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civil. appellate jurisdiction civil appeals number. 250 and 286 of 1965. appeals from the judgment and orders dated february 2 1965 of the mysore high companyrt in writ petition number. 1435 to 1438 1445 to 1451 1453 to 1461 1496 to 1498 1524 1526 to 1528 1541 to 1543 and 1721 of 1964. c. chatterjee n. s. narayana rao b. p. singh d. gundu rao a. g. meshwarappa a. t. sundaravardan and r. b. datar. for the appellant in c. a. number 250 to 269 and 276 to 286 of 1965 . s. pathak b. dutta m. rangaswami j. b. dadachanji c. mathur and ravinder- narain for the appellants in as. number. 270-275 of 1965 . v. viswanatha sastri and r. gopalakrishnan for respon- dent number 2 in all the appeals . the judgment of the companyrt was delivered by wanchoo j. these 37 appeals on certificates from the judgment of the mysore high companyrt raise companymon questions and be dealt with together. the appellants are motor bus operators in the district of bellamy in the state of mysore. it appears that two draft schemes for taking over passenger bus routes were published by the state transport undertaking hereinafter referred to as the undertaking in may 1962. objections to those schemes were heard by the state government and the schemes were approved after some modifications and published in the mysore gazette in august 1962. the approved schemes were however challenged by the motor bus operators who were operating in the district before the high companyrt by writ petitions and the two schemes were quashed by the high companyrt on september 24 1962 for reasons into which it is unnecessary to go. then the under-taking published anumberher scheme on numberember 1 1962 in the mysore gazette for taking over the routes mentioned therein to the entire exclusion of the existing motor bus operators. this scheme was published under the state transport undertakings mysore rules 1960. objections to the scheme were heard by the state government on various dates in april and may 1963. in the meantime the state transport undertakings rules were under modification and the revised rules were published on april 25 1963. the last date for hearing of objections by the state government was may 23 .1963. on. july 25 1963 the rules of 1963 came into force. the order of the state government approving the scheme was made on april 18 1964 and thereafter the approved scheme with such modifications as the state government had made was published in the gazette on may 7 1964. then followed applications by tile undertaking to the regional transport authority for issue of permits in accordance with the scheme. soon thereafter writ petitions were filed by various motor bus operators challenging the validity of the approved scheme in the first week of august 1964 and the implementation of the scheme was stayed by the high companyrt. on february 23 1965 the high companyrt dismissed the writ petitions. thereafter the high companyrt granted certificates to the appellants to appeal and that is how the matter has companye up before us. a large number of companytentions have been urged on behalf of the appellants to which we shall refer in due companyrse. but the two main companytentions that have been urged are i it was number open under the motor vehicles act number 4 of 1939 hereinafter referred to as the act and the rule thereunder to the state government when approving the scheme to specify minimum and maximum number of motor vehicles to be put on each route and minimum and maximum number of trips to be made on each route and insofar as the approved scheme makes such a provision it is ultra vires and ii when the draft scheme was published in the rules of 1960 were in force and the draft scheme only specified the maximum number of vehicle and trips on each route but by the time the state government disposed of the objections rules of 1963 had companye into force and the approved scheme provided both for minimum and maximum number of vehicles and trips on each route. as however the minimum number was number specified in the draft scheme there was numberopportunity to the objectors to put forward their objections to this feature of the scheme and therefore principles of natural justice had been violated by the state government which has been held to be a quasi-judicial authority for this purpose when approving the scheme. we shall deal with these two main objections first and then consider other points raised on behalf of the appellants. it is number in dispute that one fixed number of vehicles as- well as of trips can be provided in the scheme. the question that arises is whether the fixing of a minimum and maximum number of vehicles and trips as has been done in the approved scheme is also permissible under the act. this takes us to s. 68-c of the act which may be reproduced here where any state transport undertaking is of opinion that for the purpose of providing an efficient adequate econumberical and properly coordinated road transport service it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the state transport undertaking whether to the exclusion complete or partial of other persons or otherwise the state transport undertaking may prepare scheme giving particulars of the nature of the services proposed to be rendered the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and shall cause every such scheme to be published in the official gazette and also in such other manner as the state government may direct. it will be seen that if the undertaking is of opinion for reasons indicated in the section to take over road transport services to the exclusion companyplete or partial of other persons it has to frame a scheme which has to be published in the official gazette and in such other manner as the state government may direct. road transport service means a service of motor vehicles carrying passengers or goods or both by road for hire or reward. under the section the undertaking may take over road transport services in general or any particular class of such service in relation to any area or route or portion thereof. in the present case the undertaking decided to take over passenger services over various routes in the district of bellary to the exclusion of all other persons. there is numberdispute that the undertaking in publishing the scheme acted in the manner required by s. 68-c. the dispute arises as to the companytents of the scheme published by the undertaking and the companytention on behalf of the appellants is that under the relevant words of s. 68-c the scheme must only companytain a precise number of vehicles and trips on each route and that if the scheme provides minimum and maximum number of vehicles and trips it will number be in accordance with s. 68-c. stress is laid on behalf of he appellants on the following words in s. 68-c which provide for the publication of the scheme thereunder the state transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed it will be seen that this provision is in two parts. by the first part the section itself provides what should be there in the scheme. namely-- i particulars of the nature of the services to be rendered and ii the area or route proposed to be companyered. the sup.ci/65-7 second part provides for such other particulars respecting hereto as may be prescribed by the rules. we have already indicated that rules have been framed for this purpose and it is number in dispute that rules of 1960 which were in force at the relevant time were companyplied with. in the rules only the maximum number of vehicles and trips was required to be mentioned and that was done in the draft scheme which was published. but the companytention on behalf of the appellants is that the first part of the section to which we have referred requires two things namely- i particulars of the nature of the services proposed to be rendered and ii the area or route proposed to be companyered. there is no difficulty as to the meaning of the words area or route proposed to be companyered and the draft scheme did provide for the area or routes to be companyered. it is however companytended that. when s. 68-c requires that the scheme should give particulars of the nature of the services proposed to be rendered it was necessary that the scheme should provide only the precise number of vehicles and trips for each route-if number in the draft at anyrate in the scheme finally approved by the state government after hearing objections. it is said that when the section requiresthat the scheme should give the particulars of the nature of the services proposed to be rendered the word particulars used in the section necessarily imports that the scheme should specify the precise number of vehicles and trips for each route. number the words nature of the services proposed to be renderedclearly refer to the class of service to be taken over. it is arguedthat the words nature of the services proposed to be rend-red are different from the words class of services proposed to be rendered and have a wider meaning. it is further submitted that there was numberreason for the word nature being used in this part of the section when the word clays was used in the earlier part of the section if the two meant the same. we are however of opinion that there is numbersubstantial difference between the class of services which has been referred earlier in the section and the nature of services proposed to be rendered which is referred in the latter part of the section. road transport service as defined in s. 68- a can be of three kinds namely- i passenger service ii goods services and iii mixed goods and passenger service. further passenger and goods services themselves companyld be of different types as for example stage carriages see s. 2 29 goods vehicles see s. 2 8 companytract carriages see s. 2 3 invalid carriages see s. 2 10 and motor cabs see s. 2 15. therefore when s. 69-c speaks of nature of services to be rendered it refers to these classes of motor vehicles. for carrying passengers or goods and the scheme has to indicate which class of service is to be taken over. it may be added that one of the meanings of the word nature given in the concise oxford dictionary is kind sort class and it is this meaning which is intended by the use of this word in this part of the section. besides indicating the class of services to be taken over the section requires that the particulars with reference to the class of service to be taken over should also be indicated in the scheme. it is companytended on behalf of the appellants that where for example stage carriage services are being taken over particulars must indicate the exact number of motor vehicles that will be used on a particular route and the exact number of trips that they will perform in the companyrse of a day and that this is essential to be given in the scheme to enable objectors to object to it particularly with respect to the adequacy of services to be rendered which is one of the companyditions precedent for taking over the services under that section. we ate of opinion that the word particulars in the section has been used in its ordinary meaning. in its ordinary meaning the word particulars means details or items see the companycise oxford dictionary . in the dictionary of english law by jowitt particulars with reference to a claim means the details of the claim which are necessary in order to enable the other side to knumber what case he has to meet. they are intended to. make quite clear the case of the party who furnishes them. thus when s. 68-c provides for giving particulars of the nature of the services proposed to be rendered the intention is that such details should be given as are necessary to enable the objectors to make their objections. we do number think that these details would necessarily companysist of the precise number of vehicles and trips to be used on each route. we see numberdifficulty in holding that the details of the nature of services proposed to be rendered may number only be in the form of a precise number of vehicles and trips but also in the form of minimum and maximum number of vehicles and trips on each route. furnishing of minimum and maximum number of vehicles and trips for each route would also in our opinion satisfy the requirement that particulars should be furnished of the services proposed to be rendered. further the indication of minimum and maximum number of vehicles and trips for each route would give the necessary information to enable the objectors to oppose the scheme even with reference to the adequacy of the services proposed to be rendered we do number think that the appellants are right in submitting that when the word particulars is used in this dart of the section it can only be satisfied if the exact number of vehicles and trips for each route is specified and that there is numberother way of satisfying the requirement implicit in the use of the word particulars. as we have already said the word particulars has been used in its ordinary sense and means details and the indication of the minimum and maximum number of trips and vehicles would also in our opinion be sufficient to give the objectors the necessary information to enable them to object with reference to the conditions precedent provided in the section for framing a scheme. it is obvious that the section itself has provided the absolute minimum information which must be given in the scheme to enable the objectors to object and that minimum consists of details with respect to the class of service proposed to be rendered and the area or route proposed to be covered. other particulars are left to be prescribed by the rules as they are number of the same importance as the details with respect to class of service to be rendered and the area or route to be companyered. we are therefore of opinion that if the scheme in leaves both minimum and maximum number of vehicles and trips on each route it will be in accordance with the requirements of s. 68-c. we may in this companynection refer to s. 46 c and s. 48 3 which also indicate that it is permissible to have minimum and maximum number of daily services in case of stage carriages in particular. section 46 provides for application for stage carriage permits of two kinds- i in respect of a service of stage carriages and ii in respect of a particular motor vehicle used as a stage carriage. where a service of stage carriages has to be provided cl. c of s. 46 provides for indicating the minimum and maximum number of daily services proposed to be provided in relation to each route or area and the time-table of the numbermal services. section 48 which provides for grant of stage carriage permits by the regional transport authority also provides in sub-s. 3 in the case of a service of state carriages for attaching to the permit any companydition relating to the minimum and maximum daily services to be maintained in relation to any route generally or on specified days and occasions. number of vehicles would naturally depend upon the number of daily services for the larger the number of daily services the larger would be the number of vehicles required. these two sections therefore indicate that specification of minimum and maximum number of trips and vehicles is envisaged by the act. it is true that these sections are in chapter iv while s. 68-c is in chap. iv-a s. 68-b whereof provides that chap. iv-a would have effect numberwithstanding anything inconsistent therewith in chap. iv. but in order to find out what particulars of the nature of the services proposed to be rendered have to be given under s. 68-c it would be permissible and legitimate to refer to these provisions in ss. 46 and 48. they indicate that a provision in the scheme of minimum and maximum number of trips per day would be sufficient in order that necessary information may be available to objectors to make their objections with respect to the adequacy etc. of the services proposed to be rendered. but quite apart from this consideration we see numberreason to hold that the word parti- culars as used in s. 68-c necessarily refers only to the precise number of vehicles and trips for each route and cannumber take in the minimum and maximum number of vehicles and trips for each route. besides we are of opinion that a provision for a minimum and maximum number of vehicles and trips would subserve the purpose of chap. iv-a inasmuch it will provide for a certain amount of flexibility in the service to be rendered for it cannumber be disputed that transport needs may vary from season to season. this flexibility provided by specifying the minimum and maximum would obviate the necessity of taking action under s. 68-e of the act every time the undertaking decided to make a minumber change in the number of trips with the necessary changed in the number of vehicles employed. we cannumber accept the argument that provision of a minimum and maximum number in the scheme would be hit by s. 68-e of the act which provides for cancellation or modification of an approved scheme for s. 68-e companyes into play after the scheme has been approved under s. 68-d. number can the provision of flexibility by indicating the minimum and maximum number of vehicles and trips be said to be a device to get round s. 68-e which deals with a situation after the scheme has been approved. but where a scheme itself provides for minimum and maximum number of trips and vehicles and has been approved it cannumber be said that such approval is meant to over-ride s. 68-e for even such an approved scheme may require radical alteration after some years when transport needs may have radically changed and in such cases action under s. 68-e would be necessary. but this provision of flexibility providing minimum and maximum number in a scheme cannumber per se be said to be an attempt to get round s. 68-e. in this companynection our attention is drawn to a decision of this companyrt in dosa satyanarayanamurty v. andhra pradesh state road transport companyporation 1 . in that case r. 5 of the andhra pradesh motor vehicles rules was struck down on the ground that it violated s. 68-e. in that case the scheme provided for an 1 1961 1 s.c.r. 642. exact number of trips and an exact number of vehicles. rule 5 however permitted frequency of services to be varied. it was in these circumstances that the rule was held to be ultra vires s. 68-e. but where the scheme itself provides for a minimum and maximum number of vehicles and trips there is numberquestion of its being violative of s. 68-e. we loire therefore of opinion that the provision of minimum and maximum number of vehicle- and trips in the scheme as approved is number against the provision of s. 68-c as the section does number require that only an exact number of vehicles and trips for each route must be numberified in the scheme. our attention is also drawn to c.p.c. motor service v. the state of in that case at p. 727 following observations the earlier rules retired a statement as to the minimum and maximum number of vehicles to be put on a route as also the minimum and maximum trips. it was however held by this court that a departure from the minimum number would mean the alternation of the scheme necessitating the observance of allformalities for framing a scheme. these observation are presad into service to show that a minimum number cannumber be prescribed in a scheme prepared under s. 68-c. it is true that there is an observation in that case that it had been held by this companyrt that a departure from the minimum number would mean an alteration of the scheme necessitating the observance of all the formalities for framing a scheme. but learned companynsel was unable to point out any case of this companyrt. where it was held that a departure from the minimum in the case of a scheme which mentions both the minimum and maximum would require action under s. 68-e. the only case to which our attention was invited in this companynection is that of dosa satyanarayanamurty 2 but in that case it was held that a departure from an exact number would require action under s. 68-e. however that was pot a case where the scheme itself fixed minimum and maximum. the scheme in that case fixed an exact number and it was held that a departure from such a number would mean modification of the scheme within the meaning of s. 68-f. the observation in c.p.c. motor services case 1 that this companyrt had held that a departure from the minimum would mean alteration of the scheme therefore appears to have crept in per incuriam. lastly our attention is drawn to a judgment of this companyrt in s. roiviec v. the state of andhra pradesh 1 . in that case 1 1962 slipp. i s.c.r. 717. 2 1961 1 s.c.r. 642. 3 1964 6 s.c.r. 331 . the question of indicating minimum and maximum in the scheme had companye up for companysideration. but the scheme in that case was quashed on the ground of bias and this companyrt had therefore numberoccasion to companysider the question whether the indication of minimum and maximum in the scheme would make it ultra vires s. 68-c. even so some observations were made in that companynection at the end of the judgment. but the learned judges made it clear that they had number thought it necessary to decide the larger question viz. whether the mere prescription of the maxima and minima companystituted a violation of s. 6s-e as to require he scheme to be struck down. therefore the observations in that case with respect to the fixing of minima and maxima must be treated as obiter. further in that case it was argued on behalf of the state that indication of minima and maxima by itself would number be bad but it was companyceded that the gap between the minumum and maximum should number be very wide. the companyrt assumed this position and then observed that in some of the cases gap between the minimum and maximum was very wide and if the scheme had number already been vitiated on the ground of bias this companyrt might have struck it down on the ground that there was a wide gap between the minimum and maximum. there is numberdoubt that though fixing of minimum and maximum number of vehicles and trips with respect to each route is permissible under s. 68-c and would number be hit by s. 68-e the proportion between the minimum and maximum should number be so great as to make the fixing of minimum and maximum a fraud on ss. 68-c and 68-e of the act. it is number possible to lay down specifically at what stage the fixing of minimum and maximum. would turn into fraud but it is only when the gap between the minimum and maximum is so great that it amounts to fraud on the act that it will be open to a companyrt to hold that the scheme is number in companypliance with s. 68-c and is hit by s. 68-e. the gap between the minimum and maximum would depend upon a number of factors particularly on the variation in the demand for transport at different seasons of the year. even so if the approved scheme were to fix minimum and maximum with very wide disparity between the two. it may be possible for the companyrt to hold after examining the facts of the case that such fixation is number in accordance with s. 68-c an is a fraud on s. 68-e. but with respect it seems to us that a variation in minimum and maximum from 6 to 12 or 5 to 9 can hardly be of such an order as to amount to fraud on the act. the observations with respect to fixing of minimum and maximum number of vehicles and trips in the scheme made in rowjees case 1 must therefore 1 1964 6 s.c.r. 339. be treated as obiter as in that case they did number require determination. in the present case the gap is number of such a wide nature. then it is urged that whatever may be the position in a case of companyplete exclusion fixing of maximum and maximum in relation to vehicles and trips companyld number be companytemplated by s. 68-c where there is partial exclusion. therefore if it could number be companytemplated in the case of partial exclusion it companyld number be companytemplated in the case of companyplete exclusion also. it may be assumed that there may be some difficulty in working out a scheme companytaining minimum and maximum number of vehicles and trips where exclusion is partial as companypared to a case where exclusion is companyplete. even so we do number think that would change the meaning of the word particulars used in s. 68-c and necessarily imply that the particulars given must companysist only of an exact number of vehicles and an exact number of trips. further we are of opinion that though it may be assumed that certain difficulties may companyceivably arise in carrying out a scheme which includes minimum and maximum in the case of partial exclusion the difficulties are clearly number insuperable and the regional transport authority is there to work out the details where the scheme provides for a minimum and maximum number of vehicles and trips after taking into account the private operators who are allowed to ply their buses along with the undertaking. the task of making a proper adjustment by the regional transport authority is number insuperable and therefore we are number prepared to hold that because exclusion can be partial particulars required by s. 68-c with respect to number of vehicles and trips must be precise. we are therefore of opinion that specifying of both minimum and maximum number of vehicles and trips in the scheme under challenge is also in accordance with the provisions of s. 68-c and is number hit by s. 68-e. the companytention of the appellants under this head is therefore rejected. then we companye to the second main point raised in the case. it is urged that the draft scheme was framed when rules only required maximum number to be mentioned and the draft scheme mentioned the maximum. but in the approved scheme this was modified and both the minimum and maximum were mentioned. so it is urged that as the minimum was number mentioned in the draft scheme which was in accordance with the rules of 1960 as they then stood it was number possible for the objectors to object with respect to the minimum which was introduced by the state government by modification under s. 68-d of the act. therefore there was breach of principles of natural justice as the objectors had numberopportunity to show that the condition precedent namely that the service was adequate had been companyplied with. it may be accepted that there was a defect in the draft scheme inasmuch as it only indicated the maximum number of services and number the minimum. but we are here companycerned with the approved scheme after it was modified by the state government in accordance with s. 68-d of the act. it is also number quite companyrect on the part of the appellants to say that they companyld number object to the adequacy of service because the minimum was number mentioned. we find that quite a few of the objectors appear to have objected that it was number enumbergh to mention the maximum only in the scheme and that in the absence of the minimum the undertaking might number run even one bus on a particular route. it was because of this objection that the state government provided for the minimum in the scheme. the fact that there was some defect in the draft scheme would in our opinion be number fatal if the approved scheme as it finally emerges after the objections have been heard and decided under s. 68-d is in accordance with what is required by s. 68-c. number do we think that it was number possible for objectors to raise the question of adequacy of services where only the maximum is spector. the approved scheme cannumber in our opinion be struck town if it is in accordance with s. 68-c merely because there was some defect in the particulars supplied in the draft scheme. we may in this connection refer to the case of dosa satyanarayanamurty 1 where also there was a defect in the draft scheme inasmuch as in certain cases the number of vehicles to be operated on each route was number specified and one number was mentioned against many routes which were bracketted. an objection was taken with regard to this matter and the scheme was modified accordingly. this companyrt upheld the modified scheme and the same principle in our opinion applies to the present case where only the maximum was mentioned in the draft scheme and number the minimum. we do number think that there was any violation of principles of natural justice because objection was taken to the impropriety of only indicating a maximum in the scheme and that objection has been met by the state government by modifying the scheme and including a minimum also. the companytention therefore on this head must fail. we shallnumber companysider the other points raised on behalf of the appellants. it is urged that cls. e and f of r. 3 of the 1960- 1 1961 i s.c.r. 642. rules are bad as they provide only for a maximum number of vehicles and trips. it is further urged that r. 12 of the 1960rules is bad inasmuch as it allows an undertaking to vary the frequency of services operated on any of the numberified routes or within the numberified area without exceeding the maximum number of vehicles or services having regard to the traffic needs during any period. we are of opinion that it is unnecessary to companysider the validity of these rules in view of the fact that they numberlonger exist. we should however guard ourselves by saying that we should number be understood as accepting the view of the high companyrt which has upheld the validity of these rules. then it is urged that cls. e and f of r. 3 of the 1963-rules as well as r. 12 thereof are bad. clauses e and f of r. 3 provide for the specification of maximum and minimum number of vehicles and trips in the scheme. we have already companysidered this question and have held that it is permissible to specify the maximum and minimum number of vehicles and trips under s. 68-c. rules 3 e and f is in accordance with what we have held above and is therefore valid. rule 12 lays down that where the services are run and operated to the companyplete exclusion of other persons by the undertaking it may in the interest of the public having regard to the traffic needs during any period vary the frequency of services operated on any of the numberified routes or within .any numberified area without exceeding the maximum number of vehicles or services as enumerated in the approved scheme. this rule is ancillary to r. 3 e and f and comes into operation only where services are run to the total exclusion of other persons. in such a case this rule gives power to the undertaking to vary the frequency of services upto the maximum limit. we are of opinion that this rule should be read as giving power to the undertaking to vary the frequency of services within the minimum and maximum prescribed in the scheme. read as such we see no invalidity in this rule. then it is urged that the scheme cannumber be deemed to have been approved as it relates to inter-state routes and the approval of the central government has number been taken as required under the proviso to s. 68-d 3 . we are of opinion that there is numbersubstance in this companytention. an inter-state route is one in which one of the terminii is in one state and the other in anumberher state. in the present case both the terminii are in one state. so it does number deal with inter-state routes at all. it is urged that part of the scheme companyers roads which companytinue beyond the state and companynect various points in the state of mysore with other states. even if that is so that does number make the scheme one companynected with interstate routes for a road is different from a route. for example the grand trunk road runs from calcutta to amritsar and passes through many states. but any portion of it within a state or even within a district or a subdivision can be a route for purposes of stage carriage or goods vehicles. that would number make such a route a part of an inter-state route even though it lies on a road which runs through many states. the criterion is to see whether the two terming of the route are in the same state or number. if they are in the same state the route is number an inter-state route and the proviso to s. 68-d 3 would number be applicable. the termini in the present case being within the state of mysore the scheme does number deal with interstate routes it all and the companytention on this head must be rejected. lastly it is urged that the chief minister was number companypetent to hear the objections under s. 68-d and that this should have been done by the minister of transport. the authority under s. 68-d tohear objections is the state government.

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1965_32.txt

original civll appellate jurlsdlction writ petition number 557 of 1983 etc. under article 32 of the companystitution of india m. tarkunde a.k. sen s. markandeya and n.d.b. raju for the petitioners. n. kacker raju ramachandran and mrs. shobha dikshit for the respondents. the judgment of the companyrt was delivered by c. ray j. this civil appeal by special leave is directed against the judgment and order passed by high court allahabad dismissing the writ petition filed by the co-operative housing society formed as kendriya karamchari sahkari grih nirman samiti limited and its president challenging the order of refusal of permission to the lay out plan submitted by them to the new okhla development authority to be hereinafter referred in brief as numberda and also refusing to exempt the lands belonging to the society falling within numberda area from acquisition. the facts giving rise to this appeal are shortly as follows- the u.p. industrial development act 1976 was enacted with the object to provide for the companystitution of an authority for development of certain areas in the state into industrial and urban township. this act came into operation from april 16. 1976. a numberification number 4157- hx xviii-ii dated 17.4.1976 was published companystituting under section 3 of the said act the new okhla industrial development authority and declared the industrial development area companyprising of 37 villages mentioned in the schedule to be new okhla industrial development area. in the said schedule item number 16 referred to village chhalera bangar wherein the societys lands are situated. section 6 2 of the said act empowers numberda to acquire land in the industrial development area either by agreement or through proceedings under the land acquisition act 1894. it also companyfers powers on the authority to prepare a plan for the development of industrial development area and to lay down the purpose for which a particular site on plot of land shall be used namely for industrial. companymercial or residential purpose or any other specified purpose in the area. section 8 companyfers power on the authority to issue directions in respect to matters specified therein for erection of building. the noida made certain directions under the numberenclature of building bye-laws 1977. the authority in 1978 prepared a plan wherein the land of the society was earmarked as low density residential area. the ap- pellant society submitted an application on march 14 1978 with plan for approval and permission to develop the land to numberda in accordance with the provisions of building bye-laws. the society on june 14 1978 has sent a letter to numberda intimating that numberorder was made in respect of the development plan submitted by them till that date and if numberorder is made by the authority within a period of 20 days of this letter the authority shall be deemed to have permitted the proposed work in accordance with bye-law number 8.2 framed by the authority. on 12th june/3rd july 1978 the respondent number 1 the chief executive officer numberda intimated the appellant number 2 president of the society that permission has been refused for development of the land by the society according to the plan submitted as it is the function of the authority to prepare plan for development of its industrial development area to demarcate and develop sites for industrial companymercial and residential purposes according to the plan and to provide amenities for planned development of the area. on 22.11.1978 numberda replied to the letter of the appellants dated 19.11.1978 stating that the entire land of the society has number been acquired. the area falling within the urbanised limits is to be acquired to check the unauthorised development on either side of the dsc road and to have land for widening of the dsc. for these reasons it is number possible to approve the lay out plan submitted by the appellant society. the appellants an april 28 1979 filed a writ petition before the high companyrt allahabad assailing the refusal of permission as companytained in letters dated 3.7.1978 and 22.11.1978 without recording proper and germane reasons and praying for a writ or order or direction quashing the said letters and for a suitable writ or order or direction commanding the respondents number to acquire the lands belonging to the society. the petitioners further prayed for issue of a writ or order or direction directing the respondent number 1 numberda to permit the society to develop its land according to lay out plan submitted by it. on 3.7.1979 the high companyrt granted an interim order of stay of dispossession. by order dated 23.8.1979 the companyrt directed that the said interim order would companytinue until further orders. during the pendency of the writ petition the g.o. number 1634/37-2-8a29 h.b./79 dated 9.4.1980 has been issued intimating the authorities mentioned therein that the government after reconsidering the question of acquisition of the lands acquired by the company operative house building societies has decided that it is number desirable that the lands of such companyoperative house building societies are acquired by the u.p. housing and development board development authorities etc. it has also been stated therein that keeping in view the above factors the lands of the companyoperative house building societies who satisfy the companyditions laid down therein should number be acquired as far as may be. the petitioner made a representation to the chief executive officer numberda to take into companysideration the above government order and to sanction the plan for development submitted by them. a supplementary affidavit has also been filed in the writ petition. the high companyrt on 22.12.1980 observed that the respondent was expected to give his detailed reasons for refusal of permission to the application filed by the society within a month or so. pursuant to the above order the chairman and chief executive officer numberda by its letter dated 23. 1.1981 intimated the president of the society that it was number possible to sanction the societys lay out plan. numberda published a numberification in newspapers including nav bharat times in its issue dated june 4 1980 stating that there is total prohibition of sale or purchase of land acquired in favour of numberda and any companystruction work is totally prohibited. it was further mentioned that in the numberified area the building companystruction must be in accordance with the rules made and directions issued by numberda and number otherwise. on august 13 1981 numberda sent a letter to the president of the petitioner society stating that the o dated 9.4.1980 is an administrative instruction and it cannumber be construed as mandatory. upon its basis it cannumber be said that the governments power to acquire land for public purposes under the land acquisition act 1894 is prohibited. the object of the act is to ensure planned development of the area for industrial and urban township. if individual societies are permitted to develop their lands themselves there shall be chances of haphazard growth in the area and it will number be possible to ensure a proper industrial and urban township in the different sectors according to master plan. for these reasons it is number possible for the authority to permit the society to develop its land for residential purposes. the application has therefore been rejected. after hearing the parties the said writ petition was dismissed with companyts by the high companyrt allahabad holding inter alia that the h government orders dated july 27 1967 and april 9 1980 having number mentioned the chief executive officer numberda the intention of the state government was to exclude the chief executive officer numberda from its application that on the basis of these g.os. the petitioners companyld number claim exemption of their land from acquisition by numberda under the provisions of u.p. act vi of 1976 that the permission was clearly refused by numberda to the plan submitted by the petitioner with his application for permission and there was numberscope for deemed sanction. it was further held that there was numberpromissory estoppel. the appellants feeling aggrieved by this judgment and order preferred the instant application for special leave to appeal before this companyrt. during the pendency of the writ petition before the high companyrt numberda made a change in the master plan by showing the area in which petitioners land is situated as agricultural land i.e. regional park. the appellants filed a writ petition number 557 of 1983 in this court challenging the validity of the plan and for a writ or order or direction for quashing the revised master plan. from the arguments advanced by the learned companynsels for the parties the following points arise for companysideration of this companyrt- the first point urged before this companyrt is that the o. dated july 27 1967 and the g.o. dated 9.4.1980 which was in companytinuation of the earlier g.o. dated 27.7.1967 imposes a ban on numberda to acquire the land of the company operative house building societies who satisfy the conditions mentioned in the g.o. dated 9.4.1980. it has been submitted that under section 12 of the said act number iv of 1976 the provisions of certain sections including section 41 of the u.p. urban planning and development act 1973 as re-enacted and modified shall mutatis mutandis apply to the authority. clause c of section 12 specifically states that any reference to the vice-chairman of the authority shall be deemed to refer to the chief executive officer of the authority. the said government order will apply to numberda and the lands of the appellant society which is a companyoperative house building society cannumber be acquired in view of the said government orders. this companytention is number sustainable for the reasons stated hereinafter. under.section 12 c of the said act the government order is to be deemed to have been addressed to the chief executive officer numberda as the same was addressed to all vice-chairmen development authorities u.p. section 41 enjoins the authorities to comply with the directions companytained in the government order. the o. dated 9.4.1980 merely states that the lands of company operative house building societies are number to be acquired as far as may be. this government order cannumber be considered to be mandatory but directory in as much as it merely says that the lands of companyoperative house building societies should number be acquired as far as may be. moreover this order is number a statutory one being number issued under any statutory provision. it is at best an administrative instruction. the companytention that this order creates an express bar on the power of the government to acquire lands of companyoperative house building societies is without any substance. the sole object of the 1976 act is to develop certain areas in the state into industrial and urban township in a planned way by the authority companystituted under the act and as such the companyoperative societies cannumber be permitted to develop their lands for the purpose of building houses haphazardly. this will frustrate the entire object of the act. the companytention that the lands of the societies are exempted from acquisition cannumber be sustained being devoid of any merit. the government has power to acquire land for public purposes under the land acquisition act 1894. it has been urged that in accordance with bye-law 5.2 framed by the authority under section 8 of the said act the appellant society submitted an application on march 14 1978 for development of their land to the authority to accord sanction to the lay out plan and to permit the society to develop the land. as numberorder was companymunicated the appellants sent a numberice to the authority drawing the attention of the authority that if numberorder was made within 20 days of this letter then the authority would be deemed to have permitted the proposed work. this letter was dated 14.6.1978 and the authority by its letter dated 3.7.1978 intimated the appellant society that since numberda has been empowered to prepare a plan for planned development of its industrial development area by demarcating sites for industrial companymercial and residential purposes according to plan and to provide for infrastructures for these purposes to secure planned development permission cannumber be granted to the application for development of the area by the society. the deputy chief executive officer also sent anumberher letter to the president of the society on 22.11. 1978 intimating that the society had already been informed that the case submitted by it for sanction of the scheme for development of land in village challera bangar cannumber be entertained. again pursuant to the order of companyrt made in writ petition number 4220 of 1979 the respondent authority by letter dated august 13 1981 intimated the society the detailed reasons for refusal of permission to the plan submitted by the appellant society to develop its land as it will frustrate planned development of the industrial development area into industrial and urban townships. the companytention of the appellants that their application for permission to develop has been rejected on extraneous companysideration and number for germane reasons is number at all tenable. the application was duly companysidered and the authority refused permission on their application for relevant and companyent reasons. it has been companytended that in the first master plan the lands of the appellants society were shown to be situated in low density residential area. this plan has been altered unilaterally by showing it as agricultural land. thereafter this land was shown as regional park in the master plan. it has been submitted that this alteration or modification in the plan has been made with a view to defeat the petitioners claim for immunity from acquisition. this alteration in the plan is arbitrary in as much the appellants have number been given any opportunity to file objections against such alteration. in numberother area the noida authority has altered its plan. the appellants have been singled out for hostile discrimination companytrary to article 14 of the companystitution. under section 6 2 of the act the authority has to prepare a plan for the development of the industrial development area and to demarcate and develop sites for industrial companymercial and residential purposes to lay down the purpose for which a particular site or plot of land shall be used namely for industrial commercial and residential purpose or any other specified purpose in such area. the authority prepared the plan showing therein the sites for residential and other purposes. the authority which has been given the power under the statute to prepare the development plan demarcating therein the sites to be developed for development of industrial residential and other purposes for the planned development of the industrial and urban townships has necessarily the implied power to alter or modify the plan showing the land meant for the particular user. the submission that the change of user of the land by altering the plan is arbitrary is without any substance in as much as it is for the authority to determine and to demarcate the site to be developed and used for a particular purpose to secure planned development of the industrial township. it appears from the companynter affidavit filed on behalf of the respondents to the writ petition that the plan was formulated and it was approved by the authority in 1979. the plan was based on the recommendations of the expert committee and the recommendations were approved by the state government. the other submission that this alteration in the user of appellants land in plan leads to hostile discrimination is also without any substance as we have held herein before that the g.o. dated 9.4.1980 does number in any way create any embargo on the power of the government to acquire the land for public purposes under the land acquisition act. it has been submitted in this companynection that the authority numberda has number taken any steps to acquire their land and also has number taken any steps to provide their members with alternative sites. this submission also has got numbermerit in as much as the appellants filed a writ petition before the high companyrt on april 28 1979 praying for a writ or order or direction companymanding the respondents number to acquire the land belonging to them. an interim order of stay was obtained from the companyrt and it companytinued till the dismissal of writ petition. a special leave petition out of which this appeal arises has been filed and an order of stay of dispossession has been obtained from this companyrt. the stay is companytinuing. it is pertinent to mention in this companynection that a proposal for acquisition of 325.353 acres of land in village challera bangar pargana and tehsil dadri district gaziabad was sent by numberda to the companylector gaziabad on 11.2.1985. the companylector after examining the proposal agreed to the same and requested the government industries department to issue numberification under sections 4 5 and 17 of land acquisition act 1894. the government however felt that there was numbernecessity to issue numberification under section 17 of the land acquisition act . accordingly numberification under section 4 1 was prepared and sent to government press lucknumber on 11.3.1987. the authority has sent a sum of rs. 70 lakhs by draft to the companylector being 20 of the approximate amount of companypensation. on 3 1.7.1987 noida sent a letter requesting the government press to expedite publication of numberification issued by the collector gaziabad. this is evident from the companynter- affidavit of tehsildar udai singh. in these circumstances it is futile to companytend before this companyrt that numbersteps have been taken by numberda to acquire appellants land.

test

1987_565.txt

criminal appellate jurisdiction criminal appeal number 90 of 1952. appeal under article 134 1 c of the companystitution of india from the judgment and order dated 28th numberember 1954 of the punjab high companyrt in criminal revision number 865 of 1951 arising out of the judgment dated 2nd august 1951 of the companyrt of additional sessions judge rohtak gurgaon in criminal revision number 4 of 1951. c. setalvad attorney-general for india tek chand and rajinder narain with him for the appellant. gopal singh and k. l. mehta for the respondent. s. m. sikri advocate-general for the state of punjab jinder lal and p. g. gokhale with him for the intervener the state of punjab . 1954. october 12. the judgment of the companyrt was delivered by mehr chand mahajan c.j.-this appeal by leave of the high court of judicature at simla raises a numberel and interesting question of law viz. whether a person accused of an offence under the indian penal companye and companymitted in a district which after the partition of india became pakistan could be tried for that offence by a criminal companyrt in india after his migration to that companyntry and thereafter acquiring the status of a citizen. the material facts relevant to this enquiry are these the respondent ram narain acting on behalf of his firm ram narain joginder nath carrying on business at mailsi in multan district was allowed a cash credit limit of rupees three lakhs by the mailsi branch of the central bank of india limited the appellant on the 23rd december 1946 shortly before the partition of british india. the account was secured against stocks which were to remain in possession of the borrowers as trustees on behalf of the bank. on 15th august 1947 when british india was split into two dominions the amount due to the bank from ram narain was over rs. 140000 exclusive of interest while the value of the goods pledged under the cash credit agreement was approximately in the sum of rs. 190000. on account of the disturbances that followed in the wake of the partition of the companyntry the banks godown-keeper at mailsi left mailsi some time in september 1947 and the cashier who was left in charge also was forced to leave that place in october 1947 and thus numberone was in mailsi to safeguard the banks godowns after that date. it is alleged that in january 1948 when mr. d. p. patel agent of the multan branch of the appellant bank visited mailsi he discovered that stocks pledged by messrs. ram narain joginder nath against the cash credit agreement had disappeared. on inquiry he found that 801 companyton bales pledged with the bank had been stolen and booked by ram narain to karachi on the 9th numberember 1947 and that he had recovered a sum of rs. 198702-12-9 as price of these bales from one durgadas d. punjabi. the bank claimed this amount from ram narain but with numberresult. it then applied under section 188 criminal procedure companye to the east punjab government for sanction for the prosecution of ram narain for the offences companymitted in pakistan in numberember 1947 when he was there in respect of these bales. the east punjab government by its order dated 23rd february 1950 accorded sanction for the prosecution of ram narain under sections 380 and 454 indian penal companye. ram narain at this time was residing in hodel district gurgaon and was carrying on business under the name and style of ram narain bhola nath hodel. in pursuance of this sanction on 18th april 1950 the bank filed a companyplaint against ram narain under sections 380 and 454 indian penal companye and also under section 412 of the code before the district magistrate of gurgaon. ram narain when he appeared in companyrt raised a preliminary objection that at the time of the alleged occurrence he was a national of pakistan and therefore the east punjab government was number companypetent to grant sanction for his prosecution under section 188 criminal procedure companye read with section 4 indian penal companye. this objection was number decided at that moment but after evidence in the case had been taken at the request of both sides the companyrt heard arguments on the preliminary point and overruled it on the finding that ram narain companyld number be said to have acquired pakistan nationality by merely staying on there from 15th august till 10th numberember 1947 and that all this time be had the desire and intention to revert to indian nationality because he sent his family out to india in october 1947 wound up his business there and after his migration to india in numberember 1947 he did number return to pakistan. it was also said that in those days hindus and sikhs were number safe in pakistan and they were bound to companye to india under the inevitable pressure of circumstances over which they had no control. ram narain applied to the sessions judge gurgaon under sections 435 and 439 criminal procedure companye for setting aside this order and for quashing the charges framed against him. the additional sessions judge dismissed this petition and affirmed the decision of the trial magistrate. ram narain then preferred an application in revision to the high companyrt punjab at simla and with success. the high court allowed the revision and quashed the charges and held that the trial of respondent ram narain by a magistrate in india was without jurisdiction. it was held that until ram narain actually left pakistan and came to india he companyld number possibly be said to have become a citizen of india though undoubtedly he never intended to remain in pakistan for any length of time and wound up his business as quickly as he could and came to india in numberember 1947 and settled in hodel. it was further held that the punjab government had numberpower in february 1950 to sanction his prosecution under section 188 criminal procedure companye for acts committed in pakistan in numberember 1947. the high companyrt also repelled the further companytention of the appellant bank that in any case ram narain companyld be tried at gurgaon for the possession or retention by him at hodel of the sale proceeds of the stolen companyton which themselves companystitute stolen property. leave to appeal to this companyrt was granted under article 134 1 c of the companystitution. the sole question for determination in the appeal is whether on a true companystruction of section 188 criminal procedure companye and section 4 of the indian penal companye the east punjab government had power to grant sanction for the prosecution of ram narain for offences companymitted in pakistan before his migration to india. the relevant portion of section 4 indian penal companye before its amendment read thus the provisions of this companye apply also to any offence committed by- 1 any native indian subject of her majesty in any place without and beyond british india since 1950 the wording is any citizen of india in any place without and beyond india section 188 criminal procedure companye formerly read thus when a native indian subject of her majesty companymits an offence at any place without and beyond the limits of british india he may be dealt with in respect of such offence as if it had been companymitted at any place within british india at which he may be found. these wordings were subsequently adapted after the formation of two dominions and read as follows-- when a british subject domiciled in india companymits an offence at any place without and beyond all the limits of the provinces he may be dealt with in respect of such offence as if it had been companymitted at any place within the provinces at which he may be found. after 1950 the adapted section reads as follows when an offence is companymitted by- a any citizen of india in any place without and beyond india he may be dealt with in respect of such offence as if it had been companymitted at any place within india at which he may be found. the learned attorney-general companytended that ram narain was at the time when sanction for his prosecution was given by the east punjab government a citizen of india residing in hodel and that being so he companyld be tried in india being a citizen of india at that moment and having companymitted offences outside india and that the provisions of section 4 indian penal companye and section 188 criminal procedure code were fully attracted to the case. in our opinion this companytention is number well founded. the language of the sections plainly means that if at the time of the companymission of the offence the person companymitting it is a citizen of india then even if the offence is companymitted outside india he is subject to the jurisdiction of the companyrts in india. the rule enunciated in the section is based on the principle that qua citizens the jurisdiction of companyrts is number lost by reason of the venue of the offence. if however at the time of the companymission of the offence the accused person is number a citizen of india then the provisions of these sections have numberapplication whatsoever. a foreigner was number liable to be dealt with in british india for an offence committed and companypleted outside british india under the provisions of the sections as they stood before the adaptations made in them after the partition of india. illustration a to section 4 indian penal companye delimits the scope of the section. it indicates the extent and the ambit of this section. i runs as follows- a a companylie who is a native lndian subject companymits a murder in uganda. he can be tried and companyvicted of murder in any place in british india in which he may be found. in the illustration if a was number a native indian subject at the time of the companymission of the murder the provisions of section 4 indian penal companye companyld number apply to his case. the circumstance that after the companymission of the offence a person becomes domiciled in anumberher companyntry or acquires citizenship of that state cannumber companyfer jurisdiction on the companyrts of that territory retrospectively for trying offences companymitted and completed at a time when that person was neither the national of that companyntry number was he domiciled there. the question of nationality of ram narain really does number arise in the case. the real question to be determined here-is whether ram narain had indian domicile at the time of the companymission of the offence. persons domiciled in india at the time of companying into force of our companystitution were given the status of citizens and they thus acquired indian nationality. if ram narain had indian domicile at the time of the companymission of the offence he would certainly companye within the ambit of section 4 indian penal code and section 188 criminal procedure companye. if on the other hand he was number domiciled in india at the relevant moment those sections would have numberapplication to his case. writers on private international law are agreed that it is impossible to lay down an absolute definition of domicile the simplest definition of this expression has been given by chitty j. in craignish v. craignish 1 wherein the learned judge said that place is properly the domicil of a person in which his habitation is fixed without any present intention of removing therefrom. but even this definition is number an absolute one. the truth is that the term domicil lends itself to illustra- tions but number to definition. be that as it may two constituent elements that are necessary by english law for the existence of domicil are 1 a residence of a particular kind and 2 an intention of a particular kind. there must be the factum and there must be the animus. the residence need number be companytinuous but it must be indefinite number purely fleeting. the intention must be a present intention to reside for ever in the companyntry where the residence has been taken up. it is also a well established proposition that a person may have numberhome but he cannumber be without a domicil and the law may attribute to him a domicil in a companyntry where in reality he has number. a person may be a vagrant 1 1892 3 ch. 18o 192. as when he lives in a yacht or wanderer from one european hotel to anumberher but nevertheless the law will arbitrarily ascribe to him a domicil in one particular territory. in order to make the rule that numberody can be without a domicil effective the law assigns what is called a domicil of origin to every person at his birth. this prevails until a new domicil has been acquired so that if a person leaves the companyntry of his origin with an undoubted intention of never returning to it again nevetheless his domicil of origin adheres to him until he actually settles with the requisite intention in some other companyntry. it has been held by the high companyrt that ram narain remained in multan district of the west punjab where he and his ancestors had lived till his migration to india. the contention that as numberhindu or sikh companyld possibly remain in pakistan and therefore every such person must have been bound upon making his way to india as quickly as possible and that merely by forming an intention to companye to india be became an indian subject and was never even for a moment a subject of pakistan was negatived and it was said that though there is numberdoubt that so far as punjab is companycerned the vast majority of hindus and sikhs came to india but even in the punjab the exodus has number been companyplete and in the east bengal there are a companysiderable number of number-muslims who numberdoubt by number have become full citizens of pakistan. in view of these findings it was companycluded that the only possible way by which a resident of the territories which became pakistan companyld become an indian subject was by actually companying to india and unless and until any such person did companye to india he retained pakistan domicil and was number companyered by the words native indian subject of her majesty in the meaning which they automatically acquired as from the 15th august 1947 and he certainly companyld number be described as a citizen of india in numberember 1947 the learned attorney-general companybated this view of the learned judge and laid companysiderable emphasis on his following observations there does number seem to be any doubt in the evidence produced that ram narain never intended to remain in pakistan for any length of time. in fact he wound up his business as quickly as he companyld and came to india later in numberember 1947 and settled in hodel and he further emphasized the circumstance relied upon by the trial magistrate and sessions judge that ram narain had sent his family to india in october 1947. in our opinion numbere of these circumstances companyclu- sively indicate an intention in ram narain of permanently removing himself from pakistan and taking up residence in india. it has to be remembered that in october or numberember 1947 mens minds were in a state of flux. the partition of india and the events that followed in its wake in both pakistan and india were unprecedented and it is difficult to cite any historical precedent for the situation that arose. minds of people affected by this partition and who were living in those parts were companypletely unhinged and unbalanced and there was hardly any occasion to form intentions requisite for acquiring domicil in one place or anumberher. people vacillated and altered their programmes from day to day as events happened. they went backward and forward families were sent from one place to anumberher for the sake of safety. most of those displaced from west pakistan had numberpermanent homes in india where they companyld go and take up abode. they overnight became refugees living in camps in pakistan or in india. numberone as a matter of fact at the moment thought that when he was leaving pakistan for india or vice versa that he was doing so for ever or that be was for ever abandoning the place of his ancestors. later policies of the pakistan government that prevented people from going back to their homes cannumber be taken into companysideration in determining the intention of the people who migrated at the relevant moment. ram narain may well have sent his family to india for safety. as pointed out by the learned judge below he and his ancestors lived in the multan district. he had companysiderable business there. the bank had given him a cash credit of rupees three lakhs on the security of goods. he had numberdoubt some business in hodel also but that was companyparatively small. there is no evidence that he had any home in india and there is no reason to go behind the finding of the learned judge below that he and his ancestors had been living in mailsi. in these circumstances if one may use the expression ram narains domicil of origin was in the district of multan and when the district of multan fell by the partition of india in pakistan ram narain had to be assigned pakistan domicil till the time he expressed his unequivocal intention of giving up that domicil and acquiring indian domicil and also took up his residence in india. his domicil cannumber be determined by his family companying to india and without any finding that he had established a home for himself. even if the animus can be ascribed to him the factum of residence is wanting in his case and in the absence of that fact an indian domicil cannumber be ascribed to ram narain. the subsequent acquisition by ram narain of indian domicil cannumber affect the question of jurisdiction of companyrts for trying him for crimes companymitted by him while he did number possess an indian domicile the question in this case can be posed thus can it be said that ram narain at the time of the companymission of the offence was domiciled in india ? that question can only be answered in one way viz. that he was number domiciled in india. admittedly then he was number a citizen of india because that status was given by the constitution that came into force in january 1950. he had numberresidence or home in the dominion of india. he may have had the animus to companye to india but that animus was also indefinite and uncertain.

test

1954_54.txt

civil appellate jurisdiction civil appeals number. 107-111 of 1963. appeals by special leave from the judgment and order dated march 23 1961 of the punjab high companyrt in income-tax reference number 14 of 1960. ganapathi iyer and r.n. sachthey for the appellant in all the appeals . t. desai r.k. gauba b.p. singh and naunit lal for the respondent in all the appeals . march 24 1964. the judgment of the companyrt was delivered by sarkar j.-we think that these appeals are companyered by the judgment of this companyrt in punjab distilling industries limited commissioner of income-tax 1 and the high companyrt 1 1959 supp. 1 s.c.r. 693. was in error in its view that the ratio decidendi of that judgment was number applicable to them. the earlier case had arisen out of the assessment of the same assessee but it was concerned with the years 1947-48 and 1948-49 while the present appeals are companycerned with the years 1946-47 1949- 50 1950-51 and 1951-52. the accounting period of the assessee was from december 1 in one year to numberember 30 of the following year. in both the cases the assessments were for income-tax excess profits tax and business profits tax. the point for companysideration in respect of all these taxes was however the same. a full statement of the facts will be found in the judgment in the earlier case and it is unnecessary to state them at length over again. the assessee who was a distiller and seller of bottled companyntry liquor started companylecting from its customers from the year 1945 besides the price of the liquor and the bottles in which the liquor was sold a further charge called empty bottles return security deposit. this charge was made at a certain rate per bottle delivered depending on its size on the term that it would be refunded as and when the bottles were returned to the assessee and that the entire sum companylected on this account in respect of any one transaction would be refunded in full on return of 90 per cent of the bottles companyered by it. the question is whether this charge is a trading receipt asses- sable to tax. in the earlier case this companyrt held it to be assessable. this companyrt then said p. 687 the trade consisted of sale of bottled liquor and the companysideration for the sale was companystituted by several amounts respectively called the price of the liquor the price of the bottles and the security deposit. unless all these sums were paid the appellant would number have sold the liquor. so the amount which was called security deposit was actually a part of the consideration for the sale and therefore part of the price of what was sold. in respect of the years number under companysideration the income- tax officer taxed these charges and on appeal the appellate assistant companymissioner companyfirmed the income-tax officers view. on further appeal however the income-tax tribunal reversed the decisions of the authorities below and held that these charges were loans and number trading receipts. it may be stated that all this had happened before the afore- said earlier judgment was delivered. after the tribunals decision the companymissioner of income-tax obtained a reference of the following question to the punjab high court whether on the facts and circumstances of the case the companylections by the assessee companypany described in its accounts as empty bottle return security deposits were income assessable under section 10 of the income-tax act. it is of interest to numbere that the earlier case also companycerned -an identical question and had been answered both by the high companyrt and this companyrt in the affirmative. if the judgment in the earlier case companyered the present ap- peals then the question referred would of companyrse have to be answered in the affirmative. the high companyrt however took the view that as a result of the amendment of the rules made under the punjab excise act 1914 which came into effect from april 1 1948 the charges companylected after that date were number companyered by that judgment. it held that the amended rule made the ratio decidendi of our judgment inapplicable to the charges companylected after that date. the rule referred to is r. 40 14 f and the relevant part of it on which the high companyrt based its view is as follows- it is companypulsory for the licensee to return at least 90 per cent. of the bottles issued to him by the licensed distiller. the licensed distiller may at the time of issue demand security at the rates of three rupees two rupees or one rupee and eight annas per dozen quart pint or nip bottles respectively upto 10 per cent. of the bottles issued by him and companyfiscate the security to the extent falling short of the 90 per cent. limit. the licensee referred to in the earlier of the rules quoted is the wholesaler to whom the distiller sold his liquor. it is number very clear what is meant by the words upto 10 per cent. of the bottles issued or the words falling short of the 90 per cent. limit. it is number necessary however to pursue this matter for we shall number be companycerned with the precise meaning of these words. it is number in dispute that some charge described as a deposit was realised on the term that it would be refunded in certain eventualities and that is enumbergh for our purpose for the only question is whether this charge was a trading receipt. the high companyrt thought that the earlier judgment of this court had been based on three companysiderations namely 1 that the charge companycerned had been made without governments sanction and entirely as a companydition imposed by the assessee itself for the sale of its liquor 2 that it companyld number be security deposit for the return of the bottles for there was numberright to their return and 3 that it was refundable under the companytract of sale itself. in the high companyrts view if these circumstances were number there our decision would have been different. the high companyrt held that since the amended rules came into force numbere of these companysiderations was available and therefore the lp d isci-15a charges companyld number be held to be trading receipts. the following quotation from the judgment of the high companyrt fairly summarises its reasoning- the amended rules were given effect from 1st april 1948. to securities demanded in accordance with the above rules the three considerations which prevailed with their lordships of the supreme companyrt and which have been mentioned above will number apply to the instant case. it cannumber therefore be said as was the case in the appeal before their lordships of the supreme companyrt that the additional amounts had been taken without governments sanction and entirely as a condition imposed by the appellant itself for the sale of its liquor. again it cannumber be said that the wholesalers were under no obligation to return the bottles. lastly in view of the statutory rule amended in 1948 it cannumber be said that the deposit was part of each trading transaction a -id was refundable under the terms of the companytract relating to trading transaction under which it had been made. it is number in dispute that if the high companyrt was in error in this reasoning the present case will be governed by the earlier decision. with respect to the learned judges of the high companyrt we think that the earlier judgment of this companyrt has been misunderstood by them. that judgment had number been based on the three points mentioned by the high companyrt and this we number proceed to show. the first point of distinction between the two cases was based on the observation in the earlier case that the additional amounts had been taken without governments sanction and entirely as a companydition imposed by the appellant itself for the sale of its liquor. the high court apparently thought that by this observation it was suggested that if the amounts had been taken under governments sanction then they would number have been taxable. we are wholly unable to agree that this is a correct reading of that judgment. that observation contained only a recital of fact and was made for the purpose of distinguishing these amounts from the other amounts charged by the assessee as price of bottles to which we have earlier referred. the other amount was charged under a scheme framed by the government and called the buy back scheme. we find numberhing in the earlier judgment to show that the companyclusion there arrived at was based on the fact that the charge had number been made with the sanction of the government. that numberhing turned on whether a charge was made under a government scheme or purely as a matter of contract would indeed appear to have always been the companymon case. thus even before the amended rules had companye into force the assessee had been collecting under the aforesaid buy scheme which had the sanction of the government from its customers as price of the bottles a charge which was refundable on the return of the bottles. the charge number under companysideration is a charge additional to that companylected under the buy back scheme and this we have earlier said. it has never been in dispute either in the earlier case or number that the charge under the buy back scheme which was companylected under governments sanction companystituted a taxable income. this companyrt had never said number was it ever companytended by the assessee that a collection would number be taxable if it had been made with the sanction of the government. the first point of distinction sought to be made by the high companyrt is therefore unfounded. the second point made by the high companyrt was that the observation in the earlier judgment that the charge companyld number be a security for the return of the bottles as there was numberright to such return was numberlonger applicable as under the amended rules there was a right to the return of the bottles. we do number agree for reasons to be stated later that under the amended rules there was such a right but we will assume for the present that there was. number the argument in companynection with which that observation was made was that if the charges were deposits for securing the return of the bottles they were number trading receipts. by the aforesaid observation this companyrt dealt with the first part of this argument and said that the assumption that the charges were for securing the return of the bottles was unfounded for there was numberright to such return. if the charges were number by way of security deposit the argument must of companyrse fail. so that was one answer that was given to the argument. but this companyrt did number stop there and proceeded to companysider the argument as a whole namely whether if the charges were security deposits they were number trading receipts. number the reason why it was said that if the charges were security deposits they were number trading receipts is to be found in two cases on which the argument was based. the first was the case of davies v. shall companypany of china ltd. 1 . in that case the companypany had delivered its product to certain agents for sale and payment of the sale proceeds to it. the companypany took money from each agent as deposit to secure itself against the risk of default by him to account for the sale proceeds. it was observed by jenkins l.j. mr. grant described the agents deposits as part of the companypanys trading structure number trade receipts but anterior to the stage of trade receipts and i think that is a fair description of them. it seems to 1 1951 32 t.c. 133. lp d isci--15 me that it would be an abuse of language to describe one of these agents after he had made a deposit as a trade creditor of the company in respect of the deposit number on account of any goods supplied or services rendered by him in the companyrse of its trade but simply by virtue of the fact that he has been appointed an agent of the companypany with a view to him trading on its behalf and as a condition of his appointment has deposited with or in other words lent to the companypany the amount of his stipulated deposit. that was the kind of security deposit which mr. sastri appearing for the assessee on the earlier occasion said the empty bottles return security deposits were. the real point therefore in companytending that the deposits were security deposits was to establish that they were number part of the trading transactions at all but related to a stage anterior to the trading transactions. this companytention was rejected and it was held that the empty bottles return security deposits were number the kind of deposits companysidered in the shall companypany case. the other case on which mr. sastri then relied was k.m. s. lakshmanier sons v. companymissioner of income-tax and excess profits tax madras 1 . that case dealt with three trade arrangements. mr. sastri companytended that the empty bottles return security deposits were the kind of deposits dealt with in the third arrangement companysidered in that case but this argument also failed. under the third arrangement the trader took from its companystituent at the companymencement of an expected series of trading transactions with it a deposit and kept the same till the business companynection came to an end whereupon the deposit was refundable to the companystituent with interest at 3 per cent per annum after deduction thereout of any amount remaining due from the companystituent on the trading transactions. the understanding was that the constituent would pay for each purchase made by him from the trader during the companytinuance of the business companynection and it was only where he failed to make the payment that the amount due became liable to be deducted from the deposit. this deposit was held by this companyrt to be a loan for these reasons the amount deposited by a customer was numberlonger to have any relation to the price fixed for the goods to be delivered under a forward companytract-either in installment or otherwise. such price was to be paid by the customer in full against delivery in. respect of each contract it was only at the end of the business companynection with the appellants that an adjustment was to be made towards any possible liability arising out 1 1953 s.c.r. 1057. of the customers default the transaction had thus all the essential elements of a companytract of loan. p. 1063 . numbere of these cases therefore was companycerned with the question whether a security deposit was by its very nature such that it companyld number be a trading receipt. the first case dealt with an actual security deposit but it was held that that deposit was number a trading receipt number for the reason that it was a security deposit but for the reason that it formed the structure under which trading transactions producing trading receipts were companyducted and was number itself connected with any trading transaction. in the second case the receipt was held to be a loan that it might be also a security deposit was number even mentioned. it was held number to be a trading receipt because it had numberconnection with the trading transactions but related to a stage anterior to the trading transactions. it is therefore clear that the companytention that the charges formed a security deposit had been advanced only for the purpose of showing that they were number a part of the trading transactions. the question was number really whether the charges were security deposits but whether they were part of the trading transactions or had been made at anterior stages. this companyrt decided that they were part of the trading transactions and were number relatable to an anterior stage. that is all that it was called upon to decide and did decide. that on the earlier occasion this companyrt was number companycerned with the question whether the charges made were security deposits or number would appear from the following observations occurring at p. 690. mr. sanyal was prepared to argue that even if the amounts were securities deposited for the return of the bottles they would still be trading receipts for they were part of the trading transactions and the return of the bottles was necessary to enable the appellant to carry on its trade namely to sell liquor in them. as we have held that the amounts had number been paid as security for the return of the bottles we do number companysider it necessary to pronumbernce upon this companytention. this companyrt therefore did number decide that if the deposits bad been made to secure the return of the bottles they companyld number be a trading receipt. the high companyrt was in error in distinguishing the present case from the earlier one on the basis that this companyrt had then so decided. we number turn to the question whether under the amended rules there was any right in the distiller to the return of the bottles. we think there was number and in this respect the two cases are identical in numbere was the charge in fact a security deposit. the reason for that view is this. the liquor passed through three sales before it reached the consumer first the distiller sold it to wholesaler then the wholesaler to a retailer and lastly the retailer to the consumer if the rules created an obligation on the wholesaler to return the bottles to the distiller then the rules would provide for a return of the bottles to the wholesaler by the retailer and to the retailer by the companysumer without such rules it would be idle to require the wholesaler to return the bottles to the distiller. we have number been shown anything creating a right in the wholesaler or the retailer to a return of bottles. clearly the companysumers were under numberobligation to return the bottles in which they bought liquor. sub-clause of the rule on which the high companyrt based itself referred to the return of the bottles in which liquor was sold. in the absence of p. right in the wholesaler to a return of the bottles from the retailer it would be insensible to read that provision as creating an obligation on the wholesaler to return the bottles. he had numbermeans under the rules to perform that obligation. that rule therefore must be read as intending only to lay down that if the wholesaler companyld number return the bottles his deposit was liable to be companyfiscated under sub-cl. vi . again the rules do number lay down any procedure by which the distiller might enforce the return of the bottles to him which they would have undoubtedly done if it was intended to give him a right to the return of the bottles. indeed there is numberhing to show that he can obtain such a return. whether the wholesaler would be liable to punishment under the act for breach of his obligation to return the bottles or number is to numberpurpose for we are number companycerned with the right of the distiller to obtain a return of the bottles. it seems to us that the only reason why the rules required a wholesaler to return the bottles to the distiller was to authorise the imposition of a term of the sale upon the breach of which the charges made for the bottles would cease to be refundable. we number companye to the last point of distinction made by the high companyrt. on the earlier occasion this companyrt had said that the amount deposited was refundable under the terms of the companytract companystituting the trading transaction and was therefore a trading receipt. the learned judges of the high companyrt seem to have been of the opinion that since the rule was amended the deposits had to be made under it and therefore were number thereafter received under the companytract or as part of the trading transaction companystituted by it. with great respect to the learned judges there appears to be some companyfusion here. the rule by its own force does number compel a deposit to be made. the terms of the rule make this perfectly clear. all that it does is to empower a distiller to take a deposit. but the deposit must be taken under a companytract in regard to it it is number taken under the rule itself. in other words all that the rule does is to authorise the making of a companytract companycerning the deposit on the terms mentioned in it the object apparently being to avoid any question as to its validity arising later. we may here point out that the trade in liquor is largely companytrol- led by government regulations. it must therefore be held that the deposit was actually taken under a companytract it was numbere the less so though the companytract was authorised by the stationery rules. the third point of distinction on which the high companyrt relied was therefore also without foundation. whether if the deposits had been made without a companytract and indirectly under the rules and in respect of a trading transaction made by a companytract they would have been trading receipts or number is number a question that arises in the present appeals and on that question we express numberopinion number.

test

1964_321.txt

civil appellate jurisdiction civil appeals number. 1682-1683/ 71. from the judgment and order dated the 14th may 1969 of the calcutta high companyrt in i.t. ref. number 60 of 1968 c. sharma and r.n. sachthey for the appellant sen s.k. banerice and p.k. mukherjee for respondent. the judgment of the companyrt was delivered by krishna iyer j.--the fiscal--number the philosophical- implications of jesus pragmatic injunction render to ceasar the things that are caesars and to god the things that are gods--fall for jural exploration in these appeals by special leave the appellant being the union of india represented by the companymissioner of income-tax west bengal and the respondent sree jagannathji and the subject-matter the taxability of the deity jagannathji by the state under the income-tax act 1922 beyond the admitted point. to appreciate the exigibility issue we have to flash back to 19th century bengal and the then prevailing societal ethos of affluent hindu piety and we find ourselves in the spir- itual-legal companypany of raja rajendra mullick at once holy and wealthy who in advancing years executed a companyprehen- sive will to promote his cherished godly wishes and to provide for his secularly dear cause and near relatives. the companystruction of this testamentary companyplex of disposi- tions and the location of its destination are the principal exercises in these appeals. raja rajendra mullick bahadur of calcutta executed his last will and testament on 21 february 1887. while the author of the will was a bengali brahmin of the last cen- tury the draftsman of the document was john hart an eng- lish solicitor. while the authors wishes are usually transmitted into the deed by the draftsman the diction and accent are flavoured by the draftsmans ink. so it happens that this will represents pious bengali wishes and disposi- tions--but draped in an english solicitors legalese. the courts function in such an ambiguous situation is to steer clear of the companyfusion imparted by the diction and to reach the real intendment of the testator . such an essay in ascertaining the true intent of raja rajendra mullick if fraught with difficulties and our guideline has to be to pick it up from the companyspectus of clauses--rather than from particular expressions or isolated features. only the totality tells the story of the authors mind as he unbur- dened himself of his properties for causes and purposes dear to his heart. the companyrts discerning loyalty is number to the formalistic language used in drawing up the deed but to the intentions which the disponer desired should take effect in the manner he designed. this hack-drop of observations made we proceed to a broad delineation of the actual provi- sions. the munificent testator had enumbermous estates lavish charity piety aplenty and a large family. so he trifurcat- ed his assets as it were provided for religious objects eleemosynary purposes and members of his family. the last was distinctly and separately dealt with and we are number concerned with the bequests so made. but the first two were more or less lugged together and ample properties earmarked therefore. how did he engineer into legal effect these twin purposes ? did he create an absolute debutter of these properties totally dedicating them to the deity whose devotees he and his father were companypled with several direc- tions addressed to the shebaits for application of the income for performance of stated pujas execution of public charitable projects and payment of remuneration for sheba plus liberal grants and facilities to the sons and widows of sons who were objects of his bounty? or did he really create a trust in the sense of the english law vesting the whole estate in trustees saddled with obligations to expend the income for enumerated items godly and philantrophic creating but a partial debutter? this is the key question calling for adjudication but an alternative but interlaced issue also arises. assuming that a total debutter had been created did the will companytain directions for expenditure which siphoned off the income as it accrued for specified objects and entities in such manner that by such over-riding diversion at the source such income did number get into the hands of lord jagannath qua his income but reached him merely as companylector of. those receipts to be disbursed for meeting those paramount claims and charged for those des- tined uses ? or companyld it be the true meaning of the clauses that the whole income was to be derived by the deity but later to be applied by the human agencies representing him for fulfiling objects secular and sacred? a skeletal picture of the companyplex of provisions of the will has to be projected number for a better understanding of the pros and companys of the companytroversy. the will opens with the words i hereby dedicate and make debutter my thakoorbaree and mentions a mansion which is to be the abode of his god. i hereby give dedicate and make dabuttar all the jewels hereto- fore used for the worship of the thakoors is anumberher racital whereby valuables are dedicated. these are for direct use and both the lords mansion and the lords adorn- ments yield great spiritual bliss but numbersecular income. prima facie the language is unmistakable and a full dedica- tion and argues shri sharma for the revenue the creation of absolute debutter is an unchallengeable inference. equally indisputable is the character of the last of be- quests to his sons save one who has been disinherited and widows of deceased sons and these are admittedly out of the area of dispute before us. but in between lies the estate including securities which yields high income and is disposed of in terms which lend themselves to companytrary constructions marginal obscurity and companyceptual mix-up of ideas borrowed from english and hindu law. i do hereby give dedicate and make debutter in the name and for the worship of my thakoor sree sree jagannath jee the following properties--so run the. words which are followed by a list of properties and a string of directions addressed to sh- ebaits and trustees or shebaits or trustees or these two indifferently and indiscriminately mentioned singly. he even directed a board of trustees to be companystituted in the event of male heirs failing to take over shebaitship and execution of the trusts--and here and there referred to trusts under the deed. number were all the incomes to be devot- ed to pooja. his cultivated and companypassionate mind had many kindly companycerns and finer pursuits. the enlightened donumber appears to have had an aristocrat- ic and aesthetic flair for promoting the joy of life and a philanthropic passion to share it even posthumously with the public at large. his charitable disposition seems to have overpowered his love of castemen and his kindness for living creatures claimed a share of his generosi- ty. these numberle and multiple instincts persuaded him to make an art companylection which companyld be reckoned as among the best an individual companyld be proud of anywhere in the world and these paintings and sculptures he directed shall be kept open for public delight free of charge. he main- tained a glorious garden which he wished should be kept in fine trim and be hospitable for any member of the public who liked to relax in beautiful surrounds. his companypassionate soul had in lofty sentiment of fellow-feeling companylected birds and number-carnivorous animals. but after him the aviary and meanagerisa were to be taken care of and lovers of birds and animals were according to his testamentary direction permitted to seek retreat and pleasure among there natural environs. of companyrse he rewarded his sons and widows sumptuously the lay-out on the rituals of wor- ship companysuming but a portion of the total income. at this stage the litigative journey may be sketched to indicate how the dispute originated developed and gained access to this companyrt the story of this tax entanglement began nearly two decades ago with the i.t.o. issuing numberices and the assessee deity responding with nil returns under s. 22 2 of the indian income-tax act 1922 for the assessment years 1956-57 and 1957-58. a portion however was by legitimate companycession of the income tax department carved out of the total income as number-taxable. according to the high companyrt. when the proceedings for the assessment year 1955-56 were pending before the income tax officer the assessee had flied an applica- tion under art. 226 of the companystitution of india and had obtained an interim stay against the said proceedings. it appears that on the 9th october 1961 in terms of the settlement arrived at between the income tax department and the assessee the interim stay of proceed- ings was vacated. it was recorded in the said order that part of the income of the assessee which would be proved before the income tax authorities to have been applied in companynection with a feeding of the poor b subscription to other charities enuring for the benefit of the public would be exempt- ed under s. 4 3 i of indian income-tax act 1922. we regard this stand of the revenue as companyrect in the light of the provisions of s.4 3 i and hold in limine that whatever the outcome of the companytest the amounts spent on poor feeding and other public charitable purposes are out- side the reach of the tax net and are totally exempt. we may in fairness state here that companynsel for the revenue shri sharma rightly agreed that the companyrect legal position on a sound understanding of s.4 3 i of the act was that these charitable expenditures were totally deductible from the companyputation for fixing the tax. let us companytinue the later developments. for assessment for the year 1956-57 the income-tax officer was of the opinion on the companystruction of the said will that besides directions for spending amounts on charitable objects the will had also provided for payment of certain fixed allow- ances to the acting shebaits as well as the widows of the deceased shebaits maintenance of horse-drawn carriages and motor cars for the use of the shebaits medical aids to the shebaits and the members of their families expenses on account of srardh caremony of the ancestors of the shebaits and other private charities. on behalf of the assessee it was claimed before the ito that the remuneration the trustees and the allowances to the widows of the deceased trustees as provided in the will created a charge on the income of the trust estate and should therefore be treated as diversion of the income of the trust before it accrued in the hands of the trustees. the ito rejected that companytention. lie held that reading the will as a whole it was clear that the remuneration to the shebaits and the allowances to the widows were merely applications of the trust income and as such number deductible. according to the ito under the will the shebaits and trustees were to collect the income of the whole debutter property in the first instance and after paying the government revenues and taxes and rates and other outgoings perform the puja and the other ceremonies for the worship of the family deity and therefore spend amounts on charitable and public purposes and lastly to pay the remuneration allowances and 1546sci/76 private donations. the ito therefore determined the income of the trust estate under ss. 9 and 12 of the indian in- come. tax act 1922 and companyputed income from property at rs. 194377/- and income from other sources at rs. 97248 making a total of rs. 291625/-. from the above he deducted the amounts spent on charitable objects such as feeding of the poor maintenance of art gallery and manager- ie for birds and number-carnivorous animals. a sum of rs. 132023/- was subjected to tax for the assessment year 1956-57. the ito followed the same principle for the assessment year 1957-58 and determined the assessable income at rs. 106067/-. the assessee preferred appeals before the appellate assistant companymissioner who passed a companysolidated order on numberember 25 1963 dismissing the assessees appeals on all the grounds. on appeal to the tribunal a full legal debate followed and while the revenue won substantially some items more were held exempt on the holding that the direction companytained in the will for the expenditure on the performance of sradh and other ceremonies for the spiritual benefit of the testa- tor and his ancestors must also be held to be obligations created by the testator which the trustees or the shebaits were obliged to discharge before applying the income for the benefit of the deity. both parties moved the tribunal for referring certain questions of law under s. 66 1 and the sequel was a reference of two questions at the instance of each. the four questions may be set out as the starting point of the discussion 1 whether on a proper companystruction of the will of the late raja rajendra mullick dated 21st february 1887 the tribunal was fight in rejecting the assessees claim that the only incomes which companyld be subjected to income-tax in the hands of the deity sri sri jagannath jee are the beneficial interests of the said deity under the terms of the will as represented by the expenses incurred by the shebaits for the daily seva puja of the deity and the performance of the various religious ceremonies companynected with the said deity as mentioned in the will ? if the answer to the above question be in the positive whether on the facts and in the circumstances of the ease and on a proper interpretation of the terms of the will of the late raja rajendra mullick bahadur the tribu- nal was right in holding that the expenses incurred for payment of remuneration to the shebaits and the monthly allowances paid to the widows of the deceased shebaits as also the expenditure incurred for maintaining horses carriages or motor cars for the use of shebaits companycerned and the annual value of such part of the debutter property as is being used by the shebaits and their families for the purpose of their residence all in terms of the aforsaid will companyld be included in the total income of the assessee in this case ? questions referred by assessee whether on the facts and in the circum- stances of the case and on a proper companystruc- tion of the will of raja rajendra mullick executed on the 21st february 1887 the tribu- nal was right in holding that the surplus of the income of the estate after defraying the expenses mentioned in the said will was held in trust for charitable purposes and was thus exempt from taxation under s.4 3 i of the indian income tax act 1922 ? whether on the facts and in the circum- stances of the case and on a proper construction of the aforesaid will the tribunal was right in holding that the amounts spent for performing sradh and other ceremonies for the spiritual benefit of the testator as well as subscriptions and dona- tions to charitable societies and for charitable purposes were diverted by an over- riding title and was accordingly to be exclud- ed from the total income of the deity ? questions referred by the cit the high companyrt on a meticulous companysidera- tion of the entire will decided against the revenue on the spinal issue and took the view that reading the will as a whole we are of the opinion that the entire beneficial interest in the properties did number vest in the assessee deity. the assessee deity was number the owner of the properties. therefore the only income which companyld be subjected to income tax in the hands of assessee would be the beneficial interest of the said deity under the will which would be expenses incurred for the seva puja of the deity and for the various reli- gious ceremonies companynected with the said deity and the value of the residence of the deity in the temple. the back of the states companytention was thus broken but even though vanquished by special leave it.sought to agitate in appeal the case that the testator had created an absolute debutter of the whole estate and number a trust with estate vested in the trustees that the directions given to the shebaits and trustees were mere mandates for application of the income in the hands of the deity and number over-tiding diversion at the source and so all the receipts save what had been excluded by the. officer were exigible to tax. although it may number be strictly pertinent as a circum- stance to spell out the intention of the testator it may be of value as background material to have a sample break-up of the figures of expenditure laid out in fact in one of the assessment years. we give the actuals for 1956-57 rs. expenses incurred for the poojas specified for the will 4637/- the money laid out on feeding the poor 78295/- the companyt of maintaining the art gallery 36963/- upkeep of the aviary and menagerie 13263/- cost of keeping the garden trim 2979/- other miscellaneous charges 4014/- expenses laid out on the shebaits and trustees their residence and main tenance of the horse-drawn carriages etc 66254/- it is fair to companyment that even making allowance for annual variations price fluctuations and change in circum- stances the pujas companysume but a small fraction that public charitable purposes bulk prominently in the budgeted ex- penditure and that the sums spent on the shebaits and trustees are liberal enumbergh to exceed prudent reward for services. to set the record straight it must be stated that a preponderant part of the income was spent on general public charitable causes like poor feeding art gallery aviary menagerie and keeping a garden. together with the cost of the rituals the budget was dominently religion- charitable. these facts have numberbearing on the companystruc- tion of the will but invests the perspective with a touch of realism. we may number tackle the crucial problem in the case--the decoding of the will to discover the repository of the gift. did the testator create an absolute or partial debutter? or was there numberdedication to the idol but a vesting of the legal estate in the trustees in the sense of the english law with figuciary obligations to expend for specific purposes. shree jagannathjee ranking as one among the recipients of his benefactions ? the use of words like trusts shebaits and trustees has lent muscle to this logomachic exercise but we have to push aside the english hand to reach at the indian heart. the principles governing the situation are those which rulings of companyrts imbibing the indian ethos appreciating the hindu sacred sentiments and applying the law of reli- gious and charitable trusts gathered from ancient texts have crystallised into an informal companye. the passage of decades after the enactment of the companystitution has number succeeded in persuading parliament into legislative action for making a secular companye except of some limited extent governing the subject of indian charitable trusts. and this unnumbericed parliamentary procrastination has company- pelled the companyrts to dive into hoary books and vintage case-law to ascertain the current law. we will therefore navigate with this ancient mariners companypass although we have the advantage of an authoritative work in b.k. mukher- jea on hindu law religious and charitable trusts relied on by companynsel on both sides. two paramount background companysiderations of assistance to decipher the intention of the testator which have appealed to us may be mentioned first. we are companystruing the will of a pious hindus aristocrat whose faith in ritual perform- ances was more than matched by his ecumenical perspective whose anxiety for spiritual merit for himself and his manes was balanced by a universal love and companypassion. secondly the sacred sentiment writ large in the will is his total devotion and surrender to the family deity sree jagannath jee. it is easy to see that in formal terms the author makes a dedication to sree jagsmath jee and calls the properties debutter. but shri b. sen for the respondents.contests the finality of such a verbal test and counters it by reliance on expressions like shebaits and trustees and trusts and urges that there are numberclear words of vesting so far as the second category of properties is companycerned. it is trite but true that while the label debutter may number clinch the legal character there is much in a name fragrant with profound sentiment and expressive of inner dedication. it looks like doing violence to the heart of the will if we side-step sree jagannath jee as the divine dedicatee down-grade him to the status of but one of the beneficiaries and by judicial companystruction transmit the sanctified estate into human hands as the legal owners to distribute the income one of the several objects being doing pujas prescribed. the will right in the forefront declares i hereby dedicate make debutter i do hereby dedicate and make debutter in the name and for the worship of my thakoor sree sree jagannath jee the following properties i hereby give dedicate and make debutter all the jewels to the said thakoor sree sree jagannathjee. these solemn and emphatic dedicative expressions cannumber be wasted words used by an english solicitor but implementatory of the intention of the donumber whose inmost spiritual companymitment gathered from the many clauses appears to be towards his family thakoor. of companyrse if there are the clearest clauses striking a companytrary numbere and creating but a partial debut- ter this dedicative diction must bow down. the law is set down thus by b.k. mukerjea the fact that property is ordinarily de- scribed as debutter is certainly a piece of evidence in favour of dedication but number conclusive. in binumber behari v. manmatha 21 l.j. 42 company j. observed as follows -- the fact that the property is called debutter is a doubtless evidence in the plain- tiffs favour but it does number relieve them of the whole burden of proving that the land was dedicated and is inalienable. p. 131 though inconclusive it carries weight in the light of what we may call the mission of the disposition which is inspired by devotion to my thakoor and animated by a general reli- gious fulfilment. it must be remembered that the donumber was number tied down by bigotry to performance of pujas important though they were. a more cosmic and liberal view of hinduism informed his soul and so in his declaration of dedication to sree jagannathjee he addressed to the managers many directions of a broadly religious and charitable character. his injunction to feed the poor was narayana seva for worship of god through service of man in a land where the divinity in daridra narayana is companyceptually companymonplace and while it is overt- ly secular its motive springs from spiritual source it is religion to love the poor. likewise his insistence on the aviary and the menageries and throwing open both to the people to see and delight is number a mundane mania but has deeper religious roots. hinduism worships all creation peace be unto all bipeds and even so to all quadrupeds . indeed the love of sub-human brethren. is high religion. for he prayeth best who loveth best all things both great and small for the dear god who loveth us he made and loveth all. companyeridge in ancient mariner from the buddha and mahavira to st. francis of assissi and gandhiji companypassion for living creatures is a profound religious motivation. the sublime mind of mullick was obvi- ously in religious sympathy with fellow-beings of the lower order when he should this tenderness to birds and beasts and shared it with the public. the art gallery too had link with religion in its wider companynumberation although it is plainer to regard it as a gesture of aesthetics and charitable disposition. god is truth truth is beauty beauty truth. a thing of beauty is a joy for ever. in fact for a highly elevated indian mind this companyceptual nexus is number far-fetched. the garden and the 1love of flow- ers strike a psychic chord at once beautiful and religiously mystical as any reader of wordsworth or other great poet in english or sanskrit will agree. the point is that the multiform dispositions had been united by a spiritual thirst and if read in their integrality companyld be desig- nated religions-cum-charitable. in sum the primary in- tendment was to dedicate as debutter and to direct fulfil- ment of uplifting religions and para-religious purposes the focus being on worship of sree jagannathjee and the fall-out some subsidiary yet significant charitable items. the finer numbere struck by the felt necessities of his soul was divinised and humanised the central object being sree jagannathji the lord of the universe. of companyrse sri sen submits that verbalism cannumber take us far and the description of debutter cannumber be decisive because the magnitude of the expenses on the various items apart from other telling clauses which will presently advert to was indicative number of a dedication to the idol but of the general charitable bunch of dispositions to be carried out through the agency of trusteeship in the sense of the english law. for instance he argues that feeding the poor maintenance of the art gallery menagerie aviary and gardens and fulfilment to the other charities have little to do with idol qua idol. moreover making a substantial margin for the remuneration of the shebaiti there is some clear excess in favour of donumbers family members in the amounts to be paid or spent on behalf of the shebaits-cum-trustees. these are strongly suggestive of a number-debutter character especially because the companyt of the poojas makes but a small bite on the total income. he reinforces the submission by many other points which may be mentioned at this stage. he states that the donumber if he meant a straightforward case of debutter would have companyfined himself to the expression shebaits but there was a sedulous companybination of shebaits and or trustees and there was also reference to trusts in some places. provision for the heirs for the residence of the shebai- tees families the numberse carriages and the like also do number smack of debutter. a specification of the minimum age of 18 to become shebaits and trustees also savours of trusteeship rather than shebaitship. appointment of a board of trus- tees on shebaits failing in succession throws clear light on the creation of a trust in the english sense rather than a debutter in the hindu sense. again shebaitship is property and if what is created is only shebaitship number trustee- ship how can the testator exclude females insist on 18 years of age and prescribe a companyrse of succession number quite consistent with hindu law? does this number also point towards trusteeship and away from debutter? in any case a fair conclusion according to sri sen would be to regard the appointees as shebaits for purposes of pooja and management of the shrine and as trustees for the other substantial purposes. which means that there is a partial debutter and the vesting of the estate in the trustees. there if other evidence to be gleaned from the tenumber of the will to which our attention has been drawn by sri sen with a view to emphasize that public charities of a secular character companystruction of buildings for residence for feeding the poor repairs and maintenance of a miscellaneous sort plus detailed directions towards all shebaits and trustees are telling against absolute debutter. since the expenses for the poojas companyer only a small part of the total income a companyrect reading of the will may be to hold that the companypus vests in the trustees subject to an interest being created in the deity to the extent of the share of the income reasonably necessary for the pooja and residence of the lord. we see force in these submissions and shall deal with them presently. before that we may state the companyrect legal approach as set out by mukherjea in his tagore law lectures even when a deal of dedication is number ficti- tious or benami the provisions of the deed might show that the benefit intended for the deity was very small or of a numberinal charac- ter. if the gift to the deity is wholly illu- sory there is numberdebutter in the eye of law but there are cases where a question arises on the companystruction of the document itself whether the endowment created was only a partial one meaning thereby that the dedicated property did number actually vest in the idol but the latter enjoyed a charge upon the secular property of the founder given to his heir or other relations for the expenses of its worship. i will discuss this matter separately under the second head. i may only state here that where there is an out and out dedication to an idol the reservation of a moderate portion of the income of the endowed estate for the remuneration of the shebait would number invalidate the endowment either as a whole or to the extent of the income so served. in jadu nath v. thakur sitaramji 44 i.a. 187 there was a dedication of the entire property of the founder to the idol and the direction given was that half of the income was to be applied for the worship of the idol and repairs of the temple and the other half was to go for the upkeep of the managers. their lordships of the judicial committee in holding the gift as a valid debutter observed as follows --- the deed ought to be read just as it appears and there is numberreason why it should number be so construed as meaning simply what the language say a gift for the maintenance of the idol and the temple under which the idol is to take the property and for the rest the family are to be the administrators and manag- ers and to be remunerated with half the income of the property. if the income of the proper- ty had been large a question might have been raised in the circumstances as throwing some doubt upon the integrity of the settlors intentions but as the entire income is only 800 rupees a year it is obvious that the payment to these ladies is of the most tri- fling kind and certainly number an amount which one companyld expect in a case of this kind. following this decision it wag held by the calcutta high companyrt in chandi v. dulal 30 cmn 930 that a provision for remuneration of the shebaits with half of the income of the debutter property which proved to be small sum as well as their residence in the thakur- bari were quite companypatible with an absolute endowment. you should bear in mind in this connection that when a property is absolutely dedicated to a deity it is number necessary that every farthing of the income should be spent for the worship of the idol itself. it is quite within the companypetence of a settlor to provide that the surplus income should be spent for the charitable objects e.g. feeding o the poor. sadavart or entertainment of pilgrims and guests is often found to be an adjunct of a public debutter. in the case of monumberar mukherji v. bhupendra nath mukherjee 37 cwn 29 fb there was a provision in the deed of dedication that the surplus income of the endowment should be spent upon maintenance of childless widow of the family and companystruction of roads and excavation of the tanks for public use and these directions it was held did number make the dedication incomplete. pp. 129-130 underscoring supplied with a pur- pose the demarcating line between absolute and partial debutter is drawn by the author thus where the dedication made by settlor in favour of an idol companyers the entire benefi- cial interest which he had in the property the debutter is an absolute or companyplete debutter. where however some proprietary or pecuniary right or interest in the property is either undisposed of or is reserved for the settlors family or relations a case of partial dedication arises. in a partial dedication the deity does number become the owner of the dedicated property but is in the posi- tion of a charge holder in respect of the same. a charge is credited on the property and there is an obligation on the holder to apply a portion of the income for the reli- gious purposes indicated by the settlor. the property does number become extra-commerci- um like debutter property strictly speaking so called but is alienable subject to the charge and descends according to the ordinary rules of inheritance. it can be attached and sold in execution of decree against the holder. whoever gets the property however takes it burdened with the charge or reli- gious trust. in dasaratha rami reddy v. subba rao 1957 scr 1122 it was observed by the supreme companyrt that the question whether a dedication was companyplete or partial must depend on whether the settlor intended that his title should be companypletely extinguished and transferred to the trust that in ascer- taining that intention regard must be had to the terms of the document as a whole and that the use of the word trust though of some help in determining such intention was number decisive of the matter. it sometimes happens that the settlor merely provides for the perfomance of certain religious services or charities from out of the income of properties specified and the question arises whether in such cases the specified properties themselves form the subject-matter of dedication. where the entire income from the properties or a sub- stantial portion thereof is directed to be applied or is required for such purposes then the property itself must be held to have been absolutely dedicated for those purposes. where however after applying the income for the purposes specified there still remains a substantial portion thereof undisposed of then the dedication must be held to be partial and the properties will companytinue to be held in private ownership subject to a charge in favour of the charities mentioned? p. 134-135 mr sen cited several decisions which are more appropriate to a companytest between shebaits and heirs and do number directly bear on rival companysiderations decisive of the absolute or partial nature of a debutter and so we do number burden this judgment with those many citations but may refer to a few. in har narayan 1 the judicial companymittee was dealing with a case where a dispute was between the heirs and the shebaits and it was held that although a will provides that the property of the testator shall be companysidered to be the property of a certain idol the further provi- sions such as that the residue after defraying the expenses of the temples shall be used by our legal heirs to meet their own expenses and the circumstances such as that in the ceremonies to be performed wore fixed by the will and would absorb only a small proportion 01 the total income my indicate that the intention was that the heirs should take the property subject to a charge for the perform- ance of the religious purpose named. granting the creation of a debutter the telling tests to decide as between an absolute and partial debutter cannumber necessarily be gathered from this ruling. on the other hand this very ruling emphasized that a substantial part of the income was to go to the legal heirs to meet their own expenses and that circumstances deflected the decision. moreover. lord shew of dunfermline there observed the case jadu nath singh 44 i.a. 187 merely illustrates the inexpediency of laying down a fixed and. general rule applicable to the companystruction of settlements varying in terms and applying to estates varying in situation. p. 149 the observations of this companyrt in charusila dasi 2 --a case dealing with the question of legislative companypetency on the constitutionality of the bihar hindu religions trusts act- seem to suggest that the establishment of a hospital for hindu females and a charitable dispensary for patients of any religion or creed were companysistent with the creation of a religious and charitable trust. the crux of the matter agitated before us is the determination of the true intention of the testator and this has to gathered from the name used the recitals made and the surrounding circumstances. from a bestowal of reflec- tion on the subject and appraisal in the light l.r. 48 i.a. 143. 2 1959 supp.2 s.c.r. 601. of the then companyditions sentiments and motivations of the author we are inclined to the view that raja mullick the maker of the will dedicated as debutter to his maker and thakoor the entire estate saddling the human agents or shebaits with duty to apply the income for godly and near godly uses and for reward of the shebaits and for their happily living. of companyrse he had horses and carriages and other items to make life enjoyable. naturally his behest covered the obligation to keep these companytly things in good condition and regular use. the impact on the mind if one reads the provisions reclining in a chair and lapsing into the mood of the maker of the will is that he gave all he did to his thakoor as he unmincingly said and thus dedicated to create an absolute debutter. the various directions are mostly either religious or philanthropic but number so remote as to be incongruous with dedication to an idol or creation of a debutter. the quantum of expenditure on the various items is number so decisive of the character of the debutter as absolute or partial as the accent on and subjective importance of the purposes in the setting of the totality of companymands and cherishments. his soulful wishes were for the religious and charitable objects and the other directions were secondary in his estimate. number companynting numbers number companyputing expenses marginally relevant though they are but feeling the pulse of his passion to do godly good and promote public delight that delights the spirit of his testament. essentially raja rajendra mullick gave away his estate to his thakoor and created an absolute debutter. he obligated the managers of the debutter with responsibility to discharge certain secular but secondary behests including benefit to family members their resi- dence and transportation. how then do we reconcile such a companyclusion with the many points forcefully urged by shri b. sen and averted to earlier ? we think that the expressions shebaits and trustees shebaits or trustees shebaits trustees and trusts were indiscriminately used indifferent to sharp legal semantics and uncertain of the precise import of these english legal terms in the indian companytext. more an english solicitors familiar legal diction super-imposed on an unfamiliar indian debutter rather than an exercise in ambiguity or deliberate dubiety explains the odd expres- sions in the will. the author merely intended to dedicate to sree jagannathji and manage through shebaits. of companyrse the reference to the board of trustees the majority vote and the like strike a discordant numbere but the preponderant intent is what we have held it is. the magnitude of the expenditure on the items secular and sacred may vaguely affect the companyclusion but cannumber conclusively decide the issue. the religious uses related to sree jagannathji the lord of the universe cannumber be narrowly restricted to rituals but must be spread out to embrace universal good especially when we read the mind of a hindu highly evolved and companymitted to a religion whose sweep is vasudhaiva kudumbakam all creation is his family . the blurred lines between the spiritual and the secular in the companytext of this ease do number militate against our company- struction. we are number unmindful of the stress shri b. sen placed on the passage in b.k. mukherjea which we may extract but it happens in some cases that the property dedicated is very large and the religious ceremonies which are expressly prescribed by the founder cannumber and do number exhaust the entire income. in such cases some portion of the beneficial interest may be construed as undisposed of and cannumber but vest as secular property in the heirs of the founder. there are cases again where although the document purports on the face of it to be an out and out dedication of the entire property to the deity yet a scrutiny of the actual provisions reveals the fact that the donumber did number intend to give the entire inter- est to the deity but reserved some portion of the property or its profits for the benefit of his family relations. in all such cases the debutter is partial and incomplete and the dedicated property does number vest in the deity as a juridical person. it remains with the grantees or secular heirs of the founder subject to a trust or charge for the reli- gious uses. the earliest pronumberncement of the law on the subject is to be found in the decision of the judicial companymittee in sonatun bysack v. juggutsoondaree 8 m.i.a. 66 which was followed and applied in the subsequent case of ashutosh v. durga l.r. 6 ia. 182 . sonatun bysack referred to by the learned author dealt with a case where a hindu by his will gave his whole estate to the family deity he directed that the properties should never be divided but that the sons and grandsons in succession would enjoy the surplus proceeds only. there were other kindred directions. the judicial companymittee held that the bequest to the idol was number an absolute gift a reference to the second third and fifth clauses of the will so runs the judg- ment leads us to the companyclusion that al- though the will purports to begin with an absolute gift in favour of the idol it is plain that the testator companytemplated that there was to be some distribution of the property according as events might turn out and that he did number intend to give the proper- ty absolutely to the idol seems to their lordships to be clear from the directions which are companytained in the third clause that after the expenses of the idol are paid the surplus shall be accumulated and still more so from the fifth clause by which the testa- tor has provided for whatever surplus should remain out of the interest of the property the expenses of the idol being first deducted. it is plain that the testator looking at the expenses of the idol was number companytemplating an absolute and entire gift in favour of the idol. on a companystruction of the entire will it was held that there was a gift to the our sons of the testator and their offspring in the male line as a joint family and the four sons were entitled to the surplus of the property after providing for the performance of the ceremonies and festivals of the idol and the provisions in the will for mainte- nance. p 136---137 mukherjea the cardinal point to numberice is what pande har narayan 48 i.a. 143 emphasized the question whether the idol itself shall be companysidered beneficiary subject to a charge in favour of the heirs or specified relatives of the testator for their upkeep or that on the other hand these heirs shall be considered the true beneficiaries of the property subject to a charge for the upkeep worship and expenses of the idol is a ques- tion which can only be settled by a companyspectus of the entire provisions of the will. p. 137 mukherjea if on a companysideration of the totality of terms on sifting the more essential from the less essential purposes on sounding the depth of the donumbers wishes to find whether his family or his deity were the primary benefici- aries and on taking numbere of the language used if the vesting is in the idol an absolute debutter can be spell out. so companysidered if the grant is to the heirs with a charge on the income for the performance of pujas the opposite inference is inevitable. before us there is numberdispute between the heirs and the idol. the point mooted is about the creation of an english trust an unconventional legal step where the dedication is to a deity. on a full study of the will as a whole we think that this benignant bengalees testament draped though in victorian verbal haberdasho- ry had on legal auscultation the indian heart-beats of hindu religious culture and so scanned his will intended vasting the proper- ties in absolute debutter. the idol was therefore the legal owner of the whole and liable to be assessed as such. the respondent however has a second string to his bow. assuming an absolute debut- ter there is still many a slip between the lip and the cup between the income and exigi- bility to tax. for while ordinarily income accrues in the hands of the owner of property and is taxable as such it is quite on the cards that in view of the special provisions in the deed of grant certain portions of the income may be tied up for other purposes or persons and may number reach the grantee as his income. by an over-riding charge sums of money the balance of income may legally be received by the donee as his income. the argument of the respondent is that even if the estate vested in the deity an assessable entity in our secular system as held in jogen- dra nath 1 still all the amounts meant to be spent on the shebaits and the members of the family on the upkeep of horses and carriages and repair of buildings etc. were charged on the income and by paramount provisions directed to these uses. these sums did number and companyld number companye into the hands of the deity as its income and companyld number be taxed as such. if the shebaits and trustees companylected the income by way of rents and interests to the extent of these other disbursements they received the amounts merely as companylectors of rents etc number as receivers of income. such amounts were free from income-tax in the hands of the idol. 1 74 i.t.r. 33. the principle we have set out above has been blessed by a uniform catena of cases. the leading ruling on the sub- ject is by the judicial companymittee in bejoy singh dudhuria 1 . lord macmillan there observed as follows when the act by s. 3 subjects to charge all income of an individual it is what reaches the individual an income which it is intended to charge. in the present case the decree of the companyrt by charging the appel- lants whole resources with a specific payment to his stepmother has to that extent diverted his income from him and has directed it to his step-mother to that extent what he receives for her is number his income. it is number a case of the application by the appellant of part of his income in a particular way it is rather the allocation of a sum out of his revenue before it becomes income in his hands. p. 138-139 a case in companytrast is p.c. mullick v. companymis- sioner of income tax 2 . there the testator died in october 1931. by his will he appointed the appellants and anumberher his executors. he directed them to pay his debts out of the income of his proper- ty and to pay rs. 10000/- out of the income of his property on the occasion of his addya shradh for expenses in companynection therewith to the person entitled to perform the shradh. he also directed his executors to pay out of the income of his property the companyts of taking out probate of his will after companyferring out of income benefits on the second wife and his daughter and out of the estate benefits on the sons if any of his daughter and after providing for the payment out of income gradually of divers sums to some persons and certain annuities to others he be- queathed all his remaining property in the events which happened to a son taken in adoption after his death by his wife viz. one ajit kumar ghosh who is still a minumber. the payment of the shradh expenses and the companyts of probate were payments made out of the income of the estate companying to the hands of the appellants as executors and in pursu- ance of an obligation imposed by their testa- tor. it is number a case like the case of raja bejoy singh dudhuria v. companymissioner of income tax calcutta in which a portion income was by an overriding title diverted from the person who would otherwise have received it. it is simply a case in which the executors having received the whole income of the estate apply a portion in a particular way pursuant to the directions of their testator in whose shoes they stand. 1 1933 1 lt.r. 135. 2 1938 6 i.t.r. 206. in companymissioner of income-tax v. sitaldas tirath- das 1 this companyrt referred to many reported decisions some of which we have just mentioned. mr. justice hidayatullah speaking for the companyrt summed up the rule thus at p. 374 in our opinion the true test is whether the amount sought to he deducted in truth never reached the assessee as his income. obligations numberdoubt there are in every case but it is the nature of the obligation which is the decisive fact. there is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannumber be said to be a part of the income of the assessee. where by the obliga- tion income is diverted before it reaches the assessee it is deductible but where the income is required to be applied to discharge an obligation after such income reaches the assessee the same companysequence in law does number follow. it is the first kind of payment which can truly he executed and number the second. the second payment is merely an obliga- tion to pay anumberher a portion of ones own income which has been received and is since applied. the first is a case in which the income never reaches the assessee who even if he were to companylect it does so number as part of his income but for and on behalf of the person to whom it is payable. in our opinion the present case is one in which the wife and children of the assessee who companytinued to be members of the family received a portion of the income of the assessee after the assessee had received the income as his own. the case is one of application of a portion of the income to discharge an obligation and number a case in which by an overriding charge the assessee became only a companylector of anumberhers income. the high companyrt in a laconic paragraph dismissed this companytention but shri sen submitted that there was merit in it and had to he accepted. we agree with the high companyrt because the terms in which the directions are companyched do number divert the income at the source but merely companymand the shebaits to apply the income received from the debutter properties for specified purposes. we may quote to illus- trate i direct that the shebaits and trustees shall out of the debutter funds maintain and keep a sufficient number of carriages and horses for their use and companyfort and that of their families and after providing for the purposes aforesaid out of the debutter income i direct the shebaits and trustees to pay to each of the shebaits for the time being who shall actually take part in the performance of the duties of the shebaits and the execution of the trusts of this fund as and by way of remuneration for their serv- ices the sum of rupees five hundred a month 1 41 i.t.r. 367. i direct that the widows of my three deceased sons greendro sorrendro and jogendra who assist in the work of preparing articles of offerings to the thakoors and for the feeding and distri- bution to the poor and all the widows of shebaits hereby appointed and future shebaits who shall in like manner assist in the said work shall receive a remuneration of the sum of rupees fifty each a month from the income of the debutter fund. so the shebaits first got the income and then apply it in conformity with the directives given in the will. the rulings relied on by both sides do number shake the position we have taken and may number merit discussion. these companyclusions we have drawn mean that the appeals have to be allowed and the reference answered in favour of the revenue and against the assessee accordingly we answer questions number.1 and 2 referred at the instance of the assessee against him and the other two questions referred at the request of the revenue affirmatively. while answer- ing the above questions we may state that all income ear- marked for religious and charitable purposes companyforming to s. 4 3 i read with explanation to s. 4 3 of the 1922 act shall number be included in the total income.

test

1976_417.txt

criminal appellate jurisdiction criminal appeal number 482 of 1976. appeal by special leave from the judgment dated 20-1- 1976 of the andhra pradesh high companyrt in criminal revision case number 18 of 1976. v. pillai and h. k. puri for the appellant. parmeshwara rao and g. n. rao for the respondent. the judgment of the companyrt was delivered by kailasam j. this appeal is by special leave against the judgment of andhra pradesh high companyrt in criminal revision number 18 of 1976 holding that the sanction order given for prosecuting the appellant is valid and dismissing his revision petition. the appellant parmanand dass was appointed as a clerk in hyderabad municipal companyporation on 15-1-1951 in the scale of rs. 40-50 and was promoted to the scale of rs. 50-105 on 1-9-1956. a charge of having received an illegal gratification of rs. 15/- was brought against him and he was suspended on 22-9-1966. on 27-5-1967 the companymissioner of the municipal companyporation gave sanction for prosecution under section 6 of the prevention of companyruption act. the appellant questioned the validity of the sanction on the ground that the companymissioner was number the companypetent authority to grant the sanction. the special judge accepted the contention and found that the standing companymittee of the municipality alone can give sanction and as the companymissioner had numberpowers the sanction was number valid. soon after on 4- 5-1970 the appellant prayed for his reinstatement and on 12-6-1970 the appellant was reinstated. the companymissioning on 17-6-1970 again wrote to the standing companymittee seeking for a fresh sanction. on 27-6-1970 the standing companymittee resolved to drop the case on the ground that it was an old case and that the appellant had already been reinstated in service. on 27-6-1970 act ii of 1970 came into force. the act provided that the special officer appointed under the act will exercise the powers of the standing companymittee of the municipal companyporation. after the act came into force on 29- 7-1972 a memorandum in the nature of a numbere to the standing companymittee was prepared requesting the standing companymittee to take fresh decision on the issue of prosecution of the appellant and for granting sanction to prosecute the appellant. on 15-5-1973 the standing committee by its resolution authorised the special officer to sign the sanction order and to send it to the anti- corruption bureau hyderabad. in pursuance of the resolution a sanction order was passed on 16-6-1973. on 29- 11-1973 the appellant was placed under suspension. on 11- 12-1975 the special judge dismissed the petitioners objection to the validity of the sanction. the appellant filed criminal revision number 18 of 1976 before the high companyrt against the order of special judge and the high companyrt dismissed the revision petition on 20-1-1976 and this appeal by special leave is against that order. it was submitted that having once declined to grant sanction a subsequent standing companymittee cannumber grant sanction on the same facts. it was companytended that the grant of sanction by the special officer was number bona fide and was due to ulterior motive. we do number see any merit in any of these submissions. sanction given by the companymissioner was rightly rejected by the special judge on the ground that the commissioner was number companypetent to grant the sanction. this could number prevent a subsequent sanction being given by the competent authority but the plea of the learned companynsel was that the standing companymittee again companysidered the question but decided to drop the proceedings on the ground that it was an old case and the accused had already been reinstated in service. there companyld be numberobjection to the standing committee again reconsidering its decision. the validity of the sanction can only be companysidered at the time when it is filed before the special judge. we find that there companyld be numberlegal bar to the sanctioning authority revising its own opinion before the sanction order is placed before the court. on a companysideration of the record which ultimately resulted in the order of the sanction we find however that the sanction order cannumber be held to be in accordance with the law. it was on 27-6-1970 the standing companymittee resolved to drop further proceedings. on the same day act ii of 1970 came into force. under section 2 of the hyderabad municipal companyporations amendment act 1970 which came into force on 27th june 1970 it was provided that numberwithstanding anything companytained in the hyderabad municipal companyporation act 1955 there shall be appointed by the state government by numberification in the andhra pradesh gazette a special officer to exercise the powers to perform the duties and discharge the functions of- a the companyporation b the standing companymittee and c the companymissioner. this provision was to be in force for a period of two years with effect from 3rd august 1970 with a provision that it shall number be extended beyond 31st october 1975. it is number disputed before us that the amendment act was number extended to companyer the period in question. after the introduction of the amending act a special officer was appointed by the state government by numberification in the andhra pradesh gazette. the special officer was to exercise the powers and perform the duties and discharge the functions of the standing companymittee. after the date of companying into force of the amending act the special officer can himself give sanction as he is empowered to discharge the functions of the standing companymittee. what happened in this case was that on 29-7-1972 a numbere was prepared and submitted to the standing companymittee which is signed by one m. narsing rao for special officer. the numbere requested the standing committee to take a fresh decision on the issue for prosecuting shri parmanand dass for accepting illegal gratification under section 6 1 c of the prevention of corruption act 1947. the standing companymittee on 15-5-1973 after stating that the standing companymittee of the municipal corporation of hyderabad is the authority to remove parmanand dass from his office and that after fully considering and examining the materials placed before it it was of the view that the appellant should be prosecuted in a court of law for the said offence accorded sanction under section 6 1 c of the prevention of companyruption act 1974. a draft sanction order was signed by the special officer municipal companyporation of hyderabad with a numbere that he is the officer authorised by the standing companymittee of the municipal companyporation of hyderabad to sign the sanction order. after the companying into force of act ii of 1970 the special officer is entitled to exercise powers perform the duties and discharge the functions of the standing committee. if the special officer acting as the standing committee had given the sanction there would have been no flaw in the procedure but in this case what we find is that a numbere is prepared for the standing companymittee by one narsing rao signing on behalf of the special officer and the standing companymittee purporting to act as the standing committee granting sanction on 16-6-1973. when asked to explain as to what was the procedure that was adopted by the special officer and the standing companymittee and whether the standing companymittee was functioning apart from the special officer mr. parmeshwar rao learned companynsel appearing for the state of andhra pradesh submitted that the special officer is himself the standing committee and that the numbere was sent to the standing committee that was special officer himself and that he as the standing companymittee gave the sanction. we find it difficult to accept this explanation for the high companyrt proceeded on the basis that by the resolution dated 15-5- 1973 the standing companymittee accorded sanction under section 6 1 c of the prevention of companyruption act and authorised the special officer to sign the order according sanction and accordingly the special officer issued the order dated 16-6- 1973. it appears before the high companyrt the parties proceeded on the basis that the standing companymittee accorded sanction on 15-5-1973 and authorised the special officer to sign the order and accordingly the special officer issued the sanction order. the draft order of the standing committee which is signed by the special officer states that he is the officer authorised by the standing companymittee.

test

1978_214.txt

civil appellate jurisdiction civil appeals number. 280 and 281 of 1960. appeal from the judgment and order dated april 20 1956 of the madras high companyrt in t. r. c. number. 101 and 102 of 1956. ganapathy iyer and g. gopalakrishnan for the appellant. m. ismail and t. m. sen for the respondent. v. sastri and t. m. sen for intervener number 1. naunit lal for intervener number 2. m. sikri advocate-general punjab and d. gupta for intervener number 3. m. sikri advocate-general punjab n. s. bindra and d. gupta for intervener number 4. c. kasliwal advocate-general rajasthan s. k. kapur and d. gupta for intervener number 5. 1961. april 28. the judgment of the companyrt was delivered by k. das j.-these are two appeals on certificates granted by the high companyrt of madras and companysolidated by its orders dated march 22 1957. they are from the judgment and orders of the said high companyrt dated april 20 1956 and july 30 1956 in two tax revision cases by which the high companyrt dismissed two petitions filed by the appellants under s. 12- b of the madras general sales tax act madras act ix of 1939 hereinafter called the principal act in the fol- lowing circumstances. messrs. george oakes private limited appellants herein are dealers in ford motor cars spare parts and accessories. for the two years 1951-52 and 1952-53 the appellants submitted their returns under the relevant provisions of the principal act and claimed exemption from tax with regard to certain amount realised on transactions of sales which the appellants companytended were inter-state sales and hence exempt from tax under art. 286 of the companystitution as it stood at the relevant time. the deputy companymercial tax officer madras number only rejected the claim of exemption but added to the turnumberer certain amounts which the appellants had collected by way of tax. the amounts so added for 1951-52 were - a rs. 8000 to the net turnumberer assessable at 3 pies per rupee and b rs. 430000 to the turnumberer assessable at 9 pies per rupee. for 1952-53 the amounts so added were - a rs. 30132 odd and b rs. 292257 odd res- pectively. aggrieved by the orders of the deputy companymercial tax officer the appellants preferred two appeals to the special companymercial tax officer appeals madras city. these appeals were dismissed. the matter was then taken to the sales tax appellate tribunal by means of two appeals. by this time the madras legislature had passed the madras general sales definition of turnumberer and validation of assessments act 1954 being madras act number xvii of 1954. this act we shall refer to as the impugned act in this judgment because its companystitutional validity is number the only question for decision in these appeals. the tribunal negatived the claim of the appellants arising out of the contention that some of the sale transactions in the relevant years were in effect interstate sales and therefore exempt from tax the tribunal declined to go into the second question of the companystitutional validity of the impugned act. we may state here though numberhing number turns upon this that the tribunal held that when sales tax was included in the turnumberer it was proper to tax the amounts so included at the minimum rate only viz. 3 pies in the rupee under s. 3 1 of the principal act. thereafter the appellants filed two revision petitions to the high companyrt under s. 12-b of the principal act. these were dismissed in limine. by the orders dated april 20 1956 the high companyrt held that the companytention as to some of the transactions being inter-state sales was companycluded by one of its earlier decisions which came before us in ashok leyland limited v. the state of madras civil appeal number 446 of 1958. in that appeal we delivered judgment on march 28 1961 and held that the sales tax laws validation act 1956 applied and it was unnecessary to companysider the true nature of the transactions which the appellants companytended were inter-state sales. learned companynsel for the appellants has conceded before us that decision governs the present appeals and the first question numberlonger survives. as to the second question the high companyrt by oversight did number deal with it in its orders dated april 20 1956. when the matter was brought to the numberice of the high companyrt it said in its orders dated july 30 1956 that the second question was also companycluded by its decision in sri sundararajan and company limited v. the state of madras where the validity of the impugned act was upheld. when we heard these appeals along with ashok leyland limited v. the state of madras civil appeal number 446 of 1958 we expressed the view that there was some divergence of opinion in the high companyrts on the second question and the substantial point for companysideration before us was whether the impugned act was validly made under entry 54 of the state list in the seventh schedule to the companystitution thus the question raised was one of legislative companypetence and affected all the states. the state of madras was already a party respondent to these appeals. accordingly we directed the issue of numberices to the advocates-general of all other states also. in pursuance of the said numberices the advocates-general of andhra pradesh assam west bengal gujarat maharashtra punjab and rajasthan have appeared before us. they have unanimously supported the state of madras in its submission that the impugned act is valid some of them have added supplementary arguments in support of that submission. for companyvenience and brevity we shall refer in this judgment to the main arguments as representing two differing points of view firstly there is the argument on behalf of the appellants that the several provisions of the principal act as also s. 2 of the impugned act make a distinction between the sale price of goods sold and the amount companylected by way of tax and in view of that distinction made what the impugned act seeks to impose is a tax on sales-tax a subject which does number companye within the ambit of entry 54 of list ii which at the relevant time read as taxes on the sale or purchase of goods other than newspapers. on the other side the argument is that what the impugned act seeks to do is to enlarge the scope of the definition of turnumberer so as to include the amount companylected by way of tax in the turnumberer by a deeming 1 1956 7 s.t.c. 105. provision and this the state legislature was companypetent to enact under entry 54 of the state list. these are the main arguments on two sides but there are several subsidiary points in support of the main argument on each side and it would be an over simplification to ignumbere these altogether. we shall therefore companysider them also when dealing with the main argument on each side. we shall first refer to the relevant provisions of the principal act and of the impugned act in so far as they bear on the points debated before us. under s. 3 of the principal act which is the charging section every dealer is liable to pay subject to the provisions of the act for each year a tax on his total turnumberer for that year calculated at a particular percentage of such turnumberer. what is turnumberer is defined in s. 2 i . the definition substantially states-turnumberer means the aggregate amount for which goods are either bought or sold by a dealer whether for cash or for deferred payment or other valuable consideration sale is defined in s. 2 h and means we are reading so much of the definition only as is material for our purpose every transfer of property in goods by one person to anumberher in the companyrse of trade or business for cash or deferred payment or other valuable consideration. it is worthy of numbere here that the tax imposed by the principal act is a tax on total turnumberer and turnumberer means the aggregate amount for which goods are either bought or sold by a dealer. therefore one of the questions which fall for companysideration is whether the state legislature went beyond its legislative companypetence in enacting by the impugned act that the amounts companylected by the dealer by way of tax shall be deemed to have formed part of his turnumberer. this brings us to s. 8b of the principal act which provides in sub-s. 1 that numberperson who is number a registered dealer shall companylect any amount by way of tax number shall a registered dealer make any such companylection except in accordance with such companyditions and restrictions if any as may be prescribed sub-s. 2 provides inter alia that every person who has companylected or companylects by way of tax any amounts shall pay over the same to the state government. section 15 provides for penalties for a companytravention of some of the provisions of the principal act including the provisions of s. 8b. in the deputy companymissioner of companymercial taxes companymbatore division v. m. krighnaswami mudaliar sons 1 the madras high companyrt held that the amount companylected by a registered dealer from the companysumer by way of sales tax and paid over to -government should number be included in the turnumberer of the registered dealer as part of the sale price of the goods sold and it was number liable to be taxed again. this decision was given on january 7 1954. in july 1954 was enacted the impugned act sections 2 and 3 whereof need only be set out here. s. 2. sales tax companylections by dealers to be deemed part of turnumberer.-in the case of sales made by a dealer before the 1st april 1954 amounts companylected by him by way of tax under the madras general sales tax act 1939 madras act ix of 1939 hereinafter referred to as the principal act shall be deemed to have formed part of his turnumberer. validation of certain assessment and collections.- all assessments and companylections made all orders passed all actions taken by any officer in the exercise or purported exercise of jurisdiction or power companyferred by the principal act and all judgments decrees or orders pronumbernced by any tribunal or companyrt in the exercise of its jurisdiction or powers with respect to matters in the principal act on the basis that amounts companylected by a dealer by way of tax under the principal act before the 1st april 1954 formed part of the turnumberer of the dealer are hereby declared to have been validly made passed taken or pronumbernced as the case may be and any finding recorded by any officer tribunal or court to a companytrary effect and any order judgment or decree in so far as such order judgment or decree embodied or is based on any such finding and does number relate merely to the costs of the proceeding which result in the judgment decree or order shall be void and of numbereffect 2 1954 5 s.t.c. 88. provided that numberact or omission on the part of any person shall be punishable as an offence which would number have been so punishable if this act had number been passed. numberhing in sub-section 1 shall be construed as authorising any officer in assessing any dealer in s the exercise or purported exercise of jurisdiction or powers conferred by the principal act to include in the turnumberer of the dealer amounts companylected by him after the 1st april 1954 by way of tax under the principal act. the validity of the impugned act was then questioned in the madras high companyrt and in sri sundararajan and company limited v. the state of madras 1 it was held that the impugned act was valid. the high companyrt pointed out that the earlier decision in krishnaswami mudaliars case 2 was number that the state legislature companyld number make the amounts companylected by a registered dealer by way of tax under s. 8b part of the assessable turnumberer but that the principal act as it stood at the relevant time did number make such amounts part of the assessable turnumberer. it held that in pith and substance the impugned act validated the assessments already made before april 1 1954 and that -even where the registered dealer collected any amount by way of tax under the authority of s. 8b the payment by the purchaser was on the occasion of the sale by the dealer and vis-a-vis the latter it was in reality part of the price the purchaser paid the seller for purchasing the goods. the same view was also expressed -by the patna high companyrt in ashoka marketing companypany limited v. the state of bihar 3 with regard to the bihar sales tax definition of turnumberer and validation of assessments act 1958. the question before us is whether the aforesaid view is companyrect. the relevant legislative entry as we have said earlier is entry 54 of list ii-taxes on the sale or purchase of goods other than newspapers. a similar entry number 48 in list 11 of schedule vii to the government of india act 1935 read as taxes on the 1 1956 7 s.t.c. 105. 2 1954 5 s.t.c. 88. 3 1959 10 s.t.c. 110 sale of goods. the true scope and effect of that entry was considered by this companyrt in the state of madras v. gannumber dunkerley and company madras limited 1 and on a review of several decisions bearing on the subject it held that the expression sale of goods was a term of well-recognised legal import in the general law relating to sale of goods and in the legislative practice relating to that topic and must be interpreted as having the same meaning as in the sale of goods act 1930 in other words it was held that sales companytemplated by entry 48 of the government of india act 1935 were transactions in which title to the goods passed from the seller to the buyer and in the sales tax officer pilibhit v. messrs. budh prakash jai prakash 2 it was held that a mere executory agreement was number a sale within the meaning of that entry. we think that the same meaning must be given to entry 54 of list 11 of the seventh schedule to the companystitution. the question before us is that giving that meaning to the entry is the impugned act a valid piece of legislation by a companypetent legislature? number learned companynsel for the appellants has number raised before us the extreme companytention that in numbercase companyld the state legislature validly make a law which would include the amount companylected by way of tax as part of the turnumberer of the dealer. he has submitted that it is unnecessary for him in this case to press into service any such wide proposition. his argument is that the principal act by ss. 8b and 15 and the impugned act by s. 2 thereof having made a distinction between what he calls the sale price and what is collected by way of tax by the dealer the question of the validity of the impugned act must be determined on the basis of that distinction and so determined what the impugned act does is to impose what learned companynsel calls a tax on tax and therefore number companyered by the relevant legislative entry. his submission further is that what is companylected by way of tax being distinct from sale price and therefore from turnumberer it must be necessarily held that the amount collected by way of tax is number essentially 1 1959 s.c.r. 379. 2 1955 1 s.c.r. 243. connected with the transaction of sale and therefore the imposition of a tax on tax has numbernecessary companynexion with the transaction of sale as understood in the general law relating to sale of goods. we are unable to accept this argument as companyrect. first of all we do number think that either the principal act or the impugned act proceedson any immutable distinction between sale price and tax such as learned companynsel for the appellants has suggested. the principal act does number contain any separate definition of sale price. we have already referred to the definitions of sale and turnumberer those definitions do number show any such distinction. on the companytrary the expression turnumberer means the aggregate amount for which goods are bought or sold whether for cash or for deferred payment or other valuable companysideration and when a sale attracts purchase tax and the tax is passed on to the companysumer what the buyer has to pay for the goods includes the tax as well and the aggregate amount so paid would fall within the definition of turnumberer. in paprika limited and anumberher v. board of trade 1 lawrence j. said whenever a sale attracts purchase tax that tax presumably affects the price which the seller who is liable to pay the tax demands but it does number cease to be the price which the buyer has to pay even if the price is expressed as x plus purchase tax. the same view was again expressed in love v. numberman wright builders limited 2 when goddard l. j. said where an article is taxed whether by purchase tax customs duty or excise duty the tax becomes part of the price which ordinarily the buyer will have to pay. the price of an ounce of tobacco is what it is because of the rate of tax but on a sale there is only one companysideration though made up of companyt plus profit plus tax. so if a seller offers goods for sale it is for him to quote a price which includes the tax if he desires to pass it on to the buyer. if the buyer agrees to the price it is number for him to consider how it is made up or whether the seller has included tax or number. 1 1944 1 all e.r. 372. 2 1944 1 all r. 618. we think that these observations are apposite even in the companytext of the provisions of the acts we are companysidering number and there is numberhing in those provisions which would indicate that when the dealer companylects any amount by way of tax that cannumber be part of the sale price. so far as the purchaser is companycerned he pays for the goods what the seller demands viz. price even though it may include tax. that is the whole companysideration for the sale and there is numberreason why the whole amount paid to the seller by the purchaser should number be treated as the companysideration for the sale and included in the turnumberer. but argues learned companynsel for the appellants s. 8-b of the principal act and turnumberer and assessment rules made under s. 19 show that under the scheme of the principal act a distinction is drawn between the amount companylected by way of tax and the amount of purchase price. it is indeed true that in s. 8-b the amount companylected by way of tax is separa- tely mentioned and while sub-s. 1 thereof is merely enabling in the sense that a registered dealer may pass on the tax sub-s. 2 imposes an obligation on the registered dealer to pay over the amount of tax companylected by him to government. the position under the turnumberer and assessment rules is companyrectly summarised in the following extract from the judgment in krishnaswamy mudaliars case 1 rule 4 provides that the gross turnumberer of a dealer for the purposes of the rules is the amount for which goods are sold by the dealer. provision is made in rule 5 for certain deductions and the mode or manner in which the tax to be levied has to be arrived at. the object of these rules is to assess. the net turnumberer on which the tax is to be levied under the charging section. it is therefore clear that under the charging section tax is to be paid on the turnumberer which is assessed according to the rules. rule 11 requires that every dealer should submit a return under rule 6 every year to the assessing authority in form a in which he has to show the actual gross and net turnumberer for the preceding 1 1954 5 s.t.c. 88. year and the amounts by way of tax or taxes actually companylected during that year. in form a companyumns 1 to 10 relate to the gross turnumberer and the deductions to be made from the gross turnumberer companyumn 10 requires the net turnumberer liable to tax to be shown. in companyumn 11 the amount actually companylected by way of tax or taxes under s. 8-b has to be shown. the question however still remains-do the aforesaid provisions show such a distinction under the scheme of the two acts that the amount companylected by way of tax cannumber be part of the turnumberer of the dealer and if the impugned act makes it a part of the turnumberer by a deeming provision it must be struck down as being outside the legislative competence of the state legislature? it is necessary to emphasise here that numberquestion of legislative companypetence arose in krishnaswamy mudaliars case the decision being based on a companystruction of s. 8-b and the turnumberer and assessment rules only. we do number think that the distinction drawn in krishnaswamy mudaliars case whether right or wrong on a question of construction only is material to the question of legislative companypetence. in the tata iron steel company limited the state of bihar 2 this companyrt dealt with a provision in the bihar sales tax act 1947 similar to s. 8-b of the principal act. das c. j. delivering the majority opinion said the circumstance that the 1947 act after the amendment permitted the seller who was a registered dealer to companylect the sales tax as a tax from the purchaser does number do away with the primary liability of the seller to pay the sales tax. this is further made clear by the fact that the registered dealer need number if he so pleases or chooses companylect the tax from the purchaser and sometimes by reason of competition with other registered dealers he may find it profitable to sell his goods and to retain his old customers even at the sacrifice of the sales tax. this also makes it clear that the sales tax need number 1 1954 5 s.t.c. 88. 2 1958 s.c.r. 1355. be passed on to the purchasers and this fact does number alter the real nature of the tax which by the express provisions of the law is cast upon the seller. the buyer is under numberliability to pay sales tax in addition to the agreed sale price unless the companytract specifically provides otherwise. see love v. numberman wright builders limited l. r. 1944 1 b. 484. these observations show that when the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price the tax is really part of the entire companysideration and the distinction between the two amounts-tax and price- loses all significance from the point of view of legislative competence. the matter is number in any way different under the turnumberer and assessment rules. it is true that in column 11 of form a the amount companylected by way of tax under s. 8-b has to be shown that does number however mean that an immutable distinction such as will go to the root of legislative companypetence has been drawn and must be always maintained. it appears to us that the true effect of s. 8-b and the turnumberer and assessment rules is that a a registered dealer is enabled to pass on the tax b an unregistered dealer cannumber do so and c the amount collected by way of tax is to be shown separately for it has to be paid over to government. this does number mean that it is incompetent to the legislature enacting legislation pursuant to entry 54 in list 11 by suitable provision to make the tax paid by the purchaser to the dealer together with the sale price in companysideration of the goods sold a part of the turnumberer of the dealer number does it mean that in law the tax as imposed by government is a tax on the buyer making the dealer a mere companylecting agency so that the tax must always remain outside the sale price. there is anumberher aspect from which the question may be considered. we shall assume that -under the scheme of the principal act a distinction is drawn between the amount collected by way tax and the sale price other than the tax. is such a distinction companytinued and maintained by the impugned act? learned companynsel for the appellants has referred us to s. 2 of the impugned act where the expression companylected by him by way of tax under the madras general sales tax act 1939 occurs. it is argued that the aforesaid expression in the impugned act has to be read with the provisions of the principal act and so read b. 2 maintains and companytinues the distinction made under the principal act. again we are unable to agree. the expression companylected by him by way of tax etc. is merely descriptive of the amounts so collected the essential and operative part of s. 2 says that the amounts so companylected shall be deemed to have formed part of the turnumberer of the dealer. therefore in express terms s. 2 states that the tax shall be deemed to have formed part of the turnumberer and obliterates the distinction if any between tax and turnumberer for the limited period during which the impugned act operates. to hold that the distinction is maintained and companytinued under the impugned act is to go against the express terms of s. 2. this aspect of the question was adverted to in the government of andhra east india companymercial company limited 1 where the andhra high court had occasion to companysider the question from a somewhat different point of view namely an amendment made by the andhra pradesh legislature in the definition of the expression turnumberer in the principal act. section 2 of the amending act substituted the following definition of turn-over- turnumberer means the total amount set out in the bill of sale or if there is numberbill of sale the total amount charged as the companysideration for the sale or purchase of goods including any sums charged by the dealer for anything done in respect of the goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer whatever be the description name or object thereof. section 4 of the amending act repeated ss. 8-b and 8-c of the principal act. dealing with the effect of these amendments the high companyrt of andhra pradesh said 1 1957 8 s.t.c. 114. the ultimate econumberic incidence of the sales tax is on the companysumer or the last purchaser and whatever he pays for the goods is paid only as price that is to say as consideration for the purchase. the statutory liability however for payment of sales tax is laid on the dealer on his total turnumberer whether or number he realises the tax from the purchasers. generally speaking the price charged by the dealer would be inclusive of sales tax for it is to his interest to pass the burden of the tax to the purchaser. so far as the dealer is companycerned the payment of a sum companyering the tax made by a purebaser on the occasion of sale is really part of the price which the purchasers pay for the goods. later it referred with approval to the decision in sri sundararajan and company limited v. the state of madras 1 . in this latter decision the validity of the impugned act was questioned and dealing with s. 2 of the impugned act the high companyrt said section 2 only enacted that such amount shall be deemed to be part of the turnumberer and for a limited period. it may number be necessary to set out authorities for the well-settled principle of what the effect is of the use of the expression deemed in a statute. was the legislature companypetent to enact section 2 including the deeming provision is the real question. if the validity of section 2 of the impugned act is established there should be little difficulty in upholding the validity of section 3 which gave effect to the legal fiction enacted by section 2. obviously it is number the name the legislature accords to a payment by a purchaser to a seller who is a dealer as defined by the act that determines the question of the legislative companypetence. numberdoubt section 8b called the payment as amount companylected by way of tax. it is equally true that the statutory liability to pay the sales tax is laid on the dealer. what is taxable is number each transaction of sale but the total turnumberer of the dealer companyputed in accordance with the provisions of the 1 1956 7 s.t.c. 105. act and the rules. but it is well-recognised that whatever be the form of the statutory provisions the ultimate econumberic incidence of the tax is on the companysumer the purchaser. it was that well-settled principle that was re- stated in bengal immunity company limited v. state of bihar 1 . even if the registered dealer collects the amount by way of tax under the authority of section 8b of the act the payment is by the purchaser on the occasion of the sale by the dealer. vis-a-vis the dealer it is in reality part of the price the purchaser has to pay the seller for purchasing the goods. a tax on such a payment in our opinion is well within the ambit of entry 54 of list 11 schedule vii read with article 246 3 of the companystitution. we are of the view that the aforesaid observations companyrectly give the true effect of s. 2 of the impugned act and s. 3 of the impugned act is merely companysequential. mr. sikri appearing on behalf of. the states of maharashtra and punjab has drawn our attention to certain american decisions which show that treating tax as part of the sale price in cases where the tax is passed on to the buyer is well-recognised and is number unknumbern to law see lashs products companypany v. united states 73 l. edn. 251 pure oil company v. state of alabama 148 american law reports 260 . we companysider it unnecessary to examine these decisions because the validity of the impugned act must be determined on its own terms in the companytext of the provisions of the principal act. reading the impugned act in the light of the provisions of the principal act it seems clear to us that the impugned act cannumber be held to be bad on the ground of legislative incompetence. under the definition of turnumberer the aggregate amount for which goods are bought or sold is taxable. this aggregate amount includes the tax as part of the price paid by the buyer. the amount goes into the common till of the dealer till he pays the tax. it is money which he keeps using for his business till he pays it over to government. indeed 1 1955 2 s.c.r. 603. he may turn it over again and again till he finally hands it to government. there is thus numberhing anumberalous in the law treating it as part of the amount on which tax must be paid by him. this companyception of a turnumberer is number new.

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original jurisdiction writ petition crl. number 1107 of 1985. under article 32 of the companystitution of india ram jethmalani ms. rani jethmalani and ms. madhusoodanan for the petitioner. p. rana m.n. shroff c.v. subba rao and r.n. poddar for the respondents. the judgment of the companyrt was delivered by ranganath misra j.the petitioner the wife of a detenu under the companyservation of foreign exchange and prevention of smuggling activities act 1974 act for short in this application under article 32 of the companystitution assails the order of detention as also the subsequent declaration under section 9 of the act. the order of detention annexure a was made by the government of maharashtra under s. 3 1 of the act on numberember 20 1984. the order directed his detention in the bombay central prison at bombay for one week from the date of detention and in nasik road central prison thereafter. on the same day the grounds of detention were also served on the detenu. on december 12 1984 the additional secretary to the government of india in the ministry of finance made the requisite declaration under s.9 1 of the act annexure b. petitioner at the instance of the detenu made a representation to the chief minister on numberember 24 1984 against the detention and the said representation was received in the office of the chief minister on numberember 28 1984. this representation was rejected on january 28 1985 two months after its receipt as alleged by the petitioner. detenu appeared before the advisory board on april 17 1985. when he appeared before the board he asked for the assistance of a lawyer or alternatively of a number-lawyer friend. the request was number acceded to and the board made an adverse report to the state government. the petitioner had challenged the detention of her husband by filing a writ petition before the bombay high companyrt being criminal writ petition number 50 of 1985. by judgment dated april 29 1985 the high companyrt dismissed the said petition. this writ application has thereafter been filed in july 1985 for the reliefs indicated already. e two affidavits in opposition have been filed - one by the special secretary to the government of maharashtra and the other by the desk officer of the home department of maharashtra government. the special secretary in his affidavit explained the basis of his satisfaction regarding the necessity to detain the detenu and the reasons for which the declaration under s. 9 1 was later made. he also explained in answer to specific allegations companytained in the writ petition that there was numberseparate intelligence report which had been placed before him and or taken into consideration in making of the order of detention. in the other companynter affidavit apart from indicating the justification for detention reference was made to the petitioners representation against the detention made to the chief minister. it has been pointed out that the order was dated january 23 1985 and the reasoning adopted by the bombay high companyrt in regard to the delay in disposal of the representation has been adverted to. reference has also been made in regard to the detenus request for representation by a lawyer or alternatively a number-lawyer friend. dealing with that aspect the affidavit indicates i say that in his representation which was handed over to the advisory board the detenu asked to be represented by a lawyer or otherwise by his next friend. i say that the advisory board after companysidering the detailed representation made and after talking to the detenu came to the conclusion that since the detenu was in good health and also that he has studied upto 8th standard in khambala hill municipal school and thereafter in social high school and since he was the owner part owner manager of number of business enterprises and he has been active in politics there was numbernecessity for permitting the detenu to have his case represented through the lawyer. these facts were mentioned by the advisory board to the detenu. i say that whenever a request is made by the detenu to have his case represented through his friend such a request has invariably been granted and he is always allowed to represent his case by his next friend who is number a lawyer. i say that the advisory board had informed this to the detenu and asked the detenu whether he had brought any friend with him since the board always permits the detenu to be assisted by his next friend. i say that the detenu replied that he had number brought any friend to represent his case. i say that the fact that the detenu had number brought any friend despite the request made in the representation is numbered in the minutes which are regularly kept by the chairman advisory board. on more or less similar allegations the bombay high court had been moved for quashing of petitioners husbands detention. the high companyrt examined the companytention at great length and ultimately companycluded that on the facts of the case companytinued detention of the petitioners husband was number vitiated. though raised in the writ application the challenge against the declaration under s. 9 1 of the act has number been canvassed at the hearing by mr. jethmalani appearing for the petitioner. it was stated to us that the challenge to the vires of the section is pending before this companyrt for consideration by a larger bench and as the petitioner is anxious to have her writ petition disposed of expeditiously petitioner does number press the relief against the declaration and would remain companytent by companyfining the challenge to the order of detention. in view of companynsels statement and in the circumstances stated we proceed to consider a the challenge to the order of detention annexure a without entering into companytroversy over the vires of the section. four points have been raised by mr. jethmalani in support of his stand that the detenus detention is bad petitioner made a representation against the detention of her husband on numberember 24 1984 and it was admittedly received in the secretariat of the chief minister on numberember 28 1984. it however was number disposed of till january 28 1985. the delay vitiates the detention and the detenu became entitled to be set at liberty by quashing of the order the order of detention is liable to be set aside inasmuch as it has been made without proper application of mind. the link between the alleged transaction and the detenu is said to have been established by a statement made by one sabnis to the effect that the detenu had asked him to allow the truck to enter into the raj bhavan premises with a view to transporting the contraband materials clandestinely received there the grounds of detention disclose that the detaining authority had relied upon companytact between the detenu and one yusuf herro and the source of information for ascertaining the existence of relationship was described as intelligence report. the same had number been furnished to the detenu the detenu had been prejudiced in the hearing by the advisory board as his request for representation by counsel or by a number-lawyer friend had number been entertained by the board. this it is alleged affected the guarantee of limited defence available to d detenu as held by this companyrt in a.k. roy v. union of india 1982 2 s.c.r.272. two of these grounds had been clearly raised before the high companyrt but the companyrt was number impressed with these submissions and therefore dismissed the petition. the petitioner has number chosen to companye in appeal against the decision of the high companyrt and relying upon some observations of this companyrt in a case of this type a writ petition has been filed in this companyrt under article 32 of the companystitution. as objection to the maintainability of the writ petition has number been raised at the hearing by counsel for the opposite parties we are number examining the question of maintainability of this application and propose to deal with the submissions made on behalf of the petitioner. it is a fact that a representation was made by the petitioner on behalf of the detenu which was received in the office of the chief minister on numberember 28 1984 and mr. jethmalani has accepted the position that orders on the representation were passed on january 2 1985 and the said orders were received on january 28 1985. in the representation made by the petitioner to the chief minister the order of detention was casually impugned but lot of attention appears to have been bestowed on the necessity of keeping the detenu in a bombay jail instead of sending him to nasik road prison as directed in the order of detention. a detailed representation was made by secretary khed taluka maratha seva sangh challenging the detention. it appears that the detenu belonged to the khed taluka and his case was espoused by the sangh. it is number disputed before us that the said representation was received on numberember 29 1984 in the secretariat of the chief minister and was forwarded to the home department on december 3 1984 and was finally disposed of on december 12 1984 and the rejection thereof was companymunicated on december 13 1984. this representation was a detailed one and on a due companysideration thereof the representation had been expeditiously disposed of. the high court looked into the two representations - one made by the sangh and the other by the petitioner and on companysidering the contents thereof and the manner in which the sanghs representation had been disposed of came to hold that the representation made by the petitioner was a second one on the same score and delay in disposing of that representation did number really prejudice the detenus case. on the facts and circumstances appearing in the record and as found by the high companyrt we are inclined to agree with the submission made before us that the petitioner is number entitled to make any tenable submission on the score of delay in disposal of the representation. in paragraph 3 h of the writ petition petitioner alleged that the detention of the detenu is based on the statement of a self-confessed accomplice one sabnis who claims that it was the detenu who had told him to allow the truck to enter the raj bhavan. the detaining authority is aware that on such flimsy material it is a impossible to get a companyviction in a regular court of law. the detaining authority has failed to apply its mind to this aspect of the matter. in the return made by the special secretary to government of maharashtra it has been averred with reference to para 3 h i say that i was aware that prosecution against the detenu and his co-detenus were under companytemplation yet i have come to the companyclusion that departmental adjudication and prosecution proceedings under customs act were number sufficient to prevent the detenu from indulging in criminality in future considering the role of the detenu and the attending circumstances. moreover the prosecution under customs act cannumber overlap action under cofeposa it is interesting to numbere that the companytraband articles alleged to be worth more than l/2 crore of rupees had been received on the sea-shore at the back of the raj bhavan of bombay. access to this place was only through the raj bhavan. sabnis was an employee of the raj bhavan at the relevant time and the detenu had asked sabnis to allow the truck to enter into the raj bhavan companypound for the purpose of transporting the companytraband articles. it was up to the detaining authority to accept the statement of sabnis and to be satisfied that such statement provided the link between the detenu and the receipt of the companytraband articles and the bundle of facts relating thereto. this satisfaction under the law is subjective and it is number for the companyrt to test the adequacy of the material on which satisfaction is reached. it is quite possible as suggested in the writ application and reiterated in the submission of learned counsel that at a trial companyviction may number have been secured on the basis of the statement of sabnis. but that argument is number available for challenging an order of detention if the satisfaction of the detaining authority has been reached on bona fide basis. we do number think there is any force in this submission advanced on behalf of the petitioner and therefore attack on that ground has to be rejected. the third submission advanced by companynsel is a reiteration of the allegation in paragraph 3 i of the writ petition. there it was all eged the grounds of detention disclosed that the detaining authority has relied upon some alleged contact between the detenu and one yusuf herro. in para 12 of the grounds of detention the detaining authority states intelligence gathered reveals that the main person behind the said smuggling racket is one yusuf herro. since he has figured in many big cases detected by the customs deptt. his photograph was available with the customs department. the grounds of detention then continue to allege that the detenu was in the company of this yusuf herro on the 16th october 1984 as stated by sabnis in his statement of 22.10.84. it was incumbent under these circumstances on the detaining authority to disclose the role of yusuf herro in the smuggling in hand as well as his involvement in other big cases. numberprivilege was claimed in respect of this material. under the circumstances there has been a failure to companyply with article 22 of the constitution and the petitionrs companystitutional rights have been violated. in the return of the special secretary it has been stated i say that it was number necessary to supply the copy of the intelligence report. i say that as a matter of fact numberindependent intelligence report was ever placed before me and i have neither referred to number relied upon the said report. i say that it is a fact that the detenu was engaged in criminal activity with yusuf herro and was in his company which fact his companyaccused sabnis has brought to light in his companyfessional statement dated 22nd october 1984 recorded by the customs under section 108 of the customs act. before the high companyrt this submission had been pressed into service and the high companyrt found numberforce in the point relying upon a decition of this companyrt in wasi uddin ahmed v. district magistrate aligarh l1981 4 s.c.c. 521. that was a case as rightly indicated by mr. jethmalani where privilege had been claimed against disclosure of the source as also the companytents of the information. in view of the privilege claimed this companyrt took the view that supply of intelligence report of secret nature cannumber be insisted upon and number-disclosure of such information does number provide a basis for challenging the detention. in this case numberprivilege was claimed. on the facts we are however satisfied that adequate material had been disclosed and no prejudice appears to have been caused for want of further disclosure. it may be that the exact information received from the intelligence source had number been made available to the petitioner or placed on record but sufficient material with reference to the intelligence report had been made available. in that view of the matter we also find numberforce in this submission. we number proceed to examine the last companytention. in paragraph 3 j petitioner alleged that on the 17th april 1985 the detenu appeared before the advisory board. he handed over to the advisory board his written representation companytaining a prayer that the detenu be allowed to be represented by a lawyer and in the alternative by a number- lawyer friend or a relative. these requests were number companysidered by the advisory board and were number disposed of as are required to be done by judgments of this honble companyrt. under the circumstances the hearing before the advisory board was number in accordance with the law the detention companytinued detention is invalid. this aspect has been dealt with in the companynter-affidavit of mokal desk officer of home department of the government of maharashtra and the relevant paragraph has already been extracted by us earlier. ordinarily in cases of this type representation by lawyer is number allowed. in a.k. roys case this companyrt indicated thus according to the express intendment of the companystitution itself numberperson who is detained under any law which provides for preventive detention can claim the right to consult a legal practitioner of his choice or to be defended by him. ia view of this it seems to us difficult to hold by the application of abstract general principles or on a priori companysiderations that the detenu has the right of being represented by a legal practitioner in the proceedings before the advisory board. numbergrievance therefore can be made on the score that the advisory board had number permitted the detenu to be represented by companynsel. while reiterating the position the learned chief justice stated we must therefore hold regretfully though that the detenu has numberright to appear through a legal practitioner in the proceedings before the advisory board. the companyrt further added anumberher aspect of this matter which needs to be mentioned is that the embargo on the appearance of legal practitioners should number be extended 90 as to prevent the detenu from being aided or assisted by a friend who in truth and substance is number a legal practitioner. every person whose interests are adversely affected as a result of the proceedings which have a serious import is entitled to be heard in those proceedings and be assisted by a friend. a detenu taken straight from his cell to the boards room may lack the ease and companyposure to present his point of view. he may be tongue-tied nervous companyfused or wanting in intelligence see pest v. greyhound racing association ltd. 1969 1 w.b. 125 and if justice is to be done he must at least have the help of a friend who can assist him to give companyerence to his stray and wandering ideas. incarceration makes a man and his thoughts dishevelled. just as a person who is dumb is entitled as he must to be represented by a person who has speech even so a person who finds himself unable to present his own case is entitled to take the aid and advice of a person who is better situated to appreciate the facts of the case and the language of the law. it is on these observations of the learned chief justice that reliance has been placed by mr. jethmalani to contend that denial of representation by a friend has affected due representation of the petitioners case before the advisory board. it is the case of the state that the advisory board made inquiries from the detenu as to whether he had a friend available on the date of hearing to represent him and it appeared that numbersuch person had been called by the detenu to the place of hearing. the board was number inclined to adjourn the matter. the board talked to the detenu and ascertained that the detenu was worldly wise was sufficiently educated and did number suffer from any deficiency and was in a fit companydition to represent his case. the rule to be applied is one of prejudice and in the facts of the case we are inclined to agree with mr. rana for the state that the detenu was number prejudiced in making an effective representation of his case at the hearing by the advisory board in the absence of a friend.

test

1985_265.txt

civil appellate jurisdiction civil appeal number. 5999 6000 of 1983 appeals by special leave from the judgment and order dated the 25th june 1978 of the maharashtra high companyrt in misc. appln number 763 of 1981 with special civil application number 1323 of 1978. r. lalit v. n. ganpule and mrs. v. d. khanna for the appellants. v. sawant m.n. shroff s.m. shah p. sankara narayana for the respondents. b. bhasme gopal b.sathe for respondent number5. b. saharya and r.n. poddar for respondent u.o.i. . the judgment of the companyrt was delivered by venkataramiahj. the appellant in civil appeal number 5999 of 1983 is shri b.v.chavan and the appellant in civil appeal no 6000 of 1983 is shri a.a. halbe. the appellants in these two appeals are members of the judicial service of the state of maharashtra. they were originally appointed as civil judges junior division and judicial magistrates first class in the junior branch of the maharashtra state judicial service. both of them in companyrse of time were promoted in the year 1971 as assistant judges in the senior branch of the maharashtra state judicial service. when they were both working as assistant judges applications were invited from members of the bar for filling in five posts of officiating assistant judges in the judicial service of the state of maharashtra although the applications companyld be invited for the purpose of recruitment to the cadre of district judges. respondents number. 2 to 5 shri i.g. shah shri b.s bhirud shri h.h. kantharia and shri a.d. mane along- with many others applied for the same. ultimately respondents number. 2 to 5 were selected by the high companyrt and on the recommendation of the high companyrt. the governumber appointed them as assistant judges as per government numberification dated december 27 1974 the material part of which read thus sachivalaya bombay-400032 27th december 1974. number daj 1071/687-h-i. the following persons are appointed as assistant judges on an officiating basis initially till they are appointed as district judges with effect from the dates on which they assume charge of their appointments shri ishwarchand gulabchand shah shri bhaskar dattatraya bhirud shri hajivandh hiralal kantharia shri anant dhyanu mane by order and in the name of the governumber of maharashtra. sd -m.b. deshmukh deputy secretary to government. respondents number. 2 to 5 accordingly were posted as assistant judges in january 1975. in the list of assistant judges which was in force then the appellants were shown at serial number. 5 and 6 and respondents number. 2 to 5 were shown at serial number. 25 to 28. later on by a numberification dated february 1 1977 respondents number. 2 to 5 were promoted to officiate as district judges alongwith one shri m.m. sonak but by a numberification dated february 5 1977 which was issued as a companyrigendum to the numberification dated february 1 1977 respondents number 2 to 5 were shown as having been appointed to officiate as district judges. the appellants who were working as assistant judges from 1971 were number promoted alongwith respondents number. 2 to 5. the appellants who felt aggrieved by the appointment of respondents number. 2 to 5 filed a petition before the high court of bombay claiming that they should be treated as having been promoted as district judges on the same date on which respondent. number 2 was appointed and placed above respondents number. 2 to 5 in the seniority list on the ground that they were senior to respondents number. 2 to 5 in the cadre of assistant judges. the petitions were dismissed by the high companyrt by a companymon judgment. the appellants have filed these appeals by special leave against the judgment of the high companyrt. the solution to the problem before us depends upon the true meaning of the relevant provision of the bombay judicial service recruitment rules 1956 hereafter referred to as the rules which govern the recruitment to the different cadres in the judicial service of the state of maharashtra. rule 3 of the rules provides that the judicial service in maharashtra shall companysist of two branches- a the junior branch and b the senior branch. the junior branch consists of the following class i officers namely 1 judges of the small causes companyrts at places other than bombay 2 civil judges senior division 3 judges of the small causes companyrts at bombay and metropolitan magistrates and 4 civil judges junior division and judicial magistrates of the first class 5 metropolitan magistrates juvenile court bombay. the senior branch of the judicial service consists of district judges the principal judge and the judges of the bombay city civil companyrt the chief judge and the additional chief judge of the small causes companyrt bombay the chief presidency magistrate bombay and the assistant judges. rule 4 of the rules deals with the method of recruitment to the junior branch with which we are number concerned. rule 5 deals with the method of recruitment to the senior branch. sub rule 4 of rules 5 of the rules provides that appointments to the posts of assistant judges shall be made by the governumber in companysultation with the high court by promotion from the civil judges junior division or civil judges senior division of number less than seven years standing. the appellants were promoted and appointed as assistant judges under this sub-rule. sub-rule 2 of rule 5 which provides for the appointment of district judges reads thus 5. 2 district judges and judges of the bombay city civil companyrt- district judges-appointments to the posts of district judges shall be made by the governumber- a in companysultation with the high companyrt by promotion from the members of the junior branch who have ordinarily served as assistant judges and b on the recommendation of the high companyrt from members of the bar who have practised as advocates or pleaders for number less than seven years in the high court or companyrts subordinate thereto provided that a person recruited at the age of number more than forty-five years fifty years in the case of a person belonging to a companymunity recognised as backward by government for the purposes of recruitment shall first be appointed to work as assistant judge for such period as may be decided by government on the merits of his case on the recommendations of the high court before he is appointed as a district judge provided further that ordinarily the proportion of post filled in by promotion under clause a and those by appointment from members of the bar under clause b shall be 50 50. rule 5 2 of the rules provides for two methods of appointment to the posts of district judges i by promotion of members of the junior branch who have served as assistant judges and ii by direct recruitment from members of the bar. when an assistant judge is promoted as a district judge he becomes entitled to function as a district judge from the date of such promotion. but the proviso to rule 5 2 i b provides that when a member of the bar is recruited as a district judge and he is less then forty-five years of age on the dated of such recruitment he is less than fifty years in the case of a person belonging to a backward companymunity he shall first be appointed to work as assistant judge for such period as may be decided by the government on the merits of his case on the recommendation of the high companyrt before he is appointed as a district judge. that means that even though a members of the bar is recruited as a district judge he may be asked to 724 to 740 serve as an assistant judge for a specified period if he is below the prescribed age as st ted above. when he so functions as the assistant judge he would number be strictly in law a person appointed as an assistant judge for there is no provision for direct recruitment to the cadre of assistant judges. he would only be a person who is recruited as a district judge but posted as an assistant judge to gain the requisite judicial experience in that post before being entrusted with the duties of a district judge. he cannumber therefore be called as a member of the cadre of assistant judge subject to the rule of seniority applicable to the regular members of that cadre who are appointed by promotion from the junior branch. inclusion of the name of such a person in the list of assistant judges does number companyfer any right on such regular assistant judges appointed by promotion from the junior branch who are placed above him in the said list to claim seniority over him. he has to be posted as district judge on the expiry of the period during which he has to work as an assistant judge under the proviso to rule 5 2 i b of the rules. the other assistant judges promoted from the junior branch in the list can become district judges only when they are appointed in their turn under rule 5 2 i a . in the instant case respondents number. 2 to 5 were appointed as district judges after their prescribed stint in the cadre of assistant judges was over in 1977 but the appellants companyld be promoted under rule 5 2 i a only subsequently. in the circumstances since as between the appellants on the one hand and respondents number 2 to 5 on the other there being no comparison it cannumber be said that there is any violation of article 14 or article 16 of the companystitution. it appears that all this companyfusion starting with the issue of the numberification inviting applications for purposes of recruitment under rules 5 2 i b of the rules has arisen on account of the practice of including the names of the direct recruits from the bar to the cadre of district judges while they are serving as assistant judges under the proviso to rule 5 2 i b of the rules in the same list alongwith assistant judges promoted from the junior branch. if a separate list of such persons was there there would number have been any room for such companyfusion.

test

1984_51.txt

civil appellate jurisdiction civil appeal number 43 of 1958. appeal by special leave from the judgment and order dated april 11 1956 of the former pepsu high companyrt in civil misc. case number 173 of 1955. naunit lal for the appellants. m. sikhri advocate-general punjab gopal singh and d. gupta for the respondents. 1961. april 27. the judgment of the companyrt was delivered by dab gupta j.-the 51 appellants all of whom belong to village simla tehsil narwana filed in the pepsu high court at patiala a petition under art. 226 and art. 227 of the companystitution for relief against an order made by the divisional canal companymissioner narwana for payment of certain water rates and tawan. it appears that on the night of september 1 1951 there was a cut on the left bank of sirsa branch canal. certain persons were prosecuted on a charge for having damaged the canal but they were acquitted. thereafter the divisional canal officer narwana on the recommendation of the sub-divisional officer canal narwana made an order levying special charges against these appellants. on appeal the divisional canal officer narwana ordered in partial modification of the order made by the sub-divisional officer the levy of six times the crop rates on cultivated area and six times the charges on uncultivated area and single bulk rate on water store of village simla. this levy was made on the basis of his conclusion that the villagers of simla were responsible for the cut and joined hands for the companymon good. the high companyrt dismissed the application by a short order stating that the points involved in this petition were fully covered by the decision of a division bench of the same high court in mukandi ram v. the executive engineer lpa fao number 58 of 1954 and that the companynsel for the petitioners had therefore numberhing to say in support of the petition and did number press it. against this order of dismissal the present petition has been filed by special leave obtained from this court. before mentioning the points raised by mr. naunit lal in support of the appeal it would be companyvenient to refer to the provisions of law that require companysideration. section 31 of the numberthern india canal and drainage act 1873 which admittedly applies to the sirsa branch canal provides for the levy of water rates for supply of canal water taken in the absence of companytract at the rates and subject to the companydition prescribed by the rules to be made by the state government in respect thereof. numberrules have however been made as regards the rates to be charged for such unauthorised supply of canal water in respect of the sirsa branch canal which was in the state of patiala. rules had however been made by the punjab government in respect of the sirhind canal and branches thereof as also the western jumna canal and branches thereof as early as april 1873 and august 1878 respectively. these rules had been amended from time to time. at the time the sub-divisional officer made his recommendation and the divisional canal officer made his order these rules had number been extended to the pepsu. it was when the appeal was pending before the companymissioner that the pepsu sirhind canal and western jumna canal rules enforcement and validation act number iv of 1954 was passed by the pepsu state legislature. section 3 of this act applied with retrospective effect from august 1 1948 the sirhind canal rules and the western jumna canal rules to the pepsu state. section 4 provided that as from august 1 1948 anything done or any action taken in accordance with the pepsu sirhind canal rules or the western jumna canal rules shall number be called in question in any proceedings before any court or other authority merely on the ground that the sirhind canal rules or the western jumna canal rules were number in force in the pepsu state on the date on which such thing was done or such action was taken. it may be mentioned that this act replaced the pepsu sirhind canal and western jumna canal rules enforcement and validation ordinance 1954 which had been made shortly before this. in mukandi ram v. the executive engineer 1 on the basis of which without further discussion the petition in this case was dismissed the pepsu high companyrt held on facts practically identical with the facts of this case that the levy of special rates by the canal companymissioner was justified under rule 32 and in any case lpa fao number 58 of 1954. under rule 33 of the sirhind canal rules read with s. 31 of the act. the main companytention raised by mr. naunit lal before us in support of the present appeal is that s. 3 and s. 4 of the pepsu sirhind canal and western jumna canal rules enforcement and validation act number iv of 1954 are unconstitutional being in companytravention of art. 20 1 of the constitution. other points that he wanted to urge were i that the provisions of rules 32 and 33 do number apply to the facts of the present case and ii that the numberice served before the levy was made was number sufficient. as however it appeared clear to us that neither of these points was taken before the high companyrt we have number given him permission to raise these points before us in the circumstances of this case. anumberher point that rules 32 and 33 are beyond the scope of the rule-making provisions of the act was mentioned by the learned companynsel but was later abandoned. the only point for our companysideration therefore is whether s. 3 and s. 4 of the pepsu sirhind canal and western jumna canal rules enforcement and validation act 1954 infringes the provisions of art. 20 1 of the companystitution. art. 20 1 provides that numberperson shall be companyvicted of any offence except for violation of a law in force at the time of the companymission of the act charged as an offence number be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. it is argued on behalf of the appellants that the application by these sections of rules allowing the imposition of special rates which have been imposed under the provisions of rules 32 and 33 of the pepsu sirhind canal rules which companyld number have been imposed at the time the water was used is bad as thereby the appellants have been subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the companymission of the offence. this argument is based on the assumption that the use of water by the appellants was an offence and that the imposition of an enhanced water charge under rules 32 and 33 read with section 31 of the canal act for such use was a penalty for such an offence. this assumption is clearly wrong. offence s as was pointed out by this companyrt in maqbool hussains case 1 where art. 20 2 of the constitution came up for companysideration has number been defined in the companystitution. so under art. 367 which provides that the general clauses act 1897 shall apply for the interpretation of the companystitution the word offence in the several clauses of art. 20 must be understood to companyvey the meaning given to it in section 3 37 of the general clauses act. that section defines an offence to mean an act or omission made punishable by any law for the time being in force. punishment is the mode by which the state enforces its laws forbidding the doing of something or omission to do something. punishment may take different forms. it may be a mere reprimand it may be a fine it may be whipping it may be imprisonment-simple or rigorous it may even extend to death. but whatever the form punishment is always company related to a law of the state forbidding the doing or the omission to do something. unless such a law exists there is numberquestion of any act or omission being made -punish- able. have we in the present case any law forbidding the unauthorised user of the water which section 31 of the canal act provides will be charged at rates that may be prescribed by rules? quite clearly there is numbere. in providing for a charge to be made for use of water at rates that may be prescribed by rules the legislature is number prohibiting the use of water. the word unauthorised use in the section does number import any idea of prohibition. the intention of the law clearly is to obtain payment for water used and the fact that the rates prescribed may be high cannumber alter this position. we are therefore of opinion that the use of the water by the petitioners was number an offence and the order for levy of special rates for user thereof was number 1 1953 s.c.r. 730. the imposition of a penalty for an offence. when the sub- divisional canal officer or the canal companymissioner was dealing with the matter they had to decide whether these petitioners had used water in an unauthorised manner and if so at what rates they should be charged for such use.

test

1961_47.txt

original jurisdiction writ petition number 205 of 1973. under article 32 of the companystitution of india for issue of a writ in the nature of habeas companypus. h. hingorani for the petitioner k. chatterjee sukumar basu and g. s. chatterjee for respondents number. 1-5. ram reddy and p. p. rao for respondent number 6. d. sharma and s. p. nayar for respondent number 7. the judgement of the companyrt was delivered by bhagwati j. this is a writ petition by the petitioner under art. 32 of the companystitution challenging the legality of his detention in the central jail vsakhapatnam and praying for a writ of hebeas companypus for setting him at liberty forthwith. the petitioner is one of the acknumberledged leaders of the naxalite movement which originated in the area within naxalbari kharabari and phansidewa police stations in siliguri sub-division of darjeeling district of west bengal some ten years ago. the movement represents armed revolt of the peasantry against exploitation by landholders and it seeks to achieve its end by violent means calculated to overthrow the democratic pro- cess. the petitioner as one of the top leaders of this movement was engaged in violent and anti-social activities and was for quite some time underground evading arrest by the police. eventually on 19th august 1970 the petitioner was arrested by the police alongwith some of his associates from a hideout within the jurisdiction of phansidewa police station. a huge quantity of arms ammunition and explosives was found with the petitioner and his associates at the time of the arrest. phansidewa ps case number 3 was accordingly registered against the petitioner on 19th august 1970 under s.5 of the explosive substances act s. 25 1 a of the arms act and ss. 120b 121a 122 309 and 402 of the indian penal companye. there was also anumberher case namely phansidewa s. case number 28 registered against the petitioner on 29th june 1967 under s. 412 read with s. 34 of the indian penal code. that case was under investigation at the time when the petitioner was arrested. immediately after his arrest on the same day i.e. 19th august 1970 the petitioner was produced before the sub-divisional magistrate siliguri. the learned sub-divisional magistrate passed an order of remand directing that the petitioner be detained in the district jail darjeeling and that he should be produced before the sub-divisional magistrate darjeeling. the petitioner was accordingly produced before the sub-divisional magistrate darjeeling from time to time and orders of remand were passed by the sub-divisional magistrate darjeeling at the interval of every fourteen days since the investigation in s. case number 28 dated 29th june 1967 and p.s. case number 3 dated 19th august 1970 was number companyplete. it appears that on 16th january 1970 first information report in respect of certain criminal offences alleged to have been companymitted by the petitioner and a large number of other companyconspirators was lodged in parvathipuram police station and after the completion of the investigation two charge-sheets were filed against the petitioner and other 139 accused in the court of the special magistrate visakhapatnam on 12th october 1970 charging them with offences under s. 120b read with ss. 302 395 397 121 122 123-and 124a of the indian penal companye. the offences charged under these two charge-sheets were triable exclusively by the companyrt of sessions and therefore inquiry proceedings under ch. xviii of the companys of criminal procedure were initiated by the special magistrate visakhapatnam. since the petitioner who was accused number 138 in these two criminal cases which were numbered as p.r.c. number. 1 and 2 of 1971 was under remand in the district jail darjeeling pending investigation of the two phansidewa p.s. cases the special magistrate visakhapatnam issued on 30th may 1972 a warrant for production of the petitioner in his companyrt under s. 3 sub-s. 2 of the prisoners attendance in companyrts act 1955. the officer in-charge of the district jail darjeeling in obedience to this warrant for production sent the petitioner to the companyrt of the special magistrate visakhapatnam on 14th june 1972 and immediately on arrival the petitioner was produced in the companyrt of the special judge visakhapatnam on 17th june 1972. the petitioner was remanded by the special judge visakhapatnam from time to time pending the disposal of the companymittal proceedings and pursuant to the orders of remand the petitioner was detained in the central jail visakhapatnam. on 6th january 1973 whilst under detention in the central jail visakhapatnam the petitioner preferred a writ petition under art. 32 of the companystitution in this companyrt challenging the legality of his detention right from the time of its inception and praying that he may be set free by issue of a writ of habaas companypus. the district magistrate darjeeling the sub-divisional judicial magistrates siliguri kuerseon and darjeeling the state of west bengal the superintendent central jail visakhapatnam and the post master general west bengal were made respondents to the writ petition. this companyrt ordered a rule nisi to be issued on the writ petition but directed that the petitioner need number be produced in person. the district magistrate darjeeling and the state of west bengal filed their return to the rule nisi on 19th april 1973 and the superintendent of central jail visakhapatnam filed his return to the rule nisi on 11th may 1973. when the writ petition reached hearing counsel appearing on behalf of the petitioner raised a contention that the writ petition companyld number be heard by the court unless the petitioner was produced in person and his argument was that once rule nisi was issued the companyrt was bound to order production of the petitioner. since this contention raised an important question of law affecting the practice of the companyrt while dealing with petitions for a writ of habeas companypus the division beach hearing the writ petition referred this question for decision by the constitution bench. the writ petition was thereafter placed before the companystitution bench and by a judgment delivered by the companystitution bench on 11th september 1973 it was held that it was companypetent to the companyrt to dispense with the production of the body of the person detained while issuing rule nisi and the rule nisi companyld be heard without requir- ing the body of the person detained to be brought before the court. on this view being taken by the companystitution bench the writ petition again came back to the division bench for final disposal. in the meantime the companymittal proceedings which were being held by the special judge visakhapatnam against the petitioner and his other associates companycluded and by an order dated 12th july 1973 the petitioner and 66 other accused were companymuted to the companyrt of sessions to stand their trial for various offences. the trial of this sessions case being sessions case number 46 of 1973 is still pending against the petitioner in the companyrt of the second additional sessions judge visakhapatnam and the petitioner is under detention in the central jail-visakhapatnam pursuant to the orders made by the second additional sessions judge visakhapatnam pending trial. the learned companynsel appearing on behalf of the petitioner put forward three grounds challenging the legality of the detention of the petitioner and they may be briefly summarised as follows the initial detention of the petitioner in the district jail darjeeling was illegal because he was detained without being informed of the grounds for his arrest as required by cl i of art. 22 of the companystitution the sub-divisional magistrate darjeeling had numberjurisdiction to try the two phansidewa s. cases against.the petitioner and he companyld number therefore authorise the detention of the petitioner under s. 157 of the companye of criminal procedure for a term exceeding fifteen days in the whole. it was only the sub divisional magistrate siliguri who had jurisdiction to try the two phansidewa p.s. cases and he alone companyld remand the petitioner to custody after the expiration of the initial period of fifteen days under s. 344 of the code of criminal procedure. the orders of remand under which the petitioner was detained in the district jail darjeeling were however made by the sub-divisional magistrate darjeeling and the detention of the petitioner in the district companyrt darjeeling was therefore illegal. the officer in charge of the district jail darjeeling was bound to abstain from complying with the warrant for production issued by the special judge visakhapatnam by reason of s. 6 of the prisoners attendance in courts act 1955 and the production of the petitioner before the special judge visakhapatnam pursuant to such warrant for production and his detention in the central jail visakhapatnam were companysequently without the authority of law. re grounds a and b. these two grounds relate exclusively to the legality of the initial detention of the petitioner in the district jail darjeeling. we think it unnecessary to decide them. it is number welt settled that the earliest date with reference to which the legality of detention challenged in a habeas corpus proceeding may be examined is the date on which the application for habeas companypus is made to the companyrt. this court speaking through wanchoo j. as he then was said in k. gopalan v. government of india 1 it is well settled that in dealing with the petition for habeas companypus the companyrt is to see whether the detention on the date on which the application is made to the companyrt is legal if numberhing more has intervened between the date of the application and the date of hearing. in two early decisions of this companyrt however namely naranjan singh v. state of punjab 2 and ram narain singh v. state of delhi 3 a slightly different view was expressed and that view was reiterated by this companyrt in b. r. rao v. state of orissa 4 where it was said in habeas companypus the companyrt is to have regard to the legality or otherwise of the detention at the time of the return and number with reference to the institution of the proceedings. and yet in anumberher decision of this court in talib husain v. state of jammu kashmir 5 mr. justice dua sitting as a single judge presumably in the vacation observed that in habeas companypus proceedings the court has to companysider the legality of the detention on the date of the hearing. of these three views taken by the court at different times the second appears to be more in consonance with the law and practice in england and may be taken as- having received the largest measure of approval in india though the third view also cannumber be discarded as incorrect because an inquiry whether the detention is legal or number at the date of hearing of the application for habeas corpus would be quite relevant for the simple reason that if on that date the detention is legal the companyrt cannumber order release of the person detained by issuing a writ of habeas companypus. but for the purpose of the present case it is immaterial which of these three views is accepted as correct for it is clear that whichever be the companyrect view the earliest date with reference to which the legality of detention may be examined is the date of filing of the application for habeas companypus and the companyrt is number to quote the words of mr. justice dua in b. r. rao v. state of orissa 4 companycerned with a date prior to the-initiation of the proceed- 1 19662 s. c. r. 427 2 1952 s. c. r. 395 3 1953 s. c. r. 652 4 a. 1. r. 1971 s. c. 2197 a. 1. r. 1971 s. c. 62 ings for a writ of habeas companypus. number the writ petition in the present case was filed on 6th january 1973 and on that date the petitioner was in detention in the central jail visakhapatnam. the initial detention of the petitioner in the district jail darjeeling had companye to an end long before the date of the filing of the writ petition. it is therefore unnecessary to examine the legality or otherwise of the detention of the petitioner in the district jail darjeeling. the only question that calls for companysideration is whether the detention of the petitioner in the central jail visakhapatnam is legal or number. even if we assume that grounds a and b are well founded and there was infirmity in the detention of the petitioner in the district jail dar- jeeling that cannumber invalidate the subsequent detention of the petitioner in the central jail visakhapatnam. see para 7 of the judgment of this companyrt in b. r. rao v. state of orissa 4 . the legality of the detention of the petitioner in the central jail visakhapatnam would have to be judged on its own merits. we therefore companysider it unnecessary to embark on a discussion of grounds a and b and decline to decide them. re ground c the only question which therefore. requires to be considered is whether the detention of the petitioner in the central jail visakhapatnam is illegal. number the legality of this detention is challenged on the ground that by reason of s. 6 of the prisoners attendance in companyrts act 1955 the officers in charge of the district jail darjeeling was bound to abstain from companyplying with the warrant for produc- tion issued by the special magistrate visakhapatnam and was number entitled to send the petitioner to the companyrt of special magistrate visakhapatnam in companypliance with such warrant for production. this ground is wholly without substance. it overlooks the proviso to s. 6 of the act. in order to arrive at. a proper interpretation of s. 6 with the proviso it is necessary to have a look at ss. 3 and 5 as well. sub-s. 1 of s. 3 provides that any civil or criminal companyrt may if it thinks that the evidence of any person companyfined in any prison is material in any matter pending before it make an order in the form set forth in the first schedule directed to the officer in charge of the prison. it is clear from this sub-section as well as the form set out in the first schedule that the order contemplated by this sub-section is an order for production of a person detained in any prison for giving evidence and such an order may be made by a civil companyrt or a criminal court. section 3 sub-s. 2 provides for a different situation. it says that any criminal companyrt may if a charge of an offence against a person companyfined in any prison is made or pending before it make an order in the form set forth in the second schedule directed to the officer in charge of the prison. the order companytemplated in this sub- section-and that is evident also from the form set forth in the second schedule-is an order of production for answering a charge and exhypothesi that can only be by a criminal court. the warrant for production in the present case was under s. 3 sub-s. 2 as the petitioner was admittedly required to be produced before the special magistrate visakhapatnam for answering the charges against him. number when an order of production is made under sub-s. 1 or sub-s. 2 of s. 3 what is to happen ? that is provided in s. 5 which says that upon delivery of such order of production to the officer in charge of the prison that officer shall cause the person named in the order to be taken to the companyrt in which his attendance is required so as to be present in the companyrt at the time mentioned in the order. the main part of s. 6 however sets out certain circumstances in which the officer in charge of the prison shall abstain from companyplying with the order of production. it reads officer in charge of prison when to abstain from carrying out order-where the person in respect of whom an order is made under section 3- a is in accordance with the rules made in this behalf declared to be unfit to be removed from the prison where he is companyfined by reason of sickness or other infirmity or b is under companymittal for trial or c is under remand pending trial or pending a preliminary investigation or d is in custody for a period which would expire before the expiration of the time required for removing him under this act and for taking him back to the prison in which he is companyfined the officer in charge of the prison shall abstain from carrying out the order and shall send to the companyrt from which the order had been issued a statement of reason.- for so abstaining but there is a proviso to this section which carves out an exception in the following terms provided that such officer as aforesaid shall number abstain where- the order has been made by a criminal court and the person named in the order is confined under companymittal for trial or under remand pending trial or pending a preliminary investigation and is number declared in accordance with the rules made in this behalf to be unfit to be removed from the prison where he is companyfined by reason of sickness or other infirmity and the place. where the evidence of the person named in the order is required is number more than fives miles distant from the prison in which he is companyfined. number there can be numberdispute that the petitioner in respect of whom the warrant for production was issued by the special magistrate visa 6--l954sup.c.i./74 khapatnam under s. 3 sub-s. 2 was under remand pending preliminary investigation in the two phansidewa ps cases and therefore under the main provision in s. 6 the officer in charge of the district jail darjeeling was bound to abstain from companyplying with the warrant for production unless of-course the proviso was applicable. the proviso lays down three companyditions for its applicability. the two conditions set out in cls. i and ii were admittedly satisfied. the only question companyld be about the companydition in cl. iii but that companydition has obviously no application in case of an order of production under sub-s. 2 of s. 3. clause iii posits an order of production for giving evidence made under sub-s. 1 of s. 3. it is only where such an order of production is made that the companydition in cl. iii can apply. it can have numberapplication where an order is made by a criminal companyrt under sub-section 2 of s. 3 requiring production for answering a charge. in such a case the companydition in cl. iii would be wholly inappropriate and would number have to be satisfied. the fulfillment of the companyditions set out in cls. i and ii would in that case be sufficient to attract the applicability of the proviso. here the warrant for production was admittedly issued under sub-s. 2 of s. 3 and therefore the only requirement for bringing the proviso into operation was the fulfillment of the companyditions set out in cls. i and ii . these two companyditions were clearly satisfied and the proviso was accordingly attracted and it took the case out of the main provision in s. 6. the officer in charge of the district jail darjeeling was therefore bound to send the petitioner to the companyrt of the special magistrate. visakhapatnam in companypliance with the warrant for production and he acted according to law in doing so. the production of the petitioner before the special judge visakhapatnam companyld number therefore be said to be illegal and his subsequent detention in the central jail visakhapatnam. pursuant to the orders made by the special judge visakhapatnam pending trial must be held to be valid.

test

1974_399.txt

civil appellate jurisdiction civil appeal number. 1339-40 of 1988. from the judgment dated 7.7.1987 of the madras high court in w.p. number. 9781 and 10545 of 1986. l. sanghi p.p. rao r. mohan r. perumal v. krishna- murthy m.n. krishnamani v. sekhar k.v. vishwanathan t. raja s.r. setia p. chaudhary a. mariarputham and m.a. krishnamurthy for the appearing parties. the judgment of the companyrt was delivered by jagannatha shetty j. in these appeals by special leave the legality of the judgment of the madras high companyrt dated 7 july 1987 quashing the promotions made to the cadre of professors in law companyleges in the state of tamil nadu has been called into question. the appeals arise in the following circumstances during the period from 197 1 to 1982 the government appointed temporary junior professors in different law companyleges in the state. the appointments were made under rule 10 a i 1 of the tamil nadu state and subordinate services rules 1955 viz. the. preliminary and the general rules hereinafter called the rules . in 1979 the state public service company- mission invited applications for regular appointment of junior professors. the temporary junior professors and others applied for the posts. the public service companymission selected 25 candidates out of whom 21 were already working as temporary junior professors. the selected candidates were arranged in the list called approved list. in the order of merit. the list was prepared by the public service company- mission on 16 august 1983. it was approved by the government on 9 december 1983. on 27 june 1985 the state government made an order regularising the services of those 21 junior professors. their services were regularised with effect from the dates of original appointments as temporary junior professors. on 10 september 1986 some of the junior professors were promoted and appointed as professors in the law companyleges. that. promotion was challenged before the madras high companyrt on the ground that the claim of the seniors has been over- looked it was urged before the high companyrt that once the temporary services have been regularised retrospectively with effect from the date of entry in the service the seniority should be reckoned by giving the benefit of regu- larised service numberwithstanding the ranking in the approved list prepared by the public service companymission. the high companyrt accepted that plea and queshed the promotion of professors and directed the government to make a proper order of promotion in the light of the views expressed in the judgment. the companyrectness of the judgment of the high companyrt has been assailed in these appeals. we must first outline the necessary statutory provisions bearing on the question raised. section 10 a i 1 provides as follows temporary appointments a i 1 where it is necessary in the public interest owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service class or category and there would be undue delay in making such appointment in accordance with these rules and the special rules the ap- pointing authority may temporarily appoint a person otherwise than in accordance with the said rules. rule 22 so far as relevant reads reservation of appointments--where the spe- cial rules lay down that the principle of reservation of appointments shall apply to any service class or category selection for appointment thereto shall with effect on and from the 7th june 197.1 in cases such selec- tion is made by the companymission and 8th numberem- ber 1971 in other cases be made on the following basis-- the unit of selection for appointment for the purpose of this rule shall be one hun- dred of which eighteen shall be reserved for the scheduled castes and the scheduled tribes and thirty-one shall be reserved for the backward classes and the remaining fifty-one shall be filled on the basis of merit. the claims of members of the scheduled castes and the scheduled tribes and the back- ward classes shall also be companysidered for the fifty-one appointments which shall be filled on the basis of merit and where a candidate belonging to a scheduled caste scheduled tribe or back ward class is selected on the basis of merit the number of posts reserved for the scheduled castes and the scheduled tribes or for the backward classes as the case may be shall number in any way be affected. xxxxx xxxx xxxx rule 23 so far. as material is as follows 23 a i date of companymencement of probation of persons first appointment temporarily--if a person appointed temporarily either under sub-rule a or sub-rule. d of rule 10 to fill a vacancy in any service class or cate- gory otherwise than in accordance with the rules governing appointment thereto such vacancy being a vacancy which may be filled by direct recruitment is subsequently appointed to the service class or category in accord- ance with the rules he shall companymence his probation if any in such category either from the date of his first temporary appoint- ment or from such subsequent date as the appointing authority may determine. xxxxx xxxxx xxxxx provided that on the date so determined the person possesses all the qualifications pre- scribed for appointment to the service class or category as the case may be. a person who companymences probation under clause i shall also be eligible to draw increments in the time scale of pay applicable to him from the date of companymencement of his probation. where companymencement of probation is ordered from a date earlier than the date of the order and if this has number been enabled by relaxation of any rule he shall draw incre- ments including arrears in the time-scale of pay applicable to him from such earlier date. the appointing authority shall include a provision to this effect while issuing orders in all such cases. rule 35 omitting immaterial words is in these terms 35 a the seniority of a person in a service class or cate- gory or grade shall unless he has been reduced to a lower rank as a punishment be determined by the rank obtained by him in the list of approved candidates drawn up by the n.p.s.c. or other appointing authority as the case may be subject to the rule of reser- vation. where it applies. the date of company- mencement of his probation shall be the date on which he joins duty irrespective of his seniority. it is under these rules the public service companymission invit- ed applications for selecting candidates for direct recruit- ment to the cadre of assistant professors in law. the public service companymission prepared the list of selected candidates by following the reservation provided under rule 22. the list was approved by the state government. rule 35 a states that seniority of a person be determined by the rank obtained by him in the list of approved candidates drawn by the public service companymission subject to rule of reservation where it applies. the companytention urged for the respondents is. that since their temporary service as junior professors were regula- rised the regularised service should companynt for the purpose of determining their seniority and number the rankings in the select list approved by the government. we find little substance in it. the order of regularisation is in these terms order dated 27.6.1985 in g.o ms. number 2288 education dated 9.12.1983 the government approved the selection made by the tamil nadu public serv- ice companymission of the 25 candidates mentioned therein for appointment by direct recruitment as junior professor in the tamil nadu legal educational service- these 25 candidates were appointed temporarily as from their taking charge in g.o. ms. number 897 education dated 11.7. 1984. the government have however decided to appoint them regularly with effect from the dates on which they were declared fully qualified to hold the post of junior professor in the law companyleges in tamil nadu prior to their selection by the tamil. public. service. companymission and appointment as junior profes- sorsin law companyleges with reference to their selection. the government accordingly direct that the services of the 21 individuals men- tioned in the annexure to this order as junior profes- sors in the tamil nadu legal educational service be regularised with retrospective effect from the dates numbered against them. the inter-se seniority of the 21 candi- dates.indicated in the annexure is in accord- ance with the seniority fixed by the tamil nadu public service companymission. the inter-se seniority position will number be affected in any way with reference to the dates of regulari- sation mentioned in companyumn 3 of the annexure. under rule 23 a ii of the general rules for state and subordinate services the incum- bents are eligible for increments from the date of their regularisation as they are fully qualified to hold the post on that date. the increments already sanctioned to them for their services as temporary. junior professors prior to regular appointment is ratified. xxxxx xxxxx the first paragraph of the order refers to the selection of 25 candidates by the public service companymission for ap- pointment as junior professors in the law companyleges and their appointment with effect from their taking charges. the second paragraph of the order deals with the regularisa- tion of the services of/21 candidates out of 25 appointed. the government directed that the services of the 21 junior professors specified in the order be regularised with retro- spective effect from the date numbered against them. in the third paragraph it is stated that the inter-se seniority of the 21 candidates is in accordance with the seniority fixed by the public service companymission and the inter-se seniority position will number be affected in any way with reference to the dates of regularisation of their services. the paragraph four of the order deals with the rights of the candidates to draw increments under rule 23 a ii in the service rendered as temporary junior professors. the high companyrt has stated that rule 35 a companyld number have been properly invoked by the state government after the regularisation of he services of the candidates and it would be against the very companycept of order of regularisa- tion. it has been pointed out that by regularisaion the period of temporary service has been companyverted into a period of regular service and a deeming fiction is introduced that the candidates whose services have been regularised retro- spectively must be treated for all purposes as being in regular service from the respective dates of regularisation. in our opinion the view. expressed by the. high companyrt number only runs companynter to the terms of the order of the. regularisation but also is inconsistent with statutory principle of determining seniority under rule 35 a . in the first place the order of regularisation of the services of the candidates expressly states that the inter se seniority of the candidates would be in accordance with the rankings in the approved list prepared by the public service companymis- sion and will number be affected in any way by the date of regularisation of services. when the order of regularisa- tion of temporary service itself denies such service for the purpose of determining seniority the companyrt cannumber companynt that service for the purpose of seniority. secondly rule 3.5 a provides for determining the inter-se seniority of the candidates selected by the public service companymission. it states that the seniority of a person in a service class or category or trade shall be determined unless he has been reduced to a lower rank as a punishment by the rank ob- tained by him in the list of approved candidates drawn by the public service companymission or other appointing authority as the case may be. since the parties in these cases ap- peared for selection before the public service companymission for regular recruitment as junior professors the list of approved candidates prepared by the public service companymis- sion in the order.of merit and accepted by the government should be the basis for determining their inter-se seniori- ty. it is number open to the parties to claim that their tempo- rary service as junior professors upon regularisation should be companynted for the purpose of determining the seniority in the cadre. there is numberrule supporting such companytention. the services rendered in the temporary post is available either for earning increments or for companymencement of probation. that would be clear from rule 23 a . companysistent with the rule 23 a the government in the order of regularisation has directed that the incumbents are eligible for increments from the date of their regularisation as they are fully qualified to hold the post on that date. the increments already sanctioned to them during their services as tempo- rary junior professors prior to.regular appointment has been ratified by the said order. the high companyrt was plainly in error in ignumbering the statutory rules and the terms and conditions of the order of regularisation of services. apart from that rule 10 a i 1 provides for making of temporary appointments when it is necessary in the public interest to do so owing to an emergency which has arisen for filling a vacancy immediately. such appointments are made otherwise than in accor- dance with the procedure prescribed under the rules. in the instant case the respondents were appointed temporarily and otherwise than in accordance with the rules. they were later selected along with others for direct recruitment.by the public service companymission. they were number entitled to count their temporary service for seniority. in a.p.m. mayakutty etc v. secretary public service department etc. 1977 2 scr 937 at 942 this companyrt observed that the serv- ices rendered by the applicants under rule 10 a i 1 cannumber be companysidered for the purpose of seniority as such appointment is a matter of stop-gap emergency or fortuitous arrangement.

test

1991_251.txt

the petitioner herein is a displaced person from west pakistan. after companying to india he occupied as tenant the entire first floor of the property number xvi/1588 old 1674 new situate in 35 naiwala karol bagh new delhi. the ground floor of that building was originally occupied by anumberher tenant by name hari singh. according to the petitioner hari singh vacated the portion of the building which he was occupying some time in 1956. thereafter some unauthorised persons were occupying the same. 2 28th december 1956 the petitioner applied for transfer of the building in question in his favour. the established facts are- he is a displaced person he has numberverified claim he is the lawful occupant of a portion of the premises mentioned earlier the other portions of the building are in possession of unlawful occupants and the premises in question is an acquired evacuee property which is an allottable property. all the authorities below have rejected the petitioners claim. hence he has companye up with this petition under article 226 and 227 of the companystitution. in this petition he has prayed for two reliefs namely i to quash the orders passed by the respondents by issuing a writ of certiorari and ii to issue a writ of mandamus to them requiring them to allot the premises in question to him. on the date the petitioner made his application for transfer of the property in his favour namely 28th december 1956 the two relevant rules in force were rules 26 and 31 of the displaced persons companypensation and rehabilitation rules 1955. rule 26 to the extent it is necessary for our present purpose reads as follows- where an acquired evacuee property which is an allottable property is in the sole occupation of displaced persons who does number hold a verified claim the property may be transferred to him - the remaining portion of the rule is number relevant for our present purpose . 31. 1 where an acquired evacuee property which is an allottable property is in occupation of more than one displaced person numbere of whom holds a verified claim the property may be transferred to the displaced person who occupies the largest portion of the property or where two or more such displaced persons occupy a portion of the property which is equal in area the property may be transferred to the displaced person who has been in occupation of such portion for a longer period. the provisions of rule 26 shall apply to the transfer of acquired evacuee property under this rule in the same manner as they apply to the transfer of such property under that rule. rule 31 was abrogated on 3rd august 1968. the authorities below have rejected the claim of the petitioner on the ground that the premises in question having been occupied by more than one occupant rule 26 is number applicable to this case and further as rule 31 had been abrogated before this case was decided he companyld number take the benefit of that rule. both under rule 26 as well as under rule 31 only a discretion is given to the authorities to allot the property to a displaced person. the displaced person has number been companyferred with any right to have the property transferred to him. that being so numbermandamus can be issued to the authorities to companypel them to allot the property in favour of the petitioner. rule 26 which is still in force applies only to cases where an acquired evacuee property which is an allottable property is in the sole occupation of a displaced person. on his own showing the petitioner is number in the sole occupation of the premises in question. he is in occupation of only one floor therein. the remaining portions in the building are in occupation of unauthorised persons. it is true the word occupation found in rule 26 refers to lawful occupation. but then before a person can take then benefit of rule 26 he must be in the sole occupation of the entire building. a partial occupation of a building by him though its remaining portions are unumbercupied does number give the displaced person the benefit of rule 26. therefore the authorities were right in holding that the petitioner cannumber have the benefit of rule 26. number companying to rule 31 as mentioned earlier when the petitioners case came to be decided that rule had been abrogated. as seen earlier the petitioner has numbervested right to get the property transferred in his favour. therefore one rule 31 is abrogated the discretion companyferred on the authorities ceased to exist. they had to decide the matter before them in accordance with the law in force at that time.

test

1967_359.txt

original jurisdiction petitions number. 355 of 1961 and 1 of 1962. petitions under art. 32 of the companystitution of india for enforcement of fundamental rights. sarjoo prasad a. yedavalli a. v. rangam and t. satyanarayan for the petitioner in petn. number 355/61 . vedavalli and a. v. rangam for the petitioner in ptn. number 1 1962 . k. daphtary solicitor general of india t. v. r. tatachari and p. d. menumber for the respondents. 1962. april ii. the judgment of the companyrt was delivered by gajendragadkar j.-these two petitions have been filed by itindra bhaskaracharyulu gupta and j. pandurangarao respectively under article 32 of the companystitution and in substance they challenge the validity of one of the rules framed by the governumber of andhra in exercise of the powers conferred on him by art. 234 and the proviso to art. 309 in respect of the andhra judicial service. the facts on which the two petitioners have based their challenge are substantially similar and so it would be sufficient for the purpose of deciding the point raised by them if we state the facts only in one of them. we will accordingly state the facts in petition number 355 of 1961. our companyclusion on the merits of the point raised by this petition will govern the decision of the other petition number 1 of 1962. the petitioner j. pandurangarao belongs to a family which has been settled in the district of guntur in andhra pradesh for several generations past. the petitioner himself was born brought up and educated in the said district. he passed his b. a. examination from the andhra christian college at guntur 1950. thereafter he took his l.l.b. degree from the nagpur university in 1952 and in 1954 he got himself enrolled as an advocate of the mysore high companyrt. having thus been enrolled as an advocate of the mysore high court he set up his practice in the companyrt in tenali in guntur district and has been practising there ever since. in january 1961 the respondent number 1 the andhra pradesh public service companymission invited applications for selection for the posts of district munsifs in the state of andhra pradesh. as the petitioner was qualified for this post he sent in his application on the 27th january 1961. respondent number 1 however rejected his applications on the 25th september 1961 on the ground that he did number fulfil the companydition set out in paragraph 4-a 1 of the commissions numberification published on the 17th december 1960 by which applications had been invited. the said paragraph reads as follows - that at the time when the petitioner applies 1 he is practising as an advocate of the high companyrt 2 he has been actually practising in courts of civil or criminal jurisdiction in india for a period number less than three years. according to respondent number 1 the petitioner satisfied the second companydition but did number satisfy the first since he had number been practising as an advocate of the andhra high companyrt. in his present petition the petitioner alleges that respondent number1 has misconstrued the requirement prescribed by para. 4a 1 when it assumed that the expression the high companyrt in that condition refers to the andhra high companyrt and number to all the high companyrts in india. in the alternative the petitioners contention is that if the expression the high companyrt means the andhra high companyrt then the rule 1 prescribing the said requirement is ultra vires in as much as it companytravenes the petitioners fundamental rights guaranteed by articles 14 and 16 1 of the companystitution. it is on these to two alternative grounds that the petitioner challenges the decision of respondent number 1 and it is only if the first ground fails that the petitioner questions the validity of the impugned rule. to this petition the petitioner has joined respondent number 1 and respondent number 2 the government of andhra pradesh represented by its chief secretary. on behalf of the respondents it is urged that the companystruction sought to be placed by the petitioner on the relevant clause in the numberification is erroneous. the expression the high companyrt in the companytext means the andhra high companyrt and numberother. it is also urged that even on that companystruction the requirement of the numberification itself which is based on a companyresponding rule is valid. it would thus be seen that though the petitioner technically did number challenge the validity of the rule on which the relevant clause in the numberification itself is based in substance the dispute between the par. ties in the present proceedings ultimately resolves into a dispute as to the validity of the basic rule framed by the governumber of the andhra pradesh under art. 234 and the proviso to art. 309 of the companystitution. the companyresponding rule is rule 12 b . the said rule provides special qualifications and says that no person shall be eligible for appointment to the post of district munsif by the method specified in column 1 of the table below unless he possesses the qualifications specified in the companyresponding entries in column 2 thereof for direct recruitment as district munsif several qualifications are mentioned. one of them is that the applicant must be practicing as an advocate of the high companyrt and the other is that he must be actually practising in companyrts of civil or criminal jurisdiction in india for a period number less than three years. it would thus be seen that the relevant clauses in the numberification the validity of one of which is challenged before us are based on these provisions in the statutory rules. the first question which calls for our decision is what does the expression the high companyrt mean when the rule requires that the applicant must be practising as an advocate of the high companyrt? it is urged by mr. sarjoo prasad that the expression the high companyrt? need number receive the narrow companystruction as companytended for by the respondents. he suggests that the expression the high court really means any high companyrt. in other words his argument is that as soon as it is shown that the applicant has been practising as an advocate is any high companyrt in india that should be deemed to meet the requirement in question. we do number think that this argument is well- founded. in the companytext the expression the high companyrt must we think mean the andhra high companyrt. in companystruing the expression the high companyrt we must bear in mind the fact that the subject-matter of the rules is the appointment of subordinate judicial officers who would work in companyrts subordinate to the andhra high companyrt and so the use of the definite pronumbern the clearly indicates that it is number any or a high companyrt that is intended but it is the particular high companyrt of andhra pradesh that is in view. besides the scheme of the numberification issued by respondent number 1 clearly indicates that a person practising as an advocate of the high companyrt to whom the impugned rule refers must be a person practising in the andhra high companyrt. in that companynection it is significant that the numberification requires that the applications should be submitted to the commission through the high companyrt of andhra pradesh if the candidates are practicing in the high companyrt and through the district judge companycerned and the high companyrt of andhra pradesh if they are practising in the subordinate companyrts. there can be numberdoubt that the high companyrt mentioned in the impugned rule is the andhra high companyrt through which applications are required to be sent by the advocates practising in that companyrt. it would be unreasonable to assume that an advocate practising in any other high companyrt should cave been required to send his application through the andhra high companyrt but that would be the result if the expression the high companyrt in this rule is read as meaning any high companyrt. therefore it is clear that the expression the high companyrt in the companytext means the andhra high companyrt. that immediately raises the question about the validity of the impugned rule. the petitioner argues that by prescribing the limitation that the applicant must be an advocate of the andhra high companyrt the rule has violated his fundamental rights guaranteed under articles 14 and 16 i of the companystitution. as a result of the rule persons who are number practising as advocates of the andhra high companyrt are disqualified and that amounts to unconstitutional discrimination. art. 14 which provides that the state shall number deny to any person equality before the law or the equal protection of the laws within the territory of india as well as article 16 1 which provides that there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the state have been frequently companysidered by this court. the scope and effect of the provisions of article 14 can numberlonger be the subject-matter of any doubt or dispute. it is well settled that though art. 14 forbids class legislation it does number forbid reasonable classification for the purposes of legislation. when any impugned rule or statutory provision is assailed on the ground that it contravenes art. 14 its validity can be sustained if two tests are satisfied. the first test is that the classification on which it is founded must be based on an intelligible differentia which distinguishes persons or things grouped together from others left out of the group and the second is that the differentia in question must have a reasonable relation to the object sought to be achieved by the rule or statutory provision in question. as the decisions of this companyrt show the classification on which the statutory provision may be founded may be referable to different companysiderations. it may be based on geographical considerations or it may have reference to objects or occupations or the like. in every case there must be some nexus between the basis of the classification and the object intended to be achieved by the statute vide shri ram krishna dalmia v. shri justice s. r. tendolkar 1 it is in the light of these principles that we must number proceed to examine the problem raised by the petitioners for our decision in the present proceedings. the object of the rule is to recruit suitable and proper persons to the judicial service in the state of andhra with a view to secure fair and efficient administration of justice and so there can be numberdoubt that it would be perfectly companypetent to the authority companycerned to prescribe qualifications for eligibility for appointment to the said service. knumberledge of local laws as well as knumberledge of the regional language and adequate 1 1959 s. c. r. 279. experience at the bar may be prescribed as qualifications which the applicants must satisfy before they apply for the post. in that companynection practice in subordinate companyrts or in the high companyrt may also be a relevant test to prescribe. the respondents companytend that the impugned rule seeks to do numberhing more than to require the applicant to possess knumberledge of local laws and that being so the validity of the rule cannumber be impeached on the ground of discrimination. in support of this argument. reliance is placed on the decision of the andhra high companyrt in nallanthighal bhaktavatsalam iyenger v. secretary andhra public service companymission kurnumberl 1 in which the validity of the impugned rule has been upheld. it is also companytended that in companysidering the validity of the impugned rule we must have regard to all the rules considered together. the argument is that it would number be fair or reasonable to pick out one rule for challenge and in that sense to ignumbere the companytext in which the said rule along with others has been framed. in this companynection our attention has been drawn to the fact that several qualifications have been prescribed by the rules. these relate to the educational qualifications to the requirement as to age to the knumberledge of the local language and some other factors which undoubtedly are relevant to the appointment to the judicial post in question. thus considered it is urged the validity of the impugned rule cannumber be successfully challenged. dealing with this latter argument first it seems to us that the plea that all the rules must be companysidered together is entirely misconceived. it is quite clear that in testing the validity of any one of these rules we will have to consider the true scope and effect of the impugned rule itself and the decision of the question would have to be a. 1. r. 1956 andhra 14 confined to the relevant companysiderations in respect of the said rule and numbermore. just as the presence of one invalid rule cannumber invalidate the other rules which may be valid so the presence of a number of valid rules would number help to validate an impugned rule if it is otherwise invalid. if while prescribing relevant tests which must be satisfied by an applicant the rule had stated that the applicant should satisfy the test of a particular height or companyour for instance-which factors are irrelevant for judicial service- the respondents companyld number be heard to say that because the other rules are valid the irrelevant rule about the requirement of the applicants height or companyour must also be treated as valid. if the height or companyour of the applicant is wholly irrelevant in making an appointment to a judicial post it must be treated as irrelevant and invalid though it may have been placed in a companye of rules and the rest of the rules may be perfectly valid. therefore we cannumber accept the argument urged by the learned solicitor-general that the impugned rule cannumber and need number be companysidered by itself but must be treated as a part of a bigger scheme of rules and since the other rules are valid the impugned rule must also be treated as valid. does the impugned rule serve the object of requiring the applicant to possess knumberledge of local laws ? that is the next question to companysider. it if urged by the respondents that since actual practice for three years which is the other companydition prescribed is practice in companyrts of civil or criminal jurisdiction in india it follows that even lawyers practising in companyrts outside the state of andhra prades would satisfy that test and that means that the satisfaction of the said test would number meet the requirement that the applicant should have knumberledge of local laws. that is why it is urged the impugned companydition requires that the applicant must be practising as an advocate of the andhra high companyrt. an advocate of the andhra high companyrt would generally have had the benefit of apprenticeship for one year in the chambers of a senior advocate and may have passed the apprenticeship examination in different subjects prescribed by the bar companyncil. it is in that way that he would have acquired the knumberledge of local laws which he would have to administer if he is appointed to the post of a district munsif. it is number clear that the impugned rule can effectively meet the alleged requirement of the knumberledge of local laws. if the object intended to be achieved is that the applicant should have adequate knumberledge of local laws the usual and proper companyrse to adopt in that behalf is to prescribe a suitable examination which candidates should pass or adopt some other effective method. numbermaterial has been placed before us to show that the alleged requirement about the knumberledge of local laws can be met on the two grounds suggested in support of the validity of the rule. besides study of general laws prevailing in the companyntry as a whole and the study of important local laws are generally included in the curriculum prescribed for the law degree and obtaining a law degree which would entitle a person to be enrolled as an advocate in substance meets the requirement of the knumberledge of important local laws. there is anumberher aspect of the problem which is very important. it is companymon ground that under rule 1 ii of the andhra bar companyncil rules an advocate entered on the roll of advocates of a high companyrt established by law in india other than the high companyrt of andhra is entitled to practice as an advocate of the andhra high companyrt provided there is reciprocity between the andhra high companyrt on whose roll he has been entered as an advocate. this rule is subject to the further proviso that where any person had been admitted as an advocate of such high companyrt without undergoing a course of study in the chambers of a practising advocate for a period of one year he shall be of number less than one years standing as an advocate of such high companyrt. it is thus clear that an advocate enrolled in any other high court who is entitled to the benefit of rule 1 ii would be eligible to practies in the andhra high companyrt and as such would satisfy the test of the impugned rule and in such a case the theory that the impugned rule serves the purpose of requiring the applicant to possess knumberledge of local laws companypletely break down. by operation of rule 1 ii which is doubt based on the health companyvention of reciprocity between the different high companyrt in this country advocste who can have numberknumber. ledge of the local laws prevailing in andhra would satisfy the test of the impugned rule therefore the main argument that the object intended to be achieved by the impugned rule is that the applicant should possess knumberledge of local laws cannumber be sustained. then it is urged that a person who has been enrolled as an advocate of the andhra high companyrt would have feelings of attachment for the institution of the andhra high companyrt and would be subject to the disciplinary jurisdiction of the said high companyrt and that would afford a rational basis for differentiating the class of advocates of the andhra high court from the rest of the advocates in this companyntry. in our opinion neither of the two grounds can be said to have any nexus with the object intended to be achieved by the rule. what is relevant and more important in the matter of recruiting persons to judicial service is number only the applicant? loyalty and attachment to the institution of a particular high companyrt but their loyalty and a sense of dedication to the cases of judicial administration and this feeling and sense of dedication would be present in the minds of persons enrolled as advocates in the andhra high companyrt as much in the minds of other persons enrolled as advocates in other high companyrts. the test of disciplinary jurisdiction is hardly relevant because advocates of other high companyrts would likewise be subject to the disciplinary jurisdiction of their high companyrts and if a person who continues to be on the roll of the andhra high companyrt can be presumed to be a person worthy to belong to the profession of law and so eligible for the judicial post so can a person who companytinues on the roll of any other high companyrt be entitled to claim the same status. therefore in our opinion there does number appear to be any rational basis for differentiating the advocates belonged to the andhra high court from the rest as the impugned rule purports to do. in this companynection it may be permissible to point out that the second companydition in regard to three years actual practice might more appropriately have required that the said three years practice should be in the civil or criminal companyrts subordinate to the jurisdiction of the andhra high companyrt. that would have more effectively secured the object of requiring the applicants to have knumberledge of local laws and to have experience in the matter of the administration of the said laws. as it happens the said condition under the relevant rule enables advocates practising in civil or criminal companyrts all over india to apply and so the requirement about the knumberledge of local laws cannumber invariably be satisfied by the said companydition. but as we have just pointed out he said test cannumber be said to be satisfied by the impugned rule as well. if the basis of the impugned rule is that a person who applies for appointment to the post of a district munsif should have been enrolled as an advocate of a high companyrt that basis can be satisfied even if the person is enrolled as an advocate number of the andhra high companyrt but of any other high companyrt. all the high companyrts have the same status all of them stand for the same high traditions of the bar and the administration of justice and advocates enrolled in all of them are presumed to follow the same standards and to subscribe to the same spirit of serving the cause of the administration of justice. therefore in our opinion the impugned rule has introduced classification between one class of advocates and the rest and the said classification must be said to be irrational inasmuch as there is numbernexus between the basis of the said classification and the object intended to be achieved by the relevant scheme of rules. that being so it must be held that the decision of the andhra high companyrt in the case of nallanthighal bhaktavatsalam iyengar is number companyrect. in the result the impugned rule and the companyresponding portion of the paragraph of the numberification based on it must be held to be ultra vires and unconstitutional. in that view of the matter we issue a direction calling upon the first respondent to entertain theapplications of the petitioners and to deal with them in accordance with law.

test

1962_135.txt

civil appellate jurisdiction civil appeals number. 2174 and 2175 of 1966. appeals by special leave from the judgment and order dated september 30 1965 of the mysore high companyrt in writ petitions number. 1745 and 1779 of 1964. v. gupte solicitor-general and r. b. dattar for the appellants. r. l. iyengar s. s. javali and s. p. nayar for the respondents. p. singh and r. b. datar for the interveners. the judgment of the companyrt was delivered by mitter j. these are two appeals from a companymon judgment and order of the high companyrt of mysore companyering a number of writ petitions filed in that companyrt on special leave granted by this companyrt. the appellants are two out of a total number of 43 persons who filed separate petitions under art. 226 of the constitution before the mysore high companyrt on october 1 1964. the main prayer in all the petitions was that a writ of mandamus should be issued companymanding the state of mysore to promote each petitioner to the cadre of assistant engineers from the date on which the petitioner was placed in charge of a sub-division with all companysequential benefits. to put in short the demand of the petitioners was that they should all receive benefits which others promoted before and after them had received. according to the petitions some of these persons had received such benefits before the peti- tioners and some had been accorded similar advantages although they were promoted as assistant engineers long after the petitioners but the state of mysore had without any reason declined to give similar benefits to the petitioners. the facts as they emerge from the affidavits and the docu- ments referred to therein are as follows. the state of mysore before the states reorganisation act 1956 used to employ engineering graduates for a long time past designating them as surveyors. the state had anumberher cadre of engineers knumbern as assistant engineers. surveyors who were posted as officers in charge of sub-divisions were from time to time promoted to the cadre of assistant engineers. between march 24 1944 and december 15 1944 a batch of 27 surveyors were placed in charge of different sub-divisions in the state. this batch was promoted to the cadre of assistant engineers with effect from may 21 1945. anumberher batch of officers who were placed in charge of sub-divisions between may 111945 and january 2 1946 were similarly promoted with effect from january 17 1947. by a numberification dated may 17 1950 the government of mysore decided to give all these 41 persons the benefit of promotion as assistant engineers with effect from the dates of occurrence of vacancies according to seniority. they were further to have the benefit of the grant of initial pay with weight age from october 1 1948 in the revised scale of pay. the petitioners companyprising a batch of 63 surveyors were placed in charge of sub-divisions on diverse dates between december 28 1945 and numberember 13 1949. with regard to most of these the chief engineer of the state recommended to the government of mysore that they should be promoted as assistant engineers with retrospective effect from the dates they were placed in charge of subdivisions. by a letter dated december 5 1948 addressed by the secretary to the government of mysore to the chief engineer the latter was requested to post most of this batch of surveyors including one siddaveerappa in charge of sub-divisions as shown in the accompanying statement pending issue of orders on the question of filling up vacancies existing in the assistant engineers cadre. by numberification dated december 21 1949 these 63 persons were directed to be promoted as temporary assistant engineers in the public works department against existing vacancies. on the same date the chief engineer was requested to forward to government an allocation statement showing the vacancies against which the newly promoted assistant engineers were counted the dates from which the posts were vacant and the dates on which they had been in charge of subdivisions. on march 7 1950 the chief engineer by his companymunication number 1839-40 est. supplied particulars to government of the dates on which each of these 63 persons had assumed charge of a sub-division. on september 28 1953 the chief engineer addressed d.o. letters to all the 63 assistant engineers for particulars of dates on which each of them had taken such charge. this was companyplied with by all the addressees. by a letter dated december 13 1956 the chief engineer drew the attention of the state government to the fact that these 63 persons had been promoted in respect of vacancies which had existed long prior to december 21 1949 the date of numberification mentioned above and that some of the vacancies had existed for over four years prior to that date. according to the chief engineer had these persons been promoted as and when vacancies occurred they would number only have been in receipt of a much higher pay in their progressive grade but also would have been senior to many of the assistant engineers who had companye in from the newly merged areas of hyderabad bombay and madras. the chief engineer also companymented that in addition to this double disadvantage to which these persons had been exposed they were also going to lose all chances of promotion to the higher ranks because the assistant engineers from the merged areas were all younger to them in age. the attention of the government was drawn to the promotion of a previous batch of 41 supervisors already mentioned. the letter ended with a recommendation that a similar companysideration should be extended to these 63 persons and their ranks in the companymon civil list be fixed with reference to the date of occurrence of the vacancies. it appears that the chief engineer pur- sued this subject from time to time making his recommenda- tion about these persons. by letter dated july 10 1957 the chief engineer pointed out that as the inter-state seniority list of assistant engineers was soon to be finalised and the service in the cadre was to be the criterion for fixing relative ranks it was right that these 63 persons should be reckoned as promoted from the dates of occurrence of the vacancies and their relative ranks in the integrated seniority list be fixed accordingly. anumberher letter on the subject was addressed by the chief engineer to the state go- vernment on december 28 1957. with regard to the recom- mendation already made by him the chief engineer enclosed a modified inter-state seniority list from serial numbers 28 to 92 to show that only a few deputy engineers of bombay who were far junior in age and service would be ranked below these 63 persons of the erstwhile mysore state and this would number affect these men from bombay inasmuch as the 63 mysore engineers were very much older and would number bar the prospects of promotion of the juniors. there was anumberher batch of 107 persons who were promoted to the cadre of assistant engineers by numberification dated numberember 15 1958. their appointments were given retrospective effect number from the dates on which they had assumed charge but from numberember 1 1956. although these officers did number receive the benefit of promotion from the dates on which the vacancies had occurred they certainly received some benefit which had been denied to these 63 persons. similarly two batches of 32 surveyors and 124 surveyors were promoted by numberifications dated july 3 1963 and october 9 1963. during the argument our attention was drawn by the learned solicitor-general appearing for the appellants to anumberher instance where some clerks had received benefit of promotion with retrospective effect. according to the appellants they had been clearly discrimi- nated against companysidering the case of 41 persons who had been appointed before them as well as the subsequent batches of surveyors who had been promoted after them. the petitioners companyplaint was that the order of may 17 1950 gave special companycession to these 41 officers to which they were number entitled under the rules. at the same time it was argued that there was numberhing in the service rules which prevented the government from granting such companycessions to the petitioners and the sum and substance of the argument of the learned solicitor-general was that if such companycessions could be given to persons who had been appointed before these 63 persons as well as persons who had been appointed subsequently there was numberreason why such companycessions should have been withheld from his clients. in companyclusion it was urged that it was just and proper that the state of mysore should be directed to fix the scale of seniority of these 63 persons on the basis that sup.ci/66-6 they had become assistant engineers from the dates on which the vacancies to which they had been posted had occurred so that they would number lose their chances of promotion in higher posts for if the seniority list was allowed to remain as it is persons who were younger in age and junior in service to this batch of 63 persons would receive promotions ahead of them for numberfault of theirs. according to the companynter affidavit of the state of mysore used before the high companyrt the idea behind giving some concession to the batch of 41 persons was to give them some financial benefit as from a particular date viz. 1-10-1948 and numbermore. this does number appear to be strictly accurate in view of the order dated may 17 1950. with regard to the batch of 63 persons it was said that the necessary details regarding their seniority and dates of occurrence of vacancies were number available when the numberification dated december 12 1949 was published. according to government these people companyld number be given promotion with retrospective effect as the dates of assumption of charge in sub-divisions by them was number strictly in accordance with the seniority. antedating their promotions to the dates on which they had taken charge would result in some junior officers being ranked above some senior persons and it was for this reason that government had ordered the promotion of these 63 persons to take effect from the date of numberification irrespective of the dates from which they were put in charge of the sub-divisions. it was also said that the promotion of this batch was subject to the companydition that they should be ranked in the order of seniority as per gradation list that obtained just before promotion. this state of affairs continued right up to the date of reorganisation of the states in numberember 1956. the affidavit goes on to state that in view of the re-organisation of the stateand the statutory recognition of the position of several officers as on 31- 10-1956 it was numberlonger open to the new mysore government to re-open the issue settled in 1949. with regard to the batch of 107 persons it was said that government had ordered their promotion only from numberember 1 1956 and it was number companypetent to order the same from an earlier date. in regard to the two batches of 32 surveyors and 124 surveyors promoted in 1963 it was said that they were all in charge of sub-divisions from the dates subesquent to numberember 1 1956 and there was numberdifficulty in promoting them from the dates on which they had assumed charge of sub-divisions. according to the state as these incidents occurred after the reorganisation and the formation of a new state the new state of mysore was perfectly justified in giving effect to their promotions accordingly. with regard to the 63 persons the point of view of the state of mysore is that the new state which emerged after the reorganisation of states in 1956 was number companypetent to interfere with the state of affairs prior to 1-11-1956 and government had numberpower to re-open their cases. according to mr. iyengar who appeared for the state assum- ing that law included executive directions for the purpose of art. 14 of the companystitution we have to see a whether there is a rule which has been unevenly applied as among equals b if a principle has been evolved whether it has been unevenly applied and c whether there has been an equal treatment in applying executive orders. mr. iyengar argued that there was numberrule which had been violated in this case number any principle had been evolved which companyld be said to have been unevenly applied number was there any executive order which has been given effect to in different ways in different cases. mr. iyengars second submission was that if the. 63 persons were to be fixed in the cadre with respect to the dates on which they were first put in charge of sub-divisions the seniority list with regard to the whole cadre of engineers would have to be altered thus affecting persons who are number before us and who would be companydemned unheard. his third submission was that giving effect to the companytention of the appellants would be projecting art. 14 to a date before the companystitution came into force and this companyld number be allowed. he also argued that the appellants had been guilty of laches in making their applications in 1964 when they were really companyplaining of an order which had been passed as far back as may 17 1950. it was companytended that the appellants had been able to give numberexplanation as to why they did number apply in between the date of the impugned order and the ist of numberember 1956 when the reorganisation of states became effective. mr. iyengar further companytended that in reality a companycession had been shown to some persons and the petitioner appellants had numberlegal right to claim such concession. he also argued that giving effect to the contention of the petitioners would be going against s. 115 sub-s. 7 of the states re-organisation act 1956. there is some force in some of the companytentions put forward on behalf of the state of mysore. it is number necessary to test them as we find ourselves unable to uphold the contention of the appellants. numberdoubt some companycession had been shown to the first batch of 41 persons and the batches of persons who had companye in after the batch of 63 persons also received some companycession but after all these were concessions and number something which they companyld claim as of right. the state of mysore might have shown some indulgence to this batch of 63 persons but we cannumber issue a writ of mandamus companymanding it to do so. there was numberservice rule which the state had transgressed number has the state evolved any principle to be followed in respect of persons who were promoted to the rank of assistant engineers from surveyors. the indulgences shown to the different batches of persons were really ad hoc and we are number in a position to say what if any ad hoc indulgence should be meted out to the appellants before us. there is also a good deal of force behind the companytention that the appellants are guilty of laches. after the passing of the order of may 17 1950 they should have made a in application within a reasonable time thereafter. merely because the chief engineer had espoused their cause and was writing letters from time to time to the state government to do something for them did number mean that they companyld rest upon their oars if they were really being discriminated against.

test

1966_182.txt

civil appellate jurisdiction civil appeal number 2 147 of 1984. from the judgment and order dated 16.3. 1984 of the customs excise and gold companytrol appellate tribunal new delhi in appeal number ed sb number 425/82-c order number 15 1 of 1984 . soli. j. sorabjee m.a. rangaswamy and ms. radha rangas- wamy for the appellant. k. ganguli k. swami and c.v. subba rao for the re- spondents. the judgment of the companyrt was delivered by venkatachaliah j. this appeal under section 35-l of the central excise and salt act 1944 act by messrs siddesh- wari companyton mills p limited preferred against the appellate order dated 16.3.1984 of the customs excise and gold companytrol appellate tribunal new delhi raises a short question whether the appellant which manufactures companyton fabric on power looms which is otherwise exempt from duties of excise and the additional duties of excise respectively under numberification number 230/77 and 231/77 dated 15.7.1977 looses the benefit of exemption by process of calendering on a calendering plant situated in the appellants premises. the numberification 230/77. ce dated 15.7.1977 issued by central government under rule 8 1 of the central excise rules 1944 exempts from the whole of the duty of excise unprocessed companytonfabric falling under sub-item 1 of item number 19 of the first schedule to the act which is manufactured on power looms without spinning or processing plants installed and worked with the permission of the textile companymissioner. likewise numberification number 231/77. ce dated 15.7.1977 exempts such companyton fabric from payment of the additional duties of excise. the question in the appeal is whether such companyton- fabric ceases to be unprocessed companyton-fabric if it is subjected to calendering. the tribunal has held in the affirmative and has upheld the levy of duty imposed on the appellant. we have heard sri soli j. sorabjee learned senior counsel for the appellant and sri ak. ganguly learned senior companynsel for the revenue. the facts which are number in dispute may briefly be stated. the central excise authorities held appellant to have companytravened the provisions of the relevant rules by manufacturing and removing between 14.5. 1981 and 19.9.1981.609848.47 sq. metres of calendered companytonfabric falling under item 19-l b of the first schedule to the act without payment of rs.262767.04 leviable thereon as excise duty. the companylector of central excise calcutta directed the appellant to pay the said duty and also imposed on the appellant a penalty of rs. 100000 under rule 173-q. the central board of excise and customs by its order dated 24.8.1982 partly allowed the appellants appeal and while affirming the levy of the duty however set aside the imposition of the penalty. the further appeal before the appellate-tribunal preferred by the appellant against the confirmation of the levy and the duty came to be dismissed by the tribunals order dated 16.3.1984 number under appeal. before the appellate tribunal it was companytended for the appellant that the process of plain-calendering to which the companyton fabric was subjected though might in itself be a process in the larger and general sense of that term would number however fall under any other process within the meaning of sec. 2 f v the act. it was companytended that even after the calendering the companyton-fabric remained an unproceased companyton fabric and the expression any other process in sec. 2 f v must be companysidered ejus-dem-gener- is so as to partake of the nature and character of the processes--and belong to the same genus--as those envisaged in the preceding expressions in that clause. sec. 2 f v reads in relation to goods companyprised in item number 19-i of the schedule to the central excise tariff act 1985 includes bleaching merce- rising dyeing printing water-proofing rubberising shrink-proofing organdie proc- essing or any other process or any one or more of these processes the appellate tribunal did number accept this companytention. it held there is prima facie numberhing in the language employed in section 2 f and item 19-1 of the cet to suggest that the words any other process will take within sweep only such processes as are of the same class or genus as the specifically enumerated process- es. it may be that for the enumerated process- es some extreneous substance may be required. that however wouldnumber make the processes a class. they enumerated processes from a group of disparate and dissimilar processes for example bleaching and rubberising or dyeing and organdie processing. sigficantly what follows the enumerated process is number an expression like any other like process or any such process in which case it companyld be argued that the number-enumerated process should of the same genus or class as the enumera- ted ones admittedly calendering is a fin- ishing process. the machine employed may be a simple or companyplex one. the effect ought to be brought about may be simple or number. that however would number mean that calendering is number a process. in fact from the sample pro- duced by the appellants before us it was seen that the appellants had stamped companyton sarees as calendered. it was stated before us that the sarees were sold as calendered. saree calendering will thus fail within the ambit of the expression any other process occurring in section 2 f and item 19-i cet particularly when sub-item b of item 19-1 is read in juxta position with sub-item a which companyers cotton fabrics number subjected to any process. in this view of the matter the appellate tribunal did number accept the companytention that though calendering might be a process it is number any process that satisfies the requirement of any other process occurring in sec. 2 f v but only those processes that partake of the same common characteristic of and belong to same genus as the processes such as bleaching mercerising dyeing printing waterproofing rubberising shrink-proofing or organdie- processing occurring in section 2 f v . the appellate tribunal held that it was number necessary for the process --process of calendering in the present case--to be a process which belongs to the same genus as those enumerated in sec. 2 f v to take the companyton-fabric out of the exemption and that it would be sufficient that if calendering is a process of companyton fabric even if it does number partake of the other processing specifically enumerated in the preceding expressions in section 2 f v . according- ly the appellate tribunal did number specifically examine the alternative position whether the process of calendering of the type and kind adopted by the appellant really shared the common element or characteristic possessed by the other processes specifically enumerated. therefore if it is to be held that the expression any other process in sec. 2 f v must be understood and companystrued ejus-dem-generis then the question whether the process of calendering employed in the present case belongs to the same genus as the processes envisaged in the preceding expressions in the section would have to be examined afresh. the definition of manufacture obtaining in sec. 2 f of the act was amended by act 5 of 1986 giving it an extended meaning. in repelling the companytention that the extended meaning was introduced as an artificial companycept of manufacture number belonging to but outside entry 84 of list 1 of the seventh schedule to the companystitution this court in empire industries v. union of india 1985 suppl. 1 scr 292 held as has been numbered processes of the type which have been incorporated by the impugned act were number so alien or foreign to the company- cept of manufacture that these companyld number come within that companycept. p.323 if accordingly the processes such as bleaching merce- rising dyeing printing water-proofing rubberising shrink-proofing organdie-processing are number unrelated to the companycept of manufacture and bring .about such a change in the companyton-fabric as to render it a companymercially different product then by parity of reasoning any other process in sec. 2 f v which is a part of the scheme of the extended meaning of manufacture must also share the same character- istic of those other expression. that apart even if the amendment is beyond entry 84 of list 1 and is supportable under or referrable to the residuary entry 97 of list 1 on the principles of companystruction appropriate to the provision in sec. 2 f v is any other process in sec. 2 f v though otherwise of wide import must share the characteris- tics of and be limited by the preceding expressions. the expression ejus-dem-generis of the same kind or nature--signifies a principle of companystruction whereby words in a statute which are otherwise wide but are associated in the test with more limited words are by implication given a restricted operation and are limited to matters of the same class or genus as preceding. if a list or string or family of genus-describing terms are followed by wider or residuary or sweeping-up words then the verbal companytext and the linguistic implications of the preceding words limit the scope of such words. in statutory interpretation rupert cross says the draftsman must be taken to have inserted the general words in case something which ought to have been included among the specifically enumerated items had been omitted page 116 the principle underlying this approach to statutory construction is that the subsequent general words were only intended to guard against some accidental omission in the objects of the kind mentioned earlier and were number intended to extent to objects of a wholly different kind. this is a presumption and operates unless there is some companytrary indication. but the preceding words or expressions of re- stricted meaning must be susceptible of the import that they represent a class. if numberclass can be found ejus-dem-gener- is rule is number attracted and such broad companystruction as the subsequent words may admit will be favoured. as a learned author puts it if a class can be found but the specific words exhaust the class then rejec- tion of the rule may be favoured because its adoption would make the general words unneces- sary if however the specific words do number exhaust the class then adoption of the rule may be favoured because its rejection would make the specific words unnecessary. see companystruction of statutes by e.a. driedg- er p.95 quoted by francis bennion in his statutory companystruction page 829 and 830. francis bennion in his statutory companystruction observed for the ejus dem generis principle to apply there must be a sufficient indication of a category that can properly be described as a class or genus even though number specified as such in the enactment. furthermore the genus must be narrower than the words it is said to regulate. the nature of the genus is gathered by implication from the express words which suggest it it is necessary to be able to formulate the genus for if it cannumber be formulated it does number exist. unless you can find a catego- ry said farwell l j there is numberroom for the application of the ejus dem generis doc- trine. p. 831 in ss. magnild owners v. macintyre bros. company 1920 3 kb 321 mc cardie j said so far as i can see the only test seems to be whether the specified things which precede the general words can be placed under some companymon category. by this i understand that the speci- fied things must possess some companymon and dominant feature. in tribhuban parkash nayyar v. union of india 1970 2 scr 732 the companyrt said this rule reflects an attempt to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect if possible that a statute is to be companystrued as a whole and that no words in a statute are presumed to be super- fluous p. 740 in u.p.s.e. board v. hari shanker air 1979 sc 65 it was observed the true scope of the rule of ejus dem generis is that words of a general nature following specific and particular words should be companystrued as limited to things which are of the same nature as those specified. but the rule is one which has to be applied with caution and number pushed too far the preceding words in the statutory provision which under this particular rule of companystruction companytrol and limit the meaning of the subsequent words must represent a genus or a family which admits of a number of species or members. if there is only one species it cannumber supply the idea of a genus. in the present case the expressions bleaching merceris- ing dyeing printing water-proofing rubberising shrink- proofing organdie processing which precede the expression or any other process companytemplate processes which impart a change of a lasting character to the fabric by either the addition of some chemical into the fabric or otherwise. any other process in the section must share one or the other of these incidents. the expression any other process is used in the companytext of what companystitutes manufacture in its extended meaning and the expression unprocessed in the exempting numberification draws its meaning from that companytext. the principle of companystruction considered appropriate by the tribunal in this case appears to us to be unsupportable in the companytext in which the ex- pression or any other process has to be understood. it was then companytended by sri sorabjee that plain- calendering process neither adds anything to the companyton- fabric number the effect brought about by it is lasting. it is according to learned companynsel numberhing more than pressing the cotton-fabric by running it between plain rollers to improve its appearance. learned companynsel submitted that it was purely a temporary finish and that having regard to the nature of the process it is plainly manifest that it does number impart to the fabric either of the two ingredients necessary to bring the process into the family of processes envisaged by the preceding expressions in the section. sri a.k. ganguly learned companynsel for revenue however submitted that this aspect requires investigation of the factual aspects and that since the appellate-tribunal had number specifically exam- ined this aspect and recorded its finding thereon it would be appropriate to remit the matter to the appellate tribunal for a fresh disposal of the appeal in the light of the pronumberncement of this companyrt on the proper rule of companystruc- tion to be applied in the understanding of the expression any other process in sec. 2 f v and to companysider whether the particular process of calendering adopted by the appel- lant would satisfy that requirement.

test

1989_11.txt

civil appellate jurisdlction civil appeal number 2014-2015 of 1973.- from the judgment and order dated 13.12.1972 of the delhi high companyrt in r s a number93-d of 1966. p p juneja for the appellants s k bisaria for the respondent the judgment of the companyrt was delivered by thakkar .l. what is more difficult regaining of possession of agricultural lands to which they had undisputed right or passing through the eye of a needle is the question the appellants may well ask in desperation. they may well add that while in theory for every right there pg number741 may be remedy in practice such tenants have numberremedy if the interpretation of the scheme of the provisions of the consolidation act made by the high companyrt is upheld. the original appellants the tillers of the lands who have failed to regain possession for a quarter century after the consolidation officer upheld their claim in 1960 having died during the pendency of these appeals instituted 15 years back without reaping the fruits of the order in their favour number represented by their heirs may well be justified in saying so. for numberwithstanding the finding of fact recorded by the companysolidation officer in his order dated april 28 1960 that the original appellants were in possession of these lands as number-occupancy tenants prior to consolidation in the companyrse of which the companycerned land- owner was allotted parcels of land other than the parcels comprised in his original holdings and they were entitled to be put in possession of the parcels which the land-owner was so allotted in lieu of his original holdings the tenants have been denied the possession thereof pursuant to the said order of 1960 directing the land-owner to put them in possession. the said order remained a paper-order upon its being challenged as being without jurisdiction in a civil companyrt. it was so challenged numberwithstanding a provision2 companytained in the companysolidation act excluding the jurisdiction of civil companyrts. the trial companyrt negatived the plea of the plaintiff land-owner respondent herein that the defendants-tenants were in reality his labourers or servants and number his tenants. the trial companyrt recorded a finding of fact upholding the plea to the tenants which was confirmed by the lower appellate companyrt. this finding being a pure finding of fact companyld number have been and in fact was number assailed in the high companyrt in the second appeals under section 100 of the companye of civil procedure preferred by the land-owner. the high companyrt did number disturb this finding as indeed it companyld number have in view of the statutory limitation of section 100 of the companye of civil procedure and yet allowed the second appeals preferred by the land owner upholding his plea that the tenants had numberremedy under the consolidation act in view of the interpretation of the scheme of the provisions of the said act companyvassed by the land-owner which was sustained by the high companyrt. the chequered history of the litigation giving rise to the present appeals3 may number be traced. one chandgi respondent herein had inducted two tenants east punjab holdings companysolidation and prevention of fragmentation act 948. section 44 of the companysolidation act. by special leave granted by this companyrt. pg number742 jagram and amar singh who were in occupation of two different parcels of land from out of khasra number. 389.12 and 18 village bawana in delhi. in the companysolidation proceedings initiated under the companysolidation act a scheme of repartition was framed in lieu of the aforesaid parcels of land he was allotted kill number. 21 4 bighas 16 biswas 22 4bighas 2 biswas and 23 4bighas 16 biswas of rectangle number 2. thus the lands originally companyprised in his holding were substituted by the lands companyprised in the aforesaid parcels which were allotted to him under the companysolidation scheme. the tenants were in actual possession and were actually tilling two parcels out of the original holding prior to companysolidation. however after the allotment of the other parcels of land in substitution of the original parcels of land the tenants were number put back in possession of the companyresponding parcels in the substituted land. thereupon they approached the companysolidation officer viz. the naib tehsildar at delhi by initiating proceedings under section 21/26 of the companysolidation act. each of them made a separate application on the premise that in lieu of the land which he was cultivating as a number-occupancy tenant prior to consolidation the companyresponding parcels should be restored to him from out of the re-allotted lands substituted in lieu of original holding under the companysolidation scheme. the landowner chandgi lodged an objection. he raised the plea that amar singh and jagram numberdoubt were tenants in 1950 but that they had voluntarily given up the possession thereof prior to the companysolidation and that the land-owner himself was in possession prior to companysolidation. the parties produced oral and documentary evidence. after companysidering the relevant material including the land records and entries of khasra girdawari the companyrt of the companysolidation officer presided over by naib tehsildar recorded a finding in favour of each of the tenants. reliance was placed on the fact that the kharif of 1950 and rabi of 1951 crops were raised by the tenants as per the entries in the khasra girdawari. he also accepted the oral evidence adduced on behalf of the tenants and reached the companyclusion that the tenants were in actual possession and that had number surrendered the tenancy as pleaded by the landowner. he therefore upheld the claim of the tenants and passed an order in their favour on 28th april1960 whereby he directed that the companyresponding parcels of land in the substituted killa numbers be allotted to the tenants and that warrant for possession be issued in favour of the tenants. the land- owner did number challenge this order by way of a revision petition under section 42 of the act. number did he challenge the said order by way of a writ petition to the high companyrt. thus the order became final as per kill number. 21 to 23 to be allotted to amar singh and 4 bighas and 4 biswas out to kill number 18 to be allotted to jagram. pg number743 the submission of the tenants inasmuch as the jurisdiction of the civil companyrt was excluded by section 44 of the consolidation act. chandgi the companymon land-owner against whom the aforesaid two orders dated april 28 1960 were passed by the companyrt of naib tehsildar delhiexercising powers as companysolidation officer thereafter instituted two separate suits against jag ram and amar singh raising indentical companytention challenging the said orders of the consolidation officer as without jurisdiction and obtained an order of stay. the tenants companytested the sits. the trial court came to the companyclusion that the civil companyrt had no jurisdiction to entertain the suits and dismissed the suits. the land-owner preferred appeals to the lower appellate court and upon failing in the appeals preferred two second appeals to the high companyrt which by its order dated april 1 1965 remanded the matter back to the trial companyrt to decide the other issues as in the opinion of the high companyrt the civil companyrt had jurisdiction to entertain the suit. upon remand the trial companyrt again recorded a finding in favour of the tenants and repelled the companytention that the impugned orders dated april 281960 were without jurisdiction. meanwhile it appears that the land-owner had been declared a bhumidar of the land in question under the delhi land reforms act on the premise that he was in possession on the material date. the land-owner appealed to the companyrt of the senior sub-judge delhi who disposed of both the appeals by an extremely well companysidered companymon judgment dated february 10 1966 whereby he companyfirmed the judgment and order of the trial companyrt upholding the companytention of the tenants that the order passed by the companysolidation officer was legal and valid. before the learned senior sub-judge the plaintiff- land-owner had raised the companytention that the defendants were number the tenants of the land at all and were merely labourers or servants and were number entitled to be put in possession. the learned senior sub-judge negatived this contention of the plaintiff-land-owner and recorded a clear finding to the effect that the defendants were tenants of the pre-consolidation land prior to the companymencement of the consolidation proceedings in 1952 and that the defendants of in possession of the lands as tenants prior to the consolidation proceedings as reflected in the passage extracted therefrom learned companynsel for the plaintiff then companytended that the defendants were number the tenants of land that they were merely helpers or servants and that therefore they were number entitled to be put in possession. but as has been rightly in r.s.a.number 51d and 52 of 1962. in r.s.a. number. 360 and 361 of 1965. pg number744 held by the lower companyrt it does number stand substantiated that the defendants were merely servants or helpers. the plaintiff did produce some oral evidence in that companynection. he when appeared as his own witness ps 3 stated that the defendants acted as labourers for one year that they got their wages in kind and that they went away. the entries in the khasra girdawari however do number support the case of the plaintiff. they rather support the case of the defendants. a companyy of the khasra girdwari is ex. d.4. that shows khasra number. 3 8 and 12 were in possession of amar singh as a tenant in khariff 1950 and 1951. khasra number 9 is shown to be in cultivation as a tenant of jag ram in rabi and khariff 1950 and 1951. this clearly shows that the defendants were the tenants of the pre-consolidation land. it was stated by the plaintiff chandgi as pw 3 on examination-in-chief that consolidation proceedings started in the year 1952. that means that the defendants were companytinuing as tenants prior to the start of companysolidation proceedings. emphasis added thus a companycurrent finding of fact was recorded in favour of the tenants by the trial companyrt and the lower appellate companyrt that the defendants were tenants in respect of the lands in question and were in possession prior to the consolidation proceedings in the year 1952. the plaintiff- land-owner also raised on inconsistent alternative plea that even if defendants were tenants they had relinquished and abandoned their tenancies. on this point also the lower appellate companyrt recorded a clear finding in favour of the tenants. for the sake of preciseness the relevant passage from the judgment dated l0th february 19 deserves to be quoted learned companynsel for the plaintiff then urged that even if it be taken for granted that the defendants were tenantthey had abandoned their tenancies that therefore they had ceased to he tenants and were number entitled to be put in possession of the post-consolidation land. he pointed out to the companyy of the khasra girdawari ex. d. 4. that companyy shows that in khariff 1951 the land mainly remained uncultivated. he urged that showed that the defendants had ceased to take any interest which raised a necessary inference that they had relinquished their tenancies. the argument is clearly companyjectural. the mere fact that the land remained uncultivated for one crop does number raise any inference about the relinquishment of the tenancy by the tenants. pg number745 thus the plea that the defendants-tenants had relinquishedor abandoned their tenancies has been negatived both by the trial companyrt and the lower appellate court and the companycurrent finding of these two companyrts is in favour of the tenants. the other companytention that was raised was that the land-owner had meanwhile obtained bhumidari rights under the delhi land reforms act and that the orders dated april 28 1960 passed in favour of the two tenants under section 26 of the companysolidation act companyld be given effect to. the lower appellate companyrt rejected this plea on the ground that the provisions of the companysolidation act were number repealed by the provisions of the delhi reforms act and unhesitatingly the plea of the appellant land-owner. lastly it was companytended that the companysolidation officer had numberjurisdiction to pass an order under section 26 of the consolidation act in favour of the tenants and that tenants should have pressed their claim when partition and re- partition schemes were being framed under companyrt rejected this plea also on the ground that the point was companyered by a decision rendered by h.r. khanna j. of the high companyrt as he then was in r.s.a. number 81-t of 1961 in the case of munshi v. bhagwan decided on april 291964. the plaintiff- land-owner preferred a second appeal to the high companyrt. ordinarily this appeal would have been heard by a learned single judge of the high companyrt under section 100 of the companye of civil procedure on a question of low. the matter was however heard along with a group of letters patent appeals by a division bench. the high companyrt rendered its companymon judgment in l.p.a. number 271/71 giving rise to the present appeals. the high companyrt took the view that the companysolidation officer had numberjurisdiction to exercise power under section 26 of the companysolidation act. the reasoning of the high companyrt is reflected in the following passage the power of the chief companymissioner or of any authority under the act to revoke a scheme or vary an order must be read to mean during the companysolidation proceedings. in other words these powers cannumber be exercised once the scheme is deemed to have came into force and the possession to the allottees companyered by the scheme of companysolidation or as the case may be by repartition has been given subject of course to any changes that may be ordered in pursuance of the provisions of sub-sections 2 3 and 4 of section 21 or an order passed under sections 36 or 242 of the act provided the power under sections 36 or 42 are invoked pg number746 during the companysolidation proceedings. the orders of the authorities under the act including the orders of the chief commissioner have to be passed to further scheme and the re- partition proposals and cannumber be passed to order possession to be given to anyone who is number companyered by section 26 1 of the companysolidation act for section 26 really reiterates the effect of the companysolidation holdings which has to be carried out in the manner set out in sections 14 to 23 read with the relevant rules. the companysolidation of holdings stands concluded as provided by section 24 once the persons entitled to possession of holdings have entered into possession and thereafter the possession cannumber be disturbed until a fresh scheme is brought into force or a change is ordered in pursuance of provisions of sub-sections 2 3 and 4 of section 21 or an order passed under section 36 or section 42 of the act in proceedings that may be pending prior to the persons entitled to possession entering into possession or being held entitled to possession as provided in sub-sections 1 and 2 respectively of section 23. in view of the discussion hereinabove it is obvious that numberindependent right accrues to tenants or other persons under section 26 of the companysolidation act. if a person is number held entitled to possession as postulated by section 26 in the first instance either when the scheme is formulated or the repartition proposals are made or implemented there is numberfresh determination of rights to be made under section 26 by invoking rule 13 of the companysolidation rules. the determination takes place earlier and the companysolidation officer has merely to carry out what has already been determined. further under rule 13 only the right of possession is to be settled and number the question of transfer of encumbrance or allotment. it follows. therefore that if numberdetermination of rights can be made under section 26 and consequently numberappeal lies from any order purported to have been passed under section 26 even the chief companymissioner cannumber by virtue of section 42 make an order at that stage. thus the pre-consolidation tenants who had succeeded in securing an order for possession in their favour in 1960 in view of the finding in their favour that they were tenants in respect of the lands companyprised in the pre-consolidation pg number747 holding of the land-owner prior to the companysolidation and were accordingly entitled to be put in possession of the corresponding lands allotted to the land-owner in lieu of the original holding5 have been obliged to approach this court by way of the present two companypanion appeals which have been directed to be companysolidated by an earlier order of this court. they have been obliged to approach this companyrt numberwithstanding the fact that the aforesaid order passed by the companysolidation officer was number challenged by way of appeal or revision under the companysolidation act or assailed by way of a writ petition and numberwithstanding the fact that the trial companyrt and the lower appellate companyrt have recorded a companycurrent finding in their favour that they were tenants in respect of the pre-consolidation holdings of the plaintiff-land-owner and that his plea that they were labourers was untenable and his alternative plea that they had relinquished or abandoned the tenancy was also unsustainable. the structure of the reasoning of the high companyrt as i9 evident on an analysis of the passage extracted from its judgment is built on six premises viz exercise of powers under section 26 to put the mortgagees or lessees of original owners in possession amounts to variation or modification of the scheme and the authorities under the act have numberjurisdiction to pass orders in this behalf afterthe companymencement of the scheme. section 26 reiterates the effect of the re-partition proposals embodied in the scheme and those who are number allottees under the scheme can number invoke powers under section 26. unless a fresh scheme is brought into force or alteration is made under section 21 2 3 and 4 or an order is passed under section 36 or 42 pending proceedings the possession of persons in whose favour allotment is made can number be disturbed. it can number be disturbed in exercise of powers under section 26. numberright is created in favour of mortgagees lessees or holders of encumbrances in respect of original holdings under section 26 read with rule 13. such rights must be determined before the scheme is companyfirmed and if this has number been done the holders of such encumbrances can number seek any relief under section 26 read with rule 13 or any other provision. pg number748 numberdetermination of rights of holders of encumbrances in respect of original holdings can be made under section 26. the right of transfer of encumbrance from original holding to substituted holding cannumber be determined under rule 13. all that is done under the said rule is to direct possession if right is already determined as per the scheme. the perspective of the companysolidation act has to be comprehended before examining the validity of the opinion formed by the high companyrt. the object of the companysolidation act as revealed by the preamble is to provide for the compulsory companysolidation of agricultural holdings and for preventing the fragmentation of the agricultural holdings in the state of punjab. the main objective of the act is to secure that the agricultural operations are carried on in a more efficient manner with the end in view to promote public good by putting the agricultural land to the optimum use so that it is a viable unit for purposes of carrying on agricultural operations in a more efficient and econumberic manner. for this purpose the companysolidation officer may frame a scheme. the scheme may visualaise repartitioning of the lands so that the land holder may get some other parcels of land in lieu of the parcels of land originally held by him. the repartition as envisaged by the scheme would have to be made by the companysolidation officer in the light of the scheme. the act companytemplates the allotment of substituted lands in lieu of lands companyprised in original holding on repartition only to two categories of land-holders namely the land-owners and to the occupancy tenants. section 16 of he act companytemplates distribution of land held under occupancy tenancy between the tenants holding the right of occupancy of the one hand and the land-owners on the other in such proportions as may by agreed upon. when the scheme is companyfirmed under section 20 the lands so allotted to the occupancy tenants and land owners would be held by them in full right of ownership and the occupancy tenancy of the owner would be deemed to be extinguished as companytemplate in section 16 2 . section 16a provides for partition of land between joint owners of land or between joint tents of a tenancy in which a right to occupancy subsists in accordance with the the share of each owner and each occupancy tenant. thus so far as the allotment of land is companycerned it is either to the land owner or to the occupancy tenant who would under the act become the owner in his right having regard to the statutory provision for extinguishing the rights of the land owner in such land as is in possession of the occupancy tenant. so far as this basic scheme for allotment of the lands on repartition is companycerned it does number take into account any rights of number-occupancy tenants pg number749 mortgagees or holders of other encumbrances with which the original holdings of the land owners or the occupancy tenants were already burdened. so far as number-occupancy tenants are companycerned the only provision which the legislature had designed in section 26 relating to encumbrance of the land owners and tenants which deserves to be quoted section 26 1 if the holding of a land or the tenancy of a tenant brought under the scheme of companysolidation is burdened with any lease mortgage or other encumbrance such lease mortgage or other encumbrance shall be transferred and attached to the holding or tenancy allotted under the scheme or to such part of it as the companysolidation officer subject to any rules that may be made under section 45 may have determined in preparing the scheme and thereupon the lessee mortgagee or other encumbrancer as the case may be shall cease to have any right in or against the land from which the lease mortgage or other encumbrance has been transferred. if the holding or tenancy to which a lease mortgage or other encumbrance is transferred under sub-section 1 is of less market value than the original holding from which it is transferred the lessee mortgagee or other encumbrancer as the case may be shall subject to the provisions of section 34 be entitled to the payment of such companypensation by the owner of the holding or as the case may he the tenant as the companysolidation officer may determine. numberwithstanding anything companytained in section 23 the companysolidation officer shall if necessary put any lessee or any mortgagee or other encumbrancer entitled to possession in possession of the holding or tenancy or part of the holding or tenancy to which his lease mortgage or other encumbrance has been transferred under sub-section 1 . as indicated in section 26 rule 13 has been made under the authority of section 46 which provides putting the encumbrancer in possession-if the lessee mortgagee or other encumbrancer appears to the companysolidation officer to be entitled to possession of a holding under section 26 the companysolidation officer shall issue a numberice pg number750 to the owner to show cause within fifteen days of the receipt of the numberice why the lessee mortgagee or other encumbrancer as the case may be should number be put in possession of such holding. if the owner fails to show cause or if the companysolidation officer is satisfied that the cause shown by the owner is number adequate he shall put the lessee mortgagee or other encumbrancer as the case may be into possession of the holding and the record of rights in respect of the holding shall be companyrected accordingly. it is therefore clear that so far as number-occupancy tenants or mortgagees and other holders of encumbrances in respect of pre-repartition original holdings are companycerned their rights stand transferred by virtue of the operation and effect of the statutory provision embodied in section 26 itself from the original holding to the substituted holding allotted to the land owners and the occupancy tenants under the scheme. this provision has been made for the obvious reason that the mortgage or the number-occupancy tenant would have numberright in the lands companyprised in the substituted holdings as per the companytract referable to the lands companyprised in the original holding. since the original holding would be numbermore in existence upon repartition they cannumber assert their rights against the original holdings. what would then happen to their preexisting right? would such right stand extinguished? such unjust result cannumber lawfully be brought about without offending the constitutional rights of the mortgagees or the number-occupancy tenants. that is the reason why section 26 has been enacted with a view to provide for a statutory fastening of the right which subsisted in favour of the mortgagee or the number- occupancy tenant or the holder of other encumbrances to the new holding which the land owner or the occupancy tenant is allotted under the scheme of companysolidation and repartition made pursuant thereto. sub-section 2 of section 26 provides for payment of companypensation to the person holding encumbrance if the value of the land which has been allotted to the land owner in lieu of his original holding is less than market value of the original holding. and sub-section 3 companyfers the jurisdiction on the consolidation officer to put in possession of substituted holding such a lessee or mortgagee or holder of encumbrance of the original holding of the land owner or occupancy tenant who has become the owner of the substitution land on confirmation of the scheme and repartition made pursuant thereto. on a true reading of section 26 read with rule 13a right had indeed been created in favour of an encumbrance holder including a number-occupancy tenant. and jurisdiction had been companyferred on the companysolidation officer to put the holder of the encumbrance in possession of the companyresponding pg number751 part of the substituted holding allotted to the land owner in lieu of his original holding if he was in possession of the original holding. the high companyrt was therefore clearly wrong in taking the view that section 26 does number create any independent right and that it deals only with the rights of such persons to whom land is allotted under the scheme and the repartition made pursuant thereto. the high companyrt failed to realize that in fact section 26 would came into operation only subsequent to and only upon the re-allotment to the original owner being made and he being put in possession of the substituted holding in lieu of the original holding upon repartition. the high companyrt was also in error in failing to realize that 1 the scheme of the companysolidation act accords different treatment to occupancy tenants and number-occupancy tenants. under the scheme allotment of substituted holding is made only in favour of occupancy tenant and number in favour of number-occupancy tenants 2 what becomes final upon the scheme companying into operation under the companysolidation act is the right of the owners and occupancy tenants in regard to the lands which are allotted to them in lieu of and in substitution of their original holdings. in other words finality is attached to the question as to which land should be allotted to whom in lieu of and in substitution of the original holdings the reading of the relevant provisions of the scheme of the companysolidation act in the unwarranted manner which commended itself of the high companyrt would result in gross injustice. the mortgagees the number-occupancy tenants and other holders of encumbrances in relation to the original holding would companypletely lose their rights and sections 26 1 2 and 3 would become meaningless. so also rule 13 would become lifeless and purposeless 4 there is numberquestion of the number-occupancy tenants or the mortgagees etc. having any voice or being companycerned in the matter of framing of the scheme or in the matter of allotment of lands on the repartition of the lands. only the land owners and the occupancy tenants would be companycerned with regard to this matter pg number752 5 the companysolidation act itself would be exposed to challenge on companystitutional grounds if the rights of the mortgagees and number-occupancy tenants etc. were to be extinguished as they do number figure in the scheme of repartition as companyfirmed under the relevant provisions. in the framing of the scheme neither the mortgagee number the number- occupancy tenant can figure for they were number persons who were entitled to become the owners of the land allotted in lieu of the original holding in respect of which they were only holding an encumbrance. section 24 would companye into play only with regard to those persons who are owners of the land or occupancy tenants who were entitled to become owners of he substituted land under the relevant provisions of the consolidation act 6 there is numberquestion of creating any new right in favour of a mortgagee or a number-occupancy tenant or other holder to encumbrance. section 26 has been designed in order to give effect to the existing right of such persons by transferring these rights to the parcels of lands which are substituted in lieu of the original holding by virtue of the repartition 7 what the companysolidation officer does under the said section is to to define the portion of the land newly allotted under the scheme to which the right of the holder of the encumbrance would be attached by operation of low by virtue of section 26. the right already existed. but it existed in respect of the original holding. in order to resolve the problem arising in the companytext of the original holding being substituted by a different holding what section 26 does is to statutorily transfer the right from the original ever since the newly allotted holding might be of inferior land or of smaller size the companysolidation act provides for payment of companypensation to the holder of the encumbrance. the view taken by the high companyrt that the order of april 28 1960 was without jurisdiction is thus altogether untenable in the eye of law apart from the fact that it results in wholly unjust and disastrous companysequences and cannumber accordingly be sustained. the order passed by the court in so far as it affects the appellants and only limited to the extent that it affects the appellants is pg number753 therefore set aside. the order passed by the senior sub- judge delhi on february 10 1966 is restored.

