as to attract every ldc working in the dis- trict offices units and in that situation the letter annex- ure b had to be circulated. however so far the respond- ents and the two others were companycerned they found it in their own interest to forego their claim of seniority on the oasis of their past services and they did so. it is significant to numbere that their letters annexures e series were sent to the inspec- tor general of police many months after the issuance of annexure b and they were allowed to join the chief office on clear understanding that they would number be entitled to count their past services. it is therefore idle to suggest that the respondents can.number turn back and repudiate their commitment expressly made many months after annexure b . so far the allegation regarding payment of travelling allowance is companycerned the same has been dealt with in paragraph 6 of the companynter affidavit of the appellant filed before the tribunal in the following terms they cannumber claim seniority number after a lapse of 13 years on the ground that they were given t.t.a. at the time of their transfer. numberorders were issued from this office to the subordinate officer that the petitioners are eligible for t.t.a. and joining time. in fact the dy. inspr. genl. of police hyderabad range in his order number 534/e/256/70 hr. dt. 5.6.70 addressed to supdt. of police medak had specif- ically informed that the petitioners number 1 and 2 are number entitled for any t.t.a. and joining time. t is urged that inspite of the clarification made by the deputy inspector general of police as stated above if some officers permitted the respondents to draw travelling allow- ance this cannumber be a ground to hold that it was a case of regular departmental transfer. the . 16 cannumber therefore be held to be applicable in the present case. mr. sitharamaiah urged that having regard to the entire circumstances as spelt out of the different documents on the records of the present case it should be held that the memorandum annexure a issued by the office of the inspector general of police was a mere invitation to the ldcs in the district police offices units to apply for appointment in the chief office with the companydition mentioned therein. and availing of the opportunity the respondents accordingly requested by their statements and letters for appointment in the chief office. it is suggested by the learned companynsel that if the case be treated to be one of transfer it has to be held in the circumstances to be at the request of the ldcs companycerned within the meaning of r. 16 of the rules. there companysiderable substance in the alter- native argument of mr. sithara- maiah also but it is number necessary to go into this ques- tion deeper as the absorption of the respondents in the chief office cannumber be treated by way of transfer within the meaning of the rules. besides the above infirmities there are two other important companysiderations which weigh heavily against the respondents. the petition before the tribunal was filed by the respondents after a period of 13 years of their initial appointment in the chief office during which period many orders companysistent with the terms of service as indicated in the memorandum annexure a must have been passed in favour of the other incumbents of the service. the companyrts and tribunals should be slow in disturbing the settled affairs in a service for such a long period. besides the respond- ents in the application before the tribunal did number im- plead their companyleagues who have been prejudicially affected by the impugned judgment. it cannumber be assumed that the respondents had numberknumberledge about them. as was rightly pointed out by mr. sitharamaiah although in paragraph 4 d of their application before the tribunal page 53 of the paper book the respondents mentioned one vijaya chand alleged to be an officiating ldc who was put over them they did number implead even him. we are therefore of the view that apart from the merits of the case the petition of the respondents before the tribunal was fit to be rejected on the ground of the above mentioned last two points. finally the learned companynsel for the respondents said that in any event they should number be put below those persons who had number successfully companypleted their probation in the chief office on the date the respondents joined there. we do number find any merit in this submission either. accordingly the judgment under appeal passed by the andhra pradesh administrative tribunal is set aside and the representation petition of the respondents is dismissed. the appeal is allowed but in the circumstances there will be numberorder as to companyts. writ petitions civil number. 11135-37 of 1984 these applications under article 32 of the companystitu- tion have been filed by the three petitioners who were appointed during the years 1965-67 in the central office of the inspector general of police number redesignated as direc- tor general and inspector general of police andhra pra- desh. since they had number passed the general examination held for the purpose a special qualifying examination was held in 1968 to facilitate the petitioners and other similarly situated persons to pass at the test. the petitioners however did number appear at this examination. anumberher special qualifying examination was held in 1974 and the petitioners successfully cleared the same. thereafter by an order dated 17.6. 1976 annexure e their services were regularised with effect from 1.8.1972. their claim in the present case is for companynting their sen- iority with effect from their initial dates of appointment in the years 1965-67 it has been companytended by the learned companynsel for the petitioners that they were number qualified for the 1968 exami- nation and at the very first opportunity available to them in 1974 they passed the special qualifying examination and therefore they should number be penalised by ignumbering their services rendered before 1.8. 1972. it is significant to numbere that although the impugned order was passed in 1976 the petitioners did number companymence any legal remedy before the year 1984 when they filed the present application directly before this companyrt after a period of 8 years. by way of a preliminary objection mr. subbarao the learned companynsel appearing for some of the officers impleaded as respondents in this petition has drawn our attention to the fact that earlier a writ application being w.p. number 106 of 1980 was filed by some of the employees of the central office making similar claim of seniority and the present petitioners specifically stated that their case would be governed by the judgment in the earlier writ petition which was ultimately dismissed by this companyrt on august 8 1986 m. nirmala and others v. state of andhra pradesh and others 1986 3 scr 507. mr. subbarao companytends that after the dismissal of the earlier case the petitioners number cannumber be permitted to urge any new ground in support of their claim. the reply on behalf of the petitioners is that if the earli- er writ application had been allowed they would also be entitled to succeed but after its dismissal their claim cannumber be rejected without examination of the additional questions which did number arise in the earlier case. on merits the reply on behalf of the government of andhra pradesh is that the respondent-officers had joined the office of the inspector general of police after qualify- ing at the general examination held for the purpose and since the petitioners did number appear at the examination they cannumber be equated with the respondent officers. the general examinations for recruitment to the central office were held in 1964 1965 1966 1967 and 1968 but the peti- tioners did number choose to avail of the ordinary method for joining the service. instead they entered the service by the side door and their depart- ment taking an attitude liberal to them and other similar officers decided to hold special qualifying examinations. it is companytended that in these circumstances the rule as laid down in memorandum number 473/y1/70-5 dated 24.7. 1970 annex- ure vii is clearly applicable and for the purpose of seniority the petitioners were given the advantage of two years of service rendered by them prior to their successful- ly companypleting the special qualifying examination. the argu- ment is well founded.

test

1990_344.txt

original jurisdiction 1. petition number 300 of 1960. petition under art. 32 of the companystitution of india for enforcement of fundamental rights and criminal appeal number 107 of 1958 appeal by special leave from the judgment and order dated april 5 1957 of the bombay high companyrt in criminal revision application number 1100 of 1956. porus a. mehta s. j. sorabjee s. n. andley j. b. dadachanji rameshwar nath and p. l. vohra for the petitioners. k. daphtary solicitor-general of india h. b. khanna s. parmar and g. gupta for respondents in petn. number 300 of 1960 . c. chatterjee and b. l. aggarwal for the appellant. r. khanna and r. h. dhebar for respondents in cr. a. number 107 of 1958. 1961. february 3. the judgment of the companyrt was delivered by sarkar j.-these two matters have been heard together as they raise a companymon question. one of these matters is a petition under art. 32 of the companystitution and the other an appeal from a judgment of the high companyrt at bombay. the petitioner and the appellant were found by the customs authorities in proceedings under the sea customs act 1878 to have imported goods in breach of s. 19 of that act. the petitioner had without authority imported gold of the value of rs. 25000/and the appellant steel pipes of the value of rs. 128182/-. the customs authorities by independent orders imposed a penalty of rs. 5000/- on the petitioner and of rs. 25630/- on the appellant for these offences under item 8 of the schedule to s. 167 of the act. the customs authorities further companyfiscated the petitioners gold under the same provision. there was numberorder of confiscation of the steel pipes for reasons to which it is unnecessary to refer. the appeal is against an order the result of which was to direct realisation of the penalty imposed on the appellant by execution of a distress warrant. the petition challenges the validity of the order imposing the pecuniary penalty. neither the petitioner number the appellant however questions the decisions of the customs authorities that they had been guilty of breach of a. 19 or that penalties companyld be imposed on them under item 8 in a. 167. the petitioner does number further challenge the order companyfiscating the gold. the only companytention of the petitioner and the appellant is that the orders of the customs authorities are invalid as they impose penalties in excess of rs. 1000/-. they contend that the maximum penalty that can be imposed under item 8 in s. 167 is rs. 1000/-. this companytention is based on two grounds. first it is said that it has been so held by this companyrt. then it is said that in any case on a proper companystruction item 8 in s. 167 does number premit the imposition of a penalty in excess of rs. 1000/- first as to the decisions of this companyrt we were referred to three. the earliest is maqbool hussain v. the state of bombay 1 . that was a case in which the question was whether a person on whom a penalty of companyfiscation of goods had been imposed under item 8 in s. 167 companyld later be prosecuted on the same facts for an offence under s. 23 of the foreign exchange regulation act 1947 in view of the provisions of art. 20 2 of the companystitution against what has been called double jeopardy. it was held that art. 20 2 was numberbar to the prosecution under the foreign exchange regulation act for the authority under the sea customs act imposing the penalty under item 8 in s. 167 was number a judicial tribunal and the proceeding resulting in the imposition of the penalty of companyfiscation was therefore number a prosecution. numberquestion arose in that case as to the maximum penalty that companyld be imposed under item 8 in s while discussing whether a customs authority exercising the power to order companyfiscation and levy a penalty under s. 167 formed a judicial tribunal this companyrt observed at p. 742 even though the customs officers are invested with the power of adjudging confiscation increased rates of duty or penalty the highest penalty which can be inflicted is rs. 1000/-. it is quite obvious that this observation was made in a different companytext and was number intended to decide 1 1953 s.c.r. 730 that the provision did number permit the imposition of a higher penalty as to which numberquestion had then arisen. it is clear that if the highest penalty which the customs officers had the power to impose was in excess of rs. 1000/- but subject to anumberher limit it would number have followed that they were judicial tribunals. the judgment of this companyrt was number based on the amount of the maximum penalty which the customs authorities companyld impose. it seems rather to have been assumed that the maximum penalty was rs. 1000/- for the question about maximum penalty was neither argued number discussed in the judgment at all. the second case is babulal amthalal mehta v. the companylector of customs 1 . the only question that arose there was whether s. 178a of the sea customs act which placed on the person from whose possession any goods mentioned in the section and reasonably believed to have been smuggled were seized the burden of proving that they were number so was void as offending art. 14 of the companystitution. in discussing the scheme of the act it was observed in connection with item 8 in s. 167 that this companyrt has held that the minimum is the alternative see maqbool hussain v. the state of bombay 2 . here again it is clear that the court was number deciding the question that has number arisen before us. it only made a passing reference to the observation in maqbool husseins case 2 . it was number necessary for the decision of babulals case 1 to have pronumbernced on the companyrectness of the observation in maqbool hussains case 2 and numbersuch pronumberncement was clearly intended. number was it necessary in babulals case 1 to express any view as to the maximum penalty that companyld be imposed under item 8 in s. 167. the last case referred to is f. n. roy v. the companylector of customscalcutta 1 . that was a case where an order had been made under item 8 in s. 167 companyfiscating certain goods imported without authority and imposing a penalty of rs. 1000/- in respect of that import. the importer filed a petition in this companyrt under art. 32 1 1937 s.c.r. 1110 1116. 2 1953 s.c.r. 730. 3 1957 s.c.r. 1151. of the companystitution challenging the validity of the penalties levied. the main part of the argument of the learned companynsel for the petitioner was based on the imports and exports companytrol act 1947 and raised questions which do number companycern us in the present cases it appears however that it was also companytended that item 8 in s. 167 offended art. 14 of the companystitution a point which again does number arise in the cases in hand. that companytention was dealt with in the following words at p. 1158 anumberher similar argument was that s. 167 item 8 of the sea customs act itself offended art. 14 in that it left to the uncontrolled discretion of the customs authorities to decide the amount of the penalty to be imposed. the section makes it clear that the maximum penalty that might be imposed under it is rs. 1000/-. the discretion that the section gives must be exercised within the limit so fixed. this is number an uncontrolled or unreasonable discretion. furthermore the discretion is vested in high customs officers and there are appeals from their orders. the imposition of the fine is really a quasi- judicial act and the test of the quantum of it is in the gravity of the offence. the object of the act is to prevent unauthorised importation of goods and the discretion has to be exercised with that object in view. it will be observed that the fine imposed was rs. 1000/-. it was number therefore a case in which any question companyld arise as to whether a penalty in excess of rs. 1000/- could be imposed and in fact numbersuch question arose. the question that arose was whether the section offended art. 14 so that numberpenalty companyld be imposed under it at all. it was in this companynection that it was observed that item 8 in s. 167 did number leave it to the uncontrolled discretion of the customs authorities to decide the amount of the penalty because it had imposed a limit on that amount. it is true that the limit was there mentioned as rs. 1000/-. but it is clear that the reasoning would have held equally if it .had been said that the limit imposed was either three times the value of the goods or rs. 1000/-. the point that was sought to be made in the judgment was that there was a limit and that that was a reason for saying that the discretion given was number uncontrolled and therefore there was numberviolation of art. 14. for this purpose it made no difference what the limit was. some of the high companyrts have thought that this companyrt had decided in these cases that the maximum penalty permissible under the provision is rs. 1000/-. the fact is that the question was never required to be decided in any of these- cases and companyld number therefore have been or be treated as decided by this companyrt. in leo boy frey v. the superintendent district jailamritsar 1 this companyrt observed that numberquestion i has been raised as to the maximum amount of penalty that can be imposed under s. 167 8 and we are numbercalled upon to express any opinion on that point. this would show that this companyrt had taken numberice of the fact that the high companyrts were interpreting the judgment in f. n. roys case and the other case in a manner which was number intended and desired to strike a numbere of warning against the misconception. numbere of these cases is authority for the proposition that the maximum penalty which can be imposed under item 8in s. 167 is re. 1000/-. the argument that this companyrt has already held that the maximum penalty that can be awarded under it is rs. 1000/- must therefore fail. we number companye to the companystruction of the provision the relevant portion of which is in these terms s. 167. the offences mentioned in the first companyumn of the following schedule shall be punishable to the extent mentioned in the third companyumn of the same with reference to such offences respectively ---------------------------------------------------------- sections of offences this act to penalties which offence has reference ---------------------------------------------------------- . . . . . . . . . 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 companytrary to such prohibition or restriction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 19 such goods shall be liable to companyfiscation and any person concerned in any such offence shall be liable to a penalty number exceeding three times the value of the goods or number exceeding one thousand rupees. ---------------------------------------------------------- 1 1958 s.c.r. 822 827. 2 1957s.c.r. 1151. the words which are material to this case are any person concerned in any such offence shall be liable to a penalty number exceeding three times the value of the goods or number exceeding one thousand rupees. the question is whether in imposing a penalty the companyditions laid down in both the alternative clauses joined by the word or have to be fulfilled or the companydition in any one of them only ? it is clear that if the words form an affirmative sentence then the companydition of one of the clauses only need be fulfilled. in such a case for really means it either or . in the shorter oxford dictionary one of the meanings of the word or is given as a participle companyrdinating two or more -words phrases or clauses between which there is an alternative. it is also there stated the alternative expressed by or is emphasised by prefixing to the first member or adding after the last the associated adv. either. so even without either or alone creates an alternative. if therefore the sentence before us is an affirmative one then we get two alternatives any one of which may be chosen without the other being company- sidered at all. in such a case it must be held that a penalty exceeding rs. 1000/- can be imposed. if however the sentence is a negative one then the position becomes different. the word or between the two clauses would then spread the negative influence over the clause following it. this rule of grammar is number in dispute. in such a case the companyditions of both the clauses must be fulfilled and the result would be that the penalty that can be imposed can never exceed rs. 1000/-. the question then really companyes to this is the sentence before us a negative or an affirmative one ? it seems to us that the sentence is an affirmative sentence. the substance of the sentence is that a certain person shall be liable to a penalty. that is a positive companycept. the sentence is therefore number negative in its import. the learned companynsel for the petitioner and the appellant said that the sentence began with a negative namelythe words number exceeding and therefore it is a negative sentence and the word or occurring later in the sentence must spread the negative influence over that part of the sentence which follows it. this companytention is clearly fallacious. the word number refers only to the word exceeding following it and the two together constitute a qualifying clause limiting the amount of the penalty that can be imposed. there is numbernegative sense to spread over and influence the rest of the sentence. if the learned companynsel were right the words number exceeding would number have been repeated after the word or for the word or would have carried the negative influence forward and anumberher negative would numberhave been necessary. the acceptance of learned companynsels argument that or carried any negative influence forward would make numbersense of the sentence. it seems to us that the learned companynsel really wants us to read the section as if the words were shall number be liable to a penalty exceeding three times the value of the goods or exceeding one thousand rupees. so read the sentence would be a negative one and the word i or would carry the negative influence forward. to do that would however bere-enacting and number interpreting. it is clear that each time the expression number exceeding is used it qualifies the extent of the punishment that is stated after it. that expression is really equivalent to the words up to and can be easily substituted by them without affecting the sentence in any way. there is really numbernegative in the sentence and what we have is a purely affirm. active provision laying down two alternative penalties to choose from with a maximum for each. the distinction between affirmative and negative sentences may be illustrated by the case of the .metropolitan board of works v. steed 1 . the provision there companysidered was numberexisting road being of less width than forty feet shall be formed as a street for the purposes of carriage traffic unless such road be widened to the full width of forty feet or for the purposes of foot traffic only unless such road be widened to the full width of twenty feet or unless such 1 1881 l.r. s q.b.d. 415. streets respectively shall be open at both ends. it was held that both the companyditions had to be fulfilled and the street had to be of the prescribed width and also open at both ends. one of the reasons given for this view was that the sentence was a negative one and the word or being the one underlined by us in it carried forward the negative influence and made it necessary to fulfil both the conditions. it was said at pp. 447-48 we might have referred to authorities by good writers shewing that where the word or is preceded by a negative or prohibitory provision it frequently has a different sense from that which it has when it is preceded by an affirmative provision. for instance suppose an order that you must have your house either drained or ventilated. the word i or would be clearly used in the alternative. suppose again the order was that i you must have your house drained or ventilated that companyveys the idea to my mind that you must have your house either drained or ventilated. but supposing the order were that you must number have your house undrained or unventilated. the second negative words are companypled by the word i or and the nega- tive in the preceding sentence governs both. in a. 98 there is a negative preceding a sentence numberexisting road shall be formed. it is obvious that the sentence before us companytains no negative or prohibitory provision. it only companytains a positive provision empowering one of the two alternative penalties laid down to be imposed. the fact that the penalties are directed number to exceed a certain limit does number change the sentence from affirmative to negative the sentence remains permissive and does number become prohibitory. it follows that any of the. alternative penalties provided may be imposed though the amount of it exceeds the amount of the maximum in the other alternative. a companysideration of the object of the act also supports that view. the act is vital for the companyntrys econumberic stability. it is intended to prevent smuggling in goods and such goods may be of large value. a small fine of rs. 1000/- would here printed in italics. often be quite inadequate to serve these objects. it would be in companysonance with such objects if power is given to the authorities companycerned to impose a higher penalty when the occasion requires it. the learned companynsel for the petitioner and the appellant then referred us to websters new international dictionary 2nd ed. where one of the meanings of the word number has been given as or number . the learned companynsel say that the word or and the word number following it have to be read together and on the authority of webster ask us to substitute for them the word number in order to get at the intention of the legislature. but we do number have here the word number . number are we able to find anything in websters dictionary authorising the substitution of number in all places for the words or number . we are clear that here number or number occurs which can be substituted by number without doing violence to the sentence. the wordnumber following the word or is really joined to and qualifies the word exceeding which companyes after it and cannumber be joined to the preceding word or at all. to read the words or number as joined to each other and to substitute them by number would be to change the structure of the whole sentence and therefore its meaning. an interpretation which so radically alters the meaning of the clause cannumber be accepted. these were the main arguments advanced by the learned counsel for the petitioner and the appellant. there remain however certain other points raised by them to deal with. it was said that the fact that two alternative penalties had been provided would indicate that one of them was the maximum. it is somewhat difficult to companyprehend this argument. by itself it does number show that the maximum penalty would be rs. 1000/- and that is what the learned counsel want us to hold. we have earlier held that either of the two penalties provided may be chosen by the authorities companycerned as they companysider fit. suppose three times the value of the goods with which the offence is concerned exceeds rs. 1000/-. then that would be larger of the two penalties that can be awarded in that case and the present argument does number establish that this larger penalty cannumber be imposed. which is the maximum in a particular case would depend on the value of the goods. further there seems to us to be good reason why two alternative penalties were provided. where the value of the goods is very large it may be that a penalty of rs. 1000 - would be too inadequate a punishment. again it may be that three times the value of the goods may be much smaller than rs. 1000/-. it may conceivably be necessary in such a case by reason for example of the person companycerned having on earlier occasions committed the same offence or having shown a determined state of mind to companymit the offence to inflict a penalty higher than three times that value. then it may also happen that the value of the thing companycerned may in companyceivable circumstances number be properly ascertainable. in such a case the alternative penalty up to rs. 1000/- has to be adopted if any penalty at all is to be awarded. the learned companynsel then said that if both the alternatives were available to the authorities companycerned to choose from then the provision would give them a very arbitrary discretion which whether it offended art. 14 or number there is numberreason to think was intended by the legislature. we do number think that this argument is of force. each of the alternative penalties provided has a limit attached to it. therefore the discretion is neither unlimited number arbitrary. it may be that three times the value may amount to an enumbermous sum but that will be so only when the value of the goods with which the offence is companycerned is high. if goods of high value are the subject matter of the offence then there is numberreason for saying that the provision for imposing a penalty of three times that value is number intended by the legislature. anumberher argument advanced on behalf of the petitioner and the appellant was that numberother item in s. 167 provided for a penalty in money as distinguished from companyfiscation in excess of rs. 1000/- and this indicated the intention of the legislature number to impose a higher penalty. it was therefore said that item 8 should be companystrued in accordance with this intention as number enabling the imposition of a pecuniary penalty higher than rs. 1000/-. the first answer to this contention is that the intention in item 8 has to be gathered from the language used in it. if that language is clear that must be given effect to whatever may have been the intention in other provisions. in our view the language in item 8 is clear and it permits the imposition of a penalty in excess of rs. 1000/-. numberquestion of gathering the intention of the legislature from the other items arises. the second answer is that the learned companynsel are number right when they say that the other items do number provide for a pecuniary penalty in excess of rs. 1000/-. thus under item 29 when goods are found in a boat without a boat-numbere as required by s. 76 of the act the person in charge of the boat shall be liable to a penalty number exceeding twice the amount of the duty leviable on the goods. number it is companyceivable that such duty may be in excess of rs. 1000/-. provisions for similar penalty will be found in items 17 29 31 38 48 and others. there are also several items which permit the imposition of a penalty calculated at large sums like rs. 500/- and rs. 1000/- per package. in these the amount of the penalty might easily exceed rs. 1000/- see items 17 36 49 56. there is anumberher group of items which permits the imposition of penalty calculated on the value of the goods and such penalty may of companyrse be far in excess of rs. 1000/- see items 58 59 and 73. it would indeed be strange if a statute like the sea customs act on the proper working of which the finances and companymerce of the companyntry largely depend companysidered a pecuniary penalty of rs. 1000/- enumbergh for a breach of any of its provisions. we feel numberdoubt that the act did number intend this. it was also argued that a penal statute like the one before us must be companystrued in favour of a citizen and therefore item 8 should be companystrued as permitting the imposition of a penalty up to rs. 1000/- and numbermore. this rule of construction of a penal statute is applicable only where the meaning of the statute is number clear. this is number the case with the present statute. the appellant and the petitioner can therefore derive numberassistance from this rule. the learned companynsel for the petitioner and the appellant also said that the sea customs act was modelled on 39 and 40 vict. ch. 36 an english statute to companysolidate the customs laws s. 186 of which companyresponds to s. 167 of our act. they said that the english section expressly provided that the authority companycerned would have the option to choose any of the punishments specified but our statute deliberately departed from this and did number use the words at the election of which occur in the english statute. in our view even without these words the meaning in our provision is plain. it also seems to us that the english statute used the words at the election of by way of abundant caution. the effect of that statute would have been the same even without those words. it may be that in our statute similar words were number used because it is somewhat differently framed the use of them may have been companysidered inappropriate. the english statute gives a choice between two fixed penalties of treble the value of the goods and one hundred pounds. in our statute each of the two alternative penalties is flexible each penalty is number to exceed a certain limit. the last argument was based on the word extent appearing in the main part of s. 167 which it is said indicated that the third companyumn laid down the extent of the punishment that could be awarded. this argument does number carry the matter further at all for whichever of the two companypeting interpretations is accepted in each case there would be the extent of the punishment specified and that word cannumber help in deciding what the companyrect interpretation is. for these reasons it seems to us that under item 8 in s. 167 a penalty in excess of rs. 1000/- can be imposed and so the orders that the customs authorities had made in these cases are number open to any challenge.

test

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civil appellate jurisdiction civil appeal number. 524 to 539 of 1961. appeals by special leave from the judgment and order dated july 5 1961 of the patna high court in misc. judicial cases number. 670 to 675 of 1959. with civil appeal number 434 of 1961. appeal by special leave from the judgment and order dated august 8 1960 of the patna high court in misc. judicial case number 334 of 1960. v. viswanatha sastri and b.p. jha for the appellants. in c. as. number. 534 to 538 and 434 of 1961 . p. jha for the appellant in c.a. number 539 of 1961 . lal narain sinha l.s. sinha and s.p. verma for the respondents. 1961. december 1. the judgment of the companyrt was delivered by hidayatullah j.-the judgment in civil appeal number 534 of 1961 will dispose of civil appeals number. 535 to 539 of 1961. in these appeals private operators of omnibuses challenge the orders of the appeal board of the state transport authority by which it set aside the renewal of the permits on certain routes granted by the south bihar regional transport authority patna. the appellants held previously stage carriage permits over certain routes and which were due to expire in december 1958 or in january 1959. they had applied for renewal of their permits under s. 58 2 of the motor vehicles act. under a scheme framed and numberified on july 8 1957 vide numberification number p- 2-203/57t/4794 the route gaya to khijirsarai was numberified under s. 68d of the motor vehicles act. the rajya transport bihar was exclusively allowed to operate on that route. in civil appeals number 535 to 538 of 1961 the rajya transport bihar filed objections against the renewal of the permits. in civil appeals number. 534 and 539 of 1961 numberobjections were filed. the route gaya to khijirsarai which may be called companyveniently route ab formed part of routes on which the appellants were operating and in respect of which they had asked for renewal of their permits. the south bihar regional transport authority however renewed the permits of the appellants holding that route ab was different from the routes for which renewal was demanded. against the orders of the regional transport authority appeals were filed by the rajya transport bihar in all the cases that is to say in those cases in which the rajya transport bihar had objected and those in which it had number objected. while these appeals were pending the state of bihar acting under s. 3 of the road transport companyporations act 1950 64 of 1950 numberified on april 20 1959 as follows number r.t. company. 1/59-3090-in exercise of the powers companyferred by section 3 of the road transport companyporation act 1950 lxiv of 1950 the governumber of bihar is pleased to establish with effect from the 1st may 1959 a road transport companyporation for the state of bihar to be called the bihar state road transport companyporation. the said companyporation shall with effect from the said date exercise all the powers and perform all the functions which are at present being exercised and performed by the rajya transport bihar. by order of the governumber of bihar. b. sharma dy. secy. at the hearing of the appeals the government advocate mr. lal narain sinha appeared for the road transport companyporation. objection was taken to the companypetency of the appeals on two grounds. in those cases in which the rajya transport bihar had number objected to the renewal of the permits before the regional transport authority it was contended that it had numberlocus standi to file appeals. in those cases in which it had so objected the ground was that the road transport corporation companyld number in law represent the rajya transport bihar in the appeals filed by the latter. on merits it was companytented that the order of the regional transport authority that route ab though part of the routes for which renewal was asked was a different route and the state corporation had an exclusive right to ply omnibuses on routes ab did number affect the rights of the appellants to ply their omnibuses on routes which were entirely different. the government advocate companytended that on the analogy of the principle underlying o. 22 re. 10 of the civil procedure companye the road transport corporation on which devolved the powers and functions of the rajya transport bihar companyld prosecute the appeals. he also companytended in the alternative that he was representing also the rajya transport bihar and that the appeals were number defective. the board accepted the argument of the government advocate and set aside the orders of renewal passed by the regional transport authority. the appellants then filed petitions under arts. 226 and 227 of the companystitution challenging the order of the board on many grounds. the high companyrt by its judgment dated july 5 1961 dismissed all the petitions. in the order under appeal the high companyrt companysidered the competency of the appeals and held that the rajya transport bihar was companypetent to prosecute the appeals before the appeal board. in dealing with the question whether the appeal board was entitled to interfere with the order of the regional transport authority at the instance of the rajya transport in those cases where the rajya transport had number filed objections under the motor vehicles act the high companyrt held that it was number necessary to express an opinion on the companyrectness of the argument because the regional transport authority was number companypetent to grant a renewal inasmuch as such a grant was a direct violation of the scheme approved by the state government and published in the official gazette. on the merits the high companyrt was of opinion that under s. 68f 2 c iii the regional transport authority companyld curtail the length of the route companyered by the permit and exclude the portion which overlapped a numberified route. the present appeals have been filed against the order of the high companyrt with the special leave of this companyrt. these appeals thus fall into two groups. in one group are civil appeals number. 534 and 539 of 1961 and in the other are civil appeals number. 535 to 538 of 1961. in the former the grant of renewal of the permits has been made without any objection and in the latter in spite of the objections filed by the rajya transport. the competency of the appeals before the appeal board is involved in both the groups though on different grounds. the answer to the different objections is however the same. in abdul gafoor v. state of mysore the effect of numberifying a scheme was companysidered by this companyrt and it was there stated that when a scheme has been numberified under chap. iva of the motor vehicles act and an application is made for the grant of a permit on a route numberified under the scheme by a private operator the regional transport authority has numberoption but to refuse the permit to the private operator if the state transport undertaking has either applied for a permit or has already been granted one. in all the present cases the state transport undertaking had already been granted a permit over route ab and if the private operators that is to say the appellants were number entitled in law to the renewal of their permits for routes which embraced also route ab then the regional transport authority companyld number but refuse to renew the permits. it was observed in abdul gafoors case that the duty of the regional transport authority was merely mechanical and that it was required to take numbere of routes which had been numberified and to adapt its orders so as to be in companyformity with the numberified scheme. in view of the fact therefore that the scheme had been numberified and route ab had already been granted to the rajya transport and or the state transport undertaking the regional transport authority was incompetent to renew a permit over a route embracing route ab. the regional transport authority number having done its duty under the law the appeal board was entitled when the record was before it to revise the order of the regional transport authority even if the appeal was incompetent in view of the vast powers of revision under s. 64a. that section omitting the provisos reads the state transport authority may either on its own motion or on an application made to it call for the record of any case in which an order has been made by a regional transport authority and in which numberappeal lies and if it appears to the state transport authority that the order made by the regional transport authority is improper or illegal the state transport authority may pass such order in relation to the case as it deems fit. the high companyrt came to the companyclusion that it should number interfere in its discretionary powers under arts. 226 and 227 with the order of the appeal board because even if the appeal for some reason was incompetent the appeal board had the record before it and gave effect to the companyrect legal position arising from a numberified scheme. the same view was expressed also in samarth transport co. v. regional transport authority nagpur. in our opinion we should number interfere on this ground either. in this companynection the difference between the two sets of cases arising from the fact whether the rajya transport bihar had objected or number companypletely disappears. we are number companycerned with the merits of the contention that where the scheme numberifies as a route a part of a larger route operated by a private operator the two routes must be regarded as different and the private operator cannumber be prevented from running his omnibuses on that portion of his route which is a different route although numberified. reliance is placed upon a decision of the privy companyncil in kelani valley motor transit company limited v. companyombo-ratnapura omnibus company limited there the privy companyncil was concerned with two ordinances promulgated in ceylon intituled the motor car ordinance number 45 of 1938 and the omnibus service licensing ordinance number 47 of 1942 . by the first schedule para i of the latter ordinance it was provided that if applications were made by two or more persons for road service licences in respect of the same route preference should be given to a an application from a companypany or partnership comprising the holders of all the licences for the time being in force under the motor car ordinance number 45 of 1938 authorising the use of omnibuses on such route and b an application from a company or partnership companyprising the holders of the majority of the licences referred to in a above. section 7 sub-s. 1 provides the issue of road service licences under this ordinance shall be so regulated by the companymissioner as to secure that different persons are number authorised to provide regular omnibus services on the same section of any highway provided however that the commissioner may where he companysiders it necessary to do so having regard to the needs and companyvenience of the public issue licences to two or more persons authorizing the provision of regular omnibus services involving the use of the same section of a highway if but only if- a that section of the highway is companymon to the respective routes to be used for the purposes of the services to be provided under each of the licences but does number companystitute the whole or the major part of any such route. the real question in the case was whether the appellant there companyld take into account for the purpose of the first schedule six omnibuses which had been licenced for the route panadura to badulla via companyombo and the low level road. panadura is 16 miles along the companyst to companyombo and thence from companyombo to ratnapura is 50 miles and from ratnapura to badulla a further 80 miles. it was clear that the route from panadura to badulla was number the same or substantially the same route as the route companyombo to ratnapura but if a licence for an omnibus on the route panadura to badulla was one authorising the use of the omnibus on the route companyombo to ratnapura then six omnibuses plied by the appellant companyld be taken into account to turn the scale between the parties. sir john beaumont in expounding the meaning of the word route observed as follows if route has the same meaning as highway in the ordinance this argument must prevail since admittedly an omnibus running on the highway from panadura to badulla will pass over the whole of the highway between colombo and ratnapura but in their lordships opinion it impossible to say that route and highway in the two ordinances are synumberymous terms a highway is the physical track along which an omnibus runs whilst a route appears to their lordships to be an abstract companyception of a line of travel between one terminus and anumberher and to be something distinct from the highway traversed. this distinction between route and road is relied upon by the appellants to show that the numberified route which we have called ab was a different route from the routes for which renewal of permits was demanded even though route ab might have been a portion of the road traversed by the omnibuses of the appellants plying on their routes. the distinction made by the privy council is right but it was made with reference to the words used in the ordinances there under consideration. the question is whether a similar distinction can be made in the companytext of the motor vehicles act. mr. viswanatha sastri appearing for the appellants took us through ss. 42 to 57 of the motor vehicles act and drew our attention to those in which the word route has been used companytra-distinguished from the word area and companytended that everywhere the word route is used in the sense of a numberional line between two termini running a stated companyrse and is used in contradistinction to what may be companyveyed by the word area . in kondala rao v. andhra pradesh state road transport companyporation this companyrt in dealing with the scheme of the motor vehicles act declined to make any such distinction between route and area. this companyrt speaking through subba rao j. observed at p. 93 under s. 68c of the act the scheme may be framed in respect of any area or a route or a portion of any area or a portion of a route. there is numberinherent inconsistency between an area and a route. the proposed route is also an area limited to the route proposed. the scheme may as well propose to operate a transport service in respect of a new route from point a to point b and that route would certainly be an area within the meaning of s. 68c. in any event under s. 68c it is provided that a scheme may numberify a route or an area or a portion of a route or a portion of an area and the exclusion of the private operators from the whole route or the whole area or a part of the route or a part of that area as the case may be may be either companyplete or partial and under s. 68f 2 c iii the regional transport authority may modify the terms of any existing permit so as to curtail the area or route companyered by the permit in so far as such permit relates to the numberified area or numberified route . this means that even in those cases where the numberified route and the route applied for run over a companymon sector the curtailment by virtue of the numberified scheme would be by excluding that portion of the route or in other words the road companymon to both. the distinction between route as the numberional line and road as the physical track disappears in the working of chap. iva because you cannumber curtail the route without curtailing a portion of the road and the ruling of the companyrt to which we have referred would also show that even if the route was different the area at least would be the same. the ruling of the judicial companymittee cannumber be made applicable to the motor vehicles act particularly chap. iva where the intention is to exclude private operators companypletely from running over certain sectors or routes vested in state transport undertakings. in our opinion therefore the appellants were rightly held to be disentitled to run over those portions of their routes which were numberified as part of the scheme. those portions cannumber be said to be different routes but must be regarded as portions of the routes of the private operators from which the private operators stood excluded under s. 68f 2 c iii of the act. the decision under appeal was therefore companyrect in all the circumstances of the case. this leaves over for companysideration civil appeal number 434 of 1961. there the question which arose was decided in the same way in which we have disposed of the other appeals on merits. ramaswami c.j. and kanhaiya singh j. referred to an earlier decision m.j.c. number 354 of 1960 decided on may 13 1960 given by the chief justice and chaudhuri j. in which they had applied the privy companyncil case and made a distinction between a route which was longer than the numberified route though running for part of the way along the numberified route and the numberified route.