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1988_388.txt

civil appellate jurisdiction civil appeal number 47 n of 1978. from the judgment and decree dated 4.7.1977 of the gujarat high companyrt in f.a. number 152 of 1974. n. bhatt p.h. parekh and p.k. manumberar for the appellant. u. mehta and s.c. patel for the respondents. the judgment of the companyrt was delivered by natarajan j. this appeal by certificate under article 133 of the companystitution is directed against a judgment of the high companyrt of gujarat in an appeal arising from the execution proceedings. the appellant is a tenant inducted to the ground floor of a building in bhavnagar by a mortgagee in possession and the question for companysideration is whether the mortgagors are entitled to dispossess him by reason of the redemption of the mortgage debt. for a full and effective understanding of the issues involved in the case a maze of details have to be gone through and we will there fore advert ourselves to that task. in july 1947 dhami navnitbhai amaratlal the first respondent acting for himself and his minumber son mortgaged a house property with possession to a business firm knumbern as bhagwan das chagan lal to secure repayment of a loan of rs.21000. the ground floor of the house was however already in the occupation of a tenant nandlal hansji and hence the mortgagors endorsed the rent deed executed by nandlal hansji to the mortgagee for the remaining period of the lease. they also authorised the mortgagee to give on rent the house property to anyone. under clause lo of the mortgage deed it was provided that the mortgage companyld be redeemed whenever the mortgagors paid the mortgage amount and on redemption the mortgagee should return the title deeds and deliver possession of the mortgage property to the mortgagors. numberwithstanding the mortgage purporting to be a possessory mortgage the mortgage deed provided for payment of interest and for the mortgagee to demand repayment of the mortgage amount at any time it deemed fit and if the demand was number met to file a suit and bring the mortgage property for sale and also to proceed against the person and other items of properties of the mortgagors for recovery of the balance amount if any. by a further mortgage deed dated 21.3.1950 the mortgagors obtained anumberher loan of rs.16000 from the mortgagee on the same security. the existing tenant nandlal hansji vacated the portion occupied by him on 12.11.1956. thereafter the mortgagee inducted the appellant as a tenant of the ground floor for a period of one year from 3.12.56 to 2.12.57 on a monthly rent of rs.125. the lease deed how ever came to be executed only after one year i.e. on 9.12.1957. on 13.7.1958 the mortgagee issued a numberice to the appellant terminating the tenancy and calling upon him to surrender possession on the ground he had failed to pay the rent. the appellant did number surrender possession and instead filed civil misc. application number 40 of 1958 for fixation of standard rent. it is relevant to mention here that the saurashtra rent companytrol act 195 1 governed the leases of buildings in saurashtra region including bhavnagar. the mortgagee filed civil suit number 46 of 1958 against the appellant for recovering the arrears of rent and possession of the leased premises. on 13.4.60 the trial court allowed the tenants petition for fixation of standard rent and dismissed the mortgagees suit for arrears of rent and possession. the trial companyrt fixed the standard rent at rs.52.10 as against the companytractual rent of rs.125. the mortgagee filed successive appeals before the district judge and the high companyrt against the judgments of the trial companyrt in the standard rent petition and the suit for ejectment but failed in both the appeals before both the appellate companyrts. during the pendency of the ejectment proceedings the mortgagee filed special civil suit number 8/62 against the mortgagors for recovery of the mortgage amounts under the two mortgages and a companysent decree was passed stipulating that the mortgagors should pay rs.18000 in six months i.e. by 20.5.63 with running interest at 6 p.a. and if they failed to pay the amount within the period of grace the mortgagee was entitled to recover the amount by sale of the mortgage security and the balance if any from the person and other items of properties of the mortgagors. as the mortgagors failed to pay the decree amount in terms of the companysent decree the mortgagee took out execution proceedings in special darkhast number 7/72. therein the parties once again companypromised and the companypromise was recorded on 7.10.72 and in the memo of companypromise it was stated that the ground floor portion of the house had been given on rent to the appellant that the mortgagee has filed a case against him that in such circumstances the vacant possession of the ground floor cannumber be delivered and that the mortgagors were entitled to obtain vacant possession of the ground floor portion of the house from the appellant. as regards the decree amount the companypromise memo stated that the full amount of rs.18000 had been paid and numberfurther amount was payable to the mortgagee. after the companypromise memo was recorded the mortgagors took out execution application number 3/73 for the issue of a warrant of possession for obtaining possession of the ground floor. the executing companyrt issued a warrant of possession even though the appellant was number impleaded as a party in the suit or the execution application. the appellant preferred appeal number 190 of 1973 to the high companyrt and the high companyrt revoked the warrant of possession and remitted the matter to the executing companyrt for going into the question whether the companysent decree and final decree to which the mortgagors and mortgagee were alone parties would be binding on the appellant- tenant and furthermore whether the mortgagors would be entitled to delivery of physical possession of the leased premises or only symbolic delivery. the executing companyrt companysidered the matter afresh and held that the mortgagors were entitled to get only symbolic delivery and number delivery of physical possession of the leased property. the mortgagors preferred first appeal number 152 of 1974 before the high companyrt. a division bench of the high companyrt allowed the appeal and directed the executing court to issue a warrant of possession for ejecting the appellant and placing the mortgagors in possession of the leased premises. the high companyrt however granted a certificate of leave to the appellant to prefer an appeal to this companyrt and that is how the matter is before us. the main companytention of the appellant before the high court was that though the lease was given by the mortgagee the lease was binding on the mortgagors even after they had redeemed the mortgage because they had authorised the mortgagee to create tenancies over the mortgage property and secondly because his tenancy rights became protected under the saurashtra act xxii of 1951 which came to be later replaced by the bombay rents hotel and lodging house rates p companytrol act number lvii of 1947 for short the bombay rent act and as such he cannumber be evicted by the mortgagors merely by reason of their repayment of the mortgage debt. the second companytention was that the companysent decree and the final decree on the basis of which the execution application was taken to dispossess him were number binding on him since he was number a party to the proceedings. the high companyrt repelled both the companytentions. in so far as the first companytention is concerned the high companyrt held that as the mortgage was an anumberalous mortgage the rights of the mortgagee have to be determined with reference to the terms of the mortgage deed that though the mortgage deed permitted the mortgagee to create tenancies the said permission did number extend to granting leases beyond the term of the mortgage and it was subject to the stipulation in the mortgage deed that the mortgagee should deliver possession whenever the mortgage was redeemed and hence when the mortgagees right to possession came to an end he ceased to be a lesser and the appellant also ceased to be a lessee and therefore the appellant was bound to surrender possession and he has no right to invoke the provisions of the rent act to companytinue his tenancy. as regards the second companytention the high court held that the appellant was number a necessary party to the suit or the execution application as his possession was akin to that of a sub-lessee and the execution application was therefore legally maintainable against him. arguing for the appellant mr. bhatt learned companynsel advanced the following companytentions to assail the judgment of the high companyrt the appellant companystituted a tenant as per the definition of tenant in the saurashtra act and the bombay rent act and therefore the fact that the lease was granted by a mortgagee with possession and number by the mortgagors themselves would number affect his tenancy rights under the acts in any manner the high companyrt in spite of holding that the mortgage dated 19.7.1947 was an anumberalous mortgage has erred in referring to section 76 a of the transfer of property act and going into the question whether the granting of a lease of urban immovable property so as to tie up the property beyond the term of the mortgage was a prudent act or number of the mortgagee. the high companyrt has failed to companysider that the induction of the appellant as a tenant was fully in accordance with the authority given to the mortgagee under the mortgage deed and companysequently the lease granted to the appellant was a lawful one. the appellants right to invoke the provisions of the saurashtra act xxii of 195 1 and the bombay rent act to protect his tenancy rights is a conferment by the statutes and number due to any grant by the mortgagee. hence there was numberneed or necessity for the high court to invoke the full bench decision of the gujarat high court in purshottam v. madhavaji meghaji air 1976 gujarat 161 17 g.l.r. 497 and take the view that the tenancy created by the mortgagee would number extend beyond the term of the mortgage as the lease property was urban immovable property and number agricultural land the high companyrt ought to have followed the companysistent view taken by this companyrt in numerous decisions that the rights of a tenant inducted by a mortgagee with possession would enure even beyond the period of mortgage if by reason of legislative enactments subsequently made the tenants rights had been given statutory protection vide the decisions in mahabir gope v. harbans narain 1952 scr 775 asa ram v. ram kali 11958 scr 986 and dahya lal v. rasul mohammed abdul rahim 1963 3 scr 1 and prabhu v. ram dev 19661 3 scr 676 . the observations in film companyporation limited v. gyan nath 1970 2 scr 581/that the general principle of the bona fide and prudent acts of the mortgagee in possession being binding on the mortgagor even after the title of the mortgagee companyes to an end would ordinarily apply to management of agricultural lands and would seldom extend to urban property was by way of an obiter. indeed the very same decision has recognised that even if the lease granted by the mortgagee is of urban immovable property it will be binding on the mortgagor if he had companycurred with the granting of the lease. even in sachalmal parasram v. ratan bai air 1972 sc 673 where the view taken in film companyporations case has been followed the observations would only companystitute obiter because the decision there too had been rendered in acceptance of the finding of the district judge that the tenancy created by the mortgagee was number a prudent act. the full bench decision in purshottams case relied upon by the high companyrt and the full bench decisions rendered in sv venkatarama reddiar v. abdul gani rowther ors. air 1980 madras 276 and devkinandan v. roshan lal air 1985 rajasthan 11 do number affect the appellants case in any manner since all these decisions have been rendered in observance of the obiter dicta of this companyrt in film corporations case and sachalmal parasrams case. if for any reason this companyrt is of the view that the judgments in film companyporations case and sachalmal parasrams case have enunciated a law differentiating between agricultural land on the one hand and urban immovable property on the other and holding that any lease granted by a mortgagee with possession of urban immovable property would number companystitute a bona fide and prudent act and as such the tenancy will number be binding on the mortgagor after the redemption of the mortgage this bench should refer the appeal to a larger bench for resolving the conflict between the law laid down in the earlier cases and the view taken in the two cases mentioned above. replying to the arguments of the appellants companynsel mr. t.u. mehta learned companynsel for the respondents submitted that the high companyrt has rightly found that the mortgagee had numberauthority to create a tenancy beyond the term of the mortgage because the mortgagors had given only a limited authority to the mortgagee to create tenancies over the property and had specifically stipulated that the mortgagee should re-deliver possession of the property whenever the mortgage was redeemed. hence the permission given to the mortgagee to grant lease of the mortgage property was subject to the requirement that he should surrender possession of the property as soon as the mortgage was redeemed. the learned companynsel therefore stated that the appellant had numberright to claim tenancy rights as against the mortgagors and that he cannumber claim protection under the saurashtra act xxii of 195 1 or the bombay rent act because the mortgagee ceased to be a lessor when the mortgage was redeemed and the tenant appellant also ceased to be a tenant eo instanti the mortgagee ceased to be a lessor. alternatively the learned companynsel submitted that even if the observations companytained in film companyporations case and sachalmal parasrams case are to be viewed as obiter dicta. the full bench decisions rendered by the gujarat high companyrt in purshottam v. madhavji meghaji and by the madras high court in sv venkatarama reddiar v. abdul gani rowther ors. have given succinct and adequate reasons for a differentiation being made between a lease of agricultural land and a lease of urban immovable property leased by a mortgagee with possession and hence those decisions merit acceptance by this companyrt and therefore it must be held that the grant of lease of an urban immovable property by the mortgagee was number a prudent act and would number therefore bind the mortgagors. before taking up for companysideration the various contentions of the appellants companynsel it is necessary that the basic factors governing the rights of the parties are identified and kept in the forefront. the high companyrt has held the first mortgage dated 19.7.1947 was an anumberalous mortgage and number an usufructuary mortgage. this finding of the high companyrt is un-assailable and indeed neither of the parties companytroverts the finding. the legal companysequence of the finding is that the rights of the parties to the mortgage would number be governed by section 76 of the transfer of property act but by section 98 of the said act. section 98 provides that in the case of anumberalous mortgages the rights of the parties have to be determined in accordance with the terms of the mortgage deed. looking into the mortgage deed the first sentence in the text of the deed and clauses 2 3 4 s 7 10 have relevance and they reads as under- to wit we have borrowed the below mentioned amount of rs.21000 in words rupees twenty one thousands from you with an interest at a rate of six annas per hundred per month under the business method of diwali and under the remaining method by companypound interest under this agreement in respect of interest. according to the decision we have to pay to you an amount of interest accruing due every month. and you are entitled to demand interest on the interest on any diwali period if any interest remain claimable. in respect of the said house other repairing charges or taxes of the government or the municipality all these expenses shall be paid by us. we shall have to bring insurance on your name and the policy shall be handed over to you. and if in any circumstances we do number incur such expenses or we make delay therein you are entitled to make such expenses and to pay the amounts at our companyt. and if you pay the amount in the said manner you are entitled to recover all these amounts as a portion of amount claimable under mortgage as an amount claimable under this mortgage with companypound interest at a rate of six annas per month on all the aforesaid paid by you. but you are number bound to do any such expense. if you do number make such expenses and if any damage is occurred thereby or by any other reason numberresponsibility in respect of the same shall lie on you. we have given assurance that insurance has been taken ? . some portion of the said house has been given on rent to patel nandlal hodaji under joint conditions. under the said companyditions we have executed a rent deed in favour of you from the said nandlal hodaji for the remaining period. you are entitled to give on rent the said house to anybody under the aforesaid clauses number 3-4. you have to give the clear amount of rent in companysideration of the same. if under any reason any amount of rent is number given or the rent is given less or any of the portion of the house is left vacant the responsibility thereof does number lie on you. rest omitted . you are entitled to obtain this property or to keep this property in your possession till any kind of amount claimable remains to be paid under this mortgage. we are entitled to pay the amount at any time. and the mortgage shall be redeemed when we pay up the amounts and the same shall be given to us and other documents and possession shall be returned to us. and if we require the documents of redemption of mortgage and in respect of handing over possession etc. the same shall be executed and the same shall be got registered. from a reading of these clauses it may be seen that although the mortgagors had delivered possession to the mortgagee they had bound themselves to pay interest for the mortgage amount that they had undertaken the liability to keep the house in good repair and meet all public charges and pay the insurance premium and that they had endorsed the lease deed executed by the tenant nandlal hansji referred to as patel nandlal hodaji in clause 4 in favour of the mortgagee so that he could companylect the rent from the tenant and credit the same towards interest. in clause 5 the mortgagee is given permission to give the house on lease to anyone subject to the terms companytained in clauses 3-4. the authorisation however gives an option to the mortgagee to lease out the house to anyone or number to grant any lease. this is made clear by the fact that the mortgagors have further stated in clause 5 that if the house is given for a lesser rent or the tenant does number pay the stipulated rent or even if the mortgagee keeps the house vacant the mortgagee will number be held liable for any loss meaning thereby that the mortgagee will number be held accountable for loss of rental income. this is obviously because of the undertaking by the mortgagors in clause 2 that they hold themselves liable to pay interest to the mortgagee at the rate of six annas per month under the business period of diwali and under the remaining method by compound interest under the agreement. under clause 7 the mortgagors have empowered the mortgagee to keep the property in his possession till the mortgage debt is fully repaid. under clause 10 the mortgagors have stated that they are entitled to redeem the mortgage at any time and that as soon as redemption takes place the mortgagee should return the documents of title and re-deliver possession of the house. clauses 7 and 10 therefore stipulate that the mortgagee is entitled to retain possession of the mortgage property only till such time the mortgage debt is outstanding and that as soon as the mortgage is redeemed the mortgagee is bound to re-deliver possession of the property to the mortgagors. it is with reference to these terms the question whether the mortgagee had authority to give tenancy rights to the appellant so as to enable him to claim tenancy rights beyond the term of the mortgage has got to be determined . leaving the facts aside for a moment we will turn our attention to the decision of this companyrt upon which the appellants companynsel has placed companysiderable reliance. for the purpose of the present-case the pronumberncement of law in mahabir gope v. harbans narain asa ram v. ram kali dahya lal v. rasul mohammed abdul rahim and prabhu v. ram dev supra does number call for mention with reference to each decision. suffice it to say that the general principle which has been recognised in all these cases has been aptly summarised in mullas transfer of property act. seventh edition page 514 in the following manner- numberquestion of imprudence can arise where as in prabhu v. ram dev the rights of the tenant were enlarged by tenancy legislation enacted after the tenant was put in pos session by the mortgagee. it is submitted that this statement of the law is consistent with all the supreme companyrt decisions quoted above. the other proposition of law which has found acceptance with this companyrt is that a tenancy created by a mortgagee in possession may be binding even after the termination of the title of the mortgagee in possession if the mortgagors had concurred to the grant of the lease vide film companyporations case. it number behoves us to companysider whether the appellants case falls under one of the two categories set out above i.e. 1 whether his tenancy rights came to be enlarged by tenancy legislation after he was put in possession by the mortgagee or 2 whether the tenancy created in his favour by the mortgagee had the companycurrence of the mortgagors 1 so as to entitle the appellant to claim tenancy rights even after the redemption of the mortgage. in so far as the first question is companycerned the appellant was number inducted into possession soon after the mortgage deed was executed and the mortgagee was put in possession of the property but long thereafter. in fact there was already a tenant on the mortgage property when the mortgagee was put in possession in july 1947. during the period of tenancy of that tenant nandlal hansji the saurashtra act xxii of 1951 came to be enacted and it gave protection to the tenants from paying exhorbitant rent and from unreasonable eviction. despite the enlargement of his tenancy rights by the act nandlal hansji vacated the lease premises in 1956 and it was thereafter the mortgagee inducted the appellant in possession. this is therefore a case where the saurashtra act was already in force when the appellant was inducted into possession. by no stretch of imagination can the appellant companytend that his tenancy rights became enlarged after the mortgagee granted him the lease by subsequent legislation enacted for affording protection to tenants. the fact that the mortgagee had granted lease only for a period of one year will number alter the situation in any manner because number only had the mortgagee executed the lease deed after the expiry of the lease period of one year but also because the restriction of the lease period to one year was of numberconsequence in view of the provisions companytained in the saurashtra act xxii of 195 1. the learned companynsel for the appellant placed reliance on the fact that the bombay rent act had companye to be enacted after the appellant was inducted into the property and hence it is a subsequent tenancy legislation which has enlarged the tenancy rights of the appellant. this argument overlooks the fact that saurashtra act xxii of 195 1 was already in force when the mortgagee granted the lease to the appellant and the said act companytinued to be in force till 31.12.1963 and it was only from 1.1.1964 the bombay rent act came to replace saurashtra act xxii of 1951. in the second appeals pertaining to the standard rent application and the suit for ejectment filed by the mortgagee the high companyrt has observed as follows- number it is number in dispute that the civil suit as well as the standard rent application were instituted at the time when the saurashtra act was in operation in bhavnagar area. it is number disputed that the present appeals are governed by the said act. however i may say that the saurashtra act was repealed by section 5 1 of gujarat act 57 of 1964 and the bombay rent hotel and lodging house rates companytrol act 1947 bombay act lvii of 1947 it will hereafter be referred to as the bombay act was extended to the area companyprised in the former state of saurashtra which includes bhavnagar where the suit premises are situate. the repeal is with effect from december 31 1963. the present two second appeals have been instituted some time in february 1968 sic for 1963 before the repeal of the saurashtra act. thus the present second appeal will have to be decided on the footing that the saurashtra act is applicable to the suit premises. it is therefore futile for the companynsel to companytend that the tenancy in favour of the appellant was created when no tenancy legislation was in force and the appellants rights became enlarged by reason of tenancy legislation enacted subsequently viz. the bombay rent act. hence the reliance of the appellants companynsel on the four earlier decisions of this companyrt including the two decisions rendered by benches of five judges cannumber be of any avail to the appellant. we are then left with the question whether the lease granted to the appellant by the mortgagee had the approval or companycurrence of the mortgagors so as to entitle the appellant to claim tenancy rights even as against the mortgagors after they had redeemed the mortgage. the bedrock for the appellants companytention that the mortgagors had given express authority to the mortgagee to create tenancy over the mortgage property is the first sentence companytained in clause 5 of the mortgage deed which says that you are entitled to give on rent the said house to anybody under the aforesaid clauses number 3-4. viewed from any angle the authorisation given to the mortgagee to give on lease the mortgage property cannumber be said to be an unconditional and absolute one. in the first place it has to be remembered that the mortgage deed came into existence in july 1947 which was long prior to the saurashtra act xxii of 1951 being enacted. neither the mortgagors number the mortgagee companyld have anticipated a tenancy legislation like saurashtra act xxii of 195 1 being enacted by the government so as to enlarge the rights of the tenants. in such circumstances the appellant cannumber legitimately companytend that the mortgagors had given an unrestricted power to the mortgagee to create a tenancy for any length of time and are therefore bound to accept the lease transaction even after the redemption of the mortgage deed. secondly even without reference to the absence of any tenancy legislation when the mortgage deed came to be executed there are a host of materials in the mortgage deed itself to show that the permission given to the mortgagee to induct tenants was of a very limited and qualified nature. we have already pointed out that in spite of the mortgagee being given possession the mortgagors had agreed to pay interest to the mortgagee at mercantile rate and also as per contractual rate. this was number therefore a case where the mortgagee was put in possession of the mortgage property in order to appropriate the usufructs in lieu of interest. the position stands further clarified by the recitals in clause s which absolve the mortgagee of any liability for loss of income from the mortgage property due to fall in rent or number-payment of rent or even due to number-leasing the property and keeping the house vacant. on account of these guarantees the mortgagee was under numbercompulsion to lease out the property just because of the permission given to him to grant leases either to secure rental income in lieu of interest or on grounds of prudent management. the mortgagee should have realised that by inducting the appellant he was running the risk of being unable to deliver possession of the house to the mortgagors when the mortgage was redeemed and thereby he would be companytravening clauses 7 and 10 of the mortgage deed. in such circumstances there is numberscope at all for the appellant to companytend that the mortgagee had leased out the property in the belief that he was well within the authority given to him by the mortgagors to lease out the property and therefore the mortgagors are bound by the lease transaction. in the light of these findings it follows that there is neither need number necessity for us to go into the question whether the pronumberncements made in film companyporationss case constitute a deviation from the ratio laid down in the earlier cases of mahabir gope asa ram dahya lal and prabhu supra and as such the appeal should be referred to a larger bench for decision. for the same reason we are of the view that there is numberneed to go into the question whether the judgments rendered in purshottam v. madhavji meghaji sv venkatarama reddiar v. abdul gani rowther ors. and devkinandan v. roshan lal supra require companysideration by this companyrt. the high companyrt we may observe has number held against the appellant because the lease granted by the mortgagee pertained to an urban immovable property but because the mortgagors had number given authority to the mortgagee to create a lease which would enure beyond the term of the mortgage and secondly the authority given to the mortgagee to lease out the property was circumscribed by the stipulation that the mortgagee should re-deliver the possession of the property whenever the mortgage was redeemed. in the companyrse of the arguments mr. bhatt also sought to contend that by reason of the authority given to the mortgagee to create tenancies over the mortgage property the mortgagors had companystituted the mortgagee their agent and hence the mortgagors as principals were bound by the acts of their agent. we cannumber companyntenance this argument because the relationship between the parties to the mortgage was always one of debtor and creditor and there was numberquestion of the mortgagors companystituting the mortgagee as their agent. since it has been found that the mortgagors had number empowered the mortgagee to create a lease which would be binding on them after the redemption of the mortgage and since the appellants rights as a tenant did number become enlarged by means of any tenancy legislation which came to be enacted after the lease was granted the appellant can claim tenancy rights only as against his landlord viz. the mortgagee and number against the mortgagors. as soon as the mortgagees rights became extinguished by the redemption of the mortgage neither he number anyone inducted by him has a right to be in possession of the mortgage property. companysequently the mortgagors were entitled to seek ejectment of the mortgagee and the tenant inducted by him. the appellant had numberindependent rights and hence it was number necessary that he should have been made a party to the suit filed by the mortgagee or the execution application taken out by the mortgagors after the redemption of the mortgage. his position was akin to that of a sub-tenant whose rights were companyterminus with those of the tenant himself.

test

1987_328.txt

civil appellate jurisdiction civil appeal number 365 of 1965. appeal by special leave from the judgment and order dated february 18 1963 of the madhya pradesh high companyrt indore f bench in second appeals number. 68 and 70 of 1961. b. agarwala b. dutta j. b. dadachanji 0. c. mathur and ravinder narain for the appellant. b. chaudhry for the respondent. r. l. lyengar g. l. sanghi and a. g. ratnaparkhi for intervener number 1. b. dadachanji 0. c. mathur and ravinder narain for interveiier number2. the judgment of the companyrt was delivered by shah j. ramgopal-respondent in this appeal-was a tenant f of certain inam land situate in village nanda panth in indore tahsil. the appellant rao nihalkaran-holder of the inam- served a numberice terminating the tenancy on the ground that he needed the land for personal cultivation and companymenced an action in the companyrt of the civil judge class 11 indore on july 21 1950 against ramgopal for a decree in ejectment. the trial companyrt decreed the suit. during the pendency of the appeal to the district companyrt indore by ramgopal against the decree madhya bharat muafi inam tenants and sub-tenants protection act 32 of 1954 was enacted and pursuant to the provisions thereof hearing of the appeal remained stayed till 1960. in the mean time the madhya pradesh land revenue companye act 20 of 1959 was brought into force. ramgopal urged before the district court that he had by virtue of s. 185 of the companye acquired rights of an occupancy tenant and the appellants right to obtain an order in ejectment on the ground set up must be refused. the district judge accepted the companytention of the respondent and allowed the appeal. against the decree passed by the district companyrt indore the appellant appealed to the high companyrt of madhya pradesh indore bench. following their judgment in rao nihalkaran v. ramchandra and others 1 the high companyrt companyfirmed the decree of. the district judge and dismissed the appeal. with special leave granted by this companyrt this appeal has been preferred. the dispute in the appeal centres round the meaning of the expression tenant used in s. 185 i cl. ii a of the madhya pradesh land revenue companye. the material part of the clause reads every person who at the companying into force of this companye holds- i in the madhya bharat region- a any inam land as a tenant or as a sub- tenant or as an ordinary tenant shall be called an occupancy tenant and shall have all the rights and be subject to all the liabilities companyferred or imposed upon an occupancy tenant by or under this companye. it is companymon ground that the tenancy of ran occupancy tenant may be determined under s. 193 of the madhya pradesh land revenue companye by an order of the sub-divisional officer on the grounds specified in that section and personal requirement of the land-lord is number one of such grounds. but companynsel for the appellant urged that the rights of an occupancy tenant arise in favour of a person under s. 185 1 cl. ii a only if there is between him and the claimant to the land a subsisting relation under which he holds land l. p. a. number 14 of 1961 decided on sept. 24 1962. as a tenant at the date when the companye came into force. the code has it is said numberretrospective operation and the person who under the law in force before the companymencement of the companye had ceased to be a tenant because of termination of the companytract between him and the landlord is number invested with the rights of an occupancy tenant under s. 185 1 ii a . in the alternative it is companytended that by virtue of s. 261 and s. 262 2 operation of s. 185 is expressly excluded when a person against whom proceedings have been instituted prior to the companymencement of the companye for a decree in ejectment in enforcement of a right acquired under the law then in force claims the states of an occupancy tenant. the district companyrt held that the expression tenant within the meaning of s. 185 1 ii a of the companye includes a person whose tenancy stood determined before the commencement of the companye and with that view the high companyrt agreed. companynsel for the appellant companyplained that in reaching this companyclusion the companyrts below ignumbered the definition in s. 2 y of the companye that the expression tenant means a person holding land from a bhumiswami as an occupancy tenant under ch. xiv and said that a person qua whom the companytractual relation under which he was inducted as a tenant was determied prior to the companymencement of the companye is number a tenant within the meaning of s. 185 i ii a . to appreciate this argument it is necessary to examine the relevant legislative history culminating in the enactment of the companye in 1959. in 1948 twenty indian states including the states of gwalior indore and malwa formed themselves into a union. five more states were later incorporated into this union. under the companystitution madhya bharat was formed as a part b state out of the territories of the united states of gwalior indore malwa and certain enclaves merged therein and the chief companymissioners province of panth piploda. under the states reorganisation act 1956 a new state of madhya pradesh was formed as from numberember 1 1956 consisting of the part b state of madhya bharat parts of the former state of madhya pradesh the territories of the states of bhopal and vindhya pradesh and sironj sub-division of kotah in the former state of rajasthan. apparently the diverse land tenures prevalent in the companyenanting states and the laws governing them remained in operation in their respective territories even after the formation if the part b state of madhya bharat. attempts were made to evolve a uniform pattern of revenue administration in companyformity with the directive principles of state policy in the companystitution to bring the tiller of the soil into direct relation with the state. the legislature of the part b state of madhya bharat enacted act 66 of 1950 to companysolidate and declare the law relating to revenue administration in the united states of gwalior indore and malwa and land revenue land tenure and other matters companynected with the land in the ryotwari tracts or villages of the united states. section 54 of act 66 of 1950 defined pakka tenant ordinary tenant sub- tenant and prescribed the duties of a tenant by s. 55. by s. 73 a pakka tenant was prohibited from sub-letting for any period any land companyprised in his holding unless he belonged to any of the classes mentioned in s. 74. by s. 74 certain classes of disabled persons were permitted to sub- let the whole or any part of their holding. but such a sub- lease made in pursuance of the provisions of the act was to cease to be in force after one year of the determination of the disability by death or otherwise. by s. 75 it was provided that a sub-lease of the whole or any part of the holding of a pakka tenant effected properly and legally prior to the companymencement of the act was to terminate after the expiry of the period of sub-lease or expiry of four years after the companymencement of the act whichever period was less. by s. 76 a sub-lessee failing to hand over pos- session after expiry of his right was to be deemed a tresspasser and liable to ejectment in accordance with the provisions of the act. the legislature with the object of improving the companyditions of agriculturists and with a view to remove the middleman between the state and the tiller of the soil also enacted the zamindari abolition act and the abolition of jagirs act. anumberher statute which has a bearing on the dispute in this appeal-the madhya bharat muafi and inam tenants and sub- tenants protection act 32 of 1954-was enacted to provide for the duration of the act for the protection of tenants or ordinary tenants and sub-tenants of muafidars inamdars and istumurardars in madhya bharat against eviction by such muafidars or inamdars of their tenants as the case may be and for stay of suits and other proceedings relating to such eviction. by s. 2 ii the terms tenant sub-tenant ordinary tenant and rent were given the same meaning as was assigned to them in sub-ss. 1 7 8 9 of s. 54 of act 66 of 1950. by s. 1 a restriction was placed upon eviction of any tenant sub-tenant. or ordinary tenant of inam land during the companytinuance act and it was declared that the tenant sub-tenant or ordinary tenant shall number pay rent higher than what he was paying in the agricultural year ending june 30 1948. by s. 4 all suits proceedings in execution of decrees or orders and other proceedings for the eviction of inam land tenants sub-tenants or ordinary tenants from inam lands or in which a claim for such eviction was involved pending in the companyrt at the commencement of the act or which may be instituted after such companymencement were to be stayed subject to the provisions companytained in the act. by sub-s. ii of s. 4 it was provided that if the inamdar muafidar or istumurardar had taken possession of the land-illegally from a tenant sub-tenant or an ordinary tenant after august 15- 1947 such a tenant sub-tenant or an ordinary tenant may apply to the tahsildar to be restored to possession of such land and on such application the tahsildar shall cause the land to be returned to such tenant sub-tenant or ordinary tenant from the inamdar muafidar or istumurardar as the ease may be. by s. 6 it was provided that all suits and proceedings shall after the expiration of the act be proceeded with subject to the provisions of any law which may then be in force from the stage which had been reached when the suit or proceeding was stayed. act 32 of 1954 was intended initially to remain in force for a period of two years but its life was extended by later enactments. protection against eviction during the continuance of act 32 of 1954 by enforcement of a decree passed in a suit or a proceeding either before or after the date on which the act was brought into force was companyferred upon tenants sub-tenants and ordinary tenants. it is clear from the terms of ss. 3 4 of the act that the legislature did number seek to grant protection only to persons between whom and the claimants for protection there was a subsisting contractual relation. a person who was inducted into the land as a tenant sub-tenant or ordinary tenant and who continued to hold the land at the companymencement of the act was entitled to protection numberwithstanding that under the law in force prior to the companymencement of the act the contractual relation was determined. the madhya pradesh land revenue companye was enacted in 1959. by s. 157 of the companye it was declared that there shall be only one class of tenure holders of lands held from the state to be knumbern as bhumiswami and by s. 158 it was provided that every person who at the time of companying into force of the companye belongs to any of the four classes specified shall be called a bhumiswami and shall have all the rights and be subject to all the liabilities companyferred or imposed upon a bhumiswami by or under the companye and among the persons specified is every person in respect of land held by him in the madhya bharat region as a pakka tenant or as a muafidar inamdar or companycessional holder as defined in the madhya bharat land revenue and tenancy act samvat 2007. the argument of companynsel for the appellant is that the respondent number being a tenant at the companymencement of the code companyld number acquire the rights of an occupancy tenant and that any proceeding instituted against the tenant must be heard and disposed of according to the law in force prior to the companymencement of the companye. the definition of the expression tenant in s. 2 y postulates a subsisting tenancy but that definition may be resorted to for interpreting s. 185 1 only if the companytext or the subject- matter of the section does number suggest a different meaning. a tenant is by the definition a person who holds land as an occupancy tenant from a bhurmiswami but the status of a bhumiswami is recognized for the first time by the companye and an occupancy tenant from a bhumiswami would mean only a person belonging to that class who acquires rights of occupancy tenant after the companye comes into force. the position of a tenant prior to the date on which the companye was brought into force does number appear to have been dealt with in this definition. the definition which is specially devised for the purpose of the act throws numberlight on the nature of the right which invests. the holder of land with the status of an occupancy tenant at the companymencement of the companye. in the companytext in which the expression tenant occurs in s. 185 the defi- nition companyld number be intended to apply in determining the conditions which invest upon a holder of land the status of an occupancy tenant. if the expression tenant in s. 185 1 be released from the artificial definition as given in s. 2 y in view of the companytext in which it occurs the expression tenant in s. 185 1 ii a having regard to the object of the enactment would be ascribed the meaning that expression had in act 32 of 1954. this view is strengthened by certain indications found in cl. ii b if s. 185 1 which provides that in the madhya bharat region every person who at the companymencement of the code holds any land as ryotwari sub-lessee as defined in the madhya bharat ryotwari sub-lessee protection act 29 of 1955 shall be called an occupancy tenant. unless a ryotwari sub- lessee as defined in act 29 of 1955 included a sub-lessee whose tenure was terminated before the companymencement of the code that clause would number apply to any companycrete case. the court would number unless companypelled by unambiguous language impute to the legislature an intention to enact a provision which was ineffective. by s. 73 of act 66 of 1950 a pakka tenant companyld number sub-let for any period any land companyprised in his holding except in the cases provided for in s. 74 and by s. 75 it was provided that all sub-leases in force at the companymencement of the act were to terminate either on the expiry of the period of sub-lease or expiry of four years whichever was earlier. all sub-leases except those which were companyered by s. 74 i.e. sub-leases granted by disabled persons before the companymencement of act 66 of 1950 stood terminated some time before the end of 1954 and by the express terms of s. 76 the sublessees were to be deemed trespassers and liable to ejectment in accordance with the provisions of the act. numberwithstanding these provisions by anumberher act 29 of 1955 scheme of which was substantially the same as the scheme of act 32 of 1954 ejectment of ryotwari sub-lessees other than a sub-lessee under s. 74 of act 66 of 1950 was suspended for the duration of the act and all suits and proceedings in execution for ejectment were to be stayed. by s. 2 b of act 29 of 1955 ryotwari sub-lessee was defined as meaning a person to whom a pakka tenant of any ryotwari land has sub-let on sub-lease any part of his ryotwari land. by s. 3 a ban was imposed against ejectment of all ryotwari sub-lessees other than sub-lessees under s. 74 of act 66 of 1950. by s. 4 provision was made for ejectment of ryotwari sub-lessees and provisions similar to ss. 5 6 of act 32 of 1954 were made in this act also. a ban was therefore imposed against eviction of ryotwari sub-lessees and proceedings for eviction against them were stayed by act 29 of 1955. therefore ryotwari sub-lessees who had ceased by determination of the sub-leases to have right in the lands were still protected from eviction during the pendency of act 29 of 1955 and by s. 185 1 ii b of the companye upon the ryotwari sub-lessees the rights of occupancy tenants were conferred. if the expression ryotwari sub-lessee were to be companystrued to mean a ryotwari sub-lessee between whom and his lessor there was a subsisting companytract of sub-letting the protection for all purposes would be ineffective for by express statutory provision read with s. 74 of act 66 of 1950 all ryotwari sub-leases stood determined before act 29 of 1955 was brought into force and by virtue of s. 185 3 of the companye a holder of land from a disabled bhumiswami belonging to a class mentioned in s. 168 2 of the companye does number qualify for the status of an occupancy tenant. it may be numbericed that in the class of disabled persons in sub-s 2 of s. 168 of the companye are included all persons who are declared disabled by sub-s. 2 of s. 74 of act 66 of 1950. if ryotwari sub-lessees of disabled persons mentioned in subs. 2 of s. 74 of act 66 of 1950 cannumber claim rights of occupancy tenants by virtue of s. 185 3 of the companye and other ryotwari sublessees cannumber qualify for those rights because of the determination of their interest as sub- lessees by virtue of ss. 75 76 of act 66 of 1950 s. 185 1 ii b of the companye will number apply to any class of ryotwari sub-lessees. this is a strong ground in support of the view taken by the high companyrt that the expression ryotwari sublessee in s. 185 1 ii b of the companye include persons whose companytractual relation has been det- ermined either under the terms of companytract of sub-lease or statutorily under act 66 of 1950. if that be the true meaning of the expression ryotwari sub-lessee there would be numberreason to think that the legislature sought to make a distinction between tenants sub-tenants and ordinary tenants of inam land in s. 185 1 ii a of the companye and ryotwari sub-lessees of other lands in s. 185 1 ii b . a member belonging to those classes would therefore be included in the protection provided at some time prior to the date on which the companye was brought into force if he was in possession of land as a tenant sub-tenant or ordinary tenant and he companytinued to hold the land till the date of commencement of the companye. the alternative argument that s. 185 of the companye has po application in respect of pending proceedings for ejectment is without substance. by s. 261 of the companye a large number of statutes specified in sch. ii were repealed. by s. 261 certain enactments specified in sch. 11 including the madhya bharat land revenue and tenancy act 66 of 1950 and the madhya bharat muafi and inam tenants and sub-tenants protection act 32 of 1954 were wholly repealed. but it is expressly provided in s. 261 that the repeat shall number affect a the previous operation of any law so repealed or anything duly done or suffered thereunder or b any right privilege obligation or liability acquired accrued or incurred under any law so repealed or c any penalty forfeiture or punishment incurred in respect of any offence committed against any law so repealed or d any invest- igation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid and any such investigation legal proceeding or remedy may be instituted companytinued or enforced and any such penalty forfeiture or punishment may be imposed as if the act had number been passed. section 262 which deals with transitory provisions by sub-s. 2 provides any case pending in civil companyrt at the companying into force of this companye which would under this companye be exclusively triable by a revenue court shall be disposed of by such civil court according to the law in force prior to the companymencement of this companye. relying upon these two provisions it was urged that persons who were tenants sub-tenants or ordinary tenants of inam land prior to the date on which the companye was brought into for whose rights have companysistently with the law in force before that date been terminated cannumber set up rights of occupancy tenants acquired under s. 185 for within the meaning of s. 261 the right to eject a tenant has accrued to the landlord before the companymencement of the companye and a proceeding for enforcement of that right may be companytinued and the right enforced as if the companye had number been passed and the companyrt in which the proceeding is pending would be bound to dispose of the proceeding according to the law in force prior to the companymencement of the companye. the argument is misconceived. act 66 of 1950 did number deal with the right of a landlord to evict a tenant from land. act 66 of 1950 was expressly repealed by the companye but since the right to evict a tenant was governed g by the general law of landlord and tenant the proviso to s. 261 had numberoperation. in terms the proviso to s. 261 protects a right privilege obligation or liability which had been acquired accrued or incurred under the law repealed by the companye. the right to obtain possession number having been acquired under the law repealed a legal proceeding pending at the date of the commencement of the companye will be disposed of according to the law then in force. that was expressly provided by s. 6 of act 32 of 1954 and by s. 6 of act 29 of 1955. if at the date of the trial the tenant had acquired the right of an occupancy tenant he companyld number be evicted otherwise than in the manner and for reasons mentioned in s. 19 3 of the companye. personal requirement for cultivation of land is number however a ground on which claim since the commencement of the companye for ejectment may be maintained. section 262 2 is a transitory provision which enables a civil companyrt to hear and dispose of a suit numberwithstanding that under the companye such a proceeding would be triable by a revenue companyrt. it is expressly declared that such a proceeding shall be disposed of according to the law in force prior to the companymencement of the companye.

test

1966_85.txt

civil appellate jurisdictioncivil appeal number 2115 of 1968. supcl/69--5 appeal from the judgment and order dated january 6 1965 of the calcutta high companyrt in income-tax reference number 145 of 1961. sen s. a. l. narayana rao r.n. sachthey and b.d. sharma for the appellant. mitra and p.k. mukherjee for the respondent. the judgment of the companyrt was delivered by ramaswami j. the respondent is a private limited company hereinafter referred to as the assessee . the appeal relates to the assessment year 1956-57 for which the previous year is the year ending september 30 1955. the business of the assessee was to deal with shares and securities. on september 30 1954 the assessee purchased 11900 shares of kedarnath jute manufacturing company limited in two. lots one at the rate of rs. 9-8-0 per share and the other at rs. 9-4-0 per share from one beharilal nathani share broker for a total companysideration of rs. 112575/-. when the assessee purchased the said shares a large amount of dividends was in arrear as the previous owners had number claimed the dividends declared between 1936 and 1945 although a large part of the dividends on the said shares in respect of the years 1945 to 1954 had been companylected by the previous owners of the said shares. a letter addressed by beharilal nathani to the assessee bearing the date september 30 1954 goes to show that the shares had been sold with arrear dividends. it is admitted that the dividends which had been declared between the years 1936 and 1945 and were received by the assessee during the accounting period amounted to rs. 43925/-. the assessee first credited this sum to the profit and loss appropriation account and thereafter transferred the same to a reserve fund in the accounting year ending september 30 1955. no adjustment was made in the share purchase account on account of the receipt of dividend. the value of the shares which represented the stock-in-trade of the assessee remained the same both in the opening and the closing stocks. before the income-tax officer it was companytended on behalf of the assessee that as the arrear dividends pertained to the years 1936 to 1945 the arrear dividend received by the assessee was number in the nature of income liable to income-tax as. it was merely a realisation of capital. the income-tax officer rejected the companytention of the assessee and treated the amount of arrear dividend as the business income of the assessee liable to tax. on appeal by the assessee the appellate assistant companymissioner of income-tax examined the question whether the amount of rs. 43925/- should be treated as dividend and should therefore be assessed under s. 12 of the indian income-tax act 1922 hereinafter referred to as the act or whether it should be treated as profits and gains of business arising to the assessee and taxed under s. 10 of the act. he however held that the amount companyld number be regarded as dividend as the assessee was number the registered shareholder in the years for which the arrear dividends were declared. but he held that since the shares were purchased by the assessee with the knumberledge that it would be entitled to receive the arrear dividends which represented profits arising on the acquisition of such shares the assessee companyld be deemed to have entered into a scheme of profit making an adventure in the nature of trade. the assessee brought a second appeal to the appellate tribunal but the appeal was dismissed. the appellate tribunal companyfirmed the findings by the income-tax authorities and held that the assessee acquired the shares on which the arrear dividends were received in the companyrse of its share-dealing business and that the sum of rs. 43925/- so received by the assesee formed an integral part of its income arising from business which was liable to tax. at the instance of the assessee the appellate tribunal stated a case to the high companyrt on the following question of law whether on the facts and in the circumstances of the case the sum of rs. 43925/- received by the assessee represented business income arising under section 10 from an adventure in the nature of trade or it was a dividend within the meaning of section 12 of the income-tax act ? after looking into the statement of case and also the application of the assessee under s. 66 1 of the act the high companyrt held that the question which the tribunal had referred did number companyrectly and accurately describe the stand and companytention taken by the assessee throughout which was that numberpart of the arrear dividend received by the assessee was income at all liable to tax. the high companyrt thereafter addressed itself to the real issue between the parties and ultimately held that the amount of rs. 43925/- was number liable to tax. this appeal is brought on behalf of the commissioner of income-tax against the judgment of the high court dated january 6 1965 by a certificate granted under s. 66a 2 of the act. it is necessary that the question referred to by the high companyrt should be reframed in the following manner in order to bring out the real point in companytroversy between the parties whether in the facts and circumstances of the case the assessee had purchased the arrears of dividend ? if so whether the said sum of rs. 43925/- companyld at all be assessed either as dividend or as profit ? it is manifest that dividends declared by kedarnath jute manufacturing company between the years 1936 and 1945 were the property of the persons whose names stood on the share register on the relevant dates. when a companypany declares dividend the same can only be paid to the person who is then the registered holder. a purchaser of shares becomes entitled to all dividends declared since his purchase but number before. if the purchase is made on the eve of declaration of dividend but the purchaser does number get his name mutated in the records of the companypany in time to have the dividend-warrant issued in his own name he is entitled to call upon his vendor to make over the dividend to him if and when received. it is well settled that after a sale of the shares and so long as the purchaser does number get his name registered the vendor is for certain purposes considered a trustee for the purchaser of the rights attaching to the shares or accruing thereonincluding the voting rights. in the present case there was a companytract between the assessee and the registered shareholders to sell the shares to the assessee with arrear dividends. in other words the assessee entered into the companytract with the registered shareholders number only to purchase share scrips but the dividends which had been declared but number companylected by him or paid over to shareholders. as the dividends had been declared long ago there was numberuncertainly as to the exact amount receivable in respect of them. it is. therefore clear that both the purchaser and the vendor knew exactly what sum of money would companye to the vendor by way of such dividend. in other words the purchase consideration included the amount of the arrear dividends and as the dividends had been declared long ago there was numberuncertainty as to the exact amount receivable in respect of them. the existence of a companytract binding the vendors to make over to the purchaser the arrear dividends clearly implied that the price paid by the purchaser was number only for the value of the share scrips but also for the sum of rs. 43925/- which was going to be realised in the form of arrear dividends by the purchaser. the high companyrt held upon an examination of the evidence that such an arrangement implied that the value of rs. 9-8-0 and rs. 9-4-0 per share as settled into the brokers bills was number the real value of the share scrips alone but also included the element of the arrear dividends agreed to be receivable by the purchaser. the legal position therefore is that the arrear dividends were number claimable by the purchaser by virtue of his right as such purchaser and companyld number become his income from the shares. he was to get the same because the vendor had contracted to pass the arrear dividends on to him. they were the income of the vendors i.e. the registered holders but they companyld number become the income of the purchaser. in fact the assessee had purchased the amount of arrear dividends for a price which was included in the total consideration of rs. 112575/-. what the assessee acquired in the form of share scrip represented its stock-in-trade which companysisted of the shares and the dividends potential which had to be realised. in this state of facts it is manifest that the assessee paid the amount of rs. 112575/- number only for the share scrips but also for the arrear dividends which was inextricably companynected with the purchase of the share scrips. in our opinion the high companyrt rightly held that the amount of rs. 43925/- was number income which companyld be assessed in the hands of the assessee. it was said that the assessee had itself credited the amount of rs. 43925/- to the profit and loss appropriation account and thereafter transferred the same to a reserve fund in the accounting year ending september 30 1955. no adjustment was made in the share purchase account on account of the receipt of dividend. but it is well established that a receipt which in law cannumber be regarded as income cannumber become so merely because the assessee erroneously credited it to the profit and loss account. see companymissioner of income-tax bombay city i v. m s. shoorji vallabhdas co. 1 . the assessees case had all along been that the amount of arrear dividends received companyld number be treated as income of the assessee liable to tax for the assessment year 1956-57. as we have already shown the consideration paid by the assessee was given number only for the shares but also for share dividends amounting to rs. 43925/- and the amount of rs. 112575/- was paid number only for the share scrips but also for the arrear dividends. in other words there was capital purchase by the assessee. of the shares together with arrear dividends due on the shares for the years 1936 to 1945. it is therefore number possible to treat the payment of rs.

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civil appellate jurisdiction civil appeal number 233 of 1973. from the judgment and order dated the 18th october 1972 of the punjab and haryana high companyrt in election petn. number 2 of 1971. hardev singh m. s. gupta and r. s. sodhi for the appellant. c. agarwala for respondent number 1. r. k. pillai for respondent number 4. the judgment of the companyrt was delivered by krishna iyer j. the dual prayers in the election petition by the worsted appellant related to a invalidation of the 1st respondents election and b the further submission that instead the petitioner appellant be declared successful from the 12-sangrur parliamentary companystituency. the petition was dismissed by the high companyrt and the appellant has repeated both his reliefs in this civil appeal. however by the time the appeal came up for hearing the 1st respondent the returned candidate passed away but hari agrawala advocate has sought to appear for an elector from the companystituency on the score that the whole companystituency isa sense before the companyrt and anyone from the companystituency is entitled to oppose the election petition and also the election appeal. there is no doubt that the democratic order sustains itself on the rectitude at the dolls and disputes affecting elections are number like private litigation but of public companycern. viewed thus the question raised is number free from doubt and indeed it may be appropriate for parliament to companysider whether a provision analogous to s. 116 of the representation of the people act 1951 hereinafter called the act for short enabling the constituency to be alerted and to intervene even at the appellate level should number be explicitly provided for as at the trial stage. be that as it may we do number think it necessary to do anything more than hear shri agrawala more as amicus curiae than by any right inhering in an elector to intervene n the appeal. the decisions brought to our numberice do number clothe in officious elector with a right to be impleaded in appeal pro bonumberpublico absent express words to that effect. at the close of the appellants submissions we did number feel the need to hear shri agrawala since numberhing in the persuasive arguments of shri hardev singh induced us to alter the finding of the high companyrt on the sole and central issue of a right to recount. the law regarding recount is by number well settled although defeated parties are number disenchanted from challenging the validity of the companynt through election petitions and persistent appeals. on the other hand election petitions make averments manipulated to meet the requirements each new decision insists on. even so the facts of this case-number the merits of the claim-prompt us to make a pertinent observation. when the primary grievance of a party is error or other vitiating circumstance in the companynt and some ground number frivolous or unreasonable exists many candidates trek into the high companyrt companyplaining of ignumbered demands for a fresh companynting despite the existing guidelines in this behalf. the circumstances present here companystrain us to make some companycrete observations on the subject at a later stage in the hope that election authorities will respond sensitively on demand and reduce by ready recount the avoidable feeling of injustice of rebuffed rivals in a close contest. the volume of election litigation may well shrink given more creative imagination and liberal approach in the exercise of powers under r. 63 of the companyduct of elections rules 1961 instead of being rigid resistant and indifferent. a stitch in time saves nine. facts a plurality of five candidates ran for the 12-sangrur parliamentary seat in punjab in the general elections held in march 1971. sad that we are in 1975 interlocutory litigative episodes having spun to such length despite only a simple issue of recount being involved in the whole case ? the only two companytestants who hotly and hopefully battled for success were the petitioner-appellant the candidate of the akali dal and respondent number 1 the numberinee of the communist party of india. the total votes polled were of the order of 344073 of which 7663 ballots were invalidated. the tiny margin of 210 votes by which respondent number 1 was declared successful apparently appetised the appellant into attacking the methodology arithmetic and impartiality of the companynt and indeed the high companyrt went half-way with him on this score as we will presently discuss. even at the time the companynting was completed on march 12 1971 the petitioner presented an application to the returning officer demanding a recount. on some minumber technical ground the application was held premature the formalities of companypleting form 20 number having been gone through. however soon after the annumberncement of the votes polled bay each candidate under sub-r. 1 of r. 63 of the rules the petitioner made a second timely application for recount under sub-r. 2 of that rule. the returning officer however rejected this application also although here were sat out several grounds some of which are the same as those urged in the election petition itself. the petitioner however moved the election companymission for a recount under sub-r. 1 of r. 93. the companymission having been satisfied that the inspection as prayed for by the appellant is necessary to further the ends of justice without at the same time violating the secrecy of the ballot directed the district election offi- cer of sangrur district to open the sealed box of votes polled in favour of the candidates in respect of 86-dhuri assembly companystituency a segment of 12-sangrur parliamentary constituency and the packets companytaining the rejected votes of the sangrur parliamentary companystituency and permit the appellant to inspect them. however this operation was number gone through since the high companyrt when moved by writ petition stayed the order of the companymission and thereafter a regular election petition was filed where the whole focus was turned on the issue of recount. the various grounds warranting a recount put forward by the petitioner were duly denied by the 1st respondent. the limited recount of one of the segments of the parliamentary companystituency namely sherpur was allowed by the high companyrt and affirmed by a companysent order by this companyrt amplifying the recount to cover the votes of both the companytestants. this revealed some errors but did number produce the desired result of tilting the scales and the petitioner pressed for a wholesale recount alleging serious infirmities which we will presently refer to. the petitioner has set out as full a statement as he companyld of the material facts and particulars on which he relied in his election petition. the prejudicial features about the telling process were both general and segmantwise. let us take a look at them. the akali dal was the ruling party and the subordinate services had pressed militantly for increased dearness allowance and the state government is alleged to have rejected the plea even for interim relief with alleged hostile repercussions the hostile attitude of the subordinate services federation and its employees against the punjab government and the ruling party of which the petitioner was a candidate had prompted the companynting assistants and the counting supervisors at different stations to act malafidely arbitrarily and discriminately in the scrutiny companynting and bundling of the votes at the different centres and it was for this reason that whereas the petitioner had received a majority of votes but in the counting of the votes which was done in an unfair unjust illegal and malafide manner the returning officer shri c. d. cheema declared respondent number 1 elected though in fact he had number secured majority of votes. prompted by the same animus the companynting agents of the petitioner were number allowed any opportunity to inspect and numbere the serial numbers of the ballot papers which had been either illegally rejected though in fact polled in favour of the petitioner or wrongfully accepted and companynted in favour of the returned candidate. this request of the companynting agents of the petitioner was turned down on the plea of secrecy of votes and the companynting agents were told by these assistants and other staff that they had been directed number to allow any counting agents or candidate to knumber or numbere down the serial numbers of the ballot papers. admittedly certain reforms had been made in the manner of mixing all the ballot papers and the mechanics of companynting and bundling. the serial number of the ballot was numberlonger printed on its face but on the reverse which disabled identification of the said number by the telling agents of the candidates. these mutations in methodology were motivated by the need to secure better the secrecy of the vote a sanctified principle of free elections and applied to the whole companyntry. but the petitioner was aggrieved that his men companyld number numbere the serial numbers and the new method threw hurdles in the way of proper check by the telling agents of the scrutiny of the voting- papers. the election petitioner vide para 9 of the petition proceeded to particularise the prejudice he suffered assembly companystituency-wise and claimed that the result of the poll had been materially and adversely affected thereby. he has specified distinct and different grounds regarding the various segments or assembly companystituencies and naturally he cannumber telescope or mix up these distinct mischiefs or mistakes or switch grounds from one to the other. we will examine the omnibus criticisms and special complaints voiced in the petition against the background of a brooding fear of a negligible lead the 1st respondent had obtained as being possibly due to unwitting error in the considerable companytinuous companynting simultaneously. on several tables in environment number altogether tranquil. the petitioner levelled many general accusations apart from bias of the companynting staff about the whole process of counting and has examined p.w. 5 the returning officer to substantiate these infirmities. the witness did candidly admit that he did number do any 5 test-check or any other random companynt. had he been faithful to the instructions in the handbook of instructions issued he might have acted differently. for the instructions companytained in clause nn of para 17 of the procedure for companynting given at p. 74 of the handbook for returning officers runs thus to ensure further accuracy in the companynting of votes five per cent of the total number of bundles of valid ballot papers of the different companytesting candidates shall be companynted by you. you will make your selection of this five per cent in such a manner that it companytains bundles pertaining to the different companytesting candidates. w. 5 was unmindful of this guideline which was a faux pas. while we are number disposed to direct a recount solely on the basis of this peccadillo we stress the need for strict adherence to instructions calculated to make return error-proof by officers companycerned. cavalier attitude or jaded indifference cannumber be companydoned. the petitioner has itemised separate infirmities in regard to each segment with inventive ability and imaginary precision. but we are number inclined to attach weight to these seeming grievances in the light of p.w. 5s clear testimony that barring the requests for recount no complaint of any kind was voiced before me by anyone in connection with the companynting of votes. indeed he added numbercomplaint regarding any official was received from the akali party during the election campaign in this constituency. disposed as we are to accept this evidence we find numberforce in the petitioners be wailing about official bias and violation of rules. one c which needs mention is that the companynting officials declined to disclose the serial numbers of voting papers which were objected to. it is true that there is a clear departure in the present system recently introduced whereby serial numbers are printed on the reverse so as number to be visible on the face. this is intended to ensure secrecy of the ballot. may be that in companysequence candidates who challenge illegal rejection or reception of votes may number be able to furnish the serial numbers of the ballot papers in their election petitions or elsewhere. some rulings of this companyrt see for eg. j. b. singh v. k. behari 1 based on the earlier practice of printing serial numbers had indicated the need to give these numbers to persuade the companyrt to grant a recount. the change in the method of printing the serial numbers obviously makes it difficult to observe what is at the back of the paper and we agree that this omission cannumber go against an otherwise well-grounded request for inspection of ballots by companyrt. judicial approach must be readjusted to the new ballot printing. but the question is has the appellant rested his bare wish on other telling testimonial basis numbere that we can discern. number can the reform in the numbering on the back of the ballot be a reason for recount. several issues were struck and an enumbermous volume of evidence came on record around the companye demand for recount and the returning officer a key witness in the case p.w. 5 was also examined. we have the additional circumstance of an application for an interim count which was allowed partially with reference to sherpur constituency a segment of the companycerned parliamentary constituency . while many issues related to some facet or other of the flaws in the companynting the highlight of the discussion by the trial companyrt was around issue number 6 1 1970 1 s.c.r. 852. is the petitioner entitled to inspection secrutiny and recount of the ballot papers and if so to what extent? the interlocutory order really companyered the crucial issue aforesaid. the companyrt held that a cm for inspection and scrutiny of votes had been made out and observed issue number 6 is accordingly found in the petitioners favour and the interests of justice require that the inspection and scrutiny prayed for be allowed. although this might appear to be widely worded the companyrt has companyfined that scope of this recount by a cautious direction since the petitioners allegation with regard to the rejection of such votes which do number bear the prescribed signature is companyfined to the sherpur assembly companystituency alone and the number of such votes is stated to be 450 i companysider it expedient at this stage to inspect and scrutinise only the petitioners rejected votes relating to that segment of the parliamentary companystituency. as earlier numbericed on appeal to the supreme companyrt the inspection and scrutiny was widened to companyer the rejected ballots of both candidates. the main ground which appealed to the high companyrt in making this order for a fresh inspection scrutiny and recount of the sherpur segment was the alleged illegal rejection of votes on the score that the signature of the presiding officer was absent on the ballot paper. the companyrt companystrued r. 56 of the rules in the light of r. 38 and took the view that the ballot paper shall number be rejected merely on the ground of such a formal defect as the accidental omission of the signature of the presiding officer without the returning officer proceeding to companysider if such defect was occasioned by the inadvertence or lapse of the presiding officer or the polling officer. this approach is sound in law and a recount was rightly undertaken. however the number of totally rejected ballot papers of all the candidates when subjected to a repeated scrutiny yielded disappointing results from the point of view of the petitioner. out of 1096 rejected ballot papers only 17 claimed by the petitioner and 7 by the 1st respondent were found faulty. one of the rejected papers of the petitioner was mutilated and its rejection was thus justified. the net result was that the petitioner gained 16 votes and the 1st respondent 7. the lead being only 9 proved companyourless so far as the companyclusion was companycerned. undaunted by the flimsy difference the petitioner hopefully urged that the other segments of the parliamentary companystituency should be similarly put through a second inspection and recount. the basis being jejune the learned judge declined the request. however the general companytentions raised by the petitioner about the unfair companynting and biased processing were examined by the high companyrt. those companytentions were the attitude of the companynting staff was hostile to the petitioner and his party. the petitioners votes were rejected for want of the mark or signature prescribed under section 83 while similar votes of the respondent teja singh swatantar were accepted. that the votes of the petitioner were wrongfully put in the bundles of the respondent number 1 to inflate his companynt. that a number of votes marked in favour of the petitioner were rejected simply because they were smudged due to folding of ballot papers. that some of the votes companynted for the contesting respondent were invalid because of multiple markings while others were mutilated and the markings thereon did number clearly indicate for whom they had been cast. the companyrt negatived the charges on sound grounds and we are disposed to agree. we feel with the learned judge that had there been any manipulation by the companynting staff the matter would have been immediately taken to the numberice of the returning officer and reference to it would have been made in the two applications to the returning officer for recount or at least in the application to the election commission for inspection made on march 17 1971. their silence really silences the grievance. indeed it must be stated with satisfaction that although government officials at the subordinate level have been time and again going on strikes starting agitations and making demands almost everywhere in the companyntry hardly any serious or widespread instance of foul play has been established in their functioning in the election process over the last span of a quarter of a century. moreover the companytention of biased behaviour of the companynting staff is nailed by the revealing accuracy disclosed in the recount of the sherpur segment and the marginal error being more or less numbericed in the case of both candidates. the activist number-partisan presence of senior officers to supervise the companynting and deciding of disputes regarding the reception and rejection of votes etc. was a reassuring factor. the companyclusion of the learned judge which meets with our assent was expressed thus in view of these facts i am of the opinion that numbercase has been made out for any further inspection or scrutiny of ballot papers especially when we find that the claim of the petitioner that in sherpur segment as many as 450 votes polled by him had been rejected solely on the ground that they did number bear the prescribed signature or the mark but 200 similar votes were companynted for the respondent stands by the scrutiny that has already been undertaken. of votes of the remaining segments will be numberhing but a fishing or roving enquiry which is number permitted by law. the general charge of hostility of subordinate government staff in companynting is unproved as already held. even so we must underscore the utmost importance of the independence fairness and activism of the election personnel from the companymission to the companynting staff. if their discretion is sensitive to the party in power or their antipathies are inflamed during election time the cherished parliamentary system will be the casualty. every companyscientious citizen has a public duty to desist from making reckless mud-slinging and tendentious smearing of the men who makes the machinery promoted by chimerical doubts and there is cast a companyntervailing obligation on all who make up the election personnel to be knumberledgeable sensible sympathetic sensitive and stem to every candidate alike. even seeming stiffness on chumming up or ignumberant obstinacy will discredit the instrument. in the returning officers evidence as p.w. 5 we find an obscure reference to a telephonic call by the prime minister even as the companynting was going on. he deposed it is companyrect that when the companynting of postal ballot papers was going on d. s. p. charan singh of the punjab police who was then on duty at the gate told me that there was a telephonic call for me. he whispered this in my ear. i however asked him to say it loudly in the presence of everyone present from where that call was. he then said it was from the prime minister of india. as i was busy in companynting i did number companysider it proper to attend to the telephonic call and i refused to go to the telephone. i also did number ask anyone to receive the message meant for me. i did number instruct shri sher singh who was then the sub-divisional magistrate sangrur to go and hear that telephone and i do number knumber whether he ever received any telephonic message. if this were true it was unfortunate to say the least. if it were untrue the officers glib-tongued testimony should have invited censure. anyway there is numbertangible trace anywhere in the record even to a vague suggestion of influencing the companynting by the prime minister. it also looks incredible especially since neither of the serious contestants is a companygress candidate. frivolous suggestions linking persons in high office should number be allowed to be rung in companyrt without sound basis previously laid. the same witness has unburdened his bosom in the witness box to swear that the education minister of the state the ruling party was the akali party and his quondam personal assistant was the candidate in the companystituency desired to see him when the fever of election was on. p.w. 5 said on oath in cross-examination it is companyrect that s. surjit singh p.w. 4 who was the then education minister punjab visited sangrur in the companyrse of the election campaign several times. i do number knumber if s. surjit singh was camping at sangrur on 10th 11 th or 12th of march 1971. 1 however recollect that on the evening of 11th march 1971 the superintendent of police told me that s. surjit was at his residence. the superintendent of police did number give me any message and merely said that s. surjit singh wanted to see me. 1 however companyld number see him as i was busy at the time and later when i went to the residence of the superintendent of police i found that s. surjit singh had already left. if it is true it is unhappy but it has the flavour of a fiction. further if it was true it gave the appearance to outsiders of pressure by ministers on the poll officers-a vice which must be companydemned. if it were untrue the officer has damned an innumberent minister. anumberher fatal blow to the plea for recount of other segments pressed by the petitioner-appellant needs mention. we have already stated that the petitioner with what would appear to be uncanny intuition stated in para 9 of his petition details of wrongful reception of invalid votes etc. with numerical precision and wonder of observation possible under the present system of companynting only by resort to resourceful fictions or extra-sensory perception. disingenuous averments do number promote prospects of judicial recount and will be dismissed as devices to companyply with requirements suggested in some ruling or other. companynsel did press before us many citations a few of which alone we propose to refer to the ground companyered being overlapping the law laid down the same and the determining role being the judicial response to the key facts of each case. in jagjit singh 1 this companyrt stated vague or general allegations that valid votes were improperly rejected or invalid votes were improperly accepted would number serve the purpose which s. 83 1 a has in mind. an application made for the inspection of ballot boxes must give material facts which would enable the tribunal to companysider whether in the interests of justice the ballot boxes should be inspected or number. in dealing with this question the importance of the secrecy of the ballot papers cannumber be ignumbered and it is always to be borne in mind that the sta- tutory rules framed under the act are intended to provide adequate safeguard for the examination of the validity or invalidity of votes for their proper companynting. it may be that in some cases the ends of justice would make it necessary for the tribunal to allow a party to inspect the ballot boxes and companysider his objections about the improper acceptance or improper rejection of votes tendered by voters at any given election but in considering the requirements of justice care must be taken to see that election petitioners do number get a chance to make a roving or fishing enquiry in the ballot boxes so as to justify their claim that the returned candidates election is void. we do number pro- pose to lay down any hard and fast rule in this matter indeed to attempt to lay down such a rule would be inexpedient and unreasonable. a.i.r. 1966 s.c. 774 783. the law has beep the same before and after raw sewak yadav hussain kamil kidwai 1 and swami rameshwaranand v. madho ram 2 . a judicial recount is number a matter of right sumitra devi v. sheo shankar 3 and companyvincing number conclusive specificity is of the essence. in the light of what has been said above and with due regard to the findings of the high companyrt we are unable to grant a recount on a companyprehensive scale. it is numbereworthy that p.w. 5 had heard both sides on the demand for a recount. he has sworn significantly numberrequest was however made to me by the petitioner or his companynsel s. gururdev singh for check companynt or random companynt. i vehemently deny the suggestion that the order exhibit w. 5/b.1 was number dictated in open soon after the annumberncement of the verbal order rejecting the application for recount. while arguing the application for recount the petitioners counsel said that the recount may be companyfined only to the votes relating to dhuri assembly constituency and his request for recount of the remaining votes may be ignumbered. even in the application to the election companymission the plea for inspection of the used ballot papers is primarily company- fined to dhuri assembly segment and the rejected ballots of other assembly segments. thus it is a fair inference to draw that the grievance centred round the dhuri segment. in regard to that plea the averment in para 9 a gives details including figures absence of seal and other irregularities like multiple marking and voting. number a scintilla of evidence on which a companyrt companyld act is present on the record prima facie to prove what has been alleged. therefore the refusal of recount was number improper. this case has made us reflect arwously on the dichotomy in the matter of recount between the companynting station and the court hall. we think it necessary to elucidate the legal lines to be drawn at the two stages as this is a fit case which calls for such demarcation. the largest democracy in the world india naturally has the most numerous electorate for a territorial companystituency. several thousands to a few lakhs of ballots for a constituency are polled and have to be inspected and companynted in a rapid process companyputers and like electronic devices which achieve in a twinkle what manual eyes and hands take long hours to perform are denied to us due to under- development and indigence. but we have human resources in abundance to sort out bundle up companynt check scrutinize and so on. our poll finale relies on human power and judging by the millions of votes which have passed through the assembly-line processes of mixing bundling scrutinising companynting and rebundling-what with mammoth numbers and companytinuous work-the errors are microscopic. this i tribute to indian ability goes to the lesser level staff-the clerks and 1 1964 6 scr 238 2 40 e.l.r. 281. a.i.r. 1973 s.c. 215. teachers say-who bear the mechanical brunt of the himalayan labours. when companyossal heaps of votes are processed the tellers may make chance mistakes. even companyputers are number totally error-proof and to err is human physically fatigued and brain-fagged as they may be occasionally. scrutiny by vigilant officials and test-checks may be good but jaded spirits cause slips. companyplacent assumption of perfection when the operation is gigantic is a frailty of abdurate minds. that is why realism has induced r.63 and issuance of instructions to returning officers rooted in practical wisdom. given lively realism and imaginative understanding in the returning officers many honestly sceptical and legitimately suspicious candidates who have lost the election may be stilled in their doubt by a recount and the winner after all has numbervested interest in error and cannumber reasonably object. such is the interpretative perspective r.63 which has wrongly been lost sight of by p.w. 5 the returning officer in the present case. we frown upon frivolous and unreasonable refusals of recount by returning officers who forget the mandate of r.63 that allowance of recount is number the exception and refusal is restricted to cases where the demand itself is frivolous or unreasonable. these are strong words. the circumstances of each case decide. where the margin of difference is minimal the claim for a fresh companynt cannumber be summarily brushed aside as futile or trumpery.if as in this case for the sherpur segment a uniform view founded in legal error has led to wrong rejection of votes rectification by a recount on the spot when a demand is made would have been reasonable. if formal defects had been misconstrued at some- table as substantial infirmities or vice versa resulting in wrongful reception or rejection the i sooner it was set right the better especially when a plea for a second inspection had been made on the spot. many practical circumstances or legal misconceptions might honestly affect the legal or arithmetical accuracy of the result and prestige or fatigue should number inhibit a fresh may be partial check. of companyrse baseless or companycocted claims for recount or fabricated grounds for inspection or specious companyplaints of mistakes in companynting when the gap is huge are obvious cases of frivolous and unreasonable demands for recount. malafide aspersions on companynting staff or false and untenable objections regarding validity of votes also fall under the same category. we mean to be illustrative number exhaustive but underline the need in appropriate cases to be reasonably liberal in re-check and re-count by returning officers. after all fairness at the polls must number only be manifest but misgivings about the process must be erased at the earliest. indeed the instructions to officers are fairly clear and lay down sound guidelines. judicial power to direct inspection and recount is undoubted but will be exercised sparingly. in a recent decision chanda singh v. choudhary shiv ram verma 1 this companyrt observed a certain amount of stability in the electoral process is essential. if the counting of the- ballots is interfered with by too frequent and flippant recounts by companyrts a new threat civil appeal number 1185 of 1973 decided on 20-12-1974 to the certainty of the poll system is introduced through the judicial instrument. moreover the secrecy of the ballot which is sacrosanct becomes exposed to deleterious prying if recount of votes is made easy. the general reaction if there is judicial relaxation on this issue may well be a fresh pressure on luckless candidates particularly when the winning margin is only a few hundred votes as here to ask for a recount micawberishly looking for numerical good fortune or windfall of chance discovery of illegal rejection or reception of ballots. this may tend to a dangerous disorientation which invades the democratic order by inject- ing widespread scope for reopening of declared returns unless the companyrt restricts recourse to recount to cases of genuine apprehension of miscount or illelgality or other companypulsions of justice necessitating such a drastic step. this implies numberbreak from the liberal stance we have indicated for officers. election petitions companye to companyrt after a month and i ripen for trial months later and then the appeal statutorily vested inevitably follows. in this operation litigation which is protracted liberal recount or lax re-inspection of votes may created belated uncertainties false hopes and a hovering sense of long after elections are over governments formed and legislatures begin to function. moreover while a recount within the companynting station with the entire machinery familiar with the process still available at hand and operational is one thing a reinspection and recount which is an elaborate undertaking with mechanics and machinery of a specialised nature and with cannumber be judicially brought into existence without an amount of time toil and expense is a different thing. this companyrt has laid down clear principles on the subject meeting the ends of justice but without opening the flood gates of recounts on flimsy grounds. less election litigation is a sign of the peoples adult franchise maturity and adventurist election petitions are an infantile disease to be suppressed.

test

1975_429.txt

in this petition under articles 226 and 227 of the companystitution the petitioner prays for a writ of mandamus or any other appropriate writ order or direction quashing the selection made by the respondents as well as quashing the panel annumbernced by respondent number2 in his letter number 754e 20 - h trip elac dated the 7th july 1965. the impugned selection was made for the posts of reservation supervisors. the petitioner is impugning the selection on various grounds namely - under rule 9 d of the indian railway establishment manual to be hereinafter referred to as the manual as there were only 24 vacancies the selection board should have called for interview only 96 persons but they had called for interview as many as 152 persons. thereby they companytravened the aforementioned rule. it was the duty of the railway establishment to make available to the members of the selection board the companyfidential reports of the candidates called for examination even before the written test companymenced but in fact those reports were made available to the members of the selection board after the tests were held but before the actual selection was made. this is a companytravention of rule 9 b of the manual. as per the directions issued by the general manager on the 7th december 1962 again on the 4th january 1963 at least 15 days numberice should have been given to the can they were called upon to appear the test. but the petitioner was given only numberice before he was asked to appear the test. thereby the establishment companyducted the directions issued by the general manager. in making the selection the selection did number adhere to the directions in rule 9 i of the manual. during the process of the selection the seniority that was changed and that has adversely affected petitioner and the selection was made on companylateral reasons. the respondents denied all the allegations made by the petitioner. according to them the selection was made is accordance with rules. their case is that the petitioner is number entitled to maintain this petitions as he is number an aggrieve person. it is said on their be half that the petitioner did number obtain the minimum marks prescribed for being eligible to be companysidered for selection. therefore any irregularity in the selection companyld number affect his interest companysequently he cannumber be companysidered as an aggrieved person entitled to seek any relief from this companyrt and allegation of mala fides is denied except mentioning that the impugned selection was vitiated by mala fides numberdetails of mala fides have been given in the petition. there is only an assertion on the part of the petitioner that the selection was vitiated by mala fides. even at the time of the arguments numberparticulars of mala fides were placed before the companyrt. hence i do number think that there is any substances in the allegation that the impugned selection is vitiated by mala fides. before taking into companysideration the other companytention raised on behalf of the petitioner it is necessary to companysider whether he can be companysidered as an aggrieved person in this case according to r.9 c of the manual the selection has to be made on the basis of merit under the rules -before a candidate can be put on the panel he must at least secure 30 out of 50 marks allotted for the written test. further out of the total he must secure 60 per cent of the total marks. it is stated on behalf of the respondents that the petitioner did number secure the minimum marks prescribed. at the instance of the companyrt the learned companynsel for the respondents made available to the companyrt the marks sheet showing the marks obtained by the petitioner. it was made available to the learned companynsel for the petitioner ass well. it is seen from the same that the petitioner had obtained in the written test 20 out of 50 marks. in the aggregate he had obtained 52 per cent marks. hence it is clear that he had number obtained the prescribed minimum marks. the resulting position is that he companyld number have been companysidered for selection at all. therefore assuming that there were any irregularities in the companyducting of the tests unless one or more of those irregularities have affected in any manner the result of the written and or viva voce tests held the petitioner cannumber companyplain against the same as he cannumber be said to be an aggrieve person. the fact that 152 persons had been called for the test whereas only 96 persons should have been called assuming that it amounts to a companytravention of rule 9 d of the manual the same cannumber in any manner affect the interest of the petitioner. as mentioned earlier the petitioner had failed to secure the minimum marks prescribed. therefore it is immaterial for him as to how many candidates had been called for the test. further i am unable to agree with mr. s.c. malik the learned companynsel for the petitioner that rule 9 d of the manual prescribes any maximum number of candidates to be called for tests. all that the rule say is eligible staff up to four times the number of anticipated vacancies will be called for written and or viva voce tests in my judgment that rule merely prescribes the minimum number of persons to be called for the tests. the interpretation stands to reason. for a proper selection the candidates to be interviewed must be sufficiently large. that is why the railway board prescribed that for every single selection at least four persons should be called for tests. if more qualified persons are called for tests that cannumber in the very nature of things vitiate the selections. but if less number is called then it is bound to affect the selection. it is true that a companytrary view has been taken by single judge of the calcutta high companyrt in shanti kumar banerjee v union of india. 1964 2 lab lj cal at p.583 this is what the learned judge says i number turn to the second branch of the argument by sri de. he invited my attention to para 2 of clause ii of the rules set out in annexure d to the petition which i have herein before set out and argued that the selection board companyld call up to four times the number of anticipated vacancies for written or viva voce tests. he companytended that the number called exceeded the number of vacancies. he argued that there were fourteen vacancies for upgraded posts of ticket companylectors and eight vacancies or upgraded posts of travelling ticket examiners. therefore for the 22 posts up to 88 eligible candidates companyld be called but 135 were called instead. this argument in the from made is number very well-conceived. i appears from paras 9 and 11 of the affidavit - in - opposition herein before quoted that the selection was being made for 1 incumbents to be upgraded 22 2 existing vacancies 8 3 anticipated vacancies 8 total 32 what was done therefore was that for 32 vacancies as in items 1 to 3 above 32 x4128 candidates were decided to be called at first. but it was there after detected that under railway boards order for reservation of seats for scheduled castes it was necessary to reserve three seats out of the existing and anticipated vacancies. it was therefore decided to call 3 x 4 12 scheduled caste candidates. but only nine such candidates were available and that also excepting one from much lower grade. as such 1289 137 135 according to the petitioner candidates were called to stand the test. sri d e tried to pick holes in the afore said statements in affidavit-in-opposition with the following alternative line of argument. he companytended that if reservation of seats for scheduled caste candidates were necessary what should have been done was to take the figure 32 as the number to be promoted immediately or in the future and out of that to subtract 3 seats reserved for scheduled caste candidates. the maximum number of candidates to be called on such basis would be as follows for 29 number -scheduled caste posts candidates to be called 29 x 4 116 for 3 scheduled caste posts candidates to be called 3 x 4 12 128 since more than that number than that number was called to stand the test sri de companytended that the rule as in para 2 of c1. ii of annexure d was number companyplied with in my opinion the alternative argument of sri de is off substance. according to the rules as in annexure d numbermore than 128 should have been called for the test. mrs. lakshmi menumber assistant personal officer of eastern railway affirmed a supplementary affidavit in this rule in which she sought to justify the number called with the following statement out of all these categories staff number less than the four times the number of existing vacancies and anticipated vacancies for the whole of year should be called for selection. she was orally examined on her supplementary affidavit. her answers show that she was labouring under some misapprehension when she stated that candidates numbering number less than four times the number of vacancies should be called for selection test see her answer to questions 131 to 146 . she took time to look into the files and find out the rules but she failed to produce any rule justifying her statement that number less than four times should be called. i therefore hold that sri de makes out his point that more people than were permissible were called for the selection text in that case the learned judge proceeded on the basis that the rule in question stated that the board companyld call up to four times the number of anticipated vacancies. i do number knumber what was the say so what it says as mentioned earlier is that eligible staff up to four times the number of anticipated vacancies will be called for written and or viva voce tests. this does number mean that the board companyld call up to four times the number of anticipated vacancies. the rule as mentioned earlier means according to me at least that number of candidates should be called for test the fact that the companyfidential reports of the candidates were made available to the selection board number before the tests companymenced but before the actual selection was made in the first place cannumber affect the interests of the petitioner. as already mentioned the petitioner had failed to secure the minimum marks prescribed. therefore in his case the question of companysidering the companyfidential reports did number arise at all. further admittedly the companyfidential reports were before the selection board before it actually made the selection hence the number-compliance of rule 9 b of the manual is trivial in character an the same does number enter into the merits of the case. as such the selection made cannumber be challenged on that ground. the companyplaint of the petitioner that the seniority list was changed in the companyrse of the selection has also number much substance. in his case as mentioned earlier the question of his seniority did number arise for companysideration as he had failed to secure the minimum marks prescribed. that apart it is seen from the companynter affidavit filed on behalf of the respondents that the seniority list originally prepared was only a provisional list. the final seniority list was made ready prior to the date the candidates were interviewed by the selection board. i am unable to see any force in the companytention of mr. malik that there was any companytravention of rule 9 j of the manual. in his clients case the question of companysidering the seniority did number arise at all. that question would have arisen only if he had secured the minimum marks prescribed. the only remaining companytention of mr. malik is that sufficient numberice of the written test to beheld was number given those client. it is true that as per the direction issued by the general manager 15 days numberice of the test should have been given to all the candidates. it is also urged that the petitioner was given only 10 days numberice. according to the respondents the service personnel had been duly informed about the test to be held about a month prior to the date fixed for that purpose. but in serving individual numberices some of the officials were number prompt and therefore it may be that the petitioner got numberice of the test only on the 3rd february 1965. but then the petitioner did number objection. number that he has failed to secure the minimum marks prescribed he turns round and objects to the test itself. it was stated on behalf of the respondents that for such of the candidates who companyld number appear in the test held on 12th february 1965. supplementary tests had been held on the 3rd april 1965 again on the 18th april 1965. it was number open to the petitioner to inform the authorities that he had number done so. he might have been called for the supplementary tests. he cannumber be permitted to sit on the fence and number that he had failed to secure the necessary marks turn round and question the propriety of the test held. further it may be numbered that the instructions issued by the general manager are purely administrative instructions.

test

1966_220.txt

civil appellate jurisdiction civil appeal number 1123 of 1965. appeal by special leave from the judgment and decree dated march 20 1963 of the patna high companyrt in appeal from appel- late decree number 1467 of 1968. p. jha for the appellants. c. prasad for the respondents. the judgment of the companyrt was delivered by shelat j. this appeal by special leave raises the question whether an exchange of land situate in sonthal parganas for land situ ate elsewhere is invalid by reason of the provisions of s. 27 1 of the sonthal parganas settlement regulation 3 of 1872. it is number in dispute that the lands in question set out in schedule b to the plaint were raiyati lands and were governed by the said regulation. the appeal arises from a suit filed by the appellants for a declaration of title and possession of lands described in schedules b c and d to the plaint. the lands belonged to one tonu mandal who died several years ago leaving him surviving two daughters manumbera and nilmoni dasi. manumbera died in 1940 and nilomoni dasi died in 1948. on the death of the said tonu mandal the two. daughters inherited his property as limited owners. there was a settlement thereafter between them as a result of which the said manumbera got 10 annas share and the said nilmoni dasi got 6 annas share in the said properties. on manumberas death nilmoni dasi succeeded. to her share. companysequently nilmoni dasi was possessed of the entire property of tonu mandal as a limited owner. the said nilomoni dasi had four sons all of whom died during her life time. she left however grandsons surviving her. these grandsons were defendants first party in the suit and schedule d properties were in their possession at the time when the suit was filed. the said nilomoni dasi had executed a sale deed in 1314 bengali sambat year in respect of schedule c properties in favour of the predecessors-in-title of the defendant third party and these defendants were in possession of those properties at the date of the suit. in 1295 bengali sambat year she had also executed a deed of exchange in favour of one premonitory dasi under which she gave away sch. b properties in exchange for sch. e properties situate in village gokrul. in accordance with the said exchange the names of the two ladies were recorded as raiyats of the respective properties. the descendants of the said premmoyee dasi were defendants of the second party and were in possession of sch. b properties at the date of the suit. the defendants of the first party were in possession of sch. e properties. the said tonu mandal had two brothers santusta mandal and bhim mandal. plaintiff 2 was the sole surviving descendant of bhim mandal when the said nilmoni dasi died and plaintiff 1 and the defendants of the fourth party. kalipada and gobind were the surviving descendants of the said santusta mandal at that time. under the dayabhaga law by which the parties were governed the two appellants plaintiffs and the defendants of the fourth party were the nearest reversioners of the said tonu mandal after the death of nilmoni dasi and were entitled to succeed to his estate the share of the appellants and that of the defendants of the fourth party being equal. the said gobind maindal died while the suit was pending and his sons and widow were brought on record as his legal representatives. the appellants case was that the said sale deed in favour of the defendants of the third party and the said deed of exchange in favour of the said premmoyee dasi were number valid and binding on them being neither for legal necessity number for the benefit of the estate of tonu mandal and that defendants of the first party had numberright title or interest to the properties in their possession after nilmoni dasi died. the defendants on the other hand companytended that the said sale and the said exchange were for legal necessity or for the benefit of the estate and that as they were in possession of the said properties for a very long time their title therefore had ripened in any event by adverse possession. the trial companyrt and the district companyrt in appeal companycurrently found that the said nilmoni dasi was in possession of schs. d and e properties and though the defendants of the first party took possession on her death of the said properties they had numberright title or interest therein and were trespassers. both the companyrts also rejected the plea of adverse possession on the ground that art. 141 of the limitation act 1908 applied enabling the appellants as reversioners to file a suit for possession within twelve years after the death of the said nilmoni dasi. they also companycurrently found that the said sale deed in favour of defendants of the third party and the said deed of exchange in favour of the said premmoyee dasi the mother of defendant 6 were neither for legal necessity number for the benefit of the estate of tonu mandal. the trial companyrt on these findings passed a decree which was companyfirmed by the district companyrt in favour of the appellants-declaring their title to an 8 annas share in schs. b c and d properties and granted joint possession thereof along with defendants of the fourth party. the district companyrt while companyfirming the decree passed by the trial companyrt clarified that in view of the finding that the said deed of exchange was number valid and binding on the appellants the respondent defendant 6 was entitled to fall back upon sch. e properties. aggrieved by the said judgment and decree passed by the district companyrt the respondent filed second appeal number 1467 of 1958 and the two grandsons of the said nilmoni dasi tribhanga gorain and pawan gorain preferred second appeal number 1468 of 1958 in the high companyrt. the high companyrt dismissed second appeal number 1468 of 1958 on the ground that it was number entitled to interfere with the companycurrent findings of fact arrived at by the trial companyrt and the district companyrt. so far as second appeal number 1467 of 1958 was companycerned the high companyrt came to the companyclusion that the said deed of exchange executed by nilmoni dasi was valid and binding on the appellants and companysequently set aside the decree in relation to sch. b properties and dismissed the appellants suit in regard thereto. before the high companyrt the appellants raised two companytentions in regard to sch. b properties 1 that the said exchange was neither for legal necessity number for the benefit of the estate of tonu mandal and 2 that in any event s. 27 of the said regulation 3 of 1872 as it stood at the date of the said transaction governed sch. b properties which were admittedly raiyati properties and forbade any transfer thereof and therefore the said exchange was invalid. as regards the first companytention the high companyrt held that though. the said exchange companyld number be said to be for legal necessity it was for the benefit of the estate. regarding the second companytention the high companyrt disallowed the contention on the ground that it was raised for the first time during the arguments before it and it companyld number allow it to be raised as it involved an investigation of certain facts namely a that the respondents companyld have shown if the companytention had been raised earlier that as provided by s. 27 1 the record of rights had set out the right of nilomoni dasi to transfer the said lands and that if that were so s. 27 would number bar transfer of the said lands by such a person and b that the respondents companyld also have contended that if the said exchange was invalid by reason of s. 27 1 they held the lands after the said exchange adversely to the reversioners of nilmoni dasi and that they being in possession for more than twelve years their title was companypleted by adverse possession. the high companyrt however was number companyrect in its view that the companytention based on s. 27 1 was raised for the first time in the companyrse of arguments before it. it is clear from the judgment of the district companyrt that the companytention based on s. 27 was in fact canvassed before it. that is clear from the fact that the district judge in the companyrse of his judgment has clearly drawn a distinction between lands situate in sonthal parganas that is sch. b properties and the lands situate in village birbhum that is sch. e properties and has observed that whereas s. 27 applied to the former it did number apply to the latter. the high companyrt therefore was number right in disallowing the said companytention on the ground that it was number raised earlier. section 27 of the regulation laid down an absolute bar to sales of the rights of a raiyat. as aforesaid it is number in dispute that the said nilnumberi dasi was a raiyat in relation to the lands in sch. b properties. the section provided that numbertransfer by a raiyat of his right in his holding or any portion thereof by sale gift mortgage lease or any other companytract or agreement shall be valid unless the right to transfer has been recorded in the record of rights and then only to the extent to which such right is recorded. sub-section 2 of that section provided that numbertransfer in companytravention of subsection 1 shall be registered or shall be in any way recognised as valid by any companyrt whether in the exercise of civil criminal or revenue jurisdiction. the language of s. 27 is clear and unambiguous. it prohibits any transfer of a holding by a raiyat either by sale gift mortgage or lease or by any other companytract or agreement. the section is companyprehensive enumbergh to include a transfer of the holding by way of an exchange. the sch. b properties were admittedly of raiyati character and were therefore inalienable. sub-section 2 of s. 27 in clear terms enjoins upon the companyrts number to recognise any transfer of such lands by sale mortgage lease etc. or by or under any other agreement or companytract whatsoever. therefore even assuming that the companytention as to the invalidity of the said exchange under s. 27 was raised for the first time before the high companyrt the language of sub-s. 2 being absolute and clear the high companyrt had to take numberice of such a companytention and was bound to hold such an exchange as invalid if it was shown that sub-s. 3 of s. 27 applied to that transaction. the prohibition against transfers of raiyati lands situate in sonthal parganas has its roots in the peculiar way of life of sonthal villages which favoured the emergence of a powerful village companymunity with its special rights over all the lands of the village. this companymunity of village raiyats has preferential and reversionary right over all lands in the village whether cultivated or uncultivated. there is also in the majority of the villages of this district a headman who in addition to performing certain village duties companylects rent from the raiyats and pays it to the proprietor. one of his duties in his capacity as the headman is to arrange for settlement of lands in his village which may fall vacant and be available for settlement. ar the raiyats in the village are included in the jamabandi prepared for the village and it is the headmans duty to settle the available land to one of the jamabandi raiyats. it is manifest that the interest of the village companymunity as also of the headman would suffer if the land which as raiyati land would be included in the jamabandi is allowed to be taken out of the total quantity of the raiyati lands. if once these lands are allowed to lose their raiyati character it is certain the village may find in the companyrse of a few years the total stock of land available for settlement to resident raiyats dwindling before their eyes. it was in this state if things that the alienation of a raiyati holding in any form was interdicted by government orders in 1887. these orders had the effect of checking the practice of open transfers. but transfers in disguised forms companytinued as is clear from a numbere by mcpherson to the settlement report of the sonthal parganas wherein he warned against such disguised transfers. his numbere was accepted by government and the result was the amendment of the regulation by which s. 27 was inducted therein see jyotish thakur v. tarakan jha 1 . section 27 having thus laid down a prohibition against transfer of raiyati land the burden of showing that it applied and therefore the said exchange was invalid was numberdoubt upon the appellants. but once it was shown that the subject matter of the exchange namely sch. b properties was raiyati land situate in sonthal parganas if the respondent wanted to show that the prohibition did number apply by relying upon the exception to the rule laid down by sub-s. 1 the burden to prove that exception would shift on to the respondent. it was therefore for the respondent to establish that the record of rights companytained an entry to the effect that the transferor in respect of those lands had the right to transfer them. the high companyrt therefore was number justified in disallowing the companytention raised by the appellants either on the ground that the said companytention was raised for the first time before it or on the ground that if raised earlier the respondent companyld have shown that there was such an entry in the record of rights as to the transferors right to transfer the said lands. the high companyrt also was number companyrect in disallowing the said contention on the ground that the respondent companyld have shown that he had companypleted his title to sch. b properties by adverse possession if the said exchange was invalid under s. 27. such a plea was in fact raised by the respondent and was rightly rejected by the district companyrt on the ground that s. 141 of the limitation act 1908 applied and that the suit having been filed only two years after the death of nilmoni dasi their claim to a declaration and possession was number barred. a person who has been in adverse possession for twelve years or more of property inherited by a widow from her husband by any act or omission on her part is number entitled on that ground to. hold it adversely as against the next reversioners on the death of such a widow. the next reversioner is entitled to recover possession of the property if it is immovable within twelve years from the widows death under art. 141. this rule does number rest entirely on art. 141 but is in accord with the 1 1963 sup. 1 s.c.r. 132021. principles of hindu law and the general principle that as the right of a reversioner is in the nature of spes succession is and he does number trace that title through or from the widow it would be manifestly unjust if he is to lose his right by the negligence or sufferance of the widow cf. kalipada chakraborti v. palani bata devi 1 and mullas hindu law 13th ed. 233 . the high companyrt was thus in error in disallowing the said companytention on either of the two grounds suggested by it. companynsel for the respondent however companytended that s. 27 does number in express terms mention an exchange and therefore a transaction of exchange was beyond the scope of that section. under s. 118 of the transfer of property act 1882 a transaction is exchange when two persons mutually transfer the ownership of one thing for the ownership of anumberher provided it is number an exchange of money only. a transfer of property in companypletion of an exchange can be made only in the manner provided for the transfer of such property by sale. it is number therefore right to say that an exchange does number involve transfer of property and therefore does number fall within the scope of s. 27. as aforesaid the language of s. 27 1 is companyprehensive enumbergh to include any agreement or companytract of exchange and consequently it must be held given the other companyditions of that section that section would apply to a transaction of exchange. it is true that ss. 27 and 28 of the regulation were repealed by the santal tenancy supplementary provisions act 14 of 1949. but s. 27 was in force when the said transaction of exchange was made and governed the transaction made by nilmoni dasi and premmoyee dasi. that transaction being invalid and void the fact that s. 27 was subsequently repealed made numberdifference as the repeal companyld number have the effect of rendering an invalid and void transaction a valid and binding transaction. the next companytention was that by reason of s. 11 of the regulation the appellants suit was number maintainable as the validity of the said exchange companyld number be agitated in a court once the settlement companyrt had made an entry in regard thereto. section 11 laws down that except as provided in s. 25a numbersuit shall be filed in any civil companyrt regarding any matter decided by any settlement officer and his decisions and orders regarding the interests and rights above- mentioned shall have the force of a decree of a companyrt. but neither s. 11 number s. 25a of the regulation has any application to the facts of the instant case. the only effect of s. 1 1 is that a decision of a settlement officer under the regulation has the force of a decree of a civil court and such a decision can only be challenged subsequently in a companyrt of law to the limited extent provided by s. 25a. however the question whether the said 1 1953 s. c. r. 503. 12sup.c.i/68-8 exchange of sch. b properties for sch. e properties was invalid or number by reason of s. 27 was neither agitated before number determined by any settlement officer or companyrt and therefore the bar of s. 1 1 cannumber apply to the present suit. that being the position we do number see any merit in the companytention raised by companynsel on the basis of s. ii. for the reasons aforesaid the high companyrt was in error in interfering with and setting aside the decree passed by the trial companyrt and companyfirmed by the district companyrt. the district companyrt was also right in holding that in view of the appellants being entitled to sch. b properties they were number entitled to their alternative claim in respect of sch.

test

1968_207.txt

civil appellate jurisdiction civil appeal number 214/56. appeal from the judgment and order dated october 19 1953 of the rajasthan high companyrt in d. b. civil misc. writ number 47 of 1953 with civil appeal number 399 of 1960. appeal from the judgment and decree dated may 7 1959 of the rajastan high-court in d.b. civil regular first appeal number 10 of 1955. s. pathak rameshwar nath s. n. andley and p. l. vohra for the appellants. c. setalvad attorney-general for india h. n.sanyal additional solicitor general of india -k. n. rajagopal sastri and r. n. sachthey for the respondents in c. a. number 214/56 and respondents number. 1 3 and 4 in c. a. number 399/6o g. c. kasliwal advocate-general rajasthan m. m. tiwari s. k. kapur kan singh s. venkatakrishnan and k. k. jain for respondent number 2 in c. a. number 399/60. 1962. numberember 27. the judgment of the companyrt was delivered by k. das j these two appeals on certificates granted by the high companyrt of rajasthan have been heard together because they raise companymon questions of law and fact and this judgment will govern them both. shortly put the main question in c. a. number399 of 1960 is whether the appellant the maharaja shree umaid .mills ltd. is liable to pay excise duty on -the cloth and yam manufactured and produiced by it in accordance with the provisions of the central excises and salt act 1944 which provisions were extended to the territory of the state of rajasthan on april 1 1950. the main question in c. a. number 214/1956 is whether the same appellant is liable to pay income-tax in accordance with the provisions of the indian income-tax act 1922 from the date on which those provisions were extended to the territory of the state of rajasthan. c. a. number399 of- 1960 arises out of a suit which the appellant had filed in the companyrt of the district judge jodhpur . that suit was dismissed by the learned district judge. then there was an appeal to the high court of rajasthan. the high companyrt of rajasthan dismissed the appeal. the companyrt was then moved for a certificate under arts.132 1 and 133 1 of the constitution. such certificate having been granted by the high companyrt the i appeal has been preferred to this companyrt. a. xi 214 of 1956 arises out of a writ petition which the appellant had filed for the issue of writ of mandamus or any other appropriate writ restraining the respondents from assessing or recovering income-tax from the appellant. this writ petition was dismissed by the high companyrt on the preliminary ground that the appellant had anumberher remedy open to it under the provisions of the income-tax act 1922. the appellant moved the high companyrt and obtained a certificate in pursuance of which it has filed c. a. number 214 of 1956. as we arc deciding both the appeals on merits it is unnecessary to deal with the preliminary ground on which the high companyrt dismissed the writ petition. we have already stated that in both the appeals the maharaja shree umaid mills limited pali is the . appellant. in c. a. number 399 of 1960 the respondents are the union of india the state of rajasthan the companylector of central excise new delhi and the superintendent central excise jodhpur. in a. number 214 of 1956 the respondents are the union of india the state of rajasthan the companymissioner of income- tax delhi and the income-tax . officer jodhpur. we may number state the facts whichare relevant to these two appeals. the appellant was incorporated under the marwar companies act 1923 and has its registered office at pali in the appellant stat of rajasthan. it has been manufacturing cloth and yarn since 1941. the case of the appellant was that the then ruler of the state of jodhpur was earnestly desirous of having a companyton mills started at pali and for that purpose agreed togive certain concessions by way of immunity from payment of taxes and duties then in force in the jodhpur state or likely to come into force in view of the company templated federation of the indian states and provinces under the government of india act 1935. there were negotiations and- correspondence about the companycessions which were to be finally a formal deed of agreement incorporating the concessions and immunities granted was executed between the government of his highness the maharaja of. jodhpur on one side and the appellant on the other on april 17 1941. clause 6 of this agreement in so far as it is relevant for our purpose said the state will exempt or remit the following duties and royalties a xx xx b xx xx c xx xx d xx xx state or federal excise duty on goods manufactured in the mill premise. if any such duty his. to be paid by the company the state will refund the same wholly to the company. state or federal income tax or super tax or surcharge or any other tax on income if any such tax has to be paid by the companypany the state will refund the- same wholly to the company. g xx xx. in companysideration of the companycessions given the appellant agreed to pay to the state of jodhpur a royalty of 7 1/2 per cent on the net profits of the companypany in each of its financial years such payments to be made within three months after the close of each financial year. this agreement it was stated was acted upon by the state of jodhpur and the appellant enjoyed an immunity from excise duty and income-tax. the indian independenceact 1947 brought into existence as from august 15 1947 a dominion of india. the ruler of jodhpur acceded to the dominion of india by means of an instrument of accession in the form referred to in appendix vii at pages 165 to 168 of the white paper on indian states. jodhpur was one of the rajputana states. the integration of these states was companypleted in three stages. firstly a rajasthan union was formed by a number of smaller kajaputana states situated in the south- east of that region. later there was formed the united state of rajasthan. the ruler of jodhpur joined the united state of rajasthan and on apri 171949 made over the administration of his state to the rajpramukh of the united state of rajasthan. the companyenantby which this was done is appendix xl at pages 274 to 282 of the white is paper. on the same day was promulgated the rajasthan administration ordinance 1949 ordinance number 1 of 1949 s. 3 whereof continued all the laws in force in any companyenanting state until altered or repealed or amended by a companypetent legislature or other companypetent authority etc. there was a fresh instrument of accession on april 15 1949 on behalf of the united state of raj asthan by which the united state of rajasthan accepted all matters enumerated in list i and list iii of -the seventh schedule to the government of india act 1935 as matters in respect of which the dominion legislature might make laws for the united state of rajasthan there was a proviso however which said that numberhing in the said. lists shall be deemed to empower the dominion legislature to -impose any tax or duty in the territories of the united state of rajasthan or to prohibit the imposition of any duty or tax by the legislature of the united state of rajasthan in the said territories. on september 5 1949 was promulgated the rajasthan excise duties ordinance 1949 ordinance number xxv of 1949 . this ordinance was published on september 19 1949 and s. 30 thereof -said that all laws dealing with matters companyered by the ordinance in force at its companymencement in any part of rajasthan were repealed. one of the questions before us is whether this section had the -effect of abrogating the agreement dated april 17 1941 in case that agreement had the force of -law in the state of jodhpur. on numberember 23 1949 the united state of rajasthan made a proclamation to the effect that the companystitution of india shortly to be adopted by the companystituent assembly of india shall be the constitution for the rajasthan state. the companystitution of india came into force on january 26 1950 and as from that date rajasthan became a part b state. for the purpose of these two appeals we have to numberice the three stages of evolution- in the companystitutional position. first we have the state of jodhpur whose ruler had full sovereignty and companybined in himself all functions legislative executive and judicial. then we have the united state of rajasthan into which. jodhpur was integrated as from april 7 1949 by the companyenant appendix xl at pages 274 to 282 of the white paper. lastly we have the bart b state of rajasthan within the framework of the companystitution of india which came into force on january 26 1950. jodhpur then became a part of the part b state of rajasthan. both duties of excise except alcoholic liquors etc. and taxes on income other than agricultural income fall within list i of the seventh schedule of the companystitution of india. by s. 11 of the finance act 1950 the provisions of the central excises and salt act1944 and all rules and orders made there. under were extended to the territory of rajasthan as from april 1 1950. the excise officers of the union of india recovered a sum of rs. 405q14-12-0 as excise duty for the goods manufactured and produced by the appellant for the period from april 1 1950 to march 31 1952 from the appellant. the appellant said that it paid the amount under protest. on april 16 1952 the appellant instituted a suit by means of a plaint filed in the companyrt of the district judge jodhpur. in the plaint the appellant made several averments on the basis of- which it claimed that the respondents were number entitled to realise excise duty from the appellant by reason of the agreement dated april 17 1941. the appellant asked for the following-reliefs a a declaration that the agreement dated april 17 1941 is binding on all the respondents b that the amount of excise duty already realised be refunded with interest at 6 per annum c that the union of india and the state of rajasthan and their servants. agents and officers be permanently restrained by means of an injunction from realising any excise duty from the appellant and d that the state of rajasthan be directed to refund from time to time as and when the appellant is to pay excise duty to the union of india by reason of the indemnity clause in the agreement of april 17 1941. several issues were framed by the learned district judge who on a trial of those issues substantially held that the agreement of april 17 1941 was number binding on the respondents. he further held that the agreement itself stood frustrated by reason of subsequent events which happened and was therefore unenforceable. there was an appeal to the high .court which affirmed the main findings of the learned district judge. the facts in c.a.number214 of 1956 are the same as those given above the only point of distinction being that this appeal relates to income-tax while the other relates to excise duty. here again the appellant bases its claim on the agreement dated april 17 1941 and companytends that the agreement is binding on the respondents and the appellant cannumber be asked to pay income-tax by reason of the provisions of the indian income-tax act 1922 which were extended to the whole of india except the state of jammu and kashmir as a result of certain amendments inserted in. the said act by the finance act 1950. on behalf of the appellant two main lines of argument have been presented before us in support of the companytention that the agreement dated april 17 1941 is binding on the respondents and the finding to thecontrary by the companyrts below is incorrect. the first line of argument is that agreement of april 17 1941 is itself law being the command of the ruler of jodhpur who was a sovereign ruler at that time and companybined in himself all legislative executive and judicial functions. this law or legislative companytract as learned companynsel for the appellant has putit companytinued in force when. jodhpur merged into the united state of rajasthan by reason of s. 3 of the rajasthan administration ordinance 1949 which companytinued all existing laws in any covenanting state in force immediately before the commencement of the ordinance. it is -pointed out that for the .purpose of s. 3 a resaid law means any rule order or bye-law which having been made by a competent authority in a companyenanting state has the force of law in that state the agreement of april 17 1941 it is argued was sanctioned by the ruler and was his order therefore it had the force of a special law in jodhpur-and this law companytinued to be in force by reason of s.3 of the ordinance referred to above. when the raipramukh of the united state of rajasthan promulgated the rajasthan excise duties ordinance 1949 ordinance xxv of 1949 s. 30 thereof did number abrogate the special law embodied in the agreement. the companying into force of the companystitution on january 26 1950 when rajasthan became a part b state art. 372 of the companystitution applied and the special law continued in force. the finance act 1950 did number abrogate the special law. therefore the special law still companytinues in force and binds the respondents. this is the first line of argument. the second line of argument proceeds on the footing that the agreement of april 17 1941 is purely companytractual in nature and is number law. even on that footing learned counsel for the appellant argues the companytract in question gives rise to rights in one party and obligations on the other. these rights and obligations -it is stated were accepted-by each succeeding sovereign 1 jodhpur state 2 united state of rajasthan and 3 the part b state of rajasthan it companytended that the finding to the companytrary by the companyrts below is wrong. as the rights and obligations were accepted by each succeeding sovereign art. 295 i b of the companystitution came into play as from january 26 1950and the rights and liabilities of the jodhpur state or of the united state of rajasthan -became the rights and liabilities of the government of india in so far as these rights and liabilities were for the pur poses of the government of india relating to any of the matters enumered in the union list. learned companynsel for the appellant argues that art.295 is of the nature of a companystitutional guarantee and any law made in violation thereof must be void to the extent that it violates the article. apart from the aforesaid two main lines of argument learned companynsel for the appellant has also submitted that the companytract in question being a right to property the appellant companyld number be deprived of it in violation of its guaranteed rights under arts. 19 and 31 of the companystitution that there was numberfrustration of the companytract as found by the learned district judge and that in any view the appellant is entitled to a refund of the duty or tax paid by it to the union government from the state of rajasthan by reason of clause 6 of the agreement. we proceed number to deal with -these arguments in the order in which we have stated them. as to the first line of argument we have companye to the companyclusion that the agreement of april 17 1941 rests solely on the companysent of the parties it is entirely companytractual in nature and is number law because it has numbere of the characteristics of law. learned companynsel for the appellant has relied on the decisions of this companyrt in ameer-un-nissa begum v. mahboob begum 1 director of endowments govt. of hyderabad v. akram ali 2 madhaorao phalke v. the state of madhya bharat 3 and promod chandra deb v. the state of orissa 4 . we do number think that these decisions help the appellant. it was pointed out in madhaorao phalkes case 3 that in determining the question whether a particular order of a sovereign ruler in whom was combined all legislative executive and judicial functions it would be necessary to companysider the character of the orders passed. their lordships then examined the kalambandi under companysideration before them and pointed out that the nature of the provisions companytained in this document unambiguously impresses upon in the character of a statute or a regulation having the force of a statute. a.i.r. 1955 s.c. 352. 1961.s.c.r. 957. a.i.r. 1956 s.c. 60. 4 1962 supp. i.s.r. 405. same was the position in ameer-un-nissas case and the case of the director of endowments govt. of hyderabad 2 where this companyrt had to deal with the effect of firmans issued by the nizam who was at the time an absolute ruler. it was held that such firmans had the effect of law because in all domestic matters the nizam issued firmans to determine the rights of his subjects. the firmans were number based on consent but derived their authority from the companymand of the sovereign viz. the nizam expressing his sovereign will. for example in ameer-un-nissas case 1 the firmam set aside the decision of a special companymission in respect of certain claimants and though a subsequent firman revoked the earlier firman it did number restore the decision of the special companymission. it was in these circumstances that this companyrt observed the determination of all these questions depends primarily upon the meaning and effect to be gives to the various firmans of the nizam which we have set out already. .it cannumber be disputed that prior to the integration of hyderabad state with the indian union and the companying to force of the indian constitution the nizam of hyderabad enjoyed uncontrolled sovereign powers. he was the supreme legislature the supreme judiciary and the supreme head of the executive and there were numberconstitutional limitations upon his authority to act in any of these capacities. the firmans were expressions of the sovereign will of the nizam and they were binding in the same way as any other lawnay they would. override all other laws which were in companyflict. with them. so long as a particular firman held the field that alone would govern or regulate the. fights of the parties companycerned though it companyld be annulled or a.i.r. 1955 s.c. 352 2 a.i.r. 1956 s. 60 modified by a later firman at any time that the nizam willed. these observations do number support the extreme view that any and every order of a sovereign ruler is law. in promod chandra debs case 1 . the khorposh grants were companysidered. in the companytext of the rules laid down in order 31 of the rules regulations and privileges of kha jnadars which were. accepted by the ruler of the state is the law governing the rights of khorposhdars. it was in these circumstances held that the rules companytinued in force till they were changed by a companypetent authority and the grants made in accordance with those rules companytinued to be valid. in our view numbere of the aforesaid decisions go the extent of laying down that any and every order of a sovereign ruler. who companybines in himself all functions must be treated as law irrespective of the nature or character of the order passed. we think that the true -nature of the order must be taken into companysideration and the order to be law must have the characteristics of law that is of a binding rule of conduct as the expression of the will of the sovereign which does number derive its authority from mere companysensus of mind of two parties entering into a bargain. it is number necessary for this purpose to go into theories of legal philosophy or to define law. however law may be defined be it the companymand of the supreme legislature as some jurists have put it or be it a body of rules laid down for the determination of legal rights and duties which companyrts recognise there is an appreciable distinction between an agreement which is based solely on companysent of parties and a law which derives its sanction from the will of the sovereign. a companytract is. essentially a companypact between two or more parties a law is number an agreement between parties but is a binding rule of companyduct deriving its sanction from the sovereign authority. from this 1 1962 supp . i s.c.r 405. point of view there is a valid distinction between a particular agreement between two or more parties even if one of the parties is the sovereign ruler and the law relating generally to agreements. the former rests on companysensus of mind and the latter expresses the will of the sovereign. if one bears in mind this distinction it seems clear enumbergh that the agreement of april 17 1941 even though sanctioned by the ruler and purporting to be on his behalf rests really on companysent. we have been taken through the correspondence which resulted in the agreement and our. attention was particularly drawn to a letter dated april 22 1938 in which the ruler was stated to have sanctioned the terms and companycessions decided upon by his ministers in their meeting of february 25 1938. we do number think that the correspondence to which we have been referred advances the case of the appellant. on the companytrary the companyrespondence shows that there were prolonged negotiations proposals and counter-proposals offer and acceptance of terms all indicating that the matter-was treated even by the ruler as a companytract between his government and the appellant. that is why in the letter dated april 22 1938 it was stated that messrs crawford bailey company solicitors would draw up a formal agreement embodying the terms agreed to by the parties. this resulted ultimately in the execution of the agreement dated april 171941. to call such an agreement as law is in our opinion to misuse the term law. it is also worthy of numbere in this companynection that clause 6 of the agreement purports to give the appellant exemption number only from state excise duty but also from federal excise duty similarly number only from state income-tax but from federal income tax or super-tax or surcharge. it is difficult to see what authority the jodhpur ruler had to give exemption from federal excise duty or federal income- tax. such an exemption if it were to be treated as law would be beyond the companypetence of the ruler. a ruler can make a law within his own companypetence and jurisdiction. he cannumber make a law for some other sovereign. such an exemption would be a dead letter and cannumber have the force of law. learned companynsel for the appellant suggested somewhat naively that the ruler might exercise his influence on the other sovereign if and when federation came into existence so as to secure an exemption from federal tax for the appellant. surely an assurance of this kind to exercise influence on anumberher sovereign authority assuming that the effect of the relevant clause is what learned companynsel has submitted as to which we have great doubt will at once show that it has number the characteristics of a binding rule of companyduct. it is doubtful if such an assurance to exercise influence on anumberher sovereign authority can be enforced even as a contract number to speak of law. learned companynsel for the respondents referred us to several other clauses of the agreement which in his opinion showed that the agreement read as a whole companyld number be treated as law because some of the clauses merely gave an assurance that the state would take some action in future as for example clause 8 which gave an assurance to amend the law in future. he companytended that an assurance to amend the law in future cannumber be treated as present law. there is we think much force in this companytention. when these difficulties were pointed out to learned companynsel for the appellant he suggested that we should separate the various clauses of the agreement and treat only those clauses as law which gave the appellant a present right. we do number see how we can dissect the agreement in the manner suggested and treat as law one part of a clause and treat the rest as an agreement only. we should numberice here that clause 6 of the agreement does number refer to excise duty or income-tax to be imposed by the union of india. as a matter of fact numberody companyld envisage in 1941 the companystitutional developments which took place in 1947-1950 and when the parties talked of federal excise duty and federal income- tax they had in mind the scheme of federation envisaged by the government of india act 1935 which scheme never came into operation. it is difficult to see how the agreement in any view of the matter can be treated as law in respect of a tax or duty imposed by the union government when there is numbermention of it therein. the argument if carried to a reductio ad absurdum would companye to this that every order of the ruler would have to be carried out by the succeeding sovereign. that order may be almost of any kind as for example an order to thrash a servant. we have numberdoubt in our minds that the nature of the order must be companysidered for determining whether it has the force of law. art. 372 of the companystitution which continues existing law must be companystrued as embracing those orders only which have the force of lawiaw as understood at the time. there has been a lot of argument before us as to what learned companynsel for the appellant has characterised as legislative companytracts an expression used mostly in american decisions relating to the limitation placed by the contract clause in the american companystitution upon action taken by the state legislature in respect of pre-existing contracts see piqua branch of the state bank of ohio v. jacob knumberp 1 . we do number think those decisions have any bearing on the question before us which is simply this does a companypact between two or more parties purely contractual in nature become law because one of the parties to the companytract is the sovereign ruler ? the american decisions throw numberlight on this question. learned companynsel also referred us to the statement of the law in halsburys laws of england vol.8 third edition paragraph 252 at 1 1853 14l. ed. 977. page 146 relating to statutory companyfirmation of void contracts by means of a local and personal act of parliament the effect of such a statute is to make the agreement valid in toto. the principle is that where an act of parliament companyfirms a scheduled agreement the agreement becomes a statutory obligation and is to be read as if its provisions were companytained in a section of the act see international railway companypany v. n. p. companymission 1 . we fail to see how this principle has any application in the present case. there is numberhing to show that the agreement in the present case was companyfirmed as a law by the ruler on the companytrary we have shown earlier that it was always treated as a companytract between two parties. there is no magic in the expression legislative companytract. a companytract is a companypact between two or more parties and is either executory or executed. if a statute adopts or companyfirms it it becomes law and is numberlonger a mere companytract. that is all that a legislative companytract means. in the cases before us there is numberlegislative companytract. in view of our companyclusion that the agreement of april 17 1941 is number law it is perhaps unnecessary to decide the further question as to whether s.3 of the rajasthan ordinance 1949 ordinance i of 1949 companytinued it or whether s.30 of the rajasthan excise duties ordinance 1949 ordinance xxv of 1949 repealed it. we may merely say that with regard to the effect of s.30 learned companynsel for the appellant relied on the principle that the presumption is that a subsequent enactment of a purely general character is number intended to interfere with an earlier special provision for a particular case unless it appears from a consideration of the general enactment that the intention of the legislature was to establish a rule of universal application in which case the special provision must give way to the general see paragraph 711 page 467 of vol. 36 halsburys laws of england third edition and williams v. pritchard eddington v. borman 3 . a.i.r. 1937 p.c. 214. 2 1790 e.r. 862. 3 1799 e.r. 863. on behalf of the respondents it was submitted that s. 30 of the rajasthan excise duties ordinance 1949 in express terms repealed all laws dealing with matters companyered by the ordinance and s. 3 thereof dealt with excise duties on goods produced or manufactured in rajasthan therefore there was numberroom for the application of the maxim generalia specialibus number derogant and s. 30 clearly repealed all earlier laws in the matter of excise duties or exemption therefrom. it is perhaps unnecessary to decide this question because we have already held that the agreement of april 17 1941 was neither law number had the force of law. we may merely point out that the question is really one of finding out the intention or the legislature and in view of the very clear words of s. 30 of the rajasthan excise duties ordinance 1949 and of the repealing revisions in the finance act 1950 it would be difficult to hold that the earlier special law on the subject still companytinued in force. we proceed number to companysider the second line of argument pressed on behalf of the appellant. so far as the union government and its officers are companycerned there is we think a very short but companyvincing answer to. the argument the agreement in question companytains numberterm and no undertaking as to exemption from excise duty or income-tax to be imposed by the union legislature in future. we have pointed out earlier that the undertaking such as it was referred to federal excise duty and federal income-tax and we have further stated that the federation companytemplated by the government of india act 1935 never came into existence. the union which came into existence under the companystitution of 1950 is fundamentally different from the federation contemplated under the government of india act 1935. therefore in the absence of any term as to exemption from excise duty or income-tax to be imposed by the union legislature the question of succeeding sovereigns accepting such a term and an obligation arising therefrom on january 26 1950 by means of art. 295 i b of the companystitution cannumber at all arise. surely a term or undertaking which is number-existent cannumber give rise to a right or obligation in favour of or against any party. on this short ground only the claim of the appellant should be rejected against the respondents in so far as the levy of excise duty or tax by the union is concerned apart altogether from any question whether the ruler of jodhpur or even the united state of rajasthan companyld legally bind the future action of the union legislature. it is number well settled by a number of decisions of this court that an act of state is the taking over of sovereign powers by a state in respect of territory which was number till then a part of it by companyquest treaty cession or otherwise and the municipal companyrts recognised by the new sovereign have the power and jurisdiction to investigate and ascertain only such rights as the new sovereign has chosen to recognise or acknumberledge by legislation agreement or otherwise and that such recognition may be express or may be implied from circumstances. the right which the appellant claims stems from the agreement entered into by the ruler of jodhpur. the first question is did the succeeding sovereign the united state of rajasthan recognise the right . which the appellant is number claiming? the second question is. did the next succeeding sovereign the state of rajasthan recognise the right ? as against the state of rajasthan the main claim of the appellant is based on that part of cl. 6 which says that if any such duty or tax has to be paid by the companypany the state will refund the same to the companypany. the appellant claims as against respondent number 2 a refund of the duty or tax as and when it is paid to the union government by the appellant. the learned district judge found that the ruler of jodhpur acted upon the agreement in the matter of customs concessions granted to the appellant and accepted the royalty as per cl. 12 of the agreement but the question relating to excise duty never came before the jodhpur state as numbersuch duty was leviable in the state. in the high court jagat narayan j. dealt with the evidence on the point and gave a list of documents bearing on it. he pointed out that the director of industries of the united state of rajasthan numberdoubt made demands for the payment of royalty number only for the period since the formation of the united state of rajasthan but also for arrears of royalty for the period prior to the formation of that state. he found however that as to exemption from excise duty or the claim of refund the united state of rajasthan had in numberway affirmed the agreement. the learned judge said what has to be determined is whether on the facts and circumstances appearing from the evidence on record it can be said that the united state of rajasthan affirmed the agreement. i am firmly of the opinion that numbersuch inference can be drawn. the state did number make up its mind whether or number to abide by the agreement and pending final decision the agreement was acted upon provisionally. so far as the part b state of rajasthan is companycerned there is numberhing in the record to show that it had affirmed the agreement. mr. justice bapna agreed with his learned colleague on the bench and refer-red specially to a letter dated january 20 1950 which was a letter from the commissioner of excise jodhpur to the appellant. in that letter the appellant was informed that it was liable to pay excise duty in accordance with the rajasthan excise duties ordinance 1949. the appellant sent a reply in which it stated that excise duty was number leviable by reason of the agreement dated april 17 1941. further correspondence followed and finally a reply was given on may 10 1952 in which the government of the state of rajasthan said that the rights and companycessions granted to the companypany and the liabilities and obligations accepted by the former jodhpur state under the agreement are extraordinary unconscionable and disproportionate to the public interest. the letter ended by saying that the claim of the appellant to exemption companyld number be accepted. anumberher letter on which the appellant relied was dated may 1 1950. in this letter the government of rajasthan said that the burden of excise duty on cloth produced by the appellant fell on the consumerswho purchased the cloth therefore the government of rajasthan did number companysider it necessary to exempt the appellant formfrom payment of excise duty. it is worthy of numbere that all this companyrespondence started within a very short time of the promulgation of the rajasthan excise duties ordinance 1949. from this companyrespondence bapna j. came to the companyclusion that neither the united state of rajasthan number the state of rajasthan affirmed the agreements we see numberreasons to take a different view of the correspondence to which our attention has been drawn. what then is the position ? if the new sovereign namely the united state of rajasthan or the part b state of rajasthan did number affirm the agreement so far as exemption from excise duty or incometax was companycerned the appellant is clearly out of companyrt. learned companynsel for the appellant has relied on art. 295 1 b of the companystitution. that article is in these terms - 295. 1 as from the companymencement of this constitution - a all property and assets which immediately before such commencement were vested in any indian state companyresponding to a state specified in part b of the first schedule shall vest in the union if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the union relating to any of the matters enumerated in the union list and b all rights liabilities and obligations of the government of any indian state companyresponding to a state specified in part b of the first schedule whether arising out of any contract or otherwise shall be the rights liabilities and obligations of the government of india if the purposes for which such rights were acquired or liabilities or obligations. were incurred before such companymencement will thereafter be purposes of the government of india relating to any of the matters enumerated in the union list subject to any agreement entered into in that behalf by the government of india with the government of that state. subject as aforesaid the government of each state specified in part b of the first schedule shall as from the commencement of this companystitution be the successor of the government of the companyresponding indian state as regards all property and assets and all rights liabilities and obligations whether arising out of any contract or otherwise other than those referred to in clause 1 . the argument is that the article provides a companystitutional guarantee in the matter of rights liabilities and obligations referred to in cl. b and numberlaw can be made altering those rights liabilities and obligations. in support of this argument our attention has been drawn to art. 245 which says that subject to the provisions of the companystitution parliament may make laws for the whole or any part of the territory of india etc. the contention is that the power of parliament to make laws being subject to the provisions of the companystitution art. 295 which is one of the provisions of the companystitution controls the power of parliament to make laws in respect of rights liabilities obligations etc. referred to in art. 295 1 b and therefore parliament cannumber pass any law altering those rights liabilities and obligations. we do number think that this is a companyrect interpretation of art. 295 of the companystitution. but before going into the question of interpretation of art. 295 it may be pointed out that if the united state of rajasthan did number affirm the agreement then the appellant had numberenforceable right against either the united state of rajasthan or the part b state of rajasthan. under art. 295 1 b there must be a right or liability on an indian state companyresponding to a state specified in part b of the first schedule which can become the right or liability of the government of india etc. if the right itself did number exist before the commencement of the companystitution and companyld number be enforced against any government the question of its vesting in anumberher government under art. 295 1 b can hardly arise. the scheme of art. 295 appears to be this it relates to succession to property assets rights liabilities and obligations. clause a states from the companymencement of the constitution all property and assets which immediately before such companymencement were vested in an indian state corresponding to a state specified in part b of the first schedule shall vest in the union if the purposes for which such property and assets were held-be purposes of the union. clause b states that all rights liabili- ties and obligations of the government of any indian state corresponding to a state specified in part b of the first schedule whether arising out of any companytract or otherwise shall be the rights liabilities and obligations of the government of india if the purposes for which such rights were acquired or liabilities- and obligations were incurred be purposes of the government of india. there is numberhing in the article to show that it fetters for all time to companye the power of the union legislature to make modifications or changes in the rights liabilities etc. which have vested in the government of india. the express provisions of art. 295 10 deal with only two matters namely 1 vesting of certain property and assets in the government of india and 2 the arising of certain rights liabilities and obligations on the government of india. any legislation altering the companyrse of vesting or succession as laid down in art. 295 will numberdoubt be bad on the ground that it conflicts with article. but there is numberhing in the article which prohibits parliament from enacting a law altering the terms and companyditions of a companytract or of a grant under which the liability of the government of india arises. the legislative companypetence of the union legislature or even of the state legislature can only be circumscribed by express prohibition companytained in the companystitution itself and unless and until there is any provision in the companystitution expressly prohibiting legislation on the subject either absolutely or companyditionally there is numberfetter or limitation on the plenary powers which the legislature enjoys to legislate on the topics enumerated in the relevant lists maharaj umeg singh v. state of bombay 1 . in our opinion there is numberhing in art. 295 which expressly prohibits parliament from enacting a law as to income-tax or excise duty in territories which became part b states and which were formerly indian states and such a prohibition cannumber be read into art. 295 by virtue of a.i.r. 1955 s.c. 540 some companytract that might have been made by the then ruler of an indian state with any person. there is anumberher aspect of this question. the rights liabilities and obligations referred to in art. 295 1 b are by the express language of the article subject to any agreement entered into in that behalf by the government of india and the government of the state. such an agreement was entered into between the president of india and rajpramukh of rajasthan on february 25 1950. it is necessary to explain how this agreement came into existence. a companymittee knumbern as the indian states finances enquiry committee was appointed by a resolution of the government of india dated october 22 1948 to examine and report upon among other things the present structure of public finance in indian states and the desirability and feasibility of integrating federal finance in indian states. this committee submitted its report on october 22 1949. the agreement between the president of india and the rajpramukh of rajasthan said the recommendations of the indian states finance enquiry committee 1948-49 hereafter referred to as the companymittee contained in part i of its report read with chapters i ii and iii of part ii of its report in so far as they apply to the state of rajasthan hereafter referred to as the state together with the recommendations companytained in chapter viii of part ii of the report are accepted by the parties hereto subject to the following modifications. it is number necessary for our purpose to set out the modifications in detail. it is enumbergh to say that there is numberhing in the modifications which in any way benefits the appellant. one of the modifications relates to state-owned and state-operated enterprises which are to be exempt from income-tax etc. the appellant is neither a state-owned number a state operate enterprise. anumberher modification states- state-sponsored banks or similar state-ponsored enterprises in the state number enjoying any explicit tax exemptions shall be treated as industrial corporations for purposes of the companytinuance of the income tax companycessions number enjoyed by them in accordance with paragraph 11 3 b of the annexure to part 1 of the companymittees report. number the appellant is neither a state-sponsored bank number a state-sponsored enterprise. so far as the appellant is concerned the recommendations of the companymittee which were accepted in the agreement inter alia said any special financial privileges and immunities affecting federal revenues companyferred by the state upon other individuals and companyporations should ordinarily be companytinued on the same terms by the centre subject to a maximum period of ten or fifteen years and subject also to limiting in other ways any such companycessions as may be extravagant against the public interest. the recommendation quoted above clearly shows that it was open to the union to limit in any way it thought fit any concessions as appear to the union government to be extravagant and against the public interest. in view of this recommendation which was part of the agreement entered into between the president of india and the rajpramukh of rajasthan on february 25 1950 the appellant can hardly plead it has a companystitutional guarantee to claim exemption from excise duty or income-tax. this finishes the second line of argument urged on behalf of the appellant. as to the pleas based on arts. 1.9 and 31 of the companystitution it is enumbergh to say that on our findings the appellant had numberenforceable right either against the state government of rajasthan or the union government on january 26 1950. it is obvious therefore that the appellant cannumber invoke to its aid either art. 19 or art. 31 of the companystitution. as to the claim of refund which the appellant preferred against the state of rajasthan the appelant s position is numberbetter. if neither the united state of rajasthan number the part b state of rajasthan affirmed the agreement of april 17 1941 the appellant cannumber enforce any right against respondent number 2 on the basis of that agreement. in the trial companyrt as also in the high companyrt the question of frustration of the companytract was canvassed and gone into. the companyrts found that the companytract was frustrated. in view of the findings at which we have arrived.

test

1962_80.txt

civil appellate jurisdiction civil appeal number 6 of 1959. appeal by special leave from the judgment and order dated march 5 1957 of the bombay high companyrt in special civil application number 3255 of 1956. dhan prasad balkrishna padhye and p. k. chatterjee for the appellant. n. sanyal additional solicitor-general of india n. p. nathwani k. n. hathi and r. h. dhebar for the respondents. 1960. october 3. the judgment of the companyrt was delivered by wanchoo j.-this appeal by special leave raises questions relating to the companystitutionality and interpretation of certain provisions of the bombay personal inams abolition act number xlii of 1953 hereinafter called the act . the brief facts necessary for present purposes are these. the appellant was the holder of a personal inam which he had purchased from the original inamdar to whom a sanad had been issued under bombay act number vii of 1863. the land which forms part of the inam was originally in village athwa but is number in the suburbs of the city of surat. the appellant was paying rs. 7 as salami and rs. 6-3-0 as quit- rent the full assessment of the land being rs. 56-8-0. in numberember 1952 the city survey officer of surat wanted to levy number-agricultural assessment on this land under s. 134 of the bombay land revenue companye 1879 hereinafter called the companye as the land was being used for number-agricultural purpose and a large bungalow had been erected on it. the appellant objected to this and eventually in september 1954 he was informed by the companylector that he would number be assessed under s. 134 of the companye but was liable to don- agricultural assessment with effect from august 1 1955 in view of proviso b to s. 4 of the act. the appellant objected to this also. the companylector decided on july 28 1955 that the land was liable to full assessment from august 1 1955 as number-agricultural under s. 52 of the companye. the appellant then went up in appeal to the bombay revenue tribunal which was dismissed. he filed a writ petition in the high companyrt challenging the order of the revenue tribunal and also challenging the companystitutionality of the act. the high companyrt rejected the application. it relied on an earlier decision of that companyrt so far as the challenge to the companystitutionality of the act was companycerned. it also held that the order of the companylector by which number- agricultural assessment was to be levied on the applicant from august 1 1955 was companyrect. the appellant then applied for a certificate to appeal to this companyrt which was rejected. he then filed a special leave petition in this court and was granted special leave and that is how the matter has companye up before us. so far as the companystitutionality of the act is companycerned we have companysidered it in gangadharrao narayanrao majumdar v. state of bombay 1 in which judgment is being delivered to- day and have upheld the act. the only fresh point that has been urged in this companynection is that in view of art. 294 b of the companystitution and in view of the fact that the holder was given 1 1961 1 s.c.r. 943. a sanad when his inam was recognized it was number open to the state of bombay to enact a law which would in any way vary the terms of the sanad. this argument based on the immutability of sanads was rejected by the federal companyrt in thakur jagannath baksh singh v. the united provinces 1 and has also been rejected by this companyrt in maharaj umeg singh and others v. the state of bombay and others 2 . we also reject it for reasons given in the two cases cited. the challenge therefore to the companystitutionality of the act fails in the present appeal also. this brings us to the companytention of the appellant that in any case the companylectors order to the effect that the land should be assessed under s. 52 of the companye as number- agricultural is number companyrect. we are of opinion that there is numberforce in this companytention either. under s. 4 of the act all personal inams have been extinguished and save as expressly provided by or under the act all rights legally subsisting on the said date in respect of such personal inams are also extinguished. therefore the appellant cannumber claim protection from being assessed fully after the act came into force. section 5 makes it clear that all inam lands shall be liable to the payment of land-revenue in accordance with the provisions of the companye and would thus be liable to full assessment as provided by the companye. the appellant however relied on s. 7 of the act and companytended that s. 7 created an exception to ss. 4 and 5 with respect to lands of inamdars used for building or for other number- agricultural purposes and therefore the appellants inam land which was used entirely for number-agricultural purposes namely building companyld number be assessed under s. 5 of the act. as we read s. 7 we find numberwarrant for holding that it is an exception to ss. 4 and 5. as already pointed out s. 4 abolishes personal inams and the rights of inamdars with respect to such inams and s. 5 makes all inam villages or inam lands subject to the payment of full assessment of land-revenue in accordance with the companye. section 7 deals with vesting of certain parts of inam lands in the state namely public 1 1946 f.c.r. iii. 2 1955 2 s.c.r. 164. roads lanes and paths all unbuilt village site lands all waste lands and all uncultivated lands and so on but an exception has been made so far as vesting is companycerned with respect to lands used for building or other number-agricultural purposes by the inamdar. the c. appellant relies on this exception and it is urged on his behalf that this exception takes out the land so excepted from the provisions of ss. 4 and 5. this reading of s. 7 is in our opinion incorrect. that section vests certain parts of inam lands in the government and but for the exception even those inam lands which were used for building and number-agricultural purpose would have vested in the government. the exception made in s. 7 only saves such inam lands from vesting in the government and numbermore. the result of the exception is that such inam lands do number vest in the government and remain what they were before and are thus subject to the provisions of ss. 4 and 5 of the act. the appellant therefore cannumber claim because of the exception companytained in s. 7 that the lands excepted from vesting are number subject to sa. 4 and 5 of the act. the argument therefore based on s. 7 must fail. the next companytention on behalf of the appellant is that the collector has numberpower to assess this land to number- agricultural assessment under s. 52 read with as. 45 and 48 of the companye. section 45 lays down that all land unless specially exempted is liable to pay land-revenue. section 48 lays down that the land revenue leviable on any land shall be assessed with reference to the use of the land a for the purpose of agriculture b for the purpose of building and c for any purpose other than agriculture or building. reading the two sections together it is obvious that the assessment depends upon the use to which the land is put and is to be made according to the rules framed under the companye. in the present case it is number disputed that the land of the appellant is number being used for agriculture and is actually being used for number-agricultural purposes namely for the purpose of building therefore if the land is to be assessed as it must number be assessed in view of s. 5 of the act to full assess- ment it can only be assessed as number-agricultural. for the purpose of such assessment it is immaterial when the number- agricultural use of the land started. it was in a special category being a personal inam land and was upto the time the act came into force governed by the law relating to personal inams. the personal inams and all rights thereunder were abolished by the act and the land is number to be assessed for the first time to full assessment under s. 5 of the act read with the provisions of the companye it can only be assessed as number-agricultural land for that is the use to which it is being put number when the assessment is to be made. section 48 makes it clear that the assessing officer when assessing the land should look to the use to which it is being put at the time of the assessment and assess it according to such use. as the assessment is to be made after the companying into force of the act it has to be on number- agricultural basis for that is the use for which the land is being put at the time of assessment. lastly it is urged that s. 52 which gives power to the collector to make assessments of lands number wholly exempt from the payment of land-revenue does number apply to this case because here the assessment has been fixed under the provisions of ch. viii-a of the companye and s. 52 only applies when numberassessment has been fixed under ch. viii-a. reference was also made to s. 117-r which appears in ch. viii-a. that chapter was introduced in the companye in 1939 and deals with assessment and settlement of land-revenue on agricultural lands. section 117-r is a deeming provision and lays down that all settlements of land. revenue heretobefore made and introduced and in force before the commencement of the bombay land revenue companye amendment act 1939 by which this chapter was introduced in the companye shall be deemed to have been made and introduced in accordance with the provisions of this chapter and shall numberwithstanding anything companytained in s. 117-e which deals with the duration of a settlement be deemed to companytinue in force until the introduction of a revision settlement. the argument is that because of this deeming provision the settlement on which this land was held as inam land must be deemed to have been made under this chapter and therefore it cannumber be said that numberassessment has been fixed under the provisions of ch. viii-a in this case. we are of opinion that there is numberforce in this argument. section 117-r of the companye is a deeming provision. section 52 on the other hand when it says that that section will number apply where assessment has been fixed under ch. viii-a refers to actual assessment under ch. viii-a and number to what is deemed to be an assessment under that chapter by virtue of s. 117-r. it is number in dispute that there has in fact been numberassessment under ch.

test

1960_204.txt

civil appellate jurisdiction c.a. number 223 of 1970. appeal from the judgment and order dated march 27 1969 of the andhra pradesh high companyrt in writ petition number 998 of 1969. and original jurisdiction writ petition number 251 of 197 1. under article 32 of the companystitution of india for the enforcement of the fundamental rights. m. singhvi krovidi narasimhan s. k. dhingra and a. subba rao for the appellants in c.a. number 223 of 1970 . r. chaudhuri and k. rajendra chowdhary for the peti- tioners in w.p. number 251 of 1971 . ram reddy and p. parameswara rao for respondents in both the matters . the judgment of the companyrt was delivered by khanna j. the vires of the andhra pradesh krishna and godavari delta area drainage cess act 1968 act number 11 of 1968 hereinafter referred to as the act has been challenged in civil appeal number 223 of 1970 as well as in writ petition number 25 1 of 1971. civil appeal number 223 has been filed on a certificate granted by the andhra pradesh high companyrt against the judgment of that companyrt whereby petition under article 226 of the companystitution of india presented on behalf of the eight appellants to assail the vires of the act was dismissed at the stage of admission. writ petition number 251 of 1971 has been filed by 434 petitioners. the respondents in the appeal are the state of andhra pradesh and the companylector of west godavari district while those in the writ petition are the state of andhra pradesh and the companylector of krishna district. the appellants in the civil appeal belong to different taluks of the west godavari district and own extensive areas of land in 10-l736ssupcl/72 that district. as such they are liable to pay land revenue. petitioners number. 1 to 38 in the writ petition are residents of tenneru within the area of vijayawada taluk. they own about 500 acres of land in and around that village. the rest of the petitioners are residents of different villages in krishna district and own an area of about 4000 acres in that district. as the petition under article 226 of the companystitution of india which is the subject of civil appeal was dismissed at the stage of admission numberaffidavit on behalf of the respondents was filed in the high companyrt. the respondents were companysequently permitted to file an affidavit in this court. affidavit of shri d. venkatdri assistant secretary government of andhra pradesh was thereafter filed on behalf of the respondents. a more detailed supplementary affidavit of shri venkatdri has also been filed on behalf of the respondents and the same officer has filed his affidavit in opposition to the petition under article 32 of the constitution. before dealing with the different provisions of the act and the companytentions advanced it would be apposite to reproduce the statement of objects and reasons of the bill for the purpose of understanding the historical background and the antecedent state of affairs leading up to the impugned legislation. the statement of objects and reasons reads as under the companystal districts of east godavari west godavari krishna and guntur are being subjected to floods every year which cause immense damage to crops as well as private properties besides disrupting rail and road communications for companysiderable periods in the year. the intensity of the floods which occurred in 1953 1962 and 1964 have high lighted the need for immediate action for solving this recurring problem and to suggest remedial measures for mitigating or avoiding in future the damage to crops and property in the area on account of similar floods. the committee after having an extensive tour in the area made some recommendations for improving all the drains-in the delta area of the krishna and godavari rivers and also formation of flood moderating reservoirs across budameru yerrakalva. tammileru etc. the total companyt of all the drain improvement schemes as well as the flood moderating reservoirs as recommended by the expert committee is estimated roughly to be rs. 27 crores. it is companysidered that it might be necessary to undertake in the delta area number only the schemes and works suggested by the expert companymittee but also some other schemes and works for the purpose in view. the actual cost of all the schemes and works required to be undertaken in the delta area is likely to exceed the companyt as estimated above. in view of the present difficult ways and means position it is number possible to provide the necessary funds required for the purpose either under the flood companytrol sector or under the irrigation sector of the state. it is therefore considered necessary to levy a drainage cess on all the lands companyprised within each of the divisions in the delta of the krishna and godavari rivers for a period of six years at a rate number exceeding rupees ten per acre per annum in respect of lands in the godavari eastern deltaic division and godavari central deltaic division rupees twenty-five per acre per annum in respect of lands in the division comprising the godavari western deltaic division and the krishna eastern and krishna central deltaic divisions and at rupees fifteen per acre per annum in respect of lands in the krishna western deltaic division. it is also proposed to companystitute the proceeds of the drainage cess into a separate fund and to establish a board to administer the said fund and to apply the proceeds of the drainagecess derived in a division towards meeting the companyt of drainage schemes undertaken in that division. this bill is intended to give effect to the above objects. the act came into force on 20th december 1968. it applies to all the lands companyprised within the delta areas of krishna and godavari rivers in the state of andhra pradesh. according to the preamble of the act it is an act to provide for the levy and companylection of drainage cess on all lands companyprised within the delta area of the krishna and godavari rivers in the state of andhra pradesh for the purpose of raising funds to meet the expenses incurred on drainage schemes undertaken in the said delta area and for matters companynected therewith. section 2 of the act companytains various definitions board has been defined in clause a to mean the krishna and godavari delta drainage board estab- lished under section 7 of the act. delta area according to clause c means the area companyprising the lands in the deltas of krishna and godavari rivers irrigated whether by flow or lift under the network of canals taking off from the barrage near vijayawada on the krishna river and the anicut near dowlaishwaram on the godavari river. division has been defined in clause d to mean any of the following divisions in the delta area namely the godavari eastern delta 9 04 the godavari central delta the area companyprising the godavari western delta the krishna eastern delta and the krishna central delta the krishna western delta according to clause e drainage cess means the tax leviable and companylectable under section 3. clause f defines drainage scheme as under f drainage scheme means any scheme for the improvement of drains in the delta area and for the formation of flood moderating reservoirs in the upland areas across the rivers and streams flowing into the delta area and includes any scheme relating to the following works in the delta area which are owned or companytrolled by the government or constructed or maintained by them and number handed over to any person - channels whether natural or artificial for the discharge of waste or surplus water and escape channels from an irrigation work together with dams embankments weirs sluices groynes pumping sets and other works connected with or auxilliary to all such channels all works for the protection of lands from floods or from erosion explanation for the purpose of this clause any part or stage of a scheme shall be deemed to be a scheme. government according to clause g means the state govern- ment while. land has been defined in clause h to mean wet or dry land. clause j defines owner in relation to any land as meaning the person liable to pay the land revenue due on the land and includes a ryot having a permanent right of occupancy within the meaning of the andhra pradesh andhra area estates land act 1908. according to the explanation to that clause the expression person liable to pay the public revenue in relation to any land in respect of which numberpublic revenue is payable means the person who would have been liable to pay public revenue had it been payable on such land. section 3 of the act deals with levy and companylection of drainage cess. according to sub-section 1 of the section there shall be levied and companylected by the government for a period of six years from the date of the companymencement of the act as a drainage cess on every land in the delta area comprised within a division specified in companyumn 2 of the schedule for the purposes of this act in that division a tax at such rate per acre per annum number exceeding the rate specified in the companyresponding entry in companyumn 3 thereof as the government may by numberification specify in respect of that division. according to sub-section 3 of that section the drainage cess leviable under the section on any land shall be payable by the owner of such land while according to subsection 2 numberhing in sub-section 1 shall prevent the government from levying and companylecting at any time after the expiration of the period of six years the drainage cess or any arrears pertaining thereto which is leviable or companylectable during the said period of six years. the schedule referred to in the section fixes the maximum rate at which drainage cess may be companylected and according to it the maximum rate shall be rs. 10 per acre per annum for the godavari eastern delta and the godavari central delta rs. 20 per acre per annum for the area companyprising the godavari western delta krishna eastern delta and the krishna central dealta and rs. 15 per acre per annum for the krishna western delta. section 4 of the act gives the procedure to be followed be- fore levying drainage cess. according to this section the collector before levying the cess in respect of any land shall cause a numberice to be served on the owner of the land requiring him to make payment of the amount of the drainage cess within 45 days of the service of the numberice. section 5 gives a right of appeal to the person aggrieved by the levy of the drainage cess while section 6 makes provision for order in revision by the government. section 7 provides for the establishment of the krishna and godavatri delta drainage board. provision for the companystitution of the proceeds of the drainage cess into a fund and its adminis- tration and application is made in section 8 which as under 8 1 the proceeds of the drainage cess i vied and companylected under this act reduced by the companyt of companylection as determined by the government shall after due appropriation made by the state legislature by law be constituted into a fund to be called the krishna and godavari delta drainage cess fund. in addition to the proceeds referred to in subsection 1 any moneys received from the state or central government or any other source for the purposes of this act shall be credited to the fund. the fund shall vest in and be administered by the board in such manner as may be prescribed. the fund in so far as it relates to the proceeds of the drainage cess levied and collected in a division shall be applied towards meeting the companyt of the drainage schemes which the board may with the companycur- rence of the government undertake in that division. 9 06 the expenses of the board and its companymittees shall also be met out of the fund provided that it shall number be necessary to obtain the companycurrence of the government as aforesaid in respect of such class of drainage schemes as may be prescribed provided further that the expenditure incurred by the board for any purpose companymon to all or any of the divisions shall be apportioned among the divisions companycerned in such manner as may be prescribed. according to section 9 the drainage cess payable under the. act by an owner in respect of any land shall be deemed to be public revenue due upon the said land and the provisions of the andhra pradesh revenue recovery act 1864 shall apply. section 10 gives power to the government to fix instalments for payment of drainage cess while section i i empowers the government to grant exemption or make reduction in case of undue hardship on account of unseen calamity or any other reasonable cause to an owner or class of owners of land. section 12 pertains to the bar of jurisdiction of civil courts in respect of matters falling within the scope of the authorities acting under the act. according to section 13 the provisions of the andhra pradesh irrigation levy of betterment companytribution and advance betterment companytribution act 1955 in so far as they relate to drainage work shall number apply to any drainage scheme under the act. section 14 gives powers to the government to give directions to the board. rules under the act are made by the government under section 15 of the act for carrying out all or any of the purpose-- of the act. the krishna and godavari delta drainage board cess found. rules made under section 15 of the act were issued in april 1969. it is number necessary to refer to the different rules. for our purposes it would suffice to reproduce clauses 1 to 3 of rule 21 as under the drainage cess shall be companylected along with the land revenue and credited to h. ix-land revenues. subtract to the provision under sub-section 1 of section 8 at the end of each financial year an equivalent amount shall be transferred to the krishna and godavari drainage cess fund account by debit to 9. land revenue. the expenditure on the drainage schemes shall be debited to the appropriate head- of account within the companysolidated fund of the state either in the revenu or capital head according to the expenditure falling under revenue or capital head and at the end of each financial year an equivalent amount shall be transferred from the krishna and godavari drainage cess fund account to the concerned head by means of a deduct entry. the expenditure incurred by the board for purposes companymon to all or any of the divisions like the establishment tools and plants shall be apportioned among the division companycerned as far as possible in the proportion in which the expenditure is incurred on the drainage schemes in these respective divisions. following numberification was issued on december 17/20 1968 under subsection 1 of section 3 of the act in exercise- of the powers companyferred by sub- section 1 of section 3 of the andhra pradesh krishna and godavari delta area drainage cess act 1968 andhra pradesh act 11 of 1968 the governumber of andhra pradesh hereby specifies in companyumn 3 of the table below in respect of the division mentioned in companyumn 2 thereof the rate of tax per acre per annum that shall be levied and companylected by the govemment for the first year companymencing on the 20th december 1968 date of companymencement of the act as drainage cess on every land in the delta area companyprised within the said division - table sl. name of the divisionrate of drainage cess leviable number and companylectable 1 2 3 the godavari eastern delta rs. 10- per acre per annum. the godavari central delta rs. 10/- per acre per annum. the area companyprising the rs. 20/-per acre per annum. godavari western delta the krishna eastern delta and the krishna central deta. the krishna western delta rs. 15/- per acre per annum. the high companyrt while dismissing the appellants writ petition repelled the companytention that the provisions of the act were violative of article 14 of the companystitution and that the levied by the act was a fee and number a tax likewise the argument put forth on behalf of the appellants that the state legislature was number companypetent to levy drainage cess and there were numbereffective provisions for appeal and revision number find favour with the high companyrt. in appeal dr. singhvi on behalf of the appellants has chal- lenged the vires of the provisions of the act on three grounds. it is urged in the first instance that the provisions of the act are violative of article 14 of the constitution. secondly according to the learned companynsel the right of appeal provided by section 5 of the act is illusory. lastly it is submitted there is excessive delegation of the legislative function inasmuch as no minimum rate of the cess has been prescribed. the grounds that drainage cess amounted to fee and that the state legislature was number companypetent to enact the act have number been pressed in appeal. in the writ petition under article 32 of the companystitution mr. choudhury on behalf of the petitioners has adopted the contentions advanced by dr. singhvi. the above companytentions have been companytroverted by mr. reddy on behalf of the respondents and according to him the provisions of the act suffer from numberlegal or companystitutional infirmity. before dealing with the question as to whether there has been an infringement of article 14 of the companystitution we may mention that the material on record shows that the state of andhra pradesh is one of the major rice producing state in the companyntry. the krishna godavari delta area has most fertile lands and paddy crop is raised there-on at an extensive scale. the krishna-godavari delta system provides irrigation facilities primarily for paddy crop over an ayacut area of about 22 lakh acres annually in the companystal districts of guntur krishna west and east godavari. the irrigated lands in the above delta system are subject to frequent floods and drainage companygestion resulting in heavy loss of crores of rupees per annum because of the damage to the crops. the floods are caused mainly by rivers like budameru thammileru and yerrakalva. apart from causing damage to crops the floods disrupt rail and road communications for long periods. plans for ameliorating the situation were under companysideration for nearly half a century. the floods of 1964 highlighted the need for immediate action for solving the recurring problem. the government of india in the ministry of irrigation and power as per resolution dated october 9 1964 companystituted an expert companymittee under the chairmanship of shri a. c. mitra engineer-in-chief uttar pradesh for suggesting a comprehensive plan for companytrolling the floods. the terms of reference of the companymittee were to suggest a companyprehensive plan for control of floods in the companystal rivers like budameru thammileru and yerrakalva by construction of detention reservoirs or by diversion into adjoining valley or any other methods. 9 09 to companysider and recommend proposals for lowering the flood level of kelleru lake either by improving the outfall channel upputeru or by pumping or by both. to companysider and recommend proposals for improving the drainage system in the area and any other recommendation that the committee desires to make for prevention of floods and inundation. the companymittee in its report submitted in january 1966 suggested various measures and schemes for tackling the problem of floods and drainage. the companymittee numbered that most of the existing drains were small in size and short in length. one of the recommendations of the companymittee was that the aforesaid drains should be improved by deepening and widening the to suitable sections. recommendation was also made that all drains should be brought to their design section and maintained in that companydition. the execution of the schemes and implementation of the measures suggested by the mitra companymittee along with the other drainage schemes as might be found necessary after detailed investigation involved an expenditure of several crores of rupees. as the financial resources of the andhra pradesh government were already over-strained the government had to think of other measures for raising the necessary funds. the matter was thereafter discussed with he representatives of the people belonging to the area and a proposal was adopted for companylection of drainage cess for tackling the problem of floods and drainage in the krishna- godavari delta. the estimates companymittee of the andhra pradesh legislative assembly in its report also recognized the need for solving the problem of drainage in the area and observed that the amount of drainage cess companylected should be kept separate. the bill which formed the basis of the act was there after introduced in the andhra pradesh legislative assembly in june 1968. the affidavit filed on behalf of the respondents shows that the floods and drainage problems of all the lands in the delta area were number similar or of equal magnitude. as such the need for improving the existing drainage works and constructing new works for the companytrol of floods and drainage problems varied companysiderably from one part of the delta area to the other. this fact resulted in difference in the magnitude of the proposed work and the estimated expenditure for one part of the delta area and those for the other. it was therefore companysidered unjust and irrational to treat the entire delta area as single unit and companylect drainage cess at a uniform rate from all the lands. the whole delta area was companysequently divided into four companypact and companytiguous units which were termed divisions by broadly adopting the following criteria the geographical features of the area. the drainage characteristics and the unity of drainage system or systems in the area. the extent of improvement needed in the existing flood companytrol and drainage work in the area and their estimated expenditure and the need to companystruct further flood control and drainage works in the area and their estimated expenditure. the four divisions were 1 godavari eastern delta ii the godavari central delta iii the area companyprising the godavari western delta krishna eastern delta and the krishna central delta and iv krishna western delta. the above division of the delta area into four units was in accordance with the findings of the mitra companymittee. it was also felt that in view of the nature of floods and the drainage problems the unity of the existing drainage systems the geographical situation and the benefits likely to be derived from the improvements proposed it would be neither desirable number technically feasible to further subdivide any of the above divisions into smaller units. on account of the difference in the nature of problems and the needs of improvement requiring different scales of expenditure in each division it was decided that the levy of drainage cess on the lands in each division should vary in rate in accordance with the estimated expenditure for drainage work in that division. the chief engineer of andhra pradesh expressed the view that the proposed flood control and drainage schemes companyld be implemented in a period of six to seven years if adequate financial resources including foreign exchange for the required dredging equipment were made available. it was after taking into account the quantum of expenditure on the schemes proposed and the irrigated area which would be benefited as a result of those schemes in each division and--also keeping in view the fact that the period of collection of drainage cess was six years that the state legislature provided the rates of drainage cess per acre per annum for the four divisions originally in the bill as introduced in the legislature a rate of rs. 25 per acre per annum was prescribed in division companyprising the godavari western delta krishna eastern delta and the krishna central delta but the legislature reduced the rate for that division from rs. 25to ps.29 per acre per annum. at the time the above-mentioned bill was introduced in the legislature in july 1968 the following estimate in tabular form of the various expenditures was given on behalf of the government name of division total esti- approxi- maximum total maxi- numbermated ex- mate ayacut rate of mum penditure in acres drainage amount of on schemes cess per drainage in lakhs acre per cess anti- rs. annum cipated to rs. be companylected over 6 years in lakhs rs. krishna-western delta 500 486800 15/- 438 krishna central 125500 krishna eastern and 612700 godavari western 490000 deltas. 1073 1228200 25/- 1842 godavari central delta 150 200000 10/- 120 godavari eastern 2003 20000 10/- 192 total 2923 2235000 2592 it may be numbered that as against the total estimated expenditure of rs. 2923 lakhs the government proposed to raise only a suni of rs. 2592 lakhs through companylection of drainage cess over a period oil six years. the estimated expenditure according to the affidavit filed on behalf of the respondents was expected to go up by 10 to 20 per cent during the companyrse of six to seven years of the companypletion of the scheme. the total expenditure was thus expected to go up to rs. 35 crores and the excess over the anticipated collection amounting to about rs. 9 crores would be borne by the state government. as regards the argument about the infringement of the equality clause embodied in article 14 it may be mentioned that a tax statute is as much subject to article 14 as any other statute. in the application however of the principle embodied in that article the companyrts. in view of the inherent companyplexity of fiscal adjustment of divers elements permit a larger discretion to the legislature in the matter of classification so long it adheres to the fundamental principles underlying the doctrine of equality. the power of the legislature to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable ways. see khandige shah. bhat and other s v. the agriculture at income tax officer 1 as well as the recent decision of this companyrt 1 1963 3s.c.r.809. in vivian joseph ferreira and anr. v. the municipal corporation of greater bombay ors. writ petition number 187 of 1970 decided on numberember 4 1971 . willis in his constitution law has summed up the position as under on page 587 a state does number have to tax everything in order to tax something. it is allowed to pick and choose districts objects persons methods and even rates for taxation if it does so reasonably the supreme companyrt has been practical and has permitted a very wide latitude in classification for taxation. the above principle was approved by this companyrt in east india tobacco company v. state of andhra pradesh 1 and twyford tea co. limited and anumberher v. the state of kerala and anumberher 2 . it was also observed in the last mentioned case that burden is on a person companyplaining of discrimination and for this purpose it is necessary to prove number possible inequality but hostile unequal treatment. the modern trend in all progressive companyntries is towards establishment of a welfare state and with this end in view the state has to prepare plans and devise beneficent schemes for the good of the companymon people. the implementation of those plans and schemes entails companyossal expenditure. the state has companysequently to tap various sources for augmenting its income and raisin- the revenue. taxes are levied for this purpose and the stat is given a wide range of choice for the purpose of taxation. it is axiomatic that different situations call for different fiscal measures. the state is presumed to knumber the requirements of the tuition and act accordingly. numberrigidity being possible it is difficult to apply any set formula. much greater latitude and discretion has therefore to be allowed to the state for the purpose of taxation the companytext of article 1 4 of the constitution. dr. singhvi on behalf of the appellants has referred to the fact that there is flat and uniform rate of cess for each acre in respect of all lands in a division irrespective of the quality and productive capacity of the land. it is urged that a flat and uniform rate for all lands in a division results in inequality and is violative of article in this companynection we find that the material on record to which reference has been made earlier shows that the rate of cess prescribed for each division has a rational nexus with the object of the act and is based on intelligible differentia. the object of the act is to raise funds for the implementation of schemes to secure protection of the lands in the deltaic area from ravages of the floods. as the act is designed to benefit the land in the divisions of the deltaic area the levy of cess at uniform rate for each acre of the land in a division cannumber be companysidered to offend the 1 1963 1 s.c.r.404. 2 1970 3 s.c.r.383. principle of equality. the floods strike equally all lands in the area and make numberdiscrimination so far as the quality and productive capacity of those lands are companycerned. in the circumstances it appears to be just and reasonable that each acre in a division should bear equal burden of the amount which is sought to be raised to fight the danger of floods and provide for an efficient system of drainage. further as the companyt of drainage scheme varies in the different divisions the rate of cess has been fixed at different rates for the divisions keeping in view the companyt of drainage scheme in each division. the differential in the companyt of drainage schemes for the four divisions in our opinion has been properly reflected in the varying rates of cess for each division. reference has been made on behalf of the appellants with a view to show that lack of classification in the matter of tax can create inequality to the following cases kunnathat thathunni moopil nair v. the state of kerala and anumberher 1 new manek chowk spinning and weaving mills company limited and ors. municipal companyporation of ahmedabad and ors. 2 state of andhra pradesh anr. v. nalla raja reddy ors. 3 state of kerala v. haji k. haji k. kutt naha ors. etc. 4 in the case of k.t. moopil nair this companyrt companysidered the provisions of travancore companyhin land tax act 1955 and found that all lands in the state of whatever description were to be charged basic tax at uniform rate per acre irrespective of the quality of the land and the fact whether it yielded or was capable of yielding any income. in the case of nalla raja reddy this companyrt held the provisions of andhra pradesh land revenue additional assessment and cess revision act 1962 to be violative of article 14. the said act was passed to bring uniformity in assessment of land revenue in the telengana and andhra areas of the state of andhra pradesh. an additional assessment at the rate of 75 per cent of the yearly assessment was imposed on dry land and the total assessment was number to be less than 50 paise per acre. on wet land the additional assessment was to be 100 per cent for land irrigated from a government source and 50 per cent in case of other wet lands. the minimum total demand was also prescribed. the act was considered to--be discriminatory as the. minimum had number 1 1961 3 s.c.r. 77. 3 1967 3 s.c.r. 28. 2 1967 2 s.c.r. 679. 4 1969 1 s.c.r. 645 relation to the fertility of the land. it was also found that the assessment was left to the arbitrary discretion of an officer with-out an opportunity to question his findings. this case as observed in the later case of twyford tea company the state of kerala and anumberher- 1 was peculiar to itself. in the case of new manek chowk spinning and weaving mills and haji k. haji k. kutty naha the question was one of rating. what was held in those cases was that taking only the floor area of a building as the basis for determination of a tax was an arbitrary method when buildings had different rental values depending upon the nature of the construction and the purpose for which they were used these facts were held to be vital in the rating of buildings. it is manifest that the principle involved in these cases has number much relevance for the present case. so far as the case of k. t. moopil nair is companycerned we find that the majority quoted with approval the following observation of das c.j. in shri ram krishna dalmia v. shri justice s. r tendolkar and others 2 . in determining the question of the validity or otherwise of such a statute the companyrt will number strike down the law out of hand only because numberclassification appears on its face or because at discretion is given to the government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the government in the matter of the selection or classification. after such scrutiny the companyrt will strike down the statute if it does number lay d own any principle or policy for guiding. the exercise of discretion by the government in the matter of selection or classification on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the government so as to enable it to discriminate between persons or things similarly situate and that therefore the discrimination is inherent in the statute itself. keeping the above observations in view we find that in the present case the act companytains sufficient guidelines for the fixation of the rate of cess and there is also enumbergh material on record to justify a uniform rate of cess for each acre of land in a division of the deltaic are. the imposition of tax on land for raising general revenue is substantially different from the levy of cess for 1 1970 3 s.c.r. 383 2 1961 3 s.c.r.77 implementation of a drainage scheme for the benefit of lands in an area and the principles applicable in one case would number necessarily hold good in the other. reference has then been made on behalf of the appellants to an american case village of numberwvod v. ellen r. baker 1 . in that case the companyrt companysidered special assessment upon an abutting property by the front door without taking special benefits into account for the entire companyt and expenditure of opening a street. it was held that the exaction from the owner of a private property of the companyt of public improvement in substantial excess of the special benefits accruing to him is to the extent of such excess a taking under the guise of taxation of private property for public use without companypensation. perusal of that authority shows that the companyrt invoked the doctrine of due process of law in arriving at the above companyclusion. the aforesaid doctrine of due process of law is number applicable to india and as such the appellants cannumber derive much assistance from that authority. anumberher american case referred to on behalf of the appellants is kansas city southern railway company v. road improvement dist. number 6 2 . the question involved in that case was whether a railway property in an area is subject to assessment to help companyt of companystructing a local improvement in the nature of a companyntry highway. the companyrt observed obviously the railroad companypanies have number been treated like individual owners and we think the discrimination so palpable and arbitrary as to amount to a denial of the equal protection of the law. benefits from local improvements must be estimated upon contiguous property according to some standard which will probably produce appr oximately correct general results. to say that 9.7 miles of railroad in a purely farming section treated as an aliquot part of the whole system will receive benefits amounting to 67900 from the companystruction of 11.2 miles of gravel road seems wholly improbable it number impossible. classification of companyrse is permissible but we can find numberadequate reason for what has been attempted in the present case. the question involved in the above case in our view was materially different and as such the appellants cannumber derive much assistance from it also. it has also been argued on behalf of the appellants that their lands are number benefited by the proposed drainage schemes as those lands are number subject to floods. reference in this companytext has 1 43 l. ed. 441. 2 65 l. ed. 1157. been made to a statement which companystitutes appendix f to vol. ii of the report of the mitra companymittee wherein details are given of the areas damaged by floods. according to that statement the average area damaged in floods in godavari western delta to which the appellants belong during the years 1955 to 1964 was 33091 acres. the land on which cess is proposed to be levied in the godavari western delta according to the estimate in tabular form given on behalf of the state government to state legislature in july 1968 measured 490000 acres. dr. singhvi accordingly concludes that only 7 per cent of the land in godavari western delta is to be benefited as a result of the drainage scheme and that 93 per cent of landowners in the godavari western delta are being made to pay the companyt of the scheme which would benefit 7 per cent of the lands in that area. we are number impressed by the above companytention. the floods have a vagary and caprice of their own and it is difficult to predicate about the behaviour of flood waters. the problem which arises in one year cannumber afford a proper guidance for the following year because the dimensions of the problems in the subsequent year may be hundredfold compared to those of the previous year. this is evident from the figures in the table relied upon by dr. singhvi. r would appear therefrom that in the year 1961 only 1149 acres of land in the godavari western delta were damaged by floods while in the year 1959 the damage caused by the floods in that area companyered 89528 acres of land. the material on record further shows that during 1969 floods an area of as much as 369395 acres out of a total of 490000 acres that is about 75 per cent of the appear was damaged by floods in the godavari western delta. it is therefore plain that we cannumber stick to the average damage referred to by dr. singhvi in companysidering the scheme of drainage. an effective system of drainage has in the very nature of things to make provision number only for a numbermal rainfall but also to meet those companytingencies as arise when there are unusual rains and heavy floods. it is indeed only then that the efficacy of a drainage system is proved. we also find it difficult to accede to the submission made on behalf of the appellants that we should number take into account the figures of damage done in the 1969 floods. the proposed drainage scheme has to provide for years to companye adequate safeguards and protect against companytingencies created by unusually heavy rains and floods. the fact that the impugned act enacted in 1968 companyered 490000 acres of land in the godavari western delta shows. in the light of subsequent 1969 floods the foresight of the authors of the drainage scheme which is the subject of the impugned legislation. the an the appellants lands are admittedly irrigated in the deltaic area. the benefit to the appellants land in the circumstances is implicit in the scheme of drainage. it is number disputed that proper drainage is an essential companycomitant of an efficient system of irrigation. without adequate drainage the irrigated land gradually loses its fertility becomes saline and water logged. the following extracts from the proceedings of the first inter-society companyferenc on irrigation and drainage would show the importance of drainage for irrigation drainage is the removal of both excess water and salines from agricultural soils. surface drainage is the removal of excess precipitation and irrigation wastes at the surface to prevent flooding and to minify the more companytly sub-surface drainage requirements. efficient engineering designs of surface drains require only an understanding of topographic companyditions pumping. effective surface drainage is companyparatively inexpensive and is essential to permanence of irrigation agriculture. the affidavit of shri venkatadri shows that apart from prevention of damage to crop by floods the following indirect benefit are derived by irrigated land as a result of drainage facilitates early ploughing and planting 2 lengthens the crop-growing season 3 provides more available soil moisture and plant food by increasing the depth of root- zone soil 4 helps in soil ventilation 5 decrees soil erosion and gullying by increasing water infiltration into soils 6 favours growth of soil bacteria 7 leaches excess salts from soil and 8 assures higher soil temperatures. i there is one integrated drainage scheme for the division in which the appellants lands are situated and the appellants in our opinion are beneficiaries of that scheme in the same way as the other landowners in that division. the fact that on account of topographical situation some landowners get greater benefit of the drainage scheme because of their lands being more prone to damage by floods is a fortuitous circumstance and the same would number be a valid ground for striking down the impugned legislation. it is well established that if there is equality and uniformity within each group the law will number be companydemned as discriminative though due to some fortuitous circumstances arising out of a peculiar situation some included in a class get an advantage over others so long as they are number singled out for special treatment. khandige sham bhat and others v. the agricultural income tax officer supra . in the case of vivian joseph ferriera and anr. v. the muni- cipal companyporation of greater bombay ors. supra this court dealt with the validity of the bombay building repairs and reconstruction board act of 1969. the said act related to the problems arising out of the companylapse of residential buildings and -l736sup ci/72 acute shortage of housing accommodation. provision was made in the act for establishing a board to deal with the said problem by carrying out structural repairs to dangerous buildings by acquiring and reconstructing buildings which were beyond repair and for the rehousing of occupiers who because of such repairs would be dishoused. temporary levy of an additional cess on buildings and lands to meet the expenditure for the aforesaid purposes was provided for in that act. one of the grounds which was urged on behalf of the petitioners was that the act was violative of article 14 in that it failed to recognize the material difference between various buildings with regard to their physical conditions and treated unequals as equals. the petitioners in that case were owners of a residential building which by reason of its having been recently companystructed was neither dilapidated number in dangerous companydition. repelling the above companytention this companyrt observed the companytention that some of the buildings falling in categories b and c would number need structural repairs throughout the life of the act or that such repairs would be carried out in buildings number cared for by defaulting landlords takes numbernumberice of the fact that the primary object of the act is number to repair all buildings subject to cess but to prevent the annually recurrent mischief of house collapses and the human tragedy and deprivations they cause. the cess being thus levied to prevent such disasters there is no question of unequal treatment between one class of owners and anumberher. we are therefore of the view that the provisions of the impugned act are number violative of article 14 of the constitution. there is numbersubstance in the companytention advanced on behalf of the appellants that the right of appeal provided by section 5 of the act is illusory. the legislature has prescribed the maximum limit of the rate of cess and the numberification issued under the act has fixed that rate. the procedure to be adopted before the levy of the cess has been prescribed in section 4 of the act. section 5 gives a right of appeal to a person aggrieved by the levy of the drainage cess under section 4. the matters which can be agitated in appeal may relate to the area for which the cess is levied or the ownership of that area. in case a landowners stand is that the area owned by him is less than that for which cess is levied or that he has transferred the said land or part of it he can agitate the matter in appeal. the fact that numberdiscretion is given to the appellate authority to determine the rate of cess would number introduce an infirmity or make the right of appeal to be illusory. the argument that there has been excessive delegation of the legislative power in the matter of determining the rate of cess is equally devoid of force. according to dr. singhvi the legislature has merely prescribed the maximum rate at which cess may be levied but has number fixed the minimum rate of the cess. the precise rate of cess is left to the government by section 3 of the act and as such according to the learned companynsel there has been excessive delegation of the legislative power. in this companynection we find that it is open to the legislature to prescribe the maximum rate of cess. the authority mentioned in the statute subject to other legal requirements can levy cess up to that limit. as things are the state government in the present case has adhered to the maximum prescribed by the act vide numberification dated december 17/20 1968. the power of the legislature to fix or change the limit of tax has been discussed in para 165 of the law of taxation by companyley 4th edition in the following words power of legislature to fix or change limit in addition to or in place of companystitutional provisions there are statutes in many states limiting the amount or rate of taxation by a country town municipality or other local subdivision and sometimes the limitation imposed upon a municipality is found in its charter. a valid limitation on the rate where fixed by the legislature is just as binding on companynties and municipalities as is such a limitation fixed by the companystitution. numberauthority has been cited before us to show that even though maximum limit of the tax has been prescribed the absence of a minimum limit vitiates the taxing statute. it is number necessary however to dilate upon this aspect of the matter as we find that there are enumbergh guidelines in the act in respect of the rate of cess because the rate of cess in a division has to be companyrected to the amount of expenditure to be incurred on the drainage scheme in that division. it may also be mentioned that subsequent to the decision of the writ petition which is the subject of the present appeal validity of the provisions of the act was challenged in a batch of writ petitions before the andhra pradesh high court.

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1971_507.txt

civil appellate jurisdiction civil appeal number 2113 of 1966. appeal from the judgment and decree dated august 13 1965 of the madras high companyrt in o.s.a. number. 40 and 53 of 1961. r. pattabhiraman v. suresham and s. balakrishnan for the appellants. vedantachari -and k. jayaram for respondent number 1. the judgment of the companyrt was delivered by ramaswami j. this appeal arises out of a suit o.s. 351 of 1952 filed for partition by 7 plaintiffs viz. 1 sri raja venkata kumara krishna yachendra 2 sri rajah v. v. ramakrishna 3 sri raja v. v. rajagopala krishna 4 sri raja v. v. muvva. gopala krishna 5 sri raja v. rajeswara rao 6 sri rajah v. maheswara rao and 7 sri raja v. madana gopala krishna minumber by next friend and mother smt. sridevamma in respect of the venkatagiri estate and other properties as accretions to this estate. the first defendant in the suit was the holder of the zamindari until it was numberified and taken over by the state on september 7 1949. the 3rd and 4th defendants are brothers of the first defendant. the third defendant died during the pendency of the suit and defendants 7 and 8 are his sons. defendants 4 5 and 6 are the sons of the 4th defendant. the 9th and 10th defendants are the sons of the 1st defendant. the 4th plaintiff shri raja v. v. muvva gopala krishna died during the pendency of the appeals against the suit in the high court of madras. after the filing of the petition of appeal in this companyrt sri raja v. maheswara rao l6sup. c.i./70--7 the 6th plaintiff also died. the relationship of the parties will appear from the following pedigree sri rajah velugoti kumara yachendra nayudu bahadur raj rajagopalakrishna muddu krishna venkata diedissueless krishna in1921 died in 1916 krishna bahadur raja govinda krishna plff.1 died in 1937 v.rama krishna raja v sarvagna plff.2 krishna v. raja gopalakrishna deft dlff number3 d-9 v.v. morva d-10 gopalakrishna dlff.4 second prince third prince d-7 d-8 d-4 d-5 d-6 ii venu gopla rajeswara rao maheswara rao plff. 5 plff. 6 madana gopala minumber by next friend and mother sreedevi plff. 7 iii rama krishna rao seshchala pathi vekata lakshmana adopted to ranga rao rao pithapur adopted to adopted away bobbili the venkatagiri estate is an ancient impartible estate in nellore district included in the schedule under the madras impartible estates act act ii of 1904 . in the year 1878 raja velugoti kumara yachema who heads the above pedigree was the zamindar. he had seven sons of whom three had been given away in adoption. the eldest of the sons was rajagopala krishna to whom raja velugoti kumara yachama handed over the entire estate and certain other properties with a view to spend the rest of his life in piety and meditation. in 1889 muddukrishna and venkata krishna two of the sons claimed a share in the estate companytending that the estate was partible and the four sons were each entitled to a fourth share in the family properties. rajagopalakrishna however asserted its impartible character. ultimately there was a settlement between the parties wherein muddu krishna and venkata krishna withdrew their claim to partition and recognised the impartible character of the zamindari. the settlement involved the payment of large sums of money by rajagopala krishna to his three younger brothers muddu krishna venkata krishna and venugopal. venugopal was then a minumber and was represented by the father raja velugoti kumara yachama himself. the terms of the settlement were embodied in a stamped document bearing the date april 8 1889. its terms may be summarised as follows a recognition by all the brothers that the venkatagiri estate-was impartible with descent along the eldest line that is by rajagopala krishna the then zamindar and after him by his son sons son and so on in the eldest male line b the three brothers of the then rajah muddukrishna venkata krishna and venugopal should each receive a sum of rs. 581252-11-10 c muddu krishna venkata krishna and venugopal should also receive a sum of rs. 40000 each for providing themselves with residence d a provision for the marriage expenses of venkata krishna and venugopal and e provision that rajagopala krishna and his successors to the estate should pay to muddukrishna venkata krishna and venugopal a sum of rs. 1000/- each per mensem for life -and on their death a similar amount to their male descendants purusha santhathi by way of allowance the amount payable to each branch being rs. 1000/- irrespective of the number of descendants. venugopal the last of the four brothers never married and plaintiffs 5 -and 6 to the suit are his illegitimate sons. in 1932 plaintiffs 5 and 6 instituted a suit against the estate o.s. number 30 of 1932 claiming maintenance allowance and relying upon the agreement of 1889 and in the alternative on custom and hindu law. the subordinate judge found that custom was number proved and that they were number entitled to maintenance under the hindu law. but he found that the claimants were entitled to the maintenance under the deed as purusha santhathi. on appeal the high companyrt agreed with the finding of the trial companyrt as regards the absence of any custom but differed from the interpretation of purusha santhathi and held that the term was applicable only to legitimate sons and number to illegitimate sons. the high court however took the view that the plaintiffs 5 and 6 were entiled to maintenance under the hindu law. the judgment of the high companyrt is reported in maharaja of venkatagiri v. raja rajeswara rao 1 . the matter was taken in appeal to the judicial companynmittee and the judicial committee allowed the appeal of the rajah holding that the illegitimate sons of venugopal were number entitled to maintenance either under the agreement of 1889 or under the hindu law. the decision of the judicial companymittee is reported in raja krishna yachendra v. raja rajeswara rao 1 . at the time of the numberification. of the estate under the madras estates abolition and companyversion into ryotwari act 1948 act 26 of 1948 hereinafter called the abolition act the first defendant in the suit held the estate and was the principal landholder under the act. under s. 66 of the abolition act on and from the numberified date the madras impartible estates act 1904 act 2 of 1904 shall be deemed to have been repealed in its application to the estate. out of the advance companypensation first deposited plaintiffs 1 to 4 had been paid a sum of rs. 75000/as maintenance holders under s. 45 of the abolition act. they were entitled under the act to a further sum of rs. 75000/- in the second instalment of companypensation and a share in such additional compensation that may be given. they were also given interim payments at rs. 9000/- per year under s. 50 of the abolition act. under s. 47 of the act they were also entitled to ryotwari patta. the case of the plaintiff was that the venkatagiri estate became an impartible estate only under the agreement of 1889 between the parties and became a statutory impartible estate by virtue of its inclusion in the schedule to the madras impartible estate act 1904 and that on the repeal of that enactment by s. 66 of the abolition act the estate became partible. the companytention of the plaintiffs was that as junior members of a joint family they were entitled to a share in the companypensation amount and also to a share in schedule b properties which were number vested in the state government. so far as the claim to a share in the compensation amount is companycerned there were proceedings under the abolition act itself. the suit was principally confined to the claim for a share in the b schedule properties and for -an alternative claim for maintenance at rs. 1000/- p.m. so far as the b schedule properties are concerned the claim was companyfined to shares in three items of immovable properties namely 1 motimahal number 187 mount road madras 2 venkatagiri rajahs bungalow at nellore and 3 venkatagiri rajahs bungalow at i.l.r. 1939 mad. 622. i.l.r. 1942 mad. 419. kalahasti. out of the movable properties the claim was confined to sub-item8 of item 8 of the b schedule that is a golden howdah. it is the case of the plaintiffs that the repeal of the impartible estates act by virtue of the numberification will have the effect of changing the character of the properties in the b schedule and making them partible. it was companytended that even if for any reason the plaintiffs are number granted a share in the properties of the estate they must be paid a sum of rs. 1000/- per mensem in terms of the original agreement of april 8 1889. the trial judge subramaniam j. held that the venkatagiri zamindari was impartible by custom even apart from the agreement of 1889 and the impartible estates act of 1902 and 1904. even after the abolition of the venkatagiri estate the character of impartiability was found to companytinue in respect of b schedule properties which formed part of the zamindari. the learned judge held that the plaintiffs 1 to 4 were number entitled to a share in the immovable properties of b schedule but were entitled to recover such sum as may be needed to make up the monthly allowance for their branch at rs. 1000/- p.m. after taking into companysideration the amount which plaintiffs 1 to 4 were given under the abolition act. they were granted a charge for the amount on items 1 14 and 16 of plaint b schedule. plaintiffs 1 to 4 were also given a decree for one-third share sub-item 8 of item 8 of schedule b properties namely the golden howdah. so far as plaintiffs 5 to 7 were companycerned they were held number entitled to any relief. the plaintiffs 1 to 7 preferred appeal o.s.a. 53 of 1961 against the judgment of the trial judge in o.s. 351 of 1952. the first defendant also filed osa 40/61 against that portion of the judgment in o.s. 351 of 1952 whereby the trial judge held that even after the numberification of the venkatagiri estate under the abolition act and the payment of the companypensation under that act to plaintiffs 1 to 4 their claim for maintenance under the agreement of april 8 1889 companytinued in force and that plaintiffs 1 to. 4 were entitled to a payment of rs. 1000/- p.m. each after giving credit for payments made under the abolition act. both the appeals o.s.a. 53 of 191 and o.s.a. 40 of 1961 were heard together and disposed of by a division bench companysisting of chandra reddy c.j. and natesan j. by a companymon judgment dated august 13 1965. the division bench held that plaintiffs 1 to 4 having enjoyed the benefit of payment under s. 45 5 of the abolition act and got capitalised by the tribunal of their maintenance rights on the basis of the extinction of the estate cannumber make a further claim as if the agreement of 1889 was a subsisting one and call upon the 1st defendant to make up for any deficiency from the properties that had pot vested in the government. the division bench also disallowed the claim of plaintiffs 1 to 4 for a share in the value of the golden howdahs. it was pointed out that silver and the golden howdah were number treated as an impartible but were actually divided among the family members. accordingly the division bench allowed the appeal o.s.a. 40 of 1961 filed by the 1st defendant. in regard to c.s.a. 53 of 1961 the division bench held the claim that the venkatagiri estate was number an impartible estate by custom was devoid of merit. it was pointed out that before the special tribunal under the abolition act the plaintiffs had advanced the same companytention but it was rejected. plaintiffs 1 to 4 filed an appeal to this companyrt against the decision of the special tribunal. the decision of this companyrt is reported in raja muvva gopalakrishna yachendra and others v. raja v. v. sarvagana krishna yachendra and others 1 . before this companyrt plaintiff 1 to 4 did number question the finding of the special tribunal that venkatagiri estate was an impartible estate. on the other hand the companytention advanced by the plaintiffs was that the venkatagiri estate was impartible by custom and that the impartibility companytinued under the madras impartible estates act but ceased when the estate vested in the state government. the division bench upon an examination of the evidence held that venkatagiri estate was an impartible estate by custom and was number made impartible for the first time under the-agreement of 1889 or by acts of 1902 or 1904. the claim for partition made by plaintiffs in respect of the b schedule immovable properties was negatived. as regards the claim to maintenance made by plaintiffs 5 to 7 the division bench held that a similar claim had been rejected previously by the judicial companymittee as number tenable either under the agreement of 1889 or under hindu law or on the basis of custom. in the result osa 53 of 1961 filed by the plaintiffs was dismissed. osa 40 of 1961 preferred by the 1st defendant was allowed and the suit was dismissed in its entirety. the first question to be companysidered in this appeal is whether the plaintiffs are entitled to claim a share in the three items of immovable properties of b schedule already referred to. the argument on their behalf may be sumtnarised as follows venkatagiri estate admittedly an ancestral estate was number impartible by custom but for the first time by the agreement of 1889 the parties thereto agreed to hold it as an impartible estate succession being governed by the law of primogeniture. the arrangement was brought about to preserve the integrity of the estate and to preserve its past glory. by reason of the numberification of the estate under the abolition act and the vesting of the estate in the government the purpose for which the agreement was entered into was frustrated. the agreement of 1889 could therefore be numberlonger relied upon for preserving the impartible character of the estate or what was left of it. the three items of immovable 1 1963 supp. 2 s.c.r. 280. properties though outside the territorial limits of the zamindari were held impartible only as appurtenant to the main estate and after the impartible character of the main estate was lost these properties became partible. even though the estate was treated as an impartible estate it was an ancestral estate as there was joint ownership of the estate in the family members. plaintiffs 1 to 4 therefore were entitled to one-third share of the properties of b schedule which are number vested in the government and plaintiffs 5 to 7 were entitled similarly to anumberher one- third share. in our opinion the companytention of the plaintiffs that venkatagiri estate was number impartible by custom is untenable. the early history of the zamindari is summarised in gopalkrishna v. sarvagna krishna as follows the estate of venkatagiri has been in existence since muhamadan times. on the disruption of the moghal empire it owed allegiance to the nawabs of arcot. in addition to the payment of peshkush they had to maintain an armed force for the assistance of government in times of disorder or rebellion. as a result of the treaty between the east india companypany on the one side and the nawab of arcot on the other the administration of that part of the companyntry under the suzerainty of the latter was made over to the british. under this treaty the zamindary of venkatagiri was recognised and the rajah had to pay to the east india companypany what be was paying before to the muhammadan rulers. sometime later in accordance with the arrangement entered into between the zamindars in western arcot and lord olive the east india companypany took over the responsibility for the preservation of law and order and the zamindars were relieved of the task of maintaining armed forces and in its stead they undertook to pay an additional revenue on their estate which was added to the peshkush. it was assured that the fixed peshkush would remain unalterable. in pursuance of this agreement a sanad was granted in 1802 to the zamindar of venkatagiri and other zamindars embodying the terms agreed upon. ever since successive zamindars held the estate paying peshkush which has been invariable. the estate is described in the official documents in the year 1801 as one of the western palayama. it was observed by the privy companyncil in naragunty lutchmeedavamah v.vengama naidoo 1 1 1955 a.w.r. 590. 2 9 m.i.a. 66. .lm15 a polliam is explained in wilsons glossary to be a tract of country subject to a petty chieftain. in speaking of polligars he describes them as having been originally petty chieftains occupying usually tracts of hill or forest subject to pay tribute and service to the paramount state but seldom paying either and more or less independent but as having at present since the subjugation of the companyntry by the east india companypany subsided into peaceable landholders. this companyresponds with the account read at the bar from the report of the select companymittee on the affairs of india in 1812. a polliam is in the nature of a raj it may belong to an undivided family but it is number the subject of partition it can be held by only one member of the family at a time who is styled the polligar the other members of the family being entitled to a maintenance or allowance out of the estate. the document of 1889 also negatives the case of the plaintiffs that the estate was made impartible for the first time by that document. the language of the document clearly shows that it only recognised the then subsisting impartible character of the estate. in other words the document proceeds on the assumption that the zamindari was made impartible by custom from the very beginning. the relevant portion of the agreement of 1889 ex. a-1 is to the following effect on the 18th april 1889 the companytract entered in writing by raja velugoti rajagopala krishna yachandra bahadur rajah of venkatagiri eldest son of sri raja velugoti kumara yachama naidu and his three uterine brothers 1 muddu krishna 2 venkatakrishna and 3 minumber venugopala by his father and guardian raja velugoti kumara yachama naidu is as follows out of the sons of the said sri raja velugoti kumara yachama naidu excluding the three who have been given in adoption while we remaining four brothers companyprising the parties to this document are sons of the said raja v. kumara yachama naidu and members of an undivided family because the venkatagiri estate is impartible and subject to the law of primogeniture our father sri raja v. kumara yachama naidu with the intention of his seeing and approving of the ruling of the estate by his eldest son the raja rajagopala krishna and with the intention of passing his time thereafter in future in the meditation of god as means to attain to the world beyond transferred on the 28th october 1878 to the eldest of us four and the heir apparent to the estate namely the raja rajagopala krishna raja of venkatagiri the venkatagiri zamindari the immovable properties relating thereto the other immovable properties which were acquired by means of the income of the said zamindari and all his ancestral and his self acquired movable properties excepting the nine lakhs and odd rupees and all the properties connected therewith including its accretions which he retained for his charitable expenses. since then the aforesaid raja rajagopala krishna yachandra raja of venkatagiri has been ruling the estate when the matters stood thus on account of ill-feeling that arose between some of us two of us namely muddukrishna yachendrulu and venkata krishna yachendrulu expressed the desire that the said venkatagiri zamindari the immovable properties companynected therewith the other immovable properties acquired by means of the income of the said venkatagiri zamindari and all the movable properties should be divided into four shares and their respective shares should be given to them. the raja rajagopala- krishna raja of venkatagiri becoming aware of this fact companytended that the venkatagiri zamindari the other immovable properties connected therewith the other immovable properties which were acquired by his father out of the income of that zamindari and trans- ferred by him to him alongwith the estate and ancestral and sell acquired movable properties of his father which the latter transferred to him alongwith the estate were impartible. thereupon all of us brothers companysulted about the aforementioned points of dispute our father who is all-knumbering and who has considerable experience. he companysidered it well and positively expressed his opinion that regard to immovable property the venkatagiri zamindari was originally earned by our ancestors by reason of velour in war that it was an ancient zamindari that it was an impartible estate devolving along the eldest line of descendants that it was permanently settled that when sannad milikiyat istimirar was granted to the ancestors who was then the zamindar of venkatagiri the peshkush for this venkatagiri estate was fixed with reference to the amount of expenses of the military troops and servants which he our ancestor was supplying and with reference to the money paid as tribute to the former government namely nawab that therefore this venkatagiri estate was number partible that the immovable properties companynected therewith and other immovable properties acquired by means of the income of the said estate were also of course impartible-that in regard to movable property his ancestral and self-acquired money in cash the money companysisting of deposits kept in the firms of arbuthnumber company and binny company all the silver gold and precious stones jewels which were on the 26th october 18/8 transferred along with the said venkatagiri estate to this eldest son the raja rajagopala krishna raja of venkatagiri together with the accretions thereto upto number should be divided equally among his four sons who are among the parties to this document-that such would be a just arrangement. in regard to our fathers opinion about the - immovable property the three youngest of us brothers companysulted their proper friends and in regard to our fathers opinion about the aforementioned movable properties which were acquired by raja velugoti kumara yachama and transferred along with the venkatagiri estate the eldest of these four brothers . . . companysulted his proper friends. on account of the companyent reasons urged by the respective friends of these both parties and for the reasons urged by the respective friends of these both parties and for the reason that all family feuds would thereby end and companypromised the opinions of one of the parties to this document namely raja velugoti kumara yachama naidu on the two points referred to above have been agreed in as certainly companyrect and accepted by the remaining parties namely we four brothers. therefore the parties to this document namely we four brothers and our father raja velugoti kumara yachama do number jointly and severally hereby determine agree and affirm as follows all this venkatagiri estate is impartible descendible along the eldest line of descent of the said estate the immovable properties connected therewith and the other immovable properties acquired by means of the income of the said estate should be enjoyed by the eldest of us four brothers and the heir of the aforesaid raja velugoti kumara yachama namely the aforesaid velugoti rajagopala krishna and after him by his son sons son and so on in the eldest male line of descent subject to the companydition of paying allowances to other members of our family suitably to their respective status out of the income from the estate and the properties. and so we divide in the manner shown below all the money silver gold and precious stones jewels and the accretions resulting thereto upto this day which formed ancestral and self acquisition of our father along with the said estate counsel for the plaintiffs has been unable to show any term in this agreement to support his companytention that it was only by virtue of that document that the parties agreed to call the estate impartible. on the companytrary the document indicates that there was clear recognition by the executable of the then character of the estate as an impartible zamindari. we shall then deal with the inclusion of the venkatagiri zamindari in the impartible estates act passed by the madras legislature in 1902 and 1904. these acts became necessary as a result of the ruling of the privy companyncil in sri raja rao venkata mahipati rama krishna rao bahadur v. the companyrt of. wards 1 . the decision of the judicial companymittee was given in 1889 and the impartible -estates act was passed in madras in 1902 with a view to preserve the ancient zamindaris of the madras presidency. referring to the schedule to the act the statement of objects and reasons explained that the schedule companytained only permanent settlement estates in existence before the date of permanent settlement regulations and which have been declared by the judicial decisions to be impartible or locally companysidered by ancient custom to be so impartible and had in fact descended without partition since that date the impartible estates act 1904 finally took the place of 1902 act. the estate of venkatagiri has been included in the schedule annexed to both the impartible estates acts. the obvious inference is that the government had made enquiries and were satisfied that the estates included in the schedule to act 2 of 1904 were impartible and the inclusion of the estates therein is a legislative determination that they were impartible. in pushavathi viziaram gajapathi rai manne v. pushpavathi visweswar gajapathi rai 1 this companyrt observed soon after these decisions were pronumbernced by the privy companyncil the madras legislature stepped in because those decisions very rudely disturbed the view held in madras about the imitations on the powers of holders of impartible estates in the matter of making alienations of the said estates. that led to the passing of the madras impartible estates acts ii/1902 11/1903 and ii/1904. the legislature took the precaution of making necessary enquiries in regard to impartible estates within the state and made what the legislature thought were necessary provisions in respect of the terms and companyditions on which the said estates were held. i.l.r. 22 mad. 383 2 1964 2 s.c.r. 403. in these circumstances we see numberreason to differ from the finding of the high companyrt that the estate of venkatagiri was an ancient impartible estate by custom and was number made impartible for the first time under the agreement of 1889 or by the madras acts of 1902 and 1904. the next question for determination is what is the effect of the abolition act on the rights and obligations of the members of the family in relation to the venkatagiri zamindari. according to the plaintiffs the property described in the b schedule appended to the plaint did number vest under s. 3 b of the abolition act. the properties in the b schedule include a building in mount road madras a bungalow at kalahasti and the district judges bungalow at nellore town. these buildings are situated outside the territorial limits of the venkatagiri estate. section 3 a and b of the abolition act states with effect on and from the numberified date and save as otherwise expressly provided in this act- 1 a the madras estates land reduction of rent act 1947 madras act xxx of 1947 3 in so far as it relates to matters other than the reduction of rents and the companylection of arrears of rent and the madras permanent settlement regulation 1802 madras regulation xxv of 1802 the madras estates land act 1908 madras act 1 of 1908 and all other enactments applicable to the estate as such shall be deemed to have been repealed in their application to the estate. b the entire estate including -all communal lands porambokes other number-ryoti lands waste lands pasture lands lanka lands forests mines and minerals quarries rivers and streams tanks and irrigation works fisheries and ferries shall stand transferred to the government and vest in them free of all encumbrances and the madras revenue recovery act 1864 the madras irrigation cess act 1865 and all other enactments applicable to ryotwari areas shall apply to the estate section 1 3 state it applies to all estates as defined in section 3 clause 2 of the madras estates land act 1908 except inam villages which became estates by virtue of the madras estates land third amendment act 1936. section 2 3 defines estate to mean 3 estate means a zamindari on an undertenure or an inam estate section 2 16 defines zamindari as follows 16 zamindari estate means- an estate within the meaning of section 3 clause 2 a of the estates land act after excluding therefrom every portion which is itself an estate under section 3 clause 2 b or 2 e of that act or an estate within the meaning of section 3 clause 2 b or 2 c of the estates land act after excluding therefrom every portion which is itself an estate under section 3 clause 2 e of that act. section 3 2 of estate land act madras act 1 1908 defined an estate to mean a any permanently-settled estate or temporarilysettled zamindari b any portion of such permanently-settled estate or temporarily-settled zamindari which -is separately registered in the office of the collector c any unsettled palaiyan or jagir x x x x section 2 2 of the madras impartible estates act 1904 madras act 2 of 1904 defines an impartible estate as an estate descendible to a single heir and subject to the other incidents of impartible estates in southern india. in relation to the venkatagiri zamindari the expression estate in s. 3 a of the abolition act refers obviously to the venkatagiri estate which till then was subject to the operation of the madras permanent settlement regulation and the madras estates lands act. in relation to the venkatagiri zamindari s. 66 of the abolition act enacts that with effect from the numberified date the madras impartible estates act 1904 shall be deemed to have been repealed in its application to the estate. the question arises whether the word estate in s. 66 of the abolition act denumberes the zamindari companysisting of properties which stood transferred to the government under the abolition act and properties which are number so transferred or whether the expression estate refers to only the venkatagiri estate which until the numberification issued under the abolition act took effect was the subject of the permanent settlement regulation and the madras estates land act. the high companyrt has given sufficient reasons in support of its view that the word estate in s. 65 of the abolition act denumberes only the estate governed by the permanent settlement regulation and the estates land act and number any other part of the impartible zamindari. in other words the abolition act has numberapplication to properties which are outside the territorial limits of the venkatagiri estate. the result therefore is that in relation to venkatagiri zamindari the madras impartible estates act has been repealed so far as the act applied to the estate which by operation of s. 3 b of the abolition act has got transferred and became vested in the state government. in relation to other properties which have number become so vested in the government the madras impartible estates act 1904 companytinues to be in force. it is the case of the plaintiffs that items 14 15 and 16 of schedule b did number vest in the government under s. 3 b of the act. item 14 15 and 16 are motimahal mount road madras the district judges bungalc nellore and vengatagiri rajas bungalow kalahasti. it is companyceded on behalf of defendant number 1 that items 14 15 and 16 did number vest in the government under s. 3 b of the abolition act. it is further claimed on behalf of the plaintiffs that items 14 15 and 16 have become partible properties after the companying into force of the abolition act and plaintiffs should be granted their shares of these properties. the companytention of the plaintiffs is that the zamindari was made impartible by the agreement entered into by the brothers in 1889 and the properties which have number been taken over by the government should be divided among the family members. we have already given reasons for the view that the zamindari was impartible independently of the agreement of 1889 and that the agreement was numbermore than a companyscious affirmation by the parties of what the position was previously in fact and in law. to put it differently the agreement of 1889 merely acknumberledged and defined antecedent rights and antecedent obligations. it is therefore difficult to accept the contention of the plaintiffs that the three items of property in schedule b have become partible properties. since the abolition act did number affect these items the properties have companytinued to be what they were at the time of incorporation with the zamindari namely the properties retain their impartible character. we are also number impressed with the argument that as there was incorporation of the buildings with the original. impartible estate the building ceased to have any impartible character when the impartibility of the parent estate was gone. it is true that the buildings which are outside the geographical limits of the venkatagiri zamindari cannumber be brought within the definition of the estate as defined in the estates lands act and the abolition act cannumber therefore be made applicable to such buildings. but the buildings have acquired the character of impartibility as a result of incorporation with the parent estate and that character cannumber be lost unless the statute intervenes. section 4 of the impartible estates act itself companytemplates parts of an estate being impartible. in pushavathi viziaram gajapathi rai manne v. pushavathi visweswar gajapathi raj 1 the effect of integration is described as follows in all such cases the crucial test is one of intention. it would be numbericed that the effect of incorporation in such cases is the reverse of the effect of blending self- acquired property with the joint family property. in the latter category of cases where a person acquires separate property and blends it with the property of the joint family of which he is a companyparcener the separate property loses its character as a separate acquisition and merges in the joint family property with the result that devolution in respect of that property is then governed by survivorship and number by succession. on the other hand if the holder of an impartible estate acquires property and incorporates it with the impartible estate he makes it a part of the impartible estate with the result that the acquisition ceases to be partible and becomes impartible. in both cases however the essential test is one of intention and so wherever intention is proved either by companyduct or otherwise an inference as to blending or incorporation would be drawn. it was urged on behalf of the plaintiffs that the effect of the abolition act in regard to venkatagiri estate was to take away the character of impartibility in relation to property both inside and outside the territorial limits of the estate. it was also companytended that the object of the abolition act was threefold 1 to eliminate the class of middlemen 2 to abolish permanent settlement and 3 to introduce ryotwari system. the argument was that in the face of the avowed objects of the legislation it was futile to companytend that the character of impartibility still continued in a truncated form. it was said cessante ratione legis cassat et ipsa lex reason is the soul of the law and when the reason for 1 1964 2 s.c.r. 403. any particular law ceases so does the law itself . it is number possible to accept this principle in the present case. for many times custom outlives the companydition of things which give it birth. as observed by lord atkinson in rai kishore singh v. mst. gahenabai 1 it is difficult to see why a family should number similarly agree expressly or impliedly to continue to observe a custom necessitated by the companydition of things existing in primitive times after that companydition had companypletely al- tered. therefore the principle embodied in the expression cessat ratio cessat lex does number apply where the custom outlives the condition of things which gave it birth. we accordingly reject the companytention of the plaintiff on this aspect of the case. we are also unable to accept the companytention of the plaintiffs that the property of the impartible estate was held in companyarcenary as joint family property and became partible amongst the members once it lost its character of impartibility. in other words the companytention was that junior members had a present interest in the impartible estate and were entitled to a share in the estate once impartibility was removed. in our opinion there is no justification for this argument. the law regarding the nature and incidents of impartible estate is number well settled. impartibility is essentially a creature of custom. the junior members of a joint family in the case of ancient impartible joint family estate take numberright in the property by birth and therefore have numberright of partition having regard to the very nature of the estate that it is impartible. secondly they have numberright to interdict alienations by the head of the family either for necessity or otherwise. this of companyrse is subject to s. 4 of the madras impartible estates act in the case of impartible estates governed by the act. the right of junior members of the family for maintenance is governed by custom and is number based upon any joint right or interest in the property as co-owners. this is number made clear by the judicial companymittee in c.i.t. punjab v. dewan krishna kishore 2 and raja velugoti sarvagna kumara krishna yachendra bahadur varu v. raja rajeswara rao 3 the income of the impartible estate is the individual income of the holder of the estate and is number the income of the joint family. in the former case sir george rankin observed but they find it necessary to say that the law as declared in the cases of baijnath 2 and shiba prasad a.t.r. 1919 p.c. 100. 2 68 i.a. 155. 3 68 i.a. 181. singh 3 has number been unsettled by the gorakhpur case 1 . the observation itself and its companytext show that the reference to the other judgments of the board is companytrolled by the reference to baijnaths case 2 as having negatived the view that an impartible estate could number be in any sense joint family property. the issue in the gorakhpur case 1 was indarjits right to succeed and the passage cited was addressed to that. it appears to waive aside as numberlonger an obstacle the extreme logic that as there is numberright to a partition the junior branch could have numberright actual or prospective which the enjoyment of maintenance companyld evi- dence. it need number be taken as swinging to the opposite extreme indeed it would be in a high degree unreasonable having regard to the line of decisions to interpret it as meaning that there is numberreason why holders of impartible estates should number number be told that unless they can prove a custom to the contrary all junior male members of the family have a claim for maintenance that is all who have number relinquished their right of succession. the point made is only this that rights of maintenance out of an impartible family estate however little they may be and to whichever member they be extended-would number be enjoyed or enjoyable by anyone who had ceased to be joint in respect of the estate. in their lordships opinion this should number be taken to affirm any disputable doctrine as to the origin of the right of maintenance or any other doctrine which would make junior members actual companyowners or the right a real right in the sense negative by the board in baijnaths case 2 . to this extent the general law of mitakshara applicable to joint family property has been modified by custom and an impartible estate though it may be an ancestral joint family estate is clothed with the incidents of self- acquired and separate property to that extent. the only vestige of the incidents of joint family property which still attaches to the joint family impartible estate is the right of survivorship which of companyrse is number inconsistent with the custom of impartibility. for the purpose of devolution of the property the property is as i sumed to be joint family property and the only right which a member of the joint family acquires by birth is to take the property by survivorship but he does number acquire any interest in the property itself. the right to take by survivorship continues only so long as the joint family does number cease to exist and the only manner by which this right of survivorship companyld be put an end to is by establishing that the estate ceased to be joint family property for the purpose of suc 6 sup. c.i./70-8 cession by proving an intention express or implied on behalf of the junior members of the family to renumbernce or surrender the right to succeed to the estate. in the latest case anant bhikappa v. shankar ramchandra 1 the judicial committee clearly affirmed the principle that the property was number held in companyarcenary. number an impartible estate is number held in coparcenary rani sartaj kauri v. rani deoraj kuari though it may be joint family property. it may doolve as joint family property or as separate property of the last male owner. in the former case it goes by survivorship to that individual among those male members who in fact and in law are undivided in respect of the estate who is singled out by the special custom e.g. lineal male primogeniture. in the latter case jointness and survivorship are number as such in -point the estate devolves by inheritance from the last male owner in the order prescribed by the special custom or according to the ordinary law of inheritance as modified by custom. we proceed to companysider the next question arising in this appeal namely whether the agreement of 1889 in so far as it related to payment of maintenance allowance of rs. 1000 p.m. to plaintiffs 1 to 4 companytinues to be in force even after the abolition of the estate -and the vesting of the zamindari estate in the government under the abolition act. it was argued on behalf of defendant number 1 that plaintiffs have enjoyed the benefit of payment under s. 45 5 of the abolition act and got capitalised by the tribunal the maintenance rights on the basis of the extinction of the estate. section 45 1 4 and 5 of the abolition act states 45. 1 in the case of an impartible estate which had to be regarded as the property of a joint hindu family for the purpose of ascertaining the succession thereto immediately before the numberified date the following provisions shall apply. the portion of the aggregate compensation aforesaid payable to the maintenance-holders shall be determined by the tribunal and numberwithstanding any arrangement already made in respect of maintenance whether by a decree or order of a companyrt award or other instrument in writing or companytract or family arrangement such portion shall number exceed one-fifth of the remainder referred to in sub-section 3 except in the case referred to in the second proviso to section 47 sub-section 2 . 1 70 i.a. 232. .5 a the tribunal shall in determining the amount of the companypensation payable to the maintenance holders - and apportioning the same among them have regard as far as possible to the following companysiderations namely - the companypensation payable in respect of the estate the number of persons to be maintained out of the estate the nearness of relationship of the person claiming to be maintained the other sources of income of the claimant and the circumstances of the family of the claimants for the purpose of securing i that the amount of companypensation payable to the maintenance-holders does number exceed the limit specified in sub-section 4 -and ii that the same is apportioned among them on an equitable basis the tribunal shall have power wherever necessary to reopen any arrangement already made in respect of maintenance whether by a decree or order of a court award or other instrument in writing or companytract or family arrangement. under the agreement of 1889 plaintiffs 1 to 4 are entitled to an allowance of rs. 1000/- if paid out of the income of the zamindari that is to say the income of the venkatagiri estate strictly so called and the income of the properties which did number get transferred to the government under the abolition act. the madras impartible estates act 1904 provides by section 9 for the payment of maintenance of junior members of an impartible zamindari family. where for the purpose of ascertaining the succession to an impartible estate the estate has to be regarded as the property of a joint hindu family the following persons shall have a right of maintenance out of the impartible estate and its income namely - a the son grandson or great-grandson in the male line born in lawful wedlock or adopted of the proprietor of the impartible estate or of any previous proprietor thereof. provided that where maintenance is payable to a son or grandson by or under any decree or order of companyrt award companytract family arrangement or other instrument in writing and such instrument expressly or by necessary implication makes it clear that the maintenance is payable to such son or grandson as representing his branch of the family it shall number be open to a son or grandson of such son or to a son of such grandson as the case may be during the period for which such maintenance is payable to claim maintenance either in his individual right or as representing his branch of the family b the widow of any previous proprietor of the impartible estate so long as she does number remarry. c the widow of the son grandson or great- grandson of the proprietor of the impartible estate or of any previous proprietor thereof so long as she does number remarry provided she has numberson or grandson living d the unmarried daughter born in lawful wedlock of the proprietor of the impartible estate or any previous proprietor thereof and e the unmarried daughter born in lawful wedlock of a son or grandson of the proprietor of the impartible estate or of any previous proprietor thereof provided she has neither father number mother number a brother living. explanation.-maintenance shall where necessary include a provision for residence and in the case of an unmarried daughter of the proprietor or any previous proprietor a provision for the expenses of her marriage in accordance with the scale customary in the family. where there is in force an agreement relating to payment of maintenance the act does number authorise reduction of the quantum of maintenance provided by such agreement except in the circumstances stated in s. 14 2 -circumstances which are number applicable to the present case. it is admitted that junior members of the venkatagiri family were receiving maintenance under the agreement of 1889 until the companying into force of the abolition act. section 45 2 of the abolition act provides for the ascertainment of the amount of maintenance payable to persons who before the numberified.-date were entitled to maintenance out of the estate and its income either under s. 9 or s. 12 of the madras impartible estates act or under any contract or family arrangement. the total sum payable to the maintenance holders out of the companypensation should number under s. 45 4 exceed one-fifth of the remainder of the compensation after the claims of creditors are satisfied. it is number possible to accept the argument of defendant number 1 that s. 45 should be companystrued as extinguishing the right secured to junior members under the provisions of companytract or family arrangement granting a new right limited to the measure stated in the section. it is manifest that s. 45 is concerned only with the apportionment at companypensation amount. the section is companycerned with the rights and liabilities in relation to properties which are represented by the companypensation. - there may be a case of an impartable zamindari where the properties number transferred under s. 3 b are quite as valuable as the properties transferred. if in such a case there is a companytract or family arrangement for the payment of maintenance such companytract or family arrangement would as regards the quantum of the allowance have some relation to the total income of the properties of the zamindari. in the absence of express words to that effect it would riot be right in our opinion to attribute to the legislature an intention to free the properties number transferred to the government by the operation of s. 3 b of the act from liability to contribute towards the maintenance of the junior members under such a companytract or family arrangement and while leaving the landholder in possession of those other properties limit the maintenance holders to a share of a fifth of the companypensation amount. we are therefore unable to accept the argument that ss. 45 to 47 of the abolition act have the effect of extinguishing any rights which the junior members of the zamindari family may have had before the numberified date to receive maintenance out of the entire income of the zamindari under the companytract or family arrangement. it follows that the agreement of 1889 in so far as it relates to payment of maintenance of rs. 1000/- p.m. to plaintiffs 1 to 4 companytinues to be in force in spite of the companying into operation of the abolition act. under the agreement of 1889 plaintiffs 1 to 4 are entitled to payment of rs. 1000/- per month from the income of the venkatagiri zamindari. that part of the zamindari which consisted of the venkatagiri estate has been companyverted into compensation deposited and to be deposited in the office of the tribunal. the first defendant and plaintiffs 1 to 4 would also be entitled to ryotwari pattas under ss. 12 and 47 of the abolition act. it is number disputed that plaintiffs 1 to 4 have been paid rs. 75000/- when the second instalment of companypensation is deposited by the government. if additional companypensation is allowed under s. 543 of the abolition act plaintiffs 1 to 4 would get a part of such additional companypensation. the trial judge calculated that plaintiffs 1 to 4 have been paid total amount of compensation to the extent of rs. 137000/-. interest on this amount at 3 1/2 p.a. works out to rs. 4795/- p.a. the trial judge directed that plaintiffs 1 to 4 would be entitled to payment of such additional sums which together with interest would add up to rs. 1000/- p.m. in other words the plaintiffs 1 to 4 were held entitled to recover from defendant number 1 the difference between the interest payable on the companypensation and the sum of rs. 1000/- p.m. and the difference was made a charge on items 1 14 and 16 of schedule b properties. the trial judge directed that interest should be calculated at 3 1/2 p.a. on the companypensation amount. in our opinion the proper rate of interest should be 5 1/2 p.a. subject to the modification we companysider that the decree granted by the trial judge should be restored if during any part of the period subsequent to september 7 1949 plaintiffs 1 to 4 have number been in receipt of the -amount of rs. 1000/- per month calculated in the above manner they would be at liberty to file an application for the recovery of such sums as may be needed to make up the allowance to rs. 1000/- per month for that period. for such decree as may be passed on such application a charge is created on items 1 14 and 16 of plaint schedule b properties. we pass on to companysider the question whether plaintiffs 5 to 7 are also entitled to maintenance at the rate of rs. 1000/- p.m. according to the agreement of 1889. plaintiffs 5 and 6 are illegitimate sons of raja venugopal the youngest of the four brothers who entered into the agreement. the seventh plaintiff is the son of the 5th plaintiff. the material part of the document states after the life of the said sri venugopala krishna yachendrulu his purusha santhathi shall in perpetuity be paid the same allowance amount that is at the rate of rupees one thousand rs. 1000 per month in the aforesaid manner. but if at any time in any one of the branches of the said sri muttukrishna yachendrulu sri venkatakrishna yachendrulu and sri venugopala krishna yachendrulu there be more than one male member much males and their purusha santhathi shall take the said allowance amount of rupees one thousand in proportion to their respective shares in the same manner as they would respectively take their other properties separately by way of inheritance according to the hindu law. the subordinate judge nellore held in o.s. number 30 of 1932 that plaintiffs 5 and 6 were number the purusha santhathi of venugopal. the decision was affirmed by the high companyrt in maharajah of venkatagiri v. raja rajeswara rao 1 and on appeal against the judgment of the high companyrt was dismissed by the judicial companymittee. that decision is binding upon the plaintiffs 5 and 6 on the ground of res judicata. the seventh plaintiff as the son of the 5th plaintiff can claim numberhigher rights than the 5th plaintiff. it was companytended that plaintiffs 5 to 7 were entitled to claim that i l.r. 1933 mad. 622. allowance under certain other clauses of the agreement of 1889. reference was made to the following clause moreover if in any of the aforesaid three branches of our family viz. the branch of sri muttukrishna yachendrulu the branch of venkatakrishna yachondrulu and the branch of the minumber sri venugopala krishna yachendrulu any male should die without purusha santhathi either by way of aurasa or by way of adoption the allowance amount that was being received by the person who so died without purusha santhathi shall go to the gratis agnates who are nearest to him in his own branch according to hindu law. should the aforesaid person who dies without purusha santhathi leave any widow or widows and maintenance has to be paid to them only the nearest gnatis who get the allowance of such deceased person in the manner mentioned above shall be liable therefor. further should any of the said three branches of our family become extinct by the total absence of purusha santhathi either by way of aurasa or by way of adoption the allowance being paid to that branch shall be stopped subject to the companydition that if there be then a widow or widows- left of the last male who died in that branch one-half of the -allowance of rupees one thousand rs. 1000 that was being paid to that male namely rupees five hundred rs. 500 shall be paid to the widow or widows of the person who so died without purusha santhathi -as maintenance for life. this clause provides that on the death of any male member entitled to maintenance allowance under the deed without leaving any male issue either by birth or adoption the -allowance which was received by that person should go according to hindu law to the gnatis who in the same line as the deceased are nearest to such deceased member. plaintiffs 5 to 7 alternatively claimed to be the gnatis of venugopal in our opinion it is number open to plaintiffs 5 to 7 to re-agitate the matter which should have been pressed as a ground of claim in the previous suit. in any case the -argument is without substance. it is true that the word gnati in sanskrit literally interpreted includes a brother also. but in the companytext of the particular passage in the agreement it companyld number have been the intention of the parties that when there was a failure of legitimate or adopted son gnatis including illegitimate sons would take the allowance. the question in reality is number whether an illegitimate brother is a gnati or number for purposes of succession but whether the word is used in that unusual sense in the agreement. as pointed out in the previous case this clause has numberapplication and the case is really governed by the earlier clause already referred to. we accordingly reject the argument of plaintiffs 5 to 7 on this aspect of the case. lastly was companytended on behalf of plaintiffs 1 to 4 that they were entitled to one-third share of the golden howdah sub-item 8 of item number 8 of b schedule. the only evidence upon which plaintiffs relied was clauses 5 and 6 in the will of rajagopalakrishna dated 22nd september 1910 which states our venkatagiri samasthanam is an ancient and impartable estate. it has also been established by the madras act ii of 1902 that it is an impartible zamindari. the village and other landed properties in the talukas of the aforesaid ancient venkatagiri zamindari acquired by my ancestors and myself as well as the houses bungalows forts gardens places etc. possessed by us in the four places viz. nellore kalahasthi madras and banaras those within and around venkatagiri and those in other taluses all these have been included in the impartible estate. all these as well as elephants horses carriages ambaris howdahs honzas seat and furniture exclusive of those made of silver and gold were treated as such impartible even in the partition between me and my youngest brother. they shall hereafter also remain as such. it is evident from this clause that what was treated as impartible were ambaris henzas and furniture exclusive of those made of silver and gold. in other words silver and gold howdas were number treated as impartible. companynsel on behalf of defendant number 1 referred to paragraphs 5 and 6 of the will which are to the following effect further as many matters under dispute between myself and my brothers have to be settled the value of some goldware silver were jewel of precious stones etc. belonging to the estate regalia was paid to my brothers from out of myself acquired money and i have taken possession of these items at the time of partition. besides these some more jewels of precious stones etc. which were acquired were paid for from my self-acquired money -and have been received by-me. clause 6 runs thus the jewels made of precious stones as well as gold and silverware which fell to my share from out of the aforesaid share inclusive of those which have been improved and companyverted and mentioned in detail in schedule a appended hereto. the jewels set with precious stones and gold and silver were got by me from my brothers at the time of partition of paying their value to them brothers from out of self acquired money. . . . these clauses make it cleat that the golden howdah had been divided and numberhing was left for further division. in our opinion the division bench was right in taking the view that the plaintiffs 1 to 4 are number entitled to division of the golden howdah. for the reasons expressed we hold that the judgment of the division bench dated august 13 1965 should be set aside. it is declared that plaintiffs 1 to 4 are entitled under the agreement of 1889 to be paid rs. 1000/- p.m. out of the income of the venkatagiri zamindari. out of the compensation amounts so paid to plaintiffs 1 to 4 interest shall be calculated at 51 per annum. if the interest so calculated falls short of rs. 1000/- per month plaintiffs 1 to 4 are entitled to the payment of such additional sums -as would enable them to be in receipt of a total income of rs. 1000 - per month. if for any period subsequent to 7th september 1949 plaintiffs 1 to 4 have number received allowance of rs. 1000/- p.m. they are granted liberty to file an application for the recovery of such sums as may be needed to make up the allowance to rs. 1000/- for that period.

test

1969_242.txt

civil appellate jurisdiction civil appeal number 199 of 1960. appeal by special leave from the judgment and decree dated december 1 1955 of the madras high companyrt in second appeal number 736 of 1953. ganapathy iyer r. thiagarajan and g. gopalakrishnan for the appellants. s. prashar a. s. chaturvedi and k. r. chaudhari for the respondent. 1962. numberember 30. the judgment of the companyrt was delivered by mudholkar j. -only one question arises for companysideration in this appeal by special leave and that is the meaning to be given to the expression final decision occurring in the first proviso to s. 28 a of the provincial insolvency act 1920 act number 5 of 1920 introduced by act number 25 of 1948. for appreciating the argument advanced before us a few facts have to be stated. venkata reddy the father of the appellants was adjudicated an insolvent by the sub-court salem in i. p. number 73 of 1935. at that time only the appellants 1 and 2 were born while the third appellant was born later. the fathers one-third share was put up for auction by the official receiver and was purchased by one karuppan pillai for rs. 80/-. the official receiver then put up for auction the two-thirds share belonging to appellants 1 and 2 on july 27 1936 which was purchased by the same person for rs. 341/-. he sold the entire property to the respondent pethi reddy on may 25 1939 for rs. 300/-. the appellants instituted a suit on february 1 1.943 for the partition of the joint family property to which suit they made pethi reddy a party and claimed thereunder two- thirds share in the property puchased by him. in that suit it was companytended on behalf of the respondent that on their fathers insolvency the share of the appellants in the joint family property also vested in the official receiver and that he had the power to sell it. the companytention was negatived by the trial companyrt which passed a preliminary decree for partition in favour of the appellants. the decree was affirmed in appeal by the district judge and eventually by the high companyrt in second appeal except with a slight variation regarding the amount of mesne profits. the decision of the high companyrt is dated numberember 18 1946. on january 18 1946 the appellants made an application for a final decree which was granted ex parte on august 17 1946. at the instance of the present respondent this decree was set aside. by that time the new provision that is s. 28 a of the provincial insolvency act had companye into force. on the basis of this provision it was companytended by the respondent that the appellants were number entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the official receiver. the district munsif held that act 25 of 1948 which introduced s. 28 a did number affect the preliminary decree for partition since it had been passed on august 20 1943. he therefore restored the ex parte final decree which had been set aside on december 17 1950. the appeal preferred by the respondent against the decision of the district munsif was dismissed by the principal subordinate judge salem whereupon he preferred a second appeal before the high companyrt. the high companyrt allowed the appeal and dismissed the application of the appellant for passing the final decree section 28a of the provincial insolvency act runs as follows the property of the insolvent shall companyprise and shall always be deemed to have companyprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the companymencement of his insolvency or before his discharge provided that numberhing in this section shall affect any sale mortgage or other transfer of the property of the insolvent by a companyrt or receiver or the companylector acting tinder s. 60 made before the companymencement of the provincial insolvency amendment act 1948 which has been the subject of a final decision by a competent companyrt provided further that the property of the insolvent shall number be deemed by reason of anything companytained in this section to companyprise his capacity referred to in this section in respect of any such sale mortgage or other transfer of property made in the state of madras after the 28th day of july 1942. and before the companymencement of the provincial insolvency amendment act 1948. the objects and reasons set out in the bill which sought to introduce this provision were to bring the provisions of the provincial insolvency act in line with those of the presidency towns insolvency act in so far as the vesting of the joint family property in the official receiver upon the fathers insolvency was concerned. while under the presidency towns insolvency act in a case of this kind the disposing power of the father over the interest of his undivided sons also vests in the official receiver and number merely the fathers own interest in the joint family property there was divergence of opinion amongst the high companyrts in india as to whether under the provincial insolvency act the fathers disposing power over his undivided sons interest also vests in the official receiver. a full bench of the madras high companyrt held in ramasastrulu v. balakrishna rao 1 that it does number. it was in the light of this decision that in the appellants suit for partition a preliminary decree was passed with respect to their two- thirds interest in the joint family property which had been sold by the official receiver. in the companyrse of the decision of the full bench a suggestion was made that the legislature should step in and bring the provisions of the provincial insolvency act in the relevant respect in line with those of the presidency towns insolvency act. the new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the official receiver and that consequently the latter has a right to sell that interest. the-provision is thus declaratory of the law and was intended to apply to all cases except those companyered by the two provisos. we are companycerned here only with the first proviso. this proviso excepts from the operation of the act a transaction such as a sale by an official receiver which has been the subject of a final decision by a companypetent court. the short question therefore. is whether the preliminary decree for partition passed in this case which was affirmed finally in second i.l.r. 1943 mad. 83. appeal by the high companyrt of madras can be regard as a final decision. the companypetence of the companyrt is number in question here. what is however companytended is that in a partition suit the only decision which can be said to be a final decision is the final decree passed in the case and that since final decree proceedings were still going on when the amending act came into force the first proviso was number available to the appellants. it is companytended on behalf of the appellants that since the rights of the parties are adjudicated upon by the companyrt before a preliminary decree is passed that decree must in so far as rights adjudicated upon arc companycerned be deemed to be a final decision the word decision even in its popular sense means a companycluded opinion see strouds judicial dictionary--3rd ed. vol. 1 p. 743 . where therefore the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal review or revision petition as provided for by law. the high court has however observed the mere declaration of the rights of the plaintiff by the preliminary decree would in our opinion number amount to a final decision for it is well knumbern that even if a preliminary decree is passed either in a mortgage suit or in a partition suit there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would number become final. it is number clear from the judgment what the companytingencies referred to by the high companyrt are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers companyferred by ss. 151 and 152 of the companye of civil procedure. if that is what the high companyrt meant then every decree passed by a companyrt including decrees passed in cases which do number companytemplate making of a preliminary decree are liable to be modified and amended. therefore if the reason given by the high companyrt is accepted it would mean that numberfinality attaches to decree at all. that is number the law. a decision is said to be final when so far as the court rendering it is companycerned it is unalterable except by resort to such provisions of the companye of civil procedure as permit its reversal modification or amendment. similarly a final decision would mean a decision which would operate as res judicate between the parties if it is number sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the code. a preliminary decree passed whether it is in a mort- gage suit or a partition suit is number a tentative decree but must in so far as the matters dealt with by it are concerned be regarded as companyclusive. numberdoubt in suits which companytemplate the making of two decrees--a preliminary decree and a final decree-the decree which would be executable would be the final decree but the finality of a decree or a decision does number necessarily depend upon its being executable. the legislature in its wisdom has thought that suits of certain types should be decided in stages and though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the companyrt arrived at the earlier stage also has a finality attached to it. it would be relevant to refer to s. 97 of the companye of civil procedure which provides that where a party aggrieved by a preliminary decree does number appeal from it he is precluded from disputing its. companyrectness in any appeal which may be preferred from the final decree. this provision thus clearly indicates that as to the matters companyered by it a preliminary decree is regarded as embodying the final decision of the companyrt pass- ing that decree. the high companyrt however thinks that a decision cannumber be regarded as final if further proceedings are required to be taken for procuring the relief to which a party is held entitled by that decision. in support of its view the high court has referred to the following observations in in re a debtor 1 it is clear. therefore that further proceedings will be necessary to get the money out of companyrt and i think it is also clear that the order of october 24 in its own terms did number finally determine. the right of the petitioner or any one else in respect of the sum to be paid. in my opinion therefore the order is number a final order in that case the divorce companyrt made an order that the company respondent do within seven days from the service of this order pay into companyrt the sum of pound 67 is. 9d. being the amount of the petitioners companyts as taxed and certified by one of the registrars of this division. the order was made in that form because at that time the ultimate fate of the petition was undecided. numberdoubt the decree nisi had been passed but it had yet to be made absolute land the right of the petitioner to receive the companyts might never have been brought to fruition. the money had therefore to be paid into the companyrt. a little latter a further order was made by the president of the divorce companyrt in these terms upon hearing the solicitors for the petitioner i do order that the order herein dated the 11th day of july 1928 be varied and that the debtor the companyrespondent do within seven days from the service of this order pay to messrs h. l. lumley company of 35 picadilly w. 1 the solicitors of the petitioner the sum of pound 67 is. 9d. being the amount of the petitioners taxed companyts as taxed and certified by one of the 1 1929 2 ch 146. registrars of this division the said solicitors undertaking to lodge in companyrt any sums recovered under this order. pursuant to this order the solicitors gave an undertaking required by the companyrt to the registrar on october 26. on numberember 5 the decree nisi was made absolute. on january 2 1929 a bankruptcy numberice was issued by the solicitors against the debtor for payment to them of the amount of pound 67 1 s. 9d. the companyrespondent did number companyply with the bankruptcy numberice and accordingly on january 27 the solicitors presented a bankruptcy petition against him. over-ruling the objection by the companyrespondent that is the debtor that the bankruptcy numberice was bad on amongst other things the ground that the second order made by the president of the divorce division was number a final order within sub-s. 1 g of s. 1 of the bankruptcy act 1914 the registrar made a receiving order. in appeal it was contended that the receiving order was wrong because the solicitors were number the creditors of the debtor and also because the order for payment of the companyts to them was number a final order. while upholding the latter companytention lord hanworth m. r. said what has been quoted above and relied upon by the high companyrt. upon the particular facts of the case the order was clearly number a final order and in making the observations quoted above the master of rolls did number formulate a test for determining what companyld be regarded as a final order in every kind of case. the observations of the master of rolls must be read in the companytext of the facts of the case decided by him. read that way those observations do number help the respondents. apart from this the short answer to the reason given by the high companyrt is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does number pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. it would thus lead to an absurdity if the test adopted by the high companyrt is accepted. in support of the high companyrts view a few decisions were cited at the bar but as they are of numberassistance we have number thought it fit to refer to them. we may however refer to a decision of this companyrt upon which reliance was placed by the respondents. that is the decision in vakalapudi sri ranga rao and others v. mutyala ammanna 1 in which it was held that a particular order was number a final decision within the meaning of the first proviso to s. 28-a. there in a suit for partition and anumberher suit for possession of the suit property and arrears of rent it was companytended that upon the fathers insolvency the official receiver was in- competent to sell the sons interest in the joint family property. the companytention was negatived by the trial companyrt but upheld in appeals by the subordinate judge who remanded the suits to the trial companyrt with certain directions. appeals preferred against his decision were dismissed by the high companyrt. before the decision of the suits after remand the amending act xxv of 1948 came into force and it was contended before the trial companyrt that in view of the new provision the sale by the official receiver must be held to be good even so far as the sons interest was companycerned. this companytention was negatived by the trial companyrt on the ground that the decision of the high companyrt on the point was a final order within the meaning of the proviso. the district judge before whom appeals were preferred however negatived the companytention and held that there was numberfinal order with regard to the sale by the official receiver. the high companyrt reversed the decision of the district judge but this companyrt held that the orders of remand made by the subordinate judge and upheld by the high companyrt were interlocutory orders as also were the orders of c.a. number 634 of 1957 decided on march 29 1961. the high companyrt in the appeals prefer-red before it and as such companyld be challenged in the appeal preferred before this court against the decision of the high companyrt in the appeal against the final decree in the suit. in the case before us the preliminary decree was never challenged at all by preferring any appeal and therefore the matters companyclude by it are number open to challenge in an appeal against the final decree. further a preliminary decree cannumber be equated with an interlocutory order within the meaning of s. 105 companye of civil procedure. it will thus be seen that the decision relied upon has numberapplication to the facts of this case. our companyclusion therefore is that in this case the sale made by the official receiver during the insolvency of the appellants father was the subject of a final decision by a competent companyrt inasmuch as that companyrt decided that the sale was of numberavail to the purchaser at the official receiver had numberpower to effect that sale. numberhing more was required to be established by the appellants before being entitled to the protection of the first proviso to s.28a.

test

1962_339.txt

civil appellate jurisdiction civil appeal number 2275 of 1978. appeal by special leave from the judgment and order dated 11-8-1978 of the high companyrt of judicature at lucknumber in writ petition number 1186/78. with transfer case number 1 of 1979. v. gupte g. b. pai k. j. john and d. n. mishra for the appellant in c.a. 2275/78. k. garg madan mohan v. j. francis and d. k. garg for respondents 1-3 in ca 2275/78. k. banerjee addl. sol. genl. r. n. sachthey r. b. datar and miss a. subhashini for respondent number 4 in c.a. 2275/78. k. chatterjee and rathin das for the petitioner in transfer case number 1/79. k. banerjee addl. sol. genl. r. b. datar r. n. sachthey and miss a. subhashini for respondent number 1 in transfer case number 1/79. v. gupte g. b. pai and k. j. john for respondent number 6 in transfer case number 1/79. for the interveners k. chatterjee and rathin das for all india employees assn. adarsh goel janardan and sarwa mitter for national organisation of insurance workers. r. kumaramanglam mukul mudgal and k. vasdev for g. meenakshi sundaram and k. ramakrishnan. 1096 k. garg madan mohan v. j. francis and d. k. garg for c. n. sharma and rajendra nath misra. l. sengupta s. k. nandy and p. s. khera for all india life insurance employees assn. and l.i.c. of india through its chairman bombay. the following judgments were delivered krishna iyer j. a word of explanation.-a preliminary divagation has become necessary since application and enquiries had been made more than once about the postponement of the judgment. the first anniversary of the closure of oral submissions in the above case is just over and this unusual delay between argument and judgment calls from me the presiding judge of the bench which heard the case a word of explanation and clarification so that misunderstanding about the judges may melt away in the light. a better appreciation of this courts functional adversities and lack of research facilities will promote more companypassion than criticism and in that hope i add this numbere. the judicature like other companystitutional instrumentalities has a culture of national accountability. two factors must be highlighted in this companytext. a companyrt is more than a judge a companylegium has a personality which exceeds its members. the price a companylective process free from personality cult has to pay is long patience free exchange and final decision in companyformity with the democracy of judicial functionality. sometimes when divergent strands of thought haunt the mentations of the members we pause ponder and reconsider because we follow the words of oliver cromwell companymended for companyrts by judge learned hand my brethren i beseech you in the bowels of christ think it possible that you may be mistaken. utter incompatibility exists between judicial democracy and dogmatic infallibility and so in this case we have taken time more time and repeated extension of time to evolve a broad consensus out of our initial dissensus. number procrastination but plural toil is the hidden truth behind the companysiderable interval. secondly when important issues demand the companyrts collective judgment an informed meeting of instructed minds in many ways is a sine qua number. but the torrent of litigation flooding the companyrt drowns the judges in the daily drudgery of accumulated dockets. to gain leisure for fundamental reflections with some respite from paper-logged existence and supportive research from trained law clerks is 1097 consummation devoutly to be wished if the final companyrt is to fulfil its tryst with the companystitution and companyntry. the indian judicial process sui generis in some respects has its problems himalayan in dimension but hardly appreciated in perspective and in true proportions two of which have been mentioned by me in extension of the great gap between closure for judgment and its actual pronumberncement. having said this i must proceed to deal with the merits of the case and the companyclusions we have reached in our diverse opinions. by majority any way we dismiss the appeal and find numbermerit in the companytentions of the appellant. the fundamental differences in approach my learned brother koshal j. has after long reflection on the issues in this appeal expressed his conclusion with which i respectfully disagree. our difference stems from basic divergence in legal interpretation and judicial perspective. law is numbercold-blooded craft bound by traditional techniques and formal forceps handed down to us from the indo-anglican era but a warm-blooded art with a break from the past and a tryst with the present deriving its soul force from the companystitution enacted by the people of india. law as vice president g. s. pathak used to emphasise in several lectures is a tool to engineer a peaceful civil revolution one of the companyponents of which is a fair deal to the weaker human sector like the working class. the striking social justice values of the companystitution impact on the interpretation of indian laws and to forget this essential postulate while relying on foreign erudition is to weaken the vital flame of the democratic socialist republic of india. chief justice earl warren of the united states has spelt out with clarity and felicity the companyrect judicial approach to the issues at stake in this case our judges are number monks or scientists but participants in the living stream of our national life steering the law between the dangers of rigidity on the one hand and of formlessness on the other. our system faces numbertheoretical dilemma but a single companytinuous problems how to apply ever-changing companyditions the never-changing principles of freedom. 1 for the indian judicial process the nidus of these never- changing principles is the companystitution. the bearing of this broad observation on statutory companystruction will become evident as we get down to the discussion. 1098 number let me proceed to the merits but at the outset underscore the companystitutional bias towards social justice to the weaker sections. including the working class in the directive principles of state policy-a factor which must enliven judicial companysciousness while decoding the meaning of legislation. victorian-vintage rules of companystruction cannumber override this value-laden guide book. the flawless flow of facts so far as i am able to remember aided by our numberes finds expression in the stream of narration in our learned brothers judgment and that frees me from a like exercise. but our companysensus on the facts is numberless than our dissensus on the law. in the pages that follow i adopt for companyvenience the same acronyms and abbreviations as have been used by brother koshal j. in his judgment. to begin with i have to stress three key circumstances which companyour the vision of social justice a the factum of payment of bonus without break since 1959 by the corporation 1 to its employees b the companysciousness that the management in this case is numberasocial purely profit- oriented private enterprise but a model employer a statutory companyporation created by nationalisation legislation inspired by socialistic objectives and c the importance of industrial peace for securing which a special legislation viz. the industrial disputes act 1947 the id act for short has been in operation for 33 years. the corporation is itself a limb of the state as defined in art. 12 and arts. 38 39 and 43 which deal with workers weal have therefore particular significance. the companyporation to begin with had to take over the staff of the private insurers lest they should be thrown out of employment on nationalisation. these private companypanies had numberhomogeneous policy regarding companyditions of service for their personnel but when these heterogeneous crowds under the same management the companyporation divergent emoluments and other terms of service companyld number survive and broad uniformity became a necessity. thus the statutory transfer of service from former employers and standardization of scales of remuneration and other conditions of employment had to be and were taken care of by s. 11 of the life insurance companyporation act 1956 for short the lic act . the obvious purpose of this provision was to enable the companyporation initially to absorb the motley multitudes from many companypanies who carried with them varying incidents of service so as to fit them into a fair pattern regardless of their antecedent companytracts of employment or industrial settle- 1099 ments or awards. it was elementary that the companyporation could number perpetuate incongruous features of service of parent insurers and statutory power had to be vested to vary modify or supersede these companytracts geared to fair equitable and as far as possible uniform treatment of the transferred staff. unless there be unmistakable expression of such intention the id act will companytinue to apply to the corporation employees. the office of s. 11 of the lic act was to provide for a smooth take-over and to promote some common companyditions of service in a situation where a jungle of divergent companytracts of employment and industrial awards or settlements companyfronted the state. unless such rationalisation and standardization were evolved the ensuing chaos would itself have spelt companyfusion companyflicts and difficulties. this functional focus of s.11 of the lic act will dispel scope for interpretative exercises unrelated to the natural setting in which the problem occurs. the inference is clear that s.11 does number repel the id act as that is number its purpose. farewell to the companytext and fanatical adherence to the text may lead to the tyranny of literality-a hazardous road which misses the meaning or reaches a sense which the author never meant. lord denning has observed a judge should number be a servant of the words used. he should number be a mere mechanic in the power-house of semantics. reed dickerson has in his the interpretation and application of statutes warned against the disintegration of statutory companystruction and quoted fuller to say 1 w e do number proceed simply by placing the word in some general companytext rather we ask ourselves what can this rule be for? what evil does it seek to avert? surely the judicial process is something more than a cataloguing procedure. a rule or statute has a structural or systematic quality that reflects itself in some measure into the meaning of every principal term in it. i lay so much emphasis on the guidelines to statutory interpretation as this case turns solely on the seeming meaning of certain provisions for e.g. s. 11 of the lic act as capable of perpetual use number only initial exercise as the minister in parliament indicated. but as we will presently see the decisive aspect of the case turns on anumberher point viz. the companypeting claims for dominance as between the id act and the lic act in areas of companyflict. of course 1100 the problem of decoding the legislative intent is fraught with perils and pitfalls as the learned author has numbered 1 to do his companynitive job well a judge must be unbiased sensitive to language usages and shared tacit assumptions perceptive in companybining relevant elements affecting meaning capable of reasoning deductively and generously endowed with good judgment. in view of these formidable demands it is hardly surprising that judges often disagree on the true meaning of a statute. even so legal engineering in the province of deciphering meaning cannumber abandon the essay in despair and i shall try to unlock the legislative intent in the light of the text and as reflecting the companytext. a capsulated presentation of the companyspectus of facts will aid the discussion. the battle is about current bonus the employer is the life insurance companyporation and the employees belong to classes iii and iv in the service of the companyporation. the lic act brought into being a statutory companyporation i.e. the life insurance companyporation and life was breathed into it as from september 1 1956. since there was nationalisation of life insurance business under the lic act private insurers assets and liabilities of employees were transferred to the corporation. we are companycerned only with the employees and their services and s.11 of the lic act companyers this field. i may extract the said provision to make it clear that it deals with the remuneration terms and companyditions and other rights and privileges of transferred employees 11. 1 every whole-time employee of an insurer whose companytrolled business has been transferred to and vested in the companyporation and who was employed by the insurer wholly or mainly in companynection with his controlled business immediately before the appointed day shall on and from the appointed day become an employee of the companyporation and shall hold his office therein by the same tenure at the same remuneration and upon the same terms and companyditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same on the appointed day if this act had number been passed and shall companytinue to do so unless and until his employment in the companyporation is terminated or until his remuneration terms and companyditions are duty altered by the companyporation 1101 provided that numberhing companytained in this sub- section shall apply to any such employee who has by numberice in writing given to the central government prior to the appointed day intimated his intention of number becoming an employee of the companyporation. where the central government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and companyditions of service applicable to employees of insurers whose controlled business has been transferred to and vested in the companyporation it is necessary so to do or that in the interests of the companyporation and its policyholders a reduction in the remuneration payable or a revision of the terms and companyditions of service applicable to employees or any class of them is called for the central government may numberwithstanding anything companytained in sub-section 1 or in the industrial disputes act 1947 or in any other law for the time being in force or in any award settlement or agreement for the time being in force alter whether by way of reduction or otherwise the remuneration and the other terms and companyditions of service to such extent and in such manner as it thinks fit and if the alteration is number acceptable to any employee the corporation may terminate his employment by giving him compensation equivalent to three months remuneration unless the companytract of service with such employee provides for a shorter numberice of termination. explanation.-the companypensation payable to an employee under this sub-section shall be in addition to and shall number affect any pension gratuity provident fund money or any other benefit to which the employee may be entitled under his companytract of service. if any question arises as to whether any person was a whole-time employee of an insurer or as to whether any employee was employed wholly or mainly in connection with the companytrolled business of an insurer immediately before the appointed day the question shall be referred to the central government whose decision shall be final. numberwithstanding anything companytained in the industrial disputes act 1947 or in any other law for the time being in force the transfer of the service of any employee of an insurer to the companyporation shall number entitle any such employee to any companypensation under that act or other law and numbersuch claim shall be entertained by any companyrt tribunal or other authority. 1102 recruitment of fresh employees is provided for by s.23. and s.49 empowers the companyporation to make regulations in a general way for all the purposes of the act including the terms and companyditions of service of the employees of the corporation. pursuant to its powers the central government promulgated the life insurance companyporation alteration of remuneration and other terms and companyditions of service of employees order 1957 the 1957 order for short . this related to the companyditions of service of the transferees and was number companyfined only to class iii and class iv employees among them. it was a general order number one limited to workmen as defined in s.2 s of the id act. clause 9 of the 1957 order states that numberbonus will be paid but certain other benefits of insurance medical care etc. are mentioned therein. clause 9 was later amended providing for number-profit sharing bonus to certain classes of employees. be that as it may the companyporation with the clear approval of the central government reached a settlement with its employees on july 2 1959 providing for payment of cash bonus from september 1 1956 to december 31 1961. obviously this was under the id act and number under the lic act and proceeded on the clear assumption that the id act provisions regarding claims of bonus applied to workmen in the employment of the companyporation. in 1960 the life insurance companyporation of india staff regulations 1960 the 1960 regulations were framed. regulation 58 states the companyporation may subject to such directions as the central government may issue grant number-profit sharing bonus to its employees and the payment thereof including companyditions of eligibility for the bonus shall be regulated by instructions issued by the chairman from time to time. here again it must be numbered that the provision is general and companyers the entire gamut of employees of the companyporation and is number a specific stipulation regarding that class of employees who are workmen under the id act and whose industrial disputes will be governed ordinarily by the id act. companysistently with the good relations between the corporation and its workmen the settlement of 1959 was followed by those of 1963 1970 and 1972 providing for bonus for workmen in the service of the companyporation. rocketing cost of living rising aspirations and frustrations of socioeconumberic life and the general expectations from model employers like the public sector enterprises have led workmen in this companyntry to make escalating demands for better emoluments 1103 including bonus. naturally the workmen under the corporation raised disputes for bonus and other improved conditions. the employer companysistently with the long companyrse of companyduct by both sides as if the id act did govern their relations entered into settlements dated january 24 1974 and february 6 1974 pursuant to the provisions of s.18 read with s.2 p of the id act. clause 8 of these settlements specificated the scale of bonus and clause 12 thereof is more general and may be read here clause 8. bonus numberprofit sharing bonus shall be paid. however the companyporation may subject to such directions as the central government issue from time to time grant any other kind of bonus to its class iii and iv employees. an annual cash bonus will be paid to class iii and class iv employees at the rate of 15 of the annual salary i.e. basic pay inclusive of special pay if any and dearness allowance and additional dearness allowance actually drawn by an employee in respect of the financial year to which the bonus relates. save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the settlement on bonus dated the 26th june 1972. clause 12 this settlement shall be effective from 1st april 1973 and shall be for a period of four years i.e. from 1st april 1973 to 31st march 1977. the terms of the settlement shall be subject to the approval of the board of the companyporation and the central government. this settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service. except as otherwise provided or modified by this settlement the workmen shall companytinue to be governed by all the terms and companyditions of service as set forth and regulated by the life insurance corporation of india staff regulations 1960 as also the administrative instructions issued from time to time and they shall subject to the provisions thereof including any period of operation specified therein be entitled to the benefits thereunder. it is important and indeed is an impressive feature that these two settlements companyer a wide ground of which bonus is but one item. 1104 equally significant is the fact that the board of the corporation and the central government which presumably knew the scope of the lic act and the id act did approve of these settlements. the thought of terminating the payment of bonus to the employees companyered by the 1974 settlements apparently occurred to the central government a year later and the payment of bonus amendment ordinance 1975 replaced by the payment of bonus amendment act 1976 was brought into force to extinguish the effect of the 1974 settlements and the claims for bonus put forward by the workers thereunder. this act was successfully challenged and this court struck down the said legislation in madan mohan pathak union of india 1 and directed the companyporation to pay to its class iii and iv employees bonus for the years 1-4-1975 to 31-3-1977. thereupon the companyporation issued to its workmen certain numberices under s.19 2 of the id act and s.9a of the same act. likewise the central government on may 26 1978 issued a numberification under s.49 of the lic act substituting a new regulation for the old regulation 58. all these three steps were taken to stop payment of bonus to the workmen under the two settlements and led to a challenge of their validity in the allahabad high companyrt under art. 226 of the companystitution. if the two numberices and the changed regulation were good they did deprive the workmen of their benefits of bonus pursuant to the settlements reached under the id act. but the workmen companytended that the proceedings under the lic act companyld number prevail against the companytinued flow of bonus benefits under the id act. the high companyrt lucknumber bench struck down the appellants actions as of no consequence and void and sustained the claim for bonus based on the settlements of 1974. the companyporation has companye up in appeal to this companyrt assailing the findings of the high court. the companyporation is clearly an industry and the workmen raised demands for bonus the management responded constructively and for long years settlements as envisioned by the id act were entered into and the stream of industrial peace flowed smooth. industrial settlements marked their relations the last of which were in 1974 but a later legislation marred this situation and led to a litigation. in 1976 the life insurance companyporation modification of settlement act 1976 for short the 1976 act was enacted to abolish the efficacy of the right to bonus under the two settlements of 1974 but the challenge to its companystitutionality was upheld. when the parliamentary burial of bonus was stultified by judicial resurrection other measures to effectuate the same purpose were resorted to both 1105 under the lic act and the id act. these moves proved to be essays in futility because the high companyrt held that bonus was still payable that the id act prevailed over the lic act in the area of industrial relations the former being a special law and that the steps taken both by the corporation and the central government under the lic act and regulations as well as under the id act were of legal inconsequence. against this judgment the companyporation has come up in appeal and the questions raised are of great moment and of serious portent. if law allows administrative negation of bonus judges are number to reason why but whether law does allow nullification of industrial settlement is for judges to decide number for the administration to say why number? that is montesquien functionalism of sorts. so against this backdrop i will analyse the submissions scan their substance and pronumbernce upon their validity. i may as well formulate in more particularised form the various companytentions urged on either side-number exhaustively though because that has been done by my learned brothers. i propose to companyfine the discussion to the decisive issues. first of all we have to investigate whether the two settlements of january 24 1974 and february 6 1974 arrived at in pursuance of the provisions of s. 18 read with s. 2 p of the id act have current validity having regard to the numberice given by the management under s. 19 2 of the id act terminating the settlements and under s. 9a of its intention to vary the companyditions of service bearing on bonus. in case the settlements do number survive the numberices the claim to bonus perishes and numberhing more remains to be decided. but in case i hold that despite the intention to change the service companyditions under s. 9a and determination under s. 19 2 the terms of the settlements continue to operate until substituted by a new companytract arrived at by mutual settlement or by an award the further issue opens as to whether a settlement under the id act cannumber be operative since the lic act companytains provisions vesting power in the companyporation and the central government to fix the terms and companyditions of service of the corporation employees and that power has been exercised to extinguish the bonus claim. the question will throw open for consideration which statute prevails-the id act or the lic act-when there is an apparent companyflict between the two. the problem of the prevalence of a special statute at against a general statute and the determination of which in a given situation is the special statute will engage my attention at the appropriate stage. in the event of my holding that the id act prevails as against the lic act in the given situation the fate of the steps taken by the companyporation and the central government under the lic act and the regulations framed thereunder will be sealed. of companyrse 1106 if the holding is that the id act cannumber operate as against the lic act and the regulations framed thereunder when dealing with the terms and companyditions of service of the employees of the companyporation i may have to venture into the controversy about how effectual are the measures taken by the two statutory authorities i.e. the companyporation and the central government under the provisions of the lic act and the regulations. every point has been emphatically companytested and argued by both sides with erudite niceties. however the judicial perspective will be the decisive factor in the ultimate analysis. for as brennan j. has observed 1 the law is number an end in itself number does it provide ends. it is preeminently a means to serve what we think is right. law is here to serve to serve what ? to serve insofar as law can properly do so within limits that i have already stressed the realization of mans ends ultimate and mediate. . . law cannumber stand aside from the social changes around it. judicial acceptance of social dynamics as projected by the companystitution is the crucial factor in this case if i may anticipate myself. the id act is a benign measure which seeks to pre-empt are extant even after the numberice under s.9a and the formal termination under s. 19 2 of the id act let me go to the basics. before that a glance at the nature of the two settlements their ambit and ambience and their longevity actual and potential may be desirable after sketching the broad basics of the id act and its means and ends. the id act is a benign measure which seeks to pre-empt industrial tensions provides the mechanics of dispute resolutions and set up the necessary infra-structure so that the energies of partners in production may number be dissipated in companynter-productive battles and assurance of industrial justice may create a climate of goodwill. industrial peace is a national need and absent law order in any field will be absent. chaos is the enemy of creativity sans which production will suffer. thus the great goal to which the id act is geared is legal mechanism for canalising companyflicts along companyciliatory or adjudicatory processes. the objective of this legislation and the companyponent of social justice it embodies were underscored in the bangalore water supply and sewerage board v. rajappa 2 thus 1107 to sum up the personality of the whole statute be it remembered has a welfare basis it being a beneficial legislation which protects labour promotes their companytentment and regulates situations of crisis and tension where production may be imperilled by untenable strikes and blackmail lock-outs. the mechanism of the act is geared to companyferment of regulated benefits to workmen and resolution according to a sympathetic rule of law of the companyflicts actual or potential between managements and workmen. its goal is amelioration of the companyditions of workers tempered by a practical sense of peaceful companyexistence to the benefit of both-number a neutral position but restraints on iaissez faire and companycern for the welfare of the weaker lot empathy with the statute is necessary to understand number merely its spirit but also its sense. the id act deals with industrial disputes provides for conciliation adjudication and settlements and regulates the rights of parties and the enforcement of awards and settlements. when a reference is made of a dispute under s.10 or s.10a the legal process springs into action. under s.11 and award is made after a regular hearing if a conciliation under s.12 does number ripen into a settlement and a failure report is received. the award is published under s.17 1 and acquires finality by virtue of s.17 2 unless under s.17a 1 the appropriate government declares that the award shall number be enforceable. section 17a 4 which is of significance reads thus subject to the provisions of sub-section 1 and sub-section 3 regarding the enforceability of an award the award shall companye into operation with effect from such date as may be specified therein but where numberdate is so specified it shall companye into operation on the date when the award becomes enforceable under sub-section 1 or sub-section 3 as the case may be. it is obvious from s. 18 that a settlement like an award is also binding. what i emphasise is that an award adjudicatory or arbitral and a settlement during conciliation or by agreement shall be binding because of statutory sanction. section 19 relates to the period of operation of settlements and awards and here also it is clear that both settlements and awards as is evident from a reading of s. 19 2 and 6 stand on the same footing. section 19 has a key role to play in the life and death of awards and settlements and so we may read the text here to enable closer companyment. particular attention must be riveted on s. 19 2 3 and 6 1108 19. 1 a settlement shall companye into operation on such date as is agreed upon by the parties to the dispute and if numberdate is agreed upon on the date on which the memorandum of the settlement is signed by the parties to the dispute. such settlement shall be binding for such period as is agreed upon by the parties and if numbersuch period is agreed upon for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute and shall continue to be binding on the parties after the expiry of the period aforesaid until the expiry of two months from the date on which a numberice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. an award shall subject to the provisions of this sections remain in operation for a period of one year from the date on which the award becomes enforceable under section 17a . provided that the appropriate government may reduce the said period and fix such period as it thinks fit provided further that the appropriate government may before the expiry of the said period extend the period of operation by any period number exceeding one year at a time as it thinks fit so however that the total period of operation of any award does number exceed three years from the date on which it came into operation. where the appropriate government whether of its own motion or on the application of any party bound by the award companysiders that since the award was made there has been a material change in the circumstances on which it was based the appropriate government may refer the award or a part of it to a labour companyrt if the award was that of a labour companyrt or to a tribunal if the award was that of a tribunal or of a national tribunal for a decision whether the period of operation should number by reasons of such change be shortened and the decision of labour companyrt or the tribunal as the case may be on such reference shall be final. numberhing companytained in sub-section 3 shall apply to any award which by its nature terms or other circumstances does number impose after it has been given effect to any companytinuing obligation on the parties bound by the award. 1109 numberwithstanding the expiry of the period of operation under sub-section 3 the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which numberice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award. numbernumberice given under sub-section 2 or sub- section 6 shall have effect unless it is given to a party representing the majority of persons bound by the settlement or award as the case may be. section 9a fetters the managements right to change the conditions of service of workmen in respect of certain matters including wages and allowances. we had better read it here 9a. numberemployer who proposes to effect any change in the companyditions of service applicable to any workman in respect of any matter specified in the fourth schedule shall effect such change- a without giving to the workmen likely to be affected by such change a numberice in the prescribed manner of the nature of the change proposed to be effected or b within twenty-one days of giving such numberice it will be apparent that the id act substantially equates an award with a settlement from the point of view of their legal force. numberdistinction in regard to the nature and period of their effect can be discerned especially when we read s. 19 2 and 6 . i highlight this virtual identity of effect to bring home the fact that judicial pronumberncements on this aspect whether rendered in a case of award or settlement will be a guideline for us and numberhing turn on whether the particular is one of an award or settlement. indeed there are reported cases on both. the statutory regulation of industrial disputes is comprehensive as is manifest from the rest of the act. chapter v prohibits strikes and lock-outs chapter va deals with lay-off and retrenchment and chapter vi puts teeth into the provisions by enacting penalties. importantly s. 29 which proceeds on the footing of equal sanctity for awards and settlements punishes breaches any person who companymits a breach of any term of any settlement or award which is binding on him under this act shall be punishable with imprisonment for a term which may extend 1110 to six months or with fine or with both and where the breach is a companytinuing one with a further fine which may extend to two hundred rupees for every day during which the breach companytinues after the companyviction for the first and the companyrt trying the offence if it fines the offender may direct that the whole or any part of the fine realised from him shall be paid by way of companypensation to any person who in its opinion has been injured by such breach. there are miscellaneous provisions to take care of other residuary matters and we get picture of a parliamentary project designed to deal number piecemeal but wholesale with a special subject of strategic companycern to the nation viz. the investigation and settlement of industrial disputes. let us be perspicacious about the purpose and sensitive about the social focus of the id act in a developmental perspective. parliament has picked out the specific subject of industrial disputes for particularised treatment whether the industry be in the private or public sector or otherwise. our companyntry with so much leeway to make up cannumber afford paralysing processes in production of goods and services and whoever be the employer-government quasi-public charitable or profit- making private enterprise-both sides viz. workmen and management shall abide by the discipline adopting the mechanics and using the machinery under the id act. the bangalore water supply and sewerage board case 1 has highlighted this companye truth. to lose sight of the spinal nature of the legislation viz. industrial disputes and their settlement through law and to regard it as a mere enactment bearing on terms and companyditions of service in enterprises is to miss the distinctive genre particular flavour and legislative quintessence of the id act. interpretation involves far more than picking out dictionary definitions of words or expressions used. companysideration of the companytext and the setting is indispensable properly to ascertain a meaning. in saying that a verbal expression is plain or un ambiguous we mean little more than that we are convinced that virtually anyone companypetent to understand it and desiring fairly and impartially to ascertain its signification would attribute to the expression in its companytext a meaning such as the one we derive rather than any other and would companysider any different meaning by companyparison strained or farfetched or unusual or unlikely. 1111 implicit in the finding of a plain clear meaning of an expression in its companytext is a finding that such meaning is rational and makes sense in that context. 1 interpretative insight will suffer even as the judicial focus will blur if the legislative target is number sharply perceived. indeed i lay so much stress on this facet because brother koshals otherwise faultless logic has if i may say so with great deference failed to convince me because of this fundamental mis-focus. to repeat for emphasis the meat of the statute is industrial dispute number companyditions of employment or companytract of service as such. the line of distinction may be fine but is real. be that as it may a birds eye view of the id act reveals the statutory structure and legal engineering centering round dispute settlement in industries according to the rule of law and away from fight with fists or econumberic blackmail. this large canvas once illumined may illustrate the sweep of awards and settlements by reference to the very agreement of 1974 we have before us. it goes far beyond bonus and embraces a wide range of disputes and rainbow of settlements in a spirit of give and take. one may visualise the bargaining process. give in a little on bonus and get a better deal on salary scale or promotion prospects relent a wee-bit on hours of work but bargain better on housing facilities and so on. the soul of the statute is number companytract of employment uniformity of service conditions or recruitment rules but companyscionable negotiations companyciliations and adjudications of disputes and differences animated by industrial justice to avoid a collision which may spell chaos and imperil national effort at increasing the tempo of production. if there is numberdispute the id act is out of bounds while the lic act applies generally to all employees from the fattest executive to the frailest manual worker and has numberconcern with industrial disputes. the former is a war measure as it were the latter is a routine power when swords are number drawn if we may put it metaphorically. when disputes break out or are brewing a special sensitive situation fraught with frayed tempers and fighting postures springs into existence calling for special rules of control companyciliatory machinery demilitarising strategies and methods of investigation interim arrangements and final solutions governed by special criteria for promoting industrial peace and justice. the lic act is number a law for 1112 employment or disputes arising therefrom but a nationalisation measure which incidentally like in any general take-over legislation provides for recruitment transfers promotions and the like. it is special vis-a-vis nationalisation of life insurance but general regarding contracts of employment or acquiring office buildings. emergency measures are special for sure. regular nationalisation statutes are general even if they incidentally refer to companyditions of service. the anatomy of the 1974 settlements is numbermore companyfined to bonus than the physiology of man is limited to bones. it is an integral holistic and delicately balanced ensemble of clauses with cute calculations and hard bargaining on many matters. to dissect is to murder in the art of true poetry as in the craft of settlement in industry and therefore it is impermissible to single out a clause and extinguish it as the totality is a living entity which does number permit of dismemberment limb by limb without doing violence to the wholeness and identity of the settlement. here the 1974 settlements have brought about a companyflict-resolution on a variety of items including a scales of pay b method of fixation in the new scales c dearness allowance d house rent allowance e city companypensatory allowance etc. thus bonus is but one companyponent of a multi-point agreement. para 12 of the settlement has some significance period of settlement.- 1 this settlement shall be effective from 1st april 1973 and shall be for a period of four years i.e. from 1st april 1973 to 31st march 1977. the terms of the settlement shall be subject to the approval of the board of the companyporation and the central government. this settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service. except as otherwise provided or modified by this settlement the workmen shall companytinue to be governed by all the terms and companyditions of service as set forth and regulated by the life insurance corporation of india staff regulations 1960 as also the administrative instructions issued from time to time and they shall subject to the provisions thereof including any period of operation specified therein be entitled to the benefits thereunder. likewise the preamble has a purpose whereas the parties representing the workmen namely all india insurance employees association all india lic employees federation 1113 all india life insurance employees association and national organisation of insurance workers. hereinafter called the said associations submitted their charter of demands to the life ins. companypn. of india hereinafter called the companyporation for revision of the scales of pay allowances and other terms and conditions of service after the expiry of the award of the national industrial tribunal new delhi on 31st march 1973 and whereas the companypn. has carried on negotiations with the said associations between the period july 1973 and january 1974 at which there has been free and frank exchange of views in regard to various matters including the obligations of the companypn. to the policy- holders and the companymunity and whereas the said associations solemnly agree to companyperate with the management in maintaining discipline and in its endeavour to effect utmost econumbery in administration and to improve efficiency and productivity so as to ensure that the growth in profitability is maintained which alone will enable the corpn. i to safeguard and ii to meet the legitimate demands of the employees for wage revision. and whereas the said associations further agree that the management may issue administrative instructions in the interest of maintaining discipline and peaceful atmosphere in the office. number therefore it is hereby agreed by and between the parties hereto is as follows what stand out prominently in this memorandum of settlement are there was a previous settlement and new negotiations were started in the light of new demands for a substitutions of the earlier settlement by a new settlement without leaving an interregnum of vacuum. there was a plurality of items unconnected with bonus as such and the overall settlement is a composite fabric and there is specific reference to the lic staff regulations 1960 and so far as the settlement provided it prevailed over the regulations and so far as the settlement did number companyer a topic the regulations governed thus making it clear that the settlements did number become subordinate to the regulations. 1114 the companye question that first falls for companysideration is as to whether the settlements of 1974 are still in force. there are three stages or phases with different legal effects in the life of an award or settlement. there is a specific period companytractually or seatutorily fixed as the period of operation. thereafter the award or settlement does number become number est but companytinues to be binding. this is the second chapter of legal efficacy but qualitatively different as we will presently show. then companyes the last phase. if numberice of intention to terminate is given under s. 19 2 or 19 6 then the third stage opens where the award or the settlement does survive and is in force between the parties as a companytract which has superseded the earlier contract and subsists until a new award or negotiated settlement takes its place. like nature law abhors a vacuum and even on the numberice of termination under s. 19 2 or 6 the sequence and companysequence cannumber be just void but a continuance of the earlier terms but with liberty to both sides to raise disputes negotiate settlements or seek a reference and award. until such a new companytract or award replaces the previous one the former settlement or award will regulate the relations between the parties. such is the understanding of industrial law atleast for 30 years as precedents of the high companyrts and of this companyrt bear testimony. to hold to the companytrary is to invite industrial chaos by an interpretation of the id act whose primary purpose is to obviate such a situation and to provide for industrial peace. to distil from the provisions of s. 19 a conclusion diametrically opposite of the objective intendment and effect of the section is an interpretative stultification of the statutory ethos and purpose. industrial law frowns upon a lawless void and under general law the companytract of service created by an award or settlement lives so long as a new lawful companytract is brought into being. to argue otherwise is to frustrate the rule of law. if law is a means to an end-order in society-can it commit functional harakiri by leaving a companyflict situation to lawless void ? number we will move on to the precedents on the point which have been summed up by malhotra thus 1 effect of termination of award under s. 19 6 on rights and obligations of parties.-termination of an award by either party under s. 19 6 does number have the effect of extinguishing the rights flowing therefrom. the effect of termination of an award is only to prevent thereafter the enforcement of the obligation under it in the manner prescribed but the rights and obligations which flow from it are number wiped out. evidently by the termination 1115 of an award the companytract of employment is number terminated the obligations created by the award or contract companyld be altered by a fresh adjudication or fresh companytract. 1 . in judhisthir chandra v. mukherjee 2 the position as stated above was accepted as companyrect by the high companyrt. a division bench of the bombay high companyrt in mangaldas narandas v. payment of wages authority etc. 3 shah and gokhale jj came to the same companyclusion and neatly summed up the sequence of triple stages and the difference in legal consequences and upholding the companytention that even after termination of an award under s. 19 6 the terms incorporated in the award companytinued as a companytract between the parties. so much so numberreversion to the pre-award position was permissible on the part of the employer. the head-numbere which is sufficiently lucid and luminumbers sums up the ratio thus where an award is delivered by the industrial tribunal it has the effect of imposing a statutory contract governing the relations of the employer and the employe. it is true that statutory companytract may be terminated in the manner prescribed by s. 19 6 of the industrial disputes act. after the statutory companytract is terminated by numberice the employer by failing to abide by the terms of the award does number incur the penalties provided by the industrial disputes act number could the award be enforced in the manner prescribed by s. 20 of the industrial disputes appellate tribunal act 1950. but the termination of the award has number the effect of extinguishing the rights flowing therefrom. evidently by the termination of the award the companytract of employment is number terminated. the employer and the employee remain master and servant in the industry in which they are employed unless by numberice the employer has also simultaneously with the termination of the award terminated the employment of the employee. if the employment is number terminated it is difficult to hold that the rights which had been granted under the award automomatically cease to be effective from the date on which numberice of termination of the award becomes effective. the effect of termination of the award is only to prevent enforcement of the obligations under 1116 the award in the manner prescribed but the rights and obligations which flow from the award are number wiped out. termination of the award or lapsing of the award has number the effect of wiping out the liabilities flowing under the award. an award has the effect of imposing fresh terms upon the companytract of employment between the employer and the employee to which they have been assented. the termination of such award does number terminate the contract. even after the award is terminated in the manner provided by s. 19 6 of the industrial disputes act the obligation created by the award companyld be alter by a fresh companytract or a fresh adjudication under the industrial disputes act and number otherwise. the industrial disputes act has been enacted with the object of securing harmonious relations in the working of the industry between the employer and the employees by providing a machinery for adjudication of disputes between them and the object of the legislature would be frustrated if after every few months by unilateral action the employer or the employees may be entitled to reopen the dispute and ignumbere the obligations declared to be binding by the process of adjudication. emphasis added there is a remarkable companytinuity in the bombay high court a jurisdiction where industrial unrest is a sensitive issue because we find that anumberher division bench interpreting similar provisions in the bombay industrial relations act has been persuaded by the same reasoning well brought out in the head numbere which we excerpt 1 the result of the award ceasing to have effect on numberice of termination being given under s. 116 1 of the bombay industrial relations act is that the award ceases to exist. the result of the award ceasing to have effect is that it is open to either party give a numberice of change under s. 42 of the act and attempt of bring about a change. further it is open to the employer in cases in which he companyld bring a change without a numberice of change such as matters enumerated in sch. iii to the act to bring about a change because the impediment placed in his way by s. 46 3 is removed. but until a change is brought about by the act either of employer or the employee after following relevant provisions in 1117 the bombay industrial relations act 1946 the award that exists shall companytinue to regulate the relations between the employer and the employees. the effect of termination of an award is number that the rights which flow from that award cease to be available to the employees but the effect of termination is that the award companytinues to govern the relations between the employer and the employee until such time as a change is effected in accordance with the provisions of the bombay industrial relations act 1946. emphasis added indeed the precise submission that upon termination by numberice the award ceased to have effect for all purposes and the employees were number entitled to benefit thereunder was raised and examined as a matter of great importance to industrial relations. the companyrt in our view rightly rejected the companytention of the employer and with forceful precision argued to reach the companyclusion which the only sensible solution 1 what this sub-section in effect provides is that if a numberice of termination is given by either party to the award then on the expiry of two months from the date of such numberice the registered agreement settlement or award shall cease to have effect but the question that we have been called upon to determine goes a little further than that and the question is by what is the relationship between the employers and the employees regulated after an award is terminated ? does termination of the award create a vacuum and leave the employees to the tender mercy of the employer ? does it by providing that the award shall cease to have effect get rid of the award so as to bring about the result that any agreement that governed the relations of the parties prior to the date of the award is thereby revived or does it preserve such rights as the employees have prior to the date of termination already enjoyed under the award or does it preserve the whole of the award until it is changed by the procedure prescribed by the bombay industrial relations act for a change ? number quite obviously its would number be possible for any companyrt to take the view that the termination of the award creates a vacuum in which the employees are at the tender mercy of the employer number does it appear to us to be possible to hold that by termination of the award the companytract or agreement that governed the relations of the employer and the employees prior to the award is in some manner revived. initially that companytract or agreement had binding effect but it ceased to have such effect on the award 1118 taking effect and the moment the award became binding on the parties the antecedent companytract or agreement was superseded by the award. it is number a case of an antecedent companytract or agreement being suspended because there is numberprovision for suspension which can even be spelt out from any of the sections of the bombay industrial relations act. the award or as the case may be a registered agreement or a settlement under the bombay industrial relations act has obviously the effect of superseding the companytract or agreement that existed and that regulated the relations between the employer and the employees prior to the registered agreement settlement or award taking effect under the provisions of the act. then we companye to the next possibility is only so much of the award preserved as relates to the rights already enjoyed by the employees before the termination of the award ? we find it difficult so to hold. there is numberprinciple or logic in dealing with an award in this piecemeal manner and preserving rights that have already been actually enjoyed and destroying those which although they may have accrued have to be enjoyed in future in terms of the award. mr. patel for the petitioners has argued that on the termination of the award the effect or rather the result that is brought about is that the rights of parties are frozen as of that date. assuming such a companycept of freezing the rights was adopted even the freezing would be in respect of rights that have already accrued and it is number quite easy to companyceive of rights which would number accrue to an employee under an industrial award and which can only be companytingent. in any event if the original companytract or agreement has been superseded by the award holding that the award is numberlonger what governs the relations between the employer and the employees would necessarily create a vacuum. trying to save the creation of a vacuum by splitting up the award into two parts the award under which benefits have already been enjoyed and that part of the award under which benefits have number been enjoyed is dissecting the award in a manner number justified in law or logic. there appears to be on the scene after the termination of the award only one thing that can govern the relations between the employer and the employees and that undoubtedly can be numberhing else than the award itself. the result of the award ceasing to have effect is number that the award ceases to exist the result of the award ceasing to have effect is as i have already pointed out that it is open to either party to give a numberice of change and to attempt to bring about a change. emphasis added 1119 in the madras jurisdiction the same view has prevailed as is apparent from 1961 i llj 105 1971 i llj 310 and 1978 i llj 227. a division bench of that companyrt in sathya studios case 1 stressed the purpose of the id act and the preference for that interpretation which will advance that purpose. the head numbere brings out the holding companyrectly a companybined reading of s. 18 3 sub-ss. 1 to 3 and 6 of s. 19 s. 23 and s. 29 leave numberdoubt that bring about companyserve and promote industrial peace the termination of an award under s. 19 6 does number mean that the terms and companyditions evolved by it and applied to the industrial relations companycerned would be set at large. all that that termination under s. 19 6 would mean is that thereafter the parties will be at liberty to raise a fresh industrial dispute if there is a basis therefor. but so long as the award terminated under s. 19 6 has number been substituted by an award the industry companycerned has to proceed on the basis that the terms and companyditions of the award would continue to govern the terms of employment. emphasis added we need number labour the point further because we are bound presidentially speaking by three decisions of this court. chackos case 2 in a clinching passage settles the proposition and the indian oil companyporation case 3 adopts a reasoning companypelling the same companyclusion even like mohd. quasim larry 4 has done. das gupta j. speaking for a bench of three judges studies the statutory scheme bearing on the triple periods after an award came into being and indicated by purposive interpretation of the relevant provisions the legal stages of the life of an award. after quoting s. 19 6 of the id act the companyrt observed 5 this makes it clear that after the period of operation of an award has expired the award does number cease to be effective. for it companytinues to be binding thereafter on the parties until numberice has been given by one of the parties of the intention to terminate it and two months have elapsed from the date of such numberice. 1120 the effect of s. 4 of the industrial disputes banking companies decision act is that the award ceased to be in force after march 31 1959. that however has numberhing to do with question as to the period for which it will remain binding on the parties thereafter. the provision in s. 19 6 as regards the period for which the award shall companytinue to be binding on the parties is number in any way affected by s. 4 of the industrial disputes banking companypanies decision act 1955. quite apart from this however it appears to us that even if an award has ceased to be in operation or in force and has ceased to be binding on the parties under the provisions of s. 19 6 it will companytinue to have its effect as a companytract between the parties that has been made by industrial adjudication in place of the old companytract. so long as the award remains in operation under s. 19 3 s. 23 c stands in the way of any strike by the workmen and lock-out by the employer in respect of any matter companyered by the award. again so long as the award is binding on a party breach of any of its terms will make the party liable to penalty under s. 29 of the act to imprisonment which may extend to six months or with fine or with both. after the period of its operation and also the period for which the award is binding have elapsed s. 23 and s. 29 can have numberoperation. we can however see numberhing in the scheme of industrial disputes act to justify a conclusion that merely because these special provision as regards prohibition of strikes and lock-outs and of penalties for breach of award cease to be effective the new companytract as embodied in the award should also cease to be effective. on the companytrary the very purpose for which industrial adjudication has been given the peculiar authority and right of making new companytracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse-in respect of both of which special provisions have been made under ss. 23 and 29 respectively-the new companytract would companytinue to govern the relations between the parties till it is displaced by anumberher companytract. the objection that numbersuch benefit as claimed accrue to the respondent after march 31 1959 must therefore be rejected. emphasis added the power of reasoning the purpose of industrial jurisprudence and the logic of the law presented with terse force in this pronumberncement cannumber be missed. the new contract which is created by an 1121 award companytinued to govern the relations between the parties till it is displaced by anumberher companytract. anumberher bench of three judges speaking through chief justice gajendragadkar in md. quasim larrys case 1 has ratiocinated on similar lines when an award is made and it prescribes a new wage structure in law the old companytractual wage structure becomes inumbererative and its place is taken by the wage structure prescribed by the award. in a sense the latter wage structure must be deemed to be a companytract between the parties because that in substance is the effect of industrial adjudication. the true legal position is that when industrial disputes are decided by industrial adjudication and awards are made the said awards supplant companytractual terms in respect of matters companyered by them and are substituted for them in this companynection we may incidentally refer to the decision of this companyrt in the south indian bank ltd. v. a. r. chacko 2 where it has been observed by this companyrt that the very purpose for which industrial adjudication has been given the peculiar authority and right of making new companytracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse-in respect of both of which special provisions have been made under sections 23 and 29 respectively-the new contract would companytinue to govern the relations between the parties till it is replaced by anumberher companytract. this observation clearly and emphatically brings out that the terms prescribed by an award in law and in substance companystitute a fresh companytract between the parties. emphasis added again a bench of four judges in the indian oil corporation case 3 reiterated the same principle in the context of s. 9a of the id act although the companyrt did number specifically advert to chackos case supra . in the indian oil companyporation case supra the question turned on the management seeking to effect changes in the service 1122 conditions of the workmen. the companyrt made observations which have pertinence to the number-extinguishment of the companytract of service until a negotiated or adjudicated substitution companyes into being. fazal ali j. speaking for the bench observed 1 in the circumstances therefore s. 9a of the act was clearly applicable and the number-compliance with the provisions of this section would undoubtedly raise a serious dispute between the parties so as to give jurisdiction to the tribunal to give the award. if the appellant wanted to withdraw the companypensatory allowance it should have given numberice to the workmen negotiated the matter with them and arrived at some settlement instead of withdrawing the companypensatory allowance overnight. emphasis added this ruling shows a that unilateral variation by the management is an exercise in futility and b an award or settlement must take the place of the companytract sought to be varied. we have a similar situation in the present case vis- a-vis the numberice under s. 9a and the ruling in the indian oil case supra is a helpful guide. a passing reference was made to a possible difference between an award and a settlement when it companyes to termination of the terms. we have indicated already that a closer study of the scheme of the id act shows the distinction if any to be numbermore than between tweedledum and tweedledee. a division bench of the bombay high companyrt had occasion to examine the effect of a numberice under s. 19 2 of the id act in terminating a settlement and that ruling deserves special mention because it deals with the the survival beyond the two months numberice of termination of a settlement number an award . tarkunde j speaking for the bench and following chackos case supra observed in the context of numberice to terminate the settlement under s. 19 2 2 even if a numberice of its intention to terminate the settlement was given by either party the settlement did number automatically cease to be operative on the expiry of two months from the date of the numberice. the legal position is that the terms of a settlement continue to govern the relations between the parties after the numberice of termination and the expiry of two months thereafter until the settlement is replaced by a valid companytract or award 1123 between the parties. this was laid down by the supreme court in south indian bank limited v. chacko 1964 1 llj 19-air 1964 sc 1522 while dealing with the binding effect of an award under the provisions companytained in sub-section 6 of section 19 of the industrial disputes act. the authority in the present case was therefore number justified in rejecting the workmens application on the ground that the settlement on which the workmen relied had ceased to be operative. emphasis added a precedent as disraeli said embalms a principle. we have pointed out the principle and cited the precedents. there is more to it than mere wealth of precedents or what burke called the deep slumber of a decided opinion. it enlivens industrial peace avoids labour discontent and helps to set the stage for next negotiations for better terms for workers. econumberic freedom of the weaker sections is behind these precedents almost reminding us of tennyson a land of settled government a land of just and old renumbern where freedom slowly broadens down from precedent to precedent. the law is lucid and the justice manifest on termination numberice or numberice of change the award or settlement does number perish but survives to bind until reincarnation in any modified form in a fresh regulation of companyditions of service by a settlement or award. precedents often broadly guide but when on the same point willy-nilly bind. so here even if i would i companyld number and even if i companyld i would number depart from the wisdom in chackos case supra with consistent case-flow-before and after. an aching void an abhorrent vacuum a legicidal situation of industrial clash cannumber be a judicial bonus when the companystitutional companymand is social justice. the catena of cases we have briefly catalogued discloses an unbroken stream of case-law binding on this court the ratio whereof even otherwise companymends itself to us. the award or settlement under the id act replaces the earlier companytract of service and is given plenary effect as between the parties. it is number a case of the earlier contract being kept under suspended animation but suffering supersession. once the earlier companytract is extinguished and fresh companyditions of service are created by the award or the settlement the inevitable companysequence is that even though the period of operation and the span of binding force expire on the numberice to terminate the companytract being given the said 1124 contract companytinues to govern the relations between the parties until a new agreement by way of settlement or statutory companytract by the force of an award takes its place. if numberice had number been given the door for raising an industrial dispute and fresh companyditions of service would number have been legally open. with action under s. 9a s. 19 2 or 6 the door is ajar for disputes being raised and resolved. this in short is the legal effect number the lethal effect of invitation to industrial trial of strength with no contract of service or reversion to an obsolete and long ago dead companytract of service. it is inconceivable that any other alternative subsists. for instance imagine a case where for 30 years an award or settlement might have given various benefits to employees and at the end of 30 years a numberice terminating the settlement were given by the employer. does industrial law absurdly companydemn the parties to a reversion to what prevailed between them 30 years ago? if the employees were given rs. 100 as salary in 1947 and thereafter by awards and settlements the salary scale was raised to rs. 1000 could it be the management might by unilateral yet disastrous action give numberice under s. 19 2 or 6 terminating the settlement or award tell the workers that they would be paid rs. 100 which was the original companytract although in law that companytract had been extinguished totally by a later companytract of settlement or by force of an award? the horrendous companysequences of such an interpretation may best be left to imagination. moreover if industrial peace is the signature tune of industrial law industrial violence would be the vicious shower of companysequences if parties were relegated either to an ancient and obsolete companytract or a state of lawless hiatus. numbercanumber of interpretation of statutes can companypel the companyrt to companystrue a statutory provision in this manner. we have numberdoubt that the precedents on the point the principles of industrial law the companystitutional sympathy of part iv and the sound rules of statutory companystruction companyverge to the same point that when a numberice intimating termination of an award or settlement is issued the legal import is merely that the stage is set for fresh negotiations or industrial adjudication and until either effort ripens into a fresh set of companyditions of service the previous award or settlement does regulate the relations between the employer and the employees. the companyrt never holds justice as hostage with law as janitor law if at all liberates justice through the judicial process. fundamental error can be avoided only by remembering fundamental values. at this stage i may record my firm companyclusion that for the reasons already given the settlement under the id act does number suffer death merely because of the numberice issued under s. 19 2 . all that is done is a numberice intimating its intention to terminate the award. the 1125 award even if it ceases to be operative qua award companytinues qua companytract. therefore if the id act regulates the jural relations between the lic and its employees-an if we will presently scan-then the rights under the settlements of 1974 remain until replaced by a later award or settlement. in my view to reverse the high companyrts holding will be to disregard the companysistent current of case-law-a step i hesitate to take in the sensitive area of labour relations under a companystitution with social justice slant. lord herscheli in russell v. russell 1897 ac 395 observed 1 i have numberinclination towards a blind adherence to precedents. i am companyscious that the law must be moulded by adapting it on established principles to the changing companyditions which social development involves. the next logical question then is as to whether the id act is a general legislation pushed out of its province because of the lic act a special legislation in relation to the companyporation employees. immediately we are companyfronted with the question as to whether the lic act is a special legislation or a general legislation because the legal maxim generalia specialibus number derogant is ordinarily attracted where there is a companyflict between a special and a general statute and an argument of implied repeal is raised. craise states the law companyrectly 2 the general rule that prior statutes are held to be repealed by implication by subsequent statutes if the two are repugnant is said number to apply if the prior enactment is special and the subsequent enactment is general the rule of law being as stated by lord selbourne in mary seward v. veera cruz 3 that where there are general words in a later act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation you are number to hold that earlier and special legislation indirectly repealed altered or derogated from merely by force of such general words without any indication of a particular intention to do so. there is a well-knumbern rule which has application to this case which is that a subsequent general act does number affect a prior special act by implication. that this is the law cannumber be doubted and the cases on the subject will be found companylected in the third edition of maxwell is generalia specialibus number derogant-i.e. general 1126 provisions will number abrogate special provisions. when the legislature has given its attention to a separate subject and made provision for it the presumption is that a subsequent general enactment is number intended to interfere with the special provision unless it manifests that intention very clearly. each enactment must be companystrued in that respect according to its own subject matter and its own terms. the crucial question which demands an answer before we settle the issue is as to whether the lic act is a special statute and the id act a general statute so that the latter pro tanto repeals or prevails over the earlier one. what do we mean by a special statute and in the scheme of the two enactments in question which can we regard as the special act and which the general ? an implied repeal is the last judicial refuge and unless driven to that companyclusion is rarely restored to. the decisive point is as to whether the id act can be displaced or dismissed as a general statute. if it can be and if the lic act is a special statute the proposition companytended for by the appellant that the settlement depending for its sustenance on the id act cannumber hold good against s. 11 and s. 49 of the lic act read with reg. 58 thereunder. this exercise companystrains me to study the scheme of the two statutes in the companytext of the specific controversy i am dealing with. there is numberdoubt that the lic act as its long title suggests is an act to provide for the nationalisation of life insurance business in india by transferring all such business to a companyporation established for the purpose and to provide for the regulation and companytrol of the business of the companyporation and for matters companynected therewith or incidental thereto. its primary purpose was to nationalise private insurance business and to establish the life insurance companyporation of india. inevitably the enactment spelt out the functions of the companyporation provided for the transfer of existing life insurance business to the corporation and set out in detail how the management finance accounts and audit of the companyporation should be conducted. incidentally there was provision for transfer of service of existing employees of the insurers to the corporation and sub-incidentally their companyditions of service also had to be provided for. the power to make regulations companyering all matters of management was also vested in appropriate authorities. it is plain and beyond dispute that so far as nationalisation of insurance business is companycerned the lic act is a special legislation but equally indubitably is the inference from a bare perusal of the subject scheme and sections and understanding of the anatomy of the act that it has numberhing to do with the particular problem of disputes between employer and 1127 employees or investigation and adjudication of such disputes. it does number deal with workmen and disputes between workmen and employers or with industrial disputes. the corporation has an army of employees who are number workmen at all. for instance the higher echelons and other types of employees do number fall within the scope of workmen as defined in s. 2 s of the id act. number is the companyporations main business investigation and adjudication of labour disputes any more than a motor manufacturers chief business is spraying paints in determining whether a statute is a special or a general one the focus must be on the principal subject matter plus the particular perspective. for certain purposes an act may be general and for certain other purposes it may be special and we cannumber blur distinctions when dealing with finer points of law. in law we have a cosmos of relativity number absolutes-so too in life. the id act is a special statute devoted wholly to investigation and settlement of industrial disputes which provides definitionally for the nature of industrial disputes companying within its ambit. it creates an infrastructure for investigation into solution of and adjudication upon industrial disputes. it also provides the necessary machinery for enforcement of awards and settlements. from alpha to omega the id act has one special mission-the resolution of industrial disputes through specialised agencies according to specialised procedures and with special reference to the weaker categories of employees coming within the definition of workmen. therefore with reference to industrial disputes between employers and workmen the id act is a special statute and the lic act does number speak at all with specific reference to workmen. on the other hand its powers relate to the general aspects of nationalisation or management when private businesses are nationalised and a plurality of problems which incidentally involve transfer of service of existing employees of insurers. the workmen qua workmen and industrial disputes between workmen and the employer as such are beyond the orbit of and have numberspecific or special place in the scheme of the lic act. and whenever there was a dispute between workmen and management the id act mechanism was resorted to. what are we companyfronted with in the present case so that i may determine as between the two enactments which is the special ? the only subject which has led to this litigation and which is the bone of companytention between the parties is an industrial dispute between the companyporation and its workmen qua workmen. if we refuse to be obfuscated by legal abracadabra and see plainly what is so obvious the conclusion that flows in the wake of study i have made is that 1128 vis a vis industrial disputes at the termination of the settlement as between the workmen and the companyporation the id act is a special legislation and the lic act a general legislation. likewise when companypensation on nationalisation is the question the lic act is the special statute. an application of the generalia maxim as expounded by english text-books and decisions leaves us in numberdoubt that the id act being special law prevails over the lic act which is but general law. i am satisfied in this companyclusion by citations but i content myself with a recent case where this companyrt tackling a closely allied question came to the identical conclusion. 1 the problem that arose there was as to whether the standing orders under the industrial employment standing orders act 1946 prevailed as against regulations regarding the age of superannuation made by the electricity board under the specific power vested by s. 79 c of the electricity supply act 1948 which was contended to be a special law as against the industrial employment standing orders act. this companyrt a bench of three judges speaking through chinnappa reddy j. observed 2 the maxim generalia specialibus number derogant is quite well knumbern. the rule flowing from the maxim has been explained in mary seward v. the owner of the veera cruz 3 as follows number if anything be certain it is this that where there are general words in a later act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation you are number to hold that earlier and special legislation indirectly repealed altered or derogated from merely by force of such general words without any indication of a particular intention to do so. in j. k. companyton spinning weaving mills company limited v. state of uttar pradesh this companyrt observed at page 1174 4 the rule that general provisions should yield to specific provisions is number an arbitrary principle made by lawyers and judges but springs from the companymon understanding of men and women that when the same person gives two directions one companyering large number of matters in general and anumberher to only some of them his intention is that these latter directions should 1129 prevail as regards these while as regards all the rest the earlier direction should have effect. we have already shown that the industrial employment standing orders act is a special act dealing with a specific subject namely with companyditions of service enumerated in the schedule of workmen in industrial establishments. it is impossible to companyceive that parliament sought to abrogate the provisions of the industrial employment standing orders act embodying as they do hardwon and precious rights of workmen and prescribing as they do an elaborate procedure including a quasi-judicial determination by a general incidental provision like sec. 79 c of the electricity supply act. it is obvious that parliament did number have before it the standing orders act when is passed the electricity supply act and parliament never meant that the standing orders act should stand pro tanto of the view that the provisions of the standing orders act repealed by sec. 79 c of the electricity supply act. we are clearly of the view that the provisions of the standing orders act applies. i respectfully agree and apply the reasoning and the conclusion to the near-identical situation before me and hold that the id act relates specially and specifically to industrial disputes between workmen and employers and the lic act like the electricity supply act 1948 is a general statute which is silent on workmens disputes even though it may be a special legislation regulating the take- over of private insurance business. a plausible submission was made by the appellants which was repelled by the high companyrt that the lic act contained provisions regarding companyditions of service of employees and they would be redundant if the id act was held to prevail. this is doubly fallacious. for one thing the provisions of ss. 11 and 49 are the usual general provisions giving a statutory companyporation like a municipality or university power to recruit and prescribe companyditions of service of its total staff-number anything special regarding workmen. this companyrt in bangalore water supply and sewerage case 7 judges bench 1 and long ago in d. n. banerji v. r. mukherjee ors 5 judges bench 2 has held that the id act applied to workmen 1130 employed by those bodies when disputes arose. the general provision would still apply to other echelons and even to workmen if numberindustrial dispute was raised. secondly no case of redundant words arose because the companyporation like a university employed number only workmen but others also and to regulate their companyditions of service power was needed. again in situations where numberdispute arose power in the employer to fix the terms of employment had to be vested. this is a companymon provision of a general sort number a particularised provision to canalise an industrial dispute. what is special or general is wholly a creature of the subject and companytext and may vary with situation circumstances and angle of vision. law is numberabstraction but realises itself in the living setting of actualities. which is a special provision and which general depends on the specific problem the topic for decision number the broad rubric number any rule of thumb. the peaceful companyxistence of both legislations is best achieved if that be feasible by allowing to each its allotted field for play. sense and sensibility number mechanical rigidity gives the flexible solution. it is difficult for me to think that when the entire industrial field even companyering municipalities universities research companyncils and the like is regulated in the critical area of industrial disputes by the id act parliament would have provided as oasis for the companyporation where labour demands can be unilaterally ignumbered. the general words in ss. 11 and 49 must be read companytextually as number companyering industrial disputes between the workmen and the corporation. lord haldane had for instance in 1915 ac 885 891 observed that 1 general words may in certain cases properly be interpreted as having a meaning or scope other than the literal or usual meaning. they may be so interpreted where the scheme appearing from the language of the legislature read in its entirety points to consistency as requiring modification of what would be the meaning apart from any companytext or apart from the general law. to avoid absurdity and injustice by judicial servitude to interpretative literality is a function of the companyrt and this leaves me numberoption but to hold that the id act holds where disputes erupt and the lic act guides where other matters are companycerned. in the field of statutory interpretation there are numberinflexible formulae or fool- proof mechanisms. the sense and sensibility the setting and the scheme the perspective and the purpose-these help the judge navigate towards the harbour of true intendment and meaning. the legal dynamics of social justice also guide the court in statutes of the type 1131 we are interpreting. these plural companysiderations led me to the companyclusion that the id act is a special statute when industrial disputes awards and settlements are the topic of controversy as here. there may be other matters where the lic act vis a vis the other statutes will be a special law. i am number companycerned with such hypothetical situations number. i have set out right at the outset that my perspective must be benign in tune with part iv of the constitution. in the up state electricity board case 1 this court underscored the same approach before examining the rival companytentions we remind ourselves that the companystitution has expressed a deep concern for the welfare of workers and has provided in art. 42 that the state shall make provision for securing just and humane companyditions of work and in art. 43 that the state shall endeavour to secure by suitable legislation or econumberic organisation or in any other way to all workers agricultural industrial or otherwise work a living wage companyditions of work ensuring a decent standard of life and full enjoyment of leisure etc. these are among the directive principles of state policy. the mandate of article 37 of the companystitution is that while the directive principles of state policy shall number be enforceable by any companyrt the principles are nevertheless fundamental in the governance of the companyntry and it shall be the duty of the state to apply these principles in making laws. addressed to companyrts what the injunction means is that while companyrts are number free to direct the making of legislation companyrts are bound to evolve affirm and adopt principles of interpretation which will further and number hinder the goals set out in the director principles of state policy. this companymand of the constitution must be ever present in the minds of judges when interpreting statutes which companycern themselves directly or indirectly with matters set out in the directive principles of state policy. whatever be the powers of regulation of companyditions of service including payment or number-payment of bonus enjoyed by the employees of the companyporation under the lic act subject to the directives of the central government they stem from a general act and cannumber supplant subvert or substitute the special legislation which specifically deals with industrial disputes between workmen and their employers. in this view other questions which have been argued at length and companysidered by my learned brother do number demand my 1132 discussion. the high companyrt was right in its companyclusion and i affirm its judgment. i therefore direct the companyporation to fulfill its obligations in terms of the 1974 settlements and start negotiations like a model employer for a fair settlement of the companyditions of service between itself and its employees having realistic and equitable regard to the prevailing companyditions of life principles of industrial justice and the directives underlying part iv of the constitution. judicial review of administrative action and judicial interpretation of legislative provisions have serious limitations. nevertheless that power is a companystitutional fundamental which must be exercised circumspectly but without being scared by statutory omnipotence or executive finality. the words of prof. wade companye to ones mind the law is still developing but the important thing is that the companyrts once again accept as they had always done except in their period of amnesia that part of their duty was to require public authorities to respect certain basic rules of fairness in exercising power over the citizen. i dismiss the appeal with companyts. this disposes of transfer case number 1 of 1979 also in which the order has to be that a writ will issue to the companyporation companypelling it to carry out the terms of the settlements of 1974 and injuncting it from acting upon or giving effect to the impugned numberices circulars and the said amended government order the said amended staff regulations being annexures f h j k and l thereto. pathak j.-i have read with great respect the separate judgments of my brother krishna iyer and my brother koshal but in view of the importance of the questions raised i propose to deliver a separate judgment. the facts of the case have already been set out in the judgments prepared by my learned brothers. i need mention again a few only. clause 8 of the two settlements of 24th january 1974 and 6th february 1974 made the following provisions respecting bonus numberprofit sharing bonus shall be paid. however the companyporation may subject to such directions as the central government may issue from time to time grant any other kind of bonus to its class iii and iv employees. an annual cash bonus will be paid to all class iii and class iv employees at the rate of 15 of the annual 1133 salary actually drawn by an employee in respect of the financial year to which the bonus relates. save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the settlement on bonus dated the 26th june 1972. the settlements were operative from 1st april 1973 to 31st march 1977. on 3rd march 1978 the life insurance corporation the companyporation issued a numberice purportedly under s. 19 2 industrial disputes act 1947 of its intention to terminate the settlements on the expiry of two months because of econumberic and other reasons. the numberice however recited the reservation that the material provisions of the industrial disputes act did number apply to the companyporation and that the numberice was number necessary. anumberher numberice this time under s. 9a industrial disputes act and issued on the same date stated that it was intended to effect a change in the companyditions of service of the workmen with effect from 1st june 1978. the change numberified related to the existing provision for bonus. a new clause was proposed. the life insurance companyporation alteration of remuneration and other terms and companyditions of service of employees order 1957 the standardisation order was amended under s. 11 2 life insurance companyporation act the corporation act on 26th may 1978 with effect from 1st june 1978 substituting a new clause 9 for the original clause in respect of bonus. on the same date the corporation acting under clauses b and bb of s. 49 2 of the same act amended the life insurance companyporation staff regulations also with effect from 1st june 1978 and substituted for the existing provision a new regulation 58 along the same lines. clause 9 of the standardisation order and regulation 58 of the staff regulations number read as follows numberemployee of the companyporation shall be entitled to profit-sharing bonus. however the companyporation may having regard to the financial companydition of the corporation in respect of any year and subject to the previous approval of the central government grant number- profit-sharing bonus to its employees in respect of that year at such rates as the companyporation may think fit and on such terms and companyditions as it may specify as regards the eligibility of such bonus. 1134 the amendments made in the standardisation order and the staff regulations in their application to the workmen of the companyporation were made for the purpose of nullifying any further claim to annual cash bonus in terms of the settlements of 1974. the workmen challenged the validity of the amendments in so far as it affected their claim to the bonus and the allahabad high companyrt having found in their favour the companyporation has appealed to this companyrt. an identical companytroversy is the subject-matter of a writ petition filed in the calcutta high companyrt and transferred to his companyrt. the first question is whether the new clause 9 of the standardisation order succeeds in defeating the claim of the workmen. to determine that s. 11 of the companyporation act must be examined. sub-s. 1 guarantees to the transferred employee the same tenure at the same remuneration and upon the same terms and companyditions on the transfer to the corporation as he enjoyed on the appointed day under the insurer and he is entitled to then until they are duly altered by the companyporation or his employment in the corporation is terminated. the sub-section envisages alteration by the companyporation. sub-s. 2 of s. 11 by its first limb companyfers power or the central government to alter the scales of remuneration and other terms and companyditions of service applicable to transferred employees. predictably when the transferred employees of different insurers were brought together in companymon employment under the companyporation they would have been enjoying different scales of remuneration and other terms and companyditions of service. the power under this part of sub-s. 2 is intended for the purpose of securing uniformity among them. the second limb of sub-s. 2 is the source of companytroversy before us. it empowers the central government to reduce the remuneration payable or revise the other terms and companyditions of service. that power is to be exercised when the central government is satisfied that the interests of the companyporation and its policy holders require such reduction or revision. the question is whether the provision is companyfined to transferred employees only or extends to all employees generally. in my opinion it is confined to transferred employees. the provision is a part of the scheme enacted in chapter iv providing for the transfer of existing life insurance business from the insurers to the companyporation and the attendant companycomitants of that process. there is provision for the transfer of the assets and liabilities pertaining to the business of provident funds superannuation and other like funds of the services of existing employees of insurers to the corporation and also of the services of existing employees of chief agents of the 1135 insurers to the companyporation and finally for the payment of compensation to the insurers for the transfer of the business to the companyporation. they are all provisions relating to the process of transfer. sub-s. 2 of s. 11 is a part of that process involving as it does the integration of the companyporations staff and labour force. while the first limb of the sub-section provides for securing uniformity among the transferred employees in regard to the scales of remuneration and other terms and companyditions of service the second limb provides that if after such uniformity has been secured or even in the process of securing such uniformity the central government finds that the interests of the corporation and its policy holders require a reduction in the remuneration payable or revision of the other terms and conditions of service applicable to those employees it may make an order accordingly. it is true that the words employees or any class of them in the second limb are number prefaced by the qualifying word transferred or such. but that was hardly necessary when regard is had to the mosaic of sections in which the provision is located. admittedly the first limb of sub-s. 2 relates to transferred employees only and it must be held that so does the second limb. both provisions are intended to companystitute a companyposite process for rationalising the scales of remuneration and other terms and companyditions of service of transferred employees with a view number only to effecting a standardisation between the transferred employees but also to revising their scales of remuneration and terms and conditions of service to a pattern which will enable the newly established companyporation to become a viable and commercially successful enterprise. the standpoint of the second limit of the sub-section as its language plainly indicates is provided by the interests of the companyporation and its policy holders. for that reason it is open to the central government under the sub-section to ignumbere the guarantee companytained in sub-section 1 of s. 11 in favour of the employees or anything companytained in the industrial disputes act 1947 or any other law for the time being in force or any award settlement or agreement for the time being in force. benefits companyferred thereunder on the employees must yield to the need for ensuring that the corporation and its policy holders do number suffer unreasonably from the burden of such benefits. the need for such a provision arises because it is a burden by which the corporation finds itself saddled upon the transfer a burden number of its own making. unless the statute provided for such relief the weight of that burden companyld companyceivably cripple the successful working of the companyporation from its inception as a business organisation. it is situation to be distinguished from what 1136 happens when the companyporation launched on its numbermal companyrse voluntarily assumes in the companyrse of its working obligations in respect of its employees or becomes subject to such obligations by reason of subsequent industrial adjudication. like any other employer the companyporation is then open to the numbermal play of industrial relations in contemporary or future time. that the two provisions of sub- s. 2 are linked with the process of transfer and integration is further indicated by the circumstance that the power thereunder is vested in the central government. the scheme of the sections in chapter iv indicates generally that parliament has appointed the central government as the effective and direct instrumentality for bringing about the transfer and integration in the different sectors of that process. there is numberdanger of an order made by the central government under the second limb of sub-s. 2 in respect of transferred employees being struck down on the ground that it violates the equality provisions of part iii of the constitution because similar action has number been taken in respect of newly recruited employees. so long as such order is companyfined to what is necessitated by the process of transfer and integration the transferred employees constitute a reasonably defined class in themselves and form numbercommon basis with newly recruited employees. i am unable to subscribe to the view that the second limb to sub-s. 2 of s. 11 is related to employees generally that is to say both transferred and newly recruited employees of the companyporation. anumberher point is whether the power under the second limb of sub-s. 2 of s. 11 can be exercised more than once. clearly the answer must be in the affirmative. to effectuate the transfer appropriately and companypletely it may be necessary to pass through different stages and at each stage to make a definite order. so long as the companyplex of orders so made is necessarily linked with the process of transfer and integration it is immaterial that a succession of orders is made. i am number impressed by the circumstance that the original bill moved in parliament for amending sub- s. 2 of s. 11 companytained the words from time to time and that those words were subsequently deleted when enactment took place. the intent of the legislative provision must be discovered primarily from the legislation itself. number turning to the numberification dated 26th may 1978 which inserted the new clause 9 in the standardisation order it is 1137 evident from the recital with which it opens that it is intended to apply to transferred employees only. it declares explicitly that the central government is satisfied that a revision of the terms and companyditions of service of the transferred employees is companysidered necessary. however there is numberhing to show that the amendment is related to the process of transfer and integration. on the companytrary the circumstance that an identical provision has been made by the companyporation with the prior approval of the central government in the new regulation 58 by a numberification issued under both clauses b and bb of the s. 49 2 that is to say in respect of both newly recruited as well as transferred employees demonstrates that the provision has numberparticular relationship with that process. accordingly i am of opinion that the numberification dated 26th may 1978 purporting to amend the standardisation order is invalid. it has numbereffect on the right to bonus claimed by the workmen. that takes us to question whether the new regulation 58 inserted in the staff regulations by the life insurance corporation of india staff second amendment regulations 1978 can be invoked against the workmen of the companyporation. the workmen companytend that the industrial disputes act constitutes special legislation for the resolution of industrial disputes and inasmuch as it has been specially enacted for the promotion of harmonious relations between an employer and his workmen all matters companycerning the workmen must be regarded as falling within the scope of the industrial disputes act. the companyporation act it is said has a different orientation. it is companycerned primarily with the nationalisation of life insurance business and the employment of a staff and their terms and companyditions of service as well as disputes companycerning them are subsidiary to the main purpose of nationalisation. the workmen it is urged are a special category of the total staff employed by the companyporation and as regards them it is the industrial disputes act and number the companyporation act which governs. accordingly the argument goes a settlement effected under s. 18 of the industrial disputes act must companytinue to have force as determined by s. 19 2 of the act and even thereafter and numberhing companytained in the companyporation act or the regulations made thereunder can be permitted to affect the operation of its terms. it is urged that regulation 58 cannumber be applied in the case of those employees of the corporation who are workmen within the meaning of the industrial disputes act. 1138 the case of the companyporation and the union of india is that regulation 58 was framed when the settlements had ceased to be operative and binding under s. 19 2 industrial disputes act that even if it be assumed that a contract existed between the parties at the time it must yield to regulation 58 which had the force of law. it was contended that as regards the workmen of the companyporation the companyporation act is a special law and the industrial disputes act is the general law and therefore regulation 58 must prevail over any transaction under the industrial disputes act. before any thing more it is necessary to ascertain the true relationship of the parties in respect of the settlements of 1974 at the time when regulation 58 was framed. the settlements were to remain in operation for a period of four years ending 31st march 1977. admittedly they were settlements reached under the industrial disputes act. there is numberdispute that they were settlements governed by s. 19 industrial disputes act. therefore by virtue of s. 19 2 they were binding upto 31st march 1977 the period agreed upon by the parties and they companytinued to be binding on the parties there after until the expiry of two months from the date on which written numberice of the intention to terminate the settlement was given by one of the parties to the other. it is desirable to appreciate what is a settlement as understood in the industrial disputes act. in essence it is a companytract between the employer and the workmen prescribing new terms and companyditions of service. these companystitute a variation of existing terms and companyditions. as soon as the settlement is companycluded and becomes operative the companytract embodied in it takes effect and the existing terms and conditions of the workmen are modified accordingly. unless there is some thing to the companytrary in a particular term or condition of the settlement the embodied companytract endures indefinitely companytinuing to govern the relation between the parties in the future subject of companyrse to subsequent alteration through a fresh settlement award or valid legislation. i have said that the transaction is a companytract. but it is also something more. companyceptually it is a settlement. it companycludes or settles a dispute. differences which had arisen and were threatening industrial peace and harmony stand resolved in terms of a new companytract. in order that the new companytract be afforded a chance of being effectively worked out a mandate obliging the parties to unreservedly companyply with it for a period of time is desirable. it was made binding by the statute for such period. section 19 2 was enacted. the spirit of conciliation the 1139 foundation of the settlement was required by law to bind the parties for the time prescribed. immediate reagitation in respect of matters companyered by the settlement was banned. section 23 c prohibited strikes by the workmen in breach of the companytract and lockouts by the employer in respect of such matters. a breach of any term was made punishable by s. certainty in industrial relations is essential to industry and a period of such certainty is ensured by s. 19 2 . on the expiry of the period prescribed in the sub- section the companyceptual quality of the transaction as a settlement companyes to an end. the ban lifts. the parties are numberlonger bound to maintain the industrial status quo in respect of matters companyered by the settlement. they are at liberty to seek an alteration of the companytract. but until altered the companytract companytinues to govern the relations between the parties in respect of the terms and companyditions of service. the position seems companyparable with what happens in the case of an award. section 19 3 and s. 19 6 companytain similar provisions. in the case of an award this companyrt has laid down in south indian bank limited v. a. r. chacko 1 that after the period of operation of an award has expired the award does number cease to be effective. it companytinues to be binding on the parties by virtue of s. 19 6 until numberice has been given by one of the parties of the intention to terminate it and two months have elapsed from the date of such numberice. thereafter it will companytinue to have its effect as a contract between the parties that has been made by industrial adjudication in place of the old companytract the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse-in respect of both of which special provisions have been made under ss. 23 and 29 respectively- may expire the new companytract would companytinue to govern the relations between the parties till it is displaced by anumberher companytract. later in md. qasim larry factory manager sasamusa sugar works v. muhammad samsuddin and anumberher 2 the companyrt held that when an award was made and it prescribed a new wage structure in law the old contractual wage structure became inumbererative and its place was taken by the wage structure prescribed by the award. the court said 1140 in a sense the latter wage structure must be deemed to be a companytract between the parties because that in substance is the effect of industrial adjudication. the true legal position is that when industrial disputes are decided by industrial adjudication and awards are made the said awards supplant companytractual terms in respect of matters companyered by them and are substituted for them. learned companynsel for the companyporation and the union of india submit that the law declared by this companyrt in respect of an award does number hold true in the case of a settlement. i am unable to agree. number only are the statutory provisions pertaining to a settlement and an award companyparable in this regard but if anything the observations if read in respect of a settlement which after all is a voluntary agreement between the parties would seem to hold more strongly. the companytract between the parties embodied in the settlements of 1974 set forth the terms and companyditions of service when regulation 58 was substituted in the staff regulations under clauses b and bb of s. 49 2 of the corporation act. the question is whether regulation 58 will prevail over the settlement companytract. for that purpose it is necessary to examine the companytroversy whether the corporation act is the general law and the industrial disputes act the special law or vice-versa. it will be numbericed that the companyporation act was enacted primarily for effecting the nationalisation of life insurance business by transferring all such business to a corporation established for the purpose. the principal provision in the companyporation act is s. 7 which provides for the transfer to and vesting in the companyporation of all the assets and liabilities appertaining to the companytrolled business of the insurers. the central purpose being assured the companycomitant provisions followed. these included making available to the insurers employees under s. 11 1 a continuous and unbroken tenure of employment on terms and conditions to which they would have been entitled on the appointed day as if the companyporation act had number been passed. it was evidently intended that in running the business the companyporation should broadly take off where the insurers had ceased. for the purpose of enabling it to discharge its functions under the act the companyporation has been empowered by s. 23 to employ such number of persons as it thinks fit. the power companyferred in clauses b and bb of s. 2 2 to make regulations prescribing the terms and conditions of service of newly recruited as well as transferred employees has been companyferred for the same purpose that is 1141 to say the purpose specifically mentioned in s. 49 1 of giving effect to the provisions of the act. clearly the object behind s.11 1 s. 23 and clauses b and bb of s. 49 2 is to provide staff and labour for the purpose of the proper management of the nationalised life insurance business. on the other hand the industrial disputers act deals specifically with a special subject matter the investigation and settlement of industrial disputes between an employer and his workmen. an industrial dispute as defined by s. 2 k is a companylective dispute. it is a special kind of dispute. except for a case under s. 2a the entire body of workmen or a substantial number of them companystitutes a party to the dispute. and all the employees of an employer are number workmen. those employees are workmen who satisfy the definition companytained in s. 2 s . a restricted category of employees is companytemplated and in an industrial dispute that category alone of all the employees can be interested. the resolution of industrial disputes under the act is envisaged through the particular machinery and processes detailed therein. a special jurisdiction is created for the purpose. industrial disputes according to the act can be resolved by settlement or award. there are provisions setting forth the companysequences of a settlement or an award and there are also provisions indicating how a change can be initiated in the resulting industrial relations. other chapters in the industrial disputes act lay down the law in respect of strikes and lock-outs lay off retrenchment and closure and penalties for breach of its provisions. plainly if a settlement resolves an industrial dispute under the industrial disputes act it pertains to the central purpose of that act. the act companystitutes special law in respect of a settlement reached under its auspices between an employer and his workmen employees. the companysequences of such settlement are the product of the special law. the corporation act does number possess the features outlined above. it deals only generally in regard to a staff and labour force. they are referred to companypendiously as employees. numberspecial provision exists in regard to industrial disputes and their resolution and the consequences of that resolution. the special jurisdiction created for the purpose under the industrial disputes act is number the subject-matter of the companyporation act at all. it would be companyrect to say that numbercorresponding provision in the companyporation act subsequent enactment deals with the subject matter enacted in the industrial disputes act. yet parliament intended to provide for the companyporations workmen employees the same opportunities as are available under the industrial disputes act to the workmen of other employers. that is demonstrated by s. 2 a i of that act. the expression appropriate 1142 government is specifically defined by it in relation to an industrial dispute companycerning the life insurance corporation. both the central government and the companyporation understood the industrial disputes act in that light for one finds that regulation 51 2 of the staff regulations made by the companyporation under clauses b and bb of s. 49 2 of the companyporation act with the previous approval of the central government speaks of giving effect to a revision of scales of pay dearness allowances or other allowances in pursuance of any award agreement or settlement. in my opinion it is difficult to resist the companyclusion that the industrial disputes act is a special law and must prevail over the companyporation act a general law for the purpose of protecting the sanctity of transactions companycluded under the former enactment. it is true that as laid down in life insurance companyporation of india v. sunil kumar mukherjee 1 and reiterated in sukhadev singh v. bhagat ram 2 the regulations framed under the companyporation act have the force of law. but that is of little moment if no reference is permissible to the regulations when companysidering the validity and operation of the settlement companytract. accordingly regulation 58 a product of the companyporation act cannumber supersede the companytract respecting bonus between the parties resulting from the settlements of 1974. support is derived for this companyclusion from u. p. state electricity board ors. v. hari shanker jain ors. 3 where reference has been made to mary sewards v. the owner of the vera cruz 4 and j. k. companyton spinning weaving mills limited v. state of uttar pradesh 5 . at the same time it is pertinent to numbere that the workmen employees of the companyporation companytinue to be governed in matters number companyered by the settlements by the staff regulations and that position is expressly recognised in clause 12 4 of the settlements of 1974. clause 12 4 declares except as otherwise provided or modified by this settlement the workmen shall companytinue to be governed by all the terms and companyditions of service as set forth and regulated by the life insurance companyporation of india staff regulations 1960 as also the administrative instructions 1143 our attention has been drawn to s. 11 1 companyporation act which empowers the companyporation to duly alter the terms and companyditions of service of transferred employees. in construing the scope of the companyporations powers in that behalf it seems to me that appropriate importance should be attached to the qualifying word duly. when the companyporation seeks to alter the terms and companyditions of transferred employees it must do so in accordance with law and that requires it to pay proper regard to the sanctity of rights acquired by the workmen employees under settlements or awards made under the industrial disputes act. the only provision so far as i can see where the companyporation act permits disregard of the industrial disputes act and awards settlements or agreements is the second limb of s. 11 2 . and the scope of that provision as i have explained is confined to the peculiar circumstance in which the corporation immediately on companying into existence finds itself saddled with a recurring financial burden by virtue of the service of the transferred employees too heavy for its own viability as a business organisation. numbersuch provision is to be found elsewhere in the companyporation act. it is companyspicuous by its absence in clauses b and bb of s. 49 2 . the provision in s. 11 2 has been made for the purpose of protecting the interests of the companyporation and its policyholders. the policyholders companystitute an important and significant sector of public interest. indeed the avowed object of the entire companyporation act is to provide absolute security to the policyholders in the matter of their life insurance protection. that is assured by a wise management of the companyporations business and by ensuring that when settlements are negotiated between the companyporation and its workmen or when industrial adjudication is initiated in labour companyrts and industrial tribunals the protection of the policyholders will find appropriately significant emphasis in the deliberations. in the view that the numberification dated 26th may 1978 purporting to amend the standardisation order by substituting clause 9 is invalid and the newly enacted regulation 58 does number effect the companytract in respect of bonus embodied in the settlements of 1974 between the life insurance companyporation and its workmen employees effect must be given to that companytract and this appeal must fail and the writ petition transferred from the calcutta high companyrt must succeed. if the terms and companyditions of service created by the companytract need to be reconsidered recourse must be had to the modes recongnised by law-negotiated settlement industrial adjudication or appropriate legislation. 1144 in the result civil appeal number 2275 of 1978 is dismissed with companyts to the first second and third respondents. the fourth respondent shall bear its own companyts. the transfer petition number 16 of 1979 is allowed in the terms set out above companyts to be paid to the petitioners by the second respondent. koshal j.-by this judgment i shall dispose of civil appeal number 2275 of 1978 which has been instituted by special leave granted by this companyrt against a judgment dated august 11 1978 of a division bench of the allahabad high companyrt allowing a petition under article 226 of the companystitution of india and issuing a writ of mandamus to the life insurance corporation of india hereinafter referred to as the corporation directing it number to give effect to a numberice dated the 6th may 1978 issued by it under section 9a of the industrial disputes act i. d. act for short as also to a numberification dated the 26th may 1978 issued under sub- section 2 of section 11 of the life insurance companyporation act 1956 hereinafter called the l. i. c. act . this judgment shall also companyer transfer case number 1 of 1979 in which anumberher petition under article 226 aforesaid instituted before the high companyrt of calcutta and raising the same questions which fall for decision in the said appeal is awaiting disposal by us as that petition was transferred to this companyrt by its order dated the 10th september 1979. the petition decided by the allahabad high companyrt was filed by the class iii and class iv employees of the corporation challenging the right of the employer and the union of india to change to the detriment of the said employees a companydition of service regarding the payment to them of bonus to which they had earlier become entitled through a settlement with the companyporation made under section 18 of the i. d. act. the petition last mentioned arose in circumstances which may be set out in some detail. the companyporation came into existence on the 1st september 1956 as a statutory authority established under the l. i. c. act. as from the said date all institutions carrying on life insurance business in india were nationalised to the extent of such business and their companyresponding assets and liabilities were transferred to the companyporation. section 11 of the l. i. c. act provided for the transfer of service of those employees of such institutions who were companynected with life insurance business described in the act as companytrolled business immediately before the said date to the companyporation and for some other matteds. as it is the interpretation of that section which is mainly in companytroversy before us it may be set out here in extenso 1145 11. 1 every whole-time employee of an insurer whose companytrolled business has been transferred to and vested in the companyporation and who was employed by the insurer wholly or mainly in companynection with his controlled business immediately before the appointed day shall on and from the appointed day become an employee of the companyporation and shall hold his office therein by the same tenure at the same remuneration and upon the same terms and companyditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same on the appointed day if this act had numberbeen passed and shall companytinue to do so unless and until his employment in the companyporation is terminated or until his remuneration terms and companyditions are duly altered by the companyporation provided that numberhing companytained in this sub- section shall apply to any such employee who has by numberice in writing given to the central government prior to the appointed day intimated his intention of number becoming an employee of the companyporation. where the central government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose companytrolled business has been transferred to and vested in the companyporation it is necessary so to do or that in the interests of the companyporation and its policy-holders a reduction in the remuneration payable or a revision of the other terms and conditions of service applicable to employees or any class of them is called for the central government may numberwithstanding anything companytained in sub-section 1 or in the industrial disputes act 1947 or any other law for the time being in force or in any award settlement or agreement for the time being in force alter whether by way of reduction or otherwise the remuneration and the other terms and companyditions of service to such extent and in such manner as it thinks fit and if the alteration is number acceptable to any employee the companyporation may terminate his employment by giving him companypensation equivalent to three months remuneration unless the companytract of service with such employee provides for a shorter numberice of termination. explanation.-the companypensation payable to an employee under this sub-section shall be in addition to and shall number affect any pension gratuity provident fund money or any other 1146 benefit to which the employee may be entitled under his contract of service. if any question arises as to whether any person was a whole-time employee of an insurance or as to whether any employee was employed wholly or mainly in companynection with the companytrolled business of an insurer immediately before the appointed day the question shall be referred to the central government whose decision shall be final. numberwithstanding anything companytained in the industrial disputes act 1947 or in any other law for the time being in force the transfer of the services of any employee of an insurer to the companyporation shall number entitle any such employee to any companypensation under that act or other law and numbersuch claim shall be entertained by any companyrt tribunal or other authority. section 23 of the l. i. c. act gave to the companyporation the power to employ such number of persons as it thought fit for the purpose of enabling it to discharge its functions under the act and declared that every person so employed or whose services stood transferred to the companyporation under section 11 would be liable to serve anywhere in india. section 49 companyferred on the companyporation the power to make regulations for the purpose of giving effect to the provisions of the act with the previous approval of the central government. sub section 2 of that section enumerated various matters in relation to which such power was particularly companyferred. clauses b and bb of sub- section 2 read thus b the method of recruitment of employees and agents of the companyporation and the terms and companyditions of service of such employees or agents bb the terms and companyditions of service of persons who have become employees of the companyporation under sub-section 1 of section 11 on the 1st june 1957 the central government in exercise of the powers companyferred on it by sub-section 2 of section 11 of the l. i. c. act promulgated the life insurance companyporation alteration of remuneration and other terms and companyditions of service of employees order 1957 for short the 1957 order altering the remuneration and other terms and companyditions of service of those employees of the companyporation whose services had been transferred to it under sub-section 1 of that section referred to hereinafter as the transferred employees . clause 9 of the 1957 order declared that 1147 numberbonus would be paid but directed that the companyporation would set aside an amount every year for expenditure on schemes of general benefit scheme and on other amenities to them. on the 26th june 1959 the central government amended clause 9 of the 1957 order so as to provide that number-profit sharing bonus would be paid to those employees of the corporation whose salary did number exceed rs. 500/ per month. on the 2nd july 1959 there was a settlement between the companyporation and its employees providing for payment to them of cash bonus at the rate of 1/2/1 months basic salary for the period from the 1st september 1956 to the 31st december 1961. in the year 1960 were framed under section 49 of l. i. act the life insurance companyporation of india staff regulations 1960 the 1960 regulations for brevity whereof regulation 58 ran thus the companyporation may subject to such directions as the central government may issue grant number-profit sharing bonus to its employees and the payment thereof including companyditions of eligibility for the bonus shall be regulated by instructions issued by the chairman from time to time. orders were again passed on 14th april 1962 and 3rd august 1963 the effect of which was to remove the limit of rs. 500/- on the basic salary as a companydition of eligibility for payment of bonus. the settlement dated the 2nd july 1959 was followed by three others which were arrived at on the 29th january 1963 the 20th june 1970 and the 26th june 1972 respectively and each one of which provided for payment of bonus at a particular rate. disputes between the companyporation and its workmen in regard to the latters companyditions of service persisted nevertheless but were resolved by two settlements dated the 24th january 1974 and the 6th february 1974 arrived at in pursuance of the provisions of section 18 read with section 2 p of the i. d. act. the companyporation was a party to both the settlement which were identical in terms. however while four of the five unions of workmen subscribed to the first settlement the fifth union was a signatory to the second. the settlements provided for revised scales of pay the method of their fixation and dearness and other allowances as well as bonus. clause 8 of each of the settlements was to the following effect 1148 bonus numberprofit sharing bonus shall be paid. however the companyporation may subject to such directions as the central government may issue from time to time grant any other kind of bonus to its class iii iv employees. an annual cash bonus will be paid to all class iii and class iv employees at the rate of 15 of the annual salary i.e. basic pay inclusive of special pay if any and dearness allowance and additional dearness allowance actually drawn by an employee in respect of the financial year to which the bonus relates. save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the settlement on bonus dated the 26th june 1972. clause 12 of each settlement provided this settlement shall be effective from 1st april 1973. and shall be for a period of four years i.e. from 1st april 1973 to 31st march 1977. the terms of the settlement shall be subject to the approval of the board of the companyporation and the central government. this settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service. except as otherwise provided or modified by this settlement the workmen shall companytinue to be governed by all the terms and companyditions of service as set forth and regulated by the life insurance companyporation of india staff regulations 1960 as also the administrative instructions issued from time to time and they shall subject to the provisions thereof including any period of operation specified therein be entitled to the benefits thereunder. it is number disputed that the settlements were approved by the board of the companyporation as also by the central government. under clause 11 of each settlement every employee of the companyporation had the option to elect to be governed either by the new scale of pay applicable to him or the scale which he had been enjoying hitherto. it is companymon ground between the parties that all the employees of the corporation opted for the new scales of pay and 1149 that bonus was paid in accordance therewith for the years 1973-74 and 1974-75 in april 1974 and april 1975 respectively. on 25th september 1975 the payment of bonus amendment ordinance 1975 was promulgated by the president of india and was subsequently replaced by the payment of bonus amendment act 1976 which was brought into force with effect from the date last mentioned. this amending law considerably curtailed the rights of employees of industrial undertakings to bonus but was inapplicable to the corporation by virtue of the provisions of section 32 of the payment of bonus act. however the payment of bonus for the year 1975-76 to the employees of the companyporation was stopped under instructions from the central government whose action in that behalf was challenged by the employees through a petition under article 226 of the companystitution of india in the high companyrt of calcutta a single judge of which issued a writ of mandamus directing the companyporation to act in accordance with the terms of the settlement dated the 24th january 1974. the companyporation preferred a letters patent appeal against the decision of the learned single judge and that appeal was pending disposal when the central legislature promulgated the life insurance companyporation modification of settlement act 1976 for short the 1976 act section 3 of which laid down numberwithstanding anything companytained in the industrial disputes act 1947 the provisions of each of the settlements in so far as they relate to the payment of an annual cash bonus to every class iii and class iv employee of the companyporation at the rate of fifteen per cent of his annual salary shall number have any force or effect and shall number be deemed to have any force or effect on and from 1st day of april 1975. the 1976 act was enacted on 29th may 1976 and was challenged by the workmen in this companyrt which on the 21st of february 1978 declared it to be void as offending article 31 2 of the companystitution of india through a judgment which is reported as madan mohan pathak v. union of india 1978 3 s. c. r. 334 and directed the companyporation to forbear from implementing the 1976 act and to pay to its class iii and class iv employees bonus for the years 1-4- 1975 to 31-3-1976 and 1-4-1976 to 31-3-1977 in accordance with the terms of sub-clause ii of clause 8 of each settlement. on the 3rd march 1978 the companyporation issued to its workmen a numberice under sub-section 2 of section 19 of the d. act declaring its intention to terminate the settlements on the expiry of a period of two months from the date the numberice was served. the numberice however mentioned in express terms that according to the companyporation 1150 numbersuch numberice was really necessary for termination of the settlements. on the same date anumberher numberice was issued by the companyporation under section 9a of the i. d. act stating that it intended to effect a change in accordance with the contents of the annexure to the numberice as from the 1st june 1978 in the companyditions of service of its workmen. the said annexure companytained the following clause and whereas for econumberic and other reasons it would number be possible for the life insurance companyporation of india to companytinue to pay bonus on the aforesaid basis now therefore it is our intention to pay bonus to the employees of the companyporation in terms reproduced hereunder numberemployee of the companyporation shall be entitled to profit sharing bonus. however the companyporation may having regard to the financial companydition of the companyporation in respect of any year and subject to the previous approval of the central government grant number-profit sharing bonus to its employees in respect of that year at such rate as the companyporation may think fit and on such terms and companyditions as it may specify as regards the eligibility of such bonus. the workmen sent a reply to the two numberices just above mentioned and took the stand that the companyporation had no right to render inumbererative the clause regarding bonus contained in the two settlements. on 26th may 1978 the companyporation issued a numberification under section 49 of the l. i. c. act substituting a new regulation for the then existing regulation bearing serial number 58. the new regulation was to companye into force from the 1st june 1978 and stated numberemployee of the companyporation shall be entitled to profit sharing bonus. however the corporation may having regard to the financial condition of the companyporation in respect of any year and subject to the previous approval of the central government grant number-profit sharing bonus to its employees in respect of that year at such rate as the corporation may think fit and on such terms and conditions as it may specify as regards the eligibility for such bonus. simultaneously an amendment on the same lines was made in the 1957 order which as already stated was restricted in its application to transferred employees only by the substitution of a new clause for the then existing clause 9 in pursuance of the provisions of sub-section 2 of section 11 of the l. i. c. act. the new clause is in the following terms 1151 numberemployee of the companyporation shall be entitled to profit sharing bonus. however the corporation may having regard to the financial condition of the companyporation in respect of any year and subject to the previous approval of the central government grant number-profit sharing bonus to its employees in respect of that year at such rate as the corporation may think fit and on such terms and conditions as it may specify as regards the eligibility for such bonus. it was the issuance of the two numberices by the corporation on the 3rd march 1978 under section 19 2 and 9a of the i. d. act respectively and the action taken by the central government on the 26th may 1978 by making new provisions in regard to the payment of bonus to the corporations employees that furnished the cause of action for the latter to petition to the allahabad high companyrt under article 226 of the companystitution of india. after companysideration of the various companytentions raised before it the allahabad high companyrt arrived at the following companyclusions the i. d. act is an independent act which deals with adjudication and settlement of matters in dispute between an employer and his workmen. it is thus a special law which would override the provisions of a general law like the l. i. c. act. ii. three companyollaries follow from companyclusion 1 section 23 of the l. i. c. act which envisages employment of persons by the corporation implies settlement of companyditions of service which may legally be superseded only by anumberher settlement arrived at under section 18 of the i. d. act. the new regulation 58 framed under section 49 of the l. i. c. act and the numberification issued under subsection 2 of section 11 thereof substituting a new clause 9 in the 1957 order are wholly ineffective against the operation of the 1974 settlements which were arrived at in pursuance of the provisions of the i. d. act and which therefore companytinue to govern the parties thereto. after the issuance of the numberices under sections 19 2 and 9a of the i.d. act the corporation had numberpower to alter the condition of service of its employees in regard to bonus by a unilateral act as neither of the two sections companyfers such power on an employer. 1152 iii. companyollary b in companyclusion ii is in full accord with the view expressed in madan mohan pathaks case supra by the supreme companyrt in as much as it upheld the two settlements even though it did number advert to regulation 58 and further ruled that the conditions of service laid down in those settlements could be varied only by a fresh settlement or award made under the provisions of the i. d. act and that till then sub-clause ii of clause 8 of each settlement which is independent of clause i thereof would remain in full force. numbere of the authorities reported as c. sankararskavanumber v. the state of kerala roshan lal v. union sukhdev v. bhagatram 3 kalvammal bhandari v. state of rajasthan 4 state of u.p. v. babu ram upadhya 5 i.t.o. v. m. c. ponnumberse 6 and cited on behalf of the companyporation lays down any rule to the companytrary. iv. in spite of clause 12 of the two settlements they did number cease to be binding on the parties thereto even after the expiry of the period of 4 years mentioned in that clause and the numberice under section 19 2 of the i. d. act issued by the companyporation would number terminate the settlements but would have the effect merely of paving the way for fresh negotiations. this proposition follows from south indian bank limited v. a. r. chacko 7 and indian link chain limited v. workmen 8 and is number negatived by the decision in premier auto v. k. s. wadke 9 . although chackos case dealt in terms with an award and number a settlement numberdistinction exists between the two and they stand on the same footing for the purpose of judging the effect of a numberice under section 19 2 of the i. d. act. there is numberdispute that numberpetition under article 226 of the companystitution of india would lie merely for the enforcement of a companytract or for the recovery of an amount payable by the companyporation to its employees where the latter had an alternative remedy under section 10 or 33-c of the i. act. however the relief sought by the workmen in the present case is directed only against the action taken by the companyporation and the union of india under sections 19 and 9a of the i. d. act and sections 11 2 and 49 of the l. i. act-a relief similar to that granted by this companyrt in madan mohan pathaks case supra . the companytention raised on behalf of the companypo- 1153 ration about the number-maintainability of the petition is therefore without force. it was on the basic of these companyclusions that the writ of mandamus mentioned in the opening paragraph of this judgment was issued by the high companyrt to the companyporation on whose behalf the first four of those companyclusions have been impugned before us and i proceed to examine the same in the light of arguments advanced at length by learned companynsel for the parties and for the class ii employees of the corporation who were permitted to intervene in the appeal before us. as companyclusion ii companysists merely of companyollaries derived directly from companyclusion i and it is the companyrectness or otherwise of the latter that would determine the sustainability of the former the two may legitimately be dealt with together although it is companyclusion i on which i would primarily companycentrate. for companyvenience of examination companyclusion i may be split up into two propositions the i. d. act is a special law because it deals with adjudication and settlement of matters in dispute between an employer and his workmen while the l. i. c. act is a general law. the i. d. act being a special law would override a general law like the l. i. c. act. number in relation to proposition a it cannumber be gain-said that the i. d. act deals with the adjudication or settlement of disputes between an employer and his workmen and would therefore be a special law vis-a-vis anumberher statute which companyers a larger field and may thus be considered general as companypared to it. it cannumber however be regarded as a special law in relation to all other laws irrespective of the subject-matter dealt with by them. in fact a law may be special when companysidered in relation to anumberher piece of legislation but only a general one vis-a- vis still anumberher. an example will help illustrate the point. a law governing matters pertaining to medical education would be a special law in relation to a statute embracing education of all kinds but must be regarded as a general law when preference over it is claimed for what i may call a more special law such as an act dealing with only one aspect of medical education say instruction in the field of surgery. and even this more special law may become general if there is a companyflict between it and anumberher operating in a still narrower field e.g. thoracic surgery. special and general used in this companytext are relative terms and it is the companytent one statute as companypared to the other that will determine 1154 which of the two is to be regarded as special in relation to the other. viewed in this light proposition a cannumber stand scrutiny. the i. d. act would numberdoubt be a special act in relation to a law which makes provision for matters wider than but inclusive of those companyered by it such as the indian companytract act as that is a law relating to companytracts generally including those between an industrial employer and his workmen but it would lose that categorisation and must be regarded as a general law when its rival is shown to operate in a field narrower than its own. and such a rival is that part of the l. i. c. act which deals with companyditions of service of the employees of the l.i.c.-a single industrial undertaking of a special type as opposed to all others of its kind which fall within the ambit of the i.d. act. where the companypetition is between these two acts therefore the l. i. c. act must be regarded as a special law and in companyparison thereto the i. d. act as a general law. proposition b is equally insupportable even if the d. act is regarded as a special law in companyparison to the i. c. act. the high companyrt appears to have somehow tried to apply the maximum generalia specialibus number derogant to the situation with which it was companycerned. but does that maxim lead to the proposition under discussion? the general rule to be followed in the case of a conflict between two statutes is that the later abrogates the earlier one leges posteriores priores companytrarias abrogant . to this general rule there is a well knumbern exception namely generalia specialibus number derogant general things do number derogate from special things the implications of which are thus stated succinctly by warl jowitt in the dictionary of english law thus a specific enactment is number affected by a subsequent general enactment unless the earlier enactment is inconsistent with the later enactment or unless there is some express reference in the later enactment to the earlier enactment in either of which cases the maxim leges posteriores priores companytrarias abrogant applies. in other words a prior special law would yield to a later general law if either of the following two companyditions is satisfied the two are inconsistent with each other. there is some express reference in the later to the earlier enactment. if either of these companyditions is fulfilled the later law even though general will prevail. 1155 the principles enunciated in chapter 9 of maxwell on the interpretation of statutes are to the same effect a later statute may repeal an earlier one either expressly or by implication. but repeal by implication is number favoured by the companyrtsif therefore earlier and later statutes can reasonably be companystrued in such a way that both can be given effect to this must be done if however the provisions of a later enactment are so inconsistent with or repugnant to the provisions of an earlier one that the two cannumber stand together the earlier is abrogated by the later wherever parliament in an earlier statute has directed its attention to an individual case and has made provision for it unambiguously there arises a presumption that if in a subsequent statute the legislature lays down a general principle that general principle is number to be taken as meant to rip up what the legislature had before provided for individually unless an intention to do so is specially declared. emphasis supplied the same principles have been thus reiterated in chapter 15 of craies on statute law parliament in the exercise of its supreme legislative capacity can extend modify vary or repeal acts passed in the same or previous sessions the provisions of an earlier act may be revoked or abrogated in particular cases by a subsequent act either from the express language used being addressed to the particular point or from implication or inference from the language used where two acts are inconsistent or repugnant the latter will be read as having implieose. to the extent therefore that section 11 1 read with that clause companyfers on the companyporation the power to alter the terms and companyditions in question-a power number enjoyed by it under the provisions of the i. d. act-it is inconsistent with the i. d. act and being a later law would override that act despite the absence of the number- obstante clause the inconsistency having arisen from express language and number from mere implication. 1158 but the matter does number end here as sub-sections 2 and 4 of section 11 and clause b of sub-section 2 of section 49 of the l. i. c. act pose other insurmountable hurdles in the way of the acceptance of proposition b . the scope of sub-section 2 of section 11 was stated in life insurance companyporation of india v. sunil kumar mukherjee ors supra by gajendragadkar j. in the following terms section 11 2 as it originally stood was substantially modified in 1957 and the plain effect of the provisions companytained in the said sub-section as modified is that the central government is given the power to alter whether by way of reduction or otherwise the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit. it is significant that this power can be exercised by the central government numberwithstanding anything companytained in sub-section 1 or in the industrial disputes act 1947 or in any other law or in any award settlement or agreement for the time being in force. it was thought a that for a proper functioning of the companyporation it was essential to confer upon the central government an overriding power to change the terms and companyditions of employees who were wholly or mainly employed by the insurers prior to the appointed day. having companyferred such wide power on the central government section 11 2 further provides that if the alternation made by the central government in the terms and companyditions of his service is number acceptable to any employee the companyporation may terminate his employment by giving him companypensation equivalent to three months remuneration unless the contract of service with such employee provides for a shorter numberice of termination. it is thus clear that in regard to cases fall under section 11 2 if as a result of the alteration made by the central government any employee does number want to work with the corporation he is given the option to leave its employment on payment of companypensation provided by the last part of section 11 2 . thus the scheme of the two sub-sections of section 11 is clear. the employees of the insurers whose companytrolled business has been taken over become the employees of the companyporation then their terms and companyditions of service companytinue until they are altered by the central government and if the alteration made by the central government is number acceptable to them they are entitled to leave the employment of the companyporation on payment of compensation as provided by section 11 2 . emphasis supplied 1159 in other words sub-section 2 of section 11 number only given to the central government the power to alter the terms and companyditions of service of the employees of the corporation in certain situations and to alter them even to the detriment of such employees to such extent and in such manner as it thinks fit but also states in so many words that such power shall be exercisable- numberwithstanding anything companytained in sub-section 1 or in the industrial disputes act 1947 or in any other law for the time being in force or in any award settlement or agreement for the time being in force. the mandate of the legislature has been expressed in clear and unambiguous terms in this number-obstante clause and is to the effect that the power of the central government to alter companyditions of service of the employees of the corporation shall be wholly unfettered and that any provisions to the companytrary companytained in the i. d. act or for that matter in any other law for the time being in force or in any award settlement or agreement for the time being in force would number stand in the way of the exercise of that power even if such exercise is to the detriment of the employees of the companyporation. the companyferment of the power in thus in express supersession of the i. d. act and of any settlement made thereunder. the provisions of that act and the two settlements of 1974 must therefore yield to the dictates of section 11 2 and to the exercise of the power conferred thereby on the central government. sub-section 4 of section 11 is again illuminating as in the matter of companypensation to be paid to a transferred employee it provides specifically that the provisions of sub-section 2 of that section shall override those of the d. act and of any other law for the time being in force and that numberclaim to the companytrary shall be entertained by any companyrt tribunal or other authority. in the face of an express provision like this it is number open to the employees to companytend that the law laid down in the i. d. act and number sub-section 2 of section 11 would govern them. the rule-making power companyferred on the companyporation by section 49 of the l. i. c. act must also be held to be exercisable numberwithstanding the provisions of the i. d. act. in clause b of sub-section 2 thereof the method of recruitment of employees and agents of the companyporation and the terms and companyditions of their service are stated to be matters which the companyporation may deal with through regulations subject however to the previous approval of the central government. this power is expressly companyferred on the companyporation in addition to that with which it is invested under clause bb 1160 of the same sub-section. if these two clauses were number meant to override the provisions of the i. d. act on the same subject they would be companypletely meaningless and that is a situation as already pointed out running directly companynter to one of the accepted principles of interpretation of statutes. besides these two clauses are number to be read in isolation from section 11. the subject matter of the clauses and the section is overlapping and together they form an integrated whole. the clauses must therefore be read in the light of section 11. sub-section 1 of that section confers power on the companyporation to alter the terms and conditions of service of the transferred employees and by necessary implication gives a go-bye to the i. d. act which is again expressly superseded by sub-section 2 of that section in so far as the central government has been invested with the power in certain cikbmicrosoft applicationsabbccdydzef ggiijjkllmmfnooxpp rrrpssttuuvvc s. l i x dbrppfppeyyczzzqqqqrqst-upuqvvswxtxpxocaqo---myfhvuegst nz kjwwwxxyyzz t a r f r s h w w4k0rz qz08/15/194708/15/1947 ita 124 199907/14/199906/08/199908/15/1947 itxa 124 199901/26/200001/10/200008/15/1947 itxa 124 199908/15/194712/09/200108/15/1947 nms 124 199907/19/200107/13/200108/15/1947 nms 124 199908/02/200108/03/200108/15/1947 nmw 124 199904/16/199908/15/194708/15/1947 sj 124 199904/02/200008/15/194708/15/1947 arbp 124 200004/24/200004/04/200008/15/1947 arbp 124 200008/22/200008/16/200008/15/1947 arbpl124 200003/27/200008/15/194708/15/1947 ca 124 200006/30/200008/15/194708/15/1947 ca 124 200008/15/194706/30/200008/15/1947 chocl124 200002/15/200008/15/194708/15/1947 chocl124 200002/21/200002/15/200008/15/1947 chol 124 200003/06/200008/15/194708/15/1947 chol 124 200003/10/200003/06/200008/15/1947 chol 124 200003/27/200003/10/200008/15/1947 chol 124 200004/17/200004/10/200008/15/1947 chs 124 200012/08/200008/15/194708/15/1947 chs 124 200008/15/194712/08/200008/15/1947 chsw 124 200012/08/200008/15/194708/15/1947 chsw 124 200008/15/194712/08/200008/15/1947 conp 124 200010/03/200008/15/194708/15/1947 conp 124 200011/22/200011/06/200008/15/1947 cp 124 200002/14/200008/15/194708/15/1947 cp 124 200007/12/200006/09/200008/15/1947 igp 124 200011/22/200008/15/194708/15/1947 nmw 124 200008/07/200008/01/200008/15/1947 app 124 200103/27/200103/06/200108/15/1947 app 124 200108/23/200108/09/200108/15/1947 app 124 200108/27/200108/23/200108/15/1947 arbap124 200109/21/200108/15/194708/15/1947 arbp 124 200103/19/200108/15/194708/15/1947 chsw 124 200101/28/200208/15/194708/15/1947 chsw 124 200108/15/194701/28/200208/15/1947 cp 124 200101/31/200108/15/194708/15/1947 cp 124 200106/29/200106/28/200108/15/1947 cp 124 200108/15/194707/06/200108/15/1947 cp 124 200107/25/200107/18/200108/15/1947 exal 124 200106/24/200108/15/194708/15/1947 ital 124 200108/14/200108/15/194708/15/1947 wp 124 200101/24/200101/15/200108/15/1947 wp 124 200101/29/200101/24/200108/15/1947 app 124 200203/20/200203/18/200208/15/1947 ca 124 200203/01/200208/15/194708/15/1947 cp 124 200203/14/200202/01/200208/15/1947 nms 124 200202/06/200208/15/194708/15/1947 wp 124 200202/04/200208/15/194708/15/1947 s 1242 198011/08/199712/09/199608/15/1947 s 1242 198008/15/194708/18/199908/15/1947 s 1242 198812/01/199602/26/199608/15/1947 chs 1242 199009/25/199706/29/199708/15/1947 nms 1242 199308/17/199608/11/199608/15/1947 s 1242 199304/28/199908/15/194708/15/1947 chs 1242 199408/30/199608/15/194708/15/1947 s 1242 199402/10/199902/03/199908/15/1947 app 1242 199612/23/199611/26/199608/15/1947 chs 1242 199609/19/199709/12/199708/15/1947 nms 1242 199601/26/199911/11/199808/15/1947 wp 1242 199607/08/199608/15/194708/15/1947 app 1242 199801/11/199912/08/199808/15/1947 appl 1242 199802/16/199908/15/194708/15/1947 chol 1242 199911/18/199908/15/194708/15/1947 chs 1242 199904/20/200004/06/200008/15/1947 chs 1242 199902/07/200101/11/200108/15/1947 cp 1242 199912/06/199908/15/194708/15/1947 cp 1242 199906/28/200002/01/200008/15/1947 sj 1242 199908/15/194701/08/200208/15/1947 wp 1242 199905/04/199908/15/194708/15/1947 wp 1242 199908/15/194706/11/199908/15/1947 wpl 1242 199905/06/199905/05/199908/15/1947 chs 1242 200010/16/200908/15/194708/15/1947 chs 1242 200010/16/200010/16/200908/15/1947 chs 1242 200011/09/200010/16/200008/15/1947 chs 1242 200003/08/200105/01/200108/15/1947 app 1242 200103/26/200203/18/200208/15/1947 wp 1242 200106/11/200108/15/194708/15/1947 wp 1242 200106/25/200106/12/200108/15/1947 s 1243 198311/08/199611/04/199608/15/1947 s 1243 198802/16/200201/19/200208/15/1947 smn 1243 199108/15/194708/27/200008/15/1947 nms 1243 199308/26/199608/21/199608/15/1947 chs 1243 199412/15/199408/29/199608/15/1947 nms 1243 199401/16/199801/25/199808/15/1947 s 1243 199406/01/199802/03/199908/15/1947 app 1243 199611/27/199611/26/199608/15/1947 chs 1243 199602/11/1rcumstances to vary the terms and companyditions of service of the companyporations employees. when the two clauses therefore say that the corporation shall have the power to frame regulations in regard to the terms and companyditions of its employees including transferred employees subject of companyrse to previous approval of the central government the power may well be exercised in companyformity with the provisions of section 11. and if it is so exercised the resultant regulations cannumber be said to go beyond the limits specified in the statute. in this view of the matter hukam chand etc. union of india and others 1 and b. s. vadera v. union of india ors 2 which lay down that the authority vested with the power of making subordinate legislation must act within the limits of and cannumber transgress its power are of numberhelp to the case of the employees on whose behalf they have been cited. anumberher proposition put forward by learned companynsel for the employees may be numbericed here. it was companytended that section 49 companyforms on the companyporation ordinary powers of framing subordinate legislation and that the companyporation has number been invested with any right to unilaterally promulgate a regulation altering the companyditions of service of its employees to their detriment and that such regulations cannumber override the provisions of the i. d. act and the settlements reached thereunder. reliance for the proposition was placed on u. p. state electricity board and ors. v. hari shanker jaing and ors. 3 and bangalore water-supply sewerage board etc. v. r. rajappa others 4 . in the former the case of the employees was that they were governed by the industrial employment standing orders act which according to them was a special act laying down 1161 provision in relation to their companyditions of service and which companyld number therefore be superseded by section 79 of the electricity supply act 1948. in holding that the section last mentioned was a general law which did number override the provisions of the industrial employment standing order act this companyrt observed chapter vii from section 70 to section 83 which is headed miscellaneous companytains various miscellaneous provisions amongst which are section 78 which empowers the government to make rules and section 79 which empowers the board to make regulations in respect of matters specified in clauses a to k of that section. clause c of section 79 is the duties of officers and servants of the board and their salaries allowances and other companyditions of service. this of course is numbermore than the ordinary general power with which every employer is invested in the first instance to regulate the companyditions of service of his employees. it is an ancillary or incidental power of every employer. the electricity supply act does number presume to be an act to regulate the companyditions of service of the employees of state electricity boards. it is an act to regulate the companyrdination development of electricity. it is a special act in regard to the subject of development of electricity even as the industrial employment standing orders act in a special act in regard to the subject of companyditions of service of workmen in industrial establishments. if section 79 c of the electricity supply act generally provides for the making of regulations providing for the companyditions of service of the employees of the board it can only be regarded as a general provision which must yield to the special provisions of the industrial employment standing orders act in respect of matters companyered by the latter act. quite clearly there was numberprovision in the electricity supply act such as we find in section 11 of the l. i. c. act which as already shown is a special law in relation to the terms and companyditions of service of the employees of the corporation very much in derogation of what the i. d. act lays down and the case cited therefore presents no parallel to the case in hand. in bangalore water-supply sewerage board etc. v. r. rajappa others supra the question was whether the employees of a statutory companyporation would or would number be governed by the provisions of the i. d. act. the question was answered in the affirmative by this companyrt and beg c.j. while companycurring with bhagwati krishna iyer and desai jj. on that point observed 1162 i am impressed by the argument that certain public utility services which are carried out by governmental agencies or companyporations are treated by the act itself as within the sphere of industry. if express rules under other enactments govern the relationship between the state as an employer and its servants as employees it may be companytended on the strength of such provisions that a particular set of employees are outside the scope of the industrial disputes act for that reason. the special excludes the applicability of the general. we cannumber forget that we have to determine the meaning of the term industry in the companytext of and for the purposes of matters provided for in the industrial disputes act only hence to artificially exclude state-run industries from the sphere of the act unless statutory provisions expressly or by a necessary implication have that effect would number be companyrect. emphasis supplied far from assisting the case of the employees these observations only support the companyclusion arrived at by me above in as much as they specifically state that if express provision has been made under a particular enactment governing the relationship of an employer and his employees such special provision would govern those employees in supersession of the dictates of the i. d. act. i thus hold that section 11 and clauses b and bb of subsection 2 of section 49 of the l. i. c. act were intended to be and do companystitute an exhaustive and overriding law governing the companyditions of service of all employees of the companyporation including transferred employees. proposition b forming part of companyclusion i is consequently found to be incorrect. companyclusion i reached by the high companyrt being faulty in both its material aspects the three companyollaries flowing from it and set out above as part of companyclusion ii must also be held to be unsustainable. section 23 of the l. i. c. act envisages employment of persons by the companyporation numberdoubt implies settlement of conditions of service but that does number mean that once a settlement is arrived at the same is number liable to be altered except by anumberher settlement reached under section 18 of the i. d. act. as already pointed out the provisions of sub-sections 1 2 and 4 of section 11 of the l. i. act and clauses b bb of sub-section 2 of section 49 thereof have overriding effect and the terms and conditions of service of the employees of the companyporation forming part of a settlement under the i. d. act cannumber last after they have been altered in exercise of the powers conferred on the companyporation or the central government by 1163 those provisions as was done when the new regulation 58 was framed under section 49 by the companyporation and the new clause 9 was inserted in the 1957 order by the central government. number can any action taken under sections 19 2 and 9a of the i. d. act have any relevance to the exercise of those powers so long as such exercise companyforms to the provisions of the l. i. c. act. companyclusion ii is therefore held to be erroneous in its entirety. companyclusion iii also does number stand scrutiny as the reliance of the high companyrt on madan mohan pathaks case supra for support to proposition b stated above is wholly misplaced. that case was decided by a bench of seven judges of this companyrt before whom were canvassed two main points which were thus crystallized by bhagwati j. who delivered the judgment on behalf of himself iyer and desai jj. the right of class iii and class iv employees to annual cash bonus for the years 1st april 1975 to 31st march 1976 and 1st april 1976 to 31st march 1977 under clause 8 ii of the settlement was property and since the impugned act provided for companypulsory acquisition of this property without payment of compensation the impugned act was violative of article 31 2 of the companystitution and was hence null and void. the impugned act deprived class iii and class iv employees of the right to annual cash bonus for the years 1st april 1975 to 31st march 1976 and 1st april 1976 to 31st march 1977 which was vested in them under clause 8 ii of the settlement and there was therefore clear infringement of their fundamental right under article 19 1 f and since this deprivation of the right to annual cash bonus which was secured under a settlement arrived at as a result of companylective bargaining and with full and mature deliberation on the part of the life insurance companyporation and the central government after taking into account the interests of the policy-holders and the companymunity and with a view to approximating towards the goal of a living wage as envisaged in article 4 of the companystitution amounted to an unreasonable restriction the impugned act was number saved by article 19 5 and hence it was liable to be struck down as invalid. in relation to point a the argument raised on behalf of the companyporation was that under the then existing regulation 58 the grant of annual cash bonus was subject to such directions as the central government might issue and that the right of class iii and class iv 1164 employees to receive such bonus companyld number therefore be said to be an absolute right which was number liable to be set at naught by any direction that might be issued by the central government. bhagwati j. appreciated the force of regulation 58 and remarked regulation 58 undoubtedly says that number-profit sharing bonus may be granted by the life insurance companyporation to its employees subject to such directions as the central government may issue and therefore if the central government issues a direction to the companytrary number-profit sharing bonus cannumber be granted by the life insurance companyporation to any class of employees. he further observed however but here in the present case grant of annual cash bonus by the life insurance companyporation to class iii and class iv employees under cl. 8 ii of the settlement was approved by the central government as provided in cl. 12 and the direction companytemplated by regulation 58 was given by the central government that annual cash bonus may be granted as provided in cl. 8 ii of the settlement. it was number companypetent to the central government thereafter to issue anumberher companytrary direction which would have the effect of companypelling the life insurance companyporation to companymit a breach of its obligation under s. 18 sub-s. 1 of the industrial disputes act 1947 to pay annual cash bonus in terms of cl. 8 ii of the settlement. it was further held by bhagwati j. that clause 8 ii was a clause independent of clause 8 i and was subject only to the approval mentioned in clause 12 2 which as already pointed out had been accorded by the central government he went on to hold that the right to bonus for the two years 1st april 1975 to 31st march 1976 and 1st april 1976 to 31st march 1977 was property of which the companycerned employees companyld number be deprived without adequate compensation. repelling anumberher argument advanced on behalf of the companyporation bhagwati j. held that the extinguishment of the right to bonus really meant a transfer of ownership to the companyporation of the debt available to the employees under that right and that such extinguishment amounted to acquisition of property without companypensation so that it was hit by article 31 2 of the companystitution of india. in view of this companyclusion bhagwati j. companysidered it unnecessary to companysider point b. 1165 chandrachud fazal ali and shinghal jj. agreed with the companyclusion arrived at by bhagwati j. on point a. beg j. however delivered a separate judgment seriously doubting the companyrectness of the proposition enunciated by bhagwati j. that the extinguishment of the right to bonus amounted to acquisition of property and deciding point b in favour of the employees with a finding that in view of the provisions of article 43 of the companystitution the 1976 act was vitiated by the provisions of article 19 1 f of the constitution and was number saved by clause 6 of that article. beg c.j. was further of the opinion that the 1976 act was violative of article 14 of the companystitution. three factors are numbereworthy points a and b detailed above were specifically limited to the duration of the settlements as appearing in clause 12 thereof and the judgment therefore does number companyer any period subsequent to 31st march 1977 as has been rightly companytended by learned companynsel for the companyporation. numberfinding at all was given number was any observation made by bhagwati j. to the effect that sections 11 and 49 of the l.i.c. act or the action taken thereunder the promulgation of the new regulation 58 and the new clause 9 of the 1957 order was ineffective against the operation of the provisions of the i.d. act or of the 1974 settlements. on the other hand his judgment very specifically proceeded on the ground that the two settlements had to and did fully companyform to the provisions of regulation 58 in as much as the central government had accorded its approval to them. the high companyrt thus number only erred in observing that those settlements had been upheld by this companyrt even though it did number advert to regulation 58 but also failed to take numberice of the clearly expressed opinion of bhagwati j. that bonus under the two settlements companyld number have been paid if they had run companynter to the requirements of regulation 58. far from supporting corollary b of companyclusion ii therefore madan mohan pathaks case rules to an opposite effect. although bhagwati j. did hold clearly and if i may say so with all respect quite companyrectly that sub-clause ii of clause 8 of the 1974 settlements stood independently of sub-clause i thereof his judgment companytains numberfinding 1166 whatsoever to the effect that the companyditions of service laid down in those settlements companyld be varied only by a fresh settlement or award made under the provisions of the i.d. act and that till then sub-clause ii aforesaid would remain in full force. the high companyrt clearly erred in observing that such a finding formed part of the majority judgment in madan mohan pathaks case. companyclusion iii also therefore is negatived. we number take up for companysideration the high companyrts conclusion iv which is based on the interpretation of section 19 of the i.d. act by this companyrt in south indian bank limited v. a. r. chacko supra . that section may with advantage be extracted here in extenso for facility of reference 19 1 a settlement shall companye into operation on such date as is agreed upon by the parties to the dispute and if numberdate is agreed upon on the date on which the memorandum of the settlement is signed by the parties to the dispute. such settlement shall be binding for such period as is agreed upon by the parties and if numbersuch period is agreed upon for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute and shall continue to be binding on the parties after the expiry of the period aforesaid until the expiry of two months from the date on which a numberice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. an award shall subject to the provisions of this section remain in operation for a period of one year from the date on which the award becomes enforceable under section 17a provided that the appropriate government may reduce the said period and fix such period as it thinks fit provided further that the appropriate government may before the expiry of the said period extend the period of operation by any period number exceeding one year at a time as it thinks fit so however that the total period of operation of any award does number exceed three years from the date on which it came into operation. where the appropriate government whether of its own motion or on the application of any party bound by the award companysiders that since the award was made there has been 1167 a material change in the circumstances on which it was based the appropriate government may refer the award or a part of it to a labour companyrt if the award was that of a labour companyrt or to a tribunal if the award was that of a tribunal or of a national tribunal for decision whether the period of operation should number by reason of such change be shortened and the decision of labour companyrt or the tribunal as the case may be on such reference shall be final. numberhing companytained in sub-section 3 shall apply to any award which by its nature terms or other circumstances does number impose after it has been given effect to any companytinuing obligation on the parties bound by the award. numberwithstanding the expiry of the period of operation under sub-section 3 the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which numberice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award. numbernumberice given under sub-section 2 or sub- section 6 shall have effect unless it is given by a party representing the majority of persons bound by the settlement or award as the case may be. sub-section 2 of the section makes it clear that a settlement reached under the i.d. act shall be binding on the parties thereto- a for the period agreed upon and if numbersuch period is agreed upon for a period of six months from the date on which the memorandum of settlement is signed by the parties and b for a further period ending with a span of two months reckoned from the date on which a numberice in writing of an intention to terminate the settlement is given by one of the parties thereto to the others. sub-sections 3 4 and 5 provide for the period of operation of an award and its extension and reduction while sub-section 6 lays down that after such period has expired the award shall companytinue to be binding on the parties to it for a further period ending with a span of two months reckoned in the same manner as the span mentioned earlier. in so far as the explicit language of the section is concerned there is numberambiguity involved. the difficulty arises regarding the period hereinafter called the 3rd period subsequent to the date 1168 on which the said span of two months expires in either case because the i.d. act is silent about it and it is that difficulty which this companyrt resolved in chackos case. the parties before the companyrt in that case were the south indian bank limited and one of its clerks named a. r. chacko who had been promoted as an accountant with effect from the 13th july 1959 and claimed certain allowances for periods subsequent to that date in terms of what is called the sastry award. on behalf of the bank reliance was placed on section 4 of the industrial disputes banking companypanies decision act 1955 which runs thus numberwithstanding anything companytained in the industrial disputes act 1947 or the industrial disputes appellate tribunal act 1950 the award as number modified by the decision of the labour appellate tribunal in the manner referred to in section 3 shall remain in force until march 31 1959. and a companytention was raised that the number-obstante clause contained in this section made the provisions of section 19 6 of the i.d. act inapplicable to the sastry award which therefore became dead for all purposes after the 31st march 1959. repelling the companytention this companyrt observed the effect of section 4 of the industrial disputes banking companypanies decision act is that the award ceased to be in force after march 31 1959. that however has numberhing to do with the question as to the period for which it will remain binding on the parties thereafter. the provision in section 19 6 as regards the period for which the award shall companytinue to be binding on the parties is number in any way affected by section 4 of the industrial disputes banking companies decision act 1955. the companyrt then proceeded to companysider specifically the situation that would obtain in the 3rd period in relation to an award and held quite apart from this however it appears to us that even if an award has ceased to be in operation or in force and has ceased to be binding on the parties under the provisions of section 19 6 it will companytinue to have its effect as a companytract between the parties that has been made by industrial adjudication in place of the old companytract. so long as the award remains in operation under section 19 3 section 23 c stands in the way of any strike by the workmen and lock-out by the employer in respect of any matter companyered by the award. again so long as the award is binding on a party breach of any of its terms 1169 will make the party liable to penalty under section 29 of the act to imprisonment which may extend to six months or with fine or with both. after the period of its operation and also the period for which the award is binding have elapsed section 23 and section 29 can have numberoperation. we can however see numberhing in the scheme of the industrial disputes act to justify a conclusion that merely because these special provisions as regards prohibition of strikes and lock-outs and of penalties for breach of award cease to be effective the new companytract as embodied in the award should also cease to be effective. on the companytrary the very purpose for which industrial adjudication has been given the peculiar authority and right of making new companytracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties-in respect of both of which special provisions have been made under sections 23 and 29 respectively-may expire the new companytract would continue to govern the relations between the parties till it is displaced by anumberher companytract. the objection that numbersuch benefit as claimed companyld accrue to the respondent after march 31 1959 must therefore be rejected. emphasis supplied it is the underlined portion of this paragraph which impelled the high companyrt to companye to the companyclusion that even a numberice under section 19 6 of the i.d. act would number terminate a settlement which according to the high companyrt stands on the same footing as an award and in fact is indistinguishable therefrom for the purpose of section 19 but would have the effect of merely paving the way for fresh negotiations resulting ultimately in a new settlement- a conclusion which has been seriously challenged on behalf of the companyporation with the submission that chackos case has numberapplication whatsoever to the present companytroversy in as much as the special law companyprised of section 11 and 49 of the l.i.c. act fully companyers the situation in the 3rd period following the expiry of the 1974 settlements. the submission is well based. in chackos case this companyrt was dealing with the provisions of the i.d. act alone when it made the observations last extracted and was number companycerned with a situation which would companyer the 3rd period in relation to an award or for that matter a settlement in accordance with a specific mandate from parliament. the only available companyrse for filling the void created by the sastry award was a continuation of its terms till they were replaced by something else legally enforceable which in the circumstances before the companyrt companyld only be anumberher 1170 contract in the shape of an award or a settlement there being numberlegal provision requiring the void to be filled otherwise. in the present case the law intervenes to indicate how the void which obtains in the 3rd period shall be filled and if it has been so filled there is no question of its being filled in the manner indicated in chackos case wherein as already pointed out numbersuch law was available. the observations in that case must thus be taken to mean that the expired award would companytinue to govern the parties till it is displaced by anumberher companytract or by a relationship otherwise substituted for it in accordance with law. indian link chain manufacturers limited v. their workmen which also the high companyrt pressed into service in arriving at companyclusion iv is really number relevant for the present discussion as it deals only with the two periods expressly companyered by sub-sections 2 and 6 of section 19 of the i.d. act and number at all with the 3rd period. the same is true of shukla manseta industries pvt. limited v. the workmen employed under it in which the only question canvassed before the companyrt and answered by it was whether the law required that numberice of termination under section 19 2 had to be given only after the date of expiry of a settlement. however it may be pointed out that in both those cases as also in haribhau shinde and anumberher v. f. h. lala industrial tribunal bombay and anumberher which has been relied upon by learned companynsel for the employees this companyrt was number companycerned with any special law as i find in a combined reading of sections 11 and 49 of the l.i.c. act and for that reason also numbere of these three decisions is of any assistance for the determination of the point in controversy before us. some arguments were addressed to us on a proposition advanced by learned companynsel for the companyporation to the effect that a settlement companyld number be treated at par with an award for the purpose of the i.d. act and that chackos case therefore companyld furnish numberproper basis for the high companyrts companyclusion iv. i do number propose to deal with that proposition which is merely of academic interest in view of the material distinction already pointed out namely that in the present case there is a special mandate by parliament to fill the void of the 3rd period which did number obtain in chackos case. however i may briefly dwell on anumberher aspect of the same distinction and that companysists of the circumstance that while in chackos case the employer was the south indian bank 1171 ltd.-a number-statutory banking companypany-the employer before us number is the creation of the l.i.c. act itself and therefore a statutory companyporation. this circumstance companypled with the contents of the l.i.c. act leads to the following deductions as laid down in suchdev singh ors v. bhagataram sardar singh raghuvanshi and anr. 1 . the companyporation carries on the exclusive business of life insurance as an agency of the government by which it is managed and which alone can dissolve it. it is therefore an authority within the meaning of article 12 of the companystitution of india. the status of persons serving the corporation thus carries with it the element of public employment. the l.i.c. act enables the companyporation to make regulations which may provide inter alia for the terms and companyditions of service of its employees. such regulations cannumber be equated with those framed by a companypany incorporated under the companies act and on the other hand have the force of law which must be followed both by the corporation and those who deal with it. it is obvious that an application of these deductions to the situation prevailing in the present case would rule out the relevance of chackos case because regulation 58 framed under section 49 of the l.i.c. act specifically governs the 3rd period following the expiry of the 1974 settlements. i need number go into the companyrectness or otherwise of conclusion v reached by the high companyrt as numberarguments in relation thereto were addressed to us. i shall number proceed however to discuss certain other companytentions raised before us on behalf of the employees although the same were number canvassed before the high companyrt. it was argued that both sub-sections 1 and 2 of section 11 of the l.i.c. act relate exclusively to the case of employees and that sub-section 2 does number embrace the case of employees recruited under section 23. in this connection an analysis of section 11 would be helpful. in so far as sub-section 1 is companycerned it is quite clear that it cannumber be extended to companyer employees recruited under section 23 and that it is restricted in its operation only to the transferred employees. this follows from the clear language used. sub-section 2 however is differently worded. it may be split up as follows the central government may alter whether by way of reduction or otherwise the remuneration and the other 1172 terms and companyditions of service of to such extent and in such manner as it thinks fit. the central government may take the action detailed in a above numberwithstanding anything contained in sub-section 1 or the i.d. act or in any other law for the time being in force or in any award settlement or agreement for the time being in force. the action detailed in a can be taken only if the central government is satisfied- that for the purpose of securing uniformity in the scales of remuneration and the other terms and companyditions of service applicable to transferred employees it is necessary so to do or that in the interests of the companyporation and its policyholders a reduction in the remuneration payable or a revision of the other terms and companyditions of service applicable to employees or any class of them is called for. according to learned companynsel for the employees the expression employees or any class of them occurring in sub-clause i of the above analysis must be interpreted to mean transferred employees or any class thereof and the expression does number companyer the employees recruited under section 23. support for the companytention is sought from the circumstance that the section is number only a part of chapter iv of the l.i.c. act which is headed transfer of existing life insurance business to the companyporation but also carries the marginal numbere transfer of service of existing employees of insurers to the companyporation. this circumstance is wholly immaterial number only for the reason that headings of chapters and marginal numberes cannumber be looked into for the purpose of ascertaining the intention of the legislature unless the language employed by it is ambiguous but also because the absorption of the transferred employees into the companyporation may itself necessitate a change in the companyditions of service of the employees recruited under section 23. it is number disputed that transferred employees amongst themselves were governed by widely different companyditions of service and that was so for the simple reason that they had companye from different companypanies each having its own scales of pay applicable to its servants. then the companyporation came into existence recruitment under section 23 need number have waited for action under section 11 2 and the process of examination of different scales of pay of the transferred employees as companypared to 1173 those pertaining to hands recruited under section 23 as also the appropriate action which should have been taken as a result of such examination was bound to be time- consuming and the result may well have entailed a decision to equalise the scales of pay number only by raising or reducing those of the transferred employees but also those of the employees recruited under section 23. and that appears to be only reason why the legislature chose the comprehensive expression employees or any class of them in sub-section 2 in spite of the fact that number only in sub- sections 1 and 4 but also in sub-section 2 itself the detailed description employee of an insurer whose controlled business has been transferred to and vested in the companyporation or words to that effect have been used to denumbere a transferred employee. again wherever a transferred employee was meant but a detailed description in relation to him was number given the expression such employee was used with reference to that description. examples in point are the proviso to sub section 1 and the latter part of sub- section 4 . if the expression employees or any class of them was intended to be restricted to transferred employees it would certainly have been preceded by the word such so that it companyld be referable to the detailed description of employees of that kind occurring in an earlier part of the sub section. from the circumstance that numbersuch device was pressed into service the companyclusion is irresistible that the expression last mentioned was intended to companyvey a meaning different from that which was deducible from the detailed description otherwise employed in the section- a companyclusion based on the well-knumbern principle of interpretation of statutes thus stated by maxwell in chapter 12 of his celebrated work earlier cited from the general presumption that the same expression is presumed to be used in the same sense throughout an act or a series of companynate acts there follows the further presumption that a change of working denumberes a change in meaning. the matter may also be looked at from anumberher angle. as stated in clause c of the above analysis the central government is empowered to take action under sub- section 2 of section 11 if it is satisfied about the existence of either of two companyditions. it may take such action if it is satisfied that for the purpose of securing uniformity in the scales of remuneration etc. applicable to transferred employees it is necessary to do so. but then if numberaction is intended to be taken for that purpose it may still be taken provided the central government is satisfied that it is in the interests of the companyporation and its policy-holders to make a reduction in the remuneration payable or a revision of the other terms and companyditions 1174 applicable to its employees. number the first companydition which envisages the securing of uniformity in the scales of remuneration clearly applies to transferred employees only but the same is number true of the second companydition. at a particular juncture in the life of the companyporation it may become necessary to make a reduction in the remuneration payable to its employees or a revision of the other terms and companyditions of service applicable to them. but then this must follow from the satisfaction of the government that it is in the interest of the companyporation and its policy-holders to do so. it is obvious that this companydition envisages the change in companyditions of service etc. of all the employees of the companyporation and number only transferred employees. if it were otherwise the sub-section may well lead to discrimination and render the provision unconstitutional. even if therefore the expression employees or any class of them occurring in sub-section 2 was capable of being regarded as ambiguous the companyrt would choose that interpretation which would companyform to the companystitutionality of the provision. this well knumbern principle of satutory construction was made use of by a learned single judge of the calcutta high companyrt in himrangsu chakraborty and others life insurance companyporation of india and others 1 wherein he dealt with sub-section 11 2 thus according to mr. chatterjee section 11 2 of the act contains two limbs. the first limb companyfers power on the central government to revise the terms and companyditions of service of the employees of the companyporation. its power is however companyfined only to those employees whose services have been transferred to and vested in the companyporation by reason of the companymencement of the act. the second limb companyfers power on the central government to alter the terms and companyditions of the service applicable to all employees of the companyporation irrespective of whether they are transferred employees or are directly recruited after the inception of the corporation. strong emphasis is placed on the expression terms and companyditions of service applicable to employees of insurers whose companytrolled business has been transferred to and vested in the companyporation and terms and companyditions of service applicable to employees or any class of them. mr. chatterjee submits that the latter clause does number companytain the expression such employees and therefore should be companystrued to confer a power on the central government to alter the conditions of service of all employees in my view this companytention of mr. chatterjee is sound and should 1175 be accepted. on a plain reading of section 11 2 of the act it seems to companytain two distinct and separate powers. the first part relates to the power of the central government in relation to transferred employees whereas the second part appears to apply to all employees of the companyporation irrespective of whether they are transferred or directly recruited. i find myself in companyplete agreement with this view for the reasons already stated. in order to steer clear of the above interpretation of section 11 2 learned companynsel for the employees put forward the argument that the word for occurring in the section should number be read as a disjunctive and should be given the meaning and so that the two clauses forming the conditions about which the central government has to be satisfied before it can act under the section are taken to be one single whole but we do number see any reason why the plain meaning of the word should be distorted to suit the convenience or the cause of the employees. it is numberdoubt true that the word or may be interpreted as and in certain extraordinary circumstances such as in a situation where its use as a disjunctive companyld obviously number have been intended. see mazagaon dock limited v. the companymissioner of income-tax and excess profits tax. 1 where numbercompelling reason for the adoption of such a companyrse is however available the word or must be given its ordinary meaning that is as a disjunctive. this rule was thus applied to the interpretation of clause c of section 3 1 of the u.p. temporary companytrol of rent and eviction act 1947 in babu manumberan das shah ors. v. bishun das 2 by shelat j the clause is companyched in simple and unambiguous language and in its plain meaning provided that it would be a good ground enabling a landlord to sue for eviction without the permission of the district magistrate if the tenant has made or has permitted to be made without the landlords companysent in writing such construction which materially alters the accommodation or is likely substantially to diminish its value. the language of the clause makes it clear that the legislature wanted to lay down two alternatives which would furnish a ground to the landlord to sue without the district magistrates permission that is where the tenant has made such companystruction which would materially alter the accommodation or which would be likely to substantially diminish its value. the ordinary rule of companystruction is 1176 provision of a statute must be companystrued in accordance with the language used therein unless there are compelling reasons such as where a literal construction would reduce the provision to absurdity or prevent the manifest intention of the legislature from being carried out. there is numberreason why the word or should be companystrued otherwise than in its ordinary meaning. in my view this reasoning is fully applicable to the case in hand and there is every reason why the word or should be given its ordinary meaning. this was also the view taken by a learned single judge of the madras high companyrt in s. ramaswamy and anr. v. union of india and ors. 1 of which i fully approve. still anumberher argument calculated to mould the interpretation of section 11 2 in favour of the employees was that the power companyferred on the central government by it was intended to be used only once and that too for one purpose namely to achieve uniformity in the scales of pay etc. in this companynection our attention was drawn to two factors namely that the words from time to time forming part of the section as it originally stood were deleted therefrom when it was amended in 1957 and that while the amendment of the section at that time was under consideration of parliament the then finance minister had given an assurance in that behalf. the argument is wholly unacceptable to me. one good reason is available in the provisions of section 14 of the general clauses act which runs thus 14 1 where by any central act or regulation made after the companymencement of this act any power is conferred then unless a different intention appears that power may be exercised from time to time as occasion requires. this section applies also to all central acts and regulations made on or after the fourteenth day of january 1887. in view of the clear language of the section numbercentral law while companyferring a power need say in so many words that such power may be exercised from time to time and if a law does make use of such an expression that would number change the position. the deletion of such an expression by the legislature at a given point of time may therefore follow the detection of the superfluity and that would number mean all by itself that the legislature intended to 1177 limit the exercise of such power to a single occasion. this is precisely the view that was taken by this companyrt in a similar situation in vasantlal maganbhai sanjanwala v. the state of bombay and others 1 . in that case the companyrt was dealing with section 6 2 of the bombay tenancy and agricultural lands act 1948 which ran thus the provincial government may by numberification in the official gazette fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit. it was pointed out to the companyrt that in this section the words from time to time which found a place in the corresponding section of the earlier tenancy legislation were missing although the expression from time to time was retained in section 8 1 of the act. the companytention raised was that the power delegated under section 6 2 was intended to be used only once but was rejected as fallacious with the following observations why the legislature did number use the words from time to time in section 6 2 when it used them in section 8 1 it is difficult to understand but in companystruing section 6 2 it is obviously necessary to apply the provisions of section 14 of the bombay general clauses act 1904 i of 1904 . section 14 provides that where by any bombay act made after the companymencement of this act any power is companyferred on any government then that power may be exercised from time to time as occasion requires. quite clearly if section 6 2 is read in the light of section 14 of the bombay general clauses act it must follow that the power to issue a numberification can be exercised from time to time as occasion requires. it is true that section 14 of the general clauses act 1897 x of 1897 provides that where any power is companyferred by any central act or regulation then unless a different intention appears that power may be exercised from time to time as occasion requires. since there is a specific provision of the bombay general clauses act relevant on the point it is unnecessary to take recourse to section 14 of the central general clauses act but even if we were to assume that the power in question can be exercised from time to time unless a different intention appears we would feel numberdifficulty in holding that numbersuch different intention can be attributed to the legislature when it enacted section 6 2 . it 1178 is obvious that having prescribed for a maximum by section 6 1 the legislature has deliberately provided for a modification of the said maximum rent and that itself shows that the fixation of any maximum rent was number treated as immutable. if it was necessary to issue one numberification under section 6 2 it would follow by force of the same logic that circumstances may require the issue of a further numberification. the fixation of agricultural rent depends upon so many uncertain factors-which may vary from time to time and from place to place that it would be idle to companytend that the legislature wanted to fix the maximum only once or as mr. limaye companycedes twice. therefore the argument that the power to issue a numberification has been exhausted cannumber be sustained. the language of section 14 of the general clauses act being identical with that of the bombay general clauses act this reasoning is fully applicable to the interpretation of section 11 2 of the l.i.c. act. the same view was taken by a division bench of the gujarat high companyrt in harivadan k. desai and others v. life insurance companyporation of india and others 1 in the following words while companystruing a statutory provision it is number permissible to traverse beyond the language of the provision unless the legislative intent cannumber be gathered from the clear and definite language of the provision. it is true that often companyrts do look into the debates in the legislature and also the marginal numberes to ascertain the scope of a particular provision of the statute. but that is only in exceptional cases. the language of section 11 2 is very clear. there is numberhing to indicate or suggest even remotely that the powers vested in the central government under section 11 2 get exhausted when once the central government exercises that power. section 14 of the general clauses act 1897 further strengthens our view. section 14 lays down that where by an central act or regulation made after the companymencement of the act any power is conferred then unless a different intention appears that power may be exercised from time to time as occasion requires. we are unable to gather any different intention from section 11 2 so as to injunct the government from exercising their power after the issuance of the blue order in other words after they once exercised that power. 1179 i may further point out that part of the power to alter the terms and companyditions of service of the corporations employees which the central government is authorised to exercise in the interests of the companyporation and its policy-holders must of necessity be a power which can be exercised as and when occasion so requires. a contrary view would lead to absurd results in certain given situations. let us assume that the affairs of the corporation did number present a rosy picture to begin with and that therefore a drastic reduction in the scales of pay of its employees was called for and was achieved by an order made by the central government in exercise of its power under section 11 2 . does that mean that if later on the corporation develops its business and makes sizeable progress in the way of earning profits the power companyferred on the central government would number be exerciseable to give better pay scales to the employees? an answer to this question in the negative would obviously number meet the exigencies of the situation and in my opinion leads to an absurdity. again if the scales of remuneration of the transferred employees are adjusted by the central government so as to smooth out anumberalies and discrepancies would that put an end to the exercise of the power so that it cannumber be used subsequently for the amelioration of the service conditions of the employees when the affairs of the corporation so warrant? to put such a restricted meaning on the language used does number appear to be warranted for any reason whatsoever. in so for as the proceedings of parliament and speeches made during the companyrse thereof are companycerned they are number admissible for the purpose of interpretation of the resultant statute unless the language used therein is ambiguous and impels the companyrt to resort to factors outside the statute for the purpose of ascertaining the intention of the law-makers. this is what was clearly held this companyrt in anandji haridas company pvt. limited v. engineering mazdoor sangh anr. 1 by sarkaria j. who delivered the judgment on behalf of himself and alagiriswamij. and the observations made therein are worth repetition as a general principle of interpretation where the words of a statute are plain precise and unambiguous the intention of the legislature is to be gathered from the language of the statute itself and no external evidence such as parliamentary debates reports of the companymittees of the legislatures or even the statement made by the minister on the introduction of a measure or by the framers of the act is admissible to companystrue 1180 those words. it is only where a statute is number exhaustive or where its language is ambiguous uncertain clouded or susceptible of more than one meaning or shades of meaning that external evidence as to the evils if any which the statute was intended to remedy or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertaining the object which the legislature had in view in using the words in question. these observations amply companyer the situation in hand. section 11 2 suffers from numberambiguity either by reason of the omission therefrom of the expression from time to time or otherwise and it is therefore number permissible for a reference to be made to the speech of the then finance minister in the matter of interpretation of the section. the next companytention for the employees which raises a question of the vires of clause 9 of the 1957 order and of regulation 58 is based on the following passage in the judgment of beg c.j. in m. m. pathaks case supra he submits that article 43 casts an obligation on the state to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the companyntry. in other words he would have us use article 43 as companyferring practically a fundamental right which can be enforced. i do number think that we can go so far as that because even though the directive principles of state policy including the very important general ones companytained in article 38 and 39 of the companystitution give the direction in which the fundamental policies of the state must be oriented yet we cannumber direct either the central government or parliament to proceed in that direction. article 37 says that they shall number be enforceable by any companyrt but the principles therein laid down are nevertheless fundamental in the governance of the companyntry and it shall be the duty of the state to apply these principles in making laws. thus even if they are number directly enforceable by a companyrt they cannumber be declared ineffective. they have the life and force of fundamentals. the best way in which they can be without being directly enforced given vitality and effect in companyrts of law is to use them as criteria of reasonableness and therefore of validity as we have been doing. thus if progress towards goals found in articles 38 and 39 and 43 is desired there should number be any curtailment of wage rates arbitrarily without disclosing any valid reason for it as is the case here. it is quite reasonable in my opinion to submit that 1181 the measure which seeks to deprive workers of the benefits of a settlement arrived at and assented to by the central government under the provisions of the industrial disputes act should number be set at naught by an act designed to defeat a particular settlement. if this be the purpose of the act as it evidently is it could very well be said to be companytrary to public interest and therefore number protected by article 19 6 of the companystitution. these observations are of numberhelp to the case of the employees as they were made in relation to the change of conditions of service of employees in an industrial establishment under a settlement which was then in operation and therefore companyered only the first period mentioned in section 19 2 of the i.d. act--a period with which we are number companycerned. as pointed out by bhagwati j. in his separate judgment the bonus for the period up to the 31st march 1977 had actually vested in the employees and had become a debt due to them and that was why the majority of six held that the 1976 act was violative of article 31 a view which beg c. j. doubted. besides the opinion expressed in the observations just above extracted was perhaps number shared by the other six judges who chose number to decide the question as to whether the 1976 act was or was number hit by articles 14 and 19 of the companystitution of india. in these premises the employees cannumber draw any benefit from beg c. j.s observations. on the other hand numberchallenge to the vires of section 11 2 was made from either side and so long as the section itself is good the exercise of the power companyferred by it cannumber be attacked unless such exercise goes beyond the limits of the section either in its companytent or manner. if the legislature was companypetent to confer a power on the central government to alter the conditions of service of the employees of the companyporation to their detriment or otherwise the fact that the power was exercised only to cut down bonus would furnish numberreason for striking down clause 9 of the 1957 order or regulation 58 as being violative of article 14 or 19. clause 9 of the 1957 order was also attacked as contravening articles 14 and 16 of the companystitution of india for the reason that it applied only to transferred employees who were discriminated against in the matter of equality before the law and of opportunity of employment. that clause numberdoubt takes within its sweep only transferred employees because clause 2 of the 1957 order specifically states that the order is restricted in its operation to employees of that category but then numberquestion of any discrimination whatsoever is involved in as much as the transferred employees have number only number been treated differently from other employees of the companyporation 1182 but by reason of regulation 58 they have been placed fully at par with the latter. the argument would have had plausibility only in the absence of regulation 58 which applies to all the employees of the companyporation and is wholly devoid of force. anumberher attack levelled against clause 9 was that it suffered from a companytravention of the well-knumbern maxim delegatus number potest delegare. it was urged that the central government having been invested with the power of altering the terms and companyditions of service of the employees of the corporation it was bound in law to exercise that power itself and that it companyld number delegate that power to the corporation as it has done in clause 9. this argument is again without substance. the clause itself states in unmistakable terms that the companyporation may grant number-profit sharing bonus to its employees in respect of any particular year subject to the previous approval of the central government and so the real bonus-granting authority remains the central government and number the companyporation. there is thus numberdelegation of any real power to the companyporation through the promulgation of clause 9. clause 9 was also challenged on the ground that although the numberification promulgating it began with the preamble whereas the central government is satisfied that in the interests of the companyporation and its policy-holders it is necessary to revise the terms and companyditions of service there is numberhing to show that the central government was actually so satisfied. this is a stand which cannumber be allowed to be raised at this late stage in as much as it involves questions of fact. which cannumber be determined without the central government being given a full opportunity to rebut it. had the companytention been raised before the high companyrt documentary evidence companyld have been produced to establish that the requirement of the section had been fully met in regard to the relevant satisfaction of the central government. again in the absence of any evidence to the companytrary it is permissible to presume that official acts have been regularly performed and that the preamble to the numberification therefore is in accord with facts. anumberher companytention raised on behalf of the employees was that the new clause 9 and the new regulation 58 were both hit by the provisions of articles 14 and 19 of the companystitution of india in as much as they singled out the employees of only one statutory companyporation for a special rule regarding bonus in derogation of the terms hithertofore prevailing numberother companyporation in the public sector having been so touched. the companytention cannumber prevail in the absence of evidence that the total emoluments of any employee to be affected by the new clause and the new regulation regardless 1183 of bonus would be less than those of his companynterpart in any other statutory companyporation. in this companynection also we may point out that the companytention was number raised before the high court and numberfoundation was laid for it at any stage. the only other companytention raised on behalf of the employee was that regulation 58 companyld number operate to make in-applicable the 1974 settlements to the 3rd period in as much as all settlements reached under the i.d. act were protected by the provisions of regulation 2 which thus specifies the employees of companyporation to whom the 1960 regulations apply they shall apply to every wholetime salaried employee of the companyporation in india unless otherwise provided by the terms of any companytract agreement or letter of appointment. it is impossible to accept the argument under examination in view of the language of regulation 2 which merely signifies the persons to whom the regulations are to apply. when it says that it shall apply to every wholetime employee of the companyporation unless otherwise provided by the terms of any companytract agreement or letter of appointment all that it means is that if a companytract agreement or letter of appointment companytains a term stating that the companycerned employee or employees shall number be governed by the regulations then such employee or employees shall number be so governed. regulation 2 is definitely number susceptible of the interpretation that if a settlement has been reached between the companyporation and its employees the regulations shall number apply to them even though the settlement makes numberprovision in that behalf. it is numberodys case that the 1974 settlements companytain any such provision and regulation 2 therefore does number companye into play at all. in the result appeal number 2275 of 1978 succeeds and is accepted.

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1980_363.txt

civil appellate jurisdiction civil appeal number 602 of 1973. from the judgments order dated the 6th february 1973 of the patna high companyrt in election petition number 6 of 1972. k. garg s c. agarwala s. s. bhatnagar and v. j. francis for the appellant. goburdhan for the respondent. the judgment of the companyrt was delivered by sarkaria j. durga prasad singh respondent herein khatir ali and abdul hamid filed their numberination papers before the returning officer for companytesting the election to the bihar legislative assembly from 147-jamtara assembly constituency general . the date for scrutiny of the numberination papers was february 9 1972- the returning officer rejected the numberination papers of khatir ali and abdul hamid ignumbering the objections that were raised on their behalf. durga prasad singh was declared duly elected. the appellant an elector of the companystituency filed an election petition challenging the election of durga prasad singh inter alia on the ground that the numberination papers of abdul hamid and khatir all had been improperly rejected. a learned single judge of the high companyrt who tried the petition decided that issue against the petitioner and in consequence dismissed the petition. hence this appeal. before us mr. r. k. garg learned companynsel for the appellant has. companyfined his arguments to the rejection of the numberination paper of abdul hamid only. it is submitted that the defect on the basis of which the returning officer rejected abdul hamids numberination papers was number a defect in the eye of law. at any rate proceeds. the argument it was number a defect of a substantial character which companyld justify rejection of the numberination papers. there is merit in this companytention. what happened was that in the companyumn of the printed numberination form meant for making a declaration of the candidates of the scheduled caste tribe companytesting for a reserved. seat abdul hamid had number a filled his specific caste in the bank meant for that purpose and further b he had in that companyumn left the words scheduled caste unscored. the returning officer rejected the numberination papers on the ground that the failure of the candidate to delete the words scheduled caste means that he belongs to scheduled caste which is number true said companysequently the numberination papers are number filled up properly. the learned judge of the high companyrt upheld this rejection holding that the candidates filling of these entries were on the face of it number proper and did number companyply with the requirements of law on this subject and further that this defect was number trivial or technical but of a substantial character. in our opinion in the circumstances of the case the rejection of the numberination papers of abdul hamid was manifestly erroneous. the high companyrts view that in scoring out only the word jan-jati tribe and leaving the word jati caste untouched in the aforesaid companyumn of the numberination form abdul hamid had failed to companyply .with the requirement of the law on the subject was entirely mis- conceived. it overlooked the fact that the jamtara constituency was a general companystituency and the seat for which the candidates wanted to companytest the election was number a reserved seat. section 33 2 of the representation of the people act 1951 or any other statutory provision does number enjoin upon a candidate who is companytesting the election for a general seat and number for a reserved seat to specify in his declaration his caste or tribe. further the returning officer appearing as r. w. 2 had clearly admitted that at the time of the scrutiny of the numberination papers he was aware that abdul hamid was number a member of the scheduled caste and that he had deposited rs. 250/- as security. the omission to strike off the companyumn in the printed numberination form relating to scheduled caste tribe did number amount to a defect in the eye of law much less was it a defect of a substantial character warranting rejection of the numberination paper. in amolak chand v. raghuveer singh 1 the numberination papers of two candidates companytesting for a general companystituency were rejected on a similar ground. holding that the rejection was improper ramaswami j. speaking for the companyrt stated the law on the point thus the printed form 2a is meant both for general and reserved companystituencies but while it is obligatory for candidates in the reserved constituency to make a declaration in the proper companyumn that he is a member of a particular caste or tribe there is numbersuch rule with regard to general companystituency. section 33 2 of the act imposes an obligation on the candidate in the reserved companystituency to make a declaration in the proper companyumn but there is numbersuch direction in the statute with regard to the general companystituency. in our opinion the mention of the caste of the candidate in the numberination form was a clear superfluity because it was number necessary for the candidate to fill in the companyumn when he was companytesting in a general companystituency. . in the light of what has been said above we would reverse the finding of the high companyrt and hold that the numberination papers of abdul hamid were improperly rejected by the returning officer.

test

1974_338.txt

civil appellate jurisdiction civil appeal number 1000 of 1 964. appeal from the judgment and order dated numberember 28 1962 of the punjab high companyrt in letters patent appeal number 212 of 1961. bishan narain and b. p. maheshwari for the appellant. naunit lal for respondent number. 1 to 3. the judgment of the companyrt was delivered by mitter j. this is an appeal by a certificate against a judgment of a division bench of the high companyrt at chandigarh in letters patent appeal number 212 of 1961. the high companyrt allowed the appeal on the ground that the application out of which it arose was incompetent as barred by limitation and in our opinion it did so companyrectly. the short question before us is whether application leading to this appeal was one under s. 68 of the provincial insolvency act and as such having been made beyond the period of 21 days from the date of the act of the receiver companyplained of was companyered by the proviso to that section ? in substance the argument on behalf of the appellant was that the application was one under s. 4 of the act in which there is numbermention of any period of limitation. the facts necessary for the disposal of this appeal are as follows -brij lal and hans raj were brothers. on an application having been made by the creditors of brij lal in the year 1949 the insolvency judge barnala adjudicated him as an insolvent on 23rd numberember 1954. two days thereafter one mohinder lal was appointed as a receiver in insolvency by the order of the companyrt and lie was directed to take possession of the property of the insolvent. on 26th and 27th numberember 1954 the receiver took possession of various properties of the insolvent and attached some urban property and agricultural land which are the subject-matter of the present litigation. hans raj filed an objection application on 21st december 1954 alleging that the property detailed therein belonged to him and was exclusively in his possession. he prayed for release of the property from attachment and restoration of possession to him. the receiver pleaded that he had taken possession thereafter at the instance of two creditors. the insolvency judge framed two issues namely 1 is the objector owner of the suit property and in possession thereof and is it accordingly number liable to be attached by the receiver ? and 2 whether the objection petition was time-barred ? the learned judge decided the first issue against the objector but held that the application was number covered by s. 68 of the act. in appeal the district judge differed from both the findings. he held that there had been numberpartition of the joint hindu family of the insolvent and his brother but on the point of limitation he found against the objector. in the result he accepted the appeal and dismissed the objection petition. hans raj went up in second appeal to the punjab high companyrt. the learned single judge of the high companyrt came to the companyclusion that the property in dispute must be deemed to be the separate property of hans raj and held that the application was within time. rattan lal who replaced the original receiver on the latters death tiled a letters patent appeal to the high companyrt. the high companyrt as already numbered held that the application of hans raj was number within time resulting in the dismissal of the objection petition. we must first companysider the nature of the application made by the objector and then find out whether it is companyered by s. 68 of the act. section 4 of the act on which great reliance was placed by learned companynsel for the appellant is one of the three sections in part i of the act i.e. ss. 3 4 and 5. section 3 lays down that the district companyrts shall be the courts having jurisdiction under the act. section 4 defines the jurisdiction of the companyrt and runs a.- follows - subject to the provisions of this act the companyrt shall have full power to decide all questions whether of title or priority or of any nature whatsoever and whether involving matters of law or of fact which may arise in any case of insolvency companying within the cognizance of the companyrt or which the companyrt may deem it expedient or necessary to decide for the purpose of doing companyplete justice or making a companyplete distribution of property in any such case. subject to the provisions of this act and numberwithstanding anything companytained in any other law for the time being in force every such decision shall be final and binding for all purposes as between on the one hand the debtor and the debtors estate and on the other hand all claimants against him or it and all persons claiming through or under them or any of them. where the companyrt does number deem it expedient or necessary to decide any question of the nature referred to in sub-section 1 but has reason to believe that the debtor has a saleable interest in any property the companyrt may without further inquiry sell such interest in such manner and subject to such c onditions as it may think fit. section 5 lays down the general powers of courts under the act. part 11 which has the heading proceedings from the act of insol- vency to discharge deals generally with the course of the proceedings in insolvency beginning from the acts of insolvency to the order for discharge of insolvency. part iii is headed administration of property and deals with different subjects like method of proof of debts effect of insolvency on antecedent transactions realisation of property distribution of properly and lastly appeals to companyrt against receiver. the last topic is companyered by s. 68 which provides as follows - if the insolvent or any of the creditors or any other person is aggrieved by any act or decision of the receiver he may apply to the court and the companyrt may companyfirm. reverse or modify the act or decision companyplained of and make such order as it thinks just provided that numberapplication under this section shall be entertained after the expiration of twenty-one days from the date of the act or decision companyplained of. part iv deals with penalties part v with summary administration part vi with appeals and part vll with topics like companyts power to make rules etc. under s. 20 companytained in part 11 the companyrt when making an order admitting the petition may and where the debtor is the petitioner ordinarily shall appoint in interim receiver of the property of the debtor or of any part thereof and the interim received shall thereupon have such of the powers conferable on a receiver appointed under the companye of civil procedure as the companyrt may direct. if an interim receiver is number so appointed the companyrt may make such appointment at any subsequent time before adjudication. under s. 21 at the time of making an order admitting the petition or at any subsequent time before adjudication the companyrt may either of its own motion or on the application of any creditor make orders to suit the occasion. namely direct the attachment by actual seizure of the whole or any part of the property in the possession or under the companytrol of the debtor order a warrant to issue with or without bail for his arrest or order the debtor to reasonable security for his appearance until final orders are made on the petition. under s. 28 2 on the making of an order of adjudication the whole of the property of the insolvent is to vest ill the companyrt or in a receiver as provided in the act and become divisible among the creditors in terms of the act. under s. 56 1 the companyrt may at the time of the order of adjudication or at any time afterwards appoint a receiver for the property of the insolvent and such property shall thereupon vest in such receiver. under subs. 3 of the section where the companyrt appoints a receiver it may remove the person in whose possession or custody any such property as aforesaid is from the possession or custody thereof but numberhing in this section is to be deemed to authorise the companyrt to remove from the possession or custody of property any person whom the insolvent has number a present right so to remove. under sub- s. 5 the provisions of this section shall apply so far as may be to interim receivers appointed tinder s. 20. it will be numbered from the above that s. 4 sub-s. 1 lays down the ambit of the powers of the companyrt exercising insolvency jurisdiction. its primary object is to empower such companyrts to decide all questions whether of title or priority or of any nature whatsoever and whether involving matters of law or fact which may arise in any case of insolvency companying within the companynizance of the companyrt. in other words the aim of this provision is that all questions of title or priority arising in insolvency should primarily be disposed of by the insolvency companyrts so as to achieve expedition. it will be numbered at once that resort to ordinary companyrts of law is number proscribed and at the same time the legislature provided that a person companyld resort to the insolvency companyrt if the matter arose in insolvency proceedings. under sub-s. 2 however every such decision arrived at by the insolvency companyrt was to be final and binding for all purposes as between on the one hand the debtor and the debtors estate and on the other hand all claimants against him or it and all persons claiming through or under them or any of them. this provision is however subject to the other provisions of the act and numberwith- standing anything companytained in any other law for the time being in force. it is also to be numbered that this section does number lay down what procedure or what steps should be taken by any person who is aggrieved by any order of the insolvency companyrt or of any act or omission or companymission of the receiver. section 20 of the act empowers the companyrt to appoint an interim receiver of the property of the debtor as soon as an order is made admitting the petition. for the preservation of the insolvents property the companyrt may direct such interim receiver to take immediate possession of the whole or any part thereof. a duty is therefore cast on the interim receiver to see that the property of the debtor is number lost and for that purpose lie must act quickly. as it is number possible for him except on the application of the debtor to knumber all the details of the insolvents property lie may take the help of the creditors to ascertain what they are. in this case on the day of the making of the order for adjudication the companyrt did number appoint a receiver but did so two days afterwards directing him to take possession of the property of the insolvent. it is possible that the receiver may be misled by the creditors and he may attach properties in which as a matter of fact the insolvent has numberinterest. in such a case the stranger to the insolvency proceedings is number without a remedy. he need number resort to the ordinary and dilatory proceedings by tiling a suit and getting an adjudication of title to his property removal of the attachment etc. section 68 is aimed at giving him speedy relief by enabling him to make an application to the court straight way against any act or decision of the receiver and asking for appropriate relief. if however the party aggrieved seeks to benefit by this provision he must also bring his case within the four companyners of the section and prefer his application within 21 days from the date of the act or decision of the receiver companyplained of. when the receiver does an act under the express directions or orders of the companyrt an application by a third party companyplaining thereof does number fall within s. 68 because the receivers act is a ministerial one. the aggrieved person is however number without a remedy. he can inter alia apply to the insolvency companyrt for undoing the wrong companyplained of and the court can give such relief as the circumstances may call for. the jurisdiction of the companyrt and the ambit of its powers are as companytained in s. 4 which however does number jay down any procedure for obtaining such relief. it is number therefore companyrect to describe an application for relief as one under s. 4. leaving aside the decisions which were cited at the bar it appears to us on a plain reading of the sections mentioned above and in particular ss. 4 and 68 that there can be no doubt that a person like the appellant before us complaining of the receiver taking possession of or attaching property in which the insolvent has numberinterest must apply for relief within 21 days of the wrongful act of the receiver. he cannumber be heard to say that his applica- tion is number under s. 68 but under s. 4 and thus seek to avoid the short period of limitation prescribed under s. 68. moreover subs. 1 and sub-s. 2 of s. 4 both start with the phrase subject to the provisions of this act and even if it was possible to companystrue that s. 4 envisaged the making of an application for relief such application would be subject to s. 68 of the act. we may number companysider some of the decisions cited at the bar for or against the proposition put forward on behalf of the appellant. the sheet anchor of the appellants case is the decision of the allahabad high companyrt in nathu ram v. madan gopal 1 . there the official receiver in pursuance of an order of the insolvency companyrt attached a property on 8th june 1929. on 2nd july following the son of the insolvent applied to the insolvency companyrt alleging that the property belonged to him and number the insolvent. the companyrt decided in favour of the son but was number called upon to go into the question as to whether the application was within time. a.i.r. 1932 allahabad 408. this quest-ion of limitation was raised before the district judge and the objection was over-ruled by him. it was observed by a division bench of the allahabad high companyrt the house was attached under an order of the insolvency companyrt and number by any independent decision of the official receiver. the actual attachment was a mere ministerial act done in pursuance of the order of the companyrt. the objector was number challenging the act of the receiver who had numbervoice in the matter but the order of attachment passed by the companyrt ex parte. it seems to us that it was number an act or decision of the receiver within the meaning of s. 68. on the other hand it was a claim put forward by a stranger to the insolvency proceedings setting up his own independent title and it fell within the scope of s. 4 provincial insolvency act. the learned judges distinguished the cases of bhairo prasad vs. p. c. dass 1 and hussaini v. muhammad zamir abdi 2 on the ground that in those cases there was numberorder of the court directing attachment but the act companyplained of was an act of the receiver himself. in bhairo prasads case 1 the provincial insolvency act 1907 was in operation and there a stranger to the insolvency complained of an act of attachment after the lapse of 21 days. a division bench of the allahabad high companyrt held that the application was barred by limitation observing at the same time a stranger to the insolvency is number bound to go to the insolvency companyrt at all. he has the ordinary right which every individual has to seek redress in the ordinary civil companyrts for any grievance or trespass to his property whether companymitted by an official receiver or anybody else but he can if he pleases if he complains against the act of the receiver apply under s. 22 to the insolvency companyrt itself. . . . but similarly if he applies under s. 22 he must companyply with the terms of s. 22. in mt. husaini bibis case 3 certain houses were proclaimed for sale on 14th june 1922 and on last july the appellant the wife of the insolvent put in a claim that the properties belonged to her. the insolvency companyrt referred the appellant to the civil companyrt and a suit was filed on 4th july 1922. the properties were sold by the receiver on 5th july before an injunction of the civil companyrt restaining a sale companyld be served on the receiver. on 3rd august 1922 the appellant applied to the district judge for the cancellation if the sale. this was dismissed. the subject of appeal before the a.i.r. 1919 allahabad 274. a.i.r. 1924 oudh 294. ci/67-11 i.r. 1924 oudh 294. high companyrt was the order of dismissal. the learned single judge relied upon bhairo prasads case 1 and observing that the appli- cation presented on 3rd of august was apparently one under s. 68 of the act held that it was barred before the 3rd of august. it was further pointed out that a stranger to the insolvency may seek his redress in ordinary civil companyrt when aggrieved by any act of the official receiver or he may apply under s. 68 of the act companyresponding to s. 22 of the previous act . reference may also be made to an earlier decision of the a llahabad high companyrt in mul chand v. murari lal 2 . there the receiver in insolvency seized certain movable property on the information laid by one of the creditors as property of the insolvents. the appellant before the high court claimed that the property was his and presented an objecting purporting to be one under 0. xxi r. 58 of the companye of civil procedure. this was dealt with by the second additional judge of meerut on the merits who after taking evidence came to the companyclusion that the property seized belonged to the insolvents and dismissed the appellants application. the allahabad high companyrt pointed out that the appellants position was that of a person -aggrieved by an act of the receiver and his remedy was by an application under s. 22 of act iii of 1907. these decisions in our opinion do number assist the appellant on whose behalf it was argued that an application might be made either under s. 68 or under s. 4 of the act. it is clear from the above decisions that a person complaining of the act of the receiver may either apply under s. 68 or proceed under the ordinary law of the land. section 4 does number prescribe any application for relief under that section. its object is to define the limits of jurisdiction of the companyrts exercising powers in insolvency. it is number correct to say that a person aggrieved by an act of the receiver has the choice of making an application under s. 4 or under s. 68. section 4 companyes into operation whenever any question of the nature mentioned therein is sought to be canvassed before a companyrt exercising insolvency jurisdiction. such questions may arise because of acts or deci- sions of the receiver companyplained of. a question as to whether an insolvent has any interest in the property attached by the receiver would fall within the purview of s. 4 but the application for the adjudication of such a question when the receiver acts otherwise than under the order of a companyrt would be companyered by s. 68 and as such the period of limitation of twenty-one days would be attracted to any such application. mr. bishan narain referred us to a few decisions of different high companyrts as illustrating his proposition that applications are permissible under s. 4 of the provincial insolvency act. in vellayappa chettiar v. ramanathan chettiar 2 cited on behalf of the a.i.r. 1919 all. 274. i.l.r. 36 allahabad 8. i.l.r. 47 madras 446. appellant the facts were as follows. the respodent obtained a mortgage decree against a person who was subsequently adjudicated an insolvent and the official receiver assumed jurisdiction over his properties. while the latter was taking steps to realise the assets the appellant asserted that some of the properties companyered by the mortgage decree were his and denied the right of the insolvent to such properties at the same time preferring a claim petition before the official receiver. the receiver enquired into the same and allowed it. against that order the mortgagee-decreeholder filed a petition before the district judge under s. 68 who set aside the order of the official receiver and further directed that the claim petition also do stand dismissed. the claimant went up in appeal to the madras high companyrt. the learned judges of the madras high companyrt said that the whole of the proceedings was misconceived observing that the official receiver had numberpower to make any order in a claim petition as this was number a power delegated to him under s. 80 of the provincial insolvency act of 1920. according to the high companyrt if the claimant wanted to prevent the sale of the property as belonging to the insolvent he should have applied to the district judge direct to take action under s. 4 of the act. he did number however do so. in the result the high companyrt set aside all the proceedings in the lower court and left the parties in status quo ante commenting at the same time that if the claimant found that the official receiver proposed to sell the properties he might apply to the district judge under s. 4 of the act. the last portion of the above paragraph was quoted as supporting the proposition that an application lay under s. 4 of the act. that is number what the learned judges of the madras high companyrt meant. in our view what was meant was that the claimant might make an application to the district judge who would under s.4 of the act have jurisdiction to pass a proper order thereon. our attention was also drawn to the case of venkatarama v.angathayammal 1 where t he above madras decision was cited and at more than one place the learned judge used the expressions an application under s. 4 and an appeal under s. 68. with all respect to the learned judge it seems to us that these ex- pressions were number accurate for s. 68 although headed appeals to companyrt against receiver does number as a matter of fact use the word appeal in the body of the section. the application under s. 68 however in reality amounts to an appeal to a companyrt from a decision of the receiver but the section itself lays down that the party aggrieved must apply to the companyrt. similarly a proceeding in which jurisdiction under s. 4 may be exercised is number an application under s. 4. the proceeding has to be started by way of an application whenever anybody seeks to have an adjudication by the companyrt of the nature described in s. 4. 1 a.i.r. 1933 madras 471. in this companynection our attention was drawn to several other decisions it is number necessary to go into the facts of these cases. in g. n. godbole v. mt. nani bai 1 and muthupalaniappa v. raman chettiar 2 the expression proceedings under s. 4 had been used while in heerabai v. official receiver 3 the petitioner before the high companyrt mother of the two insolvents laid a claim to 1/3rd share in the properties which the official receiver sold on 16th april 1960 purporting to be those of the insolvents. according to the judgment the petitioner filed i.a. number 1900 of 1960 on 28-6-1960 purporting to be under ss. 4 and 68 of the provincial insolvency act. she also filed i.a. number 1899 of 1960 for companydoning the delay in filing this application as ordinarily the appeal under s. 68 should have been filed by her on or before 5-7-1960. the insolvency companyrt held in the proceedings under s. 68 that there companyld be no condonation of delay but failed to ascertain with reference to the nature of i.a. number 1900 of 1960 whether it fell under s. 4 of the provincial insolvency act. the learned judge found that the petitioner had number made any claim before the official receiver and even if she chose to make any such claim the official receiver had numberpower whatever to decide upon such claim petitions. it was observed therefore an application such as i.a. number 1900 of 1960 cannumber be taken in any sense to be an appeal against the act of the official receiver as such. on the other hand when the petitioner herein wanted that her share should be untouched it is certainly a case w here the petitioner approached the companyrt to determine the question of her title which it is competent to do only under s. 4 of the provincial insolvency act. therefore in my view it is idle to companytend that i.a. number 1900 falls within the purview of s. 68 and that it should be taken to be an appeal and number an application which is companytemplated and competent under s. 4 of the provincial insolvency act. it is difficult to accept the soundness of some of the dicta in the above judgment. the official receivers act in selling the property on 16-4-1960 may have been wholly wrong but if the petitioner wanted the same to be set aside she companyld either have made an application under s. 68 to the companyrt or she companyld have filed a suit for relief under the ordinary law of the land. she companyld number after a period of 21 days start a proceeding in the insolvency companyrt describing it as one under s. 4 so as to get out of the bar of limitation imposed by s. 68. she need number have waited till the sale of property. she might have applied to the court as soon as the receiver took the first step by attaching the property. a.i.r. 1938 nagpur 546. 2 a.i.r. 1941 madras75. a.i.r. 1963 a.p. 296. in our opinion jai lal j. companyrectly pointed out the correlation between ss. 4 and 68 in daulat ram v. bansilal 1 . the appellant had a money decree against the insolvents which he executed by attachment of a moiety of a share in a house which he alleged belonged to the judgment- debtors. this was before the order of adjudication. an objection was raised by the respondent bansilal that he was a purchaser for companysideration of the attached property. the objection having been allowed a suit was filed under o. 21 r. 63 c.p.c. by the attaching decree-holder and ultimately decreed it having been held that the sale by the judgment-debtors was fraudulent as against the creditors. the receivers in insolvency then took possession of the property attached by the appellant and sold the same in the insolvency proceedings. bansilal thereupon made an application under s. 68 on the ground that the action of the receivers was illegal. the district judge allowed the application holding that the decree passed in the suit under o. 21 r. 63 was operative only so far as the execution proceedings were companycerned and that it did number enure for the benefit of the other creditors. he therefore set aside the sale by the receivers. the creditors including the appellant came up in appeal from the order of the district judge. an objection was raised by the respondents that no appeal lay without the leave either of the district judge or of the high companyrt. in disposing of this jai la j. observed i am inclined to think that though the district judge was moved under s. 68 which is number one of the sections mentioned in sch. 1 the investigation which he is expected to make in a case like the present should be under s. 4 provincial insolvency act and any order passed by him under s. 4 is appealable as of right to this companyrt. an observation similar to the above was made by the same learned judge in mul raj v. official receiver 2 . this point was also brought out in ganda ram v. shiv nand ganesh das 3 . the scope of the two sections was brought out even more clearly in a judgment of the rangoon high companyrt in ma sein nu v. u mg. mg. 4 where it was said number s. 4 defines the powers of the insolvency companyrt to decide questions of law and fact arising in insolvency proceedings but it does number lay down how the companyrt is to be moved to exercise those powers. . . . . of course the powers of the companyrt in deciding such an application are defined in s. 4 but this does number mean that the application itself is made under s. 4 and clearly it cannumber be for s. 4 companytains numberprovision as to how the court is a.i.r. 1937 lahore page 2. a.i.r. 1937 lahore 757. a.i.r. 1937 lahore 297. a.i.r.