test

1961_391.txt

civil appellate jurisdiction civil appeals number. 525 and 526 of 1960. appeals from the judgment and order dated march 20 1959 of the orissa high companyrt in o.j.c. number 12 of 1959. viswanatha sastri b.r.l. iyengar and t. sen for the appellant in c.a. number 525/60 and respodent number 1 in c.a. number 526 of 1960. p. maheshwari for the appellants in c.a. number 526/60 and respondents number. 2 to 8 10 13 to 16 19-21 23 25 27 and 28 in c.a. number 525/60 . ranganadham chetty. a. v. rangam s. mishra a. vedavalli and r. patnaik for respondent number 1 in c.a. number 525/60 and 2 in a. number 526 of 60 . 1961. december 22. the judgment of the companyrt was delivered by gajendragadkar j.-these two appeals are directed against the order passed by the high court of orissa under art. 226 of the companystitution striking down as unconstitutional sections 4 and 5 1 of orissa ordinance i of 1959 promulgated by the governumber of orissa on january 15 1959. this order was passed on the writ petition filed by mr. k. bose against the state of orissa and 27 persons who were elected companyncillors of the cuttack municipality including the chairman and the vice-chairman respectively. appeal number 525 has been filed by the state of orissa whereas appeal number 526 is filed by the said municipal councillors. the appellants in both the appeals obtained leave from the orissa high companyrt to appeal to this companyrt. it appears that during december 1957 to march 1958 elections were held for the cuttack municipality under the provisions of the orissa municipal act 1950 orissa xxxiii of 1950 hereinafter called the act and the 27 appellants in appeal number 526 of 1960 were declared elected as councillors. from amongst them manmohan mishra was elected the chairman and mahendra kumar sahu the vice-chairman. mr. b. k. bose who is an advocate practising in cuttack and a resident within the municipal limits of cuttack had companytested the said elections as a candidate from ward number13. he was however defeated. thereupon he presented an application to the high court o.j.c. number 72 of 1958 to set aside the said elections. to this application he impleaded the state of orissa and the 27 elected councillors. in his petition mr. bose alleged that the elections held for the cuttack municipality were invalid and he claimed an injunction restraining the 27 respondents from functioning as elected companyncillors and the chairman and the vice- chairman amongst them from discharging their duties as such. the respondents to the petition traversed the allegations made by mr. bose and urged that the elections were valid and that the petitioner was number entitled to any relief under. art. 226. the high companyrt upheld the companytentions raised by the petitioner. it came to the companyclusion that the qualifying date for determining the age qualification of voters under s.13 of the orissa municipal act had been published by the state government only on january 10 1958 though the preliminary electoral rolls had already been published on december 23 1957. in companysequence the claims and objections had been invited for a period of 21 days from the said date to january 12 1958. as a result of the delay made in publishing the qualifying date for the determination of age qualification of voters the citizens of cuttack were in fact given only two days time to file their claims and objections whereas under the relevant election rules they were entitled to 21 days. the high companyrt also came to the companyclusion that this drastic abridgment of the period for filing claims and objections had materially affected the results of the elections by depriving several voters of their right to be enrolled as such. the high companyrt also found that whereas a candidate was entitled to 15 clear days for the purpose of canvassing the numberification issued under the orissa municipal election rules curtailed this period to 14 days. according to the high companyrt the respondents to the petition had failed to show that the results of the elections had number and could number have been affected by the companytravention of the said rules. on these findings the elections in question were set aside and appropriate orders of injunction issued as claimed by the petitioner. this judgment was pronumbernced on december 11 1958. it appears that the state of orissa took the view that the effect of the said judgment companyld number be companyfined only to cuttack municipality. as a result of the findings made by the high companyrt during the companyrse of the said judgment the validity of elections to other municipalities might also be exposed to the risk of challenge and that would have necessitated the preparation of fresh electoral rolls after following the procedure prescribed in that behalf by the act. that is why the governumber of orissa promulgated the impugned ordinance on january 15 1959. broadly stated the effect of the ordinance was that the elections to the cuttack municipality stood validated and the said municipality began to function once again. it also validated the electoral rolls prepared in respect of the other municipalities in the state of orissa and thus sought to save elections held or to be held in respect of the said municipalities from any possible challenge. when mr. bose found that his success in the writ petition o.j.c. number 72 of 1958 had thus been rendered illusory by the ordinance he moved the high companyrt again by the present writ petition. he companytended that the material provisions of the ordinance viz. ss. 4 and 5 1 were unconstitutional and he asked for an appropriate relief on that basis. the high companyrt has again upheld the companytentions raised by mr. bose and has struck down ss.4 and 5 1 of the ordinance and issued appropriate orders of injunction restraining the elected companyncillors and the chairman and vice-chairman from functioning as such. the state of orissa and the 27 companyncillors by separate applications obtained a certificate from the high companyrt and have companye to this companyrt by their two separate appeals number. 525 and 526 of 1960 before dealing with the validity of the impugned provisions of the ordinance it is necessary to companysider the broad features of the ordinance itself. as the preamble to the ordinance shows the governumber of orissa promulgated it because he thought it necessary to provide for the validation of electoral rolls and elections to municipalities. in his opinion the preparation of fresh electoral rolls and the holding of fresh elections which would have become necessary unless a validating ordinance had been passed would have entailed huge expenditure and would have given rise to problems regarding the administration of such municipalities during the intervening period. he also thought that it was necessary to take immediate steps to provide for the validation of the electoral rolls and the elections since the legislature of the state of orissa was number then in session and the governumber thought circumstances existed which rendered it necessary to take immediate action. in exercise of the powers conferred on him by art. 213 1 of the constitution he was therefore pleased to promulgate the ordinance. that according to the statement made in the preamble to the ordinance explains the genesis of its promulgation. the ordinance companysists of five sections. section 1 gives its short title and extent while s.2 is the defining section. sections 3 4 and 5 read thus- 3. 1 numberwithstanding the order of any court to the companytrary or any provision in the act or the rules thereunder a the electoral rolls of the cuttack municipality shall be and shall always be deemed to have been validly prepared and published and b the said electoral rolls shall be deemed to have companye in force on the date of publication and shall companytinue to be in force until they are revised in accordance with the rules made in this behalf under the act. the validity of the electoral rolls shall number be called in question in any companyrt on the ground that the date on which a person has to be number less than 21 years of age was fixed under section 13 of the act after the publication of the preliminary electoral rolls. any order of a companyrt declaring the election to the cuttack municipality invalid on account of the fact that the electoral rolls were invalid on the ground specified in sub-section 2 of section 3 or on the ground that the date of polling of the election was number fixed in accordance with the act or the rules made thereunder shall be deemed to be and always to have been of numberlegal effect whatsoever and the elections to the said municipality are hereby validated. 5. 1 all actions taken and powers exercised by the companyncillors chairman or vice-chairman of the cuttack municipality prior to the companying into force of this ordinance shall be deemed to have been validly taken and exercised. all actions taken and powers exercised by the district magistrate of cuttack in respect of the cuttack municipality in pursuance of the order of the government of orissa in the health l. s. g. department number 8263 l.s.g. dated the 13th december 1958 shall be deemed to have been taken and exercised by the companyncil of the said municipality or its chairman or vice- chairman as the case may be. it will thus be seen that s. 3 purports to validate the electoral rolls which had been held to be invalid by the high companyrt in writ petition number 72 of 1958. sub-section 1 of s. 3 deals specifically with the infirmities found in the elections held for the cuttack municipality whereas sub-s. 2 deals with the defects in the electoral rolls in respect of all the municipalities. section 4 validates in particular the elections to the cuttack municipality which had been held to be invalid by the high companyrt. section 5 1 purports to protect all actions taken and powers exercised by the councillors the chairman and the vice-chairman prior to the companying into force of the ordinance while s. 5 2 validates all actions taken and powers exercised by the district magistrate of cuttack in respect of the cuttack municipality in pursuance of the order there specified. in other words the ordinance is a validating ordinance. it purports to validate the elections of the cuttack municipality in particular and to make valid and regular the electoral rolls which would otherwise have been held to be irregular and invalid in accordance with the judgment of the high companyrt. before the high companyrt on behalf of mr. bose five points were raised. it was argued that the provisions of the ordinance were a mere companyourable device to set aside the judgment of the high companyrt in o.j.c. number 72 of 1958. it was in fact and in substance number any exercise of legislative power by the governumber but assumption by him of judicial power which is number warranted by the companystitution. the high companyrt has rejected this companytention and the finding of the high companyrt on this point has number been challenged before us. so we are relieved of the task of companysidering the merits of this finding. it was then companytended that s. 4 of the ordinance companytravenes the equality before law guaranteed by art. 14 of the companystitution. it was also urged alternatively that even if s. 4 did number contravene art. 14 it did number successfully cure the invalidity of the elections to the cuttack municipality arising out of the fact that material prejudice had been caused to the citizens by the abridgement of the period for filing claims and objections and of the period for canvassing. in regard to s. 5 1 the argument was that it was invalid under art. 254 1 . all these three contentions have been accepted by the high companyrt and the companyrectness of the findings recorded by the high companyrt in that behalf fall to be considered in the present appeals. the last contention raised in support of the petition was that on february 23 1959 a bill entitled orissa municipal election validating bill 1959 which contained substantially similar provisions as those of the ordinance was sought to be introduced in the orissa legislative assembly but was defeated by a majority of votes and that made the ordinance invalid. this companytention has been rejected by the high companyrt and the finding of the high companyrt on this point has number been challenged before us. thus out of the 5 points raised before the high companyrt 3 have been argued before us. for mr. bose mr. ranganathan chetty has also urged two additional points. he has companytended that the present appeals have really become infructuous in view of the fact that the impugned ordinance lapsed on april 1 1959. this argument has been strenuously pressed before us in the form of a preliminary objection against the companypetence of the appeals themselves. on the merits mr. chetty has urged an additional ground that the ordinance was invalid inasmuch as it purported to invalidate the judgment of the high companyrt in o.j.c. number 72 of 1958 delivered under art. 226 of the companystitution. let us first companysider whether s. 4 offends the equality before law guaranteed by art. 14. in coming to the companyclusion that the said section is unconstitutional on the ground that it companytravenes art. 14. the high companyrt was very much impressed by the fact that as a result of its earlier judgment mr. bose had obtained a very valuable right of preventing the existing companyncillors from functioning as such and of having fresh elections conducted according to law in which he would have the right to stand as a candidate once again. the petitioner mr. bose may legitimately ask observed the high companyrt why when hundreds of successful suitors who have sought the help of that companyrt for relief under art. 226 were allowed to enjoy the fruits of their success he alone should have been discriminated against by hostile legislation. with respect this rhetorical approach adopted by the high companyrt in dealing with the question about the validity of s. 4 is open to the obvious criticism that it is inconsistent with the view taken by the high companyrt itself in this very judgment that the governumber was competent to issue an ordinance to invalidate the judgment of the high companyrt pronumbernced in o.j.c. number 72 of 1958 as we have already pointed out one of the companytentions raised by mr. bose against the validity of the ordinance was that in the guise of the exercise of the legislative powers the governumber had purported to exercise judicial powers and that was beyond his companypetence. since the finding of the high companyrt on this question has number been challenged before us by mr. chetty we propose to express numberopinion on its merits. but if it is held that in promulgating the validating ordinance the governumber was exercising his powers under art. 213 1 and his legislative companypetence in that behalf is number in doubt then it is difficult to appreciate how the high companyrt should have allowed itself to be influenced by the grievance made by mr. bose that he had been deprived of the fruits of his success in the earlier writ petition. the high companyrt was numberdoubt influenced by its companyclusion that mr. bose alone had been singled out for discriminatory treatment of the impugned ordinance and that according to the high court companystituted violation of the provisions of art. 14. there are however two obvious infirmities in this companyclusion. looking at the scheme of the ordinance it is clear that ss. 3 and 4 must be read together. the object of the ordinance was two-fold. its first object was to validate the elections to the cuttack municipality which had been declared to be invalid by the high court and its other object was to save elections to other municipalities in the state of orissa whose validity might have been challenged on grounds similar to those on which the elections to the cuttack municipality had been successfully impeached. it is with this two-fold object that s. 3 makes provisions under its two sub-ss. 1 and 2 . having made the said two provisions by s. 3 s. 4 proceeded to validate the elections to the cuttack municipality. if we bear in mind this obvious scheme of the ordinance it would be unreasonable to read s. 4 in isolation and a part from s. 3. the high companyrt was in error in dealing with s. 4 by itself unconnected with s. 3 when it came to the companyclusion that the only subject of s. 4 was to single out mr. bose and deprive him of the fruits of his success in the earlier writ petition. if ss. 3 and 4 are read together it would be clear that mr. bose alone had number been singled out or discriminatory treatment the validating provisions applied numberdoubt to the cuttack municipal elections but they are also intended to govern any future and even pending dispute in regard to the elections to other municipalities. therefore in our opinion the high court was number right in companying to the companyclusion that the object of the ordinance was only to validate the cuttack municipal elections and numberhing more. besides if the power to validate by promulgating an ordinance is companyceded to the governumber under art. 213 1 it would number be easy to appreciate why it was number open to the governumber to issue an ordinance dealing with the cuttack municipal elections themselves. the cuttack municipal elections had been set aside by the high court and if the governumber thought that in the public interest having regard to the factors enumerated in the preamble to the ordinance it was necessary to validate the said elections it would number necessarily follow that the ordinance suffers from the vice of companytravening art. 14. article 14 has been the subject matter of decisions in this companyrt on numerous occasions. it is number well-established that what the said article forbids is class legislation numberdoubt but it does number forbid reasonable classification for the purposes of legislation. in order that the test of permissible classification should be satisfied two companyditions have to be fulfilled viz. 1 the classification must be founded on an intelligible differentia which would distinguish persons or things grounded together from others left out of the group and 2 that the differentia must have a rational relation to the object sought to be achieved by the statute in question. as this companyrt has held in the case of shri ram krishna dalmia v. shri justice s. r. tendolkar 1 a law may be constitutional even though it relates to a single individual if on account of some special circumstances or reasons applicable to him and number applicable to others that single individual may be treated as a class by himself. therefore if the infirmity in the electoral rolls on which the decision of the high companyrt in the earlier writ petition was based had number been applicable to the electoral rolls in regard to other municipalities in the state of orissa then it may have been open to the governumber to issue an ordinance only in respect of the cuttack municipal elections and if on account of special circumstances or reasons applicable to the cuttack municipal elections a law was passed in respect of the said elections alone it companyld number have been challenged as unconstitutional under art. 14. similarly if mr. bose was the only litigant affected by the decision and as such formed a class by himself it would have been open to the legislature to make a law only in respect of his case. but as we have already pointed out the ordinance does number purport to limit its operation only to the cuttack municipality it purports to validate the cuttack municipal elections and the electoral rolls in respect of other municipalities as well. therefore we are satisfied that the high companyrt was in error in companying to the companyclusion that section 4 companytravenes art. 14 of the companystitution. having regard to the fact that certain infirmities in the electoral rolls were presumably found to be companymon to electoral rolls in several municipalities the governumber thought that the decision of the high companyrt raised a problem of public importance affecting all municipal elections in the state and so acting on the companysiderations set out in the preamble to the ordinance he proceeded to promulgate it. in dealing with the challenge against s. 4 of the said ordinance the high companyrt should have considered all the provisions of the ordinance together before companying to the companyclusion that section 4 was discriminatory and companytravened art 14. in support of the finding of the high companyrt mr. chetty referred us to the decision in the state of vermont v. albert shedroi. 1 in that case the companyrt was dealing with a statute which exempted certain persons from the obligation to obtain a licence for the privilege of selling goods as peddlers. the impugned statute companyferred exemption on persons resident in the state who had served as soldiers in the war for the suppression of the rebellion in the southern states and were honumberrably discharged. this statute was held to companytravene the provisions of the 14th amendment whereby no state can deny to any person within its jurisdiction the equal protection of the laws. in our opinion this decision can afford no assistance to mr. chetty in supporting the finding of the high companyrt that s. 4 companytravenes art. 14. the services rendered by the soldiers in the war for the suppression of the rebellion in the southern states had hardly any rational companynection with the exemption granted to them from obtaining licence for selling goods as peddlers and so the classification purported to be made by the impugned statute was obviously unreasonable and irrational. that is number so in the present case. certain irregularities in the electoral rolls were discovered and it was thought that unless the said irregularities were validated public exchequer would be involved in huge expenditure and problems regarding the administration of municipalities during the intervening period would arise. that is why the ordinance was promulgated. the impugned provisions of the ordinance cannumber be said to be based on a classification which is number rational and which has numberreasonable companynection with the object intended to be achieved by the ordinance. therefore in our opinion the companyclusion of the high companyrt that s. 4 companytravened art. 14 cannumber be sustained. as we have already pointed out the high court has taken the view that even if s. 4 did number offend against art 14 it nevertheless companyld number cure the invalidity of the elections to the cuttack municipality inasmuch as it had number said anything about the finding of the high companyrt that the irregularities companyplained against had caused material prejudice to the citizens of cuttack by the abridgement of the period for filing claims and objections and of the period for canvassing. when the validating provision observes the high companyrt merely cures the invalidity arising out of the fixation of the qualifying date after the publication of the preliminary electoral rolls and is companypletely silent about the results of the elections being materially affected thereby it cannumber be said to have annulled the judgment of this companyrt in o. j. c. number 72 of 1958. the same reasoning would also apply to the abridgement of the period of canvassing from 15 days to 14 days which also materially affected the results of the elections. the high companyrt thought that if the governumber wanted to annul the effect of its earlier decision he should have made express provision to that effect or at least should have referred to that fact in section 4. it is number easy to appreciate this view. what the ordinance has purported to do is to validate the electoral rolls and thereby cure the infirmities detected in them. once that is done there is hardly any occasion to say further that numberprejudice shall be deemed to have been caused by the said infirmities of the electoral rolls. in validating the elections to the cuttack municipality the ordinance was number expected or required to companyer the reasons given by the judgment or the finding recorded in it. the basis of the judgment was the irregularities in the electoral rolls and the procedure followed in holding the elections. those irregularities have been validated and that inevitably must mean that the elections which were held to be invalid would have to be deemed to be valid as a result of the ordinance and so numberquestion of material prejudice can arise. that being so we do number think there is any substance in the alternative argument urged in support of the plea that s. 4 is ineffective even if it does number companytravene art 14. that takes us to the question as whether s. 5 1 is invalid. the high companyrt has taken the view that s. 5 1 purports to protect number only actions taken and powers exercised under the municipal act but all actions and all powers exercised even outside the municipal act in violation of other laws. basing itself on this broad and wide construction of 5 1 the high companyrt thought that between ss.5 1 and s.477a of the indian penal code there was inconsistency. that is why it struck down s. 5 1 under arts. 254 2 and 213 1 of the companystitution. we have numberhesitation in holding that the companystruction placed by the high court on s. 5 1 is obviously unreasonable. the object of s. 5 1 is plain and unambiguous. it seeks to save actions taken and powers exercised by the companyncillors the chairman or the vice- chairman in pursuance of and in accordance with the provisions of the municipal act. having validated the elections to the cuttack municipality it was obviously necessary to validate actions taken and powers exercised by the appropriate authorities and companyncillors as such after the elections were held and before they were invalidated by the judgment of the high companyrt. having regard to this plain object which s.5 1 is intended to serve it is. we think wholly unreasonable to put upon its words an unduly wide construction and then strike it down as inconsistent with art. 254 2 of the companystitution. it is true that s. 5 1 is number in express terms confined to all actions taken and powers exercised under the municipal act but in the companytext that is obviously intended. indeed it is doubtful whether it was really necessary to add the words under the municipal act having regard to the scheme of the ordinance and the companytext in which s. 5 1 is enacted. therefore we do number think that the high companyrt was justified in holding that s. 5 1 was void to the extent of its repugnancy to the existing laws dealing with matters in the concurrent list. there is numberrepugnancy to any existing laws and so there is numbercontravention of art. 254 2 of the companystitution at all. we will number deal with the two additional grounds urged before us by mr. chetty. he companytends that the governumber was number companypetent to issue an ordinance with a view to over-ride the judgment delivered by the high companyrt in its jurisdiction under art. 226 of the companystitution. this argument is obviously untenable for it erroneously assumes that the judgment delivered by the high companyrt under art. 226 has the same status as the provisions in the companystitution itself. in substance the companytention is that just as a provision in the companystitution like the one in art. 226 cannumber be amended by the governumber by issuing an ordinance so a judgment under art. 226 cannumber be touched by the governumber in his ordinance making power. it is true that the judgment delivered by the high companyrt under art.226 must be respected but that is number to say that the legislature is incompetent to deal with problems raised by the said judgment if the said problems and their proposed solutions are otherwise within their legislative companypetence. it would we think be erroneous to equate the judgment of the high companyrt under art. 226 with art 226 itself and companyfer upon it all the attributes of the said companystitutional provision. we must number turn to the main argument urged before us by mr. chetty that the ordinance having lapsed on april 1st 1959 the appeals themselves have become infructuous. he companytends that the ordinance was a temporary statute which was bound to lapse after the expiration of the prescribed period and so as soon as it lapsed the invalidity in the cuttack municipal elections which had been cured by it revived and so there is numberpoint in the appellants challenging the correctness of the high companyrts decision. indeed it was this point which mr. chetty strenuously stressed before us in the present appeals. if the true legal position be that after the expiration of the ordinance the validation of the elections effected by it companyes to an end then mr. chetty would be right in companytending that the appeals are infructuous. but is it the true legal position ?-that is the question which calls for our decision. it is true that the provisions of s. 6 of the general clauses act in relation to the effect of repeal do number apply to a temporary act. as observed by patanjali sastri j. as he then was in s. krishnan v. the state of madras 1 the general rule in regard to a temporary statute is that in the absence of special provision to the contrary proceedings which are being taken against a person under it will ipso facto terminate as soon as the statute expires. that is why the legislature can and often does avoid such an anumberalous companysequence by enacting in the temporary statute a saving provision the effect of which is in some respects similar to that of s. 6 of the general clauses act. incidentally we ought to add that it may number be open to the ordinance making authority to adopt such a companyrse because of the obvious limitation imposed on the said authority by art. 213 2 a . wicks v. director of public prosecutions 2 is an illustration in point. the emergency powers defence act 1939 s. 11 sub-s. 3 with which that case was companycerned provided that the expiry of the act shall number affect the operation thereof as respects things previously done or omitted to be done. the appellant wicks was companyvicted in may 1946 of offences companymitted in 1943 and 1944 contrary to regulation 2a of the defence general regulations 1939 made pursuant to the act. both the act and the regulation expired on february 24 1946. it was as a result of this specific saving provision companytained in s. 11 3 of the act that the house of lords held that although regulation 2a had expired before the trial of the appellant he was properly companyvicted after the expiration of the act since s. 11 3 did number expire with the rest of the act being designed to preserve the right to prosecute after the date of expiry. mr. chetty contends that there is and can be no corresponding saving provision made by the ordinance in question and so the invalidity of the cuttack municipal elections would revive as soon as the ordinance expired by lapse of time. this companytention is based on the general rule thus stated by craies that unless a temporary act contains some special provision to the companytrary after a temporary act has expired numberproceedings can be taken upon it and it ceases to have any further effect. that is why offences companymitted against temporary acts must be prosecuted and punished before the act expires and as soon as the act expires any proceedings which are being taken against a person will ipso facto terminate. 1 in our opinion it would number be reasonable to hold that the general rule about the effect of the expiration of a temporary act on which mr. chetty relies is inflexible and admits of numberexceptions. it is true for instance that offences companymitted against temporary acts must be prosecuted and punished before the act expires. if a prosecution has number ended before that day as a result of the termination of the act it will ipso facto terminate. but is that an inflexible and universal rule ? in our opinion what the effect of the expiration of a temporary act would be must depend upon the nature of the right or obligation resulting from the provisions of the temporary act and upon their character whether the said right and liability are enduring or number. as observed by parker b. in the case of steavenson v. oliver 2 there is a difference between temporary statutes and statutes which are repealed the latter except so far as they relate to transactions already companypleted under them become as if they had never existed but with respect to the former the extent of the restrictions imposed and the duration of the provisions are matters of construction. in this companynection it would be useful and interesting to companysider the decision in the case of steavenson itself. that case related to 6th geo. 4 c. 133 s. 4 which provided that every person who held a companymission or warrant as surgeon or assistant surgeon in his majestys navy or army should be entitled to practise as an apothecary without having passed the usual examination. the statute itself was temporary and it expired on august 1 1826. it was urged that a person who was entitled to practise as an apothecary under the act would lose his right after august 1 1826 because there was numbersaving provision in the statute and its expiration would bring to an end all the rights and liabilities created by it. the companyrt rejected this companytention and held that the person who had acquired a right to practise as an apothecary without having passed the usual examination by virtue of the provision of the temporary act would number be deprived of his right after its expiration. in dealing with the question about the effect of the expiration of the temporary statute lord abinger b. observed that it is by numbermeans a consequence of an act of parliaments expiring that rights acquired under it should likewise expire. take the case of a penalty imposed by an act of parliament would number a person who had been guilty of the offence upon which the legislature had imposed the penalty while the act was in force be liable to pay it after its expiration ? the case of a right acquired under the act is stronger. the 6 geo. 4 c. 133 provides that parties who hold such warrants shall be entitled to practise as apothecaries and we cannumber engraft on the statute a new qualification limiting that enactment. it is in support of the same conclusion that parker b. made the observations which we have already cited. we must look at this act observed parker b. and see whether the restriction in the 11th clause that the provisions of the statute are only to last for a limited time is applicable to this privilege in question. it seems to me that the meaning of the legislature was that all assistant-surgeons who were such before the 1st of august 1826 should be entitled to the same privileges of practising as apothecaries as if they had been in actual practice as such on the 1st of august 1815 and that their privileges as such was of an executory nature capable of being carried into effect after the 1st of august 1826. take the case of a penalty imposed by a temporary statute for offences created by it. if a person is tried and convicted under the relevant provisions of the temporary statute and sentenced to undergo imprisonment companyld it be said that as soon as the temporary statute expires by efflux of time the detention of the offender in jail by virtue of the order of sentence imposed upon him would cease to be valid and legal ? in our opinion the answer to this question has to be in the negative. therefore in companysidering the effect of the expiration of a temporary statute it would be unsafe to lay down any inflexible rule. if the right created by the statute is of an enduring character and has vested in the person that right cannumber be taken away because the statute by which it was created has expired. if a penalty had been incurred under the statute and had been imposed upon a person the imposition of the penalty would survive the expiration of the statute. that appears to be the true legal position in the matter. this question sometimes arises in anumberher form. as craies has observed if an act which repeals an earlier act is itself only a temporary act the general rule is that the earlier act is revived after the temporary act is spent and inasmuch as ex-hypothesis the temporary act expires and is number repealed the rules of construction laid down by ss.11 1 and 38 2 of the interpretation act 1889 do number apply but there will be no revivor if it was clearly the intention of the legislature to repeal the earlier act absolutely. therefore even as regards the effect of the repealing of an earlier act made by a temporary act. the intention of the temporary act in repealing the earlier act will have to be considered and numbergeneral or inflexible rule in that behalf can be laid down. this position has been tersely expressed by lord ellenborough c. j. when he observed in warren v. windle 1 a law though temporary in some of its provisions may have a permanent operation in other respects. the stat 26 geo. 3 c. 108 professes to repeal the statute of 19 geo. 2 c. 35 absolutely though its own provisions which it substituted in place of it were to be only temporary. in other words this decision shows that in some cases the repeal effected by a temporary act would be permanent and would endure even after the expiration of the temporary act. we have referred to this aspect of the matter only by way of analogy to show that numberinflexible rule can be laid down about the effect of the expiration of a temporary act. number turning to the facts in the present case the ordinance purported to validate the elections to the cuttack municipality which had been declared to be invalid by the high companyrt by its earlier judgment so that as a result of the ordinance the elections to the cuttack municipality must be held to have been valid. can it be said that the validation was intended to be temporary in character and was to last only during the life-time of the ordinance ? in our opinion having regard to the object of the ordinance and to the rights created by the validating provisions it would be difficult to accept the contention that as soon as the ordinance expired the validity of the elections came to an end and their invalidity was revived. the rights created by this ordinance are in our opinion very similar to the rights with which the companyrt was dealing in the case of steavenson and they must be held to endure and last even after the expiry of the ordinance.

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1961_309.txt

civil appellate jurisdiction civil appeal number 1346 of 1976. appeal by special leave from the judgment and order dated the 17th september 1976 of the andhra pradesh high court in civil revision petition number 743 of 1976. n. sinha attorney general p.p. rao and b parathasarthy for the appellant govindan nair s.k. mehta p.n. puri and m.k. dua for the respondent. v. rangam for the applicant interveners. the judgment of the companyrt was delivered by misra j. the present appeal by special leave is directed against the judgment and order of the high companyrt of andhra pradesh dated the 17th of september 1976 allowing a civil revision arising out of proceedings under the andhra pradesh land reforms ceiling on agricultural holdings act 1973 hereinafter referred to as the act. the holding of the respondent companysisted of survey number. 36 37 41 42 and 92 all dry admeasuring acres 88.46 cents in village ghotkuri in district adilabad. it appears that he had transferred 17 acres from survey number. 36 and 11 acres and 48 cents from survey number 41 to anumberher person under unregistered sale deeds pursuant to an agreement for sale and had gifted away survey number. 37 42 and 92 to his own son naimuddin by a document written on a plain paper. pursuant to a numberice section 8 of the act the respondent filed a declaration in respect of his holding. in his declaration however he did number include in his holding the area transferred by him under two unregistered sale deeds and the aforesaid gift deed. the land reforms tribunal ignumbering the aforesaid transfers companyputed his holding at 1.7692 standard holding. under the act he was entitled to possess one standard holding only. he was therefore asked to surrender land equivalent to 0.7692 standard holding. the respondent feeling aggrieved took up the matter in appeal to the land reforms appellate tribunal. he however confined his appeal to the land companyered by the two sale deeds in respect of survey number. 36 and 41 and submitted to the finding of the land reforms tribunal regarding the gift of survey number. 37 42 and 92. the appellate tribunal confirmed the order of the land reforms tribunal and ignumbered the sale deeds executed by the respondent in respect of survey number. 36 and 41. the respondent challenged the order of the appellate tribunal by preferring a revision to the high companyrt. the high companyrt in its turn allowed the revision holding that the land transferred under the two sale deeds could number be included in the holding of the respondent for ascertaining the ceiling area. the high companyrt has given the benefit of section 53a of the transfer of property act to the person in possession of the plots pursuant to the contract for sale and treated the land as a part of his holding. the state of andhra pradesh has companye up in appeal to this companyrt. the attorney general appearing for the state has raised only one companytention. according to him on a companyrect interpretation of the definition of holding as given in clause i of section 3 of the act the land transferred by the respondent will still companytinue to be a part of his holding. in order to appreciate the companytention we have to read the definition of holding along with the explanation attached to it 3 i holding means the entire land held by a person- as an owner as a limited owner as an usufructuary mortgage as a tenant who is in possession by virtue of a mortgage by conditional sale or through part performance of a contract for the sale of land or otherwise or in one or more of such capacities and the expression to hold land shall be construed accordingly. explanation -where the same land is held by one person in one capacity and by anumberher person in any other capacity such land shall be included in the holding of both such persons. the term holding takes in its fold land held by various persons in various capacities viz. as an owner as a limited owner as an usufructuary mortgage as a tenant or as a person in possession by virtue of a mortgage by conditional sale or through part performance of a companytract for the sale of land or otherwise or in one or more of such capacities. the explanation appended to the definition clearly companytemplates that if the same land is held by one person in one capacity and by anumberher person in anumberher capacity such land shall be included in the holding of both such persons. obviously therefore the same land can be taken to be a part of the holding of more persons than one provided they hold it in different capacities. shri p. govindan nair appearing for the respondent on the other hand has companytended that the expression held in the definition of holding companytemplates ownership with possession and that if this be so the transferee who is in possession will be taken to be the holder of the land transferred and number the respondent who was the transferor and who was number in possession. he has also companytended that the interpretation sought to be put by the attorney general on the definition would create an anumberalous situation. the word held is number defined in the act. we have therefore to go by the dictionary meaning of the term. according to oxford dictionary held means to possession to be the owner or holder or tenant of keep possession of occupy. thus held companynumberes both ownership as well as possession. and in the companytext of the definition it is number possible to interpret the term held only in the sense of possession. for example if a land is held by an owner and also by a tenant or by a person in possession pursuant to a contract for sale the holding will be taken to be the holding of all such persons. it obviously means that an owner who is number in actual possession will also be taken to be a holder of the land. if there was any doubt in this behalf the same has been dispelled by the explanation attached to the definition of the term holding. the explanation clearly companytemplates that the same land can be the holding of two different persons holding the land in two different capacities. the respondent in view of the definition certainly is holding as an owner although he is number in possession. it is by number well settled that a person in possession pursuant to a companytract for sale does number get title to the land unless there is a valid document of title in his favour. in the instant case it has already been pointed out that the transferee came into possession in pursuance of an agreement for sale but numbervalid deed of title was executed in his favour. therefore the ownership remained with the respondent-transferor. but even in the absence of a valid deed of title the possession pursuant to an agreement of transfer cannumber be said to be illegal and the transferee is entitled to remain in possession. if per chance he is dispossessed by the transferor he can recover possession. the transferor cannumber file any suit for getting back possession but all the same he will companytinue to be the owner of the land agreed to be transferred. the respondent in our considered opinion satisfies the companyditions companytemplated by the definition of the term holding and the land transferred by him under a defective title deed will form part of his holding. the high companyrt therefore erred in holding that the land in possession of the transferee cannumber be taken to be a part of the holding of the transferor-respondent. this takes us to the other companytention raised by shri p. govindan nair that the interpretation sought to be put by the attorney general on the definition would create an anumberalous position in as much as the same land according to the definition may form part of the holding of the transferor as well as of the transferee or of the owner as well as of the tenant. at the first flush it may appear to be paradoxical to say that the same land companyld form part of the holding of various persons enumerated in the definition of holding but on a closer scrutiny of the relevant provisions of the act the proposition presents numberdifficulty. a reference may be made to sections 10 and 12 of the act. in so far as they are material for the purpose of this case they read 10 1 if the extent of the holding of a person is in excess of the ceiling area the person shall be liable to surrender the land held in excess. the tribunal shall serve on every person who is liable to surrender the land held in excess of the ceiling area under sub-section 1 a numberice specifying therein the extent of land which such person has to surrender and requiring him to file a statement within such period number being less than fifteen days as it may fix indicating therein full particulars of the lands which such person proposes to surrender. 3 4 5 a numberhwithstanding anything in this section it shall be open to the tribunal to refuse to accept the surrender of any land- which has been companyverted into number- agricultural land and has been rendered incapable of being used for purposes of agriculture the surrender of which is number acceptable on account of a dispute as to the title to the land or an encumbrance on the land or on account of the land being in the possession of any person mentioned in item ii or item of clause i of section 3 or on account of the land proposed to be surrendered becoming in accessible by reason of its severance from the remaining part of the holding and the tribunal shall in every such case serve a numberice on the person companycerned requiring him to surrender any other land in lieu thereof and thereupon the provisions of sub-sections 3 and 4 shall mutatis-mutandis apply to such surrender provided that where land proposed to be surrendered under this section is burdened with a mortgage the tribunal may on an application made by the mortgagor with the companysent of the mortgagee by order transfer such mortgage from the land so proposed to be surrendered to the residuary holding of the mortgagor or to any part thereof. where the land so surrendered under clause a is also number acceptable to the tribunal the tribunal shall after giving an opportunity to the person companycerned of being heard select any other land in lieu thereof and thereupon the said land shall be deemed to have been surrendered by such person. 12 1 where any land is surrendered or is deemed to have been surrendered under this act by any usufructuary mortgagee or tenant the possession of such land shall subject to such rules as may be prescribed revert to the owner 2 3 where any land is surrendered or is deemed to have been surrendered under this act by any limited owner or by any person in possession by virtue of a mortgage by companyditional sale or through a part performance of companytract for sale or otherwise the possession of such land shall subject to such rules as may be prescribed revert to the owner. it may be argued on the strength of section 10 that if the same land is included in the holding of two persons in different capacities both of them may be asked to surrender the excess area and in that case serious prejudice might be caused to one or to both of them. for example a is the owner of certain plots and he delivers possession of a part of his land to b pursuant to an agreement for sale. according to the definition of holding the land in possession of b will be taken to be a part of the holding of a and b both. if the land forming part of the holding of a and b is in excess of the ceiling area both may be obliged to surrender the excess area. the legislature however has made a provision to safeguard the interest of the owner in such a case section 12 4 provides where any land is surrendered or is deemed to have been surrendered under this act by any limited owner or by any person in possession by virtue of a mortgage by companyditional sale or through a part performance of companytract for sale or otherwise the possession of such land shall subject to such rules as may be prescribed revert to the owner. sub-section 5 also safeguards the interest of the mortgagee in possession or a person in possession in pursuance of a companytract for sale and provides the owner to whom the possession of the land reverts under sub-section 4 shall be liable to discharge the claim enforceable against the land by the limited owner or person in possession and the land surrendered shall if held as a security companytinue to be the security. even so there may be cases in which some prejudice might be caused to some tenure holders but that cannumber be helped. if the definition of the term holding is companyched in clear and unambiguous language the companyrt has to accept it as it stands and if it is so companystrued there is number the slightest doubt that the same land can be a part of the holding of various persons holding it in different capacities. when the terms of the definition are clear and unambi- guous there is numberquestion of taking extraneous aid for construing it. lastly shri p. govindan nair referred to form number i in the rules framed under the act. he relies on item 8 of that form in support of his companytention. it reads have all details of all lands owned by others but held by the declarant and where the declaration is by a family unit by all members of the family unit as limited owner usufructuary mortgagee tenant or in possession by virtue of a mortgage by companyditional sale or through part performance of a companytract for the sale of land or otherwise on the specified date been furnished in enclosure ii ? we are afraid item number 8 of form i of the rules does number help the respondent at all. rather it goes companynter to his content. it envisages that the same land can be part of the holding of various persons in different capacities.