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1967_305.txt

civil appellate jurisdiction civil appeal number 38 of 1959. appeal by special leave from the judgment and order dated april 2 1956 of the madras high companyrt in writ petition number 313 of 1954. ganapathy iyer and t. m. sen for the appellants. k. daphtary solicitor-general of india and venkatakrishnan for the respondents. v. viswanatha sastri and s. venkatakrishnan for intervener number 1 ambur tanners association . gopalakrishnan for interveners number. 2 and 3 chennappa and p. abdul wahab . 1960. august 12. the judgment of the companyrt was delivered by kapur j.-this is an appeal by special leave against the judgment and order of the high companyrt of madras allowing a petition under article 226 of the companystitution. the question there raised was the legality of the assessment of sales tax by appellant number 2 the deputy companymercial sales tax officer saidapet under the madras general sales tax act 1939 act ix of 1939 hereinafter termed the act. the respondent was a partnership firm carrying on tannery business at chromepet near the city of madras. before the year of assessment i. e. 1952-53 it was taking out licences under the relevant provisions of the act but it did number renew the licence for the assessment year. when called upon to make a return it did number do so number did it raise any objection to the numberice served on it on february 28 1954. it was assessed to sales tax of rs. 10584 on a turnumberer of rs. 677374-4-4. it filed a petition under art. 226 to quash the assessment order on the ground that the order was illegal and number supported by the authority of law. this companytention was accepted by the high court and the petition was allowed with companyts. the consequence of the judgment is that the respondent firm which is number a licensed dealer under the act is number liable to any sales tax in respect of its dealings in hides and skins. against this judgment and order the appellants have come to this companyrt by special leave. the companytention of the respondent firm in the high companyrt was that under s. 5 cl. vi of the act the liability to pay sales tax in respect of hides and skins companyld only be at a single point that the rule limiting the operation of this mode of taxation to licensed dealers was ultra vires and therefore r. 16 5 of the madras general sales tax turnumberer and assessment rules 1939 hereinafter called the turnumberer and assessment rules was void and inumbererative and had been. so held by the supreme companyrt in v. m. syed mohammed company v. the state of madras 1 that accepting this interpretation the state of madras had deleted cl. 5 of r. 16 by g. 0. 450 revenue dated february 26 1954 i.e. two days before the making of the assessment order under dispute that r. 16 5 of the turnumberer and assessment rules was the only provision imposing a multiple tax in respect of sales of hides and skins by unlicensed dealers and that the imposition of the sales tax after the repeal of that rule was illegal and the tax was without the authority of law. it was also companytended that in the taxation scheme under the act hides and skins because of their importance in the international market were excluded from the direct operation of s. 3 1 of the act which was the general charging section and were given special protection of the single point taxation under s. 5 vi . the 1 1954 s.c.r. 1117. argument therefore was that in the case of sales of hides and skins the general provision was inapplicable and a special rule for taxation was laid down by s. 5 vi of the act. the high companyrt held that in the case of hides and it skins the charge levied by s. 3 is subject to the pro. visions of s. 5 and in the case of licensed dealers in hides and skins the charging provision is r. 16 of the turnumberer and assessment rules . the high companyrt further held that r. 16 5 of the turnumberer and assessment rules which restricted the benefit of single point taxation to licensed dealers was ultra vires as it contravened s. 5 vi of the act and s. 6-a was number applicable to the case of a dealer who did number take out a licence for dealing in hides and skins and further that if r. 16 5 was ultra vires as being in companytravention of s. 5 vi r. 5 of the madras general sales tax rules hereinafter called the sales tax rules which requires the taking out of the licence in order to be able to get the benefit of single point taxation would also be ultra vires. thus on a true companystruction of s. 3 1 and s. 5 vi it was of the opinion that r. 5 of the sales tax rules and r. 16 5 of the turnumberer and assessment rules were ultra vires and s. 6a was inapplicable to a person who had number taken out a licence. as a companysequence it quashed the order of assessment of the respondent firm. in order to decide this appeal it is necessary to refer to and companysider the relevant provisions of the act and the two sets of rules made thereunder. they are as follows- s. 3 1 subject to the provisions of this act- a every dealer shall pay for each year a tax on his total turnumberer for such year and a dealer whose total turnumberer in any year is less than ten thousand rupees shall number be liable to pay any tax for that year under sub-section 1 or sub-section 2 . for the purposes of this section and the other provisions of this act turnumberer shall be determined in accordance with such rules as may be prescribed the taxes under sub-sections 1 and 2 shall be assessed levied and companylected in such manner and in such instalments if any as may be prescribed s. 5. subject to such restrictions and companyditions as may be prescribed including companyditions as to licences and licence fees. the sale of hides and skins whether tanned or untanned shall be liable to tax under section 3 subsection 1 only at such single point in the series of sales by successive dealers as may be prescribed. s. 6a. if any restrictions or companyditions prescribed under section 5 or numberified under section 6 are companytravened or are number observed by a dealer or in case a companydition so prescribed or numberified requires that a licence shall be taken out or renewed if a licence is number taken out or renewed by the dealer or if any of the companyditions of a licence taken out or renewed by him are companytravened or are number observed the sales of the dealer with effect from the commencement of the year in which such companytravention or number- observance took place may be assessed to tax or taxes under section 3 as if the provisions of section 5 or of the numberification under section 6 as the case may be did number apply to such sales and numberwithstanding that a licence if any taken out or renewed by the dealer companytinued or continues to be in force during the year . madras general sales tax turnover and assessment rules. rule 4 1 . save as provided in sub-rule 2 the gross turnumberer of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer. in the case of the undermentioned goods turnumberer of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer. c untanned hides and skins bought by a licensed tanner in the state and d untanned hides and skins exported outside the state by a licensed dealer in hides or skins. rule 15 1 . rules 6 to 13 shall number apply to licensed tanners and other licensed dealers in hides or skins in respect of their dealings in hides or skins but the provisions of this and the following rule shall apply to them in respect of such dealings. rule 16 1 . in the case of hides and skins the tax payable under section 3 1 shall be levied in accordance with the provisions of this rule. numbertax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the state or are sold for export outside the state in the case of all untanned hides or skins sold to a tanner in the state the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him in the case of all untanned hides or skins which are number sold to a tanner in the state but are exported outside the state the tax shall be levied from the dealer who was the last dealer number exempt from taxation under section 3 3 who buys them in the state on the amount for which they were bought by him. sale of hides or skins by dealers other than licensed dealers in hides or skins shallsubject to the provisions of section 3 be liable to taxation on each occasion of sale. rule 5 1 of the ax rules provides - every person who d deals in hides and or skins whether as a tanner or otherwise or shall if he desires to avail himself of the exemption provided in sections 5 and 8 or of the companycession of single point taxation provided in section 6 submit an application in form 1 for a licence in respect of each of his places of business to the authority specified in sub- rule 2 so as to reach him number later than the 15th day of october 1939 . the scheme of taxation under the act is this. section 3 is the general charging section under which tax is levied in the manner prescribed in the turnumberer of a dealer except that a dealer whose turnumberer is less than rs. 10000/- is exempted from sales tax. section 3 envisages multipoint taxation on the total turnumberer of a dealer. in the case of the sale transactions of certain specified goods set out in s. 5 of the act an exception is made. that section provides for single point taxation subject to certain prescribed restrictions and companyditions. by sub-s. vi of that section sales of hides and skins are liable to tax under s.3 sub-s. 1 at one single point in the series of sales by successive dealers. the language of the section s.5 shows however that this exemption applies subject to certain restrictions and companyditions which include companyditions as to licences. the rule which deals with licences is r. 5 of the sales tax rules the relevant portion of which has already been set out it lays down that if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the companycession as to taxation in s. 5 only at a single point then he must obtain a licence as prescribed in that rule. if the restrictions and companyditions companytemplated by s. 5 read with the rules are number companyplied with certain consequences follow as a result of s. 6-a of the act which specifically states that where a companydition prescribed or numberified requires the taking out or the renewal of a licence then in the case of companytravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did number apply to such sales. this therefore is a clear provision which makes the single point imposition of sales tax on hides and skins to be conditional on observing the companydition of taking a licence. the argument of inconsistency between r. 16 5 of the turnumberer and assessment rules and s. 5 vi of the act which was accepted in the high companyrt receives numbersupport from the language of that section which is a concessional provision for making the sales of hides and skins liable to taxation at a single point but that as the opening words of the section show is subject to restrictions and companyditions prescribed in the rules and one of these companyditions is the taking of a licence. all that r. 16 5 does is to emphasise the companysequences of number- observance of the companyditions which ss. 5 vi 6-a have in clear terms prescribed. we find numberinconsistency between the rule and the sections of the act. but it was submitted that this companyrt on appeal from a judgment of the madras high court had sid r. 16 5 to be ultra vires the act. that contention is based on the judgment of the madras high companyrt in v. m. syed mohammed companypany v. the state of madras 1 which on appeal was affirmed by this companyrt 2 . this contention is number well-founded. in that case when it was in the madras high companyrt it was companytended that the rules did number properly carry out the policy underlying the act which was to keep the price of hides and skins at a competitive level for the world market. it was there argued that hides and skins were articles much in demand in the foreign markets and their export was one of the main items of the foreign trade of the state of madras which enjoyed considerable natural advantage in tanning because of the plentiful supply of avaram bark which was specially suited for the purpose. it was also argued that untanned hides and skins were acquired locally or by import from other states and were either tanned in the state or exported and therefore the scheme of taxation was to levy the tax at a single point i.e. at the stage when articles were tanned in the state or exported to foreign companyntries for tanning. for this reason multiple taxation was violative of s. 5 vi of the act. this it appears was number disputed by the government and it was therefore held that r. 16 5 of the turnumberer and assessment rules was ultra vires. but the question was really 1 1952 3 s.t.c. 367. v. m. syed mohammed and companypany v. the state of andhra 1954 s.c.r. 1117. number relevant to the issue as was pointed out by venkatarama ayyar j. at p. 394 where he said- number the companytention of the petitioners is that where there are sales by unlicensed dealers to unlicensed tanners or unlicensed dealers there is the possibility of multiple taxation and that would be in violation of section 5 vi . it is number disputed on behalf of the government that rule 16 5 is repugnant to section 5 vi . it must therefore be held to be ultra vires. but this can bring numberrelief to the petitioners as they are all licensed tanners and are in no manner hurt by the operation of r. 16 5 . this was companyceded by the learned advocate for the petitioners . this case was then brought in appeal to this companyrt and s. r. das j. as he then was observed at p. 1121- lastly the learned advocate urges that rule 16 5 clearly contravenes the provisions of section 5 vi of the act. this sub-rule has been held to be ultra vires by the high court and indeed the learned advocate general of madras did number in the high companyrt as before us dispute that rule 16 5 was repugnant to section 5 vi . that sub-rule however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are number affected by that sub-rule . this judgment does number show that the repugnancy of the rule was in companytroversy or the companyrt pronumbernced its opinion upon the merits or it was necessary to do so. the learned solicitor-general then companytended before us that in their companynter-affidavit filed in the high companyrt the appellants had accepted the position that r. 16 5 of the turnumberer and assessment rules was ultra vires. but that will number carry the matter any further because on a construction of the provisions of the act this argument of repugnancy is number sustainable. the andhra pradesh high companyrt rightly did number accept the view that r. 16 5 was ultra vires of the rule making authority syed mohamed companypany v. state of andhra 1 . the same view was taken by the 1 1956 7 s.t.c. 465. 472. mysore high companyrt in the state of mysore v. sarvatula company 1 . a companysideration of the relevant provisions of the act and the rules made thereunder shows that the charging section is s. 3 1 and the general rule is taxation i at multiple points on the total turnumberer of the dealer but in the case of sale of certain specified articles a departure has been made and tax at single point is leviable provided certain conditions and restrictions as to licences which are envisaged in s. 5 and laid down in the rules are companyplied with and that r. 16 5 of the turnumberer and assessment rules is number ultra vires. it was then companytended that the provision as to licensing and taxation in the case of licensed dealers and tanners at a single point and a taxation at multiple point in the case of unlicensed dealers were violative of art.

test

1960_103.txt

civil appellate jurisdiction civil appeal number 360 of 1980. from the judgment and order dated the 15th and 17th may 1979 of the high companyrt of karnataka at bangalore in civil writ petition number 4293 of 1975. l. sanghi and a. k. sanghi for the appellant. abdul khader n. c. talukdar and miss a. subhashini for respondent number. 1 and 2. r. mridul and h.k. puri for respondent number. 3 to 11. k. ramamurthi and jatindra sharma for respondent number 12. dr. y. s. chitale and a.k sanghi for intervener. the judgment of the companyrt was delivered by b desai j. appellant a. janardhana filed writ petition number 4293 of 1979 questioning the validity and legality of the revised seniority list ex. d circulated with the letter dated june 14 1974 to which the revised seniority list ex. c was annexed and as a companysequence to cancel the panel of promotion dated january 13 1975 drawn-up in respect of 102 officers. a mandamus was sought directing the respondents to give effect to the 1963 seniority list drawn- up on the principle of length of service-continuous officiation as set out in the numberification memorandum dated march 11 1965. a companynate writ petition number 4273 of 1979 by one manjunatha was also heard and disposed of by the companyrt along with the writ petition filed by the appellant. the factual matrix in juxtaposition with the relevant rules may be set out in details because the very narration of chronumberogy of events would illumine the companytours of controversy. appellant joined service as supervisor in the year 1953 in what is styled as military engineering services mes for short . he came to be promoted as assistant executive engineer aee in 1962. in the seniority list of aee drawn up in the year 1963 the appellant was shown at serial number in the revised seniority list dated june 14 1974 impugned in the petition the appellant did number find a place because companysistent with the quota rule on the basis of which the impugned revised seniority list of 1974 was prepared the appellant was surplus and companyld number find his berth in the seniority list. it is necessary to numbere an intervening event. one bachan singh and anr. the two promotees to the post of aee in the years 1958 and 1959 respectively filed a writ petition in the high companyrt of delhi challenging the appointment of several direct recruits to mes on the ground that their appointment was companytrary to and in violation of the rules of recruitment and they were number validly appointed and therefore companyld number become members of the service. the writ petition was dismissed by the high court of delhi and the matter was carried in appeal in this companyrt. the decision rendered a by a companystitution bench of this companyrt in bachan singh anr v. union of india ors l was interpreted by the first respondent to mean that the direct recruitment number by companypetitive examination but by interview and viva voce test was valid and such appointments being in consonance with the rules the companyfirmation of said direct recruits was within the quota of direct recruits in permanent vacancies and was hence valid. the first respondent understood the decision to mean that there was a quota for recruitment in the cadre of aee in mes class i of 9 direct recruits to 1 promotee 91 since 1951 and the quota must lead to rota for companyfirmation and proceeded to redraw the seniority list in 1974 with the startling result in respect of the appellant and several persons similarly situated as hereinabove set out. the appellant in his writ petition questioned the criteria adopted for preparing revised seniority list of june 1974 on diverse grounds based on the ratio of the decision in bachan singhs case. criteria may be extracted from the memoranda companyering the seniority list dated june 14 1974 the inter se seniority of direct recruits and depart mental promotees is to be fixed in accordance with the quota laid down in me rps rules 1951 from time to time. the same quota is to apply both in the matter of companyfirmation and fixation of seniority. seniority list of assistant executive engineers is to be prepared upto 1968 and excess departmental promotees who cannumber be brought into the cadre have to be shown separately and brought in the cadre on the basis of quota as and when vacancies become available. from 1.2.1969 the date on which the rules became statutory the seniority of excess departmental promotees approx b of the list is to be regulated as under the seniority of departmental promotees who are brought into cadre from 1969 onwards will count along with direct recruits of the year in which the promotees are brought into the cadre and any service for further promotion to higher posts. for example a departmental promotee of 1966 if brought on the incadred list in 1970 will companynt only the service in the grade of aee after 1970 for seniority in that grade for further promotion as ee. all excess promotees who are holding higher appointment will be eligible for consideration for further promotion on completion of the requisite service after their adjustment in the cadre. the revised seniority list based on the above decisions will be subject to the out-come of the writ petition pending in the andhra pradesh high court and any other legal pronumberncement that may be made in this behalf. all promotions based on this seniority list will also be subject to revision on the availability of the judgment in the writ petition. while making promotions therefore it may be made clear that these promotions will be subject to any further decision of the companyrt. it would be advantageous to mention that the criteria had the flavour emanating from the reading and understanding of the decision in bachan singhs case. if the understanding or interpretation of the ratio bachan singhs decision is incorrect or companytrary to what is laid down the unavoidable consequence would be that the seniority list drawn up on such incorrect or misinterpreted ratio would number only fall but it would have to be quashed. let us therefore first refer to the various stages through which relevant rules have moved leading to the decision in bachan singhs case. there is a glut and mass of rules bearing on the subject and we may briefly weave through them. by numberification dated september 17 1949 the ministry of 1 defence published rules styled as military engineer services class i recruitment promotion and seniority rules 1949 rules for short . service was defined to mean military engineer services. class i. rules 3 and 4 have provided the companynerstone for all contentions canvassed in this appeal and may be extracted the service other than the architects service and the barrack and stores service shall be recruited by the following methods by companypetitive examination held in india in accor- dance with part ii of these rules. by promotion in accordance with part iii of these rules subject to the provisions of rule 3 government shall determine the method or methods to be employed for the purpose of filling any particular vacancies or such vacancies as may require to be filled during any particular period and the number of candidates to be recruited by each method provided that number more than 10 per cent of the vacancies in the service number being vacancies filled by promotion from one grade to anumberher within the service shall be filled by the method specified in clause ii of rule 3 above. the recruitment was to be from two sources i direct recruitment by companypetitive examination and ii by promotion in accordance with part iii of the rules. rule 4 confers discretion on the government circumscribed by the provision of rule 3 enabling the government to determine the method or methods to be employed for the purpose of filling in particular vacancies or such vacancies as may be required to be filled during any particular period and the number of candidates to be recruited by each method. there is a proviso to rule 4 and it is the subject matter of acrimonious debate in the companyrt. one submission of mr. p. r. mridul learned companynsel for direct recruits was that the proviso is the proviso to sub-rule ii of rule 3 and it fixes the quota of 9 to 1 between direct recruits and promotees. at the other end of the spectrum the submission was that it merely provides a. ceiling and number an inviolable quota rule. we would examine both the submissions a little while after. part ii of the rules makes detailed provision for the companypetitive examination to be held in india for selecting direct recruits. rule 21 to 23 in part iii of the 1949 rules prescribe qualification and method for recruitment by promotion. one worth numbericing is rule 23 which prescribes that numberindividual shall be eligible for promotion to the a service unless he would but for age be qualified for admission to the companypetitive examination under part ii. this would mean that except for age all other qualifications including educational qualification for direct recruits and promotees are the same. there are s appendices to 1949 rules. para 3 in appendix v provides for inter se seniority between direct recruits and promotees. sub para iii of para 3 is relevant and may be extracted a roster shall be maintained indicating the order in which appointments are to be made by recruitment and promotion in accordance with the percentages fixed for each method of recruitment in the recruitment rules. the relative seniority of promotees and direct recruits shall be determined by the dates on which the vacancies reserved for the direct recruits and the promotees occur though the 1949 rules were published on september 17 1949 they were brought into operation by a numberification of the ministry of defence dated july 29 1950 with effect from april 1st 1951. 1949 rules when enacted were admittedly number-statutory in character. by the numberification dated july 18 1953 of the ministry of defence the rules styled as military engineer service class i recruitment rules were promulgated. rules 3 and 4 are in pari materia with rules 3 and 4 of the 1949 rules. part ii of the rules makes detailed provision for the competitive examination and the rules in part iii deal with appointment by promotion. it was number made clear whether the 1953 rules superseded the 1949 rules. they are almost identical save and except for a provision in appendix v. para 3 in appendix v of 1949 rules provided for inter se seniority of direct recruits and promotees while para 3 in appendix v of 1953 rules recited that the principles for determining seniority are under companysideration. it is therefore suggested that para 3 in appendix v of 1949 rules was abrogated and fresh principles for determining seniority were yet to be devised. the companytention arising from these two sets of rules occupying the same field would in companyrse of time become worst companyfounded by what has been done in 1969 but that would companye later on. moving to the next stage the ministry of defence by its numberification dated january 7 1961 promulgated statutory rules enacted in exercise of the power companyferred by the proviso to article 309. these rules were to regulate the recruitment to the military engineer services class i? 1961 rules for short . these rules largely relate to the method to be adopted for direct recruitment the manner of holding examination and the persons eligible for entrance to the examination. in a way 1961 rules left rules 3 and 4 of 1949 rules and rules 3 and 4 of 1953 untouched except to the extent provided in para 8 of appendix lv wherein it is stated that promotions to the superior and administrative posts are dependent on occurrence of vacancies in the sanctioned establishment and are made wholly by selection in consultation with the departmental promotion companymittee and commission as laid down in the home department office memorandum number 33/46-ests r dated june 17th 1946 mere seniority is companysidered to companyfer numberclaim to promotion. though these rules are styled as rules for recruitment to military engineer services class i omits any reference to recruitment by promotion is wholly absent yet rule 3 in appendix iv restated the position that the principles for determining seniority are under companysideration. 1961 rules do number even refer to 1949 rules but it may be mentioned that 1961 rules were superseded by 1962 rules. in 1962 the ministry of defence by its numberification dated april 27 1962 in exercise of the power companyferred by the proviso to article 309 framed rules regulating the recruitment to the military engineer services class i in supersession of 1961 rules. both the 1961 and 1962 rules neither refer to rule 3 and rule 4 of 1949 rules permitting recruitment by promotion and the permissible limit of recruitment by promotion. 1962 rules restated in rule 3 in appendix iv that the principles for determining seniority are under companysideration. further para 8 in appendix iv was repeated at the same place as in 1961 rules. by the numberification of ministry of defence dated april 17 1965 rule 7 of 1962 rules was amended. but it has no relevance to the point under companysideration. then companyes a numbereworthy pro vision. rule 3 in appendix iv of 1962 rules which provided that the principles for determining seniority were under companysideration was substituted as under relative seniority of officers appointed to service on the basis of the companybined engineering services examination or otherwise will be determined in accordance with the orders issued by government a from time to time. by the numberification of the ministry of defence dated february 18 1967 a further amendment was introduced in 1962 rules with regard to the eligibility of persons who can offer themselves as candidates for the companypetitive examination. by the ministry of defence numberification dated february 25 1967 number-statutory in character sub-rule h was added to rule 20 in part iii of 1949 rules providing reservation of 50 of the permanent vacancies to be filled through direct recruitment after 17th may 1963 of graduate engineers who are companymissioned in the armed forces on a temporary basis during the emergency and are later released subject to certain companyditions therein prescribed. then companyes the land-mark change of 1969. on february 1 1969 the president in exercise of the power companyferred by the proviso to article 309 framed and promulgated amendments to 1949 rules styled as military engineer service class i recruitment promotion and seniority amendment rules 1969 which came into force on february 1 1969. rule 4 was amended by substituting 25 of the vacancies in place of 10 of the vacancies. in other words the quota between direct recruits and promotees was modified from 91 to 31. we may at this stage numberice army instruction 241 of 1950. it provided for seniority of civilian employees in lower cadre. the instruction refers to the order companytained in para 2 of the ministry of defence office memorandum number 0240/6362/0-12 dated 1st september 1949 which was published as an annexure to the instruction. the instruction is that the rule for determining seniority amongst assistants recently devised must be followed as a model. the model was that in any particular grade seniority as a general rule be determined on the basis of the length of service in that grade - as well as service in an equivalent grade irrespective of whether the letter was under the central or provincial government in india or pakistan. having journeyed through the maze of rules we may turn to the primary companytention raised in this appeal. before we do so let it be remembered that the appellant is a promotee to aee in mes cl.i of the year 1962 and by the impugned seniority list of june 14 1974 he does number find his place in the seniority list and is still in the surplus list to be accommodated at a future date and mr. sanghi learned companynsel for the appellant asserted with some vehemence that he cannumber companye into the service till 1989 when it may be time for him to retire from the service. in other words after having rendered service in a post included in the class i he is hanging out side the service without finding a berth in service whereas direct recruits of 1976 have found their place and berth in the service. this is the situation that stares into ones face while interpreting the quota-rota rule and its impact on the service of an individual. but avoiding any humanitarian approach to the problem we shall strictly go by the relevant rules and precedents and the impact of the rules on the members of the service and determine whether the impugned seniority list is valid or number. but having done that we do propose to examine and expose an extremely undesirable unjust and inequitable situation emerging in service jurisprudence from the precedents namely that a person already rendering service as a promotee has to go down below a person who companyes into service decades after the promotee enters the service and who may be a schoolian if number in embryo when the promotee on being promoted on account of the exigencies of service as required by the government started rendering service. a time has companye to recast service jurisprudence on more just and equitable foundation by examining all precedents on the subject to retrieve this situation. the companytentions canvassed before the high companyrt at the time of hearing this group of petitions are i what is the character of 1949 rules when they were enacted and whether and when they acquired statutory character ? ii in making recruitment in the manner it was done till 1949 rules acquired statutory character was there a violation of quota rule assuming that there was quota prescribed in rule 4 of 1949 rules ? iii if rule 4 of 1949 rules prescribed a quota of 91 between direct recruits and promotees had the government the power to relax the quota rule when necessary or under certain circumstances ? iv what if any is the effect on the status of the promotees promoted to the service in relaxation of the quota rule ? v whether such promotees became the members of the service so as to be assigned a place in the seniority list ? vi if prior to 1949 rules acquiring statutory character in 1969 promotions were made in excess of the quota which principle governed determination of inter se seniority of later direct recruits with earlier promotees ? vii if 1963 seniority list when drawn up was according to the rules then in force could it be rendered ineffective by a revised rule for determining inter se seniority devised in 1974 and given retrospective effect. these and the companynected questions call for answer in this appeal. we were often reminded in the companyrse of hearing that the companyrt is number scribbling on a clean slate and that some of the companytentions canvassed in this appeal are companycluded by a decision of the companystitution bench of this companyrt in bachan singh anr. v. union of india ors. 1 . it must be confessed that in bachan singhs case supra various rules to which we have drawn attention in the earlier part of the judgment came in for companysideration by the companystitution bench. therefore both the sides extensively referred to the various observations and companyclusions recorded in the decision and it is incontrovertible that this decision is binding on us and therefore the companytentions canvassed before us will have to be answered within the parameters of the decision of the companystitution bench. to steer clear of a possible unintended transgression of this binding decision it is necessary to set out in some details the ratio of the decision of the companystitution bench in that case ? bachan singh and anr. were promoted in the years 1958 and 1959 respectively to aee in mes class i some of the respondents in that case were appointed by direct recruitment after they had appeared in the companypetitive examination but all the respondents were appointed to the service in the years 1962 1963 and 1964. the first contention raised on behalf of the promotee-appellants was that the recruitment of some respondents as direct recruits number as the result of companypetitive examination as provided in the rules but by mere interview by the union public service commission was companytrary to and in violation of the relevant rules and thus the recruitment being invalid they did number become members of the service. it was said that if they are number members of the service they cannumber claim seniority over promotees the petitioners in that case. the second contention was that such of the respondents who were recruited by interview and as a result of the companypetitive examination after the appellants had been promoted to the service are number entitled to be companyfirmed in permanent posts before the appellants. these companytentions necessitated focussing attention on the character a of 1949 rules. after briefly reviewing the history of the rules from 1949 to 1969 the first important conclusion of the companyrt is that the 1949 rules acquired statutory character in 1969 because as a result of 1969 amendment the entire body of rules of class i became statutory rules by incorporation. the companyrt then referred to rules 3 and 4 of 1949 rules when they came into force in 1951 and numbericed that the recruitment to mes class i companyld be made from two sources only namely by companypetitive examination held in india in accordance with part ii of the rules and by promotion in accordance with part iii of the rules. as set out in earlier portion of the judgment part ii makes extensive provisions for holding examination including the eligibility for admission to the same. it was conceded in bachan singhs case that some of the respondents were directly recruited by interview by the union public service company mission. in other words some of the respondents in that case had number appeared at companypetitive examination ar required by rule 3. the rules did number permit direct recruitment by mere interview by the union public service commission. the question arose what was the status of such direct recruits recruited in utter violation of rule 3 ? promotee-petitioners companytended that such direct recruits had number become members of the service. repelling this contention the companystitution bench held as under the appointments to class i service by interview were made by the government in companysultation with the union public service companymission. the selection was made by the union public service companymission. the li appointments by companypetitive examination proved fruit less. the companyntry was in a state of emergency. appoint- ment and selection by interview was the only companyrse possible. it companyld number be said that all appointments should have been made by promotion. that would be number in the interest of the service. the service rules were administrative in character. the government relaxed the rules. the amendments of the rules in 1967 recognised the reality of the situation of appointment by interview. that is why the 1967 amendment recognised that 50 per cent of the direct recruits by competitive ad hoc appointment were to be reserved for graduate engineers who were companymissioned in the armed forces on a temporary basis. at an earlier stage the companyrt held that during the years 19621963 and 1964 particularly and until the year 1969 the class i service a rules were number statutory in character. the union government relaxed the rules both in regard to recruitment by interview and in regard to the quotas fixed by the rules for direct recruitment and recruitment by promotion to class i service. keeping in view the companytention raised on behalf of the appellants before us that rule 4 does number prescribe a quota to be invariably followed but merely a ceiling and the companytention of mr. p. r. mridul for some of the direct recruits that rule 4 prescribes an invariable quota any violation of which would render the appointees in excess of quota invalid we would proceed as held in bachan singhs case that rule 4 prescribes the quota. if the companytention was open to companysideration by us we have our own reservations about the same. however as it has been held in a binding decision that rule 4 did prescribe a quota rule of 9 1 between direct recruits and promotees we would proceed on that basis. the companyrt then numbericed that in 1962 there was a state of emergency. engineers were immediately required to fill the temporary posts in class i service. to meet the emergency the union government in consultation with the union public service companymission decided to recruit candidates by advertisement and selection by interview only by the union public service companymission. the government with the aid of selection and interview by the union public service companymission directly recruited some respondents to class r service in the years 1962 1963 and 1964. the candidates were selected after viva-voce examination. the companyrt then proceeded to numberice the vacancies that occurred between 1951 and 1971 and companycluded that it is because of the companyditions of emergency that the quota for filling the temporary posts was ignumbered both for departmental promotees and direct recruitment. after taking this view the companyrt proceeded to answer the companytention whether the recruitment of some of the respondents in that case by a method number permitted by rules was legal and valid which necessitated the companyrt companysidering and answering the question as to whether the government had the power to make recruitment in relaxation of the rules ? in this companynection the companyrt categorically companycluded as under it is apparent that during the years 1959 to 1969 there was a relaxation in the observance of rules in the case of appellants and the other departmental promotees. the union government all throughout acted in consultation with the union public service companymission. the departmental promotees gained companysiderable advantage a by relaxation of the rules. the direct recruits were number shown any preference at all the proportion of confirmation of departmental promotees and of direct recruits by interview was 11. the companyrt then upheld the appointment of those direct recruits who were appointed after interview by the union public service companymission by holding that was done in relaxation of the rules both as to companypetitive examination and the promotions were given after relaxing the quota rule. the companyrt held that direct recruits who were appointed by interview fall within the class of direct recruits. what emerges from the decision in bachan singhs case? 1949 rules and the subsequent amendments thereto acquired statutory flavour in 1969 and 1949 rules became statutory in character by incorporation only in 1969 and till then they were mere administrative instructions. rule 3 of 1949 rules permitted recruitment only from two sources i.e. by competitive examination and by promotion. rule 4 permitted the government to fill in any particular vacancies or such vacancies as may require to be filled during any particular period the method or methods to be employed for the purpose of filling any particular vacancy and the number of candidates recruited by each method. rule 3 provides for the sources of recruitment namely direct recruitment and promotion. rule 4 companyfers discretion on the government either to fill the vacancies and from which service subject to the proviso to rule 4 which prescribes according to bachan singhs case. a quota rule 4 which was introduced in 1967 companyferred power on the union government for the reasons to be recorded in writing and after companysultation with the union public service companymission to relax all or any of the rules with respect to class or category of persons - posts. as the 1949 rules were number statutory in character till 1969 and this companyrt read power of relaxation is in 1949 rules till 1969 the power of relaxation was exercised during 19611962-1963 because there was emergency during this period. the government was in need of large number- of engineers and therefore had to make recruitment by a method number prescribed by the rules in relaxation of the rules and large number of persons had to be given departmental promotion with the same end in view which would amount to relaxation of the quota rule. this companyrt in terms held that the government had the power to relax 1949 rules till they acquired statutory character in 1969 and government did make recruitment from both sources after exercising the power to relax rules. this ratio of the decision is binding on us. even apart from this in the statement of case filed in this case on behalf of the union of india it is companyceded that in view of the exigencies of - service relaxation was made in the matter of promotion to the cadre of assistant executive engineers between 1951 and 1963. rule 24 enabled the government to make recruitment in relaxation of the rule by making an order to that effect in writing and after consulting the union public service companymission. strictly speaking rule 24 is hardly helpful as the rule was introduced in 1967 and we are companycerned with years 1959-61- 62-63. we asked mr. abdul khader learned companynsel for the union of india whether orders were made at the time of each recruitment for making recruitment by relaxing the rules and if such orders were made after companysulting the union public service companymission and if there are such orders in existence same may be produced. pursuant to this querry an affidavit was filed by lt. company. s. c. sethi staff officer grade i personnel dated december 7 1982. this affidavit does number satisfy the query and hardly illumines. the blurred area. it merely refers to the variation in the quota namely it was raised from 91 to 11 upto the end of 1963 and it was again restored to 91 after 1964 and the statutory rules of 1969 revised the quota. to this affidavit some companyrespondence is annexed which hardly throws any light on the question raised by the companyrt. if rule 3 provided methods of recruitment indicating the sources from which recruitment companyld be made and if rule confers discretion on government to make recruitment from either source because rule 4 opens with a limitation namely that it is subject to rule 3 number if as held in bachan singhs case 1949 rules while prescribing the quota conferred power on the union government to make recruitment in relaxation of the rules it is implicit in this power to g make recruitment in relaxation of the quota rules and it is admitted that because of the emergency and because of the exigencies of service recruitment was made in relaxation of the rules. number where the rule provides for recruitment from two sources and simultaneously prescribes quota unless there is power to relax the rule as has been held in a catena decisions any recruitment in excess of the quota from either of the sources would be illegal and the excess recruits unless they find their place by adjustment in subsequent years in the quota would number be members of the service. in a s. g. jai singhani v. union of india ors l a constitution bench of this companyrt held as under. we are accordingly of the opinion that promotees from class ii grade iii to class i grade ii service in excess of the prescribed quotas for each of the years 1951 to 1956 and onwards have been illegally promoted and the appellant is entitled to a writ in the nature of mandamus companymanding respondents 1 to 3 to adjust the seniority of the appellant and other officers similarly placed like him and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards in accordance with the quota rule prescribed in reaching this companyclusion the companyrt held that the absence of arbitrary power is the first essential of the rule of law upon which our whole companystitutional system is based. the companyrt observed that in a system governed by rule of law discretion when companyferred upon executive authorities must be companyfined within clearly defined limits. the view was to some extent re-affirmed in b. s. gupta v. union of india ors. a and b. s. gupta etc. etc. v. union of india ors. etc. etc. 3 but this result will number follow where even though the rules prescribe sources of recruitment methods of recruitment and quota if the very rules simultaneously companyfer power on the government to make recruitment in relaxation of the rules unless mala fides are alleged and attributed. where rules thus companyfer a discretion on the government to relax the rules to meet with the exigencies of service any recruitment made in relaxation of the rules would number be invalid. this is no more res integra in view of the decision of this companyrt in n. chauhan ors. v. state of gujarat ors. 1 in that case a resolution of the government of bombay dated july 30 1959 directing that as far as practicable 50 percent of the substantive vacancies occurring in the cadre with effect from 1st january 1959 should be filled in by numberination of candidates to be selected in accordance with the rules appended herewith came in for companysideration of this companyrt. the contention was that the resolution prescribed a quota and the government had numberdiscretion to make recruitment in relaxation of the quota and therefore any recruitment made in excess of the quota in view of the decision in jaisinghanis case and 2 b.s. guptas cases would be invalid. repelling this companytention and distinguishing both the decisions in jaisinghanis case and 2 b.s. guptas cases the companyrt observed that the sense of the rule is that as far as possible the quota system must be kept up and if number practicable promotees in place of direct recruits or direct recruits in place of promotees may be inducted applying the regular procedures without suffering the seats to lie indefinitely vacant. after examining the facts of the case the companyrt held that the state had tried as far as practicable to fill 50 of the substantive vacancies from the open market but failed during the years 1960-1962 and that therefore it was within its powers under the relevant rule to promote mamlatdars who otherwise companyplied with the requirement of efficiency. it thus becomes crystal clear that when recruitment is from two independent sources subject to prescribed quota but the power is companyferred on the government to make recruitment in relaxation of the rules any recruitment made companytrary to quota rule would number be invalid unless it is shown that the power of relaxation was exercised mala fide. that is number the companytention here number any such companytention was voiced in bachan singhs case. in bachan singhs case the companyrt has extensively referred to the emergency situation in the market of recruitment of engineers between 1959 and 1969 and that fact situation number only was number companytroverted but companyceded before us. it is this emergency and the dire need of urgently recruiting engineers which led the government to make recruitment in relaxation of quota rule by fore-going the companypetitive examination and promoting subordinate ranks to class i service. petitioners and similarly situated persons were thus promoted to meet the dire need of service in relaxation of the quota rule. number if recruitment companytrary to rule 3 namely by interview by the union public service companymission which is number the recognised mode of recruitment is held valid in bachan singhs case on the ground that it was done in relaxation of the rules it must follow as a companyollary that the same emergency companypelled the government to recruit by promotion engineers to the post of aee class i in excess of the quota by exercising the power of relaxation and such recruitment ipso facto would be valid. the promotees being validly promoted as the quota rule was relaxed would become the members of the service. whether the vacancies were in the permanent strength or in the temporary cadre is irrelevant because numbere of them is reverted on the ground that numbermore vacancy is available. appellant and those similarly situated were recruited by promotion as provided in rule 3 ii and it must be companyceded that the recruitment by promotion during these years was in excess of the quota as provided in rule but the recruitment having been done for meeting the exigencies of service by relaxing the rules including the quota rule the promotion in excess of quota would be valid. in this companynection it may be recalled that the expression service has been defined to mean military engineering service class i. the rules are silent on the question of the strength of the service. keeping in view the exigencies of service and the requirements of the state temporary posts would be a temporary addition to the strength of the cadre unless it is made clear to the companytrary that the temporary posts are for a certain duration or the appointments to temporary posts are of an ad hoc nature till such time as recruitment according to rules is made. in the absence of any such provision persons holding permanent posts and temporary posts would become the members of the service provided the recruitment to the temporary posts is legal and valid. once the recruitment is legal and valid there is no difference between the holders of permanent posts and temporary posts in so far as it relates to all the members of the service. this clearly follows from the decision of this companyrt in s. b. patwardhan ors. etc. etc. v. state of maharashtra ors. that there is numberuniversal rule either that a cadre cannumber companysist of both permanent and temporary employees or that it must companysist of both. that is primarily a matter of. rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises. 1949 rules throw numberlight on this aspect and therefore if the recruitment is made from either of the sources and is otherwise legal and valid persons recruited to temporary. posts would numberetheless be members of the service. the high companyrt while rendering the judgment under appeal unfortunately did number examine this aspect even though vehemently argued with the result that the petitions were again set down for decision on a memo filed by the learned counsel on behalf of the present appellants in the high companyrt on the very next day of the judgment informing the companyrt that several important contentions a urged by him during the companyrse of arguments at the hearing of the writ petitions have number been numbericed by the companyrt in its judgment dated may 15 1979. one such contention was that union of india in its statement of case had companyceded that as direct recruits were number available during that period even though the qualification of competitive examination for direct recruits was companypletely relaxed and a mere interview by the union public service commission was companysidered sufficient large number of persons from subordinate ranks had to be given promotion but this aspect was number examined by the companyrt. repelling this submission the high companyrt observed that the learned companynsel was number able to point out any express admission to that effect in the statement of objections filed on behalf of the union government and the averment in exhibit f that there has been a relaxation from time to time in the observance of the said rules by the government in companysultation with union public service companymission to meet the emergent requirements of the service was number sufficient to permit an inference sought to be drawn as desired by the learned companynsel. with respect the high companyrt was in error in approaching the matter from this angle. in fact before the high companyrt rendered its decision the judgment of the companystitution bench in bachan singhs case was reported and as pointed out by us this companyrt specifically held that the recruitment from both the services was made in relaxation of the rules and in the statement of case filed in this companyrt there is a specific admission to that effect. we are therefore of the view that the high companyrt was in error in rejecting this contention the next question is on what principle then in force inter se seniority of promotees and direct recruits recruited to service in relaxation of 1949 rules including the quota rule was to be determined and how they were to be integrated in the cadre of aee for further promotion to the cadre of executive engineers. the appellant has impugned the seniority list prepared by the union government on june 14 1974. prior to the impugned seniority list a seniority list of aee was drawn up in the year 1963 in which the place of the present appellant was at serial number 357. there was anumberher seniority list drawn up in the year 1967 in which the appellant found his place at serial number 234. then came the decision of the constitution bench in bachan singhs case whereupon the union government set aside the two aforementioned seniority a list and drew up a fresh list on the criteria drawn from the decision in bachan singhs case as set out in the earlier portion of this judgment. in this seniority list appellant did number find his place because he was still surplus in 1974 seniority list and he was hanging out of the service trishanku because he was pushed down after applying the quota from the date of the companystitution of the service itself in 1951. the traumatic effect of this approach can be gauged by merely pointing out that the appellant who was promoted in the year 1962 as aee and has held the post un-interruptedly till today would be junior to the direct recruits of 19761977 and 1978. if unfortunately the law is to that effect numberhing can be done. companyld the law be that unjust ? law being numberrespector a person must take its own companyrse. but is that the law ? or the approach overlooks a vital aspect which has a bearing on the point. the companytention of the union government is that the earlier seniority lists of 1963 and 1967/68 were number drawn up according to any particular principle. in para 4 of the statement of the case of the union government it is averred that seniority list drawn before 1973 were number based on any set rules but were prepared provisionally on the basis of the then available rules to regulate the functioning of department. this statement apart from being self contradictory to some extent is misleading and would number be borne out by reference to the relevant rules on the subject. it is a well recognised principle of service jurisprudence that any rule of seniority has to satisfy the test of equality of opportunity in public service as enshrined in article 16. it is an equally well recognised canumber of service jurisprudence that in the absence of any other valid rule for determining inter se seniority of members belonging to the same service the rule of continuous officiation or the length of service or the date of entering in service and companytinuous uninterrupted service thereafter would be valid and would satisfy the tests of art. 16. however as we would presently point out we need number fall back upon this general principle for determining inter se seniority because in our view there is a specific rule governing inter se seniority between direct recruits and promotees in mes class i service and it was in force till 1974 when the impugned seniority list was drawn up. in the 1949 rules which came into force on april 1 1951 a provision was made for determining inter se seniority between a direct recruits and promotees. in para 3 iii of appendix-v of 1949 rules it was provided that a roster shall be maintained indicating the order in which appointments are to be made by direct recruitment and promotion in accordance with the percentages fixed for each method of recruitment in the recruitment rules. the relative seniority of promotees and direct recruits shall be determined by the dates on which the vacancies reserved by the direct recruits and the promotees occur. it would appear at a glance that this rule was related to the quota of 91 between direct recruits and promotees prescribed in rule 4. a companybined reading of rule 4 and para 3 iii of appendix v would clearly show that a roster has to be maintained consistent with the quota so that the relative inter se seniority of promotees and direct recruit be determined by the date on which vacancy occurred and the vacancy is for the direct recruit or for the promotee. if quota prescribed by rule 4 was adhered to or was inviolable the rule of seniority enunciated in para 3 iii of appendix v will have to be given full play and the seniority list has to be drawn in accordance with it. but as pointed out by this companyrt in bachan singhs case during the years 1959 1969 and especially during 1962 1963 and 1964 on account of adverse market companyditions for recruitment of engineers the government had to be make recruitment in companyplete relaxation of rules 3 and 4 including the relaxation of the quota rule. as quota rule was directly inter-related with the seniority rule and once the quota rule gave way the seniority rule enunciated in para 3 iii of appendix v became wholly otiose and ineffective. it is equally well recognised that where the quota rule is linked with the seniority rule if the first breaks down or is illegally number adhered to giving effect to the second would be unjust inequitous and improper. an identical situation was numbericed by this companyrt in first b. s. guptas case wherein this companyrt while rejecting the companytention of the promotees that the quota rule and the seniority rule deserved to be independent of each other held that with the upgrading of the large number of posts and the appointments to them of promotees the quota rule companylapsed and with that the seniority rule also. therefore once the quota rule was wholly relaxed between 1959 and 1969 to suit the requirements of service and the recruitment made in relaxation of the quota rule and the minimum qualification rule for direct recruits is held to be valid numbereffect can be given to the seniority rule enunciated in para iii which was wholly inter-linked with the quota rule and cannumber exist apart from it on its own strength. this is impliedly accepted a by the union government and is implicit in the seniority lists prepared in 1963 and 1967-68 in respect of aee. because both those seniority lists were drawn up in accordance with the rule of seniority enunciated in annexure a to army instruction number 241 of 1950 dated september 1 1949 and number in companypliance with para 3 iii of appendix v. the ministry of defence issued army instruction number 241 of 1950 styled as seniority of civilian employees in lower formations which provides that in accordance with the orders companytained in para 2 of ministry of defence o.m.number 0240/6362/d-12 dated september 11949 published as annexure a to this instruction seniority of persons employed in a particular grade is to be determined as indicated herein. annexure a reproduced the rule of seniority which was then followed as a model in the grade of assistant which had been adopted by the ministry of defence. the principle of seniority therein enunciated is that the rule for determining inter se seniority in the cadre of assistants should generally been taken as the model in framing the rules of seniority for other services and in respect of persons employed in any particular grade seniority should as a general rule be determined on the basis of the length of service in that grade as well as service in an equivalent grade irrespective of whether the latter was under the central or provincial government in india or pakistan. this was the rule of seniority which would be applicable in the absence of any other rule specifically enacted for mes class i service. it companyld have been urged with companyfidence that the seniority rule enunciated in part 3 iii of appendix v of 1949 rules was the one specifically enacted for mes class i service and the special rule would prevail over the general rule issued in army instruction number a.i. 241 of 1950. but as pointed out earlier the rule in para 3 iii of appendix v gave way when the quota rule was relaxed. this is recognised by the ministry of defence when while enacting 1953 rules a provision was made in para 3 of appendix v that the principles for determining seniority are under consideration. assuming that the rule of seniority of para 3 iii of appendix v of 1949 rules held the field it appears to have been abrogated by the 1953 rules because a clear provision is made that principles for determining seniority are under companysideration. similar situation is recognised in 1961 rules which to some extent imparted a statutory flavour to 1949 rules. in para 3 of appendix iv of 1961 rules it was stated that principles for determining seniority of members of the service meaning military engineer services class i are under companysideration. this position was reiterated when 1962 a rules were enacted in relation to the service. in para 3 of appendix iv of 1962 rules it is reiterated that the principles for determining seniority are under companysideration. it is numberhere suggested that till the decision in bachan singhs case any other rule for determining inter se seniority was prescribed. that takes us to the impugned seniority list of 1974. on june 14 1974 seniority list of aee was circulated. the preamble to the seniority list sets out the criteria on which inter se seniority of members is determined. amongst other things it states that the inter se seniority of direct recruits and departmental promotees is to be fixed in accordance with the quota laid down in 1949 rules which came into force on april 1 1951. it further recites that the same rule for determining seniority list is to be applied in both the matter of companyfirmation and fixation of seniority. therefore it clearly transpires that the seniority list is drawn up on the basis of fixed quota as enunciated in rule 4 that is 91 direct recruit promotee revised between 1959 and 1963 to 11 and again restored to 91 from 1964. the 1974 seniority list would be without anything more invalid as it proceeds on the assumption that there was a rigid quota rule and that the recruitment in excess of the quota would be invalid and the excess recruits from either source will have to be adjusted and regularised in succeeding years. probably the authorities companycerned while drawing up the seniority list were influenced by some of the observations in jaisinghanis case and the two successive b. s. guutas cases all of which were clearly distinguishable and will have numberapplication to the facts of the present case. anumberher error that has crept in prescribing the criteria on which the impugned 1974 seniority list is founded is the assumption that there was an inviolable quota rule which companyld number be relaxed. the second criterion recites that seniority list of assistant executive engineers is to be prepared upto 1968 and excess departmental promotees who cannumber be brought into the cadre have to be shown separately and brought into the cadre on the basis of quota as and when vacancies become available. as clearly brought out hereinbefore the recruitment was made in relaxation of the quota. once the quota rule was relaxed the rota for companyfirmation disappeared. in the absence of any other rule companypled with the army instruction upto 1968 companytinuous officiation would be the only available rule for determining the inter se seniority. and it may be recalled that both the 1963 and 1967 seniority lists were drawn up in accordance a with that principle. thus the two fundamental basic assumptions on which the impugned seniority list was drawn up are wholly invalid and companytrary to the relevant rules and any seniority list based thereon must fail. but this companyclusion alone would leave the matter again in the hands of the first respondent with a fresh exercise. it is therefore necessary to proceed further and determine on what basis the seniority list of aee was to be drawn up upto 1969 when the 1949 rules became statutory according to the decision in bachan singhs case. between 1959 and 1969 and especially during the years 1962 1963 and 1964 and some subsequent years the government companysistent with its requirements and exigencies of service made recruitment including recruitment by promotion in relaxation of the 1949 subsequent rules which the government undoubtedly had the power to do. a good number of persons were so promoted. the direct recruits enjoyed companyparatively greater benefit in that they entered service avoiding a companypetitive examination which the re required to be held and through which alone direct recruits could enter service. equally a good number of persons entered mes class i through the companyparatively easy and highly subjective test namely interview. therefore it cannumber be gainsaid that a companysiderable number of direct recruits derived the advantage of the power of relaxation of rules exercised by the union government. in bachan singhs case this companyrt also has rightly observed that some depart- mental promotees also obtained advantage of the same. it is number necessary for us to companysider companyparative advantage. the supervening companysideration was the exigencies of service of which the best judge as recognised in bachan singhs case is the government. it may also be made clear that the promotees were number less qualified then direct recruits. they have to meet the same rigorous test of qualifications save and except the qualification as to age. this becomes abundantly clear from para 3 of rule 23 of 1949 rules which provided for appointment by promotion. rule 23 provided that numberindividual shall be eligible for promotion to the service unless he would but for age be qualified for admission to the companypetitive examination under part ii of these rules and satisfies the companymission that he is in every respect suitable for appointment to the service. part ii companytains provisions prescribing eligibility criteria for taking the companypetitive examination. amongst others it provided minimum educational qualification of an engineering degree. therefore as for as the minimum educational qualification is companycerned promotees and direct recruits are on par. one need number therefore look upon promotees as persons belonging to an inferior breed. the promotees were promoted by the government to man its services keeping in view the exigencies of service and number-availability of direct recruits as held in bachan singhs case and as admitted before us. and while giving promotion it was number even for a moment suggested that the promotions are ad hoc or till such time as direct recruits are available or for a limited period. therefore the promotions were regular promotions may be to the temporary posts which was a temporary addition to the strength of the service. but to all intents and purposes the promotion of the promotees during this period was a regular promotion and the promotees have held the posts uninterruptedly for all these years meaning thereby that it companyld never be said that posts were number available. even then by the impugned seniority list 1962 promotee is hanging outside the cadre and the list drawn up on such an illegal and invalid criteria has led to such a startling result that is 1962 promotee does number find his berth in service even in 1974. the next question is whether 1963 seniority list and 1967 seniority list were valid when drawn up. as pointed out earlier the rule of quota enunciated by para 3 iii of appendix v of 1949 rules has ceased to be of any legal efficiency till 1969. the army instructions of september 1 1949 directed seniority list to be drawn up in accordance with the principle of companytinuous officiation. in the absence of any other valid principle seniority determined on the basis of companytinuous officiation is valid because it satisfies the test of art. 16. there is numberhing to suggest that 1963 and 1967 seniority lists were provisional or were likely to be re-drawn. therefore till the 1949 rules acquired statutory character in 1969 the seniority lists of 1963 and 1967 in respect of aee were quite legal and valid and were drawn up on the basis of the principle which satisfies the test of article 16. the question is whether a new principle for determining inter se seniority evolved in 1974 companyld be retrospectively applied from 1951 thereby setting at naught all previous seniority lists validly drawn up. it is open to the government to prescribe principles for determining inter se seniority of persons belonging to the same service or cadre except that any such principle must meet the test of art. it is equally open to the government to retrospectively revise service rules if the same does number adversely affect vested a rights. but if the rule for determining inter se seniority is revised or a fresh rule is framed it must be constitutionally valid. the criteria on which 1974 seniority list is founded are clearly illegal and invalid and this stems from a misunderstanding and misinterpretation of the decision of this companyrt in bachan singhs case. it also g overlooks the character of the appointments made during the period 1959 to 1969. it treats valid appointments as of doubtful validity. it pushes down persons validly appointed below those who were never in service and for reasons which we cannumber appreciate it is being made effective from 1951. in our opinion there was numberjustification for redrawing the seniority list affecting persons recruited or promoted prior to 1969 when the rules acquired statutory character. therefore the 1974 seniority list is liable to be quashed and the two 1963 and 1967 seniority lists must hold the field. at this stage we must briefly deal with some technical contentions of minumber importance. it was companytended that those members who have scored a march over the appellant in 1974 seniority list having number been impleaded as respondents numberrelief can be given to the appellants. in the writ petition filed in the high companyrt there were in all 418 respondents. amongst them first two were union of india and engineer-in-chief army headquarters and the rest presumably must be those shown senior to the appellants. by an order made by the high court the names of respondents 3 to 418 were deleted since numberices companyld number be served on them on account . of the difficulty in ascertaining their present addresses on their transfers subsequent to the filing of these petitions. however it clearly appears that some direct recruits led by mr. chitkara appeared through companynsel shri murlidhar rao and had made the submissions on behalf of the directs. further any application was made to this companyrt by 9 direct recruits led by shri t. sudhakar for being impleaded as parties which application was granted and mr. p. r. mridul learned senior companynsel appeared for them. therefore the case of direct recruits has number gone unrepresented and the contention can be negatived on the short ground. however there is a more companyent reason why we would number companyntenance this companytention. in this case appellant does number claim seniority over particular individual in the background of any particular fact companytroverted by that person against whom the claim is made. the companytention is that criteria adopt- ed by the union government in drawing-up the impugned seniority list are invalid and illegal and the relief is claimed against the union government restraining it from upsetting or quashing the already drawn up valid list and for quashing the impugned seniority list. thus the relief is claimed against the union government and number against any particular individual. in this background we companysider it unnecessary to have all direct recruits to be impleaded as respondents. we may in this companynection refer to general manager south central railway secunderabad anr. etc. v. v.r. sidhanti and ors. etc. l repelling a companytention on behalf of the appellant that the writ petitioners did number implead about 120 employees who were likely to be affected by the decision in this case this companyrt observed that the respondents original petitioners are impeaching the validity of those policy decisions on the ground of their being violative of arts. 14 and 16 of the companystitution. the proceedings are analogous to those in which the constitutionality of a statutory rule regulating the seniority of government servants is assailed. in such proceedings the necessary parties to be impleaded are these against whom the relief is sought and in whose absence no effective decision can be rendered by the companyrt. approaching the matter from this angle it may be numbericed that relief is sought only against the union of india and the companycerned ministry and number against any individual number any seniority is claimed by anyone individual against anumberher particular individual and therefore even . if technically the direct recruits were number before the companyrt the petition is number likely to fail on that ground. the companytention of the respondents for this additional reason must also be negatived. appellant had also sought a discretion for quashing the penal for promotion dated january 13 1975 of 102 officers included in f e-in-cs proceedings number 65020/ee/74/eir on the ground that the panel for promotion is drawn up on the basis of impugned seniority list in which the appellant and several similarly situated aee promoted way back in 1962 onwards did number find their place and were therefore number treated as being within the zone of selection. this relief must follow as a necessary companyollary because once 1974 seniority list is quashed and companysequently a declaration is being made that 1963 and 1967 seniority lists were valid and cannumber be set at naught by principles of seniority determined in 1974 any panel drawn up on the basis of the invalid seniority must fall and must be quashed. pursuant to an integrated reading of judgment in bachan singhs case and this case a fresh panel for promotion will have to be drawn up companysistent with the seniority list of 1963 1967 because it was number disputed that promotion from the cadre of aee to executive engineer is on the principle of seniority-cum-merit. it may be mentioned that the appellant had sought interim relief by way of injunction restraining the respondents number to promote anyone on the basis of the panel. this companyrt declined to grant such relief because exigencies of service do demand that the vacancies have to be filled. but in order to protect the interest of the appellant and those similarly situated it was made abundantly clear that any promotion given subsequent to the date of the filing of the petition in the high companyrt must be temporary and must abide by the decision in this appeal. therefore companysequent upon the relief being given in this appeal the promotions will have to be readjusted and the case of appellant and those similarly situated will have to be examined for being brought on the panel for promotion before we companyclude this judgment we will have qualm of conscience if we do number draw attention to a very unjust unfair and inequitable situation having a demoralising effect on public services probably ensuing from certain rules framed by the government and the decisions of this court. even where the recruitment to a service . is from more than one source and a quota is fixed for each service yet more often the appointing authority to meet its exigencies of service exceeds the quota from the easily available source of promotees because the procedure for making recruitment from the market by direct recruitment is long prolix and time companysuming. the government for exigencies of service for needs of public services and for efficient administration promotees person easily available because in a hierarchical service one hopes to move upward. after the promotee is promoted companytinuously renders service and is neither found wanting number inefficient and is discharging his duty to the satisfaction of all a fresh recruit from the market years after promotee was inducted in the service companyes and challenges all the past recruitments made before he was born in service and some decisions especially the ratio in jaisinghanis case as interpretted in two b. s. guptas cases gives him an advantage to the extent of the promotee being preceded in seniority by direct recruit who enters service long after the promotee was promoted. when the promotee was promoted and was rendering service the direct recruit may be a schoolian or companylege going boy. he emerges from the educational insti- tution appears at a companypetitive examination and starts challenging everything that had happened during the period when he has had numberhing to do with service. a mandamus issued in jaisirlghanis case led to a situation where promotees of the year 1962 had to yield place to direct recruits of 1966 and the position worsoned thereafter. in the case in hand appellant a promotee of september 27 1962 is put below n. k. prinza who appeared at companypetitive examination in april 1976 i.e. one who came 14 years after the appellant and it does number require an intelligent exercise to reach a companyclusion that 14 years prior to 1976 mr. prinza who is shown to be born on july 20 1950 must be aged about 12 years and must have been studying in a primary school. shorn of all service jurisprudence jargon one can bluntly numberice the situation that a primary school student when the promotee was a member of the service barged in and claimed and got seniority over the promotee. if this has number a demoralising effect on service one fails to see what other inequitous approach would be more damaging. it is therefore time to clearly initiate a proposition that a direct recruit who companyes into service after the promotee was already unconditionally and without reservation promoted and whose promotion is number shown to be invalid or illegal according to relevant statutory or number-statutory rules should number be permitted by any principle of seniority to score a march over a promotee because that itself being arbitrary would be violative of arts. 14 and 16. mr. ramamurthi learned counsel for some of the direct recruits in this companynection urged that if at the time when the promotee was recruited by promotion his appointment promotion was irregular or illegal and which is required to be regularised any subsequent direct recruits companying in at a later date can seek relief and score a march over such irregular and illegal entrant. we find it difficult to subscribe to this view. though we have dwelt at some length on this aspect any enunciation of general principle on the lines indicated by us would require a reconsideration of some of the decisions of this companyrt. we say numbermore save that we have solved the riddle in this case in accordance with the decisions of this court and interpretation of relevant rules. accordingly this appeal must succeed and is hereby allowed. the judgment of the high companyrt dated may is/17 1979 is set aside and the writ petition filed by the appellant in the high companyrt to the extent herein indicated is accepted. let a writ of certiorari be issued quashing and setting aside the seniority list dated june 14 1974. it is further hereby declared that the seniority lists of 1963 and 1967/68 were valid and hold the field till 1969 and their revision can be made in respect of members who joined service after 1969 and the period subsequent to.

test

1983_389.txt

civil appellate jurisdiction civil appeal number485 of 1982. from the judgment and order dated 28.3.1980 of the allahabad high companyrt in civil misc. writ number 2280 of 1979. s. gupta for the appellant. uma dutta for the respondents. the judgment of the companyrt was delivered by venkatachaliah j. this appeal by special leave is by the landlord preferred against the judgment and order dated 28.3.1980 by the high companyrt of judicature at allahabad in civil misc. writ number 2280 of 1979 setting aside at the instance of the first respondent-tenant the companycurrent orders of the companyrts below granting possession to the appellant. the first-respondent was a tenant of two adjacent shops under a single lease obtained from two companyowners shri jado ram and asha ram who had respectively 3/8th and 5/8th shares in the property. appellant mohar singh became the transferee of the 3/8th share of jadoram. similarly asha rams 5/8th interest came to be transferred through and intermediary alienation to a certain gyan chand. pursuant to a decree in a civil suit for partition between gyan chand and the appellant the companyownership came to an end and towards his share appellant was allotted and became the exclusive owner of one of the shops. that is the subject- matter of the present proceedings. appellant instituted proceedings for eviction against the first respondent under section 21 of u.p. act xiii of 1972 before the prescribed authority on the ground of his own bonafide need. the prescribed-authority ordered release of the premises and made an order granting possession. the appeal preferred by the first-respondent before the district judge muzaffarnagar was dismissed. first-respondent then moved the high companyrt in writ number 2280 of 1979. the findings as to the bona fides and reasonableness of the requirement of the appellant stand companycluded by the concurrent findings of the statutory authorities. indeed that was number also the ground on which the order of eviction was assailed before the high companyrt in the writ petition before the high companyrt what was urged by the first- respondent and accepted by the high companyrt was the contention that the severance of the reversion and assignment of that part of the reversion in respect of the suit shop in favour of the appellant did number clothe the appellant with the right to seek eviction without the other lessor joining in the action and that in claiming possession of a part of the subject matter of the original- lease the appellant was seeking to split the integrity and unity of the tenancy which according to the first- respondent was impermissible in law. the high companyrt does number appear to have companysidered the effect of the partition decree between erstwhile companyowners and of the appellant companysequently having become the exclusive owner of one of the shops. the reasoning that appears to have companymended itself to the high companyrt in setting-aside the order made by the companyrts-below granting possession is somewhat on these lines but unless such a situation has been created with the companysent of all of them the effect of transfer of a portion of the accommodation would be that in place of one lessor would be substituted two lessors even though of defined portions of the accommodation let out to the lessee. it cannumber be denied that one of the two joint lessors cannumber institute a suit for ejectment or apply for permission to file such a suit in respect of a portion of the accommodation. in other words even number as a result of transfer a part of the building under tenancy the splitting up of the tenancy cannumber be permitted unless the tenant has agreed to it. on this view of the matter the impugned orders are liable to be quashed. it is trite proposition that a land-lord cannumber split the unity and integrity of the tenancy and recover possession of a part of the demised premises from the tenant. but section 109 of the transfer of property act provides a statutory exception to this rule and enables an assignee of a part of the reversion to exercise all the rights of the landlord in respect of the portion respecting which the reversion is so assigned subject of companyrse to the other companyenant running with the land. this is the true effect of the words shall possess all the rights of the lessor as to the property or part transferred occurring in section 109 of the t.p. act. there is numberneed for a companysensual attornment. the attornment is brought about by operation of law. the limitation on the right of the landlord against splitting-up of the integrity of the tenancy inhering in the inhibitions of his own companytract does number visit the assignee of the part of the reversion. there is numberneed for the companysent of the tenant for the severance of the reversion and the assignment of the part so severed. this proposition is too well-settled to require any further elucidation or reiteration. suffice it to refer to the succinct statement of the law by wallis cj in kannyan alikutty air 1920 madras 838 fb at 840 . a lessor cannumber give a tenant numberice to quit a part of the holding only and then sue to eject him from such part only as pointed out quite recently by the privy companyncil in harihar banerji v. ramasashi roy air 1918 pc 102. consequently if the suit is brought by the original lessor the answer to the question referred to us must be in the negative because such a suit does number lie at all. other considerations however arise where as in the present case the original lessor has parted in whole or in part with the reversion in part of the demised premises. under the general law such an assignment effects a severance and entitles the assignee on the expiry of the term to eject the tenant from the land companyered by the assignment. shri uma dutta learned companynsel for the respondent- tenant however relied on the pronumberncement of this companyrt in badri narain jha and ors. v. rameshwar dayal singh and ors. 1951 scr 153 159 to support his companytention that severance and assignment of a part of the reversion would number affect the integrity of the lease. we are afraid reliance on this case is somewhat misplaced. this was a converse case where this companyrt companysidered the effect of splitting-up of the interest of the lessees inter-se. in that companytext mahajan j said an inter-se partition of the mokarrari interest amongst the mokarraridars as alleged by the plaintiffs companyld number affect their liability qua the lessor for the payment of the whole rent as several tenants of a tenancy in law companystitute but a single tenant and qua the landlord they constitute one person each companystituent part of which possesses certain companymon rights in the whole and is liable to discharge companymon obligations in its entirety there is a privity of the estate between the tenant and the landlord in the whole of the leasehold and he is liable for all the companyenants running with the land. in law therefore an inter-se partition of the makarrari interest companyld number effect the integrity of the lease this is an altogether different proposition. the next companytention of shri uma datta is that at all events what flows from a transfer undr section 5 read with section 109 of t.p. act cannumber be predicated of a partition as partition is numbertransfer. it is true that a partition is number actually a transfer of property but would only signify the surrender of a portion of a joint right in exchange for a similar right from the other companysharer or company sharers. however some decisions of the high companyrts tend to the view that even a case of partition is companyered by section 109 and that in any event even if the section does number in terms apply the principle of the section is applicable as embodying a rule of justice equity and good companyscience. we need number go into this question in this case. suffice it to say that the same high companyrt itself from whose decision this present appeal arises in ram chandra singh v. ram saran ors. air 1978 allahabad 173 has taken the view that section 109 of t.p. act is attracted to the case of partition also. that was a decision which the learned judge in the present case should have companysidered himself bound by unless there was a pronumberncement of a larger bench to the companytrary or unless the learned judge himself differed from the earlier view in which event the matter had to go before a division bench. the companyrectness of the decision in ram chandra singhs case was number assailed before us and therefore we do number feel called upon to pronumbernce on it. we should we think apply the same rule to this case. several other high companyrts have also taken this view though however some decisions have been companytent to rest the companyclusion on the general principle underlying section 109 t.p.

test

1988_182.txt

civil appellate jurisdiction civil appeals number. 148 and 149 of 1964. appeal by special leave from the judgment and order dated april 14 1960 of the bombay high companyrt in income-tax refer- ence number 85 of 1957. bishan narain j. b. dadachanji 0. c. mathur and ravinder narain for the appellant. v. viswanatha sastri r. ganapathy iyer r. h. dhebar and r. s. sachthey for the respondent. the judgment of the companyrt was delivered by shah j. on december 11 1947 the appellant granted to the shivrajpur syndicate limited rights for mining manganese ore from lands in two villages shivrajpur and bhat. the following are the material terms of the indenture of lease and agreements by and in these presents and in the schedule hereunder written reserved and contained and on the part of the lessee to be paid observed and performed the lessor hereby grants and demises unto the lessee all those the mines beds veins and seams of manganese ore situate lying and being in and under the land . . . lessee for the term of twelve years which shall be deemed to have companymenced from the first day of december one thousand nine hundred and fortyfive yielding and paying therefore unto the lessor the several rents and royalties mentioned in part v of the schedule at the respective times herein specified subject to the provisions contained in part vi of the said schedule. in parts ii -iii and iv. of the schedule liberties powers privilege as restrictions and companyditions enjoyed by the lessee were set out. by part v the syndicate agreed to pay annually rs. 2629/8/8 as rent and royalty at the rate of 8 of the sale value of all manganese ore. by cl. 1 of part vii it was agreed that the lessee -shall pay the. rents and royalty reserved by this lease at the time and in the manner provided in parts v and vi and shall also pay and discharge all taxes rates assessments and impositions whatsoever being in the-nature of public demands which shall from time to time be charged assessed or imposed upon or in respect of the mines or works of the lessee or any part thereof by authority of the government of india or the government of bombay or otherwise except demands for land revenue the appellant received from the syndicate besides rents and royalty rs. 16309 in the year ending july 31 1951 and rs. 39515 in the year ending july 31 1952 being 3/16th of the amount of rent and royalty payable to the appellant in accordance with the terms of part v of the lease. the syndicate described this payment as local fund cess. the income-tax officer ward b panch mahals brought these two amounts to tax in the assessment years 1952-53 and 1953-54. in appeal to the appellate assistant companymissioner of income- tax baroda range it was maintained by the appellant that the two sums were number taxable because they represented local fund cess companylected by him on behalf of the government of bombay or the local board panch mahals and in any event because they were receipts of a casual and number-recurring nature. the appellate assistant companymissioner upheld those contentions of the appellant and directed that the said sums be excluded from the total income of the appellant. in the view of the income-tax appellate tribunal the appellant received the two sums from the syndicate under cl. 1 of part vii of the lease agreement and number - as local fund cess on behalf of the government of bombay or of the local board panch mahals and the amounts were number receipts of a casual and numberrecurring nature. the tribunal submitted a consolidated statement of the case under s. 66 2 of the income-tax act - in respect of the two years of assessment and submitted the following questions for the opinion of the high companyrt of bombay whether the sum of rs. 16309 received by the ---------- rs. 39515 assessee from the syndicate is income for- the purpose of the indian income-tax act 1922 ? if the answer to the above question is in the affirmative whether the income-receipt is exempt under section 3 vii of the act by reason of its being of a casual and numberrecurring nature? in companypliance with an order of the high companyrt the tribunal submitted a supplementary statement of. -the case observing that the lands in question which were allienated - villages between august 1 1950 and august 15 1950 had ceased to be alienated villages in companysequence of the application of the bombay taluqdari abolition act 62 of 1949 that the total amount of assessment payable in respect of these villages was rs. t222.92 and the local fund cess due in respect of the lands was rs. 270.45 np. that the total jama payable by-the appellant was rs. 504.45 np. and that the appellant had under the bombay local boards act 1923 to pay the cess as a percentage of land revenue and number of the jama. the high companyrt in- the.light of the supplementary statement of the case recorded its answer on the first question in the affirmative subject to the reservation that the amount of cess which the appellant was legally liable to pay underthe bombay local boards act was number subject. to income-tax and answered the second question in the negative. with certificate granted by the high companyrt these appeals have been preferred. the relevant statutory provisions bearing on the questions referred to by the tribunal may be summarised. by the bombay taluqdari tenure abolition act 62 of 1949 all the incidents of the taluqdari tennure attaching to the lands companyprised in the appellants estate were extinguished and all taluqdari lands were declared liable to payment of land revenue in accordance with the provisions of the bombay land revenue code 1879 or jama under an agreement or settlement recognised or declaration made under the gujarat talukdars act. under the bombay land revenue companye by s. 3 13 superior holder is defined as meaning a landholder entitled to receive rent or land revenue from other landholders whether or number he is accountable for such rent or land revenue or any part thereof to the provincial government and a tenant is defined in s. 3 14 as meaning a lessee whether holding under an instrument or under an oral agreement and includes a mortgagee of a tenants rights with possession. by s. 45 all lands whether applied to agricultural or other purposes and wherever situate are liable to pay land revenue to the government according to the rules enacted under the companye except such as may be wholly exempted under the provisions of any special companytract with the government or any law for the time being in force. under the bombay land revenue companye liability to pay land revenue is imposed upon the landholder. under the bombay local boards act 6 of 1923 the state government is authorised to levy on the conditions and in the manner described a cess at the rate of three annas on every rupee of- a every sum payable to the state government as ordinary land revenue b every sum which would have been assessable on any land as land-revenue had there been numberalienation of land revenue or c every sum which would have been assessable on any land as land-revenue had the land number been talukdari land. by s. 96 of act 6 of 1923 it is provided that the cess described in s. 93 shall be levied so far as may be in the same manner and under the same provisions of law as the land revenue. a holder of unalienated land had therefore in addition to the land revenue to pay local fund cess at the rate of three annas on the land revenue assessed on the land. in respect of alienated lands the land revenue assessed on the land may be wholly or partially remitted but the local fund cess is levied as a fraction of the land revenue. under the terms of the lease with the syndicate it was stipulated that the syndicate shall pay all taxes rates assessments and impositions of a public nature. the effect of the companyenant was that the syndicate will reimburse the appellant for local fund cess and other taxes paid by him. the local fund cess payable for the two villages demised by the appellant was according to the finding of the tribunal rs. 270 45 being 3/16th of rs. 1222.92 the amount of land revenue assessed on the lands. but the amounts paid by the syndicate for the two years in question considerably exceeded the local fund cess payable in respect of the lands. the syndicate believed that it was liable to pay to the appellant under cl. 1 of part vii of the indenture of lease cess companyputed at the. rate of three annas on a rupee of the amount of rent and royalty transactions relating to property and companytracts are of infinite variety and it is difficult to devise a precise definition of the expression income liable to tax under the income-tax act without excluding some important categories thereof. the definition of income in s. 2 6c of the income-tax act 1922 is an inclusive definition it is devised for the purpose of the act and includes diverse heads which in the numbermal companynumberation of the expression income would number be included. we have no desire in this case to enter upon the difficult task of devising an accurate definition of the expression income. the observation of the judicial companymittee in gopal saran narain singh v. companymissioner of income-tax bihar orissa 1 at p. 213 that anything which can properly be described as income is taxable under the act unless expressly exempted gives an indication of the difficulties of the problem. it is companymonground that the rent and royalty under the mining lease are income taxable under the act and an amount which is paid under a companyenant directly related to the payment of rent and royalty would in our judgment also be taxable as income. the amounts paid have the quality which is if number identical closely similar to rents and royalty. it is immaterial that if the true position were appreciated the syndicate may number have paid the amounts. the amounts have in fact been paid by the syndicate and have been received and appropriated by the appellant as if he was entitled to receive them. the difference between the amounts which the appellant received and the amounts for which he companyld under the terms of the lease claim reimbursement must therefore be regarded as income within the meaning of the indian income-tax act and unless specially exempted liable to tax. the appellant did number purport to companylect local fund cess on behalf of the state government number did the syndicate pay the amount to him as an agent of the government. the syndicate merely sought to discharge what it believed was it s companytractual obligation under the indenture of lease and in doing so it made paymentswhich exceeded the local fund cess payable by the appellant. l.r. 62 i.a. 207. we are unable to hold that the syndicate was an inferior holder under the appelant.the appellant was the holder of the land and he had granted a lease in respect of the land to the syndicate and our attention has number been invited to any provision of the bombay land revenue companye. 1879 which imposes liability to pay local fund cess upon the lessee who holds land under a lease from the landholder. liability to pay land revenue and the local fund cess is imposed -by the bombay land revenue companye upon the appellant. under the terms of part vii cl. 1 of the indenture of lease the syndicate had agreed to pay to the appellant the amount of land revenue and local fund cess which the latter may have to pay to the government. but by collecting the amount from the syndicate under the terms of his companytract the appellant was number companysisted an gent of the government for recovering either the land revenue or local fund cess which the latter may have to pay to the government. but by companylecting the amount from the syndicate under the terms of his companytract the appellant was number constituted an agent of the government for recovering either the land revenue or local fund cess. there is numberhing in the income-tax act which prevents the revenue authorities from determining the quantum of the amount which is payable by the appellant as local fund cess when that question properly arises before them in the companyrse of proceedings for assessment. the income tax officer is within the limits assigned to him under the act a tribunal of exclusive jurisdiction for the purpose of assessment of income tax. he has under act to decide whether a particular receipt is income and it is number predicated that he must make some person or body other than the assessee who may be e companycerned with that receipt as a party to preceding before. he decides that question.- as between the state and the assessee it. is his function alone to determine whether the receipt is income and is taxable. - the determination by the income-tax officer may be questioned in proceedings before superior tribunals which are permitted by the actbut the income-tax officer cannumber be prevented from determining a question which properly arises before him for the purpose of assessment of tax merely because his determination may number bind some other body or person qua the assessee. it is maintained by companynsel for the appellant that in the manual of revenue accounts issued under the authority of the government of bombay it is recorded that the local fund in respect of land held under a mining lease is a fraction of the aggregate amount of rent and royalties under the lease. this plea is based upon a companyplete misconception of what is stated in the manual of revenue accounts 1951. under the head miscellaneous land revenue entries to be made in the tharavband in respect of miscellaneous fluctuating revenue. the manual after setting out heads of fixed revenue proceeds to set out the following heads of fluctuating revenue carrying local fund and free of local fund. under the head fluctuating revenue carrying local fund are number-agricultural rent or revenue from agriculturally assessed or unassessed lands for back years for broken periods or short periods less than five years and fees for brick kilns and lime kilns erected on government waste lands 2 lump companymutation payments number being companymutations in perpetuity of land revenue for building or any-other number- agricultural purpose including assessment for unauthorised occupation and fine when levied for number-agricultural uses with permission but number including fines levied as penalties and 2 a rent and royalties under mining lease usually companylected at t . but these are mere instructions to the village officers relating to the heads of revenue which are to pass through the tharavband. by the instructions it is number sought to be companyveyed that local fund cess in respect of numberagricultural incomes subject to local fund such as rent and royalties is to be levied at a rate different from the rate prescribed by the statute. the bombay local boards act 1923 expressly provides that local fund cess is to be levied on land revenue whether the land is used for purposes agricultural or number-agricultural at the prescribed rate and by executive instructions the act cannumber be modified and has number been modified. it was said that the syndicate may seek to recover from the appellant the excess amounts paid by it-towards local fund cess. we were told at the bar that after the proceeding for assessment in these appeals reached the high companyrt the syndicate has filed a suit in the civil companyrt against the appellant to recover the amounts paid by it. we are number in this case companycerned with the merits of that claim. the appellant has received certain amount under a companytract with the syndicate and if that amount was income the fact that the person who paid it may claim refund will number deprive it of its character of income in the year in which it was received. the companytention that this income was of a casual and number- recurring nature was abandoned before the tribunal.

test

1965_359.txt

civil appellate jurisdiction civil appeal number725 of 1965. appeal by special leave from the judgment and order dated february 3 1964 of the allahabad-high companyrt in f.a.f.o. number 122 of 1961. bishan narain and harbans singh for the appellant. rameshwar nath for the respondent. the judgment of the companyrt was delivered by shah j. between august 1 1953 and match 28 1955 the appellant transported 521 truck-loads of stone-grit and other materials from delhi to muradnagar in execution of a contract to supply goods for use by the government of india. the trucks of the appellant had to pass through the toll barrier of the municipality of ghaziabad and toll at the rate of rs. 8 per truck was companylected from the appellant. the appellant obtained a certificate from the garrison engineer m.e.s. meerut on june 10 1955 that the goods transported by the appellant were meant for government work and had become the property of the government. the appellant then applied on june 14 1955 to the municipality of ghaziabad for refund of the amount of toll paid pursuant to the exemption granted by government order under s. 157 3 of the u.p. municipalities act 1916 and the municipality having declined to refund the amount the appellant served the statutory numberice and companymenced an action against the municipality in the companyrt of the munsif at ghaziabad on february 111956 for a decree for rs. 4300. the trial court decreed the claim. in appeal the iind civil judge meerut upheld the claim of. the appellant only for the amounts paid after december 13 1954. the high companyrt of allahabad affirmed the order of the civil judge. the appellant has appealed to this companyrt. the relevant provisions of the act the rules and the orders issued by the government may first be numbericed. under s. 128 of them u.p. municipalities act 1916 the municipal board is subject to any general rules or special orders of the state government in that behalf companypetent to impose in the whole or part of a municipality the taxes specified in that section and one of the taxes specified is a toll on vehicles and other companyveyances animals and laden companylies entering the municipality. unders. 157 3 of the act the state government may by order exempt from the payment of a tax or any portion of a tax imposed under the act any person or class of persons or any property or description of property. pursuant thereto the government of u.p. issued an order on april 15 1939 which insofar as it is material provides the provincial government arepleased to issue an order under section 157 3 of the u.p. municipalities act 1916 exempting those goods which are the property of government or which become so sub- sequent to their entry within a municipality from the payment of terminal tax or toll. the procedure to be followed in giving effect to the exemption sanctioned above shall be as follows - when goods are imported by a private person for supply to government in fulfillment of a contract or otherwise intended for the use of government a written intimation to that effect shall be given to the officer company- lecting terminal tax terminal toll who would immediately forward it to the terminal tax superintendent. the tax toll on goods shall then be paid but if subsequently they actually become the property of government it shall be refunded on a certificate of the officer authorised to receive the goods on behalf of government the state government is authorized by s. 296 to make rules consistent with the act in respect amongst others of matters described in s. 157 generally for the guidance of a board or any government officer in any matter companynected with the carrying out of the provisions of this or any other enactment -relating to municipalities. the state government framed rules relating to assessment and collection of toll in the ghaziabad municipality. rules i and 5 are material numberperson shall bring within the limits of the ghaziabad municipality any laden vehicle or other laden companyveyances or laden animal in respect of which a toll is leviable until the toll due in respect thereof has been paid to such persons and at such. barriers or such other places as the board may from time to time appoint. explanation.- . . . . . . . . when goods are imported by a private person for supply to government in fulfillment of a companytract or otherwise intended for the use of government a written intimation to the effect shall be given to the officer company- lecting that tax who would immediately forward it to the toll tax superintendent. the tax on goods shall then be paid but if subsequently they actually become the property of government it shall be refunded on a certificate of the officer authorised to receive the goods on behalf of government. the application for refund of the tax paid shall be made within fifteen days of the date of the certificate referred to above and within six months of the date or dates of payment of the tax and shall be accompanied. by the original toll receipts. numbere --. . . . . the civil judge was of the opinion that toll is immediately payable in all cases but where goods are for the use of the government it becomes refundable when the property becomes the property of the government and a certificate is issued by the officer companycerned to that effect. he further held that the application for refund must be made within fifteen days of the date- of the certi- ficate and within six months of the date of payment -and an application for refund within six months from the date of actual payment is a companydition precedent to the refund of the toll and .even though a certificate by the prescribed authority is issued beyond six months of actual payment. the high companyrt agreed with that view. under tile order issued by the government under s. 157 3 of the act the amount of toll paid by the appellant became refundable to him. the appellant was therefore entitled to claim against the municipality that the amount be repaid. the right to enforce that claim was a right of a civil nature and companyld be enforced in a civil suit unless the suit was barred by the law of limitation or the right was by reason of some statutory provision extinguished .or the jurisdiction of the civil companyrt was barred expressly or by necessary implication or that the enforcement of the right depended upon the fulfillment of a companydition precedent or upon existence of some fact companylateral to the actual matter which the companyrt had to try and which was number shown to exist. it was held by the civil judge and rightly that the claim was number barred by s. 326 .of the u.p. municipalities act 1916 because the suit was number in respect of any act done or purported to have been done in the official capacity. there is numberhing in the order issued by the state government or any other provision of the law that on the expiry of any particular period or on the happening of a companytingency the claim stands extinguished. the jurisdiction of the civil court to entertain a suit for refund of tax levied under s. 128 of the act is also -number barred by express enactment or by necessary implication arising out. of the provisions of ss. 153 c 160 162 and 164 .of the act. section 153 c merely provides for framing of the rules regulating the system on which refunds shall be allowed and paid. section 160 makes provisions for appeals relating to taxation and the authorities to which the right to appeal may be exer- cised. section 162 provides for a reference to the high court .where a question of liability to or the principle of assessment of a tax arises on which the officer hearing the appeal entertains reasonable doubt. section 164 bars the jurisdiction of civil and criminal companyrts in matters of valuation or assessment or about the liability of a person to be assessed or taxed. but the dispute in this case does number relate to valuation or assessment or liability to be taxed or assessed. when the goods in respect of which toll was paid became the property of the government the toll paid by the appellant became refundable and the jurisdiction of the civil companyrt to entertain a claim for refund of toll arising by virtue of an order under s. 157 3 was number excluded. it was number companytended either in the trial companyrt the first appellate companyrt or even the high companyrt that the jurisdiction of the civil companyrt to entertain a suit was excluded. the first appellate companyrt has in fact granted refund of a part of the amount paid and the right of the civil court to direct refund in appropriate cases has number been challenged in this companyrt. but companynsel for the respondent companytended that the rules framed by the government regarding the procedure companystituted a companydition precedent to the exercise of the right to claim refund and recourse to the civil companyrt being companyditionally strict companypliance with the procedure prescribed the civil court was incompetent to decree the suit unless the condition was fulfilled. we are unable to agree with that contention. the rules framed by the government merely set up the procedure to be followed -in preferring an application to the municipality for obtaining refund of the tax paid. the municipality is under a statutory obligation once the procedure followed is fulfilled to grant refund of the toll. the application for refund of the toll must be made within fifteen days from the date of the issue of the certificate and within six months from the date of payment of the toll. it has to the accompanied by the original receipts. if these procedural requirements are number fulfilled the municipality may decline to refund the toll and relegate the claimant to a suit. it would then be open to the party claiming a refund to seek the assistance of the court and to prove by evidence which is in law admissible that the goods transported by him fell within the order issued under s. 157 3 of the act. the rules framed by the government relating to the procedure to be followed in giving effect to the exemptions on april 15 1939 do number purport to bar the jurisdiction of the civil companyrt if the procedure is number followed.

test

1968_247.txt

bhargava j. a numberice was issued by the appellant the income-tax officer alleppey to the respondent under section 34 of the income- tax act hereinafter referred to as the act in respect of the income for the assessment year 1952-53 on march 27 1961. the respondent challenged the validity of that numberice by a petition under article 226 of the companystitution before the kerala high companyrt. the facts and grounds on which the numberice was challenged were given in an affidavit in support of the petition and it appears from that affidavit that the numberice was challenged on two grounds. the first ground was that there were numberreasons whatever to enable the appellant to believe that any income of the respondent for the year in question had escaped assessment or had been under-assessed. the second ground was that there were numberbona fides whatever in the issue of that numberice and that since there was numberreason to enable the appellant to issue the numberice its issue was without the authority of law and lacked jurisdiction. it was averred that the numberice had been issued arbitrarily in the vain hope that the department might at a later stage companye across income which may have escaped assessment. in this companynection reference was made to an earlier order of the kerala high companyrt by which a numberice issued by the appellant under section 37 of the act calling upon the respondent to produce the books of accounts and other records of his branch business at bombay was quashed and it was urged that these proceedings were taken for the purpose of getting over the effect of the decision of the high companyrt quashing that numberice. in reply to this affidavit two affidavits were filed by the appellant in which the averment made in the affidavit on behalf of the respondent were companytroverted. the petition was heard by a learned single judge who allowed it but on a ground different from the two grounds taken in the petition. the numberice was quashed on the ground that the appellant though he was satisfied that there was escape of income from assessment had number arrived at the belief that that escape of income was by reason of the omission or failure on the part of the respondent to disclose fully and truly all material facts necessary for the assessment. the appellant appealed to a division bench but unsuccessfully. this appeal by special leave is directed against that decision of the division bench upholding the order of the single judge allowing the writ petition filed by the respondent. the main point urged on behalf of the appellant in this appeal before us is that the high companyrt wrongly exercised its jurisdiction in quashing the numberice issued by the appellant on a ground which was number raised by the respondent in his petition under article 226 of the companystitution. this submission has to be accepted. learned companynsel appearing for the respondent was unable to show any averment in the affidavit filed on behalf of the respondent where such a ground might have been raised. the respondent in that affidavit clearly understood that the numberice issued by the appellant was under clause a of sub-section 1 of section 34 of the act and yet companyfined the challenge to the ground that the appellant had numberreasons whatever to believe that the income of the respondent had escaped assessment or had been under-assessed. it was at numberstage stated that the appellant had numberreason to believe that the escape of income from assessment or the under-assessment of income was the result of any failure or omission on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for his assessment. since there were numbersuch averments in the petition or the affidavit in support of it the appellant also did number in the companynter-affidavits make any specific averment that he had reasons to believe that the escarpment or under-assessment of income was occasioned by the failure omission on the part of the respondent to make the return or to disclose fully and truly all necessary material facts. in spite of this circumstance that neither party had in its affidavit made averment relating to this question of fact the high companyrt proceeded to infer from the affidavits that the appellant had number entertained any such belief and allowed the writ petition. on the face of it there was numberjustification for the high companyrt to set up such a new case on behalf of the respondent and to decide it in the absence of any averments of facts by the respondent to justify going into that question. on this ground alone the order made by the high companyrt must be set aside. we may add that in view of the circumstance that neither party had occasion to put before the high companyrt the facts on this question we called upon learned companynsel for the appellant to produce before us companyies of the relevant file of the appellant which led to the issue of the numberice in question. we have seen the report submitted by the appellant to the companymissioner of income-tax and it appears to us that that report taken together with his letter asking for approval of the companymissioner for issue of numberice under section 34 1 a which was accompanied by information in proforma b indicates that the appellant did have reasons to believe that the income of the respondent had been under-assessed because of reasons mentioned in section 34 1 a of the act. we are thus satisfied that the numberice issued under section 34 1 a was number at all invalid. we may also in this companynection mention that the allegation of the respondent that the appellant had numberreason to believe that the income of the respondent had escaped assessment or had been under-assessed was in clear words companytroverted and even the high companyrt did number hold that this denial on behalf of the appellant was number companyrect. learned companynsel appearing for the respondent in these circumstances tried to support the judgment of the high companyrt on an alternative ground that the appellant had number companyplied with the requirement of clause iii of the first proviso to section 34 1 as he had number recorded his reasons for issuing the numberice. this is again a point which was number only number taken in the writ petition but was number even urged before the high companyrt at the two stages when the case was heard by that companyrt. further facts necessary for deciding this question were number brought out by the respondent in his writ petition or the affidavit filed in support of it. companysequently this new ground cannumber be entertained by this companyrt at this stage and must be rejected.

test

1966_128.txt

civil appellate jurisdiction cr. a. number 209 of 1969. appeal by special leave from the judgment and order dated august 14 1969 of the bombay high companyrt in criminal appeal number 552 of 1968. r. pardivala d. n. mishra and j. b. dadachanji for the appellant. k. dholakia and b. d. sharma for the respondent. the judgment of the companyrt was delivered by dua j.-this is an appeal by special leave under art. 136 of the companystitution from the judgment of the bombay high companyrt upholding on appeal the appellants companyviction by the presidency magistrate 12th companyrt bandra bombay under s. 304a i.p.c. and sentence of rigorous imprisonment for 18 months and fine of rs. 1500/- in default further rigorous imprisonment for four months. according to the presecution on july 2 1967 at about 4.15 p.m. the appellant was driving a b.r.s.t. motor bus bearing number bhq 1019 along the southern side of tilak road from east to west. when the bus suddenly mounted the southern footpath and dashed against an electric pole felling it fell down the bus stopped. a person who was near the electric pole was knumberked down dead as a result of the electric pole falling on him. his right hand was severed his head crushed with the brain matter sticking on to the wall near the electric pole. it was a double decker bus. one harbansingh ramsingh called bhaiya also sustained injuries as a result of having been hit by the bus. according to the appellant he was driving the bus at a mo- derate speed from east to west along the southern side of tilak road when suddenly a bhaiya in his attempt to cross the road came near the right wheel of the bus. he was numbericed by the appellant when he was about 3 ft. away from the front right portion of the bus. in order to avoid him the appellant applied his brakes and took a turn to the left thereby mounting the southern footpath and it was in these circumstances that he struck against the electric pole. the accident according to his plea occurred because of circumstances beyond his companytrol. the presidency magistrate did number believe the defence version and observed according to the accused he was going at a speed as if he was approaching a bus stop. if that were so and if harbansing was crossing the road from numberth to south as alleged by the defence and if the accused applied his brakes after seeing the bhaiya then it is hard to see how the bus did number stop there and then. the bus however went on to the southern footpath and dashed against the electric pole with such a force that it was uprooted. the fact that the accused was number able to halt the bus there and then show that the bus was in good speed. the accused companyld number companytrol its speed in time. if therefore hold that the prosecution has established its case against the accused. on this reasoning finding the accused guilty the trial court companyvicted and sentenced him as already numbericed. it may be pointed out that the accused was also charged under ss. 273 and 338 i.p.c. but the companyrt did number companysider it proper to impose separate sentences under these sections. on appeal to the high companyrt the learned chief justice after considering the arguments urged before him observed that in the circumstances of the case it was impossible that harbansing companyld companye within 3 ft. of the bus in question before the accused first saw him. even after the accused had realised the danger be companyld have according to the learned chief justice avoided climbing on to the footpath and injuring the pedestrians there after knumberking down the electric pole had it number been for the speed of the bus which prevented him from companytrolling the vehicle. the learned chief justice companysidered it unimaginable that the electric pole would be companypletely uprooted unless the bus was in companysiderable speed when it hit the pole the heavy nature of the vehicle numberwithstanding. this by itself the high companyrt observed was one of the factors which establish the rashness and negligence of the accused. the high companyrt opined that it must have taken quite some time for the bhaiya to cross 3 5 ft. of the road the road was stated to be 35 ft. wide even though he was running. if therefore the man stated running from the numberthern end of the road the vehicle must have been at least 50 or 60 ft. away from the point of impact. the driver of the bus had he been reasonably careful companyld have brought the bus to a companyplete stop in a distance of about 50 or 60 ft. and avoided the companylusion even assuming the bhaiya was running fast. this is anumberher factor which according to the learned chief justice reflected the negligence on the part of the accused person. the defence witness k. g. joshi deposed that the accused had number blown any horn. this version also in the opinion of the high companyrt lent some support to the negligence on the part of the accused. the high companyrt in the end observed though numberdoubt the burden of proof in a criminal trial is upon the prosecution the facts pertaining to the accident in the present case are so eloquent and glaring that they speak for themselves. even assuming that harbansing came running from the numberth to the south across the road as the accused says he was in a position to have seen him start running and to have brought his bus under control within sufficient time to avoid the accident but he was in a hurry to reach his destination within time and so the accused continued to run his bus at the same speed full well knumbering that if the pedestrain continued to cross the road he would do so at his peril and therefore expecting him to stop. it is that attitude of mind which has led to this accident and amounts to rashness or negligence on the part of the accused. even taking into account the explanation which the accused has given i am unable to see how the accused cannumber be held to have driven rashly or negligently. the high companyrt was on the whole satisfied upon the evidence that the companyviction was justified. in this companyrt shri pardiwala has in an elaborate argument taken us through the entire record of the case and has submitted that in a case of rash and negligent driving the prosecution has to prove by evidence beyond reasonable doubt that the accused was rash and negligent and the mere fact that the accident has taken place in a manner which does number seem to be numbermal is number by itself sufficient to cast on the accused person the onus of establishing his innumberence. in cases of road accidents by fast moving vehicles it is ordinarily difficult to find witnesses who would be in a position to affirm positively the sequence of vital vents during the few moments immediately preceding the actual accident from which its true cause can be ascertained. when accidents take place on the road people using the road or who may happen to be in close vicinity would numbermally be busy in their own pre-occupations and in the numbermal course their attention would be attracted only by the numberse or the disturbance caused by the actual impact resulting from the accident itself. it is only then that they would look towards the direction of the numberse and see what had happened. it is seldom-and it is only a matter of coincidence-that a person may already be looking in the direction of the accident and may for that reason be in a position to see and later describe the sequence of events in which the accident occurred. at times it may also happen that after casually witnessing the occurrence those persons may feel disinclined to take any further interest in the matter whatever be the reason for this disinclination. if however they do feel interested in going to the spot in their curiosity to knumber something more then what they may happen to see there would lead them to form some opinion or impression as to what in all likelihood must have led to the accident. evidence of such persons therefore requires close scrutiny for finding out what they actually saw and what may be the result of their imaginative inference. apart from the eye-witnesses the only person who can be considered to be truly capable of satisfactorily explaining as to the circumstances leading to accidents like the present is the driver himself or in certain circumstances to some extent the person who is injured. in the present case the person who died in the accident is obviously number available for giving evidence. the bhaiya harbansing has also number been produced as a witness. indeed failure to produce him in this case has been the principal ground of attack by shri pardiwala and he has questioned the bona fides and the fairness of the prosecution as also the trustworthiness of the version given by the other witnesses. six witnesses have been produced by the prosecution in sup- port of its case. we are going into that evidence which is numbermally number done in appeals under art. 136 of the constitution because in this case it was urged by shri pardiwala that there is absolutely numberevidence showing rashness or negligence onthe part of the appellant and that the evidence with regard tothe exact position in which the bus was actually found vis-a-visthe dead body soon after the accident is also number trustworthy.in deed according to the learned companynsel both the trial companyrt and the high companyrt have been influenced more by the tragic consequences resulting from the accident than the evidence on the record. w. 5 kisan appa kasbe is the man who is said to have made the report to the police about this accident. he appeared in companyrt on march 20 1968 and stated that on july 2 1967 at 3.45 p.m. while walking along the numberthern footpath from east to west towards kodabad circle he heard numberse of impact of a vehicle and turning that side he saw a b.e.s.t. bus stationary on the southern footpath and a bent electric pole. after proceeding in that direction he saw a dead body under electric pole whose hand was broken and was lying near the pole. his skull was also broken and brain matter was visible. the front portion of the bus and the wind screen were damaged with splinters on the footpath. he saw four injured persons. those injured persons were taken to the hospital in a single decker bus. he was companytacted by the police at 8.30 p.m. on the same day at his residence where his statement was recorded. this statement has been described by m. s. patil s.i. p.w. 6 as first information report. quite plainly that statement companyld number be the i.r. for the simple reason that investigation had admittedly started on receipt of information at 4.40p.m. as sworn by p.w. 6. the statement made by p.w. 5 at 8.30 p.m. at his residence would accordingly fall under s. 161 cr. c. and companyld only be utilised as provided by s. 162 cr. c. for companytradicting him. of the four injured persons mentioned by p.w. 5 three have appeared in companyrt namely shriman yadav p.w. 2 mohan rama p.w. 3 and bhondibai babu p.w. 4 . p.w. 2 merely says that while he and mohan rama p.w. 3 were walking along the southern footpath of tilak road from east to west at 4.30 p.m. suddenly he was thrown down fracturing his left hand and rendering him un- conscious. he has number said anything more. mohan rama p.w. 3 has deposed that he and shriman yadav were walking along the southern footpath when a b.e.s.t. bus came from behind and struck shriman yadav thereby throwing him down. mohan rama also fell down as a result of shrimans impact. mohan rama then took shriman who was unconscious to the hospital where he was admitted as an indoor patient. mohan rama was however treated and allowed to go home. mohan rama had number seen the bus mounting the footpath. he only saw the electric pole falling on the deceased. according to him the front left wheel of the bus was on the footpath and the front right wheel was touching its kerb. the electric pole was number uprooted but was cut at the base. quite obviously the evidence of these two witnesses does number throw any helpful light on the precise circumstances in which the bus happened to mount the footpath. dhondibai babu p.w. 4 has stated that he was walking along the southern footpath east to west at about 4 p.m. when suddenly a b.e.s.t. bus knumberked him down unconscious. according to him the left front portion of the bus struck him. he has said numberhing more. if he became unconscious it is doubtful if he companyld reliably state that the left front portion of the bus had struck mm. the statement of kisan appa kasbe p.w. 5 has already been adverted to. but he too as one would numbermally expect a witness to such accidents only looked in the direction of the accident when his attention was attracted as a result of numberse of the impact of the bus in question. there is thus numberevidence as to what companypelled the driver to turn left which caused the bus to mount the footpath and strike against the electric pole thereby causing injuries to the several persons one of whom died at the spot. manumberar sadashiv s.i. appearing as p.w. 6 has deposed that at about 4.40 p.m. on july 2 1967 information was received from the companytrol room about the accident and that he then went to the scene of the occurrence. he saw a double decker bus number 03 stationary on the southern footpath with the front portion of the bus damaged and the wind screen broken. he saw one dead body lying below the electric pole with one hand severed lying nearby and also broken skull with brain substance visible and lying on the road. he drew up a panchanama and also a rough sketch ex. pb he sent the dead body. to the city morgue and arrested the accused and sent him to the police station. he then companytacted the four injured persons in the hospital and the companyplainant meaning thereby p.w. 5 at his residence as late as 8.30 p.m. on the same day and recorded what he describes to be the first information report. harbansing one of the four injured persons had according to this witness left bombay the same night with the result that his statement companyld number be recorded. in cross-examination he has explained that harbansing was reluctant to make any statement because he wanted to go to his native place where he was stated to be on the date of the examination of p.w. 6 in companyrt which was march 20 1968. p.w. 1 is the doctor who held the postmortem examination on the dead body. his evidence is number material for our purpose. this is all the prosecution evidence led in the case. we cannumber help expressing our surprise and regret at the manner in which the investigation has been conducted. the investigating officer unfortunately did number care to have the photographs taken of the position of the vehicle the electric pole and the persons injured and dead as a result of the accident. he did number care even to take the measurement of the height of the kerb which in our view was a very relevant factor. number did he care to get the vehicle examined by a mechanic for the purpose of ascertaining if its mechanism was in order and particularly if its brakes were working properly. the rough sketch prepared by him is a highly unsatisfactory document as it only gives us an extremely rough idea of the position this is of little assistance in determining the question of the appellants guilt in the criminal trial. kanu girdharlal joshi an ll.b. student appeared as d.w. 1. he claims to have seen the bus and the bhaiya immediately prior to the actual accident. the bhaiya was crossing the road running. the witness on seeing the bhaiya shouted to him to stop but the bhaiya continued running. the bus then took a turn to its left mounting the footpath and causing the accident in question. the learned presidency magistrate who tried and convicted the appellant and the high companyrt which heard and dismissed his appeal have both held the appellant guilty almost exclusively on the nature of the accident and on the appellants inability to stop the bus on seeing the bhaiya who was attempting to cross the road. both these companyrts disbelieved d.w. 1. they passed strictures against him in very strong language and cast aspersions even on his knumberledge of law. shri pardiwala companyplained that the trial court had misread the prosecution evidence and the high court was influenced by a number of assumptions which cannumber be sustained on the material on the record some of those assumptions being even companytradictory and this has resulted in grave miscarriage of justice. the companydemnation of d.w. 1 g. joshi by the companyrts below in strong language is also unjustified and unfair to the witness companytended the counsel. stress was also laid by the appellants learned counsel on the opinion of the high companyrt emphasising the utterly perfunctory character of the investigation and the false statements made by s. 1. patil p.w. 6 the investigating officer. our attention was drawn to the following observations in the judgment of the high companyrt - tilak road at that hour of the day is more than numbermally crowded. in that crowded locality there are shops on both sides and hundreds of people move about on the footpaths. there were also several passengers in the bus and the bus companyductor. yet this sub-inspector has number cared to make any enquiry to find out from anyone of the persons round about from anyone of the passengers or any one of the shopkeepers round about how the accident occurred with the result that the prosecution has been able to give evidence only of three persons who were injured and who in their very statement say numberhing about how the accident took place and of kisan appa kasbe-. even kisan appa kasbes attention it appears was attracted towards the incident by the sound of the impact of the bus with the pole. numberwithstanding this statement of each one of these witnesses it is surprising that the sub-inspector should number have pursued further investigation but should have put up the case upon such evidence. what is still worse is that one important person whose evidence was available and companyld have been examined was number examined. he is the injured person harbansing. he was removed to the k.e.m. hospital and was under treatment there for a long time. this is established upon the evidence of dr. kole p.w. he had a fracture of the jaw bone and six other injuries and being admitted to the hospital on 2nd july 1967 was discharged from the. hospital on the 23rd august 1967 according to the evidence of dr. kole sub- inspector patil was asked why harbansings statement was number recorded and this is what he has stated harbansing ramnarayan one of the 4 injured left bombay on the same night. his statement therefore would number be recorded. in the face of the evidence of dr. kole it is clear that this evidence of sub-inspector patil is utterly false because harbansing was in numbercondition to move. he was in hospital and remained in the hospital till 23rd august 1967 for almost a month and 26 days after the accident and yet it is surprising to see this responsible police officer saying that he could number record his statement because he left bombay on the same night. one begins to wonder whether this sub-inspector made any enquiries at all about the whereabouts of harbansing. in his cross-examination he has further given a different reason. he has stated harbansing was reluctant to make any statement as he wanted to go to his native place. he is at his native place. even this reason does number appear to me a satisfactory reason at all. even if he had gone away to his native place harbansing companyld well have been companytacted and his statement recorded. shri pardiwala submitted that on this observation alone the prosecution case should have failed. we find there is. companysiderable force in this submission. the high companyrt has also observed that numberattempt had at all been made to ascertain the probable speed of the bus by measuring the tyre marks on the road though according to the witnesses the brakes were jammed and there was a screaming sound as the bus came to a halt adding that even the elementary precaution of having the bus tested for the efficiency of its brakes was number taken. though according to shri pardiwala the observation of the high companyrt that the brakes were jammed and there was a screaming sound was number supported by evidence in our opinion assuming this observation to be supported by evidence it only serves to fortify the view of the high companyrt that the investigation has been companyducted in a very casual and superficial manner. the investigating officer seems to have acted without the requisite sense of responsibility essential for fair and just police investigation into serious accidents like the present with the result that important evidence which was available and should easily have been forthcoming has number been brought before the companyrt for wholly inadequate-if number flimsy-- reasons. examination of the marks of wheels on the road would have been very useful in appreciating other evidence. what is more surprising is that even evidence on the state of the traffic on the road at the relevant time and on the height of the kerb has number been produced by the prosecution. this evidence would have clearly helped the companyrt in having a clearer picture of the position and in more satisfactorily appreciating the circumstances in which the accident occurred. if there was meagre traffic then there was a greater likelihood of the appellant being able to see the running bhaiya more clearly whereas if traffic was heavy then there was a chance of the bhaiya emerging from behind some vehicle unnumbericed by the appellant. similarly the height of the kerb was a relevant factor to be companysidered in forming an opinion about the likely speed of the bus. the prosecution failed to appreciate the importance of these aspects and did number care to adduce any evidence on them. this reflects a high degree of inefficiency on the part of the investigating agency. the high companyrt has however observed perhaps on the basis of personal knumberledge of the learned chief justice who decided the appeal in the high court that the road at that time was more than numbermally crowded. if that was so then it was a question for company- sideration as to from how much distance was the appellant able to see the bhaiya running in his anxiety to cross the road. the high companyrt did number advert to this aspect at all. indeed at one place the high companyrt has observed that the appellant would have numbericed the bhaiya when he was running to cross the road. this companyld be possible only on the assumption that the traffic on the road was number very heavy and- it did number block the appellants vision. the high court has also observed that this was number the first time when an investigation in a case where the public motor vehicle belonging to a public body was involved in an accident had been utterly perfunctory. the fact that this was number the first occasion of inefficient and perfunctory investigation in such cases companyld number in our view serve as an argument for placing premium on the inefficiency of the investigating agency and for companyvicting the accused which companyld only be done if the evidence had established his guilt beyond reasonable doubt. numberdoubt when an accident like the present takes place one naturally expects the driver companycerned to explain the circum- stances in which he was obliged to take the bus on to the footpath and to strike against the electric pole with such force thereby killing one human being and injuring several others. the satisfactory nature of the explanation to absolve him of his criminal liability for the accident has in such circumstances to be appraised in the light of the entire evidence on the record. the onus of companyrse remains on the prosecution and does number shift to the accused. the evidence of the bus however having mounted on to the footpath which in the numbermal companyrse does number happen is admissible and has to be duly taken into account in understanding and evaluating the entire evidence led in the case and in appraising the value of the explanation given by the accused for his companypulsion which resulted in the accident. the appellants explanation even though number companyclusive does in the absence of the testimony of the bhaiya and of at least some out of the passengers said to have been travelling in the bus who might have been able to throw some helpful light on the relevant circumstances seem to leave fair scope for reasonable doubt about his guilt. whether the failure on the part of the investigating agency to companytact persons who would have given useful material evidence relevant for finding the truth was due to inefficiency or was deliberate having been inspired by some other motive is number for us to speculate on the existing record. suffice it to say that if it appears as it does in this case that material evidence has number been companylected by the investigating agency for reasons which are wholly unconvincing and the evidence actually produced leaves a serious lacuna in bringing his guilt home to the appellant then merely because the nature of the accident prima facie requires ail explanation from the driver would number be sufficient to sustain his companyviction if the truth of his explanation which is number liable to rejection outright could have been appropriately judged if the evidence left out by the prosecution had been produced. the learned chief justice on appeal did advert to the possibility of recording bhaiyas evidence at that stage. the idea was however dropped because the appellants companynsel did number agree to examine him. in our view this was hardly a proper approach in this case. though we feel that in august 1969 two years after the occurrence of july 2 1967 the statement of harbansing bhaiya who had never been interrogated by the investigating agency was unlikely to be very helpful nevertheless if the high companyrt felt that his evidence was necessary in the interest of justice then the witness companyld and should have been examined as a companyrt witness the defence objection numberwithstanding parties companyld number companytrol the companyrts discretion to have before it further evidence if it was companysidered necessary for finding the truth for promoting the cause of justice. justice would fail number only by unjust companyviction of the innumberent but also by acquittal of the guilty for unjustified failure to produce available evidence. on the existing record we find the evidence to be inadequate and unsafe for companyvicting the appellant. this however is entirely due to the faulty and inefficient investigation for which numberjustification is forthcoming. on the view that we have taken it is unnecessary to refer to the decisions cited at the bar on the question of onus of proof in criminal cases generally. this appeal is of companyrse before us under art. 136 of the constitution but the judgments of the trial companyrt and of the high companyrt proceed principally on assumptions number fully supportable on the material on the record. that is why we have companysidered it just fair and proper to examine the evidence ourselves. we find there is a serious lacuna in the case wholly due to the inefficient and perfunctory investigation by the investigating agency. before companycluding we cannumber help observing that the adverse remarks made against k. g. joshi p.w. 1 are hardly fair or just.

test

1972_379.txt

criminal appellate jurisdiction criminal appeal number 605 of 1981. appeal by special leave from the judgment and order dated the 8th april 1980 of the ahmedabad high companyrt in criminal appeal number 218 of 1978 with crl. appeal number 603 of 1978. c. bhandare t. sridharan mrs. s. bhandare and miss k. sauhantia for the appellant. miss maya rao for respondent number 1. l. jain and r.n. poddar for respondent number 2. the judgment of the companyrt was delivered by misra j. in this appeal by special leave the narrow question that this companyrt proposes to examine is whether the high companyrt was right in holding that churning of the curd of which a sample was taken if done with hand was done in a proper manner so as to make the sample homogeneous and representative. the few relevant facts are that shri g.a. parikh food inspector attached to baroda municipal companyporation visited the shop of the respondent number1 accused madanlal ramlal sharma on september 4 1976 around 7.20 a.m. he purchased curd from a companytainer having 2-1/2 kg of curd for the purpose of analysis. there was a board hanging on the outer side of the companytainer that the curd is prepared from companys milk. the food inspector purchased 600 grams of curd and after churning the curd he divided it in three equal parts and prepared three separate samples each kept in a separate bottle. after various formalities including obtaining the sanction for prosecuting the respondent-accused. a companyplaint was filed in the companyrt of the learned judicial magistrate first class municipality at baroda. in the companyrse of trial at the request of the accused the third sample was sent to the central food laboratory for analysis and report. it may also be mentioned that the food inspector himself had sent one sample to the public analyst attached to the laboratory set up by the municipal companyporation for analysis of article of food. the report of the public analyst shows that the sample of curd companytained 3 milk fat and 11.7 milk solid number-fat. on the other hand the report of the central food laboratory calcutta ex. 15 shows that milk fat was 2.95 and milk solid number-fat 10.8. it was opined that the sample of curd was adulterated. the learned magistrate held that the curd in question was prepared out of companys milk that it did number companyform to the prescribed standard and reached the conclusion that the prosecution case was established beyond a shadow of reasonable doubt. companysequently the learned magistrate companyvicted the first respondent-accused for an offence under section 7 1 read with section 16 1 a 1 of the prevention of food adulteration act 1954 and sentenced him to suffer rigorous imprisonment for four months and to pay fine of rs. 500 in default to suffer further rigorous imprisonment for two months. the first respondent-accused preferred criminal appeal number46 of 1977 in the companyrt of sessions at baroda. the learned additional sessions judge who heard the appeal inter alia held that proper churning of the sample having number been done the sample cannumber be said to be homogeneous and representative of the curd in question so as to arrive at a proper companyclusion on analysis of the sample and on the short ground acquitted the accused. two appeals were preferred against the judgment of the learned sessions judge. criminal appeal number 218 of 1978 was preferred by the state of gujarat and criminal appeal number 603 of 1978 was preferred by the companyplainant food inspector. a division bench of the gujarat high companyrt disposed of both the appeals by a companymon judgment. the high companyrt affirmed the acquittal observing that the companyclusion is inescapable that the prosecution has failed to prove that the churning was done in a proper manner so as to make the entire curd one and all the samples would be identical in themselves. hence this appeal by special leave by the companyplainant food inspector. the sample of curd was taken on september 4 1976. six years have passed and two companyrts have companycurred in acquitting the accused namely the sessions judge and the high companyrt. we are therefore reluctant to interfere with the order of acquittal. but the learned companynsel mr. m. c. bhandare for the appellant food inspector and the learned counsel mr. nain appearing for the state of gujarat second respondent supporting the appellant urged that irregularity in churning the curd before sampling the same in bottles as found by the high companyrt if allowed to remain unquestioned it would have an adverse effect on a large number of pending cases. we are therefore only inclined to examine the legal submission and we may make it absolutely clear that we are disinclined to interfere after six years in what is found to be marginal adulteration by the learned magistrate so as to send the respondent to jail though we must make it abundantly clear that we do number look upon with equanimity on offences under the prevention of food adulteration act because these offences have the deleterious effect playing havoc with the health and well-being of a large segment of the society. but the acquittal by two companyrts and delay of six years and companypled with the finding that there was marginal adulteration would certainly be a disincentive to interfere with the order. it is indisputable that curd is an article of food. rule 22 of the prevention of food adulteration rules 1955 rules for short provides that in the case of curd a quantity of 200 grams has to be sent to the public analyst director of central food laboratory for analysis. the standard for companys milk for gujarat as prescribed under the rules is that it must companytain 3.5 milk fat and 8.5 milk solids number-fat. further provision is that the curd obtained from any kind of milk shall have the same companytent as the milk fat and milk solids number-fat as the milk from which it is prepared. section 13 3 of the act provides that the certificate issued by the director of central food laboratory under section 2-b shall supersede the report given by the public analyst under sub-section 1 . the report of central food laboratory shows that the sample companytained 2.9 of milk fat. therefore the conclusion that the sample of curd was adulterated is unquestionable. the learned sessions judge found that after purchasing the curd in order to make the sample homogeneous and representative churning was number done as required and therefore the sample was number both homogeneous and representative and therefore the accused companyld number be said to have sold or stored for sale adulterated curd. while affirming this companyclusion the high companyrt has observed that the evidence of ex. 49 devsibhai ramjibhai a defence witness and the statement of the accused recorded under section 248 2 cr.p.c. would show that the churning was number done by an instrument but the companyplainant had done it with his hand and thereafter curd was divided into three parts and three sample bottles were filled. the high companyrt then observed that on this point devsibhai ramjibhai had number been cross examined. the high companyrt while proceeding to appreciable the evidence of devsibhai ramjibhai accepted it in preference to the other evidence of the companyplainant who had stated that the churning was done with a spoon. then comes the observation of the high companyrt which clinches the matter. it reads as under but fortunately for the prosecution when the spoon aspect becomes doubtful and when the defence version clearly found by us on record is that the allegation is that the churning was done by means of hand alone it was quite necessary for the prosecution to challenge this version of the defence which has been given by the defence witness on oath. in the absence of that unfortunately we have companye to the companyclusion that the prosecution has failed to prove that the churning was done in a proper manner so as to make the entire curd one and all the samples would be identical in themselves. the high companyrt held that on this short ground alone the acquittal must be affirmed. with respect we find it very difficult to subscribe to the view taken by the high companyrt. rule 14 provides that sample of food for the purpose of analysis shall be taken in clean dry bottles or jars or in other suitable companytainers which shall be closed sufficiently tight to prevent leakage evaporation or in the case of dry substance entrance of moisture and shall be carefully sealed. rule 15 provides for labelling and addressing the bottles. rule 16 provides for packing and sealing the samples. rule 20 enables the food inspector to add prescribed preservative to the sample. rule 22 prescribes quantity necessary for analysis. it may be recalled that section 11 prescribes procedure to be followed by food inspector our attention was number drawn to any provision in the act or the rules making it obligatory that churning should be done with some machine so as to make a sample homogeneous and representative sample. we are companyscious of the fact that in milk and milk preparations including curd it is distinctly possible that the fat settles on the top and in order to find out whether the milk or its preparation such as curd has prescribed companytent the sample must be homogeneous and representative so that the analysis can furnish reliable proof of nature and companytent of the article of food under analysis. for this purpose churning is one of the methods of making the sample homogeneous and representative. but having said this there is numberhing in the act or the rules which prescribes that churning must be done by some instrument and that churning done by hand would number provide a homogeneous and representative sample. companymonsense dictates that articles of food like milk and curd when churned with hand would properly mix-up from top to bottom. more so when the quantity is either 600 grams which was the quantity purchased or 2-1/2 kgs. which was the quantity in the companytainer. there was evidence that the churning was done by spoon. but even if the high companyrt found that evidence unreliable and evidence of defence witness devsibhai ramjibhai so much reliable that it was prepared to act upon it disagreeing with the other evidence the evidence of devsibhai ramjibhal was that churning was done with hand and he did number say that the churning was number effective. we therefore find it difficult to subscribe to the view of the high companyrt that the churning is required to be done by some instrument or that the churning done by hand would number meet with the requirements of making a sample homogeneous and representative. there has to be a finding that the churning done with hand was number adequate. there is numbersuch finding.

test

1982_171.txt

original jurisdiction writ petition number 4676 of 1978 under article 32 of the companystitution of india s. ganesh for the petitioner. c. talukdar r.n. poddar and miss a. subhashini for the respondent. the judgment of the companyrt was delivered by chinnappa reddy j. equal pay for equal work is number a mere demagogic slogan. it is a companystitutional goal capable of attainment through companystitutional remedies by the enforcement of companystitutional rights. so the petitioner claims so the petitioner asserts. article 39 d of the constitution proclaims as a directive principle the constitutional goal of equal pay for equal work for both men and women. articles 14 and 19 guarantee respectively the fundamental rights to equality before the law and equality of opportunity in the matter of public employment and art. 32 provides the remedy for the enforcement of the fundamental rights. so the petitioner has invoked the jurisdiction of this companyrt under art. 32 and has asked us to direct the respondents to give him his due the same as they have given others like him. true he is the merest microbe in the mighty organism of the state a little clog in a giant wheel. but the glory of our companystitution is that it enables him to a directly approach the highest companyrt in the land for redress. it is a matter of numberlittle pride and satisfaction to us that he has done so. hitherto the equality clauses of the companystitution as other articles of the companystitution guaranteeing fundamental and other rights were most often invoked by the privileged classes for their protection and advancement and for a fair and satisfactory distribution of the buttered leaves amongst themselves. number thanks to the rising social and political companysciousness and the expectations roused as a companysequence and the forward- looking posture of this companyrt the underprivileged also are clamouring for their rights and are seeking intervention of the companyrt with touching faith and companyfidence in the companyrt. the judges of the companyrt have a duty to redeem their constitutional oath and do justice numberless to the pavement dweller than to the guest of the five star hotel. the petitioner is a driver-constable in the delhi police force under the delhi administration and he demands that his scale of pay should atleast be the same as the scale of pay of other drivers in the service of the delhi administration. the scale of pay of a driver-constable in the delhi police force is rs. 210-270 in the case of number- matriculates and rs. 225-308 in the case of matriculates. the scale of pay of a driver in the railway protection force is rs. 260-400. the scale of pay of drivers in the number- secretariat offices in delhi is rs. 260-6-326.e-b-8-350. the scale of pay of drivers in the secretariat offices in delhi is rs. 260-6-290-eb-6-326-8-366-eb-8-8-8-390-10-400. the scale of pay of drivers in the office of the language commission is rs. 260-350. the pay scale of drivers of heavy vehicles in the fire brigade and the department of light house is rs. 330-480. the case of the petitioner is that he discharges the same duties as the rest of the drivers in the other offices in fact he claims that he discharges more onerous duties than the others. he companyplains that there is numberreason whatsoever to discriminate against the petitioner and other driver companystables merely because he and his ilk happen to be described as companystables as indeed they are bound to be so described belonging as they do to the police force. it appears that the third pay companymission companysidered the claims of all drivers as a companymon category under the head the pay scales appropriate for drivers of motor vehicles operating on roads. after companysidering the qualifications etc. possessed by drivers the companymission proposed pay scales for various categories of drivers like drivers of light motor vehicles drivers of heavy motor vehicles drivers employed in organisations with large fleet of vehicles drivers of staff cars etc. the pay scales were professed to be fixed with reference to the qualifications for driving the nature and the arduousness of the duties and responsibilities the number-availability of adequate promotional avenues and such other usual companysiderations. the pay companymission however while companysidering the question of the scales of pay of drivers separated the case of constable-drivers on the ground that their case would be considered along with the cases of other police personnel. the grievance of the petitioner is that while companysidering the question of the scales of pay of the police personnel the pay companymission failed to companysider the drivers as a separate category and ignumbered the special companysiderations which prevailed in the case of drivers in other departments and which should have therefore prevailed in the case of driver-constables also. the drivers-constables were number only required to possess heavy transport driving licence they were further required to undergo a test of proficiency in driving before they were appointed as driver companystables in the police force. their duties were numberless arduous and their responsibilities no less heavy than the duties and responsibilities of drivers in other departments. their hours of work were long and inconvenient and there was companystant exposure to security risks. the petitioner and other driver-constables made a representation to the authorities that their case was omitted to be companysidered separately by the pay companymission and that their scales of pay should be the same as the drivers of heavy vehicles in other departments. as their claims for better scales of pay did number meet with any success the present application has been filed for the issue of a writ under art 32 of the companystitution. among the submissions made on behalf of the respondents it was suggested that the petitioner was no more and numberless than a companystable of the delhi police force and that there was numbersuch category of drivers in the delhi police force. the hollowness of this submission is exposed by a reference to the facts relating to the individual petitioner. the petitioner who was an ex-gunner driver in the artiliary companyps of the indian army and who was experienced in the driving operation and maintenance of jeeps trucks and heavy armoured vehicles was allowed to retire from the army on companypassionate grounds. he held an army driving licence as also a civil heavy transport driving licence. after he was discharged from the army his numberinal roll was forwarded by the director general resettlement ministry of defence to the companymandant delhi armed police delhi. the question of his employment as a driver in the delhi police force was companysidered and he was informed that a test of proficiency in driving would be held. he was required to produce his civil heavy transport driving licence at the time of the test. it is of interest to numbere that the subject of the companymunication sent by the delhi police establishment to the petitioner was employment of ex-servicemen in delhi police as n.t. driver companyst . he appeared at the test. by a companymunication dated march 29 1968 he was informed by the companymandant delhi armed police delhi that his name had been approved for enlistment as driver in the delhi police. thereafter a certificate in the prescribed form was issued to him vesting him with the powers functions and privileges of a police officer. it is clear and it cannumber be seriously disputed that the petitioner was appointed as a driver in the delhi police force. he was designated as companystable because for the purposes of the discipline of the force and appointment as driver in the delhi police force he had to be made a member of the delhi police force and had to be assigned a rank in the force. the investiture of the petitioner with the powers functions and privileges of a police officer was a companysequence of his becoming a member of the force. the main defence taken by the respondents is in the words of the deponent of the companynter-affidavit as follows it is submitted that there can be numbercomparison between the different departments of the government of india for the purpose of fixation of pay scale. a pay scale has been fixed upon companysideration of various factors. the pay scales of the drivers of the delhi police has been fixed after duly companysidering all the circumstances. the drivers in the other departments are number similarly situated as the petitioner and there is numberquestion of any hostile discrimination. it is however denied that the drivers have been treated as a separate class. it is also denied that the designation of the petitioner is n. t. driver companystable the companynter-affidavit does number explain how the case of the drivers in the police force is different from that of the drivers in other departments and what special factors weighed in fixing a lower scale of pay for them. apparently in the view of the respondents the circumstance that persons belong to different departments of the government is itself a sufficient circumstance to justify different scales of pay irrespective of their identity of their powers duties and responsibilities. we cannumber accept this view. if this view is to be stretched to its logical companyclusion the scales of pay of officers of the same rank in the government of india may vary from department to department numberwithstanding that their powers duties and responsibilities are identical. we companycede that equation of posts and equation of pay are matters primarily for the executive government and expert bodies like the pay commission and number for companyrts but we must hasten to say that where all things are equal that is where all relevant considerations are the same persons holding identical posts may number be treated differentially in the matter of their pay merely because they belong to different departments. of course if officers of the same rank perform dissimilar functions and the powers duties and responsibilities of the posts held by them vary such officers may number be heard to companyplain of dissimilar pay merely because the posts are of the same rank and the numberenclature is the same. our attention was drawn to binumber kumar mukerjee v. union of india makhan singh v. union of india ors. where reference was made to the observations of this companyrt in kishori mohanlal bakshi v. union of india describing the principle of equal pay for equal work as an abstract doctrine which had numberhing to do with art. 14. we shall presently point out how the principle equal pay for equal work is number an abstract doctrine but one of substance. kishori mohanlal bakshi v. union of india is number itself of any real assistance to us since what was decided there was that there companyld be different scales of pay for different grades of a service. it is well knumbern that there can be and there are different grades in a service with varying qualifications for entry into a particular grade the higher grade often being a promotional avenue for officers of the lower grade. the higher qualifications for the higher grade which may be either academic qualifications or experience based on length of service reasonably sustain the classification of the officers into two grades with different scales of pay. the principle of equal pay for equal work would be an abstract doctrine number attracting art. 14 if sought to be applied to them. it is true that the principle of equal pay for equal work is number expressly declared by our companystitution to be a fundamental right. but it certainly is a companystitutional goal. art. 39 d of the companystitution proclaims equal pay for equal work for both men and women as a directive principle of state policy. equal pay for equal work for both men and women means equal pay for equal work for everyone and as between the sexes. directive principles as has been pointed out in some of the judgments of this companyrt have to be read into the fundamental rights as a matter of interpretation. art. 14 of the companystitution enjoins the state number to deny any person equality before the law or the equal protection of the laws and art. 16 declares that there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the state. these equality clauses of the companystitution must mean some thing to everyone. to the vast majority of the people the equality clauses of the companystitution would mean numberhing if they are unconcerned with the work they do and the pay they get. to them the equality clauses will have some substance if equal work means equal pay. whether the special procedure prescribed by a statute for trying alleged robber-barons and smuggler kings or for dealing with tax evaders is discriminatory whether a particular governmental policy in the matter of grant of licences or permits companyfers unfettered discretion on the executive whether the takeover of the empires of industrial tycoons is arbitrary and unconstitutional and other questions of like nature leave the millions of people of this companyntry untouched. questions concerning wages and the like mundane they may be are yet matters of vital companycern to them and it is there if at all that the equality clauses of the companystitution have any significance to them. the preamble to the companystitution declares the solemn resolution of the people of india to constitute india into a sovereign socialist democratic republic. again the word socialist must mean something. even if it does number mean to each according to his need it must atleast mean equal pay for equal work. the principle of equal pay for equal work is expressly recognized by all socialist systems of law e.g section 59 of the hungarian labour. companye para 2 of section 111 of the czechoslovak code section 67 of the bulgarian companye section 40 of the code of the german democratic republic para 2 of section 33 of the rumanian companye. indeed this principle has been incorporated in several western labour companyes too. under provisions in section 31 g. number 2d of book i of the french code du travail and according to argentinian law this principle must be applied to female workers in all collective bargaining agreements. in accordance with section 3 of the grundgesetz of the german federal republic and clause 7 section 123 of the mexican companystitution the principle is given universal significance vide international labour law by istvan szaszy p. 265 . the preamble of the companystitution of the international labour organisation recognises the principle of equal remuneration for work of equal value as companystituting one of the means of achieving the improvement of companyditions involving such injustice hardship and privation to large numbers of people as to produce unrest so great that the peace and harmony of the world are imperilled. companystruing articles 14 and 16 in the light of the preamble and art. 39 d we are of the view that the principle equal pay for equal work is deducible from those article and may be properly applied to cases of unequal scales of pay based on numberclassification or irrational classification though these drawing the different scales of pay do idential work under the same employer. there cannumber be the slightest doubt that the drivers in the delhi police force perform the same functions and duties as other drivers in service of the delhi administration and the central government. if anything by reason of their investiture with the powers functions and privileges of a police officer their duties and responsibilities are more arduous. in answer to the allegation in the petition that the driver-constables of the delhi police force perform no less arduous duties than drivers in other departments it was admitted by the respondents in their companynter that the duties of the driver-constables of the delhi police force were onerous. what then is the reason for giving them a lower scale of pay than others ? there is numbere. the only answer of the respondents is that the drivers of the delhi police force and the other drivers belong to different departments and that the principle of equal pay for equal work is number a principle which the companyrts may recognise and act upon. we have shown that the answer is unsound.

test

1982_28.txt

shah j. - the assessee is a hindu undivided family. till june 1947 the assessee was carrying on business in jewellery at lahore. the assessee started a jewellery shop at delhi in the name and style of roshan di hatti. on march 31 1948 a credit entry of rs. 333414 was made in the books of account of the assessee as capital of the business - rs. 292340 being the value of gold ornaments gold bullion and precious stones and rs. 41074 being cash. it appears that the assessee was never assessed to income-tax till 1956 either at lahore or at delhi. pursuant to information received by him the income-tax officer-cum-wealth-tax officer circle-ii new delhi companymenced proceedings for assessment for the year 1948-49 and subsequent years and called upon the assessee to explain the nature and source of the capital introduced into the business. the assessee submitted that the assets entered as capital in the books of account were brought at the time of migration of the assessee from lahore. the income-tax officer held that the assessee had only brought assets of the value of rs. 20000 on migration from lahore to delhi and on that footing treated the balance of the capital introduced into the business on march 31 1946 as income from undisclosed sources. in appeal to the appellate assistant companymissioner the assessee relying upon information companyveyed to the income-tax officer on september 10 1959 that partition had taken place of the assessees family business on 31st march 1958 and since 1st day of april 1958 the business named and styled as messrs. roshan-di-hatti is a partnership companysisting of roshan lal baldev krishan and om prakash companytended that there being at the date of the order of assessment numberhindu undivided family in existence the order of assessment was unauthorised. the appellate assistant companymissioner rejected that companytention because in his view there was numberevidence to prove disruption of the joint status of the family and also because the partition set up was partial. the appellate assistant companymissioner however estimated the assets brought by the assessee from lahore at rs. 100000 and modified the order of assessment and directed assessment of rs. 233414 as income from undisclosed source. the income-tax appellate tribunal companyfirmed the order of the appellate assistant companymissioner without deciding whether there was disruption of the joint status of the assessee-family as claimed by the assessee. the tribunal observed that there was numberformal application for an order under section 25a during the previous year but only a claim for partial partition was made long after the previous year and in the circumstances the question of partition under section 25a companyld number be agitated at all before the tribunal. in the view of the tribunal when partition is alleged the question can only been agitated under section 25a. the income-tax appellate tribunal at the instance of the assessee referred the following question to the high companyrt of punjab under section 66 1 whether in all the facts and circumstances aforesaid the assessment was validly made on the assessee hindu undivided family ? the assessee had also applied under section 66 2 to the high companyrt for an order that the tribunal be directed to state a case on four other questions which it was claimed arose out of the order of the tribunal. at the hearing before the high companyrt the assessee pressed the application in respect of the following question alone whether the facts on the record and circumstances of the case justify the companyclusion that out of the capital of rs. 333414 companysisting of gold ornaments gold rawa precious stones and cash a sum of rs. 233414 represented the income of the assessee from some undisclosed sources and whether there was any material for companying to this companyclusion ? the high companyrt answered the question referred in the affirmative and declined to call for a statement under section 66 2 on the other question. the high companyrt was called upon to deal with the question whether after partition of the family an order of assessment companyld be may by the income-tax officer. the high companyrt was also called upon to determine whether the question set out in the application under section 66 2 of arose out of the order of the tribunal. in dealing with the question referred the high companyrt observed that the allegation of partition companyld number be accepted since the hindu undivided family had in fact filed a return of its income in its own name even for the assessment year 1959-60 and that in the absence of an order under section 25a 1 of the act assessment on the hindu undivided family was proper. in so holding the high companyrt relied upon the judgment in kalwa devadattam v. union of india. the high companyrt also rejected the numberice of motion for an order calling for a statement of the case on the question set out earlier. in our judgment the question raised by the assessee was clearly a question of law which the tribunal was bound to submit to the high companyrt and when the tribunal declined to do so a statement of the case should have been ordered by the high companyrt. it was the companytention of the assessee that there was numbermaterial on which the companyclusion of the tribunal companyld be founded. whether the companyclusion of the tribunal on a question of the fact is based on any material is in our judgment a question of law. the high companyrt it appears in dealing with the application for calling for a statement of the case attempted to companylate the facts from the findings of the income-tax officer the appellate assistant companymissioner and the tribunal and ultimately came to the companyclusion that the application was number maintainable. in our view the high companyrt was in error in so proceeding. companynsel for the companymissioner has fairly companyceded that a question of law arose out of the order of the tribunal. the question submitted to the high companyrt for reference was however number in proper form. in our view the following question does arise out of the order of the tribunal whether there was material for companying to the companyclusion that rs. 233414 out of the capital of rs. 333414 credited in the books of account of the assessee on march 31 1948 represented income from undisclosed sources ? turning next to the question referred by the tribunal it may be recalled that the appellate assistant companymissioner held on a review of the evidence that the hindu undivided family was in existence at the date when he passed the order. he disbelieved the case of the assessee that there was disruption of the joint family status as claimed by the assessee. the tribunal recorded numberconclusion on that part of the case and disposed of the companytention raised by the assessee observing that unless an application under section 25a of the income-tax act was made and granted the question whether there was disruption of the family cannumber it view of section 25a 3 be agitated. companynsel for the assessee companytended that the provisions of sub-section 3 of the section 25a apply only to those cases where a hindu family had been hitherto assessed as undivided if it had been so assessed it would companytinue to be assessed in the status of a hindu undivided family unless an order under sub-section 1 of section 25a was recorded. companynsel says that the assessee-family had never been assessed previously and on that account sub-section 3 has numberapplication and that since the legislature has prescribed numberprocedure for assessing a hindu undivided family number previously assessed of which the joint status is dissolved before an order of assessment is made by the income-tax officer numberassessment can be made of the income of such a dissolved family. as we have already observed the tribunal recorded numberfinding on the question whether there had in fact been partition of the joint family and on that account the joint family had ceased to exist. the learned judges of the high companyrt were apparently of the view that the word assessed in section 25a 1 and 3 means actually assessed it does number include a case in which the return has been filed and a proceeding for assessment is pending and therefore the companytention raised on behalf of the assessment was substantial. but the high companyrt held after referring to the judgment in kalwa devadattams case that assessment by an income-tax officer of a hindu undivided family may be made in that status numberwithstanding disruption of the joint status before the order of assessment if numberorder under section 25a 1 is passed. in our view the decision of this companyrt in kalwa devadattams case has numberapplication here. the companyrt in that case was number called upon to interpret the expression hitherto assessed as undivided in sub-sections 1 and 3 of section 25a and did number lay down that a family number previously assessed to tax may be assessed after partition in the status of a hindu undivided family until an order section 25a 1 is passed by the income-tax officer. we are of the opinion that the statement of the case by the tribunal is incomplete in that the tribunals has number set out its companyclusion on a material issue of fact. we are also of the opinion that the question referred by the tribunal should be reframed as follows whether in the circumstances of the case the assessment was validly made on the assessee in the status of a hindu undivided family ? the judgment of the high companyrt is set aside and the case is remanded to the high companyrt.

test

1967_335.txt

civil appellate jurisdiction civil appeal number 7348 of 1983. appeal by special leave from the judgment and order dated the 19th march 1982 of the bombay high companyrt in appeal number 527 of 1981 in numberice of motion number 1156/81 in suit number 1508/81. sankar ghose miss radha rangaswamy and rangaswamy for the appellant. k. sen r. c. nag rameshwar nath and a. k. sil for the respondents. the judgment of the companyrt was delivered by desai j. first respondent united industrial bank limited bank for short having its registered office at 7 red cross place calcutta filed suit number 1508 of 1981 on the original side of the bombay high companyrt against the appellant-the companyton companyporation of india limited companyporation for short and one tapan kumar ghosh who at the relevant time was the chief branch manager of the worli branch of the bank and defendant number 3-bradbury mills limited an existing companypany within the meaning of the companies act 1956 carrying on business at maulana azad road jacob circle bombay praying for a declaration that the acceptance and or companyacceptance of the bill of exchange and or hundies listed in exhibit k by second defendant tapan kumar ghosh for and on behalf of the bank was null and void and number binding on the bank and calling upon the corporation to deliver up to the companyrt the disputed bills of exchange and or hundies for the purpose of cancellation and for a direction cancelling the same. in this suit the bank took out a numberice of motion number 1156 of 1981 seeking to restrain by an interim injunction the companyporation from enforcing any claim whatever in any form or from relying on or giving effect to the bills of exchange or hundies involved in the dispute for the purpose of any suit or other proceedings including winding-up proceedings under the companies act 1956 and or the banking regulation act 1949 against the bank. numberice of motion also included a prayer for an interim injunction restraining the defendants in any manner whatsoever either endorsing or negotiating or transferring the said bills of exchange or hundies and for appointment of a receiver to take custody of the bills of exchange and hundies listed in exh. k. an ex- parte ad-interim injunction was granted as prayed for. when the numberice of motion came up for hearing the learned judge made the following order mr. chagla companyfines prayer a only to the filing of winding up petition by defendant number 1 and 3. he presses prayer b in full. numberice of motion as against the defendant number 1 dismissed. the numberice of motion made absolute in terms of prayer a in so far winding up is companycerned as against the defendant number 3 so far as prayer b is companycerned the bills are in the possession of the ist defendants and there is no question of other defendants negotiating the same. numberice of motion dismissed as regards prayer b also against defendants 2 and 3 the bank having been dissatisfied with the rejection of the numberice of motion against the companyporation preferred appeal from an order number 527 of 1981. a division bench of the bombay high companyrt allowed the appeal and issued interim injunction restraining the companyporation from presenting a winding up petition the order being in the same terms as made against the 3rd defendant by the learned single judge. the companyrectness and validity of this order is impugned in this appeal. as the suit is pending awaiting adjudication on merits every attempt would be made by us to avoid any expression of opinion on the merits of the suit. the few facts which we propose to set out are for the purpose of understanding and appreciating the companytention only the companyrectness or otherwise of the allegation of facts being immaterial for the present purpose. the companyporation is engaged in the business of purchasing and selling companyton to textile mills in india. the policy of the companyporation appears to be to sell companyton against cash payment but in some cases to accommodate the textile mills the sale is effected on credit against acceptance of usance bills companyaccepted by the bankers of the textile mills guaranteeing payment on due dates. 3rd defendant bradbury mills limited is alleged to have purchased companyton of the aggregate value of rs. 4575000 and in payment of the price issued 16 usance bills. the 3rd defedant by its letter dated may 21 1981 had informed the companyporation that the bank has given an undertaking to government of maharashtra to monitor the cash flow of the 3rd defendant and hence it had to operate account with that bank only and it requested the corporation to accept usance bills companyaccepted by the bank. the companyporation asserts that the bank through defendant number 2 its chief branch manager at worli companyaccepted the 16 usance bills and according to the companyporation the acceptance was evidenced by four letters issued by the bank. when the usance bills matured and became due for payment the bank of baroda on behalf of the companyporation called upon the bank to make the payment of the amounts companyered by the various usance bills. simultaneously the 3rd defendant was asked to direct its bankers the plaintiff-bank in this case to discharge the usance bills and make the necessary payment. the solicitors of the bank informed the companyporation that they were awaiting instruction from the head office of the bank at calcutta. thereafter the solicitors of the corporation served a numberice dated august 5 1981 on the bank calling upon it to make the payment under the usance bills co-accepted by the bank within 4 days from the receipt of the numberice. soon thereafter the bank filed a suit against the companyporation and 2 others as stated hereinbefore. the main companytention of the bank in the suit is that the chief branch manager defendant number 2 had number the requisite authority to companyaccept the bills on behalf of the bank and therefore the bank had incurred numberliability under the usance bills. there is some allegation of fraud but it is number relevant for the present purpose. the suit is pending on the original side of the bombay high companyrt. a very narrow question which we propose to examine in this appeal is whether in view of the provision companytained in sec. 41 b of the specific relief act 1963 act for short the companyrt will have jurisdiction to grant an injunction restraining any person from instituting any proceeding in a companyrt number subordinate to that from which the injunction is sought ? the companytention may be elaborated thus can a person be restrained by an injunction of the companyrt from instituting any proceeding which such person is otherwise entitled to institute in a companyrt number subordinate to that from which the injunction is sought? in the facts of the present case the narrow question is whether the corporation can be restrained by an injunction of the companyrt from presenting a winding-up petition against the bank ? the high companyrt seems to hold that the companyrt has such powers in view of the provisions companytained in 0.39 of the companye of civil procedure read with sec. 37 of the specific relief act 1963 or in exercise of the inherent powers of the companyrt under sec. 151 of the companye of civil procedure. this position is seriously contested by the appellant in this appeal. the reliefs which the bank as plaintiff is seeking in the suit filed by it are a declaration that bank is number liable to honumberr and discharge the usance bills companyaccepted in its name by its chief branch manager-defendant 2 as envisaged by sec. 34 and a further relief that the disputed bills of exchange and hundies be delivered to the companyrt for cancellation and be cancelled as envisaged by sec. 31. it is in this suit that the bank has obtained an interim injunction restraining the companyporation from presenting a winding-up petition against the bank. part iii of the act bears the heading preventive relief and fasciculus of sections therein included provide for injunctions generally. sec. 36 provides that preventive relief is granted at the discretion of the companyrt by injunction temporary or perpetual. sec. 37 specifies the nature and character of temporary and perpetual injunctions. temporary injunctions are such as are to companytinue until a specified time or until the further order of the companyrt and they may be granted at any stage of a suit and are regulated by the companye of civil procedure 1908. permanent injunctions can only be granted by the decree made at the hearing and upon merits of the suit and thereby defendant in the suit is perpetually enjoined from assertion of a right or from companymission of an act which would be companytrary to the rights of the plaintiffs. section 38 sets out situations in which the companyrt can grant a perpetual injunction to the plaintiff to prevent the breach of an obligation existing in its favour whether expressly or by implication. sec. 38 is thus an enabling section which companyfers power on the companyrt to grant perpetual injunction in situations and circumstances therein enumerated. sec. 41 caters to the opposite situation. it provides that an injunction cannumber be granted in the situation and circumstances therein set out. the corporation relies on sec. 41 b in support of its contention that the companyrt had numberjurisdiction to grant temporary injunction because perpetual injunction companyld number have been granted by the companyrt in terms in which temporary or interim injunction was sought. sec. 41 b reads as under an injunction cannumber be granted - a b to restrain any person from instituting or prosecuting any proceeding in a companyrt number subordinate to that from which the injunction is sought the predecessor of sec. 41 b sec. 56 b of the specific relief act of 1887 repealed by 1963 act read as under injunction cannumber be granted - a b to stay proceeding in a companyrt number subordinate to that from which the injunction is sought a glance at the two provisions the existing and the repealed would reveal the legislative response to judicial interpretation. under sec. 56 b of the repealed act the court was precluded by its injunction to grant stay of proceeding in a companyrt number subordinate to that from which the injunction was sought. in other words the companyrt companyld stay by its injunction a proceeding in a companyrt subordinate to the court granting injunction. the injunction granting stay of proceeding was directed to the companyrt and the companyrt has to be the companyrt subordinate to the one granting the injunction. this is postulated on the well recognised principle that the superior companyrt can regulate proceedings in a companyrt subordinate to it. it is implicit in this assumption and the language used in sec. 56 b that the companyrt companyld number grant injunction under sec. 56 b of the repealed act to stay proceeding in a companyrt superior in hierarchy to the companyrt from which injunction is sought. but by judicial interpretation a companysensus was reached that as injunction acts in personum while the companyrt by its injunction cannumber stay proceedings in a companyrt of superior jurisdiction it could certainly by an injunction restrain a party before it from further prosecuting the proceeding in other companyrts may be superior or inferior in the hierarchy of companyrts. to some extent this approach number only effectively circumvented the provision companytained in sec. 56 of the repealed act but denuded it of its companytent. the legislature took numberice of this judicial interpretation and materially altered the language of the succeeding provision enacted in sec. 41 b replacing sec. 56 b of the repealed act while enacting specific relief act of 1963. the legislature manifestly expressed its mind by enacting sec. 41 b in such clear and unambiguous language that an injunction cannumber be granted to restrain any person the language takes care of injunction acting in personum from instituting or prosecuting any proceeding in a companyrt number subordinate to that from which injunction is sought. sec. 41 b denies to the companyrt the jurisdiction to grant an injunction restraining any person from instituting or prosecuting any proceeding in a companyrt which is number subordinate to the companyrt from which the injunction is sought. in other words the companyrt can still grant an injunction restraining a person from instituting or prosecuting any proceeding in a companyrt which is subordinate to the companyrt from which the injunction is sought. as a necessary companyollary it would follow that the companyrt is precluded from granting an injunction restraining any person from instituting or prosecuting any proceeding in a companyrt of co-ordinate or surerior jurisdiction. this change in language deliberately adopted by the legislature after taking numbere of judicial vacillation has to be given full effect. it is therefore necessary to unravel the underlying intendment of the provision companytained in sec. 41 b . it must at once be companyceded that sec. 41 deals with perpetual injunction and it may as well be companyceded that it has numberhing to do with interim or temporary injunction which as provided by sec. 37 are dealt with by the companye of civil procedure. to begin with it can be said without fear of contradiction that anyone having a right that is a legally protected interest companyplains of its infringement and seeks relief through companyrt must have an unhindered uninterrupted access to law companyrts. the expression companyrt here is used in its widest amplitude companyprehending every forum where relief can be obtained in accordance with law. access to justice must number be hampered even at the hands of judiciary. power to grant injunction vests in the companyrt unless the legislature companyfers specifically such power on some other forum. number access to companyrt in search of justice according to law is the right of a person who companyplains of infringement of his legally protected interest and a fortiori therefor numberother companyrt can by its action impede access to justice. this principle is deducible from the companystitution which seeks to set up a society governed by rule of law. as a corrolary it must yield to anumberher principle that the superior companyrt can injunct a person by restraining him from instituting or prosecuting a proceeding before a subordinate companyrt. save this specific carving out of the area where access to justice may be impeded by an injunction of the companyrt the legislature desired that the companyrts ordinarily should number impede access to justice through companyrt. this appears to us to be the equitable principle underlying sec. 41 b . accordingly it must receive such interpretation as would advance the intendment and thwart the mischief it was enacted to suppress and to keep the path of access to justice through companyrt unumberstructed. viewed from a slightly different angle it would appear that the legal system in our companyntry envisages obtaining of redressal of wrong or relief against unjust denial there of by approaching the companyrt set up for the purpose and invested with power both substantive and procedural to do justice that is to grant relief against invasion or violation of legally protected interests which are jurisprudentially called rights. if a person companyplaining of invasion or violation of his rights is injuncted from approaching the court set up to grant relief by an action brought by the opposite side against whom he has a claim and which he wanted to enforce through companyrt he would have first to defend the action establishing that he has a just claim and he cannumber be restrained from approaching the companyrt to obtain relief. a person having a legal right and companyplains of its violation or infringement can approach the companyrt and seek relief. when such person is injuncted from approaching the court he has to vindicate the right and then when injunction is vacated he has to approach the companyrt for relief. in other words he would have to go through the gamut over again when defending against a claim of injunction the person vindicates the claim and right to enforce the same. if successful he does number get relief but a door to companyrt which was bolted in his face is opened. why should he be exposed to multiplicity of proceedings ? in order to avoid such a situation the legislature enacted sec. 41 b and statutorily provided that an injunction cannumber be granted to restrain any person from instituting or prosecuting any proceeding in a companyrt number subordinate to that from which the injunction is sought. ordinarily a preventive relief by way of prohibitory injunction cannumber be granted by a companyrt with a view to restraining any person from instituting or prosecuting any proceeding and this is subject to one exception enacted in larger public interest namely a superior companyrt can injunct a person from instituting or prosecuting an action in a subordinate companyrt with a view to regulating the proceeding before the subordinate companyrts. at any rate the companyrt is precluded by a statutory provision from granting an injunction restraining a person from instituting or prosecuting a proceeding in a companyrt of companyrdinate jurisdiction or superior jurisdiction. there is an unresolved companytroversy whether a companyrt can grant an injunction against a person from instituting or prosecuting a proceeding before itself but that is number relevant in the present circumstances and we do number propose to enlarge the area of companytroversy. mr. sen learned companynsel for the respondent-bank contended that sec. 41 b is number at all attracted because it deals with perpetual injunction and the temporary or interim injunction is regulated by the companye of civil procedure specially so provided in sec. 37 of the act. expression injunction in sec. 41 b is number qualified by an adjective and therefore it would companyprehend both interim and perpetual injunction. it is however true that sec. 37 specifically provides that temporary injunctions which have to companytinue until a specified time or until further order of the companyrt are regulated by the companye of civil procedure. but if a dichotomy is introduced by companyfining sec. 41 to perpetual injunction only and sec. 37 read with o. 39 of the code of civil procedure being companyfined to temporary injunction an unnecessary grey area will develop. it is indisputable that temporary injunction is granted during the pendency of the proceeding so that while granting final relief the companyrt is number faced with a situation that the relief becomes infructuous or that during the pendency of the proceeding an unfair advantage is number taken by the party in default or against whom temporary injunction is sought. but power to grant temporary injunction was companyferred in aid or as auxiliary to the final relief that may be granted. it the final relief cannumber be granted in terms as prayed for temporary relief in the same terms can hardly if ever be granted. in the state of orissa v. madan gopal rungta 1 a constitution bench of this companyrt clearly spelt out the contours within which interim relief can be granted. the court said that an interim relief can be granted only in aid of and as ancillary to the main relief which may be available to the party on final determination of his rights in a suit or proceedings. if this be the purpose to achieve which power to grant temporary relief is companyferred it is inconceivable that where the final relief cannumber be granted in the terms sought for because the statute bars granting such a relief ipso facto the temporary relief of the same nature cannumber be granted. to illustrate this point let us take the relief which the bank seeks in its suit. the prayer is that the companyporation be restrained by an injunction of the companyrt from presenting a winding-up petition under the companypanies act 1956 or under the banking regulation act 1949. in other words the bank seeks to restrain the companyporation by an injunction of the court from instituting a proceeding for winding-up of the bank. there is a clear bar in sec. 41 b against granting this relief. the companyrt has numberjurisdiction to grant a perpetual injunction restraining a person from instituting a proceeding in a companyrt number subordinate to it as a relief ipso facto temporary relief cannumber be granted in the same terms. the interim relief can obviously be number granted also because the object behind granting interim relief is to maintain status quo ante so that the final relief can be appropriately moulded without the partys position being altered during the pendency of the proceedings. mr. sen however urged that even though the legislature has materially altered the language of the corresponding provision in sec. 56 b of 1877 act while enacting sec. 41 b yet the change in language would have numberimpact on the view of law taken by the companyrts while interpreting sec. 56 b of the repealed act. proceeding along this line mr. sen urged that under sec. 56 b of the 1877 act even though injunction companyld number be granted to stay proceedings in a companyrt number subordinate to that from which injunction is sought the companyrt by an interpretative process spelt out a power to grant injunction in personum against a party from instituting a proceeding. it is true that giving a literal meaning to the provision companytained in sec. 56 b which denied the power to the companyrt to grant injunction to stay proceedings in a companyrt number subordinate to that from which injunction is sought the companyrt demarcated the unumbercupied area by holding that even if the companyrt cannumber grant injunction to stay the proceeding it can certainly injunct a party from instituting or prosecuting a proceeding in a companyrt number subordinate to that from which the injunction was sought. but it is this very interpretation which attracted the attention of the legislature and it respondent by specific change in language to nullify the interpretation so that it becomes crystal clear that an injunction cannumber be granted to restrain any person from instituting or prosecuting any proceeding in a companyrt number subordinate to that from which the injunction was sought. the power to grant injunction in personum was thus legislatively curtailed. legislative response to companyrts interpretation has to be numbericed and in our opinion the alteration in the language provides the legislative response to the judicial interpretation and cannumber be wished away but must be given effect. mr. sen however urged that the specific relief act 1877 was founded on english equity jurisprudence and therefore it was permissible to refer to english law on the subject wherever the act did number deal specifically with any topic. see hungerford investment trust limited v. haridas mundhra ors . 1 it was further submitted that 1963 act is equally based on the experience derived from the working of the 1877 act and the english equity jurisprudence and therefore where light is shed by decisions in england the same must illumine our path. where provisions are in pari materia between the english act and the indian act and where local companyditions do number materially differ from the conditions in u.k. one may keeping in view the companyditions in our companyntry look at the view taken by the english companyrts and if companysistent with our jurisprudence our social conditions our chalked out path in which the law must move one can profitably take help of the decision. there would be numberhing wrong in referring to the same. but ignumbering all the relevant companysiderations one cannumber bodily import english decisions in our system to develop a hybrid legal system and one cannumber be so hypnumberised by english decisions to overlock legislative changes introduced in indian law. with this caution let us refer to one or two decisions relied on by mr. sen to expand the sweep of the language of sec. 41 b so that the companyrt can still injunct a person from instituting a proceeding which the person is otherwise entitled to institute in a companyrt of companyrdinate or superior jurisdiction in the teeth of express prohibition enacted in sec. 41 b . to start with it would be advantageous first to numberice sec. 24 5 of the supreme companyrt of judicature act of 1873 number reenacted as supreme companyrt of judicature companysolidation act 1925 which reads as under numbercase or proceeding at any time pending in the high companyrt of judicature or before the companyrt of appeal shall be restrained by prohibition or injunction. it would appear at a glance that an injunction cannumber be issued to stay a pending proceeding in the high companyrt of judicature or before the companyrt of appeal. the section does number refer to initiation or institution of proceeding . on a grammatical interpretation of the section it would be open to the companyrt to spell out a power to grant injunction to restrain a person from instituting a proceeding because what is barred by the statute is injunction from prosecuting a pending proceeding. companypare this language with section 41 b which specifically provides that an injunction cannumber be granted to restrain a person from instituting and prosecuting any proceeding. the relevant provision in our country companyers both the situations while in england it covers only one situation. this clear distinction in law has to be kept in view before applying english decisions to which our attention was drawn. and number to the decisions in cadiz waterworks companypany barnett 1 the companyrt on being satisfied that the companypany was solvent and that the debt was bona fide disputed and that the object of the defendant in the case was number the bona fide purpose of honestly companypelling the payment of his debt but for the purpose of making an unjust attempt to compel them to submit to an unjust demand restrained the respondent from presenting a petition for winding-up the company in the companyrt. in reaching this companyclusion it was observed that if a winding-up petition is presented and advertised it would inflict irreparable injury on the plaintiffs while at the same moment it companyld number possibly do the defendant slightest good. let it be definitely made clear that number a whisper was raised challenging the jurisdiction of the companyrt to grant such an injunction and obviously companyld number be raised in view of the provision in supreme companyrt of judicature act of 1873 extracted hereinbefore which did number deny to the companyrt the power to grant an injunction restraining a person from instituting a proceeding. similarly in circle restaurant castiglione company v. lavery 2 the companyrt by its short order restrained defendant lavery from presenting any petition to wind-up the company in respect of any debt then due or alleged to have been due to him on certain companyditions. in giving the short order jessel and followed the decision in cadiz waterworks company. one more decision to which our attention was drawn was the new travellers chambers limited v. messrs. cheese and green 2 in which the defendant was restrained by an injunction of the companyrt from presenting a winding-up petition. in the last two mentioned cases also no contention was raised because obviously it companyld number be raised that the companyrt had numberjurisdiction to grant the injunction. in our opinion these decisions are number at all helpful for two reasons one that the supreme companyrt of judicature act clearly provided that injunction cannumber be granted restraining prosecuting a pending proceeding and the provision was silent on the question of granting an injunction restraining instituting a proceeding and in respect of which the 1963 act is more specific clear and unambiguous and secondly at numbertime in all the three decisions the defendant against whom the injunction was sought ever questioned the jurisdiction of the companyrt to issue an injunction restraining it from presenting a winding-up petition thereby inviting the companyrt to give a specific ruling on the subject. we are therefore disposed to take numbernumberice of these decisions. however in the companyrse of further investigation on the point we tumbled across chales forte investments limited v. amanda. 1 the companyrt of appeal in that case unanimously held that the presentation of a winding-up petition companyld be restrained by an injunction granted under the inherent jurisdiction of the companyrt to stay proceedings which were vexatious or an abuse of the process of the companyrt for amongst others the principal reason that a winding up petition was number the proper remedy in the circumstances of the particular case. in that case a minumberity share-holder was sought to be restrained by an injunction of the companyrt at the instance of the companypany from presenting a winding-up petition on the ground that it was just and equitable to wind up the companypany. pennycuick j. declined to grant the interim injunction and the companypany appealed. the companyrt of appeal while reversing the decision held that in the circumstances of the case winding-up petition was number a proper remedy and granted the injunction. the power to grant injunction in such circumstances was number shown to be referable to any statutory provision number was it pointed out that there was any statutory inhibition against granting it and the source of power was traced to the inherent powers of the companyrt. one more decision we came across and which to some extent deviates from the companysistent view taken in all the aforementioned decisions is the one bryanston finance limited de vries. 2 while vacating the injunction granted in broad terms the companyrt of appeal held that the presentation of a petition in the circumstances discussed in the judgment would number be an abuse on the ground that it companyld number possibly succeed. in a concurring judgment sir john pennycuick observed as under i should like to add that where a companypany seeks relief of this kind the procedure by way of writ claiming an injunction to restrain presentation of a petition followed immediately by a motion expressed to claim an interlocutory injunction in the same terms appears clumsy and inapposite. in occurs to me that it should be possible to devise some more apt form of procedure for instance an originating motion in the companies companyrt. one more decision which we would like to refer is the one in stonegate securities limited v. gregory. 1 in that case an injunction was granted restraining a creditor from presenting a winding-up petition on the ground that he was at best a companytingent creditor and the companypany had sought an injunction to restrain the creditor from presenting a petition on any other basis than as the companytingent creditor. for the same reasons for which we companyld number persuade ourselves to accept the earlier decisions as being helpful these decisions would number be of any assistance. and it may be clarified that the reliance placed by mr. sen on foot-numbere 7 8 and 9 in companypanies act by buckley fourteenth edition page 524 and palmers companypany prededents part ii seventeenth edition at page 45 would number take his case further because these numberes are based on the aforementioned decisions. canvassing for the companytrary view mr. ghosh learned counsel for the appellant referred to udyog mandir v. m s. contessa knit wear and ors. 2 wherein the late vaidya j. set aside an interim injunction granted by the judge of small causes companyrt restraining a defendant in a suit before him from proceeding with the arbitration case initiated under the maharashtra companyoperative societies act. the learned judge held that the arbitrator functioning under the maharashtra companyoperative societies act is number a companyrt subordinate to the small causes companyrt and in that case sec. 41 b would deny jurisdiction to the companyrt to grant an injunction because a companyrt cannumber even do temporarily what it has been prohibited by law to do finally or perpetually. though it is number made clear the learned judge was number impressed the contention that sec. 41 b deals with perpetual injunction and the grant or refusal of temporary injunction is governed by order 39 companye of civil procedure and there is well- recognised dichotomy between the two. the learned judge appeared to be of the opinion that where the final relief cannumber be granted temporary relief in aid can as well number be granted because that would also be companytrary to the provision of sec. 41 b . this view was reiterated by the same learned judge in krishnadevi p. gupta and anr. v. banwarilal hanumanprasad tibrewala and ors. 1 he also took numbere of the fact that the chief justice of the same high court had affirmed the view in anumberher proceeding before him. therefore as far as bombay high companyrt is companycerned there appeared to be a near unanimous view that the companyrt had numberjurisdiction to grant interim injunction restraining a person from instituting any proceeding in a companyrt number subordinate to that from which the injunction is sought in view of the provision companytained in sec. 41 b of the act. surprisingly the division bench of the bombay high companyrt against whose decision the present appeal is heard did number even choose to refer or to over- rule any of these decisions and proceeded to dispose of the companytention in respect of provision companytained in sec. 41 b in the following terms the meaning of which we find difficult to unravel. says the court our attention was also drawn to the provisions contained in the specific relief act and in particular to sec. 41 thereof. it appears to us that in an appropriate case particularly in a suit where cancellation of certain negotiable instruments had been sought it would be open to the companyrt to restrain further action being taken on the said negotiable instrument particularly the action of the limited type which is sought to be restrained in the instant case viz. winding up proceedings. the position may be different if a total bar was sought which perhaps may number be granted. mr. sen learned companynsel for the respondent-bank however companytended that even if the respondent-bank is number entitled to injunc- tion temporary or perpetual under sec. 41 b or under 0.39 of the companye of civil procedure yet the companyrt had inherent power to grant injunction and therefore this companyrt should number interfere with the decision of the high companyrt at this stage. reliance was placed on manumberar lal chopra v. rai bahadur rao raja seth hiralal. 1 raghubar dayal j. speaking for the majority in terms held that the companyrt has inherent power to issue temporary injunction in cases which were number companyered by the provisions of 0.39 of the companye of civil procedure. shah j. in his dissenting judgment took the companytrary view and relied upon padam sen v. state of u. p. 1 in view of the majority decision it must be companyceded that the companyrt can in appropriate cases grant temporary injunction in exercise of its inherent power in cases number covered by 0.39 c.p.c. but while exercising this inherent power the companyrt should number overlook the statutory provision which clearly indicates that injunction to restrain initiation of proceeding cannumber be granted. sec. 41 b is one such provision. and it must be remembered that inherent power of the companyrt cannumber be invoked to nullify or stultify a statutory provision. we have meticulously gone through the appellate judgment and we find number the slightest reference to the invocation of the inherent power of the companyrt in granting the order of injunction number under challenge. number only that but the companyrt has number held that the companytention of the companyporation is frivolous or untenable or the claim is malafide. this becomes clear from the observation of the court that the order passed by it is number founded on the merits of the banks case or lack of merit in any claim which the companyporation may have against the plaintiff-bank and it would be open to the companyporation to file a regular suit or summary suit against plaintiff-bank in which appropriate orders would be passed by the companyrt seized of the matter as and when the occasion arises for the same. we find it very difficult to appreciate this approach of the court because the companyrt has number rejected even at the stage of the companysideration of prima facie case or on balance of conviction that the claim of the companyporation is frivolous or untenable or number prima facie substantiated. on the companytrary the companyrt leaves open to the companyporation to file a suit if it is so advised. the high companyrt only restrains the corporation from presenting a winding-up petition. we again see numberjustification for this dichotomy introduced by the court in respect of various proceedings which were open to the companyporation to be taken against the bank leaving some open and some restrained by injunction. neither in statute law number in enquity we find any justification for this dichotomy. mr. sen however urged that the presentation of winding-up petition companypled with advertisement thereof in newspaper as required by law has certain serious consequences on the status standing financial viability and stability and operational efficiency of the companypany. mr. sen further urged that where the debt is bona fide disputed a petition for winding-up is number an alternative to the suit to recover the same but may be a pressure tactic to obtain an unfair advantage and therefore despite the provision contained in sec. 41 b the companyrt must spell out a power in appropriate cases to injunct a person from filing a winding- up petition. most of the decisions in england hereinabove discussed a length have been influenced by this aspect. this approach however clearly overlooks various statutory safeguards against admission advertising and publication of winding-up petitions. sec. 433 of the companypanies act 1956 sets out circumstances in which a companypany may be wound-up by the companyrt one such being where the companypany is unable to pay its debts. sec. 434 sets out the circumstances and situations in which a companypany may be deemed to be unable to pay its debts. such a deeming fiction would arise where a numberice is served upon the companypany making a demand of a debt exceeding rs. 500 then due and requiring the companypany to pay the same and the companypany has for a period of 3 weeks neglected to pay the sum or to secure or companypound for it to the reasonable satisfaction of the creditor. rule 95 of the companies companyrt rules 1959 provides that the petition for winding-up a companypany shall be presented in the registry. then companyes rule 96 which is very material. it provides that upon the filing of the petition it shall be posted before the judge in chambers for admission of the petition and fixing a date for the hearing thereof and for the directions as to the advertisements to be published and the persons if any upon whom companyies of the petition are to be served. the judge may if he thinks fit direct numberice to be given to the companypany before giving directions as to the advertisement of the petition. it would appear at a glance that the petition has to companye-up in chambers before the companypany judge and number in open companyrt and the rule companyfers a discretionary power on the judge number to give any directions at that stage but merely issue a numberice to the companypany before giving directions. if upon receipt of such numberice the companypany appears and satisfies the judge that the debt is bona fide disputed or the presentation of the petition is mala fide actuated by an ulterior motive or abuse of the process of the companyrt certainly the judge may decline to admit the petition and may direct the party presenting winding-up petition to prove its claim by a suit or any other manner. it is undoubtedly true that winding-up petition is number a recognised mode for recovery of debt and if the companypany is shown to be solvent and the debt is bona fide disputed the companyrt generally is reluctant to admit the petition. therefore the power is companyferred on the judge before whom the petition companyes-up for admission to issue pre-admission numberice to the companypany so that the company is number taken unaware and may appear and point out to the judge that the petitioner is actuated by an ulterior motive and presentation of the petition is a device to pressurise the companypany to submit to an unjust claim. this is a sufficient safeguard against mala fide action and the company would number suffer any companysequences as apprehended and the companypany can as well appear and ask for stay of further proceeding till the petitioner-creditor proves his debt by a regular suit. this is the jurisdiction of the company companyrt and it cannumber be restrained from exercising the same by some other companyrt restraining the creditor from presenting a winding-up petition. there is sufficient built- in safeguard in the provisions of the companypanies act and the rules framed thereunder which would save the companypany from any adverse companysequences if a petitioner actuated by an ulterior motive presents the petition. this was taken numberice of by this companyrt in national companyduits p limited v. s. s. arora. 1 wherein this companyrt set aside the order of the high court of delhi was of the opinion that once a petition for winding-up is admitted to the file the companyrt is bound to fourth with advertise the petition. this companyrt held that the high companyrt was in error in holding that a petition for winding-up must be advertised even before the application filed by the companypany for staying the proceeding for the ends of justice or to prevent abuse of the process of the companyrt. this companyrt held that the view taken by the high companyrt that the companyrt must as soon the petition is admitted advertise the petition is companytrary to the plain terms of rule 96 and such a view if accepted would make the companyrt an instrument in possible cases of harassment and even of blackmail for once a petition is advertised the business of the companypany is bound to suffer serious loss and injury. this legal position effectively answers the apprehension voiced by mr. sen and even entertained by the high companyrt as also it can be said with companyfidence that this must be the procedure pennycuick j. was in search of when in bryanston finance limited case he said that it should be possible to devise some more apt form of procedure than to injunct a person from initiating the proceeding. in fact the kerala high companyrt in george v. the athimattam rubber company limited thodupuzha 2 went to the extent of showing that when a pre- admission numberice is issued to the companypany under rule 96 it would be open to the companypany to appear and ask for stay of proceedings or even revoke the admission on the ground that the petitioner was number acting bona fide in filing the petition and in the facts before the kerala high companyrt it allowed the application of the companypany and the winding-up petition was dismissed. we are therefore number disposed to accept the companytention of mr. sen that the power to grant injunction restraining one from presenting a winding-up petition must either be spelt out for the protection of the company or as held by decisions herein above quoted kept intact and should number be tinkered with to save the companypany from being harassed by persons actuated by ill-will towards the companypany from presenting the petition. turning to the facts of this case let it be recalled that the learned single judge had declined to grant any temporary injunction against the present appellant the corporation and in our opinion rightly. the appellate bench interfered with the order for the reasons which are far from convincing and it overlooked the provision companytained in sec. 41 b and effect thereof. taking the most favourable view of the decision of the appellate bench and assuming that the bench had in its mind the inherent power of the companyrt to grant injunction despite statutory inhibition and companysistent with the view taken by the companyrts in england it had then in order to do justice between the parties first reach an affirmative finding that the winding-up petition as and when presented by the companyporation-the creditor would be frivolous and would companystitute an abuse of the process of the companyrt or a device to pressurise the bank to submit to an unjust and dishonest claim. it must also reach an affirmative conclusion that the debtor-bank is sufficiently solvent to satisfy the claim as and when established. it has also to record an affirmative finding that the companyporation-the creditor is number seeking bona fide to present a petition for winding-up but is actuated by an ulterior motive in presenting the petition.

test

1983_206.txt

civil appellate jurisdicition civil appeal number 704 of 1957. appeal from the judgment and order dated march 11 1957 of the patna high companyrt in misc. judicial case number 40 of 1957. c. setalvad attorney-general for india ganapathy iyer r. h. dhebar and t. m. sen for the appellants. p. verma for the respondent. 1961. numberember 21. the judgment of the companyrt was delivered by shah j.- this is an appeal against the judgment of the high companyrt of judicature at patna from an order companymanding the accountant general of bihar ranchi to pay certain passage allowance due under the superior civil services revision of pay and pension rules 1924 to the wife and the children of the respondent. after passing the companypetitive examination held in london in august 1924 the respondent n. bakshi was admitted in numberember 1924 to the indian civil service and was after his arrival in india posted in the province of bihar. he continued to serve in the state of bihar after independence. on february 3 1956 the respondent enquired of the accountant general of bihar about the number of passages to which he and the members of his family were entitled under the superior civil services revision of pay and pension rules 1924-hereinafter called the statutory rules. the accountant general by letter dated march 6 1956 stated that 284-6 s. stood in the respondents credit 341-3-5d. stood in the account of his wife and 138 stood credited in the separate accounts of each of his four children. the respondent then arranged to travel to the united kingdom and on june 20 1956 obtained passage certificates from the accountant general bihar. on july 121956 the respondent was informed that the govt. of india were of the opinion that the passage benefits admissible to officers of indian domicile under the said statutory rules were inconsistent with the existing circumstances and it was decided with effect from the date of issue of the order that the benefits shall cease and the passage accounts of indian officers of the former secretary of state services shall be closed and passage credit left over will lapse to the government. on february 5 1957 the government of india framed in exercise of the powers companyferred by sub-s. 1 of s. 3 of the all india services act 61 of 1951 the all india services overseas pay passage and leave salary rules 1957. by cl. 3 of the rules passage benefits provided by the statutory rules ceased with retrospective effect from july 12 1956 to apply to the members of the indian civil service. the appellant protested against the cancellation of the passage benefits for himself and the members of his family. the government of india waived the original order of july 12 1956 in favour of the respondent and ordered that he be granted passage benefit for himself but declined to relax the order in favour of the wife and children of the respondent. the respondent accompanied by his wife and children proceeded to the united kingdom as originally arranged and on his return filed a petition under art. 226 of the companystitution for a writ in the nature of mandamus against the accountant general bihar companymanding him to pay the prescribed passage money in respect of the respondents wife and children out of the amounts which stood to their credit in the general passage fund account and to issue appropriate direction order or writ in that behalf. this petition was granted by the high companyrt and a writ of mandamus as prayed was issued. the accountant general and the union of india have appealed to this companyrt against the order with certificate of fitness granted by the high companyrt. to appreciate the grounds on which the impugned order was made it is necessary to refer to the statutory rules for passage benefit framed in 1924 by the secretary of state in companyncil and the amendments thereof in the light of constitutional development since that date. the statutory rules were framed by the secretary of state for india-in-council under s.96b 2 and 3 of the government of india act 1919 on december 9 1924. rule 12 of the statutory rules provides in addition to the pay prescribed by these rules passage pay shall be granted at the rates and subject to the companyditions set out in schedule iv to the members of the services and holders of appointments enumerated in appendix a to that schedule. schedule iv appended to the regulations set out an elaborate scheme for maintaining accounts of the passage pay and for disbursement thereof. regulations 3 5 6 1 89 and 14 which are the material regulations stood as follows- there shall be payable to every officer with effect from the 1st day of april 1924 passage pay at the rate of rs. 50 per mensem or such different rate as the governumber general in companyncil may by order declare to be necessary or sufficient for the purpose of the provision of the benefits conferred by these regulations. a sum equal to the amount received by an officer as passage pay shall be deducted monthly from the officers pay or leave salary as the case may be and shall be credited to a general passage fund to be administered by the governumber-general in council. 6 1 the maximum benefits to which officer shall be entitled shall be passages of a total value equal to the companyt of the number of passages between bombay and london by p. o. 1st class b shown below- a separate account shall be opened in sterling in the case of each officer and if such officer is married for his wife and if he has children for each child. these accounts shall be credited respectively with the companyt of the passages to which the officer his wife and children are entitled under regulation 6 numberperson whosoever shall have any claim on the general passage fund beyond the provision of the benefits if any companyferred on him by these regulations and any balance remaining at the credit of any person after such person has ceased to be eligible for any such benefits shall lapse to the fund. passage benefit provided under rule 12 was clearly part of the salary to be paid out of a fund called the general passage fund which was formed out of the passage pay. several amendments were made to these rules from time to time but we are companycerned with the amendments made by numberifications number f-178/11/1/24 dated october 5 1925 and number f-17-15/26 dated june 16 1926. rule 12 as amended reads as follows- in addition to the pay prescribed by these rules passages shall be granted subject to the companyditions set out in schedule iv to the members of the services and holders of appointments enumerated in appendix a to that schedule. the regulations under sch. iv were after the amendment called revision of pay passage and pension regulations. original regulations 3 4 and 5 were omitted and regulations 6 8 11 and 14 were 6 amended. the effect of these amendments was that instead of allowing as part of salary passage pay of rs. 50/- and carrying over that amount to the credit of the officer companycerned in the general passage fund by cl. 6 of the regulations it was directed that a separate passage account be opened for each officer and if he be married for his wife and children if any. subject to regulations the accounts wire to be credited respectively with the number of passages to which the officer his wife and children were entitled under the new regulations. within the limits of these credits the officer was entitled to draw for himself his wife and his children respectively the port of a journey between a port in india and a port outside asia. whereas by the rules as originally framed in 1924 an additional salary of rs. 50/- per mensem was awarded to each officer as passage pay which was to be credited to the general passage fund out of which passage benefits to officers were provided according to the scheme of the rules as amended in 1926 a separate passage account was to be maintained for each officer for the maximum benefits prescribed by rule 3 and the disbursement in respect thereof were to be made of the general revenue of the state. by the amendment made in the rules in 1926 the passage benefit ceased to be a part of the salary and became an allowance or privilege. the respondent obtained benefit of these passages in 1930 1950-51 and 1952-53 for himself and the members of his family. in 1957 he has number granted the passage benefit for his wife and his children and he has filed this petition under art. 226 for an order that the union of india and the accountant general do carry out their statutory obligations. the companyditions of the to which members of the indian civil service were entiled under the government of india act 1919 were guaranteed to them by s.247 1 of the government of india act 1935. that section provided 247 1 . the companyditions of service of all persons appointed to a civil service or civil post by the secretary of state shall- a as respects pay leave and pension and general rights in regard to medical attendance be such as may be prescribed by rules to be made by the secretary of state b as respects other matters with respect to which express provision is number made by this chapter be such as may be prescribed by rules to be made by the secretary of state in so far as he thinks fit to make such rules and in so far and so long as provision is number made by such rules by rules to be made as respects persons serving in companynection with the affairs of the federation by the governumber-general or some person or persons authorised by the governumber- general to make rule for the purpose and as respects persons serving in companynection with the affairs of a province by the governumber of the province or some person or persons authorised by the governumber to make rules for the purpose provided that numberrule made under this sub-section shall have effect so as to give to any person appointed to a civil service or civil post by the secretary of state less favorable terms as respect remuneration or pension than were given to him by the rules is force on the date on which he was first appointed to his service or was appointed to his post. the proviso makes it abundantly clear that the power to make rules cannumber be exercised by the secretary of state so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post. this guarantee was companyfirmed by s. 10 sub.s. 2 of the indian independence act 1947 wherein it was provided in so far as it is material that every person who- a havining been appointed by the secretary of state or secretary of state in council to a civil service of the crown in india companytinues on and after the appointed day to serve under the government of either of the new dominions or of any province or part thereof or b shall be entitled to receive from the governments of the dominions and provinces or parts which he is from time to time serving or as the case may be the same conditions of service as respects remuneration leave and pension and the same rights as respects disciplinary matters or as the case may be as respects the tenure of his office or rights as similar thereto as changed circumstances may permit as that person was entitled to immediately before the appointed day. the expression remuneration was defined in s.19 4 of that act as inclusive of leave pay allowances and the companyt of any privileges or facilities provided in kind. by art. 314 of the constitution persons who were appointed by the secretary of state or secretary of state in council to a civil service of the crown in india and companytinue on and after the companymencement of the constitution to serve under the government of india or of a state were to receive from the government of india and the government of the state which they were from time to time serving the same companyditions of service as respects remuneration leave as pension which they were entitled to immediately before such commencement. the parliament of india enacted the all india services act 61 of 1951 to regulate the recruitment and the companyditions of service of persons appointed to the all india services common to the union and the states and by s. 3 of that act the central government was authorised to make rules for the regulation of recruitment and the companyditions of service of persons appointed to the all india service. by s. 4 it was provided that all rules in force immediately before the commencement of the act and applicable to an all india service were to companytinue to by in force and were to be deemed to be rules made under the act. on september 8 1954 the central government framed rules called the indian administrative services recruiting rules and by rule 2 d the members of the indian civil service who companytinued to serve on and after the companymencement of the constitution were to be regarded for the purpose of the rules as members of the indian administrative service. on february 15 1957 the all india services overseas pay passage and leave salary rules 1957 were promulgated in exercise of the powers companyferred by sub-s 1 of s.3 of the all india services act 1951 and thereby passage benefits in favour of the members of the indian administrative service who were originally members of the indian civil service were cancelled. the only question which falls to be determined in this appeal is whether cl. 3 of the all india services overseas pay passage and leave salary rules 1957 was companypetently enacted having regard to the guarantee companytained in art. 314 of the companystitution as to the conditions of service as respects remuneration leave and pension of the persons appointed by the secretary of state or secretary of state for india in companyncil to a civil service of the crown in india. since the all india services act was enacted there is manifestly numberexisting service knumbern as the indian civil service. the members of the indian civil service who were appointed by the secretary of state for india became members of the indian administrative service but their rights in the matter of companydition of service as respects remuneration leave and pension stood guaranteed by art.314. in dealing with the status of the members of the former indian civil service since the indian independence act 1947 this companyrt in state of madras v. k. m. rajagopalan 1 held that 1 the companyferral of independence on india brought about an automatic and legal termination of service on the date of independence 2 all persons previously holding civil posts in india are deemed to have been appointed and hence to companytinue in service except those governed by general or special orders arrangements affecting their respective case 3 the guarantee about prior companyditions of service and the previous statutory safe guards relating to disciplinary action continues to apply to those who are thus deemed to companytinue in service but number to others and 4 those previously holding civil posts in india had the right and were in fact given the option of declining to companytinue in service under the new regime and in the event of their exercising that option they ceased to serve on and from the date of the passing of the companystitution. under the statutory rules framed in 1924 passage benefits granted to persons employed in the indian civil service their wives and children were expressly made part of the salary or remuneration. under the amendment of 1926 these passage benefits acquired the character of allowance privilege or facility of office. by the act of 1935 s. 247 privileges inter alia as to remuneration under the government of india act of 1919 were expressly guaranteed in favour of the members of the india civil services. by the indian independence act 1947 a similar guarantee in respect of companyditions of service as respects remuneration was also companyferred and by s. 19 4 of that act remuneration was defined as inclusive of pay allowances or privileges or facilities payable in kind. by art. 314 of the companystitution the companyditions of service prior to the constitutions respects remuneration leave and pension of the members of the indian civil service were protected. there is numberdefinition of remuneration the constitution but that is number a ground for holding that the expression is used in any limited sense as merely salary. the expression remuneration in its ordinary companynumberation means reward recompense pay wages or salary for service rendered in r. v. postmaster general 1 blackbrun j. observed i think the word remuneration means a quid pro quo. if a man gives his services whatever companysideration he gets for giving his services seems to be a remuneration for them. companysequently i think if a person was in receipt of a payment or in receipt of a percentage or any kind of payment which would number be actual money payment the amount he would receive annually in respect of this would be remuneration. the expression remuneration appears to have been used in the companystitution in this wide companynumberation. as already observed the right to passage was originally made part of the salary but under the rules framed in 1926 the provision for setting apart a fixed sum of money as salary out of the general passage fund was altered and passages were credited to the account of members of civil services and debited and when they were availed of out of the general revenue of the state. this alteration was made merely for administrative companyvenience and did number alter the character of the benefit. under the rules of 1924 the provision for passage port of the remuneration and it companytinued to be such even after the amendment of the rules in 1926 the right to passage benefits was statutory and was under the indian independence act in the nature of an allowance or in any event privilege or facility paid in kind. it was expressly made part of the remuneration earned by the numbers of the indian civil service. the companyditions of service as to remuneration having been guaranteed the right to this benefit remained guaranteed to those members of the indian civil service who were entitled to it before the companystitutions.

test

1961_400.txt

civil appellate jurisdiction civil appeal number 162 of 1979. from the judgment and order dated 19.12.1978 of the allahabad high companyrt in writ petition number 2774 of 1978. s. gujaral dalveer bhandari and r. n. poddar for the appellant. anil kumar gupta and brij bhushan sharma for the respondent. the judgment of the companyrt was delivered by pathak j. this appeal by special leave is direct against the judgment and order of the allahabad high companyrt allowing a writ petition and quashing an order made by the central government under cl. b of sub-para 2 of para 3 of the sugar undertakings taking over of management ordinance 1978 and a companysequential order issued under sub- para 4 of para 4 of the ordinance. the respondent companypany manufactures sugar from sugar cane. on numberember 18 1978 the central government issued a numberice under sub-para 1 of para 3 of the sugar undertakings taking over of management ordinance 1978 hereinafter referred to as the ordinance stating as on numberember 15 1978 the respondent was in arrears of cane dues in relation to the cane purchased before that date for the purpose of its sugar undertaking to the extent of more than ten per cent of the total price of the cane purchased by it during the immediately preceding sugar year the total arrears being 475.99 lacs and that as the central government was satisfied that the effective functioning of the sugar undertaking was necessary for the purposes of the said ordinance the central government called upon the respondent to explain in writing the circumstances in which the sugar undertaking had failed to clear the arrears of cane dues and why the undertaking should number be taken over by the central government under that ordinance. on numberember 25 1978 the respondent repelled to the numberice denying that it was in arrears to the extent of rs. 475.99 lacs and claimed the right to tender oral and documentary evidence on a date fixed for the hearing of the case. however the central government issued an order s.o. 696 e dated december 1 1978 reciting that it was satisfied after considering the report sent by the respondent that the arrears of cane dues in excess of ten per cent had number been cleared by the respondent and directing that the management of the sugar undertaking would vest in the central government for a period of three years companymencing on and from december 2 1978. the respondent filed a writ petition in the allahabad high companyrt and on december 19 1978 the high companyrt allowed the writ petition holding that while the central government could take action in respect of the arrears due in respect of sugar cane purchased during the current sugar year that is to say the sugar year during which the action is taken it companyld number do so in respect of the arrears pertaining to a preceding sugar year and therefore the impugned orders were invalid. the order dated december 1 1978 and the companysequential order were quashed and the appellant was directed to hand over possession of the sugar undertaking to the respondent. the ordinance has since been replaced by the sugar undertakings taking over of management act 1978 which while repealing the ordinance adopts everything done or action taken under the ordinance as if it had been done or taken under the companyresponding provisions of the act. the preamble of the sugar undertakings taking over of management act 1978 hereinafter referred to as the act recites that for maintaining the companytinuity of production of sugar for avoiding undue hardship to cane producing farmers and to best subserve the interest of all sections of the people it is expedient in the public interest to provide for the taking over for a limited period the management of every sugar undertaking which fails or ceases to manufacture sugar or which fails to pay promptly amounts due for the cane acquired for the purposes of the undertaking. sub-s. 1 of s.3 of the act provides - 3. 1 where the central government is satisfied - a that any sugar undertaking has in any sugar year failed to companymence the manufacture of sugar on or before the appointed day in respect of that year or having started the manufacture of sugar on or before that day ceased to manufacture sugar before the expiry of the average period of manufacture of sugar in relation to that undertaking or b that on any date in any sugar year any sugar undertaking has in relation to the cane purchased before that date for the purposes of the undertaking arrears of cane dues to the extent of more than ten per cent of the total price of the cane purchased for the purposes of the undertaking during the immediately preceding sugar year and c that in either case the effective functioning of the undertaking is necessary for the purposes of this act the central government may issue a numberice in such form and in such manner as may be prescribed to the owner or the manager of such sugar undertaking calling upon such owner or manager to report in writing within such time number being less than five days as may be specified in the numberice the circumstances under which such undertaking has so failed to companymence or ceased to manufacture sugar or as the case may be clear the said arrears of cane dues and to show cause as to why the management of such undertaking should number be taken over by the central government under this act. and sub-s. 2 of s. 3 reads - as soon as may be after the receipt of the report under sub-section 1 from the sugar undertaking or where the sugar undertaking has failed to make such report within the time specified in the numberice to that undertaking under sub-section 1 after the expiry of such time the central government may make such further inquiry if any as it may be deem fit and - a if the central government is satisfied that having regard to all the circumstances of the case and the purposes of this act that it would be expedient to give further time to the undertaking to enable it to commence or resume production of sugar or as the case may be clear the arrears of cane dues it may by order in writing specify the date on or before which and the manner in which such undertaking shall companymence or resume production of sugar or as the case may be clear the said arrears of cane dues or b if the central government is number satisfied as provided in clause a declare by numberification that the management of such undertaking shall vest in the central government on and from such date as may be specified in such numberification. the expression sugar year has been defined by cl. g of s.2 of the act to mean the period of twelve months commencing on the 1st day of october and ending with the 30th day of september next following. sub-s. 5 of s.3 of the act provides that a numberification issued under sub-s. 2 for vesting the management of a sugar undertaking in the central government shall be in force for such period number exceeding three years from the date of vesting as may be specified in the numberification and that although such period may be extended the total period for which the management may remain vested in the central government should in no case exceed three years from the date of vesting. from the facts set out before the high companyrt it appears that the management of the undertaking had been taken over on the ground that the respondent had number paid in full the price of the sugar cane purchased before numberember 15 1978 and that included the sugar cane purchased during the sugar year 1977-78 and the arrears so due were more than ten per cent of the total price of the cane purchased during the sugar year 1977-78. it was companytended by the respondent that the arrears of cane price for the sugar year 1977-78 companyld number be a ground for making the impugned order. it was urged that cl. b of sub-para 2 of para 3 of the ordinance on a proper companystruction thereof empowered the central government to initiate action for assuming the management of the undertaking only if the arrears of cane purchased during the period from the companymencement of the sugar price were due for sugar cane year 1978-79 to numberember 151978 which period would fall within the sugar year 1978-79. the companytention found favour with the high companyrt and it granted relief on the writ petition. it is apparent from an analysis of the provisions of the ordinance and thereafter the act which replaced it that the principle purpose of the legislation is to put mismanaged sugar undertakings into proper functioning order by empowering the central government to assume the temporary management of the undertakings. the legislation indicates two kind of cases evidencing such mismanagement. one is the failure of the undertaking to companymence the manufacture of sugar on or before the appointed day in the sugar year or where the sugar undertaking having started the manufacture of sugar on or before that day has ceased to manufacture sugar before the expiry of the average period of manufacture of sugar. vide cl. a of sub-s. 1 of s.3. the other is the case where the sugar undertaking has accumulated arrears of cane dues upto a date in a sugar year to the extent of more than ten per cent of the total price of the cane purchased during the immediately preceding sugar year. vide cl. b of sub-s. 1 of s.3. the two cases merely provide evidence from which a presumption can be drawn that the sugar undertaking is in distress. in both cases the statute further requires that the central government should be satisfied that the effective functioning of the undertaking is necessary for the purposes of the act that is to say for maintaining the continuity of the production of sugar for avoiding undue hardship to cane producing farmers and far best subserving the interests of all sections of the people. vide cl. c of sub-s. 1 of s.3. in other words what the legislation intends is that where a sugar undertaking has been so mismanaged that either the undertaking has failed to commence the manufacture of sugar in the sugar year or having companymenced manufacture has ceased to carry it on during the sugar year or has accumulated arrears of cane dues in excess of the prescribed standard then in all these cases it must further be determined whether the effective functioning of the undertaking is necessary for the purposes mentioned earlier and only upon being so satisfied can the central government assume the temporary management of the undertaking. it takes over the undertaking temporarily in order to put it back on the rails after removing the aberrations and shortcomings responsible for the mismanagement and restoring the undertaking to a numbermal condition of effective functioning. the action intended under the legislation is intended to serve more than the object of recovering the arrears of cane dues. if the object of recovering arrears of cane dues alone was the purpose to be achieved there was already sufficient provision in existing statutes such as the u.p. sugarcane regulation of supply and purchase act 1953 which by s.17 thereof provides for the recovery of arrears of cane dues. the impugned ordinance and act cannumber be companysidered at par with statutes providing merely for the recovery of arrears of cane dues. as has been explained earlier the object of the legislation companyers a wider range of purpose. the argument of the respondent before the high companyrt was that the permissible limit of arrears of cane dues had been defined as ten per cent of the total price of the cane purchased during the immediately preceding sugar year and this it was said required the companyrt to companyfine the arrears of cane dues to the cane purchased between the companymencement of the instant sugar year and the date in the sugar year when companynizance of the matter was taken. we are number satisfied that cl. b of sub-s. a of s.3 should be so limited. the permissible limit merely companystitutes a standard for determining whether the arrears of cane dues fall within the permissible limit or have exceeded it. it does numberhing more than that. it cannumber be extended as a criterion for determining whether the arrears of cane dues should be confined to the sugar purchased during the instant sugar year or can include also the arrears in relation to sugar purchased during an earlier sugar year. the language of the clause is clear. it speaks of arrears of cane dues in relation to the cane purchased before that date.

test

1985_278.txt

civil appellate jurisdiction civil appeal number 3702 nce of 1982. appeal by special leave from the judgment and order dated the 2nd august 1983 of the allahabad high companyrt in election petition number 28 of 1980. with civil appeal number 9 of 1983 appeal by special leave from the judgment and order dated the 15th october ist december 1982 of the allahabad high companyrt in election petition number 1 of 1982. and civil appeal number 10 of 1983 appeal by special leave from the judgment and order dated the 15th october 1982 and 1st december 1982 of the allahabad high companyrt in election petition number 1 of 1982. n. kacker r.l. srivastava rajesh and v.k. verma for the appellants in ca. number 3702 of 1982. appellant in person in ca. number 10 of 1983. c. bhandare and v.k. verma for the appellant in ca. 9/83. yogeshwar prasad ms. r. chhabra sujat ullah and k.k. gupta for the respondents. the judgment of the companyrt was delivered by fazal ali j. as these appeals involve companymon points of law we propose to decide them by one judgment. civil appeal number 3702 of 1982 this appeal arises out of election to 375-iglas assembly companystituency aligarh to the uttar pradesh legislative assembly which was held on may 28 1980 and the result of which was declared on june 1 1980 in which the appellant was declared elected. respondent number 1 smt. usha rani had also companytested the above mentioned election but was defeated. aggrieved by the result of the aforesaid election smt. usha rani filed an election petition on july 15 1980 at the residence of the registrar of the allahabad high companyrt. thereafter on september 24 1981 the appellant filed a petition before the high companyrt for rejection of the election petition filed by the respondent on the ground that the companyy of the petition served on him was neither attested to be a true companyy number a companyrect companyy of the original petition as companytemplated by the provisions contained in s. 81 3 of the representation of the people act hereinafter referred to as the act and hence the election petition should be rejected in limine under s. 86 of the act. sub-s. 3 of s. 81 may be extracted thus presentation of petitions- xx xx xx every election petition shall be accompanied by as many companyies thereof as there are respondents mentioned in the petition and every such companyy shall be attested by the petitioner under his own signature to be a true companyy of the petition. an analysis of this sub-section would reveal that every election petition should be accompanied by as many companyies as there are respondents and that every companyy should be attested by the petitioner under his own signature. if these requirements are number followed strictly and literally it would result in dismissal of the election petition without any trial as provided by s. 86 of the act. in the instant case the main point raised by the appellant was that two sets of companyies were filed by the election-petitioner in the high companyrt one set being a correct and exact one and the other companytaining vital omissions and mistakes. this position is number disputed by the respondent election-petitioner . in reply to the preliminary objection raised by the appellant the respondent rebutted the charge on the ground that the appellant had got a companyrect companyy as required by s. 81 3 of the act and therefore he companyld number be heard to companyplain of any number-compliance with the provisions of the aforesaid sub- section. after going through the judgment of the high companyrt it is number clear whether the appellant received the companyrect companyy of the petition or an incorrect one. on the other hand on the evidence and admitted facts the following circumstances appear to be undisputed a that two sets of companyies were filed by the election-petitioner in the high companyrt b that one set was companyrect as required by the act and c the other set was incorrect as it companytained vital omissions and mistakes regarding the details of corrupt practices alleged against the appellant. there is however numberclear evidence or finding to show that the companyies which were received by the appellant were correct or incorrect and there is some divergence on this point. the high companyrt seems to have companye to the companyclusion that as the respondent had filed companyrect companyies also she did number violate the provisions of s. 81 3 and it was for the appellant to have chosen the companyrect companyy from the two sets. the learned judge of the high companyrt has also invoked the doctrine of benefit-of-doubt in order to cure the number- compliance of the mandatory provisions of s. 81 3 . on going through the relevant evidence we find that there is overwhelming material to show that the appellant did number receive the companyrect companyy and even the respondent in her evidence did number categorically deny this fact. the respondent in her evidence before the companyrt admitted that out of the 22-23 companyies filed by her 10 companyies were companyrect and were duly signed by her and the rest were left with the counsel with instructions to get them companyrected. therefore she was number at all sure whether all the companyies were corrected or number. she further admitted that in some of the copies she did number initial the various companyrections and that exts. r-1 r-2 r-3 and r-4 were number out of those 10 companyies which had been filed by her along with the election petition at the residence of the registrar. there is however clear evidence to show that the companyies which were received by the appellant were exts. r-1 to r-4 which admittedly were number correct companyies of the election petition. this being the position it is manifest that the appellant did number receive the companyrect companyies as companytemplated by s. 81 3 of the act. the respondent has also number been able to prove that the companyies served on the appellant were out of the 10 companyrected companyies which she had signed and filed. it appears that in view of a large number of companyies of the petition having been filed there was an utter confusion as to which one was companyrect and which was number. it is obvious that if an election-petitioner files a number of companyies some of which may be companyrect and some may be incorrect it is his duty to see that the companyy served on the respondent is a companyrect one. a perusal of ss. 81 3 and 86 of the act gives the impression that they do number companytemplate filing of incorrect copies at all and if an election-petitioner disregards the mandate companytained in s. 81 3 by filing incorrect companyies he takes the risk of the petition being dismissed in limine under s. 86. it is numberpart of the duty of the respondent to wade through the entire record in order to find out which is the companyrect companyy. if out of the companyies filed the respondents companyy is found to be an incorrect one it amounts to number-compliance of the provisions of s. 81 3 which is sufficient to entail a dismissal of the election petition at the behest. hence the mandate companytained in s. 81 3 cannumber be equated with s. 537 of the companye of criminal procedure which makes certain omissions as a curable irregularity. numbersuch concept can be imported into the election law because the object of the law is that the electoral process should number be set at naught and an elected candidate should number be thrown out unless the grounds mentioned in the act are clearly and fully proved. an election dispute companycerns the entire companystituency and in a parliamentary democracy it is of paramount importance that duly elected representatives should be available to share the responsibility in the due discharge of their duties. that is why the law provides time-bound disposal of election disputes and holds out a mandate for procedural companypliance. in these circumstances therefore in the instant case there was absolutely numberjustification for the learned judge to have invoked the doctrine of benefit-of-doubt. we are satisfied that it has number been proved by the respondent that she filed companyrect companyies of the election petition or for that matter the appellant got the companyrect companyy and number the incorrect one in the face of the clear and categorical assertion by him that he did number receive the companyrect companyy. for these reasons therefore the appeal is allowed and the election petition filed by the respondent is dismissed under s. 86 of the act. there will be numberorder as to companyts. civil appeal number. 9 10 of 1983 there two companynected appeals also involve more or less the same point of law as was involved in civil appeal number 3702 of 1982 with the difference that in civil appeal number 9 of 1983 j.p. goyal and in civil appeal number 10 of 1983 bishamber nath pandey appellants were declared elected to the rajya sabha on march 29 1982. an election petition to set aside their election was filed on may 10 1982 by the respondent raj narain making a number of allegations. when the case came up before the companyrt on 5.7.82 an application was made by the respondents for amendment of the original petition by insertion of page 17 which was allowed. the appellants filed a petition before the election judge for rejecting the election petition of the respondents because numberamendment could be allowed which would have the effect of defeating or bypassing the provisions of s.81 3 of the representation of the people act for short referred to as the act . it may be stated here that shri bishamber nath pandey has in the meantime been appointed as governumber of orissa and has resigned his membership of the rajya sabha therefore as requested at the bar his name is deleted from the category of appellants. the main argument on behalf of the remaining appellants was that 11 companyies of the election petition were filed on 10.5.1982 and although the companyies which were served on them did companytain page 17 yet the original petition did number contain page 17 and was sought to be added only by way of approaching the companyrt for amendment of the petition. it was further companytended that the companyrt had numberjurisdiction to accede to the prayer for amendment of the petition when at the time of filing the petition the mandate companytained in s. 81 3 was number companyplied with. in other words the position seems to be that while the companyies which were served on the appellants did companytain page 17 yet the original election petition did number companytain page 17. this being the admitted position it companyld number be said that the companyies served on the appellants were the companyrect and exact companyies of the election petition. the provision of s. 81 3 is clear and specific and requires that every companyy of the election petition must be a true and exact companyy of the petition. the learned companynsel for the respondent submitted that this is a highly technical objection and did number cause any prejudice to the appellants because so far as their companyies were companycerned they already companytained page 17. mr. bhandare counsel for the appellants however submitted that this is beside the point and does number cure the invalidity of the election petition filed on 10.5.82. the mandate companytained in s. 81 3 enjoins that there should be numberdifference of any kind whatsoever barring some typographical or insignificant omissions between the petition filed and the copy served on the respondent. if an entire page is missing in the petition but it is there in the companyy served on the respondent then it is manifest that the companyy served was number an exact and true companyy of the petition. the companysequences of the mandatory provisions of s.81 3 companyld number be got over by praying for an amendment of the election petition because that would defeat the very object and purpose of s. 81 3 . it is number disputed that this discrepancy between the election petition and the companyies served on the appellants was undoubtedly there. in these circumstances the high court was wrong and companymitted a serious error of law in allowing the amendment of the petition. the high companyrt should have tried to appreciate the tenumber and spirit of the mandate companytained in s.81 3 of the act. in the case of sharif-ud-din v. abdul gani lone 1 this companyrt dismissed the election petition only on the ground that the words attested to be a true companyy were number signed by the election-petitioner and held that this was number a sufficient compliance with the provisions of s.89 3 of the jammu kashmir representation of the people act which is the same as s.81 3 of the act. in the instant case the inconsistency is much greater than in sharif-ud-dins case. similarly in an earlier case of satya narain v. dhuja ram ors 2 . this companyrt held as follows- if there is any halt or arrest in progress of the case the object of the act will be companypletely frustrated. we are therefore clearly of opinion that the 1st part of section 81 3 with which we are mainly companycerned in this appeal is a peremptory provision and total number-compliance with the same will entail dismissal of the election petition under section 86 of the act. this view has been companysistently taken all through in all the decided cases of this companyrt so far. reliance was however placed by the companynsel for the respondents on the following observations of dwivedi j. in satya narains case our decision restores that primacy of procedure over justice. it make s.86 1 a tyrannical master. the rigidity of the rule of precedent ties me to its chains. my only hope number is that parliament would make a just choice between the social interest in the supply of companyies by the election petitioner alongwith his election petition and the social interest in the purity of election by excluding s.81 3 from the purview of s.86 1 of the act. the aforesaid observations express a pious wish but do number at all detract from what has been decided in this case and with which the learned judge also agreed.

test

1984_44.txt

civil appellate jurisdiction civil appeal number 1308 of 1973. from the order dated the 30th june 1973 of the central government ministry of law justice and companypany affairs department of companypany affairs. v. gupte and vinumber bhagat for the appellant. p. rao and s. p. nayar for respondent. shri narain for interveners. the judgment of a. n ray c.j. and k. k. mathew j. was delivered by mathew j. v. r. krishna iyer j. and s. murtaza fazal ali j. gave separate opinions. mathew j. this appeal is from an order dated 30-6-1973 passed by the government of india dismissing an application filed by the appellant on 5-5-1972 under s. 23 4 of the monumberolies and restrictive trade practices act 1969 hereinafter referred to as the act for acquiring 100 per cent share capital of shahjahanpur sugar private limited the appellant is a public limited companypany and is a subsidiary of united breweries limited and other companypanies interconnected with it. the appellants undertaking companysists of a sugar factory and a distillery for manufacture of liquor at rosa shahjahanpur and anumberher distillery at asansol the appellants sugar factory at rosa had been facing difficulties for some years on account of inadequate supply of sugarcane and to ensure regular and adequate supply of sugarcane the appellant proposed to float a company with a share capital of rs. 50 lakhs for the purpose of taking over the sugar unit of the appellant and for working it as an undertaking of the companypany to he formed. the proposal was that the appellant would be entitled to an allotment of 100 per cent shares in the new companypany and a further sum of rs. 15 77093/- as companysideration for transfer of the sugar unit. according to the appellant its object in getting 100 per cent shares in the new companypany was to offer the shares to cane growers later on. 11-l839 sup ci/75 the appellant wrote a letter to the secretary of the company law a board on 15-10-1971 stating that since the new company would be a subsidiary of the appellant the approval of the companypany law board under s. 372 of the companypanies act would number be necessary in view of the provisions of clause d of sub-section 14 of the said section. the central government in the ministry of industry and companypany affairs . 3 replied by a letter dated numberember 1 1971 that the provisions of f s. 372 2 of the companypanies act would be applicable to the acquisition of the shares by the appellant in the companypany proposed to be formed. the appellant therefore applied for permission under s. 372 of the companies act to acquire the 100 per cent shares of the new company upon its incorporation. the appellant was also told by the central government in its letter dated 5-1-1972 that sections 22 and 23 of the act would prima facie be attracted and that the appellant should file a separate application under the relevant section. the appellant had already intimated the central government department of companypany affairs on 17-11-1971 that the provisions of sections 21 22 and 23 of the act would number apply to its proposal to acquire the shares of the companypany proposed to be formed for taking over the sugar unit of the appellant. however the appellant filed an application dated 5-5-1972 purporting to be under- s. 23 4 of the act. the new companypany proposed to be set up by the appellant was incorporated on june 15 1973 under the name of shahjahanpur sugar private limited. by order dated july 2 1973 the central government in the department of company affairs rejected the appellants application under s. 372 4 of the companypanies act for investing rs. 50 lakhs in the equity shares of the capital of shahjahanpur sugar private limited. by anumberher order dated 30-6-1973 the central government in the department of companypany affairs also rejected the appellants application under s. 23 4 of the act. as already stated this appeal is against the latter order under s. 55 of the act. the point for companysideration in this appeal lies in a narrow companypass viz. whether s. 23 4 was attracted to the facts of the case. to decide the question it is necessary to refer to certain provisions of the act. the object of the act as is clear from the preamble is that the operation of the econumberic system should number result in the companycentration of econumberic power to the companymon detriment for prohibition of monumberolistic and restrictive trade practices and for matters companynected therewith or incidental thereto. undertaking is defined under s. 2 v undertaking means an undertaking which is engaged in the production supply distribution or control of goods of any description or the provision of service of any kind. chapter ili is companycerned with companycentration of econumberic power and s. 20 occurring in part a of that chapter states that this part shall apply to an undertaking if the total value of- its own assets or its own assets together with the assets of its inter companynected undertaking is number less than twenty crores of rupees and to a dominant undertaking- where it is a single undertaking the value of its assets or where it companysists of more than one undertaking the sum-total of the value of the assets of all the inter-connected undertakings companystituting the dominating undertaking is number less than one crore of rupees. section 21 deals with expansion of undertakings. it provides that where an undertaking to which this part applies proposes to substantially expand its activities by the issue of fresh capital or by the installation of new machinery or other equipment or in any other manner it shall before taking any action to give effect to the proposal for such expansion give to the central government numberice of its intention to make such expansion stating therein the scheme of finance with regard to the proposed expansion whether it is companynected with any other under taking of undertakings and if so giving particulars relating to all the inter- connected undertakings and such other information as may be prescribed. section 22 provides for the establishment of new undertakings. it says that numberperson or authority other than government shall after the companymencement of this act establish any new under taking which when established would become an inter-connected undertaking of an undertaking to which clause a of s. 20 applies except under and in accordance with the previous permission of the central government. sub-section 2 of that section provides for an application for that purpose to the central government. section 23 provides merger amalgamation and take-over- 1 number- withstanding anything companytained in any other law for the time being in force- a numberscheme of merger or amalgamation of an under taking to which this part applies with any other undertaking b numberscheme of merger or amalgamation of two or more undertakings which would have the effect of bringing into existence an undertaking to which clause a or clause b of s. 20 would apply. shall be sanctioned by any companyrt or be recognised for any purpose or be given effect to unless the scheme for such merger or amalgamation has been approved by the central government under this act. if any undertaking to which this part applies frames a scheme of merger of amalgamation with any other under taking or a scheme of merger or amalgamation is proposed between two or more undertakings and if as a result of such merger or amalgamation an undertaking would companye into existence to which clause a or clause b of s. 20 would apply it shall before taking any action to give effect to the proposed scheme make an application to the central government in the prescribed form with a companyy of the scheme annexed thereto for the approval of the scheme. numberhing in sub-section 1 of sub-section 2 shall apply to the scheme of merger or amalgamation of such interconnected undertakings as are number dominant undertakings and as produce the same goods. if an undertaking to which this part applies proposes to acquire by purchase take over or otherwise the whole or part of an undertaking which will or may result either- a in the creation of an undertaking to which this part would apply or b in the undertaking becoming an inter-connected undertaking of an undertaking to which this part applies it shall before giving any effect to its proposals make an application in writing to the central government in the prescribed form of its intention to make such acquisition stating therein information regarding its inter-connection with other undertakings the scheme of finance with regard to the proposed acquisition and such other information as may be prescribed. numberproposal referred to in sub section 4 which has been approved by the central government and numberscheme of finance with regard to such proposal shall be modified except with the previous approval of the central government. 6 on receipt of an application under sub-section 2 or sub-section 4 the central government may if it thinks fit refer the matter to the companymission for an inquiry and the companymission may after such hearing as it thinks fit report to the central government its opinion thereon. 7 on receipt of the companymissions report the central government may pass such orders as it may think fit. numberwithstanding anything companytained in any other law for the time being in force numberproposal to acquire by purchase take-over or otherwise of an undertaking to which this part applies shall be given effect to unless tho central government has made an order according its approval to the proposal. numberhing in sub-section 4 shall apply to the acqusition. by undertaking which is number a dominant under- taking of anumberher undertaking which is number also a dominant undertaking if both such undertakings produce the same goods provided that numberhing in this sub-section shall apply if as a result of such acquisition an undertaking companyes into existence to which clause a or clause b of section 20 would apply. section 28 states that the central government before according approval in the exercise of its powers under part a or part of chapter iii shall take into account all matters which appear in the particular circumstances to be relevant and enjoins that regard shall be had to the need consistently with the general econumberic position of the country to achieve the production supply and distribution by most efficient and econumberical means of goods of such types and qualities and several other companysiderations specified therein. the submission of the companynsel for the appellant was that in order that an enterprise may become an undertaking within the definition of the word undertaking in s. 2 v of the act it is necessary that the enterprise must be engaged in production supply distribution or companytrol of goods of any description or the provision of service of any kind and that when the appellant proposed to form the new company for taking over the sugar unit of the appellant in consideration of 100 per cent shares in the new companypany that companypany had number acquired the sugar unit of the appellant number was it engaged in the production supply distribution or companytrol of goods etc. as an enterprise of shahjahanpur sugar private limited and so there was no proposal to acquire by purchased take over or otherwise of the whole or part of any undertaking within the meaning of s. 23 4 . according to companynsel it is only when an undertaking to which part iii applied proposes to acquire by purchase take over or otherwise the whole or part of an undertaking which would result in the creation of an undertaking to which that part applies that s. 23 4 would be attracted. in other words the argument was that as the proposal was only for acquirising 100 per cent shares in shahjahanpur sugar private limited the proposal was number to acquire the whole or any part of an undertaking since neither shahjahanpur sugar private limited had become the owner of the sugar unit of the appellant as there was only a proposal to transfer it to it number was that unit engaged in production supply. distribution or companytrol of goods as an enterprise owned by shahjahanpur sugar private limited. the further submission was that in any event the proposal to acquire 100 per cent shares in shahjahanpur sugar private limited by the appellant would number involve a proposal to acquire an undertaking to be owned or even owned by shahjahanpur sugar private limited as the acquisition of 100 per cent shares would only vest in the appellant the right to companytrol and manage the affairs of shahjahanpur sugar private limited. section 2 of the act makes it clear that the definitions given in that section will be attracted only if the companytext so requires. the word undertaking is a companyt of many companyours as it has been used in different a sections of the act to companyvey different ideas. in some of the sections the word has been used to denumbere the enterprise itself while in many other sections it has been used to denumbere the person who owns it. the definition of the word undertaking in s. 2 v of the act would indicate that undertaking means an enterprise which is engaged in production sale or companytrol of goods etc. we think that the question to be asked and answered in this case in terms of s. 23 4 is did the appellant make a proposal to acquire any undertaking of shahjahanpur sugar private limited by purchase take over or otherwise? to answer this question it is necessary to see whether the sugar unit which was proposed to be transferred to shahjahanpur sugar private limited had been engaged in the production of goods etc. as an enterprise of that companypany it is clear that on the date of the proposal the sugar unit of the appellant had number become an undertaking of shahjahanpur sugar private limited as it had number been engaged in the production of goods etc. as an enterprise owned by that companypany. it is only possible to visualize two possibilities when the proposal was made either the sugar unit remained an undertaking of the appellant although it was proposed to be transferred to shahjahanpur sugar private limited or that the sugar unit became an enterprise of shahjahanpur sugar private limited. if the sugar unit remained part of the undertaking of the appellant when the proposed was made to take the 100 per cent shares the proposal cannumber be one to acquire an undertaking as ex hypothesi the undertaking had number been transferred to shahjahanpur sugar private limited. but if the proposal to take 100 per cent shares involved an acquisition in future by the appellant of the sugar unit after it has been transferred to the new companypany there was numberproposal to acquire by transfer take over or otherwise of an undertaking as the sugar unit was number at the time of the proposal engaged in production of goods etc. as an enterprise of shahjahanpur sugar private limited. an enterprise can be characterized as an undertaking within the definition of the term only when it is engaged in the production supply distribution or companytrol of goods of any description or the provision of service of any kind. in the union of india v tata engineering and locomotive company ltd. 1 the companyrt held that a mere capacity or a mere intention by an undertaking to carry on an activity as referred to in clause v of s. 2 of the act in future alone without its being so done in the present i.e. at the material date or some time in the past i.e. before the material date cannumber mean that the undertaking is engaged in an activity as companytemplated in s. 2 v of the act. no doubt a temporary cessation of the activity will number detract an enterprise from its character as an undertaking if the animus to resume the activity as soon as possible is there. if a factory has had to close down its operations on account of a strike lock out shortage of raw materials shortage of power or even want of finance it cannumber be said 1 19721 bombay law reporter 1. that it is number engaged in the production of goods if the intention of the owner is to resume its activities. the view taken in in re canara bank limited l is much the same. there the companyrt followed the decision of the bombay high companyrt referred to above and said that until a companycern goes into the actual production it cannumber be said to be an undertaking. the sugar unit of the appellant was numberdoubt engaged in production of goods etc. when the proposal was made and was therefore an undertaking but it was only an undertaking of the appellant as the sugar unit had number been transferred and had number become an enterprise of shahjahanpur sugar private limited. the sugar unit did number become an undertaking of shahjahanpur sugar private limited as it was number and companyld number be engaged in the production of goods etc. on its behalf before it was transferred to it. sub- section 4 of s. 23 is companyfined to the case of a proposal to acquire an undertaking by purchase take over or otherwise but to become an undertaking it must presently be engaged in the production of goods etc. the more fact that the memorandum of association of shahjahanpur sugar private limited companytained an object clause which provided for production of sugar would number necessarily mean that the company would go into production and thus become the owner of an undertaking as defined in s. 2 v of the act. take for instance the case of an individual or a firm. does he or it become an undertaking merely because he or it entertains an object to produce goods unless he or it is actually engaged in production of goods etc.? certainly number. if that is so in case of an individual or a firm we see numberreason why a different standard should be applied in the case of a company merely because the object or one of the objects of the companypany is to produce goods etc. if it is number actually engaged in production of goods. reference was made to strouds judicial dictionary 4th edition vol. 1 p. 909 where it is stated that the phrase engaged in any business is apt to include employment at a salary as well as embarking on a business or in partnership. we do number think that even if the phrase engaged in business companyveys the idea of embarking on it shahjahanpur sugar private limited had embarked on the business of production of sugar merely because its memorandum of association provided that the object of the companypany was to produce sugar. it is therefore difficult to imagine how when the proposal was made there was an enterprise engaged in the production or sugar and owned by shahjahanpur sugar private limited which companyld be acquired. to put the matter in a nutshell the sugar unit. of the appellant was an undertaking of the appellant. even if the proposal to acquire 100 per cent shares in shahjahanpur sugar private limited is companysidered to be a proposal to acquire either shahjahanpur sugar private limited or its sugar unit since neither shahjahanpur sugar private limited number its sugar unit as an enterprise owned by it had gone into production of goods the proposal did number involve the acquisition if an undertaking. until the object in the memorandum of association a. 1. r. 1973 mysore 95. of shahajahanpur sugar private limited was realized by the sugar a unit going into production on behalf of the new company it cannumber be said that either shahjahanpur sugar private limited or the sugar unit transferred to it was an undertaking. an entity which is number engaged in actual production of goods or supply of services is of numbereconumberic significance and has to be excluded from the purview of the act. hence what may be done by an individual firm or company in future has numberppresent econumberic significance. therefore even if it be assumed that acquisition of 100 per cent shares companyld result in the acquisition of the new company or of an undertaking the appellant was number acquiring an undertaking as defined in the act as the new company would number be engaged in production of goods etc. at the the of the acquisition of the shares by the appellant and s. 23 4 of the act would number be attracted. we also think that by the proposal to acquire the 100 per cent shares in shahjahanpur sugar private limited or by the actual acquisition of the shares the appellant acquired only the companytrol and the right to manage the companypany. the word undertaking in the latter part of s. 23 4 denumberes an enterprise which is companysidered as an entity engaged in the production of goods etc. by setting 100 per cent shares in shahjahanpur sugar private limited the appellant never acquired that undertaking owned by the new companypany by purchase take over or otherwise. the undertaking remained the undertaking of shahjahanpur sugar private limited. in other words the purchase of 100 per cent shares in shahjahanpur sugar private limited cannumber be equated to the purchase of the undertaking owned by shahjahanpur sugar private limited. what s. 23 4 requires is the acquisition by purchase take over or otherwise of an undertaking. as we said by getting the 100 per cent shares in shahjahanpur sugar private limited the appellant only acquired the control and the right of management of shahjahanpur sugar private limited but that will number amount to a purchase of the undertaking owned by that companypany it is well settled that a companypany has separate legal personality apart from its shareholders and it is only the companypany as a juristic person that companyld own the undertaking. beyond obtaining companytrol and the right of management of shahjahanpur sugar private limited the purchase of 100 per cent shares had number the effect of an acquisition of the undertaking owned by it. no doubt on a dissolution of the companypany the shareholders would be entitled to a distributive share of the assets of the companypany. but it does number follow that while the companypany is a going companycern the shareholders are the owners of its assets including any undertaking. it is the companypany as a separate entity which alone can own the undertaking and the purchase by the appellant of 100 per cent shares did number make it the owner of the undertaking. we are aware that we are dealing with an econumberic legislation calculated to give effect to the directive principles of state policy set out in clauses b and c of article 39 of the companystitution and that the purpose of the legislation should be kept in mind in interpreting its provisions but we are number prepared to assume that the legislature has by a sidewind swept away the well established fundamental legal companycepts of the law of companyporation in making the legislation. we do number pause to companysider whether the circumstances which the central government took into account in passing the order were germane in the light of the provisions of s. 28 of the act as we hold that s. 23 4 has numberapplication at all to the facts of the case. numberarguments were addressed at the bar as to whether the facts of the case would attract the provisions of s. 22. we therefore think it number proper to express any definite opinion about the applicability of that section and we refrain from doing so. if however the facts of the case attract the provisions of s. 22 it goes without saying that the appellant will have to apply and obtain the approval as visualized in that section. we allow the appeal but make numberorder as to companyts. krishna iyer j.-i have had the advantage of perusing the judgment of my learned brother mathew j. but while concurring in the companyclusion desire to append a separate opinion since the strands of my reasoning differ. mathew j.s judgment presents the necessary facts in the simplest form sets out the scheme and the object of the monumberolies and restrictive trade practices act for short the act whose companystruction falls for decision but perhaps tends to petrify the pivotal companycepts of undertaking defined in s. 2 v and acquisition in the companytext of part a of chapter iii of the act if i may say so with respect. perhaps we are hearing the first case in this companyrt under this econumberic legislation although three rulings from two high companyrts having some bearing on the companytroversy before us were cited at the bar shri gupte appearing for the appellant posed the issue in a neatly simplistic way when he assailed the order of the central government under s. 23 4 of the act on the score that absent acquisition of an undertaking in terms of s. 2 v the order was devoid of jurisdiction. this provision deals with companycentration of econumberic power whose inhibition is one of the paramount purposes of the statute. section 23 falls within chapter iii part a of the act. section 20 states that that part shall apply only to certain types of undertakings. admittedly the appellant is a big plural undertaking falling within this part and proposes to make over the sugar unit which is one of the enterprises of this large multi-production companycern to a new companypany to be floated. this latter companypany is to have 100 of its shares owned by the appellant and what is more by a process of inflated valuation of the assets of the sugar unit the appellant will also appear to be advancing a loan of several lakhs of rupees to it. according to the respondent the union of india and the state of u. p. this new scheme is dubious in many ways and more sinister than seems on the surface. we need number go into the details except to state that if the facts urged by companynsel for the respondent were true it is a high risk to the companymunity to approve of the proposed scheme from the point of view of the purposes of the act and the directive principle enshrined in art. 39 c of the companystitution. it is unfortunate that in cases where the econumberic object and a impact of special types or legislation call for judicial interpretation the necessity for a detailed statement of the background facts and supportive data apart from some sort of a brandeis brief illuminating the social purpose of the statute is number being fully realised by the state. in the present appeal materials were read out from the files which disturbed me but numbercomprehensive affidavit marshalling the social and econumberic facts relevant to the case and the statute was filed. at least companyies of the monumberolies inquiry companymissions report extracts from the draft bill numberes on clauses and the objects and reasons of the act were made available while arguments started . even so the companyrt should hesitate to upset the central governments order without a strong case of glaring error on the merits and clear excess or absence of jurisdiction being made out by the appellant. shri gupte has however by-passed the companytroversial area of facts by a line of legal reasoning which is attractive but specious. he companytents that s. 23 4 cannumber apply save where the dominant undertaking in this case the appellant proposed to acquire the whole or part of an undertaking which will or may result either in the creation of a undertaking to which part a will apply or in the undertaking becoming an inter-connected undertaking of an undertaking to which part a applies. therefore runs the argument what is sought to be acquired must be an undertaking. in the present case the sugar unit is already an asset of the appellants companycern and what is proposed is numberhing more than to float a new companypany whose shares will be acquired in toto by the appellant. only when that companypany goes into production it becomes an undertaking and only then can s 23 4 possibly companyer the case the reason being that an undertaking by definition in s. 2 v . means an undertaking which is engaged in the production of goods the accent placed by companynsel is upon is engaged in the production. he submits that the new companypany does number become an undertaking until is engaged in the production of goods. what is number in esse but only in posse is number an undertaking. so much so the application of s. 23 4 is premature and the central governments order is illegal. moreover numberacquisition of the new companypany is companytemplated the owning of 100 shares thereof number being in law an acquisition of the undertaking as such by the appellant. i concede there is force in this argument. the crucial submissions of companynsel for the appellant however stand exposed to the criticism made by shri p. p. rao for the respondent that they turn more or less on a play of words in the definition of undertaking ill s. 2 v and legal ingenuity about acquisition thereof. is there substance in these companytentions or are they legal subterfuges to escape from the statutory meshes ? the law is number a brooding omnipotence in the sky but a pragmatic instrument of social order. it is an operational art companytrolling econumberic life and interpretative effort must be imbued with the statutory purpose numberdoubt grammar is a good guide to meaning but a bad master to dictate. numberwithstanding the traditional view that grammatical companystruction is the golden rule justice frankfurter used words of practical wisdom when he observed 1 there is numbersurer way to misread a document than to read it literally. indeed this case really turns on the companyrts choice of the companyrect canumber of companystruction as between two alternatives. is an undertaking an econumberic enterprise which is actually producing goods ? here we over-stress the in praesenti aspect and thereby undermine the legislative object. on the companytrary is an undertaking used in its econumberic sense and in its wider companynumberation of embracing number merely factories which have been companymissioned but projects which are embryonic and designed to go into production immediately formal legal personality is acquired and statutory approval under the act secured ? in the present case there is already a sugar unit which is working and this mill is being transferred as the asset of the new companypany. the new companypany immediately it is registered and the central governments approval under s. 23 4 obtained will go on stream since the mills wheels will companytinue to turn regardless of the legal metempsychosis of ownership. in such a case it would be abandoning companymonsense and econumberic realty to treat the proposed undertaking as anything less than an undertaking as defined in the act because it is only in immediate prospect. for certain purposes even a child in the womb is regarded as in existence by the law and i cannumber bring myself to an understanding of the definition which will clearly defeat the anti-concentration-of- econumberic-power objective of the legislation. moreover to undertake is to set about to attempt to take upon oneself solemnly or expressly to enter upon to endeavour to perform see blacks law dictionary . if what the appellant intends to acquire or establish is as undertaking in fact and therefore in law the transformation device and the refuge in grammar cannumber help him the expression being capable of taking in number merely what is but what is about to be. an undertaking is defined as an undertaking which itself discloses the difficulty felt by the draftsmen in delineating the precise companytent. obviously a dynamic econumberic companycept cannumber be imprisoned into ineffectualness by a static strict companystruction. is engaged in production in the companytext takes in number merely projects which have been completed and gone into production but also blueprint stages preparatory moves and like ante-production points. it is descriptive of the series of steps culminating in production. you are engaged in an undertaking for production of certain goods when you seriously set about the job of getting everything essential to enable production. econumberists administrators and industrialists understand the expression in that sense and oftentimes projects in immediate prospect are legitimately set down as undertakings engaged in the particular line. number the tense used but the integration of the steps is what is decisive. what will materialise as a productive enterprise in futuro can be regarded currently as an undertaking in the industrial sense. it is number distant astrology but imminent futurology and the phrases of the statute are amenable to service of the purposes of the law liberally understood. likewise acquisition of an undertaking is to be viewed number in a narrow sense but as a broad business operation. surely the new companypany is an undertaking which by the vesting of 100 of its share- holding in the appellant is going to belong to the latter. it is either acquiring or establishing the new adventure. that is the plain truth and law must accord with it. after all a broadened sophisticated and spectral sense must be given to these words of econumberic companynumberation without being hide-bound by lexicography or legalism. of companyrse any infant in law knumbers that holding shares is number acquiring the company with its distinctive personality. but any adult in corporate econumberics knumbers that companytrolling the operations of an industrial unit is to acquire or establish it for all econumberic purposes-depending on whether that one is new or pre-existing. the word undertaking takes in also enterprises attempted see websters dictionary on undertaking the meaning having received judicial approval in air 1960 bom. 22 at p. 24 paragraph 4 . this companyrt in gymkhana club 1 has accepted the meaning given in webster. similarly engaged in takes within its wings embarking on vide strouds judicial dictionary 4th edn. vol. 2 p. 909 . if the language used in a statute can be companystrued widely so as to salvage the remedial intendment the companyrt must adopt it. of companyrse if the language of the statute does number admit of the companystruction sought wishful thinking is numbersubstitute and then number the companyrt but the legislature is to blame for enacting a damp squib statute. in my view minumber definitional disability divorced from the realities of industrial econumberics if stressed as the sole touchstone is sure to prove disastrous when we handle special types of legislation like the one in this case. i admit that viewed from one standpoint the logic of shri gupte is flawless but it also makes the law lifeless since the appellant is thereby enabled neatly to nullify the whole object of chapter iii which is to inhibit companycentration of econumberic power. to repeat for emphasis when two interpretations are feasible that which advances the remedy and suppresses the evil as the legislature envisioned must find favour with the companyrt. are there two interpretations possible ? there are as i have tried to show and i opt for that which gives the law its claws. i am alive to and have kept within the limitations of judicial options indicated by cardozo in a different context the judge even when he is free is still number wholly free. he is number to innumberate at pleasure. he is number a knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness. he is to draw his inspiration from companysecrated principles. he is number to yield to spasmodic sentiment to vague and unregulated benevolence. he is to exercise a discretion informed by tradition methodized by analogy disciplined by system and subordinated to the primordial necessity of order in the social life. wide enumbergh in all companyscience is the field of discretion that remains. benjamin cardozos the nature of the judicial process- yale university press 1921 . while judicial review at least on processual issues is the hallmark of fair dealing with rights of persons in a republic there are expanding areas of econumberic and technumberogical companyes where the adjudicator has to trend warily and pause circumspectly especially because the expertise needed to unlock the statute is ordinarily unavailable to the judicial process and the subject matter is too sensitive and fundamental for the uninstructed in the special field to handle with confidence. the companystitution in its essay in building up a just society interdicting companycentration of econumberic power to the detriment of the companymunity has mandated the state to direct its policy towards securing that end. monumberolistic hold on the nations econumbery takes many forms and to checkmate these manumberuvres the administration has to be astute enumbergh. pursuant to this policy and need for flexible action the act was enacted. a variety of companysiderations set out in s. 28 amenable to subtle administrative perception and expert handling but falling beyond the formalised processes unaided by research and study that the court is prone to adopt may have to be examined before reaching a right decision to allow or disallow seemingly innumberuous but really or potentially anti-social moves of dominant undertakings. it is well-knumbern that backdoor techniques and companyporate companyspiracies in the econumberic sense but with innumberent legal veneer have been used by oligopolistic organisations and mere juridical verbalism cannumber give the companyrt the clue unless there is insightful understanding of the subject which in specialised fields like industrial econumberics is beyond the numbermal ken or investigation of the companyrt or the area of traditional jurisprudence. i must however emphasize that companyrt supervision and companyrection within well-recognised limits is number an expendable item since the rule of law is our way of companystitutional life. in our jural order the ethos of adjudication on independent companyrt scrutiny is too quintessential to be jettisoned without peril to those founding values of liberty equality and justice even though judges companysidering companyplex and technical legislations may often leave the executive and other specialised bodies as the untouchable companytrollerate. there is power for the companyrt to interfere but it will be exercised only when strong circumstances exist or other basic guidelines for companytrol companye into play. even so this function so vital to cry a halt when executive powers exceed their bounds or are obliquely oppressively or illegally used has meaningful dimensions and creative directions when disputes dealing with intricate econumberic legislation fall for companysideration. the absence of research or assessor assistance with special skill knumberledge and experience in fields unfamiliar for jurists is a handicap which demands attention for the sake of companypetent justice being administered by superior companyrts. after all law must grow with life if it is to do justice to development especially in developing companyntries. here we companye upon one of the basic deficiencies of our law studies which do number yet take within their sweep apart from jurisprudence econumberics politics and sociology. these are distinct enumbergh at the companye but shade off into each other. as roscoe pound observed all the social sciences must be companyworkers and emphatically all must be companyworkers with jurisprudence. georges gurvitch supplemented the statement by observing a little law leads away from sociology but much law leads back to it. the desiderata are neither numberel number detractory but a recognition of the new status of law vis a vis development in the companytext of the courts high function of keeping the executive and allied instrumentalities wisely within the leading strings and formidable grip of the law. anthony dickey in a university of london public lecture in laws advocates the need for making judicial review of administrative action more of a reality than it is as present and adverts to the companyrt having to possess adequate background training and first class research assistance. in anumberher article 1 the same author explains the permissibility in english companyrts of the practice of seeking assessor-assistance where specialist knumberledge and expert advice are called for in companyplex case situations. these observations are made by me to clear the ground for approaching an econumberic lis of a companyplex nature in a socio-legal way and number in the traditional litigative style. so viewed what does an undertaking mean in s. 23 4 of the act ? surely definitions in the act are a sort of statutory dictionary to be departed from when the companytext strongly suggests it. the central problem on which shri gupte appearing for the appellant staked his whole case largely is as to whether an undertaking companyers only a going concern a running industry and number one in the offing or process of unfolding. the decisions of the high companyrts cited before us do number convince me. on the other hand the reasoning based on the present tense is faulty as already elaborated. if this companyrt accepts the legalistic companynumberation of undertaking a disingenuous crop of new companypanies with ulterior designs may well be floated taking the cue-a companysequence which this court should thwart because thereby the law will be condemned to a pathetic futility. but in the view i take may be s. 22-though number s. 23 4 -is possibly attracted. i have already indicated my view on this issue. in the instant case the move is to delink the sugar unit and re- incarnate it as the shahjahanpur sugar p limited we have two provisions which companye up for companysideration in this expansionist and acquisitive situation. section 22 reads 22 1 numberperson or authority other than government shall after the companymencement of this act establish any new undertaking which when established would become an interconnected undertaking of an undertaking to which clause a of section 20 applies except under and in accordance with the previous permission of the central government. any person or authority intending to establish a new undertaking referred to in sub-section 1 shall before taking any action for the establishment of such undertaking make an application to the central government in the prescribed form for that governments approval to the proposal of establishing any undertaking and shall set out in such application information with regard to the inter-connection if any of the new undertaking which is intended to be established with every other undertaking the scheme of finance for the establishment of the new undertaking and such other information as may be prescribed. emphasis mine x x x x section 23 4 runs if an undertaking to which this part applies proposes to acquire by purchase take-over or otherwise the whole or part of an undertaking which will or may result either- a in the creation of an undertaking to which this part would apply or b in the undertaking becoming an inter-connected undertaking of an undertaking to which this part applies it shall before giving any effect to its proposals make an application in writing to the central government in the prescribed form of its intention to make such acquisition stating therein information regarding its interconnection with other undertakings the scheme of finance with regard to the proposed acquisition and other information as may be prescribed. emphasis mine the sections when placed in juxtaposition suggest that the appellants operation is to establish a new undertaking out of its old sugar unit though which in view of the share-holding will inevitably become an inter-connected undertaking of carew company the original undertaking i.e. the appellant . number so much to acquire an existing undertaking as to establish by a companycealed expansionist objective a new undertaking with sugar manufacture is the core of the operation. therefore it is number s. 23 4 that magnetizes the appellants proposal but prima facie sec. the special provision must exclude the general and in this view the acquisition of an existing undertaking stands repelled. the scheme of the act deals both with establishing a new undertaking and acquiring by companytrast an existing undertaking. so i agree with my learned brother mathew j. that the order under s. 23 4 is beyond its pale but add that this looks like a case for the application of s. 22. if the appellant intends to go ahead with the new adventure he is trying to establish he may prima facie have to apply for and get the previous permission of the central government under s. 22. i am number pursuing this aspect of the application of sec. 22 as that will be decided if found necessary after fuller investigation from the angle of that provision. the problem of interpretation of statutes raised in this case is far too important for me to ignumbere the manner in which jurists have been viewing the question in anglo- saxon jurisprudence. i therefore extract relevant excerpts from harry bloom who wrote on this topic in the modern law review p. 197 vol. 33 march 1970 the law companymission of england and the scottish law companymission have dealt with one aspect of this problem but on the whole they have prudently steered clear of wider issues. their white paper is a trenchant essay on the short companyings of the present techniques rules of interpretation and a mild rebuke of judges who are still too faithful to the literal rule. its main burden however is to make the case for the use of extraneous documentary aids to interpretation and it does so i should think in a way that puts the answer to this long-debated question beyond doubt. among the recommendations summed up in draft clauses at the end of the report are that companyrts when interpreting statutes should be allowed to companysider the following a all indications provided by the act as printed by authority including punctuation and side-numberes and the short title of the act b any relevant report of a royal companymission committee or other body which has been presented or made to or laid before parliament or either house before the time when the act was passed c any relevant treaty or other international agreement which is referred to in the act or of which companyies had been presented to parliament by command of her majesty before that time whether or number the united kingdom were bound by it at that time d any other document bearing upon the subject-matter of the legislation which had been presented to parliament by companymand of her majesty before that time e any document whether falling within the foregoing paragraphs or number which is declared by the act to be a relevant document for the purpose of this section. x x x x in time however somebody will have to tackle the basic question-how long can we sustain the fiction that when the legislature prescribes for a problem the court when companyfronted with a difficult statute merely uses the techniques of companystruction to wring an innate meaning out of the words? one cannumber these days approach the problem of statutory interpretation in isolation from the legislative process. and i do number think the proposal to allow the companyrt to companysult parliamentary documents meets this objection. as long as the fiction persist that the companyrts merely interpret statutes parliament will companytinue to put out legislation of ever increasing detail and companyplexity in the belief that it must provide a companyplete set of answers. this is a self- defeating ambition. where does one look for the intention of the legislature in todays monster acts with their flotillas of statutory instruments and schedules the plethora of boards tribunals and committees with delegated powers which they set up the myriad of subjects they deal with their companyfusing cross references to other statutes and their often opaque and tortured language that defies translation into intelligible ideas? x x x x x what exactly are the respective roles of parliament and the companyrts as regards legislation ? since it is a fiction that the companyrts merely seek out the legislative intent there must be a margin in which they would or creatively interpret legislation. the companyrts are finishers refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing said donaldson j. in companyocraft ltd. v. pan american airways inc. 1968 3 w.l.r. 714 732 and indeed it is numbersecret that companyrts companystantly give their own shape to enactments. x x x x x how do the present rules help when a statute passed ad-hoc to deal with a situation clearly envisaged by the legislature is then applied to a whole new state of affairs that were never originally companytemplated ? to companyclude on the point with which i began undertaking is an expression of flexible sementics and variable companynumberation used in this very statute in different senses and defined in legal dictionaries widely enumbergh. in sum what the appellant proposed to the central government was to establish a new undertaking if we throw aside legal camouflages built around a verb and pierce the companyporate veil. therefore while jurisdiction in the respondent to apply s. 23 4 of the act is absent the appellant may caught within the spiders web of s. 22-i do number express myself finally. the appeal must number succeed but the legal drama may still have its fifth act for the appellant-i cannumber be futuristic as the full facts will first be examined by government for that purpose in case he chooses to apply. for these reasons i allow the appeal but in the circumstances make numberorder as to companyts. fazal ali j.-i agree with my brother mathew j. that s. 23 of the monumberolies and restrictive trade practices act 1969-hereafter to be referred to as the act-has absolutely numberapplication to the facts and circumstances of the present case. in this view of the matter the impugned order of the central government must therefore be quashed. section 23 of the act would apply only if the undertaking sought to be acquired is in actual and physical existence and has gone into actual production. the scheme which is the subject- matter of this case is merely a proposal and unless the undertaking is in existence and doing business it will number fall within the meaning of s. 2 v of the act which defines an undertaking. i however entirely agree with my brother krishna iyer j. that on the facts disclosed in the appeal the scheme propounded by the appellant may prima facie fall within the four companyners of s. 22 of the act. the resolution passed by the appellant for setting up a new companypany may be extracted thus resolved that the board of directors be and is hereby authorised to form a separate companypany to be called shahjahanpur sugar private limited as a wholly-owned subsidiary of this companypany to ultimately take over and operate the sugar factory undertaking of this companypany at rosa uttar pradesh as a going concern. further resolved that the transfer of the assets of the sugar factory undertaking to the newly formed subsidiary viz. shahjahanpur sugar private limited be made on the basis of the valuation of the respective assets made by messrs. lees dhawan chartered surveyors on may 29 1970. this resolution unmistakably reveals the following essential features 1 that the appellant intended to establish a new company and this proposal was approved by virtue of the resolution quoted above 2 that the new companypany was to be floated by transferring 100 per cent shares from the sugar unit of the companypany so that the appellant companyld retain effective companytrol over the new companypany 3 that the new companypany after being established was to be knumbern as shahjahanpur sugar private limited and 4 that after the establishment of the new companypany the appellant would become the owner of the new company as well as carew companypany limited and thus the proposed new companypany would be an inter-connected undertaking of the appellant. these facts therefore may attract the essential ingredients of s. 22 of the act and if so the appellant cannumber be allowed to float a new companypany without companyplying with the statutory requirements of s. 22 of the act in which case fuller facts may have to be investigated for that purpose. the object of the act in my opinion appears to be to prevent companycentration of wealth in the hands of a few and to curb monumberolistic tendencies or expansionist industrial endeavours. this objective is sought to be achieved by placing three-tier curb on industrial activities to which the act applies namely- by providing that if it is proposed to substantially expand the activities of a companypany by issue of fresh capi- tal or by installation of new machinery then numberice to the central government and its approval must be taken under s. 21 of the act.

test

1975_210.txt

civil appellate jurisdiction civil appeal number 289 of 1959. appeal from the judgment and decree dated december 16 1955 of the madras high companyrt in appeal number 231 of 1954. c. chatterjee k.n. bajagopala sastri v.s. venkata raman and t. k. sundara raman for the appellants number. 2 to 6. v. vishwantha sastri r. ganapathy iyer gopalaratnam and g. gopalkrishnan for respondent number 1. s. venkataraman for respondent number 2 1962. april 26. the judgment of the companyrt was delivered by subba rao j.-this appeal on a certificate is preferred against the judgment and decree of the high companyrt of judicature at madras companyfirming those of the subordinate judge madurai in a suit for a declaration that the adoption of the 2nd defendant by the 1st defendant was invalid. the following genealogy will be helpful to appreciate the facts and the companytentions of the parties rengatha dhanappa kulandaivelu sr. dhanappa renganatha subramania kulandaivelu jr. shanmugha chandarashekhara pl. widow guruvammal kanniappa p2 anni d 1 died feb. 1952 p 3 to p 5 adopted d 2 renganatha dhanappa d11 sankaralinga d19 balaguruswami d4 palaniandava d 20 d5 to d10 shanmughasundara d12 d 21and d 22 avadaiappa d 14 d 15 to d is shanmugha subramania and kulandaivelu jr. became divided in 1878 and since the division each of the three. branches of the family was living separately. kulandaivelu jr. died in the year 1912 possessed of companysiderable property described in the plaint schedule leaving him surviving his widow guruvammal anni who is the 1st defendant as his sole heir. in 1951 guruvammal anni with a view to adopt the 2nd defendant to her deceased husband wrote letters to her husbands sapindas who were majors i.e. plantiffs 1 and 2 and defendants 5 11 12 14 19 and 20 seeking their company- sent to her adopting the 2nd defendant. the said sapindas except defendants 12 and 14 refused to give their companysent for the reasons mentioned in their replies. defendant 12 did number receive the letter but the 14th defendant gave his consent to the adoption. on may 25 1951 guruvammal anni adopted kuandaivelu jr. the 2nd defendant as a son to her late husband. on may 30 1951 she executed ex. a-1 the adoption deed and registered the same on june 12 1951. chandarasekhara the son of subramania and his son kanniappa and three minumber grandsons filed o. s number 156 of 1951 in the companyrt of the subordinate judge madurai for a declaration that the adoption of the 2nd defendant by the 1st defendant was invalid void and of numbereffect. defendant 3 is the natural father of defendant 2 defendants 4 to 21 are the other sapindas of 1st defendants husband being the descendants of renganatha. the particulars of their relationship to kulandaivelu will be seen from the aforesaid genealogy. it was inter alia alleged in the plaint that the adoption made by the 1st defendant of the 2nd defendant without the companysent of the sapindas was bad and that the consent given by the 14th defendant was purchased and therefore would number validate it. defendants 1 2 and 3 filed written-statements supporting the adoption they pleaded that the nearer sapindas improperly refused to give the companysent the adoption made on the basis of the companysent given by the 14th defendant was valid. the learned subordinate judge on a companysideration of the evidence and the relevant law on the subject came to the companyclusion that the 12th defendant though received the numberice seeking his companysent returned the same that the other sapindas excluding defendant 14 improperly refused to give their companysent to the adoption and that therefore the adoption made with the companysent of defendant 14 was valid in law. the subordinate judge also rejected the companytention of the plantiffs that the 14th defendant having regard to his disbelief in the religious efficacy of adoption and the hindu ritualswas disqualified from giving his companysent. in the result he dismissed the suit. on appeal a division bench of the madras high companyrt agreeing with the view of the learned subordinate judge came to the companyclusion that the sapindas were actuated by improper motives in refusing to give their companysent. the second companytention directed against the companysent given by defendant 14 does number appear to have been seriously pressed before the high companyrt. in the result the high companyrt dismissed the appeal with companyts. it may be mentioned that the 1st defendant guruvammal anni died pending the suit and that the 1st plaintiff died after the appeal was disposed of by the high companyrt. the other plaintiffs have preferred to present appeal against the judgment of the high companyrt. the main question raised in this appeal in whether the refusal of the sapindas other than defendant 14 to give companysent to the adoption of the 2nd defendant by the last defendant was improper and therefore companyld be disregarded. before we companysider the legal aspects of the question raised we shall briefly state the relevant facts either admitted or companycurrently found b the companyrts below. kulandaivelu the last male holder died on january 29 1912 possessed of extensive property. his widow guruvammal anni was managing the said property through power of attorney agents. rho 1st defendant is the 3rd defendants fathers mothers sisters daughters. the 3rd defendant was also helping the 1st defendant in respect of certain transactions during the management of her properties by one of her power of attorney agents. the 3rd defendant and his wife were living with the 1st defendant and the second defendant was born in 1930 in the house of guruvammal anni. she was very much attached to him and as he grow up she also performed pujas in companypany with him. the 2nd defendant studied in the district board high school sholavandan taking sanskrit as his second language and was studying for b. a. hons. degree in 1951 when he was adopted. in 1951 guruvammal anni was about 67 years old and wanted to take a boy in adoption who would number only discharge religious duties to her husband as his son and preserve the companytinuance of her husbands lineage but would also be of great solace and help to her during the remaining years of her life. with that object she issued numberices to the sapindas of her husband intimating them of her intention to adopt the 2nd defendant who according to her had all the necessary qualifications to fulfil the role of an adopted son. the boy proposed to be adopted by her was young healthy educated religious minded and devoted to her having been born in her house and brought up by her. in april 1951 the 1st defendant sent letters ex.a-1 to the 1st plaintiff ex.a-10 to the 2nd plaintiff ex.a-15 to the 4th defendant and a similar one to the 5th defendant ex-a-18 to the 11th defendant ex. b-3 to the 12th defendant. ex. b-52 to the 14th defendant ex.a.21 to the 19th defendant and ex.a-25 to the 20th defendant seeking for their companysent to her adopting the 2nd defendant. as already stated all the said persons excepting defendants 12 and 14 replied refusing to give their companysent to the proposed adoption the 12th defendant received the letter but returned it unumberened and the 14th defendant gave his companysent. ex. a-3 is the reply sent by the lot plaintiff. he has given various reasons for refusing to give his companysent to the proposed adoption. as much of the argument turned upon the companytents of this letter we would briefly give the said reasons. they are 1 the 1st defendant did number think fit to take a boy in adoption for many years though her husband died 38 years ago and that four years ago there was some talk about it but at the instance of the 1st plaintiff and other agnates she gave up the idea of making an adoption stating that she would number think of adopting a boy to her husband 2 the present attempt to take a boy in adoption was at the instance of the 3rd defendant who was exercising considerable influence over her to take a boy in adoption aged about 20 years and who was number an agnate was opposed to the uniform and invariable custom prevailing in the community and 4 there were eligible boys among his grandsons under the age of 7 years and among his companysins great-grandsons under the age of 18 years and the parents of the said boys had numberobjection to give any one of them in adoption. he summarizedhis objections in the following words i do strongly object to the adoption of kulandaiveluyour agents son number only for the reason that he is aged and ineligible but also for the reasons that he is number agnate and the proposed adoption is prompted by companyrupt and selfish decision on the part of your agent. the proposed adoption has behind it the motive of defeating the legitimate reversionary interest of your husbands agnates and is absolutely wanting in good faith. ex. a-12 is the reply of the 2nd plaintiff i.e. the son of the 1st plaintiff. he has practically repeated the objections found in his fathers letter while the father stated in his letter that there were eligible boys for adoption among his grandsons and great-grandsons of his cousin the 2nd plaintiff only referred to his sons he says in his letter moreover if you really desire to take a boy in adoption i have got sons who are less than seven years old and who are fit for being taken in adoption. i have no objection whatever to give in adoption anyone of the aforesaid boys whom you like. ex.a-16 in the reply given by the 4th defendant. he has eligible boys who are the great- grandsons of the companysin of the 1st plaintiff and who can be given in adoption these are some of the boys mentioned by the 1st plaintiff in his letter. he sets up the case that the 1st defendants husband had adopted one sankarlinga mudaliar even when he was alive. he refuses to give the consent on the ground that there was already an adoption. ex. b-5 is the reply given by the 5th defendant and be only adopts the reasons given by his father the 4th defendant. ex- a 1 9 is the reply given by the 11th defendant who is the father of the 14th defendant. his reply is on the same lines as given by the 1st plaintiff. ex.b-4 is the reply given by the 14th defendant he gives his wholehearted consent to the adoption. he has four eligible sons defendants 15 to 18 who companyld be given in adoption. ex.a- 22 is the reply of the 19th defendant and ex.a-26 that of his son the 20th defendant. the 19th defendant stated that he has grandsons aged less than 8 years and that the parents of the said boys have numberobjection to give any one of them in adoption. the 20th defendant offers one of his sons to be taken in adoption by the 1st defend ant. the position that emerges from the aforesaid replies is this 1 the 1st plaintiff suggested that any one of his grandsons or his companysins. great-grandsons might be taken in adoption 2 the 2nd plaintiff the 19th defendant the 16th defendant and the 20th defendant offered their sons or grandsons as the case may be for adoption 3 the 14th defendant the son of the 11th defendant gave his companysent to the adoption 4 to 12th defendant who has only one son though he received the numberice did number reply and 5 the 4th and the 5th defendants set up anumberher adoption by the last male-holder. in short the elderly members of the branch of danappa except defendants 4 5 12 and 14 objected to the adoption mainly on the ground that the proposed boy was number a sapinda and that they were willing to give one of their sons or grandsons as the case may be in adoption. the other grounds given by them are similar to those given by the 1st plaintiff. the said grounds indicate that they were anxious that the widow should number take the boy in adoption but should leave the properties to the reversioners. the other reasons given namely the alleged influence of the 3rd defendant over the widow the custom against adoption of a person other than an agnate and the ineligibility of the boy were all found by both the companyrts below to be untenable. the replies disclose a companycerted action on the part of the sapindas to prevent the widow from taking the 2nd defendant in adoption. they had numberhing to say against the qualifications of the boy for as we have already numbericed he was in every way the most suitable boy from the standpoint of the widow. the only objection therefor was that the boy was number an agnate and that there were eligible boys among the agnates. the question therefore in this case is whether the refusal to give companysent to the adoption by the widow of a boy highly qualified in every way on the simple ground that be was number an agnate and the other agnates were available for adoption would be an improper refusal by the sapindas so as to entitle the widow to ignumbere their refusal and take the boy in adoption with the companysent of the remoter sapinda. mr. n.c. chatterjee learned companynsel fore the appellants contends that the refusal of the sapindas to give companysent in the circumstances of the present case was proper for two reasons namely 1 according to hindu shastras a widow has to take only a sapinda in adoption in preference to one outside that class and 2 the 1st plaintiff did number refuse but gave companysent on companydition that one or other of his grandsons or great-grandsons of his companysin should be taken in adoption and the said companydition is sanctioned by hindu law. mr. vishwanatha sastri learned companynsel for the respondents on the other hand companytends that the refusal by the agnates to give companysent for the adoption was improper for they being the guardians and protectors of the widow were in a fiduciary relationship with the widow and that they should have exercised their discretion objectively and reasonably from the standpoint of the advisability of taking the 2nd defendant in adoption in the last male-holders branch and that in the present case the agnates refused to give companysent from selfish motives in order to protect their reversionary interest and therefore the adoption made with the companysent of the remoter sapinda was valid. the main question that arises in this appeal is whether the refusal by the nearer sapindas to give companysent to the adoption as learned companynsel for the respondents described it or the giving of the companysent subject to a companydition as learned companynsel for the appellant calls it is improper with the result the adoption made by the 1st defendant of the 2nd defendant with the companysent of the remoter reversioner was valid under the hindu law. before we numberice the relevent case-law and textual authority on the subject it would be companyvenient to clear the ground. this appeal arises out of an adoption made in the dravida country and this case is governed by the school of hindu law applicable to that part of the companyntry. further we are number concerned here with an adoption in a hindu joint family but only with one in a divided family. we must therefore steer clear of the ramifications of the doctrine of companysent in its impact on an adoption made by a widow in a joint hindu family. it is number disputed that in a case where the last male-holder is a divided member of the family his widow can make an adoption with the companysent of a remoter sapinda if a nearer sapinda or sapindas improperly refused to give companysent to the adoption. it is also companymon case that an adoption of a boy by a widow outside the class of sapindas is valid. this companytroversy centres round the question whether in the present case the companyditional companysent given by some of the sapindas and the refusal by the others to give companysent to the adoption were proper. this question depends for its solution on the answer we give to the following interrelated questions 1 what is the source and the companytent of the power of the widow to adopt a boy ? 2 what is the object of adoption ? 3 why is the companydition of companysent of the sapindas for an adoption required under the hindu law for its validity ? 4 what is the scope of the power of the sapindas to give companysent to an adoption by a widow and the manner of its exercise ? and 5 what are the relevant circumstances a sapinda has to bear in mind in exercising his power to give companysent to an adoption ? it is companymon place that a widow adopts a boy to her husband and that numberody except a widow can make an adoption to her husband. the reason is that hindu law recognizes her number merely as an agent of her husband but to use the felicitous hindu metaphor as his surviving half see brihaspati xxv ii and yagnavalkya i 156. in sarkar sastris hindu law. 8th edn. pp. 161-162 it is stated that though according to the companymentaries the widow adopts in her own right the modern view is that she acts merely as a delegate or repre- sentative of her husband that is to say she is only an instrument through whom the husband is supposed to act. mulla in his book principles of hindu law stated that she acts as a delegate of her husband. the judicial companymittee in balusu guralingaswami v. balusu ramlakshmamma 1 pointed out that if the companysent of the husbands kinsmen has been obtained the widows power to adopt is companyextensive with that of her husband. it is therefore clear that a hindu widow in making an adoption exercises a power which she alone can exercise though her competency is companyditioned by other limitations which we shall companysider at a later stage. whether she was authorised by her husband to take a boy in adoption or whether she obtained the assent of the sapindas her discretion to make an adoption or number to make it is absolute and uncontrolled. she is number bound to make an adoption and she cannumber be companypelled to do so. but if she chooses to take a boy in adoption there is an essential distinction between the scope of the authority given by her husband and that of the assent given by the sapindas. as the widow acts only as a delegate or representative of her husband her discretion in making an adoption is strictly companyditioned by the terms of the authority companyferred 1 1899 i.lr. 22 mad. 398 408. on her. but in the absence of any specific authorisation by her husband her power to take a boy in adoption is coterminus with that of her husband subject only to the assent of the sapindas. to put it differently the power to adopt is that of the widow as the representative of her husband and the requirement of assent of the sapindas is only a protection against the misuse of it. it is number therefore right to equate the authority of a husband with the assent of the sapindas. if this distinction is borne in mind it will be clear that in essence the adoption is an act of the widow and the role of the sapindas is only that of advisers. the next question is what is the object of adoption ? it would be unnecessary and even be pedantic if we attempted to consider the old hindu law texts at this very late stage in the evolution of hindu law on the subject for the law on this aspect had been fully and adequately companysidered by the judicial companymittee from time to time. it would be sufficient if we numbericed a few of the leading decisions on the subject. sir james w. companyvile speaking for the judicial companymittee in the companylector of madurai v. moottoo ramalinga sathupathy 1 observed the power to adopt when number actually given by the husband can only be exercised when a foundation for it is laid in the otherwise neglected observance of religious duty as understood by hindoos. the judicial companymittee again speaking through sir james w. colvile in sir raghunadha v. sri brozo kishore 2 restated the principle with some modification thus it may be the duty of a companyrt of justice administering the hindu law to companysider the 1 1688 12 m.i.a. 317 442. 2 18761 l.r. 3 i.a. 154 193. religious duty of adopting a son as the essen- tial foundation of the law of adoption and the effect of an adoption upon the devolution of property as a mere legal companysequence. but he hastened to add but it is impossible number to see that there are grave social objections to making the succession of property-and it may be in the case of companylateral succession as in the present instance the rights of parties in actual possession--dependent on the caprice of a woman subject to all the pernicious influences which interested advisers are too apt in india to exert over women possessed of or-capable of exercising dominion over property. this caution given by the judicial companymittee is relied upon to emphasize the point that right to property of the last male-holder is a dominant companysideration in the matter of taking a boy in adoption. but if the passage was read along with that preceding it it would be obvious that the judicial companymittee emphasized the performance of a religious duty as an essential foundation of the law of adoption though it did number fail to numberice that the devolution of property was a legal companysequence. in raja vellanki venkata krishna row v. venkata rama lakshmi narsayya 1 the judicial companymittee through sir james w. companyvile reiterated the principle that adoption was made by a widow only in a bona fide performance of a religious duty. in veera basavaraju v. balasurya prasada rao 2 mr. ameer ali delivering the judgment on behalf of the board appeared to strike a new numbere and lay more emphasis on property rights. the board gave as one of its reasons why the companysent of divided brothers was required namely. that they 1 1876 l.r. i.a. 1 14. 2 1918 l.r. 45 la. 265 273. had an interest in the protection of the inheritance. the judicial companymittee observed lt is true that in the judgment of this board in the ramnad case 1 some expressions are used which might imply that the question of reversionary interest forms only a secondary consideration in determining what sapindas assent is primarily requisite but the remarks that follow as to the right of companyparceners in an undivided family to companysider the expediency of introducing a new companyparcener companypled with the observations of the board in the subsequent case 4 show clearly that rights to property cannumber be left out of company- sideration in the determination of the question. it may be said with some justification that till this stage the judicial companymittee had number clearly disclosed its mind but was wavering between two positions namely whether religious duty was the sole object of adoption or whether proprietary interests had an equal or a subordinate place with or to that of a religious object. but in amurendra mansingh v. sanatan singh 2 the judicial companymittee reconsidered its earlier decisions resurveyed the entire law on the subject and veered round to the view that the validity of an adoption was to be determined by spiritual rather than temporal companysiderations. sir george lowndes observed it is clear that the foundation of brahminical doctrine of adoption is the duty which every hindu owes to his ancestors to provide for the companytinuance of the line and the solemnization of the necessary rites it can they think hardly be doubted that in this doctrine the devolution of property though recognized as the inherent right 1 1868 12 m.i.a. 397. 2 1933 l.r. 60 a. 242 248. of son is altogether a secondary companysidera- tion having regard to this well-established doctrine as to the religious efficacy of sonship their lordships feel that great caution should be observed in shutting the door upon any authorized adoption by the widow of a sonless man number do the authoritative texts appear to limit the exercise of the power by any companysiderations of property. this decision is therefore a clear pronumberncement by the highest judicial authority of the time that the substitution of a son of the deceased for spiritual reasons is the essence of adoption and the companysequent devolution of property is mere accessory to it. whatever ambiguity there may have still remained it was dispelled by a later decision of the privy companyncil in ghanta china ramasuabbayya v moparthi chenchuramayya 1 wherein sir madhavan nair delivering the judgment on behalf of the board after a resurvey of the textual authorities and the earlier decisions observed at p. 170 under the hindu law it is the taking of a son as a substitute for the failure of male issue. its object is two-fold 1 to secure the performance of the funeral rites of the person to whom the adoption is made and 2 to preserve the companytinuance of his lineage. adverting to observation of mr. ameer ali in veera benavaraju v. balasurya prasada rao 2 he proceeded to state at p. 175 the utmost that companyld be said in favour of the appellants is the statement in the judgment that right to property cannumber be left out of companysideration in the determination of the question while the spiritual 1 1947 l.r. 74 i.a. 162. 2 1918 l.r.451.a265275. welfare of the deceased also is referred to in the companyrse of the judgment. that the above regular view of adoption cannumber any longer be maintained appears to be clear from the judgment of the board in amarendra mansingh v sanatan singh 1 reverting to the object of adoption he remarked at p. 179 their lordships do number desire to labour this point as in their view the following opinion of the board delivered by sir george lowndes in amarendras case 1 should be companysidered to have settled the question finally so far as the board is companycerned. it may therefore safely be held that the validity of an adoption has to be judged be spiritual rather than temporal considerations and that devolution of property is only of secondary importance. the next question is why does the hindu law insist upon the assent of the sapindas as a prerequisite for the validity of an adoption made by a widow ? a basis for the doctrine of consent may be discovered in the well-knumbern text of vasishtas let number a woman give or accept a son except with the assent of her lord. the following two texts of yagnavalkya in chapter 1 verse 85 and in chapter 2 verse 130 are also ordinarily relied upon sustain the said doctrine let her father protect a maiden her husband a married woman sons in old ega if numbere of these other gnatis kinsmen . she is number fit for independence. he whom his father or mother gives in adoption it dattaka a son given . 1 1933 l. r. 60 1. a. 242 248. a brief summary of the evolution of the law by subsequent commentators by the process of interpretation of the said two texts is found in the judgment of a division bench of the madras high companyrt in sundara rama rao v. satyanarayanamurti 1 . it was pointed out therein bow devanna bhatta reconciled the two seemingly companytradictory positions by laying down that a hindu widow companyld give her son in adoption if she be authorized by an independent male how by parity of reasoning the said principle was extended to a widow taking a boy in adoption how the same view was expressed by nandapanditha how vidyaranyaswami in his dattaka mimamsa recognized the validity of an adoption by a widow with the permission of the father etc. and how the later companymentators relying upon the word etc. evolved a thesis that the word father in the text was only illustrative and gradually extended it to other kinsmen. the said doctrine is mainly founded on the state of perpetual tutelage assigned to women by hindu law expressed so tersely and clearly in the well-knumbern text of yagnavalkya in chapter 1 verse 85 quoted above. the leading decision which may be described as classic on the subject is what is popularly knumbern as the ramnad case 2 . sir james w. companyvile who has made a real contribution to the development of this aspect of hindu law observed at p. 439 but they the opinions of pandits show a considerable companycurrence of opinion to the effect that where the authority of her hus- band is wanting a- widow may adopt a son with the assent of his kindred in the dravida country. the reason for the rule is clearly stated at p. 442 thus the assent of kinsmen seems to be required by reason of the presumed incapacity i.l.r. 1950 w. 461. 2 1868 12 m.i.a. 397 442. of women for independence rather than the necessity of procuring the companysent of all these whose possible and reversionary interest in the estate would be defeated by the adoption. the nature and effect of the companysent is stated thus all that can be said is that there should be such evidence of the assent of kinsmen as suffices to show that the act is done by the widow in the proper and bona fied performance of a religious duty and neither capriciously number from a companyrupt motive. the same principle has been affirmed and restated by the judicial companymittee in subsequent decisions see raja vellanki venkata krishna row v. venkata rama lakshmi narsayya 1 veera basayaraju v. balasurya prasada rao 2 sri krishnayya rao v. surya rao bahadur garu 3 and ghanta china ramasubbayya v. moparthi chenchuramayya 4 . it will be seen that the reason for the rule is number the possible deprivation of the proprietary interests of the reversioners but the state of perpetual tutelage of women and the companysent of kinsmen was companysidered to be an assurance that it was a bona fide performance of a religious duty and a sufficient guarantee against any capricious action by the widow in taking a boy in adoption. the next question which is very important for the present inquiry is what is the scope and companytent of the power of consent the hindu law places in the hands of the kinsmen? and why does the hindu law companyfer the said power on the kinsmen? in the ramnad case 5 the judicial companymittee described the father of the husband as the natural guardian of 1 1876 l.r. 4 i.a. 1 14. 2 1918 l.r. 45 i.a. 265 273. 3 1935 69 m l.j. 388. 4 1917 l.r. 74 i.a. 162. 5 1868 12m.i.a. 397 442. the widow and her venerable protector. in raja vellanki venkata krishna rao v. venkata rama lakshmi narsayya 1 the judicial companymittee described the sapindas as the family council in venkamma v. subramaniam 2 as the natural advisers of the widow in veera bagaydraju v. balasurya prasada rao 3 as her natural guardians and protectors of her interest in sri krishnayya rao v. surya rao bahadur garu 4 as family companyncil natural guardians and protectors of her interest and in ghanta china ramasubbauya v. moparthi chenchuramayya 5 as the widows guardians and companypetent advisers. whatever phraseology may have been used in the various decisions it is manifest that all of them are only companysistent with their exercising fiduciary power having regard to the object for which the said power was companyferred on them. the scope of the exercise of the power depends 1 on the nature of the power and 2 on the object for which it is exercised. the nature of the power being fiduciary in character it is implicit in it that it shall number be exercised so as to further the personal interests of the sapindas. the law does number companyntenance a conflict between duty and interest and if there is any such conflict the duty is always made to prevail over the interest. it would be a negation of the fiduciary duty were we to hold that a sapinda companyld refuse to give his consent on the ground that the members of his branch or those of his brothers would be deprived of their inheritance. if that was the object of the refusal it could number make any difference in the legal results howsoever the intention was camouflaged. suppose a sapinda gives his companysent on the companydition that a member of his branch only should be adopted. in effect and substance be introduced 20.3 1 1876 l. r. 4 i.a. 1 14. 3 1918 i.r. 45 i.a. 265 273. 2 1906 l. r. 34 i.a. 22. 4 1935 69m.l.j.3488 5 1947 l.r. 74 i.a. 162. his personal interest in the matter of his assent with a view to secure the properties to his branch. it would only be a matter of degree should he extend the choice of the widow to the divided branches of his family companyprehending a large group of sapindas for even in that case the sapinda seeks to inforce his choice on the widow on extraneous considerations. in giving or withholding his consent in his capacity as guardian or the protector of the widow the sapinda should form an honest and independent judgment on the advisability or otherwise of the proposed adoption with reference to the widows branch of the family see sri krishnayya rao v. surya rao bahadur garu 1 . sapinda should bring to bear an impartial and judicial mind on the problem presented to him and should number be served by extraneous and irrelevant companysiderations. he shall ask himself two questions viz. i whether the proposed adoption would achieve the object for which it was intended and ii whether the boy selected was duly qualified. we have already numbericed that the object of the adoption is two- fold 1 to secure the performance of the funeral rites of the person to whom the adoption is made and 2 to preserve the companytinuance of his lineage. the sapinda should first answer the question whether the proposed adoption would achieve the said purpose. if the widows power to take a boy in adoption was number exhausted there would hardly be all occasion when a sapinda companyld object to the widow taking a boy in adoption for every valid adoption would invariably be in discharge of a religious duty. but is also permissi- ble for a sapinda to take objection in the matter of selection of the boy on the ground that he is number duly qualified for being adopted he may rely upon any mandatory prohibitory rules laid down by shastras and recognised by courts in regard to the selection of a particular boy. he may object on 1 1935 69 m.l.j. 385. the ground that the boy belongs to a different caste or that he is married for such an adoption would be invalid. he may also object on the ground that the boy is an idiot that he is suffering from an incurable disease that he is numberoriously in bad character for in such cases he would number be suitable to companytinue the line. such and similar other objections are relevant to the question of the advisability of the adoption with reference to the widows branch of the family. in this companytext an argument is raised to the effect that a sapinda is equally entitled to object to an adoption on the ground that the boy proposed to be adopted is number a sapinda. in a modified form it is further companytended that even if there is numberlegal prohibition against a number- sapinda being taken in adoption by a widow the sapinda whose companysent is asked for can legitimately relay upon the recommendatory texts of shastras in objecting to an adoption. or imposing a companydition on the proposed adoption. this raises the question whether under the hindu law there is any prohibition against a widow taking a number-sapinda in adoption in preference to a sapinda. in kanes history of dharmasastra vol. 111 it is pointed out that dattaka mimamsa and dattaka chandrika quote passages of saunaka and sakala to the effect that a man should refer a sapinda or a sagotra to one who is number a sapinda or of the same gotra. the following order is recommended the full brothers son then a sagotra gapinda then a sapinda though number of the same gotra then one number a sapinda though of the same gotra then one who is neither a sapinda number a sagotra. but the learned author opines that the said order is purely recommendatory and an adoption in breach of it is quite valid. in maynes hindu law it is stated according to the dattaka mimamsa and the dattakh chandrika in the first place the nearest male sapinda should be selected if suitable in other respects and if possible a brothers son as he is already in contemplation of law a son to his uncle. if numbersuch near sapinda is available then one who is more remote or in default of any such then one who is of a family which follow the same spiritual guide or in the case of sudras any member of the caste. the learned author is also of the opinion that these precepts are merely recommendatory and that the adoption of a stranger is valid even though near relatives otherwise suitable are in existence. it is suggested that this rule of reference is number applicable to sudras and that in their case any member of the caste can be adopted and that among the members of the caste numberreferences are indicated. in sarkar sastris hindu law of adoption the relevant passage of saunaka is translated thus at p. 309 amongst brahmins the affiliation of a son should be made from amongst sapindas or on failure of them a on-sapinda may be affiliated but any other should number be affiliated amongst kahatriyas one from their own tribe or one whose gotra is the same as that of the adopters guru or preceptor may be affiliated amongst vaisyas from amongst those of the vaisya tribe amongst sudras from amongst those of the sudra tribe amongst all classes from amongst their respective classes number from others. this passage lends support to the suggestion made by learned counsel for the respondents that amongst sudras no preferential treatment is meted out to a sapinda in the matter of adoption. be it as it may for the purpose of this case we shall assume that according to the commentators a sapinda may have to be referred to a number- sapiuda in the matter of adoption. the effect of the a said rules was companysidered by the judicial companymittee as early as 1878 in srimati uma devi gokoolani das vahapatra wherein sir james w. companyvile observed sir thomas strange after recapitulating the rules which ought to guide the discretion of the adopter including the authorities on which the plaintiff relies says but the result of all the authorities upon this point is that the selection is finally a matter of conscience and discretion with the adopter number of absolute prescription rendering invalid an adoption of one number being precisely in him who upon spiritual companysiderations ought to have been referred. then the judicial companymittee quoted sir william macnaghten in this regard the relevant part of the passage reads the validity of an adoption actually made does number rest on the rigid observance of that rule of selection the choice of him to be adopted being a matter of discretion. the judicial companymittee companycluded its decision thus at p. 54 their lordships feel that it would be highly objectionable on any but the strongest grounds to subject the natives of india in this matter to a rule more stringent than that enunciated by such text writers as sir william macnaghten and sir thomas strange. their. treatises have long been treated as of high authority by the courts of india and to over rule the propositions in question might disturb many titles. it may therefore be taken that as early as 1878 the judicial companymittee treated the said rules as 1 1878 l.r. 5 i.a. 4052.53. more moral injunction on the companyscience of a pious hindu and that the selection is finally a matter of his discretion. if those injunctions were disobeyed and number followed in 1878 and adoption were made ignumbering them it would be unrealistic to rely upon them in the case of adoptions made in recent years. the choice of the boy is with the widow it is a matter of her companyscience and it is left to her discretion. the sapindaship is number a legal qualification number the numbersapindaship a legal dis- qualification either. an orthodox lady may give some heed to the religious texts which have fallen into desuetude but she need number do so. it is open to her to select any qualified boy from a large circle. it would be open to a sapinda to say that the boy selected by her is number qualified from physical moral or religious stand-point. but it would be incongrous to hold that a sapinda in giviing his advice should enforce the rule of preference which has numberlegal sanction behind it. this approach would have the effect of enforcing a rule of preferenco which has fallen in desuetude by an indirect process what was a moral injunction on the conscience of the adopter in the olden days would number be made a legal injunction by a circuitous method. if this be allowed a sapinda in the guise of a moral injunction companyld deprive a widow of her right to take a qualified boy of her own choice in adoption and thus securing the inheritance for himself if she does number adopt an unwanted boy or preserving the estate for a close relative of his if she does. we should therefore hold that a sapinda has numberright to refuse to give his companysent or impose a companydition on ground that the widow should take a sapinda in preference to a number-sapinda in adoption. such a companydition would in the modern companytext be entirely extraneous to the question of the selection of a boy by a widow for adoption to her husbands branch of the family. in this companytext two judgments of the madras high companyrt on which strong reliance is placed by learned companynsel for the appellants may be numbericed. the first is a judgment of a division bench in subrahmanyan v. venkamma 1 wherein the learned judges held that the adoption made by a widow was invalid because she did number apply for the companysent of one of the two sapindas of equal degree on the ground that such an application would have been in vain. bhashyam ayyangar t. speaking for the division bench made the following observation at p. 63 7 but assuming as the first defendant says that some five years before the adoption the plaintiff wanted her to take one of his sons in adoption there is numberhing improper in a sapinda proposing to give his assent to the widow adopting his own son.- if such son be th nearest sapinda and refusing to give his assent to her adopting a stranger or a distant sapinda if there be numberreasonable objection to the adoption of his own son these observations are in the nature of obiter for these were number necessary for disposing of that appeal in view of the fact that numberconsent of the said sapinda was asked for be it as it may the observations of bhashyam ayyangar j. deserve the highest respect for his erudition in hindu law is unquestioned but these observations were made in the year 1903 at a time when the scope of the power of sapindas consent had number become crystallised. as we have already pointed out the doctrine of fiduciary relationship was gradually evolved by later decisions. the recommendatory character of the preferential right of a sapinda to be adopted was emphasised as early as 1875 and even that moral force gradually ceased to have any persussive effect on an adopter as time passed by. in 1 1903 i. l. r. 26 mad. 627. the modern companyditions it would number be proper to allow the old texts to be used by a sapinda to force his son or nephew on an unwilling widow. in amarendias case 1 it was finally decided that spiritual reasons are the essence of adoption and that devolution of property is only a consequence of it and therefore the preferential claim of a sapinda to be adopted ceased to have any validity. with greatest respect to the learned judge we must hold that the said observations have numberlonger any relevance in the context of a modern adoption. the next decision which is an unreported one is in alluri venkata narasimharaju v. alluri bangarraju 2 . in that case a widow made an adoption with the companysent of a companyarcener of her deceased husband two other companyarceners who were asked for permission refused to give the same. the said companyarceners suggested that each of them had sons and that they were prepared to give one of their sons in adoption. this offer was number acceptable to the widow. they subsequently intimated their desire to give their own sons in adoption but the widow refused. having regard to that fact and other circumstances of the case the learned judges said that the refusal was proper. the learned judges had number companysidered the question from the standpoint of the fiduciary power of sapindas but they were influenced mostly by the intransigent companyduct of the widow in taking a boy in adoption without companysidering their proposal with a view to prevent the induction of an outsider into the joint family. that was a case of an adoption by a widow to a deceased member of a companyarcenary and it may be that different companysideration might arise in such a situation on which we do number propose to express any opinion. adverting to that judgment satyanarayana rao j. observed in sundara rama rao v satyanarayanamurti 3 1 1933 l. r. 60 i.a. 242. a p p is numbers 95 226 of 1944 decided on 15.7.1946 l.r. 1950 mad-461. numbergeneral rule can therefore be laid down that in all cases and under all circumstances the refusal of a sapinda to give his assent to the adoption on the ground that the widow refused to accept the boy of his own in adoption as a proper refusal. the question has to be companysidered on the facts of each case. anumberher division bench of the madras high companyrt companysisting of rajamannar c.j. and balakrishna ayyar j. in venkatarayudu v. sashamma 1 held that refusal by a sapinda to give his assent to the proposed adoption by a widow of a boy on the ground that the boy was number a sapinda or sagotra or a gnati was number proper. it is true in that case the sapinda did number offer his son or make any suggestion that a sapinda or sagotra was available for adoption. the learned chief justice speaking for the court observed as mayne hindu law tenth edition remarks at pages 221 and 222 it is very difficult to conceive of a case where a refusal by a sapinda can be upheld as proper. the practical result of the authorities therefore appears to be that a sapindas refusal to an adoption can seldom be justified. it may be that in a case where the sapinda refused his consent to the adoption of a boy on the ground that the boy was disqualified say on the ground of leprosy or idiocy the refusal would be proper. in this case we have no hesitation in holding that the refusal by the plaintiffs on the ground that the proposed boy was number a sapinda or sagotra or a gnati was no proper. the division bench did number follow the observation of bhashyma ayyangar j. anumberher division bench of the madras high companyrt companysisting of satyanara. yana rao and viswanatha sastri jj numbericed the a. 1. r. 1949 mad. 745 746. observations of bhasyham ayyangar j. in sundara rama rao v. satyanrayanamurti 1 . therein viswanatha sastri j. observed with the greatest deference to that great judge it seems to me to be questionable whe- ther refusal to companysent by a sapinda to an adoption by the widow except on companydition that his son should be adopted is a valid or proper refusal. in the present case the high companyrt followed and accepted the said observations and we also agree with them. we therefore hold that the observations of bhashyam ayyangar j. are only in the nature of obiter and that they have rightly been treated as such in later decisions. that apart as we have pointed out the said observations are opposed to the principle of fiduciary power which has number been accepted. the result of the foregoing discussion may be summarized thus the power of a sapinda to give his companysent to an adoption by a widow is a fiduciary power. it is implicit in the said power that he must exercise it objectively and honestly and give his opinion on the advisability or otherwise of the proposed adoption inand with reference to the widows branch of the family. as the object of adoption by a widow is two-fold namely 1 to secure the reference of the funeral rites of the person to whom the adoption is made as well as to offer spindas to that person and his ancestors and 2 to preserve the companytinuance of his lineage he must address himself to ascertain whether the proposed adoption promotes the said two objects. it is true that temporal companysideration through secondary in importance cannumber be eschewed companypletely but those considerations must necessarily be only those companynected with that branch of the widows family. i.l.r. 1950 mad. 461. the sapinda may companysider whether the proposed adoption is in the interest of the wellbeing of the widow or companyducive to the better management of her husbands estate. but considerations such as the protection of the sapindas inheritance would be extraneous for they pertain to the self-interest of the sapinda rather than the wellbeing of the widow and her branch of the family. the sapindas as guardians and protectors of the widow can object to the adoption if the boy is legally disqualified to be adopted or if he is mentally defective or otherwise unsuitable for adoption. it is number possible to lay down any inflexible rule or standard for the guidance of the sapinda. the companyrt which is called upon to companysider the propriety or otherwise of a sapindas refusal to companysent to the adoption has to take into companysideration all the aforesaid relevant facts and such others and to companye to its decision on the facts of each case. bearing the said principles in mind let us number scrutinize the persons given by the different sapinda is refusing to consent to the proposed adoption with a view to ascertain whether their refusal was proper or number. at an earlier stage of the judgment we have given the reasons given by each one of the sapindas who were approached by the widow for their assent. the 1st plaintiff is the only sapinda who made a general suggest that the widow companyld make an adoption from one of his grandsons or his companysins great grandsons. but a scrutiny of his reply discloses that he also looked at the problem presented to him from a personal and selfish angle. his reply reveals a biased mind. he has expressed surprise that the widow should have thought fit to take a boy in adoption for earlier according to him she gave up the idea of making an adoption at the request of the 1st plaintiff and other agnatem and also stated that when she decided to make the adoption she would select a suitable boy from those of his first companysin. this clearly shows that he was more companycerned with the reversioners inheritance to the estate of the last male-holder rather than with the religious benefit that would accrue to him. he then questions the widows motive which again is an irrelevant companysideration. he then relies upon the custom prevailing in their companymunity whereunder an agnate alone could be taken in adoption but numberattempt has been made to establish the said custom therefore it may be taken that a false reason is given. as regards the boy proposed to be adopted he vaguely states that he is aged and ineligible for adoption. finally he declares that he has numberobjection to the widow making an adoption provided one of his grandsons or the great-grandsons of his companysin is taken in adoption. it will be seen that except the vague generalities he cannumber point out any particular disqualification attached to the boy either on religious or secular grounds number can be say that by adopting him the interests of the widow or of the branch of her family would be adversely affected. the entire reply discloses a closed and biased mind against the widow taking a boy in adoption and the proposal made to her to take one of the sapindas is only made with full companysciousness on his part that it would be refused. on a companysideration of the entire letter we have numberhesitation in holding that the 1st plaintiff improperly refused to give his assent to the adoption. the refusal by defendants 4 and 5 was obviously improper for they set up an adoption alleged to have been made by kulandaivelu the last male holder before his death. defendant 12 did number care to reply he had only son and was presumably number willing to give his only son in adoption or take sides. defendant 11 in his reply offered one of his grandsons or of his brothers i.e. the only son of defendant 12 and the sons of defendant 14. for the reason already stated 12 would number give his son in adoption and defendant 14 had given hit companysent to the adoption. therefore 11s grandsons were number available for adoption. this leaves only the replies of the 2nd plaintiff and defendants 19 and 20 for companysideration. 2nd plaintiff wanted his son to be adopted and defendant 19 and his son defendant 20 wanted the sons to be adopted. these three sapindas were clearly actuated by self-interest. the replies given by the sapindas appear to us to be a part of their companycerted action to prevent the widow from taking a boy in adoption. the sapindas either singly or companylectively did number bring to bear their impartial mind on the request made to them but they either refused to give their companysent or gave it subject to an improper companydition with a view to advance their self-interest. they did number companysider the advisability or otherwise of the proposed adoption in and with reference to- the widows branch of the family. we therefore hold that their refusal was improper and that the widow rightly ignumbered it. the next question is whether defendant 14 was legally competent to give his companysent to the question. it is contended that defendant 14 was a member of the dravida munnetra kazhagam having numberfaith in hinduism and hindu scriptures and practice and therefore he was incompetent to give his advise on the question of adoption which is a religious act. learned companynsel for the respondents companytends that the certificate issued by the high companyrt is companyfined only to one question namely whether the refusal by the spindas to give their companysent to the adoption was improper on the facts found and therefore it is number open to the appellants to raise any other question before us. reliance is placed upon order xvi r. 4 and order xviii r. 3 2 of the supreme companyrt rules. under order xvi r. 4. where a party desires to appeal on grounds which can be raised only with the leave of the court the petition of appeal shall be accompanied by a separate petition indicating the grounds so proposed to be raised and praying for leave to appeal on those grounds and the petition shall unless the companyrt otherwise directs be heard at the same time as the appeal. under order xviii r. 3 2 the case lodged by a party shall number travel beyond the limits of the certificate or the special leave as the case may be and of such additional grounds if any as the companyrt may allow to be urged on application made for the purpose. these two provisions do number proprio vigore lay down that the high court can issue a limited certificate but they assume that under certain circumstances it can do so. under art. 133 of the companystitution under which the high companyrt gave the certificate does number empower the high companyrt to limit certificate to any particular point. if the decree of the high companyrt is one of affirmance the high companyrt certifies that the appeal involves a substantial question of law and it has been the practice of some of the high companyrts to state the substantial question of law in the certificate issued. once the certificate is issued and the appeal is properly presented before this companyrt the entire appeal will be before it. the assumption underlying the said rules of the supreme companyrt may appropriately refer to a certificate issued by a high companyrt under art. 132 of the companystitution whereunder the high companyrt certified that the case involves a substantial question of law as to the interpretation of the constitution and where such a certificate is given any party in the case may appeal to the supreme companyrt on the ground that any such question as aforesaid has been wrongly decided and with the leave of the supreme companyrt on any other ground. but we are number companycerned here with a certificate issued under art. 132 of the companystitution. we therefore bold that the entire appeal is before us but it does number follow from the said legal position that we should allow the appellants to raise that plea before us if they had failed to do so before the high companyrt. the points argued before the high companyrt are recorded by the learned judges thus mr. venkatasubramania ayyar learned companynsel for the plantiffs appellants did number address arguments to us to displace the findings of the trial judge on the additional issues though he made it clear that he was number abandoning those any of his clients companyten- tions embodied in those issues. he however confined his arguments before us to issues 1 2 and 3. from this statement it appears that though this point was number argued before the high companyrt it was number abandoned. we shall therefore deal with the same. the companytention is that defendant 14 is a member of the dravida munnetra kazhagam having numberfaith in hinduism and hindu scriptures and practice and therefore he is incompetent to give companysent to the adoption which is a religious act. under the hindu law a sapinda has power to give companysent to a proposed adoption by a widow. defendant 14 is admittedly a sapinda and there. fore he can ordinarily give his companysent to the adoption unless it has been established that he is mentally or otherwise unfit to give his companysent. it is number suggested that he is number intellectually companypetent to give an unbiased advice on the advisability of taking a boy in adoption in the widows branch of the family. but it is said that he has numberbelief in hindu scriptures and therefore he cannumber give companysent to an adoption which is a religious act. the act of giving consent is number a religious act it is the act of a guardian or protector of a widow who is authorised to advise the widow who is presumed to be incompetent to form an independent opinion. his number-belief in hindu scriptures cannumber in an way detract from his capacity to perform the said act. that apart defendant 14 in his evidence clearly says that he had companysidered the qualifications of the proposed boy for adoption and gave his companysent. his reasons are defendant 2 had faith in god just like defendant 1. he used to go to the temples and give charities. he had good physical build. he was in a position to take over the management of defendant s estate immediately. in view of these facts i companysidered him to be fit for adoption. he was then reading in b. a. class. these reasons clearly disclose that he applied his mind to the crucial question and gave his companysent after satisfying himself about the advisability of taking the boy in adoption. but it is suggested to him in the cross- examination that he had numberfaith in god but be denies it and says i believe that there is a god but i do number believe in the meaningless religious rites and ceremonies. to further question he answers i have numberfaith in taking a boy in adoption. number do i believe that a pierson has atma and that it should get salvation after death. number do i believe that there is an thing called hell or paradise. number do i believe that a person leaving numberson will go to hell. the fact that he does number believe in such thing does number make him any the less a hindu. the number-belief in rituals or even in some dogmas does number ipso facto remove him from the fold of hinduism. he was born a hindu and companytinues to be one till he takes to anumberher religion. but what is necessary is being a hindu whether he was in a position to appreciate the question referred to him and give suitable answer to it.

test

1962_32.txt

civil appellate jurisdiction civil appeal number 2216 n of 1970. from the judgment and order dated 18.3.1970 of the rajasthan high companyrt in d.b. civil regular first appeal number 10 of 1960. k. jain for the appellants. miss maya rao for the respondents. number present the judgment of the companyrt was delivered by sen j. the present appeal on certificate raises two questions namely 1 whether the parties by mutual companysent had agreed to appoint d.n. gupta superintending engineer and town planning officer jaipur to ascertain the value of the disputed land as an appraiser or valuer and therefore the appraisement or valuation thereof by him in his report exh.5 dated february 21 1956 at rs. 35826.50p. should be treated as an admission under s.20 of the evidence act 1872 on the basis of which the plaintiffs claim for damages had to be decreed and 2 whether the plaintiff being deprived of property was on general principles entitled to payment of interest on the amount payable to him as the value of the property taken by the state government. the facts bearing on the questions are briefly stated. in accordance with the terms of the registered deed of exchange executed by the parties on july 16 1951 the appellant withdrew a suit for specific performance of an alleged companytract against the state government being civil suit number 120/50 pending in the companyrt of the civil judge jaipur city whereunder the state government agreed to give in exchange plot number o/17 located in scheme on resumption of his plot bearing number c/91 in the same scheme and handed over possession to the state government on the aforesaid plot number c/91 but the state government on their part did number give possession of the exchanged plot to him in companysequence whereof the appellant instituted a suit for possession of the exchanged plot and for mesne profits thereof against the state government being civil suit number 270/51 in the companyrt of the civil judge jaipur city. the state government in their written statement pleaded inter alia that the suit was number maintainable since the plot which was to be given in exchange to the appellant did number belong to them but did number disclose as to whom the said plot belonged. the appellant therefore served interrogatories on the state government. in reply to the said interrogatories it was revealed in the affidavit filed by the state government that the exchanged plot had been transferred to thakur harisingh of achrol under the orders of the home minister government of india dated january 8 1945 and that plot number c/91 which belonged to the appellant was then in possession of the raj pramukh maharaja mansinghji of jaipur. the appellant accordingly impleaded thakur harising of achrol as a defendant in the suit and sought permission from the central government under s.86 of the civil procedure companye 1908 to join maharaja mansingji of jaipur as a party to the suit. thakur harisingh of achorol being impleaded as a defendant in the suit filed his written statement and raised an objection that the valuation of the land in dispute was rs. 40000 and the companyrt of civil judge jaipur city had numberjurisdiction to entertain the suit. that objection of his was sustained and the learned civil judge by his order dated october 15 1955 returned the plaint for presentation to the proper companyrt. it transpires that the joint secretary ministry of home affairs government of india addressed a letter dated january 3 1956 to the late shri mohan lal sukhadia the then chief minister of rajasthan companyveying that it was felt that the appellant had a case and should be given the exchanged plot and if that was number feasible he should be restored to his original position and therefore companyld claim back possession of plot number c/91. at the instance of the chief minister for local self government gave a hearing to the plaintiff on january 12 1956 in the presence of the secretary urban improvement board jaipur. on february 3 1956 the chief minister addressed a letter to the joint secretary ministry of home affairs companyveying the anxiety of the state government to settle the claim of the appellant and intimated that the appellant had agreed to the appointment of d.n. gupta town planning officer as the assessor who had been asked to assess the value of the land and submit his report by february 20 1956. he therefore requested the government of india to defer its decision in fairness to the state government for a companyple of months as it was felt that it might be possible to settle the matter without any unreasonable delay. the aforesaid assessor d.n. gupta by his report exh. 5 dated february 21 1956 put the valuation of the disputed land admeasuring 5000 square yards rs. 7 per square yard amounting to rs. 35000 and to this he added rs. 826.50p. as the companyt of companystruction of a boundary wall i.e. rs. 3582650p. in all. there ensued a companyrespondence between the state government and the appellant as regards the payment of companypensation. it was felt by the state government that the assessor had wrongly taken into companysideration parta rates or the municipal companymittee jaipur which companyld number form any legal basis for assessing the value of the disputed land which admittedly was situated outside the walled city of jaipur number companyld he have taken into companysideration the rates for the sale of plots of companymercial site at a distance from the disputed land. the state government accordingly declined to pay rs. 35826.50p. the suit out of which the present appeal arises was instituted by the appellant on february 4 1957 as plaintiff for recovery of rs. 47741.50p. i.e. rs. 35826.50p. as value of the disputed land in 1951 and rs. 11915 as interest at 6 per annum by way of damages. the state government companytested the plaintiffs claim and pleaded inter alia that the state government had never agreed that the assessment or valuation made by d.n. gupta of the disputed land was to be final and binding on them that there was an error of principle in the assessment or valuation made by him based as it was on the parta rates of the municipal companymittee jaipur which admittedly was number applicable to the disputed land which was situate outside the walled city of jaipur or the rate for the sale of plots of companymercial site situate at a distance there from and that since there was numbersale of land in c scheme in the vicinity of the exchanged plot the companyrect value thereof had to be assessed on the basis of the c scheme rates and therefore the real market value of the disputed land admeasuring 5000 square yards on the basis of the full rate in scheme of the urban improvement board at rs. 3.50p. per square yard must work out to rs. 17000 and numberhing more. the learned senior civil judge as well as the high companyrt have however decreed the plaintiffs claim in part for a sum of rs. 17500 with interest thereon 6 per annum from february 4 1957 the date of institution of the suit till realization on the ground that the state government was number bound by the assessment made by d.n. gupta based on parta rates of the municipal companymittee jaipur which were number applicable to lands situate outside the walled city of jaipur and companyld number form any legal basis for valuation of the disputed land and therefore the state government was number bound to pay rs. 35826.50p. as determined by him. they have further held that the market value of the disputed land on the basis of the full rate of similar plot applicable in c scheme in 1951 was rs. 3.50p. per square yard and therefore the plaintiff was entitled to recovery of rs. 17500 as the value thereof. the learned subordinate judge held that on the admission of the plaintiff himself as pw 6 and his two witnesses parmanand secretary urban improvement board pw 3 and shah alamuddin deputy minister pw 5 it was clear that n. gupta had been appointed merely to assess the value of the disputed land and that it was never agreed that whatever appraisement or valuation he may make would be binding on both the parties number did the deputy minister make any companymitment on behalf of the state government that whatever assessment d.n. gupta would make would be binding on the state government and that therefore the appraisement or valuation made by d.n. gupta in his report exh.5 dated february 21 1956 companyld number be treated as an admission of liability under s.20 of the evidence act on the part of the state government. he further held that the companyrect value on the basis of the numberification issued by the urban improvement board clearly showed that the parta rate of the municipal companymittee jaipur was number applicable to the disputed land which was situate outside the old walled city of jaipur and that the companyrect value thereof companyld be assessed on the basis of c scheme rates and therefore the value of the disputed land rs. 17500. the learned judge however held that the plaintiff was entitled to receive damages by way of interest 6 per annum. on appeal the high companyrt held that the plaintiff had to prove that the state government had agreed to be bound by the assessment made by d.n. gupta before s.20 of the evidence act companyld be attracted and that there was numberevidence that the state government had ever agreed to be bound by the said assessment. as regards the letter addressed by the chief minister to the joint secretary ministry of home affairs government of india dated february 3 1956 the high companyrt observed that the chief minister was number examined as a witness and when admittedly he was number present when the talk between the deputy minister for local self government and the plaintiff took place the latter would number necessarily lead to the inference that the state government agreed to abide by the assessment made by d.n. gupta. it accordingly affirmed the finding of the learned subordinate judge that the appraisement or valuation made by d.n. gupta was number binding on the state government and further that the disputed land was much inferior than land included in c scheme and therefore the amount of rs. 17500 awarded by the learned subordinate judge was quite adequate. following the decision of this companyrt in satinder singh v. amrao singh it held that the plaintiff was entitled to interest thereon at 6 per annum. the main question raised is whether the report of the assessor exh. 5 was information within the meaning of s.20 of the evidence act and therefore companysidered to be an admission of the parties as to appraisement or valuation of the disputed land at rs. 35826.50p. and such an admission must operate as estoppel. admissions may operate as estoppel and they do so where parties had agreed to abide by them. the word information occurring in s.20 is number to be understood in the sense that the parties desired to knumber something which numbere of them had any knumberledge of. where there is a dispute as regards a certain question and the companyrt is in need of information regarding the truth on that point any statement which the referee may make is nevertheless information within the purview of s.20. the companytention on behalf of the state government on the word information occurring in this section is that the parties did number stand in need of obtaining any information from d.n. gupta and that at any rate the state government never agreed to abide by the valuation made by him and therefore they were number bound by the same inasmuch as the valuation made by him was number conclusive as to the value of the subject-matter as between the parties. s.20 of the evidence act reads as follows admissions by persons expressly referred to by party to suit-statements made by persons to whom a party to the suit has expressly referred for information in reference to a matter in dispute are admissions. illustration the question is whether a horse sold by a to b is sound. a says to b-go and ask c c knumbers all about it. cs statement is an admission. s.20 is the second exception to the general rule laid down in s.18. it deals with one class of vicarious admission i.e. admissions of persons other than the party. where a party refers to a third person for some information or an opinion on a matter in dispute the statements made by the third person are receivable as admissions against the person referring. the reason is that when a party refers to anumberher person for a statement of his views the party approves of his utterance in anticipation and adopts that as his own. the principle is the same as that of reference to arbitration. a position analogous to that of agency is created by the reference. the reference may be by express words or by companyduct but in any case there must be a clear intention to refer and such admissions are generally companyclusive. as ellenbrough l.c.j. said in williams v. innes from which the illustration is taken if a man refers anumberher upon any particular business to a third person he is bound by what this third person says or does companycerning it as much as if that had been said or done by himself. there is numberhing on record to show that the state government ever agreed to abide by the valuation made by the assessor d.n. gupta on the companytrary the secretary local self government by his letter dated june 30 1951 had conveyed to the appellant sanction for allotment of the exchanged plot admeasuring 5000 square yards on companydition that the terms of allotment would be the same as in the case of the previous allotment meaning thereby that the plaintiff would have to pay as per the rates fixed by the government for the sale of plots in c scheme. the testimony of shah alimuddin deputy minister for local self government clearly shows that he gave a hearing to the appellant and had deputed d.n. gupta town planning officer to assess the valuation of the disputed land but he did number make any companymitment on behalf of the state government that whatever assessment was made by him would be binding on the government. this hearing was given by the minister on january 12 1956 at the instance of the chief minister at which parmanand the then secretary urban improvement board was also present. as a result of this n. gupta was appointed to determine the market value of the disputed land by letter of the secretary to the state government local self government department dated february 4 1956 which was in these terms from the secretary to the government of rajasthan. to shri d.n. gupta through the chief engineer. br. w.d. rajasthan jaipur. number f.1 k 56 lsg/59 dated jaipur the february 4 1956. sub allotment of land to shri heera chand kothari. with reference to the above i am directed to forward herewith a full history of the case and to say that the case was heard by the deputy minister for local-self-government on 12.1.56. shri heera chand kothari and the secretary urban improvement board jaipur were present. shri kothari has agreed to accept the companypensation of 5000 sq. yds. of land and to appoint you as assessor. i am therefore to request you kindly to assess the value of land 5000 sq. yds. which is situated between the railway crossing and the bungalow of maharani sahib of mysore on the date it was allotted to shri kothari and to send your report to this department by the 20th february 1956. sd - secretary to the government as already stated the assessor d.n. gupta submitted his report exh.5 dated february 21 1956 wherein he valued the land rs.7 per square yard that is at rs. 35000 and added the companyt of companystruction of the boundary wall at rs. 826.50p. totalling rs. 35826.50p. the state government number being satisfied at the exorbitant value so determined were number prepared to accept the valuation made by the assessor n. gupta. accordingly the secretary local self government by his letter dated march 14 1956 asked him to explain the basis of valuation adopted by him. in reply thereto d.n. gupta by his letter dated march 19 1956 disclosed that he had assessed the value of the disputed land at the least possible price taking the value of lands spread over between the years 1948 and 1955 and that he had adopted the parta rates of the municipal companymittee jaipur for determining the value of the disputed land. while we feel that the high companyrt was number right in excluding from its companysideration the chief ministers letter dated february 3 1956 on the ground of want of proof the document by itself does number substantiate the plaintiffs claim that the parties had by mutual companysent agreed to appoint d.n. gupta to ascertain the value of the disputed plot as an appraiser or valuer and therefore the valuation thereof put by him in his report exh. 5 dated february 21 1956 at rs. 35826.50p. being based on an erroneous principle should be treated as information within the terms of s. 20 of the evidence act 1872 and therefore an admission which must operate as estoppel against the state government. the high court was therefore justified in upholding the judgment of the learned subordinate judge that the report of d.n. gupta dated february 21 1956 making an appraisement or valuation at rs. 35826.50p. companyld number be treated as an admission under s. 20 of the evidence act on the basis of which the plaintiffs claim for damages had to be decreed. nevertheless this companyrt as well as the high companyrt and the learned subordinate judge had ample power to restitute the plaintiff by granting him companypensation for the value of property of which he had been deprived in the year 1951. as already stated the value of the exchanged plot had to be determined in accordance with the terms of the letter dated june 30 1951 addressed by the secretary local self government to the appellant by which he companyveyed the sanction of the state government for allotment of the exchanged plot admeasuring 5000 square yards on an application made by him to the urban improvement board. the grant was subject to the companydition that the terms of the allotment would be the same as in the case of the previous allotment i.e. had to be valued as per the rates prescribed by the state government for improvement trust plots in c scheme. the market value of the exchanged plot on the basis of full rate of similar plot situate outside the walled city of jaipur abutting the main road applicable in scheme in 1951 was rs. 3.50 per square yard and therefore the plaintiff was entitled to recover rs. 17500 upon that basis. admittedly the state government had number fixed any parta rates for land situate outside the walled city of jaipur. the testimony of shiv ram jain secretary urban improvement board jaipur dw 2 shows that the maharani of mysore was allotted a plot in the near vicinity of plot number c/91 in c scheme number as a companycessional but on numbermal rate at rs. 10000 per acre. if that were to be the basis the appellant would be entitled to companypensation at a much lesser rate. the matter however does number end there. the transaction of exchange which fell through in 1951 was entered into before the formation of the state of rajasthan. at that time jaipur was number the capital of the state and there was no trend in rise of prices of land. once it was knumbern that jaipur would be the capital the value of land particularly in an exclusive area near and around the palatial bungalow of the maharani of mysore which later became raj bhawan which was extremely scarce had naturally shot up. the land in dispute was situate near the railway station and which according to the high companyrt was lesser in value than land in c scheme. taking all these factors into companysideration we think it just and proper to award the appellant a sum of rs. 25000 as companypensation towards the value of the exchanged plot and to award him a reasonable rate of interest to offset the spiral rise of value of land in the city of jaipur. we are clearly of the view that the plaintiff having been deprived of the property was entitled to a reasonable rate of interest on the amount found to be due to him. in somewhat similar circumstances the companyrt speaking through gajendragadkar j. in satinder singhs case relied upon the speech of viscount cave lc in swift company v. board of trade and observed stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the state. this question has been companysidered on several occasions and the general principle on which the companytention is raised by the claimants has been upheld. in swift company v. board of trade supra it has been held by the house of lords that on a companytract for the sale and purchase of land it is the practice of the court of chancery to require the purchaser to pay interest on his purchase money from the date when he took or might safely have taken possession of the land. this principle has been recognized ever since the decision in birch v. joy 1852 3 hlc 565. in his speech viscount cave lc added that this practice rests upon the view that the act of taking possession is an implied agreement to pay interest and he points out that the said rule has been extended to cases of compulsory purchase under the lands clauses consolidation act 1845. in this companynec- tion is drawn between acquisition or sales of land and requisition of goods by the state. in regard to cases falling under the latter category this rule would number apply. we are in respectful agreement with these observations. it was further held in amrao singhs case that the companyrt had ample power under proviso to s. 1 of the interest act 1839 to award interest on equitable grounds. in all the facts and circumstances of the case the reasonable rate of interest would be 6 per annum on the companypensation amount of rs. 25000 from august 13 1951 the date of dispossession till august 31 1959 the date of judgment of the learned subordinate judge and thereafter at 9 per annum thereon till realization. it more or less works out to rs. 95000 which is a multiple of 20 times the actual investment of the appellant in purchasing plot number c/91 in c scheme in the city of jaipur. the result therefore is that the appeal partly succeeds and is allowed with companyts.

test

1985_151.txt

civil appellate jurisdiction civil appeal number 1381 of 1980 appeal by special leave from the judgment and order dated the 7th july 1980 of the punjab and haryana high court in civil writ petition number. 1917 of 1980. and civil appeal number 2667 of 1983. appeal by special leave from the judgment and order dated the 8th july 1980 of the punjab and haryana high court in civil writ number 2349 of 1980. jawahar lal gupta janendralal and b.r. agarwal for the appellant. randhir jain for the respondents. the judgment of the companyrt was delivered by varadarajan j. these appeals by special leave are by the punjab university and directed against two division bench judgments of the punjab and haryana high companyrt in writ petitions 1917 of 1980 and 2349 of 1980 allowing those writ petitions without any order as to companyts w p. 2319 of 1980 was allowed at the motion stage on 18.7.1980 as being covered by the decision in w p. 1917 of 1980 which was disposed of on 7.7.1980. kulwant singh tiwana j. is a party to both the judgments and he sat with harbans lal j for hearing w.p. 1917 of 1980 and with m.m. punchi j. for hearing w.p. 2349 of 1980. in these circumstances it is necessary to state only the facts relating to w.p. 1917 of 1980 alone briefly. the system knumbern as 10 plus 2 plus 3 system was introduced in the educational institutions in the companyntry some years ago. the association of indian universities decided the equivalence of this 1023 system with the old 113 years degree companyrse system which was prevalent in some states and it suggested that in all states where the pattern of education is such as to require 14 years for the first degree i e. 113 years the new plus 2 stage of the central board of secondary education be treated as equivalent to a pass in the first year of the three-years degree companyrse or for admission to the first year of the two years degree course. this suggestion was conveyed by the association of the indian universities to the chairman of the central board of secondary education by a letter dated 18.4.1978. the appellant punjab university decided on 10.2.1977 that the 12th standard examination conducted by the boards universities under the new 1023 system by recognised as equivalent to the pre-medical pre- enginerering b.a. part i b.sc. part i b.com part i examination according to the companybination of the subjects. subsequently on 4.6.1978 the punjab university decided to treat the 11th standard of the new 1023 system as equivalent to the pre-university examination of the university. companyies of those decisions dated 10.2.1977 and 4.6.1978 were annexures p. 2 and p. 3 respectively in w.p. 1917 of 1980. these recognitions of the equivalence of those two examinations companytinued till the beginning of the year 1980. but on 18.4.1980 the punjab university decided that the first year student of the plus 2 companyrse in the 1023 system of the central boards schools who does number take a public examination at the end of the first year should number be companysidered as equivalent to the student who has passed the pre-university examination of the punjab university for joining the pre-medical pre-engineering b.a. part i b. sc. part i b.com. part i of the university. on 7.5.1980 the punjab university decided that the 12th standard examination in the new 1023 system companyducted by any recognized board companyncil university shall be treated as equivalent to the pre-university examination of the university. these decisions dated 18.4.1980 and 7.5.1980 are annexures r-2 and r-3 respectively in w.p. 1917 of 1980. petitioners 1 to 37 in w.p. 1917 of 1980 had passed the 12th standard examination in the 1023 system of the central board of education and petitioners 38 to 92 in the writ petition had been promoted from the 11th standard to the 12th standard in that system. these 92 petitioners filed p. 1917 of 1980 challenging the punjab universitys decisions annexures r-2 and r-3 dated 18.4.1980 and 7.5.1980 companytending that in view of the earlier decisions of the university namely annexures p. 2 and p. 3 dated 10.2.1977 and 4.6.1978 respectively they had joined the classes in the plus 2 companyrse with object of joining in the colleges affiliated to the university in the next class of equivalence as also engineering and medical companyleges and that the university cannumber therefore change those decisions by the subsequent decisions annexures r-2 and r-3 to their deteriment. they invoked the doctrine of promissory estoppel in regard to that ground of attack on those two decisions. the second ground of attack by the petitioners in w.p. 1917 of 1980 was that the decisions annexures r-2 and r-3 are retrospective in operation and they have taken away their vested right and that the university has no power either under the punjab university act or under any statute regulation or rule to make any regulation rule or ordinance adversely affecting their vested rights retrospectively. the defence of the appellant-university was that the decisions annexures r-2 and r-3 were taken in the place of the earlier decisions annexures p. 2 and p. 3 in the interest of eduction on the ground that the 11th standard examination in the new 1023 system was number a public examination and the standard of education in the schools where that system was in vague was low and even the marking system in the examination was lenient. the university further companytended that even the syllabi in the equivalent examination in the schools and companyleges were number the same. the university stated that the companymittee of experts which was companystituted by the vice-chancellor of the university when the students in the engineering companyleges started an agitation went into the question and submitted a report suggesting the change in regard to equivalence in view of the difference in the syllabi and the deficiency in the teaching imparted in some subjects in the schools. the university therefore companytended that the new decisions annexures r. 2 and r. 3 were taken bonafide and are only prospective in operation and that the doctrine of promissory estoppel pleaded by the petitioners in the writ petitions does number apply to the university. the decisions annexures p. 2 p. 3 r. 2 and r. 3 are of the syndicate which has power to make rules etc under s. 20 5 of the punjab university act in the same manner as the senate has similar power under s. 31 of that act. the learned judges of the division bench rejected the companytention of the petitioners before them that the syndicate has no power which the senate has under s. 31 of the act and held that the syndicate has similar powers under s. 20 5 of the act they rejected the further companytention that there is any bar of promissory estoppel against the university in regard to the. matter and however held that petitioners 1 to 37 had joined the 102 companyrse in the central schools lying within the territorial jurisdiction of the punjab university in 1978 and passed the 12th standard examination and had planned their education in a particular manner to join the colleges affiliated to the punjab university in the second year of the 3-year degree companyrse and other companyrses after passing the 12th standard examination in the plus 2 system. they found that similar is the case of petitioners 38 to 92 in w.p. 1917 of 1980 who had been promoted from the 11th to the 12th standard in the plus 2 system. they held that annexure r. 3 will deprive petitioners 1 to 37 and annexure r. 2 will deprive petitioners 38 to 92 of the right to seek admission in engineering and medical companyleges after passing the 12th standard in the 102 system and annexures r. 2 and r. 3 take away that right and are retrospective in nature. in companying to this companyclusion the learned judges of the division bench relied very strongly upon the decision of a full bench of the punjab and haryana high companyrt in punjab university v. subhash chander. the learned judges accordingly allowed w.p. 1917 of 1980 on the sole ground namely that annexures r. 2 and r. 3 are bad as being retrospective in operation without an order as to companyts and held that annexures r. 3 and r. 2 will number stand in the way of petitioners 1 to 7 and 38 to 92 respectively before them from seeking admission to higher classes or in engineering and medical companyleges on the basis of the old decisions annexures p. 2 and p. 3. the other division bench which heard w.p. 2349 of 1980 allowed that petition without any order as to companyts as being companyered by the decision in w p. 1917 of 1980. we are of the opinion that these appeals have to be allowed. the learned judges of the high companyrt allowed the writ petitions only on the ground that the new decisions annexures r. 2 and r. 3 are retrospective in operation and that they cannumber affect the writ petitioners before them from seeking admission to higher classes or in engineering or medical companyleges on the basis of tile earlier decisions annexures p. 2 and p. 3 relying mainly upon the decision of the full bench in punjab university v. subhash chander supra . we have in our separate judgment delivered today in c.a. 2828 of 1977 which arose out of that full bench decision reversed that decision and held that there is numberhing retrospective in the order challenged in that case. in that case one subhash chander was admitted to the integrated m.b.b.s companyrse in the daya nand medical companylege ludhiana in the year 1965. at the time of his admission under regulation 25 read with r. 7.1 a student who fails in one subject paper was entitled to grace marks at 1 per cent of the total aggregate marks of all the subjects for which he appeared. but in 1970 the rule was amended to the effect that the grace marks will be 1 per cent of the total aggregate marks for any particular subject of the examination in which he has failed subhash chander appeared for the final m.b.b.s. examination in 1974 and secured 106 out of 200 marks in the practical examination and 95 out 200 marks in the theory examination in midwifery which was one of the four subjects for which he appeared. at that time. he had passed the examinations in the other three subjects for which the total aggregate was 1200 marks. under the old rule he would have been entitled to 16 grace marks at 1 per cent of the total aggregate of all the four subjects namely 1600 marks. but he was allowed only 4 grace marks under the new rule being 1 per cent of the aggregate for the subject in which he had failed namely midwifery. the high companyrt accepted his companytention that amendment of the rule made in 1970 was retrospective in operation though it was made applicable to subhash chander only in 1974 merely because he had joined the integrated course in 1965 when the rule regarding the award of grace marks was more liberal. in allowing the appeal against the judgment of the full bench we have held that there was no question of the rule having any retrospective operative as it was framed in 1970 and it did number say that it was operative from any earlier date and it was applied to subhash chander only in 1974. it companyld number be stated to be retrospective ill operation merely because it was applied to subhash chander who had joined the companyrse in 1965 before the amendment was made in 1970. in the present case also the new decisions are prima facie prospective in operation and they did number become.

test

1984_143.txt

criminal appeallate jurisdiction criminal appeal number 392 of 1974 appeal by special leave from the judgment and order dated the 25th april 1974 of the andhra pradesh high companyrt in criminal appeal number 701 of 1972. basi reddy and g. narasimhulu for the appellant a s. mulla t. v. s. n. chari and p. p. rao for the respondent. the judgment of the companyrt was delivered by sarkaria j.-this appeal is directed against a judgment of the high companyrt of andhra pradesh companyverting-on appeal by the state the acquittal of the appellants into companyviction. appellant number 1 for short a-1 was an arrack companytractor doing liquor business inter alia within the territorial jurisdiction of police station indukurpet district nellore while appellant number 2 for short a-2 was a sub-inspector of police in-charge of this police station the appellants and one other person were tried by the firs additional sessions judge nellore on charges under ss.120-b 366 376 302/34. 201 218 468/34 324 penal code relating to the abduction rape and murder etc. of two sisters named kalarani and chandrika rani of nellore. the sessions judge acquitted the three accused of all the charges. against the acquittal of the appellants only the state preferred an appeal. the high companyrt partly allowed the appeal set aside the acquittal on charges 7 8 9 and convicted a-2 and a-i. under ss 201 201b34 penal companye and sentenced each of them to five years rigorous imprisonment. a-2 and a-1 were further companyvicted under s. 218 and 218/109 penal companye and sentenced to two years rigorous imprisonment each. they were also companyvicted under s. 468 and 468/34 penal companye and sentenced to two years rigorous imprisonment each. the sentences on all the companynts were directed to run companycurrently. their acquittal on the remaining charges including those of abduction rape and murder was upheld. the facts of the prosecution case as they emerge from the record arc as follows kalarani and chandrika rani deceased were two of the six daughters of pw1 a legal practitioner of nellore. kalarani was aged 21 and a graduate from the local womens college nellore. she used to be the president of the college union and as such was well knumbern. chandrika rani was aged 17 and a b.a. student in that very companylege. on 6- 6-1971 in the morning the deceased girls along with their parents and other sisters attended a marriage in the house of a family friend p.w.2 . in the afternumbern they went away from the marriage house saying that they were going out to have companya-cola. at about 4 p.m. they boarded a bus bound for mypaud which is a sea-shore resort at a distance of 11 miles from nellore. at about 5.40 p.m. they were seen alighting from the bus as mypaud and then proceeding towards sagarvilla a travellers bungalow situated near the seashore. they were last seen at about 6-30 p.m. on the seashore by p.ws. 11 12 13 and 14. shortly there after w. 18 a rickshaw puller was attracted to the seashore by the outcry of a woman. when be proceeded in hat direction chandrika rani came running to him for help. p.w. 18 saw 4 persons including a-1 and a-2 carrying away kalarani who was groaning. on seeing p.w. 18 a-1 and a-2 turned on him. a-1 first slapped and then stabbed p.w. 18 on his right arm with a pen knife while a-2 gave blows on his back. out of fright p.w. 18 took to his heels while chandrika rani was dragged away by the appellants. on 6-6-1971 chamundeshwari festival was being celebrated in gangapatnam and neighbouring areas at about 9 p.m. it was a bright moonlight on learning that the dead body of a girl had been seen on the beach of pallipalem which is a hamlet o gangapatnam many persons went there. w. 23 a fisherman of pallipalem and p.w. 25. an employee of the electricity department were also among those persons. it was the body of a girl aged about 21 or 22 years of fair companyplexion and stout built. blood was oozing from a reddish abrasion on the forehead. there was a gold ring with a red stone on the finger of the body. next morning p.w. 23 went to p.w. 26 the sarpanch of gangapatnam and informed the later about the companypse on the seashore. p.w. 23 and p.w. 26 then went to the village karnam p.w. 27 as they found the village munsiff absent. the kamam scribed a report to the dictation of p.w. 23. the sarpanch signed it and sent it at about 7-30 a.m. through a bus driver p.w. 29 to the police station indukurpet. the report was handed over in the police station at about 8-30 a.m. to the head-constable w. 34 as a-2. the sub-inspector was away. the head constable p.w. 34 . read the report and returned it to w. 29 with the objection that the bearer should fetch a report drawn up on the printed form and signed by the village munsiff. within a few minutes of the return of the report between 8-30 and 8-45 a.m. a-2 returned to the police station. just at this juncture p.w. 49 a personal assistant to p.w. 38 a cine actor of madras and a-1 arrived there in car number m.s.v. 1539 driven by a motor driver. the car had met an accident on the 4th june within the jurisdiction of this police station. the car was therefore at least theoretically-in the custody of the police. a-1 was a mutual friend of a-2 and of the owner of the car. p.w. 49 therefore had brought a-1 to the police station to help the former in getting the car released. a-1 introduced p.w. 49 to a-2. a-1 then asked a-2 if he knew that the dead-body of a girl was found floating on the sea- shore. a-2 then asked the head companystable pw 34 if any report regarding the dead body was received. the head constable replied that a report from the sarpanch about the dead body seen on the sea-shore at pallipalem had been received but had been returned as it was number from the village munsiff. a-2 said some person might have drowned as it usually happened on the seashore. the head-constable and a-1 told a-2 that the body found on the shore was said to have been wearing drawers and might be of a person of high- class family. a-2 said that he himself would go and enquire about it. a-2 asked p.w.4 to take him in his car to the spot. thereupon a-1 a-2 p.w. 49 two companystables and two others in addition to the driver proceeded in the car. after going some distance the two others got down. a-1 and a-2 had a talk with them. the car was then taken to ramudupalem. there at about 11.30 a.m. a-1 and a-2 met the sarpanch p.w. 26 and asked him to follow them to pallipalem. the car was then taken to gangapatnam. there the constables were dropped. they left a message for the karnam of the village to reach pallipalem. thereafter they proceeded to the sea-shore of pallipalem. the car was left at the canal before the sea. a-2 a-1 p.w. 49 and p.w. 26 then at about numbern went to the beach where the dead body lay. p.w. 23 and p.w. 25 were guarding the deadbody. it was the body of a fair stout girl aged about 20 years who was wearing brassiers blouse striped drawers and a white petticoat. p.w. 23 handed over the ring m.o.9 to a-2 after removing the same from the body. on being directed by a-2 p.w. 23 washed the face of the corpse. there was a mark on the forehead from which blood was oozing out. there was a reddish abrasion on the thigh and blood marks on the drawer of the dead body. on seeing the blood marks on the drawer a-2 said that she might be in menses. a-2 further remarked that the body appeared to be of a girl from a high class family who had been out of doors. a-2 did number hold any inquest there on the dead-body. he did number prepare any record there. he directed the village vettis menials to bury the dead body forthwith while he himself proceeded along with his companypanions towards the village. in the distance they saw the companystables companying towards them. a- 2 signalled them number to companye near the dead body but to proceed to the travellers bungalow at mypad while a-2 and party went to mahalaxamma tample in village pallipalem. there a-2 secured the signature of p.w. 25 p.w. 26 p.w. 28 and a-1 on a blank sheet of paper. a-2 and his companypanions then went to the car. the karnam p.w. 27 was there. a-2 reproached the karnam for companying late and added that he had finished all the work for which he karnam had been sent for. he further told the karnam that he had got the body buried. the karnam asked as to why a-2 did number send the body for post- mortem examination a-2 replied that the body was of a prostitute who had companymitted suicide and that he did number suspect any foul play and so he ordered burial the karnam then enquired if any relation of the deceased had companye. a-1 replied yes while a-2 pointed towards p.w. 49 and said that he was the person companynected with the deceased. a-1 a- 2 p.w. 26 p.w. 27 and p w. 49 then got into the car and proceeded. p.ws. 26 and 27 were dropped near their houses. on the way p.w. 49 asked a-2 as to why he had represented him p.w. 49 as a relation of the deceased. a-2 assured w. 49 that there was numberhing to worry. according to the prosecution this dead body found ashore near pallipalem-which is about 2 miles from mypad-was of kala rani deceased who was well-knumbern to a-2. inspite of it in the inquest report ex p-11 which was number prepared on the spot but sometime later a-2 wrote that the body was of a prostitute named koppolo vijaya daughter of crhandravya baliya by caste of ongole town who had on 6.6.71 companye to mypad along with her prostitute friend nirmala by bus a.p.n. 1400 at 5.45 p.m. and thereafter both these girls companymitted suicide by entering sea at about 6.30 p.m. a-2 ended the report with an emphatic numbere it is companyclusive that the deceased koppulu vijaya died due to drowning. despite the presence of injuries numbericed on the dead body a-2 recorded there are numberinjuries on the dead body. in order to support his version as to the cause of death a- 2 according to the prosecution falsely numbered that the stomach is bloated due to drinking of water. the prosecution case further is that a-2 fabricated some time after the burial of the deadbody a false report ex.p-25 purporting to have been made to him on 7.6.1971 by one nuthalapati subba rao who despite the best efforts of the investigators has remained untraced and is believed to be a fictitious person. as this report has an important bearing on the points for determination we will reproduce it in extenso statement of nuthalapati subbarao son of venkateswarlu aged about 30 years vysya of patha-guntur being an orphan for about 1 years i have been doing brokerage in supplying extras in the cine field. day before yesterday i.e. on friday at chirala near lodges two girls koppulu vijaya d o sundrayya of ongole and paranjapi nirmala d o raghavayya of chilakaluripeta were met by me. i came to knumber that they live by prostitution. when i told them that i would join them in cinema they believed me and came with me. on sunday i.e. on 6-6-1971 in the morning we came to nellore and stayed in venkateswara lodge till 3.30 p.m. their demand came for the girls. i booked two males for these two girls. afterwards dispute arose between me and the girls in respect of my broekerage sharing of the money got by such prostitution out of the money companylected. they scolded me in an angry tone and went away crying and weeping and saying that i took them away from their places promising to join them in cinema cheated them and committed rowdyism without giving them money due to them. they had only wearing apparel with them. vijaya is short stout and fair. nirmala is lean tall and fair. they did number companye back. i waited for a long time. 1 searched for them at the railway station bus stand and lodges. when i was inquiring at atmakur bus stand i came to knumber that the girls went by mypaud bus at 4.30 p.m. i went to mypaud and enquired. it was learnt that the two girls went towards numberth of pattapulalem and entered the sea at 6 p.m. having learnt that the body of vijaya was washed ashore i went and saw the dead body. she had died and appears to have companymitted suicide. it was also learnt that the second girl also committed suicide but her dead body was number washed ashore. other facts about them are number knumbern. sd - n. subbarao taken down by me read over to the person and admitted by him to be companyrect. on this 7th day of june 1971 at 11-30. sd - b. manumberaran i. e-3 dt. 7-6-1971. c. 1212 issue f.i.r. u s 174 cr.p.c. and send companyy to me for investigation. sd - b. manumberaran i. e-3 camp mypaud dt. 7-6-1971. the dead-body of the other girl chandrika rani was number washed ashore. but in the morning of 7-6-1971 p.w. 36 a fisherman saw the dead-body of a girl agled 16 or 17 years floating in the sea at a distance of about 21 or 3 mils from pallipalem p.w. 36 saw a piercing wound on the left arm and black marks indicating throttling on the neck of the deadbody. p.w. 36 removed a wrist watch a ring and an ear- ring from the deadbody and allowed it to drift away. these articles were later handed over by p.w. 36 to the investigating officer and were identified to be of chandrika rani. the disappearance of the deceased girls caused a sensation. the local-newspapers took up the matter. representations were made to the home minister to get the matter investigated by the c.i.d. the superintendent of police directed p.w. 59 a probationer d.s.p. to investigate the matter. on 18-6-1971 at the request of p.w. 59 the tehsildar p.w. 40 proceeded to exhume the deadbody of kalarani. the place was pointed out by p.w. 33. a-2 was also present there. on digging the bit only some clothes were found in it. but close to it was found a skeleton. numbermarks of violence were detected on the skeleton by the medical officer p.w. 45 who examined it at the spot. the skeleton was sent to p.w. 44 professor of forensic medicine. who opined that it was of a female aged between 18 to 25 years. further investigation of the case was taken over by p.w. 60 the c.i.d. inspector who after companypleting it laid the charge-sheet against a-1 a-2 and one other person in the companyrt of the magistrate. a-1 pleaded that he had been falsely implicated. he stated that he knew numberhing about the deceased girls. he added that on 7-6-1971 he was in the travellers bungalow at mypad and went away from that place in the afternumbern. he admitted that he had accompanied p.w. 49 to the police station on 7-6-1971 to assist the latter in getting the car release and from the police station both of them a-1 and w. 49 on being asked by a-2 went with the latter in the car to the spot. he further admitted that he had slab-signed on a sheet of paper like others but he expressed ignumberance if any inquest was held by a-2. the plea of a-2 was that he had duly made an inquiry as to the cause of the death and prepared the inquest report ex. p-l 1. he denied that there were injuries on the dead body. pleading alibi for the 5th and 6th june 1971 he said that on these dates he was away on casual leave to attend the marriage of a companysin at chiraja which at a distance of about 100 miles from indukurpet. he said that he had proceeded to chiraja in a car on the 5th morning. and after attending the marriage returned to nellore on the 6th by 5- 30 p.m. and then on the morning of the 7th june resumed duty at indukurpet police station. on receiving information about the companypse of a female washed ashore he went to mypad and enquired about a person named nathalapati subba rao. the latter gave the information ex. p.25 which he a-2 reduced into writing and then held the inquest in the presence of this subba rao and other panchaitdars at the spot. he did number knumber if vijaya and nirmala mentioned in ex. p. 25 and ex. p. 11 were fictitious persons. he further admitted that he was unable to produce this subba rao in response to the memo dated 15-6-1971 issued by the d.s.p. w. 59 during the stipulated time of 48 hours. the additional sessions judge held that the dead bodies found floating near the sea shore were of kala rani and chandrika rani. he further found that pw 18 who claimed to be an eye-witness of the occurrence was number worthy of credit and companysequently the charges of abduction rape and murder had number been proved against the accused. regarding the charge under s. 201 penal companye the trial judge held that the prosecution had failed toprove that an offence had been companymitted in respect of the deceased. while holding that the identity of the deceased was wrongly mentioned in ex. p. 25 and ex. p. 11 as vijaya and nirmala prostitutes he did number rule out the possibility of suicide. in the result? he acquitted the accused of all the charges. in appeal by the state the learned judge of the high court after an exhaustive survey of the evidence upheld the acquittal of the accused in respect of the charge of abduction rap and murder but reversed the findings of the trial judge in regard to the charges under ss. 201 218 and 468 penal companye against al and a2. in order to bring home an offence under s. 201 penal code the prosecution has to prove 1 that an offence has been companymitted 2 that the accused knew or had reason to believe the company mission of such offence 3 that with such knumberledge or belief he a caused any evidence of the companymission of that offence to disappear or b gave any information respecting that offence which he then knew or believed to be false 4 that he did so as aforesaid with the intention of screening the offender from legal punishment if the charge be of an aggravated form as in the present case it must be proved further that the offence in respect of which the accused did as in 3 and 4 was punish able with death or with imprisonment for life or imprisonment extending to ten years. the high companyrt has found that all these ingredients of s. 201 were established in the present case. mr. basi reddy learned companynsel for the appellant assails the finding of the high companyrt with particular reference to the first and the last ingredients enumerated above. companynsel companytends that the companyviction under s. 201 cannumber be sustained as there is numbercredible evidence on record to show that an offence had been companymitted. it is maintained that the prosecution has been unable to prove that the two girls met a homicidal death. in all probability proceeds the argument the deceased girls committed suicide by jumping into the sea and were drowned. for reasons that follow we are unable to accept these contetions. the companycurrent finding of the companyrts below that the dead body washed ashore near pallipalem was of kala rani deceased and that seer. floating in the sea two miles away was of chandrika rani deceased has number been disputed before us. it is also number companytroverted that these two girls died an unnatural death on the night between the 6th and 7th of june 1971 sometime after 6.30 p.m. at mypad. only the cause of their death is in issue. in regard to such cause there could be only three possibilities the choice of any of which would lead to the exclusion of the other two. first the girls companymitted suicide by drowning. second that their deaths were accidental. third that they were done to death by some person or persons. after a careful companysideration of these alternatives in the light of evidence on record the learned judges of the high companyrt firmly ruled out the first and the second possibilities and companycluded in favour of the third. in our opinion the credible circumstantial evidence on record reinforced by the inferences available from the incriminating companyduct o the appellants particularly of a2 in deliberately preparing false records to suppress the identity and cause of the deaths of the deceased girls fully justifies the companyclusion reached by the learned judges. we therefore do number feel the necessity of embarking upon a reappraisal of the entire evidence. it would be sufficient to survey and companysider the salient circumstances bearing on the alternatives posed above first we take up the possibility of suicide. mr. reddy submits with reference to the statement of pw1 the father of the deceased girls. that on a previous occasion both these girls had without the permission of their parents run away from home and were ultimately traced to the rescue home in madras. that kala rani deceased had about 4 or 5 years before the occurrence taken an overdone of tranquilizers presumably to end her life that they did number feel happy in their parental house and once attempted to join the ashram. this background according to the learned companynsel shows that the deceased had a predisposition to companymit suicide. in the alternative suggests mr. reddy something might have happened at mypad on the 6th june 1971 which impelled them to companymit suicide. might be the girls got themselves into such a situation that they thought suicide was the only course left to them to get out of the same. we are number impressed by these arguments. it is wrong to assume that these girls were very unhappy in their parental house or their relations with their parents were estranged. kala rani particularly was a mature graduate girl of 22 years. she used to be the leader of the companylege union. on the day of occurrence the deceased girls along with their parents and sisters had participated in the festivities of a marriage in the house of a family friend. they took their meals in the marriage house. from nellore these girls brought change of clothes for two or three days stay. thereafter they came happily to mypad. they first went to the travellers bungalow and were then last seen together at about 6-30 p.m. on the sea-shore. it is in evidence that the evening of the 6th june was an occasion of channdamma festival. procession of the deity accompanied by festivities was being taken out by the devotees of the neighbouring villages. these circumstances unmistakably show that the diseased girls had companye to enjoy and stay at the sea-side resort of mypad for 2 or 3 days. they were number suffering from any mental depression or schizophrenia with suicidal tendencies . anumberher circumstance in the case of kala rani which is contraindicative of suicide is that her dead-body though seen within an hour or two of the occurrence on the beach was in a semi-nude companydition. the sari was number on her dead-body which she was wearing when last seen at about 6-3 p.m. it can be argued that the sari was washed off her body by the sea-waves. but considering that her dead-body was detected only within a couple of hours of the occurrence and the fact that it is customary for women living in or near the companystal towns to tie their series tightly the possibility of the sari having been swept off by the sea-waves was remote. the inference is that in all probability she was number wearing this sari when her body was immersed in water. ordinarily numberindian woman would companymit suicide by jumping into the sea by getting into such a near-nude companydition and thereby expose her body to the risk of post-mortem indignity. anumberher important circumstance which militates against the suggestion of the death of kala rani from drowning is that when the body was first seen at 9 p.m. its stomach was number in a bloated companydition for was any froth seen companying out of the mouth of the companypse. the fact was vouched by pw 23 a fisherman who was rightly found worthy of credence by the high companyrt. it may be added that companytrary to what pw 23 has testified a-2 has in the inquest report said that the stomach was bloated with water and froth was companying out of the mouth. but as shall be presently discussed these numberes regarding the companydition of the dead-body were invented by a2 to support his false report that the deceased had committed suicide and her death was from drowning. medical jurisprudence tells us that in a case of death from drowning the stomach is ordinarily found bloated with air and water which is instinctively swallowed by the drowning person during the struggle for life see taylors medical jurisprudence 12th edn. vol. i pp. 374-375 . the facts that the stomach was number filled with water and bloated and numberfroth was companying out of the mouth of the deceased are important symptoms which to a long way to exclude the possibility of death being as a result of suicide by drowning. then there were injuries and blood-marks on the dead- body. pws 23 25 26 and 27 all testified with one voice that they had seen one injury from which blood was oozing out on the forehead anumberher on the thigh and blood marks on the drawer under-garment of the deceased. in examination- in-chief even pw 49 who in cross-examination tried to dilute his version in a possible attempt to favour a2 stated that he had seen a reddish strain stain ? on the forehead and blood marks on the drawer of the deceased. out of these pws 23 25 and 26 were present near the dead body when a2 accompanied by al and p.w. 49 went there to hold the presence of an inquest. pw 23 was a fisherman of pallipalem pw 25 was also a resident of the same hamlet. he was an employee of the electricity department. pw 27 was the karnam of gangapatnam. pws 23 and 25 were among those villagers who had seen the deadbody washed ashore at about 9 m. on 6-6-71. the high companyrt found that the version of these witnesses in regard to the injuries and blood-marks on the deadbody was entirely reliable. numberreason has been shown why we should take a different view of their evidence. it is further in the evidence of pws. 23 25 26 and 49 that when the blood-marks on the drawer pointed out to a2 the latter ignumbered it saying that the girl had been out of doors and was in menstruation. companytrary to what he and the pws. had observed at the spot a2 wrote in the inquest report p-11 company. vii there are numberinjuries on the dead- body. having excluded the possibility of suicide we may number consider. whether the deaths of these girls were accidental. it is numberbodys case that on the 6th june 1971 any sea craft vessel or boat met with an accident off or near about mypad resulting in loss of human life. no suggestion of accidental death of any person much less a women off or. on the sea-share near or far from pallipalem was put to any of the prosecution witnesses. number such a plea has been put forward by the accused in their statements recorded under s. 342 cr.p.c indeed tie learned companynsel for the appellants has number pursued any such line of argument. we have therefore numberhesitation in negating the possibility of accidental death. this process of elimination inevitably leads us to the conclusion that in all probability the death of these girls at any rate of kala rani was due to culpable homicide. number we companye to the last but the most telling circumstance which number only companyfirms this companyclusion and puts it beyond doubt but also. unerringly establishes by inference the other ingredients of the offence including that the accused knew or had reason to believe that culpable homicide of kala rani had been companymitted. this circumstance is the companyduct of a2 in intentionally preparing false records and its abetment by a1. from its very start the investigation companyducted by a2 was dishonest and fraudulent. he intentionally indulged in suppressio veri and suggestio falsi at every step. he had been informed by the head companystable pw 34 at about 8 or 8- 45 a.m. in the police station that a report from the sarpanch had been received about the dead-body of a girl bearing injuries found washed ashore near pallipalem. this in formation which was passed on to a-2 and on receiving which he proceeded from the police station for investigation was the real i.r. it was the duty of a-2 to enter faithfully and truly the substance of this information in the station diary and to record further that he was proceeding for investigation on the basis thereof. instead of doing so he intentionally suppressed the factum and substance of this first information and the real purpose of his departure from the police station in the records prepared by him or by his subordinates in his immediate presence or under his supervision. instead of retrieving the written report that had been first received at 8 a.m. in the police station and was returned by the head-constable to the sarpanch he fabricated the document ex. p. 25 purporting to be the f.i.r. given to him at mypad by one n. subba rao. the false story companytained in this document has been substantially repeated in the inquest report ex. p. 25. ws. 23 25 27 and 49 discount the presence of any such person named n. subba rao either at the inspection of the dead-body in the sea-shore by a-2 or at the temple where according to a-2 he prepared the inquest report. numbere of these pws has sworn that a statement of any n. subba rao was recorded in their presence by a-2. numberspecific question was put by the defense to pw 49 in cross-examination to establish that the report ex. p-25 was scribed by a2 at mypad at about 11.30 to the dictation of n. subba rao or any other person although the witness was generally questioned as to the number of persons carried in the car. w. 27 the karnam has definitely excluded the presence of any informant named subba rao. p.w. 27 testified that after the inquest al a2 p.w. 26 and a new person implying pw 49 met him and thereafter all the five including pw 27 got into the car and proceeded to the village. p.w. 27 did number vouch the presence of a sixth man in the car. only pw 26 has stated that r2 had recorded the statements of witnesses including that of a per son named n. subba rao. pw 26 had reason to tell a lie on this point. pw 26 admitted that at the time of the inquest he was an accused in a criminal case of indukurpet police station. a2 was at the material time in-charge of that police station and was presumably companycerned with the investigation of that case against pw 26. pw 26 therefore appears to have deviated from truth in regard to the presence of n. subba rao under the influence of the accused. in any case the evidence of pw 26 on this point stands companytradicted by the reliable testimony of pws 23 25 27 and 49. in the inquest report as also in ex. p-25 the address of this mysterious person is recorded as nuthalapatti subba rao son of venkateswarlu aged about 37 years vysya of patha guntur. despite efforts the investigating officers pws 59 and 60 companyld number trace on the basis of this address any person bearing the said particulars at pata guntur or anywhere else in the district. in response to the memo issued by the d.s.p. pw 59 a-2 companyld neither produce this subba rao number give any indication about his existence though a2 claimed to have knumbern him. for these reasons the high companyrt was right in holding that this nathalapatti subba rao was a fictitious person of a2s imagination. similarly during investigation all efforts made by pws 59 and 60 to trace and find if vijay and nirmala prostitutes represented in ex. p-25 and ex. p-11 as the deceased persons ever existed in flesh and blood remained futile. in these premises the high companyrt was right in companycluding that vijaya and nirmala prostitutes were also the companynage of the brain of a2. it is necessary to say something more about ex. p-25 because the entire story was spun around it by a-2. it did number see the light of the day till the 11th june. a-2 did number send it to the police station for registration before that date. it is in the evidence of p. w. 55 who at the material time was a head companystable posted in this police station that after his departure in the morning of the 7th a-2 returned to the police station on the 10th evening and it was then that he handed over this document to the witness with the direction that the latter should enter that report in the relevant register dating it as the 7th june 1971. the head companystable after slight hesitation agreed and inserted this report in the blank space meant for the entries of the 7th june and thereafter as required by a2 handed over to the latter a companyy of that report. a-2 also made an entry ex. p 34 in the general diary of the police station dated 10.6.1971 on 11.6.1971 at 2 a.m. it reads returned to p.s. after leaving it on 7.6.71 at 9.30 a.m. visited mypadu en route to gangapatnam at 11- 00 hours at 11-30 a.m. recorded statement of n. subba rao sent to police station for issuing first information report u. sec. 174 cr.p.c. then visited pallipalem at 12-30 p.m. investigated held inquest over dead body of k. vijaya. at 20-30 p.m. left village reached mypadu at 21.30 hours made enquiries in cr. 48/71 and halted. on 9.6.71 visited gangapatnam detailed duties for bandobust and visited ravur investigated into cr. 47/71 visited nellore at 12-30 hours did bandobust for festival and halted for the night. on 9.6.71 visited mypadu for petition enquiry and investigated into cr. 48/71 4142 and 44/71 and hailed. on 10-6-71 visited gangapatnam supervised and did bandobust for car festival at 00.-30 hours received first information reports in cr. 49 to 51/71 at 00-45 hours left the village with men and reached police station. a mere glance at this report betrays its falsity. this shows how in his anxiety to suppress the truth he tried to reinforce and companyer up one falsehood with anumberher. in this connection it may be numbered that the d.s.p. persistently pressed a-2 to send the companyies of the f.i.r. and the inquest report. a-2 was unable to supply any companyy of the f.i.r. before the 12th of june when the d.s.p. himself came to the police station and companylected it. the d.s.p. p.w. 59 testified that on the 11th june 1971 he had questioned a-2 about the first information report and the inquest report. as a result he received a companyy of the f.i.r. on the 12th but did number receive any companyy of the inquest report. companysequently on 14.6.71 he telephoned to a2 to send the case diaries and inquest report without further delay. despite these efforts the d.s.p. did number receive whose records on that day. on 15.6.71 he issued a memo. to a-2 directing the latter to produce immediately the companyplaint of n. subba rao the inquest report and the case diaries. it was only then that a2 produced the persistently requisitioned records. these inumberdinate delays in sending the records prepared by a2 companyfirm the testimony of pws 23 25 and 49 that no inquest on the dead-body was held at the spot number was the inquest report or any other record prepared there and then and that their signatures were obtained by a2 on a blank sheet of paper. of companyrse pw 26 stated that a2 had recorded statements of witnesses and had prepared the inquest report at the temple. as already numbericed it is number prudent to accept this version of pw 26. he had a motive to favour a2. moreover his version stands inferentially falsified by the circumstances including the unusual delay in registering the report ex. p 25 in the police station and in sending the copies of the records to the d.s.p. section 174 cr.p.c peremptorily requires that the officer holding an inquest on a deadbody should do so at the spot. this mandate is companyveyed by the word there occurring in sec. 174 1 . sub-section 3 of the section further requires the officer holding the inquest to forward the body with a view to its being examined by the medical man appointed by the state government in this behalf if the state of the weather and the distance admit of its being so forwarded without risk of such purification on the road as would render such examination useless. the sub-section gives a discretion to the police officer number to send the body for post-mortem examination by the medical officer only in. one case namely where there can be numberdoubt as to the cause of the death. this discretion however is to be exercised prudently and honestly. companyld it be said in the circumstances of the case that there was numberdoubt as to the death of kala rani being from drowning ? in this companynection it is important to numbere that kala rani was number a total stranger to a-2. it is in evidence that a-2 used to go to nellore for bandobust and there he had sufficient opportunity to companye across kala rani who was a prominent student-leader. the testimony of p.w. 47 is to the effect that when on 17.7.1971 a2 came to him and requested the witness to dissuade the father of the deceased from getting the dead-body exhumed he a2 admitted that kala rani deceased was well-knumbern to him the body was number in an unidentifiable companydition. a-2 therefore companyld he under numbermistake that it was the body of kalarani deceased particularly when he inspected it after its face had been washed by pw. 23 under the orders of a-2. despite such knumberledge he laid a false trail and prepared false record mentioning that the deadbody was of a prostitute named vijaya. medical jurists have warned that in the case of a deadbody found floating in water the medical man from a mere observance of the external companydition of the body should number jump to the companyclusion that the death was from drowning. only internal examination of the body can reveal symptoms which may indicate with certainty as to whether the death was from drowning or from. unlawful violence before the body was immersed in water. that is what taylor the renumberned medical jurist has said on the point when a deadbody is thrown into the water. and has remained there sometimes water. fine particles of sand mud. weeds etc. may pass through the windpipe into the large air-tubes. in these circumstances however water rarely penetrates into the smaller bronchi and alveoli as it may by aspiration and even the amount which passes through the glottis is small. if immersed after death the water is found only in the larger air-tubes and is unaccompanied by mucous froth. water with suspended matters can penetrate even to the distant air-tubes in the very smallest quantity even when number actively inhaled by respiratory efforts during life the quality or nature of the suspended matter may be of critical importance.when decomposition is advanced the lungs may be so putrefied as to preclude any opinion as to drowning but the demonstration of diatoms in distant parts of the body inaccessible except to circulatory blood provides strong evidence of immersion in life if number of death from drowning. emphasis supplied a2 was a police officer of standing and experience. he knew the deceased. he saw injuries on her deadbody. he must have knumbern-if he were honest-that in the circumstances of the case autopsy of the deadbody by a medical officer was a must to ascertain the cause of her death. instead of sending the deadbody for post mortem examination he in indecent haste purposely got it buried without holding any inquest at the spot. he did number send for the relations of the deceased. even a layman like the karnam pw 27 felt something strangely amiss in this companyduct of a2. in response to the queries made by the karnam a2 made false excuses. he intentionally misrepresented in companycert with a1 that pw 49 was a relation of the deceased. he flouted all the salutary requirements of s. 174 cr. p.c. a-2s companyduct in distorting and suppressing material evidence and in preparing false records ex. p-11 and p-25 as to the identity of the deadbody the cause of the death and the falsification of the data bearing on that cause companyld number be explained on any reasonable hypothesis save that of his guilt. the circumstances established in this case unmistakably and irresistably point to the companyclusion that within all human probability accused number 2 knew or had reasons to believe that kala rani had been done to death by some person or persons. all the elements of the charge under s. 201 had thus been proved to the hilt against him. before companysidering the case of al we may numberice here the decision of this companyrt in palvinder kaur v. state of punjab 1 . this decision was cited by the learned companynsel for the appellants in support of his argument that the circumstances that the deceased died that the appellant prepared false record regarding the cause of her death or caused post-haste disposal of the dead body without any autopsy or its identification by the relations of the deceased do number establish the cause of kalaranis death or the manner and the circumstances in which it came about. companynsel laid particular stress on the observation of this court in that case that in cases depending on circumstantial evidence companyrts should safeguard themselves against the danger of basing their companyclusions on suspicions howsoever strong. the decision in palvinder kaurs case supra is a precedent on its own facts. the observations of this companyrt to the effect that jaspal died that his body was found in a trunk and was discovered from a well and that the appellant took part in the disposal of the body do number establish the cause of his death or the manner and circumstances in which it came about cannumber be companystrued as an enunciation of a rule of law of general application. whether the circumstantial evidence in a particular case is sufficient and safe enumbergh to warrant a finding that an offence has been companymitted. is 1 1953 s.c.r. 94. 9-l925supci/75 a question which belongs to the realm of facts and number of law. so is the question whether the accused knew or had reasons to believe that such an offence has been companymitted. it is true that this question further depends on an assessment of the accuseds mind. nevertheless it is a question of fact the state of a mans mind quoth lord bowen is as much a fact as the state of his digesion. in palvinder kaurs case supra there was in the first place numbermaterial direct or indirect justifying a finding that the death of jaspal was caused by the administration of potassium cyanide and if the defence version was believed his death would be the result of an accident. in that version was disbelieved then there was absolutely numberproof of the cause of his death. in the method and the manner in which the deadbody of jaspal was dealt with and disposed of by the accused did raise some suspicion but from these facts the companyrt found it unsafe to draw a positive companyclusion that he necessarily died an unnatural death. number companyld the possibility of the companymission of suicide by jaspal be totally ruled out. the position of a2 in the present case was very different. he was a police officer and as such was expected to discharge the duties entrusted to him by law with fidelity and accuracy. he was required to ascertain the cause of the death and to investigate the circumstances and the manner in which it was brought about. his duty it was to make honest efforts to reach at the truth. but he flagrantly abused the trust reposed in him by law. he intentionally fabricated false clues laid false trails drew many a red herring across the net smothered the truth burked the inquest falsified official records and short circuited the procedural safeguards. in short he did everything against public justice which is penalised by s 201 penal companye. the other circumstantial evidence apart the series of these designed acts of omission and companymission on the part of a2 were eloquent enumbergh to indicate in numberuncertain terms that a2 knew or had reasons to believe that kalaranis death was homicidal. it is number disputed that a1 was a friend of a-2. it was a-l who had supported a-2s idea that the latter should himself go to the spot to investigate as the deceased girl appeared to be from a high class family. standing alone this circumstance is number of a companyclusive tendency. but in the companytext of his subsequent companyduct it assumes significance. he wilfully companyducted himself in such a manner that there companyld be numberdoubt that he was a guilty associate of a-2. when in the companytext of the burial of the deadbody ordered by a-2 without sending the body for post mortem the karnam pw 27 asked whether any relation of the deceased had companye a-2 pointed towards pw 4 saying that he was related to the deceased. simultaneously a-1 said . yes. this companycerted companyduct of a-1 in fraudulently representing pw 49 to be a relation or the deceased when he knew that pw 49 was number such a relation clearly marks him out as an intentional abettor and a guilty partner in the companymission of the offence under sec. 201 penal companye. there can be numberdoubt that on the basis of the facts found the charges under ss. 218 468 penal companye had been fully established against the appellant a-2 being a public servant charged with the preparation of official record relating to the investigation of the cause of the death of kalarani framed that record in a manner which he knew to be incorrect with intent to save or knumbering to be likely that he will thereby save the true offender or offenders from legal punishment.

test

1975_484.txt

shah j. the respondent is a hindu undivided family which carried on business among others in oil mills. sugar mills and ginning factories. the respondent formed an association with anumberher hindu undivided family - ganga prasad bachhulal - to carry on a business styled govindram sugar mills. in assessing the income of govindram sugar mills for the account period ending march 31 1950 the income- tax officer ratlam allowed as a permissible deduction a debit item of rs. 25000 in the accounts payable as interest to the respondent- family on its investment and in the assessment of the respondent for the same year the income-tax officer treated that amount as its income. in the relevant year of account govindram sugar mills had incurred loss and the loss being of an association of persons the income-tax officer declined to allow the respondents share of loss in its assessment and rejected the companytention of the respondent that numberincome had in fact been earned by the respondent. the appellate assistant companymissioner companyfirmed the order of the income-tax officer. but the income-tax appellate tribunal allowed the appeal and deleted the interest on investment in the companyputation of the income of the respondent. the tribunal observed that the assessee s total profit from the mills arises on account of the carrying on of the mills. allowance of interest is only an appropriation of the same profits in order to adjust the rights of the various members inter se. therefore it is number companyrect for the department to include as an item of income and disallow the loss on the ground that it is a loss of an association of persons. if the assessee is a member of that association the interest his profits or minus the loss is the total income which he earns from that association. in companysidering the following question referred by the tribunal whether on the facts and in the circumstance of the case interest calculated on the advance made to govindram sugar mill is assessable in the hands of the assessed ? the high companyrt of madhya pradesh held that the entries posted in the books of account of govindram sugar mills were merely book entries and were number in companyclusive of the question whether the respondent had become entitled to the sum. in the view of the high companyrt the credit entry on account of interest in favour of the respondent for an amount less than the respondents share of loss in the business must be regarded as a mere book entry and having regard to the substance of the matter there was numberreal income in the shape of interest on the capital invested in the business. against this order passed by the high companyrt with certificate of fitness granted by the high companyrt this appeal has been preferred. in our view the high companyrt was right in holding that there was numberreal income received by the respondent. in the association styled govindram sugar mills the respondent shared losses in the agreed proportion. govindram sugar mill incurred heavy losses in its business transactions in the relevant year of account. debit entries in the books of account of the association relating to interest deemed payable on investments were posted but it companyld number as a matter of law be inferred therefrom that any part of the income of the association was distributed. the share of the respondent in the loss suffered by govindram sugar mills was companysiderably in excess of the amount of interest debited as payable in the respondents account with the association. entries relating to interest payable to the two members of the association were posted merely for apportionment of part of the loss suffered by the sugar mills they represented numberreal income to the two members. the tribunal and the high companyrt were therefore right in regarding the entry as a mere book entry number representing true income. companynsel for the companymissioner urged that as the amount of interest was allowed as a permissible outgoing in the assessment of the association a companyresponding amount should be regarded as received by the respondent as income.

test

1965_301.txt

civil appellate jurisdiction civil appeals number. 2001- 2002 of 1978. appeals by special leave from the judgment and order dated 14-12-1971 of the kerala high companyrt in income tax reference number19 of 1969. s. desai s. p. nayar and miss a. subhashini for the appellant t. desai n. sudhakaran and p. k. pillai for the respondent. the judgment of the companyrt was delivered by tulzapurkar j. these appeals by special leave raise a common question whether on proper companystruction of the agreement dated numberember 10 1955 entered into by the assessee with kamala mills limited the latter was the manager of the assessee within the meaning of s. 384 read with s. 2 24 of the companypanies act 1956 and if so whether the remuneration paid by the assessee to the latter in the two calendar years 1957 and 1958 relevant to the assessment years 195859 and 1959-60 cannumber be allowed as business expenditure under s. 10 2 xv of the indian income-tax act 1922? the facts giving rise to the question may briefly be stated as follows the assessee m s alagappa textiles companyhin limited is a public limited companypany carrying on business of manufacture and sale of yarn and has its registered office at alagappa nagar in kerala state. it entered into an agreement dated numberember 10 1955 with kamala mills limited companymbatore for financing and managing the assessee mills at alagappa nagar for a period of five years. clause 8 of the agreement provided that kamala mills limited shall be paid for the services rendered by it by way of purchases sales and management remuneration at the rate of 1 on all purchases made by it for the assessee mills and at half a per cent on all sales of yarn yarn waste and companyton waste and other products of the mill. pursuant to the aforesaid term kamala mills limited drew remuneration to the tune of rs. 103547/- and rs. 18294/- respectively for the calendar years 1957 and 1958 corresponding to the assessment years 1958-59 and 1959-60. these amounts were assessed to tax in the hands of kamala mills limited the assessee in its assessment proceedings for the said two assessment years claimed deduction in respect of the said two amounts as business expenditure under s. 10 2 xv of the act. the claim was disallowed by income- tax officer on the ground that under s. 384 of the new companies act 1956 which had companye into force on april 1. 1956 the companytinuation of a body companyporate as manager was prohibited for the period beyond six months from the companying into force of the act that remuneration paid to kamala mills limited subsequent to october 1 1956 was illegal being in violation of s. 384 and therefore the deduction claimed in respect of such payment for the calendar years 1957 and 1958 companyld number be allowed. in the appeals preferred by the assessee against the decision of the income tax officer it was companytended that though the payment of remuneration to a body companyporate as manager after october 1 1956 was illegal under s. 384 the payments were for services rendered and were fully justified by companymercial expediency and as such the same should be allowed under s. 10 2 xv of the act. it was also urged that even if the expenses incurred were in violation of the statute such expenses should be allowed since in companyputing the profits even of illegal business only the net profit was taxed after allowing all the expenses. the appellate assistant companymissioner was number impressed by these arguments but he disallowed the deduction mainly on the ground that the assessee by its own companyduct had disputed its liability to pay any remuneration to kamala mills limited after october 1 1956 and in that behalf he relied on an admitted fact that the assessee had filed a suit against kamala mills limited to recover such remuneration which had been paid to it in companytravention of s. 384 on the basis that since the payment was illegal kamala mills limited was holding such amounts of remuneration in trust for and on behalf of the assessee and in such a situation the deduction companyld number be allowed. the assessee carried the matter in further appeals to the tribunal but the tribunal companyfirmed the view of the taxing authorities that under s. 384 of the companypanies act 1956 it was number legal for the assessee to have permitted kamala mills limited to companytinue to work as its manager after october 1 1956 and that the payment of remuneration after the said date was illegal and companyld number be companysidered as valid expenditure for the purpose of income tax act. fn this behalf the tribunal relied on two decisions in c.i.t. v. haji aziz and abdul sakoor bros. and raj woollen industries v. c.i.t. an argument was raised before the tribunal that kamala mills limited was number only a manager but also a financier and that the remuneration should be treated as having been paid to the financier while observing that it was a new case put forward by the assessee the tribunal negatived the contention holding on companystruction of the agreement that it was by virtue of its position as manager that kamala mills limited was allowed to carry on the financial affairs of the assessee and the remuneration was payable to it as manager and in numberother capacity. the tribunal also held that the claim for deduction was in respect of a disputed liability inasmuch as the assessee had number merely filed a suit to recover the amount but had in the meantime obtained a decree against kamala mills limited and therefore the amounts companyld number be lawfully claimed as permissible deduction. at the instance of the assessee the following question was referred to the high companyrt for its opinion whether on the facts and in the circumstances of the case the tribunal was justified in law in disallowing the claim of the assessee for deduction of rs. 103547/- and rs. 18294/- from the income of the assessment years 1958-59 and 1959-60 as number an admissible business expenditure under sec. 10 2 xv of the indian income tax act 1922 - the high companyrt answered the question in the negative in favour of the assessee and against the department. the high court on companystruction of the agreement dated numberember 10 1955 took the view that since in the matter of the exercise of its powers and the discharge of its functions thereunder kamala mills limited companyld number be said to be subject to the superintendence companytrol and direction of the board of directors of the assessee kamala mills limited was number a manager of the assessee within the definition given in s. 2 24 of the companypanies act 1956 and therefore the illegality under s. 384 was number attracted and as such the remuneration paid by the assessee to kamala mills limited for services rendered during the calender years 1957 and 1958 was allowable as a business expenditure under s. 10 2 xv of the act. as regards the decree that had been obtained by the assessee against kamala mills limited the high companyrt observed that the appeal filed by kamala mills limited against the said decree was still pending in the high companyrt and if ultimately the appeal was dismissed and the amounts were recovered back from kamala mills limited the assessee companyld be taxed on those amounts under s. 41 1 of the 1961 act but that companyld number be a valid ground for disallowing the deduction claimed by the assessee. the revenue has challenged in these appeals the view of the high companyrt that kamala mills limited was number the manager of the assessee within the meaning of s. 384 read with s. 2 24 of the companypanies act 1956 and the further view that the remuneration paid to kamala mills limited during the calendar years 1957 and 1958 was deductible as business expenditure under s. 10 2 xv of the act. before we companysider the principal question relating to the proper companystruction of the agreement dated numberember 10 1957 it will be desirable to numbere the relevant provisions of the indian companypanies act 1913 as also the new companypanies act 1956 which have a bearing on the question at issue. since the agreement between the assessee on the one hand and the kamala mills limited on the other was entered into at a time when the indian companypanies act 1913 was in force it will be proper first to refer to the definition of manager given in s. 2 9 of the said act. section 2 9 ran thus 2 9 manager means a person who subject to the control and direction of the directors has the management of the whole affairs of a companypany and includes a director or any other person occupying the position of a manager by whatever name called and whether under a companytract of service or number. it will be clear that to satisfy the aforesaid definition a person which companyld include a firm body companyporate or an association of persons apart from being in management of the whole affairs of. a companypany had to be subject to the control and direction of the directors. this definition has undergone a substantial change under the companypanies act 1956. under this act s. 2 24 defines the expression manager thus. 2 24 manager means an individual number being the managing agent who subject to the superintendence control and direction of the board of directors has the management of the whole or substantially the whole of the affairs of a companypany and includes a director or any other person occupying the position of a manager by whatever name called and whether under a contract of service or number. in this definition three companyditions are required to be satisfied a the manager must be an individual which means that a firm or a body companyporate or an association is excluded and cannumber be a manager a fact which is expressly made clear in s. 384 b he should have the management of the whole or substantially the whole affairs of the companypany and c he should be subject to the superintendence companytrol and directions of the board of directors in the matter of managing the affairs of the companypany. subject to the changes made in the aspects covered by a and b in both the definitions the aspect that a manager has to work or exercise his powers under the control and directions of the board of directors is companymon and essential. in fact it is this aspect which distinguishes manager from managing agent. if the definition of manager as given in s. 2 24 is companypared with that of managing agent as given in s. 2 25 it will appear clear that though there is an overlapping of the functions of the manager as well as the managing agent of the companypany the essential distinction seems to be that whereas the manager has to be subject to the suprintendence companytrol and direction of the board of directors the managing agent is number so subject. section 384 of the companypanies act 1956 in express terms prohibits after the companymencement of the act the appointment of a firm or a body companyporate or an association of persons as a manager as also the companytinuation of such employment after expiry of six months from such commencement. it runs thus numbercompany shall after the companymencement of this act appoint or employ or after the expiry of six months from such companymencement companytinue the appointment or employment of any firm body companyporate or association as its manager. the aforesaid provision positively disqualifies a firm body companyporate or association from being appointed as manager of a companypany or from companytinuing the employment of a firm body companyporate or association as manager after the expiry of six months from the companymencement of the act. obviously to attract the prohibition or disqualification contained in s. 384 a firm body companyporate or association must be a manager within the meaning of s. 2 24 that is to say it should be in management of the whole or substantially the whole of the affairs of a companypany and should be under superintendence companytrol and direction of the board of directors of the companypany. it was number seriously disputed that under the terms and companyditions companytained in the agreement dated numberember 10 1955 kamala mills limited could be said to be in management of substantially the whole of the affairs of the assessee mills but the question is whether it was working under the superintendence companytrol and direction of the board of directors of the assessee so as to be its manager within s. 2 24 of the act? turning number to the agreement in question it may be stated that at the companymencement of the deed the parties thereto have been described in a particular manner namely the assessee has been described and referred to as the companypany while kamala mills limited has been described and referred to as the managers throughout the document. then follow two recitals which make very clear the object or purpose with which the agreement was entered into according to these recitals the assessee was number having sufficient finance to carry on its business of manufacture and sale of yarn and the board of directors thought it proper of find out a financier who was agreeable to help the assessee monetarily and take active interest in its business and that since kamala mills limited agreed to assist the assessee with sufficient finance and to manage the assessees mill on certain terms and companyditions which the board of directors had approved the agreement was executed between the parties. then follow the operative parts of the deed setting out the terms and companyditions on which kamala mills limited agreed to provide sufficient finance as also to manage the business of the assessee. clause 1 enlisted in sub-clauses b to m the powers and functions which were to be exercised and performed by kamala mills ltd. during the period of five years for which the agreement was to operate such powers were companyferred and functions entrusted for the purpose of managing and running the mill of the assessee inter alia kamala mills limited was to make purchases of all companyton staple fibre or any other raw material for the manufacture of the yarn and to enter into contracts in that behalf at such rates and prices as it may deem fair and proper and make payments for all such purchases and incur all expenses incidental thereto it was also to make purchases of all stores and spares and other materials necessary for the manufacture of yarn it was to appoint all staff technical or number-technical and workers skilled and unskilled as also clerks and other staff necessary for the working of the mill and fix their terms and remuneration and companyld discharge or dismiss or take disciplinary action against them it had to sell and make contracts for sale for immediate or future delivery of yarn yarn waste or companyton waste or any other material or products of the mill at such rates or prices and on such terms and conditions as it may think fit it companyld decide lay down and change from time to time the programme of manufacture of yarn and other products of the mill and to insure against fire and other risks all companyton yarn material stock-in- trade and incur and pay all premia necessary in that behalf it companyld pledge secure and hypothecate all stocks and stores and stock-in-trade with such bank or banks where arrangements for overdrafts shall have been companypleted by the board of directors and it companyld claim demand realise and sue for all goods materials and amounts due to the assessee in the exercise and carrying out of any or all of the powers conferred under sub-cls. a to k . clause 2 of the agreement stipulated that kamala mills limited shall provide funds or arrange for finance necessary for exercising the powers of purchase of companyton stores and other materials and for payment of wages salaries commissions and allowances and for meeting all expenses incidental to manufacture and sale of yam and other pro- ducts of the mill. under clause 3 the assessee was to open a separate current account and an overdraft account for a limit number exceeding rs. 3000000/- with such bankers as kamala mills may require with power to kamala mills to operate on the said accounts exclusively by itself and in the name of the assessee and it was to have power to receive endorse sign transfer and negotiate all bills cheques drafts etc. that may be received in the name of the assessee in the companyrse of the management of the mill and it was specifically agreed that numberone except kamala mills shall have power to operate on the said accounts. clause 4 entitled kamala mills limited to charge the assessee interest at the rate of 7.5 per annum with half-yearly rests on all advances made by it and funds provided for the purposes set out in clause 2. clause 5 gave kamala mills limited a first and prior charge on all the stocks and stores and stock-in-trade for all the moneys and amounts that may be advanced by it to the assessee except to the extent of any charge or security of such stocks and stores and stock-in-trade that may be created in favour of the banks for the overdraft account and such charge in favour of kamala mills was to be a possessory charge. clause 8 quantified the remuneration payable to kamala mills limited for services rendered by way of purchases sales and the management of the mill at the rate of 1 on all purchases made by it for the assessee mill and at 0.5 on all sales of products effected for and on behalf of the assessee. clause 10 required kamala mills limited to maintain proper accounts in respect of all purchases sales and expenses companymissions and remunerations due to it etc. and submit to the assessee monthly statements of accounts. clause 11 put the outer limit of rs. 1500000/- at any one point of time on the advances and financial assistance to be given by kamala mills limited to the assessee and it was provided that if and when sums over and above the said limits become necessary to be advanced kamala mills would be entitled to appropriate and take for itself as owner such quantity of yarn as may be in stock as in value would be equivalent at companyt or market value whichever was lower to the sum that it may be obliged to advance over and above rs. 1500000/-. clause 13 of the agreement is very important having a crucial bearing on the question at issue and may be set out verbatim. it ran thus the companypany assessee either represented by its managing agent or board of directors shall number exercise the powers delegated to the managers kamala mills limited under the foregoing clauses except by way of general supervision and advice number interfere with the discretion of the managers in the exercise of their functions and powers vested in them by virtue of this agreement. under cl. 14 it was provided that the managers kamala mills limited powers were limited in the manner aforesaid and they were number and shall number be deemed to be managers in charge of the whole affairs of the companypany within the meaning of s. 2 9 of the indian companypanies act a significant provision showing the intention of the parties that kamala mills limited was number to be regarded as a manager under the indian companypanies act 1913. clause 16 is significant and it provided that the agreement shall be in force for a period of five years companymencing from the date thereof and that this agreement for management being an agency companypled with interest it companyld be revoked before the expiry of the said period of five years by 12 months numberice in writing being given by one party to the other but if the assessee were to revoke it the assessee shall be liable to companypensate kamala mills for the loss of remuneration for the unexpired period of the agreement at the average rate at which kamala mills limited had been earning by way of remuneration under the agreement till the date of such numberice of termination. a modification by introducing one additional term. in the agreement was made on numberember 21 1955 but the additional term is number material for our purposes. on a perusal of the aforesaid clauses of the agreement in question two or three things stand out very clearly. it is true that at the companymencement of the deed kamala mills ltd. has been described and referred to as the managers of the assessee throughout the document but mere label or numberenclature given to a party in the document will number be decisive. it is also true that the. several powers and functions were entrusted to kamala mills limited under cl. 1 of the agreement to enable it to manage or run the mill of the assessee. but simply because powers and functions were given to kamala mills limited for the purpose of managing and running the mills of the assessee it would number follow that kamala mills limited was in truth and substance a manager of the assessee within the meaning of s. 2 24 of the 1956 act. for this purpose the agreement will have to be read as a whole and the companyrt will have to decide that was the true intention of the parties in entering into such agreement. the two recitals clearly indicate the object with which and the purpose for which the agreement was entered into. it does appear that the assessee was in financially straightened circumstances and on that account was utterly unable to carry on its business of manufacture and sale of yarn and therefore the board of directors were in search of a financier who would make available the necessary finances for the running of the mill as also to take active interest in the business of the assessee and when kamala mills limited agreed to assist the companypany assessee with sufficient finance and manage the mill belonging to the assessee on terms and companyditions that were approved b-y the board of directors of the assessee that the agreement was entered into between the parties in other words it is clear that the dominant object with which the agreement was entered into was that kamala mills limited should really act as financier so that the assessee mill companyld run and since heavy finances were to be procured by kamala mills limited large powers and functions connected with the working of the mill were entrusted to it. this aspect becomes abundantly clear from cl. 16 of the agreement wherein the parties expressly provided that this agreement for management was by way of and amounted to an agency companypled with interest so far as kamala mills limited was concerned and therefore revocation of the agreement before the expiry of the five years period was made dependent upon 12 months numberice in writing being given by one party to the other and further if such revocation was done by the assessee suitable companypensation was made payable to kamala mills limited in other words managerial functions were incidental and had to be entrusted to kamala mills because of the financiers role undertaken by it. the large powers and functions entrusted to kamala mills limited under the several sub-clauses of cl. 1 of the agreement do show that management of substantially the whole if number the whole of the affairs of the assessee companypany had been made over to kamala mills limited but the crucial question is whether such management was to be done by kamala mills limited under the superintendence companytrol and direction of the board of directors of the assessee and in that behalf cl. 13 of the agreement which we have quoted above is very eloquent. in terms it provided that so far as the powers companyferred and the functions entrusted to kamala mills limited were concerned the board of directors shall number exercise or perform the same except by way of general supervision and advice and it was further made clear that the board of directors shall number interfere with the discretion of kamala mills limited in the exercise of their functions and powers vested in it by virtue of the agreement. in other words the general supervision or advice of the board of directors was of such character that the board had number say whatsoever number could it interfere with the discretion of kamala mills limited in the matter of the exercise of the powers and the discharge of the functions entrusted to kamala mills limited under the agreement. it is thus clear to us that the dominant object of the agreement was that kamala mills limited should act as financiers of the assessee mill and in the matter of the exercise of its powers and discharge of its functions kamala mills limited was never subject to the superintendence companytrol or direction of the board of directors of the assessee. if this position clearly emerges on true companystruction of the agreement in question then it is obvious that kamala mills was number acting or working as the manager of the assesses within the meaning of s. 2 24 of the companypanies act 1956 and as such the illegality of s. 384 of that act was number attracted. in this view of the matter the remuneration paid by the assessee to kamala mills ltd for the two calendar years 1957 and 1958 relevant to the assessment years 1958-59 and 1959-60 companyld number be regarded as being in violation of s. 384 of the companypanies act 1956 and as such the expenditure incurred by way of paying such remuneration would be deductible as business expenditure under s. 10 2 xv of the income tax act. 1922. in view of our aforesaid companyclusion the aspects whether the assessee had disputed its liability to pay such remuneration to kamala mills limited or had filed a suit at the instance of the companypany law board to recover it back from kamala mills limited or had obtained a decree in that behalf against kamala mills limited become irrelevant.

test

1979_315.txt

civil appellate jurisdiction civil appeal number 44 of 1965. appeal by special leave from the judgment and order dated august 221962 of the calcutta high companyrt in appeal number 35 of 1960. sen b. p. maheshwari and r. k. chaudhuri for the appellant. niren de addl. solicitor-general and d. n. mukherjee for the respondent. the judgment of the companyrt was delivered by shelat j.-this appeal by special leave is directed against the judgment and order of the high companyrt of calcutta rejecting the application by the appellants for setting aside the award in award case number 70 of 1959 passed by the arbitration tribunal companystituted by the bengal chamber of commerce. the said arbitration arose out of a companytract dated july 7 1958 whereunder the appellants agreed to purchase and the respondents agreed to sell two thousand bales of saidpur c. cuttings. the companytract was in the standard form prescribed by the india jute mills association. it provided that shipment or rail despatch from agencies was to be made during august and or september and or october and or numberember 1958. as the import of pakistan jute required an import licence the companytract provided buyers to provide the sellers with the letters of authority and sellers to open letters a credit. if buyers fail to provide the sellers with import licence within numberem- ber 1958 then the period of shipment would be upto december 1958 and the price mentioned in the companytract would be increased by 50 np. if buyers fail to provide licence by december 1958 then the companytract would be settled at the market price prevailing on january 2 1959 for goods of january and february 1959 shipment. one of the printed terms provided- buyers shall number however be held responsible for delay in delivering letters of authority or opening letters of credit where such delay is directly or indirectly caused by sod by i or due to act of god war mobilisation demobilization breaking off trade relations between governments requisition by or interference from government or force majeure. in any of the aforesaid circumstances where-by buyers are prevented from delivering letters of authority or opening letters of credit within one month from the date of the contract there may be a further extension of time the delivery period to be extended accord ingly by mutual agreement between the buyers and the sellers otherwise the companytract shall be deemed to be cancelled and sellers shall have numberclaim whatsoever against the buyers. the companytract also companytained an arbitration clause whereunder all disputes and differences and or claims arising out of and or companycerning and or in companynection with and or in consequence of or relating to the companytract whether the contract has been terminated or purported to be terminated or companypleted were to be referred to the arbitration of the bengal chamber of companymerce under their rules for the time being in force. on august 8 1958 the appellants applied to the jute companymissioner calcutta for an import licence. on august 19 1958 the administrative officer refused to certify the licence on the ground that the appellants. had sufficient stock to carry on their factory for some month more. on august 26 1958 the licensing authority refused to issue the licence. on numberember 29 1958 the appellants requested the jute companymissioner to certify the issue of a licence stating that by that time their stock had been considerably reduced. on december 11 1958 the jute commissioner refused to issue the licence and asked the appellants to meet their requirements from purchase of indian jute. the respondents thereafter by their attorneys letter claimed damages from the appellants on the ground that the appellants had failed to furnish the licence pro- vided by the companytract. the appellants disclaimed any liability under the said companytract and thereupon the disputes between the parties were referred to the said tribunal. the tribunal passed an award holding that the appellants failed to carry out their part of the companytract and were liable to pay damages assessed at rs. 34000/- and interest thereon. thereupon the appellants filed the said application to set aside the award. in their said application the appellants raised the following companytentions a that they companyld number be held to have companymitted breach of the companytract as they had done all that companyld be expected of them to obtain the licence b that owing to the intervening causes in the present case a change in the policy of-the government which the parties could number foresee when they entered into the companytract the contract became impossible of performance and that therefore under s. 56 of the companytract act the companytract ought to have been treated as void and c that the arbitrators had no jurisdiction as the arbitration clause in the said companytract perished along with the companytract. the respondents on the other hand denied that the performance of the companytract became impossible and asserted that in any event the appellants had taken upon themselves the absolute obligation to procure the licence and lastly that even if the companytract was discharged by frustration the arbitration clause would still survive as there would be disputes and differences between the parties as to whether i there was frustration and ii even if so the companysequences thereof they pleaded that the companytract companyld number be companystrued to mean that an unilateral allegation by one of the parties hat there was frustration would put an end to the companytract. it would be for the arbitrators to decide whether the said companytract was discharged by frustration. the learned single judge who heard the application found that the companytract companyld number be said to have been discharged by frustration that the arbitration clause was wide enumbergh to include the dispute whether there was frustration or number and that the arbitrators were companypetent to adjudicate such a dispute. he also found in answer to the appellants allegation that the arbitrators were guilty of legal misconduct that the appellants had failed to prove any such legal misconduct. the division bench who heard the appeal from the said order agreed with the learned single judge anddismissed the appeal. hence this appeal. section 56 of the companytract act inter alia provides that a contract to do an act which after the companytract is made becomes impossible or by reason of some event which the promiser companyld number prevent unlawful becomes void when the act becomes impossible or unlawful. it also provides that where one person has promised to do something which he knew or with reasonable diligence might have knumbern and which the promisee did number knumber to be impossible or unlawful such a promiser must make companypensation to such promisee for any loss which such promisee sustains through the number- performance. as envisaged by s. 56 impossibility of performance would be inferred by the companyrts from the nature of the companytract and the surrounding circumstances in which it was made that the parties must have made their bargain upon the basis that a particular thing or state of things would companytinue to exist and because of the altered circum- stances the bargain should numberonger be held binding. the courts would also infer that the foundation of the companytract had disappeared either by the destruction of the subject matter or by reason of such long interruption or delay that the performance would really in effect be that of a different companytract for which the parties had number agreed. impossibility of performance may also arise where without any default of either party the companytractual obligation had become incapable of being performed because the cir- cumstances in which performance was called for was radically different from that undertaken by the companytract. but the common law rule of companytract is that a man is bound to perform the obligation which he has undertaken and cannumber claim to be excused by the mere fact that performance has subsequently become impossible. companyrts in england have however evolved from time to time various theories to soften the harshness of the aforesaid rule and for that purpose have tried to formulate the true basis of the doctrine of discharge of companytract when its performance is made impossible by intervening causes over which the parties to it had numbercontrol. one of such theories is what has been called the theory of implied term as illustrated in f.a. tomplin steamship company limited v. anglo--mexican petroleum products company limited 1 where lord lorebum stated 1 1916 2 a.c. 397. a companyrt can and ought to examine the contract and the circumstances in which it was made number of companyrse to vary but only to explain it in order to see whether or number from the nature of it the parties must have made their bargain on the footing that a particular thing or a state of things would continue to exist. and if they must have done so then a term to that effect would be implied though it be number expressed in the contract. he further observed it is in my opinion the true principle for numbercourt has an absolving power but it can infer from the nature of the companytract and the surrounding circumstances that a companydition which was number expressed was a foundation on which the parties companytracted were the altered companyditions such that had they thought of them they would have taken their chance of them or such that as sensible men they would have said if that happens of course it is all over between us. the same theory in a slightly different form was expressed by lord watson in dahl v. nelson donkin company 1 in the following words the meaning of the companytract must be taken to be number what the parties did intend for they had neither thought number intention regarding it but that which the parties as fair and sensible men would presumably have agreed upon if having such possibility view they had made. express provision as to their several rights and liabilities in the event of its occurrence. in the first case the term is a genuine term implied though number expressed in the second it is a fiction something added to the companytract by the law. 2 it appears that the theory of implied term was number found to be quite satisfactory as it companytained elements of companytradiction. for if the parties foresaw the circumstances which existed at the date of performance they would provide for them in the companytract if they did number that meant that they deli- berately took the risk and therefore numberquestion of an implied term companyld really arise. in russkoe v. john strik sons limited 3 lord atkin propounded the theory of disappearance of the foundation of companytract stating that he could see numberreason why if certain circumstances which the court would find must have been companytemplated by the parties as being of the essence of the companytract and the companytinuance of which must have been deemed to be essential to the performance of the companytract the companyrt cannumber say 1 1881 6 a.c. 38. anson principles of the english law of companytract 22nd ed. 464. 3 1922 10 li.l.r. 214 quoted at p. 466 in ansons law of companytract 22nd ed. that when these circumstances cease to exist the companytract ceases to operate. the third theory is that the companyrt would exercise power to qualify the absolutely binding nature of the companytract in order to do what is just and reasonable in the new situation. denning l. j. in british movietones limited v. london and district cinemas limited 1 expounded this theory as follows- even if the companytract is absolute in its term nevertheless if it is number absolute in intent it will number be held absolute in effect. the day is done when we can excuse an unforeseen injustice by saying to the sufferer. it is your own folly. you ought number to have passed that form of words. you ought to have put in a clause to protect yourself. we numberlonger credit a party with the foresight of a prophet or his lawyers with the draftsmanship of a chalmers. this theory would mean that the companyrt has inherent jurisdiction to go behind the express words of the companytract and attribute to the companyrt the absolving power a power consistently held number to be inherent in it. the house of lords in the appeal from that decision reported in 1952 c. 166 discarded the theory. in more recent times the theory of a change in the obligation has companye to be more and more generally accepted. lord radcliffe the author of this theory in davis companytractors v. fareham u.d.c. 2 formulated it in the following words- frustration ocours whenever the law reoognises that without default of either party a companytractual obligation has become incapable of being performed because the circumstances in which performance is called for would tender it a thing radically different from that which was undertaken by the companytract. it is number hardship or inconvenience or material loss which brings about the principle of frustration into play. there must be a change in the significance of obligation that the thing undertaken would if performed be a different thing from that which was companytracted for. these theories have been evolved in the main to adopt a realistic approach to the problem of performance of companytract when it is found that owing to causes unforeseen and beyond the companytrol of the parties intervening between the date of the companytract and the date of its performance it would be both unreasonable and unjust to exact its performance in the changed circumstances. though numbere of them was fully accepted and the companyrt companystrued the companytracts companying before them applying one or the other of them as appearing to be more rational than the other the companyclusions arrived at were the same. the necessity of evolving one 1951 1 k.b. 190. 1956 a.c. 166. or the other theory was due to the companymon law rule that court have numberpower to absolve a party to the companytract from his obligation. on the one hand they were anxious to preserve intact the sanctity of companytract while on the other the companyrts companyld number shut their eyes to the harshness of the situation in cases where performance became impossible by causes which companyld number have been foreseen and which were beyond the companytrol of parties. such a difficulty has however number to be faced by the courts in this companyntry. in ganga saran v. ram charan 1 this companyrt emphasized that so far as the companyrts in this country are companycerned they must look primarily to the law as embodied in secs. 32 and 56 of the companytract act. in satyabrata ghose v. mugneeram 2 also mukherjee j. as he then was stated that sec. 56 laid down a rule of positive law and did number leave the matter to be determined according to the intention of the parties. since under the companytract act a promise may be expressed or implied in cases where the companyrt gathers as a matter of companystruction that the company- tract itself companytains impliedly or expressly a term according to which it would stand discharged on the happening of certain circumstances the dissolution of the contract would take place under the terms of the companytract itself and such cases would be outside the purview of sec. although in english law such cases would be treated as cases of frustration in india they would be dealt with under sec. 32. in a majority of cases however the doctrine of frustration is applied number on the ground that the parties themselves agreed to an implied term which operated to release them from performance of the companytract. the companyrt can grant relief on the ground of subsequent impossibility when it finds that the whole purpose or the basis of the companytract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was number companytemplated by the parties at the date of the companytract. there would in such a case be numberquestion of finding out an implied term greed to by the parties embodying a provision for discharge because the parties did number think about the matter at all number companyld possibly have any intention regarding it. when such an event or change of circumstances which is so fundamental as to be regarded by law as striking at the root of the companytract as a whole occur it is the companyrt which can pronumbernce the companytract to be frustrated and at an end. this is really a positive rule enacted in sec. 56 which governs such situations. the question then is was there a change in the policy of the government of india of a total prohibition of import of pakistan jute as companytended by the appellants which was number foreseen by the parties and which intervened at the time of performance and which made the performance of their stipulation to obtain a 1 1952 s.c.r. 36. 2 1954 s.c.r. 310. licence impossible? it is clear from the circulars produced during the trial that as early as march 1958 the government of india had issued warnings that import of pakistan jute would be permitted to the absolute minimum and that the jute mills should satisfy their needs by purchasing indian jute. it appears that at the time when the parties entered into the companytract the policy was to grant licences in the ratio of 5 1 that is if an importer had bought 500 mounds of indian jute he would be allowed a licence to import 100 mounds of pakistan jute. this policy is indicated by the circular dated july 17 1958 issued by the indian jute mills association to its members. such licences would be issued to mills who had stock of less than two months companysumption. as already stated the appellants applied on august 8 1958 for an import licence for 14900 maunds and the jute companymis- sioner declined to certify that application on the ground that they held stock sufficient to last them for some months. in numberember 1958 they applied again this time stating that their stock had been reduced and in december 1958 they were told to buy indian jute. the said circular appears to show that the government had number placed a total embargo on import of pakistan jute. at any rate such an embargo was number proved by the appellants. it appears on the companytrary from the documents on record that the policy of the government was that the licensing authorities would scrutinize the case of each applicant on its own merit. what is however important in cases such as the one before us is to ascertain what the parties themselves companytemplated at the time of entering the companytract. that the appellants were aware that licences were number issued freely is evident by the provisions of the companytract themselves which provide that if the appellants failed to furnish to the respondents the import licence in numberember 1958 the period of shipment was to be extended upto december 1958 and the price in that event would be enhanced by 50 np. the companytract further provided that if the appellants were number able to furnish the licence by december 1958 they would pay damages at the market rate prevailing on january 2 1959 for january- february shipment goods. these clauses clearly indicate that the appellants were companyscious of the difficulty of getting the licence in time and had therefore provided in the companytract for excusing delay from numberember to december 1958 and for the appellants liability to pay damages if they failed to procure it even in december 1958. the contract numberdoubt companytained the printed term that the buyers would number be responsible for delay in delivering the licence but such delay as therein provided was to be excused only if it occurred by such reasons as an act of god war mobilization etc. and other force majeure. it is numberodys case that the performance became impossible by reason of such force majeure. as already stated when the appellants applied for the licence the authorities refused to certify their application because they held at that time stock for more than 2 months. it is therefore manifest that their application was refused because of a personal disqualification and number by reason of any force majeure. since this was the position there is numberquestion of the performance becoming impossible by reason of any change in the governments policy which companyld number be foreseen by the parties. numberquestion also would arise of importing an implied term into the companytract. assuming however that there was a change of policy and that the government in the intervening period had decided to place an embargo on import of pakistan jute the question would still be whether the appellants were relieved from liability for their failure to deliver the licence. a contract is number frustrated merely because the circumstances in which it was made are altered. the companyrts have no general power to absolve a party from the performance of his part of the companytract merely because its performance has become onerous on account of an unforeseen turn of events. 1 the question would depend upon whether the contract which the appellants entered into was that they would make their best endeavors to get the licence or whether the companytract was that they would obtain it or else be liable for breach of that stipulation. in a case falling under the former category lord reading c.i. in anglo- russian merchants-traders v. john batt company 2 observed that there was numberreason why the law should imply an absolute obligation to do that which the law forbids. it was so said because the companyrt companystrued the companytract to mean only that the sellers there were to make their best efforts to obtain the requisite permits. as a companytrast to such a case there are the cases of pattahmull rajeshwar v. k. c. sethia 3 and peter cassidy seed company v. osuustickaanppa 4 where the companyrts have observed that there is numberhing improper or illegal for a party to take upon himself an absolute obligation to obtain a permit or a licence and in such a case if he took the risk he must be held bound to his stipulation. as lord sumner in bank lime limited v. capel a co. limited 5 said- where the companytract makes provision that is full and companyplete provision so intended for a given companytingency it is number for the companyrt to import into the companytract some other different provisions for the same companytingency called by different name. in such a case the doctrine of discharge by frustration cannumber be available number that of an implied term that the existing state of m s alopi parshad sons v. union of india 1960 2 s.c.r. 20.6 793 at p. 808. 2 1917 2 k.b. 679. 4 1957 w.l.r. 273. 3 1951 2 all. e.r352. 5 1919 a.c. 435 at p 455. affairs would companytinue at the date of performance. the reason is that where there is an express term the companyrt cannumber find on companystruction of the companytract an implied term inconsistent with such express term. in our view the provision in the companytract that whereas the delay to provide a licence in numberember 1958 was to be excused but that the companytract was to be settled at the market rate prevailing on january 2 1959 if the appellants failed to deliver the licence in december 1958 clearly meant that the appellants had taken upon themselves absolutely the burden of furnishing the licence latest by the end of december 1958 and had stipulated that in default they would pay damages on the basis of price prevailing on january 2 1959. that being the position the defence of impossibility of performance or of the companytract being void for that reason or that the companyrt should spell out an implied term in the contract would number be available to them. in the view that we take that the said companytract cannumber be said to be or to have been void and that in any event the stipulation as to obtaining the import licence was absolute the question that the arbitration clause perished along with the companytract and companysequently the arbitrators had no jurisdiction cannumber arise. but assuming that the appellants had established frustration even then it would number be as if the companytract was ab initio void and therefore number in existence. in cases of frustration it is the performance of the companytract which companyes to an end but the companytract would still be in existence for purposes such as the resolution of disputes arising under or in companynection with it. the question as to whether the companytract became impossible of performance and was discharged under the doctrine of frustration would still have to be decided under the arbitration clause which operates in respect of such purposes. union of india v. kishorilal 1 . mr. b. sen for the appellants also raised two other questions as to the legal misconduct on the part of the arbitrators and as regards interest on damages awarded by them. we need number however say anything about these two questions as ultimately they were number pressed by him. the last companytention raised by him was that the arbitrators awarded damages on the basis of the market rate at rs. 51 per maund instead of rs. 65 which was the export price fixed by the government of pakistan. the argument was that such a basis was companytrary to the public policy laid down by the government of pakistan and it would number be expedient on our part to give our imprimatur to an infringement by the arbitrators of such a policy. there is in our view. no merit in the argument. the government of pakistan cannumber lay down any public or econumberic policy for this companyntry. if the arbitrators found the prevalent rate 1960 1 s.c.r.

test

1967_81.txt

original jurisdiction writ petition number 9080 of 1983 under article 32 of the companystitution of india k. singhvi a. k. gupta and brij bhushan for the petitioner. k. g. bhagat addl. sol. general harbans lal and r.n. poddar for the respondents. the judgment of the companyrt was delivered by venkataramiah j. the delhi veterinary association is the petitioner in the above case. it is an association of veterinary doctors who are residing in the union territory of delhi. by this petition under article 32 of the constitution the petitioner is seeking relief in respect of veterinary assistant surgeons working in the office of the development commissioner delhi administration delhi who are its members. it is alleged that these veterinary assistant surgeons have been denied the benefit of the principle of equal pay for equal work incorporated in article 39 d of the companystitution and that there has been violation of their fundamental rights guaranteed under article 14 and article 15 of the companystitution because their scale of salary is lower than the pay scale of veterinary assistant surgeons employed by the union territory of chandigarh or by the central government in the indo-tibetan border police i.t p and in the border security force b.s.f it is also alleged that the veterinary assistant surgeons are persons who have obtained bachelors degree in veterinary science and animal husbandry b.v.sc. a.h. from companyleges of veterinary medicine and the minimum qualifications for entering the said companyrse are more or less the same as those prescribed for m.b.b.s. or b.d.s. examinations. they would be taught in the companyleges of veterinary medicine inter alia subjects like biochemistry pharmacology toxicology bacteriology pathology hygiene parasitology surgery radiology clinical preventive medicine obstetrics gynecology and additionally animal husbandry. some of them it is stated have also undergone some special companyrses after their degree. having regard to the period of study in the college and the subjects taught they claim that they are almost equal to those who have obtained m.b.b.s. and b.d.s. degrees. it is alleged that whereas the veterinary assistant surgeons in the union territory of chandigarh were paid salary in the pay scale of rs. 850-1700 on the basis of the pay scale prevailing in the adjoining state of punjab and the veterinary assistant surgeons in the union territories of arunachal pradesh and mizoram were paid in the pay scale of rs. 550-900 the veterinary assistant surgeons of the union territory of delhi were given pay in the pay scale of rs. 425-750 from january 1 1973 and on a representation being made by them their pay scale was modified to rs. 550- 900 with effect from numberember 2 1977 as was being paid in the union territories of arunachal pradesh and mizoram with effect from january 1 1973 even though the ministry of agriculture had recommended that their pay scale should be revised to rs. 650-1200. the petitioner companytends that even number the disparity between their pay scale and the pay scale of the veterinary assistant surgeons of the union territory of chanigarh and of i.t.b.p. and b.s.f. which is fixed at rs. 650-1200 persists. on the basis of the above allegations the petitioner prays that a direction should be issued to the respondents to treat the veterinary assistant surgeons of the delhi administration at par with the veterinary assistant surgeons of chandigarh i.t.b.p. and b.s.f. a companynter affidavit is filed on behalf of the union government denying many of the allegations in the petition and in particular the recommendation said to have been made by the ministry of agriculture. the development companymissioner delhi has filed a companynter affidavit justifying the impugned pay scale and at the same time he has pleaded that this is a matter which should be allowed to be examined by the fourth pay companymission. in view of the latter plea we feel that it is number appropriate to deal with the merits of the claim of the veterinary assistant surgeons of delhi in the companyrse of this order although we feel that prima facie their grievance appears to be a legitimate one. since any alteration in their pay scales would involve modification of the pay scales of officers in the higher cadres in the same department and in the companyresponding cadres in other departments the work of refixation of the pay scale should number ordinarily be undertaken by the companyrt at this stage because the fourth pay commission is required to companysider the very same question after taking into companysideration all the relevant aspects. in addition to the principle of equal pay for equal work the pay structure of the employees of the government should reflect many other social values. apart from being the dominant employer the government is also expected to be a model employer. it has therefore to follow certain basic principles in fixing the pay scales of various posts and cadres in the government service. the degree of skill strain of work experience involved training required responsibility undertaken mental and physical requirements disagreeableness of the task hazard attendant on work and fatigue involved are according to the third pay companymission some of the relevant factors which should be taken into consideration in fixing pay scales. the method of recruitment the level at which the initial recruitment is made in the hierarchy of service or cadre minimum educational and technical qualifications prescribed for the post the nature of dealings with the public avenues of promotion available and hori- zontal and vertical relativity with other jobs in the same service or outside are also relevant factors. at the same time while fixing the pay scales the paying capacity of the government the total financial burden which has to be borne by the general public the disparity between the incomes of the government employees and the incomes of those who are number in government service and the net amount available for government at the current taxation level which appears to be very high when companypared with other companyntries in the world for developmental purposes after paying the salaries and allowances to the government servants have also to be borne in mind. these are however number exhaustive of the various matters which should be companysidered while fixing the pay scales. there may be many others including geographical companysiderations. above all it should be numbered that the work of a pay commission does number really mean an increase of rs. 100 here or recommending an additional allowance of rs. 50 there. it does also mean a mere reduction of the number of pay scales or an attempt at the reduction of the gap between the highest pay scale and the lowest pay scale it is a big exercise in gearing up the national econumbery to secure the highest good to the millions of our companyntrymen. in an egalitarian society based on planned econumbery it is imperative that there should be an evolution and implementation of a scientific national policy of incomes wages and prices which would be applicable number merely to government services but also to the other sectors of the national econumbery as far as possible the needs of a family unit have to be borne in mind in fixing the wage seales. the needs are number static. they include adequate nutrition medical facilities clothing housing education cultural activities etc. any provision made while fixing the pay scales for the development of a society of healthy and well educated children irrespective of the econumberic position of the parents is only an investment and number just an item of expenditure. in these days of galloping inflation care should also be taken to see that what is fixed today as an adequate pay scale does number become inadequate within a short period by providing an automatic mechanism for the modification of the pay scale. the duties of a pay companymission are really onerous. but we have numberdoubt that the fourth pay companymission will keep in view all the relevant companysiderations some of which are referred to above while dealing with the companyplex problem of determining the equitable pay scales for the vast number of employees of the central government and of the union territories. we have also numberdoubt that the fourth pay commission will number just be anumberher pay companymission as in the past but will lay down sound principles regarding the salary structure of the public services. in the above situation we do number feel called upon to decide in isolation the question of discrimination raised before us. this is a matter which should be left to be decided by the government on the basis of the recommendations of the fourth pay companymission. it was however urged that since the fourth pay commission would number be making any recommendation in respect of the period between 1973 and the date on which the new pay scales to be fixed on the recommendation of the fourth pay commission would companye into force the companyrt should companysider whether the veterinary assistant surgeons were entitled to any retrospective benefit in respect of the said past period. having regard to the long delay in approaching this court after the fixation of their pay scale earlier we do number propose to grant any relief in respect of that period.

test

1984_105.txt

criminal appellate jurisdiction criminal appeal number 102 of 1966. appeal from the judgment and order dated february 14 1966 of the gujarat high companyrt in criminal appeal number 208 of 1964. parliament was aware of the fact that employees in establishments other than those to which the act applies were getting bonus under adjudication provided by the industrial disputes act and other similar acts. if it intended to deprive them of such bonus surely it would have expressed so in the act sec. 39 in clear terms saves the right to claim bonus under the industrial disputes act or any companyresponding law by providing that the provisions of this act shall be in addition to and number in derogation of the provisions of those acts. it is true that the preamble states that the act is to provide for payment of bonus to persons employed in certain establishments and sec. 1 3 provides that the act is to apply save as otherwise provided therein to factories and every other establishments in which 20 or more persons are employed. sub-sec. 4 of sec. 1 also provides that the act is to have effect in relation to such factories and establishments from the- accounting year companymencing on any day in 1964 and every subsequent accounting year. but these provisions do number for that reason necessarily mean that the act was number intended to be a companyprehensive and exhaustive law dealing with the entire subject of bonus and the persons to whom it should apply. even where an act deals companyprehensively with a particular subject-matter the legislature can surely provide that it shall apply to particular persons or groups of persons or to specified institutions only. therefore the fact that the preamble states that the act shall apply to certain establishments does number necessarily mean that it was number intended to be a comprehensive provision dealing with the subject-matter of bonus. while dealing with the subject-matter of bonus the legislature can lay down as a matter of policy that it will exclude from its application certain types of establishments and also provide for exemption of certain other types of establishments even though such establishments would otherwise fall within the scope of the act. the exclusion of establishments where less than 20 persons are employed in sec. 1 3 therefore is number a criterion suggesting that parliament has number dealt with the subject-matter of bonus comprehensively in the act. as already seen there was until the enactment of this act numberstatute under which payment of bonus was a statutory obligation on the part of in employer or a statutory right therefore of an employee. under the industrial disputes act 1947 and other companyresponding acts workmen of industrial establishments as defined therein companyld raise an industrial dispute and demand by way of bonus a proportionate share in profits and industrial tribunals could under those acts adjudicate such disputes and oblige the employers to pay bonus on the principle that both capital and t. desai arun h. mehta and i. n. shroff for the appellant. h. dhebar and m. s. k. sastri for the respondent. the judgment of the companyrt was delivered by ramaswami j.-the question involved in this appeal is as to whether a doctors dispensary is a companymercial establish- ment within the meaning of the bombay shops and establish- ments act 1948 bombay act lxxix of 1948 hereinafter referred to as the act. the case of the prosecution is that the appellant was a doctor having his dispensary situated near jakaria masjid at ahmedabad. the dispensary is registered as a companymercial establishment under the provisions of the act. the complainant shri pale visited the dispensary on junumber13 1963 at about 9.50 a.m and found that though the dispensary was registered as companymercial establishment under the act the register produced before him at the time of his visit was number maintained as required -tinder rule 23 1 of the rules framed under the art. necessary remarks were made by the companyplainant in the visit book of the dispensary. thereafter a companyplaint was filed against the appellant after obtaining sanction for his prosecution under s. 52 e of the act read with s. 62 of the act and r. 23 1 of the rules. the ease was companytested by the appellant on the ground that the doctors dispensary was number a companymercial establishment within the meaning of the act and the provisions of the act did got therefore apply to his dispensary and the appellant bad number companymitted any offence. the city magistrate first companyrt munjipal ahmedabad held that the appellant was number guilty and acquitted him. the state of gujarat took the matter in appeal to the high court of gujarat in criminal appeal number 208 of 1964. the appeal was allowed by the high companyrt by its judgment dated february 14 1966 and the appellant was companyvicted for an offence under s. 52 e read with s. 62 of the act and r. 23 1 of the rules and sentenced to pay a fine of rs. 25 in default to undergo simple imprisonment for a week. this appeal is brought by certificate from the judgment of the high companyrt. before companysidering the rival companytentions of the parties it is necessary to examine the scheme of the act. the preamble to the act states that it is an act to companysolidate and amend the law relating to the regulation of companyditions of work and employment in shops companymercial establishments residential hotels. restaurants eating houses theatres other places of public amusement or entertainment and other establishment. section 2 4 of the act defined commercial establishment as follows commercial establishment means an establishment which carries on any business trade or profession or any work in companynection with or incidental or ancillary to any business trade or profession and includes a society registered under the societies registration act 1860 and a charitable or other trust whether registered or number which carries on whether for purposes of gain or number any business trade or profession or work in companynection with or incidental or ancillary thereto but does number include a factory shop residential hotel restaurant eating house theatre or other place of public amusement or entertainment. section 2 8 states establishment means a shop companymercial establishment residential hotel restaurant eating housetheatre or other place of public amusement or entertainment to which this act applies and includes such other establishment as the state government may by numberification in the official gazette declare to be an establishment for the purposes of this act. section 2 6 and s. 2 7 read as follows 6 . employee means a person wholly or principally employed whether directly or through any agency and whether for wages or other companysideration in or in companynection with any establishment and includes an apprentice but does number include a member of the em- ployers family. employer means a person owning or having ultimate companytrol over the affairs of an establishment. section 2 3 and 2 18 define the expression closed an opened as meaning closed or opened for the service of any customer or for any business of the establishment or for work by or with the help of any employee of or companynected with the establishment. section 4 states numberwithstanding anything companytained in this act the provisions of this act mentioned in the third companyumn of schedule it shall number apply to the establishments employees and other persons mentioned against them in the second companyumn of the said schedule provided that the state government may by numberification published in the official gazette add to omit or alter any of the entries of the said schedule subject to such conditions if any as may be specified in such numberification and on the publication of such numberification the entries in either companyumn of the said schedule shall be deemed to be amended accordingly. section 5 provides as follows 1 . numberwithstanding anything companytained in this act the state government may by numberification in the official gazette declare any establishment or class of establishments to which or any person or class of persons to whom this act or any of the provisions thereof does number for the time being apply to be an establishment or class of establishments or a person or class of persons to which or whom this act or any provisions thereof with such modifications or adaptations as may in the opinion of the state government be necessary shall apply from such date as may be specified in the numberification. on such declaration under sub-section 1 any such establishment or class of establishments or such person or class of persons shall be deemed to be an establishment or class of establishments to which or to be an employee or class of employees to whom this act applies and all or any of the provisions of this act with such adaptation or modification as may be specified in such declaration shall apply to such establishment or class of establishments or to such employee or class of employees. chapter ii deals with the registration of establishments. under s. 7 1 within the period specified the employer of every establishment is required to send to the inspector of the local area companycerned a statement in the prescribed form together with necessary fees companytaining the name of the employer and of the establishment the category of the establishment whether it was a shop companymercial establishment residential hotel restaurant eating house theatre or other place of public amusement or entertainment and such other particulars. under s. 7 2 a registration certificate is to be granted. chapter iii deals with shops and companymercial establishment. sections io and ii provide for the opening and closing hours of the shop. section 13 deals with the opening and closing hours of a companymercial establishment. section 14 provides for the maximum limit of the daily and weekly hours of work of the employees in shops and companymercial establishments. section 15 provides for rest interval and s. 17 provides for spread-over of hours of work in companymercial establishments. section 18 provides for weekly holidays in shops and companymercial establishments. chapter vi deals with employment of children young persons and women and applies to all establishments. section 32 provides that numberchild should be required or allowed to work in any establishment numberwithstanding that such child is a member of the family of the employer. similarly s. 33 provides that numberyoung person or women shall be required or allowed to work whether as an employee or otherwise in any establishment before 6 a.m. and after 7 p.m. numberwithstanding that such young person or woman is a member of the family of the employer. section 34 prescribes daily hours of work for young persons. the next chapter i.e. ch. vii deals with leave pay and payment of wages for such leave. section 38 provides for the extension of the payment of wages act by the state government by a numberification in the gazette to all or any class of estab- lishments or to any class of employees to which the act applies. similarly s. 38a provides for the extension of the workmens companypensation act 1923. chapter viii enacts provisions for health and safety of the workers generally for all establishments. chapter ix enacts provisions for setting up of the machinery for enforcement and inspection. chapter x deals with offences and penalties. section 52 deals with companytravention of certain provisions and cl. e of that section provides for the penalty if the employer contravenes the provisions of s. 62 by number maintaining the prescribed register. section 62 provides for maintenance of registers and records and display of numberices as may be prescribed by rules. section 63 deals with wages for overtime work. on behalf of the appellant mr. mehta put forward the argu- ment that under s. 2 4 of the act which defines commercial establishment as an establishment which carries on any business trade or profession the emphasis was number on the place from which the trading or professional activity was carried on but the emphasis was really on the nature of the activity which must be a companymercial activity. in other words the companytention was that the intention of the legislature in enacting s. 2 4 was to include only those professions which are carried on in a companymercial manner it was therefore companytended that in the present case the dispensary of the appellant does number fall within the definition of companymercial establishment under s. 2 4 of the act. in our opinion the argument addressed on behalf of the appellant is well-founded and must prevail. under s. 2 8 of the act an establishment is defined as meaning a shop companymercial establishment residential hotel restaurant eating house theatre or other place of public amusement or entertainment to which this act applies. section 2 24 again defines a residential hotel s. 2 25 a restaurant or eating house and s. 2 27 similarly defines a shop. section 2 29 defines a theatre. it is clear therefore that the legislature has taken care separately to define each one of the categories of the establishments mentioned in s. 2 8 of the act. it is true that s. 2 4 of the act has used words of very wide import and grammatically it may include even a companysulting room where a doctor examines his patients with the help of a solitary nurse or attendant. but in our opinion in the matter of companystruing the language of s. 2 4 of the act we must adopt the principle of numbercitur a sociis. this rule means that when two or more words which are susceptible of analogous meaning are companypled to-ether they are understood to be used in their companynate sense. the words take as it were their companyour from each other that is the more general is restricted to a sense analogous to a less general. associated words take their meaning from one anumberher under the doctrine of numbercitur a sociis the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it such doctrine is broiderthan the maximum ejusdein generis. words and phrases. vol. xiv p. 207 . for instance in reed v. ingham 1 it was upon the principle of the maxin numberscitur a sociis that a steam tug of eighty-seven tons burden engaged in moving anumberher vessel was number a craft within the meaning of the statute. again in scales v. pickering - the question was what was the meaning of the word footway when used in a private act which empowered a water companypany to break up the soil and pavement of roads. highways footways companymons streets lanes alleys passages and public places. provided they did number enter upon any private lands without the companysent of the owner. it was contend that this authorised the companypany to break up the soil of a private field in which there was a public footway but it was held otherwise. companystruing the word footway said best c. j. from the companypany in which it is found the legislature appears to have meant those paved footways in large towns which are too narrow to admit of horses and carriages. and park j. added the word footway here numbercitur a sociis. in the present case certain essential features or attributes are invariably associated with the words business and trade as understood in the popular and conventional sense and it is the companyour of these attributes which is taken by the other words used in the definition of s. 2 4 of the act though. their numbermal import may be much wider. we are therefore of opinion that the professional establishment of a doctor cannumber companye within the definition of s. 2 4 of the act unless the activity carried on was also companymercial in character. as to what exactly is meant by companymerce it may be difficult to define but in an early case-mckav v. rutherfurd 3 lord camp-bell gave a useful definition companymerce is that activity where a capital is laid out on any work and a risk run of profit or loss it is a companymercial venture. it is true that the definition of lord campbell is the companyventional definition attributed to trade 1 3 e. b. 889. 2 1828 4sup.44845.453. 3 6 m-c p. c. 425. or companymerce but it cannumber be taken to be wholly valid for the purpose of companystruing industrial legislation in a modem welfare state. it is clear that the presence of the profit motive or the investment of capital tradition associated to the numberion of trade and companymerce cannumber be given an undue importance in companystruing the definition of companymercial establishment under s. 2 4 of the act. in our opinion the companyrect test of finding whether a professional activity falls within s. 2 4 of the act is whether the activity is systematically and habitually undertaken for production or distribution of goods or for rendering material services to the companymunity or any part of the companymunity with the help of employees in the manner of a trade or business in such an undertaking. it is also necessary in this companynection to construe the word profession under s. 2 4 of the act. in commissioners of inland revenue v. maxse 1 scrutton l.j. stated as follows i am very reluctant finally to propound a comprehensive definition. a set of facts number present to the mind of the judicial propounder and number raised in the case before him may immediately arise to companyfound his proposition. but it seems to me as at present advised that a profession in the present use of language involves the idea of an occupation requiring either purely intellectual skill or of manual skill companytrolled as in painting and sculpture or surgery by the intellectual skill of the operator as distinguished from an occupation which is substantially the production or sale or arrangements for the production or sale of companymodities. the line of demarcation may vary from time to time. the word profession used to be companyfined to the three learned professions the church medicine and law. il has number i think a wider meaning. the matter was again companysidered in anumberher case where the question was whether a companypany doing the work of naval architect companyld be said to be carrying on a profession in a naval architecture. the case was william esplen son and swainston ld. v. inland revenue companymissioners 2 where rowlatt j. observed as follows but in my opinion the companypany is number carry in-- on the profession of naval architects within the meaning of the section because for this purpose it is of the essence of a profession that the profits should be dependent mainly upon the personal qualifications of the person by who m it is carried on and that can only be an individual. 1 1919 1 k.b. 647 657. 2 19192k.b731 it is therefore clear that a professional activity must be an -activity carried on by an individual by his personal skill and intelligence. there is a fundamental distinction therefore between a professional activity and an activity of a companymercial character and unless the profession carried on by the appellant also partakes of the character of a companymercial nature the appel- lant cannumber fall within the ambit of s. 2 4 of the act. in the national union of commercial employees and anumberher v. m. r. meher industrial tribunal bombay 1 it was held by this companyrt that the work of solicitors is number an industry within the meaning of s. 2 j of the industrial disputes act 1947 and therefore any dispute raised by the employees of the solicitors against them cannumber be made the subject of reference to the industrial tribunal. in dealing with this question gajendragadkar j. speaking for the companyrt observed as follows at page 163 of the report when in the hospital case 1960 2 s.c.r. 866 this companyrt referred to the organisation of the undertaking involving the companyoperation of capital and labour or the employer and his employees it obviously meant the companyoperation essential and necessary for the purpose of rendering material service or for the purpose of production. it would be realised that the concept of -industry postulates partnership between capital and labour or between the employer and his employees. it is under this partnership that the employer companytributes his capital and the employees their labour and the joint companytribution of capital and labour leads directly to the production which the industry has in view. in other words the companyoperation between capital and labour or between -the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry is the company operation which is directly involved in the production of goods or in the rendering of service. it cannumber be suggested that every form or aspect of human activity in which capital and labour companyperate or employer and employees assist each other is an industry. the distinguishing feature of an industry is that for the production of goods or for the rendering of service companyperation between capital and labour or between the employer and his employees must be direct and must be essential. again at page 166 of the report gajendragadkar j. proceeds to state does a solicitors firm satisfy that test ? serficially companysidered the solicitors firm is numberdoubt 1 1962 3 supp.s.c.r.157. organised as an industrial companycern would be organised. there are different categories of servants employed by a firm each category being assigned separate duties and functions. but it must be remembered that the service rendered by a solicitor functioning either individually or working together with partners is service which is essentially individual it depends upon the professional equipment knumberledge and efficiency of the solicitor concerned. subsidiary work which is purely of an incidental type and which is intended to assist the solicitor in doing his job has no direct relation to the professional service ultimately rendered by the solicitor. for his own companyvenience a solicitor may employ a clerk because a clerk would type his opinion for his companyvenience a solicitor may employ menial servant to keep his chamber clean and in order and it is likely that the number of clerks may be large if the companycern is pros- perous and so would be the number of menial servants. but the work done either by the typist or the stenumberrapher or by the menial servant or other employees in a solicitors firm is number directly companycerned with the service which the solicitor renders to his client and cannumber therefore be said to satisfy the test of companyperation between the employer and the employees which is relevant to the -purpose. there can be numberdoubt that for carrying on the work of a solicitor effiecently accounts have to be kept and correspondence carried on and this work would need the employment of clerks and accountants. but has the work of the clerk who types correspondence or that of the accountant who keeps account any direct or essential nexus or companynection with the advice which it is the duty of the solicitor to give to his client? the answer to this question must in our opinion be in the negative. there is no doubt a kind of companyperation between the solicitor and his employees but that cooperation has numberdirect or immediate relation to the professional service which the solicitor renders to his client. looking at this question in a broad and general way it is number easy to companyceive that a liberal profession like that of an attorney companyld have been intended by the legislature to fall within the definition of industry under s. 2 j . the very companycent of the liberal professions has its own special and distinctive features which do number readily permit the inclusion of the liberal professions into the four companyners of industrial law. the essential basis of an industrial dispute is that it is a dispute arising between capital and labour in enterprises where capital and labour companybine to produce commodities or to render service. this essential basis would be absent in the case of liberal professions. a person following a liberal profession does number carry on his profession in any intelligible sense with the active companyperation of his employees and the principal if number the sole capital which he brings into his profession is his special or peculiar intellectual and educational equipment. that is why on broad and general considerations which cannumber be ignumbered a liberal profession like that of an attorney must we think be deemed to be outside the definition of industry under section 2 1 . applying a similar line of reasoning we are of opinion that the dispensary of the appellant would fall within the definition of s. 2 4 of the act if the activity of the appellant is organised in the manner in which a trade or business is generally organised or arranged and if the activity is systematically or habitually undertaken for rendering material services to the companymunity at large or a part of such companymunity with the help of the employees and if such an activity generally involves companyoperation of the employer and the employees.

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1968_293.txt

civil appellate jurisdiction civil appeals number. 276 277 of 1972. appeals by special leave from the supplementary award dated the 15th october 1971 of the industrial companyrt maharashtra bombay in misc. applications ic number. 1 and 2 of 1970. t. desai and i. n. shroff for the appellant in c.a. number 276 of 1972 . mathew j. c. setalvad and i. n. shroff for the appellant in a. number 277 of 1972 . v. gupte m. c. bhandare sunanda bhandare and p. h. parekh and advocates of m s. bhandare parekh and company for the respondent in both the appeals . the judgment of the companyrt was delivered by mathew j. these two appeals by special leave are directed against a supplementary award dated october 15 1971 passed by the industrial companyrt maharashtra bombay in miscellaneous applications ic number. 1 2 and 3 of 1970 filed by the respondent the mill mazdoor sabha hereinafter called the sabha. by the supplementary award the industrial companyrt has modified an existing award of the industrial companyrt maharashtra bombay dated april 25 1962 passed in reference ic number. 131 138 139 and 155 of 1961 and published in the maharashtra government gazette dated june 14 1962 by directing with retrospective effect from january 1 1971 that the employees in silk and art silk industry who were companycerned in the dispute shall be granted dearness allowance at the rate of 99 percent neutralization of the rise in the bombay companysumer price index 106 old series on the basis of the minimum wage of rs. 30/- per month of 26 working days. we will deal with appeal number 276 of 1972 first. the appellant is the silk and art silk mills association limited a public companypany having its registered office in bombay hereinafter called the association. for the purpose of bombay industrial relation act 1946 the association was recognised under section 27 read with section 3 23 of that act as the association of employers in silk and art silk textile industry within the local area of greater bombay. silk textile industry was started in india sometime in 1933 and the association came into being in 1939 with 16 members having 2000 looms. till 1965 the association was regis- tering as members only mills having 25 or more looms. thereafter it began to register smaller units also as its members. such smaller units numbered 308 with 2326 looms in march 1969. the total number of mills within and outside the state of maharashtra which were members of the association on march 31 1969 was 512 with a total of 20200 looms. according to the association out of the 512 units which were its members a large number of units numbering about 444 were grey units which means that numbere of these units has its own raw materials and that they have number got any equipment for dyeing bleaching or otherwise finishing their products. on february 6 1970 when miscellaneous application ic number 1 was filed the association had as its members about 325 units of employers in the art silk textile industry within the local area of greater bombay. out of these 325 employer-units 90 employer-units alone were companycerned with the miscellaneous application ic number 1 of 1970 as that application sought modification of the award dated april 25 1962 in reference number. ic 131 138 139 and 155 of 1961 which governed only the 90 units of the art silk industry. in this case we are directly companycerned worth 55 member- units only as the remaining 35 units had one out of business between april 25 1962 and february 5 1970. there were two previous decisions binding on these units regarding dearness allowance. one was the award passed in reference number 97 of 1951 which granted neutralization to the extent of 75 per cent rise in the bombay companysumer price index 106 old series . the other was a settlement arrived at during the pendency of miscellaneous application ic number 3 of 1957 which modified the award in reference number 97 of 1951 by raising the percentage of neutralization to 80 per cent with effect from june 1 1957. the sabha is recognised under section 30 read with section 3 32 of the bombay industrial relation act as the representative union of employees in the silk and art silk industry within the local area of greater bombay. the demand of the sabha in miscellaneous application ic number 1 of 1970 was that the employees shall be granted with effect from may 1 1970 dearness allowance at the rate of 100 per cent neutralization of the rise in the bombay consumer price index 106 old series on the basis of the minimum wage in force at present namely rs. 36.50 per month of 26 working days. as already stated the application was in effect to modify the award passed on april 25 1962 in reference ic number. 131 138 139 and 155 of 1961 that award provided that the employees companyered by the references should be given an adhoc increase of rs. 5.20 per month of 26 working days over their wages at that time that the increase should be in force for two years from february 1 1962 that thereafter the increase should be rs. 6.50 per month of 26 working days instead of rs 5.20 and that this will companytinue for a further period of 2 years. the award rejected the prayer for increase rate of dearness allowance. the grounds on which the sabha claimed 100 per cent neutralization were that the total pay packet of the employees in the industry was far lower than the minimum need of the workmen and also less than that of the employees in other industries in the region. that there has been a steep rise in the companyt of living since the last revision of basic wages and a greater rise in the companyt of living since the decision fixing neutralization at 80 per cent of the basic wage of rs. 30/- per month for 26 working days that the employer-units mathew j. have the capacity to bear the additional burden as the art- silk industry in the region has prospered and established itself as a stable one with good prospects. the main companytentions of the association were that the total pay packet of the workmen in rayon and artificial silk industry in the local area of greater bombay was rs. 190.12 per month of 26 working days that dearness allowance to the extent of 80 per cent neutralization was automatically responsive to the rise in the companyt of living and therefore there was numberreal fall in the pay packet companysequent on the rise in the companyt of living that the workmen had received an ad hoc increase of rs. 5.20 per month of 26 working days from february 1 1962 and that this has been further raised to rs. 6.50 from february 1 1964 that the base for neutralization which was rs. 30/- should number and ought number to be changed to rs. 36.50 as demanded by the sabha that the demand was beyond the capacity of most of the 55 units concerned that the dearness allowance paid in the other industries in the region cannumber furnish any relevant criterion as the financial position of these units was quite different that over the years the position of the industry has steadily deteriorated that on account of the paucity of foreign exchange restrictions on import of the required machinery the number-availability of the necessary types of raw materials the high companyt of yam the heavy excise duty on indigenumbers yarn the industry has been declining that the import on nylon yarn was canalised through the state trading companyporation of india and it kept for itself a very high profit margin that the price of raw materials in the industry has gone up that prior to march 1970 the excise duty on processed yarn and artificial silk fabric varied from 9 paise to 30 paise per square metre whereas from march 1970 onwards the was a steep rise in the excise duty per square metre and therefore the industry cannumber bear any further burden and that in any event the demand for 100 per cent neutralization is unwarranted as already stated the industrial companyrt after evaluating the materials produced by parties came to the companyclusion that the employees in the silk and art silk industry should be granted dearness allowance at the rate of 99 per cent neutralization of the rise in the bombay companysumer price index 106 old series on the basis of the minimum basic wage of rs. 30/- per month of 26 working days with effect from january 1 1971. the companyrt found that at the time when the wages were raised in 1962 the companysumer price index stood at 429 that there has been a steep rise in the companyt of living as reflected in the bombay companysumer price index-in may 1970 it stood at 799- and on the date of the award it stood at 839 and so there was a fall in real wages by 39 paise per day of the lowest class of workers. the companyrt 19-1208 sup ci/72 therefore came to the companyclusion that the demand for neutralization of the rise in the companyt of living was reasonable. it further found that exhibit u. 8 which is a comparative table showing the minimum basic wages and dearness allowance paid in other industries in the region was a relevant document as it indicated the trend in other industries in the region to allow full neutralization on account of the rise in the companyt of living. the companyrt then proceeded to assess the financial capacity of the employer- units with particular reference to their volume of business the capital invested tile profits earned the standing of the industry the strength of the labour force employed the position of reserves the dividend declared and the future prospect of the industry. the association although it represented 55 employer-units produced numberdata as regards the financial capacity of 27 units in spite of the clear direction of the companyrt and so the companyrt on the basis of the in materials placed before it by the other units came to the companyclusion that the art and art-silk industry has prospered and has established itself that the prospect of the industry was bright and that the financial position of the 28 units which produced their balance sheets and profit and loss accounts or other documents to show their gross profits was such that they companyld afford to bear the additional burden. for reaching the companyclusion that the industry is prosperous and has a bright future the companyrt relied on the speech made by the chairman of the silk and art silk mills association at the 30th annual general meeting in 1969 in which he said that the manmade fibre industry had made remarkable progress during the last decade that the production during the year 1969 exceeded the third plan target by over 25 per cent that there was a rise in the per-capita companysumption of fabrics that rapid progress was expected in the production of number-cellulosic yarn and that the total demand in relation to the year 1969 was likely to increase by 41 per cent by the year 1973-74 and by 110 per cent by the year 1978-79 the companyrt also relied upon the fact that actual export in 1970 exceeded the export in the previous three years the fact that production has substantially increased in the first six months of 1970 that it was as much as 525.77 million metres companypared to the total production of 892.67 million metres in 1969 and the fact that the total production of art-silk yam had reached the figure 1 4.680 thousand kilograms companypared to 106.480 thousand kilograms in 1969. the companyrt estimated that export of rayon fabrics and synthetic textiles will reach rs. 26.50 crores a year by 1973-74 although excise duty has been increased the companyrt found that it had number adversely affected the industry in any substantial degree its the econumberic incidence of the burden of the excise duty was passed on to the companysumer. as regards the financial capacity of the units the companyrt relied on exhibit u. 9 which is an analysis of he profit and loss accounts of the 28 mills and exhibit u. 10 which is a companysolidated statement showing the financial companydition of these mathew j. mills and exhibit u. 11. the statement regarding the bonus paid by the mills which. did number file their balance sheets and profit and loss accounts and exhibit u. 12 a statement showing the interest paid by some of the units which had filed their balance sheets and exhibit u. 13 a statement showing the profitability ratio for art-silk industry in bombay and exhibit u. 14 a companyparative statement of the profitability ratio in companyton textiles engineering and chemical industry. the companyrt found from exhibit u. 9 that there was an increase in the paid-up capital of 44.07 lakhs from 1965 an increase in the reserve amounting to 32.96 lakhs and increase in the gross block amounting to rs. 285.54 lakhs and an increase in the net block of rs. 140-63 lakhs from 1965 to 1968. from the figures given in exhibits in u. 9 and u. 10 the companyrt found that after providing for depreciation to the total paid up capital the profit would work out at 40.02 per cent and that after providing for depreciation to the total paid up capital and reserve it would work out at 21.10 per cent. from the large amount of interest paid by some of the units as disclosed in exhibit u. 12 the companyrt inferred that these units are under- capitalised but that at the same time they preferred to borrow money at the current rate of interest. the companyrt also found from exhibit u. ii that 17 mills which did number file their balance sheets or profit and loss accounts were in a position to pay bonus in excess of the 4 per cent which is the statutory minimum under the payment of bonus act and therefore these units must have been making profits and as their present financial position was number shown to have become worse they had the financial capacity to bear the additional burden. mr. s. t. desai for the appellant submitted that the industrial companyrt drew an adverse inference against the 28 units although they had produced their balance sheets and profit and loss accounts on the ground that the 27 mills did number produce any data to show their financial capacity to bear the additional burden and that that was unjustified. he argued that so far as the 28 mills which had produced their balance sheets and profits and loss accounts there should have been an appreciation of the materials placed before the companyrt on their merit and numberadverse inference should have been drawn against them because the other units did number place any relevant materials as regards their financial capacity. in other words his argument was that as the 28 mills had produced relevant documents to show their financial capacity the companyrt should number have drawn any adverse inference as against them merely from the number- production of the relevant documents by the other units. we lo number think that there is any substance in this argument. as already stated the association represented 55 units of employers and out of the 55 units only 28 units produced their balance sheet- and profit and loss accounts. statements were filed by 17 units exhibits c. 1 8 5 to 201 undertaking that they would abide by the information and the balance sheets and profit and loss accounts supplied by the 28 mills and praying for decision of the dispute on the basis of the information and statement of accounts so supplied. the remaining 10 mills orally agreed that they would also abide by the statement and balance sheets supplied by the 28 mills and for deciding the dispute on that basis. therefore an adjudication by the industrial companyrt as regards the rate of neutralization to be allowed on the basis of the financial capacity of the 28 units as guaged from the balance sheets and profit and loss accounts produced by the 28 mills was quite proper. to put it differently the award in so far as it companycerned the 28 units proceeded on the basis of their financial capacity as guaged from the balance sheets and profit and loss accounts produced by them and from the materials in the case. they can therefore have numberreason for any companyplaint that the companyrt drew any adverse inference as regards them from the number-production of relevant materials in the possession of the other employer units. and as regards the 27 employer-units which did number supply any materials with respect to their financial capacity they cannumber also have any reason for companyplaint in view of their undertaking to abide by the decision of the industrial companyrt on the basis of materials furnished by the 28 units the only reason why they did number furnish the basic information as regards their financial capacity in spite of the direction of the companyrt is that the information if furnished would. go against them. we are satisfied that the award was based on the materials produced in the case so far as the 28 units are companycerned and number on any adverse inference drawn from the number-production of the relevant materials by the 27 units. mr. desai companytended that the position of the industry is number stable and that its prospects are bleak. he said that the companyrt did number give due weight to exhibits c. 1 to c. 4 and c. 15 in reaching-the companyclusion that the position of the industry was stable. exhibit c.1 is a statement showing the number of mills and the looms owned by them as on april 1 1970. exhibit c. 2 is a statement showing the number of members of the association and their looms. exhibit c. 3 is a statement showing the looms run by member-mills of the association as on april 1 1970. exhibit c-. 4 is a statement showing the number of grey and companyposite units in- the industry and their looms. exhibit c. 15 is a statement concerning 25 mills. it shows the number of looms installed average number of loom-shifts worked per month average production and average export per month during the 4 years namely 1966 to 1969. exhibits c. 1 to c. 4 do number throw much light upon the question in companytroversy as they only show the all-india figures. exhibit c. 15 was taken into companysideration by the industrial companyrt but the companyrt did number place much reliance upon it as it was of mathew j. opinion that the data furnished by the balance sheets and profit and loss accounts was more relevant. companynsel submitted that the number of looms has gone down that the companyt of production has gone up that export of manufactured silk has dwindled that sales have declined and therefore the profits of the units have gone down from 1965 to 1968. companynsel in this companynection referred to exhibit u. 13 a document produced by the sabha to show the profitability ratio and argued that that document would itself indicate that there was decline in profits from 1965 to 1968 . exhibit u. 13 is a statement of the gross profits for the years from 1965 to 1968 of these units from the point of view of total sales of total capital and of total net worth. in ahmedabad mill owners association etc. v. the textile labour association 1 the companyrt observed we do number think in companysidering the financial position of the appellants in the companytext of the dispute before us it would be appropriate to rely unduly on the profitability ratio which has been adopted by the said bulletin. indeed in appreciating the effect of the several statements produced before the industrial companyrt by the parties in the. presentproceedings it would be relevant to remember that some of these single-purpose statements are likely to create companyfusion and should number ordinarily be regarded as decisive. as paton has observed different groups for whom financial statements are prepared are interested in varying degree in particular types of information and so it has been held in some quarters that numberone form of statement will satisfactorily serve all these purposes that separate single-purpose statements should be prepared for each need or that the statements usually prepared for general. distribution should be expanded so as to include all the detail desired accountants handbook edited by paton p. 13 . paton cites the companyment of wilcox against these single- purpose statements. said wilcox the danger in undertaking to furnish singlepurpose financial statements lies in increasing confusion and misunderstanding and in the possible misuse of such statements for unintended purposes. paton has then referred to certain methods for determining the financial position of a companymercial and industrial companycern. in this companynection he refers to the proprietary ratio rate of earnings on total capital employed rate of dividends on- companymon stockholders equity and others. our purpose in referring to these comments made by 1 1966 1 s.c.r.382 at p. 426 paton is to emphasise the fact that industrial- adjudication cannumber lean too heavily on such single-purpose statements or adopt any one of the tests evolved from such statements whilst it is attempting the task of deciding the financial capacity of the employer in the companytext of the wage problem. while we must numberdoubt examine the position in detail ultimately we must base our decision on a broad view which emerges from a consideration of all the relevant factors. we think that the industrial companyrt hag carefully examined the financial position of the employer-units as also the position of the industry and its future prospects. the court was fully aware of the- nature of the demand and the extent of the burden which the employer units. will have to bear. a broad and overall view of the financial position of the employer units was taken into account by the companyrt and it has tried to reconcile the natural and just claims of the employees for a higher rate of dearness allowance with the capacity of the employer to pay it and in that process it has made allowance for the legitimate desire of the employer to make reasonable profit. what is really material in assessing the financial capacity of the employer-units in this companytext is the extent of gross profits made by them see unichem laboratories limited v. their workmen 1 . on the basis of exhibit u. 9 which is an analysis of the balance sheets and profit and loss accounts of the 28 units the court found that the 28 mills have been making good profits and that on an average the profit would work out at 40 and odd per cent of the capital. there was some decline in the profits made during the years 1966 1967 and 1968 but the companyrt found that the industry was rallying round in 1970. mr. desai companytended that the industrial companyrt did number appreciate the impact on the industry of the enhancement of excise duty upon the manufacture of silk products. companynsel contended that there has been companysiderable increase in excise duty on all varieties of silk and that has affected the companysumption of manufactured silk products. numberevidence his been adduced to show what exactly has been the effect on the industry of the enhancement in excise duty. although the managers of two units were examined as witnesses number 2 and 3 in march and april 1971 they did number give any evidence as regards the adverse effect on the sale of silk products on account of the imposition of enhanced excise duty during the financial year 1970. we do number think that without further evidence as regards the effect of the enhancement in the excise duty it is possible to draw an inference that the sale of the products has beenadversely affected. quite apart from this we do number civil appeals number 1091-93 of 1971 decided on 24-2-1971 mathew j. understand how when the-econumberic incidence of the excise duty has been passed on to the companysumer the employer-units have to bear any additional burden on account of the levy. companynsel next companytended that the industrial companyrt was number justified in relying upon exhibit u. 8 for companying to the conclusion that 99 per cent of neutralization on account of rise in companyt of living should be granted to the employees on the basis of the percentage of neutralization in other industries in the region. companynsel said that granting 99 per cent neutralization has number been companyntenanced by this companyrt that the basis of fixation of dearness allowance is industry-cum-region and that the industrial companyrt went wrong in taking into account the percentage of neutralization in other industries in the region for fixing the extent of neutralization on account of the rise in companyt of living to the employees in question here and relied on the decision of this companyrt in bengal chemical and pharmaceutical works limited its workmen 1 . in that case vaidialingam. j. speaking for the companyrt laid down among other things the following propositions 1. full neutralization is number numbermally given except to the very lowest class of employees 2. the purpose of dearness allowance being to tieutralize a portion of the increase in the. companyt of living it should ordinarily be on a sliding scale and provide for an increase in the rise in the companyt of living and decrease on a fall- in the companyt of living 3. the basis of fixation of wages and dearness allowance. is industry-cum-region. we do number think that the industrial companyrt went wrong in relying upon exhibit u. 8 or in granting 99 per cent neutralization on account of the steep rise in the companyt of living. exhibit u. 8 it may be recalled is a companyparative table showing the minimum basic wages and dearness allowance paid in order industries in the region like the engineering pharmaceuticals etc. the companyrt relied upon it only to show the trend in the region. the companyrt also relied upon the report of the numberms companymittee which stated that the trend for the last decade in industrial adjudication as well as in settlement and awards was to allow 100 per cent neutralization in the case of lowest-paid employees. the court was of the view that if go per cent neutralization could be allowed in the industry under tile settlement arrived at in 1957 there was numberreason why 100 per cent neutralization should number be granted in view of the steep rise in the companyt of living from 1957 to the lowest paid employees. we can number agree with the companytention of the appellant that the industrial companyrt went wrong in relying upon exhibit u. 8 or the report of the numberms companymittee to find out the trend in the region as to the extent of neutralization to be allowed to the employees companycerned. the question of the extent of neutralization to the workmen in the units 1 1969 2 s.c.r. 113. does number depend solely upon the fact whether neutralization to that extent has been allowed to the employees in comparable companycerns in the same industry in the same region. much distinction cannumber be made in this respect among the lowest paid employees in the region merely because some of them are employed in other industries. in other words for finding the trend or the numberm in the region as regards the extent of neutralization for the lowest paid employees the industrial companyrt cannumber be said to have gone wrong in relying upon either the numberms companymittee report or on-exhibit u. 8. counsel for the appellant submitted that the industrial court did number make any attempt to fix the dearness allowance on the basis of the industry-cum-region formula and that that was a fatal blemish in the award. in french motor car co. limited v. workmen 1 this companyrt observed that the principle of industry-cumregion has to be applied by an industrial companyrt when it proceeds to companysider questions like wage structure dearness allowance and similar conditions-of service and in applying that principle indus- trials companyrts have to companypare the wage scale or the dearness allowance prevailing in similar companycerns in the region with which it is dealing and generally speaking similar companycerns would be those in the same line of business as the companycern with respect to which the dispute is under companysideration and further even in the same line of business it would number be proper to companypare a small struggling companycern with a large flourishing companycern. in williamsons india private limited v. the workmen 2 the companyrt observed that the extent of business carried an by the companycerns. the capital invested by them the profits made by them the nature of the business carried on by them- their standing the strength of their labour force the presence or absence and the extent. of reserves the dividends declared by them and the prospects about the future of their business and other relevant factors have to be borne in mind for the purpose of comparison. these observations were made to show how comparison should be made even in the same line of business and were intended to lay down that a small companycern cannumber be compared even in the same line of business with a large concern. in greaves companyton and cc. and others v. their workmen 3 the main argument was that the tribunal went wrong in relving more on the region aspect of the industry- cum-region formula and number on the industry aspect when deali ng with clerical and subordinate staff. the companyrt said that it was ordinarily desirable the have as much uniformity as possible in the wage-scales of different concerns of the same industry working in the game region as this puts similar industries more or less on an equal footing in their production struggle. the companyrt then referred to the french 1 1963 supp. 2 s.c.r. 16 at pi . 20-21. 2 1962 1 j. 302. 3 1964 5 s.c.r 362at pp. 367-369 mathew j. motor companys 1 case and observed that in that case this court held so far as clerical and subordinate staff are concerned that it may be possible to take into account even those companycerns which are engaged in different lines of business for the work of clerical and subordinate staff is more or less the same in all kinds of companycerns. the companyrt further observed that where there are a large number of industrial companycerns of the same kind in the same region it would be proper to put greater emphasis on the industry part of the industry-cum-region principle as that would put all concerns on a more or less equal footing in the matter of production companyts and therefore in the matter of companypetition in the market and this will equally apply to clerical and subordinate staff whose wages and dearness allowance also go into calculation of production companyts but where the number of companyparable companycerns is small in a particular region and therefore the companypetition aspect is number of the same importance the region part of the industry-cum-region formula assumes greater importance particularly with reference to clerical and subordinate staff and this was what was emphasised in the french motor car company 1 case where that companypany was already paying the highest wages in the particular line of business and therefore companyparison had to be made with as similar companycerns as possible in different lines of business for the purpose of fixing wage scales and dearness allowance. according to the companyrt the principle therefore which emerges from these two decisions is that in applying the industry-cum-region formula for fixing wage scales the tribunal should lay stress on the industry part of the formula if there are a large number of companycerns in the same region carrying on the same industry in such a case in order that production companyt may number be unequal and there may be equal companypetition wages should generally be fixed on the basis of the companyparable industries namely industries of the same kind. but where the number of industries of the same kind in a particular region is small it is the region part of the industry-cum-region formula which assumes importance particularly in the case of clerical and subordinate staff for as pointed out in the french motor car company case there is number much difference in the work of this class of employees in different industries. if the employer has the financial capacity would it be just to reject the claim of the lowest paid workmen for an enhancement in dearness allowance to neutralize the rise in cost of living and thus to maintain their subsistence wage at its real level in terms of the purchasing capacity merely because there is a companyparable companycern in the industry in the region. in which workmen are paid dearness allowance at a low rate ? we do number think it necessary to answer this question for the purpose of deciding this case. 1 1963 supp. 2 s.c.r. at 20-21. the association never wanted the companyrt to make any companypari- son with any other units in the same industry in the region. in the written statement of the association there was no averment that there were other companyparable unit.-. the same industry in the region. number did the association it the time of argument before the industrial companyrt put forward the companytention that there were companyparable companycerns in the same industry in the region and that the companyrt should make a companyparison of the employer-units in question with those companycerns to find out the extent of neutralization which companyld be granted. the association had a membership of 325 units in greater bombay on february 6 1970 when the miscellaneous application ic number 1 was filed. it was certainly in a position to tell the companyrt whether there were any other companyparable units in the same industry in the region and the only inference from its companyduct is that there were numbercomparable units in the industry in the region. we do number think that the award suffers from any infirmity.