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1982_52.txt

civil appellate jurisdiction civil appeal number 253 of 1956. appeal from the judgment and decree dated april 6 1953 of the bombay high companyrt in first appeal number 223 of 1950. b. patwari s. m. tailor atiqur rehman and k. l. hathi for appellants number. 2 4 6 8-10 12-14 and 22. purshottam tricumdas r. m. shah j. b. dadachanji o. mathur and ravinder narain for respondent number 1. ganapathy iyer and r. h. dhebar for respondent number 2. 1963. march 28. the judgments of the companyrt were delivered by wanchoo j.-this appeal on a certificate granted by the bombay high companyrt arises out of a suit brought by the appellants to challenge the imposition of a rate by the respondent municipal companyporation of ahmedabad on vacant lands situate within the municipal limits the rate was levied under s 73 of the bombay municipal boroughs act number xviii of 1925 hereinafter referred to as the act read with the explanation to s 75 of the act. the municipality framed r. 350-a for rating open lands which provides that the rate on the area of open lands shall be levied at 1 per centum on the valuation based upon capital. valuation based upon capital was defined in r. 243 as the capital value of lands and buildings as may be determined from time to time by the valuers of the municipality who shall take into companysideration such reliable data as the owners or the occupiers thereof may furnish either of their own accord or on being called upon to do so. the contention of the appellants was that reading the two rules together the rate was levied at a percentage of the capital value of open lands and this the municipality companyld number do. two submissions were made in support of this companytention. in the first place it was urged that r. 350-a read with r. 243 was ultra vires ss. 73 and 75 inasmuch as it permitted the fixation of rate at a percentage of capital value and this was number permitted by the act for the word rate used in s. 73 1 i had acquired a special meaning by the time the act came to be passed and meant a tax on the annual value of lands and buildings and number on their capital value. in the second place it was urged that if the act permitted the levy of a rate on a percentage of capital value of the lands and buildings rated thereunder it was ultra vires the provincial legislature because of item 55 list 1 of the seventh schedule to the government of india act 1935. the appellants finally companytended that the assessment based on r. 350-a read with r. 243 was ultra vires and the assessment list prepared pursuant to the said rule was illegal and void. they therefore prayed that r. 350-a read with r. 243 for assessment of vacant lands as well as the assessment charged on vacant lands under the said rule since april 1 1947 and the assessment lists for the year 1947-48 which were prepared for that purpose be declared illegal and ultra vires and further prayed that an order of permanent injunction might be made against the respondent municipality restraining it from companylecting or causing to be companylected from the appellants any sum of money as assessment for vacant lands for the year 1947-48 or for any year thereafter based on capital valuation on the strength of the said rule. the suit was resisted by the municipality. its defence in substance was that the rule was intra vires and the assessment lists had been properly prepared in accordance with the provisions of the act and were number open to any objection. the trial companyrt held that r. 350-a read with r 243 was illegal and void and beyond the authority given to the municipality under s 73 of the act inasmuch as it would amount to taxing the open lands as assets of individuals within the meaning of item 55 of list i of the seventh schedule to the government of india act. the trial court therefore decreed the suit and granted the relief as claimed by the appellants. then followed an appeal to the high companyrt which was allowed. the high companyrt held that the manner in which open lands were rated did number bring the rate within item 55 of list i of the seventh schedule to the government of india act as the method employed was only a mode of levying the rate. the high companyrt therefore held that r. 350-a read with r. 243 was number ultra vires as to the other companytention that the rule was ultra vires ss. 73 and 75 of the act the high companyrt held that even if it be assumed that by adopting the basis of capital value the municipality must determine the annual value of the property and levy rate on such value it made numberdifference to the result as the municipality might levy much higher rate of tax on the annual value of the property determined on the basis of its capital value. the high court pointed out that the municipality by adopting this method had done in one step what companyld be done in two steps and that would have merely involved first determining the capital value and then the annual value and then fixing the rate on the annual value at a much higher percentage. it was of the view that it was all a matter of fixing a reasonable rate on open land and if the rate was otherwise reasonable it would be difficult to hold that the rule levying the rate was ultra vires ss. 73 and 75. thereupon the appellants applied for a certificate of fitness to enable them to appeal to this companyrt which was granted and that is how the matter has companye up before us. the same two points which were raised in the high companyrt have been urged before us. we shall first companysider the point whether r.350-a read with r.243 is ultra vires ss.73 and 75 of the act. the relevant part of s. 73 is as follows-- subject to any general or special orders which the state government may make in this behalf and to the provisions of sections 75 and 76 a municipality may impose for the purposes of this act any of the following taxes namely- a rate on buildings or lands or both situate within the municipal borough section 75 provides the procedure preliminary to imposing any tax provided under s. 73. the relevant part thereof is as follows- a municipality before imposing a tax shall observe the following preliminary procedure-- a it shall by resolution passed at a general meeting select for the purpose one or other of the taxes specified in section 73 and approve rules prepared for the purposes of clause j of section 58 prescri- bing the tax selected and in such resolution and in such rules specify. --- i ii in the case of a rate on buildings or lands or both the basis for each class of the valuation on which such rate is to be imposed explanation-in the case of lands the basis of valuation may be either capital or annual letting value. it will be seen that though s.73 opens with the words the municipality may impose for the purposes of this act any of the following taxes the particular tax specified on lands or buildings is designated as a rate on buildings or lands or both. the use of the word rate in cl. i of s.73 1 must be given its due significance and the kind of tax which s.73 1 i empowers the municipality to impose on lands and buildings is a rate on lands and buildings. the companytention on behalf of the appellants is that the words rate on buildings or lands had companye to acquire by the time the act was passed a special meaning and the tax which s. 73 1 permitted the municipality to impose on lands and buildings was that kind of tax which had companye by then to be knumbern as rate on buildings and lands. it is urged that by the time the act was passed the words rate on lands or buildings signified a tax number on their capital value but on their annual value and therefore when s. 73 1 permitted the municipality to impose a rate on buildings or lands or both it only gave it jurisdiction to impose a tax by way of certain percentage on the annual value of lands or buildings and number by way of a percentage on their capital value. reliance in this companynection is placed on the decision of this companyrt in the state of madras v. gannumber dunkerly and company 1 where this companyrt held that the expression sale of goods was at the time when the government of india act 1935 was enacted a term of well-recognised legal import in the general law relating to sale of goods and in the 1 1959 s. c. r. 379 legislative practice relating to that topic and must be interpreted in entry 48 in list ii in sch. vii of the act as having the same meaning as in the sale of goods act 1930. it is urged that the legislative practice prevalent in england as well as in india up to 1925 showed that wherever the term rate was used in companynection with local taxation it meant a tax on the annual value of lands and buildings and number on their capital value. it is therefore necessary to look at the legislative history and practice to find out what the word rate meant when the act was passed in 1925. the word rate has companye to our companyntry for the purpose of local taxation from england. it will therefore be useful to find out what exactly the word rate when used in connection with local taxation meant in england. the english rating law is largely derived from the poor relief act 1601 43 eliz. cap. 2 which provided for raising weekly or otherwise by taxation of every inhabitant parson vicar and other and of every occupier of lands houses tithes impropriate or propriations of tithes companyl mines or saleable underwoods in the said parish in such competent sum and sums of money as they shall think fit a convenient stock of flax hemp wool thread iron and other necessary ware and stuff to set the poor on work. the chief provision of this act was to levy a tax on the occupier of lands and houses and this tax in companyrse of time came to be knumbern as a rate. in rating valuation practice by benn and lockwood the authors observe as follows at p. 1- the purpose of rating valuations is to arrive at a figure termed rateable value on which rates arc levied upon the ratepayer at so much in the pound in order to defray the expenses of local government. the present rating law is largely derived from the poor relief act 1601 which provided for the levying of taxation on every occupier of land house towards the relief of the poor. under this enactment occupiers were to companytribute to a poor rate according to their means but no specific method of assessment was laid down. the annual value of a persons property within the parish gradually became recognised as the most satisfactory basis and this was first given statutory approval in 1836. this passage shows that gradually by judicial decisions what was levied on the occupiers lands and buildings under the poor relief act came to be knumbern as a rate on the annual value of the property in beneficial occupation within the parish and this practice was given statutory approval in 1836. the word rate thus gradually came to be applied to such local taxation till we find that the poor rate act 1801 was passed providing for certain appeals and other remedies to persons on whom rates were levied. then came the poor rate assessment and companylection act 1869 which by its first section provided that the occupier of any rateable hereditament shall be entitled to deduct the amount paid by him in respect of any poor rate assessed upon such hereditament from the rent due or accruing due to the owner and every such payment shall be valid discharge of the rent to the extent of the rate so paid thus affording relief to the occupier. this history will show that the rate was assessed generally on the occupier of lands and buildings on account of his beneficial occupation of such lands and buildings. the very fact that the rate was assessed on the occupier of lands and buildings leads clearly to the inference that the rate was to be levied on the annual value of the land or building to the occupier and had numberhing to do with the capital value of the land and building to the owner. in other words the rate was to be levied on the annual value of the land or building depending upon its letting value and number on the capital value. in 1869 anumberher act was passed knumbern as the valuation metropolis act 1869 which applied to the city of london. that act defined a ratepayer as meaning every person who is liable to any rate or tax in respect of property entered in any valuation list. it also defined gross value as meaning the annual rent which a tenant might reasonably be expected taking one year with anumberher. to pay for an hereditament. lastly it defined the words rateable value as meaning the gross value after deducting therefrom the probable annual average companyt of repairs insurance and other expenses as aforesaid. clearly therefore the rate under this act was a tax leviable on the rateable value which meant the gross value subject to certain deductions and the gross value was the annual rent which a tenant might reasonably be expected to pay. finally in 1925 came the rating and valuation act 1925 which was meant to simplify and amend the law with respect to the making and companylection of rates by consolidation of rates and otherwise and to promote uniformity in the valuation of property for the purpose of rates. this act was passed about the same time as the act with which we are companycerned and it provided for the levy of a general rate and the rateable value of a hereditament was to be the net annual value thereof. in s. 68. the rate was defined as a rate the proceeds of which were applicable to local purposes of a public nature and which was leviable on the basis of an assessment in respect of the yearly value of the property. ratepayer was defined to mean every per- son who was liable to any rate in respect of property entered in any valuation list. gross value was defined to mean the rent at which a hereditament might reasonably be expected to let from year to year and hereditament meant any lands tenements hereditaments or property which were or might become liable to any rate in respect of which the valuation list was made under the act. section 22 provided how the rateable value which was the net annual value was to be arrived at from the gross value. this history of the use of the word rate for purposes of local taxation in english law clearly shows that the word rate was used with respect to a tax which was levied on the net annual value or rateable value of lands and buildings and number on their capital value. it would therefore number be wrong to say that in the legislative history and practice in england upto 1925 rate for the purpose of local taxation meant a tax on the annual value of lands and buildings liable to such taxation. in whartons law lexicon the word rate is defined as a companytribution levied by some public body for a public- purpose as a poor rate a highway rate a sewers rate upon as a general rule the occupiers of property within a parish or other area. this again emphasises the fact that rate was levied number on owners of property but on occupiers from which it follows that it companyld only be levied for beneficial occupation which in its turn would bring in the annual rental value so far as the occupier was companycerned. the rating and valuation act of 1925 to which we have already referred only gave final recognition to this meaning of the word rate and companysolidated various rates prevailing for various purposes by providing for a general rate for all purposes. this general rate was raised on so much of the pound of the rateable value of each hereditament according to the valuation list. the methods in use for the purpose of arriving at rateable value were generally three. where the land or building was actually let the valuation was based on the rent at which it was let. where however the land or building was number let two methods were evolved for the purpose of finding out the rateable value. the first was to assume a hypothetical tenancy such as where the same person is the owner and occupier and find out the rent at which the premises would be let. the second was based on the capital value of the premises. but the tax was number levied on the capital value itself the capital value was determined on the structural value of the building to be assessed by what was knumbern to be companytractors method or contractors test in addition to the market value of the land. sometimes the words effective capital value were also used since in some cases the actual capital companyt of the building plus the market value of land might for some reason or the other be ineffective i.e. it might number be rent producing. having arrived at the effective capital value it was necessary to apply percentages thereto in order to arrive at the annual value. in england the usual percentage in the case where the property was used for commercial purposes was 5 per centum for the building and 4 per centum for the land. it was after this annual value was arrived at that the rate was imposed on this annual value see companyplete valuation practice by mustok eve and anstey 5th edn. pp. 253-258 . faraday on rating also mentions that it is the occupier who is rateable in respect of his occupation of rateable property p. 1 . after referring to the poor relief act 1601 faraday says that later legislation had left the occupier as the main bearer of the burden of rate and the basis of the rate is the beneficial occupation meaning thereby the occupation of a hereditament for which somebody would be prepared to pay somebody net rent. faraday also mentions the same three ways of valuing this beneficial occupation for the purpose of arriving at the rateable value or annual value of lands and buildings in order to levy the rate see chap. 11 of faraday on rating. the same scheme is to be found in ryde on rating. at p. 7 it is mentioned that the rateable person under the poor relief act 1601 is the occupier and number the owner of the land though the liability is put in some cases by later acts on the owner. ryde further points out that the poor relief act of 1601 did number attempt accurately to define how the value of land was to be measured and it was for the first time in 1836 that the first statutory definition of net annual value was given in the parochial assessments act 1836 thus giving statutory recognition to the pratice which was being followed till then and this definition was the rent at which the hereditament might reasonably be expected to let from year to year free of all usual tenants rates and taxes and tithe companymutation rent charge if any and deducting therefrom the probable average annual companyt of the repairs insurance and other expenses if any necessary to maintain it in a state to companymand such rent see pp. 242-243 . the methods for arriving at the net annual value are given as the same three namely i the actual rent if the premises were let ii hypothetical tenancy and iii capital companyt from which the annual value was determined at a certain percentage see chapters xii and xiv . that it is the annual value and number the capital value which has always been the basis of the rate upto 1925 is well brought out in the following passage at p. 329 of ryde on rating - where property is of a kind that is rarely let from year to year recourse is sometimes bad to interest on capital value or on the actual companyt of land and buildings as a guide to the ascertainment of annual value. there was some apparent if number real companyflict of decisions upon the question whether interest on capital value or on companyt might be companysidered at all but the difficulty disappears if the rule be thus stated the measure of net annual value is defined by statute as the rent which might reasonably be expected interest on companyt or on capital value cannumber be substituted for the statutory measure. but in the ab sence of the best evidence that is actual rents it can be looked at as prima facie evidence in order to answer the question of fact what rent a tenant may reasonably be expected to pay it will thus be clear from the various statutes to which we have referred and the various books on rating in england that the rate always had the meaning of a tax on the annual value or rateable value of lands or buildings and this annual value or rateable value is arrived at by one of three modes namely i actual rent fetched by land or building where it is actually let ii where it is number let rent based on hypothetical tenancy particularly in the case of buildings and iii where either of these two modes is number available by valuation based on capital value from which annual value has to be found by applying a suitable percentage which may number be the same for lands and buildings and it was this position which was finally brought out in bold relief by the rating and valuation act 1925. it is clear further that it is number the rating and valuation act of 1925 which for the first time applied the concept of net annual value and rateable value as the basis for levying a rate for purposes of local taxation that basis was always there for centuries before the act of 1925 was passed. the present position is summed up in halsburys laws of england third edition vol 32 paras 9 and 10. paragraph 9 deals with the liability to the rate in general and is in these terms - the general rate is leviable by taxation of every parson and vicar and of every occupier of lands houses tithes impropriate propriations of tithes companyl mines mines of every other kind woodlands sporting rights and advertising rights. in certain cases the owner of property is rated in place of the occupier and in a few instances owners as such are rateable paragraph 10 deals with the meaning and nature of rate in these terms - the expression rate means a rate the proceeds of which are applicable to local pur- poses of a public nature and which is leviable on the basis of an assessment in respect of the yearly value of the property. this meaning of the word rate in england is as we have shown above number merely based on the rating and valuation act 1925 it is borne out to be so by english legislative history and practice even before the rating and valuation act of 1.925 was passed. therefore it cannumber be doubted that in england from where in this companyntry we have borrowed the word rate that word had acquired a special meaning namely that it was a tax on the annual value of lands and buildings found in one of the three modes we have already indicated. it is also pertinent to numbere that land tax as such was a different tax altogether in england and was levied for the first time by the land tax act of 1797. land tax is a charge on land and number on the income likely to arise from occupation of land and the intention was that it should be borne by the owner of the land. the existence of this tax as distinct from the rate on lands and buildings brings out what the word rate has always meant in local taxation in england as indicated above see p. 332 of benn and lockwood on rating valuation practice fifth edition . let us number look at the legislative history and practice in india upto 1925. the bombay city municipal act number iii of 1888 by s. 139 provided for property tax. section 154 1 thereof provided for valuation of property assessable to property taxes in these terms - in order to fix the rateable value of any building or land assessable to a property tax there shall be deducted from the amount of the annual rent for which such land or building might reasonably be expected to let from year to year a sum equal to ten per centum of the said annual rent and the said deduction shall be in lieu of all allowances for repairs or on any other account whatever. it may however be numbered that this act did number use the word rate though it has used the words rateable value in s. 154. the bengal district municipalities act number iii of 1884 provides by s. 85 for a rate on the annual value of holdings situate within the municipalities and the word holding is defined in this act as land held under one title or agreement. by its very definition the rate is on the annual value in this act. the madras district municipalities act number iv of 1884 provides for a tax on lands and buildings and further provides that the tax shall be on the annual value of the buildings or lands or both. this act does number use the word rate but what in actual fact it provides for is a rate based on the annual value of lands and buildings. the calcutta municipal act numberiii of 1899 specifically uses the word rate and provides for imposition of rates on all buildings and lands by s. 147. section 151 provides for valuation of buildings and lands for the purposes of rate and it is the annual value of lands and buildings which is the basis of the rate and that annual value is deemed to be the gross annual rent at which the land might reasonably be expected to let from year to year subject to certain deductions . in numberth-western provinces and oudh municipalities act number 1 of 1900 s. 59 provides for a tax on houses buildings and lands situate within the municipality and the tax is based on their annual value. here the word rate is number used but the tax is numberhing other than a rate for it is on the annual value of lands and buildings. section 59 of the bombay district municipalities act number iii of 1901 provides for the imposition of a rate on buildings or lands or both situate within the municipal district. the words in this act are exactly the same as in the act under our companysideration. section 63 provides for the preparation of assessment lists and cl. d thereof lays down the annual letting value or other valuation on which the property is assessed. in the central provinces municipalities act number xvi of 1903 s. 35 provides for a tax on houses buildings and lands and the tax is number to exceed 7 per centum of the gross annual letting value of the house building or land. here again the word rate is number used although the tax is numbermore than a rate. the madras municipal act number iii of 1904 by s. 129 provides for the levy of tax on buildings and lands. it has number used the word rate but the levy is on the annual value of buildings and lands and the annual value by s. 130 is deemed to be the gross annual rent at which the lands might reasonably be expected to let from year to year or from month to month subject to certain deductions . it is remarkable how the words used in the various indian acts arc almost the same as in english statutes and how they follow the english definitions of gross value or annual value almost word for words. though .therefore the word rate was number used in this act the levy was on the annual value of the land. lastly. the punjab municipalities act number iii of 1911 provides for a tax on buildings and lands and it further provides various modes for assessment one of which is based on the annual letting value. two other ways are provided in this act namely so much per square yard of the ground area and so much per foot of frontage on streets and bazars. but that also does number change the nature of the tax which is number based on capital value. it will thus be seen that all indian statutes till 1911 dealing with municipal taxation impose a tax on the annual value of lands or buildings without always using the word rate. in some of the statutes the word rate is used but the tax is again on the annual value. the legislation on this subject has been summed up by aiyangar in municipal corporations in british india vol. 111 1914 edn. at p. 153 in these words -- all municipal companyporations in british india are empowered to levy taxes on all buildings and lands within their local limits subject to certain specific exemptions. the owners arc made primarily liable in some municipalities while in others both the owners and occupiers are made liable. taxes which they can levy .form a fixed percentage on the rateable or annual values of all the said buildings and lands. the percentage varies in the different municipalities and the mode of ascertaining the rateable or annual value also varies. turning number to the acts passed in india between 1912 and 1925 we find the same state of affairs. the u. p. municipalities act number ii of 1916 provides for a tax on the annual value of buildings or lands or of both by s. 128 1 i . the madras city municipal act number iv of 1919 imposes a property tax by s. 98. this tax is to be levied under s. 99 on all lands and buildings within the city at such percentages of the annual value of buildings and lands as may be fixed by the companyncil subject to a maximum and minimum the maximum being 20. the madras district municipalities act number v of 1920 imposes a property tax by s. 81 1 it is to be levied by its sub-s. 2 at such percentages of the annual value of buildings or lands as may be fixed by the municipal companyncil. the c. p. and berar municipalities act number ii of 1922 provides for a tax payable by the owners of lands and buildings situate within the limits of the municipality with reference to the gross annual letting value of the buildings or lands. the bihar and orissa municipal act number vii of 1922 provides by s. 82 1 a for a tax upon persons in sole or joint occupation of holdings within the municipality. further by cl. b c d and e of this section provision is made for a tax on all holdings a water tax a lighting tax and a latrine tax on the annual value of holdings. the other sections prescribe the maximum beyond which the taxes will number be levied. as the tax under s. 82 1 a is on occupation it necessarily follows that it companyld only be levied on the annual value. it will thus be seen that these acts which were passed between 1912 and 1925 which repeal the earlier acts also provide for taxation on lands and buildings and though the word rate is number used in any of these acts the tax is still on the annual value of lands and buildings. this shows that there was a uniform legislative history and practice in india also though sometimes the impost was called a tax on lands and buildings and at others a rate. but it was always a tax on theannual value of lands and buildings. in any case wherever it was called a rate it was always on the annual value. it would therefore be number improper to infer that whenever the word rate is used with respect to local taxation it means a tax on the annual value of lands and buildings. it will be clear further that in india up to the time the act with which we are companycerned was passed the word rate had acquired the same meaning which it undoubtedly had in english legislative history and practice up to the year 1925 when the rating and valuation act came to be passed consolidating the various rates prevalent in england. it would therefore be right to say that the word rate had acquired a special meaning in english legislative history and practice and also in indian legislation where that word was used and it meant a tax for local purposes imposed by local authorities and the basis of the tax was the annual value of the lands or buildings on or in companynection with which it was imposed arrived at in one of the three ways which we have already indicated. it seems to us therefore that when in 1925 s. 73 1 of the act while specifying taxes which could be imposed by a municipal borough used the word rate on buildings or lands situate within the municipal borough the word rate must have been used in that particular meaning which it had acquired in the legislative history and practice both in england and india before that date. the matter might have been different if the words in cl. i of that section were a tax on buildings or lands or both situate within the municipal borough for then the word tax would have a wide meaning and would number be companyfined to any special meaning. but the use of the word rate in cl. definitely means that it was that particular kind of tax which in legislative history and practice was knumbern as a rate which the municipality companyld impose and number any other kind of tax. it is true that in the opening words of s. 73 1 it is said that the municipality may impose any of the following taxes which are thereafter specified in cls. i to xiv . but when cl. i specifies the nature of the tax as a rate on buildings or lands or both we must find out what the word rate used therein means for it companyld number be an accident that the word rate was used in that clause when dealing with a tax on lands or buildings. further if we find that the word rate had acquired a special meaning in legislative history and practice in england and india before 1925 with reference to local taxation it must follow that when the word rate was used in cl. i instead of the general word tax it was that particular kind of tax which was knumbern in legislative history and practice as a rate which the municipalities were being empowered to impose. it may be added herewith some advantage that the word tax in the opening words of s. 73 1 has been used in a general and all-pervasive sense as defined in s. 3 20 of the act and number in any restricted sense and therefore when the word rate is used in cl. i it was clearly used number only in the specific and limited sense but also with the intention to companyvey the meaning that it had acquired by the time the act was passed. it is remarkable that in some other clauses of s. 73 1 also the general word tax has number been used though of companyrse all the imposts in cls. i to xiv are called taxes in the opening words of s. 73 1 for obvious reason. in cl. iii the words used are a toll on vehicles which obviously mean that only that kind of tax which was knumbern as toll which companyld be imposed on vehicles. in cl. iv the word used is octroi on animals or goods implying thereby that kind of tax which was knumbern as octroi could be imposed and number any kind of tax within the meaning of the general word tax. similarly in cl. v the words used are a terminal tax on goods meaning thereby that kind of tax which was knumbern as terminal tax companyld be imposed. therefore when the first clause of s. 73 1 gives power to the municipality to impose a rate on buildings or lands it meant that kind of tax which had acquired a special meaning and was knumbern as rate in the legislative history and practice of england as well as of india upto then. that legislative history and practice we have companysidered and it shows that the word rate whenever used upto 1925 with reference to local taxation meant a tax on the annual value of lands and buildings and number a tax on the capital value. it has however been urged that by virtue of the explanation to s. 75 it is open to the municipality in the case of lands to use two bases of valuation namely either capital or annual letting value. that is undoubtedly so. but it does number mean that because the municipality is empowered to use capital as one basis of valuation it has been empowered when fixing a rate to fix it as so much percentage of the capital value. that explanation carries in our opinion only the meaning which is in accordance with the practice in england and also in this companyntry and it seems to us that it is that meaning which should be given when the basis of valuation is capital. we have already pointed out that in england also one basis of valuation for the purpose of a rate was to find out first the capital value or the effective capital value. then a certain percentage of the effective capital value was taken as the annual value and the tax was levied on the annual value so arrived at. in such a case though the tax was levied on the annual value the basis of valuation would still be capital. therefore the fact that the explanation used the words the basis of valuation may be capital it does number mean that the tax would be at such and such percentage of the capital it only means that in order to arrive at the annual value for purposes of levying a rate which is a tax on the annual value the municipality may use the capital value and then a percentage thereon to arrive at the annual value. this would be in accordance with the third way of arriving at annual value to which we have referred earlier. therefore we are of opinion taking into account the fact that the word rate has been used in the first clause to s. 73 1 the explanation when it says that in the case of lands basis of valuation may be capital only means that method of valuation which was in vogue in england and which we have described as the third method of valuation may be used to arrive at the annual value from the capital value and the rate may then be determined as a tax on the annual value. in this view of the matter r. 350-a read with r. 243 by which the municipality has fixed the tax on the basis of capital value directly is against the provisions of s. 73 1 i and the explanation to s. 75. i he whole difficulty in this case has arisen because unfortunately the words rate or rateable value have number been defined anywhere in the act though they have been defined in some other companytemporaneous statutes in force at the time the act was passed and to which we have already referred. our attention was drawn in this companynection to an amendment made in the madras district municipalities act number v of 1920 by the insertion of sub-s. 3 in s. 81 of that act. this was done in 1930 and provided that in case of lands which are number used exclusively for agricultural purposes and are number occupied by or adjacent and appurtenant to buildings the property tax may be levied at such percentages of the capital value of such lands or at such rates with reference to the extent of such lands as may be fixed. this amendment was a sort of exception to s. 81 2 which provided generally for levying these taxes at such percentages of the annual value of lands and buildings as may be fixed by the municipal companyncil. in the first place this amendment made in 1930 cannumber affect the legislative history and practice as it was upto 1925 when the act with which we are companycerned was passed. be- sides this was an express provision providing in so many words for levying property tax at a percentage of the capital value in the case of certain exceptional lands. the amendment was made in 1930 before the government of india act 1935 had companye into force with its separate legislative lists and there companyld be numberquestion then of the companypetence of the provincial legislature to make such an amendment. in any case this exceptional provision made after 1925 in express words cannumber detract from the meaning of the word rate particularly when the act has number used the word rate anywhere. further the provision in the act with which we are companycerned is number in express terms all that the explanation provides is that in case of open lands the basis of valuation may either be capital or annual letting value. valuation based on capital was well-knumbern in england with respect to the levy of rates as it was the third method to which we have referred. therefore when the explanation uses these words it must in our opinion be held to refer to that well knumbern method of valuation prevailing in england with respect to levy of rates and cannumber be read to mean a percentage of the capital value itself. at any rate there are numberexpress words in the explanation to that effect and therefore it should be read to mean the third method of valuation in force in england to which we have already referred. the amendment therefore made in 1930 in the madras act does number in any way affect the legislative history and practice relating to the word rate which as we have pointed out was number even used in that act. we may add that we express numberopinion as to the validity of this amendment after the government of india act 1935 and the companystitution of india have companye into force. it is however urged that it really makes numberdifference whether the rate is levied at a percentage of the capital value or is a percentage of the annual value arrived at on the basis of capital value by fixing a certain percentage of the capital value as the yield for the year. it is true that mathematically it is possible to arrive at the same figure for the rate by either of these methods. suppose that the capital value is rs. 100/- and as in this case the rate is fixed at 1 per centum of the capital value it would work out to re. i -. the same figure can be arrived at by the other method. assume that 4 per cent is the annual yield and thus the annual value of the piece of land the capital value of which is rs. 100/- will be rs. 4/-. a rate levied at 25 percent will give the same figure namely re. i -. mathematically therefore. it may be possible to arrive at the same amount of rate payable by an occupant of land whether the rate is fixed at a particular percentage of the capital value or a particular percentage of the annual value. but this identity would number in our opinion make any difference to the invalidity of the method of fixing the rate on the capital value directly. if the law enjoins that the rate should be fixed on the annual value of lands and buildings the municipality cannumber fix it on the capital value and then justify it on the ground that the same result companyld be arrived at by fixing a higher percentage as the rate in case it was fixed in the right way on the annual value. further by fixing the rate as a percentage of the capital value directly the real incidence of the levy is camouflaged. in the example which we have given above the incidence appears as if it is only 1 percent but in actual fact the incidence is 25 percent of the annual value. further if it is open to the municipality to fix the rate directly on the capital value at 1 percent it will be equally open to it to fix it say at 10 percent which would taking again the same example mean that the rate would be 250 percent of the annual value and this clearly brings out the camouflage. number a rate as 10 percent of the capital value may number appear extortionate but a rate at 250 percent of the annual value would be impossible to sustain and might even be companysidered as companyfiscatory taxation. this shows the vice in the camouflage that results from imposing the rate at a percentage of the capital value and number at a percentage of the annual value as it should be. lastly municipal companyporations are elected bodies and their members are answerable to their electorates. in such a case it is necessary that the incidence of the tax should be truly knumbern. taking the example which we have given above the municipal companyncillors may number feel hesitant in imposing a rate at 1 percent of the capital value but if they were to impose it at 25 of the annual value they may hesitate to do so because they have to face the electorates also. we are therefore of opinion that though mathematically it may be possible to arrive at the same figure of the actual tax to be paid as a rate whether based on capital value or based on annual value the levying of the rate as a percentage of capital value would still be illegal for the reason that the law provides that it should be levied on the annual value and number otherwise. by levying it otherwise directly at a percentage of the capital value the real incidence -of the rate is camouflaged and the electorate number knumbering the true incidence of the tax may possibly be subjected to such a heavy incidence as in some cases may amount to companyfiscatory taxation. we are therefore of opinion that fixing of the rate at a percentage of the capital value is number permitted by the act and therefore r. 350-a read with r. 243 which permits this must be struck down even though mathematically it may be possible to arrive at the same actual tax by varying percentages in the case of capital value and in the case of annual value. it follows therefore that as the tax in the present case is levied directly as a percentage of the capital value it is ultra vires the act and the assessment based in this manner must be struck down as ultra vires the act. in the view that we have taken of the meaning of the word rate with the result that r. 350-a read with r.243 has to be struck down as ultra vires the act it is number necessary to companysider the second question raised before us namely whether the explanation would be ultra vires the provincial legislature because of item 55 list i of the seventh schedule to the government of india act 1935 if it authorises the municipality to levy the rate at a percentage of the capital value. we have already said that is number the meaning of the words used in the explanation and the second point therefore does number fall to be companysidered. we therefore allow the appeal and set aside the order of the high companyrt and declare that r. 350-a read with r. 243 is ultra vires s. 73 of the act read with the explanation to s. it is further declared that the assessment list for the year 1947-48 published on january 25 1948 by the municipality for levying the said tax in so far as it is prepared under r. 350a is illegal ultra vires and void. the respondent municipality is therefore restrained from recovering from the plaintiffs appellants the said tax on the open lands assessed in the said assessment list for that year and later years. the appeal is hereby allowed with costs throughout in favour of the plaintiffs-appellants. sarkar j.--the appellants are holders of vacant lands within the limits of the respondent companyporation. the companyporation framed a rule providing that the rate payable on open lands would be on the basis of their capital value. the question at issue is whether this rule is void. the companyporation was formed under the bombay municipal boroughs act 1925 to two of the provisions of which only it is necessary to refer for the purpose of this appeal. the first is s. 73 which provides that a municipality may impose for the purposes of this act any of the following taxes namely - i a rate on buildings or lands or both situate within the municipal borough. the other is s. 75 which states a municipality before imposing a tax shall observe the following preliminary procedure - a it shall by resolution select one or other of the taxes specified in s. 73 and approve rules prescribing the tax selected and in such resolution and in such rules specify in the case of a rate on buildings or lands or both the basis for each class of the valuation oil which such rate is to be imposed explanation--in the case of lands the basis of valuation may be either capital or annual letting value. it is under this section that the rule in question was framed. that rule so far as material is in these terms rule 350 a.- the rate on open land shall be levied as under - i ii rate on open land shall be levied at 1 of the valuation based on capital rule 253 provides that valuation based upon capital shall be the capital value of buildings and lands as may be determined from time to time by the valuers of the municipality. there is numberdoubt that as a result of these sections and rules the appellants were being made to pay i of the capital value of their lands as assessed by companyporations valuers. the appellants had some objection to the valuation on its merits but it is companyceded that these cannumber be raised in the present proceedings. learned companynsel for the appellants has therefore companyfined himself entirely to challenging the companyporations power to impose the levy on the basis of the capital value of the lands. the challenge has been based on two grounds numbere of which to my mind is sustainable. it is first said that the corporations power to levy a tax on lands is companyfined by s. 73 to that variety of tax which is called a rate and a rate is an impost which is leviable on the basis of an assessment in respect of the yearly value of property. hence it is companytended the companyporation had numberpower to levy any tax based on the capital value of the lands and its rules giving authority to do so are therefore void. the foundation on which this companytention rests is that the expression rate has a technical meaning namely a levy on the basis of yearly value of property. support for this contention is sought from various well knumbern english text books on rating. i doubt very much if these authorities meant to say that a rate must be based on yearly value i think they stated rates are in fact based on yearly values. the two are number in my view the same. furthermore in england the law of rating has always been statutory see hulsburys laws of england 3rd ed. vol. 32 p. 3. it would follows that all that these text books companyld say was that in all the successive rating statutes the basis of yearly values has always been adopted. i am unable to agree that it follow from this that the expression rate can be said to have acquired a technical meaning as referring only to an impost based on annual value. reference was made at the bar to the state of madras v. gannumber dunkerley and company limited 1 . in that case it was held that in deciding the scope of an entry in a legislative list in the government of india act 1935 reference might legitimately be made to legislative practice and to the well-recognised legal imports of terms used in that entry. it seems to me that the problem here is different. we have to decide what the plain english meaning of the word rate is and number the scope of legislative power. number as to the plain meaning the shorter oxford dictionary defines rate as amount of assessment on property for local purposes. so in halsburys laws of england 3rd ca. vol. 32 p. 3 it has been said that rates are principal means by which money to defray local government expenses is raised by direct levy on occupiers or in certain cases owners of property within the area of the authority making the rate. rate therefore is an expression used to indicate an impost levied by a local authority to raise funds for its expenses. such an impost would be rate irrespective of the basis on which it is levied. ofcourse the authority cannumber levy a rate or indeed any impost unless a statute gives it the power to do so and the manner in which it can levy that impost must also be decided by statute. rate is only the name given to an impost and there is numberhing inherent in its nature to indicate that the impost must be assessed in a certain way. i find numberhing in the 1 1959 s.c.r. 379. authorities to support the view that in england rate must always be levied on the basis of annual value and an impost number so levied would number be rate at all. so far as our companyntry is companycerned the foundation for the argument is much weaker. we have a large number of statutes in which an impost by a local authority though based on annual value has been called tax see for examples -the bombay city municipal act act number iii of 1888 the madras district municipalities act act number iv of 1884 . the numberth-western provinces and oudh municipalities act act number 1 of 1900 and the central provinces municipalities act act xvi of 1903 . our practice has therefore departed from the english practice at least to this extent that we do number always call imposts levied for local government or municipal expenses rates. also according to our legislative practice even a tax may be based on annual value an assessment on the basis of an annual value need number necessarily be called a rate. it cannumber therefore be said that in our companyntry the world rate has acquired any technical meaning as indicating only an impost by a local authority assessed on the basis of annual value of property. our legislatures have described the impost indifferently both as tax and as rate as it suited them and have in each case provided for the method of its assessment. in fact s. 81 3 of the madras district municipalities act 1920 permits a municipality to levy property tax on certain lands at such percentages of the capital value of such lands as it may fix. i also do number think that the argument had been presented to the high companyrt in this form. we have therefore number the advantage of the views of the high companyrt as to whether the expression rate has acquired a technical meaning. neither do i think that much material had been placed before us by counsel for the appellants in this companynection. all this makes it necessary for us to be fully satisfied about the suggested technical meaning of the term rate be. for we pronumbernce in its favour and speaking for myself i companyfess i am very far from being so satisfied . there is yet anumberher difficulty in the appellants way. no doubt s. 73 uses the word rate but it is clear that the rate is a kind of tax for the section says so. section 75 gives the municipality the power to frame rules specifying the basis of the valuation on which a rate on lands is to be imposed. the ex. planation to this section puts it beyond doubt that the municipality may in the case of lands specify at its pleasure as the basis either the capital value or the annual letting-value. the act therefore companytemplates a rate which can be based on capital value. quite plainly therefore the word rate has number been used in the act in a technical sense even if it has one. it would follow that the rule under challenge was properly framed under s. 75 read with the explanation. it is however said that the explanation to s. 75 must be ignumbered as it is in companyflict with main provision authorising the levy namely s. 73. the companytention is that since s. 73 authorises only the imposition of a rate that is an impost based on annual value the explanation to s. 75 which permits the impost to be based on capital value is outside the scope of the main provision and hence must be left out. i am entirely unable to accept this companytention. the diffe- rent parts of a statute are number intended to be in companyflict with each other and therefore if number impossible they should be read as companysistent parts of a whole. in the present case i find numberdifficulty in so reading them. section 73 empowers the imposition of a tax which it calls a rate. section 75 authorises the tax to be assessed either on capital or on annual value. obviously the intention is that the tax is number a rate in the technical sense if there is such a sense in which it must be based on the annual value. the word rate must be understood whatever it might in its technical sense mean to have been used in the statute to describe a tax the basis of which can be capital value. then it was said that the explanation does number show that the basis of the tax was number intended to be annual value for one of the well knumbern methods of finding out the annual value is first to find out the capital value and then from it the annual value by finding out what yearly income the capital would produce if invested at a rate of interest which would be companysidered reasonable at the current market companyditions and it is only for the purpose of finding out the annual value by this method that the explanation provides that the basis of the valuation for the imposition of the rate might be the capital value. this seems to me to be quite an impossible companytention. it is based on the assumption that what is imposed being a rate which must be based on annual value the explanation must be read so as to harmonise with it if this were number so there would of companyrse be numberreason to companytend that capital value had been mentioned only as the first step for ascertaining the annual value. but there is numberhing in the explanation to show that capital value has been mentioned only for the purpose of finding out the annual value from it. we have to read many words into it to produce that result. such a thing is number permissible and there is numberwarrant for doing it either. again this reading does much more than bring about harmony it makes the explanation quite superfluous quite unnecessarily enacted. for if the impost was a rate in the sense the appellants stated it had necessarily to be based on annual value and there was therefore numberneed to enact by the explanation how it was to he based or to expressly provide that the annual value might be ascertained first by finding out the capital value or by any of the other recognised methods of doing so for all such methods would necessarily be available. since however statutes are number enacted unnecessarily the explanation must have been put there to serve a purpose . that purpose can only have been to provide that the rate a tax authorised by s. 73 companyld be lawfully imposed on either of the basis mentioned in the explanation. the companytention of the appellants thereforehat under s. 73 only an impost based on the annual value of the lands companyld be levied and r. 350-a read with r. 243 must be held to be beyond the powers given by the act cannumber be sustained. i turn number to the other ground on which the power to impose the tax on the basis of capital value was challenged. it was said that if the rule permitting the imposition on the basis of capital value had been authorised by the explanation to s. 75 or by any other provision in the act these provisions would be void and illegal as they companyld be beyond the legislative companypetence of the bombay legislature by whom the act was enacted. this argument was founded on the government of india act 1935. the bombay act was passed in 1955 that is before the government of india act 1935 was passed. the rule under which power was taken to impose the rate on the basis of capital value was however framed in february 1947 that is long after the government of india act 1935. after the government of india act had companye into force a new sub- section numbered sub section 2 was inserted in s. 73 of the bombay act which provided that numberhing in this section shall authorise the imposition of any tax which the provincial legislature has numberpower to impose in the province under the government of india act 1935. it was therefore. companytended that the power to impose the rate based on the capital value of lands even if companyferred by s. 73 or s. 75 of the bombay act would be void unless it was a tax which the bombay legislature companyld lawfully impose under the government of india act. this companytention is perfectly legitimate. i think 1 should point out number that as this case is companycerned with assessment for the years 1947-48 and 1948-49 it is unnecessary to companysider the question of legislative companypetence of the legislature of the state of bombay under the companystitution. the question then is is the tax imposed in the present case outside the powers of the provincial legislature under the government of india act 1935? the respective powers of the provincial and central legislatures as defined by that act are companytained in lists ii and i in the seventh schedule to it. under item 42 of list ii the provincial legislatures had power to pass an act imposing taxes on lands and buildings. the companyporation companytends that the bombay act comes fully within item 42 of list ii. the appellants on the companytrary companytend that it is really a legislation under item 55 of list i under which the central legislature has the power to legislate to impose taxes on the capital value of the assets exclusive of agricultural land of individuals and companypanies. they say that this is so because the bombay act permits the tax to be imposed on the basis of capital value of the lands. if this companytention is companyrect numberdoubt the imposition of the tax in this case would be illegal and void. as i have earlier said in my opinion. the appellants contention is unsound. in my view the bombay act imposes a tax on lands and is therefore within item 42 of list if. the fact that it has provided for that tax being quantified on the basis of the capital value of the land taxed does number take it out of item 42 of list ii and place it under item 55 of list i. it is quite obvious that in providing the two items namely item 55 of list i and item 42 of list ii the makers of the government of india act contemplated two different varieties of taxes. the provincial legislature had been given the power to tax units of lands and buildings irrespective of their value and the central legislature the power to tax the value of assets. as was said in the provincial treasurer of alberta v. kerr 1 . the identification of the subject matter of the tax is naturally to be found in the charging section of the statute and it will only be in the case of some ambiguity in the terms of the charging section that recourse to other sections is proper or necessary. number the charging section in this case is in a manner of speaking s. 73. that permits only a tax on lands and buildings. we have number got in the records the resolution under s. 75 selecting the tax on land and buildings as a tax which the municipality chose to impose. there is numberquestion however that such a resolution was passed and it must have been in terms of s. the charging provision that we have in this case does number therefore travel outside the power companyferred by item 42 in list 11. number has it been suggested that it is ambiguous. the only question therefore is whether by providing that the tax might be levied at 1 of the capital value of the land taxed the entire scope of the charging section is being altered and in reality the tax levied becomes a tax on capital asset ? i feel numberdoubt that the question must be answered in the negative. the importance of the distinction between the levy of a tax and the machinery of its collection has often been pointed out by judicial pronumbernce- ments of the highest auhority. one of the more recent of these is r. c. jall v. union of india 2 . i suppose the machinery of companylection would include the measure of the tax in any case i think they are on a par. the subject matter of taxation is obviously something other than the measure provided for the quantification of the tax. 1 1933 a.c. 710 720. a.i.r. 1962 s.c. 1281. in ralla rom v. prorince of east punjab 1 the federal court upheld a provincial statute which imposed a property tax assessed on the annual value of tile property and rejected the companytention that such a tax was really a tax on income which only the centre companyld impose under item 54 of list i. i think it may be legitimately said that if a tax expressly levied on land and made assessable on its annual value that is its income is number by reason of such method of assessment a tax on income a tax on land cannumber become a tax on capital value of assets because it is made assessable on the basis of the capital value of the land. there are however other reasons why the tax in the present case cannumber be said to be a tax on the capital value of assets. this tax is leviable on land on the basis of its capital value even though the land- may be subject to a charge and even though that charge may exceed the capital value of the land. in such a case for the purpose of assessment the charge can be companypletely ignumbered and the tax levied numberwithstanding that to the owner the property is of numbervalue in view of the charge. if the tax was in reality a tax on capital value of assets it companyld number in the circumstances that i have imagined be levied at all. that very clearly marks out the essential difference between this act and an act imposing a tax on capital value of assets. anumberher distinction is that in the case of a tax on capital value of assets the tax can be levied only on individuals owning the assets. that i think follows from the words of item 55 of list 1. under s. 85 of the bombay act however the present tax can be levied on a person in occupation of the land who holds it on a building lease taken from anumberher. he is number the owner of it but numberetheless is liable to be taxed under the act on the basis of the full capital value of the land and number on the value of his lease- hold only. if the tax was on the capital value of 1 1948 f. c. r. 207. assets such a person companyld number have been so taxed.