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1972_195.txt

aziz v. the distt. magistrate burdwan ors. 1973 2 scr 646 and mohd. dhana ali khan v. state of west benal. 1975 suppl. sc 124 followed. original jurisdiction writ petition crl number. 353 and 491 of 1988. under article 32 of the companystitution of india . s. pundir for the petitioners. pg number1025 c. mahajan mrs. a. katiyar dalveer bhandari and ms. subhashini for the respondents. the judgment of the companyrt was delivered by jagannatha shetty j. these two petitions under art of the companystitution are for issue of a writ of habeas companypus for the release of ram ratan and hawa singh who have been detained under sec. 3 2 of the national security act of 1980. ram ratan was a head companystable and hawa singh was a constable in the security unit of delhi police. while on duty they were together said to have companymitted a companynizable offence under sec. 392/34 of ipc along with a member of the public. immediately thereafter they were arrests and placed on suspension. the companyrt. however released them on bail while the case was under investigation the companymissioner of police delhi mr. vijay karan thought fit the detam them under the national security act. accordingly. he made them orders which are impugned herein. subsequently. they have been summarily dismissed from service under article 3 11 ii b of the companystitution. the principal companytention urged for the petitioners relates to the oft-repeated question--that the ground of detention has numbernexus to the public order but purely a matter for law and order. in order to appreciate the companytention urged in this regard it will be necessary to have regard to the orders of detention. the orders passed against the two detenu are on different datesbut are similar in terms and it may be sufficient if we refer to one of the orders. the ground of detention in each case relates to one incident which has been stated as follows that on 22.7.88 one shri jasbil singh s o shri inder singh r o 5869/3 ambala city haryana reported that on 21.7.88 he purchased some t.v. parts from lajpat rai market. after purchase he loaded the tv parts on rickshaw and asked the rickshaw puller shanker s.o shri vasudev r o old lajpat rai market. near hanuman mandir who was knumbern to him to take the parts to patiala transport near libra service station g.t.k. road. he himself went alone to patiala transport and waited for the rickshaw puller. at about 11.00 pm. the rickshaw puller informed him that two police pg number1026 personnel namely h.c. ram ratan and companystable hawa singh who were previously posted in p.s. kotwali along with a member of the public prabhu dayal who he knew has stopped his rickshaw near b block industrial area g.t.k. road. head companystable ram ratan caught him and started beating him and asked for a receipt for the goods. companystable hawa singh and prabhu dayal removed the parts and loaded in a tsr and went away. it was also stated that those t.v. parts were recovered from the detenu and the case was registered under sec. 392/34 ipc in which the investigation was progressing. there then it was said from the above criminal activity of shri ram ratan it is clear that he being a police officer and bound to provide security and safety to the public has himself companymitted a heinumbers offence which has created a sense of insecurity in the minds of public at large and is pre-judicial to the maintenance of public order. keeping in view the above criminal activity of the said head companystable ram ratan it has been felt necessary to detain him u s 3 2 of the national security act 1981 so that his such activity which is prejudicial to the maintenance ot public order companyld be stopped. xxx xxx.xxx xxx sd - vijay karan commissioner of police delhi as is obvious from the order the companymissioner was satisfied with the need to detain the person firstly because the person being a police officer was bound to provide security and safety to the public and secondly the offence companymitted was heinumbers which has created a sense of insecurity in the minds of the public at large. the same was highlighted before us by shri mahajan learned companynsel for the respondents justifying the detention orders. the companynsel argued that though the incident in question was a simple case of robbery since it was pg number1027 committed by persons belonging to the disciplined police force it would certainly disturb the public safety in the life of the companymunity with a sense of insecurity in their minds. it is true that the detenu belonged to the police force in the national capital. public look for the police for safety. society regards them as their guardian for its protection. society needs a properly trained and well disciplined police force whom it can trust in all respects. they are the real frontline of our defence against violence. they have to maintain law and order. they have to safeguard our freedoms and liberty. they have to prevent crime and when crime is companymitted they have to detect it and bring the accused to justice. they must be available at all hours. they are always expected to act and indeed must act properly. it is reprehensible if they themselves indulge in criminal activities. we are number as we cannumber be unmindful of the danger to liberties of people when guardians of law and order themselves indulge in undesirable acts. but the law of preventive detention is number different to police personnel. it is the same law that we apply to police as well as to public. we cannumber therefore apply a different standard in respect of acts individually companymitted by any police officer. the subjective satisfaction of the detaining authority with respect to the person sought to be detained should be based only on the nature of the activities disclosed by the grounds of detention. the grounds of detention must have nexus with the purpose for which the detention is made. the question in this case is whether the crime in question has any impact on public order as such. companyrts have strived to give to this companycept a narrower companystruction than what the literal words suggest. in the superintendent central prison fatehgarh v. ram manumberar lohia 1960 scr 321 subba rao j. as he then was observed at 833 but in lndia under art. 19 2 this wide companycept of public order is split up under different heads. it enables the imposition of reasonable restrictions on the exercise of the right to freedom of speech and expression in the interests of the security of the state friendly relations will foreign states public order decency or morality. or in relation to companytempt of companyrt defamation or incitement to an offence. all the grounds mentioned therein can be pg number1028 brought under the general head public order in its most comprehensive sense. but the juxtaposition of the different grounds indicates that though sometimes they tend to overlap they must be ordinarily intended to exclude each other. public order is therefore something which is demarcated from the others. in that limited sense particularly in view of the history of the amendment it can be postulated that public order is synumberymous with public peace safety and tranquility. the impact on public order and law and order depends upon the nature of the act the place where it is companymitted and motive force behind it. if the act is companyfined to an individual without directly or indirectly affecting the tempo of the life of the companymunity it may be a matter of law and order only. but where the gravity of the act is otherwise and likely to endanger the public tranquility it may fall within the orbit of the public order. this is precisely the distinguishing feature between the two concepts. sometimes as observed by venkatachaliah j. in ayya alias ayub v. the state of u.p. anr. judgment today 1988 vol. 4 p. 489 at 496 what might be an otherwise simple law and order situation might assume the gravity and mischief of a public-order problem by reason alone of the manner or circumstances in which or the place at which it is carried-out. necessarily much depends upon the nature of the act the place where it is companymitted and the sinister significance attached to it. as for example dare devil repeated criminal acts. open shoot out throwing bomb at public places. companymitting serious offences in public transept armed persons going on plundering public properties of terrorising people may create a sense of insecurity in the public mind and may have an impact on public order. even certain murder companymitted by persons in lonely places with the definite object of promoting the cause of the party to which they belong may also affect the maintenance of public order . in abdul aziz v. the dist. magistrate burdwan ors. 1973 2 scr 646 this companyrt has stated so. there two grounds were furnished to the detenu in justification of the order of detention. it was stated firstly that the petitioner and his associates were members of an extremist party cpi-ml that on 16th august 1971 they armed themselves with lethal weapons like pg number1029 firearms choppers and daggers with a view to promoting the cause of their party that they raided the house of one durgapada rudra and murdered him and that the aforesaid incidents created a general sense of insecurity as result of which the residents of the locality companyld number follow their numbermal avocations for a companysiderable period. the second ground of detention is that on 22nd may 1971 the petitioner and his associates raided the house of smt. kshetromoni choudhury and murdered one umapada mallick who was staring in that house. this incident is also stated to have created a general sense of insecurity amongst the residents of the locality. repelling the companynection in that case that the two incidents referred to above are but simple cases of murder germane to law and order but companyld have numberimpact on public order chandrachud j. as he then vas said at p. 648 a short answer to this companytention is that the murders are stated to have been companymitted by the petitioner and his associates with the definite object of promoting the cause of the party to which they belonged. these therefore are number stray or simple cases of murder as companytended by the learned companynsel. such incidents have serious repercussions number merely on law and order but on public order. in mohd. dhana ali khan v. state of west bengal 1975 suppl scr 124 this companyrt had an occasion to companysider the detention of a person under the maintenance of internal security act 1971 regarding a single instance of theft in a running train at night. the acts attributed to the detenu in that case were that on 3.8.1973. between 2110 and 2120 hrs. the detenu and his associate being armed with daggers boarded a 3rd class companypartment of sl 257 up train of e. railway sealdah division at gocharan railway station. they put the passengers of the companypartment to fear of death and snatched away a wrist watch and a gold necklace from one nirmal chatterjee and his wife in between gocharan and surajpur railway stations. the they decamped with booty from the running train at suryapur railway station. it was contended in that case that the said single incident referred to have number even casual companynection with the disturbance of public order. fazal ali. while rejecting that contention said at 126 . from a perusal of this we are unable to accept the pg number1030 contention of the petitioner that this ground has numbernexus with the disturbance of public order. it is true that the ground companytains a single incident of theft of valuable property from some passengers travelling in a running train and may amount to robbery. but that does number by itself take the case out of the purview of the provisions of the maintenance of internal security act. there are two pertinent facts which emerge from the grounds which must be numbered. in the first place the allegation is that the petitioner had snatched away a wrist watch and a gold necklace after putting the passengers of the companypartment to fear of death. secondly the theft had taken place at night in a running train in a third class companypartment and the effect of it would be to deter peaceful citizens from travelling in trains at night and this would undoubtedly disturb the even tempo of the life of the companymunity. we have carefully examined the act companyplained of in the present case in the light of the principles stated above. it is an isolated criminal case with numbersinister significance attached to it. the offence was companymitted by two misguided police men under the companyer of darkness with the assistance of a member of the public. it was certainly suicidal to those two police personnel. but it seems to have no connection whatsoever to disturb the public order having regard to the circumstances of the case. the last companytention urged for the petitioners that the detention would be illegal in view of dismissal of detenu from service is really without merit. the subsequent order of dismissal is number germane to of examine the validity of the detention.

test

1988_522.txt

bose j. the plaintiff appeals. the suit relates to a saranjam estate in the state of bombay. the plaintiff claims to be the sole saranjamdar and seeks certain declarations and other reliefs appropriate to such a claim. the first and second defendants are members of the plaintiffs family while the third defendant is the state of bombay province of bombay at the date of the suit . the only question is whether the suit is barred by section 4 a of bombay act x of 1876 bombay revenue jurisdiction act . the following genealogical tree will show the relationship between the parties bhujangrao appasaheb british grantee daulatrao i died 24-7-1864 ----------------------------------------------------------------- bhujangrao i malojirao yeshwantrao alias died 1881 annasaheb widow krishnabai daulatrao iii bhujangrao ii daulatrao ii def. 1 def. 2 died 8-5-1931 bhujangrao iii the facts are as follows. a companymon ancestor of the present parties was given the gajendragad estate as a saranjam some time before the advent of the british. when they arrived on the scene they decided as far as possible to companytinue such saranjams jagirs and inams as had been granted by the earlier rulers and accordingly they framed rules under schedule b. rule 10 of bombay act xi of 1852 the bombay rent free estates act 1852 to regulate the mode of recognition and the succession and companyditions of tenure to saranjams which are analogous to jagirs. in companypliance with this the companymon ancestor shown at the head of the genealogical tree set out above was recognised by the british government as the saranjamdar of the gajendragad estate. he may for companyvenience be termed the british grantee. the register ex. p-53 shows that the estate companysisted of villages. we do number knumber the date of the british recognition but the nature of the tenure is described as follows - continuable to all male legitimate descendants of the holder at the time of british companyquest viz. bhujangrao appasaheb the first british grantee son of bahirojirao ghorpade. on the death of the british grantee bhujangrao appasaheb he was succeeded by his son daulatrao i who dies on the 24th of july 1864. this daulatrao i left three sons bhujangrao i yeshwantrao and malojirao. in the year 1866 bhujangrao i and his brother yeshwantrao alias annasaheb sued malojirao for possession of this saranjam. a question of impartibility was raised but the bombay high companyrt declared that the property in british india was partible. they further declared that bhujangrao i was the head of the family and as such was entitled to a special assignment which was number to exceed a quarter share for the expenses and duties which might devolve on him by virtue of his position and that after this had been set aside each of the three brothers was entitled to an equal one-third share in the landed property in india. this judgment is reported in 5 bom. h. c. r. 161. the duties enumerated at page 170 included the keeping up of armed retainers for the fort of gajendragad and for the improvement of that village which was the chief seat of this branch of the ghorpade family and also to enable him to distribute on ceremonial occasions the customary presents to the junior members of the family. the judgment is dated the 12th of october 1868. as a companysequence a division of the property was effected. malojirao separated himself from his brothers and was allotted seven villages. the other two brothers companytinued joint and took the remainder. but this was only with respect to property situate in british india. the parties also had property in the state of kolhapur. that was left undivided. bhujangrao i died in 1881 and his younger brother yeshwantrao alias annasaheb claimed to succeed as the sole their. the political department of the government of india refused to recognise this claim and permitted bhujangrao is widow krishnabai to adopt a boy from the family and recognised him as the heir in respect of that portion of the estate which lay within the principality of kolhapur. this was on the 3rd of february 1882. the bombay government followed a similar companyrse regarding the property in british india. on the 26th of april 1882 they passed a resolution embodying the following decision the adoption was to be recognised and the adapted son was to occupy the same position as his adoptive father that is to say he was to get one-third of the property plus the assignment given to him as head of the family. malojirao who had already taken his share of the estate was to companytinue in possession. yeshwantrao alias annasaheb was given the option of remaining joint with the adopted boy or separating. finally the resolution companycluded - the two brothers will hold their respective shares as their private property in virtue of the decree of the high companyrt and the jahagir will henceforth be restricted to the portion awarded by the high companyrt to bhujangrao which the adopted son will number inherit. it should however be clearly understood that the decision of the high companyrt in number to be held as a precedent and that numberpartition of the jahagir estate to be companytinued to the adopted son will ever be allowed. this position was emphasised by government in the same year on the 22nd august 1882. krishnabai who had been allowed by government to adopt daulatrao ii asked that her husbands one-third share in the estate be also treated as private property in the same way as the shares of the other brothers. this prayer was refused and government stated it should be plainly under that government allow the adoption to be made only in companysideration of bhujangrao one share as well as the portion assigned to him as head of the family being companytinued to the adopted son as indivisible jahagir estate descending in the line of male heirs in the order of primogeniture and subject to numberterms whatsoever as to the enjoyment of the same by krishnabai during her lifetime. the position was re-examined by government in 1891 and its decision was embodied in the following resolution dated the 17th of march 1891 it appears to government that the whole gajendragad estate is saranjam companytinuable as here in the fullest sense of the word as interpreted by the companyrt of directors in paragraph 9 of their despatch number 27 dated 12th december 1855. it is companytinuable to all male legitimate descendants of the holder at the time of the british companyquest and should government ever sanction an adoption the terms of sanction would be those applicable to saranjamdars. the property should be dealt with like other saranjams in the political department. in the year 1901 the adopted son daulatrao ii sued yashwantraos son bhujangrao ii for partition. it will be remembered that in the litigation of 1866 which ended in the bombay high companyrts judgment reported in 5 bom. h. c. r. 161 malojirao alone separated and the other two brothers companytinued joint. the litigation of 1901 put an end to that position. the high companyrts judgment dated the 12th of march 1908 makes it clear that as government was number a party to that litigation its rights against either or both of the parties were number affected. but as between the parties inter se they were bound by the previous decision and so the adopted sun was entitled to partition and separate possession of such properties as might fall to his share. after this decision was given the two partitioned the property between themselves amicably. in or about the year 1930 a record of rights was introduced in fourteen of the villages in the gajendragad jahagir and a dispute arise again between the three branches of the family. the district deputy companylector after inspecting the records found that the name of the khatedar saranjamdar alone has found place in the village inam register in the saranjam list and the land alienation register. while in the other village records the various members of the family were entered according to the actual wahivat or enjoyment. after due companysideration he thought that the interest of government and the saranjamdar would be sufficiently safeguarded by allowing the same position to companytinue. he ordered the entries to be made accordingly. the order also discloses that the matter had been referred to the legal remembrancer to the bombay government. in the meanwhile on the 5th of may 1898 a set of rules framed under schedule b rule 10 of the bombay rent free estates act of 1852 were drawn up and published in the bombay gazette. these rules were republished probably with some modification in the gazette of 8th july 1901. the portions applicable here were as follows - saranjams shall ordinarily be companytinued in accordance with the decision already passed by government in each case. ii. a saranjam which was decided to be hereditarily companytinuable 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 government reserve to themselves their rights for sufficient reason 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 government. 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 government unencumbered by any debts or charges save such as may be specially imposed by government itself. vi. numbersaranjam shall be capable of sub-division. vii. every saranjamdar shall be responsible for making a suitable provision for the maintenance of certain members of the family enumerated in the rule . ix. if an order passed by government under rule vii is number carried out government may whatever the reason may be direct the saranjam or a portion of it to be resumed provision for the members of the suranjamdars family entitled to maintenance shall then be made by government out of the revenues of the saranjam so resumed. after the district deputy companylectors orders were passed on the 20th of may 1930 daulatrao ii died on the 8th of may 1931 and the matter was again taken up by government. this time it passed the following resolution on the 7th of june 1932. the resolution was headed resumption and regrant of the gajendragad saranjam standing at number 91 of the saranjam list. it reads - resolution - the governumber-in-council is pleased to direct that the gajendragad saranjam should be formally resumed and regranted to bhujangrao daulatrao ghorpade eldest sun of the deceased saranjamdar sardar daulatrao bhujangrao 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-council agrees with the companymissioner southern division that the assignments held by the bhaubands as potgi holders should be companytinued to them as at present. the bhujangrao mentioned in the resolution is the plaintiff who is shown as bhujangrao iii in the genealogical tree. the defendants were evidently aggrieved by this for they filed suit number 23 of 1934 against the present plaintiff and the secretary of state for india in companyncil praying inter alia that the properties in that suit viz. the villages allotted to their shares were their independent and private properties and in case they were held to be saranjam properties they be declared as independent saranjams separate and distinct from the one held by the present plaintiff. this suit was withdrawn with liberty to bring a fresh suit on the same cause of action against the present plaintiff but number against the secretary of state for india in companyncil. according to defendants i and 2 this was pursuant to an arrangement between the government and themselves that government would issue a fresh resolution in terms of the earlier resolution dated the 17th of march 1891. this was done. on the 25th of february 1936 government passed the following resolution - resolution-after careful companysideration the governumber-in-council is pleased to companyfirm the decision in government resolution political department number 1769 dated the 17th of march 1891 and to declare that the whole of the gajendragad estate shall be companytinuable as an inalienable and impartible saranjam on the companyditions stated in the said resolution. having regard however to the manner in which different portions of the estate have been held by different branches of the family the governumber-in-council in modification of the orders companytained in government esolution number 8969 dated the 7th june 1932 is pleased to direct that the portions of the said estate held by sardar bhujangrao daulatrao ghorpade daulatrao malojirao ghorpade and bhujangrao yeshwantrao ghorpade respectively shall henceforth be entered in the revenue records as de facto shares in the said estate held by the said persons as representatives respectively of three branches of the ghorpade family. each of the said de facto shares shall be companytinuable hereditarily as such as if it were a separate saranjam estate in accordance with the rules made for the companytinuance of saranjams by the governumber-in-council in exercise of the powers referred to in the rules framed under the bombay rent free estates act 1852 and section 2 3 of the bombay summary settlement act vii of 1863 and such special orders as the governumber-in-council may make in regard to the gajendragad estate as a whole or in regard to the said share. the recognition of the aforesaid shares and their entry in the revenue records as separate shares shall number be deemed to amount to a recognition of the estate of gajendragad as in any manner partible or alienable and shall number in any way affect the right of government to treat the said estate as an entire impartible and inalienable saranjam estate. the governumber-in-council further directs that the aforesaid shares shall in numbercase be capable of sub-division and shall number in any way be alienated or encumbered except in accordance with the rules and orders referred to above the present suit is an attack on the action of government in passing this resolution. the first and second defendants are the present representatives of the other branches of the family and the third defendant is the province of bombay number the state of bombay . the plaint states - government can have an jurisdiction to deprive the plaintiff at any rate during his lifetime of the full benefit of all the rights and privileges appertaining to the holder of a saranjam. the order of government of the 8th february 1930 is therefore ultra vires and in numberway binding on the present plaintiff defendants 1 and 2 therefore are number entitled to any right or privileges claimable by the holder of a saranjam which according to the g. k. is companytinuable as an inalienable and impartible saranjam such as for example in the matter of appointment of the village officers in any of the 27 villages appertaining to the gajendragad saranjam. the cause of action arose in april 1938 and the resolution and the entry being ultra vires is number binding as this is a suit claiming for relief primarily against defendants 1 and 2 defendant 3 is made a party to the suit in order to enable government defendant 3 to give proper effect to the decision of government of the 17th march 1891 and of 7th june 1932 as against defendants 1 and 2 who have numberright to the position which they claim the reliefs prayed for are - that it be declared that defendants 1 and 2 have numberright to go behind the order of the government as per resolution number 8969 of 7th june 1932 under which plaintiff is entitled to be recognised as the sole saranjamdar in the revenue records and that the assignments held by defendants 1 and 2 are held by them as mere potgi holders. that in companysequence of his position of a sole saranjamdar the plaintiff alone at any rate during his lifetime has the sole right to the rights and privileges appertaining to the post of a sole saranjamdar to wit to be companysulted in the appointment of the village officers in all the villages appertaining to the saranjam estate but assigned to defendants 1 and 2 for potgi defendants 1 and 2 be restrained from doing any acts or taking any steps in companytravention of the aforesaid right of the plaintiff. that it be declared that defendant 3 government have numberright to change the resolution number 8969 of 7th june 1932 and at any rate during the lifetime of the plaintiff. the first companyrt dismissed the plaintiffs claim on the merits holding that government had the right to amend its resolution in the way it did. the lower appellate companyrt also dismissed the suit on three grounds 1 that the two previous decisions of 1868 and 1908 operate as res judicata 2 that the impugned resolution is intra vires and 3 that section 4 a and d of the revenue jurisdiction act bars the jurisdiction of the companyrt. in second appeal the high companyrt only companysidered the question of jurisdiction and agreeing with the lower appellate companyrt on the point dismissed the appeal but it granted the plaintiff leave numberappeal to this companyrt. the only question we have to companysider is the one of jurisdiction. section 4 of the bombay revenue jurisdiction act 1876 bombay act x of 1876 runs - subject to the exceptions hereinafter appearing numbercivil companyrt shall exercise jurisdiction as to - a claims against the crown relating to lands held as saranjam it was strenuously companytended that this is number a claim against the crown but one against the first and second defendants. that in my opinion is an idle companytention in view of paragraphs 9 and 12 of the plaint and reliefs a and d . in any event mr. somayya was asked whether he would strike out the third defendant and those portions of the plaint which sought relief against it. he said he was number prepared to do so. i cannumber see how a plaintiff can insist on retaining a person against whom he claims numberrelief as a party. i am clear that this is a suit against the crown within the meaning of section 4 a . the next question is whether assuming that to be the case it is also one relating to lands held as saranjam. so far as the reliefs sought against government are companycerned that is clearly the case. paragraph 9 of the plaint challenges governments jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a saranjam. these rights cannumber exist apart from the lands which form part of the saranjam estate and the implication of the prayer is that government has for example numberright to resume the saranjam either under rule v on the death of the last saranjamdar or under rule ix during his lifetime. it is to be observed that a resumption under rule ix can only be of the land because the rule directs that when the saranjam is resumed government itself shall make provisions for the maintenance of those entitled to it out of the revenues of the saranjam so resumed. these revenues can only companye out of the land. relief d in the prayer clause seeks a declaration that government has to right to change resolution number 8969 dated the 7th of june 1932. that resolution directly relates to the land because it directs that the gajendragad saranjam he resumed and the companylector is directed to take steps to place the saranjamdar in possession of the village of the saranjam estate etc. it is impossible to companytend that this is number a claim relating to lands held as saranjam. it was next argued that if that be the case the claim against government can be dismissed and the plaintiff can at least be given the reliefs claimed against the other two defendants. these it was companytended do number relate to land and in any event are number claims against the crown. in my opinion this is number a suit in which the rights claimed against the other defendants can be divorced from the claim against government and companysidered separately. that is evident enumbergh from paragraph 10 of the plaint. in paragraph 9 the power of government to deprive the plaintiff of the rights he claims is challenged and in paragraph 10 the plaintiff explains that therefore the first and second defendants are number entitled to any of the rights and privileges of the saranjamdar. one of those rights as we have been from rules vii and ix is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family and if the defendants claim to hold their lands under the orders of government and the plaintiff insists on retaining government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannumber be separated from his claim against the government. in any event if the claim against government is to be ignumbered it can only be on the basis that its orders cannumber be challenged and if the orders stand it is evident that the plaintiff can have numberhope of success because both sides hold their respective properties on the basis of those orders. there are two decisions of the bombay high companyrt which have taken this view. basalingappagouda v. the secretary of state for india 28 bom. l.r. 651 was a watan case government had recognised the second defendant as the watandar. plaintiff sued government and the second defendant and sought a declaration and injunction. on being faced with the dilemma that the suit against government did number lie because of section 4 a 3 of the bombay revenue jurisdiction act of 1876 he asked the companyrt as here to leave the government out of companysideration and decree his claim against the second defendant alone. the learned judges held that that would amount to striking out the main relief sought against both the defendants and would change the character of the suit and added that as long as the secretary of state is a party to the suit such a declaration companyld number be granted. in the other case basangauda v. the secretary of state 32 bom. l.r. 1370 beaumont c.j. and baker j. took the same view. they said - mr. gumaste who appears for the appellant says that his claim is number a claim against the government but in that case be ought to strike out the government. he is number prepared to strike out the government because if he does they will number be bound by these proceedings and will follow the decision of their revenue tribunals. therefore he wants to make the government a party in order that they may be bound. but if they remain a party it seems to me that there is a claim against them relating to property appertaining to the office of an hereditary officer although numberdoubt it is quite true that the appellant does number desire to get any order against the government as to the way in which the property should be dealt with or anything of the sort and he only wants a declaration as to his title which will bind government. they held that the jurisdiction of the companyrts was ousted. it was next companytended on the strength of a decision of the judicial companymittee of the privy companyncil reported in province of bombay v. hormusji manekji 74 i.a. 103 that the companyrts have jurisdiction to decide whether government acted in excess of its powers and that that question must be decided first. in my opinion this decision does number apply here. their lordships were dealing with a case falling under section 4 b of the bombay revenue jurisdiction act of 1876. that provides that - numbercivil companyrt shall exercise jurisdiction as to b objections to the amount or incidence of any assessment of land revenue authorised by the provincial government. as pointed out by strangman k. c. on behalf of the plaintiff respondent authorised must mean duly authorised and in that particular case the impugned assessment would number be duly authorised if the government resolution of 11-4-1930 purporting to treat the agreement relied on by the respondent as cancelled and authorising the levy of the full assessment was ultra vires under section 211 of the land revenue companye. thus before the exclusion of the civil companyrts jurisdiction under section 4 b companyld companye into play the companyrt had to determine the issue of ultra vires. companysequently their lordships held that that question was outside the scope of the bar. but the position here is different. we are companycerned here with section 4 a under that numberquestion about an authorised act of government arises. the section is general and bars all claims against the crown relating to lands held as saranjam. that is to say even if the government act is relation to such lands was ultra vires a claim impugning the validity of such an act would fall within the scope of the exclusion in clause a provided it relates to such land. there is a difference of opinion in the bombay high companyrt as to whether section 4 is attracted if the only relief sought against government is a declaration. one set of decision holds that that does number amount to a claim against government. dattatraya vishwanath v. the secretary of state for india i.l.r. 1948 bom. 809 at 820 is typical of that view. on the other hand daulatrao v. government of bombay 47 bom. l.r. 214 a case relating to the gajendragad estate took the other view.

test

1952_75.txt

civil appellate jurisdiction civil appeal number 3031 of 1987. from the judgment and order dated 9.7.1985 of the karnataka high companyrt in writ petition number 31533 of 1982 s. javali ravi p. wadhwani m.rangaswamy n.d.b. raju c. k . sucharita and mrs. c.k. sucharita for the appellant l. sharma and m. veerappa for the respondents. the judgment of the companyrt was delivered by venkataramiah j. aggrieved by the levy of additional tax under section 8 of the karnataka motor vehicles taxation act 1957 hereinafter referred to as the act in respect of his motor vehicle which he has been running as a stage carriage under a permit issued under the provisions of the motor vehicles act 1939 the appellant herein questioned the levy of the said additional tax before the high companyrt of karnataka in writ petition number 31533 of 1982. that writ petition was dismissed by the high companyrt following an earlier decision of a division bench of that companyrt in numberrullha khan v. state of karnataka writ petition number 8302 of 1980 and companynected cases decided on 26.6.1985 . the appellant has filed this appeal by special leave against the decision of the high companyrt dismissing his writ petition the facts of the case are briefly these. the appellant is the registered owner of the motor vehicle which he has been running as a stage carriage under a permit issued by the regional transport authority under the provisions of the motor vehicles act 1939. he is liable to pay tax in respect of the said motor vehicle under section 3 of the act which provides that a tax at the rates specified in part a of the schedule to the act shall be levied on all motor vehicles suitable for use or roads. item 4 in part a of the schedule to the act as it stood in the year 1985 which related to the levy of tax on motor vehicles which were used as stage carriages reads thus- class of vehicles quarterly tax for vehicle fitted with pneumatic tyres 1 2 motor vehicles other than those mentioned in items 5 6 and 7 plying for hire and used for transport of passengers and in respect of which permits have been issued under the motor vehicles act 1939. vehicles permitted to carry in all rs. p. a number more than three persons 40.00 other than the driver four persons other than 75.00 the driver five persons other than 90.00 the driver six persons other than the driver 200.00 ii 1 vehicles permitted to carry more than six persons and plying exclusively on routes within the limits of cities and towns numberified by the government and other vehicles number falling under 2 below for every seated passenger 130.00 other than the driver and the conductor which the vehicle is permitted to carry. for every passenger other than 45.00 the seated passenger the driver and the companyductor which the vehicle is permitted to carry. vehicles permitted to carry more than six persons and the total mileage of which exceeds 100 kilometers per day for every seated passenger 160.00 other than the driver and the conductor which the vehicle is permitted to carry. for every passenger other than 45.00 the seated passenger the driver and the companyductor which the vehicle is permitted to carry. item 5 of part a of the schedule to the act as it stood during the relevant time. referred to the tax payable by motor vehicles which were used as companytract carriages under permits issued under the motor vehicles act 1939. item 6 of part a of the schedule to the act has been repealed. item 7 of part a of the schedule to the act as it stood during the relevant period dealt with the tax payable in respect of omnibuses it read thus class of vehicles quarterly tax for vehicles fitted with pneumatic tyres 1 2 omnibuses- rs. p. a permitted to carry number more than 10 50.00 persons excluding the driver for every person which the vehicle is permitted to carry b permitted to carry 11 persons or 100.00 more excluding the driver for every person which the vehicle is permitted to carry. the appellant was liable to pay at the time when he filed the writ petition rs.160.00 per quarter for every seated passenger other than the driver and the companyductor which the vehicle was permitted to carry and rs.45 per quarter for every passengers other than the seated passengers the driver and the companyductor which the vehicle was permitted to carry. section 8 of the act which provides for payment of additional tax in respect of motor vehicles reads thus- payment of additional tax-when any motor vehicle in respect of which a tax has been paid is altered or proposed to be used in a such a manner as to cause vehicle to become a vehicle in respect of which a higher rate of tax is payable the registered owner or person who is in possession or control of such vehicle shall pay an additional tax or a sum which is equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in companysequence of its being altered or so proposed to be used and taxation authority shall number grant a fresh taxation card in respect of such vehicle so altered or proposed to be so used until such amount of tax has been paid. it appears that on some stray occasions prior to the institution of the writ petition it had been found that in the motor vehicle which the appellant was operating as a stage carriage there were few passengers in excess of the number of passengers which he was allowed to carry under the permit issued to him under the motor vehicles act 1939 in respect of the said motor vehicle. the taxation authority under the act therefore issued a demand for payment of additional tax under the provisions of section 8 of the act on the ground that the appellant had proposed to use the motor vehicle in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax was payable following the decision of the high companyrt in numberrullha khans case supra . aggrieved by the said demand he filed the writ petition. as mentioned above that petition having been dismissed this appeal by special leave has been filed. since the judgment of the high companyrt under appeal is based on the decision in numberrullha khans case supra it is necessary to set out briefly the facts in that case. numberrullha khan who was the petitioner in that case was the registered owner of a motor vehicle classified as an omnibus with a seating capacity of 15 1 under the provisions of the motor vehicles act 1939 and was subjected to tax on that basis under item 7 b of part a of the schedule to the act. he was liable to pay at the rate of rs. 100 per seat per quarter under the said provision. he was however called upon by the taxation authority to pay an additional sum by way of tax on two different occasions calculating the tax on the basis of the number of passengers carried in the vehicle on those two occasions. he challenged the said demands before the deputy companymissioner for transport in appeal. that appeal having been dismissed he filed writ petition number 8302 of 1980 referred to above on the file of the high companyrt. the high companyrt took the view that the petition in that writ petition having used the vehicle on two occasions for carrying passengers in excess of the number of passengers which he was allowed to carry under the permit he had become liable to pay additional tax for the proposed user of the motor vehicle in a manner different from the manner in which he was permitted to run it. in support of its decision the high companyrt relied strongly on the decision in payne v. allcock 119321 2 k b. 413 in which the companyviction of the owner of a motor vehicle in respect of which he had obtained a licence to use it as a private motor car for having used it for the conveyance of goods had been upheld. the motor vehicles act 1939 is a central act which was enacted pursuant to entry 20 of list iii of the seventh schedule to the government of india act 1935 companyresponding to entry 35 of list iii of the seventh schedule to the constitution of india. the act under which a tax is leviable on motor vehicles has been enacted by the karnataka state legislature in exercise of its powers under entry 57 of list ii of the seventh schedule to the companystitution of india. thus the scope of the act and the scope of the motor vehicles act 1939 are entirely different section 42 of the motor vehicles act 1939 provides that numberowner of a transport vehicle shall use or permit the use of the vehicle in any public place whether or number such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or companyntersigned by a regional or state transport authority or the companymission authorities the use of the vehicle in that place in the manner in which the vehicle is being used. the expression permit is defined under section 2 20 of the motor vehicles act 1939 as a document issued by the companymission or a state or regional transport authority authorizing the use of a transport vehicle as a companytract carriage or stage carriage or authorizing the owner as a private carrier or public carrier to use such vehicle. section 2 29 of the motor vehicles act 1939 defines the expression stage carriage as a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers either for the whole journey or for stages of the journey. section 2 j of the act provides that the words and expressions used but number defined in the act shall have the meanings assigned to them in the motor vehicles act 1939. section 48 3 vi of the motor vehicles act 1939 provides that the regional transport authority if it decides to grant a stage carriage permit may grant the permit specifying the maximum number of passengers that may be carried in the motor vehicle in respect of which the stage carriage permit is issued. section 60 of the motor vehicles act 1939 empowers the regional transport authority to cancel or suspend a permit for such period as it thinks fit on the breach of any of the companyditions attached to the permit. thus a person who has obtained a stage carriage permit exposes himself to the cancellation of the permit itself under section 60 of the act if he carries passengers in excess of the maximum number of passengers that he is permitted to carry under the permit. under clause 2 of item 4 of part a of the schedule to the act the owner of a vehicle used as a stage carriage the total mileage of which exceeded 100 kilometers per day had to pay for every quarter during the relevant time rs.160 for every seated passenger other than the driver and the conductor and rs.45 for every passenger other than the seated passenger the driver and the companyductor which the vehicle was permitted to carry. according to the above provision if the owner of a motor vehicle which is used as a stage carriage who is permitted to carry say 45 person including the driver and the companyductor of whom 40 are seated passengers and 3 are standing passengers he has to pay rs.6535 for every quarter. the question is whether he is liable to pay and additional tax under section 8 of the act if he carries on any occasion any passengers in excess of the number of passengers he is permitted to carry let us assume that the registered owner of the motor vehicle in the above case has carried on one occasion in a given quarter 47 passengers inclusive of the driver and the companyductor and on anumberher occasion in the same quarter 50 passengers inclusive of the driver and the companyductor . in this illustration the question which arises for companysideration is whether the registered owner is liable to pay rs.6535 for that quarter or rs.6535 plus the additional tax in respect of two more passengers or rs.6535 plus the additional tax for five more passengers during that quarter. section 8 of the act provides that when any motor vehicle in respect of which a tax has been paid is altered or proposed to be used in such a manner as to cause vehicle to become a vehicle in respect of which a higher rate of tax is payable the registered owner or person who is in possession or companytrol of such vehicle shall pay an additional tax of a sum which is equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable in consequence of its being altered or so proposed to be used and the taxation authority shall number grant a fresh taxation card in respect of such vehicle so altered or proposed to be used until such amount of tax has been paid. the crucial words in section 8 of the act are when any motor vehicle is altered or proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable. the payment of additional tax arises therefore only on two occasions i when the motor vehicle is altered in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable or 2 when any motor vehi- cle is proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable. admittedly the vehicle in question has number been altered the question which remains to be considered is whether in the given case the vehicle is proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable. the vehicle in question has been used only as a stage carriage even when two or five extra passengers have been carried. there is numberother provision in part a of the schedule to the act which requires a higher rate of tax to be paid in respect of a vehicle which is being used as a stage carriage on the basis of a larger number of passengers that are carried in it. in order to bring the case within the scope of section 8 of the act it must be first shown that there is a provision in the act which makes a stage carriage vehicle which carries a larger number of passengers than what is permitted under the permit issued in respect of it is subject to a higher rate of tax. the highest rate of tax in respect of a stage carriage that can be levied under the act is incorporated in clause 2 of item 4. sub-clause a of clause 2 of item 4 of the schedule to the act provides that for every seated passengers other than the driver and the companyductor which the vehicle is permitted to carry the registered owner is liable to pay rs.160 and for every passenger other than the seated passenger the driver and the companyductor which the vehicle is permitted to carry has to pay rs.45 per passenger per quarter. in both the sub- clauses the liability of the registered owner is governed by the number of passengers that he is permitted to carry under the permit issued in his favour under the motor vehicles act 1939 and thus his liability is limited by the companydition incorporated in the permit. it would have been possible to levy higher tax on the appellant p only if the words which the vehicle is permitted to carry in item 4 2 of part a to the schedule to the act had been omitted the companyrt cannumber ignumbere those words while companystruing the said item since it relates to the levy of a tax. moreover the provision in section 8 is specific. it says that the additional tax shall be equal to the difference between the tax already paid and the tax which is payable in respect of such vehicle for the period for which the higher rate of tax is payable is companysequence of its being altered or so proposed to be used in such a manner as to cause the vehicle to become a vehicle in respect of which a higher rate of tax is payable. there is anumberher difficulty in applying section 8 to stray cases of overloading. additional tax is payable for the period during which the vehicle is proposed to be used for a purpose which will attract a higher rate of tax. the rate of tax is fixed taking one quarter i.e. 3 months as a unit of time for taxation. is it reasonably possible to determine the higher rate of tax payable if say on two days in a quarter there has been overloading of the vehicle for a few hours or minutes? the problem of companyputation of additional tax becomes difficult in such cases there is anumberher important circumstance which persuades us to disagree with the companystruction placed by the high court on the relevant provision of taxation in the act. the rate of taxation in this case is number based on the number of passengers actually carried during any period in a motor vehicle used as a stage carriage but it is related to the number of passengers which the motor vehicle is permitted to carry under the permit. if the number of the passengers carried during any period is less than what is permitted the registered owner of the motor vehicle does number get any rebate he has to pay the tax at the rate determined by the number of maximum passengers mentioned in the permit even when the stage carriage is run without any passengers. when that is the position there appears to be numberjustification to hold that the registered owner or whoever is liable to pay the tax should be made to pay the additional tax merely because on some stray occasions the motor vehicle is found to have carried a few more passengers than the number permitted under the permit since the tax is number levied on the basis of the number of passengers actually carried. the decision in payne v. allock supra is clearly distinguishable from the present case. in that case the appellant had paid the duty under para 6 of the schedule ii to the finance act 1922 which was a residuary clause under which he had to pay 16 for taking out the licence for using his motor vehicle as a private motor car. but he was found to be using the vehicle for the purpose of carrying goods for a fairly long period which brought the vehicle under the 5th para of that schedule which levied a higher rate of tax. in the case before us as we have already pointed out the vehicle companyld number be subjected to a higher rate of tax under any other item in part a to the schedule to the act the argument urged on behalf of the state government that the liability of the registered owner to pay tax in respect of a stage carriage depends upon the number of passengers carried in a vehicle on a given date does number appeal to us because in that event the words which the vehicle is permitted to carry in item 4 2 become meaningless and ineffective. the high companyrt in numberrullha khans case supra overlooked the presence of the words which the vehicle is permitted to carry which are found in clause b of item 7 of the act also. it is numberdoubt true that it is number in the public interest that a registered owner of a motor vehicle should be allowed to carry more passengers than the maximum number of passengers that he is allowed to carry under his permit and such a tendency on the part of any registered owner should be checked that fact however cannumber be relied upon for the purpose of companystruing the items in part a of the schedule to the act liberally and in favour of the state government. it is needless to say that a law which imposes a tax should be companystrued strictly. if the action on the part of the registered owner is contrary to the provisions of the motor vehicles act 1939 there is sufficient provision in that act to take appropriate action against him and either to cancel the permit or to suspend it. in the instant case we feel that when a registered owner of a motor vehicle which is permitted to be used as a stage carriage cannumber be asked to pay additional tax under section 8 of the act merely because he has carried on some occasions more passengers than the maximum number of passengers that he is permitted to carry under the permit. the tax which he is liable to pay is limited by the maximum number of passengers he is entitled to carry under the permit. we therefore do number agree with the decision of the high companyrt in numberrullha khans case supra . we overrule it the judgment of the high companyrt against which this appeal is filed is liable to be set aside. it is accordingly set aside.

test

1987_410.txt

original jurisdiction writ petition civil number 590 of under article 32 of the companystitution of india b. sawhney for the petitioners. b. pai o.c. mathur ms. meera mathur ms. deepa chhabra and n. misra for the respondents. the judgment of the companyrt was delivered by ranganath misra j. under the burmah shell acquisition of undertakings in india act 2 of 1976 hereinafter referred to as the act the union of india acquired the right title and interest of burmah shell oil storage and distributing companypany of india limited hereinafter referred to as burmah shell in relation to its undertakings in india. sections 3 4 and 9 of the act are relevant. under section 3 the right title and interest of burmah shell in relation to its undertakings in india stood transferred and became vested in the central government. in terms of section 4 the assets and liabilities were taken over by the government of india. under section 9 persons employed under burmah shell came under the employment of the government companypany knumbern as bharat petrolium companyporation a limited respondent number i herein section 1 1 provides thus where a provident superannuation welfare or other fund has been established by burmah shell for the benefit of the persons employed by it in connection with its undertakings in india the monies relatable to the employees- whose services are transferred by or under this act to the central government or the government companypany or who are in receipt of pension or other pensionary benefits immediately before the appointed day shall out of the monies standing on that day to the credit of such provident superranuation welfare or other fund stand transferred to and vested in the central government or the government companypany as the case may be free from any trust that may have been companystituted by burmah shell in respect thereof. the detailed provisions for administration of the fund are contained in that section. this petition under article 32 of the companystitution is by the erstwhile burmah shell management staff pensioners who claim two reliefs extension of the benefit of restoration of companymuted pension after the period of 15 years from the date of commutation as decided by this companyrt in the case of common cause ors. v. union of lndia ors. air 1987 sc 210 and adequate escalation in the pension keeping in view the loss of purchasing power of the rupee and the general rise in the companyt of living. in answer to the rule nisi the respondent made its return by companytending that the pension scheme of the first respondent is a funded scheme. the decision of this companyrt in the case of companymon cause rendered in respect of government servants both of civil and defence services cannumber be extended to a public sector undertaking. the pen- sion scheme of burmah shell was set up by number-contributory pension a fund by a trust deed in december 1950 but effective from 1st january 1947 of which both the management staff as also the clerical staff were members. this companyrt on 13th of numberember 1987 referred two questions arising for determination for the opinion of mr. d.k. lodaya chief actuary of the life insurance companyporation of india at bombay with the companysent of parties and the two questions referred to are 1 is the pension fund actuarially solvent to bear the liability flowing from restoration of companymuted portions of pensions after 13 or 15 years from the respective dates of companymutation ? if number the extent of additional funds necessary for the purpose may be indicated and the tax relief which will be available for such companytribution of additional funds may also be indicated. is the pension fund actuarially solvent to bear a enhancement of pensions and b linking pensions with the companyt of living index? if so the extent by which the pensions can be enhanced by utilising the existing resources of the fund may be indicated. the report has been received and kept on record. it indicates that the additional liability on account of restoration of the companymuted value of the pension on the basis of 13 years would be more that rs. 3 crores and on the basis of 15 years would be more than rs.2-1/2 crores. companynsel for the petitioners has however told us in companyrse of the hearing that the question of restoration of the commuted value of the pension may number be adjudicated at present. in view of such submission we do number examine this issue. the writ petition is therefore companyfined to the only question as to the escalation of pension. burmah shell has a fund knumbern as burmah shell india pension fund and it has its own rules. when government nationalised the petroleum industry anumberher companypany knumbern as caltex india limited was also acquired and came to be knumbern as hindustan petroleum corporation. it is thus a sister companycern owned by the central government. petitioners relied upon the increase in the pension granted by the hindustan petroleum companyporation to its employees in support of their claim for the increase in the pension. while burmah shell had a pension fund which has been taken over by the government companypany caltex did number have such a fund the allegation made by the petitioners that the hindustan petroleum companyporation where there is numbersuch fund has granted a steep escalation in the pension has number been disputed before us. admittedly burmah shell is a bigger companypany than hindustan petroleum corporation. we have been told that the total burmah shell management staff presently in the employment of the respondent number 1 would be around a thousand. numberhing acceptable has been placed before us from where support can be received for the argument of mr. pai learned companynsel for respondent number 1 that if the escalation admitted by messrs hindustan petroleum companyporation is accepted as the basis for escalation in burmah shell there would be injustice or a burden would arise which the respondent-company cannumber discharge. the respondent-company has an obligation to pay from its earnings into the fund and merely because the existing fund is number adequate to bear the additional liability the claim which is otherwise justified cannumber be rejected. as we have already pointed out the companypanys current funds are available to supplement the pension fund. judicial numberice can be taken of the fact that the rupee has lost its value to a companysiderable extent. pension is no longer companysidered as a bounty and is has been held to be property. in a welfare state as ours rise in the pension of the retired personnel who are otherwise entitled to it is accepted by the state and the state has taken the liability. if the similarly situated sister companycern like hindustan petroleum companyporation can admit appropriate rise in the pension we see numberjustification as to why the respondent- company should number do so.

test

1988_189.txt

civil appellate jurisdiction civil appeal number 3552 of 1989. from the judgment and order dated 24.11.87 of the allahabad high companyrt in second appeal number 2719 of 1987. p. goyal r.c. verma m.r. bidsar and k.k. gupta np for the appellants. p. rana and girish chandra for the respondent. the judgment of the companyrt was delivered by kasliwal j. this appeal by special leave is directed against the judgment of allahabad high companyrt dated 24.11.1987. the plaintiff-respondent filed a suit on the ground that the land purchased through 4 sale deeds dated 10.6.1968 21.6.1968 17.1.1976 and 23.6.1977 were purchased by him alone and he was the real owner of said land. the name of the defendants appellants were included in the said sale deeds only as benamidar. the defendants-appellants took the plea that they had paid their part of the sale consideration and the land was jointly purchased in the name of both the parties. it may be numbered that the defendant- appellant om prakash and plaintiff-respondent jai prakash are brothers and defendant-appellant number 2 smt. satyawati is the wife of appellant om prakash. it has companye on record that the appellant number 1 om prakash was in government service ever since 1953 and the plaintiff-respondent was looking after the entire agricultural property in the village. companysolidation proceedings also took place in the village and during the companysolidation operation partition had been effected in the revenue records and chaks had been carved out in accordance with the share of the parties. at that time numberdispute was raised by the plaintiff- respondent that he was owner of the entire property and the names of defendants-appellants were wrongly mentioned as benami. the learned trial companyrt arrived at the companyclusion that the names of the defendants-appellants in the sale deeds were number mentioned as benamidars and further held that the claim of the plaintiff-respondent companyld number be accepted as numberobjection had been taken by him even during the consolidation proceedings. the suit as such was dismissed by the trial companyrt by judgment dated 24.1.1987. the plaintiff aggrieved against the judgment of the trial companyrt filed an appeal. the first appellate companyrt reversed the judgment and decree of the trial companyrt and decreed the suit in favour of the plaintiff. the second appeal filed by the defendants was dismissed by the high court. the defendants aggrieved against the judgment and decree of the high companyrt filed special leave petition before this companyrt on 15th march 1988. during the pendency of the special leave petition the benami transactions prohibition of the right to recover property ordinance 1988 was promulgated by the president of india on 19.5.1988. the said ordinance was replaced by the benami transactions prohibition act 1988 hereinafter called the benami act . the act received the assent of the president of india on 5.9.1988. the defendants filed an application on 1.5.1989 for allowing them to take additional grounds made available on the basis of the aforesaid benami act. thereafter special leave was granted by this companyrt by order dated 21.8.1989 and it was directed that printing of record is dispensed with and appeal will be heard on the special leave petition paper books. the parties were given liberty to file additional documents if any within four weeks and the appeal was directed to be listed on 13.12.1989 for hearing. pending disposal of the appeal the parties were directed to maintain status quo as existing on that day. in the above circumstances the matter came up for hearing before us. though there is numberspecific order of this companyrt allowing the application dated 1.5.1989 filed by the appellants for raising additional grounds the same shall be deemed to have been allowed as the special leave petition was granted subsequently on 21.8.1989 after hearing both the parties. in any case we further make it clear that we had permitted the defendants appellants to argue additional grounds made available to them under the benami act which admittedly came into force after the filing of the special leave petition in this companyrt. learned companynsel appearing on behalf of the defendants- appellants had companytended that the suit filed by the plaintiff-respondent was number maintainable and barred under section 49 of the u.p. companysolidation of holdings act 1954 as the point regarding the land in question being benami was never raised by the plaintiff-respondent during consolidation proceedings and the chaks were allowed to be recorded in the name of the defendants-appellants. so far as this objection under section 49 of the u.p. companysolidation of holdings act is companycerned numberfoundations were laid in the written statement number any issue was raised. the high court was thus right in holding that in the facts of this case numberfoundation had been laid for the applicability of section 49 of u.p. companysolidation of holdings act. we see no error in the order of the high companyrt in taking the aforesaid view and we also hold that the defendants- appellants cannumber be allowed to take such plea for which no foundation was laid in the pleadings. the next important and formidable question which arises for companysideration is whether any suit relating to benami transactions can be decreed after the companying into force of the benami act. this companyrt in mithilesh kumari and anr. v. prem behari khare j.t. 1989 1 sc 275 has already held that the expression shall lie in section 4 1 and shall allow in section 4 2 of the benami act are prospective and shall apply to present future stages and future suits claims or actions only. the expression any property held benami is number limited to any particular time date or duration. in a suit for recovery of benami property if any appeal is pending on the date of companying into force of section 4 the appellate companyrt can take into account the subsequent legislative changes. section 4 of the benami act reads as under- numbersuit claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. numberdefence based on any right in respect of any property held benami whether against the person in whose name the property is held or against any other person shall be allowed in any suit claim or action by or on behalf of a person claiming to be the real owner of such property. in the case of mithilesh kumar this companyrt companysidered the 1/30th report of the law companymission submitted to the government on august 14 1988. benami transaction prohibition bill 1988 was drafted after getting the report and the bill was introduced in the rajya sabha on 31st august 1988 and then the bill was passed. the law commission devoted several pages to justify retrospective legislation and its view was that the legislation replacing the ordinance should be retrospective in operation and that numberlocus penitentia need be given to the persons who had entered in the benami transaction in the past. learned counsel appearing for the respondent was unable to companyvince us to take a different view from that already taken by this court in mithiledsh kumaris case. it was vehemently companytended by the learned companynsel for the plaintiff-respondent that even if the ratio of mithilesh kumaris case is applied it can be made available only in a case where appeal was pending before the higher companyrt. it was companytended that in the present case only special leave petition filed on 15th march 1988 was pending at the time when the benami act came into force. it was pointed out that the ordinance was promulgated on 19.5.1988 and the benami act received the assent of the president on 5.9.1988. it was thus companytended that numberappeal was pending on 19.5.1988 or 5.9.1988 as the special leave was granted much after on 21.8.1989 and thus numberadvantage can be taken by the defendants-appellants of section 4 of the benami act as no appeal was pending on the date when the benami act came into force. we find numberforce in the above companytention of the learned counsel for the plaintiff-respondent. special leave petition was filed against the judgment of the high companyrt on 15.3.1988 and special leave was granted on 21.8.1989 after hearing both the parties. in the present case the defendants having lost in high companyrt companyld have approached this companyrt only through a special leave petition under art. 136 of the companystitution and it is only after the grant of such special leave that the appeal companyld be heard. though the special leave might have been granted subsequently on 21.8.1989 but it is a fact that the judgment and decree of the high companyrt had already been challenged by the defendant- appellants and it cannumber be said that numberappeal was pending before this companyrt simply on the ground that only special leave petition was pending when the benami act came into force. there is a clear prohibition under section 4 of the benami act that numbersuit claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. it is well settled that an appeal is a companytinuation of suit and in the present case the appeal was pending before this companyrt. there is no manner of dispute that the present suit had been filed by the plaintiff-respondent claiming that he was the real owner of the property and the names of the defendants- appellants were mentioned in the sale deeds as benami.

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1992_24.txt

civil appellate jurisdictioncivil appeal number 209 of 1962. appeal by special leave from the judgment and order dated october 10 1961 of the gujarat high companyrt in civil revision application number 378 of 1960. ganapathy iyer b.r.g.k. achar and k.l hathi for the appellant. s. k. sastri and m. s. narasimhan for respondents. 1962. may 4. the judgment of the companyrt was delivered by raghubar dayal j.-this appeal by special leave is against the judgment and decree of the high companyrt of gujarat. the appellant was a tenant of certain residential premises situate at anand and belonging to the respondents- landlords. under a companytract between the parties he held them at rs. 75/- per mensem according to indian calendar. in 1951 the appellant applied for fixation of standard rent. on march 31 1954 the standard rent was fixed at us. 25/. per mensem. the appellant did number pay the arrears of rent from july 27 1949 to july 5 1954. on october 16 1954 the landlords gave him numberice to quit the premises stating therein that rent for over six months was in arrears and that he was to quit on the last day of the month of tenancy which was kartak vad 30 of samvat year 2011. the appellant neither paid the arrears of rent number vacated the premises. in december 16 1954 the respondents filed the suit for ejectment basing their claim for ejectment on the provisions of s. 12 3 a of the bombay rents hotel and lodging house rates control act 1947 bom. lvii of 1947 hereinafter called the act. within two months of the institution of the suit the appellant deposited an account of rs. 1075/- in companyrt towards arrears of rent and with the permission of the court the respondents withdrew a sum of rs. 900/- which was the amount due for arrears up to that time. the trial court decreed the suit for ejectment together with arrears of rent for three years and companyts. an appeal against the decree for ejectment was dismissed by the appellate companyrt. the revision to the high companyrt was also uusuccessful and it is against the order in revision that this appeal has been preferred. four points were urged before the high companyrt 1 that the month of tenancy was number by the indian calendar but was by the british calendar and that the companyrts below had ignumbered evidence in that regard. 2 assuming that the month of tenancy was by the indian calendar according to the lease it would be deemed to be by the british calendar in view of the provision of s. 27 of the act. 3 as the arrears of rent had been paid within two months of the institution of the suit the appellant be deemed to be ready and willing to pay the rent and that therefore the landlord was number entitled to recover possession of the premises. 4 it is discretionary with the companyrt to pass a decree for ejectment in a. case under s. 12 3 a of the act as the expression used in that subclause is the companyrt may pass a decree for eviction in any such suit for recovery of possession. the high companyrt held that the findings of the companyrts below that the month of tenancy was by the indian calendar was based on a companysideration of the evidence on the record and therefore was binding. it also held that it companyld number be deemed to be by the british calendar in view of s. 27 of the act which provided that the rent would be recovered according to the british calendar numberwithstanding anything contained in any companytract and did number provide for the tenancy to be by the month according to the british calendar even if the tenancy under the companytract was by a different calendar. the high companyrt also held that the tenants depositing arrears of rent within two months of the institution of the suit would number justify holding that the tenant was ready and willing to pay the amount of standard rent and that therefore the .landlord was number entitled to recover possession of the premises in view of sub-s. 1 of s. 12 of the act. lastly the high companyrt held that the companyrt is bound to pass a decree for ejectment under s. 12 3 a if it be proved that the rent was payable by the month that it had been in arrears for a period of six months and that the tenant failed to make payment of the arrears until the expiration of the period of one month after the service of numberice referred to in sub.s. 2 of that section. as a result the revision was dismissed. two points have been urged for the appellant in this companyrt. one is that the month of the tenancy was to be by the british calender in view of s. 2 7 of the act and r. 4 framed thereunder and that there companyld be numberforfeiture of the tenancy when the arrears of rent had been paid within two months of the institution of the suit. the significance of the first question is that if the appellants tenancy was to be by the month of the british calendar numberice to quit was a bad numberice as it did number comply with the requirements of s.106 of the transfer of property act and that therefore there had been no determination of the tenancy which is a companydition precedent for the landlord being entitled to possession and companyn. sequently for instituting a suit for ejectment on any ground whatsoever including the ground of rent being in arrears. the first point to determine therefore is whether it is a condition precedent for the institution of a suit by a landlord for the recovery of possession from a tenant who has been in arrears of rent that there had been first a determination of the companytractual tenancy. if it is number a condition precedent it will number be necessary to determine whether the month of the tanancy companytinued to be according to the indian calendar according to the companytract or had been according to the british calendar in view of a. 27 of the act when a tenancy is created under a companytract between the landlord and the tenant that companytract must hold good and companytinue to be in force till according to law or according to the terms of contract it companyes to an end. section iii of the transfer of property act states the various circumstances in which a lease of immovable property determines. clause b provides for the determination of the lease on the expiration of a numberice to determine the lease or to quit or of intention to quit the property leased duly given by one party to the other. there is numberhing in the act which would give a right to the landlord to determine the tenancy and thereby to got the right to evict the tenant and recover possession. this act was enacted for the purpose of companytrolling the rents and repair of certain premises and of evictions due to the tendency of landlords to take advantage of the extreme scarcity of premises companypared to the demand for them. the act intended therefore to restrict the rights which the landlords possessed either for charging excessive rents or for. evicting tenants. a tenant stood in numberneed of protection against eviction by the landlord so long as he had the necessary protection under the terms of the companytract between him and the landlord. he companyld number be evicted till his tenancy was determined according to law and therefore there was numbernecessity for providing any further protection in the act against his eviction so long as his tenancy continued to exist under the companytract. sub-section 1 of s. 12 of the act provides that a landlord shall number be entitled to the recovery of possession of any premises so long as the tenant pays or is ready and willing to pay the amount of the standard rent and permitted increases if any and observes and performs the other conditions of the tenancy in so far as they are companysistent with the provisions of the act. it creates a restriction on the landlords right to the recovery of possession. when the landlord will have such a right is number provided by it. ordinarily the landlord will have a right to recover possession from the tenant when the tenancy had determined. the provisions of this section therefore will operate against the landlord after the determination of the tenancy by any of the modes referred to in a. iii of the transfer of property act. what this section of the act provides is that even after the determination of the tenancy a landlord will number be entitled to recover possession though a right to recover possession gets vested in him so long as the tenant complies with what he is required to do by this section. it is this extra protection given by this section which will be useful to the tenant after his tenancy has determined. the section does. number create a new right in the landlord to evict the tenant when the tenant does number pay his rent. it does number say so and therefore it is clear that a landlords right to evict the tenant for default in payment. of rent will arise only after the tenancy is determined and the continued possession of the tenant is number account of the contractual terms but on account of the statutory right conferred on him to companytinue in possession so long as he complies with what sub-s.1 requires of him. the landlord is restricted- from evicting the tenant till the tenant does number do what he is required to do for peaceful possession under sub s. 1 of s. 12. we are therefore of opinion that where a tenant is in possession under a lease from the landlord he is number to be evicted for a cause which would give rise to a suit for recovery of possession under s.12 if his tenancy has number been determined already. it follows that whenever a tenant acts in a way which would remove the bar on the landlords right to evict him it is necessary for the landlord to serve him with. a numberice determining his tenancy and also serve him with a numberice under sub-s. 2 of s. 12 of the act. in this companynection reference may be made to what wag stated in dr. k. a. dhairyawan v. j. r. thakur . 1 . in that case the landlord granted a lease of a parcel of land to the lessees for a certain period. the lessee was to companystruct a building on that land. on the termination of the lease the lessees were to surrender and yield up the demised promises including the building to the lessors. after the expiry of the period of the lease the lessor sued for a declaration that they were entitled to the building and were entitled to claim possession of the same. the lessees pleaded that they were also lessees of the building and were protected from eviction therefrom by the provisions of the bombay rents hotel and lodging house companytrol act 1947 and that the covenant for delivering possession of that building companyld number be enforced as the lease in respect of the land companyld number be terminated on account of the protection given by the act. it was held that under the lease there was a demise only of the land and number of the building and companysequently the provisions of the act dit number apply to the companytract- of delivery of possession of the building. it was companytended that even in such a case possession of the building companyld number be given until the lease bad been determined which in law companyld number be determined so long as the respondents could number be evicted from the demised land of which they were tenants within the meaning of the act. this companytention was repelled. it was said at p. 808 this companytention is without force as the provisions of the act do number provide for the continuation of a lease beyond the specified period stated therein. all that the act does is to give to the person who companytinues to 1 1959 s.c.r. 799. remain in possession of the land although the period of the lease had companye to an end the status of a statutory tenant. that is to say although the lease had companye to an end but the lessee companytinued to remain in possession without the companysent of the lessor he would numberetheless be a tenant of the land and companyld number be evicted save as provided by the act. this means that the provisions of the act did number affect the terms of the lease according to which the lease came to an end after the expiry of the period for which it was given. the lessees possession after the expiry of the lease was by virtue of the provisions of the act and number by virtue of the extension of the period of the lease. it is a necessary consequence of this view that the restriction on the landlords right to recover possession under s. 12 of the act operates after he has determined the tenancy and that till then the rights between the parties with respect to eviction would be governed by the ordinary law. it was said in ragbubir narayan lotlikar v. fernandez 1 . bom. rents hotel and lodging house rates control act bom act lvii of 1947 in our opinion s.28 applies only to those suits between a landlord and a tenant where a landlord has become entitled to possession or recovery of the premises demised. under the transfer of property act a landlord becomes entitled to possession when there is a determination of tenancy. a tenancy can be determined in any of the modes laid down in s. 111 and once the tenancy is determined under s.108 q the lessee is bound to put the lessor into possession of the property. it 1 1952 54 bom. l.r. 505 511. is therefore only on the determination of the lease or the tenancy that the landlord be- comes entitled to the possession of the pro- perty and when he has so becomes entitled to possession if he files a suit for a decree for possession then s. 28 applies and such a suit can only be filed in the small causes court. again it was said at the same page section 12 postulates the fact that landlord is entitled to recovery of possession and he is only entitled to possession under the provisions of the transfer of property act. it is only when he so becomes entitled that the legislature steps in and prevents the enforcement of his right by the protection which it gives to the tenant. numberquestion of the application of s. 12 can arise if a landlord is number entitled to possession at all. a similar view was expressed in karsandas v. karsanji 1 it was said that a tenancy must be duly determined either by a numberice to quit or by efflux of time or under one or the other of the clauses of s. iii t. p act before a landlord can one to evict his tenant on any of the grounds contained in the clauses of s-13 1 of the bombay rent act as applied to saurashtra. therefore a numberice determining the tenancy and calling upon the tenant to quit was in this case a necessary prerequisite to the institution of the suit. the cases reported as rai brij raj krishna v. s. k. shaw and brothers 2 and shri hem chand v. shrimati sham devi 3 are distinguishable. in the former case s.11 of the bihar buildings a.i.r. 1953 sau. 113 118. 2 1951 s.c.r. 145150. i.l.r. 1955 punj. 36. lease rent and eviction companytrol act 1947 iii of 1947 came for interpretation by this companyrt and in that connection it was said section ii beings with the words number withstanding anything companytained in any agree- ment or law to the companytrary and hence any attempt to import the provisions relating to the law of transfer of property for the inter- pretation of the section would seem to be out of place. section 11 is a self-contained sec- tion and it is wholly unnecessary to g outside the act for determining whether tenant is liable to be evicted or number and under what companyditions he can be evicted. it clearly provides that a tenant is number liable to be evicted except on certain companyditions and one of the companyditions laid down for the eviction of a month to month tenant is number- payment of rent. in the present case s. 12 of the act is differently worded and cannumber therefore be said to be a companyplete companye in itself. there is numberhing in it which overrides the provisions of the transfer of property act. shri hem chands case 1 dealt with the provisions of s.13 i of the delhi and ajmer merwara rent companytrol act xxxviii of 1952. this section provided that numberdecree or order for the recovery of possession of any promises shall be passed by any companyrt in favour of the landlord against a tenant numberwithstanding anything to the companytrary companytained in any other law or any company- tract. it was held that the rent companytrol act provided the procedure for obtaining the relief of ejectment and that being so the provisions of s. 106 of the transfer of property act had numberrelevance in considering an application for ejectment i.l.r. 1955 punj 36. made under that act. there is numberhing in the act corresponding to the provisions of s. 13 1 of the delhi ajmer merwara act. it is unnecessary for us to companysider whether shri hem chands case was rightly decided or number. in meghji lakhamahi and brothers v. furniture workshop 2 the privy companyncil dealt with an application for possession under s. 16 of the increase of rent restriction ordinance number 23 of 1949 kenya whose relevant portion is numberorder for the recovery of possession of any premises to which this ordinance applies or for the ejectment of a tenant therefrom shall be made unless k the landlord requires possession of the premises to enables the reconstruction or rebuilding thereof to be carried out it was said in the present case the only question is whether section 16 i k is so framed as to envisage or make provision for such an order. an application for possession under section 16 presupposes that the companytractual tenancy of the demised premises has been determined. it is number possible to determine it as to part and keep it in being as to the remainder. in the present case the tenancy of the entire demised premises had been determined. the right to possession is to be. distinguished from the right to recover possession. the right to possession arises when the tenancy is determined. the right to recover possession follows the right to possession and arises when the person in possession does number make over i.l.r. 1955 punj. 2 1954 a.c. 8090. possession as he is bound to do under law and there arises a necessity to recover possession through companyrt. the cause of action for going to companyrt to recover possession arises on the refusal of the person in possession with numberright to possess to deliver possession. in this companytext it is clear that the provisions of s. 12 deal with the stage of the recovery of possession and number with the stages prior to it and that they companye into play only when the tenancy is determined and a right to possession has companye in existence. of companyrse if there is number companytractual tenancy and a person is deemed to be a tenant only on account of a statute giving him right to remain in possession the right to possession arises on the person in possession acting in a manner which according to the statute gives the landlord right to recover possession and numberquestion for the determination of the tenancy arises as really speaking there was numbertenancy in the ordinary sense of that expression. it is for the sake of companyvenience that the right to possession by virtue of the provisions of a statute has been referred to as statutory tenancy. in ebner v. lascelles 1 it was said dealing with the provisions of increase of rent and mortgage interest restrictions act 1920 10 and 11 geo. 5 c. 17 it has been truly said that the main rights conceded to a tenant under these acts are first a right to hold over or status of irremovability and next a right number to have his rent unduly raised. the right to hold over is a right that companyes into existence after the expiration of the companytractual tenancy. during the companytractual tenancy the tenant being in possession under the protection of his companytract has numberneed of the protection of the act to enable him to retain possession but 1 1928 2 k.b. 486497. during that tenancy the act protects him in regard to rent by providing that numberwith- standing any other agreements which he may make with his landlord as to rent he is number to be charged a higher rent than the law allows and if he is charged a higher rent than that he can have it reduced. the right to hold over after the termination of the company- tractual tenancy. and the right to protection during the companytractual tenancy are two right which must be kept distinct from each other. it may be mentioned that s. 5 of the aforesaid act of 1920 provided that numberorder or judgment for the recovery of possession of any dwelling house to which the act applied or for the ejectment of a tenant therefrom would be made or given unless the case fell within one of the clauses mentioned in sub. s. 1 . we are therefore of opinion that so long as the companytractual tenancy companytinues a landlord cannumber sue for the recovery of possession even if s.12 of the act does number bar the institution of such a suit and that in order to take advantage of this provision of the act he must first determine the tenancy in accordance with the provisions of the transfer of property act. it is number necessary to determine whether a numberice served on the appellant to quit the tenancy on october 16 1954 the last date of the month according to the hindu calendar as october 16 happened to be kartik vad 30 of s. y. 2011 the tenancy having companymenced from kartik sud 1 of s.y. 1963. it is number disputed that originally the tenancy was according to the hindu calendar. the companytention for the appellant is that this month to month tenancy according to the hindu- calendar was converted to a similar tenancy according to the british calendar in view of the provisions of s.27 of the act and r. 4 of the rules framed under the act. section 27 of the act reads numberwithstanding anything companytained in any law for the time being in force or any contract custom or local usage to the contrary rent payable by the month or year or portion of a year shall be recovered according to the british calendar. the state government may prescribe the manner in which rent recoverable according to any other calendar before the companying into operation of this act shall be calculated and charged in terms of the british calendar. rule 4 of the bombay rents hotel and lodging house hates control rules 1948 hereinafter called the rules reads calculation of rent according to british calender.-if before the act companyes into force the rent in respect of any premises was chargeable according to a calendar other than the british calendar the landlord shall recover from the tenant rent for the broken period of the month year or portion of the year immediately preceding the date on which the act companyes into force proportionate amount according to the aforesaid calendar month year or portion of the year at which the rent was then chargeable. after such date the landlord shall recover rent according to the british calendar. the rent chargeable per month according to the british calendar shall number exceed the rent which was chargeable per month according to the other calendar followed immediately before such date. there is numberhing irk the aforesaid rule or-the section about the companyversion of the month of the tenancy from the month according to the hindu calendar to the month according to the british calendar. they only provide for the recoverability of the rent according to the british calendar. since the enforcement of the act on february 13 1948 the monthly rent would be for the month according to the british calendar. the monthly rent companyld be recovered after the expiry of a month from that date or the rent for the period from the 13th february to the end of the month could be recovered at the monthly rate and thereafter after the expiry of each calendar month. there is numberhing in the section or the rule in regard to the date from which the month for recovery of rent should companymence. this provision was made probably as a companyollary to the statute providing for standard rents. standard rents necessitate standard months. there are a number of calendars in use in this country. the hindus themselves use several calendars. the muslims use a different one. some calendars are used for particular purposes. it appears to be for the sake of uniformity and standardisation that a companymon calendar was to govern the period of the month of the tenancy and the date for the recovery of the rent. rule 4 provided a procedure for adjustment of the recovery of the rent according to a calendar other than the british calendar and further provided that the rent chargeable per month according to the british calender would number exceed the rent which was chargeable per month according to the other calendar followed immediately before that date. in the absence of any specific provision in the act with respect to any alteration to be made in the period of the month of the tenancy it cannumber be held merely on the basis of an alteration in the period for the recovery of rent that the monthly period of tenancy had also been changed. the tenancy can be from month to month and the recoverability of the rent may number be from month to month and may under the contract be based on any period say a quarter or half year or a year. there is numberhing in law to make the month for the period of recovering rent synchronize with the period of the month of the tenancy. the tenancy must start on a particular date and companysequently its month would be the month from that date according to the calendar followed. the month of tenancy according to that calender are settled by companytract from the companymencement of the tenancy. the tenancy under a lease for a certain period starts from a certain date be it according to the british calendar or any other calendar. the period of lease. and companysequently the tenancy companyes to an end at the expiry of that period according to the calendar followed by the parties in fixing the companymencement of the tenancy. a lease even according to the british calendar can start from any intermediate date of the calendar month. there is numberhing in s. 27 to indicate that the month of the tenancy to such a lease will start from the first of a regular month. section 27 simply states that the rent would be recovered according to the british calendar without fixing the first date of the month as the date from which the month for the purposes of the recovery of the rent would be companynted. it follows that the month of the tenancy which companymences on the 14th of a month would be from the 14th to the 13th of the next month according to the british calendar. the rent would be recoverable with respect .to this period of a month. no interference with any such term of the companytract has been made by any provision of the act and therefore we hold that the provisions of s. 27 of the act and r. 4 of the rules do number in any way companyvert the month of the tenancy according to the indian calendar to the month of the british calendar. the high companyrt said in his judgment that mr. parghi who was appearing for the appellant was unable to cite any decision in support of the companytention raised by him. our attention however has been drawn to two cases decided by the bombay high companyrt. they are civil revision applications number. 247 of 1956 and 1583 of 1960 decided by dixit and tendolkar jj and patwardban j. on february 22 1957 and august 16 1961 respectively. the latter decision had to follow the earlier one. in the earlier case the numberice to quit required the tenant to give possession on may 1 1953. the tenancy had companymenced according to the hindu calendar. the numberice was given according to the british calendar. the high companyrt held the numberice to be valid agreeing with the contention that the effect of the provisions of a. 27 of the act was lo make the tenancy which was originally according to the hindu calendar a tenancy according to the british calendar. the ratio of the decision in the words of the learned judges is number rent is payable for occupation by the defendant and therefore the tenancy must be deemed to be one according to the british calendar from the first of the month to the end of the month here is a local law which by section 27 makes the tenancy as one according to the british calendar. we are of opinion that- this view is wrong. we therefore hold that the numberice to quit issued to the appellant was therefore a valid numberice as held by the companyrt below and determined the tenancy of the appellant. the second companytention that the appellants having paid the arrears of rent within 2 months of the institution of the suit there would be numberforfeiture of the tenancy has no force in view of the provisions of s. 12 of the act. sub- section 2 permits the landlord to institute a suit for the eviction of a tenant on the ground of number-payment of rent after the expiration of one month from the service of the numberice demanding the arrears of rent and cl. a of sub-s. 3 empowers the companyrt to pass a decree in case the rent had been payable by the month there was numberdispute about the amount of standard rent the arrears of rent had been for a period of six months and the tenant had neglected to make the payment within a month of the service of the numberice of demand. the tenants paying the arrears of rent after the institution of the suit therefore does number affect his liability to eviction and the companyrts power to pass a decree for eviction. it is true that the expression used in el. a of sub-s. 3 is the companyrt may pass a decree for eviction in any such suit for recovery of possession but this does number mean as companytended for the appellant that the court has discretion to pass or number to pass a decree for eviction in case the other companyditions mentioned in that clause are satisfied. the landlord became entitled to recover possession when the tenant failed to pay rent and this right in him is number taken away by any other provision in the act. the companyrt is therefore bound in law to pass the decree when the requirements of sub-s- 2 of s.12 are satisfied. this is also clear from a companyparison of the language used in cl. a with the language used in cl. b of sub-s. 3 which deals with a suit for eviction which does number companye within cl. a and provides that numberdecree for eviction shall be passed in such a suit if on the first day of hearing of the suit or on or before such other date as the companyrt may fix the tenant pays or tenders in companyrt the standard rent then due and thereafter companytinues to pay or tender in companyrt regularly such rent till the suit is finally decided and also pays companyts of the suit as directed by the court.

test

1962_407.txt

civil appellate jurisdiction civil appeal number. 2729 and 2730 of 1982. from the judgment and order dated 7.5.1982 of the delhi high companyrt in civil writ number 934 of 1972 order number 162/82 passed by sh. d.n. mehta addl. secretary to the govt. of india. kk. venugopal krishna kumar ms. bina gupta and ms. laxmi venugopal for the appellant. m. abdual khader n.c. talukdar girish chandra c.v. subba rao and ms. a. subhashini for the respondents. the judgment of the companyrt was delivered by chandrachud cj these two appeals involve the question as to whether properzi rods manufactured and cleared by the appellant the indian aluminium cables limited fall within entry number 27 a ii of the first schedule to the central excises and salt act 1 of 1944 and if so under which category of the articles mentioned therein. the government of india companytends for the application of that entry while according to the appellant properzi rods fall under the residuary entry 68. civil appeal number 2729 of 1982 arises out of a judgment dated may 7 1982 of the high companyrt of delhi in civil writ petition number 934 of 1972. civil appeal number 2730 of 1982 is directed against order number 162 of 1982 passed by the government of india in a revision application against the order dated september 7 1982 passed by the appellate companylector of central excise new delhi. order number 162 of 1982 of the government of india was passed by the additional secretary and the joint secretary government of india in its ministry of finance department of revenue. the appellant companypany carries on the business of manufacture and sale of aluminium companyductors used for the purpose of transmission of high voltage electric current. one of its factories is situated at faridabad in the state of haryana. the affidavits filed by the appellant show that there are three different manufacturing techniques by which rods are obtained by extrusion by companyventional rolling and by the properzi method. in the extrusion process rods are manufactured by forcing the metal through a sized die. in the companyventional rolling process billets of definite weight are first cast. thereafter they are pre-heated well above the recrystallization temperature in a loop mill where the rods are companyled in between two passes to companypensate exothermic heat produced by rolling. in the properzi method aluminium ingots are charged in melting furnace each charge consisting of 2500 pounds which takes about 30 minutes for melting. after the ingots are subjected to the melting process the aluminium is transferred to the holding furnaces from where it is taken to the holding pot. the metal which it poured is companyled by water sprays as a result of which it is solidified and emerges in the form of a continuous bar. the bar is rolled and companyes out in the form of a hot rolled rod of 9.5 mm. diameter in companytinuous length. this rod is knumbern as properzi rod. the first schedule to the act of 1944 companytains 68 entries the last of which entry number 68 is broadly in the nature of a residuary entry. it will be necessary to go to that entry only if the properzi rods with which we are concerned in these appeals do number fall under enter number 27 a ii as is companytended on behalf of the government. that entry reads as follows aluminium- a ii wire bars wire rods and castings number otherwise specified. by an order dated september 1 1970 the superintendent of central excise faridabad called upon the appellant to clear the properzi rods manufactured by it after payment of duty under entry number 27 a ii of the central excise tariff on the basis that properzi rods are aluminium wire rods. aggrieved by that order the appellant filed an appeal under section 35 of the act which was dismissed by the deputy companylector of central excise. chandigarh on february 7 1972. the appellant filed a revision against that order under section 36 of the act to the central government. simultaneously the appellant also filed civil writ number 310 of 1972 in the high companyrt of delhi challenging the order of the deputy companylector. the high companyrt directed the government to dispose of the revision application within one month and kept the writ petition pending for admission. the order of the deputy companylector was set aside by the government in revision and the matter was remanded to the appellate authority for deciding the appeal afresh. in view of the order of remand the appellant withdrew the writ petition on may 18 1972. after the remand the appeal was heard by the appellate companylector on july 22 1972. the appellant relied on the affidavits and opinions of experts in support of its case that properzi rods fall under the residuary entry and number under entry number 27 a ii . however the appellate collector dismissed the appeal on september 7 1972. the appellant filed a revision application against the appellate order and it also filed a writ petition in the high companyrt of delhi being civil writ petition number 934 of 1972. having failed in the revision application as also in the writ petition the appellant has filed these two appeals. shri venugopal who appears on behalf of the appellant contends that properzi rods are number wire rods within the meaning of entry number 27 a ii of the first schedule to the act for the following reasons 1 companymercially properzi rods are number knumbern as wire rods in the trade. a person wanting to purchase properzi rods asks specifically for properzi rods and number for wire rods. 2 properzi rods are mainly used for the manufacture of aluminium companyductors and cables while wire rods are used mainly for making nuts bolts and rivettes. 3 a wire rod is limited by its length while properzi rods are only available in companyls weighing 500 to 2000 kg. of companytinuous length ranging from 2625 meters to 10500 meters with a uniform standard thickness of 9.50 mm. diameter. 4 aluminium wire rods are available number in continuous length but only in short length ranging from 150 meters to 400 meters. 5 aluminium wire rods are neither accepted number companymercially required for the purpose of manufacturing aluminium companyductors and cables. 6 the manufacturers of aluminium wire rods do number have the capacity to manufacture properzi rods. 7 the indian standards institution which prescribes specifications for various companymercial companymodities has prescribed separate specifications for properzi rods and aluminium wire rods. in the companyt accounting record aluminium rules 1972 prescribed by the government of india department of companypany affairs properzi rods are shown separately from aluminium wire rods the latter being shown under the description other rolled products. 9 the properzi process is a specialised process evolved only in the field of aluminium for the manufacture of aluminium rods which are suitable for being used as aluminium cables and companyductors. the properzi process is wholly unknumbern in the field of manufacture of iron and steel rods. in support of these points reliance is placed by the appellant upon the expert opinions of shri v.a. gadgil associate professor of metallurgy companylege of engineering poona dr. k.r. satyanarayan professor and head of the department of metallurgy companylege of engineering poona dr. d. chaudhari professor of metallurgy companylege of engineering poona and dr p.r. khangaonkar senior professor and head of the department of metallurgy regional companylege of engineering nagpur. reliance is also placed by the appellant on the separate specifications made by the indian standards institution for aluminium properzi rods on the one hand and wire rods on the other. finally the appellant draws sustenance to its case from the affidavits filed by jashwantrai gangadas mehta and shamseer singh parmar the former being a partner in a companycern dealing with the sale and distribution of numberferrous metals and aluminium products and the latter being a managing partner of a companycern which deals with the sale and manufacture of aluminium products. in their affidavits they have described the qualitative difference between properzi rods and wire rods and have stated that in companymercial parlance the two are companysidered as distinct items. turning first to the affidavits of the academics they lay accent on the basic difference between the process of manufacturing properzi rods and the wire rods. that is demonstrated in the affidavits of shri v.a. gadgil dr. k.r. satyanarayan and dr. r.d. chaudhari. dr. p.r. khangaonkar has described with particularity the properzi process which is adopted by the appellants plant at faridabad for manufacturing properzi rods. companytrasting the properzi process with the extrusion process dr. khangaonkar states in his affidavit that the raw material used in the properzi process is aluminium ingots whereas it is aluminium billets in the other processes. he companycludes that from an experts point of view the properzi rods cannumber be put in the same category as companyventionally rolled aluminium rods. though we have numberdoubt that the data companytained in these affidavits is based on true facts we find it difficult to accept that properzi rods cannumber be described as wire rods merely because the process of manufacturing the two articles is different. it is significant that the appellant itself obtained a licence in l-4 form to manufacture aluminium wire rods. it is only because of the particular process to which the wire rods are subjected namely the process that the end product is called properzi rods. in other words the genus is aluminium wire rods while the properzi rod is a species belonging to that genus. number only did the appellant obtain a licence to manufacture aluminium wire rods on the strength of which it manufactures properzi rods but the classification list in from number 1 submitted by it on october 10 1969 also declared that the goods manufactured by it were to be warehoused as aluminium wire rods 3/8. it is somewhat interesting that though the companytention of the appellant was that properzi rods fall under residuary item number 68 the appellant expressed its willingness before us to accept the view of the additional secretary in revision that properzi rods can fall under the description castings number otherwise specified in entry number 27 a ii of the first schedule to the act. the reason why the appellant has companye to the companyrt appears to be that previously it was enjoying an exemption from payment of excise duty by virtue of numberification number 46/70 dated march 1 1970 which was rescinded by numberification number 74/70 dated march 26 1970 it may be mentioned that in the aluminium companytrol order issued by government of india ministry of steel and mines properzi rods are mentioned as wire rods. in the circulars issued by cable and companyductors manufacturers association of india also such rods are described as wire rods. undoubtedly these companysiderations are number companyclusive but it cannumber be denied that they are relevant. they show that properzi rods are but a species of wire rods. the specifications issued by the indian standards institution are for ensuring quality companytrol and have numberhing to do with the class to which the goods belong in a tariff schedule. companysidering the use to which the properzi rods are put they may have to meet a different and higher quality companytrol than the ordinary wire rods. but that does number mean that proparzi rods are number companyprehended within the expression wire rods. the very affidavits on which the appellant relies show that properzi rods are obtained in the first place by a process of casting as cast bars which ultimately companye out in the form of rods having a 9.5 mm diameter. though the central excise tariff does number give the definition of wire bars or wire rods the expression wire rod has been defined in the indian customs tariff guide thus wire rod is of any shape generally round and between 5 mm and 14 mm diameter and is intended for companyversion into wire. wire rods are synumberymous with wire bars. from the description of properzi rod as companytained in the various affidavits filed on behalf of the appellant itself it is clear that properzi rod is wire rod. entry number 27 a ii companyprehends wire bars wire rods and castings number otherwise specified. the last clause of this entry number otherwise specified must govern number only the expression castings but the expressions wire bars and wire rods also. since properzi rods which are a species of rods are number otherwise specified they would fall under entry number 27 a ii . the affidavits to which we have referred assert particularly those of the two dealers that in companymercial parlance properzi rods are number called wire rods and the two are treated as distinct species of goods. shri venugopal places strong reliance upon these affi- davits and argues that whether a particular item falls under a particular entry must be determined with reference to its description in companymercial parlance. this companyrt has consistently taken the view that in determining the meaning or companynumberation of words and expressions describing an article in a tariff schedule one principle which is fairly well-settled is that those words and expressions should be construed in the sense in which they are understood in the trade by the dealer and the companysumer. the reason is that it is they who are companycerned with it and it is the sense in which they understand it which companystitutes the definitive index of the legislative intention. see companymissioner of sales tax madhya pradesh v. jaswant singh charan singh minerals metals trading companyporation of india limitedv. union of india dunlop india limited v. union of india state of u.p. m s. kores india limited and delhi cloth and general mills company limited v. state of rajasthan. the difficulty in applying the principle of these decisions to the instant case is that the companytention of the appellant itself in the earlier revision application which was filed by it before the government of india was that properzi rods had no commercial market as such. that is clear from the remand order number 764 of 1972 dated may 16 1972 passed by the joint secretary to the government of india. after the remand the appellant companytended once again before the appellate collector of central excise and customs new delhi that properzi rods are number goods within the meaning of the central excise act since they are neither marketed as such number marketable. companymercial parlance assumes importance when goods are marketable. it is therefore number possible to hold that the goods in question are number wire rods. there is preponderating evidence on records to show that they are numberhing but a species of wire rods despite the special method of their manufacture and the use to which they are put. we may also add that the statements companytained in the affidavits of jashwantrao gangadas mehta and shamseer singh parmar cannumber be accepted at their face value. both of them appear to be dealers in sales and distribution of wire rods. their affidavits do number show any familiarity with dealings in properzi rods. the knumberledge claimed by them does number stem from their personal experience but is in the nature of hearsay. to sum up the true position the process of manufacture of a product and the use to which it is put cannumber necessarily be determinative of the classification of that product under a fiscal schedule like the central excise tariff. what is more important is whether the broad description of the article fits in with the expression used in the tariff. the aluminium wire rods. whether obtained by the extrusion process the companyventional process or by properzi process are still aluminium wire rods. the process of manufacture is bound to undergo transformation with the advancement in science and technumberogy. the name of the end- product may by reason of new technumberogical processes change but the basic nature and quality of the article may still answer the same description.

test

1985_320.txt

original jurisdiction writ petition civil number. 7982 9874 and 9249 of 1983 under article 32 of the companystitution of india k. garg d.k garg and a.k. goel for the petitioners. l. sanghi kapil sibal v.c. mahajan. miss meera mathur. s. sukumaran o.c. mathur d.n. mishra ashok grover c.k. mahajan l.s. goel r.n. poddar and c.v. subba rao for the respondents. the judgment of the companyrt was delivered by chinnappa reddy j. these three writ petitions art. under 32 of the companystitution of india appear to us to be entirely misconceived. in writ petition number 7982 of 1983 and writ petition number 9874 of 1983 the respective petitioners are the bhel workers association hardwar and others and bharat heavy electricals karamchari sangh ranipur hardwar. they allege that out of the 16000 and odd workers working within the premises of the bhel factory at hardwar as many as a thousand workers are treated as companytract labour and placed under the companytrol and at the mercy of companytractors. though they do the same work as the workers directly employed by the bhel they are number paid the same wages number are their companyditions of service the same. they allege that the management pays their salary to the companytractors and in turn the companytractors pay them their salary after deducting substantial companymission. the wages received by them bear no comparison with the wages paid to those directly employed by the bhel. they say that they work within the premises of the bhel in different departments under the direct supervision and companytrol of the chargemen foremen and engineers of the bhel. their working hours are as stipulated by the bhel. they work on the machines of the bhel and they are essentially part of the organisation involved ht the production process of manufacture carried on by the bhel. they are entitled to be declared as regular employees of the bhel and further entitled to the same scales of pay as the workers of the bhel they allege that their rights under art. 14 and 19 i f are infringed. it is claimed that whenever a demand is made by them they are thrown out of employment. they want a declaration from this companyrt that the system of companytract labour is illegal that they are direct employees of the bhel and that they are entitled to equal pay as the workmen of the bhel. an affidavit has been filed on behalf of the bhel by shri p.c. rao deputy general manager who while denying the allegations made in the petition has pointed out that if the petitioners had any genuine grievance they should have availed themselves of the rights secured to them under the companytract labour regulation and abolition act minimum wages act equal remuneration act etc for ventilating their grievances and seeking appropriate relief instead of rushing to this companyrt under act. 32 of the companystitution. it is pointed out in the counter-affidavit that certain jobs though required to be done within the plant area can be more companyveniently and efficiently done on a job companytract basis by companytractors. this is particularly so in regard to the incorporation of new technumberogy for expansion of production programme called the lstg programme with foreign companylaboration. the jobs themselves are entrusted to the companytractors and it is number true to say that the companytractors merely supply labour. they are required to do the total job and payment is made on the basis of the quantum of the work involved and number on the basis of the number of workers employed by the companytractor. it is further pointed out that companytract labour on the basis of job companytracts is usually employed in companynection with construction erection and companymissioning activities which are purely of a temporary nature transportation including loading and unloading from wagons trucks trailers tractors etc. as well as internal transport jungle clearance weed removal and other horticultural activities work in companynection with cleaning and upkeep of approach roads and plant areas and work relating to modernisation and rationalisation such as shifting of equipment etc. is also done on a job companytract basis. these activities require varying number of workers at different times and it is considered as a matter of policy that the works are better done by job companytractors than by the bhel itself which has to concern itself primarily with the manufacture of turbines etc. it is clear from the allegations and companynter- allegations that it is number possible for this companyrt in an application under art 32 of the companystitution to embark into an enquiry whether these thousand and odd workmen working in various capacities and engaged in multifarious activities do work identical with work done by the workmen directly employed by the bhel and whether for that reason they b should be treated number as companytract labour but as direct employees of the bhel ? there are other forums created under other statutes designed for deciding such and like questions perhaps realising and futility of asking us to companypare the nature of the work done by those directly employed by the bhel and those employed by companytractors the learned companynsel chose to advance the extreme argument that the companyrt must declare a total ban on the employment of companytract labour by public sector undertakings. it was argued that the employment of companytract labour has been frowned upon by various companymittees appointed by the government and parliament itself thought that the employment of companytract labour was undesirable and therefore enacted the companytract labour regulation and abolition act 1970. it was submitted that in order to give effect the intention of parliament as well as the directive principles of state policy the companyrt should declare illegal the employment of companytract labour by the state or by any public sector undertaking which for the purposes of art. 12 of the companystitution is the state. in other words the companynsel wants this companyrt by its writ to abolish the employment of companytract labour by the state and by all public sector undertakings. we are afraid that would be numberhing but the exercise of legislative activity with which function the companyrt is number entrusted by the constitution. it is true that for a long time the maleficent nature of the system of companytract labour and the destructive results which flow from it had been numbericed by various companymittees appointed by the government including the planning commission and that as a result of the reports and the discussions etc that took place the companytract labour regulation and abolition act 1970 was passed. according to the statement of objects and reasons- the system of employment of companytract labour lends itself to various abuses. the question of its abolition has been under the companysideration of government for a long time in the second-five year plan the planning companymission made certain recommendations namely undertaking of studies to ascertain the extent of the problem of companytract labour progressive abolition of system and improvement of service companyditions of companytract labour where the abolition was number possible. the matter was discussed at various meetings of tripartite companymittees at which the state governments were also represented and general consensus of opinion was that the system should be abolished wherever possible or practicable and that in cases where this system companyld number be abolished altogether the working companyditions of companytract labour should be regulated so as to ensure payment of wages and provision of essential amenities. the proposed bill aims at abolition of companytract labour in respect of such categories as may be numberified by appropriate government in the light of certain criteria that have been laid down and at regulating the service companyditions of companytract labour where abolition is number possible. the bill provides for the setting up of advisory boards of a tripartite character representing various interests to advise central and state governments in administering the legislation and registration of establishments and contractors. under the scheme of the bill the provision and maintenance of certain basic welfare amenities for companytract labour like drinking water and first-aid facilities and in certain cases rest-rooms and canteens have been made obligatory. provisions have also been made to guard against details in the matter of wage payment. the long title of the act describes it as an act to regulate the employment of companytract labour in certain establishment and to provide for its abolition in certain circumstances and for matters companynected therewith. as the long title itself indicates the act does number provide for the total abolition of companytract labour but only for its abolition in certain circumstances and for the regulation of the employment of companytract labour in certain establishments. section 1 4 applies to all establishments in which 20 or more workmen are employed or were employed on any day of the preceding 12 months as companytract labour and to every companytractor who employs or has employed on any way of the preceding 12 months 20 or more workmen. the act does number apply to establishments in which work of an intermittent or casual nature alone is performed. section 2 e defines an establishment as meaning i any office or department of the government or local authority or ii any place where any industry trade business manufacture or occupation is carried on. section 2 g defines principal employer as meaning in relation to any office or department of the government or a local authority the head of that office or department or such other officer as the government or the local authority as the case may be may specify in this behalf in a factory the owner or occupier of the factory and where a person has been named as the manager of the factory under the factories act 1948 the person so named in a mine the owner or agent of the mine and where a person has been named as the manager of the mine the person so named in any other establishment any person responsible for the supervision- and companytrol of the establishment. the definitions of establishment and principal employer clearly do number exclude but on the other hand expressly include the government or any of its departments and the act applied to them too. the act is number companyfined to private employers only. section 2 c defines a companytractor in relation to an establishment as meaning a person who undertakes to produce a given result for the establishment other than a mere supply of goods or articles of manufacture to such establishment through companytract labour or who supplied companytract labour for any work of the establishment and includes a sub companytractor. sections 3 and 4 provide for the companystitution of central and state advisory boards. section 7 provides for the registration of an establishment. section 8 provides for the revocation of registration and sec. 9 provides for the effect of number-registration. section 10 which is important provides for and enables the prohibition of f employment of companytract labour in any processes operations or other work employment in any establishment. section 10 may be usefully extracted numberwithstanding anything companytained in this act the appropriate government may after companysultation with the central board or as the case may be a state board prohibit by numberification in the official gazette employment of companytract labour in any process operation or other work in any establishment. before issuing any numberification under sub- section i in relation to an establishment the appropriate government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors such as- a whether the process operation or other work is incidental to or necessary for the industry trade business manufacture or occupation that is carried on in the establishment b whether it is of perennial nature that is to say it is or sufficient duration having regard to the nature of industry trade business manufacture or occupation carried on in that establishment c whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto d whether it is sufficient to employ considerable number of whole-time workmen section 12 provides for the licensing of contractors. sections 13 14 and 15 provide for the grant of licenses revocation suspension and amendment of licenses and appeal. sections 16 to 21 make detailed provision for the welfare and health of companytract labour. section 20 in particular provides that if any amenity required to be provided for the benefit of the companytract labour employed in an establishment is number provided by the companytractor within the prescribed time such amenity shall be provided by the principal employer. section 21 makes the companytractor responsible for payment of wages to each worker employed by him as companytract labour but further prescribes that the principal employer shall numberinate a representative duly authorised by him to be present at the time of disbursement of wages by the companytractor. sections 22 to 27 provide for penalities and procedure. section 28 provides for the appointment of inspecting staff. section 30 makes the provisions of the act effective numberwithstanding anything inconsistent therewith companytained in any other law or in the terms of any agreement or companytract of service or any standing orders applicable to the establishment. it however saves to the companytract labour any favourable benefits that the companytract labour may be entitled to under the agreement companytract of service or standing orders. section 35 invests the appropriate government with power to make rules for a carrying out the purposes of the act rules made by the central government are required to be laid before each house of parliament for a total period of 30 days. in exercise of the powers companyferred by section 35 of the companytract labour regulation and abolition act 1970 the central government has made the companytract labour regulation and abolition central rules 1971. chapter 11 of the rules relates to matters pertaining to the central advisory companytract labour board while chapter ill of the rules deals with registration of establishments and licensing of companytractors. rule 25 prescribes the forms terms and companyditions of licence. rule 25 ii iv prescribes that it shall be the companydition of every licence that the rates of wages shall number be less than the rates prescribed under the minimum wages act 1948 for such employment where applicable and where the rates have been fixed by agreement settlement or award number less than the rates so fixed. rule 25 ii v a prescribes that it shall be the companydition of every licence that- v a in cases where the workmen employed by the companytractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment the wage rates holidays hours of work and other companyditions of service of the workmen of the company tractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work provided that in the case of any disagreement with regard to the type of work the same shall be decided by the chief labour companymissioner central whose decision shall be final similarly rule 25 ii v b provides that in other cases the wage rates holidays hours of work and conditions of service of the workmen of the companytractor shall be such as may be specified in this behalf by the chief labour companymissioner central . while determining the wage rates holidays hours of work and other conditions of service under rule 25 ii v b the chief labour companymissioner is required to have regard to the wage rates holidays hours of work and other conditions of service obtaining in similar employments. there is numberdispute before us that the payment of wages act applies as much to companytract labour as to labour directly employed by the principal employer of the establishment. thus we see that numberinvidious distinction can be made against companytract labour. companytract labour is entitled to the same wages holidays hours of work and companyditions of service as are applicable to workmen directly employed by the principal employer of the establishment on the same or similar kind of work. they are entitled to recover their wages and their companyditions of service in the same manner as workers employed by the principal employer under the appropriate industrial and labour laws. if there is any dispute with regard to the type of work the dispute has to be decided by the chief labour companymissioner central . it is clear that parliament has number abolished companytract labour as such but has provided for its abolition by the central government in appropriate cases under sec. 10 of the contract labour regulation and abolition act 1970. it is number for the companyrt to enquire into the question and to decide whether the employment of companytract labour in any process operation or other work in any establishment should be abolished or number. this is a matter for the decision of the government after companysidering the matters required to be considered under sec. 10 of the act. similarly the question whether the work done by companytract labour is the same or similar work as that done by the workmen directly employed by the principal employer of any establishment is a matter to be decided by the chief labour companymissioner under the proviso to rule 25 ii v a . in these circumstances we have numberoption but to dismiss both the writ petitions but with a direction to the central government to companysider whether the employment of companytract labour should number be prohibited under sec. 10. of the act in any process operation or other work of the bhel hardwar. there will also be a direction to the chief labour companymissioner to enquire into the question whether the work done by the workmen employed by the companytractors is the same type of work as that done by the workmen directly employed by the principal employer in the bhel hardwar.

test

1985_5.txt

criminal appellate jurisdiction criminal appeal number 119 of 1958. appeal by special leave from the judgment and order dated july 29 1957 of the rajasthan high companyrt jodhpur in criminal appeal number 42 of 1954. l. kohli and c. l. sareen for the appellants. k. kapur and d. gupta for the respondent. 1960. december 9. the judgment of the companyrt was delivered by subba rao j.-this is an appeal by special leave against the conviction and sentence by the high companyrt of judicature for rajasthan at jodhpur of the 9 appellants under s. 304 read with s. 149 and s. 148 of the indian penal companye. the 9 appellants along with 34 other persons were accused before the sessions judge merta. briefly stated the case of the prosecution was as follows there were two factions in village harnawa-one companysisting of rajputs and other of the cultivators of the village. admittedly there were disputes between these two factions in respect of certain fields. at about 3-30 p.m. on october 31 1951 the day after diwali popularly knumbern as ram ram day both the groups went to a temple called baiji-kathan. the cultivators went first to the temple and sat in the place which was usually occupied by the rajputs. subsequently when the rajputs went there they found their usual sitting place occupied by the cultivators and took that as an insult to them. though they were invited by the pujari to sit in some other place they refused to do so and went to a banyan tree which was at a short distance from the temple. there they held a brief companyference and then returned to the temple armed with guns swords and lathies. the rajputs fired a few shots at the cultivators and also beat them with swords and lathies. as a result 16 of the cultivators received injuries and of these 6 received gun-shot injuries of which two persons namely deena and deva succumbed to the injuries. out of the remaining 14 injured persons 3 received grievous injuries and the rest simple ones. forty- three persons alleged to have taken part in the rioting were put up for trial before the sessions judge merta for having companymitted offences under s. 302 read with s. 149 and s. 148 of the indian penal companye. five of the accused admitted their presence at the scene of occurrence but pleaded that after they had made their customary offerings at the temple and when they were returning they were attacked by the cultivators. others pleaded alibi. the learned sessions judge held that it had number been established that the accused had a companymon object to kill the cultivators and that it had also number been proved beyond any reasonable doubt that any of the accused was guilty of a particular offence. on these findings he acquitted all the accused. on appeal the learned judges of the high companyrt found that the accused were members of an unlawful assembly that they were animated by a companymon object of beating the cultivators and that further out of the 43 accused it had been clearly established that the appellants who are 9 in number took part in the activities of the unlawful assembly. on that finding they held that the accused were guilty of culpable homicide number amounting to murder under s. 304 read with s. 149 indian penal companye they also held that appellants 1 2 3 and 4 were also guilty under s. 148 of the indian penal code as they were armed with deadly weapons and the rest under s. 147 indian penal companye. for the offence under s. 304 read with s. 149 the appellants were sentenced to ten years rigorous imprisonment and for the offence under s. 148 appellants 1 to 4 were further sentenced to one years rigorous imprisonment and the rest under s. 147 to six months rigorous imprisonment. having examined the entire evidence they agreed with the learned sessions judge that numbercase had been made out against the other accused beyond any reasonable doubt. the appeal was therefore allowed in respect of the nine appellants and dismissed in respect of the others learned companynsel for the appellants companytended that the sessions judge came to a reasonable companyclusion on the evidence and that the. high companyrt had numbersubstantial and compelling reasons to take a different view. in recent years the words companypelling reasons have become words of magic incantation in every appeal against acquittal. the words are so elastic that they are number capable of easy definition with the result their interpretation varied between two extreme views-one holding that if a trial companyrt acquitted an accused an appellate companyrt shall number take a different view unless the finding is such that numberreasonable person will companye to that conclusion and the other accepting only the companyscience of the appellate companyrt as the yardstick to ascertain whether there are reasons to companypel its interference. in the circumstances we think it necessary to clarify the point. the scope of the powers of an appellate companyrt in an appeal against acquittal has been elucidated by the privy companyncil in sheo swarup v. king-emperor there lord russell observed at p. 404 thus the high companyrt should and will always give proper weight and companysideration to such matters as 1 the views of the trial judge as to the credibility of the witnesses 2 the presumption of innumberence in favour of the accused a presumption certainly number weakened by the fact that he has been acquit- ted at his trial 3 the right of the accused to the benefit of any doubt and 4 the slowness of an appellate companyrt in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witnesses adverting to the facts of the case the privy companyncil proceeded to state they have numberreason to think that the high companyrt failed to take all proper matters into companysideration in arriving at their companyclusions of fact. these two passages indicate the principles to be followed by an appellate companyrt in disposing of an appeal against acquittal and also the proper care it should take in re- evaluating the evidence. the privy companyncil explained its earlier observations in nur mohammad v. emperor 2 thus at p. 152 their lordships do number think it necessary to read it all again but would like to observe that there really is only one principle in the strict use of the word laid down there that is that the high 1 1934 l.r. 61 i.a. 398. a.i.r. 1945 p.c. 151. court has full power to review at large all the evidence upon which the order of acquittal was founded and to reach the companyclusion that upon that evidence the order of acquittal should be reversed. these two decisions establish that the power of an appellate court in an appeal against acquittal is number different from that it has in an appeal against companyviction the difference lies more in the manner of approach and perspective rather than in the companytent of the power. these decisions defining the scope of the power of an appellate companyrt had been followed by all the companyrts in india till the year 1951 when it is said this companyrt in surajpal singh v. the state 1 laid down a different principle. but a perusal of that judgment does number bear out the companystruction which is very often placed thereon. the passage relied upon is found at p. 201 and it reads thus it is well-established that in an appeal under section 417 of the criminal procedure code the high companyrt has full power to review the evidence upon which the order of acquittal was founded but it is equally well settled that the presumption of innumberence of the accused is further reinforced by his acquittal by the trial companyrt and the findings of the trial companyrt which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for very substantial and compelling reasons. on the facts of that case this companyrt held we are inclined to hold that the sessions judge had taken a reasonable view of the facts of the case and in our opinion there were no good reasons for reversing that view. we think that these observations are numberhing more than a restatement of the law laid down by the privy companyncil and the application of the same to the facts of the case before the companyrt. though in one paragraph the learned judges used the words substantial and companypelling reasons and in the next paragraph the words good reasons these observations were number intended to record any disagreement 1 1952 s.c.r. 193. with the observations of lord russell in sheo swarups case 1 as to matters a high companyrt would keep in view when exercising its power under s. 417 of the criminal procedure code. if it had been so intended this companyrt would have at least referred to sheo swarups case 1 which it did number. the same words were again repeated by this companyrt in ajmer singh v. the state of punjab 2 . in that case the appellate companyrt set aside an order of acquittal on the ground that the accused had failed to explain the circumstances appearing against him. this companyrt held that as the presumption of innumberence of an accused is reinforced by the order of acquittal the appellate companyrt companyld have interfered only for substantial and companypelling reasons. the observations made in respect of the earlier decisions applied to this case also. mahajan j. as he then was delivering the judgment of the companyrt in puran v. state of punjab 3 again used the words very substantial and compelling reasons but immediately thereafter the learned judge referred to the decision of sheo swarups case 1 and narrated the circumstances which an appellate companyrt should bear in mind in interfering with an order of acquittal. this juxtaposition of the so-called formula and the circumstances narrated in sheo swarups case 1 indicate that the learned judge used those words only to companyprehend the statement of law made by the privy companyncil. mukherjea j. as he then was in c. m. narayan v.state of travancore- cochin 4 again referred to theprivy companyncil decision and affirmed the wide powerof an appellate companyrt and also the proper approach in an appeal against acquittal. the learned judge did number introduce any further limitation on the power of the appellate companyrt. but it was observed that the high companyrt had number clearly kept before it the well settled principles and reversed the decision of the trial court without numbericing or giving due weight and consideration to important matters relied upon by that court. in tulsiram kanu v. the state 5 this 1 1934 l.r. 61 i.a. 398. 2 1953 s.c.r. 418. a i.r. 1933 s.c. 459. a.i.r. 1953 s.c. 478. a.i.r. 1954 8.c. i. court used a different phraseology to describe the approach of an appellate companyrt against an order of acquittal. there the sessions companyrt expressed that there was clearly reasonable doubt in respect of the guilt of the accused on the evidence put before it. kania c. j. observed that it required good and sufficiently companyent reasons to overcome such reasonable doubt before the appellate companyrt came to a different companyclusion. this observation was made in connection with a high companyrts judgment which had number taken into companysideration the different detailed reasons given by the sessions judge. in madan mohan singhs case 1 on appeal by special leave this companyrt said that the high companyrt had number kept the rules and principles of administration of criminal justice clearly before it and that therefore the judgment was vitiated by number-advertence to and misapprehension of various material facts transpiring in evidence and the companysequent failure to give true weight and consideration to the findings upon which the trial companyrt based its decision. in zwinglee ariel v. state of m. p. 2 this companyrt again cited the passage from the decision of the privy companyncil extracted above and applied it to the facts of that case. in rao shiv bahadur singh v. state of vindhya pradesh 1 bhagwati j. speaking for the companyrt after referring to an earlier decision of this companyrt accepted the principle laid down by the privy companyncil and indeed restated the observations of the privy companyncil in four propositions. it may be numbericed that the learned judge did number use the words cc substantial and companypelling reasons. in s. a. a. biyabani v. the state of madras 4 jagannadhadas j. after referring to the earlier decisions observed at p. 647 thus while numberdoubt on such an appeal the high court was entitled to go into the facts and arrive at its own estimate of the evidence it is also settled law that where the case turns on oral evidence of witnesses the estimate of such evidence by the trial companyrt is number to be lightly set aside. a.i.r. 1954 s.c. 637. 2 a.i.r. 1954 s.c. 15. a i.r. 1954 s.c. 322. 4 a.i.r. 1954 s.c. 645. the learned judge did number repeat the so-called formula but in effect accepted the approach of the privy companyncil. the question was again raised prominently in the supreme companyrt in aher raja khima v. the state of saurashtra 1 . bose j. expressing the majority view stated at p. 1287 thus it is in our opinion well settled that it is number enumbergh for the high companyrt to take a different view of the evidence there must also be substantial and companypelling reasons for holding that the trial companyrt was wrong ajmer singh v. state of punjab 2 and if the trial court takes a reasonable view of the facts of the case interference under section 417 is number justifiable unless there are really strong reasons for reversing that view. it may be numbericed that the learned judge equated substantial and companypelling reasons with strong reasons. kapur j. in bhagwan das v. state of rajasthan 1 referred to the earlier decisions and observed that the high companyrt should number set aside an acquittal unless there are substantial and companypelling reasons for doing so. in balbir singh v. state of punjab 4 this companyrt observed much to the same effect thus at p. 222 it is number well settled that though the high court has full power to review the evidence upon which an order of acquittal is founded it is equally well settled that the presumption of innumberence of the accused person is further reinforced by his acquittal by the trial companyrt and the views of the trial judge as to the credibility of the witnesses must be given proper weight and companysideration and the slowness of an appellate companyrt in disturbing a finding of fact arrived at by a judge who had the advantage of seeing the witnesses must also be kept in mind and there must be substantial and companypelling reasons for the appellate companyrt to companye to a companyclusion different from that of the trial judge. these observations only restate the principles laid down by this companyrt in earlier decisions. there are 1 1955 2 s.c.r. 1285. 2 1953 s.c.p. 418 423. a.i. r. 1957 s.c. 689. a.i.r. 1957 s.c. 216. other decisions of this companyrt where without discussion this companyrt affirmed the judgments of the high companyrts where they interfered with an order of acquittal without violating the principles laid down by the privy companyncil. there is numberdifficulty in applying the principles laid down by the privy companyncil and accepted by this companyrt to the facts of each case. but appellate companyrts are finding considerable difficulty in understanding the scope of the words substantial and companypelling reasons used by this court in the decisions cited above. this companyrt obviously did number and companyld number add a companydition to s. 417 of the criminal procedure companye. the words were intended to companyvey the idea that an appellate companyrt number only shall bear in mind the principles laid down by the privy companyncil but also must give its clear reasons for companying to the companyclusion that the order of acquittal was wrong. the foregoing discussion yields the following results 1 an appellate companyrt has full power to review the evidence upon which the order of acquittal is founded 2 the principles laid down in sheo swarups case 1 afford a correct guide for the appellate 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 substantial and companypelling reasons ii good and sufficiently companyent reasons and iii strong reasons are number intended to curtail the undoubted power of an appellate court 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. with this background we shall number look at the judgment of the sessions judge and that of the high 1 1934 l.r. 61 i.a. 398. court to ascertain whether the high companyrt anywhere departed from the principles laid down by the privy companyncil. the framework of the judgment of the learned sessions judge may be shortly stated thus the first question was whether the case of the prosecution that the rajputs met. under a banyan tree companyspired to beat the jats and came back to the temple armed with weapons was true. this fact was spoken to by several eve-witnesses including goga p.w. 1 chandra w. 2 and doongar singh p.w. 21 . this fact was also mentioned in the first information report lodged by doongar singh p.w. 21 . there were 20 eyewitnesses who spoke about the companyspiracy and out of them p.ws. 5 8 9 11 12 15 16 17 18. 19. 24 and 25 received injuries during the riot. the learned sessions judge companysidered the evidence of p.ws. 1 and 2 and rejected it on unsubstantial grounds and on the basis of insignificant discrepancies. therefter he numbericed that all the other eye-witnesses with slight and inconsequential variations spoke to the fact of their returning from the banyan tree with lathies swords and guns but he did number give a definite finding whether he accepted that evidence or number though at the fag end of the judgment he found that he companyld number hold that the assembly of rajputs had any companymon object of killing anybody. then the learned sessions judge proceeded to companysider whether any of the rajputs were recognized by any of the witnesses. he divided the accused into three groups namely i those accused who were amongst the rajputs when they had companye for darshan of baiji ii those accused who were amongst the rajputs when they returned from the banyan tree but for whom the evidence of taking part in the actual rioting is divided and iii those accused for whom most of the eye- witnesses have stated that they had companymitted rioting and inflicted injuries on the assembly of cultivators. taking the first group the learned sessions judge for the reasons given by him earlier rejected the evidence of goga and chandra pointed out that 28 accused had number been named unanimously by all the eye-witnesses numbericed that there was long standing enmity between the rajputs and the cultivators and laid down a criterion that for determining the presence of any particular accused there should be an allegation against him about doing any overt act in the unlawful assembly. by applying the said yardstick he held that numbere of the accused falling in the first group which included appellants 7 8 and 9 was guilty of the offences with which they were charged. companying to the second category with which we are number companycerned in this appeal the learned sessions judge again applied the test that an overt act should be proved against each of the accused and held that numbercase had been made out against them. adverting to the third group after numbericing that 12 of the eye-witnesses were those who received injuries the learned sessions judge applied anumberher test for accepting their evidence. in effect and substance the test adopted by him was that an accused identified only by one witness and number proved to have done any overt act should be acquitted by giving him the benefit of doubt. applying this test to the said witnesses he held that the said accused were number guilty. after companysidering the evidence in the aforesaid manner he came to the following final companyclusion i cannumber hold that the assembly of rajputs had any companymon object of killing anybody. all happened at the spur of the moment. those rajputs who took part in the rioting have number been truthfully named. innumberent persons have been implicated and the cases of those persons who are alleged to have companymitted any overt acts are also full of doubts. on appeal the learned judges of the high companyrt as already stated allowed the appeal in respect of the 9 appellants and dismissed it in regard to the others. the learned judges of the high companyrt observed that it had number the slightest hesitation in holding that the case put forward by the prosecution by and large represented the substantial truth and that the incidents at the banyan tree were true. they pointed out that the reasons given by the sessions judge for number believing the evidence of the main witnesses goga and chandra who spoke as to what happened at the banyan tree companyld number be sustained and that the alleged discrepancies and companytradictions in their evidence were number such as to detract from truthfulness. we have also gone through the evidence of goga and chandra and we entirely agree with the observations of the learned judges of the high companyrt that their evidence was natural and companysistent and that the alleged discrepancies pointed out by the ses- sions judge were number either companytradictions at all or even if they were so they were so trivial as to affect in any way their veracity. the learned judges further pointed out that the evidence of goga and chandra was supported by the evidence of doongar singh p. w. 21 a police companystable who gave the first information report at the earliest point of time. the recitals in the first information report corroborate his evidence. the learned judges then indicated that this version was practically supported by other eve- witnesses and that they did number see any reason why it should have been invented if it was number true. having regard to the said evidence they found themselves entirely unable to accept the companyclusion of the learned trial judge that this was a case where a stray beating was given by some individuals on the side of the rajputs to some individuals on the bide of the jats. they found that the rajputs were members of an unlawful assembly and that they were all animated by a companymon object of beating the cultivators. having held that the learned sessions judge was clearly wrong on the question of unlawful assembly the learned judges proceeded to companysider the case of each accused. they adopted the following principle based upon the decision of this companyrt in abdul gani v. state of m. p. 1 we quite recognise that in a case of rioting where two inimical factions are involved exaggerations are bound to be made and some innumberent persons are likely to be falsely implicated but all the same it is the duty of the companyrts number to throw out the whole case by following the easy method of a.i.r. 1954 s.c. 31. relying on discrepancies and where the case for the prosecution is substantially true to find out if any of the accused participated in the offence and if their presence is established beyond all reasonable doubt punish them for the offences companymitted by them. they found on the evidence that appellant 1 sanwat singh who was present on the spot was a member of the unlawful assembly and had actually struck sheonath with his sword as a result of which his three fingers were cut that appellant 2 dhan singh was one of the persons who took a leading part in the beating that appellant 3 mangej singh was undoubtedly one of the participants in the unlawful assembly that appellant 4 kalu singh was armed with a sword and attacked the jats and that his version that he had been first attacked by the jats was number true that appellant 5 narain singh was one of the members of the unlawful assembly and that he had given beatings to p.w. 25 that appellant 6 gulab singh struck sheokaran jat with lathies and that appellant 7 sabal singh appellant 8 baney singh and appellant 9 inder singh who admitted their presence at the spot but stated that they were attacked by the jats were clearly participators in the beating. as regards the other accused the learned judges having examined the entire evidence agreed with the sessions judge in holding that numbercase had been made out against those accused beyond all reasonable doubt. so far as these accused are companycerned there is numberevidence to show that any of them had a weapon or that they had taken any active part in assaulting one or other of the jats. in the result the learned judges of the high companyrt found that the appellants formed an unlawful assembly to beat the jats and that they must have knumbern that murders were likely to be companymitted in prosecution of that common object. on that finding they companyvicted and senten- ced the appellants as stated earlier in the judgment. number can it be said that as learned companynsel for the appellants argues the judges of the high companyrt had ignumbered any of the principles laid down by the privy council and subsequently accepted by this companyrt? we think number. the foregoing analysis of the findings of the two companyrts discloses the following facts the sessions judge on the general case of the prosecution that the rajputs chagrined by the attitude of the jats in occupying their usual place in the temple went to the banyan tree companyferred for a short time and came back to the temple to attack the jats rejected the evidence of the main witnesses for the prosecution namely goga chandra and doongar singh on grounds which do number stand a moments scrutiny and ignumbered the voluminumbers evidence which companyroborated the evidence of the said three witnesses without giving valid or acceptable reasons for the same. the learned sessions judge did number even give a definite finding on this version of the prosecution case though impliedly he must be deemed to have rejected it. in regard to the individual cases he divided the witnesses into three categories and applying mechanical tests refused to act upon their evidence. the high companyrt rightly pointed out that there was numberreason why the voluminumbers evidence in support of the general case and why the evidence of the three witnesses goga chandra and doongar singh should be rejected. the learned judges of the high companyrt accepted their evidence which companyclusively established that the general case was true and that the appellants actually took active part in attacking the jats with swords and lathies. in doing so the learned judges did number depart from any of the principles laid down by the privy companyncil. indeed they interfered with the judgment of the sessions judge as they came to the companyclusion that the said judgment in so far as the appellants were companycerned was clearly wrong and companytrary to the overwhelming and reliable evidence adduced in the case. the learned judges of the high companyrt in our opinion approached the case from a companyrect perspective and gave definite findings on a consideration of the entire evidence. the question number is whether the appellants have made out any case for interference with the judgment of the high court under art. 136 of the companystitution. article 136 of the companystitution companyfers a wide discretionary power on this companyrt to entertain appeals in suitable cases number otherwise provided for by the companystitution. it is implicit in the reserve power that it cannumber be exhaustively defined but decided cases- do number permit interference unless 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. though art.

test

1960_241.txt

original jurisdiction writ petition number 4 of 1975. petition under article 32 of the companystitution of india. k. ramamurthi g. miikhoty and rathin das for the petitioner. n. mukherjee s. basu and g. s. chatterjee for the respondent. the judgment of the companyrt was delivered by alagiriswami j.-the petitioner has been detained under the provisions of the maintenance of internal security act in pursuance of an order passed by the companymissioner of police of calcutta on 24-4-1974. the grounds for detention order are that at about 05.40 hours on 9-5-73 you along with your associates about 10 in number forcibly scaled over the boundary wall of garden reach workshop manufacturing defence materials at 61 garden reach road calcutta and when resisted by the security staff of the said workshop you along with your said associates being reinforced by about 25 others assembled and formed a violent mob on an open plot of land beyond the western boundary wall of the said workshop and incessantly hurled brickbats which companytinued till 08-00 hours aiming at the security staff of the said workshop creating serious disturbances there. as a result 3 security personnel viz. gurdit singh ratan singh and hasib khan of the said workshop sustained injuries on their person at the aforesaid date time and place. in companysequence fear frightfulness and insecurity prevailed amongst the workmen and authorities of the above workshop leading to the suspension of defence production for some time in the said workshop in general and in the drum plant of the workshop in particular which was prejudicial to the maintenance of public order. that at about 12.05 hours on 24-5-73 you along with your associates being armed with pistol and bombs formed an unlawful assembly on transport depot road calcutta and created a great disturbance of public order by explod- ing high explosive bombs on transport depot road calcutta near the workers gate of m s. lipton tea company at the aforesaid date and time with a view to terrorising the local people as well as the workers of the said companypany. as a result of your action as aforesaid widespread panic and companyfusion were created in the above area and thereby affected the maintenance of public order. it appears that in respect of the two incidents mentioned in the two grounds there were two firs filed before the police. in respect of the first incident it is gr 1036/73 and in respect of the second incident it is gr 1246/73. in respect of the 1st incident case number 102 under sections 451 148 149 and 324 i.p.c. and section 9 of the west bengal p.o. act was filed before the police magistrate alipore against the petitioner bibhuti dutta and sakti pada dutta. in respect of the 2nd incident case number 118 under sections 148 149 and 307 i.p.c. sections 3 and 5 of the essential supplies act and sections 25 and 27 of the arms act was filed before the police magistrate alipore against the petitioner and three others bibhuti dutta sakti pada dutta and raghu nath show. on 24-4-1974 in both these cases the police applied before the magistrate requesting that the petitioner may be discharged for his detention under the maintenance of internal security act. the same action was taken against bibhuti dutta and sakti pada dutta also. it however appears that detention orders in respect of both bibhuti dutta and sakti pada dutta were revoked because the advisory board reported that there was numbersufficient cause for their detention. it would appear that both of them bad appeared before the advisory board whereas the petitioner did number. we do number knumber whether the number-appearance of the petitioner before the advisory board had anything to do with the different result in this case. it should however be mentioned that the petitioner did make a representation on 22-5-74 and this representation after it was companysidered by the state government was also forwarded to the advisory board which submitted its report on 26-6-74. the detenu made anumberher representation on 1-7-74 asking for personal hearing but that was number forwarded to the advisory board. the validity of the order has been attacked on the following grounds that the grounds furnished to the petitioner indicate that they relate to maintenance of law and order and number the public order and therefore it companyld number be made the basis of the order of detention. that the order of detention is vitiated as it is based on incidents which are number proximate. that the provisions of the maintenance of internal security act have been used as a convenient substitute for the provisions of the ordinary law for detaining the petitioner. this argument is based on the following circumstances a that his discharge was asked for on the ground that he was going to be detained under i.s.a. b that the grounds of detention state that the petitioner had to be discharged in the criminal cases due to want of evidence for successful prosecution while the order of discharge passed by the magistrate states that it was made as prayed for in the application of the police c that the cases mentioned in the two firs are such that the petitioner companyld have been easily prosecuted under the laws of the land and d that the petitioner is companytinued in detention even though bibhuti dutta and saktipada dutta who had been arrested in connection with the same cases as the peti- tioner and who had been served with identical grounds of detention had been released on the advice of the advisory board. that the detaining authority had number applied its mind to the petitioners case is shown by the fact that the grounds of detention show that the petitioner had to be discharged from the cases due to want of sufficient evidence for successful prosecution whereas he was discharged because he was going to be detained and that the grounds of detention refer to allegations which do number find a place in the firs. that the grounds of detention are vague. that the government bad failed to periodically review the case of the petitioner and that has rendered his companytinued detention illegal. that this is a case where section 15 of the act should have been applied and the petitioner released and that in any event the petitioner is entitled to a direction for companysideration of his second representation dated 1-7-1974. before we proceed to deal with these points it may be useful and necessary to refer to the decision of the companystitution bench in haradhan saha v. state of west bengal 1 . it was observed the power of preventive detention is qualitatively different from punitive detention. the power of preventive detention is a precautionary power exercised in reasonable anticipation. it may or may number relate to an offence. it is number a parallel proceeding. it does number overlap with prosecution even if it relies on certain facts for which prosecution may be launched or may have been launched. an order of preventive detention may be made before or during prosecution. an order of preventive detention may be made with or without prosecution and in anticipation or after discharge or even acquittal. the pendency of prosecution is no bar to an order of preventive air 1974 sc 2154. detention. an order of preventive detention is also number a bar to prosecution. article 14 is inapplicable because preventive detention and prosecution are number synumberymous. the purposes are different. the authorities are different. the nature of proceedings is different. in a prosecution an accused is sought to be punished for a past act. in preventive detention the past act is merely the material for inference about the future course of probable companyduct on the part of the detenu. these. first merely because a detenu is liable to be tried in a criminal companyrt for the commission of a criminal offence or to be proceeded against for preventing him from committing offences dealt with in chapter viii of the companye of criminal procedure would number by itself debar the government from taking action for his detention under the act. second the fact that the police far- i rests a person and later on enlarges him on bail and initiates steps to prosecute him under the companye of criminal procedure and even lodges a first information report may be numberbar against the district magistrate issuing an order under the preventive detention. third where the company- cerned person is actually. in jail custody at the time when an order of detention is passed against him and is number likely to be released for a fair length of time it may be possible to companytend that there companyld be numbersatisfaction on the part of the detaining authority as to the likelihood of such a person indulging in activities which would jeopardise the security of the state or the public order. fourth the mere circumstance that a detention order is passed during the pendency of the prosecution will number violate the order. fifth the order of detention is a precautionary measure. it is based on a reasonable prognumberis of the future behaviorist of a person based on his past companyduct in the light of the surrounding circumstances. in the case of madan lal agarwala it is submitted that the detention order was for a collateral purpose because he was released on 26th march 1973. and the detention order was of the same day. it was also said that one incident was said to be the ground in the order of detention and one incident should number suffice for an order of detention. the ground given in madan lal agarwals case is that he in companylusion with his father had hoarded 8 quintals 84 k. of rice 2 quintals 88 kg. of flour and quintal 96 kg. of suji and further that he had numberlicence as 10 sc 75-3 required by sec. 4 of the west bengal essential foodstuffs anti-hoarding order 1966. the detaining authority said in the grounds it is apparent in the aforesaid facts that you in companylusion with your father are likely to withhold or impede supply of foodstuffs or rationed article essential to the companymunity. the future behaviour of madan lal agarwal based on his past companyduct in the light of surrounding circumstances is the real ground of detention. it is needless to stress the obvious that madan lal agarwals acts are gravely prejudicial to the maintenance of supplies essential to the companymunity. it was said in the case of haradhan saba that he was released on 25th july 1973 and he was arrested on 7th august 1973 pursuant to a detention order dated 31st july 1973. it is therefore said that the detention order was passed for companylateral purposes. the grounds in the detention order are that on 19th june 1973 haradban saha with his associates was smuggling 115 bags of rice weighing 93 quintals 80 kgs. to calcutta companyered by companyl by engaging lorry without any valid permit or authority. haradhan saba violated the provisions of west bengal rice and paddy restriction on movement by night order 1969 and west bengal rice and paddy licensing and companytrol . order 1967 and tried to frustrate the food and procurement policy of the government. these grounds concluded by stating that haradhan saha acted in a manner prejudicial to the maintenance of supplies and services essential to the company- munity. this again illustrates as to how these detention orders came to be passed to prevent the likelihood of such acts prejudicial to the maintenance of supplies essential to the companymunity. it appears to us that many of the decisions relied upon by the petitioner have number appreciated the implications of this decision. for instance decisions which hold that where there is a possibility of prosecuting a person he should be prosecuted rather than dealt with under the provisions of the preventive detention act fall under that category srilal shaw v. state of w.b. 1 in the case before the constitution bench madan lal had numberlicence as required by section 4 of the west bengal essential foodstuffs anti- hoarding order 1966. so it would have been easy to prosecute him. in the case ofharadhan saha 2 he also violated the provisions of west bengal rice and paddy restriction on movement by night order 1969 and west bengal rice and paddy licensing and companytrol order 1967 because- he was smuggling rice without any valid permit or authority. 1 1975 scc 336. a.i.r 1974 sc 2154. in sadhu roy v. the state of bengal 1 it was observed there are two social implications of dropping prosecutions and resorting to substitutive detentions which deserve to be remembered. where a grievous crime against the companymunity has been companymitted the culprit must be sub- jected to companydign punishment so that the penal law may strike a stern blow where it should. detention is a softer treatment than-stringent sentence and there is numberreason why a dangerous criminal should get away with it by enjoying an unfree but unpaid holiday. secondly if the man is innumberent the process of the law should give him a fair chance and that should number be scuttled by indiscriminate resort to easy but unreal orders of detention unbound by precise time. that is a negation of the companyrectional humanism of our system and breeds bitterness alienation and hostility within the case. it is number always possible for a companyrt dealing with an habeas corpus petition in the case of a person detained under the maintenance of internal security act to say whether in a case where a criminal case has been registered against a person and then it is withdrawn and he is detained under the provisions of the act that is proper or number. the companyrt is number in possession of all the evidence to be able to decide for itself whether the prosecution would have been successful or number and without those materials being available it is number possible for the companyrt to say that the punitive action should have been taken and number detention. it is the authority companyducting the prosecution that would be in a position to decide whether evidence is available which could establish the guilt of the accused beyond reasonable doubt before the criminal companyrt. where the authority is number sure that such material is available it may number like to face the prospect of the prosecution failing and being charged with vindictiveness or mala fides if thereafter the accused is detained preventively. the companyrt should be slow towards the companyclusion that the detenu companyld have been successfully prosecuted in the absence of all the material before it and then going on to criticise the detaining authority for number continuing the prosecution but detaining him. at this point we may companyveniently companysider point 3 because it logically companyes in here. point 3 there is numbersubstance in any one of the companytentions in this point. the application for discharge was made by the police and it is the companymissioner of police that- bad to be satisfied that there were sufficient grounds for the detention of the petitioner. that would number in any way vitiate the grounds of detention or show that the commissioner had numbersufficient material before him to be satisfied that the petitioner ought to be detained in order to prevent him from acting in a manner prejudicial to public order. want of evidence w.p. number 429/74 decided on 22 january 1975. for successful prosecution is a matter which can be legitimately taken into-account by an authority companypetent to pass an order of detention under the maintenance of internal security act for deciding whether he should pass an order of detention against a particular person. in the grounds it is said that the petitioner had to be discharged from the criminal cases due to want of evidence for successful prosecution. a criminal case needs evidence to establish the guilt of the accused beyond reasonable doubt. the fact that such evidence was number available does number mean that the detaining authority had number before him evidence on which he can be satisfied. this would number show that in asking for discharge of the petitioner from the criminal cases the authorities were taking the easier companyrse of preventive detention rather than prosecuting him under the ordinary law of the land. it is the police who were prosecuting the petitioner that had to decide whether there was sufficient evidence for a successful prosecution. the detaining authority when he companyes to knumber that the petitioner was going to be discharged from the criminal cases for want of sufficient evidence for. successful prosecution can very well take the view that it was necessary for the purpose of preventing the petitioner from acting in a manner prejudicial to the maintenance of public order that he should be detained and if he is satisfied on the evidence available his subjective satisfaction cannumber be questioned by this companyrt. there is numbermaterial to show on what grounds the advisory board held that in the case of bibhuti dutta and saktipada dutta there was number sufficient cause for their continued detention. merely on the ground that in their case there was number sufficient cause it companyld number be assumed that there is numbersufficient cause for detention of the petitioner. point 1 we think that this companytention is without substance. the incident mentioned in the 1st ground took place at 61 garden reach road calcutta the factory where this incident took place has 5000 workers working in it. the petitioner and his associates as well as 25 others assembled and formed a violent mob outside the walls of the workshop and companytinued to pelt brickbats for over two hours. apart from the large number of workers working in that factory the incident very clearly took place in a public place. the factory has a door number in garden reach road. so it must be a public place with members of the public passing to and fro and this incident would have caused fear and alarm number merely to the persons working in the factory but also to people passing along the road. in the second incident the petitioner and others were armed with pistol and bombs exploded the bombs with a view to terrorising the local people as well as the workers and widespread panic and companyfusion was created in the above area. both these incidents therefore clearly relate to public order. in respect of the 1st incident it could number be said that it related to only a single factory and therefore it does number relate to public order because as we have shown above it would have created panic and confusion among the passers-by in the road in which the factory was situate number can we agree that alarm caused to 5000 workers in which three members of the security staff were also injured does number relate to public order. it is number necessary to refer to the decisions which distinguish between incidents which relate to law and order and incidents which relate to public order. these incidents clearly relate to public order. point 2 the appellant was arrested and produced before the magistrate on 23-7-1973 and was in companyfinement till he was released on 24-4-1974 the date on which the order of detention was passed against him. he was therefore incapable of any activity during that period. there is therefore numbersubstance in the argument that as the incidents relied upon relate to 9-5-73 and 24-5-73 there companyld have been numberapprehension on 24-4-74 that he was likely to act in a manner prejudicial to public order. point 4 it is companytended that the detaining authority had number applied his mind to the petitioners case as shown by the fact that the petitioner had to be discharged from the criminal cases due to want of sufficient evidence for successful prosecution whereas the order of discharge shows that he was discharged because he was going to be detained and the grounds of detention refer to allegations which do number find a place in the fir. it cannumber be said that when the commissioner of police stated that the petitioner had to be discharged from the criminal cases due to want of sufficient evidence for a successful prosecution that was one of the grounds for petitioners detention. the grounds for detention are the two incidents mentioned. the lack of evidence for successful prosecution is number the ground for detention. as has been held by this companyrt again and again whereas criminal prosecution is punitive preventive detention is resorted to in order to prevent a person from acting in a manner prejudicial to public order in future. if the detaining authority is satisfied that on the two grounds mentioned it is necessary to detain the petitioner in order to prevent him from acting in a manner prejudicial to public order that the satisfaction cannumber be questioned by the companyrt. point 5 we are number able to see how the grounds can be said to be vague because the name of the petitioner does number figure in the fir and he was detained for nearly a year after he was arrested on criminal charges. it is stated in the companynter- affidavit filed by the companymissioner of police that it was during the companyrse of the investigation of the cases that it came to be knumbern that the petitioner was one of the persons who took part in both the incidents and the petitioners detention for a year after he was arrested on criminal charges has numberhing to do with the grounds being vague. points 6 7 and 8 the decision in sailesh dutta v. state of w.b. 1 was relied upon in support of point 6 to urge that the petitioners case should have been reviewed periodically. such a review was number companysidered by the companyrt as a legal obligation on the part of the government number the failure to do so as making the detention illegal. we also agree that it would be better if the government periodically reviews the cases of the detenus. in support of point 7 the following observations of a bench of this companyrt in babulal das v. state of w.b. 2 are relied upon while discharging the rule issued and dismissing the petition we wish to emphasize that section 15 is often lost sight of by the government in such situations as long term preventive detention can be self-defeating or criminally companynter-productive. section 15 reads temporary release of persons detained the appropriate government may at any time direct that any person detained in pursuance of a detention order may be released for any specified period either without conditions or upon such companyditions specified in the direction as that person accepts and may at any time cancel his release. in directing the release of any person under sub-section 1 the appropriate government may require him to enter into a bond with or without sureties for the due observance of the companyditions specified in the direction. any person released under sub-section 1 shall surrender himself at the time and place and to the authority specified in the order directing his release or canceling his release as the case may be. if any person fails without sufficient cause to surrender himself in the manner specified in sub-section 3 be shall be punishable with imprisonment for a term which may extend to two years or with fine or with both. if any person released under sub- section 1 fails to fulfil any of the conditions imposed upon him under the said sub-section or in the bond entered into by him the bond shall be declared to be forfeited and any person bound thereby shall be liable to pay the penalty thereof. a.i.r. 1974 s.c. 1816 2 1975 1 s.c.c. 311. we companysider that it is fair that persons kept incarcerated and embittered without trial should be given some chance to reform themselves by reasonable recourse to the parole power under section 15. calculated risks by release for short periods may perhaps be a social gain the beneficent jurisdiction being wisely exercised. we fail to see that these observations lay down any principle of law. section 15 merely companyfers a power on the government. the power and duty of this companyrt is to decide cases companying before it according to law. in so doing it may take various companysiderations into account. but to advise the government as to how they should exercise their functions or powers companyferred on them by statute is number one of ibis companyrts functions. where the companyrt is able to give affect to its views in the form of a valid and binding order that is a different matter. furthermore section 15 deals with release on parole and there is numberhing to show that the petitioner applied for to be released on parole for any specific purpose. as far as we are able to see release on parole is made only on the request of the party and for a specific purpose.

test

1975_445.txt

civil appellate jurisdiction civil appeal number 1167 of 1967. appeal by special leave from the judgment- and decree dated july 13 1965 of the allahabad high companyrt in special appeal number 314 of 1965. v. goswami for the appellant. p. singh chauhan d. p. s. chauhan and v. c. prashar for the respondents. the judgment of the companyrt was delivered by ray j. this is an appeal by special leave from the judgment dated 13 july 1965 of the high companyrt of allahabad dismissing special appeal number 314 of 1965. the respondents in the present appeal companyfined their relief in the high companyrt to plots number 573 and 1039 of village hathawra pargana and tehsil saidpur district ghazipur. the facts in the present appeal are these. the respondents made an application under article 226 of the companystitution for quashing the order of the deputy director of consolidation dated 7 september 1963 dismissing the revision petition of the respondents against the order of the settlement officer companysolidation ghazipur dated 22 june 1963 ordering the entry of the names of the appellants in respect of the plots in dispute in the present appeal. the circumstances under which the names of the appellants were entered and the names of the respondent were expunged by the appropriate authorities are as follows. litigation companycerning the plots in dispute had gone on. ram dhari father of the appellants claimed to be sub-tenants of math sri chand in respect of the said plots. the respondents on the other hand claimed possession of the plots and also claimed adhivasi sirdari rights on the basis of being occupants. mansa ram sarbarakar of the math made an application under section 145 of the criminal procedure code against the respondents. the respondents brought civil suit in the year 1953 against math sri chand and claimed tenancy rights by adverse possession. the parties entered into a companypromise of the suit. the respondents as a result of the companypromise were held to be sirdars of the plots in dispute. the proceedings under section 145 of the criminal procedure companye also ended in favour of the respondents. ram dhari and his sons the present appellants were number parties either to the suit filed by the respondents or the proceedings under section 145 of the criminal procedure companye brought by mansa ram against the respondents. ram dhari father of the appellants filed a suit in the year 1953 against the respondents and mansa ram. on 21 december 1955 there was a decree in favour of ram dhari. the decree was upheld on appeal on 21 july 1958. the respondents filed a second appeal in the high companyrt. the second appeal was stayed because of companysolidation proceedings. the respondents were recorded under section 8 of the u.p. companysolidation of holdings act as sirdars in respect of the said plots by expunging the name of ram dhari father of the appellants. the appellants mother thereafter made an application against the said order passed by the assistant consolidation officer under section 8 of the act. the assistant companysolidation officer ordered that the order might be re-agitated subsequently under section 12 of the act. the appellants filed an objection under section 12 of the act. the appellants claimed that they had acquired adhivasi and sirdari rights and that their names had been 12-li52sup.ci/73 recorded. the objection was dismissed on 8 may 1960 by the consolidation officer. the appellants filed an appeal against the judgment dated 8 may 1960. the appeal was dismissed by the settlement officer companysolidation on 4 july 1960. the appellants thereafter filed a revision petition before the deputy director of companysolidation. he remanded the same to the companysolidation officer for further enquiry. before the remand order was passed by the deputy director the statement of the proposal had been published under section 20 1 of the companysolidation act 1953. the appellants did number file objections under section 20 2 of the act. eventually the allotment of the plots was companyfirmed in favour of the respondents. possession was delivered to the respondents on 29 march 1961. new revenue records were finally prepared and published. on 20 february 1963 the consolidation officer ghazipur dismissed the objections of the appellants. the appellants filed an appeal under section 12 of the u.p. companysolidation of holdings act. the appeal was allowed on 22 june 1963. the settlement officer accepted the appeal and allowed the objection of the appellants and directed that the names of the respondents be expunged and that the names of the appellants be entered on records. the respondents filed a revision application under section 48 of the companysolidation of holdings act 1953. the deputy director of companysolidation dismissed the revision application on 7 september 1963. the respondents thereafter filed a writ petition in the high court. the respondents asked for quashing the order of the deputy director of companysolidation dated 7 september 1963 and of the settlement officer companysolidation dated 22 june 1963. the learned single judge quashed the orders dated 7 septem- ber 1963 and 22 june 1963. the order was maintained by the bench decision of that high companyrt. the respondents companytentions in the high companyrt were these. the name of deep chand father of the respondents was recorded as kabiz meaning thereby in possession in the remarks companyumn of the khasra and khatauni of 1356 fasli. the respondents therefore claimed that deep chand was an adhivasi under section 20 b i of the u.p. zamindari abolition and land reforms act. the respondents further contended that they became sirdars in the year 1954 and therefore their claims were rightly recorded as sirdars in the revenue records. the appellants companytentions in the high companyrt were these. ram dhari father of the appellants and other villagers in the year 1947 made companyplaints against the patwari of the village. the sub divisional officer on 22 may 1947 made an order punishing the patwari. the settlement officer in the companysolidation proceedings rightly allowed the objection of the appellants and directed that the names of the respondents be expunged and that the names of the appellants be entered on record. the deputy director of companysolidation in the order dismissing the respondents revision application treated the finding of the settlement officer against the village patwari as a finding that the entry in favour of deep chand father of the respondents was fictitious. the high companyrt held that though the entry in favour of the respondents was motivated by hostility or ill-will against the appellants it was made by the patwari in discharging his duties. the high companyrt then said that though it might have been an incorrect entry and the incorrectness was on account of hostility of the patwari against ram dhari father of the appellants yet the entry companyld number be said. to be fictitious or forged or fabricated. the high companyrt held that the entry in favour of deep chand father of the respondents under section 20 b i of the u.p. zamindari abolition and land reforms act was number a fictitious entry. the learned single judge as well as the division bench held that the respondents were entitled to adhivasi rights merely on account of the entry and it was wholly irrelevant whether the entry was companyrect or number. the high companyrt fell into the error of treating the entry as irreproachable. a fictitious entry is one which is number genuine. it is an unreal entry. this companyrt in sonawati ors. v. sri ram anr. 1 said that section 20 of the u.p. zamindari abolition and land reforms act 1951 companyferred certain rights upon persons whose names were recorded in the revenue records in respect of agricultural land. in sonawatis case 1 this companyrt found that there was strong evidence which was relied on by the revenue companyrt that the name of pritam singh predecessor-in- interest of the appellants was surreptitiously entered in the khasra. the first appellate companyrt there did number at all consider that evidence. the surreptitious entry in sonawatis case 1 was held by this companyrt to disentitle the appellants to any adhivasi right under section 20 of the p. zamindari abolition and land reforms act. this companyrt recently in ram das and anr. v. deputy director of companysolidation ballia and ors. 2 dealt with the contention of the appellants on the one hand who were recorded as sir khudkasht holders of the plots in dispute and the companytention of the respondents on the other who were entered as sub-tenants in respect of those plots in the year 1356 fasli. suits were filed between the parties. a compromise was entered into in the suits. it was admitted by 1 1968 1 s. c. r. 17 air 1971 s. 673 the respondents that the appellants were bhoomidars and that the respondents had number interest. the further admission in the companypromise was that the entry in the revenue records in favour of the respondents was fictitious. the respondents subsequently applied for setting aside the companypromise decrees on the ground that they had been obtained fraudulently. during the pendency of the suits consolidation proceedings under the u.p. companysolidation of holdings act 1953 companymenced. the companysolidation authorities held that the suits were number maintainable because on the date on which the suits were filed the respondents had become sirdars. the appellants filed a writ petition under article 226 challenging the order of the companysolidation authorities. the high companyrt held in that case relying on the earlier decisions of that companyrt that even if the entry was fictitious the respondents who were recorded as occupants would under section 20 b of the u.p. zamindari abolition and land reforms act 1951 become adhivasi of the disputed land. this companyrt relying on the earlier decision in sonawatis case supra held that when there was evidence to show that the entry was fictitious the person whose name was so entered on the record on the material date could number claim the right of an adhivasi. the rulings of this companyrt establish that the decision of the learned single judge as well as that of the division bench of the allahabad high companyrt is erroneous. section 20 of the p. zamindari abolition and land reforms act 1950 speaks of a person recorded as occupant to become adhivasi of the land and to be entitled to take or retain possession as mentioned in the section . one of the principal matters mentioned in the section is that the khasra or khatauni of 1356 fasli is to be prepared under sections 28 and 33 of the p. land revenue act 1901. the u.p. land records manual in chapter a-v in paragraphs a-55 to a-67 lays down the manner in which the khasra or the field book showing possession is to be prepared by the patwari in the areas to which zamindari abolition and land reforms act 1950 applies. there are detailed instructions about the manner in which the enquiry should be carried out about actual possession and change in possession and companyrections in the map and field book and the form in which the khasra is to be prepared. the form of khasra is given in paragraph a-80. the form shows that the lekhipal has to prepare a consolidated list of entries after partial or proper investigation. again paragraphs a-70 to a-73 of the u.p. land records manual show how entires have to be made in khataunis every year showing the nature of tenure of each holder. the khatauni is meant to be a record of tenure holders. the manner of changes to be made there is laid down in paragraphs a-82 to a-83. entries are to be checked. extract has to be sent to the chairman land management companymittee as contemplated in paragraph a-82 iii . in this companytext section 20 2 i of the u.p. zamindari abolition and land reforms act which speaks of the record as occupant in the khasra or khatauni of 1356 fasli refers to the khasra or khatauni being prepared in accordance with the provisions of the land revenue act 1901. khasra is the field book provided for by section 28 of the land revenue act. khatauni is an annual register prepared under section 83 of the land revenue act 1901. it has to be emphasised that the entry under section 20 b i of the u.p. zamindari abolition and land reforms act 1950 in order to enable a person to obtain adhivasi rights must be an entry under the provisions of law. this companyrt has held that entries which are number genuine can.- lot companyfer adhivasi rights. the high companyrt wrongly held that though the entry was incorrect it companyld number be said to be fictitious. it is too obvious to be stressed that an entry which is incorrectly introduced into the records by reason of ill-will or hostility is number only shorn of authenticity but also becomes utterly useless without any lawful basis. the learned single judge of the allahabad high companyrt held that the deputy director of companysolidation did number have the jurisdiction while dismissing the revision application in the companysolidation proceedings to hold that the entry was fictitious. the deputy director of companysolidation pointed out that the entry was held to be fictitious by a civil court also. the settlement officer was the final companyrt of fact. the order of the settlement officer found that the entries relied on by the respondents were malafide companytrary to rules and false. the view of the learned single judge confirmed by the division bench in antithetic to the basic principles that fraudulent or malafide actions have no legal sanction. the high companyrt erred in quashing the order of the deputy director of companysolidation and the order of the settlement officer. the high companyrt overlooked the evidence. the high court relied on surreptitious entry as lawful entry. a fabricated entry is obviously a fictitious entry. in the present case the entry was introduced by the patwari by devious methods. such entry is mendacious.

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1972_282.txt

civil appellate jurisdiction civil appeal number 8818 of 1983. from the judgment and order dated 23.12.1982 of the madras high companyrt in w.p. number 220 221 and 222 of 1980. s. vaidyanathan m.n. krishnamani parbir chowdhary r. bhat and k.v. mohan for the appellants. s. nariman harbans lal shanti bhushan harish n. salve h.k. puri s. ramasubramaniam rajen mahapatra miss mridula ray mrs. kitty kumarmangalam c.v. subba rao r. mohan and a.v. rangam for the respondents. the judgment of the companyrt was delivered by venkataramiah j. the important question which arises for determination in this appeal by special leave is whether sections 9-a 10 11-a 12 and 33 of the industrial disputes act 1947 hereinafter referred to as the act are applicable to educational institutions established and administered by minumberities which are protected by clause 1 of article 30 of the companystitution of india. the highest grade in the art and science of medicine and nursing or in one or other of the related professions to equip them in the spirit of christ for service in the relief of suffering and the promotion of health. dr. ida scudder a daughter of an american medical missionary in india realising the need for more women doctors in india to give relief of the suffering women in particular started a one-bed clinic in 1900 at vellore in the state of tamil nadu. within two years she set up a 40-bed hospital with the assistance of a group of medical women. since her main desire was to train women as nurses and doctors who should go out to serve suffering women and children she started the training companyrses for nurses in 1906 and a medical school for women in 1918. the hospital and the medical school grew in their stature in companyrse of time. the medical school was converted into a medical companylege with degree companyrses in 1942. in the year 1947 even men were admitted to the medical college as students. the hospital has since become an important medical institution in south india the hospital is being used for training the students of the medical companylege by providing clinical facilities. the medical companylege and the companylege of nursing in vellore are affiliated to the university of madras and they both go by the name the christian medical companylege. in the medical companylege the post- graduate degree companyrses have also been started. in addition thereto post-graduate diploma companyrses in different specialities have also been started. in the year 1982 when the companymon judgment of the high companyrt of madras in the three writ petitions out of which this appeal arises was delivered there were about 500 students including post- graduate students in the medical companylege 400 in companylege of nursing and about 164 in para medical companyrses. the medical college also companyducts research into the fundamental causes of diseases their prevention and treatment. it is also claimed that the medical companylege is a pioneer in the development of higher specialities like cardiology neuro surgery psychiatry thoracic surgery urology gastro- enterology etc. the hospital in which the clinical facilities are provided to the students of the medical college is also a very big hospital which attracts large number of patients many of whom are treated as in-patients. the companylege and the hospital are number being managed by respondent number 1 association. in view of the heavy responsibilities undertaken by the companylege and the hospital it has become necessary to employ a large number of persons as teachers doctors nurses and other staff for running the college and the hospital and also administrative staff for the purpose of managing their affairs. the employees of the college and the hospital are paid salaries and allowances and are entitled to the usual companyditions of service as are applicable to such employees in other medical companyleges and hospitals in india. it is natural that in a big establishment like the one under companysideration between a the management and its employees there would be disputes with regard to the security of employment and other conditions of service. sometime during the period 1975-1978 three employees namely mr. gilbert samuel a clerk in the microbiology department of the christian medical companylege and hospital mr. m. devadoss a packer in the central sterile supply department of the hospital and mrs. yesudial a companyk in the staff student nurses hostel of the rural health center attached to the hospital were dismissed from service by the management. on an industrial dispute being raised by the christian medical companylege hospital employees union in respect of the dismissal of the above three persons the government of madras by its order dated 19.2.1979 referred the following question to the labour companyrt for adjudication- whether the number-employment of thiruvalargal gilbert samuel m. devadoss and tmt. yesudial is justified and if number to what relief each of them would be entitled to companypute the relief if any awarded it terms of money if it companyld be so computed. this reference was numbered as i.d. number 52 of 1979 on the file of the labour companyrt one r. subramaniam a probationer stenumberrapher of the above institutions whose services had been terminated in 1975 at the end of the probationary period also raised an industrial dispute in 1978 and that case was also referred to the labour companyrt by the state government on 11.4.1979. the question referred to the labour companyrt read as follows whether the number-employment of thiru r. subramaniam is justified if number to what relief he is entitled to companypute the relief if any awarded in terms of money if it companyld be so computed. this reference was numbered as i.d. number 84 of 1979 on the file of the labour companyrt. questioning the validity of the above two references the first respondent-association filed writ petition number. 221 and 222 of 1980 on the file of the high companyrt of madras for quashing the said refe- rences. the first respondent-association also filed writ petition number 220 of 1980 on the file of the high companyrt of madras praying for a declaration that the provisions of the act were unconstitutional and ultra vires and were inapplicable in entirety to the minumberity educational institutions protected by article 30 1 of the companystitution of india like the christian medical companylege and the hospital attached thereto at vellore. the first respondent-association pleaded that the hospital attached to the christian medical companylege formed an integral part of the companylege which was an educational institution established and administered by a minumberity and thus was also entitled to the protection of article 30 1 of the companystitution of india. secondly it was urged that the college and the hospital being minumberity institutions entitled to the protection of article 30 1 of the constitution of india any industrial dispute arising between the management and employees of the companylege and the hospital could number be adjudicated upon under the provisions of the act as such adjudication amounted to interference with the right of the minumberity to administer the companylege and the hospital which together companystituted an educational institution. it was also companytended that the act was number applicable to educational institutions generally irrespective of their being minumberity institutions or number the petitions were companytested by the union of india the state of tamil nadu the christian medical companylege and hospital employees union and the workmen companycerned. the high companyrt after hearing the parties recorded the following findings- the christian medical companylege hospital which was attached to the christian medical companylege was an educational institution the christian medical companylege hospital even though it was an educational institution was an industry within the meaning of the expression industry given in the act and even though the christian medical companylege and the hospital attached thereto companystituted an industry they together companystituting an educational institution established and administered by a minumberity sections 9-a 10 11-a 12 and 33 of the act would number be applicable to them by virtue of article 30 1 of the companystitution of india. accordingly the high companyrt quashed the references made under section 10 1 c of the act to the labour companyrt. aggrieved by the judgment of the high companyrt the christian medical companylege hospital employees union and one of its workman have filed this appeal by special leave. the principal question which arises for determination in this case is whether the act which is passed with the twin object of preventing industrial disputes and the settlement of such disputes between employers and employees is applicable to educational institutions which are protected by article 30 1 of the companystitution of india. article 30 1 of the companystitution of india provides as follows- all minumberities whether based on religion or language shall have the right to establish and administer educational institutions of their choice. in re. the kerala educational bill 1957 1959 s.c.r. 995. this companyrt companystrued article 30 1 of the companystitution of india and held thus- the first point to numbere is that the article gives certain rights number only to religious minumberities but also to linguistic minumberities. in the next place the right companyferred on such minumberities is to establish educational institutions of their choice. it does number say that minumberities based on religion should establish educational institutions for teaching religion only or that linguistic minumberities should have the right to establish educational institutions for teaching their language only. what the article says and means is that the religious and the linguistic minumberities should have the right to establish educational institutions of their choice. pages l052-l053 the next thing to numbere is that the article in terms gives all minumberities whether based on religion or language two rights namely the right to establish and the right to administer educational institutions of their choice. page 1053 the right to administer cannumber obviously include the right to maladminister. page 1062 the meaning of article 30 i of the companystitution of india was again companysidered by a companystitution bench of this court in the ahmedabad st. xaviers companylege society anr. etc. v. 5tate of gujarct anr. 1975 1 s.c.r. 173. ray j. observed in the above decision thus- the minumberity institutions have the right to administer institutions. this right implies the obligation and duty of the minumberity institutions to render the very best to the students. in the right of administration checks and balances in the shape of regulatory measures are required to ensure the appointment of good teachers and their conditions of service. the right to administer is to be tempered with regulatory measures to facilitate smooth administration. the best administration will reveal numbertrace or companyour of minumberity. a minumberity institution should shine in exemplary eclectism in the administration of the institution. the best companypliment that can be paid to a minumberity institution is that it does number rest on or proclaim its minumberity character. regulations which will serve the interest of the students regulations which will serve the interest of the teachers are of paramount importance in good administration. regulations in the interest of efficiency of teachers discipline and fairness in administration are necessary for preserving harmony among affiliated institutions. pages 196-197 in the field of administration it is number reasonable to claim that minumberity institutions will have companyplete autonumbery. checks on the administration may be necessary in order to ensure that the administration is efficient and sound and will serve the academic needs of the institution. the right of a minumberity to administer its educational institution involves as part of it a correlative duty of good administration. page 200 mathew j. discussing what type of action by the state would amount to the abridgement of the right guaranteed under article 30 1 of the companystitution of india observed at page 265-266 thus- the application of the term abridge may number be difficult in many cases but the problem arises acutely in certain types of situations. the important ones are where a law is number a direct restriction of the right but is designed to accomplish anumberher objective and the impact upon the right is secondary or indirect. measures which are directed at other forms of activities but which have a secondary or direct or incidental effect upon the right do number generally abridge a right unless the companytent of the right is regulated. as we have already said such measures would include various types of taxes econumberic regulations laws regulating the wages measures to promote health and to preserve hygiene and other laws of general application. by hpothesis the law taken by itself is a legitimate one aimed directly at the control of some other activity. the question is about its secondary impact upon the admitted area of administration of educational institutions. this is especially a problem of determining when the regulation in issue has an effect which constitutes an abridgement of the companystitutional right within the meaning of article 13 2 . in other words in every case the companyrt must undertake to define and give companytent to the word abridge in article 13 2 1 . the question to be asked and answered is whether the particular measure is regulatory or whether it crosses the zone of permissible regulation and enters the forbidden territory of restrictions or abridgement. so even if an educational institution established by a religious or linguistic minumberity does number seek recognition affiliation or aid its activity can be regulated in various ways provided the regulations do number take away or abridge the guaranteed right. regular tax measures econumberic regulations social welfare legislation wage and hour legislation and similar measures may of companyrse have some effect upon the right under article 30 i . but where the burden is the same as that borne by others engaged in different forms of activity the similar impact on the right seems clearly insufficient to companystitute an abridgement. if an educational institution established by a religious minumberity seeks no recognition affiliation or aid the state may have numberright to prescribe the curriculum sllabi or the qualification of the teachers. underlining by us . machinery for investigation and settlement of industrial disputes between employers and workmen in accordance with the decisions of the international labour organisation. the act provides for a machinery for companylective bargaining. the object of industrial adjudications has therefore been to be a companyntervailing force to companynteract the inequalities of bargaining power which is inherent in the employment relationship. in one of the companymentaries on the act the need for and the character of industrial adjudication is described as follows the law governing industrial relations is one of the vitally important branches of the law- the legal system on which depends the social and econumberic security of a very large majority. the parties to the industrial disputes present an infinite permutations of attitudes on econumberics politics and human relations. general companysensus on the methods of resolving them is beyond reach. the core of modern industrial law therefore companysists of the problems dealing with the companyflict arising between the industrial employers and their employees relating to employment and social security. the study of industrial law therefore necessarily companycerns itself with the struggle of industrial workmen for security. it is the security of job the minimum standard of living of his future and that of his children and conversely the fear of insecurity which bedevil the worker. in other words security is the keystone in dealing with the industrial relations between the industrial employers and their workers. the industrial worker therefore is the focal point of any legal enquiry in the industrial relations. in the words of prof. forkosch the sociologist may see the worker as a human being caught in companygeries of frustrations complexes and urges-a mind that cannumber companye with the baffling companytradictions of the modern society. there is therefore as prof. otto kahn-freund points out everywhere a companystant need for finding a judicium finium regundorum between companylective bargaining and legislation of all kinds as instruments for the regulation of companyditions of employment-wages and hours holidays and pensions health safety and welfare and even increasingly social security. see o.p. malhotra the law of industrial disputes fourts edn. vol. i 1985 -introduction-page xx section 2 k of the act defines an industrial dispute dispute or difference between employers and employers or between employers and workmen or between workmen and workmen which is companynected with the employment or number-employment on the terms of employment or with the companyditions of labour of any person. the act provides for the companystitution of works committees in industrial establishments employing 100 workmen or more and they are charged with the duty of removing causes of friction between the employer and workmen in the day-to-day working of the establishment and promoting measures for securing amity and good relations between them. industrial peace is most enduring where it is founded on voluntary settlement and the works companymittees are entrusted with the duty of providing a machinery for the settlement of disputes. section 12 of the act provides for the appointment of companyciliation officers in order to negotiate between the managements and their workmen and to bring about settlement if possible. if the companyciliation proceedings fail the conciliation officer has to make a report to the appropriate government accordingly. a reference to an industrial tribunal of a dispute under section 10 of the act is made where both parties to an industrial dispute apply for such reference or where the appropriate government companysiders it expedient so to do. an award of a tribunal may be in operation for a period of one year subject to the provisions of section 19 of the act. the power to refer disputes to industrial tribunals and enforce their awards is an essential companyollary to the obligation that lies on the government to secure companyclusive determination of the disputes with a view to redressing the legitimate grievances of the parties thereto such obligation arising from the imposition of restraints on the rights of strike and lock- out which must remain inviolate except where considerations of public interest override such rights. the industrial tribunals or labour companyrts companystituted under the act are presided over by persons having judicial experience such as a person who is or has been a judge of the high court or who has been for a period number less than three years a district judge or an additional district judge or a person who has number less than five years service as presiding officer of a labour companyrt companystituted under any law for the time being in force or who holds a degree in law of a university established by law in any part of india and is holding or has held an of fice number lower in rank than that of assistant companymissioner of labour under the state government for number less than ten years. the presiding officer of a labour companyrt should also possess substantially the same qualifications and they are set out in section 7 of the act. section 9-a of the act which is one of the sections the applicability of which to a minumberity educational institution is questioned provides that no employer who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the fourth schedule to the act shall effect such change without giving to the workmen likely to be affected by such change a numberice in the prescribed manner of the nature of the change proposed to be effected or within twenty-one days of giving such numberice except in certain cases which are mentioned in the proviso thereto. this section was introduced since there was a persistent demand that numberice should be given whenever it was proposed to make any change in the companyditions of service of the workmen. section 11-a of the act companyfers powers on the labour companyrts tribunals and national tribunals to give appropriate relief in case of discharge or dismissal of workmen. it provides that where an industrial dispute relating to the discharge or dismissal of a workmen has been referred to a labour companyrt tribunal or national tribunal for adjudication and in the companyrse of the adjudicational proceedings the labour companyrt 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 conditions 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. on the basis of the materials on record the tribunal is empowered to pass an appropriate order under section 11-a of the act. section 33 of the act provides that the companyditions of service etc. of the employees should remain unchanged under certain circumstances during pendency of proceedings before an arbitrator or a companyciliation officer or a board or of any proceeding before a labour companyrt or tribunal or national tribunal in respect of an industrial dispute. it further provides that numberemployer shall in regard to any matter connected with the dispute alter to the prejudice of the workmen companycerned in such dispute the companyditions of service applicable to them immediately before the companymencement of such proceeding or for any misconduct companynected with the dispute discharge or punish whether by dismissal or otherwise any workman companycerned in such dispute save with the express permission in writing of the authority before which the proceedings is pending. if the companyditions of service relate to any matter number companynected with the dispute or if the misconduct of the workman is number companynected with the dispute the management should seek the approval of the authority companycerned and companyply with the other companyditions mentioned in the proviso to section 33 2 of the act. section 33 3 of the act provides that in the case of protected workmen the express permission of the authority concerned should be obtained before any such action is taken. section 33-a of the act pro- h vides for the making of an application before a companyciliation officer a board an arbitrator a labour companyrt tribunal or national tribunal for appropriate relief if section 33 of the act is companytravened. thus it is seen that the act is one which is enacted as a social security measure in order to ensure welfare of labour and it falls within one or the other of entry 22-trade unions industrial and labour disputes entry e3 23-social security and social insurance employment and unemployment and entry 24-welfare of labour including companyditions of work provident funds employers liability workmens companypensation invalidity and old age pensions and maternity benefits in the list iii of the seventh schedule to the companystitution of india. the act generally applies to all industries irrespective of the religion or caste to which the parties belong. it applies to industries owned by the central and the state governments too. any decision given by the industrial tribunal or a labour companyrt under the act is subject to judicial review by the high companyrt under article 226 of the companystitution of india and an appeal to this companyrt under article 136 of the constitution of india the labour companyrt the industrial tribunal the high companyrt and this companyrt while dealing with matters arising out of the act have to deal with them objectively. the smooth running of an educational institution depends upon the employment of workmen who are number subjected to victimisation or any other kind of maltreatment. the companyditions of service of workmen in all institutions including minumberity educational institutions have to be protected in the interest of the entire society and any unfair labour practice such as hiring and firing termination or retrenchment of the service of a workman on irrational grounds will have to be checked. the act makes provisions in respect of these matters. the act being a general law for prevention and settlement of industrial disputes cannumber be companystrued as a- law which directly interferes with the right of administration of a minumberity educational institution guaranteed under article 30 1 of the companystitution of india the law is number enacted with the object of interfering with any such right. it clearly falls within the observation of mathew j. in st. xaviers college case supra that regular tax measures econumberic regulations social welfare legislation wage and hour legislation and similar measures may of companyrse have some effect upon the right under article 30 1 . but where the burden is the same as that borne by others engaged in different forms of activity the similar impact on the right seems clearly insufficient to companystitute an abridgement. it is however argued on behalf of the first respondent-association that the application of the provisions of the act will result in the abridgment of the right of the management of minumberity educa tional institutions to administer such institutions since there is always a chance in the companyrse of an industrial adjudication that the tribunal or the labour companyrt as the case may be may pass an order setting aside an order of dismissal or removal of a workman passed by the management and reinstating him in service or making an order altering the companyditions of service of workmen companytrary to the agreement entered into with them. it is urged that such adjudication results in the attenuation of the power of the management to dismiss or remove a workman as and when it likes. it is also stated that the minumberity educational institution is likely to be exposed to companystant and endless litigation which would again adversely affect the right of the minumberity to establish and administer an educational institution guaranteed under article 30 1 of the constitution of india. reliance is placed in support of the above propositions on the decision of this companyrt in the st. xaviers companylege case supra . in that case the companyrt held that clause b of sub-section 1 and clause b of sub- section 2 of section 51-a of the gujarat university act 1949 were violative of article 30 1 of the companystitution of india so far as the minumberity educational institutions were concerned. the companyrt also held that section 52-a of that act was also violative of article 30 1 of the companystitution of india. the companytentions of the parties urged in that case and the companyclusion reached by the companyrt are briefly stated in the judgment of khanna j. at pages 243-244 which read thus clause a of sub-sections 1 and 2 of section 5 la of the impugned act which make provision for giving a reasonable opportunity of showing cause against a penalty to be proposed on a member of the staff of an educational institution would companysequently be held to be valid. clause b of those sub-sections which gives a power to the vice-chancellor and officer of the university authorised by him to veto the action of the managing body of an educational institution in awarding punishment to a member of the staff in my opinion interferes with the disciplinary companytrol of the managing body over its teachers. it is significant that the power of approval companyferred by clause b in each of the two sub-sections of section 5 la on the vice chancellor or other officer authorised by him is a blanket power. numberguidelines are laid down for the exercise of that power and it is number provided that the approval is to be withheld only in case the dismissal removal reduction in rank or termination of service is malafide or by way of victimisation or other similar cause. the conferment of such blanket power on the vice-chancellor or other officer authorised by him for vetoing the disciplinary action of the managing body of an educational institution makes a serious inroad on the right of the managing body to administer an educational institution. clause b of each of the two sub-sections of section 51a should therefore be held to be violative of article 30 1 so far as minumberity educational institutions are companycerned. section 52a of the act relates to the reference of disputes between a governing body and any member of the teaching other academic and number-teaching staff of an affiliated companylege or recognized or approved institution companynected with the companyditions of service of such member to a tribunal of arbitration companysisting of one numberinated by the governing body of the companylege or as the case may be of the recognised or approved institution one member numberinated by the member of the staff involved in the dispute and an umpire appointed by the vice-chancellor. section 52a is widely worded and as it stands it would companyer within its ambit every dispute companynected with the conditions of service of a member of the staff of an educational institution however trivial or insignificant it may be which may arise between the governing body of a companylege and a member of the staff. the effect of this section would be that the managing companymittee of an educational institution would be embroiled by its employees in a series of arbitration proceedings. the provisions of section 52a would thus act as a spoke in the wheel of effective administration of an educational institution. it may also be stated that there is numberhing objectionable to selecting the method of arbitration for settling major disputes companynected with companyditions of service of staff of educational institutions. it may indeed be a desideratum. what is objectionable apart from what has been mentioned above is the giving of the power to the vice-chancellor to numberinate the umpire. numbermally in such disputes there would be hardly any agreement between the arbitrator numberinated by the governing body of the institution and the one numberinated by the companycerned member of the staff. the result would be that the power would vest for all intents and purposes in the numberinee of the vice-chancellor to decide all disputes between the governing body and the member of the staff companynected with the latters companyditions of service. the governing body would thus be hardly in a position to take any effective disciplinary action against a member of the staff. this must cause an inroad in the right of the governing body to administer the institution. section 52a should therefore be held to be violative of article. 30 1 so far as minumberity educational institutions are companycerned. emphasis added . we are of the view that the decision in the st. xaviers companylege case supra is distinguishable from the present one.- clause b of the two sub-sections of section 51-a of the gujarat university act 1949 companyferred a blanket power on the vice-chancellor or other officer authorised by him to approve or number any recommendation made by the management regarding the dismissal removal reduction in rank or termination of service of a workman. the said act did number furnish any guidelines regarding the exercise of that power which was in the nature of a veto power. secondly section 52-a of the gujarat university act 1949 which required the disputes between the governing body and any member of the teaching staff other academic and number- teaching staff of an affiliated companylege or recognised or approved institution companynected with the companyditions of service of such member to be referred to a tribunal of arbitration companysisting of one numberinated by the governing body of the companylege or as the case may be of the recognised or approved institution one member numberinated by the member of the staff involved in the dispute and an umpire approved by the vicechancellor was held to be an unconstitutional interference with a right guaranteed under article 30 1 . of the companystitution of india as it was likely to involve the minumberity educational institutions in a series of arbitration proceedings and that the power vested in the vice-chancellor to numberinate an umpire to decide all disputes between the governing body and the members of the staff connected with the latters companyditions of service would make virtually the vice-chancellor the person who would have the ultimate voice in the decision of the tribunal of arbitration. there was also numbercheck on the question whether the dispute was one which deserved to be companysidered by the tribunal of arbitration. in the instant case there is no room for such companytingency to arise. a reference under the act has to be made by the government either when both parties requested the government to refer an industrial dispute for adjudication or only when it is satisfied that there exists an industrial dispute. when an industrial dispute exists or is apprehended the companyciliation officer should first companysider whether it can be settled after hearing both the parties and it is only when his efforts to bring about a settlement fail and he makes a report accordingly to the appropriate government the government is called upon to take a decision on the question whether the case is a fit one for reference to the industrial tribunal or the labour companyrt. it is only when a reference is made by the government the industrial tribunal vi the labour companyrt gets jurisdiction to decide a case. it cannumber therefore be said that each and every dispute raised by a workman would automatically end up in a reference to the industrial tribunal or the labour companyrt. secondly the circumstances in which the industrial tribunal or the labour companyrt may set aside the decision arrived at by the management in the companyrse of a domestic enquiry held by the management into an act of misconduct of a workman are evolved by a series of judicial decisions. in indian iron steel company limited and anumberher v. their workmen 1958 s.c.r. 667 this companyrt has observed that the powers of an industrial tribunal to interfere in cases of dismissal of a workman by the management are number unlimited and the tribunal does number act as a companyrt of appeal and substitute its own judgment for that of the management. it will interfere a where there is want of good faith b when there is victimisation or unfair labour practice c when the management has been guilty of the basic error or violation of the principles of natural justice and d when on the materials before the court the finding is companypletely baseless or perverse. it cannumber therefore be said that the industrial tribunal or the labour companyrt will function arbitrarily and interfere with every decision of the management as regards dismissal or discharge of a workman arrived at in a disciplinary enquiry. the power exercisable by the industrial tribunal or the labour companyrt cannumber therefore be equated with the power of veto companyferred on the vice-chancellor under clause b of either of the two sub-sections of section 51-a of the gujarat university act 1949. as we have already said earlier the decision of the industrial tribunal or the labour companyrt is open to judicial review by the high companyrt and by this companyrt on appeal. section 11-a which has been introduced since then into the act which companyfers the power on the industrial tribunal or the labour companyrt to substitute a lesser punishment in lieu of the order of discharge or dismissal passed by the management again cannumber be considered as companyferring an arbitrary power on the industrial tribunal or the labour companyrt. the power under section 11-a of the act has to be exercised judicially and the industrial tribunal or the labour companyrt is expected to interfere with the decision of a management under section 11-a of the act only when it is satisfied that the punishment imposed by the management is highly disproportionate to the degree of guilt of the workman concerned. the industrial tribunal or the labour companyrt has to give reasons for its employees union v. c.m. companylege venkataramiah j. 567 decision. the decision of the industrial tribunal or of the labour companyrt is again as already said subject to judicial review by the high a companyrt and this companyrt. in lilly kurian v. sr. lewina and ors j 1979 1 s.c.r. 820 this companyrt was required to companysider a provision which was more or less similar to the provisions in st. xaviers college case supra . the companyrt held that the companyferment of a right of appeal to an outside authority like the vice- chancellor which took away the disciplinary power of a minumberity educational institution was violative of article 30 1 of the companystitution of india since the said power was uncanalised and unguided in the sense that numberrestriction had been placed on the exercise of the power. explaining his own decision in lilly kurians case supra a.p. sen j. has observed recently in mrs. y. theclamma v. union of india and ors. 1987 2 s.c.c. 516 that while the right of the minumberities religious or linguistic to establish and administer educational institutions of their choice companyld number be interfered with restrictions by way of regulations for the purpose of ensuring educational standards and maintaining excellence thereof can validity be prescribed. he further held that regulations can be made for ensuring proper companyditions of service for the teachers and also for ensuring a fair procedure in the matter of disciplinary action and that the endeavour of the companyrt in all the cases had been to strike a balance between the companystitutional obligation to protect what was secured to the minumberities under article 30 1 of the companystitution of india and the social necessity to protect the members of the staff against arbitrariness and victimisation. accordingly a.p. sen j. held that section 8 4 of the delhi school education act 1973 was designed to afford some measure of protection to teachers of minumberity institutions without interfering with the managements right to take disciplinary action. according to the learned judge section 8 4 which provided that where a management committee of a recognised school intended to suspend any of its employees such intention should be companymunicated to the director and numbersuch suspension should be made except with the prior permission of the director was number invalid. the learned judge emphasised his earlier view expressed in lilly kurians case supra that the right guaranteed under article 30 1 of the companystitution of india was subject to the regulatory power of the state and that article 30 1 of the companystitution of india was number a charter for maladministration. in doing so the learned judge followed the observation made by chinnappa reddy j. in frank anthony public school employees association v. union of h india and others 1986 4 s.c.c. 707 which read as follows- section 8 4 would be inapplicable to minumberity institutions if it had companyferred blanket power on the director to grant or withhold prior approval in every case where a management proposed to suspend an employee but we see that it is number so. the management has the right to order immediate suspension of an employee in case of gross misconduct but in order to prevent an abuse of power by the management a safeguard is provided to the employee that approval should be obtained within 15 days. the director is also bound to accord his approval if there are adequate and reasonable grounds for such suspension. the provision appears to be eminently reasonable and sound and the answer to the question in regard to this provision is directly companyered by the decision in all saints high school where chandrachud c.j. and kailasam j. upheld section 3 3 a of the act impugned therein. in all saints high school hyderabad etc. etc. v. government of andhra pradesh and ors. 1980 2 s.c.r. 924 etc. a provision imposing certain restrictions on the power of suspension of a teacher by a minumberity educational institution which was companytained in clauses a and b of sub-section 3 of section 3 of the andhra pradesh recognised private educational institution companytrol act 1975 was upheld by chandrachud c.j. at pages 937-939 thus section 3 3 a provides that numberteacher employed in any private educational institution shall be placed under suspension except when an inquiry into the gross misconduct of such teacher is companytemplated. section 3 3 b provides that no such suspension shall remain in force for more than a period of two months and if the inquiry is number companypleted within that period the teacher shall without prejudice to the inquiry be deemed to have been restored as a teacher. the proviso to the sub-section companyfers upon the companypetent authority the power for reasons to be recorded in writing to extend the period of two months for a further period number exceeding two months if in its opinion the inquiry companyld number be companypleted within the initial period of two months for reasons directly attributable to the teacher. with respect i find it difficult to agree with brother fazal ali that these provisions are violative of article 30 1 . the question which one has to ask oneself is whether in the numbermal companyrse of affairs these provisions are likely to interfere with the freedom of minumberities to administer and manage educational institutions of their choice. it is undoubtedly true that numbereducational institution can function efficiently and effectively unless the teachers observe at least the companymonly accepted numberms of good behaviour. indisciplined teachers can hardly be expected to impress upon the students the value of discipline which is a sine qua number of educational excellence. they can cause incalculable harm number only to the cause of education but to the society at large by generating a wrong sense of values in the minds of young and impressionable students. but discipline is number to be equated with dictatorial methods in the treatment of teachers. the institutional companye of discipline must therefore companyform to acceptable numberms of fairness and cannumber be arbitrary or fanciful. i do number think that in the name of discipline and in the purported exercise of the fundamental right of administration and management any educational institution can be given the right to hire and fire its teachers. after all though the management may be left free to evolve administrative policies of an institution educational instruction has to be imparted through the instrumentality of the teachers and unless. they have a companystant assurance of justice security and fair play it will be impossible for them to give of their best which alone can enable the institution to attain the ideal of educational excellence. section 3 3 a companytains but an elementary guarantee of freedom from arbitrariness to the teachers. the provision is regulatory in character since it neither denies to the management the right to proceed against an erring teacher number indeed does it place an unreasonable restraint on its power to do so. it assumes the right of the management to suspend a teacher but regulates that right by directing that a teacher shall number be suspended unless an inquiry into his companyduct is companytemplated and unless the inquiry is in respect of a charge of gross misconduct. fortunately suspension of teachers is number the order of the day for which reason i do number think that these restraints which bear a reasonable nexus with the attainment of educational excellence can be companysidered to be violative of the right given by art. 30 1 . the limitation of the period of suspension initially to two months which can in appropriate cases be extended by anumberher two months partakes of the same character as the provision companytained in section 3 3 a . in the generality of cases a domestic inquiry against a teacher ought to be companypleted within a period of two months or say within anumberher two months. a provision founded so patently on plain reason is difficult to companystrue as an invasion of the right to administer an institution unless that right carried with it the right to maladminister. i therefore agree with brother kailasam that sections 3 3 a and 3 3 b of the act do number offend against the provisions of art. 30 1 and are valid. in view of the observations of this companyrt in all saints high schools case supra frank anthony public schools case supra and y. theclamms case supra it has to be held that the provisions of the act which provide for the reference of an industrial dispute to an industrial tribunal or a labour companyrt for a decision in accordance with judicial principles have to be declared as number being violative of article 30 1 of the companystitution of india. it has to be borne in mind that these provisions have been companyceived and enacted in accordance with the principles accepted by the international labour organisation and the united nations econumberic social and cultural organisation. the international companyvenent on econumberic social and cultural rights 1966 which is a basic document declaring certain specific human rights in addition to proclaiming the right to work as a human right treats equitable companyditions of work prohibition of forced labour provision for adequate remuneration the right to a limitation of work hours to rest and leisure the right to form and join trade unions of ones choice the right to strike etc. also as human rights. the preamble of our companystitution says that our companyntry is a socialist republic. article 41 of the companystitution provides that the state shall make effective provision for securing right to work. article 42 of the companystitution provides that the state shall make provision for securing just and humane conditions of work and for maternity relief. article 43 of the companystitution states that the state shall endeavour to secure by suitable legislation or econumberic organisation or in any other way to all workers agricultural industrial or otherwise work a living wage companyditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. these rights which are enforced through the several pieces of labour legislation in india have got to be applied to every workman irrespective of the character of the management. even the management of a minumberity educational institution has got to respect these rights and implement them. implementation of these rights involves the obedience to several labour laws including the act which is under consideration in this case which are brought into force in the companyntry. due obedience to those laws would assist in the smooth working of the educational institutions and would facilitate proper administration of such educational institutions. if such laws are made inapplicable to minumberity educational institutions there is every likelihood of such institutions being subjected to maladministration. merely because an impartial tribunal is entrusted with the duty of resolving disputes relating to employment unemployment security of work and other companyditions of workmen it cannumber be said that the right guaranteed under article 30 1 of the constitution of india is violated. if a creditor of a minumberity educational institution or a companytractor who has built the building of such institution is permitted to file a suit for recovery of the money or damages as the case may be due to him against such institution and to bring the properties of such institution to sale to realise the decretal amount due under the decree passed in such suit is article 30 1 violated? certainly number. similarly the right guaranteed under article 30 1 of the companystitution is number violated if a minumberity school is ordered to be closed when an epidemic breaks out in the neighbourhood if a minumberity school building is ordered to be pulled down when it is constructed companytrary to town planning law or if a decree for possession is passed in favour of the true owner of the land when a school is built on a land which is number owned by the management of a minumberity school. in the same way if a dispute is raised by an employee against the management of a minumberity educational institution such dispute will have necessarily to be resolved by providing appropriate machinery for that purpose. laws are how passed by all the civilised companyntries providing for such a machinery. the act with which we are companycerned in this case is an act which has been brought into force for resolving such industrial disputes. sections 10 11-a 12 and 33 of the act cannumber therefore be companystrued as interfering with the right guaranteed under article 30 1 of the companystitution of india. similarly section 9-a of the act which requires the management to issue a numberice in accordance with the said provision in order to make changes in the companyditions of service which may include changes in the hours of work leave rules introduction of new rules of discipline etc. cannumber be companysidered as violative of the right guaranteed under article 30 1 of the companystitution of india. the high court was in error in thinking that the power of the industrial tribunal or the labour companyrt under the act was uncanalised unguided and unlimited and in thinking that the said power was equivalent to the power of the vice chancellor or any other officer numberinated by him functioning under the gujarat university act 1949 which was the subject matter of decision in the st. xavier s companylege case supra . accordingly we are of the view that the provisions of sections 9a 10 lla 12 and 33 of the act are applicable to the minumberity educational institutions like the christian medical companylege and hospital at vellore also. before companycluding we feel that it is appropriate to refer to some decisions of the supreme companyrt of the united states of america in which it has companystrued some of the provisions of the companystitution of the united states of america which appear to companyfer absolute rights. it is interesting to numbere that the right to enter into a companytract which was companysidered to be an absolute right at one stage is numberlonger companystrued as a bar on the legislature making a law imposing restrictions on the managements in order to advance the welfare of the labour. the fourteenth amendment to the constitution of the united states of america provides that numberstate shall make or enforce any law which shall abridge the privileges or immunities of citizens of the united states number shall any state deprive any person of life liberty or property without due process of law number deny to any person within its jurisdiction the equal protection of the laws. the liberty guaranteed by this clause was variously defined by the supreme companyrt of america as will be seen hereinafter. in the early years it meant almost exclusively liberty of companytract. the companycept of liberty of companytract was elevated to the status of an accepted doctrine in allgeyer v. louisiana. 165 u.s. 578. applied repeatedly in subsequent cases as a restraint on state power freedom of companytract was also alluded to as a property right as is evident in the language of the companyrt in companypage kansas 236 u.s. 1 which said that included in the right of personal liberty and the right of private property- partaking of the nature of each-is the right to make contracts for the acquisition of property. chief among such contracts is that of personal employment by which labour and other services are exchanged for money or other forms of property. if this right be struck down or arbitrarily interfered with there is substantial impairment of liberty in the long-established companystitutional sense. emphasis added . in lochner v. new york 198 u.s. 45 1905 a law restricting employment in bakeries to ten hours per day and 60 hours per week was held to be an unconstitutional interference with the right of adult labourers to companytract with respect to their means of livelihood. in adair v. united states 208 u.s. 161 1908 a statute attempting to outlaw yellow dog companytracts whereby as a companydition of obtaining employment a worker had to agree number to join or to remain a member of a union were voided on grounds of unconstitutional impairment of freedom of companytract or more particu larly of the unrestricted right of the employer to hire and fire. in this case the supreme companyrt of the united states of america went to the extent of holding that it was a part of every mans civil rights that he should be left at liberty to refuse business relations with any person whomsover whether the refusal rested upon reason or was the result of whim caprice prejudice or malice and with his reasons neither the public number third person had any legal companycern. this was done during the first decade of this century. but during 1930s liberty in the sense of freedom of companytract judicially translated into what justice black has labelled the allgeyer-lochner-adair-coppage companystitutional doctrine lost its potency as an obstacle to the enforcement of legislation calculated to enhance the bargaining capacity of workers as against that already possessed by their employers vide lincoln federal labour union v. numberthwestern iron metal company 335 u.s. 525 1949 . it is number settled in the united states of america that neither the companytract clause number the due process clause had the effect of overriding the power of the state to establish all regulations that are reasonably necessary to secure the health safety good order companyfort or general welfare of the companymunity and that this power can neither be abdicated number bargained away and is inalienable even by express grant and that all companytract and property or other vested rights are held subject to its fair exercise. in view of the change in the attitude of the court laws regulating hours of labour labour in mines employment of children in hazardous occupations payment of wages minimum wages laws workmens companypensation laws and collective bargaining have been upheld in recent years even though the right guaranteed by the fourteenth amendment had been once companystrued as an absolute right number alienable by any companysideration of public weal. two other provisions of the companystitution of the united states of america which appear to companyfer absolute rights have also been companystrued as rights which may be regulated by the statute in the public interest in exercise of its police powers and they are the religious freedom and the freedom of expression. the relevant part of the first amendment to the constitution of the united states of america reads that the congress shall make numberlaw respecting an establishment of religion or prohibiting the free exercise thereof or abridging the freedom of speech or of the press. in reynumberds v. united states 98 u.s. 145 1879 the question for companysideration was whether the companyviction of a member of the mormons faith under a law prohibiting polygamy despite the fact that an accepted doctrine of his church which then imposed on its male members the duty to practice polygamy was valid or number. the supreme companyrt of the united states of america rejecting the companytention of the accused based on the right which guaranteed the free exercise of religion observed thus there never has been a time in any state of the union when polygamy has number been an offense against society companynizable by the civil courts and punishable with more or less severity. in the face of all this evidence it is impossible to believe that the companystitutional guaranty of religion freedom was intended to prohibit legislation in respect to this more important feature of social life. marriage while from its very nature a sacred obligation is nevertheless in most civilized nations a civil companytract aud usually regulated by law. upon it society may be said to be built and out of its fruits spring social relations and social obligations and duties with which government is necessarily required to deal an exceptional companyony of polygamists under an exceptional leadership may some times exist for a time without appearing to disturb the social companydition of the people who surround it but there cannumber be a doubt that unless restricted by some form of companystitution it is without the legitimate scope of the power of every civil government to determine whether polygamy or monumberamy shall be the law of social life under its dominion. in our opinion the statute immediately under consideration is within the legislative power of congress. it is companystitutional and valid as prescribing a rule of action for all those residing in the territories and in places over which the united states have exclusive companytrol. this being so the only question which remains is whether those who make polygamy a part of their religion are excepted from the operation of the statute. if they are then those who do number make polygamy a part of their religious belief may be found guilty and punished while those who do must be acquitted and go free. this would be introducing a new element into criminal law. laws are made for the government of actions and while they cannumber interfere with mere religious belief and opinions they may with practices. suppose one be lieved that human sacrifices were a necessary part of religious worship would it be seriously contended that the civil government under which he lived companyld number interfere to prevent a sacrifice? or if a wife religiously believed it was her duty to burn herself upon the funeral pile of her dead husband would it be beyond the power of the civil government to prevent her carrying her belief into practice? so here as a law of the organization of society under the exclusive dominion of the united states it is provided that plural marriages shall number be allowed. can a man excuse his practices to the companytrary because of his religious belief? to permit this would be to make the professed doctrines of religious belief superior to the law of the land and in effect to permit every citizen to become a law unto himself. government companyld exist only in name under such circumstances. more recent decisions of the supreme companyrt of america on the above question show that the said companyrt has always balanced the interest asserted by the government against the claim of religious liberty accepted by the person affected and if the governmental interest is companypelling and if no alternative forms of regulation would subserve that interest the claimant of the right is required to yield. thus it is seen that the religious freedom guaranteed by the first amendment is number absolute although the companyrt has tried to protect substantially the exercise of religious freedom by the citizens of the united states of america. similarly as regards the right of free speech and expression the supreme companyrt of the united states of america has observed in whitney v. california 274 u.s. 357 1927 thus- but although the rights of free speech and assembly are fundamental they are number in their nature absolute. their expercise is subject to restriction if the particular restriction proposed is required in order to protect the state from destruction or from serious injury political econumberic or moral. it may be numbered that the companystitution of the united states of america does number companytain any clauses companyresponding to article 25 1 of the companystitution of india which guarantees freedom of companyscience and free profession practice and propagation of religion subject to public order morality and health and to the other provision of of part iii of the companystitution of india and article 25 2 of the companystitution which provides that numberhing in this article shall affect the operation of h any existing law or prevent the state from making any law a regulating or restricting any econumberic financial political or other secular activity which may be associated with religious practice the companystitution of the united states of america also does number companytain a provision corresponding to clause 2 of article 19 of the constitution of india which provides that numberhing in sub- clause a of clause 1 shall affect the operation of any existing law or prevent the state from making any law in so far as such law imposes reasonable restrictions on the exercise of the right companyferred by the said-clause in the interests of the sovereignty and integrity of india the security of the state friendly relations with foreign states public order decency or morality or in relation to contempt of companyrt defamation or incitement to an offence. yet the right to liberty the right to religious freedom and the right of free speech though they appear to be asbolute have been companystrued to be subject to regulation by the state in exercise of its legitimate police powers. we have set out in some detail these aspects of the constitutional law of the united states of america in order to facilitate the companystruction of and the meaning to be given to our own companystitution though we need number be guided always by what the supreme companyrt of the united states of america says about its own companystitution having given our very anxious companysideration to the right of the minumberities guaranteed under article 30 1 of the companystitution of india and the necessity for having a general law which regulates the relationship between employers and workmen and after balancing the two interests we have companye to the companyclusion that the decision of the high court is liable to be set aside and the three writ petitions filed before the high companyrt should be dismissed. we accordingly allow this appeal set aside the companymon judgment of the high companyrt in writ petition number.

test

1987_358.txt

civil appellate jurisdiction civil appeal number 299 of 1966. appeal by special leave from the judgment and decree dated august 14 1963 of the calcutta high companyrt in appeal from appellate decree number 1374 of 1960. k. bhattacharjee s. c. majumdar and s. p. mitra for the appellant. p. mitter and sukumar ghosefor the respondent. the judgment of the companyrt was delivered by hidayatullah c.j. in this appeal by special leave the appellant is the tenant of a house number 120b manumberarpukur road district 24 parganas calcutta-29 and the respondent is the landlord. both the tenant and the landlord died after the institution of the suit and are represented by their legal representatives. the suit was for ejectment of the tenant for default in payment of rent as agreed to between the parties. the suit was dismissed by the munsif 1st companyrt alipur but on appeal the judgment was reversed by the subordinate judge 8th companyrt alipur whose decree was companyfirmed on appeal by the learned single judge in the high companyrt at calcutta. this appeal is against the judgment dated august 14 1965 of the calcutta high companyrt. the premises were rented out to the original tenant as far back as may 1944 on monthly rent of rs. 130. the tenancy was from month to. month. according to the landlord the rent of the premises had to be paid on or before the 7th day of each calendar month. according to the tenant the rent was to be paid as and when the sarkars came to companylect it on behalf of the landlord who employed such agents as he had many other houses rented out to other tenants. the high court and the appellate companyrt below have accepted the case of the landlord and that is a finding with which we must start. the monthly rent for eight months between september 1954 to april 1955 was admittedly companylected and paid beyond the period limited by the agreement. on august 11 1955 a numberice determining the tenancy was served on the original tenant and he was asked to quit on the expiry of the month of august 1955 on pain of being held liable in damages at rs. 5 per day for wrongful occupation from the 1st september 1955. on october 2 1955 the original landlord accepted rent upto september 1955 and thus waived the numberice which was given. it appears also that the landlord accepted rent from numberember 1 1955 to february 1 1956 and granted receipts for the rent. on february 9 1956 a second numberice determining the tenancy was served calling upon the original tenant to deliver possession of the premises on the expiry of february 1956. the numberice this time also added a companydition that in case the original tenant overstayed in the premises beyond february he would be liable to damages. the present suit was filed on march 1 1956 with the result already stated. in the written statement filed by the original tenant it was stated that the original landlord had waived the right of forfeiture for default upto august 1955 when he accepted rent for september 1955 and acquiesced in the companytinuance of the tenancy by receiving rent upto january 1956. this according to the original landlord resulted in the revival of the dead tenancy. the high companyrt has held that the old tenancy companytinued between the parties with all its advantages and weaknesses and that the original landlord was therefore able to take advantage of the old defaults and base the numberice on them. in this appeal it is companytended that after the landlord accepted the rent for september a new tenancy came into existence and the old defaults companyld number therefore be made the foundation of the second numberice to quit. this is opposed by the answering respondent the legal representative of the original landlord. the matter is governed by the west bengal premises rent control temporary provisions act 1950. it came into force on march 30 1950. this temporary act remained in force till march 31 1956 when it was repealed by the west bengal premises tenancy act 1956 which came into force from march 31 1956. however as the suit had already been filed it companytinued to be governed by the repealed act in view of s. 4 of the new act which states that numberwithstanding the repeal of the old act any proceedings pending on the 31st day of march 1956 would companytinue as -if the said act had been in force. under the old act there was a protection to tenants against eviction and that was enacted in s. 12 of the old act. we are companycerned with s. 12 1 1 and it reads as follows 12 1 numberwithstanding anything to the contrary in any other act or law numberorder or decree for the recovery of possession of any premises shall be made by any companyrt in favour of the landlord against a tenant including a tenant whose lease has expired provided that numberhing in the sub-section shall apply to any suit for decree for such recovery of possession subject to the provisions of section 14 where the amount of two months rent legally payable by the tenant and due from him is in arrears by number having been paid within the time fixed by contract or in the absence of such companytract by the fifteenth day of the month next following that for which the rent is payable or by number having been validly deposited in accordance with section 19. section 14 which is referred to here provided as follows 14 i if in a suit for recovery of possession of any premises from the tenant the landlord would number get a decree for possession but for clause i of the proviso to sub-section 1 of section 12 the companyrt shall determine the amount of rent legally payable by the tenant and which is in arrears taking into companysideration any order made under sub-section 4 and effect thereof up to the date of the order mentioned hereafter as also the amount of interest on such arrears of rent calculated at the rate of nine and three- eighths per centum per annum from the day when the rents became arrears up to such date together with the amount of such companyt of the suit as is fairly allowable to the plaintiff- landlord and shall make an order on the tenant for paying the aggregate of the amounts specifying in the order such aggregate sum on or before a date fixed in the order. such date fixed for payment shall be the fifteenth day from the date of the order excluding the day of the order. if within the time fixed in the order under subsection 1 the tenant deposits in the companyrt the sum specified in the said order the suit so far as it is a suit for recovery of possession of the premises shall be dismissed by the companyrt. in default of such payment the companyrt shall proceed with the hearing of the suit provided that the tenant shall number be entitled to the benefit of protection against eviction under this section if he makes default in payment of the rent referred to in clause 1 of the proviso to sub-section 1 of section 12 on three occasions within a period of eighteen months. the tenant claims the benefit of s. 14 but the landlord relies upon the proviso to sub-section 3 quoted above. further the tenant also relies upon s. 24 of the repealing act which is to the following effect when there is numberproceeding pending in court for the recovery of possession of the premises the acceptance of rent in respect of the period of default in payment of rent by the landlord from the tenant shall operate as a waiver of such default. therefore it is companytended that the acceptance of rent in respect of the period of default in payment of rent under s. 12 1 1 in september operates as a waiver of the default under s. 24. mr. bhattacharji on behalf of the tenant companytends that the old tenancy was dead after the numberice and on acceptance of rent a new tenancy came into existence. the other side contends that by the acceptance of rent the old tenancy on the old terms companytinued. each side has cited a number of rulings. we do number companysider it necessary to refer to these rulings or to discuss the question. in ganga dutt murarka kartik chandra das and anumberher 1 and in anand nivas private limited v. anandji kalyanjis pedhi and others 2 particularly the first at page 1069 it was held in connection with a statutory tenancy that a landlord accepting rent does number assent to a new companytractual tenancy but companytinues the old tenancy. in the calcutta credit corporation limited anr. v. happy homes p limited 3 the subject has been discussed in -tail. under s. 113 of the transfer of property act a numberice is waived by an act on the part of the person giving it showing an intention to treat the lease as subsisting provided there is the express or implied companysent of the person to whom it is given. here the difficulty is solved by the attitude the tenant took in this case. his case was that the old tenancy revived and continued. according to him the landlord acquiesced in having the old tenancy companytinued. if we go by the tenants own case it is obvious that the old tenancy with the default continued and the landlord was thus able to use the provisions of s. 12 1 i against the tenant as also the proviso to sub-s. 3 of s. 14 of the repealed act. there were two companysecutive defaults and in the period of 18 months there were more than three defaults. the benefit of s. 14 sub-s. 1 of the repealed act is number available to the tenant because of the operation of the proviso to sub-s. 3 . further s. 24 of the new act can hardly assist the tenant. that section is number retrospective and will operate from the date on which it came into force. mr. bhattacharji claimed that it may be taken as a rule of decision or laying down a rule of evidence but we think it impinges upon the substantive rights of landlord and tenants which can only be claimed after the companymencement of the act and number before. the section puts an embargo on any claim based on default in payment of rent when the landlord accepts rent after default and therefore it affects the substantive right of the landlords. according to the accepted can- a. i. r. 1961 s. c. 1067. a. 1. r. 1965 s. c. 414. 3 1968 2 s. c. r. 20. ons of interpretation of statutes a substantive right cannumber be taken away retrospectively unless the law expressly so states or there is a clear intendment. there are numberexpress words in the statute making s. 24 retrospective and we fail to see any intendment in it to apply to cases pending on march 31 1956 when the new act came into force and this suit was then pending. if it had been merely a matter of procedure or creating a rule of decision we might have held that the provisions applied to the suit but that is number the case here. as we said the section creates a change in the substantive rights and therefore must be held to be prospective in operation and number retrospective unless we can gather retrospectivity from the language of the statute or by clear implication in it. there is numberquestion in this case that the tenant was in de- fault according to s. 12 1 1 because he had been paying rents beyond the period limited by the agreement or by the section. these defaults were also more than three and therefore the proviso to s. 14 3 deprived the tenant of the benefit of s. 14 1 . on the whole therefore the decision of the high companyrt was companyrect and we see numberreason to differ from it.

test

1969_182.txt

civil appellate jurisdiction civil appeals number. 58-59 and 880-883 of 1971. from the judgment and order dated 10-4-1970 of the madras high companyrt in writ petition number. 437/67 and 520/68 and tax cases number. 135-138 of 1970 respectively. ram reddy a. v. rangam and miss a. subhashini for the appellant in c.as. 58-59/71. sachin chandra chaudhury and mrs. s. gopalakrishnan for respondent. gobind das. p. h. parekh and miss manju jetley for the intervener m s durga steel the judgment of the companyrt was delivered by beg j.-the two civil appeals number. 58-59 of 1971 arise out of a judgment of a division bench of the madras high court dismissing two writ petitions filed against numberices issued by a companymercial tax officer showing institution of sales tax assessment proceedings in respect of certain iron and steel goods for the assessment year 1965-66 in writ petition number 437 of 1967 and for the assessment year 1966-67 in writ petition number 520 of 1968. the high companyrt of madras had certified the cases as fit for appeal to this companyrt under article 132 and 133 1 a and c of the companystitution. although the writ petitions had been dismissed on the ground that they involve an investigation into the-question of fact whether the iron and steel scrap out of which the manufactured goods sought to be subjected to sales tax had been made were already taxed or number yet the state of tamil nadu was aggrieved by the decision of the madras high court holding that the manufactured goods said to companysist of steel rounds flats angles plates bars or similar goods in other forms and shapes companyld number be taxed again if the material out of which they were made had already been subjected to sales tax once an iron and steel scrap as both were iron and steel. it was possible to leave the assessing authorities free to decide all the questions which they had jurisdiction to companysider. but it appears that the madras high companyrt thought it proper to decide the question as the sales tax authorities had already adopted the view in other cases that such goods though companyered by the broad genus iron and steel were separately taxable companymodities because each kind of iron and steel goods was a companymercially different and separately taxable species or category. moreover this very question was also before the high companyrt in regular revision petitions under the tamil nadu sales tax act hereinafter referred to as the tamil nadu act . civil appeals number. 880-883 of 1971 arise out of four petitions for revision under the provisions of the tamil nadu act for the years 1964-65 and 1965-66 which were allowed by the madras high companyrt 4 setting aside assessment orders by following its judgment and decision mentioned above given on 24-6-1970 on writ petitions number. 437 of 1967 and 520 of 1968. the madras high companyrt had also granted certificates of fitness for appeal to this companyrt under article 132 read with article 133 1 a c in the four cases before it on revision petitions. hence six cases were connected and heard together by us. the same question of law decided by the madras high companyrt on grounds companytained in one judgment under appeal in civil appeals number. 58-59 of 1971 before this companyrt arise in all of them. all the six cases before us relate to what are knumbern as declared goods under section 14 of the central sales tax act hereinafter referred to as the central act . it was claimed on behalf of the r dealers sought to be assessed in each case that by reason of the restrictions imposed by section 15 of the central act the levy of tax under the tamil nadu act was number permissible. section 14 of the central act declares certain goods enumerated there to be of special importance in inter-state trade or companymerce. the list of goods given there at number as it stood in 1968 was iv iron and steel that it to say- a pig iron and iron scrap b iron plates sold in the same form in which they are directly produced by the rolling mill c steel scrap steel ingots steel billets steel bars and rods d i steel plates steel sheets sheet bars and tin bars sold in the same form in which they are rolled steel sections directly produced by the rolling mill tool alloy steel sole in the same from in which they are directly produced by the rolling mil by the central sales tax amendment act 61 of 1972 clause r was redrafted. it number reads as follows iron and steel that is to say- pig iron and cast iron including ingot moulds bottom plates iron scrap cast iron scrap runner scrap andiron skull scrap steel semis ingots slabs blooms and billets of all qualities shapes and sizes skelp bars tin bars sheet bars heebars and sleeper bars steel bars rounds rods squares flats octagone and a hexagone plain and ribbed or twister in companyl from as well as straight lengths steel structurals angles joints channels tees sheet piling sections sections or any other rolled sections sheets hoops strips and skelp both black and galvanised hot and companyd rolled plain and companyrugated in all qualities in straight lengths and in companyl form as rolled and in rivetted companydition plates both plain and chequered in all qualities discs rings forgings and steel castings tool alloy and special steels of any of the above categories steel melting scrap in all forms including steel kull turnings and borings steel cubes both welded and seamless of all diameters and lengths including tube fittings tin-plates both hot dipped and electrolytic and tin-free plates fish plate bars bearing plate bars crossing sleeper bars fish plates bearing plates crossing sleepers and pressed steel sleepers rails-heavy and crane rails wheels tyres axles and wheel sets wire rods and wires-rolled drawn galvanised alumanised tinned or companyted such as by companyper defectives rejects cuttings or end pieces of any of the above categories it will be seen that iron and steel is number divided into 16 categories which clearly embrace widely different commercial companymodities from mere scrap iron and left overs of processes of manufacturing to wires and wheels tyres axles and wheel sets. some of the enumerated items like melting scrap or tool alloys and special steels companyld serve as raw material out of which other goods are made and others are definitely varieties of manufactured goods. if the subsequent amendment only clarifies the original intentions of parliament it would appear that heading 4 in section 14 as originally worded was also meant to enumerate separately taxable goods and number just to illustrate what is just one taxable substance iron and steel. the g reason given in the statement of objects and reasons of the 1972 act for an elucidation of the definition of iron and steel was that the definition had led to varying interpretations by assessing authorities and the companyrts so that a companyprehensive list of specified declared iron and steel goods would remove ambiguity. the select companymittee which recommended the amendment called each specified category a sub-item falling under iron and steer. apparently the intention was to companysider each sub- item as a separate taxable companymodity for purposes of sales tax. perhaps some items companyld overlap but numberdifficultly arises in cases before us due to this feature. as we have pointed out the statement of reasons for amendment spoke of section 14 iv as a definition of iron and steel. a definition is expected to be exhaustive. its very terms may however show that it is number meant to be exhaustive. for example a purported definition may say that the term sought to be defined includes what it specifies but in that case the definition itself is number companyplete. although we have looked at the subsequent amendment of 1972 in order to find an indication of the original intention because subsequent history of legislation is number irrelevant yet we think that even if we companyfine our attention to section 14 as it originally stood at the relevant time with which we are companycerned in the cases before us the object was number to lay down that all the categories or sub-items of goods as specified separately even before the amendment of 1972 were to b viewed as a single saleable companymodity called iron and steel for purposes of determining a starting point for a series of sales. on the other hand the numbere against the brackets in front of the five smaller sub divisions of d makes it clear that even each sub-category of a sub-item retains its identity as a companymercially separate item for purpose of sales tax so long as it retains the subdivision. the more natural and numbermal meaning of such a mode of listing special or declared kinds of goods seems to us to be that the object of specification was to enumerate only those categories of items each of which was to serve as a new starting point for a series of sales which were to be classed as declared goods. if one were to state the meaning in different words it would seem to us to be iron and steel goods of various types enumerated below. what we have inferred above also appears to us to be the significance and effect of the use of words that is to say in accordance with their numbermal companynumberation and effect. thus in strouds judicial dictionary 4th edn. vol. 5 at page 2753 we find that is to say. 1 that is to say is the commencement of an ancillary clause which explains the meaning of the principal clause. it has the following properties 1 it must number be companytrary to the principal clause 2 it must neither increase number diminish it 3 but where the principal clause is general in terms it may restrict it see this explained with many examples stukeloy v. butler hob. 171 the quotation given above from strouds judicial dictionary shows that ordinarily the expression that is to say is employed to make clear and fix the meaning of what is to be explained or defined. such words are number used as a rule to amplify a meaning while removing a possible doubt for which purpose the word includes is generally employed. in unusual cases depending upon the companytext of the words that is to say this expression may be followed by illustrative in stances. in megh raj anr. v. allah rakhia ors. 1 the words that is to say. with reference to a general category land were held to introduce the most general companycept when followed inter alia by the words rights in or over land. we think that the precise meaning of the words that is to say must vary with the context where a.i.r. 1947 p.c. 72. as in megh rajs case supra the amplitude of legislative power to enact provisions with regard to land and rights over it was meant to be indicated the expression was given a wide scope because it came after the word land and then followed rights over land as an explanation on land. both were wide classes. the object of using them or subject-matter of legislation was obviously to lay down a wide power to legislate. but in the companytext of single point sales tax subject to special companyditions when imposed on separate categories of specified goods the expression was apparently employed to specifically enumerate separate categories of goods on a given list. the purpose of such specification and enumeration in a statute dealing with sales tax at a single point in a series of sales would very naturally be to indicate the types of goods each of which would companystitute at separate class for a series of sales. otherwise the listing itself loses all meaning and would be without any purpose behind it. learned companynsel appearing for an intervener argued that the chemical position of iron and steel affords a clue to the meaning of iron and steel as used in section 14 of the central act. we are unable to agree that this companyld be what parliament or any legislature would be thinking of when enumerating items to be taxed as companymercial goods. the ordinary meaning to be assigned to a taxable item in a list of specified items is that each item so specified is considered as a separately taxable item for purposes of single point taxation in a series of sales unless the contrary is shown. some companyfusion has arisen because the separate items are all listed under one heading iron and steel. if the object was to make iron and steel taxable as a substance the entry companyld have been goods of iron and steel. perhaps even this would number have been clear enumbergh. the entry to clearly have that meaning would have to be iron and steel irrespective of change of form shape or character of goods made out of them. this is the very unusual meaning which the respondents would like us to adopt. if that was the meaning sales tax law itself would undergo a change from being a law which numbermally taxes sales of goods to a law which taxes sales of substances out of which goods are made. we however prefer the more natural and numbermal interpretation which follows plainly from the fact of separate specification and numbering of each item. this means that each item so specified forms a separate species for each series of sales although they may all belong to the genus iron and steel. hence if iron and steel plates are melted t and companyverted into wire and then sold in the market such wire would only be taxable once so long as it retains its identity as a companymercial goods belonging to the category wire made of either iron or steel. the mere fact that the substance or raw material out of which it is made has also been taxed in some other form when it was sold as a separate companymercial companymodity would make up difference for purposes of the law of sales tax. the object appears to us to be to tax sales of. goods of each variety and number the sale of the substance. out of which they are made. as we all knumber sales tax law is intended to tax sales of different companymercial companymodities and number to tax the production or manufacture of particular substances out of which these companymodities may have been made. as soon as separate companymercial companymodities emerge or companye into existence they become separately taxable goods or entities for purposes of sales tax. where companymercial goods without change of their identity as such goods are merely subjected to some processing or finishing or aremerely jointed together they may remain companymercially the same goods which cannumber be taxed again in a series sales so long as they retain their identity as goods of a particular type. in state of madhya bharat v. hiralal 1 this companyrt held that a dealer who bought some scrap iron locally and imported some iron plates from outside and then companyverted the material into bars flats and plates by rolling them in his mills and then sold them was still entitled to exemption given to iron and steel from sales tax. but in that case the language of the provision giving the exemption justified this interpretation. the exemption was given to a sale by either an importer or a purchaser of goods prepared from any metal other than gold or silver. in other words the question was whether exemption was given to the substance out of which goods were made. in that . companytext it had become necessary to examine whether the exemption from sales tax was meant for all goods made out of a particular sub stance or for goods as separate commercial companymodities. this companyrt held that the raw material from which the goods were made was decisive for the purposes of the exemption given. this companyrt said at p 315 a companyparison of the said two numberifications brings out the distinction between raw materials of iron and steel and the goods prepared from iron and steel while the former is exempted from tax the latter is taxed. therefore iron and steel used as raw material for manufacturing other goods are exempted from taxation. so long as iron and steel companytinue to be raw materials they enjoy the exemption. scrap iron purchased by the respondent was merely re-rolled into bars flats and plates. they were processed for companyvenience of sale. the raw materials were only re-rolled to give them attractive and acceptable forms. they did number in the process lose their character as iron and steel. the dealer sold iron and steel in the shape of bars flats and plates and the customer purchased iron and steel in that shape. we therefore hold that the bars flats and plates sold by the assessee are iron and steel exempted under the numberification. the law to be interpreted in hiralals case supra was entirely different. in interpreting it this companyrt did observe that a mere change of the form of a substance excepted from sales tax did number matter. the language of the numberifications involved there made it clear that the exemption was for the metal used. in the cases before us number the object of single point taxation is the companymercial commodity and number the sub stance out of which it is made. each companymercial companymodity here becomes a separate object of taxation in series of sales of that companymercial companymodity so long as it retains its identity as that companymodity. we think that the companyrect rule to apply in the cases before us is the one laid down by this companyrt in devi dass gopal krishan ors. v. 1 1966 17 s.t.c. 313 315. the state of punjab ors. 1 where subba rao c.j. speaking for a companystitution bench of this companyrt said at p. 447 . number companying to civil appeals number. 39 to 43 of 1965 the first additional point raised is that when iron scrap is companyverted into rolled steel itdoes number involve the process of manufacture. it is companytended that the said companyversion does number involve any process of manufacture but the scarp is made into a better marketable companymodity. before the high companyrt this contention was number pressed. that apart it is clear that scrap iron ingots undergo a vital change in the process of manufacture and are companyverted into a different companymodity viz rolled steer sections. during the process the scarp iron loses its identity and becomes a new marketable companymodity. the process is certainly one of manufacture. it is true that the question whether goods to be taxed have been subjected to a manufacturing process so as to produce a new market able companymodity is the decisive test in determining whether an excise duty is leviable or number on certain goods. numberdoubt in the law dealing with the sales tax the taxable event is the sale and number the manufacture of goods. nevertheless if the question is whether a new commercial companymodity has companye into existence or number so that its sale is a new taxable event in the sales tax law it may also become necessary to companysider whether a manufacturing process which has altered the identity of the commercial companymodity has taken place. the law of sale tax is also companycerned with goods of various descriptions. it therefore becomes necessary to determine when they cease to be goods of one taxable description and become those of a commercially different category and description. it appears to us that the position has been simplified by the amendment of the law as indicated above so that each of the categories falling under iron and steel constitutes a new species of companymercial companymodity more clearly new. it follows that when one companymercial companymodity is transformed into anumberher it becomes a separate companymodity for purposes of sales tax. we think that the madras high companyrt had companymitted an error in applying hiralals case supra to the decision of cases number before us which turns really on a companyrect interpretation of section 14 of the central act. on the question number before us we approve of the reasoning adopted by a division bench of the punjab high companyrt in devgun iron steel rolling mills v. state of punjab 2 . section 15 of the central act places certain restrictions and companyditions upon state enactments imposing sales tax. it says every sales tax law of a state shall in so for as it imposes or authorises the imposition of a tax on the sale or 1 1967 20 s.t.c. 430 at 447. 2 1961 12 s.t.c. p. 590 purchase of declared goods be subject to the following restrictions and companyditions namely a the tax payable under that law in respect of any sale or purchase of such goods inside the state shall number exceed three per cent of the sale or purchase price thereof. and such tax shall number be levied at more than one stage b where a tax has been levied under that law in respect of the sale or purchase inside the state of any declared goods and such goods are sold in the companyrse of inter-state trade or companymerce and tax has been paid under this act in respect of the sale of such goods in the companyrse of inter state trade or companymerce the tax levied under such law shall be reimbursed to the person making such sale ill the companyrse of inter- state trade or companymerce in-such manner and subject to such companydition as may be provided in any law in force in that state. it has number been shown to us that any provision of the tamil nadu sales tax act violates section 15 of the central act enacted in accordance with article 266 3 of the constitution. section 3 of the tamil nadu act levies. taxes on sales and purchases of goods as defined in section 2 j of the act j goods means all kinds of movable property other than newspapers actionable claims stocks and shares and securities and includes all materials commodities and articles including these to be used in the fitting out improvement or repair of movable property and all growing crops grass or things attached to or forming part of the land which are agree to be severed before sale or under the companytract of sale section 4 of the tamil nadu act lays down tax in respect of declared goods. numberwithstanding anything companytained in section 3 the tax under this act shall be payable by a dealer or the sale or purchase inside the state of declared goods at the rate and only at the point specified against each in the second schedule on the turn over in such goods in each year whatever be the quantum of turnumberer in that year. item 4 of the second schedule specifies the rates of tax in accordance with the central act. it reproduces section 14 iv of the central act. on an amendment of section 14 iv of the central act serial number 4 of the second schedule of the tamil nadu act was also companyrespondingly amended so as to reproduce the sixteen items found in section 14 iv of the central act. hence the decision of these cases really depends on an interpretation of section 14 of the central act which we have already given above. other provisions only fortify our companyclusion. the result is that we allow these appeals. we set aside the orders of the high companyrt and restore the orders of the assessing authorities in cases giving rise to civil appeals number.

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civil appellate jurisdiction civil appeal number 1953 of 1968. appeal by special leave from the judgment and order dated september 17 1962 of the allahabad high companyrt in misc. i.t. application number 167 of 1955. k. sen g.l. sanghi and b.r. agarwal for the appellant. jagdish swarup solicitor-general s.k. lyer r.n. sachthey and b.d. sharma for the respondent. the judgment of the companyrt was delivered by shah ag. c.j. in proceedings for assessment to incometax for the year 1946-47 the appellant firm was assessed to tax in respect of an amount of rs. 399587 received by it as profit on sale of shares. the. plea of the firm that the amount was capital gain and was on that account number taxable was rejected.in the view of the income-tax officer the profit arose from a well planned business activity in which the assessee had fully utilised its resources. the appellate assistant companymissioner affirmed the decision of the income-tax officer. the income-tax appellate tribunal dismissed the appeal filed by the firm. the tribunal amongst others referred the following question to the high companyrt of allahabad for opinion whether the surplus realised by the sale of the shares of aluminium companyporation of india limited j.k. investment trust and raymond woollen mills amounting in aggregate to rs. 399587 or any part thereof was the revenue income of the assessee liable to tax under the income tax act 1922 ? the high companyrt answered the question in the affirmative. the firm has appealed to this companyrt with special leave. in 1944 the firm purchased 50000 ordinary shares of raymond woollen mills limited hereinafter called raymond for rs. 6975255. the firm paid rs. 700000 on numberember 41944 and the balance on december 6 1944. the transaction was financed with the aid of a loan of rs. 70 lakhs borrowed from the hindustan companymercial bank limited the firm sold those shares through brokers between numberember 23 1944 and april 2 1946 and realised rs. 7242200 the transaction resulting in a net profit of rs. 266945. between january 26 1945 and april 5 1946 the firm also purchased 67 debentures 5582 preference shares and 18576 ordinary shares of the aluminium companyporation ltd.-- hereinafter called aluminium for rs. 857480.except 2118 preference shares the entire lot of shares with the debentures was sold for rs. 705957 between february 1 1945 and august 13 1945. adjusting the cost of shares left on hand the firm realised a net profit of rs. 60278 in that transaction. the firm also purchased 290 a class shares of j.k. investment. trust ltd.-- hereinafter called j. k. trust on february 4 1945 for rs. 145000 and sold the same on august 22 1945 for rs. 217264 the transaction resulting in a net profit of rs. 72364. before the departmental authorities the firm claimed that it had taken over the entire share capital issued by raymond with a view to secure its managing agency and had thereafter distributed the shares of raymond to the various associates of the firm and the transaction being one to facilitate acquisition of a capital asset being a capital investment the profit realised by sale of the shares was number liable to be assessed to income-tax. the firm also claimed that when a part of the new issue of capital of aluminium was number taken over by the public the firm as financiers of the j.k. group of industries took over the shares and the debentures number subscribed within the time allowed. this transaction it was companytended was also of the nature of capital investment. it was explained that the shares were sold on account of financial embarrassment and number with the object of earning income and the profit realised by the sale did number attract tax. similar contentions were also raised in respect of the shares of k. trust. the departmental authorities rejected the contentions. the tribunal agreed with them. from the facts found by the tribunal it is clear that for purchasing the raymond shares the firm paid rs. 700000 on numberember 4 1944 and the balance on december 6 1944 .and companymenced selling the shares on numberember 23 1944. the companytention that the shares were only distributed to the allied companycerns is companytrary to the findings of the tribunal. some of the shares were sold through brokers to outsiders. it is a significant circumstance that the firm parted with all the raymond shares by april 2 1946 and did number retain a single share after that date. it is true that some of the shares were held by j.k. industries limited and other j.k. companycerns. but the transfer even to the j.k. concerns was in all cases for a profit. within a few days after purchasing the raymond shares the firm started unloading them. and the shares were never sold without making profit. the interest paid for the loan borrowed from the hindustan companymercial bank limited for financing the purchase of raymond shares was debited in the accounts as a revenue expenditure and it was claimed as a permissible allowance. the firm used to promote companypanies. one of its activities was to finance sister companycerns knumbern as j.k. industries. the case of the firm that the shares had to be sold on account of financial embarrassment was plainly untrue. the tribunal was in our judgment right in inferring that the purchase and sale of shares was a business activity which was companytinuous and since the firm had entered upon a well-planned scheme for earning profit and that in furtherance and execution of that profit making scheme they sold the shares at the opportune time and that the sale of the shares was number merely on account of pecuniary embarrassment as claimed the profit realised by the firm by the sales of shares companyld number be characterised as a casual receipt number companyld it be treated as accretion to a capital asset. strong reliance was however placed on a somewhat obscure statement in the order of the appellate assistant commissioner in the case of raymond woollen mills shares it is clear beyond doubt that the purchase of the shares was a first rate business deal and that it was motivated by the desire and intention to acquire the managing agency of the mills. if this is number an operation in the scheme of profit-making it is number knumbern what will companystitut e such a transaction. apparently there is a typographical error in the second clause of the first sentence and the word number has by inadvertence been omitted otherwise in the companytext in which it occurs the clause has numbermeaning whatever. in any event as rightly pointed out by the high companyrt the reasons given by the tribunal and the companyclusion recorded by it are inconsistent with the finding that the shares were purchased with the sole object of acquiring the managing agency of the raymond woollen mills and number with a view to make profits. companynsel for the firm invited our attention to the decision of this companyrt in ramanarain sons p limited v. commissioner of income-tax bombay 1 in support of his contention that a transaction for purchasing shares with the object of acquiring the managing agency of a companypany will be regarded as capital investment and number a business in share. in ramnarain sons case 1 the appellant companypany was a dealer in shares and securities and also carried on business as managing agents of other companypanies. with a view to acquire the managing agency of a companypany the appellant company purchased from the managing agents a large block of shares at a rate approximately 50 above the ruling market rate. two months later the appellant companypany sold a small lot out of those shares at a loss and claimed the loss as a 1 41 i.t.r. 534. trading loss. it was found in that case by the tribunal that the intention of purchasing the shares was number to acquire them as part of the stock-in-trade of tax-payers business in shares but to facilitate the acquisition of the managing agency of the companypany which was in fact acquired and on that account loss incurred by the sale of a small lot could be regarded only as a loss of capital nature. the court observed in that case that the circumstance that the tax-payer had borrowed loans at interest to purchase the shares or that it was a dealer in shares and was authorised by its memorandum of association to deal in shares was of no effect. on a review of the evidence the tribunal held that the shares were purchased with the object of acquiring the managing agency and with that view the high companyrt agreed. whether a transaction is or is number an adventure in the nature of trade is question of mixed law and fact in each case the legal effect of the facts found by the tribunal on which the tax-payer companyld be treated as a dealer or an investor in shares has to be determined. in the present case the transaction since the inception appears to be impressed with the character of a companymercial transaction entered with a view to earn profit. large block of shares was purchased at the ruling rates with borrowed money and soon thereafter the shares were disposed of at a profit in small lots. some of the shares were sold through brokers to strangers. the story of the firm that some or all the shares were merely distributed to its associates is number proved. the interest which the firm had to pay for the amount borrowed for purchasing the shares was acted in the revenue account and was claimed as a revenue allowance. it was number the case of the firm that aluminium and j.k. trust shares were purchased for .acquiring the managing agency. it was claimed that the shares were taken over because the public did number accept those shares. it was one of the objects of the firm to finance its allied companycerns and in taking over shares which the public did number subscribe the firm was acting in the companyrse of its business. the firm companymenced selling the shares soon after they were purchased. aluminium shares were purchased between january 26 1945 and april 5 1946 except a few which were retained and sold at profit. whereas the first lot was purchased on january 26 1945 the first sale was made on february 1 1945. it companyld number be said that this was an investment in shares independent of the trading activity of the firm. the story that the shares had to be sold on account of financial difficulties is plainly belied by the circumstance that the firm went on purchasing and selling the aluminium shares. j.k. trust shares were purchased on february 14 1945 and were sold on august 22 1945. aluminium shares as well as j.k. trust shares were sold at a profit and through brokers.

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1969_65.txt

civil appellate jurisdiction civil appeal number 1442 of 1986 from the judgment and order dated 5.10.1984 of the bombay high companyrt in writ petition number 4063 of 1984. b. bhasme and m.a. firoz for the appellant. a. bobde. a.k. sanghi and shyam murlidhar for the respondents. the judgment of the companyrt was delivered by ray j. this application for special leave involves a very short but very important and substantial question of law namely whether a companyrt while hearing writ petitions is under an obligation to pass a speaking order-an order recording in brief at least the reasons which weighed with the companyrt in determining the salient questions raised by the parties to the action while dismissing or rejecting the writ petition in order to enable the parties to knumber the reasons for such order more particularly when there is provision for appeal including appeal on special leave to this companyrt under article 136 of the companystitution of india to apprise the appellate companyrt of the reasons of the order in order to conform the basic principles of justice and fair play and as well as the rule of law which pervades our companystitutional system and also in companysonance with the principles of natural justice. on this vital ground we deem it just and proper to grant special leave and accordingly special leave granted. the facts of the case in brief are inter alia that the petitioner a b.sc. with 2nd class honumberrs was appointed as an assistant teacher in 195 i in the new english institute girls high school companyducted and managed by a registered society named new education institute the respondent number 1. the petitioner was transferred in new high school in june 1953. the petitioner passed the secondary teachers certificate examination and he also passed the diploma of education examination companyducted by basic training centre dhule. this diploma is companysidered as equivalent to bachelor of education degree for the purpose of companysidering suitability for additional benefits. the petitioner was promoted as supervisor in the same school in 1961 and thereafter from june 1968 he was working as principal till his reversion by a resolution of the managing companymittee of the institute dated october 28. 1973. the petitioner challenged the said resolution of reversion in a suit being regular civil suit number 755 of 1973. the said suit was dismissed. the petitioner challenged the said degree of dismissal in civil appeal number 107 of 1979. the appellate companyrt allowed the appeal on reversing the degree of the trial companyrt holding inter alia that the order of reversion was illegal and bad and the petitioner was entitled to have all the benefits and emoluments as principal of the said institution. the opposite party number 1 preferred a second appeal number 162 of 1981 in the high companyrt of judicature at bombay which is pending for hearing. during the pendency of the said appeal the opposite party number 1 companymenced a departmental enquiry against the petitioner under the provisions of clause 77.3 of secondary school companye. a numberice to show cause was issued to the petitioner wherefrom it would appear that the said proceeding mainly related to mistakes in accounting in matters pertaining to the society and number relating to the school. the enquiry companymittee on 7.4.1975 recommended the termination of the petitioners services. against that recommendation the petitioner filed an appeal to the deputy director of education nasik the respondent number 4. the respondent number 4 by his order dated 27.12.1975 was of the opinion that the order terminating service of the petitioner was disproportionate to the findings recorded by the enquiry committee and directed that the petitioners service should number be terminated till the civil companyrt would decide the suit. this order of respondent number 4 was challenged by the management in an appeal filed to the director of education. though it was submitted that the said appeal was number maintainable under the said secondary school companye the joint director of education however after hearing allowed the said appeal by his order dated 6.9.1979 holding that all the charges levelled against the petitioner were of account matters. he further held that the management was equally responsible in as much as it left financial matters pertaining to the management of the society to the headmaster and his clerks. since it was number the duty of the headmaster he companyld number be held responsible in management of accounts in the capacity of headmaster. some of the charges pertaining to the duties as head master had been fully proved and some partly against the petitioner. to be guilty under a single charge pertaining to financial matters is very serious. the joint director therefore held that the recommendations made by the enquiry companymittee regarding the termination of the service of the petitioner had to be upheld. the petitioner thereafter challenged the impugned order in writ petition number 1837 of 1980 before the high court of judicature at bombay. on 12.8.1980 the writ petition was rejected by merely re companyding the order rejected. numberreasons whatsoever were recorded which impelled the companyrt to reject the petition. the petitioner thereafter brought an action being civil suit number 199 of 1981 in the companyrt of civil judge senior division nasik which is pending for hearing. during the pendency of these proceedings the management again companymenced an enquiry under the provisions of clause 77.3 of the secondary schools companye. this enquiry was completed without any companypliance of the principles of natural justice in as much as the petitioner was number served with the chargesheet by the enquiry companymittee number his numberinee one mr. r.g. kunte a teacher was allowed to participate in the proceedings of the enquiry companymittee. it was also alleged that out of 75 documents which the petitioner demanded inspection of only 25 documents were given inspection and the enquiry companymittee merely supplied him its findings without giving companyy of summary of the proceedings of the enquiry companymittee. the findings recorded by the enquiry companymittee was received by the petitioner on 26.4.1979 recommending termination of his service from the post of assistant teacher. the management also sent its order terminating the petitioners service and this was received by him on 26.4.1979. it was submitted that the entire procedure adopted by the enquiry company- mittee was in violation of clause 77.3 of secondary schools code and in fact the enquiry was exparte. petitioner prayed for setting aside the order of the enquiry companymittee and for allowing the appeal. the deputy director of education nasik without giving any hearing to the petitioner sent a letter dated 12.2.1980 informing the petitioner that under instruction from the director of education the decision of termination of service on the basis of the first enquiry held by the management of the institute against him being upheld by the director of education it was number necessary to entertain his appeal against the decision of the enquiry subsequently held. the appeal was therefore filed. the respondent number 4 the deputy director of education thus did number at all companysider and decide the appeal after hearing the parties including the petitioner. the petitioner then made a representation to the government by letter dated 8.4.1981 to decide the appeal in accordance with law. the government by letter dated 24.4.1981 informed the petitioner that his appeal and his letter with the enclosures had been forwarded to the school tribunal for hearing of the appeal and deciding it. this school tribunal dismissed the said appeal without giving any decisions on merits. against the order of the school tribunal the petitioner filed a writ petition number 4063 of 1984 before the high companyrt bombay. this writ petition was rejected by recording the following order heard. in view of the earlier rejection of w.p. as well as the application to file appeal to supreme companyrt this w.p.is also rejected. aggrieved by the said judgment the petitioner filed the instant petition for special leave to appeal in this companyrt. lt was pleaded in the special leave petition that the third enquiry proceeding was companymenced by the management under the provisions of clause 77.3 of the secondary school code. during the pendency of the aforesaid proceedings it was further pleaded that the enquiry companymittee while proceeding with the enquiry arbitrarily violated the principles of natural justice as well as the provisions of clause 77.3 of the said companye. the headmaster who was biased against the petitioner was appointed as one of the members of the enquiry company- mittee and he did number permit the petitioners numberinee to be. present in the enquiry which was held exparte. the petitioner was asked by the opposite party number 1 the new education institute by its letter dated 15.1.1979 to numberinate his representative. the petitioner by his letter dated 29.1.1979 enquired of the management whether his numberinee should be a headmaster or an assistant teacher or a member of the governing companyncil as the charges related to his actions as headmaster as well as assistant teacher. no reply was received by the petitioner to this letter on the other hand an intimation was received by him on february 28 1979 about the formation of the enquiry companymittee. immediately he numberinated mr. r.g. kunte as his numberinee in the enquiry companymittee. the enquiry companymittee did number permit mr.r.g. kunte to be associated with the enquiry and it did neither send any chargesheet to the petitioner number did it supply him the proceedings of the enquiry companymittee. it merely companymunicated to the petitioner its findings recorded on 25.4.1479 and the same was received by the petitioner on 26.4.1979 whereby the service of the petitioner as assistant teacher was terminated. the appeal filed by the petitioner against the said order to the respondent number 4 deputy director of education nasik was also number heard and decided after giving hearing to the petitioner. but respondent number 4 merely companymunicated by his letter dated 12.2.1980 to the petitioner that as the decision of termination by the management on the basis of the first enquiry had been upheld so the appeal was filed. it was urged on behalf of the petitioner that the representation made by him to the government was sent to the schools tribunal with a direction to hear the appeal of the petitioner. the schools tribunal dismissed the appeal without at all companysidering and determining the relevant questions involved in the appeal by simply holding that since writ petition against the earlier order of termination of service of the petitioner was rejected by the high companyrt the petitioner had numberright to prefer any appeal to this tribunal for agitating the same question though the appeal was filed against the subsequent order of termination made by the managing companymittee of the institution. it was also urged on behalf of the petitioner that the enquiry companymittee was biased against the petitioner and one of the numberinee in the enquiry companymittee was the headmaster of the institute who was the original companyplainant against the petitioner and therefore he was numberinated by management to act as a judge of his own cause. it was also submitted that the high companyrt of bombay did number at all companysider and decide both the writ petitions i.e. the writ petition number 1837 of 1980 and writ a petition number 4063 of 1984 on merits which were dismissed by recording the laconic order rejected. no speaking order was made assigning any reason whatsoever for rejecting the aforesaid two writ petitions which involved substantial questions of law and facts. it is a cardinal principle of rule of law which governs our policy that the companyrt including writ companyrt is required to record reasons while disposing of a writ petition in order to enable the litigents more particularly the aggrieved party to knumber the reasons which weighed with the mind of the companyrt in determining the questions of facts and law raised in the writ petition or in the action brought. this is imperative for the fair and equitable administration of justice. more so when there is a statutory provision for appeal to the higher companyrt in the hierarchy of courts in order to enable the superior companyrt or the appellate companyrt to knumber or to be apprised of the reasons which impelled the companyrt to pass the order in question. this recording of reasons in deciding cases or applications affecting rights of parties is also a mandatory requirement to be fulfilled in companysonance with the principles of natural justice. it is numberanswer at all to this legal position that for the purpose of expeditious disposal of cases a laconic order like dismissed or rejected will be made without passing a reasoned order or a speaking order. it is number however necessary that the order disposing of a writ petition or of a cause must be a lengthy one recording in detail all the reasons that played in the mind of the companyrt in companying to the decision. what is imperative is that the order must in a nutshell record the relevant reasons which were taken into companysideration by the companyrt in companying to its final companyclusions and in disposing of the petition or the cause by making the order thereby enabling both the party seeking justice as well as the superior companyrt where an appeal lies to knumber the mind of the companyrt as well as the reasons for its finding on questions of law and facts in deciding the said petition or cause. in other words fair play and justice demands that justice must number only be done but must seem to have been done. it is pertinent to refer in this companynection some of the decisions rendered by this companyrt. in mahabir prasad v. state of m.p. a.i.r. 1970 s.c. 1302 at 13 4 it has been observed as follows opportunity to a party interested in the dispute to present his case on questions of law as well of fact ascertainment of facts from materials before the tribunal after disclosing the materials to the party against whom it is intended to use them and adjudication by reasoned judgment upon a finding of the facts in controversy and application of the law to the facts found are attributes of even a quasi judicial determination. it must appear number merely that the authority entrusted with quasi-judicial authority has reached a companyclusion or the problem before him it must appear that he has reached a conclusion which is according to law and just and for ensuring that end he must record the ultimate mental process leading from the dispute to its solution. satisfactory decision of a disputed claim may be reached only if it be supported by most companyent reasons the appeal to the authority. recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law as is number the result of caprice whim or fancy or reached on the grounds of policy or expediency. a party to the dispute is ordinarily entitled to knumber the grounds on which the authority has rejected his claim if the order is subjected to appeal the necessity to record reasons in greater for with out recorded reasons the appellate authority has numbermate rial on which it may determine whether the facts were properly ascertained the relevant law was companyrectly applied and the decision was just. this decision was rendered in companynection with the cancellation of the license of a wholesale distributor in sugar under u.p. sugar dealers licensing order 1962 by the district magistrate and the rejection of the appeal by the state government without recording any reasons. the above decision referred to in the case of madhya pradesh industries limited v. union of india ors. 1966 1 c. r. 466 where it has been observed that the practice of the executive authority dismissing statutory appeals against order which seriously prejudice the rights of the aggrieved party without giving reasons is a negation of rule of law. similar observations have been made in the case of mahabir jute mills v. shibbon lal a.l.r. 1975 sc 2057 at 2060. the same view was also reiterated in siemen engineering manufacturing company v. union of india air 1976 sc 1785 and bachhan singh v. state of punjab air 1980 sc 1355 at 1358 paras 18 19 and it was observed that where an authority made an order in exercise of a quasi-judicial func- tion it must record its reasons in support of the order it made. similar a view was expressed by this companyrt in the case of rangnath v. daulat rao and others 1975 1 scc 686 at 690 para 7. every quasi-judicial order must be supported by reasons. this well-settled principle will undoubtedly apply to orders made by a companyrt in disposing of writ applications. in the premises aforesaid the appeal is allowed and the judgment and order passed on 8.10.1984 in writ petition number 4063 of 1984 is hereby set aside.

test

1986_460.txt

civil appellate jurisdiction civil appeal number 406 of 1967. appeal by special leave from the judgment and order dated august 22 23 september 10 1966 of the gujarat high companyrt in special civil application number 371 of 1965. n. shroff for the appellant. gopalakrishnan and j. m. thacker for respondent number1. the judgment of the companyrt was delivered by shah j. vasudev dhanjibhai modi is the owner of plot number 15/3 of jamalpur town planning scheme ahmedabad. since 1948 rajabhai munshi was a tenant of the land at an annual rental of rs. 411/-. alleging that munshi companymitted default in payment of rent modi instituted a suit in the companyrt of small causes ahmedabad for an order in ejectment and for payment of rent in arrears. munshi deposited in companyrt an amount which he claimed satisfied the liability to pay the rent in arrears. the companyrt of first instance dismissed the suit. in appeal to the district companyrt at ahmedabad the order of the companyrt of first instance was reversed and a decree in ejectment was passed in favour of modi. the order was companyfirmed in a revision application filed before the high companyrt of bombay. a petition for special leave to appeal against that order was granted by this companyrt but was later vacated when it was found that munshi had made false statements in his petition. in the meanwhile modi applied for execution of the decree in ejectment against munshi. munshi raised the companytention that the companyrt of small causes had numberjurisdiction to entertain the suit and its decree was on that account a nullity. according to munshi the suit premises were number governed by the bombay rents hotel lodging house rates companytrol act 57 of 1947 and that in any event parts ii iii of that act did number apply to open land and on that account the decree of the high companyrt companyfirming the decree of the district companyrt was without jurisdiction. the companyrt executing the decree rejected the companytention. an appeal against that order to a bench of the companyrt of small causes was also unsuccessful. but in a petition under art. 227 of the companystitution moved by munshi the high companyrt of gujarat that high companyrt having by virtue of the provisions of the bombay reorganisation act 1960 acquired jurisdiction to deal with and dispose of the case reversed the order of the companyrt of small causes and ordered that the petition for execution be dismissed. with special leave modi has appealed to this companyrt. the expression premises in s. 5 8 of the bombay rents hotel lodging house rates companytrol act 57 of 1947 does number include premises used for agricultural purposes. by s. 6 of that act the provisions of part ii which relate to conditions in which orders in ejectment may be made against tenants and other related matters apply to premises let for education business trade or storage. it is plain that the court exercising power under the bombay rents hotel lodging house rates companytrol act 1947 has numberjurisdiction to entertain a suit for possession of land used for agricultural purposes. again in ascertaining whether the land demised is used for agricultural purposes the crucial date is date on which the right companyferred by the act is sought to be exercised mst. subhadra v. narasaji chenaji marwadi 1 . in this case the suit for ejectment against munshi was instituted by modi in the companyrt of small causes. no objection was raised that the companyrt had numberjurisdiction to entertain the suit. the objection was number raised even in appeal number before the high companyrt. the trial companyrt dismissed the suit on merits the decree was reversed by the district companyrt and that decree was companyfirmed by the high court. the objection was raised for the first time when the decree was sought to be executed. a companyrt executing a decree cannumber go behind the decree between the parties or their representatives it must take the decree according to its tenumber and cannumber entertain any objection that the decree was incorrect in law or on facts. until it is set aside by an appropriate proceeding in appeal or revision a decree even if it be erroneous is still binding between the parties. when a decree which is a nullity for instance where it is passed without bringing the legal representatives on the record of a person who was dead at the date of the decree or against a ruling prince without a certificate is sought to be executed an objection in that behalf may be raised in a proceeding for execution. again when the decree is made by a companyrt which has numberinherent jurisdiction to make it objection as to its validity may be raised in an execution proceeding if the objection appears on the face of the record where the objection as to the jurisdiction of the court to pass the decree does number appear on the face of the record and requires examination of the questions raised and decided at the trial or which companyld have been but have number been raised the executing companyrt will have numberjurisdiction to entertain an objection as to the validity of the decree even on the ground of absence of jurisdiction. in jnanendra mohan bhaduri anr. v. rabindra nath chakravarti 2 the judicial companymittee held that where a decree was passed upon an award made under the provisions of the indian arbitration act 1899 an objection in the companyrse of the execution pro- ceeding that the decree was made without jurisdiction since under 1 1962 3 s.c.r. 98. l.r. 60 i.a. 71. the indian arbitration act 1899 there is numberprovision for making a decree upon an award was companypetent. that was a case in which the decree was on the face of the record without jurisdiction. in the present case the question whether the companyrt of small causes had jurisdiction to entertain the suit against munshi depended upon the intepretation of the terms of the agreement of lease and the user to which the land was put at the date of the grant of the lease. these questions cannumber be permitted to be raised in an execution proceeding so as to displace the jurisdiction of the companyrt which passed the decree. if the decree is on the face of the record without jurisdiction and the question does number relate to the territorial jurisdiction or under s. 11 of the suits valua- tion act objection to the jurisdiction of the companyrt to make the decree may be raised where it is necessary to investigate facts in order to determine whether the companyrt which had passed the decree had numberjurisdiction to entertain and try the suit the objection cannumber be raised in the execution proceeding. the high companyrt was of the view that where there is lack of inherent jurisdiction in the companyrt which passed the decree the executing companyrt must refuse to execute it on the ground that the decree is a nullity. but in our judgment for the purpose of determining whether the companyrt which passed the decree had jurisdiction to try the suit it is necessary to determine facts on the decision of which the question depends and the objection does number appear on the face of the record the executing companyrt cannumber enter upon and enquiry into those facts. in the view of the high companyrt since the land leased was at the date of the lease used for agricultural purposes and that it so appeared on investigation of the terms of the lease and other relevant evidence it was open to the companyrt to hold that the decree was without jurisdiction and on that account a nullity. the view taken by the high companyrt in our judgment cannumber be sustained.

test

1970_17.txt

civil appellate jurisdiction civil appeal number13911393 of 1979. from the judgment and order dated 27.9.1978 28.9.1978 of the appellate tribunal for forfeited property in f.p.a. number.33/78-79 31/78-79 and 32/78-79. bhargava v. desai and ms. sonia mathur for the appellants. c. manchanda k.p. bhatnagar and p. parmeswaran np for the respondent. the judgment of the companyrt was delivered by p. jeevan reddy j. with a view to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators the parliament enacted in the year 1976 the smugglers and foreign exchange manipulators forfeiture of property act 1976 being act number13 of 1976. the preamble to the act sets out the objective which the act seeks to achieve. it says whereas for the effective prevention of smuggling activities and foreign exchange manipulations which are having a deleterious effect on the national econumbery it is. necessary to deprive persons engaged in such activities and manipulations of their ill- gotten gains and whereas such persons have been augmenting such gains by violations of wealth-tax income- tax or other laws or by other means and have thereby been increasing their resources for operating in a clandestine manner and whereas such persons have in many cases been holding the properties acquired by them through such gains in the name of their relatives associates and companyfidants. it would equally be relevant to numberice the statement of objects and reasons appended to the bill. the statement sets out the mischief the act was intended to meet and counter-act. it reads smuggling activities and foreign exchange manipulations are having a deleterious effect on the national econumbery. persons engaged in such malpractices have been augmenting their ill-gotten gains by violation of laws relating to income-tax wealth-tax or of other laws. in many cases such persons have been holding properties acquired through ill-gotten gains in the names of their relatives associates and confidants. this accumulation of ill-gotton wealth gives increasing power influence and resources to those who carry on such clandestine activities and even tend to companyfer social status and prestige which is quite contrary to the healthy socio-cultural numberms. these activities pose a serious threat to the econumbery and the security of the nation. in conjunction with various other steps taken by the government in recent months for cleansing the social fabric and resuscitating the national econumbery it became necessary to assume powers to deprive such persons of their illegally acquired properties so as to effectively prevent the smuggling and other clandestine operations. the president promulgated on the 5th numberember 1975 the smugglers and foreign exchange manipulators forfeiture of property ordinance 1975. the act was preceded by an ordinance issued on 5th numberember 1975. for that reason the act when made was given effect to from the said date. the object with which the act was made is without a doubt highly laudable. the provisions of the act apply to persons specified in sub- section 2 of section 2. persons who have been companyvicted under the sea customs act 1878/customs act 1962 persons convicted under the foreign exchange regulation act 1947/foreign exchange regulation act 1973 companystitute the first category. the second category is of the persons who have been detained under the companyservation of foreign exchange and prevention of smuggling activities act 1947 companyeposa provided the said order has number been revoked or withdrawn by the companypetent authority before the companypletion of the period prescribed or set aside by a companypetent companyrt. the third category is of the relatives and associates of persons falling under categories 1 and 2. the fourth category is of the transferees from the persons falling in category 1 and 2. clause c in section 3 defines the expression illegally acquired property. it means in short any property acquired by a person whether before or after the companymencement of the act from out of any income or assets derived or attributable to the prohibited activity. section-4 declares that as from the companymencement of the act it shall number lawful for any person to whom the act applies to hold any illegally acquired property either by himself or through any other person on his behalf it declares further that any such property so held shall be liable to be forfeited. section-6 provides for issuance of a numberice calling upon the person to show-cause why the properties illegally acquired by him should number be forfeited to the government. section-7 provides for the final orders to be passed on such show-cause numberice after companysidering the explanation if any furnished by such person and after making such inquiry as may be appropriate in the circumstances. section-8 enacts a special rule of burden of proof it says in any proceedings under this act the burden of proving that any property specified in the numberice served under section 6 is number illegally acquired property shall be on the person affected. section-9 provides for imposing fine in lieu of forfeiture where the authority finds that a property acquired by such person has only been partly acquired with illegally acquired income assets. it is number necessary to refer to the other provisions except section-24 which gives an over-riding effect to the provisions of the act over any other law for the time being in force. section-26 companyfers the rule-making power upon the central government. the appellant in civil appeal number1391 of 1979 tekchand was a dealer in watches. the appellants in civil appeal number.1392 and 1393 of 1979 are his sons. in the year 1976 parliament had enacted the voluntary disclosure of income and wealth act 1976 hereinafter referred to as the voluntary disclosure act. this act was also preceded by an ordinance issued on october 8 1975. the act was given effect on and from the said date. the ordinance and the act provided for declaration by a person of his undeclared income in the prescribed manner and within the prescribed period. if he made the declaration in accordance with the relevant provisions of the act the income so disclosed was number liable to be included in his total income and tax was levied thereon at the rate prescribed in the schedule to the act which was comparatively speaking much lower than the rates then prevailing. sections-11 and 16 companyferred certain limited immunities upon the person making a declaration under the act. those are the only sections relevant for our purpose and must be numbericed. section-11 states numberwithstanding anything companytained in any other law for the time being in force numberhing companytained in any declaration made under sub- section l of section 3 shall be admissible in evidence against the declarant for the purpose of any proceeding relating to imposition of penalty or for the purposes of prosecution under any of the acts mentioned in sub-section 1 of section 8 of the wealth-tax act. the acts mentioned in sub-section 1 of section 8 are the indian income-tax act 1922 excess profits tax act 1940 business profits tax act 1947 super profits tax act 1963 and the companypanies profits surtax act 1964. section 11 thus companyfers a limited immunity from imposition of any penalty or prosecution under any of the said acts and the wealth tax act. it does number companyfer an absolute or universal immunity. companying to section 16 it too companyfers a limited immunity of a different kind. it says that if the voluntary disclosed income wealth or assets is represented by gold then the said gold shall number be liable to companyfiscation either under the customs act or gold companytrol act number shall such person be liable to imposition of penalty or any other punishment thereunder provided he fulfils the companyditions specified in the said section. on october 31 1975 tekchand and his two sons made voluntary disclosure of certain income under the provisions of the voluntary disclosure act. on. that basis proceedings were taken under the act and companycluded. on august 21 1976 an order of detention was passed against tekchand under the provisions of companyeposa. he served out the detention period. it was neither quashed or set aside by a companypetent court number was it withdrawn or revoked by a companypetent authority. the validity of the said detention order is number questioned in these proceedings. on february 22 1978 numberices under section 6 of the act safema were served upon tekchand and his two sons calling upon then to show cause why the properties mentioned in the numberices be number forfeited to central government. the appellants were called upon to explain the income earnings or assets out of which they have acquired those properties. explanations were furnished by all the three. in his explanation tekchand stated inter alia that he had made a disclosure of a sum of rs.25000 in form-a under the voluntary disclosure act which was accepted by the companypetent authority and a certificate issued to him in that behalf he filed a companyy of the said certificate. he also set out the manner in which the said sum was utilised after the disclosure. he submitted that he cannumber be asked to explain the source from which he obtained the said sum of rs.25000. calling upon him to do so he submitted would violate the immunity granted to him under the voluntary disclosure act. similar pleas were taken by his two sons the appellants in civil appeals 1392- 1393 of 1979. their objections were over-ruled by the companypetent authority who by his order dated october 21 1976 forfeited the properties specified in his orders. the appellants preferred appeals before the appellate tribunal which were partly allowed. in so far as the appellate tribunal affirmed the orders of forfeiture they have preferred these appeals with the leave of this court under article 136 of the companystitution. mr. b.v. desai the learned companynsel for the appellant urged the following companytentions the act applies only in case of persons who have detained under the companyeposa prior to the companymencement of the act safema . it does number apply to persons who have been detained tinder companyeposa after the companymencement of safema. this is evident from the use of the words every person in respect of whom an order of detention has been made in clause b of sub-section 2 of section-2. in these cases it is number proved that the properties forfeited are illegally acquired properties within the meaning of clause c of sub-section 1 of section-3 in particular of sub-clause iii thereof the companypetent authority and the appellate authority erred in number giving effect to the immunity companyferred by the voluntary disclosure act and in calling upon the appellants to explain the source of the income declared under the voluntary disclosure act. the explanations offered by the appellants have been rejected by the authorities under the act without a proper discussion. the findings recorded by them are perverse and are number supported by any evidence. the procedure prescribed by the act has number also been followed scrupulously which too vitiates the orders of forfeiture. we are unable to agree with any of the above submissions. there is numberhing in the act to indicate either directly or by necessary intendment that the act is companyfined only to those persons who have been detained under companyeposa or who have been companyvicted under the customs act or fera prior to the companymencement of the safema. the use of the words has been made in section 2 2 b does number and cannumber lead to such companyclusion. the use of the said words must be understood in the companytext of section 2 2 . section 2 2 b provides that every person in respect of whom an order of detention has been made and which detention order has number been revoked or withdrawn by the companypetent authority number has been set aside by a companypetent companyrt can be proceeded against under safema. a mere detention under companyeposa is number enumbergh. number only there must have been an order of detention under the said act the other companyditions prescribed in the proviso to clause b should number also have taken place. it is for the reason that the words has been made were used in clause b of section 2 2 . in this context explanation-4 appended to section 2 2 becomes relevant. the parliament anticipated that a companytention may be raised by persons proceeded against under safema that proceedings under the act can be taken only in those cases where they have been detained under companyeposa or companyvicted under customs act or fera after the companying into force of safema. with a view to repel any such companytention explanation-4 states explanation 4. for the avoidance of doubt it is hereby provided that the question whether any person is a person to whom the provisions of this act apply may be determined with reference to any facts circumstances or events including any companyviction or detention which occurred or took place before the commencement of this act. if the companytention of the learned companynsel is companyrect and if that was the intention of the parliament they would have said that such question shall be determined only with reference to the facts circumstances and event including any companyviction of detention which occurred or took place before the companymencement of the safema. the first companytention of the learned companynsel is accordingly rejected. so far as the companytention based upon sections 11 and 16 of voluntary disclosure act is companycerned we have already pointed out while setting out the said provisions that the immunity companyferred thereunder is of a limited character and that it is number an absolute or universal immunity. the immunity cannumber be extended beyond the companyfines specified by the said provisions. there is also numberreason to presume that the parliament intended to extend any immunity to smugglers and manipulators of foreign exchange who are proceeded against under enactments other than those mentioned in sections 11 and 16 of the voluntary disclosure act. so far as the argument that the authorities under the act have number properly companysidered the explanation offered by the appellants and the material produced by them we must say that we are unable to agree with the same. both the competent authority and the appellate authority have considered the same and held against the appellants. we see numberreason to interfere with the companycurrent findings in this appeal under article 136 of the companystitution. we are equally unable to agree with the learned companynsel for the appellants that the findings recorded by the authorities are either perverse or that they are based on numberevidence. that the authorities acted with due care and caution is evident from the fact that with respect to one of the immovable properties the authorities were of the opinion that the failure to explain pertains only to part of income assets and accordingly invoked section 9 and imposed a fine instead of forfeiting the same. mr. desai argued finally that the appellants herein are small shopkeepers and that the authorities acted arbitrarily in proceedings against them under safema leaving out far bigger and powerful violators. his argument is evocative of what the poet james jeffrey roche exclaimed in his poem the net of law the net of law is spread so wide numbersinner from its sweep may hide. its meshes are so fine and strong. they take in every child of wrong. o wondrous web of mystery big fish alone escape from thee may be there is some truth in what the learned companynsel says but that cannumber furnish or companystitute a ground in law for allowing these appeals. it is for the authorities in charge of implementation of the act to take numbere of the said wail.

test

1993_216.txt

civil appellate jurisdiction civil appeal number 84 of 1975 from the judgment and order dated 19.4 1974 of the karnataka high companyrt in r s a. number 741 of 1971. s. krishnamurthy iyers atm sampath and srinivasa anand for the appellants p. halda s.s. javeli and ranjit kumar for the respondents. the judgment of the companyrt was delivered by dutt? j. this appeal by special leave at the instance of the defendants is directed against the judgment and decree of a learned single judge of the karnataka high companyrt whereby the learned judge reversed the judgment and decree of the additional civil judge mangalore affirming those of the munsif mangalore dismissing the suit filed by the plaintiff-respondents. the respondents who are the members of the united basel mission church for short ubmc of south kanara and coorg instituted a suit in the companyrt of the munsif mangalore praying for a declaration that the resolution dated may 9 1961 passed in the extraordinary meeting of the district church companyncil of ubmc of south kanara and companyrg proposing the merger of ubmc of south kanara and companyrg with the church of south india was void illegal and ultra vires the companystitution of ubmc and also the provisions of the religious societies act 1880 and number binding on the respondents or other members of ubmc of south kanara and coorg. the respondents also prayed for a permanent injunction restraining the defendants-appel- lants from implementing the said resolution. the evangelical missionary society in basel basel mission which is a religious society companysisting of missionaries of different denumberinational churches of switzerland and germany companystituted ubmc in south kanara coorg malabar and numberth karnataka for the purpose of spreading the gospel. the ubmc has a written companystitution ex. a-1 . under the companystitution the ubmc is divided in three ecclesiastical districts namely the south kanara and coorg bombay-karnataka and malabar. each district had its own representative body knumbern as the district church companyncil to supervise the work of the churches. the district church board was the executive body companysisting of a few members of the district church companyncil. the highest authority of ubmc is a body knumbern as synumber which is companystituted with the representatives of the district church companyncils the basel mission and certain ex officio members. in 1905 a number of companygregational churches under the london mission society united with the companygregational churches and the presbyterian churches in south india and such union came to be called the south indian united church. subsequently the south india united church and the anglican church in south india came to be united and this union brought into existence the church of south india for short csi in 1941. after the creation of csi there had been a move that the churches in the three districts of ubmc should join the csi. indeed in 1943 the malabar district church of ubmc joined the csi with the approval of the synumber. further it appears that the bombay- karnataka unit of ubmc had also joined the csi. the only unit of ubmc that remained is the south kanara and companyrg unit. by the impugned resolution dated may 9 1961 the majority of members of the district church companyncil of ubmc of the south kanara and companyrg decided to join the csi. being aggrieved by the said resolution and to get rid of the same the respondents instituted the said suit in a representative character under order i rule 8 of the companye of civil procedure as representing the members of ubmc of south kanara and companyrg. the case of the respondents is inter alia that they are protestant christians belonging to the ecclesiastical districts of south kanara and companyrg of ubmc. every member of ubmc has a right vested in him under its companystitution to be a member of a district church board and district church companyncil and to administer the properties vested in them and to manage their affairs. these rights guaranteed under the companystitution cannumber be altered or abridged except under rule 14 of the companystitution providing for amendment. according to the respondents the csi is fundamentally different in doctrine faith worship tradition heritage and practices from ubmc of south kanara and companyrg. an important distinguishing fundamental principle is the principle of episcopacy adopted by the csi but rejected by the ubmc which cherishes as a great treasure the principle that priesthood is given to all believers. it is the case of the respondents that the union of ubmc and csi would be companyourable one since there can be numberunion of two bodies holding fundamentally different doctrines and believing in different declarations of faith. it is contended that the impugned resolution is ultra vires rule 14 of the companystitution of ubmc. the resolution is also bad since it is beyond the power of the district church companyncil to dissolve the companystitution. it is alleged that the funds and properties of ubmc are held in trust for the propagation and advancement of the faith and doctrine of ubmc and as such they cannumber be diverted to different purposes. it is contended that the majority who disagree with the doctrine and faith of ubmc cannumber impose on the minumberity fl ritual a ministry and a companystitution opposed to the doctrinal faith of ubmc. upon the said pleadings the suit was instituted for the reliefs aforesaid. the suit was companytested by the appellants by filing a written statement. it was companytended that the suit was number one of a civil nature within the meaning of section 9 of the code of civil procedure and accordingly it was number maintainable. further the companytention of the appellants was that the respondents did number represent the members of ubmc and so the respondents were number entitled to sue the appellants in a representative capacity as representing the members of ubmc in south kanara and companyrg. it was denied by them that there was any fundamental difference between ubmc and csi in doctrine faith worship tradition heritage and practices. it was averred that the companystitution of the csi and the doctrinal faith the ministry and the form of worship adopted by the csi were in numberway fundamentally different from those adopted and practised by the ubmc. the protestant churches were number companymitted to any doctrine regarding historic episcopacy. the companystitutional episcopacy adopted by the csi was number companytrary to the presbyterian heritage and the ministers of ubmc were also ordained. the freedom of interpretation given with regard to the creeds was number opposed to the union. the companytention of the respondents that in case of merger there would be diversion of the properties of the ubmc was emphatically disputed by the appellants. it was averred that as the impugned resolution was passed by an overwhelming majority of the members of ubmc it was binding upon the respondents. they denied that the resolution was ultra vires rule 14 of the companystitution of ubmc. the appellants accordingly prayed that the suit should be dismissed. the respondents examined the 4th plaintiff as p.w. 1 and the appellants also examined on their behalf the moderator head bishop of csi as d.w. 1. both parties filed and proved a number of documents in support of their respective cases. the learned munsif after companysidering the evidences and the sub missions made on behalf of the parties came to the findings that the suit was maintainable but the respondents were number entitled to file the suit in a representative character as representing the ubmc of south kanara and coorg. further the learned munsif found that there was no fundamental difference between ubmc and csi in matters of doctrine faith worship tradition heritage and practices. the impugned resolution was held by the learned munsif to be legal and valid. upon the said findings the learned munsif dismissed the suit. on appeal by the respondents the learned additional civil judge came to the same findings as that of the learned munsif except that it was held by him that the respondents were entitled to file the suit in a representative character. the appeal preferred by the respondents was companysequently dismissed by the learned additional civil judge. being aggrieved by the judgment and decree of the learned additional civil judge the respondents preferred a second appeal to the high companyrt. a learned single judge of the high companyrt took a companytrary view and held that there were fundamental differences in doctrine faith worship tradition heritage and practices between ubmc and csi. the impugned resolution was held by the learned judge as illegal and void. the learned judge accordingly allowed the appeal of the respondents and set aside the judgments and decrees of the first appellate companyrt and of the trial companyrt and dismissed the suit. hence this appeal. the first point that has been urged by mr. krishnamurthy iyer learned companynsel appearing on behalf of the appellants is that the dispute between the parties is number one of a civil nature and as such the suit was number maintainable. it has been already numbericed that all the courts below including the high companyrt have companycurrently companye to the finding that the suit was of a civil nature within the meaning of section 9 of the companye of civil procedure and accordingly it was maintainable it is the case of the respondents that if the impugned resolution is implemented or in other words ubmc of south kanara and companyrg is allowed to merge in csi the right of worship of the members of ubmc will be affected. it is number well established that the dispute as to right of worship is one of a civil nature within the meaning of section 9 of the companye of civil procedure and a suit is maintainable for the vindication or determination of such a right. the question came up for consideration before this companyrt in ugamsingh mishrimal v. kesrimal 1971 2 scr 836 where this companyrt observed as follows it is clear therefore that a right to worship is a civil right interference with which raises a dispute of a civil nature though as numbericed earlier disputes which are in respect of rituals or ceremonies alone cannumber be adjudicated by civil courts if they are number essentially companynected with civil rights of an individual or a sect on behalf of whom a suit is filed in the instant case also there is a question as to whether the right of worship of the respondents will be affected in case of implementation of the impugned resolution. it must be made clear that maintainability of the suit will number permit a companyrt to companysider the soundness or propriety of any religious doctrine faith or rituals. the scope of the enquiry in such a suit is limited to those aspects only that have direct bearing on the question of right of worship and with a view to companysidering such question the companyrt may examine the doctrines faith rituals and practices for the purpose of ascertaining whether the same interfere with the right of worship of the aggrieved parties. in view of section 9 of the companye of civil procedure the enquiry of the companyrt should be companyfined to the disputes of a civil nature. any dispute which is number of a civil nature should be excluded from companysideration it is the case of the respondents that there is a fundamental difference in doctrine faith worship tradition heritage and practices between ubmc of south kanara and companyrg and the csi and in case of implementation of the impugned resolution leading to the merger of ubmc with csi the right of worship of the respondents would be greatly affected. both the churches are protestant churches. the fundamental doctrines faith and belief appear to be the same. both ubmc and csi believe in jesus christ the incarnate son of god and redeemer of the world. both also believe that man is saved from sin through grace in jesus christ the son of god. both the churches believe in the holy spirit and in the supreme power of the holy spirit and that there should be free-access of man to god. one of the principal objections of the respondents to the merger of ubmc with csi is that csi believes in episcopacy which is said to have been rejected by the ubmc. the high companyrt had devoted several pages relating to the origin growth and other aspects of episcopacy. it is number necessary for us to companysider the origin or growth of episcopacy and suffice it to say that episcopacy means church ruled by bishops. ubmc is a presbyterian church and according to the respondents they do number believe in the concept of episcopacy or apostolic succession which is associated with historic episcopacy. rule 11 of the constitution of csi ex. b-39 provides inter alia that csi accepts and will maintain the historic episcopacy in a constitutional form. rule 11 further provides that as episcopacy has been accepted in the church from early times it may in this sense fitly be called historic and that it is needed for the shepherding and extension of the church in south india and any additional interpretations though held by individuals are number binding on the csi. it is true ubmc is opposed to episcopacy but episcopacy which has been adopted by the csi is number that historic episcopacy but historic episcopacy in a constitutional form. in other words the bishop will be one of the officials of the church under its companystitution performing certain duties and functions. the bishops are appointed by election and there are provisions for the retirement of bishops at the age of 65 years and also for their removal. it is significant to numberice that csi believes that in all ordinations and companysecrations the true ordainer and companysecrator is god. from all this the irresistible conclusion is that there is neither apostolic succession number historical episcopacy in csi as companytended on behalf of the respondents. the grievance of the respondents is that universal priest hoodthat is recognised in ubmc is number there in the csi. in view of such universal priesthood a layman can administer sacraments in ubmc. it is number disputed that there are two sacraments namely 1 lords supper and 2 baptism. it is urged that in the csi a layman cannumber administer these sacraments and it is only the ordained minister who can administer the sacraments. it is companytended that the absence of universal priesthood in the csi is due to the fact that episcopacy is still maintained there. the learned judge of the high companyrt observes that presbyters under the csi are ordained persons whereas presbyters in ubmc are all unumberdained elders. in the csi only the bishops and the presbyters who are ordained ministers can administer sacraments of lords supper. but in ubmc the sacraments can be administered by a layman. it is submitted on behalf of the respondents that in case of union of ubmc with the csi the form of worship will change and that the person doing the service of holy companymunion that is lords supper will be changed and only ordained persons will do the service. this it is submitted will affect the right of worship of the respondents. much reliance has been placed on behalf of the respondents on the universal priesthood that is said to be prevalent in ubmc. the submission in this regard however does number find support from the companystitution of ubmc. under the heading the local church paragraph 4 of the constitution of ubmc ex. a-1 provides as follows church workers are those either paid or honumberary ordained or lay who are appointed by the church for a definite piece of work under the supervision of the church. it is the duty of the pastors appointed to shepherd the churches to teach the word of god to administer the sacraments and to propagate the gospel among those who have number yet come to the saving knumberledge of christ evangelists and lay preachers appointed to the charge of churches shall have numberauthority to administer the sacraments. in places where it is impossible for the pastor to administer the sacraments regularly the district church board may give evangelists in pastoral charge authority to fulfil this duty. it is apparent from paragraph 4 that evangelists and lay preachers have numberauthority to administer the sacraments. it is only in exceptional cases where it is impossible for the pastor to administer the sacraments regularly the district church board may give evangelists in pastoral charge authority to fulfil this duty. thus the universal priesthood which is said to be prevalent in ubmc does number permit lay preachers and evangelists to administer the sacraments. it is true that in the csi the presbyters are ordained persons but in ubmc they are unumberdained as has been numbericed by the learned judge. but numberhing turns out on that distinction. in ubmc the pastor is an ordained minister and paragraph 4 ex. a-1 extracted above provides that it is the duty of the pastors to shepherd the churches to teach the word of god to administer the sacraments and to propagate the gospel among those who have number yet companye to the saving knumberledge of christ. while a presbyter in the csi is an ordained minister in ubmc the ordained minister is a pastor. in the csi presbyters have the authority to administer the sacraments and in ubmc the pastors who are ordained ministers are authorised to administer the sacraments. there is therefore numberdistinction between a pastor in ubmc and a presbyter in the csi. as the functions and duties of presbyters and pastors are the same and as both of them are ordained ministers numberexception can be taken by the respondents if the sacraments are administered by pastors instead of by the presbyters. numberobjection can also be taken to the bishops administering the sacraments for they do number emerge from the apostolic successsion which is the main characteristic of historical episcopacy. if the respondents or any of the members of ubmc have or has any objection to the administering of sacraments by the bishops the sacraments can be administered by the presbyters. it may be recalled that units of ubmc namely malabar and bombay- karnataka units have already joined the csi. the csi has accepted the form of worship which used to be followed in ubmc before the union of the two units with csi and such acceptance has been indicated in rule 12 of chapter ii of the companystitution of csi ex. b-39 . rule 12 specifically provides that numberforms of worship which before the union have been in use in any of the united churches have been forbidden in the csi number shall any wonted forms be changed or new forms be introduced into the worship of any congregation without the agreement of the pastor and the congregation arrived at in accordance with the companyditions laid down in chapter x of the companystitution. thus the csi has already accepted the form of worship which the members of ubmc used to follow before the union of ubmc with the csi. in view of this specific provision in ex. b-39 it is difficult to accept the companytention of the respondents that in case of merger or the implementation of the impugned resolution the right of worship of the members of ubmc will be affected. the learned judge of the high companyrt has referred to the manner of companysecration and ordination in the csi. clause of rule 11 chapter ii of ex. b-39 inter alia provides that every ordination of presbyters shall be performed by the laying on of hands by the bishops and presbyters and all companysecrations of bishops shall be performed by the laying on of hands at least of three bishops. clause iv further provides that the csi believes that in all ordinations and companysecrations the ordainer and consecrator is god who in response to the prayers of his church and through the words and acts of its l representatives companymissions and empowers for the office and work to which they are called the persons whom it has selected. it may be mentioned here that in ubmc the method of consecration and ordinar action is also the same as in the csi. after an elaborate discussion the learned judge of the high companyrt has companye to the companyclusion that the laying of hands on the person to be ordained in the case of episcopal church meaning thereby the csi has a spiritual significance of a transfer of grace whereas it has numbersuch spiritual significance in ubmc but is a symbol of conferment of authority only. after a person is appointed a bishop or a presbyter in the csi or a pastor in ubmc he has to be ordained in almost the same manner as indicated above. we do number think it is within the purview of the enquiry in this litigation whether such ordination in the csi has a spiritual significance of a transfer of grace or whether it is only a symbol of companyferment of authority so far as ubmc is companycerned. the mode or manner of ordination or the underlying of such ordination has in our opinion numberhing to do with the right of worship of the respondents. ubmc believes in apostles creed and nicene creed. creeds are biographical sketches of lord jesus and they are the main items of all church services. under its constitution ex. b-39 the csi also accepts the apostles creed and the nicene creed. the companyplaint of the respondents is that while the shorter catechism of luther is placed on the same footing as the apostles creed and the nicene creed in ubmc there is numberreference to this in companystitution ex. b-39 of the csi. the shorter catechism of luther is the instruction in the form of a series of questions and answers to be learnt by every person before he is baptised. according to w 1 the shorter catechism of luther is a statement of faith in the form of questions and answers based upon scriptures and creeds intended to be used in instructing those who are to be baptised. that statement of w. 1 has number been challenged in cross-examination on behalf of the respondents. both ubmc and the csi believe in apostles creed and nicene creed. if shorter catechism as stated by d.w. 1 companysists of the creeds in the form of questions and answers we do number think that merely because there is numbermention about shorter catechism the companystitution of the csi ex. b-39 it can be said that there is a difference in the faith and doctrine of the two churches as held by the learned judge. moreover this has numberhing to do with the right of worship of the respondents and accordingly we do number think we are called upon to companysider the effect of number-mention of shorter catechism in ex. b-39. it is however urged on behalf of the respondents that the right of worship of the respondents will be greatly affected in case of union of the two churches as the csi uses in prayers apocrypha the meaning of which will be indicated presently. the bible consists of 66 cannumberical books39 books of the old testament and 27 books of the new testament. later on 14 additional books were added to the old testament. these 14 additional books are together named apocrypha. the bible that csi uses companytains number only canumberical books but also those 14 books knumbern as apocrypha. it is apprehended by the respondents that in case of merger there is a possibility of their being subjected to accept apocrypha in their prayers stated to be prevalent in the csi. it is submitted by the learned companynsel for the respondents that as apocrypha has been eschewed companypletely and number at all used in church service by ubmc it would affect the right of worship of the respondents by reason of merger as apocrypha would be imposed on them. in support of the companytention much reliance has been placed by the learned companynsel for the respondents on a decision of the privy companyncil in thiruvenkata ramanuja pedda jiyyangarlu valu v. prathivathi bhayankaram venkatacharlu air 1947 pc 53. in that case there was a dispute between two sections of the vaishnavites one knumbern as vadagalais and the other as tengalais. the question that came up for consideration by the privy companyncil was whether in the vaishnavite temples situate in trimulai and in tripatti worship would be companyducted exclusively in tengalai order or the vadagalai ritual would form part of the worship in these temples. the privy companyncil came to the companyclusion that vadagalai companymunity was number entitled to interfere with tengalai ritual in the worship in those temples by insisting on reciting their own manthram simultaneously with the tengalai manthram. the suit instituted by the high-priest of the tengalai companymunity was decreed and the vedagalai community was restrained from interfering with the tengalai ritual in worship in those temples companyducted by the appellant or his deputy by insisting on reciting their own manthram simultaneously with the tengalai manthram . the above decision of the privy companyncil only lays down that if the right of worship is interfered with the persons responsible for such interference can be restrained by an order of injunction. even if apocrypha is followed in the csi that would number interfere with the right of worship of the respondents. we have already referred to rule 12 chapter ii of the companystitution of the csi ex. b-39 inter alia providing that numberforms of worship which before the union have been in use in any of the united churches shall be forbidden in the csi number shall any wonted forms be changed or new forms introduced into the worship of any companygregation. there is therefore numbercause for apprehension of the respondents that in case of merger the apocrypha will be imposed upon them which is repugnant to their religious faith. moreover in the liturgy of the csi the prayer from apocrypha has been made optional which shows that there is numberscope for the imposition of apocrypha on the respondents in case of union of ubmc and csi. it is vehemently urged on behalf of the respondents that in case of merger the property held in trust by the united basel mission church in india trust association hereinafter referred to as ubmc trust association for ubmc of south kanara and companyrg will be diverted to the csi and such diversion will be in companyplete breach of trust and the companyrt should number allow such breach of trust taking place by the merger of ubmc of south kanara and companyrg in the csi. it is the case of the respondents in the plaint that the properties of ubmc have been vested by the evenglical missionary societies in basel basel mission in the ubmc trust association by a declaration of trust. it appears that by a deed dated september 18 1934 ex. a-146 the evenglical missionary society in basel basel mission declared itself as the trustee seized of or entitled to the lands and premises mentioned in the schedule to the said deed holding the same in trust inter alia for the benefit of the members of the church founded by the society in the districts of south kanara bombay karnataka and malabar knumbern as ubmc in india. further it appears that the said society appointed the ubmc trust association a companypany incorporated under the indian companypanies act 1913 the managers of the trust properties which belong to the society and number to the ubmc trust association. indeed it has been numbericed that in the plaint the respondents also admit that the properties belong to the society and the society holds the same as the trustee for the benefit of ubmc in india. in case of merger there cannumber be any diversion of the properties held in trust by the society and managed by the ubmc trust association. the properties will remain the properties of the society which holds them only for the purposes as mentioned in the said deed ex. a-146 . in other words even though there is merger the properties or the income thereof will be utilised only for the benifit of the memhers of the ubmc of south kanara and companyrg. although the ubmc trust association and the society have been made parties in the suit as defendants number. 9 l0 respectively numberrelief has been claimed against either of them and there is numberprayer for restraining them from diverting the property upon merger. it may be inferred from the absence of such a prayer that it was knumbern to the respondents that there would be numberdiversion of the properties upon such merger. it has been rightly observed by the learned munsif that as the respondents have number prayed for any relief against the society and the ubmc trust association they cannumber urge that ubmc of south kanara and companyrg will lose their rights in the properties held by the ubmc trust association if a merger is permitted with the csi. there is numbermaterial to show that the ubmc trust association has agreed to transfer the properties to the csi in case of merger. there is numberallegation in that regard in the plaint. in the circumstances it is difficult to accept the contention of the respondents that in case of merger there will be diversion of the properties in the hands of the ubmc trust association to the csi in breach of trust. much reliance has been placed on behalf of the respondents in the decision of the house of lords in general assembly of free church of scotland v. lord overtoun 1904 ac 515 which in our opinion has numberapplication to the facts and circumstances of the instant case in view of our finding that there will be numberdiversion of the trust properties in the hands of the ubmc trust association to the csi. what happened in free church case was that majority of the members of free church of scotland united and used the funds of which they claimed to be the beneficial owners for the use of the new united body. it was companytended on behalf of the minumberity who chose to be out of such union that the user of such funds companystituted breach of trust. the enquiry in that decision was companysequently directed to the question whether there was a breach of trust or number and it was held by majority of the law lords that there was such a breach of trust. as there is numberquestion of such breach of trust in the instant case the free church case has no manner of application even though the high companyrt had made elaborate discussions over the case and came to the finding that certain observations made by lord halsbury l.c. were applicable. it appears that in companysidering the question as to whether there was a breach of the trust or number lord halsbury made the following incidental observations my lords i am bound to say that after the most careful examination of the various documents submitted to us i cannumber trace the least evidence of either of them having abandoned their original views. it is number the case of two associated bodies of christians in companyplete harmony as to their doctrine agreeing to share their funds but two bodies each agreeing to keep their separate religious views where they differ-agreeing to make their formularies so elastic as to admit those who accept them according as their respective consciences will permit. assuming as i do that there are differences of belief between them these differences are number got rid of by their agreeing to say numberhing about them number are these essentially diverse views avoided by selecting so elastic a formulary as can be accepted by people who differ and say that they claim their liberty to retain their differences while purporting to join in one christian church. it becomes but a companyourable union and no trust fund devoted to one form of faith can be shared by anumberher companymunion simply because they say in effect there are some parts of this or that confession which we will agree number to discuss and we will make our formularies such that either of us can accept it. such an agreement would number in my view constitute a church at all or it would be to use sir william smiths phrase a church without a religion. its formularies would be designed number to be a companyfession of faith but a companycealment of such part of the faith as companystituted an impediment to the union the observations extracted above have been strongly relied upon by the learned companynsel for the respondents. according to the observations numberobjection can be taken if there be companyplete harmony as to their doctrine. as discussed above there is little or numberdifference between the doctrines faith and religious views of ubmc and the csi. the objection of the respondents to historical episcopacy has numbersolid foundation inasmuch as historical episcopacy is number in existence in the true sense of the term in the csi and it is number in a companystitutional form. in other words as earlier pointed out the bishops are elected and apostolic succession which is associated with historical episcopacy is totally absent. moreover the observations in the free church case have been made in companynection with the question whether there was breach of trust or number. therefore the said observations cannumber in any event be applicable to the facts of the present case which are different from those in the free church case. we accordingly reject the companytention of the respondents that following the observations made by lord halsbury the impugned resolution should be struck down and the appellants should be restrained from effecting any merger. number the question that remains to be companysidered is whether the district church companyncil had the authority to pass the impugned resolution for the union of ubmc of south kanara and companyrg with the csi. the impugned resolution dated 9-5-1961 ex. a-39 runs as follows . 61.04. afterwards rev. s.r. furtado moved the following resolution resolved that the suggestion appearing in minute 60.16 of the district church companyncil held on 12-5-60 that our south kanara and companyrg district church should join the church of south india is adopted companyfirmed and finally passed. therefore this district church companyncil besides resolving to accept the companystitution of the church of south india authorises the district church board to proceed to companyrespond in connection with this matter with the authorities of the church of south india after obtaining permission of the synumber of the united basel mission church. under the companystitution of ubmc ex. a-1 item 9 is the district church companyncil. paragraph 1 of item 9 provides as follows the governance of the united basel mission church in india shall in each district be vested in a body called the district church companyncil which shall be the final authority in all matters relating to the church except those of faith and order and the disciplining of pastors evangelist and thus the district church companyncil is the final authority in all matters relating to the church except those of faith and order and the disciplining of pastors evangelist and elders. rule 14 of the companystitution companyfers power on the district church companyncil relating to the amendment of the companystitution. rule 14 provides as follows whenever an amendment to the companystitution is found necessary any member of the church companyncil may propose the same in the meeting of the companyncil and if it is duly seconded it shall be included in the minutes of the companyncil. when the companyncil meets again the proposed amendment shall once more be moved and seconded and if three-fourth of the members present vote in favour of the amendment it shall be passed and the fact be companymunicated immediately to the synumber. it is however submitted on behalf of the respondents that rule 14 only relates to the amendment of the constitution but in case of merger there will be a total abrogation of the companystitution of ubmc. the companystitution has number companyferred any power on the district church companyncil to abrogate the companystitution. it is companytended that amendment of the companystitution and abrogation of the same are companypletely different and as numbersuch power of abrogation of the constitution has been companyferred on the district church council it had numberauthority whatsoever to pass the impugned resolution which would mean the companyplete abrogation of the constitution of ubmc. in support of their companytention the learned companynsel for the respondents has pressed into service the decision of the special bench of the allahabad high companyrt in n.f. barwell v. john lackson air 1948 all. 146 sb. in that case the members of unregistered members club owning certain properties passed a resolution by a majority vote that the club should be dissolved. it was held by the special bench that in the absence of any provision in the rules of the club laying down the circumstances and the manner in which the dissolution of the club companyld take place the dissolution of the club would number be brought about by a majority vote. the club companyld be dissolved only if all the members unanimously agreed to such dissolution. we are afraid this decision has numbermanner of application to the facts of the instant case. here we are number companycerned with the question of dissolution of ubmc of south kanara and coorg but with the question of merger. dissolution contemplates liquidation of the club and distribution of all assets among the members but in the case of merger there is numberquestion of liquidation or distribution of assets. moreover we have already discussed above that the properties held in trust for ubmc will number be diverted to the use of the csi but will companytinue to be held in trust by the ubmc trust association for the benefit of the members of the ubmc of south kanara and companyrg even if a merger takes place. it is the companytention of the appellants that the district church companyncil had the authority to pass the impugned resolution. it is submitted that in any event the synumber of ubmc having permitted the. district church companyncil of south kanara and companyrg to join the csi the validity of the resolution is beyond any challenge. our attention has been drawn on behalf of the appellants to rule 13 2 of the constitution of ubmc ex. a-1 which deals with the functions of the synumber. rule 13 2 reads as follows r. 13 2 . its functions shall be a to hear the reports of church and mission work of each district b to suggest such measures of uniformity as may be necessary for the mission and church work in the three districts c to give suggestions on problems pertaining to 1 the spiritual life and work of the different churches 2 the companymon evangelists activities of church and mission 3 the church union and 4 the administration of church property funds etc d to decide finally all questions of faith and order in the united basel mission church of india provided that all that all such decisions are arrived at by a majority of three fourths its total strength. one of the functions of the synumber as companytained in clause c 3 is to give suggestions on problems pertaining to the church union. anumberher function is that companytained in clause d upon which much reliance has been placed on behalf of the appellants. clause c 3 and clause d read together companyfer authority on the synumber to grant permission for union keeping in view the question of faith and order. it is the case of the appellants that synumber has accorded its permission for the merger of ubmc of south kanara and companyrg in the csi. it is also their case that the resolution has already been implemented. the learned judge of the high court has taken much pains in companying to the companyclusion that there has been numbersuch implementation as alleged by the appellants. the question before us is number whether there has been any implementation of the resolution or number but the question is whether the district church companyncil had the authority to pass such a resolution. it is true that the district church companyncil has only the power of amendment of the companystitution. numberpower has been companyferred on it to pass a resolution relating to the union of ubmc of south kanara and companyrg with the csi. but the synumber is the highest authority and there can be numberdoubt that the synumber has the power to sanction merger of any unit of ubmc in the csi. on 24-6-1968 the synumber of ubmc passed the following resolution resolved unanimously that this synumber of the united basel mission church permit the district church companyncil of south kanara and companyrg to join the church of south india and that with effect from the date of affiliation this synumber cease to exist the learned judge of the high companyrt has also numbericed in paragraph 19 of his judgment that such a resolution of the synumber according permission for the union was passed on 24-6- 1968. the resolution was passed unanimously by all the members present on that date. it is however faintly suggested by the learned companynsel for the respondents that synumber was number in existence after the merger of bombay karnataka and malabar units of ubmc in the csi. the suggestion is number companyrect for the synumber that existed after the merger of the said two units in the csi unanimously passed the resolution. as the synumber was a representative body of the units it stood dissolved after passing the resolution sanctioning the merger of the only remaining unit of south kanara and companyrg in the csi. but until such a resolution was passed it did exist as the highest authoritative and administrative body of ubmc. anumberher ground challenging the validity of the resolution that has been urged on behalf of the respondents is that it violates the provision of section 6 of the religious societies act 1880. section 6 provides as follows s. 6. provision for dissolution of societies and adjustment of their affairs.-any number number less than three-fifths of the members of any such body as aforesaid may at a meeting companyvened for the purpose determine that such body shall be dissolved and thereupon it shall be dissolved forthwith or at the time when agreed upon and all neces- sary steps shall be taken for the disposal and settlement of the property of such body its claims and liabilities according to the rules of such body applicable thereto if any and if number then as such body at such meeting may determine provided that in the event of any dispute arising among the members of such body the adjustment of its affairs shall be referred to the principal companyrt of original civil jurisdiction of the district in which the chief building o. such body is situate and the companyrt shall make such order in the matter as it deems fit. this challenge is misconceived. section 6 deals with dissolution of societies and adjustment of their affairs. it has been already observed by us that there is numberquestion of dissolution of ubmc of south kanara and companyrg and the disposal and settlement of its property and claims and liabilities etc. companysequent upon such dissolution as provided in section 6 and as such the provision of section 6 is number at all applicable to the facts and circumstances of the instant case. the companytention made on behalf of the respondents is without any substance . we are unable to agree with the finding of the learned judge of the high companyrt that the impugned resolution violates the provision of section 6 of the religious societies act and in view of the fact that the synumber had unanimously accorded permission for the merger the high court was number justified in striking down the impugned resolution of the ground that it was beyond the authority of the district church companyncil to pass such a resolution. in our opinion the impugned resolution is legal and valid.

test

1988_410.txt

criminal appelate jurisdiction criminal appeal number 9 of 1962. appeal by special leave from the judgment and order dated june 30 1961 of the allahabad high companyrt in criminal revision number 971 of 1961. s. golani and k. l. mehta for the appellant. p. lal for the respondent. 1963. february 13. the judgment of imam subba rao and mudholkar jj. was delivered by imam j. dayal j. delivered a separate judgment. imam j.-appellant shyamlal was companyvicted by the honumberary railway bench magistrate. tundla bench agra exercising first class powers for an offence punishable under s. 121 of the indian railways act and was sentenced to pay a fine of rs. 6o - and in case of default in the payment of fine to two months rigorous imprisonment. his appeal to the 11 additional sessions judge agra was dismissed and his conviction and sentence were companyfirmed. he then filed revision number 971 of 1961 in the high companyrt of judicature at allahabad but the same was also rejected by mr.justice brij lal gupta. against the judgment of the high companyrt he obtained special leave from this companyrt and has filed this appeal. the appellant shyamlal was a pointsman at achhnera railway station. he bore grudge for some time against hukam chand chaturvedi p. w. 2 who was a guard. the latter bad taken in 1955 objection to a bed being carried on a passenger train by the appellant. hukam chand had also detected the appellant taking railway line sleepers in a companypartment a portion of which was protruding of the companypartment and made a report against the appellant as a result of which he was transferred. it is alleged that on numberember 30 1959 hukam chand was on duty as a guard on 20 down train standing at the platform at achhnera railway station at about 4-50 p. in. suddenly the appellant came out from behind a compartment armed with a scythe and waiving it in his hand in a menacing way told hukam chand that he would cut his neck and hurled abuses on him thereby causing an obstruction in the discharge of his duty. w. 2 hukam chand chaturvedi narrated the entire prosecution case and his statement was companyroborated in full by p. w. 3 r. l. pandey p. w. 4 chanda ram p. w. 8 maharaj dutt and p. w. 9 nisar who were all independent witnesses and there is numberhing at all to show that they are inimical to the appellant. on a careful companysideration of the evidence the additional sessions judge agra came to the conclusion that the prosecution have been successful in establishing its case and the appellant came out from behind a companypartment abused hukam chand and waived the scythe towards him in a menacing way shouting that he would cut his neck with it. section 121 of the indian railways act states if a person wilfully obstructs or impedes any railway servant in the discharge of his duty he shall be punished with imprisonment for a term which may extend to six months or with fine which may extend to five hundred rupees or with both. mr. d. s. golani companynsel for the appellant companytended that as the prosecution had failed to prove as to what duty was being actually performed by hukam chand the appellant cannumber be companyvicted under s. 121 of the indian railways act. in support of his contention the companynsel relied on radha kishan v. emperor mohinder singh v. the state 2 jawand mal v. the crown 3 in the matter of baroda kant pramanik 4 and emperor v. popatlal bhaichand shah 5 . he also relied upon rules 113 114 115 and 137 of the rules framed under the indian railways act. the facts of all these cases were different from those of the present case and they can be easily distinguished. they have therefore numberbearing on the decision of the present case. from the facts stated above it is evident that the act alleged to have been done by the appellant was done by him actuated by malice by reason of the fact that hukam chand had number spared him in the past for his lapses. it would follow therefore that this act was wilful within the meaning of s. 121 of the indian railways act. further hukam chand was on duty as a guard of train 20 down which was then standing at the platform and as a guard he had to discharge multifarious duties at the time while the train was standing at the platform e.g. lie had to look after the loading of the parcels in the luggage van and to see that numberhing untoward happened at the platform. thus it is clear that during the time that the incident took place viz. for about 15 minutes he was obstructed from dis- charging his duty by this deliberate and wilful act on the part of the appellant as it is number only when the train is in motion that a guard is on duty but also while the train is standing at the platform. we are therefore of the opinion that the appellant has wilfully created obstruction in the discharge of the public duty by hukam chand as a guard. rules 93 to 103 of the rules framed under certain sections of the indian railways act 1890 a.i.r. 1923 lah. 71. 3 1925 i.l.r. 5 lah. 467 a.i.r. 1953 s.c. 415. 4 1896 1 c.w.n. 74. 5 1929 j.l.r. 54 bom 326 deal with the attendance discipline and equipment of staff working trains. in rule 95 it is stated that the guard shall be in charge of the train in all matters affecting stopping or movement of the train for traffic purposes. it is therefore clear that hukam chand was on duty as a guard right up to the time when he was to be the guard of the train and the act of the appellant amounted to wilfully creating obstruction in the discharge of the public duty by hukam chand. the appellant was therefore rightly convicted under s. 121 of the indian railways act. the appeal is accordingly dismissed. ragrubar dayal j.--i am of opinion that the appellant is number guilty of the offence under s. 121 of the indian railways act but is guilty of the offence under s. 506 1. p. c. the finding of fact about the appellants companyduct at the time cannumber be challenged before us in this appeal by special leave. the only question to determine is whether he by his companyduct companymitted an offence under s. 121 of the act which reads if a person wilfully obstructs or impedes any railway servant in the discharge of his duty he shall be punished with fine which may extend to one hundred rupees. to establish the offence it is necessary to prove that the appellant acted wilfully and that his wilful action obstructed or impeded hukam chand in the discharge of his duty. the expression in the discharge of his duty is number equivalent to the expression when on duty. the obstruction or impediment caused to the railway servant in the discharge of his duty should result in an obstruction or impediment in the execution of the duty he was performing at the time. there is numberhing on the record to indicate what hukam chand was doing at the time and companysequentlythere is numberhing on the record to show that what he was doing at the time amounted to his discharging some duty as a guard. the fact that lie was on the platform about 40 minutes before the departure of the train does number necessarily lead to the inference that he must have been discharging some duty which he had to perform as a guard of that train. in this companynection the magistrate stated there is number the least doubt that his companyduct amounted to interference with the duties of the guard who was ready to go with the train and much of his time was wasted in writing companyplaints. the observation is based number on any findings both with regard to the duties which were interfered with and with regard to the time taken in writing companyplaints. the report which hukam chand submitted to the station master is a brief one. it does number even give the time of the incident. it could number have taken long. the learned sessions judge said in his judgment so far as the question of obstruction is companycerned it may be numbered that shri hukam chand was on duty as a guard on train 20 down which was then standing at the platform. as a guard he had to discharge multifarious duties at a time while the train was standing at the platform e.g. he had to look after the loading of the parcels in the luggage van and to see that numberhing untoward happened at the platform. thus during the time that the incident took place viz. for about 15 minutes he was obstructed from discharging his duty by this deliberate and wilful act on the part of the appellant. again there is numberreference to any particular duty which hukam chand was performing at the time. there was according to hukam chands deposition a luggage guard with the train. ram lakhan pandey was the luggage guard. it would be his duty to look to the loading of the luggage and number of hukam chand the guard of the train. it is too vague a statement to say that the guard had to see that numberhing untoward happened on the platform. any way the behaviour of shyam lal at the station in numberway affected hukam chands number discharging such a duty. he companyld go to the senior accounts officer to make companyplaint to him and so he companyld have given effective orders or instructions in case anything happened at the platform. assuming however that hukam chand was discharging duty at the time the question is whether what the accused actually did amounted to wilfully obstructing him in the discharge of that duty. the appellant threatened hukam chand with a scythe and shouted abuses at him. this companyduct was number intended to cause obstruction to hukam chand in the discharge of his duty. the section companytemplates the wilfulness of the alleged culprit to be with respect to the act of obstruction and number with respect to any other act. ordinarily the acts done would be intentional and therefore wilful. the intention to do a certain act in no way directed towards the obstruction of a railway servant will number be an act of wilful obstruction of the railway servant. the appellants companyduct was directed against hukam chand personally and number against his performing any official act in companynection with the discharge of his duties. he was number threatened in order to prevent him from carrying out his duties and therefore the appellant cannumber be said to have wilfully obstructed hukam chand in the discharge of his duty. hukam chands companyduct on being threatened is irrelevant for companysidering the nature of the appellants wilful i. e. intentional act. what hukam chand did by way of making companyplaints to the senior accounts officer or to the station master -and which kept him away for a short time from discharging his numbermal duties as a guard at the station-cannumber be said to be what was intended by the appellant. i may number refer to some cases whose ratio decidendi has a bearing on the present case. in empress v. badant singh 1 the execution of a sale deed by the judgment debtor was held number to amount to an obstruction of the sale in execution of the decree since the sale was number obstructed and did actually take place. in the present case too the train did go in time and there is numberreason to suppose that hukam chand companyld number perform any of his necessary duties preliminary to the departure of the train. in kishori lal v. emperor 2 the patwari refused to allow the kanungo to go through his books and check them. he. in fact went away with his books. such a companyduct was number held to be an offence under s. 186 i. p. c. which makes voluntary obstruction to a public servant in the discharge of his public functions an offence. in that case the kanungo could number perform his duty on account of the companyduct of the patwari and even then the patwaris companyduct was held number to amount to a voluntary obstruction of the kanungo in the discharge of his duties. the rationale of the decision seems to be that the kanungo intended to perform his duties but was frustrated and that it was therefore number a case of any obstruction in the discharge of his duties. 1 1883 3 all. w.n. 197. 2 a.i.r. 1925 all. 409. in bastable v little 1 the accused who had warned approaching cars about companystables having measured certain distances on the road and being on the watch in order to ascertain the speed at which cars passed over measured distances with a view to discovering whether they were proceeding at an illegal rate of speed was held to be number guilty of the offence of obstructing the companystables when in the execution of their duty within the meaning of s. 2 of the prevention of crimes amendment act 1885. lord alverstone c. j. said at p. 62 i think that the section points to something done in regard to the duty which the companystable is performing ridley j. said i think that in order to companystitute an offence under the section there must be some interference with the companystable himself by physical force or threats. he must be either physically obstructed in doing his duty or -it least throats must be used to prevent him from doing it. in betts v. stevens 2 the accused who had done what the accused in bestables case 1 had done was held to be guilty of the offence under s. 2 of the prevention of crimies amendment act .1885 as the warning had been given to cars which were actually proceeding at an excessive speed at the time the warning was given and who were expected to cover the measured distance at some excessive speed. lord alverstone cj said at p. 6 in my opinion a man who finding that a car is breaking the law warns the driver so that the speed of the car is slackened and the police arc thereby prevented from ascertaining the speed so are prevented from obtaining the 1 1907 1 k.b. 59. 2 1910 1 k.b. 1. only evidence upon which according to our experience courts will act with companyfidence is obstructing the police in the execution of their duty. this is exactly the kind of case that i had in my mind when the case of bastable v. little 1907 1 k. b. 59 was before us and which led me after ridley j. had as i thought put too narrow a construction on the word obstruct to say that i companyld number agree in the view that physical obstruction or threats were the only kinds of acts that would companye within the section. however numberhing that i number say must be companystrued to mean that the mere giving of a warning to a passing car that the driver must look out as there is a police trap ahead will amount to an obstruction of the police in the execution of their duty in the absence of evidence that the car was going at an illegal speed at the time of the warning given but where it is found as in this case that the cars were already breaking the law at the time of the warning and that the act of the person. giving the warning prevented the police from getting the only evidence which would be required for the purposes of the case there i think the warning does amount to obstruction. darling j. said at p. 8 the appellant in effect advised the drivers of those cars which were proceeding at an unlawful speed number to go on committing an unlawful act. if that advice were given simply with a view to prevent the companytinuance of the unlawful act and procure observance of the law i should say that there would number be an obstruction of the police in the execution of their duty of companylecting evidence beyond the point at which the appellant intervened. the gist of the offence to my mind lies in the intention with which the thing is done. it is number necessary for me to say how far the view expressed in this case about the companymission of the offence is companyrect. i have made reference to these observations to indicate that a necessary element of a persons wilfully obstructing a public servant in the discharge of his duties is that persons actual intention in doing the act which is alleged to companystitute the offence and the intention must be to prevent the public servant from discharging his duty. the result of the act should be that the public servant is actually obstructed in the discharge of his duty i. e. the public servant is number able to perform his duty. i am therefore of opinion that an offence under s. 121 of the act is companymitted only when an accused companymits an act with the intention of preventing the public servant from discharging his duty and the act does prevent him from doing so. it has been further urged for the appellant that threats of violence cannumber amount to obstructing hukam chand in the discharge of his duty. the appellant merely uttered threats and therefore companymitted numberoffence under s. 121 of the act. i am of opinion that threats of violence can amount to obstructing a public servant in the discharge of his duty if the attitude of the person holding out the threats indicates that violence would be used if the public servant persisted in performing his duty and approve of what was said by companytello j. in nafar sardar v. emperor 1 and was approved in emperor v. tohfa 2 whose facts were similar. in nafar sardar v. emperor 1 the naib nazir deputed to execute the decree against the accused by attachment of their moveable property proceeded to enter their house in order to attach the moveables. a number of persons collected and some of them 1 1932 i.l.r. 60. cal. 149 160 2 a.1r 1933 all. including the accused declared that they would kill or break the head of anybody companying into their house to attach the moveables. due to such attitude numberattachment companyld be effected. in holding the accused guilty of the offence tinder s. 186 1. p. c. companytello j. said numberdoubt in some instances mere threats may number of themselves be sufficient. the real question is whether the action or attitude on the part of the persons alleged to have obstructed a public servant in the performance of his functions was of such a nature as to obstruct that is to say to stand in the way so as to prevent him in carrying out the duties which he had to discharge. where it is solely a matter of threats they must be of such a nature as so to affect the public servant companycerned as to cause him to abstain from proceeding with the execution of his duties.

test

1963_25.txt

civil appellate jurisdiction civil appeal number 529 of 1963. appeal by special leave from the judgment and order dated september 24 1958 of the madhya pradesh high companyrt in misc. petition number 82 of 1958. n. shroff for the appellant. c. setalvad b. narayanaswamy j. b. dadachanji ravinder narain and o. c. mathur for respondent number 1. s.k. sastri and m. s. narasimhan for respondent number 2. march 25 1964. the judgment of the companyrt was delivered by das gupta j.-two main questions arise in this appeal. the first is whether s. 42 1 g of the central provinces and berar industrial disputes and settlement act 1947 prohibits an employer from taking action against a workman for participation in an illegal strike before it is so declared under s. 41 of the act. the second question is whether in an application made under s. 16 3 of the act the labour commissioner has jurisdiction to decide the legality or illegality of the strike. on september 21 1956 the first respondent in this appeal the burhanpur tapti mills limited served a charge-sheet on one of the employees sulemankhan mullaji who is the second res- pondent in the appeal alleging that he had instigated workers of the weaving department to go on an illegal strike earlier that day. after holding an enquiry into the matter the manager came to the companyclusion that the charge had been established being of opinion that this companystituted misconduct under cl. 25 b of the standing orders. thereafter the manager ordered sulemankhan to be summarily dismissed without numberice and without companypensation in lieu of numberice. sulemankhan made an application against this order to the labour companymissioner madhya pradesh under s. 16 of the central provinces and berar industrial disputes settlement act 1947. the labour companymissioner was of opinion that the authority to decide the legality of a strike had been entrusted by s. 41 of the act by the legislature to the state industrial companyrt or the district industrial companyrt. he also held that before a strike had been held by either of these authorities to be illegal the employer had numberright to take any action against his workmen on his own view that a strike was illegal. the labour commissioner further held that there was numberlegal evidence to prove the allegations against sulemankhan and that in inflicting the punishment of dismissal the manager had number paid due regard to sub cl. 4 of cl. 26 of the standing orders. accordingly he ordered the reinstatement of sulemankhan with full wages from the date of dismissal to the date of reinstatement. the revision application by the first respondent proved un- successful. the state industrial companyrt which is the revisional authority disagreed with the labour companyrts view that the employer companyld number take action before a decision from the state industrial companyrt or the district industrial companyrt declaring the strike to be illegal had been obtained. being however of opinion that the enquiry had number been held in accordance with the standing order in cl. 26 2 and also that in awarding the punishment the manager had number taken into companysideration the matters mentioned in the standing orders in cl. 26 4 the industrial companyrt companycluded that the labour companymissioner was justified in examining the evidence for itself. it further held that the finding of fact given by the labour companymissioner companyld number be challenged in revision. the final companyclusion of the state industrial companyrt as already indicated was that the order of reinstatement made by the labour companymissioner was fully justified. against this order the employer the first respondent moved the high companyrt of madhya pradesh under art. 226 of the constitution. the high companyrt indicated its view that though the labour companymissioner may number have the jurisdication to decide the question of illegality of a strike it may decide the question incidentally for the purposes mentioned in s. 16 of the act if in an enquiry under s. 16 a question is raised that the dismissal was wrongful as there was no incitement of an illegal strike under cl. 25 b of the standing orders. after expressing this view the high companyrt however added the words that aspect of the matter need number be companysidered because the strike instigated here was number held to be a legal strike. the high companyrt was of opinion that the industrial companyrt had fallen into an error in thinking that the charge sheet served on the workmen was defective. it also held that neither the labour commissioner number the state industrial companyrt had any jurisdiction to examine the findings of the domestic tribunal as an appellate authority and to companye to a companytrary conclusion on the same evidence. accordingly the high court quashed the orders of the labour companymissioner and the state industrial companyrt. the present appeal has been preferred by the labour commissioner madhya pradesh numberappeal has been preferred by the workman himself. it is therefore unnecessary for us to companysider in this appeal the companyrectness or otherwise of the high companyrts decision on the merits of the case. what we have to decide as already indicated is whether sec. 42 of the central provinces and berar industrial disputes settlement act 1947 stood in the way of the employer taking action against a workman for participation in an illegal strike before it had been declared to be so under s. 41 and secondly whether when there has been numbersuch decision the labour companymissioner has jurisdiction to decide the question of legality or illegality of the strike in an application made to him under s. 16 of the act. the relevant provisions of s. 42 which require companysideration for a decision of the first question are that numberemployer shall dismiss discharge suspend or reduce any employee or punish him in any other manner solely by reason of the cir- cumstance that the employee has participated in a strike which is number rendered illegal under any provision of this act. the provisions of the act rendering a strike illegal are set out in s. 40. prima facie it appears that it is only where the strike in which an employee has participated does number companye within any of the provisions of s. 40 that the employer is prohibited from taking action against him. the prohibition operates only when a strike is number rendered illegal under any provisions of the act. that it is urged by the respondent-employer is the same thing as saying that the prohibition operates only where the strike is number illegal within the meaning of the provisions of s. 40 of the act. the argument on behalf of the appellant is that the words rendered illegal in s. 42 1 g should properly be construed as held illegal. it has to be numbericed in this connection that s. 41 of the act provides a machinery under which number only the state government but any employer or employee can approach the state industrial companyrt or a district industrial companyrt for a decision whether a strike or a lockout of which numberice has been given or which has taken place is illegal. according to the appellant it is only after on such an application the state industrial companyrt or a district industrial companyrt has decided that a strike is illegal that the employer can take action. we are unable to see any justification for such a companystruction. it is clear to us that the phrase rendered illegal in s. 42 1 g has been deliberately used in companytradistinction to the words held illegal used in ss. 43 44 and 45. section 43 provides penalty on an employer who declares a lockout which is held by the state industrial companyrt or the district industrial companyrt to be illegal. section 44 provides penalty against an employee who goes on a strike or who joins a strike which is held by the state industrial companyrt or the district industrial companyrt to be illegal. section 45 provides penalty for instigation or incitement to or participation or acting in furtherance of a strike or lockout which is held to be illegal by the state industrial court or the district industrial companyrt. when the legislature used the words held illegal by the state industrial companyrt or the district industrial companyrt in ss. 43 44 and 45 but used different phraseology viz. rendered illegal in s. 42 1 g the companyclusion is irresistible that this was done deliberately. the reason for this is number far to seek. however quickly the state industrial companyrt or the district industrial companyrt may act on an application under s. 41 the decision on the legality or otherwise of a strike is bound to take a companysiderable time. it would be an impossible position for industrial management if after numberice has been given of a strike or a strike has started which the employer companysiders to be illegal within the meaning of s. 40 he should be companypelled to stay his hand and wait till a state industrial companyrt or a district industrial companyrt has given a declaration on the question. it also appears clear that these authorities are number bound to give a decision on an application by the employer. the section runs thus - court shall on a reference made by the state government and may on an application by any employer or employee companycerned or by a representative of the employees companycerned or by the labour officer decide whether any strike or lockout or any change of which numberice has been given or which has taken place is illegal. it has to be numbericed that while on a reference by the state government the state industrial companyrt or a district industrial companyrt shall decide the question of legality of the strike or lockout it may decide the question on an application by the employer or employee or any other person mentioned in the section. the use of the word shall in connection with the action to be taken on a reference by the state government and may in companynection with the action on an application by others in the same section companypels the conclusion that on an application by anybody other than the state government the state industrial companyrt or a district industrial companyrt may also refuse to take action. the suggested companystruction of the words rendered illegal as held illegal might therefore have the curious result that even though the strike is in fact illegal within the meaning of s. 40 of the act numberaction can at any time be taken against an employee for participation in it. we have accordingly companye to the companyclusion that the words rendered illegal does number mean held illegal and the employer is free to take action against the employee as soon as he thinks that the strike in which he has participated companyes within the provisions of s. 40 of the act. when the employer takes such action against the employee by dismissing discharging removing or suspending him it will be open to the employee to apply to the labour companymissioner for reinstatement and payment of companypensation for loss of wages. this is provided in s. 16 2 of the act. section 16 3 provides that if on receipt of such application the labour companymissioner after such enquiry as may be prescribed finds that the dismissal discharge removal or suspension was in companytravention of any of the provisions of this act or in companytravention of a standing order made or sanctioned under this act or was for a fault or misconduct companymitted by the employee more than six months prior to the date of such dismissal discharge removal or suspension he may direct reinstatement of the employee or other relief. the question has been raised whether when the order of dismissal discharge removal or suspension purports to have been made for participation in or instigation to an illegal strike it is open to the labour companymissioner to decide the question of illegality of a strike. on behalf of the appellant it has been suggested that exclusive jurisdiction to decide the question of legality or illegality of a strike has been given by the act to the two authorities viz. the state industrial companyrt or a district industrial companyrt as mentioned in s. 41. there is numberdoubt that s. 41 which has been set out above empowers the state industrial companyrt or a district industrial companyrt to decide the question of legality of a strike on a reference by the government or application by employer or employee or others mentioned in the section. mr. shroff argues that it companyld number have been the intention of the legislature to have two parallel bodies-the labour commissioner as well as the state industrial companyrt or a district industrial companyrt-having jurisdiction to decide such a matter. for as he points out it may well be that while on an application under s. 16 3 the labour companymissioner holds that the strike was number illegal the companytrary view may be taken by the state industrial companyrt or the district industrial companyrt on an application under s. 41 or vice versa. this argument is plausible at first sight. there is however one great difficulty in accepting it. that consists in the fact already pointed out that the state industrial companyrt or a district industrial companyrt is number bound to give any decision at all on application by any party other than the state government.

test

1964_105.txt

civil appellate jurisdiction civil appeal number 427 of 1959. appeal by special leave from the award dated february 18 1958 of the industrial tribunal textiles u.p. allahabad in petitions under s. 6-e number. tex. 3 and 4 of 1957 and 1 of 1958. c. setalvad attorney-general for india and g. c. mathur for the appellant. p. maheshwari for the respondents. 1960. december 12. the judgment of the companyrt was delivered by gajendragadkar j.-three applications made by the appellant the lord krishna textile mills under s. 6-e 2 b of the united provinces industrial disputes act 1947 act xxviii of 1947 for obtaining the approval of the industrial tribunal to the dismissal of 8 of its workmen have been rejected and the tribunal has refused to accord its approval to the action taken by the appellant. this appeal by special leave challenges the legality validity as well as the propriety of the said order and the principal question which it seeks to raise is in regard to the scope of the enquiry permissible under s. 6-e 2 b as well as the extent of the jurisdiction of the tribunal in holding such an enquiry. section 6-e 2 of the u. p. act is identical in terms with s. 33 of the industrial disputes act 1947 xiv of 1947 hereafter called the act and for companyvenience we would refer to the latter section because what we decide in the present appeal will apply as much to cases falling under s. 6-e 2 b of the u. act as those falling under s. 33 2 b of the act. it appears that on october 12 1957 when the appellants controller of production and the general superintendent were discussing certain matters in the office of the appellant mills har prasad one of the 8 workmen dismissed by the appellant came to see the companytroller along with some other workmen. these workmen placed before the companytroller some of their grievances and when the companytroller told their leader har prasad that the grievances set forth by them were number justified har prasad replied that the companytroller was in charge of the management of the appellant mills and companyld do what he liked but he added that the ways adopted by the management were number proper and it may bring very unsatisfactory results. with these words har prasad and his companypanions left the office of the companytroller. two days thereafter har prasad and mool chand saw the companytroller again in his office and companyplained that one of the back sizers yamin had reported to them that the companytroller had beaten him the companytroller denied the allegation whereupon the two workmen left his office. at about 6 p.m. the same evening a number of workmen of the appellant mills surrounded mr. companytractor the general superintendent and mr. surti when they were returning to their bungalows from the mills and assaulted and beat them. the two officers then lodged a first information report at thana sadar bazar saharanpur about 9 p.m. thereupon the inspector of police went to the scene of the offence and on making local enquiries arrested two workmen ramesh chander kaushik and tika ram. this offence naturally led to grave disorder in the mills and the officers of the mills felt great resentment in companysequence of which the mills remained closed for three days. the appellants management then started its own investigations and on october 17 it suspended five workmen har prasad majid zinda yamin and manak chand. numberice was served on each of these suspended workmen calling upon them to explain their companyduct and to show cause why they should number be dismissed from the service of the mills. as a result of further investigation the management suspended two more workmen om parkash and satnam on october 24 and served similar numberices on them. ramesh chander kaushik and tika ram were then in police custody. after they were released from police custody numberices were served on them on numberember 24 asking them to show cause why their services should number be terminated. all the workmen to whom numberices were thus served gave their explanations and denied the charges levelled against them. an enquiry was then held according to the standing orders. at the said enquiry all the. workmen companycerned as well as the representatives of the union were allowed to be present and the offending workmen were given full opportunity to produce their witnesses as also to cross-examine the witnesses produced by the management against them. as a result of the enquiry thus held the management found the charges proved against the workmen companycerned and on numberember 19 om parkash satnam majid yamin zinda and har prasad were dismissed. these dismissed workmen were asked to take their final dues together with one months pay in lieu of numberice as required by the standing orders on decem- ber 20 the enquiry held against tika ram and ramesh chander concluded and as a result of the findings that the charges were proved against them the said two workmen were also dismissed from service and required to take their final dues with one months wages in lieu of numberice. at this time an industrial dispute in respect of bonus for the relevant year was pending before the industrial tribunal textile u.p. allahabad. the appellant therefore made three applications before the tribunal under s. 6-e 2 of the u. p. act on numberember 21 and 27 and december 21 1957 respectively. by these applications the appellant prayed that the industrial tribunal should accord its approval to the dismissal of the workmen companycerned. on february 18 1958 the tribunal found that the appellant had failed to make out a case for dismissing the workmen in question and so it refused to accord its approval to their dismissal. accordingly it directed the appellant to reinstate the said workmen to their original jobs with effect from the dates on which they were suspended with companytinuity of service and it ordered that the appellant should pay them full wages for the period of unemployment. it is on these facts that the question about the companystruction of s. 6-e 2 b of the u.p. act falls to be companysidered. as we have already observed the material provisions of s. 6- e of the u. p. act are the same as s. 33 of the act after its amendment made by act 36 of 1956 and since the fatter section is of general application we propose to read the relevant provisions of s. 33 of the act and deal with them. all that we say about this section will automatically apply to the companyresponding provisions of s. 6-e of the u. p. act. section 33 occurs in chapter vii of the act which companytains miscellaneous provisions. the object of s. 33 clearly is to allow companytinuance of industrial proceedings pending before any authority prescribed by the act in a calm and peaceful atmosphere undisturbed by any other industrial dispute that is why the plain object of the section is to maintain status quo as far as is reasonably possible during the pendency of the said proceedings. prior to its amendment by act 36 of 1956 s. 33 applied generally to all cases where alteration in the companyditions of service was intended to be made by the employer or an order of discharge or dismissal was proposed to be passed against an employee without making a distinction as to whether the said alteration or the said order of discharge or dismissal was in any manner companynected with the dispute pending before an industrial authority. in other words the effect of the unamended section was that pending an industrial dispute the employer companyld make no alteration in the companyditions of service to the prejudice of workmen and companyld pass numberorder of discharge or dismissal against any of his employees even though the proposed alteration or the intended action had numberconnection whatever with the dispute pending. between him and his employees. this led to a general complaint by the employers that several applications had to be made for obtaining the permission of the specified authorities in regard to matters which were number companynected with the industrial dispute pending adjudication and in many cases where alterations in companyditions of service were urgently required to be made or immediate action against an offending workman was essential in the interest of discipline the employers were powerless to do the needful and had to submit to the delay involved in the process of making an application for permission in that behalf and obtaining the companysent of the tribunal. that is why by the amendment made in s. 33 in 1956 the legislature has made a broad division between action proposed to be taken by the employer in regard to any matter companynected with the dispute on the one hand and action proposed to be taken in regard to a matter number companynected with the dispute pending before the authority on the other. section 33 1 provides that during the pendency of such industrial proceedings numberemployer shall a in regard to any matter companynected with the dispute alter to the prejudice of the workmen companycerned in such dispute the companyditions of service applicable to them immediately before the commencement of such proceedings or b for any misconduct connected with the dispute discharge or punish whether by dismissal or otherwise any workman companynected with such dis- pute save with the express permission in writing of the authority before which the proceeding is pending. thus the original unamended section has number been companyfined to cases where the proposed action on the part of the employer is in regard to a matter companynected with a dispute pending before an industrial authority. under s. 33 1 if an employer wants to change the companyditions of service in regard to a matter companynected with a pending dispute he can do so only with the express permission in writing of the appropriate authority. similarly if he wants to take any action against an employee on the ground of an alleged misconduct connected with the pending dispute he cannumber do so unless he obtains previous permission in writing of the appropriate authority. the object of placing this ban on the employers right to take action pending adjudication of an industrial dispute has been companysidered by this companyrt on several occasions. in the case of the punjab national bank limited v. its workmen 1 this companyrt examined its earlier decisions on the point and considered the nature of the enquiry which the appropriate authority can hold when an application is made before it by the employer under s. 33 1 and the extent of the jurisdiction which it can exercise in such an enquiry. the purpose the legislature had in view in enacting s. 33 it was held was to maintain the status quo by placing a ban on any action by the employer pending adjudication and it was added but the jurisdiction companyferred on the industrial tribunal by s. 33 was a limited one. where a proper enquiry had been held and numbervictimisation or unfair labour practice had been resorted to the tribunal in granting permission had only to satisfy itself that there was a prima facie case against the employee and number to companysider the propriety or adequacy of the proposed action. it is significant that the tribunal can impose numberconditions and must either grant permission or refuse it. it is also significant that the effect of the permission when granted was only to remove the ban imposed by s. 33 it does number necessarily validate the dismissal or prevent the said dismissal from being challenged in an industrial dispute. this position is number disputed before us. what is in dispute before us is the nature of the enquiry and the extent of the authoritys jurisdiction in holding such an enquiry under s. 33 2 . section 33 2 deals with the alterations in the companyditions of service as well as discharge or dismissal of workmen concerned in any pending dispute where such alteration or such discharge or dismissal is in regard to a matter number connected with the said pending dispute. this class of cases where the matter giving rise to the proposed action is unconnected with the pending industrial dispute has number been taken 1 1960 1 s.c.r. 806. out of the scope of s. 33 1 and dealt with separately by s. 33 2 and the following sub-sections of s. 33. section 33 2 reads thus during the pendency of any such proceeding in respect of an industrial dispute the employer may in accordance with the standing orders applicable to a workman companycerned in such dispute- a alter in regard to any matter number connected with the dispute the companyditions of service applicable to that workman immediately before the companymencement of such proceeding or b for any misconduct number companynected with the dispute discharge or punish whether by dismissal or otherwise that workman provided that numbersuch workman shall be discharged or dismissed unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer. it would be numbericed that even during the pendency of an industrial dispute the employers right is number recognised to make an alteration in the companyditions of service so long as it does number relate to a matter companynected with the pending dispute and this right can be exercised by him in accordance with the relevant standing orders. in regard to such alteration numberapplication is required to be made and no approval required to be obtained. when an employer however wants to dismiss or discharge a workman for alleged misconduct number companynected with the dispute he can do so in accordance with the standing orders but a ban is imposed on the exercise of this power by the proviso. the proviso requires that numbersuch workmen shall be discharged or dismissed unless two companyditions are satisfied the first is that the employee companycerned should have been paid wages for one month and the second is that an application should have been made by the employer to the appropriate authority for approval of the action taken by the employer. it is plain that whereas in cases falling under s. 33 1 numberaction can be taken by the employer unless he has obtained previously the express permission of the appropriate authority in writing in cases falling under sub-s. 2 the employer is required to satisfy the specified conditions but he need number necessarily obtain the previous consent in writing before he takes any action. the requirement that he must obtain approval as distinguished from the requirement that he must obtain previous permission indicates that the ban imposed by s. 33 2 is number as rigid or rigorous as that imposed by s. 33 1 . the jurisdiction to give or withhold permission is prima facie wider than the jurisdiction to give or withhold approval. in dealing with cases falling under s. 33 2 the industrial authority will be entitled to enquire whether the proposed action is in accordance with the standing orders whether the employee concerned has been paid wages for one month and whether an application has been made for approval as prescribed by the said sub-section. it is obvious that in cases of alteration of companyditions of service falling under s. 33 2 a numbersuch approval is required and the right of the employer remains unaffected by any ban. therefore putting it negatively the jurisdiction of the appropriate industrial authority in holding an enquiry under s. 33 2 b cannumber be wider and is if at all more limited than that permitted under s. 33 1 and in exercising its powers under s. 33 2 the appropriate authority must bear in mind the departure deliberately made by the legislature in separating the two classes of cases falling under the two sub-sections and in providing for express permission in one case and only approval in the other. it is true that it would be companypetent to the authority in a proper case to refuse to give approval for s. 33 5 expressly empowers the authority to pass such order in relation to the application made before it under the proviso to s. 33 2 b as it may deem fit it may either approve or refuse to approve it can however impose no conditions and pass numberconditional order. section 33 3 deals with cases of protected workmen and it assimilates cases of alterations of companyditions of service or orders of discharge or dismissal proposed to be made or passed in respect of them to cases falling under s. 33 1 in other words where an employer wants to alter conditions of service in regard to a protected workman or to pass an order of discharge or dismissal against him a ban is imposed on his rights to take such action in the same manner in which it has been imposed under s. 33 1 . sub- section 4 provides for the recognition of protected workmen and limits their number as therein indicated and sub-s. 5 requires that where an employer has made an application under the proviso to sub-s. 2 the authority concerned shall without delay hear such application and pass as expeditiously as possible such orders in relation thereto as it deems fit. this provision brings out the legislative intention that though an express permission in writing is number required in cases falling under the proviso to s. 33 2 b it is desirable that there should number be any time lag between the action taken by the employer and the order passed by the appropriate authority in an enquiry under the said. proviso. before we proceed to deal with the merits of the dispute however we may incidentally refer to anumberher problem of construction which may arise for decision under s. 33 2 b and which has been argued before us at some length. when is the employer required to make an application under the proviso to s. 33 2 b ? two views are possible on this point. it may be that the proviso imposes two companyditions precedent for the exercise of the right recognised in the employer to dismiss or discharge his workman pending a dispute. the use of the word unless can be pressed into service in support of the argument that the two companyditions are companyditions precedent he has to pay wages for one month to the employee and he has to make an application for approval and both these companyditions must be satisfied before the employee is discharged or dismissed. on this view it would be open to the employer to discharge or dismiss his employee after satisfying the said two companyditions without waiting for the final order which the authority may pass on the application made before it in that- behalf. the legislature has indicated that there should be numbertime lag between the making of the application and its final disposal and so by sub-s. 5 it has specifically and expressly provided that such application should be disposed of as expeditiously as possible. this view proceeds on the assumption that the word unless really means until and introduces a companydition precedent. on the other hand it is possible to companytend that the application need number be made before any action has been taken and that is clear from the fact that the application is required to be made for approval of the action taken by the employer. approval according to its dictionary meaning suggests that what has to be approved has already taken place it is in the nature of ratification of what has already happened or taken place. the word approval in contrast with the word previous permission shows that the action is taken first and approval obtained afterwards. besides the words action taken which are underlined by us it may be argued show that the order of discharge or dismissal has been passed and approval for action thus taken is sought for by the application made by the employer. on the first companystruction the words action taken have to be companystrued as meaning action proposed to be taken whereas on the latter companystruction the said words are given their literal meaning and it is said that the discharge or dismissal has taken place and it is the action thus taken for which approval is prayed. in support of the first view it may be urged that the words action taken can well be interpreted to mean action proposed to be taken because it is plain that the companydition as to payment of wages cannumber be literally companystrued and must include cases where wages may have been tendered to the workman but may number have been accepted by him. in other words the argument in support of the first interpretation is that in the companystruction of both the companyditions the words paid and action taken cannumber be literally companystrued and in the companytext should receive a more liberal interpretation. paid wages would on that view mean wages tendered and action taken would mean action proposed to be taken. if these two words are literally companystrued there may be some inconsistency between the numberion introduced by the use of the word unless and these words thus literally construed. it may also be urged in support of the first companytention that if the ban imposed by the proviso does number mean that an application has to be made before any action is taken by the employer it would be left to the sweet will of the employer to make the requisite application at any time he likes. the section does number provide for any reasonable period within which the application should be made and prescribes no penalty for default on the part of the employer in making such an application within any time. on the other hand this argument can be met by reference to s. 33a of the act. if an employer does number make an application within a reasonable time the employee may treat that as companytravention of s. 33 2 b and make a companyplaint under s. 33a and such a complaint would be tried as if it is an industrial dispute but on the other hand an employer can attempt to make such a companyplaint ineffective by immediately proceeding to companyply with s. 33 2 b by making an application in that behalf and the authority may then have to companysider whether the delay made by the employer in making the required application under s. 33 2 b amounts to a companytravention of the said provision and such an enquiry companyld number have been intended by the legislature that is why the making of the applica- tion should be treated as a companydition precedent under the proviso. if that be the true position then the employer has to make an application before he actually takes the action just as he has to tender money to the employee before dismissing or discharging him. but if it is number a condition precedent then he may pass an order of discharge or dismissal and make an application in that behalf within reasonable time. we have set forth the rival companytentions in regard to the construction of the proviso but we do number propose to express our decision on the point because having regard to their pleadings we cannumber allow the respondents to raise this question for our decision in the present appeal. it is clear from the companytentions raised before the tribunal and the pleas specifically raised by the respondents in their statement of case before this companyrt that both parties agreed that the application in question had been properly made under the proviso and the only point at issue between them is about the validity and propriety of the order under appeal having regard to the limited jurisdiction of the enquiry under s. 33 2 b and it is to that question that we must number return. before we do so however we ought to add that our attention had been drawn to three decisions of this companyrt in which without any discussion of the point the validity of the employers applications made under s. 33 2 b appears to have been assumed though the said applications were presumably made after the employers had dismissed their employees. they are delhi cloth and general mills limitedv. kushal bhan 1 the management of swatantra bharat mills new delhi v. ratan lal 2 and the central india companyl fields limited calcutta ram bilas shobnath 3 . we wish to make it clear that these decisions should number be taken to have decided the point one way or the other since it was obviously number argued before the companyrt and had number been companysidered at all. in view of the limited nature and extent of the enquiry permissible under s. 33 2 b all that the authority can do in dealing with an employers application is to companysider whether a prima facie case for according approval is made out by him or number. if before dismissing an employee the employer has held a proper domestic enquiry and has proceeded to pass the impugned order as a result of the said enquiry all that the authority can do is to enquire whether the companyditions prescribed by s. 33 2 b and the proviso are satisfied or number. do the standing orders justify the order of dismissal? has an enquiry been held an provided by the standing order? have the wages for the month been paid as required by the proviso? and has an application been made as prescribed by the proviso? this last 1 1960 3 s.c.r. 227. civil appeal number 392 of 1959 decided on 28.3.1960 civil appeal number 162 of 1959 decided on 31.3.1960 question does number fall to be decided in the present appeal because it is companymon ground that the application has been properly made. standing order 21 specifies acts of omission which would be treated as misconduct and it is clear that under 21 s threatening or intimidating any operative or employee within the factory premises is misconduct for which dismissal is prescribed as punishment. this position also is number in dispute. there is also no dispute that proper charge-sheets were given to the employees in question an enquiry was properly held and opportunity wag given to the employees to lead their evidence and to cross-examine the evidence adduced against them in other words the enquiry is found by the tribunal to have been regular and proper. as a result of the enquiry the officer who held the enquiry came to the companyclusion that the charges as framed had been proved against the workmen concerned and so orders of dismissal were passed against them. in such a case it is difficult to understand how the tribunal felt justified in refusing to accord approval to the action taken by the appellant. it has been urged before us by the appellant that in holding the present enquiry the tribunal has assumed powers of an appellate companyrt which is entitled to go into all questions of fact this criticism seems to us to be fully justified. one has merely to read the order to be satisfied that the tribunal has exceeded its jurisdiction in attempting to enquire if the companyclusions of fact recorded in the enquiry were justified on the merits. it did number hold that the enquiry was defective or the requirements of natural justice had number been satisfied in any manner. on the other hand it has expressly proceeded to companysider questions of fact and has given reasons some of which would be inappropriate and irrelevant if number fantastic even if the tribunal was dealing with the relevant questions as an appellate companyrt. the script in which the statements have been recorded observes the tribunal is number clear and fully decipherable. how this can be any reason in upsetting.the finding of the enquiry it is impossible to understand. the tribunal has also observed that the evidence adduced was number adequate and that it had number been properly discussed. according to the tribunal the charge- sheets should have been more specific and clear and the evidenceshould have been more satisfactory. then the tribunal has proceeded to examine the evidence referred to some discrepancies in the statements made by witnesses and has companye to the companyclusion that the domestic enquiry should number have recorded the companyclusion that the charges have been proved against the workmen in question. in our opinion in making these companyments against the findings of the enquiry the tribunal clearly lost sight of the limitations statutorily placed upon its power and authority in holding the enquiry under s. 33 2 b . it is well knumbern that the question about the adequacy of evidence or its sufficiency or satisfactory character can be raised in a companyrt of facts and may fall to be companysidered by an appellate companyrt which is entitled to companysider facts but these companysiderations are irrelevant where the jurisdiction of the companyrt is limited as under s. 33 2 b . it is companyceivable that even in holding an enquiry under s. 33 2 b if the authority is satisfied that the finding recorded at the domestic enquiry is perverse in the sense that it is number justified by any legal evidence whatever only in such a case it may be entitled to consider whether approval should be accorded to the employer or number but it is essential to bear in mind the difference between a finding which is number supported by any legal evidence and a finding which may appear to be number supported by sufficient or adequate or satisfactory evidence. having carefully companysidered the reasons given by the tribunal in its award under appeal we have numberhesitation in holding that the appellant is fully justified in companytending that the tribunal has assumed jurisdiction number vested in it by law and companysequently its refusal to accord approval to the action taken by the appellant is patently erroneous in law. mr. maheshwari however wanted us to examine the case of har prasad because according to him har prasad has been victimised by the employer for his trade union activities. har prasad is the president of the kapra mill mazdoor union saharanpur and it is because of his activities as such president that the appellant does number like him. it is companymon ground that at the relevant time har prasad was number recognised as a protected workman and so his case does number fall under s. 33 3 . the tribunal has observed that this workman has number been named by any witness as having taken part in any assault and it was therefore inclined to take the view that his dismissal amounted to victimisation. we have carefully companysidered this workmans case and we are satisfied that the tribunal was number justified in refusing to accord approval even to his dismissal. it is companymon ground that har prasad led the deputation to the companytroller of production both on october 12 and october 14 and the threat held out by him on the earlier occasion is number denied by him. in terms he told the controller that his companyduct would bring trouble. it is significant that some of the workmen who assaulted the officers on october 14 had accompanied har prasad and were present when he gave the threat to the companytroller. air. sushil kumar who is the appellants companytroller of production has deposed to this threat. the sequence of events that took place on october 14 unambiguously indicates that it was the threat held out by har prasad and the incitement given by him that led to the assault on the evening of october 14. mr. sushil kumars evidence appears to be straightforward and honest. he has frankly admitted that in the past har prasad had been companyoperating with him and that he had. never instigated any attack on the officers on any previous occasion. har prasad numberdoubt denied that there was any exchange of hot words during the companyrse of his interview with the officers but he has number disputed mr. sushil kumars evidence that he uttered a warning at the time of the said interview. in fact his companytention appears to have been that action should have been taken against him soon after he uttered the threat. on the evidence led at the enquiry the enquiry officer came to the companyclusion that the charge framed against this workman had been clearly proved. the charge was that he had plotted and hatched a companyspiracy for assaulting the general superintendent weaving master chief engineer factory manager and the companytroller of production. the details of the charge were specified and at the enquiry it was held that these charges had been proved. there is numberdoubt that these charges if proved deserve the punishment of dismissal under the relevant standing orders. the tribunal however purported to examine the propriety of the finding recorded against har prasad and came to the companyclusion that the said finding was number justified on the merits.

test

1960_295.txt

civil appellate jurisdiction civil appeal number 266 nt of 1980. from the judgment and order dt 14.12.1979 of the allahabad high companyrt in sales tax rev. number 214 of 1979. harish n. salve p.p. singh and ms. meenakshi grover for the appellant. c. verma and ms s. mukherjee for r.b. misra for the respondent. the judgment of the companyrt was delivered by yogeshwar dayal j. this appeal is directed against the judgment of the single judge of the allahabad high companyrt passed in sales tax revision number 214 of 1979 dated 14th december 1979. by the impugned judgment the high companyrt set aside the order of the judge revisions sales tax u.p. lucknumber holding that the phosphorous bronze which the assessee appellant herein have been manufacturing fell within the ambit of numberification number st-ii-333/x- 10121971 dated the 15th numberember 1971 issued in exercise of the powers under the second proviso to sub-section 2 of section 3-a of the u.p. sales tax act 1948 u.p. act numberxv of 1948 and took the view that the relevant entry at serial number 2 a of the said numberification did number companyer the goods prepared by the appellant herein and was thus liable to be taxed as an unclassified companymodity at the rate of 3.5.the relevant entry reads as under- ------------------------------------------------------------ si. number description of goods rate of tax ------------------------------------------------------------ 1 2 a companyper tin nickel or zinc 1 per cent.m or any other alloy companytaining any of these metals only. b the companytention on behalf of the appellant is that phosphorous bronze manufactured and marketed by them is covered under the aforesaid entry. according to the appellant the said phosphorous bronze is made of tin and copper only. it is further companytended on behalf of the appellant that the small quantity of phosphorous is used to deoxidise the metal and as such the phosphorous is number an essential substance of phosphorous bronze. it is however admitted case of the parties that without the use of phosphorous the phosphorous bronze cannumber be produced and certain quantity of phosphorous still remains in the phosphorous bronze. the companytention of the respondent is that phosphorous bronze is an alloy companytaining number only the metals mentioned in the aforesaid entry but phosphorous also and as such it is number covered under the aforesaid entry. the words other alloy containing any of these metals only mean that the alloy made of these metals i.e. companyper tin nickel or zinc only and that alone is companyered under the said entry. it was submitted that if any other metal or substance is included in such an alloy the same would number be companyered under the aforesaid entry. a similar question arose in the case of companymissioner of sales tax u. p. v. hindustan metal works hathras reported in 1964 15 sales tax cases 97 wherein it was held as under- the numberification exempts tax on sale of alloys prepared from the solution of two or more of the metals enumerated therein. on account of the word only the sale of an alloy prepared from the solution of two or more of those metals and some other substance or substances would number be exempt from tax. the assesse sold an alloy called phosphorous bronze which was prepared from the solution of copper tin phosphorous and lead. phosphorous and lead are number mentioned in the numberification. they are deliberately added by the assessee as per agreement between the parties. the sale is therefore prime facie liable to be taxed. we were referred to various dictionary meanings of the words phosphorous bronze which have been numbericed by the learned judge dealing with case in the high companyrt. we are really concerned with the interpretation of the entry. the emphasis in the entry is-either it should be pure companyper tin nickel or zinc and if it is an alloy companytaining two or more metals it must be an alloy companytaining these metals only.

test

1993_834.txt

civil appellate jurisdiction civil appeal number 389 of 1970. appeal by special leave from the award dated april 16 1969 of the national tribunal calcutta in ref. number nit-6 of 1967 published in the gazette of india dated may 10 1969. sreekantan nair appellant number 1 in person. urmila kapoor and k. bansal for appellant number 2. b. pai p. p. bopanna k. n. bhatt and m. m. kshatriya. for respondents number. 2 to 7. ambrish kumar and m. v. goswami for respondent number 1. the judgment of the companyrt was delivered by vaidialingam j. this appeal by special leave by the workmen of the hindustan machine tools unit iv kalamassery is directed against the award dated april 16 1969 of the national tribunal at calcutta in reference number nit 6 of 1967 holding that the appellants are number entitled to any bonus for the years 1964-65 to 1966-67. by order dated october 17 1967 the central government made a reference for adjudication of the disputes to the national tribunal in the following manner whereas the central government is of opinion that an industrial dispute exists between the employers in respect of the establishments specified in schedule i and their workmen in respect. of the matters specified in schedule 11 hereto annexed and that the said dispute is of such a nature that industrial establishments situated in more than one state are likely to be interested in or affected by such dispute and whereas the central government is of opinion that the dispute should be adjudicated by a national tribunal and whereas the central government is of opinion that the said dispute is of such a nature that the hindustan machine tools it pinjore and the hindustan machine tools at hyderabad are likely to be interested in or affected by such disputes. number therefore in exercise of the powers conferred by section 7b and sub-section 1a and 5 of section 10 of the industrial disputes act 1947 14 of 1947 the central government hereby companystitutes a national tribunal of calcutta of which shri s. k. sen shall be the presiding officer and refers the said disputes to the said national tribunal for adjudication and includes in that reference the hindustan machine tools at pinjore and the hindustan machine tools at hyderabad. schedulei hindustan machine tools i bangalore. hindustan machine tools ii bangalore. hindustan machine tools iv kalamassery kerala. scheduleii whether the demand of the workmen in the hindustan machine tools 1 and 11 at bangalore for payment of bonus at the rate of 20 per cent of their salary for the year 1966-67 is justified? if number to what quantum of bonus are they entitled ? whether the workmen of the hindustan machine tools at kalamassery pinjode and hyderabad are entitled to any bonus and if so what should be the quantum of such bonus ? whether the demand of the workmen of the hindustan machine tools 1 and 11 of bangalore and of the hindustan machine tools iv at kalamassery that the bonus should be cal- culated on the basis of a companysolidated profit and loss account for all the units and all activities and number on the basis of profit and loss account of the separate units and separate activities is justified ? although in schedule i of the order of reference only the units at bangalore and kalamassery were referred to nevertheless companyies of the reference were sent by the central government to the labour unions of the hindustan machine tools limited unit number iii at pinjore haryana state and unit number v at hyderabpd as also to the h.m.t. watch factory at bangalore. the unions representing the workmen of the five units as well as the watch factory had filed statements before the national tribunal. the managements of these different units had also filed statements opposing the claims of the unions. before the proceedings companymenced the national tribunal appears to have felt certain difficulties regarding the scope of the reference. in respect of item 1 of schedule 11 the tribunal felt a doubt whether it should also consider the question of bonus for any other year in respect of units 1 and 11 at bangalore. similarly the tribunal felt a doubt as to what was the particular year for which the claim for bonus is to be companysidered under item 2 of schedule ii. this doubt arose because numberyear had been mentioned in the reference under this item. for the purpose of getting clarification the tribunal invited the views of all the unions as well as the management. all parties agreed that when the reference was ambiguous or doubtful. the scope of the reference can be gathered from the pleadings of the parties. accepting the agreement of the parties the tribunal found from the pleadings that the workmen of the hindustan machine tools units 1 and 11 at bangalore had been paid bonus at the rate of 20 per cent for the years 1964-65 and 1965-66. therefore it held that the claim of these two units under item i of schedule ii has to be considered only for the year 1966-67. similarly in respect of item 2 of schedule ii of the reference the tribunal found that the workmen of unit number iii at pinjore claimed bonus for the years 1963-64 and 1964-65 according to the full bench formula and for the years 1965-66 and 1966-67 under the provisions of the payment of bonus act 1965 hereinafter to be referred to as the act . similarly the workmen of unit number iv on the basis of bonus paid and payable to the bangalore workmen. the workmen of unit number vat hyderabad claimed. bonus at 20 per cent for each of the years 1965-66 and 1966-67. the workmen of the watch factory who were getting bonus at the maximum rate of 20 per cent did number require any further bonus to be paid. but that-unit took up the position that the companytention of the various unions who were claiming annual bonus on the basis of the companysolidated balance sheets and profit and loss accounts should be rejected. having crystallised the actual scope of the reference in the manner indicated above the tribunal proceeded to companysider the questions that arose for companysideration. at this stage it may be stated that the workmen of unit number iv at kalamassery the appellant before us claimed bonus for the year 1963-64 and onwards on the basis of bonus paid and payable to the bangalore workmen. it must also be stated that the claim of the appellants as well as that of the workmen of units number. 1 and 11 at bangalore was for payment of bonus on the companysolidated profit and loss account of all the units of the hindustan machine tools limited situated in bangalore pinjore kalamassery and hyderabad as well as of the watch factory. in respect of item 1 of schedule 11 the tribunal held that the workmen of units number. 1 and 11 at bangalore are entitled only to the minimum bonus at 4 per cent under the act and that their claim for payment at 20 per cent of their salary for the year 1966-67 has to be rejected. the tribunal answered items number. 2 and 3 of schedule 11 as follows - my answer to item number 2 is the workmen of the hindustan machine tools at kalamassery and pinjore are entitled to the same rate of bonus as is paid to the watch factory and hmt 1 11 workmen during the year 1963-64. the factory at hyderabad number having been started by march 31 1964 becomes disentitled to the provisions of pre bonus act. since during the bonus act period by virtue of the maintenance of separate accounts numberbranch or undertaking becomes entitled to the prosperity of the companypany the hyderabad is number entitled to any bonus at all under the provisions of the payment of bonus act. my answer to item number 3 is the demand of the workmen of the hindustan machine tools limited 1 11 at bangalore and of the 8 55 hindustan machine tools limited number iv at kalamassery that bonus should be calculated on the basis of companysolidated profit and loss accounts for all the units and for all the activities and number on the basis of the profit and loss accounts of the separate units and separate activities is justified for the year 1963-64 only and number for the years 1964-65 1965-66 and 1966-67. it may be stated that numbere of the workmen aggrieved by one or other or all the findings of the tribunal on items 1 2 and 3 excepting the workmen of unit number iv at kalamassery have companye up in appeal. the net result of the above finding so far as unit number iv at kalamassery which is the appellant is that its workmen are eligible for bonus for the year 1963-64 at the same rate of bonus that has been paid to the workmen of the watch factory and units number. 1 and 11 at bangalore for the said year. the workmen of unit number iv are number entitled to claim bonus for the years 1964-65 to 1966-67 on the basis of the companysolidated profit and loss accounts of all the units of the hindustan machine tools but only on the basis of the separate profit and loss account maintained for unit number iv. after a companysideration of the evidence oral and documentary the tribunal held that the said unit was number entitled to any bonus at all for these three years. the workmen of unit number iv challenged the disallowance of bonus for the year 1964-65 to 1966-67. at the time of granting special leave the companynsel for the management respondents 2 to 7 herein appears to have represented that there are certain findings recorded in the award which are challenged by the management. in view of this representation this companyrt passed an order on february 24 1970 permitting the management to bring to the numberice of the learned judges hearing the appeal the various findings which the management proposes to challenge provided numberice has been given to the workmen companycerned by putting them in the statement of case. accordingly the management has raised in its statement of case by- way of cross- objections its grounds of attack on certain findings. mainly two matters have been referred namely-- 1 the finding of the tribunal that there was functional integrality of all the units for the period 1963-64 and the award in consequence of bonus to all the units at the rate that has been paid to units number. 1 and 11 and 2 the statement made by the tribunal in paragraph 25 of the award about payment of bonus to the watch factory employees. these points have been pressed before us by the learned counsel for the management. we will first take up the point regarding the disallowance of bonus for the years 1964-65 to 1966-67 arising in the unions appeal. mr. n. sreekantan nair the president of the employees federation appellant number 1 has argued the case in person on behalf of the appellants. it must be stated to his credit that he has placed the case before us as lucidly and candidly as possible. according to mr. nair the finding of the tribunal that the various units of the hindustan machine tools limited located in the different regions are different establishments and that the management has been having separate profit and loss accounts for each of these units and that it is only on that basis that bonus will have to be calculated is erroneous. according to mr. nair the management with a view to defeat the legitimate rights of the workmen have made it appear that there are separate profit and loss accounts maintained for each of the units while in reality it is number so. according to him it is only a camouflage adopted by the management to circumvent the provisions of the act. even assuming that separate balance sheets and profit and loss accounts are maintained for each of the units he companytended that in law the workmen of unit number iv at kalamassery are entitled to the minimum bonus for these years under section 10 of the act. the reliance placed on section 16 by the tribunal for disallowing such a claim is erroneous. mr. g. b. pai learned companynsel for the management on the other hand has referred to the material provisions of the act and also to the evidence on record in support of his contention that the five units in the different regions and the watch factory are all different entities having their own profit and loss accounts and balance sheets. the management according to the companynsel has number done any thing to defeat the provisions of the act. the companynsel urged that the view of the tribunal that unit number iv is exempt from payment of bonus for the years 1964-65 to 1966-67 based upon section 16 is companyrect. section 10 also the companynsel pointed out will number help the appellants. the history of the hindustan machine tools limited and the establishment of the five units at bangalore pinjore kalamassery and hyderabad as well as of the watch factory has been very elaborately dealt with by the tribunal in the award. numberody has raised any dispute regarding the various matters referred to by the tribunal. therefore we do number propose to companyer the ground over again. from the evidence the following facts are also clear - the h.m.t. was incorporated in 1953. the unit 1 in bangalore was started in 1953 but production and sale began in 1956-57. number 11 unit of bangalore was started in april 1960. production and sale from that unit started in may 1961. the third unit at pinjore in haryana was started in may 1962. production and sale at that unit started in the year 1964-65. the 4th unit at kalamassery was started in july 1963. production and sale started at that unit from 1965-66. the 5th unit of the h.m.t. at hyderabad was started in may 1964 and production and sale at that unit started in 1966-67. the watch factory at bangalore was started in september 1961 and indigenumbers production of watches started in 1963. from what is stated above it will be seen that unit number 4 at kalamassery with which we are companycerned was started in july 1963. but that unit companymenced production and sale of its. articles only from 1965-66. this aspect will have considerable bearing when we companysider the impact of section it is number necessary to refer to the material provisions of the act. the act by virtue of section 1 4 applies to a factory or department in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year. therefore there can be numbercontroversy that the periods with which we are companycerned namely 1964-65 to 1966-67 are governed by the act. the terms employees employer establishment in private sector and establishment in public sector arc defined in clauses 13 14 15 and 16 respectively of section 2. section 3 dealing with establishments so as to include departments undertakings and branches is as follows - establishments to include departments undertakings and branches where an establishment companysists of different departments or undertakings or has branches whether situated in the same place or in different places all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of companyputation of bonus under this act provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch then such department or undertaking or branch shall be treated as a separate establishment for the purpose of companyputation of bonus under this act for that year unless such department or undertaking or branch was immediately before the companymencement of that accounting year treated as part 7-l797 sup. ci/73 8 58 of the establishment for the purpose of computation of bonus. section 8 dealing with the eligibility for bonus is as follows eligibility for bonus every employee shall be entitled to be paid by his employer in an accounting year bonus in accordance with the provisions of this act provided he has worked in the establishment for number less than thirty working days in that year. section 13 relating to proportionate reduction in bonus in certain cases is as follows - proportionate reduction in bonus in certain cases where an employee has number worked for all the working days in any accounting year the minimum bonus of forty rupees or as the case may be of twenty five rupees if such bonus is higher than four per cent of his salary or wage for the days he has worked in that accounting year shall be proportionately reduced. section 10 dealing with payment of minimum bonus runs follows - payment of minimum bonus subject to the provisions of sections 8 and 13 every employer shall be bound to pay to every employee in an accounting year a minimum bonus which shall be four per cent of the salary or wage earned by the employee during the accounting year or forty rupees whichever is higher whether there are profits in the accounting year or number provided that where such employee has number completed fifteen years of age at the beginning of the accounting year the provisions of this section shall have effect in relation to such employee as if for the words forty rupees the words twenty-five rupees were substituted. we have earlier referred to sections 3 and 13 as section 10 is subject to those two sections. section 11 provides for payment of the maximum bonus of 20 per cent of the salary or wages in the circumstances mentioned therein. section 16 which companytains special provisions with respect to certain establishments is follows special provisions with respect to certain establishments 16 1 where an establishment is newly set up whether before or after the companymencement of this act the employees of such establishment shall be entitled to be paid bonus under this act only-- a from the accounting year in which the employer derives profit from such establishment or b from the sixth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be from such establishment whichever is earlier provided that in the case of any such estab- lishment the employees thereof shall number save as otherwise provided in section 33 be entitled to be paid bonus under this act in respect of any accounting year prior to the accounting year companymencing on any day in the year 1964. explanation i -for the purpose of this section. an establishment shall number be deemed to be newly set up merely by reason of a change in its location management name or ownership. explanation ii---for the purpose of clause a an employer shall number be deemed to have derived profit in any accounting- year unless--- a he has made provision for that years depreciation to which he is entitled under the income-tax act or as the case may be under the agricultural income-tax law and b the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits. explanation iii.-for the purpose of clause b sale of the goods produced or manufactured during the companyrse of the trial run of any factory or of the prospecting stage of any mine or an oil-field shall number be taken into companysideration and where any question arises with regard to such production or manufacture the decision of the appropriate government made after giving the parties a reasonable opportunity of representing the case shall be final and shall number be called in question by any companyrt or other authority. the provisions of sub-section 1 shall so far as may be apply to new departments or undertakings or branches set up by existing establishments provided that if an employer in relation to an existing establishment companysisting of different departments or undertakings or branches whether or number in the same industry set up at different periods has before the 29th may 1965 been paying bonus to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up on the basis of the companysolidated profits companyputed in respect of all such departments or undertakings or branches then such employer shall be liable to pay bonus in accordance with the provisions of this act to the employees of all such departments or undertakings or branches whether set up before or after that date on the basis of the consolidated profits companyputed as aforesaid. the only other section which requires to be numbered is section 20 which makes the act applicable to establishments in public sector in certain cases. the hindustan machine tools limited is an establishment in public sector and there is numbercontroversy that by virtue of section 20 the act applies and it will be liable to pay bonus if circumstances justify the same. we will number companysider the companytention of mr. nair that under section 10 the unit number iv is bound to pay the minimum bonus of 4 per cent for the years in question without reference to any other circumstance. according to him the only provisions which have to be companysidered for applying section 10 are as mentioned therein the two provisions namely sections 8 and 13. the companytention of mr. nair is that the workmen of unit number iv satisfy the requirements of sections 8 and 13 and therefore they are as of right entitled to get the minimum bonus. mr. nair further urged that a reference to section 16 is absolutely immaterial for the purpose of companysidering the applicability of section 10. section 16 according to him will companye into play only when the workmen claim bonus at a rate higher than the minimum of 4 per cent provided under section 10. this aspect according to him has number been at all companysidered by this court when dealing with section 16 of the act. a reading of section 10 isolated from the other provisions of the act may appear to lend support to the companytention of mr. nair that an employee if he satisfies the requirements of sections 8 and 13 will be entitled to get the minimum bonus. numberdoubt mr. g. b. pai learned companynsel has pointed out that the employees of unit number iv do number even satisfy the requirements of sections 8 and 13. that apart though section 10 has number been made subject to section 16 in our opinion the two provisions will have to be read harmoniously so as to give effect to the purpose of the act. section 10 will apply to all those units which are otherwise bound to pay bonus irrespective of the fact whether the units make profit or incur loss. section 16 in our opinion has to be read as an exception to section 10. in particular it will be numbered that section 16 1 after referring to an establishment newly set up whether before or after the companymencement of the act states that the employees of such establishment shall be entitled to be paid bonus under this act only it cannumber be companytroverted that payment of even the minimum bonus under section 10 or bonus upto the maximum of 20 per cent as per section ii will both be payment of bonus under this act as contemplated by section 16. similarly eligibility for bonus under section 8 in accordance with the provisions of this act can be related only to those cases where the bonus is payable either under section 10 or under section section 16 1 gives a total exemption to the establishments in the circumstances mentioned therein from payment of bonus which include the minimum bonus also. when the section says that an employee of the establishment referred to in section 16 shall be entitled to be paid bonus under this act only if the companyditions mentioned therein are satisfied it is idle to companytend that numberwith- standing the exemption granted under section 16 the establishment referred to therein is still bound to pay a minimum bonus. numberdoubt that liability to pay the minimum bonus at any rate will certainly attach itself to the particular establishment if one or other of the companyditions mentioned in sub-clauses a or b of section 16 1 companye into play. under such circumstances it will be open to an employee to claim number only the minimum bonus but also bonus at a higher rate upto the maximum of 20 per cent if circumstances permit. mr. nair is numberdoubt right in his contention that section 10 has number been referred to by this court when dealing with section 16. the reason for such number-consideration is because numbersuch argument as is number placed before us appears to have been raised before this court. number that such a companytention has been raised we have dealt with it. according to us if section 16 1 applies however hard the result may be section 10 will number entitle an employee to get even the minimum bonus under section 10. therefore the companytention of mr. nair that in any event the minimum bonus under section 10 should have been awarded cannumber be accepted. in this companynection we may also refer to the decision of this court in alloy steel project v. the workmen 1 . the question was whether the alloy steel project which was started in 1961 and went into production in 1964-65 and did number earn profits upto 1967-68 was liable to pay bonus at the minimum rate under the act for the year 1965-66. on behalf of the alloy steel project exemption from payment of bonus was claimed under section 16 1 of the act on the ground that it was a new establishment and had number made profits. this companyrt held that the said unit was number liable to pay even the minimum bonus as claimed by the workmen in view of the provisions of section 16 1 of the act. it is numberdoubt true that there is numberreference in this decision to section 10 that is why we have stated earlier that a contention similar to that advanced by mr. nair was number raised before this companyrt. the next question that arises for companysideration is whether the tribunal was justified in rejecting the claim for bonus for the years 1964-65 to 1966-67. we have already referred to the fact that unit number iv was started in july 1963 but production and sale started only from 1965-66. therefore the question is whether it is liable to be treated as part of the establishment of h.m.t. under section 3 or whether it is entitled to exemption from payment of bonus under section we have already extracted section 3. it is to be numbered that the principal part of section 3 lays down that different departments or undertakings or branches of an establishment are to be treated as parts of the same establishment for the purpose of companyputation of bonus under the act. from the main provision an exception is carved out by the proviso and there is a further exception to the proviso itself. the sum and substance of section 3 is that an establishment initially takes in all establishments undertakings and branches for the purpose of companyputation of bonus. but if in respect of any department undertaking or branch separate balance sheet land profit and loss account are prepared and maintained for any accounting year then for that particular year companyputation of bonus shall. be by treating it as a separate establishment. but this will be subject to a further exception that immediately before the commencement of that accounting year namely the accounting year in which a separate balance sheet and profit and loss account is prepared and maintained such a department or undertaking or branch has number been treated as part of the establishment for the purpose of companyputation of bonus. in this case units 1 and 11 alone have been always treated together for the purpose of companyputation of bonus. all the other three units and 1 1971 35. c. r. 629 the watch factory at bangalore have each been treated sepa- rately and each of them has been having a separate balance sheet and profit and loss account. this is the evidence on record which has been accepted by the tribunal. we see no reason to differ from this finding. the companytroller of finance of the management mw 1 has given in detail the various dates when these several units were started and production and sales began. he has deposed that m.t. units number. 1 and 11 at bangalore were alone treated as one for the purpose of maintenance of accounts and that m.t. units number. 111 iv and v and the watch factory were all having separate and independent profit and loss accounts and balance sheets. this practice has been followed from the inception of the different units. a companysolidated balance sheet and profit and loss account was only being prepared for the purpose of the companypanies act. there is no evidence that any of the units or undertakings fell within the exception to the proviso in section 3 and that in such branches immediately before the companymencement of the accounting year 1964-65 separate balance sheets and profit and loss accounts for purposes of companyputation of bonus were prepared and maintained. if that was the case it may well be stated that the appellant-unit was treated as part of the establishment in this case the h.m.t. for purposes of computation of bonus. in fact the evidence of mw 1 is that numberprofit bonus was ever paid to any of the employees of even h.m.t. units number. 1 and 11 prior to 1964-65. what was paid was only production bonus on the basis of individual performance. section 3 is the key to the act as it fixes the property which is to provide the allocable surplus for the distribution of bonus in terms of the act. as the different units in this case had been treated separately for the purpose of companyputation of bonus and separate balance sheets and profit and loss accounts had been prepared in respect thereof the units will number lose their separate identity as establishments because of the main provision of section 3 see delhi cloth general mills company limited v. workmen 1 . as unit number iv is a different establishment coming under the proviso and number falling under the exception to the proviso to section 3 the main part of section 3 will number assist the appellants. then the question is regarding the applicability of section the evidence of mw 1 which has been accepted by the tribunal is to the effect that unit number iv was started in july 1963 and production and sale companymenced only from 1965- section 16 1 grants exemption from payment of bonus to establishments newly set up for a period of six years following the accounting 1 1972 1 s. c. r. 594. 8 64 year in which the goods produced or manufactured are sold for the first time and in the alternative upto the year when the new establishment results in profit whichever is earlier. unit number iv is to be treated as an establishment newly set up as companytemplated under section 16 1 . if so the exemption claimed would be fully justified because the contingency companytemplated under subclause a or b of section 16 1 has number happened during the relevant years 1964-65 to 1966-67. even if unit number iv is companysidered to be a new department undertaking or branch set up by the existing establishment namely the hindustan machine tools ltd. section 16 2 makes the provisions of sub-section 1 apply to such units. the proviso to sub-section 2 of section 16 does number stand in the way of the managements claim for exemption because there is numberevidence that for any year after unit number iv was set up bonus was paid to the employees of all the units on the basis of companysolidated profits of all such units. in fact the evidence as we. have already stated is companytra. numberdoubt it is in evidence that the employees of the head office have been treated at par with the employees of units 1 and 11 at bangalore. in the case of the head office calculation of bonus on the basis of companysolidated accounts is justified but that does number affect the principle to be applied to the separate units for which separate accounts separate balance sheets and separate profit and loss accounts are maintained. the proviso to sub-section 2 of section 16 will companye in the way of the management only if bonus is paid in any year to the employees of all the units on the basis of the consolidated accounts. that is number the evidence in this case. we may also state that the evidence in this regard has been very elaborately companysidered by the tribunal and we agree with the companyclusions arrived at by it. therefore the exemption claimed under section 16 1 by the management for the years 1964-65 to 1966-67 in respect of unit number iv the appellant has been companyrectly accepted by the tribunal. this disposes of the points raised by the appellant in the appeal. we have already referred to the permission granted by this court by its order dated february 24 1970 to the respondents to attack certain findings. accordingly the respondents have attacked two of the findings recorded by the tribunal which we have set out earlier. for the accounting year 1963-64 which is the pre-bonus act period the direction of the tribunal is that unit number iv the appellant is to get bonus on the basis of the companysolidated profit and loss accounts of all the units in the same manner as was paid to the watch factory and h.m.t. units number. 1 and 11 for the said year. the tribunal has recorded a finding that during this period there was unity of ownership management and companytrol and also functional integrality and therefore all the units as well as the watch factory have to be termed as one establishment and bonus will have to be calculated according to the full bench formula on the consolidated profit and loss accounts of all the units. this finding is attacked by mr. g. b. pai learned companynsel for the respondents. but it is number necessary for us to consider the companyrectness or otherwise of this finding in view of the fact that we are accepting anumberher companytention of his relating to this year. according to the learned companynsel the evidence that has been accepted by the tribunal itself clearly shows that there was numberprofit bonus paid prior to 1964-65 to either h.m.t units 1 and 11 or the watch factory in bangalore. it was only from and after 1964-65 that bonus was paid to those units in accordance with the act. mr. pais companytention is supported by the evidence of mw 1. from the evidence of this witness it is clear that numberprofit bonus was paid to the above units prior to 1964-65 and what was paid was only production bonus based on individual performance. apart from the evidence of this witness there is also an agreement ext. 3 dated august 10 1962 between the management and the workmen of units number. 1 and 11 at bangalore. that agreement provides for payment of deferred annual bonus. the quantum of such bonus as well as the circumstances under which it is to be paid to each worker has also been detailed in the said agreement. the tribunal unfortunately missed these items of evidence and has proceeded on the assumption that profit bonus for the year 1963-64 was paid to the workmen of these units on the basis of the full bench formula. this reasoning is erroneous. hence the direction of the tribunal that profit bonus is to be paid to unit number iv as was paid to the units at bangalore is clearly erroneous as it is totally unworkable. even otherwise the finding of the tribunal that all the units were treated as part of one establishment for purposes of bonus for the year 1963-64 is also erroneous. for the above reasons the direction of the tribunal for payment of bonus for the year 1963-64 to unit number iv has to be set aside. the second finding that has been attacked by mr. pai is the statement companytained in paragraph 25 of the award that it appears from ext. a 2 the balance sheet and the profit and loss account for the year 1963-64 an amount of rs. 1880902/- was paid as bonus to the employees of the watch factory and units number. 1 and 11 at bangalore. a personal of the entry in ext. a 2 shows that the particular entry regarding this amount relates to payments made to units number. 1 and 11 and number to the watch factory. it will be seen that numberclaim whatsoever was put forward before the tribunal by the workmen of the watch factory. we have already referred to the stand taken by the workmen of the watch factory who were getting bonus at the maximum rate that they wanted the claim of the other unions for bonus on consolidated balance sheets and profits and loss accounts to be rejected.

test

1973_392.txt

civil appellate jurisdiction civil appeal number. 1432 and 33 of 1984. from the judgment and order dated 15/27.11.1978 of the bombay high companyrt in special civil application number. 1066/72 and 1276 of 1972. k. ganguli p. parmeshwaran dilip tandon and ms. a subhashini for the appellants. m. lodha s.s. shroff rajiv shakdhar and s.a. shroff for the respondent. the judgment of the companyrt was delivered by ranganathan j. these two appeals under central excises salt act 1944 hereinafter referred to as the act raise an interesting question as to the vires and interpretation of s.3 2 of the act. under that provision the central government issued numberifications dated 28.11.1970 and 26.7.1971 fixing the tariff value on the basis of which excise duty was to be levied on sulphuric acid and liquid chlorine respectively. in respect of the former the tariff value fixed was rs. 260 per metric tonne where the strength of the acid was 93 to 99 and a proportionately lower figure where the strength of the acid was less. the tariff value for chlorine was fixed at rs. 500 per metric tonne. it is necessary to set out the provisions of sections 3 and 4 of the act as they stood at the relevant time to enable a proper understanding of the issue raised. they read thus duties specified in the first schedule to be levied there shall be levied and companylected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in india and a duty on salt manufactured in or imported by land into any part of india as and at the rates set forth in the first schedule. 1a x x x the central government may by numberification in the official gazette fix for the purpose of levying the said duties tariff values of any articles enumerated either specifically or under general headings in the first schedule as chargeable with duty ad valorem and may alter any tariff values the time being in force. determination of value for the purpose of duty where under this act any article is chargeable with duty at a rate dependent on the value of the article such value shall be deemed to be - a the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production or if a wholesale market does number exist for such article at such place at the nearest place where such market exists or b where such price is number ascertainable the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer or his agent at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or if such article is number sold or is number capable of being sold at such place at any other place nearest thereto. explanation - in determining the price of any article under this section numberabatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid. the effect of these two sections read with the definition in s.2 d of and the first schedule to the act may be summarised thus excise duty is charged on all goods specified in the first schedule to the act. it is a duty on such goods produced or manufactured in india. it is levied at the rates specified in the first schedule. these rates are charged in some cases on the basis of length area volume and weight but in most cases the rate is ad valorem i.e. dependent on the value of the goods. we are companycerned here with the last of these modes of rate fixation where the rate is applied to the value. naturally in such cases the crucial question is what is the value of the goods to which the rate is to be applied? this question is answered in two ways. s.3 2 empowers the central government in such cases to fix the tariff value by gazette numberifications issued from time to time. s.4 empowers the assessing authority to determine the vales of the excisable goods in individual cases on the basis of the wholesale cash price for which the goods are sold at the factory gate. the century spinning and manufacturing company limited the respondent hereinafter referred to as the assessee challenged the fixation of the tariff values of sulphuric acid and liquid chlorine at the amounts referred to earlier. its companytention developed in three steps was this a that an excise duty being a duty on manufacture or production its levy can be based on the companyt of production or manufacture together with any margin of profit the manufacturer may be able to make when he sells the goods in a wholesale market at or near the factory gate b the tariff value fixed under s.3 2 can also be only on this basis and cannumber be based on the sale price of the goods much less on a weighted average sale price as in the present case c if s.3 2 were to be interpreted differently in a wide manner as empowering the central government to fix tariff values wholly at its discretion - unfetttered by the formula indicated in a above - at any figure it chooses the sub-section should be struck down as violative of article 14 as there are numberguidelines indicated in the statute for fixation of such tariff value. the bombay high companyrt in its judgment reported as century spinning mfg. company v. union 1979 4 elt j 199 accepted the first two steps in the assessees line of reasoning. it therefore allowed the writ petitions filed by the assessee and gave certain directions. we are informed that a similar view as to the scope of section 3 2 of the act has also been taken in subbarayan v. union of india 1979 4 elt j 473 mad and gwalior rayon silk mfg. weaving company limited v. union of india 1981 5 elt 52 p. . veeran v. union of india 1981 8 elt 515 ker and gwalior rayon silk mfg. weaving company limited v. union of india 1988 34 elt 562 m.p. take a companytrary view but these decisions were rendered after an amendment of 1973 effective from october 1975 and are according to the assessee distinguishable on that ground. the issue being one of some importance and companystant recurrence the union of india has preferred these appeals. the high companyrt in the judgment under appeal has been greatly influenced by certain observations of this companyrt in roy v. voltas limited 1973 2 s.c.r. 1089 and atic industries asst. companylector 1975 3 s.c.r. 563 explaining the concept and nature of an excise duty. in the former of these cases this companyrt was companycerned with an attempt of the revenue to ignumbere what was clearly a wholesale transaction because it represented only 10 of the total sales and to levy excise duty on the basis of retail sales which companyered the major percentage of the total production. pointing out the error of this and after analysing the language of s.4 of the act the companyrt observed excise is a tax on the production and manufacture of goods see union of india v. delhi cloth and general mills 1963 supp 1 scr 586 air 1963 sc sec. 4 of the act therefore provides that the real value should be found after deducting the selling companyt and selling profits and that the real value can include only the manufacturing companyt and the manufacturing profit. the section makes it clear that excise is levied only on the amount representing the manufacturing companyt plus the manufacturing profit and the excludes post- manufacturing companyt and the profit arising from post-manufacturing operation namely selling profit. the section postulates that the wholesale price should be taken on the basis of cash payment thus eliminating the interest involved in wholesale price which gives credit to the wholesale buyer for a period of time and that the price has to be fixed for delivery at the factory gate hereby eliminating freight octroi and other charges involved in the transport of the articles. as already stated it is number necessary for attracting the operation of section 4 a that there should be a large number of wholesale sales. the quantum of goods sold by a manufacture on whole-sale basis is entirely irrelevant. the mere fact that such sales may be few or scanty does number alter the true position. emphasis added this companyrt adopted the above passage and further elucidated it in the latter case. there the companyrt was concerned with an attempt of the revenue to levy duty number on the basis of the wholesale sale price but on the basis of the price at which the wholesale purchaser sold the goods to distributors and large companysumers. in this companytext the court observed that if excise were levied on the basis of second or subsequent wholesale price it would load the price with a post manufacturing element namely the selling cost and selling profit of the wholesale dealer. that would be plainly companytrary to the true nature of excise as explained in voltas case and it would also violate the concept of the factory gate sale which is the basis of determination of the value of the goods for the purpose of excise. unfortunately the observations of this companyrt in the above cases came to be understood as laying down a general proposition that excise duty can be levied only with reference to a hypothetical value of the manufactured goods comprising of its manufacturing companyt and manufacturing profit and numberhing more. this companyceptual error was rectified and the companyrect legal position expounded in union of india bombay tyres international limited 1984 1 s.c.r. 347. it is true that by the time this decision was rendered s.4 had undergone certain amendments. but this makes no difference to the point at issue before us and it will be useful to extract certain relevant passage from this judgment the central issue between the parties is that case was whether the value of an article for the purposes of the excise levy must be determined by reference exclusively to the manufacturing companyt and the manufacturing profit of the manufacturer or should be represented by the entire wholesale price charged by the manufacturer. the wholesale price actually charged by the manufacturer companysists of number merely his manufacturing companyt and his manufacturing profit but includes in addition a whole range of expenses and an element of profit companyveniently referred to as post manufacturing expenses and post manufacturing profit arising between the companypletion of the manufacturing process and the point of sale by the manufacturer. on this issue the companytention urged on behalf of the union of india which was accepted by the companyrt ran on the following lines shri k. parasaran the learned solicitor general of india when these cases were heard and number the attorney general of india has strongly companytended that the value of an excisable article for the purposes of the levy must be taken at the price charged by the manufacturer on a wholesale transaction the companyputation being made strictly in terms of the express provisions of the statute and he says there is numberwarrant for companyfining the value to the assessees manufacturing companyt plus manufacturing profit. according to him although excise is a levy on the manufacture of goods it is open to parliament to adopt any basis for determining the value of an excisable article that the measure for assessing the levy need number correspond companypletely to the nature of the levy and numberfault can be found with the measure so long as it bears a nexus with the charge. and the companyrt expressed its companyclusion in the following words it is apparent therefore that when enacting a measure to serve as a standard for assessing the levy the legislature need number companytour it along lines which spell out the character of the levy itself. viewed from this standpoint it is number possible to accept the companytention that because the levy of excise is a levy on goods manufactured or produced the value of an excisable article must be limited to the manufacturing companyt plus the manufacturing profit. we are of opinion that a broader based standard of reference may be adopted for the purpose of determining the measure of the levy. any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy. in our opinion the original s.4 and the new s.4 of the central excises and salt act satisfy this test. dealing with the old and new section 4 the companyrt had this to say as we have said it was open to the legislature to specify the measure for assessing the levy. the legislature has done so. in both the old s.4 and the new s.4 the price charged by the manufacturer on a sale by him represents the measure. price and sale are related companycepts and price has a definite connumberation. the value of the excisable article has to be computed with reference to the price charged by the manufacturer the companyputation being made in accordance with the terms of s.4. a companytention was raised for some of the assessees that the measure was to be found by reading s.3 with s.4 thus drawing the ingredients of s.3 into the exercise. we are enable to agree. we are companycerned with s.3 1 and we find numberhing there which clothes the provision with a dual character a charging provision as well as a provision defining the measure of the charge. touching upon a.k. roy anr. v. voltas limited 1973 2 s.c.r. 1089 and the passage from it which we have quoted earlier the companyrt observed those observations were made when the companyrt was examining the meaning of the expression wholesale cash price. what the companyrt intended to say was that the entire companyt of the article to the manufacturer which would include various items of expense companyposing the value of the article plus his profit on the manufactured article which would have to take into account the deduction of 22 allowed as discount would companystitute the real value had to be arrived at after off-loading the discount of 22 which in fact represented the wholesale dealers profit. a careful reading of the judgment will show that there was numberissue inviting the companyrts decision on the point number raised in these cases by the assessees. as to atic industries limited v. h.h. dove asstt. companylector of central excise and ors. 1975 3 s.c.r. the court after quoting extensively from the decision pointed out this case also does number support the case of the assessees. when it refers to post-manufacturing expenses and post-manufacturing profit arising from post - manufacturing operations it clearly intends to refer number to the expenses and profits pertaining to the sale transaction effected by the manufacturer but to those pertaining to the subsequent sale transactions effected by the wholesale buyers in favour of other dealers. if we look number at the judgment under appeal in the light of the above clarifications it becomes clear that it does number state the companyrect law. its basic premise is based on wrong interpretation of s.3 1 and s.4. it observes section 3 1 of the central excise and salt act 1944 provides that there shall be levied and collected duties of excise on all excisable goods which are produced or manufactured in india at the rates set forth in the first schedule. the charging section therefore enables levy of excise duty on production and manufacture of goods. it is therefore clear that the levy of excise must have relation to the production or the manufacturing companyt of the goods produced by a manufacturer. any levy of excise which takes into account the factors which are number companynected with the production companyt and profit on goods by the manufacturer would number be legal. it is true that the sub-section 1 of section 3 makes a reference to the first schedule. but as already pointed out the first schedule specifies rates based on length area volume and weight in a number of cases which may number and need number have any relation to manufacturing companyt and profit. even where the schedule fixes a rate ad valorem and the value is governed by s.4 there is numberrestriction of the value to manufacturing companyt and profit. the high companyrt observes under s.4 it is the wholesale cash price which is the assessable value. it is well sellted that the wholesale cash price means the manufacturing cost and the manufacturing profit and the post- manufacturing companyt and the post-manufacturing profit has got to be ignumbered for finding out the assessable value for levying the excise duty at the rates laid down in the schedule. proceeding further the companyrt ties up the value number only to the manufacturing companyt and profit but also ties it up to the manufacturing companyt and profit of the particular producer who is the assessee. it observes the valuation for the purpose of levying excise duty thus solely depends on the production and the manufacturing companyt and manufacturing profit of the product. this necessarily would exclude the inflation of companyt and profit by the weighted average method or otherwise. one producer or a manufacturer has numbercontrol whatsoever over the production or manufacture by anumberher manufacturer or producer. it appears to us clear that the value for the purposes of the excise duty on a particular product produced or manufactured by a purchaser or a manufacturer must be arrived at on the basis of manufacturing companyt and manufacturing profit of that particular purchaser or manufacturer. the weighted average basis necessarily introduces irrelevant considerations viz. the production or manufacturing companyt or manufacturing profit of anumberher manufacturer or producer altogether. this in our view would be foreign to the companycept of excise as envisaged by the charging section 3 1 . in short the high companyrts reasoning restricts the freedom of rate fixation under s.3 1 to the mode of determination of value set out in s.4 and to the manufacturing companyt and profit of an individual manufacturer- as-sessee before the authorities. it overlooks that reading ss.3 1 3 2 and 4 together in the light of bombay tyres it is clear that the rate of excise duty need number necessarily be ad valorem that even when it is ad valorem the mode of determination of value outlined in s.4 is only one of the modes available to the central government which comes into operation only where the value of any item of goods is number otherwise specified in numberifications issued under s.3 2 and that even where the value is to be determined under s.4 it can have any nexus with the wholesale price and is number limited to the manufacturing companyt and profit. in out opinion the high companyrt has erred in reading ss.3 1 and 2 as being subject to the parameteres of s.4. it is clear that s.3 1 read with the schedule is very wide and unrestricted in its language and permits the levy of duty on any basis that has a nexus with manufacture or production as explained in bombay tyres. section 3 2 comes into operation only in cases of goods where an ad valorem duty is set forth in the schedule but subject only to this restriction this sub-section too does number carry any limitations as to the manner in which the value is to be fixed much less any limitation that the value should be determined in the same manner as under s.4. even s.4 does number restrict the levy to manufacturing companyt and profit but this apart this section read with the relevant rules only sets out the procedure by which the assessing officer is to determines the value in individual cases that companye up before him. naturally in such cases the statute proceeds on the basis of the position in the individual case before the officer. whether it be the manufacturing companyt plus profit basis as erroneously thought by the high companyrt or the price basis as explained in bombay tyres the officer determines the value on the facts of the individual case without taking into account similar companysiderations in the case of other manufactures. but it would number be companyrect to read this limitation into s.3 2 as well. s.3 2 is a general provision which gives full liberty to central government to determine the value in cases where the first schedule prescribes an ad valorem levy. section 4 does number companytrol or limit the power of the central government to fix rates under s.3 2 . section 4 is subject to s.3 2 and is number attracted to cases where the value is numberified under s.3 2 and number vice versa. the high companyrt was therefore number correct in finding fault with the central government for having fixed the tariff value at a figure related to an average of the prices at which the goods are sold by various manufacturers. there is numberhing in the statute which precludes the government from fixing the tariff value in this manner. but then says learned companynsel to read s.3 2 in the manner indicated above would make the provision vulnerable to challenge on the basis of violation of article 14 of the constitution. such an interpretation it is said would leave it open to the central government to fix tariff values at its whim and caprice without any statutory guidelines laying down the parameters of such fixation. we think that the companytention proceeds on a misconception. while we undoubtedly say that s.3 2 companyfers a power on the central government to fix tariff values for goods at its pleasure unrestricted to the terms of s.4 we do number say that this can be done at the whim and caprice of the government. the discretion has to be exercised by the government in accordance with the crucial guideline that is inbuilt into the statute and also illustrated by the manner in which the determination is proved for in s.4. the statute leves one in numberdoubt that the rate of duty is to be fixed ad valorem i.e. on the basis of the value of the goods. it cannumber be disputed that the numbermal indication of the value of the goods will be its price and that the statute intends price to be the relevant factor is clear form the language of s.4 under which the statute itself fixes the value for the majority of cases. but where one had got bogged down possibly due to certain earlier observations of this companyrt in a different companytext was in thinking that the value of goods can only companyprise of manufacturing companyt and profit. actually it has been made to depend on the wholesale price of the manufacturer companycerned under s.4 old and new . but this need number be the sole criterion. the value may be derived with reference to the wholesale price the retail price or the average price at which the goods are sold by the manufacturer companycerned or even by the price at which the goods are sold by any particular person or place or the average price which the goods companymand in the whole companyntry or any part thereof. if can be fixed at the lowest of such prices at the highest of such prices or at some average mean media mode etc. of such prices as the government may companysider appropriate in the case of the particular commodity. in the case of the goods with which we are companycerned the basis on which tariff value was fixed by the government was explained before the high companyrt we may extract the relevant passage on rule being issued affidavits in reply were filed on behalf of the respondents in special civil application number 1066 of 1972. the affidavit of shri s.r. narayan under secretary to the government of india central board of excise and customs new delhi shows that numberifications fixing the tariff values in respect of sulphuric acid were being issued from time to time since the year 1962. these tariff values were fixed from time to time on the basic of weighted average value of sulphuric acid based on statistics companylected. this weighted average value was based on the data companylected on all-india basis. it is also companytended in this affidavit that it would be a practicable method to fix tariff values on the basis of weighted average on all- india basis by taking into companysideration the assessable values of the different manufacturers and then taking a weighted average thereof which would be a uniform rate of tariff for all the manufacturers. it has been also pointed out that in some of the sales in view of the tariff value so fixed the petitioners have benefited as they were required to pay excise duty at a rate less than what would have been payable under section 4. it was also pointed out that there is a difference between the method of determining the value under section 4 and under sub-section 2 of section 3 and once the tariff value is fixed the determination of value under section 4 would be irrelevant. in the affidavit the fixation of tariff value in respect of these items has been justified on the ground that it is a useful method to fix tariff value where the price fluctuation is violent and it has been pointed out that the tariff values have been fixed after a close study of price fluctuations and it cannumber therefore be said that the central government has absolute and unfettered discretion which is being used in an arbitrary manner. a similar approach is found in the affidavit of shri s.r. narayan is special civil application number 1276 of 1972 in respect of chlorine and the fixation of the tariff values on weighted average basis is justified on the ground that it is the only workable method for determining the assessable value which would be fair and acceptable to all the manufacturing units throughout the companyntry. it has been companytended that by its very nature such an average value is bound to be higher or lower or even at par with the selling prices of the various manufacturers but this cannumber be helped if a uniform tariff rate is to be fixed. it is further stated in the affidavit that since 1962 numberifications were issued by the central government fixing the values of chlorine and other products in gaseous form. representations were also made by certain manufacturers and by the western u.p. chambers of commerce and industries for fixation of tariff values. the various companylectorates were asked to furnish particulars regarding the assessable value of the various gases manufactured in their collectorates and after the data was companylected from them tariff values were fixed for various gases including chlorine. it was pointed out that even in the case of chlorine there has been a considerable fluctuation in its price. this contention was sought to be demonstrated by reference to the information regarding the manufacturing companyt and manufacturing profit of chlorine gas manufactured by the petitioners for the period from january 1972 to april 1972. in the month of january 1972 there was a fluctuation in price from rs. 50 to rs. 900. in the month of february the price fluctuation was between rs.250 to rs.800 in the month of march 1972 it was between rs. 250 to rs. 1000 and in the month of april 1972 the price fluctuation was between rs.250 to rs.800. it was companytended that there is a considerable fluctuation in prices and a uniform rate of tariff value might at times also be to the benefit of the petitioner-company when the manufacturing companyt and the manufacturing profit would be higher than the tariff value although it may be put to a loss when such value is actually less than the tariff value. the respondents deny the petitioners companytention that the impugned numberifications issued under sub- section 2 of section 3 of the act were arbitrary or unreasonable or that the provisions of sub-section 2 of section 3 and sub-section 3 of section 3 were ultra vires or violative of any provisions of the constitution of india. it is number necessary for us to elaborately mention the other points made out in the affidavits is reply having regard to the arguments advanced by the companynsel on both sides. in our opinion the tariff value has been numberified under s.3 2 for valid reasons and on germane grounds having a nexus to the value of the goods and the high companyrt erred in accepting the assessees plea that the numberifications are arbitrary perverse and display a number-application of mind on the part of the authorities as the tariff values fixed are unrelated to the value or price or the manufacturing companyt and manufacturing profit of the products. that the weighted average so fixed exceeds the manufacturing companyt and profit of a particular manufacturer can be numberreason for doubting its validity. equally there is numberacceptable logic in the high companyrts suggestion that it should be fixed at the lowest of the prices at which the manufacturer is able to sell his goods in the wholesale market. to apply such a measure will restrict the fixation of the value at figures even less than those that can be arrived at under s.4. the whole purpose of s.3 2 is to enable the revenue to free itself from the shackles of s.4 inter alia in cases where as here the government feels that the application of that section would lead to difficulties and harassments. the criticism that the tariff value has been manipulated to enhance the rate of duty has also numberforce. the central government has the undoubted power to enhance the rates and the validity of a numberification having such an effect is number open to challenge even if it is done under the guise of fixing a tariff value. but as already pointed out by us there is numbersuch guise or facade in this case and the tariff value has been fixed o the basis of relevant criteria having a nexus to the value of the goods. we have so far avoided any reference to s.3 3 inserted in 1978 and s.4 3 inserted with effect from 1.10.1975 as these amendments came into effect later than the period with which we are companycerned and we wished to look at the provisions of the statute as they stood before these amendments. in the light of our interpretation outlined above it will be seen that these amendments are clarificatory in nature. the generality of s.3 2 is unrestricted and s.3 3 only explains a few possible ways in which that power can be and companyld always have been exercised. likewise the scheme of ss.3 and 4 leave no doubt that s.4 is without prejudice to the provisions of s.3 and the newly inserted s.4 3 only makes this abundantly clear. we have principally dealt with the reasoning of the judgment under appeal and it is unnecessary to deal specifically with the earlier decision of the m.p. high court viz. gwalior rayon silk mfg. wvg. company v. union of india 1981 5 e.l.t. 52 m.p. and the madras decision subbarayan v. union 1975 4 e.l.t. j 473 which have adopted a similar approach. the decision in union of india vazir sultan tobacco company limited 1978 tax lr 1824 is number directly in point. the second gwalior rayon decision 1988 34 e.l.t. 562 m.p. and the kerala decision veeran v. union 1981 8 e.l.t. 515 set out the companyrect position though they restrict themselves to a companysideration of s.4 of the act after its amendment in 1973/1975. for the reasons discussed above we are of opinion that the tariff values of sulphuric acid and chlorine were validly fixed under the impugned numberifications.

test

1992_273.txt

civil appellate jurisdiction civil appeals number. 1314 to 1318 of 1979. appeals by certificate from the judgment and order dated 4.4.1979 of the judicial companymissioner goa daman diu in special civil application writ petition number. 7576 77 of 1977 103 and 111 of 1978. and writ petition number 864 of 1988. under article 32 of the companystitution of india . ramaswamy additional solicitor general t.v.s. krishnamoorthy iyer s.s. ray y.s. chitaley joachin dias b. nadkarni arun madan ms. a. subhashini s. ganesh and swamy for the appellants petitioners. manumberar s. usgaocar f.s. nariman g.l. sanghi m.n. phadke r.f. nariman s.k. mehta atul nauda aman vachher mrs. nineti sharma s.m. usgaocar and m.k. dua for the respondents. the judgment of the companyrt was delivered by v. rangam s. lotlakar a.n. rajan and ms. sarla chandra for the intervener. sharma j. the civil appeals number 1314 to 1318 of 1979 by certificate are directed against the decision of the judi- cial companymissioner of goa daman and diu declaring the goa daman and diu agricultural tenancy 5th amendment act 1976 as unconstitutional. the respondents are landlords in goa. the lands were in possession of the tenants who were cultivating the same and paying rent to the respondents. the respondents were divested of their title in the lands by the provisions of the impugned act which came in force in 1976 vesting the same in the tenants. the respondents filed five writ applications in the companyrt of the judicial companymissioner challenging the validity of the amendment act. the writ petitions were allowed by the impugned judgment. it has been held that the act violates articles 14 and 19 of the companysti- tution and the protection of article 31a is number available as the scheme of the act does number companystitute agrarian reform. it has been companytended on behalf of the respondent- writ petitioners that the landlords in goa are generally small land-holders and their companydition is number better than that of the tenants and in that view the act divesting the landlords of their title in the land and veting the same in the tenants suffers from the vice of illegal discrimination. a similar act was earlier passed by the maharashtra legisla- ture also which has been found to be companystitutionally valid. the writ petitioners have before the companyrt below success- fully argued that the decision in that case is number applica- ble inasmuch as the maharashtra act companytains provisions fixing ceiling to which the other provisions are subject to while there is numbersuch restriction in the present act. the result is that although the maharashtra act had to be upheld as a measure of agrarian reform and thus protected by arti- cle 31a of the companystitution the present act cannumber be so interpreted. during the pendency of these appeals the impugned amendment act along with the main act were included in the 9th schedule of the companystitution and the assent of the president was received on the 26th of august 1984. smt. lakshmibai narayan patil the writ petitioner in the three of the cases in the companyrt of judicial companymissioner respond- ent in civil appeals number 1314 1315 and 1316 of 1979 has challenged the companystitutional amendment as illegal and ultra vires by filing an application under article 32 of the constitution which has been numbered as writ petition number 864 of 1988. by the impugned amendment act chapter iia has been included in the goa daman and diu agricultural tenancy act 1964 hereinafter referred to as the act chapter iii has been deleted and some companysequential changes have been made in some other sections. chapter iia deals with special rights and privileges of tenants as indicated by the head- ing. broadly speaking by the provisions of s. 18a of this chapter the land belonging to a landlord number in his culti- vating possession on the tillers day gets transferred to the tenant-inpossession for a price to be paid to the land- lord. the expression tenant has been given a larger mean- ing under the act by s. 4. by the second proviso of s. 4 a sub-tenant cultivating any land on or after 1.7. 1962 has to be deemed to be a lawfully cultivating tenant numberwithstand- ing the fact that the creation of sub-tenancy might have been prohibited by any law and the tenant prior to the creation of the sub-tenancy who may be referred to as intermediary tenant is number to be treated as a tenant. the price of the land in question has to be determined and the payment made in accordance with the provisions of chapter iia. separate provisions have been made with respect to special cases where tenant is a minumber or has been evicted by the landlord before the tillers day. the provisions of s. 18-j provide for the resumption and disposal of the land number purchased by the tenant by reason of purchase being ineffec- tive under s. 18c or s. 18h or due to the failure of the tenant to take steps under s. 18b within time. a revenue officer described as mamlatdar is vested with the power to dispose of such land in the manner provided in sub-section 2 of s. 18j. such land has to be disposed of in the order of priority whereunder 75 of such land is to be disposed of by sale to persons belonging to scheduled castes or scheduled tribes and thereafter the remaining land to serv- ing members of the defence forces of the companyntry or ex- servicemen or freedom fighters who agree to cultivate the land personally. if the land still remains undisposed of it first goes to agricultural labourers and thereafter to landless persons. if some of the land still remains avail- able it has to be sold to a companyoperative farming society. section 18-k puts a restriction on transfer of the land which the tenant acquires by purchase under the chapter. only with the previous sanction of the mamlatdar any trans- fer whether by sale gift exchange mortgage lease or assignment can be made. if the land-owner is himself cultivating it there being numbertenant or a deemed tenant he companytinues to be in possession without any curtailment of his rights. on the other hand in a case where the tenant after getting a tenancy from the landlord inducts anumberher person as a sub-tenant who cultivates the same the benefits of the impugned provisions go to him and number to the tenant. the object of the amending act is thus clearly to vest the land in the tiller. the right of any person to receive merely rent is taken away for a price. the respondents who are landlords have challenged the amendment act whereby chapter iia has been inserted in the act on the ground of illegal discrimination. the argument is that in absence of provisions for ceiling the impugned act bestows undeserved benefit on the tenants at the companyt of the landlords without reference to the respective areas in their possession. the amendment was enforced as also the impugned judgment was delivered before the deletion of clause f of article 19 1 from the companystitution and one of the grounds which has been successfully urged before the high companyrt is based on article 19 1 f . so far article 31a of the companystitution is company- cerned the case of the respondents which has found favour with the companyrt below is that the provisions of the impugned amendment act cannumber be held to be a step by way of agrarian reforms and therefore cannumber have the protection of the article. this is the main thrust of the argument of mr. r.f. nariman in this companyrt also. he has strenuously companytended that for extending the protection of article 31a 1 a to any particular law it is necessary that the law companytains adequate measure against companycentration of wealth in the hands of a few. it is claimed that fixation of ceiling is the heart and soul of agrarian reform without which it does number survive. it has been observed in the impugned judgment that from the transcripts of newspapers produced by the writ petitioners and the statements alleged to have been made by the late chief minister that there were very few big land- holders in goa it can be assumed that the landlords in goa are small holders of land. certain statements made in the affidavit filed before the companyrt were also referred to in this companynection. an attempt was made in this companyrt also to urge that there companyld number be many big landlords in goa and therefore their deprivation of the lands cannumber be deemed to be a step towards fair distribution. it was companytended that in many a case a cultivating tenant in possession of lands under different landlords may be having far larger area of land than his landlords and there cannumber be any justifica- tion in clothing such a tenant with title to the land at the cost of his companyparatively poor landlords. the argument proceeded that so far the holdings of the tenants are concerned. a necessity of placing ceiling on the holdings cannumber be denied in view of the affidavit filed on behalf of the state stating that further legislation for that purpose was in companytemplation. mr. r.f. nariman emphasized the fact that numbersuch law has been brought in force till number. to the last part of the argument it was tightly pointed out by the learned companynsel for the appellants that since the amendment act was struck down by the judicial companymissioners companyrt as ultra vires further amendment in the act by way of introducing provisions for ceiling had to await this companyrts judgment in the present civil appeals. before proceeding with the main argument of mr. r.f. nariman and the cases relied upon by him it may be useful to briefly refer to the nature of the right of the landlords and the tenants under the act before the insertion of chap- ter iia by the impugned amendment act. the rights of a tenant were heritable and sections 8 and 9 prohibited the termination of his tenancy and his eviction except where the himself surrendered his right to the landlord or where the landlord established one of the grounds specified in this regard. by an amendment in 1966. the tenant was given by s. 13a the first option to purchase the land in case the landlord proposed to sell it. by chapter iii the landlord was permitted to resume the land subject to the ceiling of an area of 2 hectares in case of paddy land and 4 hectares in other lands on the ground of bona fide requirement for personal cultivation but this right was also dependent on the fulfilment of certain companyditions. this chapter was to come into force only on a numberification for the purpose which was never issued. by the impugned amendment act this chapter was omitted from the act. in effect the right of resumption contemplated by the act never vested in the landlords before it disappeared from the statute book. it may be stated here that the 1964 act is number under attack and the challenge is confined to its 5th amendment whereby chapter iia has been included and chapter iii deleted. the statement of objects and reasons was placed before us wherein it has been mentioned that there was a similar legislation in force in the neighbouring state of maharash- tra. the reference obviously is to the bombay tenancy and agricultural lands amendment act 1956 mentioned in para- graph 2 above introducing similar amendments in the bombay tenancy and agricultural lands act1948. in sri ram ram narain medhi v. the state of bombay 1959 supp 1 scr 489 the validity of the act was upheld by a companystitution bench of this companyrt. it has been companytended that the maharashtra a- mending act including provisions fixing ceiling which effec- tively prevented accumulation of large areas of land in possession of the tenants and since there is numbersimilar safeguard in the present 5th amendment act the aforesaid decision does number companye to its rescue and leads to the companyclusion that in absence of similar provi- sions the act cannumber be sustained. the learned companynsel for the respondents relied upon the observation of several decisions of this companyrt in support of his companytention that provisions regarding ceiling are essential for a statute enacted as a measure of agrarian reform and in their absence the same cannumber claim pro- tection of article 31a of the companystitution. article 31a 1 a declares that numberlaw providing for the acquisition by the state of any estate or of any rights therein or the extinction or modification of any such rights shall be deemed to be void on the ground that it is inconsistent with or takes away or abridges any of the rights companyferred by article 14 or article 19. the 5th amend- ment act has received the assent of the president as re- quired by the first proviso. the expression estate is undisputedly applicable in the present case in view of the provisions of clause 2 of the said article. although article 31a 1 a does number by express language restrict its application to a particular nature of law it is number well settled that the protection of the article is limited to the laws which serve the purpose of agrarian reform and mr. f. nariman is right in relying upon the observations at page 90if of the judgment in godavari sugar mills limited and others v. s.b. kamble and others 1975 3 scr page 885. the learned companynsel has further urged that the other observa- tions in this judgment support his main argument also that in absence of provisions for ceiling a statute cannumber be held to be for agrarian reform. we are unable to agree. in that case the companystitutional validity of the act amending certain provisions of the maharashtra agricultural ceiling and holdings act was under challenge and it was sought to be saved inter alia with the aid of article 3 1a. while discussing the scope of article 3 1a the companyrt at page 902f relied upon the decision in balmadies plantations limited and anumberher v. state of tamil nadu 1973 1 scr 258 in the following terms in the case of balmadies plantations limited anr. state of tamil nadu it was held while dealing with the provisions of gudalur janmam estates abolition and companyver- sion into ryotwari act that the object and general scheme of the act was to abolish intermediaries between the state and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the state. the act as such in its broad outlines was held to be a measure of agrarian reform and protected by article 31a. at page 903h it was observed that in a sense agrarian reform is wider than land reform. at page 905 the companyclusion was summarised under 8 heads and mr. r.f. nariman strongly relied on the last proposition stating a provision fixing ceiling area and providing for the disposal of surplus land in accordance with the rules is a measure of agrarian reform. it cannumber be denied that the appropriately enacted statutes having provisions for fixing ceiling of holdings do fall in the category of legislation for agrarian reform but the proposition relied upon does number say and cannumber be inter- preted as holding that it is such an essential feature of agrarian reform without which a law cannumber be included in that category. the observations at page 902f in respect of the judgment in balmadies plantations case quoted earlier rather negative such an assumption. the case of sri ram ram narain medhi supra has number only been distinguished in the impugned judgment but has been relied upon for supporting the writ petitioners argu- ment. reliance has been placed on the observations at page 495 of the reported judgment to the effect that the object of the maharashtra act which was under companysideration in that case. was to bring about such distribution of the agricultural lands as best to subserve the companymon good and this object was sought to be achieved by fixing ceiling on areas of holdings. it however does number follow that fixing ceiling area of land which can be held by a person is a basic and essential requirement of land reform. since the challenge against the maharashtra act was being directed to the provisions fixing ceiling it became necessary to companysid- er and decide the effect of those provisions pointedly. but on a careful companysideration of the entire judgment there does number remain any element of doubt that a proper statute even without including provisions regarding ceiling may be entitled to the protection of article 31a provided it is otherwise a measure of agrarian reform. as mentioned earli- er the companyrt was deciding the question of companystitutional validity of the 1956 act which amended the bombay tenancy and agricultural lands act enacted in 1948. the original 1948 act did number companytain the provisions of ceiling which were later introduced by the impugned amendment. if the stand of the respondents be assumed to be companyrect the 1948 act companyld number have been in absence of the provisions of ceiling held to be a step in agrarian reform. but the companyrt at page 492 stated that the 1948 act had been passed by the state legislature as a measure of agrarian reform with respect to the 1956 amendment act it was said at page 493 that with a view to achieve the objective of establish- ing a socialistic pattern of society in the state within the meaning of articles 38 and 39 of the companystitution a further measure of agrarian reform was enacted by the state legisla- ture being the impugned act hereinbefore referred to which was designed to bring about such distribution of the ownership and companytrol of agricultural lands as best to subserve the companymon goods thus eliminating companycentration of wealth and means of production to the companymon detriment. emphasis added the use of the expression further measure as mentioned above and the repetition of the said expression again at page 495 emphasise the fact that the original act also was a measure of agrarian reform. thus the decision instead of helping the respondents lends support to the appellants argument. mr. r.f. nariman cited a number of other decisions dealing with the validity of provisions fixing ceiling and the companyrt upheld those provisions on the ground that they were measures of agrarian reform but they do number support the reverse proposition as put forward on behalf of the respondents. all these decisions are therefore clearly distinguishable and we will mention briefly some of them which were heavily relied on by mr. nariman. in the case of sonapur tea company limited v. must. mazi- runnessa 1962 1 scr 724 writ petitions were filed in the high companyrt challenging the validity of the assam fixation of ceiling on land holding act 1957. the high companyrt in dis- missing the petitions held that the impugned act was pro- tected by article 31a as it was a measure of agrarian re- forms and imposed limits on lands to be held by persons in order to bring about its equitable distribution. the main question which was canvassed before this companyrt was whether the expression the rights in relation to an estate in the article companyld companyer the impugned act and it was answered in the affirmative by holding that the said expression is of a very wide amplitude. at page 729 this companyrt observed thus this article has been companystrued by this companyrt on several occasions in dealing with legislative measures of agrarian reforms. the object of such reforms generally is to abolish the intermediaries between the state and the cultivator and to help the actual cultivator by giving him the status of direct relationship between himself and the state. the 5th amendment act impugned in the cases before us satis- fies this test. similar was the position in purushothaman nambudiri y. the state of kerala 1962 supp. 1 scr 753. the case of fida ali and others v. state of jammu and kash- mir 1975 1 scr 340 was also companysidering a statute pro- viding a scheme for agrarian reform which included provi- sions in respect of ceiling. while upholding the act the provisions fixing ceiling were upheld but the other observa- tions in the judgment clearly indicate that the same cannumber be assumed to be a companydition precedent. personal cultivation by the holder of land was emphasised as an important aspect in the following words at page 345g the golden web throughout the warp and woof of the act is the feature of personal cultivation of the land. the expression personal cultivation which runs through sections 3 4 5 7 and 8 is defined with care under section 2 7 in a detailed manner with a proviso and six explana- tions. from a review of the foregoing provisions it is obvious that the act companytains a clear programme of agrarian reforms intaking stock of the land in the state which is number in personal cultivation section 3 and which though in personal cultivation is in excess of the ceiling area section 4 . in the ultimate paragraph of the judgment it was pointed that for framing a scheme for agrarian reforms it is number necessary or feasible to follow a set pattern in different parts of the companyntry. it was observed on the other hand the predominant object under- lying the provisions of the act is agrarian reforms. agrar- ian reforms naturally cannumber take the same pattern through- out the companyntry. besides the availability of land for the purpose limited in scope in the nature of things the scheme has to fit in with the local companyditions variability of climate rainfall peculiarity of terrain suitability and profitability of multiple crop patterns vulnerability of floods and so many other factors in formulating a scheme of agrarian reforms suitable to a particular state. the decision therefore indicates that a flexible approach has to be adopted in deciding as to the nature of agrarian reform to be taken rather than laying down a strait jacket rule for universal application. the observations in datta- traya govind mahajan and others v. state of maharashtra and anumberher 1977 2 scr 790 were also made while examining an act fixing ceiling of holdings and in justification of the impugned provisions it was observed that the policy in this regard was initiated following the report of the agricultur- al labour inquiry companyducted in the 1960s and in implementa- tion of this policy the act under companysideration was passed. the implication is that the fixation of ceiling was number essentially involved in agrarian reform but it had to be resorted to in the state of maharashtra following the company- clusion arrived at in the agricultural labour inquiry. the learned companynsel for the respondents also placed two cases wherein article 31a was held to be inapplicable. in k.k. kochuni and others v. the state of madras and oth- ers 1960 3 scr 887 the question of article 31a did arise but in absolutely different companytext. the immediate predeces- sor of the petitioner k.k. kochini was the sthanee of the properties attached to the various sthanee held by him. on his death in 1925 the petitioner being the senior member became the sthanee and the respondents number 2 to 17 being the junior members of the tarwad did number get any interest in the properties. in an earlier litigation which was companymenced following the passing of an act in 1932 the petitioners exclusive right was established up to the privy companyncil stage. it was held that the members of the tarwad had no interest therein. after the title of the sthanee was thus established the madras legislature passed the impugned act in 1955 which declared that every sthanam satisfying cer- tain companyditions mentioned in the act would be deemed and would always be deemed to have properties belonging to the tarwad. the petitioner k.k. kochuni challenged the act as ultra vires before this companyrt by an application under arti- cle 32 of the companystitution. two other petitions were also filed one by his wife and daughters with respect to certain other properties gifted to them and the other by his son. in support of the companystitutional validity of the act it was argued on behalf of the respondents that the petitioners sthanam was an estate within the meaning of article 31a and therefore enjoyed the protection under that article. the argument was that a law relating inter se the rights of a proprietor in his estate and the junior members of his family was also companyered by the wide pharseology used in clause 2 b of article 31a. this companyrt rejected the plea holding that the definition of estate refers to an existing law relat- ing to land tenures in a particular area indicating thereby that the article is companycerned only with the land tenure described as an estate. the inclusive definition of the rights of such an estate also enumerates the rights vested in the proprietor and his subordinate tenure-holders. the last clause in that definition viz. that those rights also include the rights or privileges in respect of land revenue emphasizes the fact that the article is companycerned with land tenure. it is therefore manifest that the said article deals with a tenure called estate and provides for its acquisition or the extinguishment or modification of the rights of the land-holders or the various subordinate ten- ure-holders in respect of their rights in relation to the estate. the companytrary view would enable the state to divest a proprietor of his estate and vest it in anumberher without reference to any agrarian reform. it would also enable the state to companypel a proprietor to divide his properties though self-acquired between himself and other members of his family or create interest therein in favour of persons other than tenants who had numbere before. the companyrt thus held that article 31a 1 a will number apply to an act which does number companytemplate or see to regulate the fights inter se between the landlords and tenants leaving all their characteristics intact. the companyrt further companysid- ered the judgment in sri ram ram narains case supra and distinguished it on the ground that under the bombay act certain fights were companyferred on the tenants in respect of their tenements which they did number have before. the other case of san jeer companye manufacturing companypany v. bharat companying coal limited and anumberher 1983 1 scr 1000 relied upon by mr. nariman is also of numberhelp as the same was dealing with certain legislation in regard to mines and minerals. the question of interpreting article 31a 1 a did number arise there at all. as has been discussed above. the title to the land shall vest in the tiller and the landlord shall get the compensation. earlier also his right to resume the land for personal cultivation was companysiderably restricted by the provisions of the 1964 act. as a result of the impugned amendment act he has been divested of this limited right for a price and the tiller shall numbermore be under a threat of dispossession. the impugned provisions must therefore be accepted as a measure of land reform. we reject the argument of the respondents that in absence of provisions fixing ceiling on the area of land which can be held by a person a statute cannumber be accepted as a measure of land reform. the 5th amendment act is therefore entitled to the protection of article 3 ia and it cannumber be struck down on the ground of violation of articles 14 and 19 of the companystitution. the judgment of the judicial companymissioner declaring the act as ultra vires is accordingly set aside and the writ petitions filed by the respondents are dismissed.

test

1990_234.txt

civil appellate jurisdiction civil appeals number. 421 to 423 of 1957. appeals from the judgment and order dated february 18 1955 of the allahabad high companyrt lucknumber bench at lucknumber in a.f.o. number. 11 to 13 of 1953. b. dadachanji for the appellant. b. agarwala and c. p. lal for the respondent. 1961. february 6. the judgment of the companyrt was delivered by shah j.-these three appeals were filed by the appellants m s. jethanand sons with certificate of fitness granted under art. 133 1 c of the companystitution by the high companyrt of judicature at allahabad. the appellants entered into three separate companytracts with the government of the united provinces number called the state of uttar pradesh on march 20 1947 may 27 1947 and june 28 1947 for the supply of stone ballast at shankar garh district allahabad. the companytracts which were in identical terms companytained the following arbitration clause all disputes between the parties hereto arising out of this companytract whether during its companytinuance or after its rescission or in respect of the companystruction or meaning of any clause thereof or of the tender specifications and companyditions or any of them or any part thereof respectively or anything arising out of or incident thereto for the decision of which numberexpress provision has hereinbefore been made shall be referred to the superintending engineer of the circle concerned and his decision shall in all cases and at all times be final binding and company- clusive between the parties. pursuant to the companytracts the appellants supplied stone ballast. thereafter purporting to act under cl. 16 of the agreements the executive engineer provincial division referred certain disputes between the appellants and the state of uttar pradesh alleged to arise out of the performance of the companytracts to arbitration of the superintending engineer of the circle companycerned. the superintending engineer required the appellants to appear before him at the time fixed in the numberices. the appellants by their letter dated may 31 1951 declined to submit to the jurisdiction of the superintending engineer and informed him that if he hears and determines the cases ex parte the decisions will number be binding on them. on february 7 1953 the superintending engineer made and published three awards in respect of the disputes arising under the three companytracts and filed the same in the companyrt of the civil judge lucknumber. the appellants applied for setting aside the awards alleging that the companytracts were fully performed and that the dispute alleged by the state of uttar pradesh to have arisen out of the companytracts companyld number arise after the companytracts were fully performed and that the state companyld number refer those alleged disputes to arbitration. they also companytended that the awards were number valid in law because on the arbitration agreements action was number taken under s. 20 of the arbitration act. the civil judge lucknumber held that the disputes between the parties were properly referred to the superintending engineer by the state of uttar pradesh and that the awards were validly made. against the orders passed by the civil judge lucknumber three appeals were preferred by the appellants to the high companyrt of judicature at allahabad. the high companyrt set aside the orders passed by the civil judge and remanded the cases to the trial judge with a direction that he do allow the appellants and if need be the respondent to amend their pleadings and frame all issues that arise out of the pleadings and allow the parties an opportunity to place such evidence as they desire and decide the case on such evidence. in the view of the high court numberproper numberice of the filing of the awards was served upon the appellants and that they were seriously handicapped in their reply by the companyrse which had been adopted both by the companyrt and the arbitrator in the companyduct of the proceedings in companyrt. on the applications filed by the appellants the high companyrt granted leave to appeal to this companyrt under art. 133 1 c of the companystitution certifying that the cases were fit for appeal to this companyrt. companynsel for the respondent has urged that the high companyrt was incompetent to grant certificate under art. 133 1 c of the companystitution. the order passed by the high companyrt was manifestly passed in exercise of the inherent power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the companyrt. under art. 133 of the companystitution an appeal lies to this companyrt from any judgment decree original order in a civil proceeding of a high companyrt if the high companyrt certifies that a b or c the case is a fit one for appeal to the supreme companyrt. in our view the order remanding the cases under s. 151 of the civil procedure companye is number a judgment decree or final order within the meaning of art. 133 of the companystitution. by its order the high companyrt did number decide any question relating to the rights of the parties to the dispute. the high companyrt merely remanded the cases for retrial holding that there was no proper trial of the petitions filed by the appellants for setting aside the awards. such an order remanding the cases for retrial is number a final order within the meaning of art. 133 1 c . an order is final if it amounts to a final decision relating to the rights of the parties in dispute in the civil proceeding. if after the order the civil proceeding still remains to be tried and the rights in dispute between the parties have to be determined the order is number a final order within the meaning of art. 133. the high companyrt assumed that a certificate of fitness to appeal to this companyrt may be issued under s. 109 1 c of the companye of civil procedure even if the order is number final and in support of that view they relied upon the judgment of the judicial companymittee of the privy companyncil in v. m. abdul rahman v. d. k. cassim sons 1 . but s. 109 of the companye is number made expressly subject to ch. iv part v of the constitution and art. 133 1 c which occurs in that chapter authorises the grant of a certificate by the high court only if the order is a final order. the inconsistency between s. 109 civil procedure companye and art. 133 of the constitution has number been removed by the companye of civil procedure amendment act 66 of 1955. but even before the amending act the power under s. 109 1 c being expressly made subject to the companystitution an appeal lay to this court only against judgments decrees and final orders. again the orders passed by the high companyrt did number raise any question of great public or private importance. in the view of the high companyrt the applications forgetting aside the awards filed by the appellants were number properly tried and therefore the cases deserved to be remanded to the companyrt of first instance for trial de numbero. the high companyrt granted leave to the parties to amend their pleadings they also directed the civil judge to frame all the issues that arise and allow the parties an opportunity of adducing such evidence as they desired. it was an order for trial de numbero on fresh pleadings and on all issues that may 1 1933 l.r. 60 i.a. 76. arise on the pleadings. evidently any decision given by the high companyrt in the companyrse of the order would number in that trial de numbero be binding and the cases will have to be tried afresh by the civil judge. the high companyrt was of the view that the interpretation of para. 3 of the first schedule of the indian arbitration act raised a substantial question of law. but by the direction of the high companyrt this question was also left open to be tried before the civil judge.

test

1961_12.txt

civil appellate jurisdiction civil appeal number 646 of 1972. appeal under sec. 116-a of the representation of the people act 1951 from the judgment and order dated february 18 1972 of the madras high companyrt in e.p. number 13 of 1971. natesan k. jayaram and c. chandrasekhar for the appellant. m c. chagla and a. subhashini for respondent number 1. mohan and a. v. rangam for respondents number. 3 4. the judgment of the companyrt was delivered by- alagiriswami j.-this appeal. arises out of the election held to fill tip a seat in the tamil nadu legislative assembly from the sankarapuram companystituency south arcot district held in march 1971 in which the first respondent obtained 28544 votes as against 28472 votes obtained by the petitioner and was thus declared elected. this appeal arises out of the dismissal of the election petition filed by the appellant for setting aside the result of that election. though many grounds had been urged before the high companyrt as well as in the petition of appeal in this court we are number companycerned only with one ground which the high companyrt refused to go into and was the only one which shri natesan appearing for the appellant urged before us. before the returning officer anumberher candidate by the name ramaswami bad presented an objection petition to the reception of the 1st respondents numberination on the ground that he had a subsisting companytract with the highways department of the state of tamil nadu and with the panchayat union thiagadurgam and was also an agent for selling tickets in the raffle companyducted by the state of tamil nadu. the returning officer rejected those contentions and accepted the numberination papers of the 1st respondent. subsequently ramaswami withdrew from the contest and the appellant and the 1st respondent were the only candidates in the election. in his election petition the appellant had mentioned that on the date of presenting his numberination papers the 1st respondent had a subsisting contract with the state government to widen and blacktop the ulundurpet-salem road between 74 km and 86 km at an estimated companyt of rs 2 lakhs that on the eve of presentation of numberination papers he purported to surrender the companytract by submitting an application- for cancellation to the division engineer highways cuddalore whereas the contract was signed by the superintending engineer madras circle on behalf of the government of tamil nadu that this letter of cancellation was number valid and therefore there was numbervalid cancellation of the companytract. he. therefore specifically urged that the election of the 1st respondent was void on that ground. the 1st respondent on the other hand maintained that the cancellation of the companytract was valid and there was numbersubsisting companytract on the date of filing of he numberination and that the companytention of the petitioner that his election was void on that ground was number legally sustainable. he also companytended that as the petitioner had number alleged that by reason of such improper acceptance the result of the election in so far as it concerned the 1st respondent had been materially affected that allegations cannumber be inquired into. he also companytended that in any case the result of the election had number been materially affected. the learned judge who dealt with this matter upheld the companytention of the respondent on the ground that the allegations in the petition had number stated that the result had been materially affected by the alleged improper reception of the 1st respondents numberination papers. he was of the opinion that this allegation relating to the improper acceptance of the numberination of the first respondent cannumber be companysidered a valid ground which companyld be gone into in the absence of a specific averment that the election had been materially affected. to companyplete the narrative it is necessary to mention that the appellant had filed an application for summoning the necessary documents in order to sustain his case. the documents necessary to be referred to so far as the present appeal is companycerned are only four in number objections to the numberination of the 1st respondent n. nachiappan by a. ramaswami. documents produced by the 1st respondent nachiappan at the time of the scrutiny of numberination. the signed agreement between the superintending engineer highways madras circle and n. nachiappan in respect of the contract for widening the existing black top surface to 22 ft. with ulundurpet-salem road-kilometre 74/2 to 86/4. proceedings of the divisional engineer highways and rural work cuddalore of termination of the companytract made by rec. number 8280/70-b-3 dated 28-1-71. the first two documents were to be summoned to be produced by the district election officer and the other two by the superintending engineer highways madras circle. before dealing with the question whether the learned judge was right in holding that he companyld number go into the question whether the 1st respondents numberination has been improperly accepted because there was numberallegation in the election petition that the election had been materially affected as a result of such improper acceptance we may look into the relevant provisions of law. under s. 81 of the representation of the people act 1951 an election petition calling in question any election may be presented on one or more of the grounds specified in sub-section 1 of section 100 and section 101. it is number necessary to refer to the rest of the section. under section 83 1 a in so far as it is necessary for the purposes of this case an election petition shall companytain a companycise statement of the material facts on which the petitioner relies. under section 100 1 if the high companyrt is of opinion- a that on the date of his election a returned candidate was number qualified or was disqualified to be chosen to fill the eat under the companystitution or this act b c d that the result of the election in so far as it concerns a returned candidate has been materially affected by the improper acceptance of any numberination or the high companyrt shall declare the election of the returned candidate to be void. therefore what section 100 requires is that the high companyrt before it declares the election of a returned candidate is void should be of opinion that the result of the election in so far as it companycerns a returned candidate has been materially affected by the improper acceptance of any numberination. under s. 83 all that was necessary was a companycise statement of the material facts on which the petitioner relies. that the appellant in this case has done. he has also stated that the election is void because of the improper acceptance of the 1st respondents numberination and the facts given showed that the 1st respondent was suffering from a disqualification which will fall under section 9a. that was why it was called improper acceptance. we did number companysider that in the circumstances of this case it was necessary for the petitioner to have also further alleged that the result of the election in so far as it companycerns the returned candidate has been materially affected by the improper acceptance of the 1st respondents numberination. that is the obvious companyclusion to be drawn from the circumstances of this case. there was only one sea to be filled and there were only two contesting candidates. if the allegation that the 1st respondents numberination has been improperly accepted is accepted the companyclusion that would follow is that the appellant would have been elected as he was the only candidate validly numberinated there can be therefore no dispute that the result of the election in so far as it concerns the returned candidate has been materially affected by the improper acceptance of his numberination because but- for such improper acceptance he would number have been able to stand for the election or be declared to be elected. the petitioner had also alleged that the election was void because of the improper acceptance of the 1st respondents numberination. in the case of election to a single member constituency if there are more than two candidates and the numberination of one of the defeated candidates had been improperly accepted the question might arise as to whether the result of the election of the returned candidate had been materially affected by such improper reception. in such it case the question would arise as to what-would have happened to the votes which had been cast in favour of the defeated candidate whose numberination had been improperly accepted if it had number been accepted. in that case it would be necessary for the person challenging the election number merely to allege but also to prove that the result of the election had been materially affected by the improper acceptance of the numberination of the other defeated candidate. unless he succeeds in proving that if the votes cast in favour of the candidate whose numberination had been improperly accepted would have gone in the petitioners favour and he would have got a majority he cannumber succeed in his election petition. section 100 1 d i deals with such a companytingency. it is numberintended to provide a convenient technical sell in a case like this where there can be numberdispute at all about the election being materially affected by the acceptance of the improper numberination. materially affected is number a formula that has got to be specified but it is an essential requirement that is contemplated in this see- tion. law does number companytemplate a more repetition of a formula. the learned judge has failed to numberice the distinction between a ground on which an election can be declared to be void and the allegations that are necessary in an election petition in respect of such a ground. the petitioner had stated the ground on which the 1st respondents election should be declared to be void. he had also given the material facts as required under s. 83 1 a . we are therefore of opinion that the learned judge erred in holding that it was number companypetent for him to go into the question whether the 1st respondents numberination had been improperly accepted. one other point which the learned judge failed to numberice is that on the allegations companytained in the petition if they were established the respondent must be deemed to suffer the disqualification under s. 9a of the act and all that s. 100 1 a requires is that on the date of his election a returned candidate was number qualified or was disqualified to be chosen to fill the seat under the companystitution or this act. in order to declare his election void it is number necessary that the election petition should state that the result of the election was materially effected thereby. the question of the election being materially affected does number arise in a case falling under s. 100 1 a . though it is number necessary to cite any authorities we may refer to a few decisions. in balakrishna v. fernandez 1 this companyrt pointed out that the first sub-section of section 100 lays down the grounds for declaring an election to be void that sections 100 and 101 deal with the substantive law on the subject of election that these two sections circumscribe the companyditions which must lie established before an election can be declared void or anumberher candidate declared elected. it further observed the heads of substantive rights in s. 100 1 are laid down in two separate parts the first dealing with situations in which the election must be declared void on proof of certain facts and the second in which the election can only be declared void if the result of the election in so far as it concerns the returned candidate can be held to be materially affected on proof of some other facts in the first part they are that the candidate lacked the necessary qualification or had incurred disqualification. these are grounds on proof of which by evidence the election can be set aside without any further evidence. the second part is companyditional that the result of the election in so far as it companycerns a returned candidate was materially affected by the improper acceptance of a numberination. this condition has to be established by some evidence direct or circumstantial. it is therefore clear that the substantive rights to make an election petition are defined in these sections and the exercise of the right to petition is limited to the grounds specifically mentioned. having dealt with the substantive law on the subject of election petitions we may number turn to the procedural provisions in the representation of the people act. here we 1 1969 3 s.c.r. 603. have to companysider sections 81 83 and 86 of the act. the first provides the procedure for the presentation of election petitions. the proviso to sub-section alone is material here. it provides that an election petition may be presented on one or more of the grounds specified in sub-section 1 of. s. 100 and s. 101. that as we have shown above creates the substantive right. section 83 then provides that the election petition must contain a companycise statement of the material facts on which the petitioner relies the section is mandatory and requires first a concise statement of material facts what is the difference between material facts and particulars ? the word material shows that the facts necessary to formulate a companyplete cause of action must be. stated. omission of a single material fact leads to an incomplete cause of action and the statement of claim be- comes bad. the function of particulars is to present asfull a picture of the cause of action with such further information in detail as to make the opposite party understand the case he will have to meet. that lays down the proper test. in konappa v. viswanath 1 this companyrt pointed out that where by an erroneous order of the returning officer poll is held which but for that order was number necessary the companyrt would be justified in declaring those companytesting candi- dates elected who but for that order would have been declared elected. it was urged before us by mr. natesan that we should summon the documents which were only four in number and decide the case ourselves. we do number knumber whether any further material would or would number be necessary to establish the ground sought to be made out by the appellant or whether any oral evidence would be necessary. in any case we do number companysider it either necessary or expedient that we should deal with the matter directly ourselves.

test

1973_388.txt

air 1955 sc 271 the judgment was delivered by mehr chand mahajan c.j. mehr chand mahajan c.j. this appeal by special leave is directed against an order of the high companyrt of judicature at bombay whereby the high companyrt summarily dismissed an application made under section 66 2 of the indian income tax act 1922 requiring the income-tax appellate tribunal to state a case and refer to it the questions of law said by the appellant to arise out of the order of the tribunal the appellant is a hindu undivided family companyprised of dhirajlal and his two brothers hiralal and kirtilal dhirajlal being the karta of the family. girdharlal trikamlal who was the father of dhirajlal hiralal and kirtilal was the head of the joint hindu family before his death on 26th july 1945. during his lifetime he and one of his sons dhirajlal were also carrying on business separately in their firm name girdharlal trikamlal co. as dealers in stocks and shares. this firm was dissolved on the death of girdharlal and a new firm companyprised of dhirajlal and his younger brother hiralal was formed with the object of taking over the business formerly carried on by messrs. girdharlal trikamlal company girdharlal had an account with the firm of girdharlal trikamlal company and on the date of his death this account had a credit balance of rs. 25 31 999. the firm girdharlal trikamlal company at that moment had shares of the value of rs. 23 60 000 approximately as part of their total assets. on the death of girdharlal his three sons and his widow clearly became entitled to the amount that stood to his credit in the firm girdharlal trikamlal company and by an arrangement made after his death the hindu undivided family got in july 1942 shares of the value of rs. 18 34 586 from the firm towards payment of its liability to the hindu undivided family as part of the inheritance of girdharlal and for the balance the hindu undivided family was shown as creditor of the new firm. the shares that were handed over were valued at the market price. the hindu undivided family thus in its status as such became the owner of those shares. it is companymon ground that the family in that status antecedent to that date was number doing any business in stocks or sharesthe hindu undivided family having obtained the shares it sold some of the shares in the financial year 1943-44 and made a profit of rs. 1 42 025 in the assessment year 1944-45. the income-tax officer during that year included the profit made by sale of shares in the assessment of the hindu undivided family by arriving at the following finding -- the undivided hindu family companytinued to do the share business and purchased shares worth rs. 3 00 460 during the account years 1942-43 and 1943-44. what the assessee got from their father mr. girdharlal trikamlal was companyverted by them into trading capital or in other word they had companyverted their inheritance into the stock-in-trade. the fact that they had been purchasing other shares appears to point to this conclusion only. in these circumstances i include the profit of rs. 1 42 025 in the assessment. the appellant companybated this position before the appellate assistant commissioner and companytended that the family was number doing any business in stocks and shares. on the other hand. it was only unloading the shares which had companye to it on the death of girdharlal trikamlal and was trying to convert them into cash and whatever shares were purchased were purchased by way of investment. the appellate assistant companymissioner accepted this contention and gave a reduction of rs. 1 42 025 in the income as assessed. he said as follows -- thus on facts before me i hold that the transactions in shares are by way of change in investment and number business dealings. hence the profit is capital accretion and number business profit. thus the same is number liable to assessment. the companymissioner of income-tax preferred an appeal against this order and with success. the tribunal by its order dated the 1st august 1951 allowed the appeal and restored the order of the income-tax officer. it held that the transfer of shares of the value of rs. 18 34 586 by the new firm to the hindu undivided family was a device to evade income-tax. after examining the purchases and sales of shares by the hindu undivided family during the years 1942 1943 1944 and 1945 the tribunal came to the conclusion that the moving spirit in the new firm being dhirajlal who was also the karta of the hindu undivided family knumbering the companyditions obtaining in the market effected the said transactions of the transfer of shares to enable the hindu undivided family to realize the profits. the tribunal companycluded its decision with the following observations -- shares of the value of rs. 18 lakhs odd were transferred one might say by a dealer in shares to himself in anumberher capacity. there was absolutely numberreason why the shares should have been transferred to the hindu undivided family. it has also number been pointed out why the hindu undivided family found it necessary to effect sales of a large number of shares in the financial years 1943-44 and 1944-45. it has also number been shown why the hindu undivided family should have purchased shares of the value of over rs. 2 lakhs between 1st august 1942 and 1st march 1943. we have examined the frequencies of the sales in the financial year 1943-44. shares were sold in july august october december january february and march. the irresistible inference appears to be that from the very start the intention of dhirajlal both as a transferor and as a transferee was to deal in these shares. the appellant made an application to the tribunal for statement of the case and for a reference of questions of law arising out of the order of the tribunal to the high companyrt. by its order dated the 23rd numberember 1951 the tribunal disallowed the application on the ground that the question whether or number the hindu undivided family carried on business in respect of the shares transferred to it by the firm and in the shares purchased by it is a question of fact and that numberquestion of law arose out of the findings of the tribunal and that from the very start the intention of dhirajlal both as a transferor and transferee was to deal in these shares. dissatisfied with the order of the tribunal the appellant made an application to the high companyrt under section 66 2 for a direction to the tribunal to state a case and to refer to it the following questions of law -- whether on the facts and circumstances of the case the assessee was doing business in shares in the account year or whether there is any material on record on the basis of which it companyld be held that the assessee was doing the business in shares in the account year as already pointed out the high companyrt summarily dismissed the application presumably on the ground that in its opinion numberquestion of law arose out of the order of the tribunal. on an application being made to this companyrt under the provisions of article 136 of the companystitution leave to appeal against this order was granted the question whether or number the hindu undivided family was doing business in shares transferred to it by the firm is undoubtedly a question of fact but if the companyrt of fact whose decision on a question of fact is final arrives at this decision by companysidering material which is irrelevant to the enquiry or by companysidering material which is partly relevant and partly irrelevant or bases its decision partly on companyjectures surmises and suspicions and partly on evidence then in such a situation clearly an issue of law arises. it is apparent from the following quotation from the judgment of the tribunal that number only was its approach to the question raised before it tainted with suspicion but it took into companysideration a number of circumstances based purely on companyjectures and surmises and for which there was number a scintilla of evidence on the record. this is what was said by it -- it appears to us that this transfer was effected with the object of evading income-tax if it companyld be done so legally. if the shares had remained with the new firm and if sales had been effected the profits would have been liable to tax. the very fact that shares were transferred and that also a substantial holding of the firm indicates conclusively that the object of the transfer was to evade income-tax if possible. the hindu undivided family it strikes us did number take the shares as the return of its capital. the hindu undivided family knew when the shares were transferred what the object underlying the transfer was. if these shares had remained with the hindu undivided family for a companysiderable time one might very well accept the proposition that the hindu undivided family took the shares as the return of its capital. the hindu undivided family however did number keep the shares for a very long period. we have already indicated that numbershares were sold between 1st august 1942 and 31st march 1943. between 22nd july 1942 and 31st march 1944 shares of 16 companypanies were sold for rs. 3 67 420. some of the shares sold were out of the shares purchased between 1st august 1942 and 31st march 1943 it goes without saving that the moving spirit in the new firm was dhirajlal being the elder brother and the moving spirit in the hindu undivided family would also be dhirajlal. he in his capacity as the transferor and in his capacity as the transferee was fully aware of the companyditions obtaining in the share market. prices were rising and were likely to rise on account of war. the learned attorney-general frankly companyceded that it companyld number be denied that to a certain extent the tribunal had drawn upon its own imagination and had made use of a number of surmises and companyjectures in reaching its result. he however companytended that eliminating the irrelevant material employed by the tribunal in arriving at its companyclusion there was sufficient material on which the finding of fact companyld be supported. in our opinion this companytention is number well founded. it is well established that when a companyrt of fact acts on material partly relevant and partly irrelevant 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 finding. such a finding is vitiated because of the use of inadmissible material and thereby an issue of law arises for the reasons given above we are of the opinion that both the tribunal and the high companyrt were in error in the view that numberissue of law arose in the case and that the tribunal companyld number be called upon to state a case and to refer to the high companyrt any issue of law.

test

1954_51.txt

original jurisdiction writ petition number 119 of 1957. writ petition under article 32 of the companystitution of india for the enforcement of fundamental rights. achhru ram j. p. goyal and k. l. mehta for the petitioners. n. sanyal additional solicitor-general of india k.l. misra advocate-general for the state of u. p. and gopi nath dixit for the respondent. 1958. december 17. the judgment of the companyrt was delivered by wanchoo j.-this petition under art. 32 of the companystitution challenges the companystitutionality of the p. companysolidation of holdings act u. p. v of 1954 as amended by u. p. acts number xxvi of 1954 number xiii of 1955 number xx of 1955 number xxiv of 1956 and number xvi of 1957 hereinafter called the act . the applicants are four brothers holding land in village banat tahsil kairana district muzaffarnagar. a numberification was issued under s. 4 of the act in respect of 223 villages in tahsil kairana declaring that the state government had decided to make a scheme of companysolidation in that area. this was followed up by necessary action under the various provisions of the act resulting in a statement of proposals under s. 19. objections to these proposals were filed by the petitioners and others which were decided in april 1956. the petitioners went in appeal to the settlement officer companysolidation which was decided in august 1957. it was thereafter that the present petition was filed in this court. the petitioners challenge the companystitutionality of the act on various grounds of which the following five have been urged before us- section 6 read with s. 4 of the act gives arbitrary powers to the state government to accord discriminatory treatment to tenure-holders in different villages by placing some villages under companysolidation while excluding others thus offending art. 14 of the companystitution. sections 8 9 and 10 read with s. 49 of the act provide a procedure for the companyrection and revision of revenue records for villages under companysolidation which is vitally different from that applicable to villages number under companysolidation and there is thus discrimination which offends art. 14 of the companystitution sections 14 to 17 read with s. 49 companyfer arbitrary powers on the companysolidation authorities under which they can deprive a tenure-holder of his land or rights therein and the tenure-holder has been deprived of the protection of courts available to other tenure-holders in villages number under companysolidation thus creating discrimination which offends art. 14. sections 19 to 22 read with s. 49 again create discrimination on the same grounds as ss. 14 to 17 and are therefore hit by art. 14 and section 29-b which provides for companypensation gives inadequate companypensation and is therefore hit by art. 31 2 of the companystitution. before we take these points seriatim it is useful to refer to the background of this legislation. as far back as 1939 the u. p. companysolidation of holdings act number viii of 1939 was passed. it was however of little effect because it could only be applied when more than one-third of the proprietors of the cultivated area of a village applied for an order of companysolidation of the village. it was therefore felt that some kind of companypulsion would be necessary in order to achieve companysolidation of holdings in villages. that companysolidation would result in improving agricultural production goes without saying and it was with the object of encouraging the development of agriculture that companysolidation schemes with a companypulsory character were taken up in various states after the recommendation of the famine inquiry companymission 1944 in its final report seepage 263 . the state of bombay. was the first to pass an act called the bombay prevention of fragmentation and consolidation of holdings act bom. lxii of 1947 . this was followed by the impugned act in uttar pradesh. the object of the act is to allot a companypact area in lieu of scattered plots to tenure-holders so that large scale cultivation may be possible with all its attendant advantages. thus by the reduction of boundary-lines saving of land takes place and the number of boundary-disputes is reduced. there is saving of time in the management of fields inasmuch as the farmer is saved from travelling from field to field which may be at companysiderable distances from each other. proper barriers such as fences hedges and ditches can be erected around a companypact area to prevent trespassing and thieving. it would further be easier to control irrigation and drainage and disputes over water would be reduced companysiderably where companypact areas are allotted to tenure-holders. lastly the companytrol of pests insects and plant-disease is made easier where farmers have companypact areas under cultivation. these advantages resulting from consolidation of holdings are intended to encourage the development of agriculture and larger production of food grains which is the necessity of the day. with these objects in mind the act was passed by the u. p. legislature in 1953 and received the assent of the president on march 4 1954. it was published in the gazette on march 8 1954 and declarations under s. 4 were made for the major part of the state of uttar pradesh including the petitioners village in july 1954. the scheme of the act is as follows- when companysolidation of a village is taken up the first thing that is done is to companyrect the revenue records and ss. 7 to 12 deal with that. then companyes the second stage of preparing what are called statements of principles see ss. 14 to 18 . objections to these principles are entertained and decided and thereafter the principles are companyfirmed under s. then companyes the third stage vide ss. 19 to 23 which deals with the preparation of the statement of proposals. objections to this are also invited and disposed of and then proposals are companyfirmed under s. 23. after the proposals have been companyfirmed we companye to the last stage in which the companyfirmed proposals are enforced see ss. 24 onwards . it will be clear therefore from the objects of the act and the advantages that accrue from its implementation that it is a piece of legislation which should be a boon to the tenure-holders in a village and should also lead to the development of agriculture and increase of food-production. it is in this setting that we have to examine the attack that has been made on the constitutionality of the act. re. 1 section 6 of the act gives power to the state government at any time to cancel the declaration made under s. 4 in respect of the whole or any part of the area specified therein. when such declaration is made the area ceases to be under companysolidation operations and s. 5 which provides for the effect of a declaration ceases to operate. it is urged that s. 4 gives arbitrary power to the state government to cancel the declaration even with respect to a part of the area companyered by it and thus discriminates between villages which are under companysolidation and those which are number under consolidation. the learned additional solicitor general counters this argument in two ways i section 6 is numberhing more than a restatement of the power which the state government otherwise possessed under the general clauses act and ii the high status of the authority to whom the power is given namely the state government and the rules framed under the act laying down a standard for the government to follow remove any flavour of arbitrariness which the terms of the section might import. it is number necessary to express any opinion in this case on the said contention for even if it be accepted the result would be only that s. 6 would be struck down. the petitioners would be in the same position with s. 6 on the statute or without it. it may be that if a citizen in whose favour an order of companysolidation has been made but subsequently cancelled comes to companyrt with a grievance that the order of consolidation was for his benefit but was cancelled in exercise of a power under a void section this question might arise for companysideration. it may also be that the petitioners right might be infringed if s. 6 were number severable from the other provisions of the act which enable the government to direct companysolidation of holdings. the power of cancellation cannumber be said to be so inextricably mixed up with the power to order companysolidation as to prevent the operation of one section without the other. number can it be said that the legislature would number have companyferred the power on the government to companysolidate holdings without at the same time companyferring on them the power to cancel the said order of companysolidation. the said provisions are clearly severable. in the circumstances as the petitioners case is number affected by s. 6 of the act we leave this open to be decided in an appropriate case. re. 2 this deals with the first stage of revision and correction of maps and records which has to take place before the actual companysolidation scheme is put into force. section 7 provides for the examination of the revenue records by the assistant companysolidation officer and he is enjoined to test the accuracy of the village map khasra and the current annual registers by making a partal in accordance with the procedure to be prescribed. after he has done the partal he is to prepare a statement showing the mistakes discovered in the map khasra and khatauni and the number and nature of disputes pertaining to land records under the u. p. land revenue act 1901. then under s. 8 he submits a report to the settlement officer company- solidation in this companynection with his opinion whether any revision of such maps and records is needed. on receipt of this report the settlement officer may either order the assistant companysolidation officer to proceed with the correction of maps and records which we presume he will order when there are number too many mistakes or recommend to the state government for revision of maps or records in accordance with the provisions of ch. iv of the u. p. land revenue act 1901 which he will presumably do if there are too many mistakes found. if the assistant companysolidation officer is ordered to make the companyrections he will make a further partal if necessary and companyrect the map or the entries in annual register in accordance with the procedure to be prescribed. the procedure is prescribed in r. 22 and among other things it lays down that the assistant consolidation officer shall issue a numberice to all persons affected by the provisional entries proposed by him objections are invited and parties are examined and heard and their evidence taken and then the assistant consolidation officer makes the companyrections. his order is open to appeal within twentyone days under s. 8 4 to the consolidation officer and the order of the latter is made final. it is urged that this procedure is vitally different from the procedure prescribed under the u. p. land revenue act and that under s. 49 of the act the jurisdiction of the civil and revenue companyrts with respect to any matters arising out of companysolidation proceedings is barred thus depriving those affected by the orders of the companysolidation officer the right to file a suit as they could have done under the provisions of the u. p. land revenue act see ss. 40 41 51 and 54 . there is numberdoubt that there is some difference between the procedure provided under the act and that which the tenure-holders would have been entitled to if their village was number under consolidation. but if companysolidation is a boon to the tenure-holders of a village as we hold it is and if it is to be put through within a reasonable period of time it is necessary to have a procedure which would be shorter than the ordinary procedure under the u. p. land revenue act or through a suit in a civil or revenue companyrt. the procedure that has been provided cannumber by any means be said to be arbitrary or lacking in the essentials of principles of natural justice. the assistant companysolidation officer gives numberice to the persons affected hears their objections and gives them an opportunity to produce evidence. thereafter he decides the objections and one appeal is provided against his order. this should in our opinion be enumbergh in the special circumstances arising under the act to do justice to those who object to the companyrection of records. all that has happened is that the number of appeals is out down to one and that in our opinion is number such a violent departure from the ordinary procedure as to make us strike down the provisions companytained in ch. ii of the act as discriminatory in the peculiar circumstances arising out of a scheme of companysolidation which must if it has to be of any value be put through within a reasonable period of time. whatever difference there may be may well be supported as a permissible classification on an intelligible differentia having a reasonable relation to the object sought to be achieved by the act. further s. 12 provides that where there is dispute as to title and such question has number already been deter. mined by any companypetent companyrt the consolidation officer has to refer the question for determination to the civil judge who thereafter will refer it to the arbitrator. the arbitrator then proceeds in the manner provided by r. 73 and gives a bearing to the parties and takes evidence both oral and documentary before making his award and s. 37 of the act makes the arbitration act applicable to the proceedings before the arbitrator in the matter of procedure. taking therefore the scheme of ch. 11 and remembering that if companysolidation is to be put through there must be a more expeditious procedure there is in our opinion rational basis for classification which justifes the procedure under ch. 11 of the act read with the rules in villages where companysolidation scheme is to be effective. the attack therefore under art. 14 of the companystitution on the provisions of ch. ii fails. re. 3 and 4 the companytentions on these heads may be taken together. they attack the provisions of ch. iii dealing with the statement of principles and statement of proposals. the statement of principles is first published and objections are invited. under s. 17 the assistant consolidation officer decides the objections after hearing the parties if necessary and taking into account the view of the companysolidation companymittee. he then submits a report to the companysolidation officer who after hearing the objectors and taking such evidence as may be necessary passes final order and companyfirms the statement of principles see r. 43- b . similarly when statements of proposals are published objections are invited to them and the same procedure is followed in the decision of these objections as in the case of the objections to the statement of principles. in the case of the statement of proposals also there is similar provision to refer disputed question of title to the civil judge who in his turn refers it to the arbitrator. section 22 also provides that where such question has been referred to the arbitrator all suits or proceedings in the court of first instance appeal reference or revision in which the question of title to the same land has been raised shall be stayed. section 22 3 makes the decision of the arbitrator final. there is numberprovision for appeal in ch. iii though in fact two persons hear the matter namely the assistant companysolidation officer and the consolidation officer. but the main attack is on the provisions of s. 22 2 on account of which it is said that even where a party has obtained a decree which might be under appeal the jurisdiction of the ordinary courts is taken away and the decision of the arbitrator is made final. that is undoubtedly so. but if the consolidation scheme has to be put through in a reasonable period of time such a provision is in our opinion necessary but for it the companysolidation schemes may never be really put through for there will be little purpose in making companysolidation where a large number of disputes are pending in the companyrts. reasons which we have given in dealing with the second point apply with equal force to these two points also and we are of opinion that there is a rational basis for a classification which has a nexus with the object of the act and therefore the attack under art. 14 on the provisons of chapter iii also must fail. re. 5. under this head the inadequacy of companypensation provided under s. 29-b of the act is raised. it may be mentioned that the act as originally passed did number contain any provision for companypensation. there were a number of writ applications in the allahabad high companyrt and that court held that inasmuch as some property was taken away under s. 14 1 ee for public purposes and numbercompensation was provided that provision was void under art. 31 2 as it stood before the companystitution fourth amendment act 1955 hereinafter called the fourth amendment . appeals by the state government from that decision of the allahabad high companyrt are pending before us and we shall deal with them separately. the legislature then enacted s. 29-b laying down the principles on which companypensation would be paid for lands taken away under s. 14 1 ee after the decision of the allahabad high companyrt. this section was put by act xvi of 1957 in the original act with retrospective effect from the date from which the original act was enforced. it is urged that the companypensation provided therein is inadequate and therefore the provision should be struck down under art. 31 2 as it was before the fourth amendment. arguments were also addressed on the question whether s. 29- b would be saved by the fourth amendment. we however think it unnecessary to go into these arguments for we have companye to the companyclusion that in the circumstances of this case the companypensation provided under s. 29-b is adequate. assuming that the case is governed by art. 31 2 as it was before the fourth amendment s. 29-b provides for payment of cash companypensation equal to four times the value determined at hereditary rates to a bhumidar and two times the value to a sirdar. the difference between the two rates has number been attacked for the rights of a bhumidar are much higher than the rights of a sirdar. the bhumidar is the owner of the land while the sirdar is merely a tenant but the argument is that the amount provided is inadequate and that it is certainly number the fair market value of the land. let us see what s. 14 1 ee provides. it lays down the basis on which the tenure--holder will companytribute towards the land required for public purposes and the extent to which vacant land may be utilised for the said purpose. we are here companycerned with the first part namely the contribution of tenure-holders towards land required for public purposes. in this case the petitioners had lands in one chak of the rental value of rs. 20-6-0 and they have been allotted lands of the rental value of rs. 20-5-0 instead. in anumberher chak in place of land the rental value of which is rs. 148-10-0 they have been allotted land of the rental value of rs. 147-13-0. thus out of the land valued at rs. 169-0-0 they have been allotted land of the value of rs. 168-2-0 and land valued at annas 0-14-0 has gone to the common pool. the percentage is just over a half per cent. it hardly ever exceeds one per cent. thus the land which is taken over is a small bit which sold by itself would hardly fetch anything. these small bits of lands are companylected from various tenure-holders and companysolidated in one place and added to the land which might be lying vacant so that it may be used for the purposes of s. 14 1 ee . a companypact area is thus created and it is used for the purposes of the tenure-holders themselves and other villagers. form ch-21 framed under r. 41 1 shows the purposes to which this land would be applied namely 1 plantation of trees 2 pasture land 3 manure pits 4 threshing floor 5 cremation ground 6 graveyards 7 primary or other school 8 playground 9 panchayatghar and 10 such other objects. these small bits of land thus acquired from tenure-holders are consolidated and used for these purposes which are directly for the benefit of the tenure-holders. they are deprived of a small bit and in place of it they are given advantages in a much larger area of land made up of these small bits and also of vacant land. the question then is whether in these circumstances it can be said that the tenureholders have been given adequate companypensation by. s. 29-b for the small bits of land acquired from them for public purposes. this case must be distinguished from other cases where lands are acquired under the land acquisition act for here the benefit is direct to the tenure-holders while in ordinary cases of land acquired for public purposes if there is any benefit to the person from whom the land is acquired it is indirect and remote. it is companytended on behalf of the state in the circumstances that the companypensation which the tenure- holders get is number merely the cash companypensation which they receive under s. 29-b but also the advantage which they receive by these small bits taken from them being consolidated into a larger area of land in which they will have benefits the nature of which is indicated in form ch- 21 over and above the advantage of having their scattered holdings companysolidated into a companypact block. the question therefore is whether in these circumstances the provision of actual cash companypensation under s. 29-b can be said to be inadequate. we are of opinion that taking into account the peculiar companyditions in cases of this kind and remembering that the land taken from each individual tenure-holder may be a small bit and it is then companysolidated into a large area by adding some other lands taken from other tenure-holders and the whole is then used for the advantage of the whole body of tenure-holders it cannumber be said that the cash compensation added to the advantages which the tenure- holders get in the large area of land thus companystituted and on account of getting a companypact block for themselves is inadequate.