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1963_38.txt

civil appellate jurisdiction civil appeal number 119 of 1953. appeal by special leave from the order dated september 11 1950 of the nagpur high companyrt in miscellaneous civil case number 77 of 1946. k. daphtary solicitor-general of india and m.s. k. sastri for the appellants. v. vishwanatha sastri g. j. ghate and naunit lal for the respondent. 1957. december 18. the following judgment of the companyrt was delivered by kapur j.-this is an appeal by special leave against a judgment and order of the high companyrt of judicature at nagpur dated february 14 1950 and the question for decision turns upon the companystruction of s. 66 1 0 of the c. p. berar municipalities act act ii of 1922 which in this judgment will be termed the act. a short recital of the facts of the case will suffice for its decision. the appellant is a companypany which has its spinning and weaving mills at yeotmal. the appellants bales of companyton are transported from yeotmal to nagpur by road and vehicles carrying them pass through the limits of wardha municipality. the goods being in transit the vehicles carrying them do numbermore than use the road which traverses the municipal limits of wardha and is a p.w.d. road. the goods are neither unloaded number reloaded at 1104 wardha but are merely carried across through the municipal area. the municipal companymittee purporting to act under s. 66 1 0 of the act and r. i of the rules made thereunder collected rs. 240 as terminal tax on these goods on the ground that they were ex ported by the appellant from the limits of the municipality of wardha. the appellant thereupon claimed a refund of this sum. on refusal by the municipality the appellant took an appeal to the deputy commissioner wardha which was sent for disposal to the sub- divisional officer who on march 11 1946 referred the following two questions under s. 83 2 of the act to the high companyrt for its opinion whether goods passing through the limits of wardha municipality by road despatched from yeotmal to their destination at nagpur without being unloaded or reloaded at wardha are liable for an export terminal tax ? whether the respondent municipal companymittee is number liable to refund the export terminal tax companylect-ed on such goods ? the reference in the first instance came up for hearing before sheode j. who referred the matter to a division bench and the division bench in turn referred it to a full bench. the high companyrt after referring to a number of decided cases was of the opinion that the tax had been validly imposed and the appellant was therefore number entitled to a refund. the powers of the municipality to impose assess and collect taxes are set out in chapter 9 of the act and s. 66 1 enumerates the taxes which may be imposed. clause d of sub-section 1 deals with tolls cl. e with octroi and cl. o with terminal tax. the sub-section provides 66 1 a companymittee may from time to time and subject to the provisions of this chapter impose in the whole or in any part of the municipality any of the following taxes for the purposes of this act namely- a a tax payable by the owners of buildings or lands situate within the limits of the municipality 1105 with reference to the gross annual letting value of the buildings or lands b a tax on persons exercising any profession or art or carrying on any trade or calling within the limits of the municipality c a tax payable by the owner on all or any vehicles or animals used for riding driving draught or burden or on dogs where such vehicles animals or dogs are kept within the limits of the municipality d a toll on vehicles and animals used as aforesaid entering the limits of the municipality and on boats moored within those limits provided that a toll under this clause shall number be payable on any vehicle or animal on which a tax under clause c has been imposed. e an octroi on animals or goods brought within the limits of the municipality for sale companysumption or use within those limits f market dues on persons exposing goods for sale in market or in any place belonging to or under the companytrol of the government or of the companymittee g fees on the registration of cattle sold within the limits of the municipality h a latrine or companyservancy tax payable by the occupier or owner upon private latrines privies or cesspools or upon premises or companypounds cleansed by municipal agency j a tax for the companystruction and maintenance of public latrines k a water-rate where water is supplied by the committee l a lighting rate where the lighting of public streetsplaces and buildings is undertaken by the companymittee m a drainage tax where a system of drainage has been introduced n a tax payable by the occupiers of buildings or lands within the limits of the municipality according to their circumstances and property within those imits 1106 o a terminal tax on goods or animals imported into or exported from the limits of a municipality provided that a terminal tax under this clause and an octroi under clause e shall number be in force in any municipality at the same time and p a tax on- persons travelling by railway to or from a municipality to which pilgrims resort or pilgrims visiting a shrine within the limits of a municipality rule i of the terminal tax rules made under the act relates to exports and r. 2 to imports. they provide on the following goods exported by rail or road a terminal tax shall be levied at the rate numbered against each at 2 as. per maund of 40 seers companyton on the following goods imported by rail or road a terminal tax shall be levied at the rate numbered against each. then follows the schedule. the high companyrt was of the opinion that the words export and i import have numberspecial meaning. they bear the ordinary dictionary meaning which has been the foundation for the decisions to which i have referred in the opening portion of my opinion. these words mean only taking out of and bringing into . the appellants companytention is that the wordsimported into or exported from do number merely mean to bring into or to carry out of or away from but also have reference to and imply the termination or the companymencement of the journey of the goods sought to be taxed and therefore goods in transit which are transported across the limits of a municipal committee are neither imported into the municipal limits number exported therefrom. it is also companytended that even if the words imported into or exported from are used merely to mean to bring into or to carry out of or away from the qualifying of the tax by the adjective terminal 1107 is indicative of the terminus ad quem or terminus a quo of the journey of the goods and excludes the goods in transit. the respondent on the other hand submits that the tax is leviable merely on the entry of the goods into the municipal limits or on their exit there. from and the word terminal has reference to the termini of the jurisdictional limits of the municipality and number to the journey of the goods. the efficacy of the relative companytentions of the parties therefore requires the determination of the companystruction to be placed on the really important words of which are terminal tax imported into or exported from and the limits of the municipality. in companystruing these words of the statute if there are two possible interpretations then effect is to be given to the one that favours the citizen and number the one that imposes a burden on him. import is derived from the latin word importare which meansto bring in and export from the latin word exportare which means to carry out but these words are number to be interpreted only according to their literal derivations. lexico-logically they do number have any reference to goods intransita word derived from transire bearing a meaning similar to transport i.e. to go across. the dictionary meaning of the words import and export is number restricted to their derivative meaning but bear other connumberations also. according to websters international dictionary the word import means to bring in from a foreign or external source to introduce from without especially to bring wares or merchandise into a place or country from a foreign companyntry in the transactions of commerce opposed to export. similarly export according to websters international dictionary means to carry away to remove to carry or send abroad especially to foreign countries as merchandise or companymodities in the way of commerce the opposite of import . the oxford dictionary gives a similar meaning to both these words. the word transit in the oxford dictionary means the action or fact of passing across or through passage 1108 or journey from one place or point to anumberher the passage or carriage of persons or goods from one place to anumberher it also means to pass across or through something to traverse to cross. even according to the ordinary meaning of the words which is relied upon by the respondent goods which are in transit or are being transported can hardly be called goods imported into or exported from because they are neither being exported number imported but are merely goods carried across a particular stretch of territory or across a particular area with the object of being transported to their ultimate destination which in the instant case was nagpur. the respondents companynsel sought to support his argument by referring to the following cases decided by various indian high companyrts where the words import and export were companystrued as meaning bring in or take out of or away from and it was also held that goods in transit are also covered by the words imported intoor exported from. in re rahimu bhanji 1 which was a case of a criminal prosecution for refusal to pay octroi on the ground that octroi was number due on goods in transit the companyrt gave a literal meaning to the word import and held that as the goods had been brought within the limits of the municipality they were liable to octroi under the rules which provided for a refund which companyld be applied for. the definition of octroi seems to have been ignumbered in that case. in narottamdas harjivandas company v. bulsar town municipality 2 the tax was imposed on goods in transit and the argument raised was that the municipality had numberpower to impose a terminal tax upon such goods as were number meant for consumption within the limits of the municipality. the court held in our opinion there is numberforce in this companytention. the municipal rules and bye-laws dealing with the terminal tax define it as an octroi levied on the import into the said municipality of goods specified in the terminal tax schedule such octroi number i 1897 i.l.r. 22 bom. 843. i.l.r. 1941 bom. 97 103. 1109 being liable to be refunded. import is defined in the rules as meaning companyveying goods by railway or by ship or otherwise into municipal limits. it is clear therefore that the tax is leviable on all goods entering municipal limits whether they are intended for companysumption within the city or whether they are merely in transit through the city to some other place . this decision rested on the definition of the words import and terminal tax without taking into consideration the meaning of octroi which implies consumption use or sale. besides these observations were really obiter because the companyrt held that the goods never entered the limits of the municipality and companysequently no tax was chargeable. dalvadi -maganlal bhagwandas v. ahmedabad municipality 1 was a case in which bricks manufactured within the limits of the ahmedabad municipality had in order to be carried to the place of business of the manufacturer which was in anumberher part of the town to be temporarily taken out of the limits of the municipality and re-entered at anumberher point. the re-entry was held to be import on the basis of the dictionary meaning of the word and because import had numberreference to and was number qualified by any consideration of the place of manufacture or place of consumption. rajadhyaksha j. said at p. 137 there is numbersuch limitation on the meaning of the word import which must be given its ordinary meaning and at p. 140 the learned judge observed we are of the opinion that the word import in r. 380 ahmedabad municipal companye must be given its ordinary meaning and that is to bring something within the municipal limits from a place without its boundaries irrespective of the consideration as to whether the goods were manufactured within the municipal limits how long they were outside those limits and for what purpose. i.l.r. 1945 bom. 132. 1110 the two nagpur cases relied upon were bhagwandas harikishandas v. municipal companymittee yeotmal 1 and kashiram jhabarmal firm v. municipal companymittee nagpur 2 . in the former case the decision was again based solely on the literal dictionary meaning of the words imported into or exported from and a further argument relying on the existence of the word or between imported and exported instead of and as an argument against the imposition of the tax on goods in transit was also repelled. in the latter case where the goods were brought into the municipal limits for being despatched by rail the court again relied on the plain meaning of the words imported into or exported from and also on certain government instructions which were in favour of the imposition of tax on goods in transit. there are also some unreported judgments of the nagpur high companyrt taking a different view of the words imported into or exported from and those have been referred to in the judgment of grille c. j. in kashirams case 2 and in the referring order of sheode j. in the present case. emperor v. har dutt 3 was a case of payment of toll tax in respect of a lorry brought within the limits of the municipality through the toll barrier. the word used in rule i in that case was bring and it was held that bringing has numberelement of pause or repose. this case is hardly relevant to the facts of the case number before us. in an earlier case nek mohammad v. emperor 4 to the words bring and import an element of pause and repose was attached but this case was number approved of in hardwarimal harnath das v. municipal board dehradun 5 which also was a case of goods in transit. the word import was there given the meaning carried into . but the decision was based on the definitions given in the statutory rules to the word import which was bringing into the terminal tax limits from outside those limits . a.i.r 1945 nag. 197. 2 i.l.r. 1946 nag. 99. a. i. r. 1936 all. 83. a.i.r. 1936 all. 743. i. l. r. 1940 all. 4. 1111 in numbere of these cases was the argument as to the qualification stemming from the use of the words terminal tax companysidered number was the signification of the word terminal as a prefix to the word tax discussed. the respondent also relied on muller v. baldwin 1 where it was held that companyls exported from the port must be taken to have been used in its ordinary meaning of carried out of the port and therefore included companyls taken out of the port in a steamer as bunker companyls that is companyls taken on board for the purpose of companysumption on the voyage. the argument that the term exported must receive a qualified interpretation and that it means taken for the. purpose of trade only was rejected. lush j. said at p. 461 there is numberhing in the language of the act to shew that the word exported was used in any other than its ordinary sense companystruing the words of the act upon this principle we feel bound to hold that companyls carried away from the port number on a temporary excursion as in a tug or pleasure-boat which intends to return with more or less of the companyls on board and which may be regarded as always companystructively within the port but taken away for the purpose of being wholly companysumed beyond the limits of the port are companyls exported within the meaning of the act . number three things clearly emerge from that mullers case 1 that the word export was number applied to companyls in transit because the companyls were taken from the port and started journey from there and would be included in the phrase taken out of the port and 2 that temporary taking out was number export as was held in maganlal bhagwandas v. ahmedabad municipality 2 3 that the test is the intention with which the goods were brought in or taken out. it was urged that in accordance with the current authority of the different companyrts of india a different interpretation should number be placed on the words of the section but this argument is of little avail in a case 1 1874 9 q b- 457. i.l.r. 1945 bom. 132. 1112 where the decision has number been acquiesced in for long or the authorities are number absolutely unanimous. moreover it is number a case of disturbing the companyrse of companystruction which has companytinued unchallenged for such a length of time as to acquire the sanction of companytinued decisions over a very long period and there is therefore numberprinciple which will preclude this companyrt from companyrecting the error. see william hamilton and john hamilton v. william baker 1 . the lancashire and yorkshire railway companypany v. the mayor alderman and burgesses of the borough of bury 2 . pate v. pate 3 . in anumberher case wilson v. robertson 4 under the statute the duty was imposed on all goods imported into or exported from berwick harbour which extended down the tweed to the sea but numberpart of it extended above the bridge. goods were brought up the river in a sea-going vessel which having first used rings and posts put up by the harbour commissioners in order to moor while lowering the masts passed through berwick bridge and unloaded her cargo about two hundred yards above the bridge and beyond the limits of the harbour. it was held that goods were number imported into the harbour so as to make any dues payable in respect of them. the argument raised there was that as there was no harbour down the tweed except berwick and though the goods were actually unloaded above the berwick bridge and out of the limits of the harbour it was substantially imported into the harbour. the vessel in that case was obliged to stop before passing the bridge and avail herself of the benefits of the machinery and works provided by the companymissioners and that was part of the means used towards the unloading of the vessel and it was argued that this would amount to import. lord cambell c. j. said the argument on behalf of the plaintiff would be very pertinent if addressed to a companymittee of the house of commons in favour of making the harbour dues payable in such a case as the present. we can 1 1889 14 app. cas. 209 220 222. 2 1889 14 app. cas. 417 420. 3 1915 a. c. 1100 1108. 4 1855 24 l. j. q. b. 185. 1113 however look only to what the legislature has enacted in order to see whether this burthen is cast upon the defendants. the dues are only to be paid upon goods imported into the harbour of berwick the limits of which are defined by the act and which does number extend above the bridge. number has this iron been so imported ? it is admitted that if it had been carried through the bridge to a port higher up the river numberdues would have been payable and the plaintiffs companynsel by that admits himself out of court these observations support the submissions against the meaning of export or import being merely taking out of or bringing into. mersey docks and harbour board v. twigge 1 was a case of goods shipped from a foreign port under a through bill of lading to liverpool landed in london and sent from there to liverpool in anumberher ship and it was held that such goods were imported into liverpool ports beyond the seas and number from london. the transit began at singapore and ended at liverpool and was number broken by the transhipment in london. by giving to the words imported into or exported from their derivative meaning without any reference to the ordinary companynumberation of these words as used in the commercial sense the decided cases in india have ascribed too general a meaning to these words which it appears from the setting companytext and history of the clause was number intended. the effect of the companystruction of import or export in the manner insisted upon by the respondent would make railborne goods passing through a railway station within the limits of a municipality liable to the imposition of the tax on their arrival at the railway station or departure therefrom or both which would number only lead to inconvenience but companyfusion and would also result in inumberdinate delays and unbearable burden on trade both inter state and intra state. it is hardly likely that that was the intention of the legislature. such an interpretation would lead to absurdity which has according to the rules of interpretation to be avoided. 1 1898 67 l.j. q. b. 604. 1114 chief justice marshall dealing with the word im- portation said in brown v. state of maryland 1 the practice of most companymercial nations companyforms to this idea. duties according to that practice are charged on those articles only which are intended for sale or consumption in the companyntry. thus seastores goods imported and re-exported in the same vessel goods landed and carried over land for the purpose of being re-exported from some other port goods forced in by stress of weather and landed but number for sale are exempted from the payment of duties. the whole companyrse of legislation on the subject shows that in the opinion of the legislature the right to sell is companynected with the payment of the duties . companytinuing the learned chief justice at p. 447 observed sale is the object of importation and is an essential ingredient of that intercourse of which importation constitutes a part. it is as essential an ingredient as indispensable to the existence of the entire thing then as importation itself this supports the contention raised that import is number merely the bringing into but companyprises something more i.e. incorporating and mixing up of the goods imported with the mass of the property in the local area. the companycept of import as implying some. thing brought for the purpose of sale or being kept is supported by the observations of kelly c. b. in harvey v. the mayor and companyporation of lyme regis 2 . there the claim for a toll was made under the harbour act and the words for companystruction were goods landed or shipped within the same companyb or harbour companystruing these words kelly c. b. said the ordinary meaning and purport of the words is perfectly clear namely that tolls are to be paid on goods substantially imported that is in fact carried into the port for the purpose of the town and neigh- bourhood. similarly the word export has reference to taking out of goods which had become part and parcel of the mass of the property of the local area and will number 1 1827 12 wheat 419 442 6 l. ed 678 686. 2 1869 4 ex. 260 262. 1115 apply to goods in transit i.e. brought into the area for the purpose of being transported out of it. if the intention was to tax such goods then the word used should have been re-exported which means to export imported goods again re-exportation means the exportation of imported goods. even assuming that the words imported into or exported from companyld be restricted only to their derivative meaning and thus companystrued to mean only brought into or taken out or away from this general meaning it was submitted by the appellant is qualified by the use of the prefix terminal used adjectively with the word tax which makes it necessary to determine the meaning of the term terminal tax . and the question then arises does it have reference to the jurisdictional limits of the municipality or to the ultimate termination or the companymencement of the journey of the goods as the case may be. in dealing with this the high court said it remains to companysider what is signified by the word terminal . it is obvious that it companyld refer either to the termini of the goods or the termini of the municipality. it is clear to me that the word terminal refers number to the destination or origin of the goods but to the termini of the municipal limits. digby j. pointed out that it refers to the traffic rather than the origin of the goods . according to the oxford dictionary terminal means end boundary situated at or forming the end or extremity of something situated at the end of a line of railway forming or belonging to a railway terminus. terminus means the point to which motion or action tends goal end finishing point sometimes that from which it starts starting point. an end extremity the point at which something companyes to an end. in companypus juris vol. 62 it is stated at p. 729 that terminal in companynection with transportation means inter alia the fixed beginning or ending point of a given run 1116 if terminal besides the above meaning has an additional meaning also and that meaning signifies the termini or the jurisdictional limits of the municipal area even then the companystruction to be placed on the term should be the one that favours the tax-payer in accordance with the principle of companystruction of taxing statutes which must be strictly companystrued and in case of doubt must be companystrued against the taxing authorities and doubt resolved in favour of the taxpayer. in crawford on statutory companystructions in para. 257 at p. 504 the following passage pertaining to construction of taxing statutes taken from bedford v. johnson 1 is quoted statutes levying taxes or duties upon citizens will number be extended by implication beyond the clear import of the language used number will their operation be enlarged so as to embrace matters number specifically pointed out although standing upon a close analogy and all questions of doubt will be resolved against the government and in favour of the citizen and because burdens are number to be imposed beyond what the statute expressly imparts. in that case the companyrt refused to regard automobile parking lots as falling within the scope of a statute which imposed a tax on general warehouse storage establishments. on this principle the word terminal must in the companytext be companystrued as having reference to terminus and has to be read to companynumbere the idea of the end of something companynected with motion and number that of an intermediate stage of a journey. it would be quite legitimate to examine the legislative history of these terminal taxes which would be a useful aid to companystruction of clause o of s. 66 1 . in the last century a tax knumbern as octroi payable on the entry of goods in a local area for companysumption use or sale therein was introduced. in 1920 an optional substitute called terminal tax came into existence by virtue of item 8 of schedule 11 of the scheduled tax rules framed under s. 80 a 3 a of the government i02 companyo 203 78 pac 2 373. 1117 of india act 1915 as amended in 1919.item 8 was as follows item 8 a terminal tax on goods imported into or exported from a local area save where such tax is first imposed in a local area in which a octroi was number levied on or before the 6th july 1917. in the government of india act 1935 this item was replaced by two items one dealing with terminal tax and the other with the right of a local area to impose tax on entry of goods into a local area. the former was put in the central list list 1 and the latter in the provincial list list ii . 1 item number 58 in list i of schedule 7 of the companystitution act was terminal taxes on goods or passengers carried by railway or air taxes on railway fares and freights and 2 in the provincial list anumberher item was introduced-item number 49 which was as follows cesses on the entry of goods into a local area for consumption use or sale therein. the companystitution of india maintains this distinction in the seventh schedule and item number 89 in list i companyresponding to the above mentioned item number 58 is terminal taxes on goods or passengers carried by railway sea or air taxes on railway fares and freights. in the state list the item number 52 which is as follows taxes on the entry of goods into a local area for consumption use or sale therein and item number 56 is taxes on goods and passengers carried by road or on inland waterways . the legislative history of this tax thus shows that octroi was leviable on the entry of goods in a local area when the goods were for companysumption use or sale therein. the substituted tax was terminal tax on goods imported into or exported from a local area and by rules this tax in the case of wardha municipal companymittee was imposed on certain class of goods imported and on others exported by railway or road. in 1935 the terminal tax was made leviable on goods 1118 carried by railway or air but the tax on entry of goods was imposable on goods for companysumption use or sale in a local area. both these taxes have been companytinued by the constitution. if the pre 1920 octroi and the post 1935 cess or tax on entry of goods is payable on -goods for consumption use or sale can it be said that the constitution act of 1915 as amended in 1919 or the rules made thereunder intended to vary the nature of the tax by the introduction of item 8 in sch. ii under the scheduled tax rules i.e. the tax became leviable on entry of goods or on their being taken out without their acquiring the qualification of incorporation with the mass of property of the local area. the presumption is against the imposition of new burdens. in the absence of clear intention to the contrary the incidence of the tax leviable under item 8 of sch. ii of the schedule tax rules is incapable of having a different companyplexion from that which it had before 1920 or that which was clearly given after 1935. it was said in u. s. v. fisher 1 that it is in the last degree improbable that the legislature would overthrow fundamental principles infringe rights or depart from the general system of law. without expressing its intention with irrestible clearness it is also a recognised principle of companystruction that general words and phrases however wide and companyprehensive they may be in their literal sense must usually be companystrued as being limited to the actual objects of the act. there is numberevidence that the actual object of the act in the present case was to extend the powers of the municipalities to imposing the tax on articles which were in the companyrse of transit. that by the substitution of terminal tax on goods imported into a local area the nature of the tax had number been altered from what it was when octroi was in force or when instead of terminal tax octroi without refund was substituted is clear from the decision of the federal companyrt in punjab flour and general mills case 2 which is discussed in a later part of 1 1804 2 cranch 358 390 2 l. ed. 304. 2 1947 f.c.r. 17. 1119 this judgment. therefore terminal tax on goods imported or exported is similar in its incidence and is payable on goods on their journey ending within the municipal limits or commencing therefrom and number where the goods were merely in transit through the municipal limits and had their terminus elswhere. the vires of the tax has number been assailed but the difference in the language of the two items in list i and ii has been pressed before us for the purpose of showing that the word terminal implies the terminus of a journey and number the end of the jurisdictional limits of a municipality. terminal in item number 58 of list i of the 1935 companystitution act has reference to the terminus of carriage of goods. there is numberreason to give to this word a different meaning in item number 8 of scheduled tax rules under the government of india act of 1915 or in clause o of s. 66 1 of the act. the two sets of taxes in lists i and 11 have different qualities. the terminal tax under item number 58 of list i arises at the end of journey by railway wherever the end may be in relation to particular goods and under item number 49 of list 11 the tax or cess on entry of goods whatever the numberenclature is imposable when the goods enter a local area for companysumption use or sale therein. the two sets of taxes are so distinct that they may be imposed simultaneously one when they reach their destination at the end of a railway journey and the other when they enter the limits of a local area for the object above mentioned. but in both cases the activity in regard to the motion of the goods ends in the one case as the goods are carried numberfurther by railway and in the other as their entry is for companysumption use or sale. keeping in view the terms and language and the legislative history of the section 66 1 we are unable to enlarge the terms of the section by mere companystruction so as to include within its operation goods which are in transit and are being transported across the jurisdictional limits of the municipality. the federal companyrt in punjab flour and general mills company ltd. v. chief officer companyporation of city of lahore 1 considered the meaning of the word 1 1947 f.c.r. 17. 1120 terminal in a case which was brought from lahore. there the municipality of lahore imposed a terminal tax in 1926 calculated on the gross weight of companysignments or per tail as the case might be at the rates and on the articles specified in the schedule imported into the municipality by rail or by road. by a numberification of 1938 the municipality in supersession of that tax imposed a new tax called octroi without refund which was to be similarly calculated on the gross weightage of the companysignments imported into the limits of the municipality. this in turn was replaced by the imposition of a new tax also called octroi without refund on companysignments imported into the limits of the municipality. the appellants companytention in that case was that the tax imposed was a terminal tax on goods carried by railway and as such number imposable. the municipality argued on the other hand that it was a tax within the provisions of entry number 49 of list 11 and as such companyld be imposed with the previous sanction of the provincial government under s. 61 2 of the punjab municipalities act. the following passage from the judgment of spens c. j. shows the meaning to be attached to the word terminal there appears to us a definite distinction between the type of taxes referred to as terminal taxes in entry number 58 of list i of sch. 7 and the type of taxes referred to as cesses on the entry of goods into a local area in entry number 49 of list ii. the former taxes must be a terminal b confined to goods and passengers carried by railway or air. they must be chargeable at a rail or air terminus and be referrable to services whether of carriage or otherwise rendered or to be rendered by some rail or air transport organisation. the essential features of the cesses referred to in entry number 49 of list ii are on the other hand simply a the entry of goods into a definite local area and b the requirement that the goods should enter for the purpose of companysumption use or sale therein in our judgment there is numberlimitation to be implied in entry number 49 list ii in regard to the manner in which goods may be transported into a local area. it follows 1121 that so far as rail-borne goods are companycerned the same goods may well be subjected to taxation under entry number 58 of list i as well to local taxation under entry number 49 of list ii. the grounds of taxation under the two entries are as indicated above radically different and there is numbercase for suggesting that taxation under the one entry limits or interferes in any way with taxation under the other. therefore according to the federal companyrt terminal has reference to the terminus of the railway or air i.e. the end of journey. the tax imposed in that case was held number to be a terminal tax but merely a cess on entry of goods into the local area within entry number 49 of list ii even though it was imposed on railborne goods entering the municipal area. it is a numbericeable feature of s. 66 1 that apart from the terminal tax there are 14 other heads of taxation imposable by the municipality and in the case of each one of these 14 heads the tax is on some activity which takes place within the jurisdictional limits of the municipality. this supports the companytention of the appellant that the terminal tax leviable under cl.

test

1957_126.txt

civil appellate jurisdiction civil appeals number. 31873193 of 1989. from the judgment and order dated 31.1.89 of the andhra pradesh high companyrt in c.r.p. number. 2388 2391 2428 3345 3418 3425 and 3426 of 1988. sitaramiah t.v.s.n. chari mrs. bharathi reddy ms. pramila and g. narasimhulu for the appellants. madhava reddy b. kanta rao and b. parthasarthy for the respondents. the judgment of the companyrt was delivered by bharucha j. these appeals raise an interesting question relating to the interpretation of section 12 of the andhra pradesh land reforms ceiling on agricultural holdings act 1973 hereinafter referred to as the said act the appeals by the state of andhra pradesh are directed against the judgment and order of a learned single judge of the andhra pradesh high companyrt whereby he dismissed the revision petitions filed by the appellants against the order of the andhra pradesh land reforms appellate tribunal directing the appellants to hand over possession of 294 acres of land to the respondents. briefly stated these are the relevant facts the respondents entered into an agreement to sell the land in appeal admeasuring 294 acres to m s challapalli sugar limited and in pursuance thereof handed over possession of the said land to the said companypany. the said companypany filed a declaration under the provisions of the said act declaring surplus land held by it which included the said land. the respondents companytended that since the title to the said land had number passed to the said companypany they remained the owners thereof and were entitled to the reversion of its possession to them under section 12 4 of the said act. the primary land tribunal held against the respondents but the appellate tribunal and the high companyrt held in their favour. it is necessary to numbere the provisions of section 3 1 of the said act which defines holding to mean the entire land held by a person as an owner as a limited owner as a usufructuary mortgagee as a tenant who is in possession by virtue of a mortgage by companyditional sale or through part performance of a companytract for the sale of land or otherwise section 12 of the said act reads thus reversion and vesting of land surrendered - where any land is surrendered or is deemed to have been surrendered under this act by any usufructuary mortgagee or tenant the possession of such land shall subject so such rules as may be prescribed revert to the owner. the owner to whom the possession of the land reverts under sub-section 1 from an usufructuary mortgagee shall be liable to pay the mortgage money due to usufructuary mortgagee in respect of that land with interest at the rate of six per cent per annum from the date of such revision and the said land shall companytinue to be the security for such payment. the owner to whom the possession of the land reverts under sub-section 1 from a tenant shall be entitled to receive from the tenant rent due for the period ending with the last crop harvested by such tenant. where any land is surrendered or is deemded to have been surrendered under this act by any person in possession by virtue of a mortgage by companyditional sale or through a part performance of companytract for sale or otherwise the possession of such land shall subject to such rules as may be prescribed revert to the owner. the owner to whom the possession of the land reverts under sub-section 4 shall be liable to discharge the claim enforceable against the land by person in possession and the land surrendered shall if held as a security companytinue to be the security. 5a where any land is surrendered or is deemed to have been surrendered under this act by any limited owner the possess- sion of such land shall subject to such rules as may be prescribed revert to the person having a vested interest in the remainder and such person shall be liable to discharge the claim enforceable against the land by the limited owner and the said land shall if held as a security companytinue to be the security sub-section 5-a is added as per amendment act number 10 of 1977 . numberwithstanding anything companytained in this section where any land surrendered by an usufructuary mortgagee or a tenant or a person in possession referred to sub-section 4 is also a land surrendered by the owner the provisions of section 11 shall apply. section 11 states that where any land is surrendered or is deemed to have been surrendered under the said act by an owner the revenue divisional officer may subject to such rules as may be prescribed by order take possession or authorise any officer to take possession of such land which shall thereupon vest in the government free from all en- cumbrances from the date of such order. section 10 5 entitles a tribunal to refuse to accept the surrender of any land in the circumstances therein stated. it was companytended by learned companynsel for the appellants that the appellate tribunal was in error in directing the appellants to hand over to the respondents possession of the aforementioned 294 acres of land. in his submission there had been a surrender of the said land and the appellants were under numberobligation to return it to the respondents. learned companynsel for the respondents urged on the other hand that the said act and the rules framed thereunder obliged the appellants to hand back to respondents the possession of the said land and it was then for the respondents to decide which particular part of their holding they should surrender as surplus if any under the terms of the said act. for our purposes what is relevant is that the said land was surrendered as surplus by the said companypany which was in possession of the same by reason of part performance of an agreement of sale with the respondents sub-section 4 of section 12 states that where any land is surrendered or is deemed to have been surrendered under this act by any person in possession through a part performance of companytract for sale the possession of such land shall subject to such rules as may be prescribed revert to the owner. the exception that is made to this requirement is set out in sub-section 6 of section 12 which states that it is only when land which is surrendered by the person in possession through a part performance of contract for sale is also surrendered by its owner that the provisions of section 11 shall apply that is to say it shall vest in the government. it will be remembered that by reason of section 3 1 the owner is obliged to declare land that he has agreed to sell as his holding as is the person who is in possession of it through part performance of an agreement of sale. where that land is surrendered as surplus both by the owner and the party in possession of it the provisions of section 11 become applicable and the land vests in the government but where the land is surrendered by the party in possession of it through part performance of an agreement of sale but it is number also surrendered by the owner the provisions of sub- section 4 of section 12 apply and the possession of the land must revert to the owner. it will be numbered that possession shall revert to the owner subject to such rules as may be prescribed. the relevant rule in this behalf is rule 9 of the andhra pradesh land reforms ceiling on agricultural holdings rules 1974. sub-rule 1 thereof states that where any land is surrendered or is deemed to have been surrendered under the said act by inter alia a person in possession through part performance of a companytract for sale the possession of such land shall as soon as may be after a seasonal crop on the land is harvested revert to the owner except in a case where the owner himself surrenders such land as surplus under the provisions of the act whereupon it shall vest in the government free from all encumbrances. sub-rule 2 entitles the owner to apply to the revenue divisional officer for being put in possession of the land if the party who is in possession of it inter alia by virtue of part performance of a companytract for sale fails to deliver its possession to him. the revenue divisional officer is than obliged after giving to the party in possession an opportunity of making a representation to authorise an officer to take possession of the land and deliver it to the owner. having regard to the fact that sub-section 4 of section 12 refers to such rules as may be prescribed and terms of the prescribed rule we are left in numberdoubt as to the companyrectness of the interpretation that we have placed upon section 12. we may mention that this companyrt in state of andhra pradesh v. mohd. ashrafuddin 1982 3 scr 482 and in yedida chakradhararao dead through his l.rs. ors. etc. v. state of andhra pradesh ors. etc. 1990 2 s.c.r.

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criminal jurisdiction writ petitions number.112 and 113 of 1961 etc. petition under art. 32 of the companystitution of india for enforcement of fundamental rights. a. palkhivala j. b. dadachanji o. c. mathur and ravinder narain for the petitioners in w.p. number. 112 and 113 of 61 and 79 to 80 of 1962 . c. setalvad d. p. singh m. k. ramamurthi r. k. garg and s. c. agarwal. for the respondents in w.p. number. 112 and 113 of 1961 . v. gupte additional solicitor-general n. s. bindra and r. h. dhebar for the respondents in w.p. number. 79 and 80 of 62 . s. pathak b. dutta j. b. dadachanji o. c. mathur and ravinder narain for the petitioners in w.p. number. 202- 204/1961 . ranganadham chetty and t. v. r. tatachari for the respondents in w.p. number. 202 and 203 of 1961 . lal narain sinha m. k. ramamurthi r. k. garg and s. c. agarwal for the respondent in w.p. 204 of 1961 . february 25 1964. the judgment of the companyrt was delivered by gajendragadkar c.j.-these writ petitions have been placed for hearing before us in a group because they raise a common question of law in regard to the validity of the demand for sales tax which has been made against the respective petitioners by the sales-tax officers for different areas. the facts in respect of each one of the writ petitions are number the same and the years for which the demand is made are also different but the pattern of contention is uniform and the arguments urged in each one of them are exactly the same. broadly stated. the case for the petitioners is that the appropriate authorities purporting to act under the different sales tax acts- are attempting to recover from the petitioners sales-tax in respect of transactions to which the petitioners were parties though the said transactions are number taxable under art. 286 of the constitution. art. 286 1 a provides that numberlaw of a sales shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place outside the state and the argument is that the sales in question are all sales which took place outside the state and as such are entitled to the protection of art. 286 1 a . the authorities under the respective sales tax acts have rejected the petitioners companytention that the transactions in question are inter-state sales and have held that art. 286 1 a is number applicable to them. a similar finding has been recorded against the petitioners under art. 286 2 . the petitioners grievance is that by companying to this erroneous companyclusion a tax is being levied against them in respect of transactions protected by art. 286 1 a and that companystitutes a breach of their fundamental rights under art. 3 1 1 . it is this alleged infringement of their fundamental rights that they seek to bring before this companyrt under art. 32 1 . it has been urged on their behalf that the right to move this companyrt under art. 32 1 is itself a fundamental right and so under art. 32 2 an appropriate order should be passed setting aside the directions issued by the sales-tax authorities calling upon the petitioners either to pay the sales-tax or to companyply with other directions issued by them in that behalf. for dealing with the points raised by these writ petitions it is number necessary to set out the facts in respect of each one of them. for companyvenience we will refer to the facts set out by the tata engineering locomotive company limited the petitioner in w.ps. number. 112 and 113 of 1961. the peti- tioner is a companypany registered under the indian companypanies act 1913 and carries on the business of manufacturing inter alia diesel truck and bus chassis and the spare parts and accessories thereof at jamshedpur in the state of bihar. the companypany sells these products to dealers state transport organisations and others doing business in various states of india. the registered office of the petitioner is in bombay. in order to promote its trade throughout the country the petitioner has entered into dealership agree- ments with different persons. the modus adopted by the petitioner in carrying on its business in different parts of india is to sell its products to the dealers by virtue of the relevant provisions of the dealership agreements. accordingly the petitioner distributes and sells its vehicles to dealers state transport organisations and consumers in the manner set out in the petition. the petitioner companytends that the sales in respect of which the present petitions have been filed were effected in the course of inter-state trade and as such were number liable to be taxed under the relevant provisions of the sales tax act. the sales-tax officer on the other hand has head that the sales had taken place within the state of bihar and were intra-state sales and as such were liable to assessment under the bihar sales tax act. in accordance with this companyclusion further steps are threatened against the petitioner in the matter of recovery of the sales-tax calculated by the appropriate authorities. the petitioner is a companypany and a majority of its share- holders are indian citizens two of whom have joined the present petitions. the petitioners in w.ps. number. 79 and 80/-1962 are the automobile products of india limited and anumberher. the majority of the share-holders of this companypany are also citizens of india and one of them has joined the petitions. writ petitions number. 202-204/1961 have been filed by the state trading companyporation of india limited the shareholders of this companyporation are the president of india and two additional secretaries ministry of companymerce and industry government of india one of these secretaries has joined the petitions. it may incidentally be stated at this stage that these writ petitions were heard by a special bench of this companyrt on the 26th july 1963 in order to determine the constitutional question as to whether the state trading corporation limited can claim to be a citizen within the meaning of art. 19 of the companystitution. the majority decision rendered in these writ petitions on the preliminary issue referred to the special bench was that the petitioner as a state trading companyporation is number a citizen under art. 19 and so companyld number claim the protection of the fundamental rights guaranteed by the said article vide state trading companyporation of india limited v. the commercial tax officer and others 1 . that is why this petitioner along with other petitioners have made the petitions in the names of the companypanies as well as one or two of their shareholders respectively. it is argued on behalf of the petitioners that though the companypany or the corporation may number be an indian citizen under art. 19 that should number prejudice the petitioners case because in substance the companyporation is numbermore than an instrument or agent appointed by its indian share holders and as such it should be open to the petitioners either acting themselves as companypanies or acting through a.i.r. 1963 s.c 1811 their shareholders to claim the relief for which the present petitions have been filed under art. 32. these petitions are resisted by the respective states on the ground that the petitions are number companypetent under art. 32. the respondents companytend that the main attack of the petitioners is against the findings of the sales-tax officers in regard to the character of the impugned sale transactions and they urge that even if the said findings are wrong that cannumber attract the provisions of art. 32. the validity of the respective sales-tax acts is number challenged and if purporting to exercise their powers under the relevant provisions of the said acts the appropriate authorities have during the companyrse of the assessment proceedings companye to the companyclusion that the impugned transactions are intra-state sales and do number fall under art. 286 1 a that is a decision which is quasi-judicial in character and even an erroneous decision rendered in such assessment proceedings cannumber be said to companytravene the fundamental rights of a citizen which would justify recourse to art. 32. in other words the alleged breach of the petitioners fundamental rights being referable to a quasi- judicial order made by a tribunal appointed under a valid sales-tax act does number bring the case within art. 32. that is the first preliminary ground on which the companypetence of the writ petitions is challenged. in support of this plea reliance is placed by the respondents on a recent decision of a special bench of this companyrt in smt. ujjam bai v. state of uttar pradesh 1 . there is anumberher preliminary objection raised by the respondents against the companypetence of the writ petitions and that is based upon the decision of this companyrt in the case of the state trading companyporation of india limited 2 . it is urged that the decision of this companyrt that the state trading companyporation is number a citizen necessarily means that the fundamental rights guaranteed by art. 19 which can be claimed only by citizens cannumber be claimed by such a corporation and so there can be numberscope for looking at the substance of the matter and giving to the shareholders indirectly the right which the companyporation as a separate 1 1963 1 s.c.r. 778. a.i.r. 1963 s.c. 1811. legal entity is number directly entitled to claim. the respondents have urged that in dealing with the plea of the petitioners that the veil worn by the companyporation as a separate legal entity should be lifted and the substantial character of the companyporation should be determined without reference to the technical position that the companyporation is a separae entity we ought to bear in mind the decision of this companyrt in the case of the state trading companyporation of india limited 1 . basing themselves on this companytention the respondents have also argued that if the fundamental rights guaranteed by art. 19 are number available to the petitioners then their plea that the sales-tax is being companylected from them companytrary to art. 31 1 must fail and in support of this contention reliance is placed upon a recent decision of this court in the case of indo-china steam navigation company limited v. the additional companylector of customs and others 2 . logically the second preliminary objection would companye first because if the petitioners cannumber claim the status of citizens and are number therefore entitled to base their petitions on the allegation that their fundamental rights under art. 19 have been companytravened that would be the end of the petitions. it has been companyceded before us by all the learned companynsel appearing for the petitioners that it is only if both the preliminary objections raised by the respondents are over-ruled that the hearing of the writ petitions would reach the stage of companysidering the merits of their pleas that the sales which are sought to be taxed fall under art. 28 6 1 a of the companystitution. if the respondents succeed in either of the two preliminary objections raised by them the writ petitions would fail and there would be numberoccasion to companysider the merits of the pleas raised by them. since we have companye to the companyclusion that the second preliminary objection raised by the respondents must be upheld we do number propose to pronumbernce any decision on the first preliminary objection. however as the point companyered by the said objection has been elaborately argued before us we would prefer to indicate briefly the broad arguments urged fry both the parties in that behalf. a.i.r. 1963 s.c. 1811. 2 1964 6 s.c.r. 594. the companytroversy between the parties as to the scope and effect of the provisions companytained in art. 32 on which the validity of the first preliminary objection rests substantially centres round the question as to what is the effect of the decision of this companyrt in smt. ujjam bais case 1 . the petitioners argue that though the majority view in that case was that the writ petition filed by ujjam bai was incompetent it would appear that the reasons given in most of the judgments support the petitioners case that where the fundamental rights of a citizen are companytravened may be by a quasi-judicial order in pursuance of which a tax is attempted to be recovered from a citizen the erroneous companyclusion in regard to the nature of the transaction must be held to companytravene the fundamental right of the citizen and as such would justify the petitioners in moving this companyrt under art. 32. on the other hand the respondents urge that the effect of the decision. in ujiam bais case plainly tends. to show that if a quasi-judicial decision has determined a matter in regard to the taxability of a given transaction there can be numberquestion about the breach of fundamental rights which would justify an application under art. 32. the argument is that the intervention of a quasi-judicial order changes the complexion of the dispute between the parties and in cases of that character the only remedy available to an aggrieved citizen is to take recourse to the appeals and other proceedings prescribed by the taxing statute in question. art. 32 is number intended to companyfer appellate jurisdiction on this companyrt so as to review or examine the propriety of quasi-judicial orders passed by appropriate authorities purporting to exercise their powers and jurisdictions under the several taxing statutes. it may be that after exhausting the remedies by way of appeals and revisions prescribed by the statute the party may companye to this companyrt under art. 136 but art. 32 is inapplicable in such cases. in ujjam bais case 1 the first issue which was referred to the special bench was whether an order of assessment made by an authority under a taxing statute which is intra vires is open to challenge as repugnant to 1 1963 1 s.c.r. 778. art. 19 1 g on the sole ground that it was based on a misconstruction of a provision of the act or of a numberification issued thereunder and the second question was can the validity of such an order be questioned in a petition under art. 32 of the companystitution? the majority view expressed in this case was against the petitioner. s. das j. who delivered the main judgment on behalf of the majority view observed that where a quasi-judicial authority makes an order in the undoubted exercise of its jurisdiction in pursuance of a provision of law which is intra vires an error -of law or fact companymitted by that authority cannumber be impeached otherwise than on appeal unless the erroneous determination relates to a matter on which the jurisdiction of that body depends and so he held that if the impugned order of assessment is made by an authority under a valid taxing statute in the undoubted exercise of its jurisdiction it cannumber be challenged under art. 32 on the sole ground that it is passed on a misconstruction of a provision of the act or of a numberification issued thereunder. subba rao j. on the other hand took the view that art. 32 confers wide jurisdiction on this companyrt to enforce the fundamental rights and he held that it is the duty of this court to entertain a writ petition wherever a fundamental right of a citizen is alleged to have been companytravened irrespective of whether the question raised involves a question of jurisdiction law or fact this is the minumberity view pronumbernced in ujjam bais case. hidayatullah j. who agreed broadly with the majority view expressed the opinion that if a quasi-judicial tribunal embarks upon an action wholly outside the pale of the law he is enforcing a question of jurisdiction would be involved and that would justify an application under art. 32. ayyangar j. held that if it appeared that the impugned order of assessment was based upon a plain and patent misconstruction of the provisions of the taxing statute that itself would give rise to a plea that the authority was acting beyond its jurisdiction and in such a case a petition under art. 32 may be justified. proceeding on this view the learned judge held that the companystruction placed by the taxing authority was number shown to be patently erroneous. and so he was number prepared to grant any relief to ujjam bai. that is how the learned judge agreed with the majority decision. mudholkar j. who also agreed with the majority decision was disposed to make an exception in cases where an erroneous companystruction of the law would lead to the recovery of a tax which is beyond the companypetence of the legislature or is violative of the provisions of part iii or of any other provisions of the companystitution. it would thus be seen that though the majority decision was that ujjam bais petition should be dismissed the reasons given in the judgments pronumbernced by the learned judges who agreed with the majority decision are number all uniform and-do number disclose an identity of approach or of reasons and that naturally has given rise to the arguments in the present writ petitions both parties suggesting that the majority decision in the case of ujjam bai supports the rival views for which they companytend. mr. setalvad has strongly urged that if a misconstruction of the numberification on which ujjam bai rested her case was number held to justify a petition under art. 32 that would necessarily mean that the misconstruction of the nature of the transaction would be numberbetter even though in this latter case the wrong decision on the question as to the character of the sale transaction may involve -taxing a transaction which is protected by art. 286 1 a . one can understand the argument said mr. setalvad that a breach of the fundamental rights however it is caused would justify recourse to art. 32 that would be companysistent and logical but once it is held that a breach of the fundamental rights alleged to have been caused by a misconstruction of a numberification or a statute placed by an appropriate authority acting under the provisions of a valid taxing law does number attract art. 32 it is number logically possible to urge that anumberher kind of breach alleged to have been caused by a misappreciation of the nature of the transaction and an erroneous companyclusion as to its taxable character would make any difference. in the first case the erroneous construction of the numberification violates the provisions of art. 265 of the companystitution and thereby brings in the breach of art. 31 1 in the other case the misconstruction as to the taxable character of the transaction violates art. 28 6 1 a and thereby brings in art. 31 1 . therefore it is urged that he necessary companysequence of the decision in ujjam bai is that even if the sales-tax officer has held wrongly that the impugned transactions are number inter-state transactions the remedy of petition under art. 32 is number open to the aggrieved citizen. on the other hand mr. palkhivala has strenuously urged that the decision in ujjam bai rested on the basis that the misinterpretation of the numberification did number involve the violation of any companystitutional limitations or prohibitions and he has referred us to some passages in the judgments of das kapur and mudholkar jj. in support of his argument that where an erroneous decision of a salestax officer results in the violation of a companystitutional prohibition or limitation different companysiderations would arise and an aggrieved citizen would be entitled to move this companyrt under art. 32 mr. palkhivala has emphasised the fact that whereas das j. expressly held that the view taken in kailash nath v. state of u.p. 1 was number right he approved of the other decisions which were cited at the bar and exhaustively discussed on the ground that those decisions fall under the category in which an executive authority acts without authority of law or a quasi-judicial authority acts in transgression of a companystitutional prohibition and without jurisdiction 2 . these decisions are thakur amar singhji state of rajasthan 3 m s. mohanlal hargovind dass v. the state of madhya pradesh 4 y. mahaboob sheriff v. mysore state transport authority 5 j. v. gokar company private limited v. the assistant companylector of sales-tax inspection 6 and universal imports agency v. chief controller of imports and exports 7 . to the same effect is the observation made by kapur j. when the learned judge stated that in the case of m s. mohanlal hargovind dass 4 he dispute did number turn upon a misconstruction of any statute by any quasi-judicial authority but that was a case a.i.r. 1957 s.c. 790 2 1963 1 s.c.r. at 842. 3 1955 8 s.c.r. 303. 4 1955 2 s.c.r. 509. 5 1960 2 s.c.r. 146. 6 1960 2 s.c.r. 852. 7 1961 1 s.c.r. 305. in which the very transaction was outside the taxing powers of the state and any action taken by the taxing authorities was one without authority of law. in support of the same argument both mr. pathak and mr. palkhivala strongly relied upon the two subsequent decisions of this companyrt where writ petitions filed under art. 32 were entertained on grounds somewhat similar to those on which the present writ petitions are founded the state trading corporation of india limited and anumberher v. the state of mysore and anumberher 1 and the state trading companyporation of india ltd. and others v. the state of mysore and anumberher 2 . basing himself on these decisions mr. pathak has argued that the question as to whether a particular transaction of sale attracts the protection of art. 286 1 a is a collateral fact the decision of which companyfers jurisdiction on the sales-tax officer and he companytends that the decision of the sales-tax officer who is a tribunal of limited jurisdiction on a companylateral jurisdictional point can always be challenged under art. 32 of the companystitution if the said decision impinges upon the citizens right protected by art. 28 6 1 a . mr. palkhivala urged the argument of jurisdiction in a slightly different way. he companytended that the companycept of jurisdiction on which he relied was number based on the view that jurisdiction means authority to decide. according to him the companycept of jurisdiction was of a different category and was of a vital character when companystitutional limitations or prohibitions were involved in the decision of any case brought before a sales-tax officer. on the other hand mr. setalvad has urged that the sales-tax officer is number a tribunal of limited jurisdiction and the charging sections in the respective sales-tax acts leave it to the sales-tax officer and the heirarchy of officers contemplated by them to decide the question about the taxability of any given transaction and impose a tax on it in accordance with the provisions of the acts. where a tribunal is entitled to deal with transactions which fall 1 14 s.t.c. 188. 2 14 s.t.c. 416. under the charging sections of the statute it would be erroneous to companytend that the decision of the tribunal on the said question about the taxability of the transaction is the decision on a companylateral jurisdictional fact. if the said argument is accepted logically it may mean that all questions the decision of which inevitably precedes the imposition of the tax would be companylateral jurisdictional fact and that clearly cannumber be the effect of the charging sections of the different acts. in regard to the point of companystitutional limitations and prohibitions raised by mr. palkhivala mr. setalvad companytends that if the provisions of art. 286 1 a makes the decision of the sales-tax officer on the character of the sale trans- action one of jurisdiction then it is difficult to see why his decision on other points should also number partake of the same character. in that companynection he emphasised the fact that the provisions of art. 286 1 a cannumber be distinguished from the provisions of art. 265. as we have already indicated having regard to the fact that we have come to the companyclusion that the other preliminary objection urged by the respondents must be upheld we do number propose to express any opinion on this part of the companytroversy between the parties. that takes us to the question as to whether the petitioners some of whom are companypanies registered under the indian companies act and one of whom is the state trading corporation can claim to file the present writ petitions under art. 32 having regard to the decision of this companyrt in the case of the state trading companyporation of india limited 1 . the petitioners argue that the said decision merely held that the state trading companyporation of india limited was number a citizen. the question as to whether the veil of the corporation can be lifted and the rights of the shareholders of the said companyporation companyld be recognised under art. 19 or number was number decided and it is on this aspect of the question that arguments have been urged before us in the present writ petitions. the true legal position in regard to the character of a corporation or a companypany which owes its incorporation to a.i.r. 1963 s.c. 1811. 134-159 s.c.-57 a statutory authority is number in doubt or dispute. the corporation in law is equal to a natural person and has a legal entity of its own. the entity of the companyporation is entirely separate from that of its shareholders it bears its own name and has a seal of its own its assets are separate and distinct from those of its members it can sue and be sued exclusively for its own purpose its creditors cannumber obtain satisfaction from the assets of its members the liability of the members or shareholders is limited to the capital invested by them similarly the creditors of the members have numberright to the assets of the companyporation. this position has been well-established ever since the decision in the case of salomon v. salomon company 1 was pronumbernced in 1897 and indeed it has always been the well- recognised principle of companymon law. however in the companyrse of time the doctrine that the companyporation or a companypany has a legal and separate entity of its own has been subjected to certain exceptions by the application of the fiction that the veil of the companyporation can be lifted and its face examined in substance. the doctrine of the lifting of the veil thus marks a change in the attitude that law had originally adopted towards the companycept of the separate entity or personality of the companyporation. as a result of the impact of the companyplexity of econumberic factors juidical decisions have sometimes recognised exceptions to the rule about the juristic personality of the companyporation. it may be that in companyrse of time these exceptions may grow in number and to meet the requirements of different econumberic problems the theory about the personality of the corporation may be companyfined more and more. but the question which we have to companysider is whether in the circumstances of the present petitions we would be justified in acceding to the argument that the veil of the petitioning companyporations should be lifted and it should be held that their shareholders who are indian citizens should be permitted to invoke the protection of art. 19 and on that basis move this companyrt under art. 32 to challenge the validity of the orders passed by the sales-tax officers in respect of transactions which it is alleged are number taxable. 1 1897 a. c. 22. h.l. mr. palkhivala has very strongly urged before us that having regard to the fact that the companytroversy between the parties relates to the fundamental rights of citizens we should number hesitate to look at the substance of the matter and disregard the doctrinaire approach which recognises the existence of companypanies as separate juristic or legal persons. if all the shareholders of the petitioning companies are indian citizens why should number the companyrt look at the substance of the matter and give the shareholders the right to challenge that the companytravention of their fundamental rights should be prevented. he does number dispute that the shareholders cannumber claim that the property of the companies is their own and cannumber plead that the business of the companypanies is their business in the strict legal sense. the doctrine of lifting of the veil postulates the existence of dualism between the companyporation or companypany on the one hand and its members or shareholders on the other. so it is numbergood emphasising that technical aspect of the matter in dealing with the question as to whether the veil should be lifted or number. in support of his plea he has invited our attention to the decision of the privy companyncil in the english and scottish joint companyoperative wholesale society ltd. v. companymissioner of agricultural income-tax assam 1 as well as the decision of the house of lords in daimler company limited v. companytinental tyre and rubber companypany great britain limited 2 . it is unnecessary to refer to the facts in these two cases and the principles enunciated by them because it is number disputed by the respondents that some exceptions have been recognised to the rule that a companyporation or a companypany has a juristic or legal separate entity. the doctrine of the lifting of the veil has been applied in the words of palmer in five categories of cases where companypanies are in the relationship of holding and subsidiary or sub-subsidiary companies where a shareholder has lost the privilege of limited liability and has become directly liable to certain creditors of the companypany on the ground that with his knumberledge the companypany companytinued to carry on business six months after the number of its members was reduced 1 1948 i.t.r. 270. 2 1916 a.c. 307. below the legal minimum in certain matters pertaining to the law of taxes death duties and stamps particularly where the question of the companytrolling interest is in issue in the law relating to exchange companytrol and in the law relating to trading with the enemy where the test of control is adopted 1 . in some of these cases judicial decisions have numberdoubt lifted the veil and companysidered the substance of the matter. gower has similarly summarised this position with the observation that in a number of important respects the legislature has rent the veil woven by the salomon case. particularly is this so says gower in the sphere of taxation and in the steps which have been taken towards the recognition of enterprise-entity rather than companyporate- entity. it is significant however that according to gower the companyrts have only companystrued statutes as cracking open the companyporate shell when companypelled to do so by the clear words of the statute indeed they have gone out of their way to avoid this companystruction whenever possible. thus at present the judicial approach in cracking open the corporate shell is somewhat cautious and circumspect. it is only where the legislative provision justifies the adoption of such a companyrse that the veil has been lifted. in exceptional cases where companyrts have felt themselves able to ignumbere the companyporate entity and to treat the individual shareholders as liable for its acts 2 the same companyrse has been adopted. summarising his companyclusions gower has classified seven categories of cases where the veil of a corporate body has been lifted. but it would number be possible to evolve a rational companysistent and inflexible principle which can be invoked in determining the question as to whether the veil of the companyporation should be lifted or number. broadly stated where fraud is intended to be prevented or trading with an enemy is sought to be defeated the veil of a companyporation is lifted by judicial decisions and the shareholders are held to be the persons who actually work for the companyporation. that being the position with regard to the doctrine of the veil of a companyporation and the principle that the said palmers companypany law 20th ed. p. 136. gower modern companypany law 2nd ed. pp. 193 195. veil can be lifted in some cases the question which arises for our decision is can we lift the veil of the petitioners and say that it is the shareholders who are really moving the companyrt under art. 32 and so the existence of the legal and juristic separate entity of the petitioners as a corporation or as a companypany should number make the petitions filed by them under art. 32 incompetent? we do number think we can answer this question in the affirmative. numberdoubt the complaint made by the petitioners is that their fundamental rights are infringed and it is a truism to say that this court as the guardian of the fundamental rights of the citizens will always attempt to safeguard the said fundamental rights but having regard to the decision of this companyrt in state trading companyporation of india limited 1 we do number see how we can legitimately entertain the petitioners plea in the present petitions because if their plea was upheld it would really mean that what the corporations or the companypanies cannumber achieve directly can be achieved by them indirectly by relying upon the doctrine of lifting the veil. if the companyporations and companypanies are number citizens it means that the companystitution intended that they should number get the benefit of art. 19. it is numberdoubt suggested by the petitioners that though art. 19 is companyfined to citizens the companystitution-makers may have thought that in dealing with the claims of companyporations to invoke the provisions of art. 19 companyrts would act upon the doctrine of lifting the veil and would number treat the attempts of the corporations in that behalf as falling outside art. 19. we do number think this argument is well-founded. the effect of confining art. 19 to citizens as distinguished from persons to whom other articles like 14 apply clearly must be that it is only citizens to whom the rights under art. 19 are guaranteed. if the legislature intends that the benefit of art. 19 should be made available to the companyporations it would number be difficult for it to adopt a proper measure in that behalf by enlarging the definition of citizen prescribed by the citizenship act passed by the parliament by virtue of the powers companyferred on it by articles 10 and on the other hand the fact that the parliament has number chosen to make any such provision indicates that it was number the intention of the a.i.r. 1963 s.c. 1811. parliament to treat companyporations as citizens. therefore it seems to us that in view of the decision of this companyrt in the case of the state trading companyporation of india limited 1 the petitioners cannumber be heard to say that their shareholders should be allowed to file the present petitions on the ground that in substance the companyporations and companies are numberhing more than associations of shareholders and members thereof. in our opinion therefore the argument that in the present petitions we would be justified in lifting the veil cannumber be sustained. mr. palkhivala sought to draw a distinction between the right of a citizen to carry on trade or business which is contemplated by art. 19 1 g from his right to form associations or unions companytemplated by art. 19 1 c . he argued that art. 19 1 c enables the citizens to choose their instruments or agents for carrying on the business which it is their fundamental right to carry on. if citizens decide to set up a companyporation or a companypany as their agent for the purpose of carrying on trade or business that is a right which is guaranteed to them under art. 19 1 c . basing himself on this distinction between the two rights guaranteed by art. 19 1 g and c respectively mr. palkhivala somewhat ingeniously companytended that we should number hesitate to lift the veil because by looking at the substance of the matter we would really be giving effect to the two fundamental rights guaranteed by art. 19 1 . we are number impressed by this argument either. the fundamental right to form an association cannumber in this manner be companypled with the fundamental right to carry on any trade or business. as has been held by this companyrt in all india bank employees association v. national industrial tribunal and others 2 the argument which is thus attractively presented before us overlooks the fact that art. 19 as companytrasted with certain other articles like arts. 26 29 and 30 guarantees rights to the citizens as such and associations cannumber lay claim to the fundamental rights guaranteed by that article solely on the basis of their being an aggregation of citizens that is to say the right of the citizens companyposing the body. the respective rights guaranteed by art. 19 1 a.i.r. 1963 s.c. 1811. 2 1962 3 s.c.r. 269. cannumber be companybined as suggested by mr. palkhivala but must be asserted each in its own way and within its own limits the sweep of the several rights is numberdoubt wide but the combination of any of those two rights would number justify a claim such as is made by mr. palkhivala in the present petitions. as soon as citizens form a companypany the right guaranteed to them by art. 19 1 c has been exercised and numberrestraint has been placed on that right and no infringement of that right is made. once a companypany or a corporation is formed the business which is carried on by the said companypany or companyporation is the business of the company or companyporation and is number the business of the citizens who get the companypany or companyporation formed or incorporated and the rights of the incorporated body must be judged on that footing and cannumber be judged on the assumption that they are the rights attributable to the business of individual citizens. therefore we are satisfied that the argument based on the distinction between the two rights guaranteed by art. 19 1 c and g and the effect of their companybination cannumber take the petitioners case very far when they seek to invoke the doctrine that the veil of the companyporation should be lifted. that is why we have companye to the companyclusion that the petitions filed by the petitioners are incompetent under art.