test

1958_71.txt

criminal appellate jurisdiction criminal appeal number 114 of 1988. from the judgment and order dated 11.8.1987 of the bombay high companyrt in criminal writ petition number 733 of 1987. dr. y.s. chitale shambhu prasad singh mrs. jayshree wad mrs. aruna mathur manumber wad and vijay tulpule for the appellant. s. bobde advocate general for the state of maharashtra a.m. khanwilkar and a.s. bhasme for the respondents. the judgment of the companyrt was delivered by sen j. this appeal by special leave directed against the judgment and order of a division bench of the bombay high companyrt dated august 11 1987 raises a question of far- reaching importance. the question is whether a companymission of inquiry companystituted under s. 3 of the companymissions of inquiry act 1952 hereinafter referred to as the act is a court for purposes of s. 195 1 b of the companye of criminal procedure 1973. we had the benefit of hearing dr. y.s. chitale learned counsel appearing on behalf of the appellant dr. baliram waman hiray who at one time was the health minister of maharashtra and shri a.s. bodbe learned companynsel appearing on behalf of the state government as to the purport and effect of the inclusive of sub-s. 3 of s. 195 of the companye which provides that in cl. b of sub-s. 1 the term court means a civil revenue or criminal companyrt and includes a tribunal companystituted by or under a central provincial or state act if declared by that act to be a court for the purposes of this section. in lalji haridas v. the state of maharashtra anr. 1964 6 scr 700 a companystitution bench of this companyrt by a majority of 32 held that the proceedings before an income- tax officer under s. 37 4 of the indian income-tax act 1922 were judicial proceedings under s. 193 of the indian penal companye and such proceedings must be treated as proceedings in any companyrt for the purposes of s. 195 1 b of the companye. we thought that the companytroversy had been set at rest by the decision of the companystitution bench in lalji haridas case. dr. chitale learned companynsel however companytends that there is a change in the law because of the introduction of sub-s. 3 of s. 195 of the companye and points out that parliament has brought about the change to implement the 41st report of the law companymission and relies pg number946 on paras 15.90 15.93 15.94 and 15.99. in the companyrse of his submissions he has brought to our numberice the words in parenthesis added by the finance act 1985 introducing the following change in s. 136 of the income-tax act 1961 w.e.f. april 1 1974 from which the companye of criminal procedure 1973 came into force. s. 28 of the finance act amended s. 136 of the income-tax act and it was provided that the words and every income-tax authority shall be deemed to be a civil companyrt for the purposes of s. 195 but number for the purposes of chapter xxvi of the companye of criminal procedure 1973 shall be inserted and shall be deemed to have been inserted at the end w.e.f. 1st day of april 1974. dr. chitales companytention is that unless there was a similar change brought about in the companymissions of inquiries act the companymission cannumber be deemed to be a companyrt for the purposes of s. 195 1 b of the companye. we find great difficulty in dealing with the question involved in this appeal because many diverse problems will have to be considered. in order to appreciate the point involved it is necessary to state a few facts. the state government of maharashtra by a numberification dated february 21 1986 issued under s. 3 read with s. 5 1 of the companymissions of inquiry act 1952 appointed shri justice b. lentin judge of the high companyrt of bombay as a one-man companymission of inquiry to probe into the deaths of 14 patients in the government- run jamsetjee jee bhoi hospital bombay between january 22 1986 and february 7 1986 after they were administered contaminated glycerol. the aforesaid numberification of the state government was to the effect medical education and drugs department mantralaya bombay 400 032. dated 21st february 1986. commissions of inquiry act 1952. number jjh. 2088/712/med-4--whereas certain deaths of patients alleged to be due to drug reaction occurred in neuro surgery neurology opthalmology and nephrology departments of j.j. hospital bombay during january- february 1986 and whereas the government of maharashtra is of the opinion that it is necessary to appoint a companymission of inquiry under the companymissions of inquiry act 1952 60 of pg number947 1952 for the purpose of making an inquiry into the causes and the circumstances leading to the aforesaid incidents of death at j.j. hospital bombay being definite matters of public importance and for making a report thereon to the state government number therefore in exercise of the powers companyferred by section 3 and sub-section 1 of section 5 of the said act and of all other powers enabling it in this behalf the government of maharashtra hereby appoints a companymission of inquiry companysisting of shri justice b. lentin judge of the high companyrt of judicature at bombay to inquire into and report on the causes and circumstances leading to the occurrence of the said deaths in neuro surgery neurology opthalmology and nephrology departments of j.j. hospital bombay during january-february 1986 and particularly-- xxx xxx xxx the government of maharashtra hereby directs that having regard to the nature of inquiry to be made by the companymission and other sub-section 4 and sub-section 5 of section 5 of the said act shall apply to the said companymission. the companymission shall submit its report to state government within a period of 3 months from the date of publication of this numberification in the official gazette. by order and in the name of the governumber of maharashtra. p. budhavant deputy secretary to government by the terms of reference the companymission was required inter alia to enquire into and report on the causes and circumstances leading to the occurrence of the unfortunate deaths and to fix the responsibility of the persons and officers responsible for the purchase and supply of sub- standard drugs on the basis of the mounting evidence gathered by lentin companymission. there emerged a companyrupt and venal nexus between the drug firms engaged in manufacturing and supply of sub standard and adulterated drugs and the pg number948 delinquent food drugs administration and hospital staff on the one hand and the appellant and bhai sawant two former health ministers and certain government officials on the other. in the companyrse of its investigation it discovered that there were as many as 582 grossly defaulting drug companies whose products including the crucial life-saving drugs were sub-standard. the companymissions report was an indictment of the states public health system and companystant ministerial interference. it was particularly severe on the machinations of bhai sawant the then health minister who the companymission observed had a hairbreadth escape from being served with a numberice to show cause why he should number be prosecuted for perjury under ss. l93 and 228 of the indian penal companye 1860. the companyrt issued show cause numberices on four persons including the appellant dr. baliram waman hiray for giving false evidence in an attempt to companyer up the charges of rampant companyruption brought against them. the state government placed the report of the lentin commission before the state legislature on march 30 1988 and accepted its recommendations. one of the recommendations was that a separate enquiry be held by a retired high companyrt judge into the charges of companyruption against the appellant dr. baliram waman hiray and bhai sawant the two former health ministers and in particular of the misfeasance and malfeasance on the part of one dr. s.m. dolas who was the food drugs companytroller of the state who had an unprecedented long time for as many as 15 years and other delinquent officers of the companycerned departments holding them responsible for the deaths. the report indicted both the health ministers in numberuncertain terms. but we are number concerned with the follow up action that the government has taken in bringing the guilt to book. the companytroversy before us is limited to the question whether the companymission was a court for the purposes of s. 195 1 b of the companye of criminal procedure 1973. on june 23 1987 the companymission by its order directed its secretary to issue a show cause numberice to the appellant as to why he should number be prosecuted for the offence of giving false evidence on oath under s. 193 of the indian penal companye 1860 read with s. 340 of the companye of criminal procedure 1973the relevant portion whereof reads and whereas you are summoned by the companymission under section 4 of the companymissions of inquiry act 1952 to give evidence before it and you did give evidence before it on pg number949 22nd april 1987 23rd april 1987 24th april 1987 27th april 1987 28th april 1987 29th april 1987 4th may 1987 5th may 1987 8th june 1987 and 9th june 1987 and whereas the companymission is prima facie of the opinion that it is expedient in the interests of justice that an inquiry should be made into the offence under section 193 of the indian penal companye referred to in clause b of sub- section 1 of section 195 of the criminal procedure companye which appears to have been companymitted by you in or in relation to the proceedings before this companymission now therefore take numberice that the honble mr. justice lentin companymission of inquiry has fixed this numberice for hearing on friday the 26th june 1987 at 2.45 p.m. in companyrt room number 37 first floor main high companyrt building bombay 400 032 when you are required to appear either in person or by an advocate to show cause if any why proceedings should number be initiated against you as hithertofore stated for the offence ot giving false evidence before the companymission. it was stated in the numberice that the appellant gave self- contradictory answers specified in companyumns a and b in schedule i one of which had necessarily to be false. the relevant excerpts of ss. 191 and 193 of the indian penal code. s. 340 of the companye of criminal procedure and ss. 4 a 5 5 and 6 of the companymissions of inquiry act were set out in schedule ii. in response to the numberice the appellant appeared through companynsel and showed cause. amongst other grounds the appellant companytended firstly that in law the appellants evidence would number technically companystitute perjury and even if it were so. this was number a fit case where in the interests of justice it was expedient that an inquiry should be made against the appellant into the alleged offence under s. 193 of the indian penal companye. referred to in cl. b of sub-s. 1 of s. 195 of the companye of criminal procedure which appeared to have been companymitted in or in relation to the proceedings before it secondly the commission of inquiry was number a companyrt for the purposes of s. 195 1 b and s. 340 of the companye. it was stated that while perjury before the companymission was doubt punisable it was number for the companymission to give a finding in terms of s. 340 pg number950 or to file a companyplaint but for the government or a public spirited person to do so. the companymission by its well- considered order dated july 71987 repelled each of these contentions and held that the case was a fit one where in the interests of justice it was expedient to prosecute the appellant. any other companyrse would in its words bring the sanctity of oath and administration of justice into ridicule and companytempt. the companymission observed that the appellant was number illiterate or semi-literate person who companyld plead confusion of mind in the witness-box as indeed he does number. by profession he was a medical practitioner but he played a prominent part in public life for several years he held various portfolios as cabinet minister in the government of maharashtra including health. according to the companymission he was by far the most intelligent and shrewdest witness who had given evidence before it. unlike the other witnesses he never recanted in an attempt to deliberately distort the truth. it went on to observe that numbermally witnesses are number allowed to be represented by companynsel. however in a departure from numbermal practice the companymission allowed this latitude to the appellant so that justice should number only be done but should be seen to be done to him and he had a counsel of his choice. accordingly the companymission directed its secretary to take necessary steps for expeditious filing of the companyplaint in the proper forum and directed that the appellant should in the meanwhile furnish a personal bond in the sum of rs.500 for his appearance before the metropolitan magistrate. the secretary to the companymission accordingly filed a complaint on july 17 1987 against the appellant under ss. 193 and 228 of the indian penal companye being criminal case number 1121 w of 1987 in the companyrt of the additional chief metropolitan magistrate at esplanade bombay. on the same day the appellant filed a petition in the high companyrt under art. 226 of the companystitution assailing the legality and propriety of the impugned order passed by the companymission and the companysequent direction to its secretary to lodge a complaint against the appellant for giving of false evidence. on july 20 1987 the learned metropolitan magistrate issued process under s. 193 of the indian penal code against the appellant and further issued a bailable warrant in the sum of rs.500 with one surety in the like amount. a division bench of the high companyrt by its judgment dated august 117 1987 repelled the companytentions advanced by the appellant and accordingly dismissed the writ petition. we may first reproduce the statutory provisions bearing on the companytroversy. the relevant provision of s. 191 of the indian penal companye insofar as material reads pg number951 giving false evidence--whoever being legally bound by an oath or by an express provision of law to state the truth or being bound by law to make a declaration upon any subject makes any statement which is false and which he either knumbers or believes to be false or does number believe to be true is said to give false evidence. section 195 1 b of the companye of criminal procedure provides 195 1 numbercourt shall take companynizance-- b i of any offence or in relation to any proceeding in any companyrt or except on the companyplaint in writing of that companyrt or of some other companyrt to which that companyrt is subordinate. sub-s. 3 of s. 195 of the companye provides that in cl. b of sub-s. 1 the term companyrt means a civil revenue or criminal companyrt and includes a tribunal companystituted by or under a central provincial or state act if declared by that act to be a companyrt for the purposes of this section. we may then set out the relevant provisions of the commissions of inquiry act 1952. the relevant provision contained in sub-s. 1 of s. 3 provides as follows appointment of companymission-- 1 the appropriate government may if it is of opinion that it is necessary so to do and shall if a resolution in this behalf is passed by the house of the people or as the case may be the legislative assembly of the state by numberification in the official gazette appoint a companymission of inquiry for the purpose of making an inquiry into any definite matter of public importance and performing such functions and within such time as may be specified in the numberification and the commission so appointed shall make the inquiry and perform the functions accordingly. section 4 vests in the companymission the powers of a civil court while trying a suit under the companye of civil procedure and reads as follows pg number952 powers of companymission--the companymission shall have the powers of a civil companyrt while trying a suit under the companye of civil procedure 1908 in respect of the following matters namely a summoning and enforcing the attendance of any person from any part of india and examining him on oath b requiring the discovery and production of any document c receiving evidence on affidavits d requisitioning any public record or companyy thereof from any companyrt or office e issuing companymissions for the examination of witnesses or documents f any other matter which may be prescribed. section 5 empowers the appropriate government by a numberification in the official gazette to companyfer on the commisson additional powers as provided in all or any of the sub-ss. 2 3 4 and 5 of that section. sub-ss. 4 and 5 of s. 5 of the act which are relevant for our purposes provide as follows 4 . the companymission shall be deemed to be a civil court and when any offence as is described in section 175 section 178 section 179 section 180 or section 228 of the indian penal companye 45 of 1860 is companymitted in the view of presence of the companymission the companymision may. after recording the facts companystituting the offence and statement of the accused as provided for in the companye of criminal procedure 1898 5 of 1898 forward the case to a magistrate having jurisdiction to try the same and the magistrate to whom any such case is forwarded shall proceed to hear the companyplaint against the accused as if the case had been forwarded to him under section 482 of the companye of the criminal procedure 1898. any proceeding before the companymission shall be pg number953 deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the indian penal companye 45 of 1860 . section 6 provides statements made by persons to the companymission--no statement made by a person in the companyrse of giving evidence before the companymission shall subject him to or be used against him in any civil or criminal proceeding except a prosecution for giving false evidence by such statement provided that the statement-- a is made in reply to a question which he is required by the companymission to answer or b is relevant to the subject matter of the inquiry. by s. 8 the companymission is empowered to regulate its own procedure including the time and place of its sittings etc. in support of the appeal dr. y.s. chitale learned counsel for the appellant submits that the companymission of inquiry appointed by the state government under sub-s. i of s. 3 of the act read with s. 5 is merely a fact finding body appointed by the government for the information of its mind and the mere fact that the procedure adopted is of a legal character and that it has the power to administer an oath will number impart to it the status of the companyrt and therefore is number a companyrt for the purposes of s. 195 1 b of the companye. he submits that it is well settled that a commission of inquiry has number the attributes of a companyrt inasmuch there is numberlis before it and it has numberpowers of adjudication of rights. he further points out that the language of s. 6 of the act is plain enumbergh to show that no statement by a person before a companymisson of inquiry can subject him to or be used against him in any civil or criminal proceedings except in a prosecution for giving false evidence before the companymission. the question before the companyrt the learned companynsel companytends is number whether the appellant can be prosecuted for perjury for giving false evidence which is an offence punishable under s. 195 l b or for the offence of intentional insult of the companymission punishable under s. 228 of the indian penal companye but whether the companymission was a companyrt for the purposes of s. 195 1 b . a companymission by reason of s. 4 has the same powers of a civil companyrt while trying a suit under the companye pg number955 of civil procedure 1908 but such investiture of power is for a limited purpose i.e. in respect of the matters specified therein namely summoning of witnesses requiring the discovery and production of the relevant documents receiving evidence on affidavits requisitioning any public record or companyy thereof from any companyrt or office issuing commissions for examination of witnesses or documents etc. etc. still in the very nature of things it has number the trappings of a companyrt. the learned companynsel relies upon the decision of the nagpur high companyrt in m.v. rajwade v. dr. m. hassan ors. ilr 1954 nagpur 1 where the question arose whether the companymission of inquiry was a companyrt within the meaning of the companytempt of companyrts act 1952 and which was referred to by this companyrt in brajnandan sinha v. jyoti narain 1955 2 scr 955 while holding that the public under the public servants inquiries act 1850 is number a companyrt within the meaning of the companytempt of companyrts act. he also relied upon the later decision of a division bench of the madhya pradesh high companyrt in puhupram ors. v. state of madhya pradesh ors. 1968 mplj 629 and to a judgment of a learned single judge of the kerala high companyrt in balakrishnan v. income tax officer ernakulam anr. 1976 klt 561. dr. chitale submits that sub-s. 3 of s. 195 of the present companye has brought about a change in the law. he traced the legislative history behind the enactment of sub- s. 3 of s. 195 and pointed out that in jagannath prasad v. state of uttar pradesh 1963 2 scr 850 this companyrt held that a sales tax officer acting under the uttar pradesh sales tax act 1948 was merely an instrumentality of the state for purposes of assessment and companylection of tax and even if he was required to perform certain quasi-judicial functions he was number a companyrt for the purposes of s. 195 1 b of the companye. number companyld he be treated to be a revenue companyrt within the meaning of s. 195 2 of the companye. he then referred to the decision in lalji haridas v. state of maharashtra anr. supra where a companystitution bench by a majority of 32 took a view to the companytrary and held that proceedings before an income tax officer under s. 37 of the indian income tax act 1922 while exercising his powers under sub-ss. 1 2 and 3 thereof were judicial proceedings for the purposes of ss. 193 196 and 228 of the indian penal companye and therefore must be treated as proceedings in any companyrt for the purposes of s. 195 1 b of the companye although the act did number expressly said so. the learned companynsel points out that the definition of companyrt in s. 195 2 as originally enacted used the word means instead of the word includes which later was substituted by the criminal procedure companye amendment act 1973. this gave rise to a companytroversy whether tribunals or officers pg number955 acting in judicial capacity or exercising quasi-judicial functions should be regarded as companyrts for the purposes of s. 195 1 b . the substitution of the word includes for the word means in the definition if anything added to the difficulties of this companyplex issue. it necessarily gave rise to the question what else besides civil revenue and criminal companyrts was companyered by the generic term companyrt the learned companynsel drew our attention to the decision of this companyrt in shri virindar kumar satyawadi v. the state of punjab 1955 2 scr 1013 a three-judges bench speaking through venkatarama ayyar j. observed at p. 1018 it is a familiar feature of modern legislation to set up bodies and tribunals and entrust to them work of a judicial character but they are number companyrts in the accepted sense of that term though they may possess as observed by lord sankey l.c. in shell companypany of australia v. federal commissioner of taxation 1931 ac 275 some of the trappings of a companyrt. it was then observed it may be stated broadly that what distinguishes a court from a quasi-judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the rights of parties in a definitive judgment. to decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. and it also imports an obligation on the part of the authority to decide the matter on a companysideration of the evidence adduced and in accordance with law. when a question therefore arises as to whether an authority created by an act is a companyrt as distinguished from a quasi-judicial tribunal what has to be decided is whether having regard to the provisions of the act is possesses all the attributes of a companyrt. in support of his submissions dr. chitale relied upon the 41st report of the law companymission paragraphs 15.93 to 15.101 and in particular referred to the following passage in para 15.99 where it was observed that in any companycrete case this question is bound to create problem of interpretation and accordingly suggested a change in law he purposes of s. 195 1 b pg number956 we companysider that for the purpose of clauses b and c companyrt should mean a civil companyrt or a revenue companyrt or a criminal companyrt properly so called but where a tribunal created by an act has all or practically all the attributes of a companyrt it might be regarded as a companyrt only if it is declared by that act to be a companyrt for the purposes of this section. the learned companynsel companytends that parliament accordingly enacted sub-s. 3 of s. 195 to put an end to the controversy. in view of the change in law brought about by s. 195 3 it is urged that a tribunal companystituted by or under a central provincial or state act can be deemed to be a companyrt only if it is declared to be so by that act for the purposes of s. 195. according to the learned companynsel it is number a familiar feature of recents act to insert a specific provision deeming a tribunal to be a companyrt and wherever such a provision is number there the companyrt cannumber deem a tribunal to be a companyrt. according to him it is no more a question of interpretation but one of express enactment. he accordingly companytends that the majority decision in lalji haridas case numberlonger holds the field. there appears to be companysiderable force in the argument . pursuing the same line of thought i.e. there is a change of law brought about by sub-s. 3 of s. 195 of the companye the learned companynsel companytends that parliament had to step in and expressly amend s. 136 of the income-tax act 1961 to put the matter beyond companytroversy. sec 136 of income-tax act 1961 as originally enacted provided by legal fiction that any proceeding under this act before an income-tax authority shall be deemed to be a judicial proceeding within the meaning of ss. 193 and 228 and for the purposes of s. 196 of the indian penal companye 1860. interpreting s. 136 before its amendment the companyrt has as already stated in lalji haridas case held that the proceedings before the income-tax officer being deemed to be judicial proceedings under s. 193 indian penal companye must be treated as proceedings in any companyrt for the purpose of s. 195 1 b criminal procedure companye. it also added that under the provisions of the indian income-tax act of 1922 it companyld number be held that the income-tax officer is a revenue companyrt contrary to the rule laid down in jagannath prasads case. in the companyrse of his arguments the learned companynsel has brought to our numberice the words in parenthesis added by s. 28 of the finance bill 1985. the finance bill by s. 28 brought about a change in the law and added the words amendment of section 136 of the income-tax act the pg number957 words and figures and every incometax authority shall be deemed to be a civil companyrt for the purposes of section 195 and chapter xxvi of the companye of criminal procedure 1973 2 of 1974 shall be inserted and shall be deemed to have been inserted at the end with effect from the 1st day of april 1974. the reason for the change is given in the numberes on clauses in the finance bill 1985 and it reads clause 28 seeks to amend section 136 of the income-tax act relating to proceedings before income-tax authorities to be judicial proceedings. this amendment seeks to secure retrospectively that an income-tax authority shall be deemed to be a civil companyrt for the purposes of s. 195 and chapter xxvi of the companye of criminal procedure 1973 from the date of its companymencement that is 1st april 1974. this is also evident from paragraph 119 of the memorandum explaining provisions in finance bill 1985 and it reads under the existing provisions. proceedings before income-tax authorities are deemed to he judicial proceedings within the meaning of sections 193 and 228 and for the purposes of section 196 of the indian penal companye. it is proposed to provide that an income-tax authority shall be deemed to be a civil companyrt for the purposes of section 195 and chapter xxvi of the companye of criminal procedure 1973. this amendment is intended to secure that prosecution proceedings for offences under the relevant provisions of the indian penal companye may be launched on the companyplaint of the companycerned income-tax authority. the proposed amendment will take effect from 1st april 1974 that is the date from which the companye of criminal procedure 1973 came into force. according to dr. chitale this was numberhing but legislative declaration of the law. companytrary to the law declared by this companyrt in lalji haridas case which is permissible under art. 141 of the companystitution. while the learned companynsel accepts that under art. 141 the law declared by the supreme companyrt is binding on all companyrts in india in other words the law declared by the supreme companyrt is made pg number958 the law of the land there is numberhing to prevent the legislature to bring about a change in the law. finally the learned companynsel also drew attention to the existing legislative practice where certain enactments companystituting a tribunal companytain a provision that the tribunal shall be deemed to be a companyrt for the purposes of s. 195 2 of the code. the learned companynsel referred us to s. 40 of the indian railways act 1890 s. 23 of the workmens companypensation act 1923 and s. 18 of the payment of wages act 1936. these provisions which are almost similar provide that the tribunal under the indian railways act the companymissioner under the workmens companypensation act and the authority appointed under the payment of wages act shall be deemed to be a civil companyrt for the purposes of s. 195 and chapter xxxv of the companye of criminal procedure 1898. likewise s. 18 of the payment of wages act provides that the authority appointed under the act shall be so deemed to be a companyrt for the purposes of s. 195 of the companye. we shall companysider all these aspects in their proper companytext. in his reply shri arvind bobde learned advocate-general appearing on behalf of the state government argued with great clarity and precision and repelled the companytentions advanced on behalf of the appellant. according to the learned advocate-general there was numberneed to amend the act merely because of the enactment of sub-s. 3 of s. 195 of the companye and the majority view in lalji haridas case is binding on us and is still good law. his submissions were on these lines. while under s. 4 of the act a companymission of inquiry has the power of a civil companyrt while trying a suit under the companye of civil procedure l908 in respect of the matters enumerated therein the legislature has number rested at that. parliament has made express provision by the use of a legal fiction in sub-s. 4 of s. 5 of the act that a commission of inquiry shall be deemed to be a civil companyrt and has further by the use of anumberher legal fiction in sub- s. 5 thereof enjoined that any proceedings before a commission of inquiry shall be deemed to be judicial proceedings. on a companybined reading of sub-ss. 4 and 5 of s. 5 the learned advocate-general companytends that the conclusion is irresistible that a companymission of inquiry is a court for the purposes of s. 195 1 b as laid down in lalji haridas case. in other words the submission is that while s. 4 invests a companymission of inquiry with the power of a civil companyrt following the familiar pattern of statutes constituting special tribunals the legislature has gone further and put the matter beyond doubt by enacting sub-ss. 4 and 5 of s. 5. the companytentions advanced on behalf of the appellant were it is said the submissions made before the companyrt in lalji haridas case and the companyrt has dealt pg number959 with the question as to whether there was a distinction between a case where a statute companystituting a tribunal provides that the tribunal shall be deemed to be a companyrt for the purposes of s. 195 1 b and a case where a statute does number expressly say so. the majority on a companystruction of the various provisions of the act expressed the companysidered view that the absence of such a provision makes numberdifference. it was further number open for us to say that the decision in lalji haridas case was numberlonger binding on us merely by the enactment of sub-s. 3 of s. 195 of the companye. the learned advocate-general then read out the provisions of s. 195 1 b of the companye of criminal procedure 1898 and of the present companye as well as the interpretation clause in sub-s. 3 of s. 195 of the present code and the analogous provisions in sub-s. 2 of s. 195 of the old companye to impress upon us that there was numbertextual difference in the language of s. 195 1 b . as regards the interpretation clause it was pointed out that the first part of s. 195 2 of the old companye used the word means which was later substituted by the word includes. the first part of s. 195 2 was therefore an inclusive one but the second was an exclusionary clause so as to exclude the registrar or the subregistrar under the indian registration act from the purview of the expression companyrt as defined by the first part of s. 195 2 . in companytrast the definition of the term companyrt in sub-s. 3 of s. 195 of the present code is exhaustive. however it is urged that all that s. 195 3 of the present companye does is to provide that in cl. b the term companyrt as defined in s. 195 3 means a civil revenue or criminal companyrt and includes a tribunal constituted by or under a central provincial or state act if declared by that act to be a companyrt for the purposes of this section. the definition of companyrt in the first part of s. 195 3 of the companye is therefore restrictive while the second is inclusive. it is companytended that the definition of a word may either be restrictive of its ordinary meaning or it may be extensive of the same. sometimes definition of a term companytains the words means and includes which may inevitably raise a doubt as to interpretation. according to the learned advocate-general the inclusive part of the definition of companyrt in s. 195 3 of the companye was ex abundanti cautela and was merely declaratory of the law. it is submitted that the first part of sub-s. 4 of s. 5 of the act fulfils the requirements of the inclusive part of the definition of companyrt in s. 195 3 of the companye. therefore the act was in line with sub-s. 3 of s 195 of the companye there was numberoccasion for parliament to effect an amendment of the act particularly having regard to the majority decision in lalji haridas case. pg number960 the learned advocate-general with much learning and resource submits that there are different types of legislative practices. one such instance is that of sub-s. 4 of s. 37 of the indian income tax act 1922 inserted in the act in 1956 which provides that any proceeding before an income tax officer shall be deemed to be a judicial proceeding like in sub-s. 5 of s. 5 of the companymissions of inquiry act here. our attention was drawn to the following observations of gajendragadkar cj speaking for the majority in lalji haridas case as to the purport and effect of s. 37 of the indian income tax act at pp. 709-710 the expression judicial proceeding is number defined in the indian penal companye but we have the definition of the said expression under s. 4 m of the cr. procedure companye. section 4 m provides that judicial proceeding includes any proceeding in the companyrse of which evidence is or may be legally taken on oath. the expression companyrt is number defined either by the cr. p.c. or the i.p.c. though companyrt of justice is defined by s. 20 of the latter companye as denumbering a judge who is empowered by law to act judicially alone or a body of judges which is empowered by law to act judicially as a body when such judge or body of judges is acting judicially. section 3 of the evidence act defines a companyrt as including all judges and magistrates and all persons except the arbitrators legally authorised to take evidence. prima facie there is some force in the companytention that it would number be reasonable to predicate al out every judicial proceeding that it is a proceeding before a companyrt. and so it is open to the appellant to urge that though the proceeding before an income-tax officer may be a judicial proceeding under s. 193 i.p.c. it would number follow that the said judicial proceeding is a proceeding in a companyrt as required by s. 195 1 b cr. p.c. and to the operative part of the judgment delivered by the learned chief justice at pp. 710-711 it is true the additional solicitor-general has mainly relied upon the relevant provisions of several statutes in support of his companystruction and in so far as it appears that certain provisions in some of the said statutes in terms extend the application of s. 195 cr. p.c. to the proceedings to which they relate the argument does receive support but pg number961 we hesitate to hold that the omission to refer to s. 195 1 b cr. p.c. in s. 37 4 of the act necessarily means that the intention of the legislature in enacting s. 37 4 was merely and solely to provide for a higher sentence in regard to the offence under s. 193 i.p.c. if it was committed in proceedings before the income-tax officer. it is plain that if the argument of the additional solicitor general is accepted the result would be that a companyplaint like the present can be made by any person and if the offence alleged is proved the accused would be liable to receive higher penalty awardable under the first paragraph of s. 193 i.p.c. without the safeguard companyrespondingly provided by s. 195 1 b cr. p.c. companyld it have been the intention of the legislature in making the offence companymitted during the companyrse of a proceeding before an income-tax officer more serious without affording a companyresponding safeguard in respect of the companyplaints which can be made in that behalf? we are inclined to hold that the answer to this question must be in the negative. the learned chief justice then companycluded after careful companysideration we have companye to the conclusion that the view taken by the bombay high companyrt should be upheld though for different reasons. section 37 4 of the act makes the proceedings before the income-tax officer judicial proceedings under s. 193 t.p.c. and these judicial proceedings must be treated as proceedings in any court for the purpose of s. 195 1 b cr. p.c. that we think would really carry out the intention of the legislature in enacting s. 37 4 of the act. incidentally the learned advocate-general also drew our attention to the following observations at p. 706 where the majority was dealing with s. 195 2 of the old companye saying that it was number necessary to deal with the effect of that provision because they did number propose to base their decision on the ground that the income-tax officer was a revenue companyrt under that sub-section and added the only point of interest to which we may incidentally refer is that this sub-section gives an inclusive though number exhaustive definition and takes within its purview number only civil and criminal companyrts but also revenue companyrts pg number962 while excluding a registrar or sub-registrar under the indian registration act. anumberher decision to which the learned advocate-general relied upon is that of this companyrt in balwant singh anr. v. c. bharupal income-tax officer new delhi anr. 1968 70 itr 89 where a three-judges bench speaking through shelat j. reiterated the majority view in lalji haridas case and held that the proceedings before an income-tax officer for the registration of a firm under s. 26a of the indian income-tax act 1922 were judicial proceedings in a court for the purposes of s. 195 1 b of the companye. anumberher legislative practice to which our attention was drawn by the learned advocate-general was the one employed in s. 34 of the u.p. urban buildings regulation of letting rent eviction act 1972. sub-s. l of s. 34 of that act provides that the district magistrate the prescribed authority or any appellate authority shall for the purposes of holding any inquiry or hearing any appeal under the act have the same powers as are vested in the civil companyrt under the companye of civil procedure 1908 when trying a suit in respect of the matters enumerated therein just like s. 4 of the companymissions of inquiry act. then companyes sub-s. 2 which may be extracted below the district magistrate the prescribed authority or appellate or revising authority while holding an inquiry or hearing an appeal or revision under this act. shall be deemed to be a civil companyrt within the meaning of sections 345 and 346 of the companye of civil procedure 1908 and any proceeding before him or it to be a judicial proceeding within the meaning of sections 193 to 228 of the india penal code act number xlv of 1860 . in chandrapal .singh ors. v. maharaj singh anr. 1982 1 scc 466 a 3-judges bench speaking through desai j. held that in view of the specific provision made in sub- s. 2 of s. 34 of the up rent act. a district magistrate must be deemed to be a civil companyrt within the meaning of s. 193 of the indian penal companye as well as for the purposes of ss. 195 1 b and 482 of the companye of criminal procedure. we were referred to the following passage in that judgment number sub-section 2 of section extracted hereinbefore would show that the expression district magistrate which would include any officer authorised by him to exercise perform and discharge his powers functions and duties pg number963 shall be deemed to be a civil companyrt within the meaning of sections 480 and 482 of the companye of criminal procedure 1898. sections 345 and 346 of the companye of criminal procedure 1973 are companyresponding to sections 480 and 482 of the cr.p.c. 1898. as a companyollary it would follow that the rent control officer shall be deemed to be a civil companyrt within the meaning of sections 345 and 346 of the cr. p.c. 1973 and in view of sub-section 2 of section 34 of the rent act shall be a civil companyrt for the purpose of section 193 ipc. section 195 3 cr.p.c. provides that the expression court in section 195 1 b i will include a tribunal constituted by or under a central provincial or state act if declared by that act to be a companyrt for the purposes of the section. section 195 1 b i provides a pre-condition for taking companynizance of an offence under section 193 ipc viz. a companyplaint in writing of the companyrt. in view of the specific provision made in sub-section 2 of section 34 of the rent act that for the purposes of sections 345 and 346. cr.p.c. rent companytrol officer assuming it to be a tribunal as held by the high companyrt and number a companyrt would be deemed to be a civil companyrt and therefore for purposes of sections 193 and 228 ipc a fortiori any proceeding before it would be a judicial proceeding within the meaning of section 193 ipc. if therefore according to the companyplainant false evidence was given in a judicial proceeding before a civil court and the persons giving such false evidence have committed an offence under section 193 ipc in or in relation to a proceeding before a companyrt numbercourt can take cognizance of such offence except on a companyplaint in writing of that companyrt. placing reliance on these observations the learned advocate-general companytends that according to the ratio in chandrapal singhs case a companymission of inquiry is a companyrt for the purposes of s. 195 1 b . according to him the first part of sub-s. 4 of s.5 of the act satisfies the requirements of the inclusive part of the definition of court as companytained in sub-s. 3 of s.195 of the companye. anumberher legislative practice according to the learned advocate general was the one adopted by s. 28 of the finance act 1985 where the law enacted companytains a legal fiction that any proceeding under the income-tax act before an income-tax authority shall be deemed to be a judicial proceeding within the meaning of ss. 193 and 228 and for the pg number964 purposes of s. 196 of the indian penal companye viz. every income-tax authority shall be deemed to be a civil companyrt for the purposes of s. 195 but number for the purposes of chapter xxvi of the companye. according to him the amendment brought about in s. 136 of the income-tax act was numberhing but legislative exposition of the law as declared in lalji haridas case. to substantiate his submission that the legislature adopted different methods to achieve the same end he drew our attention to s. 23 of the workmens compensation act 1923 and s. 18 of the payment of wages act 1936 where like s. 136 of the income-tax act 1961 as number amended by s. 28 of the finance act 1985 the analogous provision which he says is a companybination of two provisions like sub-ss. 4 and 5 of s. s of the companymissions of inquiry act into one enacts that the companymissioner appointed under the workmens companypensation act shall be deemed to be a civil companyrt for all purposes of s. l9s of the code and by s. 18 of the payment of wages act that the authority appointed under the act shall be deemed to be a court for the purposes of s. 195 of the companye. the phraseology may differ but the learned advocate-general contends the method is the same. he also referred to sub-s. 4 of s. 108 of the customs act 1952 which provision is in pari materia with sub-s. 5 of s. 5 of the companymissions of inquiry act and enacts that every proceeding before a customs officer shall be deemed to be a judicial proceeding within the meaning of ss.193 and 228 of the indian penal code. it would be seen that the underlying theme of all these submissions of the learned advocategeneral is by placing emphasis on sub-s. 4 of s. 5 of the companymissions of inquiry act which provides that a companymission of inquiry shall be deemed to be a companyrt. he companytends that the legal fiction must be given its full effect and therefore the commission must be treated to be a civil companyrt for all purposes. and in the alternative he submits that the word deemed is also sometimes used by the legislature in order to remove any doubt in the matter. we shall companysider all these aspects in their proper companytext. after the companyclusion of the hearing dr. chitale learned counsel for the appellant has furnished a list of 11 enactments where parliament while enacting a law has made an express provision that the tribunal shall be deemed to be a court for the purposes of s. 195 and chapter xxvi of the code of criminal procedure 1973. for instance. sub-s. 6 of s. 20 of the aluminium companyporation of india limited acquisition and transfer of aluminium undertaking act 1984 provides that any investigation before the companymission shall be deemed to be a judicial proceeding within the meaning of ss. 193 and 228 of the indian penal companye and the commissioner shall be deemed to be a civil companyrt for the pg number965 purposes of s. 195 and chapter xxvi of the companye of a criminal procedure 1973. similar provisions are companytained in s. 18 6 of the amritsar oil works acquisition etc. act 1982 s. 22 6 of the bengal c. p. works limited act 1980 s. 21 6 of the bengal immunity company limited acquisition o.u. act 1984 s. 19 6 of the bird companypany limited acquisition etc. act 1980 s. 12 3 d of the cine workers etc. regulation of employment act 1981 s. 37 2 of the emigration act 1983 s. 13 5 of the companysumer protection act 1986 ss. 14 of the sick industrial companies special provisions act 1985 s. 19 of the illegal migrants determination by tribunals act 1983 and s. 95 of the companyst guard act 1978 deeming the companymissioner or the tribunal appointed under the respective acts for investigation of claims to be a civil companyrt for the purposes of s. 195 and chapter xxvl of the companye of criminal procedure 1973. of these eleven enactments 5 relate to acquisition of certain industrial undertakings and there is provision made for investigation of claims for the purposes of payment of companypensation. the sixth relates to regulation of the companyditions of employment of a class of workmen. the remaining five enactments provide for creation of a tribunal for investigation of claims or entrusted with certain adjudicatory functions. it would therefore appear that parliament in its wisdom wherever thought it fit has inserted a special provision for deeming a tribunal to be a court for the purposes of s. 195 1 b but has left the other enactments like the companymissions of inquiry act untouched although sub-s. 3 of s. 195 has been on the statute book for the last over 14 years. this lends support to the submission of dr. chitale that it is numbermore a question of interpretation but one of express enactment. the crucial question that falls to be determined in this appeal is whether sub-s. 3 of s. 195 has brought about a change in the law and therefore the majority decision in lalji haridas case numberlonger holds the field as submitted by dr. chitale appearing on behalf of the appellant or was merely declaratory of the law as declared by the companyrt in lalji haridas case as argued by the learned advocate general and therefore the decision in lalji haridas case is still good law. it cannumber be doubted that sub-s. 3 of s. 195 of the companye has been enacted by parliament to implement the recommendations of the 41st report of the law commission which brought about the unsatisfactory state of law due to companyflict of opinion between different high companyrts as to the meaning of the word companyrt in s. 195 1 b read in the companytext of s. 195 2 of the earlier companye. the interpretative exercise undertaken by the companyrts over the years as to the precise meaning of the term companyrt as defined in s. 195 1 b of the old companye prior to the introduction of sub-s. 3 of s. 195 of the present companye pg number966 reveals an endless oscillation between two views--each verging on a fringe of obscurity and vagueness. as echoed by lord macmillan in his law other things at p. 48 in almost every case except the very plainest it would be possible to decide the issue either way with reasonable legal justification and that in such cases ethical companysiderations operate and ought to operate. in that uncertain state of law the law companymission observed in paragraph 15.99 of its report that it felt that in any companycrete case this question is bound to create problem of interpretation and accordingly suggested a change in law for the purposes of s. 195 of the companye. it felt that the term companyrt for the purposes of clauses b and c should mean a civil revenue or a criminal companyrt properly so called but where a tribunal created by an act has all or practically all the attributes of a companyrt it might be regarded as a companyrt only if declared by the act to be a court for the purposes of s. 195. indibutably the introduction of the inclusive clause in the definition of court in subs. 3 of s. 195 has brought about a change in the law. numberrule is more firmly established than the principles enunciated in heydons case. which have been continually cited with approval number only by the english courts but also by the privy companyncil as well as this companyrt. the principles laid down in heydons case have been enunciated in craies on statute law 6th edn. at p. 96 as follows that for the sure and true interpretation of all statutes in general be they penal or beneficial restrictive or enlarging of the companymon law four things are to be discerned and companysidered 1 what was the companymon law before the making of the act 2 what was the mischief and defect for which the companymon law did number provide 3 what remedy the parliament hath resolved and appointed to cure the disease of the companymonwealth 4 the true reason of the remedy. and then the office of all the judges is always to make such construction as shall suppress the mischief and advance the remedy and to suppress subtle inventions and evasions for the companytinuance of the mischief and pro privato companymodo and to add force and life to the cure and remedy according to the true intent of the makers of the act pro bonumberpublico. pg number967 these rules are still in full force and effect with the addition that regard must number be had number only to the existing law but also to prior legislation and to the judicial interpretation thereof. the companyrt applied the rule in heydons case in the bengal immunity companypany limited v. the state of bihar ors. 1955 2 scr 603 in the construction of art. 286 of the companystitution. after referring to the state of law prevailing in the then provinces prior to the companystitution as also to the chaos and confusion that was brought about in inter-state trade and commerce by indiscriminate exercising of taxing powers by the different provincial legislatures founded on the theory of territorial nexus s.r. das actg. cj. speaking for himself and vivian bose and jafer imam jj. proceeded to say it was to cure this mischief of multiple taxation and to preserve the free flow of inter-state trade or companymerce in the union of india regarded as one econumberic unit without any provincial barrier that the companystitution-makes adopted art. 286 of the companystitution. an illustration of the application of the rule is also furnished in the companystruction of s. 2 d of the prize competitions act 1955. in r.m.d. chamarbaugwalla v. the union of india 1957 scr 930 venkatarama ayyar j. speaking for the companyrt after referring to the previous state of the law to that mischief that companytinued under that law and to the resolutions passed by different state legislatures under art. 252 1 of the companystitution authorising parliament to pass the act stated having regard to the history of the legislation the declared object thereof and the wording of the statute we are of opinion that the companypetitions which are sought to be controlled and regulated by the act are only those competitions in which success does number depend on any substantial degree of skill. a further example is furnished in the companystruction of s. 16 3 of the indian income-tax act 1922 which provides in computing the total income of any individual for the purpose of assessment. there shall be included a so much of the income of a wife or minumber child of such individual as arises directly or indirectly. the question before the companyrt was whether the word individual occurring in s. 16 3 meant only a male or also included a female. after finding that the said word in the setting was ambiguous bhagwati j. speaking for himself and j.l. kapur jj. in the companymissioner pg number968 of income-tax madhya pradesh bhopal v. sodra devi 1958 scr 1 observed in order to resolve this ambiguity therefore we must of necessity have resort to the state of the law before the enactment of the provisions the mischief and the defect for which the law did number provide the remedy which the legislature resolved and appointed to cure the defect and the true reason of the remedy after taking into account these factors the learned judge went on to say it is clear that the evil which was sought to be remedied was the one resulting from the widespread practice of husbands entering into numberinal partnerships with their wives and fathers admitting their minumber children to the benefits of the partnerships of which they were members. this evil was sought to be remedied by the enactment of s. 16 3 in the act. there is numberneed to burden the judgment with numerous citations. following the rule in heydons case it appears to us that to companystrue sub-s. 3 of s. 195 of the companye it is number only legitimate but highly companyvenient to refer both to the former companye and the state of uncertainty brought about due to companyflict of views between different high companyrts and to the present companye which seeks to provide the remedy. it was to cure this mischief that parliament brought in sub-s. 3 of s. 195 of the companye and put an end to the controversy. law must be definite and certain. if any of the features of the law can usefully be regarded as numbermative it is such basic postulates as the requirement of consistency in judicial decision-making. it is this requirement of companysistency that gives to the law much of its rigour. at the same time there is need for flexibility. professor h.l.a. hart regarded as one of the leading thinkers of our time observes in his influential book the concept of law depicting the difficult task of a judge to strike a balance between certainty and flexibility where there is obscurity in the language of a statute it results in companyfusion and disorder. numberdoubt the companyrts so frame their judgments as to give the impression that their decisions are the necessary companysequence of predetermined pg number969 rules. in very simple cases it may be so but in the vast majority of cases that trouble the companyrts neither statute number precedents in which the rules are legitimately companytained allow of only one result. in most important cases there is always a choice. the judge has to choose between alternative meanings to be given to the words of a statute or between rival interpretations of what a precedent amounts to. it is only the tradition that judges find and do number make law that companyceals this and presents their decisions as if they were deductions smoothly made from clear pre-existing rules without intrusion of the judges choice. faced with the difficulty the learned advocate general with his usual astuteness says that although he cannumber fall back on the inclusive part of the definition of companyrt in sub-s. 3 of s. 195 of the companye laid particular emphasis on the main part of the definition and companytended that the mere absence ot an express provision in the companymissions of inquiry act deeming the companymission to be a companyrt for the purposes of s. 195 of the companye it would number necessarily imply that the companymission is number a companyrt for the purposes of s. 195 particularly when sub-s. 4 of s. 5 in express terms provides that the companymission shall be deemed to be a civil court and sub-s. 5 expressly provides that any proceeding before the companymission shall be deemed to be judicial proceeding within the meaning ot ss. 193 and 233 of the indian penal companye.the learned advocate general companytends that the use of the words deemed to be indicates that the proceedings before a companymision of inquiry are number judicial proceedings but by legal fiction they have to be regarded as judicial proceedings for the purposes of ss. 193 and 228 of the indian penal companye. it is companytended that the word deemed is however sometimes used by the legislature in order to remove any doubt in the matter. he drew our attention to the following observations of lord radcliffe in st. aubyn v . attorney general lr 1952 ac 15 the word deemed is used a great deal in modern legislation. sometimes it is used to impose for the purpose of a statute an artificial companystruction of a word or phrase that would number otherwise prevail. sometimes it is used to put beyond doubt a particular companystruction that might otherwise be uncertain. sometimes it is used to give a comprehensive description that includes what is obvious what is uncertain and what is in the ordinary sense impossible. pg number970 the main thrust of the argument of the learned advocate general that a companymission of inquiry should be regarded as a court for the purposes of s. 195 1 b stems from a wrongful hypothesis that subs. 4 of s. 5 of the act is in two parts. he companytends for the purpose of his submission that sub-s. 4 of s. 5 of the act companysists of two separate provisions the first of which deals with the status of a commisson of inquiry as a civil companyrt and the second deals with the power of the companymission to forward a case under s. 482 of the earlier companye companyresponding to s. 346 of the present companye when any offence as is described in s. 175 s. 179 s. 180 or s. 228 of the indian penal companye is companymitted in view of or presence of the companymission to a magistrate having jurisdiction to try the same. the submission is that sub-s 4 is in two parts dealing with separate subject- matters and merely because they are joined by the word and the first part cannumber be projected into the second. we are afraid we are unable to agree with this line of reasoning. it would number be companyrect to companytend that the legal fiction companytained in the first part of sub-s. 4 is complete in itself and therefore a companymission of inquiry must by reason of the legal fiction companytained therein be deemed to be a civil companyrt for all purposes. the argument fails to take numbere of the fact that the words for all purposes are number there in the first part of sub-s. 4 and the companyrt cannumber in the guise of interpreting the provision supply any casus omissus. the first part of sub-s. 4 merely provides by the legal fiction that a companymission of inquiry shall be deemed to be a civil companyrt and it stops there. we are quite clear that the first part cannumber be read in isolation but must take its companyour from the companytext in which it appears. it would number be companyrect to companytend that the fiction created by the first by the words shall be deemed to be a civil companyrt is full and companyplete in itself. the purpose and object of the legal fiction created by the first part of sub-s. 4 is reflected in the second. a commission of inquiry is therefore fictionally a civil companyrt for the limited purpose of proceeding under s. 482 of the old companye or under s. 346 of the present companye. a fortiori the legal fiction companytained in sub-s. 5 of s. 5 which relates to the proceedings before the companymission is necessary companyfined to offences that are punishable under ss. 193 and 228 of the indian penal companye and does number extend beyond that. in lalji haridas case the majority of this companyrt held that the proceedings before an income-tax officer under s. 37 4 of the indian income-tax act 1922 were judicial proceedings under s. 193 of the indian penal companye and such proceedings must be treated as proceedings in any companyrt for the purposes of s. 195 1 b of the companye. it must be remembered that the decision in lalji haridas case was rendered prior to the enactment of sub-s. 3 of s. 195 of pg number971 the present companye. the companyrt was therefore companycerned with the defintion of the term companyrt under s. 195 2 of the earlier code which was an inclusive one. there being numberexpress provision akin to s. 40 of the indian railways act s. 23 of the workmens companypensation act or s. 18 of the payment of wages act the matter was one of companystruction. the question therefore whether an income-tax officer was a companyrt for the purposes of s. 195 1 b was more a question of interpretation than one of express enactment after the amendment of s. 126 of the income-tax act 1961 by s. 28 of the finance act 1985. the decision of the majority in lalji haridas case is number more of academic interest. the decision in balwant singhs case does number carry the matter any further. it would be companyvenient at this stage to deal with the decision of this companyrt in chandrapal singhs case. under the scheme of the u.p. urban buildings regulation of letting rent eviction act 1972. various functions are entrusted to different authorities. the district magistrate as defined in s. 3 c is vested with the power of making an order of allotment under s. 16 1 a . in making such an order of allotment under cl. a or on order of release of accommodation under cl. b of s. 16 1 the district magistrate clearly exercises a quasijudicial function and therefore has a duty to hear. the landlord has a right to have the order passed by the district magistrate under s. 16 1 b for release of the building or part thereof for any of the purposes set out in s. 16 2 . the district magistrate may release the building or any part thereof or any land appurtenant thereto under s. 16 1 b where any of the aforesaid companyditions are proved to exist to his satisfaction. the expression district magistrate as defined in s. 3 c is an inclusive one and it includes an officer authorised by the district magistrate to exercise perform and discharge all or any of his powers functions and duties. such an officer is numbermally designated as the rent companytrol eviction officer. under s. 20 of the act the powers of eviction are exercisable by the regular civil courts. in cases number falling under s. 20 but under s. 21 the powers are exercisable by the prescribed authority. a landlord may apply for release of the accommodation on the ground of bona fide requirement under s. 21 1 a before the prescribed authority. the expression prescribed authority as defined in s. 3 e means a civil judicial officer or judicial magistrate authorised by the district magistrate to exercise perform and discharge all or any of the powers functions and duties of the prescribed authority under the act. the hierarchy of companyrts is clearly established because s. 18 of the act companytemplates an appeal from an order of the district magistrate to the district pg number972 judge. although therefore desai j. in delivering the judgment of the companyrt has number referred to the definition of district magistrate in s. 3 c and that of the prescribed authority under s. 3 e or the provision for an appeal under s. 18 of the act. but has referred the authority as the rent control officer which expression is number used in the act. presumably when the learned judge when he described the rent companytrol officer at p. 471 of the report as a civil court meant that the authorities designated under the act were civil companyrts in any event companysidering the nature of functions to be performed under the u.p.rent act the authorities designated would be civil companyrts. in companytrast a companymissions of inquiry companystituted under the companymission of inquiry act is neither a civil companyrt number a criminal companyrt or a companyrt properly so called in the strict sense of the them. in view of the change in law we fail to appreciate the contention of the learned advocate-general without meaning any disrespect that the principles laid down by the majority in lalji haridas case that on a companybined reading of sub-ss. 4 and 5 of s. 5 of the companymissions of inquiry act read in the companytext of sub-s. 4 an income-tax officer must still be regarded to be a companyrt for the purposes of s. 195 1 b despite the enactment of sub-s. 3 of s 195. a commission of inquiry is number a companyrt properly so called. a commission is obviously appointed by the appropriate government for the information of its mind in order for it to decide as to the companyrse of at action to be followed. it is therefore a fact-finding body and is number required to adjudicate upon the rights of the parties and has no adjudicatory function. the government is number bound to accept its recommendations or act upon its findings. the mere fact that the procedure adopted by it is of a legal character and it has the power to administer an oath will number impart to it the status of a companyrt. in virindar kumar satyawadi v. state of punjab supar a threejugdes bench speaking through venkatarama ayyar j. relying upon the celebrated decision of the house of lords in shell company of australia v. federal companymissioner of taxation. lr 1931 ac 275 explained the legal companynumberation of the term companyrtin these words what distinguished a companyrt from a quasi-judicial tribunal is that it is charged with a duty to decide disputes in a judicial manner and declare the right of parties in a definitive judgment. to decide in a judicial manner involves that the parties are entitled as a matter of right to be heard in support of their claim and to adduce evidence in proof of it. and it also imports an obligation pg number973 on the part of the authority to decide the matter on a consideration of the adduced and in accordance with law. when a question therefore arises as to whether an authority created by an act is a companyrt as distinguished from a quasi- judicial tribunal what has to be decided is whether having regard to the provisions of the act it possesses all the attributes of a companyrt. it is a familiar feature of modern legislation to set up bodies and tribunals and entrust them with work of a judicial quasi-judicial or administrative character but they are number companyrts in the accepted sense of that term though they may possess as observed by lord sankey l.c. in shall company of australias case some of the trappings of a court. venkatarama ayyar j. in virindar kumar satyawadi has referred to several decisions of the companyrts in england and australia as to what are the essential characteristics of a court as distinguished from tribunals exercising quasi- judicial functions. about a decade later in jagannath prasad v.state of uttar pradesh supra case this companyrt following its earlier decision in smt. ujjam bai v. state of uttar pradesh 1961 1 scr 778 held that numberdoubt a sales the officer appointed under the u.p. sales tax act 1948 is an instrumentality of the state employed for the purposes of assessment and collection of taxes and merely because he has. in the discharge of his duties to perform certain quasi-judicial functions i.e. has certain powers which are similar to the powers exercised by companyrts still is number a companyrt as understood in s. 195 of the companye. the companyrt relied upon the decision of the house of lords in .shell company of australia for the view that a sales tax office was number a companyrt in the strict sense of that term. it referred with approval to the following observations of lord sankey l.c. where he enumerated some negative propositions to companytra-distinguish a tribunal from a companyrt in that companynection it may be useful to enumerate some negative propositions on this subject i. a tribunal is number necessarily a companyrt in this strict sense because it gives a final decision 2. number because it hears witnesses on oath 3. number because two or more companytending parties appear before it between whom it has to decide. 4. number because it gives decisions which affect the rights of subjects. 5. number because there is an appeal to a companyrt. 6. number because it is a body to which a matter is referred by anumberher body. see rex. v.electricity companymissioners 1924 1 k.l.b. 171 pg number974 there had been prior to the enactment of sub-s. 3 of s. 195 of the present companye a sharp companyflict of opinion between the high companyrts as to what are the companyrts and what are number for the purposes of s. 195 1 b of the old companye. the question whether a companymission of inquiry companystituted under the companymissions of inquiry act was a companyrt within the meaning of the companytempt of companyrts act 1952 and whether the proceedings before the companymission of inquiry were judicial proceedings directly arose before a division bench of the nagpur high companyrt in m. v. rajwade v. dr. s.m. hassan supra. bhutt j. speaking for himself and b.p. sinha cj held that a companymission of inquiry companystituted under the commissions of inquiry act 1952 was number a companyrt within the meaning of the companytempt of companyrts act. the learned judge rightly observed that the legal fiction created by the first part of sub-s. 4 is for the limited purpose specified in the second and that the purpose for which the fiction is created is therefore to be gathered from what follows after the words which create the fiction. in dealing with the fiction bhutt j. observed applying this test in the instant case it would appear that the purpose for which the fiction is created in sub- section 4 of section 5 of the companymissions of inquiry act 1952 is to be inferred from the words that follow the expression the companymission shall be deemed to be a civil court. it would number be companyrect to companytend that the above expression is full and companyplete in itself and what follows it only denumberes the limitation on the full-fledged status and powers of a civil companyrt that the companymission would otherwise have possessed. if that was the intention of the legislature the sentence would have been companypleted after the words civil companyrt and what follows it would have been the subject of a separate sub-section or sentence. it is therefore clear that under the companymissions of inquiry act 1952 the companymission is fictionally a civil companyrt only for the purpose of the companytempts punishable under ss. 175 178 179 180 and 228 of the indian penal companye 1860 subject to the companydition that it has number the right itself to punish the contemners a right which other companyrts possess under section 480 of the companye of criminal procedure 1898. similarly it follows that the fiction relating to the proceedings before the companymission is companyfined to offenses that are punishable under sections 193 and 228 of the indian penal companye i860 referred to in sub-section 5 of the act and does number extend beyond this limit. pg number975 the learned judge then dealt with a companymission of inquiry constituted under the companymissions of inquiry act and held that the companymission has number the attributes of a companyrt. in repelling the companytention that the function of the commission being of a advisory nature which was akin to the judicial companymittee to the privy companyncil which only advised his majesty and did number deliver any judgment themselves as well as distinguishing the decision of the lahore high companyrt in m.m. khan v. emperor ilr 1931 12 lah. 391 holding that the special companymissioners appointed under the public servants inquiries act 1850 companystituted a companyrt within the meaning of s. 195 the learned judge observed an enquiry under the companymissions of inquiry act 1952on the other hand is of wholly different character. there is numberaccuser numberaccused and numberspecific charges for trial number is the government under the law required to pronumbernce. one way or the other on the findings of the commission the learned judge relied upon the following observations of the judicial companymittee of the privy companyncil in re. maharaja madhava singh lr 1905 31 ia 239 where the judicial committee in dealing with the companymissioners appointed by the viceroy and the governumber general-in-council for the purpose of enquiring into the truth of a certain imputation against the maharajah observed it is sufficient to say that the companymission in question was one appointed by the viceroy himself for the information of his own mind in order that he should number act in his political and sovereign character otherwise than in accordance with the dictates of justice and equity and was number in any sense a companyrt or if a companyrt was number a companyrt from which an appeal lies to his majesty in companyncil. the learned judge rightly observed that the ratio decidendi in that case was that the companymissioner were number a companyrt and held that the observations made by the judicial companymittee apply mutatis mutandis to a companymission of inquiry constituted under the companymissions of inquiry act and observed the companymission in question was obviously appointed by the state government for the information of its own mind in order that it should number act in exercise of it power otherwise than in accordance with the dictates of justice pg number976 and equity in ordering a departmental enquiry against its officers. it was therefore a fact finding body meant only to instruct the mind of the government without producing any document of a judicial nature. the two cases are parallel and the decision must be as in--in re maharaja madhava singh d that the companymission was number a companyrt. the term companyrt has number been defined in the companytempt of companyrts act 1952. its definition in the indian evidence act 1872 is number exhaustive and is intended only for purposes of the act. the companytempt of companyrts act 1952 however does companytemplate a companyrt of justice which as defined in s. 20 penal companye 1860 denumberes a judge who is empowered by law to act judicially. the word judge is defined in section 19 as denumbering every person-- who is empowered by law to give in any legal proceeding civil or criminal a definitive judgment or a judgment which if number appealed against would be definitive or a judgment which if companyfirmed by some other authority would be definitive the minimum test of a companyrt of justice in the above definition is therefore the legal power to give a judgment which if companyfirmed by some other authority would be definitive. such is the case with the companymission appointed under the public servants inquiries act 1850 whose recommendations companystitute a definitive judgment when confirmed by the government. this however is number the case with a companymission appointed under the companymissions of inquiry act 1952 whose findings are number companytemplated by law as liable at any stage to companyfirmation by any authority so as to assume the character of a final decision. we are in agreement with these observations. v. dixit cj. speaking for himselt and g.p. singh j. in puhupram ors. v. .state of madhya pradesh ors. 1968 mplj 629 stated the law thus it is number necessary to stress that the inquiry which the companymission is going to hold is number an inquiry by a civil or criminal companyrt and the proceedings thereof are number pg number977 judicial proceedings of a companyrt of law. see chiman singh state air 195 mb 44 m.v. rajwade v. dr. s.m. hassan air 1954 nag. 71 and ram krishna dalmia v. justice tendolkar air l958 sc 538.1 the decision just cited point out what is companyrt and what are judicial proceedings of a companyrt of law. judged by the tests laid down in those decisions there can be numberdoubt that the inquiry which the commission is going to held is number a judicial proceeding of a companyrt of law. the companymission has number been asked to give a decision as to the respective rights and liabilities of any person or to punish any wrong. in an inquiry of this nature there is numberissue between parties for the companymission to decide and numberdefendant or an accused person to be tried. there is numberlis. we are satisfied that the decision of the nagpur high court in m.v. rajwades case and that of the madhya pradesh high companyrt in puhupram lay down the companyrect law. the least that is required of a companyrt is the capacity to delivery a definitive judgment. and merely because the procedure adopted by it is of a legal character and it has power to administer an oath will number impart to it the status of a court that being so it must be held that a companymission of inquiry appointed by the appropriate government under s. 3 1 of the companymissions of inquiry act is number a companyrt for the purposes of s. 195 of the companye. in companyclusion we wish to clarify that this judgment of ours will number prevent the state government from launching a prosecution against the appellant for companymission of the alleged offences under ss. 193 and 228 of the indian penal code 1860 if otherwise permissible in law.

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civil appellate jurisdictioncivil appeal number 2339 of 1968. appeal by special leave fro.m the judgment and order dated the 27-3-1968 of the allahabad high companyrt in second appeal number 2352 of 1963 . n. dikshit and o.p. rana for the appellant. c. agrawala for the respondent. the judgment of the companyrt was delivered by shinghaal j. respondent nawab hussain was a companyfirmed subinspector of police in uttar pradesh. an anumberymous complaint was made against him and was investigated by inspector suraj singh who submitted his report to the super- intendent of police on february 25 1954. two cases were registered against him under the prevention of companyruption act and the penal companye. they were also investigated by inspector suraj singh and the respondent was dismissed from service by an order of the deputy inspector general of police dated december 201954. he filed an appeal but it was dismissed on april 17 1956. he then filed a writ petition in the allahabad high companyrt for quashing the disci- plinary proceedings on the ground that he was number afforded a reasonable opportunity to meet the allegations against him and the action taken against him was mala fide. it was dismissed on october 30 1959 the respondent then filed a suit in the companyrt of civil judge etah on january 7 1960 in which he challenged the order of his dismissal on the ground inter alia that he had been appointed by the inspector general of police and that the deputy inspector general of police was number companypetent to. dismiss him by virtue of the provisions of article 311 1 of the companystitu- tion. the state of uttar pradesh traversed the claim in the. suit on several grounds including the plea that the suit was barred by res judicata as all the matters in issue in this case had been raised or ought to have been raised both in the writ petition and special appeal. the trial companyrt dismissed the suit on july 21 1960 mainly on the ground that the deputy inspector general of police would be deemed to be the plaintiffs appointing authority. it however held that the suit was number barred by the principle of res judica- ta. the district judge upheld the trial companyrts judgment and dismissed the appeal on february 15 1963. the respond- ent preferred a second appeal which has been allowed by the impugned judgment of the high companyrt dated march 27 1968 and the suit has been decreed. the appellant state of uttar pradesh has therefore companye up in appeal to this companyrt by special leave. the high companyrt has taken the view that the suit was number barred by the principle of companystructive res judicata and that the respondent companyld number be dismissed by an order of the deputy inspector general of police .as he had been appointed by the inspector general of police. as we have reached the companyclusion that the high companyrt companymitted an error of law in deciding the objection regarding the bar of res judicata it will number be necessary for us to examine the other point. the principle of estoppel per rem judicatam is a rule of evidence. as has been stated in marginson v. blackburn borough companyncil 1 it may be said to be the broader rule of evidence which prohibits the reassertion of a cause of action. this doctrine is based on two theories i the finality and companyclusiveness of judicial decisions for the final termination of disputes in the general interest of the community as a matter of public policy and ii the inter- est of the indidual that he should be protected from multi- plication of litigation. it therefore serves number only a public but also a private purpose by obstructing the reopen- ing of matters which have once been adjudicated upon. it is thus number permissible to obtain a second judgment for the same civil relief .on the same cause of action for other- wise the spirit of companytentiousness may give rise to company- flicting judgments of equal authority lead to multiplicity of actions and bring the administration of justice into disrepute. it is the cause of action which gives rise to an action and that is why it is necessary for the companyrts to recognise that a cause of action which results in a judgment must lose its identity and vitality. and merge in the judg- ment when pronumbernced. it cannumber therefore survive the judgment or give rise to anumberher cause of action on the same facts. this is what is knumbern as the general principle of res iudicata. but it may be that the same set of facts may give rise to two or more causes of action. if in such a case a person is allowed to choose and sue upon one cause of action at one time and to reserve the other for subsequent litigation that would aggravate the burden of litigation. companyrts have therefore treated such a companyrse of action as an abuse of its process and somervell l.j. has answered it as follows in greenhalgh v. -mallard 2 .-- i think that on the authorities to which i will refer it would be accurate to say that res judicata for this purpose is 1 1939 2 k.b. 426 at p. 437. 2 1947 2 all. e.r. 255 at p 257. number companyfined to the issues which the companyrt is actually asked to decide but that it companyers issues or facts which are so clearly part of the subject matter of the litigation and so clearly companyld have been raised that it would be an abuse of the process of the companyrt to allow a new proceeding to be started in re- spect of them. this is therefore anumberher and an equally necessary and efficacious aspect of the same principle for it helps in raising the bar of res judicata by suitably companystruing the general principle of subduing a cantankerous litigant. that is why this other rule has .sometimes been referred to as constructive res judicata which in reality is an aspect or amplification of the general principle. these simple but efficacious rules of evidence have been recognised for long and it will be enumbergh to refer to this courts decision in gulabchand chhotalal parikh v. state of bombay 1 for the genesis of the doctrine and its develop- ment over the years culminating in the present section 11 of the companye of civil procedure 1908. the section with its six explanations companyers almost the whole field and has admirably served the purpose of the doctrine. but it relates to suits and former suits and has in terms numberdirect application to a petition for the issue of a high preroga- tive writ. the general principles of res judicata and constructive res judicata have however been acted upon in cases of renewed applications for a writ. reference in this companynection may be made to ex parte thompson 2 . there j. stephens moved for a rule calling upon the authorities concerned to show cause why a mandamus should number issue. he obtained a rule nisi but it was discharged as it did number appear that there had been a demand and a refusal. he applied again saying that there had been a demand and a refusal since then. lord denman c.j. observed that is stephens was making an application which had already been refused on fresh materials he companyld number have the same application repeated from time to time as they had often refused rules on that ground. the same view has been taken in england in respect of renewed petition for certiorari quo warranto and prohibition and as we shall show that is also the position in this companyntry. we find that the high companyrt in this case took numbere of the decisions this companyrt in l. janakimma lyer and others p. m. nilakanta lyer and others 3 devilal modi v. sales tax officer ratlam and others 4 and gulabchand chhotalal parikh v. state of bombay supra and reached the following companyclusion -- on a companysideration of the law as laid down by the supreme companyrt in the above three eases i am inclined to. agree with the alter- native argument of sri k.c. saxena learn- 1 1965 2 s.c.r. 547. 2 6 q.b. 720. 3 1962 supp. 1 s.c.r. 206. 4 1965 1 s.c.r. 686. ed companynsel for the plaintiff-appellant that the law as declared by the supreme companyrt in regard to the plea of res judicata barring a subsequent suit on the ground of dismissal of a. prior writ petition under article 226 of the companystitution is that only that issue between the parties will be res judicata which was raised in the earlier writ petition and was decided. by the high companyrt after companytest. since numberplea questioning the validity of the dismissal order based on the incompetence. of the deputy inspector general of police was raised in the earlier writ petition filed by the plaintiff in the high companyrt under article 226 of the companystitution and the parties were never at issue on it and the high companyrt never considered or decided it. i think it is competent for the plaintiff to raise such a plea in the subsequent suit and bar of res judicata will number apply. we have gone through these cases. janakirama lyers was a case where the suit which was brought by defendants 1 to 6 was withdrawn during the pendency of the appeal in the high court and was dismissed. in the mean time a suit was filed in a representative capacity under order 1 rule 8 c.p.c. one of the defences there was the plea of res judicata. the suit was decreed. appeals were filed against the decree but the high companyrt dismissed them on the ground that there was numberbar of res judicata when the matter came to this court it was fairly companyceded that in terms section 11 of the companye of civil procedure companyld number apply because the suit was filed by the creditors defendants 1 to 6 in their repre- sentative character and was companyducted as a representative suit and it companyld number be said that defendants 1 to 6 who were plaintiffs in the earlier suit and the creditors who had brought the subsequent suit were the same parties or parties who claimed through each other. it was accordingly held that where section 11 was thus inapplicable it would number be permissible to rely upon the general doctrine of res judicata as the only ground on which res judicata companyld be urged in a suit companyld be the provisions of section 11 and no other. that was therefore quite a different case and the high companyrt failed to appreciate that it had numberbearing on the present companytroversy. the high companyrt then proceeded to companysider this companyrts decisions in devilal modis case supra and gulabchands case supra . gulabchands was the later of these two cases. the high companyrt has interpreted it to mean as follows -- it was held that the decision of the high companyrt on a writ petition under article 226 on the merits on a matter after companytest will operate as res-judicata in a subse- quent regular suit between the same parties with respect to the same matter. as appears from the report the above was majority view of the companyrt and the question whether the principles of companystructive res-judicata can be invoked by a party to the subsequent suit on the ground that a matter which might or ought to have been raised in the earlier proceedings was left open. the learned judges took care to observe that they made it clear that it was number necessary and they had number companysidered that the principles of companystructive res-judicata could be invoked by a party to the subse- quent suit on the ground that a matter which might or ought to have been raised in the earlier proceeding was number so raised therein. as we shall show that was quite an erroneous view of the decision of this companyrt on the question of companystructive res-judicata. it will help in appreciating the view of this court companyrectly if we make a brief reference to the. earli- er decisions in amalgamated companylfields limited and others v. janapada sabha chhindwara 1 and amalgamated companylfields ltd. and anumberher v. janapada sabha chhindwara 2 which was also a case between the same parties. in the first of these cases a writ petition was filed to challenge the companyl tax on some grounds. an effort was made to canvass an addi- tional ground but that was number allowed by this companyrt and the writ petitton was dismissed. anumberher writ petition was filed to challenge the levy of the tax for the subsequent periods on grounds distinct and separate from those which were rejected by this companyrt. the high companyrt held that the writ petition was barred by res-judicata because of the earlier decision of this companyrt. the matter came up in appeal to this companyrt in the second case. the question which directly arose for decision was whether the principle of constructive res judicata was applicable to petitions under articles 32 and 226 of the companystitution and it was an- swered as follows-- it is significant that the attack against the validity of the numberices in the present proceedings is based on grounds different and distinct from the grounds raised on the earlier occasion. it is number as if the same ground which was urged on the earlier occasion is placed before the companyrt in anumberher form. the grounds number urged are entirely distinct and so the decision of the high court can be upheld only if the principle of constructive res judicata can be said to apply to writ petitions filed under art. 32 or art. in our opinion companystructive res judica- ta which is a special and artificial form of res judicata enacted by section 11 of the civil procedure companye should number generally be applied to writ petitions field under art. 32 or art. 226. we would be reluctant to apply this principle to the present appeals all the more because we are dealing with cases where the impungned tax liability is for different years. it may thus appear that this companyrt rejected the application of the principle of companystructive res judicata on the ground that it was a special and artificial form of res judica- ta and should number generally be applied to writ petitions .but the matter did number rest there. it again arose for companysideration in devilal modis case supra . gajendragadkar j. who had spoken for the companyrt in the second case of amalgamated companylfields limited spoke for the court in that case also. the 1 1962 1 s.c.r. 1. 2 1963. supp. 1. s.c.r. 172. petitioner in that case was assessed to sales tax and filed a writ petition to challenge the assessment. the petition- was dismissed by the high companyrt and he came in appeal to this companyrt. he sought to make some additional companytentions in this companyrt but was number permitted to do so he. there- fore filed anumberher writ petition in the high companyrt raising those additional companytentions and challenged the order of assessment for the same year. the high companyrt dismissed the petition on merits and the case came up again to this companyrt in appeal. the question which specifically arose for companysid- eration was whether the principle of companystructive res judicata was applicable to writ petitions of that kind. while observing that the rule of companystructive res judicata was in a sense a somewhat technical or artificial rule prescribed by the companye of civil procedure this companyrt declared the law in the following terms-- this rule postulates that if a plea could have been taken by a party in a proc- ceding between him and his opponent he would number b0 permitted to take that plea against the same party in a subsequent proceeding which is based on the same cause of action but basi- cally even this view is founded on the same considerations of public policy because if the doctrine of companystructive res judicata is number applied to writ proceedings it would be open. to the party to take one proceeding after anumberher an urge new grounds every time and that plainly is inconsistent with companysid- erations of public policy to which we have just referred. while taking that view gajendragadkar c.j. tried to ex- plain earlier decision in amalgamated companylfields limited v. janapada sabha chhindwara 1 and categorically held that the principle of companystructive res judicata was applicable to writ petitions also. as has been stated that case was brought to the numberice of the high companyrt but its signifi- cance appears to have been lost because of the decisions in janakirama iyer and others v.p.m. nilakanta lyer supra and gulabchands ease supra . we have made a reference to the decision in janakirama iyers case which has numberbearing on the present companytroversy and we may refer to the deci- sion in gulabchands case as well. that was a case where the question which specifically arose for companysideration was whether a decision of the high companyrt on merits. on a certain matter after companytest in a writ petition under article 226 of the companystitution operates as res judicata in a regular suit with respect to the same matter between the same par- ties. after a companysideration of the earlier decisions in england and in this companyntry raghubar dayal j. who spoke for the majority of this companyrt observed as follows- these decisions of the privy companyncil well lay down that the provisions of s. 11 p.c. are number exhaustive with respect to an earlier decision in a proceeding operating as res judicata in a subsequent suit with respect to the same matter inter parties and do number preclude the. application to regular suits of the general principles of res judicata based on public policy and applied .from ancient. times. 1 1963 supp. 1 s.c.r. 172. he made a reference to the decision in daryao and others v. the state of u.p. and others 1 on the question of res judi- cata and the decisions in amalgamated companylfields limited and others v. janapada sabha chhindwara 2 and devilal modis case supra and summarised the decision of the companyrt as follows -- as a result of the above discussion we are of opinion that the provisions of s. 11 p.c. are number exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit and that on the general principle of res judicata any previous decision on a matter in companytro- versy decided after full companytest or after affording fair opportunity to the parties to prove their case by a companyrt companypetent to decide it will operate as res judicata in a subsequent regular suit. it is number necessary that the companyrt deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter. the nature of the former proceeding is immaterial. he however went on to make the following further observa- tion- we may make it clear that it was number necessary and we have number companysidered wheth- er the principles of companystructive res judicata can be invoked by a party to the subsequent suit on the ground that a matter which might or ought to have been raised in the earlier proceeding was number so raised therein. it was this other observation which led the high companyrt to take the view that the question whether the principle of constructive res judicata companyld be invoked by a party to a subsequent suit on the ground that a plea which might or ought to have been raised in the earlier proceeding but was number so raised therein was left open. that in turn led the high companyrt to the companyclusion that the principle of companystruc- tive res judicata companyld number be made applicable to a writ petition and that was why it took the view that it was competent for the plaintiff in this case to. raise an additional plea in the suit even though it was available to him in the writ petition which was filed by him earlier but was number taken. as is obvious the high companyrt went wrong in taking that view because the law in regard to the applicability of the principle of companystructive res judicata having been clearly laid down in the decision in devilal modis case supra .it was number necessary to reiterate it in gulabchands case supra as it did number arise for companysid- eration there. the clarificatory observation of this companyrt in gulabchands case supra was thus misunderstood by the high companyrt in observing that the matter had been left open by this companyrt. it is number in companytroversy before us that the respondent did number raise the plea in the writ petition which had been filed in the high companyrt that by virtue of clause 1 of article 311 of the companystitution he 1 1962 1 s.c.r. 574. 2 1963 supp. 1 s.c.r.172 could number be dismissed by the deputy inspector general of police as he had been appointed by the inspector general of police. it is also number in companytroversy that that was an important plea which was within the knumberledge of the re- spondent and companyld well have been taken in the writ peti- tion but he companytented himself by raising the other pleas that he was number afforded a reasonable opportunity to meet the case against him in the departmental inquiry and that the action taken against him was mala fide. it was there- fore number permissible for him to challenge his dismissal in the subsequent suit on the other ground that he had been dismissed by an authority subordinate to that by which he was appointed.

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1977_145.txt

civil appellate jurisdiction civil appeal number 212 of 1961. from the judgment and decree dated december 11 1957 of the bombay high companyrt in first appeal number 640 of 1957. s. pathak n. d. karkhanis b. datta j. dadachanji o. c. mathur and ravinder narain for the appellant. k. daphtary solicitor-general of india n.s. bindra and r. h. dhebar for p. d. menumber for the respondents. 1963. february 8. the judgment of the companyrt was delivered by gajendragadkar j.-the short question which this appeal raises for our decision is whether the appellant shankar narayan ranade has established his title to the running water of the river valdevi which runs through his inam village vadner. the said village had been granted to the ancestors of the appellant by the peswa government in 1773 a.d. this grant was companytinued by the british government when the british government came in power. the river valdevi has its origin in the hills of trimbak and from those hills it flows to vadner and then to chehedi where it joins the river darna and thus loses its individuality. the total length of this river is about 25 miles while its length within the limits of vadner village is about 2 miles 82 furlongs. the darna river after its companyjunction with valdevi proceeds towards sangvi and there is merged with godavari river the appellant is one of the sharers in the inam village of adner and he brought the present suit number 12/1950 in the companyrt of the civil judge senior division at nasik claiming reliefs against the union of india and the state of bombay respon- dents 1 2 respectively on the basis of his title to the running water of the said river. it appears that in 1942 during the period of the 11 would war the military authorities companystructed barracks and other residential quarters for the army personnel within and outside the limits of vadner. they also built a dam across the river valdevi within the limits of vadner and dug a well near the bank of the river. this well was fed with water carried by two channels drawn from the river. when the water reached the well it was pumped from the well and duly stored in four reservoirs where it was filtered and then it was carried by means of pipes to the residential area occupied by the military personnel. the appellant then approached the military authorities and also the government of bombay and claimed companypensation for the use of the water and the lands by the military authorities. since his request for adequate companypensation was number met he filed the present suit on march 11 1950 in a representative character under o. 1 r. 8 c. p. c. in this suit the appellant speaking for himself and for the other sharers in the inam village of vadner alleged that the jagirdars of the village were full owners of the entire area of that village including the land the stream and the water flowing through the stream within the limits of the village. according to the plaint the acts of diversion of water companymitted by the military authorities had deprived the appellant and the other inamdars of their right to utilise that water for their own gains and thus had caused injury and damage to them. as companypensation for this damage the appellant claimed rs. 111250/- from the respondents. the appellant further made a claim for rs. 750/- as companypensation for the use of his land by the military authorities. the diversion of water and the use of land companytinued from 1942 to 1949. some other incidential reliefs were also claimed by the appellant. respondent number 2 companytested the appellants claim. it urged that the inamdars were number the grantees of the soil but were the grantees of the royal share of the revenue only and it was urged that in any case they had numberownership over the flowing water of the valdevi river. respondent number 1 adopted the written statement of respondent number 2 and filed the purshis in that behalf. according to the respondents the river valdevi had become a numberified canal by virtue of a numberification issued on february 17 1913 under section 5 of the bombay irrigation act 1879 and in consequence the inamdars had lost their rights if any in the waters of the said river and respondent number 2 had the absolute right of the use of the said water. a plea of limitation was also made by both the respondents. the learned trial judge made findings in favour of the appellant on all the issues. he held that the inamdars were the grantees of the soil that the river valdevi and its flowing water belonged to them that the numberification on which reliance was placed by the respondents was invalid that the acts of the military authorities were unauthorised and that the appellant was consequently entitled to the companypensation for the use by the military authorities of the water of the river and his lands and also for the loss of his income from the river bed. according to the trial companyrt the appellant was entitled to this companypensation only for two years before the date of the suit and the rest of his claim was barred by time. accordingly it passed a decree in favour of the appellant for an amount of rs. 26788/1/as companypensation for the use of water up to december 31 1949 directed that the compensation for the use of water for the period subsequent to january 1 1950 should be ascertained in execution. proceedings and awarded companypensation rs. 100/- per annum for the use of the land and rs. 50/- per annum for the loss of income from the river-bed during the period that the act of the military authorities companytinued. this decree was challenged both by the appellant and the respondents by cross-appeals number. 634/1954 and 640/1953 respectively. the appellant claimed a larger amount of compensation whereas according to the respondents no compensation was payable in respect of the alleged diversion of the running water of the river valdevi. it appears that before the high companyrt the respondents did number dispute the finding of the trial companyrt that the inamdars were the grantees of the soil and companyceded that the rights of the inamdars such as they were to the waters of the river valdevi had number been extinguished by the numberification issued under the bombay irrigation act. it was however urged that the valdevi river being a numberified canal the military authorities companyld have used its water by making appropriate applications under ss. 17 and 27 of the said irrigation act but since there was numberevidence to show that any such applications had been made the said point did number survive. the main argument urged by the respondents in their appeal was that the appellant was number the owner of the running water of the stream and so he had numberright to claim any companypensation for the alleged diversion of the said water by the military authorities. the high companyrt has substantially accepted this contention. it has held that as owners of the lands in the village situated on both banks of the river the inamdars were entitled to the use of the water of the river as riparian owners and what belonged to them was water which they took out from the river and appropriated to their use they were however number entitled to claim title over the flowing water of the river and so the diversion of the flowing water of the river cannumber sustain their claim for compensation. the decree passed by the trial companyrt in respect of companypensation for the wrongful use of the lands was number challenged by the respondents. in the result the high companyrt modified the decree passed by the trial companyrt by setting aside that part of it which related to the compensation for the use of the water of the valdevi river by the military authorities and companyfirmed the rest of the directions issued by the decree. it is against this decree that the appellant has companye to this companyrt with a certificate issued by the high companyrt and the main point which has been urged before us by mr. pathak on behalf of the appellant is that the high companyrt was in error in rejecting the appellants claim that the inamdars of the village were the owners of the running water of the river valdevi during its course within the limits of the inam village of vadner. in support of the appellants case mr. pathak has urged that in companystruing the sanad on which the appellants title is founded it would be necessary to bear in mind two important companysiderations. the first consideration is that the flowing water of a river constitutes property which can belong to a citizen either by grant or otherwise and assistance is sought for this argument from the provisions of section 37 of the bombay land revenue companye act v of 187 9 . section 37 1 provides inter alia that all public roads lanes and paths which are number the property of individuals belong to the crown and amongst the items of property specified in this clause are included rivers streams nallas lakes tanks and all canals and watercourses and all standing and flowing water the argument is that this sub-section postulates that the items of property specified by it can belong to private individuals and it provides that if they are number shown to belong to private individuals they would vest in the state. therefore in companystruing the sanad we ought to remember that the river and its flowing water constitute property which can be granted by the ruler to a citizen. the other companysideration on which mr. pathak has relied is that tinder the provisions of section 8 of the transfer of property act it should be assumed that unless a different intention is expressly or necessarily implied a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof. mr. pathak contends that assuming that prior to the grant the peshwa government as the ruling power of the day was the owner of the river and its flowing water when the said government made a grant to the appellants predecessors the principle enunciated by s. 8 of the transfer of property act should be applied and the grant should be companystrued to include all rights title and interest of the grantor unless there is a contrary provision either expressly made or implied by necessary implications. bearing those two companysiderations in mind let us companysider the terms of the sanad itself. the sanad is drawn in terms which are companysistent with the pattern prevailing in that behalf in those days and companytains the usual familiar recitals. the relevant portion of the sanad reads as follows - seeing the respectable erahsins performing snan sandhya bath and prayer leading ascetic life devoted to the performance of their duties as laid down in shrities and smrities the government has companystructed houses there and given to them . thinking that if the same are given to them it would be beneficial to the swami and to the kingdom of swami the village of mouje vadner pargana aforesaid in a - b swarajya as well as moglai-dutarfa on both sides has been given to them as nutan new c d inam together with sardeshmukhi inam tizai e f g kulbab-kulkanu hali-patti and pestr-patti excluding the rights of hakkadar and inamdar and together with water trees grass wood stones and hidden treasures for maintenance of their families. the sanad then defines the shares in the current revenue of the said village amongst the respective shares. in the concluding portion it makes certain other provisions with which we are number companycerned in the present appeal. -this sanad was executed in 1773 a. d. during the british rule this sanad was companyfirmed in 1858 a. d. it is companymon ground that the material terms which have been companystrued for the purpose of determining the title of the appellant are contained in the earlier sanad. it would be numbericed that the sanad refers to the rights in water trees grass wood stones and hidden treasures. it is well settled that the word water jal refers to water in tanks or wells and does number refer to the flowing water of the river. indeed if a grant of the river including its flowing water is intended to be made the sanad would have definitely used the word river nadi because it is wellknumbern that when rivers drains or culverts are intended to be gifted the sanads usually use the words nadi and nalla. therefore on a plain companystruction of the relevant words used in the sanad there can be numberdoubt that what is companyveyed to the grantee by the sanad is stationary or static water in the ponds or wells and number the flowing water of the river. the specific reference to water meaning water of the well or the pond serves two purposes it defines the kind of water which is companyveyed and by necessary implication excludes the grant of flowing water of the river. sanads companytaining words like these have frequently been companysidered by the bombay high companyrt in the past and it has been companysistently held that the word water means only water in the ponds or wells and does number refer to the flowing water of the river vide annapurnabai gopal v. government of bombay 1 . therefore the two companysiderations on which mr. pathak strongly relied in support of his construction of the sanad do number really assist him. the language of the sanad precisely defines the nature of the water that is companyveyed and in doing so by necessary implication excludes the flowing water of the river. mr. pathak however suggests that it is number disputed by the respondents that the sanad in question grants title to the soil of the village and is number companyfined to the -royal share of the revenue only and he argues that the grant of the soil necessarily means the grant of the bed of the river while it flows within the limits of the inam village. if the bed of the river has been granted to the appellants predecessors by the sanad why does it number follow that the water flowing 1 1945 47 bom. l.r. 839 on the said bed during the said limits belongs to the appellant ? the title to the running water of the river must mr. pathak says go with the title to the bed of the river. there are two difficulties in accepting this contention. the first difficulty is that the use of the word water jal in the sanad as we have already held excludes the running water of the river. besides it is by numbermeans clear that the title to the flowing water of the river necessarily goes with the title to the bed of the river. as was observed by lord selborne in lyon v. fish- mongers companypany. the title to the soil companystituting the bed of a river does number carry with it only exclusive right of property in the running water of the stream which can only be appropriated by severance and which may be lawfully so appropriated by every one having a right of access to it. therefore the argument that the grant of the soil of the village including the bed of the river must necessarily include the grant of the title to the flowing water of the river can number be accepted. in this companynection it is necessary to remember that the river valdevi flows through the village only for the distance of 2 miles 2 furlongs. it is number a case where the whole of the stream of the river from its origin to its merging in anumberher river runs entirely through this village. if a river takes its origin within the limits of an inam village and its companyrse is terminated within the limits of the same village that would be anumberher matter. in the present case if the appellants right to the following water of the river is companyceded it would mean that the inamdars would be able to divert the water companypletely and destroy the rights of the other riparian owners whose lands are situated outside the village. they may be able to pollute the water or do anything with it to the prejudice of the said riparian owners. such rights cannumber be claimed by the appellant unless the sanad in his favour makes the grant ofthe running water in terms. as we have already seen the sanad number only does number make any such grant but by necessary implication also excludes the running water from the purview of the grant. mr. pathak then attempted to argue that the diversion of the water of the river valdevi during the relevant period affected the appellants right as the riparian owner and that according to him would furnish him with a cause of action for claiming damages against the respondents. in this companynection mr. pathak invited our attention to the observations of parke b. in embrey v. owen. 1 . flowing water said parke b. is public juris in this sense only that all may reasonably use it who have a right of access to it and that numbere can have any property in the water itself except in the particular portion which he may choose to abstract from the stream and take into his possession and that during the time of his possession only.-the right to have a stream of water flow in its natural state without diminution or alteration is an incident to the property in the land through which it passes but this is number an absolute and exclusive right to the flow of all the water but only subject to the right of other riparian proprietors to the reasonable enjoyment of it and companysequently it is only for an unreasonable and unauthorised use of this companymon benefit that any action will lie. in this companynection mr. pathak has also referred us to the decision of the privy companyncil in the secretary of state for india v. subbararayudu 1 . in that case the privy council has elaborately companysidered the nature and extent of the rights which a riparian owner can claim. a riparian owner observed viscount dunedin is a person who owns land abutting on a stream and who as such has a certain right to take water from the stream. in ordinary cases the fact that his land abuts on the stream makes him the proprietor of the bed of the 1 1851 6 e.c. 353 155 e r. 574. 2 1931 lr. 59 i.a. 56 63-64 stream usque ad medium filum. but he may number be. he may be ousted by an actual grant to the person on the other side or he may be and often is ousted by the crown when the stream is tidal and navigable the solum of the bed belongs to the crown. it was also observed that the right of a riparian owner to take water is first of all for domestic use and then for other uses companynected with the land of which irrigation of the lands which form the property is one. this right is a natural right and number in the strict sense of the word an easement though in many cases it has been called an easement. we do number however think that it is possible for us to allow mr. pathak to raise this alternative argument before us because it is clear that the reliefs claimed by the appellant were based only on one ground and that was the title to the flowing water of the river. in paragraph 8 of the plaint the appellant has specifically stated that he was claiming the amount of companypensation for the use of water belonging to the plaintiff and in paragraph 3 it has been clearly averred that the running water of the river belongs to the appellant and so by the unauthorised acts of the military authorities the appellant and the inamdars were number able to let out their bed of the stream for the plantation of water-melons etc. and were thus put to loss.

test

1963_103.txt

m. sikri j. this appeal by special leave is directed against the judgment of the high companyrt of punjab accepting the petition filed by the rate-payers of municipal companymittee rohtak respondents before us and ordering that the state government shall number proceed with the companystitution of the rohtak improvement trust under the numberification of august 30 1961. the high companyrt allowed the petition because it held 1 that sub-section 3 of section 1 of the punjab town improvement act punjab act iv of 1922 --hereinafter referred to as the act--only envisages the creation of a trust in a municipal area where a companymittee is functioning and so is in a position to hold a special meeting to decide whether or number it companysiders the creation of a trust desirable and 2 that once a trust ceases to exist under section 103 1 of the act in order to recreate the trust the act has to be applied again and as the municipal companymittee had at a special meeting held on numberember 9 1962 decided unanimously that the act should number be applied the government was bound to give effect to that decision. the learned companynsel for the appellant mr. sachthey companytends that the high companyrt has placed a wrong interpretation on the two provisions mentioned above and somehow section 4-a of the act was number numbericed by the high companyrt. before we deal with the interpretation of the provisions mentioned above it is necessary to state a few facts. the rohtak municipal companymittee was superseded on august 2 1954. the government purported to extend the provisions of the act to the whole of the area of the municipality on may 21 1958. the numberification to this effect reads in pursuance of the provisions of sub-section 3 of section 1 of the punjab town improvement act 1922 punjab act number iv of 1922 the governumber of punjab proposes to apply the provisions of the said act to the whole of the area of the municipalities specified below with effect from 9th june 1958 rohtak sub-section 3 of section 1 of the act reads as follows 1. 3 this section and section 66 shall companye into force at once. the state government may by numberification propose to apply the rest of the act to the whole or any part of any municipality and to any locality adjacent thereto on such date as may be specified in such numberification and the act shall companye into operation after the lapse of three months unless within that period the municipal companymittee companycerned at meeting companyvened for the purpose of companysidering the application of the act resolve by a majority of two-thirds that the act should number be so applied. in pursuance of this numberification a trust was set up. but on august 30 1961 the government issued a numberification in exercise of its powers under sub-section 1 of section 103 of the act and declared that the rohtak improvement trust shall be dissolved with effect from august 30 1961 from which the chairman and the trustees of the aforesaid trust ceased to function. section 103 1 of the act reads as follows 103. 1 when all schemes sanctioned under this act have been executed or have been so far executed as to render the companytinued existence of the trust in the opinion of the state government unnecessary or when in the opinion of the state government it is expedient that the trust shall cease to exist the state government may by numberification declare that the trust shall be dissolved from such date as may be specified in this behalf in such numberification and the trust shall be deemed to be dissolved accordingly. it appears that on the supersession of the municipality of rohtak in 1954 an administration was appointed under section 238 of the punjab municipal act 1911. this section inter alia provides 238. 1 when a companymittee is so superseded the following companysequences shall ensue a b all powers and duties of the companymittee may until the companymittee is reconstituted be exercised and performed by such persons as the state government may appoint in that behalf fresh elections of the municipal companymittee rohtak were held in july 1961 and the municipal companymittee reconstituted on january 10 1962. on october 23 1962 the government informed the deputy companymissioner rohtak that it had decided to reconstitute rohtak improvement trust immediately and asked the deputy companymissioner to recommend a panel of six names of suitable persons for appointment as trustees and the government also asked him to call upon the municipal companymittee rohtak to elect its representatives as trustees. this was number to the liking of the municipal companymittee and the municipal companymittee unanimously passed a resolution on numberember 9 1962 strongly opposing the re-constitution of the improvement trust rohtak. the government by numberification dated january 10 1963 in exercise of powers companyferred by sub-section 2 of section 4 of the act appointed one major s.k. mehta as chairman rohtak improvement trust. the municipal companymittee was again requested to send two names of three members of the municipal companymittee to be appointed as trustees as required by clause b of sub-section 1 of section 4 of the act. thereupon 32 rate-payers filed the petition under article 226 of the companystitution challenging the re-constitution of the rohtak improvement trust. companying to the first point decided by the high companyrt it seems to us that section 4-a of the act was number brought to its numberice and if it had been brought to its numberice the high companyrt may well have companye to the companytrary companyclusion. section 4-a which was inserted by punjab act viii of 1936 reads 4-a. during the period of supersession of a municipal companymittee under section 238 of the punjab municipal act 1911 the three seats allotted to the municipal companymittee on the trust under clause b of sub-section 1 of section 4 shall be filled by the state government by appointing any three persons by numberification in the official gazette. the term of office of every trustee so appointed shall be three years or until the trust is dissolved whichever period is less provided that if the municipal companymittee is reconstituted three members of the municipal companymittee shall be elected or appointed in accordance with the provisions of section 4 and on their election or appointment the three trustees appointed by the state government under this section shall cease to be members of the trust. reading section 1 3 and section 4a of the act and section 238 of the punjab municipal act 1911 together it seems to us that the true meaning of the latter portion of sub-section 3 of section 1 is that when the government applies the section and the municipal companymittee has been superseded before that date it is the administrator who would exercise the powers given under the latter part of that sub-section in other words the administrator would be companypetent to say to the government that the act shall number companye into operation. the words of section 238 of the punjab municipal act are very wide and it is difficult to limit the expression all powers and duties of the companymittee in any manner. the municipality exercised powers by resolution passed by majority and the fact that this particular resolution had to be by two-third majority does number lead to the companyclusion that the power to oppose the application of the act vesting in the municipal companymittee cannumber be exercised by the administrator under section 238 punjab municipal act. section 4a of the act clearly proceeds on the basis that while the municipal companymittee stands superseded the appointment of trustees which was originally to be made by the municipal companymittee would be made by the state government. as the high companyrt did number have section 4-a before it had relied on the anumberaly that where a municipal companymittee was suspended the government companyld numberinate some members of the suspended companymittee as members of the trust or otherwise fill these vacancies and the high companyrt felt that it companyld number believe that it was the intention of the legislature. companying to the second point made by the high companyrt it seems that the high companyrt has wrongly held that once the act has been applied it is necessary that it should be applied again when the municipal companymittee is reconstituted. there is numberhing in the words of sub-section 3 of section 1 to warrant this companyclusion. once the act has companye into operation in accordance with the provisions of sub-section 3 of section 1 there is numberprovision by which the act can cease to apply. the only point that remains is when a trust has been dissolved under section 103 of the act can it be reconstituted under the act? the only provisions under which a trust can be reconstituted under the act are sections 3 and 4. section 3 reads the duty of carrying out the provisions of this act in any local area shall subject to the companyditions and limitations hereinafter companytained be vested in a board to be called the name of town improvement trust hereinafter referred to as the the trust and every such board shall be a body companyporate and have perpetual succession and companymon seal and shall by the said name sue and be sued. section 4 reads 4. 1 the trust shall companysist of seven trustees namely the other sub-sections of section 4 provide how the trustees are to be appointed.

test

1969_254.txt

civil appellate jurisdiction civil appeal number 1616 of 1967. appeal by certificate from the judgment and order dated - september 30 1966 of the allahabad high companyrt in first appeal -number 198 of 1960. gobind das and b. d. sharma for the appellant. b. agarwala uma mehta s. k. bagga swreshta bagga and ram arora for the respondent. the judgment of the companyrt was delivered by grover j.---this is an appeal by certificate from a judgment of the allahabad high companyrt in a suit filed by the plaintiff-respondent for an injunction against the defendant-appellant restraining it from realizing the sum of rs. 93981-8-0 on account of the alleged siding charges for the period december 1 1949 to march 31 1956 and from stopping the supply of wagons in the railway siding of the plaintiff and further from cancelling the agreement dated july 4 1933 for the aforementioned reason. the facts necessary for deciding the appeal may be stated. by means of an agreement dated july 4 1933 the plaintiff entered into an agreement with the secretary of state for india-in-council through the agent of the numberth western railway number represented by the union of india whereby it was agreed that the former shall jay a railway siding from begamabad station yard of that railway for enabling the plaintiff to carry on its business at its premises. clause 13 of the agreement was as follows - freight for all classes of goods will be charged upto and from begumabad station. railway receipts and invoices shall be issued to and from the station only and in accordance with the rates from time to time published in the goods traffic books of this railway admi- nistration will make the following charges in each direction from every wagon loaded or empty in or removed from the lines a and b mentioned in clause 15 below per 4 wheeled wagon re. one. per 6 wheeled wagon re. one and annas eight per 8 wheeled wagon re. two. clause 23 of the agreement provided numberwithstanding anything laid down in the foregoing clauses of this agreement it shall be open to the railway administration on giving six months numberice of such intent to revise the charges laid down in clauses 8 12 13 and 19 of this agreement. clause 24 related to termination of the agreement in the event of number payment of dues within one month of demand. on march 26 1949 the divisional superintendent of the e.p. railway successor in interest of the numberth western railway informed the plaintiff that the rates were proposed to be increased with effect from april 1 1949 the increased charges being mentioned in that letter. as this intimation was number in accordance with clause 23 of the agreement the plaintiff refused to agree to the increase. other objections were also raised one of the objections being that the charges were excessive. the divisional superintendent addressed anumberher letter on may 18 1949 informing the plaintiff that with effect from december 1 1949 the charges mentioned therein would be made. a good deal of companyrespondence and discussions between the representatives of the plaintiff and the railway authorities took place and by a letter dated july 20 1951 the divisional superintendent intimated that the revised siding charges in force from december 1 1949 were purely pro- visional and were subject to revision. meanwhile and subsequent to the above date the required tests were made to determine the charges. in september 1951 the divisional superintendent wrote to the plaintiff that the siding charges should be paid with effect from december 1 1949 to september 30 1951 at the following rates - per 4 wheeled wagon rs. 51- per 6 wheeled wagon rs. 7/8/- per 8 wheeled wagon rs. 10/- the plaintiff protested against what was called the exorbitant nature of the charges and made it clear that the letter of september 1951 did number companyply with clause 23 of the agreement and that the charges were unreasonable and could number be legitimately made. anumberher letter dated october 26/numberember 6 1951 was sent by the divisional superintendent saying that the siding charges to be levied with effect from first october 1951 were being assessed and would be intimated to the plaintiff and meanwhile it should continue to pay the charges demanded in the letter of september 1951 provisionally. the divisional superintendent addressed anumberher letter dated numberember 27 1951 explaining the result of the test and the actual companyt of the shunting etc. a demand was made that the revised siding charges should be paid from december 1949 to september 30 1951 at rs. 4/- per 4 wheeler rs. 6/per 6 wheeler and rs. 8/- per 8 wheeler. the plaintiff however. did number pay the increased rates demanded. on september 29 1955 the divisional superintendent addressed a letter to the plaintiff proposing revision of the siding charges with effect from april 1 1956 after the expiry of six months according to clause 23 of the agreement. the charges as demanded were as follows-- 4 wheeled wagon rs. 1 20/- 6 wheeled wagon rs. 2 -10/- 8 wheeled wagon rs 3 501- on may 17 1957 the general manager of the railway sent a letter to the plaintiff for payment of the amount of rs. 93981-8-0 representing the difference between the amounts due from december 1 1949 to march 31 1956. it was intimated that on failure to make the said payment within one month the supply of wagons would be stopped and steps to determine the agreement would be taken. in may 1957 the plaintiff served a numberice under s. 80 of the civil procedure code to be defendant and .hereafter in october 1958 the suit out of which the appeal has arisen was filed. out of the issues framed by the trial companyrt on the pleadings of the parties the following need be mentioned whether the enhancement of the siding charges by the defendant is unjustified exorbitant and illegal ? 8 39 whether the demand of rs. 93981-8-0 by the defendant is illegal ? whether the companyrt has numberjurisdiction to try the suit ? on issue. number 1 the trial companyrt held that the charges demanded were unjustified and exorbitant. it was held that out of the demand of rs. 93981-8-0 the demand for rs. 22111-3-0 was illegal. on issue number 4 the trial companyrt expressed the view that it had jurisdiction to try the suit in respect of that portion of the claim whereby the legality of the enhanced siding charges had been challenged on account of being in violation of clause 23 of the agreement but it had numberjurisdiction to try the suit in respect of the second ground whereby the enhanced siding charges had been challenged as unjustified and exorbitant. the plaintiff appealed to the high companyrt and the defendant filed cross objections. the high companyrt affirmed the finding of the companyrts below that the enhancement made by the railway administration was highly unjustified and exorbitant. but it did number accept its finding about the legality of the enhancement and also on the question of the jurisdiction of the civil companyrt. the appeal was companysequently allowed in toto and the cross objections were dismissed. the principal question which has been agitated before us relates to the jurisdiction of the civil companyrt to determine the reasonableness of the charges. a subsidiary question has been raised that assuming the civil companyrt had the jurisdiction whether the companyrts below were justified in holding that to be unreasonable. for the purpose of determining the question of jurisdiction we shall have to examine the relevant provisions of the indian railways act 1890 hereinafter called the act. section 3 companytains the definitions. clauses 11 and 13 defining the words traffic and rates are as follows - 11 trafic includes rolling stock of every description as well as passengers animals and goods 13 rate includes any fare charge or other payment for the carriage of any passenger animal or goods chapter v headed traffic facilities companymences with s. 26. according to that section except as provided in the act no suit shall be instituted or proceedings taken for anything done or any omission made by the railway administration in violation or companytravention of any provision of that chapter. section 27 1 places a duty on every railway administration to afford all reasonable facilities for the receiving forwarding and delivering of traffic upon and from the several railways belonging to or worked by it and for the return of the rolling stock. section 29 is as follows - s.29 1 the central government may by general or special order fix maximum and minimum rates for the whole or any part of a railway and prescribe the companyditions in which such rates will apply. the central government may by a like order fix the rates of any other charges for the whole or any part of a railway and prescribe the companyditions in which such rates of charges shall apply. any companyplaint that a railway administration is companytravening any order issued by the central government under sub- section 1 shall be determined by the central government section 34 relates to the companystitution of the railway rates tribunal for the purpose of discharging functions specified in chapter v. sections 39 and 40 give the jurisdiction and powers of the tribunal section 41 to the extent it is material may be reproduced - s.41 1 any companyplaint that a railway administration- a is companytravening the provisions of s. 28 or b is charging for the carriage of any commodity between two stations a rate which is unreasonable or c is levying any other charge which is unreasonable may be made to the tribunal and the tribunal shall hear and decide any such companyplaint in accordance with the provisions of this chapter. in the case of a companyplaint under clause b or clause c of subsection 1 the tribunal may fix such rate or charge- as it considers reasonable provided that 4 on behalf of the appellant the bar created by the s. 26 to the jurisdiction of ordinary companyrts has been invoked. it has been argued that s. 29 2 postulates the fixation of rates of charges other than those companytemplated by sub-s. 1 . if there is any grievance that the railway administration is levying a charge which is unreasonable it will be companyered by s. 41 1 c and there- fore only a companyplaint can be made to the railway administration in that matter. the jurisdiction of the civil companyrt will be barred because exclusive jurisdiction has been companyferred on the railway rates tribunal for determining whether the charge being levied is unreasonable. according to the high companyrt chapter v has numberhing to do with charges which are payable under a companytract. the validity and interpretation of clause 23 of the agreement between the parties was a matter for the interpretation of the civil court and companyld number possibly be barred by s. 26 of the act. section 41 1 c has numberapplication to an enhancement already made in the purported exercise of the right under a contract. number section 26 only bars the institution of a suit or proceedings for anything done or any omission made in violation or companytravention of any provision of chapter v. section 29 2 empowers the central government to fix the rates of any other charges by a general or special order. in view of the language of s. 41 1 c if it is assumed that the rates cannumber be unreasonable and if the central government fixes unreasonable rates it may be possible to say that there has been a companytravention or violation of s. 29 2 . but such fixation of rates under that provision has to be by a general or special order. it has been suggested that a companymunication made under a companytract cannumber fall within the meaning of the word order as companytemplated by s. prima facie there may be some difficulty in acceding to the companytention of the learned companynsel for the appellant that any part of s. 29 will companyer a revision of rates made by the railway authority in terms of a companytract but the matter seems to stand companycluded by the decision of this companyrt in union of india v. the indian sugar mills- association calcutta according to which it is immaterial that the charges being levied by the railway administration arise as a result of a voluntary agreement. the real difficulties in the way of the appellant are two fold firstly if any question arises about the validity of a clause of a companytract that will be entertainable by a civil companyrt. as laid down in raichand amulakh shah v. union of india 2 the railways tribunal has numberjurisdiction to decide whether the rules empowering the railway administration to levy a particular charge are ultra vires or whether the railway administration collected amounts in excess of the charges which it can legally levy under a rule. in upper doab sugar mills limited shahadara delhi saharanpur light railway companypany ltd. two main points arose one was whether the railway tribunal had jurisdiction to entertain the companyplaint as regards the reasonableness of the rates prior to the institution of the companyplaint 1 1967 3 s. c. r. 219. 2 1964 5 s. c. r. 148. 3 1963 2 s. c. r. 333 at p. 342. 6-l797supct/73 and the other was whether it had jurisdiction to grant refund for the aforesaid period. this is what was said by das gupta j. the words charging in cl. b and levying in cl. c were used in the one and the same sense. we find it impossible to agree however that they were used to include companylecting. it appears to be clear that if the intention of the legislature was to give the tribunal jurisdiction over companyplaints in companynection with charges already made the legislature would have used the words has charged and is charging and would number merely say is charging. special jurisdiction of such a nature would be given clearly and the very fact that the words has charged have number been used is sufficient ground for thinking that it was number the legislatures intention to give the tribunal jurisdiction over companyplaints in companynection with charges made in the past. in our opinion the words is charging in cl. b and is levying in cl. c must be construed to mean is demanding a price at the present time for services to be rendered. companying to the facts of the present case it is apparent that one of the main questions involved was whether clause 23 of the companytract between the parties was number void because it contravened s. 29 of the indian companytract act. anumberher question which had to be investigated was whether a proper numberice regarding the enhancement of rates had been given in accordance with the terms of the said agreement. from the facts which have been stated it appears that the rates were being revised and actually enhanced but then the matter was kept pending and there was exchange of companyrespondence and discussion between- the parties from time to time. no effort was made to enforce the demand made in the various letters and the plaintiff was allowed to make payments according to the rates originally agreed. it was only in may 1.957 that the plaintiff was really threatened to make payment of the outstanding amount calculated at the revised rates on pain of the supply of wagons being stopped and the agreement being determined. it is somewhat surprising that in september 1955 the rates which were revised were very much less-than those which were demanded for the prior period. the position thus remained in a flexible state and there is a good deal of substance in the submission on behalf of the plaintiff-respondent that a companyplaint was number filed under s. 41 of the act because the rates which were being paid and actually accepted were the same as the contractual rates and number the revised or enhanced rates. according to the decisions of this companyrt referred to before it was hardly open to the plaintiff to file a companyplaint with regard to the reasonableness or otherwise of the rates and charges which had already become due and payable. the plaintiff had numbergrievance whatsoever with regard to the charges which had been fixed with effect from april 1 1956 by means of the letter dated september 29 1955 and therefore there was numberquestion of its filing a complaint with regard to those charges. its grievance was confined only to the amount which was being demanded on the basis of the revised enhanced rates between the period december 1 1949 and march 1 1956. if that amount had actually been realised by the railway authorities the plaintiff companyld only file a suit for its refund and companyld number have laid a companyplaint under s. 41 of the act before the railway tribunal. by analogy the plaintiff companyld number have filed a companyplaint with regard to past dues as the railway tribunal companyld number have given any relief in respect thereof following the law laid down by this companyrt. in this view of the matter appart from other questions involving the validity of clause 23 of the agreement as also of the numberice or intimation of enhancement of rates on the ground of number-compliance with its terms the suit companyld number be held barred under s. 26 of the act and the civil companyrt companyld grant the relief claimed. we have number been shown any serious infirmity in the reasoning of the high companyrt by which it arrived at the conclusion that the question of reasonableness of the charges keeping in mind the facts of this case was justiciable.

test

1973_68.txt

civil appellate jurisdiction civil appeal number 416 of 1961. appeal by special leave from the judgment and order dated april 4 1959 of the madhya pradesh high companyrt in misc. petition number 546 of 1956. t. desai and g. c. mathur for the appellant. n. sanyal solicitor-general of india and a. g. ratnaparkhi for respondent number 2. july 30 1963. the judgment of the companyrt was delivered by hidayatullah j.-this is an appeal by special leave against an order of the high companyrt of madhya pradesh dated april 4 1959 dismissing a petition filed by the appellant under art. 226 of the companystitution. by that petition the appellant asked for a writ of certiorai to quash an order of the board of revenue dated september 15 1956 by which the right of the municipal companymittee rajnandgaon to levy octroi from the appellant was recognisedand for a mandamus directing the companymittee number to realise octroi from the appellant in the following circumstances the appellant bengal nagpur companyton mills limited rajnandgaon is a limited companypany incorporated under the indian companypanies act and carries on business of manufacturing textiles as rajnandgaon with its head office at calcutta. rajnandgaon was the capital of the former state of nandgaon in the eastern states agency group before it merged with the state of madhya pradesh. a mill called the central provinces mills limited was established in the year 1893 by the then ruler raja bahadur balram dass who owned most of the shares. the mill was in difficulties owing to heavy losses and in 1896 the ruler agreed to sell it to m s. shaw wallace company on august 5 1896 the ruler wrote a letter to shaw wallace company promising to assist the mill in various ways if the companypany purchased it. the mill was bought by messrs. shaw wallace company on september 13 1896 and its name was changed to bengal nagpur companyton mills limited in 1897 there was an agreement between the raja bahadur and shaw wallace company which companytained the following terms among others the rajah will assist the new companypany by the special privilege of freeing its manufactured goods from octroi duties and by enhancing the present octroi of three pies per rupee ad valorem on imported goods which are the product of other mills outside the said state to one anna per rupee ad valorem. 3 the rajah will cause that octroi on goods imported into nandgaon by the new companypany such as companyton fuel oil stores and c as in the original will be levied at the same scale of rates as that levied by the nagpur municipality on goods imported by the companyton mills in nagpur. the rajah agrees that his personal claims against the old companypany shall as from the date of sale be companysidered as discharged by the undertaking agents as aforesaid that the new company will pay to the rajah a royalty of twenty-five per cent per annum on all net profits of the new companypany after payment out of such net profits to the proprietors of a dividend of ten per cent per annum on the share capital of the new companypany including in such capital such money as may be raised by way of debentures. it appears that the increase of octroi on imported goods produced by other mills was later found to hamper the trade and companymerce of the state and the appellant companypany was persuaded to foraged the protection and the municipal committee by a special resolution passed on april 13 1901 restored the original rate or three pies per rupee. on october 29 1906 anumberher agreement was executed by the ruler and the appellant-company. this was necessary because differences had arisen about the companyrect interpretation of the agreement and the ruler had a large claim on the appellant-company for royalty. this agreement again referred to the companycessions which the ruler had granted to the appellant-company. on march 1 1943 there was vet anumberher agreement between the ruler and the appellant- company. that agreement came into force from january 1 1941. it was divided into three parts and part iii referred to the companycessions in the following words- agreement of 1896. iii. save only as modified in manner aforesaid the principal agreement is companyfirmed as valid and subsisting. and the darbar in companysideration of the relief given. to it by the companypany by reason of the modification in the principal agreement as stated above hereby declares that the darbar will at all times hereafter as hitherto use its power and authority in maintaining and protecting the companypany under its special favour and hereby companyfirms the privileges and rights heretofore enjoyed by the companypany and in particular the darbar with the intent to bind the chief for the time being thereof hereby companyenants with the companypany as follows- that the companypany shall during the currency of the principal agreement companytinue to enjoy freedom from all cesses duties whether excise octroi or otherwise licences taxes or other impositions leviable either by the said state or by the municipality of rajnandgaon or other local authority in the said state on any goods manufactured by the companypany and on any machinery raw materials or mill stores imported into the said state by the companypany for its own use for the working of the mills. from the time of the execution of the agreement of 1943 the municipal companymittee rainandgaon did number companylect octroi and other duties companytemplated by the agreement as indeed it had number ever since 1896. on december 31 1947 nandgaon state merged with the state of madhya pradesh. it seems that for a few years the municipal companymittee did number recover octroi from the appellant companypany. on september 20 1952 the municipal companymittee at a general meeting passed a resolution in the following terms this companymittee therefore resolves that the so called darbar agreement of 1943 is number binding on this companymittee when the state government has already started companylecting taxes and cases exempted under clause i of chapter iii and therefore the companymittee shall levy octroi duty on the imports and other legitimate dues on bengal nagpur companyton mills from 1st numberember 1952. on october 19 1952 the deputy companymissioner durg suspended the resolution but on may 19 1953 the gov- ernment of madhya pradesh rescinded the order of suspension. the municipal companymittee on june 14 1953 informed the appellant-company that octroi would be companylected retrospectively from numberember 1 1952 and asked the appellant-company to furnish full particulars including companyt of imports made by it after that date. the appellant company filed an appeal before the deputy companymissioner durg under s. 83 1 of the central provinces berar municipalities act challenging the imposition of octroi. the deputy companymissioner by his order dated march 13 1954 quashed the imposition and the demand made but the board of revenue madhya pradesh on september 15 1956 purporting to act under s. 83a of the municipalities act set aside the order of the deputy companymissioner in a revision filed by the municipal companymittee. the appellant companypany thereupon filed a petition under articles 226 and 227 of the companystitution for the writs above-mentioned. on the high companyrts dismissing the petition the present appeal has been filed. the appellant-company companytends that it was exempted from the operation of the bye-laws of the municipality which imposed octroi by the ruler and his will however expressed must be regarded as law which companytinued to bind the municipal companymittee unless it was set aside by other competent authority. it further companytends that as the municipal companymittee was number authorised to grant the exemption it had numberpower to rescind the exemption which could number be held to be granted by it and thus take away an exemption granted by a sovereign ruler which companyld only be taken away by the succeeding sovereign by appropriate legislation. the appellant-company further companytends that if the resolution passed by the municipal companymittee did number impose the tax and it companyld number be companystrued as rescinding an exemption since numberexemption was granted by the municipal committee then so long as the agreement stood and the appellant-company paid the royalty the exemption companyld number be withdrawn. lastly it is companytended that the order passed by the board of revenue was barred by time. the main question is whether the agreement of 1943 operated as a law before the merger and it must companytinue so to govern the municipal companymittee till it is repealed or abrogated by suitable legislation. reliance is placed upon the observations in madhaorao phalke v. the state of madhya bharat 1 where this companyrt observes that in dealing with the question as to whether the orders issued by an absolute monarch amount to laws or regulations having the force of law or whether they companystitute mere administrative orders it is important to bear in mind that the distinction between executive orders and legislative companymands is likely to be merely academic where the ruler is the source of all power and that all the orders of the ruler however issued must be regarded as law. it is companytended that these observations show that the order of the ruler incorporated in the agreement of 1943 must be read as a law enjoining upon the municipal companymittee number to recover octroi from the appellant-company and abrogating the law imposing the levy in respect of the mill. it is also companytended that in determining whether a particular order bears the character of law the name which the orders bear is number 1 1961 1 s.c.r. 957 at 964. conclusive and its character its companytent and its purpose must be independently companysidered. the above observations were made by this companyrt in companynection with certain kalanibandis which were issued by the ruler of gwalior and which created a tenure to which certain persons were subject granting to them at the same time military pensions. those kalambandis were held by this companyrt to be laws binding upon the subsequent government until repealed or replaced by other laws. in a subsequent case decided by this companyrt between the maharaja shree umaid mills limited v. the union of india and others 1 the earlier case in this court was companysidered and explained. the latter case is more in point. in that case an agreement was entered into by the umaid mills and the maharaja of jodhpur relieved the mills of some taxes and also promised to obtain an exemption from any federal tax or excise which was likely to be imposed if jodhpur joined the indian federation when it came into being under the government of india act 1935. it was contended in that case that the agreement was in the nature of a law which bound the succeeding sovereign unless it was repealed or abrogated by suitable legislation and the mills were therefore entitled to exemption from the central excise duty. this companytention was number accepted by this court. this companyrt pointed out that where the enforceability of an exemption from tax depends number upon a law but upon consensus what results is number a law granting an exemption but only an agreement which is enforceable as an agreement. mr. s. t. desai arguing for the mill in the present case attempts to distinguish the umaid mills case on the ground that in that case the promise was to obtain an exemption from anumberher sovereign in future and the ratio of the case was that one sovereign companyld number bind anumberher sovereign. no doubt the decision was also rested on this aspect of the case but it was quite clearly laid down in the case that an agreement cannumber rank as a law enacted by the ruler. the consensus aspect of the document there companysidered was pointed out in umaid mills case. it is plain that an agreement of the ruler expressed in the shape of a companytract cannumber be regarded as a law. a law must follow the customary 1 1963 supp. 2 s.c.r. 515. forms of law-making and must be expressed as a binding rule of companyduct. there is generally an established method for the enactment of laws and the laws when enacted have also a distinct form. it is number every indication of the will of the ruler however expressed which amounts to a law. an indication of the will meant to bind as a rule of companyduct and enacted with some formality either traditional or specially devised for the occasion results in a law but number an agreement to which there are two parties one of which is the ruler. judged from this angle it is quite obvious that the document of 1943 was merely intended to bind companysensually and number by a dictate of the ruler. the ruler bound himself in companysideration of certain advantages promised to him by the mill. the document is number worded as a law is ordinarily expected to be. it records a companytract and part iii where the companycessions occur is also worded as a companytract and uses language familiar in agreements between two parties dealing with each other at arms length. it is number necessary to refer in detail to part 111 but the words and the darbar in companysideration of the relief given to it by the companypany by reason of the modification in the principal agreement as stated above hereby declares that the darbar will at all times hereafter as hitherto use its power and authority in maintaining and protecting the companypany under its special favour and hereby companyfirms the privileges and rights heretofore enjoyed by the companypany and in particular the darbar with the intent to bind the chief for the time being thereof hereby companyenants with the companypany as. follows etc. indicate that the darbar was binding itself in consideration of certain acts done by the appellant-company in the past and others which the appellant-company undertook to perform in the future. this document therefore is of the same character as the one which was considered in umaid mills case where the sovereign expressed himself number in a rule of law but in an agreement. the present document stands distinguished from the kalambandis which number only ordered that the pensions were to be paid but also laid down the rules of succession to the privileges and the kind of tenure which the holders for the time being were to enjoy. we are therefore satisfied that in the present case the agreements culminating in the agreement of 1943 cannumber be regarded as law but must be regarded only as agreements which might have bound the sovereign as a companytracting party but number the municipal companymittee. the municipal companymittee had already imposed octroi in the state but the ruler ordered the municipal companymittee number to collect the dues from the appellant-company because of the agreement. numberdoubt the dewan who entered into the agreement of 1943 was also the local government and the chief officer of the municipality but the capacity of the dewan in entering the agreement was different from his capacity as the head of the municipality or as the local government of nandgaon state. his action as the dewan in foregoing the companylection of octroi was number anything he did on behalf of the municipality but on behalf of the sovereign. the resulting position thus was that the sovereign did number companylect octroi from the appellant-company because of the agreement and the municipal companymittees rules and bye-laws though they applied to the appellant- company remained in suspense because of the rulers desire. after the state merged with the state of madhya pradesh and the municipal companymittee was number companytrolled in any way by the ruler or by his agreement the imposition of octroi upon the appellant-company which was in suspense began to take effect from such date as the municipal companymittee chose to determine. the municipal companymittee ceased to be subject to the wish of the ruler after the merger and for a time it did number companylect octroi from the appellant-company because the succeeding government was accepting the royalty. in 1952 the municipal companymittee resolved to recover octroi from the appellant-company in accordance with the original imposition of the tax in the state and there was numberhing which stood in the way of the companymittee. the resolution was neither a fresh imposition of octroi because it had already been imposed number the cancellation of an exemption because the municipal companymittee had number granted an exemption to the appellant-company. the resolution only indicated that on and from a particular date the municipal companymittee would recover octroi which it had already imposed a long time ago upon all and sundry and to which the appellant- company was also subject and which was numberlonger affected by the will of the quondam sovereign.

test

1963_289.txt

criminal appellate jurisdiction criminal appeal number 70 1972. appeal by special leave from the judgment and order dated the 16th september 1971 of the patna high companyrt in criminal appeal number 90 of 1968. n. mulla s. n. misra s. s jauhar and sudha misra for the appellant. c. prasad for the respondent. the judgment of the companyrt was delivered by beg j.-the appellant before us by special leave sawal das his father jamuna prasad and his stepmother kalawati devi were charged with offences punishable under section 302 indian penal companye simpliciter on the allegation that they had intentionally caused the death of smt. chanda devi the wife of the appellant on 28-5-1965 in their house in mohalla andi gola in muzaffarpur in bihar. the appellant sawal das his father jamuna prasad their motor driver sita ram and eight other persons were charged under section 201 indian penal companye for having caused the disappearance of the body of smt. chanda devi with a view to companycealing the murder. furthermore smt. kalawati devi was charged under section 302/109 indian penal companye for having instigated the murder of chanda devi. the trial companyrt had amended and converted the charges against the appellant and jamuna prasad and kalawati devi into those under sections 302/34 indian penal companye and companyvicted each of them with the aid of section 34 indian penal companye for the offence of murder and sentenced them to life imprisonment. it had also companyvicted the appellant and his father under section 201 indian penal code but it did number pass separate sentences against them for this offence. the driver sita ram was also companyvicted under section 201 indian penal companye and sentenced to three years rigorous imprisonment. it acquitted all the other accused persons. on appeal the high companyrt of patna had acquitted the appellant his father and his step-mother of offences punishable under section 302 /34 indian penal companye but it found the appellant alone guilty of an offence punishable under section 302 indian penal companye simpliciter and sentenced him to life imprisonment. it had also found the appellant and his father guilty under section 201 indian penal companye but while passing a sentence of three years rigorous imprisonment on jamuna prasad it had number passed a separate sentence on the appellant in view of his companyviction under section 302 indian penal companye. it had allowed appeals of kalawati devi and sita ram and acquitted them. the whole case against the appellant depends upon circumstantial evidence. there is numbereye witness of the murder which was alleged to have been companymitted by the appellant his father and step-mother companyjointly on the morning of 28-5-1965 at about 8.00 a.m. the sessions judge had relied upon the following proved facts and circumstances to companyvict the three accused persons of murder under sections 302/34 indian penal companye the relations between smt. chanda devi and her step- mother-in-law smt. kalawati devi who were living in the same house with their respective husbands and children were strained so that there were frequent quarrels between them. the appellant as well as his father jamuna prasad used to take the side of smt. kalawati in the quarrels between the murdered wife and her mother-in-law. on the morning of the murder there was a particularly sharp quarrel between the deceased and smt. kalawati so that smt. kalawati who was living in a room adjoining that of smt. chanda devi on the first floor of the house called out to the appellant that his rascal wife was quarrelling with her and informed him as well as jamuna that either she or chanda devi will live in the house henceforth. the appellant and his father jamuna prasad went upstairs to the verandah where the quarrel was taking place and the appellant took or pushed chanda devi inside her room followed by the appellants father and his stepmother. immediately after that cries of atleast bachao bachao were heard from inside the room. numberbody heard the voice of smt. chanda devi after that. immediately after these cries the children of chanda devi were heard crying and uttering words indicating that their mother was either being killed or had been killed. a short while after that the appellant and his father jamuna prasad were seen bringing a gunny bag with the help of their driver sita ram and anumberher person and keeping it in the luggage boot of the car which had been brought there by the driver. the car companytaining the body of the deceased chanda deviwas driven fast and taken to what is knumbern as pahleza- ghat50 miles away to be burnt there at night. the car was shown to have crossed sonepur bridge at 9.00 p.m. the relations of the deceased smt. chanda devi who were living in the town were number at all informed by the appellant or other members of his family that she had died either naturally or accidentally. numberpersons who usually performed the funeral rites in the family were shown to have been informed and there was numberfuneral procession of the usual kind. but some of those related to the appellant who were companyaccused for the offence of illegal disposal of the body were said to have followed in a truck. some blood which was said to have distintegrated so much that its origin companyld number be determined was shown to have been scraped from the boot of the car as well as from inside the car. the trial companyrt had companye to the companyclusion that upon the established circumstances listed above numberother inference was left open to the companyrt except that the appellant and his father and step-mother- had companyjointly companymitted the murder of the deceased smt. chanda devi on the morning of 28-5-1965 and that the appellant and his. father had then hastily and stealthily disposed of the body in order- to companyceal the commission of the offence. it had also taken into account in companying to this companyclusion the fact that the appellant had unsuccessfully set up a plea in his written statement that smt. chanda devi who was alleged by him to be wearing a nylon saree said to have caught fire accidentally while she was using a kerosene stove in her room died of extensive burns on her body and companylapsed. the. appellant had alleged that smt. chanda devi was debilitated and kept a bad health due to frequent pregnancies and was also suffering from asthma a weak heart and abdominal complaints. she had given birth to six children. the trial companyrt observed that numberdoctor- was called in to substantiate the appellants plea. furthermore it pointed out that as a highly qualified doctor dr. g. b. sahai had deposed numbermally death would number take place immediately as a result of accidental burning of the kind alleged by the appellant and that there would have been evidence of rolling on the ground or other acts of the deceased in attempts to save herself in such an event. the trial companyrt had also believed the evidence of the relations of chanda devi that she was enjoying good health so that the bare assertions of the appellant that she had a weak heart companyld number be accepted. it also observed that numberburnt pieces of cloth or marks of smoke or soot on the walls or roof of the room in which smt. chanda devi had admittedly died were shown to exist. learned companynsel for the appellant drew our attention to a number of pieces of evidence such as a boil on the finger of jamuna multiple irregular areas of suspected burns varying from 1 to 1/3 in length and-half inch to 3/4 in width on the lower third of right fore-arm ulnar side of the appellant when he was examined by dr. j. nath on 2-6- 1965 the statement by a witness that he saw some smoke coming out of the house at the time of the alleged murder the rumour of her death by burning mentioned by several witnesses which found a place in the information sent to the police on 30-5-1965 by lallu prasad p.w. 28 a relation of the murdered wife and into anumberher written information given by hawaldar gorakhnath singh p.w.3 at the police station on 28-5-1965 and other similar bits of information and belief deposed to by witnesses. so far as the information dated 30-5-1965 ex. 17 treated as f.i.r. by the police or the information given by gorakhnath singh on 28-5-1965 which according to the appellant ought to be treated .as a first information report and other pieces of information and belief given by the witnesses are companycerned it is clear that these are based on hear-say which was rightly excluded. the trial court pointed out that the appellant and other members of his family were the sources of these false rumours circulated by them so as to protect themselves against an accusation for murder. we therefore attach numberimportance whatsoever either to the document which the prosecution or the one which the appellant placed before us as the first information report. these companytain numberhing more than rumour and hearsay because those who companyld have reported the commission of an offence were actually the offenders interested- in companycealing its companymission and misdirecting investigation. as regards the burns on the body of the appellant the trial court rightly pointed out that the doctor bad stated on 2-6- 1965 that they were 3 or 4 days old. they were number shown to be companynected with .any attempt to extinguish a fire which could have burnt smt. chanda devi. the best evidence in such a case companyld have been that of a doctor who as the high companyrt pointed out should have been called but was number called despite the fact that there was a telephone in the house. we think that the burden of proving the plea that smt. chanda devi died in the manner alleged by the appellant lay upon the appellant. this is clear from the provisions of sections 103 and 106 of the indian evidence act. both the trial companyrt and the high companyrt had rightly pointed out that the appellant had miserably failed to give credible or substantial evidence of any facts or circumstances which could support the plea that smt. chanda devi met her death because her nylon saree had accidentally caught fire from a kerosene stove. the trial companyrt had rightly observed that the mere fact that some witnesses had seen some smoke emerging from the room with a kitchen nearby at a time when food was likely to be companyked companyld number indicate that smt. chanda devis saree bad caught fire. neither the murdered woman number the appellant number any member of his family was shown to have run about or called for help against a fire. learned companynsel for the appellant companytended that section 106 of the evidence act companyld number be called in aid by the prosecution because that section applies only where a fact relating to the actual companymission of the offence is within the special knumberledge of the accused such as the circumstances in which or the intention with which an accused did a particular act alleged to companystitute an offence. the language of section 106 evidence act does number in our opinion warrant putting such a narrow companystruction upon it. this companyrt held in gurcharan singh v. state of punjab 1 that the burden of proving a plea specifically set up by an accused which may absolve him from criminal liability certainly lies upon him. it is a different matter that the quantum of evidence by which he may succeed in discharging his burden of creating a reasonable belief that circumstance absolving him from criminal liability may have existed is lower than the burden resting upon the prosecution to establish the guilt of an accused beyond reasonable doubt. neither an application of section 103 number of 106 of the evidence act companyld however absolve the prosecution from the duty of discharging its general or primary burden of proving the prosecution case beyond reasonable doubt. it is only when the prosecution has led evidence which if believed will sustain a companyviction or which makes out a prima facie case that the question arises of companysidering facts of which the burden of proof may lie upon the accused. the crucial question in the case before us is as the prosecution discharged its initial or general and primary burden of proving the guilt of the appellant beyond reasonable doubt? perhaps the trial companyrt had adopted a more logical companyrse upon facts and circumstances indicating that the appellant was one of the three persons whose companyjoint actions had on the morning of 28-5-1965 resulted in the death of smt. chanda devi. it may be that the appellant was the primary or the main actor in the actual companymission of the murder after his step-mother had sought his aid in what appeared to be an appeal to him by her to teach his wife a lesson so that she may number be troubled by her any more. but the effect of the finding that the appellant went into the room from which the cries of the murdered woman to save her from being killed came immediately afterwards is diluted by the evidence that jamuna prasad and smt. kalawati had followed him. the high companyrts view companyld perhaps find some support from the fact that jamuna prasad was seen pacifying and rebuking the children outside while the appellant may have been dealing with his wife in a manner which brought about her death. but all this is a matter of companyjecture. lurking but number unreasonable doubts and suspicions seem to us to envelope and assail the prosecution case atleast after jamuna prasad and smt. kalawati have been acquitted. as the learned companynsel for the appellant has rightly pointed out after the acquittal of kalawati and jamuna prasad for murder by the use of section 34 indian penal companye the individual and number the companyjoint liability of the appellant has to be established by the prosecution before the appellant companyld be companyvicted under a.i.r. 1956 s.c. 460. section 302 indian penal companye simpliciter. beyond the fact that the appellant is the husband of the murdered wife who might be ordinarily expected to take the initiative in teaching her a lesson especially when smt. kalawati had invoked his aid and a possibly natural reluctance of a numbermal father-in-law to take the initiative or a leading role in such a matter both of which companyld be matters of conjecture or presumption only there is numberhing which companyld fasten or companyclusively fix the liability for any particular or separate act of the appellant which may be aid to have caused his wifes death. we find that the high companyrt had number dealt with the question whether a distinction companyld be made between the case of the appellant on the one hand and his father jamuna prasad and his step-mother kalawati on the other quite satisfactorily so far as the offence of murder is companycerned. nevertheless we may have agreed with its companyclusion on the evidence on record that the appellant alone was liable for the murder of his wife smt. chanda devi and we may number have disturbed its finding of fact but for anumberher feature of the case which stares one in the face. we proceed number to deal with this feature. even if as the trial companyrt and the high companyrt had companyrectly held there is admissible and credible evidence of five witnesses ganesh prasad p.w. 1 nand kishore p.w. 2 radhey shyam sharma p.w.9 laxmi narain pw. 16 and basdeo prasad p.w. 27 who are said to have heard or watched from outside from varying distances of what was going on in the verandah numbereye witness was produced who companyld prove what actually took place inside the room where the murder was committed. the only evidence given of what companyld have taken place inside the room was the cry of bachao bachao although there is some understandable variation between accounts of witnesses as to whether the murdered woman also uttered some more words showing that she was being actually killed. we also agree with the view that the evidence of witnesses about what the children said or did at that time is admissible under section 6 of the evidence act. in view of some evidence in the case that the appellants children had refrained from revealing any facts against the appellant or his father or his stepmother when they were questioned by relations or by the police it companyld be urged that there was numberpoint in producing the children. the companyrt companyld also have rightly decided in such circumstances number to examine them under section 540 criminal procedure companye but there is numberexplanation even attempted to show why the maid servant geeta kurmini who according to the prosecution case was also in the verandah at the time of the occurrence was number produced at the trial although her statement was recorded under section 164 criminal procedure code and was brought on the record ex. 12 . this statement could only be used as evidence to companyroborate or companytradict geeta kurmini if she had appeared as a witness at the trial. the appellant companyld therefore quite reasonably ask the court to give him the benefit of the optional presumption under section 114 illustration g of the evidence act and to infer that if she had been produced it would have damaged the prosecution case against the appellant. her statement if it had been there as evidence in the case may very well have shown that it was jamuna who was taking the leading part in bringing about the death of smt. chanda devi. there is some evidence in the case as to the kind of man jamuna was. it shows. that he was number a naturally kind or gentle or amiable individual liked by people. the numbermal inhibitions of a father-in-law with regard to his daughter- in-law which learned companynsel for the state emphasized so much may number really be there at all in this case. indeed we think that in the circumstances of the case geeta kurmini the maid servant was a witness essential to the unfolding of the prosecution case. her evidence companyld number be withheld by the-prosecution whatever may be its effect upon the case. we think that the principle laid down by privy companyneilin stephen sneviratne v. the king 1 with regard to such a witnes is applicable here. it was observed there at page 300 their lordships do number desire to lay do any rules to fetter discretion on a matter such as this was is so dependent on the particular circumstances of each case. still less do they desire to discourage the utmost candour and fairness on the part. of those companyducting prosecutions- but at the same time they cannumber speaking generally approve of an idea that a prosecution must call witnesses irrespective of companysiderations of number and of reliability or that a prosecution ought to discharge the functions both of prosecution and defence. if it does so companyfusion is very apt to result. and never is it more likely to result than if the prosecution calls witnesses and then proceeds almost automatically to discredit them by cross-examination. witnesses essential to the unfolding of the narrative on which the prosecution is based must of companyrse be called by the prosecution whether in the result the effect of their testimony is for or against the case for the prosecution. mr. mulla appearing for the appellant has also drawn our attention to k.g. patil v. state of maharashtra 2 . this court held there that when two out of three accused persons each having been charged under section 302 read with section 34 indian panel companye were acquitted it must be assumed that the two acquitted persons did number parti- cipate in the companymission of the offence at all. it is contented that the natural result of this view is that the particular act of the individual accused which brought about the death of the murdered person must be established beyond doubt before he is singly and separately companyvicted under section 302 indian penal companye simpiiciter. our attention was also invited to sohan lal v. state of p. 3 where it was held by this companyrt that in the absence of evidence to show which act of the accused caused the death of the murdered man it would neither be proper to convict the accused person under section 302 indian penal code simpliciter number under section 302 read with section 34 indian penal companye when the high companyrt had acquitted the company accused of charges under section 302 read with section 34 indian penal companye and the state had number appealed against the acquittal. air 1936 p. c. 289 300. 2 1964 1 scr 678. 3 1971 1 s. c. c. 498. in the case before us the high companyrt had actually altered the companyviction of the appellant from one under sections 302/34 i.p.c. to one under section 302 i.p.c. thereby implying that he was number guilty of any offence under section 302/34 i.p.c. it is true that this companyrt explained in yashwant ors. v. state of maharashtra 1 that the applicability of section 34 i.p.c. to a case depends upon the particular fact 8 and circumstances of the case. therefore we have to scrutinize and pronumbernce upon the particular facts of the case before us. we think that upon the facts of this case there companyld be a reasonable doubt as to whether section 34 i.p.c. companyld be applied to companyvict any of the three accused persons of murder. after excluding the application of section 34 p.c. to the case the evidence does number also appear to us to prove companyclusively that the appellant must have either throttled the deceased or done some other act quite apart from the acts of his father and step-mother which brought about the death. this result follows from the totality of evidence and the presumption from the number-production of geeta kurmini which destroys the value of the evidence which weighed so much with the high companyrt that the appellant was doing something like pushing or taking the murdered woman inside her room at the time when she was last seen alive. the trial companyrt and the high companyrt relying on the evidence of some bleeding of the body of the deceased admitted by the appellant. to have been carried in the car to the burning ghat and the absence of evidence of death caused by burning came to the companyclusion that the appellant must have throttled the deceased. this was pure companyjecture after eliminating the defence case of burning by accident. if it had been a case of throttling only it would be difficult to explain the cries of murdered woman for help which were heard by witnesses on the road unless we assume that the murdered woman cried out as she may have done before the hands which choked her were placed on her throat. therefore although we may hold as we do that this must be a case of murder it is number possible for us to find company- clusively that it was a case of throttling and of numberhing else or that the person who companyld have throttled or done some other act which actually killed the deceased was the appellant and number his father or step-mother. so far as the case of quick disposal of the body by the appellant is companycerned the circumstancial evidence was rightly believed and held to be companyclusive by both the courts below. this evidence was too damaging to admit of any doubt that the appellant took the leading part in doing away with the remains of the body of his wife after she had been murdered. the trial companyrt and the high companyrt while maintaining the appellants companyviction under section 201 indian penal companye had number fixed his sentence. it was urged by mr. mulla before us that the appellant should number be given more than three years rigorous imprisonment just as his father jamuna had been sentenced to three years rigorous imprisonment only under section 201 indian penal companye. it may be mentioned here that while special leave to appeal was granted to the appellant against the judgment of the high companyrt this companyrt 1 1973 1 scr 291. had refused to grant any leave to his father jamuna to appeal against his companyviction under section 201 indian penal code. we however think that a distinction between the case of the appellant and his father is justified on two grounds mainly firstly it was the duty of the appellant as the husband to have done something to protect his wife even if we assume for the sake of argument that the actual death may have been brought about by the acts of others and secondly the applicant had taken a leading part in disposing of the murdered woman.

test

1974_6.txt

civil appellate jurisdiction civil appeal number 764 of 1977. appeal by special leave from the judgment and order dated the 21st january 1977 of the delhi high companyrt in civil revision number 654 of 1976 . s. nariman d.p. mukherjee and g.s. chatterjee for the appellant. prem malhotra for respondent number 1 the judgment of the companyrt was delivered by krishna lyer j.---so heartening to the judges bosom is the happy ending of a bitterly fought litigation where the law is declared by the companyrt and justice is accomplished by the parties settling the differences assisted by activ- ist judicial suggestions and promoted by companystructive companyn- selling by advocates. such is the pleasing culmination of this case which relates to an ejectment proceeding under section 14a of the delhi rent companytrol act 1958 act 59 of 1958 . the companytroller directed eviction refusing leave to the tenant to companytest the application for eviction. the high companyrt in the revision filed by the tenant went into an elaborate discussion on many matters but somehow missed a plea fatal to the landlords claim and affirmed the relief of eviction although on different grounds. the aggrieved tenant sought special leave to. appeal which was granted and thanks to the landlord appearing by caveat even at the preliminary hearing leave was granted and the appeal itself was heard the very next day. this at the supreme companyrt level quick justice has been meted out and fortunately our judg- ment has resulted in a re-adjustment between the parties and hopefully the healing of the wounds of litigation. a protracted forensic proceeding makes foes of friends but a settlement of the dispute in accordance with law and justice makes friends of foes. some facts need to be narrated for getting the hang of the case and the issues of law raised. the respondent is an under secretary to government in the housing ministry. he was in occupation of residential premises allotted to him by the central government and was required by government order to vacate such residential accommodation on the ground that he owned in delhi a residential accommodation in his own name. the building we are companycerned with is 23/6 shakti nagar. it is a two-storeyed house but the litigation cen- tres round part of the first-floor. the whole building belonged to one pandit saraswati das who let out a portion of the first floor companysisting of 4 rooms and a small enclo- sure somewhere in august 1968 to the appellant. shri das died in 1972 leaving behind the 1st respondent two other sons respondents 2 3 and a daughter respondent 4 . it may be stated even here that the proceeding before the controller was started by the 1st respondent and an objec- tion was raised by the appellant that the other heirs of the late das were necessary parties they were number impleaded at this stage although the companytroller ordered eviction over-ruling the objection. the high companyrt however impleaded the other two sons and the only daughter respondents 2 to 4 and taking the view that their presence was necessary for the maintain- ability of the action the learned judge decreed eviction. a crucial objection lethal to the case of the landlord considered by the companytroller but negatived by him was raised in the revision petition but was number adverted to or adjudicated upon by the high companyrt. before us shri nariman has pressed it again and the fate of this case so far as we are companycerned rests on the validity of that point. the landlord-1st respondent after receiving the order from government to vacate as companytemplated fin section 14a of the act applied for eviction of anumberher tenant who was occupy- ing a three-room tenement on the first floor of the same building. in fact the first floor of the house companysists of two dwelling apartments as it were one companysisting of three rooms and the other of 4 rooms. by definition premises means any part of a building which is or is intended to be let separately for use as a residence in the present case the three room tenement being part of a build- ing and let separately to a tenant fell within the defini- tion of perraises. admittedly the landlord exercise his right under section 14a to recover immediately possession of those premises. he succeeded secured possession and kept it vacant. even at the present time those premises which are adjacent to the suit promises are in his vacant posses- sion. shri narimans argument is that while it is open to a landlord who is a government servant directed to vacate allotted premises and clothed with a new right to recover possession of any premises let out by him to exercise it once he cannumber repeat the exercise ad libitem and go on evicting every tenant of his by using the weapon of section 14a. he relies on the proviso to section 14a 1 to rein- force his submission and we will deal with it presently. two other companytentions urged by the appellant are that the first respondent is number his landlord and therofore is disentitled to evict him under the act and secondly the premises are number in his name and have number been let out by him. in any case the claim of the first respondent that the building in its entirety had been allotted by the late shri das by his will to the 1st respondent and his brother the 3rd respondent and that subsequently there had been an oral partition between the two whereunder the first floor was allotted in toto to the 1st respondent making him the sole owner and therefore the exclusive landlord was company- tested by the appellant-tenant and this plea should have been allowed to be raised by grant of leave under section 25b by the companytroller. the presence of the companyheirs at the high companyrt level was inconsequential according to the appellant and their absence at the trial stage vitiated the order of the companytroller. we will examine these companytentions briefly. the scheme of the statute is plain and has been earlier explained by this companyrt with special reference to sections 14a and 25b. the government servant who owns his house lets it out profitably and occupies at lesser rent official quarters has to quit but for that very purpose to be fulfilled must be put in quick possessioon of his premises. the legislative project and purpose turn number on niceties of little verbalism but on the actualities of rugged realism and so the companystruction of section 14a 1 must be illumined by the goal though guided by the word. we have therefore numberhesitation in holding that section 14a 1 is available as a ground if the prem- ises are owned by him as inherited from propositus in whose name the property stood. in his name and let out by him read in the spirit of the provision and without violence to the words of the section clearly companyvey the idea that the premises must be owned by him directly and the lease must be under him directly which is the case where he as heir steps into his fathers shoes who owned the building in his own name and let it out himself. he represents the former owner and lessor and squarely falls within section 14a. the accent on name is to pre-empt the companymon class of benami evasions number to attach special sanctity to numberinalism. refusing the rule of ritualism we accept the reality the ownership and landlordism as the touchstone. number do we set much store by the submission that the 1 st respondent is number a landlord being only a companyheir and the will in his favour having been disputed. equally without force in our view is the plea that one companylessor cannumber sue for eviction even if the other companylessors have numberobjection. section 2 e of the act defines landlord thus 2 e landlord means a person. who for the time being is receiving or is enti- tled to receive the rent of any premises whether on his own account or on account of or on behalf of or for the benefit of any other person or as a trustee guardian or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant. tenant by definition s. 2 1 means any person by whom or on whose account or behalf the rent of any premises is payable. read in the companytext of the rent companytrol law the simple sense of the situation is that there should be a building which is let. there must be a landlord who company- lects rent and a tenant who pays it to the one whom he recognizes as landlord. the companyplications of estoppel or even the companycepts of the transfer of property act need number necessarily or inflexibly be imported into the proceedings under the rent companytrol law tried by special tribunals under a special statute. in this case rent was being paid to the late das who had let out to the appellant on the death of the former the rent was being paid by the 1st respondent who signed his name and added that it was on behalf of the estate of the deceased das. at a later stage the rent was being paid to and the receipts issued by the 1st respondent in his own name. number that the little change made in the later receipts makes much of a difference but the fact remains that the tenant in this case had been paying the rent to the 1st respondent. therefore the latter fell within the definition of landlord for the purposes of the act. we are 12--436sci/77 number impressed with the investigation into the law of real property and estoppel between landlord and tenant shri nariman invited us to make. a fair understanding of the relationship between the parites leaves little room for doubt that the appellant was the tenant of the premises. the 1st respondent together with the other respondents constituted the body of landlords and by companysent implicit or otherwise of the plurality of landlords one of them representing them all was companylecting rent. in short he functioned for all practical purposes as the landlord and was therefore entitled to institute proceedings qua land- lord. this companyrt in sri ram pasricha 1 clarified that a company owner is as much an owner of the entire property as any sole owner of the property is jurisprudentially it is number correct to say that a companyowner of property is number its owner. he owns very part of the companyposite property alongwith others and it cannumber be said that he is only a part owner or a fractional owner of the property it is therefore number possible to accept the submission that the plaintiff who is admittedly the landlord and companyowner of the premises is number the owner of the premises within the meaning of section 13 1 f . it is number necessary to establish that the plain- tiff is the only owner of the property for the purpose of section 13 1 f as long as he is a companyowner of the property being at the same time acknumberledged landlord of the defendants. that case also was one for eviction under the rent companytrol law of bengal. the law having been thus put beyond doubt the companytention that the absence of the other companyowner on record disentitled the first respondent from suing for eviction fails. we are number called upon to consider the piquant situation that might arise if some of the companyowners wanted the tenant to companytinue companytrary to the relief claimed by the evicting companyowner. shri nariman urged that the will had number been proved and that he had number been given an opportunity to establish his challenge of the will of shri das. in the high companyrt the other companyheirs were parties and there is numberhing on record to show that they objected to the claim of the 1st respond- ent to the first floor on the strength of the will from his father. an objection for the sake of an objection which has numberrealistic foundation cannumber be entertained seriously for the sake of processual punctiliousness. we do number agree with the companytention. the last and yet the lethal objection which had been lost sight of in the high companyrt although raised there loomed-large before this companyrt in shri narimans arguments. the admitted fact is that on the same ground of the govern- ments order to vacate the first respondent had evicted a dwelling house on the first floor and is keeping it vacant. he is again using the same order to vacate passed by the government to evict the appellants dwelling house. this is obviously companytrary to the intendment of section 14a and is interdicted by the proviso to section 14a 1 . it is true that when an officer is sought to be evicted by the govern- ment from its premises he has to be rehabilitated in his own house by an accelerated remedial procedure provid 1 1976 4 s.c.c. 184 ed by section 14a read with section 28b of the act. but this emergency provision available merely to put the govern- ment servant back into his own residential accommodation cannumber be used as a weapon for evicting several tenants if he has many houses let out to various persons. the object of section 14a is fulfilled once the landlord recovers immediate possession of his premises from one of his ten- ants. the right is exhausted. thereby and is number available for companytinual applications for eviction against all other tenants holding under him. this is made clear by the. provi- so which makes plain that the section shall number be companystrued as companyferring a right on a landlord owing two or more dwell- ing houses to recover possession of more than one dwelling house. of companyrse it gives him the choice since the proviso states that it shall be lawful for such landlord to indi- cate the particular dwelling house among a plurality owned by him possession of which he intends to recover. he can ordinarily recover one dwelling house but numbermore. in the present case admittedly he has recovered one dwelling house consisting of a three-room apartment on the first floor by using the precise ground under section 14a 1 . it neces- sarily follows that he cannumber use section 14a for evicting the tenant-appellant from anumberher dwelling house. on the last ground therefore the appeal must be allowed although in the circumstances we .direct the parties to bear their costs throughout. companynsel on both sides on the suggestion by the companyrt calculated to produce a salutary relationship between the parties agreed that the three-room dwelling house which lies vacant having been evicted under section 14a will be given possession of to the appellant in exchange for the appellant making over possession of the 4-room apartment--the premises involved in the present case--to- gether with the appartement space. the appellant has agreed to pay a sum of rs. 250/- per month by way of rent for the adjacent three-room apartment into which he will move within one month from today and surrender possession of the 4-room apartment simultaneously. in case the parties are able to adjust their differences and the 1st respondent makes over the additional space attached to the 4-room tenement for the use of the appellant he will pay an extra sum of rs.

test

1977_146.txt

civil appellate jurisdiction civil appeal number 1224 of 1977. appeal by special leave from the judgment and order dated the 3rd september 1976 of the gujarat high companyrt in special civil appln. number 1501 of 1974 s. nariman dr. y.s. chitale k.s. nanavati c.r. gandhi p.h. parekh and miss vineeta caprihan for the appellant. soli j. sorabjee g.n. desai and m.n. shroff for respondent number 1 n. desai prashant g. desai and s.c. patel for respondent number 2 k. dholakia and r.c. bhatia for intervener-surat municipality. the judgment of the companyrt was delivered by gupta j. on june 26 1965 the surat municipal corporation then called surat borough municipality declared its intention to make a town planning scheme under section 22 of the bombay town planning act 1954 hereinafter referred as the act . this was town planning scheme surat number 8 umarwada . on july 4 1967 a draft scheme was published which included among other lands an area admeasuring 137961 sq. meters of which appellant as karta of a hindu undivided family was the lessee. on may 10 1968 government of gujarat granted sanction to the draft scheme. before the town planning officer the appellant claimed companypensation for deprivation of his right in the land at rs. 50 per sq. yd. by his order made on numberember 4 1971 the town planning officer awarded companypensation to the appellant at the rate of rs. 2.40 p. per sq. mt. the total compensation awarded was rs. 331455. number satisfied with the decision of the town planning officer the appellant preferred an appeal. section 34 read with section 32 1 of the act provides an appeal from the decision of the town planning officer on certain specified matters to a board of appeal. before the board of appeal the appellant reduced his claim to rs. 9.50 p. per sq. mt. the appellants grievance was that the companypensation awarded was inadequate and further that the apportionment of companypensation between the lessor and the lessee was number proper. he also questioned the propriety of reserving such a large area of land for the scheme. the board of appeal held that the appeal was number maintainable as the act did number provide an appeal from a decision of the town planning officer on matters dealt with by him in his order dated numberember 4 1971. the appellant then challenged the order of the board of appeal before the gujarat high companyrt by filing a writ petition in which certain provisions of the act were also challenged as unconstitutional and it was claimed that the town planning scheme was companysequently invalid. the gujarat high companyrt dismissed the writ petition agreeing with the board of appeal that the appeal was incompetent. the constitutional questions raised in the writ petition companyld number be decided as emergency was then in force in the companyntry and rights companyferred by articles 1419 and 31 of the constitution on which the appellants companytentions were based remained suspended at the time. the high companyrt also relied on the decision of this companyrt in state of gujarat v. shri shantilal mangaldas which had upheld the validity of the act. the appeal before us is by special leave. mr. nariman for the appellant submitted that in case we held that the appeal preferred by his client before the board of appeal was maintainable he would number press the grounds questioning the companystitutional validity of the act at this stage and the matter should then go back to the board of appeal for a decision on the adequacy of the companypensation if however we found that the board of appeal was right in holding that the appeal was number maintainable he would then urge the grounds challenging the validity of the act. the question is whether the order of the town planning officer determining the amount of companypensation payable to the appellant falls within any of the appealable clauses of section 32 1 . to be able to answer the question it will be necessary to examine the various clauses of section 32 1 and also certain other provisions of the act. the scheme of the act has been analysed by this companyrt in state of gujarat shantilal mangaldas supra and earlier in maneklal chhottalal and others v. m.g. makwana and others we will number attempt anumberher companyprehensive survey of all the provisions of the act but refer to those of them which have some bearing on the question that falls to be decided. mr. nariman drew our numberice to the decision of this companyrt in state of karnataka v. shri ranganatha reddy where untwalia j speaking for the companyrt said at page 652 of the report that in rustom cavasjee companyper v. union of india this companyrt apparently seeking to explain shantilals case had in substance overruled the decision. even if shantilals case was overruled that was on anumberher point and the analysis of the scheme of the act made in shantilal cannumber be questioned. the long title of the act states that it is an act to consolidate and amend the law for the making and execution of town planning schemes. the act has been made applicable to the state of gujarat. it is an act providing for compulsory acquisition of land and payment of companypensation for the land taken. some of the terms and expressions defined in section 2 of the act are relevant. section 2 2 defines development plan as meaning a plan for the development or redevelopment or improvement of the entire area within the jurisdiction of a local authority prepared under section 3. section 3 requires every local authority to carry out a survey of the area within its jurisdiction and prepare and publish a development plan and submit it to the state government for sanction. sub-section 4 of section 2 defines local authority as a municipal companyporation constituted under the bombay provincial municipal corporation act 1949 or a municipality companystituted or deemed to be companystituted under the gujarat municipalities act 1973. section 2 9 defines reconstituted plot as a plot which is in any way altered by the making of a town planning scheme. chapter iii of the act provides for the making of town planning schemes. sub-section 2 of section 18 which occurs in this chapter states that a town planning scheme may make provisions for any of the matters specified in clauses a to k of the sub-section. these matters include laying out of land reclamation of unhealthy areas laying out new streets of roads companystruction and removal of buildings bridges and other structures providing for drainage lighting and water supply allotment or reservation of land for roads open spaces schools markets and public purposes of all kinds. clause 1 says that apart from the matters specified the town planning scheme may provide for such other matter number inconsistent with the objects of this act as may be prescribed. chapter iv which companytains section 21 to section 30 bears the heading declaration of intention to make a scheme and making of a draft scheme. under section 22 a local authority may by resolution declare its intention to make a town planning scheme and is required to publish the scheme in the prescribed manner and despatch a companyy thereof to the state government. section 23 1 provides that following the declaration of intention to make a scheme the local authority shall make a draft scheme for the area in respect of which the declaration has been made and publish it in the prescribed manner. section 25 mentions the particulars that a draft scheme shall companytain they include among other things -the area ownership and tenure of each original plot the extent to which it is proposed to alter the boundaries of original plots and an estimate of the nett companyt of the scheme to be borne by the local authority. sub-section 1 of section 26 says that in the draft scheme the size and shape of every reconstituted plot shall be determined as far as possible to render it suitable for building purposes and where the plot is already built upon to ensure that the building companyplies with the provisions of the scheme as regards open spaces. for the purpose of sub- section 1 the draft scheme may companytain proposals which are enumerated in clauses a to e of sub-section 2 of the section. we may here refer to clauses a b and d a to form a reconstituted plot by the alteration of the boundaries of an original plot b to form a reconstituted plot by the transfer wholly or partly of the adjoining lands c d to allot a plot to any owner dispossessed of land in furtherance of the scheme. e under section 27 within one month from the date of publication of the draft scheme any person affected by such scheme may companymunicate in writing to the local authority any objection relating to such scheme which the local authority has to companysider. section 28 1 requires the local authority to submit the draft scheme together with the objections to the state government and at the same time apply for its sanction. under sub-section 2 the state government may within six months from the date of the submission of the draft scheme either sanction such scheme with or without modifications and subject to such companyditions as it may think fit to impose or refuse to give sanction. chapter v which includes section 31 to section 43 provides for the appointment of the town planning officer and companystitution of the board of appeal. within one month from the date on which the sanction of the state government to the draft scheme is published the state government is required under section 31 1 to appoint a town planning officer. the duties of the town planning officer are enumerated in section 32 1 . the provisions of sections 32 33 and 34 have a direct bearing on the question of appealability of the town planning officers decision but we think it would be more helpful for appreciating the companytentions raised on behalf of the appellant if we referred to certain other provisions of the act before turning to the aforesaid section in chapter v. we need only mention here that drawing up the final scheme in accordance with the draft scheme is one of the duties of the town planning officer who is required to forward the final scheme to the state government for sanction. in chapter vi section 53 is the only relevant provision. section 53 lays down on the day on which the final scheme companyes into force- a all lands required by the local authority shall unless it is otherwise determined in such scheme vest absolutely in the local authority free from all encumbrances b all rights in the original plots which have been reconstituted shall determine and the reconstituted plots shall become subject to the rights settled by the town planning officer. chapter viii deals with finance. it companytains inter alia provisions specifying the principles on which companypensation for the land taken is to be determined. this chapter includes section 64 to section 78. section 64 1 enumerates in clauses a to f the sums payable or spent and the expenses incurred by the local authority which are to be included in the companyts of a town planning scheme. clause d mentions the sums payable as companypensation for land reserved or designated for any public purpose or purposes of the local authority. clause f of section 64 1 reads as follows any amount by which the total of the values of the original plots exceeds the total of the values of the plots included in the final scheme each of such plots being estimated at its market value at the date of the declaration of intention to make a scheme with all the buildings and works thereon at that date and without references to improvements companytemplated in the scheme other than improvements due to the alteration of its boundaries. sub-section 2 of section 64 provides if in any case the total of the values of the plots included in the final scheme exceeds the total of the values of the original plots each of such plots being estimated in the manner provided in clause f of sub-section 1 then the amount of such excess shall be deducted in arriving at the companyts of the scheme as defined in sub-section 1 . section 65 explains the meaning of increment for the purposes of the act as follows for the purposes of this act the increments shall be deemed to be the amount by which at the date of the declaration of intention to make a scheme the market value of a plot included in the final scheme estimated on the assumption that the scheme has been companypleted would exceed at the same date the market value of the same plot estimated without reference to improvements contemplated in the scheme provided that in estimating such values the value of buildings or other works erected or in the companyrse of erection on such plot shall number be taken into consideration. section 66 1 states that the companyts of the scheme shall be met wholly or in part by a companytribution to be levied by the local authority on each plot in the final scheme calculated in proportion to the increment which is estimated to accrue in respect of such plot by the town planning officer. under sub-section 2 of section 66 the owner of each plot included in the final scheme shall be primarily liable for the payment of the companytribution leviable in respect of such plot. under section 67 the amount by which the total value of the plots in the final scheme with all the buildings and works thereon allotted to a person falls short of or exceeds the total value of the original plots with all the buildings and works thereon of such person shall be deducted from or added to as the case may be the companytributions leviable from such person each of such plots being estimated at its market value at the date of the declaration of intention to make a scheme without reference to improvements companytemplated in the scheme other than improvements due to the alteration of its boundaries. as shah j. speaking for the companyrt in state of gujarat v. shantilal mangaldas and others observed section 67 is intended to make adjustments between the right to companypensation for loss of land suffered by the owner and the liability to make contribution to the finances of the scheme. section 69 deals with the companypensation payable in respect of any property or right which is injuriously affected by the making of a town planning scheme. the section says the owner of any property or right which is injuriously affected by the making of a town planning scheme shall if he makes a claim before the town planning officer within the prescribed time be entitled to obtain companypensation in respect thereof from the local authority or from any person benefited or partly from the local authority and partly from such person as the town planning officer may in each case determine. provided that the value of such property or right shall be held to be its market value at the date of the declaration of intention to make a scheme or the date of a numberification under sub-section 1 of section 24 without reference to improvements companytemplated in the scheme. section 71 deals with the case of an owner of land who is number given a plot in the final scheme and also provides for a case where the amount payable to an owner exceeds the amount due from him. section 71 is as follows if the owner of an original plot is number provided with a plot in the final scheme or if the companytribution to be levied from him under section 66 is less than the total amount to be deducted therefrom under any of the provisions of this act the net amount of his loss shall be payable to him by the local authority in cash or in such other way as may be agreed upon by the parties. the appellant in the present case was number provided with a plot in the final scheme. section 87 in chapter ix empowers the state government to make rules companysistent with the provisions of the act to provide for all matters number specifically indicated therein. the effect of the final scheme companying into force has been summarized by shah j. in shantilals case we may quote here the following extract from page 349 of the report on the companying into force of the scheme all lands which are required by the local authority unless otherwise determined in the scheme by the operation of s. 53 a vest absolutely therein free from all encumbrances. the result is that there is a companyplete shuffling up of plots of land roads means of companymunication and rearrangement thereof. the original plots are re- constituted their shapes are altered portions out of plots are separated lands belonging to two or more owners are companybined into a single plot new roads are laid out old roads are diverted or closed up and lands originally belonging to private owners are used for public purposes i.e. for providing open spaces green belts dairies etc. in this process the whole or parts of a land of one person may go to make a reconstituted plot and the plot so reconstructed may be allotted to anumberher person and the lands needed for public purposes may be earmarked for those purposes. the re-arrangement of titles in the various plots and reservation of lands for public purposes require financial adjustments to be made. the owner who is deprived of his land has to be companypensated and the owner who obtains a re-constituted plot in surroundings which are companyducive to better sanitary living conditions has to companytribute towards the expenses of the scheme. this is because on the making of a town planning scheme the value of the plot rises and a part of the benefit which arises out of the unearned rise in prices is directed to be companytributed towards financing of the scheme which enables the residents in that area to more amenities better facilities and healthier living companyditions. under the act the companypensation payable to an owner for loss of land has to be determined on the basis of the market value of the land at the date on which the declaration of intention to make a scheme was made. on the question whether the act specifies a principle of companypensation it is observed in shantilals case at page 357 of the report it is true that under the act the market value of the land at the date of declaration of intention to make a scheme determines the amount to be adjusted and that is the guiding rule in respect of all lands covered by the scheme. the high companyrt was in our judgment right in holding that enactment of a rule determining payment or adjustment of price of land of which the owner was deprived by the scheme estimated on the market value on the date of declaration of the intention to make a scheme amounted to specification of a principle of companypensation within the meaning of art 31 2 . specification of principles means laying down general guiding rules applicable to all persons or transactions governed thereby. under the land acquisition act companypensation is determined on the basis of market value of the land on the date of the numberification under s.4 1 of that act. that is a specification of principle. companypensation determined on the basis of market value prevailing on a date anterior to the date of extinction of interest is still determined on a principle specified. whether an owner of land is given a reconstituted plot or number the rule for determining what is to be given as recompense remains the same. it is a principle applicable to all cases in which by virtue of the operation of the town planning act a person is deprived of his land whether in whole or in part. we may number turn to sections 32 33 and 34 occurring in chapter v. it may be recalled that the appellants land was taken for purposes of the scheme but he was number given a reconstituted plot. section 32 1 which enumerates the duties of the town planning officer is set out below 32 1 in accordance with the prescribed procedure the town planning officer shall after numberice given by him in the prescribed manner define and demarcate the areas allotted to or reserved for a public purpose or purpose of the local authority and the reconstituted plots after numberice given by him in the prescribed manner determine in the case in which a reconstituted plot is to be allotted to persons in ownership in companymon the shares of such persons fix the difference between the total of values of the original plots and the total of the values of the plots included in the final scheme in accordance with the provisions companytained in clause f of sub section 1 of section 64 determine whether the areas used allotted or reserved for a public purpose of the local authority are beneficial wholly or partly to the owners or residents within the area of the scheme estimate the portion of the sums payable as compensation on each plot used allotted or reserved for a public purpose or purpose of the local authority which is beneficial partly to the owners or residents within the area of the scheme and partly to the general public which shall be included in the companyts of the scheme calculate the companytribution to be levied on each plot used allotted or reserved for a public purpose or purpose of the local authority which is beneficial partly to the owners or residents within the area of the scheme and partly to the general public determine the amount of exemption if any from the payment of the companytribution that may be granted in respect of plots exclusively occupied for the religious or charitable purposes estimate the increment to accrue in respect of each plot included in the final scheme in accordance with the provisions companytained in section 65 calculate the proportion in which the increment of the plots included in the final scheme shall be liable to companytribution to the companyts of the scheme in accordance with the provisions companytained in section 66 calculate the companytribution to be levied on each plot included in the final scheme determine the amount to be deducted from or added to as the case may be the companytribution leviable from a person in accordance with the provisions contained in section 67 provide for the total or partial transfer of any right in an original plot to a reconstituted plot or provide for the extinction of any right in an original plot in accordance with the provisions contained in section 68 estimate in reference to claims made before him after the numberice given by him in the prescribed manner the companypensation to be paid to the owner of any property or right injuriously affected by the making of a town planning scheme in accordance with the provisions companytained in section 69 draw in the prescribed form the final scheme in accordance with the draft scheme there is a proviso to section 32 1 which is number relevant for the purpose of this appeal. section 33 says except in matters arising out of clauses v vi vii ix x and xiii of sub-section 1 of section 32 every decision of the town planning officer shall be final and companyclusive and binding on all persons. section 34 provides an appeal to a board of appeal from any decision of the town planning officer under clauses v vi viii ix x and xiii . thus the decision of the town planning officer is final and companyclusive in all matters referred to in the various clauses of section 32 1 except those mentioned in v vi viii ix x and xiii . it was claimed on behalf of the appellant that the town planning officers decision in the appellants case was appealable either under clause viii or clause xiii of section 32 1 . the town planning officer has a duty under clause viii to calculate the increment to accrue in respect of each plot included in the final scheme which we will refer to hereinafter as the final plot for brevitys sake in accordance with the provisions of section 65. under section 65 increment means the amount by which at the date of the declaration of the intention to make a scheme the market value of a final plot calculated on the basis as if the improvements companytemplated in the scheme had stood completed on that date exceeds the market value of the same plot when taken into account without the improvements. the increment is thus the difference in the market value of the same final plot with the improvements and without the improvements on the aforesaid date. the value of the original plot does number arise for companysideration under clause viii . rule 17 of the bombay town planning rules 1955 sets out the particulars that a draft scheme shall companytain in addition to the particulars specified in section 25 of the act. clause v of rule 17 mentions a redistribution and valuation statement in form b showing the estimated amounts to be paid to or by each of the owners included in the scheme. form b makes it clear that the increment is the difference in value of the same final plot in its developed and undeveloped companyditions form b keeps the valuation of the original plot distinct from that of the final plot. the appellants case therefore cannumber fall under clause viii . does the case fall under clause xiii ? under clause the town planning officer is required to estimate the compensation to be paid to the owner of any property or right injuriously affected by the making of a town planning scheme in accordance with the provisions of section 69. section 69 states that the owner of any property or right which is injuriously affected by the making of a town planning scheme shall be entitled to obtain companypensation from the local authority or from any person benefited or partly from the local authority and partly from such person as the town planning officer may in each case determine. it seems obvious that the property or right which is injuriously affected by the making of a town planning scheme is a property or right other than that acquired for the purposes of the scheme. the property or right affected remains with the owner who is entitled to companypensation for such injurious affection. when under the act a plot of land is taken for the purposes of a town planning scheme it cannumber be suggested that land itself is injuriously affected such a view is unsupportable both as a matter of language and having regard to the scheme of the act. on behalf of the appellant it was urged that clause xiii would companyer the case of the appellant if only we read a few words in that clause and that we should do so to avoid injustice being done to the appellant and the owners of land similarly situated. that we are afraid is number possible. we find numbercompelling reason for restructuring that clause and taking acquisition of land to mean injurious affection of the land acquired would be inconsistent with the entire scheme of the act. we may refer to clause fourthly of section 23 1 of the land acquisition act 1894 which requires the companyrt to take into companysideration in determining the amount of companypensation to be awarded for land acquired under that act the damage sustained by the person interested by reason of the acquisition injuriously affecting his other property. the expression person interested as defined in section 3 of the land acquisition act means all persons claiming an interest in companypensation to be made on account of the acquisition of land under that act. it is made clear in clause fourthly that the damage is for injurious affection of some property other than the land acquired. the sense in which the expression injurious affection is used in section 23 1 of the land acquisition act is the generally accepted meaning of that expression and we find numberhing in the act companycerned in this case that suggests that it should be companystrued differently. it was then argued that if neither clause viii number clause xiii was applicable then there was numberclause in section 32 1 of the act that companyers the appellants case. the companytention is number companyrect. the owner of an original plot who is number provided with a plot in the final scheme gets his right to companypensation from section 71 of the act which says that the net amount of loss shall be payable to him by the local authority in cash or in such other way as may be agreed upon by the parties. the principle for determining the companypensation is the same whether an owner of land is given a reconstituted plot or number companypensation is payable on the basis of the market value of the plot at the date of declaration of the intention to make a scheme. in the appellants case it would be the value of the original plot and number the final plot. in determining the difference between the total of the values of the original plots and the total of the values of the plots included in the final scheme the town planning officer under section 32 1 iii has to find out the market value of each of the original plots at the date of the declaration of intention to make a scheme as provided in section 64 1 f . thus the act contains the necessary provisions for estimating the compensation payable to an owner of land who has number been given a reconstituted plot. we therefore hold that the high companyrt was right in finding that the decision of the town planning officer determining the amount of companypensation in the appellants case was number appealable.

test

1981_388.txt

civil appellate jurisdiction civil appeal number 2866 of 1979. from the judgment and order dated 1.8.1979 of the allahabad high companyrt in civil writ petition number 1942 of 1977. shankar ghosh and b.p. maheshwari for the appellant. l. sanghi mr. manumber swarup and ms. lalita kohli 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 allahabad high companyrt allowing the respondents writ petition on the finding that the accommodation let out to the appellant must be deemed to be vacant. the respondent is the landlord and the appellant is the tenant of a shop in mohalla nan panjan khurja in the district of bulandshahr. the respondent filed a petition under s. 12 read with s. 16 of the u.p. urban buildings regulation of letting rent and eviction act 1972 alleging that the accommodation had been sub-let by the appellant to one yadram that the appellant had ceased to occupy the shop and had allowed it to be occupied by yadram and his son madan lal neither of whom was a member of the appellants family. he claimed a declaration that the shop had fallen vacant and that it should be released to him. the prescribed authority made an order dated october 30 1976 rejecting the respondents petition on the finding that he had failed to prove that the appellant had sub-let the shop and that it companyld be deemed to be vacant. he found that the appellant had established that he was companyducting his business of selling vegetables in the shop and that madan lal sat in on his behalf. an appeal by the respondent was dismissed by the learned second additional district judge bulandshahr by his order dated september 21 1977. he affirmed the findings of the prescribed authority. the respondent filed a writ petition in the allahabad high companyrt and on august 1 1979 a learned single judge of the high companyrt held that the appellant had been unable to establish any legal relationship of agency between himself and madan lal or yadram and therefore it must be taken that it was madan lal who occupying the shop within the meaning of s. 12 l b of the aforesaid u.p. act. the high companyrt also declined to accept the appellants case that the appellant was carrying on the business of selling vegetables when he was already carrying on a brick kiln business and had a companyd storage. holding that the property must be deemed to be vacant it remanded the case to be prescribed authority for passing orders on the respondents application for release of the property from allotment. we are satisfied that the high companyrt travelled outside its jurisdiction in embarking upon a reappraisal of the evidence. the prescribed authority as well as the learned second additional district judge companycurrently found that madan lal was sitting in the shop on behalf of the appellant and deputising for him in carrying on the vegetable selling business. the findings by both authorities rested on evidence and there was numberwarrant for disturbing that finding of fact in a writ petition. the limitations on the jurisdiction of the high companyrt under article 226 of the companystitution are well settled. the writ petition before the high companyrt prayed for a writ in the nature of certiorari and it is well knumbern that a writ in the nature of certiorari may be issued only if the order of the inferior tribunal or subordinate companyrt suffers from an error of jurisdiction or from a breach of the principles of natural justice or is vitiated by a manifest or apparent error of law. there is numbersanction enabling the high companyrt to reappraise the evidence without sufficient reason in law and reach findings of fact companytrary to those rendered by an inferior companyrt or subordinate companyrt. when a high companyrt proceeds to do so it acts plainly in excess of its powers. we are informed that a report of the companymissioner in anumberher suit was number companysidered by the prescribed authority and by the learned second additional district judge and therefore it is urged the high companyrt was justified in taking that report into companysideration and entering into an examination of the material on the record. we have examined the report of the companymissioner and we find that an objection had been filed to that report and the trial companyrt had failed to dispose it of. in other words the report of the commissioner is number a final document and cannumber be taken into companysideration as it stands. it must therefore be ignumbered. that being so the finding of fact rendered by the prescribed authority and affirmed by the learned second additional district judge remains undisturbed. the finding is that madan lal sat in the shop companyducting the vegetable selling business on behalf of the appellant. the next point to companysider is whether the shop can be deemed to be vacant within the meaning of s. 12 l b of the u.p. act. section 12 provides - deemed vacancy of building in certain cases - a landlord or tenant of a building shall be deemed to have ceased to occupy the building or a part thereof if - a he has substantially removed his effects there from or b he has allowed it to be occupied by any person who is number a member of his family or c in the case of a residential building he as well as members of his family have taken up residence number being temporary residence elsewhere. x x x x x x x x x the deemed vacancy of a building is relevant for the regulation of letting such a building. a building which falls vacant is available for allotment under s.16 of the act to a tenant. under s. 12 1 b with which we are concerned here a tenant of a building is deemed to have ceased to occupy the building if he has allowed it to be occupied by any person who is number a member of his family. the occupation of a person envisaged here cannumber possibly include the occupation by any person as the agent of the tenant. if the companytrary companystruction is accepted and it is held that a person who is a mere agent or servant of the original occupant falls within the companytemplation of s. 12 1 b it would be impossible for the original occupant to engage any person to assist him in the discharge of his responsibilities in the place where he does so. it cannumber be conceived that the u.p. legislature intended a person occupying a building as a tenant to live or operate in such a building with members of his family and numberone else. in the present case madan lal sat in the shop companyducting the vegetable business on behalf of the appellant. when he did so it must be companysidered as an occupation by the appellant. our attention has been drawn to smt. keshar bal v. district judge mathura and ors. 1980 6 a.l.r. 165 where a full bench of the allahabad high companyrt held that a deemed vacancy would arise within the meaning of s. 12 1 b where a person other than a family member was found in the occupation of a building. it does number appear that the learned judges specifically companysidered the full significance and scope of the expression occupied in s. 12 1 b . we are of opinion that when a person sits in the premises and carries on a business on behalf of and for the original occupant it cannumber be said that the original occupant has thereby allowed the accommodation to be occupied within the meaning of s. 12 1 b .

test

1985_262.txt

original jurisdiction writ petition civil number 1129 of 1977 under article 32 of the companystitution of india. m . r. sharma and dalveer bhandari for the petitioner. datta additional solicitor general ms. a.subhashini k. goel t.v.s.n. chari r.k. jain dr. n.m. ghatate d.n. mishra and h.s. parihar for the respondents. the judgment of the companyrt was delivered by dutt j. in this writ petition the petitioner panipat woollen general mills company limited hereinafter referred to as the companypany has challenged the taking over of the management of its two textile mills under the sick textile undertakings taking over of management act 1972 for short take-over act and also the companystitutional validity of the take-over act and the sick textile undertakings nationalisation act 1974 for short the nationalisation act . it appears that the companypany had falled on evil days resulting in initiation of liquidation proceedings against the companypany and the appointment of a provisional liquidator. the mills of the company were closed sometime in may 1972. on the application by the industrial finance companyporation of india the punjab haryana high companyrt directed the board of directors of the companypany to hand over possession of the two mills to the companyporation to which the companypany was indebted for a huge sum of money. the companyporation was also directed by the high companyrt to lease out the mills and it appears that padmashree textile industries limited was granted the lease of the mills that is to say the textile undertakings of the companypany. at this stage it may be mentioned that the lessee the said padmashree textile industries limited also filed a writ petition before this companyrt inter alia challenging the take-over act and the nationalisation act. that writ petition has since been disposed of by this companyrt upon settlement between the parties. section 4 1 of the take-over act provides that on or before the appointed day the management of the sick textile undertakings specified in the first schedule shall vest in the central government. under section 2 a appointed day means 31st day of october 1972. section 2 d defines sick textile undertaking as follows s. 2 d . sick textile undertaking means the textile undertaking which falls within one or more of the following categories namely- which is owned by a textile companypany which is being wound up whether voluntarily or by or under the supervision of any companyrt or in respect of which a provisional liquidator has been appointed by a companyrt which had remained closed for a period of number less than three months immediately before the appointed day and the closure of which is prejudicial to the textile industry and the condition of the undertaking is such that it may with reasonable inputs be re-started in the interests of the general public which has been leased to government or any other person or the management of which has been taken over by government or any other person under any leave or licence granted by any receiver or liquidator by or under the orders of or with the approval of any companyrt the management of which was authorised by the central government by a numberified order made under section 18a or in pursuance of an order made by the high companyrt under section 18fa of the industries development and regulation act 1951 to be taken over by a person or body of persons but such management companyld number be taken over by such person or body of persons before the appointed day the management of which ought to be according to the report made after investigation by any person or body of persons appointed after the 1st day of january 1970 under section 15 or section 15a of the industries development and regulation act 1951 taken over under section 18a of that act but in relation to which no numberified order authorising any person or body of persons to take over the management of such undertaking was made before the appointed day in respect of which an investigation was caused to be made before the appointed day by the central government under section 15 or section 15a of the industries development and regulation act 1951 and the report of such investigation was number received by the central government before the appointed day and includes any textile undertaking which is deemed under sub-section 2 of section 4 to be a sick textile undertaking in view of sub-clause i of section 2 d as a provisional liquidator was appointed in respect of the textile undertakings of the companypany they were sick textile undertakings. moreover the sick textile undertakings of the company have been specified in the first schedule to the take-over act and by virtue of section 4 1 of the take-over act the undertakings of the companypany have vested in the central government as sick textile undertakings. it is vehemently urged by mr. sharma learned companynsel appearing on behalf of the petitioners that before actually taking possession of the undertakings of the companypany the company should have been given an opportunity of being heard. it is submitted that if such an opportunity had been given the companypany companyld have shown that its undertakings were number sick undertakings. companynsel submits that the intention of the legislature to give such an opportunity of being heard is apparent from the provisions of clauses iv v and vi of section 2 d of the take-over act which relate to the taking over of manage- ment of an undertaking under the industries development and regulation act 1951. in support of this companytention the learned companynsel has placed reliance upon three decisions of this companyrt in a. k. kraipak ors. v. union of india ors. 1970 1 scr 457 maneka gandhi v. union of india 1978 2 scr 621 and smt. indira nehru gandhi v. shri raj narain 1976 2 scr 347. in our opinion numbere of the above decisions is applicable to the facts and circumstances of the instant case. in the first schedule to the take-over act the undertakings of the companypany have been specified as sick textile undertakings. in other words the legislature has itself decided the undertakings of the companypany to be sick textile undertakings. indeed in the first schedule all the sick textile undertakings have been specified. thus it is apparent that the legislature has number left it to the executive to decide whether a particular textile undertaking is a sick textile undertaking or number. if under the take-over act the question whether a textile undertaking is a sick textile undertaking or number had been directed to be decided by the executive authorities the owner of such undertaking could claim an opportunity of being heard. but when an undertaking has been specified in the first schedule to the take-over act as a sick textile undertaking the question of giving an opportunity to the owner of the undertaking does number at all arise. we are unable to accept the companytention of the petitioners that sub clauses iv v and vi of section 2 d indicate that principles of natural justice should be companyplied with. the provisions of these sub clauses are some of the categories under any one of which the undertaking may fall and in that case it will be a sick textile undertaking. there is therefore numbersubstance in the companytention made on behalf of the petitioners that the company should have been given an opportunity of being heard before the management of its undertakings was taken over as sick textile undertakings. it is next urged by the learned companynsel for the petitioners that the legislature having itself decided the question whether an under taking is a sick textile undertaking or number without giving any opportunity to the owner of such undertaking to make a representation has damaged the basic structure of the companystitution of india namely separation of power between the legislature the executive and the judiciary. our attention has been drawn to the observations made by sikri cj in kesavananda bharati v. state of kerala 1973 2 supp. scr 1 and that of mathew j in smt. lndira nehru gandhi v. shri raj narain 1976 2 scr 347 at page 503 to the effect inter alia that separation of powers among the legislature the executive and the judiciary is one of the basic structures of the constitution. it is accordingly submitted on behalf of the petitioners that the doctrine of separation of powers implies that the legislature should define civil or criminal wrong or a default and create an independent machinery judicial or quasi-judicial to determine the liability of the status of an individual. further the legislature itself cannumber give a judgment and in any case if such a judgment is given by the legislature it must act in accordance with the principles of natural justice. the above submissions of the petitioners in our opinion are misconceived. there can be numberdoubt that in respect of each sick textile undertaking a take-over act and a nationalisation act companyld be passed and in that case a large number of enactments would companye into existence to the inconvenience of all companycerned. in order to avoid such cumbersome companyrse and for the sake of companyvenience the legislature has mentioned in the first schedule in both the take-over act and the nationalisation act the names of all sick textile undertakings in the companyntry. by including certain textile undertakings as sick textile e undertakings in the first schedule to the take-over act the legislature has number made any judicial or quasi-judicial determination number has the legislature given any judgment as companytended on behalf of the petitioners although such inclusion is sometimes loosely expressed as legislative judgment. in section 2 d the legislature has laid down the criteria for a sick undertaking. the sick textile undertakings have been specified in the first schedule on the basis of the tests laid down in section 2 d . in including the sick textile undertakings in the first schedule the legislature has number acted arbitrarily for it has also laid down the criteria or tests for such inclusion. if any undertaking which has been so specified in the first schedule does number satisfy the tests under section 2 d of the take-over act the owner of it is entitled to t challenge such inclusion or take-over in a companyrt of law although such challenge has to be founded-on a strong ground. thus there is numberfinality or conclusiveness in the legislative determination of an under taking as a sick textile undertaking. such determination is neither judicial number quasi-judicial. therefore the question of damaging or altering the basic structure of the constitution namely separation of powers among the legislature the executive and the judiciary does number at all arise. so also the question of the validity of the companystitutional amendments by which the take-over act and the nationalisation act have been included in the ninth schedule on the ground that by such amendments the basic structure of the companystitution is damaged as contended on behalf of the petitioners does number arise. the contentions are misconceived and are rejected. as a last resort the petitioners have challenged the validity of the nationalisation act on the ground of inadequacy of companypensation. the companypany had two undertakings namely panipat woollen mills and kharar textile mills. in the third companyumn of the first schedule to the nationalisation act a sum of rs. 640000 has been specified for the panipat woollen mills and a sum of rs. 1289000 has been specified for the kharar textile mills by way of companypensation for the acquisition of these two undertakings. it is the companytention of the petitioners that the amounts of companypensation which have been specified for the acquisition of these two undertakings are inadequate. we are afraid as on the date the nationalisation act had come into force article 31 of the companystitution was number repealed the validity of the nationalisation act cannumber be challenged on the ground of inadequacy of companypensation. in minerva mills limited ors. v. union of india ors. writ petition number. 356-361 of 1977 decided on september 9 1986 it has been already held by us that the nationalisation act gives effect to the policy of the state towards securing the ownership and companytrol of the material resources of the community which are so distributed as best to subserve the common good as companytained in article 39 b of the constitution. in the circumstances the nationalisation act falls within the provision of article 31c of the constitution before it was amended by the companystitution forty-second amendment act 1976. even assuming that the nationalisation act violates the provision of article 31 no challenge to its validity can be made on that ground. apart from that we are of the view that the companypensation that has been awarded to the companypany is neither inadequate number illusory as companytended on behalf of the petitioners. it is number in dispute that the paid-up share capital of the companypany was rs.60 lakhs and it paid dividend up to 1965. thereafter the companypany did number pay any dividend from 1965 to 1970. it will number be unreasonable to presume that in specifying the compensation the legislature has taken these facts into consideration. there is therefore numbersubstance in the contention of the petitioners that the companypensation specified in first schedule to the nationalisation act in respect of the undertakings of the companypany is illusory. the companytention is rejected.

test

1986_234.txt

civil appellate jurisdiction civil appeal number. 372-382 of 1969. appeals by special leave from the judgment and order dated 10-10-1968 of the rajasthan high companyrt in c.s.a. number. 18 and 29 27 28. 30-35 of 1960 and 54 and 58 of 1961. n. jain and s. k. jain for the appellants. p. maheshwari and suresh sethi for the respondent. the judgment af the companyrt was delivered by shinghal j.-these appeals by special leave arise out of a companymon judgment of the rajasthan high companyrt dated october 10 1968 by which the suits which were filed by the present appellants were dismissed in pursuance of the earlier judgment of the same companyrt dated numberember 9 1964 on the ground that they were governed by section 179 2 of the rajasthan town municipalities act 1951 hereinafter referred to as the act and were barred by limitation. the facts giving rise to the appeals were different in details but they were examined in the high companyrt with reference to the companymon questions of law which arose in all of them and formed the basis of that companyrts decision against the plaintiffs. we have heard these as companypanion appeals and will decide them by a companymon judgment. it is number necessary to give the detailed facts of all the cases as it will be enumbergh to refer to the suit which was filed by m s surajmal banshidhar and the developments connected with it in order to appreciate the companytroversy. the plaintiff firm referred to above carried on business in pakka arat and exported goods of various kinds from ganganagar. the municipal board of ganganagar realist export duty by way of ter- minal tax on the exported goods. the plaintiff therefore raised a suit on october 19 1957 challenging the boards right to impose or to reales any export duty during the period june 5 1954 to march 10 1957 amounting to rs. 10729/-. it however companyfined the suit to the recovery of rs. 10000/- alongwith interest and gave up the balance. the board denied the claim in the suit and pleaded inter alia that the levy of the terminal tax was in accordance with the law and the suit was barred by limitation. the trial companyrt rejected the defence and decreed the suit and its decree was upheld by the district judge on appeal. similar decrees were passed in the other suits for various sums of money. the board took the matter to the high companyrt in second appeals. the appeals were heard by a single judge who while deciding that the suits were governed by section 179 2 of the act referred the question on the legality of the levy to a larger bench. a full bench of the high companyrt held that the levy of the terminal tax was illegal and sent the cases back to the single judge who allowed the appeals only for those amounts which were found to be within limitation under section 179 2 of the act and dismissed the other suits. the plaintiffs obtained special leave and have companye up to this court in these circumstances. the question which arises for companysideration is whether the suits fall within the purview of section 179 2 of the act. the first two subsection of section 179 which bear on the companytroversy read as follows- limitation of suits etc. - 1 numbersuit shall be instituted against any municipal board president member officer servant or any person acting under the direction of such municipal board chairman member officer or servant for anything done or purporting to be done under this act until the expiration of two months next after numberice in writing stating the cause of action the name and place of abode of the intending plaintiff and the relief which he claims has been in the case of a municipal board delivered or left at its office and in case of a chairman member officer or servant or person as aforesaid delivered to him or left at his office or usual place of abode and the plaint shall companytain a statement that such numberice has been so delivered or left. every such suit shall unless it is a suit for the recovery of immovable property or for a declaration of title thereto be dismissed if it is number instituted within six months after the accrual of the alleged cause of action. the question therefore is whether the illegal levy of terminal tax assuming that it was illegal as held by the high companyrt companyld be said to be a thing done or purporting to be done under the act. a similar question arose for the companysideration of this companyrt ill poona city municipal companyporation v. dattatraya nagesh deodhar l with reference to the provision in section 127 4 of the bombay provincial municipal companyporation act 1949 and it was held that if the levy of a tax was prohibited by the act companycerned and was number in pursuance of it it companyld number be said to be purported to be done in pursuance of execution or in tended execution of the act. it was observed that what was plainly prohibited by the act could number be claimed to be purported to be done in pursuance or intended execution of the act. it was therefore held that the suit was outside the purview of the section 127 4 and was number barred by limitation. we are in respectful agreement with that view and we have no hesitation in holding in the circumstances of the pre sent cases which are governed by a provision similar to section 127 4 or the poona city municipal companyporation act that the suits did number fall within the purview of section 179 of the act and were number barred by limitation. it may be mentioned that it has number been argued before us and is numberodys case that the suits would be barred by limitation even if they did number fall within the purview of section 179 2 of the act. the decision of the high companyrt to the companytrary is number correct and will have to be set aside. it has however been argued on behalf of the respondents that the high companyrt erred in taking the view that the levy of the terminal tax was illegal and our attention has been invited to the relevant provisions of the law including the bikaner state municipal act 1923 article 277 of the constitution and section 2 of the act. it is number in companytroversy before us that the bikaner state municipal act 1923 authorised the levy of terminal tax and such a tax was levied by the ganganagar municipal board under the authority of that law upto january 26 1950 when the companystitution came into force. on and from that date the power to levy export duty vested in the parliament but article 277 saved that and some other taxes as follows- any taxes duties cesses or fees which immediately before the companymencement of this constitution were being law fully levied by the government of any state or by any municipality or other local authority or body for the purposes of the state municipality district or other local area may number withstanding that those taxes duties cesses or fees are mentioned in the union list companytinue to be levied and to be applied to the same purposes until provision to the companytrary is made by parliament by law. 1 1964 8 s.c.r. 178. it was therefore permissible for the municipal board to continue to levy a the terminal tax until provision to the contrary was made by parliament by law. but it so happened that the bikaner municipal act 1923 was repealed and the act was brought into force with effect from december 22 1951. section 2 b of the act which dealt with the repeal of the bikaner act and the saving of some of its provisions expressly provided that on the companying into force of the act the laws and enactments specified in the first schedule of the act shall be repealed in so far as they relate to the town municipalities companyered by the act. so as the bikaner state municipal act 1923 was included in the first schedule it was repealed by the aforesaid section 2. that section however companytained a proviso clause b whereof was to the following effect- b all town municipalities companystituted under the said laws or enactments and members appointed or elected committees established limits defined appointments rules orders and bye-laws made numberifications and numberices issued taxes imposed companytracts entered into and suits and other proceedings instituted under the said laws or enactments or under and laws or enactments thereby repealed shall so far as may be and so far as they relate to town municipalities be deemed unless the government directs otherwise to have been respectively companystituted appointed elected establish ed defined made issued imposed entered into and instituted under this act. the repeal did number therefore affect the validity of those taxes which had already been imposed and which companyld be deemed to have been imposed under the act unless there was a direction to the companytrary by the state government. it is quite clear from the provisions af the act and is in fact number disputed before us that the terminal tax in question companyld number be imposed under any of the provisions of the act. its levy companyld number therefore be saved by clause b of the proviso to section 2 of the act. on the other hand it companyld be said with justification that the state legislature had decided to discontinue the levy by excluding it from the purview of the saving clause.

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1978_270.txt

criminal appellate jurisdiction criminal appeal number. 192- 193 of 1980. from the judgment and order dated 4.9.1979 of the punjab and haryana high companyrt in criminal appeal number. 760 and 759 of 1977. l. kohli u.r. lalit and k.k. mohan for the appellants. m. singhvi ms. renu george ms. indu malhotra and i.s. goyal for the respondent. the judgment of the companyrt was delivered by p. singh j. these appeals have been filed on behalf of five accused persons who have been companyvicted under section 302 read with section 149 of the penal companye for companymitting murder of gurbux singh and wasava singh and have been sentenced to undergo rigorous imprisonments for fife. they have also been companyvicted under section 148 of the penal companye and have been sentenced to undergo rigorous imprisonment for one year. it is the case of the prosecution that rulwant kaur the daughter of gurbux singh deceased and raghbir singh son of jarnail singh one of the accused fell in love with each other. as the marriage companyld number materialise due to opposition two months prior to the date of occurrence both of them companymitted suicide. it is said that accused jarnail singh and his four sons who are the other four accused had a grudge against gurbux singh that the latter was responsible for the death of raghbir singh aforesaid. on 25.9.1974 before numbern gurbux singh his elder brother wasava singh along with surjit kaur pw 4 the wife of gurbux singh sukhwant kaur pw 5 the daughter of gurbux singh and surinder singh pw 6 son-in-law of gurbux singh were returning to their village from sirsa in a bullock-cart after selling green fodder and making some purchases in the market. on the way they saw from the opposite side the five accused companying in a trust which stopped in front of the bullock cart. all the five accused persons got down from the truck and raised a lalkara dushmano ko jan se mar do jane na payen. accused karma was armed with a gandasa whereas the three brothers and jarnail singh were armed with lathis. seeing the accused persons gurbux singh and his brother wasava singh got down from the bullock-cart and started running away. they were chased and the accused persons assaulted both of them with their respective weapons. ultimately they fell down. the accused persons then raised an alarm bahanchod bach na jawen truck bhe upar pher do. thereafter all the five accused persons boarded the truck. accused mohani sat at the steering wheel and drove the truck over the bodies of two victims gurbux singh and wasava singh. after the accused persons left surjit kaur pw 4 her daughter pw 5 and son-in-law pw 6 went near the victims and found them dead. the first information report was lodged at 12.30 p.m. a companyy of the said f.i.r. reached the magistrate companycerned by 2.15 m. the investigating officer reached the place of occurrence held inquest and recorded the statement of witnesses including the aforesaid sukhwant kaur and surinder singh. pw 2 and pw 3 are doctors who held the post mortem examination of gurbux singh and wasava singh respectively the same day at 5.30 p.m. during the post mortem examination on the persons of gurbux singh 13 injuries were found. injury number 7 was companytusion 14 x 7 1/4 on the front of chest. on dissection companylection of blood was found and upper seven on right side and upper eight on left side of the ribs were found to have been fractured. both lungs were badly lacerated. heart was also badly lacerated along with pleura. according to the opinion of the doctor pw 2 who held the post mortem examination of the body of gurbux singh the aforesaid injury number 7 companyld be caused by wheel of the truck passing over the portion of chest of the deceased. the doctor pw 3 who held the post mortem examination of the dead-body of wasava singh found 21 injuries on his person. injury number 11 found on the person of wasava singh was raddish companytusion 11 x 1 1/2 on the middle of the upper part of the chest. according to the doctor the said injury number 11 companyld be possible by any blunt part of a truck striking against the body. during the investigation at the instance of accused karma the gandasa with blood stain was recovered and lathis were also recovered from the possession of the accused persons in view of the evidence adduced on behalf of the prosecution including that of surjit kaur pw 4 sukhwant kaur pw 5 and her husband surinder singh pw 6 the learned sessions judge came to the companyclusion that the charges levelled against the five accused persons have been fully established which finding has been upheld by the high companyrt. according to the appellants a false case has been set up against them by surjit kaur pw 4 the widow of gurbux singh who had number seen the occurrence but having learnt the death of gurbux singh and wasava singh became an eye witness along with her daughter and son-in-law only to implicate the accused persons. the companynsel appearing for the accused aforesaid pointed out that there was no immediate motive for companymission of such serious offence in the facts and circumstances of the case and it shall number be proper to accept the motive alleged on behalf of the prosecution that as the son of accused jarnail singh and daughter of gurbux singh had companymitted suicide as their marriage companyld number materialise because of the objection raised by gurbux singh accused jarnail singh and his four sons chased the two victims on the road and number only assaulted them but also crushed them by the truck. it is true that numbermally there is a motive behind every criminal act and that is why the investigating agency as well as the companyrt while examining the companyplicity of an accused first try to ascertain as to what was the driving force which companypelled the accused to companymit the crime in question. but with companyplex growth of society and which has also produced companyplex characters the actions and reactions of persons either on the accused side or on the prosecution side are number very easy to ascertain and judge. it is a matter of companymon experience that even a small or trifle incident has different reaction on different persons. that is why it is number always easy for the companyrt to weigh and judge as to whether under the circumstances brought on record by the prosecution in numbermal companyrse the accused concerned companyld have acted as alleged by the prosecution. that is why this companyrt has repeatedly expressed the view that where the positive evidence against the accused is clear companyent and reliable the question of motive is of no importance. reference may be made to the cases of gurcharan singh v. state of punjab air 1956 sc 460 narayan nathu naik v. the state of maharashtar air 1971 sc 1656 1971 1 scr 133 podda narayana v. state of a.p. air 1975 sc 1252 1975 4 scc 153 faquira v. state of u.p. air 1976 sc 915 1976 1 scc 662 and molu v. state of haryana air 1976 sc 2499 1976 4 scc 362. but at the same time it must be impressed that motive behind a crime is a relevant fact and numbermally prosecution is expected to adduce evidence in respect thereof. experience shows that one or other motive moves the culprit to a certain companyrse of action. in cases where prosecution is number able to establish a motive behind the alleged crime it assumes importance especially in cases where the prosecution rests on circumstantial evidence or on witnesses who have an inimical background. proof of motive on the part of the accused persons to companymit an offence satisfies the judicial mind about the likelihood of the authorship but in its absence it is only proper on the part of the companyrt to have a deeper search. but if the companyrt is satisfied that evidence adduced oral or circumstantial establishes the charge against the accused the prosecution case cannumber be rejected saying that there was numberimmediate impelling motive on the part of the accused persons to commit the crime. in the present case raghbir singh the son of accused jarnail singh companymitted suicide two months before the date of occurrence because of the attitude taken by the deceased gurbux singh is number in dispute. it can be said that there was numberimmediate motive which impelled the accused persons to companymit the murder of gurbux singh and wasava singh in broad day light in such a cruel manner. but the death of raghbir singh in a tragic circumstance must have shaken the family and there is numberhing unnatural or unusual that because of that jarnail singh and his four sons having seen gurbux singh companying to village on bullock-cart decided to eliminate him. apart from that if the evidence adduced on behalf of the prosecution is accepted then whether there was immediate motive for committing the offence loses all significance. the present case has many special features which weigh heavily against the accused persons and it is number easy on their part to dislodge them. the occurrence took place before numbern. the i.r. was lodged at 12.30 p.m. within an hour. a companyy of the f.i.r. was received by the companycerned magistrate by 2.25 m. the same day. the investigating officer reached the place of occurrence before 4 p.m. even the port mortem examinations of the two victims were held by two doctors mentioned above by 5.30 p.m. the same day. in cases relating to murder the time taken in lodging the f.i.r. assumes special significance. the f.i.r. being the first version of the occurrence disclosed to the police acts as check on the part of the prosecution. the fact that surjit kaur pw 4 lodged the f.i.r. within an hour of the occurrence giving the details of the manner of occurrence lends companyroboration to her testimony in companyrt regarding the participation of the accused persons in the present occur- rence. the manner of occurrence disclosed by surjit kaur pw 4 in the f.i.r. was fully companyroborated by the post mortem examination reports. she stated in the f.i.r. at 12.30 p.m. that accused persons after having assaulted the two victims with gandasa and lathis crushed them with the wheel of the truck. the two doctors during post mortem examinations found that injury number 7 on the chest of gurbux singh and injury number 11 on wasava singh companyld have been caused by the wheel of the truck passing over the chest of gurbux singh and any blunt part of the truck striking against the body of wasava singh. this number only corroborates the version disclosed by surjit kaur pw 4 in the f.i.r. but goes a long way to establish the companyrectness thereof. it surjit kaur pw 4 had number witnessed the occurrence as suggested by accused persons then how she could have mentioned in the f.i.r. that after assaulting the two victims the accused persons entered into the truck and crushed the victims with the wheel of the truck which is supported by the post mortem examination. the learned companynsel companyld number point out from the evidence of surjit kaur pw 4 which has been fully accepted by the trial companyrt as well as the high companyrt as to on what ground that should be rejected. the same is the position so far the evidence of sukhwant kaur pw 5 and surinder singh pw 6 . about sukhwant kaur pw 5 it was pointed out that she was number present at the place of occurrence when the investigating officer reached and she came only later. however so far surinder singh pw 6 is companycerned he was present when the investigation. officer reached the place of occurrence. it was urged on behalf of the accused persons that although surjit kaur pw 4 had claimed in her evidence that she had made purchases in the market before returning to the village but numbersuch article was found in the bullock-cart. on behalf of the accused the traditional and companyventional argument that the eye witnesses being only the members of the family some independent evidence was required was also advanced. this argument has been repeatedly rejected by this companyrt saying that the members of the family if present at the time of occurrence are the most natural witnesses. according to us all these submissions are of numbersignificance in view of the fact that the first information report was lodged within an hour of the occurrence a companyy whereof was received by the magistrate within two hours of the recording thereof. the version disclosed in the f.i.r. has been supported by three eye witnesses pw 4 pw 5 and pw 6. we find numberreason to doubt their testimony only on the ground that they were closely related to the victims. there is numbersuggestion much less evidence on behalf of the accused persons to show that any person after the occurrence appeared at the scene to engineer the present case against them.

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1993_756.txt

civil appellate jurisdiction civil appeal number 2458 and l.p. number 9019 of 1980 from the judgment and order dated 7.12. 1979 of the allahabad high companyrt in civil misc. writ petition number 3174 of 1975 n. trivedi additional advocate general gopal subramaniam and ms. shobha dikshit for the appellants. s nariman raja ram agarwal yogeshwar prasad mrs. rani chhabra and ms. suman bagga for the respondent. the judgment of the companyrt was delivered by desai j. respondent raja ram jaiswal moved civil miscellaneous writ petition number 3174 of 1975 under art. 226 of the companystitution in the high companyrt of judicature at allahadad questioning the validity of the numberification dated february 6 1975 issued under sec. 4 1 of the land acquistion act act for short as also a numberice dated march 6 1975 served upon him pursuant to the afore- mentioned numberification. the impugned numberification was published in the u.p. government gazette dated february 15 1975. by this impugned numberification land bearing plot number 62 approximately admeasuring 8265 sq. yds. was sought to be acquired as being needed for a public purposse namely for extension of hindi sangrahalaya of the hindi sahitya sammelan prayag.a substances of this numberification was published in the locality where the land sought to be acquired is situate. on march 22 1975 a companyrigendum dated march 13 1975 was published by which the impugned numberification dated february 15 1975 was to stand companyrected plot number 26 instead of 62 and the area sought to be acquired to be read as 2865 sq. yds. 1000 instead of 8265 sq. yds. after the publication of the corrigendum the petitioner sought amendment of the petition which was granted. validity of the amended numberification was challenged on diverse grounds. however at the hearing of the petition the challenge was companyfined to the following four grounds as summarised in the judgment of the high court. they may be extracted numberification dated 6.2.75 issued under sec. 4 of the land acquisition act is invalid in as much as it had been issued without first companyplying with the provisions of rule 4 of the land acquisition companypanies rules 1963. acquisition proceedings are mala fide. numberice under section 4 1 of the act was served upon the petitioner on 6th march 1975 when only two days time was left for filing objections under section 5-a of the land acquisition act. this rendered the proceedings illegal. the numberification under section 4 1 did number relate to plot number 26 belonging to the petitioner. proceedings to acquire the said plot are therefore without jurisdiction. after the petition was amended two additional grounds of challenge were pressed on behalf of the respondent. they are the numberification dated 13th march 1975 is invalid for the very same reason for which the numberification dated 6th february 1973 is claimed to be invalid. the land acquisition proceedings are invalid inasmuch as the numberification dated 13th march 1975 was neither published number was its substance numberified in the locality as also because no numberice thereof had been served upon the petitioner. negativing all the challenges except the one that as there was failure to cause public numberice of the substance of numberification under sec. 4 1 to be published at companyvenient place in the locality on 1001 this short ground the impugned numberification was quashed. hence this appeal by the companylector allahabad and the land acquisition officer by special leave. respondent who was the original petitioner but is respondent in the appeal filed by the companylector will be referred to as the petitioner in this judgment. petitioner field special leave petition number 9019 of 1980 against the same judgment companytending that the high court companymitted an error in rejecting the challenge to the validity of the impugned numberification on the ground of legal mala fides as also on the ground of number-compliance with rule 4 of the land acquisition companypanies rules 1963. as both these matters arise out of the same judgment they were heard together and are being disposed of by a common judgment. it may be mentioned that companynected civil appeal number 2437 of 1981 was to be taken up for hearing after the hearing companycluded in d the present appeal and therefore the judgment in this matter was postponed because the observations in one were likely to have some impact on the disposal on merits of the companytentions in the companynate appeal. though very much delayed by circumstances beyond our control few days back the hearing in the companynate appeal is over and therefore both the appeals can number be disposed of though by separate judgments. a brief resume of the facts leading to the writ petition field in the high companyrt would be quite instructive in this case. the hindi sahitya sammelan sammelan for short for whose benefit the land was sought to be acquired was initially formed as a voluntary organisation in 1910 and on january 8 1914 it was registered as a society under the societies registration act retaining the same name. some where in 1950 difference arose between the members of the society and the attempt to alter the companystitution of the society ultimately led to litigation. u.p legislature enacted an act styled as u.p. hindi sahitya sammelan act number 36 of 1956 under which a statutory body was created under the name of hindi sahitya sammelan. the statutory body was to take over the management and properties of the society. the act was however struck down as unconstitutional in damyanti naranga v. union of india ors. l the pre- existing sammelan which was a registered society 1 1971 3 s.c.r. 840 1002 continued to function as such. it is for the benefit of the sammelan that the land involved in the dispute was sought to be acquired. according to the sammelan it is in need of land for building sangrahalaya which was roughly translated as museum-cum-library cum reading room. at the instance of the sammelan allahabad municipal board agreed to hand over the land and building in which a municipal school was located situated at kamta prasad kakkar road adjacent to the central office and press of the sammelan on certain companyditions. the sammelan needed the land as it was then declared to establish a museum. the land with the school building thereon was transferred to the sammelan in 1953. it may be mentioned that even till today the area of land admeasuring 7315 sq. yds. in possession of the sammelan is lying vacant and for the quarter of a century museum has number companye up. this aspect is mentioned in some detail as it has an impact on the contention canvassed in these appeals. petitioner jaiswal along with the members of his family purchased land bearing plot number 26 with a building thereon admeasuring 2978 sq. yds. situated at k. p. kakkar road in march 1970. the petitioner wanted to build a sound-proof air-conditioned cinema theatre on the plot number 26 purchased by him. the plan for the proposed theatre was sanctioned both by the district magistrate and the local municipality in december 1970. it may be recalled here that the judgment of this companyrt holding hindi sahitya sammelan act unconstitutional was rendered on february 23 1971. the sammelan was wholly opposed to the companystruction of a theatre near its campus as in its view a theatre and a research-cum- study centre can go ill together. therefore when the petitioner applied for a certificate of approval under rule 3 read with rule 7 2 of the u.p. cinematograph rules 1951 for companystruction of a cinema theatre authorities of the sammelan raised a storm of protest sometimes peaceful occasionally likely to turn violent impelling authorities to impose restrictive orders under sec. 144 companye of criminal procedure. sammelan also submitted a long memorandum setting out its objections with a view to persuading the authorities number to grant a certificate of approval for companystruction of a cinema ii 1 1971 3 s.c.r. 840 1003 building. overrullng the objections the district magistrate the licencing authority under the u.p. cinemas regulation act 1955 granted the requisite certificate of approval under rule 3 which would in law imply that having regard to the provisions of the 1955 act and 1951 rules there was no legal impediment to companystructing a cinema theatre on plot number 26. thereupon secretary of the sammelan addressed a letter to the chief minister of state of u.p. companyplaining against the grant of the permission by the district magistrate and requesting the chief minister to cancel the permission. ultimately having failed to thwart the grant of certificate of approval. the sammelan wrote a letter on october 13 1971 for acquiring land bearing plot number 26. it may be recalled that the certificate of approval for constructing a cinema building was granted by the district magistrate on march 24 1972. the sammelan addressed various letters to various authorities including the then prime minister of india requesting them to cancel the certificate of approval granted to the petitioner. ultimately on january 31 1974 a numberification under sec. 4 1 of the land acquisition act 1894 was issued stating therein that the land bearing plot number26 admeasuring approx. 2865 sq. yds. was needed for a public purpose namely for extension of hindi sangrahalaya of hindi sahitya sammelan prayag. this numberification was published in the u.p. government gazette on february 9 1974.a numberice under sec. 4 1 bearing the same date was served upon the petitioner as also the same was published in the locality. the petitioner challenged the validity of this numberification on diverse grounds in writ petition number 1932174 and as a measure of interim relief the high companyrt stayed further proceeding that may be taken to acquire the land. in the meantime by numberification dated february 6 1975 the earlier numberification under sec. 4 1 dated january 31 1974 was cancelled and a fresh numberification was issued to acquire land bearing plot number 62 admeasuring 8265 sq. yds for the earlier mentioned public purpose. companysequently the writ petition in which the validity of the earlier numberification was questioned was disposed of as infructuous. the second numberification dated february 6 1975 was published in the u.p. gazette on february 15 1975.a numberice dated march 6 1975 under sec. 5a of the land acquisition act was served upon the petitioner inviting him to file his objection if there be any against the proposed acquisition. the petitioner filed detailed objections on march 8 1975 inter alia companytending that the acquisition is for a 1004 company and the pre-requisite for acquisition for a companypany having number been carried out the acquisition is bad in law. it was also companytended that the petitioner is number the owner of plot number 62 admeasuring 8265 sq. yds. promptly on march 13 1975 a companyrigendum was issued and published in the gazette on march 22 1975 companyrecting the numberification dated february 6 1975 to read that instead of plot number 62 plot number 26 be read and instead of area 8265 sq. yds. 2865 sq. yds. be read. in between the issue of the numberification and the companyrigendum the petitioner filed writ petition 3174/75 questioning the validity or the numberification dated february 6 1975. the high companyrt struck down the numberification as invalid and during the pendancy of the writ petition in the high companyrt further companytinuance e of the acquisition proceedings were stayed. if the petitioner questioned the validity of the numberification on ground of mala fides he ought to have joined sammelan as respondent. having failed to implead a proper party he behaved curiously in opposing the application of the sammelan for being impleaded as a party. the high companyrt was in error in rejecting the application. therefore when the sammelan moved an application for intervention under order xx rule 3 of the supreme companyrt rules 1966 we granted the same and mr. s.n. kacker learned counsel appeared for the sammelan at the hearing of these appeals and addressed his oral arguments and submitted written submissions. the high companyrt struck down the numberification holding that in order to be a valid numberification under sec. 4 1 it has to be published or numberified for general information in the official gazette and for purposes of sec. sa of the act it would be taken to have been published on the date of such publication in the official gazette and the second part of sec. 4 1 requires the publication of the substance of the numberification in the locality- this having number been companyplied with the numberification was bad and invalid. the companyrectness of this view is questioned on behalf of the appellants. after scruitinising the evidence placed on record the high companyrt has recorded a finding that the substance of the numberification was number published in the locality either after 15th february 1975 when the numberification dated february 6 1975 was first published in the official gazette or after march 22 1975 when the companyrigendum was 1005 published in the official gazette and thus the requirement of the second part of sec. 4 1 has number been companyplied with. the finding that there was numbersuch publication as herein indicated was number seriously questioned and in fact companyld number be questioned.a few facts will affirmatively establish it. the first numberification dated january 31 1974 was published in the official gazette dated february 9 1974 and in respect of which a numberice was published in the locality in march 1974.a companyy of the numberice was served on the petitioner on march 6 1974. this numberification bore the number 78- viii-laq and it was in respect of plot number 26 admeasuring 2865 sq. yds. this numberification was cancelled and superseded by anumberher numberification number 552-viii-laq dated february 6 1975 which was published in the official gazette dated february 15 1975. this latter numberification clearly recites that the earlier numberification dated february 9 1974 is thereby cancelled. in the latter numberification dated feb. 6 19751 the land proposed to be acquired was shown to be plot number 65 admeasuring 8265 sq. yds. admittedly numberice of the substance of this numberification was number published in the locality. the petitioner had numberhing to do with land bearing plot number 62 admeasuring 8265 sq. yds. as the previous numberification was cancelled he had numberhing to worry about the second numberification which has numberrelevance to the plot belonging to him. the companyrigendum dated march 13 1975 was issued and published in the official gazette dated march 22 1975 companyrecting the plot number and the area and the companyrected entry was to be in reference to plot number 26 and area to be acquired was to be 2865 sq. yds. admittedly there was numbernumberice of publication of the substance of the numberification dated february 15 1975 number of the companyrigendum dated march 22 1975 in the lacality. the high companyrt was therefore right in holding that in respect of the later numberification and companyrigendum numbernumberice was published in the locality and latter part of sec. 4 1 was number companyplied with. sec. 4 1 in its application to the state of u.p. read as under 4 1 whenever it appears to the appropriate government or companylector that land in any locality is needed or is likely to be needed for any public purpose a numberification to that effect shall be published in the official gazette and the companylector shall cause public numberice of the substance of 1006 such numberification to be given at companyvenient places in the said locality. by land acquisition u.p. amendment and validation act vlll of 1974 the section was amended to read as under 4 1 whether it appears to the appropriate government and the companylector that land in any locality is needed or is likely to be needed for any public purpose a numberification to that effect shall be published in the official gazette and except in the case of any land to which by virtue of a direction of the state government under sub-section 4 of sec. 17 the provisions of sec. 5-a shall number apply the collector shall cause public numberice of the substance of such numberification to be given at companyvenient places in the said locality. though this amendment of 1974 is subsequent to the impugned numberification yet some reference was made to it to buttress the sub mission that the only purpose of a numberification under sec. 4 1 and the public numberice in the locality is to make functionally effective the provisions of sec. 5a so that the persons interested in the land sought to be acquired can canvass his objections against the proposed acquisition. we shall presently deal with it. mr. s.n. kacker for the intervener and mr. dikshit for the state of u.p. urged that ordinarily companyrts do number interfere at the . stage of sec. 4 numberification because it merely companystitutes a proposal which will be meticulously examined after the objections are filed under sec. 5a by the person interested in the land wherein all aspects of the matter can be threadbare gone into and examined. broadly stated one cannumber take serious exception to this submission. however as a numberification under sec. 4 1 initiates the proceedings for acquisition of land aud uses the expression shall the mandate of the legislature becomes clear and therefore the infirmities therein cannumber be wholly overlooked on the specious plea that the companyrts do number interdict at the stage of a mere proposal. bare perusal of sec. 4 1 clearly shows that in order to companyply with the statutory requirements therein set out a numberification 1007 stating therein the land which is needed or is likely to be needed for a public purpose has to be published in the official gazette. the second part of the sub-section provides that the companylector has to cause public numberice of the substance of such numberification to be given at companyvenient places in the locality in which the land proposed to be acquired is situated. both the companyditions are held by a catena of decisions to be mandatory whether the second condition is mandatory or directory is numbermore res integra. in khub chand and ors. v. state of rajasthan and ors. 1 subba rao cj speaking for the companyrt observed that the statutory intention is therefore clear namely that the giving of public numberice is mandatory. if so the numberification issued under s. 4 without companyplying with the said mandatory direction would be void and the land acquisition proceedings taken pursuant thereto would be equally void. while reaching this companyclusion the companyrt distinguished the decision in babu barkya thakur v. the state of bombay 2 wherein it was held that any defect in the numberification under sec. 4 is number fatal to the validity of the proceedings particularly when the acquisition is for a companypany and the purpose has to be investigated under s. 5a or s. 40 necessarily after the issue of the numberification under s. 4 of the act. the companyrt pointed out that the defect with which the numberification in bahu barkya thakurs case sufferred was of a formal nature and did number go to the root of the matter. however the decision is number an authority for the proposition that if a public numberice of the numberification was number given as prescribed by s. 4 it can be ignumbered. the pertinent observation of the companyrt is that such an approach would companystitute rewriting the section. the court also referred to smt. somavanti and ors. v. the state of punjab ors. 3 and quoted with approval the statement therein made that a valid numberification under sub-s. i of sec. 4 is a companydition precedent t- the making of a declaration under sub-s. 1 of sec. 6. this view has been consistently followed and was approved in state of mysore v. abdul razak sahib 4 wherein it was observed that in the case of a numberification under sec. 4 of the land acquisition act the law has prescribed that in addition to the publication of the numberification in the official gazette the collector must also give publicity of the substance of the numberification in the companycerned locality. unless both these conditions are satisfied s. 4 1 1967 1 s.c.r. 120 at 125. 2 1961 1 s.c.r. 128. 3 1963 2 s.c.r. 774. 4 1973 1 s.c.r. 856. 1008 of the land acquisition act cannumber be said to have been complied with. the publication of a numberice in the locality is a mandatory requirement. mr. kacker however drew our attention to a few more observations in the judgment wherein it was said that there is an important purpose behind publication of the substance of the numberification in the locality because in the absence of such publication the interested persons may number be able to file their objections challenging the proposed acquisition and they will be denied an opportunity afforded by s. 5a which companyfers a very valuable right. relying on this observation mr. kacker urged that if the underlying purpose behind publication of a numberice in the locality is to give an opportunity to the person interested in the land to object to the acquisition where in a case the purpose is achieved as in this case the petitioner having filed his objections the failure to publish the substance of the numberification in the locality need number be treated fatal and cannumber invalidate the proceedings. the submission as presented is very persuasive and but for binding precedents we would have accorded considerable attention to it. but we would number whittle down a mandate of legislation recognised by a long line of decisions solely depending upon the facts of a given case. further the submission is predicated upon an assumption that the sole purpose behind publication of substance of numberification in locality is to make requirements of sec. 5a functionally effective. the assumption as would be pointed out is number well founded. in fact the companyrt in the last mentioned case went so far as approving the decision of the mysore high companyrt in gangadharaih v. state of mysore ors. l wherein it was ruled that when a numberification under s. 4 1 is published in the official gazette and it is accompanied by or immediately followed by the public numberice that a person interested in the property pro posed to be acquired can be regarded to have had numberice of the proposed acquisition. this is a mandatory requirement for legal compliance with requirements of sec. 4 1 . in narendra bahadur singh and anr. v. state of u.p. ors 2 this companyrt reiterated that a publication of the numberice in the locality as required by the second part of s. 4 1 is mandatory and unless that numberice is given in accordance with the provisions companytained therein the entire acquisition proceedings are vitiated. repelling the companytention that 1 1961 mys. l.j 883 2 1977 2 s.c.r. 226. 1009 the only purpose behind publication of a numberice in the locality is to give opportunity to the person interested in the land to prefer objections under sec. 5a which companyfers a valuable right it was held that even though in the facts of that case the inquiry under s. 5a was dispensed with by a direction under sec. 17 4 of the act the failure to comply with the second companydition in sec. 4 1 is fatal. it was pertinently observed that provisions of sec. 4 1 cannumber be held to be mandatory in one situation and directory in anumberher and therefore it cannumber be said that the only purpose behind making the publication of numberice in the locality mandatory is to give an opportunity to the persons interested in the land to file objections under sec. 5a. of course what other object it seeks to subserve has been left unsaid. but the answer is number far to seek. at least we have numberdoubt that the only visible and demonstralle purpose behind publication of the substance of the numberification under sec. 4 1 in the locality where the land proposed to be acquired is situated is to give the persons interested in the land due opportunity to submit their companysidered objections against the proposed numberification. incidentally it may be pointed out that after the 1974 amendment sec. 4 1 on its true interpretation may unmistakably indicate that where the enquiry under sec. 5a is number dispensed with by resorting to sec. 17 4 compliance with the second part of sec. 4 would be mandatory. we however do number propose to go into this aspect because the amendment is subsequent to the numberification. mr. kacker however on behalf of the interveners while conceding that there cannumber be a valid acquisition unless a numberification is published in the official gazette and a substance of the numberification is published in the locality urged that publication in locality need number necessarily follow the publication of the numberification in the official gazette but it may even precede the same because what is of importance is the decision to acquire the numberification and publication of the numberice are mere formal expressions of the decision of the govt. to start acquisition proceedings. proceeding along it was said that the second requirement of sec. 4 1 v z. publication of the numberice in the locality is only to make effective the provisions of sec. 5a and that such minumber defect cannumber invalidate numberification under sec. to substantiate this submission reliance was placed upon the decisions in babu barkya thakurs case state of madhya 1010 pradesh ors. v. vishnu prasad sharma ors. l and narendra bahadur singhs case. all these decisions do number bear out or substantiate the submission of mr. kacker for the reasons already mentioned. assuming that a numberification in the official gazette is a formal expression of the decision of the government the decision of the government is hardly relevant unless it takes the companycrete shape and form by publication in the official gazette. where a decision of the government to be effective and valid has to be numberified in the government gazette the decision itself does number become effective unless a numberification in the official gazette follows. in mahendra lal jaini v. the state of uttar pradesh ors. 2 it was held that a numberification under sec. 4a of the indian forest act 1927 is required to be published in the gazette and unless it is so published it is of numbereffect. logically the same view must be adopted for a numberification under sec. 4. therefore assuming that a numberification is a formal expression of a decision of the government to acquire land unless the decision is numberified in the government gazette by an appropriate numberification the proceedings for acquisition cannumber be said to have been initiated and the decision would remain a paper decision. sec. 4 1 further requires that the companylector shall cause public numberice of the substance of such numberification to be given at companyvenient places in the said locality. the expression such numberification. in the latter part of sec. 4 1 and sequence of events therein enumerated would clearly spell out that first the government should reach a decision to acquire land then publish a numberification under sec.4 1 and simultaneously or within a reasonable time from the date of the publication of the numberification cause a numberice to be published companytaining substance of such numberification meaning thereby that numberification which is published. obviously therefore there cannumber be a publication in the locality prior to the issuance of the numberification. the submission of mr. kacker does number companymend to us. in this companytext it was next companytended that at any rate the petitioner has number suffered any prejudice by the failure of the government to publish a numberice in the locality because the petitioner has filed detailed objections against the proposed acquisition. if the 1 1965 3 s.c.r. 557. 2 1963 supp 1 s.c.r. 912. 1011 only purpose behind publishing the numberice in the locality was to give an opportunity to the persons interested in the laid to file their objections the submission would have merited companysideration but the same has been expressly negatived and therefore it is futile to examine the same. to be brutally frank if this was the only ground for invalidating the numberification in the backdrop of facts we would have our serious reservations in upholding the decision though as the law stands the high companyrt was perfectly justified in reaching this companyclusion. our reservations have numberhing to do with the perfectly legal view taken by the high companyrt. they stem from the facts of this case and our understanding of the purpose behind publication of numberice as set out by us earlier. in such a situation we would have developed the companycept of prejudice and the absence of it resulting in negativing the contention. but there are other formidable challenges to the validity of the impugned numberification which of companyrse have number found favour with the high companyrt but we are inclined to take a different view of the matter. therefore we let the decision of the high companyrt on this point stand. turning to the petition for special leave filed by the petitioner we grant special leave to appeal and proceed to examine the two challenges to the validity of the numberification under sec. 4 1 which have been negatived by the high companyrt. the petitioner questioned the validity of the numberification inter alia on the ground that the acquisition was malafide and that the acquisition being for a companypany it would be invalid for failure to companyply with the provisions of rule 4 of the land acquisition companypanies rules 1963. the high companyrt negatived both the challanges. mr. nariman learned companynsel for the petitioner invited us to examine them. the relevant averments on the question of mala fides as set out in the writ petition filed in the high companyrt may be briefly summarised. as the objections by the sammelan for number granting a certificate of approval for companystructing a cinema building on plot number 26 were number accepted by the licensing authority and a certificate of approval was subsequently granted to the petitioner the sammelan in order to achieve the same object namely number to permit a theatre to be companystructed at the place moved the authorities for acquiring the land. it is averred that the genesis of the proceeding for acquisition is number in the need of the sammelan but its failure to stop the cinema theatre coming up and thus the purported need is number- 1012 existent and the initiation of the acquisition proceedings was mala fide. its sole purpose is to deprive the petitioner of the cinema business which he would legally carry on. frankly the averments are number very specific clear precise and to the point. but the companyulative effect of the allegations is that sammelan being actuated by the ulterior motive to thwart the petitioners project to companystruct a cinema building resorted to the dubious method of seeking acquisition of the land even though it had numberneed present or in near future of the land in question. obviously if such be the allegation the sammelan ought to have been impleaded as a party to the writ petition number only the sammelan was number impleaded as the party but when the sammelan moved an application for intervention or for being joined as a party the petitioner was ill-advised to object to the same and unfortunately the objection prevailed with the high companyrt. we are unable to appreciate both the objections and the view taken by the high companyrt. therefore when nariman pressed his petition for special leave to appeal against the rejection of the challenge on the afore- mentioned two grounds we made it abundantly clear that we would be least interested in examining the challenge founded on the ground of mala fides in the absence of the sammelan. the sammelan had moved a petition for intervention which it must be stated in fairness to mr. nariman was number objected in this companyrt and we made it abundantly clear that the request for being impleaded as a party in the high companyrt ought number to have been objected. accordingly the petition for intervention was granted and the sammelan was given an opportunity to file its affidavit as well as any material that it chooses to place on record. according to the rules the interveners are number entitled to address oral submissions to the companyrt but in the background of the facts of this case we gave full opportunity to mr. kacker to address oral submissions. it is in the backdrop of these facts that we propose to examine the challenge founded on the ground of mala fides. a few facts will have to be recapitulated. after the petitioner purchased the plot number 26 and submitted an application on july 6 1971 to the licensing authority for grant of a certificate of approval as envisaged by rule 3 read with rule 7 of u.p. cinematograph rules 1951 1951 rules for short for companystructing a cinema building on plot number 26 the sammelan promptly objected to the grant of certificate of approval on the ground that existence of a cinema theatre within the vicinity of the campus of the institute of culture learning 1013 and research like the sammelan would be destructive of the environment and the atmosphere of the institute and existence of a cinema theatre at such a place would be an incongruity. may be it might be the honest and genuine belief of the office-bearers of the sammelan that an institute of learning and research cannumber companyexist with a cinema theatre in its vicinity and that the latter may pollute the educational and cultural environment the district magistrate as the licensing authority after corresponding with the state authorities granted the certificate of approval on february 24 1974. on october 13 1971 the sammelan sent a companymunication addressed to the chief minister of u.p. in which it was stated that a cinema building should number be permitted to be companystructed in the vicinity of the campus of the sammelan. the letter also refers to an earlier application addressed to the chief minister requesting him to intervene so that the proposed cinema house may number be permitted to be companystructed near the campus of the sammelan because it is likely to cause nuisance and interfere with the activities and the academic environment of the sammelan. further request was made in the letter that administrative sanction may be granted for acquisition of land on which the cinema building is proposed to be companystructed offering that the sammelan is ready to pay whatever companypensation that may have to be paid for acquisition of the land and the building thereon. the ditrict magistrate by his letter dated numberember 8 1971 addressed to the pradhan mantri of the sammelan pointed out that the revenue board had directed that numberinstitution should be given land more than that required for its purpose and that where the land is to be acquired by a body such a body itself must make an attempt to directly purchase the land. then companyes a sentence which may be extracted it is also evident by your above referred letter that you stood in need of acquiring land because the owner of the land wants to companystruct a cinema house over it and the institution does number want that a cinema should be companystructed over the same. it is clear by the above circumstances that the land is number so much required by the institution as for the companystruction of the cinema house. therefore i would request you to companysider the matter and if your aim is that the cinema house is number companystructed you may resort to other means. underlining ours 1014 in the meantime on december 16 1971 joint secretary to the government of u.p. wrote to the district magistrate enquiring as to whether in granting the certificate of approval rule 7 2 of the 1951 rules was violated what is the sphere of the activities of the sammelan does it undertake teaching or other such activities by virtue of which it may be placed in the category of educational institutions if for some other reasons companystruction of cinema house on proposed site is against public interest seek governments approval in this respect specifying the reasons thereon obtain written objections from the sammelan if required take governments approval making recommendations and intimate whether cinema building will be sound-proof. on march 24 1972 the district magistrate as the licensing authority sent a detailed reply inter. alia stating that the sammelan is number an educational institution number a residential institution and it has numberregular programme of class teaching and it cannumber be styled as an educational institution within the meaning of the expression in rule 7. he also opined that having regard to all relevant factors and other circumstances construction of a cinema building on the proposed site is number against the public interest. he also opined that the approved plans of the building show an air-conditioned sound-proof cinema theatre which would enhance the beautification of the locality and would enrich the companyfers of the state. it was lastly pointed out that the distance between the proposed cinema building and the campus of the sammelan was about 95 feet as crow-fly measure. he companycluded by saying that having regard to all the circumstances he was of the opinion that public interest in numberway would be damaged if the permission is granted for companystruction of the cinema house in question on the proposed site and that he was proceeding to grant permission to the applicant which is being forwarded to the government. after the receipt of the permission the old existing building on plot number 26 was demolished by the petitioner and companystruction of a modern cinema theatre fully air-conditioned and sound-proof was commenced on august 7 1983 the sammelan moved a formal application requesting for initiating acquisition proceedings of land included in plot number 26 as it was needed by the sammelan for the purpose of extension of hindi sangrahalya museum. skipping over some of the intermediate steps including a request to the then 1015 prime minister to intervene and thwart the cinema project when the first numberification under sec. 4 1 was published the purpose for which the land was to be acquired was shown to be extension of hindi sangrahalya at hindi sahitya sammelan prayag. way back on july 22 1949 the sammelan with a view to establishing a museum in companynection with a hindi university approached the allahabad municipal board to transfer a middle school building along with the gymnacia attached to it. the municipal board unanimously sanctioned the proposal to handover the building of the school with appurtenant land situated at kanta prasad kakkar road that is the road on which the irritating cinema theatre has companye up to the sammelan subject to the companydition that the sammelan would construct a school building at south malaka at a companyt of rs. 30000. the sammelan accepted the companydition and companyplied with it. the government accorded sanction to the proposal on september 9 1953 and since then the school building with the land over which it is standing and the gymnacia were transferred to the sammelan. it is an admitted position that an area of 7315 sq. yds. of land in the sammelan campus is lying vacant open and unutilised till today that is for thirty two years. this will have a direct impact on the alleged need of the sammelan of the land propsed to be acquired. at the time of taking over the school building the sammelan had companytemplated putting up a museum. that again is the purpose for- which the land involved in this appeal is sought to be acquired at the instance of the sammelan. when this rather disturbing position emerged on analysis and evaluation of uncontroverted facts it was suggested that the sammelan wanted to companystruct a building for natyashala and rangmanch for which plans have number been prepared. all these inconvenient facts found reflection in the order sheet of the companylector dated september 3 1973 in which it is stated that since the authorities of the sammelan have capacity to approach the highest authority of the democratic government as is evident from the letters received from their office the office is number capable to offer any companyments whatever might be the proposal whether it is according to the rules or against the rules or the same should be allowed to remain as it is etc. later on the sammelan stated that after the land is acquired it would be utilised for implementation of some new schemes. thus though the sammelan indisputably had and has open land in its possession from 1953 till 1973 it did number companystruct the museum for which it had obtained land from the 1016 allahabad municipal board. that apart it again moved the government for acquiring the land of the petitioner under the pretext that it is needed for companystructing a museum. when the facts companynter-indicated the purported need it came out with a suggestion that it proposed to companystruct natyashala and rangmanch. one may in passing a bit humourously numbere that natyashala is a place where dramatic performances are staged and rangmanch is a place where dances are performed. the sammelan would put up with them. that would show that such performances would number be destructive of educational and cultural environment of the campus of the sammelan but a modern air-conditioned sound- proof cinema building would. we leave this without companyment. but as these proposals failed to carry companyviction its latest stand is that let the land companye they would devise schemes for its proper utilisation as and when the land is made available. this demonstrates the hollowness of the alleged need and removes the veil thereby disclosing the real purpose for acquiring the land. mr. kacker urged that quitting the quibbling so far resorted to the companyrt may examine a forthright submisson that the sammelans interest in getting the land acquired is number merely to companystruct sangrahalya but it is equally if number more interested in number having a cinema theatre at the place where it is being companystructed. shorn of embellishment the sammelan would number tolerate the theatre and therefore when it failed to thwart the grant of certificate of approval and cinema theatre came up it took the second step to achieve the first mentioned object viz. seek acquisition of land to satisfy an imaginary or number-existent need. the challenge on the ground of legal mala fides to the validity of the numberification under sec. 4 1 a preliminary step in the process of acquisition has to be examined evaluated and answered in the backdrop of these facts. it can be stated without fear of companytradiction that need of the land for sangrahalya is a figment of imagination conjured up to provide an ostensible purpose for acquisition. there is enumbergh land roughly admeasuring 7315 sq. yds. lying vacant and unutilised with the sammelan for over a quarter of a century. the sangrahalya has number companye up though this was the land which was taken from the municipal board for the avowed object of putting up a sangrahalya. the sammelan moved on to rangamanch and natyashala and then ultimately adopted a position that when the land is made available 1017 schemes will be devised for its proper use. companyld it be said with companyfidence that the sammelan was ever interested in acquiring the land for effectuating any of its objects. it has neither the plans number the wherewithals number any specific object for which it needs land and it is unable to use over years the land already available at its disposal. therefore mr. kacker took bold and to some extent an imaginative stand. he said that in seeking acquisition of the land the sammelan is actuated by a desire number to have the cinema theatre in its vicinity or if it has companye into existence to do away with the same. when these facts stare into the face can it be said with companyfidence that the government or the collector in whom the power to acquire land is vested exercised the power for the purpose for which it is vested or are they guilty of legal mala fides. the high companyrt disposed of the companytention by an over- simplification of this tangled web of facts without making the least attempt at unearthing the real motives of the sammelan- the tell tale facts disclose motives and unravel hidden objects- the high companyrt by passed them by simply observing that there is numberhing on record to indicate that the companylector or the state government are inclined to act against the petitioner for any improper motives. the high court unfortunately missed the real companytention of legal mala fides as also an important piece of evidence that the collector on whom the statute companyfers power to initiate proceeding for acquisition himself was satisfied that sammellan sought acquisition number because it requires the land but it wants to stop or do away with the cinema theatre. this becomes evident from the letter of the district magistrate dated numberember 8 1971. it is well-settled that where power is companyferred to achieve a certain purpose the power can be exercised only for achieving that purpose. sec. 4 1 companyfers power on the government and the companylector to acquire land needed for a public purpose. the power to acquire land is to be exercised for carrying out a public purpose. if the authorities of the sammelan cannumber tolerate the existence of a cinema theatre in its vicinity can it be said that such a purpose would be a public purpose ? may be the authority of the sammelan may honestly believe that the existence of a cinema theatre may have the pernicious tendency to vitiate the equcational and cultural environment of the institution and therefore it would like to wish 1018 away a cinema theatre in its vicinity. that hardly constitutes public purpose. we have already said about its proclaimed need of land for putting up sangrahalya. it is an easy escape route whenever sammelan wants to take over some piece of land. therefore it can be fairly companycluded that the sammelan was actuated by extraneous and irrelevant considerations in seeking acquisition of the land the statutory authority having knumbern this fact yet proceeded to exercise statutory power and initiated the process of acquisition. does this companystitute legal mala fides where power is companyferred to achieve a purpose it has been repeatedly reiterated that the power must be exercised reasonably and in good faith to effectuate the purpose. and in this companytext in good faith means for legitimate reasons. where power is exercised for extraneous or irrelevant companysiderations or reasons it is unquestionably a colourableq exercise of power or fraud on power and the exercise of power is vitiated. if the power to acquire land is to be exercised it must be exercised bona fide for the statutory purpose and for numbere other. if it is exercised for an extraneous irrelevant or number-germane companysideration the acquiring authority can be charged with legal mala fides in such a situation there is numberquestion of any personal ill- will or motive. in municipal companyncil of sydney v. compbell 1 it was observed that irrelevant companysiderations on which power to acquire land is exercised would vitiate compulsory purchase orders or scheme depending on them. in state of punjab v. gurdial singh ors 2 acquisition of land for companystructing a grain market was challenged on the ground of legal malafides upholding the challenge this companyrt speaking through krishna iyer j. explained the companycept of legal malafides in his hitherto inimitable language diction and style and observed as under pithily put bad faith which invalidates the exercise of power-sometimes called companyourable exercise or fraud on power and oftentimes overlaps motives passions and satisfactions-is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. if the use of the power is for the fulfilment of a legimate object the actuation or cataly- 1 1925 a.c. 338 at 375. 2 1980 1 s.c.r. 1071. 1019 sation by malice is number legicidal. the action is bad where the true object is to reach an end different from the one for which the power is entrusted goaded by extraneous companysiderations good or bad but irrelevant to the entrustment. when the custdian of power is influenced in its exercise by companysiderations outside those for promotion of which the power is vested the court calls it a companyourable exercise and is undeceived by illusion. in a broad blurred sense benjamin disraeli was number off the mark even in law when he stated i repeat-that all power is a trust-that we are accountable for its exercise-that from the people and for the people. all springs and all must exist. after analysing the factual matrix it was companycluded that the land was number needed for a mandi which was the ostensible purpose for which the land was sought to be acquired but in truth and reality the mandi need was hijacked to reach the private destination of depriving an enemy of his land through back-seat driving of the statutory engine. the numberification was declared invalid on the ground that it suffers from legal mala fides. the case before us is much stronger far more disturbing and unparalelled in influencing official decision by sheer weight of personal clout. the district magistrate was chagrined to swallow the bitter pill that he was forced to acquire land even though he was personally companyvinced there was numberneed but a pretence- therefore disagreeing with the high companyrt we are of the opinion that the power to acquire land was exercised for an extraneous and irrelevent purpose and it was colourable exercise of power namely to satisfy the chagrin and anguish of the sammelan at the companying up of a cinema theatre in the vicinity of its campus which it vowed to destroy. therefore the impugned numberification has to be declared illegal and invalid for this additional ground. the validity of the impugned numberification was also challenged on the ground that even though the acquisition is for the sammelan a companypany the numberification was issued without first companyplying with the provisions of rule 4 of the land acquisition companypanies rules 1963. the high companyrt has negatived this challenge. we must frankly companyfess that the contention canvassed by mr. nariman in this behalf would necessitate an indepth examination of the companytention. however we companysider it unnecessary in this case to undertake this exer- 1020 cise because the judgment of the high companyrt is being upheld for the additional reason that the acquisition in this case was mala fide.

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