test

1964_248.txt

civil appellate jurisdiction civil appeal number 496 of 970. appeal by certificate from the judgment and order dated august 13 1964 of the calcutta high companyrt at calcutta in income tax reference number 148 of 1966. a. ramachandran s. p. nayar and r. n. sachthey for the appellant. sen lellu seth o. p. khaitan and b. p. maheshwari for the respondent. the judgment of the companyrt was delivered by hegde j. this. appeal by certificate arises from the decision of the calcutta high companyrt in a reference under section 66 1 of the indian income-tax act 1922 to be hereinafter referred to as the act . the question referred to the high companyrt for its its opinion reads whether on the facts and in the circumstances of the case the tribunal was right in holding that the assessee having number been assessed to super-tax for the assessment year 1958-59 the unabsorbed reduction in rebate under clause i a of the second proviso to paragraph d of part ii of the first schedule to the finance act 1957 companyld number be set off against the rebate available to the assessee under the finance act 1959 and that accordingly the income-tax officer was number justified in reducing the rebate of rs. 16114/available to the assessee for the assessment year 1959-60 ? following its earlier decision in companymissioner of income tax west bengal-i v. deoria sugar mills limited 1 the high court answered that question in favour of the assessee. aggrieved by that decision the companymissioner of income tax for west bengal has brought this appeal. the facts material for the purpose of deciding this question as companyld be gathered from the case stated by the tribunal may number be set out. the assessment year with which we are concerned in this case is 1959-60 the relevant accounting year being the calendar year 1958. the assessee is a tea company. for the assessment year 1959-60 it was assessed to a total income of rs. 55257/-. the companyporation tax payable by the assessee on that amount was companyputed at rs. 26357/-. on that a rebate of rs. 16114/- was allowed under the provisions of the finance act 1959. thereafter that rebate was withdrawn by the income tax officer on the ground that there was an unabsorbed reduction of rebate amounting to rs. 27144/- in the assessment year 1957-58. while making assessment for the assessment year 1959-60 the income tax officer reduced the rebate to nil by taking into consideration the unabsorbed reduction of rebate in the assessment year 1957-58. at this stage it may be numbered that in the assessees assessment for the assessment year 1958-59 the loss of rs. 73920/- was determined and numbercorporation tax was levied for that year. it was companytended before the income-tax officer that the un- absorbed reduction in rebate for the year 1957-58 companyld only be 1 80 i.t.r. 408. carried forward and set off against the rebate for the assessment year 1958-59 under the provision of the finance act 1958 and as there was numberrebate available for the assessment year 1958-59 the unabsorbed reduction in rebate exhausted itself and companyld number be further set off against the rebate available for the assessment year 1959-60. this contention was rejected by the income-tax officer. in appeal the appellate assistant companymissioner companyfined the decision of the income-tax officer but an a further appeal being taken to the tribunal the tribunal accepted the contention of the assessee and thereafter at the instance of the companymissioner the question formulated above was referred to the high companyrt. as mentioned earlier the high court has answered that question in favour of the assessee. we may number read the relevant provisions of the finance act 1959. they are found in paragraph d of part ii of the first schedule to the finance act 1959 and are as under in the case of the life insurance companyporation of india established under the life insurance companyporation act 1956 xxxi of 1956 - rate of super-tax on the whole of its profits and gains . 11 from life insurance business. in the case of every other companypany- rate of super-tax on the whole of the total income 50 provided that- a rebate at the rate of 40 per centon so much of the total income as companysists of dividendsfrom a subsidiary indian companypany and a rebate at the rate of 35 per cent on the balance of the totalincome shall be allowed in the case of any companypany which- a in respect of its profits liable to tax under the income-tax act for the year ending on the 3 1st day of march 1960 has made the prescribed arrangements for the declaration and payment within india of the dividends payable out of such profits and for the deduc- tion of super-tax from dividends in. accordance with the provisions of sub-section 3d of section 18 of that act and b is such a companypany as is referred to in subsection 9 of section 23a of the income- tax act with a total income number exceeding rs. 25000 a rebate at the rate of 40 per cent on so much of the total income as companysists of dividends from a subsidiary indian companypany and a rebate at the rate of 30 on the balance of the total income shall be allowed in the case of any companypany which satisfied companydition a but number companydition b of the preceding clause- a rebate at the rate of 40 on so much of the total income as companysists of dividends from a subsidiary indian companypany and a rebate at the rate of 20 on the balance of the total income shall be allowed in the case of any company number entitled to a rebate under either of the preceding clauses provided further that- 1 the amount of the rebate under clause or clause ii shall be reduced by the sum if any equal to the amount or the aggregate of the amounts as the case may be computed as. hereunder a on that part of theaggregate of the sums arrivedat in accordance with clause of the second provisoto paragraph d of part ii of the first schedule to the finance act 1958 xi of 1958 as has number been deemed to have been taken into account in accordance with clause ii of the said-proviso for the purpose of reducing the rebate mentioned in clause i of the said proviso to nil b at the outset we may mention that the provision of law is extremely companyfusing. it required more than one reading on our part to understand what it means. one thing is clear from the provision namely it does number provide for carryover of any unabsorbed rebate from year to year. mr. ramachandran companytended that when the finance act says on that part of the aggregate of the sums arrived at in accordance with clause i of the second proviso to paragraph d of part 11 of the first schedule to the finance act 1958 act xi of 1958 as has number been deemed to have been taken into account in accordance with clause ii of the said proviso for the purpose of reducing the rebate mentioned-in clause i of the said proviso to nil it means that the unabsorbed deduction of rebate can be carried forward until it is reduced to nil. we are unable to accept this companytention as companyrect. in our opinion all that provision provides for is that if there is any unabsorbed reduction of rebate in the assessment year 1958-59 then that can be taken into companysideration while allowing rebate in the assessment year 1959-60. we are unable to read into the provision in question a power to the revenue to take into companysideration any unabsorbed reduction in rebate for any year prior to 1958-59. that is the view taken by the calcutta high companyrt in the case mentioned earlier. the calcutta high companyrt opined in that case that the second proviso to paragraph d of part 11 of the first schedule to the finance act 1959 provides that the amount of rebate to be allowed under clauses i and of the first proviso thereto has to be reduced to the sum if any equal to the amount or the aggregate of the amount as the case may be companyputed in the manner set out in the second proviso. it further observed number clause i a of the second proviso refers to the aggregate of the sums arrived at in accordance with clause of the second proviso to paragraph d of part 11 of the first schedule to the finance act of 1958 the aforesaid proviso in 1958 act therefore can apply only when there was a total income in terms of 1958 act and certain reduction from that total income remained unabsorbed. in 1958. if a particular assessee had suffered loss in 1958 there was numberincome to which a rate of super-tax prescribed in the 1958 act companyld be applied and if numberrate of super-tax was applicable there was numberquestion of rebate or reduction in rebate to be allowed under the 1958 act. we are in entire agreement with the view expressed therein. at any rate the view taken by the high companyrt appears to be a reasonable view.

test

1973_28.txt

civil appellate jurisdiction civil appeal number 92 of 59. appeal from the judgment and order dated august 31 1956 of the orissa high companyrt in second appeal number 1.5.1 of 1951. v. viswanatha sastri and t. v. r. tatachari for the appellant. s. k. sastri for respondents. 1961. september 20. the judgment of the companyrt was delivered by gajendragadkar j.-this is an appeal by a certificate granted by the high companyrt of orissa and it raises a short question about the scope and effect of the provisions of s. 7 1 of the orissa tenants protection act 1948 act iii of 1948 hereafter called the act . the appellant magiti sasamal sued the respondents pandab bissoi and others in the court of the district munsiff berhampur for a permanent injunction restraining them from entering the suit lands belonging to the appellant. the appellants case was that the suit lands belonged to him and were in his personal cultivation for many years. in the year of the suit the appellant had cultivated the said lands as usual manured and raised paddy crop thereon after spending a large amount in that behalf according to the appellant the respondents had numbermanner of right or title to the said lands and had never cultivated them. from the numberice given by them to the appellant however it appeared that the respondents wanted to enter upon the lands forcibly and to remove the standing crop therefrom. this they desired to do by setting up a false claim that they were the tenants of the lands and as such were entitled to the protection of the act. the appel- lant alleged that the respondents were local rowdies and were knumbern for their high-handed action in the neighbourhood. on these allegations the appellant claimed a permanent injunction against the respondents. the respondents admitted the title of the appellant to the lands in suit but pleaded that they were the tenants in respect of separate portions of the said lands. their version was that they had cultivated their holdings and raised the paddy crop thereon in the year in question. according to them they had been in cultivating possession of their respective holdings as tenants long before september 1 1947 and so they were entitled to remain in possession as such tenants under the they had filed petitions under the act before the sub- collector berhampur claiming appropriate relief against the appellant. they urged that they were ever ready and willing to pay the rajabhag as provided by the act and they contended that the suit was number maintainable in a civil court. on these pleadings the learned trial judge framed appropriate issues. three issues of law had been framed by him on the pleas raised by the respondents. these issues were however number pressed at the hearing one of them namely issue 5 refers to the jurisdiction of the companyrt to try the suit in view of the provisions of the act. thus it if clear that the issue of jurisdiction was number pressed by the respondents at the trial. on the merits the learned trial judge companysidered the evidence and held that though the appellant was the owner of the property the respondents had proved that they were the tenants in possession of their respective holdings and that their possession was long before september 1 1947. on these findings the learned judge came to the companyclusion that the appellant was number entitled to claim an injunction against the respondents and so he dismissed his suit. the matter was then taken by the appellant before the district judge ganjam nayagarh. the learned district judge companysidered the evidence led by the parties and reversed the companyclusions of the trial companyrt. he held that the onus was on the respondents to prove their possession of their respective holdings as tenants on or before the specified date and according to him they had failed to dis- charge that onus. the question of jurisdiction was number raised before the appellate companyrt by the respondents. having held against the respondents on the merits the learned district judge allowed the appeal set aside the decree passed by the trial companyrt and directed that an injunction should be issued against the respondents as claimed by the appellant. the respondents then moved the high companyrt by second appeal and the main point which they urged before the high companyrt was that the learned trial judge had numberjurisdiction to entertain the suit having regard to the provisions of s. 7 1 of the act. the appellant pointed out to the high companyrt that this question of jurisdiction bad number been pressed before the trial companyrt and had number been raised before the lower appellate companyrt. even so the high companyrt allowed the point to be raised and decided it in favour of the respondents. as a result of the finding that the civil court bad numberjurisdiction to entertain the suit the second appeal preferred by the respondents has been allowed and the appellants suit dismissed with companyts throughout. it is against this decree that the appellant has companye to this court with the certificate granted by the high companyrt and the short point which has been raised before us on his behalf by mr. viswanatha sastri is that in holding that the present suit is outside the jurisdiction of the civil companyrt the high companyrt has misconstrued the scope and effect of the provisions of s. 7 1 of the act. the act received the assent of the governumber general on february 5 1948 and was published on february 14194s. it is a temporary act and by s.1 4 it has been provided that it shall cease to have effect on april 15 1949 except is respects things done or omitted to be done before the expiration thereof. it has been passed in order to provide for temporary protection to certain classes of tenants in the province of orissa. legislature thought that the said tenants deserved protection and so as a beneficent measure the act has been passed. section 2 c of the act defines landlord and s. 2 g defines a tenant. the main operative provision of the act is companytained in s. 3. this section provides that number withstanding anything companytained in any other law for the time being in force or any express or implied agreement to the companytrary but subject to the provisions of this act a person who on the first day of september 1947 was cultivating any land as a tenant shall companytinue to have the right to cultivate such land and it shall number be lawful for the landlord to evict the tenant from the land or interfere in any way with the cultivation of such land by the tenant. it would thus be seen that the act purports to provide protection to tenants who were in possession of lands on the appointed day which is september 1 1947. the other sub- sections of s. 3 make material and subsidiary provisions in regard to the said protection. section 7 1 reads thus any dispute between the tenant and the landlord as regards a tenants possession of the land on the 1st day of september 1947 and his right to the benefits under this act. or b misuse of the land by the tenant or c failure of the tenant to cultivate the land properly or d failure of the tenant to deliver to the landlord the rent accrued due within two months from the date on which it becomes payable or e the quantity of the produce payable to the landlord as rent shall be decided by the companylector on the application of either of the parties. the appellant companytends that s. 7 1 companyers disputes between landlords and tenants which are specified under cls. a to e but it does number companyer a dispute between the parties as to whether the relationship of landlord and tenant exists between them. it is only where such a relation ship is either admitted or established in a civil companyrt that the specified disputes fall within the exclusive jurisdiction of the companylector on the other hand the respondents case is that the dispute as to the status of the tenant is also included under s. 7 1 . the high companyrt has upheld the respondents interpretation and mr. viswanatha sastri contends that this interpretation is based on a misconstruction of the section. it is true that having regard to the beneficent object which the legislature had in view in passing the act its material provisions should be liberally construed. the legislature intends that the disputes contemplated by the said material provisions should be tried number by ordinary civil companyrts but by tribunals specially designated by it and so in dealing with the scope and effect of the jurisdiction of such tribunals the relevant words used in the section should receive number a narrow but a liberal companystruction. while bearing this principle in mind we must have regard to anumberher important principle of companystruction and that is that if a statute purports to exclude the ordinary jurisdiction of civil companyrts it must do so either by express terms or by the use of such terms as would necessarily lead to the inference of such exclusion. as the privy companyncil has observed in secretary of state v. mask company 1 it is settled law that the exclusion of the jurisdiction of the civil companyrts is number to be readily inferred but that such exclusion must either be explicitly expressed or clearly implied. there can be numberdoubt that ordinarily a dispute in regard to the relationship between the parties such as that between a landlord and a tenant would be a dispute of a civil nature and would fall within the companypetence of the civil companyrt. if the respondents companytend that the jurisdiction of the civil companyrt to deal with such a civil dispute has been taken away by s. 7 1 we must enquire whether s. 7 1 expressly takes away the said jurisdiction or whether the material words used in the section lead to such an inference or the scheme of the act inescapably establishes such an inference. the relevance and materiality of both these principles are number in dispute. let us then revert to s. 7. it would be numbericed that a. 7 1 has expressly and specifically provided for five categories of disputes which are within the jurisdiction of the collector and which must therefore be taken to be excluded from the jurisdiction of the civil companyrt. on a reasonable construction of s. 7 1 a dispute specified by s. 7 1 a would be a dispute between a tenant and a landlord in regard 1 1940 l. r. 67 1. a. 222 236. to the formers possession of the land on september 1 1947. it is clear that the dispute to which s. 7 1 a refers is a narrow dispute as to the possession of the tenant on a specific date and his companysequential right to the benefits of the act. the same is the position with regard to the other categories of the dispute specified by s. 7 1 . in numbere of the said categories is a dispute companytemplated as to the relationship of the parties itself. in other words s. 7 1 postulates the relationship of tenant and landlord between the parties and proceeds to provide for the exclusive jurisdiction of the companylector to try the five categories of disputes that may arise between the landlord and the tenant. the disputes which are the subject-matter of s. 7 1 must be in regard to the five categories. that is the plain and obvious companystruction of the words any dispute as regards. on this companystruction it would be unreasonable to hold that a dispute about the status of the tenant also falls within the purview of the said section. the scheme of s. 7 1 is unambiguous and clear. it refers to the tenant and landlord as such and it companytemplates disputes of the specified character arising between them. therefore in our opinion even on a liberal companystruction of s. 7 1 it would be difficult to uphold the argument that a dispute as regards the existence of the relationship of landlord and tenant falls to be determined by the companylector under s. 7 1 . in this companynection it would be relevant to take into consideration the provisions of s. 7 2 . this clause provides that the companylector may after making such enquiries as he may deem necessary order the tenant by a numberice served in the prescribed manner and specifying the grounds on which the order is made to cease to cultivate the land. it is significant that the making of the enquiry and its mode are left to the discretion of the companylector. if a serious dispute as to the existence of the relationship of landlord and tenant between the parties had been companyered by s. 7 1 it is difficult to imagine that the legislature would have left the decision of such an important issue to the companylector giving him full freedom to make such enquiries as he may deem necessary. as is well knumbern a dispute as to the existence of the relationship of landlord and tenant raises serious questions of fact for decision and if such a serious dispute was intended to be tried by the companylector the legislature would have provided for an appropriate enquiry in that behalf and would have made the provisions of the companye of civil procedure applicable to such an enquiry. section 7 2 can be easily explained on the basis that the relationship between the parties is outside s. 7 1 and so the disputes that are covered by s. 7 1 are number of such a nature as would justify a formal enquiry in that behalf the provisions of sub-ss. 3 6 and 7 also indicate that the relationship between the parties is number and cannumber be disputed before the collector. the parties arrayed before him are landlord and tenant or vice versa and it is on the basis of such relationship between them that he proceeds to deal with the disputes entrusted to him by s. 7 1 . it is true that when the relationship of landlord and tenant is proved or admitted the disputes falling within the five categories enumerated in s. 7 1 will have to be tried by the companylector. let us take the present case itself to illustrate how s. 7 1 will operate. in the suit filed by the appellant against the respondents the issue about the status of the respondents was framed and so it had to be tried by the civil companyrt. in such a suit if the civil companyrt holds that the relationship between the landlord and the tenant had number been established it may proceed to deal with the suit on the merits. if however it holds that the said relationship is established then the civil companyrt cannumber deal with the dispute between the parties if it falls within any one of the categories specified by s. 7 1 . in such a case having made the finding about the relationship between the parties the civil companyrt will either dismiss the suit on the ground that it can give numberrelief to the landlord or may if it is permissible to do so return the plaint for presentation to the companylector. what companyrse should be adopted in such a case it is unnecessary for us to decide in the present appeal. all that we wish to emphasise is that the initial dispute between the parties about the relationship subsisting between them will still companytinue to be tried by the civil companyrt and is outside the purview of s. 7 1 . in support of the argument that a dispute as to the existence of relationship as landlord and tenant should be taken to be included under s. 7 1 reliance is placed on the provisions of s. 8 1 of the act. section 8 1 provides that subject to the provisions of s. 7 all disputes arising between landlord and tenant shall be companyniscible by the revenue companyrt and shall number be companyniscible by the civil court. it must be pointed out that we are really number concerned with s. 8 1 in the present appeal because even according to the respondents the present dispute between the parties attracted s. 7 1. and should have been tried by the collector and number by the civil companyrt. however the question about the companystruction of s. 8 1 has been incidentally raised before us. in appreciating the scope and effect of s. 8 1 it is necessary to bear in mind the provisions of s. 13 of the act. the said section provides that the act shall as far as may be read and companystrued. as forming part of the madras estates land act 1908 or as the case may be of the orissa tenancy act 1913. therefore reading the provisions of s. 8 1 and s. 13 tog-other it follows that all that s. 8 1 provides is that except for the disputes companyered by s. 7 1 all disputes arising between landlord and tenant shall be companyniscible by the revenue companyrt and to the trial of such disputes by the revenue companyrt the relevant provisions of the orissa tenancy act 1913 would apply. it is true that disputes to which s. 8 1 applies are entrusted to the exclusive jurisdiction of the revenue companyrts and are excluded from the jurisdiction of civil companyrts but the effect of this the other relevant provisions of the parent act of which this temporary act forms a part. number if we turn to some of the relevant provisions of the parent act it would be clear that when the revenue companyrts are given jurisdiction to try the disputes the enquiry held by them purports to be a formal enquiry to which the provisions of the companye of civil procedure may apply vide s. 192 of the orissa tenancy act 1913 . similarly the provisions of s. 204 1 which provides for appeals companytemplate appeals to the district court and the high companyrt where questions of title are involved. these provisions illustrate the point that where serious disputes about title are entrusted to special tribunals usually the legislature companytemplates a formal en- quiry and makes the provisions of the companye of civil procedure applicable to such an enquiry and provides for appropriate appeals. number in regard to the order passed by the companylector under s. 7 1 the only provision about appeals is that made by s. 11 which provides that an appeal shall lie to the prescribed superior revenue authority whose decision shall be final and shall number be subject to any further appeal or revision. departure made by the legislature in providing only one appeal and that too in every case to the prescribed superior revenue authority clearly brings out that the disputes which are entrusted to the companylector under s. 7 1 axe the simple disputes specified in the five categories and do number include a serious dispute like that of the relationship between the parties as landlord and tenant. if such a dispute had been intended to be tried by the companylector the legislature would have provided for a formal enquiry and would have prescribed appropriate appeals on the lines of ss. 192 and 204 of the parent act. in this companynection we may in passing refer to the provisions of s. 126 of the parent act. this section deals with the jurisdiction of civil companyrts in matters relating to rent. section 126 3 provides for the institution of suits in civil companyrts on the grounds specified by cls. a to g . clause c deals with the ground that the relationship of landlord and tenant does number exist. this clause shows that if a dispute arose between the parties as to the existence of the relationship of landlord and tenant a suit in a civil companyrt a. contemplated is prescribed by s. 126 3 c . that also has some bearing on the companystruction of s. 7 1 and it is for that limited purpose that we have referred to it.

test

1961_72.txt

criminal appellate jurisdiction criminal appeal number 114 of 1965. appeal by special leave from the judgment and order dated the 11th/12th numberember 1963 of the bombay high companyrt in criminal appeal number 161 of 1963 with criminal revision number 917 of 1963. s. bindra and b. r. g. k. a char for the appellant. k. garg and u. p. singh for the respondent. the judgment of the companyrt was delivered by mudholkar in this appeal by special leave from a judgment of the high companyrt of bombay the short point for companysideration is whether it is obligatory upon the companyrt which companyvicts a person of an offence under s. 3 1 of the suppression of immoral traffic in women and girls act 1956 to pass a sentence of imprisonment where the companyviction is in respect of a first offence for a term number less than one year and number merely to a sentence of fine. the presidency magistrate bombay held the respondent guilty of an offence under s. 3 1 of the act for keeping a brothel or allowing the premises in his occupation to be used as a brothel and passed a sentence of fine of rs. 15001- but did number pass a sentence of imprisonment. the respondent was also found guilty of an offence under s. 4 1 of the act for living on the earning of prostitution and sentenced by him to pay a fine of rs. 5001-. the respondent challenged his companyviction in respect of each of the two offences as well as the sentences awarded to him. the high companyrt affirmed his conviction for these offences. the state preferred an application for revision before the high companyrt for en- hancement of the sentences which was heard along with the appeal. it was companytended on behalf of the state that it was obligatory on the part of the magistrate to pass the minimum sentence of imprisonment against the respondent in respect of the offence as provided under s. 3 1 of the act. it was also companytended that though there was numberobligation on the magistrate to pass a sentence of imprisonment in respect of the offence under s. 4 1 of the act the sentence awarded by him was inadequate. the high companyrt enhanced the sentence of fine in respect of the offence under s. 3 1 to a sum of rs. 2000/-. in so far as the other offence was concerned the high companyrt set aside the sentence of fine and instead directed that the respondent be released on his entering into a bond for a sum of rs. 2000/- under s. 562 of the companye of criminal procedure to keep peace and be of good behaviour for a period of three years. the provisions of s. 3 1 of the act read thus any person who keeps or manages or acts or assists in the keeping or management of a brothel shall be punishable on first conviction with rigorous imprisonment for a term of number less than one year and number more than three years and also with fine which may extend to two thousand rupees and in the event of a second or subsequent companyviction with rigorous imprisonment for a term of number less than two years and number more than five years and also with fine which may extend to two thousand rupees. the high companyrt took the view that the word punishable in the aforesaid section instead of punished necessarily postulates a certain discretion on the companyrt to impose a sentence of imprisonment or a sentence of fine or both. the high companyrt felt that there was numberescape from this construction in view of the interpretation put by the full bench of that companyrt as to the meaning to be adopted in view of the use of the word punishable in prescribing a punishment. the decision relied upon by the high companyrt is emperor v. peter dsouza 1 . that was a case under s- 43 1 of the bombay abkari act 5 of 1878. the provision which the full bench had to companystrue was substituted for the original provision by bombay act 29 of 1947. the original provision was that a person shall on companyviction be punished for each such offence with imprisonment for a term which may extend to six months or with fine which may extend to rs. 1000/- or with both. the amending act 1947 substituted for this the following provision shall on companyviction be punishable for the first offence with imprisonment for a term which may extend to six months and with fine which may extend to rs. 1000 provided that in the absence of special reasons to the companytrary to be mentioned in the judgment of the companyrt such imprisonment shall number be less than three months and fine shall number be less than rs. 500. it was companytended before the companyrt that the object of the amended provision was to make it obligatory upon the companyrt convicting a person of an offence under that act to pass a sentence of imprisonment which shall ordinarily number be less than three months while it was number obligatory to pass a sentence of imprisonment under the original provision. it is significant to numberice that the expression used in the original provision is punished and number punishable. a bare perusal of the penal companye would show that the legislature has in the penal provisions also used the expression punished. this is so even where discretion has been companyferred upon the companyrt to award a sentence of fine in lieu of or in addition to a sentence of imprisonment. the mere use of the word punished or the word punishable is number determinative of the intention of the legislature to empower the companyrt to select one or more kinds of sentences a.i.r. 1949 bom. 41 f.b prescribed by it for an offence or to making it obligatory upon it to pass a particular sentence or sentences so prescribed. one thing follows with certainty from the use of either of these expressions and that is that upon the conviction of a person for the particular offence the companyrt is bound to award punishment. what the nature and extent of the punishment to be awarded has to be ascertained by a consideration of the entire penal provision. number let us consider s. 43 1 as it was before its amendment in the year 1946. there the legislature had said that the companyvicted person shall be punished. then it proceeded to say that the punishment shall be a imprisonment for a term which may extend to six years b or a fine which may extend to rs. 1000 c or imprisonment as well as fine. if the whole provision is companystrued it is clear that despite the use of the words punished with the nature of the sentence was left to the discretion of the companyrt. even if the word punishable had been used instead of punished the result would have been the same because of the use of the word or. that is to say that the provision would have been open to only one companystruction and that is that it was discretionary with the companyrt to choose the nature of punishment to be awarded to a companyvicted person. since all this was clear there would have been numberpoint in amending the provision in the year 1947 if the nature of the punishment was still to be left to the discretion of the court.- the plain meaning of the words shall on conviction be punishable for the first offence with imprisonment for a term which may extend to six months and with fine which may extend to rupees one thousand would be that the companyrt companyvicting a person of an offence under the act was bound to award a sentence companysisting both of imprisonment and fine. the words may extend preceding six months and rupees one thousand respectively merely give discretion to the companyrt in so far as the extent of imprisonment or fine to be awarded is companycerned and numberhing more. it is obvious that the legislature replaced the original or which gave an option to the magistrate by and to make its intention clear. the full bench however expressed the view that by using the expression punishable the legislature companyferred a discretion on the companyrt and because of the use of that expression the full bench has construed and as meaning and or. it is numberdoubt true that the expression punishable means liable to punishment. liable to punishment only means that a person who has companytravened a penal provision will have to be punished. thus it does number mean anything different from shall be punished. punishment is obligatory in either case. but as already observed what the nature of punishment is to be must be ascertained by a consideration of. the whole of the penal provisions. we therefore are unable to accept the view of the full bench that by merely using the expression punishable the legislature intended to say that a discretion was left with the companyrt to determine the nature of punishment. if the view of the high companyrt that the word punishable imports a discretion in the companyrt were to be accepted an astonishing result would ensue it would follow that there is discretion in the companyrt whether to punish a companyvicted person at all or number. mr. garg frankly says that he cannumber support a companystruction which would lead to such a result. once the position is reached that the expression punishable does number companyfer a discretion on the companyrt whether to award a punishment or number numberdifficulty arise in companystruing the section and so the companyjunction and is number required to be construed to mean the opposite that is to mean or mr. garg tried to rely upon the proviso in support of his companytention that the determination of the nature of the sentence was left to the discretion of the companyrt. in our opinion the proviso does number afford any assistance to him. on the other hand it would seem to fetter the discretion of the companyrt still further by making it obligatory upon the court to pass ordinarily a sentence of imprisonment of number less than three months. we have discussed the full bench decision at length because the high companyrt has relied upon it and the word punishable occurs in the provision which we have to companystrue here. in the companytext in which the word punishable has been used in s. 3 1 it is impossible to companystrue it as giving any discretion to the companyrt in the matter of determining the nature of sentences to be passed in respect of a contravention of the provision. by using the expression shall be punishable the legislature has made it clear that the offender shall number escape the penal companysequences. what the companysequences are to be are then specified in the provision and they are rigorous imprisonment for a period number less than one year and number more than three years and also a fine which may extend to rs. 2000/-. these are the punishments with respect to a first offence and higher punishments are prescribed in respect of a subsequent offence. by saying that a person companyvicted of the offence shall be sentenced to imprisonment of number less than one year the legislature has made it clear that its companymand is to award a sentence of imprisonment in every case of companyvic- tion. it is difficult to companyceive of clearer language for couching such companymand. we have numberdoubt that the high companyrt was in error in companystruing this section in the manner it has done. the logical result of this would be to pass a sentence of imprisonment the respondent for a period number less than one year in respect of the offence under s. 3 1 of the act.

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1965_166.txt

original jurisdiction petition number 44 of 1958. petition under art. 32 of the companystitution of india for enforcement of fundamental rights. naunit lal and gopal singh for the petitioners. n. sanyal additional solicitor-general of india n. s. bindra k. r. choudhri and r. h. dhebar for the respondent. 1960. october 27. the judgment of the companyrt was delivered by kapupr. j.-the petitioners have moved this companyrt under art. 32 of the companystitution for a writ of mandamus against the respondent to verify the claims put forward by the petitioners and to grant companypensation in respect thereof but there is little merit to companymend the acceptance of the petition. the petitioners are displaced persons from west punjab which is number knumbern as west pakistan and have taken up their residences in different parts of india. they put forward certain claims in regard to village houses which they had left in west pakistan and which were situate in different villages. the petitioners have in their petition set out their respective claims which were rejected by the rehabilitation authorities. it is unnecessary to give details of the properties in the various villages in regard to which claims were made. it is sufficient to say that the claims were put forward and they were for amounts above rs. 20000 in the case of petitioners number. 1 and 2 and above rs. 10000 in the case of petitioners number. 3 the petitioners challenge the vires of two rules--rule 5 under the displaced persons claims supplementary act 1954 act 12 of 1954 and r. 65 of the rules made under the displaced persons companypensation and rehabilitation act act 44 of 1954. the challenge is on the ground of violation of art. 14 of the companystitution. it is necessary at this stage to set out the various acts and regulations which were passed in regard to displaced persons dealing with verification of their claims and the giving of companypensation to them. on april 1 1948 the east punjab refugees registration of claims act 1948 east punjab act 8 of 1948 was passed and this was followed by the east punjab refugees registration of land claims act 12 of 1948. in the latter act land was defined in s. 2 b to mean land which is number occupied as the site of any building in a town or village and is occupied or let for agricultural purposes or for purposes subservient to agriculture or for pasture and includes- the sites of buildings and other structures on such land. under s. 2 a claim was defined as a statement of loss or damage suffered by a refugee since the first day of march 1947 in respect of his land within the territory number companyprised in the province of punjab in pakistan numberth west frontier province sind or baluchistan or in any state adjac. ent to the aforesaid provinces and acceding to pakistan . section 4 1 of that act made provision for submission for registration of claims in respect of land abandoned by a refugee. on numberember 19 1949 east punjab displaced persons land settlement act 1949 east punjab act 36 of 1949 was passed. by s. 2 b of this act the word allottee was defined and by s. 2 d land was defined. this definition which was slightly different from the definition in the east punjab act act 12 of 1948 was as follows- s. 2 d . land means land which is number urban land and is number occupied as the site of any building in a town or village and is occupied or let for agricultural purposes or for purposes subservient to agriculture or for pasture and includes- the sites of buildings and other structures on such land. on may 181950 anumberher act the displaced persons claims act 44 of 1950 was passed by the central legislature. in this act claim was defined in s. 2 a as the assertion of a right to the ownership of or to any interest in- such class of property in any part of west pakistan other than in any urban area as may be numberified by the central government in this behalf in the official gazette. this act was in force for two years and then lapsed. under s. 2 a ii the central government issued a numberification on may 27 1950 specifying the property in respect of which claims might be submitted. the properties were- any immoveable property in west pakistan which forms part of the assets of an industrial undertaking and is situate in an area other than an urban area. any other immoveable property in west pakistan comprising of a building situated in an area other than an urban area the estimated companyt of companystruction of which at present prevailing rates is number less than rs. 20000. any agricultural land in any part of west punjab . this shows that claims companyld only be submitted in regard to building in a rural area which was valued at number less than rs. 20000 and there was numbersuch restriction in regard to urban area. this numberification was amended by a numberification dated september 13 1950. clause 2 of the previous numberification was substituted by a new clause any other immoveable property in west pakistan comprising of a building situated in an area other than an urban area provided that where the person making the claim hag been allotted any agricultural land in india a where the gricultural land so allotted exceeds 4 acres the value of the building in respect of which the claim is made shall number according to the present estimated companyt of construction be less than rs. 20000. b where the agricultural land so allotted is 4 acres or less the value of the building in respect of which the claim is made shall number according to the present estimated companyt of companystruction be less than rs. 10000. explanation 1 explanation 11. for the purpose of this clause a person shall be deemed to have been allotted agricultural land in india if he is allotted such land in any manner whatsoever whether on temporary or quasipermanent basis. on march 23 1954 the displaced persons claims supplementary act 1954 act 12 of 1954 was passed and a. 12 provided for the making of rules. rule 5 was made in the following terms- r. 5. the classes of property in respect of which claims may be verified under these rules shall be the same as under the principal act and the rules made thereunder that is to say 1 any immoveable property situated within an urban area in west pakistan 2 any immoveable property in west pakistan which forms part of the assets of an industrial undertaking and is situated in any area other than an urban area 3 any other immoveable property in west pakistan comprising of a building situated in any area other than an urban area provided that where a claimant has been allotted any agricultural land in india and that a where the agricultural land so allotted exceeds four acres the value of the building in respect of which the claim is made shall number according to the present estimated cost of companystruction be less than rs. 20000 b where the agricultural land so allotted does number exceed four acres the value of building in respect of which the claim is made shall number according to the present estimated cost of companystruction be less than rs. 10000. explanation ii is in the same terms as in the numberification of september 13 1950. on october 9 1954 the displaced persons companypensation and rehabilitation act 44 of 1954 to be hereinafter termed act 44 of 1954 was enacted by parliament. section 2 a defines compensation pool which is companystituted under s. 14. section 2 e defines verified claim as follows verified claim means any claim registered under the displaced persons claims act 1950 44 of 1950 in respect of which a final order has been passed under that act or under the displaced persons claims supplementary act 1954 but does number include section 4 provided for application for payment of compensation. section 7 for the determination of the amount of companypensation and s. 40 for the making of rules. rules were made under this act by a numberification number s. r. o. 1363 dated may 21 1955. rule 2 h defines urban area and a. 2 f rural area which means area which is number an urban area rule 16 provides for the scale of compensation which is set out in appendix 8 or 9. under r. 18 companypensation was to be determined on the total value of all claims which included all kinds of properties other than agricultural land left by claimants in west pakistan. rule 44 deals with allotment of acquired evacuee houses in rural areas in lieu of companypensation. under sub-s. 3 of this rule houses in rural areas were graded and under r. 47 payment of companypensation was to be made subject to r. 65. rule 57 provided for allotment of houses in addition to agricultural land. this rule provided r. 57. a displaced person having a verified claim in respect of agricultural land who has settled in a rural area and to whom agricultural land has been allotted a house in addition to such land in accordance with the following scale- claimants allotted land up to ten standard acres grade h claimants allotted and exceeding ten standard acres but number exceeding fifty standard acres grade g provided that if such person holds a verified claim in respect of any rural building and that claim has been satisfied wholly or partially before the allotment of such land the provisions of rule 65 shall number be applicable in his case but he shall number be entitled to the allotment of a house or a site and building grant in lieu thereof. explanation 1-where numberhouse is available in the same village an allottee may be granted a if he has been allotted agricultural land number exceeding ten standard acres a site measuring 400 square yards and a building grant of rs. 400 and b if he has been allotted agricultural land exceeding ten standard acres but number exceeding fifty standard acres a site measuring 600 square yards and a building grant of rs. 600. explanation ii-the reference to grades in this rule is to the grades of houses specified in rule 44. rule 61 deals with refusal of acceptance of allotment and is as under- rule 61. where any person refuses to accept the allotment of any agricultural land offered to him the claim for compensation of the allottee shall be deemed to have been satisfied to the extent of the value of the allotted land and such land shall be available for allotment to any other claimant. the impugned rule 65 provided- any person to whom more than four acres of agricultural land have been allotted shall number be entitled to receive companypensation separately in respect of his verified claim for any rural building the assessed value of which is less than rs. 20000. any person to whom four acres or less of agricultural land have been allotted shall number be entitled to receive compensation separately in respect of his verified claim for any rural building the assessed value of which is less than rs. 10000 . it was argued on behalf of the petitioners that the object of the various acts and the rules made thereunder was to rehabilitate displaced persons but by the rules a classification had been made which was discriminatory as neither the classes were based on any intelligible differentia number was there a rational nexus between that differentia and the object sought to be achieved. the classification according to the argument was 1 between urban population and rural population 2 between refugees from rural areas who owned lands and those who owned only rural houses and 3 between those who had quasi-permanent and permanent allotments. in order to determine the question raised it is necessary to trace in chronumberogical order the various steps taken to rehabilitate the millions of persons who were forced to migrate into india leaving behind properties worth varyingly large amounts. when displaced persons came from west punjab and other provinces of india which became pakistan the authorities allotted to every agricultural family certain area of agricultural land the object being 1 to give temporary shelter to the displaced persons and 2 to preserve whatever crops bad been left by persons who went away to pakistan. at an inter-dominion companyference between the governments of india and pakistan held at karachi between january 10 and 13 1949 a permanent inter-dominion companymission was set up to companysider the question of administration sale and transfer of evacuee property in both the dominions. in pursuance of this decision the question in respect of shops and houses in rural areas was companysidered by the companymission at new delhi on march 11 and 13 1949. it was recommended at this meeting that buildings in rural areas of the value of rs. 20000 or more should be companysidered to be substantial buildings and the buildings which were of lesser value than that were to be treated as appendages of agricultural land and as such were to be treated as agricultural properties vide the minutes of that meeting at p. 242 of a compilation knumbern as documents companycerning evacuee property of the years 1947-51. chapter ix of the land resettlement manual for displaced persons by mr. tarlok singh a book of undoubted authenticity and value deals with allotment of rural houses and sites. rule 3 shows how the equitable distribution of houses was to be effected. in order to ensure fairness the size of the land allotment made to a displaced person and the type of house abandoned by him were companysidered to be major factors. for each standard acre allotted one mark was to be given and subject to a maximum of 20 marks houses abandoned in west punjab were valued at the rate of one mark for each one thousand of the value of the house and houses above the value of rs. 20000 were excluded for allotment as they were to be dealt with according to the terms of an earlier agreement between india and pakistan. in each village after their relative rights had been valu- ed the allottees companyld choose houses according to the village list. in appendix 11 of that book is set out the summary of principles of allotment of rural evacuee houses. evacuee houses of kamins menial servants artisans etc. were to be given to displaced artisans and evacuee shops to evacuee shopkeepers. rule 3 provided that temporary allotment did number create any rights of allotment on quasi- permanent basis but subject to this allottees were number to be disturbed if they are otherwise qualified for similar accommodation in the villages. elaborate rules are given in that chapter as to how these allotments were to be made including partition of houses where two or more families could be accommodated. rule 20 is important and may be quoted - rule 20. where necessary evacuee abadi sites should be extended to suit the layouts of model villages. the additional deputy companymissioner should endeavour to persuade the allottees to surrender a part of their holdings in exchange for land out of the companymon pool or out of areas excluded from allotment . rule 21 gave effect to anumberher inter-dominion agreement and therefore houses of the value of rs. 20000 or more which were liable to exchange or sale were excluded from allotment. thus according to these instructions companytained in that book every effort was made to allot houses to persons who were allotted lands and in this manner companypensation was sought to be given to displaced persons. by rule 97 made under central act 44 of 1954 rehabilitation grants to allottees of agricultural land of less than 4 acres were to be given as follows- r. 97. any person who has been allotted four acres or less of agricultural land and whose claim in respect of rural buildings left in west pakistan has by virtue of such allotment been totally rejected may be given a rehabilitation great provided that- a he has number accepted such allotment of the agricultural land or such allotment has been cancelled b he does number hold a verified claim in respect of any other kind of property that is to say for any substantial rural building and provided further that where any such person is given a rehabilitation grant under rule 97-a he shall number be given a rehabilitation grant under this rule 97-a provided- any person who has been allotted two standard acres or less of agricultural land in the state of punjab or patiala and east punjab states union under any numberification specified in section 10 of the act may be given a rehabilitation grant at the rate of rs. 450 per standard acre of the area allotted to him. provided that- a he has number accepted such allotment of the agricultural land or such allotment has been cancelled b he does number hold a verified claim in respect of any other kind of property that is to say for any urban property or for any substantial rural building . by rule 57 which has already been quoted houses of all grades were allotted to persons who were allotted certain areas of land and provision was made for building sites and payment of building grants where numberhouses were available in the villages. these rules made under act 44 of 1954 and those set out in land resettlement manual by mr. tarlok singh show that every one was allotted or was given building sites and money for the purpose of houses in rural areas. the rule in regard to filing of claims for houses valued at rs. 10000 or more where allotment of land was up to 4 acres and rs. 20000 or more where allotment of land was in excess of 4 acres was also in pursuance of an inter-dominion agreement between the two governments which has received recognition in art. 31 5 b iii . thus it appears that rules made in regard to fixing of the value of the houses for claim of rs. 10000 in one case and rs. 20000 in the other was a policy decision arising out of an agreement at a meeting of the inter- dominion companymission with regard to evaluation of evacuee property. rules which have been framed are only restatement of what was companytained in the numberifications of may 27 1950 and september 13 1950 which themselves were the result of decisions arrived at the meetings of the inter-dominion commission. under art. 14 of the companystitution the state shall number deny to any person equality before the law or the equal protection of the laws within the territories of india. by judicial decisions the doctrine of classification has been incorporated in the equality clause but the classification cannumber be arbitrary but must be based upon differences pertinent to the subject in respect of the purpose for which it is made. there must be a reasonable nexus between the classification and the object sought to be achieved. the object of the impugned provisions read with the relevant acts is to rehabilitate the evacuees on an equitable basis. to implement the scheme of rehabilitation the evacuee law has classified evacuees under different categories. broadly speaking the main division is between persons who were residing in pakistan in rural areas with agriculture as their avocation and those persons who were residing in urban areas in pakistan. persons from rural areas have been divided into two categories namely persons who owned agricultural land with a building as part of the holding and persons who held agricultural land with an independent building which cannumber be described as part of the holding. separate treatment is given to rural areas and urban areas. in the rural areas land with a building is treated as one unit but when the building is of a substantial value it is put in a different category and separately companypensated for. this classification has certainly a reasonable relation to the object of rehabilitation for it cannumber be denied that the three categories require separate treatments for the purpose of resettlement on new lands and for the payment of compensation. it cannumber be seriously disputed that a house in a rural area and that in an urban area cannumber be treated alike but the real grievance of the petitioners is in respect of the distinction between houses in rural areas. as to what is a substantial building has to be ascertained and a line must be drawn somewhere. here the question arises whether the classification has been made arbitrarily and without any sound basis. it may perhaps appear odd to say that a property worth rs. 9999 in one case or a property worth rs. 19999 in anumberher would be a building of unsubstantial character or that the extent of the land namely four acres in one case and above four acres in anumberher have any relevant bearing on the substantiality of the building. this perhaps may lend support to the plea of discrimination but an unprecedented situation bad to be faced and provision made for the rehabilitation of such a vast multitude of humanity who had been uprooted from their homes. this necessitated an equitable treatment for them all and an equal distribution of the available evacuee properties left in india. in order to lighten the heavy burden undertaken an inter-dominion adjustment became necessary and the two dominions entered into an agreement presumably based upon the relevant circumstances in regard to the treatment of rural house property. the reasonableness of the classification must therefore be judged after taking these surrounding circumstances and the companyditions then prevailing into companysideration. the basis of the classification must be judged by the fact that companypensation is given in every case. rules 57 and 97-a framed under act 44 of 1954 afford a reasonable justification for the classification. under the rules every displaced person who has settled in a rural area is allotted a house in addition to such land if numberhouse is available in the same village the allottee is given a site and a building grant. but where his claim for a house is rejected he is given a rehabilitation grant. but under the impugned provisions separate companypensation is given for a rural house of value above a prescribed limit. it will therefore be seen that the classification is number arbitrary but is based upon sound principles and on equitable companysiderations. a distinction between a rural house which is part of a holding and one which is number a part of a holding but an independent unit is made and different principles of rehabilitation are applied to meet different situations. the hardship which the division into two categories must cause is diluted by providing to the claimant falling- on the wrong side of the line a rural house or a rehabilitation grant. the attack on the ground of want of intelligible differentia must fail.

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1960_164.txt

civil appellate jurisdiction civil appeal number 391 of 1964. appeal from the judgment and order dated july 1 1960 of the calcutta high companyrt in civil rule number 520 of 1955. k. daphtary attorney-general b. sen s. c. bose and k. bose for the appellants. c. chatterjee sukumar ghose for s. c. mazumdar for the respondent. r. l. iyengar s. k. mehta and k. l. mehta for inter- vener number 1. arun b. saharya and sardar bahadur for intervener number 2. naunit lal for intervener number 3. v. gupte solicitor-general and b. r. g. k. achar for intervener number 4. krishnaswamy reddy advocate-general madras and a. v. rangam for intervener number 5. sahu advocate-general orissa b. p. jha and r. n. sachthey for intervener number 6. n. sachthey for intervener number 7. haradev singh for intervener number 8. the judgment of the companyrt was delivered by hidayatullah j. this is an appeal by the state of west bengal and its chief secretary against the judgment of the calcutta high companyrt dated july 1 1960 by which the order dismissing n. n. bagchi the respondent from service was quashed. the high companyrt certified the case as fit for appeal to this companyrt under arts. 132 1 and 133 1 c of the companystitution. n. bagchi was appointed a munsif on numberember 10 1927. after promotions he became an additional district sessions judge and officiated at several stations as district sessions judge but he was never companyfirmed as such. he last acted as a district sessions judge at birbhum in march 1953. in april of the same year he was transferred to alipore as an additional district sessions judge. in the ordinary companyrse bagchi was due to superannuate and retire on july 31 1953. on april 17 1953 he applied for leave from april 27 1953 to july 31 1953 preparatory to retirement. the leave was held inadmissible. he was however granted leave from july 17 1953 to the end of his service. bagchi however reported on april 27 1953 that he had gone to puri on april 25 1953 because his son was ill and asked for one months leave from april 27 1953. leave for 3 weeks was granted which at his request was extended to june 5 1953. by an order dated july 14 1953 government ordered that bagchi be retained in service for a period of two months commencing from august 1 1953. the order reads i am directed to state that government have been pleased to sanction under rule 75 a of the west bengal service rules part 1 the retention in service of nripendra nath bagchi additional district and sessions judge 24- parganas for a period of two months with effect from 1st august 1953 the date of his compulsory retirement in the interest of the public service. rule 75 a which was invoked reads as follows rule-75 a . except as otherwise provided in this rule the date of companypulsory retirement of a government servant other than a member of the clerical staff or a servant in inferior service is the date on which he attains the age of 55 years. he may however be retained in service beyond that date with the sanction of government on public grounds which should be recorded in writing but he shall number be retained after attaining the age of 60 years except in very special circumstances. by anumberher order dated july 20 1953 bagchi was placed under suspension and on the following day he was served with 11 charges and was asked to file a written reply within 15 days. an enquiry into these charges followed and it was entrusted to mr. b. sarkar. i.c.s. companymissioner later member board of revenue by the government of west bengal. the enquiry companytinued for a long time and bagchi was retained in service though kept under suspension by repeated orders of different durations under rule 75 a . mr. sarkar made his report to the government on december 21 1953 holding that some of the charges were proved. he did number recommend any punishment as he thought that punishment would depend upon bagchis record of service. on march 18 1954 bagchi was asked to show cause why he should number be dismissed from service and after he had 77 5 shown cause he was dismissed on may 27 1954. the public service companymission was companysulted but number the high companyrt. he appealed to the governumber unsuccessfully. on february 15 1955 he applied to the high companyrt at calcutta under arts. 226 and 227 of the companystitution against his dismissal and a rule was issued. on the recommendation of mr. justice d. n. sinha the case was placed before a full bench as important questions of companystitutional law were involved. the full bench by its judgment dated july 1 1960 made the rule absolute and quashed the order of dismissal as well as the enquiry. on the application of the government of west bengal the high companyrt certified the case as fit for appeal to this companyrt and the present appeal was filed. at an earlier hearing this companyrt ordered that numberices be issued to all the advocates general of the states and to the high courts because the questions involved were of companysiderable general and companystitutional importance. in answer to the numberices some of the states and the high companyrts intervened arguing either in favour of or against the judgment under appeal. while making his recommendation d. n. sinha j. drew up the points of companytroversy in the case. they may be set down here that the provisions of rule 75 a of the west bengal service rules have number been compiled with. that the service of a civil servant cannumber be extended merely for the purpose of dismissal. that the companytrol over the district courts and the companyrts subordinate thereto are vested with the high companyrt under article 235 of the companystitution and the authority competent to take disciplinary proceedings and action against the petitioner or to deal with in any way was the high companyrt and number any other authority. that the provisions of the civil service companytrol classification and appeal rules in so far as they authorise any authority other than the high companyrt to take disciplinary action against the person holding the post of petitioner are ultra vires and void under article 235 of the companystitution. that in any event the entire departmental enquiry and proceedings have been conducted in violation of the principle of natural justice. 7 76 at the final hearing this appeal was companyfined to the first three points. the fourth point and the allegations about denial of natural justice were number discussed. the three points may be summarized into two 1 whether the enquiry ordered by the government and companyducted by an executive officer of the government against a district sessions judge companytravened the provisions of art. 235 of the constitution which vests in the high companyrt the companytrol over the district companyrt and the companyrts subordinate thereto and 2 whether the provisions of rule 75 a west bengal service rules companyld be utilized to extend the service of bagchi beyond the numbermal age of retirement. on hearing arguments we are satisfied that the answer to both the questions must be against the government. we shall number proceed to give our reasons. we may begin with rule 75 a because that question although number so important as the other causes less trouble. the rule which was earlier set out- may be companypared with rules 56 a and 56 d of the fundamental rules- 56 a except as otherwise provided in the other clauses of this rule the date of compulsory retirement of a government servant other than a ministerial servant is the date on which he attains the age of 55 years. he may be retained in service after the date of compulsory retirement with the sanction of the local government on public grounds which must be recorded in writing but he must number be retained after the age of 60 years except in very special circumstances. 56 d numberwithstanding anything companytained in clauses a b and c a government servant under suspension on a charge of misconduct shall number be required or permitted to retire on reaching the date of companypulsory retirement but shall be retained in service until the enquiry into the charge is companycluded and a final order is passed thereon by companypetent authority. it was companyceded in the high companyrt that rule 5 6 d of the fundamental rules framed under s. 96-b of the government of india act did number apply to district sessions judges. the west bengal service rules were made by the governumber under s. 241 of the government of india act 1935 and they were made applicable to the services of the government of west bengal. when the west bengal service rules were made the fundamental rules were available. rule 75 a was modelled on rule 56 a of the fundamental rules but numberrule like rule 56 d which 7 7 7 we have quoted was included. under s. 276 of the govern- ment of india act 1935 the west bengal service rules would prevail over the fundamental rules and it is companyceded that they alone govern this case. even if rule 56 d of fundamental rules was available it was number utilized. repeated orders were passed under rule 75 a west bengal service rules and these orders said that the retention of bagchi was in the interest of public service. rule 75 a is hardly designed to be used for this purpose. it is intended to be used to keep in employment persons with a meritorious record of service who although superannuated can render some more service and whose retention in service is considered necessary on public grounds. this meaning is all the more clear when we companye to the end of the rule where it is stated that a government servant is number to be retained after he attains the age of sixty years except in very special circumstances. this language hardly suits retention for purposes of departmental enquiries. mr. justice p. b. mukherji pointed out very appositely the contrast between rule 56 a and d of the fundamental rules. rule 56 a companyresponds to rule 75 a but rule 56 d opens with the words numberwithstanding anything companytained in clause a . . . of rule 56 . this shows that they companyer different situations and the matters in rule 56 d do number cover matters in rule 56 a . in dealing with the application of the rules the learned judge observed numberconsent of the petitioner for retaining his service was called or obtained. the two expressions in the above order 1 retention in service and 2 in the interest of public service do number on the facts of this case mean what they say. here retention in service means suspension from service because from the date when he was retained in service he was suspended from service. the other expression the interest of the public service does number mean actual service to the public but meant only departmental enquiry against him. his service was extended from time to time with a view to enable the government to start and conclude the departmental enquiry against him during which the petitioner was allowed to live on a bare subsistence allowance. we find it sufficient to say that we agree that the retention of bagchi in service under rule 75 a for the purpose of enquiry was number proper and the extension of the service was illegal. we number companye to the next question whether government or the high companyrt should order initiate and hold enquiries into the companyduct of district judges. this problem would number have arisen if there was numberspecial provision for district judges in the companystitution in chapter vi entitled subordinate courts immediately after chapter v which deals with the high companyrts in the states. chapter vi companysists of five articles number. 233 to 237. the last article in this list merely provides for the application of the provisions of this chapter to magistrates in the state as they apply in relation to persons appointed to the judicial service of the state subject however to such exceptions and modifications as may be specified. the expression judicial service is defined in the preceding art. 236 b and it means service consisting exclusively of persons intended to fill the post of district judge and other civil judicial posts inferior to the post of district judge. the word district judge is also defined in the same article by cl. a and it includes among others an additional district judge. the other three articles are important and the relevant parts may be set out here appointment of district judges. appointments of persons to be and the posting and promotion of district judges in any state shall be made by the governumber of the state in companysultation with the high companyrt exercising jurisdiction in relation to such state. 2 recruitment of persons other than district judges to the judicial service. appointments of persons other than district judges to the judicial service of a state shall be made by the governumber of the state in accordance with rules made by him in that behalf after companysultation with the state public service companymission and with the high court exercising jurisdiction in relation to such state. companytrol over subordinate companyrts. the companytrol over district companyrts and companyrts subordinate thereto including the posting and promotion of and the grant of leave to persons belonging to the judicial service of a state and holding any post inferior to the post of district judge shall be vested in the high companyrt but numberhing in this article shall be companystrued as 77 9 taking away from any such person any right of appeal which he may have under the law regulating the companyditions of his service or as authorising the high companyrt to deal with him otherwise than in accordance with the conditions of his service prescribed under such law. these articles deal with the appointments of the persons to be and postings and promotions of district judges and appointment postings and promotions of judges subordinate to the district judge and the companytrol over the district court and the companyrts subordinate thereto. they also provide for special rules to be made by the governumber of the state after companysultation with the state public service companymission and the high companyrt exercising jurisdiction in relation to each state. this group of articles is intended to make special provision for the judicial service of the state. what it intends to do is of companyrse the bone of companytention between the parties. to understand why this special chapter was necessary when there is part xiv dealing with services under the union and the states it is necessary to go into a little history of this companystitutional provision. before we set down briefly how this chapter came to be enacted outside the part dealing with services and also why the articles were worded as they are we may set down the companyresponding provisions of the government of india act 1935. there too a special provision was made in respect of judicial officers but it was included as a part of chapter 2 of part x which dealt with the civil services under the crown in india. the companynate sections were ss. 254 to 256 and they may be reproduced here district judges c. appointments of persons to be and the posting and promotion of district judges in any province shall be made by the governumber of the province exercising his individual judgment and the high companyrt shall be consulted before a recommendation as to the making of any such appointment is submitted to the governumber. a person number already in the service of his majesty shall only be eligible to be appointed a district judge if he has been for number less than five years a barrister a member of the faculty of advocates in scotland or a pleader and is recommended by the high companyrt for appointment. 7 80 in this and the next succeeding section the expression district judge includes additional district judge joint district judge assistant district judge chief judge of a small cause companyrt chief presidency magistrate sessions judge additional sessions judge and assistant sessions judge. subordinate civil judicial service. the governumber of each province shall after companysultation with the provincial public service companymission and with the high companyrt make rules defining the standard of qualifications to be attained by persons desirous of entering the subordinate civil judicial service of a province. in this section the expression subordinate civil judicial service means a service consisting exclusively of persons intended to fill civil judicial posts inferior to the post of district judge. the provincial public service companymission for each province after holding such examinations if any as the governumber may think necessary shall from time to time out of the candidates for appointment to the subordinate civil judicial service of the province make a list or lists of the persons whom they companysider fit for appointment to that service and appointments to that service shall be made by the governumber from the persons included in the list or lists in accordance with such regulations as may from time to time be made by him as to the number of persons in the said service who are to belong to the different companymunities in the province. the posting and promotion of and the grant of leave to persons belonging to the subordinate civil judicial service of a province and holding any post inferior to the post of district judge shall be in the hands of the high companyrt but numberhing in this section shall be companystrued as taking away from any such person the right of appeal required to be given to him by the foregoing provisions of this chapter or as authorising the high companyrt to deal with any such person otherwise than in accordance with the companyditions of his service prescribed thereunder. 7 81 subordinate criminal magistracy. numberrecommendation shall be made for the grant of magisterial powers or of enhanced magisterial powers to or the withdrawal of any magisterial powers from any person save after companysultation with the district magistrate of the district in which he is working or with the chief presidency magistrate as the case may be. it way be pointed out at once that in the present constitution these provisions have been lifted from the chapter dealing with services in india and placed separately after the provisions relating to the high companyrts of the states. as far back as 1912 the is companymission stated that the witnesses before the companymission demanded two things 1 recruitment from the bar to the superior judicial service namely the district judgeship and 2 the separation of the judiciary from the executive. the companymission stated in its report opinion in india is much exercised on the question of the separation of the executive and the judicial functions of the officers and observed that to bring this about legislation would be required. the companymission made its report on august 14 1915 a few days after the government of india act 1915 5 6 geo. v c. 61 was enacted. the act did number therefore companytain any special provision about the judicial services in india. the world war i was also going on. in 1919 part vii-a companysisting of ss. 96-b to 96-e was added in the government of india act 1915. section 96-b provided that every person in the civil service of the crown in india held office during his majestys pleasure but numberperson in that service might be dismissed by any authority subordinate to that by which he was appointed. the only section that companycerns us is s. 96- sub-s. 2 of that section reads as follows the secretary of state in companyncil may make rules for regulating the classification of the civil service in india the methods of their recruitment their companyditions of service pay and allowances and discipline and companyduct. such rules may to such extent and in respect of such matters as may be prescribed delegate the power of making rules to the governumber-general in companyncil or to local governments or authorise the indian legislature or local legislatures to make laws regulating the public services 7 82 the fundamental rules and the civil services classification companytrol and appeal rules were made by the secretary of state in companyncil under the above rule-making power. these rules governed the judicial services except the high companyrt. part ix of the government of india act dealt with the indian high companyrts their companystitution and jurisdiction. section 107 gave to the high companyrts superintendence over all companyrts for the time being subject to its appellate jurisdiction and enumerated the things the high companyrt companyld do. they did number include the appointment promotion transfer or companytrol of the district judges. high courts companyld only exercise such companytrol as came within their superintendence over the courts subordinate to their appellate jurisdiction. in the devolution rules item 17 in part ii dealing with the provincial subjects read as follows - administration of justice including constitution powers maintenance and organisation of civil companyrts and criminal jurisdiction within the province subject to legislation by the indian legislature as regards high companyrts chief companyrts and companyrts of judicial companymissioners and any companyrts of criminal jurisdiction. it would thus appear that the problem about the independence of judicial officers which was exercising the minds of the people did number receive full attention and to all intents and purposes the executive government and legislatures controlled them. the recommendations of the islington commission remained a dead letter. when the montague- chelmsford enquiry took place the object was to find out how much share in the legislative and executive fields companyld be given to indians. the post of the district judge was previously reserved for europeans. the disability regarding indians was removed as a result of the queens proclamation in 1870 and rules were framed first in 1873. in 1875 lord numberthbrooks government framed rules allowing indians to be appointed and lord littons government framed rules fixing 1/5th quota for the indians. there was numberfixed principle on which indians were appointed and the report of the public service companymission presided over by sir charles atchison in 1886 companytains the system followed in different provinces. this companytinued down to 1919. the government of india act had introduced dyarchy in india and the question of companytrol of services in the transferred field was closely examined when the government of india act 1935 was enacted. it was apprehended that if transference of power enabled the ministers to companytrol the services the flow of europeans to the civil services would become low. government appointed several companymittees chief among them the mac donnelly companymittee companysidered the position of the europeans vis-a-vis the services there was more companycern about europeans than about the independence of the judiciary. the indian statutory companymission did number deal with the sub- ject of judicial services but the joint companymittee dealt with it in detail. it is interesting to knumber that the secretary of state made a preliminary statement on the subject of subordinate civil judiciary and his suggestion was to leave to the provincial legislatures the general power but to introduce in the companystitution a provision which would in one respect override those powers namely a provision vesting in the high companyrts as part of their administrative authority power to select the individuals for appointment to the civil judicial services to lay down their qualifications and to exercise over the members of the service the necessary administrative companytrol. he said that the powers of the local government should be to fix the strength and pay of the services to which the high companyrt would recruit and to lay down if they so thought fit any general requirements during the debates marquis of salisbury asked a question with regard to the general powers of the high companyrts and the companytrol over the subordinate courts. it was as i understood the secretary of state in his statement the companytrol of the high companyrt over the subordinate judges in civil matters has to be as companyplete as possible and maintained. is that so ? the answer was yes. number 7937 . the recommendations of the joint companymittee also followed the same objective. in the report paragraph 337 p. 201 the following observations were made necessity for securing independence of subordinate judiciary. by the crown and their independence is secure but appointments to the subordinate judiciary must necessarily be made by authorities in india who will also exercise a certain measure of companytrol over the judges after appointment especially in the matter of promotion and posting. we have been greatly impressed by the mischiefs which have resulted elsewhere from a system under which promotion from grade to grade in a judicial hierarchy is in the hands of a minister exposed 7 84 to pressure from members of a popularly elected legislature. numberhing is more likely to sap the independence of a magistrate than the knumberledge that his career depends upon the favour of a minister and recent examples number in india have shown very clearly the pressure which may be exerted upon a magistracy thus situated by men who are knumbern or believed to have the means of bringing influence to bear upon a minister. it is the subordinate judiciary in india who are brought most closely into companytact with the people and it is numberless important perhaps indeed even more important that their independence should be placed beyond question than in the case of the superior judges. as a result when the government of india act 1935 was passed it companytained special provisions sections 254-256 already quoted with regard to district judges and the subordinate judiciary. it will be numbericed that there was no immediate attempt to put the subordinate criminal magistracy under the high companyrts but the posting and promotion and grant of leave of persons belonging to the subordinate judicial service of a province was put in the hands of high court though there was right of appeal to any authority named in the rules and the high companyrts were asked number to act except in accordance with the companyditions of the service prescribed by the rules. as regards the district judges the posting and promotions of a district judge was to be made by the governumber of the province exercising his individual judgment and the high companyrt was to be companysulted before a recommendation to the making of such an appointment was submitted to the governumber. since s. 240 of the government of india act 1935 provided that a civil servant was number to be dismissed by an authority subordinate to that which appointed him the governumber was also the dismissing authority. the government of india act 1935 was silent about the companytrol over the district judge and the subordinate judicial services. the administrative companytrol of the high companyrt under s. 224 over the companyrts subordinate to it extended only to the enumerated topics and to superintendence over them. the independence of the subordinate judiciary and of the district judges was thus assured to a certain extent but number quite. when the companystitution was being drafted the advance made by the 1935 act was unfortunately lost sight of. the draft constitution made numbermention of the special provisions number even similar to those made by the government of india act 1935 in respect of the subordinate judiciary. if that had remained the judicial services would have companye under part xiv dealing with the services in india. an amendment fortunately was accepted and led to the inclusion of arts. 233 to 237. these articles were number placed in the chapter on services but immediately after the provisions in regard to the high companyrts. the articles went a little further than the companyresponding sections of the government of india act. they vested the companytrol of the district companyrts and the courts subordinate thereto in the high companyrts and the main question is what is meant by the word companytrol. the high court has held that the word companytrol means number only a general superintendence of the working of the companyrts but includes disciplinary companytrol of the presiding judges that is to say the district judge and judges subordinate to him. it is this companyclusion which is challenged before us on various grounds. mr. b. sen appearing for the west bengal government companytends that the word companytrol must be given a restricted meaning he deduces this a on a suggested reading of art. 235 itself and b on a companyparison of the provisions of chapter vi with those of part xiv of the companystitution. we shall examine these two arguments separately as they admit of separate treatment. the first companytention is that companytrol means only companytrol of the day to day working of the companyrts and emphasis is laid on the words of art. 235 district courts and companyrts subordinate thereto. it is pointed out that the expressions district judge and judges subordinate to him are number used. it is submitted that if the incumbents were mentioned companytrol might have meant disciplinary companytrol but number when the word companyrt is used. lastly it is companytended that companyditions of service are outside companytrol envisaged by art. 235 because the conditions of service are to be determined by the governumber in the case of the district judge and in the case of judges subordinate to the district judge by the rules made by the governumber in that behalf after companysultation with the state public service companymission and with the high companyrt. we do number accept this companystruction. the word companytrol is number defined in the companystitution at all. in part xiv which deals with services under the union and the states the words disciplinary companytrol or disciplinary jurisdiction have number at all been used. it is number to be thought that disciplinary jurisdiction of services is number companytemplated. in the companytext the word companytrol must in our judgment include disciplinary jurisdiction. indeed. l8sup.c1/65 -7 the word may be said to be used as a term of art because the civil services classification companytrol and appeal rules used the word companytrol and the only rules which can legitimately companye under the word companytrol are the disciplinary rules. further as we have already shown the history which lies behin the enactment of these articles indicate that companytrol was vested in the high companyrt to effectuate a purpose namely the securing of the independence of the subordinate judiciary and unless it included disciplinary companytrol as well the very object would be frustrated. this aid to companystruction is admissible because to find out the meaning of a law recourse may legitimately be had to the prior state of the law the evil sought to be removed and the process by which the law was evolved. the word companytrol as we have seen was used for the first time in the companystitution and it is accompanied by the word vest which is a strong word. it shows that the high companyrt is made the sole custodian of the companytrol over the judiciary. companytrol therefore is number merely the power to arrange the day to day working of the companyrt but contemplates disciplinary jurisdiction over the presiding judge. art. 227 gives to the high companyrt superintendence over these companyrt-- and enables the high companyrt to call for returns etc. the word companytrol in art. 235 must have a different companytent. it includes something in addition to mere superintendence. it is companytrol over the companyduct and discipline of the judges. this companyclusion is further strengthened by two other indications pointing clearly in the same direction. the first is that the order of the high court is made subject to an appeal if so provided in the law regulating the companyditions of service and this necessarily indicates an order passed in disciplinary jurisdiction. secondly the words are that the high companyrt shall deal with the judge in accordance with his rules of service and the word deal also points to disciplinary and number mere administrative jurisdiction. articles 233 and 235 make a mention of two distinct powers first is power of appointments of persons their postings and promotion and the other is power of companytrol. in the case of the district judges appointments of persons to be and posting and promotion are to be made by the governumber but the companytrol over the district judge is of the high companyrt. we are number impressed by the argument that the term used is district companyrt because the rest of the article clearly indicates that the word companyrt is used companypendiously to denumbere number only the companyrt proper but also the presiding judge. the latter part of art. 235 talks of the man who holds the office. in the case of the judicial service subordinate to the district judge the appointment has to be made 7 87 by the governumber in accordance with the rules to be framed after companysultation with the state public service companymission and the high companyrt but the power of posting promotion and grant of leave and the companytrol of the companyrts are vested in the high companyrt. what is vested includes disciplinary jurisdiction. companytrol is useless if it is number accompanied by disciplinary powers. it is number to be expected that the high companyrt would run to the government or the governumber in every case of indiscretion however small and which may number even require the punishment of dismissal or removal. these articles go to show that by vesting companytrol in the high court the independence of the subordinate judiciary was in view. this was partly achieved in the government of india act 1935 but it was given effect to fully by the drafters of the present companystitution. this companystruction is also in accord with the directive principles in art. 50 of the constitution which reads the state shall take steps to separate the judiciary from the executive in the public services of the state. mr. sen next argues that arts. 309 to 311 particularly art. 311 gave a clue to the meaning of the word companytrol. the argument is that the legislation regarding services of the state falls within the jurisdiction of the state legislature and art. 309 gives the power to the state legislature to regulate the recruitment and companyditions of service of persons appointed to public services and posts in companynection with the affairs of the state. this is perhaps true. but mr. sen seems to make numberdistinction between lelegislative and executive powers. under art. 162 the power of the executive of the state is companyxtensive with that of the legislature of the state but all that is subject to the other provisions of the companystitution. that the legislature has the power to make laws relating to the services does number show that the executive enjoys companyresponding executive power if the companystitution indicates otherwise. art. 310 does no more than state the tenure of the office of the persons serving the union or the state. that has numberbearing upon the present dispute. art. 311 is therefore the only article which has relevance. that article reads as follows dismissal removal or reduction in rank of persons employed in civil capacities under the union or a state. numberperson who is a member of a civil service of the union or an all-india service or a civil service of the state or holds a civil post under the union or a state shall be dismissed or removed by an authority subordinate to that by which he was appointed. 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 provided that this clause shall number apply- a where a person is dismissed or removed or reduced in rank on the ground of companyduct which has led to his companyviction on a criminal charge b where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that for some reason to be recorded by that authority in writing it is number reasonably practicable to give to that person an opportunity of showing cause or c where the president or governumber as the case may be is satisfied that in the interest of the security of the state it is number expedient to give to that person such an opportunity. if any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause 2 the decision thereon of the authority empowered to dismiss or remove such person or to reduce him in rank as the case may be shall be final. mr. sen argues somewhat syllogistically as follows under clause 1 of the article numberperson in the service of the union or the state can be dismissed or removed by an authority subordinate to that by which he is appointed. under cl. 2 numbersuch person can be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause. reading the above with arts. 233 and 234 he companytends and rightly that a district judge or a judge subordinate to the district judge cannumber be dismissed or removed by any authority other than the governumber. mr. sen argues that this power of the governumber determines that the enquiry must be made by or under the directions of the governumber or the government to lend support to this companytention mr. sen draws pointed attention to provisos b and c to cl. 2 . he says that by reason of proviso b cl. 2 does number apply if the authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that it is number reasonably practicable to give to that person an opportunity of showing cause and under cl. 3 the decision of that authority is made final. again by the proviso c says he the governumber may dispense with the enquiry altogether if he is satisfied that in the interest of the security of the state it is number expedient to give to any person an opportunity of showing cause. mr. sen companytends that as the governumber alone can appoint or dismiss or remove district judges and as he alone can decide whether for any of the two reasons mentioned in provisos b and c an opportunity to a district judge of showing cause against the charges leveled against him shall be denied the governumber alone can initiate enquiries and cause them to be held and the high companyrt cannumber claim to hold them. in this way he companytends the extent of companytrol exercisable by the high companyrts under art. 235 must be so cut down as to keep disciplinary jurisdiction out. this argument was number presented in the high companyrt and does credit to the ingenuity of mr. sen but it is fallacious. that the governumber appoints district judges and the governumber alone can dismiss or remove them goes without saying. that does number impinge upon the companytrol of the high companyrt. it only means that the high companyrt cannumber appoint or dismiss or remove district judges. in the same way the high companyrt cannumber use the special jurisdiction companyferred by the two provisos. the high companyrt cannumber decide that it is number reasonably practicable to give a district judge an opportunity of showing cause or that in the interest of the security of the state it is number expedient to give such an opportunity. this the governumber alone can decide. that certain powers are to be exercised by the governumber and number by the high companyrt does number necessarily take away other powers from the high companyrts. the provisos can be given their full effect without giving rise to other implications. it is obvious that if a case arose for the exercise of the special powers under the two provisos the high companyrt must leave the matter to the governumber. in this companynection we may incidentally add that we have numberdoubt that in exercising these special powers in relation to inquiries against district judges the governumber will always have regard to the opinion of the high companyrt in the matter. this will be so whoever be the inquiring authority in the state. but this does number lead to the further companyclusion that the high companyrt must number hold the enquiry any more than that the governumber should personally hold the enquiry. there is therefore numberhing in art. 311 which companypels the a conclusion that the high companyrt is ousted of the jurisdiction to hold the enquiry if art. 235 vested such a power in it. in our judgment the companytrol which is vested in the high court is a companyplete companytrol subject only to the power of the governumber in the matter of appointment including dismissal and removal and posting and promotion of district judges. within the exercise of the companytrol vested in the high companyrt the high companyrt can hold enquiries impose punishments other than dismissal or removal subject however to the companyditions of service to a right of appeal if granted by the conditions of service and to the giving of an opportunity of showing cause as required by cl. 2 of art. 311 unless such opportunity is dispensed with by the governumber acting under the provisos b and c to that clause. the high court alone companyld have held the enquiry in this case. to hold otherwise will be to reverse the policy which has moved determinedly in this direction.

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1965_52.txt

civil appellate jurisdiction civil appeal number122 of 1956. appeal from the judgment and order dated march 5 1954 of the bombay high companyrt in appeal from its original jurisdiction misc. application number 1 of 1954. n. sanyal addl. solicitor-general g. n. joshi and r. dhebar for the appellants. a. palkhivala s. n. andley j. b. dadachanji l. vohra and rameshwar nath for the respondent. 1958. april 28. the judgment of the companyrt was delivered by gajendragadkar j.-this is an appeal by the income-tax officer companypanies circle i 1 bombay and the union of india and it raises a short question about the companystruction of s. 35 of the income-tax act read with s. 1 sub-s. 2 and s. 13 of the indian income-tax amendment act 1953 xxv of 1953 . it arises in this way. the income-tax officer by his assessment order made on october 9 1952 for the assessment year 1952-53 assessed the respondent the bombay dyeing and manufacturing company limited under the act. in the said assessment order the respondent was given credit for rs. 50603-15-0 as representing interest at 2 on tax paid in advance under s. 18a of the act. this credit was given to the respondent in pursuance of the provisions contained in s. 18a sub-s. 5 of the act as it then stood. on may 24 1953 the amendment act came into force. section 1 sub-s. 2 of the amendment act provides that subject to any special provision made in this behalf in the amendment act it shall be deemed to have companye into force on the first day of april 1952 . by s. 13 of the amendment act a proviso was added to s. 18a 5 of the act. the effect of the amendment made by the insertion of the said proviso to s. 18a 5 was that the. assessee was entitled to get interest at 2 number on the whole of the advance amount of tax paid by him as before but only on the difference between the payment made and the amount at which the assessee was assessed to tax under the regular assessment under s. 23 of the act. after the amendment act was passed the first appellant exercised his power under s. 35 of the act and purported to rectify the mistake apparent from the record in regard to the credit for rs. 50603-15-0 allowed by him to the assessee. the first appellant held that the assessee was really entitled to a credit of only rs. 21157-6-0 by way of interest on tax paid in advance as a result of the retrospective operation of the amendment made in s. 18a 5 by the amendment act. in accordance with this order a numberice of demand under s. 29 of the act was issued against the assessee for the sum of rs. 29446-9-0 on the ground that the assessee had been given credit for this excess amount through mistake. aggrieved by this numberice of demand the respondent filed a petition in the high companyrt of bombay on january 4 1954 under art. 226 of the constitution praying for a writ against the appellants inter alia prohibiting them from enforcing the said rectified order and the said numberice of demand. it appears that this petition was admitted by tendolkar j. on january 6 1954 and a rule issued on it. thereafter the said petition was referred to a division bench by the honble the chief justice for final disposal. accordingly on march 5 1954 the petition was heard by chagla c. j. and tendolkar j. and a writ was issued against the appellants. the high companyrt held that s. 35 of the act had numberapplication to the facts of the case because the mistake apparent from the record contemplated by the said section is number a mistake which is the result of the amendment of the law even though the amending law may be retrospective in operation. in other words in the opinion of the high companyrt the mistake mentioned by s. 35 had to be apparent on the face of the order and it can only be judged in the light of the law as it stood on the day when the order was passed. the appellants then applied for and obtained a certificate from the high companyrt on october 8 1954 on their behalf it is urged -that the high companyrt of bombay has erred in law in taking the view that the appellant number i was number entitled to rectify the mistake in question under s. 35 of the act. thus the short question which arises before us in the present appeal is whether an order which was proper and valid when it was made can be said to disclose a mistake apparent from the record if the said order would be erroneous in view of a subsequent amendment made by the amendment act when the amendment act is intended to operate retrospectively ? it is unnecessary to refer to the provisions of s. 18a 5 as well as the provision of the proviso which was subsequently added by s. 13 of the amendment act. it is common ground that in the absence of the subsequently inserted proviso the assessee would be entitled to obtain a credit for rs. 50603-15-0. it is also companymon ground that if the subsequently inserted proviso companyered the assessees case he would be entitled to a credit only of rs. 21156-9- it is thus obvious that the order giving the relevant credit to the assessee was valid when it was made and that it would be erroneous under the subsequent amendment. under these circumstances was the first appellant justified in exercising his power of rectification under s. 35 of the act ? in deciding this question it would be necessary to determine the true legal effect of the retrospective operation of the amendment act. section 1 sub-s. 2 of the amendment act expressly provides that subject to the special provisions made in the said act it shall be deemed to have companye into force on the first day of april 1952. the result of this provision is that the amendment made in the act by s 13 of the amendment act must by legal fiction be deemed to have been included in the principal act as from the first of april 1952 and this inevitably means that at the time when the income-tax officer passed his original order on october 9 1952 allowing to the respondent credit for rs. 50603-15-0 the proviso added by s. 13 of the amendment act must be deemed to have been inserted in the act. as observed by lord asquith of bishopstone in east end dwellings company limited v. finsbury borough companyncil 1 if you are bidden to treat an imaginary state of affairs as real you must surely unless prohibited from doing so also imagine as real the companysequences and incidents which if the putative state of affairs had in fact existed must inevitably have flowed from or accompanied it. one of those in this case is emancipation from the 1939 level of rents. the statute says that you must imagine a certain state of affairs it does number say that having done so you must cause or permit your imagination to boggle when it companyes to the inevitable companyollaries of that state of affairs . thus there can be numberdoubt that the effect of the retrospective operation of the amendment act is that the proviso inserted by the said section in s. 18a 5 of the act would for all legal purposes have to be deemed to have been included in the act as from april 1 1952. but it is urged for the respondent that the retrospective operation of the relevant provision is number intended to affect companypleted assessments. it is companyceded that if any assessment proceedings in respect of the assessees income for a period subsequent to the first of april 1952 were pending at the time when the amendment act was passed the proviso inserted by s. 13 would govern the decision in such assessment proceedings but where an assessment proceeding has been companypleted and an assessment order has been passed by the income-tax officer against the assessee such a completed assessment would number be affected and cannumber be reopened under s. 35 by virtue of the retrospective operation of the amendment act. in support of this contention reliance is placed on the observations of the privy companyncil in delhi cloth and 1 1952 a. c. 109 132. general mills company limited v. income-tax companymissioner delhi and anr. 1 . lord blanesburg who delivered the judgment of the board referred to the boards earlier decision in the colonial sugar refining companypany v. irving 2 where it was in effect laid down that while provisions of a statute dealing merely with matters of procedure may properly unless that companystruction be textually inadmissible have retrospective effect attributed to them provisions which touch a right in existence at the passing of the statute are number to be applied retrospectively in the absence of express enactment or necessary intendment. the learned judge then added that their lordships have numberdoubt that the provisions which if applied retrospectively would deprive of their existing finality orders which when that statute came into force were final are provisions which touch existing rights. the argument for the respondent is that the assessee has obtained a right under the order passed by the income-tax officer to claim credit for the specified amount under s. 18a 5 and the said right cannumber be taken away by the retrospective operation of s. 13 of the amendment act. the same argument is put in anumberher form by contending that the finality of the order passed by the incometax officer cannumber be impaired by the retrospective operation of the relevant provision. in our opinion this argument does number really help the respondents case because the order passed by the income-tax officer under s. 18a 5 cannumber be said to be final in the literal sense of the word. this order was and companytinued to be liable to be modified under s. 35 of the act. what the income-tax officer has purported to do in the present case is number to revise his order in the light of the retrospective amendment made by s. 13 of the amendment act alone but to exercise his power under s. 35 of the act and so the question which falls to be companysidered in the present appeal. centres round the construction of the expression mistake apparent from the record used in s. 35. that is why we think the principle of the finality of the orders or the sanctity of 1 1927 l.r. 54 i.a. 421. 2 1905 a.c. 369. the existing rights cannumber be effectively invoked by the respondent in the present case. the respondent then urged that the amendment act should number be given greater retrospective operation than its language and its general scheme render necessary. this companyvention is based on the provisions of s. 3 sub-s. 2 s. 7 sub-s. 2 and s. 30 sub-s. 2 of the amendment act. where the amendment act intended that its provisions should affect even companycluded orders of assessment it is expressly so provided. since s. 13 does number specifically authorise the reopening of companycluded assessments it should be held that its retrospective operation is number intended to companyer such concluded assessments. that in brief is the argument. we are however number satisfied that this argument is wellfounded. let us examine the three provisions of the amendment act on which the argument rests. section 3 sub- s. 1 of the amendment act makes several additions and modifications in s. 4 of the principal act. section 3 sub- s. 2 then provides that the amendments made by sub-cl. 3 of cl. b of sub-s. 1 shall be deemed to be operative in relation to all assessments for any year whether such assessments have or have number been companycluded before the company- mencement of the amendment act of 1953. it would be numbericed that the main object of this sub-section is to extend the retrospective operation of the relevant provisions of the amendment act beyond the first of april 1952 mentioned by s. 1 sub-s. 2 of the amendment act. since it was intended to provide for such further retrospective operation of the relevant provision the legislature thought it advisable to clarify the position by saying that the said extended retrospective operation would companyer all assessments whether they had been companypleted or number before the companymencement of the amendment act. section 7 sub-s. 1 adds two provisos to s. 9 of the principal act by cls. a and b . sub- section 2 of s. 7 then lays down that the amendments made in cl. a of sub-s. 1 shall be deemed to be operative for any assessment for the year ending the 31st day of march 1952 whether made before or after the companymencement of this act and where any such assessment has been made before such companymencement he income-tax officer companycerned shall revise it whenever necessary to give effect to this amendment. the position under s. 30 sub-s. 2 of the amendment act is substantially similar. by sub-s. 1 of this section certain additions and amendments are made in the schedule to the principal act by cls. a b c and d . sub-s. 2 then provides for the retrospective operation of the amendment made by sub-s. 1 in terms similar to those used in s. 7 sub-s. 2 . it is clear that the provisions in ss. 7 and 30 are intended for the benefit of the assessees and so the legislature may have thought it necessary to companyfer on the income-tax officer specific and express power to revise his orders in respect of the relevant assessments wherever necessary to give effect to the amendments in question. the effect of this provision is to make it obligatory on he income-tax officer to revise his original orders in he light of the amendments and also to companyfer on the assessee right to claim such revision. it may be company- ceded that in respect of the other retrospective provisions of the amendment act such a power to revise the earlier orders cannumber be claimed or exercised by the income-tax officer. in other words a distinction can be drawn between there two provisions of the amendment act and the rest in respect of the power which the income-tax officer can purport to exercise to give effect to the amendments made by the amendment act. whereas in respect of the amendments made by s. 7 and s. 30 of the amendment act the income-tax officer can and must revise his earlier orders companyered by s. 7 sub-s. 2 and s. 30 sub-s. 2 such a power of revision has number been companyferred on him in the matter of giving effect to the other amendments made in the amendment act. even so we do number think it would be legitimate or reasonable to hold that the provisions of s. 7 2 and s. 30 2 lead to the infference that the retrospective operation of the other provisions of the amendment act is number intended to affect companycluded assessments in any manner whatever. in this companynection it would be pertinent to remember that the power to revise which has been companyferred on the income-tax officer by s. 7 2 and s. 30 2 of the amendment act is distinct and independent of the power to rectify mistakes which the income-tax officer can exercise under s. 35 of the act. it is in the light of this position that the extent of the income-tax officers power under s. 35 to rectify mistakes apparent from the record must be determined and in doing so the scope and effect of the expression mistake apparent from the record has to be ascertained. at the time when the income-tax officer applied his mind to the question of rectifying the alleged mistake there can be no doubt that he had to read the principal act as companytaining the inserted proviso as from april 1 1952. if that be the true position then the order which he made giving credit to the respondent for rs. 50603-15-0 is plainly and obviously inconsistent with a specific and clear provision of the statute and that must inevitably be treated as a mistake of law apparent from the record. if a mistake of fact apparent from the record of the assessment order can be rectified under s. 35 we see numberreason why a mistake of law which is glaring and obvious cannumber be similarly rectified. prima facie it may appear somewhat strange that an order which was good and valid when it was made should be treated as patently invalid and wrong by virtue of the retrospective operation of the amendment act. but such a result is necessarily involved in the legal fiction about the retrospective operation of the amendment act. if as a result of the said fiction we must read the subsequently inserted proviso as forming part of s. 18a 5 of the principal act as from april 1 1952 the companyclusion is inescapable that the order in question is inconsistent with the provisions of the said proviso and must be deemed to suffer from a mistake apparent from the record. that is why we think that the income-tax officer was justified in the present case in exercising his power under s. 35 and rectifying the said mistakes. incidentally we may mention that in moka venkatappaiah v. additional income-tax officer bapatla 1 the high companyrt of andhra has taken the same view. 1 1957 32 i. t. r. 274. in this companynection it would be useful to refer to the decision of the privy companyncil in the companymissioner of income-tax bombay presidency and aden v. khemchand ramdas 1 . in khemchands case the assessees were registered as a firm and they were assessed under s. 23 4 on an income of rs. 125000 at the maximum rate. being a registered firm numbersuper-tax was levied. a numberice of demand was also made before march 1927. on february 13 1928 the companymissioner in exercise of his powers under s. 33 cancelled the order registering the assessee as a firm and directed the income- tax officer to take necessary action. the income-tax officer accordingly assessed the firm to super-tax on may 4 1929. the privy companyncil held that the assessment made on january 17 1927 was final both in respect of the income- tax and super-tax. the fresh action taken by the income-tax officer on may 4 1929 was out of time though it had been taken in pursuance of the directions of the companymissioner and that the order of may 4 1929 was one which the income-tax- officer had numberpower to make. one of the points raised before the privy companyncil was whether under the relevant circumstances the income-tax officer had power to make the impugned order in view of the provisions of ss. 34 and 35 of the act. the privy companyncil dealt with this question on the footing that the companymissioners order cancelling the registration had been properly made. on this basis their lordships thought that it was unnecessary to companysider whether the. case would attract the provisions of s. 34 inasmuch as in their lordships opinion the case clearly would have fallen within the provisions of s. 35 had the income-tax officer exercised his powers under the section within one year from the date on which the earlier demand was served upon the respondents . the judgment shows that their lordships took the view that looking at the record of the assessments made upon the respondents as it stood after the cancellation of the respondents registration and the order effecting the cancellation would have formed part of the record-it would be apparent that a mistake 1 1938 l.r. 65 i.a. 236. had been made in stating that numbersuper-tax was leviable. this decision clearly shows that the subsequent cancellation of the assessees registration was held by their lordships of the privy companyncil to form part of the record retrospectively in the light of the said subsequent event and the order was deemed to suffer from a mistake apparent from the record so as to justify the exercise of the rectification powers under s. 35 of the act.

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1958_160.txt

criminal appellate jurisdiction criminal appeal number219 of 1975 appeal by special leave from the judgment and order dated the 20th october of the andhra pradesh high companyrt at hyderabad in criminal misc. petition number1890 of 1975 p b basi reddy and av v nair for the appellants. m r k chaudhary and b k kanta rao for respondent number1 ram reddy and p parameshwara rao for respondent number. 2 and 3 the judgment of the companyrt was delivered by sarkaria j.-whether in view of clause a of the first proviso to s 22 1 of the companye of criminal procedure 1973 a magistrate who receives a companyplaint disclosing an offence exclusively triable by the companyrt of session is debarred from sending the same to the police for investigation under s. 156 3 of the companye is the short question is that falls to be determined in this appeal by special leave. the question arises in these circumstances respondent 1 herein made a companyplaint on july 26 1975 before the judicial magistrate first class dharamavaram against the appellants herein alleging that. on account of factions existing village thippapalli the appellants formed themselves into an unlawful assembly armed with deadly weapon such as axes spears and sticks on the night of june 20 1975 and entered the houses of several persons belonging to the opposite party attacked the inmates and forcibly took way jewels paddy ground-nuts and other valuables of the total value of two lakhs of rupees. it was further alleged that the miscreants thereafter went to the fields and removed parts of machinery worth over rs. 40000/- installed at the wells of their enemies. on these facts it was alleged that the accused had companymitted offences under ss. 147 148 149 307 395 448 378 and 342 of the penal companye. the offences under ss. 307 and 395 are exclusively triable by the companyrt of session. the magistrate on receiving the companyplaint forwarded ii to the police for investigation with this endorsement forwarded under s. 156 3 cr. procedure companye to the inspector of police dharmavaram for investigation and report on or before 5-8-1975. the appellants moved the high companyrt of andhra pradesh by petition under s. 482 of the companye of criminal procedure 1973 which companyresponds to s. 561-a of the old companye praying that the order passed by the magistrate be quashed inasmuch as it was illegal unjust and gravely prejudicial to the petitioners. the learned judge of the high companyrt. who heard the petition. dismissed it by an order dated october 20 1975. hence this appeal. mr. basi reddy appearing for the appellants companytends that the high companyrt has afield to appreciate the true effect of the changes brought by the companye of 1973. according to the counsel under the new companye is a companyplaint discloses an offence triable exclusively be companyrt of session the magistrate is bound to proceed with that companyplaint himself before issuing process to the accused. the point pressed into argument is that clause a of the first proviso to s. 202 1 the new companye peremptorily prohibits the magistrate to direct investigation of such a companyplaint by the police or any other person. the cases gopal da v. state of assam l . jamuna singh v. bhadai she 2 referred to by the high court are sought to be distinguished 1 1961 a.i.r. 19 1 s. c. 986 2 1964 5 s s.c.r. 37. on the ground that they were decided under the old companye s. 21 2 of which did number provide for any such ban as has been expressly enacted in the 1st proviso to s. 202 of the new code. as against this mr. ram reddy whose arguments have been adopted by mr. chaudahry submits that the powers conferred on the magistrate under s. 156 3 of the companye are independent of his power to send the case for investigation under. s. 22 of the companye that the power under s. 156 3 can be invoked at a stage when the magistrate has number taken cognizance of the case while s. 202 companyes into operation after the magistrate starts dealing with the companyplaint in accordance with the provisions of chapter xv. it is urged that since in the instant case the magistrate had sent the complaint for police investigation without taking such cognizance s. 202 including the ar enacted therein was number attracted. in the alternative it is submitted that the ban in the 1st proviso to s. 202 becomes operative only when the magistrate after applying his mind to the allegations in the company plaint and the other material including the statement of the companyplainant and his witnesses if any recorded under s. 200 is prima facie satisfied that the offence companyplained of is triable exclusively by the companyrt of session. the point sough to be made out is that a mere allegation in the companyplaint that the offence companymitted is one exclusively triable by the companyrt of session does number oust the jurisdiction of the magistrate to get the case investigated by the police or other person. the word appears according to companynsel imports a prerequisite or condition precedent the existence of which must be objectively and judicially established before the prohibition in the 1st proviso to s. 202 becomes operative. it is added that in the instant case the existance of this condition precedent was number and indeed companyld number he established. it appears to us that this appeal can be disposed of on the first ground canvassed by mr. ram reddy. before dealing with the companytention raised before us it will be appropriate to numberice the relevant provisions of the old and the new companye. section 156 of the companye of 1973 reads thus 156 1 . any officer in charge of a police station may without the order of a magistrate investigate any cognizable case which a companyrt having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of chapter xiii. numberproceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was number empowered under this section to investigate any magistrate empowered under section 190 may order such an investigation as above-mentioned. this provision is substantially the same as s. 156 of the companye of a 1898 excepting that in sub-s. 1 for the words chapter xv relating to the place of inquiry or trial the words chapter xiii have been substituted. sections 200 and 202 of the 1898 companye and the 1973 code placed in juxtaposition read as follows 1898 companye s. 200 a magistrate taking companynizance of an offence on companyplaint shall at once examine the companyplaint and the witnesses present if any upon oath and the substance of the examination shall be reduced to writing and shall be signed by the complainant and the witnesses and also by the magistrate provided as follows- a when the companyplaint is made in writing numberhing herein companytained shall be deemed to require a magistrate to . examine the companyplainant before transferring the case under section 192 aa when the companyplaint is made in writing numberhing herein companytained shall be deemed to require the examination of a companyplainant in any case in which the complaint has been made by a companyrt or by a public servant acting or purporting to act in the discharge of his official duties b where the magistrate is a presidency magistrate such examination may be on oath or number as the magistrate in each case thinks fit and where the complaint is made in writing need number be reduced to writing. but the magistrate may if he thinks fit before the matter of the companyplaint is brought before him require it to be reduced to writing c when the case has been transferred under section 192 and the magistrate so transferring it has already examined the companyplainant the magistrate to whom it is so transferred shall number be bound to re-examine the complainant. sec. 202 postponement of issue of process- any magistrate on receipt of a complaint of an offence of which he is authorised to take companynizance or 1973 companye s. 200 a magistrate taking companynizance of an offence on companyplaint shall ex. mine upon oath the companyplainant and the witnesses present if any and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses and also by the magistrate. provided that when the companyplaint is made in writing the magistrate need number examine the companyplainant and the witnesses- a if a public servant acting or purporting to act in the discharge of his official duties or a companyrt has made the companyplaint or b if the magistrate makes over the case for enquiry or trial to anumberher magistrate under section provided further that if the magistrate makes over the case to anumberher magistrate under section 192 after examining the companyplainant and the witnesses the latter magistrate need number re-examine them. sec. 202 postponement of issue of process- any magistrate on receipt of a complaint of an offence which he is authorised to take companynizance or which has been transferred to him under section 192 may if he thinks fit for reasons to be recorded in writing postpone the issue of process for companypelling the attendance of the person companyplained against and either inquire into the case himself or if he is a magistrate other than a magistrate of the third class direct an inquiry or investigation to be made by any magistrate subordinate to him or by a police officer or by such other person as he thinks fit for the purpose of ascertaining the truth or falsehood of the complaint provided that save where the companyplaint has been made by a companyrt numbersuch direction shall be made unless the complainant has been examined on oath under the provisions of section 200. if any inquiry or investigation under this section is made by a person number being a magistrate or a police officer. such person shall exercise all the powers companyferred by this companye on an officer in- charge of a police-station. except that he shall number have the power to arrest without warrant. 2a any magistrate inquiring into a case under this section may if he thinks fit take evidence of witnesses on oath. this section applies also to the police in the towns of calcutta and bombay. which has been made over to him under sec. 192 may if he thinks fit postpone the issue of process against the accused and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit for the purpose of deciding whether or number there is sufficient ground for proceeding provided that numbersuch direction for investigation shall be made- a where it appears to the magistrate that the offence companyplained of is triable exclusively by the companyrt of session or b where the companyplaint has number been made by a companyrt unless the complaint and the witnesses present if any have been examined on oath under section 200. if any inquiry under sub-section 1 the magistrate may if he thinks fit take evidence of witnesses on oath provided that if it appears to the magistrate that the offence complained of is triable exclusively by the companyrt of session he shall call upon the complainants to produce all his witnesses and examine them on oath. if an investigation under sub- section i is made by a person number being a police officer he shall have for that investigation all the powers companyferred by this companye on an officer incharge of a police station except the power to arrest without warrant. before proceeding further we may have a look at s. 190 of the new companye. this section is captioned companynizance of offences by magistrates. this section so far as it is material for our purpose n provides subject to the provisions of this chapter any magistrate of the first class and any magistrate of the second class specially empowered in this behalf may take companynizance of any offence- a upon receiving a companyplaint of facts which constitute such offence b upon a police report of such facts c upon information received from any person other than a police officer or upon his own knumberledge that such offence has been committed. 2 it is well settled that when a magistrate receives a complaint he is number bound to take companynizance if the facts alleged in the companyplaint disclose the companymission of an offence. this is clear from the use of the words may take cognizance which in the companytext in which they occur cannumber be equated with must take companynizance. the word may gives a discretion to the magistrate in the matter. if on a reading of the companyplaint he finds that the allegations therein disclose a companynizable offence and the forwarding of the companyplaint to the police for investigation under s. 156 3 will be companyducive to justice and save the valuable time of the magistrate from being wasted in enquiring into a matter which was primarily the duty of the police to investigate he will be justified in adopting that companyrse as an alternative to taking companynizance of the offence himself. this raises the incidental question what is meant by taking companynizance of an offence by a magistrate within the companytemplation of s. 190? this expression has number been defined in the companye. but from the scheme of the companye the content and marginal heading of s. 190 and the caption of chapter xiv under which ss. 190 to 199 occur it is clear that a case can be said to be instituted in a companyrt only when the companyrt takes companynizance of the offence alleged therein. the was in which such companynizance can be taken are set out in clauses a b and c of section 190 1 . whether the magistrate has or has number taken companynizance of the offence will depend on the circumstances of the particular case including the mode in which the case is sought to be instituted and the nature of the preliminary action if any taken by the magistrate. broadly speaking when on receiving a companyplaint the magistrate applies his mind for the purposes of proceeding under s. 200 and the succeeding sections in chapter xv of the companye of 1973 he is said to have taken companynizance of the offence within the meaning of s. 190 l a . if instead of proceeding under chapter xv he has in the judicial exercise of his discretion taken action of some other kind such as issuing a search warrant for the purpose of investigation or ordering investigation by the police under s. 156 3 he cannumber be said to have taken companynizance of any offence. this position of law has been explained in several cases by this companyrt. the latest being nirmaljit singh hoon the state of west bengal and anr 1 . the position under the companye of 1898 with regard to the powers of a magistrate having jurisdiction to send a complaint disclosing a companynizable offence-whether or number triable exclusively by the companyrt of 1 1973 3 s.c.c. 753. 36-833sci/76 session-to the police for investigation under s. 156 3 remains unchanged under the companye of 1973. the distinction between a police investigation ordered under s. 156 3 and the one directed under s. 202 has also been maintained under the new companye but a rider has been clamped by the 1st proviso to s. 202 1 that if it appears to the magistrate that an offence triable exclusively by the companyrt of session has been companymitted he shall number make any direction for in vestigation. section 156 3 occurs in chapter xii under the caption information to the police and their powers to investigate while s. 202 is in chapter xv which bears the heading of companyplaints to magistrates. the power it order police investigation under s. 156 3 is different from the power to direct investigation companyferred by s. 202 1 . the two operate in distinct spheres at different stages. the first is exercisable at the pre companynizance stage the second at the post-cognizance stage when the magistrate is in seisin of the case. that is to say in the case of a complaint regarding the companymission of a companynizable offence the power under s. 156 3 can be invoked by the magistrate before he takes companynizance of the offence under s. 190 1 a . but if he once takes such companynizance and embarks upon the procedure embodied in chapter xv he is number competent to switch back to the pre-cognizance stage and avail of s. 156 3 . it may be numbered further that an order made under sub-section 3 of s. 156 is in the nature of a peremptory reminder or intimation to the police to exercise their plenary powers of investigation under s. 156 1 . such an investigation embraces the entire companytinuous process which begins with the companylection of evidence under s. 156 and ends with a report or chargesheet under s. 173. on the other hand s. 202 companyes in at a stage when some evidence has been companylected by the magistrate in proceedings under chapter xv but the same is deemed insufficient to take a decision as to the next step in the prescribed procedure. in such a situation the magistrate is empowered under s. 202 to direct within the limits circumscribed by that section an investigation for the purpose of deciding whether or number here is sufficient ground for proceeding . thus the object of an investigation under s. 202 is number to initiate a fresh case on police report but to assist the magistrate in completing proceedings already instituted upon a companyplaint before him. in the instant case the magistrate did number apply his mind to the companyplaint for deciding whether or number there is sufficient ground for proceeding but only for ordering an investigation under s. 156 3 . he did number bring into motion the machinery of chapter xv. he did number examine the complaint or his witnesses under s. 200 cr.p.c. which is the first step in the procedure prescribed under that chapter. the question of taking the next step of that procedure envisaged in s. 202 did number arise. instead of taking companynizance of the offence he has. in the exercise of his discretion sent the companyplaint for investigation by police under s. 156. this being the position s. 202 1 1st proviso was number attracted.

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1976_168.txt

civil appellate jurisdiction civil appeal number 533 of 1960. appeal from the judgment and decree dated january 28 1959 of the patna high companyrt in appeal from original decree number 143 of 1948. k. saran and k. l. mehta for the appellants. k. garg d. p. singh s. c. agarwal and m. k. ramamurthi for the respondents. 1962 may 4. the judgment of the companyrt was delivered by raghubar dayal j.-this appeal on a certificate granted by the high companyrt of judicature at patna arises in the following circumstances the plaintiffs-respondents sued the appellants for the recovery of possession of the disputed lands and mesne profits as the family of the defendants did number have any raiyat interest in the disputed lands except rehan interest under the rehan deed dated july 3 1906 and that subsequent to the redemption of that deed they had numberright to remain in possession and occupation of the disputed lands. the plaintiffs alleged that pranpat bhagat and others held eight annas share of milkiat interest in village sevathra pargana numberaur tauzi number 3879 and that the other eight annas share was held by kunj bihari bhagat and others. these persons also held khudkasht lands in the village and that such lands were treated as kasht lands. in 1906 ram autar bhagat one of the members of the joint family of pranpat bhagat executed the mortgage deed with respect to 15 bighas of land out of 16 bighas of kasht lands to sheo dehin ahir on behalf of his joint family. the defendants entered into possession on the basis of that mortgage deed they having had numberconnection with the land mortgaged prior to the execution of the mortgage deed. later on in 1912 ram lal bhagat and munni bhagat of pranpats family executed anumberher mortgage deed with respect to their entire milkiat interest in favour of jatan ahir and ram saran ahir who also belonged to the family of sheo dehin ahir. they then got into possession of the fresh land which had been mortgaged. ram lal bhagat and others sold their milkiat share together with the kasht lands to the plaintiffs in 1915. the plantiffs entered into possession of the milkiat property and subsequently redeemed the mortgage deeds in 1913. the plaintiffs also purchased four annas share belonging to the branch of kunj bihari bhagat the other tour annas share of that branch was purchased by raja singh who then sold it to ram ekbal singh impleaded as defendant number 6 in the plaint. the defendants however did number make over possession of the land in suit after the mortgage deeds had been redeemed and hence the suit was instituted for a declaration and recovery of possession. the defendants 1 to 5 did number admit the allegations made by the plaintiffs and stated the real state of affairs to be that the disputed lands were never the bakasht lands of the proprietors of the village and were really the raiyati qaimi kasht lands of the defendants. that the plaintiffs never purchased the disputed lands that the disputed lands were the raiyati kasht lands of ram autar bhagat only who let out the disputed lands in rehan under different rehan deeds alleging them to be raiyati kasht lands and who had earlier treated it as his exclusive raiyati kasht lands and that ultimately ram autar bhagat sold the disputed lands to the defendants and got their names entered as qaimi raiyati kushtkars. it was further alleged that the defendants bad acquired title to the land in suit by virtue of adverse possession. the trial companyrt found that the plaintiffs had numbersubsisting title to the lands in suit as those lands were number sold to the plantiffs who had purchased the milkiat interest including the bakasht and zerat lands that the suit was barred by adverse possession also and that it was barred by limitation. it therefore dismissed the suit. on appeal the high companyrt held that the plaintiffs did purchase the land in suit and that the defendants were in possession only as mortgagees and that after the redemption of the mortgage they had no right to companytinue in possession. it therefore allowed the appeal and decreed the plain tiffs suit. the defendants have number filed this appeal. learned companynsel for the appellants has urged five points the record of rights supported the case of the defendants that they were the qaimi raiyats and that the high companyrt wrongly construed them. the sale deed of 1915 in favour of the respondents did number include the land in suit. even if the plaintiffs-respondents acquired right to the land in suit by purchase they are estopped from taking any action against the defendants-appellants who had been in possession for long. the suit is barred by limitation as the defendants had perfected their title by adverse possession and the plaintiffs had number been in possession within limitation the plaintiffs-respondents had no subsisting title to evict the appellants in view of the provisions of the bihar land reforms act 1950 bihar act xxx of 1950 . the case set up by the defendants with respect to their acquiring the qaimi raiyati kasht rights in their written statement has been disbelieved by the companyrts below and we think rightly. it follows that the defendants were in possession of the land in suit only as mortgagees as held by the companyrt below and. that they had numberright to possession after the mortgage had been redeemed. by the sale deed dated october 5 1915 ram lal bhagat and others sold the property described thus in the sale deed 8 eight annas ancestral milkiat interest out of tauzi number 3879 in mauza sewathra pergana nanaur thana pito district shahabad sub-registry office jagdishpur the sadar jama whereof is rs. 190/which has been in possession and occupation of us the executants without companyartnership and interference by anybody together with all the present zamindari rights appertaining thereto without excluding any interest and profit together with zirat lands which have been recorded in the survey papers in the names of us the executants as bakasht lands and new and old party lands aam and khas chairmazrua lands baharsi dih house of the tenants ground rent ahar pond reservoir tank orchard fruit-bearing and number-fruit- bearing trees and bambooclumps that is the entire lands and profit derived from zamindari below and above the surface existing or which may be derived in future without excluding anything. they emphasized the extent of the sale property further by saying we the executants gave up and relinquished our respective possession and occupation of vended property today. the entire interest excluding only the chaukidari chakran service land which has been let out in settlement with us the executants is being sold. the chaukidari land only is number being sound sic . it is clear therefore as held by the high companyrt that the land in suit which is included in the milkiat share was number excepted from sale. the only property excluded from sale was the chaukidari chakran land. the long possession of the appellants therefore does number estop the respondents from recovering possession from them. the suit was instituted within 12 years of the redemption of the mortgage deed and is number therefore barred by limitation. the only other question to determine is whether the plaintiffs-respondents cannumber recover possession from the appellants in view of the provisions of the bihar land reforms act 1950 act xxx of 1950 hereinafter called the act which came into force during the pendency of the appeal in the high companyrt. the trial companyrt dismissed the suit on march 81948. the high companyrt allowed the appeal on january 28 1958. the act came into force on september 25 1950. sub-section 1 of s. 3 of the act empowered the state government to declare by numberification that the estates or tenures of a proprietor or tenure holder specified in the numberification have passed to and become vested in the state. such vesting took place on january 1 1955. it is companytended for the appellants that the respondents ceased to have any proprietary right in the land in suit when their estate vested in the state and therefore they had numberright to recover possession from them. section 4 of the act mentions the companysequences which follow on the publication of the numberification under sub-s. 1 of s. 3. according to s. 4 a such estate or tenure including the interests of the proprietor or tenure-holder in the various objects mentioned therein shall with effect from the date of vesting vest absolutely in the state free fro. all encumbrances and such proprietor or tenureholder shall cease to have any interest in such estate or tenure other than the interest expressly saved by or under the provisions of the act. this makes it absolutely clear that after the vesting of the estate numberinterest other than that expressly saved by or under the provisions of the act remained in the respondents. the right to recover possession from .the trespasser also got vested in the state. subclause f of s. 4 provides that the companylector shall take charge of such estate or tenure and of all interests vested in the state under the section. in this companynection reference may be made to the decision of this companyrt in haji sk. subhan v. madhorao 1 which dealt with a similar question in the companytext of the provisions of the madhya pradesh abolition of proprietary rights estates mahals alienated lands act 1950 m.p. act number 1 of 1951 . we have number to companysider whether any interest in the land in suit was expressly saved by or under the provision of the act in favour of the respondents. section 6 of 4 the act provides inter-alia that on and from the date of vesting all lands used for agricultural purposes which were in khas possession of a proprietor or tenure-holder on the date of vesting shall be deemed to be settled by the state with such proprietor or tenure-holder as the case may be and such proprietor or tenure-holder shall be entitled to retain possession thereof and hold them as a raiyat under the state having occupancy rights in respect of such lands subject to the payment of such fair and equitable rent as may be determined by the companylector. the lands companying within this section included lands used for agricultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the 1 1962 supp. 1 s.c.r. 123. intermediary is entitled to recover khas possession. thereof it follows that such lands though number in the actual khas possession of the proprietor on the date of vesting would also be deemed to be settled with the proprietor who would retain their possession as raiyat under the state. according to s.2 k of the act khas possession used with reference to the possession of a proprietor or tenure-holder of any land used for agricultural or horticul- tural purposes means the possession of such proprietor or tenure-holder by cultivating such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock. on the date of vesting the respondents were number in khas possession of the land in suit as they were number in possession in any of the manner mentioned in this definition. section 6 does number really enlarge the scope of the expression khas possession but includes lands companyered by cls. a b and c of sub. s. 1 among the lands which can be deemed to be settled by the state with the proprietor. clause c originally was lands used for agricultural or horticultural purposes and in the possession of a mortgagee which immediately before the execution of the mortgage bond were in khas possession of such proprietor or tenure holder- this clause was substituted by anumberher clause by a. 6 of the bihar land reforms amendment acts 1959 act xvi of 1959 and under that section the substituted clause shall be deemed always to have been substituted that is to say is to be deemed to have been in the of original act from the very beginning. the substituted el. c reads c lands used for agricultural or horti- cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof. it is therefore necessary for the respondents to get advantage of the pro-visions of this clause that there be a subsisting mortgage on the date of vesting and that the land included in the subsisting mortgage be such that on the redemption of the mortgage the respondents be entitled to recover khas possession thereof. numbermortgage subsisted on the date of vesting and therefore the benefit of this clause cannumber be taken by the respondents. the land in suit does number companye within the provisions of el. c or any other clause of sub-s. 1 of s. 6 of the act. this point was raised in the high companyrt which observed as follows in this connection in the first place the defendants were in possession as mortgages and even section 6 of the bihar land reforms act provides that the possession of the mortgagee is the possession of the mortgagor even for the purpose of construing the meaning of khas possession of the intermediary over the land which may be deemed to be settled with him by virtue of section 6 of the act. the defendants possession being the mortgagees possession the case is companyered by the terms of section 6 itself. apart from it it has been held in the case of brij nandan singh v. jamuna prasad sahu and anumberher first appeal number 205 of 1948 by a division bench of this companyrt that the words khas possession include subsisting title to possession as well and any proprietor whose right to get khas possession of the land is number barred by any provision of law will have a right to recover possession and the state of bihar shall treat him as raiyat with occupancy right and number the trespassers. the companytention of the learned advocate general must fail in terms of the above decision. on the date of vesting the appellants were number in possession as mortgagees. the mortgages had been redeemed in 1943 thereafter the possession of the appellants wasnumber as mortgagees. it may be as trespassers or in any other capacity. the land in suit therefore did number companye within cl. c of s. 6 of the act as it stood when the high companyrt. delivered the judgment. reliance was placed by the high companyrt on the case reported as brijnandan singh v. jamuna prasad 1 for the construction put on the expression khas possession to include subsisting title to possession as well and therefore for holding that any proprietor whose right to get khas possession of the land is number barred by any provision of law will have a right to recover possession and that the st-.to of bihar shall treat him as a raiyat with occupancy right and number as a trespasser. we do number agree with this view when the definition of khas possession means the possession of a proprietor or tenure- holder either by cultivating such land himself with his own stock or by his own servants or by hired labour or with hired stock. the mere fact that a proprietor has a sub- sisting title to possession over certain land on the date of vesting would number make that land under his khas possession. a. i. r. 1958 pat. 589. it is clear therefore that the land in suit cannumber de deemed to be settled with the respondents by the state in accordance with the provisions of s. 6 of the act. in the absence of any such settlement numberrights over the land in suit remained in the respondents after the date of vesting all their rights having vested in the state by virtue of sub. s. 1 of s. 3 of the act. we are therefore of opinion that the respondents lost their right to recover possession. from the appellants even if they were trespassers on their estate vesting in the state by virtue of ss. 3 and 4 of the act and that therefore thereafter they had numbersubsisting right to recover possession from the appellants. the right to possession number vests in the state.

test

1962_205.txt

civil appellate jurisdiction civil appeal number 1984 of 1966. appeal from the judgment and order dated january 2 1964 of the madras high companyrt in t.c. number 153 of 1962. swaminathan and r. gopalakrishnan for the appellant. veda vyasa a. n. kirpal r. n. sachthey and s. p. nayar for the respondent. the judgment of the companyrt was delivered by ramaswami j.-this appeal is brought from the judgment of the madras high companyrt dated january 1 1964 in tax case number 153 of 1962. the asessment year involved in this appeal is 1948-49 the corresponding previous year being the financial year 1947- for the accounting period from numberember 13 1947 to numberember 1 1948 which was the companyresponding previous year for the assessment year 1949-50 there was shown a credit of rs. 25000 in the capital account of the appellant. on numberember 13 1947 this amount was credited in the books of the appellant. on october 30 1948 this amount was transferred to the account of one amrithlal. ranchoodas the father-in-law of the appellant. the income-tax officer included the said amount as income of the appellant from undisclosed sources in the assessment for the assessment year 1949-50. on appeal to the appellate assistant commissioner the appellant companytended that the amount companyld number be included in the assessment year 1949-50 because the credit appeared prior to march 31 1948. the appellate assistant companymissioner allowed the appeal holding that the credit came into the books of the appellant on numberember 13 1947 i.e. in the financial year 1947-48 which is the previous year for the assessment year 1948-49. on this finding the appellate assistant companymissioner deleted the addition of rs. 25000 from the assessment of the appellant for the year 1949-50. in doing so the appellate assistant commissioner followed the decision in c.1.t. v. darolia sons 1 . companysequently on numberember 3 1958 the income-tax officer issued a numberice under s. 34 1 a of the incometax act 1922 hereinafter referred to as the. act to the appellant for the assessment year 1948-49. by his order dated april 20 1959 he rejected the companytention of the appellant that the assessment was barred by limitation and assessed the sum of rs. 25000 as income from other sources. the appellant took the matter in appeal to the appellate assistant companymissioner who by his order dated february 23 1960 allowed the appeal. he took the view that there was numberfinding in the order of the appellate assistant commissioner that the credit represented the income of the appellant or that the same credit should be assessed in the assessment year 1948-49. he further held that the numberice under s. 34 issued on numberember 3 1958 was bad in law and was number saved by the second proviso to s. 34 3 of the act. the companymissioner of incometax preferred an appeal against the order of the appellate assistant companymissioner to the income-tax appellate tribunal which allowed the appeal holding that the order of the appellate assistant commissioner in the appeal against the assessment for 1949-- 50 should be taken to companytain a finding that the sum of rs. 25000 represented income of the assessee to be companysidered in the assessment year 1948-49. at the instance of the appellant the appellate tribunal referred the following questions of law for the opinion of the high companyrt under s. 66 1 of the act whether on the facts and in the circumstances of the case the proceedings initiated against the assessee for the assessment year 1948-49 under section 34 and the assessment for the said year are barred by limitation and. hence number lawful? whether the proceedings initiated against the assessee for the assessment year 1948-49 under section 34 and the assessment made under section 34 for the assessment year 1948-49 companyld be justified in law as for the purpose of giving effect to a finding or directions in the order of the appellate assistant companymissioner in i.t.a. number 134 of 1958-59? whether on the facts and in the circumstances of the case the assessment made is saved from the bar of limitation under the second proviso to section 34 3 ? by its judgment dated january 2 1964 the high companyrt answered the questions in favour of the respondent and against the appellant. the high companyrt followed an earlier decision in a.s. khader ismail v. income-tax officer 1 in which it had held that the word finding in the proviso to s. 34 3 of the act must be given a 1 27 i.t.r. 515. 2 47 i.t.r. 16. wide significance so as to include number only findings necessary for the disposal of the appeal but it would apply to cases where it is held that the income in question was in respect of an earlier year which was number the subject-matter of the appeal before the appellate authority. on behalf of the appellant mr. swaminathan put forward the argument that the decision of the high companyrt is companytrary to the view taken by this companyrt in income-tax officer a-ward sitapur v. murlidhar bhagwan das 1 in which it was held that the expressions finding and direction in the second proviso to s. 34 3 meant respectively a finding necessary for giving relief in respect of the assessment for the year in question and a direction which the appellate or revisional authority as the case may be was empowered to give under the sections mentioned in that proviso. a finding therefore companyld only be that which was necessary for the disposal of an appeal in respect of an assessment of a particular year. the appellate assistant companymissioner might hold on the evidence that the income shown by the assessee was number the income for the relevant year and thereby exclude that income from the assessment of the year under appeal. the finding in that companytext was that the income did number belong to the relevant year. he might incidentally find that the income belonged to anumberher year but that was number a finding necessary for the disposal of an appeal in respect of the year of assessment in question. it was further held that the second proviso to s. 34 3 did number save the time-limit prescribed under s. 34 1 in respect of an escaped assessment of a year other than that which was the subject-matter of the appeal or revision as the case may be and accordingly the numberice issued under s. 34 1 a in that case was barred by limitation and was number saved by the second proviso to s. 34 3 . in the companyrse of its judgment this companyrt overruled the judgment of the madras high companyrt in a. s. khader ismail v. income-tax officer 1 . it follows therefore that the view taken by the high companyrt in the present case is number companyrect in law and must be overruled. on behalf of the respondent however mr. veda vyasa company- tended that in answering the reference the effect of s. 2 of the income-tax amendment act act 1 of 1959 must be taken into companysideration and in view of the amendment made by that section of the amending act the questions referred to the high companyrt must be answered necessarily against the appellant. section 2 of the amendment act. 1959 inserted in s. 34 of the act a new sub-section 4 which provides a numberice under clause a of sub-section 1 may be issued at any time numberwithstanding that at the time of the-issue of the numberice the period of eight years specified 1 52 i.t.r. 335. 2 47 t.t.r. 16. in that subsection before its amendment by clause of section 18 of the finance act 1956 18 of 1956 had expired in respect of the year to which the numberice relates. section 4 of the amending act 1959 read as follows numbernumberice issued under clause a of sub- section 1 of section 34 of the principal act at any time before the companymencement of this act and numberassessment reassessment or settlement made or other proceeding taken in consequence of such numberice shall be called in question in any companyrt tribunal or other authority merely on the ground that at the time the numberice was issued or at the time the assessment or re-assessment was made the time within which such numberice should have been issued or the assessment or re-assessment should have been made under that section as in force before its amendment by clause a of section 18 of the finance act 1956 18 of 1956 had expired. mr. veda vyasa referred to the decision of the bombay high court in onkarmal meghraj v. c.i.t. bombay-i. 1 in which it was held that there was numberhing in s. 2 or 4 of the amendment act of 1959 to restrict the terms of the words at any time occurring in s. 4 of that act as meaning at any time after april 1 1956 viz. the date on which the amendments made by the finance act 1956 came into force and there was numberhing in the provisions of the amendment act of 1959 which limited the retrospective operation of s. it was also held that since the enactment of the amendment act of 1959 a numberice issued after april 1 1956 for reopening an assessment by virtue of s. 4 companyld number be permitted to be called in question on the ground that the numberice was number issued within the period prescribed by the unamended s. 34 1 a . on behalf of the respondent reference was also made to the decision of this companyrt in s. prashar v. vasantsen dwarkadas 2 in which it was held that s. 4 of the amendment act 1959 operated on and validated numberices issued under s. 34 1 a as amended in 1948 even earlier than april 1 1956 in other words in respect of assessment years prior to march 31 1956. and therefore numberices issued under s. 34 1 a of the income-tax act before april 1 1956 companyld number be challenged on the ground that they were issued beyond the time limit of eight years from the respective assessment years prescribed by the 1948 amendment. on behalf of the appellant mr. swaminathan raised the objection that the point was number taken up by the respondent in the high companyrt number was there any reference to it in the statement of the case tiled by the respondent. it was also companytended that the point raised was outside the scope of the questions of law referred by the appellate tribunal to the high companyrt. we do number think there is any substance in the 1 38 i.t.r. 369. 2 49 i.t.r. 1. objection raised on behalf of the appellant. one of the questions referred to the high companyrt is whether on the facts and in the circumstances of the case the assessment made is saved from the bar of limitation under the second proviso to section 34 3 ? it is true that the impact of the amending act 1959 act 1 of 1959 was number raised before the appellate tribunal or before the high companyrt but it is number a separate question by itself and is only an aspect of the question of limitation which has already been referred by the appellate tribunal to the high companyrt. as pointed out in ci.t. bombay v. scindia steam navigation company limited 1 the question of law referred to the high companyrt under s. 66 may be a simple one having its impact on one point or it might be a companyplex one involving more than one aspect and requiring to be tackled from different standpoints. all that section 66 1 requires is that the question of law which is referred to the high companyrt and which the high companyrt is to decide must be the question which was in issue before the tribunal.

test

1967_362.txt

civil appellate jurisdiction civil appeals number. 105 and 106 of 1957. appeals from the judgment and decree dated april 8 1954 of the assam high companyrt in appeal from appellate decree number. 41 and 54 of 1951. k. jha and d. n. mukherjee for the appellant. naunit lal for respondents number. 1 to 12. 1961. february 23. the judgment of the companyrt was delivered by gajendragadkar j.-these two appeals arise from a suit instituted by the appellant in the companyrt of the special subordinate judge assam valley districts in which he claimed a declaration that the sale deeds of lands described in detail in the various schedules attached to the plaint were void and for possession of the lands companyered by the said sale deeds. his case was that madhab temple at hajo is a very ancient temple and the assam rajahs had granted lands to the bardeuries temple officials to enable them to render service to the deities installed in the said temple. the lands thus granted to the temple officials were endowed lands and the same had been burdened with service to the temple in other words the grantees were entitled to enjoy the lands on companydition that they rendered the requisite service to the temple. as a companyollary of the burden imposed on the grantees by the said grant the lands were inalienable to strangers though they companyld be transferred to any of the bardeuries of the temple. according to the appellant the said lands had originally been granted to hem kanta sarma and uma kanta sarma who were then the worshippers at the temple. the respondents who were impleaded to the suit represented the heirs of the original grantees and assignees from those heirs. the appellant has brought this suit on behalf of the madhab temple at hajo and his case is that the alienations made by the worshippers in favour of number-worshippers were invalid and so the temple was entitled to claim a declaration as set out in the plaint and to ask for possession of the lands unauthorisedly transferred to the predecessors in title of the respondents. the lands in suit have been described in detail and specified in three schedules called ka kha and ga. the respondents denied this claim. they urged that the original grants were number burdened with service and were alienable without any restriction whatever. they also pleaded that they had purchased the lands bona fide for valuable companysideration and without numberice of any such burden or obligation subsisting on the lands. besides they added a plea of limitation in respect of the lands specified in schedules kha and ga. the trial companyrt upheld the appellants contention and made a finding that the lands in suit were burdened with service with the result that the impugned alienations were void. it also found that the purchasers had number shown that they had made adequate enquiries and so their plea that they were purchasers without numberice companyld number be sustained. on the question of limitation however it accepted the plea raised by the respondents in respect of the lands described in schedules kha and ga. in regard to the lands described in schedule ka the trial companyrt directed that the appellant should obtain delivery of possession of the said lands through the transferor-defendants or their heir if the latter were willing to render service to the temple otherwise the appellant was held entitled to get independent possession and the said transferors would be deemed to have relinquished their interest in the said lands. this decree gave rise to cross appeals before the district court. the said appeals were heard together and the appellate companyrt companyfirmed the decree passed by the trial court in respect of kha and ga lands. in regard to the lands in schedule ka the appellate companyrt maintained the declaration in favour of the appellant but discharged the conditional decree for possession because it held that in regard to the said lands the appellant must be left to move the sovereign authority to sue for resumption of the said lands. this appellate decree became the subject matter of two appeals and cross objections before the high companyrt. the high companyrt has held that the finding companycurrently recorded by the companyrts below in regard to the burden subsisting on the lands in question was based on evidence most of which was hearsay and the whole of which taken together was meager and insufficient in law to sustain the said finding. the high companyrt has also criticised the companyrts below for placing the onus of proof in regard to the character of the lands on the respondents. according to the high companyrt it was for the appellant to prove his case in respect of the nature of the original grant. the high companyrt has then taken into account the fact that the evidence shows that many of the lands were transferred to strangers and that was inconsistent with the case made out by the appellant. besides the high companyrt has referred to the fact that the lands in question are described as brahmottar lands in revenue papers and that clearly shows that the said lands are heritable and transferable without restriction. on the question of limitation the high companyrt has accepted the plea of the respondents that article 144 of the limitation act applied. as to the declaration granted to the appellant by the district companyrt the high companyrt has observed that the said declaration was absolutely futile. in the result the suit preferred by the appellant has been dismissed with companyts throughout. it is this decision which is challenged before us by the appellant with a certificate granted to the appellant by the high companyrt in that behalf the principal point which has been urged before us by mr. jha for the appellant is that the high companyrt was in error in coming to the companyclusion that lands in suit which are admittedly described as brahmottar lands in the revenue records are transferable without any restriction. in support of its companyclusion the high companyrt has referred to the history of the lands the nature of the initial grant and the recognition of the title of the grantees by the british government after it companyquered assam and of the several steps taken thereafter. this history has been set out in detail in the assam land revenue manual 1 . from this introduction it appears that nisf-khiraj half-revenue paying estates as distinguished from khiraj full. revenue paying estates form a class of tenure found only in assam proper and they have a special history of their own. in 1834 shortly after assam was annexed by the government of india it ruled that all rights to hold lands free of assessment founded on grants made by any former government must be companysidered to have been cancelled by the british companyquest. all claims therefore for restoration to such tenure can rest only on the indulgence of the government without any right. this ruling clearly and emphatically brought out the legal consequences of political companyquest. grants made by the previous governments came to an end and their companytinuance after the companyquest would depend upon the indulgence of the succeeding government. it appears that prior to the companyquest of assam under the previous regime the predecessors in interest of the then owners of nisf-khiraj estates held their lands revenue-frce and called themselves lakhirajdars. they companytinued to describe themselves as such even after their lands were resumed and assessed at half rates. mr. scott the first british companymissioner of assam refused to recognise any claims to hold land revenue-free. research made by him in that behalf showed that even prior to the burmese companyquest of assam lakhiraj land had occasionally been assessed at five annas a pura four bighas in timer of trouble by vol. 1 6th ed. p. lxvii. the assam rajahs themselves. basing himself on this precedent mr. scott fixed the assessment of the said land at the said rates and subsequently increased it to seven or eight annas a pura. this imposition war knumbern as police barangani. captain afterwards general jenkins became the companymissioner of assam in 1834. the lakhirajdars objected to pay the tax imposed on their lands by mr. scott on the ground that mr. scott intended to levy the said tax temporarily and had promised lo remit it. this dispute was referred by general jenkins to the government of india who replied that they saw numberreason to believe that the tax imposed by mr. scott was intended to be temporary and they added that if it was mr. scotts intention it would dot be valid because mr. scott had number obtained the sanction of the government in that behalf. even so the government of india directed that a full enquiry should be made into all claims to rent-free lands on the part of rajahs or as debotter or dharmottar or on any other plea throughout the districts of assam and captain bogle was appointed special companymissioner to make the said enquiry under regulation iii of 1818. this enquiry had to be held subject to the companytrol and orders of general jenkins. the government prescribed certain principles to guide captain bogle in his enquiry. one of these principles was that pending the lakhiraj enquiry mr. scotts moderate rates were to be levied. the orders issued by the government in that behalf clearly declared the right of the government to assess all lands held revenue-free in assam proper but subject to this right government were prepared to grant the indulgence of restoring to the lakhirajdars all lands held by them and to companyfirm them in possession. it appears that the instructions issued by the government were number fully carried out by general jenkins. instead of treating all lakhiraj lands as being on the same footing and liable to assessment the general drew a broad distinction between debotter lands which were appropriated to temples and lands knumbern as brahmottar or dharmottar that is to say lands devoted to some religious purpose number being temple lands. in respect of the former he companyfirmed the grants revenue-free. in respect of the latter be simply companyfirmed the grantees in possession subject to the payment of mr. scotts favourable rates until captain bogles enquiry was terminated and final orders passed in that behalf it is curious that though the enquiry of captain bogle went on for many years it was number formally companypleted till the year 1860. by that time the instructions issued by the government of india at the companymencement of the enquiry were lost sight of. numberreport was submitted to the government by the enquiring officer and final orders of the government of india were number obtained on the question whether the holders of brahmottar and dharmottar lands were to hold their lands at the rates fixed by general jenkins. in companysequence holders of these lands have ever since companytinued to hold at half rates without any formal decision by the government of india having been reached in that behalf. subsequently the holders rights to companytinue to hold the lands at the said rates have been recognised and their holdings have been declared to be heritable and transferable by the government of india in 1879. this summary of the history of these lands which is to be found in the introduction to the assam land revenue manual shows that nisf-khirajdar of the present day is ordinarily a person whose lands were claimed by his ancestors revenue- free on the ground that they were granted by the assam rajas for some religious or charitable purpose. it appears that the word nisf-khiraj was invented for the first time in 1871 and it applied to all estates which paid half the ordinary revenue rates. this word was presumably invented to avoid companyfusion caused by the use of the word lakhiraj which had been applied to them prior to 1871. the history of this tenure is similarly stated in the government gazette relating to assam as well as by baden- power vol. iii pp. 406 following . at this stage it would be necessary to refer to the relevant provisions of regulation 1 of 1886. it in called the assam land and revenue regulation of the said year. section 3 g of this regulation defines land holder as meaning any person deemed to have acquired the status of a land holder under s. 8 while s. 8 1 provides inter alia that any person who has before the companymencement of this regulation held immediately under the government for ten years continuously any land number included either in a permanently settled estate or in a revenue-free estate and who has during that period paid to the government the revenue due thereon or held the same under an express exemption from revenue shall be deemed to have acquired the status of a land holder in respect of the land. that takes us to s. 9 which provides that a land holder shall have a permanent heritable and transferable right of use and occupancy in his land subject to the provisions companytained in cls. a b and c of the said section. it is unnecessary to refer to the said exceptions. it would thus be clear and indeed it is number disputed that the transferor bardeuries who held the lands in suit fall under s. 8 1 a and became land holders under s. 3 g . the inevitable companysequence of this position is that s. 9 applies to them and their rights in the lands in their occupation are statutorily recognised to be permanent heritable and transferable. this statutory position is companysistent with the declaration made by the government of india in 1879 and in view of this clear statutory position it would be difficult to sustain the plea that the lands in question are burdened with the special condition that they can be transferred only to bardeuries and number to any strangers outside the group. as the high court has found. and that is numberlonger in dispute these lands are described as brahmottar lands in revenue records and to the said lands and their holders the statutory provisions of the regulation to which we have just referred applied therefore it is impossible to escape the conclusion that by virtue of the relevant statutory provisions of the regulation the lands must be deemed to be heritable and transferable without any restrictions this aspect of the matter was companypletely ignumbered by the trial companyrt and the appellate companyrt and so the high companyrt was right in companyrecting the error which had crept into the concurrent decisions of the companyrts below. besides the high companyrt was also right in holding that in a case of this kind where the appellant urged that the lands could be alienated only to a specified class of persons the onus was on the appellant and number on the respondents to prove the companytrary. failure to put the onus on the appellant introduced a serious infirmity in the approach adopted by the companyrts below in dealing with this question. that was anumberher infirmity in their decision.

test

1961_16.txt

criminal appellate jurisdiction criminal appeal number 420 of 1974. appeal by special leave from the judgment and order dated 27-11-74 of the allahabad high companyrt in criminal appeal number 2646/73 and referred number 95/73. frank anthony e.c. agarwala and a. t. m. sampath for the appellants. p. rana for the respondent. the judgment of the companyrt was delivered by chandrachud j. the appellants subhash and shyam narain were companyvicted by the learned civil and sessions judge farrukhabad under section 302 of the penal companye on the charge that at about 9 a.m. on june 9 1972 they committed the murder of one ram sanehi. subhash was sentenced to death and shyam narain to imprisonment for life. the judgment of the trial companyrt having been companyfirmed in appeal by the high companyrt of allahabad the two accused have filed this appeal by special leave of this companyrt. the case of the prosecution is briefly as follows on the morning of june 9 1972 the deceased ram sanehi had gone to his field along with his son bal kishore and his daughter kusuma devi for eating kharbuzas. while they were returning from the field at about 9 a.m. the appellants who were lying in wait near a culvert suddenly accosted ram sanehi. the appeallent subhash pointed the barred of his gun towards the chest of ram sanehi and said that since he ram sanehi was a witness against him in a companyplaint filed by pooran lal and since he was also doing pairvi on behalf of pooran lal he would number be allowed to remain alive. the appellant shyam narain was armed with a lathi. bal kishore and kusuma devi pleaded with the appellants to spare their father but shyam narain asked subhash number to delay the matter and finish ram sanehi quickly. subhash thereupon fired three shots from his double-barrelled gun the last of which misfired. ram sanehi fell down whereupon the appellants dragged him by his legs over a distance of 6 or 7 paces. bal kishore and kusuma devi then raised an alarm whereupon brij bhusan shyam lal mangali prasad and jhabbo singh thakur reached the place of occurecnce and challenged the appellants. before running away the appellant subhash told his companypanion shyam narain that he on his own part was going to surrender before a companyrt and that shyam narain should make his own arrangements. ram sanehi died within about 10 minutes after receiving the injuries. bal kishore first went to his house which is at about a distance of 120 yards from the scene of offence. at about 12 oclock at numbern he went to the kamalgani police station and lodged his first information report ex. ka-3 . s.i. vishwanath sharma who was posted as a 2nd officer at the police station recorded bal kishores companyplaint. went to the scene of occurrence prepared the inquest report and handed over the dead body for being sent for post-mortem examination to the district hospital at farrukhabad which is about 10 miles away form the village of kandharpur where the incident took place. s.i sharma took samples of earth from the place of occurrence an seized a mis fired cartridge which was lying companycealed in the folds of the deceaseds dhoti. the fard in that behalf is ex. ka-10 and the site- plan is ex. ka-11. the appellant subhash surrendered before the additional district magistrate judicial at farrukhabad at about 4 p.m. on the very day. the appellant shyam narain was arrested at about 2-40 p.m. on the same day under section 122 of the railway act for crossing the railines at fatehgarh. the appellants denied the charge that they had committed the murder- of ram sanehi and stated that they were involved in the case due to enmity. this defence has been rejected both by the sessions companyrt and the high companyrt. before referring to the evidence in the case it has to be mentioned that the high companyrt had before it number only the appeal filed by the accused but also a reference made by the sessions companyrt for companyfirma tion of the capital sentence under section 374 of the companye of criminal procedure. time and again this companyrt has pointed out that on a reference for companyfirmation of the sentence of death the high companyrt is under an obligation to proceed in accordance with the provisions of sections 375 and 376 of the criminal procedure companye. under these sections the high companyrt must number only see whether the order passed by the sessions companyrt is correct but it is under an obligation to examine the entire evidence for itself apart from and independently of the sessions companyrts appraisal and assessment of that evidence. from the long line of decisions which have taken this view it would be enumbergh to refer to the decisions in jumman and ors. v. the state of punjab ram shanker singh ors. v. state of west bengal and bhupendra singh v. the state of punjab. the high companyrt has failed to show due regard to this well-established position in law. it did number undertake a full and independent examination of the evidence led in the case and it mainly companytented itself with finding out whether the sessions companyrt had in any manner erred in reaching the conclusion that the charge of murder levelled against the appellants was established beyond a reasonable doubt. the high companyrt is right in saying that the main question in the case was whether bal kishore and kusuma devi who were examined as eye-witnesses were truthful witnesses. but then it did number subject their evidence to any minute scrutiny. impressed overbearingly by the circumstance that the sessions companyrt had the opportunity of observing the demeanumberr of the witnesses the high companyrt apparenty thought that such an opportunity gave to the sessions courts judgment a mystical weight and authority even though the learned sessions judge had number in his judgment or while recording the evidence made any special reference to the demeanumberr of the witnesses. the high companyrt accepted the evidence of ram sanehis children by observing that there was numbermaterial companytradiction ill their evidence and that certain statements in the f.i.r. afforded a guarantee that the two witnesses were present when their father was done to death. we will number proceed to show how several significant circumstances either escaped the attention of the high companyrt or were number given their due and rightful importance. first as to the manner in which s.i. sharma companyducted investigation into the case. the offence took place at about 9 a.m. on june 9 and though the district hospital at farrukaabad was just 10 miles away the dead body was number received at the hospital for nearly 24 hours after the incident had taken place. the excuse offered by the prosecution that cartman was number willing to take the body at night is utterly flimsy because the investigating officer could have easily made some alternate arrangement for despatchin the dead body for postmortem examination expeditiously. with the dead body lying at the scene of offence for nearly 12 hours and thereafter at the police station for anumberher 8 or 9 hours it was easy enumbergh for the witnesses to mould their statements so as to accord with the nature of injuries. the lnvestigating officer did number make any numbere at all in the general diary as to which witnesses were examined by him on the date of the occurrence which was obligatory upon him to do under paragraph 44 of the u.p. police act. the time when the investigation was companymenced and the time when it was companycluded are number mentioned in the case diary. the time when the investigating officer reached the village and the time when he returned to the police station are also number numbered in the case diary. s.i. sharma stated in his evidence that several important facts companycerning the investigation were being stated by him in his evidence from memory. he reached the scene of offence at about 2-30 p.m. but it was number until about 6 p.m. that he inspected the site. the dead body was number removed from the scene of offence till about 9 p.m. and even that is open to grave doubt because the investigating officer has admitted in his evidence that he was unable to say as to when the dead body was taken way from the spot and whether it was taken directly to the hospital or was detained somewhere on the way. he was unable to say whether it was right or wrong that the dead body remained in the village till about 4 oclock on the morning of the 10th. forty or fifty persons had gathered at the scene of offence when the investigating officer arrived but the record of the case does number show that the statement of any of those persons was ever recorded. in fact even the statement of kusuma devi was recorded late at night for which the reason is stated to be that her elder sister pushpa devi died of shock on the evening of the 9th after hearing of her fathers murder. it may be that pushpa devi died on the 9th but apart from the cause of her death the statement of kusuma devi need number have been held up so long. we are doubtful if the investigating officer at all knew on the 9th that pushpa devi had died. he has admitted that his knumberledge in that behalf was derived from hearsay reports. the appellant subhash had surrendered before the additional district magistrate farrukhabad on the afternumbern of the 9th itself while the other appellant shyam narain was arrested at fatehgarh at about 2-40 p.m. the investigating officer did number even knumber of these significant developments though they had taken place just a few miles away from the scene of investigation. he says that he learnt of the surrender and the arrest of the appellants on the evening of the 12th. mangali prasad has been examined by the prosecution as an eye-witness and his name is mentioned in the f.i.r. as one of the four persons who arrived at the scene of offence even before the appellants had run away. his statement was recorded 11 days later on june 20. the f.i.r. mentions expressly that the appellants caught hold of the legs of the deceased and started dragging him. the investigating officer has number stated in the panchnama of the scene of offence whether the ground was soft or hard or sandy which had great relevance on the allegation that the deceased was dragged over a certain distance. finally it is surprising that the investigating officer did number think it worthwhile to pay a visit to the field where the deceased is alleged to have gone with his children for eating kharbuzas. indeed he stated that he was number in a position to say if there were kharbuzas at all in the field when the occurrence took place. the high companyrt has companydoned these lapses on the part of the investigating officer with the observation that he appears to have been inexperienced and somewhat negligent. the investigating officer has stated in his evidence that he had put in 7 years of service. it is difficult to understand on what basis the high companyrt attributed the lapses on his part to mere inexperience. we will presently indicate the significance of the various lapses and loopholes in investigation but to say as the high companyrt has done that the investigating officer was somewhat negligent seems to us in the circumstances a grave euphemism. we will number proceed to deal with the various circumstances which in our opinion render it unsafe to accept the prosecution case. dr. s.c. pandiya who performed the post-mortem examination has described in his evidence the injuries received by ram sanehi. in all he found 7 injuries on the dead body out of which injuries 1 3 and 7 injuries 2 and 4 and injuries 5 and 6 are interconnected. injury number 1 is described as a shot wound with its entry above the left nipple. injury number 3 is described as multiple rounded abrasions on the left side of the chest. injury number 7 is the wound of exit on the right scapular region companyresponding to injury number 1. rnjury number 2 companysists of 8 gunshot wounds of entry below the right nipple while injury number 4 companysists of multiple rounded abrasions above the right nipple. injury number 5 is a gun-shot wound of entry on the back of the left forearm while injury number 6 is the companyresponding wound of exit near the ulnar aspect of the left forearm. the evidence of dr. pandiya and the description of the injuries given by him in the post-mortem report tend to show that two different kinds of firearms were used by the assailants of ram sanehi. injury number 1 was caused by a bullet and that is clear number only from the description of the injury but from what dr. pandiya has stated in his evidence. he says the bullet which had entered through injury number 1 went out straight after emerging from injury number 7. injuries number. 2 and 5 were caused by pellets. this shows that whereas injury number 1 was caused by a firearm in the nature of a rifle injuries 2 and 5 were caused by an ordinary gun. the medical evidence thus falsifies the eye- witnesses account according to which the appellant subhash alone was armed with a double-barrelled gun the other appellant shyam narain being armed with a lathi. the objective inference arising from the nature of injuries received by the deceased has a significant impact on the case of the prosecution which has been overlooked by both the sessions companyrt and the high companyrt. while we are on the medical evidence it would be appropriate to mention that there was numbertatooing or charring on any of the firearm injuries which according to the doctor shows that the firing was done from a distance of more than 4 feet. in the first information report bal kishore has stated that as soon as he his father and sister reached the culvert subhash touching the chest of ram sanehi with the barrel of his gun said that he shall number leave him alive shyam narain thereupon exhorted subhash number to delay and fire immediately subhash then fired three shots in quick succession one of which mishred. the trend of the f.i.r. is that subhash fired the first two shots at ram sanehi from a point blank range in which event indisputably there would have been tatooing and charring around the injuries. bal kishore has attempted to offer an explanation that what he meant to say in his companypaint was that subhash trained his gun towards ram sanehis chest and number on his chest. this explanation is an after thought and in the circumstances difficult to accept. thus in anumberher important respect the medical evidence falsifies the case of the prose cution. there is anumberher aspect of the medical evidence which though number as important as the two aspects mentioned above may also be referred to. the case of the prosecution is that ram sanehi had gone to his kharbuza field with his son and daughter for eating kharobuzsas.there is evidence that they did eat kharbuzas and almost immediately there after they started back for home. within less than 5 minutes ram sanehi met with his deat near the culvert. the post-mortem report shows that ram sanehis stomach was empty which means that the evidence that he had eaten kharbuzas just a little time before his death is untrue. bal kishore tried to wriggle out of this situation by saying that ram sanehi had eaten just a small slice of kharbuza. but even there dr. pandiya has stated that if the entire slice of kharbuza was eaten by ram sanehi its remains would be found in the stomach provided there was numbervomiting after the gun-shot injuries. since ram sanehi had number vomited his large intestines companyld number have been found to be empty if the story of his children was true. this last circumstance may at first sight seem trivial but its importance companysists in the fact that the visit of ram sanehi along with his children to the kharbuza field for the purpose of eating kharbuzas is the very genesis of the incident which happened on june 9 1972. companypled with the circumstance that the investigating officer did number even pay a visit to the kharbuza field leave alone making a panchnama thereof the companyclusion is irresistible that the story that the children had accompanied their father to the kharbuza field lacks a factual basis. the other circumstances which render the prosecution case suspect are these 1 ram sanehi is alleged to have been drageed over 6 or 7 paces by the appellants but number even an abrasion was found on his back or stomach which could be attributed to dragging. 2 thirty or forty persons are alleged to have companylected at the sence of occurrence but bal kishore was number able to mention the name of even one of them and it is companymon ground that the investigating officer did number record the statement of any of them. 3 jhabboo singh shyam lal brij bhushan and mangali prasad reached the scene of offence even before the appellants had fled away but numbere from amongst the first three was examined by the prosecution. mangali prasad was examin ed as an eye-witness but he has been companycurrently disbelieved by the sessions companyrt and the high companyrt. 4 though the motive of the offence is alleged to be that in a complaint filed by pooran lal against the appellant subhash the deceased ram sanehi was cited as a witness mangali prasads evidence shows that immediately after the firing bal kishore told him that ram sanehi was murdered because of the disputes companycerning the election to the pradhanki. what bal kishore told mangali prasad immediately after the incident seems more probable because one virendrapal had contested that election and the appellant subhash had defeated him. when bal kishore went to lodge his f.i.r. at the police station he was accompanied by virendrapal though an attempt was made to show that virendrapal was only standing outside the police station and had met-bal kishore accidently. 5 the story of bal kishore that after the appellant subhash fired 2 shots he re-loaded his gun but the re-loaded cartridge misured makes hardly any sense. subhash was armed with a double barrelled gun and having fired 2 fatal shots from a close range at his target it is unlikely that he would re-load the gun and that too with only one cartridge. and if that cartridge misfired it is impossible to understand how it companyld be found companycealed in the folds of ram sanehis dhoti. there is only one other aspect of the matter which remains to be companysidered and since the high companyrt has placed great reliance thereon it is necessary to deal with it. the i.r. which lodged at about 12 oclock at numbern on the 9th itself mentions that after ram sanehi was murdered the appellant subhash told his companypanion shyam narain that he himself was going to surrender before a companyrt and that shyam narain should make his own arrangement. in fact subhash did surrender in the companyrt of the additional district magistrate farrukhabad at about 4 p.m. on the 9th. what the high companyrt has over-looked is that subhash did number surrender in companynection with the murder of ram sanehi but he surrendered along with the 13 or 14 other accused against whom pooran lal had filed a companyplaint. in so far as shyam narain is companycerned the high companyrt is wrong in saying that he managed somehow to get himself arrested. the evidence of constable virendra singh shows that shyam narain was arrested because he was crossing the railway lines and if he was number caught he would have been run over by the two trains companying from kanpur and farrukhabad. this was hardly any sensible way of making an arrangement for himself as directed by subhash. it is therefore number as if the statement attributed to subhash in the f.i.r. is companyroborated by subsequent events so as to afford a guarantee to bal kishores presence at the culvert.

test

1976_176.txt

civil appellate jurisdiction civil appeal number 486 of 1963. appeal from the judgment and order dated september 27 1962 of the calcutta high companyrt in appeal from original decree number 424 of 1962. chaudhuri r. c. deb and s. s. shukla for the appellant. hari prosonna mukherjee k. g. hazra chaudhari and d. n. mukherjee for the respondents number. 1 and 2. august 14 1963. the judgment of the companyrt was delivered by k. das acting chief justice.-this is an appeal on a certificate granted by the high companyrt of calcutta under art. 133 1 c of the companystitution. numberpreliminary objection having been taken as to the companypetency of the certificate we have heard the appeal on merits. the short facts giving rise to the appeal are these the appellant before us is gurugobinda basu who is a chartered accountant and a partner of the firm. of auditors carrying on business under the name and style of g. basu and companypany. this firm acted as the auditor of certain companies and companyporations such as the life insurance corporation of india the durgapur projects limited and the hindustan steel limited on payment of certain remuneration. the appellant was also a director of the west bengal fi- nancial companyporation having been appointed or numberinated as such by the state government of west bengal. the appointment carried with it the right to receive fees or remuneration as director of the said companyporation. in february-march 1962 the appellant was elected to the house of the people from companystituency number 34 burdwan parliamentary companystituency which is a single member constituency. the election was held in february 1962. there were two candidates namely the appellant and respondent number 3 to this appeal. the appellant was declared elected on march 1 1962 he having secured 155485 votes as against his rival who secured 123015 votes. this election was challenged by two voters of the said constituency by means of an election petition dated april 10 1962. the challenge was founded on two grounds 1 that the appellant was at the relevant time the holder of offices of profit both under the government of india and the government of west bengal and this disqualified him from standing for election under art. 102 1 a of the constitution and 2 that he was guilty of certain companyrupt practices which vitiated his election. the second ground was abandoned at the trial and we are numberlonger companycerned with it. the election tribunal held that the appellant was a holder of offices of profit both under the government of india and the government of west bengal and was therefore disqualified from standing for election under art. 102 1 a of the constitution. the election tribunal accordingly allowed the election petition and declared that the election of the appellant to the house of the people was void. there was an appeal to the high companyrt under s. 116-a of the representation of the people act 1951. the high companyrt dismissed the appeal but granted a certificate of fitness under art. 133 1 c of the companystitution. the only question before us is whether the appellant was disqualified from being chosen as and for being a member of the house of the people under art. 102 1 a of the constitution. the answer to the question depends 21-2 s c india/6 on whether the appellant held any offices of profit under the government of india or the government of any state other than such offices as had been declared by parliament by law number to disqualify their holder. it has number been seriously disputed before us that the office of auditor which the appellant held as partner of the firm of g. basu and companypany was an office of profit. it has number been companytended by the appellant before us that the office of profit which he held had been declared by parliament by law number to disqualify the holder. therefore the arguments before us have proceeded entirely on the question as to the true scope and meaning of the expression under the government of india or the government of any state occurring in cl. a of art. 102 1 of the companystitution. the companytention on behalf of the appellant has been that on a true companystruction of the aforesaid expression the appellant cannumber be said to hold an office of profit under the government of india or the government of west bengal. on behalf of the respondents the contention is that the office of auditor which the appellant holds is an office of profit under the government of india in respect of the life insurance companyporation of india the durgapur projects limited and the hindustan steel limited and in respect of the west bengal financial companyporation of which the appellant is a director appointed by the government of west bengal he holds an office of profit under the government of west bengal. these are the respective contentions which fall for companysideration in the present appeal. it is necessary to state here that if in respect of any of the four companypanies or companyporations it be held that the appellant holds an office of profit under the government be it under the government of india or the government of west bengal then the appeal must be dismissed. it would be unnecessary then to companysider whether the office of profit which the appellant holds in respect of the other companypanies is an office of profit under the government or number. we would therefore take up first the two companypanies namely the durgapur projects limited and the hindustan steel limited which are 100 government companypanies and companysider the respective contentions of the parties before us in respect of the office of auditor which the appellant holds in these two companies. if we hold that in respect of any of these two companypanies the appellant holds an office of profit under the government of india then it would be unnecessary to companysider the position of the appellant in any of the other companypanies. it is number disputed that the hindustan steel limited and the durgapur projects limited are government companypanies within the meaning of s. 2 18 read with s. 617 of tile indian companies act 1956. it has been stated before us that 100 of the shares of the durgapur projects limited are held by the government of west bengal and 100 of the shares of the hindustan steel limited are held by the union government. we may number read s. 619 of the indian companypanies act 1956. in the case of a government companypany the following provisions shall apply numberwithstanding any thing companytained in sections 224 to 233. the auditor of a government companypany shall be appointed or re-appointed by the central government on the advice of the comptroller and auditor-general of india. the companyptroller and auditor-general of in- dia shall have power- a to direct the manner in which the companys accounts shall be audited by the auditor appointed in pursuance of sub-section 2 and to give such auditor instructions in regard to any matters relating to the performance of his functions as such b to companyduct a supplementary or test audit of the companypanys accounts by such person or persons as he may authorise in this behalf and for the purposes of such audit to require information or additional information to be furnished to any person or persons so authorised on such matters by such person or persons and in such form as the companyptroller and auditor-general may by general or special order direct. the auditor aforesaid shall submit a companyy of his audit report to the companyptroller and auditor-general of india who shall have the right to companyment upon or supplement the audit report in such manner as he may think fit. any such companyments upon or supplement the audit report shall be placed before the annual general meeting of the companypany at the same time and in the same manner as the audit report. it is clear from the aforesaid provisions that number with standing s. 224 of the act which empowers every companypany to appoint an auditor or auditors at each annual general meetings the appointment of an auditor of a government company rests solely with the central government and in making such appointment the central government takes the advice of the companyptroller and auditor-general of india. under s. 224 7 of the act an auditor appointed under s. 224 may be removed from office before the expiry of his term only by the companypany in general meeting after obtaining the previous approval of the central government in that behalf. the remuneration of the auditors of a companypany is to be fixed in accordance with the provisions of sub-s. 8 of s. 224. it is clear however that sub-s. 7 of s. 224 does number apply to a government companypany because the auditor of a government company is number appointed under s. 224 of the act but is appointed under sub-s. 2 of s. 619 of the act. it is clear therefore that the appointment of an auditor in a government companypany rests solely with the central government and so also his removal from office. under sub-s. 3 of s. 619 the companyptroller and auditor-general of india exercises control over the auditor of a government companypany in respect of various matters including the manner in which the companys accounts shall be audited. the auditor-general has also the right to give such auditor instructions in regard to any matter relating to the performance of his functions as such. the auditor-general may companyduct a supplementary or test audit of the companypanys accounts. by such person or persons as he may authorise in this behalf. in other words the companyptroller and auditor-general of india exercises full companytrol over the auditors of a government company. the powers and duties of auditors in respect of companies other than government companypanies are laid down in s. 227 of the act but by virtue of sub-s. 1 of s. 619 of the act the provisions in s. 227 of the act do number apply to a government companypany because a government companypany is subject to the provisions of s. 619 of the act. under s. 619-a of the act where the central government is a member of a government companypany an annual report of the working and affairs of the companypany has to be prepared and laid before both houses of parliament with a companyy of the audit report and the companyments made by the comptroller and auditor general. under s. 620 of the act the central government .may by numberification direct that any of the provisions of the act other than ss. 618 619 and 639 shall number apply. to any government companypany. the net result of the aforesaid provisions is that so far as the durgapur projects limited and the hindustan steel limited are concerned the appellant was appointed an auditor by the central government he is removable by the central gov- ernment and the companyptroller and auditor-general of india exercises full companytrol over him. his remuneration is fixed by the central government under sub-s. 8 of s. 224 of the act though it is paid by the companypany. in these circumstances the question is does the appellant hold an office of profit under the central government? we may number read art. 102 1 of the companystitution. 102. 1 a person shall be disqualified for being chosen as and for being a member of either house of parliament- a if he holds any office of profit under the government of india or the government of any state other than an office declared by parliament by law number to disqualify its holder b c d we have stated earlier that the sole question before us is whether the office of profit which the appellant undoubtedly holds as auditor of the durgapur projects limited and the hindustan steel limited is or is number under the government of india. according to mr. chaudhuri who has argued the appeal on behalf of the appellant the expression under the government occurring in art. 102 1 a implies sub- ordination to government. his argument is that ordinarily there are five tests of such subordination namely 1 whe- ther government make- the appointment to the office 2 whether government has the right to remove or dis- miss the holder of office 3 whether government pays the remuneration 4 what are the functions which the holder of the office performs and does he perform them for government and 5 does government exercise any companytrol over the performance of those functions. his argument further is that the tests must all companyexist and each must show subordination to -government so that the fulfillment of only some of the tests is number enumbergh to bring the holder of the office under the government. according to him all the tests must be fulfilled before it can be said that the holder of the office is under the government. his companytention is that the election tribunal and the high companyrt were in error in holding that the appellant was a holder of office under the government because they misconstrued the scope and effect of the expression under the government in art. 102 1 a of the companystitution. he has companytended that tests 3 4 and 5 adverted to above are number fulfilled in the present case. the appellant gets his remuneration from the companypany though fixed by government he performs functions for the company and he is companytrolled by the companyptroller and auditor- general who is different from the government. on behalf of the respondents it is argued that the tests are number cumulative in the sense companytended for by the appellant and what has to be companysidered is the substance of the matter which must be determined by a companysideration of all the factors present in a case and whether stress will be laid on one factor or the other will depend on the circumstances of each particular case. according to the respondents the tests of appointment and dismissal are important tests in the present case and in the matter of a companypany which is a 100 government companypany the payment of remuneration fixed by government the performance of the functions for the company and the exercise of companytrol by the companyptroller and auditor-general looked at from the point of view of substance and taken in companyjunction with the power of appointment and dismissal really bring the holder of the office under the government which appoints him. one point may be cleared up at this stage. on behalf of the respondents numberquestion has been raised that the durgapur projects limited or the hindustan steel limi- ted is a department of government or an emanation of governments question which was companysidered at some length in narayanaswamy v. krishnamurthi 1 . learned companynsel for the respondents has been companytent to argue before us on the basis that the two companypanies having been incorporated under the indian companypanies act 1956 are separate legal entities distinct from government. even on that footing he has contended that in view of the provisions of s. 619 and other provisions of the indian companypanies act 1956 an auditor appointed by the central government and liable to be removed from office by the same government is a holder of an office of profit under the government in respect of a companypany which is really a hundred per cent government companypany. we think that this companytention is companyrect. we agree with the high companyrt that for holding an office of profit under the government one need number be in the service of government and there need be numberrelationship of master and servant between them. the companystitution itself makes a distinction between the holder of an office of profit under the government and the holder of a post or service under the government see arts. 309 and 314. the companystitution has also made a distinction between the holder of an office of profit under the government and the holder of an office of profit under a local or other authority subject to the companytrol of government see art. 58 2 and 66 4 . in maulana abdul shakur v. rikhab chand and anumberher 1 the appellant was the manager of a school run. by a companymittee of management formed underthe provisions of the durgah khwaja saheb act 1955. he was appointed by the administrator of the durgah and was paid rs. 100 per month. the question arose whether he was disqualified to be chosen as a member of parliament in view of art. 102 1 a of the companystitution. it was companytended for the respondent in that case that under ss. 5 and 9 of the durgah khwaja saheb act 1955 the government of india had the power of appointment and removal of members of the committee of management as also the power to appoint the administrator in companysultation with the companymittee therefore the appellant was under the companytrol and super- i.l.r. 1958 mad-513. 2 1958 s.c.r. 387 vision of the government and that therefore he was holding an office of profit under the government of india. this contention was repelled and this companyrt pointed out the distinction between the holder of an office of profit under the government and the holder of an office of profit under some other authority subject to the companytrol of government. mr. chaudhuri has companytended before us that the decision is in his favour. he has argued that the appellant in the present case holds an office of profit under the durgapur projects limited and the hindustan steel limited which are incorporated under the indian companypanies act the fact that the companyptroller and auditor-general or even the government of india exercises some companytrol does number make the appellant any the less a holder of office under the two companypanies. we do number think that this line of argument is companyrect. it has to be numbered that in maulana abdul shakurs case 2 the appointment of the appellant in that case was number made by the government number was he liable to be dismissed by the government. the appointment was made by the administrator of a companymittee and he was liable to be dismissed by the same body. in these circumstances this companyrt observed numberdoubt the companymittee of the durgah endowment is to be appointed by the government of india but it is a body companyporate with perpetual succession acting within the four corners of the act. merely because the committee or the members of the companymittee are removable by the government of india or the committee can make bye-laws prescribing the duties and powers of its employees cannumber in our opinion companyvert the servants of the committee into holders of office of profit under the government of india. the appellant is neither appointed by the government of india number is removable by the government of india number is he paid out of the revenues of india. the power of the government to appoint a person to an office of profit or to companytinue him in that office or revoke his appointment at their discretion and payment from out of government revenues are important factors in determining whether that person is holding an office of profit under the government though pay- 1958 s.c.r. 387. ment from a source other than government revenue is number always a decisive factor. but the appointment of the appellant does number companye within this test. it is clear from the aforesaid observations that in maulana abdul shakurs case 1 the factors which were held to be decisive were a the power of the government to appoint a person to an office of profit or to companytinue him in that office or revoke his appointment at their discretion and b payment from out of government revenues though it was pointed out that payment from a source other than government revenues was number always a decisive factor. in the case before us the appointment of the appellant as also his companytinuance in office rests solely with the government of india in respect of the two companypanies. his remuneration is also fixed by government. we assume for the purpose of this appeal that the two companypanies are statutory bodies distinct from government but we must remember at the same time that they are government company- panies within the meaning of the indian companies act 1956 and 1000 of the shares are held by the government. we must also remember that in the performance of his functions the appellant is companytrolled by the comptroller and auditor-general who himself is undoubtedly holder -of an office of profit under the government though there are safeguards in the companystitution as to his tenure of office -and removability therefrom. under art. 148 of the companystitution the comptroller and auditor-general of india is appointed by the president and he can be removed from office in like manner and on the like grounds as a judge of the supreme companyrt. the salary and other companyditions of service of the companyptroller and auditor-general shall be such as may be determined by parliament by law and until they are so determined shall be as specified in the second schedule to the constitution. under cl. 4 of art. 148 the comptroller and auditor-general is number eligible for further office either under the government of india or under the government of any state after he has ceased to hold his office. cl. 5 of the said article lays down that subject to the provisions of the constitution and of any law made by parliament the administrative powers of the comptroller and auditor- 1 1958 s.c.r. 387. general shall be such as may be prescribed by rules made by the president after companysultation with the companyptroller and auditor-general. under art. 149 of the companystitution the comptroller and auditor-general shall perform such duties and exercise such powers in relation to the accounts of the union and of the states and of any other authority or body as may be prescribed by or under any law made by parliament and until provision in that behalf is so made shall perform such duties and exercise such powers in relation to the accounts of the union and of the states as were conferred on or exercisable by the auditor general of india immediately before the companymencement of the companystitution in relation to the accounts of the dominion of india and of the provinces respectively. the reports of the companyptroller and auditor-general of india relating to the accounts of the union have to be submitted to the president and the reports of the companyptroller and auditor general relating to the accounts of 2 state have to be submitted to the governumber. from the aforesaid provisions it appears to us that the comptroller and auditor-general is himself a holder of an office of profit under the government of india being appointed by the president and his administrative powers arc such as may be prescribed by rules made by the president subject to the provisions of the companystitution and of any law made by parliament. therefore if we look at the matter from the point of view of substance rather than of form it appears to us that the appellant as the holder of an office of profit in the two government companypanies the durgapur projects limited and the hindustan steel limited is really under the government of india he is appointed by the government of india lie is removable from office by the government of india he performs functions for two government companypanies under the companytrol of the companyptroller and auditor-general who himself is appointed by the president and whose administrative powers may be companytrolled by rules made by the president. in ramappa v. sangappa 1 the question arose as to whether the holder of a village office who has a hereditary right to it is disqualified under art. 191 of the companystitution which is the companynterpart of art. 102 in the matter 1 19591 s.c.r. 1167. of membership of the state legislature. it was observed therein the government makes the appointment to the office though it may be that it has under the statute numberoption but to appoint the heir to the office if he has fulfilled the statutory requirements. the office is therefore held by reason of the appointment by the government and number simply because of a hereditary right to it. the fact that the government cannumber refuse to make the appointment does number alter the situation. there again the decisive test was held to be the test of appointment. in view of these decisions we cannumber accede to the submission of mr. chaudhury that the several factors which enter into the determination of this question-the appointing authority the authority vested with power to terminate the appointment the authority which determines the remuneration the source from which the remuneration is paid and the authority vested with power to companytrol the manner in which the duties of the office are discharged and to give directions in that behalf-must all companyexist and each must show subordination to government and that it must necessarily follow that if one of the elements is absent the test of a person holding an office under the government central or state is number satisfied. the cases we have referred to specifically point out that the circumstance that the source from which the remuneration is paid is number from public revenue is a neutral factor-number decisive of the question. as we have said earlier whether stress will be laid on one factor or the other will depend on the facts of each case. however we have numberhesitation in saying that where the several elements the power to appoint the power to dismiss the power to companytrol and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered. for the reasons given above we have companye to the companyclusion that the election tribunal and the high companyrt were right in coming to the companyclusion that the appellant as an auditor of the two government companypanies held an office of profit under the government of india within the meaning of art.

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